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The economics of Obamacare from the customer’s perspective

April 1st, 2014 · No Comments

Much ink and bits have been written about the economics of Obamacare from the taxpayer’s perspective – but little has been written about Obamacare from the perspective of a consumer. In the “real world”, before you create a product, you spend a lot of time understanding your customer – what will motivate him to part with his money and buy your product? The Obama-nics sit and wonder – why aren’t there millions of people signing up for Obamacare – it’s such a great deal??

As of the almost-not-quite-deadline-with-possible-extensions date of March 31, 2014 – Obama claims to have 7 million people signed up for Obamacare – 80% or more had coverage previously that was canceled due to Obamacare itself… so we can be glad that a whopping 1.4 million people husoave health insurance now that didn’t have it before. The problem, of course, is that we still have 30-40 million uninsured individuals.

We need to recall the fact that the main goal of Obamacare was to get everyone “covered” so that hospital emergency rooms would not be used as doctor’s offices and preventable illnesses can indeed be prevented by patients who have the resources to see a physician.

It will be many months before we have a real breakdown on how many of those new enrollees have actually paid for their insurance and how many are enrolled due to the expansion in the Medicaid program…. but for now, we can safely assume that a pitiful few people actually have insurance now that didn’t have it before. In short, the customer isn’t “buying” – even with financial incentives and penalties.

The question is “why?”…..why didn’t people sign up in droves – it can’t totally be blamed on a messed up website.

The answer lies (as it usually does) in economics. People look at their upside and their downside and make an decision based on the value they perceive in signing up…and the threat they perceive in not signing up.

Healthcare insurance is not like fire insurance – where the MOST you can loose is the value of your home and possessions. With healthcare, the most you can loose is: absolutely everything…. as you will literally pay every dollar you have – every asset you can pawn to get well.

Healthcare insurance, like all insurance is a mechanism to monetize “risk” – I can sell my risk to the insurance company by compensating them with my premium payments. In exchange, if I get sick, they promise to pay my medical bills (after the deductible). In essence, they are limiting my healthcare risk to the amount of the deductible and any copay/coinsurance that is involved – they take all the risk beyond that amount….and they get your premium dollars to take that risk.

The critical element is that we should not forget about Medicaid – that nice free, catchall program to make sure that those with no assets and not enough income can get healthcare.

Given the fact that the worst-case scenario is that a person ends up on Medicaid: health insurance is really just limiting the risk that your assets and your income will be consumed by medical expenses.

Now we can start to understand why people are not flocking to buy an Obamacare policy – because it will consume their resources to the tune of several hundred to a thousand dollars per month and they are still on the hook for most of their medical expenses up to their $12K deductible limit. The average family will pay $3-20K/year on insurance and then still be on the hook for the first $12K in expenses. If they don’t get covered – they get hit with a modest fine and their assets and much of their income is at risk.

However, in the event that they loose their assets and income – they then become Medicaid recipients – and voila – their healthcare payments are covered.

So the person with $10-20K of assets (which is the bulk of the demographic that Obamacare is focused) seems to be saying that they will risk their modicum of assets so they can avoid spending $3-20K/year in premiums for an event that may not happen….at which point they are going to loose the bulk of their assets to the deductible before any insurance kicks in.

In short, if you don’t have assets to protect, what’s the point of paying a huge chunk of your income to protect them?

In summary, Obamacare is not there to insure payments for healthcare – it is there to insure the assets of people so that they are not wiped out during a medical catastrophe. With Medicaid catching those who are wiped out, the ‘risk’ to the person is not worth the price of the (discounted) premiums – and people aren’t willing to part with their money to buy the product.

The cost-benefit is not motivating and hence people are not buying.

ADDENDUM:
After writing the above column, I think I’ve stumbled upon the ultimate scam – by the insurance companies.

Think about this scenario for the millions of fiscally marginal folks who buy an Obamacare policy and can barely pay the premiums.

They buy a policy… the insurance company gets its premiums (either from the customer or from the government)… and then the customer incurs a catastrophic medical condition…forcing him to pay $12K/year in deductibles which most can’t afford. This $12K/year hit pushes the subscriber into the poverty level where Medicaid then takes over and pays the really big medical bills.

The insurance company gets the premiums and gets paid for assuming the risk – but do not have to pay out because much of this crowd will be forced into Medicaid and hence free the insurance company from paying out.

How’s that for a major (totally legit) scam?

→ No CommentsTags: Healthcare · Political · Taxation · Uncategorized

Other family’s priorities – at what point do they involve me?

October 28th, 2013 · No Comments

I’m just going to say what I think a lot of people think….

The strange thing about discourse in today’s “healthcare debate” is that somehow a medical bill is ‘different’ in some way from any other kind of bill – that it’s somehow verboten that a medical bill should come in and wipe out a family’s savings. If a family didn’t insure their home against fire – and a fire breaks out – their home (and most probably most of their assets) go up in smoke and they are left broke – I don’t hear people screaming that we should subsidize fire insurance…??

I know that finances are tight in any family – and some people complain that it is either “food” or “medical insurance”…. yet I think if we really look at the finances of people who say “it’s food or insurance”… we would find that these families have prioritized many things (not just food) ahead of purchasing a minimal health insurance policy – I’m sure these families have a TV (maybe more than one)… they probably pay a cable bill monthly… I’m sure you would find cell phones…an IPOD or two… a car (or 2).

I don’t begrudge people buying these other “things” and I don’t begrudge people setting their own priorities – but when you start taking money out of my pocket so that you can afford all those things that you prioritize higher than buying health insurance – then that’s a different story. If you want my money – then ask me – I am very charitable – but don’t steal it from me and call it “my obligation”. It is my obligation to help – if you ask me, but it is not my obligation if you steal my money.

Use of public taxation to pay for health insurance for people who are lower income but “not poor” is not like use of public taxes to pay for a military – the rich pay vastly more in taxes yet when the military protects their person and property it is not in any way diminished by the fact that lots and lots of other people who didn’t pay a nickel – are also protected. Not so with public taxes being used to subsidize the purchase of health insurance for lower income families. Every dollar the government takes from my pocket in order to make it cheaper for a lower income person to buy a product (insurance) – that dollar is not available to me to purchase my cell phone – yet it frees up a dollar for the lower income person to purchase his cellphone.

Yes, the government in the U.S. has created a business environment that has made healthcare insanely expensive – more than it needs to be and there is much we could do to set up rules that would reduce the cost of healthcare – and thus reduce the cost of healthcare insurance….and there is much the government can do to allow people with pre-existing conditions to purchase health insurance at a reasonable rate… but let’s not let that derail this discussion.

The basic tenet of Obamacare is simply income and asset redistribution – and in the process it has trampled a lot of basic principles that the economy and society in the USA is built upon – the chief among them being personal responsibility, private property and our personal responsibility to help our fellow man.

→ No CommentsTags: Healthcare · Political · Taxation

We’re missing the point….

October 3rd, 2013 · No Comments

Please tell me where I’m going wrong:

It seems that we’ve lost track of the central issue with respect to Obamacare… the question isn’t whether or not Obamacare can be made to work.

The question is “SHOULD” it be made to work?

The central question that seems to be conceded even by some conservatives is:

What obligation do I have to pay a non-poor person money so the non-poor person can buy a product cheaper than I can buy it?

If you are poor, sick, elderly (where I do have a civic obligation) that’s a different story…if you are not… why does the state have a role in redistributing wealth to those who aren’t in poverty?

If the non-poor person gets my money to buy a product, the non-poor person has more money left over to go out to dinner, buy a nice TV, a car …whatever. And I have less money to go out to dinner, buy my nice TV or get a better car.

This is a central and core question.

The obscene element of this whole charade is that government has regulated and messed up the healthcare system so much (in the last 30 years) that healthcare costs 2-3x what it costs in other developed countries… and THEN the government uses the excuse that the cost of insurance is so high that they have to slather on a mess like Obamacare to make it possible for the non-poor to be insured.

Why not set up a regulatory environment which allows healthcare to be delivered at a reasonable cost so that health insurance can be reasonably priced?

Right now, the only people making money in the healthcare business are the lawyers and the insurance companies.

ppppsssttt… guess who created Obamacare?…. lawyers and insurance companies…. surprised?

→ No CommentsTags: Healthcare

The roots of failure in the “War on terror”

July 24th, 2013 · No Comments

The guilty, the responsible and the innocent

It is hard to believe but 4 decades ago, my 7th grade English teacher may have put her finger on the roots to why we are having such difficulties in winning the “war on terror”.  She kept on telling us that “words are important”…that words are the primary windows onto what and how we think.

The word “terror” can have many definitions:

  • an overwhelming fear or anxiety
  • the use of extreme fear in order to coerce people

It would be silly to declare a war on a “feeling”… so we must be declaring a war on “the use of extreme fear in order to coerce people”.

But that seems odd too… we’re declaring war on the use of a tactic of coersion?  Isn’t the use of a military itself a mechanism to fight “coersion”??  If people are firing bullets and missiles at you – then you have to fight back, move away, accept being dominated… or die.  Bullets and missiles are a perfectly good means of “coercion”…why is “terror” something special that we should go to war against it?

My 7th grade English teacher would probably pipe in here and point out that you can’t go to war against a method or tactic of coercion… you can only use the instruments of war against the people who use that form of coercion…. she would then communicate this by scrawling in that horrible red pencil she used.  She would probably ask “why only that form of coercion?  Wouldn’t you go to war against people who bomb your cities with missiles and mortars?”

She would be right of course.

So where did we go wrong…where did our thinking start getting confused?  Clearly when some organization motivates their members to fly jumbo jets into your buildings – it deserves some response…but what response and how?

Our failure to put a correct name on the post 9/11 mission, when President Bush coined the term “war on terror” was only part of the problem.  As a nation, we injured ourselves further by not understanding the difference between “the guilty” – those who actually perpetrated terror, “the responsible” – those who created the space for such acts to be contemplated and “the innocent”.

As Americans we have been indoctrinated with the concept that there are only two moral states: “guilty” and “not-guilty” – we look at the world through the eyes of a judge who can only decide between these two states.  Only if a person is “guilty” is a society permitted to extract a penalty.  We injure ourselves further when naive people take a greater leap and confuse “not-guilty” with “innocent”.

Words have consequences.  They mirror our thinking.  If our words are incorrect, it is probable that our thinking is incorrect and it is then not surprising that failure usually follows.

In a war, clearly the battle must be waged against “the guilty” – the combatants.  But in war, it is required to also battle the forces which are responsible for the war: the industrial complex which manufactures the weaponry, the transportation system which transports the troops, supplies and labor needed to make war.  In essence any activity or institution which enables the war effort can be destroyed under international laws of war.  These are “the responsible” parties – those who enable the war to be waged.

In our current “war on terror”… we can identify “the guilty”.  They are the ones with guns, the ones with bombs strapped to their bodies, the ones who butcher innocent civilians in buses, pizza parlors, Mosques and Synagogues.   We can certainly assume there are people who would be considered “innocent”.

This begs the question: who are “the responsible” parties?  President Bush said that those who fund terror, those who harbor terrorist are “responsible”…. but there are clearly others and this is where we, as members of a group we call civilization had better be precise.

Responsible parties include (but not necessarily limited to) the society’s politicians, religious leaders, teachers etc who inflame their “flock” to go out an murder indiscriminantly “the others” whom they view as deserving of death.  Those who organize, fund and execute summer camps where children are indoctrinated to become suicide bombers are clearly “responsible parties” and as such are clearly not “innocent”.  In short, those institutions which promote the wanton mass murder of innocents are the “munitions factories” of present day terror operations.

The moral question on the table is – can these “responsible parties” be reformed – or must they be eliminated?

→ No CommentsTags: Israel · Political · War on Terror

…and the band drones on.

March 10th, 2013 · No Comments

Let’s get something straight… the argument should have absolutely nothing to do with drones.   I’m quite surprised that nobody seems to be making this point.  Is it that drones bring some kind of reminiscence of “The Terminator” to life?   What on earth is the difference between a person telling a pilot of an F16 to release a hellfire missile down on someone in Yemen and the same person tapping the guy sitting at the drone console in some bunker burried in some mountain here at home….either way, the guy at the other end of the missile is dead.

Is it the “remote control” nature of the killing?  Is that what people are droning on about (pun intended)?  Why is it more “remote” when done at a pseudo game console vs. when it is done by pushing a red button inside an F16… or for that matter, a trigger on a sniper rifle?  If you want to get rid of the remoteness…I suppose we should go back to using a sword.

So now we get to what Senator Rand Paul was droning on about in front of the Senate for 13 hours.  It wasn’t about “drones”…though perhaps that is what started him on his quest… it was the concept of whether or not the President of the USA has the constitutional right/power to order the killing of an American citizen on U.S. Soil if that person was not posing an imminent threat against anyone (ie: sitting at a cafe).

Senator Paul was justified in asking this question because AG Holder made a huge point of equivocating about the answer to this very simple question during his interview before the Senate subcommittee that Senator Paul was on.  The fact that AG Holder could not give a single one syllable answer to this question when asked over and over again by Senator Cruz – led everyone (including me) to wonder if the President could actually be thinking that he indeed had this power under the U.S. Constitution.

The fact that many people in Washington D.C. as well as many people in the press can’t seem to get their brains wrapped around the validity of this most basic of concerns – concerns me greatly indeed.

→ No CommentsTags: Political · War on Terror

Smaller government, lower taxes – what is the Tea Party really saying?

December 14th, 2012 · No Comments

There is great confusion in the United States over the advent of the “Tea Party”…. some say “TEA” means “Taxed Enough Already”.   Everyone is amazed that such a grass-roots movement just “sprang to life” and has become a dominant force in today’s political discourse.

But what are the Tea Party folks really saying?  Yeah… they think taxes are too high…but what are they really saying?  If for every dollar in taxes you paid, you got a 1 carat diamond in return, you wouldn’t be complaining about your taxes – right?   What is money anyways?…why does it always have to come down to an issue of money?

The answer is quite simple.  Money is the way we measure “contribution”, the way we measure “value”.   When the Tea Party folks complain about taxes being too high, they are saying quite simply…we are NOT getting a good “value” for our tax dollars.  The Tea Party people believe that, in general, our taxes are not spent wisely by our Federal and State governments and that too much of our money is spent on people (typically bureaucrats) who do not produce anything of value.

The Tea Party view is that government should stick to the basics: providing services and facilities that we cannot obtain by acting as individuals or as smaller communities.  Building a military comes high on the list…but commanding us to spend our own money on medical insurance is NOT on the list.  The Tea Party is looking to the leaders it votes for to be responsible stewards of our communal treasure chest – using the money wisely and making sure we see value for every dollar.

Pick an issue, when you see our government wanting to spend billions to put on a show trial in NYC for a person who has confessed to being the mastermind behind 9/11 – we are not getting our value – he should be expeditiously tried in Gitmo and dispatched quickly to his 72 virgins after due process.  When you see our government spending millions of dollars suing Arizona over a law that allows it to enforce laws that the Federal government “should be” enforcing but is not…this is a waste  of our money.   When our government spends millions finding and imprisoning terrorists and then turns around and gives them to Yemen or Saudi Arabia so they can be repatriated back to their terrorists compatriots – this is a waste of money.

→ No CommentsTags: Political · Taxation · Uncategorized

Democracy is not a “social condiment”

December 13th, 2012 · No Comments

Democracy is not a “social condiment”…something you can slather on a society to make it taste better. Democracy is how we express the basic respect we feel for one another. Democracy is an “effect” not a “cause” – we have democracy because we respect each other’s inalienable rights.

If you have a society which views “the other” as subhuman – worthy of death, then you can’t just slather on “democracy” without creating a totalitarian government ruled either by the majority or by a minority with the tacit cooperation of those who choose to remain silent and side with the ruling minority party.

Hitler came to power through the ballot box and then proceeded to create a totalitarian regime by butchering his opponents.  At no time did the Nazi party represent more than a small percentage of the German populace – yet they rose to power and created a force which nearly destroyed large swaths of Europe, Asia and Africa.

The only way Germany was able to create a democratic tradition was to have the bulk of its male population of fighting age kill via war and the rest of the population de-programmed over the course of the following decades of explicit or de-facto occupation.

Over the course of the next decade, America will learn the wisdom of this as the experiment of Afghanistan, Iraq and the Arab Spring unwind into various levels of totalitarian horror.

– Robert Light

→ No CommentsTags: Church-State · One Nation Under God · Political · War on Terror

Why Jews are Liberals?

November 6th, 2012 · No Comments

I have just finished Norman Podhoretz’s book “Why are Jews Liberals?” It was an excellent work – both from the perspective of providing a concise history as well as positing his own view of why Jews are “still liberals”.

By all accounts of Podhoretz’s bio, he is the age of my father – who is still an arch liberal and voted for Barack Obama – twice. I am in my early 50′s and have become one of those “liberals who figured it out” and have become conservative (small ‘c’) in my “old age”.

With that caveat, I’d like to offer a view that takes a slightly different approach than the one that Podhoretz took in his book…and attempt the same mission to answer the question “why are Jews Liberals?”.

As all good (Jewish) presentations start…this one starts with a joke…one that has bearing on my message.

There once was a poor Jewish peasant in Poland who was getting on in his years and woke his wife up one morning… he said….before I die, I want to have a meal like a rich man…I want to eat a meal of kreplach. So his wife woke up and went to the kitchen…she said…my husband, we don’t have any meat..what should I do? Her husband said…ok…so make them without meat. She then looked around and said, my husband…we don’t have any eggs….he replied…so make them without eggs. She then looked around and said…but we have no oil… the husband replied…so…make them without oil.

So she combined the flour, some water and made the dough…she didn’t have any meat for the filling so she stuffed them with potato – they looked just like kreplach. She baked them and served them to her husband.

Her husband sat down with great delight… smelled the kreplach his wife made for him…and then ate one…. the wife was silent.

The man swallowed….grimaced…. and then push the plate aside and exclaimed… “Hrrmphf… I just don’t see what those rich people see in these!!?”

This is what has happened to the Jewish people…they went through centuries of being incredibly poor…most of them were illiterate and most had only their mama-loshen [mother tongue] and a few traditions to keep them grounded – they knew little of the foundations of their faith, the backbone of their religion. As generations transferred to America, bit by bit they lost their grounding in Judaism – they understood less and less the meaning behind their traditions…in the end they saw Judaism as a Kreplach made without meat, oil or eggs…they couldn’t see “what they (their ancestors) saw in it”.

The lack of grounding meant that they could shift their political position in a fairly fluid way – not between “left wing” and “right wing” but on the social structure spectrum itself. My position here is that the spectrum is not a linear left-vs-right spectrum but a circular continuum. I agree with Podhoretz that before the enlightenment, the Jews were on the left-wing of the political spectrum at the time. Figure 1 is an attempt to show this….the black curve shows the political spectrum superimposed on the circular continuum of the social structure spectrum.


Figure 1 – Jews are on the liberal wing of the spectrum

At the top of this circular spectrum are the command-economies – centralized economies where a single ruler is responsible for the major decision making – this ruler can delegate to subordinates (the aristocracy in the case of the monarchy, the communist party aparatchiks in the case of communism). The bottom of the circle are pure democracies or republics – where the people decide on their government and governors.

Judaism clearly had an impact on the concept of what we now call “Democracy” – even through such unlikely transponders as Spinoza’s influence on John Locke and thereby on Thomas Jefferson – many of Judaism’s concepts of rights, responsibilities – the checks and balances required within centralized government – these are all influences from Judaism.

What happened after the enlightenment is that the black-line, the “political spectrum” itself, started shifting and because the Jews had lost their grounding in Judaism, they shifted with it. Note that I could be a bit more favorable to the Jews by stating that they found themselves in the position of dragging the political spectrum towards “the left” and hence had to find themselves leading the march.

However we want to color the history, clearly the political spectrum shifted and the Jews kept their position on “the left” of that spectrum.

Now our figure looks:


Figure 2 – the political spectrum shifts – the Jews follow

With the rise of socialism (and then communism), the political spectrum shifted again around the spectrum – again, because the Jews had no grounding in authentic Jewish philosophy and values, they shifted with it.

Figure 3 – The rise of “socialism” – Jews keep to the “left”

But clearly, as the political spectrum continued to shift – as Podhoretz is a case in point (as well as I) – the Jews did start to shift their set point… but the bulk still seems to be “on the left”. As Podhoretz points out in his book, the current “right wing” is where the “left wing” was in the 1950′s. It is not inconceivable that John Kennedy and Ronald Reagan would have found common cause if they had been able to collaborate.

Whereas before the enlightenment, the Jews (of the then-left) were inspiring Thomas Jefferson et.al. to create our Constitution, nowadays Thomas Jefferson’s view is considered “right wing”.

Figure 4 – The political spectrum of “today”

As Podhoretz points out – it is that the bulk of the Jews today are in a policial party which has adopted socialism as its foundational principals and whose adherents are devout marxists and supporters of dictators such as Chavez and despots such as the PLO.

I would submit that the antidote to this problem is education – that Jews need to understand how the foundation of Judaism speaks to political issues that are front-and-center today. They need to know that there is “more to the Kreplach”. In addition, non-Jews need to understand the foundations of concepts and ideas that they use in political discourse.

I will use an example to illustrate. The issue of “redistribution of wealth”. The Jews of today view this issue as a matter of “social justice” without really understanding the breadth and depth of Judaism’s view on the matter. Like the story of the Kreplach, they see the “effect” of supporting the poor as the only salient feature of the issue. To them, the problem is that the poorer classes need more support. How they get his support is of little importance….hence taxation is an okay means for raising the funds.

Charity

From the Jewish perspective, tzedaka [charity] involves 3 parties – the poor person, the rich person and G-d. From a Jewish perspective, the amount of money a person has is determined by G-d. A rich person is “rich” because G-d wanted him to be so at that time…a poor person is “poor” because G-d wanted it that way at that particular moment. The concept that our wealth (or lack of it) comes from G-d is embedded in directly in the Hebrew language – where there is no “possessive”…you don’t say “My dollar”….you say yesh-li kesef “there is to me – money”.

Whereas there is a sense that all wealth comes from G-d, it is also clear from Jewish tradition that the wealthy man has certain “rights” to his money – if someone takes his money it is considered theft. Hence the rich person’s wealth is more his “responsibility”.

The rich person has certain responsibilities and one of those is to give tzedaka (charity) to the poor person. While the surface view is that the poorer person “got something” and the richer person “gave something”…on a spritual level, both parties were recipients – the richer person got the privilege to give…the poorer person got support. The act of giving tzedaka creates a bond between the richer person and the poorer person and also creates a bond between the richer person and G-d as well as between the poorer person and G-d.

The surface view that only the poorer person “got something” is wrong – just as the nursing baby is the outwardly obvious recipient, the mother wants to nurse the baby and indeed benefits from the interchange…. so too with tzedaka.

The problem with income redistribution is that the money is forcebly extracted from the richer person and given to the poorer person as an entitlement. This does two very destructive things – it makes the richer person seek ways to protect his wealth from theft and it makes the poorer person look at the support as an “entitlement”….not as a benificent gift. The two human parties to the transaction instead of being uplifted, humbled and connected by the transaction – the two parties become arrogant – the richer person hording his wealth and the poorer person demanding it as an entitlement. The connection to G-d of the two parties is also damaged – instead of G-d seeing two people who humble themselves before Him – he sees two arrogant individuals; the richer person ignores his responsibilities and the poorer person becomes entitled and thinks his sustainence comes from the “state” and not from G-d.

Moreover, when a person receives something that he didn’t earn – he feels guilt.  When the gift comes as charity or as a gift from a friend or relative – the receiver expresses gratitude and says “thank you” and thereby relieves him/herself of the feeling of guilt.  But when the money comes as an invisible deposit into their debit account once a month from “the government” – there is no way to express gratitude and the only way the person can assuage his guilt is to feel “entitled”…”I was owed this money”.  This rots the person’s moral core.

So instead of tzedaka being a vital fiber in the fabric of society, the transfer of weath (by forced taxation) becomes a rot to that very fabric…. so in fixating on the obvious element of tzedaka (ie: the poor got their support) the Left ignores the true nature of charity (like our kreplach story) and ends up with a society which is less prosperous, less cohesive and more arrogant. By focussing on generating the “outward tangible effect” of charity, the Left actually kills the system which has managed to raise the poor in this country out of the ash heap and ultimately the poor will get poorer – because the society itself will become poorer – both spiritually and physically.

Chesed vs. Gevurah
The other area I would like to touch on is the concept of “conservatism” itself. It is more than “financial or social” conservatism. The Left, looking only at the surface elements, sees only a “clinging to the past”… a sort of conservatism in philosophy ….and being progressive, they seek to go beyond the ideas of yesterday.

The problem with this view is that again, they are only looking at the surface – a kreplach is much more than just “cooked dough”. One could model political discourse today as a conflict between the Left wanting to create a society based on chesed (kindness) and the Right wanting to base it on gevurah (strictness). Unfortunately, this rather childish view is shared by both the extreme wings of both the Left and the Right.

In the Jewish Kabbalah, chesed and gevurah are twin attributes that create an inner balance in the soul’s approach to the outside world – they are integral qualities of our humanity. A person (or society) which is based solely on chesed or solely on gevurah cannot function….both are needed and limits are necessary, boundaries must be respected – these are ways that people (as well as societies) practice gevurah.

Any parent (who manages to raise well balanced, sane children) understands the balance between chesed and gevurah – that both are needed in order to be a good parent and to build a well functioning family. The Left’s rather infantile view that chesed is good and gevurah is bad….is a major misunderstanding of today’s discourse.

Again, the Left looks at the surface – chesed is good because it “feels good”….gevurah is bad because it “feels bad”. Maybe it is a result of narcisism, maybe it is a result of being ignorant but this is a chief source of the problem today in political discourse.

Judaism can illuminate this issue too – in Judaism there really isn’t a notion of “good and bad” – everything from G-d “is good” although to us individually something may “feel bad”. Of course, this is only when G-d practices chesed and gevurah. We humans are not so skillful…gevurah, if practiced correctly is necessary and “good” as is chesed good if practiced correctly. But practiced incorrectly, strictness can be bad and chesed can be bad. One need look no further than at a spoiled child to see the destructiveness of unrestrained chesed.

In terms of social policy, one can look at welfare reform where able bodied people were forced off of welfare and told to “get a job” to support themselves and their families…this was an example of gevurah that was appropriate and ultimately “good” – even though for the person being forced off welfare – it felt bad.

Again, you can look at Judaism and see the roots of this philosophy everywhere – at Rosh Hashanah, we don’t say to our friends and family “Happy New Year”…we wish that they have a “Good Year”…the emphaisis is on “good”…not on “happy”. In Judaism, “happiness” is what we feel when G-d gives us blessings that we experience as “good”….happiness is an “effect”…it is not an end in itself. This is where Thomas Jefferson exercised incredible insight when he penned “…endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

A Jew might have used the words “pursuit of purpose”…but it is also clear that Jefferson claimed we have a right to the “pursuit of happiness”…. we do not have a “right” to “happiness” itself. The Left’s view seems to forget this and again…looking only at the surface… wants people “to be happy [equating happiness with money]” where Jefferson wanted people to be free to pursue happiness.

An enormous amount of the animosity engendered between the Left and the Right can be eliminated if both can see that in reality, both are trying to achieve similar goals – clearly via different strategies. A study of Jewish philosophy can create an understanding of the fundamentals of the arguments and provide a basis for the two sides to come together to create a better society and a stronger and more just nation.

→ No CommentsTags: One Nation Under God · Political

Why should “Those who pay no taxes” care about tax rates?

September 23rd, 2012 · No Comments

Governor Romney, in a rather inept/inarticulate moment, commented that the 47% of American’s who pay no income taxes probably don’t care about the tax rates paid by the tax-paying segment of America.

It was inept because it shouldn’t be true. The non-tax paying Americans ultimately pay dearly for the tax policies imposed on the tax-paying Americans. Here’s how they pay.

Jobs Jobs Jobs
When government takes more and more out of the economy in the form of taxes, that money is not available to be invested in economic activity. Not only does every dollar spent on government take away a dollar out of the private sector economy – but if that dollar is used to create a larger regulatory structure – the single tax-dollar given to government may take a much larger bite out of the economy. When the job-creating sector of the economy is starved, jobs suffer. So Governor Romney is wrong, those people getting food stamps and government welfare due to their desperate financial condition should be very interested in improving their situation by getting a job – even if they ultimately don’t end up paying much in Federal taxes…at least they will be supporting their family and will need less public assistance. If you doubt what I say, ask most people on foodstamps and welfare if they would rather have a job and get off “government assistance”…and they would say “yes, I’d rather have a job…I’d have more money”.

Higher prices
Every dollar that the government takes in taxes has to come from somewhere. An earned dollar is ultimately just a symbol for some amount of time spent by some person doing a productive task for somebody. Goods and services are generated by a lot of those “somebodies”. The government takes tax money from those sombodies to fund its activities. Yes, a certain amount of government overhead is necessary and good and allows all those somebodies to work safely and efficiently….but at some point, if that tax money starts being excessive and wasteful, the extra burden starts to affect the bottom line cost of producing those goods and services and the prices to the public necessarily go up. To see this most clearly, do the following thought experiment – imagine that everyone woke up one morning to find that they had to pay the government $1 for each dollar they earned – they would immediately go to their boss and say, I need a raise otherwise, I can’t feed my family….the boss would then turn around and say that everything his company sold would have to cost much more….prices rise…hurting even those who pay no taxes.

Feeling “Entitled” Hurts
Finally, while it may not apply to all people….most people feel a level of “guilt” in accepting money that they did not earn. If the money came from charity, people assuage this “guilt” by showing appreciation to the person or organization which gave them charity. Many times, the person receiving the charity can give back… helping the charitable organization or being a part of the religious or social community that provided the charity.

The unfortunate reality is that people can’t show “appreciation” to the government…the funds just show up magically deposited in their bank account or on their debit card….and they walk into a store and buy their groceries or pay their rent. The only way the person receiving government assistance can assuage his/her guilt is to feel “entitled”….thinking “I am owed this money”. This “entitlement attitude” simply rots their moral character – allowing the person to look for other ways to suck money from the government. To see this, all you have to do is look at today’s population which ran through their 99 weeks of unemployment “insurance” and then they became magically “disabled” and they started collecting their social security disability payments.

So in short, all of society pays for bad tax policy – some pay in the form of higher taxes, others pay in the form of lost jobs, higher prices and moral decay…. we all pay dearly.

– Robert Light

→ No CommentsTags: Political · Taxation · Uncategorized

Why “income redistribution” is bad.

September 19th, 2012 · No Comments

We all acknowledge, across the political spectrum, that one of the roles of government is to protect the sick and the elderly from poverty – in no just society should those who cannot fend for themselves be left to live a life of deprivation and hunger. I am not discussing about whether government has a role in helping those who can’t help themselves – of course it does.

The focus here is on the concept that the role of government is to “redistribute income” from the wealthy segments of society to the lower income segments of society. This concept has been the undercurrent of political discussion since Obama expressed his “spread the wealth around” comment when talking with “Joe the Plumber” during the 2008 campaign. It appears now that Obama has held that “redistribution” was an important tool of government for a very long time to “make sure that everyone has a shot”.

The question of “income redistribution” should be answered on two fronts – First: does it work? and Second: is it good for society?

The first question (Does it work?) can be answered by understanding that a person’s standard of living is only determined by his ability to do for others something that other people value. The size of their bank account is a “buffer” – it means that the person can do nothing for a period of time and still live comfortably – but ultimately his standard of living will depend on his ability to do something for others which is “valuable” – this could be a service or it could be making a product. Income redistribution takes from the one group’s bank accounts and deposits it in another group’s bank account….and as such, reduces the rich person’s “buffer” and increases the poorer person’s “buffer”. Yes, the poorer person can now purchase a nicer TV or nicer furniture – but in doing so, the money goes right back into the economy and ultimately a goodly portion of that money ends up in the rich person’s bank account again. So the answer to the first question is – “sort of”… income redistribution provides a “boost” to the poorer person for a period of time but you simply have not changed the ability of the poorer person to actually earn his income and thus permanently improve his standard of living – you’ve just subsidized his bank account for a period of time. Worse yet, the cost of those taxes are ultimately borne by higher prices for the products purchased by the redistributed income – so ultimately, that money is lost to the segment of society to which it was targeted.

The answer to the second question – “Is it good for society” seals the case against “income redistribution”.

The ultimate fallacy to “income redistribution” is that it rots the very core of the society. To understand this, you have to understand that any feeling human being must feel a level of “guilt” or “shame” when receiving something that they did not earn.

When presented with a gift, or charity, the receiver fixes this “guilt” by a very, very simple gesture – showing appreciation to the giver.

When money just appears in their bank accounts via some mysterious deposit “from the government”…the receiver cannot express his appreciation to anyone – and is left with his “guilt”…and worse…can only assuage this guilt by feeling “entitled to the payment”…I was owed this money and I got it.

On the other side of the transaction, the giver does not feel good about providing money for the poor – because the money was forcibly taken from him – by taxes. Worse yet, he sees the government waste huge amounts of what was taken from him in the form of taxes and feels like the money he provided that was supposed to go to poor people was siphoned off to pay for fancy business meetings in Vegas or Hawaii….corporate jets for the political class etc…

In short… “income redistribution” rots the society at its core – and because of that, the economy sours and the poor are the ultimate loosers – without jobs, without hope – living with their hands extended to a government which is less and less able to provide. The interview with a person waiting in line for “Obama cash” in Detroit by Detroit’s WJR illustrates this point best.

….this is what is happening today in America and while the poor may get “handouts” they will not get “jobs” and ultimately they will turn into entitled “takers”…. the “makers” will go elsewhere where their money can be put to use by people who want to work and where governments are restrained enough to let the “makers” do what they do best – build things.

→ No CommentsTags: Political · Taxation