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In the midst of the storm over health care in the U.S., the left’s reaction to John Mackey’s call for an alternative to the Obama health care proposal is one of the most shameful and idiotic things I’ve seen.  But it’s predictable.  In spite of the fact that Whole Foods is a purveyor of liberal food par excellence, the tantrum being thrown both speaks volumes to their real objectives and their ignorance for the realities of paying for health care in the U.S.

Mackey has paid for far more health care for his employees than any of his detractors have.  As an employer, he has staked out a workable plan to cover his employees.  And retail is a place where many go without this kind of coverage.  That’s something I share with him: in my family business, I signed many checks for health insurance for my employees, organised (Machinists) and otherwise.   You learn a few things about it doing that.

Obama’s claim that the vast majority of funds in health care go to end of life care is wide of the mark.  When it comes to health care costs, the distribution is in reality a “dumbbell.”  One the back end you have the expensive life saving procedures (the “last dollar.”) But on the front end you have the initial access to health care during the year (the “first dollar.”)  Anyone who has purchased health care individually or for a group (and I’ve done both) knows that, as you lower the deductible, the cost for each dollar of health care you purchase increases to the point where it’s cheaper to pay for the care directly than insure it.

That’s why high-deductible plans like Mackey’s are successful in cutting health care costs.  They also make it possible to do the one thing that health insurance needs to do: prevent bankruptcy in the event of a catastrophic illness.  They place in the hands of of the employees basic decisions as to how to handle their basic health care in an economic way, and protect them from real disaster.

In the U.S., however, with the generous health care plans we have had since World War II, the mentality has emerged that health insurance should cover everything from the first dollar (or “every runny nose,” as my plant superintendent used to say) to the last dollar.  That’s hard to break; I admire Mackey for having sold it to his employees.  In the mid-1980’s, I had a hard time selling any kind of deductible to my employees, but our insurance simply quit carrying the old “comprehensive” coverage, leaving everyone with no choice.

The left knows how hard to break that is, which is why, in simple terms, the current proposal has “first dollar” coverage and would make high-deductible plans next to impossible.  That’s a piece of political calculus that–along with buying off the drug and insurance companies–the Democrats thought would make this proposal a slam-dunk.  Unfortunately they didn’t cover their demographic back end, because when you throw away controlling first dollar coverage the only place you have to go is the last dollar.  That’s what the VA has found out, and its “death book” response is getting the publicity is deserves.  The left hates to admit it, but without “death panels” or other premature induced life terminations, there’s no way to swing their idea financially, especially in the “zero-sum” economy which they are constructing through higher taxation and regulation.

Unfortunately the left’s political calculations overlooked one important fact: the declining birthrate and greater longevity of our population, coupled with the Boomers coming into Medicare in a big way, produced a natural and vociferous opposition to this plan.  That’s the reason for the rowdy town hall meetings.  The left turned a grand piece of social engineering into an existential threat for a large portion of the population.  Nice going!

Mackey’s proposal is, IMHO, the way out.  Obama’s is not, and that’s why I oppose it.

A couple of weeks ago I put online a piece (complete with video) entitled Barack Obama: Dreaming of the 50 Square Metre Apartment.  It spoke of the stark reality that, in order to achieve Obama’s decidedly statist vision of reduced energy and riskless economics, one would have to go back to a system like the old Soviet Union where everyone is housed in high rise apartment buildings and small (by American standards) apartments.

I’m sure some of its readers thought I was nuts.  But now we have Vincent Carroll’s piece in the Denver Post which shows that Robert Redford has disdain for the American alternative, the single dwelling subdivision:

Robert Redford is an example of the human species at its finestrich and good-looking, I mean — so naturally he would never consent to live in anything so tawdry as a “subdivision.” During his visit to Denver last week, the film icon and green activist had a few dismissive words for that particular type of development.

“I think the New West should return to the Old West, when there was an emphasis on communities, on families and neighbors,” Redford told a gathering sponsored by Project New West. “It’s time to think about what kinds of development we want, whether we want to develop more communities or subdivisions and sprawl.”

Carroll goes on to discuss sprawl:

What is “sprawl,” anyway? When I discussed that question last month with Tom Ragonetti, a Denver land-use attorney and adjunct professor at the University of Denver law school — he recounted an exercise he sometimes poses to students. If you had an unlimited budget, he says, where would you choose to live in metro Denver? Needless to say, most students do not mention a row house or apartment — even a luxurious one. Instead, they identify an upscale Denver neighborhood such as Country Club, or Cherry Hills, or perhaps Genesee or Evergreen.

Back to reality, Ragonetti then instructs them. Your budget is not unlimited. You can’t afford Country Club or Cherry Hills. What’s your next option — particularly if you’re trying to raise a family? Is it a third-floor flat near one of those communities? Far from it. Most students indicate they’d search far and wide for housing that comes as close as possible to their ideal.

“Sprawl is a million people making that decision,” Ragonetti explains.

That “million person decision” doesn’t sit well with Redford or many in our elites.  But they’re not the ones paying the price if they get their way:

“Growth management is inherently an elite or luxury good,” he says. The wealthy will always win a bidding war for the most desirable dwellings while the poorer classes end up being squeezed. The more extreme the growth management, the farther it will slice up the income scale.

It’s supremely ironic that the housing decision taken by the Soviets as egalitarian and fair would be similar to the one which many in the upper reaches of our society would have for us.  Idealism like this is great until it’s implemented. How else to eliminate “sprawl” except to cram everyone into high rises?   But such a cram would favour upper income people in our society.

But then again, as I like to say, socialism is the rich man’s solution to the poor man’s problem.

Henry Kissinger has words of wisdom:

The 21st century requires an institutional structure appropriate for its time. The nations bordering the Pacific have a stronger sense of national identity than did the European countries emerging from the Second World War. They must not slide into a 21st-century version of classic balance-of-power politics. It would be especially pernicious if opposing blocs were to form on each side of the Pacific. While the center of gravity of international affairs shifts to Asia, and America finds a new role distinct from hegemony yet compatible with leadership, we need a vision of a Pacific structure based on close cooperation between America and China but also broad enough to enable other countries bordering the Pacific to fulfill their aspirations.

The subject of China, as readers of this blog know, and Henry Kissinger is of special interest because a) of my business dealings in China in the early 1980’s, and b) Paul Speltz, Kissinger Associates’ President, is one of the people who facilitated those dealings.

Kissinger also observes that “Historically, China and America have been hegemonic powers able to set their own agendas essentially unilaterally. They are not accustomed to close alliances or consultative procedures restricting their freedom of action on the basis of equality.”  Unlike the British, neither country has a long history of extraterritorial imperialism.  Both tend to be inwardly focused and self-contained.  That makes for an interesting pas de deux.

That leads me to the following:

1. I don’t see the emergence of a cross-ocean rivallry, with “opposing blocs…on each side of the Pacific.”  The other players are arranged in too complicated of a fashion.  In Asia, the Sino-Japanese feud, which worked so much to my own business advantage, will always complicate things in East Asia, as will the latent fear of Chinese hegemony amongst the nations and people surrounding China.  On our side, Latin America has likewise had a similar complicated relationship with the U.S., and the Chinese are working that region very intensively.
2. The key to the outcome of this relationship depends upon the economic course of the respective nations.  Will the U.S. debt, of which the Chinese hold a significant portion, sink the U.S.?  (Or, more accurately, when.)  What impact will that have on China?  Will China’s economic progress allow it to loosen its dependence on the U.S., as Kissinger implies?  Can China redeem its debt via equity in U.S. assets?

Unless someone really loses their composure here, I don’t see a major conflagration between the two.  But which one will move forward?  Personally I think the Chinese have the advantage right at the moment, but they, as always, are subject to sudden and unpredictable changes.

As if fading dollar hegemony wasn’t enough:

If real reform doesn’t happen, get ready for a fearsome certainty: that markets will eventually correct our unsustainable financial system. They have tried to do so several times over the decades by punishing firms like Continental, Long-Term, and, most recently, Citigroup, as well as the lenders who financed them. The government thwarted these necessary corrections at every turn, bailing out the reckless and their enablers. But the price of maintaining our untenable system keeps growing, and eventually the government won’t be able to pay the bill. The multitrillion-dollar price tag attached to the government’s current endeavors already endangers the nation’s fiscal health. A decade from now, failing financial firms could take the credit of the U.S. government right down with them.

Read all of this article.  The Obama Administration loves to pin the blame of its large deficits and other problems on its immediate predecessor.  But that doesn’t solve the problem.  The current occupant of 1600 Pennsylvania Avenue, radical though he is, may find himself in the same boat as Louis XVI: facing state bankruptcy.  (I’m not convinced that process will take a decade.)  Louis’ predecessor said, “After me, the deluge.”  It doesn’t matter if the flood breaks on your political enemy or your own grandson, it breaks.