Lesson #5: Extremists are Always Useless and Often Dangerous
Certainly, President Obama is not going about things in a manner I would advise. But Peter, you cannot use his extremist approach (or I should say that of Larry Summers and others who are really running the show) to validate your own extremist views of the “dangers” of prudent and accountable regulation; something the United States has not had in decades.
It appears as if Mr. Schiff possesses the same flaw as many others who sometimes hit the target after countless years of shooting. In the meantime, they miss out on many years of easy money.
What’s worse, once they finally hit the target, they never hit the bulls-eye due to their persistently extreme views which are centered more upon sales and marketing than credible analysis. And if you can’t hit the bulls-eye, you will seldom win. This also applies to the investment process.
Extremists are never good for anyone. In fact, they’re often dangerous, whether they’re from the “no government” or “complete government” intervention camp. As with everything, the real answer lies somewhere in between.
Moderation is always the best solution. But being the great salesmen that he is, Mr. Schiff realizes that most people can more easily grasp extreme viewpoints because such arguments are cut and dry, lacking complexity. Unfortunately, they often lack validity.
There’s no easy way. Things are rarely black or white. The truth is that most things have a shade of grey. Those who choose to believe things are black or white are most often those who get things just as wrong as the blind.
Perhaps Peter has fooled his "fans," who only see him for his “celebrity status." But sophisticated investors understand how far off the deep end he remains. Now let’s have a look at some of his misconceptions about healthcare.
“The last thing we need right now is to further encumber our economy with higher taxes and additional regulations.”
If Schiff really understood America’s complete economic portrait, he’d realize that higher taxes is a certainty, and has been even prior to this financial apocalypse.
Perhaps if he’d spent more time doing what an investment strategist is supposed to do instead of less time devoted to marketing, he’d have realized this.
Perhaps his “we don’t need higher taxes” speech is a warm-up for some political aspirations.
“The meteoric rise in health care costs, which has become an unending nightmare for U.S. businesses and consumers, is not an accident. This painful condition has arisen from excess government involvement in the system, tax provisions that encourage the over-utilization of health insurance, and government support of an out-of-control malpractice industry. Rather than allowing more bad policy to drive health care costs further upward, we should be looking at ways to allow market forces to rein them back in.”
Yes, the “meteoric rise in health care costs…..is not an accident.” It’s a refection of excessive administrative costs in the private system that are up to seven times higher than those seen in public healthcare, and six times higher than nations with universal healthcare.
The outrageous cost of U.S. healthcare is also due to unencumbered price hikes in prescription drugs. In contrast, every other nation on earth sets price caps for prescription drugs. As a consequence, Americans continue to subsidize the costs of prescription drugs for the rest of the world.
These cost spikes have also been due massive fraud – mainly drug companies and entire hospitals bilking billions of dollars each year from the public healthcare system. In contrast, in no other nation do you see anywhere near the same level of fraud as in America’s “free market” healthcare system.
Finally, the ridiculous costs found with the world's most expensive healthcare system are also due to the unfair business practices of the insurance industry, which behaves like a mafia, setting the rules of the game and changing them as they like in order to maximize profits.
Contrary to Schiff’s blanket claims, medical costs due to malpractice suits and insurance are actually quite low. Rather than repeating the same propaganda lines as neo-con radio talk show hosts, if Schiff had examined the research conducted by non-partisan, unbiased researchers, he would realize the truth. While the threat of malpractice often creates excessive tests and lab work, it’s cheap price to pay for a system of checks and balance.
I suppose Mr. Schiff would prefer to have no penalties for incompetent physicians or surgeons who operate on patients while drunk and high (and yes, this does happen as the data confirms). I guess Peter wants U.S. healthcare to resemble Wall Street more than it already does. Maybe he plans to start a healthcare business soon.
“If left alone, the free market drives quality up and costs down. Government programs produce the opposite result.”
If that is so, can you explain to me why Texas residents have been paying 100% higher prices for electricity than the national average ever since the state deregulated the market?
Face it Peter, America has not had a real free market economy in several years. It’s an economy based on industry collusion and consumer exploitation, buttressed by crony capitalism.
And certainly the current healthcare system does not resemble free market dynamics. You cannot have free market healthcare when providers determine both supply and demand for medical services. If you disagree, go to your doctor and insist you need a knee operation when you don’t.
Due to both the complexity and guess work in medicine, most consumers have a poor understanding of medical treatments. So they rely on their physicians and other healthcare professionals to do what’s best. Unfortunately, HMOs place profits as the first priority, and this often dictates the kind of care physicians are able to administer.
Moreover, the medical-industrial complex has forced many physicians into the role of entrepreneurs; a task for which they have not been trained; a task that is inconsistent with the role of caregiver. Many physicians have embraced this mentality, buying expensive diagnostic equipment, taking payments for sending patients to certain clinics, etc. These physicians have been led astray by of the medical-industrial complex and the misguided benefits of entrepreneurial medicine, so they often provide too much care.
Is this the type of free market healthcare you are talking about Peter? There are many other aspects to this argument, but anyway you slice it, America’s current healthcare system bears little resemblance to real free market dynamics. This is a statement of fact that can be confirmed by anyone who truly understands America’s healthcare system.
“Simply providing more widespread health insurance, as the Obama plan offers, is not a solution. In fact, it will aggravate the problem. Since consumers no longer pay for routine medical expenses out of pocket, comprehensive health insurance creates a moral hazard for both patients and doctors.”
Perhaps Mr. Schiff has some special type of medical plan since he’s a “celebrity.” Perhaps he has GM’s healthcare plan. But everyone I know has to pay a deductible. Whether you pay a deductible or not, the vast majority of Americans still pay for routine medical expenses out of pocket, whether for office visits, prescription drugs or the annual deductible threshold which is independent from these other out-of-pocket costs.
While President Obama’s plan isn’t exactly the best solution, Schiff’s arguments fail to address why Obama's plan falls short of a real solution. You see Peter, it’s all about cost containment. Obama doesn’t plan to put in price controls like other nations have because the healthcare lobbyists are much too powerful in Washington, with nearly four lobbyists per congressman.
And yes Peter, some form of cost containment is critical for establishing a true free market healthcare system. Healthcare is unlike any other industry. Thus, a free market solution to healthcare should be expected to have some unique features.
Free market doesn’t mean free to screw consumers. The proponents of a free market system imply there will be no industry collusion. Also implied is competitive pricing for goods and services.
When you have a healthcare system by which there is virtually no price transparency, consumers are unable to shop around for the best deal. Thus, there is no need for the industry to price services competitively. In fact, lack of price transparency actually facilitates industry collusion.
Furthermore, when U.S. consumers are able to buy the exact same medications in Canada for 80% less than prices charged by drugstores in the U.S., that doesn’t exactly demonstrate competitive pricing.
Finally, the moral hazard argument simply doesn’t apply to healthcare. Medical services aren’t like hamburgers. People won’t line up for more just because they’re free. This has been proven through several studies. Of course, Mr. Schiff isn’t an expert in healthcare so I wouldn’t expect him to know about these studies. Perhaps he should rely on some common sense and the principles of fairness instead of political agendas.
Even if consumers lined up for free medical services, physicians would still dictate allocation aside from doctor’s visits, which would be tagged with a co-pay, as many nations have done with universal care.
Instead of worrying about a moral hazard when it comes to universal coverage, perhaps Mr. Schiff should start worrying about the moral hazard that’s been created due to lack of government regulation and accountability within the financial industry; his industry.
Perhaps if he began focusing on that, one might actually form the impression that Peter cares as much about the people as he does himself.
NOTE: I continue to face widespread censorship for the cold hard truth I speak, as I see it. My intention is to wake the people up so they will realize just how useless and deceitful the mainstream media is. I ask that you do your part to help with this mission by emailing my articles to your friends and adding the articles to the various online syndication options provided at the top right-hand side of each article. Together, we can make a difference.
Copyright © 2009. Mike Stathis. All Rights Reserved.
Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.
Requests to the Publisher for permission or further information should be sent to info@apexva.com
0 Comments
