| There is little love lost between progressives and Big | | | | demand and consumer choice both increasing. |
| Corporations. Many Big Corporations, such as | | | | Competition is the best-known and time-proven |
| Wal-Mart and about a thousand others, are burnt at | | | | method of lowering prices for consumers, and it can |
| the rhetorical stake for their failure, inter alia, to | | | | do so in health care as well. Such competition is |
| provide great (or any) medical and dental benefits or | | | | hardly achieved now - by forcing an employee to quit |
| a high-growth 401(k). Progressives generally believe | | | | his job before he can easily find new insurance. |
| that the market is to blame for this undesirable | | | | The second solution is through the negative income |
| deprivation of basic freedoms, and that the only | | | | tax. States should be able to provide supplemental |
| solution is more progressive regulation. | | | | income to their low-income citizens in order to help |
| The problem with these objections is that businesses | | | | with health insurance costs. Such subsidies could be |
| should never have been expected to be interested in | | | | paid right into the health savings accounts, allowing |
| offering such benefits in the first place. One wonders, | | | | low-income individuals the same opportunity to |
| why should your boss tell you how to dictate your | | | | participate in the health insurance market. The |
| future, stifle your independence, and peremptorily | | | | unfortunate truth is that the labor market is not the |
| decide what kind of relaxing, leisure life is good for | | | | place to expect welfare - if you want the labor |
| you? Expecting company-centric benefits smacks of | | | | market to be efficient. The dirty truth of economics |
| Quasi-Government Bureaucracy, Inc., hearkening back | | | | is that markets work efficiently when they pay their |
| to the Good 'Ol Days of the company town, the | | | | employees what they should be worth on the |
| lifetime employer, and the 80-hour work week. Who | | | | market. The safety net beyond an employee's fair |
| wants that? | | | | market value is important - and it should provided by |
| As William F. Buckley once wisely said, "I will not cede | | | | the government, not forced through employment. |
| more power to the state. I will not willingly cede | | | | Google employees, for example, get wonderful |
| more power to anyone, not to the state, not to | | | | benefits, simply because they also make obscene |
| General Motors, not to the CIO. I will hoard my | | | | amounts of money. Wal-Mart employees, by |
| power like a miser, resisting every effort to drain it | | | | contrast, get minimum wage because Wal-Mart's |
| away from me." The man speaks the truth. The | | | | competitive advantage is cost-cutting. That's life, and |
| choice of health insurance - and a doctor, for that | | | | that's why there's no Olympic-size employee |
| matter - should always be a patient's, and never an | | | | swimming pool at your local Wal-Mart. But the policy |
| employer's. Likewise, the choice of a financial | | | | effort shouldn't be to force Wal-Mart to act like |
| strategy for retirement should be between the | | | | Google; the two companies have opposite purposes |
| investor and his advisor, and this relationship is not | | | | and strategies. Instead, the effort should be to let |
| most effectively dictated by a supposedly omniscient | | | | the Google and Wal-Mart employees use their |
| corporation. | | | | compensation in the same way - for the purpose of |
| The provision of health and retirement benefits is | | | | securing health and retirement benefits on the open |
| also a complex, cost-ineffective endeavor for the | | | | market - and thus drink from the same fountain. |
| company. Certainly, no reputable economist has ever | | | | Case Study 2: Enron (The disappearing pension) |
| predicted that businesses would be efficient at | | | | Enron is perhaps the favorite progressive case study. |
| providing services that have absolutely nothing to do | | | | Howard Dean, for one, once famously objected to |
| with the corporation's core business purpose. It's | | | | Social Security private accounts by saying it was "run |
| really ironic that progressives blame the market itself | | | | by the same people who gave us Enron." Apart from |
| for the failures of Corporate America. First, they | | | | such a blubbering logical fallacy (is the Congress run |
| expect the market to function like a government, | | | | by the same people who gave us Manzanar? The |
| providing health care, retirement, and other goodies | | | | Fugitive Slave Act?), Mr. Dean clearly missed the |
| without regard for market efficiency. Then, they | | | | point in another way. The market could have |
| harp on the market when it performs these tasks | | | | mitigated the Enron disaster. |
| like...well, an inefficient, bureaucratic government. | | | | Think about it. Businesses come and go; markets |
| Surprised? | | | | change and companies become bankrupt. Even |
| The Solution | | | | without wanton accounting malfeasance, any |
| The libertarian, of course, is not surprised, and has a | | | | company can go bust at any time. Why then, would |
| market-based policy solution for this so-called market | | | | you want to rely on one company for your |
| failure. It's called: Stop expecting your employer to | | | | retirement? (Insert sound of crickets.) |
| act like a government, and give employees free | | | | The secure appeal of Social Security private accounts |
| choice to let the benefits market actually function. | | | | is that the money can be invested anywhere in the |
| How do we do this? Glad you asked, grasshopper. | | | | market, separately from the company, controlled by |
| First, privately-controlled and nationally-implemented | | | | a separate investment firm, overseen directly by the |
| Health Savings Accounts should be the source for | | | | employee, diversified into several different markets, |
| every American's health care spending. The accounts | | | | and also backed by the Social Security Administration. |
| should be independent of one's employer. Employees | | | | In other words, with Social Security private accounts, |
| should also be able to choose the insurer of their | | | | Enron wouldn't have been nearly the disaster it was. |
| choice and retain insurers when they change jobs. | | | | Its employees may have lost their jobs, but they |
| This process would cause insurance companies to | | | | never would have lost their retirement pensions. It's |
| compete to attract individual patients, instead of | | | | certainly better than the current system, controlled |
| businesses looking to minimize costs and increase | | | | by the same people that gave us Howard Dean. |
| efficiency. This so-called "de-linking" of health benefits | | | | Seriously. |
| and employment would also open up the insurance | | | | Case Study 3: GM (The inefficient benefit) |
| market to greater consumer demand and | | | | If anyone needed more confirmation of my earlier |
| competition. Employers would pay a specific | | | | point that businesses are horrendously inefficient at |
| percentage of an employee's salary into this savings | | | | providing health benefits, one only needs to look to |
| account, but employees would be able to modify the | | | | GM. Aside from the decades-long insistence of |
| contribution percentage as necessary to cover any | | | | quantity over quality, another competitive |
| insurance premiums, expected co-pays, and other | | | | disadvantage of theirs is working (surprise) to sink |
| expenses. The insurers could then access the | | | | the American carmaker - with excessive health |
| account to collect premiums as well as contribute | | | | benefits. These benefits were procured at the |
| immediate financial coverage for various treatments | | | | behest of the United Auto Workers, an extortionate |
| and procedures. The accounts should be secured and | | | | labor union, and they did much to prove the fact that |
| regulated in order that the transactions between | | | | businesses shouldn't be in the business of choosing |
| patient and doctor, insurer and insured, and employee | | | | health benefits for all of their employees at once. |
| and employer are as efficient, open, and as free as | | | | When they do, the company goes down in flames. |
| possible. | | | | By contrast, our health savings accounts are immune |
| Second,private retirement accounts should be | | | | to the collectivist wrangling of labor unions, and they |
| implemented for pension funds, along the same | | | | also aren't guaranteed in perpetuity. As your health |
| principles. Social Security (FICA) taxes should be paid | | | | contributions are always merely a function of your |
| directly into the account, as well as any other | | | | paycheck (and the percentage you choose to |
| retirement contributions requested by an employee. | | | | contribute), health insurance costs can never sink a |
| The funds in the account should be able to be | | | | company. When labor costs are too much, wages |
| invested in any stock, bond, or other investment | | | | can be reduced. |
| fund, as determined by the employee. Retirement | | | | Moreover, private accounts help to level the playing |
| funding is an employee's choice, and any investment | | | | field. Rather than relying on GM to provide medicine |
| in that process is simply a market exchange between | | | | and doctor visits, GM's employees could find such |
| the employee and his fund manager and/or | | | | benefits on the open market, even through a |
| investment advisor. The choice should be open and | | | | competing company. Now, as we've noted,GM has |
| unfettered. In other words, your boss should have | | | | enough problems building quality cars - it's unlikely that |
| nothing to do with it. | | | | their health insurance crisis is the sole cause of their |
| Now, imagine if such an intelligent market-based policy | | | | disaster. But it's undeniable that a private accounts |
| were implemented. Employees would be free to shop | | | | system, with employees allocating their individual |
| around to find the best health insurance, doctors, | | | | compensation to health and retirement benefits as |
| retirement funds, and more. Most importantly, they | | | | they see fit, is superior to the current Marxist |
| wouldn't even have to leave their jobs to do so. Or, | | | | nightmare of hundreds of thousands of unionized |
| even if they chose to change jobs, they could take | | | | employees all demanding a fat piece of a |
| their benefits with them. Let's examine some case | | | | non-existent future pie. |
| studies to observe how such a brilliant policy could | | | | Case Study 4: Dunder-Mifflin/Initech (The death of |
| solve so many of the "crises" that are "created" by | | | | the American dream) |
| corporations. | | | | Our final case study is probably the most common. |
| Case Study 1: Wal-Mart (The non-existent benefit) | | | | It's not corporate exploitation - it's corporate tedium. |
| Among being pilloried for saving poor people money | | | | Either an employee wants to leave a boring, |
| on basic goods, Wal-Mart is also subject to heaping | | | | unsatisfying job but is afraid to lose his valuable |
| progressive ridicule for not "providing" health | | | | benefits, or an employee likes the job okay but |
| insurance to many of its employees. How dare you, | | | | wishes he could get some better benefits to make |
| Sam! Of course, our friendly proposal would solve this | | | | his current misery a better long-term welfare |
| little difficulty. Under it, Wal-Mart employees could | | | | investment. Or maybe he hates both. Many |
| purchase health insurance as they please, without the | | | | employees feel "stuck" in their jobs, as red tape |
| permission or sanction of Wal-Mart. This makes so | | | | abounds to limit mobility, and entry costs into new |
| much sense it's difficult to take the progressive line | | | | industries or new jobs are too high. The corporate |
| seriously. Why should an employee have to work for | | | | bureaucracy, from the perspective of the employee, |
| benevolent employer - or lobby for some proposed | | | | can often be at Soviet levels. |
| legislation forcing benevolence - before he can get | | | | The solution to this menial Corporate Drone existence |
| decent health insurance? If a Wal-Mart employee | | | | is thankfully provided by our friendly market-based |
| wants to spend a third of his lilliputian paycheck on | | | | proposal. Personal accounts allow employees to "shop |
| comprehensive health insurance, shouldn't he be | | | | around," in effect, both for jobs and for benefits. |
| allowed to? | | | | Since the two are disconnected, the market can be |
| Everyone nods. But what about those who can't | | | | truly effective. Jobs are chosen because the person |
| afford health insurance, you ask? To this, there are | | | | likes the job, and the benefits are chosen because |
| two solutions. The first is the natural lowering of | | | | the person likes the benefits. It's so simple, even a |
| health insurance costs that will result from market | | | | progressive could support it. |