Weekly Poll Results: 12/1/2007

Thursday Theory: Say's Law of Markets

Say's Law of Markets states that there can be no demand without supply. The law is named for French economist Jean-Baptiste Say, who lived 1767-1832. Say was a classical liberal, who believed in free market, laissez-faire economics. The basic idea is that recessions occur when there is a lack of supply, not a lack of demand, and conversely, prosperity occurs when production is increased. Modern economists such as Thomas Sowell and Arthur Laffer, who developed Supply-Side economics, have advocated Say's Law.

It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products. (J.B. Say, 1803: p.138-9) ^[1]

He also wrote:

It is not the abundance of money but the abundance of other products in general that facilitates sales... Money performs no more than the role of a conduit in this double exchange. When the exchanges have been completed, it will be found that one has paid for products with products.

Say's Law is in stark contradiction of Keynesian Economics, which believes that demand is more important than supply. John Maynard Keynes believed that government intervention was needed to smooth out the severity of boom and bust cycles by using fiscal and monetary policy to control the demand for products. However, advocates of Say's Law would say that without products to sell, no amount of government intervention will stop a recession. In fact, they argue further that such intervention will actually cause a recession by "crowding out" the private sector (through government purchases of goods, raising taxes which will increase costs, or increasing the money supply which will cause inflation). Therefore, Say's Law is a key to understanding laissez-faire economics, as well as supply-side economics (which is merely a restatement of laissez-faire).

Hartford Mayor Perez Involved in Corruption Scandals

The Hartford Courant reported last week that a Grand Jury had been appointed to investigate alleged corruption charges of Hartford Mayor Eddie Perez and his administration. Apparently, Perez has been under investigation since last February. Three specific corruption allegations are mentioned in the story:

• Giving a lucrative no-bid contract to operate a city-owned parking lot to political supporter. Abraham L. Giles, whose support in the Hartford's North End is considered important to electoral success in the city. Giles has himself been involved in other construction scandals.


• Providing city funds in the amount of $10,000 in 2007 to clean out Giles' private warehouse without repayment until the deal showed up in the news.


• Hiring a city contractor to do $20,000 worth of work on Mayor Perez's bathroom and kitchen. The mayor has been under investigation for this since August, and admits that hiring a city contractor was a "mistake."

So, given all of the allegations, all the Hartford Courant can say is:

"Despite the investigation, Perez decisively won a re-election bid Nov. 6 with a hefty $600,000 war chest and a divided opposition. The investigation played a relatively minor role in the campaign, with few of Perez's challengers capitalizing on the mayor's troubles."

As I recall, a certain Connecticut Governor was forced to resign for less than that. So where is the outrage? Where are the calls for Mayor Perez to resign? Or is there a double standard here since Mayor Perez is a Democrat...

I think there is a double standard. And I think that the liberals at the Hartford Courant, the Democrats in the state, and the Hispanic community in Hartford will be perfectly content to let these little corruption charges blow over. The Capitalist League will be following this case, demanding that Mayor Perez get the same treatment as ex-Governor John Rowland. Hartford deserves better than this, and so does Connecticut. Where's good ole' Mayor Mike when you need him?

Die with Dignity on the Taxpayer's Dime

I was browsing through the Hartford Courant's website at www.courant.com, and this story by Ann Marie Somma caught my eye. The basic gist of the article is that,

"Every year, hundreds of low-income, terminally ill patients insured by the state's Medicaid program have little option but to greet death alone in sterile hospital rooms because the state doesn't offer them a hospice benefit."

Hospice care is a type of palliative care provided at the end of life, that strives to reduce suffering as opposed to finding a cure. The two page Courant article details the necessity of Hospice care, how it would potentially save the state $15.8 million a year if it gave Hospice Care as a state funded health care option, and how State Rep. Claudia Powers, R-Greenwich, has proposed state legislation to include hospice under Medicaid.

Reading the article I had several thoughts. My first reactions was to the media presentation of the story. I mean take a look at the way it begins:

"If it was left to the state of Connecticut, Michael "Hawk" Hector would have died in a hospital room, battling the last ravages of lung cancer.

Instead, Hector died in an easy chair at home, with the love and attention of his family, because the hospice volunteers who cared for him believe he deserved to live out his life with respect and dignity.

Hector was one of the lucky ones."

When a story starts with an anecdotal story like this that tugs at the heart strings, my immediate reaction is to ask "What are they trying to sell me now...?" Typical of the Courant, the article at its heart is just another sob story about the state's poor, how miserable they are, and how taxpayer funded big government is the solution. Perhaps the Courant could sell more newspapers if their liberal agenda was not so obvious and transparent. Ms. Somma, next time stick to the facts and leave out the emotional guilt-mongering.

Now, to the actual substance of the article. Should hospice care be covered by the state? From a purely capitalistic standpoint, no. Healthcare is not a right, it is a product. Corporations and make investments in selling healthcare and their employees work to provide it to you. To demand that you be given free healthcare is to demand that you be given the property of the healthcare companies and the labor of their employees for free. No one has a right to someone else's property or their labor, that is called theft and slavery.

But, David... It's not going to be given for free, it is going to be paid for by the state. So, because the state does such a good job running the schools and building roads, we should let them run our hospitals? Hmmm, I think not. The state does not produce health care like the private industry. It confiscates people's money through taxation, purchases health care for you, and then rations it back to you. What if you are provided more health care than you need (ie. providing 2 doctor's visits a year, when you only really needed 1)? Well, then the government has wasted taxpayer dollars. And what if you need more than the government can provide to you? Then we end up with a situation like this story, where well intentioned state officials propose larger government in order to meet the demands of more and more people who have become dependent on the public dole. Sure expanding care options to include hospice care could save the state an estimated $15.8 million in the short run, but removing government encroachment into the health care industry would reduce state costs even more, and reduce the cost of health care overall. That is my point here, that we should not even be debating whether to include hospice care in state health coverage, since the state should not even be involved in paying for or providing health care.

Now I realize that this program is intended to help the poor, via Medicaid. But why should we think they are entitled to hospice care when everyone else is required to pay for it privately or through their health insurance? A dignified death is possible in a "sterile" hospital as well in hospice care.

This brings me to the usual slippery slope argument. For now it is for "the poor." (Notice also that we will be expanding the state into the health care industry further for only a few hundred people.) This will undoubtedly increase the costs of hospice care for everyone else, leading to an outcry from the middle class to be covered by state funded hospice care. So, politicians will respond with universal hospice benefits. And once the state is funding a type of health care that provides "death with dignity," is it such a far stretch to imagine publicly funded euthanasia coming next?

I'm sure my arguments seem cold and heartless in the face of stories from people like Michael "Hawk" Hector. Having experienced the death of loved ones in hospice care, I do think it is the preferable way to approach the final stages of a terminal illness. However, that does not make it a right, and it does not entitle people to what does not belong to them. If people like State Rep. Claudia Powers are so concerned about the poor receiving a dignified death, let them start private charities to provide hospice care to the poor. In this way the problem could be addressed and people would be able to give money voluntarily. I would happily give to that cause, as opposed to being forced into giving by the state.

Monday's Success Story: Honda FCX Clarity

In Summer 2008, Honda will be releasing a limited number of new cars in Southern California. What's different about that? The Honda FCX Clarity is the first commercially available automobile powered by Hydrogen Fuel Cells. The fuel cell powers it's electric motor by converting hydrogen and oxygen into electricity and emitting only water vapor as a waste product. According to Honda, "the FCX Clarity is twice as energy efficient as a hybrid-electric vehicle and three times more efficient than a conventional gasoline vehicle." And this isn't some weird experimental vehicle. It has the standard host of features, including seating for four, six airbags, anti-lock braking system (ABS), climate-controlled seats, XM Satellite Radio, etc...


Now while Honda is only introducing a limited number of these vehicles in Southern California (due to the lack of hydrogen refueling stations elsewhere), this does represent a major step forward in the evolution of the automobile and energy industries. And, why is this happening? Because the rising price of gasoline and a greater consciousness of the long term effects of fossil fuels have created a public demand for energy alternatives. And where there is demand in a free market, individuals and corporations will find a way to make products that meet those demands in order to turn a profit.

If Honda profits from this innovation (which they probably will), then more hydrogen refueling station will be constructed and other car companies will release other fuel cell cars. This will make it easier to own a fuel cell car and encourage further demand. Further invention will be encouraged by this new demand, including ways to convert old gasoline cars into hydrogen cars. Slowly, the fossil fuel economy will by replaced by a hydrogen fuel economy. There will not be a giant energy crisis, as many would have you believe. High government fuel taxes and increased federal regulation will not be necessary. As always, public demand and not government policy will be the thing that creates a new hydrogen fuel based infrastructure. At that point, we will all look back and applaud yet another capitalism success story.