by Don Harkey
We've had some really great articles this week. Rob and Ray are very articulate and did a great job outlining the free market philosophy. I want to take this opportunity to "drill down" a bit into some of the current issues. Let's try to apply some of the philosophy.
I mentioned earlier in the week that George Washington despised government, but he saw that it was necessary for certain things. He called it a "necessary evil". Any service provided by the government could be considered against free market principles, although not many free market advocates are anarchists. The central issue then is "what is the role of government?". Where is the line?
Let me give you some "thought examples". I think most people agree that providing for the common defense is a good role of the government. The national military has proven much more effective than the scattered militias that were common in our early years as a country. What about police and fire fighting? Most Americans are content with leaving these services to the government, and this approach has seemed to work.
Moving on to health care. Should we have socialized medicine? Do we currently have "free market" medicine? Imagine a man who makes $10,000,000 per year and refuses to pay for insurance. He throws his money around like crazy and has nothing to show for it. He has a heart attack and goes to the hospital. He has no insurance and does not intend to pay his bill. Do you let him die?
Take the example of a family who loses their jobs and has their house foreclosed. They have no source of income, no local family, and have no place to go. Do you let them be homeless?
The answers to these questions do not yield the answer to the choice between socialism and a free market. A socialist might believe that a "free market" answer might be "yes, let them die, let them be homeless". A free market person might believe the "socialist" answer is "heal them, house them, clothe them, and give them expanded basic cable". These are the debates we are having in the media and its not healthy or productive. This is where conservatives become "cold-hearted" and where liberals become "tree-huggers". For the majority of people, neither is true.
Let's assume that most people would not let the greedy man die on the hospital floor. We would help the man. The real question is "HOW?". Most people would want to help the homeless family. How?
Do we establish a government health care system to save the lives of anyone regardless of their financial means? Do we carry out Lyndon Johnson's "war on poverty" as a nation?
Do we allow people to keep more of their money to donate (voluntarily) to organizations like Crosslines or The Kitchen. Do we call out FEMA to the next natural disaster or do we find homes for over 200 families in a nearby city simply by calling on local churches to help (as was done in Springfield after Hurricane Katrina)?
Let's talk about some of the largest corporations and organizations in the United States. What would have happened if the government had allowed Bear Stearns to fail? AIG? Chrysler? GM? Both President Bush and President Obama believed that the country could not withstand the failures of these companies. As a good friend of mine says, the answer to this scenario is "above my pay grade".
However, if the answer is that our economy would, then we are faced with the next question. If a single organization can make some bad decisions and cause the potential collapse of the United States or even the World economy, then how do prevent this from happening again? The answer from President Obama is clear... regulation and government intervention.
Should we prevent companies from growing that large in the first place? It wasn't long ago when banks were not allowed to cross state lines. This is not without significant implications. Where is the line? Is it possible that the "people" would determine that a company is not acting in the best interest of the "whole" and act accordingly? Should we intercede and "tweak" WalMart's health care policies? Should we prevent WalMart from entering towns of less than 10,000 people?
Maybe the whole thing is blown out of proportion. Maybe if Bear Stearns, AIG, Citibank, GM, and Chrysler all failed, maybe the economy would be hurt, but maybe the country and the world would come out more healthy. Maybe the banks SHOULDN'T be lending out more money to people. Maybe this is NOT a good time to take out a car loan. Maybe mortgage companies SHOULD demand 20% down on a house.
At the heart of the question... should we be more concerned about big corporations or big government?
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Moral hazard is a concept that is very appropriate here. This occurs when people engage in more risky behavior when they have insurance. It applies to the auto companies because if they thought the govt would bail them out, they would likely take the more risky option of doing nothing (leave unions along, leave quality alone, make small cars that nobody wants....) And this is exactly what they have done. For the banks, they made loans knowing the govt had their backs, so they took incredible risks.
ReplyDeleteWith respect to the medical issues, the Christian has the responsibility to care for others, support charities with both time and money. Those that put their faith in government think that it is their responsibility to take money from others and redistribute it to the needy. However, Christians have allowed the govt to assume responsibility for the welfare of the poor out of our own apathy and laziness.