The Skeptical Liberal: 08/05/2007 - 08/12/2007

The Skeptical Liberal

How can we live together in peace, prosperity, and harmony, while retaining our liberties as autonomous individuals who can, and must, create our own values? -- J.M. Buchanan


If my bike riding routine prevents me from having a heart attack, why shouldn't we force everyone to exercise and thereby lower health costs?

Back to health care, obviously!

David Leonhardt has a good article in today's New York Times, giving an economist's perspective on the cost of preventive care. The campaign rhetoric we hear every day is becoming increasingly strident: we will save money if we prevent future health problems. Problem is: preventive care is costly. For me, it's the time I take to ride as much as 100 miles a week, or swim a mile a day. It's also the number of visits to the doctor, the cost of healthier food, etc.

Suppose now we had a universal health care system. The logic some candidates are tossing around is this: if we spent money on preventive care, we'd save money on the treatment of illness and disease; the money we'd save would allow us to provide basic healthcare coverage (including preventive care, of course) to everyone. Indeed, we could even require people to exercise in order to get access to some aspects of the system.

Trouble is, there's little evidence a) that preventive care reduces the overall cost of treatments, and b) that preventive care comes at a low price tag. In fact, preventive care is costly, whether I pay for it personally or the system pays for it generally. Hence, the economist suggests a skeptical outlook toward claims that preventive care policies will allow us to fund a universal healthcare program without an increase in costs.

That does not deny the fact that my own preventive actions (which have their costs) will probably help me. So pardon me while I go out for another ride!


Raising barriers isn't 'fair' trade

The following appeared Sunday, 5 August 2007 in the Lansing State Journal:

Michigan’s future hinges on the decisions we make in the next few months regarding … trade. What, you were expecting me to say union contract negotiations?

As important as those, and a variety of other issues are, the possibilities of punitive tariff threats against China by the US Congress tops my list. That’s why I recently signed a petition that was released in the Wall Street Journal on August 1 opposing the proposed tariffs.

There are those in the state who think that trade is a zero sum proposition: if China gets more, we get less. If our traditional industries aren’t winning, we must be losing. They argue that it is only fair to prevent further expansion of trade with China. Making trade “fair” is their mantra; and punitive tariff protection is the means they want to employ.

The problem with the “fair trade” mantra is that what they are calling for really isn’t fair. The expansion of trade with China has led to more affordable goods for ordinary Americans and Chinese, higher productivity in both countries, expanded opportunities for businesses in both countries, and a higher standard of living for both countries. Cutting off that trade would hurt us all. The biggest losers would be those without the political clout of the advocates of “fair trade”—small and medium size businesses, individual households, and ordinary citizens and businesses in the other country that don’t get to participate in our political process. That just wouldn’t be fair. Trade with China, India and the rest of the world has been, and continues to be, a win-win proposition.

The fair trade advocates will tell you that increased trade has taken jobs in traditional Michigan industries. But those industries thrived until we forgot that innovation and expanded opportunities through trade were the keys to their success. Michigan once supported a vibrant entrepreneurial culture which competed with the world and built industries that were strong because they were good at what they did. They won, but they did so because they created value for everyone affected by their industries. We need to regain their vision of creating value for the world, knowing that in the process, the value we need will be returned to us as well.

Fair trade advocates will tell you that free trade is fine as long as the playing field is level. But the reality is that the playing field is never level; various policies create barriers, as do simple things like geography and education. It is free trade, not “fair trade” that provides the greatest range of opportunities to overcome those obstacles.

Free trade promotes innovation, entrepreneurial activity, the efficient use of our resources, and prosperity. We need to resist the call for a return to “beggar thy neighbor” policies and instead promote free trade, innovation and prosperity.

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