Greedy-Bastard Economics

Good post which illustrates how government creates overhead, then blames capitalists for the effects (extra costs), and finally uses this as justification for more regulations on those blatantly “greedy bastards”.
The state simultaneously manages to cause the damage, look good and increase its intervention.

 

Having tarred insurance companies with the blame, government now proposes more greedy-bastard economics as the solution. Such policies will further increase costs that can be blamed on insurance companies: Companies won’t be able to deny coverage for preexisting conditions, which means they must pool higher cost customers in with lower cost customers, thus requiring higher premiums. They will not be able to control risk by putting annual or lifetime caps on coverage, similarly raising costs that must be borne by all policy holders. They will be required to include certain preventative care with no extra charge, and to limit out-of-pocket costs, which also may maim the private markets for catastrophic coverage.

In reality, scarcity is the cause of many of the difficult choices individuals face. However, governments prefer to find “greedy-bastard” bogeymen to blame. This allows governments to play as saviors rather than as the parasites causing the problems in order to benefit favored constituencies at others’ expense. But government has no power to eliminate scarcity.

Government, beyond its role of defending voluntary arrangements against force and fraud, only makes the effects of scarcity worse. It substitutes decisions by people with worse information and incentives, backed by the power of coercion, for decisions by people with better information and incentives. That is why it is actually government “solutions” that increase the influence of greedy bastards in society. After all, “greedy bastard” is an excellent description of someone who demands power over others without cost or their willing consent; and falsely blames others to gain it.

 

As a side note, I think it is important to distinguish “greed”, which is narrow and only related to wealth, from self-interest or desire to improve one’s condition.

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