Our View

 

Our View

 

Date: May 14, 2009
by: The Observer Staff

 
 

On the swirl of the day …

• If solar energy were the miracle cure that the anti-oil-drilling crowd thinks it is, by now wouldn’t the marketplace have capitalized on it? …

Charlie Crist: Moving to the U.S. Senate would be great for Floridians. Take him, please! Vern Buchanan: Good move, not running for governor. Adam Putnam: Do it; run. Putnam is Florida’s 12th District congressman, a native of Bartow and former number-three man in the Republican House leadership …

• The health-care debate: Most people — especially “statists” — fail to accept that medical care is a limited resource. Likewise, they fail to accept there is not enough money in the world to pay for all of the medical care that people want (or think they deserve). As such, medical care must be allocated.

The debate, then, is how best to allocate: by the brute, violent force of legal plunder (law and forced rationing) or by the peaceful, voluntary exchange between sellers and buyers.
In which system do you have more faith arranging the most efficient allocation of a limited resource? …

+ Kudos to Legislature
While most newspaper editorialists in Florida will decry the Legislature’s lack of dramatic reform or action, Floridians should celebrate. A do-nothing Legislature is a big success!

Sure, we’ll read criticisms of lawmakers using one-time, federal- stimulus money to fund recurring expenses and to balance the state’s $66 billion budget. We’ll read how they failed to reform Florida’s tax system.

But when Congress and the Legislature do nothing, taxpayers are spared from more new laws that cut away at their freedom.

Indeed, the nature of lawmaking is anti-freedom — granting favors to one at the expense of another. French economist Frederic Bastiat called lawmaking “legal plunder.” Rare is the legislature that takes the opposite approach and bestows more freedom on its citizenry.

But lo and behold, this year’s Legislature may have done just that, assuming Gov. Charlie Crist doesn’t veto two pieces of freedom-giving legislation:

• A bill that would allow some property insurers to charge whatever rates the market would bear;

• And the growth-management bill that would loosen some of the shackles around the development market that have driven up the cost of housing and encouraged sprawl.

For many Floridians, the idea of letting insurers charge whatever they want to charge is anethema to consumer fairness. Most consumers would view this approach as legal plunder.

But as Sen. Mike Bennett, R-Bradenton, told us last week, “What’s not to like?” The consumer has the freedom to choose. He doesn’t have to pay the insurance company’s price; no one is forcing him to buy. If a consumer wants to be insured, say, by State Farm and is willing to pay the higher price, why should he be denied that choice?

There are many winners in this scenario: A consumer with peace of mind that his insurer will be there if the Big One hits; an insurance company that is free of government regulation (i.e. which typically adds more costs that are passed on to the consumer) and free to earn a profit on its investment for shareholders; and Florida taxpayers, who would not have to carry the burden of this policyholder in the state-run, state-owned Citizens Property Insurance.

If given the freedom granted in this legislation, State Farm can’t plunder the consumer. Selecting State Farm is voluntary; the state still has Citizens as a last resort insurer; and competition ultimately will hold State Farm’s prices in check.

What’s mind-boggling about this legislation is that Sen. Bennett traveled to Tallahassee last week to try to persuade Gov. Crist not to veto it!

Meanwhile, the growth-management bill unravels in a small way one of the monsters of Florida’s high housing costs and residential sprawl. The bill would relax concurrency rules for urban developments, meaning such developments would not be required to add road capacity in an existing high-density area.

The anti-growth nuts will go nuts over this. But this bill untangles one of the perversities of the state’s growth-management laws. Even though one of the intents of the law was to discourage sprawl, it did just the opposite. What’s more, it also discouraged high-density development in areas that already had infrastructure.

County commissions throughout the state voted against sprawl and voted against high-rise, high-density developments. But if you can’t go up or spread out, where are the people to go?

The result of this conundrum was an ever-rising price of housing.
At long last, it seems, lawmakers are starting to get it. Here’s to this year’s freedom-giving, do-nothing Legislature!

+ How to stop smoking
America’s do-gooders love to bash and villify the smokers. No smoking at the beach. No smoking in the office. No smoking in restaurants. No smoking on airplanes.

And we love to tax them to death. The feds slap a $1.01 tax on each pack. On average, states pile on another $1.34 in taxes per pack. And now it looks like the Legislature is going to raise our cigarette tax from 33 cents to $1.33 cents a pack.

To be sure, there’s a lot of cheering going on in anti-cigarette circles.

Blithely, though, lawmakers think this is going to raise $800 million a year in new taxes to feed their own addiction (spending) and narrow the gap between state spending and income.

They, of course, appear to be ignoring what is economically logical: That when you increase the price, you reduce demand and the taxes collected.

What’s more, this tax is being imposed on those who can least afford it during an economic recession. It’s a tax on the poor and middle class. Talk about a dumb idea in a recession.

There’s an allegedly noble justification for the tax, however. Our paternal lawmakers believe this higher tax also will bring a public health benefit. Smokers will smoke fewer cigs or quit, thus reducing society’s future health-care costs to care for the smokers.

So let’s recap: We tax the cigarette smoker, who in most instances is poor or middle class. When we raise the cigarette tax, we take more of that poor person’s money, making him even poorer, and we redistribute it to some government program or, in some instances, to help pay for the health care of other poor people.

The smoker keeps smoking. He plods through life. He has no health insurance. He gets cancer. He is treated at a public hospital. The hospital writes off as uncollected losses thousands of dollars of his costs that are not covered by Medicaid. This raises the hospital’s prices and the cost of health care for those who pay.

In other words, those who don’t smoke, pay for the health care for those who do.

Truly perverse and backward.

Try this instead: What if the burden of behavior were shifted to be borne by the person enacting the behavior, rather than borne by the taxpayer?

For instance, if you smoke, you would be denied public health care, or at least be limited severely to rationed health care. Insurers already do this: If you act wrecklessly, you pay high premiums, or you get no insurance at all.

In other words, in the if-you-smoke scenario, you pay the ultimate price for bad behavior. Kind of like murder. If you shoot someone in cold blood, you will hang. If you want to engage in smoking, auto racing, skydiving, shark diving, alligator wrestling, etc., you pay the price.

Who would win and who would lose if smokers had no public, health-care safety net?

Winners:

The poor smoker. Educated on his likely fate, that there is no social net, he would be more likely to be healthy, more productive and therefore wealthier, less of a burden on family and society. It would work like Singapore. Crime isn’t tolerated in Singapore. If you leave chewing gum on a public bench, you get publicly whipped. They don’t have a gum problem in Singapore. Gum chewers have seen what happens.
The insured. The cost of their health care would fall because they are not subsidizing the smokers.
• The hospitals. They will write off less uncollectible debts, making them more profitable to reinvest in new cures and procedures.
Families. Fewer cancer deaths, fewer smokers, fewer kids growing up sick from second-hand smoke and becoming future smokers.

Losers:
Tobacco growers and sellers. But they will abandon an unprofitable crop and product for one that is more profitable and in higher demand (another societal win).
Governments. They will lose a source of revenue that feeds their own incurable addiction. It would induce much-needed withdrawal.


 

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