VAERS

Always slipping from my hands
Sand's a time of its own
Take your seaside arms and write the next line
Oh, I want the truth to be known
--Spandau Ballet

The Vaccine Adverse Event Reporting System (VAERS) collects information about possible side effects of vaccines following their administration. VAERS is a passive reporting system, relying on both patients and health care providers to file reports of their experiences. Health care providers are legally required to report adverse events that fall within specified parameters. In addition, vaccine producers are required to report all adverse effects that come to their attention.

Its design exposes VAERS data to inaccuracies. Vaccine side effects might be under-reported if experiences are not submitted. On the other hand, problems could be over-reported if the system if abused. To reduce potential for error, VAERS screens submitted reports before accepting them. Moreover, knowingly filing a false report is a violation of federal law punishable by fine and imprisonment.

Despite its warts, the VAERS system has nonetheless been institutionalized as a mechanism for warning about vaccine efficacy and safety problems. Given concerns about the technological foundations of CV19 vaccines, it should come as no surprise that VAERS data have been the subject of scrutiny.

Current VAERS data indeed suggest significant side effect profiles of CV19 vaccines. Nearly 800,000 adverse effect reports have been recorded. Included in those side effects are nearly 17,000 vaccine-related deaths. Other adverse events related to the vaccines, including hospitalizations, allergic reactions, miscarriages, heart attacks, and paralysis number in the hundreds of thousands. 

While the accuracy of VAERS reports can be questioned due to the information collection limitations, what can't be disputed is that adverse event counts since the advent of CV19 vaccines are many orders of magnitude higher than those obtained from prior reports.

Just as curious has been the response, or lack of response, to recent VAERS data by the media and by medical and public health professionals. We'll discuss this more soon.

Best Way Out?

We chased our pleasures here
Dug our treasures there
But can you still recall
The time we cried
Break on through to the other side
--The Doors

One argument advanced by proponents of vaccine mandates is that vaccines are the best way out of pandemic conditions. To hold credence, this line of thought requires persuasive support, much of it scientific in nature. However, theory and evidence are far from conclusive with respect to vaccines. In fact, other alternatives garner substantial support.

The human body's primary natural line of defense against viral infection is the immune system. Immune systems are networks of biological processes that detect and respond to a variety of pathogens that threaten human health. Strong immune systems ward off infections and reduce the impact of infections that do occur. They are also adaptive, meaning that once they interact with pathogens they commonly build resistance against future invasion.

General factors associated with immune system strength are well known and largely life style related. Proper rest and nutrition. Exercise and fitness. Supplements such as Vitamin D and zinc can bolster immune system strength particularly during winter months when exposure to sunshine is reduced.

It should not be surprising that these customary principles of immune system strength appear to apply to the CV19 context. For example, studies have shown that Vitamin D deficiency is associated with CV19 mortality. Seasonality patterns associated with CV19 patterns are also evident. I have also seen several papers (not cited here) suggesting significant relationships between individual fitness levels and/or self-reported degrees of exercise and susceptibility to CV19 infection, hospitalization, and death. We also know, of course, that CV19 generally does far more damage to the elderly and those with serious comorbidities--a skew that coincides with generally compromised immune systems.

Their endogenous, preventative nature make immune systems an intuitive, and economical 'way out' of a pandemic. Why public health officials have not stressed the well established benefits of natural immune system health as a principle route away from the CV19 situation is dumbfounding and, thus, subject to speculation. What we do know is that initiatives to improve natural immunity are plausible alternatives to vaccines as countermeasures to a pandemic.

Another countermeasure involves therapeutics. Therapeutics are medicines that help you get well when you get sick. Therapeutics are primarily remedial in nature. In the context of CV19, monoclonal antibodies and ivermectin are among the remedies that have been employed to help people overcome infection.

Strangely, many public health agencies and officials have downplayed, and in some cases outright criticized, the efficacy of CV19 therapeutic treatments that clearly work in many cases. Regardless, therapeutics offer another proven measure of relief from pandemic conditions.

Assisted by therapeutics or not, people who overcome infections are prone to elevated levels of future resistance against similar illnesses. Once exposed to a pathogen, immune systems develop capacity to prevent recurrence of infection. This elevated resistance is commonly durable for long time periods. This leads us to yet another 'way out' of a pandemic supported by scientific principles: herd immunity.

The notion of herd immunity is intuitive. Thanks to our adaptive immune systems, it is difficult for us to get sick from the same pathogen twice in close by time frames. In the case of an infectious virus, as more people get sick from the virus and then recover, there are less hosts for virus to subsequently infect. At some threshold, enough people have contracted the virus and developed subsequent resistance to reinfection that it is difficult for the virus to subsequently spread. The herd has effectively become immune to the virus. 

Precisely what percentage of a population must contract a pathogen to achieve herd immunity has been subject to considerable scientific debate. Evidence suggests that herd immunity thresholds are pathogen dependent and may not be discernable until after the fact. What we do know is that cumulative infections create barriers to more infection, providing another route away from a pandemic. 

Compared to the above alternatives, a vaccine does not offer a clearly superior 'way out' of a pandemic--particularly in the case of CV19. The primary objective of a vaccine is motivate immune systems to develop defenses against particular infectious diseases. They typically do so by injecting agents into the body that resemble the disease-causing micro-organism. These agents are often sourced from weakened or dead forms of the microbe. The immune system detects the agent as a threat and then activates the usual self-defense mechanisms.

Finding the right agents for a vaccine--one that both provides effective defense against the pathogen with a safety profile free of significant side-effects--usually takes years. The time lag suggests the impracticality of building public health policy around the development of a effective, safe vaccine to combat a novel virus that creates pandemic conditions. By the time the vaccine is developed, the virus may have run its course. 

Enter the mRNA vaccines developed in response to CV19. Unlike traditional vaccines, prospective mRNA vaccines can be designed and produced in a matter of months--making them attractive as timely pandemic countermeasures. Unfortunately, the science associated with mRNA vaccines remains unproven. All previous mRNA projects have failed, meaning that vaccine candidates developed in response to the CV19 pandemic should be regarded as experimental in nature. 

One would think, then, that the allure of quick development time would be offset by a prolonged period of careful evaluation--extra careful in the case of an unproven, experimental vaccine technology. 

That hasn't happened. Instead, the CV19 vaccines were subjected to small numbers, short period, narrowly focused tests with little evaluation of long term effects, and rapidly 'approved' by regulatory agencies.

There is growing evidence that the CV19 vaccines provide, at best, short term protection against infection that erodes over the course of months. Natural immunity built from previous infection appears to be significantly more durable. There is also increasing evidence of undesirable side-effects.

Proponents of vaccine mandates, it seems, will need to reach for another argument, as ones based on scientific theory and evidence are unfavorable.

Questioning Assumptions

Nathan Algren: I have questions.
Katsumoto: Questions come later.
--The Last Samurai

Adopted from a video posted on social media. Assume the following:

Government is not out to get people.

Pharma companies care about people's health.

There is no global conspiracy to abolish individual liberties.

Now let's reflect on various government 'public health' actions over the past year and a half and their merits. Several questions come to mind that challenge the assumptions above:

1) Why have governments not conducted/published impact assessments on the costs and benefits of lockdowns? Lockdowns can obviously inflict significant harm. Why have there been no formal studies to identify these harms and quantify them?

2) Why haven't the public health models and forecasts that motivated lockdowns, which have been spectacularly wrong from the get go, been reviewed for their methodological problems? I would add another question: Why don't these models include forecasts of economic and social impacts by default?

3) If governments were truly acting in good faith, then why haven't they been changing policies in concert with evolving scientific evidence? There is clearly science that contradicts currently policy choices (e.g., on masking, on the relationship between lockdowns and CV19 mortality, on the capability of PCR tests as an accurate everyday measure of CV19 infections, on the capacity of vaccinated individuals to transmit CV19, etc). Why are officials ignoring it? I would also add this: If there has been no coordinated effort, then why are these policy responses so uniform across countries?

Because answers to these questions challenge the validity of the assumptions stated earlier, it is increasingly difficult for a large group of individuals to dismiss 'conspiracy' and other plausible rival hypotheses.

Building on this and past work, I hope to develop an extended list of questions covering various aspects of the CV19 pandemic (e.g., measurement, data results, vaccines, countermeasures, etc) in upcoming posts.

Questions for Asking

They like to get you in a compromising position
Well, they like to get you there and smile in your face
Yeah, they think they're so cute when they got you in that condition
But I think it's a total disgrace
--John Mellencamp

Some fine questions here:

According to VAERS, how many people have died in the US taking this experimental drug?

Is this amount of deaths from a vaccine normal? How does it compare to all other vaccines?

In 1976, they pulled the Swine Flu vaccine after only 56 deaths. What is different now?

Why do you want to give an experimental drug that is only FDA approved for emergency use to children who have a 99.997% chance of surviving Covid?

There are many other similar questions that could be added to this list.

After posing these questions to Fauci, I would turn to the lemmings in the press conference room and ask:

Why aren't you asking these questions?

Lagging Value

Then you say
'Go slow'
I fall behind
The second hand unwinds
--Cyndi Lauper

In trending markets like this one, finding value is difficult. However, there's usually a name or two on an investor's watchlist that has been lagging. Sometimes for good reason. But often for trivial reasons.

On my watchlist, Merck (MRK) fits this profile. The company just spun off some over the counter assets which subtracts from its market cap a bit. Plus, investors seem constantly worried about the staying power of its blockbuster oncology drug Keytruda.

The spinoff means that the remain Merck is more focused on high impact medicines. Very much inline with the company's historical mission.

Short term chart show the stock as oversold and on support.

Longer term chart suggests a rounding top pattern (bearish), but with a couple layers of support below.

As a long term investor, I've always liked this stock as an anchor position. The stock currently yields 3.6% to boot. Have been adding here and there.

position in MRK

Misleading PCR

You fell and cried as our people were starving

Now you know that we blame you

You tried to walk on a trail we were carving
Now you know that we framed you
--The Who 

A retired Pfizer (PFE) scientist explains what these pages have already noted. Even a seemingly low 0.8% false positive rate creates misinformation when underlying infection prevalence is low.

He suggests that, in the UK, broad 'Pillar 2' testing using the PCR amplification methodology to diagnose cases has resulted in about 90% of official case counts to be false.

Moreover, he claims that PCR (i.e., polymerase chain reaction) techniques are better employed as laboratory research tools rather than for population disease screening. The large degree of amplification required to pick up a strand of viral genetic code is prone to significant error. In particular, PCR tests cannot distinguish between living virus and a short strand of RNA that broke into pieces some time back.

His analysis tells him that UK health officials have used faulty case counting using PCR tests that deliberately misled legislative bodies and the public.

The same is true for the US.

position in PFE

Doing Drugs

One pill makes you larger
And one pill makes you small
And the ones that mother gives you
Don't do anything at all
--Jefferson Airplane

A sector that embodies the melt-up, gappy feel to the tape is pharma. Many names (e.g., ABT, AMGN, JNJ, LLY, MRK) are marking all time highs with charts taking on parabolic shape.

Stochastics twisting high in over-bought territory reflect technical risk of buying the traditionally staid, boring drug sector up here. That makes no never mind currently to traders and black boxes that are prescribe to the notion that objects in motions tend to stay in motion.

Until, of course, that motion reverses.

position in JNJ, MRK

Lame Frame

Louis Winthorpe III: Randolph, Mortimer, come in here quickly! I've finally caught him!
Billy Ray Valentine: Who are you?
Louis Winthorpe III: I've caught him red-handed!
Mortimer Duke: Winthorpe, is that you?
Louis Winthorpe III: I'm making a citizen's arrest! This man is a drug dealer! Look, his office drawer...he's got all the bad drugs here: marijuana joints, pills, quaaludes, valium, yellow ones, red ones, cocaine grinder, drug needles. He's the pusher, not me!
--Trading Places

In the classic film Trading Places, down-and-out commodities broker Louis Winthorpe III (played by Dan Aykroyd) tries to reclaim his prestige and position by planting drug paraphernalia in the office desk of his replacement at the firm of Duke & Duke, the up-and-comer Billy Ray Valentine (played by Eddie Murphy).

But his scheme gets nowhere. Billy Ray and the Duke brothers all recognize the lame frame attempt for what it is, and Winthorpe withdraws in disgrace.

Winthorpe's plot resembles the Democrats' plan to flush out Donald Trump. Manufacture situations and implicate the president, using a willing and complicit media to articulate the false narrative in hopes that the general populace will somehow buy it.

But, save for ideologues sympathetic to the left's cause, people can smell rat(s). Another manufactured Yuri.

Another hoax aimed to deceive and displace.

Safety and Government Agencies

Pete 'Maverick' Mitchell: What's your problem, Kazansky?
Tom 'Iceman' Kazansky: You're everyone's problem. That's because every time you go up in the air, you're unsafe. I don't like you because you're dangerous.
Pete 'Maverick' Mitchell: That right, Ice...Man. I AM dangerous.
--Top Gun

The recent controversy surrounding the Federal Aviation Administration's (FAA) grounding of Boeing (BA) 737 Max 8 jets demonstrates the foolishness of depending on government agencies for 'safety'--whether that safety relates to plane flights, food, drugs, cars, banking, etc.

Who is in a better position to determine the safety of a market transaction? Bureaucrats in a room, or the millions of buyers and sellers on the ground in market places engaged in voluntary exchange? If people are self interested, and they surely are, then isn't it in the best interest of individual market participants to determine safety-related aspects of the transactions that they are engaged in?

Of course it is. So if they are not doing so, then why not?

A common claim is that most people lack expertise and time to ferret out safety issues. But this is not a reasonable excuse. If there was demand for this information in the marketplace, then entrepreneurs would move to make it happen--particularly given today's state of information technology. A small example of this has been efforts by travel firms over the past few days to post plane makes and models scheduled by carriers for upcoming flights. This was done in response to "What type of plane am I flying?" questions suddenly being raised by customers.

Why, then, are not more people being entrepreneurial in everyday transactions w.r.t. safety? Perhaps it is because they think government agencies have their backs. People are economizers, meaning that they seek to conserve scarce resources including time and effort. They will spend less time doing their diligence in ferreting out problems and opportunities if they think someone else will do it for them--or recoup their losses in case of they have chosen poorly.

If the FAA, FDA, FDIC, et al backs it, then it must be safe, right?

This is moral hazard writ large. People are taking more risk than they otherwise would (including self-imposed ignorance of safety issues) because they think that their risky behavior is insured by government agencies.

Over-Caution Bias and the Invisible Graveyard

"Well, Baby-O, it's not exactly Mai-Thais and Yahtzee out here, but let's do it!"
--Cameron Poe (Con Air)

Prof Williams discusses over-caution bias in the context of the FDA. Policymakers in general and FDA officials in particular can make two types of errors. In the context of the drug approval process, a type I error involves delaying approval of a medicine that is safe and effective (i.e., over-caution, or not acting when one should). A type II error is approving a medicine that subsequently exhibits unanticipated side effects (i.e., under-caution, or acting when one shouldn't).

In the case of FDA officials, incentives favor erring to the side of over-caution. If the FDA approved a drug that had unanticipated side effects, then the victims of the agency's mistake would be readily visible. Political uproar would ensue and heads would likely roll.

On the other hand, if the FDA delayed approval of a safe and effective drug, then the victims are all of those who suffered and died because they were denied access to medicine that would have otherwise been available on the market. Because these victims stem from 'errors of omission' and are not readily visible not connectable to the FDA process, the associated type II errors do not attract anywhere close to the political fallout that type I errors do.

To minimize political fallout, FDA officials will clearly prefer making type II mistakes.

Consequently, the over-caution bias embedded in the FDA's regulatory process sends victims to what Prof Williams calls 'the invisible graveyard' on a routine basis.

Insurance Gone Wrong

Those changing years
They add to your confusion
Oh and you need to hear
The time that told the truth
--Level 42

Article here reiterates a point these pages have made before. Healthcare markets have bastardized the concept of insurance. Insurance markets are supposed to be markets for risk management. Risk constitutes potential, not certain, loss.

Risk is not associated with routine expenses. Groceries, oil changes, utility bills are everyday costs that cannot be insured because there is no way to price policies to pool risk in a manner that does not simply transfer economic costs from one entity to another.

Similarly, many health care costs are not legitimately insurable as well. Regular doctor's visits, flu shots, maintenance drugs, etc constitute regular expenses that cannot be managed by risk pooling. Instead, insurance reimbursements for routine medical bills are simply subsidies being paid to one person by another person.

Unfortunately, subsidized markets lack competitive pressure for improvement. Thus, costs for most healthcare products and services rarely decline.

On the other hand, catastrophic medical occurrences like contracting cancer or treatment following a sudden heart attack are the types of events that insurance was designed to manage. Their low probability/high cost nature means that risk pools can be designed in a manner that health insurance programs can actually create economic value to individuals and society at large.

Unfortunately, combining legitimately insurable health care risks with those costs that should not be covered dilutes the true economic benefit of health insurance. It also obscures opportunities to truly reduce economic impact of risky health care events (through better insurance program design + improvements in treatment + reduction in catastrophic event occurrence) over time.

Improving Healthcare Markets

I'm looking for something I can't get
Broken hearts lie all around me
And I don't see an easy way
To get out of this
--Cutting Crew

Hans-Hermann Hoppe originally proposed these four steps to improve healthcare markets on the cusp of Obamacare approval. At that time, he noted that 'the US healthcare system is a mess.' Since then, it has predictably gotten messier, making his recommendations all the more contemporary.

1) Eliminate all licensing requirements for med schools, hospitals, and healthcare personnel. Licensing decreases healthcare supply and raises barriers to entry and entrepreneurial innovation. If buyers value licensing, then approaches will be developed voluntarily rather than forcibly. No mandatory licensing would also eliminate moral hazard among healthcare consumers and prod buyers to increase their search costs to make more discriminating healthcare choices.

2) Eliminate all government restrictions on production and sale of medicines and medical products. No more FDA. Costs and prices would fall, and more alternatives would enter the market. Sellers would be forced by consumers, rather than governments, to provide product information that buyers value.

3) Deregulate health insurance. Because many aspects of health are within an individual's control, they are uninsurable. Moreover, current laws force insurers to cover people who are poor insurance risks, which distorts the practice of risk pooling that makes insurance an economical endeavor. Deregulation means unrestricted freedom of contract--including capability of insurers to cross state lines for business--a practice that is currently forbidden by law.

4) Eliminate all government subsidies to the sick and unhealthy. ECON 101 tells us that subsidies create more of whatever behavior is being subsidized. Eliminating subsidies, including Medicare and Medicaid, would increase motivation to live healthy lives. It would also create markets for charitable giving and social entrepreneurship (e.g., friendly societies) that withered when voluntary cooperation was crowded out by government force.

Inversion Increase

I've had enough of the falseness
Of a worn out relation
Enough of the jealousy
And the intoleration
--REO Speedwagon

Study examines the increase in US corporate inversions. Inversions are buyouts of a foreign entity in which the combined company moves to the foreign jurisdiction. A recent large example in the US is Pfizer's (PFE) merger with Ireland's Allergan.

The study indicates that US inversions have been on the rise since the late 1990s.

The primary motivator, of course, is the high US corporate tax rate which pushes 40%. That coupled with declining corporate tax rates in other parts of the world has many US corporations eyeing greener pastures.

An unfortunate consequence of higher taxes is capital flight.

no positions

Government and Scapegoats

No message could have been any clearer
If you want to make the world a better place
Take a look at yourself
And make the change
--Michael Jackson

When was the last time a government official stepped up and said that he/she owned a problem? Jacob Hornberger suggests that the answer is never. Government is always looking for scapegoats.

Credit crisis, Iraq/Middle East, Holocaust, immigration, drugs, et al.

While interventionism brings death and suffering, the interventionists avoid the mirror.

Inward War

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

I have seen several studies recently claiming that the world is in the midst of an unprecedented war-free period. At first, these claims drew double takes from me. However, if one defines war as formal military conflict between two or more countries then these claims may be true, as we haven't had large scale 'outward wars' in some time.

Of course, there have been hundreds of conflicts that look like war that might not qualify under the above definition. Drug wars in Central and South America, East European conflicts, the War on Terror, etc. The social and economic impact of these 'non-wars' has been huge. For example, the US alone has spent more than $1 trillion on the War on Terror. Imagine applying that pile of economic resources toward voluntary, peaceful concerns.

More significant yet has been the 'inward wars' being waged by governments worldwide against their own citizens. The core competence of government is force--force that can be employed in either offensive or defensive manners. Overwhelmingly, governments are using offensive force. They are acting aggressively against citizens.

Because they are usually not called such, government programs of aggression sometimes fool people into thinking governments are keeping peace rather than waging war. Taxes, for example, are viewed by some as just means of acquiring resources for various interests rather than as confiscation of resources by strong armed agents. However, taxes constitute violent acts against the citizenry--as our founding ancestors ably recognized.

Expansion of the money supply by central banks is also seen as peaceful. However, when money is printed it lowers the value of money already in people's wallets. Those who get control of newly minted cash first effectively confiscate resources from others. Because the gradual theft of resources can be difficult to recognize, inflation is sometimes called the 'invisible tax.'

Sovereign debt is perhaps the most egregious indicator of today's inward war. Governments borrow on promises that it enslave citizens in order to obtain resources to make creditors whole. Sovereign debt levels have never been this high in history. And they are growing thanks to QE..

While outward wars may infrequent at the moment, intensity of inward wars has never been greater.

Urban Blight

When it feels like the world is on your shoulders
And all of the madness has got you going crazy
It's time to get out, step out onto the street
Where all of the action is right there at your feet
--DeBarge

Good thoughts on what could be done right now to reduce urban blight and poverty.

1) Remove all minimum wage laws and licensing requirements and other forms of compulsory unemployment from blighted areas. This would create immediate competitive advantage for workers in blighted areas.

2) Eliminate taxes. Remove sales, property and other taxes from blighted areas. Moreover, allow any person under the poverty line to opt out of Social Security to further reduce the tax burden on them and prospective employers.

3) Eliminate mandatory education. Allow urban students to opt out of their last three years of high school if they work at least 32 hrs per week. Allow students in grades 7-9 to opt out of afternoon classes if they pass a basic competency test and maintain a part time job.

4) Remove gun restrictions from urban areas to allow citizens living in urban areas to carry guns and defend themselves.

5) Legalize marijuana. I would expand this to ending the war on drugs. Legalizing drugs removes a lucrative violent alternative to inner city youth seeking to build wealth.

6) Sell off city property. By privatizing land and facilities, people who own it determine how to make their property productive.

7) Phase out welfare. Welfare remains a primary cause of family and social disintegration. It creates perverse incentives and dependency that hollow out poor neighborhoods.

Blight is an artifact of the State. It can be reversed by increasing economic liberty.

Favor and Payback

"Now, Joe, I think you'd better go back into the Senate and keep those Senators lined up."
--James Taylor (Mr Smith Goes to Washington)

Murray Rothbard used to say that retrospective analysis of political behavior that considered only behavior during time in political office was too narrow. Such analysis, Rothbard observed, was like pretending that the politician was dipped in and out of office with no consideration about what went on before and after office.

He was thinking, of course, of the influence of payback on political favor. A politician could act in-office in a manner that either a) pays back entities in exchange for previous pre-office favors, or b) favors entities in exchange for subsequent post-office payback.

Stated differently, the market for political favor is often subject to delays before both sides of a transaction are fully complete.

Nice example here in the context of our vaccination discussion. Former director of the Center of Disease Control (CDC) was recently named an executive VP at Merck (MRK). CDC is government agency charged with overseeing national vaccination programs. Merck is one of the largest producers MMR (measles, mumps, rubella) vaccine.

Retrospective analysis of this individual's behavior while at CDC can now be cast in more complete light.

Third Party Payers

"Moral hazard is when someone takes your money, and is not responsible with it."
--Gordon Gekko (Wall Street: Money Never Sleeps)

In the early 1990s I was involved in a corporate quality improvement project tasked with reducing annual increases in company health care costs. We were self-insured and paid 100% (!) of employee health expenses. We had few preventive programs or group deals. Employees submitted claims and the company simply paid them with few questions asked. Not surprisingly, company health care costs were increasing 15%+ annually.

This was also the era of Hillarycare, when the Clinton administration was making noise about more government intervention in healthcare markets. Laughable, of course, because Medicare, Medicaid, and other government-centric health care programs were already busting federal budgets to the tune of double digit annual percentage increases.

An early focus of our quality improvement team was getting more control over drug costs. In one initiative, we worked out a deal with a local grocery chain to get discounts on drugs mixed in their in-store pharmacies. Employees would show their ID card and drug costs would be billed directly to the company at the discounted rate. I do not recall a co-pay requirement. Incentive to participate was that employees would be required to pay the difference for drugs purchased outside the special network.

The  team issued a report that explained the pharma proposal, and it circulated among senior management. After reading the report, a disappointed senior VP sat me down in his office and told me that the plan wouldn't work. Although there was a penalty for employees who went outside the network, there was little direct incentive for them to shop for value. As long as there was someone else picking up the majority of the tab, said the VP, then cost will not be substantially curbed.

Today, the arrangement where someone else picks up the healthcare tab is called the third party payer system. Although it has been exacerbated by Obamacare, third party payment has been around much longer. One could argue that it had roots in 1930s health insurance plans that garnered government favor, and then escalated with the advent of Medicare in the 1960s.

Stated differently, hampered healthcare markets that shift costs to others have been with us for a long time.

Until costs are shifted back to those who consume the goods and services, then health care markets are destined to remain inefficient. Third party payment systems enable conditions of moral hazard. Moral hazard is the separation of risk from consequence. People will do less due diligence as consumers because they know someone else will pay.

Higher cost, lower quality, overuse, shortages are certain.

Liberty Xmas List

Frank Cross: Grace, put yourself down for a towel, too.
Grace Cooley: What about my bonus?
Frank Cross: Towel and a facecloth.
--Scrooged

After lamenting the passage of the federal budget, Ron Paul offers a Christmas list supportive of liberty.

1) Shut down the Federal Reserve, an institution that not only degrades citizen's lives thru inflation, but also enables the federal government's massive borrowing habit.

2) Dismantle the IRS, as the federal government is capable of fulfilling its constitutional requirements without an oppressive income tax.

3) Cease US militaristic foreign policy by bringing home all troops and ceasing all foreign aid. Replace it with a policy of peace and free trade with all.

4) Shut down agencies that promote domestic militarization such as the CIA, NSA, TSA. End domestic spying and the unconstitutional war on drugs.

5) End all welfare, including corporate welfare and programs that benefit the politically connected. Phase out low income welfare over time.

6) Padlock the Department of Education and government-influenced education of our children.

7) Scrap Obamacare in favor of a true free market in healthcare.

Hit your knees and pray for these this Christimas.

Liberty for Disease Control

"Somewhere in the world, the wrong pig met up with the wrong bat."
--Dr Erin Mears (Contagion)

Ron Paul argues that it is liberty, not government, that is capable of containing infectious diseases such as the Ebola virus. Countries plagued with infectious disease are usually marked by strong central governments and chronic war. Such countries lack the capital necessary to build strong healthcare infrastructure.

Sadly, US foreign policy has tended to prop up dictatorships and promote militarism in these countries. Moreover, President Obama's recent move to send US troops to West African countries to help contain the Ebola disease was done without Congressional approval for this overseas military deployment. Once again, no specifics were provide as to the duration, cost, or even Constitutional basis of this mission.

The people of Liberia and other afflicted nations would be better off if the US government let these countries alone. This does not mean that people around the world should ignore this problem. Instead, it means that private capital and other assistance in the form of industry and charity should be free to voluntarily mobilize to address the problem.

Private investment and trade would help develop strong healthcare infrastructure. Airlines would be free to protect passengers from disease (lest the carriers lose business) while providing safe means of transport for people seeking treatment in the US (which removes incentive for refugees to lie about exposure to the disease). Experimental medicines should not be hindered by regulatory barriers such as those erected by the FDA's cumbersome approval process.

Limiting goverment is the best way to protect and improve health both here and abroad.