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Mr. Mackey on ObamaCare and Freedom

Whole Foods MarketSupporters of President Obama's plans for healthcare "reform" have pledged to boycott the grocery chain Whole Foods.  They are in an uproar over an article in the Wall Street Journal written by its CEO, John Mackey.

If you haven't read it yet, you should.  In the piece Mr. Mackey suggests that the cause of today's healthcare woes is not greedy corporate executives but misguided government regulation.  He backs this up by identifying eight different reforms that would decrease costs by increasing freedom.  You may be surprised at some of the laws on the books.  Some suggestions from the article:

  • Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.
  • Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

What the Obama administration proposes is the opposite: less individual choice, more tax-based "incentives", and more government spending.  The left will never agree to remove restrictions on doctors and insurers so long as they believe that those providers are bound by the "right" of citizens to healthcare services.  To understand the crucial problem with that notion, we suggest once more that you read Leonard Peikoff's essay on the topic.

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Now Taking Fall 2009 Orders

The Undercurrent is now taking orders for the upcoming September issue!

Articles in this edition of The Undercurrent investigate:

• What is the proper criterion for opposing an ever-expanding government?
• Should illegally downloading music be considered theft?
• Can unethical business practices be tied to ethics education in MBA programs?

Reach thousands of new college students by ordering your copies of TU today. Either go to http://www.the-undercurrent.com/order to order via Paypal, or e-mail your name, address, and the number of copies you need to contact@the-undercurrent.com.

The deadline for placing orders is Sunday, September 20th. Prices for TU are as follows (including shipping and handling):

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If you would like to distribute but cannot afford to do so, please let us know. There is a good chance that we will be able to find a donor to sponsor your distribution efforts. Don’t hesitate to send a request by email to: contact@the-undercurrent.com.

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A Misinformed Public?

House Resolution 3200Across the country, people have been vehemently protesting Obama’s proposal for health care reform.  Thousands have gathered at town hall meetings to show their representatives that they oppose Congress’s plan to completely overhaul healthcare in America.  Representatives in favor of the current proposals insist that the protests are due to  “people  just getting information that’s flat wrong,” such as that care will be rationed, health saving accounts will be illegal, private insurance companies will be driven out of business by the public option, etc.

Dr. John Lewis, associate professor of political science at Duke University, has taken the time to translate some critical passages from the bill into a language easier to understand.  The passages he evaluates clearly describe a rationing of care, an unprecedented amount of government control over private insurance companies, and massive financial incentives to forego private insurance for the public option.  It seems that the protestors are not so misinformed after all.

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The (False) Logic of Sacrifice

Empty WalletIn his latest book, The Life You Can Save: Acting Now to End World Poverty, the philosopher Peter Singer claims that you are morally obligated to relieve poverty. Singer offers his readers the following "proof" demonstrating why everyone is immoral if they don't sacrifice for others.

"Premise #1: Suffering and death from lack of food, shelter and medical care are bad.

Premise #2: If it is in your power to prevent something bad from happening, without sacrificing anything nearly as important, it is wrong not to do so.

Premise #3: By donating to aid agencies, you can prevent suffering and death from lack of food, shelter and medical care, without sacrificing anything nearly as important.

Conclusion: Therefore, if you do not donate to aid agencies, you are doing something wrong."

Any decent person would agree with Singer's first premise, that "suffering" and "starvation" are to be regarded as "bad". Many may even agree with his view that if a person doesn't regard his total income as "important", then there's nothing wrong with giving away at least a small percentage of it.

But let's extend the idea even further. If it's not "important", why not give half of one's income to charity (an act Singer has praised others for doing in his book)? It's likely that many of us could easily and comfortably survive on half of our income - we could get a smaller apartment, forgo lots of entertainment, shop a bit less, and so on. But where does one draw the line between what is "important" and what isn't "nearly as important"?

Moreover, who decides what counts as "important"? Singer? The government? God? The latest Gallup poll? Perhaps Singer would say that each individual must decide for himself. But regardless of who decides your contribution, or its quantity, one point is clear - you should give it up.

Singer is calling for us to sacrifice. But what is an act of "sacrifice" if it doesn't involve giving up something you consider "important"? Are others entitled to property you would consider "important", simply because they can claim a need to it?

Suppose someone considered all of his money as important. Imagine someone said that he didn't want to give up any of the values his money could buy - not the latest movie, the family trip to Disneyland, nor the savings for a new home. Such a person, in Singer's eyes would embody the height of immorality.

Singer's book may be new, but his message is the same view held by the long line of preachers and philosophers throughout history who have asked their fellow men to sacrifice their happiness for others.

Altruism, the ethical notion that man should sacrifice for others, has been embraced by virtually every philosopher in history, except for one—Ayn Rand. In her novel Atlas Shrugged, Rand argues that if we think about the nature of altruism, we'll discover that far from guiding man towards a more fulfilling life, sacrifice will lead to the opposite.

While altruism has long been the ethical status quo, Singer attempts to reinvent it, not based on revelation from god or political campaign slogans, but with a "proof" that holds the veneer of reason and logic. Upon closer inspection, we see that it falls apart. Fortunately, Ayn Rand offers us a new morality, one fully validated by the facts of reality and human nature - where the hallmark of a moral life is not self-sacrifice, but the principled pursuit of one's own happiness.

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The Caretaker State?

American Flag"It will be hard," President Barack Obama acknowledged in a speech earlier this year to Congress.  But he added, "Let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year."  Some years before, then-President George W. Bush said, "...We reached an agreement to reduce pollution from off-road diesel engines by 90%.  I've got a plan to increase the wetlands by 3 million...I proposed to the Congress a Clear Skies Initiative to reduce sulfur dioxide, nitrogen oxide and mercury by 70%. ...I proposed a hydrogen-generated automobile.  We're spending a billion dollars to come up with the technologies to do that."

Such comments are nothing new.  For decades, politicians have spoken about their visions to "take care" of American citizens, the world population, and the Earth itself.  Lyndon Johnson implemented Medicare and Medicaid in the 1960s in order to look after the medical needs of the elderly and the poor.  Franklin Roosevelt implemented Social Security in the 1930s to provide for people's finances after retirement.  Theodore Roosevelt implemented forced conservation in the beginning of the twentieth century with millions of miles of government land ownership.

Underlying these policies is the idea that it is the government's responsibility to oversee and take care of its citizens, to establish for them substantive ends such as universal healthcare, workers' insurance, or pristine environments.  But long before Presidents Obama and Bush, long before even Presidents Johnson and Roosevelt, presidents who held a very different vision of the role of government led America.

America's founding presidents conceived of the government as an institution that would protect mans' rights: the rights to life, liberty and the pursuit of happiness. It is "to secure these rights," not provide health care or serve as custodians of the Earth, that "governments are instituted amongst men".  The government, in the view of men such as Jefferson, Adams, and Madison, should be an institutionalized policeman and judge, not an institutionalized social worker and gardener.  These men proclaimed the purpose of government to protect man's rights, not to run charities or manage retirement funds.

They understood that if the government endeavored to do anything besides protect its citizens' rights, such as provide health care or worker's insurance, it would have to violate the rights of some in order to give those products to others.

For example, if the government undertakes to provide insurance to workers, it must obtain the funds to do so from the pockets of others and thereby violate their right to the fruits of their labor.  If it promises health care to the elderly, it must ensure, ultimately through regulatory force, that doctors treat them, thereby violating the rights of those doctors to engage in business with whom they choose.  If the government guarantees any material good or service produced by the effort of another human being, it must violate the rights of that human being and force him to forfeit what he has produced to others, making him a slave.  Either the government protects rights, or it pursues some other goal and thereby violates them.

So what vision of government do we, as Americans, endorse today?

The answer depends on our view of human nature.  Do we believe, as our Founders did, that man is a rational animal, capable of achieving his values through his own thought and effort?  Or do we believe that man is helpless, in need of a governmental overseer to decide what is best for him?  Do we believe that the individual is morally entitled to the fruits of his labor?  Or do we believe that he has a duty to sacrifice to his neighbor, a duty that Uncle Sam can force him to practice?  Is our time and property-i.e. our life-properly our own by inalienable right, or can the government force us into service?

These are the questions that we as Americans must examine, ponder, and answer, if we value liberty and want to understand why our politicians keep trying to one-up each other in their social and environmental programs.  The fundamental issue of the day is not whether we should pragmatically support or oppose a particular plan of Obama's or whether John McCain would have been any better in office.  The fundamental issue is our conception of the proper role of government and our justification for that conception.

To accept and endorse the likes of Jefferson, Adams, and Madison is to accept and endorse an underlying view of government as the protector of individual rights.  It is to uphold a view of man as a being capable of achieving his own happiness through his own effort.

In contrast, to accept and endorse the likes of Roosevelt, Bush, and Obama is to accept and endorse an underlying view of government that rejects America's founding values of individual rights and sacrifices them to governmental 'caretaking'.  It is to surrender to a view of man as a helpless being, incapable by himself of achieving his own values and happiness.  And it is to concede that noble vision of our Founders as just an impotent, faded memory.

Such a concession should not be made lightly.

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Lowering the Poverty Level to Reduce Poverty

What do liberal New York Times' contributors do when the percentage of GDP consumed by ever-increasing government spending grows too large to ignore?

They replace GDP with a new measurement, of course. One which includes such non-quantifiable values as “ecosystem services” and “regulation of our climate on a global and local scale.” It'll turn the economic ruin of “cap and trade” into gold, too.

The answer to our bloated government is not to hide the destruction of American wealth behind cryptic economics. It's to grasp the proper role of government in a free society, and embrace the nature and cause of wealth creation.

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Help Wanted: “Difference” a plus

Business TeamCorporate America was once criticized for its alleged culture of conformity and tacit support of "glass ceilings" preventing minority advancement.  Now, a day hardly goes by in any corporate setting without mention of the importance of "diversity."  Nearly all major companies name diversity as among the central values of their corporate philosophies—PepsiCo strives to "Win with diversity and inclusion," while American Express declares that "Diversity is our business formula for success."

The word "diversity" often brings to mind desirable things.  In biology, diversity of a population makes it more robust in resisting disease.  As consumers, we benefit from a diversity of choices in the products and services we buy.  In business, a company needs a diverse collection of knowledge and skills to accomplish its mission—human resources, finance, engineering, marketing, management, and others are all critical to its success.  It would seem that diversity is indeed something worth promoting as a central corporate value.

But there is a subtle yet important difference between the kind of diversity just described and the kind so zealously sought after by the corporate world today. The term "diversity" simply means difference or variety; for a group of things to be diverse means to be different in some way. The significance of that difference depends upon the context and standard. Owning a portfolio of stock in different companies, for example, serves the goal of minimizing financial risk. But having a diversity of strong and weak players on a football team does not serve any valid goal, and is therefore a strategy for defeat.

"Diversity" per se is thus not necessarily a value—it can be good, bad, or irrelevant, depending on what the goal is. In the context of business, we should ask: what is it that PepsiCo wants to "win"? What is the nature of the "success" that American Express seeks to achieve?

The fundamental goal of any corporation is to profit by offering a quality product or service to its customers. If it fails in this goal, it will cease to exist. Achieving profitability is a difficult and continuous process. The people involved need to identify and research markets—to develop, produce, and sell products—to market and deliver services-to maintain and improve systems. To accomplish all this, especially in the globally competitive business world of today, a company's workforce must possess a vast array of knowledge, skills, and personal traits like intelligence, diligence, and creativity.

In their efforts to "win with diversity", however, the corporate world is seeking a diversity not of talents and knowledge, but of genders and skin tones. Companies like Verizon and Xerox tout the number of minorities in executive positions, and General Motors has been praised for choosing its suppliers not based strictly upon price or quality, but also upon the number of the supplier's black employees.  As one leading "diversity expert" put it, "If the diversity program is not effective in producing a diverse racial, gender, ethnic workforce, then it's not worth the paper it's written on."

Such actions reveal that companies are using "diversity" as a basis for making basic business decisions like hiring and purchasing.  But such a standard offers no legitimate guidance in these areas. For example, there are many important questions to be asked when choosing a new company executive or supplier.  Does the individual have the drive and experience to lead a division?  Is the potential supplier cost-efficient and reliable?  The answers to such questions determine whether the prospective employee or supplier will advance the company's ultimate goal.  The race and gender of the people involved, in contrast, should never have reason to enter the discussion, since those traits have no bearing upon the fundamental issue: an individual's ability to do what needs to get done to make the business productive and profitable.

Martin Luther King, Jr. was right to argue that everyone "not be judged by the color of their skin but by the content of their character." By highlighting traits like skin color and gender, corporate diversity programs achieve exactly the opposite: an environment where important character traits are valued less, while insignificant traits are treated as essential.

If companies want to succeed by encouraging and rewarding talent and productive achievement, the proper goal is not to promote diversity, but to make it irrelevant—to make the corporate office a place where one's abilities and virtues are what counts, and one's race and gender are beside the point.

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Can we be Brainwashed?

Marlboro ManRecently President Obama signed into effect a historic piece of legislation that greatly affects the tobacco industry and its customers.  The bill, which President Obama eagerly signed, finally subjugates the tobacco industry to the dictates of the FDA.

The FDA now has the authority to regulate the tobacco industry with impunity.  It can dictate the contents inside tobacco products, such as nicotine and other chemicals, and impose severe restrictions on advertising.  It will now be illegal for tobacco companies to sell candy and fruit flavored cigarettes.  Cigarette companies will no longer be permitted to have advertisements with colorful images or rest on attractive store displays but instead must be black-and-white and consist of text only.  Some experts even predict that by regulating the content of cigarettes, the new FDA standards will "make them taste so bad, it [will] deter users."  Finally, tobacco companies will be required to themselves pay for the new bureaucracy that will regulate them.

President Obama hailed this legislation as a way to "protect our kids and improve our public health."  He claimed that children especially are "aggressively targeted as customers by the tobacco industry.  They're exposed to a constant and insidious barrage of advertising where they live, where they learn, and where they play." The underlying premise behind this bill is that when people, especially kids, see an attractive advertisement or taste a candy-flavored cigarette, they cannot resist purchasing the product being promoted.   Tobacco industries might create an ad so appealing or engineer a cigarette so delectable that Americans will be helplessly led to buy a pack of cigarettes.

Tobacco companies, however, do not possess the power of coercion.  They cannot do anything to force people to purchase their products.  All they can do is offer and promote products that their customers value.  Cigarette ads, like all ads, are made to appeal to a certain target market.  Ads for alcohol aimed towards young men, for example, often display pretty women showing appreciation for a man's choice of alcoholic beverage.  Such an advertisement will seem appealing to some people and appalling to others- but all are free to choose to purchase the product being promoted, or to purchase something else.  Similarly, when tobacco companies create cigarette ads, they try to appeal to the interests of their target market.  Viewing such ads, as enticing as they might be, does not brainwash anyone into purchasing an alcoholic beverage or a pack of cigarettes.  Advertisements only serve to actively remind people of the existence of certain products.  The choice to purchase these products, no matter how seductive they might be, remains just that—a choice.  Similarly, while the sweet taste of a fruit flavored cigarette might tempt a smoker to purchase another cigarette, the decision to do so is ultimately his.

Although those like President Obama seem to think differently, people are capable of making responsible decisions for themselves.  Individuals have the responsibility to assess the risks and benefits of smoking and then decide whether to smoke occasionally, frequently, or never.  There are some who make these decisions without such careful consideration, but that too was their choice, and they should bear the consequences of their decisions.

Anti-smoking advocates point out, however, that children cannot make careful, informed decisions about cigarettes.  But this isn't just true of cigarettes.  Left to their own devices, children might decide to eat too much candy, stay up all night watching television, or use bad language.  Should the government also monitor how much candy children eat or when they go to bed?  Obviously not.  It is the responsibility of parents to guide their children into making the right choices.  Parents need to anticipate difficult situations that may arise in their children's lives, such as peer pressure to have sex or do drugs, and discuss with them how to resolve these situations.  If there is a billboard advertising cigarettes in a child's neighborhood, it is his parents' responsibility to explain to him why he should not try a cigarette, even if it looks "cool" or exciting.

As long as tobacco companies are not presenting false information (which should rightfully be a crime), they should be able to advertise in any way they want and offer whichever products they choose in order to advance their business.  Tobacco companies do not force us to buy their products.  We choose to do so, and it is high time we take responsibility for our actions, instead of punishing an industry that is guilty only of offering products that so many people value.

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Is Health Care a Right? Answer the question, Congressmen!

PJTV Interview with Reps Price and CantorOf the many specials on health care that have been taking place these past few weeks, this recent PJTV forum should be singularly commended for daring to ask of our political leaders the one question upon which the whole concept of government health care rests: Is health care a right?

This crucial question has been notoriously absent from Presidential speeches, interviews in the mass media, and political debate. Yet the answer could not have more fundamental implications for the Obama administration's health care plans. Rights, loosely speaking, are the governing principles of society, the conditions that must be met if human beings are to successfully live together in a social setting. If something—liberty, property, freedom of conscience—is a right, it means that government is properly concerned with securing that right. To say that health care is a right is to say that it is proper for government to be concerned with providing health care. On the other hand, if health care is not a right, then the very idea of government-sponsored health care rests on a faulty assumption 

So how did the Congressmen on PJTV, self-declared opponents of the Obama plan, answer the question? Republican Congressman Eric Cantor, described as one of the leading voices in opposition to the Obama health care bill, began his answer, "Health care is something all of us want to be able to access, no question. We want coverage..." He went on to note that this question is not something we think about when we think about health care, and then stopped talking about it. Congressman Tom Price, asked the same question, similarly evaded the issue by noting that "[w]e're a compassionate nation. The American people want to make certain that folks are able to seek the healthcare they desire."  Faced with the central philosophic question underlying their entire campaign, these two politicians simply avoided confronting the matter.

America needs its lawmakers to approach the issues of the day in fundamental terms, and to base their advocacy on those fundamental judgments. In the case of health care, there is no more fundamental question than whether health care is or is not a right. Any politician that holds a position on health care—and all should—has a responsibility to ask and answer this question in his own mind, to announce his view to his constituents, and to consistently advocate his own position.

For the Undercurrent's view on this question, see here:

http://www.afcm.org/hcinar_video.html

http://the-undercurrent.com/paper/the-business-of-healthcare/

http://the-undercurrent.com/blog/a-tale-of-two-economists/

http://www.westandfirm.org/

http://www.aynrand.org/site/PageServer?pagename=media_topic_healthcare

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The Cost of Being Too Good

©iStockphoto.com/rafal©iStockphoto.com/rafal

At a time when many companies are struggling to stay profitable, the world’s largest computer processor manufacturer recorded a net profit of $1 billion in its second quarter. Despite this impressive feat, however, the corporation reported a quarterly loss of $398 million, the first loss it has experienced in 21 years.

What accounts for the $1.4 billion difference?

It is now in the pockets of European bureaucrats. In May, the European Union fined Intel $1.45 billion for violating antitrust laws. The EU accused Intel of “predatory pricing,” an ominous euphemism for offering products more cheaply than its competitors.

Intel plans to appeal the fine and rightfully so. Intel did not send thugs to threaten customers against purchasing computer chips from its rivals. All it did was make an offer to retailers and manufacturers that they were free to refuse. The reason most of them accepted the offer is because Intel products are so popular amongst customers. Indeed, as Jonathan Zuck, president of the Association for Competitive Technology, noted, “For the past 20 years, the microprocessor industry has delivered more innovation, more speed, more functionality, and lower prices. Over the past 10 years, the average price of Intel's PC microprocessors has dropped by 60 percent.”

Who will benefit from Intel’s punishment? Consumers were already overwhelmingly benefiting from Intel’s superb quality of products and low prices. By issuing this fine, the EU has only made it more difficult for Intel to do what made the company so successful in the first place: continuous improvement and innovation, accompanied by a decrease in prices. With the additional $1.45 billion, which Intel rightfully earned, who knows what new technology it might have been able to create, enhancing our computing experience? Rather than using their profits to fund ventures which would bring greater value to consumers and enable Intel to fund further innovation, this money is now in the idle hands of the EU.

Neither will this course of action help investors or employees. During the second quarter of last year, Intel equated its net profit to 28¢ per share, while this quarter it suffered a loss of 7¢ per share. This could substantially harm investors, especially those who hold Intel stock in their 401(k) plans. Likewise, the company already announced a staggering number of layoffs earlier this year. Only time will tell how many more employees will experience freezes in their annual raises or be laid off as a result of this loss.

All of this highlights the perverse injustice of European bureaucrats who arbitrarily turned Intel’s healthy profit into a painful loss.

Perhaps the most severe damage of this fine will be the message the European Union has sent to Intel: don’t be too successful- don’t create products so superlative that other companies cannot possibly match the incredible amount of time, study, and brilliance that you have put forth- don’t offer your customers too good a deal. Next time, Intel will think twice about creating a product that is too good- which is too bad for the rest of us.

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