Krugman: Celebrate Choices That Ruin Lives, If That's What Big Government Wants

Paul Krugman’s (Health, Work, Lies) reveals he does not understand this most basic principle of economics. He seems to think that the choices people make under screwball government regulations will make them better off – as long as no one is forcing them to make these choices. Per Krugman, bad choices motivated by bad incentives are to be celebrated not sympathized!

go to forbes.com

Free to Choose Means Less Freedom: Obama on Birth Control

The Times The Freedom to Choose Birth Control convolutes common language and fails to comprehend fundamental economics. It says that “free access (to birth control for any woman), along with the ability to receive family planning and preventive health services, was at the foundation of health care reform.”  I did not know that. As I recall, Obama did his best to dodge that issue during the non-debate over his health care reform.

Most of us interpret “free to choose” in Milton Friedman’s sense. In a market economy, we are free to choose among alternatives. As long as we are prepared to pay the market price, we can buy whatever car, food, movie ticket, laptop, or anything else we want. No one can dictate to us how to choose among alternatives. That is our business, and Friedman considered this the cornerstone of economic freedom.

Obama, apparently, understands “free to choose” differently. In his version, free to choose means getting goods and services without paying. Even though birth control is a regular non-catastrophic expense, probably not higher than feeding a daily coffee habit, women are not free unless they have it free.

In Obama’s mind there are certain goods that must be supplied to us free of charge in order for us to be free. Insofar as no business can afford to part with its goods and services free, the state must dictate an arrangement that provides them to the customer at no out-of-pocket cost.  The state can only do this by mandates that force providers, insurance companies or anyone else involved to do something they would not do on their own.

The freedom to choose birth control (at a zero price) represents a loss of freedom.

Why stop at birth control? We should have the freedom to communicate. We should receive cell phones with unlimited minutes for free. Until we have Obama’s grand public transport system, we should have the freedom to move freely between point A and B. The state should dictate that every person get a free car, as long as it runs on electricity. The same applies to food, electricity, and gas. Why not? Why not admit those lacking in communications, gas and food “freedom” unlimited access to Wal-Mart. After all Wal-Mart exploits is employees and deserves it. Just throw open the doors and shut down the cash registers.

The freedom to have life’s essentials free of charge represents a loss of freedom. I assume Obama understands this and is doing it deliberately.

In my Essentials of Economics classes I used to ask students to consider what would happen if we gave things away free. The correct answer was chaos, followed by state rationing. I think the New York Times editorial board would flunk my exam.

Minijobs, Milton Friedman, and an Overlooked Success Story (Berlin Journal #3)

One of several reasons why Germany has the lowest unemployment rate in Europe is the “minijob.” Long-term recipients of unemployment benefits and social assistance (Haartz IV recipients) can keep extra earning from “minijobs” up to 160 Euros per month. They can earn up to 400 Euros but their benefits are reduced for earnings above 160 Euros. This works something like Milton Friedman’s negative income tax. Persons with minijobs are counted as employed.

Notably, the German Federal Labor Agency reports that 93 percent of minijob holders earn 160 Euros. Who says the long-term unemployed cannot count?

October 3 was the Day of German Reunification – a national holiday. The streets were empty except for huge crowds in downtown Berlin and Bonn. Nightly television ran documentaries and showed films about life in a divided Germany. Overlooked was a major success story. The most respected  public opinion survey research organization reported for the first time a near parity in life satisfaction between the East and German populations. At huge cost and effort, it seems German reunification has been completed. No one seems  to notice, which is a victory in itself.