A "Criminally Insane" Cliff Asness Takes On Health Care Mythology And Pretty Much Everything Else

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AQR's Cliff Asness, a hedge fund manager (and ex-Goldmanite) who recently achieved public acclaim by lashing out quite vocally against some of the administration's tyrannical practices, yet stands to lose some of that new found populist credibility by being one of the first "scholars" supporting the petition to limit oversight and visibility of the "independent" Goldman-enhanced Federal Reserve, has just hit the road with another piece of a Hunter S. Thompson-esque Op-Ed. The whole piece, captured below, is a must read, and while Asness astutely provides the following legal disclaimer

"AQR's legal department would like me to add that I am criminally insane and barred by an order of rhetoric protection from speaking on AQR's behalf. Anyone trading on my advice, or a client, consultant, employee or Iraqi insurgent thinking he has been wronged by my attitudes or opinions can have a $250 out-of-court

settlement right now if you'll sign a waiver, otherwise we'll break you. Oh, and we lied about the $250, but seriously, we will break you. Please note, nobody can predict where markets will go in the short-run and sometimes even the long-run. When I point out individual things in the marketplace that I think are strange, or wrong, it doesn't mean I have the perfect answer or can easily make money from it for my clients, for myself, or certainly for you reading this essay! Furthermore, if you read one guy's opinion and do anything based solely on that, you are an idiot. Next, as the legalese above alludes to, the actual funds and accounts AQR manages are run using models that may or may not agree with what I'm writing herein, particularly as our models will generally have a shorter time horizon than the things I'll be writing about. Listen to me at your own risk! "

his writing style is certain to not make him many new friends in high places (Zero Hedge sympathizes).

In a sweeping invective that leaves not one human being uninsulted (and brings a tear of joy and pride to the eye of this author), Cliff takes on:

Google: "We all know
the Google guy with one eye-brow would crush your larynx for creating a
competing search engine."

NASA: "Those twisted fascist
bastards ignored me and we still have not visited the Crab Nebula."

Michael Moore and Al Gore: " Step two is
kicking their asses back to Cuba
where they can get in line with Michael Moore and Al Gore for their free gastric

Canadians: " I’m a big fan of Canadians in general
(particularly Wayne Gretzky and Mario Lemieux, who if healthy probably would
have eclipsed Gretzky – but I digress), but when it comes to pharmaceuticals
they are lucky parasitic hosers. "

Scandinavia: "The temporary success of (comparatively speaking) twelve herring-eating
homogenous people is not an example that applies to anything outside of perhaps
Minnesota, and they elected Stuart Smalley, so under any system they need
serious free anti-psychotic medication immediately. "

The New York Times: " The New York Times still thinks Stalin was a
pretty decent Joe."

Congress: "A bureaucracy run by Congressional committee whose members, like the Russian commissars, will, I guarantee you, still get
the best health care the gulag hospitaligo can provide."

Hungarian billionaires: "The one guaranteed to get me yelled at or
perhaps picketed by a mob waving signs printed up with George Soros’s

And of course Obama himself: "I think Barney Frank, and Chris Dodd and Rahm
Emanuel (and his boss), and the rest of the K-street gang are smarter than
that.  I think they understand what they
will lose if freedom wins."

Must read:


Health Care Mythology


Clifford S. Asness, Ph.D.
Managing and Founding Principal
AQR Capital Management, LLC

Comments welcome: comments@stumblingontruth.com

What We Know That Ain’t So

Rogers famously said, “It isn't what we don't know that gives us
trouble, it's what we know that ain't so.” So it is with the health
care debate in this country. Quite a few “facts” offered to the public
as truth are simply wrong and often intentionally misleading. It seems
clear that no truly productive solution will emerge when these false
facts represent our common starting point. So, this essay takes on the
modest task of simply disabusing its readers of some untrue notions
about health care.

I do not take on the harder task of
proscribing how we should (and if we should) reform health care.
Important work must be done here by those who understand, far better
than I, the details of health care provision. However, no details are
necessary for this essay, and no animals (though perhaps some egos)
were harmed in its creation. The fallacies I present are basic and it
takes only a rational economic framework to expose them.

are large groups of people in this country who want socialized medicine
and they sense that the stars are aligning, and now is their time to
succeed. They rarely call it socialized medicine, but instead “single
payer health care” or “universal coverage” or something that their
public relations people have told them sounds better. Whatever they
call it, they believe (or pretend to believe) a lot of wrong?headed
things, and they must be stopped. Step one is understanding how and why
they are wrong. Step two is kicking their asses back to Cuba where they
can get in line with Michael Moore and Al Gore for their free gastric

Finally, please read my standard disclosure (though
it’s more designed for something that might be construed as financial
advice, it can’t hurt) and my admission of non-originality.[i],[ii]

Myth #1 Health Care Costs are Soaring

they are not. The amount we spend on health care has indeed risen, in
absolute terms, after inflation, and as a percentage of our incomes and
GDP. That does not mean costs are soaring.

You cannot judge the
“cost” of something by simply what you spend. You must also judge what
you get. I’m reasonably certain the cost of 1950’s level health care
has dropped in real terms over the last 60 years (and you can probably
have a barber from the year 1500 bleed you for almost nothing
nowadays). Of course, with 1950’s health care, lots of things will kill
you that 2009 health care could prevent. Also, your quality of life, in
many instances, would be far worse, but you will have a little bit more
change in your pocket as the cost will be lower. Want to take the deal?
In fact, nobody in the US really wants 1950’s health care (or even
1990’s health care). They just want to pay 1950 prices for 2009 health
care. They want the latest pills, techniques, therapies, general genius
discoveries, and highly skilled labor that would make today’s
healthcare seem like science fiction a few years ago. But alas,
successful science fiction costs a lot.

In the case of health
care, the fact that we spend so much more on it now is largely a
positive. The negative part is if some, or a lot, of that spending is
wasteful. Of course, that is mostly the government’s fault and is not
the part on which the socialists want you to focus. We spend so much
more on health care, even relative to other advances, mostly because it
is worth so much more to us. Similarly, we spend so much more on
computers, compact discs, HDTV, and those wonderful one shot espresso
makers that make it like having a barista in your own home.
Interestingly, we also spend a ton more on these other items now than
we did in 1950 because none of these existed in 1950 (well, you could
have hired a skilled Italian man to live with you and make you coffee
twice a day, so I guess that existed and the price has in fact come
down; my bad, analogy shot). OK, you get the point. Health care today
is a combination of stuff that has existed for a while and a set of
entirely new things that look like (and really are) miracles from the
lens of even a few years ago. We spend more on health care because it’s
better. Say it with me again, slowly – this is a good thing, not a bad

In summary, if one more person cites soaring health care
costs as an indictment of the free market, when it is in fact a
staggering achievement of the free market, I’m going to rupture their
appendix and send them to a queue in the UK to get it fixed. Last we’ll
see of them.[1]

Myth #2 The Canadian Drug Story

Ah … one of the holy myths of the “US health care sucks” crowd. This should be fun.

general story is how you can buy many drugs in Canada cheaper than you
can buy them in the US. This story is often, without specifically tying
the logic together, taken as an obvious indictment of the US’s
(relatively) free market system. This is grossly misguided.

what happens. We have a (relatively) free market in the US where drug
companies spend a ton to develop new wonder drugs, a non-trivial amount
of which is spent to satisfy regulatory requirements. The cost of this
development is called a “fixed cost.” Once it’s developed it does not
cost that much to make each pill. That’s called a “variable cost.” If
people only paid the variable cost (or a bit more) for each pill the
whole thing would not work. You see, the company would never get back
the massive fixed cost of creating the drug in the first place, and so
no company would try to develop one. Thus, companies have to, and do,
charge more than the variable cost of making each pill.[2] Some look at
this system and say to the drug companies “gee, it doesn’t cost you
much to make one more pill, so it’s unfair that you charge much more
than your cost.” They are completely wrong and not looking at all the

So, let’s bring this back to our good natured friends to
the North (good natured barring hockey when they’ll kill you as soon as
look at you[3]). They have socialized medicine and they bargain as the
only Canadian buyer for drugs, paying well below normal costs. Drug
companies that spent the enormous fixed costs to create new miracles
are charging a relatively high cost in the free and still largely
competitive world (the US) to recoup their fixed cost and to make a
profit. But socialist societies like Canada limit the price they are
allowed to charge. The US-based company is then faced with a dilemma.
What Canada will pay is not enough to ever have justified creating the
miracle pill. But, once created, perhaps Canada is paying more than the
variable cost of each pill. Thus, the company can make some money by
also selling to Canada at a lower price as it’s still more than it
costs them to make that last pill.

However, this is an accident
of Canada being a less-free country than the US, able to bargain as one
nation, much smaller, and next door. If we all tried to be Canada it’s
a non-working perpetual motion machine and no miracle pills ever get
made because there will be nobody to pay the fixed costs. I’m a big fan
of Canadians in general (particularly Wayne Gretzky and Mario Lemieux,
who if healthy probably would have eclipsed Gretzky – but I digress),
but when it comes to pharmaceuticals they are lucky parasitic hosers.
Drug companies in general sell their products to Canada at low prices,
making a little profit, and reducing slightly the amount they need to
charge other North Americans. This does create the silly illusion that
the Canadian system is somehow better than ours because our own drugs
are cheaper there. They are only cheaper to the extent we are
subsidizing them by paying their portion of drug development costs and,
unfortunately, we cannot subsidize ourselves (or we go blind).[4]

what is the purpose behind those who tell tales of these cheap Canadian
drugs? Obviously they seek to ridicule our freer system by putting the
parasitic and socialist system on a pedestal. They seek to imply that
our system is broken, and delivers only expensive drugs, when the
socialist Canadian system delivers the goods for its people. Thus, they
implicitly argue that we need to have socialism here. It’s not

So, repeat after me. We could go with the Canadian
system and have super cheap drugs, if only we can find a much bigger,
much more medically advanced, much freer country right next to us to
make miracle drugs for themselves, and then we insist that we pay them
only a bit above their variable cost for our share, and then they in
turn agree to let us be their parasite. Mexico, would you mind helping
us out?

Myth #3 Socialized Medicine Works In Some Places

is a corollary to the “Canada as parasite” parable above. The funny
part is socialized medicine has never been truly tested. Those touting
socialism’s success have never seen a world without a relatively (for
now) free US to make their new drugs, surgical techniques, and other
medical advancements for them. When (and I hope this doesn’t happen)
the US joins in the insanity of socialized medicine we will see that
when you remove the brain from the body, the engine from a car, the
candy from the striper, it just does not work.

So, please,
stop pointing to all those “successes” that even while living off the
US still kill hard-working people who could afford their own health
care while they stand in line for the government’s version (people’s
cancers growing while waiting 10 weeks for a routine scan, which these
people could often afford on their own if allowed, is a human tragedy).
Even the successes you gin up for them would not be possible without
the last best hope of humankind (the US) on the front lines again
making the miracles for the world.

Specifically, let’s also stop
citing the Nordic countries as examples. The temporary success of
(comparatively speaking) twelve herring-eating homogenous people is not
an example that applies to anything outside of perhaps Minnesota, and
they elected Stuart Smalley, so under any system they need serious free
anti-psychotic medication immediately. Anyway, the Nordic country’s
touted “success” is going to go the way of the Soviet Union’s plan to
bury us, as their changing demographics (far more economic diversity
and an aging population) change their culture and show the cracks in
their utopian fantasy. As Milton Friedman (paraphrasing) said to a
Swede bragging about how little poverty there was in his country "well,
yes, I too have observed that among Swedes in America, there's also
very little poverty."

To put it simply, right now the US’s free
system massively intellectually subsidizes the world’s unfree
(socialized) ones. That sucks. The only thing that would suck worse is
joining them without anyone to subsidize us all.

Myth #4 A Public Option Can Co-Exist with a Private Option

one has been the subject of some hot debate. Let’s first define it.
Part of the current junta’s plan is to add a “public option” for health
insurance. That is health insurance provided by the government
(actually provided by you and your neighbors – this is a good thing to
remember whenever you find yourselves thinking anything comes from the
government, really, if you take away anything from this essay take away
this!). They claim this “public option” can co-exist fairly alongside
private health insurance, increasing competition and keeping the
private system “honest”, and not deteriorate to a single payer
(socialized medicine) system. They are wrong, or very dishonest, as in
unguarded moments they admit that the single payer socialized system is
what they really want. The New York Times disagrees with me, thinking
the two can co-exist. But the New York Times still thinks Stalin was a
pretty decent Joe.

Those advocating the “public option” say it’s
just there to keep private enterprise honest. They point out that
private doctors prescribe more expensive procedures than ones employed
by the government, and then use that as evidence that the private
system has inefficiencies (to get as inefficient as the government
they’d have to proscribe enough CAT scans to turn you into Spider-Man
if conveniently bitten by an arachnid along the way). It makes me want
to ask them, “but then don’t we need that in every industry? Doesn’t
the already massive competition in health care keep things honest?” Of
course, this leads to the uncomfortable conclusion that by their logic
the government must be a major player in every industry. Ah, just when
you think you have them, you remember, they are socialists. They have
you! This is in fact what they desire. Don’t throw them in the briar
patch. But, in our case they are mendacious socialists who know that
they will not achieve their massive imposition of state control on all
aspects of life if they are honest about it. So they are dismantling
liberty piece by piece. Now, let’s get back to the idea that the
government can run a fair “private option”, but not forget that there’s
nothing special about health care.

The government does not
co-exist or compete fairly with private enterprise. It does not play
well with others. The regulator cannot be a competitor at the same
time. It cannot compete fairly while it owns the armed forces and
courts. Finally, it cannot be a fair competitor if when the “public
option” screws up (can’t pay its bills), the government implicitly or
explicitly guarantees its debts. We have seen what happens in that case
and don’t need a re-run.

The first thing the government does is
underprice the private system. You can easily be forgiven for thinking
this is a good thing. Why not, cheaper is better right? Wrong. They
will underprice private enterprise by charging less to the purchaser of
health insurance, not by actually creating it cheaper. Who makes up the
difference? Well, you and your family do if you pay taxes, or your kids
will pay taxes, or their kids will pay taxes. The government can always
underprice competition, not through the old fashioned way of doing it
better, they never do that, but by robbing Peter to pay for Paul. They
are taking money from your left pocket and giving you a small portion
of it back in your right pocket. They do it every day before breakfast,
and take a victory lap for the small portion they return.

the government ultimately always cheats when it’s involved in “honest”
competition. Try mailing a first class letter through Fed-Ex, or
placing an off-track bet with a bookie, or playing a lottery through a
private company. Uh, you can’t, so please stop trying. I don’t want you
to hurt yourself. Once the government discovers it cannot win, it
changes the rules. You see, the government has the power to legislate,
steal, imprison, and kill. Those are advantages most private firms do
not have, save Google, and you didn’t hear that from me (we all know
the Google guy with one eye-brow would crush your larynx for creating a
competing search engine).

I have friends who say that I can’t
compare doctors to postal workers or truck drivers or bookies as
doctors are tireless altruists (pretty damn arrogant no?). I respect
the skills of doctors, but they are the kids in college who wanted good
jobs with prestige and money, and worked damn hard to attain them, but
barely a one was more altruistic than the average truck driver (ever
have a doctor drive you from Cleveland to Spokane for nothing but your
participation in a duet?) And anyway, those who want socialism want to
enslave these altruists while I want to free them, so I am not sure I
need to argue this point.

Perhaps the best example of the
destructive “public option” is our nation’s schools. Here we clearly
have a government provided “public option” competing with (and in fact
dominating in size) private schooling. But, is it fair? Does it work
well? Not by a long-shot. To send your kids to private school (i.e., a
school that competes with the government) you need to first pay your
taxes. Absent vouchers or tax credits, the bête noirs of the “socialism
in education” set, if you eschew the “public option” you have to pay
for education twice. Double payment is not only unfair, but the quality
of the product without competition is inhuman and a catastrophe to a
generation of children the Left weeps tears over, but actively works to
destroy (after all, the Left needs future customers). That the schools
provided by the government pale next to the private options, which
themselves pale next to what we would have with a full private system
(even if publicly funded) is beyond sad, but not the direct point here.
The direct point is a “public option” cannot exist without cheating –
in this case making you pay for it even if you don’t use it (I’m pretty
sure if a private company tried that it would be called stealing).

a “public option” things inevitably would go the horrific way of our
public schools. Instead of existing to please customers (patients and
students respectively) the “public option” in schools exists largely to
benefit empowered stakeholders of the system (health administrators and
unionized school employees respectively), who will shamelessly pretend
to give a darn about sick people and children. Watch the analogy play
out if we go this route in health care. It will be like looking in a
funhouse mirror and seeing a doctor where you used to see a teacher.
All else will be the same.

Finally, let’s worry a bit about the
end game. We are not here yet, but in a world where the “public option”
replaced all private options, would we still be allowed, if we had the
resources, to pursue private medical alternatives? Some socialized
countries say yes, some say no. Imagine the answer is no in this
country, where freedom is valued more than anywhere else in the world.
Imagine a person is to be prevented from spending their hard earned
money on their or their children’s health care, or a doctor was
prevented from earning what he could in a parallel free system after
all his training and work. If we get to this point, and I pray we do
not, it’s time to skip all the Constitution but the second amendment
(while we still have it), as it won’t be America anymore.

again conclude by asking why they are lying here about the “public
option”? Well, the President has said if starting from scratch he’d
prefer socialized medicine (he calls it something different, but again,
he’s not telling the truth). He also now insists that this “public
option” is not intended to lead to fully socialized medicine, and
accuses those who say it will lead there of, you guessed it, lying. Odd
no? But it takes literally seconds to realize that this “public option”
cannot co-exist with liberty and thus will indeed lead to full?on
socialization. Since the simplest answer is usually best, and the
President has already declared his preference for a “single-payer”
system, and since this “public option” leads there with near certainty,
might I be forgiven for assuming he knows this and is lying, and has a
socialized medicine end-game in mind?

Myth #5 We Can Have Health Care Without Rationing

has to occur. This sounds cold and cruel, but it is reality. A=A. If
you have a material good or service, like health care, that is ever
increasing in quality, and therefore cost, there is no way everyone on
Earth can have the best at all times (actually the quality increases
are not necessary for rationing to be needed, it just makes the example
clearer). It’s going to be rationed by some means. The alternatives
come down to the marketplace or the government. To choose between those
alternatives you judge on morality and efficacy.

Everyone on
both sides seems to hate the rationing word. People favoring free
markets point to the explicit rationing that occurs in other countries
with glee, while those favoring socialism point to the number of
uninsured who get their health care through emergency rooms and the
like (a form of rationing). Both sides are wrong to complain about
rationing per se, that’s a fact of life. But there are differences.

is an uncomfortable truth that tough choices will have to be made.
There is no system that provides for unlimited wants with limited
resources. Our choice is whether it should be rationed by free people
making their own economic calculations or by a bureaucracy run by
Congressional committee (whose members, like the Russian commissars,
will, I guarantee you, still get the best health care the gulag
hospitaligo can provide). Free people making their own choices only
consume what they value above price, using funds they have earned or
been given voluntarily. With socialized medicine health care is
rationed by committees of politicians trying to get re-elected and
increase their own power, and people consume as much of it as the
commissars deem permissible. I do not find these tough alternatives to
choose between.

By the way, nothing says that part of
this rationing cannot include large amounts of charity, privately or
even (and the libertarian in me quakes) publicly, but that still
involves rationing. Sorry, we can’t suspend the laws of physics and

So, why do they lie about rationing, other
than habit? Well, rationing isn’t pleasant news for those who don’t get
that 2+2 will always equal 4. Telling optimistic innumerates that your
plan does not include rationing wins support.

Myth #6 Health Care is A Right

it’s not. But we are at the nuclear bomb of the discussion. The one
guaranteed to get me yelled at or perhaps picketed by a mob waving
signs printed up with George Soros’s money. Those advocating socialized
medicine love to scream “health care is a right.” They are loud, they
are scary, but they are wrong about rights (as the 1980 kid in me
resists the temptation to type “TO PARTY” – you had to be there).

is more philosophy than economics, and I'm not a philosopher. But,
luckily it doesn't take a superb philosopher to understand that health
care simply is not a “right” in the sense we normally use that word.
Listing rights generally involves enumerating things you may do without
interference (the right to free speech) or may not be done to you
without your permission (illegal search and seizure, loud boy-band
music in public spaces). They are protections, not gifts of material
goods. Material goods and services must be taken from others, or
provided by their labor, so if you believe you have an absolute right
to them, and others don’t choose to provide it to you, you then have a
“right” to steal from them. But what about their far more fundamental
right not to be robbed?

In fact, although it’s not the
primitive issue, the constant improvement in health care gives another
good example of why the “right” to health care makes little sense. Did
you have a right to chemotherapy in 1600 AD? You could have protested
to Parliament all you wanted, but chemo just didn’t exist. Then, did
you have a right to it the moment some genius invented it? You did not
pay for the research. You did not make the breakthrough. Where do you
get the right? How did it come into existence for you the moment
somebody else created these things? I’m pretty sure you cannot have
rights to material goods that don’t exist, and I am pretty certain that
the moment some genius (or business, or even government) brings them
into the world your “rights” do not improve. But strangely, many

Conundrums are easy to create. If a cure for
all disease is discovered but it costs the GDP of Europe for each
treatment, do we all have a right to it? Of course not. We can say we
do, but it does not matter. We cannot have it (unless you agree with my
forecast for Europe’s GDP and wait 50 years). But the absolute “health
care is a right” position leads to a clear yes (you know those people
bussed in by ACORN and the SEIU carrying signs saying “health care is a
right”? Ask them what they think about this issue; I dare you). The
smarter crazies might argue that they only mean the right to a
reasonable level of health care. But then we have government running
and rationing health care, as Congressional committee decides what’s
“reasonable”? Health care is not a primitive right, but keep printing
those signs.

So why do people scream health care is a
“right” if it so obviously is not? If not a right it can still be
willingly provided as charity by society (I’ll again leave aside the
libertarian fight about whether we all need to be forced to provide
charity). But those screaming “health care is a right” worry that this
will not work out as well for them. It would work out if all they cared
about was good health care for all, and not power, but they do love
that power.

Those seeking free health care could
admit these are not rights but they simply want other people’s stuff,
and be honest supplicants, or open thieves. However, they believe that
guilt and the false moral high ground work better for them. Do not cede
that ground. They are beggars with the government’s guns behind them.
They are beggars you may, or may not, choose to help. I personally have
chosen to help many (those with my views are painted as
non-humanitarians but we believe our ideas will make everyone better
off). But that is your and my choice, not their right. When they ask
you to help, please consider it, and do what your conscience and
abilities suggest and allow. When they try to take it as their right,
they are thieves and enslavers, tell them “no.”

Finally, while
again we may choose to provide a minimum standard of health care to our
neediest, we should not be ashamed that better health care, like all
material goods, comes with success. Capitalism is simply what happens
when you mix freedom and economics. Capitalism says if you achieve and
build more, you can spend more and have more. You can have a bigger TV,
a bigger house, a hotter spouse, and shinier teeth for your pets (or a
hotter pet and shinier teeth for your spouse). How on Earth did the
notion that it’s “unfair” to spend the money you earned on your own
health care, probably the most important thing to you, come about?
Well, I know how it came about. It rhymes with momunnism and has been
pushed by a far left academia, far left candidates that don’t have a
clue about economics beyond cashing a lobbyist’s check, far left trade
unions pining for a workers revolution that just never came but now
they’re trying to steal on the sly (but God forbid a secret ballot),
and a far left media who just thinks they are smarter, better and
kinder people than everyone else because they enjoy making snotty
sarcastic comments about Republicans (and where is Jon Stewart going to
get his health care under the new system anyway?).

But I digress again.

of course, as in all things, the profits made on allowing people to
spend differentiated amounts of their own money on health care would
fund so much better health care for all it’s sickening (pun intended).
Think of the newly invented drugs and other advances that shortly would
be cheap enough for everyone if companies were actually fully free to
profit on them. It would be too long of an economics lesson to explain
to my beret-wearing friends of Che that profits are a good thing, and
that companies cannot charge whatever they want forever as the essence
of capitalism is not love of the corporation but love of competition.
But, while I admit it looks dark now, everyone would do well to study
up on those things as they’re going to be making a comeback soon.

to reiterate, calling something a “right” and holding up signs
screaming you have that right just does not make it so. I once picketed
NASA for a whole summer with a sign that said "Faster Than Light Travel
Is A Right" and "FTL NOW!!" (it was actually a whole back and forth
chant that went “when do we want FTL!!”, with the sing-song
response,“now!!”, etc., but it was just me and didn’t work too well).
Alas, those twisted fascist bastards ignored me and we still have not
visited the Crab Nebula.

So, Why Are These Crazy Things Believed (Or, Pretended to Be Believed)?

forgive individuals. Lots of people are scared and misinformed by their
politicians and the media or else they would understand the whitewash
that is going on here and reject socialist “solutions” to a problem
best solved for their families by freedom. In fact, eventually I think
they will (if Congress and the President don’t first intentionally jam
through a socialist bill they know cannot survive scrutiny by the
American people). Now as to why the media and politicians say what they
say, and propose what they propose, it is more complicated.

the media is often just plain stupid (not all of them, some are
geniuses, but as a group certainly), repeating tired leftist dogmas and
looking down on anyone who believes in freedom as just a red state
moron (trust me, they think that). How else do you explain free
infomercials for Obama’s socialized medicine without rebuttal? How else
do you explain the failed New York Times front page that’s less news
and more editorial parody than Steven Colbert? Why the politicians do
it is somewhat more complicated, and a bit more nefarious.

politicians may indeed just be idealistic dupes who actually want to
help people but don’t realize they will harm them, or even fools who
just want to feel important. But let’s leave Ms. Pelosi out of this for
now and talk about the smart ones. I do not think true confusion among
the political and intellectual class is most of their problem. I do not
think they believe for a second that socialized medicine will make
people better off. How could they? I think Barney Frank, and Chris Dodd
and Rahm Emanuel (and his boss), and the rest of the K-street gang are
smarter than that. I think they understand what they will lose if
freedom wins.

Lots of politicians understand that the simple
free system leaves them out in the cold. No power for them. No
committees to sit on to decide people’s lives. No lies to tell their
constituents how they (the government) brought them the health care
they so desperately need. No fat checks from lobbyists as the crony
capitalists pay dearly to make the only profits possible under this
system, those bestowed by the government. Libertarians are often
accused wrongly of loving “big business,” but we don’t, particularly
when they predictably turn themselves into crony capitalists who try to
succeed by wheedling from the government. On the other hand the
socialists love cronies of all sorts, ones who command large
enterprises all the better. Socialists are far closer than libertarians
to building and countenancing the all-powerful corporate state they
claim to fear. Odd I know!

That an array of crony capitalists
are lining up from Wal-Mart to hospitals to medical insurers (bringing
back Harry and Louise this time for socialism) hoping to cut the best
deals for themselves before the iron curtain falls is sad. That they
are being lauded by the administration as a sign its healthcare
position is right is simply propaganda. Yep, when someone agrees to pay
Al Capone protection, it's a clear sign Al Capone was right to begin

We further see this predicted abuse of power as the
health care proposals are already filled with freebies to the
President’s friends – including exempting unions from onerous features.
Gee, the same unions in whose favor he has re-written the bankruptcy
rules and wants to exempt from the most American of ideas, the secret
ballot. It’s good to be a friend of the most ethical administration

For another example how this is about government power and
the suppression of private liberty, and not helping people, look no
further than the fact that their massive tax increase on the "rich"
(which by leftist definition are never paying their "fair share" if
they have enough left over to remain rich) is on pre-deduction
income.[5] That means if you give all your money to charity you still
owe Caesar his 5+ percent on money you did not keep and do not have,
but gave away to a good cause. This might raise some revenue, but it is
largely about the destruction of private charity. Barack and Harry and
Chris and Nancy and the other gang of four (yes our gang of four is
much bigger than four) are about the people having to crawl on their
knees to government (them) instead of anyone else, including private
charity, not about helping people.

BTW, Congressman Charles
Rangel said lawmakers targeted high earners because it “causes the
least amount of pain on the least amount of people.” So does, in the
short-run, imprisoning the rich and harvesting their organs for better
health care for everyone else. Charlie, any thoughts on where you stop

Finally, if the above is not enough, the rush to pass
a huge expansion of government now, and limit debate and discussion, is
indicative of a group that knows it is wrong, and if people have time
to think they will refuse to go along, but is attempting an exercise of
naked power, to impose dictatorship before the people wake up.
Paraphrasing Mark Twain, a lie can travel halfway around the world
while the truth puts on its shoes. They are counting on this, and they
don’t want to give the truth time to be shod.

And In Conclusion

this point you might accuse me of offering only complaints about the
Administration's plans, without constructive suggestions of my own.
There is truth to that. But I make no apologies. If people believe
crazy things it’s first and foremost important to change that before
progress can be made. But also, I think we're doing okay enough without
radical changes, certainly not hastily panicked changes towards
socialism, and also because I lack the expertise to recommend the
detailed practical steps that would be productive (in contrast it
requires no expertise to see that the myths above are indeed lunacy).

do understand people are frustrated at many aspects of the current
system, and it is tempting to tear it all down and build something that
looks shiny and new and perfect in the advertisement. Many of the
complaints concern the complexity of getting insurance, treatment and
reimbursement. I blame this mostly on excessive regulation, a complex
employment-based insurance system strongly encouraged by tax law, and
litigation for the benefit of trial lawyers rather than patients or
anyone else. We do not need a single payer (socialized medicine) system
to cut confusion and inefficiency. On the contrary we need unfettered
competition and clear legal standards. Another major concern is
provision of basic healthcare to the needy. This is an important issue,
but not an expensive one in the scheme of things, and not one that
should drive the trillion-dollar healthcare debate. You do not
reorganize the entire housing industry and tax policy around the need
for homeless shelters, you just build enough shelters and let the
market take care of, and discipline, the people who can pay for their
own housing. Finally there is the concern that healthcare costs make US
workers too expensive to compete in global markets. As long as workers
get full value for their healthcare dollars, it shouldn't matter
whether companies pay in cash or in health benefits. The
competitiveness issue is an important one, but healthcare costs versus
wages versus taxes to pay for public health care is a minor detail in
it. The main thing is not how it’s divided up but total costs, and
total value received by the worker. Costs are minimized, and value
received maximized, by open competition. I recognize these are general
prescriptions rather than specific healthcare reform proposals, but you
don't have to be a weatherman to know which way the wind blows (are
non-Leftists allowed to quote Dylan?).



[1] Some say health care
advances are really an achievement of the government as the government
funds university research. Wow. What a clear case of the government
muscling in, taking over, and then pointing to their taking over of
Poland as a success. We Poles feel differently.

[2] By the way,
it’s really not only about cost. That companies try to maximize profit
is not something they or I should apologize for, it is beautiful and
fair and the reason why great things are created, but for this analysis
I’ll just focus on cost.

[3] FYI, your author is a hockey nut.

Truth be told this isn’t about just Canada but any group that
negotiates en masse for prices that cover variable not fixed costs. But
the general point is still valid. The success of some groups at this
does not mean it’s a viable system for all, in fact it’s impossible to
be a viable system for all. We cannot all be free riders.

While not the subject of this essay, let’s put another widespread myth
to bed. “The rich only give to charity for the tax deduction.” Please
note, when the rich give substantial amounts to charity they end up
with substantially less for themselves. The idea of the charitable
deduction (which some libertarians may argue with as it subsidizes
behavior the government finds “nice”) is that if you do not keep the
money you earned, but pass it on to a good cause, you do not also pay
taxes on it. That seems pretty reasonable as you did not keep it. That
many, even most, think this is somehow a giveaway to the rich is a
statement on the sorry state of understanding, and the dangerous level
of class-warfare we already have in this country.

[i] AQR Disclosure

views and opinions expressed herein are those of the author and do not
necessarily reflect the views of AQR Capital Management, LLC its
affiliates, or its employees. The information set forth herein has been
obtained or derived from sources believed by the author to be reliable.
However, the author does not make any representation or

express or implied, as to the information's accuracy or completeness,
nor does the author recommend that the attached information serve as
the basis of any investment decision and it has been provided to you
solely for informational purposes only and does not constitute an offer
or solicitation of an offer, or any advice or recommendation, to
purchase any securities or other financial instruments, and may not be
construed as such.

Cliff’s Additional Disclosure

is Cliff speaking now. AQR's legal department would like me to add that
I am criminally insane and barred by an order of rhetoric protection
from speaking on AQR's behalf. Anyone trading on my advice, or a
client, consultant, employee or Iraqi insurgent thinking he has been
wronged by my attitudes or opinions can have a $250 out-of-court

right now if you'll sign a waiver, otherwise we'll break you. Oh, and
we lied about the $250, but seriously, we will break you. Please note,
nobody can predict where markets will go in the short-run and sometimes
even the long-run. When I point out individual things in the
marketplace that I think are strange, or wrong, it doesn't mean I have
the perfect answer or can easily make money from it for my clients, for
myself, or certainly for you reading this essay! Furthermore, if you
read one guy's opinion and do anything based solely on that, you are an
idiot. Next, as the legalese above alludes to, the actual funds and
accounts AQR manages are run using models that may or may not agree
with what I'm writing herein, particularly as our models will generally
have a shorter time horizon than the things I'll be writing about.
Listen to me at your own risk! If you choose to read what I write
please only use it as one input for you to critically evaluate in your
decision process.

Finally, my style is to write very
aggressively and passionately about what I believe. So unless you are a
libertarian/objectivist, small government and free market loving,
socialist hating, value investing geek you probably won't agree with
everything or anything I say. If you find the way I say it insulting,
I'm sorry about the first few words you couldn't help reading, but if
you read a moment past that (in this disclaimer or later), it is on
you. I agree we need to censor things occasionally but only to protect
children and madmen (and of course the children of madmen). If you
believe in censoring anything else short of a nuclear secret you'd
probably look good in hobnail boots and the crooked cross. Thanks for

[ii] I don’t claim any great originality
here. Much, or even all, of what I’m saying has been said elsewhere.
But, we’re still losing, so it’s worth repeating all this again with
some new angles, a few new pieces of black humor, and perhaps a
different font. In particular, and not even close to exhaustively, I
can recommend recent pieces of Newman, Sowell, Stossell, Szasz , Will,
and many by the Cato Institute that cover a lot of the same ground I
attempt to re-take.

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Ben_the_Bald's picture

What's wrong with Sweden?


This is funny stuff. Send it to Bess Levin.

Anonymous's picture

You had me at "stealing"...(per Jerry Maguire)

Anonymous's picture

Health care is not a right. Food is not a right. Clothing is not a right. Housing is not a right. I'm sick of listening to those morons who claim it is.

You want something? Get off your ass and earn enough to pay for it.

Miles Kendig's picture

100% correct.  However, when a premium is paid but the provider refuses to pay for the covered service without first going through a multi-year review process so my family members can die waiting for the covered service what happens is a for profit bureaucrat is deciding that the bosses bonus takes precedence over providing the service as agreed.  That is a legal hustle and it has cost me three family members. No question there has to be a better way than a national government plan, but how do I or my family members get the services insured for without having to die first while some for profit asswipe bureaucrat eats another twinkie and laughts as they say, "strike one from the count"?

Hondo's picture

Are you so sure you get better service from a government (socialist) bureaucrat? 

Anonymous's picture

Read the Bible much?

I take you are just completely self-made man (woman?) who has never benefited from anything public or been helped by any person or entity?

People like you just make the world an awesome place.

Fuck off.

Marla Singer's picture

Hmmm.  Not the tenor we really want from comments.

EQ's picture

How about this tenor.  I think this is what the last poster was trying to say.  Except I will be a little more refined in his argument. 

There are nuggets of truth in Cliff's analysis but there are plenty of ideological mistruths as well.  Cliff, you work in an industry that is about as anti-competitive and socialist of anything in the history of economics.  You make millions by creating strategies that are built on a house of cards.  That are correlated to one incontrovertible fact - expanding credit.  You gamble in markets that is effectively stealing from society.  And, you work in an industry with monopoly access to credit.  This very fact allows idiots to thrive and make millions while others who would truly add value to the industriousness of the United States, are denied credit.  Simply because we have a handful of firms and their parasites, ie your firm, that get access to credit because of a socialistic distribution model of capital. 

You live in a world where your brilliance is far from a fact but you, in fact, believe it.  You are a smart person but then so am I.  And so are millions of other Americans that rot under a tyrannical capital system that has made you rich.  Socialized medicine only gets any traction because most people in America see the socialization of our capital system that you so stupidly believe is fair, democratic and allows people in this country to achieve their human potential.  You, Cliff, are part of the problem.


EQ's picture

In other words, were we to have a system that democratically distributes capital, you would likely be working for some corporation makign $80,000 a year and we wouldn't need to listen to your narcissistic rant based on an intellectual superiority that doesn't exist any place except your mind.   How's that for an analysis of your incredibily self-serving remarks?

Anonymous's picture


Gilgamesh's picture

Pretty sure the Bible takes pains to emphasize personal responsibility and charity towards your fellow man (not the government).  In fact, I think there was something about some people standing up against oppressive states?  Maybe it was just the version I was reading, lost in the translation.

VegasBD's picture

Pretty sure the bible also talks about unicorns walking around.


Isaiah 34:7 And the unicorns shall come down with them, and the bullocks with the bulls; and their land shall be soaked with blood, and their dust made fat with fatness.

barbecue's picture

I think if you take anything in Isaiah absolutely literally you're missing the point.

Anonymous's picture

There's a difference between private charity, which we should all support to the best of our abilities, and state-compelled action. Among those differences is that in the latter scenario, the dollars are allotted less efficiently and do not wind up helping those in need.

Anonymous's picture

Not used to seeing the Bible quoted with the F word in the same paragraph?

Anonymous's picture

yeah, screw working together and helping out your fellow human beings, its all about me and getting more shiny stuff

crzyhun's picture

Good stuff. Actually, Sally Pipes in her book said most of this. Still good to review.

Oh, and when the big gov't controls your health, you have no health. As it is now, the regs, bureaucracies, boards and so forth all call the tune about virtually all health care, including insurance companies.

To say the gov't will compete is an oxymoronic statement of the 1st order....NEWSPEAK.

Bob Dobbs's picture

Any relation to Richard Pipes?

aldousd's picture

This is the most reasonable, to the point and interesting critique of the ridiculousness about these days (and expose of reality) as i have seen yet. Clifford S. Asness, Ph.D., much love.

Anonymous's picture

bullshit! imo

fraud, over prescribing care, overpaid doctors, the waste of the insurance industry middle man, I could go on and on.... this guy's essay id so full of holes, and remember, he's an apologist for GS, that kills his credibility right there! I love the way he so flippantly dismisses the the Nordic countries excellent socialized health care, what a pompous asshole in my opinion, our health care system is totally out of whack in this country, threats of malpractice lawsuits, egregious mis-allocation of resources, the list is long, I agree that health care is not mentioned as a right in the constitution by the founders of this country, so f*cking what? This is a question of economics, we spend way to much of a percentage of our GDP for medical care in this county for us to have such a piss-poor result, his style of denigrating individuals and groups he disagrees with may be entertaining to some, but adds nothing but vitriol to a debate which has seen enough of that. Then at the end, he simply says, he has no answers to offer after he runs everybody and their brother's ideas into the dirt, what a dickweed! I WISH HE COULD WALK A FEW DAYS IN MY SHOES, ME.... HAVING BEEN SHUT OUT OF THE CURRENT FOR PROFIT SYSTEM FOR A DECADE AND A HALF ALL FOR A NON-LIFE THREATENING GENETICALLY BASED PRE-EXISTING CONDITION! I say, f*ck him and all his ilk!

Mr.Durbin's picture

 I agree that health care is not mentioned as a right in the constitution by the founders of this country, so f*cking what?


Yea that constitution thing was garbage when they first wrote it.  Things always go better when we ignore it.


I wish the captcha questions were harder...

Hondo's picture

Why do you want the questions to be harder.......you barely answered correctly the first time.......I'd say it was luck....sort of a black swan.

Anonymous's picture

I'm with you man, the government will fix all things wrong with health care. What is this retard thinking, just look at what a good job they are doing fixing the economy and the banks, they are making all kinds of money now and I am just waiting for my share along with my health care.

spekulatn's picture

Well done #8668.



Froggy's picture

The truth hurts, Anonymous.  We don't have a piss poor result at all.  Like he said, we are carrying the load for the rest of the world who benefits from the research and development of advanced treatments because we have companies with the ability to recoup their research costs and profit.  How many new medical discoveries are the Nordic countries making?  None.  If we go socialized, medical advancement will essentially enter a period of global suspended animation. 

Who the fuck is the government to tell my dad in his seventies that he can't have his hip replaced?  If he is willing to pay for the Medicare supplemental premiums and the co-pays then he should get his fucking hip.  My question is where in the hell is the AARP right now?  This HC plan is a broad based elderly euthanasia program if it is anything at all.  Who do you think is going to get their treatments for cancer disapproved or who doesn't have the time to wait around for a decision?  That's right, our parents.  And then it will be us.  Fuck that.  I earn my keep, and I pay for my own family's health insurance with no employer help (self employed), so I'll be damned if somebody is going to tell me that I can't look out for my own.

Anonymous's picture


Let me fix your post

"In spite of having posted a non verifiable story thats probably exaggerated, and not countering the authors arguments in any way; if I get really emotional and yell about stuff surely someone will listen!"

And that only takes a quarter of the time to read too! Talk about efficient.

Anonymous's picture

nailed it

Anonymous's picture

Thanks to Dr. Asness for this essay, and thanks to Zerohedge for reproducing it here and bringing it to our attention!

Anonymous's picture

yes, that's what they always say when they disagree with the person's post "wish the would make captcha questions harder"
as if I'm a idiot and not worthy of the discussion forum here....

thanks for your contribution to the debate, we all gained a lot from it, LMAO!

Anonymous's picture

Corollaries to Gresham's law: bad health care drives out good; bad government drives out good; bad breath drives out good.

Rusty_Shackleford's picture

So refreshing to read something written by someone who knows his ass from a hole in the ground.


This author nailed it.  Plain and simple.

Anonymous's picture

There is nothing philosophically wrong about "stealing" from the rich, lucky and opportunistic and redistributing such wealth such that lives are saved.

Freedom, when it directly and categorically culminates in the hoarding of material goods, creating and watching television shows such as "Paris Hilton's BFF", is nothing more than a systematic extermination of the less endowed or less capable.

Just like every worker must be guaranteed a minimum wage (to prevent outright slavery), every human being must be guaranteed a bare minimum of health care so long as society engages in such obtuse wastes of capital.

The reason why the supreme court is able to overturn legislation is because the actions of the Majority can, simply put, be Wrong (i.e. pre-WWII Germany). Like anything in life, what constitutes "wrong" is a highly subjective and contentious matter. But when you have near-fraudulent and devious and opportunistic drug lobbies and health insurance companies, absurd television shows and intense and increasing concentrations of wealth in individuals and parties that increasingly do not engage in the type of altruism the author is describing, when do we say 'enough is enough.'

I dare anyone to read The Grapes of Wrath by Steinbeck and argue that such a wealthy society should allow such a poor standard of "living" for anyone, never mind the unlucky farmers and children portrayed in that novel.

Because if there was 0 "socialized" health care support for the weakest among us, it is practically a certainty that, at variant points of time, the majority will tighten its altruism in favour of producing the next Bachelorette television series or some other worthy endeavor of the sort.

Anonymous's picture

now here is somebody who nailed it perfectly! thank you!

EQ's picture

Especially when the rich, lucky and opportunistic stole it in the first place.  That is exactly what happened over the last thirty years as we saw CEO pay balloon from 25x average earnings to 525x.  And when Wall Street started paying itself massive bonuses for crippling the economy.  It's all a ruse.  A lie.  There are no free markets.  The rich bribed government to take them away.  Now all we see is fascism and cronyism where who you know is the most important qualification for success. 

aldousd's picture

Lucky and opportunistic? What's wrong with being opportunistic for one, and as for lucky, what do you mean by that? If you mean 'lucky by birth' as in being born into an advantageous scenario that somehow enables one to more easily profit -- that isn't something you can choose. (First of all, it happens a lot less often than people think.)  If you have to pay a penalty for being born into a certain position in life... what's the difference between that and say... being born black in the old south?  One man's failure or even lack of success does not grant him the right to a chunk of someone else's success. Sorry.  There isn't enough for everyone to have 'everything they want.'  But there is enough for everyone to try and get it.

Anonymous's picture

Lucky and opportunistic? What's wrong with being opportunistic for one, and as for lucky, what do you mean by that? If you mean 'lucky by birth' as in being born into an advantageous scenario that somehow enables one to more easily profit -- that isn't something you can choose. (First of all, it happens a lot less often than people think.) If you have to pay a penalty for being born into a certain position in life... what's the difference between that and say... being born black in the old south? One man's failure or even lack of success does not grant him the right to a chunk of someone else's success. Sorry. There isn't enough for everyone to have 'everything they want.'

But there is enough to produce and consume 'Paris Hilton's BFF' or 'America's Next Top Model.'


Fixed it for you.

EQ's picture

Aldous's remark is so laced with stupidity it doesn't even deserve a response.  But, it's nice to see someone did.  It's obvious he is a prisoner of ideology and has never consumed the brain cycles necessary to question how capital is distributed or whether it is democratically allocated to give everyone in our society an opportunity to become what they are capable of becoming.  ie, Embracing the ideals of our Constitution and Declaration from tyranny - much of which was the criminal English banking system and corporatacracy that existed at the time.  The same one that exists in America today. 

So, society's capital is efficiently allocated when Paris Hilton gets a television show while the exampele used as being born black in the old south has what access to capital?  Or when a child with an IQ of 180 or a natural talent for music but born into poverty is marginalized?  And society is better for this?  Wealthier?  No, instead we give it to people like Cliff who haven't a clue that they really aren't as smart as they think they are.  So, then they can pontificate from high on the hill of ignorance.   

A system where profit is the primary motive.  When did profit cross through the lips of our Constitution?   In fact, a profit-driven capital allocation model will always concentrate capital until the system collapses below it.  As crooks and cronies decide who gets access to capital based on their economic standing and not ability, (because most crooks and cronies are fucking idiots) we see less and less people able to qualify for capital.  

aldousd's picture

Oh right, yes, I can't have an ideaology. I forgot. i need ot build a consensus.  It's only correct if more than 5 of 10 people agree with me.  I don't see how disagreeing with you implies stupidity, unless of course you mean that least five of ten agree with you, and that makes me stupid. By that definition, you're right.

Anonymous's picture

I'll be thinking about the point Cliff made regarding socialist countries piggy-backing off our capitalist system. That was interesting. However not as interesting as lumping Colbert and Stewart into the "liberal media". Last I checked, Cliff, they were comedians on Comedy Central

Anonymous's picture

You've got to be kidding. Of course Colbert and Stewart -- especially Stewart -- are very deliberate players in the liberal media hegemony. Absolutely no question. Stewart has the most transparent agenda imaginable. Among the reasons he's funny is that he's mocking the media's schtick while doing the exact same thing. But he's still selling a message.

Anonymous's picture

I think you really hit the nail on the head with the crux of his argument about socialist countries piggy-backing. He offers no solutions and no long-term outlook on the issue. If you play it out logically in the long term, the other countries will continue to get ahead at our expense in our current capitalist system until we can no longer sustain them and ourselves and we end up folding under the weight of it all. I also agree with your point about Colbert and Stewart, they are obviously leftist, but is it their fault that the viewers give them more credibility (liberal media) that they deserve? We do that all the time with bankers, captains of industry, pundits, and elected officials (give them MUCH more credit than they deserve).

Anonymous's picture

Amusing how so many, in one breath, can chastise Goldman Sachs and their methods, and also pretend that the health care system is not operated in the same fashion.

So you want free markets as long as "you" are not the one getting screwed... "Because regulation is nothing more than Guvment intrusions into market efficiencies?"

Well ladies... You can't have it both ways. Goldman Sachs has only proven its efficiency, by succeeding in obtaining complete "Regulator Capture"...
Which is the ultimate result of an extremely efficient player in a free market.

If you find that slightly repulsive (which I do), but yet you simultaneously think that the current free market health care system is just dandy (because you haven't yet needed "experimental treatments" as defined by Kaiser) then someone's been smoking a little too much of their own high frequency quant logic.

Winston Wolf

aldousd's picture

Goldman is not an example of a free market system working. They are a government supported monopoly. Actually it can be argued that they are a government supporting monopoly.  That means that  you haven't thought this through well enough.

Ben_the_Bald's picture

Actually you haven't thought this through. Goldman (or any corporation) is granted personhood status so it has the same constitutional rights as you to free speech and libertarians should support that right. The difference is that it has more money than you. And money talks.


Finally, there's nowhere in this world where a "free market" exists. It's just a fantasy fed by ideologues.

aldousd's picture

No, I still mean it, people cannot deride the lack of regulation using the straw man of Goldman Sachs as an example.  It's actually not capitalist, it's a ridiculous government entwined entity that both buys the law makers, and does the bidding of lawmakers, keeping vast sums of money for itself as a result of its political favor.  Were it actually making money without the 'protection' payments and the plants all over washington, then yes, it would be good for a gigantic company to make a ton of money. But they use more than their marketability to gain. Which in my estimation, is a bad thing. What it definitely is not -- it's not a quintessential example of 'why capitalism is evil.'  Thats an insult to the concept.  And I know there isn't a "Free Market" on the planet, what's your point?  If people would quit saying "See how bad free markets are? Look where they got us!" I wouldn't have to keep pointing out that what we have isn't an example of "free markets gone awry" and you seem to agree with me, though just not in so many words.

Anonymous's picture

"this is an insult to capitalism, that is an insult to capalism". Rhetoric, ironically, as you point out, it's not well thought out. Nothing more than the complaints of those vanquished at the hands of "strongest market players".

As the person above points out, corporations have been granted person hood. And this wonderfully under regulated market place allows special interests to lobby guvment.
Ultimately, that will lead to regulator capture.
Ultimately free and unregulated markets lead to monopolies.
And BTW, lack or failed regulation and the rise of monopolies certainly seems to reflect the lack of market restriction. (But maybe in your utopia "free market" is defined by some other high frequency model).

But semantics aside, Back to my original point...
Amazing how people only decry corruption and failed regulation when it's the competition that's made the 3.44 billion in the last FQ.

Unregulated free markets allowed the Creation of the GS monopoly. Lobbying is lobbying is lobbying.

It must be difficult defending a process, while simultaneously despising the natural result.

aldousd's picture

GS would not exist without government protection. So I disagree with you, and I appeal to  reality as the court of final appeal here.  They were on their way to oblivion. TARP and AIG later, other 'plants' in government notwithstanding or even required to make my point, they would have been toast.

dnarby's picture

He misses a huge point, which is the corruption of the FDA & congress by big business to prevent low-cost, non-propriatary treatments, and the AMA lobby (currently trying to keep low cost clinics out of Wal-Mart and Wallgreens).


Yes, ladies and gents, big pharma has the same deal with the gov't that Wall St. has...