Friday, February 24, 2012

A Computer Revolution was Born

Grassroots Capitalism:

The counter-culture of the 1960's originally "scorned computers as the embodiment of centralized control," [Pg. 58, Steve Jobs by Walter Isaacson]. But eventually, a small contingent of these hippies came to embrace the computer as a possible tool for liberation. Steve Jobs was among them.

The establishment and the giant corporations were resistant to new ways of thinking. Whereas the younger generation had the propensity to imagine a world not yet in existence. Whether it was Bill Hewlett & Dave Packard in 1939 or Steve Jobs and Stephen Wozniak in 1976, they were able to make this new world a reality by starting their enterprises within a garage.

During the early days of Apple Computer, Steve Jobs and Stephen Wozniak struggled, financially. To raise money, they didn't ask for government handouts. Instead, Jobs sold his Volkswagen bus for $1500 and Wozniak sold his HP 65 calculator for $500 [Pg. 62, Steve Jobs by Walter Isaacson].

Eventually, Apple Computer became a Fortune 500 company. It was through hard work, perseverance, and vision that made it possible.

This type of capitalism rewards innovation. It also gives people freedom, choice and affordability.


Top-down Corporatism:

Now imagine a different scenario. Let's suppose:

  • We had a President Mussolini in the White House in 1976. 
  • IBM were a government-protected monopoly. 
  • There were certificate of need regulations to prevent competition within the high-tech industry. 
  • Government doled out huge subsidies to these corporate behemoths. 
  • It was illegal for the layperson to tinker in computer technology.

Under the above scenario, Steve Jobs and Stephen Wozniak would have been arrested for practicing without a license computer hardware & software activities. Plus working in a garage would have been a zoning violation. Furthermore, they had obtained computer components without a prescription.

Next, President Mussolini signs into law that every American citizen is mandated to buy ComputerCare insurance. His rationale is that without insurance, only the rich can afford computers. Everyone must have universal access.

This type of corporatist model stifles innovation. It's also a recipe for inflation and rationing.


Now let's review. Steve Jobs and Stephen Wozniak had introduced the personal computer. This was something new. Their business had started in a garage. Initially, only computer geeks had any interest in the product. The established corporations were skeptical. But eventually, it became popular with the general public. The computer revolution was thus born.


Whole Earth Catalog redux:

Stay Hungry. Stay Foolish. No insurance.

Our next wave of liberation shall be personal ownership of #HealthCare. The new "garage" shall be from the home of Kevin Delaney.

Please follow him at Twitter:!/yintercept


Thursday, February 9, 2012

EducationCare ~ A Hypothetical History

Once upon a time, there was a President named Franklin Roosevelt. He imposed wage and price controls upon industry during the inflationary years of World War II. But companies needed workers. They couldn't attract anybody with the capped wages, so they put into effect a gimmick -- Free EducationCare.

Subsequently, the Federal Government began to exempt education benefits from taxation. Thus, people became dependent upon their employer for the education of their children. If they lost their job, they then lost their insurance, and their kids couldn't go to school. It was too expensive.

The premiums for Education Insurance were based on pre-existing conditions. If the person had children, this then meant insurance rates of $500 per month. If the person was childless, then the premiums were only $100 per month. The insurance policies were very generous -- unlimited free education for children AND adults.

In the 1960's, President Lyndon Johnson signed into law SpryCare and SorryCare. The former was single-payer, government insurance for spry seniors wanting college education. The latter was a state-federal partnership of providing EducationCare for the sorry folks that are poor.

As a result of these government programs, education costs skyrocketed. People (without good jobs) who didn't qualify for SpryCare or SorryCare were out of luck. Their children couldn't go to school.

Then during the new century, thanks to Mitt Romney and Barack Obama, the government decided to impose an individual mandate to FORCE all Americans to buy EXPENSIVE "education insurance." Liberals screamed, because they wanted single-payer EducationCare. The Tea Party screamed, because they hated the insurance mandate.

As a result of the groundbreaking "reform" legislation, the insurance companies were no longer allowed to discriminate people by their pre-existing conditions.  Therefore, single people now had to pay just as high premiums as families with children. But an allowance was made for age. Since younger people are more likely to go to school, their premiums are allowed to be three times higher than people in their 50's.


The above scenario exemplifies DEMAND-side, insurance-mandated EducationCare. It is a failed model and does not work. (Just look at HealthCare.)