The lessons of the economic meltdown.... And Obamacare.

As I have watched the argumentation and the endless back and forth argument over the relative "value" of conflicting "values". Like is "increased coverage" worth "giving up choices"? These arguments have no intrinsic logic in and of themselves... Because one isn't necessarily a function of the other.

Instead, what we need to do is simply analyze the notion of who gets to make what decisions. One of the Cold War era reasons for some of the brilliant minds to leave the former Soviet Union was a "lack of choice". It was a lack of choice about how to engage your talents, to advocate your passions, to seek to change your world to your vision.

So, what is this myterious power of choice? And why is it so valuable? Well, think about this... What if your choice of careers wasn't limited to "what I can find to do that interests me and suits my capabilities" but was "dictated by the results of a test you were forced to take"?

I had a very good high school teacher... Who taught the very subjects he was supposed to be the absolute least skilled at teaching. Why? Because he found that he had to teach himself, and in doing so, he taught himself how to teach others. He was truly, a very good and effective teacher. One of my best.

So, why did the USSR have such a terrible lack of competent scientists, inventors, producers, farmers.....??? Because a large, politically driven beaurocracy is horrendously incompetent at self policing, at allocating resources, at making decisions.

The USSR, in spite of allocating massive resources at optimizing everyting they could think of, devoting almost nothing to consumer consumption, and everything else to supporting the goals of the party and government... could not accomplish even mere survival.

While Soviet agriculture was horrendous... American agriculture has become world leading. Why? Something I'd call "distributed decisionmaking". The whole of American Agriculture is a testbed of trial and error, ever advancing. Motivated by the need to survive, prosper, grow, improve... On the average, our farmers do amazingly well - because of distributed decisionmaking.

Why and how did we have such a massive credit bubble? Because too few made too many decisions. There are a LOT of small and local banks. And almost none of them are in trouble. Why? Because accountability in the form of attention from those who would suffer the results of bad decisions. And for those smaller banks who made bad loan decisions... The total number of "bad" was so small as to not impact the country. But look what Countrywide...Fannie and Freddie, and a handful of others could do. Fannie and Freddie sponsored together some 50% of ALL home loans in the last few years.

The decisions in the hands of an imprudent few, hurt us all.

So, why does American health care works so well? Because we have highly distributed decisions. Not as distributed as they could be, but more distributed than say... Canada.

This concept alone should hold sway. Why should decisions be concentrated into the hands of the government? For that matter, why do we concentrate it in the hands of insurance? At least we still have a wide array of insurance, and much of the insurance still shares decisionmaking with the covered. Does anyone recall the anger at HMO's and the inability of individuals to prevail over the decisionmakers in the HMO?

Health care reform should involve even FURTHER distributed decisionmaking. It should, as far as possible, turn those decisions over to the widest number of people - the consumers themselves. Yes, some will make less than optimal decisions, but on average, they will do amazingly better than giving that power to a few.

The Democrats' entire premise is to assume the power of all decisions, and then graciously grant a few to the consumer, reserving the big and important ones for government agencies.

This is the same prescription for disaster that we followed with home loans.

So, why isn't anyone listening?