I blog about free markets in medical care and transparent pricing.
A recent article in the NY Times declares HIT (health information technology) as a growth industry with the potential to create over 200,000 jobs. 20 billion dollars in subsidies have been provided by the federal government (taxpayers) toward the effort to digitize all patient information.
I can’t think of a better example of Bastiat’s “What is Seen and What is Not Seen.” We will, of course, never know what would have become of the use of the 20 billion stolen from the taxpayers to blow up this silly and dangerous bubble. This declaration is equivalent to an excited homebuilder,surveying the homes devastated by a tornado, bragging on the number of construction jobs created by mother nature. Looking at this from the perspective of the homeowner, vast resources will be spent to, at best, return to their original condition. The brilliance of Bastiat resulted in this question: what would the homeowner have done with those same resources to improve their condition (rather than to just return to their prior condition) had this disaster never occurred? Any disaster is always a net loss, otherwise it would make economic sense to set fire to communities regularly to rebuild them.
Any activity of government is funded by the confiscation of the property of individuals, the alternate use of which will never be known. Bribery and cronyism, unavoidable influences in politics, advance this diversion of property from the disenfranchised to the privileged. The lobbyists for the HIT industry were very effective in this regard. They placed sufficient money on the table to mandate the purchase of their product. One of their lead lobbyists was Newt Gingrich, a master of this game. He and his masters have made off with billions and at this point probably don’t care what happens to the Unaffordable Care Act in the courts.
Bastiat defined government as “…the great fiction through which everybody endeavors to live at the expense of everyone else…” This HIT industry wouldn’t exist were it not for the bribery and subsequent intervention and interference of the federal government officials. This is how bubbles form. Anytime government diverts resources from where they would otherwise naturally go, mal-investment occurs. Economic corrections eventually occur to clean this up, accompanied by intense job loss and human suffering that was completely avoidable.
Celebrating the jobs created by the new HIT industry discounts the pain and dislocation that many will endure when the correction occurs. But then, as short term thinking dominates the political landscape, many of the politicians fat from their HIT bribes, will be long gone when all of these businesses fail, many lose their jobs and city planners along with their “economic development” bureaucrats move on to their next fancy. Otherwise, the success of this game depends on the short memories of those whose hard-earned wages were confiscated to line the pockets of the elite.
G. Keith Smith, M.D.