Charles Schumer, senator from New York, opining this morning on NBC’s Meet the Press, said this:

Right now as we speak, there’s some salesman talking to a doctor and saying, ‘Hey, if you buy this machine for a million dollars, my company will finance it, we’ll then show you how to fill it up 100% of the time with patients, and you’ll make $200,000 more a year.’  And even though there’s another machine a couple of miles away and the machine’s not needed.  Right now, there’s no check on that kind of waste.  Our bill does it.  Doctors who go overboard and provide tons of quantity and no quality will be disciplined here.

Let’s dissect this statement in light of rudimentary economic principles.  Schumer paints a picture of a dim-witted but greedy doctor being manipulated by the maker of a medical machine.  Suppose this doctor decides to go ahead and finance the million dollar machine and offer the service to the public.  Only two outcomes are possible:

  1. Sufficient demand exists for the service and the doctor is able to keep the machine busy and make his finance payments.  In this case, the doctor has made a good decision.
  2. Insufficient demand exists for the service, the doctor cannot make his payments, and the machine is either repossessed or the doctor goes belly-up.  In this case, the doctor has made a bad decision.

In either case, it is the market which decides whether or not the service is warranted.  If outcome #1 occurs, we know the service was needed.  The additional supply of that service (in conjunction with the machine down the street) will tend to drive costs down, not up.  The fact that that doctor makes additional money is not just a good thing but an indispensable thing – that’s how the market says “right decision.”  If outcome #2 occurs, we know that there was insufficient need for that service, and the market will remove the service from the supply chain.  The fact that the doctor loses money is also a good and indispensable thing – that’s how the market says “stupid decision, don’t do that again.”  In either case, the most efficient outcome is automatically determined by the market, without consulting Chuck Schumer.

This type of market decision is not theoretical; it happens millions of times every year in a free economy, in the medical industry and every other industry.  Resources are allocated most efficiently this way.  If Schumer had his way, he would, by the force of the state, prevent the doctor from purchasing the new machine.  How in the name of Pete does Chuck Schumer, senator from New York, know that this particular machine in Ottumwa, Iowa or wherever, wasn’t needed?  Is he omniscient?  If the additional machine was in fact needed, the Schumer solution would result in a shortage of the service and drive costs up, not down.  It would stifle innovation and remove the incentive to provide the service at a lower cost because competition would be prohibited by the government as “wasteful.”  Competition is never wasteful.  It always results in lower costs, better service, and a more efficient allocation of resources than government planners could ever hope to achieve. It’s government planning that leads to 6-month waits for cat scans and women giving birth on the mop-room floor.

And the degree of government planning that Schumer is advocating is astonishing.  I run an engineering firm, and the firm owns a full-color Size D plotter.  It’s an expensive piece of equipment.  Guess what?  Another engineering firm – less than one mile away – also owns a full-color plotter!   Is Chuck Schumer going to declare my plotter to be wasteful, and send his thugs over to take it away?  We use our plotter almost every day to provide services to our clients.  I’d rather he declare my competitor’s plotter to be wasteful.  There are two newspapers in Chicago.  Is that really necessary?  What city really needs two newspapers?  Think of the waste:  twice as many computers, printers, typesetters, printing presses, and newsboys than are really needed.  Chuck Schumer should crack down on this waste.  He should declare that Chicago only needs one newspaper and shut one down so that we can all reap the benefits of the cost savings.

So who is safe?  Who doesn’t get their plotter confiscated or their newspaper shut down?  Well, whoever ingratiates themselves to Chuck Schumer and his merry band of statists, of course.

Finally, there is the disturbing use of the word “discipline.”  Think long and hard about that:  the government, by force, is going to “discipline” a private citizen because he is about to make an economic decision with which it disagrees.  A doctor is about to freely purchase an item that Chuck Schumer thinks he oughtn’t, and the state will forcibly see that he doesn’t.  This kind of thinking is indistinguishable from that which held sway in 1930s Germany and the former Soviet Union, and in fact is precisely the view advocated by the antecedent of those two monstrous regimes, Karl Marx.  It has no place in the United States of America.  We were founded on principles unalterably opposed to those advocated by Chuck Schumer.  Mr. Schumer should take his views elsewhere, where they are more in line with the culture of the nation.  North Korea would be an excellent fit.

Advertisements