Chumponomics Revisited

There’s a county in Tennessee called Obion that doesn’t have its own fire department.  Those who live in this rural area are offered fire protection services from the nearby town of South Fulton, for a modest fee of $75 per year.  This is a fee, not a tax, so Obion residents can refuse to pay it, foregoing fire protection services.  On at least two occasions over the past two years, the homes of those who decided not to pay the fee have caught fire… and the South Fulton firefighters watched their homes burn to the ground, acting only to prevent the fire from spreading to nearby homes which had paid their $75 fee.

The admittedly bizarre spectacle of firefighters standing by as a house burns down brings strong reactions from those who wonder why a large fee could not be charged at the time of service in such an extreme circumstance.  Couldn’t the South Fulton firemen douse the flames, save the house, and work out some kind of payment arrangement with the grateful homeowner later?  The problem is that such a point-of-service fee would have to be rather hefty, or else a lot more Obion residents would decide to take their chances instead of coughing up $75 per year for a service they hope they’ll never have to use… and if the fee was very high, the people who are willing to gamble their property and safety to save $75 a year would be unlikely to pay it.  Maybe a lien could be placed on rescued homes in that case, but the South Fulton fire department can’t manage a budget when a large chunk of its revenue takes the form of liens and contingency payments rendered after they put out a fire.

This headline-grabbing business of firemen watching houses burn illustrates the principle of chumponomics, in which those who play by the rules are penalized, and extreme measures are taken to accommodate those who do not.  Much of our politicized economy has become a large-scale exercise in forcing a dwindling number of chumps to pay for everyone else’s benefits. 

Visceral emotional responses are part of the sales mechanism for chumponomics.  The concept of rational self-interest is demonized as “greed,” while the urgent need to eliminate deprivation trumps reasoned argument.  As with the burning houses of Obion County, moral judgment is passed against those who followed the rules.  Holding the people who refused to pay their measly $75 fire-fighting fee responsible for their own decisions is unthinkable.  Criticizing them for gambling with their homes, and the lives of their families, to save a few bucks, while everyone around them pays up, is supposed to be repulsive.  At some point, the economical and efficient idea of paying a nearby town for firefighting services to cover a large, sparsely-populated area will probably be declared unworkable, and some sort of compulsory tax will be imposed.  It’ll cost everyone more than $75 a year, but complaints from those who played by the rules and voluntarily paid for affordable fire protection will not be tolerated.

One of the paramount examples of chumponomics is health care, which has long wrestled with the “free rider” problem.  Society is not about to allow people to drop dead because they didn’t purchase health insurance, or can’t afford fee-for-service care.  The people who pay for health care therefore end up subsidizing those who do not, because forcing anyone to do without such vital life-saving services is unthinkable.

ObamaCare famously solves this problem with the “individual mandate,” in which everyone is compelled to purchase health insurance.  Of course, extravagant provisions are made for those who can’t afford insurance, so it winds up being just another method of cost shifting.  It won’t work – it’s already failing on a spectacular scale – so the next step will be single-payer socialized medicine, in which vital health services are dispensed directly by the government, which will use compulsory taxation to obtain the necessary funding.  That doesn’t work either, but once it’s been put in place, the political will necessary to dismantle the system will become virtually impossible to muster.

ObamaCare was sold to the public as imperative because an ever-changing percentage of the population was said to be uninsured, and it was necessary to screw up everyone’s health care in order to take care of this small minority.  The reasons why they were uninsured were dismissed as unimportant, even though a very small subset of the uninsured population is truly “uninsurable.”  One reason the precise number of uninsured changed so frequently during the ObamaCare debate is that a hefty portion of them were illegal aliens, and the President was periodically nervous about including them in the total.  That’s pure chumponomics in action.

Writing in the Wall Street Journal on Monday, John C. Goodman of the National Center for Policy Analysis suggested a superior approach to the individual mandate would be a system of tax credits for individuals who purchase health insurance, individually or through employers, while the unclaimed tax credits for those who don’t purchase insurance would fund a “charity pool to be used in case uninsured patients cannot pay all of their medical bills.”

That’s much better than the ObamaCare disaster, and it could be part of a shift away from the confusing mess of cost-shifting and weird regulations that made pre-ObamaCare health insurance so unsatisfying to the public.  Still, we get pushed around by far too many tax subsidies and penalties.  Much of this comes from the refusal to clearly identify charity and welfare as such.  Instead, everyone gets clobbered with huge life-changing “reforms” whose very size obscures the expansion of the welfare state. 

This also helps statist politicians implement huge programs that aren’t limited to the truly indigent.  When the nation is prosperous, the middle class grows, and the poor become too small in number to provide decisive political muscle to the statist.  Instead of a simple assessment of the truly needy, and the minimum assistance they require to survive, we get lost in huge, nebulous “transformations.”

Freedom, responsibility, and consequence come as a set.  The drive to eliminate consequence from the equation inevitably compromises responsibility, and then freedom.  It also melts away the incentives to excellence… hastening the day when the system runs out of chumps to keep it running.  Any system which relies upon people to ignore both reasoned self-interest and counter-productive incentives is doomed to fail.