Discrimination – Still Crazy After All These Years

Will Congress exempt itself from Obamacare?  Shouldn’t we be outraged at the thought of them giving themselves preferential treatment?  Sure we should, and we would all probably be more outraged if discrimination weren’t woven into the very fabric of our society.

We (the authors of this blog) have this old fashioned belief that if the government has a right to discriminate against your peers, it has a right to discriminate against you.  So if your fellow citizen has lost a right or a fundamental protection, so have you.  If one company or industry is discriminated against, then it might be your company or industry next.  In the U.S., discrimination has been happening for so long that we often fail to recognize it as such.  We think that with the civil rights movement we righted a great wrong, and that is true, but the plague of discrimination is still as rampant as ever.

You, dear reader, look like a decent person.  Let me ask you a few questions about fairness:

  1. Do you think it’s okay to give favors to the medical profession and deny that same preferential treatment to the legal profession?  Is it fair to give a company a tax break for a certain activity, but deny individuals the same treatment for the same exact activity? 
  2. Is it okay for the highly productive to have a strong right to their labor, but to take that right away from the lowly productive?
  3. Should a health insurance company be protected as equally as a car insurance company?
  4. Do you think it’s okay for the government to target an industry, and tax them at a higher rate than anyone else just because they can?

I would hope that we would agree on all of these items i.e. that all parties should all be treated equally.  This isn’t just idealistic blather, it’s also very pragmatic.  Each one of us controls a great deal of value: our own labor, our assets, our prerogative to travel, live, study and work according to our own preferences.  We all naturally want to protect that value, and our control is more strongly protected when it is equally protected.  We should all be opposed to discrimination for both ethical and pragmatic reasons.   Here’s the list of offenses that mirrors the questions listed above:

  1. Under current law, if your employer pays your personal medical bills they can write that expense off (i.e. deduct it as a cost and not have to pay taxes on the money spent).  But if an employer pays for your personal legal expenses then the costs are not tax deductible.  Are doctors more holy than lawyers and all other professionals?  Likewise, if you spend money on your own health care, the money you spent is not tax deductible for you like it is for your employer.  Are employers more holy than individuals?
  2. The Federal Government and most State Governments currently discriminate against people with low productivity, and yes, you should be outraged about this shameful treatment of the poor and underprivileged.  How so?  Let’s say you have very high productivity.  You can program apps very quickly and you contract yourself out at $200 per hour.  If you like a job, can you choose to take less, like $150?  Certainly.  If you are desperate for work, can you lower your price to $100?  Of course.  But now imagine that you have very few skills.  Let’s say your productivity is worth $10 an hours, but you’re having a hard time finding a job.  You need work desperately, can you lower your price to $5 an hour?  No.  Because of the minimum wage, you don’t have a right to sign a labor contract at $5 an hour.  Sorry, you are not equally protected.  For those people that think the minimum wage helps the poor, you need to explain how taking something of value (i.e. the right to choose how much you will charge for your labor) away from the poor helps them?  If you want to help the poor, you should transfer value to them not away from them.  See the earned income tax credit as an example of a much better way.
  3. Under the Affordable Care Act (aka Obamacare), health insurance companies do not have the same right to decide what to do with their money as auto insurance companies.  If you’re an auto insurance company (think about a Gecko here), and you want to spend millions on advertising, that is your good right.  But if you’re a health insurance company, you are mandated by law to spend a 80% to 85% of your revenue on reimbursements.  You can kiss your ad campaign goodbye, and come to grips with the fact that you cannot pay the same in sales commissions as other insurance companies.  How fair is that?
  4. One mode of paying for the ACA, was to levy a special tax on the Medical Device Industry.  I worked with a medical device entrepreneur by the name Ray Hartman, who started a company called Theralight.  He was one of the most brilliant and energetic entrepreneurs I’ve ever met and he dedicated his fortune and last remaining years on Earth trying to eradicate staph infections in hospitals.  I once joked about how nice it was of him to pick up the tab for health care reform.  He became uncharacteristically dark and said, “It makes me want to go outside and just scream!”  Sorry Ray, you were unprotected.  That sucked.  He passed away a year later.

I have a dream, Ray.  That someday the phrase “liberty and justice for all” will be more than empty words describing a bygone Republic.