Ramona and I just returned from my successful reconstructive surgery in Baltimore. We came back through Minneapolis, me in a leg cast rolling through the airport in a wheelchair. I’ve known this procedure was coming for six years. With Obama’s election, I’ve anticipated increased difficulty in acquiring excellent medical care. Hence, I’ve been more sensitive to health care policies and proposals for its reform.

I’ve found two groups of people who understand America’s problems with the delivery of health care. Naturally, the first include physician friends.

These doctors live amongst our bureaucratic wreckage and have become sensitive to specific institutional pathologies. Examples include distortions in demands for service caused by third party payments (free scooters for all) and a generalized failure to link the consequences of unhealthy behavior with responsibilities for resultant costs (no exercise, no problem, others must pay).

The second group is health care economists who understand that decisions depend primarily on two sets of things, information and incentives. (Amazingly, not all economists understand this. They are unable to separate hopes from expectations; “This time it’s different. Our progressive guys and gals are finally in power.” Such folks missed the elemental lessons of Hayek and Sowell while luxuriating in recreational mathematics and other distractions from reality.)

In addition to university economists, there are several highly respected think tanks with research in health care policy. These include AEI, the Heartland Institutue, and the Heritage Foundation.

If you are interested in health care reform, I suggest checking out my friend Arnold Kling, a MIT Ph.D. economist who blogs at Econtalk.org. His recent book on health care is “A Crisis of Abundance.” He notes that what most Americans call “insurance” is really “insulation.” Rather than insuring themselves against risk, most families’ health plans insulate them from paying for most health care bills. Actual insurance provides protection against rare, severe risk, medical analogues to fires and floods.

Real insurance has these characteristics: low premiums, infrequent claims, and large claims. Arnold says, “American health insurance—including employer-provided insurance and Medicare—is the opposite.”

I receive “Health Alert” from NCPA. John Goodman, a Columbia Ph.D., produces this commentary each workday and I strongly recommend it. The “Health Alert” of May 19 discussed the “rescissions” of health care insurance. This extremely rare event occurs when an insurer cancels a policy and returns the premium, voiding the policy.

Goodman reports that rescissions “apply only to the individual market (less than 10 percent of private health insurance) and even then they occur less than 4/10ths of 1 percent of the time.” Yet, the Obama administration demagogues and lies about the issue.

Many of the responses to this “Health Alert” were a version of: “How can politicians lie and demagogue so boldly?” The answer is easy, politicians are scavengers in a competitive environment; rewards there are rarely determined by violence but rather by connivance.

Man has been plagued by scarcity ever since our exit from the Garden—and scarcity implies competition. Competition was violent for the majority of our existence. Primitive societies tended to be dangerous places in which to live as people beat, stoned, stabbed, and otherwise inflicted major tissue damage while teetering on the margins of subsistence. Buffers were tiny. It wasn’t until the mid 1800s that European cities could even replace their populations by natural increase. Further, fighting had, and still has, both an expressive and instrumental value.

Western societies gradually built institutions to constrain violence. The most prominent are called governments. Governments protect subjects from roving bandits. That’s how they justify taxes. Then the problem is how to control stationary bandits, a.k.a politicians. This was the primary task of America’s Founding Fathers as they drafted the Constitution. The Federalist Papers laid out their arguments.

The Founders created a system that rewarded productivity, the creation of value, more highly than transfers of wealth via politics. Alas, their system could be, and indeed was, subverted by crafty, often unprincipled individuals who justified their actions in “the public interest.” Now, with an ever-higher proportion of allocative decisions made via politics, the potential rewards for being a politician grow ever higher.

And it’s not just money; boys, girls, deference, the list seems limitless. The constraint is what ever they think they can get away with. And this continually expands. Consider Democratic presidential candidate John Edwards or today’s featured Republican hypocrite.

While the market process selects for efficiency and constructive innovation, the political process selects for those who can best organize constituencies. And here’s a key point: fundamentally corrupt systems such as Chicago, and Illinois more generally, do actually exist. There the tenure track of governors ends in prison. Putting aside Illinois and other places where corruption is the norm, America retains a cultural bias against political predation by sedentary bandits.

While we maintain reservations about political predation, skilled liars easily swamp them with paid and volunteer spinners in the media.

The rational ignorance of voters, the fact that public decisions are public goods, and the remaining suite of public choice economics all favor deception. This is why lies dominate political posturing.

Back to the Minneapolis Airport. It’s difficult to be unobtrusive when traveling from one concourse to another via a wheelchair with a cast leg protruding in front. I was not surprised when in the Crown Room several people asked if we were returning from treatment at the Mayo Clinic (in Rochester, Minnesota). This seems logical.

“No,” I responded. I called Mayo for a different procedure and they told me that they wouldn’t accept me as a new Medicare patient, even with my records from Johns Hopkins Hospital. I’m sure they weren’t lying—but someone was.

I’m not surprised. Dishonesty and deception are predictable consequences of political allocation, especially in a heterogeneous nation. It will get worse before it can get better.