Decline of America Through Debt: $109 Trillion Unfunded Liabilities and Debt (Medicare, Social Security, Medicaid, Etc)

In thinking about the economic condition of the United States I sometimes worry that maybe our best days are behind us as a nation. History has shown that empires can last hundreds of years before they collapse. When examining the data of the unfunded liabilities of the United States it is hard to see how the United States will continue to have a high standard of living.

In August 5^th, 2011 the United States lost its AAA credit rating. A credit rating measures how likely a country or company is able to pay back their debts. Although, the current credit rating is AA+ it is clear unless the government gets it act together we will be heading down the wrong path.

Currently the national debt for the United States is over $16 trillion dollars. This doesn't include the annual deficits we have been having which in 2012 was $1.1 trillion (I like how people are excited if the deficit is less than predicted even though it is a trillion dollars). The deficit was $1.3 trillion in 2011. The United States also currently has a very low interest rate on the debt at around 3%. However if interest rates increase to a more normal rate of 6%-7% than the interest payments required would increase from about $432 billion to $864 billion. However, our GDP (or how much we produce) is only $15 trillion. One might look at this and say “Gee we could pay back the debt in one year if we really wanted to”. However there are some problems with this. According to the 2012 U.S. federal budget the United States spent $3 trillion in just one year. What isn’t included in this estimation are unfunded liabilities for government programs.

The 2013 Social Security Trustees report shows that by 2033 Social Security won’t be able to pay out full benefits and will only be able to pay out 77% of benefits. Social Security has an unfunded liability of about $9.6 trillion. Medicare has an unfunded liability of about $39 trillion. Medicaid has an unfunded liability of $20 trillion.  Let’s not forget the newly created Obamacare which will is estimated to create a $17 trillion unfunded liability.

This is all at the federal level we haven’t even gotten down to the state level, city, or county level. Joshua Rauh in this EconTalk podcast estimates the unfunded liability from state pensions is $4 trillion. Actually believe it or not New York city has the highest unfunded liability with $122 billion. Then you have cities like Chicago have an unfunded liability of $42 billion. 

So let's add it all up: 

Current U.S. debt: $16 trillion

States unfunded liability $4 trillion

Medicare unfunded liabilities: $39 trillion

Medicaid unfunded liabilities: $20 trillion

Obamacare unfunded liabilities: $17 trillion

Social Security unfunded liabilities: $9.6 trillion

Student loan debt: $1.1 trillion

Increase in interest rates: $864 billion

2013 projected deficit: $642 billion (will see if this comes true)

$109 trillion (or roughly 7 times our current GDP)

As Dr. Walter E. Williams points out the government spends $3.7 trillion per year. Now if you wanted to "soak the rich" and make them pay for the spending you could tax everyone making over $250,000 at a 100% tax rate and you could only run the government for 190 days. Taking the profits of all the Fortune 500 companies would run the government another 40 days and confiscating the wealth of the billionaires in the United States will allow the government run into the fall season. Clearly, we have a spending problem and not a revenue problem.  

John Goodman on Priceless Healthcare: The Problems With Healthcare

A while ago I finish John Goodman’s great book Priceless:Curing The Health Care Crisis. If you learn one thing about this book it is how to make healthcare more free market oriented. People forget the free market does not exist in healthcare like it does in technology, the grocery store, and other markets. People also forget that doctors and hospitals work for insurance companies. Goodman made some excellent points in the book. I wanted to share not only what I learned but my comments as well. 

Part of the problem with health insurance is that very few people are paying for their own healthcare. In fact, 90% of the costs is paid by someone else (government, insurance, company). It is interesting how doctors nor most health professionals can't tell you the price of tests, drugs, or other services. In fact Medicare has 7,500 different billing codes. According to Goodman there are actually Medicare 6 billion prices at any given time. Medicare by the way will go broke as the unfunded liability is around  There is actually something called the International Classification of Diseases which is now on its 10th edition (starting in 2014) and will feature over 68,000 codes. Some of the codes are bizarre including people who get sucked into a jet engine and contact with dolphins. The codes seem to dumb down critical thinking and decision making. The way I understand these codes is doctors have to explain to the insurance company why a patient saw them. The "code" is suppose to explain what the purpose of the visit was and then is used to determine how much doctors get reimbursed. There is plenty of fraud and abuse in these codes. There will be bill padding, up charging, kickbacks, along with other shenanigans.

How confused would people be if we had food insurance and went to McDonald's and had no idea what a burger actually cost? We should make healthcare single payer in terms of having the individual pay of course. I will talk later about how we can actually do this using a free market system.

Health insurance is a very bizarre market. Employers offer what is known as group health insurance. Due to HIPPA rules in group insurance everyone has to be offered insurance (regardless of their health condition, age, or sex). Health insurance is tied to unemployment which is strange. Part of the reason why so many people are uninsured is their health insurance isn't portable. Could you imagine how many uninsured drivers we would have if your car insurance was tied to employment? Actually if you think about it you actually need car insurance to utilize your health insurance. Despite what some people say the insurance market is highly regulated by each individual state and if an insurance company wants to raise rates they first must get approval from the state to do so. The average profit margin of the insurance companies like Aenta, WellPoint, and Humana is only 3.5%. Compare this to the rich profit margins of broadcasting which has a profit margin of roughly 69% or software companies with an average profit margin of 18%.  They are also told how much they can spend on "administrative costs" which is known as a medical loss ratio which requires 85% of their premium income on medical care and less than 20% on administrative costs. However, no one can seem to define what administrative costs precisely are. Could you imagine if bureaucrats were able to tell Wendy's how much they could spend on food?

Speaking of insurance President Barack Obama promised people that if they liked there plan they could keep it. However, employers may just drop employees as employers can always just just pay the $2,000 fine/employee if the employee amount is greater than 50 employees. The Congressional Budget Office predicts that 9 million will actually lose their healthcare insurance. In terms of cost Avik Roy at Forbes does an excellent job of summarizing the costs of both California (64% to over 160% increase) and the Ohio Department of Insurance which recently said they were going to be increasing premiums 88%. People fail to realize that since insurers will be forced to insure people with above-average risks they will recoup that money by charging healthy people higher premiums.

The average wait time for the emergency room (ER) has been increasing in recent years. In 2009 (the last year for which data is available) the mean wait time was 58 minutes (which is a 25% increase from 2003). Some patients wait and die in the ER. In 2008, this happened to Michael Herrara of Dallas, Texas who waited 19 hours at Parkland Hospital Retail and died waiting for care. Compare this to retail clinics (for-profit) which are often open around the clock, post prices online, and often have little to no wait time. This may explain why retail clinics have had a four fold increase with an estimated 6 million people using a retail clinic in 2009. What is even more surprising is that 91% of patients are satisfied with retail clinics. The only free market hospital in the country is the Oklahoma City Surgery Center which posts prices and one of the only free market doctors (Dr. Michael Ciampi) posts prices online, Even the Cancer Treatment for America posts success rates online.

When looking to other countries it seems the United States actually does have a decent quality healthcare system despite what critics like Michael Moore say. The problem with world rankings is that they take into account things that have nothing to do with healthcare. For instance the fact that Americans kill each other more, have more fatal car crashes, and other events distract from the quality of medical care. Another example is when the United States calculates things like infant mortality we count all births instead of other countries which use more liberal measures and only count the infant dead depending on various factors which would artificially make their infant mortality statistics look better.

Canada which touts its "free" healthcare isn't so free. Canada also outlaws private insurance. Of course Canadians are paying for healthcare in the form of longer wait times. The wait times in Canada are horrendous. 10% of patients wait more than 8 hours in the emergency room. 25% of Canadians wait more than 4 months to see a specialist. No wonder why close to 30% of Canadians find the length of wait time for a specialist unacceptable. Canada is also behind on medical technology as well. According to Goodman, the United States has 1,000 PET (positron emission tomography) units while Canada has only 24 units. This technology is used to diagnose cancer. What is astounding is that even the people uninsured in the United States get more access to medical treatment than other countries. In the United States even the uninsured get more preventive care in Canada (prostate exam, mammogram, etc). Also doctors in the United States typically spend more time with patients than nearly any other country.

British National Health Service found after 30 years access to healthcare was better than when the program started. Speaking of Britain in a survey that came out a few months ago 40% of people who work for the National Health Service wouldn't even recommend it to their family or friends!

The United States is also facing an increasing in shortage the number of drugs available. Data from the University of Utah shows there was a shortage of 74 drugs in 2005 and by 2010 increased to was 211 drugs. Some of these drugs are used to treat serious and life-threatening conditions. There are a few reasons why these drugs are in such short supply.  A program known as the 340B program requires drug companies to give 23% rebates on brand named drugs and a 13% rebate for generic drugs to providers that treat a large number of people without means, clinics treating Medicaid patients, and hospitals and clinics in the Public Health Service, etc. Another reason why there is a shortage is because the FDA after 2010 began heavily regulating drug manufacturing plants. As can be seen on page 11 of this House Oversight Committee report the number of FDA warning letters to manufacturers increased 155% from 2010-2011 and 250% from 2009-2011.

Speaking of costs what I learned in reading Goodman's book was that even "preventive care does not actually lower costs. This study done in Health Affairs showed that preventive care actually increases costs. The study showed 20% of preventive options actually lowered costs while 80% of preventive options actually increased costs. Something else I learned was the price of lab tests are 50-80% lower in hospitals compared and also available within one day. Wal-Mart has multiple drugs that can be purchased for only $4 for a one month supply (Wal-Mart has saved people $3 billion on prescription drugs as of March 2013)

What will even make things worse is a bureaucratic led Preventive Services Task Force which will decide who should or shouldn't get a mammogram, prostate exam, or colonoscopy. I am not a doctor but I do know everyone is different in terms of how they respond to drugs, treatments, and the side effects they receive. A cookie cutter top down approach is a pretty ignorant way to run healthcare.

As someone who is interested in technology even I thought electronic medical records (EMRs) would have done a world of good. These records started around in 2004. Recently one of my doctors learned the EMR system for one hospital but now is no longer seeing patients at a different hospital because he doesn't want to learn their EMR system. He told me he spent 12 hours just learning the EMR system for one hospital. President Obama years ago wanted to "invest" take $50 billion of taxpayer money over 5 years to look into EMRs and the results haven't been too great. This Washington Post editorial finds that after the Children's Hospital of Philadelphia added electronic prescriptions resulted in a threefold increase. The EMRs also add about half an hour more because part of the program is the person using them having to keep okaying hundreds of messages the EMR system might have. Even the New York Times published this article that showed that EMRs did not help doctors help increase productivity or quality benefits. 

Medicare and Medicaid are two more future train wrecks waiting to happen. The Medicare unfunded liability $89 trillion. Not to mention Medicare fraud is about $60 billion a year. Between both Medicare (for people over 65) and Medicaid (people with few resources) the waste is about $100 billion per year. Medicare is expected to go broke between 2016-2024. A survey from the American Medical Association (AMA) shows that about 20% of doctors are already reducing the number of Medicare patients they see. According to Goodman about a 1/3 of doctors don't take Medicaid patients. What is tragic is that children on Medicaid wait 22 days longer than children on private insurance. According to Goodman an experiment in Florida showed that when Medicaid enrollees could choose between private managed care plans the cost was lower and patient satisfaction was much higher than traditional Medicaid.People like to say how efficient and cost saving Medicare is. However, the facts tell a different story. Robert Brook at the Heritage Institute shows that actually private insurance spends less on administrative costs than Medicare (which is quite amazing given how much private insurance companies can spend is heavily regulated). 

Charles Koch Wall-Street Journal Interview on Koch Industries Purchasing Newspapers

It seems as if Charles Koch has confirmed that he is looking into purchasing a newspaper company.  In a Wall-Street Journal article released today. As I mentioned in this post I don’t believe Koch Industries is going to purchase newspaper companies to “control media”. Koch Industries will most likely buy the newspaper companies for what the companies are worth and try to make them profitable over the long term. Koch in a statement said that “there is a need for focus on real news, not news with an agenda or news that is really editorializing”. Koch Industries hired an adviser to look at possible media investments.  Charles Koch stated Koch Industries will not be paying a high price either. According to Koch “[Koch Industries] wouldn’t be interested in putting huge amounts of money in [newspapers] on the bet [Koch] can have a miraculous turnaround”. Koch admits there is a lot to learn about the media business.  Of course Koch Industries will only take on things that make economic sense.

It is interesting that there is so much opposition to having a company purchase a newspaper company.  Apparently, according to this story 50% of Los Angeles Times journalists will quit if the Koch brothers purchased the newspaper. Interesting if these people quit their job where else will they work? The print industry is a dying industry. Technology has reduced the price of data, information, and journalism. Even bloggers like me have been providing news to people (for almost nothing).  Some 500,000 people have signed a petition and protests have occurred in 12 cities to “Save Our News” from the Koch brothers.  I love how the protesters usually have never worked for the private sector and if they did it was “an awful experience”.

I personally don’t believe Charles or David Koch are trying to influence the editorial views of any newspaper they may purchase. If anything Koch Industries is trying to make an investment and assets at a low cost and trying to create value by putting those assets to a higher valued use.

David Koch, Jane Mayer, “A Word From Our Sponsor”, and PBS

This past week Jane Mayer released this article about David Koch. The article tries to portray David Koch has somehow having vast influence and power over the board of WNET. I read some article saying that Ms. Mayer was some type of authority on the Koch brothers. I took somewhat offensive to this as I have written 57 blog posts on the Koch family. To date I am probably the only blogger I have seen that actually has positive things to say about the Koch brothers.  Included in this was a historical net worth of the Koch brothers (1984-present) here, a three part series on the family (part 1, part 2, part 3), and a profile on wild brother Bill Koch here.

Koch in 2000 did have oil spills which lead to a $30 million fine according to this court document. Of course Koch Industries didn’t want to the oil spills as the loss of revenue from the oil spill along with the loss in value of the company (lower future sales because of the spill) would easily exceed $30 million.

Ms. Mayer makes some errors in her article. She refers to Koch Industries as a “huge energy-and-chemical conglomerate”. This is simply not true as Koch Industries as diversified even more over the years according to this article from the Wichita Eagle. Also she claims that the Koch brothers are trying to move the country to the right when David Koch has personally said he is in favor of legalize same sex marriage and I would suspect is more liberal on social issues than people believe (he did run on the Libertarian ticket). Another odd sentence Ms. Mayer states “When Koch joined the boards of WGBH and WNET, it seemed to mark an ideological inroad, enabling him to exert influence over a network with prominent news operation”. What concrete evidence does Mayer have that Koch was able to exert all this influence? According to a source Koch might have donated a seven figure to WNET (of course this is pure speculation). For sake of argument let’s say that Koch was going to make such a donation to WNET. Why would anyone with common sense donate to an organization that was about to release a film that basically denounces the donor?

When I first watched Park Avenue last year I was considering throwing the remote at the television. In the “Park Avenue” film it is stated that Mr. David Koch would leave his Park Avenue residence every weekend loading up his trucks and would never tip. However, for Christmas he would give a $50 check. I find this a little hard to believe because as clearly stated in the NewsMax article David Koch tips 15% which I covered here. This is of course after David Koch has given roughly $600 million to charities (arts, theatre, and medical research) as I mentioned here. The article also laments how public funding for PBS has decreased over the years. It is amazing that PBS is still publicly funded when people like David Koch and James Tisch give eight figure sum donations. I would be willing to bet the rent money PBS would not go out of business if the federal government stopped funding it. People realizing that the organization was not publicly funded would voluntarily contribute to help and support the organization. PBS is also not known to be fair or balanced. Richard Epstein had to school PBS reporter Paul Solman on why income inequality isn’t such as bad thing.

The article then tries to falsely convince readers that David Koch somehow had enormous power over the board of WNET when he was just one of 35 members. The article then goes on to talk about Citizen Koch and how producers of the film Tia Lessin and Carl Deal tried to pitch the idea to Independent Television Service (ITVS) (which is actually a group of independent filmmakers) said that the title of Citizen Koch would be a problem. Also ITVS stated that the documentary was not balanced and suggested certain changes be made. ITVS was funding Citizen Koch. At the end of the day ITVS (which to my knowledge David Koch is not associated with nor funds) did not fund Citizen Koch because the filmmakers Lessin and Deal didn’t want to conform to the changes. This is like if you are an artist and someone asks you to make changes to your painting and you refuse to do so. If you don’t make the changes you don’t get your funding.

Even the review magazine Variety said Citizen Koch had “too many plot strands”. IMDB reviews currently give it 5.6/10 which is pretty awful. The article tries to somehow link David Koch to Citizen Koch getting squashed which is pretty ridiculous. The implications of the article are that David Koch had so much power he was able to get Citizen Koch squashed even though it was ITVS who decided to pull funding for the documentary. David Koch was on the WNET board of trustees and was only one of 35 trustees. By definition this means that David Koch only held less than a 3% vote.

Assume David Koch has one vote. According to the WNET board of trustee website there are 35 board of trustees which would mean that David Koch only has less than 3% of the vote. David Koch decided to resign from WNET’s board of directors on May 16, 2013. 

Dr. Ben Powell on the Case For Sweatshops

Dr. Ben Powell who is now at the Texas Tech Free Market Institute in Lubbock, Texas.  He makes the excellent case that sweat shops are maybe not as bad as people believe. In economics you always have to compare jobs to alternatives. I love how he schools people in the Q&A (economically illiterate) on how economics/businesses really work. 

Medical Students and Medical Schools 1903 vs. 2013

Medical Students in 1903: 26,147
Medical Students in 2013: 75,000
Population in 1903: 80.6 million 
Population in Present Day: > 315 million



Medical Colleges in United States in 1903: 154
Medical Colleges in United States in 2013: 141

Source for Graphs

New York Times Doesn't Understand Why Cancer Drug Prices Are Over $100,000

I recently read this New York Times article and was quite irritated. The story is about the high cost of cancer drugs. Even the American Society of Hematology said we need to lower the price of drugs in order to save lives.

The New York Times fails to understand why the drug prices are so high. First, the FDA makes it very costly to get a drug to market to help people. Phase I, II, and III trials have to be done. Even after the drug is approved the drug has Phase IV where the drug company monitors adverse reaction. As I mentioned in this post the number of patients required for cancer trials has drastically increased over the years which has made the cost of doing clinical test extraordinary. According to Tufts Center for Study of Drug Development the cost of developing just one drug has increased from $100 million in 1975 to $1.3 billion (both in 2000 inflated adjusted dollars). Meanwhile the number of patients required for clinical trials has increased over 160% (between just the 1970’s and 1990’s). Avik Roy from Forbes pointed out that 90% of the costs occur in the final phase (Phase III) of the clinical trials. A drug once it gets into Phase I has about less than a 16% chance of getting approved (note that drug companies test thousands of different compounds before the drug even goes into Phase I trials). So drug companies are spending $1.3 billion and have an 84% chance of their drug not getting approved. This is why they have to charge more for the drugs that do actually get approved. 

Dr. Brian Druker of the Knight Cancer Institute at Oregon Health and Science essentially does not like the profits drug companies are making and asks the question “if you are making $3 billion can you get by with $2 billion”. The profits drug companies make are used to research and develop other drugs. The reason why drug companies have profits are because they invested billions of dollars to develop drugs. Drug companies can’t sit idle with just a few good patents they have to constantly be innovating and developing newer drugs. Actually the FDA makes this worse because the general patent on a drug once it is approved is 10 years. I would be okay with shortening this patent life to say 5 years if the FDA allowed drugs to be marketed once they passed Phase I clinical trials. Phase I looks to see whether the drug is safe (which is what doctors and patients care about most). Researchers, individuals, and doctors can on their own figure out if the drug is effective (given everyone has a different body, different cells, and different DNA). If you shortened the patent life to 5 years and allowed drugs on to the market after Phase I clinical trials you would see a sharp decrease in the price of drugs. In an odd way the FDA does make drug companies riskier. If the FDA were to increase the number of drugs approved, and also shorten the patent life then drug companies would have a more diversified portfolio since they would have more products on the market (and not have to rely on just one or two drugs).

Doctors and the New York Times forget many horrible conditions have at least some form of treatment that is much cheaper than the $100,000 drugs. Many drug companies offer assistance programs to patients who can’t afford their drugs. True the alternative may not be as good as these new drugs but until the drugs go off patent they will be high. Somehow people want to live in world were we have first class health for a low price. I suggest the New York Times take an economics class at George Mason University.  

David Koch on Shen Yun and Giving to New York American Ballet Theater

So in a recent video interview with NTDTV David Koch called the work of Shen Yun "inspirational and put him in a good mood". David Koch donated $100 million to the New York State Theater (which they renamed after him). David Koch has been attending the theater for 45 years (he is now 72). Koch has always said he loves the athleticism of the ballerinas, good music, and attractive women. Speaking of women David Koch was quoted saying "When you have spent as many years as I did begging girls for favors you'd have bad knees too". David Koch has had his knees artificially replaced, his prostate removed, in addition to having 10 surgeries at the New York Hospital of Special Surgery (he also donated $25 million to them). 

Speaking of dancing the only dancing David Koch did was at discotheques according to this Bloomberg story. Koch for years was giving $500,000 to the New York American Ballet Theater. He was so generous he gave $2.5 million for the Nutcracker production. Even Koch's daughter was taking lessons at the School of American Ballet in New York.

I am not really sure why so many people think David Koch is such a bad person. He is a prostate cancer survivor, father, generous donor to the arts, sciences, and cancer research. Although, people may disagree with his policies does David Koch really seem that evil?

President Obama $3 Million IRA/401k Limit

Since I work in the financial industry when President Obama recently announced that he would cap the amount you could have in an IRA/401k plan to $3 million. The $3 million dollar amount was calculated by saying if you received a $205,000 annuity from the time you retire until you die how much money would be needed. However, there are a few problems with this calculation. First, as interest rates change the annuity required would also change. Second, as people live longer the amount required may substantially increase as people require more funds to live. This boneheaded proposal would only bring in $9 billion over 10 years which is not much given the budget is over $3 trillion. According to data from, Employee Benefit Research Institute as of 2011 only 0.03% of IRA accounts were greater than $3 million. By the end of 2012 .0041% of 401k accounts held more than $3 million.  

What is really insane is that this would hurt just regular people who save on an annual basis. Assume someone started an IRA with just $1. Then assume they invested $10,000 in their IRA every year for 45 years. Assuming they earned just 8% per year they would end up with $3.8 million. What also is forgotten is that required minimum distributions force people with an IRA/401k to take out distributions every year after a person reaches 70 1/2. The person is then taxed on that income at ordinary rates. So once Mitt Romney turns 70 ½ he will have a huge tax bill (he will pay ordinary income on all of that income as well-no capital gains).

Honestly, I don’t even know how this would be implemented. If someone had $2,999,999 million dollars and they get a $2 dividend check will you be denied $1? This truly is a confiscation of wealth. If people work hard and voluntary save their own hard earned money why should the government limit how much they can save?  

Koch Brothers: Annual Retreat and Why They Are Decent People

This upcoming week (April 28-29, 2013) Charles and David Koch will be holding their annual retreat in an undisclosed location in Palm Springs, California. Personally I wish I was going.  This will be the 10^th anniversary of holding such retreats. Normally the retreat is held in January however Charles Koch announced he wanted to push it back until April in order to review the election data. I like reading reports about how this is the Koch brothers “secret” retreat. For one the Koch brothers are private citizens and can do as they please. If people want to get together and talk about how to give everyone more liberty, freedom, and in the long run make everyone wealthier I see no problem with that.

ThinkProgress linked the agenda for the 2011 meeting here. I must say I would actually pay to go to this meeting. Speakers include Charles Koch, Peter Schiff, EconTalk host Russ Roberts, AQR Capital Management Cliff Asness. Really this event is more of a free market rally than a secretive meeting. The schedule looks like Monday and Tuesday were filled with free market thinkers that go from 7:30 A.M. to 9:30 P.M.

On the agenda this year is to discuss how to get more Latino voters involved as well as women. Also younger people are also going to be targeted.  At least Charles and David Koch are trying to understand why Republicans lost and figuring out how to fix it. The message of personal responsibility, free markets, and individual liberty shouldn’t be too hard to sell. However, when people get transfer payments from the government in the forms of subsidies, welfare, corporate welfare, or other sources it makes them dependent on government.  

The criticism of the Koch brothers is usually nonsensical. It usually goes something like this…”The Koch brothers pollute, are greedy, and buy politicians government”. Let me take this point by point. If the Koch brothers really did pollute why have they a) been receiving environmental safety awards  (most of these awards were granted by government agencies and not outside parties, b) the pollution data from even the EPA has shown a decrease in pollution for multiple decades. In fact carbon monoxide has decreased 61% (from 1980 to 2009). Sulfur dioxide between the same period decreased 65%. Lead decreased 97% as well. The evidence is against people who claim pollution has rapidly increased. Also do people realize Charles and David Koch breathe the same air as the rest of us? Now let me move on to the next point of greed. Charles and David Koch most likely work more than 60 hours per week based on everything I have seen. As I mentioned in this post David Koch works 10 hour days (it should be pointed out he is also in his 70’s). As I mention in this post Charles Koch was known to work all the time and once had a meeting that started at 4 P.M. and didn’t end until after midnight. Everyone was happy once Charles got married because it meant they had to work less on the weekends. I know people have an image of the Koch brothers as Scrooge McDuck swimming in money. However, they are men that run a multi-billionaire company. For the Koch brothers to say they are for free markets really means even the Koch brothers want more competition (which would actually reduce their profits). However, the reason why I believe the Koch brothers are in favor of free markets is because they understand what creates prosperity and an improved condition for human life. The last time I checked too more countries were trying to orient themselves towards free markets. My post on Market Based Management explains this more.  To answer the last point, no one can purchase a politician. You can give infinite amounts of money to politicians and they can buy the best ads, hire the best consultants, and still lose. People forget Republican Bob Doll in the 1990’s spent an extraordinary sum of money and still lost. At the end of the day millions of people are voting for who they prefer. However, as we saw in this last election cycle politicians are in the business of granting favors. If the 2012 election were held in the 1990’s there would be less of a chance we would have had the same outcome. The rising dependency of government explains the outcome we received.

Personally I hope the Koch brothers each publish an autobiography to explain to people what their lives were really like instead of history writing its own story. The Koch brothers are decent human beings who created  and grew a company, have given hundreds of millions of dollars to the arts, sciences, and cancer research, and have tried to sold their fellow man/woman on why free market capitalism is truly the best path to prosperity.