From The New Ledger:
Obama’s Rule by Scapegoatingby Francis Cianfrocca
The first thing that caught my eye in today’s New York Times piece on insurers is how aggressively this administration goes after private businesses, issuing “stern warnings” not to do what you’d consider reasonable, which is to get in your price increases before the new law and regulations take effect. To be sure, the law gives the federales no authority to preempt state regulation of insurance rates. But I assume President Obama figures that shining what Secretary Sebelius calls a “bright spotlight” (as opposed, no doubt, to a dim spotlight) on industry practices will make private insurers pretty uncomfortable.
One guy in the piece points out where the rate increases are coming from: provider organizations like hospitals are pushing for double-digit increases in reimbursements. By prohibiting what are called “unreasonable increases” in insurance premiums, and giving the Administration the ability to define what that means and what to do about them, Obamacare clearly shows its philosophical bias: that medical cost control is to be exerted primarily at the chokepoint where private insurers pay providers.
This quite explicitly makes the insurance companies the villains of the piece. It enables a policy of medical cost control that’s based on PR. You’re going to see the president and his allies trashing insurance companies every day, every way. If you thought we were going to get an open debate on understanding the true sources of medical-cost inflation (which is all the more blatant now that every other kind of inflation besides university-tuition has gone to zero), you were wrong.
And it fits right in with this president’s (not-unprecedented) pattern of rule-by-scapegoating. But how does he pick the scapegoats for every problem? Some cases are obvious, like Wall St. banks and BP. Others somewhat less obvious (the long-term bondholders of GM and Chrysler, whose security rights were simply stolen from them to benefit the UAW).But in all cases, it’s someone who has been making a good living. And goes right along with this populist moment. You can always score easy points by blaming the guy with money, regardless of whether he earned it fairly, or of how much good he did along the way.
Making a good living is always going to a hard thing for anyone to justify as long as this man is president.
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Going back to the health-insurer case: if you force anyone to work with less freedom to make a profit, they’ll certainly start wringing out all of their inefficiencies (which, translated, means they’ll cut as many jobs as possible and spread the work among the people who remain). It’s very easy for right-wingers to see willfulness in all of this. Rush Limbaugh would say flatly that the goal is to obtain power over people’s lives by steadily hounding private industry from the picture. And indeed in this case, the endpoint is to provide all health coverage through the new law’s “exchanges” (whatever precise form those entities end up taking).
But we’re fighting the wrong battle by seeing it that way, and we make independent voters think we’re just paranoid. The real problem is that the progressives just simply believe deep in their hearts that you can deliver more and better services to people if you’re not required to make a profit. This turns into sound-bites that unknowledgeable people find very compelling: “Listen, those damned insurance executives and their filthy-rich shareholders are stealing from you to line their pockets! If they weren’t so rich, you’d be healthier!”
It just bears repeating until I’m hoarse that it just doesn’t work this way. You can wipe out the profitability of a private industry that certainly has its problems, but you won’t end up with a situation that delivers better services at lower costs. The real chokepoints are somewhere else. And we know because other countries have found them, that this wouldn’t be impossible to solve.
And while I’m at it, I shouldn’t leave this as a strictly utilitarian argument. There’s a lot to be said for a society that takes care of its economic needs through private initiative. You get so much more dynamism, and you create jobs that are so much more interesting. In essence, a fully-free private sector gives everyone a chance to solve the problems. If you come up with a better approach, the marketplace rewards you. This gives lots of people a really good reason to get up and be productive every day. And that turns directly into happiness, which after all is something money doesn’t buy.
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