The further to the left or the right you move, the more your lens on life distorts.

Wednesday, November 11, 2009

Petulant Children

It would be unfair to place the blame for our economic collapse on the overwhelming democratic majority in congress or the Obama administration. Our distressed economy was caused by years of irresponsibility and greed at personal, corporate, and governmental levels.

Having said that, it’s frightening to watch as the democratic majority in congress, cheered on by President Obama, propose legislation that may very well deepen our economic woes and weaken our country over the long term. When times are difficult (and these times are difficult), we need adults in charge. What we’ve gotten are petulant children who have allowed ideology to trump common sense.

John Stossel discusses this in the context of healthcare legislation:
As an American, I am embarrassed that the U.S. House of Representatives has 220 members who actually believe the government can successfully centrally plan the medical and insurance industries.

I'm embarrassed that my representatives think that government can subsidize the consumption of medical care without increasing the budget deficit or interfering with free choice.

It's a triumph of mindless wishful thinking over logic and experience.

The 1,990-page bill is breathtaking in its bone-headed audacity. The notion that a small group of politicians can know enough to design something so complex and so personal is astounding. That they were advised by "experts" means nothing since no one is expert enough to do that. There are too many tradeoffs faced by unique individuals with infinitely varying needs.

I have little hope that the bill that comes out of the senate and the one that is negotiated in conference committee will be a substantial improvement over the house bill.

Sadly, the final legislation will promise what it can’t deliver—lower costs, broader coverage, better efficiency—and the President will sign it. If he’s as smart as his supporters claim, he’ll know that these promises are bogus, but he’ll sign it anyway.

What we’ll get is higher taxes (exactly the wrong thing to do in a bad economy) to offset higher costs, restrictions in coverage (a.k.a. rationed care) to allow an already overburdened health care system to accommodate tens of millions of new customers, and less efficiency reflected in disincentives for innovation, and longer waits for treatment. It’s the kind of reform that only the delusional could embrace.

Camille Paglia is brutally accurate when she writes: “It's as if liberals are starry-eyed dreamers lacking the elementary ability to project or predict the chaotic and destabilizing practical consequences of their utopian fantasies.”

Stossel argues that these "starry-eyed dreamers" have refused to provide specific answers to a set of fundamental questions:
1) How can the government subsidize the purchase of medical services without driving up prices? Econ 101 teaches -- without controversy -- that when demand goes up, if other things remain equal, price goes up. The politicians want to have their cake and eat it, too.

2) How can the government promise lower medical costs without restricting choices? Medicare already does that. Once the planners' mandatory insurance pushes prices to new heights, they must put even tougher limits on what we may buy -- or their budget will be even deeper in the red than it already is …

3) How does government "create choice" by imposing uniformity on insurers? Uniformity limits choice. Under House Speaker Nancy Pelosi's bill and the Senate versions, government would dictate to all insurers what their "minimum" coverage policy must include. Truly basic high-deductible, low-cost catastrophic policies tailored to individual needs would be forbidden.

4) How does it "create choice" by making insurance companies compete against a privileged government-sponsored program? The so-called government option, let's call it Fannie Med, would have implicit government backing and therefore little market discipline. The resulting environment of conformity and government power is not what I mean by choice and competition …

When you’re a true believer, none of those questions matter.

The problem, of course, is that honest answers to those questions lead those of us who are not nearly as smart as our President to conclude that the current legislation is a recipe for disastrous deficits down the road.