Free Markets, Free People

The Dangers Of Reactive Populism

Not necessarily the danger to the politician – they’re seizing upon something which stirs up the public and trying to cash in on it politically.  But such “cashing in” usually leads to bad law.  And bad law leads to unintended consequences and usually more government intrusion.

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.

This “new power” to “block” (i.e control) “excessive” (who gets to define “excessive”?) rate increases is a perfect example of the point.

By focusing on the effort to tighten regulation of insurance costs, a new element not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California and moving to portray the Democrats’ health overhaul as a way to protect Americans from profiteering insurers.

In reaction to a single insurer in a single state raising the premium because of the loss of subscribers and revenue due to the recession, Obama has seized upon that as a populist reason to call for more government control. The subscribers Anthem needs to balance out those they’re paying for are gone. California has been very hard hit by the recession and Anthem is attempting to survive to continue to pay for those subscribers whose treatments it now covers.

Of course that’s seen as “profiteering” by a government which has managed to run up trillions of dollars in future deficits in the medical care program it runs.

Instead of trotting out a suggestion for more control – in this case cost controls (and we all know how well those work – see Venezuela. See Zimbabwe) – the answer should be competition. Clearly if consumers had a choice they’d leave Anthem and hook up with another insurer less likely to raise their fees.  That possibility would limit most insurers from proposing hikes which would run off those they need to support the pool.  And, if Anthem had the opportunity to broaden its base of subscribers by selling across state lines, it most likely wouldn’t have to raise fees or, at least, not 39%.

Consumers don’t have that choice. Insurers are restricted from selling across state lines. Why? Because bad law says so. This is a situation which can pretty easily be remedied and it can be done with less government. Repeal the laws keeping subscribers from buying from whomever they’d like in the US. We do it with every other type of insurance product you can imagine, health insurance should be no different (consider we do it now with Medigap insurance through vendors such as AARP).

Instead we’re likely to see the opposite happen. And, as usual, we’ll suffer the unintended consequences – less coverage, dropping people at the first sign of a disease which carries substantial cost and, of course, insurance companies which aren’t as financially sound as others going out of business.

The bottom line is Obama still doesn’t understand the unrest and dissatisfaction with the direction of this country (as represented by the Tea Parties) has to do with the size, scope and cost of government. The solution here is simple and something which has been proposed by the GOP for quite some time. The administration’s answer, however, is to do precisely the opposite. Obama’s answer to everything is more government, more control, more spending.

And that’s the wrong answer.

~McQ

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29 Responses to The Dangers Of Reactive Populism

  • I suppose that next Obama will be breaking out the “WIN” (Whip Inflation Now) buttons

  • Well, since The Clown™ is defining what is and what isn’t “excessive,” I can say with some confidence that The Clown™ has been excessive in making this country into a Socialist sh!thole.

    Time to resist The Clown™. We need to come up with posters, bumper stickers, every message board we can find, and POST the messages…”Obama SUX,” or “Down with the Clown,” or “What is Obama’s Favorite Vegetable? Joe Biden,” or “Rid America of Obama in 2012.”

    Post them everywhere. Start a line of shirts and other clothing. Resist these thugs at all costs.

    • I think Obama might be on to something here, but as usual he is looking up the horse’s ass instead of looking at it’s teeth.   What we need is a control on tax increases.

  • Yet I find it highly ironic and amusing that this pathetic excuse for a man who tries oh so hard to stir up populist anger (see his demonization of firms that paid bonuses etc) and now this…..is himself in trouble due to REAL populist backlash inspired by his failed presidency.

  • Expect to see more of this, as part of the final push to get some sort of health care package passed.  It’s going to get ugly and it’s going to push the boundaries of “pathetic.”
     
    Let’s see– “Regulate” a market until prices go up.  Demonize the market over its pricing.  Insist that the only solution is more regulation.  Continue this process until the only ‘solution’ is a complete takeover by the government.  Absorb the market into government.  The problem, which was a result of government meddling, is solved by the ultimate example of government meddling.  Prices are brought “under control” via additional taxes and/or more deficit spending.
     
    What could go wrong?

  • First: Obama is just following the path Alinsky laid out for him.  Alinsky is his Bible – what’s yours?

    Second: “The bottom line is Obama still doesn’t understand the unrest and dissatisfaction with the direction of this country (as represented by the Tea Parties) has to do with the size, scope and cost of government.”

    I disagree.  It is not that Obama does not understand, it is simply that he does not care with anyone or anything that may distract him from what he sees as his duty and that is to pass this abomination of a bill any way he can.  There can be no other rationale for his complete avoidance of the opposition facing him.

    I also believe that he does not see his popularity sinking in the polls as a condemnation of his policies.  He believes it is an aberration of the polling system.  He is still “THE ONE” and only he can lead the poor stupid masses to the glory of the future as he sees it.  He can’t be wrong, MSM agrees with him.  His staff agree with him.  Hell, even the despicable Clintons agree with him. 

    What’s wrong with you people out there?!?!  Why won’t you agree with him???

  • LOL!  Unrest and dissent.  The Democrats still win on the generic ballot, Obama still beats a generic Republican.  His approval ratings are down a bit, but Reagan’s got far lower.   At least 15% of his disapproval ratings come from the left, as they want him to move faster.   Most Americans do want health care reform, and they aren’t angry at Obama.  You are so caught up in the fringe ‘tea party’ groups and the right wing political junkie blogosphere that you are way out of touch with how Americans are thinking.    Most Americans are relatively apolitical and not paying a lot of attention.   They go from their gut reaction to how things seem to be going, and their feelings about the President.   Right now Obama hasn’t gotten a lot passed and people are feeling economic pain, so their gut tells them ‘hmm, maybe this isn’t working.’   If Obama starts hitting the news and getting more reform done, and if jobs start coming back, things will turn around for Obama on a dime.
    The left and the right very often fantasize that the public thinks like they do, or that the public is “mad.”  They use protests (on the left) or tea party stuff (on the right) to reinforce this self-delusion.  But politics meanders left and right back and forth because, at base, the American people are not ideological.

    • I don;t think you are right, Scott,  Rasmussen has the strong approve/strong disapprove of Obama continuing to drop.  It is at -19 this morning.  The more general favorable/unfavorable is 45/54 unfavorable.   I di agree the left wants him to move faster, but every tie he does, the rest of the country likes him less.  It makes no sense to cater to 15% of the country.
      It is quite a different question to ask if the country favors health care reform or if the country favors the proposed health care reform.  You seem to be believing that if the country favors health care reform, then any ol’ change masquerading as reform will due.  No, it wont.
       
      Then you come in with this mantra that Obama has not gotten much passed.  George Will eviscerated that one (as well as Byron York).  Obama has not gotten health care and cpa and trade through the Senate, but he has gotten plenty of other things through, including the justly maligned stimulus bill (you know, the one Evan Bayh said did not create a single job).
       
      I conclude by noting politics does not meander back and forth.  It clusters around the center and as long as Obama is seen as far left, he will be in trouble.   Few think jobs are coming back in the near future.  Obama is always on the news.  In fact I keep the sound off of CNBC because it seems like Obama is on more than the anchors.  I assure, Obama’s problem is not that he is hot on the news enough.  Obama has had his victories, but not the far left ones.
       
      You comment is a poor analysis.  It is more “hope and change” than anything approaching reality.

    • LOL! {chuckle} Unrest and dissent. {eyes rolling} The Democrats still win on the generic ballot and no I don’t have to furnish a link to any such poll, so stop asking, and Obama still beats a generic Republican. So pay absolutely no attention to those Democrats who are bailing rather than face re-election. They don’t mean a thing. I decree it. And those elections the Republicans won in heavily Democratic states don’t mean a thing either. I mean, really, you guys got excited just because a Republican nobody won Ted Kennedy’s seat. You’re delutional, I tell you! It doesn’t mean anything!

      Obama’s approval ratings are down a bit, but Reagan’s got far lower. And I am absolutely going to cling to that mantra, because it would just be unthinkable that Obama, with his Christlike visage, might fail or {shudder} not be re-elected. He thinks like me, you know, and he brought an end to the Bush regime (finally!) and he’s going to cut spending just as I predicted, just give him a while. So the tea parties don’t mean a thing, Obama’s disapproval sliding faster than any president in history doesn’t mean a thing, those elections in Massachusetts, Virginia, and New Jersey don’t mean a thing. They don’t, they don’t, they don’t! Darn it, I decree it!

      At least 15% of his disapproval ratings come from the left, as they want him to move faster. Yes, faster! Onwards toward an earthly leftist utopia, that is blocked by you dense righties. Most Americans do want health care reform, and they aren’t angry at Obama. They’re not! And that’s not just whistling past the graveyard, and the Obama jokes about winning the downhill at the Olympics don’t mean a thing! And people want healthcare reform, which automatically implies that they want Obama’s healthcare reform, by the logic and holy writ of post-modernism. I decree it.

      You are so caught up in the fringe ‘tea party’ groups and the right wing political junkie blogosphere that you are way out of touch with how Americans are thinking. And from my post in the hallowed halls of academia, I am completely in touch with what Americans are thinking. I am! Stop laughing! I find out the latest on what Americans are thinking every day in the faculty lounge. Most Americans are relatively apolitical and not paying a lot of attention. And we wise leftists know how to take advantage of that. They go from their gut reaction to how things seem to be going, and their feelings about the President. Right now Obama hasn’t gotten a lot passed and people are feeling economic pain, so their gut tells them ‘hmm, maybe this isn’t working.’ It’s all just psychological, you see, and don’t start up with unemployment numbers we haven’t seen since the Great Depression, just don’t start! And don’t bring up those elections the Republicans won again! Just shut up about them! I already told you they don’t mean anything! So just shut up already about Scott Brown campaigning against Obama’s healthcare and promising to be the 41st vote! I’ve got a multiple truth right here that says it is completely irrelevant!

      It’s not about reality, it’s about perception! It has to be. If Obama starts hitting the news and getting more reform done, and if jobs start coming back, things will turn around for Obama on a dime. Yes, sir, on a dime. You’ll see. He’ll bounce back and you thick righties will be sorry you ever doubted my predictions, just like I was right about Sadr over Maliki, and violence increasing in Iraq, and all the other stuff I’ve been unassailably right about because I have credentials and a book, and it’s not either a pile of mush so bad I had to get a buddy of mine who hadn’t read it to do the blurb on the book cover! Just because he’s from some college you never heard of, and his name means nothing, that doesn’t mean my book isn’t important! It is! And the analysis in it – it would take your breath away to read such deep analysis. If only you had the intelligence to understand it of course.

      The left and the right very often fantasize that the public thinks like they do, or that the public is “mad.” They use protests (on the left) or tea party stuff (on the right) to reinforce this self-delusion. But politics meanders left and right back and forth because, at base, the American people are not ideological. See, only we wise pragmatic moderates know what to do, as we sit in the middle carefully weighing both sides, and recognizing that the left is wrong because they think we can impose leftist utopia immediately instead of gradually indoctrinating the proles, and the right is wrong because they foolishing keep emphasizing such obsolete concepts as “freedom” and “principles” as if the proles could possibly decide what to do without the guidance of wise elites. As I told you, they’re apolitical and going on gut feel, and we on the left are so much more experienced at gently guiding them on the right path that you on the right are delusional if you think anything that has happened means anything.

      So you just go on being mesmerized by Sarah Palin’s full lips and ample bosom, and fantasizing about her taking off those naughtly librarian glasses. You’re living in a fantasy world, while I’m completely grounded right here in the real world of academia, with my godlike powers of political science to help me understand things a thousand times better than you thuggish, Nazi-like climate change deniers around here. So I’ll keep coming here trying to get through to you Neanderthals, and I don’t either do it because I’m a milquetoast who desperately needs to lecture down to people to keep up my own self-image. I have perfectly good reasons to come here, namely that it provides research for my next book, which is all about how out-of-touch you thick righties are. {chuckle} LOL! {eyes rolling}

    • Right now Obama hasn’t gotten a lot passed

      ….and with a supermajority WHY NOT Scott?

    • Scott-

      Is the science still settled?

    • “If Obama starts hitting the news” – are you 10 years old?  Are you living under a rock?  How many speeches did he give over the last year?    You long ago stated “he thinks like me”, and that, every time you post, becomes more and more obvious.  Because every time you do, you demonstrate how out of touch you are with average Americans, and I’m not talking about the people who post here.   Like you, the man spent the better part of his first 6 months in office lecturing us.   It was All OBAMA all the time.  To the point where even the main stream media began to make note of it.
       
      Get out of the faculty lounge, stop talking to your students , who probably ARE apolitical for the most part, and, assuming you can do it without lecturing them about how smart and wise you are, try talking to the people paying the bills.

      • When someone makes you swoon, you just can’t get enough of them. We’ve been seeing Erb swoon over Obama since the election. You know how long it takes things to sink in for him that he’s wrong about something, if it ever does.

        What idiots like Erb don’t seem to get is that the opposite effect is even more powerful. When people lost faith and trust in a politician, that gets worse every time they see them flapping their jaws. Only action can change that kind of dynamic.

        That’s the difference between Reagan and Obama. Reagan inherited a nasty situation, took action on a host of things, and patiently and amiably waited for them to pay off. Obama hasn’t take action on anything since the payola/stimulus bill, and since that was ill-conceived, waiting for it to pay off was fruitless. In the meantime, he can’t resist alternating bitching about Republicans with entreaties to them to just give up and play the game he wants it. I don’t see that working, and I don’t see him changing.

        • It’s summed up with the continuing idea that if they just could say the right words, we’d understand how great they are and how wonderful their ideas are.  They’re convinced (and I mean Scott, and his inspiration, Barack, because they both operate the same way) that, to a large extent, we’ve just been too dense to understand what they’re saying.

    • “The latest New York Times/CBS News poll: Though 46 percent of Americans still approved of the job Obama is doing, only 39 percent had a favorable personal opinion of Obama.”

      Yeah, Obama is on top of the world.  Keep digging Big O!

  • In addition to allowing the sale of health insurance across state lines, elimination of the numerous “mandates” of coverage would go far to reduce health insurance along with reducing the cost of health care.   Even a meaningful reduction in the mandated coverages would help.  Under the current sysatem, various groups are able to lobby state regulators to include their particular offering as a mandated coverage regardless of whether or not consumers favor it.    As with so much of government, the concnetrated benefits and diffused costs result in an assymetry in attention/effort, and those rent seekers who stand to benefit from a particular mandate face far too little regulatory/legislative opposition.  Yet another issue that would be amerliorated if not eliminated if government were limited in scope to those things that we actually need government for.

    Granting the federal government the absurd power of determining when a rate increase is “excessive”  is, like so much of Obama’s socialist platform, essentially ignorant of economic reality.  Profit margins in the health insurance industry are lower than in most industries; there is not much fat there to cut. 

    True health care reform would equalize the tax treatment of individually purchased insurance with employer-provided coverage, reduce or eliminate mandates, permit sales across state lines, and permit the sale of catastrophic coverages rather than the horribly inefficient essentially first dollar coverage now prevalent.

  • The Dangers Of Reactive Populism

    I suggest that what Imeme is doing is not “populist” per se; it is rather the age-old dishonest use of a scapegoat to both deflect blame and to provide an excuse for implementing policies that would otherwise be rejected by the people.  Imeme has been a laughable failure thus far on health care “reform” because people don’t want what he is trying to push.  So, he pulls out the convenient whipping boy of the insurance companies to shift anger / scorn away from him.  He also demonizes them to give him an excuse to implement his policies.  We’ve seen this time and again in history.  Ironically, the left (including Imeme) accused Bush of doing this very thing with regard to the WoT and the “axis of evil”.

    Tonus
    It is not that Obama does not understand, it is simply that he does not care with anyone or anything that may distract him from what he sees as his duty and that is to pass this abomination of a bill any way he can.  There can be no other rationale for his complete avoidance of the opposition facing him.

    I also believe that he does not see his popularity sinking in the polls as a condemnation of his policies.  He believes it is an aberration of the polling system.  He is still “THE ONE” and only he can lead the poor stupid masses to the glory of the future as he sees it.  He can’t be wrong, MSM agrees with him.  His staff agree with him.  Hell, even the despicable Clintons agree with him.
     

    While I’m sure that there are many competing theories to explain Imeme’s psychology and actions, I think that this one is spot-on.  The man is a total narcissist, trapped in the DC bubble of synchophantic staffers and journalists who not only tell him that he’s right all the time, but also that the idiot hoi-poloi are just too stupid to agree with him but will LOVE him once he does what is CLEARLY in their best interests.  Who among us WOULDN’T think, “I’m always right!” if we lived in such an environment???

  • I wonder when the government is going to clamp down on excessive tuition and fee increases in higher ed?  Erb, any predictions there?

  • I don’t know which generic ballot you’re looking at, Erb, but Rasmussen has Republicans up by 9 points on the Generic Congressional Ballot. That’s dated Feb 16, 2010. Maybe you only have the GCB from 2006 in the faculty lounge, but you should really try to get current.

    • No, you see Rasmussen is caught up in the fringe ‘tea party’ groups and the right wing political junkie blogosphere that and they are way out of touch with how Americans are thinking.
       
      Scott, on the other hand, as you may guess, has his thumb on the pulse of how ‘real’ Americans are thinking.  He can see their thoughts, like a 21st century ‘Alexander’ he sees, knows, tells all, from the lonely parapet of his lofty tower at the University of Maine in Farmington.  He has cast his gaze into the ether, and sped his thought across the face of the continent from sea to shining sea, delicately picking, reading, sensing the mood of the electorate.  Carefully feeling out those who have not been caught in the fringe web of the right wing tea party mentality, or those soiled by the right wing blogosphere.   He has performed his reading, absorbed their thoughts, those delicate wisps of Obama adoration, tiny flames waiting to rekindle into the warm glow that first brought our savior forth from the darkness of the age of Bush.  He has found many many to be pure souls, unburdened by any ideology, tabula rasas, waiting to be imprinted anew by the godlike visage of our messiah.  It is a puzzle for him, why the one, the master, the visionary, has been unable to find the words within his teleprompter that will make us all see what must be, that government health care is good, and wholesome and will free us from the burden of our many many debts and bring forth a new dawn, creating jobs, healing the sick, restoring the crippled, and possibly raising the dead.

  • On the same topic, Don Boudreaux of Cafe Hayek reminds of the last great government price-cap intrusion.

    I wonder what the health-care equivalents of the natn’l 55 MPH speed limit and around-the-block gas lines will be?

    • yeah I lived through all of that, It was amazing how fast all the gas lines disappeared and oil prices fell after Reagan took control and rescended some of Carters garbage.

  • Yes, price controls + rationing is certainly the way to go!  That always works!