Free Markets, Free People

David Frum


Previewing the Speech

As expected, bits and pieces of the contents of the speech President Obama will give tonight before a joint session of Congress are beginning to leak out (naturally they begin to do so right after I posted my thoughts on what he must do tonight). And, it appears, he’s going to go with his base on this one:

President Barack Obama, in a high-stakes speech Wednesday to Congress and the nation, will press for a government-run insurance option in a proposed overhaul of the U.S. health-care system that has divided lawmakers and voters for months.

White House officials say the president will detail what he wants in the health-care overhaul, as well as say he is open to better ideas on a government plan if lawmakers have them.

Democratic plans call for requiring most Americans to carry health insurance. Failure to comply could cost families as much as $3,800 a year, according to a new Senate proposal.

The president is likely to say that a government-run insurance plan, known as the “public option,” will not provide a level of subsidies that give it an unfair advantage over private insurers, according to aides familiar with the speech preparations.

Of course no one is going to believe the claim about the subsidies at all – they’ve seen promises such as that made and broken for decades. Any subsidy is certain to be raised at the whim of Congress at some time in the future. And if you recall, when originally discussed, the claim was there would be no subsidy, but instead an insurance plan paid for strictly by premiums. Any subsidy makes the playing field anything but level and won’t provide “competition” but an unfair advantage to the government plan.

The use of the term “subsidy” in conjunction with a “public plan” will be interpreted by the public as an attempt to do exactly what the public says it doesn’t want – subsidized government run health care.

David Frum sees the danger in this approach:

By early accounts, the President will today deliver a big speech urging an only very slightly slimmed down version of the big health bill before the House of Representatives. Once again it seems that Barack Obama’s idea of “post-partisanship” amounts to: “Let’s everybody do what I say!”

Worse, it’s not even what he says. It’s what the liberal wing of his party in the House says – and what he does not dare to contradict.

Frum notes that the public option is “poison” to the moderate Democrats and Republicans. So tonight’s speech will likely make no attempt at a bi-partisan appeal and instead do what I think will lead to an epic failure – repackage unpopular Democratic ideas and attempt to ram them down the nation’s throat.

That’s not leadership. That just the exercise of power. But Obama has never demonstrated any leadership to this point. So it would come as no surprise if he opted to exercise the power Democrats have accrued while believing he was acting as a “leader”.

Why so stubborn?

Here’s why: What moderate Democrats most want from him is cost control – some assurance that a huge new expansion in government-guaranteed healthcare will not explode costs and burden the country with crippling deficits off to the wild blue yonder. Trouble is that while the Democratic plans contain promises of cost control, they contain scant mechanisms for cost control. Or rather – they contain only one mechanism, a public healthcare provider that can ultimately use the power of government to forbid price increases.

Conservatives warn that controlling prices does not work. They lead only to shortages – rationing – because the government-imposed price does not pay the cost of delivering the service. Instead, sellers and providers substitute a worse and cheaper service for the unaffordable former item.

But while the public option is a bad solution to the cost problem, it is the only solution the president has got. There are no other ideas for intensifying competition to find efficiencies and savings on the table. So… he is clinging bitterly to the religion of state control and betting everything on it.

Heh … I love the final sentence, but there’s certainly a lot of truth in Fthe ability to claim they didn’t participate.

It appears, Obama is going to rely on his rhetorical ability to make the unpalatable palatable again. If so, it’s an unseemly level of hubris which drives someone with an outsized ego to double down on failure instead of seeking a better path. Doing so isn’t leadership. It is, as Frum notes, plain old vanilla stubbornness.

It isn’t clear whether he will endorse mandatory enrollment and fines if people avoid doing so. Obviously if he does endorse it, he would be a direct contradiction of his stand during his campaign. He won’t be allowed to forget that.

If what the WSJ and David Frum are saying is true, Obama is headed for trou

rum’s description. The point, of course, is despite rhetoric in the speech claiming he wants ideas from the opposition (and despite the fact that the opposition has answered), there is no real desire whatsoever to include them. He only wants ble. As many on the left like to point out as they claim they’re going to “win” on this issue of health care reform, polls show the majority of people do indeed want health care reform.

That may be true. But “health care reform” covers as broad a spectrum of approaches to the problem as one could imagine. What polls have shown as well is the public isn’t at all happy with this narrow approach the Democrats are offering and calling reform. To ignore that and plow ahead with what the public has plainly made clear it doesn’t want is indeed stubborn, as David Frum points out.

It is also potentially suicidal, politically speaking.

~McQ

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