Last week, during President Obama's "bipartisan" healthcare panel, the president refuted the idea of "allowing" insurance to be purchased across state lines by citing the often used "credit card/race to the bottom" example. His reasoning clearly identifies the difference between and the "Progressive" philosophy that has taken control of Washington, and the philosophy of the average American.
I first heard the "race to the bottom" fear mongering brought up-and quickly refuted-at a health care town hall panel that OSPRI Fellow Brian Bishop and I sat on last July. Perhaps the common sense thinkers on the president's panel were day dreaming at the time, or not allowed to respond, but the answer to this excuse is very clear to some of us, which speaks to how antithetical it is to others.
The credit card excuse goes like this: American citizens purchase credit card services from any company they want, even if that company is not located in the citizen's home state (you know, like how we can purchase, well, just about everything else except health insurance).
But, according to the president, this resulted in one particular state releasing the industry from onerous (my adjective) regulations and, as expected, credit card companies flocked to that state (this state happens to be Delaware).
The president expressed his "philosophical concern" with purchasing health insurance across state lines by saying that the government "ended up allowing people to get credit cards from (sic) whatever state," and that one state had the "worst regulations and consumer protections, and all these fees and practices (were implemented by the credit card companies) that people don't like, people weren't happy about" (Emphasis added).
Now, the arrogance of this statement-that he allows us to be free thinking individuals-
is bad enough, but his underlying grasp, or lack thereof, of how the market works is even more troubling.
I am going to exhibit my psychic powers: if your credit card company charges you with unreasonable fees and you are affected by "practices" that you don't like, then you either haven't taken the time to shop around or you are in a financial situation where those conditions are your only option.
Those fees and practices are there for a reason, they are necessary for the company to make the profit required to attract investors-investors which are required for continued business (unless government fills that spot).
If the government removed those fees, the lost revenues would have to be made up somewhere. Could the businesses become more efficient, thus cutting costs to absorb that lost revenue? Perhaps. But, because it is a company in the private market we can assume it already has the pressures of competition to ensure efficiency. Of course, this brings us to the inefficiency of government-run entities because of that lack of competition.
Consumers are empowered with "purchasing power." If you don't like the product or service you have purchased, buy it somewhere else. The only place you don't have this power is when dealing with the government (the public education system comes to mind).
The next point the president made at the panel was that today more people get healthcare from the government than from private sources. He said it like it was a bad thing, which would mean that the government is trying to provide the basic necessities to only those who can't otherwise afford them, but somehow, the system is being taken advantage of.
The president blamed this shift from private to public supported healthcare on businesses shedding healthcare "responsibilities." (It is difficult not to be sarcastic at this point)
If a business has the option of allowing someone else to pay the bill (the taxpayer in this case), why wouldn't they want to do it? Businesses are run by individuals and individuals do this all the time. For a great example, see our study "Doing Long Term Care RIght" on why so many middle class and affluent elders are in nursing homes, being funded in a government-controlled Medicaid system, rather than controlling their own long-term care through the use of private insurance.
Our culture has changed because we have given up personal responsibility to a very willing and eager government nanny-state.
The recent Gallop poll showed that nearly twice as many people label themselves "conservative" versus "liberal" (40% to 21%). Most of them probably don't study policy but they do have general values that taught them to be responsible for their own actions. Whether they were raised Democrat or Republican, if their parent(s) went to work, paid the bills, and didn't rely on others to take care of them, they were raised with generally conservative values.
But that's antithetical to electing a government that "allows" us to be responsible for our own decisions. The president has identified the "Progressive" side of the Democrat party that really believes they know what's best for everyone. Not necessarily for you, but for everyone, and it is their job to protect you from "big business." What they really mean is they want to protect you from yourself. I don't know about you, but I'm happy with my credit card services.
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