Cantor on Healthcare

Nice summation of what conservatives/libertarians run into when taking the Free Market approach. By the time we let the Free Market to change it's behavior (and that's often predicated on the free flow of information), small problems often have grown too large to solve or the cost becomes almost too painful. Kinda like stopping a snowball long after it's built momentum and is now a giant snow boulder. Market forces are generally short term in their outlook and definitely self-centered in their focus.

This doesn't even take into account any human or environmental suffering while waiting for the market to change. Take a look at slavery. We could have waited until it failed economically, but the human suffering was too high to wait (leaving aside the immorality of it).

I can't escape the feeling that conservatives/libertarians have a rather poor perception of human potential. That they live in fear of risk and development. Forever doubting what we are capable of....

I would think that a simple cap and trade approach or a simple emissions tax would be properly characterized as a market solution. Conservatives have never successfully argued that externalities don't exist (though I've heard them complain that they are ubiquitous).

Kevin would note that anything passed by Congress is typically filled with loopholes and horse trading. Perhaps market enthusiasts should focus on that. Instead, they typically just throw up their hands at this point: one would think that the issue deserves at least a little attention. After all, tax simplification did in fact occur in 1986.

Modern conservatism is puzzling.

I love how the Republican party interprets criticism.

quote: "offering a "pretext" rather than a proposal — eschewing the kind of sweeping, vague alternative that earned the party such ridicule when they rolled out their alternative budget in March."

translation:
We were mocked for a nonsensical policy proposal; we have fixed this by keeping the nonsense and eliminating all policy proposals.

Of course the real problem here is not Eric Cantor, it is Politico. The way the legislative debate is supposed to work is that both sides produce a set of ideas, debate those ideas, then implement those ideas. Cantor is explicitly stating that he will not participate in a good faith debate of ideas. By adopting this posture, literally the only role Republicans can play is to criticize. Despite this, Politico rushes to report Cantor's every utterance as if it were a sincere part of the policy debate. As long as the media portray good and bad-faith policy debate in exactly the same way our puerile public discourse may be inevitable.

Republican rank and file seem to be fixed on the idea that (a) they want guaranteed access to health insurance, with no employment or preexisting condition limitations, but (b) they don't want everyone covered, because they don't want to pay for the health care of those who cannot afford it. Many town hall and Washington protesters made this clear.

As I have written before in these comments, (a) and (b) are inconsistent with each other. You cannot eliminate preexisting condition exclusions unless everyone is covered.

There is an opening for Democrats to make this point clearly and loudly. But they are not doing it. Nobody is talking about the specifics.

The Republicans have a good reason not to articulate a plan -- because they don't want to confront the above dilemma. But the Democrats aren't being that clear either. A recent poll finds that "Majorities of respondents said that they were confused about the health care argument". Which is why the Hannitys and the Limbaughs are having the oversized effect that they have, and why the Blue Dogs' constituencies are the tail wagging the rest of the Democratic Party.

The Republicans are in a no-win situation, stretched over the barrel on this. They have different problems here: one is the politics of this bill, and the other is that their long-term economic ideology has imploded.

First, on this healthcare bill, they are damned if they do, and damned if they don't. If they go along with it, they are handing a huge political win to Obama and the Democrats. If they go against it, some form of it is going to be passed anyway, and so the Republicans must set themselves the daunting task of a long-term policy struggle to fight every little bit of it in the future -- at the same time as it reduces costs and will come to be seen as a necessity by most of the voters. (Indeed most of the teaparty cheapskates would run to the public insurance choice or "public option," were it made available to them.) It appears that the Republicans have chosen to go against it, and this must dispirit them greatly, because I would guess that over half the Republican Senators secretly believe that there should be massive healthcare reform, (the present system may begin to hamper U.S. global competitiveness,) and indeed that there should even be a public option -- no one can be immune to the display of immorality that is demonstrated by coverage denial and rescission.

For the very long-term, the Republicans are in an even bigger mental mess -- it was in fact programmed for the Republicans by the time of Reagan, although they still don't appear to understand it. This is also in two parts: On the one hand, their problem is that the Democrats are NOT against the market economy, in fact they earn quite well in markets, but the Democrats realize that market solutions don't always work. So the Republicans have to keep arguing that the Democrats are socialist in principle, when this obviously isn't true. And on the other hand the Republicans must continue to defend pure market solutions, although the indicators since Reagan have been getting worse in several ways. So their only alternative is to blame government for this (as we see now, in the debates over the financial crisis and healthcare.) Now of course there are sometimes government policies that ought to be changed, and so this is where the Republicans' rhetorical inroad starts; it is where they have been hanging their hats -- but a familiarity with U.S. history shows that we have always favored markets first, and that the government has always been brought in afterward, for corrections.

In the economics of healthcare, there are at least two simple textbook economic reasons why it doesn't work as a completely free market: (1) the "distribution of income" and (2) monopoly or "monopolistic competition" among the suppliers. (Analysts sometimes start with a third and in my opinion minor one, the presence of "asymmetric information" in the insurance market.) In normal language, (1) poor people can't afford health insurance, and (2) some part of the cost expansion to the rest of us is out of control (and the other part of it is natural, and should be welcomed as the next growth industry.)

The Republicans are headed into a political minority for 20 to 30 years unless they shape up. It is no longer possible for either party to control the national message via one-way media -- Fox has become a laughingstock, and the internet has improved the national conversation by magnitudes of fact and nuance. The Republicans have to hope that Obama and the Democrats overreach, so they can start winning back Congressional districts. (They will be naturally aided in this because the country surged Democrat and is likely to recede a little bit anyway.) The Democrats on the other hand should always be clear about where markets work and where they do not -- and by doing so, barring the unforeseen foreign debacle, they will gain a political ascendancy lasting a generation or more.