ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Thursday, April 23, 2009

Debtor-In-Chief

This whole business of having the Obamessiah stipulate credit rates is just another sign of how ridiculous our economic system has become.

* APRIL 23, 2009, 2:58 P.M. ET
Obama Pushes New Credit-Card Rules

WASHINGTON -- President Barack Obama said he will push for a law to provide "strong and reliable" protections for the millions of Americans who have credit cards.

The president on Thursday outlined his priorities after meeting with chief executives of the credit-card lending industry.

Mr. Obama said he wants legislation that will prevent consumers from facing a sudden, surprising rise in fees. He said credit-card companies must publish their forms in plainspoken language. The president said companies must make it easier for people to do comparison shopping and said there must be greater enforcement so that violators feel the "full weight" of the law.

Both the House and Senate are working on versions of such a law.

But the banking industry is warning that Mr. Obama's push for legislation could backfire, restricting lenders and making less credit available to Americans during the economic crisis.

Mr. Obama met with business leaders Thursday, a session the White House said would be an "open and productive conversation."

That's codespeak for "I won, get with the program."

Further down the story, we get this laughable commentary from Larry "Women Don't Like Math" Summers:
[...]
White House economic adviser Larry Summers said over the weekend that the administration wants to curb pitches that addict people to plastic.

"Individuals are going to have to save more. That's why savings incentives are so important," he said. "That's why we need to do things to stop the marketing of credit in ways that addicts people to it and so that our households are again saving and families are again preparing to send their kids to college."

Meanwhile, the Feds are using TARP in the same way that the Gambino crime family used their loan shark business: you wanna pay the money back? Nah.. I don't want my money back; I want you to do me a favor.

But, what is truly laughable is that the Obama administration - the same guys who are more than tripling our federal deficit - are lecturing the American people on saving money for the future.

And targeting credit card companies for making it too easy for consumers to spend money.

Perhaps we should pass a law making Chinese T-bill purchases more difficult, so that our government won't get addicted to plastic.

Your Co-Conspirator,
ARC: St Wendeler

Monday, April 20, 2009

Mickey Kaus gets it wrong on Health Care

Mickey Kaus has this post on how the Obama admin is taking the wrong approach to marketing their universal health care rationing system.

For some reason, Mickey thinks that government bureaucrats will be more caring about patient situations than bureaucrats paid by privately run (but highly regulated) HMOs. This despite all of the evidence to the contrary from public health care systems around the world or even other aspects of government-run services (e.g. child welfare agencies, the public school system, the INS, etc). (For liberals, its always just a matter of codifying the right rules to get us to utopia!!!)

Here is the part where Kaus makes his mistakes:

The "rational," cost-cutting, "hard-choices" pitch isn't just awful marketing--I don't even think it's accurate. Put it this way: I'm for universal health care in large part precisely because I think the government will be less tough-minded and cost-conscious when it comes to the inevitable rationing of care than for-profit insurance companies will be. Take Arnold Kling's example of a young patient with cancer, where "the best hope is a treatment that costs $100,000 and offers a chance of success of 1 in 200." No "rational bureaucracy" would spend $20 million to save a life, Kling argues. I doubt any private insurance company is going to write a policy that spends $20 million to save a life. But I think the government--faced with demands from patient groups and disease lobbies and treatment providers and Oprah and run, ultimately, by politicians as terrified of being held responsible for denying treatment as they are quick to pander to the public's sentimental bias toward life--is less likely to be "rational" than the private sector.
[...]

Mistake 1 - Believing that the government will be shamed into making more caring decisions

So, the next time you get a serious illness which requires a bunch of moolah to treat (assuming you even hear about the possible treatment), Mickey assures us that you'll get treated - but you may have to lobby your local patient group/disease lobby or (even better) Oprah.

So, in the eyes of Kaus the possibility of negative publicity for the government will drive them to make more caring decisions regarding your life. Except, it would seem that most politicians (and to even a larger degree, nameless & faceless bureaucrats) possess very little shame (see Dodd, Spitzer, etc, etc).

In reality, companies operating in a truly free, competitive market (the current health care marketplace could not be considered one) would be even more likely to act with a bias towards treating the illness, for fear of losing more customers.

Mistake 2 - Assuming that an insurance company in the existing, highly regulated health care system would deny treatment based on this cold, cost/benefit analysis.

Yes, there are horror stories about the current health care system. However, they are usually confined to patients who discover that they have some catastrophic illness when they are not currently covered by health insurance. This is normally because they either: 1) are in between jobs and therefore not covered by their employers health care plan; 2) chose not to pay for health insurance because they thought they were healthy; or 3) because they were eligible to obtain free/subsidized health care under Medicare/Medicaid and did not sign up.

The only other exception to lack of coverage would be exceeding the maximum benefit cap that is common with most policies. However, in the example provided, no policy would have a $100k maximum and most are in the millions of dollars - and there are currently no treatments that are that expensive.

Ultimately, the only way to save money in health care while at the same time providing some protection against catastrophic illness is to put the health care consumer back in charge of the system.

Currently, we do not have a health insurance system - we have a health insulation system. Consumers are insulated from the costs of health care (from minor procedures, medicines, etc to major events). Unleashing the cost-consciousness and cost-sensitivity of the consumer on the system will bring down costs.

Let's try a free market health care system for once.

And remember, the "free" in "free market" stands for freedom. I know I want more, not less freedom in all decisions I make about my life.

Your Co-Conspirator,
ARC: St Wendeler