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Right-Wing Obamacare

Whether it’s called Obamacare or Romneycare, and whether it’s right-wing or left-wing, the further cartelization of the healthcare system is a very bad idea. In exchange for extending coverage to high-risk individuals, the insurance industry is promised guaranteed profits from a consumer base — that is, people like you and me — that is legally […]

Whether it’s called Obamacare or Romneycare, and whether it’s right-wing or left-wing, the further cartelization of the healthcare system is a very bad idea. In exchange for extending coverage to high-risk individuals, the insurance industry is promised guaranteed profits from a consumer base — that is, people like you and me — that is legally compelled to purchase its product. As with any massively centralized compulsory system, no one can know how it will all work out: perhaps the insurance companies really will lose money in the end. But as we move further away from a free market, the usual kinds of competitive pressures that keep costs down and quality high will be further attenuated; the only sure losers here are the consumers.

Although it doesn’t matter whether a bad idea is right-wing or left-wing, it might as well be pointed out that Obamacare has a great deal in common not only with what Mitt Romney did in Massachusetts but also with what George W. Bush wanted to do with the Social Security system. Remember how Social Security “privatization” was supposed to work: it was not a just chance to opt our of a federal Ponzi scheme that transfers wealth from the young and poor to the old and affluent — which is what Social Security does — but rather Bush’s plan offered as the alternative to having all of your payroll taxes go to Social Security the prospect of having a small percentage of those taxes go into a “private” (but of course, government-approved) retirement fund. In short, it was a choice between an old-fashioned wealth transfer and a newfangled forced-savings scheme, one that would have involved the same cartelization risks as Obamacare does.

Just as Obama and the Democratic Congress are forcing Americans to buy insurance, Bush and the Republican Congress were going to force people to buy into retirement funds if they partly exited Social Security. No wonder, then, that the GOP has put up such feeble resistance against the individual health-insurance mandate: for 20-odd years the putatively free-market Right has wanted the federal government to compel individual citizens to buy another kind of product. The roots of Obamacare are not to be found among Marx, Lenin, or the European Left, but with Bismarck, Milton Friedman, and the state-capitalist Right:

The Chicago boys’ proudest achievement is Chile’s privatized pension system. Its main architect was José Piñera, now a scholar at the Cato Institute. Before the Pinochet regime, Piñera recalls, only workers in government industries, public servants, and the military had pensions. Pinochet—like Otto von Bismarck before him—decided that all citizens should have pensions, and so in 1981 then–labor minister Piñera created a sophisticated system that gave Chileans the choice between a state or a private pension. The state deducts a compulsory 10 percent from each worker’s wages—or as much as 20 percent, if the worker requests it—which he can invest in either the public or the private system. Nearly everyone picks the private pensions, which are managed by six private investment companies, each offering a mix of safer and riskier investments; the Chilean state also regulates these companies and their investments.

Movement conservatives and beltway libertarians have lauded the Chilean retirement system for decades. What can they do when a Democratic administration applies the same principles to another field, healthcare? They can hardly say that what’s good for retirement savings is not good for health insurance, nor that one is a necessity and the other a luxury. Cartelization and corporatism are the philosophy and program of our right-wing policy wonks no less than of our left-wing “Obamunists.”

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