Those who enjoy reading well-written, approachable papers about economic issues may enjoy this paper by John Cochrane (.pdf). Those who are not going to click the link should read this passage about ObamaCare (the Affordable Care Act, or ACA) and the prospects for solving the health care problem by regulating the daylights out of it:
The ACA and the health‐policy industry are betting that new regulation, price controls, effectiveness panels, “accountable care” organizations, and so on will force efficiency from the top down. And the plan is to do this while maintaining the current regulatory structure and its protection for incumbent businesses and employees.
Well, let’s look at the historical record of this approach, the great examples in which industries, especially ones combining mass‐market personal service and technology, have been led to dramatic cost reductions, painful reorganizations towards efficiency, improvements in quality, and quick dissemination of technical innovation, by regulatory pressure.
I.e., let’s have a moment of silence.
No, we did not get cheap and amazing cell phones by government ramping up the pressure on the 1960s AT&T. Southwest Airlines did not come about from effectiveness panels or an advisory board telling United and American (or TWA and Pan AM) how to reorganize operations. The mass of auto regulation did nothing to lower costs or induce efficient production by the big three.
When has this ever worked? The post office? Amtrak? The department of motor vehicles? Road construction? Military procurement? The TSA? Regulated utilities? European state‐run industries? The last 20 or so medical “cost control” ideas? The best example and worst performer of all…wait for it… public schools?
It simply has not happened. Government‐imposed efficiency is, to put it charitably, a hope without historical precedent.
Also, government control of health care is antithetical to capitalism, and thus, to freedom. Because there is no such thing as freedom without capitalism.
You do understand that, right?
We really lost something fundamental when this country re-elected Barack Obama. We lost the chance to save 1/5 of our economy from oppressive government regulation that is doomed to failure.
I plan to have much more to say about the failures of ObamaCare. I have a cache of links sent by a reader that should furnish the basis for a good series of posts. For now, read the Cochrane paper.