Saturday, November 19, 2011

What's Next After SB5 and ObamaCare

There's really not much reason to blog these days. All the interested person really needs to do is assemble a list of key words from current events, search this blog, and read prior posts. Plus ça change . . .

But we will deign to repeat ourself now and then.

One such occasion is today. WSJ's opinion page--the best proof of American exceptionalism--today notes the whirlwind sown by the defeat of Ohio Issue 2 and Ohio Senate Bill 5 that it represented. To wit: communities lacking the flexibility to pass on health insurance and pension costs to public employees will by necessity end up with fewer public employees.

This comes as no surprise to anyone who has looked past the pretty pictures of firefighters and teachers (why no police officers? because market research shows that a lot of voters don't trust police officers like they trust firefighters and teachers) and who has contemplated the lessons of Alegbra I. Specifically, if health insurance and pension costs are rising faster than tax revenues, then either the per-employee costs of health insurance and pensions must be reduced or the number of employees must be reduced.

SWNID, as is well know, is on the side of history regarding the place of organized labor in the postindustrial economy. With every passing year, a smaller number of workers are organized, except in the public sector. The politics are complex but the economics are simple: unionized labor works against its own long-term interest by stifling improvements in productivity.

Among our current federal executive's failings, one of his three greatest is his fealty to organized labor, especially organized public employees. Economic stimulus was all about keeping state and local employees on the payroll. The Patient Protection and Affordable Care Act was all about mandating that health insurance come from an employer or from the government--to assure that such benefits could be a prize won by unions desperate to appear to create value for their members.

That point has been lost in all the hullabaloo about the federal mandate. Had BHO wanted an efficient means of getting healthy people to buy health insurance, he would've done what John McCain (gasp!) had proposed and what Wyden-Bennett proposed: tax individuals at a rate roughly equal to the cost of a moderate health insurance policy and provide a tax credit up to that amount for premiums paid for health insurance. Et voila! Individuals and families can then shop for insurance that fits their situation, and if they don't, Uncle Sugar has money in the coffers to cover their indigent care. And there's no power-grabbing invocation of the Commerce Clause to justify an erosion of liberty.

But why not? Just about the first thing out of Obama's mouth when he began the quixotic quest for Eleanor Roosevelt's mantle of liberal sainthood was that Americans like their system of employer-provided health insurance. This, of course, is a conventional political lie. Americans don't like getting insurance from their boss, because the boss has to buy insurance for everyone, and one size doesn't fit all. And they don't like being tied to a job that they dislike out of fear of losing health insurance. But they'd rather get insurance from a bad boss than from any government agency, no matter how nice the President of that government is.

But unions depend on the employer-provided "system" (an accident of price controls in WWII, as alert readers with decent memories will recall: note how one economic sin begets several more). They need to negotiate for benefits to preserve the illusion that without their intervention, workers would be paid in gruel and rags.

And so we have ObamaCare, and a Supreme Court case, and a system which, if implemented, will lead employers to drop plans and individuals with decent health to go without insurance, paying an annual fine that is much lower than the cost of insurance, until they get sick, when guaranteed coverage at average rates, they'll jump into a system that can't possibly stay afloat economically. Such are the exigencies of life in a Republic in which 12.5% of workers are unionized but unions dictate public policy to the Executive.

Incidentally, the primary list of Obama's political failings are as follows, in order by which he applies them: (1) support for government investment in favored, private industries (Solyndra!); (2) support for pointless "green" initiatives and "green" objections to economically productive initiatives (Keystone Pipeline!): (3) support for unions, especially public-employee unions (see above!). We could go on to praise him for adhering to a Bush-like foreign policy or to excoriate him for punting on issues where he has the influence to do something positive, like immigration reform or tax refom. But you get the picture.

1 comment:

Anonymous said...

I guess that the voice behind all Republicans, Grover Norquist is happy with the idea that Wall Street & Insurance Co's will control Health care. End Preexisting conditions, can't afford insurance premiums, go home and die, need a prescription then pay 500% more in the US than in other countries. Yes who needs government intervention.. Time to end Social Security so the Billionaires and Oil Companies can get tax breaks. Remember what is good for Billionaires is good for the country.