Obama’s Presser 6/22

24 Jun

The MI6 and the CIA overthrew a democratically elected Iranian government in 1953 and installed the Shah. Had that not happened, it’s quite likely that Iran wouldn’t be run by Ayatollahs right now, and who knows? Maybe there wouldn’t be a Hezbollah either. Since the Shah was deposed, the US has been the Great Satan. Obama’s measured response, which is fluid in response to reality on the ground in Iran, is exactly appropriate.

“If private insurers say that the marketplace provides the best quality healthcare…then why is it the government, which they say can’t run anything, is suddenly going to run them out of business?”

16 Responses to “Obama’s Presser 6/22”

  1. Russell June 24, 2009 at 7:29 am #

    Because government’s access to unlimited resources provides it a huge comparative advantage. Although it is very inefficient, it will still be able to provide the lowest rates. If government were subjected to the same rules of business as all others in the system, it would have been out of business decades ago. Since it is not, it will be able to carry huge deficits and debt while still provide the lowest rates. No private business can compete with that.

    The not being able to run anything point in this argument is along those lines, being able to ignore its inefficiencies and costs while continuing to throw more and more money around while getting absurdly into debt, well-beyond any point any company could. It’d be tought to compete with that.

  2. Jim Allen June 24, 2009 at 9:04 am #

    Russel’s points are spot on. If the government had to play by the same rules, I do not believe they could compete with the private sector. But because they do not have to abide by any rules, they can provide lower cost care, driving the private isurance companies out of the business and ultimately we end up with single-payer, nationalized health care.

  3. Russell June 24, 2009 at 10:22 am #

    I think that argument is just a song and dance routine. First, my response, just like George Will’s, was a direct response to the president’s statement. No one said it’s the best argument to be made against the bill, but the president seems to think it’s the best argument in support of it.

    Second, whether you want to talk about profits or risk driving insurance, the government is still at an advantage. If you want to go down the risk road like that author, the government’s advantage increases exponentially. Insurance premiums are based on hedging against risks. The insurance companies pay great sums of money to its actuaries to develop complicated mathematical models to come up with a best guess for what the level of risk is for most possible scenarios and what premium they should be charging in the face of that risk. These models are best guesses because no single insurance company is privvy to all this information. However, the government is. It has all of this data. That’s an absurdly huge advantage. Furthermore, the government can also take on more risk because it can afford to with its unlimited resources. We see this quite clearly in the mortgage industry. Fannie and Freddie were set up to allow for more risk taking by mortgage companies by backing or buying their risk bundles. It led to mortgage companies taking on far too much risk leading to our current situation. Many companies have failed as a result, but not Fannie and Freddie. The government just took a more active role in those companies, pumped more resources into them and they have continued about their business. If Fannie and Freddie were actually mortgage companies, they would be able to take over the entire market right now. The goverment would easily be able to put itself in that position in health insurance. It wouldn’t just be backing and buying risk. It’d be a provider that could take on far more risk than anyone and could price that risk much better because of its unlimited access to every companies’ data and all the information on diseases, research, drug and treatment developments, etc.

    Now that I’ve thought this through I cringe at the prospect that one entity would be an insurance provider at the same time it is determining what drugs and treatment can go on the market, setting research and development policies and regulations, while funding and directing most research and development. That one entity would have an advantage and power far beyond anything reasonably possible today.

  4. hank June 24, 2009 at 11:17 am #

    Want your health insurance to work like AMTRAK and the POST OFFICE, or the IRS?

    The Founders of this country wanted as little government as possible, and for that government to intrude into our lives as little as possible.

    They’re all corkscrewing in their graves.

    Obama doesn’t want to run car companies, but he installed the CEO’s of 2 of the big 3. BULLSHIT FLAG

    Russell’s comment on Health Insurance vis-a-vis Fannie and Freddie are spot on. I already hear the crickets.

  5. Sally June 24, 2009 at 12:20 pm #

    Russel is corect. BP Pwn’ed yet again.

  6. Frankie June 24, 2009 at 1:23 pm #

    “I cringe at the prospect that one entity would be an insurance provider at the same time it is determining what drugs and treatment can go on the market, setting research and development policies and regulations, while funding and directing most research and development”

    I concede, that would be highly problematic – during the times when we elect a President who puts people like Michael Brown in charge of FEMA and puts interns from conservative think tanks in charge of Iraqi reconstruction projects. And nominates people like Harriet Miers to the Supreme Court and Alberto Gonzalez to the post of Attorney General.

    You now have me rethinking my position Russell.

  7. The Humanist June 24, 2009 at 4:08 pm #

    @ Hank – do I want my health insurance to work like, say, the Post Office?

    To paraphrase Bill Maher, do I want to have my health care run by the same entity that is able to pick up my letter in Buffalo NY on Monday and delivers it to my friend in Los Angeles on Wednesday for only 42 cents? Fucking-A right I do.

  8. Ray June 24, 2009 at 6:28 pm #

    The Post Office lost $2.8 billion last year, wants to shed workers (offered 150,000 workers early retirement) and close offices.
    Sounds like your typical successful government enterprise.

  9. Frankie June 24, 2009 at 7:27 pm #

    Yeah, probably not the best example to use Humanist. But i will say, UPS and FedEx successfully competing against the Post Office pretty much alone blows Russell’s first post out of the water.

  10. shim June 24, 2009 at 8:11 pm #

    Pundit…Simply put private insurance companies have to show a profit to stay in business…the government doesn’t. Therefore they can stay in the insurance business as long as they want whether they are successful or not. that is of course unless they aren’t too tied up running GM or the banks into the ground…

  11. Russell June 25, 2009 at 6:58 am #

    Frankie, it doesn’t really because the Post Office’s main business is daily and residential delivery. Fed Ex and UPS are not competing directly with the Post Office. They’ve carved a nitch from themselves on the outer part of the business. The Post Office pretty much holds a monopoly on the daily residential delivery. Insurance companies would be competing directly with the government.

    The fact that the Post Office lost $2.8 billion last year and has gone many, many years without seeing any profit or surplus bolsters my first point. There has never been any discussion about them going out of business or bankrupt. How many private sector companies could survive like that? The fact that the price of a stamp is increasing almost every year and they’re still running billions in the hole should make everyone nervous about government providing health care.

  12. Russell June 25, 2009 at 7:02 am #

    That argument aside, I think the prospects highlighted in my second point are scary enough on their own.

  13. Russell June 25, 2009 at 8:04 am #

    Sorry, niche not nitch.

  14. Sally June 25, 2009 at 8:46 pm #

    Thanks for not posting my second post – I guess you cannot acceot the truth.

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