Monday, August 17, 2009

Health Care "retreat" is just a tactical change

While the apparent White House retreat from the public option should be a cause for encouragement, we need to be very clear-eyed about what it is and what it isn't.

In the various piles of tea-leaves we are asked to read--primarily excerpts from the Sunday talk-shows and their follow-ups--there is nothing to suggest the White House has abandoned its ultimate goal of government run health care. There is a great deal to suggest that it is merely adapting its tactics, akin to switching from a frontal assault to a flanking maneuver. The "end run" imagery within that analogy is by no means inadvertent.

What this government can't get away with directly it will do by proxy. Thus, if the public option won't fly, propose "co-ops" as an alternative:
With $3 billion to $4 billion in initial support from the government, the co-ops would operate under a national structure with state affiliates, but independent of the government. They would be required to maintain the type of financial reserves that private companies are required to keep in case of unexpectedly high claims.
If this sounds familiar to anybody, it's because it's directly out of the Fannie and Freddie playbook. Create "independent" entities with Federal funding, which can, of course, be augmented once they start to flounder, because they will be "too big to fail."

Inasmuch as they will be bound by the same constraints and voodoo economics that have made Medicare such a resounding success, they will flounder in due course, but, insulated from failure by the federal government (read "your money"), will be able to undercut and destroy private insurers and drive consumers to government health care, however branded.

The difference between "public option" and co-ops is thus a quibble over the delivery mechanism. The overall objective remains unchanged.

The bottom line here vis-à-vis public pressure is maintain vigilance and do not let up. Party-hats, not so much.

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Update: Obviously not having read my analysis above and/or used their thinking-caps for just a minute, some members of the liberal wing of the Democratic party (a term akin to being the chlorine wing of the pool) are bridling at the suggestion of compromise.

What might save the republic is these guys aren't even particularly good Machiavellians. We can all hope they stick to their guns, even the ones that aren't loaded.


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