Prime Cut

I have been listening to the arguments from both sides. I have not said much on this because

a) I knew this debate would be long.
b) Obama has already stated we're getting his version of health care; public opinion be damned.
c) The American voters wanted what Obama was offering; they get what they deserve.

In any case, here are a few brief points about Obama-care I have been thinking about.

Those on the pro side say the government can offer a better option than the private market. Let's look at how well the government has done when it has entered the market.


Exhibit A) Postal service. The United States Postal Service lost $2.4 Billion last quarter. They believe they will lose $7 Billion for the fiscal year ending in September.


Exhibit B) Fannie Mae & Freddie Mac. "Everyone deserves to own a home." That mantra seems to echo today in the health care debate, "Everyone deserves healthcare." The government decided it was important everyone own a home, even those borrowers deemed too risky to take a home loan. When the government entered the mortgage business, it was politicized and the result is the crash of summer 2008.

Fannie Mae lost $18.8 Billion in one year last quarter and requires more aid. Freddie Mac is doing a little better these days with only a $374 million loss last quarter. They have stated they need the government purse open in case they need to dip their hands in there again.


Exhibit C) Automobiles. It seems unfair to pin this problem on the government because the government did not inherit this problem. That is true. They bought into it, which isn't any better.

The government (That's you and me) owns GM. President/CEO Obama has said the government will not call the shots at GM. (That would be going too far, but calling the shots in the health care industry is okay.) That is too bad because GM is one deck that needs some serious shuffling. So how did the government's decision to leave the group of failed executives running a money losing company go? Even with GM getting the rules bent in their favor not once, not twice, but thrice, the company failed to turn any profit. Not even the politician loved Cash for Clunkers program could help the General.

It seems clear the government operating in the private sector does a pretty dismal job. It is a different story if you are a politician looking for votes back home and don't mind wastefully spending tax payer money. "Your loss, our job security!"

The other curious point about the proponents for Obama-care is that many of them are in the same crowd which protests any pro-life legislation because "The government has no right to tell me what I can do with my body." Inviting the government into the business of health care will grant the government power to dictate all sorts of regulations about what can and can't be done with the body. The government will be the top and maybe sole health care insurer. This gives it tremendous power to dictate its tolerance of unhealthy behaviors. And while Obama has led the public to believe all this is optional, his party is seeing to it that it isn't by levying fines on those exercising their freedom. It seems those preaching "hands off my body" to the government and supporting Obama-care should think about what they're saying.

The picture for government run health care reform is rather bleak. There is very little evidence the government can pull it off effectively. There must be more than one way skin this cat, health care.

There have been some good counter proposals. The CEO of Whole Foods, John Mackey, gave some reasonable suggestions. The Obamacare supporters were not open for dialogue however. Neither is the president. He broke his promise on transparency and has not worked with republicans on a bipartisan solution. (Remember when "bipartisan" was the word of the day every day? "The president must be a uniter, not divider.")

Where does all of this end? Obama says sternly health care reform will pass this year. (Or else?) There is a remote possibility the issue is punted to another time. Not next year, of course; there's a mid-term election to think about! The other possibility is Obama scales back his wrecking ball reform plans and what passes is a watered down version of a leftist's dream. Some democrats, especially the congressional black caucus, insist on a public "option." In the end, it will be a plan to move to the left. It will not be reform that works with the market to improve it. The government wants to be a competitor. No point in playing fair. (See previous exhibits.)

The debate is giving me a headache. Now, where is my government issued aspirin?

Labels: CrashOf08, Fannie Mae, Freddie Mac, Obama