Socialized Medicine Marches On
President Obama appears poised to drop the "public option" from his proposed health care plan. Instead, the plan may include insurance co-ops:
The Hegelian dialectic is an integral part of America's two-party monopolistic political system, benefiting both Republicans and Democrats. On economic issues, Republicans take the guise of small government conservatives opposing the socialist policies of the Democrats. When it comes to foreign policy and social issues, the roles are reversed, with the Democrats decrying the fascistic interventions of the Right. Ultimately, however, compromise is nearly always reached and government grows bigger and more invasive.
Government-funded co-ops will still drive private competition out of the market. First, the co-ops will not have to tap the private capital markets for initial funding—they would receive their start-up monies from the government. Government officials can claim whatever they want about these co-ops being independent, but you can bet your last federal reserve note that the government will not let the co-ops fail. Thus, just like Fannie Mae and Freddie Mac, the co-ops will be implicitly backed by the federal government. Because of this backing, the co-ops will also be able to borrow money at lower rates than their private competitors.
In addition, the co-ops will most likely receive tax and regulatory advantages. For instance, the Tennessee Valley Authority is not subject to state and local environmental regulations or taxes (although Congress has authorized the TVA to make payments to state and local governments in lieu of taxes). While Exxon was fined $500 million—as well as paying another $500 million in actual damages—for the Exxon Valdez accident, no one from the TVA has been fired or resigned as the result of the Kingston coal fly ash spill in late 2008. Because it is competing with other companies, Exxon cannot raise its prices above what the market will bear to recoup its losses from the Exxon Valdez verdict. On the other hand, since the TVA is effectively a legal monopoly, like most utilities it simply needs to convince legislators to allow it to raise prices. Thus, taxpayers will end up bearing the cost for any payments or fines the TVA incurs whether in the form of higher rates or higher subsidies.
There is always a consequence to government involvement in the market, even when that involvement takes the form of agencies which are created and backed by the government but claim independence from the government. Because of its association with the federal government, the TVA is able to hide the real cost of electricity to its consumers; while its rates may be artificially low, consumers make up the difference in higher taxes. Even worse, much of the blame for the current economic downturn can be laid at the feet of Fannie and Freddie whose activities in the mortgage derivative markets resulted in the subprime mortgage debacle.
Government insurance co-ops will be no different. Far from being a step away from a government takeover of the health care system, it is simply a incremental step in the same direction.
"Under a proposal by Sen. Kent Conrad,D-N.D., consumer-owned nonprofit cooperatives would sell insurance in competition with private industry, not unlike the way electric and agriculture co-ops operate, especially in rural states such as his own.
Such a compromise would allow Republicans to save face and claim that they stopped a complete government take-over of the health care system: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."
This situation is a great example of the Hegelian dialectic. One side takes an extreme position—in this case, the Democrats advocate a near complete takeover of the health care system via a policy that will quickly crowd out private companies. The other side takes a much more moderate position, but one which still moves in the same direction. A compromise is then reached—a synthesis of the two positions—which allows both sides to appear reasonable. The end result is that the side taking the extreme position gains ground while the moderates retain their credibility by not allowing the other side complete victory.Sen. Richard Shelby, R-Ala., said Obama's team is making a political calculation and embracing the co-op alternative as "a step away from the government takeover of the health care system" that the GOP has pummeled.
"I don't know if it will do everything people want, but we ought to look at it. I think it's a far cry from the original proposals," he said.
Republicans say a public option would have unfair advantages that would drive private insurers out of business.
The Hegelian dialectic is an integral part of America's two-party monopolistic political system, benefiting both Republicans and Democrats. On economic issues, Republicans take the guise of small government conservatives opposing the socialist policies of the Democrats. When it comes to foreign policy and social issues, the roles are reversed, with the Democrats decrying the fascistic interventions of the Right. Ultimately, however, compromise is nearly always reached and government grows bigger and more invasive.
Government-funded co-ops will still drive private competition out of the market. First, the co-ops will not have to tap the private capital markets for initial funding—they would receive their start-up monies from the government. Government officials can claim whatever they want about these co-ops being independent, but you can bet your last federal reserve note that the government will not let the co-ops fail. Thus, just like Fannie Mae and Freddie Mac, the co-ops will be implicitly backed by the federal government. Because of this backing, the co-ops will also be able to borrow money at lower rates than their private competitors.
In addition, the co-ops will most likely receive tax and regulatory advantages. For instance, the Tennessee Valley Authority is not subject to state and local environmental regulations or taxes (although Congress has authorized the TVA to make payments to state and local governments in lieu of taxes). While Exxon was fined $500 million—as well as paying another $500 million in actual damages—for the Exxon Valdez accident, no one from the TVA has been fired or resigned as the result of the Kingston coal fly ash spill in late 2008. Because it is competing with other companies, Exxon cannot raise its prices above what the market will bear to recoup its losses from the Exxon Valdez verdict. On the other hand, since the TVA is effectively a legal monopoly, like most utilities it simply needs to convince legislators to allow it to raise prices. Thus, taxpayers will end up bearing the cost for any payments or fines the TVA incurs whether in the form of higher rates or higher subsidies.
There is always a consequence to government involvement in the market, even when that involvement takes the form of agencies which are created and backed by the government but claim independence from the government. Because of its association with the federal government, the TVA is able to hide the real cost of electricity to its consumers; while its rates may be artificially low, consumers make up the difference in higher taxes. Even worse, much of the blame for the current economic downturn can be laid at the feet of Fannie and Freddie whose activities in the mortgage derivative markets resulted in the subprime mortgage debacle.
Government insurance co-ops will be no different. Far from being a step away from a government takeover of the health care system, it is simply a incremental step in the same direction.
Posted by Citizen X at 8/17/2009 10:01 AM 
Categories: Socialized Medicine
Tags: Socialized Medicine Republicans Health Care Hegelian dialectic Obama
Categories: Socialized Medicine
Tags: Socialized Medicine Republicans Health Care Hegelian dialectic Obama
well X let's face facts if we don't get this man out of office soon he is going to destroy what little freedom we have left. Ron Paul would never have considered this health care plan. I am sad to say my own mother is a Dem. and she LOVES the idea of gov. run health care. needlessly to say her and I have heated debates all the time. I have tried to explain to her just how bad it is working (or not working) in Canada...she doesn't belive me that sick people die there waiting in line for many months just to see a doc. she also says IF it's true it would never happen here. well she is 68 and starting to have health problems I hope this health care does NOT pass so she can have health care.
If things keep going this way there will be an up rising in this country...I plan to be on the front lines of it.
GIVE ME LIBERTY OR GIVE ME DEATH
I WILL STAND FOR NOTHING LESS
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I am with Beth, I am a father of five and I am afraid that we are going to hand something over to our children that is much worse than what we inherited. Thomas Paine...If there must be trouble, let it be in my day, that my children may have peace.
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Please. You're comparing the Exxon Valdez fine, which was levied *just last year* (and therefore nearly two decades after the accident itself) and an incident that happened *just last year* itself.
Best case scenario, your depth of thought overlooked the notorious length of civil litigation. Worst case scenario, you willfully overlooked a crucial fact to try to make your point relevant.
Neither case is desirable, I'm afraid.
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I'm not exactly a fan of Exxon which receives huge government subsidies in the form of the military intervention in oil producing regions. However, my point was not the size of the settlement--Exxon by the way has benefited from appeals as the original settlement was $5 billion, who is actually punished and thereby held responsible for their actions. Granted, Exxon benefits from favored status with the federal government, but the fact remains that the coal ash spill has been treated differently because the TVA is a quasi-government agency. As you mention, litigation is pending and will potentially run into the hundreds of millions of dollars, but the TVA has the government on its side.
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I hope that you're proven wrong with regard to liability for the ash spill, as it was indeed environmentally disastrous.
I'm less cynical of the government than you, but that doesn't mean I am willing to wager that TVA will be found liable for damages. I'm merely hoping that they will be.
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As always, the reading was so very insightful I do hope you are a teacher. Even the comments made by others are for the most part always very interesting. Everyone seems highly intellectual and passionate about their stance. However, here is my problem. I am one of those American's with the insurance issue. I watched my husband crumble in 2007 with a massive stroke. He was a state employee and we were both covered under his health plan. After that happened he lost his insurance (I was informed afterwords that he could have kept it if I paid, but it was after the fact and then it was too late, wonder how did that happen?). Now I cannot get this man insured!! The things the insurance did not pay for before he was dropped I had to pay for. I didn't mind really because there is always a bill for what insurance does not pay for. After that I had to pay for his MRIs and blood work and such before they would give him the proper care he needed. His medicines are over 700 dollars a month. It ate up our savings in no time flat. It was a nightmare. We are lucky in that I make a great living and can support him, but I fret everyday what if something happens to me?! In my opinion if you receive Medicare, Medicaid or things of that nature, government is already providing your healthcare (its flaky, I have been a coder), but it is something that helps. I have seen coverage of the town hall meetings and they bring out all of the crazies. The notion that that type of healthcare would bring about giving grandma a pill that is going to kill her is just crazy. Besides you all know that we let people "die with dignity" in this country by letting them starve to death, remember Susan S? There are just so many variables and there is never going to be a perfect plan in this country. And speaking of my country, I see a slant that I think is very ugly, very grim. While I don't ever want to see little Johnnie goose-stepping down main street to celebrate the 4th of July, I do think that some of the rhetoric is just a little much. Look, we did it right, my husband and I, and within one moment, it all came crashing down. I think that he should have a chance to be covered in a real healtcare plan just like everyone else. He is doing really well now,all counts and pressure readings are absolutely great and if Blue Cross-Blue Shield and the rest of the insurance companies wont allow him to be covered in any of their policies and if the government will, I say sign him up.
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Mary, what you are demanding is not "insurance" , but welfare. Insurance is risk pooling against tragic events that might happen in the future. It is not payment for existing problems. You are demanding that someone give you fire insurance (at gunpoint) as your house is burning down. Your problems result directly from existing government interventions into healthcare. The last thing you should be demanding is further government coercion and control.
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So..what happens to government-backed healthcare plans like Medicare or Medicaid?
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Have you been channeling Carnac the Magnificent again, X? Not only is a TVA going to raise the base rates this fall, it's also considering altering its quarterly fuel costs to one that changes rates according to fuel costs every month. This won't affect only Tennessee since TVA also has power plants in Kentucky, Virginia, North Carolina, Georgia, Alabama, and Mississippi. And to the TVA officials, "May a bag of Pop Rocks explode in your shorts."
http://www.timesfreepress.com/news/2009/aug/17/tva-rates-to-fall-again-in-october/
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This site is the best source of good info I know of. I didnt know what to call it, but I do now (Hegelian Dialectic), but this is obviously the game the two parties play. And you are right X in that no matter who wins the result is always bigger government. I have confidence that a truly free market place can solve our healthcare problems (Rand Paul suggests allowing insurance cos to sell health insurance like term life, maybe 10 or 20 year policies). Common sense will come from industry not government. Ben Franklin said "Any society that surrenders its liberties in favor of greater security deserves niether and will lose both".
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