What a field day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly saying, "hooray for our side"

Tuesday, June 23, 2009


Okay, I was going to start with a rant about how the conservative side of the argument is a bunch of wankers for using the Iran issue to attack the President (because they are expecting everybody to forget that Iran already has some pretty heavy sanctions against it, and there's nothing that the US can "increase", we would have to convince the rest of the world to do something, good luck with that). Especially the performance of Lindsey Graham on tonight's Newshour. It just goes to show that the Republican machismo is all swagger and no substance (say, go to the Pentagon and tell them we have to support the Iranian resistance, or ask Congress about passing another spending bill, yeah, it would be all empty rhetoric). (oh, and just because I have to, with the way the president handled it we have fewer dead people on the streets and we have the world with us because he allowed the Supreme Leader, the Revolutionary Council, and their support mechanisms make their mistakes on the world stage without having any credibility to say they were responding to "outside influences")

But then the president came on answering questions from the podium in the Press Room (which I think makes it official that President Obama in his first six months has stood for questions more times than President GW Bush did in his entire eight years) when he started answering questions of the Health Care Proposal.

The question about a "Public Option" quashing all the "free enterprise" insurance out there and driving everybody to the public plan while demolishing the free markets, and oh, maybe everybody will get a car aka Oprah Winfrey (but only a Chrysler or GM). And that's when the president rolled out the main reason why I voted for him. He said, basically, the private insurance companies (and proponents of "totally free enterprise" business) claim that they can provide better service, more attuned to their customers, for a cheaper cost than anything the government could provide so he doesn't buy their argument that a plan run with the supposed government inefficiencies and non-responsiveness to customer needs would run them out of business. Or in other words, he looked at the critics and said, "Logic, ur doing it wrong."

The president called. And did it well. Our president, doing logic right since 2009.


S Andrew Swann said...

That's a yes, but.

Yes, BUT the government can run losses indefinitely while any private sector enterprise has to at least break even or face bankruptcy.

Yes, BUT the government writes the regulatory regime that both entities work under, so it can solve any problems IT has with regulatory burden by changing the rules for itself. The private sector doesn't have that luxury.

Yes, BUT if the Congress goes through on its plan to tax private insurance benefits the private sector has an additional cost to overcome, a cost that's actually subsidizing the public sector.

Steve Buchheit said...

Yes, but private entities have other forms of revenue growth (see reasons why many de-mutualized and became public in the 90s).

Yes, but see (the private sector's) arguments about inefficiencies and incompetence of government bureaucracies. I doubt the "public option bureaucracy" would also be the regulatory arm (as that would be under a finance committee). Also see how laws are made.

Yes, but, speculation at this point. Well, it's not actually a cost on the private sector, but a cost to the individual (who most of us are already paying part of the cost of our insurance). This just increases the cost to the individual. True, it would be an incentive to not go with private insurance, but then any payments to the "public option" insurance, if made by the individual, would be done with income that had already been taxed. And the majority of this argument presumes that once businesses are no longer providing employer based insurance they'll increase their employee's pay with the savings they will have. My guess is that won't happen (as it hasn't yet in any of the businesses that dropped insurance). And the cost to the individual for either the full payment to the public option and the increased tax burden and their part of the insurance they're already paying for will probably be equal. So to the individual, it would still be advantageous to stay in the private sector (as long as the private sector's arguments hold water that they can provide better service cheaper than the government).

Also, if people abandon the "private sector" for the "public option" that subsidy will be seriously cut, which would then undercut the public sector's funding (if they relied on that "subsidy").

Yes, but your arguments are getting better, Steve. I appreciate that.

S Andrew Swann said...

1) So in order to compete with the government, the private sector enterprises have to make money by other means than providing health care? Why should I keep providing insurance at a loss if I have other forms of revenue growth?

2) The insurance companies are full of shite when they make arguments about inefficiencies and incompetence of government bureaucracies. Just as full of shite as the folks who claim some moral transcendence for state and/or nonprofits. Incompetence and inefficiency are a RESULT of bureaucracy and directly proportional to its size. Public/private sector isn't even an issue there.

Also, the Government does a much better job regulating things other than government programs. There may be an attempt to have oversight in Congress, but you really trust a bunch of Congressmen to oversee a program this huge? Day-to-day you'll have one executive agency created with the sole purpose of policing another executive agency.

3) Since it's speculation by folks drafting the legislation, I tend to give it some weight. But I will admit they might a) knuckle under and just tax everyone to pay for it, or b) Ignore the CBO and just pass a bill with no specific funding, and push the bill's implementation past the next congressional election so they can claim credit for saving health care w/o actually paying for it. Both of which are a different post :)

Steve Buchheit said...

1) No, they went private over a decade ago so they could raise funds in a variety of ways not directly tied to premiums (the reason they demutualized). That includes various forms of credit previously unavailable, and the ability to sell stock, and to gain freedom the the regulations they had to perform under as a "mutual". They're already making money from these routes and have been for years (see arguments about how the insurance rate increases are directly related to bond performance and the need to keep "profit margins" for their investors).

2) And they're about to be hoisted by their own petards because that's the exact argument they made in 94.

And incompetence and inefficiency are not a result of bureaucracy, they are a result of lack of accountability. Bureaucracy is a method of dividing work. It's when accountability (to the shareholders of the person using the system, others within the system, and to those overseeing the system and to themselves) is removed that inefficiencies and incompetence become their own reward system.

Some corporations have more byzantine structures than government offices institutionalized in their corporate culture (I know, I've worked for them). It's when those structures and the people who work in them realize that there is 1) no incentive to do competent work, it's not rewarded and 2) there is no penalty for not doing competent work, they're not punished, that it becomes more important to be inefficient (more labor translates to more bodies in a department which is power, or that it's a false state of high production levels which look good on metrics charts) and incompetent (because it is hard work to be competent).

Congress and the Federal Government already regulate larger industries. And they did a fairly good job until the past administration had an internal policy to break the government and installed incompetent managers and people whose job is was to break the agency and politicize it's communications (see FEMA, the number of press officers who had to leave because their behaviors were outed by whistle-blowers, and scandals over falsification of resumes, and that many of the state department workers sent to Iraq had to apply for a passport before they could go which clogged the system for the rest of the civilians).

3) It was a balloon floated and shot down. The continued speculation is being down by the folks involved with the process and intent on scuttling to protect their base. And again, if it becomes necessary, see above comments about where the money comes from and the effects on the overall system.

4) The President has asked Congress to reinstate PAYGO rules to prevent the "passing of the buck."

Also, the CBO estimates were $1 trillion (or I've heard 1.6 from one report, but can't find the link) over 10 years, didn't include the actual effect of a "public option", and is set against an industry that costs the economy $12 trillion a year currently (which makes that $1 trillion less than 1% of overall costs assuming costs won't go up in the private sector world).

S Andrew Swann said...

1) What's the incentive to remain providing insurance if providing insurance loses money? The government can sustain indefinite losses, the private sector can't. The private sector will jettison the portions of the business that lose money, or go bankrupt. Maybe I don't understand your argument?

2) "And incompetence and inefficiency are not a result of bureaucracy, they are a result of lack of accountability."

Bureaucracy is a method to diffuse responsibility and limit accountability. The larger the organization, the more diffuse it all becomes. this is why customer service is much better at a corner hardware store than at Lowe's.

And you act as if the examples you cite from the prior administration were an exception, and that all administrations before or since would never politicize a government agency. Let's assume a future Jeb Bush administration. Does government intervention seem so palatable then?

3) I will believe the president's pay as you go pledge when and if he explicitly threatens to veto a bill that doesn't. (Has he done that?) Or when the Congress produces a bill that's revenue neutral at least as far as the CBO is concerned; unlikely since the way Dodd and Pelosi seem to be dealing with the trillion dollar figure is by attempting to discredit the CBO.

Steve Buchheit said...

1) Yes, I think we're having a sandbox conversation here.

2) It's also because you're dealing with a direct stakeholder of the local hardware store. (as an aside, I've experienced excellent help at Home Depot with someone who took a half hour to work with me through a project, and I've also tried to get an associates attention and have them all avoid me when they see me coming - and I believe you've had good service at a different Lowes)

2b) Cite previous examples please. I can cite NASA, FEMA, the Justice Department, judicial appointments (political since Reagan, fair enough, but taken to an extreme under W), Department of Energy, EPA, and a host of other alphabet soup departments recently politicized by the previous administration (and here I am talking about subverting the career staff, firing dissenters, and controlling their communications offices to include rewriting reports without the consent of the authors).

And in this case, yes, I'm perfectly fine with a Jeb Bush administration being handed a functioning health care system to run.

You know me better than that to try that argument, Steve. With that one you're grasping at straws. And yes, I do want Obama to roll back some of the more egregious grabs of power the previous administration took and I'm pissed he hasn't moved faster on them.

The only spending bill to come up after the President's call for reinstatement of PAYGO is the supplemental (which is normally outside the normal budgeting rules anyway, but the president has called for a complete and open accounting - ie. adding the money in to the figures, on the war in regard to the actual budget numbers used, which is better than any previous administrations' handling of supplementals). We'll see how far the committees go with next year's budget process (which has already had issues trying to find the money, and which is the major stumbling block of the health care reform and that $1 trillion).