Don't stay in bed, unless you can make money in bed. - George Burns

One-Sided Competition

by Hal_10000

I caught some of the Sunday morning chat shows today and watched, with amusement, as the Obama people tried to spin their way around the damning CBO analyses that are showing that Obamacare is going to be outrageously expensive.  I actually felt sorry for Kathleen Sebelius, having to go and defend this turd of a program.  But listening to them triggered a memory.

They are continuing to flog the idea of a “public option”, claiming that it will “keep the insurance companies honest” and spur innovation.  You know ... the same way Freddie and Fannie spurred innovative new loan ideas and kept mortgages companies ...

Oh, wait.

But as I listened to this, I keep saying to myself, “They don’t believe this.  This is nonsense.  These people don’t believe in competition.”

And then I remembered this, from the second Presidential debate.  It was Obama responding to McCain’s idea that insurance companies be allowed to compete across state lines.  The idea is that people in, for example, Illinois—where Barack Obama supported numerous coverage mandates that raised the minimum price of insurance—be allowed to buy insurance in Arizona, which has fewer mandates and therefore cheaper options.

Obama said, in response:

And the reason that it’s a problem to go shopping state by state, you know what insurance companies will do? They will find a state—maybe Arizona, maybe another state—where there are no requirements for you to get cancer screenings, where there are no requirements for you to have to get pre-existing conditions, and they will all set up shop there.

That’s how in banking it works. Everybody goes to Delaware, because they’ve got very—pretty loose laws when it comes to things like credit cards.

And in that situation, what happens is, is that the protections you have, the consumer protections that you need, you’re not going to have available to you.

[Side note: Barack Obama cites Delaware as a state with bad bank regulation.  Good thing he didn’t pick a vice-president from that state who was well known to be in the pocket of ... oh.]

First, note the arrogance and the cynicism of that remark—the only reason, the only reason you have good insurance is because the government has mandated it.  If the states didn’t mandate it, our insurance companies would have us digging through hospital trash for unused vicodin.

Second, what sort of regulatory structure will the “public option” be under?  It will be allowed to compete across state lines in a way that private insurance companies can not.  Of course, given the Democrats’ proclivity for bending over for special interests, that will probably have lots of mandates ... eventually.  After it has bankrupted insurance companies that can’t cook the books and get federal subsidies.

And third—note the implicit statement:  competition is only good when the government does it.  If we allow insurance companies to compete, they will race to the bottom.  Only government competition should be allowed.  Only competition with a subsidized, less-regulated, less-hamstrung statist entity is acceptable to Barack Obama and the Democrats.

Because they don’t really want competition.  They want control.

Comments

Posted by on 07/19/09 at 12:09 PM from

The stupid part of it is that he didn’t even research his statement worth a crap - all the credit card companies are in one of the Dakotas....

Libtards look at states as names for postal codes, they aren’t actually supposed to be different from each other when it comes to laws.  Besides, the only laws that should actually matter are federal ones…

Posted by on 07/19/09 at 11:05 PM from

his statement worth a crap - all the credit card companies are in one of the Dakotas

not true anymore since the feds gutted credit card regulations and only they can regulate them

Posted by on 07/20/09 at 07:21 AM from

not true anymore since the feds gutted credit card regulations and only they can regulate them

When did this happen?

I read up on the whole issue of outrageous interest rates on cards some years back - the courts ruled that you had to play by the rules of the state that issued the card, regardless of what they were where you lived.  North Dakota had no laws limiting interest rates, so many of the bank incorporated their credit card divisions there.

Haven’t kept up on more recent developments that concern that.

Posted by on 07/20/09 at 09:57 AM from

Kind of like if you let car companies do as they please. 

They’ll likely move to states where they can produce cars cheaply, states that are not in the pocket of unions.  And they might produce cars that people want, rather than what the government has deemed they really need. 

That would be anarchy. 

I’m glad Obamas going to save us from both those doomsday scenarios.

Posted by on 07/25/09 at 03:36 AM from

When did this happen?

actually it was more of a judicial fiat than legislation, judges made the decision, Connecticut, and Iowa, and a city I think in CA had laws forbidding ATM owners from charging a fee for the use of the machine, the bank went to court saying this was regulating a bank, the court agreed saying that states could not regulate federal banks, the laws were thrown out, so went the state interest laws.

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