Thursday, March 29, 2012

The Difference between Healthcare Insurance and Broccoli Markets

Democrats and the Obama administration have seriously if not fatally fumbled on the simple answer to a question Justice Scalia posed:

"Could you define the market -- everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli?"

According to Senator John Kerry, "Like it or not, at some point in our lives, every single person will receive healthcare." That is a terrible answer.

Solicitor General Verrilli, the person the Obama administration entrusted to make the case for the individual mandate responded to Scalia, saying "if you go in and -- and seek to obtain a product or service, you will get it even if you can't pay for it." But he didn't finish the thought and missed the heart of the distinction.

It is not that broccoli is different from healthcare because it is not about the nature of the product but the nature of their markets. It is not that everyone needs healthcare because again this is about the product and not the market. It is not even that people can get healthcare without having to pay for it. This begins to talk about the market, but it doesn't say what is it about such a market that may invoke the government's authority to regulate commerce.

What he ought to have said is that people can get healthcare without having to pay for it and the rest of us who do buy insurance must. Those of us who are paying for health insurance are forced to subsidize those who do not. This, if anything, is what would invite government regulation.

Recognizing that the health-care industry suffers from a free-riding problem helps us pinpoint two general solutions. 1. We get rid of the law that creates the free-riding problem. 2. Or we enact a law that closes the free-riding loophole -- and that is the individual mandate of the Affordable Healthcare Act, or "Obamacare."

What is the law that creates the free-riding problem? It is the Emergency Medical Treatment and Active Labor Act (EMTALA) of 1986 which requires that hospitals provide emergency care to anyone seeking it regardless of ability to pay. Now, why would millions of Americans buy health insurance voluntarily if we can get it for free? Actually, this is the law that small government conservatives ought to be challenging. This is what causes the problem; Obamacare is only the fix.

Yet for whatever reason, we have decided as a society that we will not engage in patient dumping. Maybe we should, maybe we shouldn't, but statutory law already accepts that there is something different about the healthcare product from broccoli. No point harping on that argument. But liberals and Obama are too fixated on this line of reasoning because they are too quick to use the victim-centered approach to selling their political programs. Oh, those poor 40 million Americans without health-care insurance, they say.

But they are shooting themselves in their empathetic feet this time. It is not those poor 40 million Americans. It is those free-riding 40 million Americans who could and have gotten healthcare for free and made everyone else pay for it that necessitates regulation of an industry bloated and rendered inefficient by free-riding.

The free-riding problem reaches deep into our pockets -- at least for those who have health insurance. Unregulated commerce can be coercive too, not just "individual mandates." Can we really expect someone who doesn't buy health insurance (and therefore who does not, allegedly, perform an action) never to seek free services in an emergency room when the law says s/he can? Maybe we won't need Obamacare if, as Madison intoned in Federalist 51, "men were angels." If we won't go in for a free service when we haven't paid for it.

But we are not angels. And that is why Publius proposed a federal government to, among other things, regulate inter-state commerce. The Solicitor General should have framed the debate in terms of the Emergency Medical Treatment and Active Labor Act (EMTALA). Does the Court want to strike that law down? If the answer is "no," then we have a free-riding loophole that only the government can close. Yes, the individual mandate is perhaps constitutionally novel, but so is the EMTALA. But no one is challenging the Emergency Medical Treatment and Active Labor Act before the Court now, is there?

Saturday, March 24, 2012

Rick Santorum wins in Louisiana

Rick Santorum had a great night, but he would need to win 70 percent of the delegates moving forward to unseat frontrunner Mitt Romney. That's not going to happen, but it'll be a painful road toward the increasingly inevitable. As late in this game, powerful conservatives like Thomas Sowell, Rush Limbaugh, and Tony Perkins are still advocating for Rick Santorum and other non-moderate candidates. Every day they continue to do this, they make less likely confident predictions from outside the beltway that Republicans will come together in the Fall against Obama.

The problem could go away if Rick Santorum bowed out. But he has absolutely no reason to. At worst he would be a Hillary Clinton. A serious challenger to the eventual nominee, someone who ran a very credible campaign, the candidate all eyes will turn to first in the next nomination race. Since all the benefits accrue specifically to Santorum and all the cost are diffused across the entire party, the candidate is here to stay for as long as Romney has not clinched his 1144th delegate.

This means that Romney would not be able to turn to a frontal, undistracted campaign against Obama just when Americans check out, tune out, and head to the beaches in Summer. Most Americans would have made up their minds about their vote by then, and there may not be enough time between September and November for the constant barrage of negative messages and psychological massaging to convince Independents that Obama is so bad that he needs to be fired.

The Republican "establishment," otherwise read as Romney's supporters, fear this more than anything, and for the love of God, no pun intended, simply do not understand why Tea Partiers and Southern evangelicals are continuing on the road to electoral perdition. Yet while resentments are building and intra-party strife is festering, it not the moderate Republicans but the Rush Limbaughs of the world who are ironically assuming that an upper-crust, French-speaking Mormon from the Northeast who entered the 1 percent by way of Wall Street would be able to put Humpty Dumpty together again before the party faces Barack Obama. Hubris!

Next up are Washington, DC and Wisconsin. That means relatively cash-strapped Rick Santorum now has a windfall of a week and some to gloat over his victory in Louisiana, and consolidate the narrative that he is a credible candidate and the truly conservative alternative to Romney. Yet each time the Republican Party has thrown an anti-Romney candidate a lifeline -- and doing so has been the leitmotif of Campaign 2012 -- it has deprived itself of one in the real contest that is to determine the eventual occupant of the White House.

All this is also to say that we are witnessing the maturation of American conservatism. For years observers have described liberalism as a bloated tent filled with too many strange bedfellows. But all we were saying is that a dominant ideology necessary co-opts many disparate factions in order to form a governing majority. Finally, American conservatism, nearly 60, is big enough to have its own internecine feuds played out in the public square (and not just in the National Review). But conservatives must also learn that no majority is too big to fail. Liberals, defeated in a string of elections in the 1980s, came to their senses and nominated a "Third Way" Democrat in 1992. Conservatives too shall have to come to terms with the iron law of American electoral politics: moderate or mortify.

Monday, March 12, 2012

Obama's Star is Rising

At this time four years ago, Senators Hillary Clinton and Barack Obama were asking Democratic primary voters to consider the question, "who would be the better president?" This year, Republican candidates are asking their electorate to consider, "who would be worse?" This contrast explains why President Obama has so far resisted the considerable headwind against his re-election.

Although Romney hasn't locked up the nomination yet, he is the default nominee because nobody else has a clear path to reach the 1144 candidates needed. Romney now has 434 delegates, more than all the other candidates combined, but he's not even halfway there. Ironically, ponderously winning the nomination by a slow trickle of delegates though the Spring and into Summer makes Romney weaker than if he had been an underdog who fought his way to the nomination. Instead, with a rebuke here (Iowa) and a rebuke there (South Carolina), Romney's steady hobble to the nomination looks nothing like the sure-footed candidacies of Richard Nixon (1968) or George Bush (1988). Romney's tardy move toward Tampa matters because, with the exception of 1992 and 2008, it has been a pattern of American politics since 1964 that whichever candidates wraps up his party's nomination first also wins the White House.

Having three anti-Romneys also doesn't help, because the war of attrition tearing at Romney's side looks nothing like the epic battle between two very serious candidates on the Democratic side in 2008, Hillary Clinton and Barack Obama. Meanwhile, Republican voters are tuning out because of the ugly internecine feud at a time when the party ought to be drumming up enthusiasm for the Fall. All told, the RNC's turn to proportional representation for the earlier primaries in this year's schedule has meant that an already weak field of candidates will yield one among them even more bereft of star power and pizazz than he had begun with. Romney's best hope looking ahead is that he wins convincingly enough in Alabama this Tuesday so that he shames the Southern candidate, Newt Gingrich, out of the race. It may be bluster, however, but Gingrich has pledged to go "all the way to Tampa."

All this points to a very negative fall general election campaign, because the president is the only factor that reliably unites all factions of the Republican party. With the economy improving, the clearest Republican way into the White House is a relentless attack on Barack Obama, even if it means invoking implicit racial animus -- such as the idea that Obama is a "food stamp president" -- if necessary. But some conservative commentators are no longer sure if even that strategy will work. Who would have thought that for reasons beyond his own doing two years after the Tea Party insurgency that gave the president a shellacking, Obama is now in the best position he has been for a second term since his inauguration.