Forgive me this stream of consciousness. I had another
topic in mind entirely for this column, but the live coverage of
this health care “summit” has distracted me all day. President
Obama’s superciliousness infuriates me; his insistence on
speaking each time between each speaker is outrageous; his
Democratic colleagues are not much help to him (although, much as
Sen. Dick Durbin of Illinois is smarm personified, his misleading
riff in defense of jackpot justice trial lawyering was,
unfortunately, very effective); yet I can’t help thinking that
the president is winning among his intended audience, which are
the Democrats in Congress. By going on for six full hours about
his plans, all in a reasonable tone of voice, he makes those
plans somehow less scary, no matter how many good licks the
Republicans get in. All he needs to do is to lower the volume,
provide enough reassurance to congressional Democrats that there
is a defensible set of talking points in favor of his
plans (even if it isn’t logically defensible, he makes it sound
politically defensible merely by defending it for so long without
cracking), and keep from making any major gaffes, and…
presto!… Obama convinces wavering Democrats in Congress
that they already have taken all the body blows that can possibly
come, and that they can’t get hurt any worse than they already
have been, so they might as well roll the dice and vote his
way.
Since this is stream of consciousness, I’m not sure I
explained that as well as I could or should, but the point is
this: As long as Obama keeps this alive, he, yes, keeps it alive.
In that tautology lies his continuing chance to get a bill
passed.
It’s like this. I once sat in a meeting of the board of an
organization on which there was a bitter division. I was the
vice-chair; the chairman was on the other side. There were, I
think, nine people on the board, with four (including me) on my
side, three (including the chair) on the other, and two swinging
back and forth with each argument. At one point the chairman said
each side had clearly made its points and that he would call a
vote after he wrapped up his last points. But as he wrapped up,
he could tell that one of the two “swing votes” he thought he was
swaying had, instead, become puzzled, and he wasn’t sure he had
her vote after all. So when he wrapped up, despite my objections,
he decided not to take the vote after all. Instead, he called on
the swing voter to ask what was puzzling her. Well, that
re-opened the whole shebang again. The debate went back and
forth, and then he again promised to finally hold the vote. This
time, because of who had spoken when, I had what should have been
the last word. When I finished, the body language in the room
made it clear I had won the day: Both swing members were about to
vote my way.
So the chairman didn’t take the vote. He started making his
arguments again, and threw in a new wrinkle. And the swing
members started swinging back his way.
Well, this process repeated itself about six more times. No
matter what happened, the chairman would not, absolutely would
not, actually allow the vote to take place until he felt sure
beyond a doubt that he had the majority. It didn’t matter how
many times he promised a vote after “just five more minutes.”
Unless he could win, he wouldn’t hold the vote, and unless he
held the vote, he couldn’t lose. This went on for something like
two hours overtime, late into the night. And when I objected to
his tactics, he said, in effect, “Tough: I’m chairing this
meeting. I decide when we vote.” It sounded an awful lot like
Obama saying “I won.”
Finally, having worn down everybody, the chairman saw that
just in order to get out of there, both of the swing members
would give in. Reading their expressions correctly, he suddenly
called for a vote, and he won, 5-4.
That’s what Obama is doing. But refusing to admit defeat,
by keeping the subject open, he is hoping to find the one window
of opportunity when the stars and votes line up, and then have
Congress pass this health care monstrosity.
What Thursday’s summit did was buy time. It kept everybody
at the table. It kept the issue open. And the whammy vote is
still waiting to be sprung on us.
That said, Obama is so wrong on all this that it is
outrageous. He made a terribly false analogy. He spoke about the
advantages of purchasing power, saying that with greater
purchasing power that supposedly comes from consolidating into a
large purchasing pool, costs will go down. He used Wal-Mart as an
example. But it’s a bad example. What happens with Wal-Mart is
that, once Wal-Mart has driven all of its nearby competition out
of business with low prices, then it slowly hikes its prices —
because it can afford to do so, because it has no competition. At
least to an extent. The other thing Wal-Mart does is it starts
buying more and more from small-shop suppliers, until it becomes
a majority of the suppliers’ business. It then pressures the
suppliers for “exclusive” deals, so that because it
purchases in bulk, it corners the market for that particular
supplier. Then, and only then, once the supplier is hooked, it
unleashes the whammy: It dictates to the supplier the prices at
which it, Wal-Mart, will buy the suppliers’ goods. So while
consumers of Wal-Mart benefit in the short term, the suppliers
all get squeezed. In the long run, the suppliers, the
wholesalers, get squeezed almost out of business — and the
repercussions can spread, so that sometimes a whole community
gets pinched.
This isn’t to knock Wal-Mart. Thank goodness Wal-Mart is
there to provide goods at low prices. And thank goodness that no
community acts entirely in isolation, and that cars exist,
because market forces still apply from community to community and
state to state so that Wal-Mart itself answers to market forces
too. The market is mostly self-correcting. If Wal-Mart squeezes
too much, its supplier runs out of business. That hurts Wal-Mart.
So Wal-Mart answers the market forces. And we all benefit.
But health care cannot work that way, or at least
not with government in the role of Wal-Mart — because the
government does not answer to market forces. We saw that
with Fannie and Freddie. When they “failed,” they didn’t go out
of business: Government just bailed them out. By borrowing from
our children, and by raising taxes or fees. Meanwhile, thousands
of banks were forced to adopt new lending standards that are too
strict, even though their old lending practices were fine under
normal circumstances — and the economy slowed down even more
without enough credit acting as necessary grease for the works.
In short, the downstream consequences were horrible, while Fannie
and Freddie skated.
So too, in health care, will the downstream consequences be
horrible. Once government takes over the huge role of “bulk
purchasing agent,” it faces no real pressure — but the doctors
face pressures, and the remaining insurance companies face
pressures until they go out of business, and the patients face
rationing, and…. and so on.
In short, Obama’s argument is nonsense. Yet even
nonsensical arguments sometimes can start sounding reasonable
when you are tired of a subject — and even if there is only a
small window when the argument is taking hold, the “chairman” or
president can call for a vote right at that moment — especially
in a closed universe such as Congress — and pull out a “win” on
the issue at hand.
The Democrats tried the bulk purchasing argument, by the
way, with the Medicare prescription drug program. In what was
otherwise an execrable new program, Republicans insisted on one
market-based provision: namely, that drug prices be determined by
the market rather than by having government do the negotiating.
Democrats desperately wanted government to negotiate the prices,
through bulk purchasing power. When they couldn’t get their way,
they did some math and tried to insert a provision saying that
government would at least set the premium prices that the private
companies would charge. The premium they wanted to set to start
at $35; they thought that without such price controls, the
premiums would rise astronomically, well above that.
With G.W. Bush in the White House, that premium price
control also was blocked. So, to the dismay of the Dems, the
market was allowed to set premium prices.
Well, lo and behold, what happened? After the first two
years, the average premiums were $24. In other words, the market
worked better by $11 per month – right around a 30 percent
savings for the average participant. What the Democrats thought
would be a great price, $35, and wanted to write into law, turned
out to be an absolutely awful deal — or at least it would have
been awful if it actually had been written into the law.
Obamacare would follow the same model. The bulk purchasing
of government would destroy competition, not add to it. And costs
would go up, not down.
But Obama will keep trying to argue otherwise. And when he
thinks that, by hook or by crook, he finally, at least
temporarily, has the votes in hand, he will try to shove it right
down our throats. Conservatives who want to block it will need
never to let down their guards.
