The Obama Watch

Obama’s Shell Game

Pretending to deregulate while siccing the EPA and wildlly inflating the number of Americans with "pre-existing conditions."

By 1.19.11

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The attempted rebranding of Barack Obama following his November "shellacking" has begun in earnest with President Obama going to those evil capitalists at the Wall Street Journal -- instead of his New York Times erstwhile fellow travelers -- with an op-ed entitled "Toward a 21st-Century Regulatory System" in which he professes his appreciation for "America's free market" and "vibrant entrepreneurialism" while explaining Wednesday's Executive Order designed to "improve regulation and regulatory review."

While the president uses the left's weasel-word "balance" four times in his op-ed, his tone is remarkable for its focus on economic growth ("growth" used four times) and the detrimental impact to that growth caused by government regulation.

Obama says he and his administration are "making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb," giving an example of the EPA's regulation of saccharin as a dangerous chemical: "Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month."

Obama also puts on his newly acquired pro-capitalism mask when talking about the sheer burden of regulation:

We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for -- and reduce -- the burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.

Unfortunately, despite the laudable sentiment contained in the president's words, it's difficult to take Obama 2.0 seriously. In particular, is the American public, especially our entrepreneurs, supposed to sing the praises of Obama's claimed conversion from class warfare redistributionist to proto-capitalist while his signature "accomplishment," commonly known as Obamacare, is the single biggest small-business-killing piece of legislation in generations?

Should we believe that the president actually wants to rein in the same EPA that is trying to implement economy-destroying carbon taxes despite the inability of the Democrats, even when they had massive majorities in both chambers of Congress, to get the left's beloved cap-and-tax bill to the president's desk?

Can we rely on an administration which, though the Department of the Interior, is doing everything possible to hinder domestic offshore oil drilling while Americans' fuel prices have been steadily, painfully climbing?

Obama's says that his move to "modernize our regulations" will "make our economy stronger and more competitive." But while Obamacare and the administration's energy price-increasing policy choices persist, tinkering with our rule-making procedures is like putting higher octane fuel into a car which you've just chained to the ground. Sure, the better fuel could help -- once the true impediments to movement are removed.

Perhaps it's no surprise that on the same day Obama announced his Executive Order -- and the day before the House of Representatives is expected to vote on a repeal of Obamacare -- the Department of Health and Human Services released a study subtitled "129 million people could be denied affordable coverage" without Obamacare because of pre-existing conditions.

It's a transparently political report, not least due to its use of "could" in both its title, "At Risk: Pre-Existing Conditions Could Affect 1 in 2 Americans" and subtitle, as even their own data show a range of people who may have pre-existing conditions between 50 and 129 million, with -- of course -- the high end of the range quoted by the breathless parrots in the media. In any other circumstance (except perhaps with claims of man-made global warming), the media would be rightly skeptical of a government agency giving a range so wide as to demonstrate the "data" to be what those of us who actually rely on data for living call SWAG -- a stupid (or scientific) wild-ass guess.

As the Obama Administration is chaining the engine of the economy ever more securely to the concrete by signaling its refusal to allow any important modification to Obamacare, a spokesman for America's Health Insurance Plans says that the report "exaggerates the number of people who are impacted," adding that most Americans (a) already have insurance, (b) would only be at risk if they changed coverage, (c) even then only if they went into the individual market because people getting insurance through company plans are generally guaranteed coverage even with pre-existing conditions, and (d) "Nine out of ten people who apply for coverage in the individual market are offered a policy."

Even the HHS study says that "as many as 82 million Americans with employer-based coverage have a pre-existing condition." In other words, two-thirds of the people they claim "could" be victims of the insurance market actually have coverage already. HHS correctly notes that "the need for individual market coverage has increased as job-based insurance has decreased" but somehow misses two key points: First, that job-based insurance has decreased because of government action (both because of Obamacare and because of unemployment made worse by most of Obama's major "achievements"), and second that individual market coverage could be substantially improved by allowing interstate competition for customers and equalizing the tax treatment of health insurance between companies and the self-employed. In other words, most of the problems with health insurance are due to a failure of government, not a failure of a supposedly free market, something health insurance has essentially never seen.

The issue of "pre-existing conditions" is worthy of its own analysis, not just economic but also moral. In short, covering pre-existing conditions for someone who has not, or at least not recently, been insured, is not insurance; it's welfare. There's a reason it is illegal for someone to apply for car insurance just after wrecking his Porsche and trying to make a claim for a new Carrera 4S: it is simply forcing others to pay for his carelessness or misfortune -- and whichever it is, pre-existing conditions are not "society's" responsibility despite cries from the left that "it's different with health."

President Obama's op-ed and corresponding Executive Order as fine as far as they go, but they don't go nearly far enough. Yes, avoiding "excessive, inconsistent, and redundant" regulation add octane to the economy's fuel tank. But as long as Obamacare and this administration's energy policies keep the economy chained to the ground, we're not going anywhere fast.

In the meantime, it is difficult to see Obama 2.0's new business-friendly façade and hiring of a "pro-business" Chief of Staff as anything other than trying to avoid Shellacking 2.0 just under two years from now.

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About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA on Saturday mornings from 6 AM to 9 AM. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.