This is from Obama’s press conference yesterday:
President Barack Obama on Tuesday squared off with the insurance lobby over industry charges that a government health plan he backs would dismantle the employer coverage Americans have relied on for a half-century and overtake the system….
“If private insurers say that the marketplace provides the best quality health care … then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business?” Obama said in response to a question at a White House news conference.
“That’s not logical,” he scoffed, responding to an industry warning that government competition would destabilize the employer system that now covers more than 160 million people.
As usual when Obama has to respond to a serious criticism, he acts like a snarky left-wing blogger rather than a serious adult, throwing off a one-liner that seems to his die-hard supporters like a clever parody of Republican arguments but doesn’t stand up to even the most minimal of scrutiny.
Typically, it’s pointless to debate whether Obama is being astoundingly ignorant or deliberately mendacious; the point is that no sane person could defend his response. Daffyd offers a long list of screamingly obvious ways in which the private sector would be unable to compete with a government plan even though the government plan is inefficiently run, including the obvious-to-everyone-but-Obama fact that a profit-making enterprise has to make a profit, whereas a government agency or government-sponsored entity can afford to lose money pretty much indefinitely (Francis Cianfrocca points out to me that the proposed new healthcare GSE, which he refers to as the Consumer Health Management Corporation or “Charlie Mac,” would start with something on the order of $10 billion in capitalization, many multiples larger than the market cap of even large insurers, and with an endless credit line from Uncle Sam). There is even – you may know this, but presumably Obama does not – a whole body of antitrust law dedicated to preventing large companies in certain circumstances from driving competitors out of business by undercutting their prices to sell at a loss, then jacking prices up when the competition is dead and buried. Profit-making private entities don’t actually act like that very often, for obvious reasons: but governments can and do, at the taxpayer’s expense. As Phil Klein notes, one of the main arguments by supporters of the government plan is that it will use its vast size to obtain cost savings at the expense of health care providers (doctors, hospitals, drug companies, all of which are presumed to continue providing the same level of goods and services without regard to profit motive), cost savings that far smaller private insurers could not obtain. That’s an argument Obama himself has made repeatedly, yet he now professes ignorance of it. Because, of course, he retains at all times the confidence that nobody will ever call him on this sort of thing.