Thursday, November 4, 2010

White House Healthcare Stories Ignore Hazlitt's Lesson

The ink is barely dry. The electrons have barely been tallied. The lessons of the election have yet to be learned.

Yet, the White House continues blindly down the path of promoting its unwanted, hopelessly flawed health care law by committing the economic fallacy of ignoring what is unseen. (But I guess that goes hand-in-hand with being blind.)

Today I received the following in an email from Nancy-Ann DeParle, director of the Office of Health Reform:

Health Care Updates

Health care is an issue that’s important to all of us and the new health care law is already helping Americans across the country. Visit the 50 States/50 Stories map to find stories of how the new law is affecting people in your area -- people like Jim Houser, who will be receiving a small business tax credit that will enable him to continue providing health insurance to his employees or Adrienne Lowe who can now stay on her parents’ plan after graduating from college. You can also watch as the President makes a surprise phone call to Gail O’Brien who was without insurance when she was diagnosed with lymphoma and has been able to get coverage through the newly established Pre-Existing Condition Insurance Plan.

These are just a few of the examples of Americans who are benefitting from the Affordable Care Act. Across the nation, the new law is making health care better for millions of Americans.

The Fifty Stories are only the tip of the ice berg--and unless Obama et al start paying attention to what lies below the surface, our country's finances and health care are headed for the same fate as the Titanic.

What is NOT mentioned, of course, are all the jobs which will NOT be created because labor costs will be too high due to the tax and regulatory burdens the law places on employers and businesses.

Or the medical devices, medicines and cures that will NOT be invented.

Or the aspiring young adults who will NOT choose medicine as a career because of decreasing incomes and job satisfaction---caused by government price fixing, paperwork and billing hassles, --to say nothing of the repeated vilification of physicians as greedy and incompetent (in need of ever more practice guidelines and government oversight.)

Or employers who respond to the law's strong financial incentives to drop health insurance coverage for their employees.

Also not mentioned are the number of insurance companies which must either discontinue significant benefits, (unless they get a waiver) raise premiums or go out of business due to the PPACA.

So don't be fooled when the White House tells stories.

Be sure you understand the lesson that Obama, DeParles and the rest of the White House gang either refuse to understand, or worse, understand but choose to ignore:

This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking the secondary consequences.

In this lies the whole difference between good economics [or politics] and bad. The bad economist [or politician] sees only what immediately strikes the eye; the good economist looks beyond. the bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

The distinction may seem obvious...Yet when we enter the filed of public economics, these elementary truths are ignored."

--Henry Hazlitt, Economics in One Lesson

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