Tonight I caught part of 60 Minutes and heard the piece on credit default swaps, the "financial weapons of mass destruction" that brought down Wall Street. But the real cause of the financial meltdown was the willingness of Congress to abandon common sense altogether and buy into the argument that business can regulate itself and that government needs to take a hands-off approach to business.
As we look at a long recovery period from the disaster caused by this ill-advised leap of faith, we are now hearing similar arguments from the insurance industry. Government is bad for business. Right. And policemen are bad for the robbery business.
I live in a town that provides all of the typical services for its citizens that people have come to expect from city government. The city provides water and sewer, trash pick-up, brush pick-up, street and sidewalk repairs, police and fire protection, and other amenities. All of these are considered vital services and they are provided and managed by professionals who just happen to work for the local municipal government. The citizens enjoy a high level of service and accountability from elected officials.
In addition to the typical services provided by municipalities, our town also provides its citizens with electric power bought in bulk rates and delivered over lines maintained by the city. The service is not only more economical than electric service from private providers, but the maintenance, management, and customer service are far superior.
A few years ago, our town and two nearby towns decided to look into providing telephone, internet, and cable television service to their citizens. The theory behind the initiative was that these services were critical services that were becoming increasingly important to people and private providers were slow in bringing these services to the area. A study indicated that not only was the project feasible, but cost effective as well. And the cities would provide these services using fiber to the home, allowing unparalleled Internet, cable, and voice connectivity. However, the project would require a referendum to be passed in order to issue bonds to fund the buildout. Projections showed bonds being paid off within three years and customers getting cable, Internet, and phone service for a fraction of the cost of private providers.
AT&T and Comcast launched a massive campaign to derail the referendum. They used the usual arguments that government should not compete with private industry and that taxes would rise when the city failed to meet bondholder obligations. Unfortunately, people believed these lies and voted against their own interests to defeat the referendum. Following their victory at the polls, and knowing that the referendum could not be brought back to life, AT&T and Comcast raised their rates, assured that their customers would have no choice but to accept the higher rate since one more competitor had been eliminated. Contrary to their campaign pamphlets, they were not looking out for people's money. They just wanted to make sure it went into their pockets. This seems to be a common vice with businesses that try to warn us about government.
The health insurance industry knows how tenuous its position really is. It is merely a parasitical, unnecessary business that makes its profits by allocating and minimizing risks. Your health dollars are being spent to ensure the high profits of both the health care industry and the health insurance industry. The role of the health insurance industry as the proverbial middleman is jeopardized by the presence of a public option in a national health care system. Like AT&T and Comcast, the health insurance industry is not your friend. They will lie about government inefficiency, "death panels", waiting for necessary medical care, and being denied medical care in order to scare you into going against your own interests in order to serve theirs. The public option is the only option that makes sense in a national health care plan. We should't even be trying to prop up the health insurance industry, yet even the plan to make health care available through health insurance exchanges is not enough to satisfy the greedy health insurance industry. The health insurance industry is used to having it all and doesn't want any competition from the government. The health insurance industry has had years to reform. It will not happen. We may be stuck with the health insurance industry for a while as we transition to the ideal single payer system, but we cannot and should not sacrifce the public option to allow them to maintain their profit levels. In the end, health care is too important to leave to profit-motivated entities whose only obligations are to their shareholders.