Shame the Devil

On October 12, America's Health Insurance Plans, a trade association for the health insurance industry, released a report they had commissioned from PricewaterhouseCoopers. This report (pdf here) examined the Senate Finance Committee health care/insurance reform proposal (the Baucus bill) and concluded:

There are four provisions included in the Senate Finance Committee proposal that could increase private health insurance premiums above the levels projected under current law:

- Insurance market reforms coupled with a weak coverage requirement,
- A new tax on high-cost health care plans,
- Cost-shifting as a result of cuts to Medicare, and
- New taxes on several health care sectors.

The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families, and businesses above what these costs would be in the absence of reform.

The report caused such a stir that President Obama used his weekly radio address, entitled Taking the Insurance Companies on Down the Stretch, to attack health insurance companies. The New York Times described Obama’s speech quite bluntly (emphasis mine):

President Obama mounted a frontal assault on the insurance industry on Saturday, accusing it of using “deceptive and dishonest ads” to derail his health care legislation and threatening to strip the industry of its longstanding exemption from federal antitrust laws.

In response to Obama’s address, Megan McArdle has up two excellent posts about the threatened use of government regulatory powers to punish AHIP for publishing the PwC report. In the first, McArdle makes a vital - and often forgotten - distinction between the Constitutional idea of freedom of the press and our current tendency to think that freedom applies only to those who call themselves journalists (emphasis hers):

Freedom of the press was not a right accorded to the profession of journalism ... Presses were owned by individuals, who engaged in all manner of speech, commercial and non. Freedom of the press was not the freedom to own a newspaper or magazine, and say what you wanted therein. It was the freedom to disseminate written speech.

She points out that those who think the Obama Administration doing this to the insurance companies is a good idea would probably be less enthusiastic if a Republican Administration engaged - or threatened to engage - in similar regulatory endeavors that targeted George Soros’ finances. Or would it be okay, she asks, for a Republican Administration to:

openly declare that if unions didn't stop issuing reports in favor of a higher minimum wage, the administration would have to revisit Taft-Hartley?

Her conclusion seems to me to be inescapable:

... I am very sure that changes in the laws should never be wielded as weapons to punish speech that politicians don't like.

Apparently it’s not as inescapable as I thought. The comments to her post make it crystal clear that a significant number of people are perfectly happy to have our government threaten unpopular industry groups to get them to shut up. McArdle must have been as surprised as I was to see this since she put up a second post in which she attempts again to make her point:

But it is not okay for the administration to say, "If you publish a report saying that our plan will make premiums go up, we will use our regulatory authority in an entirely different matter to punish you." I don't see how that's much different from saying, "If journalists criticize the administration, we will use our commercial speech authority to undercut your ad revenue".

Again there were a lot of commenters who saw nothing wrong with Obama’s threats. They raised all kinds of interesting points about the nature of freedom of the press and free speech and to what extent those apply to associations or corporations. They discussed whether the anti-trust exemption for the insurance industry is a “favor” the government has every right to take away. They even debated whether the insurance companies’ anti-trust exemption helps or hurts competition. In other words, they totally missed the point. Which is pretty simple:

The government should not threaten citizens who publish reports - or run ads or make speeches or send out mailings - that disagree with, criticize, or question the government’s claims.

It really doesn’t matter to me if those who disagree are individuals, political parties, journalists, or trade associations. It doesn’t matter to me if a Philadelphia lawyer could make a case that what Obama and Congress are doing is technically legal. It doesn’t matter to me if every word in the report, ad, speech, or mailing is an outright lie. What matters is that the government should not be threatening to use its regulatory power to silence its critics. This is - or at least should be - intolerable. It’s one thing for the government to decide that the insurance companies’ anti-trust exemption does not serve the national interest and should be revoked; it’s quite another for the government to decide that the insurance companies’ anti-trust exemption makes a handy stick with which to beat the industry to compel its silence. The former is governance; the latter is extortion.

Reading Obama’s comments on the insurance companies reminds me of nothing so much as George W Bush’ comments on the War on Terror. In Obama’s world though it’s the insurance companies who are America’s “evil and ... determined enemy.” It’s the “aggressions and ambitions of the wicked [insurance companies that] must be opposed early, decisively, and collectively, before they threaten us all.” It’s the insurance companies that “would be a threat to every nation and, eventually, to civilization itself.” Obama is “determined to fight this evil, and fight until we're rid of it.” He’s “got a job to do, and that's to explain to the American people the truth.” Bush’s truth was that “we're now facing a new threat”; that of Islamic terrorism; Obama’s truth is that we’re facing the old, old threat of the insurance companies:

The history is clear: for decades rising health care costs have unleashed havoc on families, businesses, and the economy. And for decades, whenever we have tried to reform the system, the insurance companies have done everything in their considerable power to stop us.

Still Obama has “made clear to America, that this great country will not let evil stand.” “We are [near the end] of what I view as a very long struggle against evil.” However this “is not the time to grow complacent” because “America faces an evil and a determined enemy.” Rather “[n]ow is the time to draw the line in the sand against the evil ones.” And just as Bush was confident “good will prevail” so is Obama: “I believe we can. I believe we will.”

The difference is that Bush was demonizing a foreign entity that violently attacked the United States; Obama is demonizing American companies owned and run by American citizens. Bush wanted to mobilize us to fight an outside enemy so he could prevent further attacks; Obama wants to mobilize us to fight each other to so he can achieve a political goal.

And it’s not just the insurance companies. The lengths to which Obama is willing to go to silence them is unprecedented* but the basic message is not new. I’m astonished at how often this Administration has badmouthed its own people. It is not the job of the national government to explain to me that American trade association members and American family doctors and American corporate executives and American small government ralliers and American television employees and American talk show hosts are bad, bad people and I should not trust them or listen to anything they say.

On the other hand, it may well be that the current Administration is not actually running a national government. Rather it’s running a political campaign which unfortunately has the power of the national government behind it. Even worse it may not know there's a difference.

*****

* That whole pitchfork thing was a threat that government would fail to protect the bankers from attack rather than that government itself would attack them.