Tuesday, October 20, 2009

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.


Mara said...

I find it interesting that you chose not to include the CYA statement PWC issued following the release of its report (which report AHIP paid PWC to write):

"The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”

In other words, PWC is saying "Don't balme us" we only looked at what we were told to look at, and we ignored the sections we were told to ignore, even if they may lower the costs we've estimated. OUCH!

As for Obama's "threat"? Please. He's threatening to take away a barrier for competition. McCarren Ferguson has been on the hot seat since it was passed in 1945. Good grief, even Reagan called for its appeal. Heck, he broke up AT&T back in 1982 for the very same tactics employed by the insurance companies.

Since when do we support monopolies? Other than baseball, of course.

Grim said...

Consider this:


What, though, is the difference between governing and campaigning? Is it not that campaigning is about acquiring power, and governing is what you do with the power you have acquired?

If the President is still campaigning, then, it is simply because the Presidency does not have enough power to suit him. His alliance with the political party in control of both houses of Congress has also not proved to be enough to let him enact his agenda; so he's campaigning for increased power. That's all: he just wants to be more powerful than he is.

Really, these health insurers are getting off easy next to the banks and auto companies. He's only attempting to pressure them into compliance, rather than buying a stake in them and using it to force compliance. That's his preferred mode. No wonder he's not satisfied.

Mara said...

Grim, I'm not sure what the link to the Hot Air post has to do with the Price Waterhouse Report commissioned by AHIP, or why insurance companies should continue to be exempt from our anti-trust laws but I read it just the same.

The right's has been pushing the takeover proganda for a few months now so it's not new news to me. I think the real news is that it ain't sticking. Despite two wars, unemployment rate the highest since 1982 and a troubling deficit, Obama's favorability ratings (57%) 10 months into his job are still higher than the percentage of people who voted for him--and certainly higher than Bush's was 9 months into his presidency on September 10). Even more interesting is the number of citizens who call themselves Republicans (19%) is at lowest number since the days of Reagan (a fact alone that I find fascinating). Republicans are eager to make the current political division in the country about Obama but honestly, I see it more as a struggle within the Republican party as it tries to find its footing, its voice, and a candidate who can carry the next National election.

Short of any of that materializing, and a meeting of the minds between the conversative wing of the party and the Rockefeller Republicans, I expect the Republican party will undergo a further retrench if not a formal splinter between the two before too long.

Of course, one would never know the depths of the republican party dissension reading Michelle Malkin:)

Grim said...

That's an impressive series of talking points, none of which is relevant to the question of how President Obama handles power or the private sector. (As a Democrat myself, I could hardly care less what happens to Republicans; I'm delighted that conservative Democrats have become a force again, as it is the sole and only thing standing in the way of some of the worst ideas infecting the congressional leadership & the administration.)

However, perhaps this makes the point better. The government is claiming the right to nationalize the internal decision-making process of any company that took TARP funds.

Corporations have been nationalized before, but normally the idea is that the government pays for the privilege by actually purchasing the company -- that's the constitutional way to do it, eminent domain and all that. What has happened here is that the corporations have been given some small percentage of their total value in 'bailout' funds, and in return the government has taken total control of them.

That's not consistent with eminent domain, but it has been accompanied by a propaganda campaign from the administration demonizing profits and corporations. The plan seems to be to seize power by any means available, and to wage an information campaign designed to undermine anyone who might complain. It ought to be alarming; but there's time for the alarm to reach out among the people. The next election is still more than a year away, so there is no rush, and many people aren't currently paying much attention to the politics in Washington.

Elise said...

Mara -

Just in case “I find it interesting” is code for “You were trying to be sneaky and dishonest via selective reporting" - I wasn’t. I cited the part of the study that I thought angered Obama. The same type of disclaimer was attached to the CBO score for the Baucus bill - along with a reminder that the bill isn’t written yet. Anyone looking at something this big who doesn’t CYA is a fool. And there was no need for you to point out “which report AHIP paid PWC to write”; I said explicitly that AHIP had commissioned the PwC report.

I don’t recall Reagan deciding to consider breaking up AT&T because they criticized him.

George W. Bush was elected in November of 2000 with about 48% of the popular vote.
A Gallup poll conducted 9/7-9/10 puts his approval rating at 51%; 3 percentage points higher than his share of the popular vote. (Mara’s cite)

Barack Obama was elected in November of 2008 with about 53% of the popular vote.
A Daily Kos poll conducted 9/7-9/10 puts his approval rating at 56%; 3 percentage points higher than his share of the popular vote. (RealClear Politics)

Obama’s approval rating is currently 57%; his job approval rating is 52%; Congress’ job approval rating is 25%; 40% say the country is headed in the right direction. So voters approve of Obama but think he’s leading them in the wrong direction? (All from RCP)

The poll that shows only 20% (I haven’t seen the 19% poll) identify as Republican found this in its entirety (Link):

Strong Democrat: 21%
Not very strong Democrat: 9%
Independent/Lean Democrat: 12%
Strictly Independent: 19%
Independent/Lean Republican: 11%
Not very strong Republican: 7%
Strong Republican: 13%
Other: 4%
Not sure: 4%

Using the math that tells us only 20% identify themselves as Republicans, we find that 30% identify themselves as Democrats. Twenty percent doesn’t look good for the Republicans but 30% doesn’t look that great for the Democrats either. Leaning Independents, Strict Independents, Other, and Not Sure add up to 50%. In other words, half of the voters surveyed feel no particular attachment to either political party.

If we include the Leaners with the parties they lean toward, the numbers become 31% Republican and 42% Democrat which looks worse for the Republicans (although saying “Only about a third of voters call themseves Republicans” doesn’t have the same oomph as saying “Only 1 in 5 voters call themselves Republicans”). Strict Independents, Not Sure, and Other add up to 27%.

There is no doubt the Republicans are divided but the Democrats have their own problems: those who call themselves “progressives” versus Blue Dogs plus those Democrats who fall somewhere in between. I don’t know how things will work out for either party but it should be interesting to watch.

Elise said...

Fiddling with poll numbers is fun, of course, but it doesn’t really have anything to do with the topic. The issue I was writing about was not the accuracy of the PwC report or the validity of the insurance companies’ anti-trust exemption or how popular Obama is. I was writing about the Administration’s use of what I see as illegitimate tactics against those who oppose it. This is what I meant when I said that many of the commenters to Megan McArdle’s posts on the topic missed the point McArdle was trying to make. A new comment by “bombloader” under McArdle’s second post sums it up very well:

It seems like people are looking at this issue in two different ways. One group is pointing to the letter of the law and saying that because Congress hasn't specifically banned saying certain things, no harm to free speech has occurred. The other is saying its a broader issue of the government throwing its weight around because it can, and thus if this kind of thing becomes common enough we have a problem. Well, I think the second group is right although I'm not sure how big the problem is in this particular case. But overall, this kind of thing risks sending the message that you better not complain to much about government policy or the government will make your life even worse. No, its not a new problem. It didn't start with Bush either-its been a growing problem as government has grown. Hopefully we haven't reached some kind of critical mass where many critics of who ever is currently in charge realize that you should keep your mouth shut lest you become the target of new laws. Either that or Congress abandons all pretense of working for the good of the nation and simply tries to please those who vote for them and punish those who didn't. Neither scenario looks good for the future of the republic.

I agree with “bombloader” and it really doesn’t matter to me if 57% of my fellow voters think otherwise. Might - whether in regulatory threats or poll numbers - doesn’t make right.