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BREAKING! The American Political System Does Not Inherently Gravitate Towards Optimal Policy

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And we have yet another article wondering why Prime Minister Obama didn’t just eliminate the American health insurance industry:

So what would be the costs if we had a president willing to nationalize health care now that Obamacare is the law of the land? Since 2009, when single-payer was taken off the table, the stock market has been lifted by the Federal Reserve’s desperate attempts to compensate for fiscal austerity and public and private disinvestment. The Treasury check would have to be bigger today, perhaps on the order of $500 billion – much less if the payoff to shareholders went from colossal to merely enormous, for instance. The public’s return on investment would still be over 30 percent.

The answer, of course, is that Obama didn’t take single payer “off the table.” It was never on the table. The idea that there were 60 — hell, that there were 30 — votes for single payer in the Senate is sheer fantasy. Diaz-Alvarez doesn’t even try to explain how “a president willing to nationalize health care” could have actually gotten the relevant legislation enacted. (Again, given that the answers tend to be self-refuting things like “threaten to primary legislators who aren’t running for anything” or “offer to campaign for candidates in states where you’re enormously unpopular” this is probably for the best.) Rather, this is a teleological argument. Single payer is more efficient, therefore policy outcomes should naturally gravitate in that direction and if they don’t the only explanation must be that the president — the sole meaningful inhabitant of the American political universe — must be obstructing it. I’ve already said enough about this line of argument, but wow.

One final point:

So what would make a self-described market-lover like Obama take such an obvious solution off the table before the discussions even began? As it turns out, Obama is a fan of a very specific kind of market – the kind of complicated, opaque market full of rules, moving parts, variables, exceptions, and complexities that generate lots of opportunities for rent extraction.

Right, it’s Barack Obama who created a high-veto point system that provides lots of opportunities for rentiers to extract payoffs. If he had just made an empty threat to nationalize health care all of the vested interests benefiting from the current system would have just melted away.

The idea that the ACA reflects Barack Obama’s love of complex markets, however, is one reason why exposing the “ACA was just the Republican Heritage Foundation” myth is important. If Obama actually believed that opaque markets were the best way of arranging things, he could have easily followed the Heritage Foundation blueprint and proposed rolling everything — including Medicare and Medicaid — into the exchanges. (He could have also just settled for token quasi-reforms, therefore leaving the same opaque markets in place only with a lot more uninsured.) Between the historic expansion of Medicaid, the preservation of Medicare against an organized Republican campaign to destroy it, and the more stringent regulation of the markets that had to be preserved, the ACA got us as far from inefficient health care markets as was viable within the political context that existed in 2010. This is the kind of thing that’s easy to miss when your strategy for political change is hoping that a benevolent daddy in the White House might give you everything you want someday even if the current one won’t.

As a corrective, I strongly recommend Alex Pareene’s piece on Elizabeth Warren. The White House isn’t where transformations begin; it’s where if they’re successful, they end.

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