Worse Than Obamacare
Barack Obama was still a freshman in the Illinois state Senate in 1998, an era when the technologically advanced were dialing up the World Wide Web over 56k modems and Netscape Navigator. So you can understand why Democratic partisans have gotten a little shirty over the unearthing of notes by Diana Blair, a personal friend of Hillary Clinton, about Monica Lewinsky, and by Kentucky Sen. Rand Paul’s recent efforts to re-litigate the Lewinsky scandal. It is, after all, pretty old news.
Then again, it’s no older than Mitt Romney’s tenure at Bain Capital — a subject that absolutely fascinated Democratic partisans not so long ago. It’s certainly fresher news than Richard Nixon. Yet when tapes released in 2010 revealed Nixon spouting nonsense about Jews, blacks, Italians and others back in the 1970s, it was Big News. And Nixon wasn’t even running for public office any longer in 2010. (I checked!)
This doesn’t mean Paul ought to drag Bill Clinton’s indiscretions back into public light. For one thing, Clinton isn’t running for anything anymore, either. For another — and Republicans probably have repressed their memories of this — Gallup reports that “as the Lewinsky situation unfolded, Clinton’s job approval went up, not down, and his ratings remained high for the duration of the impeachment proceedings.” These days the former president is such a beloved figure that bad-mouthing him for anything is like cussing out the Dalai Lama for not wearing a tux to a black-tie dinner: Even if you’re technically right, you still lose.
Besides, Republicans are supposed to care about individual responsibility, and it’s hard to see how Hillary was individually responsible for her husband acting like a hound dog. If Republicans want to rake her over some old coals, then they have much better material to use: Hillarycare.
The ink was still drying on Bill Clinton’s White House stationery in January of 1993 when he created a special health care task force and put his wife in charge of it. The task force was supposed to do nothing less than transform the entire American health-care system with a plan to guarantee universal coverage for all. And it was supposed to lower medical spending because, as Hillary Clinton put it a few months later, “too many people have made too much money” providing health care in the U.S.
Much about the task force was secret. It met in secret; its membership was secret; its deliberations were secret. And while it met with various health-care stakeholders, the meetings were described by the chairman of Physicians for a National Health Program as “a magnificent exercise in pseudo-openness.” The task force was also gargantuan: As The New York Times reported, “with more than 500 people, the staff was bigger than 99 percent of all businesses in the United States.”
That huge staff produced a huge bill: A 1,342-page proposal “of sweeping scope and complexity,” as one academic journal later put it, that would have corralled all Americans into regional health cooperatives. The cooperatives were to negotiate with insurers, set standards for insurance coverage, collect the premiums, negotiate with doctors and hospitals, regulate prices and cap health-care spending.
The plan would have required every employer to provide health insurance for all employees, required every citizen to have insurance, and done it all through a health maintenance organization (HMO) model. Everything would be supervised by a seven-member National Health Board.
Reviews were less than glowing. “Under these plans, people are driven like cattle from doctor to doctor,” said a Richmond-area doctor, who described the proposal as a “huge, megalithic system.”
“Not since Franklin Roosevelt’s War Production Board,” said The Economist, “has it been suggested that so large a part of the American economy should suddenly be brought under government control.” Even some of those on the task force thought it was excessive: “I can think of parallels in wartime,” read one internal memo released years later, “but I have trouble coming up with a precedent in our peacetime history for such broad and centralized control over a sector of the economy.”
A huge public-relations battle between supporters and opponents ensued. It ended in a rout. Hillarycare was tossed onto the ash-heap of history — but it still had profound consequences. The next year, Republicans won control of both the House and Senate for the first time in four decades, in no small part on the strength of public reaction to Hillarycare.
When she ran for president against Obama a decade and a half later, Hillary rolled out a slightly more modest health-care plan. This time she pitched it, very carefully, as the “American Health Choices Plan” — despite the fact that it reduced choices by mandating coverage, forbidding insurers to deny it and imposing price controls. Yet as The Washington Post reported at the time, Clinton “emphasized that if people … currently like their health-care plan, her proposal does not require them to change it.” (Now you know where President Obama got that idea.)
More Americans disapprove of Obamacare than approve of it. This has been the consistent finding since the law first took effect. It is not soothing to realize that, if Hillary Clinton had gotten her way, America now would be saddled with something even worse.
Let’s Hear It for Price-Gouging
Snow, sleet, and freezing rain weren’t the only things to come down last week. So did a weather-related proclamation from Mark Herring. “Attorney General Herring Highlights Price Gouging Protections Ahead of Winter Storm,” it read. “Laws protect consumers from ‘unconscionable prices’ for ‘necessary goods and services’ during emergencies.”
Virginia’s Post-Disaster Anti-Price Gouging Act has now been on the books for 10 years — which is 10 years too long. The measure hasn’t been used often; Virginia last settled a case in early 2010, regarding an incident from Hurricane Ike in 2008. Still, every time the law is put to use — or even invoked — a few million brain cells die.
That’s because so-called price gouging during an emergency serves two very useful purposes: It keeps people from getting too greedy, and it makes strangers rush to help the stricken.
Take one of the price-gouging cases to arise from Hurricane Ike. Bill Stone, the owner of Bucko’s Pantry in Radford, Virginia, was accused of gouging customers because he briefly jacked up gasoline prices to as much as $5.99 a gallon. He did that because the supply he got from refueling trucks had dropped 70 percent, and demand was going through the roof.
“Area and state consumers were in what can only be described as panic buying,” ran a typical news report at the time. “The crunch at the Wal-Mart and some other local stations began Thursday night as motorists began topping off their tanks and filled cans of gasoline for their personal reserves.”
In fact, so many people in the region bought so much gasoline ahead of the storm that many stations ran dry. But Bucko’s didn’t run out, because during the short time its prices went way up, people bought much less gas there. Bucko’s high prices rationed gasoline in a highly efficient manner. If everyone had done the same thing, then consumers wouldn’t have hoarded fuel, and there would have been enough to go around for everyone.
Virginia passed its price-gouging law the year after another Hurricane — 2003’s Isabel, which slammed into the state hard and caused widespread power outages. Some people had generators, but many didn’t. So one enterprising Richmonder bought 18 generators in North Carolina to resell back home through the classified ads. Another man drove down from Buffalo, New York, to sell generators at more than twice their normal price. Jack and Kim Shepherdson drove up from Kentucky to sell generators and chain saws for which they could ask top dollar.
And it was a good thing they did — because many area hardware stores had sold out of generators even before Isabel roared through. The people who bought generators and other equipment from these “speculators” might have groused about gouging, but they still considered themselves better off after making the transaction than before. If they felt otherwise, then they wouldn’t buy. That’s why every such exchange is, to use a hoary business cliché, a win-win scenario.
Granted, charitable individuals and companies routinely rush supplies to disaster-stricken areas. Indeed, countless volunteer organizations exist for precisely such a purpose, and many more leap to lend aid in the most extreme instances. Such efforts rarely suffice to meet the aggregate need. Hence, high prices — price-gouging — act as a force multiplier by enlisting yet more help from people who are either unmoved by compassion or unable to give help for free. The high prices also give for-profit companies such as hardware stores an incentive to ship goods where they’re most needed.
This is Econ 101 for Dummies: Higher prices are a natural response to surging demand. They (a) impede consumption and (b) encourage resupply. Yet Virginia’s price-gouging act is written with the assumption that there is some magical line prices shouldn’t cross. Below the line, they are simply the result of regular market forces. Above the line, they are “unscrupulous,” “artificially inflated,” and “exploitative.”
Where is that imaginary line? Wherever politicians think it should be. And what makes them capable of making such a judgment? Well — nothing, really.
There’s another argument against price-gouging laws that has nothing to do with basic economics and everything to do with fundamental liberty: Government has no business dictating prices in the first place. A proprietor who wants to sell, say, AA batteries for five dollars apiece — or $50 apiece, for that matter — has every right in the world to do so. Just as customers have every right in the world to go someplace else.
Market transactions should be arrived at through mutual consent — not the threat of force. After all, if a proprietor has no right to set his own prices, then what possible right could some third party have to set them for him?