StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



The Closing Of The Conservative Mind, Some Of Them

25 Mar 2010
Posted by Andrew Samwick

What distresses me most about Bruce's post is not that David Frum needs to find a new home -- he's talented and will land somewhere.  It is the juxtaposition of the AEI position on health care reform -- speak no non-evil -- with this bit from Patrick Ruffini, a rising star among Republican activists (h/t Andrew Sullivan):

When it comes to health care policy, conservatives have been seriously outgunned. And I say this in all fairness to the friends I have who work night and day on free market solutions to health care. On economics, you always know what the conservative answer is: tax cuts and generally hands-off regulatory policies to spur economic growth. No matter how good the Democrats' promises sound, we return to these simple, pro-growth touchtones that resonate with a majority of Americans who intuitively get that you can't micromanage your way to a better future. 

On health care, I have no idea what our basic guiding principle is. Seriously, I don't. 

We have tried ineffectively to stretch free market rhetoric to health care without appreciating that health care is already too far removed from a free market for the analogy to make sense. Real markets are sensitive to price. Health care isn't. The insurance companies hide the cost of actual care from the consumer. 

What we have lacked in this debate is a simple clarion call to address an aching need -- bringing free market principles to bear to improve tangible health outcomes.

First, it is crazy to say that he's got no idea on "our basic guiding principle."  What AEI has been distributing on health care reform is the Cogan, Hubbard, and Kessler framework, most recently expressed in this WSJ op-ed from one month ago. He has to have seen that, and it would do in a pinch. Second, he could cast a wider net and realize the the key problem, for everyone who now needs or may ever need health insurance, is the problem of excluding pre-existing conditions by health insurance companies.  The Republicans were "outgunned" because they failed to recognize this fundamental issue and produce a constructive plan to address it.  As I proposed it eight months ago:

  1. Community rating
  2. Guaranteed issue
  3. Ex post risk adjustment
  4. An individual mandate, with Medicaid for a fee as the backup option

It turns out that in the intervening eight months, the Democrats figured out most of that and put it in the Senate bill.  It is more expensive and intrusive than I would have liked, but they got most of the right answer.  The only victory for the Republicans is that the public option -- literally, Medicare for a fee -- from the House bill did not become law.  If the Republicans decide to run on the repeal of the law, then that will compound their misery.

Not so sure about that.

Not so sure about that. Henninger this week in the WSJ claims that a first class hospital in India performs cardiac procedures for one-tenth the cost in the States. Maybe "the market" for health care is bigger than we think, and maybe worldwide providers are willing to compete on price and quality.

Think of that modern miracle---the American grocery store---and all the bounty and selection that it provides us without government guidance.

Are we so bereft of imagination that we cannot contemplate how competition might do the same in health care.

We are led by pygmies.


"Think of that modern

"Think of that modern miracle---the American grocery store---and all the bounty and selection that it provides us without government guidance."

You mean the grocery store that sells food grown and marketed through a complicated system of federal price support programs, inspected by the USDA, the FDA and, increasingly, by US Customs, transported on the federal interstate highway system, and purchased with credit cards issued by banks protected from their own stupidity by the Federal Reserve, or, sometimes, with US Food Stamps?

Yeah, thank God the government kept its hands off of that one.


"What we have lacked in this

"What we have lacked in this debate is a simple clarion call to address an aching need -- bringing free market principles to bear to improve tangible health outcomes."

Which is something a lot of intelligent liberals also understand. Right now, the health care sector operates in a pseudomarket that looks (and acts) like something GOSPLAN would have dreamed up on an off day. And I'm terrified HCR is going to make things worse. It's like trying to split the difference between single payer and true, market-driven reform -- in a situation in which splitting the difference could mean getting the worst of both worlds.

But promoting tort reform and health care saving accounts as the cure for all problems isn't exactly a credible alternative.

The bottom line is that the GOP doesn't WANT to fix health care - it's not "their" issue, now that the teabaggers have made it the first battle of the next American Revolution, it's never going to be

Besides, making the case for market reform would mean telling the folks on Medicare that, no, government can't keep its hands off it. And what right-thinking free market Republican wants to tamper with such a wonderfully popular federal entitlement program?

why, that would almost be socialism!


"The only victory for the

"The only victory for the Republicans is that the public option -- literally, Medicare for a fee -- from the House bill did not become law."

There seems to be a bit of illogic here: Andrew says the HCR bill ultimately included "most" of the Cogan, Hubbard, Kessler framework -- i.e. a plan offered by a group of Republican economists at a Republican think tank.

Seems to me if that's the case, then the failure to include the public option was the only Republican defeat -- not the only victory.

Unless Republican is now simply synonymous with teabagger.


Not Most of CHK

Most of the 4 principles that I laid out.


My complements to Mr. Frum!

It seems to me that David Frum has shown his meddle and, above all, his courage these past few days, and stood up to the Republican Party/Fox/Talk Radio/Tea Party "Red Guards" (to hurl out a neo-Maoist analogy) and struck a blow for conservative intellectual honesty! With any luck, his blow for the marketplace of ideas represents the beginning of a resurgence of authentic conservative thought.

Sorry about Frum's purge from AEI, but here's hoping that it will be a great chance at independence for him. If he he does keep up speaking out with a clear voice of real conservatism and doesn't "recant," and hopefully he won't wind up in some Glenn-Beckian Tea Party re-education camp, he may be able to lead the path toward a real conservative resurgence.

I salute David Frum! Keep up the fight!


Price Publication and Timetable

1. I have read that the new law requires hospitals (if not other providers) to post prices for procedures. Surely that's an improvement in the market (though, obviously, no magic bullet)?

2. You write:

It turns out that in the intervening eight months, the Democrats figured out most of that and put it in the Senate bill.

Uh, the 4 prongs of what you say you proposed 8 months ago were the basis for 2 of the 3 health plans proposed during the Democratic primary, spurred on by John Edwards's original proposal back at the end of 2007 (if I'm remembering the dates correctly). And, really, it's not all that different from the Dole counterplan from 1993-94, no?

The Democratic plans making their way through the House and Senate always had some form of those 4 characteristics, so it shouldn't be surprising that the end result included everything but the public option.




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