August 27, 2007

Actually, truth be told, very stupid. Very, very stupid. Unbelievably stupid. Incredibly stupid. Amazingly stupid. Look-up-stupid-in-a-dictionary-and-you'll-find-these-guys'-photos stupid.

I refer to the geniuses at the California Restaurant Association, formerly opposed, as in 2004, to proposed California laws forcing employers to provide health insurance for their employees. After all, they are the ones who would have to pick up the tab for a system of medical socialism that would not and cannot "cover" everyone, in the relevant sense that not all medical demands can be accomodated, even by government, in a world in which resources are limited always and everywhere. No, costs would skyrocket and ubiquitous rationing would replace the system that we have now, as more government meddling would be called upon to fix the problems that government policy has created already.

That was then. Imminent legislative action on Arnold The Governator's health insurance proposal is now. And so the CRA has endorsed a sales tax increase to finance health care for the uninsured, and might consider support for a small payroll tax if that proved to be the only way feasible politically to forge a coalition on the issue. After all, says the CRA President Jot Condie, "We can't just continue to say no."

And why not, precisely? Well, sayeth Comrade Condie, they worry about what might happen if a Democratic governor succeeds Arnold in 2011: "You just don't know what you're going to get in four years under a different governor."

Well, Jot, actually we do. If it is a Democrat, as it almost surely will be, then he/she and the Democratic legislature will call your bet and raise, big time. A sales tax will become bigger and a "small" payroll tax suddenly will balloon. After all, once you give up the principle---if we want real reform, the market should be allowed to work, with some targeted provisions for the poor---and accept an employer mandate, then there is no limit in principle to the coverage that employers should be required to offer their employees. And if you can live with "small" tax increases, then you're just negotiating the price, as the old joke goes, and the sky is the limit when you're not one of the constituencies that the Legislature and (future) governor care about.

By the way, Jot, the decision last year by you and the Chamber of Commerce and the Business Roundtable and most of the other usual California business community suspects simply to enjoy Arnold's reelection---and not do very much at all to help the down-ballot Republican candidates---isn't looking so shrewd anymore, is it?

And speaking of constituencies, precisely what crisis here rationalizes higher taxes? The poor have Medicaid. The children of the near-poor have SCHIP. We are talking disproportionately about the young and the healthy and the middle class who are without "coverage" either temporarily or by choice, as they do not view health coverage as worth the cost. And why---precisely why---should anyone be forced to take part of their compensation in the form of health insurance anyway? And who in California cannot obtain needed health care? Actually, few if any, as anyone can get care at an emergency room, which may not be very convenient or very efficient, but which is world-class care nonetheless.

Actually, there is a class of people in California who find it increasingly difficult to get care: Medicaid beneficiaries, who are having more and more difficulty finding even primary-care doctors willing to treat them, let alone specialists, because government, which has interest groups rather than customers, always has powerful incentives to squeeze payments to providers at the expense of patient care. Do you think, Jot, that a system of "coverage" for all, mandated by Sacramento politicians, will be any better? If you do, you're even stupider than I thought. Obviously---obviously---price controls will be imposed upon the insurance "coverage" that everyone is required to carry, which means that payments to the doctors and hospitals will be squeezed, and so everyone will be forced into the nirvana that Medicaid recipients already are forced to confront.

Anyone with eyes to see knows that the health care crisis is a creation of government, with the federal tax subsidy for employer-provided health insurance the first culprit among equals. And what about all those state insurance regulatory mandates---California is no slacker in this context, Jot---that drive up the cost of coverage? Why don't you throw your weight behind doing something about that? Specifically: Allowing Californians to buy insurance from insurers in other states? That would be smart, not only for Californians generally, but also for the members of your association. A lot smarter than trying to do a deal with the Sacramento devils. Stupid is as stupid does.

Posted by Benjamin Zycher at August 27, 2007 10:18 AM

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