Big Business + Big Labor + Big Government = Universal Health Care?

If history is any guide, Rahm Emanuel has revealed the Obama administration’s strategy to cajole big business into supporting universal health care as the foundation of a New New Deal (See the WSJ: “Emanuel Sets a Challenge,” Nov. 19). The strategy implies a radical expansion of the Federal government’s commitment to social insurance mandates. National unemployment insurance and public pensions, the harbingers (or Trojan horse) of the social welfare state, were passed with similar political strategies in almost every developed democracy during the crises at the end of the 19th century and in the 1930s.

Today, corporate CEOs’ first preference is to remove rising health care costs from their income statements and the attendant liabilities from their balance sheets. Their second preference is to have somebody else pony up to help pay for it. The Democrats’ gambit is to close off the first option and leave the second as the only alternative to doing nothing. Obviously the political architects believe the triumvirate of big business, big labor and big government can steamroll universal health care over special interest opposition. This at a time when the electorate has expressed the lowest approval ratings in history for large public institutions – a level of mistrust that applies to both parties’ stewardship.

Of course, these special interests include individual taxpayers, consumers, and anyone unaffiliated with the big three, which means small business, entrepreneurs and the self-employed--who’ll all get flattened in this scenario. Every taxpayer will be subsidizing the inefficient provision of corporate and public health care and we’ll be told it’s for our own good. The only possible consequence of mandates is the loss of consumer choice and control needed to contain costs. This makes little sense in an expanding world market for private health care. Costs are best reduced by maximizing consumer choice and providing incentives to economize all around. Social insurance should only play a limited role in cases of catastrophic illness or accident. It looks like it’s time to pay attention to what change in Washington will really mean.