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Obamacare: Federal Price Controls You Can Believe In
Calling Obamacare "Carteresque" is an insult to our 39th president.


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Deroy Murdock

Imagine a small town whose sole shoe store suddenly charged $500 for sneakers and $1,000 for wing tips. Shocked and awed, citizens convened a town-hall meeting to decide what to do. Some wanted Congress to establish a Federal Footwear Commission to block “unreasonable” shoe prices. Others suggested inviting outside shoe stores to open on Main Street. They argued that this would expand consumer choices, reduce prices, and, ultimately, persuade even the controversial shoe store to stop giving its former customers sticker shock.

This scenario parallels the debate between Democrats and Republicans over Wellpoint’s anticipated 25 to 39 percent hikes in health premiums for its 800,000 customers in California.

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President Obama’s new reform proposal would launch a Health Insurance Rate Authority. The Health and Human Services secretary could use HIRA to block “unreasonable and unjustified” increases in private premiums. Yes, a one-year, 39 percent hike seems severe. Would a 29 percent increase stop the howling? How about 19? Even 9 percent seems steep. How on earth would Uncle Sam define “reasonable and justified”?

Obama’s critics warn that he is turning into a 21st-century Jimmy Carter. This is unfair to America’s 39th president. Through HIRA, Obama would resurrect the pre-Carter era, when the Interstate Commerce Commission set rail and truck fees and the Civil Aeronautics Board fixed airfares. President Carter signed legislation to declaw these agencies. This unleashed competition, slashed costs, and gave shippers and passengers innovative choices.

“Since passenger deregulation in 1978, airline prices have fallen 44.9 percent in real terms according to the Air Transport Association,” the Competitive Enterprise Institute’s Braden Cox and Fred Smith wrote in 2008. “The rigid fares of the regulatory era have given way to today’s competitive price market,” they added. “The total number of passengers who fly annually has more than doubled since 1978.”

Compared to Jimmy Carter, Barack Obama is building a bridge to That ’70s Show.



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