Re: Obama: I’m Not Incompetent, Government Is

by Veronique de Rugy

Charles Cooke is right to point out how little responsibility if any President Obama is willing to assume when he blames the government for a lot of what has gone wrong with Obamacare (at least he has moved on somewhat from blaming the Republicans for everything all of the time). Charles is also right to highlight the utter inconsistency of blaming the government while failing to offer serious options to reform it, and if anything constantly pushing for massive expansions of government.

Now, I will say that I agree with the president about his claim about the government. As I have said before (including during a testimony before Congress on Wednesday), the day-to-day problems related to the Affordable Care Act’s rollout are only the most recent and visible signs of the fundamental flaws that plague government intervention, in general. And while it is tempting to blame the current administration for the disastrous rollout of the ACA, the deeper truth is that any administration attempting to impose such a major government expansion or attempting to tell people what they can and cannot do and what they should buy or not buy, would have fumbled this. Obviously, there is no denying that it takes some delusions of grandeur to assume that while others have failed you will succeed. (A serious look at what’s happening in Massachusetts is a good place to start.)

These types of problems are not specific to government intervention in health care. And the economic field of inquiry known as public choice explains why. The government failures we observe in the real world have been described in the academic work of public-choice economists such as Nobel laureates James Buchanan, George Stigler, Vernon Smith, and others. These economists have shown why, despite good intentions and nearly unlimited resources, government top-down solutions are not only unlikely to identify and solve problems, but often make problems worse.

In the case of the health-care law, for instance, Democrats claimed that they wanted to provide everyone with insurance coverage but they passed a law that will still leave some 30 million Americans without insurance (according to CBO) and in the process has made insurance premiums and out-of-pocket expenses (among other things) more expensive for many Americans who were actually happy with their previous coverage.

What I also find rather strange is that Democrats spend a lot of time talking about the merits of expanding coverage, but they do not spend much time thinking about how expanding coverage has an impact on health outcomes, especially for the million people they are trying to push into the ghetto of health care: Medicaid.

If Obama is serious about his statement that government can be a problem, and if he were to take seriously the six decades of scientific research into government decision-making that we have available to us at this point, he should conclude that the sensible solution is simply to leave some activities outside the purview of government, not expand it.

You can read these two excellent testimonies from Wednesday’s hearing: The first is by the Cato Institute’s Mark Calabria and the second one is by the Brookings Institution’s Clifford Winston.