Sunday, March 27, 2011

Health-care law promises more than it can deliver

Published in The Tennessean, Sunday, March 27, 2011

Health-care law promises more than it can deliver

by Richard J. Grant

William F. Buckley once asked, “Socialism has long since been discredited, but when did it get so creepy?” He was of course alluding to the term “creeping socialism,” which describes the gradual expansion of statist interventions and control over private lives and property.

Historical attempts to create socialist societies have necessarily also tended toward totalitarian governance. Such governance always seems to imply the existence of a ruling elite that would decide what the rules would be and how they would be applied. Invariably, the rules were applied unevenly. The elites lived differently from the masses.

When the state controls all production, then it also controls all employment. This gives a rather special meaning to the term “getting fired.” In a free society, if you can't get along with your employer, then you have the option of looking for a new one. You might even start your own business. But in a totalitarian society, if you displease your employer, you need to make amends or face unemployment. There is really only one employer.

Even in places that are not-quite-totalitarian, the rulers can raise the cost of doing business for those who lose their favor. A newspaper publisher that fails to toe the party line might suddenly discover that newsprint has become more expensive or is no longer available. An importer might find that his application for foreign currency has been declined or that his allowance has been reduced.

The concentrations of power that make these abuses possible would not exist in a free society. But they make their entrance on the boulevard of good intentions and just keep building momentum. The arguments in favor of new programs and regulations tend to focus on intended results. When the actual results are not quite as expected then these discrepancies are dealt with through new programs and regulations.

History does not offer us many examples of the benevolent despot. But there are many examples of popular and high-minded leaders creating the institutions upon which future despots would build. Whatever the virtues possessed by a first generation of leaders, the redistributive powers of governmental authority become magnets to aspiring tyrants.

In the past few decades we have witnessed the multiplication of such redistributive powers through the creation and expansion of social programs and regulatory bureaucracies. The resulting redirection of resources and the emergence of a culture of dependency have created a political constituency that supports these programs. And many politicians have made their careers catering to that culture and by appearing to grant favors to their constituents.

The Affordable Care Act, better known as “ObamaCare,” is just one of the more recent examples of a program that promises more than it can deliver. But it can promise to attract the support of a dependent class that really believes it can get something for nothing. Its supporters continue to talk it up, but the truth is that they have wildly underestimated its costs. This is evidenced by the fact that over 1000 companies and unions, with nearly 2.4 million employees, have already been granted waivers from compliance with ObamaCare.

It is telling that even some of the biggest supporters of ObamaCare, such as unions, have applied for waivers from its restrictions. Will everyone be granted waivers, or only those who have favor? This concentration of discriminatory power in government is getting a bit creepy.

Richard J. Grant is a professor of finance and economics at Lipscomb University and a scholar at the Tennessee Center for Policy Research. His column appears on Sundays. E-mail:

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