Switch and Pitch

Wednesday, August 12, 2009

Barack Obama could have passed -- to many Republicans, anyway -- as an advocate of capitalism recently when he noted that, "UPS and FedEx are doing fine," as they "compete" against the US Postal Service. This he said while addressing a crowd friendly to his plan for health insurance "reform," but at a time when his congressional henchmen are being surprised across the country to learn that real Americans do not want said plan.

His remark is clearly intended to assuage the public, and to make his plan seem harmless to us. But other video, of earlier remarks by him and by Democratic members of Congress plainly indicates that he does not really believe his own words and that his plan is, in fact, a "Trojan horse," (as he once put it) for a goal he has repeatedly endorsed over the years: single-payer health care (i.e., government control of the medical sector of the economy).

It is nevertheless worth stopping for a moment -- before we report him for it -- to consider the full meaning of Obama's comparison of the plan he wants to foist on us with the Post Office. If it's going to be such feeble competition for the insurance industry, why implement it at all? And why would we want it? And why would Obama leave himself wide open to such a glaring policy failure?

To really understand any utterance, one must always step back and consider its full context. In this case, it might be worthwhile to consider the nature of the "competition" Barack Obama claims the Post Office is participating in. An old column by Edwin Feulner over at Capitalism Magazine will do us nicely:

We know we can count on private services such as FedEx and United Parcel Service to deliver on time. If they didn't, they'd go out of business. And we also know--many of us from bitter experience--that we always can't count on the post office.

That's because the post office is a government-protected monopoly; 19th century laws make it illegal for anyone else to deliver letters. It's also exempt from state and federal taxes and free from most government regulations. That combination is a recipe for disaster.
If you read the whole thing, it will become plain as day that the only reason there even exists a Post Office to "compete" is federal protection. It would be for similar reasons, as John Lewis recently indicated, that Obama's plan could exist. Here's just one example:
By setting a minimum 70% actuarial value of benefits, the bill makes health plans in which individuals pay for routine services, but carry insurance only for catastrophic events, (such as Health Savings Accounts) illegal.
For a similar reason you can't just post a letter for, say, a quarter, at FedEx (or even a Post Office that really had to compete), you won't be permitted to find more affordable health insurance than Obama's even if a free market could provide it. When the government disallows consumers the choice of less-expensive options, inferior enterprises like the Post Office become "viable."

And, as Lewis indicates further down the line for this plan, enough government aid to such an enterprise will artificially make it not just viable, but the cheapest "option" we will have. This is why, when you hear Obama say he wants single-payer coverage by the end of his term and when you hear him talk about his plan like it's a Post-Office-like "loveable loser," he seems to mean it both ways.

It is because, to him anyway, it is both ways: The Obama Plan is a sort of Medical Post Office -- but on steroids. Government protection will make it ineffective by shielding it from real competition, and put better options out of reach of the public.

Too bad he underestimates the intellect of the American people. I don't want, "The doctor can see you now," to have the same level of reassurance as, "The check is in the mail." That is why I don't want Barack Obama's plan, and I thank the President for making it clear from which direction that fishy odor is coming.

Barack Obama implies that his plan is "self-sustaining." If that is the case, why doesn't he just resign, slightly increase his "premiums," and make millions selling it on the open market? I'll even help his cause by demanding that the government stop strangling the insurance industry with regulations.

-- CAV


Ritu said...

Excellent analysis. A recent article discussing the same topic: http://www.openmarket.org/2009/08/04/end-the-letter-delivery-monopoly-sell-the-usps/

Anonymous said...

The USPS monopoly on ordinary letters was established in the 70s by what are collectively termed the "Private Express Statutes," which provide for criminal and civil penalties to private letter carriers. UPS and FedEx operate in two areas - parcels, which are not covered by the Private Express Statutes at all and, so far as I can tell, not viewed by Congress as within the monopoly allegedly granted Congress to control the mails allegedly granted under U.S. Const. Art.I, Sec.8, cl.7; and "extremely urgent" letters, which must meet certain maximum delivery timing and minimum pricing requirements and must be marked as such, and are allowed to be carried by private carriers only because of a USPS-created exception which USPS may revoke at any time without Congressional, or likely even judicial, review.


Gus Van Horn said...

Thanks for the complement, Ritu, and for reminding me of Michelle Minton, whom I've heard of before through a mailing list I participate in.

And thanks to both of you -- Qwertz here and Ritu indirectly -- for elaborating on the legal basis for the Post Office's letters monopoly.

Vigilis said...

" ...the bill makes health plans in which individuals pay for routine services, but carry insurance only for catastrophic events, (such as Health Savings Accounts) illegal."

The insidious reasoning for this is the de minimus axiom of political economics:

Make a tax small enough by division among a large populous and few will it worthy of any complaint.

In other words, all must be charged for minor medical services most could really do without in order for medical malpractice litigation to be better hidden within overall healthcare system costs.

If anyone doubts the hidden sop to trial lawyers in this policy, ask yourself how many of Obama's nearly three dozen czars happen to be law school graduates.

"The accumulation of power by White House staff can threaten the Constitutional system of checks and balances," Sen. Robert Byrd, D-W. Va., wrote in a letter to Obama.


Mo said...

The Postal Service is going to need a taxpayer bailout of 7 million this year:


Ironically, the Postal Service can't even make a profit, despite all these monopoly protections.

And its victims are not only FedEx and UPS, but small entrepreneurs whom the law forbids from launching inexpensive letter-delivery services in densely populated cities.

Gus Van Horn said...


While it hardly surprises me that this plan has lots to keep attorneys busy, the problem lies deeper than that.

If the belief that there is a "right" to medical care were not so prevalent, the demand for such legislation would be nil.


Hardly surprising! Thanks for pointing to that.