Oops: President Obama stepped in a bucket at a town hall meeting today. When a questioner worried about the public option, that would compete–unfairly in my view–with private insurance, the president unwisely brought up the Post Office. From the story:
Obama says the private industry can compete against the government. “They do it all the time,” he says. “If you think about it, UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.”
Yes indeed: The Post Office is perennially in financial meltdown, not making it a great example of how well Obamacare would work. As to the president’s apparent point that the public option won’t hurt private companies, that doesn’t compute. The government doesn’t handcuff UPS and Fed Ex by dictating the terms of service and prices that they can employ. If it did, these thriving companies might be in as bad shape as the Post Office. But under Obamacare, private insurance companies would be restricted on the policies they could offer, constraining innovation and true competition, and if we ever sought to replace our current policies, we would be forced to choose from among the government–approved plans.
No, the Post Office analogy doesn’t serve the president’s cause either coming or going.
August 11th, 2009 | 4:42 pm
UPS and FedEx came after the Post Office, and their success came from their strategy of skimming off the P.O’s most profitable business, that is, senders who wanted guaranteed delivery and were prepared to pay a premium price for the enhanced service.
This situation does compare to the health insurance market in that insurance companies tend to skim the healthiest customers off the market by excluding pre-existing conditions, among other policies. If anything restrictions on this sort of behavior make more sense in the health coverage situation, where we’re pooling funds, and having healthier people skimmed out of the pool hurts the remaining participants.
Still, Obama is willing to go with a public plan to cover basic needs and then allow private plans to duke it out over the supplemental coverage. If anything I see that improving competition.
August 11th, 2009 | 6:21 pm
Yet more proof that Barack H. Obama, Super Genius, is anything but.
August 11th, 2009 | 8:51 pm
Of course FedEx is doing better than UPS because it is not under the same unionization/regulations but if the teamsters get their way, they will pressure Congress to change labor laws to benefit UPS (or hinder FedEx). But packages and inefficiencies are one thing – and our healthcare is another. While delivery systems may tell me when and how I get my packages, I certainly don’t want my government telling me when and how – IF – I get my medical treatments.
Either way Wesley, you are correct – bad analogy!
August 11th, 2009 | 9:04 pm
Every time O opens his big O, he does good peoples’ work for them, in a perverse, left-handed sort of way. Keep on yappin’, O!
August 12th, 2009 | 1:31 am
Another way it’s a bad analogy is because — as I remember from the George C. Scott radio spots from a few years back — the Postal Service is perhaps the only governmental organization that pays its own way — i.e. doesn’t get any tax money. And I like the post office, but I think BHO made the opposite point of what he was going for there…
August 12th, 2009 | 1:53 am
I tend to like the PO too. Very underrated for what it does. But it has troubles and isn’t nearly as complicated as a health care bureaucracy will be.
August 12th, 2009 | 8:55 am
The analogy is actually far, far worse. The USPS actually outlaws private competition except for certain special cases (nobody else can carry first-class mail, and everybody is required by law to charge more than the Post Office would). See also http://en.wikipedia.org/wiki/Private_Express_Statutes .
So basically, he said “The government option won’t compete unfairly against private companies. As proof, check out this government option that has outlawed its competition!”
August 12th, 2009 | 9:47 am
“But under Obamacare, private insurance companies would be restricted on the policies they could offer,”
Thank you for saying this, Wesley. I am working on a post making this exact same point, from the text of the law. Some people–Padraig, for example–seem to be under a false impression about this. For example, “…allow private plans to duke it out over the supplemental coverage.” Well, no. As best as I can tell, the supplemental coverage as well is constrained by the same federal committee that decides on benefit levels and payment levels. And it appears to be dictating the same benefits levels. So the private companies do not get to compete as they see fit by putting together, independently, various supplemental benefits packages and offering them on a competitive, free-market basis. All packages in the insurance exchange appear to be under the same regulations and restrictions as the “public option.”
August 12th, 2009 | 10:59 am
Here’s why Obama’s offering of this analogy in public is logical suicide.
His plan requires an argument for greater government intervention in the health care industry. But in order to allay fears that the government will eventually have a monopoly in that field, Obama says, “But look, Fed Ex and UPS do fine because the Post Office is full of all these problems.” So, he concludes, private insurance will do just fine with the public option.
But this puts him between a rock and a hard place. Here’s why. He needs to use the analogy to allay the fear of monopoly by appealing to an inferior government business that is done better by the private sector. But, at the same time, he needs to make the case for inserting more government into health care. Thus, his analogy to allay the fear of monopoly becomes an argument against inserting more government into health care. That is, he is suggesting that government will be less competent than private insurance. That is not particularly good thinking on the fly. In fact, it’s embarrassing.
August 12th, 2009 | 1:49 pm
UPS and FedEx, which deliver parcels, are doing fine despite the USPS because they aren’t in the same business as the USPS, which has a legal monopoly on the delivery of letters, as Tim J. has pointed out.
Where are the private firms that deliver general letters?
…
August 12th, 2009 | 5:25 pm
Albert, FedEx delivers a ton of simple documents, though not for $0.43. Ask any lawyer.
Also, I hear UPS ain’t doing so hot, although that’s due mostly to the recession, which doesn’t affect the USPS quite so much.
August 13th, 2009 | 12:53 am
Padraig’s analogy is apt. Just offer FedEx and UPS an opportunity to deliver regular mail and see what their respective board say.
For those of you who fear gov’t bureaucratization, are you happy with the present hotch-potch non-system that we have presently, where overlapping and largely incoherent administrative costs are a primary driver of medical inflation?
You don’t like O’s plan, great. Where’s your reform plan, and where was it when you had both houses of Congress and the Oval Office? If the profits-driven system worked for the majority of Americans, no one would be tenably proposing an overhaul. But any “system” where costs spiral at nearly 6 times the cost of living and where medical debt is the principal cause of nearly half of all bankruptcies is clearly broken. You want to put your faith in a reform plan written by the same insurance companies and HMO’s that created this mess? Thanks but no thanks –I’ll take my chances with Uncle Sam on this one.
To justify massive increases in military spending, Reagan often said “defense is not a budget item.” I believe we should take the same approach to public health. The same sentence in the Constitution that “provide(s) for the common defense” entreats us to “establish justice,” “insure domestic tranquility,” and “promote the general welfare.”
August 13th, 2009 | 4:11 pm
People didn’t vote for him because he was smart — or because they were. And with them being idiots how were they supposed to know whether he was smart or not?
August 13th, 2009 | 5:54 pm
Ianthe: Such comments do not add anything of substance to these threads. You’re angry and you dislike liberals intensely. Duly noted. Now do you have anything different to say?
Wesley: What do you think of Sen. Wyden’s Healthy Americans Act? Seems to enjoy a fair amount of bipartisan support. This is the best proposal I’ve seen to date though, like any legislation dealing with such a complex entity as healthcare, it’s far from perfect.
Here’s the URL: http://wyden.senate.gov/issues/Legislation/Healthy_Americans_Act.cfm
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