Sunday, August 09, 2009

Leftist Modus Operandi: Mortgage and Health Care

First take a few decades of using government to interfere with the free market, creating "crises."

For example, over-regulate the mortgage industry by lowering interest rates, putting pressure on banks to make mortgages to people who can't afford them, and creating MBS and CDS in order to sop up the risk. Don't worry, there will be a hole in the plan somewhere. Ah, yes, there it is. The risk will nevertheless concentrate itself in these CDS holders because many in the mortgage industry will see a chance to make a killing in such a system and there will be a housing price bubble. It will pop and you will have your crisis. As the Leninist says, "Never let a good crisis go to waste." In this overregulated system, where the free market is sufficiently crippled that it cannot correct itself by throwing the losers to the curb, there will always be little holes of underregulation where statism is incomplete. These leaks will precipitate the crisis. You may plausibly blame the crisis on underregulation. The people, in their ignorance of the byzantine system you have created, will not know the difference. They will believe that the free market is to blame. You may plausibly blame everything on greedy businessmen and seize power.

Another example is the health care. Regulate the heck out of health insurance. Tell insurers what they must offer. Make it so that they can't compete in a free market across state lines. Make the justice system cause doctors to perform 25% of their tests for no medical reason but only so that they will not be sued. Crippled by government, the system will become very inefficient, provoking what the people may be ignorant enough to think is a crisis caused by the free market. You may plausibly blame everything on greedy businessmen and seize power.

There will always be idiots and immoral slime in the business world. There will always be such people in every walk of life. What the leftist does is to use government over-regulation to cause crises, inefficiency and waste in the economy that get exacerbated in certain cases by businessmen's idiocy and greed. The regulation will not be totalitarian enough to prevent these businessmen's wrongdoing. Then the leftist steps in, blames the problems on under-regulation of the economy. If the people are ignorant and gullible enough, they will assent. Then they will get totalitarian regulation of the economy.

The alternative is good, minimal regulation of the economy: regulation that prevents the most egregious crimes, monopolies, and crises and does nothing else - regulation that lets fools who make bad mortgages lose, regulation that allows insurance companies compete to offer cheap insurance. That is the kind of regulation that creates a free market economy. America should try having a free market economy. We wouldn't have had the mortgage crisis and we wouldn't have such inefficiency in the health insurance industry.