Bride of Rove

Quite possibly the most unbelieveable thing I’ve heard all day – I used to say “all year”, then it became in “quite awhile”, and now that we are in Obama-Time, I’m pretty much hearing unbelievable stuff on a daily basis and things that would have won out for the “all year” trophy are now just common place – where was I? Yeah. What the private sector needs is a little competition with the US government.

From Obama’s Town Hall today on Health Care.

So what we’re working on is the creation of something called the Health Insurance Exchange, which would allow you to one-stop shop for a health care plan, compare benefits and prices, choose the plan that’s best for you. If you’re happy with your plan, you keep it. None of these plans, though, would be able to deny coverage on the basis of pre-existing conditions. (Applause.)
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Every plan should include an affordable, basic benefits package. And if you can’t afford one of these plans, we should provide assistance to make sure that you can. (Applause.) I also strongly believe that one of the options in the Exchange should be a public insurance option. (Applause.) And the reason is not because we want a government takeover of health care — I’ve already said if you’ve got a private plan that works for you, that’s great. But we want some competition. If the private insurance companies have to compete with a public option, it’ll keep them honest and it’ll help keep their prices down.

The government regulates the health care insurers. There are countless laws and congressional edicts forcing the insurance carriers to “do right by customers”. The last time I checked there were dozens of insurance companies competing for business against each other. So. How will this work – exactly? You have private companies going toe to toe with the entity that regulates them and writes the rules. You have private industry in direct competition with an entity that can print money and take an infinite loss – at least until the country collapses. Fair? You bet. I’ve seen this kind of competition before. What was the movie? Death Race 2000? Except the Government is in a monster truck and everyone else is in a Tonka Toy.

Update – Brought up from comments

I’m pretty sure I read that exact same scenario in Amity Shlaes The Forgotten Man regarding the power company didn’t I? Didn’t work out for the private company trying to compete.

Here we go:

The government is like a lobster. It will eat anything, it wants to survive, it will compete with anything, and it can be a cannibal. When you look back at the ’30s using the public choice lens, what you discover is the extent to which the Depression wasn’t about a virtuous government and bad business people. Rather, it was about people in office competing with the private sector for power. Much of the struggle described in the book literally inhered in the power business: utilities. ~ Amity Shlaes

Man. Wiki reads like a road map to what is going to happen to the Health Care Industry. Substitute Health Care everywhere it says Power.

During the 1920s and the Great Depression years, Americans began to support the idea of public ownership of utilities, particularly hydroelectric power facilities. The concept of government-owned generation facilities selling to publicly owned distribution utilities was controversial and remains so today.[2]

Many believed privately owned power companies were charging too much for power, did not employ fair operating practices and were subject to abuse by their owners (utility holding companies), at the expense of consumers. During his presidential campaign, Roosevelt claimed that private utilities had “selfish purposes” and said, “Never shall the federal government part with its sovereignty or with its control of its power resources while I’m president of the United States.” By forming utility holding companies, the private sector controlled 94 percent of generation by 1921, essentially unregulated. (This gave rise to Public Utility Holding Company Act of 1935 (PUHCA)). Many private companies in the Tennessee Valley were bought by the federal government. Others shut down, unable to compete with the TVA. Government regulations were also passed to prevent competition with the TVA.

On the other hand, there were economic libertarians who believed the government should not participate in the electricity generation business, fearing government ownership would lead to the misuse of hydroelectric sites. The TVA was one of the first federal hydropower agencies, and today most of the nation’s major hydropower systems are federally managed. Other attempts to create TVA-like regional agencies have failed, such as a proposed Columbia Valley Authority for the Columbia River.

Wilson Dam, completed 1942, was the first dam under the authority of the TVA, created in 1933.Regional power consumers may benefit from lower-cost electricity supplied from TVA’s network of 29 power-producing hydropower facilities. Supporters of the TVA, though, note that the agency’s management of the Tennessee River system without appropriated federal funding saves federal taxpayers millions of dollars annually. Opponents, such as Dean Russell in The TVA Idea, in addition to condemning the project as being socialist, argued that the TVA created a “hidden loss” by preventing the creation of “factories and jobs that would have come into existence if the government had allowed the taxpayers to spend their money as they wished.” Defenders note that the TVA is overwhelmingly popular in Tennessee among conservatives and liberals alike, as Barry Goldwater discovered in 1964, when he proposed selling the agency.[3]

The Supreme Court of the United States ruled the TVA to be constitutional in Ashwander v. TVA, 297 U.S. 288 (1936). The Court noted that regulating commerce among the states includes regulation of streams and that controlling floods is required for keeping streams navigable. The war powers also authorized the project. The argument before the court was that electricity generation was a by-product of navigation and flood control and therefore could be considered constitutional.

Wow. And in less than 5 years that was the end of private power companies.

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