Streetwise Professor

August 4, 2010

Show Me! Obamacare, and We’ll Show *You*

Filed under: Economics,Politics — The Professor @ 1:17 pm

Missouri held its primary election yesterday. One of the initiatives on the ballot was Proposition C, which if implemented would bar the government from requiring to purchase health insurance, or collecting any penalty for failure to do so.

The measure passed 71.1 percent to 28.9 percent.

Seventy-one percent.

Now there are a lot of reasons not to get all excited, one way or the other.  It was a primary election in which 668,000 voters turned out in the blasting heat, as compared to nearly 3 million in the last Presidential Election.  The measure smacks of nullification, and has serious Constitutional problems.

But by the same token, it ain’t nothin, either.  It is a more reliable barometer of national sentiment than opinion polls.  It demonstrates that there is a considerable group of people with intense dislike for Obamacare.  People who vote.  Broken glass voters.  Given Missouri’s well-known bellwether status, and its past record as a good proxy for national views, it gives the lie to the assurances of Obama, Pelosi, Reid, etc. that people would fall into love with Obamacare once it passed.  Not happening.  People are falling deeply into hate, actually.  At least a lot of people are.

The national media is hilarious in its attempts to ignore this vote.  There is a palpable fingers-in-the-ears “na na na na I CAN’T HEAR YOU” aspect to the absence of coverage on the election.

Go ahead.  Keep thinking that.  See you in November.

The individual mandate is the cornerstone in the Obamacare arch.  All of the cross-subsidies inherent in the legislation depend on the ability of forcing those who are the net sources of transfers to stay in the system.

Now you can argue that a mandate is necessary to avoid adverse selection problems that can undermine efficiency enhancing risk pooling.  To which I reply: (a) the cross subsidies in Obamacare are excessive due to pricing restrictions, e.g., community rating, which would tend to exacerbate adverse selection problems, meaning that the mandate is even less palatable than it would be under more reasonable pricing policies, and (b) if your argument is so compelling, go ahead and make it support of a Constitutional amendment (analogous to the 13th Amendment which was necessary to adopt an income tax) that would eliminate all Constitutional objections to the mandate, and the prospect that court decisions in its favor would so warp the commerce and taxation clauses as to render the Constitution effectively a dead letter.  (Or, a deader letter than it already is.)  If you’re right, and you have a compelling argument, a Constitutional amendment should be no problem, right?

But that would require persuading a supermajority of voters, and we have seen demonstration after demonstration of the Progressive “elite’s” hostility to paying the slightest attention to vast swathes of hoi polloi, most notably the considerable Jacksonian element.  (Note that rural Missourians, the epitome of American Jacksonians, provided the vast bulk of Prop C votes.)

So we know that isn’t going to happen.  Which means that the intensity of the conflict will only increase in the coming months, and in the post-November period.  You blow off people, ignore them, on matters of great import to them, and you only turn up the heat on the boiling pot. We will move from the existing Era of Bad Feelings to the Era of Even Worse Feelings.

And it is almost certain that charges of racism will be among Obamacare’s supporters’ chosen ways of fighting back against a seething public.  You can already pick up intimations of that in looking at reactions to the Prop C vote on places like Twitter. This could usher in the Era of the Worst Feelings.

This will have so many awful effects.  It will only widen the divide between those who have legitimate objections to a mandate, and Obamacare generally, and its supporters.  The charge is so incendiary that it eliminates the possibility of any constructive dialog.  Baseless accusations only reduce the effectiveness of legitimate ones, thereby giving real racists cover.  It increases the emotional heat of the political environment without adding any substantive insight.

In brief, charges of racism are becoming the first and last refuges of political scoundrels.  That degrades our politics, divides our citizens, and is the recipe for protracted and ugly conflict.  And I think that the Missouri vote is the harbinger of a serious turn for the uglier.

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  1. […] This post was mentioned on Twitter by Craig pirrong, Craig pirrong. Craig pirrong said: Updated my SWP blog post: Show Me! Obamacare, and We'll Show *You* ( ) […]

    Pingback by Tweets that mention Streetwise Professor » Show Me! Obamacare, and We’ll Show *You* -- — August 4, 2010 @ 1:53 pm

  2. As a Canadian, I am fascinated by this debate.

    Historically, it mirrors the debate that took place at the turn of the 19th century over worker’s compensation insurance schemes.

    Ohio and Ontario took the lead in North America in making worker’s compensation mandatory. (The employer liability insurance was simply too expensive as many dollars were waste trying to determine what “arising out of and in the course of” employment meant – the term that triggered liability.)

    Ohio adopted a private insurance scheme, while Ontario adopted a public scheme. The simple rationale for the monopoly is that is it potentially cheaper because the reserve fund can be lower than a private insurer who has to pre-fund against defections.

    This debate continues to run in various forms in the US; my sense is that the private insurance scheme is just too costly for what it delivers. Could be wrong.

    Comment by michael webster — August 4, 2010 @ 5:16 pm

  3. Meanwhile, back in the real world, only those who really care about opposing Obamacare turned up to vote, while opinion polls show the country is split more or less equally on the issue.

    Comment by Sublime Oblivion — August 5, 2010 @ 12:46 am

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