Ben Shapiro

President Obama's "public option" health care plan has been temporarily shelved -- or, at least, that's what his spokespeople would have us believe. Kathleen Sibelius, secretary of health and human services, said on Aug. 16 that a public option wasn't an "essential option" in revamping the health care system. Sen. Kent Conrad (D-N.D.) is now pushing a new idea: the insurance co-op. "A co-op has some appeal because it is a nonprofit alternative," Conrad says. "At the same time, not government run or government controlled."

What exactly are co-ops? There are several different definitions. Some co-ops involve private ownership of an insurer; the insurer is operated on a nonprofit basis. Individuals can then buy insurance from the co-op. Another co-op option would be the Ace Hardware model, in which insurers pool their resources and sell to individuals on a for-profit basis.

That isn't what Conrad is talking about, however. According to the Associated Press, "Conrad said $6 billion would be needed -- in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks." This isn't a privately-held nonprofit, and it's not a privately-held for-profit. It's a government-subsidized business that will be indirectly responsible for administering government policy.

The health care co-ops are Fannie Mae.

In 1938, the government established the Federal Home Mortgage Association -- Fannie Mae -- in an attempt to boost mortgage lending. In an effort to get Fannie Mae's liabilities off the government books, however, the government spun off Fannie Mae to private shareholders. Meanwhile, the government continued to pull lending standards strings and offer subsidies. The result? The horrific mortgage policy that led to the current mortgage meltdown.

The most wonderful thing about the Fannie Mae spinoff, of course, was that when the real estate sector imploded, the federal government could blame the private market. They could blame "predatory lenders" and "credit derivative swaps" and "secondary mortgage markets." They could ignore their own role in the development of the mortgage crisis, citing the fact that Fannie Mae was privately owned.

Obama is a quick study.

Ben Shapiro

Ben Shapiro is an attorney, a writer and a Shillman Journalism Fellow at the Freedom Center. He is editor-at-large of Breitbart and author of the best-selling book "Primetime Propaganda: The True Hollywood Story of How the Left Took Over Your TV."
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