Companies Are Evil, So It's OK to Lie about Them

Mona Charen

10/16/2012 12:01:00 AM - Mona Charen

President Obama presented himself to the nation in 2008 as something new -- a change agent who would bring fresh ideas to our national challenges and solve problems in a post-partisan, unifying fashion.

In fact, as some noted at the time, his ideas were decrepit hand-me-downs, about as novel as disco or the leisure suit. He is a conventional, left-wing statist, George McGovern with a bigger smile, eager to bring ever-larger segments of American life under tight government control and direction. As for unity, his presidency has set new records for contemning the opposition -- a disdain histrionically pantomimed by Joe Biden.

Obama's deep hostility to the private sector has been evident throughout his presidency and popped up like verbal ticks during the first debate. He warned against putting seniors "like my grandmother at the mercy of the private insurance system." Those companies, he added knowingly, "are pretty clever about figuring out who are the younger and healthier seniors." He trotted out his old warhorse about companies "getting tax breaks for shipping jobs overseas," and he claimed that Obamacare protects people from "being jerked around" by insurance companies.

So hostile is the president to insurance companies that he stooped to misrepresenting the facts of his mother's illness and death the better to paint them as malevolent. In a 2008 debate with John McCain, Obama said this: "For my mother to die of cancer at the age of 53 and have to spend the last months of her life in the hospital room arguing with insurance companies because they're saying that this may be a pre-existing condition and they don't have to pay her treatment, there's something fundamentally wrong about that."

As Janny Scott, a former New York Times reporter, revealed in her biography of Stanley Ann Dunham Obama, it didn't happen. Mrs. Obama's medical expenses were paid for by CIGNA. There was a dispute with the company over disability insurance, but the company never attempted to deny coverage for her cancer treatment. When the White House was questioned about the Scott account, a spokesman did not dispute it, saying that it was all a very long time ago.

Obamacare was designed by people who believe passionately that private companies must be strictly controlled and regulated by Washington bureaucrats, who will run things far more humanely and even more efficiently. Mr. Obama cited the bogus statistic that Medicare has "lower administrative costs" than the private sector. This is specious. Medicare's administrative costs are spread over several different agencies. The IRS collects the taxes that fund the program, the Social Security Administration collects some of the premiums paid by beneficiaries, and the Department of Health and Human Services handles accounting, auditing, fraud and other issues.

Additionally, Medicare's population is older and sicker than the typical insurance pool. Their medical costs are accordingly higher, so as a percentage of total spending on the patient, Medicare's per patient administrative costs will be smaller. But that isn't because Medicare is more efficient.

This is not to say that insurance companies are virtuous. They are simply businesses, doing what makes sense for their customers and shareholders. It would never occur to Barack Obama that the best way to go after insurance companies whose behavior you dislike is to provide competitors. No, his plan, now just beginning to sting, is to create 159 new bureaus and agencies, and 11,327 pages of new regulations (so far).

Any first-year economics student could have predicted what happened last week in response to one feature of the law. Obamacare requires that companies with 50 or more full-time employees provide health insurance or pay a fine. A restaurant chain that includes Olive Garden and Red Lobster (not one of the 1200 well-connected companies and unions who've received waivers) announced that it will be placing more of its 180,000 employees on part-time status -- thereby diminishing the salaries of thousands of people.

The Obama Administration will perhaps regard this utterly predictable response (and this is just the beginning) as "jerking people around," and may, if reelected, issue regulations making it illegal to change an employee's status from full-time to part-time. That's how statists operate. Try firing someone in France -- which is why jobs are so scarce in France.

And so it will go, with the federal government chasing after private industry with more and more restrictions and penalties -- never seeing that they are circling the drain.