Paul Jacob

There is no mystery here. We know why the website has failed, and why the emerging problems inherent in “ObamaCare” are bound to lead to even greater failure.

Hubris. Pride. Incompetence.

The “incompetence” so far shown, and the lies that so often follow incompetence like so many ducklings following a quacking momma duck, both precede and follow from the pride.

What is that pride?

The pride of a “community organizer” who thinks that, because he has a Harvard Law degree, he can run a country. The pride of progressives in general, who think that going to college gives them all the information they need — and all the skills required — to set up vast business systems through thousands of pages of law and tens of thousands of regulations written in the capital.

Without skin in the game, they lack that ultimate check of the marketplace, the paying for their own mistakes. Perhaps that is why they don’t realize that much of economic life runs on information not found in textbooks or journal articles.

The knowledge required to succeed in a marketplace is knowledge of place and time and value. And alternates. Obscure costs. Things that cannot be simply regurgitated onto a chalkboard or placed into an equation.

Thus, at least half of the economics departments in the country don’t do much to dissuade the pride, the astounding hubris. They stoke it. Pretending that their models — whether arrayed on spreadsheets or entered vast databases or special computer programs, whether written in symbolic logic or managed in the multiple regressions of a statistical study — match reality is their particular delusion. And they end up feeding, not checking, the delusion of progressives, the bulk of whom know nothing of economics, even after several courses.

And so progressives continue to “criticize” business without understanding profit and loss; “regulate” business by mandating high-cost and irrelevant reporting systems; and tax the heck out of those who have succeeded, even as they themselves fail to understand what makes for success.

So of course progressives’ efforts to control the medical insurance industry, and “fix” our admittedly haywire medical-industrial complex, have spun out of control, and put in place even more haywire systems.

They don’t know what they are doing.


They don’t understand how businesses really work, and why government regulation and market controls backfire.

There’s a vast literature explaining all this. But you won’t see that vast literature of law and economics, property rights economics, etc., etc., cited on the major networks — including Fox. Because media people, like lawyers, tend to be under-educated where education would really count. It’s possible to watch five talking heads argue about important matters and not have one of them ever mention the important principles underlying the contentious matters they discuss.

And the progressives yammer blithely on. Their pride in their credentials, in their intentions, in their ideas, shows through. And that plays well on TV, even better than it did in the papers, when newspapers meant something.

But it doesn’t give them what they want: ability. Set up health care “markets”? Yeah, that’ll work.

For a while, maybe.

The mortgage aftermarkets invented by Fannie Mae and Freddie Mac worked, too. For a while. But it was those government-created markets that imploded.

In the old days, your local bank held your mortgage. But economists (and other critics) thought that local mortgage markets were examples of “market failure.” Why not create a large aftermarket of securities? This would free up banks to . . .

Oh, let’s not even finish that thought. The hubris of technical economists, like the hubris of pols and wonks and bureaucrats who call themselves “liberal-progressives” or worse, is such that they think the tacit knowledge that markets rely upon is somehow defective for being both “local” and “hard to articulate.” (The two parts of “tacit” they don’t understand.) It's not just that they confuse the "knowing that" kind of knowledge learnt at college, and the "knowing how" kind of knowledge that comes from participation in a complex system like a real, live market. It gets even worse. There are perfectly smart people who somehow think it’s wrong for lenders to discriminate between people with sound financial practices and less sound finances. So “of course” government should step in and create something wholly new! What could go wrong?

I mean, besides “everything”?

Same with medical insurance. This is an industry utterly perverted by weird tax law and an even stranger history of regulation, including multiple mandates. In many states, ObamaCare’s “innovation” of requiring even old men to be placed in the same risk pool for pregnancy and natal care as young, fertile women is nothing new. The Left Coast states long ago forbade “discrimination” in price between men and fertile women. For medical insurance.

The consequences of this? Information ceases to be relevant. The very nature of insurance, which depends on actuarial risk, has been corrupted for decades. And now progressives want to make the corruption equal across all states. For “equality’s” sake, I guess.

But whatever reason they may give, the basic truth remains: They are the enemies of the information that makes a free society work.

And so they are now stumbling upon the creation of new, state-based “marketplaces.” We shouldn’t be shocked to find people with almost no market experience — that is, no real-world producer experience, botching up the job of concocting new markets . . . markets and services based on heavily regulated standards that reek of “we know best.”

But they don’t know squat. Every assertion of competence is a pretense of knowledge — the most relevant forms of which we are catching them in the very act of repressing.

ObamaCare will not end well for us, unless it ends. Period.     [references]

Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.