Barack Obama has often modeled his policies on Franklin Roosevelt. Lately, though, he's been coming across more as Richard Nixon Lite.
In 1971, fed up with the steady rise of wages and prices, Nixon had a big idea: Attack inflation by imposing strict controls on wages and prices. A federal board was created to establish guidelines and enforce compliance, on the assumption that government officials were wise enough to decide the correct price for millions of products and the right wage for millions of workers.
The main result was to prove the folly of such intervention. Nixon's own chief economist, Herbert Stein, admitted that the administration eventually had to give up because the program was "a total disaster." Among the unwanted side effects: "Cattle were being withheld from market, chickens were drowned, and the food store shelves were being emptied."
Motorists had to wait in line for hours to buy gasoline. At one point, Americans faced a nationwide shortage of toilet paper. Yes, toilet paper. Oh, and the inflation rate didn't fall. It rose.
So how does Obama intend to make health insurance affordable? He wants the federal government to regulate premiums from coast to coast. He unveiled the proposal shortly after a California company owned by WellPoint raised charges on some individual policies by as much as 39 percent.
Obama will not stand for it. Under his plan, says the White House, "if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable."
I have a better idea. If a rate increase is unreasonable and unjustified, customers can head for greener pastures. Among the several dozen competing insurers in California, some presumably will leap at the chance to grab their business. If other companies decline to offer lower rates, however, it's a surefire sign that the increase is both reasonable and justified.
The administration thinks WellPoint has no reason to raise prices because it had billions in profits last year. But the company says it lost money on individual policies in California, because medical prices rose and many customers dropped their coverage, leaving the company with a sicker and more expensive clientele.
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