Randy's Rants

Boiling the Frog in the Health Care Bog
By Randy Gage
Apr 1, 2010, 22:41

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If you wonder how to enact change in an electorate and introduce an expensive program that will end up costing the taxpayers trillions of dollars, it couldn't be done any better than the Obama administration did with the health care plan in the U.S. And it offers some tangible lessons in how governments can break the laws of prosperity and seemingly get away with it.

Now of course laws of prosperity cannot truly be broken. But when you can resort to simply printing more money when deficits appear, it can look that way on the surface.

The way to get any boondoggle government program like this through is tried and tested: Pander to the entitlement mentality of the herd promising increased benefits, cook the budget books to minimize the apparent cost, and promise to balance the budget on the backs of those evil, greedy rich people.

And as their election demonstrated, no one has done this better in decades than the President Obama and his campaign team. In this case, they took their "yes we can" and "time for a change" themes and hung them like gaudy necklaces around the health care plan. The basic strategy was genius, utilizing the proverbial boiling the frog analogy that corny motivational speakers have been using for decades.

Gradually introduce the new entitlements and hook the herd on them like a crack dealer does with the goods. Create a disconnect between the new goodies and the budget deficits they create. By the time the collateral damage become apparent, the frog is already cooked.

In this case, the administration used the audacity of hype, er, hope, to actually suggest the plan will CUT $74 billion from the deficit. (And if you believe that, I have some ocean front property in Arizona to sell you.)

Now how would anyone believe this to begin with you may wonder...

Well it's what Hollywood calls "suspending disbelief." Kind of like when Pam Ewing woke up and Bobby walked out of the shower on Dallas and assured her those couple of years he had been dead was just a dream.

All the herd wants to hear is that the evil insurance companies can't cut them, the evil drugs companies will have to provide them with free prescriptions, and those rich, golfing doctors will have to treat them. And naturally these "rights" should be paid for by taxing the rest of those money-grubbing rich people.

It sounds good, looks good, and even looks good on paper. And the campaign was run about as brilliantly as president Obama's election, allowing the administration to accomplish what scores of other Robin Hood wannabe's over the years have failed at.

Unfortunately for the administration, they omitted to deal with one pesky little chink in the armor...

That is the Security and Exchange Commissions rule requiring companies to restate their earnings to reflect present value of long-term health plan liabilities.

So last week AT&T was the first company to comply, announcing that it will have to make a $1 billion write down because of the new health care bill. (Companies that offer prescription drug benefits to their retirees instead of dumping them onto Medicare and other government entitlement programs are hit hard by the new law.)

So now the administration has Commerce Secretary Gary Locke blogging and hitting the TV circuit attacking companies that "imply that reform will raise costs for them." He went so far as to say on CNBC that these companies making the statements were "premature and irresponsible."

House Democrats have even announced that they will drag these companies into hearings in April because they conflict with independent analysis that shows the new plan will actually "bring down costs."

Yeah, right.

But of course these companies are simply doing what they are required by law. So it will be interesting to see how this all plays out.

The new health care plan is just as Vice President Biden so aptly described it, "a big fucking deal." As in big fucking deficits. But once you give the kiddies the crack, they're hooked.

So the real question will be how they play out this requirement that companies restate their earnings to reflect the actual cost of all these new goodies for the herd.

As long as they keep hyping it as those evil, greedy capitalists trying to rip off the little guy, that should play very well in Peoria. So the new bill should survive and be immensely popular with the herd.

Unfortunately for them, it will actually lead to more layoffs, downsizing and corporate bankruptcy, because while you can create the illusion of breaking prosperity laws, you can't actually break them.

The only free cheese is in the mousetrap.


© MMXI Randy Gage. All Rights Reserved.

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