Perhaps for policy reasons, and
certainly for political reasons, it is impossible to unwind reliance on
employer-provided insurance. But this fact, combined with the “preexisting
conditions” consensus, means that henceforth the health-care debate will be
about not whether there will be a thick fabric of government subsidies,
mandates and regulations, but about which party will weave the fabric.
This is the frustrating essence of the current debate about the GOP healthcare bill. Once you concede that government should be involved in running healthcare, you are then reduced to arguing about which forms of intrusion are the least harmful. Clearly Obamacare has been horribly harmful. Arguably the GOP alternative is less harmful. But either way you are on the road to economic perdition and have abandoned the principle that systems work best when individuals are allowed to make free choices.
The same reasoning applies to the battles over Minimum Wage laws. Once you concede that government should be involved in setting prices for things, you are reduced to arguing about the amount of damage various forms of intrusion incur. In 1971, President Richard Nixon declared a "freeze" on all prices and wages in the United States. This was an attempt by government to control the inflation that it itself had created. Predictably, it ended disastrously. Minimum wage laws have been around in the US since 1938. The economic effect of any price floor is to create a supply surplus. If you set a minimum price for lemons you will have a surplus of unsold lemons. If you set a price floor for wages, you will have a surplus of labor, otherwise known as unemployment. The Law of Demand is not widely debated -- except when it conflicts with Utopian fantasies.
Until recently Minimum Wage laws have not been especial controversial, but only because the price floors have been set not too far above the market price for low skilled labor. Hence the unemployment surplus has not been terribly noticeable. Now comes along the Seattle City Clowncil to declare that the wage floor rise should increase by 60%. Suddenly the unemployment surplus becomes quite noticeable, making headlines all over the country.
It would be nice if we could recognize that a) government cannot control the price of anything whether it be wages or medical care and b) in trying to do so it will wreak economic damage, the amount of which will vary according to just how far from economic reality it has strayed. But we won't. The (rather spineless) GOP has given up on having that discussion. They are now engaged in the determination of just how much economic damage they are willing to impose on the country. Obamacare was too much. Their plan is just the right amount of damage -- they contend. Seattle's Minimum Wage law was clearly too aggressive. Let's scale it back and have a smaller number of low-skilled workers be priced out of a job.
Are we left to arguing that the only thing problematic about heroin is if you inject a little too much of it?
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