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Nothing Burger Health Care

September 30, 2010

The word of the day comes from Daniel Foster’s headline about McDonald’s announcement that it’s likely to drop health care plans for its employees because of an “economically prohibitive” requirement of ObamaCare. The word is “Hamburgler“. Monsieur Foster calls ObamaCare the Hamburgler, but, in a sense, you could argue that Obama himself is the Hamburgler, especially considering that a health care law is not a person, while a Hamburgler would probably have to be a person.

So, obviously, the Hamburgler — President Obama, ie — promised us again and again and again that you can keep your health care plan if you want to. In a world in which human beings don’t react to changes in their circumstances with adjustments, that might have been true. But in this world individuals and organisations of individuals do make adjustments to external changes. Thus it wasn’t hard to see that Obama’s promise couldn’t be fulfilled simply because employers will look at the new health care laws, the additional costs and restrictions those bring for them if they want to keep offering health insurance to their employees, and maybe decide that dropping health insurance is the economically smart thing to do given the new conditions. Just as it’s happening at McDonald’s.

Sebelius quickly reacted with offering the outlook of a waiver for McDonald’s concerning the specific requirement the company finds unrealistic to fulfill. Talk about an ad-hoc favour for an important player. What about the smaller, less known companies that find themselves in similar situations? It strikes me as very unfair to offer a waiver to the golden M only because it has the political importance to grab the necessary attention, while who knows how many small companies and their employees will have to simply cope with the bad law.

In and of itself it’s a good thing when more Americans get their health insurance independent from their employer. But the way the McDonald’s employees might get thrown out of their current health care contracts is not quite what the Hamburgler has advertised. ObamaCare, it appears, was designed to put the financial burden of extending health care coverage on companies. And apparently the Hamburgler thought that those companies would simply accept the higher costs without any adjustments. This kind of shortsightedness is typical for left-wing “economics”.

“Lower the price so more people can afford it!” — but producers will react with reduced quality if they’re forced to lower prices.

“Raise taxes so the government has more revenue!” — except that individuals as well as companies make adjustments to minimise their tax burden, they might even decide to produce less value because taxes make work less attractive, and in the end government revenue is lower than before the tax hike.

“Make companies offer better health care plans to their employees!” — unfortunately that can mean that those health care plans become unaffordable and will get dropped entirely. Surprise.

The problem with such government-mandated restrictions is always their arbitrariness. How is the Hamburgler supposed to know what type of health care plan McDonald’s can afford to offer its employees and which not? He cannot know. Nancy Pelosi cannot know. Kathleen Sebelius cannot know. It’s the market that gives indicators for what’s economically feasible and what isn’t, and it’s the market that indicates pecuniary values. It’s the sum of choices by free individuals that allocates goods and services in the most satisfactory fashion. A top-down government allocation, directly or indirectly, can never make use of the valuable information about each person’s preferences and will always reduce economic liberty.

Hey, how about we call them Economic Freedom Fries from now on?

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