Monday, February 13, 2012

Obama, the Magic-Money Man

Historians can debate whether Obama's attitude to how money is made is totally cynical, ignorant, or just standard liberal ideology. What is clear is that he either has no understanding of how people make money or just doesn't care if his policies have negative consequences.

Witness his supposed compromise on the HHS regulations on insurance companies having to supply free contraceptive and sterilization care to all women even if their employers are religious institutions with religious objections to such policies. The Obama administration is pretending that the employers won't have to pay for these policies, just the insurance companies. This is mendacious sophistry. Someone has to pay for those policies. Insurance companies don't offer policies for free. That someone will be have to be the religious institution. Somehow, they'll end up paying for Obama's free contraceptive mandate.

Gregory Mankiw explains this.
Consider these two policies:

A. An employer is required to provide its employees health insurance that covers birth control.

B. An employer is required to provide its employees health insurance. The health insurance company is required to cover birth control.

I can understand someone endorsing both A and B, and I can understand someone rejecting both A and B. But I cannot understand someone rejecting A and embracing B, because they are effectively the same policy. Ultimately, all insurance costs are passed on to the purchaser, so I cannot see how policy B is different in any way from policy A, other than using slightly different words to describe it.

Yet it seems that the White House yesterday switched from A to B, and that change is being viewed by some as a significant accommodation to those who objected to policy A. The whole thing leaves me scratching my head.
It's all of a piece with Obama's magic money. He is about to deliver a budget that will purportedly cut billions in spending even though about $800 billion comes from supposed spending cuts of the wars in Iraq and Afghanistan. He was never going to spend that money anyway, but now he gets to count not spending the money he was never going to spend somehow saves hundreds of billions of dollars. Why stop there? Why not count money he was not going to spend on all sorts of programs such as a manned colony on Mars and then trumpet those savings?

But it's all magic money that Obama somehow conjures out of nowhere.

The real problem with this whole contraceptive mandate is that Obama has revealed what so many suspected at the time the bill was crammed through. Obama thinks he has the power to establish that people must buy insurance and that he can mandate what that insurance must cover. All that power is concentrated in the executive branch. If he could make this rule now and then change it when there are objections from a powerful voting bloc, he can certainly change the policy if he were to be reelected. All it takes is another rule change by his HHS Secretary. As J.E. Dyer chides the media for mis-reporting the Obama supposed rule change as if it were really a change,
If the federal government can step in and arbitrarily require a company to provide things for “free” that were previously elective, premium-based services, then it is no longer an insurance company. We are not buying insurance from it; we are simply participating in a mandatory government program whose features can be changed at any time, regardless of what we or the “insurers” want. There is no contract. There are only the one-sided decisions of bureaucrats and future presidents.

This Obama move is the opposite of a retreat. It’s a decision to reveal the future to us, and to insist on remaining on course for it.

Yet on their news pages (as opposed to the opinion pages), the mainstream media are stuck in the old mode of interpreting political events in a single dimension, as if all other things remain equal, and a rhetorical “retreat” from a president means the same thing it usually has in the past. We see this in numerous aspects of their coverage. They keep putting out stories in the same old narrative ruts, as if we have a business-as-usual political situation. The president’s people say he has changed his mind on the contraception mandate; in the shallowest of political terms, that can be seen as a “retreat”; and no care is taken to frame the overriding reality that Catholic employers will be required to pay for “insurance” programs that distribute contraception to their employees.

That is not a change of heart, it’s a significant broadening of the state’s control, undertaken at the drop of a hat – and we have a huge mainstream media apparatus that simply does not frame what’s going on in realistic terms. The clear implications of the Obama decision were widely discussed across the conservative blogosphere yesterday, and even on some MSM opinion pages. But in their news reporting, the MSM characterized what had happened – falsely – as a retreat by the president.
The Republicans have to make the larger point. This goes beyond the whole question of religious institutions having to provide free contraceptives. The real issue is whether the president should have such concentrated power without any check. And once we give him that power what else can he mandate when he doesn't have to worry about trying to maintain a pretense of reasonableness before an election?