Paul Krugman: Not Enough Audacity

Will Obama give away too much in an attempt to get health care reform legislation through congress?:

Not Enough Audacity, by Paul Krugman, Commentary, NY Times: When it comes to domestic policy, there are two Barack Obamas.

On one side there’s Barack the Policy Wonk, whose command of the issues … is a joy to behold. But on the other side there’s Barack the Post-Partisan, who searches for common ground where none exists, and whose negotiations with himself lead to policies that are far too weak.

Both Baracks were on display in the president’s press conference earlier this week. First, Mr. Obama offered a crystal-clear explanation of the case for health care reform, and … a public option competing with private insurers. “If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal,” he asked, “then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”

But when asked whether the public option was non-negotiable he waffled, declaring that there are no “lines in the sand.” …

The big question here is whether health care is about to go the way of the stimulus bill. At the beginning of this year,… Mr. Obama made an eloquent case for a strong economic stimulus — then delivered a proposal falling well short of what independent analysts … considered necessary…, presumably,… to attract bipartisan support. But … Mr. Obama was able to pick up only three Senate Republicans…

At the time, some of us warned…: if unemployment surpassed the administration’s optimistic projections, Republicans wouldn’t accept the need for more stimulus. Instead, they’d declare the whole economic policy a failure. And that’s exactly how it’s playing out. …

The point is that … policy has to be good enough to do the job. You might think that half a loaf is always better than none — but it isn’t if the failure of half-measures ends up discrediting your whole policy approach.

Which brings us back to health care. …[R]eform isn’t worth having if you can only get it on terms so compromised that it’s doomed to fail. What will determine the success or failure..? Above all,… successful cost control. We really, really don’t want to get into a position a few years from now where premiums are rising rapidly, many Americans are priced out of the insurance market despite government subsidies, and the cost of health care subsidies is a growing strain on the budget.

And that’s why the public plan is an important part of reform: it would help keep costs down through a combination of low overhead and bargaining power. That’s … a conclusion based on solid experience. Currently, Medicare has much lower administrative costs than private insurance companies, while federal health care programs … pay much less for prescription drugs than non-federal buyers. There’s every reason to believe that a public option could achieve similar savings.

Indeed, the prospects for such savings are precisely what have the opponents of a public plan so terrified. Mr. Obama was right: if they really believed their own rhetoric about government waste and inefficiency, they wouldn’t be so worried that the public option would put private insurers out of business. Behind the boilerplate about big government, rationing and all that lies the real concern: fear that the public plan would succeed.

So Mr. Obama and Democrats in Congress have to hang tough — no more gratuitous giveaways in the attempt to sound reasonable. And reform advocates have to keep up the pressure to stay on track. Yes, the perfect is the enemy of the good; but so is the not-good-enough-to-work. Health reform has to be done right.

Originally published at Economist’s View and reproduced here with the author’s permission.

4 Responses to "Paul Krugman: Not Enough Audacity"

  1. Don Allen   June 27, 2009 at 2:36 pm

    Thank you!We need a Medicare type plan for the middle/working class. We need an end to a 30 year Republican Health Care Program that, like their Economic policies has bankrupted the country, businesses and the middle class.

  2. Young Economist   June 28, 2009 at 12:14 am

    Wrong both healthcare and climate change billThe climate change bill that recently passed is the bad example of the reckless policy. This applies for the domestic producers and if it does not apply to the imported goods, there will be the collapse of domestic businesses and US jobs from uncompetive domestic production. The governments are saying that the bill will create the jobs but that is in the case that we also have the tax and fee on the imported goods that are from the high carbon foreign production .Therefore, government should tax on imported goods the same as the domestic producers on the carbon emission. If there is the tax on imported goods with the high carbon emission, it will create some jobs in domestic industry especially in alternative energy and maybe US can get the oversea income from creating the organization to inspect the carbon emission, get fee from the certificate, and sell the new alternative energy. The oil price will be much lower from lower demand; therefore if we apply the bill to all domestic goods and imported goods, we will have the more jobs, more foreign income (lower trade deficit) and lower price or lower cost of living and cost of production.The recklessness is not enforcement of the bill on foreign goods and foreign production and it turn the economic situation worse, rather than better.

  3. bahmi   June 28, 2009 at 12:59 pm

    Krugman the underachiever once again. Obama tried to straddle the comment that it’s been said the govt. can’t manage anything well but somehow the health plan would put the private plans out of business. It’s very clear, unfortunately not to the Nobel prize winner that the govt. can manage, undersell, but still screw up the works and provide a plan that is only price sensitive but not successfully underwriting the needs of the people. What is so hard about understanding this duality? Krugman is a loser like some goofball Nobel Peace laureates like Arafat and Gore. Who says prize winners are great and good? It’s political baloney once again.

  4. Stanley King   July 3, 2009 at 9:39 am

    Government seems to run the 1400 VA hospitals efficiently.