8.24.2009

Missing the point on the Public Option

Paul Krugman's latest scribbling on the health care debate is pure nonsense. He tries to blame the failure of the Obama administration and the Democrat leadership to sell their plan on Reaganism. In fact he blames the entire financial and economic mess that we are in on Reagan's views on deregulation and tax cuts.

In doing so Krugman is irresponsibly misleading - especially for a Nobel laureate - in his description of what Reaganism actually accomplished. I don't argue that there was deregulation in the 1980's and '90's, but Krugman's description is such that it gives the reader the impression that Republicans were so reckless that we ended up with no more regulation than just before the Great Depression. This is nutty.

The mess that we are in today is the result of a combination of ill-planned regulation and deregulation. The government interfered when it should not have - encouraging sub-prime mortgages through Fannie and Freddie while not providing appropriate penalties for making risky loans. This is not a failure of Reaganism, but a failure of common sense.

More to the point of Krugman's column, though, is the notion that Americans are fearful of any government action at any time. Again, this is far from the point. Most Americans understand that government action is sometimes necessary. We are willing to accept that the Fed has a major role to play in economics and agencies such as the SEC are necessary to keep businesses honest. What Americans fear in this debate is government intervention when none is necessary.

Americans are opposed to a public option because they don't trust the government to run something as complex as health care. They don't trust government to keep to a budget. They don't trust government to act in their best interests.

Given the government's recent track record - the bailout, the stimulus, cash for clunkers - it is little wonder why Americans are nervous about bigger and more expensive government. It also has a little to do with common sense: the White House just revised its budget projections up to $9 trillion in debt over the next 10 years. We can't afford the government we have now, why would we want to add more?

One would think that a Nobel laureate would understand that.