Ezra Klein’s Confusion Over “Rationing”
Ronald Baily at Reason does a good job debunking the common misunderstanding, as expressed by Ezra Klein, that the market “rations” our choices by making things too expensive. (Klein: “We ration. We ration without discussion, remorse or concern. We ration health care the way we ration other goods: We make it too expensive for everyone to afford.”)
Klein evidently thinks that market outcomes that he dislikes mean that government should step in and impose outcomes that he does like. . . .
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. . . “In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources.” The crucial question that Leonhardt [and Klein] misses is that “rationing” depends on who is allocating the scarce resources. It’s not rationing if an individual decides to spend his money on a 16-ounce steak—but it is rationing if he can only purchase a USDA prime rib eye when he has a coupon issued from a government agency. In other words, true rationing occurs when individuals are forbidden from spending their money on products or services they want to buy.
Or, if you prefer, a commenter posted this shorter version of an equally appropriate response: “Ezra Klein is a self-refuting argument.”
The article also references Charles Krauthammer’s explanation of why the health insurance industry is absolutely giddy with anticipation of Obamacare:
What’s not to like? If you have insurance, you’ll never lose it. Nor will your children ever be denied coverage for preexisting conditions.
The regulated insurance companies will get two things in return. Government will impose an individual mandate that will force the purchase of health insurance on the millions of healthy young people who today forgo it. And government will subsidize all the others who are too poor to buy health insurance. The result? Two enormous new revenue streams created by government for the insurance companies.
And here’s what makes it so politically seductive: The end result is the liberal dream of universal and guaranteed coverage — but without overt nationalization. It is all done through private insurance companies. Ostensibly private. They will, in reality, have been turned into government utilities. No longer able to control whom they can enroll, whom they can drop and how much they can limit their own liability, they will live off government largess — subsidized premiums from the poor; forced premiums from the young and healthy.