FROM PLUTOCRACY TO PLUTOCRAZY.

HOW PLUTOCRACY TAKES CARE:

Krugman asked why it was that so many representatives in the USA were against the health strategy suggested by Obama, which incorporates a public health plan. I answered this:

The present day, private health care of the USA privatizes profits and socializes costs (because those who do not have insurance go to the emergency room). it is exactly the same strategy that the plutocracy follows as it does with the banks. Senators in love with the present health care are in love with the plutocracy. They love the hand that feed them. The worth of the average Senator is nearly five million dollars. Plutocracy is turning into plutocrazy. Alleluia!

On the serious side, a public health care system can only cost less to the nation than any private plan, because the later is laden with the profit motive. So any federal health care plan will out-compete any private plan.

Then the public plan will inexorably devour all the private health care plans, one after the other, state after state. That would be a tragedy for the plutocracy, really. Then the plutocracy would have increasingly to depend on gouging the public with banks and their shadows. That would be unbalanced, and would reduce the profits of politicians by reducing their sources of income, influence, and power.

Six hours later, June 22, 2009, 9:09 am on his blog, Krugman wrote this: "Competition, redefined: ... Sen. Blanche Lincoln [whines] about how terrible it would be if a government-run insurance plan undermined free-market competition, then Krugman and others observes that:

The Justice Department considers an industry to be “highly concentrated” if one company has 42 percent of the market. In Arkansas — Senator Lincoln should take note — Blue Cross Blue Shield has 75 percent of the market. If you take government self-insurance plans out of the equation, it’s higher. The state ranks as the ninth most concentrated in the country. Is it any wonder that insurance premiums have risen five times as fast as wages?

The truth is that the notion of beneficial competition in the insurance industry is all wrong in the first place: insurers mainly compete by engaging in “risk selection” — that is, the most successful companies are those that do the best job of denying coverage to those who need it most. But in any case, Arkansas is in effect a one-insurer monopoly state, with no competition at all — unless a public plan is created.
In fact, I may have a new hypothesis about the political economy of the health care fight. One thing that’s obvious, if you look at the balking Democrats I chided in the NYT 22 June column is that almost all of them come from states with small population. These are also, by and large, states in which one or at most two private insurers dominate the market.
So here’s a suggestion: while the opponents of a private plan say that they’re trying to defend market competition, what they’re actually doing is defending lucrative local monopolies.

Patrice Ayme
http://patriceayme.wordpress.com/