No, Obamacare's Failure Will Not Be The End of Big Government Liberalism

People who analyze politics and elections for a living are prone to breathless, sweeping proclamations of permanent realignment.  When George W. Bush was re-elected in 2004, most election analysts echoed Karl Rove's long-standing fantasy that a generation-long conservative Republican majority had just been solidified.  Two years later, the Democrats took back both Houses of Congress.  After the 2008 election of Obama, the same people who overinterpreted the 2004 election results returned to tell us that it was the Democrats who now owned the hearts and souls of American voters for the foreseeable future, and that the Republican Party had become a rump regional party of the South similar to the late 19th century Southern Democrats.  Two years later, Republicans picked up the House with a sweeping 63-seat gain in the 2010 midterms.  And after Obama's re-election in 2012, the hourglass was again set on the Republicans' demographic doomsday.  Suffice it to say that I think both parties will be equally strong, on balance, for the rest of my lifetime no matter how much the "coalition of the ascendant" is currently aligned with Democrats.  Political circumstances change and the painful consequences of governing a nation in systemic decline will always pivot the partisan allegiances of the governing party's coalition.

With that in mind, what to make of the disastrous rollout of Obamacare and its political consequences?  In the short-term, it probably means the Democrats are looking at a 2014 midterm election comparable to the 2010 midterm, losing a lot of their coalition from last year that will be rendered losers of Obamacare, functional website or not.  But the long-term political fallout is trickier to calculate.  Democrats will own Obamacare like a scarlet letter for a generation to be sure, but what about all the grandiose, overarching proclamations by histrionic political analysts and giddy right-wing columnists talking about Obamacare's failure representing the permanent death of big government liberalism?  To put it bluntly, ain't gonna happen.  Why not?  Because in today's America, voters have no other choice but government to avoid spiraling into Third World conditions.

Had Medicare proven as disastrous of a policy shift back in the mid-1960s as Obamacare appears poised to be today, it's very possible we would have seen a shift away from big government liberalism.  In a sense we did as the rest of the Great Society legislation was met with widespread voter revulsion and produced the shift towards conservatism in the 1970s and Reaganism in the 1980s.  But big government's overreach in the late 1960s occurred amidst the backdrop of an ascendant middle class who earned the vast majority of their incomes and benefit packages from the unionized private sector that they worked in.  Two generations ago, the majority of Americans could live without the help of activist government in a way they no longer can after nearly 40 years of declining wages and stolen benefits that have skinned and gutted the shrinking middle class.

That's why no matter how much blood is spilled with the implementation (and possible outright collapse) of Obamacare, voters will still look to government to clean up the pieces and provide them a worthy replacement.  Because even amidst Obamacare's hypothetical wreckage, there will be a complete vacuum of private sector remedies, as the puppetmasters in the private sector will respond to Obamacare's collapse in the same way they have responded to everything that's happened in American life in my lifetime....by consolidating resources for themselves and producing no viable alternative for the overwhelming majority of Americans whose grasp on maintaining their livelihoods is slipping more each year.

The demand for services that used to be provided by employers but no longer is will not disappear no matter how outraged Joe Sixpack is at government for Obamacare's failure. And government is the only game in town to fill the void.  If not government, then who?

Nobody.  That's why it's gonna be big government every single time.

Obamacare: The Democrats' Iraq War

Long-time readers of Mark My Words were aware of my long-standing misgivings about the Patient Protection and Affordable Care Act dating back to 2009.  While I understood the dilemma of having to pass a health care reform plan within the confines of the politically possible, the Rube Goldberg contraption that we ended up with for health care reform seemed like a minefield rife with pitfalls, any number of which could sabotage the legislation and the political future of the Democratic Party that single-handedly pushed it through.  For the last three years, I've anticipated the moment of the PPACA rollout, preparing for the worst but hoping these guys knew what they were doing.  But nothing could have prepared me for the extent of the ineptitude that has been Obamacare's rollout.

The primary issue has been the nonfunctioning website, which most people have simply rolled their eyes at, viewing it as the typical operational incompetence of the federal government, but not something cataclysmic for the law itself.  Whether that is true or not remains to be seen, but the longer the website is down, the more problematic it becomes for the implementation of the law itself.  Raising more eyebrows has been the recent revelation that Obama misled Americans with his promise that "if you like your health care plan, you can keep it".  While there were some grandfather clauses in the original legislation that made that claim technically true at the time, everybody tacitly understood it wouldn't hold up with newer policies picked up in the three years between the law's passage and its implementation.  The result is that Obama now looks like a used car salesman playing fast and loose with the facts and resulting in some health care consumers paying up to thousands of dollars per year more for their health care.  Whether the canceled policies were deemed "junk" or not, that qualifier is too complicated to sufficiently explain and be taken seriously following Obama's iron clad assurances in 2009 and 2010.

Predictably, Obama's approval rating  has dropped a few points in recent weeks, but we've only scratched the surface regarding the potential ill effects of the law and of the political fallout for the Democratic Party in 2014 and beyond, which is already making Democrats up for Senate re-election next year sweat.  Thus far, the public is mostly just shrugging and laughing about the website's failures, not making the connection for how it will affect their own health care premiums next year if this website situation isn't fixed.  And even though Obama's fibs about keeping your own plan have left a bad taste in the mouths of just about everybody on both sides of the political divide, only 5% of health care consumers are in the individual market, and most of them are small business owners, the self-employed, and farmers, who are generally already Republican voters and who hated the law before finding out the extent to which they would be screwed by it.  Don't expect the list of Obamacare "losers" to remain this contained in another 12 months.

On the list of Obamacare untruths, "if you like your plan you can keep it" may not even rank among the top-three by next year at this time.  A much bigger fib with the potential for much greater long-term damage is the delirious notion that Obamacare will "not add one penny to the deficit".  The public never believed that nostrum, and rightfully not.  There were a few inside baseball provisions inserted into the PPACA that could potentially reduce some costs in our dysfunctional health care delivery apparatus, but nowhere near enough to offset the Medicaid expansion or the subsidies offered to those in the exchanges.  The public is supposed to be assuaged about the fact that those being kicked off their current plans will be able to sign up for a more comprehensive plan, and even if they can't afford it, there are likely subsidies that will be able to help them.  But if as many people qualify for the subsidies as even the law's proponents suggest, that money's gotta come from somewhere, and that will almost certainly increase the deficit.

The administration insists it was a little surprised by how many states opted out of running their own exchanges and thus being dumped into a federal exchange that will be forced to serve far more people than originally predicted.  They also point to the successes of state-run exchanges thus far compared to the federal government, but even that is misleading.  Even in the states with most successfully run exchanges--Washington and Kentucky--nearly 90% of the people that have signed on have signed up for the Medicaid expansion.  Only around 15% have signed up for actual policies from the insurance companies, and the conventional wisdom is that most of those 15% are sick people with preexisting conditions, denied coverage up until now.  There's little indication that the uninsured 20-somethings needed to sign up for these policies to funnel money into the insurance pool are doing so, and in my opinion, little reason to expect they will.

If it's a choice between a $300-per-month insurance policy or a $100 per year tax penalty, budget-challenged young people will see little upside to the former.  And as for the latter, I still don't understand how this tax penalty will be enforced.  How will the government know who should have bought health care but didn't?  Everything is adding up to a reform plan where the economic model will not work, and I can't see how anybody ever expected it would even with a perfectly running website.  Since the PPACA's passage, I figured there had to have something I was missing which would make the complicated legislation make sense upon implementation.  Policy wonks like Ezra Klein and Jon Chait who are far smarter than I am insisted repeatedly this plan was structurally sound, and eventually I came to believe that they had to be mostly right.  But as of November 10, 2013, I'm less able to see it than ever before.

I guess I take partial solace that, after a rocky start, Massachusetts has been fairly successful with its health care plan that would later become Obamacare, but Massachusetts didn't have to deal with the systemic sabotage of an opposition party the federal the overseers of Obamacare will at the federal level.  And that leads us to the most sickening part of this sordid saga, the part where the monstrous cynicism of the Republican Party will be rewarded by voters, potentially for a generation to come.  From its inception in the halls of the Heritage Foundation and the brainstorms of Newt Gingrich to its original implementation at the hands of Mitt Romney when he was Massachusetts Governor, the Rube Goldberg contraption that is Obamacare IS the Republican template for health care reform.....yet the Republican Party has forced the Democrats to own it.  They have no fingerprints at all on the health care reform policy their party championed up until January 20, 2009, and they can and will point to every speed bump that emerges in American health care for a generation or longer to come as a byproduct of "what Obama did to them".

I get that the Democrats had to seize their narrow window in 2009 and 2010 to reform our disastrous health care system, but in retrospect they signed on to a terrible deal, both in terms of public policy and for their own political future. The toxic flotsam of Republican cynics and Democratic judases in their own midst first insisted on the passage of a health care reform plan designed first and foremost to placate insurance companies and preserve their extortionary business model rather than provide health care services to the American people, and then still walked away from the deal after they got what they demanded, decrying as "socialism" the very reform plan they not long ago offered up as a free market alternative.

Some of the most craven Republican cynics grandstanded at townhalls and on the floors of the House and Senate how health care reform should simply have consisted of a few tweaks to allow the uninsured and those with preexisting conditions to get coverage "rather than fundamentally change the entire health care system".  These guys are smart enough to know the economics of insurance doesn't work in a way where this was possible, but it's an effective sell to low-information voters worried about losing health insurance that they are satisfied with.  Ultimately, what the Democrats passed is likely to turn out much like what those grandstanders insisted upon, with only sick people joining the insurance pool and the people intended to bankroll them opting out, at which point we'll find out just how badly the economics for this are when we get our next health care premium notification in the mail.  And when that notification does come in the mail, far more Americans will have skin in the game for the failures of Obamacare than do today.....when Obama and his party are already losing credibility.  The new few election cycles look to be a bumpy ride for the Democrats, and it's astonishing how few people saw coming that it would be.