R and R: Nope, not rest and relaxation,

but railroads and regulations.

My every-morning must-read, Mike Allen’s column for Politico,* offered-up this juicy morsel about healthcare reform, from today’s Los Angeles Times.**

Here is the gist of the article:

The half-dozen leading [healthcare] overhaul proposals circulating in Congress would require all citizens to have health insurance, which would guarantee insurers tens of millions of new customers –many of whom would get government subsidies to help pay the companies’ premiums.

” ‘…It’s a bonanza,’ said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc.

“….Laszewski said the industry’s reaction to early negotiations boiled down to a single word: ‘Hallelujah!’

“The bills vary in the degree to which they would empower government to be a competitor and a regulator of private insurance. But analysts said that based on the way things stand now, insurers would come out ahead.

” ‘The insurers are going to do quite well,” said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. ‘They are going to have this very stable pool, they’re going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide — plus their administrative costs.'”**

What has this got to do with railroads, you ask? Well, the answer is in this book: Railroads and Regulation: 1877-1916, by Gabriel Kolko.***

Kolko’s central thesis was as follows:

” ‘….large-scale units turned to government regulation precisely because of their inefficiency’….Kolko…broke new ground with his critical history of the Progressive Era. He discovered that free enterprise and competition were vibrant and expanding during the first two decades of the twentieth century; meanwhile, corporations reacted to the free market by turning to government to protect their inherent inefficiency from the discipline of market conditions….Kolko’s thesis ‘that businessmen favored government regulation because they feared competition and desired to forge a government-business coalition’ is one that is echoed by many observers today.'”

Kolko taught us that far from fearing or disliking big government, big business welcomes big government–because of big government’s unique ability to shape the playing field and protect the interests of those already on it. To quote Billie Holiday: “Them that’s got shall get; Them that’s not shall lose.”****

Think “cash for clunkers” on this, its last day.

Ah, August.









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