This Has To Be An Outright Lie

Frequent readers know I almost never call statements "a lie."  I try to take the position that reasonable people can disagree without either lying.  I hate all the "Lying liars and the lies they tell their lying supporters" type books.

But I simply can find no other way to explain this statement:

"There isn't anything we could do to satisfy them in this health care bill. Nothing," Senate Majority Leader Harry Reid (D-Nev.) said. "They are so anti-competitive. Why? Because they make more money than any other business in America today. . . .What a sweet deal they have."

I have written about this any number of times, but Carpe Diem also has the numbers at the link - health care insurers are well below average both in profit margin and return on capital, the two most common measures of profitability.  For the last couple of years, most large health care companies have made less than 5% return on sales.

The only other explanation is the neither the House Majority Leader, his staff, President Obama, or Nancy Pelosi and her staff (all of whom have echoed this same meme) have never once spent the 12 seconds going to Google finance or the Wall Street Journal to look the number up.

Nancy Pelosi once said:

I'm very pleased that our Chair of our Democratic Congressional Campaign Committee and member of the leadership will be talking too about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years. We all believe in the profit motive; we all want to reward success.  But having that success come at the expense of America's working families "” have that success come by withholding care, when a person becomes ill, is just not right and we're going to take this issue in a new direction.

Liberal pundit Kevin Drum, who really should know enough to look it up, once said:

It means the health insurance industry is scared that we might actually do something in 2009 and they want to be seen as something other than completely obstructionist. That means only one thing: they've shown fear, and now it's time to bore in for the kill and gut them like trouts. Let's get to it.


  1. Michael:

    Carpe Diem also posted a chart of the percentage of treatment denials by major insurance companies. Medicare had the highest percentage of denials.

  2. ElamBend:

    Because so many people get insurance, it's close to a utility. I'm sure these folks understand this and think that will all this money coming in, they must be loaded. Why would they think only about income and not expenses, well look at their experience. They belong to the biggest 'utility' of all, the government with 100% enrollment, enforced by law (I know 40% don't pay, but they have to file anyway to get the benefits). Plus, in their business they don't have to worry about profit margin because they can always print more money or tax more. It's a difference of perception based upon differing life experiences.

  3. wolfwalker:

    You overlook a third possibility, at least where the Bitch Princess's line about "the immoral profits being made by the insurance industry" is concerned. To a liberal, any profit made off supplying an "essential" service like health care is by definition immoral. Also unethical, excessive, obscene, unconscionable, and any other similar term. Doctors, hospitals, pharmaceuticals makers, health insurance companies -- all should be nonprofits, charging the absolute minimum required to recoup their own direct costs and not a penny more.

  4. Michael:


    I guess liberals use a double standard. The providers should be profit free, but they and their friends should be free to skim as much cash for themselves as they like. Health care and cap and trade create whole new areas for the trials lawyers to drain and funnel money back to the liberal politicians.

  5. Allen:

    It's immoral the amount of money Pelosi makes as a Rep. Her salary comes at the expense of America's working families.

  6. Noumenon:

    I much appreciate Perry supplying the Return on Equity rankings as well, even though I don't understand them.

  7. wolfwalker:

    Michael: The providers should be profit free, but they and their friends should be free to skim as much cash for themselves as they like.

    Of course. Because when a socialist does it, it isn't skimming; it's them taking their rightful due. As the Best and Brightest of the human species, they sacrifice their own happiness to shoulder the Intellectual's Burden of looking after the common folk. Plainly, no remuneration could possibly even be adequate for such tremendous nobility of spirit.

  8. morganovich:

    you may be overlooking an ever more sinister possibility:

    that reid, pelosi, etc have looked up these numbers and don't care.

    the point is not whether they looked them up. the point is whether they think most of the public will. few people love their insurance company, therefore it's easy to stir up antipathy and anger. they are an easy target. so long as few enough people check the facts, you can use you congressional bully pulpit to just lie. as lenin said "a falsehood repeated often enough becomes the truth".

    if our media were disposed to check facts and call liars out, we would be able to counter such, but in a day and age where media has firmly chosen political sides and will not criticize theior own, sowing disinformation becomes terribly easy.

    "The most effectual engines for [pacifying a nation] are the public papers... [A despotic] government always [keeps] a kind of standing army of newswriters who, without any regard to truth or to what should be like truth, [invent] and put into the papers whatever might serve the ministers. This suffices with the mass of the people who have no means of distinguishing the false from the true paragraphs of a newspaper." --Thomas Jefferson to G. K. van Hogendorp, Oct. 13, 1785. (*) ME 5:181, Papers 8:632

  9. wondering:

    Wouldn't ROI be a better measure to compare profitability ?

  10. Elliot C:

    Chilling indeed. I remember when the laugh getter was the governments reference to "Excess Profits" that came from some windfall or other random event (see: Hard Work).

    The worst to my thinking is that we are pretty much all in the service sector now. Very few manufacturers. As such, they have all our professions lined up to atack at their leisure as making "just plain too much" money.

    It's too scary to be amusing to see the newspapers and media loosing business by the minute and still unable to see any relationship to this and their long forgotten profession.


  11. Mesa Econoguy:

    There is yet another very plausible alternative: they have read this information, and do not understand it.

    I think this is probably the most likely possibility. GSPâ„¢