Coyote Blog

The leftish political strategy for over 100 years has been

1. Regulate something
2. Blame the free market for inevitable disruptions caused by the regulation
3. Use the above to justify more regulation
4. Repeat

Obama's speech has a classic example of this:

So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company. Without competition, the price of insurance goes up and the quality goes down. And it makes it easier for insurance companies to treat their customers badly "“ by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.

This is ENTIRELY a situation manufactured by government and specifically state regulations.  States prevent out of state insurance companies from competing in the health insurance market.  Think you have the same Blue Cross/ Blue Shield I have (or used to have)?  Wrong.  I have Blue Cross/Blue Shield of Arizona.  You have Blue Cross/Blue Shield of whatever state you are in.  If Amazon.com had to create 50 separate state entities all with wildly different regulatory structures, you can bet they would focus on just a few states and there would therefore be a lot less competition.  Obama HAS to know this is true, so this is just a cynical argument aimed at the ignorant and uninformed.

By the way, what evidence is there that having 75% of the market in 5 companies is too concentrated?  I have been in a lot of industrial markets that were far more concentrated than that which were brutally competitive.

Mises Institute presents a study whose results are fairly unsurprising for any who is not a socialist or member of a teachers union.  The study

showed that private schools are more efficient -their students perform better at lower costs- than public schools and moreover that the presence of private schools in one locality improves the efficiency of government schools too, presumably because of the pressure from competition.

The only real surprise was the study's source:  the department of education in Socialist Sweden.  As you can imagine, the powers that be were not amused by the results:

The teacher's union became enraged at the results as was prime minister Persson and education minister Ibrahim Baylan .

The end result, though, was ENTIRELY predictable.  Did anyone in power change behavior or their opinion?  Nope, they just hid the report and moved on:

After [education minister] Baylan publicly blasted the report (needless to say without using any real factual arguments) the Agency for Education officially disavowed it and simply withdrew it from their web site and stopped giving out the printed version of it.