President Obama is still trying to downplay the launch failure of ObamaCare as if it were just a few glitches on a website.
No, it’s much more than that. It is a timeless demonstration of the failure of central planning, government regulations, and the entitlement state. It is a failure so total, so comprehensive, and so multifaceted that it will be studied by schoolchildren 50 years from now when their teachers explain to them why the giant welfare and regulatory state built up in the second half of the 20th century collapsed in the first half of the 21st.
The lessons of that failure will not be new lessons. They’re the ones we should have learned in the 20th century, when we had plenty of examples to draw from. But a generation has grown up that doesn’t remember the 1970s, the failures of socialism, or the depredations of Communism. And because those topics are not yet part of a standard school curriculum, we’ve had to relearn them in the School of Hard Knocks, with Professor Obama giving us a refresher course.
In the hope that we won’t have to learn this all over again another thirty years from now, here are ten big lessons from the launch of ObamaCare about why big government fails.
1. There’s no such thing as a free lunch.
We’ve already seen about a half-dozen stories like this one, in which an Obama voters declares, “I was all for ObamaCare until I found out I was paying for it.” Or as another one puts it: “Of course, I want people to have health care. I just didn’t realize I would be the one who was going to pay for it personally.” Well, who did he think was going to pay for it?
The entire middle-class welfare state, to which ObamaCare is the latest addition, is an attempt to make the middle class into a constituency for big government by promising them endless benefits, from free health care to a guaranteed income, with no costs, consequences, or trade-offs, and no strings attached. Everything is supposed to be paid for by “the rich,” which means anyone who makes a dollar more than you. But when the law is passed, a whole chunk of the middle class finds out that they are the ones getting fleeced for the benefit of anyone who makes a dollar less than them.
If you want to figure out the winners and losers of ObamaCare, it’s not so much about the rich versus the poor. It’s this: the more you are productive and self-supporting, the more likely you are to end up paying the freight for everyone else. That’s what promises of a free lunch always amount to: punishing the productive and rewarding the unproductive.
What do you suppose are the long-term consequences of that kind of system? Well, let’s start by looking at what the regulatory state does to productive people, which is our second lesson.
2. Regulation stifles production.
How did the president who deployed state of the art information technology for his re-election campaign manage to botch the website for his signature piece of legislation? Listen to this explanationfrom some of the Obama campaign’s own Web guys: “The government has to follow a code called the Federal Acquisition Regulation, which is more than 1,800 pages of legalese that all but ensure that the companies that win government contracts, like the ones put out to build HealthCare.gov, are those that can navigate the regulations best, but not necessarily do the best job.”
In other words, when you pass a lot of regulations, it only makes people good at following regulations. As I replied: “But what do they imagine ObamaCare is, if not a massive set of new regulations? If a mere 1,800 pages of federal procurement regulations cause 94% of federal IT projects to fail—how about the 2,000-plus pages of the Affordable Care Act?”
A truly creative, productive mind answers to only one “regulator”: reality. It looks at facts and results and figures out what is actually required to get things done, rather than following some arbitrary set of rules. But government regulations put precisely such rules between a worker’s mind and reality. That’s how the federal government ended up launching a system that had been tested against every clause and subsection of the Federal Acquisition Regulation—but hadn’t been tested to see if it would work in the real world.