Obama’s prescription for disaster

30 Aug

Below are the prepared remarks I made at the New Jersey Doctors Tea Party meeting in Teaneck on Sunday (August 29, 2010).  The event was sponsored by the Association of American Physicians and Surgeons, the nation’s leading free market health care advocate.  Membership is open to physicians and the general public.  I urge you to join

Thank you Alieta for inviting me to speak today.  I missed the Doctors Tea Party event on August 7 in New Brunswick and am thrilled to be here today.   Please take notes the material presented today, it will be on the midterm.   Everything you hear today will be meaningless if the Mayan calendar is correct.

A brief nonprofit commercial first.  Tomorrow (Monday, August 30) my essay on how to create Bergen City from the 70 municipalities that comprise Bergen County will be posted at the Hall Institute of NJ website (

More than four years ago I gave a talk not far from here at Bergen Community College, The Coming Collapse of the Welfare-Warfare State.  During the Q&A I was asked when the collapse would occur.  I said 2015.  I was wrong.  The collapse is underway and may reach a climactic end in 2015 or sooner.

Massive government intervention in the economy, including medicine, is the reason for the coming collapse of our welfare state.   In other words, government not market failure is the cause of our ills.

Let me begin by asking a simple question:  Raise your hand if you think socialism is a good way to organize society.  Yet we have socialism in the broad sense, that is, government ownership or control of various sectors of the economy–roads, schools, medicine, energy, retirement benefits, banking, housing, etc. all around us.  Yet the American people and certainly virtually all elected officials can’t imagine a world where free markets and the nonprofit sector deliver all the goods and services they want.   Instead, our mixed economy has led us to national bankruptcy and massive unemployment.  There is a better way to organize ourselves.

A little historical perspective about economics and health care.  One hundred years ago, 1910, the famous or infamous Flexner Report was issued.  Abraham Flexner was not a physician or even an educator but he was hired by the Carnegie Foundation at the behest of his older brother Simon who was the director of the Rockefeller Institute for Medical Research.

What was the agenda?  To restrict the number of for profit medical schools and restrict the number of physicians in order the raise the income of AMA members, the establishment doctors who practiced allopahty, and insulate them from the competition of doctors who practiced homeopathy and eclecticism.    Incomes of doctors began to rise dramatically as for profit medical schools were closed and admissions were tightened in others.

This was the time–the early 20th century– that began the transformation of America from a relatively limited government republic to the mixed economy we have today.  In 1913 one giant leap forward occurred, the 16th amendment to the Constitution allowing the federal government to tax our incomes directly and the creation of the Federal Reserve later that year.  The FED is responsible for the bubbles we have been experiencing since then and the monetary debasement that has wiped out 95% of the value of the dollar.

But one of the most ominous developments in the history of health care took place in WWII when medical insurance became tied to work.  Because of wage-price controls during the war, employers offered a fringe benefit, medical insurance, to attract workers.  This was one of the most important economic and social phenomena in the history of our nation, because instead of having a vibrant market tailored to individual and family needs, medical insurance has become a political football.

Prior to WW II, the FDR New Deal cemented the foundation of the welfare state in America…with the creation of Social Security and many of the welfare state measures that have become entrenched policies even though they do more harm than good.

In 1952 some advocates of limited government thought Republican Dwight Eisenhower would begin to roll back the New Deal after he was elected president.  It didn’t happen.

After LBJ expanded the welfare state with Medicare, Medicaid and other big government policies, some limited government advocates thought the election of Republican Richard Nixon to the presidency would begin the rollback of the bigger welfare state his predecessor created during the 1960s.  It didn’t happen.

In 1980 Republican Ronald Reagan was elected president to get government of our backs by abolishing the department of education and department of energy and cutting back on other federal programs.  It didn’t happen.

In 2000 Republican George W. Bush was elected on a platform of no nation building, a humble foreign policy and holding the line on welfare state spending.    Instead, we got more federal government involvement in education, a prescription drug plan for seniors because the Bush administration low balled the costs for the next decade, and more than a trillion dollars has been expended and counting—all with borrowed money—to nation build in the Middle East and control resources from that that part of the world.   Fiscal conservatives were disappointed again as the federal budget exploded and deficits skyrocketed.  Republican policies led to the Democrats taking control of Congress, and the election of Barack Obama in 2008.

In other words, there is sixty year pattern here:  Republicans talk a good game about fiscal responsibility, limited government, etc., but have failed their constituents and the American people.

When I was the Libertarian Party nominee for governor in 1997 I spoke to a political science class at the Eagleton Institute on the Rutgers’ New Brunswick campus.  During the Q&A, one student asked me:  “Dr. Sabrin, you say you believe in free enterprise, limited government and personal responsibility, what makes you different than a Republican?”  I answered immediately,” I mean it!”

This brings us to the November elections and the economic effects of ObamaCare.

First, I am not confident that even if Republicans take control of the House and possible the Senate they will try to abolish ObamCare.  In a Wall Street Journal op-ed last week Grace-Marie Turner of the Galen Institute offers some suggestions to Republicans about how to deal with ObamaCare, if they take control of the House and /or the Senate next year.   Republicans, however, have no track record in rolling back the welfare state.  Why should this time be any different?

Let me also say something about rationing, which was brought up by Republicans during the ObamaCare debate.  There are two kings of rationing—by government or by the market.  The most efficient and ethical one is by the market.  Government rationing of medical care is where we are headed under ObamaCare.

Nevertheless, Republicans missed a golden opportunity last year and this year during the debate over ObamaCare to stop it with a little political jujitsu.   Republicans should have taken a page out of Mel Brooks’ movie The Producers.  The Republicans should have ridiculed ObamaCare and his administration with sarcasm and wit, just as Brooks ridiculed Hitler and the Third Reich in The Producers.

Republicans should have said throughout the debate leading up to the vote in March of this year that the Ivy Leaguers who make up the Obama Administration are just soooo smart, they should control health care; that’s why we want to express our supreme confidence in their managerial skills, wisdom and foresight by introducing a bill so we can reach the real goal of ObamaCare as soon as possible, a single payer health care system—Medicare for all.

GOP leaders in Congress should have offered the following:  all medical procedures including plastic surgery, you name it, will be covered by Medicare for all Americans and illegal immigrants.  No one in America would be denied health care because of their citizenship status.   Private insurance would be abolished and all medical bills would be paid for by Medicare.  All end of life care would be paid for regardless of the patient’s prognosis.  All infants who are barely alive will be taken care of regardless of the prognosis and the costs of treatment.  No expense will be spared to pay for health care ever again in America.    This proposal, as unrealistic as it seems, could be the future of health care in America if Democrats want to expand access to health care in America.  Or, the federal government could ration health care dramatically, so many medical procedures become unavailable for most Americans.

However, under ObamaCare as currently structured patients will suffer and the most politically connected will prosper.  In other words, crony capitalism will thrive under ObamaCare under the guise of helping the people.

Republicans should have given the American glimpse of the probable future of medicine under government control, if ObamCare is fully implemented.   Physicians would be required to work 60 hours per week to see every patient requiring medical attention, their incomes would be slashed because medicine would become a “calling” again instead of a profession.  To squelch opposition from physicians, the federal government could offer doctors free malpractice insurance, a major bone to keep doctors in line. That would be attractive to a lot of doctors.

If the Republicans win control of the House and/or Senate in November, they should introduce a bill calling for a single payer system, using the rationale I outlined here.  If the GOP does not get a veto proof control of both the House and the Senate next year, then it could not repeal ObamaCare.  However, the GOP could delay the most egregious aspects of ObamaCare as Ms. Turner suggests in her WSJ op-ed.

The debate over health care is really about what kind of society we want to live in.  Do we want to rely on the federal government for the most important things in life, or do we want to have control of our own lives?  That’s the paramount issue facing America today. So far the collectivists have been winning, but the laws of economics have not been repealed.  A crisis of enormous proportions is coming.  As we have learned, the answer has not been on relying on our Republican friends to make things right in America.  They have been as culpable as the Democrats for the mess we find ourselves in today.  That’s why we as individuals have to prepare for what may be the most tumultuous period in American history in the next few years.

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