Government cannot compete with private industry

[krispos42]

One principle of capitalism is that government cannot compete with private industry. This is the principle that the Republicans like to point it.

And it's true... with caveats.



The government cannot compete with private companies... if the industry is competitive. Government agencies can't compete with the innovation that for-profit companies can generate.


If the industry is not competitive, if it's not innovative, then the government can compete very well with the private industry.

Consider the Post Office. Moving mail from Point A to Point B. No private company could match that. However, the government could not match FedEx and UPS in the innovation department when hand-held barcode readers and wireless internet access made express delivery and real-time tracking a reality. The USPS eventually followed suite, but had UPS and FedEx not led the field a few years ago it's not likely the USPS would have bothered to put in such a system. After all, the recipient can just call when they get the package, right? What's the fuss???




The Republicans are screaming that a public option would destroy the private health-insurance industry.

This is true. It is true because the health-insurance business it not competitive and not innovative.

And if it is not competitive and not innovative, then the business should have, long ago, faded into a quiet, safe, and marginally profitable segment of the US economy. Like, say, paper clips. Or Scotch tape. Or SD televisions.

After all, insurance companies work in US dollars... which have been around for about 220 years. They take dollars and they put out dollars. The same dollars that Washington got his false teeth repaired with, the same dollars that Lincoln used to pay for train fare, the same dollars that I used last night to buy 69-cent tacos at Taco John's.

But it hasn't. It's been artificially inflated through monopolistic business practices. The entire industry works diligently to make the process much more complicated than it actually is, simply because they can then profit from the infrastructure they've created to deal with the complexity.

After all, one thing that's not commonly mentioned by the Republicans is that the LAST thing business was to do is compete for business! Why on God's green earth would anybody want to compete? Do you really think that when Burger King opens up a restraint across the street from McDonald's, the owner of the McDonald's says "Oh goody, competition!"


The owner says "Oh, shit. Competition."

Competition serves the customer, which is every single person in this country. And it why business hates it. Monopolies are far more profitable and stable than the free market, which is why businesses destroy the free market as soon as possible.


It is our duty to keep the markets competitive through laws (such as regulation and taxation) and to make sure that industries that are mature and stable stay where they belong... secure and mildly profitable. Nobody makes a fortune on paper clips now... but when the idea was first introduced, it was patented and there was much innovation it the design and production of them.

The health-insurance industry has proven that they will not stay secure and mildly profitable, as a mature, non-innovative industry should and must be. Therefore, it's time to move this mature industry to non-profit status.

[imdjh]

1. k n r

[Cleita]

2. The problem is that delivery of health care should not be regarded as an

industry but a human right, not to be sold for profit. In ancient times, health care was delivered through temples. It was considered sacred. The supplicants made offerings according to what they could afford to the god of the temple for the priest/priestess/physician's services. Sure the Pharoah or King probably got a personal physician but there was still health care available to the lowest slave.

[krispos42]

5. I use common vernacular, but it's not really an "industry" to me.

When they're adding value to raw materials, that's an industry. IMO, at least, but I work in manufacturing, so I might be a bit biased... :-)


You have a right to be healthy and to get health care. The issue is, I guess, it is a Constitutional obligation. I don't care if it is or not, frankly. Congress has the constitutional authority to put one in place, and should.

It's pro-business (unless you're an insurance company) and it's pro-citizen. Healthy people make better workers and citizens, and freeing the citizens from the chains of employer-provided health insurance will create new small businesses AND relieve the burdens from the established businesses.


Most of the rank-and-file insurance employees will get jobs in the new government bureaucracy that replaces the insurance company one... the only ones that will be really left out to sulk away the years on their massive piles of cash is the executives.

Poor executives... forced to survived on their tens of millions of dollars of already-earned income instead of getting millions more a year.

:nopity:

[Cleita]

15. I don't mean to be rude and correct you, but in this instance I think we

need to be more particular in the words we use to frame this issue because the RW will use that vernacular to facilitate their spin. People will have a picture of the health care issue as another industry like software creation. I already saw one of the anti-govt. health care commercials hitting the TV screen just ten minutes ago. Also, most of the democratic industrial countries of the world have health care defined as a right in their constitutions. We need an amendment to do the same.

[abumbyanyothername]

19. Industry = manufacturing, Information = computer processing, etc.

Finance = masturbation.

[FiveGoodMen]

9. Excellent point.

[abumbyanyothername]

18. I do think that the "Money, money, money" people are really scared by this

Because if you start thinking about it, wouldn't we all, I mean at least 99.7% of us all, be better off without a for profit element in the delivery of just about anything.

[ipaint]

3. This is extremely important

The key to the success of other countries's hybrid (gov. and private) insurance systems is that the insurance companies must be non-profit to participate. They are also heavily regulated.

[RUMMYisFROSTED]

4. I disagree (unless I'm missing something).

The profit margin always increases cost for pivate industry.


LA-NY (.1 pounds)
USPS overnight: $13.05
FedEx overnight:$23.83

And that's a highly competitive industry.

[krispos42]

7. But that services would not even be available by the USPS until FedEx pioneered it.

They started it, they profited for a while, then the government agency caught up. And the USPS isn't quite as fast as them, overall, I don't believe. If time is a critical issue.


If there was a USPS-like company that was competing in the manufacture of, say, cell phones, then Nokia, Samsung, Motorola, Apple, Palm, and a few others would be kicking the government's ass in features, design, and price.

[RUMMYisFROSTED]

11. I guess I was missing something, lol.

However, without the USPS there wouldn't have been mail service in the first place. :think:


The USPS took Wells Fargo to the woodshed...eventually.

[Odin2005]

6. Excellent post. Something Libertarians don't understand, apparently.

[quaker bill]

21. When you replace

300 million dollar a year CEOs with 150K a year public administrators, government wins nearly every time.

[Odin2005]

23. Exactly.

[Xicano]

8. What about offering bonus incentives

for innovation and efficiency?

[krispos42]

16. How innovative can you be when all you pay is the bills?

At least, innovative in the good way. The insurance agencies have gotten very innovative in ways to deny coverage for customers, for example. And of course there are other ways to reduce costs, most of which involve not paying for tests or procedures or cutting payments to health-care providers.

There's a reason they make such large profits and are able to collectively pay their top executives hundres of millions of dollars annually in cash. Keep in mind that the head of the Department of Health and Human Services makes like $170,000 a year, with no stock options!

Remember, they are for-profit... by law their innovation and efficiency must increase the bottom line. They exist to makes money; the means that they use to make money is to provide health insurance coverage for their customers. And their profit is {money in} - {money out}.


It's not like, say, Medica actually heals you.... that's done by doctors. The insurance companies just provide the money. Doctors, surgeons, scientists, technicians, engineers... they all improve the quality and scope of health care. New drugs, new treatments, new technology, new procedures, new implants, new prosthetics. The insurance companies are doing the same basic thing that ancient Sumerians were doing 4,500 years ago with clay tablets and abacuses... basic accounting.



Also remember that a lot of time, money, and man-hours is spent on data-chopping to make "risk pools". When EVERYBODY is in the pool from conception to death, pretty much all that data-chopping and number-crunching becomes irrelevent. You can't delay paying for a treatment, hoping the person dies or that he'll change carriers, and there are no pre-existing conditions. There is strong incentive for preventative medicine, as opposed to "delay and pawn off on somebody else".



Also, your car insurance and homeowner's insurance will be a lot cheaper.

[readmoreoften]

10. The USPS pays a living wage. UPS and FedEx don't. That's why the government "can't compete".

The US has public research universities. It can develop gizmos just fine. But it can't make as much profit because it can't hire people for $9 an hour like FedEx does and it can't union bust like UPS does.

Look up the UPS strike.

[starroute]

12. It seems like there are really not two but three types of operations

1) Things like health care that everyone should have a right to regardless of income level. Or clean water. Or education. These are things that ought to be run either by government or by carefully regulated non-profits 00 and where there also needs to be a degree of redistribution so that those who can subsidize those who can't.

2) Mature industries like paper clips or newspapers that are not essential but that have a right to do their thing and be adequately paid for it, as long as they don't rip people off or attempt to use monopolistic practices to ensure an unnatural level of profits.

3) New, innovative, and highly competitive industries that are prepared to take significant risks for the sake of a major payoff. This is what capitalism was originally invented for and where it ought to be kept confined. Risk-takers are an important subset of the human species, but when they run out of real challenges and start mucking around with basic human needs or simple staple goods, they become a menace to society and need to be shooed back to where they belong.

[ibegurpard]

17. Agreed

Something things are just too integral to society to be left up to the whims of the marketplace: in my opinion those include healthcare, education, utilities, banking and transportation of goods.

[krispos42]

20. Well said

And stuff like clean water is something that governments do very well. It's mature and boring. It's something that should be done by a government agency (like a city) or by some kind of co-op. If the same people that were running the insurance agencies were running your local water supply, they would have laid several times the number of miles of piping needed, routed in a very complex manner requiring extensive staff to manage, convinced you that THEIR water was special and unique and it's was all about choice... and they would charge a dozen times what it used to cost. Oh, yeah, and you would never know if the water would come out when you turned the knob.

[stuball111]

13. Good Point

Thing is, there is a vast difference between for profit, and a social program. They are totally different dogs. And what could be more innovative than Universal Health Care? In Canada, advances in medicine are done by University programs, and by private industry, which does exist there. But the overall distribution of health care is done exclusively by Government. The proponents of private health care, and anything else that they scream about by saying that private industry can operate in a better way, such as the highways departments, are only looking to wedge themselves in between the consumer and the supplier to skim off profit. They CAN"T operate things any better because of the fact that the profit margin exists. If the Profit margin shrinks, then services and delivery is cut. Ever try to find an "associate" in a big store when times are tough? That's the first thing they cut back on,is man (and woman) power. The next thing is quality, thus, everything we buy now is made in China and is crap. Then, they close stores all together to save the holy profit margin, decreasing services so that you have to drive an extra 10 miles to get the crap made in China. The ironic thing is, that we have anti-trust laws here, which is supposed to create competition, and the Health care industry has a monopoly. Maybe Obama can point that out.

[notadmblnd]

14. I think the government relies on private corporations to bring innovation

I've never seen it any other way. I also don't think the government should compete with private industry. If it became the government's job to innovate, then when would there be time to govern? It seems kinda silly to me that someone thinks this is news

[dem mba]

22. K&R

I agree with you 100%.