Obama, Political Hack

During the campaign for the Democratic nomination last year, President Obama rejected Hillary Clinton's call for mandated health insurance. He claimed it wasn't needed, that if health insurance were more affordable, people would buy it. During the presidential camapagn against John McCain, President Obama called McCain's call for removing the tax advantage of employer provided health insurance a tax hike.

Now President Obama has embraced both ideas in the space of two days (via the NYT):

One day after signaling a fresh willingness to consider taxing employer-sponsored health insurance, President Obama indicated yesterday a new openness toward a nationwide requirement that every American have health coverage.

I think the basic premise of Democratic plans to reform health care is false. They claim that we can cover everyone and reduce the cost, but that claim makes one wonder whether anyone on the left side of the aisle passed Econ 101. Quite simply, you cannot increase the demand for a product or service without a corresponding increase the supply of the product/service and expect to see a reduction in cost. All of the plans to talked about to date will increase the demand for healthcare and do nothing to expand the supply. It seems to me, based on my understanding of supply/demand theory, that this has to cause an increase in price.

Until someone devises a plan to address the supply side of the equation, all claims of cost reductions are either fantasy or an implicit call for price controls (which would exacerbate the supply situation). The only other option is to reduce demand through rationing of some sort. I don't think that's what most people who voted for Obama had in mind.

President Obama ran as a different kind of politician. He's not. He's just like every other career politician of either party. He said what he needed to say to get elected and now he's backtracking. I'm not surprised, but I wonder how all those independents and quasi Republicans who voted for him feel.