Big Business Goes Big for Health Care Reform

Why drug companies and insurance providers are backing ObamaCare

"What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand," Frank Rich wrote in Sunday's New York Times.

That manipulation should disturb us. But contrary to Rich, it is not the work of "corporatists" who have sprung up to attack progressive reforms proposed by Obama and the Democratic majority. Manipulation is what we got many years ago when we traded a more or less free market for the "progressive" interventionist state. When government is big, the well-connected always have an advantage over the rest of us in influencing public policy.

Observe: Although President Obama and big-government activists demonize health-insurance companies, the companies "are still mostly on board with the president's effort to overhaul the U.S. health-care system," the Wall Street Journal reports; and ...

Although the activists criticize Big Pharma, "The drug industry has already contributed millions of dollars to advertising campaigns for the health care overhaul through the advocacy groups like Healthy Economies Now and Families USA. It has spent about $1 million on similar advertisements under its own name," the Times reports.

Big Pharma and Big Insurance want Obama-style health-care reform?

It's not so hard to understand. "The drug makers stand to gain millions of new customers," the Times said.

And from the Journal: "If health legislation succeeds, the [insurance] industry would likely get a fresh batch of new customers. In particular, many young and healthy people who currently forgo coverage would be forced to sign up." No wonder insurers are willing to stop "discriminating" against sick people. (Forget that the essence of insurance is discrimination according to risk.)

Not that Big Pharma and Big Insurance like every detail of the Democratic plan. Drug companies don't want Medicare negotiating drug prices—for good reason. If it forces drug prices down, research and development will be discouraged. (Depending whom you believe, Obama may or may not have agreed with the drug companies on this point.)

As for the insurance companies, they worry—legitimately—that a government insurance company—the so-called public option"—would drive them out of business. This isn't alarmism. It's economics. The public option would have no bottom line to worry about and therefore could engage in "predatory pricing" against the private insurers.

But despite these differences, the biggest companies in these two industries are on board with "reform."

It illustrates economist Steven Horwitz's First Law of Political Economy: "No one hates capitalism more than capitalists." In this case, big business wants to shape—and profit from—what inevitably will be an interventionist health-care reform. Can you think of the last time a major business supported a truly free market in anything?

In light of all this, it's funny to watch Democrats and their activist allies panic over the protests at congressional town meetings around the country. Tools of the corporate interests! they cry. But anyone opposing "socialized medicine" at the meeting can't be a mouthpiece for big business because, as we've seen, big business supports government control. Conservative groups may be encouraging people to vent their anger at congressmen who pass burdensome legislation without even bothering to read it, but that's no reason to insult the protestors as pawns. What's wrong with organizations helping like-minded people to voice their opinions? Why do Democrats, such as Speaker Nancy Pelosi, dismiss citizen participation as "AstroTurf"—not real grassroots—only when citizens oppose the kind of big government they favor?

They weren't so dismissive when George W. Bush was president and people protested—appropriately—his accumulation of executive powers.

"When handfuls of Code Pink ladies disrupted congressional hearings or speeches by Bush administration officials," Glenn Reynolds writes, "it was taken as evidence that the administration's policies were unpopular, and that the thinking parts of the populace were rising up in true democratic fashion. ... But when it happens to Democrats, it's something different: A threat to democracy, a sign of incipient fascism ... House Speaker Nancy Pelosi calls the 'Tea Party' protesters Nazis. ... "

So when lefties do it, it's called "community organizing."

When conservatives and libertarians do it, it's "AstroTurf."

Give me a break.

John Stossel is co-anchor of ABC News' 20/20 and the author of Myth, Lies, and Downright Stupidity. He has a new blog at http://blogs.abcnews.com/johnstossel. This column first appeared at Reason.com.

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