David R. Henderson  

Health Care: Finally Some Good News

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Ben Stein writes:

But among the glorying, there was little or no mention of my former boss, Richard M. Nixon, and this was a monstrous wrong, one of an innumerable number of wrongs directed at Mr. Nixon. The flat truth is that in February of 1974, with the hounds of hell baying at him about Watergate, with a national trial by shortage underway after The Arab Oil Embargo, with the economy in extremely rocky shape, and with large Democrat majorities in both houses of Congress, Republican Richard M. Nixon submitted to Congress a national health care bill in many ways more comprehensive than what Mr. Obama achieved.

Mr. Nixon's health care plan, sent up to Congress in early February 1974, would have covered all employed persons by giving combined state and federal subsidies to employers. It would have covered the poor and the unemployed by much larger subsidies. It would have encouraged health maintenance organizations. It would have banned exclusions for pre-existing conditions and not allowed limits on spending for each insured. I know a bit about this because I, your humble servant, as a 29 year old speech writer, wrote the message to congress sending up the bill.


How is this good news? Simple. We almost got this same lousy plan 36 years ago. In my more pessimistic moments, I think that the best I have done is help hold off further bad things that will ultimately pass. This Stein article reminds us that this bad thing was held off for 36 years. So my glass-half-full perspective is that 36 years was a nice long time to be free of this further government oppression. It's roughly the whole of my adult life.

If memory serves, one of the biggest sticking points between Nixon and Ted Kennedy, which they never managed to resolve, was over what percent of the payroll tax would be on employers and what percent on employees. Those who understand the economics of tax incidence will appreciate that irony, at least for the long run when wages can adjust. In fact, when I taught tax incidence in the late 1970s, I used this as an example.

Two comments, though, about Ben Stein's treating Nixon as a helpless waif wronged by others. First, "the hounds of hell" of Watergate wouldn't have been baying at Nixon had he not covered up Watergate or, at least, wouldn't have been baying nearly as loud. As Jim Carrey says in "Liar, Liar," when his criminal client who is caught for stealing asks what he should do, "Quit breaking the law, a**hole."

Second, Ben surely knows--his father Herb, my boss, did--that the OPEC-engineered reduction in oil supplies could not have cause a shortage without Nixon having imposed price controls. As I wrote ( http://www.davidrhenderson.com/articles/0902_sorrysaddam.html) in a 1990 Wall Street Journal article:

As long as the government avoids imposing price controls, any cutback in supplies that Saddam causes will translate into higher prices, not shortages. That is the lesson learned from the 1970s. Countries like the U.S. that impose price controls caused Soviet-style queues. Countries like Switzerland that avoided price controls made it through the 1970s with no lines.

HT to Anthony Gregory


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