Health insurance industry's 'new tone' was off key

The health insurance industry's gamble in playing footsie with ObamaCare has been a disaster.

Much like feckless Republicans who for years have tried to "reach across the aisle" or put forth a "new tone" to play nice with the liberals, the health insurance industry's deal with the devil is now ending the way seasoned Obama observers expected all along. 

And all of this would be funny except that the insurance industry - vital to a free market economy   - has mitigated its ability to make clear contributions to the national debate on health care.  Just like too many Republican candidates in years past - a certain Senator from Arizona comes to mind -- the industry was willing to go along with the trashing of the free market so that folks ignorant of how our economy works would hate them a tiny bit less. 

Never mind the little detail about free enterprise being the most efficient way to distribute goods and services, including health care, in all of world history.  Let's not risk trying to promote that message even though it's true. We just want to "get along."   Let's pretend Michael Moore has a point.

Heck, so many free market folks have "gotten along" for so long with the bashing of business that the U.S. Chamber of Commerce is now having to spend 25 million dollars to literally advertise the concept of free enterprise! Think about it.  How ironic.

For months, the health insurance industry has been a whipping boy of the Obama administration and liberals in Congress attempting to sway a frustrated public into hating insurance company bureaucrats more than they hate government bureaucrats.  Last week, those attacks were ratcheted up significantly by Chuck Schumer, Pat Leahy and others in the Senate. 

Meanwhile, the insurance industry has been pumping millions of dollars into advertising campaigns pushing the Obama care agenda while being part of the collaborations to draft the legislation in fact.  And quite often, these political ads played on the public's misunderstanding of what insurance is and in fact reinforced that ignorance, especially as it related to pre-existing conditions.

This is not merely Stockholm Syndrome. This is self-funded Super Stockholm Syndrome.  You know, first pay for your own kidnapping.  Then pay your own ransom. Then stay kidnapped!

Apparently, the wizards who run the strategies of the industry thought that they could thread the needle of accepting a little bit of public scolding in exchange for ultimately being protected from disaster by the final iteration of Obama-Care or Baucus Care or Bogus Care or whatever emerges.  Their intention was to accept any and all pre-existing conditions, even though that is the very antithesis of what insurance is.  In exchange, they would get a guarantee from the government that every American would be forced to buy insurance.

They were reaching across the aisle.  They were trying to bring a new tone to the process.  They were being bipartisan so to speak.

No.  What they were really doing is petting a rattlesnake.  Like the magnificent moderate Republicans who were surprised to find out that Obama is not some sort of transformative post partisan post racial candidate, the insurance industry has now run smack into reality.  This week they are getting a taste of what life under an administration and congress with an immense disdain for and ignorance of free market economies really means.

Damn, you mean that snake bites after all?  Even after we've been petting it?  Who knew?

Anyone who was paying attention to who Obama was, what he believes and the crowd he rolls with -- that's who.  Obama is a Chicago machine politician who has for years exhibited a profound hatred for the free market and the same for any political opponents. This is a man who said our Constitution is flawed because it does not address "redistributive change" adequately.

And the insurance industry is now learning what Chicago "pay to play" power means.  It means if you don't pay enough -- and you don't play nice enough -- we will take you out.

One salvo is in the Baucus bill -- or the vaporous language coming from the Baucus committee -- that plays many accounting tricks including reducing the "cost" of the bill by taxing insurance companies even more.  Also, there has been a pronounced increase in the rhetoric aimed at the insurance industry in the last few days, especially from Senate Democrats.

And the icing on the cake is a threat to now repeal the 65 year old McCarran-Ferguson Act, which gives some Federal anti-trust relief to insurance companies by making insurance a state regulatory issue.

Truth be told, this could just be a ploy by the Democrats. It is not clear what the impact of repeal might be. It might open the door to interstate competition, something the Democrats are not for since that alone would remove much of the impetus for Obama Care to begin with.

That is not the point of the threat from the Senate. The point is it will be easy to demagogue the issue to a public capable of enjoying the fruits of a profitable insurance industry without having a clue what insurance actually is and its place in a free economy.  Certainly it will sound tempting to increase regulation on the industry by removing their "exemptions."  You just know that Schumer and company are salivating at the thought of unfettered microphone time during the hearings.

Moreover, McCarran is almost 65 years old.  Democrats have controlled Congress for some 53 of those years yet it is suddenly a priority this week?  This is quintessential Chicago gotcha politics. I do not believe in coincidences.

But that is not even the most salient point.  The big lesson is that this is yet another example of those who truly do understand the wonders of the free enterprise system and America making the shallow and cynical calculation to pretend otherwise in order to carve out a softer landing for their own narrow interests.

Whether you are an exec from insurance, Big Pharma or the Big Three auto companies trying to make your deal with the devil to save some of your bacon when the entire system is slaughtered -- or a wimpy Republican trying to curry favor by being Democrat lite -- I submit you suffer from the same psychosis.

It is a mindset that has nauseated millions of conservative Americans to erupt into spirited Town Halls and marches across the country.

It is a narrow calculation that can only be made by someone with flexible principles, a blind spot to the big picture and a very soft understanding of and belief in American greatness.  It is the weak response of those who are driven by polls and focus groups instead of principle.  It is the opposite of leadership. It is appeasement.

It would be bad enough if it worked.  But it never does.  It has not worked for the insurance industry this week. It did not work for GM last winter.  It has not done Ken Lewis of Bank of America any good. 

It did not work for John McCain with his promise to "reach across the aisle" to reign in "unfettered capitalism."  It did not work for George Bush, who never bothered to articulate a principle because it would violate his and Karl Rove's "new tone."

It did not work for George Bush 41 and his "kinder, gentler" America nor did it work for Trent Lott when he gave away Republican power in the senate in the 90's to show good faith.

Petting a rattlesnake never works, because when you get right down to it, rattlesnakes do what rattlesnakes do.  They bite poisonously.  This week the insurance industry execs discovered what many clear thinking Americans knew months ago.  Any efforts to appease the Obama Administration will end in disaster. The industry's chickens have now come home to roost.

And as I said, it would be funny except that if they now lose the debate, we all lose too.