Monday, July 27, 2009

A Useful Way To Think About Health Care Solutions

I was very taken by Harvard economist Greg Mankiw's blog post about institutions and trust. He and I are of a like mind.

In sum, Mankiw asks, If you are more apt to trust government as an institution than free market competitors, AND you don't trust government run by Republicans, why would you put something as important as health care in the hands of the federal government, when historically Republicans run the government about half of the time?

Quotes, from Mankiw's post:
I tend to distrust power unchecked by competition. This makes me particularly suspicious of federal policies that take a strong role in directing private decisions. I am much more willing to have state and local governments exercise power in a variety of ways than for the federal government to undertake similar actions.


This philosophical inclination most likely influences my views of the healthcare debate. The more power a centralized government authority asserts, the more worried I am that the power will be misused either purposefully or, more likely, because of some well-intentioned but mistaken social theory. I prefer reforms that set up rules of the game but end up with power over key decisions as decentralized as possible.

I would add that even if the power is given to a well-intentioned and correct social theory, it will become distant, static, and inefficient as a bureaucracy develops and becomes entrenched. Certainly, this is a large complaint about the insurance giants, and they have nothing on the federal government in that department.