I live in a very conservative state. Most of the people I meet resent the Federal Government and strongly opposed the Troubled Asset Relief Program that they see as a bailout of overpaid Wall Street bankers who made bad bets on the housing market. The problem is they want to do the same thing themselves and hope that the Supreme Court will let them.
To illustrate, I’ll use a fictional person: Beauregard. Beau works for $13 an hour fixing tractors and other farm machinery in a small garage in a rural township. He’s 32 years old with a long-time girlfriend who has a small child. He drives a battered Ford pickup and lives in a rented house at the edge of town. Until a couple of years ago he never voted. But he was so incensed by the bailout of the Wall Street banks, insurance companies, and then the car companies that he began to help canvass his neighbors for an insurgent candidate for the House of Representatives. The people working on the campaign were “his kind a folk.” Just like him they resented paying taxes to a federal government that then handed the money to fat cat bankers because they had been stupid or greedy, or both. The banks and insurance companies had made bad investments in the housing market but instead of bearing responsibility for their errors and bearing the financial loss or losing their jobs (or both) they were made whole by the largesse of the federal government. Their exorbitant pay has continued and their bonuses increased. The same Wall Street types then fought hard and paid well to stop the government from increasing regulation designed to prevent them from bringing down the economy in the future through their stupidity and greed.
The financial meltdown in 2008 was not just the result of Wall Street gluttony and stupidity. Many players contributed from naïve home buyers, to greedy mortgage brokers, Fannie Mae executives, an ideologically tainted Chairman of the Federal Reserve, and a President and Congress that pushed for wider home ownership. This was a complex financial system that almost imploded because too few people took the trouble to think through the consequences of a rapid rise in the price of houses and household debt. In some measure this is to be expected. As the diversity of desires and interests among the agents increases, the system becomes ever more complex and less comprehensible to its participants even as they make it, and less manageable by governments.
Beau doesn’t understand the details of what caused the financial problems but he instinctively understands that it is wrong to get someone else to pay for your errors. When he screws up a repair job, he accepts his boss’s cuss words and fixes the problem. He wants to do good work and (usually) admits his mistakes. So he cannot understand how a CEO of an investment bank who was paid more than $300 million (numbers Beau can barely comprehend) over a decade can tell Congress that he does not understand why his bank failed and still not get jail time or even something worse. The pain and suffering throughout the economy that they have caused seems like a hanging offense to him. His two brothers lost their jobs in the recession caused by the Wall Street mess and old Mrs. Hubbard down the road lost her house. “That just ain’t right.” People should be responsible for themselves and should not need a government to tell them how to live their lives or fix the problems that they cause for themselves. The government should help people who are harmed by others but not if they screw themselves through their own faults.
But it was not just fat cat bankers that got Beau all riled up. He also hates what he calls “Obamacare” because it will force him to buy health insurance. His boss says he can’t afford to pay Beau’s health insurance and Beau can’t afford it himself. But he doesn’t really need insurance: he hasn’t missed a day’s work in years. And nobody should be telling him to buy something he doesn’t want.
There is a disconnect here. The individual mandate in the Affordable Care Act is designed to prevent the same “free-rider” problem of “too-big-to-fail. If people accept the risk of living without health insurance, they should bear the full, actual cost of health care when they get sick or injured. The individual mandate is designed to make sure that people take responsibility for the risk that they will need health care in the future.
To reject the individual mandate is to demand that we have the freedom to take essentially the same type of risk as the leaders of too-big-to-fail banks: I have more money if I stay healthy but I don’t have to pay for getting sick because someone else will pick up the tab. When an uninsured person (often one of the working poor like Beau) arrives sick or injured at the emergency room, the law requires that they have to be treated. The emergency room is Cadillac care intended for critically ill but everyone else pays when it treats the uninsured. A free-rider problem.
The only solution is to either require that everyone has insurance or deny the uninsured health care when they need it. That is the personal responsibility that Beau and others are demanding bankers should have. It is, therefore, strange that many of the same people who rant about government bailouts of banks and corporations oppose the individual mandate. Perhaps, they feel that if the big guys can live off others, they should be allowed to as well. If enough people think that way and behave accordingly, the system will change and the United States will become something it has not been before. Heads I win, tails you lose . . . and we all lose.