Wednesday, March 7, 2012

The Cost of Being Distracted

Leave it to James Taranto to get to the heart of the matter.

Taranto is the editor of The Wall Street Journal’s and writes the daily “Best of the Web Today” column. He has a very analytical style that makes sense of issues of the day that have been spun to death on TV and radio. And he has a hilarious sense of humor.

The latest epiphany he provided for me came on Monday, as he discussed the Sandra Fluke kerfuffle (one of his favorite words). He cited her quote, in testimony before Congress, that “[w]ithout insurance coverage, contraception, as you know, can cost a woman over $3,000 during law school.” Generally, the press let that assertion pass without scrutiny, preferring to focus instead on the rude words of someone with a radio show and whether that person had apologized and whether the apology was sincere enough and how many advertisers he would end up losing.

That’s where Taranto got to the heart of the matter. He pointed out that a journalist (John McCormack of the neo-conservative Weekly Standard) had actually checked out Fluke’s assertion and discovered that a course of birth control pills could be had for as low as 9 dollars per month from a Target near the Georgetown campus in Washington, D.C. That works out to $324 during a three-year stint at law school.

And that is exactly the crux of the matter. This is a prime example of something Taranto has pointed out very coherently in a number of columns. When government gets involved in something, the cost of that thing shoots up. Over the years, the more government has tried to help students pay for higher education (first by subsidizing private loans, then by making low-cost loans directly and by providing more and more outright grants), the more a university education has become wildly expensive. It’s a simple case of, when more money chases a product, that product will become more expensive. A similar thing happened with housing. The more the government pushed low-cost loans on the mortgage industry through Fannie Mae and Freddie Mac, the more housing prices shot up, ultimately creating a bubble.

I don’t know whether or not Sandra Fluke’s estimate of the cost of birth control was based on her own personal experience or if she simply quoted the highest possible price she could come up with, but if those products don’t cost that much now, they are certainly liable to by the time the government has finished mandating third parties to pay the bill. The more layers between the person receiving a good or service and the person providing the money, the more prices tend to go up. Many of us know that from such experiences as being quoted two prices from a mechanic, one for cash payment and a higher one if insurance is paying for the work.

The irony is that, before the fight over Obamacare started, surveys showed that most people were happy with the quality of their medical care except for the fact that it cost too much. And true to form, the government’s solution was to overhaul the whole system in such a way as to virtually guarantee that medical care will get even more expensive. And the proponents even had the chutzpah to claim, with straight faces, that it would reduce the national deficit. At the time the Congressional Budget Office validated that claim, working with assumptions that it had been given. It later had to concede that new entitlements that are part of the plan will likely add 4 to 6 trillion dollars to the deficit over 20 years.

Somehow the president, other politicians, the candidates for president and most of the press have all managed to talk about everything but this looming disaster. Instead they are talking about birth control.

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