Palpable Disdain

Let’s put aside the questions over whether a new national health care plan constitutes “socialism”, whether it will reduce or raise costs, or whether it will stifle innovation. These are all important issues, but I have another concern that is more mundane. Will this new government program work? On the basis of the government’s performance in other areas, no, it won’t….at least not for a long time.

Iraq: The 2003 invasion of Iraq took over a year to plan. Nevertheless, by 2007 it looked like the whole enterprise was going to be a dismal failure. Though military leadership and political courage turned the campaign around, the difficulties and delays make the Iraq war successful only under the rosiest of interpretations.

TARP: The Troubled Asset Release Program allows the Treasury to purchase up to $700 billion of hard-to-sell assets from banks so that banks can continue lending. Although there is only sketchy reporting of how the funds have actually been spent, it is clear that much has been misdirected:

Many U.S. banks that got federal bailout money misused it, a special inspector general overseeing the government's financial rescue program said Monday.

While most of the 360 banks surveyed said the Troubled Asset Relief Program money they got from Washington helped them make loans or avoid a drop in lending, 40 percent said they also used the money to shore up their capital to protect against losses, Neil Barofsky, the special inspector general, said in a report. However, TARP does not allow banks to recoup losses already incurred on troubled assets.

Cash-for-clunkers: the $1 billion program (CARS) to jump-start auto sales and retire older high-mileage vehicles was supposed to start on July 1st. However, procedures were only released yesterday, July 24th.

I wonder how many months we’ll have to wait after its signing to find out how the vastly more complex and costly health plan will work. The uncertainty and confusion will freeze a large sector of our economy as we try to recover from a deep recession. Only a political class that has never had to manage a new-product introduction and lazily leaves the details to be sorted out later could show such palpable disdain for those whom they purportedly serve. © 2009 Stephen Yuen