Open thread for night owls: A captured government

Paul Krugman on state efforts to expand Medicaid by funneling new recipients through private insurers:

But you should really be outraged at the efforts of some states to ensure that the Medicaid expansion is done not via direct government insurance but run through the insurance industry. What you need to understand is that this is a double giveaway, both to the insurers and to the health care industry, because private insurers don't have the government's bargaining power. It is, bluntly, purely a matter of corporate welfare for the medical-industrial complex.

Oh, I guess you might believe that the relevant politicians sincerely believe that the magic of the market will somehow lower costs, despite overwhelming evidence to the contrary ' and that rewarding their friends has nothing to do with it. Hey, I have this bridge to sell you.

This really is one of those unambiguous cases. We know Medicaid is cheaper than private insurance. We know how much it's cheaper by, and why. Still, conservative efforts in several states have mirrored the national "Obamacare" battles and then some, demanding that if we're going to be getting health insurance, and therefore better health care, to citizens, we have to do it via private, for-profit insurance companies. Since we know that's both more expensive and less productive, it represents a rather unambiguous and very measurable state kickback to that single industry.

Given the dismal state of state budgets and the constant conservative clamoring for deficit reductions, choosing the considerably more expensive of two options seems a surprising choice. No doubt those involved would swear it is an ideological issue; it is worth having more expensive, less efficient services if it can keep government from having to administer the program (in this case, however, it would seem to simply add another layer of administrative complexity to an existing program, which would seem to defeat even that purpose.) And supposing it to be a crooked effort to make a popular but unloved-by-conservatives program more expensive and unwieldy as eventual justification for killing it outright later seems too clever by half.

As simple grift, though'a giveaway to a certain industry, and one of the set of industries with a strong lobbying effort, at that? It seems increasingly hard to suppose that there is anything more complex going on. Attempts to privatize the largest government programs, from Medicaid to Social Security (shuffling the latter to Wall Street coffers, because what could go wrong?) have been constant; the obvious pitfalls get ignored even after (again, using Wall Street as the reference) massive and painful demonstrations of those pitfalls. We continue to be told that private insurance simply "is" more efficient than a government-run program; that is, however, demonstrably not true. Period.

It speaks to current American government being a captured thing, at both the state and national level, and within both parties. Government is predisposed to corporatism of certain sorts, but only of certain sorts; it is the largest industries, and the most capital-intensive industries, that reap the rewards. The nuclear power industry (an almost prohibitively expensive market to enter) garners support that the solar industry does not. The largest banks enjoy federal protections that no other industry can match, and investors there are beneficiaries of tax carve-outs specific to the needs of high-stakes, high-capital gambling. Financial and insurance companies, utility companies and oil companies enjoy breaks in proportion to their lobbying efforts, lobbying efforts which are greater than those of other companies and market sectors simply because of sheer, sprawling size of the underlying corporations involved.

Funneling each government program through private companies in such a way as to knowingly cost taxpayers more and achieve less would seem plainly to be ideological corporatism, not merely conservatism, and certainly not populism of the sort the tea parties supposed themselves to be representative. The consistency of the message in all contexts and as response to all situations, over these years, also would seem to suggest that it is no mere problem of ineptitude.

A rather fully corporatized captured government now exists in all branches. The Supreme Court is far more consistent on corporate matters than it is on social ones. In the executive branch, it is now considered a given by both parties and all apparent ideologies that the economy will be managed by Wall Street figures, and primarily for Wall Street interests. Congress has been falling over itself in slapstick fashion to grant a parade of perks to certain industries, and to defend to the last dime any thoughts of the largest industries or their captains contributing to the national welfare as much as they once did. And the preference, again, is toward that small set of very large, capital-rich industries able to invest in a constant presence in legislatures or in Washington. Candidates like Newt Gingrich have owed their very campaigns to single, fabulously wealthy individuals seeking only a few promises; the winning nominee in that same race heralded from and was financed by the very industry most under public fire in the several years beforehand. The number of entities benefiting from the controversial Keystone pipeline extension are limited, but include one of the most prolific corporate political spenders in the nation.

It's not that certain parties want government to be smaller: They just want it to be outsourced. It's not that certain ideologies are vanguards against flagrant waste of taxpayer money: They merely demand the waste be funneled into corporate coffers. The definition of socialism has been defined down to government doing any good for anyone, especially when a for-profit entity could be doing it instead. And there is nothing, from prisons to education to wartime military logistics, that a for-profit entity cannot be promoted as doing instead.

The Supreme Court may be oblivious to the perceptions of linked corporate election influence and governmental corruption, in their own vigorous defenses of various corporate freedoms, but that seems only to further prove the point. The presumption of government as a vehicle for corporate wealth and entitlement has become so entrenched in government halls that the governing class themselves can no longer parse out what we lower, more corporeal classes are even going on about.

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