Why Obama Will Win

Susan Estrich, a Fox News contributor, has new article posted on the Fox News website regarding a friend of hers who will not be voting for McCain. I find Estrich's columns to be some of the most thoughtful, well-articulated, to-the-point left-wing writing I've ever said. After all the vitriol we tend to her in the left-wing news and blogsphere, coupled with a large dose of finger-pointing and idiocy from the right, it is refreshing to read her posts.

That being said, I think there's a subtle clue in this particular column as to why I think Obama will win. It isn't because he's the new face of change, or that McCain is a warmongerer, or anything like that.

I believe it is because Obama promises goodies. End of story.

Right now, we're in a bit of a financial crisis, and there's concerns of whether this crisis will continue to develop until we're in a widescale depression. On the minds of the people of the United States is not: "how am I going to work through this?" Instead, it is "how is the government going to save me?"

I understand very well that the government exists to protect us. It gives us our laws, it maintains a military against outside forces, it provides a legislative system to adjust laws to be fair, it offers an executive system to enforce those laws for our protection, and in even hands us a judicial system to ensure that disputes are settled, be they civil or criminal. This is all very moving, very touching, very assuring.

So the government protects us from outsiders (or at least it is supposed to), and the government protects us from our neighbors. But the big crisis in our nation, and why I think Obama now will win, is that many of us want the government to protect us from ourselves.

Now, Estrich raises legitimate concerns.

[Rosie] does not believe [McCain] will help people like her: People who are "lucky" to be covered by an HMO where the lines are endless and the care is too often haphazard. It was not her first choice, it was the only insurance she could get. Blue Cross twice rejected her, the first time because she took medication for gastritis. Gastritis? She was lucky to get coverage by the HMO. If she tried now, with arthritis and high blood pressure, not to mention a fussy stomach, even they would turn her down.

The problem of getting health care to those most in need is one of the hot topics in this presidential debate. Who should have insurance and how much that insurance should cover are vital questions. The answers people want is "everyone and everything." Obama wants to promise that; McCain doesn't. And for this, Obama is heralded as a savior, and McCain out of touch with the common person.

I don't necessarily understand the problem Rosie is going through. I have insurance and don't have any health factors that will greatly impede getting insurance. But my mother-in-law suffers from Rosie's problem. For a time she had some strange abdominal pains that no one could explain, and because of this health risk, insurance agencies won't cover her. She's lucky to be on her husband's plan, though it carries a huge deductable, but on her own, she's out of luck. That hardly seems fair, especially considering that in a crisis she could find herself facing backruptcy. No one with any amount of compassion would ever wish that on someone.

Politicians, especially those on the left, want to make sure everyone has insurance, as though health insurance is this magical entity that mystically reduces the cost of health care. But health insurance isn't a panacea by any means, and the idea of making sure everyone is covered ignores the very principles that makes insurance work.

Insurance isn't a basic right owed anyone. If any thing is a basic right owed, it might be the health care itself, which is a subtle distinction, and even then there are arguments to make about it.

Insurance is really just a business. People who started insurance noted that personal disasters can be devastating and practically impossible to recover from. But such disasters are relatively rare. Now, in normal course of events, back in the days when we actually cared about our neighbor and didn't have the government looking over our shoulders to ensure we played nice and fair, lest there be a lawsuit, if one of our neighbors fell into hard times, everyone (or at least a large number of people) pitched in to help. They provided food, water, and shelter, and contacted a friend who had a brother who knew a person who could employ the downtrodden unfortunate.

In some ways, though, this neighborliness can be inefficient and no effective enough. In a small community, no one is going to be able to provide the $6 million needed for the lifesaving operation to rescue the victim of a terrible accident from the brink of death. Thus it isn't necessarily effective. Furthermore, even if at some point in time the community could have afford the $6 million, there was no guarantee that $6 million would be at hand when needed. Thus it isn't necessarily efficient.

The insurance people then offered a service. They would regularly collect small donations that would be put into a fund. When disaster hit, disaster beyond the economic capability of the members, money would be drawn from that fund to aid the victim. It was more efficient because regular payments meant a continual, calculable, and immediately accessible source of money, and if it could attract enough customers, from many communities, then it would be more effective, as well. Of course, since the insurers are offering a service, a portion of those payments would go to salaries.

Now, insurance agencies cannot cover everyone. In order to survive, in order to be capable of helping its customers, it has to have a relatively large body of low-risk customers. It has to rely on the probability that most of the people who pay insurance in fact will never need the insurance. And this immediately creates tension. People at high risk of cancer--like my grandfather, who smoked like chimney and drank like a fish--are those who will most likely face expensive medical procedures beyond their economic capabilities. But these are the people insurance agencies want to cover the least, because they will in turn need large withdrawals from the funds. It is almost self-contradictory. Insurance exists to help people who have to pay enormous amounts of money, and yet if insurance covers those people, it risks going out of business due to have all its funds drained dry.

There are a lot of calculations that need to be made in order to determine, then, who to cover and who not to cover. The agency has to take on some amount of risk, for otherwise it cannot cover anyone. But how much risk is a difficult balancing act. If an agency discovers that 75% of smokers require expensive surgeries, respirators, or other medical services, that agency might decide that covering smokers is too risky. The payouts will be more than the pay-ins, and the company cannot keep afloat. But if the agency instead discovers that only 30% of smokers require expensive treatment, then it might be willing to gamble by covering smokers.

Obama wants to offer health insurance to every American, regardless of medical history. It sounds nice. Those like Rosie and my mother-in-law would finally be able to have insurance. It would certainly be a relief and a boon, especially as the financial crisis tightens budgets, increases unemployment, ruins retirement plans, and cast a cloud of doubt on the future. But the question becomes: if offering health insurance to everyone can be done, why hasn't it been done?

There are two potential answers. One is that the insurance companies are greedy and would rather rake in the money and never pay it back out. The other is that the insurance companies are already stretched as far as they can go, and taking on additional risk would endanger them. If too many risky customers demanded payments all at once, the company could go under.

You know, now that I mention it, that sounds remarkably like something else I've heard about just recently. What was it? Oh yeah! It had something to do with the Democratic government demanding that mortgages be offered to people that couldn't quite make the credit checks, down payments, and other factors required for qualification. When all those people couldn't meet their payments when the housing bubble burst and the economy slowed down, what happened to all those banks? That's right, they collapsed, forcing us to attempt a $700 billion bailout plan.

Of course, the analogy only works if the second case holds, the case where insurance companies are already taking on as much risk as they think they can afford. Who knows? Maybe Obama is right in thinking the insurance providers can take on unlimited amounts of risk and not suffer for it. It's a nice delusion.

The problem isn't that McCain is out of touch with the ordinary person. The problem is more that McCain doesn't have a satisfactory answer for the ordinary person. What is he supposed to say? If he toes the line Obama is, wouldn't he be saying "Well, I'll make sure you get insurance at the risk of the whole system collapsing in ten or fifteen years, just like the mortgage agencies"? Or maybe, "I'll make sure you get insurance, but at the cost of thousands of people losing their jobs as high taxation slows the economy down and forces companies to lay off their workers?" If he follows his principles, could he possibly hope to win by saying, "Sorry, but I can't make thousands of people suffer just for your benefit, so you'll have to regretably fall through the cracks" or "the reality is the government simply can't guarantee you insurance, so you'll have to rely on providence and your neighbors"? Of course he can't say anything like that. But that doesn't mean he's out of touch.

But Obama offers the goodies, which must mean he's in touch with the ordinary person. And that, of course, is why he'll make the presidency.