Leviathan's Subcontractors

The veneer of a private sector is maintained as an ever more implausible façade for a hyper-regulated statism

by Mark Steyn

It took me years of living in the United States before I acclimated to certain uniquely American rituals. I noticed early, standing in the pick-up line at CVS or Rite Aid, that it took more time to collect a prescription than in any other country I've ever needed a bottle of pills in. But it was a while longer before I was sufficiently bored to start following the conversations of those two or three places ahead of me in line, as they argued over 78-cent co-pays, or suggested the clerk had perhaps transposed two of the insurance numbers, or explained that the problem might be due to their employer having recently switched from Blue Cross to Cigna . . . Filling a prescription in America is like going to a very fashionable nightclub: You can never be entirely certain the doorman will let you in.

It happened to a friend of mine the other day. Her monthly refill was denied late on a Friday afternoon so she had the weekend to prepare herself for the Monday-morning bad news that her health insurance had been canceled, without notification, and its cancellation backdated a couple of months just to add to the fun. Long story. They all are. Too long for this column, or indeed the average novella. Also very complicated. That's one of the advantages of the system. I confess, as a guest host for Rush Limbaugh on the radio, that my heart sinks a little whenever a caller wishes to explain the particular indignities heaped upon him by his health-care "provider," because generally it takes a good 20 minutes just to lay out the facts of the case, and even then it doesn't really make sense. I don't like to think I'm a total idiot. When an ISI guy from Islamabad expounds on the ever shifting tribal allegiances of North Waziristan, I'm on top of every nuance. When a London tax expert explains money laundering by Russian oligarchs through Guernsey and Nevis via Ireland and Cyprus, I can pretty much keep up. But when a victim of American health care starts trying to fill me in, round about 40 minutes in I have a strange urge to stab forks in my eyeballs. Except then, of course, I'd have to go to an American hospital.

Foreigners can't understand a word of an Obamacare conversation. The problem with health care in most countries is that they're third-party systems, which are by definition economically inefficient, whether the third party is government or private insurance. But that would be too obvious for us. So in America there's the patient and there's the doctor, and there's the insurer, who is provided through the employer, who outsources it to an employee-benefits-management company. By my count, that's a fifth-party system, on top of which Obamacare adds a sixth.

And if, somewhere between the party of the fifth part and the party of the fourth part, things come apart, well, good luck with that. As my friend was told, over and over, by the robot in customer service, "I'm just applying the new federal rules."

You hear that a lot these days. Unable to sleep the other night, I found myself reading the 2011 Federal Reserve rule "amending Regulation Z (Truth in Lending) to implement amendments to the Truth in Lending Act (TILA) made by the Dodd Frank Wall Street Reform and Consumer Protection Act":

The Board's proposed rule provides flexibility in underwriting standards so that creditors may adapt their underwriting processes to a consumer's particular circumstances, such as to the needs of self-employed consumers and consumers heavily dependent on bonuses and commissions, consistent with the Board's 2008 HOEPA Final Rule. See 73 FR 44522, 44547, July 30, 2008.

Sure, it sounds boring, but wait till you see Amending Regulation Z — The Musical. But here's the thing: Why should it be the job of a Federal Reserve "rule" to "provide flexibility in underwriting standards"? In a supposedly private banking system, shouldn't the guy sitting across the desk from the customers be allowed to evaluate his customers as individuals? Ah, but, as readers will have noticed, you can take your credit application to the First National Bank of Dead Moose, the First National Bank of West Dead Moose, and the First National Bank of Dead Moose Junction, and they'll all give you the same answer. They can compete on debit-card design and check-wallet color but ever less on banking services. For most Americans, there are many banks with different names, but increasingly, like the "private" health system, they're uniform enforcers of the federal rules: From the customer's point of view, it's a government bank in all but name.

Most countries decay into statism through nationalization: Britain nationalized health care in the late Forties, France nationalized the banks in the early Eighties. But that's not the American way. So the veneer of a private sector is maintained as an ever more implausible façade for a hyper-regulated statism: Big Government at one remove, subcontracted to nominally private paperwork shufflers across the land. In health care, banking, homeownership, college tuition, Americans now enjoy considerably less freedom of movement than citizens of openly statist nations in Europe.

As it happens, these are all the areas of life the prudent man is enjoined to take care of: Save for the future. Get an education. Buy property. Look after your health. Remorseless governmentalization of all four sectors is part of the ever greater sclerosis in America — and immensely time-consuming. My friend may well get her health care back, after weeks of effort. But so much of life is like that now, isn't it? Not the rough-and-tumble of a free society or the homogenized mediocrity of socialism, but just the vast diversion of so much American energy into shuffling around the regulatory obstacles to daily life.