History may remember Barack Hussein Obama mainly for being the first half-black President. The successes and failures of today which loom so large at the moment may not be of any great significance from the distance of another century or two. Just looking back over the last 8 years, the dominating story about the world would be the financial crisis which started in 2008 and which we have not yet recovered from. In that picture there is nothing that Obama has done which stands out. History will only record that Obama’s efforts to first stop and then recover from the crisis were not particularly noteworthy – neither catastrophic nor very successful. It will surely be recorded that this period was extremely violent in the middle east and saw heavy intervention by the US and Europe to try and effect regime change in a number of countries. History will also record that the interventions in Iraq, Syria and Libya, in particular, in support of rebel groups to the existing regimes caused the rise and explosive growth – and success – of the Islamic State terrorists. It will be recorded that the reluctance of the US to challenge Saudi Arabia allowed easy financing of Sunni terrorist groups. Syria and the Middle East will go down as a spectacular failure of US foreign policy under Barack Obama (aided and abetted by Hillary Clinton and John Kerry). Right now it is the visible face of inept US foreign policy. Depending on what happens in the next year or two, this failure may become something that history will recall and connect with Obama. Or it may just get lost in the continuing maelstrom of the middle east’s bloody and barbarous politics.
When Obama was elected there was an expectation that he would improve the lot of US blacks. That has not happened. If anything it has become somewhat worse. There was a huge expectation of job creation but that has dawdled along in the wake of the financial crisis. During his term the introduction of “health care for all” and the Affordable Care Act was hyped to an extraordinary degree. Obamacare was going to revolutionise health care and make it affordable and available to all. This was going to be his primary domestic legacy.
But it seems that Obamacare has already failed. It does not seem that it could be the kind of success that would be remembered by history. For now it seems to be the most important domestic failure of Obama’s term in office. Whether the failure will be big enough to be remembered by history remains to be seen – but probably not.
- Obamacare failed because it flunked Economics 101 and Human Nature 101. It straitjacketed insurers into providing overly expensive, soup-to-nuts policies. It wasn’t flexible enough so that people could buy as much coverage as they wanted and could afford — not what the government dictated. Many healthy people primarily want catastrophic coverage. Obamacare couldn’t lure them in, couldn’t persuade them to buy on the chance they’d get sick.
- Obamacare failed because the penalties for going uncovered are too low when stacked against its skyrocketing premium costs. Next year, the penalty for staying uninsured is $695 per adult, or perhaps 2.5 percent of a family’s taxable household income. That’s far less than many Americans would pay for coverage. Financial incentive: Skip Obamacare.
- Obamacare failed because insurance is based on risk pools — that is, the lucky subsidize the unlucky. The unlucky who have big health problems (and big medical bills) reap much greater benefits than those who remain healthy and out of the doctors’ office. But Obamacare’s rules hamstring insurers. They can’t exclude people for pre-existing conditions, and can’t charge older customers more than three times as much as the young. Those are good goals, but they skew the market in ways Obamacare didn’t figure out how to offset. Result: Young and healthy consumers pay far more in premiums than their claims (probably) would justify in order to subsidize the unexpectedly large influx of older, sicker customers who require expensive care. Too many unlucky people, too few lucky people: That will collapse any insurance scheme.
- Obamacare failed because it allowed Americans to sign up after they got sick and needed help paying all those medical bills. Insurance should be structured so that, although you don’t know if you’ll need it, you pay for it anyway, just in case; your alternative is financial doom. But if you can game the system and, for example, buy auto coverage after you crash into your garage, then you have no incentive to buy insurance beforehand.
- Obamacare failed because it hasn’t tamed U.S. medical costs. Health care is about supply and demand: People who get coverage use it, especially if the law mandates free preventive care. Iron law of economics: Nothing is free; someone pays. To pretend otherwise was folly. Those forces combined to spike the costs of care, and thus insurance costs.
- Obamacare failed because too many carriers simply can’t cover expenses, let alone turn a profit, in this rigidly controlled system. Take Blue Cross and Blue Shield of Illinois, the state’s dominant Obamacare insurer. Last year, for every dollar the carrier collected, it spent $1.32 buying care and providing services for customers, according to BCBS President Maurice Smith. No wonder BCBS is proposing rate increases from 23 percent to 45 percent for its individual plans.
So while the failures of Syria and Obamacare will be the immediately remembered heritage of Obama’s presidency, neither may be of great significance in historical terms.
And then all that remains is that Barack Hussein Obama was the first half-black president of the United States.
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