- The Washington Times - Saturday, February 11, 2006

After the State of the Union address, The Washington Post’s columnist Steven Pearlstein concluded Democrats and Republicans have nothing “original, credible or even mildly intellectually intriguing to say about… the health-care crisis, the energy crisis, the income inequality crisis, the education crisis, the global warming crisis, the looming entitlement crisis.”

He forgot the obesity crisis. Or bird flu. In that same paper, Marc Siegel noted: “Bird flu is one in a long line of things we’ve been warned about, and for which we supposedly need some kind of ‘safe room’ with an ample supply of food and water just in case. First it was anthrax, then West Nile virus, then smallpox, then SARS. In each case, we were warned that we had no immunity and could be at great risk. The national psyche has been damaged by all these false alarms.”

Unfortunately, the Bush administration has exhibited an unhealthy appetite for bankrolling FARI — the False Alarm Research Industry — which continually fabricates lucrative scare stories with 1 chance in a zillion of actually happening.

Whip up a dramatic hypothetical scenario, and nobody dares object to spending several billions, even on diseases that do not exist. Whenever some group starts advertising and writing about this or that “crisis,” it really means, “Please send us a really big check.” Numerous special interests, including those peddling drug stockpiles or seeking research grants, nurture an endless series of crises as a marketing ploy to pry billions out of the U.S. Treasury.

Once the money is in hand, last month’s crisis usually fades from the headlines to be replaced by a newer, more fashionable one. Mad cow madness lasted just long enough to restrict imports of Canadian beef or to enrich those shorting the stocks of hamburger joints.

Health, energy and education, on the other hand, can always be described as in a state of crisis with no further explanation offered or required. The word “crisis” has no meaning at all except that health, energy and education industries always use that pitch to beg for more federal loot.

Education is inherently unsatisfactory (a crisis) because governments and unions monopolize one-size-fits-all schooling, and lack of competition maximizes cost and minimizes results.

The “energy crisis” also graduated to a permanent affliction with creation of an Energy Department — the main purpose of which is to funnel cash to politically connected enterprises whose main purpose is to waste money.

The “health-care crisis” has nothing to do with health care. Lengthy articles have been written about this crisis without the slightest mention of how healthy or ill anyone is.

It turns out the alleged crisis is that some people sometimes have no health insurance. We would not say people without life insurance have no life, yet politicians do say those without health insurance have no health care.

Many don’t want health insurance, including self-employed healthy people — but what they want is not the point. Hospitals, doctors and drug companies worry they might not get paid unless taxpayers pick up the tab.

This pseudo-crisis is entirely defined by a constantly repeated estimate of 45 million uninsured, which is deliberately exaggerated. The figure comes from the Current Population Survey (CPS), which picks up those without insurance in a single month rather than a whole year. The Census Bureau explicitly warns “health insurance coverage is underreported in the CPS,” which means the number uninsured is overreported. The bureau’s more reliable Survey of Income and Program Participation last showed only 18.9 million uninsured for a whole year, or 6.8 percent.

This takes us back to Steven Pearlstein, whose more recent column made a major breakthrough on health insurance by wisely redefining one of his six crises. “Moving the country toward ‘catastrophic’-type insurance policies is indeed the way to go,” he argues, “a necessary step in getting Americans to be more value-conscious in their consumption of health care services. We know that Americans spend too much on health care and get too few results and that over-insurance is a contributing factor.”

Once we grasp that expensive health care is a result of widespread over-insurance rather than rare underinsurance, solutions become much simpler and cheaper. If we likewise come to understand the “education crisis” is a matter of too much federal intervention rather than too little, solutions will also become much simpler and cheaper.

And if we could all become just a bit more skeptical toward those peddling various crises for fun and profit, government in general could become much simpler and cheaper.

Alan Reynolds is a senior fellow with the Cato Institute and a nationally syndicated columnist.

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