November 2, 2013

IF YOU LIKE YOUR INSURANCE, YOU CAN KEEP YOUR INSURANCE: James Taranto: When Fraud Is Legal: Under socialism, there’s no such thing as consumer protection.

The most salient difference is a way in which ObamaCare is worse than BHO Insurance Co.: The ObamaCare fraud was conducted irrespective of the volition of the “customers.” Obama and his compatriots were able to carry out their scam merely by twisting arms in Congress’s back rooms.

Legally, however, the two scenarios are entirely different. Whereas BHO Insurance Co.’s scam is against the law; ObamaCare is the law. Thus there is no evident legal recourse for those who were injured by Obama’s fraudulent promise. . . .

For the victims of governmental fraud, the only recourse is political, which is to say that it entails relying on the same government that perpetrated the fraud.

When it enacted ObamaCare, Congress relied on its constitutional authority to regulate interstate commerce. The Supreme Court held that Congress had exceeded that authority, but only with respect to one particular provision, the mandate that all individuals purchase medical insurance. There is little dispute that under more or less settled case law, Congress would be within its authority if it simply nationalized the insurance industry, or any other industry.

The regulation of commerce is a necessary and vital governmental function. Consumers and honest businesses need protection from unscrupulous market participants. That is nearly impossible when an industry is owned, or effectively controlled, by the government. To socialize an industry is to put it in a position to regulate itself. It legalizes fraud by recasting it as mere “political lies.”

Maybe people should suffer more for political lies. Incentives matter.

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