Posted by Matt Hawes on 03/11/10 6:29 PM   [Newer: Health Care fight moving into final stages?] [Older: Ruling Blocks One Option for ObamaCare]

In a Politico piece out today, the Competitive Enterprise Institute's John Berlau and Jonathan Moore point to the bailout and subsequent practices of AIG as an example of what a public option in health care could look like in the marketplace.

Since September 2008, the government has infused billions into an insurer that provides coverage for cars, homes and business assets. Once this insurer got government funding, it began slashing premiums for many of the insurance policies it sells. Its private-sector competitors have cried foul, but new customers keep signing up.

Chances are that most readers have heard of this insurer - just not referred to as a "public option." Rather, it is known by its initials: AIG.

Though the primary argument for the government to pour more than $180 billion into American International Group's coffers was to save the financial system from the company's bad mortgage bets, the infusions have given the company an advantage over its rivals in its daily businesses....

AIG cut premiums by 34 percent, for example, to underbid three other firms and win renewal of a policy with the U.S. Olympic Committee, the Journal reported. It pried away a rival's contract covering the city-owned airport in Mesa, Ariz., by bidding about 30 percent less. The company assuaged concerns about safety and soundness by pointing directly to the government infusion that, it says, "strengthens [AIG's] capital positions."...

The Government Accountability Office and the insurance department of Pennsylvania are investigating whether the company has been charging inadequate amounts for the risks involved in its policies since it received bailout money.....

Read the rest

Posted 03/11/10 7:50 PM C00kieM0nster Oxnard, CA

Mispricing of risk due to implied bailouts from the endless pocketbooks of taxpayers. This is always a recipe for disaster. Eliminating the fear does not eliminate the danger.

Posted 03/11/10 9:21 PM Isomies Mechanicsville, VA

exactly. Just like FDIC insurance means nobody cares what banks do with their deposits, their is no due diligence. Same could be said about Fannie and Freddie, the Fed, etc. That's the great fallacy of a "mixed economy". It can not work. It will always lead to distortions, which will in turn bring about more political intervention, causing more distortions, ad infinitum. Also, don't forget to point out the gun behind all government action.

Posted 03/11/10 9:56 PM BruceKoerber Cedar Rapids, IA

Fascism is an intermediate stage of socialism and an enticement towards totalitarianism. Economic equilibrium will expose them to the wrath of their victims.

Posted 03/12/10 04:52 AM galtgulch9 Southborough, MA

All this talk of totalitarianism reminds me of a work by Hannah Arendt who wrote a fascinating book entitled The Origins of Totalitarianism. In it she discussed the nature of the totalitarian dictatorships in Germany and the Soviet Union. Our membership is approaching 229 thousand this morning. Growth continues but at a much shower pace than its first year when membership doubled several times. I am not the only one who hoped members would be eager to pass the torch and continue the redoubling into the millions. There is a division of labor and the efforts of each of us do count.Despite our 229 thousand it appears that only 100 of us are actively recruiting each day. It is a shame because we have the intellectual ammunition, the knowledge to pass on to our neighbors and friends who must share our concerns for the future of our country now in the hands of inept, ignorant, power lusting Chicago style politicians. In the early days of our country before the first revolution the threat to the freedom of those in the colonies was more evident to them. The Redcoats occupied Boston and would venture out into the countryside to secure powder from powder houses in the towns and villages to effectively disarm the farmers and villagers. Before the now famous attempt to arrest John Hancock and Sam Adams from Concord which began the revolution there was another episode now forgotten. In a book entitled Powder Alarm of 1774 we learn that word of an attempt to disarm the colonists near Boston by the Redcoats spread wide across the countryside. Word of mouth distorted the truth suggesting that there were fatalities. Minutemen came running from miles around numbering some 60,000 as far away as Connecticut, Rhode Island and beyond. If only the membership of the Campaign For Liberty were as inspired and devoted as the Minutemen of a bygone era. Another version of the events at Lexington and Concord by David Hackett Fisher called Paul Revere's RIde would also impress and inspire. It is too soon to take up arms. We still have Freedom of Speech and the Press and the RIght to Assemble and to Petition guaranteed in the FIrst Amendment. Enlighten the masses as urged by Thomas Jefferson before it is too late.

Posted 03/12/10 09:54 AM Willij4lib Everett, WA

This literally screams out as conflict of interest, special interest and corruption on a large scale. Why is something this apparent so obscured from view for so many? This is the part I keep asking myself, what is it I am missing about others? Why is there so few who can actually see these acts? Are the rest too busy to look? Don’t want to look? Too scared to look? It is far too simple to look? What is terrifying to me is some of these keep reappearing and they still don’t get the connection. Talk about the slap in the face by fellow citizens or it’s the over educated, I cannot tell which…