Much can be learned by the reaction to the refusal of several governors to implement exchanges or expand Medicaid in their respective states.  I have written at length about the usefullness of Rothbard’s “cui bono” (“who benefits”) concept, to pull back the curtain in an attempt to find the real reasons for this or that government policy/action.  In other words, no matter what some government apparatchik proposes, look hard for the beneficiaries of that action and you’ll more than likely discover who was behind it.  

On the flip side and as a corollary concept, those who whine the longest and loudest when a government policy is not pursued, are those most likely to have benefitted, had the policy been realized.  The reaction of the corporate hospitals to Governor Mary Fallin’s decision to reject creation of an exchange and her refusal to expand Medicaid illustrates the validity of this and signifies a division in the “business” community that merits consideration.  I think Governor Fallin had to know this rift would result, making her decision all the more remarkable.  

Hospitals and insurance companies have as much or more support on the Republican side of the aisle as they do on the Democrat side, historically.  Many times, hospital CEO’s are treated as fellow “businessmen” by those in the business community.  The wild profits of hospitals are tolerated as regrettable but necessary.  Hospitals smooth this situation over by constantly treating anyone within earshot about how much care they “donate” or give away and their “contributions” to the community.  While the hospital-men (modern day highway-men) quietly prayed for Obamacare’s healthy future, other businessmen saw this legislation for what it was:  the most gigantic over-reach of federal power in recent memory and one that threatened the very existence of their businesses and enterprises.

Certain Republican legislators having long been in the pocket of the big hospital lobbyists and big insurance, have been in a jam.  They had to look like they were against Obamacare to the folks who voted for them, all the while knowing their corporate benefactors were counting on them to do their part.  As the governors contemplated nullifying this law, we heard…”’s the law of the land, now that the election is over,” and other such statements in an attempt to disarm the rebellion.  

In chapter 43 of Thomas DiLorenzo’s blockbuster new book, “Organized Crime:  The Unvarnished Truth about Government,” he writes the following:

“As common as it is to speak of ‘robber barons,’ most who use that term are confused about the role of capitalism in the American economy and fail to make an important distinction-the distinction between what might be called a market entrepreneur and a political entrepreneur.  A pure market entrepreneur, or capitalist, succeeds financially by selling a newer, better, and/or less expensive product on the free market without any government subsidies, direct or indirect.  The key to his success as a capitalist is his ability to please the consumer, for in a capitalist society the consumer ultimately calls the economic shots.  By contrast, a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors.”

If you apply DiLorenzo’s distinction to the business community, two types of entrepreneurs certainly appear, the vast majority of those in the healthcare business falling into the “robber baron” group.  Imagine a chamber of commerce meeting where those political entrepreneurs in the various health businesses had to wear an “O” signifying their support of Obamacare, legislation that may represent the ruin of many others in the room.  Unable to satisfy the political and market entrepreneurs with her decision, Governor Mary Fallin sided with the free market bunch by rejecting the exchanges and refusing to expand Medicaid (which basically amounts to loading more passengers on the Titanic in the words of one legislator).  

Good for her.  She should wear as a badge of honor the various attacks she is receiving from the political entrepreneurs in the healthcare business sector.  Contrast the principle of her decision with that of New York’s mayor, who pulled his sword in defense of union workers, rather than accept the much needed non-union help in Sandy’s aftermath.  

G. Keith Smith, M.D.