Profits Are A Good Thing
At Townhall.com today, John C. Goodman, president and founder of the National Center for Policy Analysis, does a good job in explaining “Why Profit Is Our Best Friend.” He begins the column writing:
“Many liberals think of profit as evil. They see it as the product of “corporate greed,” something that needs to be harshly taxed. Yet the desire to earn a profit is what impels innovators to solve some of our most important social problems.
“I don’t think that getting rich is the main motivation of entrepreneurs — the possibility of changing the world may be an even stronger desire. However, you can almost guarantee there will be no entrepreneurship if you do two things: (a) eliminate all possibility of getting rich, and (b) make it impossible to change anything without the approval of an intractable bureaucracy.
“That in a nutshell is my explanation for why our two most visibly dysfunctional social systems — health care and public education — remain so dysfunctional.”
Goodman then goes on to explain that the way ObamaCare was structured, i.e., mandating that “large health insurance companies have to pay out as much as 85% of their premium income in the form of benefits. The remaining 15% has to cover all sales and administrative costs plus brokers fees and if anything is left that’s what the insurer gets to keep.” The result:
“ . . . no insurer will be able to profit from major cost-reducing discoveries. Nor will any insurer even try. Instead, insurance companies will function like utilities, taking no real risks and making no radical changes in their current business model.
“ObamaCare has ensured that our health care problems will not be solved by stifling innovation in the one sector of the market that most needs vigorous entrepreneurial activity.”
Anyone who thinks their local utilities are fountains of entrepreneurialship are asleep at the wheel. In the view of this scribe, Goodman provides yet another reason to repeal ObamaCare.