A couple points of response:
If any company takes taxpayer dollars, then by right of being a shareholder, taxpayers should have some say in how the company operates. I completely agree with you regarding the government’s lack of industry expertise, but at the same time if the banking industry is going to benefit from my investment, as a stockholder, I have a right to their profits.
Same with the insurance companies. Medicaid and Medicare pay billions to insurance companies to regulate healthcare. What do we get in return? Larger premiums and poor coverage while the share holders rake in the profits. With government being the largest customer of private insurance companies, they have a right to demand better service, lower premiums, and higher quality of care. If an insurance company does not want to deal with the government’s request, capitalism steps in. The insurance company needs to drop the government as a customer and the market will pick up the slack. However, insurance companies understand current legislation has been written in their favor. The government has legislated high barriers to entry and strict state to state competition laws. You and I have limited choices in what insurance companies we can purchase from, stifling competition. To make matters worse insurance companies are protected by anti-trust legislation making it harder to pin responsibility on price fixing and collusion.
Similar condition with with drug companies. Drug companies (with the help of Republicans) wrote price fixing laws into the 2003 Medicare bill making it illegal for the government to directly negotiate pricing. As a result the largest buyer of drugs pays the highest price. Capitalism or intervention? Drugs are cheaper in Mexico and Canada for the sheer reason of market forces. Now I wish the best for the pharma industry. I hope they make billions in profits. They should be rewarded for their innovation. However it’s a double edged sword to play the victim of legislation that encourages the use of free market concepts to drive down profits. The drug companies have been sucking the tax dollars from our wallets with no repercussions of the price gauging they have regulated.
Now, “Obamacare” fixes several of these issues. It protects consumers from being dropped when their health takes a turn for the worse. It reinstates the government’s power to negotiate drug prices. It creates an insurance exchange to allow small businesses to band together and negotiate like massive corporations. Several of these concepts are free market principles. Now, I am not sure how I feel about mandating every citizen to buy healthcare. Obviously cutting down on emergency room care through scale would be a huge cost saver, and one of the driving principles of this legislation. I am also not sure if regulating small businesses to provide healthcare is a wise market principle either. However, economics will teach you that there are vast economies of scale as competition increases and demand rises. This is exactly why we can cover more people, using market principles, at a lower cost per individual. Is the healthcare bill perfect? No. But it is definitely better then the legislation we currently have in place. The CBO, a non-partisan organization, has projected the bill will be covered by forecasted costs already in the system (I guess we should thank the Republicans for that – the Medicare 2003 bill was quite an expensive entitlement program!) and increasing payroll taxes on individuals making over $250,000.