The headlines are not quite accurate. It’s being called sweeping, a landmark…but most absurdly, it’s being called a health care bill and our representatives are celebrating like it’s law already. It’s been clear for quite a while that this isn’t health care reform but health insurance regulation reform. And this part of the process was completed, but it was ugly. The final vote totals were the result of intraparty negotiation we’ve seen the likes of before…situations where a conservative Democrat would check with Rep. Clyburn, find the bill at hand was definitely going to pass, then vote against it for local political advertising purposes.

The bill will not be what I’d really like to see. But reforming, re-forming the way health care is paid for is critical for the economy for reasons touched on earlier in the discussion. The accusation that the bill under development at the time was health care rationing; the response was that health care is rationed now, by wealth. That argument made clear to individuals the central physical, rather than ideological, problem with a profit-driven health care system, and Republicans dropped it like they had grabbed the business end of a hot poker.

From a human perspective we might call what we’re experiencing a health care shortage, but from an economic perspective there is no such thing as a shortage. Businesses do research to determine how many widgets (like health insurance policies) they can sell at various price points. They pick a price point from the range which gets them the revenue and profits they need to stay in business. Price it too low or too high, and you don’t get the revenue you need you buy the material necessary to make and distribute the product in the first place.

What is happening now is American industry is treating profit as a fixed expense. They budget a specific minimum profit and make day-to-day decisions in service of that goal. They are, in fact, legally obliged to do so; these decisions are never made on a purely economic basis. So, for instance, it is said that tax increases on corporations are transparently transmitted to consumers in the form of price increases. But the same operational requirements would make them retain tax cuts and other government subsidies as profit rather than cutting prices. Business’ goal is to expand, then maintain.

This determines how businesses behave in the market, which is the means by which America distributes goods and services, and it’s one thing when you’re talking about garden equipment and such; it’s another thing entirely when you’re talking about things as necessary as water, electricity, health care, things we need but are too small as individuals to create for ourselves. This is where government comes in. This is where government always comes in, not on the specific issues but in the pattern. That which we must have, which we are too small as individuals to create for ourselves is the realm of government. And due to our economic philosophies, health care…and paying for it…is now squarely in this territory.

And it’s why this legislation will be important. The health insurance industry is dying of the equivalent of morbid obesity, and a mechanism must be prepared to pick up that industry’s function when it finally falls and cannot get up.