Menckens Ghost

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The Eisenhower-Nixon-Reagan-Bush-Bush healthcare plan passes

By Craig J. Cantoni

By Nov. 8, 2009


Americans can thank the former Republican presidents listed above for the unconstitutional healthcare contraption that passed the House and that will complete the transformation of the United States into a European-style social-welfare state, but without any of the market efficiencies that several European nations have designed into their national healthcare systems.


All of these presidents ignored the fatal flaws with the existing healthcare system and handed the issue to the Democrats.  The irony is that Democrats had created the fatal flaws and would have been easy targets in a Republican-led reform effort.


The first fatal flaw was wage controls in 1942, which led companies to compete for labor by substituting medical benefits for wages.  Next, employer-provided medical benefits were excluded from taxable income.  Then, medical benefits were deemed as negotiable wages under labor laws.  All of these flaws happened under Democrat presidents.


The flaws resulted in the biggest flaw of all:  the death of a consumer market in medical care/insurance.  In its place grew the economically unsustainable system of third-party payments, in which employers and their insurance companies paid doctors and hospitals for care given to their employees.  Employees sat on the sidelines like brainless coconuts instead of informed consumers as others set prices and service levels for medical care.  Eventually, the coconuts lost all knowledge of the cost of the care they were receiving, thus creating a mindset that medical care shouldn’t cost them anything.  They also became dependent on their employer for medical care/insurance, a dependency that would lead to widespread insecurity as the old employment model of lifetime employment with one employer fell apart.


Incidentally, the disconnect between cost and use is also the fatal flaw with public education.  Parents have no idea what the education costs them and thus see no direct connection between education spending and their wallets.  Because of this disconnect, education productivity has plummeted over the last 40 years, as measured by stagnant test scores and a doubling of per-pupil spending in real terms.  It’s also interesting to note that the stated goal of compulsory education was universal education, just as the goal of nationalized healthcare is universal healthcare.  With over 30 percent of Americans not finishing high school, and with many of those who do finish being below standard in reading and math, universal education has been a failure.  Yet many Americans believe that universal healthcare will be a success.


The final flaw in healthcare was Medicare, which was enacted in 1965 under -- yep, you got it -- Lyndon Johnson, a Democrat.  Unbeknownst to most Americans, Medicare replaced a cost-effective healthcare system known as Kerr-Mills for the elderly poor.  Quickly becoming an entitlement for the non-poor, Medicare reinforced the mindset that medical care/insurance was not a personal responsibility but a responsibility of third parties.  Of course the original cost estimates of Medicare have turned out to be laughably wrong, and of course, the program has been extended way beyond its original intent, most recently and egregiously by George W. Bush.


All of the Republican presidents listed in this commentary’s title professed to be believers in free markets.  Yet they failed to understand where the death of a consumer market in healthcare would lead -- to growing insecurity among Americans, to high numbers of uninsured, to skyrocketing costs, and ultimately to complete government control.  Failing to understand that, they failed to act and thereby handed the issue to the Democrats.


Depending on what you think of nationalized healthcare, you can either blame or thank Republicans for the passage of the healthcare bill. 



An author, columnist and longstanding activist in healthcare reform, Mr. Cantoni can be reached at 



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