Armchairism

[Geee]

American Thinker:

Armchair critics are always quick to point out flaws in someone else's work. They usually have little more than a superficial understanding of actual problems or their practical solutions. Quick with advice but never willing to do any of the work, they are always ready to flaunt moral superiority. They draw on a wealth of theorizing but rarely on real experience.

The term "armchairist" describes the sufferers of this malady. I don't claim that it is solely a disease of the left, but surely armchairism is epidemic among all critics of capitalism. Here are a few examples.

Health Insurance

Oil Company Profits

Financial Regulation

Private Equity

The common thread in these examples of armchairism is a disdain for profits and a religious certainty that profits are a result of ignoring the interests of other people. This is despite the dependence of capitalists on the voluntary choices of their customers. Typically, the armchairists believe they could do it better (no matter what "it" is) but are too busy with more important matters. They are sure that the government can do it better. The four cases cited above are worth examining.

 

1. Health Insurance:

 

a. According to the armchairists, for-profit insurance companies gouge their customers by overcharging for premiums and unfairly denying coverage. All the evidence shows that profits hover around 5% of premiums. Administrative costs add another 10% to 20%. That suggests that premiums can't be cut by ten percent without bankrupting the companies. They certainly aren't gouging anyone.

b. Many health insurance policies are written by not-for-profit companies or (my favorite) mutual companies. These should have a natural advantage in the marketplace over for-profit companies. At one time, nearly all health insurance was provided by nonprofits. Yet the for-profit companies flourish. I have not seen a detailed comparison of premiums or benefits among the different types of insurance companies, but how can government-sponsored insurance do better? There are several union-owned insurance companies. If they do better, why haven't we heard about that?

c. Nobody has put forth a serious explanation of why government insurance should save money. That is the kind of calculation the left fears. But there is room for another type of insurance. There are plenty of rich liberals. There are even some who actually have some business experience. If the for-profit companies have a secret goldmine, why can't a few of these liberals form their own company and earn a "fair" profit without gouging anybody? This should destroy the gougers. In the car insurance game, you have Progressive, with its annoying spokeswoman and über-left owner. Yet Progressive is not the low-cost provider.

d. Capitalism works. If a decent profit can be made by cutting prices, somebody will cut them. Unless the government creates high barriers to entry through regulations. Either way, it is simply a lie that more regulation can improve things.