Those of us in the education world are used to thinking about "competitive effects" thusly: The public education system will do nothing to reform itself unless forced to do so. So we try to force it to do so by threatening to take away students, dollars, and union members by offering parents options outside of the system (via vouchers, charter schools, etc.). With enough competitive pressure, it is hoped, the system will accept true reform as its least worst option.
Now turn to today's New York Times column by Nobel laureate Paul Krugman. He's talking about health care, and writes: "History shows that the insurance companies will do nothing to reform themselves unless forced to do so."
Sound familiar? Except where does he think that competition should come from? "A public plan that Americans can buy into as an alternative to private insurance."
Now nobody is proposing that Americans be forced to get their insurance from the government. The "public option," if it materializes, will be just that - an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama's letter: It will give Americans "a better range of choices, make the health care market more competitive, and keep the insurance companies honest."
You mean just like creating charter schools will give Americans "a better range of choices, make the education system more competitive, and keep the teachers unions honest"?
So in education, where the government is the major player, we're trying to create competition via the private sector. But in health care, where the private sector is still a major player, we're trying to create competition via the public sector?
Weird.
Update: Greg Forster chimes in with an excellent post on the subject, too.
