Why Obamacare Exchanges Are Collapsing: Richard Epstein Talks with Nick Gillespie

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Click above to listen to a wide-ranging discussion between me and Richard Epstein, the Laurence A. Tisch Professor of Law at NYU.

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The architects of Obamacare could have foreseen today's crisis, says NYU Law Professor Richard Epstein, except they were intellectual "super jocks" with a "superior Ivy-League sneer," who knew so much better than anyone else "how to run this Rube Goldberg contraption" designed to "defeat the law of gravity."

Epstein speaks as an insider to elite circles. A graduate of Columbia, Oxford, and Yale Law School, he's the Laurence A. Tisch Professor of Law at New York University, a senior fellow at the Hoover Institute, and a professor emeritus at the University of Chicago. A towering figure in his field, Epstein has had a profound impact on libertarian legal theory, especially with his 1985 book, Takings: Private Property and the Power of Eminent Domain.

Throughout his career, Epstein says, he's been surrounded by "people cleverer than myself putting up schemes that are dumber than you can imagine."

Reason's Nick Gillespie sat down with Epstein for an extended discussion about the collapse of the Obamacare exchanges (0:43); why cigarette companies don't owe smokers a dime (15:49); the recent legal campaign against Exxon Mobile related to global warming (27:00); Obama's dismal record (35:23); where the U.S. went wrong in Iraq (45:00); why he thinks Gary Johnson is a weak candidate (57:00); Hillary Clinton's criminal offenses (58:26); whether he favors Hillary or Trump (1:04:51); and why he's planning to sit out this election (1:05:34).

For a transcript and video version of the conversation, go here.

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  1. RE: Why Obamacare Exchanges Are Collapsing

    It is indeed a true tragedy that The State’s healthcare is collapsing.
    How in the world are the ruling elitist filth going to control the unenlightened masses if not through regulating their medications, ordering them what doctors to see and when, raising their premiums on a monthly basis, and denying the politically unconnected treatments?
    And Obozocare had such potential!

  2. Obamacare exchanges are collapsing because the Affordable Care Act had no chance of working from the first, as we were told by numerous people at the outset. What is wrong with ‘America’s Healthcare System’ is decades of being treated like a nationwide system instead of a network of local systems that need to adapt to local conditions. Attempts to control street level enterprise from the olympian distance of a National government have failed for governments a great deal smaller and closer to the street than ours. The only think that can explain the willingness of so many supposedly intelligent people to buy into such a scheme is a truly religious belief in the Power of the State. A belief that there is damn little evidence to support.

    National Governments are good at brute force and bean counting. They are execrably bad at nuance and subtlety. We need to detach the political class from the notion that they can do anything about health care other than make it worse.

    1. To be fair, state governments have done a shit job of maintaining “stable” healthcare markets as well.

      1. I’m no great fan of government on any level. That said, I find it hard to see how State governments have much chance of accomplishing any good when the Federals are meddling quite so much.

  3. Because Republicans. Duh!

  4. I thought this part was particularly insightful:

    Nick Gillespie: But medical care, health care, like a couple other things operates totally differently than another market.

    Richard Epstein: Yeah everything is special. I mean years ago I wrote a series of papers on why health care is special, claiming that it isn’t special and that the moment that you start to make it special, it just turns out that it overheats in particular ways, but the special metaphor is used everywhere.

    1. (cont)
      So to give you an example in the 1930s we started to introduce the Agricultural Adjustment Acts which completely wrecked farm prices. Why did we do it? Because farmed goods are special. Why’re they special? Because they’re highly responsive to changes in supply and demand, which is a good thing and we have to quote unquote stabilize the market. It’s a disaster. Then we have labor relations, oh these are special. Why are they special? Because these employers have complete dominant power, even in competitive market. So even in the face of rising wages, when productivity increases, we unionize this stuff and we create the imbalances because labor markets turn out to be special. And then of course rent is clearly special. You can’t allow people in New York City to figure out how to rent an apartment, you have to put a rent stabilization program in there because real estate is special. Anytime you call something special it’s the mark of Zorro, it’s the mark of Cain on your forehead. You are about to kill a particular market in the name of trying to make it accessible and affordable to everyone

      1. Is it too late for us to write this guy in for President?

        1. He sounds far too sensible to want the job.

      2. But without those programs and laws, rich people will hoard all the money !

  5. Obamacare will work perfectly, but you must first, in the deepest part of your heart, believe that it will work.

    Spin around three times chanting “I believe I believe I believe!” while throwing pixie dust in the air ($2500 co-pay) and your dreams of an affordable health care system will come true!

    1. I wish that didn’t sound a great deal more sensible than what we have…..

  6. It’s certainly about to collapse in my state – Tennessee.

    The latest meme/excuse I’m hearing from the left is that it’s all due to the state refusing to expand Medicaid.

    They claim that Obamacare is doing fine and dandy in the states that did so.

    1. If it was working, Team Red would be sitting on the sidelines and there would be Democratic Hegemony in all but the most conservative districts as a grateful public would be amazed at how big government solved the healthcare delivery problem and we have these $2,500/yr extra money in our pocket – $15k so far. Hillary would be up 40 points on Trump just promising to do what we did with Obamacare for all the other ills the nation faces.

      Since none of that is happening, it’s a failure. Sky high premium increases, no bending of the cost curve, insurers running for the door now that the transition money is running out, and worst of all – still 33 million uninsured.

      1. Not hoping either one becomes the next prez (a random cockroach would probably do better), but do you think the low-info voters associate the additional insurance costs with O-care? Or those nasty corporations?

  7. Didn’t Obama explicitly state that the objective of creating this sort of healthcare reform was to have an abject failure that would inevitably lead to a single-payer national healthcare system?

    So it seems that it is working exactly as designed. A little ahead of schedule, in fact.

    1. Cyto, the claim that it was designed to fail has been floating around since day one, but I’ve never heard the claim that Obo stated such.
      Regardless, I’m not buying it. In a choice between stupidity and clever intent, always take stupidity. About page 4 or so, Epstein addresses the ‘anti-gravity’ techniques and the hopes that they *would* overcome gravity; stupidity with a heaping helping of hubris.

      1. Oh, and lies and marketing.
        Proggies believe that evil corporations can force people to buy things they don’t want with magic words, so they were hoping pajama-kid would do the same for O-care.

        1. That’s a good point I haven’t seen before. They do consistently believe you can change reality with words.

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  9. Didn’t Obama unequivocally express that the target of making this kind of medicinal services change was to have a contemptible disappointment that would unavoidably prompt a solitary payer national human services framework?

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