“OWNERSHIP SOCIETY STILL NEEDS RULES”: Sebastian Mallaby column, via SRD. Excerpts:

The Bush team’s “ownership society” is mainly about Social Security: It wants to convert part of this government program into private retirement accounts. But the administration is skeptical of corporate collectivism as well as the governmental variety. It’s not sure that your employer should provide your health care or your retirement plan. And it may well be right.

Corporations became the anchors of traditional benefit programs only by accident. During World War II, the shortage of workers forced companies to compete hard for them; and government-imposed wage controls forced this competition to express itself in non-wage benefits. Later, tax breaks induced companies to expand those benefits. But without the distortion of wage controls or tax incentives, corporate provision of retirement and health plans would make little sense. …

Before it proceeds any further with its trial balloon, the Bush team better emphasize that the market for individual health insurance would have to be regulated into providing socially acceptable results. There would have to be rules on which risk factors insurers could consider (smoking yes, race no, and so on); and insurers might have to be subsidized to take on patients with preexisting conditions. None of this would be simple. But corporations are clumsy anchors of health and retirement systems and are in any case withdrawing from this function. Other options could work better, provided they are done right.

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