Allan Carlson vs. Ken Mehlman

RNC chief Ken Mehlman seems to be trapped in the closet of 1993. In a piece about the disarray of the Republican agenda — at this point, what can the GOP say beyond “vote for us: better the devil you know!” — the Washington Post quotes Mehlman as saying, “you’re going to have a clear choice between someone … who believes you ought to own your own health care . . . and [others] who have consistently supported more spending, have opposed tax cuts and who oppose patients owning their own health care.”

Is Hillarycare really going to be the issue this November? I’m as much against it as anyone, but here’s some bad news for Mehlman: most Americans don’t believe they “own their own health care.” They would probably tell you, not without justice, that their employers own their health care — those who have health insurance at all, that is.

Which brings us to Allan Carlson’s new piece in the Weekly Standard, “Indentured Families.” Carlson hits the GOP over, inter alia, last year’s tightening of the bankruptcy laws. He writes:

In a nutshell, the new law makes a “clean start” after filing for bankruptcy much more difficult for families with at least one wage earner. Instead, most affected households will find themselves essentially indentured to a bank or credit card bureau, paying off their debt for years to come. “A new form of feudalism,” one critic calls it.

Now, American families don’t exactly save and spend responsibly in the first place, but what causes many of them to capsize outright is — predictably enough — medical expenses. As Harvard law professor Elizabeth Warren pointed out in the Washington Post a year ago:

As part of a research study at Harvard University, our researchers interviewed 1,771 Americans in bankruptcy courts across the country. To our surprise, half said that illness or medical bills drove them to bankruptcy. So each year, 2 million Americans — those who file and their dependents — face the double disaster of illness and bankruptcy.

My gut tells me that with regard to bankruptcy laws, lenders, rather than borrowers, should be left holding the bag, on the principle that giving a loan to an insolvent person or household is not really different from any other bad investment. If you want to encourage smart investment — and smart credit — don’t make it unduly easy for creditors to recoup from people who go bankrupt. The ensuing tightening credit would have beneficial effects all around. Lenders can be relied upon, out of their own interest, not to subsidize the spendthrift, which provides a natural brake on the whole cycle of credit, debt, and bankruptcy. If bankruptcy laws are strongly in lenders’ favor, however, they’ll have little to lose from offering overly generous credit and the result is sure to be more lending, more bankruptcy, higher time preference (i.e. more behavior calculated toward the short term), and all sorts of decivilizing consequences.

Not that I’m altogether on Carlson’s side. There are good reasons to be skeptical of the efficacy of pro-family policies even setting aside for a moment objections to them in principle. But even when Mehlman employs free-market rhetoric and Carlson praises Teddy Roosevelt and the family welfare legacy of FDR, it’s not hard to figure out whom enemies of Leviathan should prefer.

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