Why Americans love their junk insurance

The outcry we have heard from some quarters about Obama supposedly going back on his pledge that “if you like your health insurance, you can keep it” is really not surprising.  Admittedly, most of the policies some Americans are just dying to keep are really junk policies that cost them a fortune compared to the actual insurance against financial ruin due to illness they provide.  People who buy junk policies get taken by their insurance companies.  Everyone knows that.  So, why would Americans want to keep worthless insurance?  Why would Americans want to continue to be taken?  Answer: It’s in our psyche.

In the late 1880s, liberals in American fought battle after battle trying to pass pure food and drug laws.  There was a obvious need for federal action to regulate the food and drug industry.  Tainted food and drugs were sicking and killing thousands.  The food and industry fought every effort to do something about what was becoming a health crisis.  Pure food and drug advocates were defeated time and again.  By the end of the century, proponents of pure food, drink and drugs were extremely frustrated.  They had made little progress at the national level and the states wouldn’t or couldn’t enforce the few laws state legislators grudgingly agreed to pass.  It was apparent that Congress and the state legislatures weren’t going to take any meaningful action until they were forced to do so by sufficient numbers of angry voters.  But, ordinary Americans didn’t seem to care.  One pure food advocate on the occasion of yet another defeat of a pure food and drug law in Congress expressed the sentiment of many of his fellow pure food advocates.  He said in frustration which is as true today as it was then, “To be cheated, fooled, bamboozled, cajoled, deceived, pettifogged, demagogued, hypnotized, manicured and chiropodized...are privileges dear to us all.  Woe be the paternalism in government which shall attempt to deprive us of these inalienable rights.”  He went on to note that it appeared the great huckster P.T. Barnum had been right when he said, “Americans like to be humbugged.”

That’s America.  My favorite P.T. Barnum story perfectly illustrates our love of being taken.  As you know, P.T. Barnum was a master showman.  In fact, his museum of strange artifacts was so popular, once inside, the customers didn’t want to leave.  Now, that was a problem for Barnum since once the museum was full, he couldn’t sell more tickets to customers until some of the existing customers left to make room.  Barnum came up with the perfect solution.  He posted a sign saying: “This way to the Egress.”  Curious to see this strange “Egress,” which they thought was an unusual animal, they followed the sign through the door—to the outside of the musuem.  The door closed behind them and they could not get back in without paying for a new ticket.  “Egress,” of course was just a fancy word for “Exit.”  Once people realized they had been taken—they thought it was the greatest gag ever.  Americans loved P.T. Banum, the ultimate hustler.