As much as leftists like to call Sarah Palin stupid, I’m think I can confidently assert that she knows the difference between liability and comprehensive automotive insurance.
I have long assumed that the demagoguery by Obama and other leftists against the insurance companies was just cynical “eat the rich” politics. I assumed that behind closed doors, these Ivy League grads did actually understand that insurance provides protection against statistical risk only and not protection against absolute certainties. I assumed they understood that money being payed out in claims has to be balanced out by money paid in as premiums or the entire system will collapse very quickly.
However, hearing the President speak on the matter of insurance over the course of the past year, I’ve come to the conclusion that he, personally, simply does not understand how insurance works. I fear that no one else around him really understands either.
I say this because if he did understand how insurance worked, he would know that the story about his car insurance would make him look like an idiot.
He would have known that most people would say, “Well, yes, liability insurance pays for the damage that you might do to the property and lives of others. Comprehensive pays to repair the damage to your own car. The law requires that you protect the rights of others, it doesn’t require that pay for your own car in any particular way. Everybody know this.”
I find myself hoping that the video clip was somehow taken out of context and he was trying to illustrate something else, like, how naive young people can be about financial affairs
Yet looking back at his keynote speech of last year we see the same shocking naiveté/cynicism.
What this plan will do is make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a preexisting condition
I think he sees insurance in some kind moralistic literary terms. I don’t think he actually understands how the mathematics of insurance limit any insurer’s options, even the government’s. I think he believes that premiums, payouts and profits are all ultimately utterly arbitrary and that if we want a different system, we must simply just will ourselves to behave differently and thus bring it about.
Still I hope I am wrong. I’m not sure I can sleep well at night knowing that the man who has both the desire and the power to re-engineer our society doesn’t really understand one of its most important functional parts.