| The government setup the rules that enabled exactly that behavior. I see you making this argument over and over in this discussion, but you seem to be ignoring the flip-side of that fact: People exploited those government rules. Any calculus of culpability for the current state of affairs that ignores that fact, pointing fingers solely at the government, is myopic to the point of absurdity. No-one forced these medical supply cooperatives turned for-profit organizations to exploit the rules for their own advantage, establishing a system of pay-to-play kickbacks that demonstrably holds back progress and actually kills people. (Don't mind me. I'm a little pissed off about this particular subject right now; I just had an uncle die from sepsis.) The people in those organizations made conscious, rational choices to engage in that kind of behavior. If they didn't foresee the consequences of doing that, they're as dumb, blind, and undeserving of the responsibility for stewarding their corner of the world as the government bureaucrats who created the rules in the first place. Or are you actually arguing that people who exploit unintended consequences for their own benefit, regardless of the impact to the rest of the world, are somehow blameless? That only the people who made those consequences possible have any culpability? It takes two to tango, after all. |
Second, there is no more predictable rule of human behavior than the conscious, rational pursuit of self-interest. Adam Smith was very clear on this, businesses will seek to form cartels at every opportunity. We can legislate against explicit collusion, but these laws are very tough to enforce. It's very possible that the executives in these companies are deviating from legal standard, but enforcement of laws governing intent is even harder. As a policy matter, better / stricter law is unlikely to solve the problem.
The stronger solution is discouraging barriers to entry. Competitive entry of new players is the best discipline against cartel behavior.
Commenters elsewhere in this sub-thread are arguing that one bad regulation isn't an argument against regulation generally. But the problem is distinguishing the bad regulations from the good. It's very likely that at some point there was some policy argument for these stupid rules, sufficiently plausible at the distance held from all but the most expert. The formulation of such arguments to justify known-bad policy is a constant component of our governance. It's possible that the intelligence of the rules depended on some other rule or aspect long since departed.
That's the beauty of markets: The players' incentives lead them to constantly monitoring and adapting to conditions. And those incentives provide discipline that forces analysis from "sounds good enough to me" to more exacting standards. Congress here has suspended a large chunk of market operation, in a medical market where many other chunks have been suspended. It is not the least bit surprising that this has lead to grotesqueries.