Obama at a townhall meeting on health care reform

President Obama has made health care reform among his very top priorities. Good. The health care system is deeply troubled from soup to nuts. Cost, access, availability, insurance, budget pressures are all very serious issues. It is therefore disconcerting to learn over the weekend through the President’s health care reform speech that he, underneath his well-crafted talking points, apparently doesn’t have a clue.

Bold, effective bi-partisan health care reform is within our grasp, but only if the President jettisons some of his extremist views. The possibility of a resounding success for health care reform is clear to everyone who has studied it. And so the President’s insistence on poison pill provisions like a government plan is perplexing. Why is he threatening to torpedo his own initiative? The “a-ha” moment came during Saturday’s speech when he said, “If the drug companies pay their fair share, we can cut spending on prescription drugs.”

In the interest of advancing health care reform, here’s the first health care clue for the President: Drug companies don’t pay their fair share. They don’t pay any share. They don’t pay at all, except the same income tax paid by all corporations. Drug companies invest in new technology, struggle through a government regulatory system, and market their successes. In short, drug companies sell drugs and in the process improve health care outcomes. But drug companies don’t pay shares — patients pay and taxpayers pay.

With one comment, the President has demonstrated a breathtaking lack of basic economic literacy. Correcting this and similar shortcomings in his economic understanding may be crucial to the health care reform we need.