Paul Krugman Is A Smart Economist, But Again Being Disingenius

He writes regarding the public option:

I suspect that Ezra and others understate the extent to which even a public plan with limited bargaining power will help hold down overall costs. Private insurers do pay providers more than Medicare does — but that’s only part of the reason Medicare has lower costs. There’s also the huge overhead of the private insurers, much of which involves marketing and attempts to cherry-pick clients — and even with community rating, some of that will still go on. A public plan would probably be able to attract clients with much less of that.

Part of that overhead is also to root out fraud, which Medicare seems to have a bigger problem with. Although, marketing costs are a point that could offer savings.

Second, a public plan would probably provide the only real competition in many markets.

Again, we don't talk about the need to introduce government competition in other markets. If there are monopolies or oligopolies in some states or markets, which is most likely a result of the government policies in those states anyway, then the optimum solution is to break down the barriers to entry and use anti-trust measures, not create a huge government program and bureaucracy.

Third — and this is where I am getting a very bad feeling about the idea of throwing in the towel on the public option — is the politics. Remember, to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

Here Krugman is just talking stupid. Key point is this: "everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies." Uh, I think you deeply misunderstand. The truth is "there will be a major backlash against the idea of forcing people to buy insurance" period. Does Mr. Krugman actually, really think that forcing people to buy insurance and creating a new, massive government program would be more popular? It's the compulsion part that people don't like.

PS. No, I didn't mean disingenuous.