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This insight has led even free-market proponents such as Raghuram Rajan and Luigi Zingales to argue for a “political version of antitrust law—one that prevents a firm from growing big enough to have the clout in domestic politics to eventually suppress market forces.”15 We don’t have that kind of antitrust today. Indeed, we have practically no limits on the ability of the capitalists to protect themselves from either reform or capitalism. Antitrust law (as interpreted in light of the First Amendment) exempts conspiracies for the purpose of changing the law, even if the change is simply to protect the conspirators.16 Thus, no matter what reform a new government might try, there is a well-funded and well-connected gaggle of lobbyists on the other side. Those lobbyists know that politicians will listen to their arguments quite intently, because their arguments about good policy carry with them (through the complicated dance that I described in chapter 9) campaign cash. These lobbyists thus get to go to the front of the line. Their concerns get met first, long before the concerns of the voter.

No example better captures this dynamic than the fight over health care reform. The president made the reform of health care a priority in the campaign. He made it a priority in his administration. From his first days in office, Obama and his team strategized on how they could get reform passed. And how they got that reform passed shows plainly (if painfully) where the power in this system lies.

Obama had made promises about health care in the campaign. The “public option” was one such promise. Though the details were never precisely set, the idea was simple enough: The government would offer a competing health care plan that anyone would have the freedom to buy. That option would thus put competitive pressure on private insurance companies to keep prices low. It may well have been that no one ever bought that public option plan. That doesn’t matter. The aim wasn’t to nationalize health insurance. The aim was to create competitive pressure to ensure that the (highly concentrated) health insurance market didn’t take advantage of a national health care program to extort even greater profits from the public.

Again, how was never specified. Sometimes Obama spoke of the health care plan that members of Congress received. Sometimes he spoke of a “new public plan.” As the campaign website described:

The Obama-Biden plan will create a National Health Insurance Exchange to help individuals purchase new affordable health care options if they are uninsured or want new health insurance. Through the Exchange, any American will have the opportunity to enroll in the new public plan or an approved private plan, and income-based sliding scale tax credits will be provided for people and families who need it.17

Likewise, at a speech at the University of Iowa on March 29, 2007: “Everyone will be able to buy into a new health insurance plan that’s similar to the one that every federal employee—from a postal worker in Iowa to a congressman in Washington—currently has for themselves.”

Or again, three and a half months later, to the Planned Parenthood Action Fund on July 17, 2007: “We are going to set up a public plan that all persons, and all women, can access if they don’t have health insurance.”

Or again, five months later, to the Iowa Heartland Presidential Forum on December 1, 2007: “We will set up a government program, as I’ve described, that everybody can buy into and you can’t be excluded because of a pre-existing condition.”

And these promises continued after the campaign. During the president’s weekly address on July 17, 2009: “Any plan I sign must include an insurance exchange: a one-stop shopping marketplace where you can compare the benefits, cost and track records of a variety of plans—including a public option to increase competition and keep insurance companies honest—and choose what’s best for your family.”18

But whether that plan or