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Politics : A US National Health Care System?

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To: TimF who wrote (9824)	9/26/2009 8:56:32 AM
From: Road Walker	Read Replies (2) of 42652

The winner in the regulatory competition would by default be 'no regulation'. ----------- That's possible but unlikely, and generally isn't the case in areas where we allow regulatory competition between states, or for the most part with regulatory competition between countries. Maybe not "no" regulation, but certainly lax regulation. There is a reason 60% of US Corps are headquartered in Delaware: Delaware's lax corporate laws are important because the United States has an important corporate law doctrine called the "internal affairs doctrine." Pursuant to this rule, corporations which act in more than one state are subject only to the laws of their state of incorporation with regard to the regulation of the internal affairs of the corporation. As a result, Delaware corporations are subject almost exclusively to Delaware law - even when they do business in many (or even all fifty) states. Without this rule, national corporations would be subject to the varying (and potentially inconsistent) laws of each state. Under this rule, the states have an incentive to have the most relaxed corporate laws to encourage corporate formation (because this results in increased revenues and fees for the state). The reason Delaware is the home of most U.S. corporations is because it has made itself the most attractive in this respect. Whether this was a "race to the bottom" or a "race to the top" - that is, whether this incentive created positive or negative externalities - is a matter of vigorous debate in the academic literature. en.wikipedia.org Insurance is certainly ripe for fraud or abuse with lax regulation. Heck a lot of people get screwed by the fine print even with heavy state regulation. If the reform bill passes with the portability and preexisting condition clauses that will obviously be federal regulation. I admit I don't know the current extent/balance of federal/state regulation of insurance companies.

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