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March 24, 2008

Are workers falling behind because of rising health care costs?

Russell Roberts

As is often the case, the glass is half-empty over at the Washington Post (HT: Steve Chapman). The headline on today's front page:

Rising Health Costs Cut Into Wages

Higher Fees Squeeze Employers, Workers

The article begins:

Recent history has not been kind to working-class Americans, who were down on the economy long before the word recession was uttered.

The main reason: spiraling health-care costs have been whacking away at their wages. Even though workers are producing more, inflation-adjusted median family income has dipped 2.6 percent -- or nearly $1,000 annually since 2000.

Employees and employers are getting squeezed by the price of health care. The struggle to control health costs is viewed as crucial to improving wages and living standards for working Americans. Employers are paying more for health care and other benefits, leaving less money for pay increases. Benefits now devour 30.2 percent of employers' compensation costs, with the remaining money going to wages, the Labor Department reported this month. That is up from 27.4 percent in 2000.

So the point is that because of rising health-care costs, workers are worse off. Pretty depressing. And there's a graphic to help make the point:

Unfortunately, the text accompanying the graphic is a non-sequitur--"The annual increase in the cost of benefits for workers has far outpaced wage increases in recent years." That sounds bad. That sounds like the costs of health care is growing faster than wages and higher health care costs would seem to imply a lower standard of living for workers. But it doesn't imply that at all. It simply says that the benefits component of compensation has been growing faster than the wage component.

And what does it mean that the "cost of benefits" is rising? What does the word "costs" mean in that phrase? It's a cost to employers. But to workers, benefits are, well, benefits. Higher compensation. What the chart shows is that benefits have been rising rapidly. That's actually a good thing. Yes, part of that increase is that employers are covering health care costs that have been rising. But it also includes other types of benefits, forms of compensation that are usually tax-free to employees.

To find out whether workers are doing better or worse than they once did, you want to look at whether total compensation is growing faster or slower than inflation.  Look at the graphic--it shows that other than a couple of months at the end of 2005, total compensation has been growing between 3% and 4% a year since 2000. But between 2000 and 2007, the CPI increased about 20% or less than 3% per year. So real compensation has been rising.

It's not clear from the graphic whether this is compensation per worker or per hour or whether it's total compensation across all employees. So the conclusion could be distorted by increases in the labor force since 2000. But what is clear is that the graphic has nothing to do with the pessimism of the article and seems to refute it.

As for the 2.6% fall in median income since 2000, the one seemingly hard piece of evidence in the  article, if the number is from the Census (which I assume it is), the Census income figures don't include health care benefits or employer contributions to retirement. So those income figures tell us nothing about the role of rising health care costs' effect on the standard of living of the median worker.

The rest of the article is a series of anecdotes about how expensive health care is. There is no hard evidence for the central claim that rising health care costs have reduced the standard of living of the average American. In fact, the graphic implies the exact opposite.

 

Posted by Russell Roberts in Data, Standard of Living | Permalink

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Comments

The number one cause of bankruptcy in this country is heath care cost. 68% of those filing for bankruptcy had health insurance.

Here is a graph of health care expenditures per GDP.

These facts make it clear that the rising cost of health care is indeed affecting many Americans quality of lives as well as their very lives.

I don't think people file for bankruptcy based on medical care cost in just about every other developed country in the world.

While I can't claim our health care system is a text book example of a market failure I'm not sure the liberal cause is served by denying facts and suggesting its an example of a market success.

Health care costs main cause of personal bankruptcy, study finds

The National Coalition
on Health Care

Posted by: muirgeo | Mar 25, 2008 1:24:40 AM

I'm not sure the liberal cause is served by denying facts and suggesting its an example of a market success.

Nor would I suggest it's an example of a 'market success' given that just about every aspect of the medical industry is dominated by government intervention in countless ways.

Start with the tax write off for business in providing medical coverage.

Let us count the ways:

Medicare
Anti-competitive insurance regulation.
Mandatory emergency care for non-emergency visits to emergency rooms.
Licensing.
FDA
Progressive income tax (many doctors are high tax bracket, adds to cost).

Got more?

Posted by: Sam Grove | Mar 25, 2008 1:39:14 AM

"Man, look at health care prices rise!"

"Let's subsidize it!"

"Man, they're still rising, even faster now!"

"We better subsidize it again!"

"How much larger do we have to make the subsidies before prices stop rising!?! And why do they seem to care less and less about the demands of the patients!?!"

Idiots.

Posted by: Justin Ross | Mar 25, 2008 1:54:46 AM

"If you think health care is expensive now, just wait until it's free." P. J. O'Rourke

Posted by: Sam Grove | Mar 25, 2008 2:02:21 AM

Did somebody mention health care?? CUE THE DUCK! Don't bother, he's here.

Posted by: Russ Nelson | Mar 25, 2008 2:23:41 AM

If they are saying "family income" do thy mean house hold income or median household income? If that if the case, it does not tell us very much about individual wages because the average number of wage earners per family can change. There can also be demographic changes where the median age or level of experience can fluctuate year by year.

In fact, in most countries where the standard of living is rising and more and more people are entering the formal labor market, where people are able to start their own households, where less children are being born per family, and where elderly people do not move in with their children as they used to do, household incomes have fallen or they have risen much more slowly compared to individual median wages.

This should be apparent to most readers but then again many things in the media contain, lies, distortion and half truth that should be apparent to most readers but they fail to be spotted.

Posted by: Colin Keesee | Mar 25, 2008 3:42:25 AM

muirduck,

if you ever just got one inkling, one teeeeeny little glimpse of what a market is, or markets are, then you'd understand that generally speaking the health care system in America is a failure. Not a market failure, just a failure. Anywhere and at anytime, a single payer government owned and operated health care system is a failure. Not a market failure.

Here is why.

The health care system in America has become a defacto government operated and owned system.

That makes it the "company store". The company store was never a market, nor did it ever have to respond to market forces. The company store stocks what its owners wanted to stock, what they think the people in bondage need. Wants, desires, and requests can be ignored by the company store manager because the people in bondage aren't/can't buy anywhere else anyway.

The company store owners/managers can be charitable if they choose, and are in our company store system. God knows how much free care is given away to left wing voters or potential left wing voters(illegals with dark skins).

If the company store manager sees one of his bondsmen clearing off his debt and nearing freedom, he can simply raise that one's prices for goods/and services to keep him in perpetual bondage. Who does the bondsman complain to, certainly not to the company store manager.

If the bondsman attempts to simply run away, the legal debt he owes to the company store allows the store manager to seek redress through the law.

Our government has through "back-door" procedures has made a company store out of our health care. There are some cracks in their total takeover where one can find a provider that will avoid the company store procedures and deal in cash, but very very damn few. With the current crop of presidential candidates don't look for those cracks to remain open very long.

Bottom line, my little teacup Chihuahua intellect, the health care system as we know it today is not a market nor does it any longer respond to market forces. That has been taken away from us and replaced with the company store.

BTW muirduck, (I know you'll lie about this but I gottask it anyway) what is your personal track record of fee increases over the last 10 years. Are you contributing to the rise in health care costs, or is it just those other guys and the hospitals that are doing it.

Posted by: vidyohs | Mar 25, 2008 7:16:13 AM

In addendum to my last I add this:

When I said failure of the health care system, I meant failure to be a market, not that I think the system does not provide top quality care.

Our international ranking in "Health Care Delivery" (note the word delivery) is 26th. Which simply means we are rated on the fact that we don't sweep people off the streets and "doctor" them regardless of cost.

In quality, America's health care system, people, and facilities are the best in the world in spite of the diverse population it serves.

Posted by: vidyohs | Mar 25, 2008 7:20:18 AM

muirgeo:

The number one cause of bankruptcy in this country is heath care cost.

Garbage. If someone has $99K of credit card debt and $1K of unpaid hospital bills, muirgeo's studies will accept the hospital bill as the cause.

Also, with illness comes an inability to work. Even with insurance, a disabled worker could go bankrupt. And of course, muirgeo's studies will invariably blame the bankruptcy on the health care costs.

Complete rubbish.

Posted by: cpurick | Mar 25, 2008 7:23:42 AM

It never ceases to amaze me, the amount of energy that can go into a project just to avoid doing the right thing. The best, simplest, least costly, most effective thing we could do is expand what has been working so well for years, Medicare. You get sick, you get care, and the caregiver gets paid. Nothing could be simpler. But follow the money and you’ll find why the politicians don’t like it a bit. They get their money from insurance interests.

"America will always do the right thing, but only after everything else fails." Winston Churchill

MoneyedPoliticians.net
http://tinyurl.com/2gy4m4

Posted by: Jack Lohman | Mar 25, 2008 8:43:18 AM

Pray tell vidyohsgoose is the company store/company town a pro-government or anti-Capitalism institution? If a business owner has operations in a remoted locale and can get workers to work for good & services or highly-localised currency how has there been any 'force and/or fraud'? Some Libertarians like quoting the Medieval Scholastics who reckon the employer isn't obliged in giving any more to what is agreed to by the would-be worker regardless of how little it is.

http://en.wikipedia.org/wiki/Truck_system

http://en.wikipedia.org/wiki/Company_scrip

http://www.lewrockwell.com/woods/woods53.html

Posted by: Gil | Mar 25, 2008 8:58:53 AM

Quote from Gil: "Some Libertarians like quoting the Medieval Scholastics who reckon the employer isn't obliged in giving any more to what is agreed to by the would-be worker regardless of how little it is."

What else should be given other than what was agreed? Isn't that what "agreed" means?

Posted by: Keith | Mar 25, 2008 9:24:25 AM

Does the average for "workers" include Bob Nardelli (formerly of Home Depot) and the bonuses paid on Wall Street?

If so, like many averages touted by economists, it is essentially worthless.

Anyway, the WP is wrong. Workers wages are being contained or depressed by a concerted effort to

1) limit blue collar wages with offshoring and hoards of illegals
2) limit blue collar benefits, misusing the bankruptcy courts if necessary
3) end any hope of blue collar job security, to allow less bargaining power
4) eliminate private sector unions, in order to lessen bargain power

If this is your agenda, and you have the courage to be honest about it, fine. Most politicians, particularly the dittoheads who have overrun my GOP, are not honest about the agenda. Some economists are not honest about the agenda either.

Posted by: save_the_rustbelt | Mar 25, 2008 9:37:24 AM

To address rustbelt's first comment:

"Averages" in income statistics are usually median figures, because using the median is a better way of approximating the middle of a distribution when they are particularly high or low numbers.

Thus, even the highest CEO pay will not distort the "average" at all.

Posted by: Saul Black | Mar 25, 2008 10:08:04 AM

rustbelt: "Most politicians, particularly the dittoheads who have overrun my GOP, are not honest about the agenda. Some economists are not honest about the agenda either."

Right. Somehow rustbelt knows the true motivation of GOP politicians and libertarian economists. Somehow he knows that they do not believe the economic theories they profess to believe in, but instead use whatever is convenient to oppress union workers.

Posted by: John Dewey | Mar 25, 2008 10:31:50 AM

Duh Keith. I was responding to vidyohs' notion that certain employers were exploiting workers. It's probably true that a worker in the poor countries would regard an employer who provides a couple of meal and clean drinking water in return for hard labouring work as a godsend. He was the one (for a change :O) comparing the business world to them thar guvmints.

Posted by: Gil | Mar 25, 2008 10:36:19 AM

rustbelt: "end any hope of blue collar job security, to allow less bargaining power"

Blue collar workers in right-to-work states seem to be doing better:

Unemployment rate by RTW state

AZ.....4.3
TX.....4.3
FL.....4.6
TN.....4.9
GA.....4.9
NC.....4.9

What about non-RTW states?

MI.....7.1
CA.....5.9
IL.....5.6
OH.....5.5
MO.....5.5
NY.....5.0

Posted by: John Dewey | Mar 25, 2008 10:53:03 AM

I am a walking example of how a health crisis can wipe out a family's saving. I am a cancer survivor, which is the good news.

It took two years for me to go through the process and it was not easy for me. Many complications.

I have excellent health ins, they paid over 7 figures for my survival. But I paid $40,000.00 each year in co-pays and deductibles. I am self employed so for two years I could not work so NO income. My wife who is also self employed was my primary care giver. NO income for two years.

How many of you have enough cash and investments to pay you monthly nut, mortgage, food, gas, utilities etc for more than 6 months? So yes I did field for bankruptcy, but I did pay the hospital and Dr bills to assure that any future medical needs would not be encumbered.

My monthly health insurance bill has increased from $650 mth to $875 mth in the last year, you do the math.

The reality is that premiums have gone up along with deductibles for everyone in this country. The cost of drugs has out stripped inflation.

Yes health care is burden on the workers and the economy since it pulls discretionary income away from the consumer sector.

But I do have to give credit to all you right wing nut bags, your laissez faire mantra lies in smoking ash, the US financial system is bankrupt, and still you keep clicking your heals together claiming the free market works.

What a bunch of tools

Posted by: Organic George | Mar 25, 2008 11:14:25 AM

Yes, rustbelt. It's all a conspiracy to marginalize blue collar workers. I can't tell you how many nights I've stayed awake plotting ways to marginalize blue collar workers. We capitalists are absolutely obsessed with it. We can think of nothing else. We don't spend as much time thinking about how to attract highly skilled labour and get the best out of our employees as we spend thinking about how to destroy the lives of car assembly line workers.

It's time for blue-collar workers to start accepting reality and stop exaggerating their importance to everyone else's thoughts. In other words, get over yourself.

Posted by: Methinks | Mar 25, 2008 11:19:52 AM

A Micro Thought!

I think the “health care problem” is more nuanced than government vs consumer driven because I think in part, consumers have driven health care in a bad direction(government hasn't helped). A lot of this is anecdotal, as I work in the health care field and have seen it (on a micro level) across the US and in a few other countries.
From my perspective, Arnold Kling is dead right when he talks about an abundance of health care. We love it, we love doctors and more importantly, we love specialists. And so, as market forces are want to do, doctors move into specialties but instead of lowering the price of those specialties, we kept the price the same. Everyone gets rich(the fault of insurance companies and lobbying groups), except for those needing the care. To make matters worse, because we lose so many young doctors' to specialties, sub specialties and in many cases, sub sub specialities we then see a massive deficit in general practice (your family doctor).
As a result, Universities have (again, I have no empirical evidence, only what I see with my own eyes- albeit at the top hospitals in the country) stopped teaching practical family medicine and that has lead to even family doctors not doing even the most basic procedures. As evidence, we have seen a massive rise in 911 calls within the hospital. And I'm not talking about community urgent care centers, I'm talking about world renowned pediatric and adult trauma centers. Perhaps that is a result of tort laws, malpractice is ridiculous these days (though, I have seen a lot of things that would be ripe for malpractice) and that doctors would rather shift the risk onto another provider (ie: the paramedics).

When I was in Africa, my family doctor did everything from check-ups to stitches to minor surgery. Could a specialist have done it better? Perhaps, but it would have cost me a lot more, would have wasted his or her specialties and resources on a non-complicated case and someone else who needed those recourses more than me would have gone without. Of course someone will always go without, such is the nature of economics but I would have been the least efficient option.

So, what steps in the way of lowering prices,? Well, insurance companies and lobbying groups. Sub Specialists went into the field to make money and they'll be damned if someone tries to stop that. Nurses (one of the fiercest lobbying groups out there- yeah, who would have thought it) prevent their wages from fluctuating and more importantly stop others from moving into the market, like Paramedics (Here, I an biased, I am a paramedic.) A lot of places have been wanting to push a Paramedic to Physician Assistant bridge program, this would basically allow “doctors” (PA-C) to make house calls in an ambulance. The result, less ER resources are used, less use for nurses and doctors, more pay for paramedics (but still a massive cut when compared to the cut in ER staff). Also to be considered is that the vast majority of Paramedics, don't want to be PA-Cs' but many do. So when the total is tallied, ER costs ( each patient visiting the ER can expect at least a few thousand dollar bill) are way down, nurses move to other departments (avoiding losing their jobs), some Paramedics get paid more and patients save in time and costs.

These two paragraphs are mostly unrelated but both are worth considering.

Posted by: econmedic | Mar 25, 2008 11:21:35 AM

Are you contributing to the rise in health care costs, or is it just those other guys and the hospitals that are doing it.

Posted by: vidyohs

vidyohs,

If one is going into medicine to make money you don't choose pediatrics as your profession. With one extra year of training to be a radiologist or a anesthesiologist my salary could have been double what it is.

Doctors salaries are about $11 dollars of every $100 of health care premium. Administrative fees for Medicare are about $5 dollars per $100 and about $15 to $25 for many private plans.

Most cost increase are coming from end of life care, technology and pharmaceuticals. I'd say the average pediatricians salary has increased 3-5% per year or not much above inflation.

Have a good day brother vidyohs!

Posted by: muirgeo | Mar 25, 2008 11:27:28 AM

organic george,

I am sympathetic to your situation, and I am glad that you survived. But I do not believe I have the responsibility to ensure your welfare. Is that what your post is implying?

To answer your question, my family has long had enough cash and investments to pay for all the things you listed for much longer than 6 months. That's what prudent families do to ensure they are not forced into bankruptcy.

I do not know the details of your situation other than what you presented, but it certainly appears your health insurance functioned properly. They did pay for well over 90% of your expenses - over $1 million in benefits - correct?

John Dewey

P.S. Calling people "right wing nut bags" and "bunch of tools" may make you feel better, but it will only detract from the merits of your arguments.

Posted by: John Dewey | Mar 25, 2008 11:33:04 AM

So, George, congratulations on your survival.

I guess you think that somebody else should have paid for your cancer treatment? Since you got the benefit of your cancer treatment, why should I foot the bill? If I foot the bill, shouldn't I decide how much tate known as "clinical death" several times. So, it's not like I can't is too much and just let you die if the bill gets to be too high? If not, then how do you justify enslaving me to pay for your health? News flash, George. Cancer survival rates are lower in all socialized medicine countries. So, I guess you have a choice - pay out of your own pocket to live or die. If you didn't want to be financially "wiped out", you could have just chosen the latter on your own, you know.

And just in case you think I'm super callous - I spent 4 years in and out of hospital and was so close to death that I was what is known as "clinically dead" several times. during that period.

Posted by: Methinks | Mar 25, 2008 11:34:29 AM

clearly, I shouldn't do three things at once. I screwed up the editing by accidentally pasting a cut phrase. Here's the paragraph again:

"I guess you think that somebody else should have paid for your cancer treatment? Since you got the benefit of your cancer treatment, why should I foot the bill? If I foot the bill, shouldn't I decide how much is too much and just let you die if the bill gets to be too high? If not, then how do you justify enslaving me to pay for your health? News flash, George. Cancer survival rates are lower in all socialized medicine countries. So, I guess you have a choice - pay out of your own pocket to live or die. If you didn't want to be financially "wiped out", you could have just chosen the latter on your own, you know"

Posted by: Methinks | Mar 25, 2008 11:48:38 AM

I think, Organic George, that the health care industry would have preferred a simple thank you for saving your butt. Your alternative, gripe about your health insurance payment going up $2K a year (and what's that a percentage of your household income? 1% 2% 3%????), makes you seem a bit of a tool. No?

Posted by: Sweetie | Mar 25, 2008 12:13:49 PM

It surprises me that nobody here objects to the use of CPI in this way. What, nobody buys food or energy and instead consumes primarily light trucks?

CPI is a flawed measure.

Posted by: Blutskralle | Mar 25, 2008 12:16:44 PM

George, you're going to have a hard time convincing any of the "right wing nut bags" here that our health care system is a free market.

Your existing health care options are already limited by government. What's called for -- what you could have used -- is less government, not more.

It's already been pointed out that you survived cancer as a result of treatment in the system that produces the best cancer odds. Why are you so sure that if our health care was "free" you'd have your $80K back? Isn't it also possible that you'd just be dead?

Posted by: cpurick | Mar 25, 2008 12:46:11 PM

Can we all try to be a little more civil? Just because someone does not agree with you view point does not mean that they are immoral, evil, or insane. Sometimes good, reasonable people disagree.

Health Care is quite possibly the least free-market in America. Please do not claim that any problems with it is a "market failure." This is not a claim that a completely free-market in health care would be better or worse. I just want people to stop pretending that there is much of a free-market in this industry.

George wrote that the "US financial system is bankrupt". Please explain this statement. The US dollar is not currently worth zero. There are US banks that have stock prices that aren’t zero. Please define “US financial system” and what exactly is “bankrupt” about it.

Posted by: Deryl G | Mar 25, 2008 1:03:18 PM

1) People are using more services that are not medically necessary (or weren't 20 years ago) because their costs are subsidized by health care and medicare.
2) People using health insurance or medicare are less sensitive to prices, so prices go up and use of services goes up

....Thus health care spending goes up
....Thus heath insurance costs go up
....Thus those without health insurance (usually lower incomes) pay much more than they otherwise would

Also, I think the statement about healh care being a major cause of bankruptcy is misleading. It may be the trigger, but the cause is usually a lack of personal financial responsibility and planning (I.E. emergency fund, etc.) Many people who have health insurance of some kind file for bankruptcy simply because they have not managed their risk properly and set aside a congency fund for their deducible or maximum out-of-pocket expenses for their particular plan.

Josh Nankivel
http://www.PMStudent.com

Posted by: Josh Nankivel | Mar 25, 2008 1:05:39 PM

It seems that advocates of totalitarian medicine are as motivated by selfish interest as anyone.

The problem with the health care industry is that payment has left the hands of the consumers. Let us always try and remember that medical industry workers have to pay taxes too, those taxes are ultimately paid by medical care consumers.

People don't comprehend how taxes affect costs.

Posted by: Sam Grove | Mar 25, 2008 1:06:39 PM

Add long-term disability and life insurance to that list.

Josh Nankivel
http://www.PMStudent.com

Posted by: Josh Nankivel | Mar 25, 2008 1:07:21 PM

I don't trust anyone who says "right win nutbags". I don't trust George isn't a lying troll. I want to see photocopies of medical insurance documents or else I think he's a gasbag liar.

Posted by: FreedomLover | Mar 25, 2008 1:13:50 PM

Cpurick,

"Isn't it also possible that you'd just be dead?"

Exactly. And to take it a step further, I'm surprised that it doesn't occur to people that giving the state control over healthcare also gives the state an interest in encouraging/enabling certain people who are no longer productive to die.

Posted by: Randy | Mar 25, 2008 1:34:13 PM

I just want people to stop pretending that there is much of a free-market in this industry.

Deryl, while nobody has mentioned that on this thread, this has been discussed on other health care threads. I'm not qualified to run the numbers, but I'm willing to bet that a more free-market model would actually reduce costs and improve efficiency. Consider that George's health insurance premiums increased to $845 only after he was brought back from the brink of death. In the state of New York, that is the normal premium for healthy people because New York has never met a health insurance mandate it doesn't love. One of the most egregious mandates is the one forcing health insurance companies to cover pre-existing condition and making it illegal to charge a premium high enough to compensate for the cost of treating said condition. This means that there is a severe adverse selection problem in NY. Why pay for health insurance while healthy? Why not wait until you're ill? A textbook example of privatized gains and socialized losses.

So, while George grouses about his health insurance premium reaching that price level after a life-threatening illness and an increased probability of another expensive illness, I can only imagine what he would say if that were his baseline insurance premium.

CPI is a flawed measure

I agree. If I remember correctly, "core" CPI was dreamed up in the 70's to exclude the volatility caused by the whim of the Saudis and weather-related effects on crops. However, in a global food market with a weak oil cartel, it seems stupid to use core instead of headline inflation.

Posted by: Methinks | Mar 25, 2008 1:35:05 PM

But I do not believe I have the responsibility to ensure your welfare.

Posted by: John Dewey

I guess you think that somebody else should have paid for your cancer treatment?

Posted by: Methinks

Do you guys understand that everyone "foots the bill"?

If you work in finance and make money from the feds inflationary policies do guys like you understand that George and I can ask you the same questions. Should we be "footing the bill" so they can run their banks or hedge funds?

Please answer the question why you think George and I should foot the bill for the inflationary policies of the Fed that benefit the lenders more then their customers?

At some point your argument comes down to the question, "What is the purpose of society or government" (since society is a bad word around here).

The nature of your "individualist society" will leave a greater majority in abject poverty as Marx described so well. (Yes Marx descriptions of the failures of capitalism are right on even if his solution was wrong).

So why on Earth would you expect the whole of society to choose a set of rules that have been shown OVER AND OVER to lead to a society of oligarchy and privilege over one of egalitarianism and merit?

The rules should be made by the people of the society and not by the corporations and not by the elite. If the elite and the corporations don't like the rules they can go else where.

My wants are simple. Separate money from politics just as religion is supposed to be and let democracy of the people decide how to set up society.

You guys think you support individualism and competition but what you really support ultimately leads to oligarchy and privilege.

Posted by: muirgeo | Mar 25, 2008 1:36:38 PM

It surprises me that nobody here objects to the use of CPI in this way. What, nobody buys food or energy and instead consumes primarily light trucks?

CPI is a flawed measure.

Posted by: Blutskralle

Yeah and even using that we're to be happy because CPI was 3% while compensation increased 3-4%. Talk about straining an argument...

Posted by: muirgeo | Mar 25, 2008 1:39:51 PM

I just want people to stop pretending that there is much of a free-market in this industry.

Posted by: Deryl G

I would ask the same of the Banking and Finance industry. Are they really free market industries. Derivatives ultimately backed by the fed are the same thing as shopping for apples in the market?... I don't think so.

Posted by: muirgeo | Mar 25, 2008 1:43:53 PM

Muirgeo,

"Separate money from politics..."

You know, I've heard you say that a thousand times and it suddenly occurs to me that you have a valid point. Taking the money out of politics is exactly what is necessary if we want to return to a more libertarian society. Yes, let's take all the money away from the political class. They can get together and talk as much as they want to, but without money, they will be forced to resume their proper role in civilized society, and to stop pushing people around.

Posted by: Randy | Mar 25, 2008 1:51:41 PM

Cpurick,

"Isn't it also possible that you'd just be dead?"

Exactly.

Posted by: Randy

At least we're kicking the crap out of those Ukrainians.

This post of course to be followed by every excuse under the Sun why the comparisons are not legitimate. But guys at some point 40 data points in favor suggest it's more then statistical aberration.

Posted by: muirgeo | Mar 25, 2008 1:53:18 PM

On the other hand, I'll bet I've misunderstood, Muirgeo. I'll bet you don't really want to take the money out of politics at all. I'll bet that you just want to forbid people from taking actions to defend themselves against the aggression of the state (or as you call it, "the people"). Considering your fascist inclination, that would make more sense. Am I right or am I right?

Posted by: Randy | Mar 25, 2008 2:09:05 PM

"You guys think you support individualism and competition but what you really support ultimately leads to oligarchy and privilege." : muirgeo

Yeah, like the political class is not an oligarchy, and like they're not privileged.

Posted by: Randy | Mar 25, 2008 2:17:59 PM

No Randy they can take actions using the courts and their own power to vote just like everyone else.

Fascism is what you would give us by combining the power of state and corporations...exactly what I want to avoid.

People don't defend themselves from the state with their money.... huge mega multinational corporations do.

Posted by: muirgeo | Mar 25, 2008 2:29:09 PM

Randy - honestly I don't know why you continue sparring with ducky's straw armies.

Posted by: FreedomLover | Mar 25, 2008 2:39:48 PM

"Fascism is what you would give us by combining the power of state and corporations..."

Which is exactly what FDR implemented. The state that you so consistantly defend is a fascist state.

"People don't defend themselves from the state with their money.... huge mega multinational corporations do."

They don't defend themselves from the state... they are an integral part of the state. That you believe otherwise is simply an indication of the extent to which you have been influenced by the propaganda of the political class.

Posted by: Randy | Mar 25, 2008 2:43:35 PM

FreedomLover,

I took a break for a few days, but I find it left me with a lot of pent up aggression. Feeling better now :)

Posted by: Randy | Mar 25, 2008 2:45:00 PM

If you work in finance and make money from the feds inflationary policies do guys like you understand that George and I can ask you the same questions. Should we be "footing the bill" so they can run their banks or hedge funds?

Please answer the question why you think George and I should foot the bill for the inflationary policies of the Fed that benefit the lenders more then their customers? - Muirpid

Muirdiot, you are truly an ignorant moron of immeasurable proportion. What other explanation can there be for your diligent efforts to spray your vast ignorance of the banking industry, among other things, all over this blog? This is as much as I could stomach of yet another of your idiotic rants.

We all "foot the bill" of inflationary policies. Most hedge funds are down. Despite headlines indicating the opposite at the end of the 2007, people in the financial industry are losing their jobs and getting paid as little as 20% of their expected compensation. When was the last time you took an 80% pay cut? When can we expect you to step up and hand over your earnings to help out these employees - the vast majority of whom had absolutely nothing to do with mortgages and include assistants and secretaries?

But this bit of ignorance really takes the cake:

"...why you think George and I should foot the bill for the inflationary policies of the Fed that benefit the lenders more then their customers?"

Lenders are the losers in periods of inflation because they are paid back the loan in depreciated dollars. The winners are the borrowers or "customers", in your words. You should really find out these basic econ 101 facts before your launch into one of your moronic tirades again.

Of course, you're such a dumbass, you probably can't begin to comprehend a single word in my post.

I don't remember what number Muirpidity vidyohs last recorded. But, it's probably fair to say that we're at least up to #8,257

Posted by: Methinks | Mar 25, 2008 2:45:01 PM

people in the financial industry are losing their jobs and getting paid as little as 20% of their expected compensation.

Well, actually, that's not true. I've seen compensation reductions as high as around 98%. Still, this is the risk you take when you work on Wall Street.

Posted by: Methinks | Mar 25, 2008 2:51:39 PM

I would ask the same of the Banking and Finance industry. Are they really free market industries. Derivatives ultimately backed by the fed are the same thing as shopping for apples in the market?... I don't think so.

Posted by: muirgeo

I made no claims one way or the other about the "Banking and Finance industry" in regards a free-market. I claimed that the health care industry is pretty far from a free-market. It was not clear to me whether you accept or reject my assertion. Can you please clarify that for me?

Thanks.

Posted by: Deryl G | Mar 25, 2008 3:17:08 PM

Deryl,

I would agree health care in our country does not represent a free market system. It's highly and inefficiently regulated and many of the big profiteers including Health Plan CEO and Pharmeceutical companies make their bread by avoiding free market competition and taking advatage of an ill set up mismash of a system.

Posted by: muirgeo | Mar 25, 2008 3:27:52 PM

We all "foot the bill" of inflationary policies.

Posted by: Methinks

Yeah and we all (NOT JUST YOU) foot the bill for Medicare, Medicaid, the VA, the Military Medical system and the NIH.

So stop claiming you're paying for some one elses health care.... like you said we all pay for it. If I had my way we'd get rid of the regressive nature of the medicare and social security tax and pass the buck further up the line to those who make so much using Fed inflated dollars.

Posted by: muirgeo | Mar 25, 2008 3:36:22 PM

muirgeo,

Is you position that in order to correct these problems we should institute more government control?

Posted by: Deryl G | Mar 25, 2008 3:40:11 PM

Can you explain to me how inflated dollar assists people in acquiring more wealth? I have no position due to my ignorance of the topic, but I'm currently skeptical.

Posted by: Deryl G | Mar 25, 2008 3:43:08 PM

Yeah and we all (NOT JUST YOU) foot the bill for Medicare, Medicaid, the VA, the Military Medical system and the NIH. - Muirdiot

What does that have to do with anything? Where was anyone (other than the voices in your drug-addled head) saying anything at all about Medicare, the Military and the VA?

You may be too stupid to realize when the subject is changed, but most people aren't that dumb.

So stop claiming you're paying for some one elses health care.... like you said we all pay for it.

Where did I say that, Muirdiot? You really have to take something for the voices in your head.

pass the buck further up the line to those who make so much using Fed inflated dollars.

Idiot

Posted by: Methinks | Mar 25, 2008 3:43:34 PM

Well, actually, that's not true. I've seen compensation reductions as high as around 98%. Still, this is the risk you take when you work on Wall Street.

Posted by: Methinks

No it's the risk you take when we let greedy bastards use fed dollars to make loans they can't cover with Wall Street also getting in on the game then expecting us all to take a fall personally (most peoples investments are down 10-15%) and to also pay for it in tax dollars as well.

My gosh if I wee so irresponsible as a doctor I'd expect to be sued out of my lives savings and to lose my license.

These Wall Street Bankers now have only $100,000,000 instead of $1,000,000,000 while many people no longer even have a home because we trusted them to use our fed back dollars in a responsible way. Its the sine qua non of why unbridled greed doesn't work.

Don't like regulation? Well thank the greedy leaders of your industry for their abuse of public trust, their malpractice, their mega-incompetence, their huge egos and their unrelenting greed for the huge heaping of regulation coming your way.

Posted by: muirgeo | Mar 25, 2008 3:47:10 PM

muirgeo,

I think you are claiming that the inflation caused by the fed led to too many bad loans being made and as a result the loan makers are now better off, but the loan takers and tax-payers are worse off.

I agree that too many bad loans were made, but I'm not sure how those who made the loans are better-off from that.

The loan-takers probably are worse-off, but shouldn't they be. If you borrow money that you ought not, then you ought to suffer from that.

The tax-payers are probably worse-off as well, but then that would not be caused by a free market. The cause of that would be governmental interference in the market.

Posted by: Deryl G | Mar 25, 2008 3:56:20 PM

muriego,

Do you think there exists a system in which bad people will not try to take advantage of others?

Posted by: Deryl G | Mar 25, 2008 3:58:44 PM

Deryl,

Can you explain to me how inflated dollar assists people in acquiring more wealth?

Inflation is destructive destroys wealth because inflation erodes the purchasing power of savings. As a very basic example: imagine you saved $100 and inflation is 10%. That means that by the end of the year, you need $110 to buy the same basket of goods you can buy now with your $100. So, the purchasing power of your $100 is reduced to $90 at an annual inflation rate of 10%.

Posted by: Methinks | Mar 25, 2008 4:04:49 PM

My gosh if I wee so irresponsible as a doctor I'd expect to be sued out of my lives savings and to lose my license.

Let me assure you, moron, I wouldn't bring a child of mine within 5 city blocks of you, let alone allow you to practice on him with medical license you just got over the internet.

Posted by: Methinks | Mar 25, 2008 4:08:46 PM

Methinks,

I understand what you wrote, but murigeo made a claim that some group of people was using inflation to acquire more wealth. I don't understand how that can happen and I'd like an explaination.

Posted by: Deryl G | Mar 25, 2008 4:12:20 PM

Methinks,

Unlike your profession mine is not in crisis because of the greed of those who practice it. If your incivility here is common amongst your professional peers it's no wonder your profession finds itself in the state it's in. Greed and ego are a poor basis on which to run an economy much less a country.

Posted by: muirgeo | Mar 25, 2008 4:26:17 PM

deryl,

Lending makes bankers money right? The more they lend the more they make. So by the lenders leaning on the fed to give them more money to lend they make more money lending ever more risky products, bubbling up their asset values and getting out of the game when the bubble burst. And then coming back to uncle Sam to help cover their losses.

You think a lot of those hedge fund managers and bankers didn't think to invest in Gold as well. Like I said they'll come out of it with 100 million istead of a billion while the average joe pays more in taxes and dollars depreciation if he were fortunate enough not to fall for one of the loan sharks at the base of the pyramid scheme.

Posted by: muirgeo | Mar 25, 2008 4:33:07 PM

Muirgeo,

"Greed and ego are a poor basis on which to run an economy much less a country."

I could not agree more. Unfortunately, greed and ego are, always have been, and probably always will be, the defining character traits of the political class. I think that the best an honest person can do is to deal with other free traders to the greatest extent possible, and with the political class as little as possible.

Posted by: Randy | Mar 25, 2008 4:43:01 PM

This is how I understood what you wrote:

The Fed inflates the dollar giving the banks more money to lend. Banks make money by lending. Therefore the banks made more money.

My thoughts:

If the additional loans were on net good loans, then that should allow banks in general to be profitable. If, on net, they are bad, then the banks will not be profitable.

Additionally, and cash they acquire from these loans will be worthless due to inflation. So even granting the above it maybe in true purchasing power they will not be any more wealthy than if there had not been inflation.

In the case where the government "bails them out", I would claim that the additional lending hurt them but that the government protected them from their downside risk. This should only turn a loss into a break-even scenario at best. While I don't agree with that happening, I don't think it makes inflation profitable for them.

Posted by: Deryl G | Mar 25, 2008 4:57:25 PM

Randy,

If individualism is such a successful basis on which to arrange society why is it not more prevalent? In fact, it is completely absent from almost any human society of which I can think.

If the cream always rises to the top, if the best system always prevails, if some guiding hand makes things always work if natural selection and survival of the fittest always prevail why are individualistic societies basically extinct from human culture. How can something that should work so good never survive in the real world ?

Posted by: muirgeo | Mar 25, 2008 5:29:39 PM

Deryl,

Just to flesh out your point...

The Fed's attempt to "bail them out" simply means that the Fed is willing to lend to banks at a much lower than market rate. In addition, by lowering the target Fed Funds rate, it attempts to lower the rate at which banks lend to each other. Since the banks' profitability relies on borrowing at a lower rate than the rate at which they are lending, this helps them. However, this helps only as long as banks continue to make loans and the spread between short and long rates remains positive. Ultimately, the Fed can only target but not control the short rate.

Inflation increases the hurdle rate for investment, reducing overall investment and the demand for new loans. So, the Fed hopes that by lowering the short term rates, it can help banks remain solvent, but it is unlikely to make them profitable because of a reduction in demand for loans due to rising inflation, the effects of rising risk premiums(fewer people and entities will qualify for loans)and, as you said, because inflation means that the loans are repaid in depreciated dollars.

BTW, I'm also not in favour of the Fed's actions - especially the unprecedented and unauthorized backstopping of Bear Stearn's bonds and the the acceptance of the crud otherwise known as CDOs as collateral for loans. I wonder what will happen if the banks that put up the crud as collateral go bankrupt and the Fed is stuck with near-worthless MBS's. It seems that it will be up to the taxpayers to bail out the central bank but the crisis in confidence could be devastating. I also agree with you that stoking inflation and an insistence of looking at only "core" inflation is a dangerous sport.

Posted by: Methinks | Mar 25, 2008 5:43:07 PM

Muirdiot,

Don't kid yourself. Your profession is riddled with drug-addicted anesthesiologists and packed to the gills with unimaginable incompetence - you are a prime example. Half my family are doctors and they feared for the lives of the future patients of most of their med school class. You have been afforded far more civility than you have ever earned.

Posted by: Methinks | Mar 25, 2008 5:47:37 PM

muirduck,

I will counter with a question of my own.

Why is it that every collective society always evolves into a dictatorship? If the purpose of a collective society is to distribute everything in equal shares among the people, why is it that in short order there are the elites and the suckers in a collective?

Posted by: vidyohs | Mar 25, 2008 5:47:51 PM

Ah ducky thinks that greed/ego are abominations that no economy should be run upon. I guess it's time to bring back the Ministry of Industry to decide what ego-free business we'll get to run... Is this guy serious????

Posted by: FreedomLover | Mar 25, 2008 5:50:14 PM

Why is it that every collective society always evolves into a dictatorship? If the purpose of a collective society is to distribute everything in equal shares among the people, why is it that in short order there are the elites and the suckers in a collective?

Posted by: vidyohs

First of all a collective is too generic a term to be useful. Social democracies rely on both competitive and collective forces. Their goal is not one of eqaul distribution.

The economic and social success of these "collectives" and the fact that none of them have gone to war with the other nor has any fallen into dictatorship is a tribute to their success.

Vidyohs, my good brother, we are not talking about true socialism or communism. We are talking about what works in the real world and what has advance liberty, economy and society further then any system ever....not perfect but the best so far.

Posted by: muirgeo | Mar 25, 2008 6:02:44 PM

(since society is a bad word around here).

Another illustration of your cluelessness.
Society is NOT a bad word around here. What we take issue with is the conflation of 'society' and 'the government'. This leads one to the erroneous assumption that 'we', or 'the people' are 'the government'.

Fascism is what you would give us by combining the power of state and corporations...exactly what I want to avoid.

Ach! You persist! But that's exactly what the progressive movement has given us and what you intend to perpetuate with your prescription, even if you don't realize it.

Governments are always oligarchical. ALWAYS.
In giving the government the power to 'mold' society, the progressive movement, which was and is an elitist movement, created the incentives for the 'wealthy and powerful' to make sure they were effectively in charge of that government. As long as you believe that you can counter those incentives and those powerful people with the 'right' kind of regulation, you will persist in perpetuating their rule.

So why on Earth would you expect the whole of society to choose a set of rules that have been shown OVER AND OVER to lead to a society of oligarchy and privilege over one of egalitarianism and merit

Please, show us just one. This post is completely contradictory to this one:
f individualism is such a successful basis on which to arrange society why is it not more prevalent? In fact, it is completely absent from almost any human society of which I can think.

If the cream always rises to the top, if the best system always prevails, if some guiding hand makes things always work if natural selection and survival of the fittest always prevail why are individualistic societies basically extinct from human culture. How can something that should work so good never survive in the real world ?

If the cream always rises to the top, if the best system always prevails,

Says who? Power overrides gravity.

Posted by: Sam Grove | Mar 25, 2008 6:03:34 PM

This leads one to the erroneous assumption that 'we', or 'the people' are 'the government'.

We may or may not be the government but shouldn't we be? That's the whole point. We should govern ourselves and not have a unitarian dictate as George Bush is attempting to become.

Posted by: muirgeo | Mar 25, 2008 6:30:40 PM

What I hear here is way too many college classes and Milton Friedman essays and not enough reading of the original texts of individualism and capitalism(Mill, Smith, etc). I have the utmost respect for Friedman of course and I agree with a lot of what he said, however, the great advocates of individualism were also men with great practicality. What I'm reading smacks of ideology on both sides and not enough of a practical look at the problem. Sure, maybe the practical view is one of personal responsibility in health care costs but it is then necessary to make an argument, not just state your belief, jot down some numbers, criticize the other persons and feel vindicated.

Posted by: econmedic | Mar 25, 2008 6:32:36 PM

Muirgeo,

"...why are individualistic societies basically extinct from human culture."

They're not extinct. On the contrary, the most individualist societies are by far the wealthiest. Those societies that have never escaped tribalism are still in poverty, and those that have tried various forms of nationalist tribalism have reverted to poverty to the extent that they succeed in doing so. The same effect can be seen even in localities - the greater the tribalist element, the greater the poverty.

Posted by: Randy | Mar 25, 2008 6:42:43 PM

Gilduck,

Pray tell vidyohsgoose//com'on son, you can do better than this. I would suggest something less awkward such as vidygoose, it just has a better flow; but really son, can't you be more original? //

Posted by: Gil | Mar 25, 2008 8:58:53 AM

Here's the deal Gilduck, foreigners should never ever try to comment on American history. You have no idea of what I was writing this morning. Even though I was rushed for time and feel like I did an incomplete job, I still made my thesis known to the intelligent of this Cafe. You are the exception, obviously.

The "company store" may have been a new world phenomenen, but it is known to have been operated in all three of the major north American countries, the USA, Canada, and Mexico. I suspect that the concept was known and exercised in old world countries as well, maybe just known by another name.

Chattel slavery ceased to exist in north America with the end of the Civil War, but that did not end slavery. The new slavery was economic slavery which tied a person to another through legal economic ties that prevented the debtor from exercising free will in working or leaving. The new economic slavery was debt based.

I know for a fact that as late as 1957 there were still economic slaves in the Brazo River valley in central Texas on many of the large farms. I hate to venture when, if at all, large mining operations in remote areas, etc. ceased to use this method to retain workers. I know for a fact that prior to closing the Phelps Dodge copper mine in Ajo, Arizona, the Phelps Dodge did indeed operate a "Company Store" in downtown Ajo, and was virtually the only large supermarket/drygoods store in town, circa 1954.

Phelps Dodge employees were allowed to buy on credit (run a tab) far beyond what they could payoff with any reasonable effort. Law enforcement would make sure no one skipped without paying. There was no alternative to continue working and trying to skimp on consuming until one could get the debt paid off, which generally was never.

That is a company store. No script, no mumbo jumbo, just straight forward economic slavery.

My earlier reference was not to how it enslaved people but to the fact that because they are enslaved the store knows they (slaves) have no choice and therefore the store (system) does/did not have to cater to the choices, wishes, dreams, desires, wants, or even needs of the customer. They could, and did, pretty much stock what they wanted to because their customers weren't going anywhere else anyway. Being the company store allows managment to have a cavelier attitude towards clientel.

That brings me back to my point. In general the American health care system has become like a "company store" in that the interests of the consumer, client, or customer no longer is the central focus of the providers. Unfortunately, "are we complying with govt reg number XYZ and can we document that so as to cover our asses from presecution or lawsuits" has become as, if not more than, important as "can treat him at a reasonable cost?"

Where I feel I was remiss this morning was in not being able to go into more detail.

Now if one is of moderate means and has to rely on health insurance the "company store" attitude will prevail in almost evey dealing with his health care providers. Those who fit that description find that providers are assigned or chosen from a very limited list, and procedures outside of routine office visits must be approved by people who have regs and a bottom line to meet. "Company store"

The paradox is that which exists between the "company store" of the moderate means as compared to the "free market" that exists for the very wealthy for whom any procedure is affordable, any doctor accessible, and any facility of no concern.

For the very wealthy, choice in the free market of health care is available.

So, what I am saying to you, Gilduck, is that our health care system operates on two levels, one of the "company store" level, and the other as a "free market".

The level that operates as a "free market" is the finest in the world and wealthy folks from around the world come here for their needs.

The level that operates as a "company store" has its problems, but since it is not a "free market" no labels such as "market failure" or "market success" can be attached to it. This level provides, it works (barely), but it is not a market.

Now, I have patiently explained, aren't you glad?

The problem with you and nuirduck is that if you weren't born as total "mental dipshits", you got there as quickly as your education would let you.

Posted by: vidyohs | Mar 25, 2008 6:45:33 PM

econmedic,

"Sure, maybe the practical view is one of personal responsibility in health care costs but it is then necessary to make an argument, not just state your belief, jot down some numbers, criticize the other persons and feel vindicated.
Posted by: econmedic | Mar 25, 2008 6:32:36 PM"

I feel your pain, most of us do; however, the best, reasonable, rational, and intelligent arguments have been made over and over and over and over again to individuals who are stuck in the socialist mode of evangelicism and nothing short of personal experience will ever budge 'em.

Frankly I find it more fruitful to just insult those individuals and have fun with 'em. Why not? It's what they will do to you if they get the upper hand. Try participating in a moveon.org blog as a conservative, the way we treat our village idiots here is a blessing to them compared to how you'll be treated as a conservative on a socialist blog.

Posted by: vidyohs | Mar 25, 2008 6:55:36 PM

They're not extinct.

Posted by: Randy

Soooo.... name one and why aren't you livin there?

Posted by: muirgeo | Mar 25, 2008 7:32:37 PM

Sam:

Got more?

I agree that health care in the U.S. is not remotely free in the "free market" sense; however, this fact begs the question. Since we don't have a free market in health care at all, how much worse can a universal system be? Given that we have incredible regulations on health care already, why not regulate to control costs? Controlling costs is not subsidy. We already subsidize. Controlling cost is saying "no". In reality, states with universal systems actually say "no" to more health care costs than we do in the U.S., and individual consumers don't say "yes" here. Corporatists in and out of the most central state agencies say it.

cpurick:

Garbage. If someone has $99K of credit card debt and $1K of unpaid hospital bills, muirgeo's studies will accept the hospital bill as the cause.

Your logic is the obvious garbage. Hardly anyone has $99K of credit card debt, but this cost is common in a catastrophic illness or injury. You didn't even follow the link to see what the study claims, did you?

Also, with illness comes an inability to work. Even with insurance, a disabled worker could go bankrupt. And of course, muirgeo's studies will invariably blame the bankruptcy on the health care costs.

This bankruptcy is also a consequence inadequate insurance, even if health care insurance per se is not the issue.

Posted by: Martin Brock | Mar 25, 2008 7:53:41 PM

Muirduck,

You are so rooted in your ditch intelligence that you simply can't imagine that possible Randy already does live in one of those wealthy societies that has freedom of.....

Your problem, my little teacup Chihuahua intellect is that you see all 300 million of us here in the USA as a society, when such is not the fact at all.

There are many societies here in the USA. Do you imagine for one moment that Teddy Kennedy thinks that you are a member of his society?

Do you think for one moment that Reverend Wright, Obama's spiritual leader, thinks you are a member of his society?

Dream on muirduck, but get a clue...please from somewhere, somehow, get a clue.

You suffer muirpidity on levels that are mind boggling.

Posted by: vidyohs | Mar 25, 2008 7:57:16 PM

Given that we have incredible regulations on health care already, why not regulate to control costs?

Why go one way and not the other?

Can't think of any market oriented reforms?

How about insurance portability and tax credits for out of pocket, that is, consumer paid medical insurance?
How about giving medical care tax credits?

Do you think it a good idea to increase bureaucratic control of medicine?

Posted by: Sam Grove | Mar 25, 2008 8:20:47 PM

We may or may not be the government but shouldn't we be? That's the whole point. We should govern ourselves and not have a unitarian dictate as George Bush is attempting to become.

I've already described what such a government would look like, but you require a progressive, that is, social engineering government, which necessarily puts the reins of power in the hands of politicians and bureaucrats and removes them from the people.

The only way 'the people' can manage the government is if the government is restricted to those functions that a large majority of people can agree upon.

Once the government exceeds this minimum, then multiple constituencies will form to effect their visions, which will often be in conflict.

These conflict will then be exploited to keep the people from effectively managing their government. It will no longer be their government. Essentially the way it is now.

This is the result of a progressive vision of government.

Posted by: Sam Grove | Mar 25, 2008 8:31:08 PM

Since we don't have a free market in health care at all, how much worse can a universal system be? - Martin

From my experience, much much worse and much more expensive. Apparently, countries with socialized medicine agree as they're all moving away from that model and privatizing. The better model, is an actual free market in health care.

Controlling cost is saying "no".

Isn't that like playing God - deciding who gets to live and who doesn't? Who gets to move up on the list and who doesn't? It's one thing when random dumb luck decides that for us, but what human being is qualified to make that decision? Of course, one could just pay extra (and they do), but if that's the case, who needs socialized medicine anyway?

Hardly anyone has $99K of credit card debt, but this cost is common in a catastrophic illness or injury.

True, hardly anyone not facing bankruptcy has $99K of credit card debt. Others have way more credit card debt than that and never come close to bankruptcy. The amount of credit card debt and the cost of illness by itself is irrelevant.

I happen to have read this study - a much longer piece than the blurb provided by muirdiot. Besides the seriously flawed data collection method - a questionnaire administered to people who filed for bankruptcy asking them what they think caused their bankruptcy - the study is missing is a comparative examination of the spending and saving habits of those who fell victim to a catastrophic illness and didn't declare bankruptcy and those who did. After all, you can't seriously believe that everyone who is struck with a catastrophic illness files for bankruptcy.

How many of these fine folks do you suppose answered "well, I was living high on the hog, levered to the hilt, saving nothing and then I got cancer and that did me in"? I'm sure you've noticed the curious behaviour of human beings - they are 100% responsible for success while failure is always someone else's fault or a catastrophic, unforeseen event. Despite this study's claims based on dubious research, job loss remains the number one reason for bankruptcy. And sure, not having a job means no access to insurance either - that alone is a problem.

Posted by: Methinks | Mar 25, 2008 8:50:12 PM

Your problem, my little teacup Chihuahua intellect is that you see all 300 million of us here in the USA as a society, when such is not the fact at all.

I don't know, Vidyohs. I think Muirdiot's problem is that he can't process information and produce an intelligent response. It's one thing to have someone disagree with you and another when that someone is incapable of comprehending basic concepts and not comprehending that he's not comprehending. It's like listening to Al Sharpton - knows nothing but is certain of everything.

Posted by: Methinks | Mar 25, 2008 8:57:13 PM

Muirgeo,

"...name one and why aren't you livin there?"

Like Vidyohs said. There are lots of free spirited people living right here in the USA, and we're the only reason that you fascists haven't yet been able to reduce the population to complete poverty. I must admit, though, that you all have made some serious "progress" towards that objective in many parts of the country.

Posted by: Randy | Mar 25, 2008 9:32:07 PM

Methinks,

muirduck doesn't know what he doesn't know about what he doesn't know.

I am sure you noticed that this thread brought out a few of the hidden socialist evangelical crazies that read but don't post until inflamed with passion. Notice how that few are just like muirduck and Gilduck? All they do is regurgitate that rote learning they got in their socialist church, all of which intelligent people have long recognized as plain wrong.....nay it is muirpidity on a massive scale.

Posted by: vidyohs | Mar 25, 2008 9:44:02 PM

Martin Brock:

Hardly anyone has $99K of credit card debt, but this cost is common in a catastrophic illness or injury. You didn't even follow the link to see what the study claims, did you?

Sure I read it, and I found more than a few rebuttals, too. I also didn't claim that anyone has $99K of credit card debt: I simply observed that, the way that study works, health care debts are blamed for any bankruptcy where they are present, even if they comprise only a tiny fraction of the total debt.

As I said, muirgeo's original claim is garbage -- as usual. Don't soil yourself defending it.

Posted by: cpurick | Mar 25, 2008 9:48:58 PM

I think Muirdiot's problem is that he can't process information and produce an intelligent response.

I think muirgeo is so heavily invested in his construction from his unquestioned premises, the premises of mercantilism, that he is completely unwilling to question either the construction or the premises. Like everyone else, he views and interprets the world from his construction.

Posted by: Sam Grove | Mar 25, 2008 9:58:27 PM

"Fascism is what you would give us by combining the power of state and corporations...exactly what I want to avoid." - Murthaduck ("the children they've killed in cold blood")

Murthaduck, you've asserted that it's proper and moral to give welfare to the world's richest corporation (GE) because that welfare is "aimed at benefit for society in general".

How can you claim that you want to avoid fascism when you're in favor of the world's richest nation subsidizing the world's richest corporation?

Based on your position that corporate welfare is good as long as it's a "benefit to society", let's try again for an explanation as to why or why not these corporations are as worthy as GE is of your support and my tax dollars (from a previous thread):

"Ford Motor Company makes it possible for people to travel to our national parks at their convenience, so that they can backpack and see some of the natural beauty of this country. Is this a benefit to society? Ford's in financial trouble and could really use a boost... Whaddaya say?

Rocky Mountain Steel mills makes rails. This allows people to take trolleys, Amtrack, and for freight to be efficiently hauled across America. Is this a benefit for society? There may be less demand for rail and other steel products this year. Should we give them a boost?

Smith and Wesson makes handguns that women can buy and use to put a bullet between the eyes of some 300lb rapist that has decided that she'll be dinner tonight. Is this a benefit for society? Shouldn't we make it more affordable for women to defend their lives?

Please explain why these companies don't deserve corporate welfare, but the richest corporation in the world does?

Posted by: brotio | Mar 22, 2008 11:34:50 PM"

Posted by: brotio | Mar 25, 2008 10:24:27 PM

Universal Health Care (its a less loaded term than 'socialized medicine') lacks a basic economic principle. Incentives.
I mean this in a very broad way, from incentives to take medications as directed and get check ups as necessary to incentives to work together as a society for the betterment of medicine.
Will someone please explain to me what the incentives are for patients in a universal health care setting to keep costs low?
Why should they stay medication compliant when it doesn't cost them anything?
Why not see the doctor (or even the specialist) when you have a sore throat?

And what about treating the child with cancer in a Free-Market system when the parents can't pay?
How about the universal health care system? Can it really afford to treat every kid with cancer?

Posted by: econmedic | Mar 25, 2008 10:37:32 PM

What on earth are you talking about (honk honk)?

People who get into debt are 'enslaved to the loan-giver'? So? King Solomon said this too a few thousand years ago? Does not the criminal become a 'slave to society'? He have no claim against 'mens with guns' who would remove him off the streets and put him into jail. Should someone with a credit card get surprised that when they can't pay the debt they find themselves in a quandary with the loan-givers? How is this incompatible with the free market? Last time I looked it was a personal responsibility for someone who takes a loan to pay it back and shirk it when it become uncomfortable to do so. If people have the choice to take up the debt in the first place then by rights it can't be slavery. Bringing gumvint into this and complaining about 'tax slavery' is another issue.

Posted by: Gil | Mar 25, 2008 10:49:03 PM

As I said, muirgeo's original claim is garbage -- as usual. Don't soil yourself defending it.

Posted by: cpurick

No it's not garbage. No matter how you define it medical bills are a significant and growing cause of bankruptcy almost exclusively in America.

You can deny that if you want but its simply a matter of you choosing to deny a fact.

Posted by: muirgeo | Mar 25, 2008 10:55:14 PM

How about the universal health care system? Can it really afford to treat every kid with cancer?

Obviously, empirical evidence suggests that it can't, otherwise the wait lists for treatment wouldn't be so long. All great points, econmedic.

Posted by: Methinks | Mar 25, 2008 10:58:36 PM

No matter how you define it medical bills are a significant and growing cause of bankruptcy almost exclusively in America.

Got that, cpurick? No matter how you define the real cause of bankruptcy - spending too much, saving too little, losing your job, dumb luck - it's all just a version of "health care costs" to muirdiot.

But I would be remiss if I didn't acknowledge that muirdiot's bludgeoning this blog with his posts over the past year has taught us one invaluable lesson about health care - vet your doctors carefully. Make sure their "degrees" were not obtained by mailing $10 to an address copied from the back pages of a child's hobby magazine.

Sam,

I appreciate your desperate attempts to find a reasonable explanation for muirpidity, but in the end I think it all just comes down down to incurable stupidity. As Vidyohs says: "muirduck doesn't know what he doesn't know about what he doesn't know." If he/it were just honestly making a case for socialism, fine. But he/it has no idea what the hell he/it's ranting about.

Posted by: Methinks | Mar 25, 2008 11:16:26 PM

A better system would be one with fewer poor people and most people wealthy enough that they have no financial constraints on helping those in need.

Unfortunately, with the government wasting so much of our wealth, on empire, bureaucracy, etc. many people do feel constraints on charitable giving. Even so, the U.S. is home to the most charitable giving in the world.

Posted by: Sam Grove | Mar 25, 2008 11:23:02 PM

When there is no incentive.
From my own personal experience in large cities, people on medicare and medicaid (and sometimes insurance) call the ambulance for things that they know are not severe. Of course 'medical emergency' is very subjective. What I know not to be an emergency may seem life threatening to the lay person. However, the vast majority know full well that either they can pay $10 for a taxi or get a 'free' ambulance ride. Except that it isn't free. It costs the taxpayers between $500-$1000 to ride. Thats a very expensive taxi. Partially it is that expensive because people without insurance often don't pay, so insured patients have to subsidize them. Does that make a case for universal health care (to spread the cost)? Well, maybe. But what is the added cost of all of those new people(those who didn't call before because the cost was prohibitive) calling the 'free' ambulance?
More trucks on the street (each truck at least $100,000), more pollution, more need for EMTs and Paramedics in a field that is already scarce.
Now extrapolate out to other fields of medicine.

Posted by: econmedic | Mar 25, 2008 11:37:22 PM

I appreciate your desperate attempts to find a reasonable explanation for muirpidity

Do I come across as desperate?
I thought I was just expressing my thoughts.
Consider what I said. Perhaps I was simply diagnosing the nature of the stupidity.

I once supposed that the purpose of government 'education' was to induce intellectual impairment. Seems to work in many cases.

Posted by: Sam Grove | Mar 25, 2008 11:37:30 PM

oops

Posted by: Sam Grove | Mar 25, 2008 11:39:44 PM

I appreciate your desperate attempts to find a reasonable explanation for muirpidity

Do I come across as desperate?
I thought I was just expressing my thoughts.
Consider what I said. Perhaps I was simply diagnosing the nature of the stupidity.

I once supposed that the purpose of government 'education' was to induce intellectual impairment. Seems to work in many cases.
_______________
There, fixed.

Posted by: Sam Grove | Mar 25, 2008 11:41:05 PM

"Last time I looked it was a personal responsibility for someone who takes a loan to pay it back and NOT shirk it when it become uncomfortable to do so" . . .

:\

Posted by: Gil | Mar 26, 2008 1:31:24 AM

muirgeo:

No matter how you define it medical bills are a significant and growing cause of bankruptcy almost exclusively in America.

"No matter how you define it..." I think not. I think it matters a lot how you define it, and I think that's why your discredited studies define it so broadly.

BTW, Hayek would have agreed that subsidized health care should not kick in until after the ill had spent all their own money on treatment. So I guess Hayek's on my side when it comes to bankruptcy.

Posted by: cpurick | Mar 26, 2008 7:52:26 AM

"What on earth are you talking about (honk honk)?
Posted by: Gil | Mar 25, 2008 10:49:03 PM"

It isn't often I get to quote myself.

"The problem with you and nuirduck is that if you weren't born as total "mental dipshits", you got there as quickly as your education would let you.
Posted by: vidyohs | Mar 25, 2008 6:45:33 PM"

Your socialist tape deck is broken, Gilduck, haven't you noticed. It just plays random idiocy in response to stimuli.

Even when a man tells you what the point is you are incapable of seeing the point and addressing the point. muirpidity, Gilduck, sheer muirpidity on levels that are mind boggling.

Posted by: vidyohs | Mar 26, 2008 8:28:15 AM

But what is the added cost of all of those new people(those who didn't call before because the cost was prohibitive) calling the 'free' ambulance?

Posted by: econmedic

I don't think overusing the system is a particularly big problem. Most people don't go to the doctor or use medicines they don't need just because they are free. Co-pays and such can address some of the abuses that do occur.

Again almost every other developed nation apparently does offer "free ambulance" rides and their per capita healthcare expenses are far less then ours with just as good and sometimes better outcomes.

We already pay publicly for 60% or more of all healthcare dollars. An efficient unified system could almost be covered by what we already pay.

Posted by: muirgeo | Mar 26, 2008 10:11:28 AM

BTW, Hayek would have agreed that subsidized health care should not kick in until after the ill had spent all their own money on treatment. So I guess Hayek's on my side when it comes to bankruptcy.

Posted by: cpurick

That can be said of course because you have the relevant quote to back it up with and not just because you are saying things you like to think are true...right?

Posted by: muirgeo | Mar 26, 2008 10:13:33 AM

"Again almost every other developed nation apparently does offer "free ambulance" rides and their per capita healthcare expenses are far less then ours with just as good and sometimes better outcomes."

Muiridiot: Why do you jump from a specific concept, usage of ambulances, to aggregate healthcare spending. Wouldn't it be more wise to compare the per-capita costs of ambulance rides.
Or are we to just ASSUME that expenditures on ambulance services are proportional as a share of total healthcare costs from one country to another?

Posted by: Jay | Mar 26, 2008 10:25:31 AM

Muirgeo,

Has it not occurred to you that you are a doctor(?) pushing for the government to force people to spend a greater amount of their earnings on healthcare? Are you thinking that this makes your testimony more credible?

Posted by: Randy | Mar 26, 2008 10:47:21 AM

Do I come across as desperate?
I thought I was just expressing my thoughts.
Consider what I said. Perhaps I was simply diagnosing the nature of the stupidity.

Sorry, Sam. I didn't mean to insult you. That was was meant to be taken with a grain of salt. It's just that logical people with organized minds have a difficult time with randomness, so they try to find pattern in randomness. Muirdiot's thoughts are random and disorganized, almost schizophrenic. His posts bring to mind words cut from headlines and randomly pasted onto a sheet of paper. we try to derive meaning from them that I no longer believe exists. I don't think he's capable of understanding, let alone buying into a system - whether it's socialism, capitalism, communism, etc. The intelligence necessary for logic just isn't there.

Posted by: Methinks | Mar 26, 2008 10:51:16 AM

I think you exaggerate. Muirgeo's thoughts, while at times contradictory, exemplify a distinctly Marxist/progressive perspective. That they can be contradictory is a result of construction from the flawed premises of mercantilism.

Have you noticed muirgeo's lack of response to this charge, which I have made repeatedly? That is, that he operates on the premises of mercantilism. This seems to be the general case with leftist modeling.

Posted by: Sam Grove | Mar 26, 2008 11:50:24 AM

Muirgeo,

Has it not occurred to you that you are a doctor(?) pushing for the government to force people to spend a greater amount of their earnings on healthcare? Are you thinking that this makes your testimony more credible?

Posted by: Randy

Muirgeo,

Has it not occurred to you that you are a doctor(?) pushing for the government to force people to spend a greater amount of their earnings on health care? Are you thinking that this makes your testimony more credible?

Posted by: Randy

Has it not occurred to you our system is the most expensive? The one I would propose would cut medical expenditures as a per cent of GDP.
My whole point would be that the current system is wasteful and inefficient and that we get better care for less. And it can be done in a market oriented approach.
So once again you've simply mis-characterized my position.
So what would be your solution Randy? And what evidence do you have to support it?
My recommendations are fact and reality based.

Posted by: muirgeo | Mar 26, 2008 12:21:02 PM

Muirgeo,

Funny, but I have come the understand that whatever comes along with the term "reality based" is always exactly the opposite. But that aside... my solution would be to get the government entirely out of healthcare. The government has no business providing healthcare, regulating it, or even providing tax breaks associated with it. It is precisely because the government is forcing people to pay for healthcare, as opposed to the other choices they might otherwise make, that healthcare is consuming such a large percentage of GDP. And before you even start, no I'm not in favor of just letting poor people die. But if the government wants to get involved in helping such people it could do so far more cost effectively by just handing out money and letting them decide how to use it best. Eliminate the buracracies running the current programs and there would be plenty of money to hand out.

Posted by: Randy | Mar 26, 2008 12:35:48 PM

Why is U.S. health care so expensive?

Muirgeo claims it is less efficient, and while I don't think we can claim such a system is efficient, we must remember that Americans, among the wealthiest people in the world, are willing to buy more health care than people in other countries. We have an aging population and a good deal of medical costs are directed to end of life care. We also spend more in saving premature babies, a very expensive proposition.

So let us separate the spending from efficiency in our analyis.

Anyone who thinks government management is efficient has a great deal to prove.
For one thing, government displaces it's cost to the private sector whenever it can. The cost of complying with government required paperwork, whether in Medicare or otherwise is a cost that is born by the private sector and not by the government.

It is also well known that, in countries with government managed medicine, costs are controlled by rationing. When selling government controlled health care, make sure the voters are made aware that they may not get the care they would otherwise be willing to pay for.

Posted by: Sam Grove | Mar 26, 2008 12:38:13 PM

But if the government wants to get involved in helping such people it could do so far more cost effectively by just handing out money and letting them decide how to use it best.

Yes. The government could also tax credit any monies provided to those who need via charitable contribution. Give doctors and hospitals tax credits to any care given that recipients are unable to pay for.

Posted by: Sam Grove | Mar 26, 2008 12:41:45 PM

Sam,

I can only conclude you yourself do not understand what communism or mercantilism are or you have misunderstood my positions. I honestly believe your claims simply amount to more labeling and name calling. That's what people do when they feel threatened. They label, accuse and attempt to demon-ise the other to alleviate their own discomfort with a conflicting position. It's the basis of reactive thought processes controlling a person over true introspection. Its reflexive ego controlling oneself while suppressing the true conscious thinking being underneath a fog of false control.

If I was to summarize my position it would be that I believe we need more democracy not less ( ie. a government represents the needs of its people more then of its economic institutions).
I believe in competitive markets but understand they work best with good regulation. I believe in certain instances the government can do as good or a better job of performing a service then the market but by no means do I think the government should control the means of production.

And unlike communism I think people who complain about the state of things should be free to emigrate to wherever they please.

As best as I understand mercantilism it puts the needs of the state above that of it's people. While there are often common needs and interest I would argue the needs of individual often supersede the needs of the state and many of these things are spelled out in the Bill of Rights. I believe in our Bill of Rights so to call me a mercantilist is again ill-informed and a mis-characterization based more on your need to label me rather then based on anything factually in common with the theory of mercantilism and my actual beliefs.

But Sam if it makes YOU feel better you call me and label me however you need. I'm a big boy and pretty much overcame the name calling thing around 5th grade.

Sam would you consider countries like Germany, Norway or Sweeden as communist or merchantilist?

Posted by: muirgeo | Mar 26, 2008 12:56:01 PM

I didn't say you were mercantilist, I said you accept the premises of mercantilism.

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