Quote of the Day
This is the chart that has launched a thousand takes.
The conclusion seems obvious: Everything the govt touches goes to infinity in price. Everything pure capitalism touches goes to zero.
But there’s another way of looking at this graph that dramatically changes the story.
Derek Thompson @DKThomp
Tweeted on March 18, 2023
The details of “the other way of looking at the graph” is at the linked tweet. It is claimed:
It’s not just govt vs. capitalism
It’s also services vs. goods.
But I see Cellphone Services and Food and Beverages out of the claimed groupings. Still, it is an interesting graph.
The main complaint about medical services is that they *aren’t* sufficiently regulated and thus those of us not on medicare are getting gouged by rapacious insurance companies. In fact it’s the folks who *do* have medical services “touched” by government that pay less. For that matter, I see little on this chart that is a “government influenced” item, they all seem to be market driven prices.
What am I missing here?
Someone I knew could walk fine. An orthopedic cushion is not covered by Medicare, but an wheelchair equipped with an orthopedic cushion is.
So this person had a “free” and unused wheelchair in their house, and an orthopedic cushion on their sitting chair.
The rest of the system is structured around coercion and price-controls, neither of which are price-lowering forces.
The number of foreigners who call me daily, violating multiple federal telemarketing laws attempting to send me “no cost to you” COVID test kits, motorized wheelchairs, and diabetic supplies billed to Medicare is a testimate of the levels of fraud occuring.
There’s waste and corruption in any system. Speaking as one whose family uses an unusually large amount of medical services, I can assure you that the private side of health care is in no way a land of efficiency and appropriate costs.
Medical costs have spiraled out of control because private companies have realized they can create enormous bureaucracies in between the patient and the final payer that suck out billions of dollars for doing absolutely nothing. It’s capitalism in its purest form: complete corruption.
I do beg to differ with you about medical services insurance being pure capitalism. In actuality, it is anything but capitalism. When you claim pure capitalism, you are implying that the supplier and the consumer are engaging in a transaction that both are satisfied with it being fair and acceptable. If either one is not satisfied, they can pull out of the transaction and life goes on. Unfortunately, once medical insurance became a perquisite as a means to attract desired workers in a tight labor market, it soon devolved into an standard expectation of employment. Companies didn’t want to manage it and neither did doctors. It took both away from what their core competencies were. And so, insurance companies moved in to fill the gap but because they needed to make money for their services, the costs began to rise. Once that happened, government had to get into the mix to regulate it to make it fair for everyone and like any help you get from the government, costs went up yet again. Interestingly, the patient got left at the gate and has had to settle for what others negotiate for their medical benefits. That is a long way from the true capitalist model. The name is still there, but it certainly is no longer a rose.
So, I have often wondered why medical insurance cannot be handled like automotive insurance. With your vehicle, you can insure with whomever you think provides the best value and if that changes, you have other options. Not saying it is a perfect model, some people still get cancelled when they shouldn’t, but the industry is certainly more responsive in general than the medical insurance industry. And, if each individual had personal control of the money that is paid as premiums, you can bet that the competition would get pretty fierce and the costs would reflect that.
” It’s capitalism in its purest form: complete corruption.”
Sorry, that dog don’t hunt, John.
Saying we are in a capitalist system is like saying were in a democratic system. Government intervention in commerce is communism.
Government controls cannot be capitalist.
Just as Powerwagon says.
And the insurance companies have used government to wedge themselves into the medical system.
Just like public utilities. The profit margin is set. The only question at that point is do you want to make 10% of a $100? Or 10% of a $1,000?
The real problem is that every system of power man creates will be corrupted.
Capitalism is obviously no different. And just as vulnerable as totalitarianism to abuse.
Most of the items in the “more affordable” category are produced outside the USA.
It would be nice to see “pharmaceuticals” separated from general medical services.
College textbooks are goods and not services, but they are firmly in the “going up” area.
I remember my reaction to what my textbooks costed, even 15-20 years ago. “Shocked” doesn’t quite describe it. For some classes the book(s) costed more than the tuition and fees! Buying used books saved quite a bit, but wasn’t always an option — not if a new edition was just released.
From the chart it would appear that prices for services tend to increase while prices for products tend to decrease. Manufacturing costs are either being driven down by offshoring or by automation. Can’t do that for services so those costs increase. But it’s a relatively simple chart that doesn’t show a lot of information.
Housing is a good, not a service. Food and beverages are goods. College textbooks are goods.
Prior to the COVID lockdowns about half of all food and beverages were not consumed at home. That means services. Not sure what has happened since the restrictions eased.
A lot of the disruption in grocery supply chains had to do with this as people had to learn how to cook again. Just looking at TP, the rolls used in institutional settings are dramatically bigger than the ones used in the home, making substitution difficult.
Much of the “goods” have been outsources to slave-wage countries, so that’s impoverishing out own workers in order for the multinationals to boost profits.
Many of the services, like medical and higher ed, are not just highly regulated (with all the layers of bureaucratic costs) but also separate the actual consumer from the pricing, and charge the same regardless of the outcome or quality of the product. Student loans drive college price increases, insurance and vaccine injury (via the rise in chronic conditions the normal childhood vax sched causes) drive medical.
Childcare is driven by the planned destruction of the family making it needed.
It’s complicated, but everything in the red is fixable.