Health Care is Not a Demand-Side Problem
The cost of healthcare is a supply-side problem.
Considerable time is being spent arguing costs are entirely demand driven. It is not! This argument is nothing but part of a scheme to rig the market to limit supply to support the costs (the profit margin). It is a pro-profit argument, like Reaganomocs, not pro-growth.
Yes, demand is strong and relatively inelastic. In other words, one unit increase in price does not result in a decrease in demand. Everybody needs health care. This is the perfect condition for abusive pricing and fraudulent practices that comes with minimizing market forces and maximizing public finance. It is also a strategic market for taxing the value added and reinvesment by means of public finance to increase the supply to meet the demand, thereby controlling the costs.
The sector charges largely whatever it wants and the government pays it. There is currently some control, but it is very weak because of the revolving door and requires a huge government bureaucracy, adding to the cost. They know that if the government does not pay it, the cost will be dramatically reduced because if no one can afford you, and you do not lower your prices, you do less business, and your income is dramatically reduced.
More focus needs to be placed on supply-side measures--all the things health care professionals and entrepreneurs do not want to talk about or dismiss as either unprofessional or detrimental to quality, like market forces--a competitive multiplicity in the marketplace. The arguments against market forces here are the same used during the robber-barron era of economic trusts: market competition is wasteful, crude, unsophisticated and diminishes quality and innovation--all of which is just a lot of self-interested nonsense being sold as the general welfare.
Economic pluralism is what the health care industry does not want and has the money (the value added) to prevent. The focus is on demand, and if your lifestyle does not meet the prescribed measure of health, you are not being sufficiently taxed to cover the cost. This could not be more tyrannical!
The jig is up!
If you want to control health care costs, here is how you do it.
The first step is to tax the value-added for reinvestment in growth (supply) rather than consolidation. The value added (the profit margin) is a market solution that a consolidation of capital tends to not allow. Investment in the added value as a measure of what we want and need, like healthcare and energy, is what gives free markets the force of cost-effectivness, efficiency, and legitimacy. It is the role of government to be sure it is fully operational.
The Treasury has a leading role for strategic, supply-side reinvestments. The legislature identifies the value-added markets and enables it through the Treasury. The Federal Reserve, our nation's prime lender, reacts to the disinflationary effects of added supply, rather than the deflationary effects of consolidating the added value. The result is a pro-growth, downward pressure on rates. Instead of encouraging inflation, like we have now, the Fed is encouraging growth, adding to the supply side.
Government is just as easily opeationalized to ensure affordable market solutions as it is to limit it.
The general-case solution statement of maximizing market mechanics will result in higher incomes and lower costs. This is the formula for making health care more affordable. It has nothing to do with diminished professional standards, quality, or any particular lifestyle. If that bag of potato chips does not kill you, something else will.
It is not because you are too fat, or because you smoke too much, or you drive an air polluting car.... Health care costs are so high because the market is rigged to maximize demand and the taxes to support it, and minimize supply so that costs are projected to be a $5 trillion expense by 2011.
Controlling the costs of health care is entirely possible, and instead of being an economic detriment, it is the demand for growth that drives a healthy economy.
Copyright 2008 by Griffith Lighton
Tuesday, February 26, 2008
Monday, February 25, 2008
Independents Called to Action
Restructuring the Elements of Power
Big business, bypassing the element of bureacratic power, has stagflated the economy in spite of the Federal Reserve. Prices and profits are supported while labor costs and competitive market forces get resistance. It is a needless restructuring of power that is not even in the best interest of a power elite.
Correcting for this consolidation of power will at first protect a power elite from itself, as a bureaucratized pluralism of power tends to do, and will at least help avoid a prolonged deflationary period.
Whatever independent bureaucratic diffusion of power the Federal Reserve had is now secondary to the Exxon-Mobils of the world. It has been co-opted. The price of oil has been used to consolidate the wealth of our nation and leads the direction of our economy. The Federal Reserve is a reactive, rather than a proactive, element of the power structure.
Independent voters can provide a needed check by demanding government operate to primarily ensure a more free and unconsolidated marketplace, a progressive individual and corporate income tax, and strategic reinvestment of revenue into consolidated markets like energy and healthcare.
Market forces--a competitive multiplicity in the marketplace--is the solution to much of what government agency labors to prevent or eliminate. Reinvestment of value-added revenues that comes from a progressive tax structure would operationalize the efficiency of markets to control costs, and externalities, both public and private in a way that a regulatory bureaucracy can only approximate.
For private capital, value-added reinvestment, the reinvestment of profits, is a function of consolidation: buying the competition. This is referred to as growth. However, the effect is to limit supply and discourage economic growth, supporting prices, profits, and the ability to engage in abusive practices without fear of losing market share and being forced out of business. The result is a proliferated demand for government and all the costs associated with it. Profits, the value added, is continuously reinvested in consolidating markets, and while economic growth will occur by creating an incentive for new markets, growth will not occur in strategic markets, like energy and healthcare, to control costs, quality and abusive practices.
The argument that consolidation promotes the proliferation of new markets is false. Investment in new markets is just as likely to occur without a consolidated marketplace.
Value-added reinvestment through means of progressive taxation is a function of optimizing investment in strategic markets and economic growth, controlling costs and abusive practices with less need for government.
Private capital discourages progressive taxation because it can be used to finance the competition (the value-added market solution), which is economic growth and optimally full employment which, again, reduces the need for government, producing growth with low inflation without the need for reactive bureaucratic interventions.
Private capital much prefers to have a proliferation of bureaucratic power than progressive taxation. It creates a revolving door, barriers to market entry, and can be co-opted, all with the force and legitimacy of public authority while, at the same time, consolidation of the marketplace can be blamed on government interventions.
While proliferation of the bureaucracy is a pluralistic diffusion of power, and can be added to the analytical models of power, it operates at first, as it did for 18th Century despots, to protect a power elite from itself. The EPA operates as much to keep the self-interest of a power elte from polluting itself to death as it does to protect and serve in the public interest. The same is true economically. The Federal Reserve operates more to protect private capital from itself, which in turn is called the general welfare.
The bureaucracy is just as easily operationalized for the general welfare as it is for the administration of a power elite.
Independents will function to ensure freedom.
The two parties are but a playground for its wealthiest contributors. The results tend to verify. The stakes are not very high with a binary system and provides the perfect playground for cultivating party loyalty and the utility of organized hierarchy and membership, win or lose. The result is a party system that functions to reward party satraps of the status-quo and a nepotism of power both public and private.
The party system is not operationalized for any kind of improvement. It is operationalized to give the false potential for change. That is why democratic party rhetoric tends to be full of "hope."
The time is right to act. Independents are called to action!
Copyright 2008 by Griffith Lighton.
Big business, bypassing the element of bureacratic power, has stagflated the economy in spite of the Federal Reserve. Prices and profits are supported while labor costs and competitive market forces get resistance. It is a needless restructuring of power that is not even in the best interest of a power elite.
Correcting for this consolidation of power will at first protect a power elite from itself, as a bureaucratized pluralism of power tends to do, and will at least help avoid a prolonged deflationary period.
Whatever independent bureaucratic diffusion of power the Federal Reserve had is now secondary to the Exxon-Mobils of the world. It has been co-opted. The price of oil has been used to consolidate the wealth of our nation and leads the direction of our economy. The Federal Reserve is a reactive, rather than a proactive, element of the power structure.
Independent voters can provide a needed check by demanding government operate to primarily ensure a more free and unconsolidated marketplace, a progressive individual and corporate income tax, and strategic reinvestment of revenue into consolidated markets like energy and healthcare.
Market forces--a competitive multiplicity in the marketplace--is the solution to much of what government agency labors to prevent or eliminate. Reinvestment of value-added revenues that comes from a progressive tax structure would operationalize the efficiency of markets to control costs, and externalities, both public and private in a way that a regulatory bureaucracy can only approximate.
For private capital, value-added reinvestment, the reinvestment of profits, is a function of consolidation: buying the competition. This is referred to as growth. However, the effect is to limit supply and discourage economic growth, supporting prices, profits, and the ability to engage in abusive practices without fear of losing market share and being forced out of business. The result is a proliferated demand for government and all the costs associated with it. Profits, the value added, is continuously reinvested in consolidating markets, and while economic growth will occur by creating an incentive for new markets, growth will not occur in strategic markets, like energy and healthcare, to control costs, quality and abusive practices.
The argument that consolidation promotes the proliferation of new markets is false. Investment in new markets is just as likely to occur without a consolidated marketplace.
Value-added reinvestment through means of progressive taxation is a function of optimizing investment in strategic markets and economic growth, controlling costs and abusive practices with less need for government.
Private capital discourages progressive taxation because it can be used to finance the competition (the value-added market solution), which is economic growth and optimally full employment which, again, reduces the need for government, producing growth with low inflation without the need for reactive bureaucratic interventions.
Private capital much prefers to have a proliferation of bureaucratic power than progressive taxation. It creates a revolving door, barriers to market entry, and can be co-opted, all with the force and legitimacy of public authority while, at the same time, consolidation of the marketplace can be blamed on government interventions.
While proliferation of the bureaucracy is a pluralistic diffusion of power, and can be added to the analytical models of power, it operates at first, as it did for 18th Century despots, to protect a power elite from itself. The EPA operates as much to keep the self-interest of a power elte from polluting itself to death as it does to protect and serve in the public interest. The same is true economically. The Federal Reserve operates more to protect private capital from itself, which in turn is called the general welfare.
The bureaucracy is just as easily operationalized for the general welfare as it is for the administration of a power elite.
Independents will function to ensure freedom.
The two parties are but a playground for its wealthiest contributors. The results tend to verify. The stakes are not very high with a binary system and provides the perfect playground for cultivating party loyalty and the utility of organized hierarchy and membership, win or lose. The result is a party system that functions to reward party satraps of the status-quo and a nepotism of power both public and private.
The party system is not operationalized for any kind of improvement. It is operationalized to give the false potential for change. That is why democratic party rhetoric tends to be full of "hope."
The time is right to act. Independents are called to action!
Copyright 2008 by Griffith Lighton.
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