A dynamic logic occurs when market participants seek to control costs.
Mancur Olson describes "The Logic of Collective Action." When, for example, the cost of health care becomes unaffordable, due to inelasticity, and incomes are accumulated into the hands of the providers, the reduction of demand (the ability to pay) logically prompts providers to seek another source of income to achieve the moral imperative of providing health care for everyone. The imperative is categorical (universal) because the demand (the need) is relatively inelastic.
President Obama, acting on that categorical, moral imperative is set to provide universal insurance coverage (thus demonizing insurers) while providers of care are seeking to source the funds that increase the ability to pay without redistributing the accumulated income (the retributive value). That source is government, providing in the name of the moral imperative.
Objecting to this system of finance is characterized as being anti-imperative (illogical), despite that it perpetuates what is wrong with it--burgeoning costs--which is the call for the reform. The public very clearly detects the "illogic" of this action being made in the spirit of collective action toward the public good.
Offering the problem as the solution is illogical in spite of the logical imperative of providing liquidity (the ability to pay in the form of government mandate and public finance) as soon as possible.
While the "public option" may be a point of departure for actually achieving the distribution of income necessary for health care to be universally affordable, the very striking lack of measure to control the cost suggests a willingness to design policy that keeps the income in a mode of continued consolidation that does not fit the imperative.
The consumer's imperative is to control the cost; $900 billion to start does not exactly fit the imperative.
The consumer's logic is to co-op, or organize, to collectively bargain to trust bust the power of the AMA. A doctor or hospital will have to disclose prices and be subjected to a free-market legitimacy to be economically successful, as opposed to the government being co-opted to pay undisclosed prices on command, if not now, sometime in the future (perhaps after everyone goes to the public option--the Wal Mart model of doing business).
The logic of collective action to counter organized monopolistic entities, like the AMA, for a fair and equitable price is a market mechanism concommittant with the "freedom" to act. The public option defies this logic. Once the option makes collective economic sense, the incentive to merge it with the provider to command, and collect, the price that caused the option will be overwhelming.
The probability the public option will not be corrupted is very low. The logic will then be to pluralize the system for a more direct and easily verifiable democracy to control the cost. The demand, without any encumberances to the logic of this action, will then be for a free-market system.
Showing posts with label healthcare and public policy. Show all posts
Showing posts with label healthcare and public policy. Show all posts
Thursday, September 10, 2009
Saturday, April 4, 2009
Case Study in the Efficiency of Not Being Too Big to Fail
Ford Motor Corporation, having divested itself of acquisitions has had the cash to avoid needing a government bail out.
The success is dubious considering that GMC, a company that was designed to be an automobile trust (the business model of "too big to fail"), will benefit from both the government funds (a huge line of credit no one else is likely to get) and the prospect of a structured bankruptcy settlement.
Nevertheless, becoming smaller has prevented Ford from needing government assistance, and as a general statement, a government that ensures firms do not become too big to fail first and foremost, rather than bailing them out with what the macro business model "too big to fail" refers to as the "infusion phase," is a partnership of efficiency that accrues both public and private.
Automobile manufacturers are victim of the financial sector. The leveraging that went on instead of investment in economic growth deflated our economy. Combine that with an outrageous inflation of the healthcare sector driven by gigantic pools of cash generated by a tobacco tax scheme, and we have one colossal recession with a strong deflationary trend.
Do not discount the deflationary value of rising healthcare costs by means of public finance for the economy generally, and the automobile sector in particular.
Despite the reduced number of smokers over many years, the cost of healthcare did not go down, but up. Way up! It was not the smokers that caused the high inflation, it was the tax. All the tax means to the healthcare sector is more money available for price increases (derived from a cohort that are addicted to a product with a tax hypocritically argued to be by volition on the one hand, and to be controlled as a highly addictive substance on the other). The result is an extreme accumulation of wealth that is a major cause of the depth and breadth of the current deflationary trend (and the highest level of cynicism that only the most self-satisfied and illiberal deserve).
It needs to be made perfectly clear that much of what ails us is the economics built into the healthcare sector operating with an inelastic demand curve and a huge pool of tax money to drive (push) the cost up.
The inelastic demand curve gives healthcare that too-big-to-fail quality of being indispensable, and the public financing will always push the cost up as long as it is made available without limitation. Again, that limitation should be by ensuring it is a free and unconsolidated marketplace first, then adjust for the externalities. Adjusting for the externality of having no income as the result of deflationary pressure (because of its accumulation into the hands of a few people) just increases the cost (an accumulation of income) and the deflationary pressure, like we are doing now despite controlling healthcare costs being a pillar of our plan for economic recovery and reinvestment.
With the accumulation of wealth, verifiably, comes the accumulation of power and the need, therefore, to deconsolidate it.
The divestiture that needs to occur with the healthcare sector is the tax subsidy.
The success is dubious considering that GMC, a company that was designed to be an automobile trust (the business model of "too big to fail"), will benefit from both the government funds (a huge line of credit no one else is likely to get) and the prospect of a structured bankruptcy settlement.
Nevertheless, becoming smaller has prevented Ford from needing government assistance, and as a general statement, a government that ensures firms do not become too big to fail first and foremost, rather than bailing them out with what the macro business model "too big to fail" refers to as the "infusion phase," is a partnership of efficiency that accrues both public and private.
Automobile manufacturers are victim of the financial sector. The leveraging that went on instead of investment in economic growth deflated our economy. Combine that with an outrageous inflation of the healthcare sector driven by gigantic pools of cash generated by a tobacco tax scheme, and we have one colossal recession with a strong deflationary trend.
Do not discount the deflationary value of rising healthcare costs by means of public finance for the economy generally, and the automobile sector in particular.
Despite the reduced number of smokers over many years, the cost of healthcare did not go down, but up. Way up! It was not the smokers that caused the high inflation, it was the tax. All the tax means to the healthcare sector is more money available for price increases (derived from a cohort that are addicted to a product with a tax hypocritically argued to be by volition on the one hand, and to be controlled as a highly addictive substance on the other). The result is an extreme accumulation of wealth that is a major cause of the depth and breadth of the current deflationary trend (and the highest level of cynicism that only the most self-satisfied and illiberal deserve).
It needs to be made perfectly clear that much of what ails us is the economics built into the healthcare sector operating with an inelastic demand curve and a huge pool of tax money to drive (push) the cost up.
The inelastic demand curve gives healthcare that too-big-to-fail quality of being indispensable, and the public financing will always push the cost up as long as it is made available without limitation. Again, that limitation should be by ensuring it is a free and unconsolidated marketplace first, then adjust for the externalities. Adjusting for the externality of having no income as the result of deflationary pressure (because of its accumulation into the hands of a few people) just increases the cost (an accumulation of income) and the deflationary pressure, like we are doing now despite controlling healthcare costs being a pillar of our plan for economic recovery and reinvestment.
With the accumulation of wealth, verifiably, comes the accumulation of power and the need, therefore, to deconsolidate it.
The divestiture that needs to occur with the healthcare sector is the tax subsidy.
April Fools
The huge federal tax increase on tobacco that takes effect April 1st is our first indication that toggling between Democrats and Republicans is a false pluralism. The first act of a so-called "new" congress and administration--a huge regressive tax increase triumphantly passing congress and signed by the president--appropriately takes effect on April Fool's Day.
The best way to ensure children get the healthcare they need is to control the cost and increase the income to pay for it. SCHIP does neither!
When the government tries to control rising prices the new pool of money the new tax provides, the medical profession will simply reluct the service to be rendered in a free market fashion. Without meeting the price, and increasing the need to tax, the newly insured will be faced with a shortage. Everybody loses to the non-market, cost-push distortion of the regressive, tax-funded insurance program. The free market mechanism, instead of an equitable efficiency, is then rendered to increase the income of the healthcare sector and reduce the income of the consumer--a deflationary whipsaw effect (a continued consolidation of wealth), just exactly what we do not need!
A progressive tax will be required to correct for the distorted distribution of income, rendering the distribution more equitable so that the free market mechanism will work to everyone's benefit and not just a few market tyrants armed with an elitist, self-satisfied sense of superiority, the will to power, and a tax authority.
Instead of controlling the cost and increasing the ability to pay for it, all healthcare consumers will be whipsawed; and the race is on to see how quick an economic sector can get rich at the public trough...not exactly the legitimate model of a free-market mechanics.
Rather than freedom, the entire scheme, from the regressive, inferior-lifestyle-targeted tax burden to the distribution of the economic benefit, induces the model of tyranny being the preferred model of a two-party, duopolistic system, and a false pluralism. It is a tyranny of false choices that raises its ugly head to gain a legitimacy of power characterized by a superiority of lifestyle that especially opportunes in a time of crisis, like The Great Depression. It is a tyranny that we have learned at great cost burgeons a philosophy of intolerance that will destroy freedom in order to save it only for a few that have the will to claim righteousness and the virtue of choice for themselves.
State capitalism is not socialism. Nor is it a free-market economy.
The hope of ensuring a more free-market mechanism to control costs and increase incomes--the sure cure for deflation--by toggle-switching to the Democratic Party...April Fool!
The best way to ensure children get the healthcare they need is to control the cost and increase the income to pay for it. SCHIP does neither!
When the government tries to control rising prices the new pool of money the new tax provides, the medical profession will simply reluct the service to be rendered in a free market fashion. Without meeting the price, and increasing the need to tax, the newly insured will be faced with a shortage. Everybody loses to the non-market, cost-push distortion of the regressive, tax-funded insurance program. The free market mechanism, instead of an equitable efficiency, is then rendered to increase the income of the healthcare sector and reduce the income of the consumer--a deflationary whipsaw effect (a continued consolidation of wealth), just exactly what we do not need!
A progressive tax will be required to correct for the distorted distribution of income, rendering the distribution more equitable so that the free market mechanism will work to everyone's benefit and not just a few market tyrants armed with an elitist, self-satisfied sense of superiority, the will to power, and a tax authority.
Instead of controlling the cost and increasing the ability to pay for it, all healthcare consumers will be whipsawed; and the race is on to see how quick an economic sector can get rich at the public trough...not exactly the legitimate model of a free-market mechanics.
Rather than freedom, the entire scheme, from the regressive, inferior-lifestyle-targeted tax burden to the distribution of the economic benefit, induces the model of tyranny being the preferred model of a two-party, duopolistic system, and a false pluralism. It is a tyranny of false choices that raises its ugly head to gain a legitimacy of power characterized by a superiority of lifestyle that especially opportunes in a time of crisis, like The Great Depression. It is a tyranny that we have learned at great cost burgeons a philosophy of intolerance that will destroy freedom in order to save it only for a few that have the will to claim righteousness and the virtue of choice for themselves.
State capitalism is not socialism. Nor is it a free-market economy.
The hope of ensuring a more free-market mechanism to control costs and increase incomes--the sure cure for deflation--by toggle-switching to the Democratic Party...April Fool!
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