Monday, December 17, 2007

Paul Krugman: Socialism Tastes Good - ala Mode

I usually will skip over the New York Times editorials but this one caught my eye. I wanted to read about why Paul Marx Krugman thinks Obama is the "anti-change candidate" but instead was treated to a warm piece of socialism ala mode.

"Mr. Obama who’s being unrealistic here, believing that the insurance and drug industries — which are, in large part, the cause of our health care problems — will be willing to play a constructive role in health reform. The fact is that there’s no way to reduce the gross wastefulness of our health system without also reducing the profits of the industries that generate the waste."

This is so crazy coming from an "economist". Profits are the problem? Profits cause waste? What economics theory produced such nonsense.

Reduced profits = less research and development

If a reduction in research is what the desired outcome is then using government to take away profits is probably a good idea. I'm going to assume that Krugman doesn't want that to happen. Using that assumption im not sure what he thinks is going to happen. Does he think that companies are going to make large quantities of high quality pills if there is no profit incentive? Interesting. Maybe he knows something that the economics field does not already know.

The real problem is collectivist health care systems around the world. Essentially, American health care consumers subsidize health care costs for the advanced nations. How? Because they cap prices and have collective bargaining schemes to drive down prices. Where do pharmaceutical companies make up the lost revenue? From us. That is one of the fundamental problems and it has no logical solution.

Taking away profits away from pharmaceutical companies will not improve health care quality any more than taking profits away from Intel will improve processor speed.

4 comments:

BillT said...

I had something of a revelation and have returned to my libertarian roots. I haven't figured out how to write it yet, so I'm taking a long hiatus and figuring out what to say. Thanks for checking in, though.

mr. lukoff said...

I disagree with your point that we need to take away profits from the big pharmaceutical companies. Its funny that most of there profits i'm sure for many of these companies come from big subsidies like the Medicare Prescription D program. If the congress stopped sending them corporate welfare checks, they'd be forced to compete with other companies for the market of drug users. This would then drive down the price of healthcare. Until we have a free market system where we can import our medicines from canada we won't have better health care in America. Also currently the drug companies and hmos have used gov't to force us to use there services (mitt care) , instead of having the private doctor/patient relationship that existed for most of our countries history. Instead now the HMOS coupled with there friends in the bureaucracy have created a monopoly on how we get our health care.Until that relationship can be broken we cant start to talk about having real health care reform.

vet44nb said...

keep up the good work

Anonymous said...

Took me time to read the whole article, the article is great but the comments bring more brainstorm ideas, thanks.

- Johnson