Are workers falling behind because of rising health care costs?

by Russ Roberts on March 24, 2008

in Data, Standard of Living

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:

Risinghealthcare
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.

 

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{ 48 comments }

muirgeo March 25, 2008 at 1:24 am

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

Sam Grove March 25, 2008 at 1:39 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?

Justin Ross March 25, 2008 at 1:54 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.

Sam Grove March 25, 2008 at 2:02 am

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

Russ Nelson March 25, 2008 at 2:23 am

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

Colin Keesee March 25, 2008 at 3:42 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.

vidyohs March 25, 2008 at 7:16 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.

vidyohs March 25, 2008 at 7:20 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.

cpurick March 25, 2008 at 7:23 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.

Jack Lohman March 25, 2008 at 8:43 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

Gil March 25, 2008 at 8:58 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

Keith March 25, 2008 at 9:24 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?

save_the_rustbelt March 25, 2008 at 9:37 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.

Saul Black March 25, 2008 at 10:08 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.

John Dewey March 25, 2008 at 10:31 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.

Gil March 25, 2008 at 10:36 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.

John Dewey March 25, 2008 at 10:53 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

Organic George March 25, 2008 at 11:14 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

Methinks March 25, 2008 at 11:19 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.

econmedic March 25, 2008 at 11:21 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.

muirgeo March 25, 2008 at 11:27 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!

John Dewey March 25, 2008 at 11:33 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.

Methinks March 25, 2008 at 11:34 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.

Methinks March 25, 2008 at 11:48 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"

Sweetie March 25, 2008 at 12:13 pm

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?

Blutskralle March 25, 2008 at 12:16 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.

cpurick March 25, 2008 at 12:46 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?

Deryl G March 25, 2008 at 1:03 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.

Sam Grove March 25, 2008 at 1:06 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.

FreedomLover March 25, 2008 at 1:13 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.

Randy March 25, 2008 at 1:34 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.

Methinks March 25, 2008 at 1:35 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.

muirgeo March 25, 2008 at 1:36 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.

muirgeo March 25, 2008 at 1:39 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…

muirgeo March 25, 2008 at 1:43 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.

Randy March 25, 2008 at 1:51 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.

muirgeo March 25, 2008 at 1:53 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.

Randy March 25, 2008 at 2:09 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?

Randy March 25, 2008 at 2:17 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.

muirgeo March 25, 2008 at 2:29 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.

FreedomLover March 25, 2008 at 2:39 pm

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

Randy March 25, 2008 at 2:43 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.

Randy March 25, 2008 at 2:45 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 :)

Methinks March 25, 2008 at 2:45 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

Methinks March 25, 2008 at 2:51 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.

Deryl G March 25, 2008 at 3:17 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.

muirgeo March 25, 2008 at 3:27 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.

muirgeo March 25, 2008 at 3:36 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.

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