Thursday, October 28, 2004

Reader Comment

We at the LTS love to hear from readers. An anonymous reader commented recently about our recent post (below) regarding a report from Fox News discussing how the media portrayed the economy in 1994 versus 2004. Here are his comments:

[T]his first problem with such ridiculous analysis is that '96 and '04 are not even close economically. The second is that republicans need to get over Clinton.

Apparently, our reader misunderstood the article's objective, which was to show how differently the "mainstream media" has portrayed economic conditions in this economy today versus those in the fall of 1996. No doubt there are differences between the underlying economic forces at work on the economy today compared to 1996, but the resulting key indicators are virtually the same, yet these nearly identical numbers were reported in a positive light in 1996 when Bill Clinton was running for re-election, and negatively today. The authors of the Fox article cite Business Week's chief economist Michael J. Mandel's article in the September 6th issue about how strikingly similar the economic situations are today and in 1996. We don't know the credentials of our anonymous commenter, and since no supporting data or references were cited in his comments, we have no facts on which to place value on the commenter's point of view.

We thought it also worth noting that the unemployment rate in 1996 was 5.6%, but is only 5.4% today.

As far as our commenter's point about Clinton, we believe that almost all Republicans are "over" Clinton. The economy, thanks in part to Clinton, was good in the 1990's. In fact, we believe that presidents get too much blame and too much credit for good or bad economies. We believe that government has very little effect on the economy, except when it is an excessive burden by way of high taxes and excessive regulation. The only role we would like to see government take in the economy is one to help foster a positive, commerce-friendly environment where individuals by themselves or collectively in businesses and corporations are free to create jobs, wealth, and prosperity for all Americans. Regulation should be used to protect the health and safety of all Americans, but not as a tool for social engineering. The government should get out of the way of the Free Market and let market forces come to bear on the problems of our society.

Healthcare is an area where much more market forces can and should be brought to bear. For most people with health insurance, and that is by far the large majority of Americans, going to the doctor costs $10. Yup, a $10 or $20 copay is all most Americans pay, and as a result, we have no idea how much these things actually cost, and have no incentive to shop around or to let the market determine what these costs should be. We haven't yet done the research, but we suspect that if a graph was drawn showing the average annual cost per person for healthcare, that that line would spike up and remain on a high trend line immediately after the start of Medicare and Medicaid. These programs, while well intentioned, quickly removed any market forces from the costs associated with healthcare. No one actually had to pay for things from their own pocket, so they didn't care how much it cost. The only cost containment structure in place are bureaucrats in Washington.

For those of us not yet on Medicare, most of us have a similar health insurance plan, which still has no real ability to apply market forces on the cost of healthcare, not with the behemoth of Medicare/Medicaid sucking up the lion's share of our national healthcare dollars.

We agree that healthcare is broken in this country. We strongly DISAGREE that more government intervention is the answer. On the contrary, more government intervention, as espoused by the Democrats, would only bring rationing and even poorer healthcare for all but the most privileged.

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