Thursday, December 26

"Laws of supply and demand? Sorry, they don't apply to *real* government laws."

I would love to have two hours to ask a community organizer, professional politician, bureaucrat or most life-long academics to tell me everything they know about the *basic* laws of economics.  Not the esoterica but the really basic stuff, like explaining how a supply-demand curve works.

My bet is almost none of 'em knows jack about it.

I say this because virtually all demands or programs or laws or decrees from any of the above seem to be utterly devoid of any such understanding.

Case in point:  Regardless of what one thinks was the real goal of Obamacare, we can agree that a big *stated* goal was to give more people more health care.  In economic parlance this is "shifting the demand curve."  If you know which direction this would shift it, and what effect classical economics says that would have on the equilibrium price for any given procedure, you're far better educated than most.

Short answer:  If demand increases without an offsetting expansion of supply, either prices will rise or you end up with a shortage, as people want more of the good or service than is available at the current price.

Of course there are several well-known, clever ways to reduce prices.  One of these is to reduce the cost of providing a good or service--one component of which is the cost of complying with government regulations.  Another is to increase supply, by making useful medical devices less costly. 

You don't do that by putting a new tax on medical devices.

In any case, it's been pretty well determined--for over a century, with no countervailing evidence--that if the demand for a good or service increases, without increasing supply, either the price will increase or you'll get a shortage.

I'm curious as to what prompted all these oh-so-brilliant experts to think that Obamacare would somehow be able to ignore the laws of supply and demand.

Oh, that's right:  Our "elites" believe that by sheer brilliance of their rhetoric, or by the fact that they have degrees from top Ivy-league universities, that they therefore know what is best for us and don't have to bother with the laws of economics.  Besides, they'll claim that the laws of supply and demand don't apply to...whatever it is they want to do at that moment.

If you could ever insist that they explain this...interesting...assertion, this special exemption--they'd likely claim that the laws of S&D don't apply to government programs, or similar breezy bullshit.  But the folks who actually study economics say they do.

And of course you couldn't ever get them to answer actual critical questions about their claim of a 'special exemption,' because they never expose themselves to a forum in which they can't control the dialog. 

And I suspect that on some level they have to know they're making a false claim.  But hey, it's for a good cause.  And what difference does it really make if the cost of medical care goes up, down or sideways?  Cuz the government will pay the cost of their health insurance, and for the people who literally can't afford it.

You middle-class worker bees?  Why should the elites care if you now have to cut out little Sally's piano lessons to pay for your health insurance?  Geez, ya bitter clingers, get back to work!  We gotta get those tax payments rolling in so we can pay for all that "free" medical care!

No, sorry, I don't have time to answer any more questions.  There's a meeting of the president's advisory commission on income redistribution.


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