I am officially distubed by the truth of U.S healthcare.

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The "invisible hand" as at best a half truth. It obviously doesn't apply in the majority of real world cases where markets are imperfect because seller and buyer do not have equal bargaining ability. Of course I have never seen a Randroid actually address this problem instead of pretending it doesn't exist. In comparison to real economic theory, Randroid market fundamentalism is akin to pseudoscience. It's a gimmick thrown at the masses so they will blindly let the plutocracy screw them up the ass.

Perhaps, perhaps not.

The issue is that there is a need for COMPETITION. If someone can offer a better service for the same or less cost, then you are forced to innovate. If government is going to foot the bill (Medicare and Medicaid), providers can charge as much as the government will pay (which is passed to the taxpayers). It's only recently that some squabble was made and enough of the fraud going on was exposed that now Medicare/Medicaid invoices are being audited to see if they were really needed.

You are correct on insurance companies. They came about as a means to protect the INDIVIDUAL from the FINANCIAL HARDSHIP of huge medical bills. It was never designed (nor is it currently designed) to provide health care services. They came about in a time when everyone could bear some measure of health care out of pocket and the insurance was for the excess they were not prepared for. Several things went wrong that led to where we are now. People being able to sue health insurance companies (cost passed on to customers), a flood of medical malpractice claims (many of which really are not justified...cost passed on to consumers), the mandate to provide care to those who can not pay (which just gets passed on to those who can pay), etc.

Reforming health care in America is a very complex problem with many issues that must be addressed so that the doctor/hospital can be "profitable" without denying anyone needed health care. Just letting government take it over is not an answer because where there is not competition, there is no innovation.

And IMO, that's the real invisible hand.

I just can't understand how so many people are so irrational as to actually believe against evidence that free-markets always tend towards an optimal benefit to cost ratio for the consumer.

Well I do not think Universal Healthcare nessisarly=no competition or innovation. Maybe I am too optimistic but I cannot honestly believe the only driving force behind innovation for instance is selfish financial gain...I guess I like to think I am not the only one who would do something because it is the right thing to do rather than because I might get something out of it.

The profit incentive is pure right-wing BS. As the most recent banking collapse illustrated, the only thing greedy people are interested in innovating are insane financial shenanigans and ponzi schemes. Most do nothing but push paper around. Scientists and engineers who actually participate in research and development are paid far less than their paper pushing overlords what take all the credit and profit. The private sector also routinely steals and profits off of government funded innovation. Most people don't even realize that government was involved in getting the internet off and running. Then look at how the private sector benefited from research and development during the space race.

As I've repeatedly pointed out, and you and others on the left can't seem to comprehend the fact that GOVERNMENT FORCED THE BANKS TO MAKE THOSE LOANS THROUGH THE COMMUNITY REINVESTMENT ACT.

Oh and before people start commenting about the fact I used all caps, bold, and underline; it's cause I've pointed this fact out so many times I'm hoping that this time they will get it through their heads that Government Regulations caused banks to make the loans in the first place.

Well I do not think Universal Healthcare nessisarly=no competition or innovation. Maybe I am too optimistic but I cannot honestly believe the only driving force behind innovation for instance is selfish financial gain...I guess I like to think I am not the only one who would do something because it is the right thing to do rather than because I might get something out of it.

As I've repeatedly pointed out, and you and others on the left can't seem to comprehend the fact that GOVERNMENT FORCED THE BANKS TO MAKE THOSE LOANS THROUGH THE COMMUNITY REINVESTMENT ACT.

Oh and before people start commenting about the fact I used all caps, bold, and underline; it's cause I've pointed this fact out so many times I'm hoping that this time they will get it through their heads that Government Regulations caused banks to make the loans in the first place.

Fellas please dont quote a massive wall of text.. cut everything out except the quote from the person you're replying to.



No, the gov. did not force the banks to make those loans. The banks were encouraged to provide the loans by means of credit given to the banks for lending money to low income demographics for housing purposes. This is what caused the explosion of predatory lending practices which is a big part of the current housing market issue: banks got money from gov. to make those loans, banks were paid interest by the lenders when time was good..and banks got the properties back when all those loans went toxic...and as we know, the big lenders got gov. bailouts so all is good and peachy for them.

The banks were at fault for abusing a gov. subsidy through underhanded means.. and in a minor part the consumers were also at fault for taking loans they should've known better than to take (but then again, its an issue of big money, highly educated economists and lawyers on one side and the low income consumers who probably dont have much education and understanding of economics on the other side).

When I see someone that actually knows what they are talking about on this subject in this thread, I'll be sure to listen to them. You may think you are more informed, but in reality you aren't.

Next time you may want to avoid jumping the gun, so you don't end up looking like a complete idiot.

Anyways:

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.

The CRA's premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite, threatening to undermine the efforts of the upwardly mobile poor by saddling them with neighbors more than usually likely to depress property values by not maintaining their homes adequately or by losing them to foreclosure. The CRA's logic also helps to ensure that inner-city neighborhoods stay poor by discouraging the kinds of investment that might make them better off.

http://www.city-journal.org/html/10_1_t ... ollar.html

Shortly thereafter, Fannie Mae, under Chairman Jim Johnson, made its first "trillion-dollar commitment" to increase financing for affordable housing. What this meant for the quality of the mortgages that Fannie--and later Freddie--would buy has not become clear until now.

On a parallel track was the Community Reinvestment Act. New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to underserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan.


http://www.forbes.com/2009/02/13/housin ... pinto.html

I hope you know what "required" means.

You'll want to read the next article, I just quoted the first part of it.

Earlier this week I noted that I had changed my mind on the Community Reinvestment Act.

Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own role in the mortgage mess.

So I laid out the facts and arguments that had convinced me to switch sides in the CRA debate. It was a long series of posts that generated hundreds of responses and counter-arguments. Felix Salmon’s response is here, Barry Ritholtz’s here, Mike Rorty's here, Ryan Chitum’s here, and Matthew Wurtzel’s here. All of my posts are here. Henry Blodget's earlier post on the CRA, with which I largely agreed until recently, is here. If you carefully run through these posts and the accompanying comments, I think you'll see that every argument raised by the "Defend CRA at all costs" crowd has been refuted.

Read more: http://www.businessinsider.com/the-cra- ... z1UTPJAQVB

But the path from new idea/product to use on people is expensive. Even if everybody involved decided they would work for minimum wage (aomething that will never, ever happen), there are thousands upon thousands of dollars of materials that need to be purchased and lengthy and inexpensive testing trials. This is why companies tend to focus their innovativeness on things with a huge market such as cholesterol drugs or cancer treatments.

I just can't understand how so many people are so irrational as to actually believe against evidence that free-markets always tend towards an optimal benefit to cost ratio for the consumer. So many factors that are easily observable from direct experience get completely ignored. Health insurance companies employ thousands of people full time to develop and apply the most complicated set of policies such that the consumer has no chance of wading through it all and comprehending every possible scenario in which they could possibly be denied coverage. Therefore, even when individuals do get to choose their coverage (i.e. their employer actually gives them a choice), it is still nearly impossible to compare plans and objectively make a choice in one's own best interest. Also, it's not like the insurance company employees are going to willingly inform the consumer. It is in their benefit for the consumer to be uninformed and thus at a disadvantage in the bargain. Thus the free market fails to provide the optimum service.