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Sunday, December 29, 2013

The Rise In Health Care Costs

Adam Smith   by Michael Hogue

Some people - myself being one - tend to view the rapid increase in health care costs to be very much akin to a financial bubble.

The problem with that is that it implies that nothing can effectively be done to avert the bursting of the bubble. Since the very fast rise in price is driven by irrational expectations of those in the market, we know that the bubble will grow, all cautions will be thrown to the wind, and when there is trouble, panic may ensue, causing the bursting of the bubble.

There really is no way to stop the crowd of financial lemmings headed for their cliff of choice. Sermons, cautions, tales of wise old men, none of these can hold a candle next to the brilliance of the false promises of Ponzi rewards for every investor.

The only way to control such things are the institution of Regulators, who perform the function of Governors on steam engines, allowing steam pressure to be controlled and preventing the catastrophe of a run-away increase of steam pressure. Or, more to our time, they act as the graphite rods inserted into a nuclear reactor to control the chain reaction.

This day and age does not like Regulators. Our faith is on Free Markets and Invisible Hands.

However, even Adam Smith did not believe in free markets like we do. Read a review of his Theory Of Moral Sentiments at The American Conservative,


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