Sunday, September 20, 2009

Giving Economists a Bad Name

Greg Mankiw is a famous professor of economics at Harvard. He writes one of the most popular blogs in cyberspace. He worked for George W Bush, not a crime for sure, and is against much of Obama's economic policy based on what he has been writing. For the record, so am I.

He is not in favor of the Obama's medical plan. I am neutral on this issue. However, I do find his latest thought on medical cost disappointing because it is disingenuous. Here is an except....

"...Imagine that someone invented a pill even better than the one I take. Let’s call it the Dorian Gray pill, after the Oscar Wilde character. Every day that you take the Dorian Gray, you will not die, get sick, or even age. Absolutely guaranteed. The catch? A year’s supply costs $150,000.

Anyone who is able to afford this new treatment can live forever. Certainly, Bill Gates can afford it. Most likely, thousands of upper-income Americans would gladly shell out $150,000 a year for immortality..."

His full article is here.

He is defending the high cost of medical care in the US implicitly because it takes money to invent a pill and by inference the high cost of such care in the US is justifiable. His article ignores totally the well-documented argument that medical cost/GDP is much lower in other advanced countries with a government sponsored plan that has produced as good if not better result in health care.

Read this for comparative costs of US vs Europe.

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