As IF Times

Price ranges for glasses prove real eye-opener – chicagotribune.com.

For all the yak about how the modern information age has ushered in a new era of advantages for the modern consumer, the fact is, business models still favour the dumb consumer approach.   Which is to say, price things for as much as people will pay, the epitome of a free market system. 

Take the area of eyeglasses.  Logically, with the progress of industrialization, the employment of  high tech machinery, with efficiencies of distribution, how can it be that people are willing to pay upwards of over $1000 for  a pair of eyeglasses?  Years ago, I had the unfortunate need to pay for a cracked windshield on my car.  Insurance would cover the cost if I paid the deductible, or I could opt to pay for the “factory” glass from Stuttgart for $900.  Naturally, being an idiot, I paid to have the factory glass in order to maintain the ‘integrity’ of the car.

Still, I rationalize, $900 seems like a deal when you consider the expanse of glass, the weight for shipment etc etc.  It seems like even more of a bargain when you consider that people will pay $1000 for a couple of silver dollar sized pieces of glass in  a frame.  You would think somebody could set up a frame factory near a coke bottle plant and churn out spectacles for 5 bucks apiece.  These days, for less than a thousand bucks, you can buy the most recent technology flat screen TV.  This is what makes capitalism so great.  In a free market, there is no set price for things.  We are able to strike a good deal or get fleeced according to our needs and wants.

Think about the price of a car.  A very entry level car can be had these days for about $15,000.  Think of the materials, the engineering, the salaries, etc etc that are involved in creating that product for sale at a price to the public for approximately 15 pairs of expensive eyeglasses.  Competition in that space must be truly intense and the end result is that the consumer benefits.  Consider the price of a pair of jeans.  Some of today’s “designer” jeans are offered at $300 per pair.  Undoubtedly, these are made at the same turn of the century factories in China as the $15 work jeans that you can buy at Costco. 

The takeaway from this discussion is that the West may not be the industrial giant it once was, but they sure can market.  The wisdom is that cost of things has not as much to do with value recieved but more to do with price extracted.  These days it seems, we’re surrounded by hucksters.

link Op-Ed Columnist – The Narcissus Society – NYTimes.com.

Guys like this drive me insane.  This article captures the standard naivete demonstrated by leftists and socialists.  Firstly, the social issue they champion is turned into a discussion of right-wrong morality.  They frame the debate as one of basic morality regardless of whether or not the consequences make any sense.  Although this author’s discussion begins with a quasi philosophical observation of society, it transmogrifies into a morality plea for the Democrats’ health care proposals.  While his heart is likely in the right place, his mental grasp of the facts are as usual for socialists, lacking.   He says,

“…Which brings me to health care: Crunch time has come on a question central to the nation’s future, where an acknowledgment is needed that, when it comes to health, we’re all in this together. Pooling the risk among everybody is the most efficient way to forge a healthier society…”

What reasonable person with any compassion could argue with that sentiment?  What mercenary group would oppose such social conscience?  The implied answer is of course, the Republicans who are “obstructing” health care reform.  The solution proposed is to have a “public option” just like Medicare and Medicaid.  The author Cohen goes on to propose,

“…All the fear-mongering talk of “nationalizing” 17 percent of the economy is nonsense. Government, through Medicare and Medicaid, is already administering almost half of American health care and doing so with less waste than the private sector. Per capita Medicare costs for common benefits grew 4.9 percent between 1998 and 2008, against 7.1 percent for private insurers. Why not offer Medicare as a choice — a choice — to everyone? Aren’t Republicans about choice?..”

The fact is, Medicare is going bankrupt.  Some say by as soon as 2017.  Medicare is funded through contributions by workers during their working years.  As the bubble of the baby boom pushes through old age, demands on the fund will prove too much as the amount of contributions dwindle and health care costs continue to escalate.  Unless Medicare receives massive injections of funds from payroll deductions, it cannot sustain itself in its present state much less include tens of millions who are not contributing to the pool.  This is the same dilemma that California faces now in their budget crisis.  Too many demands are made upon the state government without requisite income available to sustain the services wanted by the residents, many of whom are not legally citizens of the state.  In the likely event that California is forced to increase taxes to pay for the shortfall, viable businesses will die or move out of state to a less onerous operating environment, which of course crimps state income even more.  The end result is, standards come down, not up. 

If we’re going to ensure everyone is looked after, why not offer free food to everyone?  That would make as much sense.  Why not free housing?  It all sounds good.  There was an article in Bloomberg recently in which private elementary schools were bemoaning the fact that some parents in NY city were balking at the $34,000 a year tuition for primary school.  Well if the “free” public school system is so good, why would they spend almost $400,000 to school their kids before university?  The answer is opportunity.  Parents obviously don’t think the public system adequate for their children.  The parents truly believe that private schooling will open better opportunities for them.  And that’s all you can ask for.  Capitalism is about allowing people to fulfill their potential according to their efforts.  If this were not the case, the US would not have to protect their borders.  They’d all be banging on Cuba’s doors.  Oddly, you never hear of people in rafts trying to beat the Cuban immigration system.

If people of “advanced social conscience” really want to do good, they should work on increasing the competition factor among health care providers and insurers as well as changing the whole litigious environment which is largely responsible for the escalating costs in health care. There was a cartoon years ago by the genius Jim Unger, of Herman fame, where a newly born baby was being held upside down by the delivering doctor.  The caption was “Somebody get me a lawyer!”.  Sigh.