The Free Market Economy gives us Great Televisions while Obamacare will give us Poor Health Care

Posted by PITHOCRATES - December 31st, 2011

Week in Review

The free market economy is giving us tremendous value in televisions.  Pity there are no market forces in our health care (see TV Prices Fall, Squeezing Most Makers and Sellers by ANDREW MARTIN, New York Times, posted 12/27/2011 on Yahoo! Finance).

Televisions have become so inexpensive that the profits have largely been squeezed out of them, a result of a huge increase in manufacturing capacity that has led to an oversupply and continued downward pressure on prices from low-cost manufacturers and online retailers…

To help reduce costs, manufacturers invested heavily in sophisticated new factories or retrofitted old ones that were capable of cranking out more televisions at lower cost. The problem is that the factories became operational about the time the recession hit, creating a glut of televisions and forcing prices down.

This is an excellent example of the role of prices in the free market economy.  Before the Great Recession these televisions were in high demand.  Prices were high.  So suppliers rushed to bring more to market.  With more features and better quality to outsell their competition.  As they did prices fell.  And kept falling.  Because supply grew so great that it surpassed demand.  So these televisions are now selling near cost.  Giving consumers incredible value.

These are market forces.  Providing state of the art quality at incredibly low prices.  Something government just can’t do.  And yet some are asking that government take over our health care system.  If they do, if Obamacare isn’t repealed, our health care won’t be anything like state of the art televisions.  It’ll just consume so much of our GDP that state of the art television will be unaffordable no matter how cheap they are.  Because there are no free market forces in state-run anything.


Tags: , , , , , , , , ,

Comments are closed.

Blog Home