Economics//

​For most, economics is about earning enough to be able to buy the requisite goods and services — to make ends meet.  Having a little left over for that rainy day, perhaps retirement, would be very nice.

In a good economy, most can.  For the past forty-plus years, an ever larger percentage of Americans have found this impossible.  Today, forty percent of Americans can’t make ends meet.  An economy that doesn’t provide a great majority of the population with the requisite goods and services is not a good economy.​

Those who persist in saying that the economy is good are looking at metrics like Gross Domestic Product (GDP), a slightly contorted measure of the production of those requisite goods and services.  A good economy produces and ‘equitably distributes’ those requisite goods and services.​

Though we’ve long proven ourselves capable of producing the goods and services we need, for most of our history, we’ve failed to distribute them equitably. Those few golden years, from about 1940 to 1972, when we did fairly well in distribution, were preceded by more than two centuries of atrociously inequitable distribution and followed by fifty-plus years of ever-worsening inequality. It has become harder and harder for more and more to make ends meet.​

How to equitably distribute requisite goods and services has been a problem beyond early communal societies.   Many rationalizations of the problem involved pretending that it wasn’t a problem, or that it was the victims’ fault.  Recently, House Speaker Johnson and Texas Representative Crockett used biblical references to debate funding for the Supplemental Nutritional Assistance Program (SNAP) during which Speaker Johnson chose rationalizations for inequity from the Old Testament as reasons to cut SNAP funding.​

The fact that wages for production and essential workers have been suppressed for forty-plus years plays a huge role in the inequitable distribution we are seeing.  Much has been written about this.  Inflation makes it much harder to make ends meet.  Much has been written about this.  Not so much has been written about the role of increased demands on workers’ earnings for services and the increased costs of those services.  

—

​It was 1958, maybe 59.  The class was Introductory Economics, the text Samuelson and the professor was a Scottish import who told us of how during the Great Depression and the New Deal the US government signed cost-plus construction contracts for dam ballast with contractors who then brought dump truck loads of machined bolts and nuts, because — ten-percent of $100 worth of rocks is $10/load and ten-percent of $2,000 worth of machined bolts is $200/load.​

That was then.  Today, companies across the economy do it.  Monthly, your bank mails out, or posts, a seven-page statement.  The first page is your statement, the other six are boilerplate, etc. (assorted machined bolts).  Ten percent of $1Billion is a lot.​

For the pharmaceutical industry, the initial (under patent) price on drugs is premised on development and production costs.  Over the life of the patent, a ten percent return on a lot is more than it is on a little.  For them, the more spent, the greater the return.​

We pay twice as much for healthcare and get half as much as France.  Across the board, our drug costs are premised on what was spent on research and development (R&D), and production.  For healthcare in general, across the board, the more, the better for the industry.  Efficiency is for suckers.  Much of our healthcare (even Medicare and Medicaid) is provided by private healthcare providers who are entitled to a certain return on their investment (and operating costs).  The more spent on buildings, equipment, personnel, administration, …, the more they are entitled to charge.  Private healthcare is not about providing healthcare; it is about making a return on healthcare.​

Back in the 90s, we began to hear Wall Street types talk of what share, what percentage, of Gross Domestic Product (GDP) a given industry (segment of the economy), defense, etc., could be expected to command.  Then, we heard that for healthcare, anything less than a twelve percent share of GDP was underperforming.  Today, healthcare spending is about eighteen percent of GDP.  Another, more meaningful way of looking at this is — healthcare consumes greater than seventeen percent of the average American’s income.  This performance metric was not about providing healthcare.​

Ironically, consumer spending (consumption) is the largest component of GDP.​

For the marginal  (for a lot of Americans), there’s barely enough to go around.  If one good or service takes up more of your earnings, another has to be cut back.  Paying more for a good or service means that they must give up all or part of another (others).​

The consequences of these demands for a certain share of GDP are: healthcare is taking an ever greater share, housing is taking an ever greater share, …  Since there’s never more than 100%, today, more than forty percent of American workers don’t have enough left to live on.  A three-bedroom apartment in Fremont, CA rents for $3,000 – $4,000/mo.  Tesla Fremont pays its production workers ~ $45,000/yr.  In many areas of the country, workers pay more than half their salary for rent.  But — All of one’s salary?!

​Large numbers of Americans are homeless because of healthcare costs, and large numbers are homeless because of housing costs (read – financialism).  Because of industries taking their ‘market share’.

​Is market share a proper goal for either the healthcare industry, the housing industry, the finance industry, or … ?  Why does the market have a role?