News Is Universal Healthcare the Solution to Inefficient Capitalism?

[mheslep]

Bear in mind Irish industry and commerce is governed by EU law with major economic tools such as interest rates and borrowing levels determined by the EU central bank! Also of course many of the regulations governing how commerce and industry is run emanate from EU directives.

Yes Ire. is a member of the EU. Its also is drastically different from the big EU economies on business tax policy.

You are wrong; during the very austere times of the 80's Irish corporate tax rates were 0% for foreign investment rising to 10% after 10 years (though this was easily avoidable) so one could argue it was the increase in corporate rates that led to Ireland's economic growth.

The domestic, in country, business tax rate back then was in fact 50% with some caveats.The '0%' was a tax exemption on exports only, going back as early as '56. The EU complained after Ireland joined and the '10%' tax was later applied to manufacturing only in 1980. In 1997 it was announced that beginning in 2003 the rate for all corporations not covered under the earlier deals would become 12.5%. Similarly the capital gains rate was cut from 40 to 20% in '97. As a consequence Ireland has become a world class tax haven and http://www.heritage.org/research/worldwidefreedom/bg1945.cfm" :

Intel, IBM, Hewlett-Packard, and Dell—all have major activities, employing 4,000 to 5,000 people each in Ireland. Intel has invested over $6 billion in four wafer fabrication plants on its largest site outside the U.S., which is also a launch site for its most advanced microprocessors. ...Nine of the world’s top 10 pharmaceutical companies and 12 of the world’s top 15 medical products companies have substantial operations in Ireland serving global markets.

http://www.independent.org/pdf/tir/tir_07_4_burnham.pdf" for the Irish boom include fiscal budget cuts by the 1987 Haughey government with got the defecit spending under control, deregulation e.g. on the Ireland -UK air routes, and the investment in the Regional Technical Colleges.

Though the true reasons were the ousting of the corrupt political elite of the day such as the prime minister Charles Haughey and his corrupt ministers. The fall out from that period of bribes and corruption is still continuing if you care to google on Mahon Tribunal. Back then Ireland truly practised economic self-interest with the rich creaming off every penny they could whilst the working class were left to fend for themselves on the basis of the working working class could subsidise the unemployed working class whilst the rich contributed absolutely nothing. Another major factor was membership of the EU which took a lot of the legislative powers away from the corrupt politicians thus limiting the damage they could do, whilst at the same time billions in EU structural funds were pumped into the economy (a socialist aid program).

http://www.heritage.org/research/worldwidefreedom/bg1945.cfm"

Some external observers are inclined to ascribe a large part of Ireland’s success in the 1990s to EU economic transfers, but their role can be overstated. EU membership has been very positive for Ireland, providing market access, enhancing Ireland’s national status, and contributing to the budget. While net receipts from the EU averaged 4 percent of GDP over an extended period, studies have shown that these contributions added about 0.5 percent per year to the growth rate, while the growth has averaged over 6.5 percent per year since 1987... Comparable transfers were made to other poorer EU states, such as Greece, Portugal, and Spain, but none of these countries achieved similar growth.

For a fat, ugly cow like Mary Harney to claim Ireland's economic success as an Irish political success is twisting the truth on it's head. Finally the collapse of influence of the ultra right-wing Catholic Church because of it's propensity for child molestation helped tremendously in creating a fairer society in Ireland.

Perhaps all of these are good things (corrupt politicians tossed, Church influence tossed) but how is any of responsible for increasing the GDP? How does this positively generate wealth? Do you assert that they stole it all previously? Someone still has to create jobs and hire people. For that matter, given your stated distaste for local Irish government, why would you have so much faith in a much farther removed EU government as having the power to provide prosperity?

I doubt it but regardless it is irrelevant to the point of this discussion. Ecomomist is arguing all socialist programs are bad for growth and so I've provided an example of a country with a plethora of social programs doing very well. If you also wish to add the US to the side of the balance sheet of socialist countries doing well then that's fine by me.

My point of all this was to highlight the large difference in economic policy between France the relatively laissez faire policies of Ireland. I've provided the particulars in the above posts; the consequence is that France's GDP/PPP/capita ranking is now 23rd in the world and falling.

 

[WheelsRCool]

As long as France continues to believe in socialism and that governmetn creates jobs, corporations are evil and destroy jobs, that economic growth is bad, that if you are a young person and get a job the business should not be allowed to fire you for the first few years even if you are a complete slacker, that ultra-high taxation is good, etc...France will continue to have a very lousy economy.

So will Germany.

I think pretty much the only thing most of Europe can even sell at a profit these days are cars, and that is likely going to change soon.

 

[Anttech]

As long as France continues to believe in socialism and that governmetn creates jobs, corporations are evil and destroy jobs, that economic growth is bad, that if you are a young person and get a job the business should not be allowed to fire you for the first few years even if you are a complete slacker, that ultra-high taxation is good, etc...France will continue to have a very lousy economy.

So will Germany.

I think pretty much the only thing most of Europe can even sell at a profit these days are cars, and that is likely going to change soon.

At least you arent attempting to vale your bigotry.

 

[Art]

Yes Ire. is a member of the EU. Its also is drastically different from the big EU economies on business tax policy.

The domestic, in country, business tax rate back then was in fact 50% with some caveats.The '0%' was a tax exemption on exports only, going back as early as '56. The EU complained after Ireland joined and the '10%' tax was later applied to manufacturing only in 1980. In 1997 it was announced that beginning in 2003 the rate for all corporations not covered under the earlier deals would become 12.5%. Similarly the capital gains rate was cut from 40 to 20% in '97. As a consequence Ireland has become a world class tax haven and http://www.heritage.org/research/worldwidefreedom/bg1945.cfm" :

Which is a long winded way of saying oops you were right they didn't decrease taxes on multi-nationals they increased it.

http://www.independent.org/pdf/tir/tir_07_4_burnham.pdf" for the Irish boom include fiscal budget cuts by the 1987 Haughey government with got the defecit spending under control, deregulation e.g. on the Ireland -UK air routes, and the investment in the Regional Technical Colleges.

Spending was reduced by EU mandate - deregulation of the Ireland-UK route came about through EU competition laws and I have already given the Irish gov't credit for it's investment in education.

http://www.heritage.org/research/worldwidefreedom/bg1945.cfm"

This is mostly a crock of **** from a right wing rag.

Perhaps all of these are good things (corrupt politicians tossed, Church influence tossed) but how is any of responsible for increasing the GDP? How does this positively generate wealth? Do you assert that they stole it all previously? Someone still has to create jobs and hire people. For that matter, given your stated distaste for local Irish government, why would you have so much faith in a much farther removed EU government as having the power to provide prosperity?

Simple really when workers were no longer paying 72% of their wages in income tax and nat'l insurance they felt less inclined to emigrate and more inclined to work and add wealth at home. The article you quoted massively understates the contribution of the EU structural funds to Ireland's development. For example a key problem in attracting overseas companies to locate in Ireland was the abysmal transport system. The EU paid for roads to be constructed linking major cities such as Dublin and Cork with, for the first time, something better than a dirt track.
I imagine one reason why other countries which received structural funds haven't fared so well is because they are far larger and so the grants wouldn't make such an impact on their transport systems.

As for theft, to give just one example, on interest earned on illegal overseas accounts alone the rich evaded £1 billion in taxes during this time, which for the tiny economy in Ireland was a HUGE amount. BTW when this came to light instead of punishing them they were offered tax amnesties if they promised to be good in the future and as they weren't they were offered a second amnesty and then a third. So yes Ireland was far, far better off when most of the critical decision making was taken away from the criminals running the country and handed over to the EU.

My point of all this was to highlight the large difference in economic policy between France the relatively laissez faire policies of Ireland. I've provided the particulars in the above posts; the consequence is that France's GDP/PPP/capita ranking is now 23rd in the world and falling.

And my point is France is not the basket case it is depicted as and that the problems they do have are more to do with their xenophobia than socialism as Ireland under it's commitment to the EU Social Charter provides very similar socialist programs as France does.

 

[WheelsRCool]

At least you arent attempting to vale your bigotry.

Actually it's called the truth. I don't get why stating facts about the European economies always gets criticized as bigotry. If you tax at ultra-high rates, have a lot of regulations over your businesses, pay for people not to work, etc...your economy is not going to fair very well.

 

[Economist]

Actually it's called the truth. I don't get why stating facts about the European economies always gets criticized as bigotry. If you tax at ultra-high rates, have a lot of regulations over your businesses, pay for people not to work, etc...your economy is not going to fair very well.

As some one said in this thread earlier, "There is no free lunch."

 

[Matthieu]

Where does the govment get it's money to pay for everyones healthcare?

medecines' cost is fixed by the government through negociations with laboratories. It's a deal, we buy hundred of thousands of your medicaments but you make us a good price. It's a fair deal since laboratories still make huge benefits from the social wealthare yet they would make more if they didn't have such constrait, the return being mostly (it's not totaly) free healthcare.

 

[DrClapeyron]

EDIT: Wrong Topic

 

[Matthieu]

France has a higher rate of unemployment, but this is based on people age 15-64. In France people usually retire by 50. That is part of the equation. We have more employment, but a lot of our workers are older people. I would guess that may also play a role in productivity. A younger stronger and sharper worker might be a lot more productive than a worker who is going senile.

In order to get full retirement in France you have to pay for your retreat 40 years long. In order to retire at 50 you would have had to start working at 10.

 

[denverdoc]

medecines' cost is fixed by the government through negociations with laboratories. It's a deal, we buy hundred of thousands of your medicaments but you make us a good price. It's a fair deal since laboratories still make huge benefits from the social wealthare yet they would make more if they didn't have such constrait, the return being mostly (it's not totaly) free healthcare.

In my practice many have to buy meds from Canada--often costs them less than the co-pay here for a branded name with no generic equivalent in the US. Health care is never free--its just a matter of detail as to how it is subsidized. I know too many americans who have no recourse but to be ill. I help whom I can, but I need income as well.

 

[Economist]

medecines' cost is fixed by the government through negociations with laboratories. It's a deal, we buy hundred of thousands of your medicaments but you make us a good price. It's a fair deal since laboratories still make huge benefits from the social wealthare yet they would make more if they didn't have such constrait, the return being mostly (it's not totaly) free healthcare.

Well, it may be more complicated than this. If the government gets a better price, this maybe due to the fact that the government would be a monopsony (a single buyer) in this case. Just to let you know, a monopsony acts much like a monopoly because they have a large degree of market power. In other words, the government may "underpay" for such medication. Now, I'm not asking you guys to feel sorry for pharmaceutical companies for being underpaid. But I am asking you to think about the unintended consequences of such policy, as it would likely decrease innovation in the medical field. My understanding is that the US produces a very disproportionate percentage of new medication in the world. This may be due to other countries restrictive policies in the medical field (such as intellectual property laws). Luckily for many other countries, they are allowed to "piggyback" of the US discoveries because they can then purchase medication from US pharmaceutical companies. Sometimes I wonder how good medical care would be if all developed countries innovated as much as the US?

 

[ShawnD]

Economist, you've clearly never worked for a private company if you believe selling to a single customer is bad. Companies willingly sell bulk product at huge discounts because it assures that the product will move faster. Right now I work for a pharmaceutical company that produces a cream for soaking drugs into skin, and our biggest customers are warehousing companies like McKesson, Kohl and Frisch, and http://www.amerisourcebergen.com/cp/1/. Those 3 warehouse companies make up at least 95% of our sales. One product we sell to those warehouse companies is a cream that comes in 6-packs, which we sell to them for $48, which is $8/tube. We sell that exact same product on the internet for $20/tube. Even at less than half the price, the $8 tubes we sell to the warehouse companies make a hell of a lot more money than the $20 tubes since it's a different order of magnitude in terms of how many we sell.

That same thing applies to drug companies. Instead of selling to 10000 places in the US, they sell it to just 1 place in France - the government. Just put a different shipping label for different areas of France you're sending to, and all of the bills go to to the government of France. It's exactly the same as selling bulk cream to McKesson Logistics and letting them deal with each individual London Drugs, Shoppers Drug Mart, Walmart, etc.

 

[Economist]

Economist, you've clearly never worked for a private company if you believe selling to a single customer is bad. Companies willingly sell bulk product at huge discounts because it assures that the product will move faster. Right now I work for a pharmaceutical company that produces a cream for soaking drugs into skin, and our biggest customers are warehousing companies like McKesson, Kohl and Frisch, and http://www.amerisourcebergen.com/cp/1/. Those 3 warehouse companies make up at least 95% of our sales. One product we sell to those warehouse companies is a cream that comes in 6-packs, which we sell to them for $48, which is $8/tube. We sell that exact same product on the internet for $20/tube. Even at less than half the price, the $8 tubes we sell to the warehouse companies make a hell of a lot more money than the $20 tubes since it's a different order of magnitude in terms of how many we sell.

That same thing applies to drug companies. Instead of selling to 10000 places in the US, they sell it to just 1 place in France - the government. Just put a different shipping label for different areas of France you're sending to, and all of the bills go to to the government of France. It's exactly the same as selling bulk cream to McKesson Logistics and letting them deal with each individual London Drugs, Shoppers Drug Mart, Walmart, etc.

Check out on the research and literature on monopsonies then.

 

[denverdoc]

What I found amusing and pathetic is that under the new Medicare Part D plan states have been relieved of any kind of monopsizing, which in the past has saved bucket loads of money--both to the state gov'ts and the consumers. More corporate welfare under Med D and bunches of Economists to defend the decision. That benefits took an overall hit, unnoticed except by those affected and those that service them.

 

[Matthieu]

But I am asking you to think about the unintended consequences of such policy, as it would likely decrease innovation in the medical field. My understanding is that the US produces a very disproportionate percentage of new medication in the world. This may be due to other countries restrictive policies in the medical field (such as intellectual property laws). Luckily for many other countries, they are allowed to "piggyback" of the US discoveries because they can then purchase medication from US pharmaceutical companies. Sometimes I wonder how good medical care would be if all developed countries innovated as much as the US?

Not really. It's medications made everywhere in the world that gets this discount. In other word the market is the same for French or American or British medications. French medications are exported and French laboratories get important incomes from the US too so our pharmacetical industry, one of the world's largest, does not suffer from this.

 

[ShawnD]

Check out on the research and literature on monopsonies then.

Easy. UHC in Canada and other countries. Doctors are all private but their only customer is the government. It's not perfect, but it would be a lie to say it's a disaster. How about all city work? The roads in my city are all built by private companies, paid with government funds. The US military is all private created stuff, paid for by government. Is the US military a piece of garbage? Is healthcare in France garbage? Are the roads in my city garbage? IMO, the answer to all three of those is no. The US military has excellent equipment, France has excellent healthcare, and my city has excellent roads.

Government contracts are significant, so companies compete like crazy to get them. Competition is the one thing that makes capitalism work.
Having things too spread out leads to gross inefficiencies and collusion. An HMO is arguably a form of collusion, and we all know how bad those are. Insurance, hospitals, doctors, and drug companies all banding together to be your one and only provider. If you're sick, you are only covered by an HMO hospital. That total lack of choice eliminates competition and it ends up hurting capitalism whereas people under UHC with cheap drugs have the freedom to go to whichever hospital is closest, whichever clinic is closest, get whichever prescription drug is cheapest.

Having the government fight on your side also helps the people who are unable to fight. Somebody with cancer or HIV is not in a position to say "oh well the price is unreasonable, so I won't buy this". We aren't talking about a computer or a TV where you can simply not buy it. We're talking about something you need to live. Prescription drugs are almost like a kind of extortion where the company says "pay up or die" and you're not strong enough to stand up and say no, because you will die if you do. It would be ridiculous to ask for free drugs, but it's not ridiculous to stand up and tell the companies they need to compete if they want your business. They can't just win by default because they're the only game in town and they have a complete monopoly on drugs (that's what a drug patent is), we need some way to keep them in check.