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Friday, November 10, 2006
HE DID A LONG TIME AGO! Sen. Lincoln Chafee May Leave GOP: "Sen. Lincoln Chafee May Leave GOP- Two days after losing a bid for a second term, Sen. Lincoln Chafee said he was unsure whether he would remain a Republican."
posted by Jack Mercer @ 11/10/2006 06:11:00 PM  
  • At 11/11/2006 11:55:00 PM, Anonymous light said…

    I think he's making the right decision. If you can't find a middle ground and you don't feel that it's worth the fight, why keep on with it?

    Nice site. :D


  • At 11/12/2006 08:47:00 PM, Blogger Jack Mercer said…

    Hi Light!

    Thanks for stopping by the Snipet. I think that Senator Chaffee, along with Snowe, Collins, McCain (and newest to join the ranks--Graham) are the future of the Republicans. I don't particularly mean this as a compliment, as these Senators stand for a lot of things that Republicanism did not. All believe sincerely that more government is a solution to our problems and increased government interference in international affairs is essential to our standing, both economic and political, in the world.

    I dropped by your site, and am impressed!

    Take care,


  • At 11/12/2006 09:08:00 PM, Anonymous Light said…

    Hi Jack,

    Thanks for the welcome.

    I thought that Republicans didn't believe in a lot of government interference. I took a class in macroeconomics for one semester and I learned that conservatives typically go along with classicist economists who believe in laissez faire-that the government shouldn't interfere in business as opposed to keynesians who are for government regulation of businesses. If the government could regulate businesses more, wouldn't pharmaceutical companies lower prescription drug prices and healthcare premiums?

    Thanks for visiting my site. I saw your comment to Doug the other day, so I thought I'd come over and visit.


  • At 11/12/2006 10:10:00 PM, Blogger Jack Mercer said…

    You're right, Light. It was once part of the Republican creed--responsibility and self-determination. They were once the party of Democracy, but have since given up those ideals. Ideologically we have a single party in Washington, bifurcated and struggling for control based on nuance.

    I have some dear liberal friends who still think that the Democrats are concerned with the liberal agenda, and I have some conservative friends who still believe that the Republicans are concerned with a conservative one. I guess I have old, crabby and too jaded to think that either of our parties have the American people's interest in mind. The primary concern for all seems reelection.

    The indicators are endless, McCain/Feingold Campaign Finance Reform bill, Congress' annual vote to increase their own wages (in spite of amazingly inferior service and poor performance), the shameless pandering...

    But in regards to what you posted above, I taught economics in the Penn State system and just about all of my fellow profs were Keynesian in economic philosophy. Truth to tell, it is seductive because of its appeal to the ideal, but flawed because of its rejection of reality. It deals with concepts of "fairness/equity", which are not economic concepts, that therefore have to be injected artificially into models. I'll get to your example of pharmaceutical companies in a sec, but before that I'll give you an example of what I'm talking about. Take for example trade. When people make things better and cheaper than others, then they can sell them at a lower price. This causes several things to happen. 1. The one selling makes the money. 2. In order to compete, others have to learn to be better or sell cheaper or go out of business. Even though the price may fluctuate in either the short or long term to the consumer, they benefit the most under this model. This is in the lack of interference. Now say we introduce an artificial element into the equation. A third party, in the interest of "fairness", either regulates how much the winning company, increases taxes, fees, tariffs or quotas, then what happens. 1. price goes up for the consumer. 2. innovation or improvement stagnates. 3. quality decreases. etc.

    An example of this would be Schumer and Graham's proposal (I think they have removed it) to levy a tariff against the Chinese for failing to devalue their currency. Such protectionist policies are Keynesian--It does not occur to either of these gentlemen (because of their political philosophy) that in order to remove trade inequities we could make it easier for American businesses to compete--decrease regulation, taxation, etc. Instead they try to protect which in the short and long run just hurts the consumer (and the economy). President Bush tried to do this with the American steel industry in his first term which didn't work--earning him ire overseas and also here at home in the same industry he was trying to "protect" (long and short of it he created a spike in steel prices which made steel less viable, and hurt the market).

    Ok, on to the pharm cos.

    Let's look at the medical industry in general and ask ourselves why prices rise. There are several factors figuring into price: 1. supply 2. demand. Now keep in mind, that in a pure market, these two factors set the price. In the American market there is plenty, LOADS of supply or medicine and medical services. When I lived in Canada, my wait time in a doctors office was 2-3 hours, here in the United States, my wait time is 15-20 minutes. Same goes for a surgery, I need a heart cath in the U.S. I get it in a day or two, in Canada I go on a waiting list and may get it in several weeks. So there is plenty of medical supply in the United States. Lets look at the other side, Demand. There are quite a few things that affect could affect demand in the healthcare industry, but the primary component that seems to have the most impact is price itself (keep in mind that these concepts are interdependent). If the price for healthcare is low for the individual, then they will be more likely to take advantage of the service unnecessarily. For example, I know people who have insurance who will go to the doctor when they have a cold. Going to the doctor or getting prescriptions unnecessarily drives up the demand and therefore the overall price (even though the person paying is paying a "co-pay" or a percentage, the cost gets passed back eventually to them in terms of a raise in their insurance premium). The person with insurance, Medicare or Medicaid essentially thinks they are getting something "free", but in all reality SOMEONE has to pay for that good or service. Add to this the increased government regulation of the healthcare industry, the high cost of mal-practice insurance, specialized training required to fill out government forms, etc., etc. etc. and it turns out that the high price we are paying is largely due to the failure to allow market forces to do their jobs and empowering the government to regulate.

    Quick look at the pharm industry. If a company spends many millions developing a drug (keep in mind that they spend many millions too developing drugs that do not work and never make it to the consumer) then the cost of that drug either has to be recouped, profit made or there cannot be recapitalization, which would mean the elimination of R&D which would mean we would never see new cures come on the market.

    Light, there are some good applications of government regulation, but they are few and far between--they also have to be used more wisely than we have in the past 50 years. Industry continues to innovate and get around a lot of the barriers set up for it, but there will come a day when the cost of regulation and doing business becomes too much. I have a close friend who owned his own family practice--a brilliant doctor who graduated the top in his class--he left practice almost 10 years ago and went to work as a medical consultant for Social Security because the cost for him to do business was much more than what he could make working for the government. Now compound that by many times and see what kind of crisis it could eventually create in a nation of our size and complexity.

    Sorry about the long-winded answer, Light! I have a tendency to do this--and I'm sure your eyes are glazed over by now. :)

    Just a quick note--much on my site uses a "tone" that needs to be taken with a grain of salt. It is always meant to provoke--but in a good way.


  • At 11/13/2006 12:32:00 PM, Anonymous light said…

    Jack, you're right. I'm beginning to remember the supply and demand info.

    I was thinking about the high price that goes along with medical research and the fact that even though they spend millions or billions of dollars on research, they don't do have long enough testing periods, they could test for 2 years when they should be testing for 5 or so years(I don't know the standards of research, just as an example). And then you have drugs like Vioxx getting recalled and lately generic acemetaphine(Not spelled right, ingredient in tylenol) have been found to have scraps of metal in them. So where is the money going? Is it wasted? I understand that some labs are pressured to release drugs, but at the expense of consumers? There needs to be a better system of drug inspection and regulation.There's got to be a more cost efficient way to pay for prescription drugs. I'm curious to know what your thoughts on a universal healthcare plan in the US.


  • At 11/13/2006 09:42:00 PM, Blogger Jack Mercer said…

    Hi Light,

    I lived in Australia and also in Canada who are poster children for free healthcare so I have I have some definite opinion (keep in mind I'm speaking opinion:) and observations. But before I get into that, I guess I'd need to let you know that politically I am an "Originalist." What I mean by this is that I don't exactly fall in the contemporary categories of "liberal" and "conservative." These terms are relative to the time period in which they are being used. "Liberal" in a political sense means "progression" or movement. Conservative means static or unchangeable. If one lives in a democracy and is liberal, then one wants to move away from democracy toward socialism (which eventually ends in communism and then fascism--if Stalin, Plato and other great political minds are any judge--Plato used differing terms). Conversely, "conservative" in a democracy means one wants to stay under a democratic form of government. However, if one lives under fascism and is "conservative" they want to remain a fascist, whereas it is the "liberal" who wants to move toward democracy.

    So I can't say that I am a conservative in this political clime--I do not want what kind of government we have created over the last 50 years--I want to go back to what the framers originally intended--freedom and self-determination.

    Now that we have that out of the way, I'll give you my two cents worth on what you mentioned. I am not sure how much it takes to develop drugs--I know from analyzing financial statement of pharm cos in the past that operating expenses are very high. The longer that drugs are in testing also the higher the cost. I understand the need for consumer protection, but ultimately the responsibility lies in the hands of the consumer--the government can't protect us from everything. :)

    Light, I'll be back tomorrow with specifics on social medicine.

    Take care!


  • At 11/14/2006 11:08:00 AM, Anonymous light said…


    I also am an "Originalist" as well as being a little of a liberial and I have some libertarian leanings(very few). Politics is ever-changing and unpredictable. I'm not the most liberal but I don't feel I'm very conservative if I'm conservative at all.

    I look forward to reading what you have to say about social medicine, thanks.


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