A shortage is an expression of rising prices, by the way.

The first effect of increased demand is an increase in price. This creates a rent and signals the producer to produce more product to capture the additional return. The increased production causes prices to fall back again. If supply is constrained, then the rising price is expressed in shortages.

This is how inflation was expressed in the Soviet Union in the 1980’s. People were paid high nominal salaries, but supply of goods was constrained and prices were controlled. Everything disappeared from the shelves.

Price controls always cause prices to rise? How do you figure that?

Counterintuitively they do long-term. The “energy crisis” of the 70’s is the classic example. Price controls removed profit from oil production so people stopped exploring and pumping. It took a while for the effect to show up but after a couple of years, supplies began to fall even through the price was fixed. The first gas shortages in early ‘73 that gave the Arabs the idea for the embargo, was not accompanied by high prices. Then prices rose while the supply remained constrained by internally and externally. When Reagan did away with the windfall profits tax, prices spiked for two years because of pent up demand and then prices crashed as supplies came on line.

Price controls send a signal through the market which says that consumers do not want the controlled product. Produces make less of the product which causes shortages. When the price controls fail prices spike until the system readjust.

Price controls cause shortages (if the price is too low) or a surplus of supply / wasted resources (if they’re too high).

How would they cause prices to rise, though? Isn’t the point of price controls that they keep prices the same?

Medicare is a system for imposing price controls. If Medicare is eliminated, then price controls will be removed and health care prices will fall. Because eliminating Medicare is impossible health care prices are doomed to continue rising until the health care industry in bankrupt. Price controls always produce bankruptcy.

Anyone can name a company or even an industry where price controls have caused market leaders to go bankrupt. No one can name an industry helped by price controls.

I’m wondering if genetic brain enhancement – a very likely prospect for the near future – will finally see leftism thrown to the trash bin?

I doubt it. Leftism, especially the intellectual variety, is driven by emotional need. Craving for status, for power, envy etc drive leftists to create rationalizations for why they should be in charge. Enhancing intellect will simply give more power to these rationalizations.

Engineering emotions will be tricky because we use our emotions to decide. People with brain injuries that reduce their emotions also reduce their ability to make decisions even if their intellects are otherwise unaffected.

If you do the research there are three reasons why health care in a free market goes up:
1. Treatments get more complex for more illnesses therefore they get more expensive.
2. As medical science advances people live longer and get more illnesses that require more expensive care.
3.Government interference.

With this in mind how do you bring down costs? Well you develop preventive treatments that keep people healthy longer and find cures but in steps the government and blocks this from happening a good example is Malaria and DDT, Malaria was almost completely eliminated when DDT was still legal then some liberal envirowhacko twit writes a book and Government steps in and now a million people a year in Malaria prone area’s die every year and we spend billions using treatments that don’t work.

Another good example is access to more plans, right now because of Government interference you can’t buy a plan in say Wisconsin if you live in New York even though people in Wisconsin pay half what New Yorkers do for the same exact plan even with the same company in a lot of cases! And a lot of states make you buy a full coverage plan instead of a plan for say just emergency room urgent care which would be much cheaper. One other upward pressure on prices is law suites tort reform would fix a lot of the upward price pressure but that is ok Obamacare will fix this problem because you see when all healthcare workers become Government employees the law suites will go away and you can bet Obamacare will begin rationing eventually it is the only way they will be able to control costs.

To quote Ronald Reagan “Government is not the solution to the problem IT IS THE PROBLEM!”

I seem to remember that quote having some connection to medicine…

Incidentally, besides running out of the LOCAL anesthetic they were using during my MAJOR surgery right in the middle of the procedure and NOT having enough of the rationed stuff to give me another dose, I discovered after coming to America that most of the rest of the “treatments” I received are used as gimmmicky spa treatments for the ladies who lunch set. That’s how advanced medicine was in the country that was first in space.

So, sorry for the rant, but if they don’t like criticism of the worst, most statist and dangerous idea since Social Security, they can shove it up their Sputnik.

Or they assume that if you’re suggesting that an issue be left up to individual choice and free markets, you’re “doing nothing.”