03 September 2019

The Tyranny of Fixed Cost - part the first

Today's reporting brings two manifestations of The Tyranny of Fixed Cost©. First: hospitals.
When somebody goes out of town, that revenue is lost. And because it's lost, the hospital has to charge everybody else more.
-- John Heaton

When I had the first, subsequently failed, repair to an important part of me, the geezer surgeon volunteered that his fee was $500, but, of course, the insurance paid some number of thousands. And there has been an increasing number of reports that it's really unfettered spending by the hospital cabal that's been driving healthcare costs. Not so much pharma. Having also had the experience of dealing with medical needs on Block Island, which, as one might suspect, has but one medical facility, monopoly in healthcare is not a good thing. For the public at least.

That quote sums up The Tyranny of Fixed Cost© starkly. And that's not the only way exploitation happens. In the insurance bidnezz, it has been the practice for decades (and more aggressively in the last one or two), to segregate the insured population into ever more homogeneous pools, charging those identified as more likely to need services rather more than those identified as not so much. Insurance is being transformed from 'pooled risk' into 'prepaid consumption'. The econ types call this 'extracting the consumers' surplus'. That's not good eats.

Second, the 'benefits' of tariffs. Anyone who bought that argument ought to be stripped of voting right; only a fucking moron would state it or believe it.
Trump says he wants to bring manufacturing back to the states. How does that work exactly?
-- Lena Phoenix

Xero can't pay for the fixed cost of a production facility of its own, anywhere; least of all the rich USofA.

So, Xero shoes doesn't actually make any shoes. Are you surprised? And, as many have said and reported, blocking China production through tariff will not, repeat not, mean that production will move to the USofA. It will move to other slave wage countries, mostly in Asia. The right wing has been waging war on labor for decades, if not a couple of centuries (remember all those New England manufacturers that ran to the South, and then farther South?), and still these morons keep voting right wing. "We don't need no education!" Blue collar wage earners gained entry to the middle class because of WWII's ethos of community and power of labor unions. The CxO class of the 50s and 60s having departed the scene, 19th century Social Darwinism has reared its ugly head (and body). It's worth knowing that the income tax, first instance, was explicitly on the 1% of the day. And it also was the vehicle to end reliance on tariff to fund the Damn Gummint; tariff wasn't enough moolah to run a real government.

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