Government is the enforcer for the middle class's predators...

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Here's a short piece explaining that the modern state has no choice but to sink its fangs into the middle class and suck it dry. An excerpt


Baumol examined the relationship between productivity and cost, and found that productivity in labor-intensive services (for example, nursing and teaching) had intrinsically lower rates of productivity increases than goods-producing industries. Baumol foresaw (that) as healthcare and education took a larger share of the national income/GDP, taxes would have to rise substantially to pay for those services.

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Baumol under-estimated the power of the low-productivity sectors such as healthcare and higher education to exploit political capture to increase their share of the national income. In other words, the extraordinary rise in healthcare and higher education costs arise not just from the low productivity of these sectors, but from their cartel power to obscure the true costs of their bloat and push prices higher.

Baumol also failed to appreciate how the state (government) is the willing partner in this exploitation of low productivity. The state enforces the monopoly pricing power of these cartels. As a result, potential gains in productivity from technology are suppressed to protect the cartels from any real competition.

Tim Bayly

Tim serves Clearnote Church, Bloomington, Indiana. He and Mary Lee have five children and big lots of grandchildren.

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