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Scott Brown's acceptance speech on Fox News

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Re: Scott Brown's acceptance speech on Fox News

Postby Fade2White12 » Thu Jan 21, 2010 3:32 pm

Mookie4ever wrote:Private industry exists to make a profit. Public companies have a duty to their shareholders to maximize profits. I don't know how you can say that without a doubt savings from going private would be passed on to consumers. Or did I get you wrong and you just said that it is possible for the savings to be passed on to consumers? Without govt regulation I believe that private industry will squeeze as much out of the public as they can.


Almost always, cost-savings are passed on to the consumer. It's economic theory, my good man.

A business that has just incurred a cost-savings that keeps its price at a pre-savings level does not maximize profits at all. By lowering price (passing cost savings onto its customers), the business often does not experience lower revenue at all. A reduction in price almost always leads to an extension of the consumer base - where additional profits can be extracted. The additional profits are usually more than enough to compensate the loss of profits from the existing consumers. Therefore, if a business has experienced a cost-savings and has a primary goal of profit-maximization, one can reasonably expect it to pass on at least part of their cost savings to consumers.
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Re: Scott Brown's acceptance speech on Fox News

Postby Mookie4ever » Thu Jan 21, 2010 3:33 pm

Madison, again, I ask why are you so positive that this will change if administered by private industry?

Goldman Sachs received $10 billion in direct financial aid and then paid out $22 billion in executive compensation in 2009.
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Re: Scott Brown's acceptance speech on Fox News

Postby Madison » Thu Jan 21, 2010 3:51 pm

Mookie4ever wrote:Madison, again, I ask why are you so positive that this will change if administered by private industry?

Goldman Sachs received $10 billion in direct financial aid and then paid out $22 billion in executive compensation in 2009.


:-?

I haven't said anything about private or public.

All I've said is the entire industry from top to bottom could easily cut costs down and pass that savings on to consumers, which would allow everyone to be able to afford health insurance.




Obama wants everyone to have health insurance. Ok, cool, I can respect that and generally agree with that. However, forcing people to pay absurd amounts and sending people into bankruptcy in order to obtain that insurance is beyond stupid. Since the healthcare industry would rather rob people by overcharging to such a ridiculous degree instead of charging fair and reasonable prices, then Obama needs to fix that issue if he truely wants Americans to have affordable healthcare and affordable health insurance. So the government needs to get involved, start finding ways to cut costs, force costs to be cut, and even go so far as to take over the insurance industry if necessary. I don't like the idea of healthcare being run by the government, but the way it is right now is not working and is certainly the farthest thing from "affordable" that there is.
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Re: Scott Brown's acceptance speech on Fox News

Postby Fade2White12 » Thu Jan 21, 2010 3:53 pm

Madison wrote:and even go so far as to take over the insurance industry if necessary.


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Re: Scott Brown's acceptance speech on Fox News

Postby Mookie4ever » Thu Jan 21, 2010 3:55 pm

Madison wrote:
Mookie4ever wrote:Madison, again, I ask why are you so positive that this will change if administered by private industry?

Goldman Sachs received $10 billion in direct financial aid and then paid out $22 billion in executive compensation in 2009.


:-?

I haven't said anything about private or public.

All I've said is the entire industry from top to bottom could easily cut costs down and pass that savings on to consumers, which would allow everyone to be able to afford health insurance.



Sorry bout that. I had no idea about this post and asked you what you meant by this:

Madison wrote:
jfg wrote:I've seen very few cases in America where businesses are able to do things cheaper and pass those savings along to the consumer.


I'd argue the opposite and say most businesses could do things cheaper and pass that savings on to the consumer. Without a doubt, the health industry certainly could.
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Re: Scott Brown's acceptance speech on Fox News

Postby jfg » Thu Jan 21, 2010 3:55 pm

I only meant that multiple companies are able to save money and very rarely do those cost savings get passed on to the customer. I think anybody can agree with that, and I don't see how tort reform would be any different. What is the government going to do? Say that they have to pass it along to the consumer? Kind of like the government told banks to stop giving bonuses and taking extravagant trips? Costs are cut every day and while it would be easy to give the consumer a break it almost never happens.
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Re: Scott Brown's acceptance speech on Fox News

Postby Fade2White12 » Thu Jan 21, 2010 4:39 pm

jfg wrote:I only meant that multiple companies are able to save money and very rarely do those cost savings get passed on to the customer.


I don't get where you and a few others get this from. If that were the case, the price of anything would never go down. As I already said, it's a pretty simple economic principle that one learns in high school. When organizations have the ability to lower prices, generally they do so. Lower prices = larger customer base = higher profits. This is even true for oligopolies. Other than the banking industry (where bailout money does not equal cost-savings, btw), I'd like some evidence that says so.

jfg wrote:What is the government going to do? Say that they have to pass it along to the consumer? Kind of like the government told banks to stop giving bonuses and taking extravagant trips? Costs are cut every day and while it would be easy to give the consumer a break it almost never happens.


Anti-trust laws almost always consider consumer benefits in regards to mergers and acquisitions. So in a sense, ya, the government does mandate such things.

However, if you insist on being an cynic, believing that lower business costs would ever be passed on to the consumer, I guess tort reform would make no difference. In fact, it would likely make things worse - as insurance companies and health care providers would generate even higher revenues.

But, the argument is pretty simple. If there were caps on litigation damages, not only would health care providers and physicians spend less in judgments, but also malpractice insurance premiums. Lower malpractice insurance means less "defensive medicine" which in turn means less money billed to patient insurance - meaning lower premiums for the consumer. Lower premiums for the consumer means larger customer base for insurance companies - which means larger profits. Tort reform = doctors/health care win = insurance companies win = patients win.
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Re: Scott Brown's acceptance speech on Fox News

Postby thedude » Thu Jan 21, 2010 4:40 pm

jfg wrote:I only meant that multiple companies are able to save money and very rarely do those cost savings get passed on to the customer. I think anybody can agree with that, and I don't see how tort reform would be any different. What is the government going to do? Say that they have to pass it along to the consumer? Kind of like the government told banks to stop giving bonuses and taking extravagant trips? Costs are cut every day and while it would be easy to give the consumer a break it almost never happens.


It is simply Microeconomics. And yeah Adam Smith would disagree with you that savings do not get passed along to the consumer.

In the free market (which the US economy is until the government starts messing with it), decreasing costs for a company means the supply curve will shift down. When the supply curve shifts down more of a product is offered at a cheaper price to consumers. Why? because every firm can increase their market share by lowering prices and if any given firm does not lower prices it will lose its market.

Ex: Assume Health Co and Insurance Corp both have the same costs. Health Co is charging 105 for its plan, and Insurance Corp can offer the same plan for 104, Insurance Corp will offer that plan for 104 because all consumers would like to save money and will buy the cheaper Insurance Corp plan. Therefore Health Co will be forced to lower its prices until it charges the same as Insurance Corp. This price competition will continue until the optimal price and services are offered on the market. If tort reform occurs and the insurance companies can still lower prices they will.

In the free market, companies economic profits always equal zero. Obviously the health care market is more complex and there are other competing factors at play, but the basic concept that private companies will cut costs in order to compete remains true.
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Re: Scott Brown's acceptance speech on Fox News

Postby jfg » Thu Jan 21, 2010 4:52 pm

I understand the economics, but understanding and seeing it are two different things. I see costs going down as technology makes things cheaper, and more and more workers get laid off but I don't necessarily see prices lowering. I do see executives getting raises and bonuses. In big America- mind you that there still are plenty of small businesses trying to make economy 101 work for them, but corporate America is playing by their own rules, I don't see basic economics in anything they do. I see buy low, sell at a profit and pass all of that profit to the few.
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Re: Scott Brown's acceptance speech on Fox News

Postby Madison » Thu Jan 21, 2010 5:14 pm

Fade2White12 wrote:
Madison wrote:and even go so far as to take over the insurance industry if necessary.


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Sorry. :-b I did say I didn't like that option though. :-b

Mookie4ever wrote:Sorry bout that. I had no idea about this post and asked you what you meant by this:

Madison wrote:
jfg wrote:I've seen very few cases in America where businesses are able to do things cheaper and pass those savings along to the consumer.


I'd argue the opposite and say most businesses could do things cheaper and pass that savings on to the consumer. Without a doubt, the health industry certainly could.


Got a migrane coming on causing my left eye to throb like crazy and my head to pound, so I dunno what's going on :~( . All I can say is that I know the healthcare industry from top to bottom is severely overcharging people (there's a really crass 4 letter word I'd rather use that begins with the letter "R") and if they wanted to, the could bring their prices down to something fair and reasonable and still make a solid profit. Due to greed, they aren't doing that, and the entire country is suffering because of it.

And things are so bad that Obama and the Democrats were willing to destroy themselves to pass the healthcare legislation. I give them some credit for that, but at the same time, I think they are all quite unintelligent if they truely believe forcing health insurance on everyone will fix anything at all, because it simply won't and it would bankrupt the middle class at the same time, making things even worse.

So "YAY! Yay!", the bill is dead.
Which old bill?
The wicked bill!
"Yay! Yay!" the wicked bill is dead!

:-b
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Yes doctor, there will be blood.....
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