Friedman in the News

The Chicago Tribune posted an article today entitled Buffett: Health care a 'tapeworm' on U.S. economy. In this article Warren Buffet talks about how the cost of health care is eating away at the American economy. According to the article health care costs in the United States amount for 17% of our gross domestic product, while other countries only use about 9% percent of their gross domestic product towards health care costs. In the article Buffet wants health care costs to be reformed. He hopes that Congress will create a bill that reforms health care cost and not just the rest of the system, like they have done up to this point. The point that Buffet is trying to drive home is that health care costs are taking up too big of a portion of our GDP and the way to fix this problem is for Congress to create legislation that regulates how much health care companies can charge.

Milton Friedman would completely disagree with Buffet’s view of how health care cost should be decreased. Friedman believes that government should play an extremely limited role in the economy. He believes that they should be an umpire and that the government should handle the things that cannot be decided by proportional representation. In this case with health care costs Friedman would say that the reason that health care cost are so high to begin with is because there has been too much government intervention already. Friedman would argue that the health care companies and the market will choose the best price as long as the government does not interfere. According to Friedman the most that the government should do in this situation is to make sure that the health care companies are playing by the rules and if they are then leave them alone.

I disagree with Friedman’s view mostly because I don’t think that almost everything should be privatized, especially health care. I think that health care is something that everyone should have access to whether or not they can afford it. I also don’t believe that health care is necessarily something that should be making profit. That is why I think a government option would be a good idea. I also think that what Buffet is proposing is a good idea too. Health care companies should not be allowed to charge ridiculous premiums. There needs to be greater regulation or reforming of health care. Health care companies are basically betting on people’s lives and making a profit. I feel like people’s lives are not something that can be bet on and the way health care companies are making profits is outrageous. I also think that if Friedman had his way with the health care crisis we would all be in more trouble because the health care companies would have minimal regulation and would be able to charge more.

Marx in the News

Greg Burns from the Chicago Tribune posted an article today entitled Security Blanket Fraying Quickly. This article talks about how social security will begin running in the red this year. Burns addresses that fact that everyone knew this day would come, but did not expect it to come this quickly. The reason it has come quicker than expected is partly due to the recession. About 2.7 million people entered into the social security program last year. Burns predicts that Congress will not do anything about this issue, at least not until the 2012 election where it could become a big issue. Burns says that the longer Congress waits the more expense the fix for social security will be. The solution to this issue would be to increase taxes on people who are working and to cut back on benefits in the future.

The problem here is that the government is going to be taxing the younger people more and more to support the increasing amount of older people who begin taking part in social security. The government is depreciating the value of our labor in a different way than Marx originally explained. The government is depreciating our labor by taking away a disproportionate amount of taxes from our income and because there will be no money around by the time we get to the age of receiving social security. They are telling us that our labor value is not worth as much as previous generations because they are taxing us more to pay for the previous generations’ social security. They are completely deprecating our labor value because the likelihood of us every receiving social security is very small.

This estranges us from our labor because not only are we not getting paid by the labor value we add to the product but we are also paying a disproportionate amount in taxes. We are paying to take care of the previous generations but we will not be taken care of because social security is already close to running in the red and will be running in the red this year. We may not have the ability to spend like other generations have because part of our income is being diverted to take care of the previous generations. Our economy will be worse because will be wearing the burden of previous generations on our shoulder.

I understand that the solution to solving the problem with social security is not to stop the tax all together and let people who thought social security would be there retirement to fend for themselves. But at the same time should our generation be burdened with the responsibility of taking care of them when we know that we will also have to save for ourselves because social security will not be around for us? Overall, the value of our labor does not seem as valuable as previous generations because we are receiving less money because the government will begin taking out more in taxes.

Locke in the News

The New York Times posted an article entitled $100 Billion Increase in Deficit Is Forecast. This article caught my attention because any increase in the deficit during a recession is a scary but somewhat necessary idea. The article predicts that the current deficit would increase by a $100 billion bringing the total deficit to somewhere in the range of $1.6 trillion. The majority of the $100 billion dollar increase in the deficit would come from President Obama’s proposed stimulus package. President Obama’s goal behind this $100 billion dollar stimulus package is to give tax cuts to business that make new hires and create new jobs and also use some of the money for infrastructure projects. The key to the success of this stimulus package is the hope that it will create more jobs and boost the overall economy.

The thing that I found really interesting about this article is the proposed $100 billion stimulus package. I found it interesting because the purpose of the stimulus package is to create jobs. I believe that John Locke would find the idea of using money to create jobs pretty interesting. The reason I say this is because Locke believes that money represents labor. Locke believes that money has stored up labor value imbedded in it. He also thought that money is energy, specifically energy from labor. According to Locke, money only receives its value by contract and agreement between humans. Basically, money is only worth something because everyone agrees that it is worth something. And according to Locke, the value of money lies in labor.

It is interesting that the government is trying to use money to create the thing that gives it value, labor. There are two different ways that Locke could look at this situation. Our government is using the money to try and create jobs. Through Locke’s eyes it might seem that the government has the whole idea backwards. Labor is what gives the money that the government is spending on job creation any value at all. Labor is the primary factor not money.

The other way that Locke might address this idea of money creating jobs is that if money’s value is in labor then the best thing to invest money in would be labor. The government is trying to increase the value of money by creating more labor. If labor gives value to money then by increasing labor the government would also increase the value of money.

Aristotle in the News

An article entitled JPMorgan Chase reports $3.28 billion 4Q profits, that was posted in the Chicago Tribune on Friday, January 15, 2010, talks about how JPMorgan Chase made fourth quarter profits of $3.28 billion dollars. JPMorgan Chase more than quadrupled their profit in the last three months of 2009. They were able to make this much money mostly because of their investment banking section of their company. JPMorgan Chase has been losing money on loans and consumer banking but has been able to survive and thrive in the stock and bond markets.

The amount of money that banks and other companies have been making during a bad economic time is quite ridiculous. Even more ridiculous than the amount of money that these companies are making is the way that they are making it. According to the Chicago Tribune JPMorgan Chase has quadrupled their profits in the last quarter through investment banking. Investment bank is not Chase’s primary business. They are making a vast majority of their profits off of buying and selling stocks and bonds.

Aristotle would look at this situation and be appalled by the amount of money that these corporations are making. Aristotle talked a lot about the art acquisition and of it is important to the art of managing the household. Aristotle saw making money as a way to get the necessities in order to live the good life. JPMorgan Chase and every other corporation do not intend on sharing their excess profits. Aristotle would also point out the JPMorgan Chase is making most if not all of their money through the artificial art of acquisition. The reason for stocks and bonds are to help finance a corporation, but Chase has been using these stocks and bonds to turn a profit. According to Aristotle this would be an improper use of the stocks and bonds, even though the business of stocks and bonds has turned into making money solely off of trading the stocks and bonds. Chase is all about using money to make more money, which leads to a fetish for money.

Overall there are many situations in society today where the artificial art of acquisition is in place. I tend to agree with Aristotle because many of these companies, like JPMorgan Chase, are trying to gain as much money as possible and have no intention of ever sharing any of the wealth, and the only thing that profits in these situations are the companies themselves.