Friday, July 24, 2015

Milton Friedman, John Kenneth Galbraith and Obamacare


This is from  Milton Friedman's, "From Galbraith to Economic Freedom"

The relationship between size and government control, in my opinion, is the reverse of that which Galbraith presents. He presents a picture in which the large enterprises grow and then take the government in to help them plan. Now there is no doubt that business enterprises will in fact try to use the government for their purposes and often are successful in doing so. Adam Smith wrote that two centuries ago. But the relationship in the United States has been that government measures have promoted the concentration of industry and the growth of large enterprises; and in the absence of the government measures that need not have happened at all. So I don’t think there is any necessity for the Galbraithian picture, either for the present or for the future.

Cause and effect are difficult to prove. I'll just say it's seems more than coincidental there is a merger spree in the insurance industry as well as the hospital industry since the passage of Obamacare. One of the smarter hedge funds bet on that very thing:

Glenview Capital Management LLC made a bold decision when President Barack Obama’s health-care overhaul was rolling out: Bet on it.

The result has been one of the most successful hedge-fund wagers in recent years. New York-based Glenview has realized and paper gains of more than $3.2 billion since it started making investments in hospitals and insurers four years ago, according to a Wall Street Journal analysis of securities filings.


No comments:

Post a Comment