THE EIGHTH BATCH OF SHORT RANTS

THE REPORTED RISE IN PRODUCTIVITY

The administration takes great pride in announcing the meteoric rise of American productivity last month. Eight percent annualized. Miraculous, they say.

Well, maybe.

Six weeks ago I got a clarification of coverage from my insurance company. I get one or two of these a year. It's basically a list of procedures that are no longer covered. Last month I got a notice that my insurance rates were going up by a thousand bucks a year. I got one of these last year as well.

Let's assume this is happening to everybody. Let's assume half the people in the country are insured. In 2001, the per capita GDP was about $27,000. If the insurance companies take in an extra thou from each insured person and don't hire anybody new and don't provide additional services, then national productivity goes up by 1.85% due to the increase in medical insurance alone. The government reports an increase in prosperity even though I have less money for food, less money for shelter and less money for clothing AND less medical coverage than I had last year. Not only that, but the fact that I now have less coverage boosts the productivity number even more, since the insurance companies are providing less product while incurring the same expenses.

On paper we look more prosperous, but in actual fact we have less of everything.

RTJ -- 12/06/03

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