Economic News

Berkshire Hathaway’s Vice Chair Endorses Single-Payer Medical System

“Having a basic level of care for everybody with no insurance aspect as a right I think is a good idea.” — Charlie Munger

Charlie Munger, Warren Buffett’s long-term partner in Berkshire Hathaway Inc. (NYSE: BRK.B), usually offers a counter to Buffett’s social democrat policy recommendations, such as higher progressive taxes.

But Munger, who says he is “not a normal Republican,” shocked people by endorsing a “single-payer” medical system similar to what operates in all of Europe and Canada.

A single-payer system sounds appealing — citizens get “free” medical services, including expensive surgery, which is then paid for by the government. In other words, the taxpayers cover the expense.

As appealing as free medical care may sound, it is a clear violation of the A&W principle. A stands for accountability, which would have the user pay. W stands for the welfare principle, to aid those who need help, but not assist those who don’t need help. Should we subsidize and pay for the medical bills of Charlie Munger and other wealthy people? I don’t think so.

Once a policy violates the A&W principles, the market stops working efficiently. Doctors have poor incentives. You end up with waste, fraud and excessively higher costs… and you overuse the medical system when you offer valuable services like medical services, technology and equipment for free, you are asking for trouble — long lines, shortages, poor services and a slowdown in advancing medical technology. This is what has happened in Canada and Europe. If you want a system that works, see Singagore’s Medisave program, which Bloomberg calls the world’s most efficient medical system. Read about it.

Mark Skousen

Mark Skousen, Ph. D., is a professional economist, investment expert, university professor, and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College, and is a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology, and other Fortune 500 companies. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter. He also is editor of four trading services, Skousen TNT Trader, Skousen Five Star Trader, Skousen Home Run Trader, and Skousen Fast Money Alert. He is a former analyst for the Central Intelligence Agency, a columnist to Forbes magazine (1997-2001), and past president of the Foundation for Economic Education (FEE) in New York. He has written articles for The Wall Street Journal, Liberty, Reason, Human Events, the Daily Caller, Christian Science Monitor, and The Journal of Economic Perspectives. He has appeared on ABC News, CNBC Power Lunch, CNN, Fox News, and C-SPAN Book TV. In 2008-09, he was a regular contributor to Larry Kudlow & Co. on CNBC. His economic bestsellers include “Economics on Trial” (Irwin, 1991), “Puzzles and Paradoxes on Economics” (Edward Elgar, 1997), “The Making of Modern Economics” (M. E. Sharpe, 2001, 2009), “The Big Three in Economics” (M. E. Sharpe, 2007), “EconoPower” (Wiley, 2008), and “Economic Logic” (2000, 2010). In 2009, “The Making of Modern Economics” won the Choice Book Award for Outstanding Academic Title. His financial bestsellers include “The Complete Guide to Financial Privacy” (Simon & Schuster, 1983), “High Finance on a Low Budget” (Bantam, 1981), co-authored with his wife Jo Ann, “Scrooge Investing” (Little Brown, 1995; McGraw Hill, 1999), and “Investing in One Lesson” (Regnery, 2007). In honor of his work in economics, finance, and management, Grantham University renamed its business school “The Mark Skousen School of Business.” Dr. Skousen has lived in eight nations, and has traveled and lectured throughout the United States and 70 countries. He grew up in Portland, Ore. He and his wife, Jo Ann, and five children have lived in Washington, D.C.; Nassau, the Bahamas; London, England; Orlando, Fla.; and New York. For more information about Mark’s services, go to http://www.markskousen.com/