These types of boards would be a lot more fun if there were more discussions with this sort of tone and less name calling contests between bomb throwers on the right and left.

Still, I have to disagree with you. If a factory becomes more productive, there is a possibility that labor wages will go up. The real driver will be competition for employment. Its not like these workers are equity holders in the company and their wages are some form of profit sharing. If the factory down the road is offering 50 cent per hour more, however, then they may have to raise their labor rates to compensate. As such, I do not see a direct relationship between increased productivity and increased labor without some other factors. For example, much of the productivity increases come from two sources. First, some piece of equipment is bought that allows the work to be performed more efficiently. A PC for example makes an Accountant more efficient if its used properly. The other likely source of improved productivity comes from logistical improvements. Better incentive structures, benchmarking of performance, inventory management, etc. While the more efficient machinery could result in a need for more training and this could make the worker more valuable on the open market, this is due as much to his increased training as anything else. Its just not clearly a productivity issue and there is not a linear relationship between productivity coming from better equipment and increased wages. Regarding the logistical improvements, I also do not see a linear relationship. Maybe a better commission structure for sales people will result in increased sales, but these sales increases will more likely come at the expense of another company in the market. Taking market share is different from creating market share. In a pure manufacturing environment, lets look at just in time inventory management. If some office worker can save the company money by reducing the time inventory sits in a factory, that does not really mean the workers are going to get any more pay for the innovation of the office worker or that the office worker will receive some pay increase directly related to the savings he created for the company.

In fact, I would say that increased productivity in a competitive market is more likely to drive down prices since companies will often use their lower cost as a means of taking market share away from a competitor by dropping prices. With lower production costs, gross margins can be maintained and profits can actually rise on larger sales volume numbers. Maybe the textbooks say it a different way, but the textbooks are not always right.

Back to the health care costs, I have to disagree again. I do not know of any doctors making less than 100,000 per year and quite a few making much, much more. There is no way you can tell me their rate increases are to make sure some auto worker does not take home more than they do.

I do know many doctors, however, and they talk to me about the rising burden of paying for insurance. Superficially the burden of paying for medical malpractice insurance. This specific cost component is the single fastest rising line item on virtually all doctor's income statements. As such, it is the single biggest reason they have to raise the prices they charge us.

You seem like a nice guy so I hate to keep disagreeing with you, but the oversimplification about the rising insurance rates being a matter of greedy insurance companies is another place we have to disagree. Let me explain the risked based pricing concept from earlier.

Insurance pricing models are similar to a big proforma. They get an idea of likely occurrences for events such as illness in health insurance by doing a statistical analysis for a very large population over a period of time. Then they segment it by factors such as "are you a smoker" or "how much do you weigh" or "what is your age" and then determine the statistical probabilities within those subgroups. Since an overweight smoker over the age of 50 is more likely to have a negative event such as heart attack or a stroke, this person will pay more for his or her health insurance. They take the likelihood of a medical event and then compare it to the likely cost of such event. Lets say 1 out of every 1,000 people with similar characteristics is likely to have a medical event in any given year that will costs 50,000. Then its safe to say a $50 per person component of your annual health insurance cost will be to cover this event.

Now that we understand how the statistical probability of events by the insured person's observable characteristics can affect the likely costs to be paid in the form of benefits, its easy to see how lawyers add to this burden by artificially increasing the forecasted costs the insurance company will have to pay out. If the insurance company expects to earn some constant level of return on investment that justifies the investor capital needed to start and grow the insurance company, then it has no choice but to raise rates as lawyers become increasingly predatory and plaintiffs increasingly look for lottery type suits that can allow them to retire early. Also, for "The Big Bad Insurance Companies" to be artificially raising prices due to greed would require a collusion between all of the Bigs that just isn't possible. The execs who run the big insurance companies would sell the mothers for a 0.25% change in market share so they definitely will not be raising prices without the other companies following along.

Now for the record, I am not against lawyers in general and I am not against a person's right to use the courts to resolve a matter. I am only against the abuses in this system that are not being addressed and the resulting "tax" on everyone's discretionary income in the form of higher prices.