Map of life expectancy at birth from Global Education Project.

Saturday, April 16, 2005

It Ain't Just Oil, Stupid

I've been reading the business pages with angst lately. The stock market is heading back toward 2001, job gains are sluggish and slowing, retail sales are down, profits are down, and now the consumer sentiment survey has fallen off the table. The bow-tied brown-shoed business babblers are telling us that the economy may hit a soft patch because of high oil prices.

Yep, mebbe so but that isn't the whole story. Right now it's that time of year when employers have to make a new deal with health insurance plans, and workers everywhere are getting bad news. Very bad news. The share of the monthly premium they have to pay is going up, yet again, and not only that but the deal they're getting is worse. Higher co-pays. Substantial charges -- like $150 -- for "surgical" procedures like a needle biopsy, removal of skin lesions, or colonoscopies; emergency department use, even if it really was an emergency; hospital admission. If you have chest pain, you need to decide -- can I afford to pay fifty bucks just to make sure I'm being paranoid? If it's the end of the month and we need groceries, and I going to die for it?

This is a substantial blow to people's incomes. It registers as a pay cut, because it means there is less money in every check. And then you have to spend more of it. As far as I know there isn't any real time data on this, but I suspect it has a lot to do with slowing retail sales, declining consumer sentiment, and weak profits.

Paul Krugman has started talking about the problem, but who listens to that commie?

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