Obama's First Economics Lesson

by: Vitaliy Katsenelson, CFA

Mr. President is facing the first economics lesson of his presidency. According to a New York Times article Mr. President is trying to figure out what to do with shortage of doctors. He said “we are not producing enough primary care physicians”.

Education is expensive, it consumes a lot of time and the payoff is not worth the trouble. This is a very early wake up call on socializing medical care in the US.

The economics lesson? When you lower the price of something you get less of it. This is a good preview of what will happen to those little chemical compounds we call legal drugs that save millions of lives every day if you start instituting price controls to “protect” people from “evil” pharmaceutical companies.