An interesting article by WSJ’s David Wessel discusses the following diagnosis put forth by NYU economist Paul Romer:
“Two big sectors of the U.S. economy have been on steroids: finance and health care. If anything is crowding out more productive activities, it's them, as Mr. Romer argued in a recent National Academy of Sciences lecture.
The bloated financial sector—all those brains lured by big bucks who might otherwise have been employed in science, software, engineering or other fields—has harmed the U.S. economy more than any of our post-World War II communist adversaries did.
The American health system costs more per person than any other, but isn't delivering the world's healthiest people. The U.S. isn't getting its money's worth from either sector.
Why have they grown so big? Mr. Romer has a theory: Profit-seeking players in finance and health care have captured Congress, resisted regulation that would curb their excesses and exploited antiquated rules and policy for private gain.”
Paul Romer's full lecture (referenced in the WSJ article) can be viewed here:
http://fednet.net/nas051011/
Paul Romer's full lecture (referenced in the WSJ article) can be viewed here:
http://fednet.net/nas051011/