The Atlantic provides this chart (hat tip: Instapundit) comparing inflation of college textbooks, medical care, and new homes with the general consumer price index:
While professors are responsible for selecting college textbooks, they are not responsible for paying for them. The students are. Under normal circumstances, a professor will never even see the price tag on the book he selects. The result is rapid inflation.
Medical care is similar. Physicians and patients may select treatments or tests but, under the current system, neither pays for them. The insurance company does. The result is rapid inflation.
In other words, incentives matter.
This is a fact that seems to be obvious to everyone except liberals.
PREVIOUSLY on liberal thought as it relates to economics:
•Centuries pass but liberalism is unchanged
•Sayet's theory of liberalism
•Given a choice between working and free money, people choose free money
•Higher taxes yield less revenue
•Homeless flock to city with generous benefits
•Student test scores improve despite school funding decrease