Bubbles Burst: Dot Com, Then Housing, Then Credit Markets. Next Up: Health Care?

As a kid, when things seemed to be going the wrong way, my father always advised patience: "the pendulum may be off to one side now but as surely as time itself, it will swing back soon enough". It has been hard to watch the economy implode these past couple of weeks. (And, at the same time, I have been preoccupied trying to be an out of state care giver for an ailing mother.) For a brief interlude anyway, blogging about such dramatic turns of events seemed inappropriate. (Although the sudden expertise I have acquired in long term care could well be a source of new commentary soon.)

As the credit markets adjust to this crisis, doesn't it seem eerily obvious that what lies ahead for health care is similar to what we have just witnessed? Are warnings that unsustainable health care cost increases producing meaningful change? Or are many of the alarmists simply using the problem to advance an agenda? At $2.2 trillion and rising, one sector of the economy simply can not so dominate GDP. Medicare and Medicaid will implode. Local governments and businesses will perish under the weight of expensive promises that can not be kept.

When the out of control health care cost pendulum begins its swing back to sanity, will it be a violent swing as we just witnessed in the credit markets? Or will it be a more deliberate movement? Will government be the dominant force for change or will markets learn by this episode and preempt government control?

One thing is certain. All the campaign rhetoric about "lowering" health care costs is about to end. (Thanks goodness!) The time has come to explain HOW!