As I mentioned previously, Obama swung by Pittsburgh to talk about money. The press coverage of the event, which I’ll admit that I found on Babbledog suggests that he thinks Pittsburgh is a model for some kind of national economic progress:
Presumptive Democratic presidential nominee Barack Obama on Thursday told invited guests and a panel of business leaders at Carnegie Mellon University that the reinvention of Pittsburgh’s industry could serve as a model for changes to the American economy.
“This American city has found new opportunity through health care, and IT; through finance and universities,” Obama said.
Most of this is good news to someone who is just moving to Pittsburgh. But here I’ll display my macroeconomic ignorance a bit.
I don’t understand how health care is a reasonable basis for an economy. My partner is a doctor and that supports my life and my childrens’ lives to some extent, so I don’t want to knock health care at all. But it doesn’t create value in some way that I’m able to understand. The sicker people are, the more treatment they need, the bigger the health care economy. That’s not good, right?
People have to pay for their health care expenses with some other activity, whether manufacturing, some kind of intellectual property licensing, or something else. I don’t understand how Pittsburgh expects the good people of Western Pennsylvania, West Virginia, and Southeastern Ohio, to keep paying for all this fancy health care on the backs of a mostly failed rust-belt economy.
Maybe someone with more macroeconomic clue can explain all this to me.
2 responses so far ↓
1 Shimon Rura // Jul 1, 2008 at 10:23
I’m not sure I qualify as having more macroeconomic clue, but I think your analysis is a bit too pessimistic for two reasons.
First, to some extent health care is a good investment in human resources. If you make better care available to a broader segment of a society, people will be able to work more, and the economy will be bigger in some sense.
Secondly, I think “health care” in these sorts of speeches usually intends to cover more than just provision of medical services to the local population. There is considerable “export business” in healthcare, whether it comes from training healthcare personnel, offering advanced procedures in a world-class facility, or auxiliary businesses such as medical devices or pharmaceuticals.
All that said, it’s generally ridiculous to expect reason in the economic predictions found in political speeches. Obama wants us to feel good about the future so he makes it sound promising. Whether or not it actually *is* promising in any given area is a separate question.
But hey, it could be worse. At least you’re not moving to Detroit.
2 todd // Jul 1, 2008 at 14:16
I didn’t think I was being pessimistic, just confused.
I’ll accept that healthcare can be part of a regional or national or even international economy. But that’s just passing the buck further. Even the claim that “f you make better care available to a broader segment of a society, people will be able to work more” just raises the question: work more at *what*?
That’s really the point of my question. Pittsburgh seems to have a health care economy and some decent high-tech companies, but I do not yet understand how the health care part of that contributes to the overall regional macroeconomy.
I’ll totally agree with the comment about politics.
Don’t be dissing Detroit. In Detroit I could have bought 20 houses for the price of the one I just bought in Pittsburgh.
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