Writing at his regular Beat the Press blog (7/8/09), economist Dean Baker says that the New York Times' David Leonhardt "rightly complains that President Obama's health care plan does nothing to change the incentives for doctors to prescribe expensive forms of care, even when there is no evidence that this care will lead to better outcomes." But "Leonhardt fails to take the extra step and ask why this care is expensive":

In most cases, the care is more expensive because it involves expensive medical equipment and drugs, with a healthy dash of high doctors' fees as well. The reason that medical equipment and drugs are expensive is that they have government-granted patent monopolies. In the absence of such monopolies, medical equipment and drugs would be cheap in nearly all cases. The huge patent rents that these monopolies allow medical supply companies and drug companies to earn also give them incentive to mislead doctors and the public about the benefits of their products.

The patent monopolies are justified as being necessary to support the development of new equipment and drugs; however, there are more efficient alternatives. However, that would require bigger thinking than NYT columnists are yet prepared to undertake.

This being far from a new story, the Times really has no excuse for ignoring the factors described by Baker, except maybe that they're corporate media reporting on corporate medicine--and don't worry, Baker tells us that "the WaPo has the same problem." See FAIR"s magazine Extra!: "Media on Medicare: Don’t Mess With Success—or Corporate Profits" (1–2/07) by Julie Hollar and Jim Naureckas.

While the U.S. economy's current ills have proven "that the people who run Citigroup, J.P. Morgan, Wells and other major financial institutions may not be the sharpest knives in the drawer," Dean Baker (Beat the Press, 2/18/09) wants to know, "How much do taxpayers have to cough up to make up for their ineptitude?":

David Leonhardt's (February 18 New York Times) discussion of housing bailout plans never seems to consider the possibility that we would just let large numbers of foreclosures occur and let the banks eat their losses. Yes, many, if not most, of the banks will go under. So what? Why should taxpayers support convoluted schemes to protect these bank executives and their shareholders from their own ineptitude. We can protect homeowners by simply giving them the right to stay in their home as renters following foreclosure. It's a simple, costless and bureaucracy-free solution, but it screws the banks. So, the folks in Washington and the media apparently are not interested.

Listen to FAIR's radio show CounterSpin: "Dean Baker on Stimulus Package" (1/30/09)

Today New York Times business columnist David Leonhardt (12/10/08) weighs in on the $73-an-hour autoworker. His verdict is somewhat mixed—the Big Three do have to pay the so-called legacy costs that are part of this calculation, but it's misleading to conflate that with current earnings of autoworkers:

So what is the reality behind the number? Detroit's defenders are right that the number is basically wrong. Big Three workers aren't making anything close to $73 an hour (which would translate to about $150,000 a year).

And he adds a little media criticism:

The Big Three built up a huge pool of retirees long before Honda and Toyota opened plants in this country. You’d never know this by looking at the graphic behind Wolf Blitzer on CNN last week, contrasting the “$73/hour” pay of Detroit’s workers with the “up to $48/hour” pay of workers at the Japanese companies.

One of Leonhardt's main points, though, is that the chatter about union wages is mostly irrelevant to the bigger problems of the Big Three (emphasis added):

So here's a little experiment. Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That’s roughly the gap between the Big Three's retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour--the same as at Honda and Toyota.

Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800. That’s because labor costs, for all the attention they have been receiving, make up only about 10 percent of the cost of making a vehicle. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies, analysts at the International Motor Vehicle Program say.