Exceptional ,yes. Exceptionally wrong. Which is connected with our  misunderstanding of how our system works.

Almost alone in the "developed" world the US entrusts medical care-that is to the say our lives- to the Market. As Arnold Relman notes( July 2 New York Review) in 1963 the Nobel Prize winner Kenneth Arrow made the definitive argument why that doesn't work.

Quoting Relman ,quoting Arrow:

". medical care cannot conform to market laws because patients are not ordinary consumers and doctors are not ordinary vendors * ......patients must rely on physicians in ways fundamentally different from the price-driven relation between buyers and sellers in an ordinary market....contrary to the assumption of anti trust law, market competition..cannot  ...lower medical prices. And since physicians influence decisions.far more than patients...health costs need to be controlled by forces other than the market "

(As they pretty much were when Arrow wrote at a time  when professional standards,a still progressive tax system, and a non litagatory consensus meant we had reasonable health care, reasonably priced.)

How does it happen that we get this so wrong?

Remember Ann Richards comment that G.H.W.Bush was born on third base and thought he'd hit a triple ?  Something like that applies to all of us..

 We occupy a space-essentially a continent- so endowed with everything required for a prosperous country  that it takes extraordinary efforts not to have a society in which everyone lives well. We've made those efforts(think Globilization and a non progressive tax system)  and consequently  a significant proportion of our population is- unnecessarily-  poorly fed , poorly housed and unemployed.And scorned for their misery which is attributed to their personal failings rather than being seen as the result of the system we've put in place.

We understand ,dimly, that the Fed follows a policy intended to ensure that unemployment will not fall below 5% but nevertheless scold those included in that unfortunate 5% for not making the effort that would allow them to get a job at the expense of someone else who would instead join that 5%.

Even more wrong headed  we-or at least intelligent conservatives (forget Limbaugh,Coulter and Co,-think Friedman , Kristal, Brooks and Bernanke)-  perversely misidentify these failures of our system as causes of the residual benefits of our fortunate location their philosophy has not yet blighted..

We've had greatness thrust upon us . And we ducked. 

*Kenneth J. Arrow " Uncertainty and the Welfare Economics of Medical Care" The American Economic Review December 1963

In today's Times Norris ,incredibly, claims that Wall Street bonuses didn't cause this crisis because they were largely in the form of stock options that would become worthless if the bank failed.

Let's assume a CEO is asked to authorize a CDS with a potential profi whicht  would ensure he'd qualify for a bonus but a non- trivial probablity of a future loss which  could break the bank.How is he apt to rule if his potential bonus is

A.  $10,000 in cash?

B   $100,000 in stock options?

C.  $5,000,000 in stock options?

D.  $50,000,000 in stock options?

Answers

A. Turn it down.

B. Ditto.

C. Maybe

D. Go for it.

The essence of a Wall Street job is not avoiding risks. It's taking them.When the potential personal pay off exceeds the potential personal risk.Big bonuses justify taking bigger risks than smaller bonuses.