, Columnist
Market Failure Looks Like the Culprit in Rising Costs
Prices tend to rise much more than they should when buyers lack good information.
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Two years ago, I suggested that the U.S. economy is riddled with strangely high costs in key sectors of the economy. Now, more and more people seem to be zeroing in on this problem. Blogger Scott Alexander has a long, excellent rundown of high costs in five areas -- K-12 education, college, health care, infrastructure and housing.
He’s right. Americans pay much more for a university education than do people in Europe or East Asia. They pay about twice as much for health care, even though the quality is about the same. And the U.S. pays about twice as much for infrastructure, again without any clear difference in quality.