Oh, I forgot the first half of the headline: “Rick Santorum Tells Sick Kid.”

I came up with my own headline: Media prefers politicians to lie to sick kids.  After all, lying to sick people is perfectly acceptable.

This is so biased a headline I think liberals would agree with conservatives that this is slanted against Santorum.  The story is strongly framed against Santorum, and despite the allowance to explain himself in the article, the frame in which his words are quoted is so strong that it hardly makes a difference what Santorum says, he can’t win an uphill battle.

Overall, I agree with Rick Santorum.  The market does, on the whole a good job pricing millions of products so that scarce resources in the world are allocated to the greatest consumer satisfaction.  That’s how the free market works, and the profit-motive–“greed“–is an overpowering incentive to innovate and create goods others want to use.  To restate this specifically, the desire to be well off causes men and women to spend countless hours in the library lonesomely poring through books as the youthful years of their lives go by so that they may learn things like chemistry and biology so they can one day work on developing medicines and drugs that will help people later on.  The desire to be financially successful in life causes people to invest in companies that need to offer pay with adequate incentives for these chemists and need to buy materials for medicines and also need to cover the costs of risks that thousands of drugs fail to make it to market to get payed for.

When stated that way, the “obscene” profits don’t seem as bad.  I am very thankful that someone decided to become a chemist and someone decided to risk money to fund medicinal research.  They don’t do those things for free, either.  The prices they charge are, for the most part, due to supply and demand, the basic principles of economics.  I’m fine with a sick kid learning some economic truths because his mom wanted to use him as a sympathy prop.  What kind of mother drags her sick son to show him off to a presidential candidate just to score sympathy points???

To speak to her problem with high medicine prices, is it necessary for the government to intervene with bringing down medicine prices?  A quick mentioning of other possibilities will show that some people are refusing to think about problems in different ways–which is really the main source of bad problem-solving.  For instance, charities and churches can help defray costs of medicine in individual circumstances–alas, some people don’t want to be religious at all, or accept charity (unless other people are forced to give to the charity–government).  People can volunteer with trial treatments that companies are still experimenting with before release.  And over time prices of goods generally fall in real terms: microwaves can cost as little as three hours of labor today, unlike during the ’80s when they a moderately larger percentage of daily income.  As products become more demanded, the incentive for producing them lures companies into supplying the products which increases competition which decreases prices.

There’s more than one way to skin a cat: the government is just the easiest, thoughtless way to do skin it, though.

Getting rid of markup prices:

NEW YORK (AP) — J.C. Penney is permanently marking down all of its merchandise by at least 40 percent so shoppers no longer have to wait for sales to get bargains.

Penney said Wednesday that it is getting rid of the hundreds of sales it offers each year in favor of a simpler approach to pricing. Starting on Feb. 1, the retailer is rolling out an “Every Day” pricing strategy with much fewer sales throughout the year.

The plan, the first major move by Apple executive Ron Johnson since he became Penney’s CEO in November, is different from Wal-Mart’s iconic everyday low pricing. Unlike Wal-Mart, Penney’s goal isn’t to undercut competitors, but rather to offer customers more predictable pricing.

“Pricing is actually a pretty simple and straightforward thing,” Johnson told the Associated Press during an interview ahead of the announcement at the company’s Plano, Tex. headquarters. “Customers will not pay literally a penny more than the true value of the product.”

Penney’s plan comes as stores are struggling to wean Americans off of the profit-busting bargains that they have come to expect in the weak economy. The move is risky, though, because shoppers who love to bargain-hunt may be turned off by the absence of sales.

Recessions often cause businesses to clean house and become more competitive for the consumer dollar.  Doubling the price of clothing is nonsense and I usually wait until a good sale happens–but now I can count on “sales” being the everyday price.  Losing money is not sustainable over the long-haul, and other businesses will have to stop putting on sales that lose money or declare bankruptcy.

While they are cutting their margins, they are not completely.  All prices will be marked up slightly.  If a price is cut by 40%, you can bet it was marked up 100% from the manufacturing price.  That still means 20% markup.  For example, a suit that cost J. C. Penney $50 is marked up to $100, but now gets cut back to $60 still means they make $10 on the suit.  Given that they target the middle class, it makes sense to just cut down the markups simply because most people in the middle class don’t pay over-the-top prices on clothes (during a recession) when they know they will be on sale at least once a year.

This makes me wonder if J. C. Penney thinks the recession is far from over.  After all, businesses don’t remake strategies for brief, minor recessions (unless they were so bad they would fail during the economic hiccup).  This sort of plan makes me think that their economists and analysts view the recession as permanently altering spending habits–no more of impulsive buys on huge markups.  It also seems like a good strategy to eliminate millions spent on weekly ads and changing sale prices every month.  It creates certainty and rapport with customers, just like Walmart has created a reputation for cheapest prices.  It also gives them a jumpstart on the competition; despite what people say, business is about beating the competition, and lowering prices without lowering quality without losing money is a great way to win.

And the clearance rack will still be around.