A few weeks ago I finished the book Catastrophic Care: Why Everything We Think We Know about Health Care is Wrong by David Goldhill. In 400 pages he shed more light for me on our health care system than the hundreds of hours I've spent informing myself about health care policy. In fact, the book was so illuminating, after reading it I felt dumb for having previously wasted so much time. If nothing in our health care conversation today makes sense to you and you wish it did, you have to read this book.

One of Goldhill's key devices is to place the language and values of the health care industry on a metaphorical island. He constantly talks about life "on the island" and "on the mainland." For example, on the island, nobody ever talks about prices, they only talk about costs. This is not a subtle nuance. Prices, of course, are related to costs but, in a true competitive marketplace -- one where people, not a third party, actually pay directly for the goods and services they consume -- we never talk in terms of costs. Only prices.

Does it really matter to you how much it costs the grocery store to provide that twelve pack of your favorite beverage? Of course not. It's only matters to you -- someone living on the mainland -- what the price is to you. Price is how you determine your preferences among competing items. Profit is how the market receives feedback on those preferences. High prices invite substitution. High profits invite competitors. This is all basic and obvious to us on the mainland.

Which is why, on the healthcare island, the conversation is about costs. Your preferences don't matter, except where they are aligned with the objectives of those on the island. Substitution doesn't matter; there are no competing services. Obscene profit margins don't invite competitors; they invite consolidation. Justifying costs to third party payers, instead of prices to patrons, is the name of the game. It's a bizarre world that doesn't make any sense to people like Goldhill when they take a critical look at it.

Last week, Bloomberg's Noah Smith wrote an article titled "The U.S. Has Forgotten How To Do Infrastructure" that asked a lot of questions that would get us to a Goldhill like analysis of our infrastructure approach. Just like on Healthcare Island, on Infrastructure Island we have our own way of talking about things. And we never talk about prices, only about costs. And as Smith suggests, costs go up and nobody seems to understand why.

He goes through and dismisses all of the usual suspects. Union wages drive up infrastructure costs (yet not true in countries paying equivalent wages). It's expensive to acquire land in the property-rights-obsessed United States (yet countries with weaker eminent domain laws have cheaper land acquisition costs). America's too spread out or our cities are too dense (arguments that cancel each other out). Our environmental review processes are too extensive (yet other advanced countries do extensive environmental reviews with far less delay). I concur with all these points, by the way.

Smith concludes with this: