One way to understand the difference between the podium and not. These guys are all good.
Sunday, February 28, 2010
Fractions of a Second: An Olympic Musical
Why Healthcare reform is not happening.
Change in healthcare is difficult because voters want free care for routine costs(which they expect to pay) and do not value treatment for catastrophic costs (which they do not anticipate).
Taken from the comments.
Taken from the comments.
Their main voting constituency is middle class (or higher) white families in the suburbs, particularly the husbands and fathers in that constituency. They don't face the raft of problems that others do in our society. But one big problem that they do face is that something beyond their control happens to someone in their family. Medical catastrophes have to rank high on that list...
Voters grossly underestimate the risk that any calamity will happen to them. (As fully documented by market surveys regarding the great under-purchasing of private long term care insurance.)
And do not believe that any party's politicians would fix this private-sector insurance gap until you look at Medicare: It provides first-dollar coverage for all kinds of routine procedures -- but not for catastrophically expensive long-term nursing home care, so if you need that in your old age your life savings, home, everything can go *poof* gone.
I went through this personally with my father, who suffered a series of strokes in his Medicare years. If he'd lingered as the doctors expected, everything he'd saved during a successful career would've been wiped out and my mother would've been left with nothing for the rest of her life (absent a major amount of costly legal maneuvering).
Imagine auto insurance working this way, paid for by the govt: It pays entirely for gas, oil, tires, all normal repairs (maybe even buys your car for you) all "free" to you -- but if you have a head-on and go through the windshield with the car destroyed, you get nothing.
What would the result be? Well, over-demand for all kinds of routine auto services, destruction of free market provision of routine items, government-set pricing for them, "gate keepers" administratively trying to restrict ever-rising consumption costs, pending rationing ... all while auto calamities go completely uncovered! ... Sound familiar?
Economically that would be ludicrous, make no sense at all. And it is every bit as ludicrous and senseless for Medicare care as for "Autocare" - only more so, for so much more is at stake.
But politically this arrangement makes perfect sense.
Voters know that after they retire they are going to have all kind of routine medical costs, exams, prescription drugs, and everything else. They don'tbelieve that they will spend years in a nursing home. So they want their out-of-pocket bills covered, "give us that!" And that's what the politicians give them.
This is the problem with politician-designed health care. It doesn't provide what efficient health care requires, it provides what gets politicians votes even if it is destructive to their health care system. Politicians enacting health insurance rules aren't any more responsive to sound health care economics than politicians enacting rent control rules are responsive to sound housing policy or politicians enacting tariffs and protectionist quotas are responsive to sound trade economics. They are responsive to votes . That is all.
If Krugman really is so concerned about lack of catastrophic care, why doesn't he complain about Medicare -- which is already 100% run by the govt (and mostly designed and run by his party too)?
At "the summit" Obama was incredulous when some Republican said he wanted catastrophic care instead of routine costs covered. Obama's reply basically was: "Well you're rich, so routine costs don't matter to you.". Nowthat was a politician thinking! "Hey, millions of voters want their routine costs covered! What's wrong with you?"
Yet it is exactly because my father wasn't rich that he and my motherneeded catastrophic care insurance -- instead of first-dollar coverage, which they could easily have afforded out-of-pocket.
But the politicians weren't going to give him what he needed, they were going to give only what gets them votes.
You succeed as a political party when you craft policy that serves your constituents.
No. You succeed as a political party by getting votes. Have the politicians of NYC served their constituents well via 65 years of rent control rules? (See: market rents, new housing construction, South Bronx). But renewing those rules always gets them re-elected! Is that not political success?
So, why would politicians be any more concerned about catastrophic care in the private market than in Medicare -- which has been the politician's own responsibility for 40 years?
Look, for anyone for whom "pre-existing conditions" is the big issue there is an easy fix: make health insurance portable so once you have it you can keep it if you leave your employer. That would cover 90% of cases, once a person has insurance pre-existing conditions are never a problem again. The US is the only nation that doesn't have portable health insurance. You keep your auto insurance if you change employers. It would require some changes, but nothing radical -- compared to restructuring one-sixth of the entire economy it would be as nothing. Simple and sensible enough so that in the polls all the masses would understand it and support it (so different from today).
Why didn't they propose that? Guess.
Health care politics is just like rent control politics, about getting votes, not sound policy.
We Can’t Wish Away Climate Change
Al Gore on climate change.
Money quote:
"hubristic “bubble” of market fundamentalism"
And on the state of political discourse:
showmen masquerading as political thinkers who package hatred and divisiveness as entertainment. And as in times past, that has proved to be a potent drug in the veins of the body politic. Their most consistent theme is to label as “socialist” any proposal to reform exploitive behavior in the marketplace.
And on the state of political discourse:
showmen masquerading as political thinkers who package hatred and divisiveness as entertainment. And as in times past, that has proved to be a potent drug in the veins of the body politic. Their most consistent theme is to label as “socialist” any proposal to reform exploitive behavior in the marketplace.
Saturday, February 27, 2010
Unofficial Problem Bank List increases Significantly
A list of the problem banks. Now over 600.
And in graphic form.
China’s Industrial Heart Facing Acute Shortage of Factory Workers - NYTimes.com
This is not a labor shortage. This is a precursor to labor inflation. Conditions have improved in the countryside and the low wages and poor working conditions of the Pearl River delta do not look as good as before.
Thursday, February 25, 2010
How to make yourself happier
It could have turned out a whole lot worse..
Classic Wall Street
Classic Goldman. Shorts were bad when they were selling GS or MS, but they are good for the market.
On speculative trading
One summary of the debate on speculative trading. The value of my career flashes before my eyes.
http://ataxingmatter.blogs.com/tax/2010/02/speculation-and-finance-good-for-you-part-iii.html
Wednesday, February 24, 2010
Is the rain getting you down?
Two gloomy prospects for economy.
Inner Workings � Blog Archive � Dave’s Top 10 Reasons to Fade the Recovery (It’s Not a Business Cycle!)
And Martin Wolf.
Inner Workings � Blog Archive � Dave’s Top 10 Reasons to Fade the Recovery (It’s Not a Business Cycle!)
And Martin Wolf.
Japan – Past the Point of No Return
With an aging society with declining population and declining savings rates, Japan does have some intractable problems. Still not a bad place to live. There is a weird creativity everywhere.
Tuesday, February 23, 2010
The Afghan Mask Slips
What are we doing in Afghanistan? This is not a "good war".
"So explain something to me: Why does the military of [the US] a country convinced it's becoming ungovernable think itself so capable of making another ungovernable country governable? What’s the military’s skill set here? What lore, what body of political knowledge, are they drawing on? Who do they think they represent, the Philadelphia of 1776 or the Washington of 2010, and if the latter, why should Americans be considered the globe’s leading experts in good government anymore? And while we’re at it, fill me in on one other thing: Just what has convinced American officials in Afghanistan and the nation’s capital that they have the special ability to teach, prod, wheedle, bribe, or force Afghans to embark on good governance in their country if we can’t do it in Washington or Sacramento? "
Monday, February 22, 2010
At what age do children recognise the difference between sarcasm and irony?
Important to distinguish between sarcasm and irony. I think that this is too fine a line. Children and some cultures do not appreciate either irony or sarcasm.
What the PBoC cannot do with its reserves
Good discussion of the RMB. The most interesting concept is that the Central Bank does not lose money when they revalue.
Sunday, February 21, 2010
Petraeus: No Need for Extreme Interrogation - WSJ.com
Petraeus says no to torture. It goes against the "concept of living our values". Unfortunately this probably will not shame Cheney. There needs to be a criminal trial.
On DADT: "After a period of time you say 'how's the guy's ...shooting".
Carried Interest
Carried interest is one of the most outrages examples of crony capitalism. Private equity and hedge fund managers reinvest ordinary earnings tax free and pay at the capital gains rate only when they sell positions in their funds.
Thursday, February 18, 2010
In Defense of Much, But Not All, Financial Innovation - Brookings Institution
A defender of Financial Innovation. I would like to hear Volker's response. A good summary of the arguments and nice list.
And the original article:
In Defense of Much, But Not All, Financial Innovation - Brookings Institution
Wednesday, February 17, 2010
Tuesday, February 16, 2010
Economics of Contempt: The Labor Market: Crawling Out of a Deep Hole
GS is bearish about the future of the job marker.
Unwinding Global Imbalances
One of my favorite metaphors for the U.S - China relationship: a vendor finance scheme. These things can and do go wrong.
Coordinated Call for Financial Reform
Do not expect this to get Congress to act. The focus is entirely on how to make the other side look bad for 2010 elections not on legislation.
Saturday, February 13, 2010
"I'm shocked, shocked to find that this is going on in here"
I am shocked that the WSJ considers this front page news.
China Sees Growth Engine in a Web of Fast Trains - NYTimes.com
Train envy. Political discourse in America makes this kind of project impossible. However if we want to invade countries or build jet fighters, we can agree. The surge in Afghanistan could pay for a good part of this.
Friday, February 12, 2010
They Replaced Horses, Didn't They?
Many of the jobs lost are not coming back. Not in the U.S. and not even in China. New Chinese plants use as much if not more technology than those in the U.S. This is one reason why the unemployment rate for 24-55 year old men is high. "In November, 19.4 percent of all men in their prime working years, 25 to 54, did not have jobs, the highest figure since the Bureau of Labor Statistics began tracking the statistic in 1948. "
Thursday, February 11, 2010
Does building Schools help
What are the necessary complementary inputs?
- Commitment of the community to maintain
- Teachers
Tuesday, February 09, 2010
Their Rejection, Our Loss
Why is there no women's ski jumping event? The women might beat the men.
In Memoriam: In Life And Death, A Scientist Brings Out The Best In Others - Science News
What is the secret to a great relationship?
The "Michelangelo Phenomenon where
close partners are interpersonal artists, sculpting one another’s strengths and weaknesses so as to bring out the best in each other.
Causes of the Housing Bubble
The comparison with Canada is useful. There was no bubble because of higher lending standards, mortgage insurance, full recourse mortgages. Better and simpler regulation is one solution. Interesting that monetary policy does not come into consideration.
Texas Hedge
Money quote: "hedge against their buying by buying". Big momentum investors can contribute to increased volatility in the commodities markets.
Newshots.
A silent doubter about the future of US French defense cooperation.
Monday, February 08, 2010
Women Taking Over the Workforce
This should not be a surprise. Especially given the growth of the service economy.
Classic
Classic headline which describes the state of our oligarchy. I am not sure what the Wall Street crowd expected when they supported a community organizer from Chicago. On the other hand, most progressives are disappointed too.
Saturday, February 06, 2010
A Bubble in Search of a Pin
The Big Picture � Blog Archive � A Bubble in Search of a Pin:
David Rosenberg gives some somber thoughts on the latest employment numbers. The U.S. is looking more like Japan.
"the reality is that the level of employment today, at 129.5 million, is the exact same level it was in 1999. And, during this 11-year span of Japanese-like labour market stagnation, the working-age population has risen 29 million. Contemplate that for a moment; fully 29 million people competing for the same number of jobs that existed more than a decade ago. That sounds like pretty deflationary stuff from our standpoint.
“Not only that, but consideration must be taken that in 2009, we had a zero policy rate, a $2.2 trillion Fed balance sheet and an epic 10% deficit-to-GDP ratio. You could not have asked for more government stimulus. Yet employment tumbled nearly 5 million in 2009.”
Finally, a very sad chart, courtesy of David. Those in the 25-54 year-old male category have seen their total number of jobs fall back to the level it was in 1996. Fourteen years later, and the “breadwinners” who are supposedly in their prime have seen an almost 10% drop in employment."
“Not only that, but consideration must be taken that in 2009, we had a zero policy rate, a $2.2 trillion Fed balance sheet and an epic 10% deficit-to-GDP ratio. You could not have asked for more government stimulus. Yet employment tumbled nearly 5 million in 2009.”
Finally, a very sad chart, courtesy of David. Those in the 25-54 year-old male category have seen their total number of jobs fall back to the level it was in 1996. Fourteen years later, and the “breadwinners” who are supposedly in their prime have seen an almost 10% drop in employment."
Wednesday, February 03, 2010
Tuesday, February 02, 2010
Monday, February 01, 2010
The best way to cut the Budget Deficit
We need to rethink our strategy of worldwide military domination and concentrate more on national defense.
Why are American troops in Japan and Germany and hundreds of other countries?
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