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Sunday, February 28, 2010

Fractions of a Second: An Olympic Musical

One way to understand the difference between the podium and not. These guys are all good.

Fractions of a Second: An Olympic Musical - Interactive Graphic - NYTimes.com

Bershire Letters

Shareholder Letters

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.


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.

Op-Ed Contributor - We Can’t Wish Away Climate Change - NYTimes.com:

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? "

Tomgram: Engelhardt, The Afghan Mask Slips | TomDispatch

Monday, February 22, 2010

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".

Petraeus: No Need for Extreme Interrogation - WSJ.com

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.


Beat the Press Archive | The American Prospect

A Trillionfold Fall in the Price of Computation

A Trillionfold Fall in the Price of Computation: Archive Entry From Brad DeLong's Webjournal

Saturday, February 13, 2010

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. "

Economist's View: They Replaced Horses, Didn't They?

Thursday, February 11, 2010

Tuesday, February 09, 2010

Their Rejection, Our Loss

Why is there no women's ski jumping event? The women might beat the men.

Their Rejection, Our Loss | By Skip Rozin - WSJ.com

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.

In Memoriam: In Life And Death, A Scientist Brings Out The Best In Others - Science News

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.

The Big Picture � Blog Archive � Canadian Housing Bubble?

Texas Hedge

Money quote: "hedge against their buying by buying". Big momentum investors can contribute to increased volatility in the commodities markets.

China Becomes Oil ETF’s No. 4 Holder, Buys SPDR Gold (Update1) - Bloomberg.com

Newshots.

A silent doubter about the future of US French defense cooperation.

France Defends Afghan Troop Pledge - WSJ.com

Monday, February 08, 2010

Women Taking Over the Workforce

This should not be a surprise. Especially given the growth of the service economy.

EconomPic: Women Taking Over the Workforce

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

How the Volcker Rule Misses the Shadow Banking System � naked capitalism

How the Volcker Rule Misses the Shadow Banking System � naked capitalism


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."