June 17, 2012

Aung San Suu Kyi on Propinquity

By John Ballard

When someone has thought about what they are going to say for more than twenty years and finally has an opportunity to speak the results can have as much subtlety and complexity as any painting or music composition.

Thanks to the Innocence Project and other similar efforts we have been able to hear from a few people who have spent years in prison, knowing they were innocent, unimaginably trapped all that time in tragic and unjust circumstances. When they are able to comment in those few minutes of fame they get in the media spotlight I find myself listening closely, wondering how they came to terms with what happened to them, often amazed that the years have not destroyed their spirit.  

Prisoners of war and political prisoners have something in common with those prisoners, the difference being that they know with certainty that even if they die as prisoners they will survive in the memories of others who knew they were innocent of wrongdoing, victims of injustice that will eventually be revealed by history. So, too, are those maimed or killed in the name of collateral damage by the engines of war. If truth be known, the lists of innocent victims of human depravity are much longer than the official records of those to whom we dedicate monuments and commemorate as heroes, many of whom died not from any patriotic impulse but simply because they found themselves in one of those kill-or-be-killed situations that are the building blocks of war. 

So I took time yesterday  to listen to remarks by Aung San Soo Kyi, keenly aware with every sentence that she was sharing in just over half an hour a message she had taken twenty years to compose. In a way hers is another of many contemporary epistles -- and I use that word in the New Testament sense -- sent to the world by one of its saints, sharing a message of healing, insight and hope for those able to receive it.

After reflecting overnight on what she said, this part of her message sticks in my mind, particularly her use of the word propinquity, a word which I knew but which has a more complicated meaning than I suspected. 

A positive aspect of living in isolation was that I had ample time in which to ruminate over the meaning of words and precepts that I had known and accepted all my life.

As a Buddhist, I had heard about dukha, generally translated as suffering, since I was a small child. Almost on a daily basis elderly, and sometimes not so elderly, people around me would murmur “dukha, dukha” when they suffered from aches and pains or when they met with some small, annoying mishaps.

However, it was only during my years of house arrest that I got around to investigating the nature of the six great dukha. These are:

  • to be conceived, 
  • to age, 
  • to sicken, 
  • to die, 
  • to be parted from those one loves, 
  • to be forced to live in propinquity with those one does not love.

I examined each of the six great sufferings, not in a religious context but in the context of our ordinary, everyday lives. If suffering were an unavoidable part of our existence, we should try to alleviate it as far as possible in practical, earthly ways.

I mulled over the effectiveness of ante- and post-natal programmes and mother and childcare; of adequate facilities for the aging population; of comprehensive health services; of compassionate nursing and hospices.

I was particularly intrigued by the last two kinds of suffering: to be parted from those one loves and to be forced to live in propinquity with those one does not love.

What experiences might our Lord Buddha have undergone in his own life that he had included these two states among the great sufferings? I thought of prisoners and refugees, of migrant workers and victims of human trafficking, of that great mass of the uprooted of the earth who have been torn away from their homes, parted from families and friends, forced to live out their lives among strangers who are not always welcoming.

This part of her text was treated as a single paragraph, but for easy reference I have taken the liberty of breaking it into smaller segments.

There is a lot to be found here, but that word propinquity kept calling me. I've listened to enough speakers and read enough to know that writers sometimes drop words into a text as a florid gesture, embellishments intended more to make the speaker look erudite than adding substance to what is being said. Some people have a gift for language which is something like that of rap musicians who spin ideas into rhythmic poetry.

When actors or really important people do it from prepared texts, it's impressive but not surprising. Like TV scripts or tightly woven and edited movie scenes we can appreciate the product in the same way we are amazed that a hand-held portable phone can capture video images. But when an individual whose language consists almost entirely of commonplace words uses the word propinquity, it stands out like the setting of a piece of jewelry or a face in the crowd upon which a light is shining. 

This gentle woman who says "strangers who are not always welcoming" instead of "people who hate or abuse you" instinctively chooses only the most non-judgmental, easily understood language to express herself. (In many ways that is a trait of our president who makes a deliberate and usually successful effort to explain complicated or potentially inflammatory ideas in words that even a child can understand.) I notice she also says "those one does not love" instead of "those we hate." (Or pick one: despise, dislike, find disagreeable, know to be ignorant, are misinformed, etc. The list can be endless. But that phrase "one does not love" puts the responsiblity upon the lover, not the beloved.)

So I looked up the word and sure enough it is more than an linguistic embellishment.

The simple definition of the word is "nearness in place, time or relationship." But the word has more elaborate implications.

In social psychology, propinquity (from Latin propinquitas, "nearness") is one of the main factors leading to interpersonal attraction. It refers to the physical or psychological proximity between people. Propinquity can mean physical proximity, a kinship between people, or a similarity in nature between things ("like-attracts-like"). Two people living on the same floor of a building, for example, have a higher propinquity than those living on different floors, just as two people with similar political beliefs possess a higher propinquity than those whose beliefs strongly differ. Propinquity is also one of the factors, set out by Jeremy Bentham, used to measure the amount of (utilitarian) pleasure in a method known as felicific calculus.

The propinquity effect is the tendency for people to form friendships or romantic relationships with those whom they encounter often, forming a bond between subject and friend. Occupational propinquity based on a person's career, is also commonly seen as a factor in marriage selection. Workplace interactions are frequent and this frequent interaction is often a key indicator as to why close relationships can readily form in this type of environment. Etc. 

Her message to us and the world is not easy to accept but it is easy to understand. She's telling us to stop fighting and look for ways to get along. As usual, I'm not going to insult the reader by telling him what he has already read. Each of us knows at some level whether or not the lesson applies personally.
All I can say is that I report, you decide.
And if the shoe fits...you know the rest. 



June 16, 2012

Aung San Suu Kyi: Nobel Peace Prize Lecture

By John Ballard

One of the most deserving Nobel laureates of our generation officially accepts her prize twenty-one years after it was awarded. Of course the entire program is available, but this short segment will serve as a sample. Someone who has waited two decades for this moment deserves at least a few minutes of our time to hear what she has to say. For me this woman is the personification of grace and beauty. 

Link here to the text of her remarks. 

Dr. Doom -- A Global Perfect Storm

By John Ballard

He's not called Dr. Doom for nothing. Yesterday's summary of global economics from Nouriel Roubini is enough to make readers convert all investments to hard assets -- land, food supplies, a good bike and a bullet-proof vest. 

  • eurozone crisis is worsening
  • disorderly breakup of the eurozone remains possible
  • US economic performance is weakening
  • political gridlock over fiscal adjustment is likely to persist
  • China, its growth model unsustainable, could be underwater by 2013
  • slowdown in the US, the eurozone, and China already implies a massive drag on growth in other emerging markets, owing to their trade and financial links with the US and the European Union (that is, no “decoupling” has occurred). At the same time, the lack of structural reforms in emerging markets, together with their move towards greater state capitalism, is hampering growth and will reduce their resiliency.
  • tensions in the Middle East between Israel and the US on one side and Iran on the other on the issue of nuclear proliferation could reach a boil by 2013
  • Compared to 2008-2009, when policymakers had ample space to act, monetary and fiscal authorities are running out of policy bullets (or, more cynically, policy rabbits to pull out of their hats). Monetary policy is constrained by the proximity to zero interest rates and repeated rounds of quantitative easing. Indeed, economies and markets no longer face liquidity problems, but rather credit and insolvency crises. Meanwhile, unsustainable budget deficits and public debt in most advanced economies have severely limited the scope for further fiscal stimulus.
    ==►To prevent a disorderly outcome in the eurozone, today’s fiscal austerity should be much more gradual, a growth compact should complement the EU’s new fiscal compact, and a fiscal union with debt mutualization (Eurobonds) should be implemented. In addition, a full banking union, starting with eurozone-wide deposit insurance, should be initiated, and moves toward greater political integration must be considered, even as Greece leaves the eurozone. Unfortunately, Germany resists all of these key policy measures, as it is fixated on the credit risk to which its taxpayers would be exposed with greater economic, fiscal, and banking integration. As a result, the probability of a eurozone disaster is rising.
    And, while the cloud over the eurozone may be the largest to burst, it is not the only one threatening the global economy. Batten down the hatches.

There are a handful of comments as well, the best of which reads In the immortal (paraphrased) words of Jon Stewart: There can't be as many perfect storms as pundits say there are. Maybe these are ordinary storms and we're just on a shitty boat?

I'm less pessimistic than Dr. Roubini, partly because I'm an irrational optimist, but also because a Soros analysis allows for unpredictable events and human responses that psychologists call lateral thinking. 

...Robert Merton wrote about self-fulfilling prophecies and the bandwagon effect, Keynes compared financial markets to a beauty contest where the participants had to guess who would be the most popular choice. But starting from fallibility and reflexivity I focused on a problem area, namely the role of misconceptions and misunderstandings in shaping the course of events that mainstream economics tried to ignore. This has made my interpretation of reality more realistic than the prevailing paradigm.

Among other things, I developed a model of a boom-bust process or bubble which is endogenous to financial markets, not the result of external shocks. According to my theory, financial bubbles are not a purely psychological phenomenon. They have two components: a trend that prevails in reality and a misinterpretation of that trend....

And through the Soros lens the Roubini predictions can be seen as a collection of self-fulfilling prophesies. Even if most of them prove true, all that is necessary for the aggregate to be wrong is one or two unexpected surprises.




June 13, 2012

The President as CEO

By John Ballard

My friend Deborah White posed a question...

...will Democrats hold the Senate in the 2012 elections, or will we be treated (subjected!) to Republican rule in the 113th U.S. Senate?

...and I left the following comment -- 

I have this odd feeling that most people are still not paying attention even at this late date. Those of us who breathe and eat political news have all kinds of feelings in our guts, but in the end something as capricious as a high-profile news story about anything can have a tipping point impact.

For reasons that have escaped me all my adult life the creation of jobs seems to be the central aim of the presidential job description. Stuff like waging war, poking or cooling the economy, making peace or bringing the nation together in the aftermath of wars, hard times, civil strife or a national tragedy seem no longer important. The next election seems to elect a National CEO rather than a political figurehead.

I'm encouraged to see that over the last couple of days the national media have finally started to report the catastrophic loss of nearly half the middle class NET WORTH during the last two or three years -- instead of rattling on about income and the widening of the gap between rich and poor. That gap is an important indicator, along with the fact that those at the top continue to receive the biggest chunk of all available new wealth.

But the real elephant in the room is not income, but wealth -- NET WORTH. It doesn't take much imagination to see how a young family with a six-figure income may have a good income, but still be in deep debt doo-doo with a mortgage, student loans, car payments and the expenses of rearing a family. Now THAT is a serious problem, cuz that family has negative net worth.

I'm hoping that over the next two or three months the media can focus more closely on Romney's business record. His expertise is very much like that of the character that Richard Gere played in Pretty Woman. His mission was to buy up troubled companies and either bring them to profitability or sell them off for body parts. Jobs get "created" alright, because there are plenty of new jobs involved. But when the dust settles, the total number of jobs is LESS, not more. That's the difference between true venture capitalists and equity capitalists.

The ice-water in the veins argument is not a good criticism. It takes that to be successful either way. But it is valid to point out the difference between a lot of jobs that get created (many of which may not last, perhaps) versus a net reduction in the number of jobs.

Those takeover people are important to the overall economy in the same way the bail bondsmen are important to the criminal justice system. Without them the system won't function as well. But it is a mistake to suggest that with the economy already in the tank, squeezing yet another few drops of blood in the form of profitability for every larger corporations at the expense of smaller ones is a rational step in the direction of a recovery.

June 11, 2012

HCR -- Geriatric Emergency Departments

By John Ballard

I still don't like the dollars but the idea of this program is encouraging 

Analyzing a program called "Acute Care for Elders" (ACE) piloted in 200 hospitals across the country, the UCSF researchers found that ACE patients had a shorter length of stay of 6.7 days, versus 7.3 days for elderly patients in a traditional inpatient hospital setting.

The specially designed units also saved hospitals $974 per patient. Patients in the ACE units cost $9,477, compared to $10,451 for usual care.

With hospital prices pushing those of luxury vacation packages, I remain deeply skeptical about how medical bills are generated in America. (I cannot understand, for example, why a brief consultation with someone already in the system, no medical findings, sent home with words of sympathy and reassurance from doctor and staff, should cost more than a token amount. I would be shocked, first of all, if such an occurance happens with any regularity. And if it does, I would be further shocked if the visit were billed at anything that could be called a "token amount.")

But leaving that aside, having a designated unit and team to care for geriatric patients is obviously a good idea. Those of us who deal with the elderly daily know well that even under the best of circumstances they typically have specific needs not commonly seen in younger patients.. 

  • Mobility (tripping and slipping hazards)
  • Hydration and nutrition
  • Hearing and vision issues
  • Cognition, memory
  • Impairments from past problems
  • Equipment (walkers, canes, wheel chairs, oxygen)

Here are the links...

More hospitals customize ERs for older patients

For the Elderly, Emergency Rooms of Their Own (NY Times)

Phyllis Spielberger, a retired hat seller at Bendel’s, picked at a plastic dish of beets and corn as her husband, Jason, sat at the foot of her hospital bed, telling her to eat.

Although she had been rushed to Manhattan’s busy Mount Sinai Hospital by ambulance when her leg gave out, the atmosphere she encountered upon her arrival was eerily calm.

There were no beeping machines or blinking lights or scurrying medical residents. A volunteer circulated among the patients like a flight attendant, making soothing conversation and offering reading glasses, Sudoku puzzles and hearing aids. Above them, an artificial sun shined through a skylight imprinted with a photographic rendering of a robin’s-egg-blue sky, puffy clouds and leafy trees.

Ms. Spielberger, who is in her 80s, was even getting into the spirit of the place, despite her unnerving condition. “It’s beautiful,” she said. “Everything here is wonderful.” Yet this was an emergency room, one specifically designed for the elderly, part of a growing trend of hospitals’ trying to cater to the medical needs and sensibilities of aging baby boomers and their parents. Mount Sinai opened its geriatric emergency department, or geri-ed, two months ago, modeling it in part after one at St. Joseph’s Regional Medical Center in Paterson, N.J., which opened in 2009.

Holy Cross Hospital in Silver Spring, Md., opened one of the first geriatric emergency departments, which it calls a seniors emergency center, in 2008, and its parent organization, Trinity Health System, runs 12 nationwide, primarily in the Midwest, and plans to open six or seven more by June, a spokeswoman said.

Dr. Mark Rosenberg, chairman of emergency medicine at St. Joseph’s, said he had consulted on more than 50 geriatric emergency rooms to be opened across the country, from Princeton, N.J., to California, overcoming initial resistance from doctors and nurses who saw assignments to the units as scut work.

“They thought it was a bedpan unit, focused on nursing home patients,” Dr. Rosenberg said. “When they finally realized this was the unit that gave better health care to their parents and grandparents, they jumped onboard.”

Hospitals also have strong financial incentives to focus on the elderly. People over 65 account for 15 percent to 20 percent of emergency room visits, hospital officials say, and that number is expected to grow as the population ages.

Under the Affordable Care Act, the health insurance overhaul passed by Congress in 2010, hospitals’ Medicare payments will be tied to scores on patient satisfaction surveys and how frequently patients have to be readmitted to the hospital. (The Supreme Court is considering whether to overturn another section of the law, and if it does, whether it would have to throw out the entire law.)

Even in their early stages, patient satisfaction ratings for Mount Sinai’s geri-ed are “off the scoreboard,” said Dr. Andy Jagoda, the hospital’s chairman of emergency medicine.

Specialized Hospital Care for Elderly Patients Could Significantly Cut Costs

Landefeld and his colleagues say minor changes in the current health care model can yield significant results. Leaving patients in their hospital beds, for example, or constantly interrupting them in the middle of the night for disruptive evaluations, can lead to longer recovery time and longer hospital stays, he said.

“What do most elderly people want to do at the hospital? They want to go home, and they want to get there as soon as possible,” Landefeld said. “In the ACE program, families were involved from day one as opposed to being quarantined — from their loved ones. And we looked at restructuring how hospitals work to get more of the benefit without the unintended consequences.”

June 08, 2012

Clean Coal Pornography

By John Ballard

Next time you see one of those beautiful, slick   propaganda pieces   commercial messages from the coal industry that may look like public service announcements, remember INSTITUTE INDEX: The real obscenity of mountaintop removal by Sue Sturgis in Facing South. 

The snip below from the Denver Post and photo link are from two of the many links in her report. This is the photographer's description of the photo. 

IMGP0001[1]Erica and Rully must bathe their daughter, age 5, in contaminated water that is the color of tea. Their water has been tested and contains high levels of arsenic. The family attributes this water problem primarily to the blasting which they believe has disrupted the water table and cracked the casing in their well, allowing seepage of heavy metals into their water, and also to the runoff from the mountaintop removal sites surrounding their home. The coal company that mines the land around their home has never admitted to causing this problem, but they do supply the family with bottled water for drinking and cooking. Contaminated and colored water has occurred in other coalfield communities. 

Go now and check out the tawdry details.
They are obscene, sure enough, but in the political sense of the word. 

An award-winning coal-mining activist was questioned for 45 minutes by police on suspicion of child pornography after U.S. Rep. Doug Lamborn's energy and mineral resources subcommittee decided a photo she submitted of a child in foul bathwater was inappropriate.

Maria Gunnoe of West Virginia had been invited by Lamborn — a Colorado Springs Republican and the subcommittee's chairman — to testify at his hearing Friday on the Spruce Coal Mine in her state. It was the fourth time Gunnoe had been in front of the committee and the second time she had been there at the behest of Lamborn.

Gunnoe, a grandmother, said that when she has spoken to the committee previously, she never felt as if members made eye contact, so she decided to bring a photo by a freelance photojournalist of a child taking a bath in dirty water — allegedly polluted by coal mining — to put up on the panels above her head.

"I was drawn to the photo because I think it really captured what happened here," Gunnoe said from her home Tuesday.

Lamborn — who leads the energy and mineral resources subcommittee under the House Committee on Natural Resources — said he heard about the photo before the hearing and decided to pull it from the planned presentation without looking at it. As chairman of the subcommittee, he is in charge of the hearing, the witnesses and the staff.

"I accept the judgment of professional staff," Lamborn said Tuesday. "If it's inappropriate, I don't think I should be viewing it. The fewer people who viewed it, the better."

Lamborn on Tuesday said he still hadn't seen the photo and didn't intend to. As committee rules dictate, Gunnoe e-mailed the photo to the GOP committee staffers about 8 a.m., two hours before the hearing started. When she arrived on Capitol Hill, she was told by the same staffers that the photo was inappropriate and she could not display it during her testimony.

"I asked them why, and they just kept saying it was inappropriate. There were no more answers than that," Gunnoe said. "I just let it go because the hearing was about to start."

The photo by award-winning photographer Katie Falkenberg was part of a photo essay about the effects of mountaintop removal coal mining. It is taken from above a 5-year-old in West Virginia bathing in murky orange water. The child's face is not identifiable, and Falkenberg says the parents were in the room when the photo was taken and granted permission for the photo to be used at the hearing.

June 06, 2012

Money Counts

By John Ballard

The outcome of yesterday's Wisconsin election illustrates how public opinion can be shaped by money. The governor kept his job in no small part thanks to outspending his challenger. Bear in mind that out of the two, he's the one with fiscal conservatism at the core of his argument. Hehe. This is why we don't say "poor and powerful." The phrase we always use is "rich and powerful."

To use a medical comparison, overeating and obesity doesn't mean everybody will get sick or die young, and drinking alcohol to excess doesn't always result in a substance abuse problem -- there are fat old people still in good health, and others who can drink themselves into oblivion at night and function quite well the next day. So yes, having access to money goes along with being powerful. 



And they left no stone unturned -- or thrown. Just to put ice cream on the cake, Twitchy (Michelle Malkin Owner, Founder and CEO) still has enough resources (and grinding, bullying chutzpah) to sponsor and promote an in-your-face Twitter message this morning...



I, for one, am really getting tired of having words put into my mouth that are not mine.
That seems to be a chosen tactic in the extremist arsenal. (And speaking of arsenals, notice the cross-hairs in the Twitchy link and try to remember which side of this contest would be most likely allied with guns. Just saying.)
Yes, I know both sides use the same rhetorical weapons. 
But there is a difference -- both sides don't have the same amount of money. 

June 03, 2012

Has capital spending stopped altogether?

By John Ballard

Years of cafeteria management gave me a somewhat primitive understanding of how business works. Since I didn't climb the corporate ladder my appreciation for middle management was, I must admit, somewhat jaded. Mid-level bosses were often a pain in the ass, especially when they glossed over corporate mistakes or failed to recognize good work on the part of subordinates. And the big shots at the top, all smiles and handshakes whenever you met them, were ultimately responsible for corporate success and fully capable of boosting your ego one day and closing your store the next.

The company could close your store because before the store could open for business a lot of money had to be spent securing the land, building the store, training the staff, etc. The first meal that was served was a very expensive risk, costing somewhere in the neighborhood of several million dollars to serve. That's a lot of money to spend to serve a meal for six or eight dollars. And it takes a lot of those meals to recover those millions. And whatever part of those millions was borrowed added to the cost as interest on that debt, something called debt service.  After a certain time if a store is losing money, like the bar tender telling a patron "Sorry, dude, but you've had enough" the company is obligated to close the door. 

That about sums up all I know about business. Anything more is smoke. But one reality remained with me every day that I worked: you gotta put out money to make money. There are two kinds of investment (i.e. "putting out money"): operational and capital.

Operational investment is easy to understand. If you don't buy it you can't cook it. And if you don't cook it you can't sell it. And if nobody buys it you lost it. Same goes for payroll, cleaning supplies, utilities, and all the rest, even rent and taxes. Some are controllable, others are not, but all fall under the heading of operational expenses that must be met if the operation is to remain solvent.

Capital investment is also easy to understand but most people tend either to forget that it ever happened or confuse that money with operational expenses. Capital investment is the money put up to start the business. Money used to start a business is called venture capital. Once the business is up and running, further big investments are called capital investments. Confusing capital costs (which are depreciated, as opposed to operational costs, which are expensed -- but that is an accounting issue...) with operational costs is a serious mistake because without capital investment there can be no operational investments or expenses. 


Cutting to the chase, this year's elections are heavily burdened as usual with economic angst. Candidates try their best to look, dress and speak as though they were business managers. We have one whose main claim to success is his ability to acquire wealth, enough for himself and anyone who invests with him to leave their financial troubles behind. (The unspoken implication, of course, is that those who don't support him may be up the creek without a paddle if he wins the election. I think that much we can believe.) 

(The rest of this post is about capital costs, not operational costs.
Hold that thought.
Operational costs are critical, but without capital investing no amount of operational excellence creates enough value to fill in when capital is needed to proceed. No matter how much money you make with one popcorn machine, if you never get any more machines you will always be limited to what one can do.) 

Lost in the discussion is the difference between venture capital and equity capital. Both can be thought of as capital investments, but the difference is that the venture capital is very risky for the investor. If the venture fails, the investment is lost. In many ways it's like that old saying about throwing a party and nobody came.

Equity capital, on the other hand, is less risky. 

Equity capitalists are to business what bail bondsmen are to the criminal justice system. They don't deal with new ventures. Their business is dealing with businesses that are in trouble. Whatever they put up first (posting bail) is secured by whatever assets the troubled company has. That "investment" is fairly safe. Unless someone fails the due diligence test, the worst case scenario for the equity capitalist is breaking even. 

What we are witnessing in the political arena is a struggle between equity capitalists (Republicans) and venture capitalists (Democrats).

It is no mistake that Bain is NOT a venture capital outfit. They were/are not in the business of starting companies. Their specialty is making companies profitable that are in trouble. Mitt Romney is the perfect candidate to represent his party. LIke "investors" whose personal risk is limited to paper losses the GOP lays claim to all existing assets, refusing to risk anything that might be called venture capital. The terms Keynesian and Austrian are tossed around to make various positions look erudite, but in the end it all comes down to ordinary aversion to risk. And Republicans for whatever reason are at this time totally risk-averse. Like equity capitalists (or bail bondsmen) they want to know ahead of time that anything they risk will be secure -- otherwise they are ready and willing to send out bounty-hunters if necessary to protect or recover their assets. 

What is being overlooked is the importance (and return on investment, by the way) of the country's infrastructure. Go back now and look at the difference between operational expenses and capital expenses. The power grid, roads, bridges, and other expensive public investments are not operational expenses, they are capital expenses. Money spent now for infrastructure (unlike emergency funds following floods, fires or tornatoes) is an investment that will be recovered over years and decades. And like an old car the day will come when it, too, will have to be replaced. But in the meantime, the returns on any national capital investment will be coming in for years.  

Here are two readings for this morning that have prompted my little essay about money. One has to do with the infrastructure issue -- what I think of a the country's capital investment (categorically different from operational investments).  The other is a summary of the various outcomes when whole countries "go broke." We don't have a good vocabulary to discuss issues of "sovereign debt." In may ways the term is ambiguous because there is no global benchmark for either lifestyles or currency. There is simply too much variance from top to bottom. In a world of food shortages, only in America (and some parts of the South Pacific with atypical gene pools) do we find fat poor people. And in South Asia there are people who would be considered homeless in America and have bicycles for transportation who also have cell phones. So with those images in the background, consider these two items. 

Repairing Roads Can End All Kinds of Gridlock 
This is about capital investing at the national level, as opposed to operational spending.

The most important single step toward a brighter future is to repair our economy as soon as possible. And one of the surest ways to do so is a large and immediate infrastructure refurbishment program.

This path would not require Republicans to concede the merits of traditional Keynesian stimulus policy. Nor would it require them to abandon their concerns about the national debt. In short, the philosophical foundation for an agreement is already firmly in place.

If it doesn’t happen, the coming political campaign will provide a golden opportunity to learn why. At the inevitable town hall meetings, voters who are tired of gridlock should ask candidates when they think that long-overdue infrastructure repairs should begin. The only defensible answer is “Right now!” Candidates who counsel further delay should be pressed to explain why.

When Countries Go Bankrupt

In December 2006, Britain made its final payment of $84 million on a $4.34 billion loan from the U.S. that was made all the way back in 1945. Germany wasn’t the only country to go bankrupt after WWII. This money allowed Britain to stave off its total collapse after devoting almost all its resources to the war for over half a decade.

To put this in perspective, $4.34 billion in 1945 is roughly equivalent to $140 billion today, an amount that was double the size of Britain’s economy at the time.

Had the U.S. not made this loan, the British economy would have been thrown into a tailspin, causing huge implications, not only to the UK, but also to countries around the world.

Today we see a number of nations on the verge of bankruptcy. But what does this mean for our global economy with heightened awareness of every micro-decision, and fluid capital markets that can react to virtually every whim?

To be sure, many countries have gone bankrupt in the past, and many more will default in the future. So who’s next, and what kind of problems will a nation’s insolvency cause?


If you think we are past the point of more country’s going bankrupt, think again.

Most national bankruptcies are like Bernie Madoff on steroids. What once seemed like a good investment suddenly turns into a giant ponzi scheme with the working public footing the bill.

The problems become exacerbated when there are fewer people working and many more retired.

The growing crisis in Greece, Spain, Portugal, and Italy are but the tip of a much larger iceberg.

The question then becomes a matter of how the problems are dealt with.

Do they deteriorate into something tantamount to a civil war, like what happened in Argentina? Or can they be handled in a more civil manner like Iceland?

And how do the modern communication systems we have on the Internet factor into this equation?

Social networks like Twitter and Facebook all heighten awareness, and countries close to collapse have already begun to experience a brain drain, with the most wealthy and talented moving to more stable communities.

In today’s fluid environments, people and resources can react instantly to any adversarial conditions. So if taxes go beyond a certain pain threshold, people will simply fold their tent and move elsewhere.

This second reading is a reminder that what happens in America is not unrelated to what happens in other parts of the world. I'm sorry, Virginia, Santa has a lot more on his plate than just us. 

A lot of very smart people can't agree on what will happen when the Greeks leave the Euro (which looks more and more like a fairly sure outcome) or what may happen if Spain and other countries decide to follow.

The price of gas is down thanks to slowdowns in both China and Europe resulting in lower demand. Political types rattling on about Keystone have been marginalized almost to the edge of the birther crowd thanks to the fact that the US now has the biggest oil reserves in 45 years and is a net exporter of refined petroleum products. 

There is also a lot to think about with the sparkle fading on the Arab Spring and the horrors unfolding in Syria.

As usual I want to end with words of optimism, but again, nothing comes to mind. 



George Soros gave a speech yesterday that has my Twitter feed sparkling with links. Numeerous unrelated sources, but nobody has summarized what he said in simple language. They all agree, however, that whatever it was is important and everyone is supposed to read it.

I haven't read it yet but I will tomorrow when my mind is more clear. Here is the link...



June 01, 2012

HCR -- Medicare for All? (An idea whose time has not yet come)

By John Ballard

The Age Rating Game: Will Older Americans Pay More Under Health Reform? by Maggie Mahar at The Health Care Blog last week has drawn some sixty-five comments which together with the original essay now runs to well over ten thousand words. The usual spirited arguments play out (typically more about politics than health care) for anyone who enjoys that sort of thing.

So down toward the end someone got around to advancing the notion of Medicare for all, paid for by progressive taxes, a suggestion that has been made before and sounds like a good idea. Maggie's nuanced response is typically more than most readers bargain for, but thanks to years of attention to the issue she spells out the pros and cons in easy to understand language. 

What she says is worth repeating. 

Yes, progressive taxes are the best way to finance health care. Ideally, when forging reform legislation, Congress would have called for a “tax” rather than a “penalty” for those who didn’t buy insurance. But for political reasons, they were afraid to use the word “tax” during the worst recession since The Great Depression.

The problem with expanding Medicare is that it is so wasteful and inefficient. The best medical research shows that 1 in 3 Medicare dollars are squandered on ineffective treatments, unnecessary tests, and over-priced drugs and devices that are no better than the older products that they are trying to replace. Because Congress has served has Medicare’s Board of Directors for all of these years, Medicare covers what lobbyists want it to cover: expensive back surgery for low back pain that back surgeons want covered (even though medical evidence show that in most cases back surgery for this particular problem does no good) PSA testing (which then leads to pricey prostate treatments which create more risks than benefits, and save very few lives–if any) that urologists want covered. (They’re still lobbying for PSA testing even though the Preventive Services Task Force has finally come out and recommended against it.)

Drug-makers want exorbitanty expensive cancer drugs covered, even though they may give the average patient onlly an extra three weeks of poor quality life. GE and other equipment makers want certain tests and treatments covered– even when there is no evidence that we’re getting value for our dollars. Academic medical centers want Medicare to pour more money into medical education even though we really don’t (and won’t) need more specialists in most areas. We need more primary care docs and nurse practioners. Meanwhie academic medical centers are throwing billions into over-build– new wings, more marble, more hotel-like amentities.

At the same time, Medicare doesn’t cover some things that it should cover: regular eye exams, for instance, hospice care that begins before the patient’s last few days, and adequate payment for palliative care that woudl encourage hospitals to hire more palliative care teams and more medical students would go into palliative care. The vast majority of people on Medicare have some form of supplemental private insurance (MediGap or Medicare Advantage) because there is so much that Medicare doesn’t cover which older patients truly need– while simultaneouslly wasting 1/3 of Medicare’s dollars on unneeded care. This is why I think it would be foolish to expand Medicare at this time.We don’t want to throw more people into a system that needs much repair. The Affordable Care Act sets out to repair Medicare by changing how we pay for care and how it is delivered, focusing on “evidence-based medicine.” Medical science–not lobbyists– should determine what we cover. Under the ACA, the Secretary of HHS has the power to lower payments for treatments that are overvalued while raising payments for treatments that are undervalued. And she doesn’t have to go through Congress– this is huge.

In additioin, if a pilot program is successful, HHS can roll it out nation wide– without going through Congress. (In the past, Congress blocked national roll-out of successful programs because they cut into someone’s income stream.) It will take time for the ACA to reform Medicare, but I’m hopeful that, by 2020, it might make sense to talk about opening up Medicare to more people.

In the meantime, non-profit insurers like Kaiser and Peugot Sound are helping to build data bases that show which treatments work for which patients. They have also made great strides in improving primary care, and in Kaiser’s case, reducing mortallities as a result of heart disease.,

Even Aetna has done better than Medicare in some areas– figuring out that it’s better to pay for more hospice care, even though patients in hospice care live longer, their care is less expensive than (and more humane than) the care they would receive in an ICU where they are undergoing futile treatments. (Unlike Congress, Aetna’s board of directors doesn’t worry about “death panels” and is not adverse to letting people the way they choose to die.) 

Finally, with good IT systems, it won’t be that hard to verify who is eligible for subsidies. The Federal government has already given 5 or 6 states the funding they need to set up these systems, and they will serve as models for the verifiying eligibility in the other states.

It now looks as if the Federal govenrment will partner with most states in running the Exchanges, and most likely the Federal government will be verifying eligibility. Pollitically, it will be difficult to cut the subsidies: they’re built into the ACA, which is the law of the land. Moreover, all of the interests in the health care industry (insurers, drug-makers, hospitals) are strongly in favor of the subsidies because the subsidies will bring them more customers. I agree that we need to try to do a better job of letting low-income and middle-income know that they will be eligibe for subsidies which are, inf act, quite generous. They also need to understand that the insurance they will be buying will be much better than the insurance that most individiuals and small groups have today–it will cover the “essential benefits” –many of which are not covered today–, and there will be no co-pays or deductibles for preventive care.

The couple earning $68,000 aren’t eligible for subsidies because, if you look at income numbers, they’re upper-middle class. They earn more than median income for two people. As a practical matter, a couple who lives in New York City on $68,000 is middle-class (not uppper-middle-class) in terms of the life-style they can afford. But a couple who lives in Winston Salem, North Carolina (where my son lives) on that amount is quite affluent. (Everything from houses to wedding cakes are extraordinarily inexpensive in Winston Salem–and it’s a nice town! )

I suspect we may need to adjust the subsidies upward in some geographic areas and also raise subsidies for older Americans in states where their premiums are triple what a younger person pays.

Most importantly, we need to stop over-paying for many products and treatments. (My guess is that ultimately Medicare will begin negotiating for discounts with Pharma and device-makers, and private insurers will then demand lower prices as well). We need to stop over-paying for some specialists’ services, stop over-paying hospitals for preventable errors and readmissions, and start paying bonuses to doctors who keep their patients out of hospitals!

Finally, funding reform through progressive taxes would have been cleaner and seemingly easier. But we never could have gotten reform through Congress if we tried to fund it solely through taxes.

As I have said from the beginning, reform will be a process not an event. Over the next 10 years we will continue to tweak and revise the ACA. One can only hope that American voters elect wise representatives–wiser that the majority who are in Congress today. We will get the government– and the health care system– that we deserve.

HCR/ FYI -- lower prices for paying cash

By John Ballard

I've mentioned this several times but it bears repeating. Paying cash for medical procedures and tests can save lots of money. But don't expect that money-saving hint to appear like napkins in your take-out. You gotta ask. 

Many hospitals and physicians are offering large discounts if patients pay in cash and don't use their health insurance, the Los Angeles Times reported.

For example, a CT scan of the abdomen costs about $2,400 for patients insured by Blue Shield of California, while the Los Alamitos (Calif.) Medical Center cash price is only $250, according to the article. Another local California hospital charges insured patients $415 for blood tests that cost only $95 in cash.

To get the discounted prices, patients would have to withhold insurance information from hospitals, noted the LA Times. But experts caution against that because cash payments don't apply to patients' annual out-of-pocket spending limits for health insurance.

However, most patients don't know about the discounted cash prices. One such patient sued Blue Shield of California last month for unfair business practices, breach of good faith and misrepresentation over her medical bills after she was charged $2,336 for a CT scan that would have cost her $1,054 in cash, according to the article.

Despite state laws requiring better price transparency, the industry still faces barriers such as competition between insurers and providers. Boosting patient awareness of low cash prices could help strengthen transparency throughout the industry and control escalating healthcare costs. A lack of price transparency costs the United States about $36 billion a year in healthcare overspending, according to a February Thomson Reuters survey.

Make a mental note -- if you don't ask you may never fid out. It's better to ask and hear "No" than to fail to ask and pay more for your failure to inquire. 

Every time I put up another post like this I am reminded what a sad commentary it is on the American health care system. Caveat emptor is not a bad dictum if you're shopping for a car or even a new house. But in the name of humanity, why must we be so wary when seeking health care?



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