Tagesarchiv für den 23.08.2009

Rdan
23.08.2009

Five Myths about health care

rdan

5 myths about health care round the world by By T.R. Reid, Commentary, Washington Post (hat tip Mark Thoma)

...I've traveled the world ... to see how other developed democracies provide health care. Instead of dismissing these models as "socialist," we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:

1. It's all socialized medicine out there. Not so. ... In some ways, health care is less "socialized" overseas than in the United States. Almost all Americans sign up for government insurance (Medicare) at age 65. In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life. Meanwhile, the U.S. Department of Veterans Affairs is one of the planet's purest examples of government-run health care....
(the rest of the article is below the fold)

2. Overseas, care is rationed through limited choices or long lines. Generally, no. Germans can sign up for any of the nation's 200 private health insurance plans -- a broader choice than any American has. ... The Swiss, too, can choose any insurance plan in the country.

In France and Japan, you ... can go to any doctor, any hospital, any traditional healer. There are no U.S.-style limits such as "in-network" lists of doctors or "pre-authorization" for surgery. You pick any doctor, you get treatment -- and insurance has to pay. ...

As for those notorious waiting lists, some countries are indeed plagued by them. Canada makes patients wait weeks or months for nonemergency care, as a way to keep costs down. But ... many nations -- Germany, Britain, Austria -- outperform the United States on measures such as waiting times for appointments and for elective surgeries. In Japan, waiting times are so short that most patients don't bother to make an appointment. ...

3. Foreign health-care systems are inefficient, bloated bureaucracies. Much less so than here. ...

4. Cost controls stifle innovation. False. The United States is home to groundbreaking medical research, but so are other countries... Any American who's had a hip or knee replacement is standing on French innovation. ... Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs. Overseas, strict cost controls actually drive innovation. ...

5. Health insurance has to be cruel. Not really. American health insurance companies routinely reject applicants with a "preexisting condition"... They employ armies of adjusters to deny claims. If a customer ... faces big medical bills, the insurer's "rescission department" digs through the records looking for grounds to cancel the policy... Foreign health insurance companies, in contrast, must accept all applicants, and they can't cancel as long as you pay your premiums. ...

In many ways, foreign health-care models are not really "foreign" to America, because our ... system uses elements of all of them. For Native Americans or veterans, we're Britain: The government provides health care, funding it through general taxes, and patients get no bills. For people who get insurance through their jobs, we're Germany: Premiums are split between workers and employers, and private insurance plans pay private doctors and hospitals. For people over 65, we're Canada: Everyone pays premiums for an insurance plan run by the government, and the public plan pays private doctors and hospitals according to a set fee schedule. And for the tens of millions without insurance coverage, we're Burundi or Burma: In the world's poor nations, sick people pay out of pocket for medical care...

This fragmentation is another reason that we spend more than anybody else and still leave millions without coverage. All the other developed countries have settled on one model for health-care delivery and finance; we've blended them all into a costly, confusing bureaucratic mess.

Which, in turn, punctures the most persistent myth of all: that America has "the finest health care" in the world. We don't. In terms of results, almost all advanced countries have better national health statistics than the United States... In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.

Given our remarkable medical assets -- the best-educated doctors and nurses, the most advanced hospitals, world-class research -- the United States ... should be the best in the world. To get there, though, we have to be willing to learn some lessons about health-care ... from the other industrialized democracies.

There are, of course, groups that have a strong interest in perpetuating these myths as part of their attempt to block health care reform.

Bruce Webb
23.08.2009

Why are we still paying Insurance Companies for HealthCare?

by Bruce Webb

The above was the title to a blog post on TPM whose body read as follows:
if 77% of americans want an alternative to paying insurance companies for medical care,

why is more than 77% of the televised debate time being given to industry mouthpieces that oppose it, and the screaming stooges that dont understand it?

i have yet to see a convincing argument for having insurance companies in the healthcare equation. the costs to our economy and the public health are now well known. so what is their value added?
My answer there is below the fold here.


i have yet to see a convincing argument for having insurance companies in the healthcare equation.

I don't know about convincing but the argument is simple enough. It is drawn from F. Hayek and can be seen in this Mises.org review of his 1944 Book The Road to Serfdom

What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship--and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less livable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.

Once you adopt this argument, which is really a faith-based belief system, every demonstration that a government program would deliver a service in a better more cost efficient way is just in the end a trick to induce you to take just one more step down the Road to Serfdom. That private insurance systems do not add value is no reason not to have them, they serve a conservative purpose all of their own.
Hayek is said to have abandoned the strong form of this argument by the sixties, the proof of the success of the Social Democracies of post-war Austria and the Scandinavian countries made the Socialism=Gulag equation obsolete. But his U.S. followers are still trapped in that worldview, something that is assisted by their near complete ignorance about conditions outside U.S. borders.

Insurance companies represent the American Way. And only a DFH commie intent on leading us down the Road to Serfdom will tell you any different. Pointing to examples where governmental planning and intervention worked, say Hoover Dam, the Interstate Highway System, and Social Security only hardens the resistance. Why believe what your eyes see when you know the Devil is out and about doing his works?

In fact you can best see this in a religious context. It doesn't take any time at all to point out the deep inconsistencies between the four accounts of Jesus' Passion in Matthew, Mark, Luke, and John and between those of the conventional understanding as seen in Mel Gibson's version. The differences are not just those of perspective, the stories are totally different. None of that matters to a true believer, he knows what he knows and he does not need some snotty nosed atheist doing his reading for him.

The Health Care battle is no different, the varioius High Priests and Priestesses have given the faithful the Word and they don't want to hear any heathenish babble about "value added".

Capitalism=Freedom. So saith Rand, Hayek and Friedman. And if that Credo is good enough for Limbaugh Palin and Gingrich it is good enough for anyone.

Only a fool gets angry and frustrated that he can't convert a Fundamentalist, instead you just have to work around them. As here.
___________________________
I have made this argument before, in fact as recently as yesterday in an exchange on an AB thread.

Free market fundamentalism is a faith based religion. This is not to say that its theorists including Hayek and Friedmen were not brilliant men. But you can say the same and more about some of the greats who built the intellectual superstructure that underpins Catholicism: St. Augustine, St. Anselm, St. Thomas Aquinas were in their various eras intellectual giants fully equal to such figures as Aristotle and Newton and Einstein. It is just that where the latter three were interested in breaking boundaries the first three were intent on fortifying the region between the barriers. Barrier breakers are by nature open to challenge, that is what they themselves are doing. Fortifiers take challenges into account but only to build the defense even stronger.

St. Anselm presented us with one of the earliest Ontological Proof of the Existence of God. But it was not like he needed it for himself. There is a reason the call Freshwater Economics 'Orthodox' and it is not just because it established its position first. Questions like "Why private insurance?" are more akin to challenges to the catechism.

Gary
23.08.2009

Japan during the deflationary 90’s








I'm going to take a look at the Nikkei during the extreme deflationary period following the collapse of the Japanese real estate and stock market bubble. Why? Because the US is in a very similar situation. We are also trying the exact same “fix” of propping up the failed banking system that Japan opted for, which failed miserably BTW.
What we see is a decade of explosive cyclical bull markets driven by nothing other than monetary expansion. Since this strategy never really cured the underlying fundamental problems every single one of these rallies eventually topped out and was followed by a long slow decline to new lows. At which point more stimulus was applied with the same result, another explosive rally and another grueling decline to lower lows.

The argument today is that we are in a deflationary environment and no amount of money creation is going to be able to keep up with the deflationary forces caused by the implosion of history’s largest credit bubble. I’ll point out that Japan experienced massive deflation during this period yet monetary stimulus was able to spawn multiple cyclical bull markets. I’m not sure we should assume that simply because we are in a deflationary environment the stock market won’t be able to rise. The Japanese model seems to suggest that a determined central bank can create asset inflation even in a deflationary environment.

Since we are doing the same thing that Japan did there is probably a decent chance we will experience a similar result.

A great many investors and money managers have been surprised by the stock market's relentless march higher. But as you look at the charts of the Nikkei we see that’s exactly what happened in Japan. Every rally unfolded in under a year. Almost every decline took much longer. For the impatient trader you were better off playing the long side because the gains came much faster than the losses.

There’s probably a pretty good chance that something similar is in our future for the next decade or two. This is going to be a market timers nightmare. History has already shown that the majority of market timers don’t make much if any lasting long term gains in the market. Add in extreme volatility and ever greater government intervention and you end up with a market that’s going to be next to impossible to trade effectively. Sure a few may get lucky from time to time but over the next 10-20 years I dare say almost no one is going to make any lasting money trying to guess the markets volatile gyrations as it gets pulled back and forth by the deflationary forces and the governments attempts to thwart them. Traders are probably going to be running up a mountain of sand for years to come.

So far we’ve seen the COT fail. We’ve seen most trend lines and patterns fail. The cycles have started to perform poorly. Sentiment has become for the most part meaningless. Overbought and oversold levels have been useless. 75 years of Lowry’s data went down the drain. All in all this market has managed to take away just about every tool that investors use to get an edge in the market.

Take a close look at all four of those cyclical rallies. Not only were the rallies extremely violent with all but one showing no inclination to test the bottom but the topping process was normally extended and the retreats were slow grinding affairs with multiple volatile reversals. Like I said a market timers nightmare.

I'm starting to lean in this direction as it is beginning to appear that the Fed may have aborted the current left translated 4 year cycle with a avalanche of liquidity, similar to Japan.
James
23.08.2009

An economic recovery forecast

The Economist makes its prediction for the shape of the economic recovery:
A gloomy U with a long, flat bottom of weak growth is the likeliest shape of the next few years.
They also have a discussion about the housing market here.
James
23.08.2009

Urban planners vs. “suburban sprawl”

Cato Institute Senior Fellow Randal O'Toole discusses urban planning and suburban sprawl.

Humble Student of the Markets
23.08.2009

No repeat of the Great Depression

There have been a number of analysts like Bob Prechter and Doug Short who believe that the pattern shown by the US stock indices look like a repeat of the 1930s and the Great Depression.

It is difficult for me to make the case that the current conditions make a repeat of the Great Depression inevitable, or even likely. James Hamilton of Econbrowser commented on Short’s analysis this way:

Among the factors that turned the hoped-for recovery of 1930 into the debacle of the Great Depression were a sharp hike in interest rates in October 1931 and a decline in the overall price level of 10% per year in 1931 and 1932. Whatever else happens, I don't expect those particular mistakes to be repeated by the Bernanke Fed.

In addition to Hamilton’s assertions about the Bernanke Fed, I would add a couple of other points that should be encouraging for the bulls.


Protectionist hounds are in the kennel
Countries raising their protectionist drawbridges was one factor that exacerbated the effects of the downturn in the 1930s. This time, it doesn’t seem to be happening. Recently, the Economist reported that global trade seems to have flattened out. Floyd Norris recently wrote in the New York Times that there are even hints of an upturn in global trade.

Countries all around the world seemed to have learned to open markets and free trade lesson this time around. Consider these headlines in the last few months:


What’s interesting about some of these headlines is that free trade is being embraced around the world, which is highly encouraging for the long-term macroeconomic backdrop. The fact that the EU, which has a history of bickering and isn’t known for being friendly to open markets, is negotiating free trade deals around the world is a bit of a surprise to me.


What if peace breaks out?
There are also geopolitical wildcards. What if the US and Iran made peace?

Bruce Bueno de Mesquita, a specialist in game theory at NYU, forecasts precisely such an outcome:

Last year, Bueno de Mesquita decided to forecast whether Iran would build a nuclear bomb. With the help of his undergraduate class at N.Y.U., he researched the primary power brokers inside and outside the country — anyone with a stake in Iran’s nuclear future. Once he had the information he needed, he fed it into his computer model and had an answer in a few minutes…

...Iran won’t make a nuclear bomb. By early 2010, according to the forecast, Iran will be at the brink of developing one, but then it will stop and go no further. If this computer model is right, all the dire portents we’ve seen in recent months — the brutal crackdown on protesters, the dubious confessions, Khamenei’s accusations of American subterfuge — are masking a tectonic shift. The moderates are winning, even if we cannot see that yet.

Should these events come to pass, which are not on any market analyst’s radar screen, oil prices would like fall because of a reduction in the geopolitical premium and equities would rally.


No Armageddon
In conclusion, it is highly unlikely that the world is going to repeat the mistakes of the 1930s. I am concerned, however, that it would make new mistakes.

In the short term, I continue to believe that the market is extremely vulnerable to setbacks. China seems to be the bellwether. The trajectory of the Shanghai Composite seems to indicate that China’s stimulus mini-bubble is bursting and the world is in danger of getting dragged into a double-dip slowdown as China appeared to be the last engine of growth.

If a double dip does occur, investors should keep in mind that it is only a bear market, not Armageddon.

energyecon
23.08.2009

U-6 Unemployment Stats Revisited


Here we have the unadjusted U-6 unemployment data, which hasn't been around all that long so the plots only go back a relatively short time. Also, I am looking at the Year Over Year (YoY) changes, so there is additional truncation of the first twelve months to keep the plots' timeframes aligned. There is clear seasonality exhibited, and the YoY look tells you what the changes are without muddying the waters with seasonal adjustments (inadvertantly or...advertantly?).




So looking at the YoY changes in both absolute and as a percentage change (new - old)/(old)can give some perspective on the rate of change, as evaluating the impact of a change is a function of both magnitude and the time it takes...and we can relate that to the previous plot of the U-6 unemployment rate.



Finally, I am still working out what the change in the relationship between the U-3 unadjusted rate of unemployment (the headline rate of unemployment) and the U-6 unadjusted rate means, but my WAG is that it is trying to tell us that the headline UE rate is understating the degree of economic distress being experienced by wage earners.
Guy M. Lerner
23.08.2009

Investor Sentiment: I Have Said It All!

Ok, I have said enough. I have said it all. There is nothing else to say. To spare you the trouble of having to waste your time reading and to spare me the embarrassment, there will be no comments this week. Just graphs. As expected, the sentiment picture has changed little from last week. Go bulls!!!

Figure 1. "Dumb Money" Indicator/ weekly

Figure 2. "Smart Money" Indicator/ weekly

Figure 3. Rydex Bullish and Leveraged v. Rydex Bearish and Leveraged/ daily

Figure 4. Insider Score/ Entire Market Insider Buying and Selling
admin
23.08.2009

No Signs of Life

Here in my upscale neighborhood, Miami Beach, I still can’t see any sign whatsoever of the fabulous economic recovery that the stock market is forecasting. I used to have to go my barber on weekday afternoon’s to avoid the weekend crowd. He is very popular, but now I can just waltz in any time on a Saturday afternoon to get my hair cut without having to wait.

In the strip mall, the Italian restaurant had zero customers for three straight hours last Saturday night. The dog-groomer sometimes just closes up shop and goes home because the fashionable ladies simply aren’t getting their purse dogs groomed as often as they used to. The tanning salon will often go for hours with no customers at all. Tanning used to be very important to the club-kid crowd here. It is also easy to park at this strip mall now because the real estate company that used to clog it up is long gone. And the half-hour wait at the car wash is gone too. Even at formerly peak hours, there is never more than one car ahead of me when there used to be four or five back in 2007.

These businesses are away from the tourist areas and cater mostly to locals. I suppose that they are lucky that they still have their doors open, and are probably doing far better than their counterparts in other areas of the country, but still… There you are surrounded by gleaming luxury high-rise condo buildings filled with rich people, and you can’t sell them a car wash for a lousy $7?

From what I can see, this rally is still a candidate for one of the greatest sucker’s rallies in history.

HMS
23.08.2009

Investment Opportunies, Sri Lanka

"I have seen that when a long war like this ends, there rise enormous opportunities for investment." Jim Rogers, Forbes Magazine, August 21