Friday, March 30, 2012

Cognitive Dissonance


Another wonderful psychiatric term. This one describes the discomfort felt when a person attempts to hold onto two contradictory notions or beliefs at the same time. Americans clearly hate the individual mandate that is at the heart of Obamacare, with approval rates hovering in the 30% range. Yet the provision to forbid insurers from excluding patients with preexisting illness has 85% approval. Could someone please explain to our beloved countrymen that the one is fiscally impossible without the other?

The politics of what will happen next is any body's guess, if the ACA is overturned entirely the public policy implications are clear. There will be no further effort at health care reform for a generation. The Republican plan to gut Medicare will fail, because older Americans like Medicare just the way it is, and they vote. Thus the fiscal rape of the young  by the old will continue unchecked. The iniquities of the system that produces 60% of all personal bankruptciess will continue. Costs will continue to escalate inexorably.

I wish I shared your optimism about our future. I predict the coming election season will produce new lows for venality, vituperation, mendacity, and the absence of serious conversation. At the end of it we'll get a new President that, no matter who he is, half the country will loathe, and a Congress about which we'll feel even worse.

BTW, the invalidation of the ACA by Supremes would have a direct effect upon your faithful correspondent. That's what allows me to insure my 24 year old son through my plan at work (another wildly popular provision of the act) without paying rapacious rates in the marketplace, which of course subsidizes ll those freedom loving freeloaders who refuse to pay for the health car they get. That's the 1st time I can every remember that happening. Wonder what they have next in store for me.


Why is the Left so Worried about the Supreme Court Decision on the Affordable Care Act?


The chattering class is in a tizzy over the Supreme Court asking questions about the Affordable Care Act and I don't understand why they are so worried and upset.

If the mandate is deemed unconstitutional there is an easy solution: Implement a direct tax and/or offer a tax credit to buy insurance. Problem solved.


Thursday, March 29, 2012

A Nation Built to Last on Affordable Energy


Over the past few months I've become incredibly optimistic about our country's prospects. I believe President Obama has a good chance of being re-elected with a Republican controlled House and possibly Republican controlled Senate. If Obama isn't re-elected then someone who is a very close version of him will be. In either case President and Congress will be hostile to each other and gridlock will ensue. I think the mobile Internet is just starting and will cause as much growth as the wireline Internet did. Maybe most important, we are undergoing a fracking revolution. I don't think this can be underestimated.

Just consider three things then we'll let our imaginations run a bit.

This Wall Street Journal article points out the dramatic reduction in natural gas prices due to hydraulic fracking in the US. The Journal writes,

"That is good news for consumers. More than half of American households use gas to heat their homes, and they can expect an 18% drop in the cost of staying warm this winter, according to federal forecasts. A home in the Northeast that uses natural gas can expect to spend $1,023 this year, less than half the cost of heating with oil.

Inexpensive natural gas also is a boon for manufacturers and petrochemical producers. For the first time in nearly a decade, steel companies and plastics makers are building facilities in the U.S., taking advantage of the inexpensive fuel to compete globally."

As if on cue, The Wall Street Journal (again) has a story on Shell opening a "$2 billion petrochemical plant expected to generate thousands of permanent jobs and draw from the region's massive deposits of natural gas," Shell is building an ethane cracker, the first new one in the US since 2000, and is considering additional units.

Of course, the Wall Street Journal reports US Steel, steel of all things, is benefiting from the natural gas boom by producing tubular goods for drilling but maybe more important its costs are declining.

"Industrywide, a ton of steel costs around $600 to produce. Using natural gas instead of coal to run the furnaces cuts the costs by $8 to $10 per ton. Based on those figures, U.S. Steel could save $133 million this year alone, according to a recent report by UBS AG, which also said the Pittsburgh-based company could save another $80 million in 2012 energy costs for nonblast furnace operations."

And the low cost of natural gas is attracting others to the US.

"In January, Methanex Corp. MEOH -0.80% of Vancouver said it would relocate a plant to manufacture methanol, used in making plastics and other materials, to Louisiana from Chile. At the time, Bruce Aitken, the company's chief executive, cited "the outlook for low North American natural-gas prices" as key reason for the move.
And low natural-gas costs were a factor in the decision by Brazil's Santana Textiles LLC to build a $180 million denim plant now under construction in Edinburg, Texas, rather than Mexico."

Lower steel prices, lower plastic prices, lower heating prices means lower prices for a LOT of goods, means US manufacturing becomes much more competitive relative to the rest of the world. And our natural gas prices aren't just a little bit lower. From the most recently cited Journal article:

This is a jaw-dropping competitive advantage we have right now. It won't last forever, but it will last long enough. But wait, there's more.

The US is a big exporter of oil field technology. Texas and Oklahoma are the laboratories of the oil field service industry. If you can make it there, you can make it anywhere, as the song goes. The fracking technology will be, is already in the process of, being exported to China and other countries which means the world will enjoy lower prices for natural gas and the benefits to consumers and workers will be tremendous. 

But wait, there's more.

So far fracking has been used mostly for gas deposits. But it will be used for oil as well. And when that happens OPEC will become irrelevant. The United States and Canada, combined, is the largest producer of oil in the world. Period. Full stop. Bigger than Russia. Bigger than Saudi Arabia. When fracking is applied to oil reserves, and it will be applied to oil reserves, oil prices will fall, supplies in the US will increase, which will attract manufacturing jobs of all sorts. Prices for all the goods using oil will decline. And, wait for it, the technology will be exported overseas creating a tremendous downward pressure on oil prices worldwide.

Jobs will be plentiful and the good times will roll. Amen.


Sunday, March 25, 2012

I got tired of going to bed drunk and waking up hungover.


Today ends my third year without alcohol.

I remember that last day quite well. A friend asked me if I wanted to meet him for a couple of drinks and I agreed. I warned him I wouldn't be drinking much because for some time I had been trying, unsuccessfully, to cut back. But I did drink, and drink, and drink. By the time I got on the train I was drunk, but that didn't stop me from getting a 16 ounce beer for the ride home. It's a miracle I didn't kill myself or someone else on the short drive home.

For some time I had recognized I was not in control of my drinking. I saw my consumption increasing in frequency and quantity. One beer on the train ride home every Friday, became one beer a few times a week then every day of the week, then two beers every day, then a 16 ounce every day then two 16 ounces every day. Of course, if there was an invitation to drink after work with friends or colleagues or clients that was additive, not in substitution. And weekends were a free-for-all. I started at noon and ended when I went to bed.

I cut back at times. When I stepped on the scale and was shocked by my weight I would cut back. After a particularly heavy night I would cut back for the next day or two or three to recover. When I embarrassed myself in front of my wife, or kids, or neighbors I would cut back. And during those times I would try to convince myself I could drink responsibly so all I needed to do was dry out a bit and control myself better.

But I couldn't. I could never have just one. No matter how much I wanted to, or tried, one would turn to two to three to as many as were available until bedtime. I tried and tried and tried again. The night of my last drink I was trying.

On my way to the train that night I was chastising myself, "I can't do this." The next day, hungover, I told myself, "I can't do this anymore." Day 1 I didn't drink.

Day 1 became Day 2, Day 3 and so on. Early on the memory of that last day was very vivid and that was enough to keep me from drinking. But with each day I began to realize I was unable to control my drinking. So when I thought of having a drink I would remind myself that I wasn't going to have one drink. I was going to have one drink then another, then another. I would repeat my mantras, "I can't do this anymore," and, "I'm tired of going to bed drunk and waking up hungover."

At some point it stuck. Last year I was with colleagues at a St. Patrick's Day celebration. I wasn't the life of the party. Later, a good friend told me I wasn't fun anymore. I was a bit insulted, but it was good to hear. I wasn't fun and I had a few choices to make. I could be fun and drunk, no fun and sober, or figure out how to be fun with drunk people and stay sober. So far sober is winning. The fun part will happen or won't.

There were plenty of times, there are still plenty of times, I think it would be nice to have a beer, or a dirty martini, or a gin and tonic. I don't because I don't want to go to bed drunk and wake up hungover. And I'm afraid. I'm afraid I won't have just one. I'm afraid the tremendous amount of self-esteem I've gained will evaporate. I'm afraid the (still inadequate) patience, understanding and empathy I'm now able to demonstrate to my family will be drowned.

This has been an eye-opening experience for me. I've learned plenty about myself, my resiliency, strength, weakness. I've learned much about my relationship with my family, friends, colleagues. I've seen how I used alcohol to feel part of a group and avoid dealing with certain emotions, responsibilities and memories.

I don't begrudge anyone's enjoyment of alcohol. In fact I'm rather jealous. But the longer I do this the deeper is my belief that I can't enjoy alcohol. I can abuse it. And I can't do that anymore.

Three years down. A lifetime to go.


Saturday, March 24, 2012

Magical Thinking


In psychiatry, magical thinking is loosely defined as a mental process in which causality is suspended in favor of association, or sometimes in favor of simple coincidence. An typical example might be something like...

 "It rained today for the first time in a month and my arthritis flared up, so the rain caused my arthritis."


"The president could lower the price of gas if he really wanted to "


 "Obama is the cause all of our present economic troubles, and if we only cut taxes in every circumstance, the economy would blossom like the Amaryllis plants you and I received for Christmas and liberty would be restored to the land"

Or how about?

"There's plenty of money to go around, and we only raised taxes on all those rich fat cats until their bones turned white there would be more than enough to go around and the rest of us could retire at 62 and live out our days in the blissful lassitude we deserve"

If we get Gallup to take a poll using the previous 3 statements, what percentage of Republicans would agree to the 1st two examples, and Democrats to the 3rd?

In the world of mental illness, magical thinking is an extremely destructive trait. You can't reason with those afflicted with it. Neither talking therapy nor pills don't work. Mostly you try to keep them away from sharp objects and intoxicating substances.

Alternatively, you can hold an election.


What's Love Got To Do With It?


I know a political junkie like yourself is familiar with these numbers, but here anyway is the statistical answer to your query. From the experts at

President Obama Job Approval

PollDateSampleApprove Disapprove Spread
RCP Average3/7 - 3/23--47.146.8 +0.3

Don't get too giddy though. Here are the recent numbers for his certain opponent in the fall joust

Not happy news for the Etch-A-Sketch candidate.

Long way to go.


Friday, March 23, 2012

Do I Care Who Has the Money?

Even before you asked my impression of income inequality in the US ("Who Has The Money?") I've been thinking through this question and the first thing that I struggle with is: Do I care? I have more money than many. Obama has more money than me. Romney has more money than him and Warren Buffet has more money than us all. So what? I'm not trying to minimize your question; I just don't see the point.

If we taxed Buffett and gave it to me, that would certainly change my life. But would it make the country better off? I would be richer, Buffett would be poorer. But other than that I don't think we can conclude much. Maybe that would make Buffett work less because he doesn't want to end up giving his money to me. Maybe I would work less becasue I could rely on Buffett to fund me. Maybe we wouldn't change our behaviors at all. Maybe our behaviors would change dramatically. Who knows? So what's the point?

I'm rather skeptical of most income inequality claims. I think most of them are deeply flawed. They'll look at a point in time and draw conclusions that may not be valid a cycle or a generation hence. They usually don't do well with the dramatic changes that take place in wealth over time. For instance the IRS has been keeping track of the Top 400 tax returns by Adjusted Gross Income since at least 1992. During that time, there have been 3,672 distinct primary filers, only 4 have been in the Top 400 each of the 17 years from 1992 to 2008, and fully 2,676 have been in the Top 400 only one year. I know, I'm looking at the top of the top, but I think it's instructive. Income moves around. A lot.

I hear the inequality arguments and am left unsatisfied. Wealth changes. I am wealthier than my parents, and I hope my children will be wealthier than I but who's to say that will happen? Maybe they will be, maybe not. And why is it unfair for me to be wealthier than someone down the street. Why would it be fair to give my wealth to someone else?

This is different than paying for government. But the wealthy pay more for government than the less wealthy. That is indisputable. So I come back to my question: Is there a problem?

The issue of inequality has been with us always. But the most recent bout of anxiety seems to have arisen from the election of 2010, when the Democratic majority was eliminated in the House and the filibuster proof majority in the Senate was also eliminated. At that point the Democrats stopped talking about stimulus and started talking about infrastructure and started talking about inequality, everyone playing by the same rules, and everyone getting a fair shot. I think it's a smokescreen.


Does Anyone Like Obama?


I won't take issue with your presentation on oil production, consumption and imports (although some of it is misleading) in The Energy Presidents. What is interesting to me is no one on the right, and I'm guessing many in the middle, will believe Obama wanted or worked for more oil and gas production. You say he threw some under the bus by approving a portion of the Keystone pipeline and I'm guessing many have been uncomfortable with his etch-a-sketch approach to the Keystone and fossil fuels. Which makes me wonder: Does anyone like him?


PS. Thanks for the picture of George Bush. You have definitely convinced me. I will under no circumstance vote for George Bush in 2012.


The Energy Presidents


Since 2005, the fraction of imported fossil fuel energy has declined  relentlessly.

The reasons behind this good news appear to be mutlifactorial, and include dramatic increases in US oil and natural gas production as well as more efficient domestic energy use. The trend, initiated by the Bush administration, has continued under the phony energy president. Yes that one, the one who gives his predecessor full credit for the change, and who threw the environmental wing of the Democratic party under the bus last week by approving the distal leg of the Keystone pipeline.

If you want a truly phony presidential moment, let me offer you this one.


Obama's Dukakis Moment?

The pictures of Obama in front of oil pipes in Oklahoma just seemed so, false. I know he's claiming he's an "all of the above" energy President, but it just seems so, false. This is the same guy whose Energy Secretary thought European gasoline prices of $8 a gallon was a necessary thing. This is the same guy whose Interior Secretary promised to keep his "boot on the throat" of BP. This is the same guy who is funding billions for solar and wind ventures. This is the same guy who rejected the Keystone Pipeline because three years was not enough time to allow a "full assessment of the pipeline's impact," but in the two months subsequent to that decision, enough time has elapsed to allow the southern part of the pipeline to be approved. Now he's crowing enough pipe has been laid during his administration to circle the Earth or go to the Moon or something like that. (Maybe he should speak to Gingrich about that moon metaphor).

It reminded me of Michael Dukakis in the tank. From Wikipedia:

Dukakis was criticized during the campaign for a perceived softness on defense issues, particularly the controversial "Star Wars" SDI program, which he promised to weaken (although not cancel). In response to this, Dukakis orchestrated what would become the key image of his campaign, although it turned out quite differently from what he intended. On September 13, 1988 Dukakis visited the General Dynamics Land Systems plant at 38500 Mound Road in Sterling Heights, Michigan to take part in a photo op in an M1 Abrams tank. The Prime Minister of the United Kingdom, Margaret Thatcher, had been photographed in a similar situation in 1986, riding in a Challenger tank while wearing a scarf;[14] although somewhat out of character, the image was effective and helped Thatcher's reelection prospects. Dukakis's "tank moment" was much less successful, however.[15] Footage of Dukakis was used in television ads by the Bush campaign, as evidence that Dukakis would not make a good commander-in-chief, and "Dukakis in the tank" remains shorthand for backfired public relations outings.[16] Although he had served in the United States Army, Dukakis was widely mocked by his opponents for what they characterized as martial posturing and a silly image.

Romney gets justly criticized for his inconsistency. Both Obama and Romney should learn the Dukakis lesson: Americans can smell phonies.


Wednesday, March 21, 2012

WPK's Grand Bargain


I don't have the details available, but your proposal at a glance bears a striking resemblance to the recommendations of the Simpson Boles  debt reduction commission. In fact, your scheme might even be   more generous on the revenue side than they were. The President refused to follow the recommendations of his own commission because he believed the politics were bad for him and I fault him for that. Telling the American people that borrowing another 6+ trillion bucks is OK is delusional. Refusing to consider any increase in taxes is, in my opinion, eqaully delusional.

So the aggravating question remains how to get there. I don't believe the November election, in which the results are likely to be close and may well produce a divided government, will help much. The politics remain impossible. I fear that in the end, we'll do what governments often do in such situations, which is to inflate our debt away.

Your previous argument that one solution to this mess is to grow our way out of it is well placed. For that to happen however we will need the kind of workforce that can propel the economy forward. We pay a lot attention to education and we spend a lot of money on it, with very mixed results. The German apprenticeship system seems one example of matching skills with needs, but that would take a profiund culture change for both labor and industry to accomplish.


Tuesday, March 20, 2012

A Balanced Budget in Five Years. The Knabe Compromise. (Patent Pending)

I'm sure you are all atwitter over the release of Paul Ryan's (Republican Chairman of the House Budget Committee) proposed budget. Let the cries of austerity begin! But I have a way to take the President's budget and Mr. Ryan's budget and create a balanced budget in five years. That's right, five years.
First. Here are Federal outlays from F11 through F22 for the President and Mr. Ryan's budgets. Personally I'm a little disappointed cuts weren't deeper for Mr. Ryan.

Here are revenues under both budgets. Personally I would like revenues to be lower as well. What is surprising is how close the revenue estimates are for both budgets. Over the 10 year time period, 2013-2022 the President's budget has revenue of $39 trillion and over the same time period Chairman Ryan has revenue of $37 trillion. Not very impressive.

Outlay minus revenue equals deficit. Over the ten years F2013 through F2022 the Obama deficits total $6.4 trillion. Over the same time period the Ryan budget deficits are $3.1 trillion. But even Ryan can't reach a balanced budget by fiscal 2022. I can.
Take the Obama revenue and the Ryan outlays and we reach a budget surplus by fiscal 2017. Over the ten year fiscal 2013 through 2022 the cumulative budget deficit under the Knabe plan is $1.1 trillion.

You are most welcome America.
PS. There is another alternative. What if we take Obama's spending and Ryan's taxes. I call it the Knabe Nightmare.

Who Has The Money?


I ran across these 2 graphs while researching what's happen to total wealth in the US since the beginning of the Great Recession.

One the one hand, there seems to be plenty of money around;

On the other, average Americans seem to be poorer., or at least the rate at which they're getting richer has slowed dramatically.

For some groups, especially minorities, the decline has been dramatic.

While I remain skeptical that this reverse redistribution of wealth is entirely a function of federal tax policy, or that returning to Clinotn era marginal tax rates would reverse it, the trend itself feels quite alarming. I know you'll have an opinion about this, and I look forward to reading it.


The Public Pension Crisis


The news gets grimmer and grimmer for public retirees and the lives they expected to enjoy. As the fiscal noose tightens around an increasing number of cities and towns, the unsustainability of the promises to those retirees becomes irrefutable, and the devils' bargain the politicians made with their constituents will further unravel. Once again the Europeans. provide a glimpse into what seems likely to be a difficult set of solutions that no one will like.

In the last 15 years, the private not-for-profit hospital where I work has dramatically cut pension benefits twice, first changing from a defined benefit to defined contribution, and more recently reducing benefits by further by 30%.

Sooner or later, this is what will happen in the public sector.


Saturday, March 17, 2012

What's Best for Consumers?


I read with interest your You Can Treat Your Workers Right and Still Make Money. But I wasn't aware there was much controversy around this. Didn't Henry Ford demonstrate this 100 years ago? I believe if the Costco model is superior to Wal-Mart's, gradually Wal-Mart will die, or change, and Costco will survive and thrive.

I guess it just shows to go ya there is more than one way to skin a cat.

It's a very interesting dichotomy between the two companies and lots of ink has been spilled trying to account for the success of both, (which differs than the performance of the stock over short time periods like one year) given their different wage policies. I've never given too much thought to the difference since my focus is usually on the consumer.

When I shop I often am willing to pay for service. Which is one reason I love my local hardware store and  avoid the dreaded Home Depot. At times Home Depot has run into trouble because of this lack of service.  No clue what Costco service is like, but Wal-Mart's is non-existent, one of the reasons I rarely shop there.

But what brought this up? You quote one story from 2008 and another from 2004. Finally catching up on your email?


You Can Treat Your Workers Right and Still Make Money


Average hourly wage at Walmart: $9
Average wage at Costco: $16

Percentage of worker's health insurance paid for by Walmart: 47
Percentage ofworker's  health insurance paid for by Costco: 92

Total return for WMT stock price since 2002: -5%
Total return for COST stock price since 20002: 100%

Despite whining from the the investor class that Costco is violating its fiduciary responsibility by treating workers properly, the good guys are cleaning Walmart's clock where it counts, shareholder value Is some basic principle of capitalism being violated here?



Did you get the new iPad yet?


It's so pretty. What are you waiting for?




William Safire wrote a wonderful novel, Scandalmonger, about the life and doings of Thomas Callendar, a newspaper writer, political hack, investigative journalist, gossip. Callendar broke the story of Alexander Hamilton's extra-marital affair and of Jefferson's dalliance with Sally Hemmings. However when he broke the Hamilton story he was essentially on Jefferson's payroll and when he broke the Hemmings story he was on the payroll of Jefferson's enemies and looking for revenge since he felt betrayed by Jefferson. All good stuff. Great story (and true), well written, fast-paced. Definitely worth a read.

This country has gone through many changes in how news and opinion is gathered, filtered and delivered. Telegraphs changed the pace at which stories could be transmitted. Radio changed it again, as did TV and the ability to put national news into the hands, ears and eyes of the nation. To me it's neither good nor bad, it just is. Because of that, I don't lament the passing of Cronkite and the others. They weren't angels, none of them were.

From Callendar to William Randolph Hearst and "Remember the Maine," to Dan Rather's (one or your grand old men) false story on George Bush's National Guard service, to the recent admission by This American Life that it's story on Apple's manufacturing practices was based on a source who regards his work as a "theatrical piece," and "is not journalism," (No I'm not making this up), there are plenty of examples that lead me to believe there was no golden age of journalism (or anything else for that matter). 

I think there is much greater benefit from having a wide diversity of opinions and news even though some (much?) of it is garbage. Nor do I feel much affinity for John Stewart and Steven Colbert. They'll have their day. America will tire of them, or some other way of delivering news will be invented and our children will talk about our quaint old-fashioned way of getting news.


Friday, March 16, 2012

The Return of the Media to Its Natural State


I'm a bit surprised at your disaapointment that the Times editorial page is not a repository of calm, objective analysis. But I know you too well to believe you'll argue that the Wall Street Journal, or Fox, or MSNBC are doing any better. Maybe we should get our news the way my daughter (a college sophomore) does, from this man.

The role of media in shaping public opinion has been a consistent thread within our conversation for some time, and the idea that national media provide some sort of reasoned accounting of events is a fiction, or at least a state of affairs that, as with so much of the post World War II period, lasted oh so briefly.
Still I miss the days when the grand old men (and they were mostly men) of print and screen bound us together, so much so that Lyndon Johnson's reaction to Walter Cronkite's oppositon to the Vietnam War was to lament that he had lost middle America 


Thursday, March 15, 2012

Again on Salazar's Mis-statement regarding oil and gas production


A few days ago I authored a piece on Secretary of Interior Ken Salazar's contention that "we are producing more from public lands, both oil and gas, both onshore as well as offshore, than at any time in recent memory."

Apparently I wasn't the only one asking if that were true. Today the EIA released, "Sales of Fossil Fuels Produced from Federal and Indian Lands, FY 2003 through FY 2011." I love the opening line, "This paper was prepared in response to recent requests that the U.S. Energy Information Administration (EIA) provide updated summary information regarding fossil fuel production on Federal and Indian lands in the United States."

Here's the summary table. Much prettier than my graphs and by converting everything into BTU equivalents is much more informative than my simple presentation.

Obama's Secretary of Energy, Steve Chu, has finally admitted high gas prices are not a good thing.  Maybe this EIA study will get Salazar to retract his statement. Then we can work on Biden, who today claimed the bail-out of GM (by putting it into bankruptcy and reducing headcount), and the bail-out of Chrysler (by putting it into bankruptcy, reducing head count and selling to the Italians), saved one million jobs, more jobs than the entire auto industry had at the peak of the cycle. Good trick since GM and Chrysler combined have about 35% market share of the US market.


Walk Left. Stand Right. Walk Left. Stand Right.


I was a little disappointed in your Changing Culture is Hard to do. I was hoping you would shine a light on one of life's mysteries: Why do Doctors not wash their hands? Since you passed on that, try these:

Why do some people stand left? Walk left. Stand right! Walk left. Stand right!

Why do clerks not count out your change anymore?

Why do clerks give you the bills and put the coins on top? Coins first, then bills!

Please do not stand up until the captain has turned off the seat belt sign. Please.

Why do the airlines keep telling me cell phones interfere with navigation equipment when they don't. And if electronic devices interfere with navigation shouldn't we have them off while flying, since that's when we need navigation the most? After all, during take-off and landing, we pretty much know where we are.

Why do some people wait until they get to the cashier to get their payment ready. You're in line, do something! Get ready to pay.

And if you are line to order, look at the menu! Why do some decide to look at the menu only after being asked what they would like? Particularly at a place like McDonald's. It's McDonald's! Get a burger for goodness sake.

When a customer service rep has been completely unable to help you, why do they still ask, "Is there anything else I can help you with today?" Wait. You didn't help me with what I called about, what do you mean anything else?


The Life Cycle of Unions


As the grandson of an organizer for the garment workers, I have an enduring affection for organized labor, and an unshakable belief that it serves as an irreplaceable counterweight to the exploitative urges of management (way too many historical examples to cite here). That said, I've come to believe that unions have a life cycle all their own. In infancy they emerge as a dynamic, socially powerful force for change and economic justice. With each improvement in the status of their members, each victory, there are gains to be held onto, and their larger social goals diminish. With maturity and continued success for their workers they ossify, and become organizations solely committed to the preservation of the perks and status of their members to the exclusion of any greater social good.

Nowhere is this more visible than in the self destructive choices made by public service workers in the face of unsustainable public pension costs. It's not only lawmakers beholden to union political support who are suicidal, it's the unions themselves. As you are fond of saying, "when something can't continue indefinitely, it won't." Current public expenditures on employees who are no longer working is no exception


NY Times Editorial Page: A Great Place to Waste Time.


I had some time to waste during lunch and where is the most reliable place to go if you need to waste some time? The NY Times editorial page! Of course.

I found this gem: Divided on the Right. Same theme, different day. Republicans are crazy, extreme, driven by ideology so they are going to nominate the most moderate of the candidates and the one most likely to beat Obama. Wait, what am I missing?

The Times is confused because, "fewer than 40 percent of the primary voters on Tuesday said defeating Mr. Obama was the most important quality in a candidate," which means more than 60% (enough to stop a filibuster in the Senate) thinks a candidate that will beat Obama IS the most important thing. For the less than 40%, since it looks like Romney is going to be the candidate does it dawn on the Times that maybe, just maybe, those voters are looking to send a message about the direction they want the platform to take. How is that crazy?

The Times is outraged that more than 70 percent of the voters in Alabama and Mississippi want candidates to share their religious beliefs. Golly. And they want the candidate to be a true conservative. And horrors, they want a candidate to have "a strong moral character." A strong moral character! How dare the voters. The Times considers a desire for a strong moral character as evidence of "extreme ideology." Desire for a strong moral character is something we should criticize and avoid?

So let's summarize. Romney is not a conservative. The Republican party is dominated by the extreme elements of the party. Yet Romney is the most likely candidate of the Party, meaning he is getting at least half of the delegates. So the extremists are so confused they are voting for the moderate? Maybe the count is wrong and we should look for hanging chads. Finally, the Party is in thrall to the extremists who are taking the extreme step of wanting someone with strong moral character to occupy the Presidency.

This is pretzel logic.


Changing Culture Is Hard To Do


In What Would You Do with JACHO you asked for my opinion on what might be dome to improve JCHAO's effectiveness at promoting patient safety. A very complicated question, because it speaks to the issue of changing culture, whether it be acceptance of hand washing among hospital workers,  the loss of acceptability of the use of public racial epithets, or the end of foot binding after a thousand years of practice. I'm not a social scientist, and even I were I'm sure the convergence of social and political forces that lead to these sea changes would defy any simplistic causality. While political pressure generated outside the affected group may help, the impetus for change often comes from some courageous figure or members within the group itself.

The other basic element appears to be sunlight. While I make sure to wash down my daily dose of liberal media with a chaser of healthy skepticism, I have no doubt of the essential function a free and spitited press plays in promoting change. Shame after all is a wondeful motivator.


Supply-driven medicine and Costs



The Washington Post story below, on different prostrate cancer treatments leads me to believe most of the commentary on health care is missing something obvious. The conclusion, "When new, more expensive treatments become available we start using them, even if there isn't necessarily a noticeable improvement in health outcomes," I find the whole thing rather odd, have a number of questions, and am not willing to believe the Post's conclusion.


If consumers were completely in charge of funding their prostrate cancer treatments, I find it difficult to believe a treatment with the same efficacy could command a 100% price premium for long. But we know consumers don't pay for these treatments, except through insurance.


So why would insurance companies pay for more expensive treatments with similar efficacy? Only, I believe if there is a financial incentive, or government dictate to do so. The financial incentive would be higher health costs result in higher insurance premium, which is the life-blood of the insurance companies investment portfolio.


Is there some government mandate to provide proton-beam therapy? I wouldn't be surprised since the government has no problems forcing priests to hand out condoms at communion (or something like that).


Stories like this, I believe, are designed to point out what seems to be an obvious flaw in the market, and then leads to their pre-ordained conclusion that a dis-functioning market can only be corrected by more government control.


I look at stories like this and believe we are missing something basic in the analysis. To me, at least some of the basic stuff we are missing, is there is very poorly functioning market in health care and the distortions are partially driven the nature of health care procurement via tax deductible employer-sponsored insurance plans and the high degree of government control of prices.


(Thin stuff, old ground).




Supply-driven medicine

Austin Frakt flags a noteworthy study in the Archives of Internal Medicine that looks at who receives the most expensive care for prostate cancer. It had little to do with which treatment was better - and everything to do to with what kind of treatment patients lived closest to.

"No prostate cancer has been proven superior to the others," the study notes. But there are significant differences in costs: Proton-beam therapy for the average 60-year-old man will cost $63,511. Radiation treatment's price tag is nearly half that, at $36,808.

So who gets which treatment? This paper looked at about 19,000 men being treated for prostate cancer across California, and then looked at the availability of each treatment. What it found was those who lived closer to a facility with the more expensive proton-beam therapy were more likely to receive such treatment.

"To our knowledge, we show for the first time that the availability of a technology, in this instance a proton beam facility, in one's HRR is associated with a higher likelihood of receiving proton beam therapy compared with those living in an HRR where this technology is not available," the study concludes. "A single physician might explain the higher-than-expected rate of proton beam therapy in the Redding, California, HRR, since there are relatively low numbers of overall patients from this area."

This isn't exactly shocking news, that patients with easier access to more expensive treatments tend to use those therapies. It also likely speaks to some economic divides, with those in more affluent areas of California having easier access to proton beam treatment. It's notable though, in that it highlights how much of our medical system is driven by supply: When new, more expensive treatments become available we start using them, even if there isn't necessarily a noticeable improvement in health outcomes. Or, in the immortal words of Ray Kinsella, if you build it, they will come.

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Tuesday, March 13, 2012

Labor Woes for the US, and Obama


I wonder if even the improving employment situation is good enough for Obama's re-election. I say this after reading most of Chapter 6 of the 2012 Economic Report of the President, "Jobs and Income: Today and Tomorrow."

I'm not making any comment on the policy or fiscal impact of Obama on the economy. Rather, I'm looking at the current employment situation and wondering if even an improving economy will be enough for Obama to win.

This is the chart we all know and dread, the unemployment rate. The usual remark from Obama supporters is the trajectory is the only thing that matters, and they point to the Reagan re-election in 1984. But every election is unique. While employment was high during Reagan's re-election, it was coming down, and coming down sharply. Also inflation, (not pictured) was also coming down sharply. Size nor trajectory are all that matter.

This chart is also familiar to many of us, and shows the median duration of unemployment and the percent of long-term unemployed. Something definitely is different about this recovery. Even with unemployment coming down, the long-term unemployed is high and the amount of time the unemployed are unemployed is also high. 

What hasn't been happening in this recovery is the normal amount of labor market movement. In a normal economy there is a lot of labor force movement. People quit their jobs; they find new jobs. Prior to the recession there were about 5 million people per month leaving jobs and finding jobs. This fell to less than 4 million per month during this recovery and just hasn't bounced back. People are stuck. I look at the decline and think of it as fewer opportunities for everyone, not just the employed, to move. I'm wondering if there isn't some impact from housing prices and owners being unable to move because they are upside down on their mortgages. I've read some studies disputing this, but I'm not ready to reject the theory.

So I wonder how the electorate reacts to this. Is it enough that unemployment is coming down? Is it coming down fast enough? Is long-term unemployment too high. Is there enough activity in the labor force for people to feel like there are opportunities to move? 

I still think Obama is the favorite to win. But...


Money and Politics


This article from the Washington Post caught my eye, "2012 GOP contest shaping up to be cheapest race in years," 

"Lost amid all the talk about millionaires influencing the 2012 election is a striking fact: The Republican primaries are shaping up as the cheapest and most financially depressed presidential nominating contests in years."

I found it particularly amusing since, also in today's Washington Post, Dana Milbank had an editorial on the baleful influence of Super Pacs, " Liberal superheroes don’t exactly have super PACs shaking in their boots." You wonder what his reaction was, if he reads the Post, that is.

I discount this whole sturm und drang over campaign financing, and regard most of it as a way to protect incumbents. Even with the Republican races it's hard to tell the impact of money on the outcomes. Perry in theory had access to piles of money, but never gained traction. Gingrich and Santorum are being financed by Adelson and Friess, yet can't break through. Romney has even more money yet can't really get the full support of the party. Just what is the impact of money on this race so far? Then again, given the story in the Post this morning, maybe the issue is they aren't spending enough money.

Does money drive support, or does support drive money. That is, Romney may have more money because he has more (rich) supporters. From a marketing standpoint, my guess is people are less prone to support rich candidates, or candidates funded by a handful of rich benefactors because they figure why give time and money since the candidate will just get it from his rich friends, or his/her bank account. See Meg Whitman, Carly Fiorina, Linda McMahon, while Obama had lots of little supporters which also translated into a fervent base of acolytes.


From Via Meadia: NY Suicide Caucus Votes Down Cuomo Pension Reform

NY Suicide Caucus Votes Down Cuomo Pension Reform

If you needed more proof that arithmetic-deficient politicians and dysfunctional government are largely to blame for the disastrous state of New York's finances, Albany Democrats have just supplied it.

New York's Assembly Democrats have voted down Governor Cuomo's pension reform plan, hammering yet another nail into the state's financial coffin. The Assembly refused Cuomo's suggestion to raise the retirement age from 62 to 65 even though the governor stressed that his plan would save hundreds of billions of dollars in costs toward a pension plan expected to consume 35 percent of the government's budget by 2015. In 2001, it was 3 percent.

Cuomo is a canny politician and is vested with strong executive powers; he has hinted that he may still push his plan through by forcing a government shutdown and implementing pension reform by supra-legislative means. But his common sense – he makes his case by explaining that without pension reform, now, thousands of public employees will be laid off, once the state's funds run dry – isn't enough to keep New York's legislature focused on the needs of the people they allegedly serve.

Wars against arithmetic don't end well.

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Monday, March 12, 2012

What Would You Do with JACHO


I've been mulling over your piece on JACHO. I've read of this study about doctors not washing their hands. Reminds me of the Seinfeld episode where a Junior Mint is accidentally deposited in a body cavity during surgery.

What would you do about JACHO, if anything, if you were king of the world?


Are Reporters Just Too Lazy to Check?


Secretary of the Interior Ken Salazar was asked at a press conference today how he would answer Republican charges that oil and gas production is up on private lands but not public lands. Salazar responded, "Ed, I would say that those attacks are simply wrong. The fact of the matter is that we are producing more from public lands, both oil and gas, both onshore as well as offshore, than at any time in recent memory."

Are reporters just too lazy to check? Is Secretary Salazar relying on that laziness?

From the Department of Interior Office of Natural Resources Revenue. (Graphs are mine. Data is from the site)

This is natural gas production on Federal lands (on and offshore) since 2001.

This is oil production on Federal lands (on and offshore) since 2001.

Natural gas liquids weren't mentioned by Salazar, but the Interior department also has data on NGLs. Be careful, units for NGL are in gallons, not barrels. (42 gallons per barrel).

I really didn't know which way this would turn out. It wouldn't have surprised me if the Republican claim were totally false.

What distresses me is there seems to be so little regard for the truth by both sides. And is it really that hard to check?


Sunday, March 11, 2012

America the Beautiful


I'm lucky enough to travel from time to time. Last week I was in Louisiana. Despite having been to New Orleans often enough as a child, I have never figured out the geography. Did you know there is a causeway about 30 miles long that bisects Lake Ponchartrain?

I drove across at night, with the moon shining on the Lake, but the pictures were terrible. The next day I was able to cross during the day.

I love America. I love the unspoiled nature like the Grand Canyon. I love the man-mades structures that let us enjoy and manage our environment, like the causeway over Lake Ponchartrain. I love the canyons created by the skyscrapers (do we use that word anymore?) in NYC.

We are a blessed and special people to have such beauty all around us.


Not-So-Crazy Republicans by Ross Douthat


I enjoyed this piece from Douthat this morning.

"WITH Super Tuesday in the books, the time has come to praise that most mocked, maligned and misunderstood of Americans: the Republican primary voter.

It touches on some of the issues we have been mulling over about the GOP. One of the comments reads, "I don't think that most people believe that the Republican primary VOTERS are crazy... it's the party leaders and the candidates themselves we're concerned about. From the guys at the top (Boehner, McConnell, Cantor) to the fabulous four - these guys are giving their party the loopy label." (from borntorun45)

Mr. borntorun45, (who I have to believe is a 67-year old Springsteen fan) I think misses the point many Democrats miss and many of the chattering class miss: The leaders only serve at the will of the voters. There can be a temporary mis-match between the leaders and the voters, but our democracy will not let that stand for too long. It's a remarkably effective self-corrective system. 


Saturday, March 10, 2012

The Post Office and the Personality of Politicians


I can't argue with your anticipatory eulogy for the post office. The cyber age is surely its death knell. Whether or not Congress, no matter which party controls it,  will surrender its constitutional power to establish mail service is another matter.

I went to college at a place famous for producing politicians. Several of my roommates comtemplated political careers after graduation and one even ran for Congress (and lost). When I talked to him about the experience he provided two unforgettable insights; the first was the absolute necessity for any successful office holder to lie repeatedly. As a native westerner transplanted to East for high school and college, he had adopted most of the social values of his contemporaries. But he wasn't going to have any chance in his congressional district as anything of other than a gung ho gun advocate. The second was the relentless  driving force of money in politics, and how he spent most of his campaign time and effort fund raising. Since he hated begging for money from strangers,  it was clear to him that a career as an office holder wasn't meant to be, and he happily moved on tort law.

Politics on both sides of the aisle selects for folks willing to say things and do things that you and I would simply never accept.

It sounds like I'm making your argument about limiting government for you. If only those who argue so passionately in favor of limited government really believed what they say. More likely they're just in favor of their own set of pigs at the trough.


The Power of Voluntary Associations


Forgive my recent absence from our conversation. I plead a hectic week returning to work full of various unpleasantnesses; despondent trainees, dissatisfied journal editors, delinquent colleagues etc.

We've talked quite a bit, on occasion with no small amount of passion about the value and the downside  of government regulation. Medicine provides an outstanding example of what you have been arguing for. The Joint Commission on Accreditation of Healthcare Organizations Hospitals (JCAHO prounonced "jake oh) began as an outgrowth of the American College of Surgeons attempt to produce a uniform set of standards for doctors and hospitals. In 1918, less than 15% of the nations hospitals met the first published set of standards. By the 50s (that blessed post war Ozzie and Harriet era) standards had improved dramatically and the joint commission offered hospitals a voluntary path to accreditation.  In 1965, as part of Medicare, Congress accepted certification by the Joint Commission as a requirement for payment to hospitals participating in the program.

No one that I know questions the value and the necessity of JACHO, even though she is an annoying  mistress to please. And yet (you knew this was coming), JACHO alone does not seem adequate to the task of providing adequate safety for patients. Hospital culture, like any culture, can be highly resistant to change. It took a series of repeated undercover visits by the state department of health and the threat of sanctions to improve hand washing rates at my hospital to an acceptable level.


Sunday, March 4, 2012

These are a few of my favorite apps...


Let's talk about something important: Apps for the iPhone and iPad. Here are some of my favorites:

Day One. I've tried a number of journal apps including My Journal, but I love Day One. It syncs with Drop Box, my Mac, my iPhone and iPad. It has a clean interface, but can't do tables, graphs and pictures, yet.

Evernote. Remember everything. Evernote also created an extension for Chrome, (and Firefox I think) called Clearly. Also marvelous, but not an iPhone/iPad app.

I used to use Instapaper much more before I found Evernote, but I still like Instapaper.

Feedler Pro. I use this every day. It takes all the blogs I subscribe to via Google Reader and cleans them up, in a standard font size. Fantastic. Love Feedler Pro.

Goodreader reads just about everything you can think of: pdf's, word doc, excel files, Apple .numbers, Apple .pages, power points, text files. I can and do link to DropBox and my Mac at home. I read the US military wanted to use it until they found out it was made by a Russian company. 

Netflix is Netflix, but you can get it on your iPad. Bored at work? Fire up some Friday Night Lights!

I also love Zite, PocketPedia2, HanDBase, the Wall Street Journal (they really did it right. Still the best app for digital newspapers, bar none), Convert, Band of the Day, Waze and Epicurious, and of course, Blogsy, which allows me to blog via the iPad


The Limbaugh Effect


I could not  agree more with your assessment of both the politics and the substance of Limbaugh's latest descent into tastelessness. But I argue that the pathogenesis of such behavior is intimately linked to the loss of the influence of moderates and the ascent of the most right wing elements of the GOP.  I can understand your contempt for the likes of Ryan Lizza given your politics, but look at who else is making the same point about the long term hazards of the GOPs continued obsession with marginalizing itself.

It isn't good for the country to have one of its major political parties controlled by crackpots. This is true for both parties And while such lurches in one one direction or the other are inevitably corrected by devastating losses at the polls, the country suffers.


Rush Limbaugh is a Big Fat Idiot.


I suspect the number of intelligent things Al Franken has said can be counted on one hand, and one of them is the title of his book, "Rush Limbaugh is a Big Fat Idiot."

Obama handed the Republican's a lay-up with the HHS decision on birth control. The Republicans could have first portrayed this as a violation of religious freedom. Then they could have pointed to the decision as the inevitable consequence of Obamacare and asked, what next will the government demand you do and what next will the government demand you can't have. Because if the law says an insurance company or employer is required to provide something, certainly it can prevent an employer or insurance company to not provide certain services. Heck, they could have shifted the debate by invoking death panels again, and as proof it was possible by pointing to this decision.

But no, too many Republicans and that big fat idiot focused on the one aspect of the decision that is guaranteed to resonate least with independents and guaranteed to turn the stomachs of a vast majority of Americans. Roe v Wade is settled and will not change. People will use birth control, that is settled and will not change. Why are we even talking about this when there are such larger issues to focus on?


What's More Fiscally Responsible: Obama's Real Budget or the Interpretation of the Republican Candidate's Campaign Speeches?


You asked me if there is "any reason to believe that the any of the current Republican alternatives will be more fiscally responsible than the current occupant of the White House?" and cite the CRFB report that analyzes the actual budget Obama submitted to Congress to  the "detailed, albeit still incomplete, set of proposals to reduce both taxes and spending," from the Republican candidates.

My simple answer, except for Ron Paul, is no, I don't have reason to believe they will be more fiscally responsible. But I'm not going to pay too much attention to the CRFB report, which is comparing a real budget to an interpretation of an outline of a portion of a budget. So of course, it's a totally unfair comparison, to both Obama and the candidates. I know Krugman and Klein really enjoy the CRFB report because it helps remove the cognitive dissonance they have over Obama's purported fiscal responsibility.

Generally, they seem to have the same something for nothing promise employed by our politicians since FDR that have led us to budget deficits that are now 10% of GDP. And it makes it more likely your prediction of how it will end is correct. It's very disappointing.


Saturday, March 3, 2012

Ryan Lizza is Confused


I read the New Yorker piece by Ryan Lizza you suggested. I usually don't read many pieces like that because more often than not I get bored. But since I respect your opinion, I gave it a shot. Boredom won.

It just seems like another one of those ever-present lefty pieces that desperately attempts to self-validate its own opinion by calling the right crazy or extreme.

Along the way he repeats the conventional wisdom that Romney is hated by his party, despite the high likelihood that Romney is going to win the nomination. Just who does Lizza think is voting for Romney? Someone must be voting for him since he has more delegates than anyone else. Someone must be working for him since he has a better organization than anyone else. I just don't understand how Lizza and others think Romney is winning without support of "The Party."

Then he gets really confused because he characterizes the Republican Party as "almost entirely composed of ideological conservatives," but earlier he called Romney's position, "unreliable conservatism," and to point out again, ROMNEY IS WINNING. So how can this unreliable conservative be winning in this party that is a super-majority of ideologues.

Somehow this "shift to the right" has "brought risks" and the example Lizza brings up is absurd: the 2010 election. This was the election the Republicans "shellacked" the Dems. But Lizza is convinced the Republican strategy has risk because.... they didn't win the Senate and capture even more of the House? I mean, this is all so laughable. The Republicans nominated some truly loopy candidates: Sharon Angle, Christine O'Donnell. And the loopy candidates lost. But at times it was close. Remember this. Reid beat Angle 50% to 45%. In the 2004 election, the election Bush beat Kerry, Reid won with 61%. How is it Lizza concludes the shift to the right as brought risks when the Republicans nominate a completely incoherent candidate to run against the Majority Leader of the Senate, and he has to sweat it out. Good God, which party is the one really running risks?

Lizza has conjured up a Republican Party out of touch with America, but one that gets more votes than the Dems, but Lizza's solution to correct this mistake of not winning enough is to nominate more Democrat-looking candidates. Huh?

He says political parties aren't supposed to act suicidal, implying the GOP is acting suicidal. But what single piece of evidence does he have that the GOP is acting suicidal? Maybe the Republicans will lose the House, but I've seen little to predict that. Maybe the Republicans won't take the Senate, but it still seems most predictions are for the GOP to re-take the Senate. And as far as the Presidency goes, I still think Obama will win, but what surprises me is how weak he still seems to be. So where is the suicide?

I really don't like defending the Republicans. I don't think they, as a massive over-generalization, are as free market as I. I don't care much for cultural issues and cringe whenever they start preaching morality to me.

But let's say everything Lizza says is true. So what. The Republicans will lose, which Lizza I suspect would applaud. And at that point the Republicans would get a new message, get a new messenger or get a new party.