economics
mikethemadbiologist | February 17, 2008Sara Robinson continues her assault on the lies surrounding healthcare. One target--'rationed' healthcare.
We'll have rationed care
Don't look now: but America does ration care. And it does it in the most capricious, draconian, and often dishonest way possible.
Mostly, the US system rations care by simply eliminating large numbers of people from the system due to an inability to pay. Last year, one-quarter of all Americans didn't go to a doctor when they needed one because they couldn't afford it. Nearly that many skipped getting a test, treatment, prescription, or follow-up appointment…
mikethemadbiologist | February 16, 2008The NY Times asks about Peter Peterson, "Can the co-founder of the Blackstone Group who has scored riches from a controversial tax break emerge as a credible voice in favor of fiscal constraint in Washington?" Of course, he can. He just has to be clever about what he means by "fiscal constraint" (italics mine):
On Friday, Mr. Peterson will unveil the Peter G. Peterson Foundation and announce his plan to allocate his newfound billions to projects that will increase public awareness of fiscal imbalances, Social Security deficits and nuclear proliferation.
To assuage his guilt--let's call him…
purepedantry | February 13, 2008I don't know if I mentioned this but I am taking a course in introductory economics in my spare time. (Just because I love econ so much!)
Anyway, this is probably a bore for the economists out there (since it is something you learn on the first day), but I just learned what a Production Possibilities Frontier is and felt compelled to make one for myself.
A Production Possibilities Frontier (PPF) is a diagram that illustrates the trade-offs between the production of two goods for an individual or group. The production of good A is on one axis, and the production of group B is on the other.…
purepedantry | February 11, 2008Economics: is there anything it can't do?
Here are some economists speculating about why long distance relationships fail. Their answer: too much money.
Instead, says Mr. Cowen, people in long-distance relationships may spend more money than local lovebirds.
How is that possible? The answer, says Mr. Cowen, lies in the Alchian-Allen Theorem. Developed in 1964 by economists Armen Alchian and William R. Allen, the theorem states that adding a per unit charge to the price of two substitute goods increases the relative consumption of the higher price good.
In layman's terms, "you don't take a…
mikethemadbiologist | February 7, 2008The Blue Devil wonders why Obama is raising more money than Clinton. One reason is that Obama supporters, on the whole, are significantly wealthier than Clinton supporters.
If you look at three big donor states, California, Massachusetts, and New York, on the whole, Obama has less support as you go down the income ladder. Wealthier people have more money to give, particularly since many mid-sized and small contributions are often 'impulse buys.' When you're treading water, you don't give to candidates on a whim.
This pattern also holds up in poorer states.
I'll leave it to you to figure…
mikethemadbiologist | February 7, 2008While everyone is worried about who is more TEH SUCK, Obama or Clinton, there's a stimulus package working its way through Capitol Hill. One of the arguments revolves around what is the best way to stimulate the economy. But that's the wrong way to pose the problem.
There isn't a single economy; rather, different people experience different economies. For example, this editorial from The Back Bay Sun describes the economy of the Back Bay, Boston (a very wealthy neighborhood):
The nation is feeling an economic pinch and Goldman Sachs chief economists are all predicting a recession but so…
mikethemadbiologist | February 3, 2008Rogue Columnist describes how newspaper consolidation--a result of increasing laxity of anti-trust decisions--has damaged newspapers:
-The creation of monopoly markets and, through consolidation, cartels of newspaper ownership. Economic history shows us that monopolies and cartels always commit suicide. Divorced from the imperatives of real competition, monopolies easily slip into a self-centered world of bureaucratic conformity and a desire to protect the status quo. They became slow and rigid, in other words, road kill for competitors.
-Consolidation of newspapers into large, publicly held…
mikethemadbiologist | January 30, 2008New England Patriots quarterback Tom Brady is doing just fine. From The Boston Courant (Jan. 26, 2008):
Tom Brady, the New England Patriots star quarterback, is a winner on and off the field.
Brady has sold his 314 Commonwealth Avenue condominium for $5.3 million, as reported last week by Banker & Tradesman, turning an approximately $1.2 million profit on the sale to a surburban couple.
Brady purchased the three-bedroom condo in the Burrage House, located at the corner of Comm Ave. and Hereford Street, for $4.1 million in 2004. The 10-room, 3,422-square-foot home comes with three-and-a-…
mikethemadbiologist | January 29, 2008If you're like most sentient humans, you don't care whom the NY Times editorial board decided to endorse for president. But the 'logic' behind the endorsement of Clinton is revealing. The Mandarin Class still doesn't get it. About Clinton's foreign policy experience, the Times editors write:
It is unfair, especially after seven years of Mr. Bush's inept leadership, but any Democrat will face tougher questioning about his or her fitness to be commander in chief. Mrs. Clinton has more than cleared that bar, using her years in the Senate well to immerse herself in national security issues,…
mikethemadbiologist | January 26, 2008It's interesting how we're trained to tolerate or engage in a lot of behaviors that, rationally, don't make much sense. Workers who realize that, in today's job market, loyalty to a company doesn't make much sense, are accused of disloyalty by their employers, even though those same employers will let employees go at the drop of a hat. Another economic morality tale is that letting a bank foreclose on your home is an awful thing, even when foreclosure makes economic sense:
...why should Mr. Lewis be "astonished" that people who can pay their mortgage refuse to do so when the home value is…
mikethemadbiologist | January 22, 2008
Erm, maybe not:
It takes real skill to simultaneously screw up munies and the stock market.
One can only hope that maybe some money floods back into the U.S. because of this.
mikethemadbiologist | January 21, 2008If you're in the U.S., unless you've been living in a cave, you're aware that major banks and investment firms have taken huge financial hits. As a result, they are laying off thousands of workers. This puzzles me.
I understand in the short term why these firms would slash payrolls (I'm not an idiot), but this implies one of three things about these firms' workforces:
These workers weren't needed, and should have never been hired in the first place.
These firms are firing more experienced workers with higher salaries, and replacing them with newer, lower paid workers (and hoping the lack of…
mikethemadbiologist | January 20, 2008That bond issue to build a new school or road just became more expensive. Say hello to higher property and sales taxes or cuts in services. Strap on the ol' thinkin' cap and I'll get to 'splainin' it.
Got it strapped on tight? Good.
If you're a municipality and you want to float a bond to build a water reclamation plant, you would want the lowest interest rate possible, just as you yourself would if you were buying a house. Many municipalities don't have good bond ratings (or as good as they would like), so they therefore pay higher interest rates. This opened the way for municipal bond…
mikethemadbiologist | January 19, 2008Physioprof simplifies it for us:
Shills for Wall Street gamblers said that, even though prices for shit that ordinary people need to survive are skyrocketing, prices for shit they can do without are not going up quite as fast, thus justifying actions by the Fed that are going to further increase the rate of skyrocketing price increases for the shit that ordinary people need to survive, while at the same time floating a massive cash infusion to the Wall Street gamblers to bet with so they can try to keep making the same obscene profits they had been, supported by, and ultimately ended by,…
mikethemadbiologist | January 11, 2008Ian Welsh makes a very important connection between personal economic incentives and corporate behavior:
What would you do, or rather, what wouldn't you do, if you knew that by working hard for five years you'd have enough money that you need never, ever, work again for the rest of your life? Not just that, but for most executives, you would be rich. Want a house on the Riviera? Want to spend the rest of you[r] life travelling? Have a hobby? Whatever it is, you'll be able to indulge it, because you'll be rich and money is freedom.
So even if, in the end, Merrill Lynch was going to be stuck…
mikethemadbiologist | January 4, 2008PhRMA, the lobbying group for the pharmaceutical companies, claims that drug companies spend more on research than on advertising. A recent study from PLoS Medicine debunks this claim:
The value of our estimate over these others is that it is not based on extrapolating from annual reports of firms that are both diversified and multinational. Our estimate is driven by quantifiable data from highly reliable sources and concerns only the promotion of pharmaceutical products in the US. The derivation of our figure is thus transparent and can form the basis for a vigorous debate.
From this new…
purepedantry | December 22, 2007I mentioned in an earlier post on Ron Paul that one of the policies he advocates that I do support is a return gold standard. I used to think this for two reasons -- both moral rather than economic principles, but after reading a post by Megan McArdle I changed my mind.
The two reasons that I fundamentally distrust fiat money are the following:
1) In contrast to a great many people, I consider money a moral good. Honest people trade the value of their labor through the means of money, and in a fiat money system that moral standard is degraded. Money is a far superior means of trade than…
mikethemadbiologist | December 15, 2007At least, that's what the latest CBO data suggest. Paul Krugman summarizes the change in after-tax income between 2003-2005:
Here's what the numbers say about percentage gains in after-tax income from 2003 to 2005:
Bottom quintile: 2%
Next quintile: 2.4%
Middle quintile: 3.9%
Fourth quintile: 3.7%
Top quintile: 16%
Top 10%: 20.9%
Top 5%: 27.7%
Top 1%: 43.5%
It was a boom, all right -- but only for a few people.
Once you get to the top fifth it gets very interesting. Compare the top quintile increase of 16% to the top tenth increase of 20.9%. When you consider that the top quintile contains…
purepedantry | December 14, 2007An investigative report in the Cleveland Plain Dealer looks at the FDA Fast Track. For those who don't know, the FDA Fast Track was created to accelerate the drug approval process for drugs targeted at under-treated diseases. Yet there is a bit of debate about whether Fast Track drugs are approved more quickly or are more likely to be approved than other drugs.
However, this report suggests that news that a drug has been Fast Tracked has created buying frenzies on Wall Street that have made people a lot of money:
Overall, since 1998, Fast Track announcements for nearly 200 drug treatments…
purepedantry | December 14, 2007Alan Greenspan argues in the Wall Street Journal that the housing bubble was the direct result of geopolitical changes and their effects on long-term interest rates. Therefore, some correction was inevitable:
The root of the current crisis, as I see it, lies back in the aftermath of the Cold War, when the economic ruin of the Soviet Bloc was exposed with the fall of the Berlin Wall. Following these world-shaking events, market capitalism quietly, but rapidly, displaced much of the discredited central planning that was so prevalent in the Third World.
A large segment of the erstwhile Third…