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Docs vs. Glocks August 8, 2012

Posted by The Armchair Economist in Commentary, Health Care, Medicine, Politics.
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Glad to see more politics being fought by proxy.  This time the second amendment being fought through patient care.  With the sue happy laws in Florida – I’m just waiting for that first suit where a doc gets sued by a family because they didn’t ask a depressed patient about having firearms in the house. Do gun owners really care that much about being asked? If you are a straight gun toting conservative, would you be more offended at me asking if you have MWM sex or if I ask if you have a gun in your house (to be clear: Id like to reserve the right to ask both)

Controlling Health Care Costs November 18, 2011

Posted by The Armchair Economist in Economics, Fix Health Care, Health, Health Care, Medicine, Technology.
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I cam across an Op Ed on controlling health care costs through bundling.  I’ve read about novel health systems that focus on high risk/frequent fliers that take daily vital signs via telemedicine and other ways to prevent costly admissions (ie: daily weights for CHF patients, daily in person clinic visits to monitor healing wounds in diabetics).    With the enormous cost of admissions, and inefficient management of patients as inpatients (ie: often working up problems that can be worked up/treated as outpatients)  I see this as a potential way to reduce the cost on our health system.

One particularly interesting statement:

Half the population — mostly young people and healthy adults — consumes just 3 percent of costs, while the sickest 10 percent consumes 64 percent

It would be interesting to see where this information comes from – and to compare insurance company statistics to see what percentage of health care costs are consumed by the sickest 10%.   Although I am a proponent of capitalism and the free market, there are areas (health insurance being one of them) where I feel that the free market cannot work.  Too many inefficiencies – administration/marketing/overhead amounting to as much as 25% of costs being directed to non healthcare related costs, too much incentive to game the system (your legal obligation is to minimize payouts to the insurees and to maximize profits).    I’ll elaborate on all of this in a future post (hopefully)

Rethinking Immigration May 1, 2009

Posted by The Armchair Economist in Uncategorized.
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I’ve always been pro immigration.  A believer in the free market, I felt illegal immigrants are merely providing a cheap labor force for service oriented jobs that our own citizens refuse to fill at whatever specified wage.  (for example; cooking, cleaning,  harvesting, constructing mcmansions, etc).  Those against immigration argue that illegals increase the tax burden on regular citizens because they are utilizing public services (ie: public transportation, schools, health care, garbage collection) without paying taxes.  In a way, the illegals ARE paying for it (in a much more direct way than taxes), in allowing everyone in this country to enjoy lower costs for wherever these immigrants are employed (food, housing, cleaning).  Thus its a wash in my mind, and everyone benefits: we get our cheap labor, and the immigrants get a better job than they would in their home country.  Similarly, the country these immigrants come from benefits from the remittances sent home act as monetary injections to stimulate the local economy.

However, having spent several weeks in Guatemala and having spoken to several people and hearing different perspectives, I’m wondering if the countries supplying the illegal immigrants would benefit in the long run with more stringent anti immigration laws from the US.

The basic premise for the illegals venture into the US is obviously to find work.  Although they make a wage most US citizens consider unlivable, these wages are in reality a fortune for these folks as well as their families back home.  In fact while most Americans tend to look down upon illegals, they actually hold a higher social status in Guatemala because they have a high paying  and stable income.  The economic situation is fairly bleak in guatemala, with most guatemaltecos being severely underemployed (I’ve heard that 27% live in extreme poverty(<$1/day) and another 40% live in poverty (~$2/day)).  Similarly, although there are labor laws and minimum wage laws, they are rarely enforced.  It is not difficult to understand the motivation for taking the risk of violence, death, and deportation a for the chance to work for $10/hr at a construction job.

To understand this, it helps to have some background on Guatemalan politics.  The country is essentially run by an oligarchy of ~35 families that dominate the economy.  Similarly, the government and congress is dominated by the oligarchy resulting in a facade of a democracy. In the time I was here, there was an instance where we had to convert our medical brigade mission from seeing sick patients to merely doing well check visits for kids at a school because the Presidents wife was at a nearby village handing out money to garner support in the next election, thus all of the adults in our village went over there to get their share.  Because so many of Guatemalans have trouble living day to day and are generally fairly politically unsophisticated,  the future of their country and the potential implications of political change aren’t exactly at the forefront of their minds.  As a result the oligarchy continues to dominate politics resulting in business friendly laws that minimize taxes (resulting in poor social services – poor health care access – poor education system reinforcing the cycle of an undereducated population and the persistence of a ruling oligarchy with a sham ‘democracy’).  Even when there are laws it has no bite, for example the minimum wage for an adult male is something like  48Q/day (~5$) the real rate is about half of that ~24Q/day.

Bringing this back to immigration, the appeal of the american dream means that in some villages there are almost no men.  This results in villages that consist almost entirely of the elderly, women, and children.  The need to take care of their children means these women can’t enter the labor force to find jobs.  It is also very common for the illegal immigrants, who are away from their families for months/years at a time, to grow distant from their families, oftentimes meaning they will look for companions in the US, resulting in dwindling funds being sent back to their wives/children.  Additionally, the remaining family in Guatemala become dependent on this source of income and are less motivated to find stable work.

Consider this dilemma. Remittances from Guatemalan emigrant topped $3 billion in 2005 (totalling 10% of GDP in 2004)exceeding the total volume of exports or income from tourism, averaging to ~$306/month per family.  The reliance of the Guatemalan economy on remittances reinforces the status quo, maintaining an artificial sense of social stability, preventing any real economic or social impetus for political action to replace the oligarchical rule that is preventing Guatemala from ever establishing the infrastructure necessary to progress beyond a third world nation.

That being said, this perspective is obviously heavily skewed towards guatemala and not all illegal immigrants are guatemalan. Just some food for thought to add to the mix of the immigration debate.

The Fed just doesn’t get it.. February 9, 2009

Posted by The Armchair Economist in Business, Commentary, Consumerism, Economics, Politics.
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Late 2008, the the Fed gave out ~$350b, about half of the $700b ‘bailout’  Congressional hearings showed that  there was very poor accountability towards how banks spent that money.  Rather than  loan it out, banks just hoarded it.  When asked why they weren’t loaning the money, they said that they are increasing loan requirements due to the poor economic outlook.  In other words, the banks are doing what they should be doing… assessing the risk of nonpayment to potential borrowers.

Today, the Fed announced an overhaul in how the rest of the bailout money will be used: it will be used to buy back the ‘toxic assets’ that are supposedly weighing down the banks balance sheets.  How does this change the fundamental problem of banks not loaning the money out?  (more…)

Some quick points.. September 30, 2008

Posted by The Armchair Economist in Commentary, Economics, Politics.
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I’ve been studying for my board exams so haven’t been able to post.. but some quick points:

I’m glad to see the bailout fail in the house yesterday.  Unfortunately rather than scratching the current plan, they are merely adding more clauses to it to gain more votes.  While the stock market reaction was expected, I am also disgusted that politicians are using the market losses to justify passing the bailout.  In case people weren’t aware, investing in the stock market means inherent risk.  Using the bailout to prop up stock prices seems a tad short sighted, doesn’t it?  Perhaps our problem has nothing to do with decreasing housing prices.. and the root lies in our systemic aversion to accountability?

An Overlooked Solution: Some lessons from Sweden September 23, 2008

Posted by The Armchair Economist in Business, Commentary, Economics.
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It seems as if Paulson’s plans aren’t getting through Capitol Hill as easily as easily as Paulson and the Bush administration would like it to. Rather than blindly react to a calamity (as they did after 9/11), cooler heads are prevailing. In a way, the quick announcement by the Fed for a ‘Bailout’ last Friday fulfilled its main goal.. of stabilizing a market that was running on fear. While the Senate Banking Committee is busy fleshing out the details of the bailout, I wonder why no one has brought up a strategy that was utilized by the Swedish Government in the 1990s to stabilize their own economy after a similar housing bust. (more…)

Open Letter to Senator Charles Schumer September 20, 2008

Posted by The Armchair Economist in Business, Commentary, Economics, Politics.
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The Honorable Charles Schumer,

I am writing to you, as a constituent and resident of New York State, to share with you my thoughts and concerns regarding the Federal Reserve’s action in response to this week’s financial upheaval on Wall Street.

While I understand the necessity for swift and decisive action in order to stabilize financial markets, the actions outlined by the Federal Reserve do nothing to address the root cause of the sub-prime lending debacle. It is of my opinion that our problems derive from monetary policy driven by our exclusive reliance on continual economic expansion to fund increasingly large government programs (and an unpopular war), a policy that favors growth over stability. (more…)

Fed bailout of Wall Street: Reverse Redistribution of Wealth September 19, 2008

Posted by The Armchair Economist in Business, Commentary, Economics.
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Fiscal conservatives (and the rich) have always cried foul over progressive tax policies and socialist policies(or as they see it, the redistribution of wealth from the rich to the poor). Today, we are witnessing perhaps history’s greatest reverse redistribution of wealth.. from the lowly taxpayer/common man to those who gambled on risky bets (and lost).

While this bailout was necessary to stem the fear running in on the Street and risking catastrophic damage to the US/world economy (think: companies going bankrupt, people losing jobs, less tax revenue, less social services.. depression perhaps), there is no debate that this is basically a free ‘put’ option to gamblers who were caught holding the bag. (more…)

From a Feminist: Vote for Palin because shes a Woman! September 17, 2008

Posted by The Armchair Economist in Commentary, Politics.
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I came across an interesting post that seems to be a site for Ex-Hillary supporters who are going to vote for McCain/Palin. Rather than put forth any legitimate (am I being sexist since I’m a man?) reasons, this is what she is saying (I will extract the relevant points to save you from the wall of text):

…American women have NOT come a long way, baby… the overwhelming thing we all must do is to elect more women to local, state and federal government. Why? Because of the 30% Solution…. well-recognized fact that no significant progress is ever made on womens’ issues in any country unless the federal government is made up of at least 30% women. Our federal government is currently made up of 17% women, which explains why we have had such a difficult time moving forward… If 30% of the Senate and House were women, you can bet your increasingly-less-valuable paycheck that both parties would be feeling a lot more responsible to that constituency…. The Democrats have utterly failed to demonstrate their commitment to womens’ rights by refusing to nominate the woman who was the clear winner of the primaries this year… The main reason McCain picked Palin was to satisfy his conservative base, but he was also extremely aware of the pissed-off faction of the Democratic Party that has finally seen the impenetrably sexist nature of the Party we thought was our friend and advocate…. McCain and the Republicans are willing to elect a woman to the Executive Branch for the first time in the history of our country. They are advancing the 30% Solution. Obama and the Democrats are not, and are not. Do you get it now, Obamans?… It is time to acknowledge that, as Hillary said, Womens’ rights are human rights. And it is time to cast your vote for a woman this Election Day. I am casting my vote for two women, McKinney/Clemente, unless McCain comes close enough to win New York, in which case I will vote McCain/Palin at the top. And after this election, I am only casting my vote for women, unless I have no alternative.

Is it me or does anyone else find it highly ironic and hilarious that someone who is out to advance women’s right is going to vote for a woman SIMPLY because she is a woman (rather than based on her abilities/accomplishments)? In their short sighted desire to see a woman in office, they are willing to vote for a person that has acknowledged a woman doesn’t have rights to her own body. How far back does this set the women’s lib movement?

MyGallons.com: Profiteering off the frenzied fear of the weekly fillup July 4, 2008

Posted by The Armchair Economist in Commentary.
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Recently, I’ve been reading countless stories about consumers making ridiculous financial decisions to trade their SUVs for something more fuel efficient, anything ranging from a Smart car to a motorcycle.  The sad part is that for many of these people, they are upside down on their SUV (ie: they owe more on the SUV than the car is worth) so they are paying HIGHLY inflated prices for the gas sipper they are trading into (I’ve heard loans of 39k for a 27k Prius!)  Insane, but this isn’t normally enough to get me to post, but today I came across an article by Kimberly Palmer, of the Alpha Consumer blog on a company called MyGallons.com.

The premise of this company is that you can buy gas at today’s price and use it later, when gas prices increase even more.  Sounds good right?  (if you have any kind of training in finance you probably already see the faults).  The fine print includes: Annual Fee of: $29.95, ($39.95 if you don’t want to give them permission to automatically deduct from your credit card), a $1.95 ‘fill up’ fee if you use a credit card (the only accepted payment method), in addition to other fees (ie: an overdraft fee).  I’ll leave it to you to do some back of the envelope math to see how much ‘savings’ you need to negate the transaction costs.

So what happens if the price of gas goes DOWN?  The FAQ helpfully states: Gas prices move up and down all the time. If prices drop you can wait for them to go back up in the days or weeks ahead. (more…)

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