Sunday, March 28, 2010
Bloomberg reports that top-rated private business pay less!
Obama Pays More Than Buffett as U.S. Risks AAA RatingBut Paul Krugman pooh poohs the whole thing...
The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.
Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg.
Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market...
"It’s a slap upside the head of the government," said Mitchell Stapley, the chief fixed-income officer in Grand Rapids, Michigan, at Fifth Third Asset Management, which oversees $22 billion...
Investors demand 0.60 percentage point more in yield to own 10-year Treasuries than German bonds of similar maturity, Bloomberg data show. A year ago, debt of Germany, whose deficit is 4.2 percent of its economy, yielded about half a percentage point more than Treasuries...
Moody’s Investors Service predicts the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K. America will use about 7 percent of taxes for debt payments in 2010 and almost 11 percent in 2013, moving “substantially” closer to losing its AAA rating, Moody’s said last week...
“It’s a manifestation of this avalanche, this growth in U.S. Treasury supply which is under way and continues for the foreseeable future, and the comparative scarcity of high-quality credit,” particularly in shorter-maturity debt, said Malvey, whose Lehman team was ranked No. 1 in fixed-income strategy by Institutional Investor magazine from 1998 through 2007.
Last year’s $2.1 trillion in borrowing by the government exceeded the $1.08 trillion issued by investment-grade companies, the biggest gap ever, Bloomberg data show. Malvey said the last time he can recall that a corporate bond yield traded below Treasuries was when he was head of company debt research at Kidder Peabody & Co. in the mid-1980s...
Yesterday I criticized the WSJ for writing as if a fairly small rise in long-term interest rates spelled doom, doom I tell you, for deficit spending ... maybe I can make the case a bit clearer by comparing the current scary, scary rate rise with something that happened back in 2003. Then as now, the economy was growing, but without yet generating job market improvements.Hmmm, let's try to recall stories about interest rates from 2003.
The rate rise that the WSJ is making so much of is an increase in 10-year rates from 3.67 percent on 3/22 (and 3.61 percent at the beginning of the month) to 3.91 percent on 3/25.
Now compare July 2003: the 10-year rate rose from 3.56 percent at the beginning of the month to 4.49 percent at the end.
Correct me if I’m wrong, but I don’t remember a lot of stories calling that spike in rates a sign of imminent US bankruptcy.
Hey, this was written then by a "terrified" Paul Krugman!...
... last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.Well, there's one!
A leading economist recently summed up one reason why: "When the government reduces saving by running a budget deficit, the interest rate rises." Yes, that's from a textbook by the chief administration economist, Gregory Mankiw.
But what's really scary, what makes a fixed-rate mortgage seem like such a good idea, is the looming threat to the federal government's solvency... [more].
Saturday, March 27, 2010
Phony products impress federal energy programAh, that's the answer, the regulators regulate themselves.
Fifteen phony products - including a gasoline-powered alarm clock - won a label from the government certifying them as energy efficient in a test of the federal "Energy Star" program.
Investigators concluded the program is "vulnerable to fraud and abuse."
A report released Friday said government investigators tried to pass off 20 fake products as energy efficient, and only two were rejected...
Tax credits and rebates serve as incentives to buy Energy Star products.
But the General Accountability Office, Congress' investigative arm, said Energy Star doesn't verify claims made by manufacturers - which might explain the gasoline-powered alarm clock, not to mention a product billed as an air room cleaner that was actually a space heater with a feather duster and fly strips attached...
Energy Star-certified air room cleaner that was actually a space heater with a feather duster and fly strips attached.
In addition, the four phony GAO companies were able to become Energy Star partners, giving them access to the program's logos and other promotional resources. Energy Star didn't call any of the companies or visit the addresses...
... the EPA and Energy Department told investigators in briefings that although the program is based on manufacturers' certifying their products meet efficiency standards, that efficiency is ensured through aftermarket tests and self-policing... [AP]
I'm so relieved that the regulators will now be regulating the entire nation's health care too.
Friday, March 26, 2010
What’s next on prohibited list?
Out with personal responsibility. In with laws banning things.
Or so it would seem as a sweep of prohibitory mandates have made their way into legislation.
But is it for the public good or simply political grandstanding?
In 2006, Mayor Bloomberg famously banned trans fat in restaurants and just this month New York state Assembly Member Felix Ortiz introduced legislation that would prohibit salt use in food preparation in restaurants throughout the state. (The assemblyman says he’d allow salt shakers on tables.)
The Department of Education banned home-baked goods at school fundraisers — in the name of good health — but allows the sale of packaged items like Pop-Tarts and Doritos.
"It leaves you speechless, it’s the most ridiculous ban on so many levels," said City Council Member Gale Brewer of the bake sale ban.
So are we becoming a nation of nanny-government interventionists?
"The ban thing is kind of weird," Brewer admits, referring to the "picayune and microscopic" nature of some of the regulations.
But while Brewer concedes that Libertarians might think government should back off, she does believe that bans have their place.
"There has to be someone who says, 'Wait that’s not a good idea.' If government doesn’t do it, then I don’t know who else will," she said.
Wednesday, March 17, 2010
For instance, how's the stimulus working out?
Has it really saved a lot of jobs? Been a bust? Is it hard to tell?
Are we better off for what it has accomplished, in spite of the over-$800 billion it is adding to the national debt? Or would we have been better off "taking our lumps" and saving the $800 billion?
The excellent Prof. Scott Sumner -- a specialist on the Depression, Japan's slump and such downturns -- frames things a different way. He points out there was a third option: stimulus that doesn't add to the national debt, monetary stimulus ... and that in fact monetary stimulus has been applied by the Federal Reserve anyhow, interacting with fiscal stimulus in ways that may be perverse.
Prof. Sumner, unkowingly and without granting his permission, contributes the following analysis...
~~~ quote ~~~
Everyone wants to set the debate up as follows:
1. Do you favor massive deficits or are you content to have the economy self-correct, risking high unemployment for several years?
... that is not the issue. Rather there are two distinct issues:
1. Is more AD [Aggregate Demand] desirable, or should we let the recovery take its natural course?
2. If we need more AD, is monetary expansion preferable to massive budget deficits?
Let's review a few simple ideas. Fiscal stimulus does not boost AS, it boosts AD ... So if fiscal stimulus is to help the recovery, it does so by exactly the same method as monetary stimulus - boosting AD.
I happen to favor more stimulus, although I understand that some thoughtful economists disagree with me.
I happen to think monetary stimulus is preferable to fiscal stimulus, and in this case there aren't any thoughtful economists who disagree with me. Not one.
If there was going to be one, it would be Paul Krugman. But even he admitted late last year that monetary stimulus is the first choice, and you only move on to fiscal stimulus is the Fed won't play ball...
We are running up trillions of dollars in debt precisely because the elected leaders of our country think we need more AD, and the Fed doesn't.
I understand the need for the Fed to be independent, but how about some honesty at least. If these inflation hawks really believe what they are saying, show some guts and come out and say "We are not doing more monetary stimulus because we feel a need to offset what we regard as excessive fiscal stimulus, and prevent it from raising the expected inflation rate." If they really have the courage of their convictions, then why not admit what they are doing?...
In February I said fiscal stimulus wouldn't work, as the Fed had some sort of nominal aggregate target in mind, and was going to simply offset the fiscal stimulus. And that is what happened.
When things looked scary, like a Depression was possible, the Fed announced its big program of buying Treasuries and MBSs.
Later in the year when things picked up a bit, and we were clearly going to avoid a depression, the Fed started furiously back-peddling. They started talking about ending the bond buying program and "exit strategies." Ask yourself this; what does that back and forth behavior tell you?
It tells me the Fed has some sort of implicit nominal target, and if the economy seems to fall short they'll pull out all the stops and flood the economy with liquidity.
That's why the $800 billion dollar fiscal stimulus was a complete waste of money; the Fed wasn't going to allow NGDP to fall much further than the actual 2.5% it fell. Shame on us for not figuring that out, and shame on the Fed for not explaining that to us...
~~ end quote ~~
Don't anyone answer "liquidity trap". As Krugman and Bernanke both long pointed out during Japan's deflation, a government can always depreciate the currency a bit to cure that. And monetary policy worked potently in the US during the Great Depression, as pointed out by Romer (and Sumner, visually), amid supposedly the worst liquidity trap of all.
Right now the Fed is cutting back its support for bond and mortgage security markets...
"The big question is how much mortgage rates will rise and how quickly as a result"... which clearly is de-stimumative.
Yet the spending stimulus lumbers on, not even half done.
Fed policy is offsetting it.
People look at econometric models and/or whatever and claim the stimulus has created jobs -- but can do so only in light of the actions the Federal Reserve has actually taken.
Yet without any doubt whatsoever, if there had been no stimulus the Fed would have taken much different and greater actions to support the economy. One needs to know what the job situation would have been then, how many jobs would have been saved/created by that, and then compute the difference between that job situation and today's, to really know how many jobs the stimulus has created or saved, at its cost of $800 billion.
That is until now, regarding the first half of stimulus spending.
Going forward from here, if the Fed steers to hit its policy targets, and in doing so acts to offset effects of the stimulus (as we seem to see happening above) what will be the effect of the remaining $400 billion of the stimulus then?
Sunday, March 14, 2010
Beer consumption presumably was more stable.
 Pro football isn't what it used to be, and never was.
 Teams the New Jersey Nets can look down upon. No matter how bad you are there's always somebody who's been worse than you -- unless you were the 2003 Detroit Tigers.
 For all you sports stats geeks (and why are you reading this if you aren't one) the event of the year was last week's MIT Sloan Sports Analytics Conference. Check the sub-links for digests of the presentations on bias in officiating, performance enhancing drugs, how NBA teams use analytics, how pro coaches relate to stat-heads, what geeks don't get (with Mark Cuban, Daryl Morey, Bill Polian and Jonathan Kraft) ... and more.
Wednesday, March 10, 2010
 How's Obama doing, relatively speaking? The Gallup Historical Presidential Approval Center tells all.
 Omabacare political quotes of the moment...
"We have to pass the bill so that you can find out what is in it." - Pelosi
"A bill can be bipartisan without bipartisan votes." - Pelosi
"To maintain a strong presidency we need to pass the bill." - Obama
 Keith Hennessey explains what the Democrats really have to do to get the health care bill through reconciliation: both the legislative mechanics and the political challenges.
 Laptop smashing fun: Highly entertaining economics class laptop smashing, from France!
Also, laptop computer meets liquid nitrogen (although the presumably shattering payoff is out of camera view -- really, some Professors should better prepare their demonstrations).
Today's spoiled generation can afford to smash laptops like this. Back in my time I paid $2,000 (1980 dollars, $5,260 today!) for a top line TRS 80 Model III with dual 32k disk drives, 48k memory, and 2 mhz processor. Plus another $2,000 for a top-quality daisy wheel printer. No liquid nitrogen or practical jokes for them.
 What drives media bias? The bias of the media's audience. Surprise.
 How politics works: There's what you think of the candidate ... and then there's what you think of the alternatives...
A new Elon University Poll in North Carolina finds that only 24% of North Carolinians think that Sen. Richard Burr (R-NC) deserves reelection...And so it goes...
However, a new Rasmussen poll finds Burr still leading Elaine Marshall (D), 50% to 34%, and beating Cal Cunningham (D), 52% to 29%.
Sunday, March 07, 2010
After the first weekend of the 2009 NCAA men's basketball tournament, all 5 million ESPN bracket entries were wrong.If you must make predictions, keep 'em simple...
My off-price, ultra-generic prediction -- Home Team Wins -- went 156-111 this season ... On ESPN's "Sunday NFL Countdown" Mike Ditka finished with 157 correct, and likely wasted some time by thinking.Also: awful predictions about the stock market, economy, how the universe will end (not disproven yet), a million dead by global warming, global cooling, hurricanes, nuclear power, glaciers, sunspots ... and more sports...
Pro Football Weekly publishes two or three "best bets," to entice readers to sign up for a Handicapping Inner Circle product that costs $109.95 annually. In 2006, the PFW Best Bets went 31-34-2; in 2007, 32-36; in 2008, 35-32-1. For this season, Best Bets went 31-37. That's a four-year total of 129-139-1, meaning when Pro Football Weekly pundits are certain they are right, they are usually wrong.Remember folks, the news pages of the newspapers operate just like the sports pages, and the news channels on TV operate just like ESPN.
PFW promotes its Handicapping Inner Circle by claiming 67 percent accuracy -- yet over a four-year period, its actual published picks were 48 percent accurate.
Peter King makes so many predictions, it's hard to know what to take seriously...
In late September, King said, "Minutes ago I spoke to people in Washington who told me there is absolutely no chance Jim Zorn is in trouble with the Redskins." ... Two weeks later, King said Zorn would be fired no later than the following week, to be replaced by Jerry Gray. Zorn wasn't fired until the season ended, and Gray was shown the door too. King said there was "no possibility" Jay Cutler would be traded by Denver. For the season, King forecast a Super Bowl of New England over Chicago -- the Bears did not make the playoffs -- and predicted the Saints would finish 7-9...
 Dave Berri discusses books about sports, thinking, and thinking about sports.
 As baseball moves from steroids scandals to to human growth hormone scandals, J.C. Bradbury observes: Banning HGH only signals to players that it works. To keep players from using it, make it legal and let them see it doesn't work.
 The expiration of the salary cap in the NFL during the just-started free agent signing season gets a look from Brad Humphries at The Sports Economist.
 Steady return generally has more value than inconsistent return at the same average rate. Phil Birnbaum discusses this regarding predicting game outcomes from team average for-against scores.
As a simple example of why this is so, say a baseball player hits six home runs. If he hits them all in one game he may feel great about setting a record -- but most of the home runs probably will be wasted running up the score, and none of them would help his team win any other game. In contrast, if he hits one home run each in six games he could help his team win two, three, or four games.
As it happens, this week I got in a discussion on this topic in the comments to a post at Pro Football Reference.com that presented a counter-intuitive finding that higher pass completion percentage for NFL quarterbacks is associated with scoring fewer points scored and fewer games won -- while higher numbers in other metrics, such as average yards per pass attempt (AYA) are associated with more scoring and winning.
Now, I much prefer AYA as a measure of QB performance over pass completion percentage, since the objective of passing is to advance the ball downfield, not to successfully complete a very high percentage of passes that don't advance the ball.
(And for the record, the NFL's official passer rating is probably the worst metric of all. It is so biased towards completion percentage that a QB can increase his rating by completing passes that lose yards: hit 10 of 10 for minus 10 yards each and he'll get a rating of 79 for losing 100 yards.)
But even with AYA being my preferred measure, logic says completion percentage should have some additional positive value. Analogous to the home run example, while the goal is to advance the ball, advancing it any given total amount at a steady rate (with a high completion percentage) should be preferable to doing so hit-or-miss (with a low completion percentage).
So I got out my spreadsheet software, plugged in the NFL 2009 season passing numbers, and sure enough multiple regression produced a formula that predicts points scored from passer data weighting both AYA and completion percentage positively, while giving the former twice the weight of the latter.
And from that I can produce my very own passer rating formula! Looking at the numbers, they actually correlate with scoring better than do AYA, the NFL's official rating, or any other rating method I've found in a couple days. In principle, from that I can rate passing defenses (offense in reverse) then rate whole teams ... then pick winners, and best bets against the spread...
Come the start of the 2010 NFL season I may have my own sport web site, be rating teams and predicting game outcomes ... and for $150, be selling my Premium Best Bets.
A year from now, you may be reading about me in Easterbrook's column!
Saturday, March 06, 2010
There’s a pretty good chance that we will end up with only one great national newspaper. And I know which paper that should be …Hmmm ... I can't tell! Let's look at the Times' own reporting...
The two-decade erosion in newspaper circulation is looking more like an avalanche, with figures released Monday showing weekday sales down more than 10 percent since last year...And as we mentioned here earlier -- speculating that Krugman's resume is likely to end up on Murdoch's desk in the end -- Paul's good friends at Rasmussen report that only 24% of voters have a favorable impression of the NY Times ... something PK might take personally, being that...
USA Today ... [lost] the top spot in weekday circulation for the first time since the 1990s, to The Wall Street Journal.
The Journal’s circulation, just over two million, rose 0.6 percent. It is one of a very few papers to sell online subscriptions, which are counted in the circulation total, helping The Journal, which does not publish on Sundays, defy the industry-wide decline. It has more than 400,000 digital-only subscribers, up by more than 100,000 from five years ago.
At The New York Times, which has repeatedly raised its prices in recent years, weekday circulation fell 7.3 percent, to about 928,000, the first time since the 1980s that it has been under one million...
Most voters (55%) don’t know enough about Paul Krugman to venture even a soft opinion about him. Those with an opinion are fairly evenly divided —- 22% favorable and 22% unfavorable ... with four percent (4%) voicing a Very Favorable opinion and six percent (6%) a Very Unfavorable view.Well, if Krugman really believes the Times is going to come from behind to bury the Journal, he can buy some of its stock. It's cheap.
But if people are asked about "New York Times columnist Paul Krugman", the numbers shift significantly.
Once he is identified with that publication, his unfavorable ratings jump 15 points to 37%. The number with a Very Unfavorable view more than triples to 20%. However, Krugman’s favorable ratings show little improvement, inching up only three points to 25%...
John Fund was viewed favorably by 12% of voters and unfavorably by 22%. Just one percent (1%) had a Very Favorable opinion of him, and six percent (6%) offered a Very Unfavorable view.
However, when Fund was identified with The Wall Street Journal, his numbers jumped to 34% favorable and 20% unfavorable...
All of which gives me a convenient excuse to segue into this semi-annual NY Times Corrections Collection, courtesy of the Super Bowl wrap-up edition of the world's most eclectic football column [the following is edited for brevity] ...
And that's not even counting the editorial pages. OK, if the Times does go under, all this I'll miss!
In the past six months, the Times has, according to its own corrections page, said Arizona borders Wisconsin ... confused 12.7-millimeter rifle ammunition with 12.7 caliber (the latter would be a sizeable naval cannon) ... said a pot of ratatouille should contain 25 cloves of garlic (two tablespoons will do nicely) ... on at least five occasions, confused a million with a billion ... understated the national debt by $4.2 trillion ... used "idiomatic deficiency" as an engineering term (correct was "adiabatic efficiency")... said Paul Revere's Midnight Ride occurred in 1776 (it was in 1775 -- by 1776, everybody knew the British were coming) ... "misstated the status of the United States in 1783 -- it was a country, not a collection of colonies" ...
The Times also "misidentified the song Pink was singing while suspended on a sling-like trapeze" ... confused the past 130 years with the entire 4.5 billion-year history of Earth ... misused statistics in the course of an article complaining that public school standards aren't high enough ... said Citigroup handed its executives $11 million in taxpayer-funded bonuses, when the actual amount was $1.1 billion ... said a column lauding actress Terri White "overstated her professional achievements, based on information provided by Ms. White"... reported men landed on Mars in the 1970s ("there was in fact no Mars mission," the Times primly corrected).
The Times also gave compass coordinates that placed Manhattan in the South Pacific Ocean near the coastline of Chile ... said you need eight ladies dancing to enact the famous Christmas song when nine are needed ... said Iraq is majority Sunni, though the majority there is Shiite (hey, we invaded Iraq without the CIA knowing this kind of thing) ... got the wrong name for a dog that lives near President Obama's house ("An article about the sale of a house next door to President Obama's home in Chicago misstated the name of a dog that lives there. She is Rosie, not Roxy" -- did Rosie's agent complain?) ... elaborately apologized in an "editor's note," a higher-level confession than a standard correction, for printing "outdated" information about the health of a wealthy woman's Lhasa apso .... incorrectly described an intelligence report about whether the North Korean military is using Twitter ... called Tandil, Argentina, a "tiny village" (its population is 110,000) ... confused coal with methane (don't make that mistake in a mine shaft!) ... on at least three occasions, published a correction of a correction; "misstated the year of the Plymouth Barracuda on which a model dressed as a mermaid was posed;" "mischaracterized the date when New York City first hired a bicycle consultant" and "misidentified the location of a pile of slush in the Bronx"...
Thursday, March 04, 2010
New York gone wildPaterson, Rangel, Spitzer, Hevesi, Meeks, Estrada ... Illinois has nothing on us!
Once a source of national leaders of both political parties, New York state has descended into a bizarre, riveting spectacle of corruption and political debasement ... [Politico]
The Empire State once produced national leaders from Alexander Hamilton and John Jay through Teddy Roosevelt, Al Smith, Franklin Roosevelt, Tom Dewey ....
OK, we also produced Tammany Hall with Boss Tweed, Senator George Washington Plunkitt (of "honest graft" fame), Mayor Jimmy Walker ... and arguably they were much more truly New York than that Caribbean import Hamilton and those English bluebloods the Roosevelts.
So maybe we're just getting back to our animal roots around here.
If Joe Francis ever wants to start a "Politicians Gone Wild! Doing It ALL!" spin-off, here we are. (Judging from his record he'll fit right in among 'em. He could move here and run for office himself.)
Wednesday, March 03, 2010
Staffers dish on sexual 'cult' of LettermanBetween the 62-year-old Letterman and Peter Orszag, super-stud nerd of government accounting, maybe there's a whole new model of male sexual super-stardom emerging in the 21st Century.
David Letterman ... is a "Jesus"-like figure to his female staffers -- his sexual "electricity" driving them insane with desire, a new report says.
"It's like a cult," a former "Late Show" insider told Vanity Fair magazine for its feature on the 62-year-old Letterman. "You arrive as an intern and stay for life, and people do fall in love with Dave and behave in a way that might not be considered appropriate in a professional working environment."
"It was intoxicating to me, and I could see how someone could cross the line. It's like Jesus Christ saying, 'Hey, let's go to dinner!' You're going to go, 'Wow! He chose me!'...
"I've come in contact with countless celebrities, and only two emit a tangible, almost magnetic force, an electricity that draws you to them: David Letterman and Bill Clinton," former Letterman segment producer Madeleine Smithberg cooed to Vanity Fair.
"The man is electric! I was there for six years. You want to be with him, you want to be close to him. And when you are, you feel good..." [NY Post]
Look out Brad Pitt & Co., hide your Angelina Jolies. Guys like me are coming to town!
Tuesday, March 02, 2010
Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care.
State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved."
Mr. Patrick ad-libbed that he had "a whole bunch of pals here who are in the health-care field, and I saw the color drain out of their faces."
It doesn't even count as an irony that former Governor Mitt Romney (like President Obama) sold this plan as a way to control spending. As with all new entitlements, the rolling cost crisis began almost immediately...
... average Massachusetts insurance premiums are now the highest in the nation. Since 2006, they've climbed at an annual rate of 30% in the individual market. Small business costs have increased by 5.8%. Per capita health spending in Massachusetts is now 27% higher than the national average, and 15% higher even after adjusting for local wages and academic research grants. The growth rate is faster too...
As in Washington, the political class and providers blame insurers, but a better culprit is the state's insurance regulation. Incredibly, the average "medical loss ratio" in Massachusetts for individual policies is 112% -- that is, insurers pay $1.12 in benefits for every $1 in premiums.
This is the direct result of forcing insurers to charge everyone more or less the same rate regardless of age or health status, which makes it rational for people to wait to enroll until they need expensive coverage.
It is also the result of the state's decision to merge the individual and small-group insurance markets, which transfers individual costs onto small businesses. Mr. Patrick actually justified his plan by citing small-business costs...
Another reason costs are so high is that state regulations have mandated that insurance coverage be far richer than the rest of the country. The average insurance deductible is 28% lower than the U.S. average, and the benefits are more generous with less cost-sharing. Patients are thus insensitive to the cost of care.
...the state's own reports mainly show that the dominant reason health costs are rising is medical progress and technological innovation. Massachusetts health care, with its abundance of academic medical centers and high-quality specialists, is the envy of the world.
This is the true target of Mr. Patrick's price controls: The goal is to engineer a cheaper system through brute force so government can pay for health care for all.
What inevitably suffers is the quality of care for individual patients. Thirty states imposed hospital rate setting in the 1970s and 1980s. Except for Maryland, every one of them eventually eliminated it -- including Massachusetts, in 1991 --partly because it didn't control costs.
And partly because it killed people. A 1988 study in the Journal of New England Medicine found that the states with the most stringent rate-setting had mortality rates 6% to 10% higher than those that didn't.
... Massachusetts is teaching the country a valuable lesson in how not to reform health care, if only anyone would pay attention.
Monday, March 01, 2010
This follows Eliot Spitzer, former governor of New York, lecturing at Harvard's Center for Ethics.
And about to make the community college circuit is David Paterson, New York's still-governor-for-the-moment, tour details to be announced, perhaps soon.