warren · j. · dew

I kind of owe an article on how I would cut government health care expenditures in half by improving the efficiency of care. Unfortunately if I write everything I want to write, that article is going to be a long time in coming. So here's a "short" article on why I think a large fraction of all medical expenditures in the U.S. - like about half - are probably waste and could be cut out completely without affecting the quality of care, even with no other improvements in efficiency.

( Read more... )

The latest economic news incudes administration complaints about the prospect of high bonuses at invesment banks. So why are these bonuses expected to be so high?

Well, as it turns out, the investment industry has done extremely well this year - as might be expected given the recovery of stock indices like the DJIA and S&P 500, which are up more than 50% since their lows near the beginning of the year. Good performance is reflected in high bonuses - exactly the kind of performance based pay the administration was advocating a few months ago.

It's more than just that, though. The investment industry is to a large extent what's driving the recovery; without their putting their money back into the market, the Dow would still be languishing at 6,000, instead of having recovered to 10,000. Without the recovery in the market, people who watch their retirement accounts would not have started spending again. We wouldn't have what little recovery we've seen, and the unemployment rate might be climbing towards 20% rather than stabilizing at 10%.

Now, it's certainly true that some investment banks were the beneficiaries of some government bailouts - especially indirectly, through the guarantee of AIG swaps that those banks had purchased. But you know what? If the government gives out money, whether in bailouts or other handouts, you have to expect that people's performance will including playing the government for as much of that money as possible. The answer here is to stop bailing people out, so their performance will be based on productivity, rather than on playing the game.

The administration can hardly complain when people are taking their advice, and compensating based on performance. And if they're unhappy with what that performance is based on, they should be learning instead of lecturing: in this case, learning that bailouts and handouts are counterproductive when trying to get people to be productive and to get the economy back on track.

Article on administration statements:
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/18/AR2009101802542.html?hpid=topnews

Ardipithecus ramidus is a 4.4 million year old hominid, one of whose examples has yielded the most complete skeleton to date from that time period. As the date of the fossil is close to the date for the branching between the human and chimpanzee lines, it's likely that A. ramidus is quite close, morphologically, to the common ancestor of those two lines. A. ramidus has a brain the size of a chimpanzee's, is bipedal, and has some arboreal adaptations that are entirely different from the chimpanzee's. All that makes this quite possibly the most important anthropological find of the 20th century.

20th century? Yes. The fossil was first found in the early 1990s. It just took them a few years for those who found it to publish their results.

Science has devoted an entire issue, including 11 articles, to the find. The articles are currently available for free - with registration - at:

http://www.sciencemag.org/ardipithecus/

With the focus of U.S. military efforts in the middle east shifting from a tentative success in Iraq to an uncertain outcome in Afghanistan, it may be worthwhile to compare the two situations.

In Iraq, the U.S. had a long term plan of establishing a government that would represent all Iraqis. In Afghanistan, the goal appears to be retribution against a single person, with the U.S. commitment to the welfare of the populace far from clear.

Iraq's primary export was expected to be oil, which we're happy to buy. Afghanistan's biggest export is opium, comprising a third of the country's economy, an export that the U.S. government wishes to shut down.

"We do deserts, we don't do mountains." Deserts and flat terrain like Iraq are ideal for large, organized armies. Mountains favor insurgents.

Afghanistan may be shaping up to be more like Vietnam than like Iraq. Our key mistake in Vietnam was the commitment of ever increasing numbers of ground troops. Repeating that mistake may not be the best idea.

Here's a breakdown of how fast the $787,000,000,000 of Federal stimulus money approved early this year is being spent:

151 billion has been spent so far and $185 billion will be spent by year's end. Another $399 billion will be spent next year ... and $134 billion will be spent by the end of 2011 ...

I guess Congress was planning for a slow recovery.

Margaret can say maybe half a dozen words now, but the only one that elicits a response from her minions - er, parents - with any reliability is "up". Evidently it takes about eight months for minions to learn a new word.

So what do you do when you have a one bit communication channel, but need to communicate more than one bit of information? Well, previously she used the word only when facing the minion intended to complete the task. Now, though, she faces the object she wants to be put into. If she wants to be in the high chair rather than just picked up, she faces the high chair when she says "up".

It only took the minions a couple of days to catch on to the fact that she wasn't expecting the high chair to grow arms and pick her up.

Margaret's measurements at 15 months were 47 cm head circumference, 30.5 inch height, 21 lb 14 oz. I knew she was getting heavier!

The head measurement is about 80th percentile for girls, height about 55th percentile, weight about 35th percentile. The formula is making her a little less slim than she was on breast milk, but it doesn't seem to be making her fat.

Margaret was better behaved on the scale, probably because we let her sit up. She kept pushing against the nurse with her feet on the length measurement - maybe she wanted to be taller. She really doesn't like the head measurement and kept pushing the tape measure off; I'm not sure why she objected so much.

The doctor mentioned that at this age the babies generally start disliking the doctor's office because they remember getting prodded and poked. Margaret objected only when the stethoscope was on her, and of course when when the vaccines were being injected.

I don't think it was a case of her having forgotten, though. On her way out, I asked her to say goodbye to the doctor, and the doctor seemed really surprised and happy when she smiled at him. When she went by the office of the nurse who had given her the vaccines, though, she squeezed up against the far wall of the corridor and walked by very quietly. It was really cute.

A week ago, the Obama administration imposed a 35% duty on Chinese tires:

http://timesofindia.indiatimes.com/news/business/international-business/US-imposes-35-additional-duty-on-Chinese-tyres-/articleshow/5003191.cms

The American owner of a couple of the Chinese tire factories waited only a few days to pass along the cost to the consumer:

http://www.tirebusiness.com/subscriber/headlines2.phtml?cat=1&headline=Cooper+raising+prices+on+most+consumer+tire+lines&id=1253220210

Basically the duty ends up as a tax on discount tires that are bought primarily by the poor and marginally employed.

Who benefits? JK Tyre, with factories in India and Mexico, may benefit from low cost labor outside of China. Goodyear might benefit somewhat, but even with the duties, they'll find it difficult to compete in the discount market. Probably the biggest beneficiary is Bridgestone, the big Japanese tire manufacturer.

So basically, the working poor in America end up subsidizing the Japanese tire industry. Brilliant.

Weight gain happens when you eat more calories than you use, right? Not so fast. Here's a really excellent presentation given at the Dartmouth Hitchcock medical center on why that might not be the cause of weight gain, after all:

http://www.dhslides.org/mgr/mgr060509f/f.htm

The speaker, Gary Taubes, is highly entertaining and provides a compelling presentation. It is a 45 minute presentation, though, so you might want an hour or so free before you watch it.

Both studies also show that the severity of swine flu is not high. In the US, only 14% of confirmed cases had to be hospitalized, while 302 (0.6%) had died (till July 24).

http://timesofindia.indiatimes.com/news/india/Swine-flu-deaths-01-of-positive-cases-in-Europe-06-in-US/articleshow/4892168.cms

Does the "severity" change if the mortality rate remains the same, but ten times as many people get infected? What if it's a hundred times as many that get infected, still with the same mortality rate?

Ironically, given this statistic, it's reassuring that the CDC thinks a million cases had actually occurred by July 24, despite their counting only 43,771 cases.

If a health care bill passes, one of the unintended consequences of Federal health insurance regulation may be that Congress will decide to directly determine whether health insurance covers certain procedures.

What procedures might Congress explicitly exclude? Well, there's one obvious one that's often a political football, and for which direct federal funds are already prohibited: abortion.

http://edition.cnn.com/2009/POLITICS/07/22/health.care.abortion/index.html
http://www.washingtonpost.com/wp-dyn/content/story/2009/07/22/ST2009072202023.html

I recently started seeing, up close, the first solid evidence of this year's economic stimulus plan. It was really solid evidence, too: replacement granite curbs at a couple of intersections along our street.

You hadn't realized that granite curbs wore out to the point they needed replacement? Well, neither had I. However, work doesn't have to be produce something useful to stimulate the economy: as long as workers get hired and paid, they have more money to spend than they otherwise would have, and the additional spending will help restore demand for actual useful products. Eventually, so the theory goes, the extra demand will result in rehiring of the workers laid off earlier in the recession, ending the recession.

You may have noticed a slight flaw in this theory: if the laid off workers have already been rehired for the unproductive work, they won't be available for rehiring for actual productive work. Instead, the supply of useful products will continue to be limited, and with more money chasing after the same amount of goods, we'll see inflation instead.

As usual with the economy, government intervention is likely to have the opposite of the intended effect: in this case, it is prolonging actual recession conditions of limited useful production and employment. Fortunately for the government, statistics will be able to cover that up by valuing the new granite curbs as if the old ones had actually worn completely away.

Some readers may remember coverage of a concept called "caloric restriction" in science journals in the late 1980s. Caloric restriction - restricting the amount of food eaten - had been shown to increase life span almost proportionally in numerous species, from paramecia to mice. Studies were in progress or being started in a variety of other animals.

Yesterday, one of those studies - using rhesus monkeys as a subject, who are considerably more closely related to humans than mice - published their first set of statistically significant results. What they found was that caloric restriction, as compared to free feeding controls, resulted in:

- statistically significant reductions in "age related diseases" such as cancer, heart disease, and diabetes, including complete elimination of diabetes

- statistically significant reduction in mortality from age related diseases 20 years into the study, which had started with adult rhesus monkeys between 7 and 14 years old

- a reduction in total mortality - including causes not related to age, such as death from anesthesia and endometriosis - that is suggestive but not statistically significant at this point in the study.

This is of particular interest to me because I inadvertently practiced caloric restriction until age 35 or so. I'm also trying to get back into it now, as I didn't start having kids until 48 and I'd kind of like to see them have children.

If anyone gets Science magazine and doesn't mind lending the current issue to me so I can see the whole article, I'd appreciate it. In the meantime, there's a summary here:

http://www.sciencedaily.com/releases/2009/07/090709110836.htm

Much of the U.S. press seems to be painting the protests in Iran as a genuine, popular uprising against an autocratic, religiously fundamentalist regime.

It's true that the Iranian government is autocratic and religiously fundamentalist. However, it's also true that that government has the support of a large majority of its people, who mostly live in the rural countryside and small towns, and who are, by and large, religiously fundamentalist. While there may have been some voting fraud in some districts, it should come as no surprise that the vast majority of the population supported their current President.

The protesters are largely urban: college students and young urban professionals. While such populations might be typical in the U.S., they are not typical of Iran as a whole; they constitute a small minority of the population there. They're sufficiently atypical of Iran that they're not even well represented by "their" candidate, Mousavi, who is more typical of the Iranian governmental establishment.

The truth is, the protests in Iran are largely the protests of a minority that is being oppressed by a government supported by a large majority of the people there. They are in no way a popular uprising, and absent an externally planned and funded coup, have no chance of significantly affecting the government.

Sonia Sotomayor, based on reading a few of her opinions and summaries of dozens more, appears to apply the law as strictly and logically as possible. This is of course exactly what the Republicans always claim to want: supreme court justices who will strictly apply the law. It is no surprise that the Republicans have already decided not to attempt a filibuster.

Unfortunately, like all other recent nominees, she seems willing to be a lot more cavalier about the constitution. While she's ardently championed the first amendment in some cases, she's quite willing to dismiss the second amendment as not being "fundamental", even in the face of a recent clear supreme court ruling to the contrary. I guess she's never lived in a country that became a dictatorship.

I wish that one of these years, we'd get a nominee that was willing to strictly interpret the constitution, as well as the law.

You may have heard of the banking industry "stress tests" - "what if" scenarios to see how the government thinks banks would fare under a variety of economic scenarios. The most stressful case is an assumption that the current recession gets even worse, deepening and continuing past the end of the year.

The result is government pressure for banks to increase their equity ratio significantly beyond what is required by regulations. ( There are two ways to achieve this. )

Either way, it seems the government's analysis of a "worst case" recession could become something of a self fulfilling prophecy. We're currently set to come out of the recession this summer, but the government's preparing for it to continue through next winter may cause just that to happen.

Articles, one listing the results, the others discussing them:
http://www.bizjournals.com/birmingham/stories/2009/05/04/daily44.html
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/07/AR2009050704257.html
http://online.wsj.com/article/SB124172137962697121.html