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Saturday, December 29, 2012

Now To End The Year With Some Good News!  First, The Good News! The Rate Of Increase In Healthcare Spending Is Slowing Down Significantly.  But The Bad News Is That Nobody Knows Why??

(Peter Orzag is one of the good guys when he was in Washington, and I can think of no reason why that should change now that he is making a $Million a year at Citibank.)

Peter Orszag's Chart Of The Year Could Change Everything You Think About Healthcare And The Federal Budget

The conventional wisdom on the deficit is: Right now the deficit doesn't pose a problem, but thanks to the gigantic growth in healthcare costs, it's inevitable that the government will get swamped by Medicare spending, ergo we need to tweak the system.
 Peter Orszag, who was the head of the Office of Management and Budget under Obama, and who is now at Citi, offers up a chart that could be a Medicare costs game-changer.
His chart of the year is found in Wonkblog's annual awesome The Year In Graphs feature, which everyone should check out.

The chart is taken from S&P's twice-per-year deep dive into healthcare inflation, and it shows that contrary to expectations, Medicare inflation (the annual year over year growth in the cost of a delivering a unit of care) is slowing dramatically, and is well below almost every other category of healthcare spending (which are also dropping).
Click to enlarge the chart, the Medicare inflation index is the bottom dashed line.
healthcare inflation
Says Orszag:
“This graph from S&P illustrates two key facts: health-care costs have decelerated over the past few years, and Medicare costs have decelerated more than other health costs. That pattern suggests at least part of the slowdown is structural (since if it were all just a reflection of economic weakness, we wouldn’t expect Medicare to slow down more than other health costs, but if it were partly structural, that’s exactly what we would expect). If this slower growth continues, the impact on our long-term fiscal gap will be much more meaningful than any plausible outcome of the fiscal cliff negotiations.”

This is a real sleeper story that needs to get more attention.
For three years in a row, Medicare spending has significantly come in below estimates. Repeat that: below estimates.

This is from Kaiser Health News back in August:
In an update to its January report on the nation’s budget and economic outlook, CBO said that outlays for Medicare will total 3.7 percent of the gross domestic product in 2013, rising to 4.3 percent of GDP in 2022, as enrollment in the program increases.
But the report also noted that for the third year in a row, CBO expects the growth in Medicare spending in 2012 to be “substantially slower” than anticipated earlier in the year.

CBO Director Doug Elmendorf said at a press conference that the slower growth in Medicare is consistent with slower health care cost growth throughout the economy, which many analysts have observed. But he said it’s still unclear why the slowdown is happening.
“Presumably, the weak state of the economy is a factor, but given the magnitude of the slowdown in national health spending and the timing of that slowdown, which seems to have started before the recession, we and most analysts think there are probably structural factors at work as well,” he said. Those structural factors could include slower growth of spending on prescription drugs, changes in the health care delivery and payment system, and higher out-of-pocket spending for consumers, according to Elmendorf.

This isn't to say, definitively, that Medicare costs won't be a huge burden for the government going forward. Demographics is a major issue, no doubt.

But it should give everyone a good reason to push back against the conventional wisdom that we have a huge deficit problem, and that we have to start chopping entitlement spending.

To see an enlarged version of Peter's chart, go to

Friday, December 28, 2012

Remember Our Story About How Apple Ducked Paying U.S. Taxes?  Well, You Will Love The Facebook Story!!!

And all those assholes in Washington are whining about the tax rates on U.S. companies!!  The best thing I can say is it is despicable!!!!!!


Boy Is This A Galling Tax Dodge From Facebook: It Paid 0.3% Taxes On $1.34 Billion Profits

If you are as cynical as I am, I know you are not surprised that Facebook paid Irish taxes (via Tax Justice Network) of about $4.64 million on its entire non-US profits of $1.344 billion for 2011.* This 0.3% tax rate is a bit below the normal, already low, Irish corporate income tax of 12.5%.

As with Apple, Facebook funnels its foreign profits into its Irish subsidiary. As the Guardian article explains:
Facebook is structured so that companies buying advertisements on the website in the UK, or anywhere outside of the US, have to pay Facebook Ireland. As a result, Facebook manages to slash its taxes in other countries, paying, for example,  $380,800 in British tax on estimated 2011 UK profits of $280 million, or a little over 0.1%. What is shocking is that Facebook paid so much Irish tax since it managed to convert its $1.3 billion gross profit into a net loss of $24 million.

As you've no doubt figured out, it's that "Double Irish" ploy again. Facebook operates a second subsidiary that is incorporated in Ireland but controlled in the Cayman Islands. This subsidiary owns Facebook Ireland, but the setup allows the two companies to be considered as one for U.S. tax purposes, but separate for Irish tax purposes. The Caymans-operated subsidiary owns the rights to use Facebook's intellectual property outside the U.S., for which Facebook Ireland pays hefty royalties to use. This lets Facebook Ireland transfer the profits from low-tax Ireland to no-tax Cayman Islands. For more on the arcane mechanics, see Joseph Darby's article "International Tax Planning," downloadable at Wikipedia.

This makes no sense of course, but is, in David Cay Johnston's inimitable phrase, Perfectly Legal. But it shouldn't be. And in the UK, Chancellor of the Exchequer George Osborne has announced 
a £154m [$246.4 million] blitz on tax avoidance and evasion, with HMRC [the British equivalent of the IRS] hiring an extra 2,500 tax inspectors to target high earners who aggressively exploit loopholes to avoid or evade tax. The U.S. should do the same.

* Dollar figures converted from pound sterling figures in the Guardianat an exchange rate of $1.60 per pound. Read more posts on Middle Class Political Economist »

If you are not furious about this, and Apple, and GE, and Wells Fargo, et al, then you are brain dead!!!!!!!!!!!!!!!!!!!!

Saturday, December 22, 2012

What A Strange World!!!!  After I Finished The Rant About All Of The Children In The U.S. That Were Having Horrible Lives, The Phone Rang And My Son Relayed This Story.  He And His Wife Had Taken In Two Teen Agers And He Wanted To Know If He Could Bring Them To Our House For Christmas.  And The Answer is "Of Course".

But it is the back story that will break your heart.  The kids are two girls, one sixteen and the other fourteen.  The father is in jail for molesting the sixteen year old.  When the mother found out about it, she attempted sucide, and is now in the hospital.  The kids have no home and the neighbors have been taking turns taking care of them.  So our family will be a little bigger for Christmas and tomorrow we will be out searching for Christmas presents for two homeless girls.

Hope you have Happy Holidays!!

As Christmas Approaches, Michael Reminds Us That Not Everyone Will Have A Warm Place To Sleep On Christmas Eve, Or Have A Warm Meal On Christmas Day.

And You Should Remember That Paul Ryan Wants To End Food Stamps And Everything Else In The Safety Net.  (And He Also Wants To Be President!)


20 Signs That The U.S. Poverty Explosion Is Hitting Children And Young People The Hardest

20 Signs That The U.S. Poverty Explosion Is Hitting Children And Young People The Hardest - Photo by Franco FoliniThe mainstream media continues to insist that the economy is "getting better", but the poverty numbers for children and young people just continue to explode.  For example, did you know that the poverty rate for families with a head of household under the age of 30 is a whopping 37 percent?  Children and young people sure didn't cause our recent economic downturn, but they sure are getting hit the hardest by it.  According to the U.S. Department of Education, for the first time ever more than a million U.S. public school students are homeless.  That seems like an impossible number, but it is actually true.  How in the world could the "wealthiest nation on earth" get to the point where more than a million children can't count on a warm bed to sleep in at night?  Sadly, a huge number of American children can't count on a warm dinner either.  About a fourth of them are enrolled in the food stamp program.  What do you do if you are a parent in that kind of situation?  How do you explain to your kids that you can't afford a nice home like everybody else has or that you can't afford to go to the grocery store and buy them some dinner?

Young people are experiencing very rough times right now as well.  If you are under the age of 30, it is really, really difficult to get a job in America today.  The competition for the few decent jobs that seem to be available is absolutely crazy.  Unemployment among young people is at a level that we have not seen since World War II, and this is causing major problems.

Even if you do have a college degree, there is no guarantee that you will be able to get any type of a job.  In fact, more than half of all college graduates under the age of 25 were either unemployed or underemployed last year.  There are millions of very talented college graduates that are waiting tables, making sandwiches or stocking shelves down at the local branch of a global retail conglomerate.  Meanwhile, they are saddled with record breaking amounts of student loan debt.

This is easily the worst economic environment that we have seen for young people since the Great Depression of the 1930s.  The number of good jobs continues to decline.  Many young people are faced with the choice of taking a bad job or having no job at all.

If you are under 30 in America today, you better hope that you come from a wealthy family or that you have some really good connections, because otherwise the future looks pretty bleak for you.

The following are 20 signs that the U.S. poverty explosion is hitting children and young people the hardest...

1. If you can believe it, a higher percentage of children is living in poverty in America today than was the case back in 1975.
2. More than one out of every five children in the United States is currently living in poverty.
3. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be "poor" or "low income".
4. Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.
5. For the first time ever, more than a million public school students in the United States are homeless.  That number has risen by 57 percent since the 2006-2007 school year.
6. It is being projected that half of all American children will be on food stamps at least once before they turn 18 years of age.
7. One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.
8. The 18 to 24 age group has a higher unemployment rate than any other age group in the United States.
9. Young adult employment is now at the lowest level that we have seen since World War II.
10. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent.  Today, the unemployment rate for that same age group is about 13 percent.
11. Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
12. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.
13. Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you account for inflation.
14. In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.  Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
15. During 2011, 53 percent of all Americans with a bachelor's degree under the age of 25 were either unemployed or underemployed.
16. Many young people are finding that they cannot afford to get married these days.  Sadly, an all-time low 44.2 percent of all Americans between the ages of 25 and 34 are married right now.
17. Right now, approximately 53 percent of all Americans in the 18 to 24 age group are living at home.
18. The number of Americans in the 25 to 34 age group that live with their parents has grown by 25 percent since 2007.
19. One survey discovered that 85 percent of all college seniors plan on moving back in with their parents after graduation.
20. Overall, approximately 25 million American adults are living with their parents in the United States right now according to Time Magazine.
After reading all of those statistics, do you still doubt that America is in decline?  If so, you can find some more shocking statistics right here.
The truth is that it should be painfully evident to anyone with a brain that our economy is not working correctly anymore.  We have lots of talented people, but there are not nearly enough jobs and a lot of those very talented people end up sleeping out in the streets.
A recent New York Times article told the story of a young man named Duane Taylor.  Sadly, there are way too many young people out there today that are experiencing the same kind of things that he is...
Duane Taylor was studying the humanities in community college and living in his own place when he lost his job in a round of layoffs. Then he found, and lost, a second job. And a third.
Now, with what he calls “lowered standards” and a tenuous new position at a Jack in the Box restaurant, Mr. Taylor, 24, does not make enough to rent an apartment or share one. He sleeps on a mat in a homeless shelter, except when his sister lets him crash on her couch.
“At any time I could lose my job, my security,” said Mr. Taylor, explaining how he was always the last hired and the first fired. “I’d like to be able to support myself. That’s my only goal.”
There are millions upon millions of young people in America today that feel totally lost because they cannot find their places in the world.

They are angry, frustrated, depressed, desperate and disillusioned.  They felt like they did everything that the system told them to do, and now they feel like the system is failing them.
An unemployed 2010 graduate of the University of Florida named Lance Fuller expresses similar sentiments on his blog entitled "Voices Of A Lost Generation"...
They are the countless young men and women eager for an opportunity but have found few, if any. They have desirable skills, are highly educated, and are more than willing to work.
Sadly, crippled by college debt and graduated into a struggling economy, they stand little chance to find gainful employment in their chosen fields and take temporary jobs they are overqualified for. They lie waiting for the dream job they went to school for — but it probably doesn’t exist.
My name is Lance and sadly, I share in this story. Like my twentysomething peers, I am one of the thousands of faces of America’s Generation U — Unfortunate, Unlucky, and Unemployed.
I am fortunate that I have never been without money to buy food and have never had to spend a night on the street.  But tonight millions upon millions of Americans under the age of 30 will be faced with those kinds of circumstances.

Please say a prayer for them.  They didn't cause the economic mess that we are in, but they are certainly paying the price for the mistakes that were made.

Does anyone out there have a similar story to the ones that were shared in this article?  If so, please feel free to share it below.  Perhaps your story will encourage someone else out there who is going through a really hard time right now.
Sad Child - Photo by David Shankbone
In Summary...............As 2012 Draws To A Close
 We have two huge problems facing the government (and to paraphrase Pogo, we have met the government and he is us). They are loosely bunched together and called “entitlements”. One is easily fixed and the other is incredibly difficult to fix, but it is on track to bankrupt the country.

Social security is the easy one. Lift the cap and it is solvent for the lifetime of your children and your grandchildren. Period, end of that story. No arguments, no blather, just do the simple calculations.

Healthcare costs, however, present a very different problem. We spend about twice as much per person as any other developed country, but we get measurably poorer results. Swedes live longer than we do and our infant mortality rates are right up there with third world countries.

Here is what we spend our money on.

1) There are five sound research studies, among a huge amount of garbage passing as research, that all used different time lines and different specifications, but they can all be summed up as 50%-60% of all healthcare expenditures occur in the last two years, two months, two week of life. This is a fact. We have enormous skills in prolonging life, but everyone of them is hugely expensive. The Wicked Witch of the North ran around screaming death panels, but the real death panels are nameless clerks in insurance company offices who approve, or not approve, specific treatments.

2) Chronic diseases come second and account for about 20% of our healthcare costs. This is mostly diabetes that stems directly from being over weight. At least end of life costs come to an end, but diabetes goes on for a lifetime, and the number of our children who are obese and overweight is stunning.

3) There is no way to put an exact number on this problem, but it involves our lack of knowledge of the effectiveness of various drugs with particular problems, the effectiveness of various treatment protocols, surgeries, etc. Here is an example; exactly the same procedure costs $100,000 at the Mayo Clinic in Rochester, Minnesota and $200,000 at the UCLA Medical Center in Los Angeles. Both are first rate facilities. We can address this problem with digitizing all our medical records (as they do in France and many other countries). Then we could know which healthcare activities are most cost effective.

4) Nobody knows exactly how much fraud contributes to our healthcare costs, but it seems to be substantial because it has almost become a regular feature in Business Week. If we assigned more investigators to medical fraud and fewer to airport security, I have no doubt we would all be a lot better off.

The December 15th-21st issue of The Economist has an outstanding review of obesity and its costs.  You really need to read it because it raises a question of huge importance.  End of life costs have an end, obviously.  Not so for chronic diseases since they can go on from childhood onward for years and years.

Here is the question that The Economist poses:  What happens when so many people in the country are overweight and have all the medical problems that go with that go with obesity, i.e., diabetes, kidney failure, high blood pressure, heart attacks, strokes, et al. cost more than the country can afford?????  Think about it seriously since you may well have to face that decision someday soon.


Here is the first piece in the Special Report.  Read the rest for yourself.

The big picture

The world is getting wider, says Charlotte Howard. What can be done about it?

IT IS LUNCHTIME at Eastside Elementary School in Clinton, Mississippi, the fattest state in the fattest country in the Western world. Uniformed lunch ladies stand at the ready. Nine-year-olds line up dutifully, trays in hand. Yes to chocolate milk, yes to breaded chicken sandwiches, yes to baked beans, yes to orange jelly, no to salad. Bowls of iceberg lettuce and tomatoes sit rim to rim, rejected. Regina Ducksworth, in charge of Clinton’s lunch menu, sighs. “Broccoli is very popular,” she says, reassuringly.
Persuading children to eat vegetables is hardly a new struggle, nor would it seem to rank high on the list of global priorities. In an age of plenty, individuals have the luxury of eating what they like. Yet America, for all its libertarian ethos, is now worrying about how its citizens eat and how much exercise they take. It has become an issue of national concern.
Two-thirds of American adults are overweight. This is defined as having a body mass index (BMI, a common measure of obesity) of 25 or more, which for a man standing 175cm (5’9”) tall means a weight of 77kg (170 pounds) or more. Alarmingly, 36% of adults and 17% of children are not just overweight but obese, with a BMI of at least 30, meaning they weigh 92kg or more at the same height. If current trends continue, by 2030 nearly half of American adults could be obese.

Americans may be shocked by these numbers, but for the rest of the world they fit a stereotype. Hamburgers, sodas and sundaes are considered as American as the Stars and Stripes. Food at state fairs is American cuisine at its most exuberantly sickening. At the Mississippi fair, a deep-fried Oreo biscuit’s crispy exterior gives way to soft dough, sweet cream and chocolate goo. It is irresistible.

The rest of the world should not scoff at Americans, because belts in many other places are stretched too, as shown by new data from Majid Ezzati of Imperial College, London, and Gretchen Stevens of the World Health Organisation (WHO). Some continental Europeans remain relatively slender. Swiss women are the slimmest, and most French women don’t get fat, as they like to brag (though nearly 15% do). But in Britain 25% of all women are obese, with men following close behind at 24%. Czech men take the European biscuit: 30% are obese.

And it is not just the rich world that is too big for its own good. The world’s two main hubs for blub are the Pacific islands and the Gulf region. Mexican adults are as fat as their northern neighbours. In Brazil the tall and slender are being superseded by the pudgy, with 53% of adults overweight in 2008. Even in China, which has seen devastating famine within living memory, one adult in four is overweight or obese, with higher rates among city-dwellers. In all, according to Dr Ezzati, in 2008 about 1.5 billion adults, or roughly one-third of the world’s adult population, were overweight or obese. Obesity rates were nearly double those in 1980.

Fat of the land
Not long ago the world’s main worry was that people had too little to eat. Malnourishment remains a serious concern in some regions: some 16% of the world’s children, mainly in sub-Saharan Africa and South Asia, were underweight in 2010. But 20 years earlier the figure was 24%. In a study of 36 developing countries, based on data from 1992 to 2000, Barry Popkin of the University of North Carolina found that most of them had more overweight than underweight women.

The clearest explanation of this extraordinary modern phenomenon comes from a doctor who lived in the 5th century BC. “As a general rule,” Hippocrates wrote, “the constitutions and the habits of a people follow the nature of the land where they live.” Men and women of all ages and many cultures did not choose gluttony and sloth over abstemiousness and hard work in the space of just a few decades. Rather, their surroundings changed dramatically, and with them their behaviour.

Much of the shift is due to economic growth. BMI rises in line with GDP up to $5,000 per person per year, then the correlation ends. Greater wealth means that bicycles are abandoned for motorbikes and cars, and work in the fields is swapped for sitting at a desk. In rich countries the share of the population that gets insufficient exercise is more than twice as high as in poor ones.

Very importantly, argues Boyd Swinburn of Deakin University in Melbourne, diets change. Families can afford to eat more food of all kinds, and particularly those high in fat and sugar. Mothers spend more time at work and less time cooking. Food companies push their products harder. Richard Wrangham of Harvard University says that heavily processed food may have helped increase obesity rates. Softer foods take less energy to break down and finely milled grains can be digested more completely, so the body absorbs more calories.

These global changes react with local factors to create different problems in different regions. Counter-intuitively, in some countries malnutrition is leading to higher obesity rates. Undernourished mothers produce babies who are predisposed to gaining weight easily, which makes children in fast-developing countries particularly prone to getting fat.

In Mexico unreliable tap water and savvy marketing have helped make the country the world’s leading guzzler of Coca-Cola: the average adult consumed 728 servings last year. In America junk-food calories are often cheaper than healthy ones. Suburban sprawl and the universal availability of food have made the car the new dining room. In the Middle East, Bedouin traditions of hosting and feasting have combined with wealth to make overeating a nightly habit. Any inclination to exercise is discouraged by heat and cultural restrictions. In Beijing teenagers and office workers cram the fast-food restaurants along Wangfujing. Even home-cooked Chinese meals contain more meat and oil than they used to. Doting grandparents shower edible treats on scarce grandchildren.

Together, these disparate changes have caused more and more people to become fat. Many cultures used to view a large girth with approval, as a sign of prosperity. But obesity has costs. It lowers workers’ productivity and in the longer term raises the risk of myriad ailments, including diabetes, heart disease, strokes and some cancers; it also affects mental health. In America, obesity-related illness accounted for one-fifth of total health-care spending in 2005, according to one paper.

A huge new global health study, led by Christopher Murray of the University of Washington, shows that since 1990 obesity has grown faster than any other cause of disease. For women a high BMI is now the third-largest driver of illness. At the same time childhood mortality has dropped and the average age of the world’s population has risen rapidly. In combination these trends may mark a shift in public-health priorities. Increasingly, early death is less of a worry than decades spent alive and sick.

It is plain that obesity has become a huge problem, that the factors influencing it are fiendishly hard to untangle and that reversing it will involve difficult choices. Radical moves such as banning junk food would infringe individuals’ freedom to eat what they like. Instead, some governments are cautiuosly prodding their citizens to eat less and exercise more, and food companies are offering at least some healthier foods.
In a few places obesity rates seem to be levelling, but for now waistlines in most countries continue to widen unabated. Jiang He and his colleagues at Tulane University have estimated that by 2030 the global number of overweight and obese people may double to 3.3 billion. That would have huge implications for individuals, governments, employers, food companies and makers of pharmaceuticals.


Friday, December 21, 2012

I Love This Guy!!  He Has The Same Problem I Had When I Went To Graduate School At USC!!

First of all, the economics department denied that Business Cycles existed.  See "The Great Recession Conspiracy" for a short description and "This Time Is Different" for a longer version complete with lots of footnotes.  Macro- economics is utter foolishness.

Second, the Philips Curve.  This supposed relationship between unemployment and inflation is based on a half dozen data points in the English coal fields in the 1930's.  It is the worst distortion of data I have ever seen in my life!!!  And macro economist live and die by it.  I just wish they would all die by it.


ZERVOS: The Fed Is Risking An Inflation Disaster, And There Will Only Be One Place To Hide

David Zervos
Bloomberg TV
Jefferies' economist David Zervos is back in a new note, which takes stock of developments at the Fed and the Bank of Japan.
 The Fed, of course, recently adopted Evans Rule, which indicates that tightening won't occur until unemployment gets to around 6.5%, or inflation expectations are around 2.5%. The Bank of Japan is expected to see a new round of aggressive policy, thanks to the wishes of incoming Prime Minister Shinzo Abe.

While markets seem to be pretty happy about it all (ESPECIALLY in Japan) Zervos thinks it will end in uncontrollable inflation, like in other past Keynes-inspired experiments.
In his note, he recounts his time at The Fed:

In fact when I first arrived at the Fed in 1991, all the staff PhD economists I met spoke some foreign language - call it MITease. My world of rational expectations and real business cycles had no place at the table. So in order to understand the policy makers, and the people I had lunch with everyday, I had to learn how they see the world, even if it made absolutely no sense.  I can remember vividly debates about the Phillips curve. And to this day I still have no idea how the concept has survived. We had high employment, high inflation and low real growth in 70s - followed by low unemployment, low inflation and high real growth in the 90s. No matter how much you "shift" or "augment" this  flawed curve concept, it just doesn't work. The fact that the basic Phillips curve notion of trading off inflation for employment is now explicitly built into Fed policy decisions scares me to no end. There has always been a fat tail to higher inflation outcomes with Bernanke at the helm, but upon reflection, last week's 6.5/2.5 announcement probably made it A LOT fatter!

Bottom line for Zervos: This won't end pretty, and there's only one place to hide. The good news is: It's stocks.

There are no coefficients, no NAIRUs, no Phillips curves and no r-stars. And the rule has summed up Fed behavior in the post crisis world better than any other. To that end, the only safe place to hide from the guaranteed dilution of the real value of money and debt is in real/hard assets. And if you still believe (like I do) that the business cycle exists, and we will eventually see an upswing in real growth, then the best real asset is physical capital - specifically equity capital. Good luck trading.
See more Zervos at Markit Hub >

Here is the problem boys and girls.  Ol Uncle Ben has printed over THREE TRILLION DOLLARS in brand new US$100 bills and stashed them in New York Banks.  Feel free to piss on all of Uncle Ben's macro economic theories.  The LAWS of physics rule here:  He can either burn all those bills or he can release them in the US economy.  When he does that, there will be inflation like you have never dreamed of.
It Turns Out I Was Right!!  The NRA Wants To Put An Armed Policeman In Every School In The United States!!!!!

If That Doesn't Scare The Crap Out Of You, I Can't Imagine What Will!!

Stunning NRA Press Conference Blames Shooting On Media, Video Games, Movies And Calls On Congress To Put Cop In Every School

In what was a rather stunning, half-hour press conference, the National Rifle Association called on Congress to put armed police officers in every school in America. The highly anticipated press conference came one week after the tragedy in Newtown, Conn., last week.
 CEO Wayne LaPierre blamed many things in his press conference for the influx of mass shootings in the U.S. — everything from gun-free school zones, the media, movies, violent video games, hurricanes, and a lack of government funding.

"The only thing that stops a bad guy with a gun is a good guy with a gun," LaPierre said. 

(Emphasis added.  Is This Is A Great Country Or What?  The Crazies Have Guns!  Watch Out!!)

At the same time, he deflected any criticism the organization has taken over the past week, saying the organization "remained respectfully silent." He was interrupted by two separate protestors at the event, after which the NRA did not take questions.

LaPierre said that the NRA is calling on Congress to put armed security guards in every school. The NRA has set up a website to advance the cause.

"The only way — the only way — to stop a monster from killing our kids is to be personally involved and invested in a plan for protection," LaPierre said. He added that gun-free zones "tells every killer that schools are the safest place" to go and carry out mass shootings.

LaPierre questioned what would have happened if there was armed security at the school: 
"What if, when Adam Lanza started shooting his way into Sandy Hook Elementary School, he was confronted by qualified armed security? ... 26 innocent lives might have been spared that day," he said.
LaPierre also blamed lack of government funding.

"With all the foreign aid … with all the money in federal budget … can't we afford to put a police officer in every school?"

A lesser part of his speech placed blame on a media culture that he suggested promoted violence. He took aim at celebrities, video games and movies for advancing that culture.

"Another little dirty secret the media tries to conceal," LaPierre says, is "a callous corrupt and disgusting shadow industry...vicious violent video games." He then called violent films "the filthiest form of pornography."

Here's a photo of the first protester that interrupted LaPierre. Her sign read, "WE NEED TO STOP THE KILLING, THE NRA IS KILLING OUR CHILDREN:"

You can see the photographs and the video at The Business Insider.

Thursday, December 20, 2012

If You Want To Invest In The Stock Market, Here Is Why Your Money Should In A Mutual Fund Like Vanguard or Fidelity.  The Wall Street Folks Are Only Going To Do And Everything Possible to Cheat You.  Henry Blodget Tells The Inside Story About How You Got Screwed If You Bought Facebook Stock.  It Is Worth Reading Even If You Were Smart Enough Not To Buy Facebook Stock.

Monday, December 17, 2012

There Has Now Been Three Days Of Unending Babble About Gun Ownership And Gun Deaths In The U.S.  These Charts Pretty Much Tell Their Own Story.

This Chart Proves There Is Something Profoundly Wrong With How The US Handles Guns

The United States has the highest gun ownership rates in the world and the second highest rate of gun deaths among industrialized nations.

That's not a coincidence. Looking at developed nations, the U.S. is the end point of a staggering trend where the higher the rate of gun ownership, the more people die from gun wounds.

In the wake of the Sandy Hook massacre, Mark Reid, a machine learning researcher at Australian National University, has run a quick statistical analysis of gun death data in industrialized nations on a whim.
His charts show how unique the U.S. is among its peers when it comes to the way the country handles guns.
The first chart shows gun deaths per capita graphed against gun ownership per capita. Notice the upward trend — the more guns per capita, the more gun deaths per capita. The US has the most guns, ergo it has one of the highest rates of gun deaths.
Digging a little deeper, Reid realized that the strangely high rankings of gun deaths in countries like Switzerland and Finland were due to high suicide rates. Additionally, one of the reasons the Swiss have such a high gun ownership is because of the country's mandatory male military service, after which the men may keep their guns.

When it comes to homicides and gun ownership rates, Mexico and the United States are each in a league of their own, with ownership rates and death rates that skew the axes of the entire chart. You can see a close-up of the countries that aren't the U.S. or Mexico on Reid's site.
Below is the chart that Reid made of strictly homicides:
Reid's final chart is also interesting. In order to find nations similar to the United States and Mexico on guns, you have to allow every country in the world into the data set, even ones with ongoing wars:
Click here to see the full story on Reid's analysis > 

Sunday, December 16, 2012

I Was Hoping (silly me) That The Lies And Distortions Coming From Washinton Would Stop, Or At Least Slow Down After The Election.  Peter Coy Does A Great Job Of Explaining The FACTS In Business Week.  

No right wing, no left wing, just numbers and common sense.

The Fiscal Cliff Isn't the Problem

By on December 06, 2012 
Early in Bill Bryson’s book A Walk in the Woods, the story of his ill-starred Appalachian Trail expedition, the author’s out-of-shape and impulsive hiking companion, Katz, decides his backpack is too heavy. So he starts throwing out the food they’d packed for the trip: rice, pepperoni, cheese, peanuts, Spam—he even discards coffee filters, which weigh next to nothing.

Panic about the fiscal cliff is threatening to lead Congress into the same short-term thinking. Investments in education, scientific research, and infrastructure—which account for a tiny portion of federal spending but make the economy more productive in the long run—are at risk. Restraining them by spending cap or sequester would be as dumb as discarding coffee filters to lighten one’s backpack. Yet if Democrats and Republicans don’t agree on a budget compromise by the end of the year, that’s what could happen.
A new Bloomberg Government analysis makes clear just how much pressure Washington is under. Instead of needing $4 trillion in deficit cuts over 10 years to stabilize the ratio of debt to gross domestic product ratio, negotiators need $5.9 trillion in cuts, according to Bloomberg Government’s calculations. In a Dec. 4 interview with Bloomberg Television, President Obama said he’ll fight to protect investments in things like education. He’s right. House Speaker John Boehner says the U.S. needs to grapple with big projected deficits in Medicare, Medicaid, and Social Security. He’s right, too. But their two rights have made a wrong: stalemate.
Illustration by Ana Benaroya
The solution is to figure out what problems need solving on which time scale. The most urgent priority is keeping the roughly $600 billion hit to GDP from kicking in. Edward Kleinbard, a professor at the University of Southern California’s Gould School of Law, who was chief of staff for the Joint Committee on Taxation from 2007 to 2009, proposes turning the cliff into a ramp. He would suspend the automatic spending cuts and allow the Bush tax cuts to expire in three years instead of overnight. Congress would commit to devote all of the savings from future spending cuts to lowering tax rates, but starting with the lowest brackets, not the highest. Says Kleinbard: “None of this is impossible.”

After that comes a bigger challenge: getting the economy to grow faster and foster innovation to make burdens on future generations as light as possible. Supporting the aged and infirm will be far easier if median household income rises to, say, $75,000 adjusted for inflation, rather than remaining stuck at just over $50,000. And Medicare and Medicaid expenses will be less daunting if medicine can find cures for killers such as diabetes and dementia.

That’s why it’s foolish to slash public programs indiscriminately to get out of the fiscal hole. It’s up to government to fund growth-enhancing investments that the private sector does too little of. James Heckman, a Nobel prize-winning economist at the University of Chicago, has shown that the return on a dollar invested in human capital is highest from birth to age five, lower during the school years, and lowest for adult job training. Yet the budget for Head Start, which helps children from low-income families aged five and younger to get ready for school, is paltry relative to the benefits bestowed on older Americans.

Physical capital is underfunded as well. In 2009 the American Society of Civil Engineers gave the U.S. a grade of D for infrastructure. It’s doubtful that things are much better now; only about $100 billion of the Obama administration’s nearly $800 billion stimulus program went toward roads, bridges, and other needs. Infrastructure investment would make the U.S. more competitive in the long run while creating jobs in the short run, and since the U.S. can borrow for next to nothing, the financing would be cheap. But Boehner is opposing Obama’s debt proposal—which includes $50 billion in infrastructure spending—because it doesn’t cut spending enough. That’s unfortunate.

Where could the U.S. cut that wouldn’t damage its growth potential? The obvious targets are defense and entitlements, which together account for nearly three-quarters of federal spending outside of interest payments. The U.S. spends more on its military than the next 13 countries combined; that would suggest potential for some nips and tucks. Social Security’s imbalance could be fixed by raising the ceiling for wages subject to the payroll tax. The knottier problems are Medicare and Medicaid, whose costs have been driven up by extraordinarily inefficient health-care spending. The U.S. spends 53 percent more on health care per capita than No. 2 Norway while getting worse results. (Norwegians’ life expectancy at birth is a year and a half longer.) 

(Bold Face Is Mine.  A Repeat of Stuff You have heard here already.)

Making benefits less generous is the no-brainer way to close the gap. The forward-thinking way is to conquer diseases that sap America’s human and economic potential, as Jonas Salk’s vaccine did for polio in the 1950s. Medicare and Medicaid alone spend $140 billion a year on dementia care, the Alzheimer’s Association estimates, yet the U.S. spends only about half a billion dollars a year researching cures. George Vradenburg, chairman of USAgainstAlzheimer’s, argues that the disease could be mostly eliminated by 2020 with Manhattan Project-size funding; cuts to research could make the problem worse. “This disease could very well become the financial and social sinkhole of the 21st century,” says gerontologist Ken Dychtwald, chief executive officer of the consulting firm Age Wave.

Taxes, too, need to be reformed to amplify growth. Loopholes are a good place to start. The home mortgage interest deduction could be phased out over a long period, since all it does is encourage people to buy bigger houses and take on more debt. Savings incentives in the tax code mostly benefit the rich without actually increasing the rate of savings. But zeroing out all tax breaks would be a mistake. Some, like the one for research and development, enhance growth.

There is, of course, a point at which high tax rates slow the economy. Conservatives argue for holding down rates on capital gains and dividends while preserving all of the Bush high-end cuts on ordinary income. But the U.S. appears to be well shy of the tipping point at which hiking taxes would be counterproductive. The economy grew faster in the 1950s when the highest rate was 91 percent.

What’s limiting business investment and hiring today isn’t the prospect of slightly higher tax rates but the fear that there won’t be enough customers. Weak, uncertain demand is the lasting legacy of the Great Recession and the slow rebound since. In manufacturing, mining, and utilities, depreciation has outpaced fresh investment since the start of the recession in December 2007, leaving the sector with a decline in productive capacity, according to Federal Reserve data. Recessions have lasting consequences: Eroding capacity, they limit the economy’s ability to grow—and generate tax revenue—in the future.

Refocusing the budget debate on the future is something that both conservatives and liberals should support. Representative Jim Cooper of Tennessee, a fiscally conservative Democrat, worries that Congress isn’t taking the long-term entitlements crisis seriously. He says the government should copy the private sector by adopting accrual accounting instead of just measuring each year’s cash in and cash out. Accrual accounting would acknowledge how much the country owes future retirees. It would also differentiate investments in roads, bridges, and Head Start from day-to-day spending on paper clips and electricity. “The government is the last major entity left in America that doesn’t use accrual accounting,” says Cooper. “The business mantra is, if you can’t measure it, you can’t manage it.” Without that kind of discipline, he says, “Congress has very poor eyesight and won’t necessarily cut in the right place.”

Or, to put it in terms Katz might understand: When you still have 2,000 miles to hike, don’t throw away all of your pepperoni.
As You Know, Paul Ryan And His Cohorts Want To End Medicare And Social Security, And Turn Them All Over To Private Companies.

This Column From The Los Angeles Times Is A Very Loud Warning About What Can Happen When For Profit Companies Manage Social Programs.

You Really Need To Read This Because It Could Happen To You, Or Somebody Close To You!!

Getting the runaround on long-term care insurance

An insurance company relies on corporate gibberish to build a smoke screen around a denial of benefits.

Clinic Administers H1N1 Vaccinations
About 70% of people over age 65 will require long-term care services during their lifetime, and more than 40% will need care in a nursing home, according to the U.S. Department of Health and Human Services. (Joe Raedle, Getty Images / November 3, 2009)
Rita Corwin, 90, conscientiously paid her premiums for long-term care insurance for 21 years to make sure that if she needed help as she grew older and more fragile, she'd get it.
Yet now that she finds herself in a position to require such assistance, her insurer, Washington National Insurance Co., is denying her claims.

"She bought this insurance for the same reason anyone would," said Corwin's daughter, Leni, who has been representing her mother in their dealings with the company. "If you become disabled or need long-term care, it's just too expensive to pay for on your own."

As the baby boomers enter their sunset years, long-term care coverage represents an increasingly costly gamble for insurers. That's why Prudential stopped selling individual policies in March. MetLife exited the business in 2010.

About 70% of people over age 65 will require long-term care services during their lifetime, and more than 40% will need care in a nursing home, according to the U.S. Department of Health and Human Services.
Quiz: Test your healthcare knowledge

Long-term care insurance sold today can run as much as 17% more than just a year ago, according to the American Assn. for Long-Term Care Insurance, an industry group. Double-digit annual rate hikes have become routine for many policies.

Not surprisingly, some insurers have become more aggressive in denying claims.

Corwin, of Altadena, fractured her hip in a fall in October 2011. A hip replacement followed. And when it became clear that she'd need a caregiver to help her, Washington National made good on her policy and covered $150,000 worth of assistance, which lasted about a year.

In August, Corwin experienced pain in her neck and shoulder. Her doctor diagnosed the problem as severe cervical spondylosis, which the U.S. National Library of Medicine defines as "a disorder in which there is abnormal wear on the cartilage and bones of the neck" and "a common cause of chronic neck pain."

The doctor, James Shankwiler, said in a September letter to Corwin's insurer that her condition "predisposes her towards prolonged disability and limitation," making her "a candidate for long-term assistance and home health to allow her appropriate care and treatment."

But a month later, Washington National contacted Corwin's daughter to say that it wouldn't cover additional service by a caregiver.

The insurer based its decision on the fact that six months hadn't elapsed since treatment ended this year for the fractured hip.

It noted that Corwin's policy specifies that at least half a year of "normal daily living" must pass before a claim can be made for "the same or related cause."

Corwin's daughter appealed the decision, pointing out that the new claim wasn't for the same or related cause. It was for an entirely different cause with an entirely different medical diagnosis.
Corwin, don't forget, is 90. Stuff happens.

Also don't forget: She's paid nearly $38,000 in premiums to Washington National over two decades to safeguard against stuff happening.

But the insurer last month denied Corwin's appeal without even addressing the key issue — that the latest claim was for a different cause than the previous one.

"Successive confinement due to the same or related cause not separated by at least six months of normal daily living will be considered the same occurrence," the company concluded.

"The whole crux of the matter is that this is a different occurrence," Leni Corwin told me. "But they're not even considering that."

She said she was told by a Washington National service rep that the company's decision was final, so no further appeals would be considered.

I got in touch with Barbara Ciesemier, a Washington National spokeswoman. She declined to delve into details of Corwin's case, but she said by email that the insurer "acted in accordance with policy provisions."
"It is our objective to pay all claims in a timely manner, consistent with the terms and conditions of our policies," Ciesemier said.

She said approval of claims "is not triggered by a medical diagnosis, but determined by the care that is required due to that sickness or injury."

"These policies have a maximum benefit limit per occurrence or period of care," Ciesemier continued. "Once the per-occurrence maximum has been reached, no additional benefits are payable unless the insured qualifies for a new occurrence."

This is the same brick wall Corwin ran into. Washington National isn't acknowledging that the two claims resulted from two different medical problems.

Moreover, Ciesemier seems to be saying that the doctor's diagnosis wasn't even a factor in denying the claim. Rather, the insurer focused solely on the fact that the services of a caregiver were once again required.
Ciesemier's insistence that Washington National "acted in accordance with policy provisions" is belied by its own policy language, which states that a single "occurrence" is defined as being "due to the same or related cause."

I pointed out this seeming contradiction to Ciesemier.

She said only that "the deciding factor is based on the entirety of the policy language and the individual circumstances, not simply one provision of the policy."

I asked what that meant. Ciesemier said she'd have no further comment.
First of all, Washington National's denial letters cite only the "per-occurrence" provision in rejecting Corwin's claim. No other reason is given.

Moreover, I've read the entire insurance policy. I couldn't find any language that in any way redefines the nature of an "occurrence."

Nor could I find any mention that approval of claims "is not triggered by a medical diagnosis" but rather by "the care that is required."

In fact, the policy explicitly states that home healthcare must be "prescribed in a plan of care by a physician."
Washington National appears to be acting in bad faith in dealing with a longtime customer for no better purpose than to save itself some money.

If the company is so sure it's in the right, it shouldn't hesitate to explain itself plainly, to Corwin if not to me. The fact that it chooses to hide behind corporate gibberish suggests it knows perfectly well that its actions are indefensible.

Steven M. Stecher, who pulled down $2.1 million in total compensation last year as president of Washington National, is more than welcome to prove me wrong.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send tips or feedback to