Efficiency and Private Enterprise

I was getting started on reading Paul Krugman's column today, when my mind suddenly went off on a tangent. Says Krugman:

American health care is unique among advanced countries in its heavy reliance on the private sector. It's also uniquely inefficient.

America has a unique obsession with privatization--so much so that even our money supply is privatized (American money is issued by privately owned banks who rather sneakily call themselves "The Federal Reserve"). Various excuses exist for this obsession, but one of the most often used is that private enterprise is inherently "more efficient" than government enterprise.

This is true, but only in a limited way. The "efficiency" occurs because of the requirement to maximize profits and shareholder value. However, a company itself has no particular need for that efficiency to extend outside its own confines. From a company's perspective, an increase in "efficiency" would simply mean spending less money on payroll, or raw materials, or various other expenses, while simultaneously producing the same output (or spending the same on expenses and increasing output). This results in increased profits.

However, from an outside perspective, such as that of a customer, things are a bit different. The goal of a company is not to maximize efficiency for its customers--in fact, it is quite the opposite. The goal of a company is to sell as much as it possibly can. This means that efficiency for the customer is not profitable. Efficiency for the customer would mean, for example, selling products that are of good quality and good usefulness, at a low price. But profitability for a company means selling as many products as possible at a high cost, regardless of their usefulness. One way of selling more products is to avoid maximizing quality, because quality is expensive to produce; another is to sell people things that they don't actually need. A third is to gouge people for stuff that they actually do need. [see footnote below]

In other words, when Republicans (and some Democrats) talk about increasing efficiency through privatization, they are feeding you a load of crap. The best example of this, by far, is the American healthcare industry. But for the details on that, I refer you back to the aforementioned column by Paul Krugman.

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Footnote: Most companies also plot to increase their market share by lowering their prices, but given the fact that their competitors can all do this too, this is usually not a sufficient strategy. Companies have to strike a balance, and the way that this is typically done is to price their products or services at the highest possible level that they can get away with ("as much as the market will bear"), and then lure people in with promotions and "sales" offering better deals on a temporary basis. A good rule of thumb is, if a company believes it can get away with raising prices without hurting its market share, it will do so, and all its competitors will soon follow suit.

China and Taiwan: Soon to be Reconciled?

Elaine Supkis over at Culture of Life News II has put up a very interesting post on recent developments in China/Taiwan relations. I recommend reading the whole post to obtain the context, but, contrary to what has recently been reported in the western press:

Taiwan is being divided: do you want war with mega big China or reunification? The sane choice is obvious. The axe is going to be formally buried this week in Beijing.

The western press has been concentrating on the recent passage of China's anti-secession law, which paints a grim picture of China/Taiwan relations, while simultaneously ignoring the fact of a very recent and very close election in Taiwan.

Interesting. I can hardly wait to see what happens.

Yet another lamebrained scheme to introduce dollar coins to America

Government hopes we'd flip for new dollar coins

WASHINGTON -- American pockets could one day jingle with dollar coins engraved with the faces of presidents from George Washington to Bill Clinton if a plan to mint presidential dollars gets the OK.

Hoping to cash in on the popularity of the state quarter program -- which has generated $5 billion in revenue -- the House of Representatives began debate Tuesday on legislation that could turn the golden dollar coin into a hot collectable.

The coins would be minted at a rate of four presidents a year, starting with George Washington and working up to the modern day. Every former president, living and deceased, would be on a dollar coin if the bill becomes law.

So we'd have to put up with Ronald Reagan quarters? Ewwwwww. (I'm sure the conservative side of the nation would be equally loath to put up with Bill Clinton coins, too.)

Supporters hope the new twist will drive up demand for dollar coins. "That coin needs some sort of boost to do better," said Rep. Michael Castle (R-Del.), who sponsored both the state quarter and the presidential dollar legislation. "The question is, will there be enough demand for a young person to walk into McDonald's and tell the cashier, 'I want a $1 coin in change'"?

Well, pardon me for stating the obvious, but the way to create "demand" for dollar coins is to stop printing dollar bills. That's all it would take. Simply pass a law that says, starting at the beginning of next month, dollar bills will no longer be printed. I completely fail to see why Congress insists on waiting for a market-based solution to this issue when it's obvious it's never going to happen.

Because coins are more durable than bills, the government could save as much as $500 million a year on printing costs if the public embraced the dollar coin.

I imagine even more money could be saved if they stuck with one design, rather than the 40-odd designs they'd get with this ridiculous plan.

The golden dollar debuted in 1998, featuring Sacagawea, the young Shoshone Indian interpreter who guided the Lewis and Clark expedition. But the golden dollar has yet to come into widespread use.

This is because dollar bills are still widely available. As I've said.

Castle's bill also includes plans for a penny series in 2009 featuring images from the life of Abraham Lincoln and a series of collectable coins stamped with the images of the first ladies. The mint is also rolling out a series of commemorative nickel designs, celebrating the Lewis and Clark expedition.

Okay, now here's where things get really bizarre. A penny series?!?!?!?! What???? Pennies are so worthless they practically qualify as litter. In fact, the United States Mint already spends almost a whole cent minting each penny. Their primary proponent is an absurd organization calling itself "Americans for Common Cents," which is merely a lobbying organization for the zinc industry, specializing in coming up with bullshit polls to make it look like pennies are supported by a majority of Americans.

"We've really seen a coin renaissance in the past few years," said Henrietta Holsman Fore, director of the U.S. Mint. Coins tell the story of our nation. They help us reconnect with our history."

This is bullshit. The real story here is that the United States Mint makes a profit on each coin it strikes, including pennies. If we go to a system that results in fewer overall coins, the Mint makes less money. It's that simple.

The dollar coin legislation is expected to win easy approval, but to get to the floor, Castle had to persuade North Dakota, which had no interest in seeing one of its most famous residents, Sacagawea, booted off the dollar coin. The compromise calls for Sacagawea dollars to be minted side by side with the presidential coins -- and for the presidential coins to wait until after the Lewis and Clark celebration ends in 2008.

Let me be clear. I strongly support the immediate elimination of pennies and dollar bills, with the aim of moving towards dollar coins. I also think it might be a good idea to introduce two-dollar coins, and possibly to eliminate nickels. The goal of all this is to make our money system more efficient.

The two primary inefficiencies in the current system are pennies and dollar bills, and the issue with both of these is that they are not worth the effort it takes to process them, compared to the alternative. Pennies are simply a waste of time, a waste of perfectly good metal, and possibly a significant environmental pollutant, given that people generally don't even bother picking them up off the ground anymore. Dollar bills are a problem because the American dollar is no longer valuable enough to justify having a paper bill to represent it. This point is not at all obvious--in fact, it never occurred to me until I spent some time in Canada and Australia, two countries which have both eliminated one dollar bills. At first, I thought it was really bizarre, not having a one dollar denomination, but after a day or so in Canada, I realized how nice it was to not have the fucking things clogging up my wallet. Even better, both Canada and Australia also have two dollar coins, which means a smaller total number of coins jangling around in my pocket. Think of it--how much effort do you have to go through in order to prevent your wallet from getting literally clogged with one dollar bills? If I get lazy about it, it's not unusual for me to end up with fifteen or twenty of the damn things, sometimes even more. In order to prevent this, I have to go through the effort of getting rid of them on a regular basis, typically with just about every cash transaction I make. This is really tiresome.

The basic problem is that inflation has finally brought us to the point where you really can't buy anything significant for a dollar. Depending on what measure you use, a 2003 dollar is worth anywhere between 3.5 cents and 17 cents in 1953 dollars. Even just going back twenty years, to 1983, gives a value of 32 to 62 cents. This means a dollar pretty much counts as "change" rather than as real money. Using a coin instead of a bill just makes more sense.

Chickenshit freepers once again trying to drown out the voice of reason

This time their target is actress Maggie Gyllenhaal, who dared to publicly question the official dogma that the 9-11 attacks occurred because "they hate us for our freedoms":

Actress stirs up new firestorm with comments questioning U.S on 9/11

NEW YORK (AP) - Maggie Gyllenhaal has waded into sensitive political waters by raising questions about Sept. 11 and American foreign policy.

The 27-year-old actress, who stars in a new film about the 2001 terror attacks on the World Trade Center, said in an interview last week that the United States "is responsible in some way" for the attacks. A fan website devoted to Gyllenhaal was overwhelmed with criticism, forcing the site's editor to remove the ability to post messages "because it's gotten too outta hand."

In a statement issued Monday by her publicist, Gyllenhaal said Sept. 11 was "an occasion to be brave enough to ask some serious questions about America's role in the world. Because it is always useful as individuals or nations to ask how we may have knowingly or unknowingly contributed to this conflict.

"Not to have the courage to ask these questions of ourselves is to betray the victims of 9/11."

Everyone knows the official freeper story, namely that "America's role in the world" is to spread "freedom" and "democracy"--and never let this "truth" be questioned in light of tedious historical facts like the long American tradition of interfering in the affairs of, or even forcefully overthrowing, foreign governments who dare to enact policies unfavorable or threatening to American interests. Spare me. The United States has demonstrated on numerous occassions that it is perfectly willing to overthrow a democratically elected government to install a dictator who is more willing to accomodate American expectations. And yet we expect everyone in the world to love us.

Perhaps the most tiresome aspect of all this is the right-wing belief that the truth can be changed simply by repeating the standard lies over and over, as loudly and by as many people as possible. As if the truth can be determined solely through majority acclaimation. As if by complaining loudly enough, they can get all those pesky third world people to shut the fuck up and love America, in spite of the screwing they are getting on our behalf.

Maggie Gyllenhaal was already one of my favorites--now I guess I'll have to start worshipping her or something....

Good news from Mexico

An interesting development in Mexico:

Mexico City's mayor back on job after favorable court ruling

Mexico City Mayor Andrés Manuel López Obrador was back on the job yesterday after being banished from his office for 18 days by a congressional vote to impeach him.

[snip]

López Obrador was accused of violating a 2001 court order to stop building a hospital access road on private land. The dispute is minor, but the congressional vote to strip him of his immunity and his job as mayor could cost him his place on next year's presidential ticket.

According to this, that hospital access road was never actually built. So it sounds to me like he actually obeyed the court order, and the contempt of court charge is completely trumped up--with the aim, of course, of keeping Obrador out of the running in Mexico's presidential election next year.

Continuing on:

The federal attorney general's office filed abuse-of-authority charges against him last week, only to have them rejected by a judge who said prosecutors made a technical mistake. Since López Obrador no longer faces criminal charges, he said there was nothing to prevent him from returning to his office.

"The whole federal government used all its power against López Obrador and it failed," said political analyst Lorenzo Meyer. "This time, López Obrador had more political muscle."

The mayor, who is often referred to as AMLO, demonstrated his strength to the nation Sunday, when nearly 1 million people took to the streets in a silent march he had called for the day of the congressional vote. Mexicans heeded his warning that the country's democracy is being threatened by politicians who want to remove him from the presidential ticket simply because he is the front-runner.

[snip]

As his supporters gathered Sunday in Mexico City's main plaza, López Obrador outlined his campaign platform, which focused on reducing the misery quotient for millions of impoverished Mexicans.

Heaven forbid that the poor should be helped--it's no wonder the Mexican powers-that-be want him out of the running.

He also offered a message to those who worry he is following in the footsteps of Hugo Chávez, Venezuela's leftist president and an ally of Cuban President Fidel Castro. "There is no reason for anyone to be worried or alarmed," López Obrador said. "It will not be us who damage Mexico, because we deeply love this country and we are committed to rescuing it."

Well, I don't agree with the assessment of Chavez as "damaging", but that's another topic entirely.

Doctors: Beginning to Get a Clue?

I was stuck late at the office while a repairman was fixing our soda machine, when I came across this article:

Only 3 percent in US follow health advice - study

WASHINGTON, April 25 (Reuters) - Only 3 percent of Americans follow health advice to keep the weight off, exercise regularly, eat five or more servings of fruit and vegetables a day and avoid smoking, according to a report issued on Monday.

Many studies show that people who eat healthily, exercise and do not smoke are far less likely to develop heart disease, cancer, diabetes and other chronic and deadly conditions.

Yet Americans find it almost impossible to take these steps, Mathew Reeves of Michigan State University and colleagues found.

"I was surprised it was this low," Reeves said in a telephone interview.

Well, yeah. I would have thought it was fairly obvious. Just look around at how many fat, out of shape people there are waddling down the Frito Lay isle in the local grocery store.

It was at this point that the repair guy finished his work, and I got to finally go home, the article only partially read. So I was all set to post an entry here with a title something like "100% of Doctors Missing the Point Entirely" or something like that, but when I finally had a chance to read the remainder, I saw this (this is Reeves again):

"We need to do much more societally and in terms of government in making an environment where it is a lot easier to do this. Let's start thinking about how we construct our neighborhoods and our cities. Let's start thinking about the way we work and the long commutes and working 40 hours a week."

[And by "do this", Reeves is referring to exercising, eating right, not smoking and keeping body weight at a reasonable level.]

Bingo! The man gets it! Or, at least, he gets a crucial part of it.

Sometime last year, I recall reading an article in the local paper where it had been decided by some officious sounding medical body that the standard of 30 minutes of exercise at least five times a week wasn't good enough, and that it should be raised to 60 minutes. My very first reaction to that was, "Where the hell am I going to find the time for that?" Seriously--I have enough trouble coming up with a meager 30 minutes, given that, at my age, I can't just instantly start exercising. I have to warm up a bit first, right? So that 30 minutes really isn't 30 minutes--it's some indeterminate longer period. Possibly as much as 60 minutes, for people who have to travel to a fitness facility like a YMCA or something. And now they (whoever "they" are--I should probably see if I can Google this) want to add an additional 30 minutes a day? No way! Not possible. The day is only 24 hours long, and every single one of those hours is already spoken for. Losing sleep is clearly not acceptable, a fact any doctor would surely agree with. And, when you subtract out work, getting to and from work, and basic life necessities like cooking and cleaning, bathing, brushing your teeth, stuff like that, how much time is left? How many hours of "free time" does the typical person have every week day? Only a couple of hours, I'd guess, and probably a lot of us can't even say that. And I need to emphasize here that this is the time that should matter the most! Unless you are one of those lucky few who truly find self-actualization in your chosen career, the free time on those short little weeknights and measely two-day weekends are what life is all about.

So when I read Reeve's comment about the 40 hour work week possibly being a threat to people's health (because that is one of the things his comments suggest, although he doesn't say so explicitly), I have to admit to being quite thrilled. I sincerly hope this guy doesn't get swept under the rug somewhere--daring to suggest that maybe we should all be spending less time at work is a pretty radical idea in a country like the U.S.

Krugman on healthcare in America

Somebody ought to give Paul Krugman a medal:

Passing the Buck

A choice excerpt (I'd post the whole columm here, except that would be illegal):

Isn't competition supposed to make the private sector more efficient than the public sector? Well, as the World Health Organization put it in a discussion of Western Europe, private insurers generally don't compete by delivering care at lower cost. Instead, they "compete on the basis of risk selection" - that is, by turning away people who are likely to have high medical bills and by refusing or delaying any payment they can.

Yet the cost of providing medical care to those denied private insurance doesn't go away. If individuals are poor, or if medical expenses impoverish them, they are covered by Medicaid. Otherwise, they pay out of pocket or rely on the charity of public hospitals.

So we've created a vast and hugely expensive insurance bureaucracy that accomplishes nothing. The resources spent by private insurers don't reduce overall costs; they simply shift those costs to other people and institutions. It's perverse but true that this system, which insures only 85 percent of the population, costs much more than we would pay for a system that covered everyone.

And the costs go beyond wasted money.

First, in the U.S. system, medical costs act as a tax on employment. For example, General Motors is losing money on every car it makes because of the burden of health care costs. As a result, it may be forced to lay off thousands of workers, or may even go out of business. Yet the insurance premiums saved by firing workers are no saving at all to society as a whole: somebody still ends up paying the bills.

This last paragraph really jives with what I witnessed in the last couple of years on trips to Toronto and Sydney. Both of these cities are located in countries in which most of the healthcare provided comes from a national healthcare system. This means that businesses, especially small businesses who can't afford to, have no obligation to provide healthcare plans to their workers. Not only does this drastically lower the cost of doing business, resulting in a veritable explosion of small business and entrepreneurship in these cities, but it also makes it cheaper (and therefore easier) for these businesses to hire workers when they need them. And this is all due to a government program, paid for by the taxpapers. Unfortunately, as Krugman goes on to point out in his piece, this sort of thing has become an almost impossible sell in the United States, thanks to right-wing pro-market propaganda.

Of course, one has to ask the question, "But if the American healthcare system is so expensive and useless, why does it have so much support (recalling Bill Clinton's ill-fated attempt to reform the system)?" I think the reason for this is not entirely obvious, but is wholly related to what I've already commented on. The crux of the matter is that, in spite of the ever-increasing costs of healthcare premiums, big corporations are in a much better position to afford these costs than their smaller competitors. This is the key: high healthcare costs not only benefit the healthcare industry, they make it harder for smaller businesses to compete with big companies. They make it harder for smaller companies to expand and hire new workers, and easier for bigger companies to recruit the best workers away from their smaller competitors. Big companies surely know this, and want to keep it that way.

Krugman's column is apparently the first in a series. I'll certainly be looking forward to the next one.

Safety of food and dietary supplements

It looks like people might be able to obtain ephedra again. A previous FDA ruling banning it has been partially struck down by a federal judge in Utah (article link):

The case was brought by Nutraceutical, a Park City, Utah-based company. In a prepared statement, company President Bruce Hough said that the decision was about protecting the public's access to safe dietary supplements, which, under the law, are treated as food, not drugs. That means that to pull them from the market, the FDA must prove that the drug is not safe. The court decided that the FDA may have proved that for higher doses of ephedra, as high as 100 milligrams, but not for the lower doses of 10 milligrams.

Needless to say, cardiologists have something to say about this decision. Prediman K. Shah, at Cedars-Sinai Medical Center in Los Angeles:

"It's a dangerous drug that can be abused. It has serious cardiovascular risks, and I don't see any reason why they should even have it on the market as an unregulated supplement. It is a stimulant. Just like cocaine triggers heart attacks or strokes, so can ephedra."

Steven Nissen, a cardiologist at the Cleveland Clinic:

"The problem is that the law is designed to allow companies with dangerous products to sell them until somebody can absolutely prove that they're harmful," Nissen says. "How are these drugs any different than prescription drugs? These drugs don't have to show benefit, and they have to be proven harmful. How does that make any sense?"

These doctors advocate the idea of requiring the same rigorous testing of dietary supplements that is required of prescription drugs, namely they should have to be proven to be safe and effective in order to be sold. Naturally, the dietary supplement industry disagrees: they maintain that supplements should continue to be classified as foods, which would mean that they could only be banned if they are proven to be harmful.

But neither side is really being honest. Firstly, the effect of requiring pharmaceutical-grade testing on herbal supplements would be to remove them from the market, which is precisely what the drug industry wants. The reasoning is fairly obvious: this type of testing is very expensive, and is therefore only cost-effective if the substance being tested is patented. Dietary supplements are not patented, so there is little likelihood that anyone out there would be willing or even able to shell out the millions of dollars needed to test them.

Secondly, there is a larger aspect of the problem, which is not even being mentioned in this debate. Foods can be sold until someone proves them to be harmful. And, as has been demonstrated in this case, obtaining such proof can be difficult, even in cases where experts agree that the substance is dangerous. This doesn't just apply to dietary supplements, but to all food substances. A company can put anything it wants in your food, unless and until someone proves that it is dangerous to do so. This covers everything from dead bugs to synthetic animal hormones, to genetically modified foods, and the criterion for what constitutes "dangerous" is apparently pretty high. Clearly, what is needed is a lowering of the bar, in the name of protecting the food supply. The dietary supplement issue is only part of a much larger and more serious problem.

[For the record, I don't particularly care about ephedra one way or the other, except as part of the larger issue. Also, I think the bar could stand some raising with respect to drug testing as well. When I used the term "rigorous" above, I was using it pretty loosely. But that is a seperate issue.]