By J.D. Seagraves, on July 31st, 2008
Conspiracy theorists have long been on guard against the “New World Order” – particularly ever since then-President George H.W. Bush uttered the phrase during his 1991 State of the Union address – but lately, talk of a “North American Union” merger between the United States, Mexico, and Canada has made the leap from late-night talk radio and the blogosphere fringe and into respectable media. Is there anything to all this?
There are three components to the conspiracy:
- The North American Union (NAU)
- The NAFTA Superhighway
- The “amero” – a unified currency for the U.S., Mexico, and Canada
Each component has a varying degree of truth.
For starters, the NAU has long been many an internationalist’s dream, especially since the European Union (EU) came into being. There is something called the Security and Prosperity Partnership (SPP) between the U.S., Canada, and Mexico, and conspiracy theorists say it’s the forerunner to the NAU. At least one Canadian political party takes the issue very seriously, and in general, the theoretical merger has been given more attention in Canada than in either the U.S. or Mexico. And finally, the Council on Foreign Relations (CFR) – another conspiracy theorist bugaboo – has issued a white paper advocating the establishment of a common North American security perimeter, the development of biometric North American border passes, and the adoption of a common North American tariff.
So is the NAU for real? There is some circumstantial evidence to suggest it may be but certainly not enough to convict “beyond a reasonable doubt.”
Next up, the NAFTA Superhighway: This component does appear to be real – at least in large part. Of course, the name “NAFTA Superhighway” is a creation of its opponents, but there are real proposals for the system conspiracy theorists allude to, and some of these new roads are actually being built as we speak.
Finally, the “amero” – a shared currency for the three nations. This component is the least likely of the three, as there is no reliable evidence that a unitary continental currency is on the horizon. However, a savvy conspiracy theorist might suggest that the NAFTA Superhighway is Step 1, the NAU Step 2, and the amero the third and final step of tri-national merger. Thus, why should there be much evidence for the amero’s existence at this point?
The term “amero” was coined (no pun intended) in 1999 by Canadian economist Herbert Grubel. Grubel did manage to interest then-Mexican President Vicente Fox in the idea but could get no traction in the U.S. or especially in his native Canada [source]. Thus, the amero is strictly theoretical… Well, mostly.
In an effort to “publicize” the pending merger of the three nations, private minters have taken to making gold, silver, and copper amero coins. In typical fashion, conspiracy nuts who got their hands on these coins thought they were secretly made by the NAU.
Well, gee. If the NAU means the abolition of the Federal Reserve and a return to gold and silver coinage, I have only one question: Where can I sign up?
By James Ratcliff, on July 31st, 2008
The twentieth century taught us everything we need to know about human nature. For every grisly lesson learned on one end of the scale (the niche that belongs to Hitler, Stalin and the Khmer Rouge), we witnessed a remarkable example of sacrificial love for others at the opposite end (Mahatma Gandhi, Mother Teresa and Albert Schweitzer).
A glance at the most noticeable trouble spots around the globe in 2008 (suicidal bombers in Iraq; genocidal warriors in Africa; military despots in Myanmar) reminds us that even the most gruesome lessons in history are soon forgotten. What lessons did the last century teach us about the laws of economics? Will they, like other lessons of history, be wasted on future generations?
Here, in no particular order, are my Top Four Lessons of twentieth-century economic history:
- Planned economies (the ex-Soviet Union and the continuing disaster called Cuba) don’t work and can’t make people happy.
- Societies that suppress freedom of religion don’t work and can’t last (same as above: Fidel doesn’t have enough relatives to freeze a nation in time forever).
- Economic growth does not in itself eliminate poverty or make people happy (as the overloaded welfare system in the United States proves).
- Modern economic science has absolutely no answer for the question, what makes life worth living?
People can pretend to ignore one or more of these four lessons of recent economic history; indeed, every trouble spot in the world today is the result of someone insisting that one of these four things isn’t so.
A Wrong Image of Man and His Reality
There is good news on the horizon: an increasing number of economists are fed up with the limitations that mainstream economic theory imposes on the search for solutions to the world’s most pressing problems. You haven’t seen their names in the press; they probably won’t be nominated for the Nobel Prize anytime soon. But if you listen, you can hear their voices in the wilderness.
Dr. Kamran Mofid, an Iranian-born economist and founder of the Globalisation for the Common Good Initiative, is one of those calling for a return to sanity. In Mofid’s opinion, we only need to take a look at the state of the world to reach an obvious conclusion: economics has failed to provide a roadmap for modern society because it has failed to take into account humanity’s deepest need of all—our need of a meaningful spiritual life.
Mofid examines the roots of economics to discover why it has gone so wrong. As Mofid points out, economics was divorced from theology at the end of the eighteenth century; it was freed from political theory in the nineteenth century; finally, in the last several decades of the twentieth century, economics was turned into the abstract science that confounds people today.
Mofid’s mission is to make economics work for the good of all people on earth by reuniting economics and theology. “We need to recreate economic theory based on an understanding of what a human being really is and what makes him happy,” he explains. “As long as economics is based on a partial or wrong image of man and his reality, it will not produce the results we need.”
The First Economist
Kamran Mofid is to the 21st-century what John Ruskin was to the nineteenth. Ruskin opposed the laissez-faire economists whose thoughts provided both philosophical and practical justification for the sprawling slums left in the wake of Britain’s Industrial Revolution.
In Ruskin’s view, society was betrayed by economists like Adam Smith, David Ricardo and John Stuart Mill, who advocated the benefits of enlightened self-interest. As Ruskin told an audience at the Bradford Town Hall in 1864, “Friends, our great Master said not so.” With an ear to Jesus’ words in the Sermon on the Mount, Ruskin concluded, “Indeed, to do the best for others, is finally to do the best for ourselves.”
“Economics must once again find its heart and soul,” says Mofid, echoing the call to sanity voiced by Ruskin in Victorian England and—if we are serious about wanting to get to the root—by King Solomon of Israel. After all, economics is simply about wants being satisfied, and in that sense the author of Ecclesiastes was the first economist.
Since the end of the eighteenth century, economists have written elaborate prescriptions for the regeneration of society. Solomon knew better. “People are always writing books, and too much study will make you tired,” he advised 3,000 years ago. Ruskin suffered incapacitating mental attacks the last twenty years of his life; he spent his last decade as an invalid at his estate in England’s Lake District.
In Small Is Beautiful, E. F. Schumacher wrote, “It is hardly likely that twentieth-century man is called upon to discover truth that has never been discovered before.” Schumacher was right, of course; we won’t discover anything new by opening the pages of a 3,000-year-old book. But it will take us to the real root of economics, and it is there that we can begin to understand what went wrong.
I’ll take a look at King Solomon’s economic theory one week from today. Once we understand the source of the problem, we’ll have an opportunity to be part of the solution.
By J.C., on July 31st, 2008
My last post generated an interesting comment from a reader questioning whether telemedicine can actually be used to do a physical exam. The reader brings up some great questions about how telemedicine can actually work. Such questions and resistance to new technology clearly highlight the struggle for technological progress in medicine.
While I agree that telemedicine is not fully developed and only in its early stages, there are many fields which currently lend themselves to key physical examination points though video conference. One such field is cardiology in which a tele-stethoscope is placed on the patient to allow the remote consulting physician to evaluate heart sounds. In this example the patient does not usually place the tele-stethoscope but a technician or nurse does. Similarly, an echocardiogram machine with teleconferencing capabilities can allow a consulting cardiologist to view the technician doing the echocardiogram and the results live. The examples of telemedicine in the field of cardiology are many. Another example of telemedicine is the use of a tele-otoscope for ENT physicians to examine the ears, nose, and throat remotely. Being able to get this data remotely clearly would be more efficient and save time and money.
While all of these are just theoretical examples, there are plenty of real-life examples of telemedicine being used to examine patients. Any physician or non-physician can search the literature and find great examples.
One example is a recent report coming out of Virginia Commonwealth University and the Virginia Department of Corrections. The surgeons in that group conducted 55 telemedicine sessions over a year-long period. With the assistance of a nurse at the correctional facility and tele-stethoscopes and dermascopes, they were able to recommend surgery for 27 patients with the only face-to-face meeting being the day of surgery! Using telemedicine, they were able to provide care for a needy population and reduce significant pre-operative work-up and patient transfer costs.
By Bhagwad Jal Park, on July 30th, 2008
In the previous article, I explained how in any game, it is reasonable to assume that a stable outcome will be a Nash Equilibrium. Today, I will show how it is impossible for rational people like us to save the planet by cooperating to stop using carbon fuels.
Currently, as things stand, carbon fuels definitely have an edge over traditional fuels. As of now, they are cheaper, and they can deliver more power than automobiles that run on eco-friendly sources like electricity. (Let us ignore for the moment the truth that electricity is largely produced using carbon fuels!)
If it weren’t for the fact that the large scale use of carbon fuels in our automobiles is destroying the environment, life would be great. Sure, they’ll run out someday but not in our time. In the world of game theory, each person is uniquely selfish. We’re not caring about future generations here. By the time our great-grandchildren realize that the earth has no more fuels, we won’t be around to face the consequences.
Also, we need to keep in mind the fact that one person using eco-friendly fuels is not going to save the environment. Concordantly, if everyone else is using eco-friendly fuels, then one person using carbon fuels isn’t going to destroy the environment either.
It’s also true that if you’re the only one using carbon fuels, you gain a massive advantage over everyone else. You reach your workplace faster, and you can perhaps even rob a bank and get away, as the police will not be using carbon fuels, and hence can’t keep up with you.
Conversely, if you’re the only one to use eco-friendly fuels, you will get creamed personally (babes stay away from you) as well as professionally (more time to reach a client, you have to stay closer to work, etc).
So let’s split the population into two segments. You, and everyone else. There are two choices for each segment. Using eco-friendly fuels, and using carbon based fuels. The diagram above shows the possible outcomes for each situation where each both parties have made their choices.
What should you do if everyone else is using eco-friendly fuels? Should you use them too? No! As the environment will still be saved if you use carbon-based fuels and you get an advantage over everyone else, you must use carbon-based fuels if everyone else is using eco-friendly fuels.
Suppose everyone else uses carbon fuels, then should you use eco-friendly fuels? Of course not! Why should you? It’s not as if the earth will be saved just because you choose to use eco-friendly fuels. And if you’re the only one not using carbon fuels, you’ll be a loser compared to everyone else.
Therefore, for you, using carbon fuels is a dominant strategy. This means that it’s a strategy that makes you better off no matter what the other party is doing.
This logic of course holds true for everyone else as well. The outcome is that, each person behaving rationally dooms the earth collectively. This counter intuitive result where rational decisions lead to disaster is commonly known as the “Prisoner’s Dilemma.” There’s no way that we can save the earth if the only solution is cooperation.
The prisoner’s dilemma can be overcome if there is a law against carbon fuels. This way, the cost of using carbon fuels goes up (as the law can punish you), and the payoffs in the diagram change.
There is another solution to the prisoner’s dilemma. Game theory assumes that everyone is rational. However, people don’t think rationally. I certainly don’t. I use a bicycle instead of a car because of an illogical and stupidly misplaced sense of civic duty. I feel that my actions actually have an effect on the environment when they really don’t. The paradox is that when everyone behaves illogically, it is possible for a good outcome to ensue!
So maybe rationality isn’t all that it’s hyped up to be. We will explore this idea in later articles where I will show that nature has deliberately made us illogical precisely for the purpose of avoiding the Prisonner’s Dillemma. There is hope for our planet after all!
By R. C. Anderson, on July 30th, 2008
Stroke affects men and women around the world in a devastating manner. Although some strokes are more severe than others, they almost always lead to a change in the patient’s lifestyle. Recently, two articles have found interesting links to stroke, what may cause it and easy ways to attempt to prevent it.
When many adults were children, a frequent refrain they may have heard was “go outside and play”. Now, however, it seems this refrain is rarely used which has led to an increase in childhood obesity over the past several decades. Adults are often the ones setting such an example by lying on the couch watching random television programs, rarely going outside or exercising. In fact, the obesity of the U.S. population has increased dramatically since the 1970s. While only 47% of the population was considered obese in the 1970s, this number jumped to 56% in the 1990s and to 65% in 2000.
Is it possible that this type of stagnant, indoor-based behavior has other consequences? According to two studies on stroke and its predictive factors, the answer is most probably yes. In a July 17 issue of Stroke, Dr. Stefan Pilz and associates published data from approximately 3,300 patients who had been referred for coronary angiography. Vitamin D levels were measured in these patients and their health was then monitored for eight years. Pilz believes this study showed low levels of vitamin D to be an independent predictor of fatal stroke with low levels equaling an increased risk of stroke. If this is true, one simple way to curtail stroke could be easy: get outside.
The Role of Vitamin D
Vitamin D is made by the body upon exposure to the sun. If, however, one stays indoors too much, it could be difficult for the body to generate the necessary amount of this vitamin. This is not to say people should spend inordinate amounts of time outdoors. Too much time in the sun, especially without sunscreen, could lead to problems of its own, such as skin cancer. According to Pilz, vitamin D supplementation in stroke patients has reduced many problems related to bone strength and could offer a protective measure against stroke. Unfortunately, it is now estimated that as much as 50% of those in the U.S. and Europe could be deficient in vitamin D.
A second study, authored by Dr. Jiu-Chiuan Chen and published in the same issue of Stroke, explored the possible link between stroke and sleep. Over 93,000 women were enrolled in a study to assess if the duration of their sleep could be correlated to their risk of stroke. These women were followed for almost eight years and the results were interesting, if not disturbing. Using seven hours of sleep per night as a baseline, women who slept six, eight and nine hours were tracked.
Women who slept six hours suffered 14% more strokes than those who slept seven hours each night. The answer, however, is not to sleep more. Women who slept eight hours experienced 24% more incidence of stroke. While these numbers may not sound too frightening, the true jump occurred in women who slept nine hours each night. This group of women increased their stroke risk by 70%. Unfortunately for those considering simply setting the alarm clock, Chen stated that he did not believe the solution of artificially reducing ones sleep duration to lower the risk of stroke could be supported by their data. On the other hand, it often seems the more active an individual is, the more optimal their sleep conditions become. If this is true, it may be possible for those sleeping too long at night to naturally change their sleep patterns by changing what they do during the day.
Costs to the Nation
Stroke has become a serious problem in the U.S. In 2007, strokes cost the U.S. $62.7 billion. The American Heart Association has calculated that every 45 seconds someone has a stroke and every three to four minutes someone dies. In fact, stroke accounted for one in every 16 deaths in 2004 making it the third leading cause of death. Perhaps surprisingly, women made up 61% of the 5.7 million stroke victims in 2004. While only 58,700 men died as a result, almost twice as many women, or 91,400, did. While Caucasians have one of the lowest percentages of strokes at 2.5%, native Hawaiians or Pacific Islanders have the highest at 8.1%.
With more people sitting indoors, the numbers of people affected by disease and infirmities are bound to increase. The increased sedentary lifestyle of today, along with other factors, seems to have led to an increase in obesity, and it seems it will lead to an increase in stroke risk. The solution of simply getting outside and exercising seems so simple, and yet many don’t apply it. In 2005, it was found that Japanese men reduced their risk of stroke by 29% and women reduced it 20% merely by walking and participating in some kind of sport. With so much expense, both financially and in terms of human suffering being expended, putting effort into preventing such a disease seems only logical.
By G.L.C., on July 30th, 2008
The rising oil prices have forced the government to act. Many experts have blamed the recent increase in oil prices on speculation. The government is planning to introduce a legislation – the Stop Excessive Energy Speculation Act – in an attempt to rein in speculations in the oil market. Will the legislation in its present form achieve its goal?
The legislation requires the Commodity Futures Trading Commission to eliminate excessive speculation in oil. It aims to do this by restricting the amount of trades by certain participants. The CFTC will have to differentiate between “legitimate” and “non-legitimate” hedging by market participants and gather data on over-the-counter and index traders and swap dealers. It will increase transparency and disclosure requirements so as to equip the CFTC to more effectively carry out its proper role of commodity market oversight.
The legislation also authorizes the CFTC to increase its staff by 100 to fulfill its new responsibilities.
The legislation will place sensible checks on the influence of speculators by placing reasonable limits on large, over-the-counter trades and by closing the loopholes that have permitted traders to make large-scale speculative trades through overseas exchanges. It will compel U.S.-based traders to abide by the U.S. regulatory regime when placing trades on foreign exchanges.
The legislation is sponsored by Senate Majority Leader Harry Reid (D-Nev.) and Sens. Dick Durbin (D-Ill.), Patty Murray (D-Wash.), Charles Schumer (D-N.Y.), and Amy Klobuchar (D-Minn.).
Critics point to a provision in the legislation that would allow the regulator to order companies to liquidate their swaps transactions if it concludes that a major market disturbance has occurred. In reality, this would require companies to break their privately negotiated risk management contracts, even if the swap complied with trading limits that were in place when it was originally negotiated. In its present form it is likely to face strong opposition, especially from the Republicans, unless it includes provisions for expanding domestic oil drilling. The legislation could drive commodity markets out of the U.S. and make it more expensive for bona fide hedgers to protect themselves from volatile prices, according to the group.
This legislation is not the only effort underway to rein in speculators. Collin Peterson (D-Minn.), House Agriculture Committee Chairman, is working on a bill to tighten regulation of over-the-counter and swaps trading in the agricultural and energy futures markets. The Chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations Rep. Bart Stupak (D-Mich.) has introduced legislation to curb participation by investors and other financial players in the energy markets.
Is it just speculation or is there more to the rise in oil prices? On July 18, oil prices tumbled below $130 a barrel for the first time in more than a month. Did the proposed legislation have anything to do with this? What will happen if the oil prices increase after the proposed legislations is passed?
By J.D. Seagraves, on July 29th, 2008
If one accepts the basic free-market concepts of comparative advantage and division of labor, it naturally follows that free trade and liberal immigration—the hallmarks of globalization—are good things. Virtually no economists dissent from this premise, and yet so much of the American public remains hostile to globalization. Why is this the case?
Many people erroneously believe that immigrants steal American jobs, and free trade results in lower living standards. Not only are these beliefs contradictory to widely accepted economic theories, but they’re objectively false as well. Study after study shows that immigrants—even illegal ones—benefit the U.S. economy, and the same can be said of expanded international trade.
Many anti-globalists also complain that immigrants “take money out of the economy” by transferring U.S. dollars to Mexico and elsewhere. While this is undoubtedly true, taking money out of the domestic supply diminishes the inflationary effects of the Federal Reserve’s monetary expansion, thus keeping prices lower than they would be otherwise. Furthermore, international transfer promotes the global acceptance of the U.S. dollar which is another artificial bulwark against domestic price inflation. If total immigration were cut back to levels currently allotted for legal immigrants, not only would prices rise due to the higher wages demanded by Americans for doing unpleasant work, but the money these Americans were paid would remain in domestic circulation, causing even further price inflation. The logic of this is fairly straightforward, and yet there are still blue-collar nationalists calling for confiscatory taxes on international money transfers. It’s like they’re demanding to pay higher prices!
U.S. Debt Purchases
A similarly off-base argument is made against allowing foreign governments to purchase U.S. debt. When the federal government spends more than it takes in—as it always does—it has to issue debt instruments (bonds, bills and notes) to cover the shortfall. These instruments are sold on the open market, and about a quarter of them are purchased by America’s own central bank, the Federal Reserve. Americans then pay taxes to cover the interest paid to the Fed, which pays its expenses (including a 6% divided to its mysterious shareholders), and then dumps what’s left—the profit—back into the Treasury. This is really a shell game. What’s essentially happening is the federal government is printing money to fund about a quarter of its deficit. How do you imagine this affects the price of groceries and gasoline as denominated in dollars?
We are very lucky that China and other producer nations trade us real goods in exchange for paper debt obligations. After all, if China did not step to the plate, just think about what would happen:
1. With less demand for government bonds, prices would rise. This would mean the effective interest rates of the bonds would be higher, and since most private interest rates are based in large part on the yields of U.S. Treasury securities, this would result in higher interest rates across the board; slowing economic growth. Or…
2. The Federal Reserve would have to buy more than a quarter of the government’s bonds, thus expanding the supply of money and causing additional price inflation. After all, when the Fed buys a bond, it simply creates the money to purchase it out of thin air. This money then circulates throughout the economy causing the prices of all goods and services to rise.
China, by contrast, cannot print U.S. dollars, so any money it spends on U.S. bonds is money that already existed. China’s role in the U.S. economy is to keep prices down, both through the production of cheap exports and through the acceptance of U.S. debt obligation in return for those exports.
Putting Things in Perspective
The truth of the matter, however, is that the anti-globalists are on to something. The welfare state, which they blame immigrants for putting undue strain on, is unsustainable, as is the U.S.’s trade deficit. But the former is something we need to contend with irrespective of immigration, and the latter is a result of America’s widely accepted fiat money. After all, under the gold standard, long-term trade imbalances are impossible, since countries have to produce something of value in order to trade it—they can’t just fire up the printing presses to purchase foreign goods.
Immigrants and foreigners are often turned into scapegoats during times of economic uncertainty. Today, many Americans know something is not quite right, but they incorrectly blame others rather than looking in the mirror. It is our welfare state and monetary system—not immigrants or foreigners—that threaten our continued prosperity. We can close our borders to trade and labor if we want, but we shouldn’t expect a different outcome from when President Hoover did the same thing—right before the Great Depression.
By Evelyn Black, on July 29th, 2008
Not too long ago, I confess I was in a rather panicked state of mind about the economy. This was after Bear Stearns tanked but before IndyMac was seized by the FDIC. I thought that if the U.S. government could intervene in a big way and refinance homeowners who were facing foreclosure, then the free fall in housing values could be stopped and the economy could be stabilized.
Now that a housing rescue bill is about to be signed by the president, I’m not so sure.
The bill contains a variety of features, including incentives for first time home buyers and the now infamous Freddie and Fannie bailout. However, the part of the bill meant to help families facing foreclosure will only apply to a small portion of homeowners.
Certain requirements must be met in order for a borrower to be eligible for the program. First, the borrower must live in the home. Second, the mortgage has to be at least 31% of the borrower’s gross monthly income. Third, the borrower’s income must be verified even if the initial mortgage was a ’stated income’ mortgage that required no verification. Fourth, the mortgage company or bank that made the initial loan must agree to a refinance at no more that 90% of the home’s current value.
In other words, the bank holding the mortgage has to agree to take a loss or the whole deal is off.
We don’t really know if lenders will agree to this last requirement. A loss of 10% doesn’t sound that bad on the surface, but the terms are 90% of the home’s current value. In some parts of the U.S. where the housing bubble was especially out-of-control, home values have already dropped by as much as 30%, so if a buyer has a 100% “creative” sub-prime loan on a property like that, the lender will have to agree to a 40% loss. Thus far, lenders have not been anxious to rework loans or agree to short sales on homes facing foreclosure. It’s hard to know why they would be motivated to do so now.
Other terms are also problematic. If a borrower makes $32,000 a year, the mortgage payment on the soon-to-be-foreclosed property would have to be in excess of $826 a month in order for the borrower to qualify. That will cut out a lot of people in trouble on their loans. So will the income verification requirements. While it is certainly sound and sensible to require verification, chances are good that if the buyer couldn’t produce it for the original loan or couldn’t get a loan with proper income verification, that buyer won’t be able to get the refinance either.
Estimates on the total number of foreclosures expected within the coming year range from three to five million. Say the lower number is correct. That means the help this bill provides is a possibility for about 13% of the homeowners currently facing foreclosure. And of those 13%, only the ones who can get their original lender to accept a loss of anywhere from 10-40% will be successful.
That’s not very encouraging.
Before Bear Stearns failed, Benjamin Bernanke was asked about how to stabilize the housing market, and he made a suggestion that he said he knew would never be taken but he thought might work. His suggestion was that each original lenders rework the loans made during the housing bubble so that the loans were more in line with the property’s current actual value; that is, that each lender take a loss by reducing the principal on the loans. That would immediately make the loans good: the property value would match the loan against it. He knew however, that lending institutions would be loathe to do this.
Again and again we come back to this issue of lender responsibility. We all know that individual people can and do make terrible financial decisions. Faced with the prospect of rapidly inflating home values, lots of people jumped into loans that didn’t make sense on properties they really couldn’t afford, hoping it would all work out over the long haul as their homes grew more and more valuable.
Financial institutions however have a fiduciary responsibility to themselves and their customers to be smarter than that and to take the long view. We all know now that they did not do anything remotely close to that. In fact, not only were too many sub-prime “creative” loans made, they were then repackaged and sold as rock solid securities in ways that spread the contagion throughout the entire financial system.
Looking back, I think Bernanke had it right the first time: the correction should occur at the initial lending institution, and if it goes down as a result, so be it. That’s the market at work, right? Doing what it does best, killing off the weak and the poor decision makers. What we have now is the government stepping in to offer tepid help to a very few and attempting to back private bad debt with public bad debt.
The bailout portion of the bill is fodder for another post.
By even the most conservative reckoning, housing values still have a long way to fall before the market stabilizes. Many are putting that bottoming-out somewhere around 2010 or even beyond. In the worst case scenario, home values drop so precipitously that even “good” loans go upside down (that is, the borrowers suddenly owe more than the home is worth) and Fannie and Freddie have to actually start tapping Uncle Sam for cash to stay solvent.
If that happens, the terms of the rest of the bill won’t really matter anymore.
I think the bill can work if it isn’t used. That’s a weird place to be, and not a comfortable one.
By Jennifer Bunn, on July 29th, 2008
Medical tourism may be defined as seeking healthcare outside one’s own country. This is becoming more common as people search for affordable healthcare. In the U.S., patients travel to countries that perform the procedure they need for a fraction of the cost of the same procedure done domestically. In Canada, where healthcare is essentially free but where wait times may be unacceptably long, people are choosing to go to places that can perform the necessary procedure on the same day of arrival if desired. Some patients like to kill two birds with one stone and combine surgery with a holiday in an exotic locale.
What are the advantages for patients/consumers? As mentioned, costs may be considerably lower in other countries, allowing patients to combine a holiday with their procedure. Having surgery in another country can also cut down considerably on wait times for those patients who come from countries such as Canada, where wait times for elective surgery may be months. For example, wait time for a hip replacement may be longer than a year in Britain and Canada. In the U.S., restrictions on the patient’s choice of facility, surgeon, and the type of prosthetic used may be factors in patients choosing to receive medical care out-of-country. Additionally, many international hospitals have improved their facilities and standards of care to attract international patients. Many international hospitals have become JCI-accredited, which makes them even more attractive to foreign patients.
What are the disadvantages for patients/consumers? One disadvantage is that patients traveling to foreign countries for healthcare may actually expose themselves to infectious diseases to which their immune system has had no experience in dealing with (i.e. TB, malaria, hepatitis). Also, travel after some surgeries may not be recommended for some time and may be very uncomfortable. Post-operative care may not be to the same standard that some patients are used to, although many foreign hospitals are striving to remedy this.
Other considerations concern legal issues. Patients who are dissatisfied with their surgery results, or who have an adverse outcome, may have little recourse in other countries. Doctors in other countries may not have to adhere to the same insurance and malpractice standards as physicians in countries such as Canada and the U.S. Patients who suffer a poor outcome may have a difficult time finding a doctor in the U.S. who is willing to take on their care.
It seems the trend of medical tourism is here to stay. Patients who are considering receiving their care in a foreign country should thoroughly research the doctor and hospital where they will be receiving their care. They should also research insurance options for themselves before departure. Lastly, choosing a facility that has been JCI-accredited may provide some reassurance that the hospital they have chosen is maintaining basic standards of care.
Reference:
Health News Today, July 10, 2008. Washington Post, Wall Street Journal Examine Issue of Medical Tourism. http://www.medicalnewstoday.com/articles/114520.php.
By Cheryl Grey, on July 28th, 2008
Trains Lose
On May 10, 1869, the golden spike was driven home at Promontory Summit, Utah, and the first transcontinental railroad spanned the United States. For the next 60 years railroads were king, moving people, freight and the U.S. mail throughout the nation. By the time the U.S. entered World War I, the railroads employed 1.8 million people—more than one percent of the entire population at that time.
The railroads were so powerful they even controlled time itself, or at least its observance. Before 1883 clock setting was a purely local matter and regional governments decided for themselves what time it was based upon the position of the sun in the sky. But on November 18, 1883, the railroads established standard time within zones throughout the U.S. and Canada, which is why the Department of Transportation, which regulates the railroads, remains the nation’s timekeeper.
But the advent of highways and airlines encroached upon railway market share territories. Rather than evolve into a multi-modal transportation industry, the railroads refused to change with the times and many went bankrupt in the 1970s.
Oil Gains
When geologist M. King Hubbert predicted in 1956 that U.S. oil production would peak sometime between 1965 and 1970, his employer, Shell Oil, listened and made the corporate decision to evolve from an oil company to an energy company. Rather than continue to rely solely on traditional drilling and production, Shell has invested heavily in alternative energy sources, including wind, solar and biofuels research. Their projects include the creation of synthetic biofuel from waste paper or seawater algae (as an alternative to turning corn into ethanol), and construction of massive wind turbines to provide clean electricity in the U.S. and Europe.
In a similar manner, Chevron in February 2008 teamed up with Weyerhaeuser, one of the world’s largest forest products companies, to research the creation of biodiesel fuels made from wood chips. ExxonMobil funds climate and energy research at Stanford and collaborating universities around the world, including projects in hydrogen and solar power, biomass and advanced combustion of hydrocarbon fuels. (Although filling the gas tank remains painful, at least we know the money is going somewhere useful.)
Cars—Well . . .
U.S. automotive manufacturers find themselves at a crossroads today. With their current crop of gas-guzzling SUVs and pickup trucks becoming economically unfashionable and infeasible, it won’t be enough for Ford, Chrysler and General Motors to retool their factories; they’ll have to retool their thinking and decide which of the two examples above to follow.
If Hubbert’s peak oil theory is correct, the days of the gasoline-powered internal combustion engine are numbered and another way must be found to fuel transportation both public and private. Although all three U.S. automotive companies are introducing “greener” vehicles—hybrids, cars with greater efficiency or the ability to burn biofuels, the predominantly electric Chevy Volt—increases in technology, production runs and market penetration won’t be sufficient to lower America’s fuel usage for years to come. This will also require fundamental changes in the supporting infrastructure, from the inventory carried at the local auto parts store to the inclusion of electric plugs at parking lots or natural gas pumps at the corner filling station.
Legislative endeavors currently underway in Congress, prompted in part by ex-oilman T. Boone Pickens and in part by skyrocketing crude oil prices, intend to push that envelope by introducing natural gas powered vehicles which can be refueled at home, thus undercutting part of the infrastructure problem. The technology is proven, and these cars are already available overseas through Volkswagen, Opel, Mercedes, Honda and even GM and Ford. But it seems an act of Congress will be required before the concept is adopted for the private U.S. market.
Return of the Railroad
Meanwhile, deregulation and restructuring of the railroads in 1980 led to a resurgence in its viability as a bulk transportation system. According to the Association of American Railroads, an 85% improvement in fuel efficiency since that date has led to the ability to move a ton of freight an average of 436 miles on one gallon of diesel fuel, with resulting reductions in emissions, costs and road congestion. Over 40% of all U.S. intercity freight transportation is again riding the rails, four times the amount in Western Europe.
Detroit, are you listening?
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