By Jennifer Bunn, on July 13th, 2008
It seems that, by 2009, doctors may be able to bill Medicare for electronic consults, a practice that has been discussed in the past but has not been reimbursed by insurers (except in a few remote instances) to date.
Under this new provision, consumers of healthcare will be able to log on to the Internet and consult their doctors from the comfort of their own home, thus saving themselves from lengthy visits to hospitals or busy waiting rooms.
An advantage of this technology, if it should come to pass, is that patients may be able to access a specialist in a more timely and convenient fashion. Also, patients who find it very difficult to travel or mobilize may find this method of care a literal lifesaver.
Physicians may find it easier to monitor their patient’s conditions and prevent complications from occurring if they are able to maintain better contact with them in this manner. And patients in remote areas may have better access to healthcare than they have enjoyed in the past. In fact, remote telehealth has been in use in some areas already.
So what are the potential pitfalls of this practice? The first and biggest area of concern that comes to mind is the measures that will need to be put into place to ensure confidentiality. This will be an important issue, and patients using such a system may have legitimate concerns regarding the security of their personal healthcare information. Secondly, for hospitals that are already having difficulty implementing electronic healthcare records that are very expensive, implementing a system such as this may be too cost-prohibitive. The technology required to capture and store all the data that will be generated by these “visits” will be staggering, not to mention very expensive.
It remains to be seen whether the idea of e-visits will be the wave of the future or simply a great idea that never really took off. Likely what will decide the issue will be the patients who use the system.
By G.L.C., on July 13th, 2008
The price of oil continues to hit record high. Many believe the main reason for this is speculation.
The price of oil has nearly tripled since 2004. The trading in oil on the New York Mercantile Exchange also tripled since 2004. A mere coincidence? OPEC no longer controls the price of oil. Majority of the trade in oil is done in London or New York. The price of oil is now determined by Wall Street.
According to the Commodity Futures Trading Commission (CFTC) a speculator does not produce or use the commodity but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.
Speculators on the other hand blame the increased demand from China as the reason for the rise in oil prices. According to the Department of Energy, annual Chinese demand for oil has increased over the last five years from 1.88 billion barrels to 2.8 billion barrels. Over the same five-year period, Index Speculators demand for petroleum futures has increased by 848 million barrels. The increase in demand from Index Speculators is almost equal to the increase in demand from China. With the impact of the subprime crisis on the real estate market and the downward slide of the U.S. stock markets, more money is being pumped into the futures market by investors. According to The Economist, about $260 billion has been invested into the commodity market – up nearly 20 times from what it was in 2003. It is estimated that in the commodities market, half of the bets are placed on oil. This increased investment along with a week dollar has resulted in the price of oil rising to record high. A majority of these investments are bets placed by hedge and pension funds looking out for risky but high-yielding investments. Unlike stocks where the margin requirements may be as high as 50%, for commodities, it is a 5–7%. So with $130 billion, the speculators can take positions of about $2.5 trillion.
The CFTC is no longer able to properly regulate commodity trading to prevent speculation, manipulation, or fraud because much of the trading takes place on commodity exchanges in the U.S. and abroad that are not within the CFTC’s purview.
Traders on NYMEX (New York Mercantile Exchange) are required to keep records of all trades and report large trades to the CFTC, enabling it to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. But traders on unregulated over-the-counter electronic exchanges are not required to keep records or file any information with the CFTC as these trades are exempt from its oversight.
Merely introducing laws that would regulate the trading of future commodities in the U.S. will not help control speculation. It is possible for a person in the U.S. to trade in a key U.S. energy commodity such as oil and avoid all U.S. market regulators by routing his or her trade through an exchange located in London or any other place. The law should regulate all trading of key U.S. energy commodity – traded through an exchange in the U.S. or abroad.
By Cheryl Grey, on July 13th, 2008
Has the U.S. economy touched bottom in this economic downturn yet? Or is there further to fall? Let’s look at the numbers and see if there’s a possible ray of hope beneath the data’s bleakness.
The latest figures for industrial production in the U.S., those for the month of April (May’s figures are being compiled by the Federal Reserve as of June 15), showed a 0.7% decline following a 0.2% rise in March. Most of these losses were in the automotive industry where manufacturers are dropping gas-guzzling SUVs from production lines that have been hit with strikes and strike-related parts shortages since February. There was also a large drop in construction supplies, also no surprise with residential real estate in a funk. However, mining, materials and business equipment all posted reasonable to sizeable gains when compared to production levels in April 2007, the first ray of hope.
Unemployment as calculated by the U.S. Department of Labor climbed to 5.5% in May from 5.0% in April, mostly due to job losses in construction, manufacturing, professional and business services and retail stores. The only bright spot here seems to be the healthcare industry, which added 34,000 jobs in May 2008 and 383,000 jobs since May 2007. These are not encouraging figures, although there is a possibility they’re slightly skewed (by 0.2%) by job-seeking recent college grads and high schoolers out for the summer.
Retail sales for May surged 1% over those in April quite possibly as a result of tax rebate checks suddenly appearing in everybody’s mailboxes. This is much higher than anticipated and will contribute substantially to future economic growth figures.
Soaring Prices Translate to…Meager Growth?
Inflation pressures are climbing in the U.S. and the rest of the world due to skyrocketing commodities prices. The most recent report from the Labor Department indicates that consumer prices rose 0.6% in May and are 4.2% higher than they were in May of last year, meaning that currently prices are rising faster than real income which measured only a 0.2% rise in April 2008. Leading the pack, of course, are surging energy costs, up 4.4% in the month of May and up 16.5% in the first five months of 2008.
The mother of all economic indicators, the one that matters the most, is the gross domestic product or GDP which measures how much larger or smaller the entire U.S. economy is as compared to the previous month, quarter or year. Early estimates of U.S. GDP growth for the first quarter of 2008 measured 0.6%, but as additional data came in, that figure was revised upward to 0.9%. As quarterly growth goes, that’s a pretty measly figure, but the fact remains that it’s a positive number, not a negative one which would indicate a recessionary contraction.
The Only Thing That’s Falling
Everyone’s biggest economic concern in the U.S. in 2008 must be the housing market which is seeing double-digit declines in home values in some regions of the country. However, the operative phrase there is “some regions” because, according to the Office of Federal Housing Enterprise Oversight, the double-digit losses are only in California and Nevada while housing devaluation over the previous twelve months is limited to 14 states and the District of Columbia which were substantially overpriced in a “bubble” that did not reflect the true value of houses in the area. (Read the news release here.)
Housing prices in some of these regions, including parts of the northeastern states and the industrial northern midwest, are also being affected by shifting demographics as more people are moving out of these areas than are moving into them, leaving an inventory of unsold and devaluing houses behind. (See “Do U.S. Economic Indicators Still Reflect Reality?” for specifics.)
So what’s next for the U.S. economy?
A recent conservative forecast by Wachovia Bank, which has a fairly good track record at this, shows the economic stimulus from the tax rebates boosting retail spending through the end of September 2008 before finally petering out. Although sections of the housing market are predicted to continue declining throughout the remainder of 2008 if not longer and unemployment may rise briefly above 6.0%, both the price of crude oil and consumer inflation are forecast to also diminish through roughly the same time frame. All in all, in only one quarter, the fourth quarter of 2008, is the economy predicted to actually contract, making this a shallow downturn indeed and 2009 a new and hopeful year for economic recovery.
By J.D. Seagraves, on July 13th, 2008
Imagine it’s 1971, and you’ve volunteered for a science experiment: you’re going to be frozen alive for five years in a test case for future space travel to planets light years away. The experiment is dangerous, and as a result, you’re paid $25,000 for “volunteering.” You sign a waiver indemnifying the government in the case of any mishaps, and you go to the bank to deposit your $25,000 check.
On the way there, you run into your friend, Jim, who is also taking part in the experiment. You tell him you’re going to buy a Certificate of Deposit and earn 5.75% interest. “It will be great,” you say. “I’ll go to sleep, and when I wake up, I’ll have like thirty-three grand waiting for me!”
But Jim isn’t impressed. He’s going to buy gold with his $25,000 and keep it on him in the cryogenic chamber. He’s a conspiracy nut, and he doesn’t trust the banks. “What a fool,” you say to yourself as Jim walks away. “Gold doesn’t earn any interest. He might as well just bury his money in a coffee can.”
The next day, you lay down next to Jim and prepare to be frozen. You think happy thoughts of the $33,062.97 you’ll receive when you wake up. Jim is happy too, clutching a heavy bag of 714 one-ounce gold coins he bought for $35 each. What a sucker, you think. “See you in five years,” you say to him, and then everything goes black.
The next thing you know, you’re awakened in a strange place. You feel fine, but something just isn’t quite right.
“There was a problem with the experiment,” a man with an odd hairstyle and funny glasses says to you.
Jim wakes up and clutches his bag of coins. “What happened?”
“We were unable to revive you in 1976. Our calculations were wrong and it was too dangerous. Then, over the years, the project lost political favor. It was only recently that we were able to re-open the project—”
“Cut to the chase,” you demand. “What year is it?”
“It’s 2008,” the odd man says. “You’ve been asleep for thirty-six years.”
After adjusting to the fact that your friends and family have aged—and died—in your absence, your thoughts immediately go to your CD. “Thirty-three grand is enough to buy a house!” you say to yourself. Or at least it was in 1971.
Your small local bank is still exactly where it was—though its name has changed a few dozen times in the last 36 years. “Here you are sir,” the friendly teller says to you, and she hands you a check for $82,437.51.
“Wow!” you say. “I thought I was only going to get $33,000!”
The teller explains to you that when you did not cash in the CD, the bank established a savings account for you which had averaged 2.5% annual interest ever since.
“Being frozen for thirty-six years is the best thing that’s ever happened to me,” you say. You’re rich! Or so you think.
You soon find out that your $82,000 in 2008 dollars does not buy nearly as much as it would have back in 1971. In fact, it doesn’t buy as much as $33,000 would have back then! The Bureau of Labor Statistics says that it would take $175,000 in 2008 to equal $33,000 worth of purchasing power in 1971. This means your $82,000 is worth less than half of what $33,000 would have been worth back when you were frozen. Even as your wealth has nearly tripled in nominal dollars, it has been reduced to less than half in purchasing power. Bummer!
Making things worse, you soon run into Jim. He’s cashed in his 714 ounces of gold—purchased for $25,000 back in 1971—for $630,000. The price of gold has gone from $35 an ounce, where it was fixed in 1971, to $890 an ounce.
“They took the dollar off the gold standard,” Jim explains. “It’s no longer backed by gold, so there’s nothing to stop them from printing more and more paper dollars.”
“But I received interest!” you scream.
“Your interest didn’t even come close to keeping up with inflation,” Jim says with a sly wink. “You see, when we got our checks for $25,000, the dollar was still convertible into gold at $35 an ounce. I converted mine. You didn’t. Now the government’s reneged on its promise.”
“I always thought you were crazy,” you confess.
“I know you did,” Jim says with a huge smile on his face. A saying he overheard kids using on his way to the gold exchange comes to mind. “Sucks to be you!”
By Mike Chase, on July 13th, 2008
A few days ago, I had to meet my wife at the airport. I was early (unheard of), and the flight was late (what else is new). I bought an International Herald Tribune and had coffee and a pastry while I read the paper. A feeling of bittersweet nostalgia overcame me. The morning papers and coffee used to be one of the good times every day. This was the first time I sat and read a newspaper in well over a year. Thus, the inspiration for this first blog for Amateur Economists.
Life has changed dramatically with the advent of the digital age, or digital lifestyle. I always read two newspapers a day, the New York Times and the Wall Street Journal. It was a ritual. It is gone, but I am still informed, probably better than ever before. The computer and the Net now provide the “information fix.” At the same time, it is also possible to work, speak with and see friends and colleagues, or learn virtually anything we want, from mathematics to playing the piano, on the Net.
It was probably Steve Jobs that coined the phrase “digital lifestyle” to describe what Apple was trying to do. Everything had to interface with everything else: our computer, our cell phone, our portable music device, our television, and our shopping for entertainment at iTunes. WiFi, broadband, even how we get from place to place has been integrated into the digital age. Our cars and now our cell phones have GPS plus a camera and an Internet connection. How soon will our cell phone tell us in the supermarket that the canned peas are two isles to the right?
I work from home via the Internet. I get my news, information, even do research using the Internet. Can the Internet even be the solution (at least part of it) to the energy problem? I use a car very little because I do not commute. I am beginning to shop locally rather than go to a shopping mall. I actually walk to buy groceries and go to the pharmacy. This is not because I am trying to save gas; it is easier, more efficient, healthier and less stressful. I have never been in my employers’ offices, which are thousands of miles from me. Amateur Economists is literally headquartered on the other side of the world. Many of my friends are also virtual.
This blog spot is about how our lives have changed and what you see coming as a result of the digital lifestyle of the 21st century. What will happen to the huge office buildings of central cities? How will working from home change our lifestyles and affect our children? How will this affect our local communities? What will happen to the mega shopping malls in the future? Is the digital lifestyle actually part of the solution to the energy crisis? This is a place to share your thoughts and insights. The 20th century saw the beginning of the industrial age and the development of the auto, which profoundly changed our lives. The driver of the 21st century is digital. Will the change be as profound? Will it be better or worse than the changes of the last century? What do you think?
By Greg Beatty, on July 13th, 2008
If you imagine the economy as an animal, the characters in Jim Thompson’s The Grifters are either the parasites that leech on that beast or its masters. You may have to read the book to decide.
Yes, you can catch a glimpse of Thompson’s world by watching the movie version starring John Cusack, Angelica Huston, and Annette Bening, each in some of their more disturbing roles. However, the movie’s feel is off. It came out in 1990 while the novel was published in 1963, and Thompson’s sensibilities were really formed decades earlier. It’s worth watching, but director Stephen Frears doesn’t really capture the…texture of the novel: half gloss, half grit, all tawdry and addictive.
Grifters are con men, or con men and women in this case. The novel follows three of them: Roy Dillon, a young man raised in the trade by Lilly Dillon, his grifter mother who gave birth to him when she was but a teenager. Roy’s involved with another grifter, Moira Langtry, one who’s so good at the con, he doesn’t really even know she’s in the game until she outs herself in an attempt to join forces with him.
The novel’s plot is minimal. It’s more of a careening string of events: Roy gets injured during a con (a shop owner smashes him in the belly with a bat) and ends up in the hospital. His mother, who’s in Los Angeles on business (a moderately complex race track scam), takes care of him while he’s sick. She wants to drive Moira away and goes as far as to hire an innocent nurse to care for him. When Roy goes back to his cover job—one that gives him lots of time for the con—there’s been a shake-up, and the new boss wants to make him a supervisor. Roy goes away with Moira for a romantic getaway; she tries to get him to work cons with her. When they go home, the police contact him, telling him his mother’s been found dead. When he identifies the body, he finds it is Moira. His mother shows up at his hotel room, tries to scam some money from him, and ends up slicing his throat.
That race through the gutter doesn’t really give a sense of Thompson’s wonderful seediness. For example, the women look a lot alike and are close to the same age, giving the book one of many perverse twists. However, fun though the portrait of degradation is, that’s not the real attraction for me here. Instead, it’s the portrayal of the capitalist economic world. The grifters look on anyone who works an honest job with a horror that makes them almost physically ill. It is literally less repellent for Lilly to think of sleeping with her son than it is to consider taking a straight job.
It’s also one of the novels that gives the most naked looks at how people become commodities in a capitalist economy, and how economic forces distort things. The best example of this is when the manager of Moira’s apartment building comes by to collect the rent. She offers him the rent or sex. That in itself isn’t that strange. What’s amazing is how she loathes him but sleeps with him anyway, while phrases from ads and menus tumble through her head. She knows she’s packaging herself for sale, and yet somehow, she thinks it is better than working.
The grifters loath the straights but depend on them. The straights would jail the grifters, but they all desire them. It’s the American economy as one big red-light district… and who is in charge, really?
|
|
Most Popular Posts