Wednesday, April 29, 2015

Obamacare has not shifted the politics of doctors much

Political orientation tends to be pretty fixed anyway.  Below is an excerpt from some survey research findings published by the AMA.  The findings are based on campaign contributions so there would seem to be a fair bit of room for slippage between what actually happened and what is reported.  The source article is: "The Political Alignment of US Physicians: An Update Including Campaign Contributions to the Congressional Midterm Elections in 2014". Note that the sample differs from election to election -- as some doctors retire and new doctors enter the workforce.  Given the ever-tightening Leftist stranglehold on American education, it is to be expected that new doctors will steadily become more Leftist.


Ominous loss of traditional wisdom

Economic historian Martin Hutchinson below is being discreet in using the term "Copybook Headings" but "traditional wisdom" would be a plainer term for what he discusses

“The Gods of the Copybook Headings, I notice, outlast them all” wrote Rudyard Kipling in 1919. He also made the point that there are frequent periods when those gods appear to be asleep. There are a number of copybook headings that sensible policymakers consistently followed before 2008, which have systematically been ignored since. They are about to wake and “with terror and slaughter return.”

Before 2008, various bad monetary, fiscal and regulatory policies were tried by various governments, but only occasionally was there a consensus on stuff that really didn’t work. In the 1930s, Britain under Neville Chamberlain was a notable dissenter from the proto-Keynesianism of the New Deal and its militarist version attempted by Hitler’s Germany and Mussolini’s Italy. Thus Britain during the decade achieved notably better results than its competitors, a truth that was swamped by World War II, by the failure of Chamberlain’s foreign policy, and by clever propaganda from the British left conflating 1930s foreign policy with its economic policy and branding both as failures.

In the 1950s and 1960s, there was consensus among the major economies that tax rates above 90% were sensible at very high incomes. The entirely predictable and justifiable consequence of this was the rise in Swiss and other banking secrecy laws and tax haven bank accounts. In the 1960s and 1970s there was a consensus that inflation didn’t matter too much and that actuarially unsound welfare schemes could easily be paid for. This led to the stagflation of the 1970s and a 20-year reaction under Ronald Reagan, Margaret Thatcher and to a large extent Bill Clinton. In the early 2000s, there was a largely global consensus that low interest rates and the consequent housing bubble could be used to reflate after a stock market crash – and we all know how that ended.

Nevertheless, while the occasional copybook maxim has been flouted in the past, even on a more or less worldwide basis, the wholesale flouting of “the Gods of the Copybook Headings” since 2008 has been on a wholly different and epic scale.

For a start, the world was supposed to have learned again in 2008 the copybook maxim that overleverage is bad for you. Yet at least in the United States, that lesson appears to have been sadly missed. Total credit outstanding in U.S domestic non-financial sectors increased by 30% from 2007 to 2014, on Federal Reserve data, whereas nominal GDP increased by only 20%. In other words, the total of U.S. credit outstanding has increased half again as fast as output since the top peak of what had previously been thought the greatest credit bubble in history.

Of course, the distribution is different in 2014 from in 2007. Business credit outstanding increased only 19% from 2007 to 2014, slightly slower than GDP, as sluggish growth resulted in a dearth of capital investment and mild deleveraging, in spite of ultra-low interest rates and a spate of private equity deals. Frankly, that in itself is an indictment of Fed policy – if ultra-low rates do not produce higher capital investment by business, then what the hell is their purpose?

Households even deleveraged slightly between 2007 and 2014, with their overall debt decreasing by 2%. However while home mortgage debt decreased by 12% (mostly due to defaults and restructurings), other consumer debt increased by 27%, faster than GDP. Thus once the worst of recession had passed there was a reversal in overall consumer retrenchment. State and local government debt increased by 3%, much less than GDP, while Federal government debt increased by a huge 154% between 2007 and 2014.

Thus Fed policies had no effect on the debt markets other than encouraging consumers into further witless credit card, auto and student debt, while the gigantic Federal deficit left the U.S. economy as a whole with a higher total indebtedness to GDP ratio (238% versus 220%) than even at the height of the 2007 credit boom. The change in mix from home mortgage and corporate debt to more consumer credit and government debt is also hardly a sign of economic good health, as unproductive uses of credit have been favored over productive ones. With consumer non-mortgage leverage and total leverage in the economy sharply up, the Gods of the Copybook Headings will have their revenge at some point.

A second copybook maxim that has been neglected is that economic growth is not possible in the long term without productivity growth. Commentators often use Japan’s experience since 1990 as a dreadful example of what fate might await the West without monetary stimulus. However the Japanese post-1990 recession at least until 2009 was accompanied by decent productivity growth, within a couple of tenths of a percent of that in the United States and higher than in most of Europe.

On the other hand, in the U.S. and Britain in particular, productivity growth in the last few years has been far below at least post-World War II historical experience. The outright decline in U.S. productivity in the fourth quarter of 2014 was startling, and seems likely to lead to further spectacularly poor performances, as employment figures continue to behave much better than growth figures. Funny money and huge government deficits are distorting the global economy, pushing it further and further from an optimal allocation of resources. Productivity inevitably suffers.

A third copybook maxim that has been flouted in recent years, perhaps the most important, is that savings must be nurtured and savers protected. Middle-class savings are the basis of business formation, because they form the capital nexus of almost all start-up businesses (even “angels” have to get their money from somewhere.) Third-world countries expropriate savings, by looting, excessive taxation or uncontrolled inflation, and so stay poor. Weimar Germany wiped out savings through inflation, and so caused the political upheaval that produced the Third Reich. For seven years now, in almost all the Western world, savings have received risk-free rates of return below zero in real terms. This is decapitalizing the Western economies and must inevitably impoverish them in the long run, probably through a collapse in asset and share values once the bubble bursts.

In terms of policy, the copybook holds that fiscal and monetary policies should be balanced against one another. Certainly the current posture, with public sector deficits larger than ever before in peacetime human history over so long a period accompanied by real interest rates below zero for seven long years accompanied by money printing on an unprecedented scale, is so far outside the copybook recommendations that if Kipling’s poem has any validity at all, a record-breaking crash must follow.

Finally, the copybook would hold that regulations should be light and even-handed, with no political favoritism. The current posture in financial services, energy and healthcare is of regulations of unprecedented severity accompanied by exemptions that can be purchased for cash or favors. This was previously unknown in any advanced economy. Clement Attlee’s Britain had rationing and overregulation, for example, but was remarkably honest in their administration.

Certainly a society is unsustainable in which the largest U.S. reinsurance company, Warren Buffett’s Berkshire Hathaway, is exempt from the strictures of the “Systematically Important Financial Institution” morass while Buffett himself is a major friend and donor of the President’s party. The damage done by these regulations is exemplified by New York Governor Cuomo’s whimsical decision to ban fracking, condemning Binghamton to an unemployment hell worsened by the casinos which Cuomo apparently prefers as a development strategy.

Latin America and Africa, in which such arrangements are common, have never managed to become rich, unlike societies such as Singapore in which they are avoided. In U.S. history, the unhappy history of the railroads after the creation of the Interstate Commerce Commission in 1887 is clear evidence that heavy regulation can destroy industries on which it is imposed. Forcing heavy and distorted regulation onto almost half the economy, along with allowing ambitious prosecutors to launch bizarre lawsuits demanding prison sentences and billion-dollar fines for offenses either incomprehensible, trivial or normally both, is a surefire recipe for long-term economic failure.

The Gods of the Copybook Headings have never before been flouted to the extent and in so many ways as in the past seven years. Their revenge will be highly painful, the more so the longer that revenge is delayed.



Obama To Working Americans: You’re Fired!

Michael Goodwin

The late Israeli statesman Abba Eban once said Palestinian leaders “never miss an opportunity to miss an opportunity.” He could have been talking about Barack Obama.

Given another chance to do what he claims he wants to do — “get stuff done” to help the “folks” — the president instead is giving most Americans the back of his hand. His post-election agenda is the same agenda he had before the public told him No, Hell No.

His plans are worse than wrong. They are destructive to the people he says he wants to help.

His top three items are immigration, climate change and the minimum wage. Each will penalize people who work for a living.

On immigration, his plan to legalize up to 5 million aliens with the stroke of a pen is certain to invite more illegals to come to America and put a drag on working-class wages.

The Swiss-cheese border will see another surge if he rewards those who came here illegally. Worse, giving millions of immigrants the legal right to work puts them in direct competition with Americans working at factories, farms and low- and semi-skilled jobs everywhere.

With most incomes stagnant or falling for more than a decade, suddenly adding millions of legal new workers to the labor pool will put more pressure on more pay checks. Americans already having trouble making ends meet will be worse off thanks to the president.

Their kids will take a hit, too, and already there are reports of classroom squeezes to make room for thousands of young refugees, including on Long Island. State officials say some schools might cancel sports teams to pay for the high cost of these new students, few of whom speak English.



Will organic milk shrink your baby's brain?

There is no doubt that iodine deficiency has a disastrous effect on infant IQ so health freaks who avoid salt are already skating on thn ice -- since iodized table salt is the main source of iodine in a Western diet.  But health freaks are usually also devotees of everything "organic", so the warning below addresses a serious concern for them.  Their children are doubly at risk

Pregnant women and breastfeeding mothers who drink organic milk may be putting their child’s health at risk, scientists claim.  They say it contains a third less iodine than normal milk – which could affect infant brain growth and intelligence later in life.

UHT longlife milk was also found to have similarly low levels of the mineral, academics from Reading University found.

Because milk is the main source of iodine in the British diet – providing 40 per cent of the average daily intake – switching to organic may have a significant impact on health, they warn.

Organic milk is often drunk for its supposed health benefits, with claims that it contains omega-3 fatty acids that are good for the heart. And in response to environmental and animal welfare concerns, the sector is growing.

But researchers said that because organic farmers do not give their cows as many artificial supplements the milk lacks iodine, which is important for the healthy development of babies in the womb and in their first months of life.

The mineral is thought to have a major impact on the formation of the brain, with repercussions for IQ and school success later in life.



Why George W. Bush Let a Soldier's Mom Yell at Him

This article by Dana Perino, a GW Bush aide, has been much reproduced, so most readers here will probably have seen it already.  So I reproduce just one episode from it to encourage anybody who has not seen it to follow the link to the full story.  America did once have a genuine and decent man as its president.  He made frequent but low-key visits to wounded soldiers and the families of men who had been killed in the war

The soldier was intubated. The president talked quietly with the family at the foot of the patient's bed. I looked up at the ceiling so that I could hold back tears.

After he visited with them for a bit, the president turned to the military aide and said, "Okay, let's do the presentation." The wounded soldier was being awarded the Purple Heart, given to troops that suffer wounds in combat.

Everyone stood silently while the military aide in a low and steady voice presented the award. At the end of it, the Marine's little boy tugged on the president's jacket and asked, "What's a Purple Heart?"

The president got down on one knee and pulled the little boy closer to him. He said, "It's an award for your dad, because he is very brave and courageous, and because he loves his country so much. And I hope you know how much he loves you and your mom, too."

As he hugged the boy, there was a commotion from the medical staff as they moved toward the bed.  The Marine had just opened his eyes. I could see him from where I stood.  The CNO held the medical team back and said, "Hold on, guys. I think he wants the president."

The president jumped up and rushed over to the side of the bed. He cupped the Marine's face in his hands. They locked eyes, and after a couple of moments the president, without breaking eye contact, said to the military aide, "Read it again."

So we stood silently as the military aide presented the Marine with the award for a second time. The president had tears dripping from his eyes onto the Marine's face. As the presentation ended, the president rested his forehead on the Marine's for a moment.

Now everyone was crying, and for so many reasons: the sacrifice; the pain and suffering; the love of country; the belief in the mission; and the witnessing of a relationship between a soldier and his Commander in Chief that the rest of us could never fully grasp.



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