Friday, February 20, 2009
I've got a collection of economic-related news stories that I would like to highlight. Many of them are stories that you may have already read, especially if you are a news junkie like myself. I don't have much to say about them, other than they demonstrate the gap in between reality and the ideologies and programs that our elected officials and media are trying to push. Some of them may show a glimmer of hope that our newly elected officials may actually be learning something about economics while in office.
1. Wall Street flips at the suggestion of bank nationalization. Stocks plummeted Friday morning at the suggestion that the government may take over failing banks. What is interesting was the White House response. They attempt to reassure, insisting that they never had any plans to nationalize. Is the administration becoming aware that their policies of change to the nation's economic structure may not be plausible?
2. Wholesale inflation takes a leap. It went up 0.8% last month. The story says economists had only expected a 0.2% jump. Those must have been the economists who approved of the last stimulus package as well. Perhaps flooding the economy with freshly-printed and borrowed money does not make the country any wealthier.
3. The Chicago Tea Party. CNBC's Rick Santelli is an internet sensation in his spirited criticisms of the White House mortgage relief bill. The relief bill rewards bad behavior, Santelli says. "How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?" he asks. The floor of traders behind him burst a unanimous boo. Santelli looks into the camera, asks if President Obama is listening and...
4. The White House responds. The very next day the White House already feels compelled to respond directly to criticisms in the cable morning news report. "Santelli doesn't know what he's talking about," the spokesman says. Maybe so, but the attention attracted by the tirade of a lower-profile newsman shows that the White House at least found his comments very compelling. It seems that White House response to media criticisms are usually limited to the big dogs- the Rush Limbaugh's, the New York Times- the big media outlets. The fact that they so immediately respond to Santelli is remarkable.
5. Bill Clinton gets some blame for the economic downturn because of his... "free-wheeling capitalism." It's funny that of all the Clinton's Administration acts that would be blamed, Time targets free-wheeling capitalism. That definitely was not the hallmark of the Clinton Administration. Much more pertinent and logical to point at would be the growth of Fannie Mae and the Community Reinvestment Act passed during Clinton's tenure. The attacks on capitalism continue from surprising sources as...
6. Alan Greenspan supports bank nationalization. We've come full circle now and perhaps see part of the reason why we have executive and legislative branches that are attacking capitalism and American freedom at will. Have American conservatives and patriots forgotten the principles this nation stands on? Economic freedom is not a get-rich-quick scheme. Capitalism is not just another economic system along with socialism, communism, etc. It is not to be swapped out for one of the others because of an economic recession. Capitalism is the state of the economy in a state of freedom. As evidenced in the news, it also happens to be the only system under which mankind will find ever prosperity.
Tuesday, February 10, 2009
There is a lot of discussion about the hidden health care policy in the bill and I'm not sure how accurate it all has been. I've gone to the bill itself to try to make sure that my description of the health care inclusions in the bill are accurate. I'll also point out that the following discussion is not the only reason to oppose the bill. In principle the whole thing stinks. These are just some of the especially low points. Under the guise of a anything-is-justified-because-the-sky-is-falling stimulus package we usher in the beginning of the Obama socialized medicine era.
The bill establishes a National Coordinator for Health Information Technology. His purpose is to oversee the development of a federal electronic health care system (pp 441). Included among his duties the director ‘‘(2) improves health care quality, reduces medical errors, reduces health disparities, and advances the delivery of patient-centered medical care; ... (4) provides appropriate information to help guide medical decisions at the time and place of care;... (9) promotes prevention of chronic diseases; (10) promotes a more effective marketplace, greater competition, greater systems analysis, increased consumer choice, and improved outcomes in health care services; and (11) improves efforts to reduce health disparities." (pp 442).
Isn't that fantastic? We now will have a government officer, probably to be reverently referred to as Mr. (or Ms.) Coordinator, that will make health care better. He will lovingly "guide medical decisions at the time and place of care." He will promote prevention of chronic disease. He will promote a more effective market place- isn't that great, the federal government will step in to help the market be more of a market! He will help improve health disparity. If we're lucky, he may even turn back death.
‘The National Coordinator shall, in consultation with other appropriate Federal agencies... update the Federal Health IT Strategic Plan... to include specific objectives, milestones, and metrics with respect to... the utilization of an electronic health record for each person in the United States by 2014." (pp 445)
The National Coordinator will appoint the HIT committee (Health Information Technologies Committee) composed of "providers, ancillary healthcare workers, consumers, purchasers, health plans, technology vendors, researchers, relevant Federal agencies, and individuals with technical expertise on health care quality, privacy and security, and on the electronic exchange and use of health information." (pp. 457)
This committee will advise the Coordinator on how to best achieve his stated mission of stepping in to help the market be a safer and more federally-approved market, help doctors make good decisions, etc. Perhaps this group will make the Coordinator's decisions bipartisan if he can't get bipartisan support from democratically elected officials.
The biggest question I have is whether health care practitioners will be forced to use the electronic medical system. Will they will be forced to follow The Coordinator and the People's Committee's recommendations on appropriate medical decisions, having a "more fair" market, spreading the wealth, etc?
I couldn't find a clear answer to that question. The bill talks about paying practitioners to use the electronic system, but those provisions were found under the headings of Indian Health Services and Medicare. However, the following slightly menacing statement is found at least twice in the bill: "The Secretary shall seek to improve the use of electronic health records and health care quality over time by requiring more stringent measures of meaningful use..." (pp 518, pp 541)
I sincerely believe that a national medical database is not a bad idea. It is an idea that deserves discussion. But it's not getting that discussion. It's being ramrodded down senators' throats by President Obama. He tells them we're in a national crisis. Don't think about it- just vote yes.
But this database, and especially the powers attached to the Coordinator, are a big deal. They take up over 100 pages of the 680 page stimulus package. This is Phase One of Obama's Change for socialized medicine. Why is it buried in the stimulus bill? Is the Democratic Force for Change afraid America wouldn't support it in open discussion?
An astute reader just sent us this Bloomberg article stating that provisions have been slipped into the stimulus package that would create a federal electronic medical record database. The article states that it also provides for National Coordinator of Health Information Technology that could monitor this database. This coordinator can make sure doctors are using treatments that are federally approved and cost effective, the article says. It also claims that the National Coordinator can penalize doctors who do not utilize the database.
We'll research this and post more later in the day. Get ready to call your senators.
Friday, February 6, 2009
All along we've argued the the "problem" with American health care is its high price. We've seen Wal-Mart have significant impact on the retail market, offering goods at prices significantly lower than their competitors and bringing these goods into the budgets of their customers. How would the Wal-Mart model work for health care?
We're going to have the opportunity to find out. Wal-Mart, like other retailers, has been introducing in-store clinics. I'm unsure about how many are now in operation, but 400 were announced in 2007. Some sources say there will be over 2000 in the next four years.
These clinics treat common medical problems for $40-65 a visit depending on clinic location and the health malady. In addition to the cheap office visit, Wal-Mart pharmacies have begun a $4 prescription plan. An impressive survey of medications are available for $4 for a 30-day supply or $10 for a 90-day supply.
Wal-Mart and its clinics certainly have critics, but it seems to us at FMP that these in-store clinics truly address the greatest need of American health care- the need for affordable care. The Wal-Mart mission of "saving people money so they can live better" certainly applies to health care.
Here are some extractions from speeches by former Wal-Mart President Lee Scott at the World Health Care Congress in 2007 and at the National Retail Federation last month on Wal-Mart's clinics and on the role of the market in health care.
"The private sector can make a difference," he said. "I believe American businesses can lead and we should."
"We think the clinics will be a great opportunity for our business. But most importantly, they are going to provide something our customers and communities desperately need -- affordable access at the local level to quality health care," Scott said. "We believe we can deliver effective and efficient health care at the local level."
"Within days of announcing our $4 program, countless other discounters, drug stores and supermarkets dropped their prices on generic prescriptions," Scott said. "That has surely saved our health-care system millions of more dollars. So let there be no doubt that the private sector can lead."
"As businesses, we have a responsibility to society. We also have an extraordinary opportunity. Let me be clear about this point … there is no conflict between delivering value to shareholders and helping solve bigger societal problems. In fact … they can build on each other when developed, aligned and executed right.
At Wal-Mart, we do not really see it as philanthropy or CSR or the Triple Bottom Line. All of those approaches have merit and can have an impact. But what we are talking about is different.
We believe you can bring together the bottom line on a balance sheet … with social and environmental bottom lines. Societal responsibilities and how we fulfill them can align and strengthen the business. When you do that, things really start to take hold, build momentum and make a much bigger difference. We have seen this at Wal-Mart when we have put together the “Save Money” and “Live Better” parts of our mission … and applied them to big challenges like the cost of prescription drugs. And I believe this can apply to all of us.
The principles are very simple. Does how you want to contribute to larger societal issues work with your business model – so it will last during the both good and bad economic times? Does it fit with your mission and culture – so that all parts of your company are engaged, energized and contributing? Does it offer the opportunity to leverage your unique strengths – so you can scale your efforts and make a unique, powerful and meaningful difference? And we can make a special contribution as retailers."