Whenever you are in a discussion or an informal debate with someone (or an argument for that matter) one the easiest retorts to your opponent citing an expert is to impugn the motives and history of the expert in question.  You have heard this before: Newt Gingrich makes some statement about the importance of traditional marriage and the easy come back is his many divorces.  Rush Limbaugh, drugs… you know.  Thomas Friedman’s multiple columns about the environment and his several thousand square foot house (throw in Al Gore for good measure).  While hypocrisy is worthy of derision, by relying on it solely as your response to a statement you do not agree with you actually are being  intellectually dishonest and lazy (two of my major pet peeves).  What bearing does Mr. Gingrich’s marital history have on the veracity of his statement about marriage.  The truth of the matter is that one can be a hypocrite and have a valid point.  It has been my experience that when one resorts to pointing out the shortcomings of the messenger it usually means a lack of knowledge of an issue and therefore nothing intelligent to say about the topic at hand.  They just “know” that they do not agree with the statement but have only the messenger to attack.

I am as guilty of this as anyone else.  I understand the allure of it.  It is low hanging fruit.  Ripe… fat… juicy.  But Americans have become an appallingly trivial people.  We want American Idol, not Firing Line.  We want reality TV not actual reality.  We want greed not sacrifice.  In short, we have become small and callow.  Developing ideas, gathering facts and synthesizing that into understanding and insight is hard, better to just attack the messenger.  Attacking the messenger is easy, quick, cheap and requires nothing from you and consequently adds nothing of substance.  So the next time you find yourself in a situation where someone presents something you do not agree with, take the issue head on.  Do not shuck it, dodge it or evade.  If you have not thought about, then say so.  If you have then present your case.  If at the end of your case, the allure of that fruit is just to much not to pick then feel free.  Just be sure that your argument stands without it, because if it cannot then that is the easiest way to know that you do not have an argument at all.

A counter intuitive title given that a recent CNN poll showed that 60% of Americans favor some form of universal, single-payer health care.  Also, given that the current system is not sustainable one would think that it would be folly to argue that major health care reform is not a cake-walk.  Further, one would assume that since I am center-left in my political and economic philosophy that I would be cheering the large percentage of Americans who finally get it.  While that may be true and I do support it, I am smart enough to know that it will not happen anytime in the next twenty years.  Here is why.

Show Me The Money!

Data from the Centers for Medicare & Medicaid Studies shows that in 2000 total expenditures (public and private) on health care was $1.3 trillion and I quite confident in saying that at absolute minimum in 2008 it was at least $1.3 trillion.  That represents about 10% of GDP.  Despite a market that big there are only a few places where cost savings can be had.  These are: fees charged by physicians, fees charged by hospitals (nursing services, food services, techs, labs, etc), fees charged for procedures (outside of physicians’ fees) and drugs.  The other areas of health care have heavy competition so prices are usually close to marginal cost. Devices are largely a streamlined affair.  There are many wheel chair types out there but they compete on features not on price.  Things such as grafting supplies (artificial skin and tissue), surgical devices and clinic devices (think fancy exam tables,  machines–MRI, PET and others–and the other various noise making things in a hospital that have a touch screen on them) also compete on features and not price so there is minimal savings to be had there.  It should be noted here that while the prices of these things are close to the marginal costs they are by no means cheap.  An exam table can easily be thousands of dollars, an “inexpensive” MRI is hundreds of thousands of dollars.  The cost of these items rise because of either legitimate advances in technology or bloat (think the difference between MS Word 5 and Word 2007).  And if a company comes out with an especially popular feature for which they own a patent you can be sure you will be paying a premium for it.  I am intentionally excluding the potential for a French style system where there is one or two locations in the country that have an MRI machine and you have to go a major city if you need an MRI.  There is absolutely no way that would fly in America.  So when one talks about reducing health care costs it really boils down to reducing physician salaries and/or reducing hospital profit (and probably nurse salaries along with it).  In short, everybody in the system will be taking a nice hair cut in the health care world and I can assure they will not be happy about it.  Despite what you might hear from the American Medical Association (AMA), my experience teaching a large collection of premed students is that  most go into medicine because the pay is great and you have virtually guaranteed lifetime employment.  And I can assure you, having taught nurses as well, nurses demand good compensation for dealing with the blowhards that permeate the “upper echelon” of the medical food chain.

Reducing hospital profits may be an easier (just ever so slightly) nut to crack for one simple reason…  a lot of major hospitals are not profitable (I do not mean “non-profit”, I mean they break even, at best) and even the the non-profit hospitals are having a hard time covering their costs.  Grady Memorial in Atlanta faced eminent shutdown due to a combination of extraordinary poor management and the simple fact that Atlanta (like every big city) has more poor and middle-class people, for whom health care is an expense they are increasing not able to meet, than rich people who easily pay their bill.  Removing the profit motive from the hospital industry will only draw howls of protest from administrators at the top whose seven figure salaries will be the first to go.  But that is an easy win for those pushing single-payer health care, what is the counter argument: “We need all those MBAs to run the hospitals. They are the only ones with sufficient management ability!”  For the response, see: well, any major company that was in the finance business in 2007.

Drugs are a different story altogether.  Pharmaceutical companies have taken tiered pricing to a whole new level.  No pharmaceutical company sells its drugs at a loss but some countries represent greater profit margins than others and the margins are never higher than here in the United States.  We can easily pay twice what the profitable rate is in Canada for certain drugs.  This is mainly due to price controls established by the government of Canada because they are the ones footing the bill.  Interestingly enough when the U.S. government is footing the bill we still decide to pay full retail (i.e. bogus made up price established by the drug company, based on what they think they can charge and still be able to look themselves in the mirror in the morning).  The pharmaceutical industry is looking at a dramatic reduction in their profits in U.S. single-payer system and I can assure you they will not leave that money on the table without a fight.

The Sleeper Will Awaken.

Predicting the future is always a dicey business but some outcomes are near certainties.  But first a little history.  When Bill Clinton won the presidency in 1992 one of the first major policy initiatives was to push for a single-payer health care system.  In doing so it birthed into the world what one health care analyst on NPR described as “the dragon”.  I do not care for the metaphor.  Dragons only have one head.  The unholy alliance that rose up against the Clinton administration is far better described by referencing the Lernaean Hydra.  Many heads, all of which with poisonous breath and in fact even the tracks left by the Lernaean Hydra were said to be poisonous.  An ungodly creature composed of many parts but was mostly snake.  Hospital corporations, pharmaceutical corporations, insurance industry and the AMA merged into a similar hydra with not just poisonous breath and a deadly trail in their wake but vast oceans of money with which to deceive the public.  It should be noted that with the possible exception of militant Christian, Jews, Sunnis and Shi’ites, I can think of no other grouping of four that has as much natural hostility towards one another than insurers, drug pushers, hospital suits and MDs.  If you think about a single group formed from the militant elements of Christianity, Jewry, Sunni and Shia Islam then you get a sense of just how breath taking it was to see the hydra that clawed it way out of the muck to challenge the Clinton administration.  One perhaps might have thought that with the death of the Clinton health care reform that this hydra died with the Clinton plan.  Not true.  It simply retreated back into the swamp from which it emerged while four of its heads remained above the surface.  It looks like four distinct creatures and the way they snipe at one another one would think they would have nothing to do with one another.  This view would be naive and a mistake.  They share 1.3 trillion things in common.  The beast is merely asleep and when the time comes it will awaken once more with even more heads than it had last time.  Free-market fundamentalist, Republican ideologues, Reagan Republicans and Ron Paul Libertarians, these heads will arise with the other four.  The poison breath will be even more dangerous (and deceptive).  The tracks they leave will be even more slimy (and sleazy).  They will view this as the end of “center-right” America (all this talk of America being a “center-right” country is nonsense.  America, for the last twenty or so years has been well to the right of center, not just a little right).  They will be right to think this, which will make this an existential struggle for them and thereby justify any tactic.

George Bush said it best: “See, in my line of work you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda.”  Prepare yourself for the return of the “Harry and Louise” ads (though the same actors have been hired by a pro-reform group) except this time Harry will be lying in the street dying because he had to wait to get into the hospital (those famous “wait times” you hear so much about–which are utter nonsense for life threatening conditions), but time ran out.  I cannot clearly imagine what the ads will be like but I am sure they will be in the vein of LBJ’s famous “Daisy Girl” ad.

But Why?

The reason it will be this way is that the situation is still not bad enough.  Americans are still convinced that theirs is the best health care system on the planet (it is not, it is the most expensive).  Americans distrust government.  Americans believe in the fairy tale that hard work is all that is needed to rise out of poverty.  There is no data to support this.  With rare exception, those who are born in poverty will die in poverty.  The same relationship holds true for those born wealthy, they will die wealthy as well.  In the end, combine that the health care situation in this country is not bad enough with the fact that there is still a lot of money to be made (by insurers, hospitals, pharmaceuticals and MDs) and I see Obama’s health care reforms either failing outright or he gets some watered-down, incremental nonsense which is the worst of both worlds (i.e. it is more expensive and less functional).  This will only make it harder to do what needs to be done later and it will raise the bar for how bad it will  have to get before the American people see that it needs to be done and are willing to hold their representatives accountable at the ballot box.  Sad to say, but you have another fifteen to twenty years before real health care reform comes to America.

A group in China has shown that female mice make eggs after birth. You are probably familiar with the long held theory that women are born with all the eggs they are going to have and when that supply runs out menopause initiation is the result.  None of this is a secret though.  The secret is this.  Research scientists are a competitive bunch.  The salary is low compared to what could be made working for a drug/biotech company and the hours are much longer.  So all that remains is one’s reputation.  So when another group comes out with a big finding it is very easy to see those that are in agreement with the finding and those for whom the finding represents a problem in their research.  How do you discern this?  Easy.  The scientists who hale the finding as very important are those for whom the finding benefits their work or those who agree with the finding but are not in direct competition with the group who published the finding.  The scientists for whom the finding represents a problem are the ones that drag out that old scientific saw which goes along the lines of: It’s an important finding but there is a long way from showing something in the [mouse, rat, zebra fish, fly, dog] and showing it in the human.

Why this is a bogus claim is twofold: 1. The authors make no argument about what’s happening in humans.  Unfortunately, humans are loath to submit to being killed as sham experiments, so we have to settle for mice.  2. While it is true that experimental animals are not human, everything we know about human physiology was first worked out in experimental animals.

Among the many casualties of the Obama Administration’s auto “bailout” plan, one may very well be the thing that allowed uneducated Americans, which still represents the overwhelming majority of Americans, to achieve a middle class lifestyle, namely the American labor union. If GM is forced into bankruptcy and Chrysler is sold off on the cheap to Fiat (which Obama is forcing down the throat of Chrysler) one of the net results will be the eradication of the union contracts. These contracts were weak to begin with and the UAW has been making concessions at a break neck pace. It is unlikely that a bankruptcy judge is going to take pity on the union. Despite the fact that the union has already conceded on wages, health care (for current workers), layoffs, raises and outsourcing the only prize left is the legacy health care costs for retired workers and pensions. These workers will largely suffer when the GM pension program falls on the Pension Benefit Guaranty Corporation and their health care plans (which are similar to the plans received by government employees) will be jettisoned for the substandard insurance that the majority of the private sector suffers under.  If you think I am being hyperbolic, then figure $2 million dollars (a fair estimate of what is billed when one receives treatment for cancer) and calculate how much money you will have to pay out of pocket. Do not forget to factor in what your premium will skyrocket to when your insurance comes up for renewal, assuming the insurance company does not drop you entirely.

Once the union rolls over or is forced over, exactly why would anyone join a union?  The whole point of a union is to ensure that management does not run ruff shot over the workers.  But with union membership declining and union jobs dwindling the ability of a union to fulfill its promise (a fair wage and safe working conditions) is all the more difficult.  Unfortunately, this is a feedback loop which ends when the union no longer exists.

Can someone explain to me what the difference is between GM and AIG?

It seems to me that:

1. Both companies were run into the ground by incompetent management who were motivated by greed rather than the good of the company.
2. Both companies can only survive by the largess of the American taxpayer.
3. The failure of either company would have a disastrous effect on the U.S. economy (so we are told).

It appears that if your business is finance then the bailout gravy-train comes fast and with all the goodies.  If you actually make something then the bailout gravy-train comes slow and chunky.

Dear Mr. DeSantis,

How dare you sir.  Have you no shame at all?  Have you no sense of what has happened the last 30 years?  How dare you paint yourself and the 400 others as victims!  You are not the victims, you are the perpetrators, either by action or negligence.  Where was the outrage when those “handful” as you say, were doing stupid things with other peoples’ lives?  Where was this outrage when, as you admit, you (and those 400) were overpaid all those years?  Did you once stop and think that what you were doing was of no actual value, to you or this country.  It was not us who betrayed you.  It is you who are the traitor!  You betrayed this country for 30 pieces of silver to line your own pocket and I will not spend one moment feeling sorry for you.

 I too work “10, 12, 14 hours a day” but unlike you I am doing something worthwhile.  I am getting a Ph.D. in cancer cell biology.  I do it not because there is some fat paycheck waiting for me.  Not because it feeds my ego.  I do it because my grandmother laying on her death bed begged me for her life.  “Do something,” she said.  “I don’t want to die.  I don’t understand why this is happening.”  My grandfather, a few years later, in a hospice for terminal patients writes me into his will at the last minute.  A former Marine he simply says, “Do something about this.”

This is what you do not understand.  This country does not exist as a large get rich quick scheme for those with the moral bankruptcy to take advantage of it.  It exists for those who wish to work hard for their families and society.  It exists to provide a place where people can find and nurture the better angels of their character.  You sir are an anathema to these things.

Respectfully & Sincerely,

M. Adrian Mattocks.

P.S.  Keep the money.  We need neither your pity nor your charity.

The first recession I remember was in 1981.  I was still a child and did not understand why the adults were so despondent but even I could see that it was bad.  One of the few things I remember from that time was my mother and father telling me that when I grow up I should do something I love.  Looking back a few decades later I noticed the advice is always the same when the economy is in the dump.  “Do what you love.”  So I was not surprised when I came across this story on CNN.com.

My response to this (having seen it one too many times now):  What a load of crap!

Doing what you love is a stunningly bad idea for one very simple reason:  You won’t love it for long when it becomes the primary means of meeting your financial obligations.

I understand why this old chestnut gets rolled out when the economy is bad.  If one is going to work hard for little money one might as well enjoy the activity.  The problem of course is that this advice ignores one fundamental lesson of economics… Economies are not down forever.  Eventually the economy will pick back up, GDP will rise and demand for whatever your love is will increase.  Shortly thereafter there will come a day when you realize that you actually cannot stand doing this.  “Sure I loved it when I started but now it has become my life and I have no time for anything else,” is a nice distillation of the common refrains of those who fell into this trap.  The trap is that one aspect of a beloved activity is that it happens on your terms.  You decide when you want to tend to your bonsai trees, paint that bowl of fruit, work on your novel, help the orphans, save the planet or help the troops.  When you do it as profession you have to accommodate its schedule.  Not feeling up to tending the trees?  Tough you have 3 orders to fill.  Those orphans?  Well now there are dozens of them who are assigned to you.  The rigor of a profession can wear on you quickly if you entered from the standpoint of “doing what you love”.

The ideal is finding a profession with which you have an intense love/hate relationship.  You need to be able to allow yourself to take a “whether” day (”I’m not coming in whether you like it or not”).  If your love for that still-life won’t allow you to just leave it and take a break, you will burn out and you will grow to hate the activity you once so loved.  This may seem to be a semantic difference but I have known (or heard about) many people who have found themselves in a career that they were sure they would love (they loved it when they were doing something else) only find the day-to-day grind of the job was crushing.  Do not get me wrong, people can start out loving something but they will eventually have to transition to a more nuanced appreciation of it.  Some activities are more amenable to this than others.  Some activities are well suited to reaching this quickly.  Science is a prime example.  Most enter with a love of science but the frustrations, pains and maddening nature of it force a quick transition (in fact well before a person becomes a professional).  Teacher and social worker seem to reside on the other extreme, hence the high burnout rate.

Among the many mechanisms available to a human cell is the ability to compensate for a defective gene.  If a gene becomes mutated so that it no longer functions correctly, other proteins (genes are the blueprints for proteins), in some instance, can pick up the functional slack for the damaged gene.  While this is not always the case and I know of no case where another protein can completely replace the damage gene, it does happen more often than one would think.  The replacement, though, is always less efficient than the original.  And in a great deal of circumstances a mutated gene becomes a death sentence.  More than half of all cancers have a mutated gene called p53 and if you have a mutated p53 you will almost certainly develop cancer.

All economies are composed of two things… supply and demand.  There are people who demand things, smartphones, computers, cars, porn etcetera.  People who supply things, HTC, Dell, Ford, Vivid.  An economy is very much like a eukaryotic cell.  It is very complex, there are overlapping pathways, there are built in redundancies (there are many companies offering smartphones with many of the same features) and the loss of any single entity does not automatically doom the system to failure.  Like everything else, there are exceptions.  Some genes, if lost, will result in catastrophe for the cell (and in some instances the body as a whole).  While de Gaulle’s quip about cemeteries and indispensable people is certainly correct as regards people, it does not apply to proteins or economies.  The consumer is two-thirds of the U.S. economy and without those consumers there is no U.S. economy.  A fact we are all now very much aware.  So what does an economy due when the indispensable one keels over dead?  You look for some economic plasticity.  Just as another gene can sometimes “fill-in” for a damaged gene, the Federal government sometimes has to fill-in for the damaged consumer.  Is it optimal?  No of course not.  In the cell, the substitute gene usually can only keep the cell going long enough so that it can be destroyed in an orderly fashion thereby preventing damage to neighboring cells (a process called apoptosis).  Similarly, the Federal government cannot keep the U.S. economy going indefinitely, but it can keep it going long enough for consumers (and by extension businesses) to regain their footing and start moving forward again.

John Maynard Keynes (1883–1946)

Cell (~3 billion years ago[for prokaryote]-present)