From today’s IBD:
Long waits are a hallmark of government health care anywhere it’s employed. When the perception exists that treatment is free, system overuse is inevitable. People can think of no reason to self-ration care. They show up in emergency rooms and doctor’s offices with conditions for which they wouldn’t seek treatment if they paid directly at the time of service.
Thanks to the profit motive, private health care providers have an incentive to cut waiting times, lest they lose customers to the competition. Government providers have no such motivation.
They do have incentive, however, to ration care when demand gets too high and costs soar. But to do so exposes “universal access” and “equal access” to be inaccurate descriptions. “Restricted access” would be more fitting.
Case Study: Canadian Health Care
Waiting times are the weak spot in Canadian healthcare. Canadian health consumers with a complicated condition can be subject to up to four lengthy waits: the first, to see their family doctor, or to find a general practitioner if they do not have a regular doctor; the second, to see the appropriate specialist for their ailment; the third, for diagnostic procedures to determine appropriate treatment; and the fourth, for treatment. It is not unusual for these cumulative delays to exceed a year.
LA Times–Consulting your family physician is finally moving into the 21st century and out of the doctor’s office. Since the dawn of e-mail, patients have been pleading for more doctors to offer medical advice online. No traffic jams, no long waits, no germ-infested offices with outdated magazines and bad elevator music.
There was always one major roadblock: Most health insurers wouldn’t pay for it. Until now.
In recent weeks, Aetna Inc., the nation’s largest insurer, and Cigna Corp. have agreed to reimburse doctors for online visits. Other large insurers are expected to follow, experts say.
These new online services, which typically cost the same as a regular office visit, are aimed primarily at those who already have a doctor. The virtual visits are considered best for follow-up consultations and treatment for minor ailments such as colds and sore throats.
A few weeks ago, I posted about commercial bank loans being at a record high of $760 billion in early January, based on weekly Federal Reserve banking data for large commercial banks. The updated chart above (click to enlarge) reflects a few more weeks of banking data, and this time shows the percent change from a year ago. Not only is commercial lending at an all-time high based on volume, but also the year-to-year growth rate has been phenomenal: double-digit growth in commercial bank loans for almost 6 months now, and close to 20% growth for the last 4 months, stronger growth in commercial lending than at any time in at least 20 years.
Listening to media reports on the U.S. banking system and credit markets, one gets the idea that commercial lending and credit have dried up, and thousands of banks and companies are teetering on the edge of insolvency (e.g., see Paul Krugman’s blog post “Credit Crunch“). Yet the reality is that commercial lending is at an all-time historical high, and growing at the fastest rate in recent history.
This suggests that thousands of companies are applying for, and being granted, commercial loans to finance business investment and expansion. And the growth in commercial lending is stronger than ever before. Not exactly an ingredient for a recession. Notice on the graph above the significant declines in commercial lending that accompanied the recessions in 1990-1991 and 2001 – it would be difficult to suggest that we have entered a recession in January 2008 with such strong growth in commercial lending.
Parade Magazine–Last month, Congress passed a 3,500-page omnibus spending bill after less than 24 hours for review. The bill, which mostly renewed funding for existing programs, contained more than 9,000 “earmarks”—worth at least $7.4 billion—for legislators’ pet projects, including:
- Olive fruit fly research in France: $213,000
- Center for Grape Genetics in Geneva, N.Y.: $1.9 million
- Fish-waste research in Alaska: $2.5 million
- Awning renovations in Roanoke, Va.: $250,000
- Cormorant control in Vermont, Michigan, Mississippi and New York: $1.2 million
The real problem with earmarks, says Rep. Jeff Flake (R., Ariz.), is that “they circumvent the normal process,” since they typically are placed in bills without discussion. Thus, lawmakers never get to debate them and find out if they’re genuinely necessary—or just more pork.
See a related WSJ article “MURTHA INC.: How A Lawmaker Rebuilt Hometown on Earmarks,” about the top Congressional earmarkers (see list above), and the #1 Leader of the Pork, Rep. John Murtha.
Sports Illustrated–For the fourth straight year, Sports Illustrated set out to rank the 50 top-earning American athletes (taking into account on and off the field income), and it’s no surprise to see the familiar names at the top of the list (see chart above, click to enlarge). The most obvious? Tiger Woods has reached an otherworldly plateau of nearly $112 million. Boxing is back from the dead for now, thanks to No. 2 Oscar De La Hoya, and the Shaq and Kobe rivalry lives on.
Half the list is made up of NBA players, while only 12 baseball players and five football players made the cut. There were three NASCAR drivers and just one woman (welcome, Michelle Wie!)
NEW YORK (AP) – An Associated Press calculation shows that compensation for America’s top CEOs has skyrocketed into the stratospheric heights of pro athletes and movie stars: Half make more than $8.3 million a year, and some make much, much more.
Comment: Average compensation in 2007 of the top 50 athletes was $23.4 million, and median salary was $19.4 million. Median salary for CEOs in 2007 was only $8.3m for the 386 companies in the AP study referenced above (obviously a larger sample than for the SI athlete list).
Question: Why is it that when CEO salaries “skyrocket into the stratospheric heights of pro athletes,” CEO salaries are condemned as “excessive?” Where is the outrage about athletes’ salaries? After all, athletes made the stratospheric salaries before the CEOs did, so shouldn’t those salaries also be considered excessive?
Based on Google searches, apparently not: Search for “excessive CEO compensation” and you’ll find more than 3,000 references. Search for “excessive athlete compensation,” and you’ll find 0.
Update 1: See previous CD post on “excessive celebrity pay.”
Update 2: Google search for “overpaid athletes” = 12,600 hits. Google search for “overpaid CEOs” = 8,530 hits. Thanks to an anonymous commenter.
Superbowl tickets sold for as high as $40,000 on Ebay, for four tickets on the 45-yard line.
Updated: Sorry, it was $40,000 for 4 tickets, not 2 tickets! “Only” $10,000 per ticket, not $20,000.
The political importance of corn-growing, ethanol-making Iowa is one reason that biofuel mandates flow from Washington the way oil would flow from the Arctic National Wildlife Refuge (ANWR) if it had nominating caucuses.
ANWR’s 10.4 billion barrels of oil have become hostage to the planet’s saviors (e.g., John McCain, Hillary Clinton, Barack Obama), who block drilling in even a tiny patch of ANWR. You could fit Massachusetts, New Jersey, Rhode Island, Connecticut and Delaware into ANWR’s frozen desolation; the “footprint” of the drilling operation would be one sixth the size of Washington’s Dulles airport.
To avoid drilling for oil in ANWR’s moonscape, the planet savers evidently prefer destroying forests, even though they absorb greenhouse gases. Will ethanol prevent more carbon-dioxide emissions than would have been absorbed by the trees cut down to clear land for the production of crops for ethanol? Be that as it may, governments mandating the use of biofuels are one reason for the global rise in food prices, which is driving demand for more arable land. That demand is driving the destruction of forests—and animal habitats. In Indonesia alone, 44 million acres have been razed to make way for production of palm oil.
If the argument for ethanol is that domestically produced energy should be increased, there are better ways of doing that. On the outer continental shelf there is a 50-year supply of clean-burning natural gas, 420 trillion cubic feet of it, that the government, at the behest of the planet’s saviors, will not allow to be extracted.
~George Will in his Newsweek article “The Biofuel Follies“
Today’s Americans, their pain threshold lowered by the successful modulation of business cycles, now regard recessions as not mere misfortunes but as violations of an entitlement to perpetual economic serenity. In the 50 years prior to 1945, contractions were frequent and ferocious enough to fray the social fabric. There were three contractions of 5% of GDP, two of 10% and two of 15%. Since postwar demobilization, the most severe contraction — that of 1982, when President Ronald Reagan and Fed Chairman Paul Volcker stifled inflation — was 1.9%.
That recession ended in November 1982. If another recession did start last month, then in the 302 months from November 1982 through December 2007, the economy was in recession only 14 months — 4.6% of the time. The economy was in recession 22.4% of the time between 1945 and 1982.
A recession-free economy is neither an entitlement nor, truth be told, desirable: The “wisdom of crowds” is real but even markets make mistakes and recessions, aka corrections, are, by definition, constructive. Even so, the modern economy’s rhythms are much less alarming than any previous generation could have imagined.
From George Will’s most recent column
Note: Recessions between 1854 and 1945 lasted an average of about 20 months, compared to the average of only 10 months since 1945, and 8 months for the last two (1990-1991 and 2001).
WSJ Editorial: Remember when Microsoft was going to leverage its dominance of the operating-system market into control of the Internet? By a quirk of fate, at almost the exact moment that Justice filed suit against Microsoft in 1998, a couple of graduate students in Silicon Valley were seeking money for a little company they wanted to start. They called it Google.
Ten years on, Google isn’t so little and Microsoft is a distant No. 3 in the search market. Yahoo, the No. 2 search engine, had seen its stock fall some 80% from its dot-com-era highs before Microsoft made its bid. Remember those days? It’s funny how the one true Internet giant to emerge from the bubble wasn’t even publicly traded when the Nasdaq poked its nose above 5,000 in March 2000. Business fortunes are hard to predict.
And so while Microsoft was being excoriated for including a Web browser with Windows and then — horrors! — a media player too, Apple found a killer app in iTunes and Microsoft’s fleeting monopoly on a browser that it gave away didn’t turn out to be a cash cow after all. It’s hard to make it up on volume when the product is free.
Yes, Microsoft still makes lots of money selling Windows and Office. But the plans for world domination have been put on hold. Yahoo might help Microsoft give Google a run for its money. Or maybe — just maybe — there are some kids in a garage somewhere as you read this, writing the code that will make Google shareholders look back on its $160 billion market cap in early 2008 and weep.
We’re willing to bet that in another 10 years all of us will be using the Internet in ways not yet invented in 2008. Microsoft’s bid for Yahoo is, above all, an admission that while it was chasing the browser and media player markets, the world was moving on. That won’t stop.