Relevant and even prescient commentary on news, politics and the economy.

The Ultimate Solution

The Ultimate Solution

Yes, Trump really said that.  The Syrian Kurds, who have been where they are about to be ethnically cleansed out of, are welcoming “the ultimate solution,” just like Jews in you know where were welcoming “the final solution.”  Of course they must accept this because they are “no angels,” “communists,” and “worse then ISIL.” So much for a “post-socialist” Bookchinite cooperative system.  But, hey, they are all so fortunate to have “the ultimate solution.”   What else is there to say?

(Dan here…Rosser updates in comments)

 Well, there is more. Trump has declared that the Syrian Kurds should be “happy” to have this “ulitmate solution” to leave this area they have lived in for 4000 years. And just to emphasize the point, Erdogan has declared that if they do not move in the next few days, he will have his troops “crush their skulls.” How happy can one get?

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Mike Pompeo Reminds Me of Al Capone

Mike Pompeo Reminds Me of Al Capone

How to say in Latin that our Secretary of State is pompous and dishonest as it gets? Oh yea – if one says “quid pro quo” in English, it never happened. These unbelievable stupid excuses for denying what is plainly true – that Trump extorted dirt on Democrats from Ukraine by withholding military aid – is insulting as they are treating us like “chumps” to paraphrase Leon Penatta. But even more insulting is this:

Secretary of State Mike Pompeo fiercely criticized the House impeachment inquiry, saying his department is being treated unfairly as Democrats seek to remove President Donald Trump from office … “They’re not letting State Department lawyers in the room … they have not let State Department lawyers be part of these hearings,” Pompeo said. “That’s unheard of … I haven’t seen you all report that.”

First of all, we do know that the brave members who served the State Department honorably have turned down Pompeo’s lawyers in lieu of bringing their own so this last sentence of his is a lie as this fact has been reported on. Secondly, Pompeo is whining that HE is being treated unfairly. Look Pompeo is clearly a mobster style criminal – hence my reference to Al Capone. Can you imagine a grand jury investigation of a mob boss where the mob boss gets to send his own lawyer into the testimony before the grand jury? Witnesses might be reluctant to appear out of fear that the mob lawyer would tell his client who to knock off. Pompeo is all about witness intimidation as he fears the truth. And yea – I bet Pompeo and his boss (Trump) would stoop to killing anyone who dares to stand up to their treasonous crimes.

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Unsubstantiated Drug Price Increases

The ICER (Institute for Clinical and Economic Review)

Is an independent and non-partisan research organization. Its purpose is to evaluate the clinical and economic value of prescription drugs, medical tests, and health care and health care delivery innovations. ICER conducts rigorous analyses of all clinical data with key stakeholders to include patients, doctors, life science companies, private insurers, and the government and translate the evidence into policy decisions that lead to a more effective, efficient, and just health care system.

As explained by their site information, ICER is known as the nation’s independent watchdog on drug pricing. It’s drug assessment reports include a full analysis of how well each new drug works and the resulting “clinical value, quality of life, benefit to the health-care system and society” used to establish a price. Using the drug assessment report, a “value-based price benchmark” is established  reflecting how each drug should be priced addressing all four factors. Reports also evaluate the potential short-term budget impact of new drugs to alert policymakers to situations when short-term costs may strain health system budgets and lead to restrictions on patient access. Ensuring objectivity in its work, all ICER reports are produced with funding from non-profit foundations and other sources that are free of conflicts of interest from the life science industry or insurers.

What I have seen in the past is the ICER establishing pricing for new drugs taking into consideration these factors; “the patient’s quality of life, and the resulting benefits to the health-care system, and society.” This is the first time I am seeing the ICER looking at price increases and determining whether the value delivered substantiates a price increase. By the numbers: Here are the drugs (and manufacturers) highlighted in a recent ICER’s report, with the increase in net spending attributable to each drug’s price increase, and citing the increases could not be justified by the value delivered.

The figures reflect the dollars Americans spent on drug copays and other out-of-pocket costs in addition to the higher amounts people paid through health insurance premiums and taxes.

Past the leap is an explanation on how the ICER reached its conclusions for the nine drugs and the limitations to this findings.

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An Increasingly Divergent US Economy

An Increasingly Divergent US Economy

Lots of people have been huffing and puffing about whether or not the US economy will go into a recession in the near future, with Menzie Chinn and Jim Hamilton at Econbrowser saying it is now about 50-50 whether or not the US economy will go into recession by the end of 2020.   I do not have a horse in that race, but I am struck that a new odd phenomenon has recently appeared in the US economy, a split between sectors regarding their performance that recently seems to be increasing.

The sectors are manufacturing, which has been declining now for several months and is the harbinger of recession. Meanwhile single family permits are up, and YOY permits overall are up by 8 percent that may well hold off any recession if it continues to accelerate.  It is unclear which will win out.

So the general story of manufacturing looking to decline while housing construction is likely to rise still holds for the fairly near future.

The manufacturing decline has been widely tied to the trade wars, which would appear to be at least partly responsible.  It is also the sector that through trade may be experiencing the pressures of the slowing of global growth.

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Positive housing, initial claims, and Philly Fed outweigh negative industrial production

Positive housing, initial claims, and Philly Fed outweigh negative industrial production

So, after a nearly empty week until now, there were four economic reports this morning. Three of them were good.

First, although overall housing starts and permits declined, single family permits, the most forward looking and least volatile of the metrics, were only 3000 off a new  expansion high (red in the graph below, vs. multi-family permits):

Housing’s rebound is the biggest single argument against a recession later next year.

 

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A Nobel for the Randomistas

A Nobel for the Randomistas

I don’t think anyone was surprised by this year’s “Nobel” prize in economics, which went to three American-based specialists in the design of on-the-ground experiments in low income countries, Abhijit Banerjee, Esther Duflo and Michael Kremer.  I think the award has merit, but it is important to keep in mind the severe limitations of the work being honored.

The context for this year’s prize is the long, mostly frustrating history of anti-poverty projects in the field of development economics.  Much of the world, for reasons I’ll put to the side for now, is awash in poverty: billions of people lack access to decent sanitation, medical care, education and physical and legal protection, not to mention struggling to put food on the table, a roof over their head and cope with increasing demands for mobility.  A lot of money has been spent by aid organizations over the years to alleviate these conditions, without nearly enough to show for it.  (My specialty, incidentally, has been in child labor, which has been the focus of a large piece of this work.)

There have been various reactions to the lack of progress.  One has been to argue that the effort has been too weak—that we need more money and ambition to turn the corner.  This is Jeffrey Sachs, for instance.  Another is that the whole enterprise is misbegotten, a relic of colonialism that was always destined to fail.  You can get this in either a right wing (William Easterly) or left wing (Arturo Escobar) version.  (I critiqued the “left” stance on child labor here.)  A third is where this Nobel comes in.

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Service disruption

We have had little disruption with service over the last few years, so the disruption Monday came as a surprise.  I apologize for any inconvenience.  A server malfunction was the cause.  It is a reminder that internet infrastructure has weak points other than my laptop.

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Weekly Indicators for October 7 – 11 at Seeking Alpha

by New Deal democrat

Weekly Indicators for October 7 – 11 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

The stars are aligning for the recovery from the present slowdown in the longer term. But in the meantime, the present and short term data is still soft.

As usual, clicking over and reading helps reward me a little bit for my efforts.

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