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

Citizen’s Guide to economic knowledge

A Citizen’s Guide to the financial status of the US government is a new publication to provide easier access for citizens to obtain data and understanding of what is going on. I believe this is the first edition.

It is coordinated between Treasury, OMB, and the Comptroller General. It is pdf. It reads like the last legacy of David Walker as he heads out to private think tank and Alan Greenspan’s new booklet on his wisdom. But that is my snark. It is supposed to explain what is up to the average person.

Comments or posts are welcome.

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Eyes on Trade

Eyes on Trade of Public Citizen Watch has an opinion piece worth reading on the WTO and trade agreements, with some useful links.

It’s our unfortunate duty here at EOT to have to read some truly mind-numbing trade law analyses of domestic regulation. For instance, have you ever really thought about whether electricity is a good or a service? Yesterday, I had to read through a 1998 WTO document that goes through this metaphysical question in excruciating detail. Short answer: if your electricity comes from coal, well then the coal itself is a good. But once it becomes electricity, it’s probably a service, because you can’t plop a piece of electricity down on your dinner plate.

Since the Bush I and Clinton I administrations committed many energy-related services to the restrictive WTO service sector agreements, there’s a good chance that many of Clinton, McCain and Obama’s proposals on energy could run afoul of WTO rules. So if the political reasons to talk fair trade weren’t compelling enough, there’s plenty of good policy reasons as well.

You may ask yourself, how did we get to the point where lawyers sat around thinking of basic human rights to turn into “tradeable commodities/services”? To paraphrase Larry the Cable Guy, this 1992 intellectual history article by William Drake and Kalypso Nicolaidis shows how corporate lobbyists “got-r-done”:

The very act of defining services transactions as ‘trade’ established normative presumptions that ‘free’ trade was the yardstick for good policy against which regulations, redefined as nontariff barriers (NTBs), should be measured and justified only exceptionally. Members believing there to be many justifiable exceptions thus had to defend what their counterparts label ‘protectionism.’… [the services trade lobby’s] body of work took on the attributes of a social science literature in which authors cited, critiqued, and built on each other’s analyses. But unlike most academic debates, in which contending theories and assumptions remain contested, the services discussion produced broad and lasting consensus on core concepts and objectives. Community members were by now unanimous in their dedication to the common policy project of placing services on the GATT agenda, and this relevance test precluded meta-theoretical differences of the sort familiar to political scientists. Disagreements were confined to the issue of which GATT principles and processes were right for which transactions, rather than to the question of whether services should be treated as trade in the first place.

This gets back to my point about how savvy corporate interests are at incrementalism. You don’t have to totally commoditize everything in a single day or single WTO round: just getting some definitions on the table can get the corporate animal spirits spirited up. Before you know it, public interest advocates are on the defensive, having to articulate why they thought regulation was necessary in the first place. And unfortunately, even many of our best politicians attempt to strike a “middle ground” between the previously unthinkable corporate takeover and the public interest, leading to a continual rightward drift.

This statement is another take on trade agreements. When does ‘free trade’ become ‘coercion’? And when does a linear and limited corporate culture (profit) become a replacement for a differently linear and limited governmental culture (good governance)?

Update: The links do not transfer, but it is worth the trip over.

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Changeover by fiat

Calculated Risk has graciously lent his template for our use, which I think is a winner.

There is no good time to change the old template to new template. There is also no way to save the old comments as notified by haloscan and blogger. The old Angry Bear html is also much too different from current languages to translate.

I apologize for the inconvenience. You can save your comments and put them back in after the change today.

Update: Comments saved against all odds.

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Social Security steamrolls carnival

On January 10 Moody’s, in concert with the other main bond rating firm, Standard and Poor’s, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody’s that the U.S. government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s Aaa rating.”

Steven Hess, Moody’s top analyst for the US economy spelled it out even more explicitly to the London Financial Times: “If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A creditThe US rating is the anchor of the world’s financial system. If you have a downgrade, you have a problem.”

There seems to be more than a difference of opinion a la David Walker as well. My question is why? How do they interpret the problem as financial?

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Another budget constraint

Shadowstats has announced this tidbit.

The Department of Commerce (DOC) has decided to discontinue its economic indicators service Economic indicators due to ‘budgetary constraints’.

Shadow Government Statistics is pleased to announce that it will provide — at no charge to
the public — a continuation of the basic link service heretofore provided by the DOC’s Economics and Statistics Administration.

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Reader Denis offers this post on poverty

38% of American families living below a more accurately drawn poverty line?

50 percentile (technically, mean third-quintile) family income for 2005 was
$56,277
.

A plausible poverty line for a family of three (on the “minimum needs” table on p.44 of the 2001 book Raise the Floor) is $33,345 in 2008 dollars — if health care is otherwise covered. Add $10,000 for a 2008 family health policy and we get a plausible poverty line (as opposed to the implausible federal line computed at 3X the price of a super cheap diet) for a family of three of $43,345. (Raise’ supplies extensive explanations for its minimum needs numbers in Appendix B — its budget tables cite Solutions for Progress as their source.)

The difference between second and third quintile mean family income ($35,000, $56,000) is about $1,000 per percentile. That computes ($35,000 is 30 percentile + $8,000 more is 8 more percentile) to 38% of American families living below a believable poverty line (at least without food stamps and other helps — average family size is 3.13 persons).

I have been touting 25% as a realistic poverty line — just doubled the 12.5% official line — made a conservative fit with Raise the Floor’s doubling of official criteria (was more than doubling — being the official criteria for a family of 3) — conservative because, if anything, I expected the low income curve to be flatter than 45 degrees. It seems it was flatter than I even guessed.
Assuming I can’t find something wrong with 38% in poverty. The media continuing to report 12.5% poverty without qualification is like reporting in Columbus’ time that the world is flat — it makes no waves; but informed people know otherwise.

Moreover a possible 38% poverty line should have progressives wondering whether we are looking at more subsidized than nonsubsidized purchases of proposed health care vouchers. May it be time to consider a straightforward voucher system instead of the clunky payroll tax (to cover vouchers)-plus-mandated purchase concoction (if we must have private plans)?

Denis

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Measuring costs in health care


The New England Journal of Medicine has published an article on their analysis of prevention programs versus treatments.

Indeed, some evidence does suggest that there are opportunities to save money and improve health through prevention. Preventable causes of death, such as tobacco smoking, poor diet and physical inactivity, and misuse of alcohol have been estimated to be responsible for 900,000 deaths annually — nearly 40% of total yearly mortality in the United States.1 Moreover, some of the measures identified by the U.S. Preventive Services Task Force, such as counseling adults to quit smoking, screening for colorectal cancer, and providing influenza vaccination, reduce mortality either at low cost or at a cost savings.2
Sweeping statements about the cost-saving potential of prevention, however, are overreaching. Studies have concluded that preventing illness can in some cases save money but in other cases can add to health care costs.3 For example, screening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would have become ill in the absence of preventive measures. Preventive measures that do not save money may or may not represent cost-effective care (i.e., good value for the resources expended). Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question. For example, drugs used to treat high cholesterol yield much greater value for the money if the targeted population is at high risk for coronary heart disease, and the efficiency of cancer screening can depend heavily on both the frequency of the screening and the level of cancer risk in the screened population.4
The focus on prevention as a key source of cost savings in health care also sidesteps the question of whether such measures are generally more promising and efficient than the treatment of existing conditions. Researchers have found that although high-technology treatments for existing conditions can be expensive, such measures may, in certain circumstances, also represent an efficient use of resources.5 It is important to analyze the costs and benefits of specific interventions.
A systematic review of the cost-effectiveness literature sheds light on these issues. We analyzed the contents of the Tufts–New England Medical Center Cost-Effectiveness Analysis Registry (www.tufts-nemc.org/cearegistry), which consists of detailed abstracted information on published cost-effectiveness studies through 2005. Each registry article estimates the cost-effectiveness of one or more interventions as the incremental costs (converted here to 2006 U.S. dollars) divided by the incremental health benefits quantified in terms of quality-adjusted life-years (QALYs). Low cost-effectiveness ratios are “favorable” because they indicate that incremental QALYs can be accrued inexpensively. An intervention is “cost-saving” if it reduces costs while improving health. Poorly performing interventions can both increase costs and worsen health.
Our analysis was restricted to the 599 articles (and 1500 ratios) published between 2000 and 2005 that properly discounted future costs and benefits. We classified 279 ratios as preventive because they refer to interventions designed to avert disease or injury; all 1221 other ratios pertain to treatments, a category that includes both “tertiary” measures (designed to ameliorate the effects of a disease or condition) and “secondary prevention” measures (designed to reverse or retard progression of an existing condition), such as the use of implantable cardioverter–defibrillators in patients with myocardial disease.

Our findings suggest that the broad generalizations made by many presidential candidates can be misleading. These statements convey the message that substantial resources can be saved through prevention. Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not. Careful analysis of the costs and benefits of specific interventions, rather than broad generalizations, is critical. Such analysis could identify not only cost-saving preventive measures but also preventive measures that deliver substantial health benefits relative to their net costs; this analysis could also identify treatments that are cost-saving or highly efficient (i.e., cost-effective).
In addition to determining which preventive measures and treatments are most efficient, it will be necessary to identify those that are not yet fully deployed and those that could serve a large population and bring about substantial aggregate improvements in health at an acceptable cost. Findings that some cost-saving or highly efficient measures are underused would indicate that current practice is inconsistent with the efficient delivery of health care. Other services might be identified as overused, and such findings would underscore the importance of fashioning policies that provide incentives to shift practice toward more cost-effective delivery of health care. In the face of increasingly constrained resources, there is a realistic way of achieving better health results: conduct careful analysis to identify evidence-based opportunities for more efficient delivery of health care — whether prevention or treatment — and then restructure the system to create incentives that encourage the appropriate delivery of efficient interventions.

To provide an anecdote to broaden the scope of this analysis, I would like to offer in the second post a story that is true and accurate. about diagnosis, costs, treatments and prevention.

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Page five in the news-Iraq

The Iraq project

This article has some notions about the Iraq project that is thought provoking. The author must have been talking to buffpilot.

In summary, the author stresses several main ideas.

1. The success of the surge, such as it is, relies totally on Mehdi’s cease fire in relation to toning down the Badre influence in the growing national government (ends in February unless renewed), and the continued success of the Sunni alliance, one hundred leaders having been assinated to date and increasing.

2. Despite the PR of the administration and candidates, spending has been maintained or increased to build not only a fortress embassy, but what is to be eventually the largest airport in the world with a centralized US command center for the whole of Iraq. Even with a drawdown of troops on the ground, the other part of the plan is domination via air and water. We are there to stay in the country, not just in neighboring countries.

2. There is a concerted effort to keep immunity for all ‘foriegn’ employees under contract, totaling maybe over 300,000 personnel, to be free from local controls of any kind. (This is a 1.3% of the population remaining in Iraq, like having 3 million personnel immune to national level prosecution in the US.) Such personnel will operate the facilities and supports and whatever other operations remain.

It seems to me even if the drawdown includes the five brigades, the PR campaign this election is working to keep Iraq on page 5, so the other 180,000 personel are not talked about, nor the continuing building, nor Maliki ignoring the parliament and instituting ‘illegal’ agreements. You know, eggs and omellettes.

On the other hand, the next president could change the mission and have Patreaus do other planning as well with a different mission. It would still be a huge behemeth to deal with. To deal with the war machine here would probably be harder.

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Endocrines, excitoxins, and foresight

OMB Watch comments on a part of the new 2009 budget. In my opinion, any cuts in research in this area is cause for alarm. If anything, someone has to take the lead. We are just beginning to be able to measure impacts as sophistication in genetic reseach increases. And current toxic levels and measurements have already been demonstrated to be nonsense for unborns and children.

Yesterday, President Bush unveiled his FY 2009 budget proposal. There is plenty to be upset about in the proposal (as OMB Watch’s Budget Blog has noted here.) Cuts in federal funding of environmental protection programs are among the most troubling.
Bush is proposing serious cuts at the U.S. Environmental Protection Agency — $330 million, or 4.4 percent. Sen. Barbara Boxer’s☼ Environment and Public Works Committee has prepared a list of EPA programs and research activities that will be cut if Bush gets his way. (See the list here.)
Of note, Bush is proposing cuts to EPA’s endocrine disruptor research and prevention programs. Boxer’s committee says the proposal, “Cuts $3.6 million (35%) from efforts to help protect people from endocrine disruptors, dangerous chemicals that can harm human health at very low levels by interfering with the body’s hormone systems.”
EPA’s endocrine disruptor program is already woefully behind schedule. In 1996, Congress passed legislation mandating EPA assess the health impacts of endocrine disruptors. In the summer of 2007, EPA finally got around to step one of the process — releasing a list of chemicals to be tested and laying out the process for assessing risk. Critics assailed EPA’s program as scientifically flawed and accused the agency of designing experiments to purposefully minimize findings of adverse effects. Budget cuts are not likely to move the research along or improve the quality of the risk assessment process.
One last thing, from a note at the bottom of the committee’s press release:
These figures are based upon summary tables provided by EPA. Normally, EPA provides a detailed “Budget Justification” document with an explanation of all budget figures, but this year has failed to do so, undermining the transparency of the President’s proposed budget.
Not surprisingly, the administration isn’t just attempting to gut domestic programs, it’s trying to do it without telling Congress or the public.

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