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

Innovation only happens when maximizing? Or failure of imagination?

NYT reports on another innovator for the less affluent. Add in the $100 laptop, less expensive ways to chain wifi, and voila…freer markets without the huge drain of billion dollar Ceo networks who weigh us down with bloated bureacracies and constricted thinking about profit structures. Maybe ‘maximize’ and ‘innovation’ are not synonomous after all, as bureacrats public and private might want to convince us?

He quit Microsoft and, with his stepfather, Ira Weise, and a former Microsoft colleague built a social-networking site to connect Bangalore’s yuppies with its laborers. (The site, which Mr. Blagsvedt started this summer and runs out of his home, focuses on Bangalore now, but he plans to spread it to other Indian cities and maybe globally.)

Building a site meant to reach laborers earning $2 to $3 a day presented special challenges. The workers would be unfamiliar with computers. The wealthy potential employers would be reluctant to let random applicants tend their gardens or their newborns. To deal with the connectivity problem, Babajob pays anyone, from charities to Internet cafe owners, who finds job seekers and registers them online. (Babajob earns its keep from employers’ advertisements, diverting a portion of that to those who register job seekers.) And instead of creating an anonymous job bazaar, Babajob replicates online the process by which Indians hire in real life: through chains of personal connections.

Just one frame to sell.

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Transparent market expenses

New England Journal of Medicine reports the following about transparency in the market:

On September 6, 2007, Senators Charles Grassley (R-IA), the ranking member of the Committee on Finance, and Herb Kohl (D-WI), chairman of the Special Committee on Aging, introduced the Physician Payments Sunshine Act — so named because it aims to “shine a much needed ray of sunlight on a situation that contributes to the exorbitant cost of health care,” according to cosponsor Senator Charles Schumer (D-NY). The bill would require manufacturers of pharmaceuticals and medical devices with annual revenues of more than $100 million to disclose the amount of money they give to physicians — whether in the form of a free dinner or vacation or a consulting fee. “This bill is about letting the sun shine in so that the public can know,” says Grassley.
The move was stimulated in part by activity in Minnesota and Vermont, which have made the reporting of such relationships mandatory — Minnesota in 1993 and Vermont in 2003. Three additional states (Maine, West Virginia, and California) and the District of Columbia have now enacted similar disclosure laws, and many other states are considering doing so. Although beliefs vary widely about the overall usefulness of the data collected under state mandates, the movement toward increased transparency is gaining steam.

Some transactions are proprietary, some are not. A more benign form of government interference is a call for more transparency…the payments are not forbidden, just announced. Let the public decide and the doctor explain.

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December 5 hearing at US Supreme Court

Guantanomo is the subject of a new hearing for the status of the inmates.

An American military lawyer and veteran of dozens of secret Guantanamo tribunals has made a devastating attack on the legal process for determining whether Guantanamo prisoners are “enemy combatants”.
The whistle blower, an army major inside the military court system which the United States has established at Guantanamo Bay, has described the detention of one prisoner, a hospital administrator from Sudan, as “unconscionable”.
His critique will be the centrepiece of a hearing on 5 December before the US Supreme Court when another attempt is made to shut the prison down. So nervous is the Bush administration of the latest attack – and another Supreme Court ruling against it – that it is preparing a whole new system of military courts to deal with those still imprisoned.
The whistle blower’s testimony is the most serious attack to date on the military panels, which were meant to give a fig- leaf of legitimacy to the interrogation and detention policies at Naval Base at Guantanamo Bay. The major has taken part in 49 status review panels.
The army major has said that in the rare circumstances in which it was decided that the detainees were no longer enemy combatants, senior commanders ordered another panel to reverse the decision. The major also described “acrimony” during a “heated conference” call from Admiral McGarragh, who reports to the Secretary of the US Navy,

Two other military lawyers have also gone public. In June, Army Lt-Col Stephen Abraham, a 26-year veteran in US military intelligence, became the first insider to publicly fault the proceedings. In May last year, Lt-Com Matthew Diaz was sentenced to six months in prison and dismissed from the military after he sent the names of all 551 men at the prison to a human rights group.

Whistle blower’s in the Federal system put themselves in serious jeopardy when they go public and are named. The Protection Act has about 3-4% win rate in the special court for what looked to be serious allegations, the Guantanamo issue being a small part of the statistics.

I do not think BDS would be enough motivation to come forward, since you are sure to be punished in a bi-partisan manner eventually when the spotlight is turned off. Most do not write books, and end their careers in their departments. (Except for the celebrities of the genre).

Many are ‘swift boated’ through innuendo and the constant chatting of the likes of BillO’, and facts as we know often serve to reinforce impressions by association with the chatter.

Busting Myths Right and Left is more apropos.

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Halloween econ 101 – does value = $ only

HALLOWEEN hits a new high tonight.

Still, fewer people are planning on celebrating Halloween in 2007, according to the National Retail Federation survey. Around 59 percent will celebrate Halloween this year, compared to the nearly 64 percent that celebrated last year. Rist said that the drop-off occurs due to tightening economic conditions. However, those celebrating plan on spending more than they did last year, an average of around $65 per person, driving retail spending up to $5.07 billion from last year’s $4.95 billion.“The folks that are continuing to participate are going to spend more,” Rist said.

What are consumers spending the most on? Their creativity. The average person, according to the National Retail Federation’s poll of 8,877 consumers nationwide is expected is expected to spend $23.33 on Halloween costumes this year, though 18- to 24-year-olds plan to be the most festive, spending $34.06 on costumes. Industry-wide, that’s around $1.8 billion. Candy is second, with consumers shelling out nearly $1.57 billion on sugary treats. 95 percent of consumers say they expect to purchase candy.

I hope that we are doing more creativity than the article indicates. New costumes seem to be highly muscled Spidey or Batman sorts of things, or the new slutty look. Maybe only in the burbs?

When in middle school, my two boys would build a haunted house in the cellar with different themes (ghoulish dungeon, horrible science experiments, movie themes)with maybe six friends weeks in the making, then families would come by to see, bringing some food along. Then the trick or treating and Unicef collecting (which appears to be out of favor).

It was also a time when several dads walked around, left in the dust and dark, for a couple hours of real conversation. Rare indeed for dads in my experience.

To put a real scare into kids this year I am handing out twinkies, moonpies to old folk. Happy halloween.

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Rdan asks a poignant question…idealogy or performance based quality?

US News magazine reported their listing of the best healthplans in the US based upon multiple criterion, which readers can peruse on their site. I was surprised that the health plans I was familiar with were rated the best.

The Honor Roll recognizes the very best of the hundreds of commercial, Medicare, and Medicaid managed-care plans reviewed for this year’s U.S. News health plan rankings. Plans were scored from 0 to 100 based on data collected and analyzed by the National Committee for Quality Assurance, managed care’s major accrediting and standards-setting body.

Best commercial plans
Rank Plan Type Score
1 Harvard Pilgrim Health Care Maine, Mass. HMO/POS 91.7
2 Tufts Associated Health Maintenance Organization Mass., N.H., R.I. HMO/POS 90.8
3 Harvard Pilgrim Health Care of New England N.H. HMO/POS 90.6
4 Blue Cross and Blue Shield of Massachusetts Mass. HMO/POS 89.0
5 ConnectiCare Conn. HMO/POS 88.9
6 Health Net of Connecticut Conn. HMO/POS 88

Best Medicare plans
Rank Plan Type Score
1 Fallon Community Health Plan Mass. HMO 86.4
2 Blue Cross and Blue Shield of Massachusetts Mass. HMO 86.0
3 Tufts Associated Health Maintenance Organization Mass. HMO 85.8

Best Medicaid plans
Rank Plan Type Score
1.Fallon Community Health Plan Mass. HMO 90.0
2.Neighborhood Health Plan of Rhode Island R.I. HMO 88.7

Tufts Health Plans and Harvard Pilgrim Health Plans are both non-profit run companies. Their Ceo bonuses have not been a billion dollars.

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US centric viewpoints about hegemony

India, China, Russia, and Turkey have been warned off dealing with Iran, especially concerning oil deals and infrastucture. But Iraq is making deals right and left. I have not updated the Turkey/Kurdistan situation from last week because it has a fast changing life of its own.

Iraq and Iran signed an agreement to build pipelines for the transfer of Iraqi crude oil and oil products, the state-run Iran news network Saturday quoted the oil ministry as announcing.The 32-inch (81-centimetre) pipeline will bring crude from the southern Iraqi port of Basra to the southwestern Iranian port of Abadan. There will be a separately 16-inch one for oil products.

Iran and China to build a pair of enormous power plants, the Iraqi electricity minister said Tuesday. Word of the project prompted serious concerns among American military officials, who fear that Iranian commercial investments can mask military activities at a time of heightened tension with Iran. (I lost the link on this)

Renewal of UN mandate and Oil agreement is in jeopardy as part of some bargaining chip and soveriegnty issue.

The oil game in Iraq may be almost up. On September 29th, like a landlord serving notice, the government of Iraq announced that the next annual renewal of the United Nations Security Council mandate for a multinational force in Iraq — the only legal basis for a continuation of the American occupation — will be the last. That was, it seems, the first shoe to fall. The second may be an announcement terminating the little-noticed, but crucial companion Security Council mandate governing the disposition of Iraq’s oil revenues.

By December 31, 2008, according to Foreign Minister Hoshyar Zebari, the government of Iraq intends to have replaced the existing mandate for a multinational security force with a conventional bilateral security agreement with the United States, an agreement of the sort that Washington has with Kuwait, Saudi Arabia, and several other countries in the Middle East. The Security Council has always paired the annual renewal of its mandate for the multinational force with the renewal of a second mandate for the management of Iraqi oil revenues.

Turkey and Iran have a common problem:

Faced with rising rebel violence, Turkey says it is running out of options other than military action, with neither the United States nor Iraq doing enough to stamp out the rebel bases.
More than 37,000 people have been killed since 1984 when the PKK took up arms fighting for self-rule in Turkey’s mainly Kurdish southeast.

Uzbekistan and other Other Central Asian counties are reviewing commitments on US military bases and looking to other alliances.

Bolivia and Ecuador are reviewing commitments on US military bases and aid.

Poland is reviewing its commitment as a symbolic ally.

Mixed signals at least from the mid-east campaign.

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Move on to better times

Cactus had a post that advocated freer use of marijuana.

Here is another site that agrees.

Most people conclude that marijuana carries no special analgesic relief that cannot be addressed by other pharmaceuticals. The FDA did studies decades ago that support that conclusion, but some scientists assert that the studies had flaws which rendered them unreliable. The government refuses to do more studies despite the anecdotal evidence of exceptional pain relief in some circumstances — and despite the billions of dollars spent keeping marijuana illegal.

At some point, we have to do an honest cost-benefit analysis for criminalizing marijuana. We jail tens of thousands of people and create legal burdens for hundreds of thousands more every year for using or selling a weed that grows almost everywhere. It puts an equal burden on law enforcement, courts, and the penal system. In exchange, we get a dubious effect on usage for a drug that has the same addictive and intoxicating effects as alcohol.

Some will argue that marijuana serves as a gateway drug to more destructive substances, and that much is true. Many things act as gateways to harder drug use: abuse, poverty, boredom, and peer pressure, and especially alcohol, which is almost always a gateway to marijuana. Prohibition didn’t do much about that gateway drug, and decades of marijuana prohibition isn’t doing much for that one either — and marijuana might at least have a claim to be medicinal.

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Eating a metaphore

LA Times carries an article about the beloved Twinkie. The Twinkie plant that used to smell wonderful as traffic passed, but has been replaced by Nordstrom and Nieman Marcus and condos on top floors, forced to move to Maine, and now only assembled in the US. Ouch!

Although eight of the ingredients in the beloved little snack cake come from domestic corn and three from soybeans, there are others — including thiamine mononitrate — that come from petroleum. Chinese petroleum. Chinese refineries and Chinese factories. And there are other unexpected ingredients that are much harder to trace. So much for the great “All-American” snack food.

When you bite into a Twinkie, you are chewing on an international nexus of suppliers. Most of our processed foods — salad dressing, ice cream, meal-replacement drinks — are processed with foreign additives: essential ones, like B vitamins for fortifying flour and the preservative sorbic acid, as well as Malaysian or Indonesian palm oil products, European wheat gluten, Peruvian colorants, Chadian gums and Swiss niacin, made from Swiss water, Swiss air (nitrogen) and North Atlantic or Middle Eastern oil. It’s a nice contrast to recall that Champagne comes only from Champagne, France.

Like many other industries, food additives have been off-shored. No major domestic vitamin or sorbic acid manufacturers remain in the U.S. Our last vitamin C plant closed in 2005 — in fact, it closed as I was speaking to an employee about a tour — and most of our artificial colors and flavors come from abroad as well. Our chemical industry is rapidly dismantling its expensive domestic plants and either forming joint ventures with Chinese companies or simply buying chemicals from them. This leads to lower food and pharmaceutical prices, but perhaps at the cost of quality control.

How can you have quality control when you don’t even know where the ingredient is coming from? During my Twinkie research, I was particularly surprised that many American food additive “manufacturers” buy chemicals, especially vitamins, from distributors and do not know, or don’t ask, where they come from. The distributors usually sing the same song, as they often buy from importers, and the importers buy from exporters who — no surprise — are often not able or willing to identify all of their sources.

Even purses run $500 – 1500 at the new mall.

Update: The above post is a real story. The transfigured mall was just recently opened, although the condos on top are not finished yet. They are sold out, however. The twinkie factory moved to a newer plant in Maine, where less rent is required.

Spelling was corrected.

The economics of Twinkie production can be found here care of Greg Mankiw, Chapter 13, Harcourt Brace and Co., 1998.

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