Healthcare Economics in 10 Words

Doron Levin sums up the entire problem and hints at a solution to our nation's healthcare debate in the brilliant title to his latest column. Here is the title:

"UAW Might Be Stingy With Viagra Under New GM Deal"

In other words, having to actually pay their own bills, the union might actually be discerning about its healthcare expenditures. Hmmm.

SARBOX Makes Us Poorer, Episode 37

The US capital markets lose again. When will we do something about Sarbanes-Oxley? Rudy talked about this when his candidacy was just a glimmer in his eye, why isn't he talking about it now?

Night of the Living Politically Undead

I can think of few things scarier than what this headline describes..."Lott Blames Both Parties For Senate Gridlock, Seeks Deals With Democrats". Trent Lott is a zombie from a bad horror movie - he's been shot, run over, and has an axe sticking out of head, but he's still alive and coming at us. Scary.

Bush Knows What's In A Name

Someday when historians (real historians, not people like this) write the history of George W. Bush's presidency, they will note that he was ferociously besieged with petty indictments of no consequence that were in many cases completely false. This week we have two such instances. One is here. The other is Bush's reference to "Burma" in his UN speech. A gaffe? According to the MSM, yes, absolutely a horrible gaffe - further evidence of Bush's stupidity.

Well, I have been to the place. I have seen the refugee camps on the Thai side of the border that spawl for miles (imagine a third world Southern California, like what you see when you fly into LAX, just with mud huts instead of concrete or steel structures) inhabited by people escaping the SLORC. So count me with this guy. Bush is right. It's BURMA. Myanmar is the phony alternate universe of a cruel gang of loathsome men.

In reality, calling it Burma and not Myanmar shows Bush's political savvy. "Burma" is a politically savvy poke in the eye to the bad guys and a clever hint to the good folks that you are on their side - like calling the city in Northern Ireland Derry and not Londonderry, or refusing to call Vietnam's main city Ho Chi Minh City rather than Saigon. I learned this lesson well when, in 1987, as I, an American, walked the streets of what was officially "Leningrad" talking with a young man, a university student perhaps just 3 or 4 years older than me, who I had just met. I told him that I thought Leningrad was beautiful. He corrected me. "This is St. Petersburg, and, yes, it is beautiful."

The nitwits who insist on "Myanmar" are revealing either their ignorance or their allegiance to the wrong side.

Columbia Law and Business Deans Do Damage Control

In this post, I referred to how balkanized alumni giving is at Columbia. It is a refelction that few Columbia alums feel an allegiance to Columbia University as a whole, but only to their school. I imagine this is the case at many schools, particularly Ivy League schools, but I have a sense that it is more pronounced at Columbia. (This is not scientific, but I have gleaned this from my interaction with other people and my assessment of their loyalties to their schools.)

Two of the prestigous graduate programs at Columbia, business and law, typify this balkanization. They produce graduates who go on to stunning success and have the capacity to give, yet most don't feel a true kinship with Columbia. During the Bollinger years especially, it has been a key task of the leaders of these schools to keep alumni interested in giving even as the greater institution appears decreasingly mature. No doubt Dean Hubbard and Dean Schizer had this in mind in feeling the need to express their disagreement with Bollinger's decision to invite Ahmadinejad to campus.

NYC: Surf the Net While You Are Stranded!

It's so obvious. When a rain storm floods the subways and strands thousands of commuters, the first order of business simply has to be wireless Internet access.

One Loonie = One Greenback

The Canadian loonie has reached parity with the US dollar. Check out this video on how Canadians are responding. It is a heartening video. It shows you that people are people no matter where you go - Canadian consumers, just like us here south of the border, like a good bargain; and, Canadian manufacturers, just like our manufacturers, gripe and moan about their waning competitiveness and call for mercantilist currency manipulations.

Another big plus. Our great healthcare is now that much cheaper for Canadians, including Liberal MPs, who come here for surgeries that they can't get or would have to wait for in Canada.

Morningside Hearts Mahmoud

I wrote a while back that University President Lee Bollinger was destroying relations with Columbia's core group of alumni donors.


"The real money that flows into Columbia comes from elderly successful men who attended Columbia in the 1940s and 50s and who are now departing the scene. These men are usually up from nothing New Yorkers who credit their Columbia education/experience for their success in life and have a fond memories of the university as it was during that time. Any suggestion to this generation of men that Columbia is not what it used to be (and it decidedly is not) in terms of institutional principles will be damaging. Scenes of spoiled brat twenty year-olds running amok and acting like bullies will make your typical big money Columbia alumnus cringe. Rich Jewish Columbia alums have already lost faith in general due to the university's love affair with radical Palestinianism. Will Bollinger now preside over the disillusionment of that core group of successful alumni from the 40s and 50s with his solicitude the of the mindless, immature radicals running herd in Morningside Heights? I think he will. We'll see. "


Now Columbia is going to let Iranian President Mahmoud Ahmadinejad speak during his visit to the United Nations next week. The University already tried to pull off an Ahmadinejad visit last time around, but Bollinger was able to squeak out of it. This time he is not squeaking out of it, but is promising to be real tough on ole' Mahmoud. But back to those rich Jewish alums with lots of money. Will they like Columbia's acceptance of the guy who wants to wipe Israel off the map? I'm not so sure. But maybe that is Bollinger's point, he is sublimating financial pragmatism in favor of free and open discourse. I guess that is a reasonable way to view it, but I simply know my alma mater too well. Columbia simply loves this guy (Mahmoud that is). He bashes Israel, funds terrorists who in the eyes of your typical Columbian are a noble resistance movement, and he likes to stick pins in George W. Bush and the US in general. Ahmadinejad is Columbia's kinda guy. (They would like him to maybe tone down the theocratic homosexual-killing, female-oppressing stuff, but that is no deal-breaker.)

Anyway, should make for an interesting Monday here in Transfat-Free America.

Can't the WSJ Get a Real (and Good) Economist to Write Op-Eds?

Wait a second. I thought that supply-side theory was bunk, the stuff of quacks, charlatanic, completely discredited by mainstream economics. Then what on earth is a Nobel laureate economist doing claiming that "supply-side reduction in marginal tax rates" are one of only two "macroeconomic policy changes...that have really mattered." This is insanity. Let's get some real economists in here who can set this Lucas guy straight. How about some other Nobelists. Yeah, bring in the big guns. Mundell, Prescott, Vernon Smith, Buchanan, and Becker. Maybe they can confirm that the economics profession considers supply-side theory pure hogwash and a big con job.

HillaryCare Part Deux

HillaryCare II has hit the stores. The WSJ opines here. I have nothing new to add beyond what I said here about what healthcare insurance in New York state looks like.

All Hail Helicopter Ben!

Blogging has been light lately because I've been trying to figure out how to make money in this market. Now however, thanks to "Helicopter Ben" I don't have to! The masseuse is coming to the office at 11 AM, beers and lobster rolls for lunch, and some heavy weekend planning this afternoon. Go Ben Go!

Again, I Am Way Ahead of the Curve (Pat, Pat, Pat)

One year, four months and two days after I introduced it to the blogosphere (and talked about it again and again and again and again and again), Prof. Mankiw turns our attention to what I would say is/are the leading advocates of free market principles in the healthcare policy debate today. Better late than never Prof. Mankiw.

French Business Logic

This statement tells you all you need to know about the dynamism of the French economy:

"Why constrain companies to make a choice which is not necessary when thesame effect can be achieved with more regulation?" GDF's director of strategyDidier Sire told journalists in Brussels." (Full article here.)

Got that? Allowing businesses to make choices is constraining.

Ah Yes, That Quaint Old Man In Omaha

I don't know if the world's third richest man has the time or inclination to feel schadenfreude, but if he does, no doubt Mr. Buffett is enjoying this item in Bloomberg today. (See here to know why.)

"Sept. 13 (Bloomberg) -- Goldman Sachs Group Inc.'s Global Alpha hedge fund fell 22.5 percent in August, its biggest monthly decline, on losses from currency and stock trades, according to an update sent to investors.
The fund, managed by Mark Carhart and Raymond Iwanowski, has dropped by a third in 2007 and 44 percent from its peak in March 2006. Investors notified New York-based Goldman last month that they plan to withdraw $1.6 billion from the fund, or almost a fifth of the assets as of July 31. "

Ouch. Global Alpha is toast. There is no way they will get back over their high water mark, so what is the point of keeping the fund going? Carhart and Iwanowski are toast too. Sadly, those two will walk away very rich men for, in the parlance of Nassim Nicholas Taleb, "spending dollars to make pennies" or "picking up nickels in front of a steamroller." All too often a hot hedge fund manager combines either skill or luck with leverage for a couple of years, to generate big returns and big pay for themsleves. They attract more and more assets and to keep the balls in the air they make increasingly risky trades and use increasing leverage. And when it all blows up in their face and massive amounts of investor capital is destroyed, the managers are slightly disgraced but rich nonetheless, and very likely already thinking about their comeback. Unfortunately in this business, memories are short and fantastic failure is hardly a career destroyer. Carhart, for his part, can always return to academia and live out his days in comfort telling anyone who will listen (and students tend to listen because they've already paid and want a good grade) that there was nothing wrong with his models - that it was the market that was screwed up.

UPDATE: Global Alpha has made the ailing/watch list over at the Hedge Fund Implode-o-meter site.

UPPDATE: Another Buffett centi-millionaire crawls out the woodwork to bestow some major largesse. Just another example of rapacious capitalism propelling society ever downward.

On Rudy

After the last Republican debate, the consensus of the punditry, and even a few of those 'man on the street' views, was that Rudy is doing pretty good and people like him, but...does he have to talk about New York City so damn often. I get the sentiment. New Yorkers are, for the most part, annoying. We think that we are smarter, cooler, richer, better looking, and all-round more important than everybody else. Also, we tend to cling to the delusion that as goes NYC so goes the nation (a belief we developed during the 19th and early 20th centuries when it was actually true). But let's get a couple things straight. First the obvious, Rudy's record is 100% New York City, so if he's talking about qualifications, he's gonna talk NYC. And he should, because his record here was sensational. As Steve Malanga wrote recently (perhaps several months too early) in City Journal, it is easy to forget just how much of an astounding turnaround Rudy pulled off here in the Big Apple. Finally, let me tell you that Rudy is not displaying that NYC arrogance that I characterize above. When Rudy was mayor, he was despised by those people. The elites who run all of New York's snootier institutions (principally the media), and who are quick to want to tell the poor slobs in fly-over country how they ought to live, despised Rudy. They hated him. And all the whacko losers, who we now call "the netroots", hated him too. I lived right on Sixth Avenue and every year my balcony was a front row seat for the Halloween parade, arguably NYC's silver medal freak show extravagaza (gold to Gay Pride of course). Before George W. Bush came along, you would have thought the sole purpose of this event was to demonize Rudy.

The crazies and snooties hated Rudy because he was Outer Borough, he was row house, he was old-school, hard work, immigrant New York. He wasn't avant-garde Soho or U Club New York.
So I ask you my fellow countrymen, do not mistake Rudy's excessive talk of New York City as yet another manifestation of our oftentimes arrogance. Take it as pride in a truly remarkable record of a regular guy made good.

You Want Subprime? Russia Is Subprime.

More on that, um, er, safe haven Russia.

I have been loathe to share my views on investing in Russia for fear of inviting accusations of prejudice, but oh well, here goes nothing...

From Donny Baseball's Rules of Investing, Rule #12: Never, ever, ever (and I mean never) invest in Russia.

More Candid Musings from Michael Lewis

As I was reading Holman Jenkins's column this AM on the way to work, I said to myself, "Self, you gotta blog this column and highlight this awesome bit about Jim Press leaving Toyota." I get into the office and do some stuff and before I get a chance, Don Luskin excerpts the exact same bit. Seriously, check it out.

But fortunately there is other nice blogging material out there. Indeed, hot on the heels after reminding us that this whole subprime mess is what happens when you lend money to poor people, Michael Lewis today offers some more candid lessons on capitalism. You shouldn't need a taster to want to read Lewis's stuff but here are is my distillation of Lewis's five lessons:

1) Let Private Equity titans have more votes.
2) Congress is Dumb.
3) Steve Schwartzman is a freakin' Rommel, let him "eat what he kills"!
4&5) Let the Big Dogs of Capitalism run.

Not sure about #1, but I'm fully behind 2-5.

Michael Jackson (No, not that Michael Jackson), RIP

These days, when a man lives only to 65 we ought to lament that he died too young. But if that man managed to make a living for over 30 years drinking beer all over the world, we just might be tempted to say that it was too good a gig to last much past 65. Michael Jackson, the Beer Hunter, has died. God speed to that Great Beer Hall in the Sky, Mr. Jackson.

My 9-11 Remembrance

I actually got a head start on recollecting memories of 9-11 on Sunday night. The Giants played Dallas in their NFL season opener on Sunday night. As I watched, all I could think about was Monday night, September 10, 2001. The Giants opened their season that night on Monday Night Football against the Denver Broncos. As we were wont to do, my friends and I gathered at a suitable watering hole to eat, drink, and cheer the Giants on. Five of us made it to Reservoir, down on University, that night. One of our gang was missing. It was Mark. I called him at home. "Where the hell are you? We're all here at the bar," I said. "I've got to be in early tomorrow, I gotta get a jump on a busy week," (or something to that effect) he told me. I think I might have joshingly questioned his manhood or something to that effect, but we promised to catch up soon and said goodbye. Those were the last words I would ever speak to the dearest of friends and in roughly eleven more hours I would witness his slaughter.

The Giants played Denver tough and were either leading or in the game well into the second half. Had they been getting blown out I might have gone home early and with fewer beers in me. But as it happened we all stayed, watched and drank. So I got to bed a little later than usual. That and the beers rendered me a little sluggish the next morning, so I didn't rush to get out of the apartment to be at my desk at 8 am like I normally was. Had I been on time I would have seen American Flight 11 slam into the North Tower from my office at the World Financial Center right across the street from the WTC. I'm glad I missed it, many of my former colleagues still have nightmares, particularly about the jumpers. As it happened, I walked right out of my apartment building at about 8:45 into the middle of Sixth Avenue where I joined hundreds of stunned NYers staring south at the burning North Tower. I thought of Mark, but I was relieved because I knew he worked in the South Tower. Obviously I had that thought sometime before 9:03 am. At 9:03 I saw it. I figured it was roughly two-thirds up the height of the Tower and I knew Mark worked somewhere up in the 80s. Quick, two-thirds of 105 floors is 69 or 70...my God! Standing in a daze in the middle of Sixth Avenue (in the middle of traffic) I wondered whether I just witnessed the slaughter of my friend or whether he got out of there when the first plane hit. I snapped out of it to formulate my own plan. The lovely Mrs. Baseball was 9 months pregnant with our first child and she had a doctor's appointment at 10 am that day on the Upper East Side. Let's just get moving toward that doctor's office, I thought. In the cab ride up I tried to call anybody who might have word of Mark, no luck, just voicemail. We went through our medical examination uneasily oblivious to what happened during that hour. As we left the doctor's office a bike messenger delivering stuff to the office told us that the two towers were down and that people had been jumping. I only half believed him. Fortunately my wife's dad had an apartment on the Upper East Side near our doctor, so we decided to ride out what was going to be a horrible day there. Aside from the brief period of time that I was paying attention to what the doctor said about the health of my unborn child, all I thought about was Mark. Did he make it out? If only he met us all out last night, would he have been running late like me? These thoughts dogged me. We got to my father-in-law's place and switched on the TV. I have no idea how long we watched, it could have been hours. And then it came, my most enduring memory of that day. Ashleigh Banfield, the MSNBC reporter, was standing in the middle of some street downtown reporting from the scene. She was covered in dust and she reached down to pick up a pile of debris from the street. She stood up with a handful of that debris and the camera zoomed in and there it was, as clear as day, and my heart dropped into my stomach. In Banfield's hand, unmistakable and still visibly burning was a sheet of Keefe, Bruyette & Woods letterhead. KBW was where Mark worked. Logically this told me nothing, but I felt at that very moment like it told me everything. I had been dogged since 9 am that morning with questions. That burning piece of paper clarified it all. I turned off the TV and wept.

If This Is a Flight to Quality...The World Is Upside Down

Sorry that blogging has been light, very busy these days. Anyway...while I have generally been of the opinion that the subprime mess and credit panic is way overblown, I must say that if Russia is viewed as a financial safe-haven, well, then we could have real problems.

Good: The Walkback from RomneyCare is Complete

I pointed out a while back that you could have predicted what Mitt Romney's healthcare policy proposals would look like, because they were contained in a book written by two of his economic advisors. While I was enjoying vacation, the Romney campaign came out with their health care policy vision, and, yup, it looks just like what Hubbard, Cogan, and Kessler laid out in the book, and Hubbard was on cable news outlining the plan. It is a strong, free market plan and the right vision to combat the creeping to galloping socialism that candidates on the other side are touting. You can even check out a not-so snazzy PowerPoint presentation here.