Wednesday, September 30, 2009
"I understand introducing tort reform for medical malpractice is an important issue for you (hell me too, my [relative hates] the high premiums for practicing [specialty])
Let me give you a little background, however, on how exactly doctors are held liable / what the damages can be
Most doctors are sued under common law negligence - to prove negligence you need to show four things the doctor (2) breached his (1) duty which (3) caused (4) damage to the patient and show all those elements by a preponderance of the evidence.
In terms of element 2, the doctor only breaches his duty if he violates the custom of the profession, not if a bad result occurs. Obviously, it is going to seem very likely that something did go wrong if a poor result occurs but that is hindsight bias for you. So, honestly, as long as accepted procedure is followed, doctors cannot be held liable. Further, the injury must have been caused by the doctor (how do we know it wasn't some infection or some other injury?). If a patient comes back three years after a surgery claiming malpractice, she is going to be hard pressed to prove that something else didn't happen in the meantime that is a more direct result of her injury. Finally, I know we see huge awards by jury trials, but punitive damages are rarely given out except in cases of gross and wanton negligence. I doubt that many malpractice cases are results of "gross" negligence. More likely, something went wrong and people want answers. Damages are limited to lost wages, pain and suffering (obviously, this could be very high, but they have to prove the pain and suffering). While lost wages seem like they can aggregate quickly, if an accountant loses a finger due to negligence of a doctor, he can still function at his job and he hasn't really lost the ability to be an accountant (his damages would likely be low).
So, in reality, malpractice is not really a ticket to fortune for the patients, but a way to "make them whole" which is exactly the goal of tort law. Tort law is concerned about corrective justice, and there really is no other way than money to make up for horrific injuries and accidents. There are some states which cap the damages award. But if I am a skilled laborer and I lose the use of my arm and still have many years left in my working life, that cap really won't do me much good.
Perhaps some other ideas for the legislature to consider are to eliminate jury trials for malpractice claims. Juries are always going to be more sympathetic to the victim than the well educated doctor and deep pockets of the insurance company. A judge with long experience will be able to weed out the phony from the legitimate claims and be less biased. Another idea can be to educate doctors more thoroughly on personal injury law to make them more aware of what their potential liabilities are. Finally, the local legislatures could create a specialized court (like traffic court) to provide a forum where these claims can be heard, saving some time and expense that would be wasted during a general trial that needs to educate the judge and doctor on extremely complicated medical knowledge.
Or, the legislature could just make it more difficult for doctors to breach their duty - that would create a "barrier to entry" so many claims would be barred from being heard. Remember, negligence is common judge made law - the legislature can preempt at any time.
Anyway, long message but I hope this helps"
Tuesday, September 29, 2009
An opinion piece on why France wants to stop using GDP as a measure of growth
The best part of healthcare reform is almost certainly the set of proposals for tort reform. Medical malpractice lawsuits cost the nation on the order of $200 Billion per year in defensive testing.
Friday, September 25, 2009
The rise in American inequality has been exaggerated both in magnitude and timing. Commentators lament the large gap between the growth rates of real median household income and of private sector productivity. This paper shows that a conceptually consistent measure of this growth gap over 1979 to 2007 is only one-tenth of the conventional measure. Further, the timing of the rise of inequality is often misunderstood. By some measures inequality stopped growing after 2000 and by others inequality has not grown since 1993. This cessation of inequality's secular rise in 2000 is evident from the growth of Census mean vs. median income, and in the income share of the top one percent of the income distribution. The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986. Further, despite a transient decline in labor's income share in 2000-06, by mid-2009 labor's share had returned virtually to the same value as in 1983, 1991, and 2001.
Recent contributions in the inequality literature have raised questions about previous research on skill-biased technical change and the managerial power of CEOs. Directly supporting our theme of prior exaggeration of the rise of inequality is new research showing that price indexes for the poor rise more slowly than for the rich, causing most empirical measures of inequality to overstate the growth of real income of the rich vs. the poor. Further, as much as two-thirds of the post-1980 increase in the college wage premium disappears when allowance is made for the faster rise in the cost of living in cities where the college educated congregate and for the lower quality of housing in those cities. A continuing tendency for life expectancy to increase faster among the rich than among the poor reflects the joint impact of education on both economic and health outcomes, some of which are driven by the behavioral choices of the less educated.
Thursday, September 24, 2009
of his solution (which was shared with other economists) was to have
the Federal Reserve - what he liked to call the "Big Bank" - step into
the breach and act as a lender of last resort to firms under siege. By
throwing lines of liquidity to foundering firms, the Federal Reserve
could break the cycle and stabilize the financial system. It failed to
do so during the Great Depression, when it stood by and let a banking
crisis spiral out of control. This time, under the leadership of Ben
Bernanke - like Minsky, a scholar of the Depression - it took a very
different approach, becoming a lender of last resort to everything
from hedge funds to investment banks to money market funds.
Minsky's other solution, however, was considerably more radical and
less palatable politically. The preferred mainstream tactic for
pulling the economy out of a crisis was - and is - based on the
Keynesian notion of "priming the pump" by sending money that will
employ lots of high-skilled, unionized labor - by building a new
high-speed train line, for example.
Minsky, however, argued for a "bubble-up" approach, sending money to
the poor and unskilled first. The government - or what he liked to
call "Big Government" - should become the "employer of last resort,"
he said, offering a job to anyone who wanted one at a set minimum
wage. It would be paid to workers who would supply child care, clean
streets, and provide services that would give taxpayers a visible
return on their dollars. In being available to everyone, it would be
even more ambitious than the New Deal, sharply reducing the welfare
rolls by guaranteeing a job for anyone who was able to work. Such a
program would not only help the poor and unskilled, he believed, but
would put a floor beneath everyone else's wages too, preventing
salaries of more skilled workers from falling too precipitously, and
sending benefits up the socioeconomic ladder.
While economists may be acknowledging some of Minsky's points on
financial instability, it's safe to say that even liberal policymakers
are still a long way from thinking about such an expanded role for the
American government. If nothing else, an expensive full-employment
program would veer far too close to socialism for the comfort of
politicians. For his part, Wray thinks that the critics are apt to
misunderstand Minsky. "He saw these ideas as perfectly consistent with
capitalism," says Wray. "They would make capitalism better."
So, my take on it:
Norman Borlaug died recently. Here's to an innovative and courageous man.
Saw a point somewhere the other day that I thought was worth mentioning. Wish I could remember where so I can assign proper credit, but the point still stands.
One of the more interesting components of the mandatory insurance rule is that it creates tremendous intergenerational inequality. Young people who choose not to purchase healthcare now have to purchase it, which means they're subsidizing older, sicker people. At the rate of fiscal irresponsibility that we now face, it's a safe likelihood that current adults are already setting up younger people (our generation) for a major fall - in other words, we're going to have to pay for the excesses of our parents.
It's exceedingly unlikely that a big government program like this is going to be affordable when young people get to the point where they need the healthcare. In other words, young people have to pay for older people when nobody will be paying for them later on.
The idea that a legislature can change the rules of succession for
political posts depending on who's in power is a scary, scary one. I,
for one, have no intention of ever voting for the state
representatives who switched their opinions to suit their party (45
Democrats and 13 Republicans in the House, by the way - not quite sure
how many in the Senate, but I intend researching that ASAP - or just
voting against every incumbent in the legislature), and I hope my
other Massachusetts-living friends will follow suit... but I really
hope somebody sues and wins. The Democratic portion of the
legislature, especially, has been deplorably unethical in this.
As a side note, while Patrick has been an awful governor, he only had
two choices in this that were reasonably fair. Pick a Republican or
Moderate to fill the seat, which he was never going to do, or pick a
Kennedy aide, because Kennedy was who the voters chose. At least
that's what he did.
Saturday, September 12, 2009
If we've learned anything about economics this century, it's that tariffs to protect jobs don't protect jobs. He again shows that he is far more the politician than the economist.
(protecting labor conditions, protecting the environment, those are different, because you're willing to sacrifice some jobs for those)
Wednesday, September 9, 2009
It's for personal use. Can't figure out how to make it a private post. I've relocated it, don't worry about it.
And no, if you filled out something, you won't see what I do with it (:
for my benefit:
My Stock Selector
Monday, September 7, 2009
If done before primaries, it forces politicians to lay out to the public exactly what is important to them. Understanding that putting up 15% of wealth is hard for poor people, you can make a paycheck appropriate to the condition. Poor people will still be able to save for retirement (while caring about the money they put up because its a lot for them), while rich people will care about the money they put up because a paycheck can't replenish what they put up.
--The other idea would be jungle primaries. Instead of all the gerrymandering, each state gets X house reps and 2 senators, and everyone votes for X house reps and 2 senators, and the X house reps and 2 senators receiving the highest number of votes in a state go to the white house. I understand the benefits of the electoral college (too much strength in the hands of the majority constitutes a tyranny over minorities, de Tocqueville style), but gerrymandering leads to an even worse result.
It may be a civil liberties infraction, so I suppose that it may not work, but something along the lines of disciplining school age children who aren't in school during school hours would work wonders. The only problem is that it sets up a dangerous precedent. If an alternative could be found that would be less dangerous, that would work.
Another idea would allow children to get a driver's license earlier if they get good grades in school. Similarly, maybe you're only allowed to drink alcohol at 21 if you have a HS diploma, otherwise you have to wait til 23.
The S+P has returned 4.5% annually with dividends over the last 8 years… that’s peak to trough, though, so it's not apples to apples.
In other words, we’re still growing well, and comparing comparable parts of business cycles somewhat reveals that. It doesn’t help that last boom was tech and this one was energy, because the same stocks didn’t do well. It’s not perfect (can’t verify his numbers well)…
But given that peak P/Es were MUCH higher in prior peak than current one (which isn’t the economy, it's sentiment regarding our future growth, which tends to be fickle and rarely correct), we’ve made much more progress than expected.
The other point to be made is that we just fought a tremendously wasteful war and still came out ahead. War arguably stimulates an economy with a shortage of jobs and too much labor, but we certainly weren't in that situation in 2001 and 2002. (I say arguably because it could be the Hayek-style parable of the broken window wastefulness, where everyone "seems" to benefit but it's actually just redistribution from the US taxpayer or future US taxpayer to the people involved in war). The fact that we still grew is impressive, but I suppose it is possible that the fact that the war was financed on debt may make this irrelevant - we haven't paid yet, so it won't have dragged on the economy yet.
It won’t affect oil prices (oil is a global commodity, natural gas is much more regional due to transportation constraints), so gasoline prices would still go way up. But it would make electricity prices much easier, which would significantly help reduce inflation, and it would also improve the state of US exports, because I don’t believe the rest of the world has quite the same natural gas resources we do and it's certainly more expensive elsewhere.
Oil and coal will still go up because of international demand, and foreign natural gas may still increase a lot. But the US may see a lot of benefit in terms of the trade deficit, etc, because of our tremendous resources and the incredible improvements in horizontal gas drilling that have already hit 40% of natural gas wells in the US and have given us such an overabundance of natural gas. This would have benefits on US carbon emissions, too, because natural gas emits less than oil or coal.
For more on natural gas, see here.
FDIC bailout. Don't know if it'll come, but it's a consideration at this point...
The insidious recalculation of what it means to successfully engage Iran.
Our accounting standards are about to get more European. This means they'll be more principles based, instead of more rules based. It's the difference between "Be home at a reasonable hour" or "Be home by 11 unless you a) get in a car crash, b) need to be a good samaritan, c) need to finish your homework, d)get a flat tire, e) witness a crime, f) call and specifically ask permission". Does anyone really wanna see our executives have even more leeway in their accounting?
At least 50% of the disparity in test scores is based on differences in parents' IQ, rather than wealth disparities. For complicated mathematical reasons expounded in the comments, this actually understates the amount parents' IQ determines children's test scores.
Concerns with an Obama healthcare adviser.
Prosecuting the CIA is foolish
Governments messing with kindergartens. Why I don't want the government regulating healthcare too much.
Strong evidence of insider trading inside investment banks. This needs to be cracked down on.
Some thoughts on challenges with hybrids. Not sure if his analysis is missing something, just skimmed the article quickly.
Obama not learning from Clinton. I feel a little vindicated for saying 6 months ago that I thought Obama's policy goals would cost Democrats power in 2 to 4 years.
Soviet style education not cutting it.
hindrances to reform: primary care doctors are mad
consumer driven care. Again, only skimmed this one.
How LBJ would pass the bill. Tongue in cheek.
Credit card relief, phase one, in effect
worriers die younger cuz they smoke more
Gawande on reforming the health system outside of legislation
Mankiw on trusting government vs competition
We're driving our children to injury! the little league arms race.
Becker on healthcare. Brilliant as usual.
a problem with waxman-markey
Gunning for google. Stupidly, in my view - Tech changes too fast to really have a monopoly for long...
Arrow, the brilliant health economist, points out that costs are going up because technology is getting better, not cuz we're getting less efficient
Sunday, September 6, 2009
Banking is a job which very few people are good at, there are massive differences in productivity between the good and the bad, and it's not always clear who will be good and who will be bad moving forward - which lends itself to the "keeping up with the Joneses" effect of bad bankers being overpaid.
I don't think these bad bankers deserve the money they're getting... but regulating a bank's ability to pay its employees is a VERY dangerous thing to do for two reasons. Firstly, it throws out the good with the bad, so good bankers can't be paid (which doesn't seem fair). Secondly and more importantly, a major reason for this recession was that people at banks didn't know what they were doing. Making it less attractive for good bankers to stay in the industry raises the risk that this happens again.
Another classic example of where an unfair situation (inflated banker pay) shouldn't be addressed by government, who can only make it worse.
One interesting alternative that I haven't thought through much but could be promising - if you're going to limit banker pay anyway, it may be better to limit the company to paying its workers an AVERAGE of some number, but leave the individual allocation up to the bank. For every employee, a bank may be able to give out a maximum of an additional $X, without specifying the max any individual can get. A great banker will get paid but everyone else doesn't get inflated. It's the bank version of the NFL salary cap.
Saturday, September 5, 2009
Obama proposes steps to facilitate saving
I support parts of the measure - like letting people put the money from time they're on vacation into their 401-k - but giving people tax refunds in the form of savings bonds will only prolong the government spending binge. It WILL mitigate inflation, in the short term, which would be good, but makes the inevitable government spending crash worse by delaying it.