Things for which you have no words

I could not help correcting that. From the wonderful web of Warren Ellis, and I have never, in the short life of this small enterprise, more accurately tagged a post “uncategorised”:

Original BBC article here.

From the New England Journal of Medicine: the Shattuck Lecture on improving the health of the American people

While we wander through the mire of politicised health care reform (do not overlook the excellent clarity and critique offered by the Rolling Stone).

A young fresh fellow by the name of Steven Schroeder, MD has delivered the latest Shattuck Lecture:

We Can Do Better — Improving the Health of the American People

The United States spends more on health care than any other nation in the world, yet it ranks poorly on nearly every measure of health status. How can this be? What explains this apparent paradox?

The two-part answer is deceptively simple — first, the pathways to better health do not generally depend on better health care, and second, even in those instances in which health care is important, too many Americans do not receive it, receive it too late, or receive poor-quality care. In this lecture, I first summarize where the United States stands in international rankings of health status. Next, using the concept of determinants of premature death as a key measure of health status, I discuss pathways to improvement, emphasizing lessons learned from tobacco control and acknowledging the reality that better health (lower mortality and a higher level of functioning) cannot be achieved without paying greater attention to poor Americans. I conclude with speculations on why we have not focused on improving health in the United States and what it would take to make that happen.

It is very good – much like a lot of the criticisms of the US ’system’, it begins from a common perspective (way more money paid, way less health received in return).

He asks a few highly relevant questions, not the least being, Why Don’t Americans Focus on Factors That Can Improve Health?

I recommend it. Give it a read.

China freezes prices, inventing inflation that it can’t measure

In today’s International Herald Tribune I see China is moving to control inflation in a manner I never considered – because it’s kind of dumb:

The Chinese government on Wednesday froze prices that it controls for the rest of the year, in the latest sign of Beijing’s mounting concern over inflation.

…

“All current rules on goods and service prices controlled by the government should be strictly implemented. Any unauthorized price rise is strictly forbidden,” the statement said.

The ministries ordered local governments not to raise prices without the approval of the National Development and Reform Commission, the main planning agency.

The statement urged local governments to raise minimum wages as soon as possible to make up for inflation, which jumped to 6.5 percent in the year to August.

There was also this one, which blew my mind:

To keep a lid on pork prices over the holidays, the government would draw if necessary on the country’s pork reserves, the ministries said.

Pork reserves? Awesome.

So. Two gripes:

1. Imposing price ceilings creates unofficial markets

Price ceiling generate black markets. Rationing generates black markets. People’s willingness-to-pay cannot be mandated. If people out there are willing to pay $10 for an egg, and the government sets the price at $2, and you have an egg, what will you do? You’ll find that guy with the $10.

We maximise surplus, and in a world of shortages, that means producers extracting rent from consumers.

Economic implication: China’s inflation will not be halted, and it will not go away. What it will do is fall below the radar of official markets, and will become a black market problem, rather than an inflation problem. Will it help Chinese households buy stuff? No. It will be harder to get, now, because transactions will also be illegal, meaning bribes – in fact driving the price even higher still. It also means that the poor (a) have less access to goods and services, because they aren’t networked, and (b) when they do, they’ll pay higher bribes, because they aren’t ‘connected’.

2. Forcing a minimum wage increase generates cost-push inflation

Whether I like the idea or not, it is true that increasing a minimum wage increases the cost of production, when enough of the workforce receive only the minimum wage (I’ll assume many millions of the Chinese workforce do). Cost-push inflation occurs when prices are being raised in response to increasing wage pressures – but those cost-pushed price increases put us back where we were, just with higher wages and prices (i.e. higher inflation).

Economic implication: inflation will/may/should/might be made even worse.

I really need an inflation Tag.

Economist warns of US housing downturn. I can guarantee it

Today’s Financial Times has this piece:

There will be fresh economic shocks on the scale of the current credit squeeze if US house prices continue to fall, one of the country’s leading housing experts warned on Wednesday.

“The decline in house prices stands to create future dislocations, like the credit crisis we have just seen,” Robert Shiller, a Yale economist, told a Senate panel on Wednesday.

There were fresh signs of weakness ahead for the housing sector as figures showed applications for building permits fell to a 12-year-low.

Almost all of our recent wealth, not to mention the very reason why common sense and risk aversion went out the window over the last decade, has been appreciating house values. With house prices (and, by extension, home equity into which we could tap) ever-increasing, even the worst candidates could secure, and maintain, a mortgage.

The trouble is that the cliff isn’t under those clouds, and the second Wile. E. Coyote looks down, so does he go.

Here’s something picked up last week from the blog the Big Picture:

My first-year Eco 1 students could follow this, so surely the media can. For all that we’ve have previous down-turns, vacancy rates and inventories were not what they are. House prices are not going to stay high, because there is far greater supply, while (if/as we enter a recession) far less demand. Rental property vacancies can expect to be squeezed no end, in the next year or so. Banks should probably just plan on becoming landlords, with all those houses they took back but aren’t trying to sell.

Meanwhile, oil is comfortable above USD82 a barrel, it seems:

Crude oil on Wednesday jumped to a fresh all-time of $82.51 after a larger-than-expected US crude oil inventories decline last week.

Worries about a potential tropical storm heading to the oil-rich Gulf of Mexico, some investors covering previous bearish bets and the US Federal Reserve interest rate cut also helped to push up prices.

In New York, Nymex October West Texas Intermediate rose to an intraday record high of $82.51 a barrel. It later was trading 95 cents higher at $82.46 a barrel.

In London, ICE November Brent rose to $78.49 a barrel and later traded 41 cents higher at $78.0 a barrel.

This is, of course, while the affordability of oil declines with the US dollar (Fred Thompson’s great idea of drilling in the Everglades notwithstanding).

So you, living out there in your exurbs: don’t even think of returning to New York City, you bastards. My rent is high enough already. This is apropos vacancy rates. Our cities can look forward to seeing more and more of the people for whom those cities weren’t good enough changing their minds, returning and looking for space. For the people still there, this will not come as good news.

Meanwhile, we still see more of the same:

”Overall, the figures support the idea that inflation is much less of a concern than it was six months ago,” said Paul Ashworth, an economist at Capital Economics.

”The Fed is lucky that inflation is beginning to behave itself again, because the housing market is in desperate need of some monetary stimulus,” he added.

I don’t care about how much of a concern inflation was six months ago – how about six months from now? It isn’t “beginning to behave itself again”, just because it’s currently doing what we like. One might as well relax in Baghdad because militias are turning on Al Qaeda instead of blowing us to hell. Nothing’s behaving itself anymore, and most likely won’t for a while. Now is the time to load up and prepare.