FT, Wolfgang Munchau, Jan 1, 2008: "The decision by China Investment Corporation to take a $5bn stake in Morgan Stanley is a sign that China is not about to shift investments out of dollar assets into Euros." Why does Mr. Munchau think that China doesn't manage its currency risk separately from its equity risk?
WSJ, WALTER RUSSELL MEAD, of the CFR: "While U.S. import needs are projected to grow significantly, U.S. dependence on Persian Gulf energy is not, thanks largely to expected production increases in the Western Hemisphere and sub-Saharan Africa. U.S. energy imports from the Persian Gulf are expected to remain below 20% of total consumption. The oil market, of course, is global, and if something were to happen to the Middle Eastern supplies, prices would rise world-wide, and the U.S. economy would be seriously disrupted." Why does Mr. Mead think there's anything significant about the source of supply of oil as long as it's foreign. Except for the benefit of long-term contracts, which Mr. Mead doesn't mention, what is the difference to the US whether the price of imported oil is higher because of a disruption in the supply to the US as opposed to the disruption in the supply to others? After that disruption, except for long-term price contracts, each country will import whatever its demand at the new oil price, independent of who was importing from where before. When he refers to "dependence"on the Persion Gulf not growing, what dependents of any import does he mean? How does he manage to display in the second half of the quoted paragraph that the oil market is global, but then not draw the obvious conclusion from it?
NYTimes, Economics Columnist, DAVID LEONHARDT: " 'Overtreated,' by Shannon Brownlee, ... is my choice for the economics book of the year. ...I’m going with Ms. Brownlee’s book because it’s the best description I have yet read of a huge economic problem that we know how to solve — but is so often misunderstood. " This book is about overtreatment in medical situations in the US. Although Mr. Leonhardt is a economics columnist, he doesn't quite mention, or mention if the book mentions, the simple explanation that when people mostly don't spend their own money, they will consume too much. He does note that people don't realise that they are paying through public funds for the excess care, but people might very well realise it but use of public funds and private decisions based on private funds are different things. He doesn't seem to notice this simple but powerful idea.
WSJ quoting Ned Kelly who heads the financial services group at Carlyle: "But in mortgage banking, we're probably as close to the bottom as we're going to get." Is that the same as "we are at the bottom" since at some point we will be at zero distance from the bottom? Perhaps he means that we're as low as we are going to get. (ok, this one doesn't show flawed fundamental reasoning as he perhaps just misspoke, but I thought it was cute so I included it).
Does anyone think that basic economics should be required for graduation from high school?
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3 comments:
YOu argue that the reason Americans are overtreated is they are insured, thus they demand unnecessary care because somebody else is paying for it. It's a simple idea, but it's largely incorrect. Patient demand is not the central driver of unnecessary care. I address this question in my book, Overtreated.
Shannon Brownlee
Thank you for your commment.
I did not argue that Americans are overtreated because they are "insured". I was merely pointing out that this simple, obvious explanation wasn't mentioned by the reviewer. If wrong, that argument should have been addressed front and center by the reviewer and I am surprised that someone sophisticated didn't.
I am interested to read in your book how you can tell what drives unecessary care. For example, while patient demand might not drive it, patient refusal were they paying might result in less treatment. Would that be a situation of patient demand driving more care, in effect? In any event, I will read your work before speculating further about what might be in it.
Ms. Brownlee,
I have read some of your articles and everything you have written on overtreatment or that was written about your book on the New America Foundation website. If you do the simple thought experiment of imagining what diagnostic procedures and treatment doctors would order were patients paying their own money, you would find a very different outcome from the one you describe. Regarding analysing whether third party payment is a large cause, it doesn't matter that the doctor thinks of and suggests the CAT scan. If the patient were paying then the doctor might very well not suggest that CAT scan and even if suggested the patient might ask questions and decline in the end. A $1000 medical expense can easily cause someone to pay attention.
You say in the Atlantic Monthly, "When your doctor says you need a CT scan, you get one. When your doctor says you should go to the hospital, you go. Doctors, in effect, generate some of the demand for their services, so that even when there are large numbers of them per capita, they can keep their appointment books full. There is a growing consensus among health-care analysts that this perverse feature of medical economics is spurring a great deal of unnecessary care."
It is hard to imagine that this "perverse feature of medical economics" would be so were patients paying their own money, don't you think?
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