Would you believe it?! We, the public, pay an estimated $3.5 billion per year for medicine because drug manufactures such as Merck pay other companies NOT to put generic drugs on the market. Sounds like a monopolistic practice to me! See <a href=”http://www.politico.com/story/2012/12/supreme-court-generic-drugs-pay-for-delay-84810.html?hp=r9>politico.com’s article on this subject</a> For general context, see Joseph Stiglitz’s book, The Price of Inequality.
Politics
Check out gapminder.org, a wonderful statistics visualization site. For example, there is this: CO2 emissions since 1820
CO2 emissions in 2000 by country
If you go to the link above, you can animate this image, seeing how the per country CO2 changes over the period 1820-2000. The area of the circle is proportional to the country’s annual CO2 emission per capita. Mouse over circle to see name of country. Gapminder.org has a wealth of great databases and visualizations thereof.
Note. I am so impressed with Gapminder.org — their mission and their effectiveness — that I would like draw your attention to this quote:
Building a fact-based world view
Gapminder is a non-profit foundation based in Stockholm. Our goal is to replace devastating myths with a fact-based world view. Our method is to make data easy to understand. We are dedicated to innovate and spread new methods to make global development understandable, free of charge, without advertising. We want to let teachers, journalists and everyone else continue to freely use our tools, videos and presentations.
Your contribution will help us in our efforts to explain how the world is changing. Your generosity will strengthen our independence.
Help us achieve a fact-based understanding of the world. Support our work by making a donation today.
I am renouncing political discourse on this blog. It is a futile gnashing of teeth, full of sound and fury, signifying nothing. As the Sage said, “when the world has gone mad, the wise man tends his garden.”
PS. Gnashing of teeth, such as there may be any, will appear in What Would Eisenhower Do?
Cheers!
Jared Bernstein on Governor Perry’s economic miracle:
Texas employment wasn’t down much at all in these years, as the state lost only 53,000 jobs. But looming behind that number are large losses in the private sector (down 178,000) and large gains (up 125,000) in government jobs.” Which shows, Bernstein goes on, that Texas has followed “a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference.
For further political comment, see What Would Eisenwhower Do?
The payroll tax cut is set to expire on January 1. One would think that Republicans would want to make the cut permanent, as with the Bush tax cuts. But one would be wrong. See this article in the Washington Post. Before you read the article you may wish to guess why expiration of one kind of tax cut is good but another is bad.
For further political comment, see What Would Eisenwhower Do?
It just gets crazier and crazier!
Republican Extremism, Bad Economics (New York Times)
But these are only the best-known of this crowd’s extreme views. In an unpublished interview, Gov. Rick Perry of Texas told Fortune magazine that if he had been president in 2008, he wouldn’t have engaged in the financial rescue effort. Without the bailout, initiated by the Bush administration, we would not have a functioning economy today..
Mr. Perry also wants to repeal the 16th Amendment, thereby eliminating the income tax, which accounts for 80 percent of government revenue. Like his fellow aspirants, Mr. Perry has offered no analysis to explain how the government would function under his vision.
Mr. Paul, who finished second in the Iowa straw poll on Saturday, has for decades sought to abolish the Federal Reserve, arguing that it is corrupt and unconstitutional. Eliminating our central bank is a crazy idea that would plunge the country back into an oscillating 19th-century world of panics and busts.
Rick Perry wants to do bad stuff to "traitor" Ben Bernanke. Can it get any crazier? Yes, I’m afraid it will. Can we talk about who is a traitor? Well, we can. But mark my words: those who throw stones, will act like crybabies if what they do to others is done unto them.
Governor Rick Perry’s thoughts on Federal Reserve Chairman Ben Bernanke
Texas Governor Rick Perry, who entered the presidential campaign on Saturday, appeared to suggest a violent response would be warranted should Federal Reserve Chairman Ben Bernanke “print more money” between now and the election. Speaking just now in Iowa, Perry said, “If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.” Treason is a capital offense.
See above link for Krugman’s comments on Governor Perry’s contribution to thoughtful and civil discourse.
For further political comment, see What Would Eisenwhower Do?
Warren Buffet pleads to have his taxes raised (from the New York Times)
Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
G.O.P. on Defensive as Analysts Question Party’s Fiscal Policy (from the New York Times)
I think the U.S. has every chance of having a good year next year, but the politicians are doing their damnedest to prevent it from happening — the Republicans are — and the Democrats to my eternal bafflement have not stood their ground,
– Ian C. Shepherdson, chief United States economist for High Frequency Economics, a research firm, said in an interview.
For further political comment, see What Would Eisenwhower Do?
Below is an extract from a New York Times Op-Ed artcle. The US is in steep economic an political decline. The question: will the present time (i) be a Sputnik moment, a moment in which Americans will come together reverse this decline or (ii) is the national “downgrade” a permanent one?
1.
The debt-ceiling deal between President Obama and Congressional Republicans merely staved off a crisis of confidence for the moment. It does not address our immediate need to avoid falling back into recession, or our longer-term need to raise enough revenue to pay for the social spending Americans want.
Moreover, the deal sidesteps the fundamental challenge the country now faces: who will pay to fix what was broken during the past decade by irresponsible tax cuts, ruinously expensive wars, failures of regulation and the resulting housing and financial booms and busts?
2.
We lost the first decade of the 21st century by squandering our wealth and borrowing as if there was no tomorrow. We risk losing this decade to an incomplete recovery and economic stagnation.
An economically responsible, politically feasible distribution of the costs of working our way out of the crisis will require higher taxes, a more efficient tax code, and restrained growth of social spending, particularly Medicare. To ignore these realities, and the contentious choices they entail, is merely to postpone the inevitable day of reckoning — and probably to make it worse.
Other opinion follows. This may be regarded as partisan, a needless dwelling on the past when the future is our concern. However, if we can’t figure out (and agree on) how and why we drove the car into the ditch and then far of the road, we are unlikely to get back on the road and stay there.
Has any president in American history left behind as much lasting damage as George W. Bush? In addition to two unfinished wars, he also set us on the path to our current financial mess. The Bush tax cuts, which turned a surplus into a growing deficit, have been disastrous. As James Fallows pointed out in a prescient 2005 article in The Atlantic predicting a meltdown, they reduced tax revenue “to its lowest level as a share of the economy in the modern era.” (In its downgrade report, S.& P. suggested that it did not believe that Congress would let the cuts expire at the end of 2012, as they’re supposed to.) Then, in 2003, Bush pushed through prescription drug coverage for Medicare recipients. David M. Walker, then the comptroller general, described 2003 as “the most reckless fiscal year in the history of the Republic,” adding some $13 trillion in future entitlement costs.
The New York Times Editorial from August 9, 2011
The credit decision put a price tag on the agenda of dysfunction that Republicans brought to Washington, in which unnecessary crises are created to achieve their goals of shrinking government and bringing down Mr. Obama. When one of the two political parties announces its willingness to let the nation default, S.& P. essentially said, those who lend it money can no longer trust it to act rationally. Whatever flaws may exist in S.& P.’s arithmetic, that scolding is one that lawmakers richly deserve.
Lest one think the above to be an unduly partisan view, recall this quote:
The single most important thing we want to achieve is for President Obama to be a one-term president. ~Mitch McConnell, Senate Minority Leader, (R-Ky.), October 2010
Note that the “single thing” was not one of our pressing national priorities. The statement speaks for itself.
Department of fact-checking: some related campaign statements in Iowa.
And now for a magical solution
Prayer can be meditative, healing, and humbling. It can also be magical thinking. Given how Perry has said he would govern by outsourcing to the supernatural, it’s worth asking if God is ignoring him.
For further political comment, see What Would Eisenwhower Do?
For those interested in how we might get out of our current financial (and political) predicament, it will be of interest to know how we got into it. The following article in today’s Washington Post gives some history:
Running in the Red: How the U.S., on the road to surplus, detoured to massive debt
The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.
And this WP article talks about we tried to get out but didn’t:
For further political comment, see What Would Eisenwhower Do?
Mohamed El-Erian, CEO of the bond fund PIMCO, comments in the Financial Times on the S&P downgrade from AAA to AA+ of the US credit rating. There is a long quote below, but please see the original article. I very much hope that our very dysfunctional political establishment does take this unprecedented event as a “Sputnik moment” rather than as a talking point for further bickering, grandstanding, and other self-serving behavior which is destructive of the common good.
All of that said, there a sliver of a silver lining — and an important one. America’s downgrade may serve as a wakeup call for its policymakers. It is an unambiguous and loud signal of the country’s eroding economic strength and global standing. It renders urgent the need to regain the initiative through better economic policymaking and more coherent governance.
There is a risk, of course, that different political factions will use S&P’s action as a vindication of their prior beliefs. Democrats would argue that it is recent Republican political sabotage that pushed S&P over the edge while Republicans would argue that we are here due to irresponsible government spending by the Democrats.
For the sake of their country and the wider global economy, both parties should resist the urge to begin bickering. Instead they should seize this potential “Sputnik Moment” — a visible shock to the national psyche that can unify Americans around a common vision and a renewed sense of purpose — that of halting gradual secular decline by putting the country back on the path of high growth, job creation and financial soundness.
The writer is chief executive of PIMCO
PS. Since revenues and expenditures are the two flows of money that determine deficits, I’ve posted this useful history evolution from the party of fiscal responsibility (e.g. Eisenhower) to the party of no new taxes, enforced by the non-elected party theologian-inquisitor, Grover Norquist. Source: Washington Post.
For further political comment, see What Would Eisenwhower Do?
