Saturday, November 30, 2013

ObamaCare Health Insurance Plans Are The Substandard Plans: Nearly Half Are HMOs With Narrow Doctor And Hospital Networks: In Some Plans, Fewer Than Half The Doctors And Hospitals Are Included In The ObamaCare Networks Than In Non-ObamaCare Plans

From The Wall Street Journal, "ObamaCare's Plans Are Worse: How the Affordable Care Act raises prices and limits medical choices:"
The reason this furor [over ObamaCare] will continue even if the website is fixed is that the public is learning that ObamaCare's insurance costs more in return for worse coverage.

Mr. Obama and his liberal allies call the old plans "substandard," but he doesn't mean from the perspective of the consumers who bought them.
Meanwhile, ObamaCare's plans are limited to essentially four. Yes, four. The law converts insurance products on the ObamaCare exchanges into interchangeable commodities that finance the same standard benefit at the same average expense over four tiers known as bronze, silver, gold and platinum.
In any case all four tiers are scrap-metal grade, because the rules ObamaCare imposes to create a supposedly superior insurance product are resulting in an objectively inferior medical product. The new mandates and rules raise costs, so insurers must compensate by offering narrow and less costly networks of doctors, hospitals and other providers in their ObamaCare products. Insurers thus restrict care and patient choice of physicians in exchange for discounted reimbursement rates, much as Medicaid does.

Nearly half of the ObamaCare plans are tightly managed HMOs, according to a McKinsey & Co. analysis. In states like California, Missouri and New Hampshire, many networks are 40% or 45% the size of those offered for normal commercial coverage. Patients face the prospect of waiting months and driving miles to clinics and county hospitals.

Narrow networks can be a useful cost-control tool, to the extent people choose to give up medical options in return for lower premiums. But that's rarely what people want when they're choosing with their own money. Some 82.5% of eHealth customers in 2012 purchased preferred provider organization plans (PPOs) that are structured so patients can visit virtually any physician.

Friday, November 29, 2013

96 Percent Of Metropolitan Areas Saw Decline In Population Share Within 5 miles Of The Urban Center Between 1980 And 2010

From Federal Reserve Bank of Cleveland, Economic Commentary, "Population Distribution and Educational Attainment within MSAs, 1980–2010" by Kyle Fee:
One can see the shift of population away from the core more clearly by looking at population shares. Figure 2 shows changes in population shares by distance from the city center for these 100 metro areas. Neighborhoods within 10 miles of the urban core have seen their population shares decline, while neighborhoods 10 to 30 miles from the core have seen their population shares rise. This outward shift of population shares is widespread across the 100 metro areas, with 96 percent of them seeing a decline in the share of the population within 5 miles of the urban core between 1980 and 2010.

Source: Federal Reserve Bank of Cleveland

Tuesday, November 26, 2013

Maturing And More Work Experience Create Income Inequality

From Tax Foundation, "Incomes Tend to Rise with Age" by Scott A Hodge and Andrew Lundeen:
One of the most overlooked explanations for the difference in income between taxpayers is the issue of life cycle. Our income tends to grow as we mature and gain work experience, reaching its peak as we near retirement. As this chart illustrates, the average income for taxpayers age 55 to 65 is nearly $82,000—well above the $57,606 average for all taxpayers. Even taxpayers over age 65 make more than the national average. As the Baby Boomer generation moves into its peak earnings years, there will be more high-income taxpayers than younger low-income ones, giving the appearance of rising inequality.

Source: Tax Foundation

Who Earns Minimum Wage In Graphs

From NPR, Planet Money, "Here's Who Earns The Minimum Wage, In 3 Graphs" by Quoctrung Bui:

Source: Bureau of Labor Statistics
Credit: Quoctrung Bui / NPR

Source: Bureau of Labor Statistics
Credit: Quoctrung Bui / NPR

Retail Theater Of Black Friday Discounts: Retailers Profit At Markdown Price

From The Wall Street Journal, "The Dirty Secret of Black Friday 'Discounts': How Retailers Concoct 'Bargains' for the Holidays and Beyond" by Suzanne Kapner:
When shoppers head out in search of Black Friday bargains this week, they won't just be going to the mall, they'll be witnessing retail theater.

Stores will be pulling out the stops on deep discounts aimed at drawing customers into stores. But retail-industry veterans acknowledge that, in many cases, those bargains will be a carefully engineered illusion.

The common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
A similar strategy is used at many discount outlet stores where the manufacturers produce goods at a lower cost for sale in discount outlets. At a lower cost, the goods can sell for a lower price at the outlet. Both the manufacturers and the retail discount outlet stores make a profit at the lower price.

Most High Income Households Have Multiple Wage Earners

From Tax Foundation, "High-Income Households Have More Earners than Low-Income Households" by Andrew Lundeen and Scott A Hodge:

High-Income Households Have More Earners
Source: Tax Foundation

Monday, November 25, 2013

Government And Regulatory Intervention Affects About 30 Percent Of Corporate Earnings: McKinsey & Co Calls For Companies To Improve Their Government Relations Functions

From McKinsey & Company, Insights & Publications, "Organizing the government-affairs function for impact: The value at stake from government and regulatory intervention is huge. Companies that approach external engagement in a disciplined way capture more of it." by Reinier Musters, Ellora-Julie Parekh, and Surya Ramkumar, November 2013:
The business value at stake from government and regulatory intervention is huge: about 30 percent of earnings for companies in most industries, we estimate, and higher still in the banking sector, where the figure tops 50 percent. Translating those percentages into euros, dollars, or yen can yield eye-popping results: one European utility found that the ongoing value at stake from regulation was €1.5 billion, or about €30 million for every employee involved in handling the company’s regulatory affairs. Another large global company estimated that in a major acquisition, it was €500 million a year over a decade.

Since there’s so much money on the table, you might assume that companies would organize government relations as carefully as they do other business functions. Surely, for example, companies have people in place to understand the relevant economics, structures, and processes to drive this understanding into important business activities, and regulatory-affairs professionals who work in a collaborative and integrated fashion with business-unit leaders to capture value.

Yet the reality is quite different. In our most recent annual survey, fewer than 30 percent of the executives responding said that their external-affairs groups had the organizational setup and talent necessary to succeed. Only about 20 percent of executives reported frequent success at influencing government policy and regulatory decisions—a proportion that has not increased in the four years we’ve conducted the survey. [Footnotes Omitted.]

Sunday, November 24, 2013

Employment Ratio For Prime Working Age Group Still Below Pre-Recession Level

From The New York Times, "In Fed Policy, the Exit Music May Be Hard to Hear" by N Gregory Mankiw:
A relevant measure is the employment-to-population ratio for those in the prime working age group —25 to 54. This statistic also shows the recession’s lingering effects: the ratio declined to about 75 percent from 80 percent over the course of the recession, and has recovered to only about 76 percent today. So we have recovered only about a fifth of what we lost during the downturn.

Main Reasons For Crumbling Infrastructure Are Delays From Environmental Reviews And Not Funding

From The Wall Street Journal, "Why It Takes So Long to Build a Bridge in America: There's plenty of money. The problem is interminable environmental review." by Philip K Howard:
But funding is not the challenge. The main reason crumbling roads, decrepit bridges, antiquated power lines, leaky water mains and muddy harbors don't get fixed is interminable regulatory review.

Infrastructure approvals can take upward of a decade or longer, according to the Regional Plan Association. The environmental review statement for dredging the Savannah River took 14 years to complete. Even projects with little or no environmental impact can take years.

Raising the roadway of the Bayonne Bridge at the mouth of the Port of Newark, for example, requires no new foundations or right of way, and would not require approvals at all except that it spans navigable water. Raising the roadway would allow a new generation of efficient large ships into the port. But the project is now approaching its fifth year of legal process, bogged down in environmental litigation.

Thursday, November 21, 2013

DC Rolls Out Single Lottery System For Charter And Public Schools

From The Washington Post, "D.C. preparing a new unified enrollment lottery for its traditional and charter schools" by Emma Brown:
The majority of the District’s charter schools and all of the city’s traditional public schools plan to participate in a single, unified lottery to determine enrollment for next fall, a shift education officials hope will streamline what has often been a frustrating and chaotic process for families.
In the past, each of the District’s charter schools had its own application process and ran its own lottery to determine enrollment when demand exceeded slots. The traditional school system conducted a separate lottery for admission to preschool programs, selective high schools and out-of-boundary schools.
Families can find details about the new lottery at, a centralized clearinghouse for information about school enrollment. Starting Dec. 16, parents will be able to fill out an application on the Web site that lets them rank their preference among up to 12 schools.

By A Margin Of Almost 2 To 1, Most Taxpayers Are Single And Not Married

From Tax Foundation, "Singles Are Now the Majority of Taxpayers" by Scott A Hodge:

Source: Tax Foundation

States Need To Up Their Health Insurance Game As ObamaCare Comes Crashing Down And Congress Is Ineffectual: How About A State Reciprocity Law As A Start

ObamaCare is not working from a technological perspective, an insurance perspective, an economic perspective and a public acceptance perspective. The question is quickly becoming not if ObamaCare fails, but how soon.

The current Congress is incapable of passing legislation that will solve the problem and not be vetoed by the President.

The States need to act and they need to act in a uniform but not necessarily identical manner to quickly resolve the health insurance problems across the country created by ObamaCare.

A good start would be a health insurance reciprocity law.

Reciprocity Law
The States should pass laws that would allow any of their residents to purchase an out of state health insurance policy without the need for new state approvals, if:
  1. The health insurance policy is legal in and offered in the originating state, and
  2. Pays for medical services within the purchaser's state to medical providers doing business in the purchaser's state, and
  3. The originating state of the health insurance policy also allows its residents to buy out of state health insurance policies.
Enactment of a health insurance reciprocity law by the States and DC would create blanket health insurance coverage across the entire US without the need to wait for any federal legislative action.

States will be free to allow any type of health insurance and residents of reciprocal states will be free to choose in-state insurance or out-of-state insurance from reciprocal states.

Insurance companies will get the chance to sell in a larger market with the trade-off that insurance competition will increase.

Add a change at the federal level to the US Tax Code to allow individuals to deduct the cost of health insurance and there will be no need for ObamaCare.

Wednesday, November 20, 2013

ObamaCare Is A Presidential Office Management Failure: Clay Shirky

From Clay Shirky Blog, " and the Gulf Between Planning and Reality" by Clay Shirky
It’s certainly true that Federal IT is chronically challenged by its own processes. But the problem with was not timeline or budget. The problem was that the site did not work, and the administration decided to launch it anyway.

This is not just a hiring problem, or a procurement problem. This is a management problem, and a cultural problem. The preferred method for implementing large technology projects in Washington is to write the plans up front, break them into increasingly detailed specifications, then build what the specifications call for. It’s often called the waterfall method, because on a timeline the project cascades from planning, at the top left of the chart, down to implementation, on the bottom right.

Like all organizational models, waterfall is mainly a theory of collaboration. By putting the most serious planning at the beginning, with subsequent work derived from the plan, the waterfall method amounts to a pledge by all parties not to learn anything while doing the actual work. Instead, waterfall insists that the participants will understand best how things should work before accumulating any real-world experience, and that planners will always know more than workers.

This is a perfect fit for a culture that communicates in the deontic language of legislation. It is also a dreadful way to make new technology. If there is no room for learning by doing, early mistakes will resist correction. If the people with real technical knowledge can’t deliver bad news up the chain, potential failures get embedded rather than uprooted as the work goes on.
The vision of “technology” as something you can buy according to a plan, then have delivered as if it were coming off a truck, flatters and relieves managers who have no idea and no interest in how this stuff works, but it’s also a breeding ground for disaster. The mismatch between technical competence and executive authority is at least as bad in government now as it was in media companies in the 1990s, but with much more at stake.[Emphasis added.]
The entire blog post is worth reading.

Monday, November 18, 2013

Video Of Larry Summers IMF Speech On The State Of The US Economy Four Years After The Crisis Ended

From 14th Annual IMF Research Conference: Crises Yesterday and Today, Nov. 8, 2013, "Larry Summers at IMF Economic Forum, Nov. 8:"

Women Pass Previous Employment Peak: Men Still Below Previous Peak

From The Wall Street Journal, "Women Reach a Milestone in Job Market: Men Fall Behind in Recovering Jobs Lost During Recession, Labor Department Survey Shows" by Jonathan House:
A record 67.5 million women are working today, up from the prior peak of 67.4 million in early 2008, according to the Labor Department's latest tally of payrolls that captured the full rebound for the first time. By comparison, 69 million men currently have jobs, below their high of 70.9 million in June 2007.

Sunday, November 17, 2013

Success Measured By Votes Vs Success Measured By Profits: LinkedIn Comment About ACA

A comment I posted on LinkedIn to an article, "CEO Lessons from Obamacare" by Mohamed El-Erian, CEO of PIMCO:
A successful roll out does not mean the product will be successful with customers. In the corporate world, CEO implementation failure is different than marketplace failure. Many products have met all internal steps yet failed with customers due to pricing, competition, or product acceptance. The reverse also happens, such as Apple's initial iPhone antenna problems, where despite a major failure, the product succeeds. Successful products are measured by revenues and profits and not internal corporate processes.

Unfortunately for the ACA, it has numerical targets for young adults enrolled, for uninsured and for Medicaid enrollment. Unfortunately for US citizens, the ACA is a legislated program and legislated programs almost never go away even if they do not succeed in meeting their goals.

The ACA mandates insurance and eliminates many insurance policies that were previously purchased. Whether justified or not, the government is acting as a monopolist. The choice left for those that want a different product or the choice not to buy is to voice their unhappiness. Voicing about the ACA in the political arena is partisanship, Republicans vs Democrats, Liberal Democrats vs Moderate Democrats. Voicing is also voting at the polls.

In the corporate world, there are revenue and profit measurements. In the political, legislative world there are votes. The strategies used to increase revenues and profits are different than the strategies used to increase and retain votes. Part of the difference in the management of the ACA roll out versus a corporate product roll out reflects the difference between success measured by revenue and profit and success measured by votes.

Saturday, November 16, 2013

What Foreigners Find Most Surprising About The US

From The Daily Caller, "Foreigners share what they find most surprising about America" by Business Insider. I copied the topic headings in the article and not the foreigners' quotations in each heading. The article's topic headings are:
America is so huge that it would take weeks to see all of its major cities.

In fact, everything seems bigger in America — especially portion size.

Still, Americans seem to be obsessed with sports and fitness.

The variety of goods sold at American supermarkets, especially Wal-Mart, was unbelievable to many foreigners.

A lot of things go to waste, especially food.

Americans rarely carry cash and instead depend on credit cards to make purchases.

Foreigners were amazed by the return policies that are standard at stores across the country.

Outside of big cities, everyone has a car.

Overall, Americans tend to be much more friendly than expected.

And Americans love America.

Presidents Are Not CEOs: In Politics Deception Is Worse Than Failure

Imagine you are a CEO of a company about to launch a major new product. Your strategic vision for the future of the company includes and depends on the success of the new offering.

The new product will help turnaround a couple of major money losing divisions, while also increasing the company's market share. The product has the potential to generate a tremendous amount of goodwill for the firm and allow it to penetrate other markets where it is currently finds it difficult to be a major player. As a large publicly traded enterprise, the corporation's brand name, future customer loyalty, revenue, profit, stock price, and your compensation and tenure at the firm depend on the success of the new item.

If the product fails, the repercussions will have a long-lasting impact on the company, on your future career and on the careers of those associated with the product's development and implementation. Internally the product is so closely associated with you that it is nicknamed with a variant of your name. What do you do during the development and implementation of the product? Do you ask for regular reports on the status? Do you ask if timelines are met? Do you ask if the product is tested? Do you ask about quality? Do you ask about initial production volumes? Do you ask if costs can be kept under control or if the final sales price will be as planned? Do you ask if suppliers are on board? Do you try it out on a few focus groups? Do you monitor how a few test subjects actually use the product? Do you ask for test customer feedback?

As CEO, you would be concerned about all of the above and more. You would assign people you trust; people who can implement; people who will keep you inform on a regular basis of the product's development and implementation status. All you need is yes or no answers to your questions, but you do ask the questions!

Suppose there are setbacks along the way and development is more bumpy and slower than planned. Test groups find the product is more difficult and less obvious to use than you envisioned. Costs are more than you hoped. Despite these few setbacks, you and others you trust still believe in the product's potential to achieve your vision. What as CEO do you do? You could add more people to the project. You could change the people involved. You could bring in special troubleshooters. You could ask for recommendations from your staff about getting the product back on track.

Clearly much of what a good CEO would do in a good corporate culture at a successful corporation was not done with Obamacare by the President, by his most trusted staff, or by the staff assigned to the healthcare project.

Governments Are Not Corporations

Governments are not corporations and presidents are not CEOs. We occasionally project a corporate structure with a CEO onto the US government and the President and his staff, but that is an inexact analogy. The president is elected. His staff is appointed. His success is measured by a numerical count of votes and not by profit, revenue or share price.

The rough start to Obamacare may impact the public's appetite for future large government programs. Obama's and the Democratic party's future credibility may be at stake for making statements about the law that do not seem to be the most honest. Obama's election and reelection to the presidency was never dependent on people's perception of him as an implementer or CEO.

There are many problems with the design of the new healthcare law at a fundamental structure and economic level that have a good chance to make the law unworkable. If the law is repealed or modified so much that it no longer resembles the initial strategic vision of the law, the public's perception of Obama and the Democratic party will change. The public never thought of Obama as a CEO. The poor implementation and the roll-out problems will not negatively impact the public's long-term perception of him. The public discovery of repeated misstatements will negatively impact Obama and the Democratic party. The public's belief that Obama and the Democratic party engaged in willful deception will negatively impact the Democratic party and Obama's image for a long time. A president the public trusts is much more important that a president that can act as a CEO.

The major shortcomings of Obamacare are not the poor roll-out or the poorly functioning website. The major shortcomings of Obamacare are that the law made the people believe they were deceived by the President and the Democratic party.

Friday, November 15, 2013

Health Insurance Deductibles Rise 26 Percent In Obamacare Exchange Policies: Over $6000 For Individuals And Almost $13,000 For Families

From Bloomberg, "Obamacare Deductibles 26% Higher Make Cheap Rates a Risk" by Alex Nussbaum:
Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6,000 a person.

Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket.

ACA Health Insurance Subsidies Will Account For 53 Percent Of Growth In US Government Healthcare Spending By 2023 And Cost $1.4 Trillion from 2014 To 2023: CBO

From CBO, "Presentation on Federal Health Care Spending" to the Public Policy Initiative of the Wharton School at the University of Pennsylvania by CBO Director Doug Elmendorf:
Federal health care spending is growing because of a combination of the aging of the population, an expansion of federal subsidies for health insurance, and rising health care costs per person. Since a central goal of policies regarding health and health care is to help people live longer, the more successful our policies are, the more population aging we will have. Hence, efforts to reduce federal health care spending need to be directed at the other two factors pushing up spending.

Reducing the number of people eligible for federal health care subsidies or the size of those subsidies would be a straightforward way to reduce federal spending. CBO has examined some potential reductions in federal subsidies, including repeal of the coverage provisions of the Affordable Care Act, the elimination of subsidies through that act for people with income above a certain threshold, an increase in the Medicare eligibility age, and an increase in Medicare premiums. Changes of those sorts would reduce federal spending but also would cause the affected people to bear higher costs, to lose health insurance in some cases, and to receive less health care in some cases. Also, the additional uncompensated care that would result would impose burdens on the medical safety net. [Emphasis Added.]

Slides accompanying the above presentation:

Slide 6

Source: CBO

Slide 15
Source: CBO

Slide 36
Source: CBO

Thursday, November 14, 2013

Time For A Better Income Statement: McKinsey&Company

From McKinsey&Company, Insights & Publications, November 2013, "Building a better income statement: If neither companies nor investors find GAAP reported earnings useful, it’s clearly time for a new approach." by Ajay Jagannath and Tim Koller:
A company’s annual income statement should be a transparent disclosure of its revenues and expenses that investors can readily interpret. Most aren’t, largely because income and expenses classified according to generally accepted accounting principles (GAAP) can be difficult to interpret. In fact, many sophisticated investors tell us they have to reengineer official statements to derive something they’re comfortable using as the starting point for their valuation and assessment of future performance. In response, many companies—including all of the 25 largest US-based nonfinancial companies—are increasingly reporting some form of non-GAAP earnings, which they use to discuss their performance with investors.
A modest proposal to revise GAAP requirements
It would make life easier for everyone if GAAP requirements themselves were adjusted to require what companies and investors already use, after making all their adjustments, instead of making everyone do twice the work. That wouldn’t require big changes; simply separate operating and nonoperating items in a standardized manner and combine acquired intangible assets with goodwill without amortizing them (exhibit). Such an approach would enable investors to quickly understand a company’s true earnings and operating performance. It would provide them with the detail they need to assess the economic significance of nonoperating and nonrecurring items and decide for themselves how to treat them. And it would enable them to notice trends and patterns and compare performance reliably with peers.

Commonsense changes would make for a better income statement.


Wednesday, November 13, 2013

NPR Audio Of Economics Nobel Prize Winners Fama And Shiller Discussing Asset Price Bubbles: 15 Minutes

From NPR, Planet Money, "Episode 493: What's A Bubble? (Nobel Edition), November 01, 2013:"

How Far Should Government Go To Protect People From Themselves? Trans Fats Are Unhealthy, Not Hazardous: Confusing Public Health Concerns With Individual Health Concerns

From The Federalist, "Standing Athwart History, Yelling ‘Trans Fats For Everyone!’: Should government protect us from ourselves?" by David Harsanyi:
So when the Food and Drug Administration (FDA) recently took the first step in eliminating trans fats from the food supply, it may have justified the ban by claiming that partially hydrogenated oils were no longer on the “generally recognized as safe” list, but it was just federalizing the sort of paternalistic micromanaging that big cities have been trying to implement for years. The thing is, the FDA, acting by fiat, is going to have a lot easier time being our mommy than any mayor.

The question you usually get in this debate goes something like this: Isn’t it government’s job to protect people from corporate malfeasance and dangerous products? Sure. But how far should government go to protect people from themselves? Trans fats are unhealthy, they aren’t hazardous. That’s a vital distinction that has been persistently muddled by groups that have spent decades trying to normalize the idea that someone else should be controlling what you eat. (Some of these same groups, like the Center for Science in the Public Interest, pressured the industry to use trans fats as a healthier alternative in the first place.)

FDA Commissioner Margaret Hamburg, in fact, admits that the ban was necessary because "current intake remains a significant public health concern." Confusing public health concerns and individual health concerns allows the FDA to ban virtually anything it desires. If it’s the intake that matters (and even the FDA doesn’t require trans fats to be identified on labels if .05 grams or less is used per serving) why Fig Newtons? Why not place limits on over-the-counter acetaminophen or appletinis? And why only certain components of food? Is it healthier for us to douse our fries in mayonnaise or enjoy microwavable popcorn once a week? [Emphasis added.]

CBO Presentation To The Budget Conference Committee On Nov 13, 2013

CBO projects continuing US budget deficits for the next two decades with an increase in the share of US debt held by the public.

From CBO "Presentation to the Budget Conference Committee" on November 13, 2013:
Presentation by Doug Elmendorf, CBO Director, to the Budget Conference Committee Led by Chairman Paul Ryan of the House Budget Committee and Chairman Patty Murray of the Senate Budget Committee:

PDF version of slide presentation.

Tuesday, November 12, 2013

Under 80% Of All Computer Hard Drives Will Survive With Continuous Use To Fourth Year

From ExtremeTech, "How long do hard drives actually live for?" by Sebastian Anthony:
Hard Drive Failure Rate Graph
Source: ExtremeTech
It seems that hard drives have three distinct failure “phases.” In the first phase, which lasts 1.5 years, hard drives have an annual failure rate of 5.1%. For the next 1.5 years, the annual failure rate drops to 1.4%. After three years, the failure rate explodes to 11.8% per year. In short, this means that around 92% of drives survive the first 18 months, and almost all of those (90%) then go on to reach three years.

Extrapolating from these figures, just under 80% of all hard drives will survive to their fourth anniversary. Backblaze doesn’t have figures beyond that, but its distinguished engineer, Brian Beach, speculates that the failure rate will probably stick to around 12% per year. This means that 50% of hard drives will survive until their sixth birthday.

Landowners Group Plans To File Fracking Delay Lawsuit Against NYS Governor Cuomo

From The Journal News,, "Landowners finish fracking lawsuit, await funds to file" by Jon Campbell:
A draft lawsuit from a pro-drilling landowners group claims Gov. Andrew Cuomo has arbitrarily delayed a decision on hydraulic fracturing for no “valid, rational or legally defensible reason.”

In a newsletter sent to its members Tuesday, the Joint Landowners Coalition of New York sent out the lawsuit it intends to file against the state, Cuomo and the commissioners of the Health and Environmental Conservation departments. But the group is trying to raise additional money to help fund the challenge before it sues, according to the letter.

The legal document takes Cuomo to task for repeatedly delaying a decision on large-scale fracking, claiming the delays violate state law and amount to an unconstitutional government “taking” of land rights.

Fracking has been on hold in New York since 2008, when the state Department of Environmental Conservation first launched the Supplemental Generic Environmental Impact Statement, a lengthy review process that is meant to guide a drilling decision. That document is currently under review by state Health Commissioner Nirav Shah.

Easy Fix For Healthcare.Gov: Switch to Vouchers From Subsidies

The easier fix for the broken health insurance exchanges is to abandon them and HealthCare.Gov, and model the federal health insurance program after the federal housing voucher programs. In the subsidized federal housing voucher program, prospective tenants can use a housing voucher to pay part of their rent. The renters need not go to a "housing exchange" to find an apartment. Using this model, there is no need for an exchange since insurers already have exisitng websites; states have online lists of health insurers in their states, and websites like already exist and are well-functioning websites.

Subsidies and vouchers are identical in their effects in that they allow health insurance buyers and apartment renters to pay less than the full market price.

Allowing individuals to bypass Healthcare.Gov and the exchanges and deal directly with the insurance companies will remove many of the headaches and obstacles currently exisitng.

All that would be needed is a federal system that would allow individuals, families and insurers to see the amount of the federal subsidy/voucher. Once that amount is known, health insurance buyers could use the insurance infrastructure that existed before passage of Obamacare to buy health insurance.

It was foolish of Congress and the President to pass legislation that required building a new infrastructure for buying insurance. There was no need to build a complicated system that connects individuals and families to health insurers, to their subsidy amounts and that processes applications for insurance. The process for purchasing health insurance was in existence and functioning for years before the law. The US only needed to tell the parties how much it was willing to pay towards that individual/family insurance purchase.

Monday, November 11, 2013

Independent Voters Favor Christie Over Clinton

From Rasmussen Reports, "2016? Clinton 43%, Christie 41%:"
A new Rasmussen Reports national telephone survey finds that if the 2016 presidential election were held today, 43% of Likely U.S. Voters would choose Democrat and former secretary of State Hillary Clinton, while 41% would opt for Chris Christie, New Jersey’s Republican governor, instead. Nine percent (9%) like some other choice, and eight percent (8%) are undecided. (To see survey question wording, click here.)

Clinton has the support of 77% of Democrats, while 73% of Republicans back Christie. Among voters not affiliated with either major party, it’s Christie 42%, Clinton 33%.

xkcd's Simple Answers About New Technology

From xkcd, "Simple Answers":

Simple Answers
Source: xkcd

Friday, November 8, 2013

ObamaCare Is Entitlement, Not Insurance: Will Have Funding Crisis Like Medicare And Social Security

From But Then What, "Is The ACA An Insurance Plan?" by Tom Lindmark:
A lot on the Progressive side of the blogosphere are knocking themselves out promoting the idea that insurance is a process of various cohorts subsidising one and other. The young subsidize the old or the healthy subsidize the sick. It’s essentially a way to rationalize the lack of insurance underwriting inherent in the ACA.
Regardless of your position on Obamacare, you should disabuse yourself of the notion that it is an insurance product. It’s a health care entitlement molded along the lines of Social Security and Medicare. Its disregard for the fundamentals of insurance is the reason it will likely suffer the same funding ills that afflict those two programs.

Government Subsidy Not Needed

From Freakonomics, How to Sell Ice Cream in Cold Weather:
From Eric Kirkland, a photo of an ice-cream shop in Colorado Springs with a weather-sensitive customer-loyalty plan:

Source: Freakonomics

Thursday, November 7, 2013

Involuntary Teacher Transfers Places Better Teachers Into Needy Schools: Increases School Equity

From "Involuntary teacher transfers put better teachers with neediest students" on ScienceBlog:
Allowing principals to involuntarily transfer teachers within a district resulted in more productive teachers replacing lower performing teachers in mostly disadvantaged schools, according to a study in Journal of Policy Analysis and Management.

Moving better teachers into needy schools was a positive step toward increasing equity among schools in the district, the researchers concluded. "We want to have good teachers in front of low achieving kids,” said lead author Jason A. Grissom, assistant professor of Leadership, Policy and Organizations at Vanderbilt’s Peabody College of education and human development. “Getting effective teachers into those classrooms is one of the best means we have for increasing how much students learn."

The study was conducted in Miami-Dade County Public Schools, the fourth-largest district in the United States. Grissom’s co-authors for the article, "Strategic Involuntary Teacher Transfers and Teacher Performance: Examining Equity and Efficiency," were Susanna Loeb and Nathaniel Nakashima of Stanford University.

More Chocolate You Eat, The Lower Your Body Fat

From "Research shows that the more chocolate you eat, the lower your body fat" on ScienceBlog:
University of Granada researchers from the Faculty of Medicine and the Faculty of Physical Activity and Sports Sciences have scientifically disproven the old belief that eating chocolate is fattening.

In an article published this week in the journal Nutrition, the authors have shown that higher consumption of chocolate is associated with lower levels of total fat (fat deposited all over the body) and central fat (abdominal), independently of whether or not the individual participates in regular physical activity and of diet, among other factors.
Independent of diet and physical activity

The study involved 1458 adolescents aged between 12 and 17 years and results showed that a higher level of chocolate consumption associated with lower levels of total and central fat when these were estimated through body mass index, body fat percentage—measured by both skinfolds and bioelectrical impedance analysis—and waist circumference. These results were independent of the participant’s sex, age, sexual maturation, total energy intake, intake of saturated fats, fruit and vegetables, consumption of tea and coffee, and physical activity.

Easy Bank Credit Did Not Cause US Housing Bubble: Research

From "What Explains House Price Booms?: History and Empirical Evidence" by Michael D. Bordo, Harvard University - Department of Economics; National Bureau of Economic Research (NBER) and John S. Landon-Lane, Rutgers University, New Brunswick/Piscataway - Faculty of Arts and Sciences-New Brunswick/Piscataway - Department of Economics, October 2013, NBER Working Paper w19584:
However, when we look at individual house price boom episodes the cause of the price boom is not so clear. The evidence suggests that the house price boom that occurred in the US during the 1990s and 2000s was not due to easy bank credit. Loose monetary policy (as well as low inflation) played some role but the residual which may be picking up other factors such as financial innovation and the shadow banking system is the most important shock. This result is robust to many alternative specifications.

VII. Discussion and Conclusion
In particular for the US, Canada and the UK during this period, the rise in house prices cannot be explained by innovations to loans from the banking sector. In these individual cases the historical decomposition suggests that house prices would have remained stable if only bank credit shocks were present. Two of these countries, the US and the UK, have significant shadow banking sectors and it could be that financial innovations or easy credit from the shadow banking system are to blame for the house price booms rather than easy credit through the formal banking system.

High-Performing Charter Schools Have Lasting Student Impacts: Higher Math Achievement Test Scores, Lower Teen Pregnancy Rates, Fewer Male Incarcerations

"The Medium-Term Impacts of High-Achieving Charter Schools on Non-Test Score Outcomes" by Will Dobbie, Harvard University and Roland G. Fryer Jr, Harvard University - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; University of Chicago, October 2013, NBER Working Paper w19581:
High-performing charter schools can significantly increase the test scores of poor urban students. It is unclear whether these test score gains translate into improved outcomes later in life. We estimate the effects of high-performing charter schools on human capital, risky behaviors, and health outcomes using survey data from the Promise Academy in the Harlem Children's Zone. Six years after the random admissions lottery, youth offered admission to the Promise Academy middle school score 0.283 standard deviations higher on a nationally-normed math achievement test and are 14.1 percentage points more likely to enroll in college. Admitted females are 12.1 percentage points less likely to be pregnant in their teens, and males are 4.3 percentage points less likely to be incarcerated. We find little impact of the Promise Academy on self-reported health. We conclude with speculative evidence that high-performing schools may be sufficient to significantly improve human capital and reduce certain risky behaviors among the poor.

Wednesday, November 6, 2013

For Those Who Do Not Know Finance, A Very Good, Very Basic Investment Finance Presentation On Saving For Retirement

From WealthFront, "Personal Finance for Engineers (Twitter, 2013)" by Adam Nash, Oct 09, 2013:
This is an updated version of my [Adam Nash] talk "Personal Finance for Engineers" given at Twitter HQ in San Francisco on October 9, 2013.

© All Rights Reserved

Tuesday, November 5, 2013

Homeownership Rising in US

From Bloomberg, "Homeownership Rate Climbs From Lowest Level Since 1995" by Prashant Gopal:
The U.S. homeownership rate climbed from the lowest level in 18 years, signaling that the real estate rebound is drawing in more buyers.

The share of Americans who own their homes was 65.3 percent in the third quarter, up from 65 percent in the previous three months, the Census Bureau reported today. The prior level was the lowest since the third quarter of 1995.

Rising real estate values are removing negative equity, helping homeowners avoid foreclosure, while also luring would-be purchasers into the market before prices and mortgage rates go higher. The pool of eligible buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning.

Mammals Decreased Their Body Size During Previous Episodes Of Global Warming: Likely To Happen Again In Response To Current Global Warming

From "Global warming led to dwarfism in mammals — twice" on ScienceBlog:
Researchers have known for years that mammals such as primates and the groups that include horses and deer became much smaller during a period of warming, called the Paleocene-Eocene Thermal Maximum (PETM), about 55 million years ago.

Now U-M paleontologist Philip Gingerich and his colleagues have found evidence that mammalian “dwarfing” also occurred during a separate, smaller global warming event that occurred about 2 million years after the PETM, around 53 million years ago.

"The fact that it happened twice significantly increases our confidence that we’re seeing cause and effect, that one interesting response to global warming in the past was a substantial decrease in body size in mammalian species," said Gingerich, a professor of earth and environmental sciences.

Cyclical Climate Patterns Caused Climate Warming: Not Greenhouse Gases: Peer-Reviewed Article In Climate Dynamics Journal

From Daily Mail Online, "Global warming 'pause' may last for 20 more years and Arctic sea ice has already started to recover" by David Rose:
The 17-year pause in global warming is likely to last into the 2030s and the Arctic sea ice has already started to recover, according to new research.

A paper in the peer-reviewed journal Climate Dynamics – by Professor Judith Curry of the Georgia Institute of Technology and Dr Marcia Wyatt – amounts to a stunning challenge to climate science orthodoxy.

Not only does it explain the unexpected pause, it suggests that the scientific majority – whose views are represented by the UN Intergovernmental Panel on Climate Change (IPCC) – have underestimated the role of natural cycles and exaggerated that of greenhouse gases.
It also means that a large proportion of the warming that did occur in the years before the pause was due not to greenhouse gas emissions, but to the same cyclical wave. [Emphasis added.]

Don't Fall For Obama's Claims That Pre-Existing Medical Conditions Were Uninsurable Before ObamaCare: Most States Already Had Health Insurance For Pre-Existing Medical Conditions: Over 200,000 Were Enrolled Prior To ObamaCare: Others States Limited Denials For Pre-Existing Conditions

Prior to ObamaCare, from 1976 until the passage of ObamaCare, 35 states responded to the need for health insurance for individuals with pre-existing medical conditions by setting up high risk health insurance pools. Other states, like NY, enacted laws or regulations which severely limited the ability of insurers to deny health insurance coverage for pre-existing medical conditions.

From The National Conference Of State Legislatures (NCSL), "Coverage Of Uninsurable Pre-Existing Conditions: State And Federal High-Risk Pools":
In response to the problems of uninsurable individuals, 35 states set up high-risk health insurance pools over a 25 year span, from 1976 to 2009. Across these 35 states, the national enrollment was 221,879 by December 31, 2010. This compared to 200,047 as of December 2007. This is about 1.8 percent of the individual market enrollment, but is up to 25 percent of the individual market documented to be subject to denials or "adverse underwriting" restrictions due to pre-existing medical conditions.
In other states, insurers could not deny payment for a pre-existing conditions if the individual had had health insurance coverage with another medical provider health insurer in the past. For example, in NY, the law allowed for up to a 12 month waiting period for NEW health insurance before a pre-existing condition was covered, but the 12 months was reduced by the amount of previous health insurance the individual had had.

From New York State's (pre-ObamaCare) Health Insurance Resource Center:
Question What is a pre-existing condition and can it be excluded from my health coverage?

Answer A pre-existing condition is any condition for which a person received treatment or treatment was recommended within the preceding six months. Any individual enrolling in a new health plan covered by NYS law may be subject to up to a 12 month waiting period (six months for Medicare Supplement policy holders) before expenses related to the pre-existing condition are covered. However, the plan must subtract from the waiting period the time that the person had continuous coverage in a previous plan. Continuous coverage means that the person had less than a sixty three day gap between coverages. The insurer shall count a period of creditable coverage for all benefits or may elect to credit coverage based on Categories of Benefits specified in the policy or certificate.

Monday, November 4, 2013

WWII Rent Control Increased Home Ownership From 1940-45

From "The Home Front: Rent Control and the Rapid Wartime Increase in Home Ownership" by Daniel K. Fetter, NBER Working Paper 19604, October 2013:
The US home ownership rate rose by 10 percentage points between 1940 and 1945, about half the size of the net change over the 20th century, despite severe restrictions on construction during World War II. I present evidence that wartime rent control -- which covered over 80 percent of the 1940 U.S. rental housing stock -- played an important role in this shift, as suggested by Friedman and Stigler (1946). The empirical test exploits features of the central authority's method of imposing rent control, which generated variation in the size of rent reductions for cities that had seen similar increases in rents prior to control. Greater rent reductions were associated with greater increases in home ownership over the first half of the 1940's. This relationship does not appear to be driven by differential trends in housing demand or other unobserved factors potentially correlated with variation in rent reductions. The estimates suggest that rent control may explain 65 percent of the urban increase in home ownership over the first half of the 1940's.

Government Bans On Child Labor Increase Child Labor: The World Responds To Laws and Regulations In Ways Politicians Do Not Expect

From "Perverse Consequences of Well Intentioned Regulation: Evidence from India's Child Labor Ban" by Prashant Bharadwaj, Leah K. Lakdawala and Nicholas Li, NBER Working Paper 19602, October 2013:
While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. In this paper, we examine the consequences of India’s landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. The increase in child labor comes at the expense of reduced school enrollment. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along various margins of household expenditure, consumption, calorie intake and asset holdings, households are worse off after the ban.

No Measurable Benefits To Paid Maternity Leave For Children, Mothers Or Families: Benefits Higher Income Families More Than Lower Income

From "What Is the Case for Paid Maternity Leave?" by Gordon B. Dahl, Katrine V. L√łken, Magne Mogstad and Kari Vea Salvanes, NBER Working Paper 19595, October 2013:

Paid maternity leave has gained greater salience in the past few decades as mothers have increasingly entered the workforce. Indeed, the median number of weeks of paid leave to mothers among OECD countries was 14 in 1980, but had risen to 42 by 2011. We assess the case for paid maternity leave, focusing on parents' responses to a series of policy reforms in Norway which expanded paid leave from 18 to 35 weeks (without changing the length of job protection). Our first empirical result is that none of the reforms seem to crowd out unpaid leave. Each reform increases the amount of time spent at home versus work by roughly the increased number of weeks allowed. Since income replacement was 100% for most women, the reforms caused an increase in mother's time spent at home after birth, without a reduction in family income. Our second set of empirical results reveals the expansions had little effect on a wide variety of outcomes, including children's school outcomes, parental earnings and participation in the labor market in the short or long run, completed fertility, marriage or divorce. Not only is there no evidence that each expansion in isolation had economically significant effects, but this null result holds even if we cumulate our estimates across all expansions from 18 to 35 weeks. Our third finding is that paid maternity leave is regressive in the sense that eligible mothers have higher family incomes compared to ineligible mothers or childless individuals. Within the group of eligibles, the program also pays higher amounts to mothers in wealthier families. Since there was no crowd out of unpaid leave, the extra leave benefits amounted to a pure leisure transfer, primarily to middle and upper income families. Finally, we investigate the financial costs of the extensions in paid maternity leave. We find these reforms had little impact on parents' future tax payments and benefit receipt. As a result, the large increases in public spending on maternity leave imply a considerable increase in taxes, at a cost to economic efficiency. Taken together, our findings suggest the generous extensions to paid leave were costly, had no measurable effect on outcomes and regressive redistribution properties. In a time of harsh budget realities, our findings have important implications for countries that are considering future expansions or contractions in the duration of paid leave. [Emphasis Added.]

Coal Power Plants Are Burning Wood To Reduce Carbon Emissions: The Odd Effects of Government Regulations

From The New York Times, "Power Plants Try Burning Wood With Coal to Cut Carbon Emissions" by
"We’re finding an emissions improvement benefit, and an economic benefit," because the wood is cheaper than coal, said Allan S. Rudeck Jr., Minnesota Power’s vice president for strategy and planning.
Using modest amounts of wood at a large number of coal plants could be a relatively quick way to phase in renewable energy. And unlike wind or solar power electricity from a boiler, burning wood is easy to schedule and integrate into the grid.
Wood does release carbon when burned, as nearly all fuels do. But taking woody material from forests or farms leaves space for new growth, which will absorb carbon dioxide from the atmosphere as it grows. Although some opponents of using wood say that disrupting forests means added carbon dioxide in the atmosphere for generations, regulators usually count its use as zero carbon.

Sunday, November 3, 2013

Environmentalists Blocking Reduction In Global Warming By Opposing Nuclear Energy In Favor Of Renewable Energy

From Yahoo! News, "Experts say nuclear power needed to slow warming" Associated Press By Kevin Begos:
Some of the world's top climate scientists say wind and solar energy won't be enough to head off extreme global warming, and they're asking environmentalists to support the development of safer nuclear power as one way to cut fossil fuel pollution.

Four scientists who have played a key role in alerting the public to the dangers of climate change sent letters Sunday to leading environmental groups and politicians around the world. The letter, an advance copy of which was given to The Associated Press, urges a crucial discussion on the role of nuclear power in fighting climate change.

Environmentalists agree that global warming is a threat to ecosystems and humans, but many oppose nuclear power and believe that new forms of renewable energy will be able to power the world within the next few decades.

That isn't realistic, the letter said.

"Those energy sources cannot scale up fast enough" to deliver the amount of cheap and reliable power the world needs, and "with the planet warming and carbon dioxide emissions rising faster than ever, we cannot afford to turn away from any technology" that has the potential to reduce greenhouse gases.

The letter signers are James Hansen, a former top NASA scientist; Ken Caldeira, of the Carnegie Institution; Kerry Emanuel, of the Massachusetts Institute of Technology; and Tom Wigley, of the University of Adelaide in Australia.

Saturday, November 2, 2013

US Factory Output Not Affected By Government Shutdown

From The Wall Street Journal, "U.S. Factories Shrugged Off Shutdown" by Neil Shah:
U.S. factories notched their fifth straight month of expansion in October, bucking expectations that the federal government's 16-day shutdown would chill activity.

The Institute for Supply Management on Friday said its broad index, in which any reading above 50 indicates expansion, inched up to 56.4 last month from 56.2 in September. The report, based on a survey of corporate purchasing managers, showed growth in new orders, exports and order backlogs—suggesting the recent pickup could persist.

Friday, November 1, 2013

Taxpayers In The Top One Percent Pay 2X The Income Tax Rate Of All Taxpayers

From Tax Foundation, "Top One Percent Pays Twice Income Tax Rate of All Taxpayers" by Andrew Lundeen and Scott A. Hodge:
Despite conventional wisdom that the Bush-era tax cuts disproportionately benefited the wealthy, the reality is that the tax burden on the bottom 99 percent has been falling for more than two decades. Indeed, the average tax rate for the bottom 99 percent of taxpayers is now below 10 percent—well below the average for all taxpayers—thanks to years of targeted tax cuts aimed at the middle class. Meanwhile, the top 1 percent of taxpayers still pays an effective tax rate that is roughly twice the average for all taxpayers.
Source: Tax Foundation

US Healthcare Problem Is And Has Always Been About Broken Prices: Problem Is Not Affordable Insurance Nor Types Of Coverage: New Health Law Worsens The Problem

Reprint of another healthcare post from this blog that I wrote about 4 1/2 years ago that is still very relevant to the US healthcare problems of today for which the Affordable Care Act has not provided a solution.
Tuesday, May 12, 2009

Health Care Is A Pricing Mechanism Problem Not An Insurance Problem

Posted By Milton Recht

The US health care problem is not an insurance problem. The crisis is that Americans want more health care than they can afford. In 2003, the US per capita medical expenditure was $5700. Today, it is estimated at about $8200 per person. The under 65 age group medical expense per person is about 70 percent of the 65 and above average or about $7700. The 65 and above is about $11,000 per person over 65 years old.

Obviously, these are averages. If we do not put people into different health risk categories, then the average family of four has to pay almost $31,000 per year or about $2500 per month for health insurance just to cover the actual medical expenditure in that group. An individual would pay almost $650 per month.

An individual average senior citizen medical cost is about $1000 per month.

Many people find these amounts unaffordable and outrageous. Many users of medical services, government employees, union members, teachers, and other employees with health benefits, are used to having most, if not all, of the cost medical services paid for by a third party. To these users, health care became like air. It became both a necessary item and a free to use item, or at least a very low cost in comparison to benefit item.

The pricing mechanism for health care broke down because users did not bear anywhere near the full cost of the service. In effect, health care became an externality in economic terms to the users. The whole society is paying the costs of those who are heavy users of medical services and it drives non-users to use the service more often.

Most users only have to consider their want of healthcare and do not have to budget and allocate their resources to get it. Without consumers allocating their income for healthcare, the economy's pricing mechanism for allocating investment resources is broken and dysfunctional. It is over allocating investment and resources to the medical industry that otherwise would go to other industries with a better return. Consumers are also using more medical services than they would with a functioning price mechanism.

Any government program must be funded, but to most people their actual expected cost of medical services is higher than they want to or can afford to pay. If people were willing to pay for medical services out of pocket, they would only need insurance for catastrophic illnesses with extraordinarily high expenses.

Most government solutions attempt in part to keep the cost borne by the average user low by subsidizing and shifting some of the unpaid cost to a few others who pay more through higher taxes. This resolution does nothing to restore the pricing mechanism, and usage and cost will continue to grow. When costs are shifted and not borne by the end-user, the government is forced to delay, ration, deny and otherwise restrict services to contain growth in costs and use. The experience of most countries with a government health care system is rationing, delays and denials of services.

The true long-term solution to our healthcare problems is to repair and restore the pricing mechanism for consumer use of health services. One way to do it is to remove the employer tax deduction for health benefits and to end all government employee healthcare benefits. These changes will reinstate the pricing mechanism at the user level. However, the government will need to develop backstop programs for catastrophic illness and catastrophic injury and for consumers who are too poor to pay for healthcare or health insurance.

Once there is a fully functioning pricing mechanism for medical services, most of the problems will disappear. Usage will slow down without any ill effects. Producers will have tremendous incentive to lower costs of services. Consumers will decide how to best allocate their income between health services and other uses of their income. Medical services as a part of GDP will decline. Only cost effective drugs and treatments will be developed and promoted. With a proper government program, the poor and those with catastrophic illness will have medical care at a much lower cost than now.

Our current problems of excessive cost and excessive usage are the result of a broken pricing mechanism. A government program, whether it is government healthcare, government insurance, cost effective restrictions on usage, or other restrictions, will not fix the pricing and medical system. They will create new problems. Only a complete reinstatement of the pricing apparatus at the consumer/user level will solve our healthcare industry problems.

US Income Tax Is Progressive Even After Deductions And Tax Credits: Rich Do Not Pay A Lower Tax Rate Than Other Taxpayers

From Tax Foundation, "Even After Deductions and Credits, the Income Tax System Is Progressive" by Andrew Lundeen and Scott A. Hodge:
People mistakenly believe that because the rich benefit from many popular tax deductions and credits, they pay a lower average (or “effective”) tax rate than other taxpayers. This is not the case. The average tax rate for all Americans is about 10.4 percent. However, taxpayers earning over $1 million pay a 23 percent effective rate and taxpayers earning over $250,000 pay a 21 percent effective rate— more than twice the national average.

Meanwhile, “middle class” taxpayers earning between $50,000 and $100,000 pay an effective rate below the national average—just 9 percent. The effective tax rate for Americans making less than $30,000—who owe no income taxes—is actually negative due to refundable credits that give them a check back from the IRS.

Source: Tax Foundation