Reprint Of "Healthcare Reform Is Risky And Scary" Post

The following is a reprint of a post I published on this blog 4 years ago in 2009. It was wriiten prior to the passage of the Affordable Care Act and is still appropriate.

Monday, September 21, 2009

Healthcare Reform Is Risky And Scary: Every Healthcare Proposal Needs Measurable Milestones And A Sunset Provision

Posted By Milton Recht

Healthcare reform is risky and any legislation needs measurable milestones at a fixed time interval, e.g. five years after passage, with an automatic sunset provision if the independently measured milestones are not met. There are known health related and cost reasons for passing health reform legislation so let us write these reasons into the legislation as measurable numerical target milestones. Milestones can be many different targets, such as reduction in the number of uninsured to a predetermined level, a reduction in costs by a preset amount or percentage, etc. If the goals of the legislation turn out to be overly optimistic and not achievable, then let us have Congress reconsider the need for the legislation by having them actively vote for the continuation of the program at some later date. An automatic sunset provision in the legislation will require Congress to stand up and voice their reasons for voting on the continuation of the law that is not achieving its original intended goals.

Anyone who has ever read or prepared a business, strategic or operating plan for a new product, business or division knows, despite the best attempts and intentions, there is a lot of risk and uncertainty about the success of a new endeavor. There is also uncertainty about the accuracy of the projections of future sales, revenues, customers, market share, costs, profits, etc. Additionally, most new business ventures fails despite planning.

Despite the best intentions of the President, Congress and all their advisors, making significant changes to the current healthcare system and insurance entails a lot of uncertainty and risk. We have some idea of the strengths and weaknesses of the current healthcare arrangement in the US, but we only have conjectures about the effects of the changes that will occur by healthcare reform legislation. There is a chance that health reform legislation will pass but fail to achieve any of its goals and possibly make health care and insurance costs worse in the US.

Business mitigates its risks in new endeavors by pacing its roll out and evaluating successfulness. It might open a few stores to see how they do before it rolls out all the stores, or it might put a new product in a few areas to see if it sells well before it does a nationwide rollout. If things are not working as planned, a business might abandon the whole concept. Unfortunately, that is not how new legislation generally works. It is usually all at once, a regional rollout without reevaluation, or nothing. Legislative passage does not usually allow for abandonment after a law is passed because it is not working as planned. In business, investors and creditors stop putting new money into losing ventures and businesses cease to exist.

Healthcare is about 17 percent of US GDP. The healthcare industry is also hiring and growing during this period of high unemployment and recession. There is a lot at risk to the US economy, workforce and the public's healthiness if Congress unintentionally mucks things up.

I do not get any sense from the President's speeches or from Congress that there is general awareness of the risk involved to the US economy, healthcare industry, and the US workforce if passed health reform legislation does not work as planned.

A business is constantly evaluating the success of its endeavors through the measurement of profit. If the activities fail to be profitable, business will either close the activity down or make significant changes, such as cut costs, change product offerings, modify pricing, etc. to attempt to make it successful. Government programs are not measured by profit and are rarely shut down or responsively modified quickly to changes in strategy or the environment.

Putting a sunset provision in the law with realistic measurable metrics will, at least show that Congress and the President understand that despite good intentions there is a lot of risk and uncertainty about how new healthcare reform legislation will play out if it is passed. A sunset provision will also minimize the damage that a mistake could cause to the US economy, workforce and the health insurance and healthcare of US residents.

Reprint of 2009 Post, "Why Health Reform Did Not Get Bipartisan Support But Medicare And Social Security Did"

A reprint of my 2009 post on this blog on why healrh reform did not get bipartisan support when other entitlement programs did.

Monday, December 21, 2009

Why Health Reform Did Not Get Bipartisan Support But Medicare And Social Security Did

Posted By Milton Recht

It has always been about costs. Debt for social programs was not as big an issue in the past. When Social security passed, US life expectancy was below retirement age. You worked until you died. Workers paying for retirees was a feasible plan. See, http://www.infoplease.com/ipa/A0005148.html.

Medicare started as universal health, but became a senior health plan to pass and life expectancy was about 6-7 years less than now and doctor and hospital usage was much lower. The 65 year olds at that time were before baby boomer retirees' bulge and before the retirees of US population growth of the immigration influx of early 1900s and there was the belief the Medicare tax would pay for it.

Finding the money for social programs is much more difficult now. We have expanded the numbers and percentage of the population we include and are much less willing to tax those workers who will benefit as we did with social security and Medicare.

Now we want to tax the rich to pay for an ever-expanding list of needs of the rest of the population.

Every economist recommended eliminating the employer deduction for worker health benefits. The new tax receipts would have funded the entire plan. President Obama took off the table the ability to do the most economically sensible thing to reform health care. Obama also committed to not taxing the middle class, eliminating the ability of Congress to tax those who would benefit, such as taxing workers before they lost their health insurance to unemployment and middle class individuals before they got pre-existing conditions.

Much of the Congressional health care spectacle is because Obama tied the hands of Democrats and prevented them from doing the most sensible things to achieve their goal of universal health care. Obama turned it into class warfare and a conservative versus liberal war through the removal of many of the best options for independent, conservative and republican agreement with the plan.

In doing so, Obama's initial actions resulted in many bad compromises and provisions in the final reform that would not have been there otherwise. Obama will get credit for passing health reform, but he should also take the credit for being the cause of many of the bad provisions in it.

Half Of States Will See Material Decline In Health Insurer Competition On Exchanges: Third Of Current State Health Insurers Opted Out Of Exchanges: Low Competition Leads to High Future Rate Increases

From USA Today, "Big insurers avoid many state health exchanges" by Jayne O'Donnell and Annika McGinnis:

So few insurers offer plans on some of the new government health insurance exchanges that consumers in those states may pay too much or face large rate increases later, insurance experts say.***About a third of insurance companies opted out of participating in the exchanges in states where they were already doing business, according to a recent report by McKinsey & Co. About half of states — which include about a third of the non-elderly insured population — will see a "material decline" in competitors, says McKinsey, while the other half of states will have about the same or more insurance choices on the exchanges.

"When there are too few carriers, down the road there will be issues with rate increases that make plans unaffordable for average Americans even with rate subsidies," says Bryce Williams, managing director of Towers Watson Exchange Solutions, which operates private insurance exchanges for companies. "We need competitive insurance markets in all states (and) multiple carriers competing hard."

19 Years From Idea To Market For A Marinating Stick, A Metal Tube With Holes, Without Any Regulatory Hurdles: Does Obama Or Congress Have Any Idea How Hard It Is In Real Life To Innovate Or Implement: ACA Anyone?

From The New York Times, "An Invention That Marinated for 19 Years" by Jack Hitt:

Later this month, Mary’s Marinating Sticks are scheduled to go on sale in Target stores. Mrs. Hunter’s invention follows the classic arc seen in movies: she had a good idea, got it patented and found a market.

But that’s the movies. In real life, it’s never that easy. For starters, Mrs. Hunter’s divine idea came to her in 1994. She’s been following through ever since.

It’s safe to say that many very good ideas never get out of the pew — or off the barstool — where they were conceived. Inventors are often quick to explain that a brilliant idea is the easy part and that the real work comes in navigating through the mundane problems and scut work of getting to market. Mrs. Hunter’s sticks are proof of that claim. [Emphasis added.]

Total Household Debt Falling Since 2009

From Federal Reserve Bank of Cleveland, Economic Trends, "Consumer Debt and the Housing Market" by Yuliya Demyanyk and Amy Higgins:

Household debt has been shrinking since 2009, and the latest data show the trend continues. Total consumer debt outstanding fell from $11.23 trillion dollars in the first quarter of 2013 to $11.15 trillion in the second quarter (Equifax, FRB NY CCP). In contrast, however, two components of overall debt rose over that period: Auto loans went up from $749 billion to $800 billion, and student loans went up from $986 billion to $994 billion.

Source: Federal Reserve Bank of Cleveland

Corporate Tax Slows GDP And Wage Growth

From Tax Foundation, "JCT: Corporate Tax Falls Partly on Labor" by William McBride:

First, capital and labor are the main inputs to production, and they are complementary, meaning taxing capital ultimately hurts workers. Think of how unproductive you’d be without computers, and how much less you’d get paid. Now think of where computers come from: companies that pay corporate tax. Raising the corporate tax on them reduces the number of computers produced. The chart below, from an economics textbook, shows what happens to workers' wages when there is less capital per worker.

Second, on average workers get about two-thirds of GDP growth in the form of wages, and capital gets about one-third. Taxing capital does not change that ratio, it just reduces GDP growth, thus reducing wage growth.

Third, capital is the most sensitive input to taxes. Capital is more mobile than labor, meaning capital can relatively easily move across borders to avoid taxes. Investors are also more sensitive to after-tax returns, so when faced with higher taxes on capital income they simply invest less and consume more. Most workers do not have the luxury of working considerably less when their after-tax wages go down.

Fourth, consistent with these results, most empirical studies find corporate taxes, and other taxes on capital, are the most harmful to economic growth. And since slower economic growth translates into slower wage growth, studies find that corporate taxes reduce wages.

US Can Be Regionally Divided By Residents' Personality Types: People Of Similar Temperaments Live In Same Parts Of US

From "Divided we stand: US regions exhibit distinct personalities" on ScienceBlog:

Americans with similar temperaments are so likely to live in the same areas that a map of the country can be divided into regions with distinct personalities, according to new research published by the American Psychological Association.

People in the north-central Great Plains and the South tend to be conventional and friendly, those in the Western and Eastern seaboards lean toward being mostly relaxed and creative, while New Englanders and Mid-Atlantic residents are prone to being more temperamental and uninhibited, according to a study published online by APA’s Journal of Personality and Social Psychology.

"This analysis challenges the standard methods of dividing up the country on the basis of economic factors, voting patterns, cultural stereotypes or geography that appear to have become ingrained in the way people think about the United States," said lead author Peter J. Rentfrow, PhD, of the University of Cambridge. "At the same time, it reinforces some of the traditional beliefs that some areas of the country are friendlier than others, while some are more creative."

Needless Federal Price Control Laws And Policies And Not OPEC Created 1970s Gasoline Rationing And Long Gas Station Lines

From Foreign Affairs, "The Myth of U.S. Energy Dependence: What We Got Wrong About OPEC's Oil Embargo" by By Gal Luft and Anne Korin:

Meanwhile, in the United States, another policy had already set the stage for the snaking gas lines and desperate drivers. The Economic Stabilization Act of 1970 gave the president control of wages, rents, and prices across the American marketplace, including the price of fuel. Whereas in 1970, the Mandatory Oil Import Quota Program had kept U.S. oil prices about 2.5 times higher than global prices, and politicians said nothing, the major price spike following OPEC’s 1973 production cuts sent the political and regulatory machinery into a spin. Politically unable to unwind fuel price controls and let the price of gasoline go up in sync with rising global oil prices, the U.S. government had made selling fuel in the United States a losing proposition for some refiners. This caused a reduction in domestic fuel supply. Demand did not drop because the government prevented prices from rising in a way that reflected market realities. The result was shortages at the pump, a spread of panic and uncertainty among buyers, and a doubling down by the government: the Emergency Petroleum Allocation Act, passed in November 1973, enabled the administration to embark on Soviet-style allocation and rationing of petroleum products.

Energy security is traditionally defined as the availability of sufficient supply at affordable prices. The collective memory of the embargo and the U.S. response to it were mostly shaped by the events that were perceived to affect availability -- the embargo and the gas lines -- rather than OPEC’s change of the supply-demand balance, which for decades has affected the affordability side of the ledger.

Charter Schools Better At Keeping At Risk Kids Out of Special Ed And Getting Kids Out Of Special Ed

From New York Post, "Charter schools the best hope for escaping special ed" by Mark Cunningham:

So it turns out that one big reason why New York City charter schools have fewer kids in special education is that a child at a charter is more likely to escape special ed than one attending a traditional public school. They do a better job getting kids out of it, and of keeping at-risk kids from falling into it.

Extensions Of Unemployment Benefits Increased Equilibrium Wage, Decreased Job Creation And Caused Persistent Increase In Unemployment: Macro Effects Research

From NBER Working Paper Series, "Unemployment Benefits and Unemployment in the Great Recession: The Role of Macro Effects" by Marcus Hagedorn, Fatih Karahan, Iourii Manovskii, and Kurt Mitman, NBER Working Paper No. 19499, October 2013:

ABSTRACT
We exploit a policy discontinuity at U.S. state borders to identify the effects of unemployment insurance policies on unemployment. Our estimates imply that most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility. In contrast to the existing recent literature that mainly focused on estimating the effects of benefit duration on job search and acceptance strategies of the unemployed -- the micro effect -- we focus on measuring the general equilibrium macro effect that operates primarily through the response of job creation to unemployment benefit extensions. We find that it is the latter effect that is very important quantitatively. [Emphasis Added.]

PAPER
5 The Role of Macro Effects

In equilibrium labor market search models, the dynamics of unemployment over the business cycle and the response of unemployment to changes in policies are primarily driven by employers’ vacancy creation decisions. Consider, for example, an increase in unemployment benefit duration. Having access to longer spells of benefits improves the outside option of workers and leads to an increase in the equilibrium wage. This lowers the accounting profits of firms and reduces vacancy posting to restore the equilibrium relationship between the cost of firm entry and the expected profits. Lower vacancy creation leads to a decline in labor market tightness, defined as the ratio of vacancies to unemployment. This lowers the job finding rate of workers and results in an increase in unemployment.

In this section, we present evidence on the empirical relevance of these macro effects. In particular, we document the effect of unemployment benefit extensions on vacancy creation, employment, and wages in the data.***8 Conclusion

In this paper we employed a state-of-the-art empirical methodology to measure the total effect of unemployment benefit extensions on unemployment. In particular, we exploited the discontinuity of unemployment insurance policies at state borders to identify their impact. Our estimator controls for the effect of expectations of future changes in benefits and has a simple economic interpretation. It is also robust to the heterogeneous impacts of aggregate shocks on local labor markets.

We found that unemployment benefit extensions have a large effect on total unemployment. In particular, our estimates imply that unemployment benefit extensions can account for most of the persistently high unemployment after the Great Recession. [Emphasis Added.]

Corporations Slow To Reallocate Assets To Higher Return Businesses, Even In Economic Downturns: McKinsey & Company

From McKinsey Quarterly, "Never let a good crisis go to waste: New research shows that actively reallocating corporate resources is even more important in a downturn than it is in good times." by Mladen Fruk, Stephen Hall, and Devesh Mittal:

The vast majority of organizations are surprisingly slow to reshuffle their resources. When we conducted a large-scale analysis of the reallocation patterns of multibusiness companies, for instance, we found that most of them awarded each business in their portfolio an unchanging percentage of total corporate capital year after year between 1990 and 2005. Yet the returns were higher and the volatility lower at organizations that reallocated more actively.

When we present these findings (which we highlighted in a previous McKinsey Quarterly article) to senior executives, they often ask us about the impact of the financial crisis and the downturn that followed. Surely, they argue, a tougher economic environment has led to more pronounced changes in resource-allocation patterns as companies were forced to look for new sources of value.

In fact, this proves not to be true. When we extended our analysis through 2010, thereby covering a full 20 years of performance by 1,500 companies, we found that the downturn had virtually zero impact on patterns of reallocation. There was apparently no greater aggregate corporate appetite for it in the tough recent years than there had been in the previous 15. [Footnotes omitted.]

It Is Illegal To Back Pay Furloughed Government Workers

I have tremendous sympathy for workers and households that suddenly find themselves without a paycheck.

I understand the motivation of politicians that do not want to anger future voters when their anger can be easily appeased with taxpayer dollars.

I suspect, despite the hardships, paying furloughed federal workers for not working is illegal and unconstitutional. It is not a payment for services rendered. It is not a payment based on a showing of economic or physical hardship, such as poverty or disability. Safety net programs, such as food stamps and unemployment benefits, are available to furloughed workers. Pay for furloughed time is a gift of taxpayer dollars to a special group. Disbursement of gifts to individuals is not a valid governmental interest.

Since the back pay law is not a law of general applicability, that is the law does not apply to all furloughed workers, just government furloughed workers, or to all persons affected by the government shutdown, just government workers, the law would appear to violate the 5th amendment's equal protection and due process interpretation.

My guess is a back pay law is unconsitutional.

Government Subsidies Responsible For High College Tuition And Unaffordability Of College

From The Wall Street Journal, "Richard Vedder: The Real Reason College Costs So Much The expert on the economics of higher education explains how subsidies fuel rising prices and why there's a 'bubble' in student loans and college enrollment." by Allysia Finley:

College costs have continued to explode despite 50 years of ostensibly benevolent government interventions, according to Mr. [Richard] Vedder, [Director, Ohio Universoty's Center for College Affordability and Productivity, author of book "Going Broke by Degree: Why College Costs Too Much"] and the president's new plan could exacerbate the trend. By Mr. Vedder's lights, the cost conundrum started with the Higher Education Act of 1965, a Great Society program that created federal scholarships and low-interest loans aimed at making college more accessible.

In 1964, federal student aid was a mere $231 million. By 1981, the feds were spending $7 billion on loans alone, an amount that doubled during the 1980s and nearly tripled in each of the following two decades, and is about $105 billion today. Taxpayers now stand behind nearly $1 trillion in student loans.

Meanwhile, grants have increased to $49 billion from $6.4 billion in 1981. By expanding eligibility and boosting the maximum Pell Grant by $500 to $5,350, the 2009 stimulus bill accelerated higher ed's evolution into a middle-class entitlement. Fewer than 2% of Pell Grant recipients came from families making between $60,000 and $80,000 a year in 2007. Now roughly 18% do.

This growth in subsidies, Mr. Vedder argues, has fueled rising prices: "It gives every incentive and every opportunity for colleges to raise their fees." [Emphasis added.]

Tax Foundation Ranks State Business Tax Climate: New York Has Worst Business Tax Climate: Wyoming Has Best

From Tax Foundation, "How Friendly Is Your State's Tax System? The Tax Foundation's 2014 State Business Tax Climate Index" by Scott Drenkard and Joseph Henchman:

Source: Tax Foundation

Federal Insurance Exchange Healthcare.gov Purportedly Cost $634 Million To Build: Way Over Initial Estimate Of $93.7 Million

From Digital Trends, "We paid $634 million for the Obamacare sites and all we got was this lousy 404" by Andrew Cout:

The reason for this nationwide headache apparently stems from poorly written code, which buckled under the heavy influx of traffic that its engineers and administrators should have seen coming. But the fact that Healthcare.gov can’t do the one job it was built to do isn’t the most infuriating part of this debacle – it’s that we, the taxpayers, seem to have forked up more than $634 million of the federal purse to build the digital equivalent of a rock.

The exact cost to build Healthcare.gov, according to U.S. government records, appears to have been $634,320,919, which we paid to a company you probably never heard of: CGI Federal. The company originally won the contract back in 2011, but at that time, the cost was expected to run “up to” $93.7 million – still a chunk of change, but nothing near where it apparently ended up.

Given the complicated nature of federal contracts, it’s difficult to make a direct comparison between the cost to develop Healthcare.gov and the amount of money spent building private online businesses. But for the sake of putting the monstrous amount of money into perspective, here are a few figures to chew on: Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $600 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

Obamacare Will Stifle Medical Innovation Due To Its Centralized Command And Control

From The Federalist, "What The Internet Teaches Us About Healthcare: Why decentralized decision-making drives innovation." by Pascal-Emmanuel Gobry:

Obamacare could cause untold unnecessary deaths by destroying healthcare innovation. To explain, let me offer an analogy.

In 1993, almost everyone in the technology industry agreed that the next wave of innovation in computing was going to be related to some global network to which consumers and businesses could be connected and shop and converse.

However, almost no one thought that this global network could be the internet, which was the province of academia and wasn’t user friendly.

In Silicon Valley in 1993 the conventional wisdom was that this global network would be some sort of connected TV run through the cable system, and that it would be controlled by gatekeepers (such as cable companies and media companies) which would approve and run the services that would be on top of it. ***Again, I want to emphasize the point that the key thing isn’t "the free market" vs "the gummit. [government]" As all ideological advocates note, the government had plenty of a role in creating the internet. But it did so in a decentralized fashion. If you read about the history of DARPA, when a guy had the idea for TCP/IP (the fundamental protocol on which the internet runs) he basically went to his boss who was an engineer like him and the guy said "Sure, I’ll give you $3 million [of 1960s money] to try it out" and the engineer went and convinced other guys who were assigned to other projects to work on it with him. That’s not how government typically works, but it’s definitely how decentralized trial-and-error innovation works.

When you see how extensively we use hospitals even though they are inherently dangerous places, you see potential for innovation being untapped.

Similarly, in healthcare, discussions of "free market" and "gummit" quickly lead to dead-ends. There’s no telling where one begins and the other ends. And because of widely-shared (including by me) moral intuitions about the desirability of common access to healthcare, government will always be involved in that sector. But the question is: how decentralized is decision-making? And the answer is: in most non-US countries, very little; in the US, not by much, and Obamacare makes it worse. This centralization is much more the fault of the insurance-driven view of healthcare than of the government as such.

US Economic And Market Risks Are Details Of The Negotiated Budget Settlement And Not US Bond Default: US Treasury Cash Inflows And Outflows

As the CBO stated at the end of September (see next paragraph), the US Treasury cash inflows from prepayment of taxes, mostly witholding from paychecks, is about $7 billion per day. The October 31 interest payment on US Treasury securities is about $6 billion dollars, or less than 1 day's receipt of funds, and the large quarterly interest payment on November 15 is about $30 billion, or about 4 to 5 days of cash inflows. The US government has more than sufficient cash inflows to avoid a default on US debt payments. 5 to 6 days cash inflows from witholding taxes on paychecks is sufficient to prevent a US debt default. Additonally, US government workers' salaries, and US payments to contractors and state and local governments will be delayed, not avoided, and the economic impact will be temporary and not equivalent to a slowdown in the economy caused by a permanent decrease in employment. The real risk to the future of the US economy and the stock and bond markets are the terms of the budget settlement between the President and the Congress. What if any increases in taxes will be agreed to and what if any cuts in US government spending, subsidies and entitlement programs will occur? The uncertainty to the markets and the economy is the terms of the budget agreement and not the prospect of a US debt default.

From Congressional Budget Office Report, September 25, 2013, "Federal Debt and the Statutory Limit, September 2013:"

What Are The Upcoming Key Dates For Treasury Cash Flows And Debt Issuance?
In the coming weeks, transactions on certain dates will have a significant influence on when the Treasury will exhaust the borrowing authority created by its extra-ordinary measures and will have insufficient cash to pay obligations as they become due.

Cash Outflows from the Treasury

• October 1—payments to Medicare Advantage and Medicare Part D plans; pay for active-duty members of the military; and benefit payments for civil service and military retirees, veterans, and recipients of Supplemental Security Income (about $42 billion, in total).
• October 3—payments of Social Security benefits (about $25 billion).
• October 9, 16, and 23—additional Social Security benefit payments (about $12 billion each time).
• October 31—payment of interest on Treasury securities (about $6 billion).
• November 1—payments of Social Security benefits (shifted from the third of the month, which falls on a Sunday); payments to Medicare Advantage and Medicare Part D plans; pay for active-duty members of the military; and benefit payments for civil service and military retirees, veterans, and recipients of Supplemental Security Income (about $67 billion).
• November 13—payments of additional Social Security benefits (about $12 billion).
• November 15—large quarterly payment of interest on Treasury securities (about $30 billion).
• Most of the benefit payments involve redeeming GAS securities from a trust fund, thereby temporarily providing additional room to borrow from the public in order to raise cash.
• In addition to these payments, government spending for its ongoing programs and activities is likely to average about $10 billion a day over the next several weeks, but can vary from one business day to the next.

Issuance of Government Account Series Securities
At the beginning of October, large investments will be made in both the Military Retirement Fund and the Medicare-Eligible Retiree Health Care Fund to account for the amortization of the unfunded liability for certain retirement benefits earned by military personnel for service before 1985 and for accrual contributions to cover the cost of future benefits for current military personnel. Those payments are expected to boost the amount of debt held by government accounts by a total of about $80 billion.

Also, in the middle of October, the Highway Trust Fund is expected to receive an intragovernmental payment from the general fund, thereby increasing debt held by government accounts by $12 billion.

Cash Inflows to the Treasury
Most inflows will be from remittances by employers of income and payroll taxes withheld from paychecks. Those remittances typically average about $7 billion per day but can vary significantly from one business day to the next.

Unpaid Intern Not Protected From Supervisor Sexual Harassment

From BloombergBusinessweek, Lifestyle, "Unpaid Intern Is Ruled Not an ‘Employee,’ Not Protected From Sexual Harassment" by Venessa Wong:

There’s plenty for unpaid interns to complain about—mainly, the lack of money—but apparently it gets worse. Because they’re not paid and don’t receive remuneration such as pension and life insurance, interns don’t always count as employees, which means they’re not always entitled to certain employee protections. For one former unpaid broadcasting intern at Phoenix Satellite Television U.S., that means not being able to bring a sexual harassment claim against her former supervisor, according to a Bloomberg BNA report.

More details available in the original Businessweek article.

Carbon Markets 16 Times Cheaper Than Renewable Subsidies

From Bloomberg, "Carbon Markets 16 Times Cheaper Than Renewable Aid, OECD Says" by Mathew Carr:

Carbon markets are more than 16 times cheaper at cutting greenhouse gases than renewable subsidies paid to power producers, according to the Organization for Economic Cooperation and Development.

The cost of reducing carbon dioxide in the electricity generating industry using emissions trading systems is 10 euros ($13.56) a metric ton on average, compared with 169 euros for feed-in tariffs, the OECD said today in a report. Some feed-in tariffs can cost more than 700 euros a ton, the Paris-based OECD said in the study based on data from 15 countries, including China and the U.S.

Younger US Workers Losing Educational Competitiveness Against International Counterparts

From The Wall Street Journal, "Younger Americans Fare Poorly on Skills Against International Peers: OECD Study Shows Baby Boomers Line Up With Peers in Industrial Countries" by Douglas Belkin:

The results show a marked drop in competitiveness of U.S. workers of younger generations vis a vis their peers. U.S. workers aged 45 to 65 outperformed the international average on the literacy scale against others their age, but workers aged 16 to 34 trail the average of their global counterparts. On the numeracy exam, only the oldest cohort of baby boomers, ages 55 to 65, matched the international average, while everyone younger lagged behind their peers—in some cases by significant margins.

In most cases, younger American employees outperformed their older co-workers—but their skills were weaker compared with those of other young people in OECD countries. By contrast, some countries are improving with each generation. Koreans aged 55 to 65 ranked in the bottom three against their peers in other countries. But Koreans aged 16-24 were second only to the Japanese.

The results show that the U.S. has lost the edge it held over the rest of the industrial world over the course of baby boomers' work lives, said Joseph Fuller, a senior lecturer at Harvard Business School who studies competitiveness. "We had a lead and we blew it," he said, adding that the generation of workers who have fallen behind their peers would have a difficult time catching up.