The only meaningful reform for healthcare would be policies that take aim to reduce costs in the dysfunctional healthcare market.
For instance, by cutting state-line restrictions and allowing healthcare insurers the ability to sell coverage anywhere in the United States, and by decoupling healthcare insurance from employment agreements (that is, allowing consumers to buy coverage just as they do auto insurance), this would provide a tremendous rise in competition and thus lower healthcare premiums.
Such actions, however, are not favored by the healthcare insurance industry, so we’ll have to wait for a real crisis in the healthcare market to occur before substantive reform starts.
In the meantime, I must ask: If this recent healthcare reform that was rammed through the House of Representatives over the weekend truly has any meaning in terms of reducing costs, then why are healthcare stocks on the rise today?
So, where does china fits in, what seems to be an issue of individual countries and their money management?
It’s just as simple as this, u are running a wholesale shop in a market. Some one brings (exports) tomatoes daily… there are other tomato suppliers for you but he supplies it cheap and in huge mass. So most of the shop owners buy tomato from him. But, he is not buying anything from you. Even though you want to settle his balance with some potatoes and dal from your shop, he says, just give me money, and you have been doing this. One fine day you realize that, all your goods are stagnant/ no demand for your products and money leaves from your pocket daily. You wanted to see, what the tomato vendor is doing in the backyard after getting payments from you…
1) He is not giving money to his wife and other labours who work in the family to spend the money.
2) He spends all his money in buying new fields and investing in producing cheap tomatoes
3) He indirectly lends you money to run your shop, through bonds which you issue.
4) He gets more customers by selling tomatoes at low price and eliminates small farmers from market.
One fine day, u and ur relatives, wake up and tell him, boss, better u spend the money on other things, otherwise we will levy tax on your tomatoes and you will suffer, because ur neighbour is ready to give tomatoes and will listen to us..
He retaliates back that,
1) If I don’t give tomato, Ur shops will need to buy at a higher price and as such u idiots don’t have the habit of saving money, will find very difficult to buy products from others which will be costlier than mine.
2) I will stop lending you money and will sell all the loan bonds given to you in the market at a cheaper rate, and your money value will go down since I sell in huge quantity and less demand will be there , and because you are the leader of all shops, everyone will collapse.
This is what exactly the situation happening between China and US. But is this a matter of concern only for US and not for other countries? Why are they silent on these issues? To understand in a broader manner, we need to understand
• What role currency plays in economy,
• What appreciation or depreciation means for one country and relative countries,
• How currencies are related to each other etc, in detail.
Dr. Kiggundu is gone for good but there is still hope for the revival of the Greenland bank one day if what we read in the newspapers was true. I’m among the few Ugandans and muslims who are still confused as to why Greenland was closed abruptly like that. My understanding is that General Saleh secretly purchased UCB through Greenland bank. General Saleh himself announced that he took over the bid from the Malaysian investors to keep the bank under local hands and this was in December 1998.Immediately after General Saleh’s announcement, Greeenland bank was placed under state management. Greenland bank had subsidiaries in Tanzania and Kenya (commercial Bank and foreign exchange in Kenya respectively) which were also later closed. Nobody in the government has come up to give us a detailed explanation of why the Greenland Empire was closed and whether this was necessary at the time. It is the kind of pain we have been carrying for ages and it became so much when the death of Dr.Kiggundu struck us.
Secondly, Greenland was closed when the country’s savings were improving. Before the emergency of Greenland, the savings stood at 3% of the GDP compared to 6% of GDP in 1998. At that time, Kenya had a savings rate of 22% compared to the now ill-managed Zimbabwe which had a savings rate of 32% by then. When the savings rate is higher it means there are more funds that can be borrowed for development. Ugandans can borrow money in great number to their things. All this went into decline after the closure of Greenland Bank because so many people were relying on that bank. Was the closure of Greenland an act of a president who loves rapid development in the country?
The only major management error I blame Dr. Kiggundu is the principle of disclosure in the banking sector and he was jailed for 6 months because of some of these errors. Disclosure is about providing information to the outsiders about the organization. This includes corporate social disclosure. This is where the society wants to know what it gets from the business for supporting it. It is when the society and other third parties see such benefits that they see the organization as legitimate. Whereas developed countries have disclosure measures, the developing countries like Uganda don’t have the culture of disclosure. No ends of year accounts are shown! Even banks that should display their financial statements don’t do so! That is why in 1998, Greenland Bank Ltd, and Cooperative Bank Ltd were closed by Bank of Uganda, without any sign of financial weakness being known by the customers. So this was wrong on the side of Dr. Kiggundu but still the state should not have closed the bank. The Gordon Brown government used all the means at its disposal to save the Northern Rock Bank despite the problems they were having because Gordon loves his country and he loves the common man on the ground in the UK.
Other reasons which were given by the economists in the country for the closure are all considered just schools of thought including: failure to meet the minimum capital requirements, insider lending, corruption and mismanagement as the causes. This is all nothing when you are a politician who loves your people.The root cause of commercial banks’ problems lies in their desire to increase profits by rapidly expanding their asset portfolio (by extending loans) for which there are no adequate provisions in the form of a capital buffer. Greenland bank did this by investing in a variety of businesses and lending to people without security, and it would have worked if they had been given a chance with time to rectify their mistakes. Remember, these were long term investments NOT short term investments. Yes, Dr.Kiggundu was running the risk of the inadequacy of minimum capital standards in accounting for the risk in banks’ asset portfolio but so many international banks run this risk. In the UK here, people access credit without any security and there was nothing weid that Greenland was doing in the banking sector. I also heard that a Saudi investor offered to fix the capital problems Greenland was experiencing at the time but still the government declined the offer. All they wanted was to close the damn Greenland Bank.
Lastly, Bank of Uganda (BoU) introduced new banking rules after the closure of Greenland to justify their act but why didn’t they give Greenland more time to operate under the new rules. According to the BoU new policy, all banks will be required to maintain sufficient capital, while those under-capitalised will not be bailed out. Under the revised minimum deposit requirements, all commercial banks – both local and foreign-owned – are required to maintain at least a minimum balance of USh1bn (US$750m). All banks are required to comply with all the provisions of the Financial Institutions Statute (FIS) of 1993. According to the BoU, they will only intervene in banks that either fail to meet the capital requirements or comply with the laws and regulations as stipulated in the FIS Act. ´Where a bank is intervened and closed, the BoU´s commitment to the depositors will be limited to USh3m per depositor, covered under the Deposit Insurance Scheme´, the bank stated. My question is how is a Ugandan in USA going to recover her money now if she wakes up one morning when one of the banks in Uganda is closed particularly if her savings exceed USh3m? Can anybody also convince voters in Uganda that Kiggundu’s Greenland had failed to raise the capital of USh1bn to keep itself in business? Can you also tell voters in Uganda of what the judicial inquiry commission found and recommended after the closure of different banks in Uganda that year? This was a commission set up by Finance Minister Gerald Sendaula. Why isn’t all this information made public up to now?
KUHNER: Impeach the president? – Washington Times.
The Slaughter Solution is a dagger aimed at the heart of our system of checks and balances. It would enable the Democrats to establish an ominous precedent: The lawmaking process can be rigged to ensure the passage of any legislation without democratic accountability or even a congressional majority. It is the road to a soft tyranny. James Madison must be turning in his grave.
One only needs to turn on Fox News to hear that communism is going to destroy us all, or that Obama is a socialist and wants to turn us into the USSR. Conservatives seem to be convinced that communism will be the end of us all. On the other side, there are those that believe that capitalism takes advantage of the poor and marginalized. Examples like Nike or Wal-Mart show that people can use the economic system of capitalism to do just that. Some even go as far as saying Jesus was a communist or a capitalist, both sides proof-texting their point. I have my problem with people saying that Jesus held to one economic system but that is another post.
The truth I think that most fail to see though is neither system is inherently evil. They are two different systems that try to distribute wealth equally. Although, they have two different definitions of equal. This leaves the largely not talked about side of the equation, humans. Humans are not only corruptible but corrupting agents. It is not hard to look for examples of where communism was corrupted, historically, Stalin did a number to Russia and innocent people died. In the modern day we see North Korea, under the iron fist of Kim Jong Ill, is perhaps one of the most terrifying examples of government tyrannical control. For capitalism, we see the example of sweat shops used famously by Wal-Mart, and Nike, and many other companies. Historically, while the industrial revolution was a time of great advancement, it was an age of human rights violations that caused the death of men, women, and children.
The truth is that if we want either of these systems to work, we have to become better people. Changing these systems starts on a personal level. We have to become conscious consumers. We have to be aware of the evil things companies do, and then shop at the ones that do as few of these as possible. Many times that means that we cannot shop at the cheapest place, but the trade-off means we are not hurting anyone. Also, we have to vote for laws that protect the marginalized groups. While this at times can seem like socialism, if at the end of the day it saves lives it is the right thing to do.
I was having an interesting conversation yesterday with a friend while discussing the proposition of finding someone from among the foreigners we know in Korea to fill an open position at my company. As we went over the various people we know, evaluating their Korean language skills, where they are in their careers and whether they would be interested in a job in the field in question, we managed to narrow down the field to a small number of individuals, and yet with seemingly all the appropriate candidates we repeatedly found the same problem. None of those most suited to the job appeared to be particularly motivated to start or continue careers. In most cases, the people we dismissed for this reason were dabblers. They came to Korea without any particular aim, and although they may have learned Korean here or known it already, for the most part they learned it without any particular career goal in mind. A few of the most qualified candidates were not interested in working at all, while others among them were not ready to decide what field they wanted to enter. I should mention that the people we were discussing are all current students at or recent graduates of Yonsei GSIS, and the ones we were primarily discussing were concentrating in trade and finance or management.
We were having a hard time explaining why this would be. Why would so many people who had taken their education to this level nonetheless be unprepared to begin their careers? What are they studying for, if not to help their job prospects?
I brought up, as I often do, leisure studies. Here’s an abridged excerpt from Thorstein Veblen’s The Theory of the Leisure Class that I’d had in mind:
The great, pervading human relation in such a system is that of master and servant. The accepted evidence of wealth is the possession of many women, and presently also of other slaves [i.e. servants] engaged in attendance of their master’s person and in producing goods for him . . .At the same time those servants whose office is personal service, including domestic duties, come gradually to be exempted from productive industry carried on for gain. . . This process of progressive exemption from the common run of industrial employment will commonly begin with the exemption of the wife, or the chief wife. . . By virtue of their serving as evidence of the ability to pay, the office of such domestics regularly tends to include continually fewer duties, and their service tends in the end to become nominal only. . . [T]here arises a subsidiary or derivative leisure class, whose office is the performance of a vicarious leisure for the behoof of the reputability of the primary or legitimate leisure class. . . his leisure normally passes under the guise of specialized service directed to the furtherance of the master’s fullness of life.
Compare this to a recent entry in the Stuff White People Like blog on picking fruit:
Many of you might be familiar with the process of harvesting a crop, some of its more intense variations are often referred to as “migrant labor” and “slavery.” Under these conditions, laborers are expected to work extremely hard in order to live up to large expectations about their fruit picking output.
When white people harvests a crop it’s known as “berry picking” or “pick your own fruit.” Under these conditions, white people are expected to work leisurely with no real expectations and then they pay for the privilege to do so. In other words, berry picking is the agricultural equivalent to a private liberal arts college. It’s no surprise white people like it, because much like a liberal arts degree it feels like you’ve done real work when you really haven’t.
Based on the same line of reasoning, I argued to my friend that those students that we know who have no intention of finding gainful employment in the near future and particularly those who lack even an idea about how to do so should be viewed as luxury accessories of their parents. In this way, I would say that raising one’s children in the suburbs, away from where gainful employment is performed and money is actually made, turns the sheltered suburban child into a human status marker for the parent. Among US baby boomers in particular, where there sometimes seems to be a marked lack of concern for one’s children’s economic success, and any higher education is anachronistically viewed as a gateway to one or another form of success, this appears to be the rule rather than the exception.
Of course this doesn’t hold true in every case, but then again if it did you’d probably already have noticed it and I wouldn’t need to write this, would I?
I have followed David Rosenberg, who is the Chief Economist/Strategist at Gluskin Sheff, for about 2 years. He is known to be out of consensus and really gives you an alternative look at where we are in this recovery cycle versus many of the main stream views that are currently circulating. In today’s morning note, Rosenberg highlights where we would be if this was a “normal” cycle:
Employment would already be at a new high, not 8.4 million shy of the old peak.
The level of real GDP would already be at a new cycle high, not almost 2% below the old peak.
Consumer confidence would be closer to 100 than 50.
Bank credit would be expanding at a 14% annual rate, not contracting by that pace.
The Fed would certainly not have a $2.3 trillion balance sheet.
The government deficit would not be running in excess of 10% of GDP or twice the ratio that FDR ever dared to run in the 1930s.
There would be a ‘clean’ 5-6 months’ supply of homes on the market, not the 21 months overhanging as is the case now when all the shadow inventory is included from the foreclosure pipeline.
The funds rate would not be near zero and one in six Americans would not be either unemployed or underemployed.
Mortgage applications for new home purchases would not be down 13.9% year-over-year (just reported for the week of March 12) on top of the already depressing 29.4% detonating trend of a year ago.
If you are interested to receive Dave’s morning note, you can sign up here: Gluskin Sheff
