GENERATING efficiency in the health-care market will be one of President Obama’s greatest challenges. To do this, he will have to create meaningful competition between drug companies, and between public and private plans. Congress’s attempt at market-driven health care offers good instruction in what not to do. Medicare Part D, the prescription benefit that went into effect three years ago, was supposed to let the elderly get their medicines more cheaply by creating competition between private insurers. Yes, the program has undeniably improved access to prescriptions. But the cost to taxpayers has been 3.5 times
Read More »Instead of placing sketchy bets with public money, the next administration might consider a few suggestions: First, Subsidies: To start leveling the field, phase out and eliminate subsidies and tax breaks for oil companies (begin there; coal comes later). The subsidies were established – and meant to be temporary – in an era when that industry needed help. Oil now gets larger tax incentives relative to its size than any other U.S. industry. It’s time to roll them back, not escalate subsidies for alternative fuels in a multi-front bidding war. Don’t shift subsidies from fossil fuels to
Read More »With oil reserves getting tighter, resource-rich countries becoming more aggressive and climate change prompting louder and broader calls for action, President-elect Barack Obama has promised to invest $150 billion “strategically” to build a clean energy future for America over the next 10 years – and create 5 million new jobs. Somehow, he needs to show the country how to hit a perfect trifecta of economy, ecology and employment – placing his bets quickly to build momentum, and overcoming political and bureaucratic machinery decades in the making. His vision compels and inspires: Millions of people working in sophisticated
Read More »When your car is burning oil, you have a few choices. Buy quart after quart and watch your money go up in smoke. Scrap it and try to manage without. Or overhaul the engine and keep it for the long run. As it stands, the $25 billion US auto industry bailout championed by congressional leaders amounts to another quart of oil. The only jobs it may save – temporarily – are those of executives, without forcing real accountability for management and unions. Hope, maybe. Change? Not a chance. But Republican resistance to intervention – the
Read More »This can’t wait. It begins with the recognition that, behind all of the explanations and recriminations, what ultimately brought down the financial house were volatile investments known as “derivatives” – idiosyncratic and inscrutable securities “derived” from other securities, such as bundles of home mortgages. If we fail to regulate them, we will continue to invite the financial equivalent of arson. The value of these financial abstractions has grown fivefold since 2002, to at least $531 trillion today. That’s nearly 10 times the total output of all of the goods and services the entire world produced
Read More »Conventions are scripted to rouse the rabble on the floor. But the raw meat served up to conventioneers – and eagerly consumed by old and (especially) new media – has less appeal than ever. Conventional wisdom says these are partisan events, where contenders must define themselves. But that too often leads them to caricature their opponents, and defile themselves, as definition of the other side becomes misleading and manipulative distortion. The political consultants who are paid to come up with such piffle will tell you that negative campaigning works. Truer to say the system works in
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Would you sign a contract that says, “Any term can be changed at any time for any reason, including no reason”? Anyone who uses a credit card already has. Such are the absurd terms of the consumer credit-card industry, which is poised to be the next big crisis (after housing) that banks have aided and abetted in US households. Americans have now racked up nearly $1 trillion in credit-card debt. As housing equity shrinks and costs rise, agencies such as Moody’s report swelling numbers of accounts with balances three or more payments past due. Reinforced
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Have you ever wondered how the federal government can bail out banks and mortgage-holders, cut your taxes, try to protect Social Security, expand your Medicare benefits, and send you a stimulus check – all at the same time? These may be symptoms of an embarrassing condition afflicting political parties, banks, and households across America: Deficit Attention Disorder (DAD). Unchecked, normal individuals (as well as politicians and bank CEOs) afflicted by DAD start to believe in money that doesn’t exist. This silent assassin of fiscal sanity overheats your credit card, sells you a make-believe mortgage, makes
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