Preface: The Dem plan was a disaster waiting to happen, thank goodness it looks like most provisions in it will not see the light of day.
Problem is health insurance. In order to solve the health care crisis in America we need to remove health insurance from all but catastrophic care. Insurance should be for major injuries or things like cancer only. All routine care should be paid via individuals directly.
The correct health care system of a nation must take basic cultural norms and attitudes into account. The right system for Europe is not the right system for America. America has free wheeling, dynamic, hyper individualist culture that has little time for sacrifice for the common good and negligible respect for restraint. Health insurance for routine care in this kind of culture is asking for disaster - and that's what we have got. In this kind of culture the thinking will be "I already had to pay, so how can I maximize what I get". The only escape valves we have from bankruptcy now are a) 45 million Americans have no health insurance and get little or no medical and b) people can be denied coverage or dropped if they get really sick. I do not mean to imply this is a good thing (it's not!) but it is what prevents national bankruptcy.
The biggest reason that cost of medecine is so high in America because of the notion that "someone else has to pay". In a hyper-individualistic culture rife with competition this is asking for trouble. If you are sick or injured in America and you have health insurance you want the best doctor, you want the best care and cost is not a factor. You want the newest tests with the most expensive machines. Europe and Japan have a kind of restraint that is lacking in the U.S. and more of a communal oriented mindset. There would be some guilt feelings about using to much medical care. In America we don't even know what the bill is so how could we even start to feel guilty.
We should change our system to reflect our values and pay routine costs out of pocket and have insurance only for catastrophic health problems.
Friday, January 29, 2010
Monday, January 25, 2010
The big boys don't worry about walking away from their mortgage
http://finance.yahoo.com/tech-ticker/no-worries-about-%22morality%22-in-biggest-real-estate-default-in-history-411839.html?tickers=dia,spy,xlf,len,kbh,blk
Monday, January 11, 2010
Choosing winners and paying for failure
"A Flush G.M. to Lavish Cash on New Vehicles"
http://www.nytimes.com/2009/12/08/business/08auto.html?_r=1&hpw
Key points:
- GM has more cash now than at any other time in it's entire history.
- Virtually all of the cash came from the government (you and me).
- The last time GM had much of a cash cushion was during the height of the SUV era - which set the stage for it's current problems.
- GM invested in the Hummer, Toyota hybrid cars.
- Many of its products were not recommended to consumers in a recent survey by Consumer Reports magazine.
- GM now has more cash than Ford which did not need any help from the government.
At the top levels of Corporate America the following lessons must be pretty obvious:
1) If you are big enough, it does not much matter how well you run your business.
2) The most important relationship is not even with your customers, it's with Washington DC.
The apologists for this bailout might say that it was necessary to avoid a depression, so it's simply what we had to do. What about all those auto workers, what about all the GM middle managers, suppliers who sell to GM etc. etc.
That answer is that in a dynamic economy that is functioning as it should, most of what was good and valuable in GM would have been absorbed into other companies. Government money meant to help the auto industry could have gone to companies like Carbon Motors (www.carbonmotors.com and www.foxnews.com/story/0,2933,465329,00.html), Frisker Automotive (karma.fiskerautomotive.com/), and Tesla www.teslamotors.com. Why did GM get billions for the Volt when they have shown over the years that they really don't care about electric cars. Remember what they did about 10 years ago? They killed the whole market to clear the way for another wave of SUV's and Hummers!
They are engaged in making electric cars now because they have to.
Electric cars are at the core of Tesla and Friskers businesses.
But GM is much more powerful in Washington DC (and the state houses that matter).
http://www.nytimes.com/2009/12/08/business/08auto.html?_r=1&hpw
Key points:
- GM has more cash now than at any other time in it's entire history.
- Virtually all of the cash came from the government (you and me).
- The last time GM had much of a cash cushion was during the height of the SUV era - which set the stage for it's current problems.
- GM invested in the Hummer, Toyota hybrid cars.
- Many of its products were not recommended to consumers in a recent survey by Consumer Reports magazine.
- GM now has more cash than Ford which did not need any help from the government.
At the top levels of Corporate America the following lessons must be pretty obvious:
1) If you are big enough, it does not much matter how well you run your business.
2) The most important relationship is not even with your customers, it's with Washington DC.
The apologists for this bailout might say that it was necessary to avoid a depression, so it's simply what we had to do. What about all those auto workers, what about all the GM middle managers, suppliers who sell to GM etc. etc.
That answer is that in a dynamic economy that is functioning as it should, most of what was good and valuable in GM would have been absorbed into other companies. Government money meant to help the auto industry could have gone to companies like Carbon Motors (www.carbonmotors.com and www.foxnews.com/story/0,2933,465329,00.html), Frisker Automotive (karma.fiskerautomotive.com/), and Tesla www.teslamotors.com. Why did GM get billions for the Volt when they have shown over the years that they really don't care about electric cars. Remember what they did about 10 years ago? They killed the whole market to clear the way for another wave of SUV's and Hummers!
They are engaged in making electric cars now because they have to.
Electric cars are at the core of Tesla and Friskers businesses.
But GM is much more powerful in Washington DC (and the state houses that matter).
Sunday, January 10, 2010
The college admissions scam
Neal Gabler
The Boston Globe
The college admissions scam
By Neal Gabler
January 10, 2010
NEAL GABLER
The college admissions scam
By Neal Gabler | January 10, 2010
NOW IS the winter of high school seniors’ discontent. But then every winter is one of discontent as seniors file their college applications with a mix of dread and hope - mainly dread. Those applying to the most selective schools have the odds stacked against them no matter how sterling their high school records, though college admissions officers typically offer the cold comfort that rejection is not equivalent to failure and that, as one Yale admissions officer put it, “It matters far less which strong college admits you than it matters what you do with your opportunities once you are there.’’ To which most high school seniors would say, “Hogwash.’’
They know that it does matter where you go to college, if not educationally then in terms of social recognition and opportunity. They know that America, for all its professions of meritocracy, is a virtual oligarchy where the graduates of the Ivies and the other best schools enjoy tremendous advantages in the job market. They know that Harvard or Stanford or MIT is a label in our “designer education’’ not unlike Chanel or Prada in clothes.
So here is another, more realistic comfort to those anxious seniors who will soon be flagellating themselves as unworthy: The admissions system of the so-called “best’’ schools is rigged against you. If you are a middle-class youth or minority from poor circumstances, you have little chance of getting in to one of those schools. Indeed, the system exists not to provide social mobility but to prevent it and to perpetuate the prevailing social order.
Of course, colleges loudly deny this since it undermines their exceptionality. Instead, universities will protest that the system is meritocratic; that they consider every applicant objectively; that the admissions process is “need blind,’’ which means that financial support plays no role in whether an applicant is admitted or not.
Most of these assertions, however, are nonsense. Of course the odds are stacked against every applicant since the best schools admit only a fraction of them (less than 10 percent for most of the Ivies and just above 25 percent for selective schools like Northwestern and Emory), but as Daniel Golden demonstrated in a Pulitzer Prize-winning series for the Wall Street Journal and then in his book, “The Price of Admission,’’ the so-called “best’’ schools give heavy preferences to the wealthy; as many as one-third of admissions, he writes, are flagged for special treatment at the elite universities, one-half at the elite liberal arts colleges, and the number of open spaces for the non-privileged is reduced accordingly. As Golden puts it, the privileged take so many spots that the “admissions odds against middle-class and working-class students with outstanding records are even longer than the colleges acknowledge.’’
Golden’s focus was on legacy admissions, which are essentially affirmative action for the rich and which provide huge advantages for applicants; on what are called special “development’’ applicants - thosewho do not qualify for admission under the ordinary criteria but whose parents have pledged large contributions to the school; and athletes who are, contrary to popular belief, not all poor ghetto kids adept at football and basketball, but are primarily wealthy white kids who are adept at lacrosse, rugby, crew and polo.
But while these are overt ways to provide advantages for the wealthy, there are far more insidious and subtle methods of skewing the admissions process. Take early admissions. Early admissions account for 35 percent of the incoming class at Duke this year, 20 percent at Brown, 50 percent at Yale and 40 percent at Stanford. Under most programs, early admittees are obligated to attend that school should they be granted admission. But early admissions favor the wealthy - in part because they are able to forgo weighing options for financial aid.
Then there is the “well-rounded student body’’ argument, which any parent accompanying his child on the college tour rounds has heard ad nauseam. According to this approach, colleges are not looking for the well-rounded individual student. They are aiming instead for a diverse student body: an exceptional athlete, an exceptional musician, an exceptional scientist, an exceptional poet. Except that exceptionality, as most parents can attest, doesn’t come cheap. Athletes require coaching and often traveling teams; musicians require lessons and instruments; scientists require labs and internships; poets require classes and opportunities for publication. None of these things is readily available to the average middle-class family, to say nothing of the high school student who must work at McDonald’s to earn spending money (even though colleges say they take this into account).
Nor does diversity extend to racial composition. Of course every college boasts about its efforts to enroll a more racially diverse student body. But here are the facts: A New York Times article in 2004 revealed that Harvard’s incoming freshman class was 9 percent black, but between one-half and two-thirds of those black students were actually West Indian or African immigrants or the children of immigrants, and many others were biracial. In short, they weren’t African-American. Another 2004 study, conducted by Princeton and the University of Pennsylvania, also found that 41 percent of blacks at 28 selective colleges and universities identified themselves as immigrants, underscoring the West Indian and African component.
The prognosis is equally poor for economically disadvantaged students, whether black or white. According to Golden, economic diversity counts the least in admission considerations, and only 3-to-11 percent of admittees come from the lowest economic quartile. In fairness, some universities, including Harvard, are offering full scholarships to financially strapped families, but this does not necessarily affect the admission of those students.
A counselor told me when my daughters were applying for college admission that the first thing I had to do was withdraw my application for financial aid. When I said that colleges professed to be “need blind,’’ she laughed. Any admissions officer, she said, could tell from your zip code whether you were likely to need aid or not, and students needing aid were much less desirable than those who didn’t need it.
But perhaps the most pernicious means of maintaining the status quo was devised, ironically, in the name of making the system more meritocratic. No one disputes that once upon a time elite schools were the preserve of wealth and influence. When the SAT was instituted in the 1920s it was done precisely in the name of changing the admissions process to a more egalitarian one. By providing an allegedly objective measure of a student’s intellect, the best schools could no longer be castigated as impregnable. Do well, get in. At least that’s what middle-class Americans dreaming of their children’s social advancement have been told.
In truth, the SAT, which is thankfully being phased out at many schools, has had the opposite effect. Far from opening the doors of elite schoools to outstanding students from ordinary backgrounds, it has wound up giving an objective patina to an unjust process. In some ways it is the great subterfuge. That’s because SAT scores correlate highly to family income - an average of 12 point increments for every $20,000 of income, which this year amounted to a 130 difference on critical reasoning, 80 points on math and 70 on writing between the lowest income and highest income groups. While correlation isn’t always causality, economics professor Jesse Rothstein of Berkeley has called it a proxy for other demographic components and for high school resources. And, not surprisingly, Professor George Kuh of Indiana University, has found that the US News list of best colleges has an almost 100 percent correlation to SAT scores, which means that the so-called best schools could just as easily be ranked by family income.
So here’s the bottom line for all those exceptional middle-class and lower-class high school seniors who will doubt their own worth when the near-inevitable rejection letters arrive: The fault, dear Brutus, lies not in you. The fault lies in the system, and the system isn’t going to change, because it benefits the people it is designed to benefit - people who understand how much a real meritocracy would threaten their power.
Neal Gabler is the author, most recently, of “Walt Disney: The Triumph of the American Imagination.’’
The Boston Globe
The college admissions scam
By Neal Gabler
January 10, 2010
NEAL GABLER
The college admissions scam
By Neal Gabler | January 10, 2010
NOW IS the winter of high school seniors’ discontent. But then every winter is one of discontent as seniors file their college applications with a mix of dread and hope - mainly dread. Those applying to the most selective schools have the odds stacked against them no matter how sterling their high school records, though college admissions officers typically offer the cold comfort that rejection is not equivalent to failure and that, as one Yale admissions officer put it, “It matters far less which strong college admits you than it matters what you do with your opportunities once you are there.’’ To which most high school seniors would say, “Hogwash.’’
They know that it does matter where you go to college, if not educationally then in terms of social recognition and opportunity. They know that America, for all its professions of meritocracy, is a virtual oligarchy where the graduates of the Ivies and the other best schools enjoy tremendous advantages in the job market. They know that Harvard or Stanford or MIT is a label in our “designer education’’ not unlike Chanel or Prada in clothes.
So here is another, more realistic comfort to those anxious seniors who will soon be flagellating themselves as unworthy: The admissions system of the so-called “best’’ schools is rigged against you. If you are a middle-class youth or minority from poor circumstances, you have little chance of getting in to one of those schools. Indeed, the system exists not to provide social mobility but to prevent it and to perpetuate the prevailing social order.
Of course, colleges loudly deny this since it undermines their exceptionality. Instead, universities will protest that the system is meritocratic; that they consider every applicant objectively; that the admissions process is “need blind,’’ which means that financial support plays no role in whether an applicant is admitted or not.
Most of these assertions, however, are nonsense. Of course the odds are stacked against every applicant since the best schools admit only a fraction of them (less than 10 percent for most of the Ivies and just above 25 percent for selective schools like Northwestern and Emory), but as Daniel Golden demonstrated in a Pulitzer Prize-winning series for the Wall Street Journal and then in his book, “The Price of Admission,’’ the so-called “best’’ schools give heavy preferences to the wealthy; as many as one-third of admissions, he writes, are flagged for special treatment at the elite universities, one-half at the elite liberal arts colleges, and the number of open spaces for the non-privileged is reduced accordingly. As Golden puts it, the privileged take so many spots that the “admissions odds against middle-class and working-class students with outstanding records are even longer than the colleges acknowledge.’’
Golden’s focus was on legacy admissions, which are essentially affirmative action for the rich and which provide huge advantages for applicants; on what are called special “development’’ applicants - thosewho do not qualify for admission under the ordinary criteria but whose parents have pledged large contributions to the school; and athletes who are, contrary to popular belief, not all poor ghetto kids adept at football and basketball, but are primarily wealthy white kids who are adept at lacrosse, rugby, crew and polo.
But while these are overt ways to provide advantages for the wealthy, there are far more insidious and subtle methods of skewing the admissions process. Take early admissions. Early admissions account for 35 percent of the incoming class at Duke this year, 20 percent at Brown, 50 percent at Yale and 40 percent at Stanford. Under most programs, early admittees are obligated to attend that school should they be granted admission. But early admissions favor the wealthy - in part because they are able to forgo weighing options for financial aid.
Then there is the “well-rounded student body’’ argument, which any parent accompanying his child on the college tour rounds has heard ad nauseam. According to this approach, colleges are not looking for the well-rounded individual student. They are aiming instead for a diverse student body: an exceptional athlete, an exceptional musician, an exceptional scientist, an exceptional poet. Except that exceptionality, as most parents can attest, doesn’t come cheap. Athletes require coaching and often traveling teams; musicians require lessons and instruments; scientists require labs and internships; poets require classes and opportunities for publication. None of these things is readily available to the average middle-class family, to say nothing of the high school student who must work at McDonald’s to earn spending money (even though colleges say they take this into account).
Nor does diversity extend to racial composition. Of course every college boasts about its efforts to enroll a more racially diverse student body. But here are the facts: A New York Times article in 2004 revealed that Harvard’s incoming freshman class was 9 percent black, but between one-half and two-thirds of those black students were actually West Indian or African immigrants or the children of immigrants, and many others were biracial. In short, they weren’t African-American. Another 2004 study, conducted by Princeton and the University of Pennsylvania, also found that 41 percent of blacks at 28 selective colleges and universities identified themselves as immigrants, underscoring the West Indian and African component.
The prognosis is equally poor for economically disadvantaged students, whether black or white. According to Golden, economic diversity counts the least in admission considerations, and only 3-to-11 percent of admittees come from the lowest economic quartile. In fairness, some universities, including Harvard, are offering full scholarships to financially strapped families, but this does not necessarily affect the admission of those students.
A counselor told me when my daughters were applying for college admission that the first thing I had to do was withdraw my application for financial aid. When I said that colleges professed to be “need blind,’’ she laughed. Any admissions officer, she said, could tell from your zip code whether you were likely to need aid or not, and students needing aid were much less desirable than those who didn’t need it.
But perhaps the most pernicious means of maintaining the status quo was devised, ironically, in the name of making the system more meritocratic. No one disputes that once upon a time elite schools were the preserve of wealth and influence. When the SAT was instituted in the 1920s it was done precisely in the name of changing the admissions process to a more egalitarian one. By providing an allegedly objective measure of a student’s intellect, the best schools could no longer be castigated as impregnable. Do well, get in. At least that’s what middle-class Americans dreaming of their children’s social advancement have been told.
In truth, the SAT, which is thankfully being phased out at many schools, has had the opposite effect. Far from opening the doors of elite schoools to outstanding students from ordinary backgrounds, it has wound up giving an objective patina to an unjust process. In some ways it is the great subterfuge. That’s because SAT scores correlate highly to family income - an average of 12 point increments for every $20,000 of income, which this year amounted to a 130 difference on critical reasoning, 80 points on math and 70 on writing between the lowest income and highest income groups. While correlation isn’t always causality, economics professor Jesse Rothstein of Berkeley has called it a proxy for other demographic components and for high school resources. And, not surprisingly, Professor George Kuh of Indiana University, has found that the US News list of best colleges has an almost 100 percent correlation to SAT scores, which means that the so-called best schools could just as easily be ranked by family income.
So here’s the bottom line for all those exceptional middle-class and lower-class high school seniors who will doubt their own worth when the near-inevitable rejection letters arrive: The fault, dear Brutus, lies not in you. The fault lies in the system, and the system isn’t going to change, because it benefits the people it is designed to benefit - people who understand how much a real meritocracy would threaten their power.
Neal Gabler is the author, most recently, of “Walt Disney: The Triumph of the American Imagination.’’
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