Friday, July 31, 2009

Fat Tax

Interesting take on the taxes that I mentioned in an earlier blog post: here. From the Economist. =)

Also, Greg Mankiw's blog post!

Stuff I wrote before about fat taxes and health care.

Thursday, July 30, 2009

Singapore and Tajikistan

One of the most efficient health care systems that we studied in Advanced Health Econ was that of Singapore. Bryan Caplan blogs about it here.

The Embassy has been rather busy this week...the IMF will be releasing a forecast of the Korean economy in the next few weeks. (Details on Korea's economic recovery coming soon!) Apparently, the IMF gets calls from other countries asking how Korea plans to recover from the financial crisis because Korea has been rather resilient in dealing with economic crises...

In other news: One of my housemates just returned from Tajikistan! He's in the army and was studying Farsi.

He told us so many stories about Tajikistan! Apparently, they have a lot of natural resources, but none of it is really tapped because it's as if the country is being run by the mafia. He pointed out that Tajiks are somewhat lazy in that most businesses are owned by Russians or Chinese immigrants. Of course, I argued that if property rights are non-existent and Tajiks are constantly afraid of expropriation, they would not be motivated to start businesses, etc. He agreed that Tajikistan's property rights are somewhat antediluvian. (GRE word, Jenn!) Apparently, if a man builds a business on a piece of land and gets killed, whoever gets there first (I'm assuming it would be the killer) could claim that piece of land. (To which I say, WTF?!) Jonny Steinberg mentioned that in Africa, there was a man who had a really successful store in the neighborhood and he told his neighbors that the store was owned by a white man because he was afraid of backlash from the neighbors, etc. Jonny said the man lived in constant fear that people would kill him out of jealousy. Maybe Tajiks have the same fear?

J bought a Russian fur hat in a store whose owner was on the losing side of the civil war. He had a whole bunch of fur hats of Russians that he had killed with pictures of their corpses...J bought the hat, but left the picture of the corpse at the store...

Also, if an American is shot by a Tajik policeman, the Tajik gov't shoots that policeman and calls it even stevens...

In another adventure, he was being driven up a path that had a rising cliff on its right side and a cliff edge on its left side. And if you looked over the cliff edge on the left side, you could see cars that had fallen off in the past. There were many...
Upon seeing these car-wrecks, his friend said, "why are we driving so close to the left?! I like the right side so much better!" Haha.

In Tajikistan, they eat something called "osh." Apparently it's served on a rug on the floor. It's a pile of rice and oil and onions. Everyone sits around the rug, sits on their left hand, and eats with their right. When J tried to wash his hands before eating, he was told that it was an insult because he was implying that the woman's rug was not clean. He got sick later that night.

Currently, J is enjoying his first real shower in 6 weeks. Apparently, the running water in Tajikistan is muddy, and he said he felt as if he were trading sweat for filth...

I hope he doesn't fall asleep in the shower!

Tuesday, July 28, 2009


While you hold your breathe and wait for me to post again (ha): Martin Feldstein in the Washington Post here. Remember him from my previous blog post?! We are obviously BFF.
Also, an older NYT editorial here.

Sorry it's taking me so long to post about other health care systems. It's difficult because there are so many that are better than our own...

Sunday, July 26, 2009

Dizzying Health Care in America

Things I remember from ECON 230 [Economics & Politics] and ECON 332 [Advanced Health Econ].

Basic Facts:

Medicaid: means-tested program that provides health insurance for low-income individuals. Medicaid is federally funded.

Medicare: not means-tested, which means even Bill Gates will receive Medicare. And why shouldn't he? He seems like a lovely fellow. I'm sure he will also need help from the government when he turns 65!
Anyway, it's for people over 65 years old who have paid Medicare taxes.

Medicare funding:
40% payroll taxes, 39% general revenues, 12% beneficiary premiums [yeah, I know, these numbers don't add up to 100, but that's what they are in the Kaiser factsheet]

Part A [Hospital Insurance]: 85% funding comes from payroll taxes (2.9% from employers and employees, each paying 1.45%), the rest comes from general rev.

Part B [Supplementary Medical Insurance/Non-hospital]: 75% general rev, 25% beneficiary premiums.

Part C [Medicare Advantage Plans/private]

Part D [Drugs, but not the bad kind. The gov't will not fund your crackhead habits!]: 77% general rev, 13% state payments for dual eligibility, 11% beneficiary premiums. [again, these numbers do not add up to 100]

U.S. Health Care Spending [click images to enlarge]

From, here.

Why Costs are Increasing
1. adverse selection/moral hazard: Unhealthy people are more likely to buy insurance. People with insurance are more likely to engage in dangerous/unhealthy activities, driving up health care spending.

2. malpractice insurance: Evs, I can't find the paper that we read about malpractice insurance for ECON 332, so correct me if I am wrong. I think this is what the paper said. I'll try to find it later...
Anyway, In rural areas, doctors have fewer patients per whatever unit of area you want to use than in cities. Therefore, when malpractice insurance costs increase, rural doctors pass these costs onto their patients. Since there are fewer rural patients per doctor, these patients feel increasing costs more acutely than do patients in the city. Overall, the impact of malpractice insurance premium increases is not very large...

3. defensive medicine/over-utilization: here

4. technological advances/improved quality of life: Clifford Asness of AQR Capital Management points this out (very avidly) in the paper linked in my previous post. (thanks, tina!) He says, "I’m reasonably certain the cost of 1950’s level health care has dropped in real terms over the last 60 years (and you can probably have a barber from the year 1500 bleed you for almost nothing nowadays). Of course, with 1950’s health care, lots of things will kill you that 2009 health care would prevent. Also, your quality of life, in many instances, would be far worse, but you will have a little bit more change in your pocket as the price will be lower. Want to take the deal?"

4. Americans are fat. When I was home, I saw a commercial protesting taxes on junk food and soda...has anyone seen it? I tried finding it on Youtube, but was unsuccessful. In the commercial, there's a family going camping, and they've packed chips and soda and stuff, and the voice in the background is like, "so many Americans are facing tough times, and now is not the time to tax simple pleasures like chips and blah blah blah. write to your congressman, etc, etc."

I'm sorry, simple pleasure of what? Being FAT? Is it much more difficult to pack baby carrot sticks and peanut butter than chips during a recession? Does the recession somehow make juice and water less appealing than soda? Does being FAT somehow make being poor more bearable? I don't get it...and this is coming from someone who also writes in a blog called Fat Kid Adventures.

Also, don't be like this. If someone asks you why HFCS is bad, you can respond with, "large quantities of fructose stimulate the liver to produce triglycerides, promotes glycation of proteins and induces insulin resistance." [wikipedia] in other words, it makes you FAT.

In one of my many classes with Prof. Johnson (I can't remember which), he pointed out that people who smoke around us are not just hurting our lungs, but they're stealing from us! His argument was as follows:
People who smoke are a negative externality because they are more likely to get lung cancer, throat cancer, etc. Health care spending will go up. As a result, health insurance premiums will go up. Of course, smokers pay more in premiums anyway, but I think the same logic can be applied to people who consume junk food excessively.

Health insurance companies have ways of attracting "good risks." Prof. McKnight told us about "3rd floor walk up" policies - policies that are meant to keep out those who wouldn't be able to walk up three flights of stairs without passing out. For example, some health insurance companies offer deals at ski resorts because they know that healthier people go skiing, spend more time working out, etc.

Sneaky, right? And you thought the health insurance companies just wanted you to have more fun...

Anyway, I need to go study for GRE. I finally registered for Sept. 24th!

But don't worry Tina, I'll post about other countries' health care systems. [South Korea, Singapore, etc] In ECON 332, different groups presented on different health care plans/countries. Those were fun...will post [soon!]

Friday, July 24, 2009

Dizzying Health Care in America [Intro]

So I just got a FB message from Tina asking me to blog about universal health care. I didn't realize how long it's been since I last blogged! Sorry for being so MIA!

I've had vestibular vertigo for the past week and a half and have been horribly dizzy. I have been to the hospital 5 times in the past 6 days for an MRI, ENG, hearing test, vestibular rehab, etc. Fortunately, no brain tumors or calcium deposits were found. That means the vertigo should go away on its own in about a month. Although I will have fully recovered by then, I doubt the American health care system will have made as much progress. This whole ordeal has made me realize (again) that American health care is in desperate need of reform...

But I'm going to dins with the fams right now, so I'll blog about universal health care when I get back! [but I have to pack for DC tonight, so I might post tomorrow night]

Thanks for pulling me back into the blogging world, Tina! And thanks for linking me to this paper!

Wednesday, July 15, 2009


Ah, food. People love it (me & my office-mates), people hate it (anorexics), people can't get enough of it (developing countries).

While doing research on the G8 Summit in L'Aquila, my thoughts wandered to the wonderful thing that is food. What a dichotomous thing food is...the demand for certain types of food is elastic (remember that word, nams? If wheat bread gets too expensive, I'll just buy white bread!) but the demand for food in general is inelastic.

I think people in America should think about this. If you and your children were starving in a desert, you would gladly trade a $1000 bill in your wallet for a bottle of water and some food for your kids. But what if you didn't have $1000? What if your annual salary were ~$1000, and the people who promised you food argued about where to purchase the food from while your children withered away and died?

Such a situation is not too far from the truth, I suppose.

There will be over a billion hungry people this year. But sure, why shouldn't the U.S. government care about its own farmers first? Surely, the right thing for Americans to do is support what the Council on Foreign Relations called "a Byzantine system of handouts and insurance benefits [in which] only households making over $1.5 million a year will see any reduction to their subsidies—and even those restrictions can be avoided through loopholes."

The G8 Statement on Food Security makes me hope that U.S. policies in the future will be more focused on effectively executing their purposes. The Minister Counselor and I met with a few economists yesterday, and one of them stated that policy in the U.S. is in a state of transition. As my friend Nami and I realized while working on various policy recommendations, the biggest challenge in making policy recommendations does not lie in modifying details. Rather, it lies in garnering support from people with divergent views and guaranteeing a positive reception from the media and the public at large. Just look at what Harry and Louise did to Hillary's Health Security Act!

OMG! it's 12:22 (2 hours past my bedtime!) Must go to sleep.

Tomorrow is packed, but it looks like fun!

Trade, Aid and Security Coalition

American Leadership for Global Development

Wednesday, July 15, 2009, 8:30 a.m. - 6:00 p.m.


8:30 a.m. – 9 a.m. Registration

9:00 a.m. – 10:00 a.m. Opening remarks: Rep. Jim McDermott (WA-7), Committee on Ways and Means, Rep. Earl Blumenauer (OR-3), Committee

on Energy Independence and Global Warming, Committee on Ways and Means, Ambassador Stuart E. Eizenstat, Former

Deputy Secretary of the Treasury, Under Secretary of State for Economic, Business and Agricultural Affairs, Under Secretary of Commerce for International Trade, U.S. Ambassador to the European Union, Covington & Burling, LLP

[Room: Metropolitan East]

10:00 a.m. – 11:45 a.m. Panel I: National Security: Economic Development, Trade and Investment

Featuring: Rep. Adam Smith (WA-9), Select Committee on Intelligence, Committee on Armed Services; Tim Reif, Office of the US Trade Representative, Rudy deLeon, Former Deputy Secretary of Defense, Center for American Progress

Moderator: Doug Wilson, Former Principal Deputy Assistant Secretary of Defense, The Leaders Project, Harvard University, Howard Gilman Foundation

[Room: The Hill]

Noon – 2 p.m. Luncheon: Business Innovation and Partnerships for Development

Featuring: Jane Nelson, Harvard University, Brookings Institution, Daniel Runde, International Finance Corporation, Angela Hofmann, Wal Mart

Moderator: Claude Fontheim, Trade, Aid and Security Coalition, Business Council for Global Development, Fontheim International, LLC

[Room: Metropolitan East]

2:15 p.m. – 3:45 p.m. Panel II: Climate Change and Economic Development

Featuring: Rep. Brian Baird (WA-3), Committee on Science and Technology, Chair of the, Subcommittee on Energy and Environment, Manish Bapna, World Resources Institute, Jim Lyons, Oxfam America, Walter Grazer, National Religious Partnership for the Environment

Moderator: Frank Loy, Former Undersecretary of State for Global Affairs, Environmental Defense Fund, The Nature Conservancy

[Room: The Hill]

4 p.m. – 5:30 p.m. Panel III: Investing in Women

Featuring: Rep. Joseph Crowley (NY-7), Committee on Ways and Means, Committee on Foreign Affairs, Ritu Sharma, Women Thrive Worldwide, Mary MacPherson, Vital Voices Global Partnership

Moderator: Katrin Kuhlmann, Trade, Aid and Security Coalition

[Room: The Hill]

5:30 p.m. – 6 p.m. Reception: Remarks by Rep. Charles Rangel (NY-15), Chairman, Committee on Ways and Means; Rep. Debbie Halvorson (IL-11), Committee on Agriculture, Rep. Kevin Brady (TX-8), Committee on Ways and Means

[Room: Metropolitan East]

Friday, July 10, 2009

Crossword #3!

This is a strange looking one... [click on images for better resolution]

Also, 5 down reminds me of this hilarious blog post. Here's a preview:

"...if I was a degenerate crackhead who snuck into your neighborhood and mugged you for $50, the Wall Street Journal Opinion Page would want me thrown in jail. Now imagine that I’m a degenerate crackhead who took out a subprime loan to move next door to you, in an arrangement that I’m likely not going to pay off. I might not even make one payment. If I default you’ll lose 10% of the value of your home from the externality effect. Assuming your home is worth $300,000, there’s a 20% chance I default in 2 years (realistic numbers), and you lose 10%; 300,000*.2*.1 = I’ve just robbed you for $6,000 while the Wall Street Journal Opinion Page cheered me on. And that’s one house – I’ll have a dozen neighbors. Now mind you, the product was great for me – I got to smoke crack indoors, in a house I could never realistically afford, which was a big plus. The subprime lender sold my loan to a pension fund in Denmark for a nice fee. It goes in the win column for us."

Happy Friday~

Thursday, July 9, 2009

The Jobless Recovery and the Unhealthy Health Care System

Some thoughts on unemployment and health care reform [issues that we have been following @ the Embassy]:

The Federal Reserve Bank of San Francisco reported that the labor market has more slack than the official unemployment rate indicates. The FRBSF measured labor under-utilization using involuntary part-time workers and projected that "the level of labor market slack would be higher by the end of 2009 than experienced at any other time in the post-World War II period, implying a longer and slower recovery path for the unemployment rate."

I found this old NYTimes article about the jobless recovery in 2003. I think it does a good job of explaining the meaning of a jobless recovery (although, it might be a bit self-explanatory...)

Note that the NYTimes and the FRBSF both predict that employers will increase output by increasing productivity of existing workers as opposed to hiring new ones. (Jeez, great news for the class of 2009.)

on health care:

Promises, promises.

Our friend, Jonathan Gruber, comes up with some solutions! [Jonathan Gruber is not actually my friend, but I wish he were. Haha.]

Good paper that I remember from Health Econ: Madrian on job lock as a result of employer provided health care. Here's an old article about job lock.

a little bit of joy:
This picture of Russell, from the movie Up, is currently my desktop background. Isn't it sooo cute?! It makes me happy whenever I look at it.

Sunday, July 5, 2009

Happy (belated) July 4th!

I hope everyone had a Happy 4th of July!
I wish I could have been in Boston with the fatkids...last year's fireworks by the Charles River were amazing!

This year I went to my friend's house in Maryland for the ultimate fatfest. Heidi's mom makes the BEST chicken wings EVER! (From the way I talk sometimes, you'd think that I'm terribly obese, but I have yet to break 100

@ work this week:
Something I wrote the other day after watching this. President Uribe answered a question about free trade and his answer was so heartfelt and sincere...

His Excellency Álvaro Uribe Vélez, President of Colombia
Wilson Center Forum on 6.30.09

At a forum hosted by the Wilson Center on June 30th, 2009, Colombian President Álvaro Uribe presented, to the audience, a delineation of the improvements that have been made to Colombia’s political, sociological, and economical scenes. President Uribe has done much to improve the stability of his country, and in 2006, he was re-elected by an overwhelming margin of 62 percent. Despite improvements in the country, the U.S. has been reluctant to move forward with the U.S.-Colombian Free Trade Agreement.

As stated during the forum, the issue of trade has taken a back seat on President Obama’s agenda. However, Colombia’s free trade agreement has more to do with simply opening the American market to Colombian exports. The ratification of the U.S.-Colombian Free Trade Agreement would be, as President Uribe stated, a signal of friendship and confidence between the two countries. President Uribe argued that such a signal would help lift Colombia out of poverty by attracting more foreign direct investment. While a free trade agreement would be convenient for both countries, Colombia does not predict a dramatic increase in exports to the U.S. in the near future. President Uribe believes that before Colombia can become an export-driven economy, it must provide its people with an alternative to narco-trafficking. In order for Colombia to fund such alternatives, it is in need of foreign investment. Foreign investment would increase income distribution and decrease poverty in Colombia, while shifting workers into a formalized economy. The Colombian President expressed frustration in having to explain to foreign investors that although Colombia’s government is committed to protecting private investors, the U.S. has still not agreed to free trade with Colombia. President Uribe called the free trade agreement a “necessary signal” in not only improving bilateral relations with the U.S. but also moving the Colombian economy into one that is formalized and self-sustainable.

Such a ratification may also draw attention to the KORUS FTA, which has been called an “easier” free trade agreement in that it is a purely economical case. However, it is unlikely that trade will be addressed in the near future while such issues as health care and climate change are being addressed.