But most of Case and Deaton’s ire focuses on the health care industry, which not only underperforms but is also wrecking the US economy. We [USA] spend twice per capita what France spends on health care, but our life expectancy is four years shorter, our rates of maternal and infant death are almost twice as high, and, unlike the French, we leave 30 million people uninsured. The amount Americans spend unnecessarily on health care weighs more heavily on our economy, Case and Deaton write, than the Versailles treaty reparations did on Germany’s in the 1920s. If, decades ago, we’d built a health system like Switzerland’s, which costs 30 percent less per capita than ours does, we’d now have an extra trillion dollars a year to spend, for example, on replacing the pipes in the nearly four thousand US counties where lead levels in drinking water exceed those of Flint, Michigan, and on rebuilding America’s bridges railroads, and highways—now so rundown that FedEx replaces delivery van tires twice as often as it did twenty years ago.
In the US, health insurance accounts for 60 percent of the cost of hiring a low-wage worker. Many employers opt instead to hire contract workers with no benefits, or illegal immigrants with no rights at all.
Perhaps, perhaps not. But when and where is even more important.
Hailed as a maths prodigy at school, Shields accepted a junior position at Merrill Lynch after studying engineering, economics and management at Oxford University because the trading room floor offered him a thrilling, dynamic environment. He was not alone: of 120 engineers in his year group at university, Shields added, only five went into engineering.
I think we should be much more cautious in attempting to direct young people’s choices beyond providing them with an education. We should feel proud of their independence of mind, remembering that supply side factors will likely win out over central planning. It is the supply side that we need to deal with, not least Putts Law. The same applies to medicine.
This personal story is worth a read for other lessons, too.
Goldman [Sachs) are smart: they can rip your grandmother’s face off and make her feel good about it.
Carbon offsetting is shaping up to be the greatest mis-selling scandal since the Dominican friar Johann Tetzel sold pardons to redeem the dead. Martin Luther attacked this practice in 1517, in his 95 theses.
Five hundred years later, those of us who seek planetary redemption should reduce our carbon footprint in ways that we control — rather than relying on middlemen who may or may not plant trees. The road to hell, I seem to remember, was paved with good intentions.
Well, the Catholic church usually got there first.
“If I can predict what you are going to think of pretty much any problem, it is likely that you will be wrong on stuff. [speaking of certain other economists]….they are very predictable
The future of capitalism is out of the hands of those who spend their time thinking about it.
Not too dissimilar to medicine, either: discuss…..
There is lots of variation, but in general elite institutions have been the biggest growers. Some, including Oxford and Cambridge, have chosen not to expand. But most prestigious universities have sucked up students, grateful for their fees, which subsidise research. The intake of British students at members of the Russell Group of older, research-focused universities has grown by 16% since restrictions were lifted. Some have ballooned. Bristol’s intake has shot up by 62%, Exeter’s by 61% and Newcastle’s by 43%.
Increases in intake do not automatically mean a worsening of what is on offer, but the difference between Oxbridge and the Russell group shout out at you: some are more equal than others.
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Not often I spot typos in the New York Review of Books, but here is one that matters. The article dealt with the price of prescription drugs, and there are of course plenty of villains to go around: crony capitalists; advertising spending being larger than research spending —because it works!; and sloppy thinking with regard to IPR and patents. The article on paper read:
In late October, however, just before the congressional elections, Azar declared to reporters that high prices constituted “the greatest possible barrier to patent access.” Democratic strategists gave prescription drug prices high priority in congressional campaigns. Yet leaders in both parties understood that curbing prices would be no easy task. The pharmaceutical industry, which has long deployed one of the most powerful lobbies in Washington, was increasing its representation in the capital.
Yes, should have read patient not patent, although no doubt pharma might not have agreed.
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Bluntly, the main motive for replacing the teaching grant by loans is an accounting trick. There is an apparent decline in public spending, but at the cost of distorting higher education policy … Thus the changes look like a dodgy [Private] Finance Initiative” – Barr, 2012
Well written piece on the loan scandal in Wonkhe by Nicholas Barr. In the language of the laymen, the government is fiddling the books, and dumping the costs on future taxpayers. It fiddles because it wants to mislead, for gain.
He goes on:
higher education finance has elements of a bubble. If I were a Vice-Chancellor, this aspect would give me sleepless nights.
Guarded language — fair enough — but it is not just a financial bubble. Let us just see how this year pans out.
Great interview with Paul Romer over at Conversations with Tyler. Romer won the Nobel prize for economics this year, and has had a wonderfully varied career (academic; founder of a software company that produces computer assisted learning material (Aplia); and time at the World bank. There are some earlier statements by him about education on my web page.
What caught my eye in this interview was:
“We should always remember that the education business is one of the ones that has the biggest problems with asymmetric information. A young person who pays somebody to educate them is very dependent on the decisions that the educator makes about “Study this, go in this direction.”
“I think that the problem in higher ed is that the institutional incentives don’t provide the kind of training that would maximize the opportunities for the students or, for that matter, maximize outcomes for the nation.”
Indeed: in many ways, the situation is even worse than in medicine.
This article and data on funding streams in higher ed is well worth exploring. It adds a necessary counterpoint to any consideration of what has happened to HE in the UK over recent decades. And, I see the time span maps closely to my own career as a Professor. I still struggle with the ‘why’ question. Some of the graphs are scary.
In 1903, Elizabeth Magie patented the Landlord’s Game, a property-based board game created with two sets of rules: a monopolist set in which the winner took all and an antimonopolist set in which all wealth was shared across society. It is revealing that only the former set of rules took off, giving birth to the bestselling game Monopoly. Radical Markets sketches a vision of how society might look if it adopted Magie’s second set of rules. Unlike playing with Monopoly money, the stakes in this societal game could scarcely be higher, and the importance of this book could scarcely be greater.”–Andrew G. Haldane, chief economist, Bank of England