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August 7, 2012

Latest Posts from Economist's View


Latest Posts from Economist's View


Posted: 05 Aug 2012 12:06 AM PDT
Posted: 04 Aug 2012 07:19 PM PDT
Robert Frank says the role of luck in determining success in the marketplace may be more important than we thought:
Luck vs. Skill: Seeking the Secret of Your Success, by Robert H. Frank, Commentary, NY Times: There may be no topic that more reliably divides liberals and conservatives than the relationship between success and luck. Many conservatives celebrate market success as an almost inevitable consequence of talent and effort. Liberals, by contrast, like to remind us that even talented people who work hard sometimes fall on hard times through no fault of their own. ...
Both ... have important implications for public policy, so it would be good to know more about how important luck actually is. Unfortunately, it's an inherently tough question to answer. But recent experiments suggest that chance events may influence market outcomes far more heavily than previously thought.
The sociologists Duncan J. Watts, Matthew Sagalnik and Peter Dodds carried out some of these experiments, which Mr. Watts described in his superb 2011 book, "Everything Is Obvious* (*Once You Know the Answer)." Their work focuses on online markets, but it has much broader implications. It suggests that although market success does depend on the quality of a product, the link is extremely variable and uncertain. Even the best contestant in a product category may fail, and even the worst one sometimes wins. And for an overwhelming majority of contestants in the intermediate-quality range, they found success to be largely a matter of chance. ...
We always knew that it was good to be smart and hard-working, and that if you were born or raised with those qualities, you were incredibly lucky, just as you were lucky if you grew up in the United States rather than in Somalia. But the sociologists' research helps us understand why many people who have those qualities never find much success in the marketplace. Chance elements in the information flows that promote that success are sometimes the most important random factors of all.
Of course, we should keep celebrating the talented, hard-working people who have succeeded in their businesses or careers. But the research provides an important moral lesson: that these people might also do well to remain more humbly mindful of their own good fortune.
Posted: 04 Aug 2012 10:19 AM PDT
Uwe Reinhardt has a dare for "presidential candidates professing a distaste for socialized medicine":
Where 'Socialized Medicine' Has a U.S. Foothold, by Uwe E. Reinhardt: Last Friday's exuberant celebration of Britain's National Health Service during the opening ceremony for the 2012 Olympics ... elicited ... stern rebukes from the commentariat in the United States, most vehemently by Rush Limbaugh. Bashing the N.H.S. has become a favorite ritual during any debate on health care reform on this side of the Atlantic. ...
Remarkably, Americans of all political stripes have long reserved for our veterans the purest form of socialized medicine, the vast health system operated by the U.S. Department of Veterans Affairs... If socialized medicine is as bad as so many on this side of the Atlantic claim, why have both political parties ruling this land deemed socialized medicine the best health system for military veterans? Or do they just not care about them?" ...
Occasionally one does come across an American politician who mutters something about privatizing the V.A. health system. I doubt this idea would have much political traction... In fact, I would dare presidential candidates professing a distaste for socialized medicine to call openly for abolition of the V.A. health system in favor of a purely privatized system – e.g., a defined contribution system such as that advocated for Medicare by Representative Paul D. Ryan, Republican of Wisconsin...
So far I have not received a satisfactory answer from detractors of "socialized medicine" to my question of why we have the V.A. health system when socialized medicine putatively is so evil. Perhaps some commentators ... will enlighten me.
Before responding, however, readers might consider these readings...: a book by Phillip Longman, "The Best Care Anywhere: Why V.A. Health Care Is Better Than Yours"; an article on V.A. health care in the American Medical Association's amednews.com, and, finally, from the Rand Corporation's nationally recognized team of experts on the quality of health care in the United States this eye-opening report.
Posted: 04 Aug 2012 09:30 AM PDT
PCE Trimmed mean inflation since March. This measure from the Dallas Fed is intended to isolate and highlight trends in inflation and help the Fed stay near its target inflation rate of 2%:

               1-month  6-month 12-month
Mar-12    2.30        1.97       2.02
Apr-12     1.50        1.95       1.93
May-12    1.49        1.85       1.90
Jun-12      1.42        1.75       1.86

Notice any trends?

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