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"I'm a believer that you wait until this thing gets to trial. I believe a man shouldn't be condemned by a vigilante system."

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"It's not easy what he's going through, either. During that period he was a rival. I never did business with him and didn't really know him. I've heard horror stories on everyone in the business, so I'm not going to comment on gossip. I'll wait and see, which is the right thing to do."

Said Oliver Stone (about Harvey Weinstein).

I agree on giving the accused due process and not turning into a lynch mob, but horror stories on everyone in the business? Tell me more. Do you mean that cheap allegations are everywhere or sexual harassment is pervasive?
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ahofer
3 days ago
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Rare restraint from Oliver Stone, promoter of conspiracy theories.
Princeton, NJ or NYC
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Why America Needs Foreign Medical Graduates

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The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

As our recent eight-nation bracket tournament showed, many people think the United States health care system has a lot of problems. So it seems reasonable to think of policy changes that make things better, not worse. Making it harder for immigrants to come here to practice medicine would fail that test.

The American system relies to a surprising extent on foreign medical graduates, most of whom are citizens of other countries when they arrive. By any objective standard, the United States trains far too few physicians to care for all the patients who need them. We rank toward the bottom of developed nations with respect to medical graduates per population.

When physicians graduate from medical school, they spend a number of years as residents. Although they have their degrees, we still require them to train further in the clinical environment to hone their skills. Residents are more than learners, though; they’re doctors. They fill a vital role in caring for patients in many hospitals across the country. We don’t have enough graduates even to fill residency slots. This means that we are reliant on physicians trained outside the country to fill the gap. A 2015 study found that almost a quarter of residents across all fields, and more than a third of residents in subspecialist programs, were foreign medical graduates.

Leaving training aside, foreign medical graduates are also responsible for a considerable share of physicians practicing independently today. About a quarter of all doctors in the United States are foreign medical graduates.

As in many other fields, foreign medical graduates work in many of the areas that other doctors find less appealing. More than 40 percent of the American primary care work force is made up of people who trained in other countries but moved here. More than half of all the people who focus on caring for older people are foreign medical graduates as well.

As if this weren’t enough, foreign medical graduates are more likely to practice in geographic areas of the country where there are physician shortages (typically nonurban areas), and they’re more likely to treat Medicaid patients.

As a physician who graduated from a domestic medical school, I’ve often heard others disparaging doctors who went to medical school outside the country as if they were inferior. Those complaints are not supported by data. A study from Health Affairs in 2010 found that patients with congestive heart failure or myocardial infarction had lower mortality rates when treated by doctors who were foreign medical graduates. Another from earlier this year in the BMJ found that older patients who were treated by foreign medical graduates had lower mortality as well, even though they seemed to be sicker in general.

recent study in Annals of Internal Medicine shows that these graduates are also responsible for a significant amount of teaching. Of the 80,000 or so academic physicians in the country, more than 18 percent were foreign medical graduates. More than 15 percent of full professors in medical schools in the United States were educated elsewhere, most often in Asia, Western Europe, the Middle East, Latin America and the Caribbean.

Foreign medical graduates also do a lot of research. Although they are ineligible for some National Institutes of Health funding — which is granted only to citizens of this country — they still manage, through collaboration, to be primary investigators on 12.5 percent of grants. They led more than 18 percent of clinical trials in the United States and were responsible for about 18 percent of publications in the medical literature.

“Our findings suggest that, by some metrics, these doctors account for almost one fifth of academic scholarship in the United States,” said the lead author of the study, Dhruv Khullar, who is a physician at NewYork-Presbyterian Hospital, a researcher at Weill Cornell and a contributor to The Upshot. “The diversity of American medicine — and the conversations, ideas and breakthroughs this diversity sparks — may be one reason for our competitiveness as a global leader in biomedical research and innovation.”

The United States is not the only country that relies on doctors trained or educated in other countries. We’re not even the country with the highest percentage of such physicians. According to data from the Organization for Economic Cooperation and Development, almost 58 percent of physicians practicing in Israel are foreign medical graduates. About 40 percent of the doctors in New Zealand and Ireland were trained outside those countries.

Because of the sizes of those nations, even though the percentages of foreign medical graduates are higher there, the total numbers aren’t as high as in the United States. In 2015, the O.E.C.D. estimated that the United States had more than 213,000 foreign-trained doctors, and no other country was close. Britain had about 48,000, Germany had about 35,000, and Australia, France and Canada had between 22,000 and 27,000.

For years, I’ve listened to doctors tell me stories of physicians who leave Canada — because they were dissatisfied about working in a single-payer health care system. That might have been true decades ago. But in the last 10 years, that number has dropped precipitously. The number of Canadians returning to their country to practice may actually be higher than the number leaving.

Although many feared that coverage expansions from the Affordable Care Act might lead to an overwhelmed physician work force, that didn’t happen. That doesn’t mean that America doesn’t have a shortage of physician services, especially when it comes to the care of the oldest, the poorest and the most geographically isolated among us. Even though we know foreign medical graduates care for those patients disproportionately, we make it very difficult for many born and trained elsewhere to practice here. Some Americans need these doctors desperately. Evidence suggests that policies should be made to attract them, not deter them.

@aaronecarroll

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ahofer
3 days ago
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"A study from Health Affairs in 2010 found that patients with congestive heart failure or myocardial infarction had lower mortality rates when treated by doctors who were foreign medical graduates. Another from earlier this year in the BMJ found that older patients who were treated by foreign medical graduates had lower mortality as well, even though they seemed to be sicker in general."
Princeton, NJ or NYC
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Why people distrust government

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Jeffrey Friedman’s answer:

In principle, people might have responded to accumulating perceptions of government failure by dialing back their expectations of government performance. But in practice, this would have violated the tacit assumption that justifies government’s attempt to solve social and economic problems to begin with: the assumption that modern society is so simple that the solutions to its problems are self-evident.

In the earlier essay, Friedman coined the phrase “epistemological utopianism.” I think we need to come up with a catchier phrase to describe the belief that modern society’s problems are easily solved by people with the right motives. I nominate “oversimplification bias,” but I welcome other suggestions. Provisionally, let me work with that term.

1. Friedman’s thesis is that oversimplification bias leads people to expect government to solve problems that it cannot solve. When the problems persist, distrust in government rises.

2. This leads people to hate those with whom they disagree. After all, if you believe that your side has the solutions, then you must assume that the other side does not want to solve the problems.

3. It also leads people to be arrogant about their own side. If the problems are simple, then our solutions must be correct, and that makes us really superior. (Note: an anti-Bobo Trump supporter can be just as arrogant in this sense as a Bobo elitist.)

4. I am afraid that mainstream economists are often afflicted with oversimplification bias. Reducing the problems of patterns of sustainable specialization and trade to monetary policy. Seeing health care policy in terms of mathematical and statistical models, ignoring all of the cultural baggage that we inherit. etc.

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ahofer
3 days ago
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" Friedman’s thesis is that oversimplification bias leads people to expect government to solve problems that it cannot solve. When the problems persist, distrust in government rises.

2. This leads people to hate those with whom they disagree. After all, if you believe that your side has the solutions, then you must assume that the other side does not want to solve the problems."
Princeton, NJ or NYC
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"Do You Need a Blockchain?"

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Interesting short piece of what blockchain offers--and doesn't offer--businesses.

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ahofer
4 days ago
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"You’ll note that there are more reasons not to use a blockchain than there are reasons to do so. And if you do choose a blockchain, be ready for slower transaction speeds."
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A Protectionist Utopia?, by Contributing Guest

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by Pierre Lemieux

If everybody were protected as a producer, nobody would be "protected" as a consumer.

utopia.jpg My previous post argued against the "populist argument" claiming that free trade destroys jobs and thus cannot be beneficial to consumers who have lost their jobs and incomes. The basic answer is that trade does not destroy jobs and, in fact, has little to do with employment.

One could object that this answer does not cover the whole populist argument (as a few commentators did). The broader question may be: Couldn't the individual, who is generally both a producer and a consumer, benefit from price competition on what he buys and, at the same time, get protection against competition in what he produces? Couldn't individuals get both competitive consumer prices and secure jobs against the choices of other consumers (who destroy jobs by switching suppliers)?

The short answer is no. Such a utopian system is impossible. It is impossible for all individuals to simultaneously benefit from price competition as consumers and, as producers, from protection against competition. Price competition requires that firms and workers compete for their markets and their jobs. This competition for the patronage of consumers implies continuous disruption of production. A totally protectionist world cannot enjoy competitive prices because, by definition, people are banned from buying at the lowest prices that can be quoted on the market. If everybody were protected as a producer, nobody would be "protected" as a consumer.

What is feasible, however, is for some groups of individuals to be granted special protectionist measures in their interest while they are still allowed to import what they want without protectionist barriers. This is what special interests obtain. An American sugar producer or solar panel manufacturer is protected by special quotas or tariffs against foreign competitors, but he is still allowed (to a large extent) to make world producers compete for the other goods he consumes, such as cars from Canada or flat screens from Mexico.

We can complicate the argument but it won't change water into wine. One way to make apparent economic sense of the populist argument is to observe that free international trade will not literally benefit all individuals: just as in the case of domestic trade and competition, some individuals will be economically harmed. In other words, more free trade is optimal in the Marshallian sense (maximizing net benefits across all individuals as benefit-cost analysis tries to do), but it is not Pareto-optimal (it is not generally true that it harms nobody at all). Moving from protectionism to free trade is likely to harm some individuals. Most critical comments on my previous posts seemed to take that stand.

This is true enough, but the same reasoning indicates that protectionism is not Paareto-optimal either, for a move towards more protectionism will also harm some individuals. New tariffs on washing machines, as Whirlpool is requesting, harm households. Quotas on sugar harm not only consumers who like sugar, but also the domestic manufacturers of sweets, who have to compete against foreign manufacturers with access to cheaper sugar. And so forth. (The economics student will have noted that, to use the economic concepts correctly, I should have said that a move towards protectionism is not more a "Pareto improvement" than a move towards free trade, but this does not change the argument.)

Moreover, as noted above, protectionism is not even optimal in the Marshallian sense, because more goods and services become available under free trade. In non-technical jargon, the difference between free trade and protectionism is that the former promotes general prosperity, while restrictions to exchange reduce opportunities as the history of underdevelopment suggests.

That free international trade benefits most people, that it increases general prosperity, can be grasped with a reduction ad absurdum. If protectionism were good between countries, it would also be good between states, regions, towns, etc. It would be worth protecting California against Mississippi, if only because wages are 39% lower in Mississippi than in California. "If it could save only one job..." is as bad an argument against international competition as against domestic competition. Protectionist measures do favor some individuals, but it is at the high cost of reducing opportunities for most individuals. And even those who seem to benefit from protectionism, or their children, are likely to lose out in the long run.


Pierre Lemieux is an economist affiliated with the Department of Management Sciences of the Université du Québec en Outaouais. His forthcoming book, to be published by the Mercatus Center at George Mason University, will aim at answering common objections to free trade. Email: PL@pierrelemieux.com.

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ahofer
4 days ago
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"Moving from protectionism to free trade is likely to harm some individuals. Most critical comments on my previous posts seemed to take that stand.

This is true enough, but the same reasoning indicates that protectionism is not Paareto-optimal either, for a move towards more protectionism will also harm some individuals. "
Princeton, NJ or NYC
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Recent & notable charts

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Here is a collection of charts, in no particular order, that I have updated in the past week and which I think are worth noting. If they have a common theme, it's that economies both here and abroad continue to improve.


The message of this chart is that the real value of the S&P 500 index has increased in line with the physical expansion of the US economy for the past 45 years. As a proxy for the economy's physical size, I've used the American Trucking Association's index of total truck tonnage hauled by the nation's truckers. I note that there have been a few times when equity markets have diverged significantly from the the trucking index, particularly the late 1980s, the late 1990s, and during the depths of the 2008-2009 recession. I would characterize those as periods of excessive optimism and pessimism—sentiment not warranted by the progress of the overall economy. Currently, the advance in equity valuations seems to be very much in line with the growth of the economy.


Today the Japanese stock market reached a two-decade high, after not making much progress on balance for a very long time. It's interesting that this occurred despite the fact that the yen has been strengthening of late against the dollar. As the chart above shows, since 2005 Japanese equities had shown a strong inverse correlation to the value of the yen (e.g., equities would rise as the value of the yen fell, and vice versa). People have made various attempts to explain this inverse correlation, with perhaps the most convincing being that the Bank of Japan has been pursuing misguided monetary policy at times, such that a stronger yen (one result of very tight monetary policy) put a lot of downward price pressure on Japan's industries (because it made their products more expensive to foreign buyers), while a weaker yen mitigated this pressure and eventually became "stimulative." I'm not quite sure what to make of the action offer the past year or so, but I think it may be that the yen has settled into a reasonable valuation zone. Perhaps not coincidentally, my calculation of the Purchasing Power Parity exchange rate between the yen and the dollar is about 114, which is very close to the current exchange rate of 112. This further suggests that central banks have been doing a pretty good job of managing things, and currencies are trading at reasonable levels in general. (The Fed's Real Broad Trade Weighted Dollar index is currently very close to its 45-year average, by the way.) This suggests that the uncertainties that arise from significant currency fluctuations have been mitigated, and that further suggests that economic fundamentals have become more conducive to investment and growth. Reduced uncertainty is almost always good for investors, and for investments, and for economies.


As the chart above shows, property prices for commercial real estate continue to rise, and have clearly surpassed their prior peak. You hear a lot these days about how shopping malls are dying all over the country (thanks to predators such as Amazon), but this suggests that things are not necessarily bad at all in general.




The charts above are based on Bloomberg's calculation of equity market capitalization. I note that non-US equity markets have been strongly outperforming their US counterparts for most of the past year. However, all markets have registered equivalent gains for the past decade or so, on balance. We're in a global recovery that shows every sign of continuing.


The September ISM survey of service sector businesses in the US was extremely strong, as the chart above shows. This could well be one of those random blips, but at the very least it suggests that the US economy continues to improve. It's also worth noting that a similar index of Eurozone service sector businesses has been trending higher for the past several years. It looks like we're in a synchronized global growth cycle.


I've commented often and for years about the curious and continuing dance between gold and TIPS prices, as illustrated in the above chart (see a recent post here). I've also commented on how the real yield on 5-yr TIPS (shown inversely in the chart in order to serve as a proxy for their price) tends to move in line with the real growth trend of the US economy. With 5-yr TIPS real yields only slightly above zero, the market is apparently unconvinced that any good will come from the Trump administration, at least insofar as something that might push the US economy out of its 2% real growth rut. If there is anything that makes a convincing rebuttal to the widespread claims that the market is insanely optimistic and egregiously overpriced, this chart is it. If the market were convinced that the economy was on the cusp of growing 3% per year or more, I think real yields would be significantly higher and gold prices would be significantly lower.


The most recent survey of small business optimism showed a downtick, but the index is still at rather lofty levels. Small business owners are already seeing a reduction in regulatory burdens, as are banks. It may well be the case that entrepreneurs are already gearing up for better things ahead, but that we won't see the results (e.g., more hiring, more investment) for some months to come. These things take time to unfold.


As the chart above shows, car sales had been in a disturbing slump since last year. Fortunately, the September numbers revealed a substantial bounce. This may be just one of those quirks of seasonal adjustments, so we'll have to wait for a few more months to declare victory, but it is nevertheless encouraging. 

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ahofer
4 days ago
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I don't know. Truck tonnage is an imperfect proxy, and a lot more of the market cap has gone private...
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