September 2009 Archives
From John Cassidy's forthcoming book, How Markets Fail: "In China between 1981 and 2005, according to a recent study by researchers at the World Bank, the poverty rate fell from 84 percent to 22 percent, a drop of almost two thirds. By the end of the period more than 600 million Chinese had been lifted out of poverty."
This striking paragraph is from the excellent Calculatedrisk blog, which is filled with useful data and insight:
. . .this is a reminder that new high rise condos are not included in the new home inventory report from the Census Bureau, and are also not included in the existing home sales report from the NAR (unless they are listed). These uncounted units are concentrated in Miami, Las Vegas, San Diego and other large cities - but as these articles show, there are new condos almost everywhere.The NAR is the National Association of Realtors. Also Alan Abelson, in Barron's, has a column about the sword of Damocles (or perhaps the crabgrass avalanche) hanging over the housing marke, in the form of foreclosures waiting to happent:
The full Abelson column is here, but i'm not sure it's available to non-subscribers. For some broader perspective, consider that Moody's and Zillow agree that about a quarter of homes are "underwater," meaning they are burdened with mortgages greater than their valueAmherst [Securities] estimates this massive overhang at seven million units. That's the equivalent of 135% of a full year's existing-home sales and chillingly greater than the 1.27 million units that made up the overhang in early 2005, when the housing bubble had just begun its dizzying and more than a little lunatic ascent.
Put another way, of the 56 million units that the Mortgage Bankers Association says make up the mortgage universe, Amherst gauges 6.94 million units are in what it dubs the "delinquency pipeline" eventually headed for liquidation. And it reckons that another 300,000 mortgages replenish that unwelcome flow every month.
Essentially, then, this shadow inventory represents a massive furtive supply of future foreclosure.
Today I went to see a very capable podiatrist who really had no idea that he had ever seen me before. His office has only paper records, ships them off-site after three years and gets rid of them after five, at least according to what they told me. So I whipped out my ancient, steam-powered Treo 650, performed a global search that took perhaps two seconds, and said: "February 20, 2003 at 2 pm." Voila, electronic medical records.
A new Harvard study estimates that lack of health insurance kills about 45,000 Americans annually, which is 2.5 times as many as the previous best estimate commonly cited in the health care debate. This is a big difference (27,000 additional lives). But it still pales in comparison with the more than one million Americans who die annually by their own hands--which they use to light cigarettes, lift forks and convey too many alcoholic beverages to their lips. That so many die as the result of behavioral causes is no argument against universal health coverage, and the new Harvard study bolsters the case for covering everyone, which I suspect we could do just by harvesting some of the incredible waste in the system today. But the vast loss of life associated with bad habits does suggest that we could do vastly more good by changing people's behavior, whether by exhortation, better education or sumptuary taxes.
Tobacco offers a promising precedent; smoking is down by something like half since mid-century, as I recall, and while this has contributed (perhaps significantly) to our national weight gain, on net this reduction in smoking has saved many lives and much suffering and expense. Further reductions in tobacco, as well as an assault on over-eating and unhealthy foods, might produce similarly large gains.
A pdf of the study is here (it's quite brief) and an even briefer essay on the whole subject, from the Wall Street Journal, can be found via my earlier Atlantic posting about the devastation we inflict on ourselves by our unhealthy lifestyles. There is vast room for improvement in this area, and progress in it could be a major force for reducing our runaway health-care costs--not to mention saving the lives of so many of our fellow citizens. President Obama has rightly called on students to work harder in school. Why not rally the rest of us to save ourselves from early death?
(Photo: Flickr User Siege N. Gin)
Ok, I exaggerate. It's a headline! Still, it's stunning to read that the headmaster of a fancy Massachusetts prep school is giving away the 20,000 books in the library and converting the joint into a "learning center" containing giant flat-screen TVs and a $12,000 cappuccino machine. Read it and weep here.
Actually this may not be quite as bad as it looks. Students will be equipped with Kindles and the like. If anything the real news here may be that the headmaster is so politically tone-deaf that he thinks it's a good idea to do the whole TV-and-cappuccino rec-room transformation at the same time as he abolishes the library. Why not just announce a new environmental initiative to heat the facility by burning volumes from the library? It's not just eliminating books. It's going green!
Actually this may not be quite as bad as it looks. Students will be equipped with Kindles and the like. If anything the real news here may be that the headmaster is so politically tone-deaf that he thinks it's a good idea to do the whole TV-and-cappuccino rec-room transformation at the same time as he abolishes the library. Why not just announce a new environmental initiative to heat the facility by burning volumes from the library? It's not just eliminating books. It's going green!
Here is one of those stories guaranteed to convert a few more readers to libertarianism. New York's seedy Off Track Betting parlors, part of a state-operated system intended to raise money for public purposes while taking business from illegal book-making operations, actually lose money. So here we have the government spending taxpayer dough to enable and encourage people to do something that is almost certainly harmful. Not to worry, no doubt the state funds treatment programs for problem gamblers as well. Read More
The Boston Globe reports on financial troubles at WGBH, the nationally important public broadcaster up there, which just two years ago celebrated the opening of its expensive new headquarters. Why should anyone care outside of Boston? Because it's a great example of what invariably seems to happen when a company builds itself fancy new offices. Just look at the New York Times, with its Renzo Piano tower on Eighth Avenue. As soon as these places are done--sometimes even before--the company gets into trouble.
These myopic projects are launched by businesses quite literally at the pinnacle of their powers, and they are a sure sign of hubris. It says right in the Bible, a new HQ goeth before the fall. In fact when I was a young business reporter at the LA Times, wearing a high collar and a skimmer as I banged out my copy on an ancient Remington, cigarette dangling from my lip, we always used to say that you should short any company that builds itself a new headquarters. If only you could short a PBS station...PS--Surely there is fodder here for some graduate student, since of course I am relying on memory and anecdote. Where is the study analyzing the performance of companies that build new headquarters? It's a thesis waiting to happen.
Photo Credit: http://www.flickr.com/photos/carpeliam/1578386591, http://www.flickr.com/photos/paalia/3596228512/
Daniel Akst
