How can National Health Care lower Costs when they can’t even Buy Computer Equipment at Competitive Prices?

Posted by PITHOCRATES - May 13th, 2012

Week in Review

The problem with national health care?  There is only one buyer in the market.  The government.  And whenever you have only one buyer you’re never going to get the best price (see NHS pays ‘extortionate’ 328 per cent mark-up on printer parts by Christopher Williams posted 5/11/2012 on The Telegraph)

The NHS is paying “extortionate” prices for basic computer equipment and services, with dealers collecting profit margins of up to 328 per cent, a study has found…

On average, at central and regional levels, the NHS buys computer services and equipment at 28 per cent more than their wholesale price, compared to the best average in the private sector of only 3 per cent, said Mercato, a firm which tracks government and commercial IT procurement. As well as basic items this includes expensive equipment such as servers, and software.

These are things they know they are paying extortionate prices for.  Because there are other buyers for these things in the private sector.  And they can see what they are paying for these same things.  It didn’t stop the NHS from getting ripped off.  But they could tell they were being ripped off.  By the prices people were paying in the private sector.  Of course, these people aren’t buying hospital equipment, medicine, supplies, etc., that only the NHS uses.  And they buy these things in a market where there are no other buyers competing for these.  So there is no incentive to lower prices at all.  So if they’re paying 328% profit margins on computer equipment and services you know they are paying at least 328% profit margins on everything else they buy.  Or far, far more.  Because who’s going to know except the seller?

If this is happening in the NHS you know it will happen in Obamacare.  Every supplier in the Obamacare system will be looking to take advantage of some unaware bureaucrat.  Or bribing one to allow extortionate prices.  Because that’s the way government works.  It always has.  And it always will.  Only with Obamacare we’ll be sacrificing the quality of the U.S. health care system in the process.  For all the graft in the system will leave even less funding for health care services.  Because this graft will be new.  Unlike the private insurance companies that are now a pain in the ass to everyone that has to deal with them.  But you have to give the private insurance companies this.  They don’t pay extortionate prices.  Which has kept health care costs under control so far.  At least, as best as anyone can.  And far better than Obamacare will.  Just wait and see.


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Rising Supply and Falling Demand (i.e., Recessions) can lower Oil Prices

Posted by PITHOCRATES - May 13th, 2012

Week in Review

There is less bad news for gas prices.  Rising crude oil supply and falling demand will provide a little price relief at the pump.  ‘Little’ being the operative word here (see Oil price tumbles as global supplies flourish by Garry White, and Emma Rowley posted 5/13/2012 on The Telegraph).

Opec supply has risen to about 31.62m barrels per day (bpd), as the Libyan oil industry started to recover. Saudi Arabia has also been ramping up production by than 56,500 bpd to 9.9m. Oil inventories in the US have also been rising. Supply is no longer such a large concern.

As well as worries about contagion from another eurozone crisis, data from China have also been weak, implying that demand could fall.

Chinese industrial production is the weakest it has been in three years. Industrial production rose by 9.3pc in April, the lowest level since May 2009, while retail sales surprised the market by slowing to a 14.1pc rise. This is the lowest level in 14 months…

“Crude oil prices have remained weak after last week’s sharp falls, largely due to concerns over the US economy and the escalating problems in Europe,” Mr Jessop said.

Well, imaging that.  You can lower the price of crude oil by increasing supply.  And crashing your economy.  For that’s another big part of the fall in prices.  Lower demand.  Because the economies in China, Europe and the United States ain’t looking so good.  So President Obama may get his wish come the 2012 election this November.  Lower gas prices.  And if the economy keeps tanking he’ll have even better prices at the pump.  Of course that will probably come with an up-tick in the unemployment rate.   But he can massage that away by just not counting the people who’ve given up looking for full-time work and those working part-time because they can’t find full-time work.  The U-3 unemployment rate.  Which looks a whole lot better than the U-6 rate that counts all those other people.  And has been stuck in double digits throughout his presidency.

Of course he could do something else to bring down those gas prices.  He could drill more.  Increase supply more.  Then build refineries and pipelines to move that oil around.  Creating jobs AND lowering the price of gasoline.  A win-win if ever there was one.  And it would move both the U-3 and the U-6 unemployment rates down towards full employment.  But he won’t do that.  Because the Left hates oil.  So we’ll have to hear how great the economic recovery is.  When it isn’t.  At least until November.


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Women in the UK are using Abortion as Birth Control costing the Government Billions in lost Tax Revenue

Posted by PITHOCRATES - May 13th, 2012

Week in Review

There are two costs with an abortion.  A social cost.  And a financial one.  The social cost is what these abortions say about how we value human life.  And the financial cost is lost tax revenue.  For every abortion is a lost taxpayer.  Which is pretty serious considering the budget deficits countries are running to pay for the benefits we provide for those babies we didn’t abort (see NHS spends £1m a week on repeat abortions: Single women using terminations ‘as another form of contraceptive’ by Daniel Martin posted 5/13/2012 on the Daily Mail).

The Health Service is spending around £1million a week providing repeat abortions.

Critics said figures revealed yesterday show thousands of women are using the procedure as a form of contraception.

It is not unknown for some women to have seven, eight or even nine terminations in their lifetime.

According to the statistics, single or unmarried women account for five out of every six repeat terminations. Around a third of all abortions carried out in England and Wales are repeats…

In 2010, the latest year for which figures are available, some 189,000 abortions took place. Of these, more than 64,000 terminations were on women who had already aborted a foetus in the past.

In an expanding welfare state having babies is very important.  For to shower everyone with generous benefits, including pensions and health care that last long into a person’s eighties and nineties, you need a whole lot more people entering the workforce than leaving it.  And you do that with an expanding birthrate.  By having more live births than deaths.  The more the better.  For the more live births the more generous the benefits can be further down the road.  Having abortions, though, reduces how generous the government can be in the future.

In 2010 there were approximately 723,165 live births in England and Wales and approximately 493,242 deaths. And, of course, approximately 189,000 abortions.  For every person that died in 2010 there were 1.466 people born to replace them.  If those abortions did not happen and their pregnancies were carried to term that number would have been 1.849.  Which would have been more than the 1.748 during the first decade of the 20th century.  So what does this mean?  Had these numbers held steady or increased from 1901 until today the UK would probably not be having budget deficits.  Because the number of people entering the workforce would have stayed larger than the number leaving the workforce.  Meaning more revenue from income taxes and less from borrowing.  So why is the UK running a high deficit?  And carrying a large debt?

Because of abortion and birth control.  When sex turned into consequence-free fun people had more of it and fewer babies.  The ratio of live births to deaths was 1.748 in the first decade of the 20th century.  It was 1.415 during the second decade.  It was 1.485 during the Twenties.  It was 1.315 during the Thirties and Forties.  It was 1.415 during the Fifties (the post-war baby boom).  It was 1.508 during the Sixties.  And then came birth control and abortion.  And the baby bust generations.  It fell to 1.105 during the Seventies.  It was 1.156 during the Eighties.  It was 1.158 during the Nineties.  And it climbed back up to 1.228 in the first 8 years of the 21st century.

So following the baby boom the population growth rate screeched to a halt.  Just barely replacing each death with a live birth.  Which is why pension and health care costs are busting the treasury in the UK.  The baby boomers are retiring.  And the baby busters are stuck with the bill for their retirement.  If the UK wants a quick path to financial stability they would do well to make abortions illegal.  Because a live birth to death ratio of 1.849 would fix all of their fiscal woes in about 20 years.  They could even borrow money to maintain benefits now with some special 30-year debt.  Which should be easy to refinance in 20 years with all that new tax revenue coming on line.  And old debt would be easier to retire with an expanding population growth rate.  Which a high live birth to death ration will give you.

Let’s just look at those 189,000 abortions.  If they each grew up to earn $40,000 (£23,952) twenty years from now they would earn a total of $7.134 billion (£4.527 billion) in annual income.  If taxed at a tax rate of 20% that would bring $1.512 billion (£905 million) into the treasury.  If 1% of these went on to be millionaires double this number.  Bringing the cost of those abortions to approximately £2 billion ($3.34 billion) in lost tax revenue a year.  Not to mention the lost tax revenue at all the other levels of taxation.  Making abortions costly in more ways than one.


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The U.S. Starting to Chase the Wealthy and Job Creators out of the Country like the French

Posted by PITHOCRATES - May 13th, 2012

Week in Review

It’s just not the Socialist Hollande in France scaring the wealthy and job creators out of their country.  It’s happening in America, too (see Facebook’s Eduardo Saverin Joins Americans Renouncing Citizenship by Enjoli Francis posted 5/11/2012 on ABC News).

In 2011, billionaire Facebook co-founder Eduardo Saverin relinquished his U.S. citizenship and joined nearly 1,800 other Americans to do it last year — up from 235 in 2008…

Those in the expatriate community said that although Saverin’s move was likely a financial one — he paid an exit tax on the capital gains from his Facebook stock but the stock is now tax-free — they said expatriates who gave up their citizenship were driven by other factors.

Phil Hodgen, an international tax lawyer in Pasadena, Calif., said that since 2009, when more than 150 U.S. customers of Swiss banking giant UBS were investigated for alleged tax evasion, the IRS had been going after Americans abroad with foreign bank accounts with a vengeance.

He said that in the last three years, new and old rules had created an enormous amount of resentment — and paperwork expenses — for expatriates…

Peter Dunn, a popular blogger who gave up his U.S. citizenship, said the expatriates he spoke to were mostly standard middle-class U.S. citizens who were ready to retire or who had retired abroad. He said because of these “invasive” rules, they now feared substantial penalties from not reporting their finances correctly.

In an expanding welfare state your wealth isn’t yours.  It belongs to the people.  At least that’s the way governments look at it.  With ever expanding deficits and debt they’re trying to take as much wealth away from the wealthy as possible.  Despite the great things they create for us.  Such as Facebook.  For if it wasn’t for Saverin’s wealth he invested in Facebook we wouldn’t have it today.  But he believed in it.  And took a risk.  With his own money.  The way entrepreneurs do.  Something a lot of people do.  But few ever experience the success Saverin has.  And few will ever take these risks again if they are going to be hounded for the rest of their life by the tax authorities.

Of course those who want to tax the rich will look as these expatriates as the lowest of scoundrels.  Running away with their wealth instead of paying their ‘fair’ share of taxes.  Even though the amount in dollars they pay in one year is greater than most people will pay in taxes in a lifetime.  But these expatriates are the greedy ones.  For not letting us take all of their wealth. 

Of course should someone win the lotto it’ll be a different story.  For though we attack the rich we all want to be rich.  If not we wouldn’t be buying those lotto tickets, would we?  So, yeah, we hate the rich.  Right up until we become rich.  Then all this antagonism against the rich is just a silly misunderstanding.  And those taxes on the wealthy really are too high.  But until we become rich we’ll hate pretty much anyone who has more than us.  Be jealous of them.  And covet what they have.


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Hollande’s Win in France sends a Message to the Wealthy and Job Creators – You are Not Welcomed Here

Posted by PITHOCRATES - May 13th, 2012

Week in Review

The French elections are over.  Hollande is in.  Sarkozy is out.  As are the job creators.  The wealthy.  Who are looking to leave France with their talent and skills.  Because they got the message.  Hollande doesn’t like them.  And he’s coming after their wealth (see France Entrepreneurs Flee From Hollande Wealth Rejection by Anne-Sylvaine Chassany and Jacqueline Simmons posted 5/10/2012 on Bloomberg).

France, the fifth-richest country and home to some of the world’s wealthiest people, including LVMH Moet Hennessy Louis Vuitton SA Chief Executive Officer Bernard Arnault, doesn’t celebrate its affluent. Hollande, a Socialist who once said “I don’t like the rich,” and who plans to slap a 75 percent tax on income of more than 1 million euros ($1.29 million), reinforces the sentiment that in France to be rich is not glorious…

Hollande’s rhetoric against wealth and finance is prompting some in France to consider leaving, and European rivals are welcoming them. “Bienvenue a Londres,” or welcome to London, Mayor Boris Johnson quipped in January. Switzerland and Belgium have been just as warm…

“Seen from abroad, France is the last country where an entrepreneur wants to go,” Marc Simoncini, the founder of French dating site, said in an interview on BFM TV yesterday. “I don’t know of any British person who’s come to set up a business in France. But I know plenty of young French people who’ve gone to London to do that…”

The attitude toward business and wealth creators is driving people away, said Diane Segalen, founder of Segalen & Associes, an executive search firm specializing in top management and board members.

Talent and skills will go where they are welcome, she said…

On the other side of the Channel, Conservative London Mayor Johnson laid out the welcome carpet.

“This is the global capital of finance,” he said. “It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”

Here’s another reason for those who aren’t rich to hate those who are.  Because they won’t just sit there and take it.  These selfish bastards won’t stay in France and continue to use their talent and skill to make great wealth so the state can take it away from them.  You just can’t depend on the rich, can you?  Only those who aren’t rich are caring and decent.  With other people’s money, of course.  For if they won a fortune in a lottery they’d want to pack up their wealth and leave just like everyone else that has wealth.  Because it’s an entirely different picture when it’s YOUR wealth.  Taking wealth from others, why, that’s okay.  But it just isn’t fair to take YOUR wealth.

People need jobs.  And government needs people to have jobs.  So they can pay the taxes that fund their welfare state.  And to create jobs you need people with talent and skills.  To create wealth by investing wealth.  Because that’s the only way you can create jobs.  And tax revenue.  For only someone with a job can pay an income tax.  So it all starts with jobs.  You gotta have them.  And they just don’t spontaneously appear.  If they did France wouldn’t be in the economic mess they’re in requiring a 75% tax rate on millionaires.

This is the future of the welfare state.  High taxation that encourages all those with talent and skill to leave your country.  Leaving only those consuming the benefits of the welfare state.  Without anyone left to pay for it.  Which leads to more government borrowing.  Greater deficits.  Higher debt.  And, well, you can look to Greece to see where it goes from there.


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The Miracle in Africa – Declining Child Mortality Rates thanks to Robust Economic Activity

Posted by PITHOCRATES - May 13th, 2012

Week in Review

We have poured enormous amounts of aid into Africa.  Celebrities have championed African causes.  To get more charitable donations.  And to shame governments in advanced economies to provide more aid.  Little of this has helped.  But here is something that has (see Africa’s Child Health Miracle: The Biggest, Best Story in Development by Michael Clemens posted 5/4/2012 on the Center for Global Development).

These shocking new numbers are in a paper released today by Gabriel Demombynes and Karina Trommlerová in the Kenya office of the World Bank. Here are their figures for some of the recent changes in rates of child death across the continent. The numbers in the last column are the percent declines in child death rates every year over the past few years.

This is a stunningly rapid decline, and nothing like it was occurring even as recently as the first half of the decade. For comparison, the Millennium Development Goal of a 2/3 decline in child mortality between 1990 and 2015 translates into a 4.3…percent annual decline in child mortality. In other words, the above countries are collectively reducing child mortality at an annual rate much greater than the rate called for by the Millennium Development Goals. They are doing this across hundreds of millions of people, across a vast landscape of hundreds of thousands of villages and cities.

These numbers originally come from the DHS Surveys, which are free and open-access. The paper’s authors investigate the reasons for the decline in Kenya alone, and conclude that in Kenya it results from a combination of broad public health efforts and the recent robust economic growth across the region.

With all the public health aid going to Africa all these decades it would appear that these miraculous reductions in child mortality rates has more to do with that robust economic growth.  It’s the improvement in their standard of living.  Which affords them better living conditions and better public health.  For it is no coincident that the healthiest countries are also the most prosperous countries.  Where wealth can build hospitals and clinics.  Pharmaceutical companies and drug stores.  And modern cities where there is no malaria. 

This is the greatest gift we can give to an impoverished people.  Free market capitalism.  Which empowers people.  Makes them the masters of their own destiny.  By raising their standard of living.  Without having to depend on celebrities or governments.  Who can take it away just as easily as they can give it to them.  But if they create this wealth on their own?  That’s a different story.  They will be independent.  And never again will they have to depend on the kindness of others just so their children can survive childhood.


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