The UK Economy lingers in Recession thanks to Inflation caused by High Tuition Costs and High Utility Bills

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

The Democrats have attacked health insurers with a vengeance for the high prices of health care.  They blame them for these soaring prices.  As well as greedy doctors, hospitals and pharmaceutical companies.  The Left is always ready to attack some greedy business for their ‘excessive’ profits driving up their prices.  And all businesses are guilty of being greedy profit whores.  With a couple of exceptions (see No Happy New Year for UK as Gloom Worsens by Holly Ellyatt posted 12/21/2012 on CNBC).

With gloomy economic forecasts, falling consumer confidence and poor retail figures adding to concerns over talk of the U.K. leaving the European Union, 2013 is set to be a tough year for the country, analysts say…

“There’s been a lot of discounting in the high streets because the shops are trying to shift stock and it’s not working,” Jane Foley, senior currency strategist at Rabobank, told CNBC…

Foley told CNBC that growth had been disappointing mainly due to inflation and low wage growth.

“[Inflation] took money out of our pockets and made our real wages negative. Many economists were anticipating that by now we would have positive wage growth but no, again we have sticky inflation and inflation at high levels because of university fees and utility bills going up.”

Funny how universities and the utilities are never labeled as greedy profit whores.  No, they never get attacked like those in business do.  Instead they attack greedy taxpayers who don’t volunteer to pay more in taxes to help subsidize the high cost of education and utilities.  They’re the greedy profit whores.  Who oppose those in education and the utilities from living a better life than they do.  How selfish.

University professors brainwash their students into being good liberal voters.  The utilities are unionized.  Both do a lot to elect liberals to office.  And keep them in office.  Therefore those who attack health insurers, doctors, hospitals and pharmaceutical companies never attack those in education and the utilities.  Even though they are gouging consumers far more than health insurers, doctors, hospitals and pharmaceutical companies.

For all the talk about leveling the playing field and looking out for the little guy the Left sure likes taking care of their own.  In a country where there is no nobility there is an aristocracy.  Government workers.  And those who help the government gain and maintain power.  These people live the good life.  While the rest are attacked for being greedy.  Pay high tuition costs.  And pay high utility bills.  The aristocracy has to pay these things, too.  But with the generous pay and benefits package they give themselves they can easily afford these things.  Thanks to the power they have to make us pay high tuition costs and high utility bills.  As well as high taxes.

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Stem Cells from Cadavers promise more Hope than Embryonic Stem Cells ever Promised

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

One of the most politicized subjects is stem cells.  The potential miracle cure for the worst that ails us.  They could make the blind see again.  And the paralyzed walk again.  The Left politicized Michael J. Fox and Christopher Reeve.  Saying we could cure Fox’s Parkinson’s disease and Reeve’s paralysis with the miracle of stem cells.  But not just any stem cells.  Embryonic stem cells.  That is if it wasn’t for the rascally Republicans who wanted Fox and Reeve to continue to suffer their maladies.  Even die.  Because Republicans opposed using aborted fetuses for ethical reasons.  While the Left wanted the use of embryonic stem cells as they would give abortions a higher purpose.  The gift of life.  After extinguishing life (see Cadaver stem cells offer new hope of life after death by Jessica Hamzelou posted 12/21/2012 on New Scientist).

Dead bodies can provide organs for transplants, now they might become a source of stem cells too. Huge numbers of stem cells can still be mined from bone marrow five days after death to be potentially used in a variety of life-saving treatments.

Human bone marrow contains mesenchymal stem cells, which can develop into bone, cartilage, fat and other cell types. MSCs can be transplanted and the type of cell they form depends on where they are injected. Cells injected into the heart, for example, can form healthy new tissue, a useful therapy for people with chronic heart conditions.

Unlike other tissue transplants, MSCs taken from one person tend not to be rejected by another’s immune system. In fact, MSCs appear to pacify immune cells. It is this feature which has made MSC treatments invaluable for children with graft-versus-host disease, in which transplants aimed at treating diseases such as leukaemia attack the child instead…

While only limited amounts of bone marrow can be taken from a living donor, a cadaver represents a plentiful source of cells, says D’Ippolito. “From one donor, you could take the whole spine, for example. You are going to end up with billions of cells…”

… Chris Mason at University College London sees a potential hurdle in using such MSCs in therapy. “The work is novel and intriguing… but it would be better to use a living donor,” he says. That’s partly because medical regulators oppose treating individuals with stem cells from more than one source. “You can always go back and get more stem cells from a living donor if you need them, but if you use a cadaver, you’ll eventually run out.”

They’re making great strides with adult stem cells.  From living donors.  And now from dead ones.  But one thing you don’t hear a lot about are advances made with embryonic stem cells.  Could it be that the Left was wrong all along?  That they were just looking for a noble purpose for abortions?  Perhaps.

A big problem with embryonic stem cells was their rejection.  Or complications that resulted in things like tumors.  Things that didn’t happen with adult stem cells.  Especially those harvested from the same body.  And now apparently from dead people.  People who have died from some other cause other than abortion.

The continued advances in adult stem cell research leave advances in embryonic stem cell research conspicuous by its absence.  Despite all of the false hope the Left gave people like Michael J. Fox and Christopher Reeve.  Suggesting that their arguments were more political than medical.  As everything with them is political.  For everything is about advancing their agenda.  And they were more than willing to lead medical research down a false path to advance their agenda.

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Real Prices fall where Consumers Spend their own Money which is why Health Care Prices have Soared

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

A lot of us no doubt hear our elders talk about how cheap things used to be.  “When I was a kid you could buy a bottle of pop for a nickel.”  “When I started driving you could fill up the gas tank for a couple of dollars.”  “I remember when 99 cents would buy you two eggs, 4 sausage, a slice of ham, 4 rashers of bacon, hash browns, toast and a cup of coffee.”  And, yes, everything they said was true.  Things cost a lot less back then.  But our paychecks were a lot smaller back then, too.

When President Nixon decoupled the dollar from gold we started printing money.  And when we did we devalued the dollar.  Causing a sustained and permanent inflation.  This inflation caused prices to go up.  And our paychecks grew, too, to allow us to afford those higher prices.  So prices are relative.  They become more expensive when they rise greater than our paychecks.  They become less costly when our paychecks rise greater than prices.  There is a better way to look at how prices change over time.  Something that factors in the affect of inflation.  By looking at the number of hours worked required for a purchase (see The Cost of Health Care: 1958 vs. 2012 by Chris Conover posted 12/22/2012 on Forbes).

Mark Perry has posted some interesting comparison of how prices have plummeted between 1958 and 2012 when measured in terms of the hours of work required to purchase items. He concludes that today’s consumer working at the average wage of $19.19 would only have to work 26.6 hours (a little more than three days) to earn enough income ($511) to purchase a toaster, TV and iPod.  The equivalent products (in terms of their basic function, not their quality) would have required 4.64 weeks of work in 1958. In short, the “time cost” of these items has massively declined by 86% in less than 5 decades.

Similarly, Perry calculates that measured in the amount of time working at the average hourly wage to earn enough income to purchase a washer-dryer combination, the “time cost” of those two appliances together has fallen by 83%, from 181.8 hours in 1959 to only 31 hours today.

What if we applied this kind of analysis to health care? The results are quite interesting. In 1958, per capita health expenditures were $134. This may seem astonishingly small, but it actually includes everything, inclusive of care paid for by government or private health insurers. A worker earning the average wage in 1958 ($1.98) would have had to work 118 hours—nearly 15 days–to cover this expense. By 2012, per capita health spending had climbed to $8,953. At the average wage, a typical worker would have to work 467 hours—about 58 days.

In short, while time prices for other goods and services had shrunk to less than one quarter of their 1958 levels, time prices for health care had more than quadrupled…!

This simple comparison reminds us of three basic truths. In general, private markets tend to produce steadily lower prices in real terms (e.g., in worker time costs) and steadily rising quality. This is exactly what we observe for goods such as toasters, TVs, iPods, washers and dryers. In contrast, while the quality of health care unequivocably has risen since 1958, real spending on health care has climbed dramatically. This isn’t an apples-to-apples comparison insofar as the bundle of goods and services that constitute health care is also much larger today than in 1958. In contrast, even though the quality may be better, a washing machine in 2012 is still a washing machine.[2] If we were willing to rely more on markets in medicine, we might be able to harness the superior ability of Americans to find good value for the money to produce results more similar to other goods.

So why are health care prices soaring in real prices when everything else is falling?  In a word, waste.  Where consumers spend their own money real prices have fallen.  Where consumers receive benefits other people pay for real prices have soared.  Where there are market forces (i.e., competition) prices fall and quality goes up.  Because manufacturers have to get consumers who are looking for the best value for the money to buy from them.  Where there are no market forces because someone else is paying for your benefits (single payer, third-party, insurance, government, etc.) people don’t look for the best value for the money.  They just look to get the most someone else will pay for.  So there is no incentive to reduce costs or find cheaper ways to deliver higher quality.  Like in the private sector.

Obamacare won’t improve this.  In fact, adding vast layers of bureaucracy will only add waste.  And increase prices further.  With all that money feeding into the new Obamacare bureaucracy there will be less available for health care services.  Resulting in longer wait times, service rationing and service denials.  Health care may be free one day to patients.  But the cost of that free health care will soar even higher for the taxpayers who will have to pay for all of that bureaucratic waste.

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China keeps a Short Leash on both their Factories and the Migrant Workers that make them Hum

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

The American Left likes China.  The way government partners with business.  And has dominion over business.  In China business can only do what government allows them to do.  For government picks winners and losers.  What the Left yearns for in America.  Not unfettered free market capitalism.  They like their capitalism under the yoke of government.  Where they can have high positions in government.  Or be outside advisers to government.  And have their hand on that yoke.  But it’s just not business that is under the government’s yoke in China (see Plight of teen prompts education debate, protest in China by John Ruwitch posted 12/22/2012 on Reuters).

As the end of middle school approached this year, Zhan Haite, 15, faced two choices: attend vocational school in Shanghai in the fall or move to her ancestral home in distant Jiangxi province to take the high school entrance exam and study there.

Taking the test and going to senior high school in cosmopolitan Shanghai, where she had lived since she was four, was not an option.

Zhan is one of millions of children whose parents belong to China’s vast migrant workforce and are barred from taking senior high school or college entrance exams where they live by half-century-old policies on household registration, or hukou.

The hukou system has split China’s population in two for decades, affording different privileges and opportunities to urban and rural residents. It is a major challenge for China’s new economic policymakers under Premier-in-waiting Li Keqiang as they try to push urbanization as an engine of growth…

China’s 230 million migrant workers have been the oarsmen of the world’s second-biggest economy but have long been treated as second-class citizens with unequal access to education, health and other services tied to official residence status.

The education issue has been particularly divisive…

Zhan’s father, Zhan Quanxi, was detained for several days this month after publicly protesting for education rights in central Shanghai, but criminal charges were dropped.

Still, his online posts have been met with sharp criticism from Shanghai hukou holders, some of whom have claimed to be part of a “Shanghai Defence Alliance”.

The verbal mud slinging reflects a battle over turf in big cities where high school seats can help students get into top universities, said Ralph Litzinger, an anthropology professor at Duke University who studies Chinese migrant issues.

First of all if you ever wonder why the Chinese (and others) are outscoring American students on tests this is why.  They study hard to get into the good high schools for a chance of getting into the good universities.  Where they will take the hard degree programs to get the good jobs.  They’re not floating through life partying and fighting for the decriminalization of marijuana.  And they’re not taking worthless degrees in the humanities so they can keep partying in college.  No.  The Chinese take their education seriously.  Which is why they are some of the most sought after recruits of leading high-tech companies.  Including those in the United States.

In addition to that state-capitalism utopia the Left sees in China there is also crushing disparity.  Where those migrant workers are good enough to feed their factories with cheap labor to sustain that export economy.  But they’re not good enough to sit at the same table with the big-city upper-classes.  Something the left is ostensibly against.  Both the cheap labor and class-based society.  Yet they yearn for the state-capitalism they have in China.  Because of the power the ruling elite has.  Which is what the Left wants.  Unfettered power.  And they would take what China has any day of the week.  As long as they are in the upper class.  And once they have the power they don’t need to worry about cheap labor.  Or care about it.  As they won’t need organized labor to keep them in power.

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Excessive Sin Taxes on Alcohol in Britain does not create Higher Tax Revenue

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

Potheads want to decriminalize marijuana because they like getting high.  Especially high school kids and college kids.  Who aren’t known for making responsible decisions.  Binge drinking, drunk driving, smoking cigarettes, stealing prescription drugs from their parents, unplanned pregnancies, sexually transmitted diseases, etc.  Things that just don’t happen much to married men and women raising a family in the suburbs.  Who actually grew up and became responsible adults.

But it’s just not the kids getting high.  There are a lot of ‘responsible’ adults who want to decriminalize marijuana, too.  Most of who spent their high school and college years stoned.  But they make a more responsible argument for the decriminalization of marijuana.  For it would end all of our budget woes if the government regulated and TAXED marijuana.  Equating getting high with responsible governing.  And if there is one thing we know whenever the government regulates and taxes something it encourages people to buy more of that something, flooding government treasuries with cash (see Alcohol duty fraud: Action needed, say off-licences by Emma Forde posted 12/22/2012 on BBC News Business).

UK tax authorities are not doing enough to tackle alcohol duty fraud, claims a leading off-licence chain.

Bargain Booze told the BBC that the number of stores telling HM Revenue and Customs that they face illegal competition is rising…

Alcohol duty fraud in the UK often involves exporting alcohol to the EU – untaxed – and then bringing it back into the UK with false paperwork.

This method exploits EU rules which state duty does not have to be paid on alcohol when it is being transferred between registered producers or wholesalers – it is only paid when it enters the marketplace.

But the BBC’s 5 live Investigates programme has learned that some lorries containing duty-unpaid alcohol meant for export never even leave the UK…

The illicit alcohol ends up in the hands of rogue wholesalers and retailers who then sell it on at prices which legitimate traders say are only possible if duty has been evaded…

Representatives from the alcohol retail industry claim the total cost to the Exchequer could be billions of pounds: “HMRC view the loss of revenue to the Exchequer at £1.2bn, but that excludes wine. Within the trade, the real cost to the Exchequer is viewed as something in excess of £4bn a year,” says Keith Webb…

The cash-and-carry owner, who did not want to be named due to fear of reprisal from criminal gangs, says it would have to pay around £19.35 for a box of six bottles of Echo Falls Chardonnay – of that, £11.40 would be duty.

The same amount and brand of lager would cost £16.56, with duty at £9.36 per case.

You just can’t add a 57-59% excise tax on something and expect the criminal element not to take advantage of that.  That’s just too juicy a profit to pass up.  And an easy and safe profit to make.  For they don’t have to traffic in an illegal substance.  They’re just doing the tax evasion part of illegal drug trafficking.  Making it a far less risky crime.  So why wouldn’t they exploit the government’s regulating and taxing of alcohol?  This is a gift handed to them on a silver platter.  And the same thing would happen with marijuana.

There is a problem with sin taxes.  The purpose of a sin tax is to dissuade people from participating in an unhealthy behavior.  Such as drinking and smoking.  So as they raise these taxes people buy less of these things.  Meeting the goal of a sin tax.  But if you use that same sin tax for revenue purposes you have a problem.  For the more you dissuade that behavior (i.e., the more you raise the tax rate) the less people will participate (i.e., the less tax revenue they collect).  The two (dissuading behavior and raising tax revenue) are mutually exclusive.  You can dissuade unhealthy behavior.  Or you can raise revenue.  But you can’t do both.  Which is why we have sin taxes and not outright prohibitions on these behaviors.

Governments are less interested in their stated purpose (dissuading unhealthy behavior) than they are in raising revenue.  For they are desperate to find new sources of revenue to pay for their irresponsible spending ways.  Which is why alcohol and tobacco products in the U.S. have very high excise taxes.  As well as laws setting minimum prices.  They say these are to protect the consumer from predatory pricing.  Something few consumers ever complain about.  Low prices are good.  The lower the better.  The only people hurt by predatory pricing are businesses that can’t compete at those lose prices.  And governments trying to collect confiscatory excise taxes on sinful behavior.  To avoid the problems they’re having in the UK with their alcohol duty fraud.

Governments don’t want criminals profiting off these high excise taxes by selling alcohol to consumers at lower prices.  They want the consumers to pay higher prices so they can give more of their income to the government.  To help pay for their irresponsible spending.  Which they never consider cutting to solve their budget problems.  They only consider new sources of revenue.   Or raising tax rates.  Which will happen with marijuana.  Opening the door for less risky profit taking for the criminal element the more they decriminalize it.  And the more they tax it.

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