Following up on my last post this little inspirational and hortatory essay, written by Elbert Hubbard (not to be confused with Ron Hubbard) who died on the Lusitania, used to be a regular recital piece by school children. It might be a good idea if we started learning it again.

In all this Cuban business there is one man stands out on the horizon of my memory like Mars at perihelion. When war broke out between Spain & the United States, it was very necessary to communicate quickly with the leader of the Insurgents. Garcia was somewhere in the mountain vastness of Cuba- no one knew where. No mail nor telegraph message could reach him. The President must secure his cooperation, and quickly.

What to do!

Some one said to the President, “There’s a fellow by the name of Rowan will find Garcia for you, if anybody can.”

Rowan was sent for and given a letter to be delivered to Garcia. How “the fellow by the name of Rowan” took the letter, sealed it up in an oil-skin pouch, strapped it over his heart, in four days landed by night off the coast of Cuba from an open boat, disappeared into the jungle, & in three weeks came out on the other side of the Island, having traversed a hostile country on foot, and delivered his letter to Garcia, are things I have no special desire now to tell in detail.

The point I wish to make is this: McKinley gave Rowan a letter to be delivered to Garcia; Rowan took the letter and did not ask, “Where is he at?” By the Eternal! there is a man whose form should be cast in deathless bronze and the statue placed in every college of the land. It is not book-learning young men need, nor instruction about this and that, but a stiffening of the vertebrae which will cause them to be loyal to a trust, to act promptly, concentrate their energies: do the thing- “Carry a message to Garcia!”

General Garcia is dead now, but there are other Garcias.

No man, who has endeavored to carry out an enterprise where many hands were needed, but has been well nigh appalled at times by the imbecility of the average man- the inability or unwillingness to concentrate on a thing and do it. Slip-shod assistance, foolish inattention, dowdy indifference, & half-hearted work seem the rule; and no man succeeds, unless by hook or crook, or threat, he forces or bribes other men to assist him; or mayhap, God in His goodness performs a miracle, & sends him an Angel of Light for an assistant. You, reader, put this matter to a test: You are sitting now in your office- six clerks are within call.

Summon any one and make this request: “Please look in the encyclopedia and make a brief memorandum for me concerning the life of Correggio”.

Will the clerk quietly say, “Yes, sir,” and go do the task?

On your life, he will not. He will look at you out of a fishy eye and ask one or more of the following questions:

Who was he?

Which encyclopedia?

Where is the encyclopedia?

Was I hired for that?

Don’t you mean Bismarck?

What’s the matter with Charlie doing it?

Is he dead?

Is there any hurry?

Shan’t I bring you the book and let you look it up yourself?

What do you want to know for?

And I will lay you ten to one that after you have answered the questions, and explained how to find the information, and why you want it, the clerk will go off and get one of the other clerks to help him try to find Garcia- and then come back and tell you there is no such man. Of course I may lose my bet, but according to the Law of Average, I will not.

Now if you are wise you will not bother to explain to your “assistant” that Correggio is indexed under the C’s, not in the K’s, but you will smile sweetly and say, “Never mind,” and go look it up yourself.

And this incapacity for independent action, this moral stupidity, this infirmity of the will, this unwillingness to cheerfully catch hold and lift, are the things that put pure Socialism so far into the future. If men will not act for themselves, what will they do when the benefit of their effort is for all? A first-mate with knotted club seems necessary; and the dread of getting “the bounce” Saturday night, holds many a worker to his place.

Advertise for a stenographer, and nine out of ten who apply, can neither spell nor punctuate- and do not think it necessary to.

Can such a one write a letter to Garcia?

“You see that bookkeeper,” said the foreman to me in a large factory.

“Yes, what about him?”

“Well he’s a fine accountant, but if I’d send him up town on an errand, he might accomplish the errand all right, and on the other hand, might stop at four saloons on the way, and when he got to Main Street, would forget what he had been sent for.”

Can such a man be entrusted to carry a message to Garcia?

We have recently been hearing much maudlin sympathy expressed for the “downtrodden denizen of the sweat-shop” and the “homeless wanderer searching for honest employment,” & with it all often go many hard words for the men in power.

Nothing is said about the employer who grows old before his time in a vain attempt to get frowsy ne’er-do-wells to do intelligent work; and his long patient striving with “help” that does nothing but loaf when his back is turned. In every store and factory there is a constant weeding-out process going on. The employer is constantly sending away “help” that have shown their incapacity to further the interests of the business, and others are being taken on. No matter how good times are, this sorting continues, only if times are hard and work is scarce, the sorting is done finer- but out and forever out, the incompetent and unworthy go.

It is the survival of the fittest. Self-interest prompts every employer to keep the best- those who can carry a message to Garcia.

I know one man of really brilliant parts who has not the ability to manage a business of his own, and yet who is absolutely worthless to any one else, because he carries with him constantly the insane suspicion that his employer is oppressing, or intending to oppress him. He cannot give orders; and he will not receive them. Should a message be given him to take to Garcia, his answer would probably be, “Take it yourself.”

Tonight this man walks the streets looking for work, the wind whistling through his threadbare coat. No one who knows him dare employ him, for he is a regular fire-brand of discontent. He is impervious to reason, and the only thing that can impress him is the toe of a thick-soled No. 9 boot.

Of course I know that one so morally deformed is no less to be pitied than a physical cripple; but in our pitying, let us drop a tear, too, for the men who are striving to carry on a great enterprise, whose working hours are not limited by the whistle, and whose hair is fast turning white through the struggle to hold in line dowdy indifference, slip-shod imbecility, and the heartless ingratitude, which, but for their enterprise, would be both hungry & homeless.

Have I put the matter too strongly? Possibly I have; but when all the world has gone a-slumming I wish to speak a word of sympathy for the man who succeeds- the man who, against great odds has directed the efforts of others, and having succeeded, finds there’s nothing in it: nothing but bare board and clothes.

I have carried a dinner pail & worked for day’s wages, and I have also been an employer of labor, and I know there is something to be said on both sides. There is no excellence, per se, in poverty; rags are no recommendation; & all employers are not rapacious and high-handed, any more than all poor men are virtuous.

My heart goes out to the man who does his work when the “boss” is away, as well as when he is at home. And the man who, when given a letter for Garcia, quietly take the missive, without asking any idiotic questions, and with no lurking intention of chucking it into the nearest sewer, or of doing aught else but deliver it, never gets “laid off,” nor has to go on a strike for higher wages. Civilization is one long anxious search for just such individuals. Anything such a man asks shall be granted; his kind is so rare that no employer can afford to let him go. He is wanted in every city, town and village- in every office, shop, store and factory. The world cries out for such: he is needed, & needed badly- the man who can carry a message to Garcia.

I have been shaving for fifty years. Most of that time I have shaved with blades. I started shaving with an electric razor as my dad did (he shaved twice a day) but my beard was tougher than his and by the time I had gotten a clean shave my skin was rubbed raw. So I began shaving with a safety razor and have, starting with Gillette Blue Blades and proceeding through Wilkinson Sword Blades and others on to the present day. And I’ve bought nearly every one of those razor blades at a Walgreens store. No more.

While I was on my regular Saturday shopping errands this morning, one of those errands was picking up a prescription for my wife at Walgreens. While I was there, knowing that I needed razor blades, I went by the shaving aisle.

Shrinkage (the retailer’s term of art for lossage, mostly theft) is a problem for most retailers running from about 8% of total sales to as much as 30%. I’m sympathetic. Different retailers have adopted different strategies for reducing it (mostly ineffective, I suspect—the dirty little secret of retailing is that most shrinkage is a consequence of employee theft which can’t easily be prevented by the strategies that have been deployed). Walgreens’s strategy for reducing the theft of razor blades is to put them in locked cases in the aisles with buttons you can press for service. That strategy makes several assumptions among them that the employees are willing to go to the aisle to open the case and that the prospective customers are willing to wait for as long as it takes.

I went to the aisle, pressed the button, heard the PA system request customer assistance in the shaving aisle, and put a timer on. At the end of five minutes I gave up. I then went to the pharmacist’s counter, waited another five minutes for attention, got my wife’s prescription, paid, wasted another 30 seconds giving the pharmacist a piece of my mind, ended with “Please tell the manager that he’s lost my business”, and left.

Waiting a couple of minutes for service is understandable; it means they’re understaffed. Waiting five minutes and giving up in an essentially empty store is bad management: the employees clearly don’t give a damn and that’s a management problem. The unfortunate thing about employees not giving a damn is that they won’t give a damn that they’ve lost the business, either.

My annualized business with Walgreens probably runs into four figures somewhere and now they’ve lost most of that business. It’s not much but it’s the most I can do within the confines of the law. From my point of view I’m giving the store the death penalty. I hope the store closes and that all of its employees lose their jobs so they have plenty of time to do whatever they’re doing instead of attending to customers with all of the extra time they’ve got on their hands.

I may write a letter to Walgreens customer service but I probably won’t. I suspect that they don’t give a damn, either. Walgreens is not the only store in the world. I’ll keep going there for my wife’s prescription but I’ll never buy as much as a pack of gum more at a Walgreens ever again. I’d rather go where my business is wanted and I strongly urge others to do the same. Depending on how strong my pique is, I may run this post every couple of months just as a reminder. With any luck search engines will find it.

I’ve completed a second nine week fitness program, this time at the intermediate level of intensity. Although I haven’t increased my calorie intake and I have increased my level of activity substantially since I began my first nine week program more than four months ago, I haven’t lost much weight.

My waistline has gone down a bit, not surprising given the strenuous core body training I’ve been doing since Christmas. And my strength and endurance have clearly increased. Activities I found trying in the extreme are now relatively easy for me.

Next week I’ll begin the third run through the program, this time at the highest level of intensity. If I find it too much for me I’ll dial back to the intermediate level. However, if my experience last time holds true the beginning of the program at the highest level of intensity won’t be quite as grueling as the end of the program at the intermediate level and they’ll ratchet things up gradually.

The downside of the program at higher levels of intensity is that the number of repetitions is beginning to become boring. I didn’t find 110 rope skips (three times throughout the course of a single session) physically demanding. I found it dull.

And I’ve chewed through three exercise bands (one was included in the original kit). They pretty clearly aren’t made for the kind of stress I’m putting on them.

There has been quite a bit of comment on this graph of rising healthcare costs from the Kaiser Family Foundation:

so I thought I’d put my oar in if only to question some of the other comments about it and raise some questions of my own.

Matt Yglesias titles his post on the graph “Consumers Like Buying Health Care Services”. That may or may not be true; I don’t believe you can make that determination from this chart. However, the remark does bring up some useful distinctions. “Buyers” are people who lay out money for something (just as “taxpayers” are people who actually pay taxes). In the United States and, I believe, all of the countries in that chart, consumers and buyers are two different groups of people, i.e. for a sizeable chunk of consumers their healthcare is heavily or entirely subsidized.

There are actually three components of any purchasing transaction: the buyer, the individual who makes the purchase decision, and the end consumer. They may be the same person; they may be three different people. So, for example, when I was very small (well over a half century ago) I may have eaten the chocolate Easter bunny (consumer) but my mom bought it (purchase decision) and my dad paid the bill (buyer).

Healthcare is a bit like that. Patients are, in general, neither the purchase decision-makers nor the buyers. Those roles are filled to some extent by physicians and insurance companies (and employers) or the government, respectively. Efforts at reducing costs follow that transactional process: they are targeted at unifying these roles and take different tacks depending on the ideological preferences of the proponent. So, for example, the Ryan plan is an attempt to make consumers more responsible for paying their own bills under the (in my belief) incorrect apprehension that if healthcare consumers and healthcare buyers are one and the same that the consumers will behave more prudently. However, it ignores that the role of consumer and decision-maker are also distinct.

The ACA via its review board strategy attempts to unify the decision-maker role with the buyer role. I believe it will be frustrated in that by healthcare consumers and by the sheer scope of the task: I don’t believe there are enough utterly unnecessary or provably futile procedures performed to achieve the necessary cost savings.

All that I think can be concluded from the graph are that a) healthcare costs for the selected countries in the graph are all rising at an unsustainably high pace and b) our healthcare costs are enormously higher than those of the other countries in the graph.

Now I’ve heard it argued that healthcare is a superior good and that as incomes rise more will be spent on healthcare. I think that argument is largely hooey for reasons largely along the lines of the transaction process I’ve outlined above: the consumers aren’t the only ones making the decision process and the consumers are insulated from both the decision-making and buying roles. It may be true that healthcare is a superior good; I just don’t think you can make that determination based on rising incomes and rising healthcare costs. The rising incomes and the rising consumption are on the part of overlapping but different groups. Is the theory of economics under which when party A says that party B must consume more X and it will be paid for by party C the theory of superior goods? I don’t think so.

Here’s my question: how much do the very rich (where most of the income growth in the United States has come from) spend on healthcare? Has their healthcare spending on themselves risen at the same rate as their incomes, at a lower rate, at the general rate of cost increases in healthcare, or not at all?

And the graph itself does bring up a question for me. Healthcare, as noted above, is hardly a market at all but some of its aspects are more market-driven than others. So, for example, GPs are more portable than medical specialists like, say, cardiologists or neurosurgeons. When physicians move from country to country it tends to be as GPs. And the median wages of GPs are more similar from country to country than, say, the median wages of cardiologists.

As is obvious from the chart the U. S. is the highest payer among the countries selected for it. To what extent does the price paid by the highest payer push up the prices for the other countries in the chart? Unless the answer is “not at all”, the perverse U. S. healthcare system is increasing healthcare costs everywhere.

Follow-up question: to what extent is that offset by the higher R&D costs that the U. S. is paying? What’s the relationship between costs and benefits?

Which of these accomplishments do you think President Obama will most want to be remembered for:

1. First African-American elected to the presidency
2. First president since Lyndon Johnson to pass a comprehensive healthcare reform bill
3. First president to default on the debt

12 minute video presentation from Thomas Palley on how to reform the Federal Reserve (hat tip: Yves Smith).

The short form of Dr. Palley’s proposal is nationalize the Fed, give it more power, broaden its intellectual base.

Frankly, although I completely agree with him on the failure of the Fed to satisfy its mandate and the reasons behind it, I’m skeptical of his prescription. Were the SEC or the other various government agencies notably successful in meeting their own mandates? Maintain a broad intellectual base? Quite to the contrary some of the agencies acknowledged that even though they had both the power and the mandate they simply dropped the ball. Why would a nationalize Fed be any different?

I’d rather see the Fed’s mandate limited, the more politically-charged components stripped away, and that the governors and chairman be held strictly accountable for failures of oversight and management on their watch.

As thought that’s likely to happen. I think the Powers That Be like the way it is now. It provides for maximum impact with minimum accountability. It’s perfect.

I think that we can all agree that the 1.8% growth in real GDP that was announced at the FOMC meeting the other day is too low to bring the unemployed back to work in numbers, under the circumstances unacceptably low. Let’s take a look at a couple of graphs on GDP.

The first is from a post of James Hamilton’s.

I’ve taken the liberty of drawing a horizontal line at 4%. I think this graph makes it rather clear that anybody who claims that we can grow persistently at a rate of 4% or above is a charlatan. We didn’t grow that fast during the “Reagan boom” (which was itself fueled by Keynesian stimulus—that’s what a deficit is) and over the last ten years real GDP growth has averaged below 3%. I’ve made my opinion on this pretty clear: in order to achieve anything other than a phlegmatic level of growth we’re going to need to start investing rather than consuming. That’s going to be difficult if not impossible unless we control and even reduce how much we’re spending on healthcare.

The second is a breakdown of where the growth that we are experiencing is coming from by sector from Donald Marron:

What leapt out at me from this graph was that even if declining government spending (presumably by state and local governments) weren’t dragging GDP down we still wouldn’t be seeing the level of growth we should be at this stage of a recovery. Something is seriously wrong and I find it hard to believe that we can correct it by borrowing at an accelerating rate.

I’d like to draw your attention to a post from Walter Russell Mead, a sort of midway status report of the first term of the Obama Administration:

The President looks like a man who is ridden by events; at just the moment when the nation craves a strong leader, the President looks weak, dodgy, uncertain. The contrast with the inflated hopes that an untested and inexperienced Senator Obama did so much to build up is crippling. Obama has fallen so far precisely because he and his supporters so hugely oversold him.

He once despised Bill Clinton for the comprising and triangulating that got him through his eight years. President Obama was going to do it differently: he was going to fight and win.

Perhaps he will; politics is full of surprises and it is still almost a year and a half until the election. But at the moment the President seems to be envying Clinton’s talents and attempting to emulate rather than scorn them. From anti-Clinton to aspiring Clinton is a long fall and it can’t be much fun.

We are starting to get to know this President a little better, and his chief besetting fault is increasingly clear: the President falls between stools. He is a man of half measures, a man who spends so much money hedging his bets that he loses even when he wins.

Time and again the President angers one side without conciliating the other. His public demand that Israel agree to a complete settlement freeze as a condition for peace talks alienated Israelis (and not just supporters of Prime Minister Netanyahu); his subsequent back peddling humiliated and angered the Palestinians. He pleased no one, fumbled what he had once proclaimed a crucial priority of his administration, and is left with reduced influence with both sides.

At home the President’s hedging has antagonized and energized the right without delivering the goods to his base on the left. The health care bill was so watered down from what candidate Obama proposed on the stump that key constituencies on the left were dismayed; the change was so large that the right was energized; the legislation so compromised and misshapen that it failed to satisfy. The stimulus was the same: large enough to stir up the deficit hawks but too small (and too poorly constructed) to launch a “V” shaped recovery. In the Middle East he has been too cautious and slow in siding with the revolutionaries to dent American unpopularity in the region — but by dropping US support for longtime ally Hosni Mubarak he antagonized and alarmed the Saudis.

followed by a detailed exegesis of President Obama’s decision-making style.

I cannot know what his decision-making style is. If, indeed, the president’s approach to compromise is as Dr. Mead suggests:

This repeated lunge for the sour spot — the place where costs are high and benefits are low — now seems to be a trademark of the President’s decision-making style. On the left it is earning him Carter comparisons from people like Eric Alterman; on the right it means that despite his compromises and yielding of significant ground he continues to feed the incandescent hostility of his bitterest foes. Worst of all, it suggests to people abroad and at home that the way to manipulate this “split the difference”, consensus-seeking President is to raise your demands. If you are going to get something like 50 percent of what you ask for, ask for twice as much as you really want. And with this Presidential style, the squeaking wheel gets the grease. Not surprisingly, all the wheels have begun to squeak.

then I would claim that isn’t compromise at all. It’s merely detente and barely that. Compromise doesn’t mean mechanically splitting the difference; it means searching for common ground. When there is no common ground or the common ground isn’t sufficient to form the basis for a solution, no solution is possible. It is a wicked problem and the most that can be accomplished is to create the basis for ongoing communication.

I’ve made this analogy before but I think it bears repeating. If one group wants to build a bridge across the river and the other group wants no bridge across the river, building a bridge halfway across the river is no compromise. Everybody loses; nobody wins; everybody is worse off.

I continue to believe that President Obama will be re-elected. We tend to re-elect presidents and, barring an economic catastrophe that can’t be smoothed over with creative accounting, he will be. However, I also think we’re in for a bumpy ride.

The augurs and haruspices have assembled and are struggling to interpret Federal Reserve Chairman Ben Bernanke’s pronouncements. Reports suggest that he saw his shadow which means that we’ll have another year of lacklustre growth in the economy.

I thought that the revisions in the FOMC’s estimates of upcoming GDP growth and inflation were about the most interesting part of the whole proceedings. Essentially, growth will be slower than they were predicting just a couple of months ago and inflation will be higher. My prediction is that they’ll lower their GDP projections and raise their inflation projections again before the end of the year. They’ll also continue to say that both are transitory. As are all things.

I find it interesting that nobody seems to be quite as appalled at the fact of the press conference as I am. If the Chairman of the Federal Reserve is a technocrat, he or she shouldn’t need or want to have a press conference. If the Chairman of the Federal Reserve is a bureaucrat, is he or she acting as a proxy for the president in giving a press conference? Does the president have sufficient control over the Fed chairman for this to be effective?

If the Chairman of the Federal Reserve is a politician, shouldn’t he or she be more directly answerable to the voters for the conduct of his or her job?

To my mind more than anything else a press conference by the Fed chairman highlights the burning need to pare back the responsibilities of the Fed to something it might actually be able to accomplish. I propose limiting its responsibilities to preserving the health of the banking system and holding its governors responsible with civil or even criminal penalties if they fail to do so. Much simpler and more effective than Dodd-Frank.

At the very least shouldn’t the Fed chairman have some nondescript person leaning over his or her shoulder during a press conference whispering “you are not a god”?