Hobby Lobby criticizes Obamacare

One last interesting post as we wrap up the quarter. 

The US Supreme Court has said it will hear a Christian-owned company's challenge to a requirement in President Barack Obama's healthcare law that employers cover workers' contraception.

The owners of Hobby Lobby, a chain of craft supply shops, say the requirement violates their religious beliefs.

US-Iran Nuclear Deal

"The West has long suspected Iran's uranium enrichment programme is geared towards making a weapon, but Tehran insists it only wants nuclear energy." Do you think Iran is playing Obama? 

Obama acknowledged that obstacles remained but said "tough talk and bluster" did not guarantee US security.

There has been a lot of back and forth, heated debates and big challenges surrounding this deal.  It is one thing to tell others to do something that you do yourself.  None of the western powers or Saudi for that matter have renounced their nuclear powers and yet they are putting immense pressure on Iran for wanting to do so. Is this a form of political hypocrisy? 

NUCLEAR OPTION

US President Barack Obama has lent his support to a move by Senate Democrats to limit Republicans' ability to block White House nominations.

Power trip?

http://www.bbc.co.uk/news/world-us-canada-25042482

health insurance or double whammy?

in case you're not tired of this talk already here's an article shedding light on the corollaries of Obamacare on small businesses and its employees. 

"To be sure, the new health law will also impose other fees and taxes, including a $63 tax on each person covered in a health plan starting next year.

The new health-law tax, which increases annually, is projected to raise premiums for small businesses by an average of 1.9% to 2.3% in 2014, or about $150 per employee and $360 per family, according to a report by management-consulting firm Oliver Wyman in Milwaukee, Wis. By 2023, the firm predicts the cost could rise to an average of $360 per employee and $890 per family for small businesses."

what are your thoughts on the different levels of health insurance tax (hit)?

perks and kinks of emerging economies

"Having spent years as favoured spots for investment for asset-managers, industrialists, cab drivers and monkeys throwing darts, their economies suddenly fell from grace... Emerging economies have been slowing for several years" 

The role of the government of the "fragile five" boils down to stabilizing and restructuring the economy to make it easier to do business and foreign investment.  What point(s) do you think this article on emerging economies is trying to drive home? Are emerging markets more volatile than their counterparts and is the risk worthwhile?

Still think austerity works in a recession?

This comes from one of my favorite economics blog run by a broad spectrum of Economists all interested in shaking up their field. Professor Black of UMiss-KC takes the NYT correspondent Jackie Calmes to task for her continued misunderstanding and misrepresentation of post-crash economics: "Jackie Calmes’ “Dirty Secret” about the Opponents of Austerity is that they are Correct"

Link: http://neweconomicperspectives.org/2013/11/jackie-calmes-dirty-secret-opponents-austerity-correct.html#more-6929

What does everyone else think? Is Black correct in his assessment of austerity's inefficacy, or does Calmes actually have a point?

 

Lesson Is Seen in Failure of Law on Medicare in 1989

The tortured history of the catastrophic-care law is a cautionary tale in the context of the struggle over the new health law, the Affordable Care Act. It illustrates the political and policy hazards of presenting sweeping health system changes to consumers who might not be prepared for them. 

Backers of the Affordable Care Act say comparisons to the catastrophic-care debacle are flawed. They say that the new law fills a major health insurance void and that despite its current problems it will never meet the same fate as that undertaking in 1988.

Others involved with the passage and repeal of the Medicare Catastrophic Coverage Act see clear parallels with the current situation, in which a very vocal segment that views itself as harmed by the new law has joined with highly organized political operations to rally opposition to it.

What do you guys thinks ? Is there a lesson to be learnt from the Medicare Catastrophic Coverage Act or is it incomparable to the Affordable Care Act ? Here is the actual article.

Disaster Risk Management in the Arab World is Critical and Cost Effective

http://www.worldbank.org/en/news/press-release/2013/11/17/disaster-risk-management-in-the-arab-world-is-critical-and-cost-effective Do you see parallels to the class reading activities? From a global economic perspective, there are regions normally considered macro economies with much higher concentrations of certain risks than others similarly to the dynamics on the micro scale in a way. How to distribute the burden?

America's cities on the edge

http://www.cnbc.com/id/101196425/page/1

The hardest-hit cities find themselves mired deeply in a downward spiral as cuts in services, rising crime rates and falling property values all contribute to the decline (see graphic: The Recession's Aftermath). "If you can't provide the environment for investment, the process of shrinking just continues," said Jeffrey Keefe, a labor economist at Rutgers University. "The people and businesses leave, and there's no inflow of economic resources. So all you're doing is living off external subsidies to provide law and order and some basic education and social insurance."

"We're not just competing city to suburb anymore," he said. "Our regions are competing globally. But they won't be able to sustain that competitive edge if they're burdened by the legacy of aging infrastructure and pension costs."

That has left many of America's most distressed cities to fend for themselves. "The resources are there; the question is whether they can be reallocated from the communities that have resources to those that don't," said Rutgers' Keefe.

How does this article make you think about relationship between the public and private sector?

Walmart economy

"Walmart said about 10 of more than six dozen Bangladesh garment factories failed safety checks in audits it commissioned.

The retailer hired Bureau Veritas to check some 200 factories it uses in Bangladesh after the April collapse of the Rana Plaza building killed more than 1,100 people and highlighted often grim conditions in the country's garment industry.

About 75 factories have been audited so far and Walmart said it will release results for other factories as the inspections are completed.

It said factories that failed audits have since made improvements."

Thoughts?

China’s economic reforms: What you need to know

http://www.cnbc.com/id/101205322 We've been hearing about the relaxation of the one-child policy, but many other changes are happening in China. Any thoughts?

The coming R&D crash

Last time in class we saw a TED talk about government's important impact on innovation. Here is an article discussing the possibility of a R&D crash in the USA.
What do you think about the projections? Do you think the private sector can pick up the slack?

Basic Income – A simpler welfare model?

An article in the Times recently discussed a growing movement in Switzerland (amongst other countries) to create a 'basic income:' http://www.nytimes.com/2013/11/17/magazine/switzerlands-proposal-to-pay-people-for-being-alive.html?_r=0&pagewanted=all

It's the basic idea that you simply give everyone of your citizen's a check that provides them with a minimum income for living. An earlier article in the Atlantic argued that such a measure in the US would cut official poverty rates in half: http://www.theatlantic.com/business/archive/2013/10/how-to-cut-the-poverty-rate-in-half-its-easy/280971/

What do you all think? Is it a convincing argument? Politically unfeasible? Would there be too significant negative effects on 'worker motivation'? Should we even care to do this?

Environmental tornado = economic turmoil?

In light of the deadly recent Filipino typhoon this article about today's tornado hits very close to home for all of us. An untimely and destructive storm that has caused severe damages and death cannot be avoided. What does this mean for the midwest? I think this has some serious economic implications. What are some of the obvious and not so obvious ones?

Obamablunder

Is Obamacare making a case against the role of a big government? 52% of Americans are displeased with the President due to the  healthcare blunder. What else can you deduce from this article?

More on TPP trade agreement

http://news.cnet.com/8301-1023_3-57612288-93/wikileaks-publishes-draft-of-secretive-tpp-trade-pact/
Check out the article and tell us what you think.

China easing up the 1 child rule

http://online.wsj.com/news/articles/SB10001424052702303289904579199431427590394?mod=WSJ_hps_LEFTTopStories
What is your take on the changing policies?

Typhoon Yolanda to trim PHL economic growth

http://www.gmanetwork.com/news/story/335060/economy/finance/typhoon-yolanda-to-trim-phl-economic-growth How would you relate this incident to what you've learned about the role of the government as a risk manager?

The real economy trumps the financial economy.

Think of all the ways that this matters:

 

Country Rankings Of Sex Ratio At Birth - Business Insider

The U.S. labor force is still shrinking. Here’s why.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/08/the-u-s-labor-force-is-still-shrinking-rapidly-heres-why/

The U.S. labor force keeps shrinking rapidly. Back in 2007, 66 percent of Americans had a job or were actively seeking work. Today, that number is at 62.8 percent — the lowest level since 1978:

So why does the size of the labor force matter? For one, if people are leaving the labor force for economic reasons (and they're not going back to school), it would mean that the economy is in much worse shape than the official unemployment rate suggests. The jobless rate is officially 7.3 percent, but that only counts people who are actively seeking work — not labor-force dropouts. The size of the labor force also goes a long way to determining America's growth prospects. If, say, Baby Boomers are retiring faster than expected, then long-run U.S. economic growth will be lower than projected. Even worse, if discouraged workers are dropping out of the labor force entirely, they may never make their way back into jobs. Their skills erode over time. Companies don't even bother to look at their resumes. They essentially become unemployable.

What are your thoughts on the economic repercussions of this fact? Can and should the government do something about it?

Why does this remind me of Tuesday night?

How To Win 'The Price Is Right' - Business Insider

Another cisis in the making?

http://www.bloomberg.com/news/2013-11-13/central-banks-risk-asset-bubbles-in-battle-with-deflation-danger.html

Thoughts? What can governments do?

Distress Grows for Philippine Typhoon Victims Who Can’t Get Aid, or Out

Earlier today we discussed the disaster in the Philippines. The most recent count has the dearth tool at 1,798. The relief effort seems to be moving all too slowly.

http://www.nytimes.com/2013/11/13/world/asia/anger-rising-over-conditions-in-tacloban-ravaged-philippine-city.html?ref=world&_r=0

While a storm like this is impossible to prepare for should the government have had some better type of emergency system in place? What about the rest of the world, how would the UN prepare for these tragedies or is the uncertainty to such a point that this is the best they could hope to do?

Bill Clinton wieghs in on the Healthcare bill.

"Former President Bill Clinton said he thinks the Affordable Care Act may need to be changed to help consumers whose health insurance policies are being canceled."
http://online.wsj.com/news/articles/SB10001424052702304868404579194294230693488?mod=WSJ_HealthLaw_LeftTopNews

What changes do you think they need to make to the bill?

What happens if your insurance company fails ?

After watching Enron's bankruptcy video and reading about Risk Management for the last two weeks, I have repeatedly thought about what happens if my insurance fails to manage my risk and goes bankrupt. This article explains how susceptible insurance companies are to failure and how much protection the government offers to consumers.

Inequality in global perspective

Hans Rosling Inequality Chart - Business Insider

HeathCare.gov Enrollment Falls Far Short of Target

healthcare.gov has been online for nearly a month now and only 50,000 citizens have signed up for private health care through the website. The faults with the website have no doubt caused this number to be lower than the 500,000 that the administration expected.

http://online.wsj.com/news/articles/SB10001424052702303460004579192190709762378?mod=WSJ_WSJ_US_News_6

Do you see this as an example of typical government inefficiency, or just some bad luck? Do you think the goal they set would have been reached with these problems or is part of the reason that this number is so low a result of people not buying into the system? Do you think this rocky start have a lasting effect on obamacare?

The TTP: a new world governance system

New isn't always better; even is a part of this is true: 

The next “trade” treaty will be the Trans-Pacific Partnership (TPP). This is a huge treaty with only a small part covering trade. Most of the agreement (according to leaks) sets down a new kind of regulatory structure [what does that mean?] for the giant corporations that would supersede the ability of any country to rein them in. The treaty is being negotiated in secret with only business interests “at the table.” Representatives of others with a stake in the outcome are not part of the process. Groups representing the interests of consumers, labor, human rights, the environment, democracy or even smaller and innovative companies that might want to compete with the giant multinationals are not part of the negotiations.

To bad about the verticals, not to mention the American people, or their elected representatives. CEPR:

Of course the TPP is not about free trade, in most cases the formal trade barriers between the countries negotiating the pact are relatively low. The main thrust of the negotiations is to impose a regulator[y] structure in a wide range of areas — health, safety, environmental — which will override national and sub-national rules. This has little to do with trade and in some cases, such as the increased patent protection for prescription drugs being pushed as part of the deal (which is noted in the article), will actually involve increased barriers to trade.

Read more at http://www.nakedcapitalism.com/2013/11/the-tpp-if-passed-spells-the-end-of-popular-sovereignty-for-the-united-states.html#YrQ6TY6J5lRtcQTE.99

The TPP, if Passed, Spells the End of Popular Sovereignty for The United States « naked capitalism

Cuts in Hospital Subsidies Threaten Safety-Net Care

Some safety-net hospitals have seen their funding cut recently. With the affordable care act going into effect they lost a majority of their government funding. This was designed to be offset by an offset in medicare expansion. However, the Supreme Court ruled that states can opt out of this expansion. As a result many in the lower class are feeling the effects.

http://www.nytimes.com/2013/11/09/health/cuts-in-hospital-subsidies-threaten-safety-net-care.html?ref=us&_r=0

What do you think of the Supreme Court ruling? This seems to be an example of a efficiency-equity trade off. Do you think that states should exercise this new option?

Sleeping Stranger Subway Picture On Q Train Defines Empathy And Is A Lesson In Being Good

This makes you smile and feel good (I hope).

Sleeping Stranger Subway Picture On Q Train Defines Empathy And Is A Lesson In Being Good

F.D.A Ruling Would All but Eliminate Trans Fats

A few years ago the FDA required that products containing trans fat must recognize that fact on their packaging. Today they are on the verge of removing it from all food products. It has been estimated that the new ruling could prevent 20,000 heart attacks and 7,000 deaths each year.

http://www.nytimes.com/2013/11/08/health/fda-trans-fats.html?hp&_r=0

Is this the best way to limit potentially harmful substances or should it be up to the consumers to stop buying these products? How does your opinion differ about this proposal as opposed to the soda tax discussed earlier, or do you feel the same way about these two health initiatives?

American Banks and accounting rules

 Apologists for America’s largest banks say that they are smaller than their European and Asian competitors … and that they have to be big to compete.
Current Vice Chair and director of the Federal Deposit Insurance Corporation – and former 20-year President of the Federal Reserve Bank of Kansas City – Thomas Hoenig destroyed that argument earlier this month.  Specifically, Bloomberg reports:

Warning: Banks in the U.S. are bigger than they appear.
That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg.  “Derivatives, like loans, carry risk,” Hoenig said in an interview. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”
U.S. accounting rules allow banks to record a smaller portion of their derivatives than European peers and keep most mortgage-linked bonds off their books.

Enron was "legal" for the most part.  Mark to market was an accepted accounting technique and so is the one described above.

American Banks ARE NOT Smaller than their Foreign Rivals | The Big Picture

Higher Wage Is Approved in New Jersey

Voters in New Jersey recently approved a measure that will raise the minimum wage by $1 to $8.25 starting next year. 

http://www.nytimes.com/2013/11/06/nyregion/new-jersey-voters-pass-a-higher-minimum-wage.html?ref=politics&_r=0

What do you think of this? Do you think the national level should be raised as well? Or would it do more harm than good in our still troubled economy? How about here in Michigan where it has been $7.40 since 2008. 

One in Six Americans in Poverty

Thanks, Obama.

No but seriously, what do we do about this?

Company fined for oil spill in Arkansas | Processing Magazine

Colorado-based Whiting Oil and Gas Corporation has agreed to pay $58,570 to the Oil Spill Liability Trust Fund for violating the Clean Water Act after an oil spill in Arkansas in September last year, the U.S. Environmental Protection Agency (EPA) announced last week..... Any company that allows such substances to leak in quantities that are potentially harmful to public health or the environment will be treated as an offender and will be expected to pay a penalty. In this particular case, the fine will be deposited into the Oil Spill Liability Trust Fund, which is used to cover the expenses for response activities and to compensate for damages that may have occurred in result of a spill, the EPA stated.

 I wonder if the trust fund is large enough to cover a major spill?   I went to the website for the fund (see link)  I read that :
 
The OSLTF has two major components.

1. The Emergency Fund is available for Federal On-Scene Coordinators (FOSCs) to respond to discharges and for federal trustees to initiate natural resource damage assessments. The Emergency Fund is a recurring $50 million available to the President annually.
2. The remaining Principal Fund balance is used to pay claims and to fund appropriations by Congress to Federal agencies to administer the provisions of OPA and support research and development. 

From the Alaskan Dispatch:

Although we know exactly how to better reduce spill risks, we are continually told that there is not enough money available to do so, particularly with current federal budget problems. The federal government’s Oil Spill Liability Trust Fund (OSLTF), which collects 8 cents/barrel on oil nationwide, is authorized to pay for spill prevention measures, but such requests must first go through a politicized congressional appropriations process. Because of this, the Fund is virtually never used for spill prevention, and almost always just for after-spill response costs – a politically easier lift in Congress. Thus, many necessary prevention measures are either left to be paid from government general funds (e.g. us taxpayers), or are left unfunded altogether. Clearly, this is bad economics, and needs to be fixed. It is high time that industry begins to pay its spill prevention bill in full.


Company fined for oil spill in Arkansas | Processing Magazine

Risk management for whom?

Today, Ireland is under a different sort of tyranny, one imposed by the banks and the troika -- the EU, ECB and IMF. The oppressors have demanded austerity and more austerity, forcing the public to pick up the tab for bills incurred by profligate private bankers. The official unemployment rate is 13.2 percent -- up from 5 percent in 2006 -- and this figure does not take into account the mass emigration of Ireland's young people in search of better opportunities abroad. Job loss and a flood of foreclosures are leading to suicides. A raft of new taxes and charges has been sold as necessary to reduce the deficit, but they are simply a backdoor bailout of the banks.


The Bank Guarantee That Bankrupted Ireland | Ellen Brown

Putting risk management in a credible agency.....or not

There are several reasons why it wasn't until last week that a major U.S. bank was found guilty of fraud stemming from the financial crisis. The outrage-inducing first of these is that the banks have simply become "too big to jail"; the Department of Justice has been wary of prosecutions because it feared huge penalties would cause some firms to teeter back towards the edge of collapse in a sequel to 2008.
But another reason is one of resources, or rather, the lack thereof. Going toe to toe with Wall Street's legal machine requires a lot of money that federal regulators, at the moment anyway, just don't have.
 ----n a speech at Harvard University this week, CFTC Chairman Gary Gensler made similar remarks about his agency's lack of resources. "At 675 people, we are only slightly larger than we were 20 years ago. Since then though, Congress gave us the job of overseeing the $400 trillion swaps market, which is more than 10 times the market we oversaw just four years ago. Further, the futures market itself has grown fivefold since the 1990s," he said. "We need more enforcement staff to ensure this vast market actually comes into compliance and go after bad actors in the futures and swaps markets."
While the attempt to defund Obamacare via the appropriations process and then a government shutdown has garnered all the headlines, Republicans have tried a similar trick with the Dodd-Frank financial reform law of 2010, refusing to give regulators the money they need to implement it, slowing down both rule-writing and enforcement. For several years now, in fact, they've shortchanged not just the CFTC but the Securities and Exchange Commission, which also gained new responsibilities under the law.

I find it crazy that in the aftermath of the crisis we would defund the regulators while taking on so much of the risk involved in Wall Street trading.  Talk about moral hazard!!!!

Wall Street Regulators Are Facing a Budget Crisis and Congress Doesn’t Care - Pat Garofalo (usnews.com)

China Moves Toward Market-Oriented Reforms

This article discusses the ways in which China's central banker, Zhou Xiaochuan, wishes to change the country's economy as he is concerned with "the lethargic pace of economic reform."

What do you think China's leaders will decide? Will they move towards a more market-based economy? In what ways could this change impact China and/or the rest of the world?

Mishaps and deaths caused by surgical robots going underreported to FDA | PBS NewsHour

Not a best practice in government risk management:

The study, published in the Journal for Healthcare Quality earlier this year, focused on incidents involving Intuitive Surgical's da Vinci Robotic Surgical System over nearly 12 years, scrubbing through several data bases to find troubled outcomes. Researchers found 245 incidents reported to the FDA, including 71 deaths and 174 nonfatal injuries. But they also found eight cases in which reporting fell short, including five cases in which no FDA report was filed at all.  The FDA assesses and approves products based on reported device-related complications. If a medical device malfunctions, hospitals are required to report the incident to the manufacturer, which then reports it to the agency. The FDA, in turn, creates a report for its Manufacturer and User Facility Device Experience database....
Makary and his co-authors noted an earlier finding that "among the 37 percent of U.S. hospitals that describe robotic surgery on their hospital website, none mentioned any potential risks or complications.
"We rely on a haphazard reporting system that uses immature data and only the best experiences make it into the data," Makary said. "We introduce things but we don't evaluate them very well. If we're relying on the FDA about what (products) are superior, then we need a new process...you can't make conclusions on the safety profile of a device based on a shoddy reporting system."


Mishaps and deaths caused by surgical robots going underreported to FDA | PBS NewsHour

Lessons of the Obamacare Mess: Public Is Better

This article talks about the benefits of a government run health care system

We could have extended Medicare to everyone. Or if that was politically unthinkable, we could have extended Medicare a few years at a time -- first to 60 year olds, then to 55 year olds, then to the young, and so on until everyone was covered.

I've been thinking a lot lately about why and how simpler is usually better. And when it comes to providing social goods, simpler usually means public -- not "public private partnerships" (where the private partner makes the profit and government eats the loss and the thing has too many moving parts) but true public systems.

The author supports an extension of Medicare because it enjoys wider political support and is less complex than Obama care to administer. A government health care system would also eliminate the need to supervise and monitor the private vendors, therefore cutting down costs. Do you think a government run health care system would be a better alternative to Obama care? 

Government as the Ultimate Risk Manager

When it comes to insurance, it is very important to "pool" risks so that financial burdens are distributed across many people. Health insurance is a great example. Each policyholder of the insured group pays premiums that the insurance company then uses to cover the cost of those in the group who become sick or injured. While most people remain relatively healthy, large groups of people have more predictable medical expenses and the chance that actual costs exceed expected costs is minimized. 

Adverse selection, which occurs when individuals know more than their insurers about their own risk levels, is one of the primary sources of risk-related failures in the private sector. People that have terminal diseases are more likely to buy health insurance, so long as their insurers are unaware and fail to raise premiums. On the other hand, people who are healthy are less likely to purchase health insurance. This skews the insurance pool toward ever-higher levels of risk, which can distort or destroy insurance markets. 

Elisabeth and Mark Horst, artists in Albuquerque who earn $24,000 a year between them, qualified for a zero-premium plan.

In regards to adverse selection, David A. Moss states, "Compulsory insurance is especially effective because it prevents anyone - even the lowest-risk individuals - from opting out of the pool" (50). As health insurance coverage expands with the Affordable Care Act (ACA), the pool also needs to expand in order to balance out the large number of sick people who will be entering the market. This is why the individual mandate is so important.  

Do you think it is the government's role to mitigate the expenses associated with health problems? Or do you think that the private sector is adequate? What are your personal views on the individual mandate? After reading this article, which explains that many people will be obtaining free health insurance policies due to the ACA, do you still disagree with the individual mandate?

Those Depressing Germans

"This was a very bad thing for Europe, because Germany's failure to adjust magnified the cost of austerity."

What are the responsibilities for managing risk in a system with a shared currency? How is this worrisome in a more globalized economy? How can risk be managed more effectively?

Article:
http://www.nytimes.com/2013/11/04/opinion/krugman-those-depressing-germans.html?ref=opinion

Best Education In The World: USA ranks 17th, Finland and South Korea rank 1st

The article emphasizes that having a strong education has less to do with funding and more to do the with the "culture" of education. Countries with a strong education system offer teachers a higher status in society and have a culture that is very supportive of learning.This is evident in the highly ranked Asian countries, where education is highly valued and parents have grand expectations. The article says that while Finland and South Korea differ greatly in methods of teaching and learning, they hold the top spots because of a shared social belief in the importance of education and its "underlying moral purpose."

"Throwing money at education by itself rarely produces results, and individual changes to education systems, however sensible, rarely do much on their own. Education requires long-term, coherent and focussed system-wide attention to achieve improvement."

"Good teachers are essential to high-quality education. Finding and retaining them is not necessarily a question of high pay. Instead, teachers need to be treated as the valuable professionals they are, not as technicians in a huge, educational machine"

Do you think we should focus more on having a "culture" that supports education rather than funding in America?

Germany to Increase Public Spending

This article discusses Germany's austerity measures and the recent push for more public spending. What do you think Germany should do? What would the costs/benefits of increased public spending be for Germany and the rest of Europe?   

If this is risk management, whose risk is being managed?

Some things are just wrong.  Is this one of them?

How Much Did President Obama Know About the N.S.A. Eavesdropping on Angela Merkel? : The New Yorker

Learning from Detroit's Bankruptcy

America seems in a state of denial about Detroit filing for bankruptcy. Many people think Motown is such an exceptional case that it holds few lessons for other places. What was once the country’s fourth-most-populous city grew rich thanks largely to a single industry. General Motors, Ford and Chrysler once made nearly all the cars sold in America; now, thanks to competition from foreign brands built in non-union states, they sell less than half. Detroit’s population has fallen by 60% since 1950. The murder rate is 11 times the national average. The previous mayor is in prison. Shrubs, weeds and raccoons have reclaimed empty neighbourhoods. The debts racked up when Detroit was big and rich are unpayable now that it is smaller and poor.

Other states and cities should pay heed, not because they might end up like Detroit next year, but because the city is a flashing warning light on America’s fiscal dashboard. Though some of its woes are unique, a crucial one is not. Many other state and city governments across America have made impossible-to-keep promises to do with pensions and health care. Detroit shows what can happen when leaders put off reforming the public sector for too long.

Read the full article here

Do you think  we have something to learn from Detroit's bankruptcy ? Will other cities in America face similar fate ?.The article says that American cities and states should promise less or face disaster. What do you think. 

Left and Right Divide

Found this interesting graphic. Check it out if you have a chance.

Click for a full-res image.

Nuclear Waste left Unclear

Look at the interactive map that is provided in this article. According to the government's own records, many sites that used to develop nuclear weapons are other forms of atomic energy are still unclear. Does this news surprise you? What should the government's role be in this situation? For more information, read here.

Sometimes government is the only answer: Fukushima

The profit motive is strong.  But in the case of natural disasters or "unnatural" ones, the profit motive conflicts with the public good.  

Tokyo Electric is handling an estimated $112-billion cleanup of the nuclear plant wrecked by an earthquake and tsunami in 2011. At the same time it’s trying to operate as a company generating power for its 29 million customers.  The tasks are not compatible as the utility doesn’t have motivation to invest in Fukushima as it’s a lost cause compared with businesses that will make money, said CLSA Asia-Pacific Markets analyst Penn Bowers. That’s hindering the recovery by delaying technical solutions the utility deems it cannot afford.

Read more: http://www.vancouversun.com/news/Tepco+split+looms+utility+lacks+ability+deal+with+Fukushima+disaster/9109324/story.html#ixzz2jOpiDBkP