At this post (”No Sugar-Coating, Please: Medicare Part D Is Off to a Poor Start”), on the snafus occurring in the rollout of the Medicare Part D prescription drug program, I noted that:

The larger point is that it should not have happened, and that the administration is close to handing its opponents a potent political weapon. Ideally, everyone should shut up on the bigger issues for just a few weeks and concentrate all of their heat on getting those involved to get their act together, and quickly. But in the real world this won’t happen, and the adminstration had to know that anything less than a smooth transition would bring out the worst in some people and politicians.

Six weeks later, the snafus apparently haven’t stopped:

Problems cited include:

• Insurers requiring “prior authorization” on some drugs, including those to treat depression, psychosis and convulsions — even for patients who have long taken the drugs.

• Strict dosage or quantity limits on some drugs, sometimes well below what a patient takes.

• Long delays on calls to insurers to make requests. Then delays of days in getting a response.

….. Of nearly 600 problems reported to the association, the biggest chunk — about 44% — involved getting patients medications they have been taking. Many also resulted from problems getting prior authorization or from limits on how many pills are allowed.

And the potential for political fallout is now real (though if you read the whole article, it’s clear that Robert Tanner, the AP reporter, is clearly rooting for more trouble than currently exists):

The Medicare program left several governors shaking their heads, though they said efforts to improve it were helping. “Probably the design of the plan could’ve been better,” said Republican Don Carcieri of Rhode Island. Bush has called for steps to limit the confusion. Still, Carcieri was sure voters would forgive …..”

Is the worst over? Let’s hope so, for the sake of patients. If it goes away as an election issue, so much the better.

What was once considered, and actually was, a beautiful thing not that long ago has turned pretty ugly. Johnny Munkhammer at TCS Daily has the details, in which he describes “the Swedish Model” as consisting of three parts, two good and one awful — so awful that it has offset the good parts. Some of the stats here will stun you:

There are two good Swedens to learn from: One is the hugely successful country that literally went from rags to riches between 1890 and 1950, with one of the highest growth rates in the world. This was not least thanks to a tax pressure (tax rates–Ed.) between 10 and 20 percent of GDP, a truly limited state, with open borders and very good conditions for entrepreneurs.

Or there is the Sweden that started reforming in the 1990s. Marginal tax rates were cut, markets were deregulated, the Central Bank was made independent, public pensions were cut substantially and some free competition was allowed in health care. School vouchers were introduced — still even controversial in the US — and markets were deregulated, the prime example being telecom, opening up for the development of Ericsson and a something like 75 percent decrease in the price for phone calls. This led to a higher growth and increased prosperity for several years around the Millennium shift.

But there is also another Sweden, a country that one can learn much from, but should definitely not imitate. It is the country that introduced an extreme version of the European Social Model of a big state. The tax pressure was raised from 20 percent in 1950 to some 50 percent in 1980. The state monopolized welfare services and social security. The labor market was highly regulated.

The Swedish experience from walking this path is that it is a dead-end. It is even counter-productive. And when it comes to this model, the big state, Sweden has not reformed. The tax pressure is still the highest in Europe. Ever since the taxes reached this level, growth has been declining. If Sweden were a state in the US, it would be the fifth poorest. During the past 15 years, average annual growth has been 1.4 percent — lower than the average for the US, the OECD and the EU.

Employment has been developing very poorly. There are nine million people in Sweden, and some 1.5 million people of working age don’t go to a job. The unofficial total unemployment is some 20 percent.

….. Thus, many people are dependent on the state. Early retirement, sick leave, unemployment, temporary labor-market programs — there are many categories. Employment is decreasing and dependency on the state is rising. About 60 percent of the adult population is to some extent dependent on the state.

And indeed, those welfare services that were said to benefit from public monopolies and a big state are deteriorating. Despite an increase of almost 70 percent in spending since 1979, Sweden’s public health-care system is coming apart at the seams. The Swedish Association of Local Authorities and Regions reports that doctors see an average of four patients a day, down from nine in 1975. The number of hospital beds is down by 80 percent since 1975. More than 50 percent of patients have to wait over 12 weeks for an examination and then at least 12 more weeks for treatment. Public schools and public elderly care also experience great problems.

These are all natural results from this so-called social model. The big state stands in the way of prosperity and better living standards. In this regard, other countries — in the EU or anywhere in the world — should not copy Sweden.

This great table, which I would suggest bookmarking, shows per capita Gross Domestic Product (GDP) for the US and 14 other countries, both in dollars and as a percentage of the US amount, from 1960 to 2003. You can see from the table that Munkhammer’s Swedish story above plays out:

• From 1960 to 1970, Sweden’s per-capita GDP grew almost 50% and went from about 80% of the US figure to almost 88%, and peaking at a bit over 90% in 1975.
• After that, it’s basically been downhill, and by 2003 Sweden’s per-capita GDP was only 78% of the US.
• In the meantime, look at the countries that have passed Sweden or moved to near-parity. In 1970, Sweden’s GDP was second only to the US. Go to 2003, and you’ll see that it has since been fallen behind Canada, Austria, Denmark, and Norway (big-time). Countries that were well behind Sweden but that are now nipping at its heels include Japan, Belgium, The Netherlands, and the UK.

The expansive welfare state has its consequences, and they are predominantly negative.

Martin Wolf, in a Financial Times piece yesterday (HT the on-hiatus EU Rota) expands the analysis to current conditions in Western Europe:

The time has come for Europeans to ask themselves the unthinkable: can their vaunted social model endure? It is a question I have wished to avoid. But it is irresponsible to persist in doing so. Something is rotten in the state of western Europe. The continent retains valuable assets from the past. But these are showing symptoms of decay. The underlying cause seems increasingly evident: the hypertrophy of the state.

The tone gets harsher from there, and justifiably so, and includes this priceless chart:

To find which countries are relatively prosperous and which ones are not, simply move up the chart.

Quarterly Home Prices Report — Appreciation kept chugging along at double-digit rates, as the PDF from the Office of Federal Housing Oversight and the graphic below extracted from that report indicate:

Others, from this AP report:

The Commerce Department reported Wednesday that personal spending shot up by 0.9 percent, the strongest gain in six months, while incomes rose by a solid 0.7 percent.

But in a separate report, the department said that construction spending rose by a tiny 0.2 percent in January, the weakest gain in seven months and far below the 1 percent increase Wall Street had been expecting.

The Institute for Supply Management said its closely followed index of manufacturing activity stood at 56.7 in February. That was a better-than-expected improvement from a January reading of 54.8 and signaled that manufacturing should contribute to economic growth in the first quarter.

For all of 2005, the savings rate registered a negative 0.4 percent, the first time the savings rate has been in negative territory for an entire year since the Depression years of 1932 and 1933.

All in all, not a bad mix, except for that pesky (non-)savings rate.

The negative savings rate, which does take into account retirement savings in 401(k)s and IRAs (discussed and confirmed in the comments at this previous post — especially see my Comment #4), means that the country collectively is engaging in significantly negative savings in the rest of its personal finances. At the individual and family level, this is “semi”-defensible if, as a homeowner, you believe that house-price appreciation (which is NOT considered in the savings rate) and other forms investment (stocks, etc., which are also NOT considered in the savings rate) will roll along at high rates. But if you believe that, you need to recognize that you’re taking a very big risk that steady economic growth will continue. In some overheated metro area housing markets, even steady economic growth might not be enough to prevent a decline in home values and a corresponding decline in the ability to borrow.

Free Links:

• Hmm. It’s “interesting” how someone at a foreign-based transplant car company was the first to come up with this marvelous idea for helping returning soldiers (HT S.O.B. Alliance member MilTracker).
• Canada’s Decaying Health System Slowly Getting a Private Boost (HT S.O.B. Alliance member Ohio Guy) — Recall that back in June, the Canadian Supreme Court declared that the country’s national health system monopoly “is not constitutional where the public system fails to deliver reasonable services,”, and that private insurance and private clinics would be legal in cases where that is true. Since waiting periods for various procedures range from 6 months to even 2 or 3 years throughout most of the country, the system is by (my) definition not delivering reasonable services in most of the country. So its good to see (quote is from a blog entry that references this NY Times piece, which will become unavailable shortly) that “Private clinics are opening around the country by an estimated one a week, and private insurance companies are about to find a gold mine.” Let’s hope so, for the health and longevity of our neighbors to the north.
• UPS is hiring 1,500 part-timers with full health benefits in Louisville. Apple just bought a $450 million state-of-the-art data center in New Jersey that had been mothballed by MCI, and presumably will need more than a few people to operate it. ADP, the payroll processing king (yes, I know they do a lot of other stuff), is bringing 1,000 new jobs to El Paso, Texas. These are just a few events worth noting to partially offset the constant drumbeat of layoff news, even while the number of jobs in the economy continues to increase month after month.
• I’ve regretted hitting the “Send” button before, but this is a doozy (HT Techdirt):
  

  Edward Tom, director of admissions at the University of California, Berkeley, law school, was training a new office worker last week when it happened.

  Tom was demonstrating the e-mail software used by the school and was highlighting several features, including how the user can filter mail and set it to send messages to one recipient or many at the same time.

  That’s when he chose what happened to be a standard congratulatory message on being admitted to the university’s prestigious law school and accidentally sent it to all 7,000 students who have applied for admission to the law school. The problem, which the school quickly admitted, is that all of the applicants won’t be admitted. In fact, there’s only room for 800 to 850 of them. The e-mail congratulated the applicants on their recent “admission” to the school and invited them to an annual reception co-hosted by alumni and several student organizations.

  He sent out an apology e-mail 20 minutes later and a formal apology letter in the mail the next day.

  A similar incident occurred 3 years ago at Cornell when 550 undergrads were falsely informed that they had been accepted.

• I Don’t See Why This Is So Controversial — “While some people are being sent to jail for using open WiFi connections, an ethicist for the NY Times Syndicate is saying there’s nothing ethically wrong with piggybacking on an open WiFi connection, assuming you’re not sucking up all the bandwidth. His point is that it’s the responsibility of whoever owns the WiFi access point to secure it, if they don’t want it used. He also points out that if you find an open connection, you should try to figure out who owns it to let them know it’s open — in case they want to cut it off.” To be stealing you either have to cause the other person some kind of financial loss, be taking something away from somebody that they should be able to use, or at be least making things inconvenient for them. If you are doing none of those things, you may be freeloading, but you’re not stealing. Additionally, as the item points out, if those radio waves from somewhere else (say, the neighbor next door) migrate onto property that you own, the argument that your piggybacking would somehow be wrong is even weaker. Counterarguments are welcome.

From planning a funeral to planning for a fifth birthday party:

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