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The Economist cites the Dartmouth Atlas Project which shows differences in cost across the country for health outcomes and spending involving Medicare. It cost $5000 per person in Salem, Oregon in 2006, $8000 in San Francisco, and more than $16,000 in Miami, with outcomes for health tending to be better in places where the costs were lower. This is one of the statistics that Peter Orszag of the Congressional Budget Office uses to come up with his estimate of 30% waste in health care spending in the United States. Prof. Skinner at Dartmouth and Prof. Garber at Stanford point out that of most health systems around the world the American system is "uniquely inefficient" and wasteful. The Economist cites information that the American system is twice as costly per person for healthcare than the Swedish system, and that it costs twice as much in Minnesota as in Miami. A poll done for the Economist shows 52% of the people in the UA are dissatified with the quality of care, 40% think the system needs fundamental change, and 29% think that it should be fundamentally rebuilt. The lack of uniform coverage is also causing turmoil in the system. About 49 million are uninsured, and a quarter or more are able to buy insurance and do not buy it because it is so costly, has exclusions and coverage is inadequate. But these people also end up in the emergency rooms along with the indigent costing the whole system tens of billion of dollars for costly late interventions that could have been avoided with preventive care early on. With the economic crisis and rise in joblessness, the dire condition of state and local budgets, the situation has probably drastically worsened, and the system near breakdown. ...

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Joe Parkinson of the WSJ gives a in-depth account of the emergence of Recep Tayyip Erdogan in Turkey's politics, with contributions by Emre Peker, Ayla Albayrak, Yeliz Candemir. Erdogan grew up in a poor neighborhood of Istanbul, and became the head of a local youth branch of the Islamist National Salvation Party in 1976 after an adolescent period steeped in mosque culture and Islamic ideas. In 1994 he is elected Mayor of Istanbul amid voter discontent with corruption and problems with infrastructure and public services. He served for four years making improvements. After reciting a poem publicly that said "the mosques are our barracks, domes our helmets, minarets our bayonets and faithful our soldiers," he is jailed for 4 months by a military backed secular government in 1999. During this period Erdogan, described by friends from his youth as having a unique ability to adapt to difficult situations, makes a transformation. He moves to the centre, coming out in favor of stronger ties to the EU, and works hard to attract support from the secular and nationalist voters to add to his conservative religious base. In 2003 he is elected prime minister as head of the Justice and Development Party. This begins a period of ten years in which Turkey sees remarkable period of economic growth during which Turkey's GNP nearly quadruples from a little over $200 billion in 2002 to $794.5 billion in 2012, according to the IMF. It may be partly coincidence and partly good management of the economy under Erdogan. Turkey's previous banking and currency crises before 2003 created a better understanding and discipline for managing the economy. Emerging markets such as Brazil, India, China, Russia, Indonesia, and other parts of Asia and Latin America were able to achieve high rates of growth during this 10 year period. Competitiveness in Brazil and Turkey has not improved significantly in this period according to experts, and large capital inflows into Turkey partly supported the credit boom in Turkey. And just as growth is slowing significantly in all emerging markets, Turkey under Erdogan faces a new test. Especially now that Erdogan is seen as autocratic in his effort to suppress protests to build an Ottoman era army barracks in Taksim Square, Istanbul. The fears of secularists in Turkey are that this is the Erdogan of the period in 1999, after serving as Mayor of Istanbul. Just as Turks turned away from the overreaching actions of the military, the public sentiment may be shifting beyond the overreaching actions of the religious parties in Turkish politics. The protests in Brazil against the Rouseff administration after the popularity of the Lula administration, show that slowing economic growth and missteps by the elected government can alienate younger voters. The parties still retain a majority but face an uncertain future in which lower economic growth and missteps lead to a search for alternatives. At the same time Turkey's efforts for accession to the EU are beng put on hold as Germany opposes the actions to suppress protests of the Justice Party in Turkey. ...

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The personal saving rate of savings as a percentage of disposable income increased from 3.2% in November 2011 and 4% in May 2012, to 4.4% in June 2012. This happens as consumers reduce spending in mid 2012.

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To make custom loan modifications of the type that became necessary overnight on a large scale requires resources, investment in people and technology. On top of this a bank makes about $500 a year on a $200,000 mortgage loan, and if the loan is delinquent the bank may already have lost $2500, say experts, so there is little incentive to do much about custom loan modification. As a result, they used what a former J.P. Morgan executive called "Burger King kids." Or the banks outsourced the operation, some to law firms like David Stern, which in turn used outsourcing firms in Guam or the Philippines. The result is a largely chaotic process according to former mortgage officers of banks, and clerical staff that did not know what they were doing. Now atttorneys general in all 50 states have stated that they will investigate foreclosure practices of banks. It all started with the lone effort of Pine Tree Legal Assistance in Denmark, Maine, in succesfully challenging one of these improperly conducted foreclosures. See the NYT article on Pine Tree. In that case it was about a mother with two children who had her payment go up to $474 after loan modification, who is on food stamps after losing her job as an employment counselor....

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A report by pharmacy benefits managing company Express Scripts shows a 13% increase in the price of branded drugs in the U.S. from Sept 2011 to Sept 2012. Generic drug prices declined by 22% in this period. The report also shows that growing spending on specialty drugs for cancer, MS and other diseases is a big reason for the increase in prices of branded drugs. This report is from a random sample of six millon Express Scripts members using prescription drug coverage. Prof. Schondelmeyer of the University of Minnesota, who manages the drug benefits program at the university and conducts a similiar price report for AARP, says the potential benefits for these specialty drugs are not that good to justify the high prices.

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A Wall Street Journal report -after interviews with former TEPCO engineers and executives- throws more light on the failure of power and cooling at certain reactors in Fukushima Daiichi that led to the nuclear meltdown. The difference not grasped at the time turned out to be the critical difference between the reactors where electricity to cool the reactors worked and where the the electricity failed. Of the 10 nuclear reactors at Fukushima, only the 4 with the earlier Mark 1 design failed. These reactors were the earliest reactors installed by G.E. beginning in the 1970's. The Mark 1 reactors were serviced by an American engineering firm called Ebasco. Ebasco designed the reactor buildings really small so that they would be compact and economical. Because of the small size of the reactor buildings the generators providing the electricity supplies to the Mark 1 reactors could not be installed inside the reactor buildings made of fortified concrete and were installed in buildings outside lacking similiar protection. These outhoused generator buildings could not withstand the tsunami, resulting in the loss of power and cooling for these reactors, and leading eventually to the meltdown. The reactors with the Mark II and later designs were installed along with the generators in the same fortified concrete buildings, and these survived the tsunami without disruption in power supplies and cooling. This critical difference was noted by older TEPCO executives who were intervewed, but nothing was done about this because of the added cost of making the major modifications that would be needed. The regulatory system also failed to catch the problems with the original blueprints and design for housing the reactors and generators for cooling reactors. In 2001 the original 30 year operating permit for the Fukushima Daiichi nuclear reactor was renewed, and again in 2011 for another ten year period. Japan's Nuclear and Industrial Safety Agency is part of the industry ministry, and not kept separate and independent from the nuclear industry, a structural flaw. The ministry considered its job to be promoting nuclear power, and increasing nuclear power from 30% in 2010 to 50% of Japan's electricity output. One inspection official says fundamental design and construction of the reactors from a 30-40 year old design were never looked at in safety reviews by regulators approving the extensions. He even goes to the point of saying that the reviews focussed on things like pipes and fittings, missing entirely the safety of the outhouse buildings housing the generators. One of the top TEPCO engineers says this difference stood out like a sore thumb when did a walk through during inspections. He failed to get the support from fellow engineers and Tepco executives for changes that would add to the cost....

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Its incorrect to call a loan that has only slightly lower, same or higher monthly payment after modification, a loan modification. The intent is to make a loan affordable in monthly payments for the borrower, for it to be a meaningful modification. Says Tom Miller, the Attorney General of Iowa, "it should'nt be called modifications if people pay more or approximately the same." Many lenders and banks do not want to have to mark to market a whole set of loans of one type in one geographical region, as an accounting rule now requires, just because they have modified one loan of that type, because their reserves are severely depleted and most are already or nearly insolvent. So their way of discouraging loan modifications as a solution is to respond by saying that loans go into foreclosure even after modification, when the modification they are talking about is tacking on interest penalties and fees that accelerate the home into foreclosure in some cases, and in others by leaving payments higher or the same make foreclosure just as likely as before. Tom Miller, attorney general of Iowa, also says that " if you do real modifications, the default rate is significantly lower." Some mortgage companies say that default rates drop significantly, some to as low as 25%, when loan payments are reduced to the 30-40% of borrower income range, which is becoming the standard for a meaningful modification. Analyst Ron Dubitsky's research at Credit Suisse confirms this, showing lower payments reduced defaults to less than 50%. Research by Credit Suisse and Alan White, a law professor at Valparaiso University also show that at this time loan, 2 years into the foreclosure crisis, modification has mostly resulted in higher monthly payments. White says banks like Wells Fargo, a large servicer of loans, have done have modified few loans as apercentage of their delinquent mortgages. Sheila Bair and others have long advocated reducing loan payments to 30-40% of monthly income since early 2007, because foreclosure is costlier for banks than loan modification, but met resistance from the banks and lenders and their lobbying groups. The relevant question is that if the banks are misquided in pursuing this course, and its not in the interests of the banks or the country's economy- because accelerating foreclosures or not taking modification action in the middle of a huge wave of layoffs may result in a even bigger wave of foreclosures that threaten housing prices and effectively leave banks insolventleading to nationalization- then what purpose did all this serve except to exacerbate the crisis and increase the price tag of the government's and country's ultimate rescue of homeowners?...

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The EU's competition commissioner to crackdown on pharmaceutical companies that are delaying the entry of generics drugs with various tactics that are anticompetitive. EU has raided the offices of several marge drug companies and retrieved documents that show this activity was going on. About 5% of medical bills or 3 billion euros coud have been saved from 2000 to 2007, if companies had allowed generics to enter the market earlier and not resorted to these antitcompeitive strategies. Like paying off generics companies or having so many patents on the ingredients of the drug, in one case 1300 patents on one single drug, and then suing the generics companies to tie up the case in the courts.

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Prof. Peterson of Harvard and Hanushek of the Hoover Institution, authors with Woessmann of the book "Endangering Prosperity: A Global View of the American School," offer some startling reminders about the importance of education to economic growth and incomes in countries. Simply by raising the math standards in the U.S. to the higher standards in Canada would raise GDP by three fourths of one percentage point. One advantage that the U.S. enjoys comes from its good university systems, open markets, rule of law, tax rates, and open immigration policies, which give it about two thirds of a percentage point in higher GDP growth per year. The estimates are from the authors calculations. For the period 1960-2009, a period of rapid growth in Asian countries Korea, Taiwan, Singapore and Hong Kong, higher test scores in math and reading compared to the wrold average as measured by NAEP test and PISA, have led to 2% higher GDP growth. NAEP shows only 32% of U.S. high school students proficient in math compared to 45% in Germany and 49% in Canada and 63% in Singapore. By contrast to Korea and Taiwan, Peru, Argentina, the Philippines and S. Africa have about 2% less in GDP growth because of lower scores compared to the world average....

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The problem of information providers is linked to the problem of the recipient of the information- the common man in America. For the common man in America these are distant places with strange cultures and manners of living, remote from his everyday existence in an industrialized country. Why should the common man in America care if a small fraction of GNP and a trained military with advanced equipment will be sufficient to deal with situations in remote places. A fast growing economy between 1950- 2000 could also absorb the costs of local conflicts. The reason the common man in America should care is that the economy is expected to grow slowly, so that poor information leading to poor decisions on allocating limited and declining resources for different local conflicts- a war in Iraq costing 1 trillion dollars, and a war in Afghanistan 1 trillion dollars- can compromise future economic security, investment in America and overall defense needs. Especially when money wasted with poor decisions cannot be retrieved or put back in the Treasury, and creates future problems....

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Joe Nocera of the New York Times, says that it is the Attorney Generals of the 50 states in the USA, that have taken up the rights of homeowners, not the federal authorites. He points out that the Obama administration, the Treasury department and the federal agencies, have failed miserably in getting the banks and servicers to take loan modification seriously. It was the attorney generals of the states that were with homeowners from the beginning, to prevent predatory lending and outright fraud. Until they were stopped by federal bank regulators, who sided with the banks in court. The subprime lending crisis might never have ocurred, says Nocera, had the states not been obstructed in this way. As the subprime lending mounted, the state AG's were talking to people in their communities, and knew the reality on the ground. The Office of the Comptroller of the Currency and the Office of Thrift Supervision, two primary regulators of the banking industry, saw their role as protecting banks from consumers rather than protecting consumers. Professor Prentiss Cox, of the University of Minnesota Law School, who was an assistant attorney general in Minnesota in charge of consumer enforcement, says federal regulators should have been listening to us, instead of trying to shut us down....

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President Obama ordered the surge in 2010 for 30,000 additional troops in Afghanistan. There are now 150,000 NATO troops in Afghanistan. Of these two thirds are Americans. The goal of the surge was set by President Obama as " disrupting, dismantling, and defeating al Quaeda and its extremist allies" in Afghanistan. Yet the fact remains that official estimates on the coallition side are for only about 100 or so al Quaeda militants operating in Afghanistan. The war in Afghanistan is being fought with Taliban insurgents in Afghanistan who also live in the mountainous region that comprises Pakistan and Afghanistan, and has some form of clandestine support from sections of the Pakistani military and intelligence services- the Pakistani military having played a critical role in the formation of the Taliban from its inception to act as Pakistan's proxy in that region. With the democracy protests in the Arab world in 2011, al Quaeda does not fit into the existing mood in the Middle East and the Muslim world. Considering these facts- and the mood favoring American disengagement on the part of America's allies in the Afghan government and Pakistan's military, and the American public mood favoring disengagement, the Taliban seeing their conflict as purely domestic and little to do with al Quaeda- the situation is likely to move in the direction of phased American withdrawal. ...

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David Brooks says one of the good things about the ugly election campaign of 2016 and its depletion of moral capital, is the way people are responding to it by finding their voice for something better and uplifting. He cites Michelle Obama as one example of someone who acts not as a politician but as a mother in her behaviour and talk. He praises Hillary Clinton for adopting this Michelle tone and giving 3 answers he calls great in the final debate with Trump. The answers came on the questions about Trump and denigration of women,  on the contrast between the experience gained on a television show "Apprentice," and the experience of Clinton as senator and secretary of state. Brooks says they were given in a gradual understated manner, showing moral sentiment and a quiet contempt, similar to how a mother or parent would respond and not a politician. Another way to look at it is that the contrast was so great between her and her opponent's experience and respect for parenthood, and the campaign so long with so many people who had shown indifference when they should have known and done better, that Hillary Clinton simply stood her own ground based on her own Protestant Methodist faith and conviction.  ...

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The issue of how the deficit reduction will affect the middle class, the poor, and the elderly. Bernie Sanders says the Democrats Reid Plan and the Boehner plan both fail on this account. And he finds it incomprehensible that this is happening without similiar contributions from the higher income Americans, even though 72% of the American people- according to a July 14-17, 2011 Washington Post/ABC poll -want those earning more than $250,000 a year to pay more in taxes. And incomprehensible says Sanders that Congress is debating the Reid and Boehner plans that exempt higher income Americans from their fair share of the burden.

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Because of its size ($230 billion in sales) Toyota is Japan's largest taxpayer, largest company, showcases its engineering capabilities, and one of its largest employers. Which is why Akio Toyoda referred to returning Toyota to profitability as part of the effort for the "revitalization of Japan." Experts in Japanese universities who think the Toyota crisis offers lessons about Japan's future, see a direction away from mass manufactured products to a more service driven economy. Already the Japanese economy is down from 28% of the economy in manufacturing in 1990 to 22% in 2008.

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Mike McNamara, CEO of Flextronics, on the increasing competitiveness of U.S. manufacturing and the return of manufacturing jobs to the U.S.

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The US House of Representatives voted 245-189 in favor of repealing the health care law. Only 3 Democrats joined the entire Republican caucus in voting for repeal, compared to 34 Democrats who voted in March 2010 against the health care law. This is a largely symbolic move as the Democrat controlled Senate will not consider the repeal, and even if it did the President would veto it. Republicans favor some aspects of the health care law which allow children to be on the parent's insurance till age 26, and a ban on insurers denying coverage due to pre-existing conditions. Opinion polls show 46% of respondents opposed repealing and eliminating the law, and 45% favored repealing it. The health care issue ranks third among the economic issues important to respondents, behind unemployment and reducing the federal budget deficit.

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How the Delta Pan Am merger is still a mess at JFK Terminal. Not a good sign for future mergers. Describes the results of prior mergers and shows a rather mixed record at best. Cites difficulties such as meshing computer reservation systems and facilities. Of major importance is the pride in their work and energy of the people involved, and how it be best tapped into, considering the experience of Continental and Gordon Bethune. America West's Doug Parker is trying to do this at US Airways, and Brazilian airline TAM is working with Varig assets.