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2017-07-19 07:00 by Karl Denninger
in Employment , 213 references
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Make no mistake folks.  It's coming.

You have people who call it the "Amazon effect."  They liken it to when Ford started with cars, and suddenly buggies didn't make much sense, nor did horses.  Farriers went from common to near-extinct.  Oh sure, there were a few left, because some people owned horses for racing, or recreation.  But transportation?  That ended fast and so did a lot of jobs.

But when those jobs ended Henry Ford was there with an open factory door and hired all of them -- and then General Motors showed up and hired even more people.  Oh, and the cost of a car was less than the fully-loaded cost of a horse over time, never mind being faster and eliminating the literal tons of horse**** and******that the horses deposited daily all over city streets.

This is different.

I call it the monopoly effect, because it is.

Oh, and it's supposed to be illegal -- all of it.

But when you refuse to enforce anti-monopoly laws against health care providers, why would you enforce them against a big fat retailer?

You wouldn't of course and thus you don't.

This all sounds good, right?  Who doesn't like "lower prices"?

Well, among other things, all the people who get fired and now have nothing to buy with, lower prices or not.

Second, what makes you think actually lower prices result from this sort of behavior?  There's already plenty of evidence that you actually don't pay less in many cases and in fact you're likely to pay more, because your options decrease.  Simple economics tell us that with fewer choices you have less competitive pressure and prices go up, not down.

But back to the employment facts

There are nearly 16 million people employed in retail trade today -- and that's only the direct employment.  Then you have the people who keep the malls and buildings maintained, cleaned and otherwise open, along with the transportation that feeds all those locations both for the goods and for you to get there to shop.  Of course not all of this goes away when 10 stores close and Spamazon gets the business since they have warehouses and transport needs too, but their needs are far more concentrated and employ far fewer people -- like 1/5th or less than the retailers did both directly and indirectly.

Further, these are jobs that, while not particularly well-paying, do provide a means of subsistence -- and not just to those without college degrees either.  How many people working in those stores have a degree but can't find a job in-field?  Plenty.

Then there are the professional services.  Payroll, accounting, legal, architectural and other design, waste hauling, administrative.

What are we talking about here -- maybe 20% of the workforce finding itself out of work within the next handful of years if Spamazon and its friends are allowed to continue on their present path?

What do you intend to do with those people?

I have no idea, but this I do know: Monopolies don't lower prices overall, although they all argue they will through "economies of scale."  They put people out of work and screw those who remain, because they can -- on both the supply side and the demand side.  In other words prices go up instead of down, choice goes down instead of up, people lose jobs instead of gaining them and the suppliers to said business get screwed as well which radically increases the economic damage net-net across the economy.

Over 100 years ago Congress passed laws to make this sort of crap illegal for that very reason.  Those are good laws, not bad ones.  Yet today we simply don't care any more -- not in health care and not with Spamazon either.

Maybe the market is wrong on the "forward expectations" for Spamazon.  In fact, I bet it is, at least with regards to Whole Paycheck for reasons I've pointed out before.  Not only is food -- especially fresh food -- not like any sort of other packaged goods, but in addition the cultural differences between the workforces at both firms are so stark that you have to believe Bezos either thinks he can steamroller the people who work there or he had such a raging hard-on for the deal that he didn't even take a cursory look at the depth of the problems he will face trying to mold Whole Foods' employees into Spamazon's model of what a "good employee" is.  For starters there's the fact that Spamazon drug tests everyone who wants to work there while Whole Foods doesn't.  Care to take a wager on what percentage of their employees in, say, Colorado are burning a doobie on a regular basis?

Given how Wall Street has treated Beelzebub, er, Bezos over the last decade and more I suspect it's the second -- but whichever it is, he's in for a hell of a surprise on both the supply and employment sides of the ledger with this one.

You can take that to the bank -- if you still have a job.

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2017-07-18 11:13 by Karl Denninger
in Editorial , 811 references
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The Senate's GOP-written theft en-masse bill (allegedly to "repeal and replace" Obamacare) is dead.  There are now enough committed no votes to doom it, and it's been essentially abandoned.

The latest is a claim that we will instead see a clean "repeal" of Obamacare.

America, wake up.


This is the time when you must do so.  When you must make damn sure your Representative and Senators understand that they will be fired or even worse if they don't cut the crap now on the health care system in this nation.

What does cut the crap mean?

First, put an immediate stop to medical insurance extortion and Racketeering.  The act of threatening you with a charge 10x or even greater than an "insurance company" would pay (and thus you would pay by transference since you pay for said insurance) if you have no insurance meets the clear definition of extortion (threatening you with financial ruin if you do not take an action said provider wishes you to take) and since both the providers and insurance companies do so in concert it certainly appears to meet the definition of Racketeering under Federal Law.

This can be stopped with a one sentence bill which I have written on here.

Second, take up a bill to mandate price transparency.  There already is one in the House; that'll do as it's simple, direct and I'd love to see someone argue against it.

Third, take up the rest of my recommendations, or those substantially identical to them.  In short mandate level pricing for everyone, ban blanket consents or any "consent" that does not have a price attached, ban the charging of events caused by a provider to the customer (if I drop my ladder while working on your roof and smash your picture window, I can't bill you for the window!), bar as a matter of law charging "in extremis" patients unconscionable prices (to which you can't consent) and finally, replace Medicaid with a system that bills back to the Treasury in the customer's name for all citizens that are unable to pay.

That latter bill would literally drop medical costs by at least 80% almost overnight.  It would resolve Federal and State budget deficits, end the bankruptcy of states and cities and render moot the need for other than catastrophic health insurance in the first place.  

It would do all of that without costing one single citizen access to health care because if you could not pay you could still access the care and Treasury would get billed, effectively creating a tax debt in your name.  That billed amount would be limited to reasonable charges in exactly the same amount that everyone else paid -- not the 10 or 100x charge that is frequently billed now if you're uninsured.

For those who can't pay now and never can in the future this is effectively Medicaid as we have now, but it's available to any citizen who is temporarily or permanently without funds.  It accrues interest just as does a tax debt, and while that's a fair bit of money it's less than private debt collectors or financing such via something like a credit card.  If you die without sufficient assets to pay then the Treasury (that is, the taxpayer) winds up eating it but that in fact is less of a burden than we have today where the taxpayer eats it immediately and permanently instead of down the road only if you remain insolvent through your life.

It also instantly ends medically-driven bankruptcies for American citizens -- forever.

It saves a crazy amount of money in the budget, easily $250 billion annually in the first years and over the first five that amount will grow dramatically to the point that the budget will balance even with no other changes made to spending by 2020, and be in permanent surplus thereafter -- again, assuming Congress doesn't increase other appropriations or decrease taxes (both of which it will probably do.)

We can do this now

We must do this now.  If we do not the Federal budget is doomed within five years and the States will follow.

But whether we will, or do, resolve this issue depends entirely and only on whether you, as a citizen, demand that it happen and enforce that demand through whatever becomes necessary to do so to the exclusion of other political demands.

BTW, to President Trump: If you cannot get the House and Senate to pass the above then direct Jeff Sessions to start indicting medical industry firms and individuals for violations of 15 USC Chapter 1.  That's a path the executive alone can take and there's not crap the Congress can do to stop you.  If you're looking for a way to drain the swamp alone without Congressional assistance or acceptance -- there it is.

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2017-07-18 07:00 by Karl Denninger
in Personal Health , 186 references
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Artificial sweeteners are bad for you! screams the headline in various places, all with a cite to this journal piece.

RESULTS: From 11 774 citations, we included 7  trials (1003 participants; median follow-up 6  mo) and 30 cohort studies (405 907 participants; median follow-up 10  yr). In the included RCTs, nonnutritive sweeteners had no significant effect on BMI (mean difference –0.37  kg/m2; 95%  confidence interval [CI] –1.10 to 0.36; I 2  9%; 242  participants).

In the included cohort studies, consumption of nonnutritive sweeteners was associated with a modest increase in BMI (mean correlation 0.05, 95% CI 0.03 to 0.06; I 20%; 21 256 participants). Data from RCTs showed no consistent effects of nonnutritive sweeteners on other measures of body composition and reported no further secondary outcomes. In the cohort studies, consumption of nonnutritive sweeteners was associated with increases in weight and waist circumference, and higher incidence of obesity, hypertension, metabolic syndrome, type  2 diabetes and cardiovascular events. Publication bias was indicated for studies with diabetes as an outcome.

That sounds outright bad.

Go read the entire paper.

You'll notice something striking: There is not one reference anywhere to any sort of control for total carbohydrate intake or even mention of it.

This is very important for a simple reason: You study these sorts of groups because you're trying to intervene in weight control by substituting sugar, usually in drinks, with non-sugar substitutes.

Ok, so what else did you tell the people in the study, either then or in related conversations?

You know damn well what the "standard advice" is: Cut (especially saturated) fat intake for weight control.

This is a problem because, as you know if you've read my column there are exactly three foods -- carbohydrates, proteins and fats.

If you remove fats you must increase something else to remain steady in calorie count.  That something can only be carbohydrates or proteins.

Proteins are expensive and typically need to be prepared (not exclusively, but mostly.)  Cheap, fast carbs are easy, shelf-stable and can be grabbed at a moment's notice but all of them are damn near perfect analogues to sugar once you eat them.

In other words they turn into sugar as soon as they go down the pie hole.  Thus if you replaced fats with fast carbs you are quite-likely to have added more net glycemic load to your system than you removed by substituting artificial sweeteners.  In other words you made the problem worse instead of better!

What's equally bad and maybe worse is that if you substitute vegetable oils for saturated (animal) fats you are dramatically shifting your Omega 3:6 balance the wrong way which is both directly insulin response suppressive and pro-inflammatory at the same time.

If you're crazy enough to have done both then you're really screwed.

So unless you control for both of these factors, which I see no mention of the studies in question having done and there was no attempt to quantify or qualify for this in the published work it does not surprise me one bit that only "substituting artificial sweeteners for sugar" either does nothing net-net or in fact makes the problem worse.

That doesn't make artificial sweeteners bad.

All the other crap which you are constantly hammered on if you're overweight and told to eat is what's bad!

Now if you can find me a study that leaves the participants diets alone except for substituting artificial sweeteners for sugar in, say, drinks on a provable basis and then checks directly for insulin resistance changes I'm interested.  This of course would be truly surprising as an outcome because if you substitute two cans of sugared Coke a day for Diet Coke and make no other changes in what you eat or drink you're 300 calories net negative a day which is enough to lose half a pound a week.

That study would be extremely hard to do and you'd probably have to recruit all people of normal weight who otherwise have no reason to modify their diets because if you include overweight or obese individuals managing to evade the confounding factor of carbohydrate and vegetable oil substitution is nearly impossible and outside of a sealed, locked-down prison controlling what people actually eat .vs. what they report -- that is, getting truthful data in this regard -- is flatly impossible.

I know plenty of people who claim to eat like a bird; what they claim to eat is trivially tallied to well under 1,200 kcal/day, which is pretty-much the minimum metabolic requirement for an adult (perhaps 100 less for a woman.) 

Virtually to an individual they are all visibly overweight and I've yet to see one of said people lose a material amount of body mass over a sizable period of time.  It is flatly impossible that their self-reported eating habits are factual; a whole bunch (like 1,000+!) kcal/day are coming from somewhere or they'd be dropping 2-3lbs/week every week until they literally died, so they're obviously consuming something other than what they claim when I'm not around them.

That's a fact folks.

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2017-07-17 08:41 by Karl Denninger
in Editorial , 291 references
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Folks, brain surgery is not routine.  Ever.

Further, you do not discover a blood clot in the brain during a routine physical.  In fact a so-called "routine physical" in today's world catches damn near nothing -- ever -- simply by design, since you usually spend less than 5 minutes with an actual physician.  Granted, a Senator doesn't get "your" physical, he probably gets an hour with an actual physician.  But the point here, in addition to the vast difference between "you" and "Senators", is that there is no instrument that a doctor has in his office that is diagnostic for a clot on the brain.  Generally you find them on a CT (or similar), which is never done routinely because (1) it is relatively expensive and (2) it involves ionizing radiation exposure, which is never appropriate without a damn good reason.

A 2 centimeter "clot" is of course inadequate to describe what was found, since it only speaks to one dimension and such a thing occurs in three dimensions.  Second, a clot occurs after bleeding does, which leads to the next question: What caused it?

Third, where was the clot?  Was it inside the brain or around the brain?  Yes, it matters, but only in terms of degree -- it's not a routine or minor event in any case.

That the press refused to push on this originally is outrageous, but hardly surprising.  We no longer have a Press that actually investigates anything.  They don't even bother calling someone who ought to know and asking them questions; they simply parrot whatever they're giving and call that "reporting."

Folks, that's not reporting -- it's simply amplification.

Reporting requires work, and we're not seeing any of it -- at all -- from any of the so-called "press."  They simply amplify whatever someone feeds them, and choose the sources of said "feeds" to suit favored constituencies.

That sucks, but it is what it is.

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2017-07-17 07:00 by Karl Denninger
in Corruption , 331 references
[Comments enabled]  

This makes me vomit -- literally.

A breakthrough cancer therapy that can wipe out leukemia in some deathly ill children and young adults comes with an expensive, long-lasting side effect.

The blood cancer treatment, called CAR-T, is made by Novartis AG and is on the brink of approval after a panel of advisers to the U.S. Food and Drug Administration backed it Wednesday in a 10-0 vote. It’s highly effective: In a clinical trial of patients who’d mostly run out of treatment options, 83 percent of patients who took it saw their disease go into remission.

breakthrough?  It sure is -- for Novartis.

You see, it works by killing off the B cells that, in their deranged state, cause the leukemia.  No deranged cells, no leukemia.  A win, right?

Not really.  Those same cells are responsible for the majority of the immune system's ability to respond, which means that killing them also destroys most of the body's immune system capacity at the same time and, what's worse, in order for the cancer to remain in remission the damage has to remain too -- that is, it's permanent.

The fix for that is a custom-designed therapy for each person so-affected that can cost $10,000 per dose.  Oh, and since the condition the "therapy" caused is permanent you need that custom-designed therapy for the rest of your life, meaning that the lifetime cost is going to easily be in the hundreds of thousands of dollars and may reach well into the millions.

This "breakthrough" has all the markers for a massive extraction racket.  Kids are cute, and kids with cancer are unassailable lest you be called a monster.  The therapy does appear to work, but it works by destroying an essential part of the body's immune system which then has to be replaced or the person dies of some other disease that would not be serious for a not-compromised person at all.   In other words a cold or the flu would kill such a person without said continuing lifetime treatment.

Folks, just because we can do a thing does not mean we should do it.  "Conquering" leukemia by killing off the part of the body's immune system that has gone insane and caused the disease in the first place is only sane as a treatment modality if what you kill off via the treatment isn't necessary.

Sadly the part of the body's systems you kill off in this instance is necessary, and while we can attempt to "replace" it via technology the cost of doing so is hideous and impossible to consider as a matter of routine.  Yet here we are, with the FDA likely to "approve" this "therapy" and in doing so it will set in motion a monstrous extraction machine that will force the people of this country to pay for every single sick kid that gets this therapy for the rest of their life.

This crap has to stop.  It is part and parcel of why our medical system is destroying the country and that pharmaceutical companies are searching for and testing so-called "therapies" that come with universally hideous and outrageously-expensive "side effects" which then inures back to the benefit of said pharmaceutical companies is an outrage that must not be allowed to stand -- cute kids notwithstanding.

Go ahead and call me a monster -- I'm used to it.  I take the moniker with full knowledge that by being said monster I prevent the destruction of the entire nation's finances, and thus on balance it's worth the name-calling that I'm sure will ensue.

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