I haven't been following this vote-by-vote, but I was surprised to see Kucinich vote "no" on health reform last night. Obviously he wanted single-payer, but I'm nevertheless taken aback to see him vote with the Republicans. Here's part of his statement on why he voted no.

Clearly, the insurance companies are the problem, not the solution. They are driving up the cost of health care. Because their massive bureaucracy avoids paying bills so effectively, they force hospitals and doctors to hire their own bureaucracy to fight the insurance companies to avoid getting stuck with an unfair share of the bills. The result is that since 1970, the number of physicians has increased by less than 200% while the number of administrators has increased by 3000%. It is no wonder that 31 cents of every health care dollar goes to administrative costs, not toward providing care. Even those with insurance are at risk. The single biggest cause of bankruptcies in the U.S. is health insurance policies that do not cover you when you get sick.

Posted by Jay Hancock at 10:13 AM | Permalink | Comments (6)
Categories: Health Care
        

The spam commenters are getting better. Evidently there's a fake-comment generator that picks up on repeated words in a post, such as this one on Thursday's announcement of the third-quarter productivity rate. It almost had me.

Hello You have very well said about productivity and I completely agree with your perspective.Thank you very much for giving such a good information to us.

(Or maybe it was just my Mom posting again.)

Posted by Jay Hancock at 11:12 AM | Permalink | Comments (0)
        

Paul Krugman issues the clarion call:

For this is the moment of truth. The political environment is as favorable for [health care] reform as it's likely to get. The legislation on the table isn't perfect, but it's as good as anyone could reasonably have expected. History is about to be made – and everyone has to decide which side they're on.

And Frank Kratovil forgot to pick up:

WASHINGTON - If Democratic leaders manage to push a massive health care overhaul through the House of Representatives this weekend, they'll have to do it without one of Maryland's Democratic congressmen.

Freshman Rep. Frank Kratovil, facing one of the toughest re-election fights in the country next year, announced Friday that he opposes the measure. His stance could complicate efforts by Democratic leaders to secure approval of the legislation this weekend.

Posted by Jay Hancock at 12:37 PM | Permalink | Comments (7)
Categories: Health Care
        

From the email inbox:

Constellation Energy and EDF Group Complete Nuclear Joint Venture

BALTIMORE and PARIS – Nov. 6, 2009 – Constellation Energy (NYSE:CEG) and EDF Development Inc. (a wholly-owned subsidiary of EDF S.A.) today announced that EDF has completed its investment in Constellation Energy Nuclear Group, LLC, which is structured as a new joint venture. With the close of the transaction, the companies look forward to working together to deliver the expected economic, environmental and clean energy benefits created by the joint venture.

Posted by Jay Hancock at 11:57 AM | Permalink | Comments (0)
Categories: BGE/electricity
        

I'll be on WYPR at 1 p.m. today to for the kickoff of Weekly News Review with Karen Hosler. We'll talk about the Constellation/EDF settlement, the Black & Decker sale, the elections, gay marriage & more.

Here's today's squib from WBAL, Bill Vanko and me talking about EDF/Constellation.

Posted by Jay Hancock at 11:25 AM | Permalink | Comments (0)
        

The biggest economic news this week isn't that the unemployment rate rose from 9.8 percent to 10.2 percent in October, or that the economy lost another 190,000 jobs, according to the Labor Department. It's that labor productivity for the third quarter rose at an eye-popping 9.5 percent annual rate, according to another report.

Of course both reports paint different parts of the same picture, but the productivity figures are remarkable for what they say about the divergence of hiring and economic output. The government previously reported that GDP rose at a healthy clip in the third quarter. The productivity figures show that was accomplished with even fewer workers than economists had expected. We're making more stuff with A LOT fewer workers, and that's contributing to the high unemployment rate and continuing job losses.

In the long run productivity growth is great. When workers can produce more per hour of labor, their incomes rise, corporate profits rise, standards of living rise etc. Productivity growth kills inflation. Technology-enabled productivity growth essentially explains why Americans are rich and cavemen were poor. A hundred cavemen working for one hour could catch a bison, if they were lucky. A hundred Americans working for an hour can produce a Toyota. (I'm simplifying here and leaving out non-labor inputs like investment and natural resources, but you get the idea.)

But in recent decades corporate profits have grabbed a huge share of the gains from greater productivity, at the expense of workers. In theory profits from productivity growth are supposed to be shared with a company's work force or redeployed in other areas of the economy to employ displaced workers. But it's not happening so far in this recession.

Brad DeLong was shocked at the 3rd quarter productivity numbers and explains why what's going is prompting a rethinking of conventional wisdom.

Continue reading "We're making more stuff with many fewer workers " »

Posted by Jay Hancock at 9:41 AM | Permalink | Comments (7)
Categories: The Great Recession
        

Tyler Cowen did TEDx MidAtlantic in Baltimore yesterday. You can hear the talks online, although I haven't gotten to them yet. He says there's a TED halo effect and the non-high-status speakers benefit from speaking into the same mic as the stars, even if their material might not be first-rate.

One thing I learned from this experience is that if you follow professional entertainers, the "status rub-off" effect dominates the "suffer by comparison" effect. The audience is primed to be sympathetic to you and many of them do not actually know which of the speakers are truly the high status people.

Of course Cowen, New York Times columnist, author, professor and the best economics blogger, was one of the biggest stars there. Sorry I missed it.

Posted by Jay Hancock at 8:24 AM | Permalink | Comments (1)
        

The New York Times gets it right on extending and expanding the homebuyer tax credits, which will probably cost the country another $15 billion.

If Congress wants to spend the taxpayers’ money to do something about the struggling housing market — and it should — it should invest the money where it is most needed, in better programs that help people avoid foreclosure and stay in their homes.

Posted by Jay Hancock at 8:09 AM | Permalink | Comments (0)
Categories: The Great Recession
        

Today's column is about where the Maryland/Baltimore economy goes from here now that Black & Decker is getting bought by Stanley Works and its corporate headquarters will disappear in Towson. I would have written a different headline. Editors wrote: "Losing Black & Decker a bad sign for Md. business." Black & Decker's departure doesn't say much if anything about the state business climate. It was a business deal pure and simple and would have turned out this way no matter what the tax/regulatory/labor complexion of Maryland was.

Dan Rodricks wrote about the campaign by Black & Decker a few years ago to change Maryland's apportionment formula for the income tax. That sure didn't keep B&D happy. CEO Nolan Archibald closed their plant in Easton and now he's sold the company to Stanley.

The column concludes: "The fact that Black & Decker didn't bolt because of Maryland's business climate doesn't mean it doesn't matter. What do we do when the federal money dries up?"

Read the whole thing here.

Posted by Jay Hancock at 8:05 AM | Permalink | Comments (0)
        

Former real estate agent Sen. Johnny Isakson is helping out his Realtor pals by getting Congress to pass another round of homebuyer tax credits. Looks like the $8,000 credit, which was supposed to expire at the end of November, will be extended to April 30. It looks like it'll also be granted to families with higher incomes than before and offered at a lower level ($6,500) to "move-up" buyers, as long as they have lived in their present homes for five years. (The first one was for first-time buyers only.)

But this is really truly the last housing giveaway, Isakson says. And this time he means it!

"Tax credits like this only work by creating the sense of urgency to take advantage of them. This is the last extension of the home buyer tax credit, and I urge all Americans whether they're first-time buyers who've always dreamed of having a home of their own or someone who's been gridlocked in the failure of our move-up market to take advantage of this opportunity."

Where's Supernanny when you need her to intervene and stop this ineffective parenting?

Posted by Jay Hancock at 10:57 AM | Permalink | Comments (2)
Categories: The Great Recession
        

If you haven't switched to an alternative electricity supplier yet, Dominion Retail is offering a good deal to BGE customers. At 10.37 cents per kilowatt-hour for electric supply and cross-country transmission (delivery by BGE is another 2.37 cents), Dominion has the lowest price most BGE customers have seen in a while. The price locks in from now through 2010, and there is no cancellation penalty. A typical house ought to save $10 or more a month.

(Attention: If you switch to Dominion you WON'T lose the $100 BGE credit just obtained by the Public Service Commission as a result of a venture by Constellation Energy, the utility's parent. The credit is applied through your BGE delivery account, which doesn't change no matter who your electricity vendor is. So you can basically double the O'Malley/PSC credit by switching to Dominion.)

UPDATE: Switching to Dominion, WGES or any other competitive supplier does not affect the Peak Rewards you get from BGE cycling off your AC in the summer, either.

In comparing its price to BGE's price, Dominion's marketing department seems a little messed up. They claim 10.37 cents is 12 percent less than BGE's "price to compare" of 11.97 cents. Actually it's 13 percent less. But at this point on the calendar, BGE's price to compare is misleading. That's because 11.97 cents is a blended price to compare for the 12 months starting June 1 -- a period that includes both BGE's high summer rates and lower non-summer rates. But summer is over, so a better point of comparison should be BGE's non-summer price that started Oct. 1 and goes through May 31 -- 11.527 cents.

Got that? No? Don't worry. Dominion's price is still 10 percent less than what BGE's standard price will 

Continue reading "Dominion Retail undercuts BGE's standard price" »

Posted by Jay Hancock at 7:16 AM | Permalink | Comments (22)
Categories: BGE/electricity
        

Early this year Erickson Retirement Communities laid off 260 people, many from its corporate headquarters in Catonsville. Now I'm hearing from people who got laid off that their severance payments have gotten hung up in Erickson's bankruptcy filing. When companies seek protection under the bankruptcy code all payments get suspended unless a judge OKs them. Something similar happened at The Sun a year ago; people who had taken buyouts temporarily stopped getting the twice-weekly payment.

Erickson has asked the judge in its case to approve the payments, but as of Wednesday morning he hadn't done so. Says Erickson spokesman Mel Tansill:

We have filed a motion to allow us to resume making severance payments, but we don't have a date for the court making a decision.This is all we wish to say about the matter.

I had asked him how many people were affected, how much money was involved etc.

Posted by Jay Hancock at 6:24 AM | Permalink | Comments (3)
Categories: Erickson Bankruptcy
        

The seeming inability of many to delay gratification -- to study in school to prepare for a career, to forego sex until ready, to save up for a down payment -- is responsible for many problems. Turns out that dolphins have figured out the benefits of saving for the future -- an insight that seems to have eluded people who bought houses with nothing down and thought it would all work out fine. From the Guardian:

At the Institute for Marine Mammal Studies in Mississippi, Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean.

Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

HT Marginal Revolution.

Posted by Jay Hancock at 2:22 PM | Permalink | Comments (1)
Categories: The Great Recession
        

Coming on the heels of the state's intervention in EDF Group's attempt to invest $4.5 billion in Constellation Energy, the sale of Black & Decker to rival Stanley Works is another commentary on Maryland's dubious business climate, many are suggesting.

I don't think this is the case. There are plenty of things to discuss about how Maryland deals with its business citizens, but the Black & Decker case doesn't seem relevant. It's a business deal pure and simple. Black & Decker boss Nolan Archibald has no love for Maryland's business environment. And I assume he was appalled by the Constellation/EDF developments. But there is no evidence the Maryland's business climate had anything to do with Black & Decker's sale. Company spokesman Roger Young said it was not a factor.

And Connecticut, to where the corporate headquarters and power will pass, is hardly the rule-free business playground that corporate America sometimes suggests it would prefer. It does, however, have both personal and corporate income tax rates that are lower than Maryland's.

Here's today's column on Black & Decker. Read the whole thing here.

It was the first thing analysts asked Black & Decker boss Nolan D. Archibald about the Maryland company's sale to The Stanley Works.

"Why now?" James C. Lucas of Janney Montgomery Scott in Philadelphia queried during a Tuesday conference call. "What drove this transaction today as opposed to any time in years past?"

Archibald had an answer, which I'll get to. But the real answers seem obvious.

After one of the longest reigns in history for a Fortune 500 CEO, Archibald is old enough to retire and ready to relinquish power. That's the first answer. The second: Both Stanley and Black & Decker are probably worried about the economy.

Posted by Jay Hancock at 8:24 AM | Permalink | Comments (4)
        

My first reaction to the news about Black & Decker is that it's not good for Baltimore. Whether you call it a "merger" or a "sale," metro Baltimore is losing a major corporate headquarters that it has had for 100 years. It's also hard for the people who will lose their jobs. It sounds like there will still be a major white-collar presence in Towson. (Black & Decker's last factory jobs left Maryland six years ago.) The way the companies are talking, most of the jobs there will be preserved.

But the ones that get eliminated will be highly-paid, top-of-the-food-chain positions that overlap with those at Stanley's headquarters in Connecticut. When you lose a job from that level, especially in today's economy, it is difficult to find a new position with as much pay and responsibility. The disappearance of those positions also reduces the spending power of the Baltimore economy. Losing a corporate HQ often means fewer charity dollars locally and less autonomy for the jobs that remain.

Baltimore has seen this movie before: Rouse, Allfirst, Alex. Brown, Mercantile, USF&G, Maryland National etc. We're lucky to have so much federal money washing over the state at the moment. From a macro point of view, that will ease the pain. Other things being equal, you'd rather get laid off from Black & Decker in Towson these days than from General Motors in Detroit. But it will still be tough.

Posted by Jay Hancock at 6:56 AM | Permalink | Comments (13)