Recent and future readings

I just finished reading the Hunger Games Trilogy last week. It was much more political than I anticipated, as highlighted by the following quote from the third book: "... in return for full bellies and entertainment, his people had given up their political responsibilities and therefore their power."

Before I started the Hunger Games, I had finished reading The Bridge at Andau, by James Michener, a book about the revolution against communism that occured in Hungary in the 1950s. The people were greatly oppressed by the Soviets, and the brutality and oppression were shocking.

There is a book that I intend to check out from the local library. It is called The Girl Who Was on Fire, and is a collection of essays from other authors' perspectives on the social and political aspects of the Hunger Games series. Not sure when I'll get to it, I recently put together a list of books that would likely be much more educational.

I found out that the National Academies Press has many reads available for free download. http://www.nap.edu/While most of the free download books aren't the most interesting, the site did help me piece together this list of books that I hope to get too eventually (the first one on the list is available to view for free online). Have any of you read any of these books?

• A Beautiful Math: John Nash, Game Theory, and the Modern Quest for a Code of Nature
• Here's Looking at Euclid: A Surprising Excursion through the Astonishing World of Math
• Struck by Lightning: The Curious World of Probabilities
• Unknown Quantity: A Real and Imaginary History of Algebra
• The Secret Life of Numbers: 50 East Pieces on How Mathematicians Work and Think
• The Matchbox that Ate a Forty-ton Truck: What Everyday Things Tell Us about the Universe
• Degrees Kelvin: A Tale of Genius, Invention, and Tragedy
• The Man Who Stopped Time: The Illuminating Story of Edward Muybridge - Pioneer Photographer, Father of the Motion Picture, Murderer
• Prime Obsession: Bernhard Riemann and the Greatest Unsolved Problem in Mathematics
• Stephen Hawking: A Life in Science

Health Care Costs ("bending the curve")

Below is an graph of three phases of healthcare costs, from 1960-1979, 1980-1989, and 1990-2010*. The data are taken from the OECD statistics database. The red curve tracks US spending on healthcare (normalized to the beginning of each period) and the blue curve tracks the normalized spending of all other OECD countries**.



The graph represents a comparison of cost growth between the US and non-US-OECD during three unique phases. What strikes me about the plot is that the growth in costs has been remarkably similar between the two groups for forty of the past fifty years, despite differences between the systems. This indicates to me that claims that changing the system alone will "bend the curve" are ill-founded.

That's not to say the US's system is ideal, or good, or fair, or efficient, or anything else. It's just to say that inasmuch as long term costs are driven by growth, and growth seems to be relatively similar between the US and non-US-OECD countries, simply changing the healthcare system is unlikely to control long-term costs.

What I really want to know is what happened during the 1980's. Up until that point, the US costs were fairly similar to most OECD countries (again, despite differences in the delivery systems) both in terms of absolute costs and growth. But during the 1980's, the US saw healthcare spending relative to GDP grow at a similar to the previous two decades, while other OECD countries saw no appreciable growth (on average). Does anyone have a thought on why that would be? Did something change in Europe in the late 70s early 80s? Or something in the US that caused us not to realize the relative gains our industrialized brethren enjoyed?

*Note: the downtick in the blue curve at 2010 is due to sparsity of reporting. Data isn't yet available from most countries, so the final data point is largely spurious.

**The set of OECD countries expanded throughout the period graphed. So each blue data point is the average of a slightly different set of countries.

Federal budget deficits (Redux)

Given the apparent deal on raising the debt ceiling (*sigh of relief*), I've again become interested in what's driving our persistent deficits. I went back and plotted historical federal spending by subcategory [edit] and revenues by source[/edit] as a percentage of GDP (see plots below).



Spending Plot
A couple things I notice about the spending plot. First is that the major increase in social spending (as a % of GDP) happened between 1965 and 1975. I guess this was Johnson's "Great Society." It also coincides with the period of divergence in health care costs between the US and the rest of the industrialized world (something I don't really understand the causes of). The other thing is that, while social spending rose precipitously with the onset of the Recession, prior to that it was relatively flat for about 20 years. This gives me some small hope that projections of continued significant increases in social spending are not as accurate as I'd previously believed.

But really, the story of the spending plot is the inverse relation between defense and social spending. For the past 60 years we've consistently chosen to fund increased social spending through cuts in defense spending. I don't think that is necessarily bad, but at a minimum it brings up the issue of what to do when we can't decrease military spending any more.

Revenue Plot
The revenue plot shows that federal revenues have been remarkably flat (as a % of GDP) over time. They've hovered around 18% of GDP for the past 60 years. The interesting trends I see in this plot are the decrease in receipts of corporate income taxes and the rise in taxes due to social insurance (increases in FICA and so forth). Total federal revenue is at a 6-decade low, due largely to the fall in income tax receipts. This is a result both of the two recessions in the 2000s and the Bush tax cuts (particularly those for the middle class).

Merrill Hall Alumni Alert

I've been listening to a lot of books by Brandon Sanderson lately, a graduate of BYU. Then I finally read one, and which allowed me to read the acknowledgments page, something that often gets left out of the audio.

On the acknowledgments page of Mistborn, the author thanks "the incalculable Peter Ahlstrom". In the sequel, Well of Ascension, another Merrill Hall alum is credited, Nathan Goodrich, and Peter is again given special mention. (For those of you that lived in University Park with me, Stacy Whitman is also mentioned.)

The books may not be the best book club books, as they're rather long, and don't need a lot of discussing, outside of a few 'That was awesome.' comments. Besides, I'm unclear as to if the book club is even still alive. It's been a year since an official book was chosen.

Let the Good Times Roll

I had a conference in NYC last week, so I used it as an excuse to go up to Boston (and then the coast of Maine).



Besides the degrees, the kids, the homes, and the sore backs, Peter and Jesse haven't changed a bit. It was like old times.




Peter's new universal conversation starter, to his wife's chagrin, is the federal budget. It doesn't work much better in real life than it has on this blog.






The Jones and Barnes families were both excellent hosts. Thanks.

Federal budget deficits

I've been reading a lot over the past few days about the current federal budgetary issues. One of the more interesting things I've found is this working paper from Alan Auerbach (UC Berkley economist) on the mid and long term debt projections. He calculates deficit projections under the assumptions of perpetuating the AMT and Medicare Doc fixes and compares it to the CBO scores. Essentially it shows that the CBO score for the budget likely underestimates total deficits over the next 10 years by about $5 trillion. And that's assuming Bush tax cuts expire as does stimulus spending. If those assumptions are reversed it adds another $5 trillion over 10 years.

But for me the real story is Figure 3 (page 22). Under every projection, revenues (as a percent of GDP) will be flat after 2013 and spending (as a percent of GDP) will linearly increase. All non-mandatory (i.e. non-social) spending will fall, as a percentage of the budget as more and more money (absolutely and proportionally) goes to providing social goods.

The good news is Auerbach is reportedly on Obama's short-list to replace Austen Goolsbee as the head of the Council of Economic Advisers. So if he's appointed, and he manages to avoid being captured by Washington interests, maybe he can bring some sense to the budget process.

Do we need to curtail federal spending? If so, how? The paper linked above doesn't make it totally clear, but the tables found here make it clear that the only sector of spending that is increasing (as a proportion of GDP) is mandatory social spending (Medicare, Medicaid, SS, SSDI, etc.). So, for those PVSers who support liberal federal economic policy, can you propose some way of making social spending sustainable?

Doug Comes to Maryland

Doug and Becky Larson were kind enough to include us on their trip up to DC from NC. They stayed for two nights. It was great. Just like old times. We even went running a couple of times (I'm so out of shape.), as Doug showed off his 5-finger shoes (it was too wet for him to run barefoot, which he often does). I hope all of you will stop by for a visit eventually.

We talked a little about this USA, Inc. business. Doug was mostly interested in the health care side of things. His first suggestion was to blow up the tobacco industry, somehow forcing all smokers to cover their own health care cost. Personally, I think it's a nice idea, but as one who has just been snacking on Easter candy, I can't point the 'be healthy' finger. I can't see anything like that happening politically.

Doug also pointed out that we are much more overweight and have many other health problems that other countries don't, so comparing health costs may not be a fair comparison. Plus, we pay a lot for studies (to get approved by the FDA) and the medical trials and basic medical science that we do here is like a gift we give to the rest of the country. Of course, he also recognizes, much better than I, all of the problems with our health care system, and I suppose he'll post here himself and explain them one of these days.

Becky thinks everyone should need some sort of end of life plan in order to receive Social Security. We waste so much money in end-of-life care, when often the person receiving treatment wouldn't even want that done. I like this idea, especially if it can free doctors (even a little bit) from fear of lawsuits.

There are lots of ways our health care system could become more efficient. Obama's budget plan depends on being able to make it more efficient. Even if he does so, I found his plan to be severely lacking. I'm not even against taxing the richest people a little more. I think everyone is going to have to sacrifice some, but Obama's speech wasn't about sacrifice. He basically said, "Hey, we're America. We can afford everything. We just need the rich people to pay their share."

I think all avenues of getting the budget problems fixed should be on the table. USA Inc. ignores defense because it's not that different than historical levels. It's nice not to blame everything on the wars, but we've got to be better in all of our spending.

I have been listening to this book called 'The Black Swan'. It goes into some detail about how wrong economic predictions are. They have quite a terrible track record. The reason they are so terrible is because they always miss big, rare events, such as 9/11, etc. These models that all of this budget talk is based on... they are almost assuredly all wrong, that goes for both political parties. Just like how it always takes you longer than you think to paint a room, the budget will surely turn out worse than people think.

As a government employee, I know that there are a lot of inefficiencies in the government. I expect there are inefficiencies in most companies, too, but companies are better a scaling back and adjusting when things go wrong. I don't have much faith in our politicians' ability to fix our debt problem. I hope I'm wrong.

Thesis Defense and USA, Inc.

For those who didn't see the news via other information feeds, I successfully defended my thesis last Friday. It's a wonderful feeling not to have an unfinished thesis hanging over one's head (Alvin, I'm looking at you). The thesis title was "Coherent Approximation of Distributed Expert Assessments." The main idea is that when people (or non-human expert systems, like computer algorithms) try to guess the value of two or more uncertain quantities that are related (like, for instance, the probability that the Red Sox win the World Series and the probability the Cubs win the World Series), they may generate logically irreconcilable estimates. The irreconcilability manifests itself in terms of money pumps, like Dutch Books in distributed probability estimation or market arbitrage more generally. My thesis develops a mathematical method for correcting such errors.

On the subject of USA, Inc., I think now would be a great time to discuss it. I'd love to see it in context of the several budget proposals that are currently being put forward (evidently House Democrats are expected to put out a budget proposal today to counter the Republicans' proposal from last week, and President Obama is also getting in on the game, outlining a proposal in his speech tonight).

I read the executive summary of the report and liked several of the points the author made. Most importantly, I think she accurately pointed out that we need to set reasonable goals for revenues and outlays. For instance, the Ryan budget sets revenue at 18% of GDP, and balances the budget by 1) capping Medicare outlays and indexing them to inflation and 2) turning Medicaid payments into block grants to states and 3) significantly reducing all non-defense discretionary spending. This is about what we should expect if revenue is set to approximately 18% of GDP; the federal government simply can't do all it's been doing with that level of funding.

If, instead, we want to continue funding Medicare, Medicaid and discretionary spending at the current levels we need to talk about how much of revenue that will require. In this case, as Meeker points out, the outlays have been growing faster than GDP, so the revenue side would have to grow faster than GDP. This is obviously unsustainable, which leads me to conclude that any plan that doesn't index entitlement growth to GDP growth (or a surrogate like inflation) is not a serious plan.

There are a lot of nuances that I think could be added to the debate; for instance, during the 1990s (most recent decade I found data on) US healthcare costs rose at about 3%, in line with inflation. The big increases people cite (particularly in cross-national comparisons) seem to have largely happened in the 1970s and 1980s. So are healthcare rates really increasing, or are outlays increasingly primarily because more people are being enrolled (hint: it's the latter). Meeker rushes by this point (at least in the executive summary), but I think it's an important conceptual one to recognize (if it's valid; I don't know that the sparse statistics I've seen thus far justify my assertion).

USA Inc

This is one of the more interesting and important things I've read in awhile. It isn't exactly a book but has some significant depth and deals with issues that are obviously critical. It is written mostly in finance-speak but I think is presented plainly enough to be clear if you walk through it. We could even make it up for discussion if people have interest...

Glenn in the news

Well, I wasn't actually in the news, but someone I know was. Craig Franklin (AKA, the cheese-head man).
A group of us from the University got together to participate in the Polar Plunge, a fund-raiser for the Missouri Chapter of the Special Olympics.
Since we work with research animals, we dubbed ourselves the mice-cicles. Our boss (Craig Franklin), was the cheese.
It was cold crazy fun, though we were fortunate enough to have the weather warm up substantially in the week preceding the event.
Pictures and such on my blog:
http://glennandgirlies.blogspot.com/2011/03/polar-plunge.html

Lattin Baby

We just had number 5!

Sarah Elizabeth Lattin
Born Wed. Jan 19, 2011
7 lb. 14 oz.
20"

Keeping New Year's Resolutions

Last night, I had a dream that Peter was riding his BMX bike past the place where I was giving blood, so I guess I need to respond to his post. I think Peter's ideas about having a schedule and a theme are brilliant. The schedule would be the more helpful of the two. Then I can reserve books in advance and plan time on the calendar to write a post. (It's surprising how much more effort it takes to write than to read.)

In my opinion, the first schedule should include 4 books between now and the end of June. Then we can adjust from there. I know that most people won't read 4 books, but if only 2 are scheduled, then there's a greater chance that you won't like any of the options. Plus, the rotation in who gets to choose goes faster. (Note: I can be convinced of 3 if they're going to include long books, like Rob's suggestion of Ayn Rand.)

I think the theme idea is fun. I would make slight tweaks to Peter's suggested themes. For example, instead of "Leadership", I would say "Leaders and Legends", the proposed names of two divisions in the Big Ten. You can tie ANYTHING into a theme, so no one needs to feel limited. If you've ever played Bible Scattegories, you know what I mean. Of course, if you are subsequently going to ignore the theme, then there's really no point in having one. So perhaps a theme is unnecessary.

Anyway, let's get this party started. Just make a decision, Peter, and we'll all try it out. I'm looking forward to more stimulating virtual conversation this year.

Happy New Year's Day

Happy 2011 PVS!

I've been less active on the blog than I would like recently. I chalk it up to guilt over wasting spending time writing anything other than my thesis. Of course, I'm not as actively writing my thesis as I should be, so really it just means I'm depriving myself of blog activity for no good reason, but whatever. Did I mention Happy New Year?!

And welcome to mythical Rob. I'm pretty positive I invited you to join a couple of times, but maybe the hotmail address I was using was defunct.

I've been thinking about a way forward for the PVS book club; it seemed to fizzle a bit at the end of 2010, and I had a couple of ideas I thought might make it more enjoyable for 2011. First, I'd like to choose a broad theme for the year, something to tie the books together. I had thought something like "Leadership" or "Death" or "Marriage". This will decrease the eclecticism somewhat (unfortunately), but I think it might make the overall experience more rewarding. My other thought is that we should choose the list of books and discussion dates in advance (set a schedule through June, for example); according to Cass Sunstein and Richard Thaler, this would be a helpful nudge that might make participation easier.

So, if you like these ideas, or if you hate them, or if you have a suggestion for a theme, or if you have other suggestions on the book club, I'm pretty sure you can find the comment box. And even if you don't have any comment other than "yeah, I wanna keep the book club going," that would be still be helpful to gauge interest.

Born to Run

Well this is several months late, but a quick look at recent posts says I may not be all that late after all...

And it's too bad that the Mortensens are not coming to North Carolina. That would have been fun. I haven't seen Robert since a trip I took to Phoenix several years ago.

My answers to Alvin's specific questions are posted as a comment below. I know you are dying to read them...

One of the first friends I made when I moved to Durham was our Elder's quorum president. This guy was from the Portland Oregon area and totally fit the mold: (remember, I lived there and love it, so this is not meant in derision) he loved outdoor activities, was a conservationist, drove a Volvo, and generally eschewed unnecessary worldly possessions. They raised their own chickens and eat granola. At the same time, he's a brilliant PhD candidate. Anyway, the one truly weird thing was the barefoot running.

Apparently he had always been a runner and cyclist. Then one day at a meeting in Chicago, he meets a barefoot runner and everything changes. By the time I moved to Durham, he had run at least one barefoot marathon, using his bedroom slippers to get him through some of the more rocky parts of the course.

Bizarre!

Or so I thought...

About 6 months after I moved here, the brand new Nikes I was wearing turned out to be a bad purchase. My old plantar fasciitis was flaring up and even worse, I discovered the reality of IT band syndrome. I was limping rather severely through my life when this friend again took the chance to preach the virtues of barefoot running. I listened just enough to hear him out, but still had not considered that he may be on to anything significant.

Then I heard he was running with a track club and had posted a 4:40 mile earlier that year. The speed shouldn't have mattered to me but it did. I have a blind respect for people who are faster than I. Plus, there was no way I could afford new running shoes on our current budget.

I limped through my half marathon in March 2010, then put the running shoes in the closet.

It has been a difficult transition, to say the least. There is no small amount of pain involved with conditioning the skin on your feet, or developing muscles in your feet and calves to support the running style. For a while, I waffled back and forth between shoes and barefoot. There was a day sometime in the fall, though, when the fight was over. I was 4 or 5 miles into a run and my feet were again bothering me. I took the shoes off, finished the run, and haven't worn them since.

I don't know that barefoot running is really the answer to all my running woes. So far it has just been a pleasant surprise. I never would have pictured myself running 11 miles barefoot just for a good time, but that is what has started happening.

For Christmas, I got the Vibram FiveFingers. They are too new for me to give an opinion here, but early returns are positive.

Anyway, I did enjoy reading "Born to Run." Not coincidentally, my friend had been pestering me to read it for months. I was glad for the extra nudge from the PVS.

And as a final comment about this topic: I think the book may set a too-idealized tone about the benefits of the running lifestyle. If you could somehow magically turn our society into a society of runners, however, I believe the change would be overwhelmingly positive from a spiritual and especially medical perspective.