Globally the rich countries citizens are not tremendously happy with health care systems overall. It seems likely not only does the USA cost twice and much as it should and perform poorly compared to countries doing an excellent job but the USA performs that poorly compared to countries that themselves have quite a bit of improvement to make. Which makes the state of the USA system even worse.

Data from the Commonwealth fund report published in 2011 with data for 2009, International Profiles of Health Care Systems, 2011:

Table showing, percent of GDP spent and total spending per capita in USD on health care by country.

Under currently law in the USA by 2020 the uninsured rate should decline to under 5% by 2020 (still far more than any rich country – nearly all of which are at 0%).

On many performance measures in the report the USA is the worst performing system (in addition to costing twice as much). Such as Avoidable Deaths, 2006–07, the USA had 96 per 100,000, the next highest was the UK at 83, Australia was the lowest at 57. And Diabetes Lower Extremity Amputation Rates per 100,000 population, the USA had 36 the next highest was New Zealand at 12, the lowest was the UK at 9. For experiencing a medical, medication or lab test rrror in past 2 years, the USA was at 18%, next worst was Canada at 17%, best was UK at 8%. The USA was top performer in breast cancer five-year survival rate, 2002–2007. And sometimes the USA was in the middle, able to get same/next day appointment when sick: the USA was at 57%, New Zealand achieved 78% while Canada only reached 45%.

It is possible to argue the USA provides mediocre results, which is consistent with most global health care performance measures. Unless you directly benefit from the current USA system it is hard to see how you can argue it is not the worst system of any rich country. Costing twice as much and achieving middling performance. All that doesn’t even factor in the cost in anguish and bankruptcies and restricting individual freedom (when you have to stay tied to a job you would rather leave, just because of health insurance) caused by the difficulty getting coverage and fighting with the insurance companies for payment and coverage for treatment expenses.

Related: Measuring the Health of Nations – USA Paying More for Health Care – Traveling for Health Care – resources for improvement health system performance

The new year starts with markets still highly uncertain due to the after affects of the too-big to fail credit crisis and the Euro-zone crisis. Job markets leave many people’s personal finances is trouble and those that are in good shape have a much greater challenge determining what are optimal personal financial strategies.

And markets embody the uncertainty. Investing strategies are also made more difficult by the current uncertainties. Continuing with long held strategies seems wise, but less comforting in these troubled times.

• 32 Best Dividend Stocks for 2012 by Shailesh Kumar – “The following table lists the best dividend stocks for 2012 based on dividend yields, dividend growth rate and dividend sustainability. All the stocks in this list have a P/E ratio of 15 or below.”
• How I Switched to Long Term Thinking – “I started spending some time each day thinking about the decisions I made that day, particularly ones I would often see myself repeating. Outside of the moment, I’d look at the short term benefits of my options as well as the long term benefits and I’d decide independently what the best long-term choice was.”
• A Country In Denial About Its Fiscal Future by Robert Samuelson – “Political leaders assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases. At best, this is wishful thinking. At worst, it’s playing Russian roulette with the country’s future.”
• 

  Top 10 Countries for Manufacturing Production in 2010: China, USA, Japan, Germany… by John Hunter. China took over first place from the USA in manufacturing output in 2010. From 1980 to 2010 China increased output 1345%. The total top 10 group of countries increased output 302%. From 1995 to 2010 China increased output 543%. The group increased 64%.

• The Year In 4 Charts – The anomaly was the decade after the euro was introduced, when lenders treated Greece and the rest of the euro zone as identical to Germany.
• How my blog earned $10,000 this year – Gross income 2009: $4,760 – 2010: $5,693 – 2011: $10,044 “Recently, I shopped my blog around to see if I could find a buyer… Alas. I cannot. This blog is worth more to me than it is to a buyer.”
• Why Is There a “Zero Lower Bound” on Interest Rates? by Todd Keister – “the potential for negative interest rates to disrupt financial markets limits the extent to which policymakers can stimulate economic activity by lowering interest rates. This limit is known as the zero lower bound.”
• Double-digit unemployment? These firms can’t find workers by Arezou Rezvani – “Part of the problem stems from the fact that few Americans are trained in sewing skills. That has left factories dependent on immigrants who learned the trade in their home countries. When sewing jobs began to dry up a decade ago, many talented workers left as well.”

The webcast is by the great Kahn Academy which produces simple educational content (like the above) on all sorts of topics. I find this too slow but I think it might be good for people that are not really sure how the banking system works. There is a group of people that are very apposed to fractional reserved banking, as a principle. I actually am fine with it, but it needs to be regulated much better than we have done.

I suppose it might be true that our political leaders are much too subservient to those giving them lots of cash to regulate in a manner even close to acceptable: and therefore fractional reserve banking is dangerous. I am not sure that they are so hopeless that this is the case, though the more I see of how much they don’t know, and how often they seem to just vote based on what those giving them cash want it gets to be harder to believe they can be trusted to act close to properly (this is extremely sad). And it is mainly an indictment of ourselves: we keep putting people back in power that act mainly to reward those giving them cash and don’t seem interested in actually what is important for the long term interests of the country.

I believe the FDIC actually does quite a good job of providing a solution to manage some issues with a fractional reserve banking system and people being able to rely on getting their money back.

Related: Charlie Munger’s Thoughts on the Credit Crisis and Risk – Leverage, Complex Deals and Mania – Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren

• Why Financial Literacy Fails (and What to Do About It) by JD Roth – “‘For years, I struggled with money,’ I told my interviewer today. ‘I knew the math, but I still couldn’t seem to defeat debt. It wasn’t until I started applying psychology to the situation that I was able to make changes.’”
• Get ready for the three big financial crises of 2012 by Jim Jubak – “So in 2012 Ireland—and Greece and Portugal—are going to face a huge choice. They can either try to grind out more austerity in the midst of a EuroZone recession or they can try to renegotiate some of that debt. If you remember, the battle over Greek bank debt almost scuttled the euro this year. Well, we’re going to see the same problem again in 2012…”
• How Long Would It Take To Build A $5000/Year Dividend Cash Flow? – John is able to investing $1000 per month in a portfolio now yielding 2.86% and dividends increasing 9% a year (under historical level for the stocks included)… a bit over 7 years…

• Mark Cuban, invest in yourself. Keep your cash – wait to get a bargin based on the cash your have which allows you to take advantage of market opportunities.

• Fix Your Finances and Quit Your Day Job by Miranda Marquit – “Take a look at your finances. Are you in a position where the loss of your income would impact the family’s cash flow? Does your partner have a job that could make up some of the difference? How much are you earning on the side right now?”
• Year End Tax Tips by Ryan Guina – “Harvest your losses. You can sell losing investments and offset up to $3,000 of other income per year. Any additional losses can be carried forward to future years.”
• The Value of Earning a Side Income – “Let’s assume you can generate $25,000 a year in extra income during retirement. Now you only need $75,000 in income from your retirement funds. And that means your magic number is $1.875 million ($75,000 / 4%). That’s still a lot of money, of course, but a lot less than $2.5 million.”
• Relocating to Another Country by John Hunter – “There is an increasing trend to move from the USA to another country to work and live… Recently this has picked up quite a bit; I am surprised by the velocity at which this interest in moving (I figured it would be a long term mega trend but not so drastic, so quickly). Economic changes are often quite surprising in how rapidly they move forward.”

Related: Curious Cat Management Blog Carnival

An interesting survey shows USA investors have become much more interested in relocating in the last two years (the data they show though has tremendous volatility over time, so I am not really sure this means much). I wonder how much of it can be explained by investors wanting to get a deep understanding of very promising markets. I wouldn’t image the actual number that do this is huge, but maybe the number considering it is significant. Billionaire investor, Jim Rodgers moved to Asia because he sees Asia as key to the future. One of the reasons I moved to Malaysia this year was to get a in depth understanding of what South East Asia is like (it is not a deciding reason, at all but maybe the 4th or 5th reason).

I believe the globalization of the employment market is a long term trend that will continue – especially for “knowledge workers.” The USA rested on the post WW II economic domination for nearly 50 years. The policies also helped this continue: investing in science and engineering, favoring entrepreneurship… But other countries have realized the value of these things (and the USA is slipping – not investing nearly as much in science and engineering and favoring large corporations that give politicians large amounts of cash over innovation – see things like the incredibly outdated “intellectual property” system, SOPA, favoring huge financial institutions…

The combination of long term policy weakness, the inevitable decline in the USA to world ratio of economic wealth, and the financial crisis caused by the policy weaknesses have seemingly greatly accelerated the trend. The next 2 or 3 years will determine if that is a permanent acceleration or if we go back to a slower pace – but on the same path. My guess is that we will stay on this path but the pace will not follow the level surveys might indicate (showing interest in such a big change is far different from actually moving).

There don’t seem to be any decent estimates of Americans living abroad. The US State Department claims releasing their estimates would be a national security risk? And the Census bureau says it would cost too much to try. Wild guesses seem to be between 4 and 6 million.

Related: I want out (subreddit) – Why Investing is Safer Overseas – USA Heath Care System Needs Reform – Copywrong

Robber barons and their ilk are not capitalists. Those attacked today as capitalists are much more like European nobility that fought to let the nobility take most of the economic profit from everyone else.
Capitalism is a wonderful thing.

The foolish economic policies the politicians we have elected over and over again for decades are idiotic and not capitalist (they are somewhat capitalist but the things people are complaining about are not capitalism but the corruption of the system by those subverting capitalism). They are the result of favoring cronyism and bribery over capitalist regulated markets.

What we need to do is not throw out the capitalists. We need to actually throw out those that say their cronyistic policies are capitalist.

Capitalism is an economic system designed to achieve economic gain for a society. Adam Smith (and others) understood that if those with power to destroy the functioning of markets (for personal gain) were allowed to do so then the benefits capitalism can produce are reduced. And they definitely would try to (according to the believes fundamental to the capitalist model) so a capitalist system has to account for that.

“Free” markets are good. But in capitalism “free” markets means markets where no entity has “market” power – that is the ability to move the market. This is the idea of perfect competition. In the real world this doesn’t happen but capitalist understand the weakness of unfree markets and that has to be dealt with. Things start to get messy here. There is no perfect way to do this and I don’t know of anyone (that I don’t think is naive) that thinks this can be done in some way that avoid economic friction (loss to the society from what is possible in some ideal state).

Now those that like cronyism and letting whoever has the clout do whatever they want have tried to say capitalism means doing whatever you want to get as much capital as you want. It doesn’t. Capitalism isn’t about letting whoever has the gold get more. It is an economic system to provide gain to society by setting up rules that result in market forces brining benefit to society.

Those thinking about setting up the rules for a capitalist system understood that many people are going to try and get away with taking what isn’t theirs. So you have to enforce the rule of law. You have to prevent those that seek to destroy markets and take personal gains they should not be able to (due to being allowed to collude with other market players, collude with politicians to gain political concessions that destroy market functions…).

I happen to believe capitalism is the best economic system we have by far.

I happen to believe those that have increasingly turned out system into one where croynism is destroying markets to give gains to a few parties dominates are creating great damage. But the problem is not that these people show capitalism is bad. Instead these people show the dangers of not putting in the effort to retain capitalist ideas: your economy suffers and people suffer.

There can be debates about many aspects of how you best allow markets to function. But we have largely allowed those that don’t believe in capitalism to claim that their desire to setup rules that benefit a few connected players is capitalist. It isn’t.

For those that just say capitalism is bad I am not sure what they advocate (I know they will advocate many different things). Capitalism, to me, is a current best engineering solution for how to arrange an economic system for people. If we find something better, I am fine switching. There are some capitalists who think it is more like a religion – that Capitalsim is the end, Capitalism is what is good. I don’t believe that. I believe that the capitalism engineered solutions we have now have been corrupted greatly by those seeking to benefit small numbers of people for their own gain (plain and simple corruption with a health dose of ignorance to help them justify their actions and maybe simple stupidity also, it is hard to know how much is intellectual lameness and how much is corruption).

There is also an attempt to call a political idea capitalist; which is basically that government is evil. This also creates problems as you have people advocating what they call “capitalism” but it is actually just their political dislike of government. That political position is fine to argue just don’t equate that position with capitalism. It is true that capitalism believes in using market forces instead of government central planning for the economy but the anti-government arguments are mostly about non-capitalism issues.

My belief is, society will benefit if we stop allowing those seeking to destroy markets so they get personal gains. And if we seek to make the economic system more capitalist instead of the cronyist system we are moving toward.

We never had some great capitalist system – the “golden age.” I do think in the last 25 years we have become less capitalist and more cronyist. And have come to think of capitalism as something it isn’t – the political idea of government is bad.

From here we can advocate for different economic policies and aims. I believe we will be best served by moving away from cronyism and toward capitalism. Others what to move in another direction. There are those that want to become more cronyist (they are winning). There are those that just want to punish those that are winning at the cronyist game. While I also dislike that our system is rewarding those people I don’t think the aim should be to punish them. The aim should be to design a better system and let the gains go to those that create solutions that the market rewards: remove the distortions that allow cronyists to profit by their trampling on markets (avoiding competition).

The problem I have will those attacking the current system as capitalist is that in doing so the solutions that will follow are likely to reduce economic prosperity for the society. I agree with those that are frustrated with the current system favoring cronyism. I think society will benefit by trying to be more capitalist. If cronyist succeed in claiming what they offer is capitalist that takes away the best solution to the problem – which is to move toward capitalism. Then we are left with trying to find what non-capitalist solution beats the current somewhat capitalist and increasingly cronyist solution. Which is a mistake, I think. That is the choice it is a lose lose option, I think (unless someone has some new economic system that performs better than capitalism that I am ignorant of).

Imagine if people equated Microsoft in 1995 as “technology companies.” The behavior that Microsoft engaged in that was bad was not a problem with “technology companies.” Those were problems of Microsoft. I don’t think we should have gone in some anti-technology-company direction. We needed to address the issues with Microsoft. Today we need to address the cronyism problem.

This post is already too long, but what I call the “cronyism problem” does over-simplify reality tremendously.

This post puts together 2 of my posts on Reddit, see the discussion on Reddit.

• How the Plummeting Price of Cocaine Fueled the Nationwide Drop in Violent Crime – “But it’s not only a growing supply of product that led to the collapse of the cocaine market. Newfound competition in the form of locally-produced methamphetamines and prescription narcotics would continue to drive business away from cocaine… At a certain point the decision matrix for entering a life of drug-related crime collapses for all but those with no other alternate financial sources or for those with a personal interest in the craft.”
• Eight Reasons to be Bullish on the US Dollar by Steen Jakobsen and Michael Shedlock – “58% of the US dollar index is the Euro, and the Euro is a basket case. European banks are in worse shape than their US counterparts, and a breakup of the Eurozone that I expect will certainly exacerbate the problem.”
• 
  Video: Bogle says Market are About Fairly Valued Today
• Investing in an Engineering Degree Provides a Lifetime Advantage of $1,090,000 by John Hunter – “the lifetime advantage ranges from $1,090,000 for Engineering majors to $241,000 for Education majors”
• How To Optimize Your Apartment Hunt by Sarah Davis – “Right now, it’s a landlord’s market. There’s a surge of renters who have either gone through foreclosure or are simply waiting out the sleepy housing market. That means at best it will be hard to negotiate a lower rent and at worst you may be competing with other prospective tenants to land the apartment you want.”
• France starts to show the early symptoms of the Greek disease by Jim Jubak – “The problem is one that we should be familiar with from Greece and Italy. No sooner does a government—in this case that of President Nicolas Sarkozy—put an austerity package in place in order to reduce the budget deficit than falling economic growth blows a hole in that budget and creates the need for another austerity package.”
• How Much is too much in your 401(k)? – “So while I still advise maxing out any tax-deferred savings accounts like the 401k, you’ll also need to invest elsewhere simultaneously. My own strategy was in Vanguard index funds, a paid-off house, and some rental properties, but you will surely find other places depending on your own interests.”
• Surge in Rich Chinese Who ‘Invest’ in U.S. Citizenship by Robert Frank – “Under the program, foreign investors must finance commercial projects in the U.S. by investing either $500,000 or $1 million and create at least 10 full-time jobs… In 2011, 2,969 Chinese citizens applied for the program and 934 were approved… a huge increase from previous years. In 2007, only 270 Chinese citizens applied and only 161 were approved”

Those benefits are greatest for several majors including science, math and engineering. The problem I see is not so much that significant benefits are lacking for college degrees but the huge increases in costs of getting a degree are so large that for some majors the cost is just so large that even with the benefits it is arguable whether it is worth the cost (while a few decades ago the benefits were universal and so large the economic benefit was not debatable).

The authors of the report found that all undergraduate majors are worthwhile, even taking into account the cost of college and lost earnings. However, the lifetime advantage ranges from $1,090,000 for Engineering majors to $241,000 for Education majors. As I have written frequently on the Curious Cat Science and Engineering blog, engineering degrees are very financially rewarding.

The top 10 majors with the highest median earnings for new graduates are:

• Petroleum Engineer ($120,000)
• Pharmacy/pharmaceutical Sciences and Administration ($105,000)
• Mathematics and Computer Sciences ($98,000)
• Aerospace Engineering ($87,000)
• Chemical Engineering ($86,000)
• Electrical Engineering ($85,000)
• Naval Architecture and Marine Engineering ($82,000)
• Mechanical Engineering, Metallurgical Engineering and Mining and Mineral Engineering (each with median earnings of $80,000)

Chart of salaries (25th and 75th percentile) by major in the USA based on data from 2009

Related: 10 Jobs That Provide a Great Return on Investment – Mathematicians Top List of Best Occupations – New Graduates Should Live Frugally

Even with the extremely high current unemployment rate, some fields have virtually no unemployment: geological and geophysical engineering; military technologies; pharmacology, and school student counseling. Engineering overall has very low unemployment rates (under 4% today, I believe). While majors with the highest unemployment rates are in the fields of: Social Psychology (16%); Nuclear Engineering (11%) [a high rate, but it is also wise to remember the total number of these is a very small portion of engineers overall]; and Educational Administration and Supervision (11%).

Nuclear engineering is a gamble now I think (potentially highly rewarding, but I would gamble on it myself). If 10 years from now countries have decided nuclear is safe enough it may well pay extremely well as countries look to avoid more negative impacts from climate change. The current lowered number of graduates is similar to what happened to petroleum engineering). People often forget oil prices crashed, and exploration crashed, and demand for petroleum engineers crashed, and salaries decreased, and students didn’t choose that major. Then when exploration boomed there was also very few available engineers and over a decade later the supply of petroleum engineers is still not meeting demand – thus the continued very high salaries.

Graduate degrees were also found to provide economic benefits. The highest increases in earnings are in the areas related to healthcare and biology: Health and Medical Preparatory Programs (190%); Miscellaneous Social Sciences (134%); and Zoology (123%). Meanwhile, the majors in which students have shown the lowest earnings boost from advanced degrees are: Atmospheric Sciences and Meteorology (1%); Studio Arts (3%); and Petroleum Engineering (7%). Biology and Life Science majors, make $35,000 more at the median with a graduate degree. Engineers with a bachelors degree have a median salary of $75,000 and with a graduate degree have a median salary of $99,000.

My guess is that the small benefit of petroleum engineering graduate is due to the extremely high wages for those with any degree. There was a paucity of graduates that left the market willing to pay even for bachelors degrees. And it is hard to make up for the lost of very high wages while studying for the graduate degree. I expect wages to decline a bit going forward for bachelor degrees which then may well make the graduate degrees pay off in the future at a better (though still somewhat lower rate).

The analyses contained in this report are based on newly released data from the 2009 American Community
Survey (ACS) by the USA census bureau.

The increases in income inequality creates problems and increases serious risks. Some people have a political ideology that drives their thoughts on any economic policy. I instead, look to economic issues if they benefit society. The reason capitalism is great is because society benefits. The policies that create huge income inequality are bad for society and should be changed.

Sadly the strong support for policies to elevate trust fund babies in the USA have created a society where economic wealth in the USA is now greatly defined by how rich your parents are instead of your ability and effort. The USA used to have great social mobility now we have changed society to become more like feudal Europe, while Scandinavia has become more like the USA used to be for social mobility.

Related: Economic Fault, Income Inequality – Middle Class Families from 1970-2005 – Income Inequality in the USA (2006) – The Widening “Marriage Gap” is Breeding Income Inequality

• How I live on $7,000 per year by Jacob Lund Fisker – “If I had to venture a guess, I’d say I’m more frugal (the way your grandparents were frugal—in fact what I do wouldn’t be considered very extreme by your grandparents or great grandparents—I’d probably be average from their perspective) and I adhere more to a do-it-your-self ethics.”
• Invest in Communities to Advance Capitalism by Howard Schultz (CEO of Starbucks) – “It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.” [similar to Dr. Deming ideas from decades ago on the purpose of organizations, which I share - John].
• My dad taught me cashflow with a soda machine by Rob Fitzpatrick – “The vending machine didn’t magically make me want to be an entrepreneur. I wanted to be a video game designer, then an engineer, then a video game designer again, and then an academic. I get the impression kids are a bit slippery in that regard.
  But when I stumbled into the startup world two decades later, the dots began to connect. Cashflow wasn’t a new concept.”


Forest Glen Preserve, Illinois, Illinois by John Hunter

• Disability Insurance is Very Important by John Hunter – “When I would have had gaps in coverage from work, I have purchased disability insurance myself. I am all in favor of saving money. About the only 2 things I don’t believe in saving money being very important are health and disability insurance.”
• What Other Dividend Lists Exist Besides the Dividend Aristocrats? – “companies that have increased their annual regular dividends for at least the past 10 consecutive years and have met specific liquidity screening criteria… The members of the Dividend Champions List include, those stocks (not limited to the S&P 500) that have increased their dividend for the past 25 years.”
• Buying a New Home and Converting Your Current Home Into a Rental Property by Philip Taylor – “By refinancing our mortgage, we reduced our mortgage payment by enough to allow us to rent out the property by at least a hundred more per month than all of our expenses: mortgage, property taxes, insurance, home owners association dues, repairs, and property management fees.”
• The perils of near monopoly by Joshua Gans – “Had Qantas had market shares akin to airlines in more competitive markets, the shut down would not have had the external spillovers, publicity and also the ability to shield Qantas — both managers and workers — from personal long-term consequences of such brinkmanship.”
• Is a Costco Membership Worth The Cost? – “Comparing the $401 Costco bill to a potential $690 Safeway bill means that I am saving 41% over the lowest prices I could find at Safeway – and this is over a huge swath of groceries. After subtracting the membership cost, I probably still save close to $1000 per year.”
• Anti-Market Policies from Our Talking Heads and Politicians – “When we allow them to discredit free market capitalism by equating anti-market policies as being free market capitalism we risk losing a great benefit to society… When people get the message that collusion, anti-competitive markets, political special interest driven policies… are what free market capitalism is we risk losing even more of the benefits free markets provide (than we are losing now).
• 3 Robot Stocks That Could Make You Rich – “Robotics are no longer science fiction. There are plenty of publicly traded companies that specialize in futuristic gadgetry improving industries today. Intuitive Surgical (ISRG) is the company behind the da Vinci robotic arm that is transforming the way surgical incisions are done in some procedures.