Tuesday, June 30, 2009

Jobs In Buenos Aires

My friend and dance partner recently told me about her father's job. He drives a taxi. He works 12 hours per day, six days a week. He takes a 3-day vacation every December to visit his mother in Uruguay. This has gone on for thirty years. She thinks he typically takes home about 50-60 pesos (about 17 dollars) in a day. Honestly, I think she is understating his earnings but the ballpark is certainly correct. He rents a small apartment and manages to feed himself and his wife.

His daughter, my friend, works for her aunt making women's clothes. She wants to be a fashion designer, but needs to save money for tuition. She lost her last job because the place, along with her computer, identification papers, and some books, went up in flames. She quit a quality control job before that because they wanted her to lie to clients. She is a bright woman.

Last Friday, she had an interview scheduled for a job as a secretary at a company that makes pipes. The job is 6 hours a day, 6 times a week. To get there, she would need to take 2 busses for more than two hours each way, but it pays about 1600 pesos per month which is more than she currently earns. She holds the equivalent of a bachelor's degree in management from a well-regarded engineering school.

So she left her house almost 3 hours before the interview. At the 2nd bus stop, a driver told her she should take the semi-express, so she waited. After an hour she gave up and re-scheduled the interview.

Over the weekend, she figured it just wasn't worth it. Considering bus fare and the huge waste of time (not to mention that spending that much time on a Buenos Aires bus is a sure way to damage the soul), it would better to keep looking for something closer.

This is part of life in Buenos Aires. There are thousand of restaurants. They have good atmosphere, good food, good coffee at low prices. But they sit in a near-vacant state. The waiters are bored. Most of the local population cannot afford to go out for a simple coffee and croissant. But it is part of the culture, and cultural rigidity is strong here. So they have their "merienda" at home.

The local tango dancers cannot afford to take private lessons - some good ones cost as little as 20 dollars* - because foreigners drive up the prices. On the other hand tango might not even exist here - certainly it would not be as robust - if it weren't for tango tourism.

The state of the restaurant industry is a portent. I believe this place is in transition. The recent economic troubles of the world have made the current economy, depressed as it is, unsustainable. Half or more of these restaurants will be closed 2 years out. What will these people do? I don't know, but I hope something.

I have heard some bad stories about people's experience with taxi drivers, but my experience has been universally positive. I take the bus more often now because I've finally figured out how to use the bus system to my advantage. But for my first 50 or so days here I took taxis often. They are super cheap. Energy is heavily subsidized here, and the drivers don't make much money. So, for example, to take a taxi to and from a milonga (a tango dance) and pay the admission typically costs about 7 or 8 dollars.

The drivers don't get tipped here. Some locals even berate tourists for rounding up a fare payment. But I have found that taxi drivers often tip me. Why? They don't want to, or can't, give coins as change. So if I owe 10.20 I'll give the guy 12 and he'll give me back the 2-peso note rather than make change. Sometimes restaurants tip me as well, and on one occasion I was tipped at the supermarket.

Every taxi driver I've met has been very nice. They know the city, and they give me an excellent opportunity to work on my Spanish. One guy, after hearing that I was learning Spanish, gave me a 10-minute lesson on what seemed like 100 or so vulgar words.

"Soy tu professor," He was very proud.

Another, at 2AM was sure I was going home to get some action. I didn't have the heart to point out that there was no woman next to me in his cab.

I've heard about relatives in New Jersey, the good and bad parts of town, the origins of the songs on the radio, and more than one solution for the swine flu.

The people of Buenos Aires, from what I know, are overwhelmingly nice Sometimes I feel sad about the economic conditions here, but then I feel bad about feeling sad. All the people I know here have lived through markedly better times**, yet they are either happy or they make it their business not to let on otherwise.

So I spend a few minutes now and then, feeling sad or bad, then I go back to my simple life and feel, well, pretty damn good.

*Some bad ones cost $100 or more.
**Some of the tango teachers are definitely making out pretty well, but the physical state of the city they live in is distant from that of their childhood.

Monday, June 29, 2009

Keep Your Health Care, Just Give Me The Money

President Obama and his friends may want to tax employee-provided health care benefits as part of their "overhaul" of the health care system. First I reacted, then I got to thinking.

The reaction is fairly simple. What has come to be called health care simply is not worth what they say it is, and I don't want that "value" taxed as if it is income that I can use to buy whatever I choose. I'm a reasonably healthy man with a background in insurance and statistics, so I'd much rather have the money as pure salary and fend for myself on health care.

Now, of course, employers may not be willing to give me more money instead. I'll come back to this later, but for now: In most tax brackets, I would still prefer nothing to the alternative of health insurance plus tax.

Though eight years of Bush & Company, combined with a few months of Bushama, has made me long for the smallest possible government possible, I still believe that government can play a positive, necessarily limited, role in a society.

And get this, health care is one area in which this seems to be true. The two primary arguments against government provided health care are that it is socialism (implying, of course, that socialism is bad) and that a government system would be inferior to anything the free market would offer. The primary argument for government-provided health care is that health care is a basic human right. Let me address these three issues in turn.

First, health insurance, like all insurance, is socialism. Whether it is provided by the private or public sector, it is socialism by definition. Insurance is designed to pool the risk of a large group of people among which realized outcomes will be asymmetric (for example, some will get leukemia while others will not suffer from more than a hangnail), and divide the financial costs evenly among them.

So for me the "oh no, it's socialism." argument is empty even for those who are afraid of socialism.* After all does anybody really believe that if government takes over health care, that socialism will creep into the coffee-making and music industries. Besides, government control of the banking system is a much quicker path to soviet-style communism than health care could ever be.

There is a difference, indiscernable if you listen to political debate, between health care and health insurance. Insurance companies do not provide health care; they provide risk-pooling. Doctors, nurses, hospitals etc. provide health care. What the talking heads always call "health care" is really health insurance.

Second, exclusive of transaction costs, it is certainly true that a free market in health insurance would provide a better insurance product for consumers than the government. I hold this to be self-evident. However, there are huge transaction costs associated with health insurance that cannot be excluded in any honest policy debate.**

Third, I think the idea that health care should be available to everyone is noble and the sentiment is praiseworthy. It is, however, impossible. Health care is a lot of things, but it aint free. There are real costs associated with providing ANY medical service, and we cannot simply decree that our government, or anyone else, give it to us at no cost.

Anytime that anyone says that health care should be free, you should ignore everything else that that person says. She is talking about a different universe, with a different set of fundamental laws.

Continuing with the theme of the third point, present-day USA is an extremely wealthy society, and I believe that we can, at a relatively small cost, provide a limited set of health-care benefits to every human being physically present inside our borders. And I believe that we can do it through government in a way that minimizes transaction costs, making it less costly than the same service provided by the private sector.

And so, Life At The Margin's national health care proposal is this. The federal government would provide a set (Obviously there would be much disagreement about the composition of the set, but that is what political debate is supposed to be for. I never said that my solution is perfect.) of preventative and diagnostic services and treatment for a very small set of very common ailments. It would be provided to anyone who comes to one of the facilities without any type of administrative, bureaucratic red tape. And I don't mean private facilities with government paying the bills. I mean government provides the service, exactly the way the military medical system works, except with a much more limited set of services.

Keeping the set of services limited is absolutely critical. Private insurance and private providers would handle everything else with out government interference. So for example, I think things like yearly physicals, treatment for broken arms and strep throat, and initial diagnosis of any symptom should be provided in a government facility. Things like cancer treatment, pregnancy, type-II diabetes treatment and other catastrophic ailments, as well as rare disease treatment, would be excluded.

While I believe the above framework is the best path for national health care, I have observed enough to know that it is politically unrealistic. The voters want their all-inclusive single-payer system and they want it now; those who helped pay for the elections (i.e. insurance companies) want a return on their investment and they want it for years to come. The compromise is likely to leave most of us wondering what hit us.

This leads me full-circle to mild support of the tax on employee-provided health care.

Here is my reason: Employee-provided health-care is basically stupid***, and a tax on it will discourage it. As a nation we backed into this system because companies were legally restricted from offering employees more money and so had to find other ways to compete for their services; we've stuck with it to our detriment.

Efficient compensation plans are simple compensation plans: All cash across the board. Employees are often forced to join risk pools that include people with much more (or much less) risky lifestyles. Companies should use the money they spend on health insurance to increase salaries and let employees shop for their own health plans.

*Building bridges is also socialism, as is providing national defense.
**I believe that almost everybody intuitively knows this, even if you haven't thought of it as transaction costs before.
***It does make sense for some businesses to have some medical services for employees so that time missed due to illness is minimized.

Sunday, June 28, 2009

Back In Capricornia

Have you ever been in an unfamiliar city of 20 million people, in a taxi with a cabdriver who is guessing? This is where I found myself last weekend in Sao Paulo, Brazil. It took us an hour to go 20 kilometers through traffic, but another 2 hours to find my destination. After a while my driver got out to ask another cabbie where to go, but that guy drove away on him. When I finally had enough, I told him to drop me at a corner, but he successfully made contact with another cabbie, and I listened to them, which gave me confidence. That was a mistake. A half hour later, after talking to a third driver, he finally got me to my friend's apartment.

I felt a little bad for the guy. He seemed like a nice enough fellow, and his lack of competence appeared to eat at him. He offered to charge me zero for the trip so I gave him a little more than half and got on with my life.

The rest of the trip was super-smooth. A friend had told me to allow at least 3 hours at the BsAs airport as there would be long lines to wait in. As it turned out, check-in, security, and immigration took a total of 20 minutes. So I sat in peace in the coffee shop for 2 hours and ran through ideas of what I could do back in the USA. From Sao Paulo back to Buenos Aires, the airport process took 8 minutes in total.

I went to Brazil to see a good friend and meet his fiancee. I found a whole group of wonderfully warm and friendly people. We spent most of our time with good food and wine, chatting in English, Portuguese, and Spanish; pondering such questions as "Why don't more people use helicopters?"

Brazil seems to me a world away from Buenos Aires. Sao Paulo is much more like Chicago or San Francisco than its South American cousin. And the city and its outskirts could easily fool a person into believing he is in southern California.

On the other hand the taxi fiasco would never happen in Buenos Aires. The taxistas here will get from A to B as fast as that machine can possibly do so.

Thursday, June 25, 2009

Obama Said What?

Barack Obama said that he is "appalled and outraged" about the situation in Iran.

Here is the statement from him that got my attention:

"And we deplore the violence against innocent civilians anywhere that it takes place."

Who is he kidding? As commander-in-chief of U.S. armed forces, Mr. Obama is the most prolific purveyor of violence against innocent civilians in the world. As he stands in front of his weak-kneed press corps, American drones drop bombs on Pakistan, killing hundreds of innocents every week. Baghdad and Mogadishu are the two most dangerous cities in the world, primarily due intervention of military forces under Obama's command. And the piles of dead Afghanis grow larger and larger.

How does Obama get away with this? How can he make such a ridiculous statement without someone challenging him? Is he dumb or does he see us all as dumb? I'm starting to wonder. Why do the people who voted for change continue to support this Bush-clone?

Referring to a now-famous recent event in Iraq, he said, "I think that when a young woman gets shot on the street when she gets out of her car, that's a problem."

Mr. President, I have news for you: that kind of thing happens in the United States of America.

Never willing to show themselves as reasonable alternatives to the democrats, prominent members of the republican political party were jumping over themselves to condemn the Iranians more strongly, and to condemn Obama for his lack of belligerence toward Iran.

South Carolina Senator Lindsey Graham said this: "A president of the United States is supposed to lead the free world, not follow it."

Nothing could be further from the truth.

This is important folks; it is the essence of our government's failure to serve its people. It is the source of failure of our people to hold elected politicians accountable. The U.S. president, as well as our legislators, should never lead; they are elected to follow. Kings lead. Dictators lead. We are, in name, a representative democracy. Barack Obama should follow the will of the people. He would if we forced him to.

And if he did follow the people, it is quite possible that our government could serve as an example to others. And if the people of other countries wish to follow our lead, so be it; if not, that is okay as well.

But that is the real issue here. Obama, like all recent U.S. presidents, believes that there is one set of rules for the U.S. and another set for everyone else. But as our economy collapses and our military weakens, that attitude will soon become unenforceable. It is time for the U.S. government to leave the rest of the world alone. Let the people of Iran deal with their problems themselves, and do the same for every other country.

If Barack Obama wants to help the Iranian people, he'll stop the phony rhetoric, stop threatening them. And most importantly and most simply, he will stop the economic siege that the U.S. and our allies have crushed these people with since 1979.

Iran is actually a natural ally of the U.S. and we're hurting ourselves with our belligerence, but we hurt them more. The strategy of the U.S government since 1979 has been to punish the Iranian people because of a childish feud between elite Americans and elite Iranians. And all that this accomplishes is to tighten the grip of tyranny.

I would love it if my government could stand up and make an honest statement in support of the freedom of all people. But it cannot. It is pure hypocrisy, and Obama embarrasses every American when he delivers this drivel. Until we stop killing people, we should shut the hell up.