Natural Resources: More Harm than Good

The NY Times is doing a three-part series on how natural resource wealth contributes to conflict and inhibits growth in developing countries. This topic was a major theme in Paul Collier's book The Bottom Billion (I wrote about this book on my other short-lived blog on human rights but I realize I need to read it again to brush up on its main points). The first article was in this Sunday's Times and I think this is the main point:

This is Africa's resource curse: The wealth is unearthed by the poor, controlled by the strong, then sold to a world largely oblivious of its origins.

In the story the Times tells, one unit of the army controls a tin mine - tin is a major component of computers and mobile phones - and extracts "taxes" from all involved in the trade. The army is unable to control this unit, in part because of ongoing battles between a Tutsi rebel group, the Congolese Army, and Hutu militias left over from the Rwandan genocide.

There are a number of lessons to learn from this article. First, and probably most important is that "conflict diamonds" get the attention, but the truth is that there are many more conflict resources that we use unaware. Many things that we buy finance violence and suffering in the places where the resource comes from. The solution isn't necessarily to stop buying products with resources from the Congo, but to at least be aware that it is happening and demand change.

The second point is the role of multinational corporations. In this example, there is a multinational company that has rights to the mine, but are being prevented from accessing the mine because of the army unit. The multinational company of course says they were going to build schools and power stations and in other ways give back to the region. The problem is that in the past, these corporations haven't given back to the country. Instead, they have taken the resources out, fought to pay as little in taxes as possible, made themselves rich off the resource as the country continues to suffer in extreme poverty. The US government has a long history of supporting corporations who see nothing wrong with pillaging resources from developing countries. In fact our history with the Congo in particular is a testament to this.

The third point that comes out of this article is how conflicts that are ignored can continue to breed violence for decades as long as we continue to do very little to actually stabilize these situations. So much of the violence in the Congo stems from the continued presence of the Hutu militias that carried out the genocide in Rwanda in 1994. Bill Clinton - and Hillary - talk about their regret for turning their back on that genocide. But their talk gives the impression that the event is over, when in fact we are still seeing its ongoing effects. If they really cared, they would have made sure this conflict was actually over before apologizing.

It is depressing beyond mention to see countries so rich in resources and beauty - the Virunga National Park is one of the most beautiful and diverse in the world but the region is too unstable for tourism - yet instead of getting rich and growing because of these resources, they remain in a state of poverty and conflict. Internal groups like the military unit in this story bear some of the blame. But so does a capitalist system that cares way more about profit than it does human rights and decency and an international governmental system that can do little to help those that suffer the most. Then again, you can't expect businesses to care, or international organizations to mobilize, about these things if the people that support them don't care either.

Auto Bailout? *Sigh*

I must say, I am surprised that one of Obama's first proposals is a bailout of the American auto industry. Not only did it seem to come out of nowhere, it also feels ill-advised. I guess I can see that the Democrats want to show that they can provide bailouts for blue collar workers - not just the white collar jobs in the financial sector. At the same time, it really seems like we have been bailing out the American auto industry for far too long. They have a history of building cars that don't last, they seem incapable of staying ahead of trends, and worse of all resist calls to improve fuel efficiency and move towards alternate fuel technologies and only do so after other firms (mostly Honda and Toyota) have beat them to the punch.

Instead, I really think we need to let these companies fail. In their place we could see American car manufacturers that put innovation - and greener technology - first. Now, if the Democrats want to allow for a soft landing of the car companies, and provide support for those who will be laid off, I can get behind that. In fact, maybe they could provide tax breaks for new American auto start-ups that will buy the old manufacturing plants and hire the former workers (this idea is definitely off the cuff - so it might prove unrealistic for new companies to start because of high fixed costs).

I really think this is where Democrats get a bad name. We want to help those of moderate or lower incomes, but we tend to choose policies that are more populist and less economic - policies that might help in the short run, but really hurt in the long run. This makes little sense from an efficiency standpoint and furthermore, it isn't the only option - or necessarily the best option - from a fairness standpoint. I know I won't agree with the Obama administration on everything, but I thought I would make it farther than this.

Note: Although I definitely have my favorite columnists, sometimes I feel like a hack by only printing their opinions instead of mine. It's hard though when they make the point so much better. Anyway, here is David Brooks' take on the auto bailout:

But the larger principle is over the nature of America’s political system. Is this country going to slide into progressive corporatism, a merger of corporate and federal power that will inevitably stifle competition, empower corporate and federal bureaucrats and protect entrenched interests? Or is the U.S. going to stick with its historic model: Helping workers weather the storms of a dynamic economy, but preserving the dynamism that is the core of the country’s success.

Navy I Wear to Work

A while ago I read The Woman at the Washington Zoo, which is a collection of columns by Marjorie Williams, a Washington Post columnist that died of cancer in 2005 three days after her 47th birthday. The title of the book refers to a poem by Randall Jarrell about women hiding part of their true selves to remain under the radar, and thereby achieve some success, in the professional world.

Williams wrote political columns as well as some excellent political profiles, including Jeb Bush, the Clinton and Gore White House, and Barbara Bush. Some of my favorite columns from the book are about politics and modern feminism. The columns are nuanced and very intelligent. Her writing was objective, and sometimes stood against the liberal opinions at the time. The strongest example of this is her writings during the Clinton sex scandal; she seemed to be one of the few who was criticizing Clinton by describing how this was a set back for feminism and sexual harassment in the workplace.

Williams' obvious talents are sorely missed, especially when comparing her to current columnists. Maureen Dowd for example also writes about feminism. But Dowd rarely seems as objective, thoughtful, or capable of nuance. Gail Collins and Judith Warner are both pretty good, but there is something missing in their columns as well.

By the end of the book you are heartbroken, not only because you wish she was still alive and writing, but because of what she went through. You feel for her family, husband and two children, who miss her far more than her readers ever can. And you feel for her because of how much of her rich life she will miss. So that politics is never ignored, she makes sure to show readers how medicine can do wonders, as well as where it falls short. Her treatment was so great because of her connections, and she reminds her readers that most people wouldn't get treatment half as good. So while we marvel at how much extra time she managed, we see that more needs to be done for those without her resources.

Read this book for her sharp writing and deep insights. Read it because you might not find a better columnist or political profile journalist for a long time. And read it because of how close you feel to her before it ends. I miss her and I didn't even know about her while she was alive.

Hillary is Back

Remember when Hillary was getting as much news as Obama? And there was all the talk about whether she would be Obama's VP and if not whether she would campaign for him? Then in a few weeks, it didn't seem to matter. The country easily made the transition from Obama v. Hillary to Obama v. McCain.

Well, now Hillary is back in the news and apparently she is the front-runner for Secretary of State. When I first heard this, I was torn. I felt she had exaggerated her foreign policy experience during the campaign and so I wondered what made her qualified to head the State Department. At the same time, even though I think she is incredibly smart, I think this would be a better position than Supreme Court Justice.

As for the other contenders - I am surprised no one is mentioning Bill Richardson anymore. Maybe Timothy Noah convinced everyone else that it would be a bad choice. And I agree with Gail Collins that John Kerry would not be a very good choice. Frankly, I'm not sure what Kerry would be good for, except to stay on in the Senate. And nobody seems to be mentioning Edwards anymore - all because of an affair.

I think though that Hillary would be a good choice. Her role as first lady did include much time traveling as a dignitary of the US, which would be a large part of her role as Secretary of State. Where I think she exaggerated her experience was her level of involvement in decision-making. Here she would get that chance. The only worry is whether Obama could control her. I would like to think that in this role, it would be easier than if she had been VP.

Congo: What Happened While We Were Watching the Election

The violence and tensions in the Congo, where tens of thousands of the most violent rapes have been happening, has escalated recently. The Tutsi rebels have advanced on major cities, sending as many as 250,000 civilians fleeing their homes. Right now, African leaders are working to diffuse the situation, while western leaders again don't give this the attention it deserves. And I too must confess my lack of attention recently.

While the lack of awareness about this issue is disheartening as always, the most depressing aspect is the peacekeepers. The largest UN peacekeeping mission is in the Congo, but they have been unable to keep any sort of peace or protect anyone. Protesters, fed up with the UN's inability to protect them, were throwing rocks at the UN.

I don't blame them for their frustration. In fact, their anger is my anger. That so many people's lives are continuously put in danger with only minor efforts to alleviate the situation, makes me want to throw rocks with them. Unfortunately, it isn't the fault of the UN, but of the strong member states in the UN that put such a paltry peacekeeping mission in a place with such extreme violence. It is the deficiency of justice in the real world that you can never really express your full anger to the people who are truly responsible for your situation.

Georgia; The Truth Comes Out

The whole situation between Georgia and Russia scares the hell out of me. Not because I am afraid of another cold war. That just seems ridiculous (despite how the cable news channels played that up during the hostilities). Instead, it is the slow access to good information.

This New York Times article provides some evidence that it was Georgia who launched an unprovoked, or at least disproportionate, shelling on villages in South Ossetia. It was that attack - after a cease fire - that provoked Russia's response. This isn't the first article to show Georgia as the aggressor, but it provides more evidence than others I have seen.

Even now though, there isn't complete evidence to say this conclusively. And that is what scares me. In this situation, with little evidence, where both sides have a history of deception and exaggeration, the only option seems to be to trust your ally. That is a significant problem when your ally is just as untrustworthy as your enemy (if you can really call Russia an enemy - our foreign policy still operates that way, but I am not so sure if we should).

What is even worse is that I don't get the impression that the American public is interested in considering the nuance in this situation nor is it patient enough to wait for good information to come out. This pushes our foreign policy in a distinct direction. The job of the president therefore is to be more calm than the people, wait for good information if possible, but always understand that your allies won't always tell you the truth or make good decisions.

Why Aren't They All Religious Left?

From the archives:

Somehow, the following post never actually got posted. But I couldn't let it rest, so here it is. The post is about Huckabee - remember him? He was a candidate for president in the Republican primaries. I know, it seems like such a long time ago. Anyway...

I don't talk about religion on here much, but when I see statements like the following (from this NY Times article), I have to say something.

Since Mr. Huckabee’s success in Iowa, however, his campaign has faced a barrage of attacks on his conservative credentials. Rush Limbaugh has accused him of "class warfare." The Wall Street Journal editorial page has called him "religious left." And his Republican rivals have escalated their criticism. In a debate on Thursday, Mr. Thompson called Mr. Huckabee a "Christian leader" who would support "liberal economic policies" and "liberal foreign policies."

Just to give a little context, the people quoted above are criticizing Huckabee's populist policies, i.e. policies to help the poor and lower middle class. This type of talk baffles me almost as much as it angers me. How can a religious person criticize another religious person for wanting to help the poor? Which Bible are these people reading that suggests free market principles are what God supports and the poor should be left to fend for themselves? Fortunately, Huckabee's supporters do a pretty good job at rising to the defense:

"Can you imagine Jesus ignoring the plight of the disenfranchised and downtrodden while going after the abortionist?" Mr. Scarborough wrote on the conservative Web site WorldNetDaily.com.

Christian Conservative policy, speaking from a religious doctrine point of view, has long strayed from what seems to me to be the message of the New Testament's teachings. By saying this, I mean to argue with Christians using what they say is the basis for their beliefs. I encourage anyone to read the Gospels and tell me why we shouldn't do more to help those in need.

My hope is that Huckabee can use his appeal to shake up Christian Conservatives. There is some evidence that this is already happening. Maybe sometime soon, the Religious Right can get back their soul and focus on helping the poor.

Better Not Forget Samantha Power

The New York Times has a feature that gives short bios of all the people in Obama's inner circle and candidates for high level positions in his administration. Well, let's hope it's not actually all the people. There is at least one important name missing from this list - Samantha Power!

I really don't want Obama to make an early signal that he doesn't really care much about human rights. I don't want to lose all the good feelings I have so quickly. During the campaign, Obama gave signals that he supports human rights; in the last debate (or was it the second debate?), he made it clear that he thought the US should intervene in genocides / ethnic cleansing. The talk was good, now he needs to show it by giving Samantha Power a high level position. Sure, there are others he could appoint. But Power was a close adviser to Senator Obama and continued on in his campaign. She resigned during the primaries because she called Hillary Clinton a monster. Enough time has passed. President-elect Obama needs to bring her back to the inner circle.

New Conservative Path?

As we continue to digest this election, one of the themes will be the next steps for the Republican Party. Commentators are asking what the party has to change if it wants to get back into power. Generally I wouldn't care about this question so much, because I believe that the most that would happen would be a rebranding of the message and a slight focus on different issues. But in the end, I don't expect much change in the overall philosophy.

David Brooks however gave me something to think about in a column he wrote back in May about the conservative movement in Britain. He describes how it changed after a long period of Tory power. Part of the column talks about the movement's focus on reforming a declining social fabric - which I don't really agree with. What I do appreciate, and hope filters here to the US is the following:

This has led to a lot of talk about community, relationships, civic engagement and social responsibility. Danny Kruger, a special adviser to Cameron, wrote a much-discussed pamphlet, “On Fraternity.” These conservatives are not trying to improve the souls of citizens. They’re trying to use government to foster dense social bonds.

They want voters to think of the Tories as the party of society while Labor is the party of the state. They want the country to see the Tories as the party of decentralized organic networks and the Laborites as the party of top-down mechanistic control.

As such, the Conservative Party has spent a lot of time thinking about how government should connect with citizens. Basically, everything should be smaller, decentralized and interactive. They want a greater variety of schools, with local and parental control. They want to reverse the trend toward big central hospitals. Health care, Cameron says, is as much about regular long-term care as major surgery, and patients should have the power to construct relationships with caretakers, pharmacists and local facilities.

What I like about this is that the debate moves from whether we are part of a social community and therefore need to help each other, to how best to accomplish this. My problem with the argument for much greater individual economic liberty is that underlying that belief is the assumption that we do not take care of those who cannot take care of themselves.

I don't have a lot of faith that the American conservative movement will buy into this. I think there is too much individualism spirit in conservatives here. But if it does, I would look forward to the new debates - debates over how best to help each other, instead of whether we should.

No More History Except to Make It

A few weeks ago I discovered American Experience - the PBS series - on Netflix. At risk of further exposing how much of a geek I am, I can say I was ridiculously excited. Right away I rented the episodes on LBJ and Jimmy Carter, with RFK, Ronald Reagan, George HW Bush and Martin Luther King not far behind. Since the election though, my interest has dropped off. I realize at this moment I am much less interested in spending my time in the past. I am less interested in learning about history. I want to live in this moment. I want to be a part of this history. These feelings are a direct result of the hope I feel with an Obama presidency on the way.

An Active Part of History

I didn't really expect to feel proud of volunteering on Obama's campaign. At the time, I felt I needed to do it because the country needed an Obama Presidency so badly. I did it because I had the time and because I knew I would feel guilty if Obama lost and I hadn't done all I could to help.

But I also did it because I was truly inspired by Barack Obama. I think the country needed a Gore presidency in 2000 and a Kerry presidency in 2004. But I didn't volunteer for any of them. And I find it unlikely that I would have volunteered for Hillary Clinton - I would have voted for her, but not campaigned for her.

My volunteer activities only spanned the last few weeks. But during that time I called Obama supporters in New York state asking them to volunteer on the weekend, I called voters in swing states asking who they were going to vote for and hoping to persuade undecided voters to support Obama, I entered data, and during the last four days of the campaign I ran a phone bank in Staten Island, helped with training in Harlem (on Tuesday), and when I had free time I called Obama supporters reminding them to vote.

So as I savor this victory, I know that I contributed, along with many thousands of others, to this victory. This historic moment, this time of real change and hope, came about because 65 million people (53 percent) voted for Barack Obama, but also because of the thousands of people like me who made phone calls, went door to door in swing states, and entered data.

In looking back at this time, I realize I met many great people who are committed to Democratic (liberal) principles and the democratic process in general. I also learned how to be flexible under pressure - to change and improvise when needed. And finally, I learned the pride you can feel by being an active part of history.

Joe the Independent

Now that the Democrats don't need Lieberman - with their strong majority in the Senate (not counting the three races still to be decided) - their is talk of punishing him for his support of John McCain. I find this ridiculous. Lieberman and McCain are good friends and kindred spirits in the Senate - both are moderates and have a history of taking stands against their party. Add on top of that the lack of support Lieberman received from his Senate colleagues when he lost the primary in his Senate race, and it is obvious why he supported McCain.

Don't get me wrong, I realize that Lieberman is definitely more to the right than the rest of the party and can be a thorn in the party's side. And he made some really stupid statements on the campaign trail for McCain - using fear tactics on foreign policy that seemed straight out of the Republican playbook. And he spoke at the Republican National Convention. Okay, I don't have much love for him right now either.

In the end though, I don't think a party should punish someone for a position or person they support. What matters more is votes. And if punishing Lieberman will make him more likely to vote with Republicans on key issues, then I think it is a bad idea. Democrats need to realize that despite large majorities, they will still need to build coalitions. Part of building coalitions is having a big tent party - one that accepts those who don't toe the party line on all issues (the other part is knowing how to court those from the other party - including those who are not treated well by their party).

It may not seem like it right now, but Democrats need Joe Lieberman. How they handle this will be a good indicator of how they plan to handle things for the next two years.

More on the Election

I am still trying to get out all that I feel about this election. Right now, the joy of the victory is giving way to an extreme optimism for the next four (hopefully eight) years. Although part of the excitement is the real change we are getting from Bush and Republican policies, I also know it goes beyond that. I wouldn't be this excited if it had been Hillary or Edwards (or even Richardson). I think Obama's election is transformative - or at least has the ability to be. Not just because it changes the way the world thinks about us, but because it changes the way we think about ourselves.

One of the best parts of Obama's campaign is that it empowered his supporters and asked us to have an active role. And so I hope that the volunteer energy that Obama created doesn't end with the election. We have real problems in this country that can't be fixed through higher taxes alone. On September 11, 2008, both Obama and McCain came to New York for the memorial event and spoke at Columbia University later that night. They both talked about creating a renewed interest in public service. President-Elect Obama's new website, change.gov, has a feature on it called America Serves that describes his plans for increasing volunteer work. I seriously hope that this is a major push of his administration.

The bigger challenge though will not be encouraging more volunteers, it will be forcing the country to sacrifice a bit more. Recently, we have been told to consume our way out of recessions and we have been given endless credit to do so. We are encouraged to live way beyond our means - in both financial and environmental terms. This has to stop. We need to borrow less or else risk another recession like the one we are in now. We need to use less oil if we truly hope to have some independence from the affairs of the Middle East. And we need to consume less, while we also change our sources of energy, if we hope to have an impact on global warming.

I do believe that we elected the right candidate for encouraging more volunteering. I don't know if there is any politician who will seriously ask people to sacrifice. Hopefully I am proved wrong.

Would Wallace Have Voted for Obama?

Peggy Wallace Kennedy, the daughter of George C. Wallace and Lurleen Wallace, who both were governors of Alabama, wrote a really good commentary on the CNN website. Basically, her piece says that her father - the most famous advocate for segregation - would have voted for Obama. For those of us who don't know the end of Wallace's story (how he renounced his former positions), the commentary is uplifting.

The Cabinet

I keep thinking that sometime soon I am going to take a break and read about politics less obsessively. It never happens though. Oh well. Now that the election is over, everyone is talking about who President-elect Obama will choose for his administration. I don't have too much to contribute to this - at least at the moment. Basically, I do think he should reach across the aisle - at least for symbolic reasons. And I don't want to see too many Clinton people, although that might be hard to avoid.

As for specifics, I would have thought Bill Richardson would be a great choice for Secretary of State, but Timothy Noah begs to differ. His one short paragraph about why Richardson is a bad choice makes me realize I didn't know as much about him as I should have and therefore slightly embarrassed for supporting him at the beginning of the primaries. Timothy Noah may be way off, but I don't know enough even to be able to defend Richardson. I agree that we don't want Summers as Treasury Secretary, mostly because of how bad of a job he did at Harvard. I think Arnold though would be a good choice for EPA.

On McCain

I want to write a longer post about McCain later, but for now, I want to add my thoughts about his campaign. The bottom line is that I lost respect for him as the campaign wore on. Partly, it is because of the level of his negativity along with the elements he chose to focus on. All of it seemed so disingenuous - so unlike him. Spending so much time on Ayers was absurd, and calling Obama a redistributionist (for a tax policy not so different from one McCain from four years ago would have supported) was something I wouldn't have expected from him. He also chose to focus on symbols and culture wars (Joe the Plumber and Sarah Palin) instead of substance.

Worse though is what he allowed the campaign to do to his positions. So many of us hoped that McCain would change his party. For the past four years, McCain has moved to the right, probably with the intention of winning the Republican nomination. But even after winning the nomination, he continued to move to the right and appeal to the Republican base. So instead of changing his party, McCain let the party change him (Brooks covers this theme here, and of course he does a better job than I do). The Republican platform's immigration policy - so different from McCain's previous position, is far to the right. His tax policy is no different from Bush's - including tax cuts for the very wealthy. Even his global warming stance, which admits warming exists, shows disdain for anyone with even the slightest concern over nuclear power.

When I look back on the way the campaign moved through the final months, I see a candidate I don't recognize from the one I admired. Last night, at the concession speech, we saw part of the old candidate again (many people independently said that to me today). The old McCain was honest, gracious, and tough but fair. It's too bad we only saw that McCain after the race. I might say things would have been different if McCain had been able to be himself during the race, but I'm not so sure. At the very least though, I would have respected him far more.

Iran and Venezuela

Maybe it is early still, but I really think two things are going to change Iran's power in negotiations with us. First, Ahmadinejad will no longer have President Bush to take attention away from Iran's failed economy and as the reason he needs to pursue nuclear technology. Secondly, as gas prices decline, so will their revenue. This will of course make their economic situation worse as well as exacerbating the impact of the sanctions. I think we can look for a President Obama to have a much stronger position if / when he negotiates with Iran.

These same reasons might weaken Chavez in Venezuela.

President Barack Obama. Amazing

I am still trying to process the election results and come down from the excitement. Actually, I don't want to come down too much. To be honest, I was anxious for weeks, and it got worse the last few days. I didn't realize how bad I wanted Obama to win. It went way beyond how I felt in 2000 and 2004.

This is the reason I volunteered for the Obama campaign. I knew that if I didn't work the phone banks and enter data, I would blame myself if he lost. It's not that my ego is that big. I just knew that I couldn't actually be upset if he had lost and I hadn't done a thing to help. Volunteering also helped me keep my mind busy as I wondered if the candidate I wanted to be president so badly could actually win.

The fact is that from the beginning I believed this country could elect a black president. At first that belief was just based on faith in our country. But seeing him win the primary in Iowa confirmed this belief. Towards the end though, my fear of not getting what I thought we needed so badly blinded my faith.

The voters yesterday showed that my early faith was not mistaken. And the rest of the world got the message as well. For two elections, the world saw the US elect a president who seems unintelligent and needlessly aggressive and condescending. They assumed we were a country of fools who don't share the values of the rest of the world. After last night, they saw that we can make some bad decisions, but we can also make some truly amazing decisions.

Health Care

I went to an amazing policy breakfast the other day on health care. It was hosted by the Maxwell School and Public Agenda and featured Drew Altman. Because of the breakfast, I am now a huge fan of Public Agenda (a group I knew nothing of before this) and I expect I will be paying more attention to them in the future.

Basically, the breakfast did a great job of highlighting the real differences between McCain and Obama's health care philosophies (and by extension the difference between Republicans and Democrats) - which is different than talking about their plans. Neither are likely to have their actual plans passed, so understanding their philosophies is more important.

Before I get into that though, Drew Altman made three important points that I want to mention. First, he said surveys show that people are more concerned with making health care more affordable - with being able to pay their bills when they receive health coverage. Percent of people with health insurance isn't as big a concern (except how an inability to afford coverage would affect them).

Secondly, he said that what we have seen recently is that as costs are increasing, health plans are charging higher deductibles and providing skimpier coverage. This is likely to continue unless something major changes.

Finally, he talked about what he thought was mostly likely to happen. He thought it somewhat unlikely that there would be an immediate major shift in health care policy. Instead, he predicted small changes that would build on the Children's Health Insurance Program or maybe a bigger program that moved towards universal coverage but would be phased-in if the economy improved.

Now, the major differences between the parties on health care:

Republicans:
-Want to move away from the employer-based system
-Believe a market-based approach can make health care more affordable
-Want less regulation on coverage
-If people have control over their coverage and knowledge of the real costs of their care, they will make better decisions and waste less money (health savings accounts are a move in this direction)

Democrats:
-Want to build on the employer-based system
-Want to move towards universal coverage
-Believe we need to regulate levels of coverage
-Buying health care is extremely complicated and public cannot make decisions about coverage

After hearing this, I think I came down on the side of Democrats. First, I think health coverage is a right not a privilege. Also, while I think we definitely need to do what we can to make health care more affordable, I don't know that I trust the market for this - especially if there is less regulation. Choosing health care coverage is a really complicated decision that involves many factors, some of which the buyer doesn't even know to consider. People will have to make decisions about deductible amounts, choice of doctors, and detailed levels of coverage for treatments. It's not that I think the public is stupid, but that there is naturally information asymmetry that the insurance companies can and do exploit.

Here is where my mind splits though. Above I said I think we need to make health care more affordable. I don't really trust government to be able to do this. The problem is that markets are often more efficient (not always, but often) but definitely not fair. Since so much of health care is about fairness (ie ensuring everyone has adequate coverage), markets cannot be trusted. But without some market pressure, we won't be able to afford to provide coverage for everyone.

I obviously need to do some more thinking about this. I think there is a lot of bad information out there (one-sided pieces like Michael Moore's Sicko for example), and I have not found much good information aside from this breakfast panel. There are some serious questions out there that I haven't heard good answers to yet, like: What are the real strengths and weaknesses of some of Europe's single-payer universal coverage systems? How much do they cost? Why are there extreme variations in costs between states that don't match variations in outcomes?

This is going to be a huge issue no matter who is elected. Costs are rising rapidly and for such an advanced country we have too many people who lack coverage. I will definitely be coming back to this issue. (After all, I didn't even touch on the lack of access to preventative medicine for people without coverage or the overall health of our country.) This is all I've got for now though.

What You Need to Know About Oil

If you are curious about why oil prices have changed so much recently (or even if you think you know), read this article in the Times. If you don't have time, I have highlighted the main points below. If you don't even have time for that, then I would send you away with this main point: Current capacity for the production of oil is flattening while global demand is rapidly increasing. Because of oil futures speculators, prices will fluctuate, but in the long term, prices will rise. We need to decrease our consumption and find alternate sources of energy. The author believes (as does Thomas Friedman, and as do I) that we should create an artificial price floor (through taxes) to accomplish this because every time prices decrease, we forget and we stop conserving.

Those Damn Speculators

According to skeptics like George Soros and Michael Masters, a hedge-fund operator, the only thing wrong with the oil market is the market itself. Speculators, they say, drove the price away from its "fundamental" value; worse, a new breed of institutional investor has been buying oil futures, hoarding the supply.

On the other hand:

Of course, capitalism demands that people, or at least investors, make bets. That is how resources are allocated and money is invested where it is needed; high prices communicate scarcity. You could even say the oil market has performed a vital service to the country by telegraphing the need to conserve and to develop alternative supplies.

Recent History of Oil Prices:

The reason that the history of oil is basically one of attempted price fixing is that, as technology has improved, drilling costs have fallen, meaning that prices have been under near-continuous downward pressure. Like most commodities, oil should sell for whatever the cost of producing one additional unit is — in this case, one more barrel. Economists call this the "marginal" cost. If someone charges much more than that, a competitor can offer to sell it more cheaply.

It’s only when oil is scarce that things become interesting. If there isn’t enough to go around, then the marginal cost no longer matters because, at the margin, there is no more oil to produce. Under such conditions, oil will rise to the price at which people stop using it — either because they drive less or because they find another energy source. This is called the price of demand destruction. Think of that as the upper bound on the price. With the twin shocks of the ’70s — the Arab embargo and the Iranian revolution — oil did reach an upper bound, jumping tenfold to $40 a barrel in 1981. Demand quickly collapsed, and the price eventually sank all the way back to the marginal cost, $12.

Low prices were good news for consumers but a mixed blessing for society. Since it takes time for oil companies, as well as consumers, to react to price changes, markets tend to respond with a perilous lag. In the ’80s, oil companies were spending billions looking for oil, and Detroit was retooling its plants to make smaller cars, even as the price of oil was collapsing.

In the mid-1980s the oil industry suffered a terrible slump. Thousands of petroleum engineers were fired or left the business. Congress lost interest in energy conservation, and projects to develop shale oil and other alternatives were dropped. In Europe, high fuel taxes meant that people still had an incentive to conserve. In America, families became unwilling to ride in anything but trucks.

Even as oil prices rose in this decade, big oil companies — still responding to the price signal of an earlier period — plowed most of their cash flow into dividends and stock repurchases rather than risk it on exploration. State oil companies overseas, like Saudi Arabia’s, which control four-fifths of the world’s reserves, refused to make the investment to develop their fields to full potential for fear of flooding the market (another reaction to low prices). For similar reasons, there was a lull in building critically needed refineries.

By the time oil companies woke up to the consequences of low prices, it was in some sense too late. There was "a missing generation of engineers," according to Daniel Yergin, the chairman of Cambridge Energy Research Associates and the author of "The Prize," a history of the oil industry. There was also a lack of drilling rigs and men to work them. Drilling costs soared, and equipment was often unavailable. Also, countries where oil is abundant, like Russia and Venezuela, were increasingly chauvinistic and hostile to foreign operators. Civil unrest set back production in Nigeria.

By the middle of this decade, various big oil regions — Mexico, Nigeria, the North Sea, Colombia, Venezuela — were experiencing production declines.

The lesson here is that a high price of oil is the only thing that forces us to conserve and invest in alternate energy. Hence the need for an artificial price floor.

Also, if you think compressed natural gas (CNG) is the solution to our problems, read this article. Basically, if we really want to decrease our dependence on foreign oil and fight global warming, we need to decrease our consumption, not change the form of our consumption.