A real health care crisis - anti-venoms are leaving the market

I am thankful to live in the Northeastern USA, where poisonous animals are rare and pretty much restricted to "pets" bought by adventurous New Englanders. But I was shocked to learn just how many effective anti-venoms are going off the market because of a combination of unprofitability and FDA over-regulation.

Antivenom shortages are a surprisingly common occurrence. The entire state of Arizona ran out of antivenom for scorpion stings after Marilyn Bloom, an envenomation specialist at Arizona State University, retired in 1999. Bloom had been single-handedly making all the scorpion antivenom for state hospitals. Recently, Merck & Co, the only FDA-licensed producer of black widow antivenom, has cut back distribution because of a production shortage of the drug. In a 2007 report, the World Health Organization listed worldwide envenomations as a "neglected public health issue."

A Good Nutshell Explanation of the Sub-Prime Crisis

My big "Eureka" moment on economics came when I realized for all the talk about monetary "policy" and economic "science", all financial systems are based on one thing: psychology. No economy is based on objective measures of value, but rather on the faith of every member of the economy that the things around them have worth. Take away the faith, and the economy collapses, and you may even be returned to the most basic of human economic analyses: "Can I eat that?"

But even this tool has not always been useful in analyzing the current sub-prime mess which is pushing the economy (probably has pushed it) into recession. I understand that many people borrowed money at interest rates they could not repay. What I don't understand is (1) why banks made such stupid bets that were guaranteed to work against them, and (2) why so many people took out mortgages with rates they knew they could never afford. The NYTimes does a good job of explaining some of the complexities.

And it largely explains why the mortgage mess has had such ripple effects. The American home seemed like such a sure bet that a huge portion of the global financial system ended up owning a piece of it. Last summer, many policy makers were hoping that the crisis wouldn’t spread to traditional banks, like Citibank, because they had sold off the underlying mortgages to investors. But it turned out that many banks had also sold complex insurance policies on the mortgage debt. That left them on the hook when homeowners who had taken out a wishful-thinking mortgage could no longer get out of it by flipping their house for a profit.

Many of these bets were not huge, but were so highly leveraged that any losses became magnified. If that $100 million investment I described above were to lose just $1 million of its value, the investor who put up only $1 million would lose everything. That’s why a hedge fund associated with the prestigious Carlyle Group collapsed last week.

Baby Boomers Start Applying for Social Security

Kathleen Casey-Kirschling has become the first baby boomer to apply for social security. She becomes eligible for early retirement benefits in January. This puts the social security crisis back into the forefront of issues that need to be dealt with. If nothing is done, the program will end up with an estimated shortfall of $13.6 trillion. Personally, if I was Ms. Casey-Kirschling, I'd do exactly what she did... grab the money as early as I could to make sure I got something back. Inevitably, we'll either need to raise taxes or reduce benefits.

One of the most interesting quotes from the article is

When you're behind closed doors, and you're not posturing for the public or for the media,'' [Social Security Administration Commissioner] Astrue said, ``they [Democrats and Republicans] say almost word for word the same thing.