Today's photo is from Afghanistan.Soldiers navigate across a creek during a dismounted patrol in the Nerkh Valley, Afghanistan, June 4, 2009. The pictured soldiers are assigned to Battery B, 4th Battalion, 25th Field Artillery Regiment on Forward Operating Base Airborne. Photo credit: Staff Sgt. Richard Roman. (Photo courtesy

The New York Times reports this morning that President Obama is considering burning his trial lawyer allies to get health care reform passed. That is, he said he would support restrictions on medical malpractice lawsuits because he believes it would help reduce health care costs. If Obama really believes cutting lawsuits would save money, he's not as smart as I thought. Doctors have been making this argument for years, as did President George W. Bush, whose administration claimed restricting lawsuits would cut health care costs by $108 billion a year. But there isn't a lick of data to support these claims. The Congressional Budget Office took a look at Bush's assertions and found in 2004 that reducing lawsuit-related costs by 25 or 30 percent would result in only a tiny .4 percent reduction in health care costs. The CBO concluded that the benefits of reducing lawsuits were vastly overblown.

Lawsuits are a natural biproduct of incompetent doctors, who are the source of an inordinate amount of expensive medicine. I've written about this extensively here and here, but just to recap: Preventable medical errors cost the country about $20 billion a year. A tiny number of bad doctors account for the vast majority of malpractice suits. If Obama wants to contain lawsuits and save money, he should propose putting those guys out to pasture. Of course, Obama's lawsuit proposal is designed to court the American Medical Association, which has never seen a bad doctor it couldn't love. Any proposal to weed the incompetents out of the medical profession would probably be a deal breaker.

UPDATE: During his speech on Monday before the AMA convention, Obama talked about cutting back on medical malpractice lawsuits without placing caps on malpractice awards--drawing boos from the crowd. From his prepared speech:

Now, I recognize that it will be hard to make some of these changes [in the health care system] if doctors feel like they are constantly looking over their shoulder for fear of lawsuits. Some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That’s a real issue. And while I’m not advocating caps on malpractice awards which I believe can be unfair to people who’ve been wrongfully harmed, I do think we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines. That’s how we can scale back the excessive defensive medicine reinforcing our current system of more treatment rather than better care.

Science, health, and environmental stories from our other blogs you might have missed from Friday and the weekend:


Just because you, dear reader, spent a relaxing weekend mixing organic mojitos and committing random acts of bluegrass doesn't mean the world put its feet up too. Oh no. Indeed, while you were blissfully perfecting vegan recession recipes Iran snuck off and reelected itself Mahmoud Ahmadinejad. (Or so claim the baton-wielding protestor-beating Iranian government goons.)

In lighter recent news, the Senate decided that fruit-flavored cigarettes and cartoonish tobacco ads aimed at tykes might actually be flamingly bad ideas they could stamp out; hilarity continued in the Gibbsian press room; and we remain curious about prom at a high school where studies include Islamic jihadism, nuclear arms, and cyber-crime.

Speaking of nuclear arms, apparently the Nuclear Regulatory Commission rates highest in federal employee satisfaction. Surprised? You won't be by two of the worst rated: Homeland Security and the Department of Transportation.

Obama and Leverage

The Wall Street Journal describes the financial industry regulatory reform that Barack Obama is expected to unveil this week:

The plan stops short of the complete consolidation of power that some lawmakers have advocated. For example, it will allow several agencies to continue supervising banks. It also won't place specific limits on the size or scope of financial institutions, but it will make it much harder for large companies to be so overleveraged that they threaten the broader economy.

....The plan calls on the Fed to oversee financial institutions, products, or practices that could pose a systemic risk to the economy. It will create a "council" of regulators to monitor this area as well. Government officials believe this arrangement will forestall companies from growing large and overleveraged without substantial federal supervision, as happened, for example, in the case of giant insurer American International Group Inc.

The Fed will likely have the power to set capital and liquidity requirements for the U.S.'s largest financial companies and scour the books of a wide range of firms. It is unclear what enforcement powers the central bank will have; that likely will be a point of contention as lawmakers debate the issue.

I'm OK without complete consolidation.  Box drawing exercises often just ignite turf battles without really accomplishing much.  I'm also OK with not trying to limit the size of financial institutions.  I'm semi-persuaded that it might be a good idea to do this, but I also suspect that it's fanciful to think that it could work.  The limits would have to be draconian, compliance would have to be almost perfect worldwide, counterparty connections would have to be monitored as rigorously as size, and companies would almost certainly be able to figure out ways to evade the regulations.  This seems like a tide that's nearly impossible to hold back.

But leverage — that's critical.  For the past two decades we've not only ignored increasing leverage in every nook and cranny of the financial world, we've made it worse.  LTCM blew up in 1998 because of astronomical leverage and afterward Alan Greenspan produced a report saying we should "encourage" financial institutions to limit their leverage.  Result: nothing.  In fact, things got worse.  Basel II followed Basel I and loosened capital adequacy requirements.  In 2004 the SEC allowed big Wall Street investment banks to increase their leverage ratios.  Off balance sheet leverage skyrocketed with no pushback from anyone.  At the consumer level, zero down mortgages became common.  The shadow banking system went almost entirely unregulated.  All this plus a tsunami of cheap money made disaster almost inevitable.

If Obama's plan truly addresses leverage — everywhere and in all its guises — and if he can persuade the rest of the world to follow suit, he will have really accomplished something.  It's not the only thing we need to do, but it's the most important.  When we get the details of his proposals to regulate leverage, that alone will tell us most of what we need to know about whether he's really serious about taking on Wall Street.

Yesterday the Associated Press announced that in July it will begin syndicating investigative stories for its 1,500 member newspapers from four independent news shops: the Center for Public Integrity, the Center for Investigative Reporting, ProPublica, and the Investigative Reporting Workshop at American University. 

This is good news:

Investigative, independent, nonprofit journalism may be the brightest light journalism has going for it right now. ProPublica and the Investigative Workshop didn't exist two years ago, and CIR is doubling its size. Mother Jones has also, thanks to your loyal support, flourished as a newsmaker. That the readers of the newspaper, how-many-ever of them are left, will be reading significant stories that aren't easy to come by, is excellent indeed.

This is also bad news:

Or maybe just a confirmation of what we already knew: newspapers don't have anyone investigating much of anything anymore. Which means that investigative shops supported by people like you equal all the stories we're going to get. Even standout local newspaper reporting, like the Chauncey Bailey Project, was made possible via a collaborative, nonprofit effort. And with the AP deal newspapers are off the hook, since four indy orgs will dig the dirt for them.

Still, of the four news outlets supplying the AP, ProPublica has 32 reporters (plus its "citizen journalists" project), the Center for Public Integrity has 18 writers and fellows, CIR has 10 reporters (as of now), and the American University project uses mostly undergrads and graduate student stories. That's 60 full-time journalists tracking and scouring for stories for 1,500 newspapers and their readers. Which, of course, is 60 more than we had last week.

Right now signs are pointing toward independent media as the savior of an entire industry, of a fourth estate that is meant to hold government, industry, everyone, accountable. To do so nonprofits need more than the usual shoestring, they need longevity, and long leashes. Because investigative reporting is hard, confounding, and critical work, just ask newspapers.

Factlet of the Day

From a New York Times Magazine article about gigantic data centers and the power it takes to run them:

While it once took 30 to 50 years for electricity costs to match the cost of the server itself, the electricity on a low-end server will now exceed the server cost itself in less than four years — which is why the geography of the cloud has migrated to lower-rate areas.

According to Jonathan Koomey, a scientist at Lawrence Berkeley National Laboratory, the internet consumes 1 to 2 percent of the world’s electricity.

Yesterday I posted a chart showing that as Iran's Interior Ministry announced election results throughout the day, the winning percentage for Mahmoud Ahmadinejad had stayed almost eerily constant.  It seemed likely that in a genuine election there would have been a little more variation, so this looked like a piece of evidence that the vote count had been rigged.

It still seems likely that the vote was rigged, but the steady vote count apparently doesn't prove anything one way or the other.  Nate Silver plotted the 2008 U.S. election results using waves of states in alphabetical order, and he came up with an almost dead straight line, just like the Iranian results.  One of Andrew Sullivan's readers did the same with the results as announced every half hour through the night, and again the line was as straight as a laser.  So this is apparently a null piece of evidence.

But now I'm curious.  The Sullivan graph shows that by 7:30 pm Eastern time, when you have two data points, you could predict the final popular vote in the 2008 election with about 99% accuracy.  Question: would you get the same results if you plotted the last five or six elections?  If so, it means that most years we'll know with almost complete certainty who the winner is by 7:30 pm, exit polls be damned.  Can this really be true?

New York, New York

In a couple of weeks I'll be taking a few days off and jetting to New York City for a short vacation.  Marian has never been before, and neither has half of the couple we're going with.  So far, the Circle Line tour and the Empire State building are on the agenda, as well as an afternoon at Carnegie Hall, where a friend of ours is singing.  Anybody have other suggestions?  Both obvious and nonobvious ones are OK.  We're staying at a place on 55th Street between 6th and 7th Avenues, so restaurant suggestions in the general area would be great too.

Marian constructed our San Francisco weekend a couple of months ago out of suggestions from commenters, which is why I'm going back to the commentariat for help again.  You guys were great with Bay Area recommendations.

Also, anyone know the best place online to get Broadway show tickets?

Getting Out the Vote

Alex Moskalyuk reviews Yes! 50 Scientifically Proven Ways to Be Persuasive and offers up this summary of #15:

Labeling people into a social group tends to increase their participation ratio. A group of people was interviewed regarding their voting patterns. Half of them were told that based on their response criteria, they were very likely to vote, since they were deemed to be more politically active. Later on the election day that specific half did indeed turn up a participation rate that was 15% higher than participation of the control group.

Hmmm.  This sounds pretty handy as sort of the mirror image of a push poll.  (1) Identify people likely to vote for your guy, (2) call them up and ask them to participate in a survey because they're "politically active," (3) watch them show up to the polls at a higher rate than normal.  Result: as long as you've done (1) reasonably well, instant boost for your candidate.  Campaign managers take note.