25 Dead in W. Virginia Coal Mine Accident

Police, Emergency, and Concerned Citizens

Monday, April 4, 2010, in West Virginia, at least 25 coal miners were killed and another four remain unaccounted for in a methane gas explosion in a coal mine owned by Massey Energy. As reported in the NY Times, “In the past two months, miners had been evacuated three times from the Upper Big Branch due to dangerously high methane levels, according to two miners who asked for anonymity for fear of losing their jobs. … the disaster has raised new questions about Massey’s attention to safety under the leadership of its pugnacious chief executive, Don L. Blankenship, and also why stricter federal laws, put into effect after a mining disaster in 2006, failed to prevent another tragedy.”

Is this a pattern of behavior? Does it establish a callous attitude or criminal intent?

In January, Charleston, W. Virginia, Robert F. Kennedy, Jr. debated Massey CEO Don Blankenship.

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Kennedy argued again and again that the coal industry is indirectly subsidized by society. “Every single waterway in our country is contaminated with mercury,” and 70 percent of it is from coal-burning power plants, he said. (click here). Kennedy concluded by pointing out Massey’s own reports of 12,900 violations of the federal Clean Water Act in a single year, and asked, “Is it possible to do mountaintop removal mining without violating the Clean Water Act?” (here). Blankenship shrugged and responded that complying with regulations is too expensive.

We need to do is transform the coal industry into a wind and solar industry.

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Vermont Yankee – Leaks Cesium

The latest news about Vermont Yankee – The leak of Cesium-137 is not a new leak. From VermontBiz.com (click here) or the Burlington Free Press (here).

“In a statement issued yesterday, Vermont Yankee said that recent news reports have focused less on the tritium resolution and more on the other isotopes found in the soil at the plant. Despite the recent media coverage, Vermont Yankee said the presence of Cesium-137 and other radionuclides found in the soil at the plant is not new news. During the first week of March, the company shared soil sample results with the Vermont Department of Health indicating the existence of cesium in the soil.”

What’s worse than a nuclear power plant that leaks radioactive tritium? A nuclear power plant that leaks radioactive cesium. The good news that it’s not a new leak. Vermont Yankee ” has not had a fuel defect that could leak Cesium-137 since 2001.” Exactly how is this reassuring?

It’s “not dangerous” according to the NRC and the people who either lied or didn’t know about the tritium leaks.

In an unscientific web-based poll (here) WPTZ a Vermont television station affiliated with NBC, 5,487 or 53% of the responders said Vermont Yankee should be shut down now (3,387 / 33%) or when it scheduled to shut down in 2012 (2,100 / 20%). The question was “Do you think Vermont Yankee should continue operations beyond its scheduled shut down in 2012?

” The question was answered affirmatively by 4,506, or 44%.

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The Vermont Dept. of Health provided a summary, here of tritium contamination, here.

While nuclear power provides a tremendous amount of power from a small amount of material, it is very expensive when done right. And when done wrong we have disasters like Three Mile Island, Chernobyl, and business as usual like Vermont Yankee, Indian Point, Oyster Creek – the list of accidents is long for each operating nuclear power plant.

The economic externalities of nuclear and coal are very expensive in terms of health effects to people and the environment. As I’ve addressed elsewhere in this blog, solar, wind, and other renewable sources are safe and inexpensive, and the economic externalities are beneficial.

The only good news is that Vermont, in the spirit of Ethan Allen, is pointing the U. S. in the direction we need to go, vis a vis nuclear power.

BBC News – Eta suspected in killing of French policeman

VIA BBC News:

A French policeman has been killed near Paris in a shootout with gunmen who officials said might be linked to the Basque separatist group Eta.

A man arrested after the shooting identified himself as a Basque Eta member, Spanish newspapers reported.

French officials told AFP news agency that the involvement of Eta was one of several leads being followed.

The shooting happened late on Tuesday when police checked the identities of a group suspected of stealing cars.

Later, police mounted a search operation in the area, a south-eastern suburb of Paris called Dammarie-les-Lys.

Eta is blamed for the deaths of more than 800 people since the late 1960s in its campaign for an independent Basque state.

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If confirmed, this would be the first killing of a French policeman by Eta.

There have been frequent arrests of Eta suspects in France, often in the south-west.

However, last month one of the group's top leaders, Ibon Gogeascoechea, was arrested in north-western France.

He was detained with two other Eta suspects in a joint French-Spanish operation in Normandy.

via BBC News – Eta suspected in killing of French policeman.

"A Time to Betray" an argument for a more aggressive U.S. approach in Levinson case

From A Time To Betray, a blog written by an Iranian, Reza Kahlili (a pseudonym), an Iranian now living in the United States who was for a time a CIA contract agent.

The US State Department on Tuesday reiterated its call for Iran to help locate Robert Levinson, a former FBI agent who went missing on an island in the Gulf three years ago.

“Mr. Levinson will remain a priority for the United States until he is reunited with his family,” State Department spokesman Philip Crowley said, reading a statement on the anniversary of his disappearance.

When President Obama ordered the release of five Quds force commanders captured by U.S. armed forces in Irbil, Iraq in 2007 despite the fact that the very commanders and their organization had successfully orchestrated the killing of hundreds of our soldiers in Iraq, he believed that by showing good faith to the terrorists ruling Iran, he will become the first U.S. President to break the ice in U.S.-Iran relations. However President Obama failed to realize that several U.S. Presidents before him had tried in vain to appease the Iranian rulers only to find out their own failure. Iran answered Obama’s good gestures by taking hostage three American hikers, now imprisoned in Iran. Can anyone remember the hostage takings in Beirut and the Iran-Contra affair or our politicians have a short memory span.

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Terrorists and hostage takers are just that and when one succumbs to their demands, they will simply continue with the same behavior. Isn’t it time to confront such thugs so that the future hostage takers would know what will be in store for them if they continued with such behavior?

Robert Levinson went missing in Iranian island of Kish in 2007. The Iranian government has denied any knowledge as to his existence!

When will we learn to deal differently with hostage takers? on A Time To Betray.

As some readers of Popular Logistics

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are aware, Bob Levinson is a dear friend of mine, and is sorely missed. I want him back with his family in good health immediately. He also owes me at least one dinner, and I intend to collect. But I make no pretense of detachment or neutrality; Mr. Kahlili’s argument may or may not describe the best approach, but certainly deserves some thought.

Nuclear Power and National Security – "The Mobley Factor."

Tweet The Mobley Factor. Suppose a terrorist or one sympathetic to their cause works at a solar power plant or a wind farm. The damage that he or she can do – knock out a wind turbine, a string of solar modules, even kill a few co-workers, while serious, is minimal. But suppose a terrorist or one sympathetic to their cause works at a nuclear power plant. Even if he or she can’t trigger a disaster along the lines of the Three Mile Island or Chernobyl, he or she can provide “Actionable Intelligence.”

Sharif Mobley, 26, an American citizen of Somali descent, is suspected of ties to Al Queda. Mobley was arrested and is being held in a jail in Yemen after he allegedly killed a police guard and seriously injured another during a shootout at a hospital on Monday. Mobley has worked as a laborer in six nuclear power plants in New Jersey, Pennsylvania, and Maryland, including the Salem and Hope Creek plants in New Jersey, the Peach Bottom, Limerick and Three Mile Island plants in Pennsylvania, and the Calvert Cliffs plant in Maryland.

NBC Philadelphia, NJ Star Ledger/AP.

According to the AP Report, “Authorities are investigating whether he had access to sensitive information that would be useful to terrorists.” He was a laborer who worked in the plants when they were shut down for refueling and maintenance. He had “Vital Access” which allowed him into any area of the plants. He could have taken pictures. Lots of pictures. . . . with a cellphone.

WNYC – News – $657M Settlement for Sickened WTC Responders

Fred Mogul of WNYC radio reports, with host Richard Hake on a settlement of injury claims by responders at Ground Zero:

After years of fighting in court, lawyers representing the city, construction companies and more than 10,000 ground zero rescue and recovery workers have agreed to a settlement that could pay up to $657.5 million to responders sickened by dust from the destroyed World Trade Center.

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Link to story and MP3 audio: WNYC – News – $657M Settlement for Sickened WTC Responders.

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Handy Henry Marsh: brain doctor uses DIY drill – Times Online

Henry Marsh

Henry Marsh spends his holidays working 18 hour days for free in a Kiev, using the household drill

The young man lies back on the hospital trolley and waits patiently as his head is secured in place with a vice.

Marian Dolishny’s nervous smile and worried, flicking eyes, betray the certain knowledge that what he is about to undergo will be anything but pleasant. But he also knows that time is short: if the enormous tumour inside his head is not removed, it will soon kill him.

Minutes later the team of doctors, including one of Britain’s most eminent brain surgeons, begins to break into the skull of their fully conscious patient – with a £30 Bosch PSR960 handy-man’s cordless drill.

Amazingly, and despite the low-voltage tool running out of power halfway through the process, Dolishny’s operation is a success, with his tumour skilfully excavated at the hands of Henry Marsh.

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BBC NEWS | Health | Brain surgery with a DIY drill

Henry Marsh is handy with tools.

His favourite hobby is woodwork: “I love to work with my hands,” he says.

That is just as well, because when not working with the lathe, Henry is wielding scalpels in the operating theatre as one of the UK's most respected neurosurgeons, or, sometimes, boring a Bosch drill into the brain of a conscious man.

Fifteen years ago, Henry visited Ukraine to give a series of lectures on brain surgery.

He was shocked by what he witnessed.

Decades of under-investment in medical services in the former Soviet state had left it with little infrastructure or expertise in neurological conditions.

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Patients with the kind of benign tumours which would be quickly identified and excised in the UK had been left untreated with terrible results.

That is the problem with what we do – we can often kill people

Igor Petrovich

“It was like being in a horror film,” he recalls, as he watches home video images of the huge tumours growing on the heads of the patients.

On his trip, Henry met one Ukrainian surgeon who was trying hard to make a difference.

Igor Petrovich had been enduring constant threats and harassment as he tried to reform his department at the Military Hospital in Kiev.

Petrovich combines a revolutionary zeal with a droll wit: “That is the problem with what we do,” he has remarked to Henry, “We can often kill people.”

He impressed Marsh so much that Henry brought him to London for further training.

Ever since that fortuitous meeting, Henry has been visiting the Ukraine at least twice a year to share his expertise and undertake complex operations with Igor.

He normally arrives bearing gifts – disused medical equipment from St George's Hospital, Tooting – often packaged in boxes made in his shed at home.

via BBC NEWS | Health | Brain surgery with a DIY drill.

Randy Sarafan/Instructables.com: chalkboard table

Randy Sarafan defies easy description. He’s clearly a polymath of some sort, a provocateur

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of more than one sort, and a cannon (perhaps loose perhaps not) on the deck of technology. Even a quick look at his work makes it clear that his excellent contributions to “appropriate technology” don’t preclude the occasional foray into inappropriate technology. He’s also the author of the funniest collection of unanswered (((To be more precise, many of “Laszlo Toth’s” letters were, in fact, answered)) correspondence since The Laszlo Letters ((Bob Garfield interviews Don Novello about the Laszlo Letters on the WNYC show On The Media)).

Mr. Sarafan has posted a recipe for a simple chalkboard-surfaced table on the outstanding and ever-useful Instructables.com.

Chalkboard Table design by Randy Sarafan

While Sarafan’s design assumes Ikea trestles, this can be managed with sawhorses, or leaned against or mounted on a wall.The only indispensable items are chalkboard paint, a relatively smooth surface (Sarafan’s table was made of MDF) and chalk.

The point is that, with inexpensive, easily available materials, it’s possible to create a graphic representation of, for instance, a neighborhood – for planning purposes – or even in the midst of a crisis. While rolls of butcher paper are also available quickly, they’re not easily erased as revisions and updates are required. There are, of course, more sophisticated variations: magnetic white boards permit the use of objects and markers (for streets, vehicles, people); acetate overlays over maps permit drawing with grease pencils; GIS applications permit much more nuanced data manipulation.

But this will work-

and can be seen and worked on by more than one person at once – without electricity, without much more than a smooth surface, chalkboard paint, and chalk.

We’ll try to post some other variations on simple “sand-table” solutions in the near future.

Continue reading →

BBC News – New York airport jets ‘directed by child’

Via BBC News: |

US officials are investigating how a child was apparently allowed to direct planes at New York’s JFK airport – one of the country’s busiest.

The probe comes after an audiotape caught the boy directing several pilots preparing for take-off last month.

In one exchange, the boy is heard saying: “JetBlue 171 contact departure.” The pilot responds: “Over to departure JetBlue 171, awesome job.”

The child – whose age is unknown – was reportedly under adult supervision.

The adult was apparently his father – a certified air traffic controller.

The adult is later heard saying with a laugh: “That’s what you get, guys, when the kids are out of school.”

The incident happened on 17 February, when many New York pupils were on a week-long break.The names of the child and the adult on the audiotape were not immediately known.

‘Not indicative’ incident

The Federal Aviation Administration said in a statement: “Pending the outcome of our investigation, the employees involved in this incident are not controlling air traffic.”This behaviour is not acceptable and does not demonstrate the kind of professionalism expected from all FAA employees.”

The agency did not give any further details.

via BBC News – New York airport jets ‘directed by child’.

Vermont Senate Voted to Shut Down Vermont Yankee

Vermont Yankee, on the Connecticut River

The Vermont Senate voted 26 to 4 to close Vermont Yankee. While proponents of nuclear power claim that the plants can be run safely and economically, Entergy, the Louisiana company that operates the plant, is now known to be running Vermont Yankee AT A LOSS!

Economics is not the issue. The Vermont Senate isn’t interested in the profitability of an enterprise. What is at issue is whether Vermont Yankee can be operated safely and whether Entergy can be trusted to operate Vermont Yankee safely. By a vote of 26 to 4, the Vermont Senate answered those questions with a resounding “NO!”

An Entergy Executive responsible for Vermont Yankee testified under oath to two state panels that there were no buried pipes at Vermont Yankee that could leak tritium. This testimony is now known to be false. The Entergy executive has been relieved of his responsibilities. (Click here.) According to NPR (here) “Entergy Nuclear chief executive J. Wayne Leonard did not identify the official by name. But he described the executive relieved of his duties in a way that could only apply to Vice President Jay Thayer.

State Senator Peter Shumlin, Democrat, Wyndham, asked “What’s worse, a company that won’t tell you the truth or a company’s that’s operating your aging nuclear power plant on the banks of the Connecticut River and doesn’t know that they have pipes with radioactive water running through them that are leaking? And they don’t know because they didn’t know the pipes existed. Neither is very comforting.”

Vermont State Senator Randolph Brock, Republican, St. Albans, who in the past has supported Vermont Yankee, said “If the board of directors and management of Entergy were thoroughly infiltrated by antinuclear activists, I do not think they could have done a better job of destroying their own case.”

Entergy claims that no tritium has turned up in drinking water, but that claim must be verified. The Connecticut River, which flows past Vermont Yankee, probably should be checked for Tritium.

Officials at Entergy, the Louisiana company that owns Vermont Yankee, are trying to sell Vermont Yankee, Indian Point, and three other nuclear power stations in the north-east.

It is a similar design to the Oyster Creek nuclear power station, in New Jersey, operated by Exelon, which is also known to be leaking tritium.

Michael Wald covered the story for The New York Times. Guy Raz covered the story at NPR.

L J Furman, MBA

February 27, 2010

An Orca in the Pacific ocean near Vancouver Island, British Columbia, Canada, image courtesy of Whale-Images.com

Tilikum, an Orca, attacked and killed Dawn Brancheau, a trainer at Seaworld, Orlando, on Wednesday, Feb. 24, 2010.

As reported in Asia One, Ric O’Barry and Dave Phillips of the Earth Island Institute have called for a federal investigation into the death of Ms. Brancheau.

In their statement, O’Barry and Phillips said,

“SeaWorld allowed public and trainer contact with an orca that was a known risk, and after three deaths they’re suggesting that it actually continue…. We believe this situation warrants the immediate initiation of a federal investigation into SeaWorld’s possible negligence and violations of the Marine Mammal Protection Act….Along with sadness of this tragic event we can’t help feeling anger toward those who insist upon exhibiting these wild creatures in habitats that can drive them to violence.”

Let’s look at this from another side.

Orcas eat fish, as do other whales, dolphins, and humans.
Fish are high in mercury. (All mercury pollution comes from human industrial activities, much of it from burning coal in power plants).
Mercury causes brain damage.

This leads to a few questions:

What is the level of mercury in the Tilikum’s brain and central nervous system?
Is it causing nervous system damage?
Is Tilikum “Mad as a Hatter?” Is he suffering from Minamata’s Disease?

Kyoto Box: solar cooker can boil 10 liters of water in 2 hours

The Kyoto Box, a solar cooker which retails for €15 (about $20 USD) can boil 10 liters (2.64 gallons) of water in 2 hours.

So apart from its primary uses – cooking and water purification – it can probably be pressed into service to sterilize medical instruments.

The manufacturer, Kyoto-Energy, has offices in Indonesia, South Africa, and headquarters in Kenya, which suggests local production.

According to the WHO, 1.6 million people die worldwide annually from gases produced by indoor cooking. ((More than half of the world’s population rely on dung, wood, crop waste or coal to meet their most basic energy needs. Cooking and heating with such solid fuels on open fires or stoves without chimneys leads to indoor air pollution. This indoor smoke contains a range of health-damaging pollutants including small soot or dust particles that are able to penetrate deep into the lungs. In poorly ventilated dwellings, indoor smoke can exceed acceptable levels for small particles in outdoor air 100-fold. Exposure is particularly high among women and children, who spend the most time near the domestic hearth. Every year, indoor air pollution is responsible for the death of 1.6 million people – that’s one death every 20 seconds. Source: WHO Fact Sheet, “Indoor Air Pollution and Health, ” dated June 2005. ))

The Kyoto Box, then, has a number of virtues:

no scale requirements; because they’re entirely autonomous, one or one million in use will have an effect;
reduction of indoor air pollution deaths; and used in scale, a reduction in outdoor

air pollution as well;
reduction of water-borne diseases via water purification, and food-borne diseases via cooking;
lowering of energy costs;
where wood is used for fuel, a reduction of deforestation, with the long-term effects of mitigating flood risk and increasing the availability of lumber and tree shade

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Tiger Woods & Subprime Mortgages

Tiger Woods may be a great golfer. But I wouldn’t buy a mortgage from him. Here’s why.

(click to stream audio)

Economics II: Macroeconomics and Political Economy

The way for the government to stimulate the economy and to avoid or climb out of a Depression, as John Maynard Keynes wrote, and as President Franklin Delano Roosevelt proved with the New Deal, is to invest money and resources in infrastructure, not to lower taxes or put money in the hands of private businesses. This latter tactic, which New Jersey’s new Governor, Chris Christie^¹ is trying, was not proven to work by President Herbert Hoover and proven not to work by President George W. Bush.

Keynes’ basic analysis rests on two evident economic phenomena. One is the different effects on the Keynsian Multiplier of government revenues collected as taxes and government revenues not collected as tax-cuts. The other is the basic response of people to a “Deep Recession” or a Depression.^²

If a Recession is a series of calendar quarters in which there is a decline in GDP, a “Deep Recession^³” or a Depression is characterized by a recession in which there is a general reluctance to invest in new staff or new projects on the part of businesses and individuals. A portion of any income, tax refund, or tax cut is saved. Money is hoarded. Money spent by the government is obviously, spent. The Keynsian Multiplier of money spent directly by the government is greater than money provided to businesses by tax credits because the government spends money directly, while individuals and businesses spend what they must and hoard what they can. For example, for every $1 Million the government spends purchasing goods and services, $1 Million is added to the GDP. However, for every $1 Million of taxes the government cuts, there is $1 Million the government doesn’t spend, a chunk of that $1 Million is spent, and a chunk that $1 Million is hoarded.^⁴ When the government spends directly, particularly on domestic infrastructure, the Multiplier is, in a word, multiplied.

Obama’s tax incentive to hire people, is partially neo-classical, supply-side economics of the type favored and proven ineffective by Hoover and Bush. However, to the extent that it generates jobs, it will help the people whos jobs are created, their families, and the economy.

Robert Reich, a Keynesian economist, said^⁵,:

“The best and fastest way for government to prime the pump is to help states and locales, which are now doing the opposite. They’re laying off teachers, police officers, social workers, health care workers, and many more who provide vital public services. And they’re increasing taxes and fees. … We need a second stimulus directed at states and locales. “

Paul Krugman^⁶ seems to agree. The only way to avoid a Depression is for the government to spend money. Lowering taxes doesn’t work when people are reluctant to spend. However, the government must create jobs that will reduce the deficit in the future.

Wars don’t do this. As President Bush demonstrated, wars create jobs that increase the deficit and deplete the economy by destroying capital, both human and physical. Investing in local clean, sustainable energy and rearchitecting the health care system in the United States, however, are ways to use government spending today to reduce future deficits.

Local Clean Sustainable Energy

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Suppose we were to install a 50 kw photovoltaic solar array and a 2,500 liter (660.4 gallon) solar hot water heater system on every school in the United States. That’s approximately 100,000 of each.^⁷ Suppose each solar electric system costs $7.50 per watt, or $375,000, and each solar hot water heater would cost $50,000. That’s $425,000 per school, at 100,000 schools that’s $42.5 Billion. .

Because these are powered by a natural process – sunlight – rather than non-renewable fuels, and because of relatively low maintenance costs and operating costs, these systems will pay for themselves quickly and last a very long time, they will pay for themselves over and over. The return on investment is between 10% and 16% for PV Solar and 20% to 33% for Solar Hot Water. This is outlined in Table 1, below.

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Solar Electric and Solar Hot Water Heaters
	Solar Electric	Solar Hot Water
Cost of each	$375,000	$50,000
Total Cost	$37.5 Billion	$5.0 Billion
Years to pay for itself	6 to 10 years	3 to 5 years
Useful Life	40 years	25 years
Annual ROI	10% to 16%	20% to 33.3%
Table 1.

The ROI is higher when you factor in the external benefits of clean, renewable energy – there is no pollution, and therefore are no health effects from pollution.

One way to use the deficit to stimulate the economy in a manner that is consistent with reduced long term deficits is thru the development of clean energy resources, such as solar electric and hot water systems on the nation’s public schools.

Health Care

In July, 2007, President George W. Bush said “People have access to health care in America. After all, you just go to an emergency room.^⁸” While Emergency Rooms are well suited for acute conditions – emergencies – such as the traumas of car accidents, gunshot wounds, and broken arms, they are ill-equipped for chronic conditions such as hypertension, diabetes, cancer. If a person with diabetes was to go to the emergency room, the emergency room staff would say “We can’t help you. Come back when you’re in a coma, or you need your leg amputated.” Similarly, while the Emergency Room can’t manage hypertension, it can treat the heart attack or stroke suffered by a person with hypertension.

Assuming Pres. Bush’s statement is accurate, then the approximately 47 million, or one out of six, or 15.46% of Americans who don’t have health insurance only have access to health care in an emergency. This means that the Health Care System can handle non-emergency health care for five out of six Americans, but is not capable of meeting the non-emergency needs of one out of six, or 15.46% of Americans. This means we need about 15.46% more doctors, nurses, medical office staff, hospital staff, medical offices, and hospitals. For every 100 medical doctors practicing today, we need 115.46. For every 100 nurses, we need 115.46.

According to the Bureau of Labor Statistics, there were about 661,000 physicians and surgeons in the US in 2008 and are about 2.6 million Registered Nurses, RN’s, today.^⁹ If this is sufficient for the 357 Million Americans who have health insurance, then we need an addtional 102,191 physicians and surgeons, and an additonal 401,960 nurses, and they need offices, examining rooms and other infrastructure. However, we can’t just push a button and create 102,191 physicians and surgeons and 401,960 nurses out of thin air. It takes nine years to train a physician and three years to train a nurse.^¹⁰

Selected Demographic Information
Americans	With Insurance	Without Insurance	Total
Americans	257 M	47 M	304 M
Medical Professionals	Have	Need	Total
Physicians & Surgeons	661,000	102,191	763,191
Nurses	2.6M	401,460	3.0 M
Table 2

Another way to use deficit spending today to stimulate the economy and invest for the future is to build the medical infrastructure for the 47 million Americans who can’t afford or are without health insurance.

Paul Krugman on Banking, Securitization, and The Canadian Model

In his recent columns in the New York Times, Paul Krugman^¹¹ has discussed the banking industry, the banking debacle, banking reform, and the Canadian model for banking regulation and banking risk management. He quotes testimony by Jamie Dimon of JP Morgan Chase and Lloyd Blankfein of Goldman Sachs. In hearings of the Financial Crisis Inquiry Commission, Dimon basically said “this was business as usual.” Blankfein, however, said “it was an act of God.” While they disagreed about the cause of what happened, they agree with the solution: “Let bankers be bankers. If the government regulates banking, the economy will crumble.” It appears that we tried this deregulatory approach, and the economy crumbled.

“Securitization” of loans, in which bad loans are bundled with good loans and sold, doesn’t limit risk, it rewards risk. In terms Tiger Woods or a Wall Street banker should be able to understand, Securitization is like sexual activity and HIV AIDS. Suppose one person has 100 relations with 10 partners, 10 with each, one of whom is infected with the HIV AIDS virus. Suppose another person has one relation with each of 100 partners, one of whom is infected with the virus that causes HIV AIDS. Clearly the first person has a higher risk of infection. However, the second person is also at risk. In the case of securitization of “toxic assets” the bankers were rewarded to have relations with as many people as possible. They didn’t minimize risk. They spread it around.

The Canadian banking model limits risky loans, limits bank leverage, and limits securitization. This is what Obama must do. He must demand and enforce regulations that require transparency in banking, regulate derivatives, eliminate incentives for bankers to make bad loans, create incentives for bankers to make good loans; to practice what might be called safe banking

. Regulations, for example, like those mandated by Glass Steagal.

Patrick Henry once said. “Give me liberty or give me death,”

Today he might add, “Entrust my money with cautious bankers.”

———— Notes ————-

1Faced with high unemployment and a lack of unemployment compensation funds, NJ Gov. Christie is proposing to cut unemployment benefits, and cut the unemployment tax used to fund unemployment benefits. Beth DeFalco, “Christie proposes to cut jobless benefits,” NJ Herald, 2/25/10, http://www.njherald.com/story/news/nj-jobless-benefits, and Athena D. Merritt, “Christie proposes fix for N.J.’s insolvent unemployment fund,” Philadelphia Business Journal, 2/25/10, http://www.bizjournals.com

2Discussed at length by Riddell, Shackelford, Stamos, and Schneider, Economics, Pearson – Addison Wesley, 2008, pg 365-368.

3I’m using the term “Deep Recession” in conjunction with “Depression” because there appears to be a general reluctance on the part of bankers, journalists, pundits, and others to use the term “Depression” in discussions of the state of the economy today.

4Acharya, Viral and Ouarda Merrouche, “Precautionary Hoarding of Liquidity and Inter-Bank Markets: Evidence from the Sub-prime Crisis,” July 3, 2009, at Stern.NYU.edu, http://pages.stern.nyu.edu/~sternfin/vacharya/public_html/acharya_merrouche.pdf.

5Reich, Robert, “Obama Needs to Teach The Public How To Get Out Of The Mess We’re In, But He’s Not”, 1/29/10, http://www.huffingtonpost.com

6Paul Krugman, the Princeton University Economist, and Nobel Laureate, writes a column for the New York Times.

7According to Statemaster.com there are about 94,260 elementary and secondary schools in the US. I rounded this up to 100,000 to simplify the math. http://www.statemaster.com/graph/edu_ele_sec_tot_num_of_sch-elementary-secondary-total-number-schools.

8On July 10, 2007, “Pennsylvania Progressive” reported then President Bush said: “People have access to health care in America. After all, you just go to an emergency room.” http://pennsylvaniaprogressive.typepad.com/my_weblog/2007/07/bush-on-healthc.html

Also reported on July 11, 2007 by Dan Froomkin in the “Washington Post,” in his column “Mock The Press”. http://www.washingtonpost.com/wp-dyn/content/blog/2007/07/11/BL2007071101146_5.html

9Bureau of Labor Statistics, Occupational Outlook Handbook, 2010-11 Edition,

Physicians and Surgeons. http://www.bls.gov/oco/ocos074.htm#outlook,

Registered Nurses, http://www.bls.gov/oco/ocos083.htm

10I’m assuming a 6-year Biomedical program and a 3 year Medical Residency for physicians and surgeons and a 2 year practical nursing program with a 1 year Residency for nurses.

11Krugman’s Recent columns in the NY Times include, “Bubbles and the Banks”, 1/8/10, “Bankers Without A Clue”, 1/15/10, “March of the Peacocks”, 1/29/10, and “Good and Boring,” 2/1/10. These can be found on the Internet at http://www.nytimes.com.