By Flickr user IndyDina

A recent Bloomberg news commentary by Celestine Bohlen pointed out some of the skewed facts when media pundits say the U.S. is headed for “Euro-style” socialism. Bohlen wrote that few Europeans consider themselves doomed by their comprehensive health-care plans. Many European countries don’t have government-operated health care, which is the standard definition of socialized medicine.

Bohlen wrote that France’s health care system is a government insurance program–which operates in a similar fashion to the proposed U.S. “public option.” Patients are allowed to choose doctors, and doctors are allowed to charge more than the government-set fees that determine reimbursement. Only 10 percent of the French population rely on public insurance alone. The other 90 percent use private insurance to make up the difference between the government-set fees and doctors’ bills.

In 2000, while the France was No. 1 in a worldwide ranking of health care by the WHO, the U.S. was 37th. The U.S., Turkey, and Mexico are the only nations in the Organization for Economic Cooperation and Development in which large portions of the general population are uninsured.

There is nothing particularly socialist about the European approach to health care, wrote Bohlen In fact, the U.S. spent twice as much per person on health care than our peers abroad.

A recent FRONTLINE documentary also examined health care in five democratic countries worldwide. The documentary, Sick Around the World, took an in-depth look at systems in the United Kingdom, Japan, Germany, Taiwan and Switzerland–and also spoke to experts about what the U.S. might learn from those systems. Britain (all public), and Japan (all private) are at the two extreme ends of the health care spectrum.

Britain spends about 8.3 percent of its GDP on health care–all funded by taxes. In return, Brits don’t pay a co-pay for most services. Most experts characterize the British system as “socialized” because the government both provides and pays for health care. Britons pay taxes for health care, and the government-run National Health Service (NHS) distributes those funds to health care providers.

Japan spends about the same amount on GDP as Britain–8 percent. However, unlike in Britan, the Japanse pay about $280 per family per month in health premiums. The employer often pays half. Co-payments are normally about 30 percent of the cost of a procedure. Japan calls its system “social insurance.” All citizens are required to have it–and can get it through their work or purchased from a nonprofit, community-based plan. Those who can’t afford the premiums receive public assistance. Most health insurance is private; doctors and almost all hospitals are in the private sector.

In fact, Japan has been so successful at keeping costs down that Japan now spends too little on health care; half of the hospitals in Japan are operating in the red.

As we wait to see what health care path the U.S. will choose, both Bohlen’s Bloomberg commentary and FRONTLINE’S documentary provide a critical perspective of the health care debate.

Bloomberg News reported, banks aren’t doing anyone a “favor,” when they charge fees as high as $39 on debit-card transactions that overdraw a consumer’s account, said House Financial Services Committee Chairman Barney Frank.

The Federal Reserve finally put a halt to these shoddy business practices Thursday. Under the new rules, banks must get consumers’ permission before charging for overdrafts at retail stores or A.T.M’s.

The new rules will not cover overdraft fees for checks, or recurring debit card transactions, like payments for utility bills that are set up in advance.

The new rules will be implemented as soon as July 1, 2010.

The New York Times reports that industry executives say the new restrictions are far too harsh. The paper also had an excellent chart that showed how exponentially debit fees have gone up in the last few years.

Federal officials said that the banking industry received between $25 billion and $38 billion a year in overdraft fees.

Some raised the alarm that with the Fed clamping down on banks, they will be forced to make up the losses by charging consumers for savings and checking accounts.

Officials hope that the new rules will help prevent hidden fees, and make the overdraft conditions clearer for consumers.

Hat’s off to The Economist, The New York Times, and a host of other media organizations for their stand-out coverage of the US jobless rate on Friday. The Economist chose a positive spin, and reports that while the US jobless rate has passed 10.2%,economic indicators point to the fact that it should start to bounce back.

While economic coverage in the last month has widely indicated that the recession is over, or almost over, the dark statistic demonstrates that many workers are still suffering. The Economist did a great job of digging a bit beneath the main figures and stated,” The misery is actually greater than the headline number suggests: an alternative unemployment rate that includes those who would like to work but are not looking for a job, and those who are employed part-time but would rather work full-time, rose by half a percentage point to 17.5%.

According to The Economist firms’ have a strong tendency to work each employee harder early in a recovery before hiring more of them. The Labour Department reported that productivity soared by 9.5% at an annualised rate in the third quarter, a rate surpassed only once since 1983 (in 2003).

Companies will eventually have to boost employment or hours—or even both according to The Economist.

The New York Times reported today that there is a widening gap between data and reality. Some economists fear that this is distorting the government’s picture of the country’s economic health, overstating growth and productivity in ways that could affect the political debate on issues like trade, wages and job creation.

According to the New York Times economists from academia and government gathered this weekend determined to fix the problem and paint a more accurate financial portrait. Louis Uchitelle did a fantastic job of explaining why the way imports are accounted for may not be accurate.

He has a great quote that explains the problems with counting occupations that are off-shored and what is in-shored.

“We don’t have the data collection structure to capture what is happening in a real time way, or what is being traded and how it is affecting workers,” said Susan Houseman, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., who has done pioneering research in the field. “We have no idea how to measure the occupations being off-shored or what is being in-shored.”

According to Uchitelle’s article, federal agencies use an import price index that fails to capture when a company switches from a domestically made product to a cheaper one from abroad. This skews the numbers, and makes our productivity figures

US Airways executives were cautiously optimistic on their third quarter conference call six days before the layoffs. They said that business was slowly picking up after several brutal years.

The airline raised $137 million through an underwritten common stock offering in the last few months.

They lost $80 million for the third quarter compared to a net loss of $866 million for the same period last year.

US Airways CEO Tom Ryan said that US Airways has to be proactive in these volatile times.

“Any airline waiting for the economy to improve to cure its problems will continue to struggle,” he said, “and US Airways will not be one of them.”

The airline currently has 255 daily flights from Sky Harbor Airport to 80 non-stop destinations from 56 gates. The currently currently employs 8,655 employees in the Greater Phoenix area. The company has not yet released how many of the layoffs will impact Phoenix.

The company’s stock closed at $2.93  today.

“A lot has been written about the airline industry and their weakened stocks,” said top Merrill Lynch Executive Michael J. Linenberg. “People have the perception that if a company has a $3.00 stock the company must have issues.”

In fact, Linenberg says that journalists need to dig deeper. While U.S. Airways and other airlines do have balance sheets that are pretty leveraged, what really matters is that they have a sizable cash position.

They have a cash position of 1.5 billion facility credit that should protect the company barring a draconian scenario in which oil prices sky-rocket to over $120 a barrel and the economy contracts for at least three quarters. This is also assuming the worst-case scenario that the airline didn’t do anything further to protect its position.

In this case Linenberg says that U.S. Airways could get into a situation where they would have to burn through a lot of cash which would place the airline in a risky situation.

The real story, says Linenberg is that the airlines have survived despite the collapse of companies like Lehman Brothers and Bear Sterns.

“The fact is that the industry has been very responsive to high energy prices and geo-political events,” says Linenberg. “If you had told people even a few years ago that a company like U.S. Airways would survive the worst economic downturn since the 1940s, people would have laughed.”

Fisker was able to purchase the plant using a $528 dollar loan from Uncle Sam. The plant expects to create more than 100,000 factory jobs when production reaches full capacity in 2014.

The race is on for American and European manufacturers to deliver the first plug-in hybrids. So far no single company has been up to the task…

With Obama and Congress trying to reduce the U.S. dependence on oil, plug-in hybrids may be the way to go.

The bedraggled U.S. car industry has been the focus of much of the U.S. stimulus money. U.S. officials hope that the money will transform the industry from a energy-guzzler to a cornerstone of the green economy.

Ford Motor Co and Nissan have also received government loans aimed towards building advanced technology cars.

A $20 million insider trading scheme run by billionaire Raj Rajaratnam has been halted by federal prosecutors reports Bloomberg. Rajaratnam and five other former Bear Stearns Cos. directors were charged in the scheme.

ABC reports that Rajaratnam Raj Rajaratnam, was a major contributor to the campaigns of Hillary Clinton and also the single largest known U.S. contributor to a charity linked to the Tamil Tiger terror group in Sri Lanka, according to records obtained by ABCNews.com.

“The defendents operated in a world of, you scratch my back, I’ll scratch your back,” U.S. Attorney Preet Bharara said at a press conference today. “Greed, sometimes, is not good.”

According to Bloomberg, this is the largest ever hedge fund insider trading case. The latest news can’t be good press for investors given everything the market has had to overcome this year.

The case also marks the first time wiretaps have been used to target insider trading. According to Bharara, the U.S. government will not hesitate to use these tools against Wall Street.

Insider tips came from workers at Intel, IBM, investor relations firms, and McKinsey.

It is estimated that Rajaratnam earned a whopping $17 million to $18 million from the fraud. However, given the fact that he is estimated to have a net worth of $1.3 billion one has to wonder if this fraud was even worth his time.

Blogger and management consultant Peter Cohan also has an excellent blog posting about the arrests. Cohan writes that a former employee who was fired may have turned him Rajaratnam.

Steven Levitt, the author of “Freakonomics,” writes in his blog Economist View that economists will disapprove of yesterday’s decision to award the Nobel Economics Prize to Ostrom because it signals a shift towards rewarding social scientists.

He also wrote an opinion article for the New York Times entitled, “What This Year’s Nobel Prize in Economics Says About the Nobel Prize in Economics.” In this post he states that the prize choice shows that the prize is moving toward a Nobel in social science, not a Nobel in economics.

Ostrom is the first female economist to win the prize. She won the prize for showing that privatizing natural resources is not the route to halting environmental degradation.

In her classic work Governing the Commons: The Evolution of Institutions for Collective Action, Ostrom demonstrates that when communities are given the right to self-organize they can democratically govern themselves to preserve the environment.

Levitt writes that, “The economics profession is going to hate the prize going to Ostrom even more than the Republicans hated the peace prize going to Obama.”

THe U.K. based paper The Guardian lauded the Nobel Committee’s decision on the basis that Ostrom proves her findings three times over when it comes to methodology.

“The Nobel committee should be applauded for recognising such rigorous theoretical and empirical work. Shining light on Ostrom is a call to economists to spend a lot more time analysing human behaviour, rather than assuming that we are all rational selfish individuals. It is also a call on economists to become more empirical and to find ways to validate their theories.”

“It is very important to the United States that we continue to have a strong dollar,”said U.S Treasury Secretary Tim Geither.

The most useful quotes in Bloomberg’s coverage were from analysts who called the Obama Administration’s bluff. Currency traders also said that the Obama Administration’s commitment to a strong dollar has little meaning.

“It means that the U.S. approves of a constantly weakening dollar but doesn’t want a disruptive collapse,” said David Malpass, the former chief economist at Bear Sterns Cos and deputy assistant Treasury secretary from 1986 to 1989.

At the same time, the European Central Bank is also putting on the pressure for a stronger dollar according to reports from Bloomberg, The New York Times and the Wall Street Journal.

The dollar’s important role in the financial system means that investors want to see a strong dollar.
“Major reserve currency countries should take into account and balance the implications of their monetary policies for both their own economies and the world economy with a view to upholding the stability of international financial markets,” China President Hu Jintao told the G20 leaders.

The European Central Bank broke with their stringent fiscal policy, and will keep interest rates at a record low. ECB President Claude Trichet said that the ECB remains concerned that the euro’s appreciation is threatening Europe’s financial recovery.

Europe is barely keeping its head above water as the continent slowly emerges from its worst recession since World War II. A strong euro is slamming Europe’s exporters and making it difficult for their companies to compete against foreigners with cheaper costs.

We haven’t turned the corner yet, and tough economic months likely lie ahead. Today’s Labor Department figures confirmed what Wall Street feared: U.S. job losses unexpectedly accelerated last month. The U.S. employment rate has almost reached 10%–the highest unemployment rate since 1983.

Key indicators pointed in this direction yesterday, causing a major stock market slump, but today’s report sealed the deal.

This table in the New York Times allows readers to quickly flip between job losses and the rate at which they have accelerated. They also have an entire economic page called The Labor Picture which is a great place to go to compare different labor stats. They have easy to understand charts that track the unemployment rate, the change from month to month, the number of people who say they have given up looking for a job, and the 12-month change, in thousands.

The New York Times also proved that economic news coverage doesn’t have to be only about numbers and charts. They focused on the human side to the story in these powerful photos.

Rielle Randle, left, and her brother, Jamal Randle, fill out applications for jobs at a new bar and restaurant in Detroit last month.

This photo featured in the New York Times depicts Jerry Lamirande, an unemployed technology systems engineer as he stands in the doorway of his home in Amarillo, Tex. For millions of people, the jobs report merely confirmed something they had learned through the discouraging process of seeking work.

THE WSJ focused on the blow to stocks that the labor department report delivered. They pointed out that the Labor Department’s monthy employment report was only the lastest piece of bad news in a series of releases showing negative moves in key financial indicators that previously had been improving.

The story was covered less than yesterday’s stock market slump, but was still a notable follow-up.