Jim Chanos: U.S. Economy is Worse Than You Think

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By Lynn Parramore, Senior Research Analyst, Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

Since the election of Donald Trump, the stock market has soared and many pundits have noted positive economic trends in the US. Jim Chanos of Kynikos Associates, known for his financial prescience, is less sanguine. He sat down with INET’s Lynn Parramore to discuss the underlying components of the economy, in which he finds several areas of concern. Chanos is a member of INET’s Global Partners Council.

Lynn Parramore: Let’s talk about perceptions of the U.S. economy. You’ve pointed out that surveys asking how people feel about the economy show optimism, while actual hard numbers look disappointing. What do you make of this gap?

Jim Chanos: It’s intriguing that people are reporting they’re feeling better, particularly in the corporate sector, but even among consumers. People say they feel good about the economy and yet they apparently don’t have any money at the end of every month to keep spending.

We’re seeing weak consumer spending numbers in both auto and housing, which are big drivers of the economy. With unemployment so low and the expansion where it is, these figures should be better than they are. There are portents of even worse things when you look at state and federal tax receipts, which are down, and other leading indicators.

It could all just be a soft spot in an ongoing expansion — time will tell. But the narrative we were told is that animal spirits would take us to the next level of economic activity. That clearly is not happening in mid-2017. We’re 8 years into an economic expansion, and economists say that the modern U.S. economy has never gone more than 10 years without a recession. So as recoveries go we are well into it.

People have bought their cars and remodeled their houses and done a lot of things that one does in an economic recovery. I think incremental spending [spending based on increased disposable income] is going to be harder and harder to come by as time goes on.

LP: What about the health care industry? What impact would the GOP plans have on the economy?

JC:  The Senate bill is really onerous on the backs of consumers and patients. It appears that they need it to get tax cuts and tax reform done. But I don’t think the GOP understands the political minefield they’re laying for themselves here.

Americans are getting unexpectedly higher copay and deductible expenses. They’re shouldering more and more of the health care obligation themselves, and that’s something a lot of families haven’t budgeted for. It was already a going trend in our employer-based system at the time of Obama’s election — remember, about 50 percent of us get health care through our employers. But now it’s also happening in Obamacare’s individual and small group markets. That means people have less money to spend even if their income isn’t shrinking.

Winter is coming for the U.S. health care industry. So many businesses have been structured for ongoing health care usage and inflation that they’ve just gotten fat. People tend to extrapolate from the near-term past and by and large that’s ok, but it catches you flatfooted when there’s a real tectonic shift. I think we have one of those coming in U.S. health care. Just as the shale revolution has changed the energy business, I think the advent of the consumer paying more out of pocket is changing the politics of U.S. health care. Remember, the government pays about half the top line for U.S. health care companies in the form of reimbursement. So politics does matter.

LP: In terms of the energy business, how is it changing and how do those changes impact the economic road ahead?

JC: The energy business will be far more troubled going forward. Much of it is uneconomical. Global demand for oil, gas and fossil fuel is dropping, but supply keeps increasing. Exxon used to have returns on capital in the high 20s, now they’re in the single digits.

The good news is that America, because of the shale revolution, has lots of cheap natural gas. The bad news is that coal is not coming back, whatever President Trump might think. More good news is the increasing adaption of solar and wind and renewables. The bad news is that it’s going to leave a lot of energy companies out in the cold, for lack of a better term. I keep pointing to the fact that Saudi Arabia seems to be rushing to sell the public part of its oil patrimony via the Aramco IPO [the state-owned Saudi Arabian Oil Company] and I think there’s a reason for that.

Frackers are in trouble. They’ve raised so much capital and they’ve been very successful in increasing production, but not in creating cash flow for their investors. A couple of years ago when the Saudis began to put pressure on oil prices intentionally, it was to pressure the frackers and hasten their demise — but the business brought costs down just as fast as oil prices. Frackers were able to stay in business. The capital markets, which froze to them for about six months, opened back up, and that was key because this is a negative cash flow business and the fact that they could access capital again meant they just kept drilling. They keep drilling, but they will have to figure out a way to turn a profit.

LP: Much has been made of the tech companies, the celebrated “disrupters,” as drivers of American prosperity. What’s your view of these firms, the Facebooks and Ubers and Netflixes?

JC: With the exception of Facebook, the disrupters — Netflix, Uber, etc.— don’t seem to be scaling. The Harvard Business Review has a great story out which concludes that unlike dotcom 1.0 when Amazon and Facebook were inventing whole new markets and were relatively cash-flow positive right away, companies like Uber and Tesla are more personal fiefdoms of their CEOs.

Uber is going to be an interesting story. We’ve heard a lot about how they have manipulated workers and consumers, and the governance disasters. Lost in the story of corporate governance is the story of an unprofitable model. They haven’t figured out how to operate a sustainable business.

LP: What about Trump’s infrastructure proposals? Could they help the economy?

JC: That’s just another sort of fake fiscal news, if you will. It’s going to be public-private partnerships. I have a long experience with those: I was short Macquarie Bank, which was the originator of these sorts of things in ’05-’06.

Macquarie started the idea of infrastructure as an asset class idea. But it always revolved around things like parking structures and toll roads — anything where you can have clearly definable cash flow and where you can get an immediate cash payment for use. It’s not water culverts or county service roads. Macquarie did a famous deal on the Indiana toll road (which filed for bankruptcy in 2014, collapsing in debt). It’s things like that.

Because private investors need high rates of return, these deals generally haven’t been good deals for anybody. They haven’t generated the cash investors anticipated. Consumers end up avoiding the toll roads or using different parking facilities if you raise the rates too much. In reality, we already have something [that] create[s] these infrastructure projects: It’s call municipal finance, where municipalities and states can set up funding vehicles and sell bonds to finance the projects.

Now we’re told that the private sector will be able to do this better. Well, they might be able to do it better and faster, but only for a small number of projects. Real projects that we need — repairing, refurbishing, whatever — are tougher. You’re not going to get private investors to sign up for those without definable cash flows. It’s something that sounds good but when we actually start looking at projects that make sense for private investors leveraged up with state-backed or federally-backed bonds to do a project, we’re going to find that it winnows down the list dramatically.

LP: Who is actually going to benefit from such projects?

JC: In my own view, these public-private projects are not what core supporters thought they were getting with Trump.  It’s going to be great for Wall Street investment banks, but I’m skeptical that a lot of people are going to be able to get excited about the economic growth coming from them. Rural people won’t benefit from them. They won’t be happening in the Deep South, where you might need new levees. This is for parking garages at JFK. The reconstruction of New York City’s Tappan Zee Bridge is being funded this way, a public-private partnership.

In the U.S., an attitude of hostility toward government involvement in the economy has developed over the last several decades. In the U.K., when it comes to the economy, the Conservative Party and the Labour Party both see a role for government. The Conservatives see a role that needs to be shaped and controlled and limited, while Labour feels that government should have a bigger role. But they both understand that it has a meaningful role to play. In the U.S. we have a much different situation. The Democratic Party in the U.S. is more like the Conservative Party in the U.K., while the GOP is a party that is actually opposed to the government, taking the view that the government is bad and needs to be reduced or limited. That’s a significant difference, and it shows up in our infrastructure.

LP: How serious do you view the weaknesses in the economy we’ve discussed?

JC: One of these things that we’ve talked about wouldn’t be so bad, but you put them all together and the U.S. economy doesn’t look so great.

The big 3 drivers are still housing, autos, and health care. They disproportionately count for a huge amount of activity. What we see is that housing has stalled, autos have turned down, and health care is possibly about to turn down. Retail is also turning down. Nike is laying off 2 percent of its workforce. I can’t remember the last time Nike said it was laying off people.

Again, this could simply be cyclical, and as we reach the end of the expansion it gets harder and harder to generate new sales as peoples’ leverage has gone up. It could be that, but the problem is that we’re not well equipped to handle anything other than a downturn that’s mild because the Fed is already at near-zero interest rates.

Interestingly, the deficit is starting to go back up because of lower tax receipts. That’s the wrong way for the deficit to go up. New spending, like government spending on infrastructure, would be the right way.

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  1. Altandmain

    Beneath all the smoke and mirrors, the US is regressing for the bottom 80% into a Third World nation.

    What recovery? The rich have looted it all from us.

    1. Edward E

      The recovery is for the wealth defense industry. You’re going to love the trade war with China.

      1. sierra7

        Yes, no word about the MIC in this article……..Maybe I just don’t understand our economy! Is not the high multi-billion dollar “defense” spending part of the states’ economies? It’s gotta be downhill all the way for the “average” American worker (not just blue-collar) after the brutal crushing of organized labor by both major parties and the propagandized MSN over the past 4-5 decades. Globalization put one of the last major nails in that coffin…….Maybe the scrabbling for the for profit health care industry will wake up lots of people that there are other priorities for their hard earned money than repeat consumer spending on the same items with very small improvements or just outright corporate junk.

    2. Jonathan Holland Becnel

      Here Here!

      This “recovery” is a crock of FUCKING BULLSHIT.

      Bail out The People!!!

    3. Thor's Hammer

      re Medical Extortion

      “if only we had Medicare for all”

      I’ve a progressively worsening bone spur that is interfering with my Achilles tendon. The surgery is a 1/2 hour outpatient procedure followed by a quite lengthy time to full recovery. Medicare pays a standardized payment to the surgeon of $1,888 for his half our of work and perhaps 1 hour additional in consultation and diagnosis. Something over $1,000 per hour, but I have no objection to a highly skilled specialist being well paid for his knowledge.

      When I asked how much the operation would cost in total he claimed he didn’t know. After requesting a cost breakdown several times I was finally give a quote on a unsigned pink Post-it— $19,500 — making my co-pay $3,900

      Further research at other hospitals in the area and with other orthopedic surgeons generated radically different estimates of from $4,400 to $4.900 including an overnight in the hospital. Of course these numbers are meaningless until the actual bill is submitted. And I’m not referring to medical complications, but rather how many $50 Q-tips were used.

      So this is how Medicare in a profit-maximization system works. Charge the maximum amount Medicare will accept. Bill every $100 paper towel and $50 pill you can. Then try to overbill the customer for all the rest.

      By the way, I can fly halfway around the world including airfare, doctor & hospital to have this minor surgery performed in Thailand for about the same expense as the Medicare co-pay from Hospital #1.

      I worked in Canada for two years. In the first week of employment the bookkeeper called me into her office. “Have you received your Care Card yet?” “I’m a f—-ing Yank. Don’t I have to become a citizen first?” “You are in a civilized country now. We don’t permit anyone to go without health care.” I filled out a single page form and received my Care Card in the mail within a week.

      1. Vatch

        “You are in a civilized country now. We don’t permit anyone to go without health care.”

        Ouch! Sadly, she spoke the truth.

  2. Kris Alman

    Nike is laying off 2 percent of its workforce. I can’t remember the last time Nike said it was laying off people.

    May 14, 2009

    Nike delivered Oregon’s latest economic nastygram Thursday, announcing plans to lay off 1,750 employees worldwide, including 500 at its headquarters near Beaverton.

    The shoe and apparel company has been planning a massive restructuring since February, but today’s cutbacks — 5 percent of the company’s global work force — are even larger than Nike had forecast last winter. Oregon will be especially hard hit, with more than 7 percent of the 6,800 workers at Nike headquarters losing their jobs.

    Nike showed Oregon who’s the boss in 2005, when the legislature granted Nike 35 years of exemption from annexation by Beaverton.
    years of annexation freedom.

    In mid-December 2012, former Governor Kitzhaber held a special session so that Nike could be granted “tax certainty.” Nike wanted an agreement that its state income tax would continue to be based solely on the company’s Oregon sales. They just had to agree to add 500 jobs and spend at least $150 million on expansions for the next 30 years, whether or not Oregon enacts tax reform during that period. https://clawback.org/2012/12/20/nike-runs-away-with-new-oregon-tax-giveaway/

    It was rather humorous to hear Washington County Commissioners debate my claim that Nike benefits from corporate welfare in Feb. 2013. The Board approved expansion of the Beaverton Enterprise Zone to include unincorporated Washington County (specifically the area of Nike’s headquarters).

    Nestled in unincorporated Washington County, Nike is a tax shelter within a tax shelter. Of course, that doesn’t take into account all the money they have parked overseas.

    Why should Nike invest in workers who drain profits? Stock buy-backs are a much better ROI!

    1. fresno dan

      Kris Alman
      July 1, 2017 at 2:17 am

      Your comment is an excellent, excellent example of the HBR link in Chanos’s article:

      Most people think of entrepreneurship as being the “productive” kind, as Baumol referred to it, where the companies that founders launch commercialize something new or better, benefiting society and themselves in the process. A sizable body of research establishes that these “Schumpeterian” entrepreneurs, those that are “creatively destroying” the old in favor of the new, are critical for breakthrough innovations and rapid advances in productivity and standards of living.

      Baumol was worried, however, by a very different sort of entrepreneur: the “unproductive” ones, who exploit special relationships with the government to construct regulatory moats, secure public spending for their own benefit, or bend specific rules to their will, in the process stifling competition to create advantage for their firms. Economists call this rent-seeking behavior. As Baumol wrote:

      …entrepreneurs are always with us and always play some substantial role. But there are a variety of roles among which the entrepreneur’s efforts can be reallocated, and some of those roles do not follow the constructive and innovative script that is conventionally attributed to that person. Indeed, at times the entrepreneur may even lead a parasitical existence that is actually damaging to the economy. How the entrepreneur acts at a given time and place depends heavily on the rules of the game—the reward structure in the economy—that happen to prevail.

      Why O why can’t “conservatives” understand that a “tax break” is a subsidy, or if you will welfare. Its like the negative of a film (remember film?) photograph – its still a picture of the same d*mn thing with black and white reversed!

        1. Arizona Slim

          That’s saying something. Because I got rid of mine shortly after I graduated.

          Suffice it to say that my econ textbooks weren’t keepers.

                1. ambrit

                  Ah! Herbert had a hybrid critter in his later Dune books called a slig. Treated like a kosher pig. Ugh! What a fate.

            1. Steven

              I recommend the (Australian) Netflix TV series Rake. The first episode has a plot line about a ‘brilliant economist / friend of Bernanke / etc’ who is also a cannibal. Don’t know if this was intentional on the writer’s part but if it was it is a nice touch.

            2. Gerard Pierce

              That’s kind of a really mixed-up metaphor if it is intended as a play on Shakespear’s “First we kill all the lawyers”. Shakespear considered the lawyers of the time as defenders of the people and the bad guys had to kill them all before those same bad guys could screw over everyone else.

              Economists mostly generate confusion. They are not organized enough to be evil although a few of them would like to try.

      1. ewmayer

        @fresno dan: “Baumol was worried, however, by a very different sort of entrepreneur: the “unproductive” ones, who exploit special relationships with the government to construct regulatory moats, secure public spending for their own benefit, or bend specific rules to their will, in the process stifling competition to create advantage for their firms. Economists call this rent-seeking behavior.” — I’d like to put forth the portmanteau word “rentrepreneur” for this class of economic parasites. Can I get a second?

            1. Enquiring Mind

              Might I suggest an added word: perhaps a cousin of the Freerentrepreneur, that guy specializing in freebies, squatting and other expense avoidance, all with the good purchased grace of public sanction? Nike and its ilk would be exemplars.

      2. skippy

        Tho some were want to ignore corruption and fraud…. ethics or even say morals don’t exist in numerology….

        disheveled… its quite presumptuous for mortals to play dawg before final judgment…. it screws with the brew… there is that bet…

        1. makedoanmend

          ah…’tis a cynical bet…no?

          And many who like to gamble care not for gawd or gawds…but only sweet moment of jackpot…to big score inured, immune to all other stimuli…the mortal world sucked dry…and prime meat, humanity

          1. skippy

            Methinks the Tudors understood the system architecture quite well and quite adept at fiddling with the social dependency anchor point in real time. This is the great feat of neoliberalism, seamlessly transferring social memes from one anchor point to another without the unwashed even noticing.

            Which IMO makes one almost wish for the return of the many dawg days, could even sell it to the libertarians of all stripes, a market place of dawgs….. chortle~~~~

            disheveled…. I would gladly offer tokens to the alter of “Standards” dawg….

            1. ambrit

              To “standards” bred is it? Temple whores the lot, their bastard offspring the “Children of the God” who inspire and allure the commonality to corruption and “new standards.” The Worm Ouroboros, head to tail, no heroism left, but a tawdry glamour to obscure and deceive.
              Fritz Leiber had a Street of Gods in his imagined Lankhmer. Does every shadow have an engram that it completes?

              1. skippy

                Measure twice and cut only once…. and if one must cut short… and then cut to fit…

                disheveled…. personal fav… put it on fat and lay it off sweetly….

                    1. ambrit

                      We all appreciate “Farmer” in the Sky. A Titan amongst Pygmys that. (Even Michael Crichton appropriated Ophir, in his imitable simian style.) But then, who’s on first? I dunno!

    2. oh

      I’m puzzled as to what the 6.800 workers at Nike do? Isn’t Nike one of those companies that only design the product and then get them manufactured by Chinese and other Asian countries for a low $? (Then they sell the so called ‘designer sneakers’ to the fools in the USA and other parts of the world at a high $$).

      Can someone provide info on type of employees (low wage, medium and rentier management class) at Nike?

  3. CD

    It surprises me that we think our economy is “growing” and healthy when many workers and families aren’t better off nor will they become better off in the future. This is common knowledge. Many families aren’t better off than they were years ago, but we expect the economy to keep growing.

    Bit of cognitive dissonance here, believing two contradictory ideas at the same time.

    Very likely globalization is fooling us, where corporations grow their revenues and income, but the rest of us aren’t “growing.” So let’s expect some unhappy economic facts to arise in the future.

    1. Left in Wisconsin

      “Growth” is one of those terms that has a common-sense definition and a technical, economic definition that are not the same. This bait and switch, which applies to virtually every common sense term the discipline has appropriated, is central to economics.

    2. Normal

      If two ideas seem contradictory then more thought is required. First, the whole can be growing while parts are not. Second, income is not as important as disposable income.

  4. Jane

    Any chance Trudeau and his finance minister, Bill Morneau, read NC? Their spiel on a $35bn infrastructure bank sounds nothing like this:

    Real projects that we need — repairing, refurbishing, whatever — are tougher. You’re not going to get private investors to sign up for those without definable cash flows. It’s something that sounds good but when we actually start looking at projects that make sense for private investors leveraged up with state-backed or federally-backed bonds to do a project, we’re going to find that it winnows down the list dramatically.

    1. cnchal


      They are listening to the same bankster that advised the Wicked Witch of Queens Park to “privatize” Hydro One. The pension funds in Canada, mostly government employee funds as non government pensions have been almost completely eliminated, are the hidden reason for this push. These public sector pension funds now call themselves “private” and demand that tollbooths be installed at the end of our driveways and to take over the tollbooths already in or on your house.

      1. Moneta

        A few facts:
        -Pension funds are starving for yield
        -Major infra is in disrepair
        -Canadians want taxes to drop
        -Government is looking for ways to not put more debt on its books

        In time there will be cost overruns, tolls will close and cash flows will be lower than expected. Pensioners or taxpayers will end up footing the bills but in the short-term this infra bank answers all the above issues.

    2. NotTimothyGeithner

      Public-private partnerships have nice sounding pitches. Kaine pitched these non stop in Virginia, and otherwise sensible people went, “but Tim Is so nice, he wouldn’t do that. He’s not corrupt.”

      If guys like Trudeau said, “there’s profit to be had,” they would go no where. Appearing innocent and careful are how they con people. “Don’t worry, the experts said it’s a good deal.”

      1. justanotherprogressive

        Tim Kaine’s perpetual “little boy” face and demeanor hides a great deal of chicanery. But since we live in Bernay’s World, looks are all that matter…..it’s no wonder so many people think “Tim is so nice” while he and his friends are destroying their and their children’s lives…..

      2. oh

        Such a deal! Public-Private-Partnerships are where the public get screwed and the the private boys run off with the profits.

    3. JEHR

      Jane, I was wondering if Trudeau copied Trump’s idea for an infrastructure bank. Horrible idea (as T would say) because private investors are there for the profits and not necessarily the good of the common people. Sometimes Trudeau is a real disappointment. I want to tell him: Find out from citizens what the needs for infrastructure are (here in NB we could use home care workers and care for the elderly); get the funds ready from the central bank; hire companies that will get the work done for a negotiated price (without making huge profit and without tolls); oversee the building of things and get the job done. Voila, no need for private investors’ money.

      1. c_heale

        I don’t know too much about Trudeau’s policies, but he seems exactly like Blair, i.e. completely untrustworthy and a complete neoliberal.

      2. wilroncanada

        Years ago, when we lived in Nova Scotia, The provincial government (I think Conservative, but it could have been Liberal–there’s no difference) decided to build new schools using PPP’s (Public Private Partnerships). The private partner ends up owning the building and property, even though the land may have before building been farmland. (Nova Scotia didn’t have an Agriculture Land Reserve, like British Columbia, but have been supposedly been trying to preserve farmland.) The result was that the schools were locked to teachers and students at either 1/2 hour or 1 hour after the end of classes, and the district would have to pay extra for sports use, evening meetings, or just teacher work. The rules were enforced by locked doors and guards. Unlike old schools which had been built on the factory model, multi-story, with fairly narrow hallways and few open areas, to acclimatize most of the students to their post-secondary environments, the new schools were constructed to resemble shopping malls, single-floor, lots of open space. After the twenty-year contract expired, the private owner could, with few renovations, re-purpose the buildings as…shopping malls, in great locations. Just what modern students would be acclimatized to–shopping.

      3. Carla

        JEHR, if you’re disappointed by Trudeau, I fear you didn’t do your homework before he was elected.

  5. human

    They’re shouldering more and more of the health care obligation themselves, and that’s something a lot of families haven’t budgeted for.

    The mandatory purchase of crapified health insurance is morally indefensible.

  6. Bob

    Indiana has been ground zero for public-private partnership disasters; this article refers to the toll road fiasco. More concerning is the construction of I-69. It’s two years behind schedule, over budget, and the Spanish company with the contract may go bankrupt. Two days ago the state decided to take over the project and will complete it. Note that there are many costs to these construction projects that are overlooked because they aren’t purely financial. The construction delays and poor road conditions caused loss of lives in accidents; accidents are up about 50% over the past two years for this stretch of highway.

    1. Steve H.

      A-yup. Note that part of section 5 is Btown, which just got crushed by the State on an overreach annexation attempt. The liberal ivory elite nexus, other cities-in-the-state have been dumping transients here, so that yesterday there were 15 overdoses, the hospital is getting swamped with no-pays, and the outrage will really switch on when a local dies from the ambulances all being in-play. Loss-of-life looks like part of the equation.

      I expect the next public-private to be rehab camps as alternative sentencing. What could go wrong?

      Here’s an old article on one of the private contractors involved. [G. Travis]

    2. WeakenedSquire

      Nothing has been learned, of course:

      Budget Director Micah Vincent says the state stands behind its initial decision to complete the project that way. “If I was advising the governor at that time period, in 2013, I would have advised the same thing,” Vincent says. “What we would have looked at is to make sure that we had a partner that was experienced in this kind of deal and then we’d also be looking at the financial realities of the roads.”


  7. Arizona Slim

    I am seeing the downturn in health care with mine own eyes. Just this past week, I saw a dozen people lose their jobs. They worked in health care.

    In late June, I had a dental appointment. The office used to have two dentists. Now there’s just one. And he really put the mouth guard hard sell on me. Those things cost at least $700.

    Did I mention that I was the only patient in the office and that there was no one in the waiting room?

      1. Schofield

        I guess you’re looking at the” good times.”

        But Twumpy Tweeter has told you he isn’t going to let you down! Why don’t you “believe”?

    1. Whine Country

      I recently paid $60 for an excellent mouth guard in Los Algodonas Slim (just across the border from Yuma). My wife is getting long overdue work done there which would cost three to four times as much here in the good old US of A. People from all parts of the country have their dental work done there. For example, a zirconium crown costs from $250 to $400 there. I paid a US dentist $1,000 as my copay for one porcelain crown with Delta Dental coverage. (That’s $400 compared to over $2,000) Many of the dentists were educated in the US and live here. Single payer healthcare – including dentistry – would cost so much less if properly administered that I’m afraid the economy would crash because of the outrageous amount of economic rents built into our current system. Stated another way, healthcare needs someone to put out the FIRE which is sucking all of the oxygen from the system (pun intended). Our economy is very sick and we have no insurance to make it better.

      1. CD

        Funny you should talk about our rented health care industry.

        One estimate, made from the Atlas survey at Dartmouth College about five to ten years ago, found that about a third of health care revenues are unnecessary or wasted. That comes to about a trillion dollars and about a million health care jobs.

        This means truly fixing the health care industry will be very, very tricky. Better that the Reps attempt this than the Dems. True reform will require a lot of brain work and heart, or it will produce a lot of economic pain for the country.

        1. Brian

          Is this accurate? 16% of jobs in US are health care related. A “few percent” of that total are people that actually perform health care. So lets guess and say 20 million people have health care jobs that have nothing to do with the mechanics of care. Is it fair to say that Millions of jobs are useless? Hardly, each of those employees is being paid directly by the government via Medicare and Medicaid to work, even though they perform no necessary function.
          What are the percentages of health workers to population in the civilized nations? Something tells me it is far less than here.

    2. JL

      $700? That seems way too high. I paid $125 for one last year in the South Bay, and when I bit through it in 6 months my dentist made me a new, thicker one free of charge. I do have dental insurance, no idea how much that covered since I never got a statement for it.

      Even at $700 it’s still better than getting a root canal and crown, but I’d shop around for a new dentist.

    3. kareninca

      You can buy a mouth guard at Walgreens for $30 that works just fine.

      My husband’s dentist is inventing more stuff than usual these days. Unfortunately I don’t have a way to intervene. Funny how every time a new crown is put on, the tooth underneath dies and he needs another root canal.

      1. Yves Smith Post author

        You used to be able to buy sports guards that are functionally the same from places like Modells for $1.99. I think the makers figured out they could both upcharge and sell more marketing them for grinding at night. Last I looked, it was pretty hard to find the sports guard version.

        1. ewmayer

          In answer to my own similar question below – I see a wide variety of moldable mouthguards starting from $3.99 at [evil e-commerce behemoth which must not be named].com. Your local [sports-foo] shop will likely have similar.

        2. JL

          I saw a boil and bite model a couple weeks ago at Dick’s. I agree it works fine for protecting your teeth. Mouth guards I’ve gotten from the dentist have always been more comfortable though, they don’t feel like I have a tennis ball stuck in my mouth. I could never get used to sleeping with an OTC sports guard.

    4. ewmayer

      If you reall do need one – and I agree that most of the time the hard-sell-by-dentist is a tell that you don’t – why not just get one of those $5-10 dip-in-boiling-water-and-then-mold-to-your-teeth mouthguards amateur athletes use? There are surely fancier both-upper-and-lower versions of same with breathing slit if you need both sets of teeth to be guarded.

    5. Scott

      Guess this advice is dependent on . . . ‘severity’.

      I grind my teeth when I sleep. I also balked at the several hundred dollar price my dentist said a mouth guard would cost (not covered by my insurance at the time). And I too decided other alternatives would be sufficient. I soon revised my thinking with regard to how well sports guards work in ‘off label’ situations after waking up every morning with slivers of blue plastic in my mouth.

      I’d say that it doesn’t matter now that I no longer have insurance, but it didn’t matter then either as they weren’t willing to cover the expense, specifying it as medically unnecessary. Guess they make more off of the sales for treating cracked teeth.

      PS –

      Isn’t Arizona Slim Snoopy’s cousin that lives in the cactus?

  8. Michael

    “”We’re seeing weak consumer spending numbers in both auto and housing, which are big drivers of the economy. With unemployment so low and the expansion where it is, these figures should be better than they are.””

    Why? There is a limit to the amount of debt people are willing to take on in spite of the cacophony of cheer leading, sales pitches and outright lies directed at them. All cash flows eventually become inadequate due to inflation and poor mgmt.

    If our economic health rests on 3 sectors and 2 have run their course this cycle, well why are we beholden to only 3 sectors? Oh yeah globalization.

  9. mtnwoman

    If the GOP “health care” bill gets thru, how do we NOT have a recession, or depression? My premium is estimated to go up 70%. I’m far from alone.

    Taking hundreds of dollars out of Americans monthly budget for new health expenses is going to kill discretionary spending. You kill discretionary spending and you kill the US economy.

    I am looking into moving to Canada, Panama, somewhere else. With the GOP voter suppression, gerrymandering and shitty governing for the 99% I don’t see how the US moves forward, “lifting all boats”.

    1. David Carl Grimes

      Plus the Democrats are in no position to oppose this because of Putin Derangement Syndrome

  10. Aj

    I’m beginning to believe that health insurance might be one of the biggest scams to ever plague a people. I live in Ohio, have a middle of the road 4 bedroom home and two cars. I pay more each month for insurance than I do on my mortgage. Health insurance. Auto insurance. Home owners.
    Auto I can live with. But come on. How do we live in a world where we are forced to buy health insurance that costs more each month than a mortgage? Hopefully stem cell and crspr prove a raving success and force 90% of health care into obsolescence.

  11. dao

    Talk about cognitive dissonance. The unemployment rate is at a record low in 7 states (including Mississippi of all places). However, the reported unemployment rates don’t take into account lower labor force participation rates and the fact that most jobs created in the last several years are McJobs (low pay, no benefits, gig type, part time, etc.)

  12. ambrit

    Well, Mississippi must be leading the nation in something “good” for once. We’re usually the ‘Number One!’ in things like teen pregnancy, obesity, etc.
    However, we seem to be leading the nation in deceptive statistics, if the local scene is any indication. A lot of people aimlessly wandering the streets, obviously homeless people panhandling, an uptick in property crime, all point to growing desperation and poverty. Heaven help the rest of you if Mississippi is the model for the New (Neo-Liberal) America.
    Me, I’m waiting for these McJobs to foment some McRiots.

  13. RBHoughton

    “The big 3 drivers are … housing, autos, and health care. They … count for a huge amount of activity. What we see is that housing has stalled, autos have turned down, and health care is possibly about to turn down.”

    There are similarities between the American and the ancient Roman Republics. Where Rome trod she left a desert and that is what we are seeing in all US foreign adventures obo the neocons.

    Its a shame. The inception of the republic, the expectation of the people, the glorious possibilities for the whole world – all blown away on a frolic of some mad men.

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