Author Archives: Yves Smith

“The Tragedy of Electronic Medical Records”

Yves here. We’ve written about the pitfalls of electronic health records in the past. One of the surprising reactions is the “dazzled by technology” response of some readers. While there are problems with relying on paper-based records, and electronic records could in fact remedy many of them, a large swathe of the public seems unwilling to hear that what is good in theory may not turn out well in practice.

The sorry fact is that electronic health records, which in theory should reduce errors and allow for more consistent delivery of medical services, were instead designed only with patient billing and control over doctors in mind. As a result, they are if anything worsening medical outcomes. One indicator: as we reported, the latest ECRI Institute puts health care information technology as the top risk in its 2014 Patient Safety Concerns for Large Health Care Organizations report. Note that this ranking is based on the collection and analysis of over 300,000 events since 2009.

This is another example of crapification. Electronic medical records have been implemented, with apparent success, in other economics. For instance, when I lived in Australia from 2002 to 2004, it was normal for doctors to make use of them during patient visits, making entries into the system, and I never got the impression they found it onerous. Here, in New York City, I still see doctors making considerable use of paper records. As the article indicates below, the reason is the US systems are costly, lower productivity, and make doctors less likely to review patient information.

Prosecutors Reopening Cases Against Bank Recidivists; Change or “Change You Can Believe in”?

The New York Times yesterday published a new story by Ben Protess and Jessica Silver-Greenberg on how Federal prosecutors are investigating reopening cases against big banks and hitting them with additional charges. Reader Richard D, who was curious about the story, wrote, “It is hard for me to know whether this is a momentous event, or a nothingburger.”

It’s actually somewhere in the middle. While it represents prosecutors starting to use muscles that had atrophied, at least as far as financial firms are concerned, as readers will no doubt suspect, the shift falls well short of the levels of official zeal needed.

But there’s actually an important shift discussed at some length in the article that may have bigger ramifications: that powerful bank consultants and lawyers are no longer being taken at their word.

Links 10/30/14

Wolf Richter: The Wrath of Draghi – First German Bank Hits Savers with Negative Interest Rate

Draghi’s near zero rates have resulted in banks that don’t engage in casino banking to start imposing negative interest rates on savers. The case described in the post is likely to lead other banks to follow suit if there isn’t a big backlash.

Germany Turning Sour on the Transatlantic Trade and Investment Partnership

Yves here. The US media has given considerably more attention to the TransPacific Partnership, the western sister of an ugly multinational-enrichment-scheme-billed-as-a-trade-deal called the Transatlantic Trade and Investment Partnership. The comparative silence about the US-European deal has led many observers to assume that it is more or less on track.

Maybe not.

ECB Stress Tests: The View of an Insider

Yves here. The ECB stress tests are starting to resemble the process that Japan’s Ministry of Finance used in dealing with zombie banks in its post-bubble years. The MOF would gradually acknowledge how bad the loan books were as the banks were able to make writeoffs (not that anyone was really fooled; foreign analysts were regularly making their own assessments). So the exercise is to pretend that the amount of disease revealed is credible, when those in the know recognize full well that is it much worse.

Private Equity Consultants Flounder Over Question About Abusive “Evergreen Fees” at CalPERS Board Meeting

If you want to understand why private equity general partners have gotten away for so long with what the SEC has come perilously close to calling outright embezzlement, along with other serious compliance abuses, you need look no further than the last CalPERS board meeting to get a clue.

LInks 10/29/14

J.D. Alt: Have We Passed the Tipping Point of Biological Collapse?

Yves here. Readers regularly debate issues of growth, groaf, and sustainability. This post makes an urgent case that we are farther along toward collapse, based on our consumption of biological resources, than most official sources acknowledge.

SEC Commissioner Kara Stein Fighting for Tougher Bank Sanctions, Stymies Bank of America Settlement

One of the things that continue to be a source of anger in the American public is the way that banks were rescued en masse without the perps, the managers and producers in the businesses that produced toxic product facing much if anything in the way of consequences. Another is that the banks pay fines that are inadequate relative to the amount of damage that they did.

SEC commissioner Kara Stein has been using her post as a surprisingly effective bully pulpit to pressure the agency and other regulators into upping their game. It’s unusual for an SEC commissioner to play that role; the post is typically a runway for becoming either a lobbyist or a director on financial services company boards. Even more rare is that Stein is regularly crossing swords with SEC chairman Mary Jo White, who is taking a much more industry-friendly line than she promised at the time of her confirmation. It’s virtually never done to have a commissioner from the same party buck the chairman.

Matt Taibbi Leaving First Look

Matt Taibbi has been missed. He went into a writing black hole when he decamped from Rolling Stone to Pierre Omidyar’s wannabe media empire, First Look in February. But when the billionaire’s news venture was launched, the press was sloppy in reporting on Omidyar’s financial commitment. It was widely depicted as a $250 million venture, when the tech titan never committed anywhere near that amount of funding. Admittedly, it takes time to get a new publication going, but the lack of any apparent progress was becoming noteworthy. From the outside, it looked like the project might be going pear-shaped, and it appears it did.

Tech Underbelly: Indentured Servitude and Bonded Labor in the US

A labor collusion pact with the aim of suppressing pay levels among Apple, Google, Microsoft, Pixar, and others, demonstrated that the idea that Silicon Valley plays fairly is an illusion. But even more unsavory abuses occur further down the food chain. H1-B visa workers, who are generally held in low esteem in the US since they compete with Americans, take a risk when they sign up with labor brokers, even seemingly legitimate ones like Tata Consultancy, part of the giant Tata Group in India.

As the NBC video below, part of a joint investigation with the Center for Investigative Reporting, explains, the most abusive recruiters are body shops, who abuse the H1-B program by bringing in technology graduates when the firm in fact has no job lined up. The Indian immigrants are hostage, kept in guest houses where they are told not to go outside until they find work.

Links 10/28/14

Exploding Wealth Inequality in the United States

Yves here. This is a particularly important post on the state of inequality since Emanuel Saez, working with Thomas Piketty, was for over a decade tracking the rise in inequality in the US, particularly the way that the top 1% and 0.1% were pulling away from the rest of the population. Gabriel Zucman has made a recent important contribution to the analysis of wealth disparity by sizing the impact on global figures of the funds stashed in tax havens. A full 6% goes unrecorded, which by his estimates is enough to make the US less of a net debtor, Europe a net creditor, and of course, the rich in those regions even richer.

Saez and Zucman are particularly concerned that this level of wealth inequality is on its way to becoming entrenched.