How to Change the World

How to Change the How to Change the WorldWorld

Economic Realities in a Changing Economic Realities in a Changing WorldWorld

1818thth Annual Honors Symposium Annual Honors SymposiumFlathead Valley Community Flathead Valley Community

CollegeCollege

Global Change and Economic Global Change and Economic Realities in 50 minutes or less…Realities in 50 minutes or less…

Really, economic “realities?”Really, economic “realities?” Unified voice on these “realities?”Unified voice on these “realities?” Has Change Changed? The Great Has Change Changed? The Great

Global Recession of 2008Global Recession of 2008 Different Strokes for Different FolksDifferent Strokes for Different Folks The Global Economic System in 2025The Global Economic System in 2025

No Shortage of Opinions…No Shortage of Opinions…

Change implies uncertaintyChange implies uncertainty

Economic reality manifest inEconomic reality manifest in• DemographyDemography• Economic (income, employment, wealth, Economic (income, employment, wealth,

etc)etc)• TechnologicalTechnological• Institutional (rules of the game)Institutional (rules of the game)

Certainties we’re pretty sure of…Certainties we’re pretty sure of…

What’s right for one, not necessarily What’s right for one, not necessarily right for anotherright for another

What’s right today, not necessarily What’s right today, not necessarily right tomorrowright tomorrow

Policy environment increasingly Policy environment increasingly complexcomplex

Economic reality lies within Econ Economic reality lies within Econ 101…101…

WhatWhat HowHow For WhomFor Whom

And all within the “Death of And all within the “Death of Distance”Distance”

No universal pattern for economic No universal pattern for economic developmentdevelopment

DemographyDemography Stock and flow of knowledgeStock and flow of knowledge Institutional frameworkInstitutional framework

Relative measures of prosperityRelative measures of prosperity

Why are we…Why are we…• 10X prosperous as Guatemalans?10X prosperous as Guatemalans?• 20X prosperous as North Koreans?20X prosperous as North Koreans?• 40X prosperous as Mali, Ethiopia, Congo, 40X prosperous as Mali, Ethiopia, Congo,

Sierra Leone? Sierra Leone?

povertypoverty

MontesquieuMontesquieu Protestant work ethicProtestant work ethic SachsSachs DiamondDiamond

2008 volatile year2008 volatile year

Collapse of Lehman BrothersCollapse of Lehman Brothers Near Systemic worldwide breakdownNear Systemic worldwide breakdown Aggressive fiscal and monetary Aggressive fiscal and monetary

responsesresponses• China China

Who has health care right?Who has health care right?

Senate Plan, House Plan, Obama Plan Senate Plan, House Plan, Obama Plan released Monday?released Monday?• Canada?Canada?• Great Britain?Great Britain?• New Zealand with its National Health New Zealand with its National Health

Service?Service?

AustraliaAustralia CanadaCanada GermanyGermany New New ZealandZealand

UKUK USUS

2007 2007 RankRank

3.53.5 55 22 3.53.5 11 66

QualityQuality 44 66 2.52.5 2.52.5 11 55

AccessAccess 33 55 11 22 44 66

EfficiencEfficiencyy

44 55 33 22 11 66

EquityEquity 22 55 44 33 11 66

Healthy Healthy LivesLives

11 33 22 4.54.5 4.54.5 66

Per Cap Per Cap SpendingSpending

$2,876$2,876 $3,165$3,165 $3,005$3,005 $2,083$2,083 $2,546$2,546 $6,102$6,102

Commonwealth Fund Comparative RankingCommonwealth Fund Comparative Ranking

Other Health Care SystemsOther Health Care Systems

Any and all systems, for all kinds of goods Any and all systems, for all kinds of goods and services, must ration resources and services, must ration resources someway, somehow, according to…someway, somehow, according to…• priceprice• time in queuetime in queue• budgetsbudgets• geography (access)geography (access)• specialty, type of servicespecialty, type of service

Each has unintended consequencesEach has unintended consequences

The dilemma worldwide then is The dilemma worldwide then is providing…providing…

AccessibilityAccessibility• GeographicallyGeographically• Wait time (time is not free)Wait time (time is not free)

AffordabilityAffordability QualityQuality

• PersonnelPersonnel• Equipment (technology)Equipment (technology)

CanadaCanada GermanyGermany UKUK USUS

Health Health spend/capspend/cap

$3,673$3,673 $3,465$3,465 $2,815$2,815 $6,719$6,719

Health Health spend/GDPspend/GDP

10.010.0 10.610.6 8.28.2 15.315.3

Gov Gov Spend/total Spend/total healthhealth

70.470.4 76.976.9 87.387.3 45.845.8

Infant Infant mortality/10mortality/100000

5.045.04 3.993.99 4.854.85 6.266.26

MD/10,000MD/10,000 1919 3434 2323 2626

Female life Female life expectancyexpectancy

8383 8282 8282 8181

GDP/capGDP/cap $39,300$39,300 $34,800$34,800 $36,600$36,600 $47,000$47,000

All Non US Systems have…All Non US Systems have…

Individual and/or employer mandatesIndividual and/or employer mandates Universal coverageUniversal coverage Less expensiveLess expensive Better outcomes?Better outcomes?

Competition: Sown the Seeds of Its Competition: Sown the Seeds of Its Own Destruction?Own Destruction?

Private health insurance industryPrivate health insurance industry• cherry picking, benefit denialcherry picking, benefit denial

Physician Services IndustryPhysician Services Industry• supplier induced demandsupplier induced demand

Hospital Services IndustryHospital Services Industry• medical arms racemedical arms race

Pharmaceutical IndustryPharmaceutical Industry• dominant firms buying generic dominant firms buying generic

challengeschallenges

So Who Has It Right?So Who Has It Right?

France & Japan & NetherlandsFrance & Japan & Netherlands• Rapidly increasing costsRapidly increasing costs• Benefit reductionsBenefit reductions

GermanyGermany• Increased payroll tax to meet spiraling costsIncreased payroll tax to meet spiraling costs

EnglandEngland• 2006 report “the present system is 2006 report “the present system is

incomprehensible and its outcomes unjust”incomprehensible and its outcomes unjust”

The “health” of health systemsThe “health” of health systems

Ultimately depends on…Ultimately depends on…• Public values which are culturally Public values which are culturally

dependentdependent UK: right to free care as citizensUK: right to free care as citizens Canada: “just, fair, and equitable principal”Canada: “just, fair, and equitable principal” Germany: solidarity and subsidiarityGermany: solidarity and subsidiarity U.S.: self reliance, aversion to taxation, U.S.: self reliance, aversion to taxation,

limited role for governmentlimited role for government

20252025

Emerging powers (the BRIC’s)Emerging powers (the BRIC’s) Transfer of wealth Transfer of wealth Non state actorsNon state actors Trade and financial clustersTrade and financial clusters

Developing nationsDeveloping nations

Sovereign wealth fundsSovereign wealth funds Export marketsExport markets Value added ladderValue added ladder State owned enterprisesState owned enterprises Unsustainable financial imbalancesUnsustainable financial imbalances Perception of globalizationPerception of globalization Decline of dollarDecline of dollar Multiple financial nodesMultiple financial nodes State centric developmentState centric development

We are They, They are UsWe are They, They are Us

New economic paradigmNew economic paradigm Apple iPodApple iPod

Smiley Curve of Value AddedSmiley Curve of Value Added

Branding-product conceptBranding-product concept ManufacturingManufacturing Retailing and servicingRetailing and servicing

Index of Economic Freedom

80.4

78

76.5

72.9

71.1

68.3

55.6

53.8

51

50.8

50.3

49.8

0 10 20 30 40 50 60 70 80 90

Canada

U.S.

U.K.

Japan

Germany

Mexico

Brazil

India

China

Haiti

Russian Fed

Viet Nam

Income Distribution

24.9

28.3

32.6

36

36.8

37.5

37.8

40.8

41.5

48.1

55

59.5

0 10 20 30 40 50 60 70

Japan

Germany

Canada

U.K.

India

Russian Fed

Viet Nam

U.S.

China

Mexico

Brazil

Haiti

Relative CertaintiesRelative Certainties

Global multipolar systemGlobal multipolar system• Power will be dispersedPower will be dispersed

Shift of relative wealthShift of relative wealth• Challenge to western orderChallenge to western order

Pressure on food, energy, waterPressure on food, energy, water• Technological innovationTechnological innovation

Arc of instabilityArc of instability• Destabilizing without developmentDestabilizing without development

Key UncertaintiesKey Uncertainties

Energy transition and economic powerEnergy transition and economic power• Conflicts in interestConflicts in interest

Future of democracyFuture of democracy• China and RussiaChina and Russia

Demographical challengesDemographical challenges• Europe and JapanEurope and Japan

Enlarge economic pieEnlarge economic pie• Or divvy it up?Or divvy it up?