Top Quotes: “The Measure of a Nation: How to Regain America’s Competitive Edge and Boost Our Global Standing” — Howard Friedman

Health

“In 2005 African American infants suffered a death rate of 13.63 per 1k, more than twice the national average. The CDC’s 2014 world rankings indicate that an African American baby would have a better chance of survival if born in Russia or Bulgaria.”

“Among the factors contributing to these lopsided outcomes are disparities in prenatal care, nutritional supplementation for pregnant women, and inadequate social welfare. Yet even if we eliminate this racial disparity and compare only the infant mortality rate of the United States’ Caucasian population, our ranking versus the competition is unaffected.”

“The United States has the highest maternal mortality ratio in our group of competitors, nearly four times higher than in Greece, Italy, and Belgium.”

“Two key factors likely contributing to maternal mortality are obesity and teenage pregnancy, both often associated with poverty.”

“In 1998 in the United States, the teen birth rate was nearly double that of the United Kingdom, the next highest country, and nearly twenty times higher than that of Korea, the country with the lowest rate. Pregnant teenagers and their infants face significantly greater health risks than pregnant women in their twenties; in the developing world, the maternal mortality rate for these young women is five times higher than for women in their twenties. While it is comforting to know that the teenage pregnancy rate in the United States has declined by about 40 percent from its 1990 peak of 116.9 teenage pregnancies per one thousand women ages fifteen to nineteen to a rate of 71.5 as of this writing, this is still an extremely high rate compared to the rest of the developed world.”

“A final factor that may be contributing to America’s relatively low life expectancy is our rate of amenable mortality, defined as deaths before age seventy-five that were potentially preventable through timely and effective healthcare. In a study of nineteen countries, including the United States, fourteen western European countries, Canada, Australia, New Zealand, and Japan, the United States placed last — dead last, we might say. Ranked as of 2002–2003, our rate of amenable mortality was 109.7 deaths per one hundred thousand people — more than 50 percent higher than the best-performing countries of France (64.8 deaths per one hundred thousand), Japan (71.2 deaths per one hundred thousand), and Australia (71.3 deaths per one hundred thousand). Another way to view this is to recognize that even if the United States had the lowest infant mortality in the competition, it would still have the lowest life expectancy.”

“Age might be a mitigating factor. If the average American is older, then the higher costs per capita wouldn’t be surprising. We know that, all things being equal, older people have more medical needs and incur more expenses for healthcare. But the average American is not older; in fact, just the opposite is true. With an average age of 36.9 years, the United States is the youngest competitor country,43 while Japan, Germany, Italy, Greece, Belgium, and Spain all have average ages of forty or more. Only 13 percent of the American population is over sixty five, compared to more than 20 percent in Belgium, Canada, Germany, Greece, Italy, Japan, the Netherlands, and Spain.”

“Roughly two-thirds of this excess spending pays for outpatient care: visits to physicians, same-day hospital treatment, emergency-room care, and the use of expensive diagnostic tests like MRIs by fee-for-service practitioners. One reason for this excessive outpatient care is health insurance coverage policies.Doctors weighing whether or not to perform a test or procedure, or considering which one to perform, will look to see what’s covered by health insurance. When a given procedure is not covered by insurance, doctors may order a more expensive procedure that is covered.”

“Another cause of the excess spending is defensive medicine, defined as “the practice of ordering medical tests, procedures, or consultations of doubtful clinical value in order to protect the prescribing physician from malpractice suits. “In Canada, for example, malpractice insurance typically costs only 10 percent of the corresponding specialty in the United States. The reason is that Canada imposes caps on malpractice jury awards, giving Canadian physicians less motivation to practice defensive medicine. Americans, by contrast, are more likely to be subjected to a battery of tests simply because their doctors and hospitals are afraid of being sued.

Fifteen percent of American overspending for healthcare is linked to pharmaceuticals. Americans use on average about 10 percent fewer drugs than our comparison countries and 40 percent fewer branded drugs, yet we pay 50 percent more for comparable products than patients in the United Kingdom, Germany, Spain, France, and Italy. Why are Americans paying so much more for the same drugs?

To find the answer, we simply have to follow the money. The beneficiary of America’s high drug prices is the pharmaceutical industry. When American citizens cross the border into Canada to buy prescription drugs, they often purchase the very drugs their own country has just exported. The Canadian price for the drugs, negotiated by the government, is dramatically lower than what is available to Americans. This phenomenon of reimportation is ongoing, despite lobbying by Big Pharma (as the pharmaceutical giants are collectively known) for legislative efforts to stop it. For those Americans able to cross the border, it’s the free-market system at work

Yet in 2006, when Medicare coverage was expanded to include prescription drugs, a provision of the new law specifically prevented the US government from negotiating on drug prices, thus further distorting the US drug pricing market. Just contrast the prices paid for drugs by the Veterans Administration (VA), which negotiates the prices of drugs, and Medicare. Of the twenty medications most frequently prescribed for seniors, all were less expensive for those on the VA plan. In fact, the median price difference was about 50 percent less and in the case of some drugs as much as ten times less. This law benefits only drug companies at a direct cost to taxpayers by defeating the concepts of purchasing power and the ability to negotiate in a free market.”

“Next, 14 percent of America’s overspending on healthcare is associated with health administration and insurance. As we will discuss later, the US healthcare system is a fragmented combination of many systems, and this fragmentation results in significant administrative costs. For-profit insurance companies charge rates that allow them to recoup not only the costs of providing care but also the costs of marketing, internal administration, and additional charges to buffer their profit margins.

Finally, nearly 10 percent of the overspending goes for the salaries of medical professionals. Physicians’ salaries — specialists’ salaries in particular — are much higher in the United States than in most developed countries. Nursing salaries in the United States are 50 percent higher than the GDP per capita compared to 10 percent higher than the GDP per capita in other OECD (Organisation for Economic Cooperation and Development) countries. Some of the pay differential is attributed to differences in the cost of attending nursing and medical schools as well as to differences in malpractice insurance costs, which are typically passed on to the patient. French physicians, for example, are reimbursed at far lower rates than American physicians; French medical school costs, however, are paid for by the state, and French malpractice insurance premiums are only a tiny fraction of what they are in the United States.”

“I’ll use the four main categories of health system financing and coverage identified so eloquently by T. R. Reid in his The Healing of America.

The Bismarck model uses a universal coverage insurance system in which the insurance companies are nonprofit. It’s usually financed jointly by employees and employers. Insurance for the unemployed, for self-employed retirees, and for students is typically covered by the government. This system is found in Germany, Japan, France, Belgium, and the Netherlands and is similar to the system many Americans obtain through their employers, except that in the United States, the insurance companies are for-profit and universal coverage is not mandatory.

In the Beveridge model, healthcare is provided by the government and financed through taxes. Medical treatment is a public service: many hospitals are owned by the government, doctors may be either government employees or private physicians who receive fixed service fees from the government, and patients often don’t receive a medical bill. Since government is the sole payer, costs and services are strictly controlled. This system is found in Britain, Italy, and Spain. In the United States, a similar system exists for Native Americans, military personnel, and veterans.

Healthcare providers in the National Health Insurance model (NHI) work privately, but a government-run insurance program strictly negotiates prices and limits services. Universal insurance programs tend to be less expensive thanks to the single-payer savings associated with lower-priced services, drugs, and operating costs. On the downside, this model sometimes results in lengthy waiting times for patient care. The NHI system is found in Canada and South Korea. The United States’s Medicare system, which covers American adults sixty-five years and older, operates in a similar fashion.

Finally, there is the Out-of-Pocket model, in which patients are almost entirely responsible for medical costs with little to no insurance coverage or government plan. This is more commonly found in poorer countries. For example, 91 percent of total health spending is out of pocket in Cambodia, 85 percent in India, and 73 percent in Egypt. In the United States, 17 percent of healthcare spending is out of pocket- either because of lack of insurance or because of health policy limitations.

The United States’s system of healthcare financing is a hodge-podge, especially compared to the simpler financing modalities and coverage strategies of our competitor nations. It’s like an incomplete jigsaw puzzle with lots of different sizes, shapes, and colors of healthcare financing and coverage. The result is greater inefficiencies, higher administrative costs, and yawning gaps in coverage for the working poor, students, and the unemployed.

The Patient Protection and Affordable Care Act (PPACA) of 2010, reforms of which are due to start in 2014, is aimed at closing some of those gaps, although the legislation remains under attack in both the courts and Congress. Even if implemented, millions will still be uninsured and the reforms may have only minimal, if any, impact on cost containment. In the meantime, the costs of our healthcare continue to skyrocket, with outcomes lagging far behind.”

“The uninsured in America are most likely to be Hispanic, for 32.8 percent of this group is uninsured versus the significantly lower rates of 15.8 percent uninsured among non-Hispanic African Americans and 10.2 percent uninsured among non-Hispanic Caucasians. This coverage difference may be related to such issues as culture and language barriers, but one of the most critical factors is economics. The median earnings in the United States for Hispanics are 12 percent lower than for African Americans, 31 percent lower than for Caucasian Americans, and nearly 37 percent lower than for Asian Americans. Hispanics are simply less able to pay the high costs of health insurance.”

“While Japan and Korea show obesity rates of less than 5 percent, and no competitor country has an obesity rate higher than 25 percent, the American obesity rate tips the scale at more than 30 percent.”

“We do not as a people drink alcohol to excess; American adults consume some 10 percent less alcohol than typical adults in the European countries on the list. In 2007 it was estimated that less than 5.2 percent of American adults were heavy drinkers, which should be to America’s health advantage, since excessive alcohol use can increase the risk of liver disease and injuries related to drunkenness and drunk-driving accidents.”

“A seventeen-country study by the WHO found that more than 16 percent of American adults had used cocaine, more than four times as many as in any other surveyed country, including our competitor nations of Spain, Belgium, France, Germany, Netherlands, and Japan.

For the next largest cause of disease mortality among Americans, cancer, the biggest killers are, in order: lung cancer, prostate cancer, and breast cancer, with lung cancer accounting for more American deaths than breast and prostate cancer combined and for more than 50 percent of the total cancer deaths in the US.”

“America has the highest age-specific lung cancer mortality rate for women and an average age-specific lung cancer mortality rate for men. This relative difference in performance is likely related to the fact that American women have roughly an average smoking prevalence, while American men have the lowest smoking prevalence among our competitors. Unfortunately with lung cancer, as elsewhere, inequality plays a role. African Americans have significantly lower survival rates from lung cancer than Caucasian Americans; the reason is detection rates, which are worse for African Americans. Overall, however, lung cancer mortality rates for men are much higher than for women. In the United States, for example, men are 1.8 times more likely to die of lung cancer than women while in Spain, men are more than ten times as likely to die of lung cancer than women.

Tobacco smoking causes a staggering 87 percent of lung cancer deaths — 90 percent of lung cancer deaths in men and almost 80 percent of lung cancer deaths in women — so it is heartening that smoking rates continue to decline in the United States. Today, the American-adult smoking rate is the lowest of any of the competing countries; only 16 percent of the population over fifteen years old are daily smokers. Smoking dropped by half between 1965 and 2006, and by 2004, nearly one-half of all Americans who had ever smoked had quit.”

“America’s road-traffic accident mortality is higher than average for both men and women. In developed countries in general, road-traffic accidents are the sixth-largest source of mortality, according to the latest figures from 2001. But the United States evidences a positive trend: the percentage of motor vehicle deaths as a fraction of the total US population has been declining steadily and is now about one-half the rate it was in 1980.”

“A difference in life expectancy of almost twenty-five years separates the mentally healthy from those with mental illnesses.”

“Americans in the top education and income levels have similar rates of diabetes and heart disease to those in Great Britain’s lowest education and income levels.”

“Americans eat more than one thousand calories per day more than the Japanese; the excess is roughly the number of calories found in two Big Macs. Japanese cuisine is also far lower in saturated fats, which predominate in the American way of eating. Not surprisingly, Japan enjoys an obesity rate that is nearly ten times lower than the American rate.”

“A study by the Physicians Committee for Responsible Medicine, for example, found that from 1995 to 2005, almost 75 percent of federal subsidies for food production went for dairy and meat while less than 0.5 percent supported the growing of fruits and vegetables. In a price-comparison study, the Bureau of Labor Statistics noted that, compared to 1978 prices, sodas, butter, and beer are all cheaper relative to prices in the rest of the economy while vegetables and fruits are in excess of 40 percent more expensive.”

“Although Americans have made exceptional progress in reducing cigarette smoking, tobacco taxes in the United States are generally lower than in Europe, and smoking by some groups — notably teenagers — is no longer declining.The evidence is clear that higher cigarette prices reduce overall cigarette consumption, especially among the young, minorities, and low-income smokers, but tobacco taxes are established by the states, and the disparities can be stunning. Tobacco-growing states, for example, add less than $0.70 a pack while others add more than $2 a pack in taxes.”

“Our homicide rate is about ten times that of Japan and triple that of France. Both of the market Stars in health, Japan and France, have strict gun-control laws while America has some of the most lax regulations. Japan, with one-tenth our homicide rate, has some of the strictest gun-control laws in the developed world.”

“Japan, the star of the health market, applies the Bismarck model in which the health-insurance system is financed jointly by employees and employers. First, Japan requires that insurance plans must cover everyone. All Japanese are required to enroll in an insurance plan, either employee health insurance or, for the self-employed and students, national health insurance. All elderly persons are covered by government-sponsored insurance. In all these programs, patients are free to choose their physicians and their treatment facilities.

Both insurance companies and hospitals in Japan are non-profit entities. (France and Germany, also health Stars, require private health insurance to be nonprofit.) For-profit corporations may neither own nor operate hospitals in Japan.

This universal, nonprofit coverage results in effective preventive medicine, complete prenatal care, and an appropriate use of emergency medical services. In addition, Japanese employers are required to offer a free annual checkup, thus reinforcing a culture of basic healthcare and shared responsibility for public health.”

“In the United States it has been estimated that fewer than 39 percent of all rapes and sexual assaults are reported to law enforcement.”

“This violent tendency [in the US] isn’t a new phenomenon. Back in 1916, for example, Chicago’s homicide rate, which was typical of large American cities, was about 10x larger than that of London, Europe’s most populous city at the time.”

“The US homicide rate is more than twice that of our closest competitor.”

“In a family or intimate assault, death is twelve times more likely if a gun is present than if another weapon is used. Analysis shows that an estimated 41 percent of gun-related homicides and 94 percent of gun-related suicides would not have occurred under the same circumstances had no guns been present.”

“If the homicide rate in the United States were brought down to the level of our competitors, more than twelve thousand lives per year would be saved.”

“In 2002, for example, an astounding 97.1 percent of charged offenses resulted in guilty pleas and, thus, in increased incarceration.”

“Prisoners are the perfect “just-in-time” laborers and have actually displaced manufacturing and even unionized public sector jobs in some locations, most notably when US Technologies sold its plant in Austin, Texas, and opened production in a Texas prison.”

Military

“Following defeat in World War II, for example, Japan was occupied by the United States, which imposed a constitution that forbade the country from maintaining a standing army or waging war. Since the end of the occupation, a series of treaties have further secured America’s military presence, consisting, as of 2009, of 35,688 military personnel in eighty-five facilities, plus 5,500 civilians. For this large military expenditure, Japan provides compensation, the “sympathy budget.” It’s not unlike what a mercenary does; that is, the United States provides protective services for a negotiated price, though in this case the negotiations should be more transparent.

South Korea is another US “protectorate.” American soldiers comprised the largest single element of the United Nations force supporting the South in the Korean War of the 1950s, and we have continued to maintain a major presence on the southern side of the Korean Demilitarized Zone that still divides North and South Korea. That force comprises some twenty-five thousand troops, and their presence was formally recognized in 1978 with the establishment of a Combined Forces Command. An American four-star general commands the combined US and Republic of Korea forces.”

“Evidence that European countries may be showing a willingness to assume more of the responsibility for their own defense is Eurocorps, a multinational standing army of sixty thousand troops under the control of the European Union. Eurocorps was deployed in Bosnia, Kosovo, and Afghanistan.”

“In comparative terms, the United States spends a higher percent of its GDP — 4.7 percent — on military expenditures than any of the competitors. This current rate is significantly higher than the 3 percent America spent in 2000, a reflection of the costs of the ongoing war in Afghanistan and increased troop deployments in the Middle East.”

“The fact that America spends so much more per GDP on the military than its competitor countries isn’t explained by the higher percentage of its population serving in the military. Rather, the major expense differential is due to military research and development. The Pentagon spends about $28,000 per soldier per year on research and development, about four to five times the amount spent by Europeans.This massive investment has resulted in the development of the first atomic bomb, the first hydrogen bomb, and inventions with direct civilian application like Global Positioning Systems and the Internet.”

“Given the economic scale of the European Union, the time has come for that entity to make a significantly greater contribution of finances and troops to NATO so that the United States can reduce or even withdraw from its European commitments. At the same time, we need to rethink our commitments in Japan and South Korea. If we are operating as a protector of these countries, then the financial terms should be explicit; we should evaluate the costs of our deployments and bill those nations appropriately. If the two countries are not willing to pay for our protective services, then we need to rethink why we are spending billions of dollars there.”

“Among the steps that could be taken to operate more efficiently is to eliminate no-bid contracting in which there is no competition to keep costs down, a process that undermines the free-market system and virtually guarantees that the government will be overcharged.”

Education

“US high school graduation rates rose from less than 10 percent in 1910 to about 77 percent in 1970–and has remained at or near that level ever since!”

“When it comes to recruiting top talent for the teaching profession, South Korea, the education market Star, has set a standard that is tough to match. Prospective college students must take a national College Entrance Exam (like America’s SATs), and any students who want to be trained as primary school teachers must score in the top 5 percent! This means that Korean primary school teachers are the academic elite, who later go on to educate Korea’s youngest, most impressionable children. The supply of primary school teachers is carefully managed so that graduates easily find jobs after completing their training.”

“Another factor that can’t be ignored in exploring the high quality of Korean school teachers, especially primary school teachers, is their elevated social status. Status draws more top talent so it is not surprising that in Korea, teaching is the most popular career choice among young Koreans. Funneling top students into teaching is not specific to Korea. In three of the top school systems in the world — Singapore, Finland, and Korea — 100 percent of candidate teachers come from the top third of students. In America, only 23 percent of new teachers come from the top third, and only 14 percent of the teachers in high-poverty schools came from the top third. In fact, nearly one-half of America’s teachers come from the bottom third of college classes.”

“In Korea, the financial remuneration and the cultural respect accorded teachers help that nation maintain a teacher turnover rate (the percentage of teachers who are replaced annually) of 1 percent; in the United States, the rate is about 14 percent overall and 20 percent in the high-need schools.”

“The state-by-state range of preschool enrollment rates is wide, from 28 percent in Nevada to 67 percent in New Jersey. Nevada, with the lowest rate of preprimary school education, also has the lowest rate of public high school graduation- only 52 percent.”

“American children who were randomly chosen from a low-income neighborhood to attend preschool were one-fifth as likely to become chronic criminal offenders as the matched control group. Given the vastly cheaper costs of preschool over the costs of likely incarceration later, the investment in preprimary education is not only sensible but also cost-effective.”

“America’s enrollment ratio for preprimary education is far below that of the competition and is nearly one-half the enrollment level of leaders like France, Belgium, Italy, and Spain. One notable exception is the low ranking of Korea, which compensates through other mechanisms to achieve its performance. It is noteworthy that the enrollment in preprimary education in the United States has climbed from 27 percent in 1965 to about 60 percent by 1990 but has remained relatively stagnant ever since.”

“In the American school system, there are no national standards for the length of the school year. Rather, this decision is left up to individual states. A majority of states require a minimum school year of 180 days; ten states require fewer than 180 days; and one state, Minnesota, has n minimum requirement for either the days of the school year or the hours of instruction. The American minimums are in stark contrast to the 220 days averaged by top-performing South Korea and the 201 days in Japan, also a top performer.It seems clear that 25 percent more days of school provide more exposure to educational materials. Almost as important, however, is the timing of school vacations:

The long summer vacation in the American school year is not beneficial for student education, although it may be highly beneficial for some industries — tourism, summer camps, airlines — which rely on the long summer vacation for much of their revenue. American students typically are given ten weeks off for the summer, plenty of time to regress in their knowledge and study habits. Forgetting curves, developed in the late nineteenth century by German psychologist Hermann Ebbinghaus, demonstrate that memory retention declines exponentially over time, so the long American summer vacation takes a major toll on a student’s ability to progress.

In Korea, the school year is divided into two semesters separated by two vacation periods of about five weeks each: summer vacation (mid-July to late August) and winter vacation (late December to early February). Korea’s students also have one week off in the fall. After winter break, students return to school for one week to take end-of-year exams; they then enjoy a short vacation from mid-February to early March.”

“Further exacerbating this funding disparity is the formula under which the federal government awards its education funding to states; it is based on a state’s per-pupil spending rather than on equal distribution of the funding between poor and wealthy locations. Yet it has been shown that low-income students attending affluent schools tend to perform better than higher-income students attending poor schools.Moreover, historically, when states have reduced the funding gap between rich and poor districts, they have experienced a corresponding decline in the performance gap.”

“It has been estimated that the high cost of higher education prevents nearly one-half of college-qualified high school graduates from attending a four-year institution and keeps nearly one-fourth from attending any college at all.”

“In 1979, Pell Grants, the need-based grants by the federal government to lower-income college undergraduates, covered about 75 percent of the cost of a four-year college; thirty years later, this had dropped to 33 percent.”

“Only 17 percent of charter schools were shown to have higher student-performance gains than regular public schools, while 37 percent performed less well and the rest offered no significant change. Attrition rates in charter schools tend to be high.”

“Another so-called free-market solution that has failed is the voucher system. Where vouchers have been introduced, students using them to study in private schools have failed to show statistically significant improvement over those not receiving vouchers.

Reducing classroom size is a solution beloved of the media and popular with teachers, parents, and such advocacy groups as the Educational Priorities Panel and Class Size Matters. The intuitive appeal of smaller classes is that they can ensure better focus and greater individual attention by the teacher. The data, however, do not support this argument. From 1980 to 2005, for example, the student/teacher ratio in the United states declined by 18 percent, yet more than 90 percent of the 112 studies examining the impact of class size showed either no effect or a negative effect on learning. Those studies that do show an effect indicate that a massive decrease in student/teacher ratio would be necessary for the impact to be considered substantial. In fact, efforts to reduce class size often result in lower teacher quality as hiring standards and salaries are reduced. When California implemented a small-classroom policy in 1996, the percentage of unprepared teachers increased sharply, with the lowest-income schools absorbing the largest increase in unprepared teachers while wealthier schools were only marginally affected.

Moreover, top-performing countries like Japan and South Korea have the highest class sizes. The average primary-school class in both countries is greater than twenty-eight students; the United States averages about twenty-three, and other competitor countries have a mean and median of around twenty-one students. For secondary education, the average class size in Japan and Korea exceeds thirty-three students, much larger than the US average of twenty-three and a mean and median of twenty-three in the other competitor countries.

This certainly doesn’t mean that larger class sizes improve education. In South Korea and Japan, however, the larger class size allows those school systems to pay teachers more competitive salaries while containing overall costs.”

“Certainly, salaries will need to rise, and practices will need to change in order to “flip” the current ratio of American teachers spending far more time teaching and far less time preparing lessons or improving their craft than our competitor countries. For example, 80 percent of an American teacher’s work time is spent teaching, compared with an average of about 60 percent in the OECD countries.”

Democracy

“While about 95 percent of Australian voters cast votes along party lines in federal elections, the preferential voting system allows people to vote for smaller parties without tipping an election.”

“When the Constitution was written the founders didn’t anticipate that people would live year-round in Washington, DC.”

“Each voter gets two votes: one is a personal vote for a specific candidate; the other is for the voter’s preferred political party. The second vote — the party vote — determines how many representatives will be sent from each party to the national parliament, the Bundestag. One-half of the seats in the Bundestag are allocated to the winners from the personal vote while the other half are allocated based on the party distribution. This voting method reflects both the individual’s candidate choice as well as the party’s share of the overall vote.”

“The founders recognized that in order for the House of Representatives to continue being “representative,” the number of members would need to increase as the nation’s population grew. For this reason, the first proposed amendment to the Constitution provided guidance on how to increase the size of representation as popula- tion increased, but this amendment failed to pass. Instead, the number of House members grew as territories became states by successive pieces of legislation, but the limit was capped at the 435-member count reached in 1910. As a result, the House of Representatives has not come close to keeping pace with the population, which has tripled since 1910. The original ratio of representation has therefore gone from approximately one representative for every 30,000 people at the time the Constitution was enacted to about one for every 720,000 people as of this writing.”

“While it is somewhat impractical to grow the House of Representatives at the same rate as the nation’s population, it is nevertheless the case that America’s rate of national representation is on a completely different scale from that of its international competitors. Among our competitor nations, the average level of national representation (including both houses for bicameral systems and just the single house for the three unicameral systems of Greece, South Korea, and Portugal) is about one representative for every 85,000 people. The United States is thus nearly seven times less representative than the competition and more than three times less representative than the next closest competitor, Japan.”

“New York City, with its population of more than eight million people, has more residents than nearly forty of the fifty American states.”

“India has succeeded in holding national elections using computer technology that was developed, is owned, and is operated by the Indian government. Surely the US government can aspire to do as well as that.”

Income Inequality

“Where are the top income earners getting their income? About 20 percent of the top 0.1 percent of American income earners work in the finance industry, about 40 percent are executives and managers in nonfinance industries, while doctors and lawyers make up roughly 10 percent.”

“The United States has far less income mobility than other countries, as measured not just in the ranking but in the magnitude of the elasticity as well. A man in the United States is nearly twice as reliant on his father’s background (an income-elasticity rating of 0.41) than a man in Canada (income elasticity, 0.23), despite the two countries having relatively similar cultures, income levels, and racial diversity.”

“One practical way to begin addressing tax policy changes is to close the loophole that defines hedge fund managers’ incomes as capital gains rather than as earned income. This income is taxed at the rate of 15 percent as of this writing; were the managers’ incomes defined as earned income, hedge fund managers would pay the same marginal tax rates the rest of us pay. Granted, there is a relatively minuscule number of people profiting from this loophole, yet the loophole is estimated to be costing the US taxpayer about $6 billion a year, with almost $2 billion of it attributed to only twenty-five individuals. Unfortunately, this small-but-well-heeled group of hedge fund managers contributes substantively to politicians of both parties, so there continues to be resistance to closing this blatant loophole.”

“Today’s payroll taxes are highly regressive in that they are assessed at a fixed rate up to an annual wage maximum ($106,800 as of 2010) and are not assessed beyond that salary. As a result, an individual earning $50,000 pays a far higher effective tax rate than one earning $500,000. A simple measure to resolve this glaring inequality is to eliminate the annual wage maximum.”

“In Germany, executive compensation is reviewed by what is known as code-termined boards — that is, corporate boards on which workers have a seat at the table and can thus control the ratio of executive-to-worker pay. Such a structural change would be difficult to legislate in the United States, where union membership and therefore, union power are on the wane. Rather, shareholder activism can be a potent tool in the United States for reining in corporate excesses — for example, huge salary packages and the golden parachutes given to poor-performing executives. Large institutional stockholders like CaPERS, the California Public Employees’ Retirement System, have shown such activism on a number of issues in companies in which they hold shares. After all, it is the shareholders’ money that boards spend on executive salaries and golden parachutes. Therefore we recommend that shareholders in publicly held companies organize for action to ensure the good of the shareholders and not just the executives and the board.”

“There is a marked racial inequality among crime victims, homicide is the sixth-most-common cause of mortality for African Americans and the eighth-most-common for Hispanics; it is not among the top fifteen causes of death among Caucasians.”