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Trotti, John

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Monday, June 14, 2010 8:00 PM

The Curse of Stranded Investment

By: Trotti, John Comments

An e-mail totally unrelated to any of the subjects I normally monitor floated up from some unseen hand and caught my attention. The paper had to do with predicting the number of doctors, general practitioners, specialists, nurses, and allied health professionals who will be required to meet health care demands in the future. Not only is the length of clinical training an issue, but advances in medical treatment also can change work-force requirements rapidly.

As case in point, consider how new ways—stents, catheterizations, and nonsurgical interventions—of opening blocked arteries, for example, have cut demand for bypass surgery—and thus for the surgeons who perform it. Because the United Kingdom was late in responding to this trend, the supply of these surgeons nearly doubled from 1998 to 2007, reducing the average number of operations they undertook by 88% during the period.

Inasmuch as clinical training in other specialties can take as long as 10 years, the cost in money and wasted human endeavor is colossal…a monument, in my humble opinion, to the substitution of governmental agenda for the dynamics of the marketplace. It is the very epitome of stranded investment that only government can accomplish.

Taking my humble opinion a bit further, this situation has grave implications for many of our institutions here, including the waste industry, where the political muscle of a well-funded coterie has managed to gain and retain control of a large portion of the wastestream in the name of recycling, effectively blocking the incursion of other approaches to waste diversion. Nowhere is this more evident than in California, where, despite studies that show the environmental superiority of a number of energy-from-waste processes referred to as conversion technologies(CTs), these self-proclaimed environmental organizations have successfully blocked diversion credit equal to that of conventional recycling.

Now whether CTs make economic sense or not, or whether waste authorities will rush to embrace them were they to be accorded equality in a system that mandates 50% diversion, is not the point here. Rather it’s whether parochial interests should be able to create and maintain a stranglehold on what for them is most certainly a commodity through government fiat.

Proponents of California’s Assembly Bill 222—a bill that passed out of the state’s lower chamber only to become mired in the State Senate’s Environmental Committee—have bent over backward to answer the objections posed by entrenched interests, who appear poised to continue their blockade.

As with the political control of medicine in the UK, we’re seeing the same situation develop here, all in the name of “doing good,” of course, but in fact protecting what otherwise would be stranded investment.

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