The Obama administration and Speaker of the House Nancy Pelosi are determined to shred every procedural roadblock standing in the way of their massive restructuring of the health insurance industry in this country.
At first, it was only reconciliation. Normally, the House passes legislation. Then the Senate passes their own version of the same bill. Then a conference committee of Senators and Representatives negotiates a compromise version of the bill, that is voted on again by both Houses of Congress. When that passes, it goes to the President for signature to be enacted into law.
The problem with that system (at least from Obama and Pelosi’s point of view), is that the compromise legislation has to pass the Senate again. With the election of Scott Brown from Massachusetts to fill the seat of the late Edward Kennedy, there are now 41 Republicans in the Senate. With a united front, they can filibuster the bill until it dies a natural death.
Hence the reconciliation maneuver. Under Senate rules, passage of measures affecting the budget can have the compromise, or “reconciled” version passed through the Senate on a vote requiring only a majority of 51 votes. Since the filibuster does not apply, sixty votes are not required to cut off debate.
Pelosi’s reconciliation plan then becomes to push through a House vote on the original Senate version of the health insurance restructuring. The House will then pass a series of amendments to the Senate version, making it more to their liking. This package of amendments will then be presented as a budgetary reconciliation, which can avoid the filibuster. The fig leaf covering this end run around the rules is that Obamacare is intended to reduce the deficit.
I have been watching television for well over forty years. I have been exposed to millions of commercial messages. I have become quite adept at knowing when I’m being lied to.
I know that the fast food hamburger will not be plump and juicy like it shows on screen. I know that if I spray on a cheap cologne, women will not leap out of the woodwork, seeking to have their way with me. And I know that the current package of health insurance reform will not reduce the deficit.
Obamacare is not a budget reconciliation bill, it is a policy bill, and using the process of reconciliation to get a around the procedures of limited government stinks to high heaven.
Tuesday, March 16, 2010
Monday, March 8, 2010
Rising Productivity
I don’t expect reporters to have much in the way of business literacy. Strategic planning and discounted cashflow analysis are difficult subjects, and it doesn’t surprise me that they aren’t part of the normal journalism curricula. But algebra? I had algebra in the 8th grade.
The source of my ire is a report that has been put out by the Labor Department, and the interpretation thereof by the media.
The gist of the report is that productivity grew at an unusually rapid rate in the fourth quarter last year. Labor productivity grew at an annual rate of 6.9% during the last three months of the year. At the same time, the report stated that unit labor costs dropped t a rate of 5.9%.
The commentary I have seen on this report so far makes it out to be bad news. The viewpoint seems to be that rising productivity means income is dropping. Also, if employers can increase output without hiring more workers, that doesn’t help the unemployed. This ignores the reality that increasing productivity is what increases standards of living. Without increasing productivity, we’d all be stuck at the hunter-gatherer stage, which doesn’t strike me as too much fun at all.
But what really gets me is the assumption that when labor costs fall, that means households have less money to spend. This is a complete misreading of the statistics.
What the report actually says is that unit labor costs have fallen. That does not mean workers are getting paid less. It means that workers are producing more product for the same amount of money. In point of fact, falling unit labor costs are just the same thing as rising productivity, expressed in a different way.
Let’s take an example. Assume that in 2008, a worker getting paid $10 per hour produces 100 units of product in an hour. The unit labor cost of that product is $.10, the $10 the worker got paid divided by the 100 units produced.
In the fourth quarter of 2009, the same worker would have produced 107 units of product in the same hour of production. To figure out the increase in productivity, we divide the 4th Q 2009 output by the 2008 output to get 1.07. Productivity increased by 7%. In this same example, the unit labor cost drops to $.0935. This is a 6.5% drop in unit labor costs. But the worker still gets the same $10 income he got before.
The real news is that productivity growth of over 6% cannot be sustained. That red hot pace is an artifact of starting from a lower base level, due to the recession induced drop in demand. Once demand started to pick up, the workforce that businesses kept on in anticipation of an upturn went from coasting along to serious work. A big jump in production was the result. It probably doesn’t hurt that most businesses, given any kind of a choice, will keep their most productive workers on the payroll, dropping the less than stellar performers.
This sharp jump in productivity is a sign that demand is picking up again. Once businesses have wrung all the benefit out of the existing workforce that they can get, the next step is to start hiring more employees.
Increasing productivity is good news, not bad news.
The source of my ire is a report that has been put out by the Labor Department, and the interpretation thereof by the media.
The gist of the report is that productivity grew at an unusually rapid rate in the fourth quarter last year. Labor productivity grew at an annual rate of 6.9% during the last three months of the year. At the same time, the report stated that unit labor costs dropped t a rate of 5.9%.
The commentary I have seen on this report so far makes it out to be bad news. The viewpoint seems to be that rising productivity means income is dropping. Also, if employers can increase output without hiring more workers, that doesn’t help the unemployed. This ignores the reality that increasing productivity is what increases standards of living. Without increasing productivity, we’d all be stuck at the hunter-gatherer stage, which doesn’t strike me as too much fun at all.
But what really gets me is the assumption that when labor costs fall, that means households have less money to spend. This is a complete misreading of the statistics.
What the report actually says is that unit labor costs have fallen. That does not mean workers are getting paid less. It means that workers are producing more product for the same amount of money. In point of fact, falling unit labor costs are just the same thing as rising productivity, expressed in a different way.
Let’s take an example. Assume that in 2008, a worker getting paid $10 per hour produces 100 units of product in an hour. The unit labor cost of that product is $.10, the $10 the worker got paid divided by the 100 units produced.
In the fourth quarter of 2009, the same worker would have produced 107 units of product in the same hour of production. To figure out the increase in productivity, we divide the 4th Q 2009 output by the 2008 output to get 1.07. Productivity increased by 7%. In this same example, the unit labor cost drops to $.0935. This is a 6.5% drop in unit labor costs. But the worker still gets the same $10 income he got before.
The real news is that productivity growth of over 6% cannot be sustained. That red hot pace is an artifact of starting from a lower base level, due to the recession induced drop in demand. Once demand started to pick up, the workforce that businesses kept on in anticipation of an upturn went from coasting along to serious work. A big jump in production was the result. It probably doesn’t hurt that most businesses, given any kind of a choice, will keep their most productive workers on the payroll, dropping the less than stellar performers.
This sharp jump in productivity is a sign that demand is picking up again. Once businesses have wrung all the benefit out of the existing workforce that they can get, the next step is to start hiring more employees.
Increasing productivity is good news, not bad news.
Wednesday, March 3, 2010
Chile's Hour of Need
The government of Chile is still restoring order after the magnitude 8.8 earthquake that struck the southern half of the nation last week. After some initial confusion, they have requested international aid. According to an interview with the US ambassador to Chile, the confusion was because Chile does not have a history of receiving international aid. In fact, Chile is a donor nation.
Still, the devastation is widespread, and they could use a hand.
So I'm going to go out and buy some grapes, and grape by-products.
Located south of the equator, Chile's seasons are the reverse of ours. Their summer is just ending, and their winter takes place during our summer months. This shift in growing seasons means Chile is in an ideal position to supply fresh fruit and vegetables when fresh produce is in short supply from our own growers. Ordinarily I try to buy American to the greatest extent possible, but due to the emergency I'll make an exception and stock up on Chilean grapes for the next few weeks.
And the grape by-products? I plan on picking up a case of Chilean cabernet.
I just figure it's better to help the Chileans by trading with them, then by giving them some kind of handout. If we help Chile's businesses, those businesses will take the lead in rebuilding the country. If we give handouts, we only encourage dependency.
Of course, I feel the same way about charitable giving in this country as well, and for the same reason.
Sunday, February 28, 2010
Graph of Long Term Unemployment
Okay, this scares me. here's a graph from an article in the New York Times last week concerning long term unemployment:
The number of long term unemployed is spiking about three times higher than it has been for the last thirty years. It is much higher than the recession of early eighties, and that one was rough. As a percentage of the workforce, it works out to be about 2.5%.The economy is beginning to show signs of improvement, but not quickly enough for these folks. Many of them are subsisting on unemployment benefits, and those benefits are starting to run out.
The old saying is that necessity is the mother of invention. A lot of people are going to have to be very creative to eke out a living for the next few years.
Wednesday, February 24, 2010
The CARD Act or Building a House of Cards
The Credit CARD Act went into effect this week, changing the rules for banks and other credit card issuers. One of the changes is that they will now have to put a statement on the front of your monthly bill, telling you how long it will take you to pay off your outstanding balance if you make only the minimum payment. I imagine that some people will get a notice that reads something like this:
“Your estimated life expectancy is 24 years and 7 months from your statement date. Four months later will be your last payment on the outstanding balance.”
Seriously, one of the major provisions of the legislation is that it prohibits the practice of universal default. Under the old rules, if you made a late payment on one bill, your credit card could raise your interest rate on the existing balance you had with them.
Universal default is one of those things that really hack people off. “I’ve never made a late payment to you guys,” the cardholder would cry out. “Why are you raising my interest rate?”
“Simple,” the bank would respond. “A) If you skipped a payment on one bill, we could be next. That puts you into the riskier class of customers who get charged higher interest rates. B) Because we can.”
I’ve never quite figured out the logic behind universal default. Oh, I get that once you start delaying payments, you are a riskier customer. The thing is, it looks to me like raising rates on an existing customer sets up a feedback loop. If you’re strapped for money, cranking up the interest you’re paying makes you more likely to default, not less. “Every month I pay, but my balance keeps getting bigger. Fine, I’ll just stop paying altogether. You want to hurt my credit rating, go ahead.”
I assume that the credit card companies have run the statistical models that tell them that even if they push some customers into default, the higher interest charges on the remaining customers more than make up for it. Or maybe their experience is that once the average customer misses a payment on any card, they only make a couple more payments on the other cards before they file bankruptcy, no matter what the interest rate is. In that case, you better make your money while you can.
Regardless, universal default is now banned. The credit card companies cannot raise your rate on existing balances just because you are late on another card. What they can do, however, is drop your credit limit with no prior notice.
To me, this looks like a fight over allocating risk management duties, between the guy who borrows the money, and the guy who loans it.
In the history of credit, there have been swings over time in terms of who bears the risk of default. For example, in the eighteenth and early nineteenth century, default risk was more evenly spread between borrower and creditor. Sure, if you stopped paying on your debts, your creditors had to write off the loss. But they in turn could stick you in debtor’s prison. That seems like a pretty fair tradeoff to me.
With the advent of modern credit cards, more of the default risk was shifted over to the creditor. All that backs up a credit card is your promise to pay it off. If you are an honest man, your word is your bond. When I meet one of those guys, I’ll let you know. Seriously, I don’t know too many people who would forego using a credit card to get something they wanted, just because they might have trouble paying off the debt. After all, what’s the worst that could happen? Your credit rating might get dinged. Most people will enjoy the good stuff now, and worry about that tomorrow.
With all of the risk on the part of the creditor, credit standards were naturally higher. It used to be much more difficult to get a credit card. As the pool of available credit expanded to include riskier borrowers, the banks undertook tactics designed to shift some of the default risk back onto borrowers. Tactics like universal default.
Now that Congress has pushed the pendulum back in the other direction, look for credit standards to tighten up again. Also, some of the benefits given to good credit risks, like rewards points and no annual fee accounts are probably going to fall by the wayside.
For our society as a whole that’s probably a good thing. Learning to live within your means isn’t a bad idea. In the meantime, I’m going to keep paying off my cards in full every month.
“Your estimated life expectancy is 24 years and 7 months from your statement date. Four months later will be your last payment on the outstanding balance.”
Seriously, one of the major provisions of the legislation is that it prohibits the practice of universal default. Under the old rules, if you made a late payment on one bill, your credit card could raise your interest rate on the existing balance you had with them.
Universal default is one of those things that really hack people off. “I’ve never made a late payment to you guys,” the cardholder would cry out. “Why are you raising my interest rate?”
“Simple,” the bank would respond. “A) If you skipped a payment on one bill, we could be next. That puts you into the riskier class of customers who get charged higher interest rates. B) Because we can.”
I’ve never quite figured out the logic behind universal default. Oh, I get that once you start delaying payments, you are a riskier customer. The thing is, it looks to me like raising rates on an existing customer sets up a feedback loop. If you’re strapped for money, cranking up the interest you’re paying makes you more likely to default, not less. “Every month I pay, but my balance keeps getting bigger. Fine, I’ll just stop paying altogether. You want to hurt my credit rating, go ahead.”
I assume that the credit card companies have run the statistical models that tell them that even if they push some customers into default, the higher interest charges on the remaining customers more than make up for it. Or maybe their experience is that once the average customer misses a payment on any card, they only make a couple more payments on the other cards before they file bankruptcy, no matter what the interest rate is. In that case, you better make your money while you can.
Regardless, universal default is now banned. The credit card companies cannot raise your rate on existing balances just because you are late on another card. What they can do, however, is drop your credit limit with no prior notice.
To me, this looks like a fight over allocating risk management duties, between the guy who borrows the money, and the guy who loans it.
In the history of credit, there have been swings over time in terms of who bears the risk of default. For example, in the eighteenth and early nineteenth century, default risk was more evenly spread between borrower and creditor. Sure, if you stopped paying on your debts, your creditors had to write off the loss. But they in turn could stick you in debtor’s prison. That seems like a pretty fair tradeoff to me.
With the advent of modern credit cards, more of the default risk was shifted over to the creditor. All that backs up a credit card is your promise to pay it off. If you are an honest man, your word is your bond. When I meet one of those guys, I’ll let you know. Seriously, I don’t know too many people who would forego using a credit card to get something they wanted, just because they might have trouble paying off the debt. After all, what’s the worst that could happen? Your credit rating might get dinged. Most people will enjoy the good stuff now, and worry about that tomorrow.
With all of the risk on the part of the creditor, credit standards were naturally higher. It used to be much more difficult to get a credit card. As the pool of available credit expanded to include riskier borrowers, the banks undertook tactics designed to shift some of the default risk back onto borrowers. Tactics like universal default.
Now that Congress has pushed the pendulum back in the other direction, look for credit standards to tighten up again. Also, some of the benefits given to good credit risks, like rewards points and no annual fee accounts are probably going to fall by the wayside.
For our society as a whole that’s probably a good thing. Learning to live within your means isn’t a bad idea. In the meantime, I’m going to keep paying off my cards in full every month.
Thursday, February 18, 2010
Two Views of Dysfunction
I ran across the Werking Gerl blog the other day. It's like staring at the scene of an accident. You know you shouldn't look, but you just can't pull your eyes away. The blogger is a free lance writer based in Brooklyn. Starting last November she lost her regular job, and decided that the solution to her problems was to rely on the New York City public assistance system (AKA welfare). Unsurprisingly, the city's bureaucrats have not leapt to provide the woman with the assistance to which she believes she is entitled.
If you start at the beginning, and read forward in time, it is like watching a descent into madness. Her tone gets increasingly strident with every encounter. One of the things that interests me is that even when she was gainfully employed, she was already drawing food stamps. That tells me that from the very beginning, the blogger has been drawing more off the system than she has been paying in taxes.
Of course, it is her right to draw food stamps, and it is also her right to have her rent paid by the city. Once you've grasped that basic concept, her outrage becomes much more explicable.
Then there's Filthy Richmond. Now this is just hilarious. This blogger puts the fun in disfunction. As a matter of fact, I think I did this girl's taxes.
If you start at the beginning, and read forward in time, it is like watching a descent into madness. Her tone gets increasingly strident with every encounter. One of the things that interests me is that even when she was gainfully employed, she was already drawing food stamps. That tells me that from the very beginning, the blogger has been drawing more off the system than she has been paying in taxes.
Of course, it is her right to draw food stamps, and it is also her right to have her rent paid by the city. Once you've grasped that basic concept, her outrage becomes much more explicable.
Then there's Filthy Richmond. Now this is just hilarious. This blogger puts the fun in disfunction. As a matter of fact, I think I did this girl's taxes.
Saturday, February 13, 2010
Adventures in Tax Preparation, Part II
At my day job, people know I do taxes for H & R Block. The number one tax question they ask me? “How does that other guy we work with get such big tax refunds? He said he got over $7000, and he makes less than I do, even with my side job.”
The short answer to this question is that the other guy has kids, but it is actually a little more complicated than that. To try and explain it, I run out some numbers for people.
Let’s assume that the other guy (we’ll call him TOG for short) is married, with two small children. We will further assume that Mr. and Mrs. Tog have a combined income of $26,000 between them. We’ll enter that $26K onto the front page of their Form 1040. So far, so good.
Now we’ll turn the Form 1040 over to page two, which is where all the real action is. First, the Tog’s will probably take the married filing jointly standard deduction of $11,400. Then the two adults and two children generate four personal exemptions of $3650, or a total of $14,600. You subtract the standard deduction and personal exemptions from their gross income to arrive at the Tog’s taxable income, which is $0. The Tog’s do not owe any Federal income tax.
So now, let’s start calculating the size of their refund. Right off the top, they get back any withholding taken from paychecks throughout the year. For the purposes of this illustration, we will use a figure of $1700. It could be more, could be less, depending what they set up with their employer. Whatever they withheld, they’re getting 100% of it back. Remember, they owe no taxes.
Next, we add in to their refund the Making Work Pay credit. This was part of the Obama stimulus package for 2009 and 2010. The Tog’s are married, so even if only one held a job, they still get $800.
Now we’re to the part where the children really come into play. If they actually owed taxes, they would be eligible for the Child Tax Credit of $1000 per child, which would wipe out the first $2000 of taxes owed. Since the Tog’s don’t owe any taxes, they don’t get the Child Tax Credit. Instead, they get the refundable Additional Child Tax Credit of $2000.
But, as the infomercials say, wait, there’s more! The Togs are a low income couple, qualifying for the Earned Income Credit. The EIC is a phase-in, phase-out credit, increasing to a plateau as you earn more income, than gradually reducing to zero as you earn a higher income. At $26,000 of earned income (note, the EIC works on earned income, not taxable income) you get about $3000. Fully refundable, of course.
That just about does it. Let’s tote up the board, shall we?
Withholding: $1700
Making Work Pay Credit: $ 800
Add’l Child Tax Credit: $2000
Earned Income Credit: $3000
Total: $7500
See, it wasn’t that hard to figure out how the Tog’s got such a big refund after all. Processing the paperwork is a different matter, of course which is why there is a market for paid tax preparers.
The thing that jumps out at you is how much of that money wasn’t the Tog’s in the first place. Even with no withholding, they would have received $5800 from the Federal government, a 22% boost in their income. These are straight transfer payments, going from people who actually pay taxes into the pockets of people who do not. Classic redistribution of wealth.
There are those of us who are concerned that the US is going to turn into a socialist state. But from the point of view of someone who prepares taxes, it has already happened.
The short answer to this question is that the other guy has kids, but it is actually a little more complicated than that. To try and explain it, I run out some numbers for people.
Let’s assume that the other guy (we’ll call him TOG for short) is married, with two small children. We will further assume that Mr. and Mrs. Tog have a combined income of $26,000 between them. We’ll enter that $26K onto the front page of their Form 1040. So far, so good.
Now we’ll turn the Form 1040 over to page two, which is where all the real action is. First, the Tog’s will probably take the married filing jointly standard deduction of $11,400. Then the two adults and two children generate four personal exemptions of $3650, or a total of $14,600. You subtract the standard deduction and personal exemptions from their gross income to arrive at the Tog’s taxable income, which is $0. The Tog’s do not owe any Federal income tax.
So now, let’s start calculating the size of their refund. Right off the top, they get back any withholding taken from paychecks throughout the year. For the purposes of this illustration, we will use a figure of $1700. It could be more, could be less, depending what they set up with their employer. Whatever they withheld, they’re getting 100% of it back. Remember, they owe no taxes.
Next, we add in to their refund the Making Work Pay credit. This was part of the Obama stimulus package for 2009 and 2010. The Tog’s are married, so even if only one held a job, they still get $800.
Now we’re to the part where the children really come into play. If they actually owed taxes, they would be eligible for the Child Tax Credit of $1000 per child, which would wipe out the first $2000 of taxes owed. Since the Tog’s don’t owe any taxes, they don’t get the Child Tax Credit. Instead, they get the refundable Additional Child Tax Credit of $2000.
But, as the infomercials say, wait, there’s more! The Togs are a low income couple, qualifying for the Earned Income Credit. The EIC is a phase-in, phase-out credit, increasing to a plateau as you earn more income, than gradually reducing to zero as you earn a higher income. At $26,000 of earned income (note, the EIC works on earned income, not taxable income) you get about $3000. Fully refundable, of course.
That just about does it. Let’s tote up the board, shall we?
Withholding: $1700
Making Work Pay Credit: $ 800
Add’l Child Tax Credit: $2000
Earned Income Credit: $3000
Total: $7500
See, it wasn’t that hard to figure out how the Tog’s got such a big refund after all. Processing the paperwork is a different matter, of course which is why there is a market for paid tax preparers.
The thing that jumps out at you is how much of that money wasn’t the Tog’s in the first place. Even with no withholding, they would have received $5800 from the Federal government, a 22% boost in their income. These are straight transfer payments, going from people who actually pay taxes into the pockets of people who do not. Classic redistribution of wealth.
There are those of us who are concerned that the US is going to turn into a socialist state. But from the point of view of someone who prepares taxes, it has already happened.
Tuesday, February 9, 2010
Adventures in Tax Preparation
Whoever came up with the name homo sapiens, “thinking man,” for our species clearly never worked as a tax preparer. Actual conversation:
Tax preparer: “How do you want to receive your refund? We can do direct deposit into your checking account, or at a higher charge we can cut you a check.”
Client: “I want a check.”
TP: “Are you sure? You told me you wanted to keep your fees as low as possible. We charge you $20 for a check. Direct deposit is free.”
C: “I’ve always gotten a check.”
TP: “Let’s work through this. If we cut you a check, you have to come back to this office to pick it up. You’ll then drive over to your bank to deposit the check. With direct deposit, the money is placed directly into your account. And we’re going to charge you $20 for putting you through the extra effort.”
C: “Okay. But I still want to get a check.”
At times like this I wonder how we ever managed to become the dominant life form on the planet.
What is interesting about this situation is that tax preparation firms are sometimes attacked for having “predatory pricing.” Like charging $20 to cut a refund check for a customer. But in the face of less expensive alternatives, some clients are going to choose what they are most comfortable with, even if it costs them extra.
One of the characteristics of living in a free society is the number of choices you have. Intrinsic to that is the right to make bad choices.
Tax preparer: “How do you want to receive your refund? We can do direct deposit into your checking account, or at a higher charge we can cut you a check.”
Client: “I want a check.”
TP: “Are you sure? You told me you wanted to keep your fees as low as possible. We charge you $20 for a check. Direct deposit is free.”
C: “I’ve always gotten a check.”
TP: “Let’s work through this. If we cut you a check, you have to come back to this office to pick it up. You’ll then drive over to your bank to deposit the check. With direct deposit, the money is placed directly into your account. And we’re going to charge you $20 for putting you through the extra effort.”
C: “Okay. But I still want to get a check.”
At times like this I wonder how we ever managed to become the dominant life form on the planet.
What is interesting about this situation is that tax preparation firms are sometimes attacked for having “predatory pricing.” Like charging $20 to cut a refund check for a customer. But in the face of less expensive alternatives, some clients are going to choose what they are most comfortable with, even if it costs them extra.
One of the characteristics of living in a free society is the number of choices you have. Intrinsic to that is the right to make bad choices.
Sunday, February 7, 2010
The Two-tier Economy
A sales rep I do business with called me the other day. He asked the standard icebreaker question for these kinds of calls: “How’s business going for you guys?”
I told him that things weren’t too bad. Our order book was pretty solid, and after the restructuring we did last year, it looked like we would be in the black, even at the lower recession level of business we were seeing. I felt like our business was as secure as any could be in these days of whirlwind change.
I expressed some sympathy for the salesman. With commission based income, he was probably hurting more than I. He assured me that he wasn’t doing too badly. His sales lines were diversified, and while some sectors were hurting, other sectors had picked up the slack.
Although the recession may have ended, things certainly have not returned to the pre-recession level. Good times are a long way away. Yet, here we were, both of us fairly comfortable and secure in our employment.
I think what has happened in the last six months is that the existential threat has gone away. Last year at this time, the people I talked to in business were all worried, wondering if the next round of cutbacks was going to hit them. We acted as if the sword of Damocles was hanging over our head.
Now that the decline has stopped, and things have improved (if only marginally), I don’t feel that immediate threat any more. We may not have enough work to need new workers, but there is plenty of work for those of who are left.
In the news, they call it a jobless recovery. I call it the two-tier economy.
In the top tier are the 90% of us who still have jobs. Bonuses, commissions, and overtime have been reduced, but we’re still standing. People in this tier are going to the movies, going out to eat, shopping in the stores. Life is back to normal, although maybe with a little less reliance on credit and a bit more saving.
Then there are the other 10%. These are the people who worked for businesses that failed, or plants that closed, or were laid off in cutbacks. For these folks, no possible reduction in lifestyle is going to be enough, because they no longer have an income. If the job situation doesn’t turn around, over time the people in the lower tier are going to lose everything. As their unemployment benefits run out, these people are going to start getting desperate. Assuming they’re not already desperate.
I don’t know what the solution is to the predicament of the people in the lower tier. I do know that I’m going to do what it takes to stay in the much larger top tier.
I told him that things weren’t too bad. Our order book was pretty solid, and after the restructuring we did last year, it looked like we would be in the black, even at the lower recession level of business we were seeing. I felt like our business was as secure as any could be in these days of whirlwind change.
I expressed some sympathy for the salesman. With commission based income, he was probably hurting more than I. He assured me that he wasn’t doing too badly. His sales lines were diversified, and while some sectors were hurting, other sectors had picked up the slack.
Although the recession may have ended, things certainly have not returned to the pre-recession level. Good times are a long way away. Yet, here we were, both of us fairly comfortable and secure in our employment.
I think what has happened in the last six months is that the existential threat has gone away. Last year at this time, the people I talked to in business were all worried, wondering if the next round of cutbacks was going to hit them. We acted as if the sword of Damocles was hanging over our head.
Now that the decline has stopped, and things have improved (if only marginally), I don’t feel that immediate threat any more. We may not have enough work to need new workers, but there is plenty of work for those of who are left.
In the news, they call it a jobless recovery. I call it the two-tier economy.
In the top tier are the 90% of us who still have jobs. Bonuses, commissions, and overtime have been reduced, but we’re still standing. People in this tier are going to the movies, going out to eat, shopping in the stores. Life is back to normal, although maybe with a little less reliance on credit and a bit more saving.
Then there are the other 10%. These are the people who worked for businesses that failed, or plants that closed, or were laid off in cutbacks. For these folks, no possible reduction in lifestyle is going to be enough, because they no longer have an income. If the job situation doesn’t turn around, over time the people in the lower tier are going to lose everything. As their unemployment benefits run out, these people are going to start getting desperate. Assuming they’re not already desperate.
I don’t know what the solution is to the predicament of the people in the lower tier. I do know that I’m going to do what it takes to stay in the much larger top tier.
Monday, January 18, 2010
A Modest Proposal
I am on my annual pilgrimage to ski country this week. I’ve noticed that the tilt towards the green side has become more pronounced over the last few years. It started with the invitation to reuse your towels, so that housekeeping didn’t have to expend so much fresh water on laundry. Now it has expanded to include the use of compact fluorescent bulbs throughout the condo unit we are staying in this week.
The management has posted a little notice in the room, stressing how energy conserving they are, doing their part to fight global warming. It put me in mind of an article I read in a skiing magazine a couple of months ago. The article profiled an activist in the ski town of Crested Butte. This woman was committed to fighting global warming, specifically to preserve heavy snowfalls in the Rockies. More snow, better skiing.
After thinking about this for a while, it gave me an idea of how we could really fight global warming to preserve snow: ban skiing.
Well, not really. My idea is not to ban skiing. Just to ban the sport as currently practiced. The modern ski vacation has got to be one of the most carbon intensive activities on the face of the planet.
To get to the resorts, we fly in from all over the country, if not the world (how much carbon do you emit to get to Colorado from Australia, I wonder). Once we’re here, we stay in luxury condos, housing that stands empty for eight months out of the year. That can’t be environmentally benign. In the last ten years, I have yet to stay in a unit that doesn’t have a gas fireplace. They’re not efficient heating units, but the flames are pretty, as we watch irreplaceable natural gas get converted into carbon dioxide and water vapor.
Then there is the sport of skiing itself. First off, to create the ski runs, they mow down swathes of National Forest. Last I checked, trees were carbon absorbers, but hey, we’re out to have some fun. Then, they install big diesel powered ski lifts. They haul us up the hill, solely so that we can slide down, back to where we started from. A less practical activity can scarcely be imagined.
Trying to offset all of these carbon emissions with compact fluorescents is like trying to bail out the Titanic. With a teaspoon.
No, if we were really serious about slowing down greenhouse gas emissions to preserve snow, we would close down the ski areas. Of course, that wouldn’t leave many people to care about whether there was fresh powder snow on the mountains or not.
I guess it would be a case of having to destroy the village in order to save it.
The management has posted a little notice in the room, stressing how energy conserving they are, doing their part to fight global warming. It put me in mind of an article I read in a skiing magazine a couple of months ago. The article profiled an activist in the ski town of Crested Butte. This woman was committed to fighting global warming, specifically to preserve heavy snowfalls in the Rockies. More snow, better skiing.
After thinking about this for a while, it gave me an idea of how we could really fight global warming to preserve snow: ban skiing.
Well, not really. My idea is not to ban skiing. Just to ban the sport as currently practiced. The modern ski vacation has got to be one of the most carbon intensive activities on the face of the planet.
To get to the resorts, we fly in from all over the country, if not the world (how much carbon do you emit to get to Colorado from Australia, I wonder). Once we’re here, we stay in luxury condos, housing that stands empty for eight months out of the year. That can’t be environmentally benign. In the last ten years, I have yet to stay in a unit that doesn’t have a gas fireplace. They’re not efficient heating units, but the flames are pretty, as we watch irreplaceable natural gas get converted into carbon dioxide and water vapor.
Then there is the sport of skiing itself. First off, to create the ski runs, they mow down swathes of National Forest. Last I checked, trees were carbon absorbers, but hey, we’re out to have some fun. Then, they install big diesel powered ski lifts. They haul us up the hill, solely so that we can slide down, back to where we started from. A less practical activity can scarcely be imagined.
Trying to offset all of these carbon emissions with compact fluorescents is like trying to bail out the Titanic. With a teaspoon.
No, if we were really serious about slowing down greenhouse gas emissions to preserve snow, we would close down the ski areas. Of course, that wouldn’t leave many people to care about whether there was fresh powder snow on the mountains or not.
I guess it would be a case of having to destroy the village in order to save it.
Thursday, January 14, 2010
New Year's Resolutions
I went to the gym this week, and the place was packed. Every machine had someone using it, and many of the machines had at least one person waiting their turn.
It’s always crowded this time of year. I attribute it to New Year’s resolutions. Folks get done with the holidays, resolve to lose some weight, and start going to the gym to work out. The crowds usually thin out by early March, as willpower gives in and old habits resurge.
I don’t really make New Year’s resolutions. My process is more like goal setting for the year. I start with areas of my life where I have commitments, than I develop tangible goals that relate to those commitments. It’s the underlying commitment that keeps me going, not the goal itself.
For 2010, my goals are based on three commitments. First, I want to push back against the decrepitude of the aging process. I’m committed to maintaining my physical capability to the greatest extent possible. Second, I’m going to increase my level of fiscal security. It is still a pretty dicey economy, and no job is certain in today’s world. Still, if I have to swim against the economic tide, I want to be the guy with fins on. Third, I’m committed to living as rich a life as I can, subject to the constraints of health and finances. Family, friends, and experiences enrich our lives, and I want as much of all of them as I can get. After all, you could move to a mountaintop in Idaho and subsist pretty cheaply, but who wants to live on a diet of potatoes?
In the area of health and fitness, my goal is to run 50 kilometers of road races throughout the year. When I run a 5K, I’m not competing against anyone but myself. I am not going to be the fastest runner, although I can win my age group if I’m the only one who shows up. However, the mere act of getting out there with other serious runners on a regular basis forces me to maintain a higher training level than I would without the road races. So far I’ve kept my body mass index below the 25 that is the threshold for overweight, and I intend to keep it that way.
In terms of economic security, I plan to work the problem on both defense and offense. By defense, I mean building up my cushion of assets in case I have to make an involuntary job transition. By offense, I’m talking about increasing either my current income, or my marketable skills.
On the defense side, my savings goal for the year is 20% of my earned income. Most of that will be automatic. Between salary deduction for my 401K and the matching corporate contribution, I’ll get to 15%. The last 5% will take the day to day discipline of saying no to temptation. Do without if you don’t need. Make instead of buy. Repair instead of replace. Since I am the least handy guy in North America, most of the heavy lifting in this category will be under the heading of “do without if you don’t need it.” I’m not planning on doing my own plumbing, or even changing the oil in my car.
I’m also going to continue the deleveraging project I started last year. By making extra equity payments on my mortgage (a guaranteed 6.5% rate of return), I hope to get my total indebtedness down below $60K, split between primary mortgage, home equity line of credit, and car loan. My credit cards will continue to be paid in full every month.
Increased savings improves my long term economic security. In the short term, I’m also taking steps to increase earnings and boost my marketability in a crummy job market. Tax season is starting, and I’m working for H & R Block again to make a little side money. The goal here is to pick up $2000 in additional income. This is just about what I pay my lawn service every year. Basically, I’m hoping to trade knowledge work in a climate controlled office for dirty, physical work outside. Based on last year’s results, $2000 will be a stretch. I may have to develop a Plan B to make up the balance of what I don’t earn doing taxes.
I’m also going back to school again. Post-MBA, I started taking graduate level classes in accounting last fall. My intent is to pick up 9 more credit hours in 2010. By taking one class in Spring, Summer, and Fall semesters, I’ll only need one more class to have enough credits to teach at the college level. Also, if the worst occurs at my current job, more accounting knowledge will help me stand out from the other job seekers out there.
But man does not live by bread alone. I could easily save more money by sitting at home watching television, only venturing out to work, jog, or attend classes, but that would be boring. Besides, my wife would only take so much of that before she snapped and smothered me in my sleep. So in addition to struggling to get rich, I’ll expend considerable energy and time into enriching myself in ways other than monetary.
It has been a few years since I’ve been out west on vacation. It’s a big country, and I want to see more of it. So one of my 2010 commitments is to visit one of the National Parks that I haven’t seen yet. The documentary maker Ken Burns calls the National Park system “America’s Best Idea.” I’m leaning towards Yosemite in Northern California, maybe in combination with a trip to the wine country.
There is an old saying: “No man is poor who is rich in friends.” I don’t have too many friends who will volunteer to pay my light bill, but I still cherish them. To celebrate and enjoy my friends, I’m committed to holding 12 in-home entertainment events this year. This covers everything from formal dinner parties to backyard cookouts to our annual Christmas party (even if I do end with the Chia pet playing “dirty Santa”).
The last of my enrichment projects is internal. Along with the formal education I’ve addressed above, I’m continuing to read authors from “The Lifetime Reading Plan,” a book I first discovered in my father’s library over thirty years ago. My goal for this year is to tackle three of the selections in 2010.
Finally, I’m going to continue posting in this blog. The goal here is a minimum of 60 posts over the course of the year, at least once a week.
After all, everybody deserves my opinions. And now back to our regularly scheduled productions.
It’s always crowded this time of year. I attribute it to New Year’s resolutions. Folks get done with the holidays, resolve to lose some weight, and start going to the gym to work out. The crowds usually thin out by early March, as willpower gives in and old habits resurge.
I don’t really make New Year’s resolutions. My process is more like goal setting for the year. I start with areas of my life where I have commitments, than I develop tangible goals that relate to those commitments. It’s the underlying commitment that keeps me going, not the goal itself.
For 2010, my goals are based on three commitments. First, I want to push back against the decrepitude of the aging process. I’m committed to maintaining my physical capability to the greatest extent possible. Second, I’m going to increase my level of fiscal security. It is still a pretty dicey economy, and no job is certain in today’s world. Still, if I have to swim against the economic tide, I want to be the guy with fins on. Third, I’m committed to living as rich a life as I can, subject to the constraints of health and finances. Family, friends, and experiences enrich our lives, and I want as much of all of them as I can get. After all, you could move to a mountaintop in Idaho and subsist pretty cheaply, but who wants to live on a diet of potatoes?
In the area of health and fitness, my goal is to run 50 kilometers of road races throughout the year. When I run a 5K, I’m not competing against anyone but myself. I am not going to be the fastest runner, although I can win my age group if I’m the only one who shows up. However, the mere act of getting out there with other serious runners on a regular basis forces me to maintain a higher training level than I would without the road races. So far I’ve kept my body mass index below the 25 that is the threshold for overweight, and I intend to keep it that way.
In terms of economic security, I plan to work the problem on both defense and offense. By defense, I mean building up my cushion of assets in case I have to make an involuntary job transition. By offense, I’m talking about increasing either my current income, or my marketable skills.
On the defense side, my savings goal for the year is 20% of my earned income. Most of that will be automatic. Between salary deduction for my 401K and the matching corporate contribution, I’ll get to 15%. The last 5% will take the day to day discipline of saying no to temptation. Do without if you don’t need. Make instead of buy. Repair instead of replace. Since I am the least handy guy in North America, most of the heavy lifting in this category will be under the heading of “do without if you don’t need it.” I’m not planning on doing my own plumbing, or even changing the oil in my car.
I’m also going to continue the deleveraging project I started last year. By making extra equity payments on my mortgage (a guaranteed 6.5% rate of return), I hope to get my total indebtedness down below $60K, split between primary mortgage, home equity line of credit, and car loan. My credit cards will continue to be paid in full every month.
Increased savings improves my long term economic security. In the short term, I’m also taking steps to increase earnings and boost my marketability in a crummy job market. Tax season is starting, and I’m working for H & R Block again to make a little side money. The goal here is to pick up $2000 in additional income. This is just about what I pay my lawn service every year. Basically, I’m hoping to trade knowledge work in a climate controlled office for dirty, physical work outside. Based on last year’s results, $2000 will be a stretch. I may have to develop a Plan B to make up the balance of what I don’t earn doing taxes.
I’m also going back to school again. Post-MBA, I started taking graduate level classes in accounting last fall. My intent is to pick up 9 more credit hours in 2010. By taking one class in Spring, Summer, and Fall semesters, I’ll only need one more class to have enough credits to teach at the college level. Also, if the worst occurs at my current job, more accounting knowledge will help me stand out from the other job seekers out there.
But man does not live by bread alone. I could easily save more money by sitting at home watching television, only venturing out to work, jog, or attend classes, but that would be boring. Besides, my wife would only take so much of that before she snapped and smothered me in my sleep. So in addition to struggling to get rich, I’ll expend considerable energy and time into enriching myself in ways other than monetary.
It has been a few years since I’ve been out west on vacation. It’s a big country, and I want to see more of it. So one of my 2010 commitments is to visit one of the National Parks that I haven’t seen yet. The documentary maker Ken Burns calls the National Park system “America’s Best Idea.” I’m leaning towards Yosemite in Northern California, maybe in combination with a trip to the wine country.
There is an old saying: “No man is poor who is rich in friends.” I don’t have too many friends who will volunteer to pay my light bill, but I still cherish them. To celebrate and enjoy my friends, I’m committed to holding 12 in-home entertainment events this year. This covers everything from formal dinner parties to backyard cookouts to our annual Christmas party (even if I do end with the Chia pet playing “dirty Santa”).
The last of my enrichment projects is internal. Along with the formal education I’ve addressed above, I’m continuing to read authors from “The Lifetime Reading Plan,” a book I first discovered in my father’s library over thirty years ago. My goal for this year is to tackle three of the selections in 2010.
Finally, I’m going to continue posting in this blog. The goal here is a minimum of 60 posts over the course of the year, at least once a week.
After all, everybody deserves my opinions. And now back to our regularly scheduled productions.
Friday, January 8, 2010
Who Knows What Evil Lurks in the Hearts of Men?
I learned a new expression this week. Shadow inventory. The term refers to real estate properties that haven’t been foreclosed on, but for which no one is paying a mortgage.
In the real estate business, inventory is the number of houses in an area that are listed for sale. There are four sources of inventory: new construction, voluntary sales because people are moving or downsizing, short sales, where the owner is selling for less than the mortgage, with the bank’s blessing, and foreclosures.
The last two, short sales and foreclosures, are forms of distressed sales. In a short sale, the bank takes a haircut on what it is owed, and the homeowner loses any equity they ever had. Banks don’t like short sales, but they prefer them to foreclosures. With a foreclosure, the bank has to get the former owner out of the property, a difficult and expensive process. Then the bank has to maintain the empty property until it can be sold, another difficult and expensive process.
With the collapse of the housing bubble and subsequent deep recession, banks have been so inundated with non-performing loans that their foreclosure departments have not been able to keep up. So they have put new foreclosures on hold until they can clear their books of the current wave of housing repossessions.
I know some people who are living in shadow inventory right now. They have lost their income and stopped making mortgage payments, but they haven’t been kicked out of the house yet. In some cases, people have been in default, but still in possession for over a year now. Basically, they’re squatters in what used to be their own home.
I’d hate to live with that sword of Damocles hanging over my head. It has got to be tough living your life from day to day, knowing that at some point the foreclosure people are going to work their way around to you and boot you out of the house. Even the name sounds sinister. Shadow inventory.
This shadow inventory is significant, because before the housing economy can recover, the excess inventory of houses built during the bubble years have to be absorbed. Until that process is completed, housing prices will continue to slide downwards.
One of the standard tools for forecasting the direction of the housing market is to watch the level of inventory. When inventories of houses listed for sale are low, prices tend to rise. When inventories are high, that is a signal that prices are going to fall.
With a pool of shadow inventory of unknown size, it becomes impossible to follow that process, because as houses are sold, more houses come on to the market to keep pricing levels down.
One thing’s for sure. If there is enough inventory hidden from the market to warrant a special name, we’re a long way off from hitting bottom.
In the real estate business, inventory is the number of houses in an area that are listed for sale. There are four sources of inventory: new construction, voluntary sales because people are moving or downsizing, short sales, where the owner is selling for less than the mortgage, with the bank’s blessing, and foreclosures.
The last two, short sales and foreclosures, are forms of distressed sales. In a short sale, the bank takes a haircut on what it is owed, and the homeowner loses any equity they ever had. Banks don’t like short sales, but they prefer them to foreclosures. With a foreclosure, the bank has to get the former owner out of the property, a difficult and expensive process. Then the bank has to maintain the empty property until it can be sold, another difficult and expensive process.
With the collapse of the housing bubble and subsequent deep recession, banks have been so inundated with non-performing loans that their foreclosure departments have not been able to keep up. So they have put new foreclosures on hold until they can clear their books of the current wave of housing repossessions.
I know some people who are living in shadow inventory right now. They have lost their income and stopped making mortgage payments, but they haven’t been kicked out of the house yet. In some cases, people have been in default, but still in possession for over a year now. Basically, they’re squatters in what used to be their own home.
I’d hate to live with that sword of Damocles hanging over my head. It has got to be tough living your life from day to day, knowing that at some point the foreclosure people are going to work their way around to you and boot you out of the house. Even the name sounds sinister. Shadow inventory.
This shadow inventory is significant, because before the housing economy can recover, the excess inventory of houses built during the bubble years have to be absorbed. Until that process is completed, housing prices will continue to slide downwards.
One of the standard tools for forecasting the direction of the housing market is to watch the level of inventory. When inventories of houses listed for sale are low, prices tend to rise. When inventories are high, that is a signal that prices are going to fall.
With a pool of shadow inventory of unknown size, it becomes impossible to follow that process, because as houses are sold, more houses come on to the market to keep pricing levels down.
One thing’s for sure. If there is enough inventory hidden from the market to warrant a special name, we’re a long way off from hitting bottom.
Monday, January 4, 2010
King of the World
The Hollywood director James Cameron has set the benchmark of most expensive movie ever made three times. When he made Terminator II: Judgment Day, it was the first movie ever made with production costs exceeding $100 million. Questioned about the high costs of making the movie, Cameron answered his critics by stating “It’s all up there on the screen.”
He was right. The special effects of Terminator IIwere ground breaking and spectacular. It was the first movie to use the technology of digital morphing, having a character change shape seamlessly on screen. Married to pulse pounding story and memorable characters, Terminator II went on to become a monster hit, spawning two additional sequels, and cementing Arnold Schwarzenegger as the #1 movie star in the world at that time.
Later, Cameron helmed the movie Titanic. The cost overruns on this $150 million movie were so extreme that Cameron had to forfeit his normal director’s fees before the studio would release additional funds to allow him to finish the movie his way. Before the movie was released, an executive of a rival studio sneered “Everybody knows what happened. The boat sinks. Everybody dies.”
The story of star-crossed lovers, combined with special effects and elaborate sets that created total realism, convinced audiences to see this movie over and over again. Titanic became the most successful movie in the history of cinema, pulling in over $1.8 billion in global box office.
This month James Cameron released his first movie in twelve years. Avatar took four years to produce, and cost estimates are ranging from $250 to $300 million. New motion capture technologies had to be invented to allow the screenplay Cameron wrote to be presented with the verisimilitude to allow the suspension of disbelief. At the upper end of that cost range, the movie would have to reach $750 million in global box office just to break even. Since the American movie going public typically supplies half the sales dollars for a film of this type, that means that the domestic gross on Avatar would have to be over $350 million to have a prayer of paying back the investors.
The early reports from this weekend’s box office are in. After just under three weeks, Avatar has pulled in $352 million in domestic sales. Globally, the news is even more spectacular. Avatar has just crossed over the $1 billion mark in global box office.
To put this into perspective, only four other movies have cracked past the billion dollar mark. The Dark Knight ($1.001B), Pirates of the Caribbean: Dead Man's Chest ($1.07B), Lord of the Rings: Return of the King ($1.1B), and Titanic ($1.8B). At this rate, by next week James Cameron will have directed the top two grossing movies of all time. He will be the only director to direct a billion dollar movie that wasn’t a sequel.
The movie business is one where you have to lay down large bets, and nobody really knows what is going to work. Even making a low budget film requires an upfront investment of $10 to $20 million, with no guarantee that anybody is going to want to pony up eight bucks for a ticket. For every My Big Fat Greek Wedding, which grossed $368 million worldwide on a $5 million production budget, you get a Speed Racer, which cost $120 million to make and earned $94 million in worldwide ticket sales.
Basically, making movies is a gigantic crapshoot, and nobody places bigger bets than James Cameron. But I wouldn’t bet against him.
He was right. The special effects of Terminator IIwere ground breaking and spectacular. It was the first movie to use the technology of digital morphing, having a character change shape seamlessly on screen. Married to pulse pounding story and memorable characters, Terminator II went on to become a monster hit, spawning two additional sequels, and cementing Arnold Schwarzenegger as the #1 movie star in the world at that time.
Later, Cameron helmed the movie Titanic. The cost overruns on this $150 million movie were so extreme that Cameron had to forfeit his normal director’s fees before the studio would release additional funds to allow him to finish the movie his way. Before the movie was released, an executive of a rival studio sneered “Everybody knows what happened. The boat sinks. Everybody dies.”
The story of star-crossed lovers, combined with special effects and elaborate sets that created total realism, convinced audiences to see this movie over and over again. Titanic became the most successful movie in the history of cinema, pulling in over $1.8 billion in global box office.
This month James Cameron released his first movie in twelve years. Avatar took four years to produce, and cost estimates are ranging from $250 to $300 million. New motion capture technologies had to be invented to allow the screenplay Cameron wrote to be presented with the verisimilitude to allow the suspension of disbelief. At the upper end of that cost range, the movie would have to reach $750 million in global box office just to break even. Since the American movie going public typically supplies half the sales dollars for a film of this type, that means that the domestic gross on Avatar would have to be over $350 million to have a prayer of paying back the investors.
The early reports from this weekend’s box office are in. After just under three weeks, Avatar has pulled in $352 million in domestic sales. Globally, the news is even more spectacular. Avatar has just crossed over the $1 billion mark in global box office.
To put this into perspective, only four other movies have cracked past the billion dollar mark. The Dark Knight ($1.001B), Pirates of the Caribbean: Dead Man's Chest ($1.07B), Lord of the Rings: Return of the King ($1.1B), and Titanic ($1.8B). At this rate, by next week James Cameron will have directed the top two grossing movies of all time. He will be the only director to direct a billion dollar movie that wasn’t a sequel.
The movie business is one where you have to lay down large bets, and nobody really knows what is going to work. Even making a low budget film requires an upfront investment of $10 to $20 million, with no guarantee that anybody is going to want to pony up eight bucks for a ticket. For every My Big Fat Greek Wedding, which grossed $368 million worldwide on a $5 million production budget, you get a Speed Racer, which cost $120 million to make and earned $94 million in worldwide ticket sales.
Basically, making movies is a gigantic crapshoot, and nobody places bigger bets than James Cameron. But I wouldn’t bet against him.
Friday, January 1, 2010
Phyrrhic Victories
Pyrrhus was a king of Epirus, one of the city-states of ancient Greece during the Hellenistic period. He was considered one of the greatest generals of the ancient world. He led armies in wars against both Carthage and Rome, the two major powers in the Mediterranean at that time.
Invited in by Italian cities revolting against the growing power of Rome, in 275 BC he led a combined Greek and Macedonian army against Roman forces on the Italian peninsula itself.
In 279 BC, his army met a Roman army at the battle of Asculum. The Romans suffered losses of over 6000 men, while Pyrrhus lost only 3000 soldiers. The Roman legions were pushed off the field of battle, leaving Pyrrhus in possession of the ground. Tactically, Pyrrhus had won the fight.
But the Roman losses could be replaced with fresh recruits. Pyrrhus, operating far from his base of operations, could not replace his losses. Strategically, the loss at Asculum had weakened Pyrrhus more than it had Rome.
Knowing this, when a subordinate attempted to congratulate Pyrrhus on the victory, he was heard to say “Another such victory and we are undone.”
What has this story got to do with the health insurance reform bill passed by the Senate last week?
Well, the legislation passed the Senate on a straight party line vote. Not a single Republican senator could be induced to break ranks to vote for it, and we know that the inducements offered were huge. Democratic senator Ben Nelson of Nebraska got a $100 billion bribe, er, inducement, for his state as the last hold out from his caucus. Surely Olympia Snowe of Maine could have pried loose something from Harry Reid. A promise to make the Bath Iron Works the sole provider of ships to the Navy, perhaps.
But the Republicans stuck to their guns, leading to the spectacle of a major piece of legislation, affecting one sixth of the American economy, having to pass in a purely partisan fashion.
Although it got sixty percent of the available Senate votes, the health care insurance overhaul was far less popular among the populace it is intended to serve, and who will have to pay for it. I am speaking of the American public. According to the latest Rasmussen poll, 55% opposed the bill that the Senate just passed. Among likely voters, 81% think that the plan will lead to higher middle class taxes.
Among Democratic senators, the belief seems to have been that they had to do something in the area of health care, that leaving the system as currently configured would be worse than a bad bill.
The 2010 elections will show whether passing the current legislation was a true victory, or merely a step towards the Democrats becoming undone.
Invited in by Italian cities revolting against the growing power of Rome, in 275 BC he led a combined Greek and Macedonian army against Roman forces on the Italian peninsula itself.
In 279 BC, his army met a Roman army at the battle of Asculum. The Romans suffered losses of over 6000 men, while Pyrrhus lost only 3000 soldiers. The Roman legions were pushed off the field of battle, leaving Pyrrhus in possession of the ground. Tactically, Pyrrhus had won the fight.
But the Roman losses could be replaced with fresh recruits. Pyrrhus, operating far from his base of operations, could not replace his losses. Strategically, the loss at Asculum had weakened Pyrrhus more than it had Rome.
Knowing this, when a subordinate attempted to congratulate Pyrrhus on the victory, he was heard to say “Another such victory and we are undone.”
What has this story got to do with the health insurance reform bill passed by the Senate last week?
Well, the legislation passed the Senate on a straight party line vote. Not a single Republican senator could be induced to break ranks to vote for it, and we know that the inducements offered were huge. Democratic senator Ben Nelson of Nebraska got a $100 billion bribe, er, inducement, for his state as the last hold out from his caucus. Surely Olympia Snowe of Maine could have pried loose something from Harry Reid. A promise to make the Bath Iron Works the sole provider of ships to the Navy, perhaps.
But the Republicans stuck to their guns, leading to the spectacle of a major piece of legislation, affecting one sixth of the American economy, having to pass in a purely partisan fashion.
Although it got sixty percent of the available Senate votes, the health care insurance overhaul was far less popular among the populace it is intended to serve, and who will have to pay for it. I am speaking of the American public. According to the latest Rasmussen poll, 55% opposed the bill that the Senate just passed. Among likely voters, 81% think that the plan will lead to higher middle class taxes.
Among Democratic senators, the belief seems to have been that they had to do something in the area of health care, that leaving the system as currently configured would be worse than a bad bill.
The 2010 elections will show whether passing the current legislation was a true victory, or merely a step towards the Democrats becoming undone.
Sunday, December 27, 2009
We Have Met The Enemy ...
The other day I went to fill the gas tank on my car, like I have done thousands of times before. At the gas station I choose, you activate the pump by swiping your credit card, pushing a button to select the grade of gas, and then picking up the nozzle and inserting it into the gas tank.
In this case, after selecting the grade of gasoline I wanted, I went to put the nozzle in the tank, and it wouldn’t fit. I thought I had just missed the opening with careless placement, so I tried again. The nozzle still wouldn’t go in the tank. After the second attempt I realized that the nozzle was too big to fit into the filler tube on my gas tank.
Once I started actually looking at the nozzle, I realized that I had picked up the wrong one. This gas pump had separate hoses for gasoline and diesel fuels, and I had inadvertently picked up the diesel nozzle.
I thought this was a perfect example of a quality control technique called poka-yoke by the Japanese. Loosely translated, poka-yoke means mistake prevention, or mistake proofing. I usually call it idiot proofing. The idea is to design assemblies so that the parts can only go together one way. If they go together only one way, than the parts cannot be assembled incorrectly.
That is poka-yoke in its purest form. But the doctrine of mistake proofing has been used in many different ways. For example, in building an assembly, you can put quality checks in-line with the assembly process. Let’s say you put a switch on a base plate, then drive two screws to hold the switch in place. The next two stations in the assembly process could be a camera, to detect the presence of the two screws, followed by the installation of a cover plate to protect the switch. If you lock the assembly in place at the camera station, and only unlock it to move to the next step if the camera detects the screws, then you cannot put the cover plate on if the screws are missing.
Usually process controls like the one described above can be overridden by the people working on the line (usually a supervisor), which makes them less effective than going the route of designing an assembly that cannot be misassembled.
The problem with giving supervisors an override is that we assume mistakes are a function of poor training, or bad materials, or not caring about the job, or lack of experience. In my experience with the gas pump, however, the source of the error was none of those things. What happened to me was a momentary lapse of attention. So I was glad that the gas pump was designed so that I couldn’t get diesel fuel into the gasoline tank.
My experience with poka-yoke techniques at the gas station brought home another lesson for me.
No matter how much we idiot-proof our systems, we’re always outnumbered.
In this case, after selecting the grade of gasoline I wanted, I went to put the nozzle in the tank, and it wouldn’t fit. I thought I had just missed the opening with careless placement, so I tried again. The nozzle still wouldn’t go in the tank. After the second attempt I realized that the nozzle was too big to fit into the filler tube on my gas tank.
Once I started actually looking at the nozzle, I realized that I had picked up the wrong one. This gas pump had separate hoses for gasoline and diesel fuels, and I had inadvertently picked up the diesel nozzle.
I thought this was a perfect example of a quality control technique called poka-yoke by the Japanese. Loosely translated, poka-yoke means mistake prevention, or mistake proofing. I usually call it idiot proofing. The idea is to design assemblies so that the parts can only go together one way. If they go together only one way, than the parts cannot be assembled incorrectly.
That is poka-yoke in its purest form. But the doctrine of mistake proofing has been used in many different ways. For example, in building an assembly, you can put quality checks in-line with the assembly process. Let’s say you put a switch on a base plate, then drive two screws to hold the switch in place. The next two stations in the assembly process could be a camera, to detect the presence of the two screws, followed by the installation of a cover plate to protect the switch. If you lock the assembly in place at the camera station, and only unlock it to move to the next step if the camera detects the screws, then you cannot put the cover plate on if the screws are missing.
Usually process controls like the one described above can be overridden by the people working on the line (usually a supervisor), which makes them less effective than going the route of designing an assembly that cannot be misassembled.
The problem with giving supervisors an override is that we assume mistakes are a function of poor training, or bad materials, or not caring about the job, or lack of experience. In my experience with the gas pump, however, the source of the error was none of those things. What happened to me was a momentary lapse of attention. So I was glad that the gas pump was designed so that I couldn’t get diesel fuel into the gasoline tank.
My experience with poka-yoke techniques at the gas station brought home another lesson for me.
No matter how much we idiot-proof our systems, we’re always outnumbered.
Tuesday, December 15, 2009
Recession vs. Recovery
A variety of salesmen have dropped in on me the last week or so. This being the Christmas season, they are making the rounds, bringing gifts to their customers. The table in our office break room is covered with boxes of chocolates and tins of cookies.
Invariably, as part of the visit, they ask how business is going. When I tell them that things are going pretty good, I get surprised looks. They tell me that at most of their customers, business is way off.
Maybe it’s just that my perspective is different. My company’s overall sales are down about 30% from their peak. So from that perspective, business is terrible. But that’s not my point of comparison. I’m comparing where we are now to where we were one year ago.
At the close of 2008, orders from customers were in free fall. Their requirements were dropping faster than we could reduce capacity. In response we took whole weeks out of our production schedule. We shut down for an entire week at Thanksgiving. We shut down for four weeks in December. We took a week off in February, and two weeks off in March. And every time we shut down, another round of people were laid off. It felt like we were on the edge of a precipice.
Finally, in April our business started to pick up again. Just as important, our production capacity was reduced to the point where it balanced with demand again. Since then, our order book has gotten a little stronger, allowing us to call some of the people back off layoff.
Fast forward to the end of 2009. Thanksgiving was a long weekend, not a week. We’re taking the traditional two week maintenance shutdown at the close of this month. The order book for the first quarter of next year is filling up, not getting emptied out by customer cancellations.
I know the economy is not out of the woods yet, that things could turn down again. I know unemployment is still historically high at 10%, and that there are six applicants for every job. Right now, though, things look relatively secure for me and the survivors at my company. So that’s what I choose to focus on in this season of celebration and counting blessings.
The old joke goes that if your neighbor is unemployed, it’s a recession. If you’re unemployed, it’s a depression. I want to add something to that. If you think you are going to lose your job, it’s still a recession. If you think you’re going to survive and stay in business, it’s a recovery.
Here’s to those who are recovering in 2010. It feels pretty good to still be standing. As Winston Churchill put it (in a different context), “there is nothing so exhilarating as to be shot at without effect.”
Invariably, as part of the visit, they ask how business is going. When I tell them that things are going pretty good, I get surprised looks. They tell me that at most of their customers, business is way off.
Maybe it’s just that my perspective is different. My company’s overall sales are down about 30% from their peak. So from that perspective, business is terrible. But that’s not my point of comparison. I’m comparing where we are now to where we were one year ago.
At the close of 2008, orders from customers were in free fall. Their requirements were dropping faster than we could reduce capacity. In response we took whole weeks out of our production schedule. We shut down for an entire week at Thanksgiving. We shut down for four weeks in December. We took a week off in February, and two weeks off in March. And every time we shut down, another round of people were laid off. It felt like we were on the edge of a precipice.
Finally, in April our business started to pick up again. Just as important, our production capacity was reduced to the point where it balanced with demand again. Since then, our order book has gotten a little stronger, allowing us to call some of the people back off layoff.
Fast forward to the end of 2009. Thanksgiving was a long weekend, not a week. We’re taking the traditional two week maintenance shutdown at the close of this month. The order book for the first quarter of next year is filling up, not getting emptied out by customer cancellations.
I know the economy is not out of the woods yet, that things could turn down again. I know unemployment is still historically high at 10%, and that there are six applicants for every job. Right now, though, things look relatively secure for me and the survivors at my company. So that’s what I choose to focus on in this season of celebration and counting blessings.
The old joke goes that if your neighbor is unemployed, it’s a recession. If you’re unemployed, it’s a depression. I want to add something to that. If you think you are going to lose your job, it’s still a recession. If you think you’re going to survive and stay in business, it’s a recovery.
Here’s to those who are recovering in 2010. It feels pretty good to still be standing. As Winston Churchill put it (in a different context), “there is nothing so exhilarating as to be shot at without effect.”
Thursday, December 10, 2009
The Annual Christmas Diatribe
Plastic Santas have been pulled out of storage, and lights are strung throughout the neighborhood. Tune in to almost any radio station, and you are sure to hear the sounds of Christmas classics wafting over the airwaves. Envelopes of red and green are starting to appear in mailboxes. It’s that time of year again.
It’s time to rail against the rampant commercialism and compulsory gift giving that have hijacked the Christmas holiday.
If you take the practice of exchanging gifts as commonly practiced, and boil it down to the essentials, here’s what you get: You take your hard earned money, and you buy something for someone that they don’t really need. After all, if they had really needed it, they would have bought it for themselves. In exchange, they take their hard earned money and buy you something that you don’t really need.
Once the gift giving is completed and all the packages are opened, what do you have? (Besides two garbage cans filled with torn off wrapping paper and packaging.) You have a bunch of new stuff that you now have to store.
Americans are the most over stuffed people in the history of the planet. Our walk-in closets are filled to overflowing, so we haul our summer clothes up to attic to make room for the winter clothes. We have two car garages that hold only one car, because the rest of the space is stacked high with stuff, most of which never gets used. We have so much stuff that we rent mini-storage units to hold the overflow.
In an ideal world, we would have only the things we used. Our stuff would exist to take care of us. Instead, too often we spend our energy and money taking care of our stuff.
Besides, having too much stuff, most of the Christmas presents I’ve seen in the last few years are all made in China. So aside from a few store clerks, other Americans are not getting any benefit from our spending. We’re impoverishing ourselves to enrich people on the far side of the world. So much for the economic stimulus given by our rampant commercialism. Think about it: are you a net winner from the on-rush of Christmas spending?
I have to stop. Just thinking about this subject makes me foam at the mouth like a rabid squirrel. Right now I have more froth than a Starbucks cappuccino.
I’m not totally anti-Christmas. I love the festivities, the parties, the gatherings of friends and family that come with the season.
But the mandatory gift giving foisted on us by society? To that I say, Bah, humbug!
It’s time to rail against the rampant commercialism and compulsory gift giving that have hijacked the Christmas holiday.
If you take the practice of exchanging gifts as commonly practiced, and boil it down to the essentials, here’s what you get: You take your hard earned money, and you buy something for someone that they don’t really need. After all, if they had really needed it, they would have bought it for themselves. In exchange, they take their hard earned money and buy you something that you don’t really need.
Once the gift giving is completed and all the packages are opened, what do you have? (Besides two garbage cans filled with torn off wrapping paper and packaging.) You have a bunch of new stuff that you now have to store.
Americans are the most over stuffed people in the history of the planet. Our walk-in closets are filled to overflowing, so we haul our summer clothes up to attic to make room for the winter clothes. We have two car garages that hold only one car, because the rest of the space is stacked high with stuff, most of which never gets used. We have so much stuff that we rent mini-storage units to hold the overflow.
In an ideal world, we would have only the things we used. Our stuff would exist to take care of us. Instead, too often we spend our energy and money taking care of our stuff.
Besides, having too much stuff, most of the Christmas presents I’ve seen in the last few years are all made in China. So aside from a few store clerks, other Americans are not getting any benefit from our spending. We’re impoverishing ourselves to enrich people on the far side of the world. So much for the economic stimulus given by our rampant commercialism. Think about it: are you a net winner from the on-rush of Christmas spending?
I have to stop. Just thinking about this subject makes me foam at the mouth like a rabid squirrel. Right now I have more froth than a Starbucks cappuccino.
I’m not totally anti-Christmas. I love the festivities, the parties, the gatherings of friends and family that come with the season.
But the mandatory gift giving foisted on us by society? To that I say, Bah, humbug!
Sunday, December 6, 2009
Scary Movie
Do you think vampire movies are scary? How about werewolves? Or maybe you like to watch Jason chop up teenagers in the Friday the 13th flicks. Well, this will scare the bejeezus out of you.
It's an animation showing the level of unemployment in every county in the US, starting in 2007 and progressing to the current time period. The map is color coded, with darker colors representing higher unemployment. Watching the darkness spread across the map over time is like following the progress of a plague or some other epidemic.
It creeps me out.
It's an animation showing the level of unemployment in every county in the US, starting in 2007 and progressing to the current time period. The map is color coded, with darker colors representing higher unemployment. Watching the darkness spread across the map over time is like following the progress of a plague or some other epidemic.
It creeps me out.
Tuesday, December 1, 2009
Afghanistan Troop Surge
President Obama went on television tonight to announce a major expansion of the US forces engaged in Afghanistan. The US will be sending 30,0000 more troops in the very near future. Troop levels will stay high for up to three years, although the President promised that he will start withdrawing US forces no later than 2011.
Although Obama did not label it as such in his speech, this looks essentially the same as George W. Bush's "surge" into Iraq. This is kind of ironic, because Senator Barack Obama was on record as strongly opposed to expanding the US military presence in Iraq at that time.
By the time the surge in Afghanistan is complete, the number of troops will have doubled from the level they were at at the beginning of the Obama administration. Make no mistake about it, an increase of 30,000 troops is a major military push.
If you're very quiet, and you listen very carefully, far off to the northeast you can hear a tiny popping sound.
That's the Norwegian Nobel Peace Prize committee. The one's who just awarded Barack Obama the Nobel Peace Prize.
Their heads are exploding.
Although Obama did not label it as such in his speech, this looks essentially the same as George W. Bush's "surge" into Iraq. This is kind of ironic, because Senator Barack Obama was on record as strongly opposed to expanding the US military presence in Iraq at that time.
By the time the surge in Afghanistan is complete, the number of troops will have doubled from the level they were at at the beginning of the Obama administration. Make no mistake about it, an increase of 30,000 troops is a major military push.
If you're very quiet, and you listen very carefully, far off to the northeast you can hear a tiny popping sound.
That's the Norwegian Nobel Peace Prize committee. The one's who just awarded Barack Obama the Nobel Peace Prize.
Their heads are exploding.
Tuesday, November 24, 2009
Sunday, November 22, 2009
Breast Cancer Screening
One of the central cost containment ideas in “health care reform” got tested this week, and it failed miserably. I’m talking about using the idea of “best practices” to eliminate waste in the medical system.
The idea behind best practices, also known as evidence based medicine, is to do studies of what works and what doesn’t work in treating various medical conditions. Once the most effective protocol is determined, insurers will only pay for the approved protocol. Other treatments will not be reimbursed. The goal is to prevent overuse of medical testing and procedures that enrich doctors, but do little to improve overall outcomes.
It’s not a bad idea in theory. Too bad it doesn’t work in the real world.
The case in point from this week’s news is the new breast cancer screening guidelines. A group from the United States Preventive Services Task Force (USPSTF) studied the data, and concluded that as a nation, we are doing way too many mammographies. Instead of testing every woman over 40 every year, they are now setting a guideline of every woman over 50, every two years. The few additional live spans increased did not justify the extra biopsies, unnecessary lumpectomies, and related stress and anxiety caused by false positive screenings.
In exchange for doing a difficult job, loaded with hard technical analysis, the USPSTF was promptly thrown under the bus. You may substitute metaphors involving running into buzz saws or being fed to wolves if you prefer.
Katherine Sebelius, the Health and Human Services cabinet secretary, disavowed the findings of the Task Force, even though they were working for her when they did the study.
This does not bode well for the ability of any health care reform plan under consideration to lower costs if enacted into law.
The idea behind best practices, also known as evidence based medicine, is to do studies of what works and what doesn’t work in treating various medical conditions. Once the most effective protocol is determined, insurers will only pay for the approved protocol. Other treatments will not be reimbursed. The goal is to prevent overuse of medical testing and procedures that enrich doctors, but do little to improve overall outcomes.
It’s not a bad idea in theory. Too bad it doesn’t work in the real world.
The case in point from this week’s news is the new breast cancer screening guidelines. A group from the United States Preventive Services Task Force (USPSTF) studied the data, and concluded that as a nation, we are doing way too many mammographies. Instead of testing every woman over 40 every year, they are now setting a guideline of every woman over 50, every two years. The few additional live spans increased did not justify the extra biopsies, unnecessary lumpectomies, and related stress and anxiety caused by false positive screenings.
In exchange for doing a difficult job, loaded with hard technical analysis, the USPSTF was promptly thrown under the bus. You may substitute metaphors involving running into buzz saws or being fed to wolves if you prefer.
Katherine Sebelius, the Health and Human Services cabinet secretary, disavowed the findings of the Task Force, even though they were working for her when they did the study.
This does not bode well for the ability of any health care reform plan under consideration to lower costs if enacted into law.
Monday, November 16, 2009
Getting Ready for Tax Season
I have not had a lot of time for writing the last week or so. A few crises with vendors at my day job, combined with prepping for an exam at the accounting class I’m taking, with tax preparation classes piled into the mix for the last week. The combination of the three has kept me pretty busy.
But the process of getting ready for the start of tax season next January has brought up an issue I want to comment on, so once again I am spurred to set pen to paper (or push electrons onto CRT screen, whatever the computer equivalent is).
Part of the tax prep classes this weekend covered due diligence for tax preparers assisting clients in filing for the earned income credit. The EIC is supposed to supplement the income of wage earners, usually with children. It is a refundable credit, which means that even if you get all of your withholding back, you can still get thousands of dollars in additional money.
Under 2008 tax law, you max out your EIC with two children. If you have more than two children, you receive no additional benefit. If you have zero or one child, you get a smaller benefit. If you have less earned income, you get a smaller check from the government.
So what happens is that people with more earned income and fewer kids claim the children of people who have already maxed out their tax benefit. The amount of fraud and misrepresentation connected to the Earned Income Credit is massive. Every tax preparer in my class had a war story about making claims that just weren’t believable.
But do we turn those people away? No we do not. We accept the client’s statements at face value. We can question the story and document the answers, but we do not require any corroborating evidence. We leave that up to the IRS.
The thing that strikes me about that is that we aren’t being paid by our clients. Sure, the client is getting his or her withholding back. That’s part of their refund. But the lion’s share of the “refund” is provided by credits such as the EIC. The tax preparer is taking his fees out of the government’s money, not the tax filer’s.
That sets up a massive conflict of interest on the part of the tax preparer. If we turn a blind eye to holes in the client’s story in order to get them a bigger refund check, we get a bigger fee for doing the paperwork. The client has huge incentives to cheat, and the tax preparers have incentives to facilitate the cheating.
If I were the IRS, I would step up my auditing of tax preparer’s work by a factor of ten. That would make the tax preparers less willing to accept dodgy answers from a client.
After all, unlike many of the clients, I actually pay income taxes. I don’t want to see my tax dollars going to a fraud.
But the process of getting ready for the start of tax season next January has brought up an issue I want to comment on, so once again I am spurred to set pen to paper (or push electrons onto CRT screen, whatever the computer equivalent is).
Part of the tax prep classes this weekend covered due diligence for tax preparers assisting clients in filing for the earned income credit. The EIC is supposed to supplement the income of wage earners, usually with children. It is a refundable credit, which means that even if you get all of your withholding back, you can still get thousands of dollars in additional money.
Under 2008 tax law, you max out your EIC with two children. If you have more than two children, you receive no additional benefit. If you have zero or one child, you get a smaller benefit. If you have less earned income, you get a smaller check from the government.
So what happens is that people with more earned income and fewer kids claim the children of people who have already maxed out their tax benefit. The amount of fraud and misrepresentation connected to the Earned Income Credit is massive. Every tax preparer in my class had a war story about making claims that just weren’t believable.
But do we turn those people away? No we do not. We accept the client’s statements at face value. We can question the story and document the answers, but we do not require any corroborating evidence. We leave that up to the IRS.
The thing that strikes me about that is that we aren’t being paid by our clients. Sure, the client is getting his or her withholding back. That’s part of their refund. But the lion’s share of the “refund” is provided by credits such as the EIC. The tax preparer is taking his fees out of the government’s money, not the tax filer’s.
That sets up a massive conflict of interest on the part of the tax preparer. If we turn a blind eye to holes in the client’s story in order to get them a bigger refund check, we get a bigger fee for doing the paperwork. The client has huge incentives to cheat, and the tax preparers have incentives to facilitate the cheating.
If I were the IRS, I would step up my auditing of tax preparer’s work by a factor of ten. That would make the tax preparers less willing to accept dodgy answers from a client.
After all, unlike many of the clients, I actually pay income taxes. I don’t want to see my tax dollars going to a fraud.
Tuesday, November 10, 2009
... Before a Fall
The US House of Representatives voted on a version of health care “reform” over the weekend. Actually, it would probably be more accurate to call the legislation health insurance overhaul. However, since various forms of health insurance pay for the overwhelming majority of medical care in this country, it is clear that if the legislation also gets out of the Senate, a gigantic restructuring of the health care sector of the economy is envisioned.
Health care is one of the largest sectors of the economy. Currently, about one out of every seven dollars spent in America is spent of health care. The House just passed a vision of how to reengineer 17% of the economy.
The final vote tally: 220 for to 215 against.
Now, call me crazy (you wouldn’t be the first one), but I think the scale of the legislation is wildly out of proportion to the margin in favor. As a conservative, my natural inclination is to make small, evolutionary changes to society’s existing structures, instead of big sweeping alterations. But even liberals who think they are smart enough to restructure one seventh of the economy in one fell swoop should at least wait until they had some kind of consensus, shouldn’t they?
220 for to 215 against doesn’t exactly shout out “consensus,” does it?
If the House wanted to change the speed limit on the Interstates, 220 to 215 is an acceptable margin of victory. Add a few square miles of Federal land to a national park? Hey, 220 to 215 means the will of the people is clear.
But to radically restructure the health insurance industry and create a massive new entitlement? It is an act of the highest degree of hubris to assume that because you have 50.6% of the votes, you should pass legislation of this scale, just because you can.
The ancient Greeks had a saying: Who the Gods would humble, they first make proud.
Health care is one of the largest sectors of the economy. Currently, about one out of every seven dollars spent in America is spent of health care. The House just passed a vision of how to reengineer 17% of the economy.
The final vote tally: 220 for to 215 against.
Now, call me crazy (you wouldn’t be the first one), but I think the scale of the legislation is wildly out of proportion to the margin in favor. As a conservative, my natural inclination is to make small, evolutionary changes to society’s existing structures, instead of big sweeping alterations. But even liberals who think they are smart enough to restructure one seventh of the economy in one fell swoop should at least wait until they had some kind of consensus, shouldn’t they?
220 for to 215 against doesn’t exactly shout out “consensus,” does it?
If the House wanted to change the speed limit on the Interstates, 220 to 215 is an acceptable margin of victory. Add a few square miles of Federal land to a national park? Hey, 220 to 215 means the will of the people is clear.
But to radically restructure the health insurance industry and create a massive new entitlement? It is an act of the highest degree of hubris to assume that because you have 50.6% of the votes, you should pass legislation of this scale, just because you can.
The ancient Greeks had a saying: Who the Gods would humble, they first make proud.
Thursday, November 5, 2009
Pet Peeve #4368: Toner Warning
I use an HP LaserJet printer. It is a terrific printer, fast and almost flawless. I’ve had it for years, and have been very pleased with the performance I’ve gotten out of it.
Except for one little thing.
When the toner cartridge gets down to about 10% full, you get a warning message flashed on your screen, telling you it is time to replace the toner cartridge. All well and good, except that you really don’t need to replace the toner cartridge. At least, just not yet.
You can run for a while before you actually run out of toner. You know when you’re really low on toner because your printing starts to get blank streaks going down the page. Even then, you can pop the toner cartridge out, shake it to redistribute the remaining toner, and start pumping out documents again.
The last 10% of the toner is still enough to print hundreds of pages. If you are like me, and print about ten to twenty pages a day, that 10% can last weeks, or even months. In the meantime, though, the warning message flashes on your screen every time you hit the Print button.
Every freaking time!
This irks me. I’m irked.
I’m just saying …
Except for one little thing.
When the toner cartridge gets down to about 10% full, you get a warning message flashed on your screen, telling you it is time to replace the toner cartridge. All well and good, except that you really don’t need to replace the toner cartridge. At least, just not yet.
You can run for a while before you actually run out of toner. You know when you’re really low on toner because your printing starts to get blank streaks going down the page. Even then, you can pop the toner cartridge out, shake it to redistribute the remaining toner, and start pumping out documents again.
The last 10% of the toner is still enough to print hundreds of pages. If you are like me, and print about ten to twenty pages a day, that 10% can last weeks, or even months. In the meantime, though, the warning message flashes on your screen every time you hit the Print button.
Every freaking time!
This irks me. I’m irked.
I’m just saying …
Thursday, October 29, 2009
Here's a Clunker of a Program
Remember the Cash for Clunkers program? This was the part of the stimulus package that offered a $4500 government check for car buyers who traded in an old car for a newer, more fuel efficient model. A wildly popular program, Cash for Clunkers handed out $4 billion in tax payer money between late July and early August.
In addition to the “green” benefits of getting more fuel efficient cars on the road, the program was primarily intended to boost sales in the auto industry. And it worked, right? Car sales surged in August. So the program was a success.
Well, not so fast. You see, everyone who traded in an old vehicle for a new car got the cash rebate. But most of those people would have bought a new vehicle even without the government check that call along with it. The measure of how successful the program was should be the number of people who bought a new car that would not have made the purchase without the Cash for Clunkers program.
The automotive site Edmunds.com did the analysis to figure out how many people bought a car specifically because of the rebates. Their estimate of the number of additional buyers was only 125,000 out of the 690,000 total cars sold during the program. That means that the government subsidy per additional car sold was (drum roll, please) … $24,000.
For the folks who bought the cars, the government rebate was a great deal. In terms of stimulating the economy, not such a great deal. That would be bad enough if it was the end of the story. But as the telemarketeers say, “wait, there’s more!”
Car sales surged in August, good news for the economy. But then car sales collapsed in September, bad news for the economy. August sales were about one and a quarter million vehicles, and September was about 40% less, at seven hundred and fifty thousand. It doesn’t take a rocket scientist to realize that most, is not all, of the surge in business during August was comprised of buyers who would otherwise have waited until September to buy a new car.
To me, it sure looks like the government borrowed $4 billion from the Chinese and handed it out to car buyers for a net increase in new car sales of zero. Zip. Nil. Big goose egg.
But hey, that’s okay. I won’t mind eventually seeing my taxes go up to pay for this. After all, I’m getting my share. You see, I bought a new air conditioning unit last August when the old one on my house died. I would have ponied up the money for one anyway. Remember, it was August. Hotter than the hinges of hell. I wasn’t going one week without AC. Only, now, I qualify for a $1500 tax credit for buying an Energy Star rated appliance, courtesy of the Obama stimulus package. Woo-hoo! Spend that money!
I can’t wait to see what those brainiacs in Washington come up with for an encore.
In addition to the “green” benefits of getting more fuel efficient cars on the road, the program was primarily intended to boost sales in the auto industry. And it worked, right? Car sales surged in August. So the program was a success.
Well, not so fast. You see, everyone who traded in an old vehicle for a new car got the cash rebate. But most of those people would have bought a new vehicle even without the government check that call along with it. The measure of how successful the program was should be the number of people who bought a new car that would not have made the purchase without the Cash for Clunkers program.
The automotive site Edmunds.com did the analysis to figure out how many people bought a car specifically because of the rebates. Their estimate of the number of additional buyers was only 125,000 out of the 690,000 total cars sold during the program. That means that the government subsidy per additional car sold was (drum roll, please) … $24,000.
For the folks who bought the cars, the government rebate was a great deal. In terms of stimulating the economy, not such a great deal. That would be bad enough if it was the end of the story. But as the telemarketeers say, “wait, there’s more!”
Car sales surged in August, good news for the economy. But then car sales collapsed in September, bad news for the economy. August sales were about one and a quarter million vehicles, and September was about 40% less, at seven hundred and fifty thousand. It doesn’t take a rocket scientist to realize that most, is not all, of the surge in business during August was comprised of buyers who would otherwise have waited until September to buy a new car.
To me, it sure looks like the government borrowed $4 billion from the Chinese and handed it out to car buyers for a net increase in new car sales of zero. Zip. Nil. Big goose egg.
But hey, that’s okay. I won’t mind eventually seeing my taxes go up to pay for this. After all, I’m getting my share. You see, I bought a new air conditioning unit last August when the old one on my house died. I would have ponied up the money for one anyway. Remember, it was August. Hotter than the hinges of hell. I wasn’t going one week without AC. Only, now, I qualify for a $1500 tax credit for buying an Energy Star rated appliance, courtesy of the Obama stimulus package. Woo-hoo! Spend that money!
I can’t wait to see what those brainiacs in Washington come up with for an encore.
Monday, October 26, 2009
In the health care “reform” debate, the favorite villain of the “reform” forces has been the health insurance industry. The argument runs something like this: health insurance continues to increase in price because the insurance companies are for profit entities. In their quest to maximize profits, the insurance companies continually raise premiums, then deny coverage on the slightest pretext. If only we could find a way to trim their outrageous profits, then we could afford to extend coverage to more people.
Here’s a quotation from House Speaker Nancy Pelosi:
“I’m very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years.”
Immoral profits. Those rapacious bastards!
There is only one problem with this argument. Well, okay, there’s lots more than one problem with that argument, but here is a big one: it turns out that the health insurance industry isn’t all that profitable. According to a report by the Associated Press, the profit margin of the insurance industry hovers around 6%. In 2008, that level of profitability dropped down to 2.2%.
So, if ALL of the medical care in this country was paid for by insurance companies, AND ALL of those companies were for-profit, AND ALL of those companies were replaced by a non-profit government entity that operated with perfect efficiency, we might be able to reduce health care costs by an average of 6% a year.
Health care’s share of the national economy is currently about 17%. If we drop that by 6% of the total, you go all the way down to … 16%. Hardly an earth shattering change.
Insurance companies are big faceless organizations. It is easy to find stories of people who have been denied coverage because of pre-existing conditions in the face of massive medical expenditures. These two conditions make the health insurance industry a good whipping boy in the current debate. After all, everyone likes to root for the underdog.
But the people who are advocating rearranging one sixth of the economy, and creating a humongous new entitlement should be honest about why they want to do that. It doesn’t seem to be about saving money.
Here’s a quotation from House Speaker Nancy Pelosi:
“I’m very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years.”
Immoral profits. Those rapacious bastards!
There is only one problem with this argument. Well, okay, there’s lots more than one problem with that argument, but here is a big one: it turns out that the health insurance industry isn’t all that profitable. According to a report by the Associated Press, the profit margin of the insurance industry hovers around 6%. In 2008, that level of profitability dropped down to 2.2%.
So, if ALL of the medical care in this country was paid for by insurance companies, AND ALL of those companies were for-profit, AND ALL of those companies were replaced by a non-profit government entity that operated with perfect efficiency, we might be able to reduce health care costs by an average of 6% a year.
Health care’s share of the national economy is currently about 17%. If we drop that by 6% of the total, you go all the way down to … 16%. Hardly an earth shattering change.
Insurance companies are big faceless organizations. It is easy to find stories of people who have been denied coverage because of pre-existing conditions in the face of massive medical expenditures. These two conditions make the health insurance industry a good whipping boy in the current debate. After all, everyone likes to root for the underdog.
But the people who are advocating rearranging one sixth of the economy, and creating a humongous new entitlement should be honest about why they want to do that. It doesn’t seem to be about saving money.
Tuesday, October 20, 2009
Medical Marijuana?
The Justice Department announced a major change in drug enforcement policy yesterday. In states that have legalized medical marijuana, the Federal government will no longer go after sellers that appear to be in compliance with state laws. Dispensaries in California that have their paperwork in order will not have to worry about breaking Federal laws against the sale of controlled substances.
I’m conflicted about this decision. The libertarian in me is all in favor of expanding the rights of individuals to do as they please without government interference. The strict constitutional constructionist in me applauds the victory for state’s rights inherent in the decision. The social conservative in me is … troubled.
I think the thing that bothers me is the mendacity inherent in the system. If medical marijuana was really about resolving nausea in cancer patients undergoing chemotherapy, or helping glaucoma patients who don’t respond well to other drugs, I don’t think anybody would be bothered one way or the other. That was the protective cover used to sell the idea.
The reality is somewhat different.
In reality, medical marijuana is about legalizing a narcotic so that people who want to get stoned can do so without risking being arrested. In California, anyone who wants to can get a prescription from a doctor to acquire as much cannabis as they can consume. If you don’t know a doctor who will write a prescription for “anxiety” or “insomnia,” just visit a marijuana dispensary and they will be happy to recommend one to you. According to a profile in The New Yorker magazine, there are over two hundred thousand medical marijuana prescriptions written in California alone.
I’m uncomfortable with training the citizenry to lie about their health in order to indulge their vices. Of course, one of the truisms of a democracy is that when enough of the citizens want to participate in a vice, they will find a way to legalize it.
In my state, they passed a law setting up a state lottery a few years ago. The pretext was that the lottery was going to raise funds to “enrich” education in the state. Hogwash! Folks just wanted to gamble.
So if people want to spend a good chunk of their lives intoxicated, I guess we should let them, whether the drug of choice is pot or booze. But let’s not kid ourselves that the stoners are being treated with medicine.
I’m conflicted about this decision. The libertarian in me is all in favor of expanding the rights of individuals to do as they please without government interference. The strict constitutional constructionist in me applauds the victory for state’s rights inherent in the decision. The social conservative in me is … troubled.
I think the thing that bothers me is the mendacity inherent in the system. If medical marijuana was really about resolving nausea in cancer patients undergoing chemotherapy, or helping glaucoma patients who don’t respond well to other drugs, I don’t think anybody would be bothered one way or the other. That was the protective cover used to sell the idea.
The reality is somewhat different.
In reality, medical marijuana is about legalizing a narcotic so that people who want to get stoned can do so without risking being arrested. In California, anyone who wants to can get a prescription from a doctor to acquire as much cannabis as they can consume. If you don’t know a doctor who will write a prescription for “anxiety” or “insomnia,” just visit a marijuana dispensary and they will be happy to recommend one to you. According to a profile in The New Yorker magazine, there are over two hundred thousand medical marijuana prescriptions written in California alone.
I’m uncomfortable with training the citizenry to lie about their health in order to indulge their vices. Of course, one of the truisms of a democracy is that when enough of the citizens want to participate in a vice, they will find a way to legalize it.
In my state, they passed a law setting up a state lottery a few years ago. The pretext was that the lottery was going to raise funds to “enrich” education in the state. Hogwash! Folks just wanted to gamble.
So if people want to spend a good chunk of their lives intoxicated, I guess we should let them, whether the drug of choice is pot or booze. But let’s not kid ourselves that the stoners are being treated with medicine.
Wednesday, October 14, 2009
Hurricane Recovery
I haven’t posted in about a week because I was out of town. I took a long weekend and traveled down to New Orleans with some friends. This was our second trip. The first was in June of 2007.
Two years post-Katrina, the effects of the hurricane were still visible everywhere. On this trip, it was obvious that the recovery operations have come a long way. We did not have a car on this trip, so we could not get too far away from the tourist areas, so I cannot speak to the state of the recovery in the 9th ward and other outlying areas of the city.
Still, the amount of cleanup in the French Quarter, Warehouse District, and Central Business District was impressive. Two years ago, there were high rise office towers in the CBD with boarded up windows. The high water mark was still visible on many of the commercial buildings in the area around the Superdome that flooded. From my casual inspection, all of that damage has now been repaired.
Although the French Quarter experienced no flooding, hurricane winds had seriously damaged some buildings, especially along the riverfront. I looked for those same buildings, but it looks like they had been successfully rehabbed in the last two years.
We did see one lot on Exchange Place where a building had been taken down to the foundation, and a steel frame structure erected. Steel girders would support the second and third floor balconies. I suspect that once the building was finished, a façade would be installed on the exterior to fit the building in with prevailing historical architecture that surrounded it. But this looked more like the process of upgrading historic buildings than repairing storm damage.
The St. Charles and Canal Street streetcars were both running, a welcome change from 2007. We rode the St. Charles streetcar out past the Garden District to the end of the line. Once you got past Tulane University, there were more signs of disrepair. Gas lines were being reworked, and the sidewalks exhibited serious buckling. But we only saw one abandoned house with the spray painted markings the emergency crews had used. Two years ago those houses were everywhere, even in the high rent Garden District itself.
The biggest changes were to the businesses themselves. On our first visit, it was obvious that tourism businesses were suffering from the lack of workers. Every restaurant and retail store had help wanted signs out. Day and hours of operation were curtailed, due to the lack of staff. Levels of service were not what they should be, because the available staff were stretched too thin. In one coffee shop, the owner bussed the table before we sat down, took our order, then went back to the kitchen to cook it.
None of that was in evidence on this trip. All of the tourist businesses seemed to be operating at full capacity. I saw a few help wanted signs for retail counter help, but that was all.
From what I have read, rents in New Orleans have gone up significantly post-Katrina. However, the higher rents have not deterred people from moving back, rolling up their sleeves, and going to work.
New Orleans is a much smaller city than it was in summer of 2005, and it may always be a much smaller city than it was. But from one tourist’s perspective, the heavy lifting of recovery from Katrina appears to have been accomplished. It looks like the balance point between living costs and employment opportunities has been reached. Any future growth will have to be organic, driven by the dynamism of the local economy, instead of an influx of Federal money.
One more thing. I can personally attest that the oyster beds have recovered.
Two years post-Katrina, the effects of the hurricane were still visible everywhere. On this trip, it was obvious that the recovery operations have come a long way. We did not have a car on this trip, so we could not get too far away from the tourist areas, so I cannot speak to the state of the recovery in the 9th ward and other outlying areas of the city.
Still, the amount of cleanup in the French Quarter, Warehouse District, and Central Business District was impressive. Two years ago, there were high rise office towers in the CBD with boarded up windows. The high water mark was still visible on many of the commercial buildings in the area around the Superdome that flooded. From my casual inspection, all of that damage has now been repaired.
Although the French Quarter experienced no flooding, hurricane winds had seriously damaged some buildings, especially along the riverfront. I looked for those same buildings, but it looks like they had been successfully rehabbed in the last two years.
We did see one lot on Exchange Place where a building had been taken down to the foundation, and a steel frame structure erected. Steel girders would support the second and third floor balconies. I suspect that once the building was finished, a façade would be installed on the exterior to fit the building in with prevailing historical architecture that surrounded it. But this looked more like the process of upgrading historic buildings than repairing storm damage.
The St. Charles and Canal Street streetcars were both running, a welcome change from 2007. We rode the St. Charles streetcar out past the Garden District to the end of the line. Once you got past Tulane University, there were more signs of disrepair. Gas lines were being reworked, and the sidewalks exhibited serious buckling. But we only saw one abandoned house with the spray painted markings the emergency crews had used. Two years ago those houses were everywhere, even in the high rent Garden District itself.
The biggest changes were to the businesses themselves. On our first visit, it was obvious that tourism businesses were suffering from the lack of workers. Every restaurant and retail store had help wanted signs out. Day and hours of operation were curtailed, due to the lack of staff. Levels of service were not what they should be, because the available staff were stretched too thin. In one coffee shop, the owner bussed the table before we sat down, took our order, then went back to the kitchen to cook it.
None of that was in evidence on this trip. All of the tourist businesses seemed to be operating at full capacity. I saw a few help wanted signs for retail counter help, but that was all.
From what I have read, rents in New Orleans have gone up significantly post-Katrina. However, the higher rents have not deterred people from moving back, rolling up their sleeves, and going to work.
New Orleans is a much smaller city than it was in summer of 2005, and it may always be a much smaller city than it was. But from one tourist’s perspective, the heavy lifting of recovery from Katrina appears to have been accomplished. It looks like the balance point between living costs and employment opportunities has been reached. Any future growth will have to be organic, driven by the dynamism of the local economy, instead of an influx of Federal money.
One more thing. I can personally attest that the oyster beds have recovered.
Wednesday, October 7, 2009
Gee, this sounds like a great deal!
United Airlines has announced a new program this week. Premium Baggage allows the traveler to pay a single annual charge for the right to avoid individual flight baggage fees for a year. The fee for Premium Baggage is $249 per year, and you get to check two bags every time you take a United flight. The current fees are $20 for the first bag checked, and $30 for the second.
This plan works like a frequent flyer program, except that the incentives are reversed. With frequent flyer miles, the airline rewards your loyalty by giving you something. That reward could be upgrades to first class, or it could be free flights. Frequent flyer miles are the carrot the airline uses to affect the traveler’s behavior.
The Premium Baggage program is less about carrots, and more about sticks. Purchase the service, United is saying, and we’ll stop whacking you with extra charges every time you check in for a flight.
Basically, Premium Baggage is the frequent flyer program’s evil twin.
This plan works like a frequent flyer program, except that the incentives are reversed. With frequent flyer miles, the airline rewards your loyalty by giving you something. That reward could be upgrades to first class, or it could be free flights. Frequent flyer miles are the carrot the airline uses to affect the traveler’s behavior.
The Premium Baggage program is less about carrots, and more about sticks. Purchase the service, United is saying, and we’ll stop whacking you with extra charges every time you check in for a flight.
Basically, Premium Baggage is the frequent flyer program’s evil twin.
Tuesday, October 6, 2009
Cap and Trade: It ain't easy, being green.
Last week Exelon, a giant utility company, announced that it was ending its membership in the US Chamber of Commerce, citing opposition to the Chamber’s positions on climate change and the EPA’s recent moves to regulate carbon dioxide emissions as an immediate threat to human health and safety. Other high profile companies that have recently left the Chamber are Pacific Gas & Electric, PNR Resources (another utility), and Apple Computer. Nike has resigned from the Board of Directors of the Chamber, but is retaining their membership.
It looks like the progressive companies, the leaders of the future, have embraced the need for a carbon free future, and are willing to do whatever it takes to accomplish that future.
The funny thing though, is that none of those companies is going to suffer very much from supporting climate change legislation.
Exelon, for example, like Pacific G & E and PNR Resources, owns lots of nuclear power plants. So under carbon cap and trade legislation currently under consideration, these companies would be awarded what are called carbon offsets. Utilities that have a lot of coal fired power plants (big carbon emitters), would have to purchase those offsets to compensate for the amount of carbon they emit.
Basically, Exelon stands to make a lot of money from cap and trade legislation. If I could pick up an entirely new revenue source, without having to do any work for the extra money, I’d be in favor of that too. Exelon doesn’t even have to worry about upsetting their customers. The utilities that are buying offsets from Exelon have to deal with that headache, when they raise their customer’s rates to pay for the offsets.
Now let’s look at the other two examples, Nike and Apple. What I notice is that neither of these companies has significant manufacturing operations in the US. Both are essentially design and marketing operations that outsource all of the actual work of building their products to Asian contractors.
So you can put all the restrictions you want on carbon emissions associated with manufacturing. It won’t hurt those guys’ feelings in the least. After all, they’ve got no skin in the game.
Now, maybe we really do need to make huge reductions in the amount of carbon we emit as a society. And maybe the best way to do that is to place restrictions on large point sources like power plants, instead of forcing individuals to change their behavior. Maybe.
My point is that it is easy to be in favor of something when somebody else is going to have to pay for it. Easy, but not particularly virtuous or laudable.
It looks like the progressive companies, the leaders of the future, have embraced the need for a carbon free future, and are willing to do whatever it takes to accomplish that future.
The funny thing though, is that none of those companies is going to suffer very much from supporting climate change legislation.
Exelon, for example, like Pacific G & E and PNR Resources, owns lots of nuclear power plants. So under carbon cap and trade legislation currently under consideration, these companies would be awarded what are called carbon offsets. Utilities that have a lot of coal fired power plants (big carbon emitters), would have to purchase those offsets to compensate for the amount of carbon they emit.
Basically, Exelon stands to make a lot of money from cap and trade legislation. If I could pick up an entirely new revenue source, without having to do any work for the extra money, I’d be in favor of that too. Exelon doesn’t even have to worry about upsetting their customers. The utilities that are buying offsets from Exelon have to deal with that headache, when they raise their customer’s rates to pay for the offsets.
Now let’s look at the other two examples, Nike and Apple. What I notice is that neither of these companies has significant manufacturing operations in the US. Both are essentially design and marketing operations that outsource all of the actual work of building their products to Asian contractors.
So you can put all the restrictions you want on carbon emissions associated with manufacturing. It won’t hurt those guys’ feelings in the least. After all, they’ve got no skin in the game.
Now, maybe we really do need to make huge reductions in the amount of carbon we emit as a society. And maybe the best way to do that is to place restrictions on large point sources like power plants, instead of forcing individuals to change their behavior. Maybe.
My point is that it is easy to be in favor of something when somebody else is going to have to pay for it. Easy, but not particularly virtuous or laudable.
Tuesday, September 29, 2009
Okay, this is creepy. This is a video of an elementary school class being taught songs of praise to President Obama:
It's a little hard to understand, so here is a transcription of the lyrics to the first song:
Barack Hussein Obama
He said that all must lend a hand [?]
To make this country strong again
Mmm, mmm, mm!
Barack Hussein Obama
He said we must be clear today
Equal work means equal pay
Mmm, mmm, mm!
Barack Hussein Obama
He said that we must take a stand
To make sure everyone gets a chance
Mmm, mmm, mm!
Barack Hussein Obama
He said Red, Yellow, Black or White
All are equal in his sight
Mmm, mmm, mm!
Now the sentiments expressed are completely innocuous. Equality and equal opportunity are laudable values, and I don't think anyone could find fault with them. What's nuts about this is that it looks like the teachers are indoctrinating a group of small children to worship an elected politician.
The right wing in this country has personalized the policy debate to a shameful degree. When I see pictures of the President photoshopped to look like the Joker in the movie "The Dark Knight," I'm appalled. Not only is it disrespectful and uncalled for, it does nothing to advance the policy debate.
But on the left wing side, there appears to have arisen a cult of personality around Barack Obama that is as polarizing in its own way. Teaching little children to sing paeans to the Dear Leader is something you would expect to see in a totalitarian dictatorship. Since these teachers thought it up on their own, it's a bit spooky.
There are beaucoup nut jobs on the right side of the debate in this country, granted. But there is a full complement of wingnuts on the left as well.
It's a little hard to understand, so here is a transcription of the lyrics to the first song:
Barack Hussein Obama
He said that all must lend a hand [?]
To make this country strong again
Mmm, mmm, mm!
Barack Hussein Obama
He said we must be clear today
Equal work means equal pay
Mmm, mmm, mm!
Barack Hussein Obama
He said that we must take a stand
To make sure everyone gets a chance
Mmm, mmm, mm!
Barack Hussein Obama
He said Red, Yellow, Black or White
All are equal in his sight
Mmm, mmm, mm!
Now the sentiments expressed are completely innocuous. Equality and equal opportunity are laudable values, and I don't think anyone could find fault with them. What's nuts about this is that it looks like the teachers are indoctrinating a group of small children to worship an elected politician.
The right wing in this country has personalized the policy debate to a shameful degree. When I see pictures of the President photoshopped to look like the Joker in the movie "The Dark Knight," I'm appalled. Not only is it disrespectful and uncalled for, it does nothing to advance the policy debate.
But on the left wing side, there appears to have arisen a cult of personality around Barack Obama that is as polarizing in its own way. Teaching little children to sing paeans to the Dear Leader is something you would expect to see in a totalitarian dictatorship. Since these teachers thought it up on their own, it's a bit spooky.
There are beaucoup nut jobs on the right side of the debate in this country, granted. But there is a full complement of wingnuts on the left as well.
Thursday, September 24, 2009
Off Topic Post
I watched the new Courtney Cox comedy, Cougar Town, last night. The set up is a 40 something woman reentering the dating scene after divorce. It is sharp, well written comedy. I’ll make a point of watching it again.
It’s odd what your subconscious will throw out. I woke up this morning with the following thoughts crystallizing in my brain.
In my younger years, before I met my wife, I would periodically go out on dates to expensive restaurants. On these excursions, I would invariable pay, and I would invariably not get lucky.
It occurs to me that this was the singles equivalent of hanging a pork chop around the neck of the ugly baby so that the dog will play with the kid. “You’re going to pay for dinner? And I can order anything I want? Okay, I’ll go out with you.”
Eventually, I did meet my wife, the one woman in North America who looks at me and thinks “wow, this is it.” She is a rare creature, as the taste for short, scrawny, balding geek is not universally shared in our culture.
Anyway, if I could take back all the lobster dinners I bought without romantic success, I’d be two house payments ahead, and whole ocean ecosystems would have been saved.
It’s odd what your subconscious will throw out. I woke up this morning with the following thoughts crystallizing in my brain.
In my younger years, before I met my wife, I would periodically go out on dates to expensive restaurants. On these excursions, I would invariable pay, and I would invariably not get lucky.
It occurs to me that this was the singles equivalent of hanging a pork chop around the neck of the ugly baby so that the dog will play with the kid. “You’re going to pay for dinner? And I can order anything I want? Okay, I’ll go out with you.”
Eventually, I did meet my wife, the one woman in North America who looks at me and thinks “wow, this is it.” She is a rare creature, as the taste for short, scrawny, balding geek is not universally shared in our culture.
Anyway, if I could take back all the lobster dinners I bought without romantic success, I’d be two house payments ahead, and whole ocean ecosystems would have been saved.
Tuesday, September 22, 2009
Silver Linings
Economically, we're not out of the wood yet. For the business I work at, sales continue to be greatly reduced from the same period a year ago. We saw some signs of recovery in the second quarter, but as we close out the third quarter, our order backlog has dropped back down.
September has been particularly slow. For our core business segment, the volume of product we are shipping this month is no more than what we shipped in August. However, due to the vagaries of our accounting system, we have five weeks of production this month, versus four weeks last month. For each week this month, we only have 80% of the activity compared to each week in August.
The bottom line to this it that there isn’t enough work for all the employees to have a full schedule. There is always the temptation in this situation to keep people busy by running extra inventory. Inevitably, however, you end up running the wrong mix of product, leaving you short of raw material to run what your customers will actually want. Also, by building inventory on the theory of “build it and they will come,” you make the correction that much worse when you finally recognize that increased sales are not just around the corner.
So I’m biting the bullet. I’m scheduling two fewer production days next week. At least this will give us a chance to do our end of quarter inventory on straight time. Normally we have the inventory crew come in at midnight after the last production shift at the end of a month, and they get time and a half.
The excess production only built up during the second half of this month. For the first couple of weeks in September, not only did we have a short week because of Labor Day, but we also had a lot of people out sick, which, in a perverse way, cut into our capacity. I needed all the healthy people who showed up for work. It was only after the wave of illness based and everyone came back to work that we began overproducing.
You know, not everyone can see the silver lining in a flu pandemic. And they call me a pessimist.
September has been particularly slow. For our core business segment, the volume of product we are shipping this month is no more than what we shipped in August. However, due to the vagaries of our accounting system, we have five weeks of production this month, versus four weeks last month. For each week this month, we only have 80% of the activity compared to each week in August.
The bottom line to this it that there isn’t enough work for all the employees to have a full schedule. There is always the temptation in this situation to keep people busy by running extra inventory. Inevitably, however, you end up running the wrong mix of product, leaving you short of raw material to run what your customers will actually want. Also, by building inventory on the theory of “build it and they will come,” you make the correction that much worse when you finally recognize that increased sales are not just around the corner.
So I’m biting the bullet. I’m scheduling two fewer production days next week. At least this will give us a chance to do our end of quarter inventory on straight time. Normally we have the inventory crew come in at midnight after the last production shift at the end of a month, and they get time and a half.
The excess production only built up during the second half of this month. For the first couple of weeks in September, not only did we have a short week because of Labor Day, but we also had a lot of people out sick, which, in a perverse way, cut into our capacity. I needed all the healthy people who showed up for work. It was only after the wave of illness based and everyone came back to work that we began overproducing.
You know, not everyone can see the silver lining in a flu pandemic. And they call me a pessimist.
Friday, September 18, 2009
The World's Single Most Destructive Thought
I ran into this post on a blog called I Luv SA. When I read the opening sentence, I realized that the blogger had perfectly encapsulated a specific worldview. "I am poor because you are rich."
This is a worldview that is gaining increasing currency in American politics and policy today. Whenever I read about concerns over increasing income inequality, and how the top 10% is grabbing all the economic gains, this destructive thought is underlying those concerns.
In college I took a seminar in Comparative Economics, taught by Franco Modigliano, who went on to win the Nobel Prize in Economics. If I had known he was going to win the Nobel Prize, I probably wouldn't have cut class as often as I did.
Anyway, in one of the class sessions I did attend, he spent most of the time demolishing Marx's economic theories. He showed how, over the last century, various economists had pointed out how wrong Marx's theories were.
Most of the arguments against Marx were fairly technical, and to tell you the truth, I don't remember a one of them. But the class did make an immpact on me. After spending most of the class knocking down Marxism, Professor Modigliano then provided the insight that has stuck with me over the last thirty years: "The important thing about Marxism is not that it is correct. The important thing is that every generation has to prove it false all over again."
"I am poor because you are rich." It is a wonderfully seductive idea. It absolves me of all responsibility, justifies any actions I take against you.
It just happens to be completely wrong.
This is a worldview that is gaining increasing currency in American politics and policy today. Whenever I read about concerns over increasing income inequality, and how the top 10% is grabbing all the economic gains, this destructive thought is underlying those concerns.
In college I took a seminar in Comparative Economics, taught by Franco Modigliano, who went on to win the Nobel Prize in Economics. If I had known he was going to win the Nobel Prize, I probably wouldn't have cut class as often as I did.
Anyway, in one of the class sessions I did attend, he spent most of the time demolishing Marx's economic theories. He showed how, over the last century, various economists had pointed out how wrong Marx's theories were.
Most of the arguments against Marx were fairly technical, and to tell you the truth, I don't remember a one of them. But the class did make an immpact on me. After spending most of the class knocking down Marxism, Professor Modigliano then provided the insight that has stuck with me over the last thirty years: "The important thing about Marxism is not that it is correct. The important thing is that every generation has to prove it false all over again."
"I am poor because you are rich." It is a wonderfully seductive idea. It absolves me of all responsibility, justifies any actions I take against you.
It just happens to be completely wrong.
Thursday, September 17, 2009
Job Seeking
I had an interesting conversation the other day. I was sitting at my desk, upgrading a spreadsheet to automatically notify us when it was time to order more components for one of our product lines, when the phone rang. On the other end was a salesman for a metals service center. He was just doing what salesmen do, cold calling to try and find potential new accounts.
We talked for a minute or two, and quickly established that my company doesn’t use the alloys he carries. He started to apologize for taking my time. I told him it was okay. After all, I’ve sat on the other side of the desk, trying to drum up new business. No reason not to be polite. If you never talk to salesmen, you’ll never find any new opportunities.
On a whim, I asked him how his business was doing. Business was slow, but he was surviving. Since most salesmen are at least partially paid on commission, he had to have been working harder, for less money, than a year ago. My bonus won’t be as good as it was last year, so I’m in the same boat. I told him that qualified us both for the category of under employed. Working, but not making as much as we used to. Of course, that beats the crap out of unemployment.
Then I mentioned that I didn’t understand how some people could fall out of the unemployment statistics because they had “stopped looking for work.” I don’t know about you, but about every six hours I get hungry. If you have no source of income, and you’re not looking for work, how do you keep buying groceries?
The salesman told me a story. He had two close friends, and all three of them had been laid off within a short period of time. One had found a new job within a month. He had looked for a couple of months before landing his current position. Then there was his other friend.
His other friend had been laid off from his previous job last October. It’s closing in on a year without work. The last time the salesman had visited his friend, the guy had said he had given up looking for a job. Between unemployment compensation and side work as a mechanic, the friend was just getting by. When reminded that the extended unemployment benefits were about to run out, the friend replied “I don’t think that the government is going to let me starve.”
Well, this is ostensibly a democracy. So can I register a vote on that?
Seriously, this makes me think that a lot of the people who have “stopped looking,” have stopped because they are still getting benefits. When their benefits run out, they will rediscover a sense of urgency about generating more cash flow. This may not take the form of another job. Some of those people will work a lot harder at their side business. Or they may lower their expectations and take on multiple part time gigs.
If you lower your expectations while you are still on unemployment, you risk losing your benefit. If the jobs available pay only a little more than unemployment compensation, why take the job? But once the benefit checks stop coming in, your perspective will change.
After all, you gotta eat.
We talked for a minute or two, and quickly established that my company doesn’t use the alloys he carries. He started to apologize for taking my time. I told him it was okay. After all, I’ve sat on the other side of the desk, trying to drum up new business. No reason not to be polite. If you never talk to salesmen, you’ll never find any new opportunities.
On a whim, I asked him how his business was doing. Business was slow, but he was surviving. Since most salesmen are at least partially paid on commission, he had to have been working harder, for less money, than a year ago. My bonus won’t be as good as it was last year, so I’m in the same boat. I told him that qualified us both for the category of under employed. Working, but not making as much as we used to. Of course, that beats the crap out of unemployment.
Then I mentioned that I didn’t understand how some people could fall out of the unemployment statistics because they had “stopped looking for work.” I don’t know about you, but about every six hours I get hungry. If you have no source of income, and you’re not looking for work, how do you keep buying groceries?
The salesman told me a story. He had two close friends, and all three of them had been laid off within a short period of time. One had found a new job within a month. He had looked for a couple of months before landing his current position. Then there was his other friend.
His other friend had been laid off from his previous job last October. It’s closing in on a year without work. The last time the salesman had visited his friend, the guy had said he had given up looking for a job. Between unemployment compensation and side work as a mechanic, the friend was just getting by. When reminded that the extended unemployment benefits were about to run out, the friend replied “I don’t think that the government is going to let me starve.”
Well, this is ostensibly a democracy. So can I register a vote on that?
Seriously, this makes me think that a lot of the people who have “stopped looking,” have stopped because they are still getting benefits. When their benefits run out, they will rediscover a sense of urgency about generating more cash flow. This may not take the form of another job. Some of those people will work a lot harder at their side business. Or they may lower their expectations and take on multiple part time gigs.
If you lower your expectations while you are still on unemployment, you risk losing your benefit. If the jobs available pay only a little more than unemployment compensation, why take the job? But once the benefit checks stop coming in, your perspective will change.
After all, you gotta eat.
Tuesday, September 15, 2009
French Health Care, Part Deux
In my last post I talked a little bit about how the French pay for their health care system, the one everybody in the US media thinks is so fabulous. The French pay a 22% payroll tax rate, compared to 7.5% for American workers. This is, of course, more than matched by the employer. Also, it turns out that a lot of French households also carry private supplemental health insurance. This must be sort of like the Medigap coverage that many seniors in this country have, that supplements what Medicare pays medical providers. So that’s where the money comes from, the revenue side of the equation.
But we also have to look at the expense side of the equation. After all, the French pay about 11% of their GNP for health care, compared to over 17% of GNP in the US. Now call me crazy, but I have a hard time believing that the French are more efficient than Americans at anything. A French surgeon doesn’t do a bypass operation twice as fast as an American, and I doubt that French surgical teams have only half as many nurses and techs as American teams.
Although the man hours per procedure may be the same in both countries, it turns out that there is a huge difference in the cost of those man hours. On average, doctors in France make only about one third what doctors in the US earn. This is primarily because the French Social Security fund is the primary buyer of medical care, and they use their near monopoly power to keep reimbursements low.
Another place where the French use the monopoly power of their system is in pharmaceutical purchasing. Basically, the French government tells the drug companies what price they will get for their products. Since the alternative is to lose the French market, the drug companies take the deal.
As a matter of fact, most of the western world does the same thing. That leaves the US as the only unregulated pharmaceutical market. The result is that the US market ends up funding most of the research into new drugs.
So the French system does use the power of the public insurance provider (what we would call the public option) to keep costs lower than in the US. But here’s the rub: Their costs keep going up, just like ours. The French have raised their Social Security tax six times in the last 20 years to pay for their “free” health care.
Insurance companies are not popular in our culture. Neither are pharmaceutical companies. So maybe there is the political will to destroy their business model in the name of lowering costs. I’m not so sure that, as a people, we think it is okay to cut the pay of our doctors in half. Without those kind of savings, providing free care to everyone is just going to raise prices on everyone, healthy and sick alike.
But we also have to look at the expense side of the equation. After all, the French pay about 11% of their GNP for health care, compared to over 17% of GNP in the US. Now call me crazy, but I have a hard time believing that the French are more efficient than Americans at anything. A French surgeon doesn’t do a bypass operation twice as fast as an American, and I doubt that French surgical teams have only half as many nurses and techs as American teams.
Although the man hours per procedure may be the same in both countries, it turns out that there is a huge difference in the cost of those man hours. On average, doctors in France make only about one third what doctors in the US earn. This is primarily because the French Social Security fund is the primary buyer of medical care, and they use their near monopoly power to keep reimbursements low.
Another place where the French use the monopoly power of their system is in pharmaceutical purchasing. Basically, the French government tells the drug companies what price they will get for their products. Since the alternative is to lose the French market, the drug companies take the deal.
As a matter of fact, most of the western world does the same thing. That leaves the US as the only unregulated pharmaceutical market. The result is that the US market ends up funding most of the research into new drugs.
So the French system does use the power of the public insurance provider (what we would call the public option) to keep costs lower than in the US. But here’s the rub: Their costs keep going up, just like ours. The French have raised their Social Security tax six times in the last 20 years to pay for their “free” health care.
Insurance companies are not popular in our culture. Neither are pharmaceutical companies. So maybe there is the political will to destroy their business model in the name of lowering costs. I’m not so sure that, as a people, we think it is okay to cut the pay of our doctors in half. Without those kind of savings, providing free care to everyone is just going to raise prices on everyone, healthy and sick alike.
Thursday, September 10, 2009
"Who is this guy FICA, and why does he get so much of my money?": French Edition
The President gave his big speech on health care reform last night. It’s hard for me to believe that a single oration, no matter how inspiring, is enough to move the needle on getting this kind of major legislation passed thorough Congress in the face of entrenched opposition. “Gorsh, that Obama feller sure talks real purty. He convinced me to restructure one seventh of the American economy. I mean, he’s just so durn charismatic!”
But the occasion did spur me to start thinking about health insurance in this country again. Actually, it got me thinking about health insurance in France. After all, the French system is the model most commonly cited in the media as the ideal from the patient’s perspective. Everybody’s covered, the copays are small, and you can never be denied coverage.
Best of all, from all published reports, there is exactly zero interaction with the government run insurance company. You just call the doctor or drop in at the hospital. All the messy financial details are handled off stage. “Monsieur, let us focus on making you well.” What’s not to like?
The question that pops up is a simple one: How do they pay for this great system? More specifically, who pays for the system, and how much do they pay? After all, the money has got to come from somewhere, right?
So I did a little digging, which is a shocking easy thing to do, what with this newfangled Internet and all. It turns out that the French health insurance system is part of the French Social Security system. So in addition to paying retirees, the system also pays for everybody’s medical bills. The interesting thing is that Social Security in France is funded via the same mechanism as in the US: payroll taxes.
In the US, the tax rate for Social Security and Medicare combined is 15%, with half that paid by the employer and half by the employee. The effective payroll tax rate for employees in America is 7.5%.
So what is the equivalent rate in France?
The equivalent rate turns out to be about 22%. That’s right, 22%. So let us say that you earn $10 an hour. In America, your take home is $9.25/hour. In France, say hello to $7.80/hour.
It kind of puts a different spin on the situation, don’t cha think?
I wonder why that number is being reported on more often in this debate. After all, the money for health care has to come from somewhere. There ain’t no such thing as a free lunch.
But the occasion did spur me to start thinking about health insurance in this country again. Actually, it got me thinking about health insurance in France. After all, the French system is the model most commonly cited in the media as the ideal from the patient’s perspective. Everybody’s covered, the copays are small, and you can never be denied coverage.
Best of all, from all published reports, there is exactly zero interaction with the government run insurance company. You just call the doctor or drop in at the hospital. All the messy financial details are handled off stage. “Monsieur, let us focus on making you well.” What’s not to like?
The question that pops up is a simple one: How do they pay for this great system? More specifically, who pays for the system, and how much do they pay? After all, the money has got to come from somewhere, right?
So I did a little digging, which is a shocking easy thing to do, what with this newfangled Internet and all. It turns out that the French health insurance system is part of the French Social Security system. So in addition to paying retirees, the system also pays for everybody’s medical bills. The interesting thing is that Social Security in France is funded via the same mechanism as in the US: payroll taxes.
In the US, the tax rate for Social Security and Medicare combined is 15%, with half that paid by the employer and half by the employee. The effective payroll tax rate for employees in America is 7.5%.
So what is the equivalent rate in France?
The equivalent rate turns out to be about 22%. That’s right, 22%. So let us say that you earn $10 an hour. In America, your take home is $9.25/hour. In France, say hello to $7.80/hour.
It kind of puts a different spin on the situation, don’t cha think?
I wonder why that number is being reported on more often in this debate. After all, the money for health care has to come from somewhere. There ain’t no such thing as a free lunch.
Monday, September 7, 2009
Interlude
Well, I haven’t blogged in over a week. This has a lot to do with the Office Manager at work going out on maternity leave last month. The added responsibilities have kept me pretty busy. It’s not that I’ve picked up so much extra workload, because we divvied up her work among four people. It’s that she is so damn competent at her job, whereas I am not. Oh, I’m competent enough at my work, just not hers. So it takes me twice as long to do a task as it would normally take her.
It gotten to the point where I’m ready to go to her house and knock on the door. Then, when her husband answers, I’ll punch him. “You did this to her, and don’t think I don’t know it! Miracle of life, my ass! Tell her that play time’s over, and she needs to get her butt back into the office.”
Kidding, just kidding.
It gotten to the point where I’m ready to go to her house and knock on the door. Then, when her husband answers, I’ll punch him. “You did this to her, and don’t think I don’t know it! Miracle of life, my ass! Tell her that play time’s over, and she needs to get her butt back into the office.”
Kidding, just kidding.
Wednesday, August 26, 2009
What was old is new again.
Remember Digger?
A couple of years ago the pharmaceutical giant Novartis launched a marketing campaign for their drug Lamisil. Lamisil was the tradename for an oral antifungal medication. The primary use of the drug was to treat toenail fungus.
As a prescription medicine, the idea of the marketing was to convince consumers to ask their doctor for a scrip for Lamisil. The biggest hurdle in doing that was to get people aware of the existence of toenail fungus. I don’t know about you, but I don’t spend a great deal of time critically examining my toenails for signs of health.
So the advertising brainiacs in charge of the campaign decided on a tried and true solution: they created an animated personification of the disease to explain what was so terrible about having toenail fungus. Enter Digger. A commercial from the original ad campaign is shown below.
As the animated avatar for a fungal infection, Digger walks the fine line between being cute and annoying at the same time. Sort of like the in-law with the store of great jokes, who stays three days too long on a visit. Or the bedraggled looking street cat that lets you pet it and purrs, then turns and claws the crap out of your hand and wrist.
Lamisil lost patent protection in 2007, at which time generic competition came onto the prescription market. That was about the time the TV commercials stopped running. With generic competition and the accompanying loss of market share, heavy advertising probably reduced the profitability of the Lamisil brand.
After all, if you’re spending big bucks on TV ads to make people aware of the existence of the disease your drug treats, and then people end up buying the generic because of lower copays, all your ads are doing is driving sales for your competitor. So you drop the ads, lower your price, and you can still make more money on lower sales volume. Television advertising is expensive. It costs vastly more to market a drug than it does to manufacture and distribute it.
Fast forward to today. Novartis has launched a topical version of Lamisil as an over the counter medication. The most common reason folks pop into Walgreens to pick up antifungals is to treat athlete’s foot. Now, profit margins on over the counter meds can be pretty good, but you have to support the brand with marketing.
So Digger has been resurrected, this time as athlete’s foot fungus. You can see the new ad here.
So not only are pharmaceuticals resurrected in new formulations, but now the drug mascots are being reused as well. Maybe there really is nothing new under the sun.
A couple of years ago the pharmaceutical giant Novartis launched a marketing campaign for their drug Lamisil. Lamisil was the tradename for an oral antifungal medication. The primary use of the drug was to treat toenail fungus.
As a prescription medicine, the idea of the marketing was to convince consumers to ask their doctor for a scrip for Lamisil. The biggest hurdle in doing that was to get people aware of the existence of toenail fungus. I don’t know about you, but I don’t spend a great deal of time critically examining my toenails for signs of health.
So the advertising brainiacs in charge of the campaign decided on a tried and true solution: they created an animated personification of the disease to explain what was so terrible about having toenail fungus. Enter Digger. A commercial from the original ad campaign is shown below.
As the animated avatar for a fungal infection, Digger walks the fine line between being cute and annoying at the same time. Sort of like the in-law with the store of great jokes, who stays three days too long on a visit. Or the bedraggled looking street cat that lets you pet it and purrs, then turns and claws the crap out of your hand and wrist.
Lamisil lost patent protection in 2007, at which time generic competition came onto the prescription market. That was about the time the TV commercials stopped running. With generic competition and the accompanying loss of market share, heavy advertising probably reduced the profitability of the Lamisil brand.
After all, if you’re spending big bucks on TV ads to make people aware of the existence of the disease your drug treats, and then people end up buying the generic because of lower copays, all your ads are doing is driving sales for your competitor. So you drop the ads, lower your price, and you can still make more money on lower sales volume. Television advertising is expensive. It costs vastly more to market a drug than it does to manufacture and distribute it.
Fast forward to today. Novartis has launched a topical version of Lamisil as an over the counter medication. The most common reason folks pop into Walgreens to pick up antifungals is to treat athlete’s foot. Now, profit margins on over the counter meds can be pretty good, but you have to support the brand with marketing.
So Digger has been resurrected, this time as athlete’s foot fungus. You can see the new ad here.
So not only are pharmaceuticals resurrected in new formulations, but now the drug mascots are being reused as well. Maybe there really is nothing new under the sun.
Friday, August 21, 2009
Will wonders never cease?
I didn't think it was possible.
I found a thoughtful, well-written article on the CBS website. It points out the Obamacare healthcare reform proposals are being sold on the basis that "reform" is necessary to reduce health care spending, but that the current proposals will, in fact, increase health care spending and make access to healthcare scarcer, not more availible.
The idea that it was thoughtful and well-written doesn't surprise me. Across the political spectrum, there are many excellent writers. For example, Paul Krugman irritates the hell out of me, but he writes well. Robert Reich has been known to cause me to actually froth at the mouth. Real foam, no kidding. But it is because he scores his points so well that he irks me so badly.
And it is not that the article pointed out flaws in the administration's healthcare proposals. I completely agreed with the points that were made. I am, after all, only slightly to the right...of Attila the Hun.
No, it was that the article appeared on the CBS website. I would have thought that as a bastion of the Eastern establishment, a pillar of the mainstream media, CBS would, if anything, be cheerleading for the administration's proposals.
What's next? Will Rachel Maddow start opposing sending more troops to Afghanistan?
I found a thoughtful, well-written article on the CBS website. It points out the Obamacare healthcare reform proposals are being sold on the basis that "reform" is necessary to reduce health care spending, but that the current proposals will, in fact, increase health care spending and make access to healthcare scarcer, not more availible.
The idea that it was thoughtful and well-written doesn't surprise me. Across the political spectrum, there are many excellent writers. For example, Paul Krugman irritates the hell out of me, but he writes well. Robert Reich has been known to cause me to actually froth at the mouth. Real foam, no kidding. But it is because he scores his points so well that he irks me so badly.
And it is not that the article pointed out flaws in the administration's healthcare proposals. I completely agreed with the points that were made. I am, after all, only slightly to the right...of Attila the Hun.
No, it was that the article appeared on the CBS website. I would have thought that as a bastion of the Eastern establishment, a pillar of the mainstream media, CBS would, if anything, be cheerleading for the administration's proposals.
What's next? Will Rachel Maddow start opposing sending more troops to Afghanistan?
Tuesday, August 18, 2009
A new milestone in American eating!
Who says the spirit of innovation is dead? Who claims that nothing is invented here anymore, that America's best days are behind us? I cry No! The spirit that inspired our forefathers breathes within us yet.
The Wisconsin state fair is in full swing up in West Allis, WI (part of the Greater Allis metroplex). On the midway, inbetween the Ferris wheel and the prize steers, along with the funnel cakes and corn dogs, a new champion has emerged. Chocolate covered bacon. You heard me aright, citizens. American ingenuity has found a way to marry pork products and milk chocolate. Not stopping there, this new food item is actually served on a stick, for the culinary convenience of the consumer.
Bacon on a stick would be invention enough for some, more timid nations. Combining meat and milk chocolate would be too radical in lesser peoples. But in this great land of ours, the sky's the limit when it comes to increasing the caloric density of foodstuffs, whilst simultaneously making it easier to eat one handed.
Is this a great country, or what?
It makes you wonder what new comestible is still merely a gleam in some bold entrepreneur's eye. Caramel coated spam, anyone?
The Wisconsin state fair is in full swing up in West Allis, WI (part of the Greater Allis metroplex). On the midway, inbetween the Ferris wheel and the prize steers, along with the funnel cakes and corn dogs, a new champion has emerged. Chocolate covered bacon. You heard me aright, citizens. American ingenuity has found a way to marry pork products and milk chocolate. Not stopping there, this new food item is actually served on a stick, for the culinary convenience of the consumer.
Bacon on a stick would be invention enough for some, more timid nations. Combining meat and milk chocolate would be too radical in lesser peoples. But in this great land of ours, the sky's the limit when it comes to increasing the caloric density of foodstuffs, whilst simultaneously making it easier to eat one handed.
Is this a great country, or what?
It makes you wonder what new comestible is still merely a gleam in some bold entrepreneur's eye. Caramel coated spam, anyone?
Monday, August 17, 2009
Ancient China
I just finished reading a translation of Annals of the Grand Historian by Sima Qian. Annals covers the history of the Qin dynasty, the revolt against the Qin, founding of the Han dynasty that followed, and includes much of the early years of the Han dynasty. Written about 100 BC, it covers the period from about 350 BC to the author's immediate past.
In my translation, the last chapter is titled The Money Makers. The chapter is a short account of some of the ways of earning money in ancient China. More generally, it lays out Sima Qian's understanding of the motivations that drove what was, to him, the contemporary economy.
Some of the historian's remarks jumped off the page at me, and I thought I'd share them:
"... when it comes to those impoverished men with aged parents and wives and children too weak or young to help them out... who must depend upon the gifts and contributions of the community for their food and clothing and are unable to provide for themselves--if men such as these, reduced to such straits, still fail to feel any shame or embarrassment, then they hardly deserve to be called human." You have to wonder what Sima Qian would make of the modern idea of entitlements. No need to feel shame over not being able to feed your kids. You're entitled to food stamps.
Or this:
"Therefore, when men have no wealth at all, they live by their brawn; when they have a little, they struggle to get ahead by their brains; and when they already have plenty of money, they look for an opportunity for a good investment. This is in general the way things work."
Or this:
"As for the ordinary lot of tax-paying commoners, if they are confronted by someone whose wealth is ten times their own, they will behave with humility; if by someone whose wealth is 100 times their own, they will cringe with fear; if by someone whose wealth is 1,000 times their own, they will undertake to work for him; and if by someone whose wealth is 10,000 times their own they will become his servants. This is the principle of things."
With very little modification, these statements would accurately describe economic life in today's capitalist societies. What is amazing about this is that Sima Qian was writing around 100 BC, over 2000 years ago.
The more things change, the more they stay the same. And people wonder why I'm a conservative.
In my translation, the last chapter is titled The Money Makers. The chapter is a short account of some of the ways of earning money in ancient China. More generally, it lays out Sima Qian's understanding of the motivations that drove what was, to him, the contemporary economy.
Some of the historian's remarks jumped off the page at me, and I thought I'd share them:
"... when it comes to those impoverished men with aged parents and wives and children too weak or young to help them out... who must depend upon the gifts and contributions of the community for their food and clothing and are unable to provide for themselves--if men such as these, reduced to such straits, still fail to feel any shame or embarrassment, then they hardly deserve to be called human." You have to wonder what Sima Qian would make of the modern idea of entitlements. No need to feel shame over not being able to feed your kids. You're entitled to food stamps.
Or this:
"Therefore, when men have no wealth at all, they live by their brawn; when they have a little, they struggle to get ahead by their brains; and when they already have plenty of money, they look for an opportunity for a good investment. This is in general the way things work."
Or this:
"As for the ordinary lot of tax-paying commoners, if they are confronted by someone whose wealth is ten times their own, they will behave with humility; if by someone whose wealth is 100 times their own, they will cringe with fear; if by someone whose wealth is 1,000 times their own, they will undertake to work for him; and if by someone whose wealth is 10,000 times their own they will become his servants. This is the principle of things."
With very little modification, these statements would accurately describe economic life in today's capitalist societies. What is amazing about this is that Sima Qian was writing around 100 BC, over 2000 years ago.
The more things change, the more they stay the same. And people wonder why I'm a conservative.
Wednesday, August 5, 2009
A Bad Place to Get Lost
A leading story in the news today has been the release of two American journalists by North Korea. The two women were working on stories in a border region between China and North Korea when they were scooped up and arrested for spying by the North Koreans. There is some question as to which side of the border they were actually on when they were grabbed.
After five months of captivity, during which North Korea threatened to send them to a hard labor camp for their "crimes," there was a recent break in the negotiations for their release. Bill Clinton flew to Pyongyang, sat through a photo op with Kim Jong Il, and whisked the women back to the States.
Meanwhile, three Americans who strayed across the Iranian border while hiking in Iraq have been detained by the Iranians since last Friday.
When the authorities in the United States find citizens of other countries wandering across our borders without authorization, we call them illegal immigrants and boot them out. We actually send them home on our dime. When Iran and North Korea find people crossing their border, they snatch them up and toss them in a dungeon.
Maybe there is something to this "Axis of Evil" thing, after all.
After five months of captivity, during which North Korea threatened to send them to a hard labor camp for their "crimes," there was a recent break in the negotiations for their release. Bill Clinton flew to Pyongyang, sat through a photo op with Kim Jong Il, and whisked the women back to the States.
Meanwhile, three Americans who strayed across the Iranian border while hiking in Iraq have been detained by the Iranians since last Friday.
When the authorities in the United States find citizens of other countries wandering across our borders without authorization, we call them illegal immigrants and boot them out. We actually send them home on our dime. When Iran and North Korea find people crossing their border, they snatch them up and toss them in a dungeon.
Maybe there is something to this "Axis of Evil" thing, after all.
Subscribe to:
Posts (Atom)