The $8000 tax incentive for new home buyers is designed to help spur on the homebuilding and home sales markets. Unfortunately it misses the mark in several respects.
The biggest plug in the system are those who have homes, need to move for a new job opportunity, change in job status that could threaten their ability to pay the mortgage, want to move to a new school district or would like to upsize or downsize. A great many people have homes whose values in today’s markets are less than the amount of their mortgage. As a result they cannot afford to sell their current homes until home values increase.
I am certain that this is not a new idea, but if we really want to spur home sales, increase mobility for purposes of supporting job growth and opportunity, reduce mortgage defaults and foreclosures, and free up the system to get back in balance, the government should provide a tax credit to old home owners who:
1. Want or need to move;
2. Can show that the value of their home currently is less than the amount of their mortgage.
The government can “bail-out” regular people by providing cash to the banks for the difference between the home value and mortgage balance, up to $8000 or some other number. The purchaser’s of that home will finance it properly and will be able to sell it when they are ready. This stream of purchasers does not exist now, because they cannot afford to sell their current home.
If one wants to open the floodgates to a normal flow of home sales again, it is this stopper that must be unplugged.
Tuesday, November 10, 2009
Thursday, November 5, 2009
Time to Stop Deciding Who “Won”
The one thing that is clear from the most recent elections and those that occurred a year ago is that the people of this country want our elected officials to stop playing the political game, to stop worrying about whether the Democrats or Republicans “won” or “lost” and start to solve the critical problems that they care about.
I for one abhor the constant discussion on TV, radio, blogs and in print about which side is winning on this or that issue, election or policy debate. The issues, I suppose, are too complex for the mainstream media to understand.
Mostly, though, I think it is just a lot more fun for the political reporters to pretend for a time that they are ESPN sports junkies reporting in SportCenter wittiness on wins, losses and the performances of the participants. Top plays. Web gems. Hilarious miscues, errors and bloopers.
Alas, whether or not the future of our country and the world depends on intelligent action in Washington, the discussion continues to center around whether each event was a win or a loss for Barrack Obama.
Sure we have an unwieldy federal deficit, millions of uninsured Americans, drug battles with Mexican kingpins, wars in Iraq and Afghanistan, an impending energy crisis, and the possibility of Global Warming creating tremendous human chaos, not to mention the economy and unemployment, but clearly the critical point is how each politician rates in terms of wins and losses.
And, of course, wins are not measured by whether we solve any of these problems. No, they are measured by rhetoric in the House, battles over details in the Senate, local elections, speeches, interviews, and whatever the pundits decide merit placement on the scorecard. And somehow, pushing these important policy issues forward seldom seems to make it on the list.
I wonder who really is causing the gridlock in Washington. I blame it all on ESPN.
I for one abhor the constant discussion on TV, radio, blogs and in print about which side is winning on this or that issue, election or policy debate. The issues, I suppose, are too complex for the mainstream media to understand.
Mostly, though, I think it is just a lot more fun for the political reporters to pretend for a time that they are ESPN sports junkies reporting in SportCenter wittiness on wins, losses and the performances of the participants. Top plays. Web gems. Hilarious miscues, errors and bloopers.
Alas, whether or not the future of our country and the world depends on intelligent action in Washington, the discussion continues to center around whether each event was a win or a loss for Barrack Obama.
Sure we have an unwieldy federal deficit, millions of uninsured Americans, drug battles with Mexican kingpins, wars in Iraq and Afghanistan, an impending energy crisis, and the possibility of Global Warming creating tremendous human chaos, not to mention the economy and unemployment, but clearly the critical point is how each politician rates in terms of wins and losses.
And, of course, wins are not measured by whether we solve any of these problems. No, they are measured by rhetoric in the House, battles over details in the Senate, local elections, speeches, interviews, and whatever the pundits decide merit placement on the scorecard. And somehow, pushing these important policy issues forward seldom seems to make it on the list.
I wonder who really is causing the gridlock in Washington. I blame it all on ESPN.
Wednesday, June 17, 2009
The American Tribe – Unite
I wrote yesterday about tribes and how I believe President Obama is getting us back to respect and need of the whole tribe. I got to thinking about the American Tribe, which I tend to do. What makes the American Tribe unique is that we are a tribe composed of people who were kicked out of, or in rare circumstances voluntarily left, virtually every other tribe on earth. The American Tribe represents the rejects of the world, AND, those willing to escape rather than stay and be persecuted.
22,000 years ago Native Americans left there comfortable worlds, trudged north into the frozen Ice Age lands of what is now Siberia across the Bering Straits, then iced over, into what is now Alaska and eventually into both Americas. Later Pacific Islanders braved the vast oceans to land in South America and migrate north mixing with those who came before. Do we believe they made these treacherous journeys with women, children and their elderly because their tribes in Asia, where the temperatures were moderate, wanted them to stay? Of course not. They were kicked out of their tribes. Their tribes thought they would die. They did not. They became Americans.
The Pilgrims were forced out of England. Georgia was populated by criminals from English jails. German Catholics came here in droves in the 1800s to escape Lutheran persecution. Sicilians and Irish left their homelands for a “better” life, which means their old tribe was not working out for them. Chinese and Japanese fled their countries for our West Coasts. Africans were kicked out of their countries like the rest of us, sold as slaves. We are all refugees from other tribes who could no longer stand to have us around. Everyone sent us off across oceans and thought, or hoped, we would die. We did not. Against all odds, we became Americans.
We, the American Tribe, are the rejects of the rest of the world. We welcome all who are kicked out of their tribes. So says our greatest monument – The Statue of Liberty. What made us a problem to the staid traditions of our former tribes made us stronger as a people. It made us Americans.
Over time we have assimilated everyone. The English first disliked the Dutch (Dutch rub, Dutch treat, which is no treat at all, etc.), but got used to them. The Irish, Scotts, Italians, Germans, Greeks, Jews, Catholics and many others came, were subject of discrimination and ultimately assimilated into the culture. While it took longer, Africans, Asians, Native Americans and Hispanics have all been embraced by the American Tribe and have served the US proudly in leadership, diplomatic, civil servant and military positions.
The Baby-Boomer and especially the post-Boom generations are unifying and erasing all past distinctions. We are increasingly a land of mutts. Mixed breeds with uncommon heritage with descendants from many different tribes around the world. Our President is not black. He is an American, all mixed up like the rest of us.
We are all one-eighth this and one-sixteenth that. A pinch of Irish, a pinch of Cherokee, a bit of German, some Korean in there somewhere, and a little something else. Whites are of course not white. Blacks are of course not black. We are all shades and tints of brown. We are all the same basic color.
The term “Diversity” has come to focus us on our irrelevant differences, though it should not. It was a concept important to get where we are today. It, however, is a term of division. A term of the past.
We are now the American Tribe. A tribe of outcasts. A tribe of mutts with varied heritage. A tribe descended from those brave enough to challenge the old tribe and be kicked out for it. A tribe of people our old tribes hoped would die at sea, but we did not.
Instead, against all odds and over many years and through trials and tribulations of great magnitude, we, the misfits of the world, have finally become united as one, the American Tribe.
Unlike most other places on earth, we are a tribe of people with eyes, skin and hair of many colors none of which impact who we are as people. Individually we practice many religions or none at all, speak and write as we see fit, work hard or not, love man or woman or both, and live as we deem appropriate, for that is what the American Tribe is all about. We are unique and powerful individuals within the great American Tribe.
It is time we stop celebrating our differences and begin to celebrate our similarities. Mr. President, make this year’s Independence Day be a celebration of our independence from past discrimination based on our diverse and irrelevant characteristics.
Make it a celebration of the unified American Tribe.
22,000 years ago Native Americans left there comfortable worlds, trudged north into the frozen Ice Age lands of what is now Siberia across the Bering Straits, then iced over, into what is now Alaska and eventually into both Americas. Later Pacific Islanders braved the vast oceans to land in South America and migrate north mixing with those who came before. Do we believe they made these treacherous journeys with women, children and their elderly because their tribes in Asia, where the temperatures were moderate, wanted them to stay? Of course not. They were kicked out of their tribes. Their tribes thought they would die. They did not. They became Americans.
The Pilgrims were forced out of England. Georgia was populated by criminals from English jails. German Catholics came here in droves in the 1800s to escape Lutheran persecution. Sicilians and Irish left their homelands for a “better” life, which means their old tribe was not working out for them. Chinese and Japanese fled their countries for our West Coasts. Africans were kicked out of their countries like the rest of us, sold as slaves. We are all refugees from other tribes who could no longer stand to have us around. Everyone sent us off across oceans and thought, or hoped, we would die. We did not. Against all odds, we became Americans.
We, the American Tribe, are the rejects of the rest of the world. We welcome all who are kicked out of their tribes. So says our greatest monument – The Statue of Liberty. What made us a problem to the staid traditions of our former tribes made us stronger as a people. It made us Americans.
Over time we have assimilated everyone. The English first disliked the Dutch (Dutch rub, Dutch treat, which is no treat at all, etc.), but got used to them. The Irish, Scotts, Italians, Germans, Greeks, Jews, Catholics and many others came, were subject of discrimination and ultimately assimilated into the culture. While it took longer, Africans, Asians, Native Americans and Hispanics have all been embraced by the American Tribe and have served the US proudly in leadership, diplomatic, civil servant and military positions.
The Baby-Boomer and especially the post-Boom generations are unifying and erasing all past distinctions. We are increasingly a land of mutts. Mixed breeds with uncommon heritage with descendants from many different tribes around the world. Our President is not black. He is an American, all mixed up like the rest of us.
We are all one-eighth this and one-sixteenth that. A pinch of Irish, a pinch of Cherokee, a bit of German, some Korean in there somewhere, and a little something else. Whites are of course not white. Blacks are of course not black. We are all shades and tints of brown. We are all the same basic color.
The term “Diversity” has come to focus us on our irrelevant differences, though it should not. It was a concept important to get where we are today. It, however, is a term of division. A term of the past.
We are now the American Tribe. A tribe of outcasts. A tribe of mutts with varied heritage. A tribe descended from those brave enough to challenge the old tribe and be kicked out for it. A tribe of people our old tribes hoped would die at sea, but we did not.
Instead, against all odds and over many years and through trials and tribulations of great magnitude, we, the misfits of the world, have finally become united as one, the American Tribe.
Unlike most other places on earth, we are a tribe of people with eyes, skin and hair of many colors none of which impact who we are as people. Individually we practice many religions or none at all, speak and write as we see fit, work hard or not, love man or woman or both, and live as we deem appropriate, for that is what the American Tribe is all about. We are unique and powerful individuals within the great American Tribe.
It is time we stop celebrating our differences and begin to celebrate our similarities. Mr. President, make this year’s Independence Day be a celebration of our independence from past discrimination based on our diverse and irrelevant characteristics.
Make it a celebration of the unified American Tribe.
Tuesday, June 16, 2009
The American Tribe – Reborn
Everyone knows that humans cannot survive in the wild as individuals. Throughout time humans have survived by banding together in tribes for the common good. Successful leaders ruled for the benefit of all and his tribe expanded often without the need of warfare. Great leaders know that their position and power depend on those within the tribe. Even he cannot survive in the wild alone for long. They also knew that the more inclusive ones policy the greater the tribe became.
Tribes were, and are, required to protect the young who will be the tribe’s strength in the future, the elderly who hold the wisdom and traditions of the tribe, the weak and sick who will recover to be contributors to the tribe, and historically the women who nurture and care for all members of the tribe and make the tribe strong and powerful. When protection of the tribe was about size and might, it was the job of the men to lead and protect. It has long been known, however, that behind every great man was a great woman, and of course women have also and will ably lead many a tribe. The leader is NEVER alone.
Leaders who rule by force or exclusion often rise for a period of time, only to be trampled and destroyed often by their own people. Force may be necessary to grow an empire, but holding it together requires the subjects to believe that it is in their best interests to remain within the tribe. Kings have been beheaded and great empires reduced to City States because the leaders forgot the tribe.
Until around the end of the 19th century, the beginning of the industrial revolution, the tribe was important and the great leaders recognized this importance. Countries were generally small and even great empires permitted tribes, whether local historic groups or represented by nobility and their lands, to govern themselves so long as they paid appropriate tribute.
Companies were small. The leader knew each employee personally and recognized that his position was dependant on the success of the members of his small tribe of workers. They were part of the community. They realized the tribe reached beyond the borders of the company’s property. The leader of the tribe not only knew his workers personally, but he knew his suppliers and customers personally. They too were part of his tribe and he relied upon them and they upon him. And so humans became the most dominant species on earth.
In the last 120 years or so the reliance on the tribe has changed. Somewhere along the line the idea of the tribe has fallen away in favor of individuality. These concepts are referred to in the positive as “entrepreneurialism” and in the more negative as the “Captains of Industry” or “capitalists.”
Companies grew to the point where the members of the tribe became mere numbers on a ledger to the CEO at the top. The tribal leader began to believe, and perhaps has been encouraged to believe, that he no longer needed the tribe to survive. While this has been disproven over and over again throughout history, we somehow feel that America became great because of individual effort of a few great individuals.
Nothing could be further from the truth. Our tribe fought back the British tribe for independence. A whole host of men signed the Declaration of Independence in 1776. It took 11 years, until 1787, for many bright men to craft the US Constitution. We moved West gradually as a tribe, supporting one another all along the way. Individuals did not create or settle this great country. WE, the tribe of Americans, did that.
It took many years and many people to bring non-landowners, workers, women, Jews, those of other faiths, blacks, and our many immigrants into the tribe of Americans. We stand now as one of the most inclusive tribes in the history of our planet. We should be proud of that.
Barrack Obama is restoring the American Tribe. We are all dependant on one another. We are responsible to care for the young, the sick and the elderly. Corporations must recognize that failure is largely due to misunderstanding the strength of the tribe. Great leaders, Level 5 leaders as described in the wonderful book, Good to Great, understand the importance of the tribe and they are the ones who are thriving in today’s economy.
I hope that the President is able to continue to build upon what he has done to date. We must decide we are part of the American Tribe. CEOs must understand the importance of the tribe. Humans survive because they are part of a strong tribe. We cannot stand alone and succeed. Not for long. No one ever has.
Tribes were, and are, required to protect the young who will be the tribe’s strength in the future, the elderly who hold the wisdom and traditions of the tribe, the weak and sick who will recover to be contributors to the tribe, and historically the women who nurture and care for all members of the tribe and make the tribe strong and powerful. When protection of the tribe was about size and might, it was the job of the men to lead and protect. It has long been known, however, that behind every great man was a great woman, and of course women have also and will ably lead many a tribe. The leader is NEVER alone.
Leaders who rule by force or exclusion often rise for a period of time, only to be trampled and destroyed often by their own people. Force may be necessary to grow an empire, but holding it together requires the subjects to believe that it is in their best interests to remain within the tribe. Kings have been beheaded and great empires reduced to City States because the leaders forgot the tribe.
Until around the end of the 19th century, the beginning of the industrial revolution, the tribe was important and the great leaders recognized this importance. Countries were generally small and even great empires permitted tribes, whether local historic groups or represented by nobility and their lands, to govern themselves so long as they paid appropriate tribute.
Companies were small. The leader knew each employee personally and recognized that his position was dependant on the success of the members of his small tribe of workers. They were part of the community. They realized the tribe reached beyond the borders of the company’s property. The leader of the tribe not only knew his workers personally, but he knew his suppliers and customers personally. They too were part of his tribe and he relied upon them and they upon him. And so humans became the most dominant species on earth.
In the last 120 years or so the reliance on the tribe has changed. Somewhere along the line the idea of the tribe has fallen away in favor of individuality. These concepts are referred to in the positive as “entrepreneurialism” and in the more negative as the “Captains of Industry” or “capitalists.”
Companies grew to the point where the members of the tribe became mere numbers on a ledger to the CEO at the top. The tribal leader began to believe, and perhaps has been encouraged to believe, that he no longer needed the tribe to survive. While this has been disproven over and over again throughout history, we somehow feel that America became great because of individual effort of a few great individuals.
Nothing could be further from the truth. Our tribe fought back the British tribe for independence. A whole host of men signed the Declaration of Independence in 1776. It took 11 years, until 1787, for many bright men to craft the US Constitution. We moved West gradually as a tribe, supporting one another all along the way. Individuals did not create or settle this great country. WE, the tribe of Americans, did that.
It took many years and many people to bring non-landowners, workers, women, Jews, those of other faiths, blacks, and our many immigrants into the tribe of Americans. We stand now as one of the most inclusive tribes in the history of our planet. We should be proud of that.
Barrack Obama is restoring the American Tribe. We are all dependant on one another. We are responsible to care for the young, the sick and the elderly. Corporations must recognize that failure is largely due to misunderstanding the strength of the tribe. Great leaders, Level 5 leaders as described in the wonderful book, Good to Great, understand the importance of the tribe and they are the ones who are thriving in today’s economy.
I hope that the President is able to continue to build upon what he has done to date. We must decide we are part of the American Tribe. CEOs must understand the importance of the tribe. Humans survive because they are part of a strong tribe. We cannot stand alone and succeed. Not for long. No one ever has.
Thursday, June 11, 2009
Immigration and Health Care
One (and only one) of the most significant knocks against “illegal” immigration is its impact on our healthcare system. They are such a burden, but does this assertion really hold water?
Illegal Immigrants: Some percentage, probably fairly small, of the estimated eight to ten million illegal aliens in the US use our hospital emergency rooms because they have no health insurance. Illegal immigrants are predominantly hard working males in excellent physical shape doing hourly physical labor, like landscaping, housekeeping and meat packing. They are not brought in for sedentary clerical positions. They make no money if they are ill and unable to work.
They were brave enough to leave their homelands in search of a better life. Most have obligations to feed families back in Mexico. While certainly some families have immigrated as well, the children, wives and parents of most illegal immigrants are not in the US. Being ill is not an option.
So of those in the US, how many really abuse the healthcare system? It simply cannot be a very high percentage of those here.
Uninsured Americans: On the other hand, we know that there are approximately 50 million Americans who have no health insurance. These individuals tend to be lower income citizens. Many have sedentary jobs while others are often out of work. All of their families are in the US, including all of their children and grandparents. Being ill or injured entitles them to paid days off, worker’s compensation, and disability. Like most Americans, they are fat, eat fast food, do not exercise and have resulting health complications. As unemployment rises, the number of American citizens without health insurance rises. There are absolutely exceptions to these generalizations, but ask social workers and they will provide you with this profile.
Are Illegal Immigrants Really the Burden? Which of these groups causes the greatest real burden to our health insurance system?
The impact of a few million illegal immigrants; or
The impact of fifty plus million uninsured Americans?
The problem is not immigrants. The problem is uninsured Americans.
A Solution: Certainly this situation begs for a solution. There are many ideas on how we can solve the “healthcare crisis.” Over the last few weeks I have laid out a gradual plan for healthcare reform. The stages are laid out in prior posts below.
Nationalize health insurance regulations and remove the burdens and restrictions of 50 different State level regulatory systems.
Allow ANY group of people to band together in groups to collectively purchase health insurance, or to create a self-insured plan. Illegals could join any or particular groups.
Create a national catastrophic coverage plan
The issue with illegal immigrants and uninsured Americans is basic care provided at emergency rooms rather than at less expensive clinics or doctor’s offices. Under this scenario, anyone, other than those who qualify for Medicaid currently, should be able to afford basic care, including illegal immigrants, at a physician’s office or clinic, thus eliminating the core problem. Under this scenario, anyone without coverage could be legally turned away without repercussions.
Illegal Immigrants: Some percentage, probably fairly small, of the estimated eight to ten million illegal aliens in the US use our hospital emergency rooms because they have no health insurance. Illegal immigrants are predominantly hard working males in excellent physical shape doing hourly physical labor, like landscaping, housekeeping and meat packing. They are not brought in for sedentary clerical positions. They make no money if they are ill and unable to work.
They were brave enough to leave their homelands in search of a better life. Most have obligations to feed families back in Mexico. While certainly some families have immigrated as well, the children, wives and parents of most illegal immigrants are not in the US. Being ill is not an option.
So of those in the US, how many really abuse the healthcare system? It simply cannot be a very high percentage of those here.
Uninsured Americans: On the other hand, we know that there are approximately 50 million Americans who have no health insurance. These individuals tend to be lower income citizens. Many have sedentary jobs while others are often out of work. All of their families are in the US, including all of their children and grandparents. Being ill or injured entitles them to paid days off, worker’s compensation, and disability. Like most Americans, they are fat, eat fast food, do not exercise and have resulting health complications. As unemployment rises, the number of American citizens without health insurance rises. There are absolutely exceptions to these generalizations, but ask social workers and they will provide you with this profile.
Are Illegal Immigrants Really the Burden? Which of these groups causes the greatest real burden to our health insurance system?
The impact of a few million illegal immigrants; or
The impact of fifty plus million uninsured Americans?
The problem is not immigrants. The problem is uninsured Americans.
A Solution: Certainly this situation begs for a solution. There are many ideas on how we can solve the “healthcare crisis.” Over the last few weeks I have laid out a gradual plan for healthcare reform. The stages are laid out in prior posts below.
Nationalize health insurance regulations and remove the burdens and restrictions of 50 different State level regulatory systems.
Allow ANY group of people to band together in groups to collectively purchase health insurance, or to create a self-insured plan. Illegals could join any or particular groups.
Create a national catastrophic coverage plan
The issue with illegal immigrants and uninsured Americans is basic care provided at emergency rooms rather than at less expensive clinics or doctor’s offices. Under this scenario, anyone, other than those who qualify for Medicaid currently, should be able to afford basic care, including illegal immigrants, at a physician’s office or clinic, thus eliminating the core problem. Under this scenario, anyone without coverage could be legally turned away without repercussions.
Tuesday, June 2, 2009
Making Cars – A New Lease on Life
Well the US is officially an automaker. What I hope is that GM is able to convert from a stodgy old “this is the way we have always done it” company to an innovative leader in cutting edge technology. When one receives a new lease on life, one usually makes the rather easy decision to live it to its fullest. The realization that death is always mere moments away has the effect of freeing us from the burdens associated with the daily drudgery of ordinary life.
Were I the GM leadership I would announce that every car produced in 2011 will be an electric hybrid flexible fuel vehicle with an enzymatic fuel cell. Maybe 2012. Maybe some other innovative standard. Make is audacious – a Big Hairy Audacious Goal (BHAG). Like going to the moon in the 1960s. Drive a stake in the ground and focus the entire company on reaching that goal and do whatever it takes to get there. Set it so that when GM gets there, they have passed everyone else in the race.
The GM leadership (and by that I suppose I mean President Obama at least in part) should buy or license innovative technologies that will make GM world renowned as THE leader in green vehicles. Unleash the creative juices of the engineers, the workforce, the M&A guys, the managers and even the public relations department toward one illustrious goal.
People love to be part of the team who desires with all their heart and throughout the organization to win the World Series and then makes every effort to do what it takes to get there. Only one team will be baseball’s champion, but only those teams who legitimately set that as their goal will have a chance.
Electric cars have much higher horse power than piston engine cars. They are ideal for high performance cars like the Corvette. Sure they have a relatively short range, 40 – 60 miles on a charge, but who drives their Corvette more than that? Power. Speed. Wind in the hair. Hums like a kitten.
While ethanol is somewhat less efficient per gallon, it is much higher in octane than gasoline. This gives it greater power and makes it ideal for trucks and machinery. A flexible fuel vehicle allows the use of any mixture, including nearly 100% ethanol. It can also use regular old gasoline.
Develop cars whose engines prefer to use ethanol and can use gasoline, rather than the other way around. Create complimentary electric hybrid engines that prefer ethanol. Hybrid technology simply allows the use of electricity or a liquid fuel as circumstances dictate. Improve this computer technology. Expand the demand, and let the scientists and energy entrepreneurs create the supply.
Enzymatic fuel cells are one of the most environmentally beneficial waves of the battery future. Mining, handling and manufacturing Lithium, Nickel and other battery metals is nasty stuff. Enzymatic fuel cells are essentially batteries that use encapsulated enzymes rather than metals to remove the energy from a fuel. They are exponentially more efficient than any existing battery.
Akermin, Inc. in St. Louis is just one company that has developed such a fuel cell. While Akermin is focused on developing these batteries for electronics, their technology could be adapted for vehicles. GM could accelerate the commercialization of this technology and leap ahead of everyone else.
There are many technologies out there. Set a deadline; the 2011 line of vehicles. Focus the company top to bottom. Invent the car. Convert the plants. Be aggressive and set the new path to the future. Use the Stimulus funds to help make it happen (the President might have some clout in that area).
As GM exits the construction zone, I hope they step hard on the accelerator. I want my investment to pay off some day. Just for perspective, $30,000,000,000 is an investment of $100 for every single human being living in the United States.
Were I the GM leadership I would announce that every car produced in 2011 will be an electric hybrid flexible fuel vehicle with an enzymatic fuel cell. Maybe 2012. Maybe some other innovative standard. Make is audacious – a Big Hairy Audacious Goal (BHAG). Like going to the moon in the 1960s. Drive a stake in the ground and focus the entire company on reaching that goal and do whatever it takes to get there. Set it so that when GM gets there, they have passed everyone else in the race.
The GM leadership (and by that I suppose I mean President Obama at least in part) should buy or license innovative technologies that will make GM world renowned as THE leader in green vehicles. Unleash the creative juices of the engineers, the workforce, the M&A guys, the managers and even the public relations department toward one illustrious goal.
People love to be part of the team who desires with all their heart and throughout the organization to win the World Series and then makes every effort to do what it takes to get there. Only one team will be baseball’s champion, but only those teams who legitimately set that as their goal will have a chance.
Electric cars have much higher horse power than piston engine cars. They are ideal for high performance cars like the Corvette. Sure they have a relatively short range, 40 – 60 miles on a charge, but who drives their Corvette more than that? Power. Speed. Wind in the hair. Hums like a kitten.
While ethanol is somewhat less efficient per gallon, it is much higher in octane than gasoline. This gives it greater power and makes it ideal for trucks and machinery. A flexible fuel vehicle allows the use of any mixture, including nearly 100% ethanol. It can also use regular old gasoline.
Develop cars whose engines prefer to use ethanol and can use gasoline, rather than the other way around. Create complimentary electric hybrid engines that prefer ethanol. Hybrid technology simply allows the use of electricity or a liquid fuel as circumstances dictate. Improve this computer technology. Expand the demand, and let the scientists and energy entrepreneurs create the supply.
Enzymatic fuel cells are one of the most environmentally beneficial waves of the battery future. Mining, handling and manufacturing Lithium, Nickel and other battery metals is nasty stuff. Enzymatic fuel cells are essentially batteries that use encapsulated enzymes rather than metals to remove the energy from a fuel. They are exponentially more efficient than any existing battery.
Akermin, Inc. in St. Louis is just one company that has developed such a fuel cell. While Akermin is focused on developing these batteries for electronics, their technology could be adapted for vehicles. GM could accelerate the commercialization of this technology and leap ahead of everyone else.
There are many technologies out there. Set a deadline; the 2011 line of vehicles. Focus the company top to bottom. Invent the car. Convert the plants. Be aggressive and set the new path to the future. Use the Stimulus funds to help make it happen (the President might have some clout in that area).
As GM exits the construction zone, I hope they step hard on the accelerator. I want my investment to pay off some day. Just for perspective, $30,000,000,000 is an investment of $100 for every single human being living in the United States.
Saturday, May 30, 2009
Healthcare: Paying for It
While my brilliant 5-step plan laid out below is certainly the only possible way to go (he said with a wink), there will apparently be some form of significant government sponsored healthcare reform or coverage passed in the relatively near future. No matter what plan is chosen, it will be expensive.
Those who choose an unhealthy lifestyle should pay for this. Rather than taking away choices, we should tax those things that are voluntary and universally recognized as unhealthy for everyone. If my picture does not give it away, I am not a health nut. I am 50 pounds overwieght and adicted to high calorie foods, so I hate this idea. It is nonetheless the right way to go.
The tax should begin relatively small and should be set to automatically rise gradually, but increasingly, over 10 years to a point where the tax causes the bad stuff to be nearly prohibitively expensive. This should be made very clear so that all Americans have 10 years to develop a healthy diet or go broke. By gradually increasing the tax over time people will change their behavior at about the same rate. As a result, the tax should remain about the same as the stubborn pay for their unhealthy lifestyles to the bitter end, and fund the system.
If the government is going to pay for healthcare, then we should do our part. The problem is that we, and by "we" I mean "I," want our double cheeseburgers with Super-sized fries and a chocolate shake. This plan will not eliminate these options. Over ten years it will just make a “Value-Meal” cost $50 instead of $5. McDonald's will adjust.
So what are those things that everyone knows are bad for you?
Tobacco
Calories
That’s it. No one can argue that fewer of these two things will make us healthier and thus reduce health care costs.
Taxing “Calories” allows us to cover all the bad stuff you would otherwise target on its own: Alcohol, sugar, white flour, red meat. Over ten years the producers of these products will develop lower calorie versions that taste great.
- Beer will all be “light” and we will all be used to it.
- Hard liquor will become lower proof (80 to 60 to 40) with better ingredients to retain the taste. Fewer drunks would also reduce healthcare costs.
- Bison will gradually replace some cattle and beef will be leaner.
- We will eat more chicken and fish and maybe Ostrich.
- We already have many versions of substitute 0 calorie sweeteners.
- All soda will become “diet” soda and there will be no such thing as “regular” soda. Zero calorie soda will have no tax.
- Restaurants will serve smaller and healthier portions. Fettuccini Alfredo will either leave menus or be made with lighter milk because the restaurant will be hard pressed to afford the tax on heavy cream.
The key is that it will take ten years. We will adjust gradually. We are innovators. We, the poor, middle class and eventually even the wealthy, will all learn to eat better, providers will sell smaller portions, and food producers will learn to make healthier food. We will adapt and innovate and be able to afford healthcare.
Tobacco: This is easy. Tax it at every stage of production. Seeds to cigarettes. Start with the significant taxes we impose now and gradually raise them over 10 years until a pack of cigarettes is $50 in today’s money. Each year 10% of smokers will quit or not start due to cost alone. In ten years, there will be no remaining tobacco products to purchase. Rehab will be the cheaper alternative.
Calories: This at least seems more difficult, but it really is’nt.
The tax would occur at the point where the US distributor sells to the US retailer, whether the retailer is a restaurant or a grocery store or a farmer’s market. The US distributor may grow the products or purchase the products domestically or overseas. Where they get them is not relevant.
Establishing the tax is also not difficult.
We already rate meat based on how lean it is. The distributor can reduce his tax by trimming it closely. There is probably a simple way to do this that scientists understand.
Produce is pretty easy. Broccoli has a pretty standard number of calories per ounce.
Anything in a box has the calorie count right on the side panel.
Sugary cereals, candy, ice cream, etc will go the Splenda route or become very expensive. Pure perfect ice cream will still exist for really special occasions.
In the beginning the tax will be relatively low. Twice each year it will go up a few percentage points for ten years. It should accelerate as the ten years nears its end. At the end of ten years it will level off at a rate that will seriously dissuade Americans from eating too many calories.
The only exception would be baby food for those under three years old. Babies need calories. Adults do not like baby food, so I doubt this will create a calorie abuse problem.
Combine this with cultural changes we are already working on. Eat less. Exercise. But every medical practitioner will tell you that you lose weight by eating fewer calories, not by exercise alone, though it helps.
Tuesday, May 19, 2009
Healthcare Crisis: Step 5 – If Needed
Years and years of tradition and entrenched industries will bog down sweeping reforms to the healthcare system. In this series I have suggested that a step by step approach would work, perhaps without getting too far past step 2. You can find steps 1 through 4 below.
Step 1: Remove State regulation. Create one level national set of regulations. Everyone but the States will favor this and it will lower costs and increase options.
Step 2: Allow any group to band together to buy health insurance or set up self-insured plans, inside or outside corporations. Every union, charity, trade association and Chamber of Commerce will favor this one.
Steps 1 and 2 increase supply and lower demand, which will lower prices. They will also reduce costs, allowing for profits at lower prices. There is a good chance that just doing this will significantly decreases costs and prices, increase options and insure nearly everyone who wants insurance. Most important, there is no reason these should not be relatively easily passed AT LOW to NO COST to the government.
Steps 3 and 4 might correct themselves if the above are accomplished. These involve eliminating volume bonuses paid to brokers to sell more of one company’s products. Step 4 is a limitation on malpractice if someone dies or becomes disabled because “extra” tests were not run to save everyone on medical costs.
If, and only if, Steps 1 and 2 (perhaps with 3 and 4) do not solve the problem sufficiently, then we should consider the following:
Government Funded Universal Catastrophic Healthcare Coverage
Any expenses over some significant number, like $200,000, in a year or for one illness or injury (cancer, Alzheimer’s for life), would be covered by the government. This will lower the risks to insurers and will thus lower premiums. Self-funded groups always purchase catastrophic coverage. This would eliminate that expense and lower self-funded costs.
To reduce costs, there would be no malpractice claims permissible against doctors performing work for the government.
There may be only specific doctors who are approved to do this work. A doctor could opt-in and take want the government paid or opt-out and look for private pay clients or cease work on cases above normal insurance levels. As with Medicare now, most will opt-in.
Anyone could opt-out if they want to use another doctor, but that would be a privately paid or insured risk.
Healthcare will remain privately provided. Competition, creativity, self-funded health coverage and professional negotiation by experts hired by the groups will drive insurance prices down. Groups with interests in helping certain people currently uninsured (Charities, Unions, Trade Groups, Hispanic Chamber, NAACP, Urban League, Churches, etc), would drive broader coverage. No State regulations, lower risks in groups, wellness programs in self-funded groups, some protection from lawsuits and ultimately a cap on liability will lower costs.
Just some thought from the peanut gallery. Good luck up there on Capitol Hill. You will need it.
Step 1: Remove State regulation. Create one level national set of regulations. Everyone but the States will favor this and it will lower costs and increase options.
Step 2: Allow any group to band together to buy health insurance or set up self-insured plans, inside or outside corporations. Every union, charity, trade association and Chamber of Commerce will favor this one.
Steps 1 and 2 increase supply and lower demand, which will lower prices. They will also reduce costs, allowing for profits at lower prices. There is a good chance that just doing this will significantly decreases costs and prices, increase options and insure nearly everyone who wants insurance. Most important, there is no reason these should not be relatively easily passed AT LOW to NO COST to the government.
Steps 3 and 4 might correct themselves if the above are accomplished. These involve eliminating volume bonuses paid to brokers to sell more of one company’s products. Step 4 is a limitation on malpractice if someone dies or becomes disabled because “extra” tests were not run to save everyone on medical costs.
If, and only if, Steps 1 and 2 (perhaps with 3 and 4) do not solve the problem sufficiently, then we should consider the following:
Government Funded Universal Catastrophic Healthcare Coverage
Any expenses over some significant number, like $200,000, in a year or for one illness or injury (cancer, Alzheimer’s for life), would be covered by the government. This will lower the risks to insurers and will thus lower premiums. Self-funded groups always purchase catastrophic coverage. This would eliminate that expense and lower self-funded costs.
To reduce costs, there would be no malpractice claims permissible against doctors performing work for the government.
There may be only specific doctors who are approved to do this work. A doctor could opt-in and take want the government paid or opt-out and look for private pay clients or cease work on cases above normal insurance levels. As with Medicare now, most will opt-in.
Anyone could opt-out if they want to use another doctor, but that would be a privately paid or insured risk.
Healthcare will remain privately provided. Competition, creativity, self-funded health coverage and professional negotiation by experts hired by the groups will drive insurance prices down. Groups with interests in helping certain people currently uninsured (Charities, Unions, Trade Groups, Hispanic Chamber, NAACP, Urban League, Churches, etc), would drive broader coverage. No State regulations, lower risks in groups, wellness programs in self-funded groups, some protection from lawsuits and ultimately a cap on liability will lower costs.
Just some thought from the peanut gallery. Good luck up there on Capitol Hill. You will need it.
Friday, May 15, 2009
Healthcare Crisis: Step 4 Malpractice
As we consider how to change healthcare, we might want to try to do this slowly. You can find Steps 1 - 3 below in this blog.
Price is a function of supply and demand. This is true of healthcare and health insurance. Every participant, even the government, must make a profit or at least break even for the system to work. That means that as we increase supply and options in health insurance and work to lower demand, or slow its growth through wellness, we must reduce costs so that providers can make a profit charging lower prices.
Step 1: Remove State regulation. Federal preemptive national regulations will level the playing field. Eliminate oligopolies by large insurers who can afford these regulations, allow innovative players into the market, both of which increases supply.
Step 2: If groups of people can band together to purchase insurance or self insure, using professionals to negotiate and set up the plans, insurance and care will become more efficient and wellness will be encouraged, thus lowering demand.
Step 1 and Step 2 increase supply and lower demand, which will lower prices. They will also reduce costs, allowing for profits at lower prices.
Step 3, commissions and volume bonuses paid to brokers may self-correct once Steps 1 and 2 are undertaken. Larger groups will negotiate better rates using professional insurance consultants, making brokers obsolete. In the short term, commissions and especially volume bonuses create conflicts of interest and impact the rising costs of healthcare.
Step 4: President Obama received promises from health care providers that they will reduce the costs of health care by, in part, lowering the number of extra tests and procedures.
This will only happen if there are no negative ramifications for doing so. If tests are reduced and a person dies or becomes permanently disabled, the plaintiff’s attorney will argue that a simple $2000 test covered by insurance would have uncovered the illness and saved the child. When the plaintiff and the weeping mother win that case for millions, doctors and hospitals will be forced to perform that and any other possibly relevant test again. The costs of the test are far outweighed by the potential costs of litigation. The insurance companies will pay for the tests and costs will skyrocket.
I think that trial attorneys provide a valuable check on incompetence and negligence. That being said, there will have to be some very clear guidelines set that establish what tests are warranted in what circumstances. Those laws and regulations MUST protect healthcare providers against liability if they follow those guidelines. These guidelines can be adjusted over time, but not retroactively.
In a cheaper system, people die or become disabled from unusual diseases that present as normal diseases and require special expensive tests to identify. If we are not going to do these tests routinely, providers cannot be punished when that is not enough.
Governments of the people have a hard time sacrificing a few to reduce the costs of the many, even if it is so that the many can receive a basic level of care they cannot get now, without which even more children die or become disabled. This will be a tough, but necessary decision.
Unfortunately, even if passed the law will last until the first parent goes on national television holding their dead or profoundly disabled child who did not receive that $2000 test that could have saved her. The law will be changed. Healthcare providers will be forced to provide all the extra tests again. Costs will rise.
Price is a function of supply and demand. This is true of healthcare and health insurance. Every participant, even the government, must make a profit or at least break even for the system to work. That means that as we increase supply and options in health insurance and work to lower demand, or slow its growth through wellness, we must reduce costs so that providers can make a profit charging lower prices.
Step 1: Remove State regulation. Federal preemptive national regulations will level the playing field. Eliminate oligopolies by large insurers who can afford these regulations, allow innovative players into the market, both of which increases supply.
Step 2: If groups of people can band together to purchase insurance or self insure, using professionals to negotiate and set up the plans, insurance and care will become more efficient and wellness will be encouraged, thus lowering demand.
Step 1 and Step 2 increase supply and lower demand, which will lower prices. They will also reduce costs, allowing for profits at lower prices.
Step 3, commissions and volume bonuses paid to brokers may self-correct once Steps 1 and 2 are undertaken. Larger groups will negotiate better rates using professional insurance consultants, making brokers obsolete. In the short term, commissions and especially volume bonuses create conflicts of interest and impact the rising costs of healthcare.
Step 4: President Obama received promises from health care providers that they will reduce the costs of health care by, in part, lowering the number of extra tests and procedures.
This will only happen if there are no negative ramifications for doing so. If tests are reduced and a person dies or becomes permanently disabled, the plaintiff’s attorney will argue that a simple $2000 test covered by insurance would have uncovered the illness and saved the child. When the plaintiff and the weeping mother win that case for millions, doctors and hospitals will be forced to perform that and any other possibly relevant test again. The costs of the test are far outweighed by the potential costs of litigation. The insurance companies will pay for the tests and costs will skyrocket.
I think that trial attorneys provide a valuable check on incompetence and negligence. That being said, there will have to be some very clear guidelines set that establish what tests are warranted in what circumstances. Those laws and regulations MUST protect healthcare providers against liability if they follow those guidelines. These guidelines can be adjusted over time, but not retroactively.
In a cheaper system, people die or become disabled from unusual diseases that present as normal diseases and require special expensive tests to identify. If we are not going to do these tests routinely, providers cannot be punished when that is not enough.
Governments of the people have a hard time sacrificing a few to reduce the costs of the many, even if it is so that the many can receive a basic level of care they cannot get now, without which even more children die or become disabled. This will be a tough, but necessary decision.
Unfortunately, even if passed the law will last until the first parent goes on national television holding their dead or profoundly disabled child who did not receive that $2000 test that could have saved her. The law will be changed. Healthcare providers will be forced to provide all the extra tests again. Costs will rise.
Thursday, May 14, 2009
Healthcare Crisis: Step 3 Insurance Brokers
This week the country is beginning to create a new health care policy. A broad sweeping change is something that may be desired, but is nearly impossible to either accomplish or do well. I am proposing a multi-baby-step process to resolve the healthcare crisis. You can find steps 1 and 2 below.
The over-arching goal of these thoughts is to create a national, highly competitive market for health insurance where there are many sellers with many options creating growing supply and sophisticated buyers making wise healthcare and insurance decisions, all of which will drive health care costs down more than any government plan.
Step 1 (Tuesday): Remove State regulation. Eliminate oligopolies by the large insurers who can afford these regulations. Allow innovative players in. Create more options and lower costs. There should be one, unified federal set of regulations that applies to all insurers and plans. One layer. One level playing field.
Step 2 (Wednesday): Allow groups of people to band together, local or national, employees, companies, unions, associations, charities, or new groups set up precisely to negotiate, purchase or develop health insurance plans, including self-funded plans which are optimal.
Step 1 and Step 2 alone will dramatically reduce healthcare costs within the federal government’s universal regulatory regime.
Step 3 has to do with how insurance brokers are compensated. Currently the insurance companies pay brokers a commission to sell their policies. This encourages brokers to encourage the highest cost option. The broker has a clear conflict of interest.
Far more troubling is the bonus practice. At the end of each year, insurance companies pay substantial bonuses to insurance brokerage firms for selling large volumes in their products. This encourages brokers to guide customers toward the firm that will pay the largest bonus, rather than to the one that may be best for the buyer.
I personally witnessed a proposal by a prominent brokerage firm presenting four options. United Healthcare was the preferred provider of this firm. If they focused on driving their clients in that direction they make the largest possible bonus at year’s end. Of course United Healthcare’s quote for the coverage was lowest.
We independently ascertained the real quotes from the other three providers. One was higher than United, but both of the others were actually lower for the same coverage. The broker intentionally marked up the quotes to make sure United Healthcare was the lowest option.
Theoretically the market should correct for this. The victims in this case were relatively small firms with limited resources trying to do the right thing by providing coverage for their employees. The broker was a friend of the head of HR who secured the quotes. These bonuses, at a minimum, should be outlawed.
These issues may correct themselves once Steps 1 and 2 are undertaken. Larger groups will negotiate better rates using professional insurance consultants and making brokers obsolete. Nonetheless, the bonuses are a factor in the rising costs of healthcare.
The over-arching goal of these thoughts is to create a national, highly competitive market for health insurance where there are many sellers with many options creating growing supply and sophisticated buyers making wise healthcare and insurance decisions, all of which will drive health care costs down more than any government plan.
Step 1 (Tuesday): Remove State regulation. Eliminate oligopolies by the large insurers who can afford these regulations. Allow innovative players in. Create more options and lower costs. There should be one, unified federal set of regulations that applies to all insurers and plans. One layer. One level playing field.
Step 2 (Wednesday): Allow groups of people to band together, local or national, employees, companies, unions, associations, charities, or new groups set up precisely to negotiate, purchase or develop health insurance plans, including self-funded plans which are optimal.
Step 1 and Step 2 alone will dramatically reduce healthcare costs within the federal government’s universal regulatory regime.
Step 3 has to do with how insurance brokers are compensated. Currently the insurance companies pay brokers a commission to sell their policies. This encourages brokers to encourage the highest cost option. The broker has a clear conflict of interest.
Far more troubling is the bonus practice. At the end of each year, insurance companies pay substantial bonuses to insurance brokerage firms for selling large volumes in their products. This encourages brokers to guide customers toward the firm that will pay the largest bonus, rather than to the one that may be best for the buyer.
I personally witnessed a proposal by a prominent brokerage firm presenting four options. United Healthcare was the preferred provider of this firm. If they focused on driving their clients in that direction they make the largest possible bonus at year’s end. Of course United Healthcare’s quote for the coverage was lowest.
We independently ascertained the real quotes from the other three providers. One was higher than United, but both of the others were actually lower for the same coverage. The broker intentionally marked up the quotes to make sure United Healthcare was the lowest option.
Theoretically the market should correct for this. The victims in this case were relatively small firms with limited resources trying to do the right thing by providing coverage for their employees. The broker was a friend of the head of HR who secured the quotes. These bonuses, at a minimum, should be outlawed.
These issues may correct themselves once Steps 1 and 2 are undertaken. Larger groups will negotiate better rates using professional insurance consultants and making brokers obsolete. Nonetheless, the bonuses are a factor in the rising costs of healthcare.
Wednesday, May 13, 2009
Healthcare Crisis: Step 2 Let People Unite
Yesterday I proposed a multi-baby-step process to resolve the healthcare crisis.
Step 1, in yesterday’s post, is to get the State governments out of the mix thus reducing layers of regulation, oligopolies by the large insurers who can afford these regulations and thus allowing smaller innovative players to get into the mix and create both options and lower costs.
Step 2 would be to allow any group of people to band together as an insured group. Let the people work this out. Any groups would be allowed and encouraged, whether employees in a corporation or several corporations, members of a union or association of any kind (e.g., AARP), those helped by a charity, trade associations, industry groups, etc. The group could be set up precisely to purchase health insurance.
Groups could be local or national. Since Step 1 is completed, this is not an overly burdensome proposition.
The groups would be able to hire a professional health insurance negotiator. This person would help the organization decide how to create the best possible insurance solution given the nature of the group. Perhaps self-insurance with a Third party Administrator and catastrophic coverage above a significant cap. Self-insurance drives wellness because the group saves money if claims are lower than anticipated. Self-insurance allows for greater consumer-driven healthcare because again, lower healthcare costs benefits the group.
In other scenarios the group might be better off buying insurance from an existing provider, or perhaps a combination of providers. The group will decide what is provided and at what deductibles and co-payments. Chiropractic care? Psychiatric or psychological treatment?
Almost everyone will have a choice. There will be an affordable option for everyone. People will get creative. People will find their best personal solution. Groups will grow and change as demand changes. If there are holes in the system at this point, the government can look at next steps.
Most important, increased competition will drive costs down. Increased professionalism in developing and negotiating healthcare coverage will drive costs down and options up.
Step 1 and Step 2 alone will dramatically reduce healthcare costs within the federal government’s universal regulatory regime.
Step 1, in yesterday’s post, is to get the State governments out of the mix thus reducing layers of regulation, oligopolies by the large insurers who can afford these regulations and thus allowing smaller innovative players to get into the mix and create both options and lower costs.
Step 2 would be to allow any group of people to band together as an insured group. Let the people work this out. Any groups would be allowed and encouraged, whether employees in a corporation or several corporations, members of a union or association of any kind (e.g., AARP), those helped by a charity, trade associations, industry groups, etc. The group could be set up precisely to purchase health insurance.
Groups could be local or national. Since Step 1 is completed, this is not an overly burdensome proposition.
The groups would be able to hire a professional health insurance negotiator. This person would help the organization decide how to create the best possible insurance solution given the nature of the group. Perhaps self-insurance with a Third party Administrator and catastrophic coverage above a significant cap. Self-insurance drives wellness because the group saves money if claims are lower than anticipated. Self-insurance allows for greater consumer-driven healthcare because again, lower healthcare costs benefits the group.
In other scenarios the group might be better off buying insurance from an existing provider, or perhaps a combination of providers. The group will decide what is provided and at what deductibles and co-payments. Chiropractic care? Psychiatric or psychological treatment?
Almost everyone will have a choice. There will be an affordable option for everyone. People will get creative. People will find their best personal solution. Groups will grow and change as demand changes. If there are holes in the system at this point, the government can look at next steps.
Most important, increased competition will drive costs down. Increased professionalism in developing and negotiating healthcare coverage will drive costs down and options up.
Step 1 and Step 2 alone will dramatically reduce healthcare costs within the federal government’s universal regulatory regime.
Tuesday, May 12, 2009
Healthcare Crisis: Step 1 Get the States Out
The government is beginning again on its long and to date ill-fated trek into the world of healthcare. We have all heard the cries about rising costs, the aging population and millions of uninsured. The task is daunting and I like the consensus building that President Obama is beginning prior to crafting an ultimate strategy.
Competition has a bad name these days, but it is what drives efficiencies and costs reductions more aggressively than any other factor. Right now, State by State regulation of health insurers prevents open competition in many parts of our country.
These regulations require separate corporate entities in each state, differing reuired coverages, and layers of fees, costs, rules and regulations. Each State adds layers of costs to every insurer. Most important, however, State regulations help prevent smaller players with innovative ideas from getting started. The State-by-State regulatory gauntlet is too great a barrier to entry into the markets.
Unlike the past, nearly all companies are multi-state. Most, even the smallest producers and service providers, are national or international in scope. State control is no longer relevant.
If we want to really make headway in crafting a strategy, we should take baby steps.
Step One should be to nationalize regulation of the health insurance industry, pre-empting the separate regulations of the States. This would open competition, reduce costs and expand options for everyone.
Competition has a bad name these days, but it is what drives efficiencies and costs reductions more aggressively than any other factor. Right now, State by State regulation of health insurers prevents open competition in many parts of our country.
These regulations require separate corporate entities in each state, differing reuired coverages, and layers of fees, costs, rules and regulations. Each State adds layers of costs to every insurer. Most important, however, State regulations help prevent smaller players with innovative ideas from getting started. The State-by-State regulatory gauntlet is too great a barrier to entry into the markets.
Unlike the past, nearly all companies are multi-state. Most, even the smallest producers and service providers, are national or international in scope. State control is no longer relevant.
If we want to really make headway in crafting a strategy, we should take baby steps.
Step One should be to nationalize regulation of the health insurance industry, pre-empting the separate regulations of the States. This would open competition, reduce costs and expand options for everyone.
Monday, March 2, 2009
Obama: Making Things Hard on Moderate Bloggers
There are some who believe that the very concept of “moderate blogger” is some sort of oxymoron, or that anyone who would categorize themselves in that manner must just be morons. Bloggers are supposed to be hard core ideologues. How can a fence walking moderate blog? What do we stand for? Well we find the correct answers amidst the rhetoric and we take a “good for the country” stand.
For the hard right wing conservative bloggers, Obama is gold. Lots of spending and tax increases, or at least the ability to make those claims.
For the left wing liberal socialist bloggers, Obama is tricky, but there are plenty of compromises being made to the hard left agenda for these folks to write for hours. Tax cuts, delays in raising taxes on the wealthy, taking longer to get out of Iraq, adding troops to Afghanistan, etc.
Bloggers do not make any money doing this, no matter how wonderful we may be. So to sit down and write, we have to find a passionate reaction to the message or actions of those claiming power.
As I look at Obama from the view of a moderate, I see a leader of the people who understands the importance of US business. He is being hard core and making both change their ways. From the standpoint of a historically Republican leaning moderate, he seems pretty balanced. I find it makes sense to wait and see how this all works itself out.
Sure the Stimulus Package was huge and only three Republicans voted for it. Here is what I think happened. The House passed a plan. The Senate argued and postured and then passed a plan. All the while Obama and Emanuel were crafting the final plan with Democrat and Republican leaders and moderates. Notice that the two plans were sent to committee and the settlement plan came out in about five minutes and did not look anything like either plan. Rahm Emanuel brought the real plan to the committee and said, “This is the settlement plan. The Republicans have agreed to give us the three votes we need if we send this plan out there.” Pelosi balked and Rahm stared her down. The Republicans nodded knowing they were not the three chosen to vote yes. The bill, a truly bi-partisan heavily negotiated bill passed. Obama got his bill and Republican leadership and Rush Limbaugh got their deniability. Everyone wins. How can we argue with that?
It is clear to me that he is going to do anything possible not to give away the rest of the TARP or auto-bailout money. Reduce executives’ pay, pass the stress test, show me more lending, develop a detailed business plan, build more green cars, jump through this hoop and that one and only then will we consider giving you more cash. If you make it, it is a good investment and perhaps private capital will become available. If not, oh well we tried. As a moderate, how can we argue with that?
Internationally, he has set the tone on the wars. We will get out of combat in Iraq, but we will not abandon them as prior US presidents have done to countries around the world, including Afghanistan. We will, however, get out of their politics and let them run their own country.
We are going to establish a clear mission in Afghanistan. As that is being determined by military, diplomatic and economic geniuses, he is stabilizing and supporting our current troops with new ones so that they are safer in a dangerous place. What President Obama is doing sure makes a lot of sense.
I support his overtures to begin diplomatic talks with all nations, including Iran, Syria and even Cuba. Nothing cures hostilities like mutual commercial reliance, a capitalist Republican philosophy. That said, he has been strong in the face of missile testing by the North Koreans. The “Axis of Evil” was flatly stupid and while it rallied a certain base for a struggling President Bush, it was not good global politics. The world already seems to like us more. That cannot be all bad.
There are many issues, but what I see is a true leader who articulates clearly and concisely in ways we can all understand and who is not afraid to stand up tall and talk to anyone about any plan. He has gathered great minds around him. He does not ask them to dream something up. He listens carefully to all sides, then, as a leader should, he makes an executive decision and tells the experts to figure out how to accomplish a result by a deadline in a bi-partisan manner. He does not act rashly without all the facts. His decisions are based on logical reasoning. But he is not lost in the facts. He steps up to the plate and makes the hard decisions that leaders must.
It is not really fair to the moderate blogger or the comedians for that matter. We are all struggling out here trying to find an edge. I am proud of our President and unlike some pundits want him to succeed, but he sure is not making my avocation very easy.
For the hard right wing conservative bloggers, Obama is gold. Lots of spending and tax increases, or at least the ability to make those claims.
For the left wing liberal socialist bloggers, Obama is tricky, but there are plenty of compromises being made to the hard left agenda for these folks to write for hours. Tax cuts, delays in raising taxes on the wealthy, taking longer to get out of Iraq, adding troops to Afghanistan, etc.
Bloggers do not make any money doing this, no matter how wonderful we may be. So to sit down and write, we have to find a passionate reaction to the message or actions of those claiming power.
As I look at Obama from the view of a moderate, I see a leader of the people who understands the importance of US business. He is being hard core and making both change their ways. From the standpoint of a historically Republican leaning moderate, he seems pretty balanced. I find it makes sense to wait and see how this all works itself out.
Sure the Stimulus Package was huge and only three Republicans voted for it. Here is what I think happened. The House passed a plan. The Senate argued and postured and then passed a plan. All the while Obama and Emanuel were crafting the final plan with Democrat and Republican leaders and moderates. Notice that the two plans were sent to committee and the settlement plan came out in about five minutes and did not look anything like either plan. Rahm Emanuel brought the real plan to the committee and said, “This is the settlement plan. The Republicans have agreed to give us the three votes we need if we send this plan out there.” Pelosi balked and Rahm stared her down. The Republicans nodded knowing they were not the three chosen to vote yes. The bill, a truly bi-partisan heavily negotiated bill passed. Obama got his bill and Republican leadership and Rush Limbaugh got their deniability. Everyone wins. How can we argue with that?
It is clear to me that he is going to do anything possible not to give away the rest of the TARP or auto-bailout money. Reduce executives’ pay, pass the stress test, show me more lending, develop a detailed business plan, build more green cars, jump through this hoop and that one and only then will we consider giving you more cash. If you make it, it is a good investment and perhaps private capital will become available. If not, oh well we tried. As a moderate, how can we argue with that?
Internationally, he has set the tone on the wars. We will get out of combat in Iraq, but we will not abandon them as prior US presidents have done to countries around the world, including Afghanistan. We will, however, get out of their politics and let them run their own country.
We are going to establish a clear mission in Afghanistan. As that is being determined by military, diplomatic and economic geniuses, he is stabilizing and supporting our current troops with new ones so that they are safer in a dangerous place. What President Obama is doing sure makes a lot of sense.
I support his overtures to begin diplomatic talks with all nations, including Iran, Syria and even Cuba. Nothing cures hostilities like mutual commercial reliance, a capitalist Republican philosophy. That said, he has been strong in the face of missile testing by the North Koreans. The “Axis of Evil” was flatly stupid and while it rallied a certain base for a struggling President Bush, it was not good global politics. The world already seems to like us more. That cannot be all bad.
There are many issues, but what I see is a true leader who articulates clearly and concisely in ways we can all understand and who is not afraid to stand up tall and talk to anyone about any plan. He has gathered great minds around him. He does not ask them to dream something up. He listens carefully to all sides, then, as a leader should, he makes an executive decision and tells the experts to figure out how to accomplish a result by a deadline in a bi-partisan manner. He does not act rashly without all the facts. His decisions are based on logical reasoning. But he is not lost in the facts. He steps up to the plate and makes the hard decisions that leaders must.
It is not really fair to the moderate blogger or the comedians for that matter. We are all struggling out here trying to find an edge. I am proud of our President and unlike some pundits want him to succeed, but he sure is not making my avocation very easy.
Saturday, February 28, 2009
Free Trade or Fair Trade
When the Stimulus package included some “Buy America” language the world was outraged. Free Trade, Free Trade was the clear message. The omitted question is, “What do you mean by Free Trade?”
In my opinion, to have truly Free and Fair Trade, the definition must have two parts:
1. Goods and services can be traded across borders without government impediment; and
2. The producers of those goods are subject to the same or similar regulations.
As to item 1, everyone knows that our trading partners do not permit free trade in both directions. If the US produces a product or service that if imported into the country would make it difficult for local producers to compete, then tariffs or regulatory impediments to free trade are established. The US, of course, does this as well.
The big chasm lies in item 2. Regulations are imposed to level the playing field. A company that wants to reduce pollution cannot do so if its competitors will not impose upon themselves the costs associated with reducing pollution. In the not too distant past, the relevant competition was among US and European companies subject to the same or similar regulations. Now, the relevant competition includes China, Mexico, India and many other countries that have no such laws or very weak laws that are not enforced. The playing field is out of whack.
US manufacturers produce whatever goods we still produce in facilities that are as environmentally clean and as safe as any in the world. When a company manufactures products or services in another country, including Mexico, these costly regulatory requirements need not be met.
Should we impose our regulatory philosophy on others?
Should we loosen our regulations and endanger workers and the environment?
The answer is that if a company desires to sell its goods into the US, then that company should be required to respect at least the environment we all share, and the safety of the people making these products, to the same extent as their US competitors must.
No company is REQUIRED to sell its goods into the US. Therefore we are not imposing our regulatory standards on others. Selling goods into the US is a privilege.
Second, the US works diligently to protect human life. This includes plant safety and protection of the environment in which we live. We cannot reduce our standards. In fact, we desire to strengthen them, but cannot if doing so puts more of our companies out of business in the face of unregulated international trade.
How can we accomplish this?
No question that this is a difficult proposition.
First, several countries, such as those in Western Europe, Japan, Australia, etc. already have proven track records for respecting the environment and human life. Aside from battles over specifics products, any imports manufactured in those countries would experience no import impediment. This is free and fair trade.
A near-term date would be set for other foreign countries to bring their companies up to appropriate world standards in air and water pollution and in worker safety. When the country is ready, it will pay sufficient US inspectors to come to the country to review compliance by all companies in that country that desire to export goods to the US. These inspections will be annual until the country passes and proves compliance with internationally compliant worker safety and environmental laws.
Those companies that pass will have free trade access to US markets. Those that fail will be allowed to import but after paying a tax at a rate higher than the costs to come into compliance, or they can choose not to trade in US markets and avoid the tax. Then whenever their plant is cleared, they will be permitted to trade with the US. Set thresholds will be established for the foreseeable future, that all companies in the world will have to meet. A company could improve itself far into the future and be certified through that date. Then use that fact in its marketing.
Ideally all developed countries would band together to create and enforce these rules and they would apply to trade with any country that is part of the group. At least one part of the world trade playing field would be leveled, we would have freer and fairer trade, and we would not have to wait for the next Kyoto Accord to begin to reduce pollution.
In my opinion, to have truly Free and Fair Trade, the definition must have two parts:
1. Goods and services can be traded across borders without government impediment; and
2. The producers of those goods are subject to the same or similar regulations.
As to item 1, everyone knows that our trading partners do not permit free trade in both directions. If the US produces a product or service that if imported into the country would make it difficult for local producers to compete, then tariffs or regulatory impediments to free trade are established. The US, of course, does this as well.
The big chasm lies in item 2. Regulations are imposed to level the playing field. A company that wants to reduce pollution cannot do so if its competitors will not impose upon themselves the costs associated with reducing pollution. In the not too distant past, the relevant competition was among US and European companies subject to the same or similar regulations. Now, the relevant competition includes China, Mexico, India and many other countries that have no such laws or very weak laws that are not enforced. The playing field is out of whack.
US manufacturers produce whatever goods we still produce in facilities that are as environmentally clean and as safe as any in the world. When a company manufactures products or services in another country, including Mexico, these costly regulatory requirements need not be met.
Should we impose our regulatory philosophy on others?
Should we loosen our regulations and endanger workers and the environment?
The answer is that if a company desires to sell its goods into the US, then that company should be required to respect at least the environment we all share, and the safety of the people making these products, to the same extent as their US competitors must.
No company is REQUIRED to sell its goods into the US. Therefore we are not imposing our regulatory standards on others. Selling goods into the US is a privilege.
Second, the US works diligently to protect human life. This includes plant safety and protection of the environment in which we live. We cannot reduce our standards. In fact, we desire to strengthen them, but cannot if doing so puts more of our companies out of business in the face of unregulated international trade.
How can we accomplish this?
No question that this is a difficult proposition.
First, several countries, such as those in Western Europe, Japan, Australia, etc. already have proven track records for respecting the environment and human life. Aside from battles over specifics products, any imports manufactured in those countries would experience no import impediment. This is free and fair trade.
A near-term date would be set for other foreign countries to bring their companies up to appropriate world standards in air and water pollution and in worker safety. When the country is ready, it will pay sufficient US inspectors to come to the country to review compliance by all companies in that country that desire to export goods to the US. These inspections will be annual until the country passes and proves compliance with internationally compliant worker safety and environmental laws.
Those companies that pass will have free trade access to US markets. Those that fail will be allowed to import but after paying a tax at a rate higher than the costs to come into compliance, or they can choose not to trade in US markets and avoid the tax. Then whenever their plant is cleared, they will be permitted to trade with the US. Set thresholds will be established for the foreseeable future, that all companies in the world will have to meet. A company could improve itself far into the future and be certified through that date. Then use that fact in its marketing.
Ideally all developed countries would band together to create and enforce these rules and they would apply to trade with any country that is part of the group. At least one part of the world trade playing field would be leveled, we would have freer and fairer trade, and we would not have to wait for the next Kyoto Accord to begin to reduce pollution.
Saturday, January 24, 2009
US to Solve Chinese Economic Crisis
There is an old saying, “Follow the Money.” The current stimulus package is going to provide tax credits to everyone, even those who pay no taxes. What happens when you give people money? They buy stuff, which is good for the economy, right? Well we have a huge trade deficit and most of the consumer goods that will be purchased with this money are made in China and other countries. So, following the money, if we give it away our population will spend it on goods from China, thus saving that economy and doing very little for ours over the long haul.
How can the government use its billions to actually fix this problem? I am quite certain our new President has the brightest minds available working on this. What I have gleaned from the conversation, however, and I find this typical when people are panicked, treat some of the symptoms but are not bold enough to craft an actual cure. One thing is clear, we have got to get back to making things.
For years, at least 40, the US has become increasingly uncompetitive in world business. We like to blame it on low wages, and that certainly plays a part. In addition, we have the cleanest, safest plants in the world. Of course they are all closed or closing. It makes no sense to provide funds to people who will buy foreign-made goods or to businesses if there is no real way for them to compete in the global environment. They will both spend the money overseas and there will be no advantage to the US economy.
What to do? Here are some ideas. (See my prior posts for more details below)
1. Pollution Tax: Create a Pollution Tax that everyone who sells anything in the US has to pay. This will raise the costs of imported goods that are manufactured in countries with little regard to pollution of the water, air and ground in their countries. Balance the international playing field a bit.
2. Increase Loan Guarantees: Dramatically increase SBA and other guaranteed loans. Guarantee loans are made by banks. Banks will loan money again and the government is not out the cash now. Make the borrower use the money in the US to hire people and create facilities.
3. No Minimum Wage: THIS IS GOOD FOR THE HARD WORKING MIDDLE CLASS! The minimum wage forces hard-working middle class Americans to pay, out of their own pockets, extra wages to the worst workers in the company, or of course the company moves the whole plant to China. When a company moves overseas, the US loses the higher-paying supervisory and management jobs as well as the hourly workforce. Make all workers, even the lousy ones, earn their wages and there will be MORE jobs that pay higher wages.
4. Reduce Immigration Restrictions: Let immigrants in, let them work at below minimum wage and allow American industry to grow again, bringing higher paying supervisory and management jobs back to this country.
5. Flat Corporate Tax: Create a flat corporate tax on gross revenues over one million dollars that all businesses pay. Eliminate all of the complex tax rules that allow some profitable companies to avoid paying any income taxes, and all the complex tax requirements and credits that have been laid on the system throughout the years. Then the government can start over if necessary.
6. Eliminate the Payroll Tax: It discourages American workers. Roll the required tax revenues into the flat corporate tax.
7. Fund High-Tech and Clean Fuel R&D and New Businesses: As the President has pointed out, this has a great future to drive new higher paying jobs.
8. National Competition-based Health Insurance: Pass a national, competition based health insurance plan, with catastrophic coverage for all. Take health insurance benefits out of the province of business. They do not know how to do this very well. Put it in the hands of professionals and let people get creative.
9. Balance the International Playing Field: Regulations are important, but use them to balance the international playing field. If US companies have to do something, foreign companies that import into the US should have to do so as well, or pay a commensurate tariff that balances the playing field for US manufacturers.
If we do not correct the problems with US manufacturing this is all a waste of time. Countries that make things will grow. Countries that provide services and buy things from other countries gradually shrink.
If you are an environmentalist, who do you want manufacturing goods - the US or the Chinese?
If you care about the poor, where do you want workers to work, in the US or in China?
If you care about safety to workers and consumers, where to you want things made, in the US or China?
We have no choice but to find ways to compete in the global economy. Level the international playing field.
The only saving grace is that really wealthy people invest their money in foreign lands and since they prefer to live in the US, they bring the profits back here. How long will that last? Only so long as Americans have money to spend to buy foreign goods. That is slowly slipping away. Open your eyes and see the real, hard problem.
Give away money = save China’s economy.
Invest money in business and level the international playing field = save the US economy.
We are all rooting for you, Mr. President. Good luck, but please do not save China.
How can the government use its billions to actually fix this problem? I am quite certain our new President has the brightest minds available working on this. What I have gleaned from the conversation, however, and I find this typical when people are panicked, treat some of the symptoms but are not bold enough to craft an actual cure. One thing is clear, we have got to get back to making things.
For years, at least 40, the US has become increasingly uncompetitive in world business. We like to blame it on low wages, and that certainly plays a part. In addition, we have the cleanest, safest plants in the world. Of course they are all closed or closing. It makes no sense to provide funds to people who will buy foreign-made goods or to businesses if there is no real way for them to compete in the global environment. They will both spend the money overseas and there will be no advantage to the US economy.
What to do? Here are some ideas. (See my prior posts for more details below)
1. Pollution Tax: Create a Pollution Tax that everyone who sells anything in the US has to pay. This will raise the costs of imported goods that are manufactured in countries with little regard to pollution of the water, air and ground in their countries. Balance the international playing field a bit.
2. Increase Loan Guarantees: Dramatically increase SBA and other guaranteed loans. Guarantee loans are made by banks. Banks will loan money again and the government is not out the cash now. Make the borrower use the money in the US to hire people and create facilities.
3. No Minimum Wage: THIS IS GOOD FOR THE HARD WORKING MIDDLE CLASS! The minimum wage forces hard-working middle class Americans to pay, out of their own pockets, extra wages to the worst workers in the company, or of course the company moves the whole plant to China. When a company moves overseas, the US loses the higher-paying supervisory and management jobs as well as the hourly workforce. Make all workers, even the lousy ones, earn their wages and there will be MORE jobs that pay higher wages.
4. Reduce Immigration Restrictions: Let immigrants in, let them work at below minimum wage and allow American industry to grow again, bringing higher paying supervisory and management jobs back to this country.
5. Flat Corporate Tax: Create a flat corporate tax on gross revenues over one million dollars that all businesses pay. Eliminate all of the complex tax rules that allow some profitable companies to avoid paying any income taxes, and all the complex tax requirements and credits that have been laid on the system throughout the years. Then the government can start over if necessary.
6. Eliminate the Payroll Tax: It discourages American workers. Roll the required tax revenues into the flat corporate tax.
7. Fund High-Tech and Clean Fuel R&D and New Businesses: As the President has pointed out, this has a great future to drive new higher paying jobs.
8. National Competition-based Health Insurance: Pass a national, competition based health insurance plan, with catastrophic coverage for all. Take health insurance benefits out of the province of business. They do not know how to do this very well. Put it in the hands of professionals and let people get creative.
9. Balance the International Playing Field: Regulations are important, but use them to balance the international playing field. If US companies have to do something, foreign companies that import into the US should have to do so as well, or pay a commensurate tariff that balances the playing field for US manufacturers.
If we do not correct the problems with US manufacturing this is all a waste of time. Countries that make things will grow. Countries that provide services and buy things from other countries gradually shrink.
If you are an environmentalist, who do you want manufacturing goods - the US or the Chinese?
If you care about the poor, where do you want workers to work, in the US or in China?
If you care about safety to workers and consumers, where to you want things made, in the US or China?
We have no choice but to find ways to compete in the global economy. Level the international playing field.
The only saving grace is that really wealthy people invest their money in foreign lands and since they prefer to live in the US, they bring the profits back here. How long will that last? Only so long as Americans have money to spend to buy foreign goods. That is slowly slipping away. Open your eyes and see the real, hard problem.
Give away money = save China’s economy.
Invest money in business and level the international playing field = save the US economy.
We are all rooting for you, Mr. President. Good luck, but please do not save China.
Thursday, January 22, 2009
The American Mutts – And Proud of It!
We are all proud, and we should be, that Barack Obama is the first African American president. As a tall white anglo male, I represent the group most favored of this great country and I am extremely proud of this national accomplishment. I think it is time for a great celebration. Of course our President, like you and me, has a very diverse lineage. Kenyan and Irish among them.
It would be a wonderful thing for President Obama to step forward and denounce all labels for race, national origin, whatever and declare that we are all mutts. He clearly supports this position. That is what makes us Americans. Just like the President, we are all an amalgam of brave souls, outcasts and misfits from countries around the world.
We are American Mutts!
I would love to see Barack create a national day, some historically irrelevant Saturday in June so it will be nice everywhere, and declare it a day for celebration of our American Muttness.
Focus on the fact that we are all shades of the same general brown color, not black or white or whatever.
Focus on the fact that our ancestors came from all over the globe, but we should celebrate not those countries but the mixtures of histories that make Americans who we are.
Celebrate the fact that we represent every religion on the globe, but encourage participation by non-believers.
Have parades and speeches and lectures and parties.
Sign legislation abolishing laws providing special treatment for any group over another.
Review the purpose of the Constitution, the 16th Amendment, the Declaration of Independence, and the many speeches throughout our countries history, but do not dwell on the past – celebrate the future.
It would be a wonderful thing for President Obama to step forward and denounce all labels for race, national origin, whatever and declare that we are all mutts. He clearly supports this position. That is what makes us Americans. Just like the President, we are all an amalgam of brave souls, outcasts and misfits from countries around the world.
We are American Mutts!
I would love to see Barack create a national day, some historically irrelevant Saturday in June so it will be nice everywhere, and declare it a day for celebration of our American Muttness.
Focus on the fact that we are all shades of the same general brown color, not black or white or whatever.
Focus on the fact that our ancestors came from all over the globe, but we should celebrate not those countries but the mixtures of histories that make Americans who we are.
Celebrate the fact that we represent every religion on the globe, but encourage participation by non-believers.
Have parades and speeches and lectures and parties.
Sign legislation abolishing laws providing special treatment for any group over another.
Review the purpose of the Constitution, the 16th Amendment, the Declaration of Independence, and the many speeches throughout our countries history, but do not dwell on the past – celebrate the future.
Certainly we will always be different. Every mutt is different from all others. That is what is wonderful about mutts.
When we celebrate "diversity" we point out and even label Americans as within certain separate but equal categories. African-American. Italian-American. Chinese-American. Christian. Jew. Atheist. Whatever.
Shouldn't we celebrate that we are all unique American mutts and then celebrate our INDIVIDUAL differences and strengths rather than our labels.
I want to be recognized as an American who is tall and bright. Not a European-American, Christian, White person. These are labels which bear no relation to my individual characteristics whatsoever. They are, however, how we define ourselves today and they are irrelevant.
We are mutts, mutts are each unique, and we should celebrate THAT.
Rejoice in the variety that makes us American and begin to develop a new culture without labels, without stereotypes and without prejudice.
Create a new pride in being an American Mutt!
American Mutt Day!
When we celebrate "diversity" we point out and even label Americans as within certain separate but equal categories. African-American. Italian-American. Chinese-American. Christian. Jew. Atheist. Whatever.
Shouldn't we celebrate that we are all unique American mutts and then celebrate our INDIVIDUAL differences and strengths rather than our labels.
I want to be recognized as an American who is tall and bright. Not a European-American, Christian, White person. These are labels which bear no relation to my individual characteristics whatsoever. They are, however, how we define ourselves today and they are irrelevant.
We are mutts, mutts are each unique, and we should celebrate THAT.
Rejoice in the variety that makes us American and begin to develop a new culture without labels, without stereotypes and without prejudice.
Create a new pride in being an American Mutt!
American Mutt Day!
Be Proud to be an American Mutt
Monday, January 19, 2009
The Pollution Tax
Al Gore proposed that we institute a carbon tax on the carbon emitted by any company. This is a good idea so long as it applies to every company that sells anything in the US. I also believe that while carbon is important to Mr. Gore, the US should be concerned with global pollution and the tax should be based on pollution.
The US imposes expensive regulations on its manufacturers while China and other countries do not. Regulations and taxes should be designed not to impose unequal burdens, but to level the playing field. There is no incentive to improve pollution performance if your competitor will not do the same. We now compete in a global marketplace, but we can only control what occurs within our borders.
The pollution tax should be an amount high enough so that it is cheaper to comply with anti-pollution regulations. It should be applied to all US companies and to all importers of goods into this country. There should be two levels or considerations, one on the plant itself and the second on the products sold in the US. It is not terribly helpful if a clean facility produces polluting products.
The pollution tax would be a set percentage of the value of the goods produced in the facility no matter where they end up. Each company, foreign and domestic, would have the EPA investigate its facilities and product, and then grade them as to how well they meet US standards. Foreign companies that import into the US would be required to pay the EPA to perform this service.
If the company passes, then the tax is waived. If it fails, then a tax is imposed based on the level of non-conformance. Each year the standards should be increased and the tax increased for non-conformance. This should be clearly set forth so that everyone understands what is coming.
If a foreign company refuses to pay to have the EPA inspect the facility, then the tax is imposed and imports are prohibited from that manufacturer. Imports will be allowed once the outstanding tax is paid and the EPA is permitted to inspect and grade the facility. Once graded, the new and adjusted tax, if any, is due going forward. So long as it is paid, imports are permitted. It will be the requirement of importers to make sure that all imports include a seal of approval from the EPA.
Pollution Correction Rebate: The entire pollution tax will be used exclusively to help US companies comply with the required standards. US violators pay the tax, but once they prove they have corrected the problem, the costs of making the corrections will be reimbursed by the government from the taxes from all companies, foreign and domestic. Any costs incurred to meet new standards would come from the Pollution Tax fund.
Since this applies equally to foreign and domestic companies, it would go a long way toward balancing one of the inherent inequities between US and foreign manufacturing. Since the proceeds go toward helping US companies comply, it benefits US industry and cleans the world at the same time.
International standards applicable to all companies would likely be developed. The US will likely develop arrangements with certain countries to perform the review on the EPA’s behalf. In the end the US is a leader in environmentally clean industry and US manufacturing gains a modest advantage over competitors from polluting countries, at least until the world is a clean place to live.
The US imposes expensive regulations on its manufacturers while China and other countries do not. Regulations and taxes should be designed not to impose unequal burdens, but to level the playing field. There is no incentive to improve pollution performance if your competitor will not do the same. We now compete in a global marketplace, but we can only control what occurs within our borders.
The pollution tax should be an amount high enough so that it is cheaper to comply with anti-pollution regulations. It should be applied to all US companies and to all importers of goods into this country. There should be two levels or considerations, one on the plant itself and the second on the products sold in the US. It is not terribly helpful if a clean facility produces polluting products.
The pollution tax would be a set percentage of the value of the goods produced in the facility no matter where they end up. Each company, foreign and domestic, would have the EPA investigate its facilities and product, and then grade them as to how well they meet US standards. Foreign companies that import into the US would be required to pay the EPA to perform this service.
If the company passes, then the tax is waived. If it fails, then a tax is imposed based on the level of non-conformance. Each year the standards should be increased and the tax increased for non-conformance. This should be clearly set forth so that everyone understands what is coming.
If a foreign company refuses to pay to have the EPA inspect the facility, then the tax is imposed and imports are prohibited from that manufacturer. Imports will be allowed once the outstanding tax is paid and the EPA is permitted to inspect and grade the facility. Once graded, the new and adjusted tax, if any, is due going forward. So long as it is paid, imports are permitted. It will be the requirement of importers to make sure that all imports include a seal of approval from the EPA.
Pollution Correction Rebate: The entire pollution tax will be used exclusively to help US companies comply with the required standards. US violators pay the tax, but once they prove they have corrected the problem, the costs of making the corrections will be reimbursed by the government from the taxes from all companies, foreign and domestic. Any costs incurred to meet new standards would come from the Pollution Tax fund.
Since this applies equally to foreign and domestic companies, it would go a long way toward balancing one of the inherent inequities between US and foreign manufacturing. Since the proceeds go toward helping US companies comply, it benefits US industry and cleans the world at the same time.
International standards applicable to all companies would likely be developed. The US will likely develop arrangements with certain countries to perform the review on the EPA’s behalf. In the end the US is a leader in environmentally clean industry and US manufacturing gains a modest advantage over competitors from polluting countries, at least until the world is a clean place to live.
Saturday, January 17, 2009
The Bail-Out and Stimulus Package
Every economist will tell you any time you ask that the Federal Government is a closed system. Whenever it gives out money to someone it has to take that money from somewhere else. This includes higher taxes, fewer programs or mortgaging the future through higher deficits. There is no free money.
Politically, the Bush administration and the Obama administration and both Congresses are hell-bent on a bail-out and stimulus package. So as long as this is going to happen anyway, we should look at how it should be structured and what should go along with it.
The basic theory is that if you give people money, they will spend it. They will buy things they would not otherwise buy, which in turn helps the businesses that make those things and they are able to keep more of their employees (even if those employees are in China). When people are hurting for cash, do they buy the higher price items made in the US or the lower price items sold at Walmart and made overseas? In theory it does not matter because the Chinese guy buys something and eventually the money raises everyone. Do Chinese assembly line workers buy American made goods?
But this begs the question, why should the US government and US taxpayers provide money to help employ the Chinese? There is certainly no way to stop it. Once I got my $600 last Spring, I bought stuff. I have no idea where it was made. Did last Spring’s stimulus package help the economy? Are you better off for it? China grew at 13% last year. Where did the $600 go? Where did the $350 billion go?
The goal of spending US cash should be to build the US economy. At its core, what is wrong with the US economy?
We don’t make things anymore. The only way to build an economy is to make things that people want to buy. So, if we are going to spend this money anyway, what should we do to make sure it helps the US economy?
1. Dramatically increase SBA guaranteed lending to entrepreneurs and small business. Virtually all of the current unemployment is being experienced by Baby Boomers over the age of 45 years old. They represent a highly paid glut of humans in our population. In our current situation, they can never be re-employed at high rates. These people have experiences, talents, training and ideas. Help them start new businesses using those capabilities and they will hire others.
Plus a loan is not a net drain. The vast majority of SBA backed loans are re-paid. Even a 5% default rate, which is extraordinarily high, is cheaper than giving away all this money. Plus these are guarantees. Banks lend the money. So there is no actual cash out the door and banks start lending and making money again. The best of all worlds.
That is the politically doable part, but don’t disregard it because you do not like or understand this next part. It is really important though.
2. Eliminate the minimum wage. It is not paid by businesses. It is paid by hard working middle class Americans who get less so the company can allocate some of their hard-earned wages to the dredges at the bottom who, by definition, are not worth even minimum wage. These dredges recently got a raise for being the worst workers in the company. Eliminating that will make US manufacturers more competitive, which simply has to happen.
3. Allow all immigrants into this country. We need low-paid workers to do the stuff at the bottom of the manufacturing pyramid. We will GAIN jobs, because we will hire Americans to supervise, manage and oversee these low level workers. Those are all the HIGH-PAYING jobs that are lost when we move manufacturing overseas and they are perfect for the unemployed Baby-Boomers.
4. Pass my health insurance plan – see prior post. Get corporations out of the insurance business. Get the States out of the regulation business and make healthcare a national issue which will reduce costs. Allow anyone to band together to negotiate great group rates or create huge self-insurance plans where wellness drives cost reduction. The government should provide catastrophic coverage which will reduce rates to most because the coverage costs are capped.
5. Create a flat corporate tax on revenues over $1,000,000. Eliminate the payroll tax, which is a disincentive to hiring and paying workers. Roll all income and payroll corporate taxes into one simple flat tax. This will dramatically reduce compliance costs for American companies and avoid complex schemes to create a tax loss and avoid paying any taxes. If a company has revenues over $1,000,000, they pay a set percentage of those revenues in taxes, even if they are losing money.
Congress uses taxes for social engineering. I think that is wrong, but it is a fact of life. A flat tax actually makes this easier and more powerful. Every company pays it so they will ALL have the intended incentive if a credit is provided. Not just those showing a taxable net profit.
Small businesses (under $1,000,000 in gross revenues) pay no taxes, so all the complicated corporate, LLC, partnership and Sub S schemes to avoid “double-taxation” that they pay attorneys and accountants for is eliminated. These are families trying to make a living and hire people.
So if we do this, what happens?
Businesses are relieved of a significant amount of unnecessary overhead in trying to do things outside their core competencies – taxes and benefits. The government gets the same amount in taxes and more control over corporations.
There are low-paid workers able to fill the bottom of the manufacturing pyramid and this employs supervisors and management for the Baby-Boom generation that is currently suffering most. These positions are now lost to China. This helps grow the US manufacturing base which grows the economy.
There are plenty of important regulations regarding working conditions, the environment and the like which must remain. When we make things, we do it in a much better, safer and cleaner manner than anyone else in the world. Our unions will make sure that fair wages are paid if that gets out of line. We have a great system. Let it work.
If we help fund small creative entrepreneurial businesses, the true greatness of our economy, we will put the brilliant minds to work on reaching the dreams they never pursued because they had jobs. Small companies built on great ideas build nations. But they too need easier tax burdens, fewer non-core responsibilities and workers who make what they are worth all the way through their organizations.
Finally, workers who are paid only what they are worth, the definition of the minimum wage, will work harder, get to work on time, reduce drug and alcohol use so that it lessens the impact on their performance and will try harder to be better so they can make more. Immigrants will come and go as job availability dictates. Without a minimum wage they may be able to find better employment in their own countries and go back. Problem solved.
Simple but difficult solutions that would work and no giving away money. We shall see.
Politically, the Bush administration and the Obama administration and both Congresses are hell-bent on a bail-out and stimulus package. So as long as this is going to happen anyway, we should look at how it should be structured and what should go along with it.
The basic theory is that if you give people money, they will spend it. They will buy things they would not otherwise buy, which in turn helps the businesses that make those things and they are able to keep more of their employees (even if those employees are in China). When people are hurting for cash, do they buy the higher price items made in the US or the lower price items sold at Walmart and made overseas? In theory it does not matter because the Chinese guy buys something and eventually the money raises everyone. Do Chinese assembly line workers buy American made goods?
But this begs the question, why should the US government and US taxpayers provide money to help employ the Chinese? There is certainly no way to stop it. Once I got my $600 last Spring, I bought stuff. I have no idea where it was made. Did last Spring’s stimulus package help the economy? Are you better off for it? China grew at 13% last year. Where did the $600 go? Where did the $350 billion go?
The goal of spending US cash should be to build the US economy. At its core, what is wrong with the US economy?
We don’t make things anymore. The only way to build an economy is to make things that people want to buy. So, if we are going to spend this money anyway, what should we do to make sure it helps the US economy?
1. Dramatically increase SBA guaranteed lending to entrepreneurs and small business. Virtually all of the current unemployment is being experienced by Baby Boomers over the age of 45 years old. They represent a highly paid glut of humans in our population. In our current situation, they can never be re-employed at high rates. These people have experiences, talents, training and ideas. Help them start new businesses using those capabilities and they will hire others.
Plus a loan is not a net drain. The vast majority of SBA backed loans are re-paid. Even a 5% default rate, which is extraordinarily high, is cheaper than giving away all this money. Plus these are guarantees. Banks lend the money. So there is no actual cash out the door and banks start lending and making money again. The best of all worlds.
That is the politically doable part, but don’t disregard it because you do not like or understand this next part. It is really important though.
2. Eliminate the minimum wage. It is not paid by businesses. It is paid by hard working middle class Americans who get less so the company can allocate some of their hard-earned wages to the dredges at the bottom who, by definition, are not worth even minimum wage. These dredges recently got a raise for being the worst workers in the company. Eliminating that will make US manufacturers more competitive, which simply has to happen.
3. Allow all immigrants into this country. We need low-paid workers to do the stuff at the bottom of the manufacturing pyramid. We will GAIN jobs, because we will hire Americans to supervise, manage and oversee these low level workers. Those are all the HIGH-PAYING jobs that are lost when we move manufacturing overseas and they are perfect for the unemployed Baby-Boomers.
4. Pass my health insurance plan – see prior post. Get corporations out of the insurance business. Get the States out of the regulation business and make healthcare a national issue which will reduce costs. Allow anyone to band together to negotiate great group rates or create huge self-insurance plans where wellness drives cost reduction. The government should provide catastrophic coverage which will reduce rates to most because the coverage costs are capped.
5. Create a flat corporate tax on revenues over $1,000,000. Eliminate the payroll tax, which is a disincentive to hiring and paying workers. Roll all income and payroll corporate taxes into one simple flat tax. This will dramatically reduce compliance costs for American companies and avoid complex schemes to create a tax loss and avoid paying any taxes. If a company has revenues over $1,000,000, they pay a set percentage of those revenues in taxes, even if they are losing money.
Congress uses taxes for social engineering. I think that is wrong, but it is a fact of life. A flat tax actually makes this easier and more powerful. Every company pays it so they will ALL have the intended incentive if a credit is provided. Not just those showing a taxable net profit.
Small businesses (under $1,000,000 in gross revenues) pay no taxes, so all the complicated corporate, LLC, partnership and Sub S schemes to avoid “double-taxation” that they pay attorneys and accountants for is eliminated. These are families trying to make a living and hire people.
So if we do this, what happens?
Businesses are relieved of a significant amount of unnecessary overhead in trying to do things outside their core competencies – taxes and benefits. The government gets the same amount in taxes and more control over corporations.
There are low-paid workers able to fill the bottom of the manufacturing pyramid and this employs supervisors and management for the Baby-Boom generation that is currently suffering most. These positions are now lost to China. This helps grow the US manufacturing base which grows the economy.
There are plenty of important regulations regarding working conditions, the environment and the like which must remain. When we make things, we do it in a much better, safer and cleaner manner than anyone else in the world. Our unions will make sure that fair wages are paid if that gets out of line. We have a great system. Let it work.
If we help fund small creative entrepreneurial businesses, the true greatness of our economy, we will put the brilliant minds to work on reaching the dreams they never pursued because they had jobs. Small companies built on great ideas build nations. But they too need easier tax burdens, fewer non-core responsibilities and workers who make what they are worth all the way through their organizations.
Finally, workers who are paid only what they are worth, the definition of the minimum wage, will work harder, get to work on time, reduce drug and alcohol use so that it lessens the impact on their performance and will try harder to be better so they can make more. Immigrants will come and go as job availability dictates. Without a minimum wage they may be able to find better employment in their own countries and go back. Problem solved.
Simple but difficult solutions that would work and no giving away money. We shall see.
Friday, January 9, 2009
Stimulate the Future
I confess I have not read the stimulus package that almost President Obama has crafted, but I have read the many reports as to what it contains and I thought I would throw in my two cents worth as well.
My hope is that Obama makes huge changes to the way our government works. I have proposed many, and there are others. For this package, however, I would suggest a growth initiative rather than a hand out. No one wants a hand-out. They want a future.
Dramatically Expand Small Business Loans for Start-up and Early Stage Companies for all sorts of business ideas, but especially for start-up high-tech, bio-tech and other businesses of the future. Provide money so that those laid-off workers with great ideas can start their own huge new business and hire their laid-off co-workers. Since each small business needs around $400,000 on average to get started, a mere $40 billion starts 100,000 new small businesses. If each business hires 5 people on average, that is 500,000 new jobs. The vast majority of this money will be repaid, with interest, so this is not a sunk cost.
Invest in New World Infrastructure Improvements like a nationwide government owned wireless network that everyone can tap into. Build a system that is compatible with every communications provider and with international systems and rent space to them to eventually recoup the costs. We would train a whole new high tech workforce and allow business people to conduct international business from anywhere. Build it with American made high tech equipment to drive the development of that industry in the US and train even more workers.
There are other things that should be done, but they are too controversial.
The minimum wage is, by definition, an overpayment of our worst workers and this overpayment comes from the pockets of our better workers. It is a nice idea, but in the end it robs from the middle class and gives to the least worthy. Not sure that makes sense.
If we allow freer immigration at low wage rates we would bring back US manufacturing and add higher paying supervisory and management jobs decreasing overall unemployment and help to make the US a producing nation again, which is what builds national wealth.
Reallocate Social Security so that only retired middle class and poor receive it and provide that the tax is on all earned income rather than the current cap which requires the middle class pay a higher percentage. More money in and more money allocated to those who really need it.
President Obama’s plan contains many of the other critical issues, but should focus a great deal more of the total to these.
Alternative Energy Investment.
Bridges, Sewers and other Infrastructure Improvement.
Worker Retraining.
Don't just give us money. Drive forward to build our futures.
I am sure that our wise and dedicated representatives will do what it right. Perhaps my thoughts, if only in principle, will help.
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