Health Care’s Cost Benefit Analysis

The National Highway Traffic Safety Administration reported 43,443 highway fatalities in 2005. If the maximum speed law were reduced the death toll would be sharply reduced.

If the government wants to save lives at little cost; a suggestion.

Independent observers estimate the proposed health care plan will cost trillions, to save to levels estimated for ObamaCare.

Why not reduce interstate speed laws? Why not educate drivers to be more safety-minded? That would save lives with better cost benefit.

Why not better obesity control, as another example?

MBA Program Changes

In a previous blog I mentioned MBA programs being revamped.

Some schools may be doing this for critical needs, while others may have more cynical reasons.

Educators may truly feel they are responsible for the type of student they have turned out. Or they may be trying to promote their MBA course in a depressed market.

Be alert to any school that makes ethics and excessive greed a fundamental lesson. Every course has to include an idea of ethics. But it is not a basic MBA tenet. It merely advises a student that the school has a leftist view of capitalism.

The prime focus on ethics and “sins of capitalism” is a theme that has permeated much of educational thinking.

After all, even scientists these days have occasionally cheated and hidden facts.

Ineffective MBA Programs

The Master of Business Administration degree, that many feel is so necessary for a top financial or business position, is getting a revamped appraisal by graduate schools.

Educators are doing this for two reasons. One is as a critique of MBA programs to date, and the other may be rather cynical.

Many schools think they may be partly responsible for the calibre of student they have turned out. And they may be trying to merely promote their MBA courses, because of a depressed graduate school market.

This speaks much about each school.

Post Office In-Efficiency and ObamaCare

One of the many aspects of what to expect from ObamaCare is evident today when we look at the U.S. Postal System.

Losses each year run about $7 billion, despite constant increases in charges. Postage stamps and other mail services have gone up well above the rate of inflation. A large number of post offices are slated to be shut to cut expenses, in addition to reduced delivery days and hours. Still, losses continue to mount.

The Post office retains its first class monopoly because no private carriers are allowed to compete with the government-permitted system..

Need to know more about this Government-Option service?

Sexual Harassment Suits are Costly

Experience as a major corporate employee-contractor taught me that treating employees well was good business. It kept them happier and they performed better.

I know that from experience. I am not a politician, who never truly creates real jobs. By the time I sold my interest in the company I created, I had over 10,000 permanent employees and well over 100,000 temporary workers at any given time.

I had also written instructions for my employees, to conform to Federal Equal Employment Opportunity Commission standards. To be certain they knew the ground rules about harassment at work.

Close to 100,000 complaints were filed by workers in 2008 on sexual discrimination of some sort. It can be bathroom issues of illicit advances, etc. based on gender.This can also be expensive because of attendant lawsuits.

Particularly for employers trying to overcome a deep recession when jobs are important.

It does make good business sense as well as decency to be careful.

The Young Jobless Government Problem

Youngsters suffer from unemployment to a far greater degree than the rest of the population. Government bumbling makes it worse for them.

The main problem aside from educational shortcomings? Left-leaning politicians raise minimum wages, in federal government and the ten states where minimum wage levels are higher than federal.

Teen unemployment approaches 30%, the worst since World War II, compared to 24% in July of 2009. Black male unemployment is about 50%, up from about 39% in July, 2009.

Union pressures. through the White House and Congress, add to the burden of minimum wages. That is also a significant factor in adding to teen joblessness. Low-rung workers are not directly affected, or even unionized, but union contract wages get adjusted upwards with higher minimum wages.

The cycle of unemployment among youth will continue as politicians seek favor from unknowing voters.

Government Bureaucrats Are Always Clueless

Citizens generally have an incorrect idea that Government bureaucrats, including the Treasury Secretary and the Federal Reserve head, are really completely “in the know.”

They may know more than 99.9% of the public, but that does not mean they know all it takes to perform an adequate job.

They are merely human. They may have little more information than we. But they may have no more expertise, and far less practical experience than many of us. Many bureaucrats have never had top-level corporate experience..

I know from my business and academic experience and contacts.

Inexperienced, impractical bureaucrats often make mistakes everyday. Unfortunately, they cannot admit flagrant mishaps, for the sake of their jobs, or their political party. So they blame everyone but themselves. Past administrations, the media, and their critics.

They haven’t really a clue,

The Department of Veterans Affairs’ Health Coverage

Want to see how poorly the government supervises health care? Look at its record of treating veterans over the years.

If the government covers veterans so poorly, how do you think it will treat the general population with ObamaCare?

Aside from general neglect of needs, this includes experience with health care rationing and even questionable episodes during the Clinton Administration, which were only remedied in part during George W. Bush’s tenure.

Add to the mixture the pressure of enormous additional coverage and the potential for fraud, which now is a major factor in Medicaid and Medicare, and you have a gigantic mess.

The media have swept this scandal out of sight while the health insurance debate has been unfolding.

College Entrance Tinkering

To make sure more unqualified students get into college when they are unable to pass SAT tests, many colleges, including the fabled Ivy League variety, have announced they are going to give credit for an applicant’s personality.

This could add about 200 points to the SAT score for those who fail minimal standards.

I have been saying for some time, college kids are getting dumber, colleges are getting fatter, and the country is suffering from it.

No one is being fooled except the public. They are inundated with below-grade college graduates, and it shows in our workforce, our institutions and government.

Environmentalists and Practical Economics

Everyone wants a clean environment. Everyone wants verdant forests, clean lakes and rivers, with abundant fishing. Everyone wants to protect species to see that they continue to exist.

We know that many fall by the wayside due to varying reasons, some having to do with human existence. After all, we must compete for living space.

But also we all want jobs, along with cheap and plentiful food.

Somewhere, there has to be a distinction made by us all, about which of the above takes preference.

Micro-Finance

Micro-finance has received much publicity about its overseas operations in India, Latin America and eastern Europe. Its business is making the smallest loans to the tiniest entrepreneurs, who usually run one-person operations.

There are said to be about $2.5 billion invested by private investors, on the premise that borrowers who take as little as $100 or so at a time are good risks.

Some borrowers receive as much as $400 over a few years. Fund investor return is supposedly about 5% and the default rates are said to range a bit more than 2%. That’s better than from past financial meltdown records.

Well over 230 micro-finance investment institutions are now in the business. Little regulations exist. But the reported default rate is suspiciously low.

A decided moral hazard does exist. Even the most determined entrepreneurial but poor of the borrowers will have to feed themselves and their families before loans are repaid.

Politicians With Unrealistic Ideas

Politicians often come up with idiotic schemes during a deep recession. Either they are economic idiots or they think the voters are. So, they bash business because they believe their voters will appreciate the effort.

Result of this perceived populism? More folks lose jobs and less people are employed.

How do you get business in this recessional predicament? Make it more expensive to hire, especially with small business. After all, they may have fewer lobbyists to “pester” politicians.

Raise taxes on the “rich.” Add to paperwork of small business and hang a cloud of future hindrances over entrepreneurs to dampen psychology.

Example: In the most liberal of liberal bastions, New York City, their inept City Council decided to give mandatory sick pay to all, whether small business could afford it or not. If you have over 10 employees you must give 9 sick days, if less than 10 employees,, 5 sick days. Or pay $1,000 fines. So, if you are a small operator, and you cannot afford the added costs, you go out of business. For that burden goes with ever-increasing minimum wages.

Small business is suffering acutely from the Great Recession, so even if they remain in operation, they hire less help.

Yet, everyone on the Left is happy and show voters how they are out to help “workers.”

We Over-Hire and Then Fire Too Often

Most companies fire help too readily, simply because they hire them too readily.

My experience, as a co-founder and top executive officer of an international employee-contracting firm, has lead me to that conclusion.

Most managers do not have sufficient flexibility with regard to employment practice. Poor planning is their problem in most instances.

Too much firing and rehiring is expensive in the long run because of wasted know-how, severance costs, and training expense.

The Cause of the Housing Bubble and Collapse

As the public has forgotten, let’s sum up the basic cause of the housing bubble and the financial downturn that has culminated in our current Great Recession. Politicians have rewritten the script to suit their cause.

Wall Street was saddled with subprime loans which it marketed, thanks to the liquidity promoted by the Federal Reserve.

Those subprime loans were given birth by:

1: The 1992 Federal Housing Enterprises Financial Safety and Soundness Act (GSE Act)

2: Fannie Mae and Freddie Mac who were to buy $6 trillion of single-family loans over 16 years.

3: The 1977 Community Reinvestment Act (CRA) to low income and moderate income communities.

4: Aide from Acorn (Association of Community Organizations for Reform Now)

It would therefore appear the deep recession we have is a result of our Congress and its pandering populist politicians who blame everyone but themselves for the imposed disaster.

CO2 Restrictions

CO2 limits hurt the economy. Clean-air regulation is a mishmash of non standard confusion, particularly when it comes to CO2. It isn’t even clear that CO2 actually is a pollutant.

The Clean Air Act was written to appease a group whose nebulous belief dictates that something be done about so-called global warming. There are certainly poisonous materials in the air.To what extent CO2 is a pollutant that does damage is doubtful to most scientists. Even when cost-benefit analysis is applied to the subject,

What is clear is that environmentalists religiously undertake enormously expensive, economically disastrous projects that attempt to curtail CO2 and other emissions, without any idea of unintended consequences.

Private Health Clinics

Despite all the chatter about the high cost of medical coverage and health insurance, there are alternatives which hardly ever get attention from politicians.

There are health clinics already being used, whereby folks can see a registered nurse quickly for emergencies, at a for-profit, licensed facility; They can be found at convenient spots, such as malls.

The nurse can refer the seriously ill patents to doctors or hospitals. The facilities are supervised by doctors.

These facilities are more comfortable for those who are not sick or hurt enough to go to emergency rooms of hospitals, The private clinics are set up to be low cost, and can be covered by forms of insurance.

Employees Doing Their Thing

Forget about “new” management ideas, where management unleashes its employees to carry out their own ideas.

The concept that a company does best when employees are free to operate with managerial theories of their own, sounds good and acceptable to most employees, but is often thought up by those who have never run a real business.

Besides, this management feature depends on the nature of the business. It may sometimes be o.k. for a creative type of operation, but not the average firm, where a creative mess that could result would be unthinkable.

Employee suggestions are always useful and should be considered. But if they were really creative and effective bosses, in most instances the employees would have been the real employers.

Health Care Union Membership

Little-noticed possibilities in ObamaCare could be the facilitation of unionized hospitals and other providers. This would be the end of any vestige of so-called lower-cost health care.

Union objectives and not consumer interests will take preference, as it does today with education. Further, It could do to any government plan what Big Unions did to GM and Chrysler.

Such strike threats on state or regional levels will blackmail at will, at all times, whatever and whenever union demands come up for contract renewals.

Predictive Market Futures

Business executives always make predictions but are not always happy making them. Accuracy is difficult, especially the longer they extend into the future.

On the assumption that those who are more certain of a prediction will bet on it, actual prediction markets have been developed. Prediction markets are not new, having been used to anticipate winners of presidential elections and Super Bowls. But now we have what have been called business futures, for forecasts on GDP and unemployment.

Check out www,cfo.com for more information on the subject.

Ideal Natural Gas

The U.S. has vast supplies of natural gas but refuses to fully develop them because of liberal political influences.

On the other hand, algae, bio-diesel, solar power, and wind are subsidized, but still will not be sufficient sources of energy. In twenty years, despite taxpayer outlay, almost 80% will still come from fossil fuels.

The U.S. is very fortunate to be rich in shale deposits in many parts of the country. Nevertheless, left-leaning politicians refuse to develop those riches. The latter can give us energy for the next century. while alternatives become more practical.

High-tax New York State and New York City are further examples: New York City’s watershed has natural gas deposits which have not been developed. Tax relief as well as energy solutions are overlooked by their left-leaning politicians who nickel and dime their citizens to meet ever-rising budget demands.

Dodd-Frank Bounties for Whistle-Blowers

The much-heralded, yet severely questionable Dodd-Frank financial regulation bill, recently enacted, has well over a thousand pages of do-good intentions. And lots of unintended consequences.

Take what goes for the awards that can be given to help the SEC uncover fraud from tips given with the offer of bounties.

It sounds good. Discover fraud and advise the SEC. You get a cash prize. It can be as much as 30% of imposed penalties and recovered funds. We’re talking millions of dollars.

However, with so much prize money available: How many employees will direct fraud for normal, conventional internal corporate correction, as is done in the vast majority of business all the time?

On the other hand: What pressures will ensue for internal corporate blackmail? How many frivolous suits by enterprising lawyers will commence, where corporations may be intimidated to settle?

Expect the Dodd-Frank regulation to open up a new sweepstakes for enterprising analysts who can image fraud in every balance sheet and every accounting footnote.

Recessions Continue with Dumb Politics

A lesson you do not generally get from the media:

Recessions are bound to normally happen. They are not the fault of capitalism. They are also remedied by free markets.

Only those who don’t understand free markets act in a way that prevent normal corrections from being made. And when normal corrections are not permitted, you get prolonged recessions and even depressions.

Left-leaning politicians force the hands of economists who should know better, and thus we get bailouts instead of normal corrections, which may include self-correcting bankruptcies. Worse, however, is the ongoing poor psychology that persists among the population, as the result of political machinations.

Knee-jerk higher taxation, to make up for lower government tax revenue, adds to the bad psychology that sustains these severe conditions.

And when you are really a dumb politician you add legislation that the majority of the public does not want, at a cost that imposes even more enormous taxation, plus budget deficits.

All of which assure raging future inflation.

Colleges Produce Dumb Students

It’s reported that only about 23% of 2009 high school graduates who took the ACT college-entrance test have the skills to succeed in college. Yet, everyone appears to get into some college or another. It is a harbinger of our future as a second-rate nation.

Most college-bound kids do poorly in math and science. About half flunk reading. About one third flunk English.

Forget about training more doctors so we can treat all the new patients the government wants to cover under ObamaCare. That will mean health coverage with second-rate medicine and medical practice.

Forget about scientists. We can watch them operate efficiently only in Hollywood movies. And other concocted fantasies.

But we can get more of the easy-stuff kind of college graduates. Such as political science whizzes, pesky lawyers and community organizers.

And lots of others with no practical work skills.

Gun-Shy Banks

Banks are conserving cash in a way they had not done in past, prosperity years. That is because banks are not making as many loans as they can. And it is hurting industry.

They find he demand is lower during a deep recession, but they are also gun-shy. They are afraid of taking on undue risk in a shaky economy.

As I have often mentioned, this is an indication of the failure of the Obama Administration to properly repair the banking system. They have made funds available to banks at practically no cost, whereby banks can produce enormous earnings by investing in U.S. bonds, instead of industry loans.

Environmentalists Affecting Our Economy

Everyone wants a clean environment, along with verdant forests, clean lakes and rivers, with abundant fishing.

Everyone also wants to protect living species to see that they continue to exist. We know that many fall by the wayside for various reasons, some having to do with human existence. After all, we must compete for living space.

Also: Everyone needs jobs for those who want to work. And they want cheap and plentiful food.

Somewhere, there has to be a distinction made, about which take preference.

An example: Because of fish we do not eat, and which are insignificant except to botanists who study them, we are suffering a severe water shortage and drought in the San Joaquin Valley of California. The shortage has produced conditions which sharply reduce fruit production and raise prices.

The only ones happy about this human disaster are environmentalists. They feel they have accomplished their objectives of saving for posterity that tiny, inedible fish.

Humans and the economy are the afterthought.

Why Companies Are Conserving Cash

By paying less dividends and not buying in their stock, companies are conserving cash in a way they had not done in recent years. That is because banks are not making loans. Furthermore, industry is afraid of higher taxes to come. Corporations have to sell stock or bonds whenever possible when they do raise cash. In the past, such funds were sourced from commercial banks.

It’s all hurting economically.

This is another indication of the failure of the Obama Administration to properly repair the banking system. In its attempt to clean up banking books, they have done two things:

1) They have made banks gun shy, afraid to make loans, and

2) They have made funds available to banks at practically no cost, so banks produce tremendous earnings merely investing in U.S. bonds instead of American industry.

This is especially true of the banks that “were too big to fail” and were bailed out. Many of the smaller banks cannot freely lend funds because of the tight rein put on them by their regulatory agencies.

“Giving Back” for One’s Business Success

It has become a cliche. Ask a wealthy business man or woman why they are contributing heavily to charity and you often get the standard answer which approximates, “I am giving back to society.”

This is nonsense. Unless the person has been an outright crook, any businessman has been successful because he or she has performed a worthwhile public, consumer service in a competitive free market,

The government does not fulfill consumer demands, not for long, or socialistic forms of government would consistently prevail. They have not. Private industry fulfills consumer needs.

Examples: The fact Henry Ford was successful at what he did, meant the customers also profited. What did he have to give back? What about Sam Walton of Walmart? If he offered lower prices the public loved, what did he have to give back?

Torts and the High Price of Medicine

A 2006 report in the New England Journal of Medicine said that 54% of the malpractice dollar went for lawyers and administrative costs. Also, many would-be clients could not find legal assistance because possible claims would not be high enough to warrant a lawyer to take a claim.

It’s obviously a poor system and needs correction. Yet, despite ObamaCare and left-leaning politicians who desired health care “reform”, nothing was included in plans to impose a correction to this malfunctioning medical tort system.

As evidenced by how the Swiss operate health care and medical malpractice, and noted in the past by me, it is possible for impartial judges to see that patients seeking redress are compensated when injured. Without fraud or hefty legal fees.

But lawyer political lobbies have made such reform impossible in the U.S.

Should You Buy Gold Coins?

I have in the past commented on gold as an inflation hedge because the Federal Reserve will be hard-pressed not to monetize the huge debt, and that’s bound to augment future inflation.

I have also commented on gold as an investment. Gold is a good holding in dire emergencies. Excellent in rare coin form, for example, for refugees fleeing catastrophes. But their value can be erratic and gold pays no interest if just sitting around.

I told readers to look at gold prices over the years. The price today is really not very much higher than that of the 1980’s. With simple compound interest, gold ought to be much more than what is today. At least 30% more, if held over the past thirty years. It’s big move has been only in recent years.

There are many ways to beat inflation. But if your decision is to buy gold, and you decide on gold coins, which do you choose?

Gold comes in different forms: Plain coins, rare coins, and bullion, all of which must be safely stored; with sellers, in bank vaults, or at home. That can be costly or entails potential theft.

Furthermore, there is a big spread between the price one gets when selling coins and one pays when buying, or the bid and ask prices.

My suggestion: No matter what the choice, select by coin condition, in addition to rarity. Condition is sometimes very subjective, depending on whether you are the buyer or seller, but it is a rule of thumb to keep in mind.

Minimum Wages and Union Wage Scales

When employers hire, they pay what a worker is worth. If he or she is not worth the minimum wage, the boss will not go for it. Whether that wage is $10 or $2 an hour. Raise the wage too high and it is more likely that employee will be priced out of the job. If an employee is truly needed, he or she will get what value that person has in the employer’s estimate.

Union contracts for higher-wage employees are always adjusted upwards from the minimum wage, so the employed on the top are the ones who truly profit from the minimum wage increase.

Potentially lower-rung employees, subject to minimum wages, often never get hired, because they have little skills and are thereby too expensive to employ.