Severe Medicaid and Medicare Problems

Congress created Medicare and Medicaid in 1965, Politicians kept expanding benefits, while talking about controlling costs. Yet costs kept skyrocketing.

This couldn’t happen in private business because of the likelihood of bankruptcy. But government intervention prolonged losses and made matters much worse and expensive. As long as taxpayers continued to pay the bills. Eventually enormous amounts have been paid.

This same government failure, as we see with fraud-infested Medicare and Medicaid, is on the menu with ObamaCare. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Taxpayers Are Paying Outlandish Athlete Salaries

The Left complains when a "rich" top executive gets more than a million or so a year of “taxpayer=protected” income. What about a ball player who hires no one, who makes ten million and more a year? And may actually be a loser?

Remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding. It adds up to the same total outlay.

Yet, many ball parks are subsidized in some way by government, and thus the fungible funds are being used to pay grandiose athlete salaries.

(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Why Not Give Tax Breaks for Private Health Insurance?

Nothing the government does is truly cheap, except quality, when you total up the direct and indirect costs. ObamaCare health insurance never will accomplish what it intends to do.

One suggestion: Tax employer-provided health-care benefits but return this money to employees in the form of tax deductions, to buy their medical insurance as they buy home and auto insurance.

That will make insurance transferable and keep workers on their jobs with coverage. You will then have health-insurance security and portability, along with personal independence.

And even more competition among about 1,500 insurance carriers. With lower health insurance costs. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Management of Institutional Investment Portfolios

Large investors such as pension funds, foundations and major mutual fund managements, often critique the management of companies in which they invest.

There are two schools of thought about the solution. The main idea has always been that you do not buy or retain ownership of securities in firms whose management you do not like.

Investors who actively promote their influence in making managerial changes often have another motive. They often are more interested in takeovers and active management.

Furthermore, it takes a lot of nerve and arrogance on the part of outside investors who think they can micromanage because they have a large stake in a company. They may make better use of their time elsewhere.

Sure, they may want to look for over-zealous salaries and bonuses and for fraud, but that should be all. Good general corporate performance is what they should seek. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

     

Compare Socialist Theory and Capitalist Realism

Realism: Socialism always ruins environment. As evidenced in Soviet Russia, China and communistic Eastern Europe. Capitalism has invariably treated the environment as an asset for future use.

Socialist countries use capitalist principles only to bail them out of dire economic disaster after socialism fails.

Even in so-called socialist countries, it’s capitalist principles that countervail socialist errors. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Why Are Budget Deficits Dangerous?

Government wasteful spending is more than a waste of money. Excess spending that produces budgetary debt causes even deeper recessions than we would have. In fact, I have repeatedly reported that so-called stimulus funds have actually been a political slush fund, doled out to “friendly” recipients. And that independent study has shown actual overall job losses while the “stimulus” was applied to mainly help certain states balance their bloated budgets.

Remember the Soviet Union with its periodic Five Year Plan stimulus efforts and their notable lack of success?

Budget overspending will do to us in the future what it is doing to Greece and several other European countries today. (See the Earl J. Weinreb

NewsHole® comments and @BusinessNewshole at Twitter.)

Liberal View of Oil Price Increases

The Liberal left-wing political drill: Every time the price of oil and gasoline goes up, call for a congressional hearing and put oil company CEOS on the grill.

Of course, the results, after all the political hoopla, will be the same. The politicos find nothing, despite all their efforts. The media get their headlines and stories. But the facts will be overlooked--again.

The oil companies pay an effective tax rate of 39.8%, much higher than most corporations, far too high in an industry where exploration is so necessary and so expensive.

Facts: Oil prices are determined by expectation of future long-term oil production. Supply and demand for oil play an important part, and the left does all it can to reduce supply. So the left-induced Merry-go-Round goes on and on. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

What is a Real Stimulus?

Further to what I said recently about a real stimulus to revive a depressed economy:

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A stimulus ought to be a genuine job generator. Experience shows it should work quickly and be practical, not effective after the eventual, recovery would have occurred. After all, there are frequent normal cycles in an economy.

Moreover, a real stimulus will not change the country’s political and social infrastructure. To many politicians, a stimulus is the hope of political opportunity.

The stimulus should not be an excuse to provide political payoffs. A stimulus is not supposed to promote voter turnout or change the form of government. And it certainly should not cause inflation to endanger our children and grandchildren in the future.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

A Real Stimulus Or Merely Bogus?

A stimulus planned during a recession must act quickly, if it is to be practical. It’s supposed to stimulate the economy with minimal cost.

Any government really fully aware of how to stimulate a morbid economy would institute a quick tax cut on all types of income; that always works, Tax cuts on interest and capital gains, also.

Corporate tax cuts are tremendous boosts to an overall depressed economy especially when most foreign country rates are much lower than those in America. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Why Not Cheaper College Tuition?

There’s no reason college cannot be cheaper; that is, if colleges were under pressure to really try to reduce costs.

Take a study done by Christopher Matgouranis, Jonathan Robe, and Richard Vedder, a Professor of Economics at Ohio University, and the director of the Center College Affordability and Productivity group.

Reporting data at the main campus, at Austin of the University of Texas, the study says tuition fees could be cut in about half by asking 80% of the faculty with the lowest teaching loads to teach half as much as the 20% with the biggest loads. The top 20% now cover 57% of the teaching.

Many professors simply do not teach but spend time on research, much of questionable utility. Also, student-teacher ratio standards make little sense, while college bureaucracies are in need of major cost-saving overhauls and streamlining which can reduce tuition levels even more. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Reimbursement for Securities-Adviser Errors?

I have no sympathy for advisers who often charge clients for services the clients may well do themselves. But why sue such advisers who have no crystal ball and who cannot see if an investment will turn down?

And yet many pension funds do sue advisers who could not see a downturn in the mortgage markets a few years back.

This lacks common sense on the part of the funds’ clients, other than a ruse to collect money from any source available. So why not sue, hoping a judge and jury will not be conversant with how legitimate securities markets work in real life? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Importance of the Job Interview

1. I started and helped operate a profitable major employee- contracting business for 17 years. The work varied from ordinary clerical, to nurses and physicians. Lots of suggestions get thrown about on the important subject of securing a job.

Let me tell you one that makes more sense than others I see being professed in the media as the best.

Try this job interview technique with a prospective employer AFTER the interview: 

Now that we have had our discussion, do you have any reservations about me that you would like to have me explain or answer?

That helps get into any problems that may be about to stymie your efforts.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

A Regulatory Moratorium?

A suggestion that the vast majority of Americans are not thinking of:

           

There should be a year’s moratorium on all new federal regulations until an independent audit can be arranged to evaluate what we now have.

I can guarantee the U.S. economy and political system will not spin out of control. But we will get a handle on duplications and such inanities as spilled milk on farms being treated as “oil spills.”

And while we’re at it, an audit of the massive Federal Register to reduce it’s ridiculous size. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)               

   

Politics and State Budgets

The media often gets aroused over Wall Street’s salaries and bonuses. Government salaries get only slight attention.

While we know about Uncle Sam’s spending these days, state and local outlays are also beginning to get commentary because severe budget problems are a tremendous source of problems for all states and cities as well.

I am referring to exorbitant pensions held by millions of active and retired state and local public employees. These include city managers, teachers, cops. garbage collectors, guards and others. They represent at least three quarters of public employees who have what is called defined-benefit retirement plans.

They have the ability, unfortunately, to organize voters and thus control politicians who keep adding to taxpayer burdens until there are not enough taxpayer funds to go around for the feeding frenzy to persist. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Inflation and the Economy

A 2003 report by the Federal Reserve calculated the effects of government debt and its impact on long-term interest rates. It was done before the current deep recession and weak “recovery” and the efforts of the Administration.

The report concluded: "A percentage point increase in the projected deficit-to-GDP ratio raises the 10-year bond rate expected to prevail five years into the future by 20 to 40 basis points. Similarly, a percentage point increase in the projected debt-to-GDP ratio raises future interest rates by about 4 to 5 basis points."

In other words, the effect of inflation in the form of higher interest costs.

Inflation induced by heavy deficits does not arise rapidly during a recession, but it jump-starts once recovery gets going. Then it quickly gets out of hand.

All the theory economists use as remedies get stymied by politicians who know the medicine will cause economic belt-tightening. Those remedies will be over-ruled by political considerations.

The Greek debacle is the perfect example of what happens when belt-tightening is avoided too long. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                       

The Wisdom of Crowds?

The assumption that the masses can be correct may arise from a theory that there is a certain wisdom in crowds. There has been some limited research on this to explain how a form of futures market can explain how the public could predict future election winners.

Practical results from the use of such theory has been non-existent. No real futures market has ever resulted from past attempts to implement such theories.

The problem here is that if crowds were prescient, there would be no booms and busts and no economic manias as have existed over past centuries. All securities markets would then be predicable.

On the contrary, evidence over the years suggests the opposite; crowds are invariably wrong. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Institutional Investors Are Usually Poor Corporation Managers

Why should mutual fund managers and other institutional investors intimately direct corporate management of the companies in which they invest? That function is far different from their job of selecting securities. They have little time or the ability to attempt to get too close to be involved.

I know that the job of an investment manager is to pick good corporate management. But that can be superficial at best. To truly evaluate what is good or what is bad management takes lots of on-the-site inspection and knowledge with which fund managers are not equipped. They may say they have that ability, but that would be mostly conjecture.

Despite this, there is a constant clamor from groups, usually with little business acumen, who insist that institutional investors, including mutual fund managers, micro manage each and every investment they make. That is an impossibility.

Another reason I suggest investment in funds that track indexes.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Stimulus Tricksters

Funds removed from one pocket and placed into another pocket of your pants, is the same money. The amount is the same, no matter what pocket it comes from.

In the same way, money can be substituted from one pocket of government to the other, to hide the source of funding. It adds up to the same total outlay.

What the government in Washington called stimulus funds, for the most part, became slush funds. for use by its politically-preferred state governments. These states used the money, to a great extent, to help balance budget deficits.

The reason state budgets are so out of hand can be attributed primarily to their unionized pension obligations. It is estimated this is a major, ticking financial time bomb, waiting for more government bailouts under various guises.

Taxpayers who cannot recognize stimulus sleight of hand will be taken as suckers again. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Loss of Going to College

Colleges have financial motives to admit dumb high school “grads.”. The U.S. Department of Education statistics indicate that three quarters of high school students who graduate in the bottom 40% of their classes still get to attend college.

Most never graduate college, though they may spend as much as eight years, and more, in school. And, they often leave in heavy debt.

What is more, few of these students get jobs that ever require a college education. Their efforts simply waste precious time and money. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Medicare, Medicaid and Social Security Prospects

By 2050, Social Security, Medicare and Medicaid, will take up nearly the entire federal budget. By 2080, Medicare alone will comprise the entire federal outlay.

There will have to be drastic corrections done by our politicians but many, primarily on the left, prefer to defer taking on the problem. It does point up government stupidity today, created for us, our children and grandchildren.

The left has made a bankrupt system for us and our descendants. Solutions can only involve less services, reduced benefits, rationing and higher taxes, as well as inflation we have never experienced before. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Is College Education an Unneeded Luxury For Many?

The college system does more for colleges, teachers and staff, on balance, than it does for a large portion of their consumers.

Only 40% of two million college freshmen graduate in four years; 45% never graduate. And graduates are ill-prepared for careers.

Forget about education. The experience helps parents boast that their kids went to college, and it does the same for the dropouts themselves. They generally never have to mention whether they ever did earn a degree or job skills.

Or whether their major was medicine or “communications,” or a form of physical ed. Whatever the major, it frequently fails to prepare a student for a worthwhile job. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                             

Are Government Regulations So Essential?

Politicians on the left maintain their gospel of government regulation. It is a mantra so often repeated that it’s a rule by which they govern. But all it does is provide power for them to dispense largess and thus control voting blocs.

Regulations destroy small business which cannot cope with them. They therefore appeal to large corporations which detest them, but, unlike small business, have the funds to hire lobbyists who can contend with the government bureaucrats.

Dodd-Frank is a perfect example pf legislation which builds an ever-festering self-generating nuclei of ever-growing regulatory bodies, none of which have ever been approved by voters. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

How Green The “Green” Environment?

The Federal Trade Commission has been looking into charges that many products are not truly “green.”

A whole profession of “green” experts has grown, having been trained by colleges, which are now marketing environmental courses and specialties. All based on the premise that our planet is being savaged by polluters and greedy merchandisers.

The FTC has slowly come to the conclusion that many who are promoting these progressive “solutions” to the perceived environmental problems are, themselves, deceiving the public.

Their “green” products and services may have little to do with improving the planet. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Health Care Misconceptions

An Institute of Medicine study concluded that about 40% of premature deaths in the U.S. are due to bad behavior. Only about 10% are because of poor medical care.

Social and physical environment contribute about 20% to the premature death figure and genetics 30%. So why take a wrecking ball such as ObamaCareto remedy to what can be done easily?

Give people without insurance who cannot afford it free insurance vouchers, and see that everyone gets insurance, even if not currently insurable.

And finally, and most importantly, put a cap on insurance payoffs by having malpractice tort reform. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                               

   

Some More ObamaCare Suggestions

The administration contends that only government can offer lower-cost insurance for the non-insurable.

Private insurance for all is possible, if the pool is large enough. To do so, states and the federal government must break down the barriers they place on insurance companies.

Permit the sale of health insurance across state lines. To this very day, despite thousands of pages of federal legislation, it isn’t possible.

Make private health insurance groups large enough to spread risk.

And immediately legislate tort reform, including mandatory arbitration by special courts to process patient claims. This would eliminate huge legal fees, over and above a reduction in needless tests and doctor malpractice premium charges. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

       

Why Media-Assisted Panics?

America has always had its share of catastrophic financial panics and urgent business problems. Many were brought on by special concerns and, occasionally, special interests. Follow the money or political trail and you get to see the inception of each.

Some examples: DDT poisoning, generically modified foods, global warming, killer bees, mad cow disease, over-population concerns, ozone holes, toxic tampons, the y2k disaster, and so on.

All of these were or are still problematic or ill-conceived but are media-swept and promoted to produce a frenzy among their proponents, (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

ObamaCare Urgently Needs Tort Reform

Malpractice lawsuits induce defensive medicine that costs a fortune for insurance companies, the doctors and other providers, and ultimately you, the public. This is a fact ObamaCare conveniently overlooks.

A Massachusetts Medical Society study found that five out of six doctors order procedures and referrals that amount to about 25% of total medical costs, for the sole purpose of doctor legal protection. According to the Pacific Research Institute, defensive medicine wastes more than $200 billion a year.

Therefore, the entire medical-malpractice system has to be changed. There could be a no-fault system, a pool to reimburse those injured from medical errors or accidents. Judges would be medical experts, not inexpert juries, who are swayed by sharp trial lawyers, seeking one third of the proceeds. The no-fault pool would be funded by a small tax on health-insurance premiums.

The major problem to this simple solution is that over 90% of tort lawyer political contributions go to the Democrat party. This accounts for the fact tort reform is never one of the necessary reforms the consumer gets.

(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

           

Hollywood’s Faulty Business Script

What Hollywood and other fiction contributors have to say about business and finance unfortunately extend beyond entertainment, They have become ingrained education. A substitute for our formal schooling system which has become an expensive taxpayer and family budget farce.

The media’s subtle hype adds to this imposed fictional education; it has accomplished this over the years.

What comes out of Hollywood and fiction is therefore anti-business. It features pro-plaintive lawyers, fighting criminal big business executives, on behalf of “little guys”. The templates may vary slightly but the plots are much the same.

Left-leaning politicians see their opportunity from all this and orate and demagogue and legislate accordingly. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Swiss Health Care Compared to ObamaCare

The Swiss health care system is worth noting. The American public can use its example to repair parts of our imposed ObamaCare coverage.

It’s more efficient and will eventually cost less than what we now have.

Under the Swiss plan, everyone is covered by private insurance. There is no government-managed or employer-provided coverage. The poor are assisted in buying the insurance they cannot afford.

Employees under a U.S. plan could receive in cash, tax free, what their employers currently spend on premiums, provided they used the money for insurance on health care. The poor, including past Medicaid recipients, would get government vouchers to buy insurance. There would be no discrimination against anyone on account of existing or past illness.

The plan would not socialize medicine as does ObamaCare. True interstate competition among insurance companies, hospitals, and doctors, would bring costs down over time.

Patients could really choose the best and lowest cost providers on the basis of published outcomes. Insurance companies and providers would bid for clients and customers, as to needs and cost.

The government's role would merely be to oversee transparency, The government would create an information system, with regard to insurance companies and providers. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Retail Gasoline Price Changes

Gasoline prices are set within OPEC supply controls which adjust to demand. They also are affected by the value of the U.S. dollar.because they’re priced in dollars.

Gas stations actually have little to do with pricing. Stations earn an average between 10 and 15 cents on a gallon. When prices climb, gas stations see their profit margins shrink in order to remain competitive; they then earn less per gallon.

Their credit card fees are about 2 ½% of all purchases, a significant factor affecting their margins.

Furthermore, gasoline prices go up faster than they go down. That is the way supply and demand normally influence wholesale and retail gas pricing. Yet gas station operators usually are blamed when high gas prices occur. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Climate Change is a Political, Not a Genuine Scientific Argument

  The Left would prefer that there be restrictions on industry under the premise of climate control, despite apparent scientific doubts and the uncovering of a scientific hoax. There has been little if any climate change in over fifteen years.

How much has the left’s position to do with actual climate and how much with the in-gathering of taxes, with which to implement other purposes?

The main goal of the Left is always to control government, to accomplish whatever the Left wants to achieve.

But other so-called international polluters won’t agree to do what the U.S. is asking its citizens to do. They say we ought to tighten our pollution belts because of our past industrialization. China and India, are only starting at the industrialization game. They want us to give them some slack.

But the U.S. says China/India are going to pollute hereafter with a vengeance because their populations and industry are growing much faster.

Apparently our left-leaning politicians will eventually concede to Chinese and Indian thinking. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)