The Federal Reserve’s Effect on You

                    

Far too many Americans are not concerned about Federal Reserve activity. They ought to be because it affects their pocketbook and those of their children and descendants.

                       

A lesson: When the Fed buys bonds it creates reserves for the banking system, which, in effect, creates paper money or credit. When times are bad and business has no full use for that credit, the Fed’s action is useless. But once a recovery takes place, all that paper money that’s been created, translates into inflation.

                       

When the Federal Reserve sells bonds it tightens the money supply but once the barn door has been opened, the escaped horses of inflation have taken over the economy. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Health Care Tips

An Institute of Medicine study concludes 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 ObamaCare to remedy what can be easily done?

                       

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 pay-offs by having malpractice tort reform. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Health Care Insurance Ideas

                   

Private insurance for all is possible, if the pool is large enough. To do this, states and the federal government must break down the barriers they place on insurance companies. Permit the sale of health insurance across state lines. Despite thousands of pages of federal legislation, it isn’t possible.

                       

Make private health insurance groups thus 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.)

Media’s Role in 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, genetically modified foods, global warming/cooling emergencies, 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.)

Pass Laws With a Cost-Benefit Provision

           

Before any act of Congress becomes law, an agency such as the Congressional Budget Office ought to provide an independent analysis of its cost and proposed benefits. Not what comes from the political proponents alone.

                       

And when it comes to tax cuts, that is the reduction of tax rates, an idea of the true reduction in tax revenues, if any.

                       

Pro-tax politicians view all reduction in tax rates as a

reduction in tax revenues, which is false, based on past experience. Estimates of future tax revenues due to tax rate cuts should be estimated as best they can, but including a factor that is now entirely omitted by pro-tax politicians.

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

A Part-Time Job Retirement Aide is Recommended

                       

Most retirees will need an added income, possibly from a part-time job or a small business, in order to survive retirement.

                       

If folks are still not aware of what’s in store, here is the bad news. Social Security was never a bonafide insurance or annuity program with genuine reserves set aside in what politicians called a lockbox. It was closer to a Ponzi scheme.

                       

Prospective retirees never paid in enough to secure benefits at the outset and the arrangement was for the retirees to be paid by funds contributed by those still working and being taxed. Any effort to make it a genuine insurance/annuity was hammered down by Big Government politicians.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Too Many Small Businessmen Don’t Earn a Minimum Wage

                   

This merits repeating:

                       

If you allow for capital placed at risk in a business instead of safer investments elsewhere, and you consider time on the job by the boss and unpaid members of the family, most small businesses actually return very small income to their owners.

                                           

In too many instances the actual earnings translate to less than the legal minimum wage, were they employees. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

ObamaCare Lacks Tort Reform

               

Malpractice lawsuits induce defensive medicine that costs a fortune for insurance companies, the doctors and other providers covered and, ultimately, the public. Yet ObamaCare overlooks tort reform.

                       

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 over $200 billion a year.

                       

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: Over 90% of tort lawyer political contributions go only to the Democrat party. This accounts for the fact tort reform is never one of the necessary benefits the consumer gets. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Inept Government Cost Reports

                 

When politicians tell you how much cheaper it is for a government to offer you health insurance or other services, they intentionally leave out some important facts. These omissions would get private companies sued and their officers thrown into jail.

                       

The government numbers do not usually tell you which of the government overhead or operating costs are being covered by others, and not by the reporting agency. So you never get strict comparisons between private company and government operations.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Entrepreneurial Needs

                   

You who read my blogs and comments are familiar with my suggestions, you know I feel that everyone should be in at least a part-time venture as an entrepreneur.

                       

I do this in order for folks to supplement basic education about business and potential careers, and possibly to add to needed income.

                                           

I also advise that many entrepreneurs do not get ample returns on any funds they invest, nor for the actual time they devote to their work.

                       

There is no conflict in my reasoning. Everyone cannot be happy at a job from an employer or will they want to work for a boss. And so there must be a secondary source of income at all times, even after official retirement.

                       

Moreover, being an entrepreneur serves as an education you simply cannot learn in school at any level, even as an M B A grad.

The knowledge can also lead to a big payoff down the road in spite of the odds. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Too Many Small Business Owners Earn Less Than Minimum Wage

I recently wrote about the problems of operating a small business while politicians use businessmen as targets for class warfare.

                       

To repeat the facts:

                       

1) Many small businesses are constantly on the edge of going broke; a large percentage does go under each year.

                       

2) Most small businesses do not provide sufficient return on the capital invested. For every $100,000 they ought to get a $10,000 return for capital risk.

                                           

3) The business man should also get paid for time on the job, often ten or more hours a day. This translates into very little, well below the minimum wage.

                       

4) Those who buy a small business by borrowing have to repay the loans with after-tax dollars. I find that in most instances this is done only by taking away from honest returns on personal investment and time spent.

                       

However, the boss/entrepreneur often actually earns less than the minimum wage. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Over-Taxed Small Business

                   

The typical small business man or woman is highly taxed by politicians who accuse them of being “greedy.” Why should they not pay their “fair share” of taxes when they have been so fortunate to be in their own business?

                       

Some facts:

                       

1) Many small businesses are constantly on the edge of going broke; a large percentage does go under each year.

                       

2) Most small businesses do not provide sufficient return on the capital invested. For every $100,000 of capital placed at business risk, the owner ought to get at least $10,000 a year for the risk involved. This is hardly ever the case.

                       

3) Above the return on risk capital, the business man should get paid for time on the job, often ten or more hours a day. This translates into very little, well below the legal minimum wage for ordinary employees.

                                           

Those who buy a small business by borrowing have to repay the loans with after-tax dollars. I find that in most instances this is done only by taking away from honest returns on personal investment in the business and the personal sweat running the business. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)