Sunday, September 27, 2009

The Strange Rules of the FCC

CAUTION: this post contains words that might be considered offensive. In reality, you probably hear them every day. However, if you are offended, you might just have a career in the FCC!

I was engaging in my Sunday morning ritual of a cup of coffee (and some delicious pound cake, thanks to a friend) and enjoying the extra time to read up on the news when I came across this story - SNL newbie Jenny Slate evidently dropped the F-bomb. Horror of horrors!! What will happen to society now? Oh and will she be punished? Will the almighty FCC slap a fine on the station?

Now, you can argue that the children don't need to be exposed to the F-word. I'll agree with you on that, though I've heard a kid as young as 9 years old use it. But if you are old enough to be watching Saturday Night Live, I don't think the FCC needs to be protecting you!

Seriously, what kind of stupid farts are on this board? Consider this - you can call someone a "bastard" but not say "shit" on TV! Shit! I mean, I don't use the fucking f-word a lot, but I never realized "shit" had the power to corrupt!

Come on, we're grown adults here! You could argue what's appropriate for sporting events and music awards in prime time, but after 10 pm, I say bring on the fucking nudes! And let them cuss while they are going at it!

Friday, September 11, 2009

Why Comparing US and European Health Care is Misleading

Simple reason ... Americans are way too fat! Check out the national obesity statistics here. Americans are 3 times as fat as most European countries.

Government has a role. Removing corn subsidies that ensure high-fructose corn syrup in all our foods would be a good start. (Oh, and it would also reduce starvation in third world countries which struggle to compete on an un-flat agricultural market) Town planners incentivizing more walkable communities will help. More awesome farmers' markets, like the one in my city, will help.

I personally don't even mind a tax on unhealthy foods, although I don't think its implementable.

Thursday, September 10, 2009

The Intellectual Dishonesty of the Public Option

President Obama once again pitched for the public option last night and the mainstream media once again cheered. On the face of it, it is easy to be carried away. You can keep your insurance, or you can take the government plan. Sounds innocuous, right?

Wrong! The reality is that a public option is a lose-lose, unless you want a nationalized healthcare system.

For starters, even if the government plan is not subsidized by the taxpayer, it has several key advantages. One is that its cost of capital is much lower than any of its competitors, its debt being backed by the full faith of the US Government. The other is that since it does not have to make a profit, competition will kill returns in the private sector, driving us towards national healthcare.

Will we be able to keep the health plan we like? Absolutely not! Lets focus simply on the issue of those currently being covered by an employer-based health plan. If you are an employer, you can either buy health insurance from a private insurer, or you can pay a tax (if I remember the parts of HR3200 I read, it's in the vicinity of 8% of gross income)

If the government plan is cheaper, most employers will simply abandon providing health coverage and instead pay the tax. But we are not in the clear even if the government plan is more expensive. After all, this means that the clientèle for the government plan will dispropriately be the unemployed, individuals with pre-existing conditions, and other high-risk groups. That would make a government plan unsustainable (after all, the point of insurance is to spread risk, not aggregate the risky) Any bets that politicians would stay true to their word and allow a government plan to fail?

The mainstream media has bought this along traditional lines, and failed to do much analysis. It is easily to be carried away by the brilliance of Obama's oratorical skills, and by the extreme craziness from some on the right. But let's not get carried away - if the public option passes, we're coasting to a socialized medical system!

Sunday, August 16, 2009

Are Medicare Administrative Costs Cheaper?

One of the persistent arguments for a government health care plan has been the lower administrative costs associated with Medicare compared with government plans. This has been a contentious issue, with others arguing this is simply not true. Well, is it?

The American Medical Association reports that Medicare administrative costs account to 5.2 percent of public programs versus 14.1 percent of private programs. Aha, we'd all save money if we went to a public program!!

Not so fast, sport! The AMA points out to the unfair comparisons in those estimates. An excerpt:

Perhaps the most obvious shortcoming of many estimates is that they ignore unreported spending on administration of government programs. Such uncounted administrative costs are especially evident in the Medicare program and include:
• Tax collection to fund Medicare—this is analogous to premium collection by private insurers, but whereas premium collection expenses of private insurers are rightly counted as administrative costs, tax collection expenses incurred by employers and the Internal Revenue Service do not appear in the official Medicare or NHE accounting systems, and so are usually overlooked
• Medicare program marketing, outreach and education
• Medicare program customer service
• Medicare program auditing by the Office of the Inspector General
• Medicare program contract negotiation
• Building costs of the Centers for Medicare & Medicaid Services (CMS) dedicated to the Medicare program
• Staff salaries for CMS personnel with Medicare program responsibilities
• Congressional resources exhausted each year on setting Medicare payment rates for services

There are other methodological issues - follow the link above for more.

Saturday, August 15, 2009

Quote of the Day: Those Dirty Dirty Chevy Volts

I found this fascinating ... and actually rather logical when you think about it. If you haven't been hearing the buzz, the Chevy Volt is a new plug-in hybrid, that is its a car that runs on a battery that you can plug into an electrical outlet to recharge.

[Driving the Chevy Volt] won't be "petroleum-free" in much of the country -- because so many utilities use heavy fuel oil to generate that electricity. At current electricity-production levels, these plants emit as much as hundreds of thousands of cars on the road each day. If a few thousand well-meaning dupes plug a few thousand new Chevy Volts into electrical outlets (especially in urban centers), you could actually add millions of pounds of dangerous, dirty, unregulated pollution and carbon into the air we breathe -- possibly more pollution than would be offset by putting the Volts on the road.That's if the electricity grid can handle the added load. In fact, all across the nation, the grid is fragile, antiquated and maxed out.

Another reminder to watch out for green fakes ...

Hat Tip: American Public Media's Marketplace

Monday, June 15, 2009

Securitizing Health Care

As the health care debate rages, we are offered a series of poor choices due to our political system's inability for consensus. On one side is the growing chorus for a government plan. Seriously, have these proponents not been to a DMV? All the government plan will achieve is to exert Wal-Mart style cost pressures that will run private capital out of business. And what makes supporters think the government can manage such a program efficiently? The track record of Medicare is hardly inspiring - the program is likely to be insolvent in the near future!

On the other hand, it is hard to argue with the fact that we have a seriously broken system. One in six Americans is uninsured, in a system where the costs of being uninsured are more dramatic because of inflated prices. Many more are excluded from the system because of pre-existing conditions. And the system does not encourage healthy lifestyle choices or preventative medicine, because of the lack of long-term commitments from the patients in question.

Democrats are living in la-la land, ignoring the cost side of the balance and seeking to run capital out of the industry. Republicans, even worse, seem to think that sticking their fingers in their ears and yelling 'socialism' means that we don't have a problem that needs fixing. What's missing is smart ideas that, like all the good ones, straddle the middle.

So here's an idea to consider - and it's not even that original. For all the criticism of our housing boom, Fannie Mae and Freddie Mac have dramatically changed home ownership in this country by providing coordination. The US government managed to achieve much greater home ownership rates without running the program by supporting these agencies whose role was to buy mortgages, repackage them and sell them to private industry. Before the distortions in recent years, this meant low risk to the government, aggressive competition in private markets and, well, a free-market system that largely worked.

In concept, I can't see why this isn't a valid idea for insurance. You have a pool of, let's say 100 people, 50 of whom might be relatively young workers, 10 of them are over 80, maybe 2 of them have cancer, 15 have diabetes, ... you get the idea. By pooling them, and doing so on a large scale and only government can, you offer the insurance companies the ability to greatly increase market share, but only if they are willing to pick up the unhealthy insurees as well as the healthy ones.

There would have to be some controls to ensure pools stay largely the same (i.e. if you're in Pool A, you are highly likely to stay in Pool A) - this gives insurance companies the incentive to improve your healthcare metrics as a risk mitigation tool.

Just thinking aloud ...

Sunday, May 10, 2009

The Tests Aren't That Stressful

So the banks' stress tests were finally released, and it was received with much enthusiasm. $75B in new capital. Roger that! Now the stock market can boom, we can talk of all the green shoots we see ... life is beautiful! It's a fiction we all want to believe. I know I do. I have one of my best friends without a job, and tepid economic environment causes me some discomfort personally. Plus, the booming stock market can make me feel like investing guru ... the next Warren Buffet.

Maybe it's the pessimist in me, but I say hold on to your horses! My initial suspicions arising from the relatively small size of the capital requirements ($75B is peanuts in today's bailout world) are unfortunately being confirmed by a couple of disturbing pieces of evidence.

First are the assumptions of the stress test themselves. The "adverse" scenario assumes 8.8 percent unemployment for this year, and 10.3 percent next year. Umm, newsflash - unemployment is already 8.9%, and it seems like 10.3% next year should be the baseline, not an adverse scenario.

Then there is news that the Fed modified the deficit computations under pressure from banks. Bad move! If there's one thing Japan should teach us, it's that a loss of confidence can be incredibly detrimental to the recovery of the financial system. At this point, it feels a lot like the regulators are becoming salesman for the banks, while shoveling public money with no end in sight.

So be nervous ... while we'd all like the dark clouds to pass, things might not be as rosy as they seem.

Sunday, March 01, 2009

Add One More Scandal to the "Cleanest Admin Ever"

This time it's Obama's "urban czar". If the facts in this story are true, this is far more disturbing than any of the previous controversies. This does not appear to be questionable judgment or any such thing, but out-and-out pay-to-play Blago style.

Big Brother is Trying ...

This was one of the most disturbing stories I could have read in a really long time. There is a proposal at the federal level to start an enhanced drivers' license, with a built-in radio chip that can be used supposedly to reduce forgery. Even when you get past the national drivers' license program (which I know privacy advocates have screamed hoarse about but I've never really looked into), this is an amazing leap into our privacy.

Yes, officials argue it will only be used for authentication and not tracking. But really? How hard is it once a radio chip is embedded to track the license. It might start slow, oh let's say pedophiles or potential terrorists, but it is only a matter of time before that line moves.

This is far more significant than the wiretap program that got everyone's attention. I have no problems with the wiretap program as a short-term measure - if you are on the cell phone of a known terrorist or talking to a suspected terrorist abroad, well, maybe it's ok to listen in on your conversations. Again, a stop-gap - after all, if I happen to be some killer's insurance agent, my privacy rights can't be trampled on for too long!

But this is far more insidious. The government can, and if not stopped, will probably ease into various forms of tracking. Power exerts because it can. If this sounds like a grand conspiracy theory, it's not. What we need to appreciate, and I have to remind myself this all the time, is that what makes democracy work in the US is not that white people are instinctively more democratic (which a scary number of elites have suggested in one way, shape or form in relation to Iraq), not the climate, but those brilliant words of the Founding Fathers and those after, those amendments to the constitution that says, guess what, you have the right to privacy, you have the right to own a gun to defend yourself, you have the right to pray to the God of your choice, or not to pray, you have the right to become so insanely rich that you don't know what to do with it ... this is what defines America. She has no great history stretching eons, no unique language that can be used to whip up linguistic fervor, nothing ... but those words ... those words that have given you the right to do whatever you goddamn want as long as you aren't breaking any laws, insult whoever you goddamn want, participate in any fringe looney group as long as you don't break any laws. You start chipping away at that, and you start chipping away at America.

Sunday, February 22, 2009

The Fairness Doctrine

One of the items on the Congressional agenda is the Fairness Doctrine, where the Government would require broadcasters to provide equal time for both sides. While it sounds good at first listen, the Fairness Doctrine is, to borrow from the Jurassic Park movies, the dumbest idea in the history of dumb ideas!! First, the government mandating coverage flies in the face of the First Amendment. Second, who gets to decide if something is a liberal/conservative view point or a balanced view point? Some bureaucrat gets to decide if Wolf Blitzer is being a liberal or just a neutral commentator? Come on!!

It appears to me that if there is any place for the Fairness Doctrine, it should be NPR and PBS, which are directly funded by taxpayers. And yet, any unbiased listener recognizes that these organizations are loaded with liberals. Virtually every show at these networks, with the exception of the Newshour with Jim Lehrer, takes a decidedly biased view on the issues. Maybe we can start with dictating that such organizations need to be more balanced or lose taxpayer funding?

Full Disclosure: I listen to NPR and PBS extensively, and have contributed to NPR in the past. I have however decided against further support for NPR until their editorial content changes to present more view points.

The Peg is Here to Stay

Hillary Clinton urges China to keep buying US debt. I'm no economist, but does this signal a strong dollar policy with respect to the yuan? After all, the reason China buys US debt is to finance the US trade deficit with China. That deficit is an artifact of weak US exports relative to US imports. For China to continue to buy US debt, the trade deficit must be sustained, China must maintain the peg to the dollar, for if the yuan appreciates relative to the dollar, there are smaller deficits to finance!

Video of the Day: Santelli Goes Ballistic

Friday, February 13, 2009

Quote of the Day: Eric Cantor on the Stimulus Bill

House Republican Whip Eric Cantor (R-VA) on the haste in voting on the $800 billion or so stimulus plan less than 24 hours after being released. (If you're counting, it was released at 9 pm, contains 1,1419 pages, and is being tabled at 9 am, but what's a few hours between friends!)
Those in favor of speed over commonsense may just be afraid of letting the People know what they are ramming through.

Monday, February 09, 2009

What a Bank, What a Bank ...

At a time when it takes a little inner saint to not cuss at banks, I stumbled on a bank that actually makes the world a better place. Now, now, in this day and time, that almost seems impossible, unless you're talking of some international microfinance bank like the Grameen Bank, which isn't the type of bank you or I would necessarily do business with (although we might chose to give our charitable $ that way).

But skepticism step aside - here's the Shore Bank of Chicago. It's a bank formed with an express motive of achieving social and environmental goals while making a profit. Now, normally when I see something like that, I think it's a tired cliche every business now uses nowadays, but turns out the Newshour with Jim Lehrer did a piece on them. Watch the piece and become a convert!

Oh, one more thing - they currently offer one of the highest yields on online savings in the country! Make money and help disadvantaged communities ... God, I feel like Superman!!

Tuesday, February 03, 2009

The Daschle Fiasco Finally Ends

Today was not a good day for the Obama White House. Two candidates for senior cabinet positions resigning. But while much of the coverage has claimed the two resigned for "tax reasons", like this one, that's not quite true in Daschle's case. No one thought Daschle's tax problems were a dealbreaker - what was was that his appointment flew in the face of Obama's pledge to not hire any lobbyists.

As Time magazine reports:
According to the White House, the important thing is that Tom Daschle is not technically a lobbyist. "If you're not registered to lobby, you can't be a lobbyist," explains White House spokesman Robert Gibbs. And Daschle, the former Senate Democratic leader who is up for the top health post in the Obama Cabinet, never filled out the paperwork to register.

Of course that's baloney, since Daschle effectively acted as a lobbyist. From the Time article:
Daschle, for instance, was a high-paid "policy adviser" at Alston & Bird, a lobbying firm with dozens of brand-name pharmaceutical and health-services clients. "Senator Daschle focuses his services on advising the firm's clients on issues related to all aspects of public policy," boasts the firm's website. One of Alston's clients, EduCap, a nonprofit student-loan company that spent six figures lobbying to change federal loan laws, took Daschle on two cushy overseas trips, one to the Bahamas for a board meeting and another to the Middle East to meet with foreign leaders.

What's particularly disturbing about this, if you were swept by the Obama hype of change, is that Obama supported Daschle despite these facts, and trying to spin the unofficial lobbyist status. Turns out he's just another politician - who would have thought?

Adding insult to injury is that the WH now argues that this will be the cleanest administration to date. That's a bit like arguing that a thief who didn't mug his victim because a cop showed up isn't a thief after all!

Monday, February 02, 2009

Enjoy Stimulus Now, Pay Your $14,000 Share Later

Kevin Hastett wrote a incredible must-read piece on Bloomberg titled 'Enjoy Stimulus Now, Pay Your $14,000 Share Later'. Really, you must read it to understand the fiscal implications on your household budget are.

An excerpt:
Under President George W. Bush -- a big spender in his own right -- the federal budget deficit reached a record $455 billion in fiscal 2008, more than double a year earlier. Government bailouts of banks and other industries that started under Bush, and may accelerate under President Barack Obama, will help push the deficit toward that $1.7 trillion mark.

And just what does that mean for your personal finances?
If your family income in 2006 was between $75,000 and $100,000, the extra taxes that you will have to pay at some point in the future add up to about $14,000. If your income was between $100,000 and $200,000, your future tax hike will be about $28,000. If your income was between $200,000 and $500,000, then your future tax bill just went up by $90,299.

The longer the deficits last, the larger those numbers get. And all for what?

Wednesday, January 28, 2009

The Flawed Small Car Argument

More ranting about CAFE standards. I was thinking about a concept in transportation planning called latent demand. It goes something like this. A city determines travel times are too much in their community. So they build new freeways, wider roads, that in the short term reduce travel times. But people then start to buy property in areas previously considered too far from the city center, and kaboom, their travel times are back up where they were, or often higher!

That's the flaw in the implicit assumption that forcing smaller cars on the public is the solution to our transportation energy needs. You don't have to look too far from your circle of friends to realize the person with a new fuel-sipping Honda is more likely to take a long road trip than one who takes a gas-guzzling old pickup.

I'm a tree-hugger, and I want to see true environmental change, but this is not the way. In the end, for true progress, we have to get past the cliched simplistic solutions, and a solution not based in government but societal change of less consumption.

Monday, January 26, 2009

The Wrong (and Right) Way to Fuel Efficiency

I've been thinking about fuel efficiency standards this evening. The intent is to force auto makers to make more fuel friendly cards. Every automaker essentially has to meet quotas for fuel efficient cars. Especially as the economy worsens, new CAFE standards will kill the auto makers. With fuel prices so low, there is little incentive for the average consumer to chose to buy fuel sippers. Suddenly, the already delicately positioned auto makers may be left with huge inventories of small vehicles that they will have to sell at small, if any, profit.

Environmental advocates will protest that there is a need to reduce fuel consumption and greenhouse gas emissions. But really, even if we accept those goals, CAFE standards are the wrong way to go. They are the spineless politicians' way to avoid what is the truly effective solution - raise the cost of fuel! If fuel is more expensive, there is consumer demand for smaller cars (think a few months ago), and automakers will respond. This way, the government is not forcing them to make low-demand vehicles, but achieves the same result with a lot less economic pain.

Isn't it strange that politicians were complaining about high fuel prices and global warming at the same time?

Unlimited Calling, Text and Web for 50 Bucks!

Clark Howard reports on Boost Mobile's new offering - unlimited cell phone calling and web access for 50 bucks! Dang!! The downside is phone selection and accessibility (it's on the Nextel network) but 50 bucks includes not only unlimited calling and texting but also web access? Whoa!!

PS: International long distance isn't as cheap as calling cards, but it's certainly a lot cheaper than other cell phone companies. The rate to India is $0.30/minute, which in a bind is not shabby. Also, outgoing international texts are not free.

PPS: There is NO contract!!!