What's the Problem?

It's time to cut to the chase.  Why is health care an issue?  Are you, the average working class American, unhappy with your health care?  Unhappy enough that you want to completely change the system?  Do you really think the government can do a better job of managing health care?  Been to a post office lately?  Flown lately?  Yeah, the government has done a terrific job managing those "businesses".  The government is a bureaucracy.  Do you really want your health care to be managed by a bureaucracy? 

Other than those who do not have health care, is there a real problem with health care system?  What could possibly warrant the drastic changes the government is trying make?  Please, tell me: what is so drastic that we would fundamentally change health care for all working class Americans?

Don't throw the baby out with the bath water!  Wake up America!  This is not about health care reform for working class Americans.  This is another entitlement. 

Forced Contributions

I keep hearing how everyone in this country is entitled to health care.  If this is the case, then where does the entitlement obligation stop?  Why not give everyone in this country a house and a car.  Why stop there.  We could really boost the economy (of China) if the government gave everyone in the country a large screen TV.  Sound ridiculous?  Well, it is. 

This week has been a real eye opener.  In one short week, I have been referred to as a heartless SOB; more than the rest of my entire life combined.  All because I have taken a position against this entitlement that we cannot afford.  I have experienced first hand the hate that was being directed towards the CEO of Whole Foods.  I am by no means trying to put myself in the same class as the CEO of Whole Foods (I can hear the flames already); in my mind this guy is a Saint.  However, I do make a significant number of charitable contributions (thousands of dollars) for medical research every year.  I make these contributions willingly, because I recognize that as an American I need to give something back.  I choose to make these contributions.  There is a big difference between choosing to be charitable, and, having the government reach in my pocket and force me to be charitable.  Tell me, what is wrong with American's making their own decisions about charitable contributions?  Why does the government need to legislate charity (or entitlements)?  That is effectively what this administration is trying to do - force each and every American to contribute to a universal health care entitlement program.

I am empathetic for those that do not have health insurance through no fault of their own.  That said, what do we really think will happen when the American people are forced to contribute to universal health care?  Well, I can tell you what I am going to do.  My charitable contributions are going to stop.  They will have to stop.  If my taxes are increased to cover the cost of universal health care, then, my discretionary income will be dropping.  I will have to make a choice between changing my life-style, and, continuing to make my charitable contributions.  Why should I make those contributions?  The government is taking over the medical industry.  Its now their problem.  Think about it.  What do you think other folks in my situation are going to be doing? 

Those of us that are working class Americans are in a lose-lose situation.  The poor and those with less income are going to get a government entitlement.  The rich don't care how much health care costs; they can afford to buy whatever coverage they want.  Its the working class folks that are going to get screwed.  We are going to be stuck with the bill for this health care entitlement.  And, I am sure that the quality of my health care is going to go down.  So, I have to pay more to get less.  How is this universal health care thing good for working class Americans like me? 

I have worked for 20+ years to get where I am today.  I have earned every dollar.  And, I am by no means rich.  Yet, the government wants to take the very small amount of discretionary income I have, and give it to someone else as an entitlement.  So, tell me, what exactly did I spend 20+ years working for?

If the liberals want to donate their own money to a fund for uninsured Americans, then, I say go for it!  But, the problem is that they want to force everyone else to contribute as well. 

Why does this administration feel the need to force yet another government entitlement?

Morality? Seriously?

For those of you that have not heard, the administration just conducted a conference call with religious leaders to gain their support for the administration's health care program. The administration claimed that everyone (Every American) has a "moral obligation" to provide health care to every individual. So, the smoke screen is clearing. The intentions are now very clear. This is about health care entitlements.

Putting aside the whole separation of church and state thing. And, the reason that the colonies wanted independence from England in the first place. I am really surprised that the administration would turn to the church for support. Do they really think that church members have forgotten about the Democratic Party's stand on Abortion? What about the morality of Abortion? How can this administration be citing morality out of one side of their mouth, and liberal social policies out of the other? In particular, this President is going to probably be the one that appoints enough judges to the Supreme Court to ensure a very liberal interpretation of the constitution for many years to come. I'm sure we will hear how the administration does not really support Abortion. But, the evidence says something else. The judge that was just appointed to the Supreme Court seems to be socially very liberal. So, how can this administration and the Democratic Party on the whole be supportive of Abortion on one hand, and claim that everyone has a moral obligation to provide health care on the other?

While we are on the topic of morality, I would like to know how congress can continue, in good conscience, to vote themselves pay and benefit increases, when hundreds of thousands of working class Americans are continuing to lose their jobs every week. Isn't this a moral, or at least an ethical issue?

And, then there is the boycott against Whole Foods. I do not know who started this. But, I do know that a campaign has been started to boycott Whole Foods, because their Founder and CEO came out against the President's health care plan. If anyone had taken the time to investigate this properly, they would have found that the Whole Foods CEO has reduced his salary to a single dollar a year. And, he is donating all his stock option proceeds to charity. This is a perfect example of what happens when people act without thinking. Yet, these hate mongers from the extreme left have decided to do a boycott against Whole Foods. Get the facts, people! Do not act without thinking! If anything, we should be supporting the Whole Foods CEO as an example of what all corporate CEOs should be like. Think about it - he has made enough money and now he is giving back to the community. One more detail: the Whole Foods boycott is not going to hurt the CEO; it's only going to hurt the workers. If Whole Food's revenues drop, they are going to have to release employees. Do you see the real problem here? It's what my grandmother used to call "Penny wise and Pound foolish". All the Democrats can focus on is the Health Care Entitlements. And, they are determined to bully anyone that does not agree with them. That is why the administration is collecting the names of folks that are sending out emails criticizing the administration's policies. Rather than recognizing that working class Americans do not want health care entitlements, these folks are trying to silence the opposition to their plans. They are trying to ram the President's health care plan down the throats of average, hard working Americans. And, they will demonize anyone - ANYONE - who does not agree with them. Look at the example with the Whole Foods CEO. This is a guy that I would like to have representing me in Washington. This is a guy that seems to have Morals and Ethics. Clearly, this is not a guy that would be voting himself raises, when his constituents are losing their jobs.

Is the Democratic Party seriously claiming the Moral high ground on Health Care?

Isn't it ironic that the Democratic Party would be Pro-Choice for Abortion, but, not Pro-Choice when it comes to Health Care?

Health Care Kool Aid

If you were ever going to get involved, now is the time. It seems the Democrats are now positioning to use their majority in the House and Senate to "push through" health care legislation. It seems that the Democrats believe they have a mandate from the people to make this happen.

Why are the Democrats wanting to do health care reform? Its simple: there are approximately 45 million uninsured Americans. And, their goal is simple: provide affordable health care to those voters. You see, there is a certain segment of America that has given up on the American dream, and simply wants as much as they can get from the government. It's the "I'm gonna get mine" mentality. So, I am appealing to the rest of the Americans - the majority of Americans - who are not (I hope) just trying to get as much as they can, without earning it.

Well, other than those who do not have insurance, can anyone tell me what is wrong with the system we have today? I have a few points, but, I do not want to get stuck on these. Nothing is perfect. These are simply some areas of concern:

• Catastrophic Health Care - Insurance companies like to limit their liabilities. So, they limit the amount of care you can receive based on a cap on expenditures. For those individuals with Cancer or some other major illness, this can be financially devastating. Perhaps the government can provide a non-profit entity (like the FDIC) that provides re-insurance for those cases when expenditures will exceed the maximum life-time benefit.
  
• Other excuses for not providing coverage; like pre-existing conditions. Insurance companies use models to determine how much they should change, and still make money. By excluding pre-existing conditions, they are reducing their amount of spend. I think this should simple be illegal. Insurance companies should provide coverage. You should not have to have a law degree to figure out what is covered and what is not. Keep it simple.
  
• When a person leaves an employer, their coverage is terminated. Cobra is not affordable. In fact, many times Cobra is more expensive than what the same insurance costs the employee and employer combined. Perhaps Cobra could be modified so that the employer portion of the coverage is picked up by the unemployment insurance. And, the individual can just continue to pay the amount that was being deducted from their paycheck.
  

Again, I absolutely do not want this to become misquoted. These are issues that I see with the current system. And, you will notice that these are problems that face all Americans - not just those who are economically disadvantaged. All of these items can be fixed without the government having to raise your taxes by so much as a nickel.

My grandfather always said, "If it ain't broke, don't fix it". It looks to me like the Democrats have a single agenda, and that is to provide insurance to those who are economically disadvantaged. But, if this means that we have to spend 250+ billion dollars a year, then that is absurd! Take a look around. We are in the worst economic situation since the great depression. And, this thing is not over. Rather than trying to provide entitlements (yes, they are entitlements if the government has to spend money to make them happen), the government should be focusing on the still rising unemployment rate. People are not getting new jobs. Yes, the rate is not increasing as much as it was before. But, it is still increasing! To try to push through this kind of health care reform is completely irresponsible.

This administration has taken to the bully pulpit to try to get the momentum back on their side. They are trying to convince you, the average American, that they are working on your behalf. Do you feel like this administration is representing you? Do you feel like the congress is representing you? Is your health care situation really that bad? Do you want to go to a government run health care system, just so those who are not really contributing to the productivity of the country can have health care? Do you really think that government price fixing is going to work? After all, it worked so well in the former Soviet Union. In this last national election, I voted 60/40; because I believe in selecting the right person. And, I have decided that this issue is important enough to me, that I will vote against anyone that votes for this kind of health care reform. This means that the Democrat I voted for as my congressional representative will lose my vote! I don't expect it to come to that; I think my representative is one of the Democrats that understands the issues. Nevertheless, I encourage every other American to look at the facts. Don't be fooled by all the tactics designed to distract from the simple truths. Think this thing through. If this health care reform becomes law, we will be stuck with it forever.

Don't drink the Kool Aid!

Kash for Klunkers

Have you heard about this new government program?  Well, essentially, this program is giving automobile buyers an incentive to get rid of their old (and theoretically inefficient) automobiles.  The belief is that we can help the economy and the environment by getting old gas-guzzlers off the streets; while replacing them with nice shiny new American made cars.  Sounds like a great idea, huh?   Yep, its simple.  You just go down to the local car dealer, and they will give you a larger than normal trade-in for your old car.  And, the government will send them a check.  That's right - its free money!  Or, is it free?  Well, my grandfather always told me there was no such thing as a free lunch.  If the government is writing checks to automobile dealers, then, where are they getting the money from?  Well, the only source of income for the government is the taxpayer.  This means that the money is ultimately coming from the taxpayer's pocket. 

So, who is really getting the benefit from this program?  Think about this for a minute.  If you pay taxes, and you did not buy a new car, have you gotten any benefit from this program?  It looks to me like the only two groups, in general, that are benefiting from this  program are the automotive industry and the consumers who are buying the cars.  Isn't this really benefiting the auto unions and the lowest income earners?  Weren't these the two biggest supporters for this administration?  Well, it looks like their support is being rewarded.  It looks like this is yet another "Share the wealth" program.  Am I wrong?  Aren't we creating revenue for the automotive industry by spending tax dollars?  Isn't this a subsidy for lower income Americans, so they are able to buy new cars?  Aren't they going to get more benefit from this program than the middle class folks?  Seems like "Share the Wealth" to me.

I can hear all the counter arguments now.  "The automobile industry is essential to the American economy".  Oh yeah, what about all the other industries?  What about the hundreds of thousands of IT professionals that have lost their jobs because of outsourcing?  I don't see any "Kash for Komputers" programs out there.  Let me be clear, I am not saying that we should do a program for the IT professionals too.  My point is simple: you cannot save every industry.  Natural selection is the nature of capitalism.  If an industry is not keeping up with competition, then, it should become extinct.  The American car industry did not keep up.  Unions have driven the cost of labor to the point of non competition.  I'm not going into the auto industry rant again - see my "Horse & Buggy" post.  Nevertheless, why is the automotive industry is getting all this help?  We know the auto unions have provided an enormous amount of support for this administration?  Doesn't this seem just a bit "fishy" to you?  Sorry ... could not resist the reference!  :-)

Haven't we learned our lesson on subsidies?  Isn't this current economic mess the result of consumers buying things they could not afford?  When is the madness going to stop?

This program seems to be a shining example of the politics of the day.  If the administration was going to do something about the economy, by spending lots of "future tax revenues", I would think they should target a broader base of Americans.  This program (Kash for Klunkers) looks to me like a reward to this administration's supporters.  In general, I am not at all happy that the government is spending money it does not have.  However, if the government wants to spend money to address the economy, then why not put the money towards programs that have a broader impact?  For example, one of the biggest problems we (Americans) are having is unemployment.  And, this administration has been touting the number of uninsured Americans as a justification for their health care reform.  Why not kill two birds with one stone?  Why not provide health insurance to those that have lost their jobs?  If we are going to single out a group of Americans for "government aide", then, we should make sure this decision is not based on politics.  Unemployment is the biggest threat to our future.  The right thing to do, would have been to put government funding into providing unemployment benefits (including health care) for unemployed Americans.

Flag Away!

This post is in response to something posted on the White House website. I quote:

"There is a lot of disinformation about health insurance reform out
there, spanning from control of personal finances to end of life care.
These rumors often travel just below the surface via chain emails or
through casual conversation. Since we can’t keep track of all of them
here at the White House, we’re asking for your help. If you get an
email or see something on the web about health insurance reform that
seems fishy, send it to flag@whitehouse.gov"

<Takes a Deep Breath>

To say that I was shocked by this would be a gross understatement. I have been thinking about this for the last couple of days. I wanted to make sure I was not overreacting. Of course, the right wing talk radio folks are all over this; comparing these actions to those taken by Hitler in the days leading to World War II. I have also heard references to McCarthyism. After thinking about this for the last couple of days, I have concluded that this is one of the worst things this administration could have done. I will leave the other comparisons to those high paid talk radio hosts. I wish to convey the point-of-view of the average, disappointed American, who is now not sure just what kind of change this administration is really trying to bring to this country.

Let me start with the impact to civil rights, and the right of a US citizen to not be oppressed by their government. I thought the Democratic party was an advocate of civil rights, including the right for an individual to protect their privacy. Wasn't this the basis of the attacks on Bush 43? So, how is this any different from what the Bush administration did? In fact, in my opinion, this is worse. This was not about a unilateral policy that enabled the government to listen to our phone calls. This administration is asking neighbors to inform on neighbors. Think about it. Read what was put on the White House website. This clearly states that they cannot watch everyone; so, they want Americans to report the "fishy" behavior of other Americans.

Now, I am sure this administration will say that people (average Americans like you and me) are just overreacting. That, all they wanted was the content (the substance) of the arguments, so they can better prepare their rebuttals. Well, they clearly did not think this through; kind of like the New York fly-over with Air Force One. You have to think about human nature to understand this point. What is the easiest way for someone to forward the information, this administration requested, to the email address provided? Answer: you hit the forward button on the email program. Given the level of technical expertise this administration has with the Internet, how did they think people would forward the information to the White House? Doesn't this look like the intention was to get not only the substance of the emails, but also to have a record of who sent the email in the first place? This administration wants us to believe that this was the only way to get the substance of the emails. I reject this argument. It's called Google. Anyone on the planet knows that if you want to find something on the Internet, you just ask Google. So, the only logical conclusion is that this administration is not interested in the content of the discussions, but, rather, the participants in the discussions.

I have two previous posts on this blog concerning health care. I am asking questions, because as an American citizen I am entitled (according to the first amendment) to the answers. I am not willing to accept "trust me - this is going to be good for all Americans". I want to know details. Our elected officials need to remember that they are supposed to be serving the interests of the American people. And, as an American citizen, I take my responsibility to elect competent
leadership very seriously. This is why I want to know what is happening; so when it comes time to elect my leadership, I can make an informed decision. Perhaps I am being a bit paranoid, but it looks to me like this administration is trying to intimidate me into not asking questions. Its almost like they are afraid that if I ask questions, then others will start to ask questions. And, that once enough people start asking enough questions, public opinion will shift away from what this administration has worked so very hard to craft. What else could explain this administration's motivations for asking neighbor to inform on neighbor?

I am very disappointed in this administration. There are two ways to look at this: either this was yet another error in judgment, or, the intention was to make a list of those who do not agree with them. Neither of these are acceptable, and, this is certainly not "Change I can believe in". Why would this administration need such a list? The only logical answer is intimidation. It's bad enough that the government is listening to all our phone calls. But, at least the their purpose is to protect innocent Americans. This, on the other hand, is strictly political. How can this administration expect the American people to believe in what they are doing, if they are trampling our civil rights whenever they please? Of all the administrations, you would think this administration would be respectful of our civil rights. Instead, it looks to me like the same old nasty politics. Only, this time its worse. This time the administration wants to turn neighbor against neighbor. What happened to the promise of working together for America? Where these just words to get elected?

For those of you out there who are trolling the blog-o-sphere looking for blogs to turn into this administration, here I am! There is a nice convenient "send email" link on the top navigation for this blog. I have provided you with the email address - all you have to do is cut-n-paste. As a moderate independent (60/40 in the last election), I vote for the person that I think will do the best job. When we vote, we are essentially "hiring" our leadership. As an employer, I have a certain standard that I use to make sure I hire only quality personnel. I use this same standard when selecting who I will vote for in an election. I have suggested a number of things in my blogs that I believe would be beneficial to our country. And, I would love to have this administration reading through my suggestions and opinions. There are also a number of questions that I would still like answered on health care. So, flag away!

Health Care Entitlements

This is a followup post to the "Show me the Numbers" post on the proposed "universal" heath care system.

I cannot stress how important it is that Americans understand what is being proposed. Particularly, since I heard a member of the administration on CNBC this morning talking about how they were going to make health care more affordable by injecting competition into the
market. I do not want to repeat the entire "Show me the Numbers" post (you should read that one for context). But, I will repeat that competition is the only way to lower costs. Well, someone from the administration must be monitoring my posts (along with the thousands of
other folks blogging this issue - I am sure!). This morning, the spokesperson from the administration stated that they were going to lower health care costs by offering government health care as a "competitive" option. Now that is what I call a spin! The administration wants you to believe that by "giving" health care away, they are going to force other health care providers and insurers to lower their prices. They are disguising this entitlement as market
competition. This is a win-win situation for the administration. First, they get to do what they want to do: provide health care entitlements to a certain segment of the population for free. Second, they want you to believe that this will constitute competition for the rest of the health care industry. They need for you to believe that this will make everyone's health care costs go down. If you do not believe them, there is no way this legislation will get through. It is absolutely imperative that Americans do their homework on this issue.

Stick to the principals:

• Prices are lowered by competition, not by government regulation or spending
• Health care must not become another entitlement; any health care program must be run like a non profit venture or trust

The pundits are right, the Democrats are no longer a "tax and spend" party. The Democrats have evolved into a "borrow and spend" party. And, before all the Republicans start to strut around - this whole situation is your fault for losing the trust of the American people in the first place! If the Republicans had stuck to their fiscal conservative values, instead of trading them for "at any cost" social conservative values, we would not be in this situation.

The Democrats have figured out how to keep those voters, who are only interested in getting what they can out of the government, happy. And, they are going to be rewarded by votes that will keep them in office. Brilliant. Think about it, voters of today get the benefit, while the
voters of tomorrow get stuck with the bill.

Show me the Numbers!

Either universal health care is an entitlement, or it isn't.  And, if its both, then we can divide the argument into two parts and solve from there.  Now, I do not want to hear a bunch of "blah blah blah" from the folks who are trying to push their own political agendas.  Let's keep this simple. 

If health care is not an entitlement, then how do you think this is going to work?  Is this some kind of trust fund that we will all pay into and get some benefit?  Is this going to be an equal benefit for all participants?  Or, is this another "progressive" program where those who make more have to pay more?  If this is another "progressive" program, where some people will pay more than others for the same service, then, in my opinion, this is just another "share the wealth" policy; yet another entitlement disguised as progressive legislation.  And, I certainly hope that Americans will be able to find out; so, when it comes time for elections they can vote accordingly. 

If health care is an entitlement, then how do you think you are going to pay for this?  I do not want to hear talking points.  I want to see numbers.  And, I want them presented without all the obfuscation that is usually used to hide the real agenda.  Its simple.  Where is the money to pay for this entitlement program coming from?  I have heard that this will not have any new taxes.  Forgive me, but I find this hard to believe.  So, the government is going to have to cut spending some where else, if this program is going to be funded.  Since I sincerely doubt that congress is going to reduce their sizable compensations, I suspect things like Defense and NASA are going to pay the price.

Again, let's keep this simple.  Show me the numbers.  Where is the money coming from to pay for the health care program?

We are in a very serious economic situation, that was caused by consumers spending more money than they actually had.  I know - I know - it's not their fault.  But, that is another blog.  Back to this blog.  Why in the world is the government doing the same thing?  Did we not learn anything from this economic mess?

I've heard that this health care program will "pay for itself through a
reduction is costs".  Oh really.  I thought the only way to control
costs was competition.  That's what that high-priced college economics class taught me.  How is there going to be real competition if the government is involved?  Today, pharmaceutical companies have to compete for market share; just like any business.  It's this competition that will control costs. 

I've heard that the government wants to cap the amount of profit a pharmaceutical company can make.  Okay.  So, how do you think pharmaceutical companies pay for research?  Imagine what would have happened if we had started controlling pharmaceutical companies 30+ years ago?  We might still have some of those really nasty diseases.  There is no way the government can "govern" the pharmaceutical business, in order to control costs.  Regulation always increases costs - look at the empirical evidence.  And, for anyone to think they can regulate this industry without damaging the research and development efforts; they are delusional. 

Some of my best friends have died of cancer.  I donate money every year to cancer research.  And, I still do not think enough money goes into medical research.  If the government gets a hold of this industry, I predict lifespans will start shortening because of the inability to get new medical treatments. 

Yet Another Tax

For those of you who have not heard, the Republicans have proposed to start taxing your health care benefits.  Yes - I said the Republicans.  The Republicans are supposed to be the party that wants to reduce taxes; except for our health care.  For some reason, that completely eludes me, the Republicans have decided that taxing our health care will make health care more fair.  From where I sit, this is the most idiotic thing I have ever heard.  It's bad enough the Democrats are planning to raise taxes on just about everything else.  Why in the world are the Republicans advocating taxing our health care benefits?  Can someone explain this to me please?

I think this is one of the key reasons why the Republicans lost the presidential election.  If you recall, talk of taxing our health benefits surfaced a couple of months before the election.  And, this is right around the time that the Republican candidate began losing ground against the Democratic candidate.  Republicans are supposed to be the party of fiscal responsibility; at least they were before the Bush-Delay days.  I believe it is policies like taxing health care benefits that drove all the moderates and independents away from the Republican party.  And, if they do not wake up soon, those folks are going to stay away from the Republican party. 

The bottom line is that unless the public starts to let their government representatives know how they feel about having their health care taxed, your health care benefits are going to be taxed.  And, we will have the Republicans to thank! 

Call your Senators and Representatives today!  We are Taxed Enough Already!

What Growth?

I was watching CNBC this morning.  And, I heard someone (don't remember who) talking about how good the earnings for companies were going to be.  This individual was clearly excited about the prospect of the market going up as a result of earnings going up.  At first thought, it sounded like good news.  Then, I thought about it ...

Unemployment numbers came out today, and they were not good.  Yeah, I admit the number is getting smaller every month.  And, if we continue on this trend, the new unemployment claims should reach a pre-recession level some time at the end of 2010.  But, we also need to consider that these numbers are not realistic.  You see, the government, by virtue of owning the automobile companies, has effectively kept the unemployment numbers from growing by continuing to pump money into the two now bankrupt car makers (GM and Chrysler).  Think about it ... the government is still paying these folks (and huge salaries by the way).  Yet, the unemployment numbers are not getting worse.  The government is in a win-win situation.  They are keeping a large number of the folks who put them in power employed.  And, they are keeping the unemployment numbers from increasing.  This is great, right?  After all, its all tax payers money.

The reason I took the scenic route on this "rant" was because I wanted to talk about unemployment in context of earnings.  Have you noticed that a number of companies are reporting record earnings?  Haven't you wondered how this is possible?  Well, if that company cut a bunch of its employees in order to cut costs; that would be one explanation.  There are two parts to the earnings calculations: Revenue and Cost.  Growth is typically an increase in Revenue (either by real growth or price inflation).  In an earlier post ("Maximum Wage"), I already talked about what companies are doing to increase revenues, so, I will not go into a lot of details here.  The key point to be made here is that companies are still laying off employees.  Further, companies are not increasing revenue as a result of growth in the market.  If there is any revenue growth, it is because companies are increasing prices in response to increases in the prices of the raw materials they consume. 

So, why do we care?

Before you start buying stocks, you might make sure the company who's stock you are buying is not just increasing their earnings by reducing their workforce.  Eventually, they are going to run out of people to cut.  And, as more and more folks lose their jobs, the demand for products and services is going to drop as well.  So, the company's revenue will have to decrease because demand for products and services will have to decrease.  Its a vicious cycle.  Nevertheless, think very carefully before you invest your cash.  People want to hope that things are going to turn around quickly.  We know this from experience.  Hope will not pay your grocery bill.

Entrepreneurial Spirit

I was coming back from a trip last Sunday.  I had just gotten onto the parking lot van; after loading my own luggage.  Other customers were still boarding the van, so I sat down out of the way.  After everyone had boarded the van, the driver stood up and called out for parking tickets (the paper that tells him where we are parked).  Now, here is the thing: instead of coming back to the van to collect the tickets from each and every person, the driver stood in the front of the van making all the passengers get up and hand him the tickets.  This, after everyone was already seated.  Imagine 20 people trying to stand up in the isle of a van, in order to hand their parking ticket to the van driver.  Was this an example of good service quality?  Well, I can only say that if I were the owner of that parking lot, I would have had a serious talk with my driver concerning the definition of "service".  And, after a lot of reflection, I decided to post my thoughts.

To me, there are two kinds of people out there: the ones that will stand in the front of the bus making customers come to them, and, the ones that will go to the customer.  As an entrepreneur, if you are providing a service, you need to provide the service in the best manner possible; you need to keep the customer happy at all times.  Otherwise, your competition will do a better job than you, and, you will be out of business.  This is the impetus for providing the best quality of service.  But, I think it goes further than that.  I think there is an underlying mentality that we are dealing with in this case.  And, I think this kind of mentality is changing (or at least impacting) America. 

Lets look at this example from another point of view: the driver's point of view.  From his point of view, he did not see any reason to take the extra steps to collect the tickets.  From his point of view, the customers should bring their tickets to him.  This mentality is what I call the "Entitlement" mentality.  This mentality is what I believe has infected America; threatening our ability to continue to be a global economic competitor.  This driver was not willing to take the extra steps necessary to provide quality service to his customers.  He essentially wanted his customers to come to him.  It was all about him.  This is not the entrepreneurial spirit that made America the hegemonic economic power that it is today.  Rather, the driver felt he was entitled to his compensation whether he provided quality service or not.  And, with this kind of mentality, the driver is going to do the minimum required in order to maintain his compensation.  He clearly did not believe that providing excellent (or at least better) service would provide him with any additional career opportunities.  Again, he was simply doing the minimum required to maintain his existing compensation. 

Imagine what America would be like if everyone had the same mentality as this parking lot van driver!  Imagine an America where the majority of the population is not interested in providing a quality service; they are only interested in doing the minimum required to maintain their compensation!  Are you starting to get scared yet?

American Banks

If you put your money into a bank, what do you have to look forward too?

• A very low interest rate
• The potential that the bank may go out of business

When
you put your money into a bank, are you expecting to have this money
put at risk? People put their money into banks because they do not want
to take big risks; they want their money to be secure. That really does
not work if the bank takes the risk (with your money) anyway. Not only
is the bank taking big risks with your money, they are paying managers
huge salaries and bonuses. For what? Making bad loans? Taking huge
risks with your money?

The real issue is credit cards and other
"retail" debt. Retailers want to be able to make sales to customers
that do not have the money to make the purchase. And, they also do not
want to take the risk of loaning that money to the customer directly.
Hmm - let's think about this again. What, are we stupid?! I am sure it
makes perfect sense to a banker that wants to keep getting his/her
million dollar bonus. But, is it really fair to the American people,
who are going to get stuck with the bill for those who have spent money
they do not have? The biggest irony is that the retailers shift the
risk to the banks, and the banks shift the risk to the government and
ultimately to the American taxpayer. Clearly, if certain American
taxpayers did not spend money they did not have in the first place, we
would not be where we are today. Then, there's the accountability; if a
retailer wants to sell something to someone who cannot afford it, they should be the ones taking the risk - not the American taxpayer!
So, what is the answer? Well, let's keep it simple ...

Americans needs some place to put their money where:

• The money is 100% safe (insured)
• They will be paid a fair interest rate
• Their money will not be put at risk - forcing the government to bail out the bank if the bank's management makes bad decisions
• The bank is not paying huge salaries to its management while only paying depositors a ridiculously low return on their money

Here's
a thought: why not have banks that are only allowed to make certain
stable investments with depositor's money? These banks could be 100%
insured by the FDIC - this would be less risky than the banking model
today, because the banks would not be taking on risky loan portfolios
(e.g. credit cards and other unsecured debt). If banks take deposits
from American taxpayers, they should have a responsibility to use the
money in a way that will ultimately benefit the depositors directly,
and the American public in general.

So, why not have Deposit Banks and Credit Banks?

Horse & Buggy

Why don't we still ride around in a Horse & Buggy?

I would like to think it is because the Horse & Buggy was replaced by something else, as society evolved. Imagine what would have happened if the Government had kept the Horse & Buggy going just because a bunch of Unions organized a large voting block for a particular political party. I realize this sounds like Republican rhetoric. And, I apologize to all my independent and moderate friends out there. But, I am trying to make a subtle point here. So, what if the Government had kept the Horse & Buggy alive?

Well ... I think we would have kept the people of the times employed. But, we would also still be riding around in a Horse & buggy.

Sometimes natural selection determines when a technology or company should go the way of the Horse & Buggy. If the government continues to intervene just to protect a certain block of the voters, then we are going to be in serious trouble. Society is going to give up on trying to realize the American Dream. And, they are going to just sit back and wait for whatever the Government will provide to them. That, in my opinion, is not what made America great!

We need to maintain our meritocracy. We need for all Americans to continue to strive to be better each day. This is what made America great - not an entitlement based socialist society.

Let me ask you a different question: Do you own auto maker stocks? Would you have bought auto maker stocks on your own? If not, why not? Guess what?! You, as an American taxpayer, are now a part owner in the auto makers. That is, the government took the risks with your money, that you would not have done with your "own" money. Essentially, since no one would put up the money to save the auto makers, the Government reached into your pockets, and gave the money to the auto makers.

Doesn't this bother anyone else?

I suspect this post will get flamed. But, I had to get this off my chest. :-)

Maximum Wage

In this time where class warfare is on the rise, I think there are a few things we need to keep in mind. 

First and foremost, I want to remind everyone that Congress routinely gives themselves automatic raises.  We (in this country) already have a minimum wage.  So, why not a maximum wage?  Why not tie all the congressional raises to the minimum wage?  That is, Congress does not get a raise unless the minimum wage is raised.  We can set this to be a fixed multiplier on the minimum wage.

I find it ironic that Members of Congress (on both sides of the isle) are chastising corporate executives for their bonuses and perks, and, yet, these very same Members of Congress are getting automatic pay raises.  Isn't this a double standard?  In economic times like these, everyone is focusing on Wall Street.  What about the Members of Congress?  Do we really know how much money is being spent by these folks?  It seems to me that we need to start reigning in Government Spending.  It seems to me that the Government should be setting a good example - they should not be spending money they do not have.  Isn't this really what has put the country in the trouble we are in today?

Now, lets think about the "rich are getting richer and the poor are getting poorer" mind set.  America is the land of opportunity.  That means that some of these folks are going to be lucky enough to be running a Fortune 100 company.  Not very many - but a few.  The key concept has always been (as communicated to me by my parents and grand parents), you get what you earn.  If you want to work your way into a better paying "job", then, you need to work hard enough to achieve that goal.  The thought that the Government is supposed to provide everyone the same opportunity seems to fly in the face of this concept. 

On the other hand ... when a corporation is not providing its employees with cost of living raises, at the same time the company is giving CEOs and Executives huge salaries and bonuses - something is just not fair.  This is the real problem.  How can we have a meritocracy that rewards hard work, that will also protect these hard working folks against corporate greed?  How can we eliminate the double standard by Government - shouldn't they take pay caps and cuts like the rest of the "average" Americans?

Just my two cents ...

Green Taxes

I am very much in favor of a gasoline tax to fund tax breaks for companies that make electric cars.

Let's face it - Oil is not going to last forever. And, electric cars seem to be a very good, green alternative. I know - I know - the electricity has to come from somewhere. But, as we Americans begin to endorse greener ways of generating electricity, I believe that problem will resolve itself. Consider this: if everyone had some way of generating green electricity - say - putting solar panels on their roof. Imagine all the electricity that could be generated if entire neighborhoods were using solar electricity generators! And, if a household just generates enough electricity to charge the battery in their electric car, then we have managed to take all of those carbon emissions out of the system. And, if we make sure that all the technology used to build solar panels and electric cars is American, we can help the economy to boot.

Now, before the right wingers start accusing me of being a tax and spender, let me say that I am not talking about putting these green taxes into the general fund. I do not trust the government not to divert that money to something else in future. Rather, any green taxes should be put into a trust fund such that the funds can only be used to fund green project start up costs (infrastructure, etc.).

So, how about it America? Can we invest a few cents per gallon to ensure our future energy independence?

Outsourced Social Security

There was a proposal by some to hand the management of Social Security over to private investment organizations.

If this proposal had been accepted, imagine where we would be now? Actually, I'm not sure it makes much difference, because the Federal Government is getting stuck with the tab for all the sub-prime mortgages anyway. But, that aside, there is clearly something wrong with the way the banks have managed risks for the last three or so decades. Does it make sense to try to outsource Social Security to a broken financial system?

By the way, if we were to outsource Social Security, we would have to borrow even more money to keep the Federal Government going. Its called cash flow ...

Democracy at Work

California had a state-wide referendum on Gay Marriage. This is Democracy at work. The public voted not to allow Gay Marriage. Now, I feel the need to say that I do not live in California. Nor do I have any opinion on this issue - not For and not Against. My key point here is that an election on this issue was held, and, the people have spoken.

So, what happens after the vote?

The lobby for Gay Marriage decided to take their arguments to the Federal Government. Their intention being to force the state of California (or it seems any state) to accept Gay Marriage. What does this say about our democracy? What does this say about America? Doesn't the constitution protect State's Rights to make their own laws?

Americans have a well deserved reputation for "not liking being told what to do". It seems to me that the right way to do this is to allow all states to make their own laws for things like Gay Marriage. That way, an American who feels strongly about a particular issue (like Gay Marriage) can move to a state with a similar ideology.

America is a collection of people with different cultures and beliefs. The strength of our country has always been our diversity. A key component of our diversity has been our ability for States to set their own social standards.

Now, on to the concern. If a State has a referendum on an issue, and the issue is defeated, it is simply not right to try to get the Federal Government to overrule the State's Right to pass laws regarding the issue. The people voted against the issue. What happens to Democracy when the Federal Government overrides the State's Rights? It seem to me that the advocates of the issue would throw Democracy out the window just to have their own way. Give me a break! There was a referendum. The people voted. Live with it, or move to a State whose citizens share your points of view. That is the best thing about America: Diversity.

So, there are two aspects of the issue:

• If we have a vote, is it right to overrule the vote when it does not go the way the minority wanted it to go?
• Should the Federal Government be entitled to overrule the State's Rights, when the State has practiced Democracy by having a referendum?

Catashtrophic Healthcare

What is the real health care issue?

Catastrophic illness that is not covered by insurance companies.

Why don't insurance companies want to cover catastrophic illnesses? Its simple; catastrophic illnesses are like hurricanes: they cost the insurance companies a lot of money. Like hurricanes, catastrophic illnesses can have large impacts on the insurance company's cash flow. If the company's cash flow is too significantly impacted, they could miss their profit goals. And, in this case, executives for that company could lose a significant amount of money (compensation is usually linked to company performance). So, rather than take the risks, insurance companies prefer the easy money. They just want to provide insurance, where they are assured to make money.

All companies need to increase their earnings (profits). This means they either have to increase revenue or reduce costs. Reduced costs mean reduced quality for products (in some cases), or, reduced services for the same cost. Likewise, revenue is increased either by raising prices, or, by increasing market share. So, if a company is arbitrarily trying the increase their profits, then there is a good chance that consumers are going to be the ones that ultimately pay the price. Growth in profits without growth in market share is always going to lead to inflated prices for consumers. Simply put, consumers are getting less for their money. This is my definition of inflation.

In most cases, stockholders are not the ones that benefit the most from increased profits - the company's executives are the ones that benefit the most. And, the customers who are paying for products and services are the ones that benefit the least. This is a classic example of how the rich are getting richer and the poor (or middle class) are barely getting by. Companies increase their profits, which increases the amount being paid to top executives; increasing the gap between the rich and everyone else. But, I digress. I simply wanted to point out that perhaps insurance company executives are not motivated to provide the best service for the best price. Rather, they could be motivated by their compensation, which is linked to the profitability of their company.

Is this really the way a health insurance company should be run? The role of an insurance company in society is to provide the public with some degree of financial protection against unforeseen events in their lives. If you think about how much more benefit an insurance company could provide to consumers, if they were not paying executives so much money, its almost depressing.

Perhaps there should be a nationalized insurance company for catastrophic healthcare. In general, I am not for government intervention in the free market. However, I think my example here makes it clear that the only ones that are really benefiting from the current situation are the executives of these companies. I would much rather have a federal civil service organization managing a catastrophic heathcare trust fund.

Tell me what you think ...

How about American Banks?

If you put your money into a bank, what do you have to look forward too?

• A very low interest rate
• The potential that the bank may go out of business

When you put your money into a bank, are you expecting to have this money put at risk? People put their money into banks because they do not want to take big risks; they want their money to be secure. That really does not work if the bank takes the risk (with your money) anyway. Not only is the bank taking big risks with your money, they are paying managers huge salaries and bonuses. For what? Making bad loans? Taking huge risks with your money?

The real issue is credit cards and other "retail" debt. Retailers want to be able to make sales to customers that do not have the money to make the purchase. And, they also do not want to take the risk of loaning that money to the customer directly. Hmm - let's think about this again. What, are we stupid?! I am sure it makes perfect sense to a banker that wants to keep getting his/her million dollar bonus. But, is it really fair to the American people, who are going to get stuck with the bill for those who have spent money they do not have? The biggest irony is that the retailers shift the risk to the banks, and the banks shift the risk to the government and ultimately to the American taxpayer. Clearly, if certain American taxpayers did not spend money they did not have in the first place, we would not be where we are today. Then, there's the accountability; if a retailer wants to sell something to someone who cannot afford it, they should be the ones taking the risk - not the American taxpayer!
So, what is the answer? Well, let's keep it simple ...

Americans needs some place to put their money where:

• The money is 100% safe (insured)
• They will be paid a fair interest rate
• Their money will not be put at risk - forcing the government to bail out the bank if the bank's management makes bad decisions
• The bank is not paying huge salaries to its management while only paying depositors a ridiculously low return on their money

Here's a thought: why not have banks that are only allowed to make certain stable investments with depositor's money? These banks could be 100% insured by the FDIC - this would be less risky than the banking model today, because the banks would not be taking on risky loan portfolios (e.g. credit cards and other unsecured debt). If banks take deposits from American taxpayers, they should have a responsibility to use the money in a way that will ultimately benefit the depositors directly, and the American public in general.

So, why not have Deposit Banks and Credit Banks?