MedPuddle

September 25, 2011

Leadership and Intention

When people share the same intention pyramids can be built and large banks can fail. Intentionality does not always flow from leadership. More often leadership flows from intention. Like Moses leading the Jews from Egypt, Gandhi led a billion people to their freedom with humility and grace. Yet, Gandhi said that he was led by his people. Oracle is the dominant company in its space with a near $150B market cap, yet no one would accuse it’s founder/CEO Larry Ellison of being humble. It’s my humble opinion that leaders are almost arrogant about the intention of their belief, whether that’s politics, religion, business or freedom. Their intention, or the intention of the group is either to impose their beliefs on others i.e. pyramids, or to persuade others that their intentions are worthy of others to follow or possess, i.e. Christianity or Oracle. But a passionate leader must never hijack the intentions of the group. Effective leaders share the group’s intention, they invite participation and closeness to the intention, they themselves humbly open their arms to the group and say, “show me how to help you achieve our shared intention.” The success of the group, the achievement of the intention MUST be shared by all.

Which may be why no one on Wall Street has gone to jail for the mortgage securities “fraud” that led to the financial meltdown: the intention of opening up the opportunity to less or unqualified buyers to experience a part of the American Dream (home ownership under the Community Reinvestment Act) was born by the government, enabled by Freddie and Fannie and packaged and sold by the investment banks. Because the banks were simply the conduit through which government’s intention was channeled, it’s difficult to pin the failure of the system to a few Wall Street firms.

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August 18, 2011

How Is Taxing the Wealthy Fair?

Filed under: The People Problem — DoNP @ 9:02 am

What is fair? If I live in the same country, enjoy the same freedoms, the same security from our military, police and fire depts; if I have access for my children to the same public and state schools, libraries and national parks; I travel the same roads, highways, airports, and railways, and I’m going to get the same Social Security checks, the same Medicare and whatever other entitlements the government deems I need (whether I actually need them or not), how is me paying more for that fair just because I’ve earned more?  Maybe I’m a gifted artist or I studied long hours while my frat bros were drinking themselves sick and I graduated with honors, got a better job, took a risk and went to work for YouTube or Broadcast.com when they were in a garage and got a few stock options, or I’m a savvy corporate manager and I worked long hours and devised great strategies and negotiated great deals for my firm and was rewarded with bonuses that they didn’t give others who weren’t as creative, didn’t put in the hours that I did, or come up with the great strategy.  Now, you say it’s my responsibility to pick up the tab for the people who didn’t work as hard, put in the time, create the cool code or design the great device?

I know there are some in our society who are truly poor, have no hope, need medical care, food and financial support. And I believe these people should be helped by those of us more fortunate. However, I loathe the notion that life is a zero-sum game, that my good fortune is just that, that I’m the lucky bastard who just happened to be in the right place at the right time, or somehow I tricked or fooled people into giving me more money, or that I used some nefarious means to gain my advantage and that I did all of that by taking it away from those less fortunate.  Fair?  What is fair?  Fair is I pay the same thing everyone else pays for the stuff our country provides all of us equally…that’s fair.  If you want me to provide for you because you didn’t, wouldn’t or haven’t, I say, that’s not “fair.”  Why should I work that hard just to give it to people who didn’t?

August 3, 2011

Medicare Cuts and What They Might Mean

Filed under: Healthcare — DoNP @ 11:12 am

On the table during this super-committee super-meeting will be the Medicare cuts enacted as part of the Deficit Reduction Act of 2005 (it’s like deja vu all over again). Providers are due for an across the board cut of some 29 percent  based on the Sustainable Growth Rate  (SGR) of ~4 percent per year.  Congress hasn’t had the stomach to allow the annual ~4 percent cuts to go into effect, each year delaying them through some legislative maneuvering.

Should a large cut to Providers get passed, those who cannot afford to operate within these cuts will respond by either dumping Medicare patients altogether or by going non-par (non-participating) with Medicare.  Like Mayo Clinic, hospitals and doctors have the ability to decline the Medicare reimbursement schedule and bill the patient for the full amount of their services.  The patient pays the bill and then gets the Medicare reimbursement to offset their cost, paying the difference out-of-pocket.  The provider gets what they believe is proper value for their service and the patient gets what Medicare thinks it’s worth.  The provider must decide in advance if they are accepting the Medicare amount or not and disclose to the patient their non-par status.  Cutting fees to Providers doesn’t save money.  It either encourages them to do more marginally necessary procedures to make up for their loss of revenue on any one procedure or worse, they stop doing certain necessary procedures because it would be unprofitable to perform them.  Rural clinics will force people to drive into to town to get things done, independent imaging and testing facilities will shut down.  Providers will not purchase the latest technology, the best tools or even attend classes that provide them with anything more than what they minimally need to maintain their licenses.  Family practitioners, who are today barely getting by (there’s already a shortage and there’s no wondering why when the average earnings are around $150K per year) will simply go to the hospital and take whatever they’re offering in the way of a salaried position.  Then, the AHA will have accomplished what they’ve been trying to do for the past 15 years…the hospital (or it’s corporate owner) will be the source of all healthcare from cradle to grave and administrator, not doctors, will decide what you get and when you get it…and you and the government will pay higher rates for everything because Medicare has been swindled by the AHA into offering the hospitals about 30-40 percent higher reimbursements than it pays to independent physicians for the exact same procedure.

July 29, 2011

The “UnAffordable” Care Act

Filed under: Uncategorized — DoNP @ 6:40 pm

As the President postures to place the blame for the debt ceiling catastrophe on Republicans, the Centers for Medicare and Medicaid (CMS) issued their report on the economic impact of Obamacare or more officially, the Affordable Care Act. While the ACA may offer coverage to some 30 million Americans who cannot afford traditional health insurance and allow many to qualify for Medicaid who did not qualify before, the cost to our nation may well be beyond our means to pay for it.  It’s no wonder Tea Party’ers are holding the the debt ceiling hostage in exchange for meaningful spending cuts; but one has to question the liberals who say that the spending surge was really a Bush-era mishap inherited by Obama.  Clearly, the chart attached demonstrates that, beyond the $787B American Recovery and Reinvestment Act, introduced in 2009 AFTER Obama took office, supported and signed by him, and this unwieldy health spending bill, disguised as the AFFORDABLE Care Act, Obama is spending our nation into oblivion.

 

July 28, 2011

How to Remain Cynical in a World of Toothy Smiles

Filed under: Uncategorized — DoNP @ 2:27 pm

For at least 30 years I’ve considered myself and have mostly voted republican. Ideologically, I believe in less government rather than more government. I believe the private-sector is better at running a free-market system than government would be. I altruistically believe that the poor, weak and infirm who don’t have families to help them should be helped by the states, cities and locales where they live, not a behemoth federal government with no close connection with those people or with the communities in which those people live.

Cynically, I believe the dems have offered no meaningful immigration reform because they depend on many of those immigrants for votes. Cynically, I believe that Obama has alienated small and medium-size business and the community banks because socialism can only succeed when there is a true proletariat class, which explains his penchant for inciting class warfare. Unlike other recessions in America, small businesses are for the first time not leading the way out. Small business has no access to capital, no REAL incentives to hire (i.e. minimum wage laws and the Affordable Care Act). Unlike large business small companies cannot sell stock, bonds or commercial paper to raise money. The GOP may understand capitalism but they are particularly blind to business formation and innovation. Small businesses and business owners are not large campaign contributors. Republicans fight to keep government regulations from impeding business expansion without recognizing that repealing or extending regulatory action tends to help larger, established businesses at the expense of more flexible, agile small business who better anticipate regulatory change or moreover, often are in the business of fomenting that change (i.e. Tesla Motors, Brammo). But worse, they seem as blind to the march toward socialism in America as Obama thinks we citizen are. While Obama happily congratulates GM on their recovery, they still owe us taxpayers billions. Bernanke favors the 12 largest banks with QE’s 1&2 (what were the commissions and bonuses paid to buy back all of those bonds and T-Bills?), concentrating wealth even further into the largest Wall Street banks who just 3 years ago required nearly a $1T bail-out and are principally responsible for the mortgage and housing mess.

It’s my opinion that the only epidemic in our country worse than obesity, is ignorance…and I don’t mean of government…I mean us. We cannot throw off those leaders who have brought us to this point if all we’re going to do is hand the job to the next toothy smile in line. We need a strong voice, intelligent, large, cohesive and passionately committed to real, long-term and abiding change. I don’t have all the answers but I know many of the reasons…and agree that BOTH parties have taken the road that best serves them, and not us. But we are now in the age of “crowd-sourcing.” Unlike our forefathers we can convene at Internet Speed whenever and wherever we choose. For now, I leave you with this excerpt called the “right of revolution” clause:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

July 27, 2011

Raising Taxes: Now or Ever?

Filed under: Politics and The Economy — DoNP @ 12:58 am

‎@All of you who think raising taxes is a good idea:

People who earn more than enough to pay their bills usually save and invest that money. Money that’s not handed to the big banks by Bernanke, is money that’s saved by those people and those businesses who earn a profit, usually AFTER they’ve paid their income taxes (albeit with loopholes). Taxing away a portion of these savings or profits will not hurt the individual taxpayer or company…their lifestyles won’t change at all. What does happen is that money will come directly out of the bank savings account, mutual funds (which are actually investments in business bonds or stocks) it will remove capital from venture funds that create companies and from private equity funds that promote the creative destruction (see Joseph Schumpeter) that our free enterprise system depends on for the constant upgrading and renewal of our business sector. Sure, wealth is being concentrated among fewer people and within fewer companies…that’s because the engine of commerce has been in reverse or at best in neutral since our boy Obama took office. Sure, he inherited a mess from Bush. But he’s done little if anything to promote small and medium size American business since he’s taken office.

Middle class America NEEDS a surge in small business to win the war against many things, the concentration of wealth, the lethargic jobs market and the exportation of jobs and wealth by our largest corporations. The only way to shift wealth is to take market share from the biggest companies who now have most of it. In the 90’s Apple had to borrowed $150 million to convince Microsoft to port Office 98 to Mac. Now Apple’s market cap exceeds Microsoft’s.

Do you have an idea for a better iPad? For a better, cleaner fuel, for a safer, faster car, bike, scooter or plane? Do you have an idea for a better search engine, social network or Facebook game? Need money to get that idea off the ground? Tax more and see how much more difficult it will be to get your idea moving. Have a small business but need to buy some new equipment to make you more competitive with the knock-off from China? It’s nearly impossible to get a loan now. Tax more and see how much easier it becomes.

July 17, 2011

Class Warfare: Get Ready for the Long Battle

Democratic super PAC Priorities USA, taking a shot at republicans, said in an ad this weekend: “We cannot rebuild America if they tear down the middle class.”  Exactly WHAT are they referring to?  This bellicose mantra will pervade the airwaves until the 2014 elections.  The middle class is under siege, not from conservatives but from the global economy.

Today the USA and the EU represent approximately 40 percent of global GDP while India and China are around 12 percent.  By the end of the decade India and China will be on par with the U.S. and the EU.  Our middle class will need to be retrained, reeducated, redeployed in enterprises where the U.S. can compete.  No longer will factories and the smokestack industries of the 20th century define our working class.  Innovation, development and intellectual property will define us in this century.  Liberals hold on to the notion that we just want to put things back the way they used to be, but that’s not how we will compete in the global economy.  Sadly, our government is not willing to give the American people a dose of this new reality.  Until they do, the middle class will sadly suffer.

June 23, 2011

Re-Post: Is Obama Dividing the Nation?

Filed under: Politics and The Economy — DoNP @ 3:30 pm

I was asked by a commentor to this blog why I felt Obama was dividing the country.  The commentor’s point was that things are grim but not that grim…that foreign investors can’t foreclose on America’s debt and that debt as a percent of GDP is no worse than it was coming out of World War II  Here’s my response:

I’d say it’s a little disingenuous to compare the immediate post-World War America with today’s situation. We aren’t funding a world war (although you could argue that $900 billion in Iraq is a whole lot of cheddar) and we won’t have the lurches in technology, innovation and productivity that came in the 50 years that followed WWII. Because today more than 50 percent of America’s debt is in the hands of foreign investors, dumping say a couple of $100B of our treasuries could result in lowering our bond ratings and causing our debt service to go up, while it’s already 10 percent of all government expenditures. That was not the case in 1950. We bought savings bonds and funded our government debt with investments by Americans, not communists. We have 10 percent unemployment, which is why even the most conservative estimates of near-term economic growth fall flat. Without that revenue base, the growth won’t come.

Small business creates 60 percent of all new jobs. Yet, businesses that can’t float commercial paper or sell bonds or stock, can’t raise money. Bank regulators have put the clamps on community and regional banks, raising the hurdles for small business borrowing. With companies like CIT out of the equipment lending business, small business has to rely on general assets and long-term historical performance to persuade banks to lend to them. The abysmal lack of consumer confidence, and the turmoil of the past 3 years, has had a deleterious affect on small business balance sheets. This presents a hurdle for banks or even private equity. Banks and leasing companies want 3 year operating histories with positive EBITDA’s. Only profitable firms can attract private equity.

Something has to break the cycle and our people and our government seem divided on how to do that. Obama has the role of bridging the divide. Leaders take on that responsibility. No one expects Obama to pull a “Kirk Gibson” but we expect him to try. If Gibson had gone down watching a third strike go by no one would remember that day. Fans would have pilloried Lasorda for putting a hobbled Gibson in to pinch hit. Although I did not vote for Obama he is our president. At a time when our country is mired in bipartisan politics, exacerbating the unrest of a confused and divided electorate, he stands at the plate watching the pitches go by. He may not be dividing the country put he is surely failing to bring it together.

Here are just a few things I believe Obama could take a swing at although he would have to accept the risk that comes with leadership:

  1. He could propose to extend the FICA withholding tax to include all income on the employee contribution rather than capping it at it’s current $106K. Cap the employer contribution, uncap the employee portion. This taxes the highest paid people who won’t miss the 6.2 percent.
  2. He can propose to raise the eligibility age for Medicare to 70 for anyone with an income of $100K or more or assets of $3 million or more.
  3. He can propose to raise the early retirement age for SS to 65 from 62 and raise complete eligibility to 68.5 or 70 from 66.5. When SS was conceived, the life expectancy of men and women was about 8-10 years less than it is now.
  4. He could expand the SBA micro-loan program to businesses with at least 1 year of operating history so long as the borrower has sufficient collateral.
  5. Half of all NIH funding should be redirected from pure research to the development of actual products. RIght now, almost all funds are going to projects within research universities where it funds interns and graduate researchers. Higher education tuition has increased some 60 percent in just the past 5 years while incomes have actually declined. We’ve killed the space program that produced things like the transistor and the integrated circuit. What is governments’ role in research anyway? Celera did with $300M what NIH couldn’t do with $3B.

President’s are remembered for their leadership, not for their politics. How will Obama be remembered?

June 17, 2011

Barack Obama: Unity president or great divider? – Jun. 17, 2011

Filed under: Uncategorized — DoNP @ 8:55 am

Barack Obama: Unity president or great divider? – Jun. 17, 2011.

Obama hosts a Whitehouse picnic while our country faces a most critical crossroads. With rising debt strangling our economy, millions who want to work can’t find it.  While small business has no access to capital, the fed feeds the biggest banks trillions to buy Treasuries that fund government spending.   The big banks then sell these notes to foreign investors (making the bankers rich with commissions) while we mortgage the country’s future to Russia, China and other nations.  America is becoming the sub-prime borrower, leveraging us beyond our capacity to pay.  Let’s hope the world doesn’t foreclose on the U.S. they way it has decided to pull the carpet out from under Greece.

May 19, 2011

The USA’s Role in the Middle East

Filed under: Politics and The Economy — DoNP @ 9:27 am

Theocracy capitalizes on religious fundamentalism to control a people.  Although it may seem to be in our best interests to see totalitarian governments in Egypt, Libya and other Arab nations overthrown, there is a downside.   Supporting the establishment of a democratic system of government may be our role, but if it takes the U.S. or NATO’s presence in these countries, not to nation-build but to foment a secular government, then we MUST support it.  Leave that to chance  and we open the door to theocratic influences from Syria and Iran or even Saudi Arabia to fill the void, which could light a fuse that we can’t stamp out.

Lebanon is a perfect example of what happens when instability is left to languish in the Middle East.  Once a stable, harmonious amalgam of Palestinians, Sunni Muslim, Shiite Muslims and Christians, Lebanon’s secular, very hands-off Libertarian-like central government was the envy of much of the Middle East, but in an area of such unrest it was also its downfall.  Sharing a tiny border with Israel, Iran organized, equipped and funded Hezbollah to enter Beirut and to take over control of the country.  Hezbollah’s mission: clash and provoke Israel.  Today, there is no effective government in Lebanon but for the iron-grip held by Hezbollah.  To reestablish Lebanon will take certain war with Iran.  Should we care what goes on in the Middle East?  If you use oil and don’t think the U.S. should be carving up Colorado, Utah and Wyoming to get to oil shale reserves that could yield more oil than Saudi’s are sitting on, I guess you should care.

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