December 31, 2009

Mark Steyn on ObamaCare

Mark Steyn, one of the smartest and funniest commentators around, had a fantastic article in yesterday's Washington Times regarding ObamaCare.

Read the whole article here, but browse below for the really good stuff:

Government can't just annex "one-sixth of the U.S. economy" (i.e., the equivalent of annexing the entire British or French economy or annexing the entire Indian economy twice over) and then just say: "OK, what's next? On to cap-and-trade." Nations that governmentalize health care soon find themselves talking about little else.

In Canada, once the wait times for MRIs and hip surgery start creeping up over two years, the government distracts the citizenry with a royal commission appointed to study possible "reforms," which reports back a couple of years later, usually with recommendations to strengthen the government's commitment to every Canadian's right to health care by renaming the Department of Health the Department of Health Services and abolishing the Agency of Health Administration and replacing it with a new Agency of Administrative Health Operations, which would report to a reformed Council of Health Policy Administrative Coordination to be supervised by a streamlined Public Health Operations Administration Assessment Bureau.

......We were told we had to do it because of the however many millions of uninsured, yet this bill will leave about 25 million Americans uninsured. On the other hand, millions of young, healthy Americans in their first jobs who take the entirely reasonable view that they do not require health insurance at this stage in their lives will be forced to pay for coverage they neither want nor need. On the other other hand, those Americans who have done the boring, responsible, grown-up thing and have health plans Senate Majority Leader Harry Reid determines to be excessively "generous" will be subject to punitive taxes up to 40 percent.

.....Looking at the millions of Americans it leaves uninsured and the millions it leaves with worse treatment and reduced access and the millions it makes pay significantly more for their current health care, one can only marvel at Mr. Reid's genius: Government health care turns out to be all government and no health care. Adding up the zillions of new taxes and bureaucracies and regulations it imposes on the citizenry, one might almost think that was the only point of the exercise.

That's why I believe America's belated embrace of government health care will be far more expensive and disastrous than the Euro-Canadian models. Whatever one's philosophical objection to the Canadian health system, it is, broadly, fair: Unless you are a Cabinet minister or a big-time hockey player, you'll enjoy the same equality of crappiness and universal lack of access that everybody else does.

.....Whatever happens, it's a dagger at the heart of American federalism, just as the bill's magisterial proclamation that the Independent Medicare Advisory Board can only be abolished by a two-thirds vote of the Senate strikes at one of the most basic principles of a free society - that no parliament can bind its successors.

These details are obnoxious not merely in and of themselves but because they tell us the truth about where we're headed: Think of the way almost every big government project bursts its bodice and winds up bigger and more bloated than its creators supposedly foresaw.

....As the savvier Democrats have always known, once you've crossed the Rubicon, you can endlessly re-reform your health reform until the end of time, and all the stuff you didn't get this go-round will fall into place, and very quickly.

As I've been saying for more than a year now, health care is the fast-track to a permanent left-of-center political culture. The unlovely Democrats on public display in the week before Christmas might have seemed like just a bunch of jelly-spined opportunists, grubby ward heelers and rapacious kleptocrats, but the smarter ones are showing great strategic clarity. Alas for the rest of us, Euro-style government on a Harry Reid/Chris Dodd/Ben Nelson scale will lead to ruin.

Why are peope successful?

Some fantastic stuff here from Bob Bly on why certain people are successful:

A lot of people who claim to be rich and successful – and I say “claim” because we don’t know for a fact that they are — act as if it’s all them … and that luck had nothing to do with it.

But the fact is, there are 6 specific factors that contribute to anyone’s success or lack thereof – and luck is clearly one of them:


Some people are just smarter than others.

Intelligence is a result of genetics and environment – your upbringing.

Since heredity and the home you are born into are purely by chance, intelligence is largely a matter of luck.

By the way, by “smart” I don’t mean “book smart.”

I mean smart at anything that can make money – whether it’s business, art, computers, or whatever.


Successful people are students for life.

They are constantly acquiring specific knowledge in their business or field — as well as a large storehouse of knowledge on all sorts of other topics.

As a rule, the more you learn, the more you earn.


The cliché about working smarter, not harder, is B.S.

Successful people work both smarter — and harder — than others.


Successful people have an attitude. But it’s not an attitude of ripping people off … or making as much money as they can any way they can.

It’s an attitude of service: of giving their customers (and others) more value than they have any right to expect.

Many successful people are also goal-oriented, and it is important to them to become successful. So they focus their efforts on achievement of that goal.


We tend to be good at things we like and have an aptitude for.

Financially successful people just happen to have an aptitude and talent for things that make money.

Warren Buffett has said that the reason for his great wealth is that he was born with aptitudes and talents for which our society offers huge financial rewards.

Some of us are good at stuff, but not stuff that pays well. And if we pursue those interests exclusively, our incomes can be limited as a result.


As you can see, the key success factors of intelligence (#1) and aptitudes (#5) are determined mainly by chance – and are largely beyond our control.

Yes, Warren Buffett studied finance, worked hard, and had the right attitude.

But he was also lucky, as is virtually every person who has achieved significant wealth, success, or accomplishment in life.

The honest ones admit this and are thankful.

Any rich or successful person who said luck had no part in his achievement is either in denial or unwilling to come clean.

Therefore, if you are successful, you should be humble, not arrogant and boastful.

December 30, 2009

Sherlock Holmes - MUST SEE!

If you haven't already seen the new Sherlock Holmes movie starring Robert Downey, Jr. and Jude Law, do so now.

I enjoyed the movie so much that I saw it back-t0-back nights.

It has also inspired me to finally read my complete Sherlock Holmes volume that has been sitting on my book shelf for some time now.

Jib Jab - 2009 Year in Review

IBD on Health Care Costs

This article from Investors Business Daily absolutely nails the problem with our current health care system and with the system President Obama is so desperately pushing on the American people.

From the article:

The cost of American medical care is so high that it's thought by some to be a tragedy. About one-sixth of the economy is made up of health care expenditures. On average, each American runs up $7,290 a year in medical bills. Bringing down the costs — without sacrificing quality of care — is a reasonable objective.

But supporters of the health care legislation recently passed in Congress have lost sight of the spending problem — if they ever had any clear concept at all.

There are two reasons why per-person health care spending in the U.S. is far higher than even Switzerland at $4,417 a year, or Luxembourg at $4,162, which rank second and third in the world.

One, America has the best health care on the planet. The smartest doctors, the finest in diagnostic equipment, top-flight treatment and advanced drugs don't come cheap.

Two, our system encourages overuse. And, as any ninth-grade economics student will confirm, an increase in demand forces prices higher.

......Americans would be more judicious in seeking health care — they would self-ration — if the right incentives were in place. An effective way to cut overuse and bring down costs would be to encourage through public policy the use of health savings accounts. If consumers used HSAs to pay the full amount for medical care at the point of service rather than letting employer-funded insurance or a government program pay the bills, the demand would fall.

The Democrats' health care legislation, however, puts more distance between Americans and the payment process and promotes dependence on government. That will only drive down consumers' out-of-pocket expenses even further and force overall health care spending upward. Under such a regime, the system will be worse off than it is now.

Mitch Daniels - On Faith

From a recent interview with Mitch Daniels regarding his faith and his recommendation of Michal Novak's book No One Sees God:

Mark Mellinger: You've talked about your own personal faith very little. What is the Gospel? What is its primary significance to Mitch Daniels?

Governor Daniels: It's true. I don't talk about these things too openly for two reasons.

One is [that] although faith is very central to me, I also take very seriously the responsibility to treat my public duties in a way that keeps separate church and state and respects alternative views.

Secondly, I've sometimes referred to it as a Matthew 6 Christian. If you read that chapter, it's the one that talks about praying in private, not giving your alms in public, not being ostentatious about your faith. And I've always liked that notion and thought that was a pretty important instruction.

Mellinger: But theology has to shape your life, right? I mean, the external actions that we see you take, [they're] driven by what's inside. Isn't it all a result of your theology?

Daniels: I hope it is; hope it is, except we all fall short of that.

To me, the core of the Christian faith is humility, which starts with recognizing that you're as fallen as anyone else. And we're all constantly trying to get better, but... so I'm sure I come up short on way too many occasions.

Our country was founded -this is just an historic fact; some people today may resist this notion but it is absolutely true- it was founded by people of faith. It was founded on principles of faith. The whole idea of equality of men and women [and] of the races all springs from the notion that we're all children of a just God. It is very important to at least my notion of what America's about and should be about and I hope it's reflected most of the time in the choices that we make personally.

Mellinger: Is there part of you that is bothered by the aggressive atheism of a [Sam] Harris, a [Christopher] Hitchens, a [Richard] Dawkins? And what I mean is... this atheism is a little different than atheism has been in the past because it does seek to convert people.

Daniels: I'm not sure it's all that new. People who reject the idea of a God -who think that we're just accidental protoplasm- have always been with us. What bothers me is the implications -which not all such folks have thought through- because really, if we are just accidental, if this life is all there is, if there is no eternal standard of right and wrong, then all that matters is power.

And atheism leads to brutality. All the horrific crimes of the last century were committed by atheists -Stalin and Hitler and Mao and so forth- because it flows very naturally from an idea that there is no judgment and there is nothing other than the brief time we spend on this Earth.

Everyone's certainly entitled in our country to equal treatment regardless of their opinion. But yes, I think that folks who believe they've come to that opinion ought to think very carefully, first of all, about how different it is from the American tradition; how it leads to a very different set of outcomes in the real world.

December 29, 2009

Montier's Ten Lessons

From one of James Montier's recent presentations on investing and money management:
  1. Markets Aren’t Efficient
  2. Relative Performance is a Dangerous Game
  3. This Time is Never Different
  4. Valuation Matters (in the Long Run)
  5. Wait for the “Fat” Pitch
  6. Sentiment Matters
  7. Leverage Can’t Turn a Bad Investment Good
  8. Beware of Over Quantification
  9. There is No Substitute for Skepticism
  10. The Benefits of Cheap Insurance

More on Market Failure

This is an absolutely fantastic interview with Kevin Duffy and Bill Laggner, principals of the Dallas-based Bearing Asset Management.

From the interview:

Barron's: You've said that perhaps the most redeeming feature of capitalism is failure. Please explain.

Duffy: Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.

Capitalism is primarily attacked by two groups: utopians who wish to impose a more "compassionate" system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else.

As a country we've become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on "capitalism."

Markets Fail and That's Why We Need Them

A must read here from Arnold Kling and Nick Shulz.

From the piece:

The traditional defenders of free markets have had a rough time getting a hearing lately. After all, it certainly appears as if markets don’t work in any meaningful sense. The Dow rises and plummets in harrowing fashion, the housing market balloons and then craters, financial services firms teeter on the edge of extinction one minute and swing to record profitability the next.

Surely, government can do better.

Or can it? Over the past two generations, a different view of markets and government has begun to emerge, one whose moment may have arrived. It is a view that believes both traditional camps have overlooked some important aspects of markets.

What’s more, it is a view that, if embraced, helps reinterpret market gyrations and government interventions in a way that better reflects reality. The view is subtle, but it has a profound influence on how the public and policymakers should think of markets and, ultimately, the role of government in the economy.

This view can be summarized as “Markets fail. That’s why we need markets.”

This seemingly paradoxical view is based on several overlapping strands of research in economics as it pertains to development, history, technology, business expansion, and new-firm formation. According to this view, entrepreneurs at work in the economy – in finance, high tech, manufacturing, services, and beyond – are constantly experimenting, creating new business models, techniques, and technologies that upend the established order of things.

Some new technologies and innovations are genuine improvements and are long-lasting welfare enhancers. But others are the basketball equivalent of pump fakes – they look like the real deal and prompt market actors to leap hastily into action, only to realize later that their bets were wrong.

Given this dynamic, markets are unpredictable, prone to booms and busts, characterized by bouts of exuberance that are rational or irrational only in hindsight.

But markets are also the only reliable mechanism for sorting out this messy process quickly. In spite of the booms and busts, markets drive genuine long-run innovation and wealth creation.

When governments attempt to impose order on this chaotic and inherently risky process, they immediately run up against two serious dangers.

The first is that they strangle new innovations before they can emerge. Thus proposals for a Consumer Financial Protection Agency, a systemic risk regulator, a public health insurance plan, a green jobs policy, or any attempt at top-down planning may do more harm than good.

The second danger has to do with the nature of political economy. Politics creates its own kind of innovators who can be as destabilizing to markets as market actors themselves – but in far more pernicious ways.

Economists call these political entrepreneurs “rent-seekers.” Rent-seekers gain wealth, not by creating it, but by channeling it through political favors. Examples include government-sponsored monopolies, “targeted” tax breaks for special industries, and legislative loopholes inserted by lobbyists.

The boom in housing and mortgage securities that ended so badly was fueled by government policies that were encouraged by rent-seekers in the real estate, home building, and mortgage finance industries.

Rent-seekers aren’t partisan. They used President Bush’s push for an ownership society to promote sketchy mortgage products. Before that, they used President Clinton’s push for a fairer economy to compel banks to make loans to poorer neighborhoods. In both cases, rent-seekers turned political slogans into profit, but at a steep cost to society when the boom ended.

The response to the current economic crisis has perpetuated and even intensified this process, as hundreds of billions of dollars of taxpayer funds have been used to prop up the very firms that took such reckless risks. The bigger the bad bet, the bigger the bailout.

This gets to the key difference between markets and governments. When innovation-driven excesses and imbalances are recognized in the marketplace, the system can correct itself quickly. This is less the case when government policy failure occurs.

Because political failure is less publicly tolerable than market failure, the temptation becomes for policymakers to avoid acknowledging their role in creating or perpetuating problems. Or they double down on bad bets. So rather than recognize the government’s central role in the housing boom and bust and quickly changing its ways, we see the federal policy apparatus continuing to throw good money after bad in the mortgage market and on Wall Street.

Markets fail; but they learn from their failures. That’s why we need markets. Government can promise to guarantee our prosperity; but only markets can really deliver.

December 23, 2009

Gov. Daniels on Senate Health Care Bill

Governor Mitch Daniels absolutely nails it in his statement on the Senate Health Care Bill:

I'm discouraged, dispirited, and disappointed. Discouraged that such a backwards, anti-taxpayer disaster of a bill is this close to passage.

Dispirited at a gross process of vote-buying and special deals that borders on corrupt. And severely disappointed that any of our delegation would vote for such an anti-Indiana measure.

Let's nurture the hope that somehow the public will be heard before our nation makes such a terrible mistake.

December 18, 2009

Dockers Man-ifesto

This may be the best ad campaign I have seen in a long time:

“Once upon a time, men wore the pants, and wore them well. Women rarely had to open doors and little old ladies never crossed the street alone. Men took charge because that’s what they did. But somewhere along the way, the world decided it no longer needed men. Disco by disco, latte by foamy non-fat latte, men were stripped of their khaki’s and left stranded on the road between boyhood and androgyny. But today, there are questions our genderless society has no answers for. The world sits idly by and cities crumble, children misbehave and those little old ladies remain on one side of the street. For the first time since bad guys, we need heroes. We need grown-ups. We need men to put down the plastic fork, step away from the salad bar and untie the world from the tracks of complacency. It’s time to get your hands dirty. It’s time to answer the call of manhood. It’s time to wear the pants.”

Brian Kelly - Leadership

Some great stuff from Coach Mac's blog:

Brian Kelly- New Age Leadership
(Febuary 2009 from OHSFCA Clinic)

7 Steps of Leadership:

-You better walk the walk when you are a coach
-Coaches need high character because: players need someone to follow when things get tough
- A person of high character models the righ decisions and eliminates uncertainty
- Demand good character from the youngest to the older in your program

2. Create Collaboritve Cohesion
- Everyone on staff has input and give your players the opportunity to express input on the program
- Coaches must have a plan to create a buy-in of the vision by players and coaches
- During teaching moments (practice, film meetings, position group meetings, staff meetings, etc.), Seek to stimulate, create, and excite those individuals
- When every player and coach understands and more importantly takes pride their role in the program, success will follow
- No talk in front of players on whos starting next season
- Head Coaches must remember that everyone is seeking self validation for their work.

3. Morale
-Ask yourself, what are you selling (body language, verbal and non verbal communication)
-Unexpected and appreciated changes can boost morale (short practice, t-shirts, food, cards, phone calls/text messages saying good job today
- Understand and promote that you must be able to delegate to others to get things done

4. Know what you are good at
- All leaders have similar goals but may reach them based on their own personal strengths
- Know what your staff’s strengths are and then delegate to them (i.e. Assistant Coach Smith is very technology smart and you trust him to handle video responsibilities for the team)

5. Have a change-ready mentality
- Good football teams have the ability to adapt to sudden change
- Good head coaches are willing to change the way things are done (no more “but that’s how we always did it”)

6. The Head Coach
- Leaders are no longer commanders, but maestros and visionaries
- Head coaches are the person who puts all the pieces together to create a team
- Coach up your staffs (in private) to improve the overall coaching ability of your staff

7. Creative Thinker
- A head coach must be willing to challenge the status quo
- Whether you are a head coach or coordinator, you should not be afraid of being innovative
- Creativity seperates great coaches from good coaches

Bearcat Team Commandments:
-Treat women with respect
-Don’t steal
-Don’t lie
-Don’t cheart

Mission Statement: We will develop our players in the 5 most important areas of football but more importantly life:

Intellectual Development: school is high priority, hold players to a higher standard than the average college student
Spritual Development: Offer Fellowship of Christian Athletes (FCA) meetings or Bible Study as optional services to the student athletes
Social Development: number one priority is to develop accountability to the team and your friends on the team.
Skill Development: What is your plan to succeed, Coach should review histories of each player and assess them as accurate as possible
Physical Development: Strength & Conditioning, Nutrition, and promotion of a healthy lifestyle

Bearcat Creed:
The pride and tradition of Bearcat football will not be left to the (mentally) weak, timid, or non committed. Both coaches and players must be willing to step out of their comfort zone
-Make sure that there is a clear message for the team on a day to day basis

How does Insurance Work?

I thought this was worth quoting in full:

It sometimes seems that killing a popular myth is like trying to cut water; it just doesn’t work. One all-pervading myth that refuses to die is the one where health insurance companies make their money by denying people’s claims. People from both parties have been caught repeating this line.

The ignorance reaches through several levels here. Not only do they not know what insurance is, they don’t even know how insurance companies actually work. Insurance really isn’t hard to understand, a group of people pay into a common pool of money according to a contract that contains specific terms about when someone gets awarded money from that pool. The people paying into the pool are essentially wagering that something will happen to trigger a cash payment to them before the sum total of all of their payments into the pool gets bigger than their maximum potential claim.

Insurance companies make their money by effectively investing that pool of funds. The more investment income an insurance company can make, the more claims it can pay out as well. Sometimes prudent investing is the difference between solvency and bankruptcy for these companies given that the average profit margin of a health insurance company is less than 5%.

So let’s say that you’re an insurance company. How far would you expect to get in business if you made it a habit of denying people’s claims? I think it would be safe to assume that if you denied someone’s claim, then it’s highly likely that they’re going to go find another insurance company. So what kind of a loss does that represent to you? Well, let’s just do the math.

It was recently reported that the average individual pays $107 to $301 per month in premiums. To an insurance company that’s something called an annuity and we can calculate what that’s worth fairly easily. What we want to know is what that annuity would grow in to over time. Since we’re working with averages, we’ll use the average lifetime of an American at birth of 78 years and the average market return of 10%.

The formula for figuring it all out is:

Future Value of an Annuity

Where ‘A’ is the amount of the annuity, ‘i' is the interest rate per period and ‘n’ is the number of periods. Plugging our numbers in, we can see that a $100/month policy grows into a whopping $28.3 million, but the $300/month policy will eventually grow into a positively gargantuan $85 million. That's 78 years from now though, so what is that kind of money worth right now? Well, $16,743 and $50,228 when you use the following formula for the present value of a future sum of money:

Present Value of a Future Sum

That’s several times the size of your average insurance claim and it's a lot of money to risk forgoing in order to deny someone a claim of just about ANY size. Based on this alone it’s easy to state the following: Health insurance companies have a vested interest in keeping you alive and healthy for as long as possible.

After all, the money stops rolling in once you’re dead.

Now don’t worry all you insurance haters out there, I’m not going to take away one of your favorite scapegoats completely. Just call up your representative and ask them about the HMO Act, state mandated coverage, or why you can’t buy insurance from an out-of-state provider and how that isn't a violation of the interstate commerce clause.

Just Three Simple Questions for Global Warming Folks

I just found this on a football blog I occasionally read.

In a letter to the editor of the Arizona Republic, the writer responded to a Global Warming expert and said he'd come over to the expert's side if he can just answer three questions:

1 What is the temperature that the earth is supposed to be?

2. What percent of the earth's history has it been at this optimum temperature?

3. If man is successful at reducing the Earth's temperature, what is his plan to raise the temperature if necessary at some point to avoid global cooling?

December 17, 2009

Mr. Coburn Goes to Washington

We should all be very thankful that Tom Coburn is in Washington. He is screaming from the rooftops about what we are doing to our country and eventually people are going to start to listen.

Here are some excerpts from a recent Op/Ed in the WSJ:

I recently suggested that seniors will die sooner if Congress actually implements the Medicare cuts in the health-care bill put forward by Senate Majority Leader Harry Reid. My colleagues who defend the bill—none of whom have practiced medicine—predictably dismissed my concern as a scare tactic. They are wrong. Every American, not just seniors, should know that the rationing provisions in the Reid bill will not only reduce their quality of life, but their life spans as well.

My 25 years as a practicing physician have shown me what happens when government attempts to practice medicine: Doctors respond to government coercion instead of patient cues, and patients die prematurely. Even if the public option is eliminated from the bill, these onerous rationing provisions will remain intact.

.....Section 6301 of the Reid bill creates new comparative effectiveness research (CER) programs. CER panels have been used as rationing commissions in other countries such as the U.K., where 15,000 cancer patients die prematurely every year according to the National Cancer Intelligence Network. CER panels here could effectively dictate coverage options and ration care for plans that participate in the state insurance exchanges created by the bill.

Additionally, the Reid bill depends on the recommendations of the U.S. Preventive Services Task Force in no fewer than 14 places. This task force was responsible for advising women under 50 to not undergo annual mammograms. The administration claims the task force recommendations do not carry the force of law, but the Reid bill itself contradicts them in section 2713. The bill explicitly states, on page 17, that health insurance plans "shall provide coverage for" services approved by the task force. This chilling provision represents the government stepping between doctors and patients. When the government asserts the power to provide care, it also asserts the power to deny care.

.....Other unintended consequences of the Reid bill could wreak havoc on patients' lives. What happens, for instance, when savvy consumers commanded to buy insurance realize the penalty is the de facto premium? It won't take long for younger, healthier Americans to realize it's cheaper to pay a $750 tax for coverage instead of, say, $5,000 in annual premiums when coverage can't be denied if you get sick.

OMB Budget Director Peter Orzsag's belief that mandatory health insurance will become a "cultural norm" is bureaucratic naivete that will produce skyrocketing premiums and reduced care for everyone. My state's own insurance commissioner, a Democrat, recently confirmed this concern to me in a letter noting that "the result will be higher insurance rates due to a higher percentage of insured being higher risk/expense individuals."