Archive for April, 2010

So . . . it’s a brave new world — again.  Back in the 60s, the term “generation gap” was introduced to describe the cultural disconnect between parents of the WWII generation and their children.  And the divide was palpable given the contrast between a responsible population raised on depression-era, community-oriented values, and their generally self-indulgent, sex, drugs & rock ‘n roll Boomer progeny.  Although there was a clear hierarchical respect for one’s elders, on the subject of world view, parental thoughts were universally marginalized, if not completely dismissed.

Hello new millennium.  The Boomers are now the parents.  Beneficiaries of the greatest wealth-accumulation era of all time, they have spawned a couple of generations of hyper-indulged offspring.  Every kid’s special.  Everyone gets a trophy for playing.  iPhones, X-boxes, karate, semesters abroad, cars, exotic travel, Mark Jacobs bags and boob jobs.  And every one of them is headed for Wall Street, preferably by way of Harvard.

Interestingly, the chasm between Boomer parents and their kids didn’t seem to be very wide until recently.  Both generations essentially listen to similar music, watch the same TV shows, play video games and participate in similar sports.  Out-of-the-nest daughters call or text their mothers 50 times a day (I believe I only spoke with my mother once a week after I graduated from high school).  The parental line has now been skewed toward the category of “friends.”  Nice . . . at least on the surface.  But if you dig a little deeper, you’ll find a significant divide.

A tectonic cultural shift has emerged that has amplified and transferred the self-absorption of the “me generation” to the progenitor “bubble” generations, ultimately completing the feedback loop to the makers.  And with that shift has come a pervasive rudeness and emotional indifference that is not only ubiquitous in its delivery, but considered socially acceptable in its reception.  Give and ye shall receive.

Technology is probably the greatest catalyst of this anti-social transformation, which is most concentrated in the bubble generations.  The obvious symptoms include screening calls, not responding to messages, talking on cell phones when you should be paying attention to someone or something else, not looking at the person you’re speaking with, Blackberry obsession, indiscriminately using “reply to all”, not thanking someone for holding the door open (or anything else for that matter), a general lack of empathy and compassion, avoiding the “not interested” conversation with the opposite sex or a job applicant, and on and on.  Perhaps the most emblematic sign of this non-civil movement is texting.  By definition, it is telling someone that they are not worthy of the time investment required for a conversation or for spelling words out in their entirety (although its use has mercifully cut down on the number of obnoxiously loud cell phone conversations in restaurants and on commuter trains).  Of course, there are many wonderful dividends that technology has given us.  And yes, the pace of societal advancement has been absolutely breathtaking.  But guess what, Neo . . . no one is really HERE.  They’re all somewhere else.  Their attention is directed everywhere except toward the folks that surround them.

Well, how about the social networks, you say?  After all, they are “social” aren’t they?  Yes, they are.  On the most superficial of levels.  I like to think of Facebook, Twitter, Foursquare, etc. as “look at me” platforms.  They’re not so much about staying connected as they are about giving ordinary folks a microphone and feeding their A.D.D.  It’s the high school popularity syndrome where we all want to be the center of attention.  Look how many “friends” I have!  But interacting through the veil of technology allows us to hide — to “dis” people without the discomfort of direct confrontation.  That way, in our minds, we can all remain nice guys.  Of course we know that’s a fallacy, but we’re just not willing to admit it to ourselves.

O.K. — back to the real face-to-face world.  How do you feel about the attitude you get from the cashier at the deli or the comatose workers at the post office or the guy that speeds-up to block your lane change?  And how about the staff at the doctor’s office who, without apology, make you wait 2 hours to be seen or put your call on hold until your next birthday.  Is all of this now considered acceptable behavior?  Moreover, does anyone even notice it anymore?  If not, I think we should.  Perhaps that would fuel a civility revolution.

So next time you voicemail or text your daughter/friend and don’t hear back for 24 hours, pay attention to where you lie on her priority list.  She got the message and is passively dissing you.  But the good news is, she’s a nice guy.


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So . . . it’s been a year and a half since all of us were scrambling to protect our savings accounts from a possible collapse of the banking system.  In our panic we first redistributed everything over $100k to separate institutions, then we considered stuffing the mattresses when we heard the FDIC might not have the reserves to cover our insured assets.  Geithner, Paulson and company stepped-in and took extraordinary measures to fight the raging inferno, as new viral emergencies of increasing magnitude relentlessly surfaced on a daily basis.  The fire was mostly extinguished with TARP, and then the government went on a spending spree to begin to repair the extensive damage which had gone airborne and spread to the rest of the world.  And so here we are 18 months later, unemployed, economy beginning to recover, with the luxury of playing Monday morning quarterback to the firefighting team.  And our collective conclusion?  Our government did a crappy job.  What a great country.  It took us a while, but we’re now a serious threat to France’s dominance in the short-term memory competition.

Let’s review the corrective actions taken so far.  We bailed out the “too big to fail” institutions with TARP money ($700 billion).  Some of these loans made us money (Goldman, Bank of America), some made us road pizza (AIG, most likely GM, Citi and Chrysler), but none led to consumer lending by the banks or any new jobs (so far).  And just one year after the nuclear ashes settled, Wall Street gave out all-time record bonuses in the middle of the worst economic collapse since the Great Depression (glad to see things have changed).  Next, there’s the Public-Private Investment Program ($500+ billion) to buy, and ostensibly overpay for, toxic assets from banks.  But the centerpiece is the American Recovery and Reinvestment Act ($780+ billion) which funds everything from college tax credits, energy and unemployment benefits to healthcare, education and construction projects.  Remember when a billion dollars was a lot of money?

Apparently this plan has not released any endorphins for the American public.  Maybe that’s because of the lack of jobs.  Perhaps it’s because the Republicans pollute everything that comes out of the White House in order to position themselves for the next election (self-serving politicians and their demonization of the opposing party is a subject for another day).  So I ask you, what would YOU have done to address the financial Armageddon?  Give out cash?  Give big tax credits to corporations so that they can hire and manufacture in the U.S. for the same cost as outsourcing to China?  Sell more of our worst NBA teams to Russian billionaires?  I know what I would have done.

I would have declared a new Manhattan Project to develop alternative energy.  And I would have put a trillion dollars into it.  That’s right — A TRILLION.  Why?  Because it is a time-honored fact that when there’s a lot of money at stake, technological developments miraculously occur in record time. It’s the Gordon Gecko “greed is good” phenomenon.  Suddenly, corporations pour huge money and resources into developing solutions in order to capture the big prize.  In 1961 when when Jack Kennedy announced we were going to the moon, 400,000 jobs were created in one year, and the resulting technology explosion led to everything from computers and MRI machines to satellite systems and smoke detectors.  It would be impossible to calculate the incredible value of the benefits gained from that initiative.  Next to Viagra and Google stock, it may have been the greatest investment of all time.

Why energy?  Because it would generate a ton of jobs, facilitate worker retraining, make the U.S. the sole supplier of an essential commodity to every country ($$$$), and improve the environment.  But most importantly (and this alone should be sufficient reason to pursue this course), we would be energy independent.  The value of oil would go to zero, and every Arab country would be marginalized.  They would be abandoned by China, Russia, and us, and would no longer enjoy the longstanding tacit sovereign support for their terrorist activities.  Problem solved.  Party over.  Without a world war.

There is no question that this is achievable.  My brother is fond of saying, “if the world ran out of oil tomorrow, how long do you think we’d be sitting in the dark?”  When you create that level of urgency, things happen very quickly.  Seems like a better investment to me than giving billions to car manufacturers who have proven, over and over, they can’t (or won’t) compete with other countries.  How nice would it be to turn-on CNBC in the morning and not care about the fluctuating price of oil and how it will affect us?  That would be something to celebrate.  And this time, the party would be ours.

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So . . . what’s at the core of our healthcare mess?  The doctors and hospitals overcharging?  Insurance companies stealing from everyone?  Pharmaceutical companies paying-off Senators to allow the continuance of obscene pricing?  Medical device manufacturers creating margins of a million percent?  The government’s ineptitude at administering the Medicare program?  Well, yes.  And no.  These are all contributors (and there are many, many more), but as Curly said to Billy Crystal in City Slickers, it comes down to “One Thing.”

Now, it took Billy 1:45 of cinema run time to figure out what that One Thing is.  But for the rest of us 300+ million Americans, this healthcare movie is like watching “Lost” — there’s no real answer and there’s no end in sight.  So I’m here to give you the answers to the SATs.

The “One Thing” is entitlement.  Every American feels entitled to receive healthcare services for free.  It’s why we constantly complain about $20 copayments and deductibles.  We think that’s unfair.  The doctors and hospitals make enough money.  Why should we have to shell out hard-earned cash because we were unlucky enough to get sick or hurt?  I mean, how much did it really cost the doctor to look in my kid’s ear for 5 seconds and write a stupid prescription?  Is the cost of the ink that much?

Most people deny this is the way they feel. They’ll tell you that doctors should get paid well.  But the truth is, that is EXACTLY how we all feel.  We just don’t want to pay for this stuff.  So where does this feeling of entitlement come from?

Well, it starts with the insurance companies.  There is always going to be a problem when you have a third party paying the bills.  Think of it this way . . . if your father is filthy rich and he happily pays all of your bills, how much attention are you going to pay to prices or the amount of stuff that you buy?  Well guess what . . . when it comes to healthcare, most of us have that rich father.  Let me ‘splain.

A couple of generations ago, insurance companies recognized a new way to make money by wedging their way in between the doctors and the patients.  The result of this was, and is, a system where patients see their doctors, and their insurance company mails their doctor a check.  Free healthcare.  In point of fact, the original “indemnity” plans paid 80% of the doctor’s charges, but the doctors never bothered to collect the other 20% from the patient because the reimbursement was so good, and because they didn’t want to upset their “customer”.  But then came the ’80s Wall Street boom.  The doctors saw how much money their investment banker friends were making, and wanted to even the playing field.  So they started charging more for their services, unbundling their bills and performing more money-generating services and tests.  The same greed entered the hospital, pharmaceutical, medical device, and other healthcare sectors resulting in an explosive increase in costs to the insurers.  The insurers (never ones to lose money) responded by developing managed care plans (HMOs & PPOs) to control costs, cutting back on benefits, instituting lifetime caps and exemptions for pre-existing conditions, requiring referrals and preauthorizations, establishing co-pay requirements, increasing deductibles and raising premiums. Doctors got paid less and responded by billing more aggressively and performing extra tests to protect themselves from the rapacious malpractice attorneys.  Ultimately, the result is less service for a higher cost.

Now, most Americans get health insurance through their employers (or the government), who pick up most, if not all of the premium payments.  In recent years, as the cost of insurance has escalated, the employers have passed more of the costs on to the employees.  So an employee might be paying $50, for example, out of each bi-weekly paycheck for health insurance ($1,200/year) plus a $20 co-pay when they see their doctor.  But their employer is likely paying $20,000/year to their insurance company (or self-insured administrator) on their behalf.  A nice perk, but very few employees recognize or appreciate this. They see the health benefit as a “given right” instead of viewing it as additional compensation.  I have a friend who just lost his senior-level Wall Street job, and his primary complaint is that, in addition to not earning income, he now has to pay $25,000/yr for health insurance for his family.  In the words of Bruce Willis, “welcome to the party, pal.”  He has been incessantly whining because this is a new expense for him that is unfair.  Of course, the fact that he earned a million dollars a year for umpteen years and got health coverage for free didn’t seem to soften the blow for him.  Entitlement!

And then there’s the “pass the bill” attitude. Since insurance is paying the majority of our healthcare bills, we want to get the most for our money.  It’s like going out to a fine restaurant with a large group.  Everyone subscribes to the Nash Equilibrium concept and orders the most expensive dish and multiple drinks, figuring that when the bill is split equally among the throng, they’ll pay less than their fair share because those that have consumed less will make-up the difference.  The only problem is, in healthcare everyone is gaming the system.

So we all go to the doctor and allow him/her to take unnecessary x-rays, perform extra blood tests, do unnecessary vascular doppler studies, hearing tests, physical therapy — whatever — because the insurance company is paying.  What do we care??

Well, here’s what happens.  The bills get passed to the insurance company and they respond by raising the price of coverage, which you and I pay directly, or indirectly in the form of a smaller paycheck from our employer.  And we thought we were getting away with something — that someone else would pick-up the tab.  In reality, when you litter in healthcare, you will, at some point, have to clean-up your own mess.  The penalty is guaranteed . . . it’s just delayed.

Now, in the case where Medicare (the government) is the insurer, eventually the system runs out of money.  And they can’t pass the loss on to employers, so they pass it on to the tax payer — YOU and ME!  So along comes Obama who says we have to fix this.  Well . . . there are 3 components of healthcare delivery, and to fix the system, all 3 have to lose money.  And we all know, nobody likes to lose money.  Those 3 components are 1) Providers [i.e. doctors and hospitals]; 2) Insurance companies; and 3) Businesses that feed off healthcare like pharma companies, blood labs, imaging centers, medical device manufacturers, etc.  And all three lobby heavily to both sides of the aisle to block this new legislation that will blow-up the runaway, money-generating healthcare gravy train.

The Republicans argue that reform will be bad for business, generate unrecoverable debt, and result in poorer healthcare services because of government mismanagement.  The Democrats argue that everyone is entitled to healthcare access at any cost.  But there is one thing we all agree on — SOMETHING has to be done.  We just don’t want to pay for it.  A complicated issue, to be sure.  Let’s just hope we’re moving in the right direction.  That we’re entitled to.

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