Tuesday, July 15, 2014

Connectioning Three Seemingly Disparate Pieces of Data


  1. Dr. Amy Reed, an anesthesiologist from Boston, has advanced cancer, possibly spread by a device called a morcellator.
  2. According to highly –esteemed analyst Stephanie Pomboy of Macro Mavens, as quoted in Barron’s July 12th 2014 edition, there are three million four hundred thousand (3,400,000) fewer fulltime workers now than before the Great Recession.
  3. The FDA is proposing regulation of cigar manufacturers and a stunning tax on cigars.

How are these three things connected?

Before we get into that, let us thank Dr. Amy Reed, who is battling Stage Four cancer, for raising the issue of the risks that may be associated with using the morbidly named “morcellator” in association with hysterectomies.  More on that here.  Dr. Reed is doing all women a big favor.  And thanks should also go to USA Today, and more particularly to America’s sole remaining conservative newspaper The Wall St. Journal for raising awareness sufficiently that the FDA had to look into it.  This is the basis of the connections, i.e., until the doctor and her husband, also a doctor, made a cause out of it the FDA wasn’t aware of it.

Now, why hasn’t the FDA looked into this before now?  Apparently because they have diverted their resources into issuing rules and regulations over the cigar industry.  Their proposed tax on cigars would likely wipe out most of the independent mom and pop cigar stores throughout the U.S.  Even though we know that cigar smokers rarely smoke with the frequency of cigarette smokers, generally don’t inhale and as a result are less likely to get cancer than cigarette smokers, the FDA is hell-bent to put the local cigar shops out of business.  I guess they haven’t noticed- or don’t care-that there are 3.4 million fewer fulltime workers than before the recession and closing mom and pop cigar stores will add to the number.

If you enjoy an occasional cigar, you might want to stock up now.

Say a prayer for Dr. Reed.

Tuesday, June 10, 2014

You Are 52 And Worried About Keeping Your/Looking for a Job


I was re-reading a business book that was published in 1991.  It had success stories of companies that had installed new management techniques.  (The author, of course, was an expert on those techniques.)  Many of those companies no longer exist.  Not because of following the writer’s recommendations – those are actually pretty good even today. But because of the earth-shattering changes that have swept U.S. and the world- of industry.

You – our model worker- just recently celebrated your fifty –second birthday.  You were part of a wave of baby –boomer women who swept into colleges and universities in the seventies and eighties and graduated in 1984.  Or perhaps it is you – the man who completed military service at that same time.  You entered the work force in 1984.

Think about just how much things have changed since then.  Tools you learned to use only to discard and replace them with something newer and better.  When you started working, PCs and Macs were just becoming deployed in the workplace on a widespread basis.  You learned WordPerfect, Lotus 123 and Harvard Graphics to take advantage of the new computer power on your desk.  You needed to, because, as famed Professor Lester Thurow explained, Japanese companies were crushing U.S. companies and your future earnings and advancement were being diminished as a result. Mr. Thurow certainly had my attention.  Despite noteworthy skills and an industrious workforce, the Japanese didn’t destroy us economically after all.  (Thurow it turns out underestimated the microprocessor).

You learned Management by Objectives, and maybe had to employ Zero-based Budgeting, at least for a while.

Peters and Waterman ushered in the age of big-selling business books with The Search for Excellence, which you studied carefully. If your employer was on the cutting edge, and had learned to fear and covet Japanese productivity, it trained you on Just-in-Time manufacturing, quality circles and quality control (QC) methods.

By the late eighties, some of your more successful friends were getting phones installed in their cars, but the equipment took up a big space in their car trunk, and they complained about the size of their monthly bills.  Others purchased suitcase-sized portable computers from firms like Kaypro and Compaq.  Prices for fast PCs fell to around $2,000.

You learned all new productivity programs as Microsoft swept Lotus, WordPerfect and Harvard Graphics right off the playing field.  But that was OK; you’re competitive and you aren’t going to be left behind.  Mobile phone prices dropped to the point that you were willing to buy one, and purchased a Nokia candy-bar shaped phone.  It could hold twenty numbers in memory!  Making calls was as easy as using your home phone, but there were lots of places where you couldn’t get on a network.  You learned to watch for a network signal, because “roaming” charges were budget-busters.  You had mastered expense control.

You learned all the Seven Habits of Highly Successful People .  Actually, you practice most of them to this day.

Your boss’s boss’s boss read Michael Hammer’s Reengineering the Corporation, and suddenly your work life was chaos.  Your employer had to reengineer everything.  Some of the changes actually worked, as cheap computer power was harnessed to do work differently and more effectively.  But you watched as it spread throughout corporate America, and reengineering just became a code word for layoffs. Far too often it wasn’t doing work more effectively at all.  To this day you can spot a process that is a mess and size it up with a glance and determine if it is a candidate for process improvement or the more complex reengineering effort.

You realized that you needed to learn more about the “Internet” and ended up opening an AOL account.  It wasn’t too clear what you could do with it, but the little ping and “You’ve got mail” became addictive-at least at first.  Your shelf of business books grew with William Ouchi’s Theory Z as your company decided that if it couldn’t manage culture, it could at least influence it. With every new version of Windows and Office you acquired – and really used - Windows for Dummies, not to mention the documentation that came with each PC you purchased.  You missed investing in Netscape, but you definitely noticed it, and sensed something different was indeed happening.  You bought a Palm Pilot and learned its little characters.  However, you kept losing or breaking the stylus and you quietly questioned whether it wasn’t just better and faster to write in a journal.

Your employer concluded that it must be number one or number two in every market it served.  You concluded that defining a market was far more art than science, and that a surprising number of companies convinced themselves that they were finishing first or second in some market.

Suddenly things seemed to move faster, and the requirement to both be in the office more and be available for email and calls in your “off” hours increased.  Consultants started saying that your employer needed to move at Internet speed or be left behind forever.  On the personal side, you noticed that the once-wimpy young auditors that showed up in your office were suddenly not wimpy at all, but clearly pumping iron in the gym.  And the lowly programmers suddenly commanded premium wages – even older ones – actually particularly the older ones who knew Fortran and Assembler and Cobol as rumors of software problems associated with Y2K circulated. 

A few of your friends quit their jobs and became daytraders.  Not too long thereafter they bought Mercedes and Rolexes.  Later they learned about pawn shops and crushing reality of lease payments when the Internet bubble burst.  You saw the value of your carefully built 401(k) drop by 40% and your planned retirement date recede into the future.

You’ve changed jobs, and your employers have changed owners, and you survived and even thrived as you worked with software from Sage and Lawson and Oracle and Great Plains and SAP and SAS.  Not to mention specialized applications in your field.

“Blackberries” started sprouting on the belt of every successful person you knew.  Checking email continuously became de rigueur.  You are now a master of the taps, clicks and swipes necessary to exploit the super-computer in your pocket.

More recently you’ve been introduced to Workday, Wordpress and Salesforce.

You’ve been downsized and laid-off and outsourced, but have survived them all.

You watched as your employer struggled with old advertising and promotion approaches while upstarts took customers away using Google Ad Words, Facebook, Twitter, Instagram and Pinterest.  In response, you learned something about SEO and SEM.  Seth Godin taught you Permission Marketing  while Charlene Li was informing you about all things social in Groundswell  and Jonah Berger explained how to make ideas Contagious.

You’ve seen a lot. You’ve learned a lot. You can take a punch and get up. You’ve learned a lot about human nature.  You’ve reported to mature folks, and to a kid that probably didn’t need to shave. You don’t panic. You can do stuff, and a lot of it.

Yes, there are kids who can surf the net faster, and think they can multi-task (although new science shows that they make a lot of mistakes and do a third rate job when they do).  But you also learned the 10,000 hour rule, and those hours are in your rear view mirror.

When the NY Knicks needed a new basketball executive, they turned to 68 year old Phil Jackson.  Warren Buffet, at 87, is still considered the greatest investor of all time.  Sixty-six year old Hillary Rodham Clinton is poised to run for the President of the United States. If she does, she’ll be 68 when the election comes up. When people want something done, and done well, they look for someone with deep experience.

That’s you isn’t it?

Friday, January 03, 2014


 
Today Forbes announced its list of the thirty most important people under thirty.  Fortune did the same thing recently.  Are you tired of reading lists of “Thirty Leaders Under Thirty”?  Here is a list of the sixty most influential, annoying, important or just folks over sixty.  Here then, sorted by age, is The Sixty Most Important People Over Sixty.
  1. Henry Kissinger.  Still the U.S. best thinker on foreign policy and diplomacy.
  2. Jimmy Carter.  Better as an ex-President than President.  His work for Habitat for Humanity is a lesson for all of us.
  3. T. Boone Pickens.  Oilman, energy expert.  Creator of The Pickens Plan for energy independence.
  4. Frank Gehry.  Showing the world what new materials and CAD design can do to architecture.
  5. Warren Bufett. Best investor in history.  Becoming one of the best philanthropists in history.
  6. Alan Simpson.  Former Senator who, along with Bowles (below) is trying to get U.S. to fiscal sanity.
  7. Diane Feinstein.  Influential Sr. Senator from CA.
  8. Carl Icahn.  Activist investor.
  9. Anthony Kennedy.  Supreme Court Justice
  10. Jack Nicholson.  Actor
  11. Freeman Morgan.  Actor.  “Through the Wormhole” commentator.
  12. Yvon Chouinard. Founder of Patagonia, environmental activist and enemy of dams.
  13. Ralph Lauren.  Fashion industry titan.
  14. Harry Reid.  Senate Majority Leader.
  15. Toby Cosgrove.  MD and President of The Cleveland Clinic.
  16. Nancy Pelosi.  House Minority Leader.
  17. William Kock.  Billionaire businessman and Libertarian.
  18. Roger Ailes.  Founder of Fox News.
  19. Don Imus. Radio personality, philanthropist, professional curmudgeon.
  20. Barbara Boxer.  Jr. Senator from CA.
  21. Martha Stewart.  Fashion arbiter, CEO of Martha Stewart Omnimedia.
  22. Michael Bloomberg.  Former Mayor of NYC; eponymous founder of Bloomberg.
  23. Mitch McConnell.  Senate Minority Leader.
  24. Aretha Franklin.  Soul and R&B singer.
  25. Joe Biden.  VP of the U.S.
  26. Newt Gringrich.  Former House Speaker, author and conservative thought leader.
  27. Jerry Bruckheimer.  Co-creator of CSI, Cold Case, many others.
  28. George Lucas. Motion picture producer and director; world builder.
  29. Larry Ellison.  Founder of Oracle.
  30. Lorne Michaels.  Founder of Saturday Night Live.
  31. Erskine Bowles.  Co-leader of Simpson Bowles Committee. Prophet.
  32. Harold Hamm.  Founder & CEO of Continental Resources, shale/fracking leader.
  33. Diane Sawyer.  ABC news anchorwoman.
  34. Dolly Parton.  Singer, songwriter, entrepreneur.
  35. Cher Sarkisian.  Singer and entertainer.
  36. Janet Yellen.  President-Federal Reserve Bank; arguably the world’s most powerful woman.
  37. Bill Clinton.  Former President.  Co-founder of Clinton Global Initiative.
  38. Stephen Spielberg.  Motion picture producer and director.
  39. Dick Wolfe.  Co-creator of Law & Order franchise.
  40. James Rothman.  Yale Professor of Biomedical Science; Nobel Prize Winner.
  41. Camile Paglia.  Professor and author.
  42. Hillary Clinton.  Former Senator, former Secretary of State, Presidential candidate.
  43. Dick Parsons. Former CEO of Citibank, former CEO of Time-Warner, advisor to Providence Equity.
  44. Kathleen Sebelius.  Secretary of Health & Human Services. Charged with fixing Obamacare.
  45. Randy Schekman. California University Cell Biologist; Nobel Prize Winner.
  46. David Rubenstein.  CEO of private equity firm Carlyle.
  47. Bruce Springsteen.  Singer and songwriter.
  48. Mike Duke.  CEO of Wal-Mart.
  49. Timothy Dolan.  Cardinal of NY.
  50. Francis Collins.  Director, National Institute of Health.
  51. Chuck Schumer.  Sr. Senator from NY.
  52. Rush Limbaugh. Talk show host; most influential conservative.
  53. Bob Iger.  Chairman & CEO: Disney.
  54. Keith Alexander. General; Director of NSA.
  55. John Noseworthy.  CEO of The Mayo Clinic.
  56. Danielle Steele.  Top ten best-selling author of all time.
  57. Maureen Dowd.  Influential NY Times editorialist.
  58. Martin Dempsey.  General-U.S. Army. Chairman, Joint Chiefs of Staff.
  59. Rex Tillerson. CEO of Exxon Mobile.
  60. Howard Schultz.  Founder and CEO of Starbucks.

There were many other excellent choices, and my selection is largely arbitrary.  But I welcome your suggestions for additions (please don’t bother with deletions) and will consider them for my next update.  Post your comment here.

Sunday, December 15, 2013

Are Younger Employees Really an Asset to Health Plans?


We’ve been bombarded by news lately, proclaiming that The Affordable Health Care Act can only be successful if vast numbers of young adults join the plans.  And news that many, if not most, young adults have little or no interest in participating has also made headlines. Further, there are reports that a substantial numbers of young adults don’t even know about it.  But, who has evaluated the underlying claim cost data?  How does one know it is correct?
I, for one, have very serious doubts that young adults are significantly cheaper to insure.

Here’s why.
1.       As a CFO, I’ve been involved in purchasing employee health plans, and negotiating the terms and features of those plans.  I frequently asked to see the data supporting the assertion that health costs were concentrated in the older age cohort but never did.  Insurance companies and third-party administrators acted like there was rock-solid support for the claim that younger people have lower medical costs, but never produced supporting data.

2.       The assertion that fifty percent of total lifetime medical costs happens in the last year of life is irrelevant.  While this widely-circulated claim may indeed be true, with the average life expectancy of women in the U.S. of 80.8 years and men of 75.9, that last year of life is very likely to occur long after one has left the labor force.  (Note that life expectancy is increasing as well).

3.       While older adults in the workforce may indeed have more chronic ailments than younger, the cost of treatment of many of those ailments is falling.  Using heart disease as an example, with the development of statin drugs, continually lower-cost methods of bypass surgery, and the use of stents to improve blood flow, the cost of treatment of heart disease has declined.  With an increasing number of excellent generic drugs for cholesterol  lowering, blood pressure management, etc. the costs of managing chronic disease is dropping as is the possibility for costly heart attacks.  Even HIV/AIDS, which once threatened the financial viability of numerous plans, is now largely relegated to a manageable chronic disease.

4.       Employer health care budgets are rarely busted by chronic disease management.  So-called “shock claims” which spiral into six and sometimes seven figures, are more associated with:

a.       Car accidents, particularly with multiple occupants.  One of the most expensive health care claims I ever saw concerned a family of four involved in a horrific accident. All required multiple surgeries, extensive time in ICU and long physical therapy treatment after.  The total cost was well over a million dollars.  The source of that claim was a young family with young children.

b.      Motorcycle wrecks that result in expensive treatment.  While there are certainly older folks riding bikes these days, they tend to meet at point A for breakfast, ride as a group to point B for lunch, and return.  Younger riders are more likely to be risk takers.  In wrecks between cars or trucks and a motorcycle, the car usually wins.

c.       The delivery of premature babies.  The second largest claim I’m personally familiar with involved premature twins. The babies were in intensive care and given special care around the clock for weeks.  Again, having babies is not the turf of fifty year olds.

d.      Finally, I’ll admit that one category of expensive treatment usually concerns cancer, and that usually occurs with middle aged or older adults – but certainly isn’t exclusively so.  We all know of heartbreaking cases of children afflicted with this scourge.  Pediatric cancer is both incredibly sad and expensive.
It may be that there is excellent data that indicates that the cost of many older employees with chronic ailments overwhelms the costs of a few young employees with more severe medical issues.  But I’d like to see the data before I was confident in the current conclusion.

Assume for a moment that I’m right and adding younger workers into newly minted exchange plans doesn’t create as much financial subsidy from young to old as anticipated.  What effect does that have on the economics of the Affordable Health Care Act?

Monday, November 11, 2013

President Obama's TVA Proposal


Fortune Magazine recently ran an article on the TVA (“Uncle Sam’s River”, Oct, 28th.)  As a native Tennessean, I read the article with great interest.  In the President’s most recent budget proposal, TVA apparently was put on the disposition block.
Probably the vast majority of Americans have no idea that they own a utility company, or that it borrows with government-backed debt.  The Tennessee Valley Authority is a vestige of the Roosevelt administration’s efforts to end the Great Depression.  It brought electricity to great swaths of the rural South.

I propose that we Americanize TVA:
1.       Convert TVA to a “C Corporation” with approximately 350 million shares;

2.       Give each holder of a Social Security number one share; and

3.       Seek a listing on an exchange.
The American taxpayer has bought and paid for TVA and should own it directly.  And this would provide numerous benefits: Americans would feel a little richer, TVA would no longer be a credit drag on the full faith and credit of the U.S., and TVA would become subject to real governance via exchange rules, the SEC, Sarbanes-Oxley rules, etc.

Thursday, November 07, 2013

Sue Grafton and the Alphabet Series

I occasionally write book reviews, which I post here, or on Amazon, or on another of my websites. This really isn't a book review, but more of a commentary on Sue Grafton and her "alphabet series".

First, I wish Sue Grafton a very long, healthy, vigorous life.  According to Wikipedia, Ms. Grafton is 73.  While I do with her well, this, of course, is solely selfish.  I want to read her Kinsey Millhone “Alphabet” series for a long time.  I’m sure that I’m not the only fan who hopes she doesn’t retire after “Z”. (She is through the letter W currently).
In the protagonist Millhone, Grafton has created a self-reliant, disciplined, organized terrier of a private detective.  She lives a very modest lifestyle, is fiercely independent and very self-aware.  By-the-way, the series is set about twenty-five years ago, and has maintained that relationship to the current period.  Kinsey is generally a good, quick judge of character, is smart but not dazzlingly so, and solves each case as a result of tireless effort.

Ms. Grafton is a master of her craft.  While the writing is spare, she provides just the right amount of detail for the images of each scene to explode in the reader’s mind.   As the series has developed, she’s added a few recurring characters – regulars are  Kinsey’s landlord and friend Henry, Hungarian tavern owner Rosie, and a couple of on-again/off-again boyfriends.  While Kinsey long-believed that she was an orphan, she, and of course the readers, are learning that there are some relatives, which appear from time-to-time, usually not too welcomed.
Grafton also painstakingly researches each topic.  She recognizes all her sources and resources at the start of each novel.  It is only after reading a few  books in the series that it becomes obvious that she develops real knowledge on each topic before writing the book.

Most of the novels aren’t classic Ellery Queen style who-done-its, but rather a series of challenges between Kinsey and the bad guy(s).  And the bad guys tend to be small time crooks, crooked retirement home operators, or folks with broken moral compasses who cut corners, and occasionally those corners result in a murder.  Only every now and then is she up against organized crime or more serious criminals (see V is for Vengeance below).
Ms. Grafton writes each book as a standalone, so that new readers can enjoy and understand completely without having read others in the series.  However, if you read one and like it, I recommend that you go back to A is for Alibi and read them in order.
I prefer to binge-read the books.  I just completed U is for Undertow, V is for Vengeance and W is for Wasted.  Briefly on each: in U is for Undertow, Millhone is hired by a down-on-his-luck character who suddenly has a childhood recollection of  witnessing a burial in the woods.  He now thinks it was disposing of the body of a little girl who had been kidnapped. In V in for Vengeance, Millhone gets involved in a regional shoplifting ring. And in W is for Wasted, Millhone helps a former (and potentially future) boyfriend – also a PI) track down a doctor who committed murder to cover up his cooking the results of a drug study.  All feature Grafton’s taut style, thoroughly-researched backgrounds, and page- turning suspense.

I’m an avid detective/crime fiction reader going back to the Hardy Boys and Sherlock Holmes.  There isn’t a better written, more entertaining or enjoyable series than Grafton’s Alphabet series.
I noticed in two of the last three books, Kinsey has made more money than she usually makes for her private detective work.  I hope Ms. Grafton isn't setting up Kinsey, and herself, for retirement after Z....

Ms. Grafton - if someone happens to forward this to you, note that Rex Stout wrote 47 Nero Wolfe mysteries, with the last one when he was 88.
Binge-reading the alphabet series makes me sleep-deprived; nonetheless:  To long life Ms. Grafton, to long life.

Wednesday, October 23, 2013

Government Shutdown, EPA

NBC has been shadowing a couple of EPA workers who were laid-off during the government shutdown to discover the impact it is having on their household budgets and spending plans.
I wish NBC would spend some time in coal country to see what affect the EPA's open war on the coal industry has had on those working families.  As long as the EPA operates unconstrained, those jobs are never coming back.

Government Spending and Pop Culture

Last night I watched back-to-back episodes of "Castle", the popular crime series.
It was a two-parter, with a plot revolving around a series of events that, if touched-off, would result in the economic collapse of the U.S.
It turned out that the triggering event was a death of Chinese child who was the daughter of an influential Chinese businessman, and the death would be tied to the CIA.  That, in turn, would lead to the Chinese ceasing to buy U.S. government debt, leading to austerity measures, leading to tax riots, etc. etc. and eventual collapse of America.
It is interesting that Hollywood scriptwriters can foresee this, but our rulers apparently can't.