Just Say No

It is tiring hearing various conservative pundits whine about how Obama policies have failed to recover the economy.  You see we don’t’ know what Obama’s policies would have done if they weren’t blocked by partisan politics. Basically the only economic policy that was passed was the stimulus package, and as that money was spent the economy went from terrible to slowly growing.  Ever since then any economic policies have been stopped by the house of representatives and republican senators. We’ve been kept in policy neutral by a “Just say No” congress.  It seems they are scared that working toward compromise might actually make things better. Basically a lot of hand wringing about keeping their jobs.

 

A Madman has spoken…

Let them eat broccoli..

I found the question from the Supreme Court, on whether our Congress could pass a law compelling citizens to eat broccoli, intriguing. It elicits an image of a nanny state and ludicrous overreach in a single question. But if “compel” or “mandate” means can the Congress make people who don’t buy broccoli pay more in taxes, then, surprisingly, it seems to me the answer is yes.

That Congress causes someone to pay more in taxes for not buying something may seem like something new, but it really isn’t. It is simply just a different way of presenting tax breaks that we have become accustomed to. We have given our Congress the power to tax our incomes. So members could pass a law adding, say, $1,000 per year to everyone. Then, at the same time, they could pass a tax rebate of $1,000 for anyone buying broccoli. This is identical to just raising the taxes by $1,000 on anyone not buying broccoli.

Of course, in this theoretical case, our Congress could “compel” us to buy broccoli but not necessarily make us eat it. Notice the above model only depended on three things: the ability to raise income taxes, the ability to do so on a flat tax basis and the ability to offer a tax rebate. Of course such a law would likely spur recall elections and the election a new Congress to change the taxes back. But who knows? Maybe our Supreme Court has now sparked some ideas.

A Madman has spoken…

Creating a better health care market

As an independent consultant I would I would really like to buy health insurance in an open market, at reasonable rates. I’d like the market to be transparent. I’d like to not have to worry about being denied or having coverage suddenly dropped because of a preexisting condition. I don’t even mind living by the necessary rationing and restriction that today’s insurers apply.

As an American, I want as many of the uninsured to participate in this market since they should pay their way as much as possible, rather than having to wait until they are admitted to emergency rooms where the costs are higher and they can’t pay. When they can’t pay then we all pay a portion of that bill. I would really like all these common sense things. But there are 41 members of the Senate that don’t want me to have these. To get fair open market for health care I want fewer Republican Senators to be elected.

 

A Madman has spoken…

The high cost of exclusion

If we are going to build marketplaces of medical insurance it is in our interest to have all potential patients participate. Basically we don’t want to exclude anyone who might use the system from buying health insurance that is offered at a profitable price.  There are of course people we don’t want to pay any part of their insurance premium. The reason is simple if we keep someone from buying health insurance they are still just as likely to need care and some of them will end up in emergency rooms costing us all in higher health costs.  So anyone we exclude from buying health insurance ironically will end up being subsidized in the worst possible way.  And we let them buy health insurance we are letting them pay their fair share.  Yes it is stupid to exclude any potential patient of the health care system, even if those potential patients are called illegal immigrants.

 

A Madman has spoken

Auto Bailout Consequences

I am a concerned citizen and technology entrepreneur writing to you as an auto industry bailout is considered. I want to share insights gained by being part of small technology companies competing against established market leaders. My experience has been in the aerospace and software markets so I have no direct interest in the automotive industry.

Any established technology has a large advantage over emerging technologies. Existing technologies have an established track record with customers, efficiencies of scale and basic market / mind share. If current auto manufacturers receive financial assistance in this tight credit market it will increase these already high barrier to new technologies.

As with any technology there are always small companies trying to evolve or revolutionize the industry. Here are three examples in the auto industry:

1. Fiberforge, a company creating thermoplastic composites that are stronger and lighter then steel. And could be used to improve fuel efficiency and even reduce manufacturing costs. Based in Glenwood Springs, Colorado

2. Aptera, a company that has built a hybrid 3 seat vehicle capable of 230 mpg, as a diesel pluggable hybrid or act as a 100% electric vehicle. Based in Carlsbad, California

3. Tesla Motors, a bay area company selling an all-electric sports car. They have also designed a sedan that would extend the practicality of an all-electric vehicle to many more buyers. Based in San Carlos, California.

If these or other companies succeed they will build an industry of parts manufacturers and support industries. More importantly if companies like this do not succeed it won’t stop innovation from happening. The next generation of vehicle technologies will occur, but it will occur elsewhere in the world.

If today’s auto companies are “bailed out” with no consideration for tomorrow’s auto technology companies we’ll put ourselves behind in the long term. That does not mean supporting the current industry is wrong. But, if we do it is in our best interest to provide substantive support to emerging companies in the market as well.

 

A Madman has spoken…

Of lipstick and hot air

Most of the time a rose is a rose and a pig is a pig

But when you put lipstick on a pig you now get a lot of hot air. Because “change” has become a key issue to voters, Sen. John McCain has predictably started calling himself a “change candidate.”

Just as predictably, Sen. Barack Obama wants to portray McCain as not being a candidate of change. Obama described McCain’s claim to change as selling the some old policies as something new and different.

To do this, Obama used on old phrase that he and McCain have used before, “You can put lipstick on a pig, it’s still a pig. You can wrap an old fish in a piece of paper called ‘change.’ It’s still gonna’ stink. We’ve had enough of the same old thing.”

As an American, I understand what Obama is trying to say. Up to now, it is all pretty normal. Then somehow the “lipstick” part of a comment is picked up in the media and portrayed as a slur on Gov. Sarah Palin.

The McCain campaign has even created an ad showing this as a smear to Palin. Why does McCain think we are dimwits who don’t understand what Obama was really attacking?

And why hasn’t McCain responded to the real statement, that the policies he promotes are the same as the policies that President Bush has been promoting?

 

A Madman has spoken…

Give me back the straight talk, John

Our political system really needs straight talk. With each passing election, candidates show less and less respect for truth. Because of this I was very happy when Sen. John McCain became a candidate for president. But the past few weeks have been sadly disappointing.

Listening to McCain say Sen. Barack Obama was willing to “lose a war in order to win a campaign” is a President Bush tactic — basically paint anyone who disagrees with your policies as unpatriotic [“McCain: U.S. can win, not go back to Iraq,” Times, July 24].

But it gets worse. Asked about his statement, McCain said he was not questioning Obama’s patriotism. This level of disdain for the U.S. public attention is another aspect of today’s politics. When you say someone is willing to put their self-interest above our country and then claim you are not questioning their patriotism, guess what — you are not “talking straight.”

Sen. McCain, I had a great deal of respect for your candidacy and hope you get back to straight talk. You tell Obama he should go to Iraq and Afghanistan, then call him presumptuous when he goes and visits the same world leaders you have. You claim he is naive for questioning the surge in Iraq. Surging troops in Iraq limits us from surging troops in Afghanistan, something you say is needed.

Both you and Obama want to win a war, but you disagree on whether that requires emphasizing Afghanistan or Iraq. True naivety is not recognizing trade-offs — even a tactic yielding benefits may not be the right choice.

 

A Madman has spoken…

Talking in a straight “W”

Our political system really needs straight talk. Each election lately shows less and less respect for truth. Because of this I was very happy when Sen. McCain became a candidate for president. But the last few weeks have been sadly disappointing.

Listening to Sen. McCain say Sen. Obama was willing to “lose a war to win an election” is a President W tactic. Basically paint anyone who disagrees with your policies as unpatriotic. But it gets worse. Asked about his statement Sen. McCain said he was not questioning Sen. Obama’s patriotism. This level of disdain for the US public attention is another aspect of today’s politics. When you say someone is willing to put their self interest above our country and then claim you are not questioning their patriotism guess what, you are not “talking straight”.

Senator McCain, I had a great deal of respect for your candidacy and hope you get back to straight talk. You tell Sen. Obama he should go to Iraq and Afghansitan then call him presumptuous when he goes and visits the same world leaders you have. You claim he is naïve for questioning the surge in Iraq. Surging troops in Iraq limits us from surging troops in Afghanistan, something you say is needed. Both you and Sen. Obama want to win a war but you have a difference of whether that requires emphasizing Afghanistan or Iraq. True naivety is not recognizing tradeoffs; even a tactic yielding benefits may not be the right choice.

Risks and Rewards

I don’t envy venture capital firms, after the dot-com boom & bust finding the right risks to bet investment dollars on has to be frustrating.  I appreciate this even more as I lead a startup and talk to potential investors.  Investors have an incredibly hard decision to make on how much and what type of risk is worth taking.  But these discussions have also make me wonder where the next generation of innovation will really happen.

I am happy to say there is a healthy approach to taking risk.  Basically there is more respect being given to investment dollars out there.  This is important because it means venture firms are spending more effort on quantifying and understanding risk, which will help delay the next bust (and hopefully lessen its impact).  Everyone is better off when investment dollars are well spent.

Yet, it is disappointing to see what type of risk scares venture funds.  There is a consistent message that “development risk” is to be completely avoided.  I realize “divining” how a company will overcome development hurdles is more art than science, and therefore almost impossible to quantify.  However any truly breakthrough product is bound to have notable development risk.  Firms that take and succeed at this challenge will lead the next revolutionary markets.  The reward for backing this type of risk is very high, but requires doing something hard.  But hey most big payoffs come from doing the hard thing, since anyone can (and will) take the easier route.

A Madman has spoken…

Quality Teachers / Quality Education

One of the biggest challenges I have participated in is hiring people, usually engineers. When you are looking for specific skill sets it can be difficult to find enough candidates and even harder to find not only qualified but the best candidates. At no company I worked for did we ever say “well we’re having trouble finding and keeping the best engineers, so we better find a way to fire who we have easier”.

But that is what proposed reform in California that failed would have done. The reform was started with a valid premise that we need to ensure the best teachers are educating our children. However the reform also assumed it was possible to eliminate bad teachers and replace them from a pool of good teachers. However, currently we have a shortage, of qualified teachers. So there is no “magic” pool of high quality teachers.

We need to attract qualified and quality teachers. Today schools attract people that are very motivated to be teachers. Despite lower salaries there are people out there that really enjoy teaching. But to put this in perspective it would easy enough to find people that really enjoy playing football, and would play for say $20,000 per year. But the odds of that team winning, well, not so good… Currently we have trouble getting enough qualified teachers, and yet we want only the best teachers in the classroom.

For those that say the best teachers are the ones that want to teach anyhow. Yes motivation to teach is important, but the best teachers have skills and interests that take them far in other areas as well. And yes we do have some excellent teachers out there, but we need more. If we want the best teachers for our children we have to step up and offer pay and a work environment that attracts the best.

A Madman has spoken…