Tuesday, September 29, 2009

Okay, this is creepy. This is a video of an elementary school class being taught songs of praise to President Obama:


It's a little hard to understand, so here is a transcription of the lyrics to the first song:
Barack Hussein Obama
He said that all must lend a hand [?]
To make this country strong again
Mmm, mmm, mm!

Barack Hussein Obama
He said we must be clear today
Equal work means equal pay
Mmm, mmm, mm!

Barack Hussein Obama
He said that we must take a stand
To make sure everyone gets a chance
Mmm, mmm, mm!

Barack Hussein Obama
He said Red, Yellow, Black or White
All are equal in his sight
Mmm, mmm, mm!

Now the sentiments expressed are completely innocuous. Equality and equal opportunity are laudable values, and I don't think anyone could find fault with them. What's nuts about this is that it looks like the teachers are indoctrinating a group of small children to worship an elected politician.

The right wing in this country has personalized the policy debate to a shameful degree. When I see pictures of the President photoshopped to look like the Joker in the movie "The Dark Knight," I'm appalled. Not only is it disrespectful and uncalled for, it does nothing to advance the policy debate.

But on the left wing side, there appears to have arisen a cult of personality around Barack Obama that is as polarizing in its own way. Teaching little children to sing paeans to the Dear Leader is something you would expect to see in a totalitarian dictatorship. Since these teachers thought it up on their own, it's a bit spooky.

There are beaucoup nut jobs on the right side of the debate in this country, granted. But there is a full complement of wingnuts on the left as well.

Thursday, September 24, 2009

Off Topic Post

I watched the new Courtney Cox comedy, Cougar Town, last night. The set up is a 40 something woman reentering the dating scene after divorce. It is sharp, well written comedy. I’ll make a point of watching it again.

It’s odd what your subconscious will throw out. I woke up this morning with the following thoughts crystallizing in my brain.

In my younger years, before I met my wife, I would periodically go out on dates to expensive restaurants. On these excursions, I would invariable pay, and I would invariably not get lucky.

It occurs to me that this was the singles equivalent of hanging a pork chop around the neck of the ugly baby so that the dog will play with the kid. “You’re going to pay for dinner? And I can order anything I want? Okay, I’ll go out with you.”

Eventually, I did meet my wife, the one woman in North America who looks at me and thinks “wow, this is it.” She is a rare creature, as the taste for short, scrawny, balding geek is not universally shared in our culture.

Anyway, if I could take back all the lobster dinners I bought without romantic success, I’d be two house payments ahead, and whole ocean ecosystems would have been saved.

Tuesday, September 22, 2009

Silver Linings

Economically, we're not out of the wood yet. For the business I work at, sales continue to be greatly reduced from the same period a year ago. We saw some signs of recovery in the second quarter, but as we close out the third quarter, our order backlog has dropped back down.

September has been particularly slow. For our core business segment, the volume of product we are shipping this month is no more than what we shipped in August. However, due to the vagaries of our accounting system, we have five weeks of production this month, versus four weeks last month. For each week this month, we only have 80% of the activity compared to each week in August.

The bottom line to this it that there isn’t enough work for all the employees to have a full schedule. There is always the temptation in this situation to keep people busy by running extra inventory. Inevitably, however, you end up running the wrong mix of product, leaving you short of raw material to run what your customers will actually want. Also, by building inventory on the theory of “build it and they will come,” you make the correction that much worse when you finally recognize that increased sales are not just around the corner.

So I’m biting the bullet. I’m scheduling two fewer production days next week. At least this will give us a chance to do our end of quarter inventory on straight time. Normally we have the inventory crew come in at midnight after the last production shift at the end of a month, and they get time and a half.

The excess production only built up during the second half of this month. For the first couple of weeks in September, not only did we have a short week because of Labor Day, but we also had a lot of people out sick, which, in a perverse way, cut into our capacity. I needed all the healthy people who showed up for work. It was only after the wave of illness based and everyone came back to work that we began overproducing.

You know, not everyone can see the silver lining in a flu pandemic. And they call me a pessimist.

Friday, September 18, 2009

The World's Single Most Destructive Thought

I ran into this post on a blog called I Luv SA. When I read the opening sentence, I realized that the blogger had perfectly encapsulated a specific worldview. "I am poor because you are rich."

This is a worldview that is gaining increasing currency in American politics and policy today. Whenever I read about concerns over increasing income inequality, and how the top 10% is grabbing all the economic gains, this destructive thought is underlying those concerns.

In college I took a seminar in Comparative Economics, taught by Franco Modigliano, who went on to win the Nobel Prize in Economics. If I had known he was going to win the Nobel Prize, I probably wouldn't have cut class as often as I did.

Anyway, in one of the class sessions I did attend, he spent most of the time demolishing Marx's economic theories. He showed how, over the last century, various economists had pointed out how wrong Marx's theories were.

Most of the arguments against Marx were fairly technical, and to tell you the truth, I don't remember a one of them. But the class did make an immpact on me. After spending most of the class knocking down Marxism, Professor Modigliano then provided the insight that has stuck with me over the last thirty years: "The important thing about Marxism is not that it is correct. The important thing is that every generation has to prove it false all over again."

"I am poor because you are rich." It is a wonderfully seductive idea. It absolves me of all responsibility, justifies any actions I take against you.

It just happens to be completely wrong.

Thursday, September 17, 2009

Job Seeking

I had an interesting conversation the other day. I was sitting at my desk, upgrading a spreadsheet to automatically notify us when it was time to order more components for one of our product lines, when the phone rang. On the other end was a salesman for a metals service center. He was just doing what salesmen do, cold calling to try and find potential new accounts.

We talked for a minute or two, and quickly established that my company doesn’t use the alloys he carries. He started to apologize for taking my time. I told him it was okay. After all, I’ve sat on the other side of the desk, trying to drum up new business. No reason not to be polite. If you never talk to salesmen, you’ll never find any new opportunities.

On a whim, I asked him how his business was doing. Business was slow, but he was surviving. Since most salesmen are at least partially paid on commission, he had to have been working harder, for less money, than a year ago. My bonus won’t be as good as it was last year, so I’m in the same boat. I told him that qualified us both for the category of under employed. Working, but not making as much as we used to. Of course, that beats the crap out of unemployment.

Then I mentioned that I didn’t understand how some people could fall out of the unemployment statistics because they had “stopped looking for work.” I don’t know about you, but about every six hours I get hungry. If you have no source of income, and you’re not looking for work, how do you keep buying groceries?

The salesman told me a story. He had two close friends, and all three of them had been laid off within a short period of time. One had found a new job within a month. He had looked for a couple of months before landing his current position. Then there was his other friend.

His other friend had been laid off from his previous job last October. It’s closing in on a year without work. The last time the salesman had visited his friend, the guy had said he had given up looking for a job. Between unemployment compensation and side work as a mechanic, the friend was just getting by. When reminded that the extended unemployment benefits were about to run out, the friend replied “I don’t think that the government is going to let me starve.”

Well, this is ostensibly a democracy. So can I register a vote on that?

Seriously, this makes me think that a lot of the people who have “stopped looking,” have stopped because they are still getting benefits. When their benefits run out, they will rediscover a sense of urgency about generating more cash flow. This may not take the form of another job. Some of those people will work a lot harder at their side business. Or they may lower their expectations and take on multiple part time gigs.

If you lower your expectations while you are still on unemployment, you risk losing your benefit. If the jobs available pay only a little more than unemployment compensation, why take the job? But once the benefit checks stop coming in, your perspective will change.

After all, you gotta eat.

Tuesday, September 15, 2009

French Health Care, Part Deux

In my last post I talked a little bit about how the French pay for their health care system, the one everybody in the US media thinks is so fabulous. The French pay a 22% payroll tax rate, compared to 7.5% for American workers. This is, of course, more than matched by the employer. Also, it turns out that a lot of French households also carry private supplemental health insurance. This must be sort of like the Medigap coverage that many seniors in this country have, that supplements what Medicare pays medical providers. So that’s where the money comes from, the revenue side of the equation.

But we also have to look at the expense side of the equation. After all, the French pay about 11% of their GNP for health care, compared to over 17% of GNP in the US. Now call me crazy, but I have a hard time believing that the French are more efficient than Americans at anything. A French surgeon doesn’t do a bypass operation twice as fast as an American, and I doubt that French surgical teams have only half as many nurses and techs as American teams.

Although the man hours per procedure may be the same in both countries, it turns out that there is a huge difference in the cost of those man hours. On average, doctors in France make only about one third what doctors in the US earn. This is primarily because the French Social Security fund is the primary buyer of medical care, and they use their near monopoly power to keep reimbursements low.

Another place where the French use the monopoly power of their system is in pharmaceutical purchasing. Basically, the French government tells the drug companies what price they will get for their products. Since the alternative is to lose the French market, the drug companies take the deal.

As a matter of fact, most of the western world does the same thing. That leaves the US as the only unregulated pharmaceutical market. The result is that the US market ends up funding most of the research into new drugs.

So the French system does use the power of the public insurance provider (what we would call the public option) to keep costs lower than in the US. But here’s the rub: Their costs keep going up, just like ours. The French have raised their Social Security tax six times in the last 20 years to pay for their “free” health care.

Insurance companies are not popular in our culture. Neither are pharmaceutical companies. So maybe there is the political will to destroy their business model in the name of lowering costs. I’m not so sure that, as a people, we think it is okay to cut the pay of our doctors in half. Without those kind of savings, providing free care to everyone is just going to raise prices on everyone, healthy and sick alike.

Thursday, September 10, 2009

"Who is this guy FICA, and why does he get so much of my money?": French Edition

The President gave his big speech on health care reform last night. It’s hard for me to believe that a single oration, no matter how inspiring, is enough to move the needle on getting this kind of major legislation passed thorough Congress in the face of entrenched opposition. “Gorsh, that Obama feller sure talks real purty. He convinced me to restructure one seventh of the American economy. I mean, he’s just so durn charismatic!”

But the occasion did spur me to start thinking about health insurance in this country again. Actually, it got me thinking about health insurance in France. After all, the French system is the model most commonly cited in the media as the ideal from the patient’s perspective. Everybody’s covered, the copays are small, and you can never be denied coverage.

Best of all, from all published reports, there is exactly zero interaction with the government run insurance company. You just call the doctor or drop in at the hospital. All the messy financial details are handled off stage. “Monsieur, let us focus on making you well.” What’s not to like?

The question that pops up is a simple one: How do they pay for this great system? More specifically, who pays for the system, and how much do they pay? After all, the money has got to come from somewhere, right?

So I did a little digging, which is a shocking easy thing to do, what with this newfangled Internet and all. It turns out that the French health insurance system is part of the French Social Security system. So in addition to paying retirees, the system also pays for everybody’s medical bills. The interesting thing is that Social Security in France is funded via the same mechanism as in the US: payroll taxes.

In the US, the tax rate for Social Security and Medicare combined is 15%, with half that paid by the employer and half by the employee. The effective payroll tax rate for employees in America is 7.5%.

So what is the equivalent rate in France?

The equivalent rate turns out to be about 22%. That’s right, 22%. So let us say that you earn $10 an hour. In America, your take home is $9.25/hour. In France, say hello to $7.80/hour.

It kind of puts a different spin on the situation, don’t cha think?

I wonder why that number is being reported on more often in this debate. After all, the money for health care has to come from somewhere. There ain’t no such thing as a free lunch.

Monday, September 7, 2009

Interlude

Well, I haven’t blogged in over a week. This has a lot to do with the Office Manager at work going out on maternity leave last month. The added responsibilities have kept me pretty busy. It’s not that I’ve picked up so much extra workload, because we divvied up her work among four people. It’s that she is so damn competent at her job, whereas I am not. Oh, I’m competent enough at my work, just not hers. So it takes me twice as long to do a task as it would normally take her.

It gotten to the point where I’m ready to go to her house and knock on the door. Then, when her husband answers, I’ll punch him. “You did this to her, and don’t think I don’t know it! Miracle of life, my ass! Tell her that play time’s over, and she needs to get her butt back into the office.”

Kidding, just kidding.