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One of the central assumptions (read: fallacies) of a great deal of the discussion about reforming the nation's health and retirement systems is the notion that Americans are desperately yearning to own and take control of the frequently impenetrable benefit programs that their employers have generally handled for years. Defined-benefit pensions? No, 401(Ks). Health insurance? No, Health Savings Accounts.
Of course, very few of the proponents of HSAs actually have them. How many people at the American Enterprise have them? Probably the same number who think the Dow should be fairly valued at 36,000--which is to say, two.
President Bush has an HSA. But the guy doesn't carry a wallet. And I find it hard to believe that any of his many physicians actually bothers to send him a bill.
When offered the chance to switch from health insurance to HSAs, employees overwhelmingly pass. This year, for the first time, the eight million people in the Federal Employees health Benefits Program were offered the chance to shift out of traditional health insurance -- in which the government and employees split premiums 75/25 -- and into HSAs.
According to today's Wall Street Journal, only 5,000 have signed up.
Posted by dan at 08:53 PM
The Spectrem Group, which tracks the spending, investing, and consuming habits of the very rich, reports today that wealthy investors are in a pissy mood.
Spectrem Group announced today that its Spectrem Affluent Investor Index ™ declined 9 points in April to zero, the lowest level since its inception in February 2004.The April decline, which kept the index in neutral territory for a second consecutive month, came as affluent investors expressed concern that stock market conditions, the economic environment and retirement are threatening their investment plans. Underscoring their level of concern about the economy, the Household Economic Outlook component of the affluent index also fell to a new low in April.
There they go again, those radical left-wing Democrats who hate freedom, seeking to undermine President Bush's plans to dismantle the New Deal by displaying a lack of faith in the stock market.
Posted by dan at 08:40 PM
What does bad cell phone service have to do with high gas prices?
They’re symptoms of the same problem. We love the convenience afforded by technologies that grant us freedom, flexibility, mobility—the car and the cell phone are two great examples of that. We love convenience and comfort—the cell phone and the gas-fired heaters that fuel our massive homes and swimming pools are great examples of that.
At the same time, our concern for aesthetics, property values, and safety--and a general aversion to living or working near anything that reeks of old-school industrialism--means that we bitterly oppose efforts to build the infrastructure necessary to fuel these technologies. As a result, economic inefficiencies creep in to systems that could and should be functioning more smoothly..
Here’s the money graph from Katie Hafner’s Sunday New York Times article on the difficulty of siting cell phone towers:
“But many suburbanites would rather put up with bad cellphone service than allow the structures in their midst. In fact, many dead spots in the nation's wireless networks persist not from technological limitations but from community resistance to the towers.”
The same thing is going with both natural gas and oil. Infrastructure hasn’t kept up with demand, in part because people think the construction of the infrastructure will negatively impact their quality of life. And as a result, the service is prone to disruptions in pricing.
One of the factors that makes gas expensive—one, not the—is the fact that the U.S. has too few oil refineries. And one of the reasons we don’t have more oil refineries—one, not the—is that nobody wants to live near one. I discussed what I call the coastal infrastructure NIMBY problem in Slate last year,
In a rare jolt of coherence, the Wall Street Journal editorial page yesterday noted that one of the reasons Americans (and American companies) pay such high prices for natural gas is that we won’t build the infrastructure necessary to convert liquefied natural gas produced overseas into natural gas that we can use in our homes, factories, and pools.
“Currently, less than 1% of gas consumed by the U.S. is LNG , in part because the U.S. has only four port facilities equipped to take it ashore. But many countries are eager to export LNG , and at prices significantly lower than those domestically.The Federal Energy Regulatory Commission (FERC) has moved quickly to authorize new LNG ports, as the Natural Gas Act of 1978 allows it to do. But greens are trying to block many of the 32 proposed facilities by hyping safety risks, arguing that LNG barges and ports could be blown up by terrorists. No energy source is risk-free, but LNG is no more dangerous than many existing chemical or gas plants. It is carried in ships with double hulls and stored in double-walled, insulated tanks at monitored facilities. LNG isn't explosive in its liquid state, and as a gas it is only flammable in a narrow range of concentrations in the air.
Nonetheless, prodded by these fears and by environmentalists, the California Public Utility Commission has sued over FERC's right to authorize a proposed LNG terminal in the Port of Long Beach. The Sierra Club staged protests last month in New Orleans condemning proposed terminals on the Gulf Coast, and it has also fought LNG facilities in Maine and northern California. The energy bill that recently passed the House addresses some of the legal questions, more clearly spelling out FERC's power to authorize terminals.”
But it’s not just the enviros. It’s the yuppies, the tourism industry, and, in the case of Maine, the lobstermen. The problem is the natural location for LNG facilities—the coasts—is also the place where property values are high, and people have the resources to bottle up proposed developments. And the cell phone industry faces the exact same problem in the 'burbs. Lots of demand, lots of potential users, few takers of the offer to plant cell phone towers in backyards--even if they do look like majestic pine trees.
Posted by dan at 03:13 PM
Morgan Stanley’s board Sunday gave embattled CEO Philip Purcell a vote of confidence. While announcing a bunch of largely cosmetic procedural governance changes, the board, composed largely of former McKinsey consultants, thumped the CEO, himself a former McKinsey consultant, heartily on the back:
“We have said consistently that management enjoys the confidence of the board and we reiterate that commitment today.”
Today, the market reiterated its lack of confidence in the board and in Purcell by whacking Morgan Stanley’s shares down a few points. The stock fell from 52.62 to 49.39. Multiply $3.23 times roughly 1.1 billion shares outstanding, and that vote of confidence cost Morgan Stanley's shareholders $3.553 billion.
This is going to make a great case study one day.
Posted by dan at 05:43 PM
Oh, those whimsical Japanese financiers. The Wall Street Journal reported last week that to determine whether Christie’s or Sotheby’s would auction off Maspro Denkoh’s $20 million corporate art collection—a Cezanne, a Picasso, a Van Gogh—Maspro President Takashi Hashiyama,
“informed Christie's and Sotheby's that they would play a game of Rock , Paper , Scissors to break the tie, a method he had used many times in the past to determine important business deals. "It probably looks strange to others," he says. "But I believe this is the best way to decide between two things which are equally good." Indeed, the game in Japan is something of a cultural institution, and is often used to make arbitrary decisions.”
Christie picked scissors, and Sotheby’s picked paper.
What’s next? Eeeni-meeni-minie-mo to determine which creditors of Japan’s numerous zombie companies get paid off?
Posted by dan at 04:12 PM
This is an age of miracles. A coherent, sensible article about business and economics in the National Review. And by Al-Franken-ducking wimp Rich Lowry, no less.
Posted by dan at 03:12 PM