Politics and Regulation

Thanks for Everything

A British friend was commenting to me on how "odd" he found the American celebration of Thanksgiving. "There is no equivalent holiday in Europe, or anywhere else in the world." he said. "You have an entire day devoted to conspicuous consumption, where everyone anticipates eating and drinking far more than usual, and boasts about how excessive their indulgence was. It's so quintessentially American." Of course, Thanksgiving Day is just a warm-up to what follows; the holiday shopping season. How...more

Can Startup America revive US small business?

A couple of weeks ago in my opinion blog "Awake at 3 o'clock" I pointed out that politicians pronouncing small business owners as the saviors of the economy is a misplaced strategy. ("SMB isn't the cure for the economy") Most SMB owners are ageing Boomers, disinclined to take big risks as they seek greater retirement security. Now the government is rolling out a new program "Startup America" to foster the development of innovative entrepreneurs. The program will support early-stage companies by...more

It's Time for the Boomers to Step Up

Why I Need to Say This Three years ago I wrote an open letter titled "Last Chance to Save America" and sent it to my entire email list. It went viral, and I received almost a thousand emails in reply. I also promised not to send another letter to my entire contact list, ever. So today I am using my blog, with the hope that you will forward a link to others if you agree with me. Like before, discussing a complex and important issue can't be done in a few hundred words, so please bear with me....more

If You are a Victim; You are Guilty.

Let's say you own a small Italian Restaurant. Fifteen tables. Pasta, Pizza, beer and wine. Not really a white tablecloth place. More like plastic red and white check tablecloths with Chianti bottles and drippy candles. On a good Saturday night you might take in $2,500. You average about $400,000 a year in sales. You are closed Mondays, because everyone in the family needs a day off.One Tuesday morning you come in early to start food prep for the week. The mail is piled on the floor where the mailman...more

Do you understand where this is going? Three

We worked on an interesting hypothesis with a client the other day. He has 100 employees (or close enough to make the math easy.) The company pays for 75% of each employee's health insurance. Additional coverage for the family is at the employee's expense. How does the math work under health reform?Right now premiums average $370 per month. About 60% of the workers take insurance, so the company pays $277.50, or right at $200,000 per year in premiums. Let's say that once premiums are balanced...more

Do you understand where this is going? Two

Between 1997 and 2009 I had one client audited by the Department of Labor for Wage and Hour compliance. In the last 90 days I've had two.The first had an auditor who brought along a trainee. The second brought along three trainees. When asked "How can you train three people at one time?" she shared that everyone in her office was being asked to train as many auditors as possible, as quickly as possible. She complained that the DOL was hiring auditors so fast they had no place to put them.There are...more

Do you understand where this is going? One

One of my TAB Board meetings has an insurance broker who followed the reform debate closely. The discussion was illuminating.It is one of many that I've had in the last three months, and it's all beginning to come together. I will discuss this in short posts over the next few days.Health insurance age related risk premium differential is limited to 3:1 in the reform bill. That means that if you currently pay $125 for a young healthy male employee, you won't pay any more than $375 for an old...more

Just sign here

In January of 2000 I was asked what I thought the first big change would be in the new century. I said (and it's been documented elsewhere) that we would have a national health care plan by 2011. It wasn't a brilliant conjecture. If you follow the percentage of GDP that we are expending on medicine as closely as I do, it has been obvious for a long time that what we have been doing up until now is unsustainable.I further predicted that small business owners would lead the charge...more

They bite the hand that feeds them

On Friday a local columnist in the San Antonio Express News, Rhonda Templeton, wrote about a recent survey of employees lying on the job. I quote: " Bending the truth is a long time tradition in U.S. workplaces- as the saying goes, 'There are no ethics in business.'" This inane "quote" (if it's an axiom it is one I've never heard before) surprised me because it was on the front page of the business section, but was far from shocking.Ms. Templeton should know better. Business ethics are inherently...more

Technology- Investment or Expense?

I regularly hear one of my small business owner clients saying something like this. "Dammit! I have to buy another computer. I just spent (fill in) on this one just (fill in) years ago."Why are we so offended at the need to regularly buy new technology? Big corporations rotate hardware on a scheduled basis, but most small business owners see corporate America as terribly wasteful anyway. The need to buy or upgrade our computers has been with us for at least 25 years. We change cell phones every...more

Is America the next Rome?

James Fallows has written a massive, thought-provoking  article about America's current social, political and economic issues in The Atlantic. Like so many of us that have spent time overseas, he looked at the US with fresh eyes on his return.In Fallows' case, he moved his family to China for three years so he could have a deeper journalistic perspective about that country's role in the 21st century, and moved back a couple of months ago.He comes to mixed conclusions about our issues...more

Socialized Medicine, or Capitalized Medicine?

In 2000 I was asked by a client to make a single business prediction for the new millennium. It was "By 2011, we will have some form of national health care plan, and small business owners who have been priced out of the market will lead the charge on Washington demanding it."I think I'm going to be proven prescient. It wasn't difficult, given the inflation in health care costs, the fact that a new president would be in office, and the failure of business or government to do anything to impact our...more

Is It Time for Courage?

A friend of mine occasionally shares his copy of EcoTrends®. This research newsletter tracks 41 different economic indicators. Since I'm not actually a subscriber, I refer you to their site if you're interested in the details of their analysis.The Institute for Trend Research (the publishers of EcoTrends®) divides economic cycles into four phases. In Phase A economic signals indicate a strengthening. The economy, or at least that industry, is generally on the upswing. In Phase B most indicators...more

The Criminalization of Integrity

Yesterday Congress passed the credit card reform act. The cynical part of me doesn't like another law that is designed to protect the stupid from themselves, but that's not what I'm really upset about.The New York Times published an article Monday with several quotes from both credit card issuers and politicians. To paraphrase, they said that it was time to make the freeloaders pay up. For too long there had been a certain class of credit card user who rode on the backs of the others, and it was...more

A New Tax

I dislike taxes as much as anyone. I have a copy of Davey Crockett's speech "Not Yours To Give" and I think it is true, albeit completely ignored since 1933.But taxes are a fact of life, and some serve a correct and appropriate purpose. Taxes on gasoline to pay for highway repair make sense to me (if that's all they were used for.) Few other taxes serve such a clear purpose. Frankly, I'm at a loss to think of another.We cannot fix Medicare. Changing the eligibility age or increasing payroll deductions...more

If This Goes On...

Today the government is announcing a trillion dollars for "asset based markets." The government has become a vague amalgam of "Treasury and Federal Reserve officials." The asset based markets are apparently banks, hedge funds, credit card issuers and private equity funds. If we have reached free money for everyone, it hasn't trickled down to me and the people I know yet.Yet the European and Asian markets this morning continue their meltdown. They understand that the right answer isn't just getting...more