Krauthammer Right Again

I can't really say it any better and won't even try!

There is no substitute for executive experience. Clinton and Reagan both had it.

I know from my own career that academic smarts aren't enough but that real experience with real people is a great teacher. You make a lot of mistakes along the way but that's life!

And if you can't do something yourself, find the people who can. It is guaranteed there is always someone better at something than you are.

Why are Health Care Costs more in Minnesota than in Hong Kong?

I am personally receiving some significant medical treatment and anecdotally I'm seeing costs in the USA as much as 20% to 3 times higher than for the very same thing in Hong Kong. To be fair, I am at one of the best medical centers in the USA and I came precisely to get the very best treatment. I don't begrudge the doctors a premium for that. But I also was in Hong Kong's very best hospitals being attended to by some of the leading doctors there as well, with the first doctor diagnosing my condition within 15 minutes, even though there are less than 5 such cases in HK per year and it is not his specialty.

But here are some comparisons from actual invoices:

Item USA Hong Kong

Lipid Blood Test $102 $64

Chest CT Scan w read $486 $450

Heart ECG $140 $80

Generalist Visit $200 $100

Specialist Consult $400-600 $200

Specialist report MRI   $794 $400

A full 7 day inpatient stay at one of HK's leading hospitals cost me about $8200. A similar experience in US, on an outpatient basis will cost about $2000 more plus my hotel/lodging costs. I'm also told that in Hong Kong costs can be even less at other clinics and hospitals.

There does seem to be more duplication and additional testing in the US. I had one consultation that will cost me about $400 that was perhaps not necessary as it didn't tell me anything that the other doctors didn't already have in hand.

Another difference is that when I ask the doctors in USA about the costs of the tests, they don't typically know. In Hong Kong all the doctors and nurses know the costs and will tell you up front.

Assuming about 15% of the US economy is health care ($2 Trillion), a productivity gain of just 10% would save something like $200 Billion a year. That would pay for all of ObamaCare with money left over and no tax increases for anyone. It seems to me that malpractice reform, incentives to lower costs of drugs, and perhaps even work to improve administrative efficiency at clinics and hospitals could achieve this. Market forces require the private sector to drive efficiency (think Lasik). Why not health care?

Here's the view from my room at the hospital in Hong Kong. Not bad!

The Road to Serfdom

Hayek's writings are getting attention again - although you'd think the following would be obvious:

"We have a basic choice to make: either each of us chooses for ourselves (classical liberalism) or government chooses for us (or to put it otherwise, we all choose for each other)."

If the latter, the historical experience observed by Hayek in the 1930s is:

"Government allocation of economic resources led in the short run to budget deficits, in the medium run to inflation and monetizing the debt, and in the long run dictatorship that imposed a standard of values on society (and totalitarian impulses designed to brainwash people into to subordinating their own preferences to the preferences of the collective). A corollary is that when government allocates resources, rent-seeking and influence peddling become endemic to the system of trying to get your needs met rather than someone else’s."

We are seeing the problem now. The solution must be a trend to smaller government that is less likely to take away your choice.

Happy Chinese New Year!

Gung Hei Fat Choy as they say in Hong Kong! Time to pass out red packets for good luck, have some oranges, and look forward to the year of the Tiger!

Also a good time for some thoughts on various topics for the new year:

Whatever you say about Obama, he's cool. The concert the other night at the White House just oozed it. I like that.

Obama should meet with Dalai Lama and continue to support Taiwan's legitimate defense. US should be vocal about the reasons why. Perhaps tie it too lack of trust in China's support for a non-nuclear Iran. PRC will not respect US weakness. Only strength.

It's the policy stupid! American's are smarter than some people think. The problem with lefty policies isn't that they aren't explained well. The problem is that they stink. Intelligent, thinking Americans - like the majority of the Tea Party movement are wise to it.

Good luck to Bill Clinton. Good thing US health care and health care innovation is the best in the world.

Did you catch the news about Ms. Kissel the murderess in HK? She gets a re-trial but no sympathy. She had it all but murdered her banker husband anyway. She admitted to it as well. She is not a victim. She is a killer.

Go Go Goldman Sachs - great company in an important industry. Make no mistake: Investment Banks are part of the infrastructure that allocates capital efficiently. This is a pre-requisite for jobs and innovation. If Goldman's investors or customers have a problem with that, they can take their money elsewhere. Regulators need to ensure fairness without killing the engines prosperity.

When will unions start caring about the customers they serve? I've had to deal with unions in the New York recently and what a bunch of selfish cry babies. The best solution is simply to go where there are no unions. I can get stuff done at a fair price and timely fashion. This is good for everyone.

You know what? I support Michelle Obama's latest project American's are too fat. It's not healthy and it is bad for society as a whole. I wouldn't have branded it about child obesity - childhood nutrition is a better label I think - but the concept is good.

America needs to stop thinking we're so superior. I know a generation of Indian and Chinese students who will kick your ass academically and with hard work. Better still let them all immigrate to the US and become steeped in American values - a lot of them would help us kick global ass (in a good way too).

No Joe Biden you did not win Iraq. First of all, Iraqi's won it. Second it was Bush administration policy. The most you can say is that Obama kept Sec Def Gates.

An increase in jobless claims is not a reduction, even if the rate of increase of claims was lower.

Climate change is not the same as weather. Even if we don't know for certain if temperatures are going up or down or the degree of change caused by human activity, what we know for certain is that climate will change. Warming is probably better than cooling, since it leads to higher crop yields, more biomass, and has been the source of improvements in the human condition every time. But how to deal with change? One tried and true method is free-market capitalism. Works every time and doesn't require involuntary massive wealth changes. As for island nations such as the Maldives that might be under water? Well where were humans the last time the Maldives were underwater? Not there anyway. Or if you want to build where there is land below sea-level, hire some Dutch guys. They have 500 years experience.

Chavez, Mugabe, Stumpy in Iran, and all the apologists for same - I have no time for you. Your incompetence speaks for itself.

As for Greece. What were you thinking? Nobody else in the Euro zone owes you anything. Issue some bonds, cut spending, and raise the retirement age.

Does anyone know what 5th amendment (i.e. Miranda) rights exist prior to entering the USA, i.e. before you get past the immigration officer? Is it different for US citizens vs. visitors? I suspect there aren't any such rights until after you get through to baggage claim, although while on a US flag carrier (e.g. the flight) you might have such rights.

Sarah Palin: nice notes. At least you don't need a teleprompter to talk! No different than David Letterman's little blue note cards.

And what evidence that Obama and team are so "smart"? Articulate doesn't equal smart. Inability to deliver is evidence of not being very smart, well at least not very clever.

There you have it! Happy year of the Tiger everyone

So What Are My Qualifications To Comment Anyway?

I occasionally am asked what are my qualifications to pontificate on these various topics anyway? Well OK, here they are:

1) I have a PhD from UC Berkeley in Electrical Engineering, 1991

2) I have over a dozen peer reviewed articles in topics that include computer simulation, related physics, and comparison of simulation and experimental data (this has some relevance to climate change modeling for example). I have also authored several book chapters on working in a Japanese company, nanotechnology public policy and other topics.

3) I have worked for over 15 years in information technology for the financial sector. This provides insight for both fields and how they intersect.

4) I have lived in Japan for 16 years and now Hong Kong for nearly 2 and have travelled extensively throughout the region, including China and India.

5) I have run organizations with over 500 employees and budgets exceeding $200M

6) I have also worked in the pharmaceutical industry, consulting on IT as well as set up a a joint venture venture-capital funded research laboratory for a major global firm. I have some related experience as a free lance consultant and entrepreneur.

7) I have helped produce underground music parties in the depths of Shibuya and Roppongi, Japan. I have consulted for fashion industry in Japan as well (!)

7) I pay a s***load of taxes.

I am not: a lawyer, a practicing academic, nor am I particular good as a entrepreneur. There is a lot I don't know, but at least I am willing to admit that!

A Few Thoughts on Toyota

As a 17 year resident of Japan, I can see clearly the problem. Japanese culture is not good at transparency. It is the land of nuance and the unsaid. But that's no excuse. Japanese multinationals should know better when operating outside their backward. I've been telling this to Japanese leaders for a good part of that 17 years and I'm not the only one. The Japanese people are beginning to demand the same transparency as well.

Indeed in the financial sector in Japan regulators require immediate disclosure of issues. I've been there and the FSA doesn't tolerate even 24 hours delay. So why would Japanese car maker expect any differently in the USA.

In any case here's what should have happened:

1) immediate disclosure and recalls as soon as issue identified.

2) disclosure to appropriate regulators as soon as possible.

3) autonomy to the US corporate leadership to get the word out quickly. If you don't have the right person in the job or can't trust him (or her) - then get someone else?

But let's also keep things in perspective. Other car companies have also had these problems. Remember exploding gas tanks on the Pinto and accelerator problems on Audi's? There was a joke about not wanting to be between the two!

Also what if GM had a similar problem. Doesn't US ownership of GM present a conflict of interest with US regulators? Would the Dept. of Transportation response be as robust? Just asking!

Why Smaller Government is the Solution

The linked posts makes the good point that voters on both sides of the political spectrum are often ignorant of the issues, or more likely refuse to entertain data that doesn't support their preconceived notions. The solution is simple - don't allow bad decisions to cause harm - through smaller government with less power.

Let's expand on that though by working backwards:

Corruption leads to bad things - like shoddy construction and support services that result in a death toll in an earthquake that is much worse than it should have been - like Haiti.

Power Corrupts. The mad pursuit of power also leads to oppression, lies, and all kinds of things that are by definition evil. People suffer, live in poverty and die.

Big Governments are by definition more powerful than smaller ones. Quite simply, that's because a big government covers more and thus has a bigger impact on your life.

Big governments might be well intended: Here's a problem! Let's fix it by getting a bunch of people together to work on it! Good luck for us, we have a government of people all ready to help!

So what started off innocent leads to corruption and bad things.

So what's the alternative?

Let's keep it small - government should do only what is proven cannot be done by any other means.

Small government can't corrupt as easily.

Let's be careful something else doesn't get too big. Small government can set laws to ensure other things don't get too big - e.g. anti-trust in companies

Less power = less corruption = less evil. Don't be Evil means not being too big.

Now how are you going to vote next election? For Evil or not Evil? Here's a guide:

Not Evil requires a government that:

a) takes less taxes from everyone (including you)

b) passes less laws affecting you

c) can't give you something for nothing (because otherwise it took it from someone else)

d) doesn't tell you what to do so long as you're not hurting someone else.

By the way this isn't about political party. It is about whether you are contributing to evil or not. So are you going to vote for big government, higher taxes, nationalization of large sectors of the economy (e.g. ObamaCare) or not?

Actually ditto for companies - more companies competing with each other is better. Wal-Mart might be a counter example (bigger purchasing power to drive lower prices for more people) but Wal-Mart needs competition too. So do big pharma and large banks.

Less is More!