Why high gas prices could be good for all of us

It seems that everywhere I look these days there are doomsday stories of how we are going to see $5 or $6 prices for a gallon of gasoline by the end of the summer.  Fox News runs stories on this topic about every 12-15 minutes and seems to be trying to speculate that higher gas prices will be the down fall of Obama's re-election bid in 2012.  CNN has spent a fair amount of air time on the topic as well with a slightly more positive spin at times.  I have seen print press articles too numerous to count and it seems to be soaking up a fair amount of bandwidth online as well.  Obama even appointed a commission to look into price fixing or other such ways that we could be getting gouged at the pump.  There certainly is no shortage of discussion on this topic.  There are a multitude of reasons behind this increase in gas prices and to avoid a dissertation on supply and demand and economics I will not cover that here.  The reality is that the price of a gallon of gas is already "high" and will get much "higher".  I put those in quotations because we still pay relatively little compared to what other countries pay.  An immediate example would be Bermuda (a lovely place I just visited) where gas prices are hovering at $8 to $9 per gallon.  In most European countries the price of a gallon of gas is similar to Bermuda but usually a slight bit less.  For instance, in England the prices are running around $7 - $8 per gallon (though they sell it by the liter or litre on that side of the pond).

As a driver of a gigantic truck that gets an EPA estimated 14 mpg city and 19 mpg highway, I'll be the first to say that I wouldn't necessarily welcome such a scenario.  It would certainly cause a lot of inconveniences and there would be plenty of adjustments that would need to be made.  And I will be the first to admit that the rising prices have already started to make a small but measurable amount of impact on my day to day driving decisions.  I'm being a bit more mindful of that little area on the instrument cluster that gives the average and instant estimated mpg.  But with the estimated price increased that may unfold through the next season or two there will be more significant changes to come.  But what will those changes be both short term and long term and what will be the consequences?

The first and most obvious change people are likely to make will be something similar to what I have already started doing.  People will start using the brake less and accelerating a little less vigorously.  The next accommodation will be that trips will be bundled or avoided altogether if possible.  A more drastic measure would be to trade in that gas guzzler for a smaller car with higher efficiency.  We saw a slight bit of that the last time gas prices soared but it was really artificially boosted by the tremendously costly "Cash for Clunkers" government program.  However, if we see sustained prices in the $5 - $6 range we may very well see more people that have no choice but to travel by automobile starting to trade in some of that extra size and luxury for some extra efficiency and affordability.  If these changes are sustained over an even longer period of time then more drastic changes will come.  Eventually those that live within shorter distances of their needed destinations may choose to use a bicycle or moped or even go biped (walk) when physically possible.  Over a longer term, people may even choose to live closer to their needed destinations to avoid the need for travel by automobile.  All these are viable options to minimize gasoline consumption in the near and long term in an effort to control household costs associated with its consumption. 

But how on Earth could all those changes be considered a GOOD thing for all of us?  I know the premise of paying more for a commodity and having to make unwanted changed in our lives to minimize the negative financial impact sounds utterly absurd but hear me out.

The first change that I mentioned above is likely already being instituted on a fairly large scale.  Do you try not to stop for that red light but rather coast slowly up to it trying to avoid the dreaded full stop?  Are you being a little more mindful of how you pull out at that 4-way stop trying to conserve just a little fuel?  Have you checked your tire pressure shooting for that optimum 32 psi to maximize mileage?  Then you are already taking part in the changes.  Congratulations.  Not only are you protecting your wallet in exchange for a few seconds added to your arrival time, you are also reducing your greenhouse gas emissions.  In my gigantic truck, I can easily go from about 13.5-14mpg in city driving to about 15.5-16mpg simply by obeying the speed limit, minimizing brake usage, using "rolling stops" to avoid having to start from a standstill and accelerating judiciously.  I haven't even seen a measurable change in my arrival times but my fuel mileage has increased by about 12%.  If I'm spewing 12% less greenhouse gases/CO2 into our environment, that has to be good right?  That's a very tangible improvement in my "carbon footprint" and it actually saves me money.  How many "green" products can you go buy that actually save you money over alternative products?  I can't think of any.  But here is one setting right in front of our faces and we're acting like it's some sort of punishment.  I guess a cooler, cleaner Earth could be thought of as a positive, right?

Now let's think more long term.  The next change I mentioned was bundling trips or avoiding them altogether.  Sounds like a bummer, huh?  You can't just jump in your cars and ride out to the shopping center to browse around and buy things you don't really need?  Have to make a list and check it twice before heading out to Wal-Mart or your favorite local grocery store?  I guess it could be thought of as a minor inconvenience.  Or you could appreciate the fact that when you do get out on the road there will be less traffic.  You could appreciate the fact that the roads aren't as torn up with pot holes and worn down at the edges because the traffic load is lighter.  In a perfect world, the state might even cut taxes because the upkeep of the roads wouldn't be as expensive with less traffic.  You might even get fewer traffic tickets.  I know it may seem outrageous but avoiding all those trips may even open up a little quality time to spend with family at home just enjoying their company.  Heck, you may even save more than expected when you don't buy that spectacular new gadget at Super Mall 3000 because you weren't needlessly browsing the stores.  I guess all those could potentially be seen as positives, right?

The next thing likely to happen would be trading in larger and less efficient vehicles for smaller and more efficient versions.  As mentioned before, we saw a fair amount of this during the "Cash for Clunkers" program but that rise in gas prices was so short lived that it wasn't really a sustained change.  When you couple that with the incentivized reason to buy, it was even less impressive.  But on a positive note, the last surge in prices did coerce the American car companies into developing some fairly impressive new smaller and more efficient models.  GM has started to roll out its ground breaking new Chevy Volt which has the potential to be an all electric model if driven less than about 60 or so miles per day.  I say "the potential to be" due to the fact it has an on board gas engine if extended range driving becomes a necessity.   Ford has rolled out some impressive compact models getting in the range of 40mpg.  Chrysler is on the verge of starting to import Fiat models from Europe that have a proven track record and are small and very efficient.  I personally can't wait to start seeing the Fiat 500 on roads here.  It is a sharp little ride.  If the masses start to trade in their larger vehicles for more efficient versions, the American car manufacturers are in a much better position to capitalize on that than they were before.  This could serve to help stabilize the American auto industry if a significant percentage of auto traders choose these models.  And even if they don't most companies like Toyota and Nissan have American factories and use American parts in percentages equivalent to and sometimes even more than their American counterparts.  And we haven't even mentioned the decrease in "greenhouse gas" emissions with these changes.  Even if people chose mopeds or public transportation we would see big decreases in greenhouse gases as well.  I guess stabilizing the American auto market and cutting back on greenhouse gases to protect our Earth could be thought of as a good thing, right?

Let's get more drastic, shall we?  Let's say we go 2-3 years with gas prices sustained in the $6 range.  This would motivate many more people to use bicycles or walking as alternative transportation solutions.  With the explosion of obesity in this country (no pun intended), many maladies have come along with it.  The number of people suffering from diabetes, hypertension, high cholesterol and heart disease are increasing at an alarming rate.  If we don't get a handle on the obesity epidemic we may very well become the first generation in history to have a shorter lifespan than the generation that preceded it.  That would be an unspeakable tragedy.  In my opinion, the availability of incredibly cheap transportation by automibile has played a part in contributing to the high obesity rates.  It has become so cheap and easy to jump in a car and go wherever we want that no one even considers "manual" transportation any more.  In fact, the existence of such cheap transportation has caused us to construct an environment where it has become almost impossible to use "manual" transportation.  By building our cities out into the suburbs, we have limited the viability of this as an option for transportation.  The distances are too great and the safety is a definite concern.  But if we make the change to bicycles and walking for alternative means of transportation we can take a big step in fighting these diseases.  There are mountains of research showing that increased activity levels delays the onset and curbs the progression of diabetes in obese individuals.  There are also mountains of research showing that higher activity levels have a negative correlation with obesity (i.e. more activity decreases the likelihood of having diabetes).  If people start to choose bikes and feet for their transportation we could potentially cut off the obesity epidemic and decrease the number of people with diabetes.  I guess less obesity and less disease could be thought of as good things, right?

What if people started to live closer to their work?  When I lived in Lexington, Kentucky there was a lot of discussion about urban sprawl.  Lexington and the surrounding areas have a rich tradition of horse farms.  A lot of effort was made to reduce "urban sprawl" to protect those farms.  Unfortunately, the only thing that was really accomplished was the creation of cookie cutter neighborhoods with zero lot line.  In many of the neighborhoods there, you could literally stand between two houses and be able to touch them both at the same time.  And there were endless rows of houses like that.  "Urban sprawl" is a concept that nearly every city has been unable to get much control over.  The bottom line is that people want to have a yard and as long as they can afford it then that is what they will have.  But with sustained high gas prices, it is a very real possibility that people will no longer be able to afford those little pink houses that have made up the American dream for so long.  If transportation via auto starts eating up a significant portion of the American family budget, then people will have no choice but to live closer to their work which would effectively halt urban sprawl.  Maybe we have finally stumbled on the panacea for urban sprawl.  Maybe we finally have the reason to stop paving paradise and putting up parking lots.  Maybe we can finally stop encroaching ever further on wildlife habitat.  I guess those could be seen as good things, right?

But what about business?  How is business going to be affected by surging energy prices?  Well, you have me there.  Businesses large and small will be affected and the majority in a negative way.  Wal-Mart will no longer be able to truck your Heinz ketchup from Pittsburgh to Los Angeles without a hefty mark up because that transportation will be pretty costly.  McDonald's will have to increase their dollar menu to a 2 dollar menu because the cost of transporting buns and burgers will be drastically higher.  Your local convenience store will have to charge more for your Coke and Snickers because it too has to be trucked in at an increased cost.  In fact, the cost of nearly every tangible good will likely increase in a substantial amount.  All that seems bad, huh?  So where is the positive?  We'd likely see an increased demand for products made locally because of the competitive advantage conferred by not having to be transport their goods as far.  That increased demand could possibly create the economic circumstances needed to spur local business development and small business growth which have historically been the engine of economic recovery.  It's possible that could lead our economy out of its prolonged funk.  We'd likely see more locally grown fruits and vegetables available.  Who needs to buy blackberries from South America that have been transported halfway around the world at considerable cost when you can buy blackberries from the Chesterfield Berry Farm at a fraction of the cost?  As an added benefit, there would be less need for spray pesticides and preservatives because of the decreased time from harvest to store shelf to kitchen table.  Existing small business would likely see record growth.  Instead of buying that more expensive Miller Lite trucked in from Milwaukee you just might buy that Legend Brown Ale made locally here in your hometown at a fraction of the cost.  I guess at least some of those things could be seen as a positive, right?

So, there you have it.  After what has seemed like a non-stop major news media onslaught of negativity and doomsday predictions if gas prices continue to go up and stay that way, I just wanted to point out that maybe not all of it would be doom and gloom.  If we choose to look hard enough and in the right way, we can see the positive in anything out there.  After all, that's what gets us through the day anyway.  Life isn't about having everything that makes you happy.  It's about learning to be happy with what you have.  I choose to be happy no matter what.

Where My Parents Got It Right

As most of you already know, my wife teaches a 5th grade gifted education class at a local elementary school.  She has about 10 years of experience teaching in a variety of classroom settings ranging from "inner city" to "suburban privileged."  She has truly enjoyed and appreciated seeing the broad spectrum of educational settings and has come to appreciate her current position very much.  As you can imagine, she has also seen the spectrum of behavioral issues including what likely represents the entire range of children with ADHD from mild to wild.  As you would imagine, some of those experiences have been difficult and some have been quite rewarding.  She has seen children go from barely functional to fully integrated into the classroom setting due to the miracle of modern medicines.  Unfortunately, she has also seen a considerable number of children who seemed to have no improvement on medications but the parents were still convinced they were necessary and efficacious although there was no tangible evidence to support that.

As nearly all of you know, I am a physician working towards specializing in both Internal Medicine and Pediatrics.  I have certainly seen no shortage of parents bringing their children into the Pediatric Clinic for evaluation of possible ADHD and have been involved in managing ADHD enough to have some degree of comfort with it.  I have seen and evaluated children that I felt undoubtedly had signs and symptoms consistent with a diagnosis of ADHD.  I have prescribed medicines for some of those children and have gotten reports back from parents that the medications were helping immensely.  As you can see, I believe that ADHD is a real diagnosis/condition.  I choose those words carefully, though.  I feel that ADHD is not a "disorder" but rather is on the spectrum of normal behavior with a tendency towards the extreme end.  I believe strongly that it overlaps with a number of true psychiatric disorders in many cases and that is unfortunate because it leads to negative stereotyping and labeling of children afflicted with the condition.  I believe strongly that it is extremely over-diagnosed and that medications are thrown at a number of children/families in haphazard fashion. 

We live in a world today that demands a diagnosis for every subtle nuance in behavior or any deviation from "normal" whatever that may mean.  This has led to an explosion in the number of diagnoses for every type of condition ranging from seasonal allergies to autism spectrum disorders to restless leg syndrome to fibromyalgia to, yes, even ADHD.  Many things that would likely have resulted in a stern "talking to" or a swift swat to the bottom in days of yore now result in a diagnosis and prescription.  This is a little unfortunate because it has alleviated the need for a lot of children today to take responsibility for their own behavior.  It prevents children from adapting to their personal shortcomings and devising ways to enable them to be functional and successful human beings without the need for pharmacologic or social assistance.  I'd like to relate one particular example of this happening.

One of my wife's students this year carries a diagnosis of ADHD and is on medicine.  OK, more than one but for the purposes of this story one in particular.  He is undoubtedly a talented and intelligent child as many children with "ADHD" are.  He has qualified for the magnet gifted education program in the area where we live and by my wife's account has been a more than capable student even in the competitive environment that exists in the gifted education program.  Unfortunately, his grades have suffered to some extent as a result of his ADHD type behaviors.  He has missed several homework assignments because he has neglected to write down the assignments and so he didn't know what they were when he got home and therefore could not possibly complete them.  Of course, his parents are highly concerned about this and scheduled a meeting with the school principal and his primary teacher (my wife).  At the meeting, his parents requested that each of his teachers help out by writing down his homework assignments for him and sending them home so that the parents could then prompt him to do his homework.  On the surface, this may sound like a reasonable request but when thinking about it more deeply I take issue with it for a number of reasons.  First, it is an unreasonable demand to make for the teachers.  Why should it be the responsibility of the teacher to write down his assignments for him?  Isn't that part of the assignment - learning how to be responsible enough to write it down and then remember to do it?  Secondly, where does that responsibility end?  Each of the three 5th grade gifted teachers at the school where my wife works has roughly 30 students.  Should they each be responsible for writing down the assignments of 30 students to help them remember?  Thirdly, doesn't it give him an unfair advantage if he has someone helping him remember his assignments and reducing his need to be responsible?  As if that wasn't enough problems with this request, I have still more.  I wonder when exactly these parents are going to decide to teach this child how to be responsible.  I wonder when they are going to let him develop his own adaptations and overcome his shortcomings.  I wonder when they are going to let him fail so that he might learn from that failure.

Let me be clear about ADHD and me.  There is no doubt that if I was growing up in today's world I would be labeled as having ADHD.  I displayed all the characteristic behaviors early on in life.  I was a handful for my teachers not because I wasn't capable but because I was disinterested and easily distracted, a "troublemaker" or whatever you want to call it.  I made mostly good grades up through high school not because of my diligence but because I was intelligent enough that I didn't really have to do much work to keep up.  I got easy A's in classes that could hold my attention and nearly flunked those that didn't hold my attention and I didn't really care either way.  I got a "D" the first semester of my freshman year in high school in a typewriting class (yeah, we used real typewriters) because I just wasn't interested in the class and decided to talk to my friends and be disruptive because that was more fun.  I got a "C" in high school Chemistry because I didn't like the teacher and wasn't all that into it at the time.  I got a "B" in 8th grade Science class even though I had A's on every assignment because I didn't turn in my folder of all my work.  Not turning in folders was a recurring theme in many of my classes and I lost a ton of easy points because it was a lot of work for a kid with "ADHD." Keeping up with a lot of papers was difficult and I reasoned that it didn't really reflect any level of intelligence anyway so I just didn't even attempt to do it.  That really drove my parents crazy.  And let me be the first to say I absolutely never did homework in junior or senior high school.  I managed to get through high school relatively unscathed in spite of myself.  I then landed in a small college for undergrad.  I didn't really apply myself there either for a number of reasons.  When I felt like it I could do relatively well but I rarely felt like it.  I preferred to party my way through school, hanging out with friends and having fun and very infrequently studying.  I did start doing some homework but just enough to get by.  But still no one was forcing me into performing well in school and that was probably a good thing.  By that time, my mom had passed away and my dad was relatively hands off with directing my life (again probably a good thing).  Eventually I would graduate with a less than stellar GPA and a Bachelor's Degree in Business Administration.  I ended up working for a few years before deciding to truly get my life together (maturing?).  Eventually I would develop some coping mechanisms in part due to a number of activities I was involved in and life experiences and probably the aging process itself.  I then decided to go back to school and got a Bachelor's Degree in Chemistry and gained acceptance to Medical School. 

I am truly thankful for my parents approach to all the problems I gave them.  Rather than cajole me into doing every little assignment and having my teachers write down my homework assignments, they were able to practice enough restraint to let me learn from my mistakes.  And they did let me make plenty of mistakes.  And it did take a long time for me to get myself together.  I know it was VERY hard for my mom to sort of stand on the sidelines and let me find my way all while her health was dwindling.  I know very well that if I had managed to listen to her and do all those things she said I should do that I would have been a few years ahead of schedule from where I am today.  And, yes, my folks were right a lot of the time.  But the place they got it most right was in having the patience to let me find out for myself how to do things, to develop my own coping mechanisms, to let me find my way and even to fail when necessary so that I might learn what that is like and how to keep it from happening when it really counts. 

I wonder how kids like the little boy in my wife's class are going to turn out.  How can we possibly expect him to mature when he has no reason to?  How can we possibly expect him to figure out a way to remember to do his homework if his parents get the accommodation they are requesting and his teachers have to write down his assignments?  Is it even a big deal if he gets a "B" or God forbid a "C" in 5th grade because he forgets to do his homework?  Isn't that the best possible place to learn that responsibility?  I mean, who really cares about this kids grades in 5th grade?  In the grand scheme of things, they are absolutely meaningless.  They're not going to prevent him from getting into college, right?  Is his ego so fragile that he can't handle a fail here and there so that he can have the opportunity to make adjustments and learn from those mistakes?  Are his parents being too overbearing?  And for that matter, should he even be on medicine if he was smart enough to qualify for gifted classes without the medicine?

I think we as a society are expecting too much out of our kids.  If they somehow don't perform perfectly, we are searching for a diagnosis and a medicine to make them better.  We expect them to get straight A's and conform to our unrelentingly high standards.  We freak out if they miss an assignment.  I think the lesson we need to learn most is that it's OK to fail and sometimes the best learning is born from that failure.  If kids never have to pick themselves up and dust themselves off then try again to do better, how can we expect them to be able to persevere and become functional adults capable of dealing with all the stresses that life can throw at them?  I guess the bottom line is that I am incredibly thankful that my parents were OK with letting me fail and even fall on my face from time to time.  And I am incredibly glad they were there to help pick me back up and encourage me to try again until I got it right because without them I wouldn't be prepared to deal with the life I have to lead now.  I wouldn't be able to see the inevitable failures and be able to not only deal with them but find the motivation in those failures to do better and overcome them.  And for that I am incredibly thankful.  I can only hope that I am blessed with the same patience in dealing with my children so that they too may learn how to deal with life.  One fail at a time.

A real immigration solution

There has been a fair amount of debate on immigration in this country lately and it has certainly become something of a "hot button" political topic.  You have the right side of the aisle arguing against immigration in general.  They seem to believe that if we let one more Mexican into our country that somehow that extra little oomph will destroy the economy, bankrupt Social Security, overburden Medicare and Medicaid and unbalance the price of vegetables all while simultaneously causing us to lose the "War on Drugs".  I, of course, am only mildly exaggerating there.  Meanwhile, you have the lefties who seem more in favor of our traditional immigration policy which is to say essentially a total lack of policy.  OK, I jest.  The left seems to favor our traditional stance which is more or less to not enforce the existing policies as they are written.  Really neither of those stances is viable in the long term.  If we choose the right side, the logical conclusion is that we have to build huge hideous monstrosities along our border to prevent easy passage between countries.  We would also need to hire a bushel or fifty of border guards and arm them appropriately to prevent any criminals from trespassing.  This would certainly not be a definitive fix, though.  How could it be?  The drug smugglers have already shown they are capable of building elaborate underground labyrinths to circumvent any attempt at stanching the flow of lucrative drugs into our fine country.  So, it would seem to be unbelievably short sighted to build an enormously expensive structure when the means to bypass it already exist and have been proven to work.  On the left side, we have basically our current policy.  I would argue that for the most part it really hasn't been TOO horrible as it is but it is a dangerous proposition as well.  In the long term, having laws that are at best not enforced willingly or at worst are unenforceable promotes a lack of respect for the law and essentially emboldens the populace not only to ignore that particular law but others which may be more essential.  Think about it for a minute.  When you are on a road that has a 35mph speed limit but everyone else seems to be doing 50mph do you continue to do 35mph or do you sort of keep up with the traffic flow?  When you are doing 50mph in that 35mph zone are you more or less likely to stop for that yellow light?  So the current policy is dangerous for similar reasons but also because of other existing policy issues.  The 14th amendment would be a reasonable place to start that discussion.  When people talk about the 14th amendment they are mostly referring to the Citizenship Clause which was a response to the 1857 ruling in Dred Scott v Sandford that held blacks could not be citizens.  The 14th amendment (and more specifically the Citizenship Clause) which was enacted in July 1868 states that those children born in the USA are citizens.  This was originally intended to apply to freed slaves but later the merit and intent of this amendment was tested in the Supreme Court.  The case of United States v Wong Kim Ark in 1898 held that under the 14th amendment a man born in the USA to foreign nationals (in this case Chinese citizens) who have permanent domicile and residence in the USA and are carrying on business in the USA and whose parents are not foreign diplomats or here in other official capacity by a foreign power are citizens of the USA.  Currently, this is bounced around in the media as the "Anchor Baby" law.  Thus it is known due to foreign nationals who come to this country late in pregnancy with what would seem to be the intent of dropping a litter and instantly having legal protection against exportation due to their status as parents and caretakers of a US citizen (i.e. having an anchor).  If you look at this closely, it would seem this is only possible based on a lack of willingness to enforce the laws as written and instead applying a loose interpretation.  What I am saying is that if you look at the letter of the law, those that traverse a border and squirt out a baby only gain citizenship if they were here and permanently domiciled while carrying on business and not here in official capacity from another country.  Certainly, if we just enforced this as written it would eliminate a fair percentage of these so-called "Anchor babies".  But enforcing that law to the letter would soak up an inordinate amount of resources and may not give us the result we are looking for despite our best efforts.  But why is the Anchor Baby a problem in the first place?  The right wing would have you believe that having (mostly poor blue collar) families cross the border and have a baby entitled to citizenship is a financial drain on the government due to social programs such as WIC and Medicaid.  While there is a degree of validity to this argument, it is also true that if we simply enforced the rules as written this would not be an issue.  So, it should be fairly apparent that this is one fine mess with no viable solution.  Or is it?  What if we instituted a brand new policy on immigration that was more enforceable, more rational, and had the potential to alter the demographics of those who choose to immigrate in the first place?  I would suggest a three headed monster as a solution.  By that I mean there should be three pathways to achieve legal citizenship.  The first option would be a "buy in".  In this model, you could pay a one time fee to obtain legal status.  This would be great because it would be consistent with the "American Way" in that those who would use this pathway would already be accustomed to buying their way into whatever they want.  The buy in price would have to be set fairly high, say $50,000 or possibly more.  This would ensure a certain percentage of white collar workers exercising this pathway.  In addition, such a large fee would assure us that people coming in via this route had a good level of commitment to staying.  The second pathway to legal citizen status would be to serve for a period of 3 years in our military.  This would be a period in which the candidate for citizenship would be paid in accordance with what other military enrollees are paid and they would be expected to be competent in their verbal and written communications in the English language because the battlefield is not a place for poor communications.  The third and final pathway to citizenship would be to spend a period of 7 years in the USA working and paying taxes.  This trial period would not entitle the candidates to any social benefits such as Medicare, Medicaid, or Social Security even while they toiled away and put money into the pot for these programs.  This would allow us to build some sustainability into these social assistance programs while providing a reasonable pathway to citizenship for those who would like to seek it.  In addition, it would allow for the same worker protections afforded legal citizens to these hard working citizen candidates while they worked to prove their commitment to this country.  So, there you have it.  My possibly overly simplistic solution to immigration.  I'd be interested in hearing other opinions on how to fix this issue.

Don't fall for this scam!

I recently posted a link on Facebook to an article on Fox Business reporting that Goldman Sachs has invested $50 million and a Russian investor (Digital Sky Technologies) has invested an additional $450 million in Facebook based on a prediction that the company's valuation is at $50 billion.  To me, this is the most blasphemous financial speculation I have come across in some time.  There is simply no way that the intellectual property and hard assets of Facebook could have valuation at anything near that exorbitant amount.  For comparisons sake, let's look at some other tech companies that are already publicly traded.  Yahoo is valued at roughly $20 billion.  Their fiscal 2010 revenue hovered between $4 and $5 billion.  Facebook's revenue was down around $2.5 billion.  Yahoo also leads Facebook in total percentage of internet users by roughly 8% though Facebook users spend more in total amount of time on that site.  Yahoo's revenue per user runs at about $8 while Facebook's revenue per user runs at about $4.  Let's also look at Google's valuation.  That company is worth about $180 billion with total 2010 revenue just over $20 billion.  Google also leads Facebook in total internet users but by only about 6%.  However, Google's revenue per user is about $24.  These are the most comparable companies to Facebook in that they provide only digital or cloud service and not hard goods like eBay or Amazon does.  However, if you look at eBay and Amazon you will find that they have valuations closer to Facebook (about $40 billion and $80 billion respectively) but they annihilate Facebook in terms of revenue at $9 billion and $30 billion respectively in 2010.  So it would appear that this newly reported valuation of Facebook is inflated to a large degree.  As everyone knows Facebook is free though.  Right?  So how do they make money now and what are their long term plans for revenue generation?  They get the majority of their revenue currently from advertisements (those things on the right side of your Facebook page that apparently at least some of you actually click).  The rest of their revenue comes from the online games that are embedded into the Facebook experience wherein they get a share of revenue from sales generated in those games (like when you buy those crazy Farmville gifts).  However, it doesn't appear that their long term plan is to remain with those two income streams as their primary revenue sources.  Facebook has already positioned itself as a cross platform marketing tool.  This is evidenced by the ever increasing number of pages on Facebook from other companies such as Lowe's, Home Depot, Budweiser, Miller Lite and what seems to be a never ending list of companies.  It turns out that their long term goals are to bring in corporate electronic storefronts and make purchasing things from those electronic storefronts straight from your Facebook page possible.  An example of how this would work:  Best Buy obtains a Facebook marketing page.  They advertise certain products on that page.  Facebook functions almost as a credit card (or as PayPal currently does for eBay and other online stores) by facilitating the financial aspect of the transaction then receiving a small percentage of that transaction for their trouble.  That sounds like a sound business plan, right?  But how many people are going to be willing to use Facebook for financial transactions given their long and troubled history with regards to protecting user's privacy?  I know I wouldn't be interested in that.  Another thing that I have trouble with is Facebook's questionable business practices and evasiveness with how they operate their business.  How is that going to look when the SEC examines the company prior to their IPO?  Sounds like there could be some flaws in their business plan, right?  At best, Facebook's future financial plans are fraught with risk.  So, why then would Goldman invest in Facebook at this point?  Put another way this question would be "what do they stand to gain?"  The answer is that they stand to gain a lot financially.  I believe that they could potentially benefit from their investment when Facebook finally decides to make its IPO which most believe will end up being somewhere in 2012.  How would they benefit you may ask?  Easy.  They want to position themselves so that they are the underwriter of the IPO.  They would stand to make oodles of money initially from such an IPO as it would be very likely that there would be a huge media frenzy surrounding this event and that would drive up prices artificially.  So, I'm not that surprised that Goldman would want to invest a token sum in Facebook at this time in order to leverage themselves into the frontrunner position when Facebook needs an investment banker to underwrite the IPO.  That's sound business on the part of Goldman.  But the real losers in this deal are likely to be the unsuspecting public who succumb to the media frenzy that will no doubt surround the Facebook IPO.  They are very likely to buy their shares at artifically elevated values due to transient increased demand in the initial run in phase of selling.  Then when the world figures out that it was all just hype and that there is actually very little substance to this as an investment the bottom will fall out of the stocks value and those investors will be left holding the bag so to speak.  Goldman doesn't have to worry about the $50 billion invested now as they will make much more than that by managing the IPO.  So for them this is a sound investment.  However, for all those folks who will no doubt buy into the Facebook hype during the IPO they will lose large amounts of money.  That's my prediction anyway.  I just don't believe the hype.

So many problems, So little time, All from one incident

I was particularly impressed (not in a good way) with the series of stories that broke following the recent snow storm in New York City.  The first reports were that the snow was so bad that ambulance service was interrupted and helpless sick people died at home and babies were delivered at home and perished as a result.  Certainly those are awful stories and I sympathize with the plight of those who suffered as a result.  But it wasn't long before the cacophony of malcontents from New York echoed throughout the news network coverage with their complaints of somehow being deprived of what they perceived to be some sort of entitlement to immediate ambulance transport and medical care at their nearest health care facility.  This sense of entitlement on their part somehow abrogates the right to safety of those who would otherwise be charged with transporting these people to said health care facilities.  It is a strange world we have created wherein average citizens can convince themselves that their need for the health care commodity is of such import that it trumps the right to safety of the EMT.  I'm no EMT but I do know that one of the first things the EMT is charged with when arriving on scene is to assess the scene for safety - THEIR OWN SAFETY!  If those who are supposed to be saving you aren't safe in their rescue operations then they can't possibly perform that SERVICE.  How exactly does one come to the point that they believe they are so important that their own personal needs outweigh the safety of others?  I just can't seem to reconcile that in my mind.  I am well aware that this situation represented life and death to a few of New York's citizens but even that cannot be permitted to goad us as a society into placing our EMT's and Medical Transport personnel into harm's way.  This situation in an oblique way outlines one of the undiscussed problems with health care (and indeed other social programs) in this country.  That problem is that there is a contingent of people in this country that view the health care commodity as a right or an entitlement.  It is not and can never be for the very reason that it requires someone else to provide that service.  Rights are things inherent and do not require someone to be put out to provide that.  A right can only exist in the negative sense (i.e. no one has to directly provide it) and not in the positive sense (i.e. someone has to directly provide it).  For example, one's right to liberty requires no one to actively provide it (though certainly it does require some level of protection via police or military force I suppose).  The right to life is another example.  However, health care has to be directly provided by someone and also has to be paid for by someone and therefore can not be a right.  This situation outlines the toxic entitlement mentality that unfortunately has come to be quite common in this country.

The second and perhaps more sinister issue that cropped up in news stories after New York's Big Snow Storm was that the unionized workers of New York City's sanitation department (not really clear why sanitation would be charged with snow removal but whatever) staged a slowdown of services and complete disregard for their duties in protest of demotions, cuts in the department and declining numbers of positions.  Anyone that has ever worked in business shouldn't have too much difficulty seeing the problems here.  Heck, anyone that has ever had a job shouldn't have any trouble seeing this isn't acceptable employee behavior.  If I ever did that at my job I would be vilified before being fired.  But since there is union "protection" in place these buffoons will keep their jobs and most probably the city will cave and re-create positions that aren't really needed and therefore continue to run over budget.  That is the problem with unions in both the private and public sector.  They put too much power and influence in the hands of people who aren't really qualified to have that kind of power.  There may have been a time when unions were necessary due to gross disregard of worker's rights and unsafe working conditions or unfair pay but does anyone think any of those conditions exist in New York City's sanitation department?  So why then do they need to have a union?  If these union workers are proven to have shirked their responsibilities to make a point (and based on news reports it is pretty much a proven case already) then they should be held criminally liable for those that were left to die in their apartments because ambulance crews could not perform their duties safely.  Anything less than prosecuting these idiots with a litany of crimes will be completely unacceptable.  This would also be a prime opportunity for New York to abolish the unions that are apparently holding the city captive as well.  It would be a great first step in ridding our fine country of union influence from top to bottom.

Fun in the snow

To the best of my knowledge, I spent my first 24 full consecutive hours "unplugged" in years yesterday.  This is because we are on a family getaway to Snowshoe Mountain ski resort having some fun snowboarding and skiing and riding the tubes.  The cell phone service stinks around here and it took us a while to get the laptop out and log onto the network.  We have had a great time so far and the slopes have been perfect.  My nephew Brett is quite the snowboarder.  I've been quite impressed with his skills so far.  My sister Kristen and her SO Jeff have been down on the skis a few times.  They are still trying to get their legs under them.  Deanna is really picking back up quickly with her ski skills as well.  I was a little concerned that my 6 year old son would be either too scared to try snowboarding or get discouraged and frustrated by his attempts.  We tried to encourage him to do lessons to help him learn more quickly but he flatly refused (he's stubborn like his mother).  So we went to the top of the mountain and started to drop in on one of the green slopes (beginner slopes).  He set at the top and strapped on his snowboard and then refused to go down because he was "scared".  So at that point I told him lessons were no longer a suggestion but mandatory.  I took him in and signed him up for snowboard lessons which didn't start for another 4 hours or so.  At that point, he decided he wanted to try once again to go down one of the green slopes so we went back and strapped in.  To my surprise he popped right up and started going down.  He made it roughly 20 or 25 feet and fell.  He managed to get back up and repeat the 25 foot runs and then fall several times.  He eventually got better and by the time we made it to the bottom he had made several runs of 50 or 60 yards without falling.  He really picked up the balance part quickly but had difficulty with slowing down and steering the board.  It would be fair to point out that this was probably a more successful start to snowboarding than I had.  He attended the lessons yesterday afternoon and seems to have gained a fair amount of confidence from that.  We went out for pizza after the slopes closed for the evening and he fell asleep at the dinner table.  Apparently he had played pretty hard and worn himself out.  He had wanted to go out for night snowboarding at some of the slopes with lights but was obviously too tired.  So we are going back out today for more boarding fun.  We also are going to hit the tube hill later with Anna.  We are thinking about letting her try to ski Friday as there have been many children her age or possibly younger out there trying and I think she just might enjoy it.  We shall see.

And then there was one. More. One more.

Over the past couple of years, I have started following various blog feeds.  A few of these typically discuss political leanings, some focus on sports, a smattering on parenting and lifestyle even some medical in nature.  Most of the time these readings are quite entertaining and offer good insight into lives very different from my own.  I have been asked on occasion if I blog and that answer heretofore has been "no".  I have had a few of my friends suggest that I should start periodically blogging to help keep in touch with friends more distant.  One person even suggested that my rants were so entertaining that I might one day be able to quit my day job.  But the most intriguing is one of my friends who recently told me that my perspective on health care and more specifically the delivery of health care and the politics that drive that delivery would make for a quite interesting and possibly influential read.  I guess all that stuff is nice but I don't particularly see myself in that light.  I already feel like I keep in touch with those friends that care about me and/or that I care about.  I know that there is no hope of ever turning my random thoughts into any type of financial empire.  There is quite simply no one dumb enough to pay for that type of inanity (and no that word is not missing an "s") and after a while I tend to be more abrasive than entertaining.  Heck, I've had relatives "unfriend" me on Facebook because they felt that my debate style was too aggressive.  And I harbor no delusion that the random thoughts I have on my job or the health care profession in general are anything more than just random thoughts.  They don't offer any profound insight or shiny new perspective.  In fact, a substantial proportion of the people I work with have similar thoughts and ideas on health care even if they aren't as forthright with their feelings.  And the truth is that I don't even have all that unique of a political stance.  I'm pretty much a social liberal and a fiscal conservative.  If you looked up Libertarian (or more specifically Libertarian Minarchist) then you would more or less have my political views figured out.  So, why start a blog?  I guess it will mostly be sort of like my therapy for when I hit my manic phase and need to transcribe my flight of ideas into relatively incoherent and loosely associated words and thoughts.  So, brace yourselves.  Here goes.