A word on commuting

I’ve always lived in places where long commutes are basically a fact of life.  An hour to work?  Oh, that’s nice!

The DC area is notorious for ridiculous commutes, especially for those living in Virginia.  Here are some factoids courtesy of Forbes:

Forbes magazine’s analysis found four of the 12 longest average commutes in the nation come from this region, including Dale City, Virginia, at #12; Clinton, Maryland, at #11; Fort Washington, Maryland, at #8; and Linton Hills, Virginia, just outside of Bristow, as #1. The commute averages 46.3 minutes. The national average for a commute is 25 minutes.

Not only are the commutes long, but they are BAD.  Mostly, they involve long hours standing still on a highway filled with potholes and angry people.

The DC area isn’t alone.  I was reading an article about Staten Island that noted its residents spend an average of 69 minutes commuting (and that’s on the train).

Honestly, it surprises me that more people don’t take advantage of the train.  Being from the west, I am probably more appreciative of the myriad transportation options offered on the east coast.

Sure, it may take longer, but it’s not an equal exchange.  With jobs becoming more and more virtual in nature, people don’t need to be in the office.  If they commute an hour each way on the train, that’s 2 hours that they can spend working on their laptops, and 2 hours less they can spend physically in the office.

Personally I believe that the “commuting culture” from the suburbs is going to become a thing of the past for most people.  The services industry is already going online.  The only jobs that people are going to actually need to be physically present at 40hrs/week are those that require access to a resource, i.e.

• bodies (health care)
• gas (natural, oil, etc)
• minerals
• trees
• water

A note on the first one, though.  I still don’t think that physical presence is always needed in health care (or other related industries, such as education).  Here is a note I wrote to my professor about my paper topic, in which we discussed this phenomenon:

I have also read many articles about other traditionally domestic industries that are starting to go global, such as education.  I think we will start to see a true delineation beginning to emerge between professions that are knowledge-based versus those that rely on resources (i.e. oil and gas, agriculture, energy).  Knowledge is highly transportable for very cheap.  Resources, on the other hand, will always be cheaper in the place they are obtained.  Therefore I think that as energy costs go up and resources become more constrained, the services industry will be more and more virtual-based (we are already seeing this in medicine with increased use of telemedicine and robotic surgeries).

 

International Health Care Expansion

It’s been silent for awhile on this blog!  The past several months have been crazy for me; trying to wrap up one job and moving to a new one, all while traveling excessively and finishing 2 classes at school.  But I’m back at it!

Following is an excerpt of a paper I’m planning to write in the next couple of weeks for my International Taxation class.  It is currently pending professor approval:

Medical tourism is a growing trend in health care, with millions of people traveling internationally every year to receive medical treatment.  A number of large international hospitals have taken note of this trend and are taking steps to expand internationally (such as India’s renowned Apollo Hospitals that have expanded throughout many countries in Asia and Europe).  The number of Americans going abroad for medical care has grown exponentially in recent years and shows no signs of slowing.  This directly impacts the bottom line of many US hospitals, particularly those offering specialty care and transplants.  Many health care executives acknowledge that in order to stay competitive, their industry must take steps to develop its global footprint as its patients become increasingly global.

This paper seeks to examine the various avenues upon which US hospitals could expand their international presence, and what barriers have impeded this type of growth to date.  The discussion will focus primarily on tax implications, comparing and contrasting the tax regimes of the US and India, as taxes are one of the key inhibitors of international health care provider expansion.

I’m not sure if I’m actually going to focus on India or not, but Apollo seems like a good example.  I could compare that with a US hospital such as Johns Hopkins or Methodist to compare/contrast their levels of international involvement.

Daily Quotable – Barbara Beck

“Today’s young people can no longer afford to buy the houses that have made so many of the boomer generation effortlessly rich; and they will have to stump up for their parents’ and grandparents’ generous defined-benefit pension schemes. The contract between the generations—under which people of working age pay to bring up the young, who in turn will look after them when they get old—has broken down.”

– Barbara Beck, “The Slow Farewell,” The Economist Special Edition, December 2010: The World in 2011

Daily Quotable – Douglas Holtz-Eakin

“If you look past the next eight to ten years, Medicare is the deficit problem… And there’s simply no way we can address our fiscal problems without coming to terms with Medicare’s future.” – Douglas Holtz-Eakin, former Director, Congressional Budget Office.

Daily Quoteable by Governor Phil Bredesen

The evidence continues to mount that the federal health exchanges may soon become more overloaded than anticipated:

“Our thought experiment shows how the economics of dropping existing coverage is about to become very attractive to many employers, both public and private. By 2014, there will be a mini-industry of consultants knocking on employers’ doors to explain the new opportunity. And in the years after 2014, the economics just keep getting better.

The consequence of these generous subsidies will be that America’s health reform may well drive many more people than projected out of employer-sponsored insurance and into the heavily subsidized federal system. Perhaps this is a miscalculation by the Congress, perhaps not. One principle of game theory is to think like your opponent; another is that there’s always a larger game… My state of Tennessee could reduce costs by over $146 million using the legislated mechanics of health reform to transfer coverage to the federal government.”

– Phil Bredesen (D-TN), Governor of Tennessee, former health industry executive. “ObamaCare’s Incentive to Drop Insurance”, Wall Street Journal editorial, October 21, 2010

Daily Quoteable by UK PM David Cameron

The UK has functioned under a model of high taxes and low user fees for a long time, cementing the notion that paying one’s taxes assures them of “free” transportation, health care, and other necessary infrastructure.

Now the UK is trying to reverse these long-held beliefs by instilling an austerity program, due to overwhelming debt.  Will it be long before the same messages are directed at the US public?

“Too many people thought ‘I paid my taxes—the state will look after everything.’ But citizenship isn’t a transaction in which you put your taxes in and get your services out. It’s a relationship—you’re part of something bigger than you.”

– U.K. Prime Minister David Cameron

Pirates!

Pirates are awesome – in the sense that, in college, we frequently dressed up like pirates and had pirate parties, saying “arr!” every other word.  However, maritime piracy is a very real phenomenon and has a long history.  I’ve been learning more about this lately and wanted to share some observations.

What is a pirate?

Dictionary definition: pirate [pahy-ruht] –noun

1. a person who robs or commits illegal violence at sea or on the shores of the sea.

2. a ship used by such persons.

3. any plunderer, predator, etc.: confidence men, slumlords, and other pirates.

4. a person who uses or reproduces the work or invention of another without authorization.

5. also called pirate stream.  Geology – a stream that diverts into its own flow the headwaters of another stream, river, etc.

Pirates haven’t been very front-of-mind in the U.S. for awhile (aside from pop culture), but we are seeing a re-emergence of these concerns in Somalia.  An article recently published in Foreign Affairs discusses how maritime piracy accounts for a major reason why Africa is not very engaged in international trade:

[…] pirates and other maritime criminals tend to prey on old, slow, decrepit ships — the types of ships that inefficient and unsecured African ports and waterways attract — because they are easy targets. Half of the ships successfully hijacked by Somali pirates in 2009 fell into the category of the smallest merchant ships.

Pirates attack nice ships too, though (e.g. last year’s standoff between Somali pirates and the U.S. Maersk Alabama).  The article states that the only way to reduce this problem is to improve port infrastructure in Africa, thus attracting more investment (and with it, nicer ships).  Good governance must also be established; however – an area that has plagued the African continent for some time for a variety of reasons.  As the world’s “most lawless” country, Somalia has quite a way to go.

We remain resolved to halt the rise of piracy in this region. To achieve that goal, we must continue to work with our partners to prevent future attacks, be prepared to interdict acts of piracy and ensure that those who commit acts of piracy are held accountable for their crimes. – President Obama, April 2009

Are pirates all bad?  Do they always operate as terrorists, posing a direct threat to other navies?  The surprising answer is no.  Pirates have a long history of actually being contracted by navies to fight for them as private contractors, more commonly referred to as privateers.  Wikipedia has a pretty good description of what a privateer is: A privateer was a private person or private warship authorized by a country’s government by letters of marque to attack foreign shipping. Privateers were only entitled by their state to attack and rob enemy vessels during wartime. Privateers were part of naval warfare of some nations from the 16th to the 19th century. The crew of a privateer might be treated as prisoners of war by the enemy country if captured. The costs of commissioning privateers was borne by investors hoping to gain a significant return from prize money earned from enemy merchants. So, basically, countries hired some sailors (that did not take orders from Naval command) to act as commerce raiders who stole whatever they wanted from enemy ships, thereby impeding that country’s trade.  The cost of commissioning these pirates was kept off the country’s balance sheet, since private investors paid for them, and didn’t require expanding the country’s formal navy.  Then the “booty” that the privateers collected would be distributed to the crew and investors accordingly. The UK was a big user of privateers.  We discussed this during our London trip, and how this was essentially one of the first recognizable PPP’s that the UK used, back when it was trying to defeat the Spanish Armada.  The privateers mostly focused on robbing Spanish gold than on attacking warships, since those were seen as less profitable.  The U.S. used them too, during the Revolutionary War.  The practice was still somewhat in place until as recently as the mid-1800’s. Advertisements requesting crew for Bermuda privateer ships: This practice may sound ludicrous now, but to me it is not very far-fetched.  While there are clearly much higher standards for government contractors and public-private alliances now, it is still a very critical component to the success of thousands of public initiatives every year.

Back to the Basics

My motto for this blog is “writings on business and life”, but what I have realized is that the “life” portion is somewhat lacking.  This blog is public, and so I have strayed away from lots of “personal talk” (although there is some on my Twitter feed occasionally).  But the fact of the matter is, there comes a point when business and life intertwine.

These interactions can be cotidiario, or “everyday” – but they also have the potential to be quite painful.  I have experienced much more of the painful variety this past month, which partially accounts for my lack of blog posts.  A number of things have happened, but the event with the greatest impact has been the passage of a close family member.

Something funny happens during a major life event.  The world slows down and speeds up at the same time.  You become robotic, in a trance, while the world whizzes by; even though physically you are running at 100 miles per hour.  You neglect yourself and become completely aware of yourself at the same time.

Then, everything else begins to fall apart.  I’m not sure if that is a direct result of the dramatic event, or because bad things really do happen in threes (or more!).

It’s been a learning experience for me though.  It has helped me to realize that life isn’t going to slow down and wait for you to graduate, to get promoted, to finish that big job, to just get paid on Friday.  And that failing to address myself will only lead to more implications that will further impede my ability to function normally as a human being (i.e. my health).

It’s important to keep this in perspective, not just for your own well being, but for the sake of those you manage.  As managers, I believe that one of our most important tasks is to understand that our staff has lives outside of work, too, and that those lives are going to run the show sometimes (usually, at the least convenient times).  The challenge and the task of the manager is to anticipate this happening, and plan accordingly, so that when it does happen we can empathize and help that person out as much as possible.  Life is hard and everyone struggles every day.  Work shouldn’t unnecessarily add to those thousands of hardships that we already face.

We’ve got soil, and it’s all red

Debt: it’s on everyone’s mind right now, from the micro to macro level. I stumbled upon another excellent graphic by visualeconomics today, depicting national debt by country (as I’m sure you have seen from my posts – and performance in my economics courses in college – I can’t help but be a macro person).

A few initial observations:

Those countries “in the red” include some of the richest and some of the poorest countries in the world, GDP-wise.  But if we take a look at those countries that are resource rich (for example, Brazil, Russia, China, Chile, many southern African nations), we note that most of them are not very economically bad off at all.  In fact, most are growing.  India, for example, posted annualized GDP growth yesterday of nearly 9% through the quarter that ended on June 30th.  Australia posted 3%.

This then brings us to the US and Canada.  We are some of the most resource-rich of the debt-laden westernized countries, and yet we have some of the highest percentage of debt per GDP.  We are some of the only countries rich in resources, technology and talent that are seeing our economies continue to deflate.  Infrastructure is strong and political corruption is low.  Aren’t these typically the ingredients for success?  To me, the fact that we possess such abundant natural resources makes the current situation even more dire.  A country of this much natural wealth should not have to find itself in this position.

According to Mercer’s annual Quality of Living survey, none of these “in the black” countries even make it to the top 50 cities, whereas heavily indebted Italy, Spain, USA, and Portugal are all over the map.  Has our pursuit of life, liberty, happiness, and pensions, and quality health care, and more modes of transport, and disease eradication, and food and shelter for all, and support for poor countries, and military dominance, and debt forgiveness, and (you fill in the blank) eventually led us to a state where we can no longer live free and happy, as we are now ultimately bound by the gaping hole in our national checkbook?

A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury. – Alexander Tytler

Will the older generations of these countries, who enjoyed so many amenities that their countries could simply not pay for, look back in retirement and wish that they had not chosen the path that they did?  And more importantly, do the ideals that I currently stand for have the potential to inhibit the freedom and options of the generations that will come after me?

We must all live so that our children do not have to pay for our deeds. – Andrejs Upits

Cha-Ching!

…is the sound that Colonial Central is hearing right now.  Just paid my tuition for my second to last semester at GW.

I can’t believe how quickly this past year has gone by.  What is even more overwhelming is the amount that I have learned over the year.  I feel that I am entering this next school year reinvigorated and with a better understanding of my professional and personal aspirations, which in turn builds confidence.  The knowledge that I can and will succeed at the things that I put my mind to is a great feeling.  I’m so incredibly thankful for all of the opportunities that have come my way so far in my life and cannot wait for what the future may hold.  Bring it on Fall 2010!