On Fixing the VA: A Note (By DALE O. CLONINGER)

Pundits of all stripes agree that fixing the ills afflicting the Veterans Administration is a daunting task and will require someone with a ‘particular set of skills’.  However, much of the heavy lifting can be borne by competitive forces set in motion by allowing veterans a choice of medical care providers.

Proposals to give veterans a choice of health care providers have focused on providing prompt and effective care thereby significantly enhancing veterans’ chances of recovery or lessening their discomfort.  While this goal is first and foremost there is another purpose served, the creation of competitive forces that will not only improve care but could also change the culture within the VA.

Assume under such a plan that:
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Without Caring, The Sharing Economy Is Dangerous!

The Sharing Economy is commonly referred to as collaborative consumption – the core of which is people renting things from each other. The Sharing Economy’s value is driven by the role of technology in driving down transaction costs to facilitate peer-to-peer transactions.

But, not unlike everything else on the internet, is it possible that we are getting a little carried away with trying to fit everything into this growing marketplace? Is it possible that many of the “sharing economy” companies are using the label without focusing on the sharing?  Without caring, the sharing economy can lose its value to society.

Let’s take a really simple example. Assume there is a town with 100 taxi drivers each making $50,000 per year. Now, a ride sharing company, call it Goober, comes to town with a “sharing economy” app. Goober drives prices down 20% for consumers, decreasing the total transportation market from $5 million to $4 million.  Instead of 100 drivers, they employ 200 drivers. Better prices for consumers, and more people working. But…

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In a Free Market Economy, How Can the Price Always Be $0?

A basic principle of economic theory is that supply and demand are at the root of every transaction. Despite the complexities and exceptions, we generally accept the relationship between supply and demand. Demand is based on the observation that the lower the price of a product, the more people will want to buy that product. Supply is based on the observation that the higher the price of a product, the more of it producers will supply. At a particular price, the economy should achieve a natural equilibrium.

The simplicity of supply and demand basics is exquisite. But, before we can understand the operation of such a simple concept, we have to understand the meaning of product and of price. Our world is complex. Each situation is unique, so lets start with a social media platform, such as Facebook.

One possibility is that Facebook is the producer. Facebook’s product is the software that is the social media platform. The consumers are the users of the platform. Then, the price of the product is $0. If Facebook were to raise the price to $10 for the platform, the basics of supply and demand would suggest that people would not demand as much of the product. Similarly, if the price of the product decreased from $0 to -$20, the users would be paid $20 for using Facebook. Then, the demand for the product should increase.

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You Are the Solution to the Income Inequality Problem

Almost every one of us (wealthy or not) recognizes that there is a problem with income inequality in our society.

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” – Warren Buffet.

You are the solution. Together, we can win class warfare because we can win at capitalism and the free market economy.  We, the 99%, have an enormous amount of market power. In fact, we are the market. When we learn to harness even a tiny fraction of our market power, we will be unstoppable and we will be able to create a more just society.

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Trump Declares War On 99% of Americans

Trump rode to his election as president-elect with a populist message that resonated with disaffected working class and all of us in the bottom 99% who are hoping to reshape the playing field to give us a chance. The result is that we were conned into allowing an unabashed leader of the top 0.1% to wage war on society.

“People have been paying in for years. They’re gonna cut Social Security. They’re gonna cut Medicare. They’re gonna cut Medicaid. I’m the one saying that I’m not gonna do that,” Trump declared on Fox News when speaking about the other republican candidates. Trump was absolute in his promise to protect Medicare and not privatize it, because he knew that he could not be elected if he did not make that promise. Trump knew that his populist message would be lost if he promised to transfer control of Medicare to wealthy special interests. But, now, he has been elected. Trump doesn’t need your vote anymore.

So, today, Trump chose Rep. Tom Price to oversee the nation’s health care system. Price is the primary advocate in Washington to privatize medicare and to hand the reigns over to special interest groups and the wealthy. Trump specifically opposed this plan during the campaign.

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Raising Minimum Wage Now

Most politicians agree that the minimum wage should be raised.  Even corporate America is beginning to support raising the minimum wage.  And, of course, most Americans support raising the minimum wage.

Raising the minimum wage alone is not the solution to solving the economic inequality problem.  But, sitting back and doing nothing certainly isn’t going to help.  And, with all of the support, why hasn’t it happened yet.

Income for the typical household has fallen 2.4% since 1999.  Of the 10 occupations that the Labor Department projects will produce the most jobs in the coming decade, five pay a median wage of less than $12 an hour.  Raising the minimum wage can increase the income floor for the growing group of American families that rely on minimum wage jobs.

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Why Is It Okay For The Wealthy To Steal?

Fact – Wells Fargo stole money from its customers. It opened fake accounts and stole millions of dollars from ordinary Americans.

Fact – The six highest paid executives at Wells Fargo have been paid approximately $190 million over the past three years, all while the company was stealing from ordinary Americans.

Fact – Wells Fargo’s profit during the last three years was $67.9 billion.

Warren Buffet owns 10% of Wells Fargo.  Two other large holders own another 10% of Wells Fargo. Continue reading

Beware the Benevolent Dictator

A benevolent dictator is certainly better than an awful dictator.  But, it is still a dictator.  There is a trend where companies claim to serve some public interest (your interest) by classifying themselves as a benefit corporation or claiming to be a part of the sharing economy.  The unfortunate danger is that in either case, these companies will continue to further the trend of a few people taking advantage of everyone.

Particularly, when companies rely on the crowd or the community to build success, they are typically claiming to be a benefit corporation.  These companies recognize that they need the community to build out their business model.  And, despite their claim to be a benefit corporation, their focus is to benefit a handful of wealthy people who own the company and to put themselves in a position to control the crowd and build wealth for themselves.

Likewise, companies relying on the community continue to claim a social benefit by promoting a sharing economy.  But, again, it is just a few people who control who shares what with who.  And, their focus is making sure that the few people who own these companies can share the vast majority of the income generated.

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Technology – Even if it Kills Me

Science fiction movies portray two different futures.  In one future, mankind lives in a beautiful utopia.  There are flying cars, shiny buildings and people wear really clean clothes. The other future is much more bleak.  People are struggling to survive.

Not unlike the movies, technology is going to define our future.  We dream of a future where robots do all the work and we live spectacular lives.  The reality is that our robots, or our technology, can drive our incomes down and further income inequality.

In Singapore, self-driving taxis began carrying passengers last week.  This week in Pittsburgh, passengers can be picked up by one of Uber’s self-driving cars. Uber expects to have 100 self-driving vehicles on the road by the end of 2017.

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Ending the Transfer of Wealth to the Top 0.1%

When I was a kid, my favorite board game was Monopoly.  Everyone started with the exact same thing – $200.  But, eventually, one person owned every piece of property on the board and collected rent from all of the other players.  At that point the game was over, but if I was the one on top, I never wanted it to end.  It is fun to own everything and leverage that into more power, wealth and income.

Even as a kid, I considered how the game would be different if the players all started with different amounts of money.  Or, what if the game kept going and we just passed our position onto another person – our children?

While the real world is obviously not the same as a game of Monopoly, the concentration of power, wealth and income has a significant affect on our society.  The issue of income inequality dominates discussions surrounding the 2016 presidential elections and has propelled unconventional candidates in both the republican and democratic parties. Unfortunately, the conversation is likely to be louder in 2020 and even louder every election thereafter.

Very few solutions seem to have a reasonable chance of closing the gap between those few people who are winning the game and the majority who are losing.  And, all of the proposed solutions seem to be political solutions.

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