Yikes!

Bloomberg L.P. tells us that gold reached $1,506.50 an ounce in New York as the dollar slipped as much as 1 percent against a basket of six major currencies to trade at a 16-month low.

Gold has risen 32 percent in the past year as the dollar fell 8.2 percent.

Silver topped $45 an ounce for the first time since 1980.

The U.S. Treasury Department has projected that the government will reach the $14.3 Trillion debt-ceiling limit no later than May 16 and run out of options for avoiding default by early July.

“As the numbers show, the debt cannot be repaid without dollar debasement, so people are warming up to the idea of hoarding gold.”

Gold? In 2011?

Something is seriously wrong here.

I must have somehow slipped and fallen into the 4th dimension.

Help!

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Yikes!

Our friends at Standard & Poor’s reminded us today that posturing and bickering by our elected officials is not only juvenile and annoying, it also has the potential to cost us dearly!

Despite their affirmation of a ‘AAA/A-1+’ rating for U.S. sovereign debt, the major stock indices lost real value.

Although S&P had some pretty positive things to say about the U.S. in its press release, investors are nervous.

Analysts at Standard & Poor’s think that our “highly diversified, and flexible economy (is) backed by a strong track record of prudent and credible monetary policy, evidenced by its ability to support growth while containing inflationary pressures.” They also admire “the unique advantages stemming from the dollar’s preeminent place among world currencies.”

Their concerns seem to emanate from U.S. debt and deficit ratios that are equivalent (or perhaps even worse than!) those of Spain, Portugal and Greece, countries that have already been downgraded by the rating agencies.

Some of us have been sitting on the sidelines frustrated beyond belief that a small cadre of elected officials in Washington seem to be unable (or unwilling) to openly and civilly discuss, debate and/or negotiate policies that impact the present, and which potentially have significant long-term consequences.

Most recently, we sat on the edge of our seats while some fringe politicians followed their own personal agendas and attempted to derail a bi-partisan budget compromise with the demand that Planned Parenthood be defunded.

Apparently, we came within minutes of a total U.S. government shutdown while these self-important creatures followed their individual ideologies on the road to nowhere.

The Congress of the United States was created by the Constitution in 1789.

My recollection from history and civics classes I took in school leaves me thinking that these individuals – Senators and Congress people – are elected to represent the wishes and best interests of their constituents.

I don’t recall any language that implied an opportunity for individuals to be elected to represent their own individual agenda, at the expense of the rest of our nation.

Yet, the behavior of a few members of Congress appears to be at the very heart of Standard & Poor’s warning today.

We need to hold our elected officials accountable for getting to optimum solutions, based on facts and solid analysis, not based on emotion, anger or specious arguments.

Each and every of our elected officials ought to be entitled to their own opinions, but they should not be entitled to their own facts.

My friends, Standard & Poor’s has thrown down the gauntlet, and it’s time for all 311 Million of us to step up to the plate and tell our 536 elected officials in Washington to stop the nonsense and do the job we elected them to do: create sustainable, long term solutions that restore the U.S. to a leadership role economically and politically.

We can’t accept or tolerate anything less.

Health Insurance Reform

April 13, 2011

Each year in the fall, employees in my firm receive several communications relating to our “Open enrollment period” which is when we can pause and review our selection of benefits, and adjust them based on our own personal current situation.

The paucity of group health insurance options available to me which meet my needs led me again to select UnitedHealth, and they do provide a good array of benefits.

UnitedHealth is a big company. They insure about 33 Million people, and they are the largest health insurer based on revenue, which hit $94.16 Billion in 2010, with reported earnings of $4.63 Billion.

Rising costs (perhaps combined with careful attention to detail and some ‘enhanced cost-sharing’) caused my personal contribution to medical insurance coverage (for my wife and me) to increase by 24% from 2010 to 2011 – from $275 per month, to $341 per month.

Now, don’t misunderstand my position.

I’m glad to be working for a great company which not only pays me to do something I enjoy, but also offers a company-subsidized health insurance plan.

It is my understanding that my contribution is about one-third of the retail rate for this insurance, i.e. if I were retired and continued coverage under the plan, I would be paying about $1,023 per month, or just over $12,000 annually.

That’s a lot of money!

I just read that UnitedHealth Group Inc.’s CEO — Stephen J. Hemsley — received compensation totaling $10.8 Million in 2010, up from $8.9 Million in 2009.

About $1.3 Million of his compensation was salary, which remained unchanged for the fourth straight year. But his performance-related bonus jumped by 74 percent to $3.4 Million in 2010. The value of his stock and options also rose.

He is probably worth every penny of that to the shareholders of UnitedHealth, but not to me.

I would like the option to select from at least one, not-for-profit, public benefit corporation to provide for my health insurance needs. No dividends to pay out to shareholders. No big bonus to the executive team. No stock options to key employees.

When I was younger, we had Blue Cross and Blue Shield. These entities were organized as tax-exempt (not-for-profit) health insurance providers, and I recall being generally pleased with both the cost and the coverage provided.

When President Ronald Reagan signed the Tax Reform Act of 1986 into law, the federal tax exemption for these organizations was eliminated, helping to pave the way to where we are today.

Presently, we are hearing sound bites from Rep. Paul Ryan of Wisconsin and others telling us that they have solutions.

>>> Repeal the “Obama Care” legislation & make significant changes to both Medicare and Medicaid.

Great ideas, but before we repeat the apparent mistakes baked into the Tax Reform Act of 1986 — and possibly other examples since — let’s stop to take a look at what other options might be available to address two important outcomes: (1) reducing costs; and (2) improving outcomes.

I know of two really great things that happened in 1918.

The best was that my Mother was born on November 28. She lived to be 92, sadly leaving us on February 26, 2011.

The second best contribution from 1918 was the creation by Anna M. Harkness — a pioneer female philanthropist — of The Commonwealth Fund, “to enhance the common good”.

The current mission of The Commonwealth Fund is “to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults”.

The Commonwealth Fund has commissioned plenty of research on health care and health insurance. As a not-for-profit, public benefit entity, we expect this research is factual and unbiased, and completely outside the political process.

In one recent report, they tell us, “To achieve a high performance health system, health reform must go beyond ensuring affordable coverage to addressing health system changes that will improve outcomes and the quality of care, increase efficiency, and slow the growth in total health system costs.”
http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2010/Sep/Analysis-of-the-Payment-and-System-Reform-Provisions.aspx

We can’t deny that Rep. Paul Ryan is a brilliant guy. Yet, I’m puzzled by his contention that his budget proposal fulfills a moral imperative “to lower Medicare-related costs”.

As he has structured it, overall health expenses would actually increase because people would be required to get care through private plans, which have been proven over and over to cost more than the current system. Seniors and others on fixed or limited incomes would be left to pick up the extra costs.

Ryan’s proposal apparently would convert our current fee-for-service system—in which patients go to any doctor that takes Medicare—to one in which beneficiaries would get a capped annual subsidy to help them purchase private insurance.

Critics of Ryan’s proposed system – some call it a “premium support” model — say it is really just a voucher system where elderly, disabled and otherwise disadvantaged people would appeal to private plans for services.

A great deal of truly objective and non-partisan analysis is needed here before we get into an even more emotional and politically charged debate.

The real question is: Do we possess the decorum, civility and intellectual curiousity to allow for an impartial analysis? Or have we crossed over into the War of the Roses, where no one really knows why we are fighting, but we know which side we are on, and we need to win!

The federal No Child Left Behind Act of 2001was touted as the solution to our national crisis in K-12 education outcomes. 

Some have said that the NCLB was merely a rebranding of the Elementary and Secondary Education Act (ESEA) which was enacted as part of Lyndon Johnson’s War on Poverty in 1965, and which has been reauthorized every five years since then.

Whatever you want to call it:  it isn’t working

According to an intensive study published by the Manhattan Institute in 2002, the national high school graduation rate in the U.S in 1998 was 71 percent

In 2006, the percent of students earning a standard diploma in four years had dropped to 69.2 percent, and by 2007, it was 68.8 %.  At its peak in 1969, the national graduation rate was 77 %

About 20% of our non-graduates are from 25 large urban school districts, including New York City; Los Angeles; and Las Vegas (Clark County, Nevada). 

Why should we care?

 If dropouts were reduced by half in America’s 50 largest cities, the graduates extra earnings would add up to about $4.1 Billion per year, in turn contributing about $536 Million in incremental state and local tax revenue (source: Alliance for Excellent Education).

What could be done in New York State to change our paradigm of mediocrity?

There is a huge body of evidence which tells us that high-quality early education (ages 3 and 4) for low-income children improves graduation rates; reduces costs of remedial education; and reduces costs of justice system involvement.  

Clearly, quality early education is not a panacea — it cannot work in isolation.  High-quality K-3 education (including social-emotional learning curricula that strengthens self-regulation); availability of health care  and mental health services for children and families; and family involvement are some of the other factors that combine with quality early education to strengthen probability of success in school.

Why haven’t I ever heard of “high-quality early education”?

Research over the past 20 years has spawned a new paradigm known as “Quality Early Care and Education” replacing what we used to call “nursery school” and/or “day care.”  Why?  Recent research is showing us that Birth to Five is a critical learning period: 75% of a child’s brain growth occurs before age five.  And children – particularly children from economically disadvantaged homes — who attend quality early learning programs — are at least twice as likely to graduate high school and attend college.

What are our Elected Officials doing to fix the problem?

The year 2011 may get a special chapter in history books to document the many “political power plays” at the state, regional and local level to hold the line — or reduce — taxes.

Here are some great 2011 political sound bites:  Wisconsin Gov. Scott Walker has risen to national notoriety for his campaign to eradicate nearly all collective bargaining rights from state employees.  Ohio Gov. John Kasich approved a law which severely limits the collective bargaining rights of 350,000 public workers, helping to create a contentious and divisive political battle. New Jersey Governor Chris Christie has gone to battle with the NJ Education Association (a.k.a. ‘the teacher’s union’) over their annual income of $130 Million, virtually all generated through mandatory payroll deductions of $730 in mandatory dues per teacher, every year.  And, Gov. Christie has further distinguished himself by capping school district superintendent salaries at $175,000, the same pay he receives as Governor.  And New York Governor Andrew Cuomo — who has helped to create tremendous angst as his 2011-12 budget slashed $1.25 Billion in state aid to education – wants to follow Christie’s lead on salary caps.

I’m all for this.  My taxes are too high, and I can’t take it any more!

Here are some concepts and ideas that seem to be completely missing from these political discussions, campaigns and conversations:   Reform, re-engineering, consolidation, reorganization, and mergers.

Maryland has received some national notoriety because its educational system seems to be working:  Education Week has ranked Maryland Number One out of our fifty states for public school outcomes for three years running: 2009, 2010 and 2011.

I wondered —- I hope you will try to join me!What are the folks in Maryland doing to keep themselves at the forefront of school reform?

Maryland and Ready at Five

 Census data tells us that Maryland is economically ahead of most states from a household income perspective, yet the data also tells us that Maryland is very diverse both economically and ethnically.

With a population of nearly 6 Million people — many of whom live in the central region of the state (the Baltimore Metropolitan Area) — Maryland has large areas of agricultural land in its coastal and Piedmont zones which is dominated by dairying.  Maryland farmers also grow a variety of vegetables, and some tobacco.  There is also a large automated chicken-farming sector in the state’s southeastern part; Salisbury is home to Perdue Farms. In fact, Maryland’s food-processing plants are the most significant type of manufacturing by value in the state.  Other manufacturing in Maryland is diversified, and includes electronics, computer equipment, and chemicals. Mining is limited to coal, which is located in the mountainous western part of the state. We know that farming and manufacturing are great and venerable vocations, but they typically are middle income, at best.

All of that said, Maryland as THE state where your child (or grandchild) will have the highest probability of receiving the best K-12 public education in America, likely because of their Ready at Five program.  Ready at Five was designed to ensure that all children who enter kindergarten are indeed ready to learn.

In school year 2001-02, the percentage of Maryland kindergarteners from low-income households who were fully school-ready was 34%.  By school year 2010-11, with supports and interventions from the Ready at Five initiative, the number who came from low-income households who were ready to learn had jumped to 73%. The overall percentage of Maryland kindergarteners fully ready to start school increased to 81% in 2010-2011. 

People say Maryland is spending way too much money on pK-12 Public Education!

Most recent national data available (www.census.gov) shows that in 2008, public school systems spent an average of $10,259 per pupil.   The report also reveals that public school systems received $582.1 billion in funding in 2008, up 4.5 percent from 2007. Of that amount, state governments contributed 48.3 percent, followed by local sources, which contributed 43.7 percent, and federal sources, which made up the remaining 8.1 percent. 

States that spent the most per pupil were New York ($17,173), New Jersey ($16,491), Alaska ($14,630), the District of Columbia ($14,594), Vermont ($14,300) and Connecticut ($13,848).   Maryland came in 10th ($12,966).

So, despite per-pupil spending at higher than the national average, Maryland is in the middle, yet students who go to school in Maryland are clearly benefiting from the Number One ranking out of our fifty states for public school outcomes.  The top 5 spenders are not doing so well.

What could we learn from Number One State: Maryland?

Not sure.  No one is talking about this.  Just curious: I wonder why?

If you have any ideas or suggestions, please post them on my blog.  I’ll try to include them in a future message. 

Hey, maybe if a bunch of us think about this subject ‘outside the box’ we will come up with some good and sustainable solutions!

Let’s get strategic.  Send me your thoughts.  I promise to be a good and responsible steward!