Archive for November, 2008

Health care thinking points

Thursday, November 20th, 2008
  1. It is cheaper to build a car in Canada than the U.S. (Washington Post):

    By Kirstin Downey
    Washington Post Staff Writer
    Saturday, March 6, 2004; Page E01

    For each mid-size car DaimlerChrysler AG builds at one of its U.S. plants, the company pays about $1,300 to cover employee health care costs — more than twice the cost of the sheet metal in the vehicle. When it builds an identical car across the border in Canada, the health care cost is negligible.

    And, although both nations lost auto manufacturing jobs in 2000 and 2003, the decline was only 4 percent in Canada, compared with 14 percent in the United States.

    Jim Stanford, an economist with the Canadian Auto Workers union, said employers who could operate in either country save $4 per hour per worker by choosing Canada. “That’s a reasonably significant differential. . . . It’s one of the reasons Canada’s auto industry has done a lot better,” he said.

  2. Here is a post by a Venture Capitalist about his experience with Canada’s system.:
    • Swipe your health card. That’s it.
    • State of the Art
    • If it is serious, they move.
    • People cared.

    So, there you have it. The Canadian Health Care System. For me, it worked and the people were amazing.

  3. Number One barrier I have to starting my own company is HealthCare
  4. The existing system already rations care — but it is in an adhoc, incoherent manner.
  5. Medical bills contribute to bankruptcy:

    Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.13 Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

  6. BART-to-San Jose: Comparables to build a tunnel in the US and Canada — Canada’s tunnel was $70million/mile — the U.S. was $100million/mile because of the workers comp/disability insurance.

If you don’t like the Canadian system, then come up with your own. But our Health Care “system” is anything but a system — it is a disaster.

Compensation in the startup world.

Thursday, November 20th, 2008

My comment to Rick Segal’s post.

Peter Thiel at TechCrunch50 (timemark 18:30):

He said the #1 predictor of whether or not an investment was a success or failure was the CEO salary. He drew the line at $150K. More than that and the company was like to fail.

  1. The CEO aligned with the investors
  2. The simple reason he offered was that the CEO salary caps everyone else’s salary.
  3. The focus of the CEO is focused on building a great product and company

From my and my wife’s personal experience, every start-up that we worked at (except one*) where the CEO had a great comp package — the company failed. Everyone was looking at scoring their next bonus — not making the company better. The other result was that because the compensation given to the big wigs there was less money available for the engineers to make things happen.

I look at the Detroit jokes (aka GooberMotors, Fnord, Christ!ler CEOs) flying in on their corporate jets to Washington, DC and I know that those companies are going bellyup.

Malusus might be the answer. UBS is looking at requiring that bonuses be returned when the results are bad the next years.

* [The exception was a company that was small and very profitable. The two founders idea was that they didn't hire anyone until they could guarantee that they could pay everyone's salary for 6 months assuming that the company made no more money.]

However, investors need to be aware of what employees and founders need compensation-wise to keep their mind focused on the business.

28th amendment – Separation of Corporation and State

Thursday, November 13th, 2008

Amendment 28 – Separation of Corporation and State

And the Chelseagreen posting

My suggested amendment:

  1. Rights enumerated or reserved under this Constitution shall be accorded only to individuals. No State or the United States, shall make or enforce any law which shall recognize any corporation, partnership, organizational entity or other legal structure of capital as having rights.
  2. Citizenship is restricted to individuals. No State or the United States shall make or enforce any law which shall recognize any corporation, partnership, organizational entity or other legal structure of capital as a citizen.
  3. Any portions of any present or future treaty that include any such recognition that is prohibited by this amendment are null and void.
  4. Foreign citizens and corporations shall have no standing to challenge in any court, this amendment or any law that enforces this amendment.
  5. The Congress shall have the power to prosecute any court cases under this amendment. If the Congress so chooses, the Supreme Court has original jurisdiction.
  6. Congress may choose to try any corporation through the established impeachment procedures. Should a corporation be convicted, the corporation shall no longer be recognized as a legal entity in the United States. Any legal protection provided by the corporation is rendered null and void.
  7. The Congress shall have power to enforce this article by appropriate legislation.

To the readers who say this is too radical, I will point out a few things.

  1. Corporations do have a place in the modern world.
  2. Responsible corporations do exist.
  3. Only human beings and living things suffer truly irreversible harm — a corporation as a convenient legal fiction should not be allowed to permit human beings to willfully and irresponsibly cause permanent harm to others.
  4. It is only when everyone realizes that they may be held personally liable will human beings be truly treated as human beings.
  5. Responsible corporations will rise to the occasion, irresponsible corporations will be punished first in the stock market, then by the courts.

Some Notes:

  1. I single out treaties because treaties ratified by the Senate have the force of law. This is a backdoor mechanism that is used to create new laws without going through the normal democratic process. [Update: there have been numerous cases under NAFTA where foreign companies have sued to get local laws thrown out - under pain of heavy fines. So effectively NAFTA bypassed the will of the people.]
  2. As has been proven by the Bush the lesser administration, laws are meaningless if the executive chooses to ignore them. Congress should have a separate mechanism to enforce this amendment.

[Update: removed some slippery loopholes in original version.]
[Update #2: the reason for the prohibition on foreign nationals/corporations from suing, is because many corporations have decided that it would be best to be foreign rather than U.S. based for tax reasons. Now they would have a reason to come home.]

How can government “subsidize” green technology

Wednesday, November 12th, 2008

The laissez-faire infatuatants like to talk about how government should just “stay out of the way”. Well here is some ways that government can help everyone else “stay out of the way” so solar, wind, etc. energy production has a chance to save our sorry asses:

  1. Folks should be paid for the extra solar electric energy production that exceeds usage. Huffman has a bill to in the CA Legislature, AB 1920.

    AB 1920 establishes a means by which Net-Metered customer-generators can get credit for “excess” electricity generation over and above their energy usage. The current Net-Metering law allows these customer-generators to get a “credit” toward their bill, but does not allow for any compensation for their excess generation. Many people are amazed that the utilities are not required to pay for this excess generation. This bill would correct that. The Renewable Energy Credits (RECs) and Renewable Portfolio Standard (RPS) credits for the excess generation purchased by the utility would then be owned by the utility and count toward their RPS requirements.

  2. Some statewide or region wide consistency in solar electric permitting submittal and inspection standards (Kurt Newick is working on getting this adopted at the International Code Council, the local Bay Area building officials). A proposed SolarTech approved standard for Photovoltaic installation permit submittal recommendations. (Instructions)
  3. Requirement that new homes have south/southwest facing roofs with a minimum 300 square foot surface. Kurt is reporting lots of crazy roofs and bad angles that make installing solar impossible.
  4. Requirements/guidelines on roofing angle to reduce installation costs.
  5. Currently in California, Homeowner Associations cannot block a solar installation. However, more than a few times homeowners have had to threaten to sue to get HOAs to agree to actually follow the law. HOAs ability to interfere in this area needs to be reduced -something with real teeth. This interference creates delays – increasing costs and making more likely that a less determined homeowner will follow through.
  6. Require new homes have the needed wiring in place so solar can be retrofitted post construction.
  7. Remove ability of NIMBYs/HOA/planning boards to determine that solar panels are ‘unsightly’ and shouldn’t be visible from street or some such nonsense.
  8. In multi-unit townhouses where the HOA handles exterior maintenance – the homeowner who installs solar is liable/responsible for the cost of removing the panels if roof work is needed. This burden should be assumed by the HOA.
  9. In multi-unit townhouses, individual buildings or connected units should be able to vote to install solar that will service the entire building or connected unit block. This handles the case where a good solar installation will cross multiple units’ roofs.
  10. Reduce/eliminate inflated permitting fees charged by cities. See this study for more details.
  11. Focus on the demand side as well. Develop Energy Star ratings for houses, the same as we have for refrigerators and other appliances. Penalize developers/builders/homeowners for building/buying houses with a poor rating. Have the Energy Star rating affect the property tax on the house. For townhouses, this might need to be assessed at the HOA level. Same needs to be applied to commercial buildings. Lots of flat roofs that should have solar on them.
  12. Don’t ignore barriers to geothermal or small windpower installations as well.

Don’t trust intuition!

Tuesday, November 11th, 2008




Practical Guide to Controlled Experiments on the Web: Listen to Your Customers not to the HiPPO

Experiment!

  • Run A/A tests — make sure the variation you are seeing isn’t just natural variation
  • Beware Coupon Codes — too prominent and people abandon shopping carts to go look for that discount code
  • Two step feedback requests result in better feedback than the stars and the textarea presented all at once.
  • Need to experiment across every user to get meaningful data
  • Multiple experiments rarely interact — so run multiple experiments (even on same page)
  • Drilldown on data — could discover that one browser is having a javascript bug

obama should go full steam ahead

Wednesday, November 5th, 2008

Obama should ignore these Republican water-carriers (Thomas Ferraro and Richard Cowan):

Because of a record federal deficit and the deteriorating economy, Democrats will have to limit or postpone any big new spending programs, including measures to expand health care, upgrade education and advance renewable energy technology.

Sez who? Obama is all about change. Big change. Not the change of small-minded reporters.

irony as a sauce

Saturday, November 1st, 2008

Earlier I wrote that the various banks should just be run through the “normal” bankruptcy under the 2005 pro-big-business bankruptcy law.

Well it turns out that the sauce for the goose, DOES work for the gander! Looks like the 2005 law helped cause the demise of Lehman Brothers (sponsored by the Lehman Brothers no less :-) ): (h/t: naked capitalism)

Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman Brothers and American International Group by backing new bankruptcy rules that were aimed at insulating banks from the failure of a big client, lawyers and bankers say.

The 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.

Lawyers said under the old rules, creditors of companies facing financial difficulties were wary of settling trades or seeking extra collateral because they knew such demands could precipitate a bankruptcy filing and potentially freeze their claims.

However, when the financial health of Bear, Lehman and AIG took a sharp turn for the worse this year, their trading counterparties – mainly hedge funds and other banks – were not deterred from seeking to settle their trades or forcing the three companies to put up more collateral.

Such pressure exacerbated the liquidity squeeze that ultimately forced the three companies to hoist the white flag. Bear was sold to JPMorgan in a cut-price deal in March, while Lehman filed for bankruptcy last month and AIG was rescued by a $120bn government loan.

Lawyers said the 2005 exemptions also could apply to non-financial companies, potentially complicating the bankruptcy process of any company that uses derivatives. Stephen Lubben, professor at Seton Hall University School of Law, said: “These provisions affect a non-financial firm, such as a car company or an airline, because they also engage in derivatives trading.”