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I’m spending this month down among Boston’s largest cluster of hospitals. One thing that I’ve noticed is that the people who do the work are completely disconnected from the people who collect the money.

I sat with a group of medical students looking at some insurance data. There were 12,000 claims for one patient. I said “What a disaster for the insurance company.” The students were bewildered. They had been thinking only about the hardship for the family and patient, i.e., bringing someone in for 12,000 procedures, medications, tests, etc.

A suburban friend’s cleaning woman came into one of these hospitals, told them she had no job, and they delivered her baby for free. One of the beauties of the U.S. system is that nobody can say what the value of this service was or what it would have cost if she had tried to pay. (For example, see “The Real Cost Of Giving Birth In The U.S.” (HuffPost) in which you won’t actually learn either what it costs or what the hospitals charge!)

A friend of a friend is married to a Honduran. Every time one of her extended family members is 8 months pregnant she will come to Boston. After labor begins, “they drop her off and drive away; that way nobody can ask for her address or insurance information.”

[Aside from the free hospital services, what’s the value in this system? The US Govt offers permanent residence to anyone whose child is a citizen at least 21 years old (see this helpful federal web page on the subject). In most states permanent residents are eligible for nearly all welfare benefits. Thus the “anchor baby” eliminates the need to save for retirement and the parent can spend 100 percent of his or her income prior to retirement.]

Given that doctors don’t make too much use of past test results, and therefore there is no medical value in supplying a real name, I’m surprised at the horror stories that we sometimes read in the media about hospitals chasing down former patients for non-payment of bills. At least in urban environments, how was it that any hospital ever gets the full name, address, and Social Security number of an uninsured patient? Why aren’t Americans simply saying “I’m undocumented” when asked invasive personal questions by a hospital administrative staffer?

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Remington Arms was founded in 1816 (Wikipedia). It survived ups and downs in the U.S. economy until the private equity looters got their hands on it starting in 1993. After the extraction of roughly 200 years of built-up enterprise value, the debt-laden company was fragile and had a tough time weathering the Trump Firearms Slump (see “Cerberus’s Remington Debt Fizzles as Trump Cools Firearms Fervor”). Now it is time to cheat all of the bondholders via a Chapter 11 bankruptcy filing: “U.S. gunmaker Remington seeks financing to file for bankruptcy: sources” (Reuters).

When will investors learn not to buy bonds from these crippled-by-private-equity companies?

[How does private equity looting work? PrivateCo “buys” a company from the existing shareholders for $300 million. Then the company borrows $800 million, of which $750 million is paid to PrivateCo as advisory or management fees and/or dividends (PrivateCo is the only shareholder). A few years later it turns out that the company can’t pay principal and interest on the $800 million in debt so it is time to go Chapter 11 and wipe out the bondholders. That’s the classical approach, but it needs to be disguised a bit so that the bondholders can’t sue. Donald Trump actually tried to shut down this party by (a) making private equity guys pay taxes at the same rates as everyone else (closing the “carried interest” loophole), and (b) eliminating the deductibility of interest for corporations. Congress, however, wouldn’t go along. It is tough to see what value is created via leveraging up these ancient companies. If an investor wanted a leveraged investment in a stodgy company, he or she could simply buy the stodgy company on margin.]

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Mindy the Crippler recently had her annual checkup. With a year’s supply of heartworm and anti-tick meds, plus vaccines (but not rabies, since that causes dog autism (also only needed once every three years), the bill came to $594.56.

In my personal health care reform plan, I estimated the average cost of caring for a Mexican human to be $800 per year. In that average are Mexicans with severe and critical medical issues. So the cost for a healthy Mexican is presumably no higher than $300 per year. Ergo, if Mindy were to remain in perfect health (which I pray that she does), her veterinary care will correspond in price to that of a somewhat sick Mexican.

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NBC alone will broadcast 2,400 hours of mind-numbing waist-expanding television during the 2018 Olympics (source). That’s more than one year of “full time” work.

Of course it is inspiring to watch the accomplished and disciplined. But on the other hand, who among us has embarked on a multi-year training program and stuck to it after being inspired by the Olympics?

Readers: Will world GDP fall during this event? People who glued to the TV aren’t working or buying stuff.

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One of my friends from grad school and I swapped tales of yesterday’s meetings.

She had a meeting with a CEO who dropped unsubtle hints about (a) his wife being away, (b) this resulting in a lack of sexual activity, (c) maybe it was therefore time for an affair.

[Note that, statistically, the wife being away should not be relevant to the “no sex” situation; roughly half of married women are uninterested in sex with their husbands after four years of marriage (Good Housekeeping).]

I had a meeting with some “data scientists” at an insurance company. There was certainly no discussion of anything sexual and the only risk was of falling asleep.

I was sorry that my engineer/entrepreneur friend had a negative experience with the lonely CEO (in order to reduce litigation risk, maybe the Board of his company should get him a plane ticket to a jurisdiction where prostitution is legal and fund a “party”?), but I pointed out that maybe the fact that he was willing to meet with her and talk about a super risky investment was correlated with the fact that he was considering taking the risk of mixing sex and business. I’m pretty sure that those insurance company folks wouldn’t be buying anything riskier than the S&P 500.

The recent SpaceX heavy rocket launch was yesterday (AVweb). Who was willing to take the insanely risky bet on this company? Steve Jurvetson, the recently disgraced venture capitalist (see this interview with him on the subject of SpaceX, made just before all that anyone cared about was which women he was having sex with).

What’s the answer? How about we give all positions of power to women? American guys have demonstrated a willingness to sit on the couch and play Xbox if someone else will pay the bills! (See Massachusetts Prenuptial Agreements for what else guys may be doing while the high-earning 50-year-old wife is at work exercising her power.)

And, finally, what do readers think about the SpaceX launch? Back in 2011, at least, it was said that SpaceX was spending only about 1/10th as much as if NASA had run the program (source).

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Congress passed some changes to the U.S. tax code back in December 2017. When Donald Trump signed these into law he said that he was cutting taxes on corporations and the media generally reported it as a “cut.”

Now that everyone is back from vacation, we’re seeing headlines such as “Microsoft 2Q18: Trump tax hit turns strong quarter into $6.3B loss”.

How is it possible that companies are paying more when their taxes have been “cut”?

From the article cited above:

The cause of this was a $13.8 billion tax bill courtesy of the Tax Cuts and Jobs Act (TCJA), signed into law by President Trump late last year. Absent that change, net income would have been $7.5 billion, up 20 percent year-on-year, with earnings per share similarly up 20 percent to $0.96.

The TCJA imposed one-time tax rates of 15.5 percent on foreign-held cash and cash equivalents and 8 percent on non-cash, as if that foreign money had been repatriated to the US and hence subject to US corporate income tax. Many firms with large foreign-held cash piles are going to be taking big tax hits this quarter as a result; Citibank claimed a $22 billion charge, and Apple is expected to take a hit as big as $38 billion.

I can’t remember this being reported. Companies that weren’t smart enough to flee to Ireland years ago are now being hit with tax on 10 or 20 years of accumulated off-shore booty. This is a huge one-time boost to the U.S. government. Under the old system they could have left the money offshore indefinitely and never paid any tax. So it is tough to see how this can fairly be characterized as a “cut” even if tax rates for the next 10 or 20 years might be lower.

My Facebook friends put out a constant drumbeat of “Trump is stupid” and “Trump is an idiot,” but successfully spinning this huge tax bite as a “cut” looks more like genius, no?

Related:

• What could President Trump name after Apple Computer?

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“Gay-rights groups say Amazon should avoid these 9 cities for second headquarters” (USA Today):

Gay-rights advocates ran a “No Gay? No Way!” campaign Thursday to pressure Amazon to avoid building its second headquarters in a state that does not protect its residents from discrimination for their sexual orientation or gender identity.

“Think about the implications for an existing employee who might be asked to transfer there. You move to one of these states and you’re looking for an apartment and you could be denied a lease because you’re gay,” said Gaughan.

One activist said the campaign is not meant to harm the gay people who live in the nine cities.

The last part seems interesting. If certain states are populated by citizens (“haters”) so anti-gay that an employer shouldn’t locate there, why do any gay adults live in those states? If we assume that gay adults are intelligent and possess agency, given that there are no restrictions on emigrating from a purportedly anti-gay state to a purportedly pro-gay state, why wouldn’t all of the gay adults have moved away some time ago? If things are as different from state to state as the folks quoted in the article contend, why wouldn’t these differences result in a more or less complete population exchange?

[Alternatively, if we do believe that there are gay people living in anti-gay states, that they are somehow stuck living there despite the pervasive prejudice, and that Amazon is LGBTQ-friendly, wouldn’t it make more sense to advocate for Amazon to set up a new facility in an anti-gay state? That gives the gay people who live there an opportunity to find a safe space for at least 40 (or 80?) hours per week.]

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Folks protest the Redskins football team for a purportedly racist name, but the “Patriots” are celebrated, at least here in Boston. One of the main agenda items for the American Revolutionaries (not to be confused with “rebels”) was stealing land from Native Americans west of the Proclamation Line, established down the spine of the Appalachians by the British in 1763. Many of the actual “patriots” stood to gain what would today be billions of dollars in wealth if this ban on white settlement could be eliminated. (start with “Washington as Land Speculator” from the Library of Congress)

Shouldn’t folks who care about football and Native Americans be demanding that the New England Patriots change their name? And be more passionate on this issue than on the Redkins?

Separately, what about the T-Mobile ad where babies with different skin colors were featured to illustrate the company’s commitment to various virtuous values, e.g., “you come with open minds and the instinct that we are equal. … You’ll demand fair and equal pay.” The company advocating equality pays its CEO 178 times more than a median employee (payscale.com). What about the context in which the ad appeared? What would be “fair and equal pay” for most of us to run out on the field and participate in an NFL game? Does it make sense to say “we are all equal” in the middle of a sport in which few of us can compete? How long would a 100 lb. 70-year-old TV viewer last on the scrimmage line?

Readers: What were your personal Super Bowl highlights? My most vivid memory is the communal kissing of the trophy at the end of the contest. A ritual in which each person touches or kisses a metal object seems like a bad idea during flu season!

Related:

• the Superb Owl party legal dispute
• Superb Owl Sunday photo gallery
• Why isn’t the Super Bowl always in a tax-free state?
• All you have to be is white (to be credited with Super Bowl victory)?

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“Will America yield its position as the world’s leader in science and technology?” (Boston Globe) is by Eric Lander, one of MIT’s top biologists:

Finally, are we prepared to expand science and technology opportunities for all Americans? The United States has only 5 percent of the world’s population. To stay ahead, we’ll need to use all our assets. That means leveling the barriers for women in science and engineering, and closing the participation gap for underrepresented minorities.

He complains that Donald Trump doesn’t Tweet about science and technology and isn’t spending 24/7 lobbying Congress to increase funding for folks like Eric Lander. But if there are “barriers” to women and minorities in science and technology, who put them up if not guys like Professor Lander and institutions such as MIT? Isn’t he admitting that America’s science and tech institutions are sexist and racists on a continuing basis (the barriers are still in place and are yet to be leveled, according to the Globe article)? If so, why would taxpayers want to give more money to sexists and racists? Why not fund some sector of the U.S. economy that is already open to women and minorities?

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Fans of Zoolander will be pleased to know that the Predator drone is not an ambi-turner: it is pre-programmed to orbit left around a point.This was an issue when the $1 million pod that the US slung underneath the originally-Israeli-developed aricraft required right turns. The pilots have to manually build up flight plans for nearly every operation.

I learned this during a talk by a retired USAF pilot to a gathering of local pilots.

According to this guy, who was recalled after a long career to fly drones, the Predator can take off at up to 2,500 lbs and climb to 25,000′ with a feeble 115 hp turbocharged Rotax engine. The biggest cause of loss of the $4 million aircraft was turbocharger failure that would then take out the engine due to a shared oil system. The second most common reason for loss was icing due to the fact that the aircraft lacks anti-ice or de-ice equipment: “You get into the clouds in the mountains of Afghanistan and you instantly ice up.” The aircraft did have an ice detector and alarm for the pilot.

When the drone loses communication via the KU satellite it takes 12 minutes for the link to be reestablished. During these 12 minutes the drone will fly its flight plan.. including right into a thunderstorm (this happened to the speaker once).

Takeoff and landing were usually handled by a local team right at the airfield where the Predator was based. “Pilot-induced oscillation on landing was common. The nose gear would collapse and the $1 million sensor ball underneath the aircraft would be destroyed.” Once above 3,000′ AGL a U.S.-based crew would take over. If the job is sitting and drinking a large Starbucks beverage, what happens during bathroom breaks? You might think that control of the drone is zapped to another crew’s workstation, but instead the break crew comes in and physically sits in the chairs just vacated by the pilot and enlisted guy (“sensor operator”) who head out for McDonald’s. The speaker explained that, because the Predator is firing a weapon, the pilot must be an officer under current USAF rules.

The Predator lacks any kind of traffic avoidance or warning system. “We would get advisories from ATC.”

Pilots who transitioned to the Predator from traditional aircraft did better than pilots for whom flying was purely a desk job. The drone-only pilots would put in huge rapid power changes at high altitude, rather than making the smooth throttle adjustments of an experienced turbocharged piston pilot, and the result would be cracking, oil loss, and a $4 million hole in the ground.

Due to the turbocharger failures and losses from icing encounters, the Predator has been replaced with the larger and vastly more expensive turbine-powered Reaper, but the Reaper cannot match the Predator’s 22-hour loiter time.

Our speaker had served in Vietnam and said that he and his age cohort enjoyed killing the “bad guys” (of course, the jihadis are entitled to their own opinion regarding which side is “bad”!). So they’d clock out after blasting a house with a Hellfire missile and enjoy hanging out with friends and family. The young guys, on the other hand, complained of myriad psychological problems and are retiring at a 100 percent disability rate due to PTSD.

Speaking of psychological problems, I am not sure that the snowflake generation would have felt safe at the pilot gathering. Jokes told over the PA involved prostitutes and lawyers, for example. The tamest example:

One guy has a 7-year-old Goldendoodle who is addicted to humping females of the canine persuasion. The animal’s name is “Marvin,” but for the last few months the family has been calling him “Marvey Weinstein”.

More typical:

Bill and Hillary are at a Yankees home game, sitting in the first row, with the Secret Service people directly behind them.

One of the Secret Service guys leans forward and whispers something to Bill.

At first, Clinton stares at the guy, looks at Hillary, looks back at the
agent, and shakes his head “no”.

The agent then says, “Mr. President, it was a unanimous request of the entire team, from the owner of the team to the bat boy.

The agents tells Bill that the fans would love it.

Bill shrugs his shoulders and says, “Ho-Kay! If that is what the people want.
C’mere Hilly baby.”

With that, Bill gets up, grabs Hillary by her collar and the seat of her pants and throws her over the wall onto the field.

She gets up kicking, swearing, screaming, “Bill you”!$#@&!”. The crowd goes absolutely wild. Fans are jumping up and down, cheering, hooting and hollering, and high-fiving. Bill is bowing, smiling and waving to the crowd.

He leans over to the agent and says, “How about that; I would have never believed how much everyone would enjoy that!”

Noticing the agent has gone totally pale, he asks what is wrong.

The agent replies, “Sir, I said they want you to throw out the first ‘pitch’.”

Related:

• “Confessions of a Drone Warrior” (the young pilot becomes “angry, isolated, depressed”)

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