JustinIdea

If Food Doesn't Require Insurance, Health Care Doesn't Require Insurance

2009-07-31T14:16:57-07:00

With all of the fuss in DC surrounding Congress working on sponsoring new health care initiatives, it doesn't seem like anyone has asked this basic question: is health care truly that critical? Here's the short question and answer - if you don't have health care for a year, will the average person die? No. Some people may, but most people won't.

Here's another way to look at it:

If you don't eat for a year, will you die? Yes, everyone will.
If you don't get water for a year, will you die? Yes, everyone will.
If you aren't able to shield yourself from the elements with shelter, clothing, and blankets will you die during the winter or get shade in the summer? If it gets very hot or cold, then yes, most people will, especially if they don't have a source of fire or heat in the winter.

So if health care is less critical than food, water, shelter, and clothing, but the average person pays for their own food, water, shelter, and clothing, is able to afford it, and has seen the cost of each of those items drop over the last 50 years, then why are people arguing that we need to require everyone to expand the role of health insurance and government in health care? It doesn't make any sense.

You don't buy food, water, shelter, or clothing insurance in order to buy these most basic necessities. Necessities, nonetheless, that you require in order to live and without which you will die. If the average person walking into a store or looking at homes did need insurance for these, it would make prices go up and make people starve and die, because they would waste time having to get approval from their provider to see if they could buy the apples that went on sale for 99 cents a pound. Sound familiar?

So if people can pay for their own food, water, shelter, and clothing, and small government programs like food stamps and charities, such as food banks, can provide the basic human needs we need without big insurance programs and mandates, then people should pay for their own health care, directly. If people paid for their own basic health care without insurance, you would see costs drop, quality increase, and everyone would be able to afford it and would get it. Insurance would be used just like homeowners insurance, in case something really bad happened.

If you want everyone to have health care and have lower costs for health care, people should be allowed to pay for their own basic health care and buy insurance for only things that are catastrophic.

The Next Industrial Revolution

2009-07-30T20:36:03-07:00

Bob Hauge's research team at Rice University just announced they've created a method that can build pure carbon nanotubes that are currently measured in centimeters, but could eventually yield nanotubes of unlimited length.

For those who are wondering what's so big about carbon nanotubes, carbon nanotubes are small carbon tubes that are 1/50,000th the width of a human hair and at least 30 times stronger than steel. Being able to mass-produce carbon nanotubes for cheap will create a revolution in manufacturing at least on the scale that computers of done and continue to do to information.

Carbon nanotubes are currently incredibly expensive to manufacture. For example, 1kg of single-wallled carbon nanotubes at cheaptubes.com costs $50,000. That's why this method is potentially so powerful. If this method can drop the price by 100x-1000x, which would be $50-500/kg, cars would become lighter and safer, clothing would become bullet-proof, human space exploration would become economical, and the infamous space elevator would be able to be built on a budget (right now a low payload elevator would cost $450 million - how about a heavy-lifter for $20 million?!). I can't wait until this process is commercialized.

Large Scale Genetic Studies of Diseases May Be Seriously Flawed

2009-07-16T15:39:34-07:00

A group of researchers from McGill University studying abdominal aortic aneurysms published a paper in the July issue of Human Mutation that has serious implications for all large scale genetics studies that have been started in the last 15 years (except for those using DNA from cancer cells), including those funded by the National Human Genome Research Institute and studies that are the basis for new gene therapies and genetic testing.

The group of researchers found that contrary to what had been previously thought, the DNA in every cell in a person's body is not essentially identical. This is huge because genetic tests for diseases have traditionally used DNA from the blood in order to test a person for risk of a given disease (with many consumer genetic tests using saliva). The fact that one cannot just use any DNA found in the blood or saliva, but must instead extract DNA straight from the problem cells, means that all previous genetic studies, aside from those that used cancer DNA, will need to be redone and all future studies cannot rely on just blood samples from people. Not to mention that in order to perform genetic studies and tests, doctors will need to be able to get sample cells directly from the person's tissues that they are worried about.

Learning Limb Regeneration From Salamanders

2009-07-15T20:23:18-07:00

Back in high school, a friend of mine gave a presentation in an advanced biology class we had together about the potential to regenerate human limbs by learning about salamanders, which he also tied to how humans could eventually take-on the power of some superheroes.

Well, it looks like researchers are starting to make some important progress on learning about how salamanders are able to completely regenerate parts of their bodies, including limbs, jaws, skin, organs, and parts of their brains and spinal chords. Imagine if humans had this type of power? The Department of Defense certainly wants us to, so that amputees from war are able to regenerate their limbs and live a normal life, and has given a $6.25 million research grant to scientists studying the creature.

So where is the state of science on the salamander at? Currently, scientists in Germany have genetically engineered a version by adding a green-glowing gene from a jellyfish to a wild mutant without skin pigment, so they are able to track the fluorescent proteins as the limbs regenerate.

The Genius Curve

2009-07-10T16:34:23-07:00

A couple of friends had passingly mentioned it, so I decided to hunt down the paper on "the genius curve." It's a very interesting paper published in 2003 about how the genius and crime curves are linked by the testosterone drop that happens in men once they get married and have kids - this causing men to be less competitive and hence cause less crime and provide fewer scientific achievements. I was wondering what environmental effects might cause this. The fact that married men still make contributions to science after they marry, even if there's a drop-off signals more than evolutionary biology is happening.

Some ideas that come to mind:

Time dedicated to work decreases. Once married and with kids, you start to restrict your work hours. Gone are the 80-90 hour weeks, and 40-60 becomes the new norm. Unless you're ok with not seeing your family as much.
Time at work becomes focused on securing resources for the family. The focus is no longer on trying to make amazing contributions, but instead the near-term need of making sure the bills are paid and that savings for the kids education is happening.
They worry about keeping-up with the Jones's, so making contributions to humanity starts to take a back seat again.
They start to work-out less, especially strength training, due to increased time commitments elsewhere, which lowers their testosterone levels below the elevated levels they had when they worked-out.
They allow their minds to become less curious due to their shift in focus. If you're having a tough time putting food on the table, will you really care about the latest developments in human genetics? Although I'm guessing with amazing scientists that less curiosity doesn't necessarily become the case, but maybe more so, the men become more ingrained in their ways of thinking.

Another thing to look at would be the people who continued to be productive and contribute to science in their later years. Are there any commonalities among them aside from not having married and have kids, and if so, do they do something that the ones that peak in their 20's don't or vice versa? And what does this mean for entrepreneurs? Seeing as I'm 23, an entrepreneur, not married, and without kids, I'm curious as to what things might cause men to achieve less later in life.

Minorities Holding-Back Minorities

2009-07-09T19:30:11-07:00

The fact that an African-American firefighter would punch a Latino firefighter, because the Latino firefighter stood up for equality under the law, is ridiculous. It's sad that some minorities want their employers to promote them based-on the color of their skin instead of the content of their character, and these are the ones who have been holding back minorities for the last 45 years. Did they not listen to Martin Luther King, Jr - a man that is held up as a martyr among men and in the same esteem as George Washington and Abraham Lincoln?

"I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character."

The content of one's character is judged based-on merit and how they deal with others. Holding minorities to a lesser standard than whites is reverse discrimination and does not hold true to the words that King spoke on August 28th, 1963. If minorities aren't up to par competing based-on merit, they need to shape-up and start working harder and smarter, instead of complaining about discrimination. Focusing on championing educational achievement in minority communities by the minorities themselves, like Booker T. Washington had done, would be a great start.

But too many minorities feel entitled today because of injustices that occurred in the past. But do you know what? This is America. We aren't limited by a caste society where you must stay in the same social bracket that your parents were born in and perform the same job as them. We have the freedom to be our own people. If your workplace is discriminating against you, then quit and start your own company whose policies of non-discrimination will make you out-compete the competition and put them out-of-business.

Yes, there is still racism in America, but it isn't nearly as bad as it was 50 or 150 years ago. Today's racism is peanuts compared to then. So stop complaining and start working, doing otherwise is a disservice to those that were enslaved and faced heavy discrimination in the past. And if American-born minorities don't start working, then the immigrating minorities will leave them in the dust (and hopefully change the culture of laziness among some of the American-born ones at the same time). Just look at President Obama. He's the son of a Kenyan immigrant (no American slave roots). It's the work ethic that counts.

p.s. Apparently Supreme Court nominee Sonia Sotomayor doesn't agree that merit should be held above color.

Translating the 10 Principles of Economics for Non-Economists

2009-07-08T17:54:14-07:00

In case you were wondering what is guiding all of those economists out their making decisions right now that will decide the future state of our economy (or if we'll have one), Yoram Bauman does a brilliant job of translating the 10 principles, so that non-economists can understand what is going on in the minds of economists.

From his blog: Random Observations for Students of Economics

Controlling Rising Health Care Costs - Give the Power to the People

2009-06-23T18:53:06-07:00

Right now, Democrats and Republicans in Washington, D.C. are fighting over what type of system the United States should use to control skyrocketing health care costs. I thought I would do some digging to see which plan will actually reduce costs.

The Plans:
Democrats - Government-insured (especially a push for single-payer) health care
Republicans - Private insurance and government out of the picture

I went digging and using data from the Center for Medicare and Medicaid Services, I found that the plans put forward by both the Democrats and Republicans will fail at controlling costs. Costs have been rising even though Medicare, Medicaid, and private health insurance have been insuring a larger proportion of American's medical care since 1960, when the Great Society programs and employer- based health insurance really started to take-off. If the given plans would save money, then the domination by government and private insurance should have already started yielding cost savings. Instead, costs have been skyrocketing.

So I kept digging to see if there was any granule of data that would show me anything about why health care costs have been rising. The devil was in the details.

What are both plans missing? The power of the consumer. Insurance, whether government or privately-run, fails to contain costs. Food is more important than health care, yet we don't need to buy food insurance to ensure every American is fed. Since World War II, Americans have been relying more heavily on insurance than ever before to pay for health care.

Digging through the data, I found that as Out-of-Pocket payments for health care have decreased as people shifted to insurance (both private and public), while health care costs soared and the types of health care paid for have stayed relatively stable.

The system that we have that is based-on insurance is the problem. In order to lower health care costs, we need to get insurance (except for catastrophic) out of the picture and have consumers pay for their own health care. Then everyone will be able to afford their own health care, on their own.

In order to create the system, the Federal Government will need to:

Tax employer-sponsored health insurance (to stop distorting the market)
limit federally-financed health care to Medicare for the elderly (they deserve to be paid-back for the money they put-in).
give Medicare beneficiaries accounts with pre-determined amounts of money to spend on health care that they can then use to shop around for non-catastrophic health care use (and this is what they're limited to). Then give them catastrohpic coverage to cover the balance.
Make sure direct primary care providers are not defined as insurance companies for Medicare patients
Make illegal the practice of insurance companies limiting their payments to doctors within their "network", which is anti-competitive and hurts consumers.

State Governments that are serious about controlling health care costs will also make sure direct primary care providers, such as Qliance, are not defined as insurance companies.

Instituting these programs will take the incentive away for people to get insurance and will give the power of their health care decisions back to the American people.

For more info, check out:
"How to Cure Health Care" by Milton Friedman

Utilitarianism is Slavery, Individualism is Freedom

2009-06-19T16:34:45-07:00

I can get into some fairly intense debates with a few friends of mine that subscribe to the utilitarian ethic, since I am an ardent individualist. So I've been thinking about how to best show the fundamental flaw of utilitarianism and why individualism is the view I subscribe to.

It all comes down to the fact that utilitarianism is slavery. When you use a utilitarian philosophy, you work on creating the greatest good for the greatest number, which means that whoever is doing the deciding of what the greatest good is and who the greatest number are is in essence playing god by controlling what everyone else can do and everyone that they control is their slave. This person doesn't need to be a big man either; it can be a small group or a majority of the people as well.

For example, let's say we have a group of people that want to go to war and another group of people that don't want to. The reason those that want to go to war are for it is to get the other nation's resources and to expand. Right now, the ones that want to go to war are in the majority, and since everyone that is part of the group needs to go to war (as in be enlisted in the military and see combat), then those in the minority are a slave to the opinion of the majority, and must go along with it, even if they object to it. Under individualism, the majority would not be able to force the minority to go to war. They would have to go to war by themselves and could not enslave the minority for their aims.

This is just one example, but anytime you use the utilitarian ethic, you are saying that the individual is a slave of the group's opinion, whether the group is a nation, a company, or a group of peers exerting pressure. This is exactly why the United States is a republic and not a democracy. Democracy is tyranny of the majority, while a republic protects the Rights of the minority.

Since slavery was abolished in the United States with the Thirteenth Amendment, why are people in the United States still trying to enslave individuals by using the utilitarian ethic? Only individualism provides true freedom.

Break-up Big Banks to Increase Shareholder Value and Reduce Systemic Risk

2009-06-18T23:44:26-07:00

Since before the Federal Government decided to get in the game of bailing-out the banks last fall, I've been of the opinion that it would be better for the Federal Government to not let banks get too big to fail and to break them up into smaller pieces when they get too big, so they don't become a systemic risk, instead of bailing them out. After Microsoft was being threatened with being broken-up, I saw the fallacy in trying to break-it-up into two or three monopolies instead of 5-10 competing companies, like when Standard Oil was broken-up. While pondering this possibility for banks, I realized that breaking-up big banks into smaller banks might also have additional huge benefits to both the bank shareholders, the financial system, and taxpayers.

Rules of the System
Here are some general rules that would guide the benefits of this system:

Banks too big to fail, maybe $500billion+ in assets, will be broken into banks with $100-200 billion in assets
The "Child" banks are not allowed to merge with nor acquire other child banks for 5-10 years (unless they are being liquidated), but they may merge with and acquire non-child banks (non-child banks do not include the children of other big banks that were broken-up, those are still child banks).
All child banks of a given parent bank, will each get the same systems, procedures, and technologies that their parent had, just like if the parent was a bacteria and duplicated itself into a bunch of children. This way they all face a level playing field, with their siblings.
The shareholders in the parent bank, get equal shares in each of the child banks.

Benefits to Bank Shareholders
First to the bank shareholders, because any move should make sure the shareholders can see their return increased. Big banks like any big company will come against the law of large numbers and have their growth stall once they become huge, since as they grow larger, the amount of revenue growth they need in order to increase their returns grows along with their new revenue levels. Small banks don't face this limitation. Therefore, the children of the best run big banks will be able to grow faster than their parent by acquiring, absorbing, and instituting their best practices into other banks. Giving shareholders a stake in each will allow the shareholders to see their returns potentially increase at a much faster clip, while at the same time spreading their risk. For example, JP Morgan and Wells Fargo shareholders could see huge gains in shareholder value by having this system adopted, because both banks are incredibly well-run. (Full disclosure, I've had family members work at Wells Fargo and I own stock in it through a family, stock partnership. Also I have a good friend at JP Morgan. :)

Benefits to the Financial System
Second to the financial system, because we don't want the system to come crashing down around us. The big banks that are not run well, when broken into smaller pieces, will have their bad pieces go under, because the smaller, bad banks won't be able to spread their risk over a larger bank and hide their troubles. This will provide more room for the well-run banks to grow. What then happens is the bad practices are destroyed faster and the good practices are able to grow faster, which leads to greater productivity growth and a more stable system overall, especially since the bad banks are reduced to banks that won't damage the overall system after they eventually fail.

Benefits to Taxpayers
Finally to the taxpayers, since the banks that are too big to fail will be broken-up, there will no longer be a need for bailouts, ever, which will save us hundreds of billions if not trillions of dollars in the future. No more Citi's, Bank of America's, and AIG's will be sinkholes for our money.

Turning-up the dial on creative destruction can be a great thing.