The Money Minute Weekly™

Free Market Working

2009-11-10T06:38:00.001-05:00

Although serious problems exist within our current health care system, and despite recent legislation which poses it serious peril, history and economics teach us markets are resilient. Already, many examples of successful free market health care abound. A few include: 1.) The creation of $4 prescription drug programs; 2.) Pharmacy and other brick-and-mortar (low cost) clinics; and 3.) Cost mitigation vis-à-vis direct negotiation with physicians. In brief, these initial steps are by no means comprehensive, but represent concrete examples of private enterprise fulfilling critical needs in our communities.

Second, even in diluted capitalism, entrepreneurs find ways to provide vital services to consumers and will do so regardless of Congress. Again, markets are resilient, they fight for freedom. And they WILL triumphmaybe not today, but eventually.

However, the federal government does have a Constitutional role in this area, albeit, a limited one. Like the Hippocratic Oath, one of the Constitution's sole and explicit purposes is to limit the role of government. Often, some argue the Constitution is a "living document." However, a "living document" implies one is free to "breathe" into it whatever one pleases. When this happens, it becomes a dead document. Therefore, in regards to health care, "We the People," must decide, as financially literate individuals, the best method of care. It is not the Constitutional role of government to cater to our every need, despite what we may wish to be the case.

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What's in the Health Care Reform Bills

2009-11-07T20:24:00.001-05:00

Finally, the details of these bills actually see the sunshine! Read it, read all about it!

http://finance.yahoo.com/news/House-Senate-health-care-apf-3314142498.html?x=0&sec=topStories&pos=2&asset=&ccode=

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Liberate Health Care

2009-11-04T14:02:00.001-05:00

There are two competing health care reform arguments: 1) Increased federal involvement; and 2.) Free market healthcare. As such, we strongly believe the free market, not the federal government can best improve: 1) Access to care; 2) Quality of care; and 3) Lower costs. However, no Congressional legislation currently proposed actually addresses any of the concerns shared by a vast majority of the American people. Indeed, if enacted, the current House bill, will achieve the exact opposite.

Now, what can be done differently? In brief, there are many alternatives to partial (or full) nationalization of the current healthcare system. A few include: 1.) Allowing interstate health insurance company competition; 2) eliminating "pre-existing" condition underwriting discrimination; 3) promoting high deductible (low premium) plans coupled with health savings accounts (HSAs).

Furthermore, the notion of so-called healthcare "overhaul," is ridiculous on its face. Successful for-profit enterprise rarely initiates widespread, costly, and potentially irreversible changes, particularly in the currently embraced Congressional "hurry up" offense. In brief, we speak neither as a Republicans nor Democrats, but as a students of economics. Therefore, we can either increease market efficiencies vis-à-vis the right reform or bloat an already costly (and inefficient) medical system which discourages individuals to make wise medical decisions in a manner they see fitthe choice is clear.

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Alexander Hamilton

2009-09-20T07:58:00.001-04:00

The dreaded Federalist, economist, and first Secretary of Treasury, oh the fights we would have had!

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Apple Anti-trust

2009-09-16T07:57:00.001-04:00

You may have noticed the Money Minute Weekly's recent blog post. We're mostly open source fans, but Apple makes good products, particularly their hand-held devices (i.e. pocket computers). That being said, we strongly believe Apple should be brought up on anti-trust grounds for not opening up their software platform or permitting Mac "clones" to compete with their proprietary PCs. The lack of competition in their product line, while adding to their bottom-line is a barrier-to-entry for competitors who could potentially improve Apple's software and hardware architectures.

However, Linux, and even Microsoft offer feasible alternatives. In the case of Microsoft, their software can be run on virtually any PC and Linux and other open source programs are even better as they serve to engender an online collaborative community to make safe, cost-effective, software that works and is increasingly becoming both user-friendly and accessible to all (e.g. Ubuntu Linux).

This leads us to our next point. Isn't it ironic the U.S. and in particular the EU are constantly fining Microsoft on anti-trust grounds for being, well, "too successful." Is there such as thing? Sometimes, but mostly not. Where there's a need, companies will fill it. Look at Google, for instance, Microsoft at one time completely dominated everything computer software-wise and Google in some senses is beginning to ruin their party, not because of increased regulation, but that of innovative entrepreneurship, better ideas, and often better products. Also, many open source programs such as Firefox and Open Office have become increasingly commonplace among techie crowds and also offer alternatives to the former "big corporate players" as well.

So what do you think? Should Apple be forced to open up its platform? There's an argument that seems to suggest that smaller companies should enjoy less scrutiny than larger players such as Microsoft and Intel, but upon close examination that is hardly the case. In truth, Apple has been around for years and has hence reaped the benefit of their "niche" products. Now, they are even bigger and more dominant. If Microsoft, why not Apple? Aren't we applying a double-standard by regulating one and not the other? But remember, the power is in the code. The future belongs to open source!

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Apple Disappoints

2009-09-10T12:23:00.005-04:00

A solid synopsis of the yesterday's Apple meeting with Steve Jobs:

Got Benjamin?

2009-09-07T08:42:00.001-04:00

Benjamin Franklin, the Money Minute Weekly's favorite!

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Creating Green Job

2009-09-06T13:50:00.002-04:00

The Money Minute Weekly's steps to creating a "green job":

Form a company
Hire workers who can follow instructions
Tell them to turn off the lights.

Presto, you've just created a "green job," government Czar not required!

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We've Come a Long Way Baby

2009-09-03T16:01:00.004-04:00

Were markets ever this slow?

http://www.moneyminuteweekly.com

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Raw Deal GM

2009-08-29T22:46:00.002-04:00

Well, as you know folks GM got screwed. In brief, good for the unions, very bad for capital stakeholders (including the ex-CEO who was fired), and bad for the country. We realize our analysis is coming late, but what needs to be said needs to be said. At this point, General Motors, really equals "government motors." Historically, government interference into the private sector has been atrocious. Unfortunately, as it is said, those who do not learn from the past are doomed to repeat it. And hence it can be stated once again, we are headed down the erroneous path of more regulation and taxation, which (as the past indicates) leads to decreased economic growth.

So it can be seen, GM really is arguably a bellwether for our economy. Bailout after bailout and still others in "high places" want more--more of everything--and more control. We simply can not sit back and watch our economic futures go up in smoke. For the average American, let it be known and known well, we are at a tipping point, from which we may never be made whole--as a country--as a people. As it was once said, "Liberty lost, is liberty never regained." Let's hope and pray we recover, let us put faith in our leaders to do the right thing, but it is also incumbent upon each us, while remaining united and hopeful, to resist as we must by peaceful and legal means to financial tyranny which has pushed our country to massive deficits and unprecedented debt. Let each one of us, do what we can, to save what's left--the precious few.

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Rich Author Poor Reader

2009-08-24T15:43:00.005-04:00

You're going to getting filthy rich if you read this book! Ever heard that one before? Don't believe it. These are usually snake oil salesmen. As the Money Minute Weekly's post title implies, typically the only people getting "rich" off these deals are the publishers and the author(s). There's also the infamous, but essentially hollow claim, "I want you to be rich." Think about it, why would a wealthy person want a stranger, they don't even know or much less ever even met to be rich? It doesn't make sense.

If you take away one thing from this article is the term "wealthy," "rich," or whatever you choose to call it is all relative. One person is "rich" because they are compared to a person of lesser economic means. Unfortunately, the biggest delusion about becoming wealthy is that it will lead to happiness and "ultimate fulfillment" in life. This claim is often false. Personally, we've met quite a few people who have made a lot of money during their lifetimes and it has either created more problems than it was intended to solve or in some cases resulted in the opposite outcome, a person actually feels less fulfilled after attaining their monetary goals.

Another important aspect to remember about wealth-creation and the elusive "quick money," or "windfall" wealth as exemplified by the lottery winner, is a lot of people simply lack the emotional and/or intellectual maturity to manage large amounts of money. As the expression is: easy come, easy go. So the next time a person you've never even met, much less ever heard of tries to hawk their bestselling book, conference, or other piece of merchandise, ask yourself one question "if it were so easy to get 'rich,' why wouldn't everyone attain their financial goals?" Secondly, everyone's financial situation is different and therefore not one size fits all, always remember that. Lastly, reading the Money Minute Weekly can instantly make you filthy rich! Don't believe us? Very good, you're catching on.

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Benevolent Capitalism

2009-08-23T17:25:00.002-04:00

All too often one hears of the, in Ayn Rand's words, the "brute" who tramples over dead corpses to make a profit, while meaning his fellow man ill. To some, this is the mental construct a "capitalist" has come to represent. However, a true capitalist is in fact benevolent. Indeed, a real businessperson means nothing but the best for others and wishes them well, neither violating their individual rights nor letting others violate theirs. Often times, one commonly hears the profit motive is inherently bad and that "more regulations" must be put in place to "even the playing field." But, to whom does economic regulation really benefit? Who stands to gain the most from such regulation? Primarily those advocating for it! Namely, statists who had rather have the "selfish" proletariat under their thumb than on his or her own two feet.

Indeed, this thesis should give us cause to pause. To whom does my life belong if not my own? To the government? To my creditors? Do I "belong" to my partner? All such relationships must be evaluated in a rational, self-interested, benevolent fashion. Remember: neither causing harm to others nor oneself. As Rand explains, one becomes neither a "looter" nor an object of human sacrifice. The rational human being, as epitomized by the businessman--a trader.

Now, you may say what of Madoff, the infamous "rogue trader", or Ken Lay who were allegedly "producers" of good and/or services? Again, they did not practice benevolent capitalism (many were hurt as a result of their crimes). And please let us not confuse this with the selfless sacrifices of countless others to throw themselves on the proverbial "funeral pyre." Again, no harm--no sacrifice of self or others to self. However, to conclude, Rand was not completely on the money, there were indeed points in which we disagree, but her main thesis remains fundamentally sound. The rest, we will leave our readers to discern for themselves. If you take away anything from this post, remember profit in itself is not bad, human behavior can be, but the willingness and ability to practice "benevolent capitalism," is indeed a virtue and not a vice. As such, the Money Minute Weekly, would like to see further work apply Rand's theoretical framework to real life in the business world. That being said, some of her views, if not moderated, can indeed become extreme--the key is moderation and temperance in all ones actions "or senses" as many associations like to say.

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Small Business Thrives

2009-08-22T20:04:00.002-04:00

Despite, tough economic times, small business continues to thrive in the United States. With relatively few regulatory hurdles one can set up a business in a tax-friendly manner in many states throughout the country. Indeed, in the last 10 years Internet establishments flourished. However, despite these modern advances the current free market climate for free enterprise seems in peril. Looming regulation such as so-called "universal health care," and cap-n-trade (more on this later) seem poised to "crash land" many sole proprietorships before they even get off the ground.

Thinks about it, there aren't that many businesses that aren't regulated and that can prove problematic. In addition to routine bureaucratic hurdles which take time, energy, and money, lawyers and accountants must provide services so as not to be in breach with the rule of law: federal, state, and local. Small business owners also face additional headaches if they deal in tangible goods: in many states they must be issued a "sales tax" license and collect such fees--by law--whether they like it or not.

To confound the situation, organizational growth usually means one thing--employees. Now, that sounds simple, but as we said earlier, additional "butt covering" exercises must be taken to ensure the necessary workers compensation, social security, income taxes (federal, state, and local) as well as Medicare taxes are garnished from payroll for the government. Some of this is fairly routine from a self-employed perspective, but again more red tape is expended in the interest of growth and ROE. In brief, with grief (and inconvenience) comes the satisfaction of creating opportunity and actually--having--fun. Fortunately, for us, we know these simple pleasures all too well. And you can too!

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End Game Switzerland

2009-08-20T16:08:00.007-04:00

It's over. The Swiss named names. (having trouble? Google "UBS to Give 4,450 Names to U.S.") Well, you've probably heard enough from the Money Minute Weekly regarding this issue and the greater implications of future high finance "fishing expeditions," and like we said earlier, the entire situation is completely avoidable. Every country, every single one, should cut taxes, therefore it just wouldn't be worth the trouble for the vast majority of clients to try to dodge them. And leave the U.S. corporations out of this! Our 35% flat tax is the laughing stock of the industrialized world. When will government ever learn? Laissez-nous faire!

Fox Business Charles Payne

2009-08-19T08:58:00.006-04:00

Charles Payne of Fox Business is a financial analyst we recommend to anyone beginning to advanced to further their ongoing and lifelong financial education. Over time, the Money Minute Weekly, finds Mr. Payne offers timely, honest, and straight-forward commentary of key business issues and stock market fundamentals. Now, our site does not explicitly offer any financial advice whatsoever, but what we're saying is check him out.

Recently, we had the opportunity (and the time) to visit his business, wstreet.com. And while, we thought the overall site's design we "too busy," and needed to be revamped some of the articles are analogous to his on air commentary, straightforward and fundamentally sincere. For these reasons, Mr. Payne earns a solid "two thumbs" up from our staff and we encourage all of our readers to listen to Fox Business on a regular basis and pay particular attention to this fine financial analyst and businessman.

UBS Settlement

2009-08-16T16:26:00.014-04:00

A preliminary deal has been reached between UBS and the U.S. While, the details of the legal arrangement have yet to be released, action has already been taken on smaller American clients. Unfortunately, the settlement leaves, Switzerland, a haven of the free market, vulnerable to further "fishing expeditions" from European Union (coward) countries. Hey, Europe, lower your damn taxes!

Madoff Justice

2009-08-12T08:05:00.010-04:00

As you know, the Bernard Madoff ponzi scheme took center stage earlier this year and thereafter a lengthy prison sentence ensued. But where were the regulators when millions of Americans where duped into risky mortgages by lending officers and their respective companies? Justice for Madoff victims, but what about the subprime folks? Where is their justice?

As we've always said, in America there are "different rules for different people." The Madoff scandal got coverage because it affected whom? Wealthy people. Whereas, the subprime victims were passed over because somehow their losses were deemed "less worthy" or otherwise less egregious than that of their more affluent counterparts. Yet, again the poor were screwed. Essentially, left out in the cold.

What's more is nobody in the mainstream media brings this point up! And it's so blatantly obvious what happened yet not a word is said about it. So, yet again we see a perfect example of the "uneven scales of justice" in this country. For some victims one treatment, and for yet another any lack of serious prosecutorial effort expended. Folks, let's face it, a crime is a crime. Securities fraud (or risky lending practices) are all crimes, whether they "technically" fit that definition is a matter for lawyers, but both were practiced by very unscrupulous people in the financial services arena and as such should be treated in a more uniform, even-handed manner. Again, instead what we get is a small sample size (Madoff victims) which is being handled by the courts at the highest levels and a much much larger catastrophe (subprime) which has largely been passed over in silence save a few cursory Congressional hearings meant to placate or place lipstick on blatant abuses within the system.

Clearly, somebody, anybody, needs to be held for account for subprime and its ongoing macroeconomic wake, but for the most part it's too late. What we must do now, is learn from the experience, promote greater financial education (and responsibility), and move on so that future (economic) crises can be adverted altogether. Unfortunately, as we have seen in the past, when the rubber hits the road, our lawmakers run for the hills rather than finally putting their foot down to corruption at the highest levels, particularly when it turns out many had their hands caught in the "cookie jar" (e.g. Countrywide sweetheart deals). This needs to stop, but unfortunately it won't. For Congress, it's incumbent upon us--to call them out--for their hypocrisy, early and often.

Health Care Anger

2009-08-09T17:27:00.014-04:00

Folks, people are mad, they're really mad. And it's not just about money, it's about human life.

This isn't a game, it's for real. While those who believe in laissez-faire and freedom may not have the votes right now, we must oppose Obamacare at all costs. This is not about politics (which is sad people are making the issue partisan as a distraction for the less educated). We really have to begin at the root problem, government's intrusion into every facet of our lives.

Not only are there inherit (economic) inefficiencies in pervasive interventionism by the federal government, there is a human cost as well. Fundamental to these transactions, economic (and otherwise) it is incumbent upon each of us to ask "will this new (whatever)" make myself and my family more free? If not, it's probably a good idea to oppose whatever the particular (politician, economist, think tank etc.) is arguing for. Don't you think it's a good idea to have control over one's own life? We do. And we must. It would be a betrayal to our soul to think (or state) otherwise.

Now, that's not to say, a lot of people are not "well intentioned," but let's not forget the lessons of history many are not. In fact, many mean us grave ill. So, the next time a policy wonk, economist, or lawmaker asks you to believe in an idea (or by extension) a law or policy. Again, the key question to ask is "will this support my life, liberty, and the pursuit of happiness?" If the answer is "no," best to part company, or if necessary, run like Hell!

UBS DOJ Stalemate

2009-08-08T18:59:00.013-04:00

Update: Settlement talks continue (U.S. perspective) in UBS-IRS case and more particulars in Swiss reporting.

President of Switzerland

Free Market Healthcare

2009-08-04T20:40:00.001-04:00

Folks, no doubt you've heard a plethora of opinions regarding the U.S. health care system. It's our view the current legislation should be voted down not only out of a complete lack of financial footing, but a basic understanding of what constitutes human life. The issue of the "public option," is as much a moral issue as it is an economic one. In brief, the (health care) issue is extremely complex, but the two basic cornerstones of a sound medical system are: 1) cost and 2) access to care.

Without using advanced statistical modeling the facts are so-called "universal" health care has not worked in any country it has been tried. Getting back to the inefficiencies a government-run system allegedly attempts to solve (cost and access to care)--it accomplishes neither. Already we see the failures (and egregious fraud) brought my medicaid and medicare. No doubt one hears of the warehoused wheelchair which a hustler bills the federal government for thousands of times, only never to be used by an actual "real and living" patient. Such woes go on and on. But alas, such is a microcosm of the ills a federally-run "universal" system would bring. And why if a federal program is allegedly so sound, wouldn't it be tried out on a smaller scale before jumping head first into the situation?

Unfortunately, it already has, in Massachusetts for instance, universal care caused (and continues) to wreak havoc on statewide and local municipality budgets alike. While in other states, similar (but often less expensive) versions of government-mandated care were repealed due to similar fiscal failures and systemic inefficiencies.

So what's the alternative? Another difficult question to answer. However, we must first look to the root cause of the health care crisis--the United States is an obese nation (a topic for another article). However, once the root cause of what is indeed making the U.S. sick (in many cases) is addressed, we can then look to the current inefficiencies in the system. That being said, lawmakers could actually work constructively to solve health care problems instead of enacting new ones:

Encourage free market care by "unmasking" the true cost of medicine through inexpensive high deductible plans, which would be supplemented by tax-free health savings accounts (HSAs). Such a move would save money by encouraging health consumers to negotiate for better rates directly with their physicians while at the same time allowing them to contribute in a tax-friendly manner in order to plan long-term for inflation and the inevitable rise of care.
Enact laws which provide for "portable accounts," so one does not lose existing coverage when changing jobs or starting a business.
Offer tax incentives for small business (in particular) to provide quality, low-cost (i.e. high deductible, HSA eligible) plans to employees.
Empower consumers to think like businesspeople in defining and (in some cases) demanding quality care from the physician of their choice.

In sum, the above-mentioned items are just some of the necessary reform Congress could enact to transform the current health care system in a positive, inclusive, and empowering way for the American people regardless of their health status. Lastly, contact your Congressmen and urge them to not pass the current "Obamacare," single-payer (e.g. public option) plan. Also, please contact your Senators likewise! Not only would such a plan decrease access to care and serve to exponentially increase cost--in the end--prove unmanageable at best--a threat to human life at worst. The power is in our hands. It's time we fully took it back.

Commerce in Zurich

2009-08-01T07:44:00.004-04:00

An outstanding glimpse of financial life in Zurich, Switzerland:

Switzerland Capitulates

2009-07-31T20:39:00.007-04:00

A preliminary press release by the Wall Street Journal (Having trouble? Google the article title) suggests that a settlement has been reached between the Swiss and U.S. governments over bank secrecy laws, Switzerland seeming to get the least favorable part of the deal--a classic case of the sword being stronger than the mind.

Spectacular Footage

2009-07-29T17:11:00.009-04:00

From our friends in Switzerland, enjoy!

UBS Case: A primer towards the future

2009-07-27T19:47:00.025-04:00

Here's the latest in the U.S. cross-border case regarding UBS. Having preformed the requisite research, it's our opinion as in our previous article "Bullying Switzerland," the case for bank secrecy laws is in grave peril. Pending the forthcoming case, clearly the fix is in--the United States wants its money. With this inevitable decision comes good and bad. On one hand, good will come from bringing white collar criminals to justice. However, on the other hand, it may be the first step in ruining the economy of the sovereign nation of Switzerland. And this is where we must depart from conventional American orthodoxy and hegemony. Why for instance, must our economic policy under Obama be like our foreign policy under Bush "either with us or against us?"

That being said, the Money Minute Weekly hopes a settlement can be reached between both respective parties (the U.S. and Switzerland). Regardless of what happens, we somehow find it somewhat hypocritical that although individual (bank) accounts holders will be exposed and prosecuted, a gaping hole remains for U.S. corporations wishing to offshore their "booty" and do likewise. But alas, the current administration is after that money as well. And you may ask, what will the federal government do with the confiscated funds? Business as usual, waste it all and run high deficits while at the same time claiming bragging rights for "busting evil rich people," many of whose (certainly not all) principle produced goods and services we have all come to enjoy.

In sum, there's no right answer in this case. The true evil is the lack of (free market) capitalism which produced this unfortunate situation in the first place. The freedoms (including numerous economic ones) are slowly evaporating in our country. Something must be done, but as Dr. Ron Paul says all empires eventually come to an end. Unfortunately, for us, the decadence (and immorality) of our leaders may lead to an even quicker demise than any of us realized until now.

Defending Switzerland

2009-07-23T08:26:00.013-04:00

The following is a recent Swiss policy position paper defending its national interests. A judgment is expected Monday regarding the UBS case in terms of its ability to disclose American Swiss bank account holders to the IRS and/or other U.S.-based regulatory authorities for possible back taxes and/or penalties. Supposedly, there is a grace period for self-disclosure of these "secret" overseas accounts, but that left many account holders seeking legal and tax-related advice pending the outcome of this coming Monday's hearing. Unfortunately too, many seemingly innocent American citizens were caught in the crossfire of prior disclosure agreements on allegedly some of the outstanding U.S. Swiss-based accounts.

While, other analysts see the forthcoming (Monday) judgment differently, essentially these folks are tax cheats who deserve what they get--equality before the law. What do you think? While both arguments have their merits, the Money Minute Weekly thinks the reason why Swiss accounts have historically been so lucrative for U.S. and foreign nationals is not because they are from Switzerland (although that helps), it's mainly because our taxes are too high. If all this nickle-and-dime tax evasion is so bad, where is the outrage when the federal government wastes taxpayer money? Well, the assumption is the government is acting in the public interest, however this assumption is often wrong. The government is indeed fraught with waste (ask any federal contractor) and in many cases mismanages public funds entirely.

Swiss accounts exist, and will persist to do so. Yes, be it for the most part for white collar criminals (in the eyes of the U.S. government, but not Switzerland), because we are simply not capitalistic enough. More broadly, the facts bear this out. Despite commonly head beliefs, this recession was not brought upon us by the private sector, but the wrongheaded policies of the financial services committee and unfortunately under its current tenure these matters will only persist. So in some people's eyes, a Swiss account is a hedge. It is a matter of self-defense against federal looting--a matter out of the hands of producers. But if one reads the current issue of Smart Money, there are many perfectly legal ways to make tax-advantaged money in the United States.

In sum, don't hate the Swiss. Dislike the anti-capitalistic mentality, it's the root cause of the problem. Fix it, and there will be no need for the infamous "tax dodging" behavior. True, there will probably always be the Swiss account, but it's time we right our economic ship before it's too late. At present, we're about to fall off a cliff.