Monthly Archives: November 2015

Can Free Markets Repair a Broken Healthcare System?

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As a health services administration graduate student at the University of San Francisco in 2006, I felt like a lone voice among my colleagues in championing a free market healthcare system. Despite the release that same year of  Redefining Health Care: Creating Value-Based Competition On Results - a book by noted Harvard professor Michael Porter – the overall tenor and conversation around a competitive healthcare marketplace resembled the noise of crickets in the countryside.

Four years later, the Affordable Care Act, a.k.a. Obamacare, was signed into law by President Barack Obama. Unsurprisingly since that landmark legislation, the U.S. healthcare system has continued to spiral out of control. And as of this writing, amid recent news of crumbling state healthcare exchanges and word of the largest insurer’s anticipated exit from the program, Obamacare is arguably on life support. This has led to calls on the part of a small but vocal lobby to discard this failing model and pursue instead a fresh set of free market healthcare strategies.

A friend of mine who was frustrated by the lack of affordable options, turned me on to TruPrice, a startup firm seeking to develop a real alternative to the current healthcare crisis. Founder and President Mark Gantner believes that the current ACA model is unsustainable and that without alternatives, it will result in louder calls for a single payer system. In his view, this represents a significant constitutional threat; one that has the potential to erode the basis of personal freedoms upon which this country was founded.

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Small Business Saturday – Good Intentions, Bad Economics

small-business-saturday-2015First there was Black Friday, then Cyber Monday, and now there is Small Business Saturday, a day intended to promote shopping at small local businesses for the holiday season as a way to support their livelihood, enhance the local community and even help the environment. While certainly well-intentioned, the movement is misguided and can actually end up hurting more than it helps.

Ironically, the term Small Business Saturday was conceived and promoted by the financial services giant American Express, which also holds a trademark on the term. Nevertheless, the idea – to encourage consumers to shop at small local brick-and-mortar retail shops – has been around for awhile.

The claimed benefits are numerous, but they mostly center around the supposed idea of ‘keeping the money in the local community,’ which in turn supports those businesses, creates local jobs and even has a multiplier effect as the money spent locally circulates around the community more than money that is sent off to say, Amazon.com.

Like many economic fallacies, there is always a grain of truth that makes it potent and appealing to the logic of its believers. It is somewhat true that if you buy a television set online, that money is sent to the online retailer, who is probably not based in your local community. Whereas if you buy the same set from Bob’s Great TVs down the street, Bob has the money in hand which he may very well spend at the local car repair shop that you own. A much better situation, right?

Don’t Push the Big Red Button!

pizza buttonIt’s here, and it’s just in time for the holidays! Domino’s has unleashed a quick order button housed in a micro-sized pizza box. Amazon already unveiled their Dash Button, which allows customers to order frequently purchased items through Amazon Prime at the touch of a button. It was only a matter of time before the pizza gods would bless us with the same kind of convenience and fun; no one can resist pushing a big button.

The first batch of buttons is slated for release in the U.K. this December, with a second batch scheduled for February. Domino’s has said that they will let the public know when plans are finalized for releasing the button in other places.

A Tough Year For Gold, But Positives Ahead

FuturesIt has been a disappointing year for gold investors in 2015 so far with gold gradually declining since the beginning of the year. Investors may be getting sick of the yellow stuff after the 2014 performance of gold going nowhere, and then the drop in 2013. However, it is during such times that it is important to review the reasons for owning gold and keep its performance in perspective. In this article, we will review the performance of gold, look ahead at the financial landscape, and review whether holding gold still makes sense.

Gold Continues to Outshine, Despite Short-Term Performance

Gold is currently down around 10% year-to-date, bringing its one-year performance down to about the same at -11%. The current price of $1,070 hasn’t been seen since November of 2009. The five-year performance of gold is now down around 21%. This comes after 2014, where gold was essentially flat for the year, and 2013 where gold was down around 28% after correcting from its big run-up to $1,900 an ounce.

Periods of poor performance are certainly painful, and years of poor performance can seem excruciating in the short-term. However, gold as an asset must always be viewed in longer time frames and should always be compared to the other options. From 2001 through 2012, gold had positive gains, with eight of those years showing double-digit gains.

The ten-year performance of gold is up 116% and the fifteen-year performance is a positive 303%, compared to the S&P 500 which is up only 65% and 55% respectively! Gold is clearly holding its own, considering it should be an underperformer because it doesn’t represent a business or return a cash flow.

Smart Glass at Last

iStock_000017536838Medium We’ve all seen them. The semi-reflective, black grid panels set on a hillside or a rooftop. Solar panels, though an eyesore, are a renewable energy dream. It’s no secret that solar energy aims to be the primary source of power in the foreseeable future. Solar tech has become especially useful in rural areas where laying power lines is not an option. But what about urban city life? These bulky and aesthetically unappealing panels are not ideal for a city packed with skyscrapers and office buildings.

The answer – according to a relatively new and exciting company Ubiquitous Energy Inc. – is quite simple. They propose eliminating the external solar panel altogether, and instead building skyscrapers with their state-of-the-art ‘smart glass.’ In short, smart glass is coated with the trademarked Clearview Power film which absorbs UV and infrared light rays, converting them into renewable energy. By using glass coated with Clearview Power, architects are achieving a structurally sound building, as well as one that is entirely energy efficient. Ubiquitous Energy (UE) has a similar glass film in the works for mobile devices which would theoretically provide battery life ad infinitum.

A More Fair Approach to Fair Use

2000px-US-CopyrightOffice-Seal.svgIntellectual property law in the U.S. has not aged so gracefully with the development of internet content publishing. Obviously, this development could not have been foreseen until the very recent past, so it comes as no surprise. As usual though, the law is slow to adapt to the fast-paced changes that society at large is facing today.

Fair use is an aspect of IP law that has particularly caused issues in our modern ‘cut-and-paste culture. The confusion is detrimental to most of the important parts of U.S. copyright law, which is not always clearly defined anyway, and is often misunderstood. Fair use compliance is by nature something that can’t be quantitatively measured, which has turned out to be both an asset and a liability for those seeking protection under its wing. I believe the lawmakers behind IP laws recognized that a simplistic rubric for defining fair use could not ably address the nuances and complexities inherent in the issue, and that it must be dealt with on a case-by-case basis. This gives those appealing for fair use designation the opportunity to defend themselves and their work. The downside is that it gives full discretion to the court.

In this internet age, there is so much content being produced and distributed that it’s not at all feasible to deal with intellectual property disputes on a case-by-case basis anymore. Copyright infringement is handled by computers running algorithms which alleviate people from having to do the grunt work, but are incapable of handling the nuanced and flexible nature of fair use laws. Copyright has always been ‘opt out’ by default, but until now the drawbacks of such a system have not been completely evident.

So in response to the problem, Youtube is announcing that they will provide legal services for select videos which fall victim to indiscriminate removal over copyright charges. Youtube has become a platform that is especially plagued by these issues. Hundreds of videos are uploaded to Youtube every minute by everyday internet users, many of whom will make use of copyrighted materials such as music, pictures or movie scenes. I’m sure most of us have clicked on a Youtube link only to receive a ‘content unavailable’ message, at least several times in our lives.

The number of small insignificant cases vastly outnumbers the large critical cases since now anyone (including many who have limited knowledge of copyright law and fair use) can upload content through platforms like Youtube. It’s safe to assume that most of the videos removed are not important enough to warrant legal action by the parties whose IP is potentially being infringed upon. Those same videos, therefore, are probably also the products of people who don’t have the means to take countermeasures. Making a case for fair use can be complicated and costly. The ‘opt out’ nature of copyright as it stands means that the cases not worth looking into will always be ruled in favor of the copyright holder unless an appeal to fair use is made, which discourages the legitimate use of copyrighted material for creative or educational purposes. This is antithetical to the original intent of copyright law, which was to encourage the production of new intellectual property.

This policy of ‘guilty until proven innocent’ is also damaging to sites like Youtube, for whom it is in the best interest to encourage content creation and to make users feel free to upload videos.

In the best case scenario, Youtube would be able to provide legal service for all users, but this is clearly not possible, considering the scale of such an undertaking. An undisclosed Youtube publisher, quoted in the ZDNet article linked above, noted that it’s a step in the right direction, but implementing an ‘innocent until proven guilty’ mandate would go much further towards finding a solution, since it is not possible for Youtube to offer protection for all users.

Youtube’s move to defend fair use content illustrates that they are aware of the value it contributes to the platform they operate. Thankfully, they are willing to do what they can to even the score. The real solution will not be to simply bandage the hole. Musicians and artists have begun to call for a more fundamental change in the archaic copyright law being applied to internet age IP disputes. For the time being, we may have to settle with band-aids.