The Big Business Conundrum
I was on a Facebook page today and there was a discussion thread that was started commenting on an article in the LA Times that talks about rescission. Rescission is where an insurance company will cancel an individual's policy, usually for the lamest of reasons, if the person is really sick and is racking up serious medical bills.
As you can imagine, the theme of the thread was "screw the blood-sucking insurance companies and let the government take over health care. They will do such a good job and be much more compassionate than the insurance companies." I made a comment as follows:
The dirty little secret is that the insurance industry already IS a quasi-government business, like the auto industry was before it made the leap from quasi to fully controlled. As almost the only conservative that responds to Andrew, I cannot defend the insurance industry. ALL forms of insurance (auto, home, health, life, travel) exist to maximize profit and minimize loss. BUT, BUT, BUT do you REALLY, REALLY (be honest here) think that the govt can do something as HUGE as run our health care system? We are lucky that the DoD runs as well as it does with our reps sticking their fingers into every moving part of that system. When there is a system like health care that touches EVERY SINGLE citizen will they leave it alone? Seriously, name one country that has a health system that works well (pls back up with evidence.)
I think that we all have an idea how the health care system should work, and I recently took the time to write a five page letter to my two senators and one congressman. I faxed it to them so it would get through to them (letters never get past the anthrax screeners and email just piles up.) Keep in mind that all three are Democrats, so I don't really expect to get much respect for my opinion... but like Obama says "We will listen to all opinions" (and then go off and do what we want to do anyway.)
This all got me thinking about big business and how things work. I own a small business with only eight people and my idea of having a good year is being able to pay my employees, pay my bills, pay my suppliers, pay the city taxes, pay the state taxes, pay my federal taxes and still be able to cash ALL of my paychecks. Notice, that I didn't say anything about making a big profit, carrying cash forward or anything else. Everything costs money... In fact, very few small businesses want to make a big profit because it gets severely taxed. If the company is a S Corp, LLC, partnership or something other than a classic C Corp., the money to pay the taxes must come out of the owner's own pocket, not the company.
But, say you have a big business. It doesn't matter what you produce: airplanes, health insurance, railroads, ships, private armies or backyard grills. They all have some serious baggage to carry around. First, you have big office buildings and probably huge factories. This stuff ain't cheap. If your company is in a big city like New York or Chicago, the real estate costs alone are mind boggling. Your corporate management (as we all know) need to make at least 150 times the salary of your average employee. Who expects to walk into a boardroom of a Fortune 500 (or Fortune 5000 for that matter) company and see a table from Ikea and a $700 projector dropped from the ceiling with 8 chairs gotten on sale at OfficeMax? That would be pretty embarrassing wouldn't it? (oops, I just described my own conference room... I don't have a boardroom.)
As much as we now make fun of the 50' marble table and the expensive artwork, what would your opinion of Merrill Lynch be if their office looked like mine? Do you expect that their annual sales meeting would be held at a Holiday Inn Express in Skokie? What kind of reward would it be for brokers that made millions upon millions of dollars for the company for Merrill to skimp on a 3 day trip to a Palm Springs resort?
Besides the company stuff, what about 'giving back to the community'? If you don't have big companies, who is going to subsidize the local symphony and opera companies? (Ever notice how symphonies and operas ALWAYS need subsidies? Even Michelangelo lived on patronage.) Who will support NPR? Pay for politician's campaigns? Spend gobs of money naming the local sports complex? Buy the t-shirts for the 10K Run for the Cure? Allow employees to take time off to work with charities? Pay for insurance for employees? Fend off massive lawsuits for God knows what (they do have deep pockets after all...) etc. etc. etc.
When the big banks and brokerage firms started failing in New York, more people than the employees and their families felt the strain. Fancy restaurants, waiters, taxi drivers, event planners, hotels, chauffeurs, escort services, real estate agents, Bergdorf-Goodman, Barneys, and on and on felt the pinch.
In addition to big companies throwing off all of this money on expenses, the pesky stockholders still expect to be rewarded handsomely and if it looked like they might not be, the company value could plummet. Life can be brutal in the bigs.
My point is that all businesses need to make money and big businesses need to make big money. They don't survive for long by losing money. How can the insurance companies survive without being evil? I don't know if that is possible, but I do know that there are more than a few people that are willing to cheat the insurance companies out of a lot of money (and there is a whole industry of lawyers willing to help them do it) but when the the tables are turned, it is a different story, indeed.
And finally, don't forget this fact... government is the biggest business of all and it the only one that has the power to seize property, put you in prison if you don't play by their rules, chase you down if you don't submit willingly and has the legal right to take your life in certain instances.
I am ready for the youth of this nation to start looking askance at government like the kids did when I was growing up. I think it is intellectual laziness to assume that a different group of government people are good if the group they replaced was bad. It is not a yin-yang situation.
Having a whole generation WANTING government to take over scares the hell out of me.
As you can imagine, the theme of the thread was "screw the blood-sucking insurance companies and let the government take over health care. They will do such a good job and be much more compassionate than the insurance companies." I made a comment as follows:
The dirty little secret is that the insurance industry already IS a quasi-government business, like the auto industry was before it made the leap from quasi to fully controlled. As almost the only conservative that responds to Andrew, I cannot defend the insurance industry. ALL forms of insurance (auto, home, health, life, travel) exist to maximize profit and minimize loss. BUT, BUT, BUT do you REALLY, REALLY (be honest here) think that the govt can do something as HUGE as run our health care system? We are lucky that the DoD runs as well as it does with our reps sticking their fingers into every moving part of that system. When there is a system like health care that touches EVERY SINGLE citizen will they leave it alone? Seriously, name one country that has a health system that works well (pls back up with evidence.)
I think that we all have an idea how the health care system should work, and I recently took the time to write a five page letter to my two senators and one congressman. I faxed it to them so it would get through to them (letters never get past the anthrax screeners and email just piles up.) Keep in mind that all three are Democrats, so I don't really expect to get much respect for my opinion... but like Obama says "We will listen to all opinions" (and then go off and do what we want to do anyway.)
This all got me thinking about big business and how things work. I own a small business with only eight people and my idea of having a good year is being able to pay my employees, pay my bills, pay my suppliers, pay the city taxes, pay the state taxes, pay my federal taxes and still be able to cash ALL of my paychecks. Notice, that I didn't say anything about making a big profit, carrying cash forward or anything else. Everything costs money... In fact, very few small businesses want to make a big profit because it gets severely taxed. If the company is a S Corp, LLC, partnership or something other than a classic C Corp., the money to pay the taxes must come out of the owner's own pocket, not the company.
But, say you have a big business. It doesn't matter what you produce: airplanes, health insurance, railroads, ships, private armies or backyard grills. They all have some serious baggage to carry around. First, you have big office buildings and probably huge factories. This stuff ain't cheap. If your company is in a big city like New York or Chicago, the real estate costs alone are mind boggling. Your corporate management (as we all know) need to make at least 150 times the salary of your average employee. Who expects to walk into a boardroom of a Fortune 500 (or Fortune 5000 for that matter) company and see a table from Ikea and a $700 projector dropped from the ceiling with 8 chairs gotten on sale at OfficeMax? That would be pretty embarrassing wouldn't it? (oops, I just described my own conference room... I don't have a boardroom.)
As much as we now make fun of the 50' marble table and the expensive artwork, what would your opinion of Merrill Lynch be if their office looked like mine? Do you expect that their annual sales meeting would be held at a Holiday Inn Express in Skokie? What kind of reward would it be for brokers that made millions upon millions of dollars for the company for Merrill to skimp on a 3 day trip to a Palm Springs resort?
Besides the company stuff, what about 'giving back to the community'? If you don't have big companies, who is going to subsidize the local symphony and opera companies? (Ever notice how symphonies and operas ALWAYS need subsidies? Even Michelangelo lived on patronage.) Who will support NPR? Pay for politician's campaigns? Spend gobs of money naming the local sports complex? Buy the t-shirts for the 10K Run for the Cure? Allow employees to take time off to work with charities? Pay for insurance for employees? Fend off massive lawsuits for God knows what (they do have deep pockets after all...) etc. etc. etc.
When the big banks and brokerage firms started failing in New York, more people than the employees and their families felt the strain. Fancy restaurants, waiters, taxi drivers, event planners, hotels, chauffeurs, escort services, real estate agents, Bergdorf-Goodman, Barneys, and on and on felt the pinch.
In addition to big companies throwing off all of this money on expenses, the pesky stockholders still expect to be rewarded handsomely and if it looked like they might not be, the company value could plummet. Life can be brutal in the bigs.
My point is that all businesses need to make money and big businesses need to make big money. They don't survive for long by losing money. How can the insurance companies survive without being evil? I don't know if that is possible, but I do know that there are more than a few people that are willing to cheat the insurance companies out of a lot of money (and there is a whole industry of lawyers willing to help them do it) but when the the tables are turned, it is a different story, indeed.
And finally, don't forget this fact... government is the biggest business of all and it the only one that has the power to seize property, put you in prison if you don't play by their rules, chase you down if you don't submit willingly and has the legal right to take your life in certain instances.
I am ready for the youth of this nation to start looking askance at government like the kids did when I was growing up. I think it is intellectual laziness to assume that a different group of government people are good if the group they replaced was bad. It is not a yin-yang situation.
Having a whole generation WANTING government to take over scares the hell out of me.
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