I flew home to San Diego from visiting family in Baltimore last week. The view out my window over Houston, my connecting city, was crystal clear. The picture reminded me of my first plane ride late in my teenage years. How, I wondered at the time, did everything work together to create what, from the air, looked so harmonious? I had not the faintest idea. The question led me to study economics, first at Penn State and then at MIT, where I earned a doctorate after mastering, among other concepts, Adam Smith’s “invisible hand.” It explains the order I sought to understand. As I observed Houston from the air, my age now decades older, the importance of interstate roads was obvious. Without them, I’d see the minor roads jam-packed. The private airport we flew over could never handle the traffic at Houston’s IAH,…
Debunking three myths about immigration to the US
Immigration is a top issue in voters’ minds. I want to share some facts about immigration so that we can all be more informed voters. As business leaders, work force trends matter, and immigration helps drive these trends. Deficits also concern us. Did you know that the US Congressional Budget Act predicts the 2021-2026 immigrant population is expected to pay close to a trillion dollars more in taxes than consumed in government benefits? Myth: The immigration system is out of control. Truth: Parts, but not all of it, are broken. There are three ways non-residents enter and legally remain as permanent residents of the US. One is the Visa System, which offers lawful permanent residence. Who gets these? There are three subgroups here: First are immediate relatives of US citizens. There is no limit on the number of spouses, minor unmarried children, and…
Business thrives under democracy and capitalism
Strategists trying to understand and influence the future of an organization will study the “containing system” surrounding it. That is, factors that affect the environment in which the organization operates. Social forces, regulatory changes, competitor actions, and global economic trends are examples. But rarely do strategists consider the notion of whether our nation remains a democracy or operates under capitalism as a component of that containing system. It may be time that we do so. Chairman of the Joint Chiefs of Staff General Mark Milley‘s comments at his farewell ceremony moved me deeply. Appointed by Trump, he is voluntarily retiring. You might remember that when Trump refused to concede the election, Milley reached out to his counterparts in China. He said the US would not attack China during Trump’s increasingly erratic last days in office. For this act, Trump has accused Milley of…
Healthcare Costs Part One: Who Benefits from our Broken System?
To solve a problem, some say, look to who makes money from its existence. So, who benefits from the high cost of healthcare in the U.S.? At a minimum, looking at the beneficiaries will help us identify those who will impose barriers to changing the status quo. (In the next blog, I’ll look at root causes of the cost problem and worthy solutions.) High Cost U.S. healthcare costs exceed those of other developed countries according to several key metrics: as a percent of our GDP, cost per family, and cost of procedures and hospital stays, among others. Self-insured employers reported to MedCity News that the average per-person cost of healthcare would be $17,201 in 2023, a $1,339 increase (or 7.8%) from 2022. By way of comparison, median annual income was $69,021 in 2021. No wonder a significant lifetime achievement is securing a job…
Why are US voters so pessimistic about the American economy?
Economists (of which I am one) are cheering about recent economic measures for our nation. Inflation rates are falling without the high levels of unemployment expected to produce disinflation. Real wages have risen. Hard-to-employ groups are finding jobs as employers drop prior credential requirements. Indeed, the soft landing the US Federal Reserve Bank is shooting for may be achievable (underscore “may,” as so much uncertainty remains). So why does most of the nation (7 in 10 according to a March 2023 CNN poll) believe the economy is still bad? One hypothesis is that people are upset because, although the inflation rate is falling, prices remain significantly higher. They feel they need to spend a larger percentage of their income on meeting their needs. Yes, prices are up. And, higher prices make them worse off. But incomes are also rising. If incomes increase more…