Banking Ad Aimed at Engineers

Several weeks ago I blogged about an article in Professional Engineering Magazine on how engineers are good at building wealth. An ad for a bank in the Jan 2010 issue of IEEE Spectrum Magazine (aimed at electrical engineers) made me think of this.

The ad designer did a good job. There’s an engineer in the foreground looking at a farm of windmills holding the plans in his hand. It reminds me of that slight feeling of disorientation I get when I first see something that I have been looking at on paper or the screen for months in its fully realized state. He’s holding the plans, and the text suggests he has "great plans for the future" for managing the money he’s earning. The information is organized into bullet points, similar to how they teach us to write in technical writing class. All the points are focused on saving money safely. There is nothing promoting debt.

I have no experience interacting with this company. I’m only commenting on the style of the ad.

This is such a contrast to some ads from local banks and credit unions, which focus on debt. My favorite one has a family in front of a really nice house. The text reads: Dream Home – Dream Mortgage. That’s one way to put it!

Gateworks: Excellent Embedded Wireless Platforms with Great Service

A few years ago I helped my main client design in a Gateworks CPU board into the next revision of one of their best-selling products. Gateworks sells CPU boards with Intel XScale processors. They have mini-PCI slots intended to be used with mPCI radio cards. (Despite mPCI being an old technology, there are many flavors of radio cards available in mPCI form factor.)

Gateworks is one of the best vendors I’ve worked with:

• Flexible population options – Gateworks will purchase and populate any part you want on their boards, if you order at least 100 pieces. They have cool custom software they designed to highlight customization options to the people running the board assembly machines.
• Willingness to re-spin their boards for customer requests – Gateworks will change their boards’ design to accommodate customers ordering several thousand pieces.
• Problem solving – Gateworks goes out of its way to solve problems with products using their boards, even if it’s not clear their board is at fault.
• Reasonable prices – Gateworks has its own pick-and-place machine to stuff boards, so they’re not paying overhead to CMs.
• Privately Held – Gateworks is owned (as far as I know) by a couple friendly guys in San Luis Obispo, a town which vaguely reminds me of a smaller Madison. They do not face pressures from investors to focus on things that look good in the short run at the expense of not supporting their products well.

Here is the Gateworks holiday card this year:
My only relationship with them is that my main client buys from them, which makes my life easier. I've never done work for them or received any payment from them in any form.

Healthcare "System" Personal Experience from Madison, WI

For the past week my 16-month-old baby has had a bad cough. This afternoon I took him to his pediatrician, Dr. Rainwater, who works at Associated Physicians of Madison.

I only had to wait a few minutes to see the doctor. At that time I went straight to the doctor, not one of her staff. Dr. Rainwater ruled out any serious problems. She took time with me to explain her recommendations and the scientific reasoning behind them.

She called in a prescription to the Wallgreens on Whitney Way.

Estimated bill from Dr. Rainwater’s office = $120. If I have any questions, I can call any time of the day or night and talk to one of the M.D.’s who we personally know free of charge. I highly recommend Associated Physicians.

When we got to Wallgreens, the pharmacist went out in to the store to see if we could get the medicine less expensively in their over-the-counter section. It turns out the prescription was $12, but the same medicine was $11 over-the-counter. I highly recommend Wallgreens' pharmacy.

As I shut it down for the night, I think about claims that “the healthcare system” is in need of overhaul from Washington, DC. I want to help the needy, but I don't see why we have to overhaul everything to do that. For people who are not needy, it's hard to see how a healthplan, esp a gov't-run plan, involved would be of any benefit. If we have pricing issues, we sit down and talk to someone at our doctor’s office, just we would with any other service provider.

I do not agree with radical claims that healthcare overhaul will have dire consequences. I do think, though, that it will add a little bit of red tape to what should be a straight forward transaction between my family and our doctors.

Healthcare Debate Bring Out Nonsense Even from Sensible People

Every day I get messages from MoveOn regarding healthcare that I cannot understand. Yesterday’s MoveOn message was by Robert Reich, someone who I thought was a sensible, intelligent person who generally made sense. When it comes to healthcare, a lot of nonsense is flying around.

You've probably heard about a possible "deal" in the Senate to do away with the public option.

I'm here to tell you that this is no deal: it's a gift to Big Insurance, plain and simple.

The details are sketchy. The only thing that's really clear is the deal would drop the public option from the bill. With no public option, there's no guarantee of real competition. And without real competition, health care costs will continue to be out of control.
[snip]
Without competition from a public option, insurance companies have no incentive to compete—just like now.

So if the government does not have subsidized agency competing with your business, you are receiving a “gift”. Furthermore, if the government is not competing with you, your industry has no competition.

How can this be? I shopped my health insurance twice over the past few years when my premiums increased. There were a lot of options, but ended up staying with BlueCross despite the premium hike. My rough estimate of the risk of someone in my family making a huge claim is that it’s consistent with premiums we’re paying. I would love to believe someone can do it for way less, but I think they would have done it by now if they could. You can monkey around with how the risk is spread, but one way or the other a percentage of the population is going to need expensive treatments costing well beyond a typical $5,000 deductible. Someone has to pay for that. The problem is not that some politically connected companies have a monopoly on insurance products.

All of this makes me wonder why they’re not going after other insurance products. For example, it “feels” like disability insurance is expensive considering my estimation of my chance of becoming disabled for longer than the exclusion period. I also can’t understand why the life insurance on my wife, who appears to be as healthy as I am or healthier, costs significantly more than mine. I can’t understand why my auto insurance was twice as expensive when I lived in Florida than it was when I moved back to Madison.

None of that calls for government intervention. People should keep track of their costs, shop them if they seem out of line, and focus on producing value in their own field. If they really think some industry is on the gravy train, why not compete with that industry instead of bringing the government into the business?

Consider how bizarre the claims are. Suppose the health insurance industry really were on the gravy train. That means large businesses or churches could create their own plan open to their members. They could do a quick underwriting assessment of their members and work out a premium for their own health insurance. They could adjust the premiums each year based on last year’s claims. In other words, they could become an improvised insurance company. All of this is nonsense because the original claim isn’t true. Premiums of real insurance companies are generally fair. An inexperienced organization would not be able to provide what insurance companies provide for the same price.

All of the nonsense takes away from the real problems: a) people who can’t buy insurance because they got a chronic condition and had to change insurance for a job change or other reason beyond their control and b) people who can’t afford to pay for their basic needs. These are real problems, but politicians keep talking as if we could solve this problem and save everyone money just by re-jiggering how we spread the risk and by getting the government in the insurance business.

If it weren’t so serious, it would be laughable. I would love to get inside the heads of people advocating for a gov’t-run insurance agency. Do they just think the government does things better in general? Or do they think claiming they’re working on a way to get people’s premiums down is the only way to sell a healthcare subsidy for the poor to the broad public?

The Silver Bullet

Between circuit designs, I keep seeing stories about the government trying to do things to improve unemployment, healthcare, and real estate.

All of these issues are primarily issues for people who had no money to begin with. One thing the government could do to improve all of these things is to encourage people to save money. I propose that the government make savings accounts operate similarly to other tax-advantaged accounts such as IRA, Roth IRA, or HSA. The simplest approach would be to exempt savings accounts up to some limit from all taxes. It wouldn’t reduce people’s taxes that much, but it would be something the government could do to promote saving.

Most stories of problems people are having with unemployment, heathcare, or real estate would be mostly solved if the people or families in question had a savings account with $25,000 in it set aside to deal with trouble when it comes up.

This suggestion would do nothing to help the poor. People living at or near the federal poverty line will not be able to set aside $25,000. Poverty is a separate problem not addressed by this program.

It seems to me having a little money is a silver bullet that solves a lot of middle-class problems that the government is trying to address separately. If the entire population except for the poor save $10,000 to $50,000, depending on their estimation of the risks in their lives, the next recession, banking crisis, 10% unemployment will not be a big deal at all. People will be free to focus on their lives, part of which include activities that are productive for the economy.

The potential benefits are huge. We must move toward this and away from programs that try to fix each aspect of economic fluctuations separately.

How Healthcare Is Currently Rationed and Socialized

My electrical engineering colleague Chris Gammell shared an article on healthcare reform that is one of the best arguments I’ve seen for a healthcare overhaul.

The unemployed laborer severely injured in a car crash or the farmer who collapses will be given the best care possible. No expense will be spared, all needed consultants will be called, all necessary surgery and definitive care completed.

The patient who presents for planned, scheduled health care gets a different reception. Those needing elective heart surgery, or joint repair, for example, are filtered carefully. Care is rationed by ability to pay.

Insurance coverage, pre-approval, deductible, non-covered services, co-pays, will all be scrutinized. If the patient cannot pay, he or she will either not receive the needed care or will be directed to public facilities or programs that depend heavily on outside or tax-supported funding.

What is certain is that the hospital bill for the well-insured will be sufficiently high to cover expenses generated by poorly insured or uninsured patients.

If "spreading the wealth" is socialization, our system is already socialized, with the "haves" paying for the "have-nots" by a tax on the wealthier group. This explains a $15 aspirin, $10,000 to $15,000 antibiotic bills, and bills for heart surgery of $250,000 or more.

Dr. Maxwell uses this as an argument for more government involvement in healthcare.

Well-insured Americans say, "I got mine. To hell with you!"
Unless personal selfishness can be refocused to the common good, health care in the United States will remain with irrational rationing and inappropriate and financially unsustainable socialization by insurance, drug and medical supply industries.

He indirectly hit the nail on the head. Self-interest can indeed be focused for the common good. There is no substitute for self-interested buyers considering the amount of money they have to part with an weighing the value of what they’re getting. There is no substitute for self-interested providers trying to provide more value per unit cost to get more customers.

Nothing about this has to mean we do not care about the needy. On the contrary, everyone has a responsibility to help the needy. We do not, however, have to accomplish that by having the government overhaul the industry, just as we do not need to overhaul the food, clothing, shelter, utilities, education, and daycare industries to help the needy acquire those items/services.

Apart from the suggestion that opponents of overhaul don’t want to help the needy, Dr. Maxwell makes a powerful point: If we are going socialize and ration care for the needy, as we do today, we should at least do it in a well-thought-out way.