One of the many fascinating aspects of golf is that you can learn much about a person by playing a round of golf with them.
Based on this Time article (h/t Geoff Shackelford), President Obama sounds as if he would fit in quite well with the groups in which I play golf regularly.
That makes me feel better.
Frank Quattrone, the former CSFB investment banker who has an interesting perspective, notes a dynamic of the now almost decade-long criminalization of business that I have been warning business owners and lawyers about for quite some time now — the increasing cost of public equity:
[W]hy did [public offerings] disappear in the first place?
One reason is the heightened bar for small companies to go public, Mr. Quattrone said. Throughout his career, he said, some of the greatest companies he was associated with had $30 million to $50 million in revenue when they went public. Today, he said, bankers require companies to have $100 million or even $200 million in revenue.
Part of the underappreciated societal impact of prosecutors such as those on the Enron Task Force implementing the criminalization of business lottery is that the days of small companies tapping public equity for relatively cheap venture capital are gone. Moreover, the supply of executives who are willing to work for public companies is smaller because many of the best and the brightest simply do not consider the risk of operating in the public domain worth the draconian downside. The result is that investment alternatives for investors in public markets are declining.
Not exactly a policy to encourage economic revival, now is it?
Update: Along the same lines, Larry Ribstein reviews the destruction of public equity wealth in regard to AIG that resulted in no small part from Eliot Spitzer’s machinations. It’s a risk that I first noted in regard to AIG way back in early 2005. When will we learn?
Writing in the Wall Street Journal, Arthur Laffer lucidly identifies one of the key obstructions to controlling costs in America’s health care finance system:
Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. But ill-advised reforms can make things much worse.
An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs: the health-care wedge.
The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s health-care plan does nothing to address the gap between the price paid and the price received. Instead, it’s like a negative tax: Costs rise and people demand more than they need. [. . .]
The bottom line is that when the government spends money on health care, the patient does not. The patient is then separated from the transaction in the sense that costs are no longer his concern. And when the patient doesn’t care about costs, only those who want higher costs—like doctors and drug companies—care.
I have an interesting perspective on the health-care wedge. For 20 years from 1980-2000, I was involved in negotiating group health care insurance policies for my law firm.
Over the past decade in my solo practice, I have essentially self-insured by paying health-care costs out of pocket while taking out a family health-care policy with a large deductible to protect against catastrophic injury or illness.
During the earlier period when I was negotiating group policies for my firm, I had a good understanding of the cost of premiums for those policies, but I had no clue about the true cost of medical services and products.
However, since becoming self-insured, I have a very good understanding of the cost of most medical services and products.
Funny how that works, isn’t it?
When Bernie Madoff was sentenced a few weeks ago, my reaction was that it is utterly absurd to imprison a 72 year-old white collar criminal for 150 years. I mean, really — what’s the point?
Bernie Madoff’s 150-year prison sentence was an affront to the federal criminal justice system. . . .
I’ve been a professional federal sentencing consultant for more than 32 years. I have worked with hundreds of white-collar offenders over the past 25 years – Madoff, most recently – whose punishments dramatically increased in direct proportion to the government trumpets of justice, punishment and deterrence. Having lived through the past two decades of federal sentencing guidelines (no longer to be "presumed reasonable," ruled the Supreme Court this year), I know that the Madoff sentence was the crown jewel for the government.
In imposing sentence, however, the court ignored virtually all statutory sentencing principles and trumped the defunct federal sentencing guidelines. The sentence was imposed, acknowledged Judge Denny Chin, for symbolic purposes, which violates the supposed blindfolds of our nation’s justice system.
The sentence was, of course, within the law. But being within the law does not always mean a sentence is appropriate. Legal scholars will be hard-pressed to find a first-offender sentence of Madoff proportions – the maximum statutory term imposed on each count, to be served consecutively. [. . .]
The court’s responsibility is to deliver justice, not respond to emotional tactics. The Madoff sentence – with its "symbolic" justification – failed a big test. . . .
In the meantime, this even more egregious sentence of a man who didn’t steal a dime from his company or investors continues to fade from our society’s consciousness.
A truly civil society would find a better way.
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| Current Events – Tasers | ||||
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Has there ever been a Treasury Secretary who has been an easier target than Timothy Geithner?
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