Monthly Archives: February 2011

The Persistant Financial Losses of U.S. Airlines

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Could this have anything to do with security theater? Check out the synopsis from Severin Borenstein’s new working paper:

U.S. airlines have lost nearly $60 billion (2009 dollars) in domestic markets since deregulation, most of it in the last decade.

More than 30 years after domestic airline markets were deregulated, the dismal financial record is a puzzle that challenges the economics of deregulation. I examine some of the most common explanations among industry participants, analysts, and researchers — including high taxes and fuel costs, weak demand, and competition from lower-cost airlines. Descriptive statistics suggest that high taxes have been at most a minor factor and fuel costs shocks played a role only in the last few years.

Major drivers seem to be the severe demand downturn after 9/11 — demand remained much weaker in 2009 than it was in 2000 — and the large cost differential between legacy airlines and the low-cost carriers, which has persisted even as their price differentials have greatly declined.

Getting back to the basics

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This Japanese banana commercial is better than any of the commercials that I saw during this year’s Super Bowl.

If I Needed You

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The late Townes Van Zandt from the mid-1970’s, around the time that he was regularly performing in Houston at the Old Quarter on Market Square.

A low-cost concierge medicine model

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conciergeThe innovation of concierge medical practice has been a frequent topic here, so this recent NY Times article on the development of a low-cost concierge medical practice model caught my eye:

With 31 physicians in San Francisco and New York, [One Medical Group] offers most of the same services provided by personalized “concierge” medical practices, but at a much lower price: $150 to $200 a year.

One Medical Group doctors see at most 16 patients a day; the nationwide average for primary-care physicians is 25. They welcome e-mail communication with patients, for no extra charge. Same-day appointments are routine. And unlike most concierge practices, One Medical accepts a variety of insurance plans, including Medicare. [.  .  .]

.  .  . One Medical is the first to try to carry out such a model on a large scale. It now has several thousand patients and a growth rate of 50 percent a year, fueled largely by word of mouth. Dr. Lee said he planned to open a third office in Manhattan next month and expand to a third large city next year.

It will be interesting to see if this model still works on a larger scale, particularly if less healthy patients use a highly disproportionate amount of doctor time and resources.

However, as this latest disclosure regarding Obamacare reinforces, truly beneficial health care finance reform is more likely to come through innovations such as One Medical Group, not through government-managed overhauls.

The sad reality of Metro

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metro-map-2012-revisedMetropolitan Transit Authority CEO George Greanias makes his best case for building expensive light rail systems here. It’s all about investing for what will eventually be a “first-class public transit system.”

But there is also the here and now. And the stark reality is that light rail systems are utterly unsustainable without massive federal subsidies, which are hit and miss, at best.

Metro is in desperate need of leadership that will develop a transit plan for the Houston area based on something other than a strategy of “build as much light rail as possible now and then figure out how to pay for it later.”

Greanias does not appear that he will be providing such leadership.

So it goes with Metro.

The Myth of the Enron Whistleblower

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Sherron-WatkinsJust about the time that you think that Sherron Watkins has faded back into obscurity, she finds yet another way to promote herself:

Sherron Watkins, the former vice president at Enron who tried to blow the whistle on the accounting violations at the scandal-plagued Houston energy-trading giant, told an audience at a seminar Friday on the new whistleblower provisions in the Dodd-Frank Act that she and other whistleblower employees would probably take their concerns to WikiLeaks rather than the Securities and Exchange Commission now.

“People now will go to WikiLeaks to protect themselves,” she said during a briefing at the New York State Society of CPAs’ Foundation for Accounting Education offices in Manhattan. “WikiLeaks is a huge, huge sledgehammer that many employees will go to. People like myself will just go to WikiLeaks.”

Watkins, a CPA, said that since she came forward, she has been unable to get a job in corporate America despite her years of experience as an accountant and portfolio manager.

“The label whistleblower is stuck on my head,” she said. She now makes her living by giving speeches, and said she has heard from other whistleblowers about their inability to get jobs in their old occupations.

Well, isn’t that interesting? Courageous whistleblowers such as Watkins now have in WikiLeaks another valuable conduit for publicizing alleged corporate wrongdoing.
There is only one problem with that narrative, at least as it applies to Watkins.

She was never a whistleblower.

I wonder whether Watkins’ difficulty in finding a job “in corporate America” is at least partly attributable to the fact that most prospective employers are not inclined to hire someone for a management position who disingenuously presented herself to Congress, the mainstream media and the public as a whistleblower when she really wasn’t?