Managed care, whatever its prospects for running Medicare better, is facing gradual eclipse in the private sector by the new strategy of consumer-directed health care, based on tax-free health savings accounts, enacted in the same 2003 Bush-promoted law that gave us giant subsidies for the managed-care business. In a new report, McKinsey likens the arrival of HSAs to the creation of 401(k)s in the 1980s, an opportunity that largely bypassed traditional banks and pension managers and was captured by mutual fund firms like Fidelity and Vanguard.
Secret History of IRS Criminal Investigations Published
Via TaxProf: The Memory Hole; 75 Years of IRS Criminal Investigation History, 1919-1994 (PDF)
Madison’s Free Weekly Circulation Analysis
Kristian Knutson pens an interesting look at the local newspaper rackspace wars.
Tufte in Madison
Presenting Data and Information: A One-Day Course Taught by Edward Tufte is in Madison August 8, 2005 ($320/person):
- “One visionary day….the insights of this class lead to new levels of understanding both for creators and viewers of visual displays.” WIRED
- “The Leonardo da Vinci of data.” THE NEW YORK TIMES
- The Fee includes Tufte’s three books: Visual Explanations, Envisioning Information, and The Visual Display of Quantitative Information, and the 15″ x 22″ Napoleon’s March poster
I attended his course in Chicago last year. Highly recommended. More on Edward Tufte.
Recent US System Tax Articles
The ongoing mess that is our tax code (the third link is fascinating from a taxpayer perspective):
- Lynnley Browning:
In late 1999, the Keeters put $188 million into an account at Deutsche Bank. The money, used in tandem with a $500 million loan from the bank, would be used to trade derivatives and options. The Keeters say they thought that they would make an unspecified return on their investment, pay back the loan, as well as generate $188 million in tax savings that could then be legitimately used to offset other gains.
But family members said that they discovered their shelter was not legal only when the I.R.S. began auditing some of their federal tax returns – prepared by KPMG, with the Blips deductions written in – for 2000 and 2001. - Tanina Rostain:
From the late 1990s into the next decade, KPMG devoted significant resources to developing and mass marketing hundreds of abusive tax shelters. These products were designed to enable their purchasers – typically high wealth individuals and Fortune 500 companies – to avoid paying taxes on the huge financial gains they enjoyed during the stock market boom. 135K PDF
- Louise Story:
“The tax court is seen as a place that a taxpayer ought to be able to go and get a fair shake, and the secrecy here, and the outcome in these cases, does raise the question as to whether they’re getting a fair shake,” said Alan B. Morrison, a senior lecturer at Stanford Law School, who wrote a supporting brief for the three taxpayers in the Supreme Court case.
The court’s secrecy, “confirmed now by a major change in a decision, is a big deal, and it’s not right,” he said.
One of Mr. Kanter’s lawyers, Richard H. Pildes, a professor at NYU School of Law, said the case reminded him of Jarndyce and Jarndyce, the never-ending lawsuit in Charles Dickens’s novel “Bleak House.”
Whole Foods Marketing Strategy
But Whole Foods Market Inc. doesn’t pay for product placements or mentions on television shows. It has managed to make its brand name synonymous with healthy living, and grow its sales at a double-digit clip, while spending little on traditional advertising and marketing.
Consumers don’t see Whole Foods ads in their local papers, during daytime television shows or even in magazines.
While other food retailers spend heavily to draw shoppers, Whole Foods counts on its brand, its reputation and targeted community efforts to bring in customers.
Falling Behind in Broadband: Orwell’s FCC
Americans pay more for less broadband service than citizens of any other industrial country, and our take-up rate for fast Internet service is approaching Third World levels.
The reason? Lack of competition. Phone and cable networks, created under government control, have been made the private monopolies of corporate interests whose lobbyists dominate all capitals against the public interest.
David Isenberg has more.
Nanotechnology & Solar Power
Investors along Sand Hill Road in Menlo Park [CA] are pouring money into solar nanotech startups, hoping that thinking small will translate into big profits.
Both inventors and investors are betting that flexible sheets of tiny solar cells used to harness the sun’s strength will ultimately provide a cheaper, more efficient source of energy than the current smorgasbord of alternative and fossil fuels.
Nanosys and Nanosolar in Palo Alto — along with Konarka in Lowell, Mass. — say their research will result in thin rolls of highly efficient light-collecting plastics spread across rooftops or built into building materials.
Biotech Continues to Grow in San Francisco
EARLIER THIS YEAR, SIRNA THERAPEUTICS ANNOUNCED it was moving its corporate headquarters from Boulder, Colo., to San Francisco — one more in the long line of biotechnology firms to put down roots in the region. From a real-estate perspective, homegrown and transplanted companies together have transformed the fabled Bay area into the largest biotech community in the country, occupying 16 million square feet. And demand for laboratory space, from San Francisco to Palo Alto, shows no sign of slowing, as the proximity of Genentech and first-rate universities beckons other research firms.
Venture Capital in Wisconsin/Milwaukee
John Schmid takes a look at a proposed Venture Capital Fund for inner city Milwaukee.
Venture capitalists, a clique of financiers obsessed with risk and exponential growth, incubated the Internet, seeded the bioengineering boom and propelled the likes of Google, eBay, Microsoft, FedEx and Starbucks out of their infancy. Now, for the first time, they intend to apply the same approach to Milwaukee’s inner city.
VC in Wisconsin is very much a chicken and egg problem. My view is that Wisconsin lacks a risk taking, entrepreneurial environment, which is ironic because it used to exist here, in the days when manufacturing was the rage. We see evidence of this everywhere, from The Madison School District’s annual “same service” approach to budgeting in an era of constant change to our very slow adoption of the critical assets for the next generation of entrepreneurs: broadband (wifi and fiber networks to the home). Wisconsin is not a player politically in these initiatives, unlike other areas.
The truth, in my view, is that there’s plenty of money in Wisconsin. We’re simply lacking the will, and perhaps people – though I wonder about this, to apply it to new businesses.
Finally, any VC discussion must include internet entrepreneur Paul Graham’s essay: A Unified Theory of VC Suckage. (I know some venture capitalists and believe they can play an important role. The idea and execution, however are critical).
Finally, why not look at results? Madison’s fast growing (now – started in 1978) Epic Systems never took venture capital, while Berbee did (started in 1994). Judy Faulkner has run Epic from the beginning while Berbee founder Jim Berbee hasn’t run the company for years, and recently left. Foodusa, hypercosm, guild.com (apparently 40+M, including over 2m of local funds) and sonic foundry all took venture capital. A number of local biotech firms are also vc financed.