Questions for ConSova CEO Michael Smith

Michael,

How does one decide to embark upon a career like yours, in which you run a company whose goal is to remove people from health insurance rolls? When you tell people what you do at parties, do they turn their backs on you, or do they pretend not to be horrified?

According to Inc. Magazine, you proposed this line of business to your prior employer, and they didn’t want to do it, so you struck out on your own. Did your prior employer think it would be an unprofitable line of business, or did they think it was repugnant?

You are surely aware that your business makes money because the American health system is so damaged – because American health insurance is expensive, hard to get, and often available only through large employers. To use a medical analogy, your business is the wound myiasis of health insurance. Do you know what that is? Are you bothered that the maggot infestation of festering wounds is a startlingly apt metaphor for your career?

Your business requires people to prove that they are eligible spouses and dependents to retain their insurance. One way you look for ineligible health plan members is checking for couples where the spouses have different last names. Do you know any feminists? Do they think you’re justified in demanding extra documentation from married couples when a woman hasn’t changed her name? What is a reasonable cost in time and money to charge someone for the documentation they need to prove their relationship?

Do people often quote the play “A Man For All Seasons” to you? You know the line: “It profits a man nothing to give his soul for the whole world … but for Wales?” Just guessing from your LinkedIn profile, it doesn’t look like this is making you rich. Or maybe you just didn’t feel like wearing a well-fitted suit or hiring a competent photographer for your corporate headshot. Fair enough. I don’t usually wear suits or hire photographers either.

Do you think that your organization is a net positive for America or the world? Where on the scale do you think you fall on the continuum between working pro bono publico and working entirely contra bonos mores?

Finally, how do you sleep at night? I hope it’s on a huge pile of money, because if you’re not getting filthy rich doing this, I don’t see the point.

Sincerely,
Aaron Weber

Design against humanity

From ubiquitous protrusions on window ledges to bus-shelter seats that pivot forward, from water sprinklers and loud muzak to hard tubular rests, from metal park benches with solid dividers to forests of pointed cement bollards under bridges, urban spaces are aggressively rejecting soft, human bodies.

During the Great Depression, park benches were designed so that you could sleep on them. Then they were manufactured and installed in parks as a job creation program….

MBTA Funding Thoughts from Rep Dave Rogers

I wrote to my state government officials this past week to complain about the way our transit system has been shortchanged for decades, and how it’s now failing spectacularly when even slightly challenged.

Some of them responded, but Dave Rogers took the cake with the following incredibly exhaustive explanation of why Beacon Hill hasn’t come through for the T yet. It’s upsetting to hear, because the answer is still basically “money is tight, have patience” but he’s certainly paying attention:

Aaron – As you may have noticed, the biggest debate that the state legislature had in the last legislative session (2013/2014), was a debate over transportation finance. It was protracted. It was heavily covered all over the Boston Globe and the Boston Herald. It was again, clearly the single biggest issue the Legislature took up in the last legislative session.

Gov. Deval Patrick proposed a bold plan that called for raising $1.9 billion in revenue in part by raising the income tax, actually lowering the sales tax significantly, and closing or modifying 44 different credits, deductions and exemptions in the Massachusetts state tax code. The money raised was to be spent on two major investments: transportation and education.

His proposal fell flat in the Legislature, with many members skittish about a big tax increase. While my relatively more progressive/liberal constituency would likely support a tax increase as long as they knew it was targeted to meaningful investments in our future, many legislators represent districts where a tax vote would all but guarantee them a very serious political challenge and indeed could cost them their seat in the Legislature.

And, putting aside politics, in addition many of the same legislators actually didn’t think a big tax increase was a good idea because we ought to be looking for savings and efficiencies in the budget before we go to the taxpayers for more money. Also, they observed that Governor Patrick waited until he did not have to face the voters again before proposing his tax increase. Opponents also noted that within the 44 different credits, deductions and exemptions that Governor Patrick proposed to eliminate or modify, several were very popular with the public and it would be deeply unpopular and perhaps ill-advised to eliminate them. I will not go through the whole laundry list of 44 different items, but just to give one example, the Governor proposed eliminating the exemption from taxation of the capital gain on the sale of a home. Because ownership of a home is often the single biggest way that many middle class people try to build financial security, many taxpayers take advantage of this exemption and removing it would have been controversial.

Governor Patrick countered that he was open to negotiations and was not overly wedded to one particular approach. He also noted that he didn’t want to propose the tax hike during the worst of the recession, not because he was waiting until he didn’t have to again run for election. He also strongly argued that these investments in public transportation (including but not limited to the MBTA) and education were vital to our future prosperity and quality of life and that taxpayers would get a good return on the investment.

It would be hard to describe how intense the debate was on Beacon Hill.

I sided with Gov. Patrick, believing that transportation and education are so vital to our future as a state and as a society, that no matter what political pain might come, it was the right thing to do for a whole variety of reasons. Unfortunately, Governor Patrick’s plan did not carry the day. So while we did raise revenue by increasing the gas tax and the cigarette tax, I do not think we actually raised enough.

However, the revenue we did raise will now be invested in the system. Obviously, it takes time to fund capital projects and get them implemented, so it will be a while until we see the improvements. For instance, the T has placed orders for new Redline and Orange line cars. I also believe that upgrades will be made to the electrical grid and the other parts of the system involving mechanical and electrical engineering, the parts that T riders never see but that are so vital to a smoothly functioning system.

I would also note that on the ballot this past November, one piece of our transportation finance package was before the voters. Specifically, part of the tax package we passed to finance the transportation system included indexing the gas tax to inflation. That way the purchasing power of the revenues generated by the gas tax will not erode over time. The voters chose to repeal the indexing of the gas tax, further diminishing a revenue package that I didn’t think was big enough in the first place. So you can see the concerns of those in the Legislature like me were not totally unfounded.

Of course, those of us in the Greater Boston area also need to bear in mind that in large parts of the state, they do not benefit from the T and they believe that investments in the Greater Boston area always overshadow investments in other parts of the state.

Making public policy is ALWAYS more complex than meets the eye. Sometimes the media puts out sound bites, but there’s always more detail that is involved.

I will continue to be a strong advocate always for public transportation. To me public transportation is vital to economic growth, quality-of-life and to keeping cars off the road which cuts down on greenhouse gas emissions and pollution. It links workers to jobs and businesses to their consumers.

I don’t see major changes in the near-term but do believe the capital improvement projects I referenced earlier will begin to bear fruit over time.

Market positioning of macro vs. micro beer

My friends and I all cried watching the lost puppy ad for Budweiser, but the other Bud ad was probably more interesting from a market positioning standpoint, because Budweiser came out swinging against the craft beers that have undercut its dominance (still huge) of the American beer market.

The Beer Babe has a great take on how craft brewers are going to have to respond. Bud has always positioned itself as the beer of men having a good time, but here it explicitly marks itself as separate from unmanly beer geeks with twee mustaches and weird flavors: Bud is the beer of fun. Craft brews are the beer of pretentious neckbeards.

Beer Babe also points out that in this ad there are no women until one shows up bringing a tray of Bud to the party of bros. Yes, talking sexism with “The Beer Babe” may sound a little odd, but she has a great point: the Bud ad shows craft-beer-drinking as a sausagefest and Bud-drinking as a party with hot chicks.

The attack may be unfair and sexist, but it’s also got to hurt, because there’s an element of truth to the “twirly-mustache aroma-analyzing takes-it-too-seriously” caricature of the beer scene. It’s a weak point for people who make and like craft beer, and Bud will take advantage of it as much as it can.

The Beer Babe has the points for a really comprehensive response outlined in her post, and craft-brew manufacturers, distributors, and fans would do well to take note of them. This has the makings of a really interesting business case study in about a year or two.

I may need to resume my angry real estate blogging

Because this horrible monstrosity is on the market in Boston, asking $4,775,000. How much does it cost to look that cheap? How much does it cost to get “hand-picked Statuario marble” countertops that ugly? I suppose the kitchen would be OK if you usually eat out or have staff cook for you, but look at the decorative moldings on the kitchen island’s faux buttresses. IT LOOKS CLASSICAL AND CURLY IT MUST BE SOPHISTICATED. I hate to imagine the person who eventually does buy this and enjoy it, or the person who buys it and then spends another million bucks ripping out all the tat and replacing it with something halfway tasteful.

It reminds me of nothing so much as the homeless man I saw this morning on the way to work, carrying most of his worldly belongings in a Nieman Marcus bag.

Krugman vs. Murdoch, again and again

Yesterday, Paul Krugman pointed out that core inflation has not been, and still isn’t, a big problem facing most Americans today. Oil and health care prices have been a squeeze, it is true. But with cost containment and subsidies for health care, and better fuel economy and easing oil prices, those are somewhat less pressing today.

So how does Rupert Murdoch’s Wall Street Journal respond? A giant headline above the fold in today’s paper blaring BASIC COSTS SQUEEZE FAMILIES.

Health-care spending by middle-income Americans rose 24% between 2007 and 2013… That hit has been accompanied by increases in spending on other necessities, including food eaten at home, rent and education, as well as the soaring cost of staying connected digitally via cellphones and home Internet service.

In other words: Health insurance costs went up. Cell phone costs went up. Education costs went up. “Food eaten at home” went up, although they don’t cover whether eating out went down or stagnated, indicating that people are switching to eating at home to save money. But core inflation, as much as they want it to be a problem, is not the problem.

Stagnant wages are the problem. Health and education and rent costs are the problem. Observers are accustomed to lamenting the Washington Post’s coverage of politics and the economy, and wondering when the decay of standards will finally lead to the ultimate collapse of the paper as an institution. Must we also concede that the Wall Street Journal is nothing but a hollow shell, awaiting its own downfall?

Notes on Parking

There’s an empty lot on a major road near my house, and developers are proposing to put in first-floor retail and three floors of apartments. Total of 5 units of housing. City zoning requires 1 parking space for each unit of housing, so they will devote about 50% of this centrally-located real estate to the construction of a surface-level parking lot.

This is dumb. It’s so obviously dumb that even Slate and Buzzfeed agree about it.

But cities move slowly to change dumb rules, and neighbors really do not like it when people bring cars into their neighborhoods and compete with them for street parking.

So I had an idea: How do we get people to stop bringing more cars into the city, without angering current residents who are worried about being able to find an on-street parking space?

We could charge more for a first-time parking permit. Renewals would remain the same, but bringing a new car into the city would cost extra. In particular, it would dissuade students from bringing their cars from home when they come to the city for a year or four. Several people at a recent community development meeting complained that suburban students come to Cambridge, park their suburb-sized SUVs, and then never use them. This seems like an ideal place to nudge people with a small price increase. If it’s an extra $50 to bring the truck, they might not do it at all.

The beauty of this is that it unites two key stakeholders on the issue. The new urbanists are in favor because it reduces average car ownership and car usage. Current residents don’t care about that, but they would love to have it be easier to find parking. And they get that, because OTHER people don’t bring cars to the neighborhood.

Similarly, we could increase cost of getting a second street-parking permit for any given home. So your first car costs $50 a year, your second costs $100, and so on. Sure, roommates would have to figure out who gets Permit 1 and who gets Permit 2, but I imagine there’s some math that could make that work out.

Gilded Age

There was a harpist busking on the T the other day. On Beacon Hill, a main broke and water poured down the hill into the gutters at the bottom, swirling around the oversize wheels of a late-model Bentley coupe. Down the street there’s a billboard advertising a company that does medical debt collections. In a grassy spot next to the hospital, a gaggle of frequent emergency room customers bicker and slur and nod out. There’s a Mercedes S class with the license plate EXACTA idling in front of the coffee shop, near a store selling a ten-thousand-dollar custom chest of drawers and the convenience store where the mentally disabled guy shakes a cup of change. The guy who usually panhandles in front of the Dunkin Donuts disappeared for a while, then reappeared with crutches. He doesn’t look so good these days. It’s going to be a cold winter.

I don’t know what any of this means. I don’t know if it’s worse than it used to be. But something isn’t right here.