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Tax Time

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Some smart aleck once said that the two most effective reforms would be to require every elected official to send their kids to public school and to fill out their taxes without any outside assistance. The second part of that point is reinforced today by the story of Treasury Secretary Geithner’s tax problems — he failed to pay a portion of his taxes during his term at the IMF and had a housekeeper who was briefly out-of-status. The point here is that the head of the New York Fed and presumptive Treasury Secretary, using an accountant, can’t properly understand the tax code. What are mere mortals supposed to do?

Who's the DINO Now

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After a legislative hearing on public-private partnerships last month, the Governor reportedly tee’d off on one of the hearing chairs: Patrick….suggested that Baddour’s [the hearing chair] preference for privatizing roads and bridges suggested Republican leanings, according to people familiar with the conversation. Now comes news that the Mass Turnpike is indeed planning to put the turnpike service plazas out for a long-term lease. We are pleased to see the Administration’s new-found openness to the concept and hope they have had a chance to read our analysis of PPPs and case studies on their usage in Massachusetts. Given the Governor’s control of the Turnpike, this is doubtless being done with his blessing. However, with no comprehensive transportation reform plan out publicly […]

Moral Hazard

/0 Comments/in , , /by Liam Day

The outcomes of the various bailout and stimulus packages already passed or currently being contemplated, and the lessons to be drawn from them, won’t be known in their entirety for quite some time, if ever. There is, however, one quite basic premise that is once again being revealed by the federal government’s current attempts to step in and bolster the economy. Government spending creates moral hazard. Check out the lead story in this morning’s USA Today – States continue spending sprees. Why is that? As the national daily reports, though a few states have attempted to curb spending: Most have taken a wait-and-see attitude because spending cuts may not be needed if Congress approves a large federal aid package, and […]

The Free Market Reponse to Partners-Blue Cross

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Several folks, including a recent commenter, have posed a similar question — if the handshake agreement between Partners and Blue Cross has raised healthcare costs so much, why hasn’t someone come up with a non-Partners insurance product? I can’t say that I have an absolute answer. But, I would point you in the direction of the closest analogue I can think of — Unicare’s Commonwealth Choice PPO plan, which is available to state employees. It limits you to a variety of community hospitals, BIDMC, and Children’s Hospital (the only contact with the Partners network, as far as I can tell. Jump on our GIC health insurance comparison website — www.gicestimator.com — and pretend to be an employee of one of […]

More Bailout Fun

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First, the nonsense — signaling the illogical end of this process, the…ahem…adult entertainment industry has put in for its share of funds. Next, the impossible overreach — a Massachusetts firm has put in for $1.84 billion loan to construct production facilities. Now, don’t get me wrong — I hope the company succeeds in its efforts to make next generation batteries that might catalyze the use of more electric vehicles. But, for a company with around $40 million in yearly revenues and only $205 million in assets, this is a massive bet with our money on a specific company and a specific technology. Its good business on the company’s part — they’ve found an investor willing to take equity-type risk that […]