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House Bill Pushes For Green Homeowners Plan

by The Huffington Post on July 21, 2011

Huffington Post…

Private homeowners relish the freedom to refurbish their homes as they please. With that freedom comes the onus of financing the cost of those changes. A bipartisan group of House officials is recognizing that issue, preparing legislation that will encourage participation in an energy-efficient plan. California’s Lake County Record-Bee reports that Rep. Nan Hayworth (R-New York), Rep. Dan Lundgren (R-California) and Rep. Mike Thompson (D-California) have drafted the PACE Protection Act of 2011 . The bill aims to amplify the benefits of the Property Assessed Clean Energy Program ( PACE ) — a local plan that offers energy-savvy financing. PACE promotes the adoption of green home add-ons by reducing the pressures associated with government subsidies. This voluntary option allows residents to gradually pay back loans on environmentally-friendly projects through their property taxes, lowering the brunt of upfront costs. A map on PACENow’s website shows that states have passed PACE legislation under both Republican and Democratic majorities. The Stockton Record compiled reactions from the California side, where Rep. Lungren sees this program as not only reducing energy bills, but boosting the job market. On the other coast, New York’s Middletown Times Herald-Record filed similar sentiments from Rep. Hayworth, who specifically referenced the immediate relief for taxpayers interested in these types of improvements. But a major barrier to this option rests within the interests of federal guarantors. The Stockton Record adds that major mortgage backers like Fannie Mae and Freddie Mac oppose the lien structure, which gives precedent to PACE over government-backed money. Rep. Thompson denounced that perspective in a blog for The Huffington Post, noting that PACE financing options are not “loans” that lie on the shoulders of the “person” living within the home. In turn, the Golden State Democrat argued that the actions of Fannie and Freddie are “limiting local governments’ abilities to provide benefits to the public.”

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House Bill Pushes For Green Homeowners Plan

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The Center for Public Integrity: Excluded groups want in on health information technology funding

by on May 24, 2011

Huffington Post…

By Kimberly Leonard Providers frozen out of a $27 billion federal fund for conversion of medical records to electronic form are now fighting back in an effort to qualify for the money and possibly increase the size of the pot. The results of these multi-front battles are uncertain — but they are representative of a larger war. All over Washington, special interests are scrambling to improve their position by attempting to renegotiate portions of President Barack Obama’s health care reform — in new regulations, interpretations and proposed legislation. The new money for health information technology, or health IT, is the result of the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of Obama’s massive economic stimulus legislation in 2009. The idea was to allot stimulus funds to Medicare and Medicaid, which would then distribute the money to providers who demonstrated they were using electronic records to improve patient care. But like a lot of spending decisions in Washington, this one ended up choosing winners and losers. In the weeks leading up to the stimulus bill’s passage it became clear that the $50 billion Obama had promised during his campaign wouldn’t fly. In the end, some health care providers were shocked to discover they would not be eligible to participate in the program because Congress had narrowed the criteria and limited HITECH’s pricetag to $27 billion. But they’re not giving up. Among those lobbying anew with lawmakers and rule-writers are groups representing behavioral health providers, rural health centers and home-care practitioners. Causes of exclusion The conversion of medical records to digital form has been a long-sought goal of health care reformers, and the idea of funding federal investment to make it happen has been around for a while. Representatives of various health sectors were lobbying Congress and helping to craft legislation in 2007, said Tina Olson Grande, senior vice president for policy at the Healthcare Leadership Council. In the fall of 2008, Rep. Pete Stark, D-Calif., chairman of the House Ways and Means health subcommittee, sponsored a bill in which incentives were specifically promised to physicians and hospitals. That measure never got out of committee, but it provided a template for the HITECH bill that emerged as part of the $787 billion stimulus package, the American Recovery and Reinvestment Act, which Obama signed on Feb. 17, 2009. Like most legislation, the economic stimulus was altered by fast-moving negotiations. Exactly how the HITECH winners and losers were decided remains a bit murky. Though it had been widely reported months ahead of time that the health IT effort would receive $50 billion, the Congressional Budget Office ultimately scored the initiative at about $20 billion. Physicians, chiropractors, dentists, optometrists, podiatrists, psychiatrists and most hospitals were made eligible to receive the incentive payments. But nurses, physician’s assistants, behavioral health providers, home-care practitioners, emergency medical services, long-term care providers, post-acute providers, federally qualified health centers, rural health centers, rehabilitation hospitals and cancer centers were excluded from participation in parts or all of the program. “Those providers who were included had an inside track,” said Al Guida , a lobbyist for the behavioral health community. “By the time it came out and you realized you were left out, there was little time to lobby the process to get yourself back in.” Guida said behavioral health providers also “tactically … shot ourselves in the foot” by focusing their lobbying efforts on addressing protections regarding the security and privacy of personal health information, only to discover that even though those demands were met no behavioral health providers would qualify for the cash rewards. The groups that were excluded, said Dylan Roby , assistant professor of health policy at UCLA’s School of Public Health, have historically been less successful in getting Congress to support their agendas than those who were included. House Energy and Commerce and Ways and Means committee staffers met with non-eligible providers after the bill was drafted and explained that they wanted to maximize effects with limited funds, rather than try to spread the money over a greater number of providers and possibly have less impact, said Rich Brennan, executive director of the Home Care Technology Association of America. The final bill did specify that the Department of Health and Human Services (HHS) was to file a report to Congress in June 2010 regarding the progress made by providers who were left out, but that effort hasn’t yet amounted to much. An interim report issued in July 2010 says only that the department awarded $561,632 to the National Opinion Research Center at the University of Chicago to conduct the study. That document said a final report would be issued in December 2010, but no final report has yet appeared; HHS officials told iWatch News the document would be delivered by the end of 2011. Influencing Efforts Backers of expanding eligibility and funding for health IT improvements say allowing all providers access to funds would improve health for patients and cut back on costs in the long run. One medicine or disorder can often impact another, they say, and patients cannot be provided coordinated care unless the technology spans across all health fields. Ever since the stimulus passed, excluded health care providers have drafted legislation, spent thousands on lobbying, posted their arguments on public-comment boards, sent letters and met with members of Congress and HHS officials to push the government to include more groups in the program. The effort is but the latest example of health interests seeking to revisit portions of Obama’s health care reform plan. An April iWatch News piece focused on efforts by medical device makers to exclude themselves from a 2.3 percent excise tax slated to pay for expanded health coverage. Another iWatch News piece the same month detailed insurance brokers’ attempts to seek a rule recalculating how much insurers could spend on administrative costs. The effort to expand health IT funding has been led by the behavioral health community, representing providers such as clinical psychologists, clinical social workers, psychiatric hospitals, substance abuse treatment centers and mental health treatment centers. These providers have been lobbying together since May 2010, and in March formed the Behavioral Health IT Coalition. The group is pushing the Behavioral Health Information Technology Act , a measure introduced in March by Democratic Sen. Sheldon Whitehouse from Rhode Island that is designed to expand funding for health IT. Republican Sen. Susan Collins from Maine and several Democratic senators signed on to cosponsor the legislation in May. If the bill does not pass on its own, Guida says, the behavioral health coalition will try to attach it as an amendment to another piece of health care legislation at the end of the year. The group’s lobbying firm, Guide Consulting Services, received $90,000 for lobbying in Congress during the first quarter of this year on health IT and other health reform-related bills. A separate bill would assist federally qualified health centers, which receive government grants to provide health care to underserved communities, and rural health clinics. The Fix HIT Act, introduced in March by Michigan Democrat Debbie Stabenow on the Senate side and Illinois Republican Adam Kinzinger on the House side, would amend HITECH to qualify health centers for incentive payments paid through Medicaid. The Congressional Budget Office has not scored the bills, nor has the Obama administration issued a statement of administration policy about them. The Senate bills have been referred to the Committee on Finance and the House bill has been referred to the Energy and Commerce Subcommittee on Health. Other providers excluded to date from the health IT funding are taking a more moderate approach. The American Academy of Physician Assistants has expressed its concerns to HHS, and sent a letter to targeted members of Congress recommending that HITECH be amended to extend Medicaid incentives to physician assistants if at least 30 percent of their patients are on Medicaid. “The current HITECH limitation on Medicaid [electronic health records] limits the development of EHR systems for Medicaid beneficiaries who are served by PAs,” they wrote. “PAs are often the sole health care professional in medically underserved communities.” Rescue squads and other emergency medical services providers are also not qualified to receive reimbursement under the law because they fall primarily under the jurisdiction of the Department of Transportation, not HHS. Because the role of emergency services is often misunderstood, “we get left out of virtually everything Congress does,” said Gary Wingrove, a volunteer leader of the National Rural Health Association who has EMS experience. The group has focused its efforts on raising awareness of its role to make sure future health care policies can apply to them. Other groups are concluding they would rather not take part in the program — because it not only provides incentive payments now, but also holds out the prospect of penalties several years from now for not implementing technology that adheres to government standards. The Home Care Technology Association of America has made the office of the National Coordinator for Health IT (ONC) at HHS aware of its feelings on the funding issue by submitting a public comment via the department’s website. “Our industry envisions a future where the integration of EHRs, remote monitoring and community based services will be the backbone of the national health care delivery system,” they wrote. “Therefore, information sharing amongst physicians and hospitals with home care and hospice providers will be critical to advancing care coordination efforts and reducing re-hospitalizations.” However, Rich Brennan, the group’s spokesman, said the association was mostly focusing current efforts on a separate measure, the Fostering Independence Through Technology (FITT) Act , which would encourage Medicare reimbursements for audio and video home monitoring. Looking Ahead Dr. Farzad Mostashari , who was appointed as the new national coordinator for health information technology in April, told iWatch News he does not think ONC can meets its goal of improving care through health IT unless all providers are able to help track patient records throughout their lifetime and across different medical conditions. But he also said that the prospect of passing pending legislation to expand the stimulus to other providers would be an “uphill battle.” Other experts agree, especially in light of the government’s current fiscal challenges. Even the existing funding could be threatened. A pot of billions of dollars such as that set aside for HITECH, particularly as it has sat unspent for two years, is potentially an attractive target for budget cutters at a time of escalating debt. The HITECH language specifically required that the money be appropriated ahead of time, allowing for a timeline that would give health practitioners the opportunity to begin implementing the required technology, demonstrate results and then apply for government reimbursements. Even now, two bills are pending in Congress to rescind HITECH funds for the purpose of beginning to pay down the country’s $14 trillion debt. In January, Republican House member Jim Jordan of Ohio introduced the Spending Reduction Act, which proposes — among other cuts — eliminating $45 billion in unspent stimulus dollars, including the funds for HITECH. In February, Republican Thaddeus McCotter of Michigan introduced the Preserving Patients’ Choices Act, which specifically proposes repealing health care-related stimulus appropriations. The two bills have been referred to committee. The fact that little cash has been awarded could also encourage a rescinding of funds, experts say. Starting in January, 13 states have now launched the program in which incentive payments through Medicaid are disbursed. Though the Centers for Medicare and Medicaid Services says it is pleased with the participation so far, only eight states have actually made Medicaid payouts — totaling just $83 million. Payments through Medicare began just this month, as had been scheduled in HITECH. Stephen Zuckerman , health economist for the Health Policy Center at the Urban Institute, doubts either bill will make it past the Democratic-controlled Senate or gain the president’s signature. But he also doubts HITECH will gain any additional funds for excluded providers. That leaves one other possibility: that more providers find a way to qualify, but without the pot of funds increasing. That scenario presents its own challenges. “If the goal is to give every provider who qualified in the original bill some fixed or minimum amount of funding, then adding new categories of providers without adding new dollars would not make sense,” said Zuckerman. “Unless new money is made available, and this seems unlikely, the only way to add new providers would be to reduce the funding available to each provider in the original group.” The fate of excluded providers remains unclear, but so far all other attempts to include additional providers in the stimulus program have failed. Some of the groups appear to be making small strides in at least getting their voices heard by having ONC assess their progress in adopting digital records. In March, the national coordinator’s office hired a new policy analyst — Liz Palena-Hall — to help providers who haven’t qualified for funds move forward in acquiring electronic health records. In its strategic plan published this March, the national coordinator’s office said it would look into “the creation of an incentive program to support the adoption of certified EHR technology within the behavioral health community.” Some providers will no doubt also find a way to bypass the laws, making individuals or clinics apply for the funds as each qualifies. For instance, though rural health clinics do not qualify, their physicians do. With or without the impetus of government funds, experts agreed that the country’s health care system is eventually heading toward widespread use of electronic records. “Some will be brought along because they are associated with another provider or it may just lower their costs,” said Neal Neuberger , executive director at the Institute for e-Health Policy. “Some of these technologies are beginning to take off because it makes good business sense.”

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The Center for Public Integrity: Excluded groups want in on health information technology funding

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DSK Replacement Should Come From Developing World

May 23, 2011

Nothing against French Finance Minister Christine Lagarde , who by all indications seems qualified to oversee the International Monetary Fund, but here’s a vote for anyone else who is qualified from the developing world. Let’s recap why there is suddenly a vacancy in the highest office of the IMF: Dominique Strauss-Kahn, a man reared in rarefied Parisian suburbs, educated at elite French academies and more recently occupant of an office that entitles him to fly around the globe fraternizing with fellow members of the powerful set, allegedly stepped out of the shower in a $3,000-per-night suite at a deluxe New York hotel. There, he encountered an African immigrant employed as a maid, who was presumably arriving to make the bed and remove the trash. The alleged sexual assault that followed is uncomfortably close to a workable metaphor for how much of the developing world has long viewed its relations with the Washington-based institutions at the center of the global financial order, the IMF and its sister agency the World Bank. Not without some merit, it must be added. Why was DSK the one stepping out of the shower and headed for an elegant lunch in a Manhattan restaurant? By dint of many reasons, to be sure, but surely in part because of his good fortune of being born in the capital of a wealthy nation and being the son of parents able to reinforce their own good fortune by sending him to the most exclusive schools. And why was this woman from Africa here on this day? Every life is complex, but one can assume that her decision to come to the United States, rent an apartment in the Bronx and ride the subway to Manhattan so she could scrub the toilets of the global elite amounts to her calculation that this was the best economic opportunity available to her. This is not a broadside against the World Bank and the IMF, whose histories and world views are far more complex than they are often made out to be by its legions of critics. The two institutions are full of dedicated and well-intentioned people who spend their days trying to build a more equitable economic order and spread the fruits of innovation to more parts of the globe (though the same cannot always be said about the leadership). Rather, it is a recognition that the inequalities that divide nations and the classes within nations are so deep and self-reinforcing that it is going to take some real doing to transform the centers of power into forces for greater good. That, and the recognition that it would be disgusting to fill a vacancy created by an alleged sexual assault of an African immigrant maid by a European master of the universe with another European — yes, even a woman — through the same secret, clubby process that has been used to staff the place since its inception. Over the weekend, the sense took hold that Lagarde’s appointment was gathering unstoppable momentum . But that would be a stay-the-course move. Why not reform from the top down? For far too long, the IMF and the World Bank have been perceived as institutions intent on perpetuating the privileges of wealthy countries while displaying callous disregard for the lives of ordinary people around the globe. Time and again, a fresh financial crisis in Indonesia, Argentina or Greece has prompted the IMF to prescribe its usual regimen of austerity as the condition for an emergency bailout, requiring government budget cuts, the elimination of subsidies for food and fuel and the cessation of other spending. This medicine has been served up as a needed salve for a global financial system lacking confidence, which is really a euphemism for the needs of the enormous banks who play an outsized role in the national affairs of the countries that pay most of the IMF’s bills: Its policies have ensured that lenders based in the United States, Europe and Japan are not forced to absorb losses on loans made recklessly in pursuit of emerging market riches. Better that ordinary people in Indonesia, Argentina or Greece should lose access to luxury items like rice and kerosene than that shareholders of Deutsche Bank or Goldman Sachs should forego dividends. One may be tempted to reject that portrayal as cartoonish, but every now and again a window opens up on the views of the people running the ship. Recall the memo that Larry Summers signed in 1991 , when he was the chief economist of the World Bank, advocating the bank encourage more toxic waste be transferred from wealthy countries to poor countries. Among the reasons? Poor people earn less than rich people, so the lost wages from their deaths are not as great. “The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that,” the memo asserted. Summers later characterized the memo as a sarcastic retort . Hilarious. Whatever the tone, the logic of the infamous memo is the same sort that holds as a natural outcome the fact that African immigrants should serve the needs of European and American potenates inside delightful hotels: Every actor pursues their own economic self-interest, and thereby maximizes the greatest aggregate good. So speaks the text book. That is no justification for an attempted rape — the crime alleged — but it helps explain how these two individuals found themselves standing opposite one another in the same hotel room. We simply need the institutions that govern the world’s money to be representative of the world’s people. Yet the way the DSK episode has been absorbed by the power centers reflects a tendency to accept the sorts of assigned roles the IMF and the World Bank generally view people outside the most powerful countries as: cheap hands to be exploited, miserable wretches to be pitied and perhaps aided or, most of the time, rounding errors on the ledger books of a global economy. The New York Times keeps referring to the alleged rape attempt as a “tawdry” episode, as if implying that DSK was caught consorting with a woman of lower class and ill-repute, brought down by an unclean act — an embarrassment, as opposed to a crime of violation and brutality. In France, to judge from the polls and the press coverage, concern seems to focus on claims that DSK was set up — an exculpatory frame that turns him into the potential victim — and worries that he is being ill-treated as we glimpse him placed on the hardwood benches of a New York City courtroom or paraded in front of cameras on his way to being arraigned. “He’s not like everyone else,” the French intellectual Bernard-Henry Levi reportedly told a German newspaper , expressing his revulsion over seeing his friend DSK led into court in handcuffs. The French reaction speaks to the deep-seated sense of entitlement that governs the powerful class: The maid and her story are not even in the picture. Let us contemplate the injustice of being yanked from the front of the plane to the courtroom! Did DSK even get to finish his pre-takeoff cocktail? This is, frankly, one of the rare times I find myself feeling almost patriotically proud over the workings of the American justice system. The New York Police Department appears to be putting its nose to the ground and investigating the case as a straightforward crime, in which one human being allegedly violated the rights of another. Considerations of class and race and national origin appear to be trumped by a straightforward process of fact-gathering and deliberation. Isn’t this how the global financial system ought to work, too, as the IMF sets about finding a replacement for DSK? The clearest argument for giving prime consideration to someone from the developing world is the name for the process that has governed in the past — the “gentlemen’s agreement” that the World Bank chief must be American, while Europe has claim to the head of the IMF, as if these offices are colonial spoils to be divvied up among empires. The IMF has in recent years made a show of adjusting the byzantine system through which it allocates votes according to the financial contributions of its members, s lightly adjusting upward the shares that accrue to China, Brazil, India and Russia . But that is mere tinkering around the edges. We need something bold, a clear assertion that the gentleman’s agreement is no more. Four years ago, as Wold Bank President Paul Wolfowitz was forced to leave his post under an ethical cloud, prominent academics called for an end to the gentleman’s agreement and the adoption of a transparent process to replace him. But the old system was indulged again. Now, the same calls are being heard again. Over the weekend, the finance ministers of Australia and South Africa released a joint statement urging that DSK’s replacement be selected on the basis of merit, not nationality . “For too long, the IMF’s legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality,” the statement declared. “In order to maintain trust, credibility and legitimacy in the eyes of its stakeholders, there must be an open and transparent selection process which results in the most competent person being appointed as managing director, regardless of their nationality.” That’s a good start, but better yet, why not urge for the active pursuit of a managing director from the developing world? To which one might respond that the moment at hand is too fraught with peril to allow political correctness to dictate. Greece is in trouble again. Portugal remains a worry. Spain may yet need a bailout, with awful ramifications for the rest of Europe . But part of the clubbiness that prevails inside the IMF and the World Bank, not to mention the American Treasury, includes subscribing to the increasingly ridiculous assumption that the West knows best when it comes to prudent financial management. China, whose banking system is oft-described by the power set as a disaster in waiting, has now skirted two global financial crises in a row (Asia in the late 1990s, and the Grand Disaster of 2008) without a domestic meltdown. The knock on China is that relationships and insider deals determine where money goes. How to put this? France, Germany, the United States and Great Britain also seem to have this problem. That’s how the good taxpayers of the United States wound up giving money to AIG to bail out Goldman Sachs while letting the executives keep rewarding themselves with bonuses. India is a growing economic power that happens to be a democracy. South Africa has emerged from apartheid to assume a seat at the table among responsible nations. Latin America is increasingly integrated into the world economy. Surely, somewhere other than Europe or the United States resides a person capable of overseeing the IMF. Dominique Strauss-Kahn has shined a momentary light on something that was never really hidden to begin with, yet manages to go largely unseen — the degree to which institutional privilege perpetuates itself to the detriment of most citizens of the world. His demise presents us with an opportunity to address that, one that ought not be squandered.

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eCrypt Technologies Hires Social Media Expert Tris Hussey as Community Manager to Lead Product Campaign

April 28, 2011

Leading Social Media Expert and Author, Tris Hussey Joins eCrypt Technologies Inc. as Community Manager and Online Media Producer to Lead Product Promotion, Adoption, and Conversion From Competing Technologies

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Mark Weisbrot: Spain’s Troubles Are Tied to Eurozone Policies

February 11, 2011

It has become fashionable since Spain’s economy began to decline to make comparisons to Germany, which is rebounding strongly. The idea is that the Germans went through their restructuring, got organized labor under control, and thereby made their economy more competitive. According to this narrative, this is the key to their economic success — so Spain should do the same if the Spanish economy is to recover. This fits well with various stereotypes of Germans as disciplined and hard working, willing to do what is necessary to be competitive in the global economy, while their counterparts in Europe’s periphery are seen as undisciplined and indulgent. However, the story does not fit the economic facts very well. Spain’s problems are mostly associated with the euro, combined with some bad economic policy decisions that have nothing to do with “labor inflexibility,” the strength of unions, or government spending. And its recovery is being delayed as a result of decisions made by the European authorities: the European Commission, the European Central Bank, and the International Monetary Fund (IMF). When Spain joined the euro in 1999, its level of productivity in manufacturing was about 63.6 percent of Germany’s. Over the next 10 years, productivity grew at about the same rate in both countries, so that by 2009 the ratio was about the same: 63 percent. Hourly wages in manufacturing also increased by about the same amount in both countries, so Germany kept its large, productivity-based cost advantage over Spain. Of course, this arrangement has worked out much better for Germany — during the upswing from 2002-2007, more than 120 percent of Germany’s growth was due to exports — with most of these exports going to other Eurozone countries. This is the basic problem when a country decides to adopt a common currency with other countries that have much higher levels of productivity. They can’t really be competitive in tradable goods — which includes not only exports but industries that compete with imports. If Spain had its own currency, it could let the value of its currency fall to a level that would make the country’s tradable goods sectors competitive. In a situation where the economy is in recession or is weak — Spain’s economy shrank by 0.2 percent in 2010 — the increased exports and reduced imports from such a devaluation would also help get the economy growing again. Instead, the European authorities have prescribed what is called an “internal devaluation” — shrink the economy and raise unemployment enough so that the country can become competitive, through lower prices and wages, without changing the exchange rate (i.e. keeping the euro). Unemployment in Spain is now 20 percent, and although exports have picked up some over the last year or so, it is not nearly enough to pull the economy out of its slump. Spain needs expansionary fiscal and monetary policy to boost the economy. But monetary policy is controlled by the European Central Bank — which just last week announced that it may raise interest rates, despite Europe’s anemic recovery and crushing unemployment in the Eurozone’s weakest economies (Spain, Ireland, Portugal). Expansionary fiscal policy is prohibited by pressure from the European authorities — who are actually pushing Spain to do the opposite, i.e. cut spending and raise taxes — and the fact that, not having its own monetary policy, Spain cannot engage in “quantitative easing,” as the US has done recently, or Japan has done for decades, to finance government spending without adding to the country’s net debt burden. Now back to Spain’s decade of experience with the euro. The adoption of the euro opened up a period of bubble growth, with big capital inflows from other European countries, and the country experienced a vast run-up in the stock market and a huge housing bubble. Spain’s economy grew by a third between 1999 and 2007, and its net debt fell to just 26.5 percent of GDP in 2007. But it was bubble-driven growth: the stock market peaked at 125 percent of GDP in November 2007 and dropped to 54 percent of GDP a year later. A housing bubble increased construction from 7.5 percent to 10.8 percent of GDP (2000-2006), and housing starts dropped by 87 percent when the bubble burst. It was the bursting of these bubbles, and not any lax spending policies by the government, that crashed Spain’s economy and caused its budget troubles. And it is Spain’s subordination to the European authorities, which prohibits it from using any of the three most important macroeconomic policies — fiscal, monetary, and exchange rate — to get out of its slump. Furthermore, although it was theoretically possible for Spain to have narrowed the productivity gap with Germany — since it was starting out at a much lower level of productivity — the bubble-driven growth of the last decade, spurred by the adoption of the euro and large capital inflows, is not the kind of growth that drives up manufacturing productivity. So the neoliberals have it backwards: it is the neoliberal macroeconomic policies, locked in with the euro, that are the source of both its recession and continuing troubles. Spain should refuse to accept any policies that prolong its slump and prevent it from reducing unemployment. If that means restructuring its debt or even leaving the euro, then these options should be on the table in any negotiations with the European authorities. These choices would better than suffering through many more years of sluggish growth and high unemployment. This column was published by the Guardian Unlimited (UK) on January 29, 2011.

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Crocus Technology Appoints Dr. Anthony J. Tether to Advisory Board

November 11, 2010

Former DARPA Leader to Spur the Adoption of TAS MRAM in Advanced Applications

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NaviSite Appoints Dennis Sherwood as General Manager of Western Region

September 7, 2010

ANDOVER, MA–(Marketwire – September 7, 2010) –   NaviSite , Inc. ( NASDAQ : NAVI ), a premier provider of enterprise-class hosting, managed application, managed messaging and managed cloud services, today announced the appointment of Dennis Sherwood as General Manager of the Western Region. Sherwood will lead NaviSite’s sales efforts in the Western Region and accelerate the adoption of NaviSite’s cloud-based managed services offerings.

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David Isenberg: Hardly an Unalloyed Virtue: PMSC in Afghanistan

August 25, 2010

The recent news that President Hamid Karzai has ordered a four-month phase out of all private military and security companies (PMSC) in Afghanistan has occasioned much commentary, but there has been a lack of hard facts. For example, who exactly is working there now and which companies would have to leave?. Press reports stated there were 52 PMSC registered with the Afghanistan Ministry of Interior but gave no details as to who there were. Burt, as it happens, the UN Working Group on the use of mercenaries as a means of violating human rights and impeding the exercise of the right of peoples to self-determination, investigated that very subject. In a report dated June 14, it noted: The Government of Afghanistan has also stressed the need for prompt adoption of procedures to regulate and monitor the activities of these companies, saying that the lack of rules governing the activities carried out by PMSCs created a culture of impunity dangerous for the stability of the country. Civil society had a negative perception of the large presence of PMSCs, in particular with regard to the difficulty of differentiating the legal army and police from foreign troops, PMSCs or even illegal armed groups. A comprehensive regulation [more on this below] was adopted by the Council of Ministers in February 2008 and is still in force today. The Regulation led to the licensing of 39 Afghan and foreign companies1 and the registration of their personnel and weapons. The Regulation, if properly implemented, is an important step to ensuring monitoring and accountability of PMSCs. In a footnote the report notes “The Working Group was informed during its regional consultation with the Asia Group on 26-27 October 2009 that the Government of Afghanistan had recently extended the number of licensed companies to 52, with 27 national and 25 international PMSCs.” According to the report, “It is difficult to estimate with accuracy the number of PMSCs in Afghanistan as there are reportedly some Afghan PMSCs not registered with the MoI. According to the information received, the estimated number of PMSCs operating in the country until early 2008 varied between 60 and 90 companies. In addition to local companies, foreign PMSCs were in the majority registered in the United States and the United Kingdom, with some in Canada, Germany, South Africa and the Netherlands. Third-country nationals are also being recruited by international PMSCs. The number of PMSCs may increase given United States troop surges and NATO operations.” Many commentators have speculated that Karzai’s call for phasing out PMSC is primarily a political move to relieve pressure on his administration for various alleged corruption. That may be so, but the UN report provides evidence that PMSC are a legitimate security concern: The presence and activities of PMSCs in Afghanistan are very much interconnected with the large number of unauthorized armed groups of various kinds on Afghan territory. The Ministry of the Interior (MoI) has estimated that no fewer than 2,500 unauthorized armed groups were operating in those provinces under governmental control, which represent less than half the territory of the country. Many de facto non-State armed groups have used the regularization process for PMSCs to disguise their groupings as private security companies, reinforcing the perception that PMSCs were a threat to stability. Existing PMSCs — especially local companies but also some international ones — became a “reservoir” for adoption and legalization of armed individuals with military skills who in the recent past had belonged to unauthorized military groupings. … In Jalalabad, for example, the Working Group was informed that the Afghan National Police in the province of Nangarhar had counted 500 private security entities operating in the eastern region which were not registered with the MoI. These illegal entities, with a minimum of five men, fall under the definition of illegal armed groups and should be dismantled. By comparison, there were only six PMSCs registered with the MoI operating in the area. Another example would be this: The Working Group received information about the involvement of PMSC contractors in robberies, kidnapping, interrogation, torture of detainees and irregular and abusive house inspections. The MoI confirmed cases of excessive use of force.. In one case, local private security contractors are alleged to have shot seven adult males and injured one child in what appear to have been extrajudicial killings. On 27 October 2008, the international military forces (IMF) and Anti-Government elements (AGEs) engaged in an exchange of fire in the Haft Asyab area, Saydabad District, Wardak Province, which killed 11 AGEs and injured 12 others. During the fighting, private security contractors working for the RWA Road and Construction Engineering Company entered Hakim Khail village in the Haft Asyab area and, according to witnesses, entered a house, forced out the adult males inside and shot them one by one. A child who tried to run away was allegedly shot in the back. Other reports state that five people were killed by IMF air strikes during the operation. No information has been provided on whether this incident has been fully investigated and anyone prosecuted. Considering the fragile state of Afghanistan one can see that having more people with guns is a source of concern, regardless of the intended purpose. Exactly how many PMSC there are and how many guns they have is unknown. The report states: The exact number of PMSC personnel is difficult to ascertain and the Government was not able to provide the Working Group with statistics. According to academic studies, the estimated number of PMSC personnel varied from 18,000 to 28,000 before the adoption of the Regulation. The Regulation imposed a cap of 500 personnel per registered company, although it seems that was not rigorously enforced, with a number of companies employing a higher number of personnel. This number is likely to increase in the coming months given increased insecurity due to the growing insurgency attacks. The number of PMSCs will also increase to match the deployment of additional military forces as announced by the American President with the new United States strategy for Afghanistan. Already by August 2009, the total number of PMSC personnel contracted by the United States Department of Defense had increased by 19 per cent. At the end of October 2009, the Working Group was informed by the Government of Afghanistan that, with the increase in registered companies from 39 to 52, 24,690 personnel were operating in Afghanistan, of whom 19,928 were nationals and 4,772 international employees. … According to data of the Kabul Police, 35 private security companies possessed 4,968 units of registered weapons of various types in 2008 (registered under the names of 1,431 employees). The police authorities informed the Working Group that private security companies possess no fewer than 44,000 registered and unregistered weapons. A total of 17,000 weapons were confiscated by the Ministry of the Interior (MoI) within the framework of the DIAG (Disbandment of Illegal Armed Groups) programme, while another 18,000 were officially registered as belonging to 39 licensed companies. The Comprehensive Regulation adopted in February 2008 led to the licensing of 39 Afghan and foreign companies and the registration of their personnel and weapons. Of the 39 companies, 18 were Afghan owned and 21 were foreign or international, with 10 registered in the United States, 8 in the United Kingdom and 3 in other countries. Who are the companies? They are: Country of origin/ Name of company Afghan (18) ARGS, Asia Security Group (ASG), Burhan Security Service, Commercial Security Group (Guards Service) CSG, Good Knight Security Services, IDG Security, ISS (also known as SSI) – International Specialized Services, Kabul Balkh Security Services, Khorasan Security, NCL Holdings LLC., PAGE Associates, Pride Security Services, Shield, Siddiqi Security, SOC – Afg, Tundra SCA, WATAN Risk Management, White Eagle Security Services UK (10) Aegis Defense Services Ltd, ArmorGroup Services, Blue Hackle, Control Risks (CR), Edinburgh International, Global Risk Group, Hart Security, Olive Group, Saladin Security Afghanistan, TOR US (8) Xe Services/Blackwater USA, DynCorp International, EODT Technologies Inc./GSC, Four Horsemen/ARC, REED Inc., RONCO, Strategic Security Solution International Afghanistan (SSSI), US Protection and Investigations (USPI) Other (3) Australia: Compass Canada: GardaWorld (as Kroll) Dubai: UNITY-OSG Interestingly, or perhaps better put, ironically, considering the example and claims of some other PMSC trade associations who love to talk about the high ethical standards they require of their member companies, the report notes: Following the example of Iraq and the establishment of a Private Security Company Association of Iraq (PSCAI) “to discuss and address matters of mutual interest and concern to the industry conducting operations in Iraq”, the main international companies in Afghanistan have been grouped together in a Private Security Company Association of Afghanistan (PSCAA). However, the PSCAA Chairman told the Working Group that PSCAA had not been registered formally as an association or an NGO in accordance with national laws and remained more of an informal club or network of international security companies. Its influence and role have remained limited to preserving the interests of the companies and it has not adopted a code of conduct for the industry and does not monitor the conduct of its members.

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Ron Burkle Testifies That He Doesn’t Want To Buy Barnes & Noble, Is ‘Shocked’ By Poison Pill Plan

July 9, 2010

WILMINGTON, Del. — Billionaire Ron Burkle testified Thursday that he doesn’t want to buy Barnes & Noble Inc. and was shocked when the bookseller adopted a poison pill plan after he increased his stake in it. Burkle was the first witness called in a Delaware Chancery Court trial in which his Yucaipa Cos. is challenging the shareholder rights plan adopted last year. Under the plan, an investor can’t buy more than 20 percent of the company’s shares without board approval. Doing so would allow other Barnes & Noble shareholders to buy stock at a steep discount. Burkle, who increased his ownership stake in New York-based Barnes & Noble last year to about 18 percent, said the rights plan creates an unfair playing field that favors the controlling Riggio family, which owns more than 30 percent of the company’s common stock. Burkle, who wants to see changes in Barnes & Noble’s corporate governance, also alleges that the rights plan interferes with his ability to communicate with other shareholders to gauge their interest in a possible proxy contest to elect three new directors at the company’s annual meeting, which is scheduled to be held by Sept. 30. “We are sitting in a company that we think the rules are kind of unfair and unclear,” said Burkle, who testified that he increased his stake in Barnes & Noble because he believes its stock is undervalued. In the lawsuit, Yucaipa argues that it should be allowed to buy up to 30 percent of Barnes & Noble stock, similar to the amount held by company chairman and former CEO Leonard Riggio, without triggering the poison pill. Riggio is among the witnesses scheduled to testify when the trial resumes Friday. Gregory Taxin, founder of a proxy advisory firm for institutional investors, testified that it was unusual for a company where insiders control a voting bloc of more than 30 percent to adopt a poison pill or lose a proxy contest, even against someone with Burkle’s deep pockets. “These proxy fights are close, so it makes a difference if you start off at a big disadvantage,” he said. But Patricia Higgins, one of six independent directors on Barnes & Noble’s board, defended the adoption of the poison pill, saying the board was concerned that Yucaipa might try to wage a proxy fight or join with other shareholders to try to gain control of the company without paying a premium to other shareholders. Higgins said the board had “a robust discussion” and sought advice from outside counsel before adopting the plan. The company has said it would submit the poison pill plan for ratification by shareholders within one year, but Higgins said no date has been set for the vote.

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Michael Tasner: Virtual Reality Worlds: The Hows and Whys of This Unique Marketing Universe

July 8, 2010

Marketing using virtual reality worlds and methods is one of the more advanced Web-3.0 tactics that you can use to generate leads, close business, even to communicate with your team. It also takes the biggest time commitment, requiring the most work and the largest initial expense to get the platform designed. The upside: when put into place, these 3-D worlds can prove to be your most effective lead generator, sale closer, and cost saver. Let me take a step back now that I have your eyes curious, your ears more attentive and your full attention. Virtual reality worlds are just that. They are 3-D, Web-based communities that allow interaction among users and devices by way of the Internet. In general, virtual reality has a variety of uses. The whole intent of virtual reality is to convince you and your mind that you’re actually there, alive in this make-believe world. It brings the experience and interaction to life, even though you are behind a computer or another device and not there live, in person. Picture this: •3-D people walking around, interacting and talking. They don’t really exist, but they represent people who do in some way. • Communication using webcams, headsets, microphones and text chat. • People from all walks of life and from around the world who might never have met otherwise. • Houses decked out with all the latest electronics. • The ability to walk around, drive cars, purchase goods and services and do pretty much anything you would do in your actual life. • A world that seems so real, you start thinking it is real. Sometimes your mind continues to believe this can’t be real, it isn’t real, and it’s fake. It will take some conditioning of your mind (after you start engaging in these virtual worlds) to understand the concept. Here are some of the common myths of virtual reality worlds: • Everyone is fake or acts fake. Eighty-four percent of people reported that when they join the various virtual worlds, they create people — avatars — that represent themselves. Yes, that does leave 16% of avatars who are not entirely representative of their true selves. Typically these people make minor adjustments, rather than entire modifications of their real persona. • It’s nowhere near real life. Many times this is more like real life than your own real life. People host parties and business events. Attend trainings. Interview for jobs. Shop. Practice foreign languages. Work in global teams. All virtually. • It’s only for kids. The average age across most virtual reality worlds is just over 30. The only thing to do in these communities is play games. Yes, you can play games, but this is only a small fraction of what’s done in these worlds. Why should you care? Here are the key driving factors to the rise in virtual reality usage: • Limited time. • Less discretionary income (across the map). • Further adoption of the Web by everyone, including consumers, businesses and even the government. • It’s user-generated content. People, businesses and agencies are continuing to move to using virtual reality worlds because they are tired of traveling, have less money to spend on travel, and are realizing the power associated in these worlds. My motto is, “Essentially everything that can be done in person can be done over the Web using various technologies.” This is the concept that people are finally starting to understand. Everything continues to move to the web. So instead of simply resisting, both consumers and businesses are starting to jump on the bandwagon. An additional factor that has helped the rise of virtual reality worlds is their ease of use. Two to three years ago you needed to have a very fast computer and connection just to view one of these worlds. Today things open up much quicker and are much more intuitive. Anything you would want to do in person (yes, everything) can be done over the Web in the comfort of your own home or office. Why do you think Amazon.com had one of its best holiday seasons ever in 2008, while Circuit City closed its doors? Granted, there were a variety of outside factors as to why Circuit City failed. But from the customer’s perspective, if I can buy the same products on Amazon.com and save time and money (including sales tax and shipping charges), there is absolutely no need for me to visit a real store, deal with a salesclerk who probably doesn’t know what he’s talking about, stand in line, and risk having my credit card information misappropriated. And so, virtual reality-world usage continues to climb. According to The Gartner Group, it’s anticipated for over 250 million people to be in virtual worlds by 2011. There are hundreds of popular virtual communities and worlds with thousands of users in existence that are much less popular. Let’s zero in on the most popular ones that you need to be concerned with. There are a variety of common threads among most virtual worlds: • Typically they are run by user-generated content rather then people at the particular company adding content. • Users can purchase and own virtual land. • Currency can be exchanged and typically needs to be converted. • There are various e-commerce applications and functionality so you’re able to buy products and services in real time. • They are regulated to comply with the various, real, international laws. Here are some of the virtual-world terms you should be aware of: • Avatars: The term is derived from Sanskrit and relates to a “mental traveler” in Indian fairy tales. In the virtual world, it is the character you use to represent yourself and communicate with others. • Community: The people or residents who inhabit the virtual space. • Currency: Most of the virtual worlds have their own form of currency which typically can be converted into USD or other forms of real money. • Emotes: Expressing emotions in a virtual world (laughing, crying, smiling, etc.). • Grid: The technology and platform behind the virtual world. • Latency: The lag of movements in motion. It’s measured in the delay of the actual change of position versus the response time. The faster your computer and Internet connection, the lower the latency you will experience. • Teleport: The ability to fly to another location in the virtual space. • Universe: The collection of all entities and the space they are embedded in for a virtual world. Each virtual reality site has it’s own “universe” so to speak. Here are some of the most popular and growing Virtual Reality Worlds: SecondLife.com Let’s start with the community that has received the most media attention. SecondLife.com does not have the largest amount of registered users, but it has received more media coverage than most of the other major players as they have poured money into PR and have also had some notable people use their site. Second Life was launched in June 2003 by Linden Labs. It allows its residents to interact with each other, socialize, conduct business, and so on, across its grid. You must be 18 or older to use Second Life, and between the ages of 13 and 18 to use Teen Second Life. This is an important distinction for marketing purposes to know that users are 18 and older. They have over 15 million registered users. Registration is free for personal use. If you want to purchase land, there are monthly fees ranging from $5 to $295 per month, depending on the amount of space you are looking to purchase. For $295, you can have your own private island. A big advantage to purchasing land is to start controlling the marketing space. Most of your competitors will not be on these virtual sites. Get your land before them. Much like the other virtual worlds that will be outlined below, currency can be exchanged. In Second Life the currency used is Linden dollars. The exchange rate from Linden dollars to USD and to other currencies varies based on market factors — buy and sell rates. There have been live concerts in Second Life, government embassies established and education and training going on pretty much 24/7, just to name a few of the applications. Keep a close watch on this virtual reality world, as it has the most potential for continued and massive growth. ActiveWorlds.com Active Worlds is a little bit different than the rest. It is a 3-D world platform with a browser that runs on Windows. (Yes, this helps Bill Gates’ wallet grow even larger!) Originally, Active Worlds’ programmers wanted to integrate a 3-D browser. Think of Firefox or Internet Explorer in 3-D. Instead, it has morphed into another Second Life. For consumers, they can play around with their avatar in one of the 1,000 different worlds across the platform, interacting with each other, playing games or purchasing goods and services. For businesses, this has been a solid platform to develop buzz, sell products, support customers and to provide demos and training. The advantage of ActiveWorlds.com over SecondLife.com is that the cost to develop a presence is easier and much less expensive. To develop a full-blown store on SecondLife.com you are looking at upwards of $5000-$10,000 or more. Your time to market will be much quicker than on SecondLife.com. They also are very business-centric. They understand virtual reality-world marketing is growing in popularity and have catered many of their offerings and support to businesses while making it effortless for consumers to buy They are trying to bring the Amazon.com experience to their virtual world! EntropiaUniverse.com Entropia Universe is in a different league than the rest as they have a real cash economy. Some consider this a good thing, others do not. Entropia Universe is an online, 3-D, virtual universe for entertainment, social interaction and trade, using a real-cash economy. The virtual world was developed by the Swedish software company MindArk, based in Gothenburg. What MindArk really understands is monetization. Instead of charging a subscription price, they use an alternate micropayment model, asking people to buy in-game currency (the PED) which then, in turn, can be exchanged back to USD. MindArk claims to offer the first virtual universe with a real-cash economy. They want people coming to the site to spend money, rather than just to be playing around. And this is stressed across their website and promotional materials. Entropia Universe has been quite busy attracting various businesses and even government entities. In May 2007, they were chosen by the Beijing Municipal People’s Government endorsed online-entertainment company, Cyber Recreation Development Corporation, to create a cash-based virtual economy for China. This is huge in terms of adoption and possible numbers. They have been working toward creating the largest virtual world ever. Their proposal was accepted over many others, most notably Second Life. This was a blow to Second Life as they assumed they were the front runner! Entropia Universe has a goal to attract 150 million users from around the globe. Even more impressive, they expect to generate over $1 billion annually in commerce. But this is not the go-to place for business meetings. Instead, it has been a good place for entrepreneurs to sell their E-Commerce products and services to consumers and businesses. But, to date, they have some new plans in the works to make the site less gaming-intensive and more centered on business. Check out the site for free and get a feel for it, but don’t make a major investment of your time or money just yet. The above is an adapted excerpt from the book “Marketing in the Moment: The Practical Guide to Using Web 3.0 Marketing to Reach Your Customers First” by Michael Tasner. The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy. Copyright © 2010 Michael Tasner, author of “Marketing in the Moment: The Practical Guide to Using Web 3.0 Marketing to Reach Your Customers First”

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T. Boone Pickens: OPEC Oil Is Still the Energy Issue

July 7, 2010

The Congressional Independence Day recess is here. The amount of time available to pass substantive legislation before both houses adjourn is dwindling. Between the end of the July 4th Recess and the August Recess, Congress will try to pass the financial reform bill, and the Senate will fulfill its Constitutional duties on Supreme Court nominee Elena Kagan. With all that, the single largest unfinished piece of business for the 111th Congress remains the adoption of a comprehensive energy bill. I have been around this business for a long time, and I understand that an energy bill is likely to contain a great deal of compromise on key issues. That’s the nature of the system — you have compromise to get the things you really need and serve what you believe to be the greater good. The debate surrounding the balance between our environmental and energy polices, while important, should not delay us from adopting legislation to reduce our dependence on OPEC oil. We must focus on the amount of oil we continue to import – day-in and day-out – to fuel our national fleets of cars, light trucks, and heavy-duty vehicles. Nobody disagrees on that one. We can talk about the need for more solar and wind farms to produce energy. I’m all for those. I’ve said a thousand times since we started working on the Pickens Plan that “I’m for anything American.” But wind, solar energy and seaweed won’t move a car, and batteries today won’t move an 18-wheeler. Approximately 70 percent of the oil we import is used for transportation. Heavy trucks use about one-third of that. This includes the eight million 18-wheelers, which move goods from ports to distribution centers and from distribution centers to factories and stores. It also includes the tens of thousands of refuse and recycling trucks as well as all those school and municipal buses. The provisions of the bi-partisan NAT GAS Act (H.R. 1835 and S. 1408) are specifically aimed at reducing our imports of OPEC oil. The NAT GAS Act would provide tax incentives to build a model for using domestic natural gas as a principal transportation fuel instead of imported diesel. It creates a test for building a domestic, heavy-duty truck fleet based on domestic natural gas through replacing trucks burning imported diesel during the normal course of fleet rotation. With unemployment stubbornly remaining above nine percent, the federal government should be looking for a sure-fire plan to create private sector jobs. The NAT GAS Act would jump-start the natural gas vehicle (NGV) industry in the United States, creating new jobs throughout the supply chain. When he accepted the Democratic nomination for President, then-Senator Barack Obama pledged to get America off Middle Eastern oil within ten years. Two of those years have already gone by. But we can, during the next eight years, meet his goal. President Obama can earn a place in history as the first president in more than 40 years to reduce our dependence on foreign oil. When Congress returns from its Independence Day recess, it must focus on America becoming less dependent on OPEC oil. We need a vote on energy legislation to make America stronger, safer, cleaner, and more prosperous by passing a bill including the provisions outlined in the NAT GAS Act.

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David Isenberg: From BP to BPMC: What We Should Learn from the Deepwater Horizon Disaster About PMSC

May 23, 2010

What does the Deepwater Horizon oil spill have to do with the private military and security contracting industry? At first glance, nothing at all. But philosophically it nicely illustrates one of the enduring debates about the PMC industry, i.e., just how free does one let the free market be and to what extent does and should government regulate PMSC activities. If your politics swing toward the right then you might consider it the latest culture war. Certainly Arthur C. Brooks, president of the American Enterprise Institute believes that is the case in this Washington Post op-ed he wrote, published yesterday. In his view: Those old battles have been eclipsed by a new struggle between two competing visions of the country’s future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise — limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose. Of course, if he thinks a marketplace that often trades in organized violence (i.e., security contracting) should be left to the marketplace, well, AEI, needs a new president; preferably someone who understands history. The reason we have nations in the first place was to take violence out of the private sector. But AEI’s free market philosophy is not the issue here. The state of regulation of the PMSC industry is. Consider what we have been finding out in the aftermath of the fire on and the sinking of the Deepwater Horizon rig and the subsequent unchecked spewing of the oil from the ocean floor. We have found that the Department of Interior’s Mineral Management Service was so cozy with the petroleum industry it was supposed to regulate that to an astonishing degree it let BP and other companies use the old Joe Isuzu car slogan as proof that it was complying with required regulatory law. In other words, BP was saying just trust us. Now consider the PMC industry. First, note that contrary to the claims of many critics, it is not an industry that doesn’t have to comply with laws. In fact, as industry supporters frequently note there are numerous laws (both national and international), regulations, and directives that companies have to follow, Like any other industry, some companies are extremely scrupulous in following them; others less so. Of course, not all these laws are relevant. Some of them have yet to be tested in court. Not all prosecutors are willing to use them, given the expense and difficulty of prosecuting a crime that may have taken place in another country. Some of the laws only apply contractors working for the U.S. military, so if you work for the State department you are out of bounds. Perhaps, even worse, unlike, say, the oil industry, there is no industry wide standard prescribing best practices. Someday in the future, after the oil slicks are dispersed, it many turn out that BP, Transocean, and Halliburton cut corners, but at least there were standards on the book with which they were supposed to comply. For example, the International Organization for Standardization has 26 standards for the petrochemical and natural gas industries. It has nothing for private military or private security. And there is no one government agency that has the responsibility for overseeing all PMSC companies. Remember, it is not the fault of the PMSC industry that there are not sufficient laws on the books that cover the type of situations it often finds itself in or that there are not enough, experienced people to enforce the laws. But the PMSC industry does not help itself when it argues that there are already sufficient laws on the books and that any new laws would be just an example of a burdensome government run amuck. Instead, industry supporters often says that because it complies with ethical standards put forward in voluntary codes of conduct devised by industry trade groups companies should be left alone to police themselves. In other words, just trust them. Uh huh. Yes, about that; PMSC codes of conduct, or exhortations to do the right thing, have become quite di rigueur in recent years. All the major PMSC trade groups, such as IPOA , BAPSC , and PSCAI have them or something similar. Should we be impressed? To answer that let’s look at a recent paper by law professor Simon Chesterman who is now at the Lee Kuan Yew School of Public Policy, National University of Singapore, as part of the New York University – School of Law Singapore Programme. In the interest of full disclosure I have a casual acquaintance with Prof. Chesterman. I presented a paper at a 2006 conference on the regulation of private military companies, he organized and contributed a chapter to a book ” From Mercenaries to Market: The Rise and Regulation of Private Military Companies ” he co-edited, published in 2007. Bear in mind that Prof. Chesterman is not an opponent or diehard critic of PMSC. He recognized that they have a role to play and are here to stay. He notes, for example, that the IPOA Code of Conduct, now in its twelfth iteration, includes expansive acknowledgement of the applicability of international humanitarian law and human rights. He writes: The limitations of voluntary codes of conduct were displayed when IPOA authorized the first investigation of one of its members. This took place a few weeks after the Nisour Square incident in September 2007, in which Blackwater personnel killed 17 Iraqi civilians. IPOA opened an investigation into whether Blackwater was in compliance with the code. Two days after the investigation was announced, Blackwater withdrew from the association entirely and announced that it was setting up its own association, the Global Peace and Security Operations Institute. The boilerplate website included a few platitudes but made it clear that Blackwater is the only member of this institute and that it does not have a code of conduct. IPOA’s code remains essentially untested. He also writes something that could be considered a rebuttal to AEI’s Arthur Brooks, even though it was obviously written long before. Markets can be an effective form of regulation, but operate best where there is competition, an expectation of repeat encounters, and a free flow of information. It is far from clear that any of these conditions exist for businesses in conflict zones, especially for those whose business is conflict. Demand often outstrips supply, as we saw in the scramble to fulfill multi-million dollar contracts in Iraq; this creates monopoly-type problems and reduces the potential leverage of the hiring agency to impose strong oversight provisions. Even where such leverage exists it may not be exercised because the hirer regards the contract as an exceptional event in the life of the nation that will not establish a precedent for future conduct. And even where there might be leverage and established relationships — for example in the many contracts issued by the U.S. Departments of State and Defense — there has been minimal public scrutiny or active efforts to avoid it. It is possible to shape that market, however. Scandal can be a useful discipline and has been encouraging the adoption of codes of conduct by bodies such as IPOA. This is, of course, self-serving: the creation of a “legitimate” business through professionalization and the creation of industry associations may distinguish reputable companies from cowboys, raising the cost of entry for competitors and enabling the charging of higher fees for similar services. But it may also point to the most promising way of dealing with an area in which governments have failed. Modest examples of this are the disbanding of Sandline and EO, and the more recent repositioning of Blackwater as Xe Services. None of this is a substitute for regulation intended to deter and punish abuse. Indeed, one might argue that poor regulation is worse than nothing, as it gives the illusion of accountability while taking away the impetus for reform. Yet focusing only on after-the-fact accountability, particularly in an environment where investigations will always be difficult and prosecutions unlikely, overlooks the role that regulation can play not just punishing companies for behaving badly but encouraging them to behave well. In a previous post I mentioned a recent law journal article by André M. Penálver, a student at Cornell University Law School. He also wrote something relevant to this discussion, “The relationship between the national government and big business of the Progressive Era teaches a valuable lesson in regulation: the state can only preserve the place of its democratic institutions against new concentrations of private power by growing its own state power.” After the Civil War, as industrialization swept society many observers, especially progressive Herbert Croly thought that that a large state presence would be necessary to defend the public interest from more dangerous private force. In 1903, at the behest of President Theodore Roosevelt, Congress established the Department of Commerce and Labor, which operated the Bureau of Corporations. In Roosevelt’s words, the Bureau would administer the law “with the firm purpose not to hurt any corporation doing a legitimate business–on the contrary to help it–and, on the other hand, not to spare any corporation which may be guilty of illegal practices, or the methods of which may make it a menace to the public welfare.” Subsequently, in 1910, about a year and a half after the end of his presidency, Theodore Roosevelt gave a “New Nationalism” speech on August 31, 1910, in Osawatomie, Kansas. “The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.” Assuming big business was to be a permanent fixture in modern America, only the federal government could leverage the proper amount of external control on these new interstate corporations. Just as corporations had centralized their activity, Roosevelt argued, so should the government. Might it be time for a Bureau of Private Military Contractors (BPMC)? Bully, as Teddy would say.

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David Isenberg: From BP to BPMC: What We Should Learn from the Deepwater Horizon Disaster About PMSC

May 23, 2010

What does the Deepwater Horizon oil spill have to do with the private military and security contracting industry? At first glance, nothing at all. But philosophically it nicely illustrates one of the enduring debates about the PMC industry, i.e., just how free does one let the free market be and to what extent does and should government regulate PMSC activities. If your politics swing toward the right then you might consider it the latest culture war. Certainly Arthur C. Brooks, president of the American Enterprise Institute believes that is the case in this Washington Post op-ed he wrote, published yesterday. In his view: Those old battles have been eclipsed by a new struggle between two competing visions of the country’s future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise — limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose. Of course, if he thinks a marketplace that often trades in organized violence (i.e., security contracting) should be left to the marketplace, well, AEI, needs a new president; preferably someone who understands history. The reason we have nations in the first place was to take violence out of the private sector. But AEI’s free market philosophy is not the issue here. The state of regulation of the PMSC industry is. Consider what we have been finding out in the aftermath of the fire on and the sinking of the Deepwater Horizon rig and the subsequent unchecked spewing of the oil from the ocean floor. We have found that the Department of Interior’s Mineral Management Service was so cozy with the petroleum industry it was supposed to regulate that to an astonishing degree it let BP and other companies use the old Joe Isuzu car slogan as proof that it was complying with required regulatory law. In other words, BP was saying just trust us. Now consider the PMC industry. First, note that contrary to the claims of many critics, it is not an industry that doesn’t have to comply with laws. In fact, as industry supporters frequently note there are numerous laws (both national and international), regulations, and directives that companies have to follow, Like any other industry, some companies are extremely scrupulous in following them; others less so. Of course, not all these laws are relevant. Some of them have yet to be tested in court. Not all prosecutors are willing to use them, given the expense and difficulty of prosecuting a crime that may have taken place in another country. Some of the laws only apply contractors working for the U.S. military, so if you work for the State department you are out of bounds. Perhaps, even worse, unlike, say, the oil industry, there is no industry wide standard prescribing best practices. Someday in the future, after the oil slicks are dispersed, it many turn out that BP, Transocean, and Halliburton cut corners, but at least there were standards on the book with which they were supposed to comply. For example, the International Organization for Standardization has 26 standards for the petrochemical and natural gas industries. It has nothing for private military or private security. And there is no one government agency that has the responsibility for overseeing all PMSC companies. Remember, it is not the fault of the PMSC industry that there are not sufficient laws on the books that cover the type of situations it often finds itself in or that there are not enough, experienced people to enforce the laws. But the PMSC industry does not help itself when it argues that there are already sufficient laws on the books and that any new laws would be just an example of a burdensome government run amuck. Instead, industry supporters often says that because it complies with ethical standards put forward in voluntary codes of conduct devised by industry trade groups companies should be left alone to police themselves. In other words, just trust them. Uh huh. Yes, about that; PMSC codes of conduct, or exhortations to do the right thing, have become quite di rigueur in recent years. All the major PMSC trade groups, such as IPOA , BAPSC , and PSCAI have them or something similar. Should we be impressed? To answer that let’s look at a recent paper by law professor Simon Chesterman who is now at the Lee Kuan Yew School of Public Policy, National University of Singapore, as part of the New York University – School of Law Singapore Programme. In the interest of full disclosure I have a casual acquaintance with Prof. Chesterman. I presented a paper at a 2006 conference on the regulation of private military companies, he organized and contributed a chapter to a book ” From Mercenaries to Market: The Rise and Regulation of Private Military Companies ” he co-edited, published in 2007. Bear in mind that Prof. Chesterman is not an opponent or diehard critic of PMSC. He recognized that they have a role to play and are here to stay. He notes, for example, that the IPOA Code of Conduct, now in its twelfth iteration, includes expansive acknowledgement of the applicability of international humanitarian law and human rights. He writes: The limitations of voluntary codes of conduct were displayed when IPOA authorized the first investigation of one of its members. This took place a few weeks after the Nisour Square incident in September 2007, in which Blackwater personnel killed 17 Iraqi civilians. IPOA opened an investigation into whether Blackwater was in compliance with the code. Two days after the investigation was announced, Blackwater withdrew from the association entirely and announced that it was setting up its own association, the Global Peace and Security Operations Institute. The boilerplate website included a few platitudes but made it clear that Blackwater is the only member of this institute and that it does not have a code of conduct. IPOA’s code remains essentially untested. He also writes something that could be considered a rebuttal to AEI’s Arthur Brooks, even though it was obviously written long before. Markets can be an effective form of regulation, but operate best where there is competition, an expectation of repeat encounters, and a free flow of information. It is far from clear that any of these conditions exist for businesses in conflict zones, especially for those whose business is conflict. Demand often outstrips supply, as we saw in the scramble to fulfill multi-million dollar contracts in Iraq; this creates monopoly-type problems and reduces the potential leverage of the hiring agency to impose strong oversight provisions. Even where such leverage exists it may not be exercised because the hirer regards the contract as an exceptional event in the life of the nation that will not establish a precedent for future conduct. And even where there might be leverage and established relationships — for example in the many contracts issued by the U.S. Departments of State and Defense — there has been minimal public scrutiny or active efforts to avoid it. It is possible to shape that market, however. Scandal can be a useful discipline and has been encouraging the adoption of codes of conduct by bodies such as IPOA. This is, of course, self-serving: the creation of a “legitimate” business through professionalization and the creation of industry associations may distinguish reputable companies from cowboys, raising the cost of entry for competitors and enabling the charging of higher fees for similar services. But it may also point to the most promising way of dealing with an area in which governments have failed. Modest examples of this are the disbanding of Sandline and EO, and the more recent repositioning of Blackwater as Xe Services. None of this is a substitute for regulation intended to deter and punish abuse. Indeed, one might argue that poor regulation is worse than nothing, as it gives the illusion of accountability while taking away the impetus for reform. Yet focusing only on after-the-fact accountability, particularly in an environment where investigations will always be difficult and prosecutions unlikely, overlooks the role that regulation can play not just punishing companies for behaving badly but encouraging them to behave well. In a previous post I mentioned a recent law journal article by André M. Penálver, a student at Cornell University Law School. He also wrote something relevant to this discussion, “The relationship between the national government and big business of the Progressive Era teaches a valuable lesson in regulation: the state can only preserve the place of its democratic institutions against new concentrations of private power by growing its own state power.” After the Civil War, as industrialization swept society many observers, especially progressive Herbert Croly thought that that a large state presence would be necessary to defend the public interest from more dangerous private force. In 1903, at the behest of President Theodore Roosevelt, Congress established the Department of Commerce and Labor, which operated the Bureau of Corporations. In Roosevelt’s words, the Bureau would administer the law “with the firm purpose not to hurt any corporation doing a legitimate business–on the contrary to help it–and, on the other hand, not to spare any corporation which may be guilty of illegal practices, or the methods of which may make it a menace to the public welfare.” Subsequently, in 1910, about a year and a half after the end of his presidency, Theodore Roosevelt gave a “New Nationalism” speech on August 31, 1910, in Osawatomie, Kansas. “The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.” Assuming big business was to be a permanent fixture in modern America, only the federal government could leverage the proper amount of external control on these new interstate corporations. Just as corporations had centralized their activity, Roosevelt argued, so should the government. Might it be time for a Bureau of Private Military Contractors (BPMC)? Bully, as Teddy would say.

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European Union Finance Chiefs to Resist Obama’s Plans for Banking Overhaul

February 15, 2010

By Meera Louis and Jurjen van de Pol Feb. 15 (Bloomberg) — European Union finance ministers are uniting to oppose President Barack Obama ’s proposal to limit banks’ size and risk-taking, saying his plan may run counter to EU policy, according to a draft document. Their position, which they will ratify at a two-day meeting starting today, comes after Obama last month urged the adoption of the so-called “Volcker rule,” named for former Federal Reserve Chairman Paul Volcker . The plan would bar commercial banks from owning hedge funds and limit how much they can trade for their own account. The finance officials gathering in Brussels will express “their concern that the application of the ‘Volcker’ rule in the EU may not be consistent with the current principles of the internal market and universal banking,” the document obtained by Bloomberg News said. “Any policy choice should avoid pushing risks to other parts of the financial system.” The resistance underscores political divisions over how to overhaul banking regulations to prevent a repeat of the crisis that forced taxpayers to prop up the financial system. While leaders have called for a Group of 20 initiative, the U.S., Britain, and France are forging their own policies to limit compensation and risks. At a meeting this month in Canada, Group of Seven finance ministers signaled they are rallying around a plan to introduce a levy on banks if it can be applied worldwide. The Feb. 10 draft, entitled “Issues note on the most recent proposals of the U.S. administration in respect of Systemically Important Financial Institutions and the introduction of a financial crisis responsibility fee,” was prepared by a committee of officials from finance ministries, the European Central Bank and the European Commission . EU Proposals The three-page memo also considered proposals including levying a stability fee on banks and creating national or pan- European funds for future bailouts. Swedish Finance Minister Anders Borg last month presented a plan to create a fund for future banking crises. In contrast, the Netherlands’ Wouter Bos last month wrote a letter to his counterparts welcoming Obama’s proposals and calling for a “serious debate” on the U.S. plan at the meeting in Brussels. Jean-Claude Juncker , who heads the group of euro-area finance ministers, last month voiced concern about a common approach on bank levies given that taxes are a matter dealt with at the national level of the 27-member bloc. To contact the reporters on this story: Meera Louis in Brussels at mlouis1@bloomberg.net ; Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net

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Dollar Rises Against Euro as Debt Woes in Greece, Dubai Spur Safety Demand

February 14, 2010

By Yasuhiko Seki Feb. 15 (Bloomberg) — The euro dropped against the dollar amid concern Greece’s debt problems will undermine the region’s economic recovery. The 16-nation euro last week touched an eight-month low versus the greenback ahead of a two-day meeting of European Union finance ministers beginning today that may provide details of a Greece bailout. The dollar may climb for a second day against the yen before a report tomorrow forecast to show manufacturing in the New York region expanded, adding to signs that the world’s largest economy is on the mend. “Concerns over the debt situation in Greece will keep a lid on the euro,” said Toshiya Yamauchi , manager of foreign- exchange margin trading at Ueda Harlow in Tokyo. “People are monitoring closely if EU finance ministers can hammer out a decisive rescue plan.” The euro fell to $1.3623 as of 8:55 a.m. in Tokyo from $1.3632 in New York on Feb. 12 when it reached $1.3532, the lowest since May 19. The euro was at 122.65 yen from 122.62 yen in New York. The dollar traded at 90.05 yen from 89.96 yen on Feb. 12. Futures traders last week increased bets to a record level that the euro will decline against the U.S. dollar. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, the net position, was 57,152 on Feb. 9, compared with 43,741 a week earlier, figures from the Washington-based Commodity Futures Trading Commission show. Volcker Opposition EU officials are uniting to oppose President Barack Obama’s proposed limits on banks’ size and risk-taking, according to a draft document. Their position, which they will ratify at a two-day meeting starting today, comes after Obama last month urged the adoption of the so-called “Volcker rule,” named for former Federal Reserve Chairman Paul Volcker. European officials gathering in Brussels will express“their concern that the application of the ‘Volcker’ rule in the EU may not be consistent with the current principles of the internal market and universal banking,” a document obtained by Bloomberg News said. “Any policy choice should avoid pushing risks to other parts of the financial system.” The European Central Bank is seeking tougher steps than most EU finance ministers for Greece’s budget-deficit cuts, the Handelsblatt newspaper reported yesterday, citing a draft EU document listing possible measures. The ECB demands include increases in value-added, energy and luxury taxes and additional cost cuts, according to Handelsblatt. Investor Confidence The EU plan, brokered by German Chancellor Angela Merkel , Greek Prime Minister George Papandreou and European Central Bank President Jean-Claude Trichet , called for closer monitoring of the Greek economy . Greece, representing 2.7 percent of the trading bloc’s $13 trillion economy, posted a budget deficit of 12.7 percent of gross domestic product in 2009, more than four times the EU’s 3 percent limit. Adding to pressure on the euro, a report tomorrow forecast to show German investor confidence declined. The ZEW Center for European Economic Research’s index of investor and analyst expectations, which aims to predict developments six months ahead, fell to 41.0 in February from 47.2 in the previous month, according to a Bloomberg News survey of economists. The dollar may gain against the yen as economists surveyed by Bloomberg News forecast the Federal Reserve Bank of New York’s general economic index rose to 18.0 in February from 15.92 in the previous month. Fed Rates Fed Chairman Ben S. Bernanke said last week the central bank may raise the discount rate “before long” as economic stimulus measures are unwound. Futures trading in Chicago last week showed a 49 percent chance that the Fed will raise its target lending rate by at least a quarter-percentage point by its September meeting, up from 43 percent a week ago. “While the Fed’s exit strategy is drawing close attention, the Bank of Japan and the ECB are nowhere near an exit,” said Masashi Nakamura, a Tokyo-based economist at Mizuho Research Institute Ltd. “This outlook will give the dollar some advantage over the yen and the euro.” Japan’s economy expanded an annualized 4.6 percent in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg News was for growth of 3.5 percent. To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net

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Paulson Says U.S. Was `Close’ to Financial Collapse, Bailout Unavoidable

February 2, 2010

By Michael McKee and Peter Cook Feb. 2 (Bloomberg) — The U.S. economy came “very close” to collapsing into a second Great Depression and the government had no alternative to bailing out financial firms, former Treasury Secretary Henry Paulson said. “There was a time when the credit markets had essentially frozen and when blue chip industrial companies were having trouble raising money,” Paulson said in an interview today on Bloomberg Television. “I knew then we were on the brink.” “We easily could have had unemployment of 20 percent,” he said. “That would have meant millions of additional jobs lost, millions of additional homes lost, trillions more lost in savings. It would have been terrible.” Paulson, who has just published his memoir, “On The Brink,” said he understands the criticisms of the bailouts of financial institutions such as Bear Stearns Cos. and American International Group Inc. “In this country, none of us like bailouts,” he said. “I hated the things we had to do. But they were far better than the alternative.” The former secretary said it was harder for policy makers and legislators to deal with the crisis, which deepened after Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008, because it came just before the election. Election Loomed “The credit crisis couldn’t have come at a worse time,” Paulson said, because members of Congress were reluctant to vote for helping the financial institutions, he said. “When the markets froze, I knew with certainty we were going to see this negative impact many weeks down the road,” Paulson said. “But many members of Congress hadn’t yet seen it in their districts.” The failure of Lehman Brothers was a particularly tough moment, Paulson said. “If you’ve run a Wall Street firm like I have, it’s just a horrible thing to see a firm fail like that and know what is going to happen to the economy.” Unlike Bear Stearns, which was acquired by JPMorgan Chase & Co. with federal assistance, no buyer could be found for Lehman, which meant the government couldn’t step in, Paulson said. “It would have been loaning into a run” on the bank, he said. “There was not going to be essentially a business to lend to. The Fed had no legal power to lend” under those circumstances, he said. Lehman’s Collapse Among those who lost their jobs was Paulson’s own brother, Richard, who worked for Lehman in Chicago. “Sure, I talked with him,” the former Treasury secretary said. “It was very sad for him. He had significant losses. This is nothing that anybody wanted.” Paulson praised the officials he worked most closely with during the crisis. He described Federal Reserve Chairman Ben S. Bernanke as “really bright, a great economist, a great economic historian.” “Bernanke was able to defy bureaucratic strictures and do what had to be done at a time when we didn’t have other authorities,” Paulson said. “I sleep better at night knowing he is chairman of the Fed.” ‘Cool’ Geithner Timothy F. Geithner , the current Treasury secretary who was then president of the Fed Bank of New York, is “a great crisis manager, cool and calm under pressure,” Paulson said. While Geithner has been subject to criticism of his leadership at Treasury, Paulson said he is “just doing a superb job.” As a leader during a crisis, “you have to do some very unpleasant things and you are going to take some heat for that,” Paulson said. “It’s hard to get a lot of credit for preventing a calamity that no one sees.” Paulson declined to say whether JPMorgan chief executive Jamie Dimon would make a good successor to Geithner. He praised Dimon as a “very strong leader” who was able to pull together a difficult deal to buy Bear Stearns over a weekend. “We’ve got a good Treasury secretary now,” Paulson said. “Jamie is a talent.” New financial regulatory rules need to include the creation of a systemic-risk regulator and the give the government the ability to dismantle failed institutions in an orderly way, Paulson said. President Barack Obama on Jan. 21 urged the adoption of what he called the “Volcker rule” under which commercial banks would be prohibited from owning hedge funds and limited in how much they could trade for their own account. Paul Volcker , who headed the Fed from 1979 to 1987, is scheduled to testify before the Senate Banking Committee today on the plan. Paulson said consideration of the Volcker rule could “divert focus from what really needs to be done” because it’s “aimed at one type of financial institution, and what we absolutely need is a broad approach.” He said his concern “is that we do things that confuse markets, confuse Congress and don’t get things done.” To contact the reporter on this story: Michael McKee in New York at mmckee@bloomberg.net .

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Bill Bartzak: Health Care Reform: What’s Missing From the Debate?

January 19, 2010

Although the topic of efficiency has been surprisingly absent from the national debate on healthcare reform, a recent study conducted by Milliman Inc. estimated the nation’s healthcare system could save an estimated $86 billion annually if it were to adopt only one procedural change: utilizing existing technology to automate claim filing, claim status inquiries, referrals, pre-authorizations and eligibility. Eleven billion of the $86 billion would come just from converting paper-filing physicians to electronic healthcare claim filing offices, estimated to save more than $40,000 per healthcare provider. And, these dollar savings don’t even take into account the extra benefits that would accrue from faster payments, faster turnaround on claim errors, improved cash flow, patient satisfaction and more. With so many benefits, why has the adoption of electronic filing been so slow? According to the American Medical Association, approximately 25 percent of all healthcare claims are still submitted on paper. The majority of these claims are being submitted by smaller practices of 1-5 providers, whose reluctance is costing insurers billions of dollars in unnecessary expenses while driving up unnecessary expense for the providers as well. In the infancy of electronic filing, there were plenty of reasons why providers were slow to implement, ranging from the availability and cost of broadband service, to the lack of entrenched forms and standards, to compatibility with practice management software. Today, most of those challenges have been addressed and the biggest reason for not converting to electronic submission is force of habit. Habits, as we know, are hard to break unless one has no choice or is given an incentive to do so. The state of Minnesota has taken the “no choice” approach, having made the decision to no longer allow paper claims to be filed in the state. Other insurers are beginning to do something similar in their new provider contracts. Perhaps it is time to draw a line in the sand. Perhaps it is time to force the savings. The U.S. government, by comparison, has generally taken the incentive approach, providing incentives and stimulus packages to lead to desired outcomes. In fact, the government is planning to make up to $45,000 available per physician over a 2-7 year period to offset the costs of EHR technology beginning in 2011. Yet, a stimulus of only $100 per paper-submitting provider is all that would be needed to cover the cost of software to get a practice up and running with electronic claims capabilities. This $100 stimulus would have the potential to save billions. Forgetting for a moment about cost savings, there is another reason why providers should get accustomed to working electronically. The fact is, electronic connectivity is moving from just a cost savings opportunity to a healthcare necessity. If the healthcare system hopes to accommodate new innovations, emerging technologies and planned changes in healthcare, connectivity becomes ground zero. As many know, electronic health records, new diagnostic codes and changes in standardized forms are all planned over the next two years. How can the system expect a provider to participate in the electronic transfer of medical records if that provider hasn’t yet become comfortable with the electronic transmission of medical claims – the simplest and most rudimentary function they could perform? Expecting this would be akin to expecting consumers to embrace online banking even if they had never sent an e-mail. So the challenge, and the opportunity, is before the U.S. healthcare system. There must be a way to convert paper-submitting providers to electronic-submitting providers not only as a means of realizing tremendous cost savings, but also as a necessary step to allow them to embrace the new and important technologies on the horizon. Time shouldn’t be spent talking about electronic health records until healthcare professionals are comfortable using technology. The good news is, getting them to that point shouldn’t be very difficult. Once comfortable there, the floodgates to new technology can be opened, benefiting both the providers and their patients. Bill Bartzak is founder, president and CEO of MD On-Line , a leading provider of electronic data interchange (EDI) solutions that facilitate the critical connection between doctors and payers.

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Video: Saxo’s Christensen Says Climate Policy a Risk to Growth

December 18, 2009

Dec. 18 (Bloomberg) — Lars Seier Christensen, chief executive officer of Saxo Bank A/S, talks about the economic risks posed by the adoption of climate change policies. He speaks with Bloomberg’s Mark Barton from Copenhagen.

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Senate Independent Lieberman Says He May Be Ready to Back Health Package

December 15, 2009

By Kristin Jensen Dec. 15 (Bloomberg) — Connecticut Senator Joseph Lieberman , an independent who caucuses with the Democrats, said he may be ready to vote for U.S. health-care legislation if lawmakers drop a planned government insurance program. “We’re heading in the right direction,” Lieberman told reporters today. He said he has wanted to vote for the bill all along, though he objected to the idea of a new government-run program or an expansion of the Medicare program for the elderly. Senate Democrats said yesterday they are leaning toward dropping both ideas from the legislation. They need all 60 votes controlled by their party, including Lieberman’s, to win passage if Republicans remain united against it. Senator Susan Collins , a Maine Republican who is considered a possible cross-party ally, said she can’t support the legislation even with the changes she has heard about. She said she is concerned about savings that Democrats get from the Medicare program to help pay for the legislation. “This bill is getting better, but it’s still too deeply flawed for me to support it,” Collins told reporters. She said she is proposing amendments, though their adoption wouldn’t be enough to get her vote on their own. “I think something is going to pass and I’d like to make that bill as good as possible even if ultimately it’s not a bill that I can support,” Collins said. To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net

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Justin R. Rattner: Innovation in the 21st Century: Keeping the US Competitive

November 16, 2009

Today, Newsweek and Intel released the findings from a survey on innovation and the economy. The good news: despite one of the deepest recessions in history, Americans have an undiminished faith in technology and innovation as the primary engines of economic growth. The bad news: most Americans say that the downturn has hurt the U.S.’s ability to innovate and they have significant doubts about our ability to maintain leadership. While pursuing game-changing technology innovation is my charge at Intel, I am acutely interested in supporting this undiminished faith of the American people and am working tirelessly to relieve their doubts about our ability to compete on the global stage. Too often I find that organizations of all types are told by their management or their customers to be more innovative. They quickly embrace the idea, but then struggle to understand its true meaning and are clueless about how to achieve it. Having spent my entire career in R&D, I’ve learned that innovation is a type of human endeavor, a process. If we as a nation fail to understand that innovation is this long, often torturous process, we will find ourselves taking a back seat to those countries that learned how to innovate by studying us in great detail, but then took the bold steps to make innovation their hallmark instead of ours. If we are not vigilant, the students will have become the masters. Being an optimist, something essential to being a successful innovator, I believe we can return to our cultural roots and make innovation a process to be once again embraced and nurtured. Doing so will require the kind of investment environments, R&D strategies, and management know-how to keep us at the forefront of innovation and reassert our competitiveness in the rapidly changing, global economy. A 21st Century Model of Cooperation between Government, Industry, and Academia The old 20th century research model is all but dead. The big “think tank” labs that did research for the sake of doing research, such as Bell Labs (invented information theory and the transistor) and the Xerox Palo Alto Research Center (invented the Ethernet, laser printing, and the window-mouse user interface) are now just shadows of their former selves. After World War II, much of what energized our economy was driven by industrial research and development organizations continuing the innovation process by taking the fundamental ideas from academia or the big think tanks and turning them into truly useful products and services. Indeed, the Internet may have been invented at UCLA and Stanford, with funding by the Defense Research Projects Agency, and the World Wide Web at CERN and the University of Illinois with funding from NSF, but it took industrial R&D at companies such as Cisco and Google to make the net and the web the global reality they are today. In the 21st century, we advocate the adoption of a more contemporary research model, bringing together the best of world-class university research and industrial R&D with critical government support in a phased approach that yields the best outcome for all three sectors and drives a healthy pipeline of innovative American products and services to the global market well into the new century. Can Government Alone Drive Innovation? According to the survey, nearly half of Americans also want the government to offer incentives to spur innovation and a third think a national innovation initiative would be very effective. Where is the next invention on the level of the integrated circuit or the Internet going to come from, and how can we be sure it creates high paying jobs here at home? For the 21st century R&D model to work we also must commit to increased funding for R&D in both the public and private sectors. While the call we often hear is for unilateral increases in government R&D funding and tax policy, I guarantee you that alone will not keep us competitive. The decreasing amount of industrial investment in R&D must be of equal concern. A two-year old study by the Chinese government of its own electronics industry revealed that very few companies in China spend more than one percent on R&D. Are you surprised that most of those companies are not profitable? The few that spend ten percent or more on R&D, more typical of U.S. electronics companies such as Intel, do make money. There is a powerful lesson to be learned from this study. Government funding and tax policy must be matched by industrial R&D investments. One without the other is a recipe for failure. Science & Engineering Education in the U.S. is Critical The doubts that Americans expressed in the survey about the ability to maintain leadership in innovation is shared by Chinese respondents. To no one’s surprise, the Chinese believe that the U.S. has a significant advantage today, but they expect to take the mantle of leadership over the next 30 years. In contrast, Americans say their doubts are largely based on a perceived gap with other nations in the quality of math and science education, with 82% thinking that the U.S. lags behind other countries. While it’s true that we do lag, the good news is that the trend for American student is positive. The 2007 Trends in International Mathematics and Science Study (TIMSS) ranked U.S. fourth and eighth grade student 12th and 10th world-wide in mathematics, up dramatically from previous surveys. We need to do whatever it takes for as long as it takes until we’re on par with the Chinese. Immigration Policy Helps Power U.S. Innovation Since innovation begins with an idea in response to a need, the next big product or service idea will hopefully come from the mind of a current American or an American-trained student. Given that I’m responsible for six of Intel’s international research labs, I can say first hand that the U.S. doesn’t have an exclusive deal on smart people. They are everywhere on the planet and most of them don’t live in the U.S. It doesn’t help to chase them out of the U.S. once they finish their academic training. We should give them a job offer and a hiring bonus the day they get their PhDs. Tuning Up for the Global Battle With 75% of Americans believing that technological innovation is more important than ever in driving U.S. economic success, the significance of developing our innovators of tomorrow is more pronounced than ever. The space race was basically a dual between two countries. Now we are engaged in a truly global competition over who will have the best ideas and who will turn those ideas into products, services, and high-paying jobs. It’s amazing to think that with an enlightened combination of cutting edge academic research and industrial R&D, well-informed government policy and support, and continuous improvement of math and science outcomes, the next big thing is on the horizon — something that will change our lives and better our world. In that: not just reason to have faith, but a reason to act and act quickly. Motivating the Newsweek-Intel Survey Intel sponsored this survey with Newsweek to highlight key areas of interest around innovation. In the current economy, there is nothing more important than driving change that will create jobs and build confidence among the American people. Intel is also sponsoring a conference in Washington, DC to explore what American business, governmental and academic institutions, NGOs, and private citizens can do to invigorate our culture of innovation that will drive economic recovery and ensure long-term, sustainable growth. More information about the survey . More information about the Innovation Economy conference .

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Realpoint Is Approved by Regulators as Alternative to Moody’s, S&P on CMBS

September 23, 2009

By Andrew Frye Sept. 23 (Bloomberg) — State insurance commissioners, seeking an alternative to rating firms Moody’s Investors Service and Standard & Poor’s, approved Realpoint LLC to evaluate commercial mortgage-backed securities in companies’ portfolios. The ruling by the National Association of Insurance Commissioners means state regulators can rely on Realpoint in determining how much capital must be held by insurers, Scott Holeman , spokesman for the group, said today. Realpoint provides analysis to bond buyers through subscription, while S&P and Moody’s are paid by companies that issue securities. Insurance regulators use ratings firms to calculate the funds carriers need to protect against investment losses on structured notes including CMBS and residential mortgage-backed securities. Ratings firms have come under fire for potential conflicts of interest as the housing slump exposed weaknesses in some of their top-rated securities, and the NAIC is holding a hearing tomorrow to review its use of the companies. “This decision by the NAIC, as well as recent rule changes by the SEC to encourage the adoption of investor-paid ratings models, demonstrate positive steps toward meaningful change in the market,” Realpoint Chief Executive Officer Rob Dobilas said in a statement today. Realpoint won recognition from the Securities and Exchange Commission last week, the Horsham, Pennsylvania-based company said Sept. 18 in a statement. To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

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