March 29, 2024

The Boss: Mansa Equity’s Chief, on Answering Calls to Serve

I grew up in Rockville, Md., and had a newspaper route as a child. Even though my family was prosperous, I wanted my own money.

When I was in high school, I heard about labor strikes and other workers’ rights movements. I didn’t immediately understand how people could put their families at risk financially by joining a strike, so I asked my guidance counselor. She explained to me what labor-management disputes were all about. I thought I might become an arbitrator.

My father insisted that I attend Cornell University, but I told him that it was my decision. He said, “Not if I’m paying for it.” I visited the school ready to hate it, out of spite, but I loved it. My studies included a course in economic security, which was about safety nets like Social Security and Medicare. I learned that labor costs were making American products less competitive. My research showed that exploding health care costs were driving up labor costs.

I graduated from Cornell in 1983 with a bachelor’s degree in industrial and labor relations, then got two master’s degrees at Florida International University, in health care services administration and international business.

After graduating, I worked as a stockbroker, specializing in health care stocks, and advised small businesses about their health care benefits. I did that until the market crashed in 1987. Next I became the marketing director and then executive director for what was then the JMH Health Plan in Miami. Following that, I was an executive for the Neighborhood Health Partnership for five years.

In 1998, Jeb Bush, then the governor-elect of Florida, appointed me as secretary of the Florida Agency for Health Care Administration. It meant moving my family from Miami to Tallahassee and giving up my seats for Miami Heat, Dolphins and Marlins games, as well as those of the Florida Panthers of the N.H.L. That was hard. But when a governor asks you to perform a public service, you can’t very well say, “I’m busy that day.”

During my tenure, Governor Bush suggested that I talk to his brother George W., then the governor of Texas, about my thoughts on health care policy, which I did. After George W. Bush won the presidency, people told me to expect a call to join the new administration. Even so, I was shocked when it came. In 2001, I became chief operating officer for the Centers for Medicare and Medicaid Services in the Department of Health and Human Services. Two years later, I served as senior adviser to the Treasury secretary and led an effort to reform tax credit policies for the uninsured. From 2010 to 2012, I served on a committee for the Obama administration to help decide Medicare procurement policies.

In 2004, I began devoting more time to Mansa Equity Partners, which I started in 2003 as a holding company for my investments. I’m also managing partner and chief investment officer of the Mansa Capital fund. With $30 million under management, it’s Mansa Equity’s largest asset.

I attribute my success to my mentors. My Cornell professors first inspired me to connect labor costs with health care costs and helped me understand the future implications. Then I was lucky enough to work for visionaries in the health care industry who saw potential in me. I’m especially proud of my public service, a highlight of my career.

As told to Patricia R. Olsen.

Article source: http://www.nytimes.com/2013/03/24/jobs/mansa-equitys-chief-on-answering-calls-to-serve.html?partner=rss&emc=rss

Economix Blog: Casey B. Mulligan: Safety Nets and Their Cost

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Casey B. Mulligan is an economics professor at the University of Chicago.

The United States Coast Guard’s search-and-rescue division is considering some of the same trade-offs that are found in better-known safety-net programs related to unemployment and health care.

Today’s Economist

Perspectives from expert contributors.

Among other duties, the Coast Guard rescues people in, on and near United States waters. In addition to having highly trained life-saving personnel, the Coast Guard has ships, helicopters, planes and some of the world’s most modern life-saving equipment.

Taxpayer financed, the Coast Guard every day offers its services free of charge to the people it rescues. In that regard, the search-and-rescue part of the Coast Guard is a kind of safety net –- taxpayers pay so that people can have help on the rare occasions when they need it.

In fact, these search-and-rescue activities predate Medicaid and unemployment insurance; the Coast Guard can be traced back more than 200 years to a private search-and-rescue organization in Massachusetts called the Humane Society.

Safety-net programs have what economists call “moral hazard” as an unfortunate byproduct: recognizing that the government is standing by to help, some people do too little to take care of themselves. For example, a significant fraction of unemployed people delay finding a new job until their benefits run out. This may not be a choice we condone, but because unemployment insurance makes unemployment a little less painful, some people will respond by doing less to exit unemployment.

In their marine rescue efforts, the Coast Guard has noticed that many boaters do not wear life jackets that can prevent or delay drowning, and a number of boats venture miles offshore without a radio beacon that can help rescuers find troubled boaters.

Unfortunately, some boaters’ imprudent actions may actually be the result of the Coast Guard’s life-saving proficiency. Boaters know that they can call the Coast Guard when their boat takes on water, catches fire or otherwise becomes disabled, and many times help will arrive before the boaters have to leave their vessel and jump in the water. The Coast Guard even has ways of locating people who do not have radio beacons.

President Obama signed a health care law that will require Americans to get health insurance. Although less known, President Obama also authorized the Coast Guard to consider mandating radio beacons for boats venturing offshore and mandating that boaters wear life jacket in many situations (the Coast Guard has long required boaters to have life jackets on board, even if they are not worn).

Although it is sometimes asserted that the federal government has limited legal power to mandate citizens’ purchases, there can be a good economic case for mandates. While economists are often not inclined to interfere when a person knowingly risks his life for thrills or any other reason, the fact is that our government is in the safety net business, so individuals may take risks without recognizing the costs they create for rescuers.

A boat owner may save himself a few dollars by forgoing the purchase of a radio beacon, and that can ultimately cost the Coast Guard –- and thereby American taxpayers –- a great deal of money in search-and-rescue resources. Over all, it might be cheaper if the owner were force to make the purchase.

On the other hand, it is possible (although not logically necessary) that mandating marine safety equipment may encourage dangerous activities on the water, because the safety equipment reduces the costs of dangerous activities. Years ago, Prof. Sam Peltzman of the University of Chicago found that mandating the wearing of seat belts in automobiles resulted in more dangerous driving and more accidents, because, thanks to the seat belts, the average accident was less deadly.

As always, helping people has its side effects, and some rescues are necessary because the safety net exists.

Article source: http://feeds.nytimes.com/click.phdo?i=c611b4d47bd986840f89eb1115f80a64

Poor Are Still Getting Poorer, but Downturn’s Punch Varies, Census Data Show

And so it does. But not evenly.

The Midwest is battered, but the Northeast escaped with a lighter knock. The incomes of young adults have plunged — but those of older Americans have actually risen. On the whole, immigrants have weathered the storm a bit better than people born here. In rural areas, poverty remained unchanged last year, while in suburbs it reached the highest level since 1967, when the Census Bureau first tracked it.

Yet one old problem has not changed: the poor have rapidly gotten poorer.

The report, an annual gauge of prosperity and pain, is sure to be cited in coming months as lawmakers make difficult decisions about how to balance the competing goals of cutting deficits and preserving safety nets.

Its overall findings — income down, poverty up — are hardly surprising in the worst economic downturn since the Great Depression. Of equal interest, with fiscal knives in the air, are the looks at who has suffered the most and who has largely escaped.

“Certainly in a recession we want to put resources where they’re most needed,” said Eugene Steuerle of the Urban Institute, who served as a Treasury official under Democratic and Republican presidents. “And in a recession, needs change dramatically from group to group.”

Perhaps no households have weathered the downturn better than those headed by people 65 and older, whose incomes rose 5.5 percent from 2007 to 2010. By contrast, household income for every other age group fell. Among people ages 15 to 24, it plunged 15.3 percent.

Partly that is because older Americans get more of their income from pensions and investments, so a job shortage hurts them less. Also, the generation now retiring has been the most prosperous in history, so as poorer Americans die off, the income of the age group grows.

Such data is likely to feed longstanding debates about generational equity, since the largest portion of safety net spending goes to those 65 and older, through Social Security, Medicare, and Medicaid.

“We are spending too much of our limited resources on the elderly, and not investing enough in programs for younger Americans, such as job training and education,” said Isabel V. Sawhill, a budget expert at the Brookings Institution.

Another noteworthy finding comes from the suburbs, which have traditionally had the lowest rates of poverty. Suburban dwellers experienced a sharp increase toward the end of the past decade. Nearly 12 percent of them were living in poverty in 2010, the highest level ever recorded, up from just 8 percent in 2001. (The rate in cities was 19 percent, but rose less sharply.)

“There’s been a suburbanization of poverty,” said Alan Berube, a Brookings demographer, who cited the growth of service, retail and construction jobs that lured low-income Americans to the suburbs before the recession. “The notion of poverty being only in inner cities and isolated rural areas is increasingly out of step with reality.”

Household income fell in every region of the country from 2007 to 2010. But it fell much less in the Northeast (3.1 percent) than in the South (6.3 percent), the West (6.7 percent) or the Midwest (8.4 percent). And the Northeast was the only region where household income did not fall last year.

The declines in the West have been fueled in part by the collapse of the housing industry, especially in Arizona and Nevada. And the Midwest has suffered idled factories. Its status as the hardest-hit region is likely to come into play next year as presidential candidates hunt such big Electoral College prizes as Michigan, Iowa, Wisconsin and Ohio.

“The big hurt has been in the manufacturing and construction industries, which were big in the Midwest and West,” said Timothy Smeeding, an economist at the University of Wisconsin, Madison.

The census findings present two competing stories of immigrants — a reminder of just how economically diverse that group has become. From 2007 to 2010, they have fared both better and worse than the native born.

Among people born in the United States, household incomes declined 6.1 percent. Among non-citizens, the decline was steeper — 8 percent. But for immigrants who had attained citizenship, the decline was only 3.9 percent.

That latter group may disproportionately include the highly educated professionals who increasingly fill the new Americans’ ranks. A recent study by Audrey Singer, a demographer at the Brookings Institution, found that the number of immigrants with college degrees now exceeds those who lack a high school education.

“The high-skilled people are starting to dominate,” she said

Two worrisome numbers in the report raise questions about the recent response of the safety net. Poverty has risen especially fast among single mothers. More than 40 percent of households headed by women now live in poverty, which is defined as $17,568 for a family of three.

That is the first time since 1997 that figure has been so high. Analysts attribute the rise in part to changes in the welfare system, enacted in the mid-1990s, which make cash aid much harder to get. Those changes were credited with encouraging recipients to work in good times, but may leave them with less protection when jobs disappear.

“The business cycle is going to hurt them a lot more than it used to,” said Robert Moffitt, a Johns Hopkins University economist.

Poor people not only grew more numerous — 46.2 million — but also poorer. Among the poor, the share in deep poverty (defined as having less than half the income to escape poverty) rose to the highest level in 36 years: 44.3 percent.

The census data may overstate hardship by failing to count some benefits the needy receive, like tax credits and food stamps. But it also may also understate their needs by failing to adjust for health care expenses and variations in the cost of living.

About 20.5 million people are in deep poverty, with food stamps increasingly replacing cash aid as the safety net of last resort. More than 45 million people get food stamps, an increase of 64 percent since January 2008. About one in eight Americans, and one in four children, receives aid. Using an alternative definition of income, the Census Bureau found that food stamps lifted 3.9 million people above the poverty line.

“Given that poverty and hardship are likely to continue for some time, it’s imperative that we protect the program,” said Stacy Dean, an analyst at the Center on Budget and Policy Priorities, which aids in food stamp outreach campaigns.

Article source: http://feeds.nytimes.com/click.phdo?i=c924c259a7af646d0db8a8dfb1b91782