My New Favorite TV Show that starts with "G" but is on the ABC Family Network

Until Glee resumes programming, I am hooked on the TV show, Greek, that airs on the ABC Family Network. No, I didn't know the ABC Family Network existed either and I don't know what channel it's on or its other programming. I picture a lot of School House Rock and after school specials. Maybe it does "Where are they now specials" about the cast of Saved by the Bell or Nickelodeon's You Can't do that on Television. I watch all my TV on Hulu on my computer. Our only remaining TV, a mid 90's classic with a built in VCR that my sister gave me, lives in my closet.

Back to the topic on hand, which is a digression from my usual fare of health care and the business world. I try to write 8 posts per month, it's the end of the month and I'm a post short, and I want a break from those more serious topics.

Greek (only the E's are replaced with pretend Greek letters) is about the fraternity and sorority life at the mytical Cyprus Rhodes University. The creators envisioned a Gray's Anatomy with a college age cast, focus, and no melodramatic musical montages (not that I'm not a fan of a good musical montage). Essentially it replaced the niche that has been largely untouched since the Beverly Hills 90210 cast entered college. Greek is either a comedic drama or a dramatic comedy and does both parts equally well.

The wikipedia link describe the basics of the show but the reason that I dedicated a post to praising a TV show on an obscure network is:

Characters routinely break their stereotypes: The main characters rotate between taking the moral high road and falling to their most basic vices. No character is consistently wise or consistently wicked. One character will provide brilliant wisdom to a friend about their relationship and than destroy their own relationship with a selfish maneuver. No one is completely evil or good or competent or an idiot. In other words, its characters are pretty realistic.

They've balanced out who sleeps with who: The main failure of most TV shows with an attractive cast of sex-obsessed characters is that eventually every character sleeps with or wants to sleep with every other character and every combination has been exhausted. At that point, new characters are brought in just so everyone can sleep with someone new. Greek balances this out well with gay male characters who don't sleep with the female characters. Other characters are limited by love triangles to only sleep with one or two other characters. Other characters are are more innocent and don't sleep with the other main cast members. Finally, a few characters are designated to be huge sluts and sleep with everyone. A brother and sister round out everything nicely. It's a simple but elegant formula that keeps new relationships and sexual conquests interesting and creates new plot lines rather than recycle them.

The ridiculous is balanced out with the sublime: Regular characters such as the perky and popular female lead, her best friend side kick, the nerdy genius who just wanted to be accepted, witty slacker, and cutthroat future CEO president of the popular fraternity are balanced out with ridiculous characters that allow for the unexpected and the funny. There is a fraternity member who wears mascara, never speaks, and is routinely admonished for creepily watching people sleep. An awkward sorority girl curses all the time and eats obsessively. A southern baptist who takes a purity pledge reveals secret desires to be on the cheerleading squad and sleeps with his cougar-esque landlord. A large muscular, "George-from-Of-Mice-and-Men" fraternity guy gets stumped trying to figure out if the cilantro on his nachos are a vegetable or not. Okay, the last one was pretty stereotypical but is an enjoyable character.

Some suspension of disbelief is required. The show is supposed to take place in Ohio but since it is filmed in California, it never snows. The genius characters scientific discoveries violate most laws of physics let alone the capabilities of a typical freshman engineering major. However, the writing is quality (the slacker character has some really good dialogue) and the humor fresh enough ("He's smart. He goes to an Ivy League School! Okay, it's Brown but that's pretty close to Ivy league.") to make up for it.

College and the MBA: Not Dead Yet

Penelope Trunk's blog is one of my guilty internet reading pleasures. I balance out reading her posts about a train wreck personal life and deliberately controversial advice by reading Fred Wilson's thoughtful venture capital blog.

Trunk's latest post on the value of a college education led me to think about the topic since I promote education as an admission consultant for MBA programs. Trunk's post proposes that the availability of information on the internet and work experience available through social media has resulted in private colleges no longer being worth the cost when measured by job placement. She attacks college career centers which is kind of like going after the punter, the smallest player on a team, in a football game.

Trunk linked to Ben Casnocha's post on the topic which analyzes other aspects of the college experience besides job placement including the arguments against "signaling" studies. Google couldn't find the original researcher for me but the signaling theory is essentially that someone who is motivated to achieve the highest or most prestigious education sends a signal to future employers of their skills or level of motivation. All in other words, it's why someone will hire a Harvard MBA over a less recognized program even though they study the same material.

The drivers that resulted in this discussion are:

• Colleges may be pricing themselves out of the market: Colleges have joined health care as the two industries whose costs have increased at twice the rate of inflation for too long. What was once thought to be a very inelastic, price-insensitive market is starting to stretch.
  
• Colleges have more competitors: Performance in college had been the best way to evaluate the capabilities of an 18-22 year old who doesn't have a great jump shot or can't run the 40 yard dash in under 4.5 seconds. It's measurable, can be benchmarked, and takes 4 years. The 4 years is actually probably the more important piece because it requires sufficient dedication and reliability to complete a degree. Peace Corps used to require a college degree (or 5 full-time years in one profession like farming) mainly because if someone spent 4 years and finished college, they were more likely to finish their 2 year Peace Corps assignment. Now, college has more competitors. People in their 20's can demonstrate their website portfolios that show similar levels of commitment and talent as a college degree. Additionally, community colleges have done very well with focused vocational programs and raising their reputation.
  

However, while a college degree or graduate programs are being questioned, this will still be the dominant destination for people in their 20's because:

• People will college degrees are more likely to be employed and make more money: Data shows that you are twice as likely to employed if you have a college degree compared to a high school diploma. Sure Bill Gates dropped out of college and did pretty well but can you think of anyone else who doesn't have a good jump shot or crossover dribble?
• Social Media careers have their limits: My standing comment on posts that worship social media like a golden calf is to ask about social media market penetration. Does even 5% of the Western world use twitter? Do 10% of the Western world blog and do 20% read blogs regularly? Until social media reaches double digits as a distribution channel, it won't even replace direct mail. It will receive a few percent of the budget from direct mail but that won't fund too many positions. The conversion rates and ability to track response may look cool but you'll still reach the largest audience with Google or traditional methods. Social media needs more volume for it to become as viable a skill as the critical thinking of a liberal arts degree.
  
• As do web portfolios: As far as web portfolios, the danger is that they are made by people in their 20's and can contain career killer content like calling a business WTF Consulting or writing articles like this (note the comments section). If anyone has any Generation Y web portfolios that reflect the equivalent effort as a college thesis, please send them to me and prove me wrong. Most web portfolios that meet this threshold are written by older individuals that well, have college or more advanced degrees
  
• The Value of an MBA: To bring this back to my secondary job of MBA admissions consulting, the MBA degree still is the best options in two areas. First and foremost, it is the best option to career switch into a business sector due to the dedicated 2 years to learn a new field, get internships, and access to companies. Career coaches have told me that you can switch industry or function but never both without an MBA or industry specific training. Second, it provides the most job training of any non-licensed (like medicine) graduate degree as students learn about how to write resumes, interview, and other nuts and bolts of job finding. There are other advantages, such as networking, access to alumni, and "signaling" that I described above. However, the first two are aspects of the MBA that will survive the disappearance of the investment banking industry or the competitors that colleges are facing. It's possible for an MBA program to price itself out of the market but the other options for these two aspects have not yet emerged.
  

A Musical Montage of the end of Health Reform

After reading about Scott Brown's Senate victory in Massachusetts, I riffed a Don Mclean American Pie cover on my Facebook status of "I can't remember if I cried/When I read what Mass voters decide(d)/Something punched me deep inside/The day that health reform died". Based on the empathetic comments that I got, my friends sensed my apparent deep inner pain. However, readers of this blog might have been confused by this rather poignant poetic lyrical display since my posts have always found something to criticize about health care reform. I compared Medicare Advantage cuts to the worst thing to happen to seniors since the end of Denny's early bird dinner special and the nicest thing that I said about the Public Option was that it was a marginally better idea than Death Panels.

To this confusion, I respond with Joni Mitchell's song Big Yellow Taxi (otherwise known as They paved over paradise and put up a Parking Lot) "Don't it always seem to go/ That you don't know what you've got/Till it's gone". Now that the possibility of reform is disappearing faster than Gilbert Arenas's basketball career, I now realize the amazing potential of what this country had.

For the first time in a long time, we were grappling with tough questions about our health care system. We became a nation of health policy wonks. Radio programs analyzed the true drivers of health care costs and how requiring everyone to buy insurance would impact costs. More importantly, people with conditions that would prevent them from ever being accepted to an individual health insurance plan sensed an end to their fear of losing access to health care if they ever lost their job. The fact that the bills ensured that everyone could be insured outweighed their weak cost controls and clumsy handling of the Medicare program. As Crosby Stills Nash and Young sang, "If you can't be with the one you love, love the one you're with."

Now as Slate's Timothy Noah pointed out, health reform will likely not happen. The Democrats will not ram their bills through and the Republicans will not offer any solutions or help. The Republicans solution to the uninsured is a reclassification of the definition of uninsured. The one bill that they offered was a torte reform bill that just happened to cover 7-8% of the uninsured. They blew off the health care reform debates. Iowa Senator Chuck Grassley used that time to learn how to use the Twitter. He even taught John McCain how to use the Google. Kentucky Senator Mitch McConnell used that time to discover what feelings were. I'm not saying that he has any feelings yet but now he knows what they are.

As I grow moderate with my years, I start to understand the appeal of conservatism, some of its merits, and thus the Republican party. However, I cannot forgive the GOP for its dismissal of health care reform as a relevant issue and their sheer laziness and unwillingness to understand it or put together a bill.

Health Reform has been declared dead before so I'll remind myself of Bruce Springsteen's Reason to Believe with the lyrics: "Struck me kinda funny/ seem kinda funny sir to me/How
at the end of every hard earned day people find some reason to believe."

Medicare Advantage market: Not Dead Yet

I previously had posted that the Medicare Advantage (MA) HMO plans were the only ones likely to survive the 3.5%-4.5% cut in Medicare reimbursement from the federal government. From looking at the Pacific Northwest enrollment results from the Annual Election Period, it looks like the overall MA program is more resilient than I had thought. For background, Medicare Advantage is a program where the government contracts with private insurance companies to offer Medicare. The program has been down around for a few decades but payments to insurance companies were increased in 2006 to attract more participants. Obama likes to call these examples of programs that don't work so funds have been cut. When I hear that, I have to stifle the urge to tell Obama that his momma don't work right either but that never stopped me. I don't say that because I'm worried that Rahm Emanuel will find me.

Digressions about momma jokes and chief of staffs going medieval on me aside, Medicare Advantage enrollment in the Pacific Northwest grew 2% since last January despite average premium increases of 25% and benefit reductions. A PPO plan in Oregon increased its price from $121 to $176, reduced benefits, and gained market share. Another Oregon PPO plan tripled its price to $230 and only lost 50 members. Most HMO plans only had slight price increases and gained the most market share.

With a 25% increase in price, reduction in benefits, and examples that I described above, most did not initially expect the Medicare Advantage market to grow. I even changed my forecasting models to predict a 10% decrease in enrollment. As a result, my best job forecasting to date is still last year's NCAA college basketball tournament bracket where I predicted a North Carolina-Michigan State final. However, I predicted that Michigan State would win and lost the pool to someone's second grader.

This indicates that 1) Medicare beneficiaries still see the value in Medicare Advantage and consider it one of the better options and 2) Medicare Advantage plans were underpriced. With the second point, a 65 year old pays $110 Part B premium + $176 PPO plan above for a total of $286 per month. However, their plan has no deductible, the 65 year old pays $50 to go to the Emergency Room, nothing for an outpatient surgery or CAT scan, $10 to go to the doctor. A similar plan on the open market would probably cost $500 for a 30 year old.

It still remains to be seen if the Medicare Advantage market will survive planned 2011 reductions as well as future cuts. The growth in the market despite the 2010 reductions shows how the public values the program and it probably did not need all of the money from the federal government to remain attractive. These reductions will continue to be the seniors contribution towards health care reform. Given my forecasting skills, I am going to continue to predict doom and gloom for the Medicare Advantage in hopes that I am completely wrong again. I will also share my future NCAA college basketball brackets.

I know more than the Financial Crisis Inquiry Commission

We had so much fun with the 9/11 Commission that the Obama administration offered a sequel entitled The Financial Crisis Inquiry Commission. Like a lot of sequels, it's looking disappointing compared to the original.

The mission statement of this Commission look promising:

The Financial Crisis Inquiry Commission is a bipartisan commission that has been given a critical non-partisan mission — to examine the causes of the financial crisis that has gripped the country and to report our findings to the Congress, the President, and the American people.

Hopefully, the Commission's work can help rebuild the American people's belief in a financial system that puts Americans to work, fulfills their goals and provides the foundation for a new era of broadly shared prosperity.

However, based on their line of questioning that I heard about on NPR, their performance is not promising.

The Financial Crisis Commission does not apparently know what hedges are. I'm not talking about gardening but rather "hedging your bets." In financial terms, this often entails buying a financial asset with the expectation that the price will increase while purchasing a short position or some kind of insurance in case it loses money. Or taking a long and a short position. It's about managing risk.

One of the Grand Inquisitors sputtered how a bank was selling securities and also taking short positions against that same securities was the equivalent of "selling a car with faulty breaks and then buying insurance."

I call that as fine an example of hedging that I have ever seen. If the securities do not sell well then the bank has protected itself from those losses. That's contrasted with an absolutely terrible analogy about the car with faulty breaks. What does he even mean by buying insurance? How about comparing it to placing a bet with 3:1 odds that the Yankees will win and a bet with 4:1 odds that the Red Sox will win? One could argue that only a soulless banker would not pick either the Red Sox or Yankees but bet on both just to make some money. Others would point out, it's a systematic way to gamble.

They don't understand hiring or compensation either: Another Grand Inquisitor suggestion was that banks pay risk management staff more in order to attract more talented individuals. Or in other words, they were asking if the banks ever studied compensation for this position and their own cost structure. Given that banks generally study the cost structure of every asset from Danish wind mills to Russian sky scrapers, they've probably figured out how much they need to pay their supporting staff. Given the support staff is a form of overhead, it's probably less than they pay revenue generators like traders.

With that question, the Grand Inquisitors ideas are right on par with what Human Resources was probably thinking in 1985.

They don't really understand bonuses: Lately, bonus has become a dirtier word than boner. Okay, I was going to call it a 4 letter word but bonus has 5 letters but it's kind of close to boner. Plus I want to see what kind of Google searches that I draw by saying boner.

Digressions aside, at least 50% of a bankers compensation comes from their bonus. Their base salaries are on par with industry positions. It's the compensation model that banks have chosen since they study this stuff (like how much they need to pay a competent risk manager) and have concluded that it results in behavior that they want to reward. The fact that bonuses are dramatically increased by financial engineering or providing services that don't really improve the value or efficiency of a company is not good. The fact that they reward creating asset bubbles that will later pop isn't good either.

However, nothing is inherently wrong with a compensation structure that is heavily weighted towards the bonus. Sales compensation is either heavily driven by commission or salaried depending on the results that the company wants to achieve. Focusing on the bonus is looking at the cart and ignoring the horse.

Personally, I think it would be kind of interesting if politician's salary and campaign contributions were tied to a bonus type level of performance. Suppose Congress had to reduce the unemployment rate by 1% in order to get half their salary or campaign contributions? Or pass 10 major pieces of legislation? That might result in a more bipartisan approach especially among Congressman who only own 1 house.

Summary: The 9/11 commission was probably viewed as successful since the members really understood the topic. The Pecora commission to the financial crash in the 1930's was very successful since it was both entertaining and produced lasting results. From what I have heard so far, I'm not impressed with the competency of the Financial Crisis Inquiry Commission nor their sense of humor (I still don't understand the car with the faulty brakes analogy). I don't think that Wall Street is so different from the rest of the economy to result in this level of misunderstanding. Wall Street bankers are not irrational and there is a logic behind their actions. The commission needs to understand that logic.