What Peter Drucker Would Be Reading

Peter Drucker

Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:

1.       Why Anxiety Makes You a Sucker for Bad Advice: With your current lifestyle and reading habits, you could fall behind in your learning, lose your focus at work—and maybe even go to jail.  Frightened? The solution is simple: read the Drucker Exchange seven times a day, send each of our posts to all your friends twice and send us a monthly basket of fruit or chocolate. Or don’t. But if you were even remotely inclined to follow that advice, it’s probably because the first sentence made you anxious. An article in Knowledge@Wharton reports on research that has found that anxiety makes us far more susceptible to outside advice, even when the advice is no good: “The researchers found that anxious individuals were more open to, and more likely to rely on, advice even when they knew that the person offering it had a conflict of interest.”

2.       The Multiple Distortions of Wind Subsidies:  When it comes to seductive sources of energy, wind power seems hard to beat. It’s so simple and clean, with negligible pollution. Regrettably, insists one-time Republican Sen. Phil Gramm, our attempts to subsidize it have made no sense. Indeed, we’ve spent $52.48 per 1 million watt hours generated, according to the U.S. Energy Information Administration, compared with 63 cents for natural gas. This has set back efforts to harness more cost-effective and reliable energy sources. “Federal subsidies are triggering an inefficient and costly transformation of grid resources from low-cost megawatts to high-cost ‘maybe’ watts,” Gramm writes in The Wall Street Journal.

3.      Free trade in Medicare benefits: the best idea you won’t hear in Washington: Moving from Phil Gramm to the other side of the political spectrum we encounter economist Dean Baker, who argues in The Guardian that one of the most obvious solutions to runaway deficits is to open healthcare up to more competition. Specifically, Medicare patients should be offered money to be treated in other countries that have good healthcare facilities and outcomes with lower costs. For example, use $16,000 that would go to treatment here, pay England or France $8,000 for treatment there, pay the patient $4,000 as an inventive, and pocket the remaining $4,000 as savings. Baker writes, “The US government could even pay a premium of 10-20% above the cost of healthcare in other countries and still have enough money left over to allow large payments to beneficiaries and huge savings to the government.”

4.     Dx Comment of the Week: Last week, one of our posts examined the government bailout of General Motors. Had it been, on the whole, a success?  Our readers had a variety of answers, most of them skeptical of bailouts in general. Reader George L. Williams suggested that a deeper shift has taken place, and business and government have become far more intertwined over the past three decades, to the advantage of big players:

Access to capital has virtually disappeared for small businesses. Large businesses (including banks and private investors) are entangled with government. . . . I question whether this is the result of the collapse of Communism, the rise of globalization, or both. Whether or not government should ‘bail’ out business is rather moot if it is no longer possible to determine where the lines dividing government, business (and academia) are drawn.