No more surgery in 2010

Having survived its multiple surgical traumas as the economy went over the cliff in the final quarter of 2008- after being T-boned by the exorbitant speculative run up in oil prices earlier that year- the economy has spent 2009 in the Surgical ICU experiencing repeated intubations, central lines, tapering with ventilator settings, MRSA and VRE infections, dialysis and multiple codes. Somehow it's survived. Unfortunately as we enter 2010 the doctors are still pressing for more surgery and drug interventions although common sense may finally have taken hold and the 'no extraordinary measures' order signed. This may be a time for tax incentives for new hiring and accelerated depreciation on purchases, but not a time to continue deeper interventions that will result in permanent iatrogenic problems. And please- we don't need more 'shovel ready' projects. Frankly I never want to hear that phrase again. I don't want to be caught up in traffic while one individual fills a pothole and 10 construction workers look on- all to artificially lower the unemployment rate. We need real increases in productivity to do battle in a world economy, not wasteful big government spending.
Indeed the current political stalemate is exactly what is needed- a standoff between the surgeons and the physicians over what should be done for the patient. Let them glare at each other and make threats as to why their actions are the only ones capable of saving the patient. As the year begins, there is increased hiring in the life sciences. Let's allow the patient to get up and take a few steps down the hallway. Perhaps they'll be discharged by the end of the year.

Biopsy of Economy

The economy continues to dominate our thinking. Really dominate- how truly sad when the focus should be on advancing medicine and technology, not on whether your biotech start-up will make it through the end of 2009. I see a pick up in VC financing and even a rare IPO- perhaps things are beginning to turn. We've been bouncing along the boulder field of the cliff the economy fell off Sept 2008 for long enough. But here's the rub- how are we going to have a sustained recovery when the focus is on reforming health care instead of helping business? Obviously reforming health care is center stage for political reasons. It is highly likely the Democrats will loose dozens of seats in the House and several in the Senate in the mid-term election. A turnover in the House is not out of the question; the number of seats that are in contention in the Senate makes a turn-over there unlikely in 2010. The unemployment and Under-employment rate will only slowly improve by the fall of 2010 and the Dow will likely be over 10,000- but the number of middle-class voters still affected by this economy will be significant. Hence the urgency to institute a comprehensive health care reform while Obama still has super-majorities in the House and Senate and can push through a public option. Or a public mandate- who are we really kidding here? As a physician, I understand the attraction of a single payer system. Frankly the multitude of private insurances was a real nuisance from a billing perspective. But competition is always the best way.
Regarding the economy- why not institute an investment tax credit as has been done in the past? Accelerated depreciation, expensing of otherwise long term capital assets and the ability to fully write-off purchases for your business this year. Why does the present administration seem to believe that it can government-spend its way out of this deep recession when the only way out is to grow the private economy? And that means improving the business climate, not raising taxes and expecting business to somehow pick up the slack. It means letting go- not taking over more industries as has already been over done.
By early 2011 the Obama agenda will have run it's coarse. Let's hope it will somehow help sustain the life sciences, not stand on top of them.

Aussie Economic Outlook

As for Aus, yes we're feeling the pain, not as depressed about the future as the rest of the world though, probably because we have a belief that our future is strongly tied to China which despite the world slow down is still expected to have a GDP growth of 8%. If the GDP growth was 5% or less, I think we would be a lot more worried.

Nick Kalikajaros
CEO and Managing Director Private Banking Australia
"Corporate Advisor and Wealth Advisor to Entrepreneurs"