6 LEHIGH BUSINESS MAGAZINE (HHS), “may offer extra coverage, such as vision, hearing, dental, and/ or health and wellness programs. Most include Medicare prescription drug coverage (Part D). So, Medicare Part C and D involve buying plans from private companies.” Meyerhoefer further explains, “One of the main advantages of having private insurance companies design and administer multiple plans is choice. Instead of there being one government plan, where everybody is under the same plan, with the same amount of coverage for the same drugs at the same level, private insurance companies can offer multiple plans to consumers, by segmenting the market and giving different sectors of consumers plans that are more attractive to them.” However, older Americans, “have a hard time comparing the plans and digesting all the information,” Meyerhoefer explains. “Sometimes, choice can be bad if you need a consultant to explain all these different options to you. So that choice does have a cost, but theoretically, choice is the benefit.” Meyerhoefer says the bottom line is, “everything is connected in health care; it’s not an unfettered private market. The government’s actions have a ripple effect in the private insurance market and vice versa.” Energy Throughout the Great Depression and leading into World War II, building electricity generation plants to power U.S. growth and production on a large scale was primarily the province of the federal government. During this period of American industry, two marvels, the Hoover Dam and the Grand Coulee Dam, were built. “Nowadays, a lot of our country’s infrastructure is actually managed by businesses,” Lamadrid says, “not by the government, like it was initially. Over the last 60 years, we’ve seen a lot of restructuring, so generation plants, for example, are now managed by private entities. However, the government still plays a role in regulating them.” Just as the government invested huge sums in hydroelectricity in the 1930s, it continues to be a key early investor in alternative energy sources, Lamadrid says. “In certain cases, past subsidies can actually bear fruit much later in the process,” he says. Lamadrid cites two examples. The first involves the U.S. Department of Energy’s investment in efforts to figure out how to extract natural gas from shale rock formations starting in 1978. “For a long time, we knew that there was gas in the shale formations,” he says, “but we didn’t know how to start extracting it in an economical manner. For around 15 years, the federal government was subsidizing the investigation into natural gas extraction.” By the early 1990s, Lamadrid says, the government abandoned these efforts. Private entrepreneurs, however, stepped in and eventually found economical ways to extract natural gas. “Eventually, the effect the shale gas revolution had in decarbonizing the electricity system, can’t be overstated,” he said. “Right now, natural gas produces approximately one quarter of the emissions as coal. Because of that shift, we have made our electricity system much cleaner.” The same thing is happening with renewable energy, Lamadrid says. “There have been a number of subsidies for many years now that help to develop technologies—wind turbine technology, photovoltaic technology. During the last decade, we have seen the cost of solar panels dramatically reduced, almost 20-fold in certain cases. Because of that, companies are going solar, not because they have the subsidies, but because it’s the cheapest thing to do.” Capstone Steven Savino teaches a capstone course in the masters in management program that involves students working on projects with leading iconic companies. One of those companies is Pratt & Whitney, an aerospace manufacturer with extensive government defense contracts that make up their global operations. “There are plenty of examples of the amount of time, money and effort toward innovations that benefit the government— with Pratt & Whitney our Army, Navy and Air Force. These technological innovations, in this case with stateof-the-art jet engines, often translate to the consumer sector,” Savino says. “The partnership between government and industry eventually finds its way, whatever the innovation is, into consumer markets, benefiting everyday consumers with breakthrough new products.” YOUR FAIR SHARE OF TAXES? Bob Duquette, a teaching full professor in accounting at Lehigh Business, who previously worked as a director of mergers and acquisitions, understands why most people will never agree on what their “fair share of taxes” is. “Either with respect to what you as an individual pay the federal government or what a business pays the federal government or what you or a business pays the state or local government, there is some overlap in tax paying, but there are also different levels of service for individuals and businesses. The laws and rates frequently change. “You have this confusing world where the government requests you pay what they call your fair share of taxes that you owe. And there’s little explanation as to how the government came up with the “fair share” amounts. Duquette adds that few taxpayers understand what their tax dollars are actually paying for. Public schools, public safety (police, fire, emergency services), public health (protecting and improving the health of people and their communities) and health care (Medicare and Medicaid), infrastructure, public transportation, national defense, air safety, disaster relief—the list goes on and on. “I don’t think most Americans fully understand or appreciate all of the services we have come to expect,” he says.
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