Health Care Aftermath

Republicans felt that health care reform ought not to focus on expanding the insured but, rather, on limiting lawsuits.

Within hours of Obama signing the new health care bill, Republicans have sued.

History from the Future: The Burger Craze of 2014

It was hard to know exactly when futures markets had begun to drive commodities prices. Oil, obviously, was one place where speculations on financial markets drove the everyday price at the pump - causing prices to rise and dip like seagulls in a squall. And then the same thing began to happen to wheat, rice, beef, chicken .... And before long, the prices at restaurants and grocery stores began to move in tandem with these commodities prices, like prices at the gas pump. And then somebody got the really bright idea of pricing food like stocks and the real fun began.

The pushing and shoving in line at the fast food joints as the first indication that something profound had changed. Customers were bidding for burgers like traders on the floor of the stock market. Prices were bouncing up and down like the price of Yahoo stock. From the time someone got into line to the time they ordered, the combo meal they wanted might have gone up or down a dollar. But that was just at first. Soon, this market, like so many before it, began to be defined by derivatives and speculation.

In 2014, there was the great quarter pounder craze. As the pace of social change quickened, demand for comfort food surged. Coupled with a bad wheat harvest that year, savvy speculators realized that beef prices would soon be going up. A day trader who'd become rich speculating on gold around the time of the Great Recession, Chaz Mingus, tried to corner the market on quarter pounders and the folks at Goldman Sacs began to bid against him. It was surprising that quarter pound burgers rose to $10. What was more surprising was that this actually created a resurgence of interest in quarter pounders. Worried that this American classic might soon be priced out of reach, Americans lined up to buy it before prices went higher. This, of course, made prices go even higher. Commentators were soon explaining that it only made sense that quarter pounders would cost $120. Hadn't Americans been paying exorbitant prices for fine dining for decades? And what was more classic than the burger? And then prices hit $500 and as had happened decades before at Ford and GM, the new credit and financing divisions of Burger King and McDonald's began to make more profit than the actual restaurants. Stories abounded of people who were paying the equivalent of monthly mortgages for their quarter pounder habit.

The derivatives market began to trade in the concept of the hamburger. How could you price something so iconic, people began to ask. And then the prices got really out of hand.

Curiously, the market bust about a year later when Wendy's introduced the fifth-pounder. Prices plummeted and millions of Americans were left holding the bag on $2,000 hamburgers.

The Simple Financial Reform Act

My plan for financial reform is simple.

Bankers get two kinds of bonuses: positive and negative.

Let me elaborate.

If a bank makes a billion dollars in profits, some banker in it might get a bonus of a million. This kind of thing actually seems like a pretty good deal for banks and their shareholders. If some guy can find you a billion in profit that you weren't going to have before, it only seems fair that you share the wealth. I honestly have no problem with institutions like banks sharing profits with people who take initiative. In this way, banks (or corporations) do what smart governments have done for business people for centuries: let these individuals keep a portion of the money they make. (And countries usually let entrepreneurs and individuals keep about 50% to 70% of what they make, whereas banks and corporations only let their employees keep about 1% to 20% of what they make. If anything, banks and such may give too little for a bonus.)

So business people within a country have an incentive to take risk. They start a business to make money. To get a return, they have to take a risk. One of the simplest rules of business and investing is this: higher risk yields higher return. But the business person is also careful about taking risk. Because the even simpler rule is that more risk means more risk. The business person could lose his business and his house. He's bold but not reckless.

The problem with bankers is that they, too, have an incentive to take risk. They make up new financial instruments, make investments, and try new things in seek of higher returns. If these risks work out, they get a big return. But if these risks don't work out, they get nothing.

It is easy to say that the bankers are greedy. But really, how would any of us play this game? The more risk you take, the more you can make. Oh, and if you lose the bet, you get nothing. That's right. You don't get a negative amount. You simply don't get a bonus. You would be right to take huge risks. But of course, even if you can't do worse than zero, the bank can lose billions or even trillions.

An easy way to continue to motivate bankers to move banks forward is to continue to give a bonus. An easy way to make sure that the risks they take moving forward are bold but not reckless is to mandate that their bonuses can be negative as well as positive. Sure you can make a million but you can also lose a million. Or, if you are playing options and the like, perhaps lose tens of millions.

This is not something that bankers will adopt themselves, any more than popes willingly gave up religious control over regions of Europe or kings willingly gave up control over portions of their kingdom. Nobody with huge power ever just voluntarily gives it up.

But as long as governments are insuring banks - as they should - they can stipulate how something like a bonus is calculated. And I suspect that no one regulation would do more to ensure a balance between the necessary risk taking to keep the industry innovative and the cautious risk avoidance that would keep the financial industry from regularly imploding.

Once We've Cut Health Care Costs ...

We can adopt this plan for education.

Less Jefferson, More Schlafly. If that doesn't make America stronger, we'll have to resort to more drastic measures

Texas is changing textbooks, putting more emphasis on the influence of Phyllis Schlafly and less on Thomas Jefferson.

“By getting married, the woman has consented to sex, and I don’t think you can call it rape.”
- Phyllis Schlafly

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”
- Thomas Jefferson

The Texas State Board of Education approved some controversial right-leaning alterations to what most students in the state – and by extension, in much of the rest of the country – will be studying as received historical and social-scientific wisdom. Here are some of the other signal shifts that the Texas Board endorsed last Friday.

A greater emphasis on “the conservative resurgence of the 1980s and 1990s.” This means not only increased favorable mentions of Schlafly, the founder of the antifeminist Eagle Forum, but also more discussion of the Moral Majority, the Heritage Foundation, the National Rifle Association, and Newt Gingrich’s Contract with America.

Thomas Jefferson no longer included among writers influencing the nation’s intellectual origins. Jefferson, a deist who helped pioneer the legal theory of the separation of church and state, is not a model founder in the board’s judgment.

Read the whole thing here.

Of course a half century later, there are fewer surprises

When we got into office, the thing that surprised me the most was that things were as bad as we'd been saying they were.
- John F. Kennedy

Firing Teachers? That'll Change Everything.

Newsweek's cover article argues for firing bad teachers. I'm sure that will change everything. Just like voting out all the bad politicians will change Washington.

We used to burn witches because we didn't understand disease and bad weather. Today we vote out politicians and fire people because we don't understand systems.

Are there bad teachers who should not teach? Probably. Can some of them be rescued themselves by better education about how to teach? Probably. Will more rigorously firing more teachers help? Probably not.

Keep this in mind. We have no more populous profession. How many teachers do we have in this country? 3.7 million, more even than lawyers (952,000), engineers (1.3 million), waiters (1.8 million), janitors, maids and household cleaners (3.3 million), and secretaries (3.6 million).

I am going to assume that we can't afford to pay enough to compete for the engineers or lawyers (and it is not obvious how many would have the personality and skills to deal with and manage kids anyway.) I am also going to assume that very few of the waiters and maids have the background to educate kids. So, assuming that we fire the bad half of teachers, where are we going to find nearly 2 million "good" teachers? (The Gates Foundation is researching what makes for good teachers and one thing that they can report with confidence is that current certification is no predictor of "good.")

We have an educational system. If we want a different output, we have to change the system, not the people working in the system. If you don't like the way the movie ends, you don't hire new actors: you change the script. (And I will agree that changing the system may change who gets through the system to become teachers. I don't deny that there are bad teachers. I just deny that they constitute a big enough problem to change outcomes much given how much we can now afford to pay teachers and the technology we currently use for teaching.)

And I would say that a measure of how well the system performs should begin with accurate measures. The Newsweek article suggests that the US performs about on par with Lithuania, ranking about 10th in the world. I think it would be more telling to know how first generation immigrants from Mexico or China (or Lithuania even) do on standardized tests compared to kids who are still in Mexico, China, or Lithuania. (And even this would not be apples to apples given that English as Second Language kids aren't given provision for learning a new language in most American school systems.) By that measure, I'd be willing to bet that we do pretty well.

No other country in the world brings in more immigrants from more countries. I feel confident that third and fourth-generation American kids would hold their own against kids from any country.

Does this mean that we ought not to change the educational system? I would never say that. I've argued for changing the system numerous times in this blog. (40 posts not counting this one.)

But succeeding at improving the current system would be the booby prize (and I don't mean booby in a good way). It would be like making a better turn table or horse carriage in a world of CD players and cars. If we could find a market for standardized tests, emphasizing them would make sense. We have not and they do not.

If we begin to pay some teachers $130,000 and fire others, we'll just raise the cost of an already costly educational system by increasing turnover, teacher training costs, and raise wages. Paying some teachers far more while firing others sort of reminds me of giving some kids A's and flunking others. If that kind of system gave us results that made people happy, we wouldn't be talking about firing teachers.

Those Anti-Market Forces Are Ruining Everything

From yahoo:

One year ago, the economic crisis dragged stocks to their lowest in more than 12 years. The S&P 500 is up 68.5 percent since then --the strongest one-year rally since 1936, according to Standard & Poor's, but still 27.6 percent below its all-time high.

Damn that anti-capitalist, socialist Obama.

Extended Lives = Extended Childhood

George Will writes about boys who won't become men in this week's Newsweek. George decries the fact that the median age at which boys marry or leave home is going up. He makes some good points but misses the context of extended boyhood: we're living longer.

Life expectancy goes up about 3 months a year. This works out to about 2.5 years per decade or about 5 to 7 years per generation.

So, let's say that we still left home and married at 14, as people did only a century or so ago when life expectancy was about 40-some years. Is that really how much preparation we want them to have for work and parenting? Do we expect 14 year olds to choose who they'll be married to at 85?

If the next generation gets married two years later than their dads and then retires four years later than their dads, they'll still end up married and retired for longer than their dads. That is what happens when life expectancy goes up each generation.

It is not just old age that now lasts longer. So does youth. That life stages - from youth to middle age to old age - would all extend for longer as life itself lasts longer makes every kind of sense to me. But I guess saying that wouldn't make for a very interesting column.

The Secret About Health Care Costs

Rumors are, health care is about 16% of our total GDP. One of the few things that politicians and their constituents seem to agree on is that costs are too high.

So, let's say that the folks in DC reduce health care costs by half - making health care more affordable.

Little problem. Our GDP would suddenly drop by 8%, leaving about 12 million people suddenly unemployed.

People holler about debt and forget that for every dollar of debt there is a dollar of assets.

People holler about costs and forget that for every dollar of costs there is a dollar of revenue.

There will be no sweeping change in health care. It threatens too many jobs and businesses. What we can hope for is coverage for everyone and then incremental cost containment.

The most important thing we could do to contain health care costs, though, has nothing to do with health care. We need to grow new sectors, new industries, that make health care a relatively smaller and smaller portion of our economy. The way to make health care more affordable is to generate more revenue from outside of the health care industry, revenue that can be used to pay for health care.

We aren't just dealing with a health care system. The health care system is, itself, a part of a larger system. Lose track of that and "solving" the health care problem seems nearly impossible.

Excerpt from a Future History Book, or "whatever happened to shopping?"

The popularity of shopping depended on the ancient urge for the modern, that old wish for something new.

No one had considered the possibility that this urge for the new might actually be turned on shopping itself, or that fashion might go out of fashion.

Yet people gradually decided that they had too much stuff and clutter and turned away from the malls. Consumption never again drove the economy like it had throughout the 20th century.

For generations, economic goods had implied economic goods to have. Early in the 21st century, communities realized that people were ready to focus more on economic goods to do. The stuff of life was replaced by experience, and having became less important than doing. As communities adjusted, it was not just philosophers who saw this as positive. Even economists eventually realized that this was progress.

The (Un)Health(y We Don't) Care Summit: Or, What's Really Wrong with Washington

I watched about ten minutes of today's bipartisan health care summit, catching some of Lamar Alexander and Nancy Pelosi. Two things struck me as terribly wrong about the summit and convinced me that nothing useful would come from it.

One, they need a facilitator who is truly non-denominational, who can cut them off when they talk too long, and keep moving towards something actionable. The biggest problem with this, of course, is that the folks in Washington seem convinced that there is no one worthy of such a task because they've got the monopoly on wisdom.

Two, they need to move from talking to modeling their assumptions. If a congressperson wants to plan lunch, he talks. If he wants to plan a campaign trip for next month, he talks. If he wants to change health care for the biggest economy in the world, he talks. Compare communication with transportation. If that same congressperson wants to go to lunch, he walks. If he wants to go to a function across town, he drives. If he wants to go back to his district, he flies. He uses different technologies for travel but not for communication and planning. It's no wonder that Congress doesn't get anywhere - it is still doing the planning equivalent of walking everywhere.

Imagine a session in which a facilitator (or two) captures the assumptions that these politicians are making. "You are saying that liability insurance drives doctors out of rural areas. Okay, what is the causation and what is weighting? Liability of more than what triggers an exodus from rural areas?" And bit by bit, the model could be constructed. Then, the causation could be tested. Data that exists could be used. Data could be collected. Assumptions could be tested and collected into a network of causality and then simulated. Technologies exist for this. As the group works on this, a few things would happen. Leverage points would emerge. It may well be that the objectives of covering everyone and holding down costs could be met with a far less comprehensive plan. And the group would gradually be brought together over a model that is grounded in data.

Finally, such an approach might just do something to disarm the ideological who resist practical solutions because of principles. And on that note, an excerpt from Dietrich Dorner's wonderful book, The Logic of Failure: Recognizing and Avoiding Error in Complex Situations, in which he's talking about the success people have with systems simulations.

“The good and bad participants did not differ … in the frequency with which they developed hypotheses about the interrelation of variables in Greenvale. [That is - we all develop our theories about how the world works.] Both the good and bad participants proposed with the same frequency hypotheses on what effects higher taxes, say, or an advertising campaign to promote tourism in Greenvale would have. The good participants differed from the bad ones, however, in how often they tested their hypotheses. The bad participants failed to do this. For them, to propose a hypothesis was to understand reality; testing that hypothesis was unnecessary. Instead of generating hypotheses, they generated ‘truths.’”

What if Debt were Driven by Productivity Gains?

I've never seen anyone suggest that growth in productivity might be the fuel for a growth in debt. The rate of productivity growth has been remarkable in the last couple of decades. So has the growth in debt. Maybe the one causes the other. And maybe debt is the result of a good thing (productivity growth) and not a bad thing (a sudden lapse in morality).

Try this thought experiment.

100 people all farm to eat. Then one day, one guy makes a machine that allows him to feed 100 people all by himself. Now, we've created 99 unemployed people who can only beg or borrow in order to eat.

One of two things happens next. Either no one else comes up with new products or services that generate income and the the starving 99 are unable to pay back the inventor, and the whole "economy" collapses back to some uneasy situation with 99 parasites and one productive inventor. Or two, inventors and entrepreneurs emerge from within the 99 to create new goods and services that allow them to eventually pay back the loan for food and create more jobs.

If we stop short at the debt of the 99 hungry hopefuls, we'll be stuck. The way through this is not to take on less debt but, rather, take on more.

This odd little thought experiment suggests that debt - whether of the newly unemployed who want to eat or of the new and would-be inventors and entrepreneurs - follows from productivity gains. And the debt may be really ugly. For instance, in this example, the unemployed food eaters are borrowing money to eat. And the "wealth" the inventor feeding 100 people has is in the form of IOUs from the hungry hopeful. And further, if the successful inventor backs a new inventor, he is actually loaning him money that is just promissory notes and not real cash. And yet if all these loans are not made, the system collapses.

Following this logic, it could be that debt follows from productivity gains. The point then is to stimulate more innovation - even if that means incurring more debt - in order to create the next venture that will provide jobs to the newly unemployed.

So, what is the solution to our current levels of unemployment and increased debt? It is not to worry about debt. It is to worry about creating the next new thing - from building infrastructure to creating new businesses.

I will maintain my contention that our problem is not a problem of too much debt or even of financial institutions that create too much wealth - real or bubbled. Our problem is that we aren't doing enough to translate our excess labor and capital resources into new ventures. This is not a failure of labor or capital markets. It is a failure of entrepreneurship. We need to do more to create entrepreneurship within organizations (what Gifford Pinchot calls intraprenuership) and without. The solution is that simple and that complicated. Focusing on debt right now is a distraction. We need to innovate our way out of this.

Which means, essentially, we're in the same situation we've been in for centuries, only more so.

"No!"

Anything you are not free to say "no" to, you are unable to say "yes" to.

You can't really choose what you are not free to reject.

This is worth remembering if you really are intent on moving away from parental and managerial or even educational models that don't depend on some form of tyranny.

Is it any wonder that one of the first phrases that toddlers learn is "No!"? This is the beginning of taking control over defining self rather than capitulating to others who would gladly define you.

A Nation in Denial

Here's a curious little fact.

In Obama's 2010 budget, he's showing mandatory expenses at $2.184 trillion. (Mandatory includes things like social security, medicare, and interest on the national debt.) He's projecting revenues of $2.381 trillion. So, $197 billion is left for all discretionary spending. Unless, of course, we want a 1.2 trillion deficit.

Let's say that we balance the budget without adding taxes. We'd have to cut all discretionary spending by more than 85%. This would mean, for instance, that defense spending would drop from $664 billion to $95 billion, a level we haven't been at since before World War 2. The National Science Foundation - the investment our $13 trillion economy makes into basic research - would be a mere $1 billion, or about what Exxon makes in an hour.

People like to talk about the good old days before the time of so many taxes. Of course, they forget that in those good old days life expectancy was about 47 years, income was a fraction of what it is now, and people had yellow teeth. Assuming they had teeth.

George Bush took us to war and gave us a tax cut. We bought it.

Barack Obama got elected by promising universal health care and a tax cut. We bought it.

We're the ones in denial here, not the politicians. They know that they have to give us our programs and tax cuts or we boot them out.

If a politician promised to raise taxes and cut programs by enough to balance the budget he or she would lose the election. (And anyone who thinks you could balance the budget with just raising taxes or cutting programs is obviously a beneficiary of the new medical marijuana laws.) It's that simple.

Obama has appointed a commission tasked with creating recommendations for moving towards a balanced budget. Elected officials can't talk honestly about what needs to be done, so the bitter truth is left for appointed officials to say. Because you can't stay in office and talk honestly about the deficit. Not if you want to be elected by a polity in denial.

Quaint Victorian Notions About Capital in a Modern World

We Americans live in the richest, most economically driven country in the history of the planet. And still we’re ambivalent about money and debt. Our revulsion to debt is literally Victorian.

There was time in history when capital was scarce and hard to get or create. Social inventions that helped to overcome this limit made communities rich. Social inventions included new norms, like traditions of saving and investing, and new institutions, like modern banks, and bond and stock markets.

One of the social inventions that helped in the early days of capitalism was uneasiness about debt, something shared by British and Americans in the 1800s and early 1900s.

19th century preachers inveighed against debt, teaching that it mars and stains the soul. Protestant preachers liked to quote Paul, "owe no man anything but love." Debt was proof that one failed at self-denial. Charles Spurgeon, the best-known English preacher of the late 1800s, described the trinity of evil as "debt, dirt, and the devil."

And yet by the early 1900s, debt had become obviously essential to economic progress. This is still a point little appreciated, it seems, but it has to do with establishing new industries. You'll have to follow a few steps here, but I'll try to keep it simple.

1. Imagine a world where everyone has to farm to be fed.

2. Then, someone invents a machine (capital) that can do the work of 100 men. This means that 99 men are freed up to work on something else.

3. 99 men are unemployed. 1 man is incredibly rich. Or would be, if only the 99 hungry and unemployed men had money.

4. Inventors and entrepreneurs create new products and services – from the sublime to the silly. [Look at the end of this post for a list that comes from the years around 1900.]

5. These inventions and business ventures require financing. Debt even. Debt creates. Getting these new industries started is an act of faith. It requires capital investment for building factories and stores. It requires capital for making payroll to manufacturing and sales people. And it requires consumer credit so that people can begin buying this new thing. Once established, though, capital gets its return and there is a new source of sales and salaries. Debt can create new wealth. And yes, even consumer debt that isn't obviously directed at creating wealth can be instrumental to this.

6. These new ventures and inventions don’t just make life more interesting, richer, and confusing: they create jobs for the 99 people made redundant by productivity gains in the old industries.

All this to say that reluctance to take on debt can hobble progress. One of the worst things you can do in an economy is treat what is scarce as abundant and what is abundant as scarce. Victorian England - with its social stigma against debt - was actually creating the right culture for that stage of capitalism. Capital was scarce and people should have treated it carefully. The reality behind the billions made in venture capital, junk bonds, and credit cards today, though, is expressed in Michael Milken’s observation that, “In an industrial society, capital is a scarce resource, but in today’s information society, there’s plenty of capital.” Today, jobs are scarce and capital is abundant; an economy that goes into debt because it is mis-using its capital but creates jobs so as not to mis-use its labor has an edge over an economy that leaves a large percent of its work force under- or unemployed.

So, with all the worry about debt, what does this suggest? To me, this change suggests that we ought not to worry about wasting capital that is abundant. Rather, we should worry about wasting labor. Our economy will be made stronger by employing more people into productive ventures, not by avoiding debt. Once we’ve got employment back up and have created jobs, we can worry about debt. But not about eliminating it – just in shifting it into the creation of new industries and services.


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Some of the inventions from the decades around 1900:
central heating; the safety razor; stainless-steel implements; the striptease; the electric toaster; iron, oven; sewing machine; dishwasher; electric elevator; dial phone; portable typewriter; radium treatment for breast cancer; heart surgery; the psychiatric clinic; contact lenses; toothpaste in tubes; motion pictures; musical comedy; the gramophone; volleyball and basketball; the Ferris Wheel; the jukebox; breakfast cereals; milk delivered in bottles; packaged produce; Coca-Cola; margarine; the ice cream cone; the refrigerator; public libraries; the correspondence course; the full-range department store; the chain store; the shopping center; the coin telephone; the traveler’s check; fingerprinting; the automatic pistol; the electric chair; the automobile and the airplane; the underground city subway train; the pneumatic tire; color photography; rayon and other artificial textiles; chewing gum.

Biden vs. Cheney - Due Process Loses

I love Joe Biden. Dick Cheney? Well, not so much. And yet Cheney has won the last little tussle with Joe, and this, like so much related to Cheney, infuriates me. He has won because he got Joe to agree with an implied premise in his argument.

Cheney is upset that the Nigerian crotch-bomber was read his Miranda rights. Joe counters that the same thing happened to the ped-bomber from England under Bush's administration. Cheney doesn't think that would-be terrorists deserve rights. Joe seems to (sort of) agree with this inane suggestion, which is why the two VPs upset me.

The executive branch has a duty to execute the laws. VPs, for instance, are sworn into office promising to uphold the constitution. This seems to me a vote of confidence in our laws. And note that our laws are such that having rights does NOT mean that one can't or won't be punished.

So, when Cheney expresses his anger that someone may have hinted that the crotch-bomber (which, by the way, could make for an attention-getting chat name (as opposed to CB handle)) had rights, I have to ask this: if Cheney doesn't trust our laws or due process, why on earth did he waste 8 years of his life as the second-highest ranking member of the branch of government sworn to uphold those laws?

Biden was right to call out Cheney yesterday. He could have gone further and simply said that his faith in our legal system is so great that if an accused terrorist is found innocent he'd accept that verdict as more trust-worthy than trial by media.

I know that it is fashionable not to trust in government. It would be nice, though, if the people heading it up showed a little faith in it.

Time to Copyright Investigative Journalism

When our founding fathers wanted to encourage more innovation to make a better world, they gave us patents. Patents reward an inventor with a monopoly for a time, making the payoff for sacrifice and applied creativity greater. The result is more of a good thing.

Investigative reporting is also a good thing. With facts and a better understanding of what's going on, a community can make better choices. The crooks in high places are more careful. Yet even as we get more media coverage, we seem to get less investigative reporting. Maybe its time for something like a patent or copyright for news uncovered.

Imagine that you learn a story behind how the number of deaths attributed to medical malpractice are generated. Right now, you do the work to generate this story and the instant you publish it, it becomes news. Talk shows, columnists, and other reporters can use your startling insight to opine and make their point about why malpractice insurance or litigation should be changed. You do all the work and they get the buzz.

But what if every time they cited your study, you'd get a little kickback, like royalty paid for use of a patent? Think about how much money could be made by infusing the news with ... well, with news. Right now, all the money is in generating opinions and the republic is no better for it. What if it were an investigative reporter who made the big bucks for unveiling a link between DEA officials and Mexican drug cartels, or showing how earmarks have made political donors rich? Think how much more energy would go into revealing what is really going on if that were the case.

A community simply hasn't got a chance to be well governed without a good media. Maybe it is time to less passively wish for good reporting and put in place some laws that actually reward it. It worked with invention.

Like Freddy Krueger

Apparently a real billboard expressing a genuine sentiment. I mean sentimental.

Sacred Cow Sausage

Hopefully we won't take our deficit problem too seriously this year but once the recession is clearly behind us, it will be important to address. Very important.

Right now, the problem seems intractable. When a problem can't be solved, it is time to look in new places for solutions.

Currently, there are three places that are considered sacred for budget cuts, three places we don't even consider as sources for potential savings.

1. Defense. We still spend money as if preparing for a large-scale conventional war. We fund weapon systems long past their "not feasible" expiration date. We don't know the difference between war and occupation. But if you want to lose an election, simply mention the possibility that we might want to decrease - rather than increase - defense spending. We will not get to a balanced budget without changing the assumption that defense spending is sacred. We don't have to spend more on defense than the rest of the world combined and it makes up about a trillion of our three trillion budget. I don't know how you ignore this if you are serious about balancing a budget that is off by about a trillion.

2. Social security. Technically off-budget and its own category, but still leaves a large carbon, I mean fiscal, footprint. When it was introduced, social security kicked in around the time that the average person died: life expectancy and retirement age weren't so very different. Today? Very different. This is simple. For my generation, we have got to raise retirement age by 1 to 5 years. This will make a huge difference in the money collected by and paid out from social security. We can't pretend that the rules for when people retire remain unchanged as life expectancies increase.

3. Medicare and all health care. People are bankrupt by medical costs and this is wrong. Millions are not covered and this, too, is wrong. What else is wrong? Covering expenses that are, say, under $1,000 or even $2,500. This creates overhead for billing, adding costs to health care. It makes us less price sensitive (imagine that filling up your gas tank had a set co-pay of $5 whether you were buying it at $2.50 a gallon or $5.20 a gallon) for services whose price would be lower if subject to price competition. And it makes us feel entitled rather than careful about casually using health care. If we did not cover services under some threshold, we could greatly reduce the cost of administration and coverage. Health care - like defense and security - should be a right. That ought not to be construed to mean that every piddling service we need is something we should pay for through the roundabout means of taxation and government reimbursement.

Right now, we can't seem to reduce the deficit, much less balance the budget. When your current set of assumptions preclude your goal, it is time to challenge the assumptions.

Oh, and one other thing. Even challenging spending on these sacred cows will not be enough. We will have to raise taxes. We may as well make the slaughter wholesale.

A Little Reminder on the Limits of Prediction

Hank Paulson and Alan Greenspan were on Face the Nation today. The former Treasury Secretary and Fed Chairman may well represent as much as we know about economics.

After offering their opinion about what projected deficits will mean for the economy over the next decade, they both very sagely predicted that the Colts would win today's Super Bowl. This was, of course, a brilliant little reminder of the limits of prediction.

Of course, everyone knows that an economy over a ten year period, and the influence of the deficit over economic activity for good, bad, or indifference, is a much simpler thing to predict than a mere game. Because a game, of course, involves the actions of independent agents, the unexpected, herculean efforts, unpredictable strategies, and chance. By contrast, an economy of 300 million people in a world of 6.5 billion, in a time when there has never been more opportunity for innovation in technology or social institutions, has none of that.

The Difference Between Experts and Expectorate

"McCain was in communication with Bernanke and Paulson, too, but to less useful effect. In one exchange with the Fed chairman, McCain compared the causes of the crisis to some recent management troubles at Home Depot. It's kind of like that, isn't it? he asked Bernanke. No, it's not, a flabbergasted Bernanke replied.
[p. 381 of Game Change by Heilemann and Haperin]

When even the man who came close to becoming president doesn't understand the difference between macro and microeconomics*, I suppose I ought not to be so dismayed by what we see among the talking heads and the general public. Of course there is nothing unique about the dismissal of economic experts. The public has rejected the claims of experts from domains as varied as astronomy (well, now that we have pictures we accept the notion that we're hurtling through space at high speeds in spite of the fact that our hair is not blowing back every time we stand outside), climate change, evolution and medicine.

Perhaps in the future, we'll have a series of questions one has to answer about what best we know. It seems probable that we'll know more and better in the future and some of that will refute what best we know now. But I have little respect for people who reject the claims of experts until they can first explain those claims. If you understand current science and theories on these topics and THEN choose to reject them, good enough. Your rejection I can accept. If the only thing you know about what the experts assert is that they are wrong, whatever you're expressing doesn't really even qualify as an opinion: it might just be gas or, well, expectorate.

So, what about a new phase of democracy? We make people take a driver's test before they can get a license and yet bad policy is more dangerous than bad driving. Perhaps we ought to give out different levels of voting license to our representatives in Congress. On some things, anyone can vote. On other issues, one needs a special license. And again, you don't even have to agree with the conventional wisdom - you just have to understand it.

The making of policy is wonderfully public. This is good. Or can be, if the public and their politicians knew when they didn't know. Sadly, too many take Palin's approach.

"Palin was waging a persistent internal crusade to reverse one of the [McCain] campaign's major strategic decisions. ... When her traveling chief of staff, Andrew Smith, pointed out to her that McCain, Schmidt, and Davis had reached their conclusion on the basis of complex calculations involving the polls and the budget, Palin simply shrugged and uttered one of her signature phrases: 'I know what I know what I know.'"
[p. 409 of Game Change by Heilemann and Haperin]

One of my favorite thinkers, W. Edwards Deming, said you could trust a man who knows his limitations. It seems that we could say the same thing about a polity and its media and representatives.

* The difference between macroeconomics and microeconomics is this simple: when Keynes helped to define macroeconomics he essentially said that the whole (the macro) economy has characteristics different from its parts (the microeconomy). Implied in this is the use of fiscal and monetary policy to stimulate or dampen demand but chronic deficits are no more essential to Keynesian economics than atomic bombs are to Einstein's theory of relativity. Keynesian economics does, however, suggest that regional, national, and even global economic policy will need to depend on something other than a laissez faire approach to economics or simply relying on agents within the economy to do what seems best from their perspective.

One Eskimo - Kandi

Been too long since I've posted a song for your enjoyment.

My Analysis of Obama's State of the Union

Talking about the struggles that Americans face in this recession, Obama said, " I hear about them in the letters that I read each night. The toughest to read are those written by children ..."

And I thought, well, yeah. Their handwriting and spelling can make it nearly impossible sometimes.

Multinational Corporation vs. National Government - Multi Wins!

The Supreme Court realizes that the government is no longer the big dog and has rather blatantly rolled over for the corporation. I should be outraged by the various implications of this, but instead just find it inevitable.

This from Jonathan Alter's most recent column about the Supreme Court decision to let corporations put unlimited money into any election.

In oral arguments, Ruth Bader Ginsburg, another dissenter, asked if foreign companies should have the same free-speech rights as domestic ones, since foreign individuals are allowed to make a speech here. The majority had no answer, and opened the door to a Chinese bank or Russian oligarch buying Congress.

Right now, the American political landscape has two camps regarding government and the corporation. One is wrong and the other is irrelevant. Sadly, it’ll probably take about a decade or two for communities to catch up.

One camp applauds the Supreme Court’s decision to let corporations spend unlimited amounts in elections. They rightfully see corporations as the engine for our economy, the creators of wealth and jobs. They wrongfully think that this means that corporations’ interest will dovetail with local communities and thus don’t need regulation.

Another camp is outraged at the Supreme Court’s decision. They rightfully see corporations as more interested in profits than American jobs and more interested in avoiding costs than accepting regulations that lessen the damage to communities through pollution and other egregious acts. They wrongly think that in a global economy the government has much influence over an institution that is so dispersed (we talk about “the corporation” but there are, in fact, thousands and thousands), pervasive, malleable, and quick.

Sadly, while political parties engage in the equivalent of Beta vs. VHS debate, the corporation continues to gain power in ways that don’t necessarily benefit communities here in the US.

The church could not reform the nation-state. Once the state had eclipsed the church in dominance, citizens had to transform the nation-state through revolution. Today, a similar thing has to occur within the corporation. Stockholders and employees – owners of the financial and intellectual capital of corporations – have to transform the corporation from within.

I’m optimistic that this can happen. I’m not optimistic that many people will even try to play this game for another decade or two.

Flag on the Play - Excessive Celebration

Today I heard such a sad story. A friend went to a monster truck show yesterday and reported that what he saw, "was big and loud."
"You're talking about people or things," I asked.
"As a matter of fact," he said, "there was this one really loud, big guy with his shirt off who got handcuffed."
"What did he do?"
"Nothing, really, that I saw. I think that he was just overly excited about monster trucks."

It wasn't like the poor guy was at Von's or in church. He was at a monster truck rally. And was cuffed for excessive celebration. Where else is he going to be able to freely express his passion for monster trucks?

I love baseball, but find it inane that when a guy hits the rare home run he has to act as if he's jogging out to take his position, showing minimal emotion. It used to be that football players at least knew how to celebrate scoring, but apparently the officials thought it bad form for a guy to get excited and they now throw a flag at a player who acts too happy.

I missed the official memo requesting more apathy. Maybe the pharmaceutical companies are behind this, knowing that in order for us to continually swallow our emotions we'll eventually need some sort of chemical handcuffs. Or maybe the real plot is to get us all to stop emoting so that when they begin replacing us with robots we'll be less likely to notice.

Obama Finally Gets His Experience Just as His Support Dries Up

Leadership does not just begin with vision. It begins with getting people to confront the brutal facts and to act on the implications.
- Jim Collins, Good to Great

Again, I feel like a Martian. I’m not sure whether to feel comforted by that or not.
When Bush invaded Iraq, I was aghast twice. Once that he’d do it in response to 9-11 and then that so many people – from media to everyday citizens – would so blithely cheer him on.

A year ago, when Obama was sworn in, I was, like so many Americans, so relieved that Bush was gone and happy to have a new president who seemed so intelligent, thoughtful, and carefully optimistic. The one big concern I expressed at the time was that Obama had no real experience. A year ago, I felt like a part of the majority. It was a little heady.

After peaking in the summer, Obama’s approval ratings have steadily dropped. They are now below 50%. And this is the part that I don’t get.

Obama’s one big weakness last year was a lack of experience. He now has it. And he’s done pretty well. I’ve got criticisms of the man, but he’s largely the cautiously progressive, boldly moderate candidate we elected. He’s kept his calm. He’s put money into infrastructure and education, showing his commitment to making long-term improvements in this country. And he’s shown genuine respect for other countries and won back our standing in the world community. He’s changed tactics, strategy, and even specifics about his goal on health care but has yet to sacrifice direction (moving towards more coverage for more Americans).

I’m still hopeful about this man who writes about the audacity of hope, but now I feel a little less uneasy about him. In my book, he’s proven that he can translate his potential into results. He has experience and the experience is not that bad, in spite of the bad economy and wars he’s inherited.

Bush had a great imagination. I’ll give him that. He wanted to transform a dictatorship in the Middle East into a beacon of democracy within a couple of years. Given such a thing has never happened in the history of humanity, such a goal showed great imagination. But he showed little acceptance of the world as it is.

By contrast, Obama has yet to show much imagination but he has seemed to show a real acceptance of the world as it is. He seems very realistic.

And to me, this explains why Obama’s approval ratings have steadily slipped. He hasn’t promised that anything will be easy. He has not claimed that in reality we’re well positioned. There is nothing exciting about confronting a reality that is full of issues as difficult as climate change, two wars (well, occupations really), the worst recession in a century, and health care costs that are steadily eroding salaries and competitiveness.

Yet the potential that comes from honestly addressing reality as it is, well that’s a potential for great achievement.

For me, Obama is addressing the real issues with real solutions. There is nothing easy, exciting, or quick about this. Drucker once said something to the effect of, “even the grandest strategies eventually devolve into real work.” And yet it is work that, finally, works.

I actually feel better about Obama now than I did a year ago. I guess this puts me back into the minority. But you know, after 8 years of watching Bush, I get some comfort from that.

A New Kind of Manager

I suspect that in the future, work teams will increasingly be coordinating their activities through the Internet and be less reliant on companies. And this will set the stage for a new kind of manager.

Decades ago, if you had told a new recruit that people would pay for the (admittedly kinder and gentler) experience of boot camp, would HIRE someone to push them beyond what they'd do on their own, they would have laughed at you. And yet (probably) millions of people hire personal trainers.

One of the biggest differences between the personal trainer who pushes you and the drill instructor who pushes you is whether the experience is voluntary. The person who is drafted - or even volunteers - has no choice about the experience, however "good" it may be for him. And in this I think that we potentially have a new model of management.

Imagine a future where managers are brought in by teams who realize that they need someone to coordinate their efforts, even to push them at times, in order to realize their potential. Such a model is not so very odd, really. Personal coaches are very common, but personal coaches work with individuals.

Management is a really crucial skill. More so as our world and projects become more complex. It's probably not enough to leave tasks to individual initiative, even if we have more natural (e.g., market) consequences and inducements for such tasks. Able managers will probably always make a good living.

But one of the big problems with current institutions is their reliance on extrinsic motivation - the use of carrot and stick to make things happen. Employees, like the boot camp recruit, have little or no choice about what to do or any ability to define goals or the tasks they want to try. These are assigned. This is good enough in a world where products are scarce and the definition of economic goods is generally limited to goods to have.

Philosophers talk about three kinds of goods: goods to have, goods to do, and goods to be, each higher and more meaningful than the last. Economic progress will shift soon from an emphasis on economic goods to have to economic goods to do. Work is an essential part of this. (We know that Darwin, Jonas Salk, Galileo, Michelangelo, and Andrew Carnegie were historic figures. We tend to forget that they defined themselves - and our civilization - by their work.) And as people come to work more often as a way to (in part) create goods to have and (in part) create for themselves goods to do, a management that is based on intrinsic rather than extrinsic motivation will be essential. The drill instructor you have no choice but to obey is replaced by the personal coach you hire to help you to realize your potential.

Of course the paradox is that as we focus more on intrinsic motivation and goods to do, we'll actually get more and better goods to have than in the old system. People who are intrinsically motivated are typically more creative, more productive, and do higher quality work. Call me an optimist, but one reason that I'm convinced that such a model will eventually emerge is because it gets better results.

Management as a service rather than form of control. Think about it.

Lower Taxes? Why Not NO TAXES?

Fed quietly posts record $46.1-billion profit in 2009.

I find this promises a fascinating alternative to us actually paying taxes. The Fed has enormous influence over interests rates and even exchange rates and, of course, stock and bond markets. It seems to me that with a proper amount of cunning, the Treasury Department could regularly generate profits. I'm waiting for Sarah Palin to take the "no new taxes" pledge to the next level, campaigning with the slogan, "No taxes."

That would, of course, give us years to figure out how to make up for the fact that all this manipulation would leave our investment portfolios stunted like bonzai trees in a redwood forest. But then again, having to work until you die would sting less if you knew that your income wasn't being taxed. I would hope.

A New Olympics

Games mirror life in that they require some mix of skill and luck and have uncertain outcomes. One reason we love games is that that while we may be unable to predict whether we'll win or lose, we know what game we'll be playing when we're done.

By contrast, the game of life has uncertain rules and we may find ourselves playing a game we hadn't started out in. A man eager to show how smart he is may soon find that he is, instead, playing the game of how gracious he can be. A person who thinks that life is all about making money may suddenly find herself playing a game of soul searching. Life has a funny way of changing the game on us and it is not just that we can't predict whether or not we'll win or lose but even what game we'll be playing.

So, I propose a new kind of Olympics, one that more closely mirrors life. Figure skaters will find themselves suddenly sprinting and archers will find themselves performing the high dive. It will - as with life - be a test of one's ability to adapt to something one did not sign up for. We'd call it, "The whatever life throws at ya'" Olympics. Or something like that. It might just be the best reality show yet.

Ill-Timed Fiscal Responsibility

Imagine the kid least clear on the topic getting to deliver the lecture in class and you get a sense of what happens to economics in a modern democracy.

Democrats are talking fiscal responsibility now. They've heard from their districts that Americans are aghast at our level of deficit spending. And, of course, Republicans have been harping on deficits ever since spending plans have shifted from the military to health. This is terrible timing.

Geithner and Obama have both signalled that they're aware of the need to reduce deficits and that they dare not do it too soon at the risk of tilting us back into a recession.

When the economy was expanding, the Bush administration ran chronic deficits and hardly a word was said. This was ridiculous. Large deficits during good times guarantee huge deficits in bad. And deficits in good times just fuel speculation, price inflation, and new ventures that cannot be sustained. It is during good times that we ought to speak out against deficits but it is during good times that a people feel they can afford to take on such debt.

During bad times, there is a sense that we spent our way into financial trouble and this reckless spending ought to be stopped. Americans in particular have always been uneasy about credit. Few remember that commercial credit met as much opposition in the late 1800 and early 1900s as homosexuality meets today: the apostle Paul wrote more clearly and as often about avoiding debt as he did homosexuality. We get very moral about debt during bad times. This is unfortunate, like getting squeamish about blood during surgery.

Deficit spending is necessary during bad times and is - at best - an annoyance during good. Economics is, of course, continually subordinate to popular opinion in a democracy, so what makes for good policy matters little. Lots of people claim that medicine is a conspiracy but the individual who believes in modern science and medicine can still visit a doctor: if enough people see economic policy as a conspiracy rather than the best we know, all of us get banned from seeing the doctor. Talk show hosts who fell asleep during economic lectures will fume and sputter and callers will chime in with their outrage and these kinds of people will send letters, organize voters, and set policy.

Keynes was a genius but there are lots of coffee shop diners who understand economics better than he did (and, presumably, understand physics better than Einstein). For the record, Keynes recommend government surplus in good times and deficit in bad. Right wing talk show hosts recommend the opposite. You take a guess as to who can be trusted more.

Doug & Bob Host the Winter Olympics

Last week, we went to Whistler where the downhill events for the 2010 Winter Olympics will unfold. Shockingly, the road north from Vancouver is only two to four lanes. Think about it. Spectators from around the world all converging on these Olympic events and the road to it has one lane feeding into it. I can only imagine that parking lots in Beijing had more lanes feeding into them.

A family friend lives close to Whistler and she showed us the stage (they are still constructing? have constructed? hard to tell) that will be used for the awards ceremony. Canada does a lovely job of building parks around town and the next day I saw a little pavilion in an obscure park we frequently walk through when visiting my in-laws - a park that never seems to have more than about 4 people in it. This little pavilion seemed about as nice and as big as the Olympic medal stand in Whistler Village.

The folks around Vancouver can see through the hype to the big bill that comes with the event. They are, at best, seemingly ambivalent about it.

Someone needs to do a skit with Doug and Bob hosting the winter Olympics - the symbol of Canadians apparent disinterest in playing host.

Imagine Doug walking you through Whistler's Village, past the medals stand. "Yep, over there is a log you can stand on to get your medal. And, uh, when you're done we can go get a beer to celebrate, eh? And maybe by the time we've had a few beers, eh, all those people who were driving up to watch your event will be here. It's too bad your folks got stuck in traffic. They would have been real proud, yeah."

The Too Much Information Age

Too much information is as bad as too little.

As it turns out the would-be terrorist Umar Farouk Abdulmutallab, who tried to bring down a flight from Amsterdam to Detroit, was on a list of about 550,000 potential suspects who might qualify for the TSA no-fly list.

What the media seems unable to distinguish between is problems from a lack of information vs. problems from no information. Sure Umar was on a list - but he had not been evaluated as yet to determine if he was a real list. Your most powerful tip for 2010 is in the stack of magazines in Barnes & Noble that you have yet to read. Not only have you not yet read them, you have not figured out which of the tips is THE one that will transform your life in 2010. The government has essentially the same problem finding and making sense of the tetra bytes of information that might be relevant to security.

If we had the capacity to turn all noise into signal, we'd have about half the country sifting through information for real vs. imagined threats. Too much information is at least as bad as too little. It would take you years to read every magazine in Barnes and Noble - and when you were done you'd only know about the current week. Too much information is as useless as too little.

If we were to staff properly to evaluate every potential or reported threat in real time, Osama bin Laden would achieve his goal of bankrupting the country and subordinating all travel and commerce to bureaucracy that had to evaluate every package and person entering the country.

It is still not obvious that anything went wrong in the process that allowed Abdulmutallab into the country. If anything, it was simply a reminder that no one is ever completely safe.

People with bad allergies won't die from, say, milk but could die from their reaction to it. Terrorists won't destroy our way of life but our reaction to them could.

The "Oh Nothing" Decade Is Ending

Last decade was the 90s. The decade before, the 80s. This decade just ending? We ought to give something phonetic to the 00s. I suggest the Oh nothings.

First we had the Y2k bug. Computers would crash! The market would crash! Airplanes would crash! We spent billions converting computers and software. Wait a minute. You mean all the computers are fine? What is it? Oh, nothing.

In 2000 we heard, it's a new millennium! Everything will be different! Everyone will be rich with tech stocks. Robots will bring your slippers. It'll be wonderful! Wait? What is it? Where are my millions? Where are my slippers? What did the new millennium bring? Oh, nothing.

When George W. Bush was sworn in, there was a measure of excitement. We have a new compassionate conservative! We're bringing morality back to the White House. A non-partisan approach. Leadership and wisdom. Wait? What? What is he saying? What is his IQ? Oh, nothing.

9-11! Terror! The world is ending! Lives are in danger! The economy will collapse! Wait. No more attacks? What are is Osama doing now? Oh, nothing.

Invasion of Iraq! Our troops may face fierce resistance. We'll find WMDs! Wait? What? You've found ... oh, nothing.

Blogging was going to give everyone a voice. Make us all famous. Allow the little guy to hold politicians accountable. It was going to change .... oh, nothing.

Rebuilding Iraq. A light of democracy in the middle east. Peace at last. Prosperity for those poor Iraqis. We'll give them ... oh, nothing.

Obama won the election. He was going to get us out of Iraq and Afghanistan. Close GITMO. Get the economy going again. End greed on Wall Street. Change the world as we know it. He was going ... what is that you said? Troop surge? Unemployment in double-digits? What has he changed? Oh, nothing.

This last year, we heard that the economy is going to crash. We'll have a Great Depression! Banks will fail! Everyone will be homeless! Wait. The economy dipped a few points and then started to rise again? What is going to happen? Oh, nothing.

In the end, the events of the decade seemed like those teaser leads the TV news uses to bring you back from break, hoping that by the time the commercials are over and they tell you the actual story you won't realize that it was ... oh, nothing.

Maddie on Men

"There are two kinds of men," Maddie finally offered. Maddie's older brother Bernard and I had been talking about women and relationships and she had been quietly listening. Finally, inevitably, Bernard and I stopped to catch our breath and she was able to talk without interrupting.

"Two?"

"Yes," she nodded. "Men who don't have a clue about women and men who don't have a clue that they don't have a clue about women."

I wanted to respond. I was not sure what to say.

Bernard's confusion did less to silence him. "Oh c'mon, Maddie. That's a cheap shot. There are men who have a clue."

"Really," she raised an eyebrow.

"Sure. There are women happy with the guy they are with. They even say as much."

"They are with men who don't have a clue that they don't have a clue." The way she said this did not seem to allow the least questioning on our part. "Those men are sometimes easier to be with." She paused. "Sometimes."

"What do you mean?"

"Well," she paused, her finger tracing patterns in some spilt salt on the table, "men who don't have a clue tend to give up. They are like deer in the headlights. Or potatoes on the couch. They don't try anymore because they haven't a clue about what does or doesn't work or what to say or what not to say. Men who realize how little they realize might be less delusional, but they are not really better.
"Now men who haven't a clue that they don't have a clue can actually be coaxed into doing certain things. They are easier to engage. They say the wrong things but they can be coached into saying some approximation of the right thing. They do the wrong things but ... well at least they still engage with you. Handled properly, they can be enjoyable company."

Bernard and I sat quietly for the first time all evening. I had suddenly lost all confidence about what I could say.

"Is knowing that there are just these two types of men the first clue," I finally asked.

Maddie laughed. "Oh Ron," she said. "You know, there might be hope for you yet."

"You think there is hope for me to actually get a clue," I asked, my voice betraying my hope more than I had wanted.

Maddie laughed even harder. "No, silly. I'm just saying that there is a chance that you might be one of those men whose sense of delusion could be put to good use." And then she laughed again. I did not.

Facts Just Aren't News Any More

I used to rely on Newsweek for a recap of the week. A way to make sense of the headlines I'd seen in passing. Newsweek has apparently fired their reporters and hired columnists.

Don't get me wrong. The columnists are great - Fareed Zakaria is insightful and Sharon Begley is the kind of science writer who makes us laymen feel a little smarter by the end of her piece.

The good news is that these columnists seem to have opinions that they generally subordinate to facts. The bad news is that it is no longer clear where those facts come from. Apparently investigative journalism is now too boring or expensive or risky. Their opinions may be more balanced and nuanced than that of Rush Limbaugh or Keith Olbermann, but it is still opinion.

In retrospect, this may have been inevitable. Our generation has grown up with the same main stories. Unrest in the Middle East. Celebrity scandal. Questionable American military involvement in [fill in the blank]. Fiscal recklessness. Lots of health care debate but little health care policy. Global competition eroding American industries. The facts, apparently, change little from news cycle to news cycle. Opinions, it would seem, are less constrained by events and easier to tailor for consumption. But even so, once you've taken the news out of Newsweek, it seems a little weak.

Report on the Senate, for the Senate, from within the Senate

After 23 years in the Senate, John McCain made this observation:

"I must say that I don't know what's happening here in this body, but I think it's wrong,"

I think that McCain's comment should be put onto t-shirts and given to freshman senators to wear as they sit through sessions.

Is the Bottle Half Empty or is That a Frontal Lobotomy?

"I belong to no organized political party. I'm a democrat."
- Will Rogers.

It looks as though the Democrats have failed to pass health care legislation.

As frustrating as I find this, I would rather a party that failed to do the right thing than one that succeeded at doing the wrong thing.

But really, is it too much to ask to have 8 years when we've either got a party that continually fails to do the wrong thing or actually succeeds at doing the right thing?

Religous Power

Reading again about the atrocities of the medieval church and religious wars and acts of terrorism since, it occurs to me that we ought to have a very simple rule about religious power.

Any religious group is allowed to exercise as much power as they wish - power to damn or kill abortionists, gays, atheists, Anabaptists, Muslims, politicians, people who walk funny or people who reject Joseph Smith. Seriously. Of course, given that it is religious belief we're talking about, it seems only appropriate that there be one catch to this: exercise all the power they want as long as it is supernatural power. If you can direct the wrath of God, you ought to be taken seriously. And further, you don't even need a political process.

Golfing's Best

Although it is touted as the ultimate in golfing, it seems as though the hole in one was not enough for Tiger Woods.

Good News for Planning: July 2011 is Firm

In reporting on the new Afghanistan strategy,

"The July 2011 date is firm, Defense Secretary Gates said, but conditions will dictate how many troops would be withdrawn then, and at what pace. Much will depend on the training of Afghan security forces, he said."

So, when Gates says that the July 2011 date is firm but what they do will depend, is he just saying that the administration is resolved that the actual month of July 2011 will not shift around in time?

I'm sure that it is a comfort to Afghans and Americans alike to know that the Obama administration is committed to the Julian calendar. Now if only we knew whether it is committed to withdrawal.

The "Done Nothing" Accusations Thrown at Obama

Obama has done nothing. Of course it has not yet been a year, but he has no accomplishments to point to except some arguments about how job loss would have been worse without his stimulus package (a package that included financial industry bailouts that began with the Bush administration).

The truth is, we don't know what Obama has accomplished. Or, rather, won't for some time. And simply judging from my own experience of life, I am actually assured by his apparent lack of progress. For now.

I've been blogging less and reading others' blogs less. The reason for this is simply that I've been diverting my writing energy into a bigger project. For now, it would seem obvious that I'm doing less. I'm not. But what I'm doing is higher risk. No one else may ever see it and it may amount to nothing.

I don't fool myself about my blog postings having any impact, but it is gratifying to hit the "publish post" button and have "done" something. I quite like that. The posts may have little or no consequence but my accomplishments seems obvious.

By contrast, the writing project I've been working on is far less likely to be published and even if it does, it is unlikely to have much more impact than my posts. I am doing something - more, even, then when I was at my peak of blogging. But there is little to report. I'm just working on the project. And will be for months - maybe a year. It doesn't sound very exciting but completing this project will be more exciting than anything I've done in the last decade or two. And it has the potential to have much more impact than the hundred-some posts I could publish in the same time. It will, in any event, be more consequential than a string of unrelated posts. For reasons like this, I believe that invisible progress is often the best progress.

So let's return to our president. He could do things to keep the 24-hour news channels happy, the equivalent of presidential blogging. Lots of little publicity opportunities, legislative initiatives and the like that generate news but probably won't change history.

Or he could take a big risk and put himself into a project like health care reform. He may not get legislation passed. Or it may be bad legislation. This is very high risk. But IF he succeeds, when history is written this will be an accomplishment as big as or bigger than that of any president in decades.

I have found that there is a negative correlation between how much I'm doing in any given week and what I can report at the end of the year. The projects that are worth talking about are few and take a long time. By contrast, if I "stay busy" I seem to inevitably wonder what it was I did later. Things that can be done quickly are generally disposable.

In a similar way, Obama's project is something that will look better at the end of his term than it does on any given news cycle. He's trying to do something big. To judge what he's done now is like a father grousing about how his son - in his second year at university - sure hasn't made as much money as the neighbor's kid who went right into landscaping. You've already given the man four years. Let him use it.

Chapter Two of Chapter One (Haven't We Read This Sentence Before?)

Bush thought that once he'd toppled the Taliban and Hussein regimes in Afghanistan and Iraq, democratic nation-states would just emerge. Nation-building has proved to be a little more complicated.

I'm not clear that Obama appreciates the difficulty of nation-building either. Given the state of the state in Afghanistan, it seems to me that we have two choices: stay for a generation and massively subsidize education and development to build something akin to a modern nation-state or essentially withdraw from the country and contain its military threat. I think those are wretched choices, but building roads or securing check points into major cities for a year is not the same thing as building a nation or securing its people. Nation-building isn't measured in months but in decades. It has as much to do with reconstructing the minds of people as their towns.

And yet Obama is going to send in a surge of 30,000 more troops but only for one year. Because that is all that Bush got wrong; he was just short by tens of thousands of troops and 10 to 12 months.

It's not even obvious to me that Obama is all that sold on his own plan. His speech lacked the snap of his campaign speeches, sounding like lots of blah blah blah. (Is there a rule that when you send troops to war you talk in platitudes sure to reverse the adrenalin rush of war?) It wasn't obvious to me that he owned this speech.

This is like projecting deficit reduction after this year of deficit increase. I simply don't see how 30,000 troops will change things so much over the course of a year that withdrawal will be any easier. How is war like snorting heroin? It's terribly destructive but hard to quit. Next year at this time, expect a mid-course correction from Obama. Something about the need to keep troops in country just 6 (or 12) more months.

Central Europe's Disturbing Intolerance

It seems a truism that inland regions are less tolerant. People who live on coasts around ports have been continually exposed to a variety of skin colors, religious persuasions, cultures, and lifestyles. Fewer people come through Nebraska than New York or San Francisco; fewer people come through Serbia than England. Insularity seems to make people intolerant rather than curious.

Which brings us to Switzerland's stunning vote to ban "the construction of minarets, the towers that typically stand adjacent to mosques and serve to issue the Muslim call to prayer."

The Swiss speak four languages and would seem a model of diversity, but it is also worth remembering that it wasn't until 1971 that they granted women the right to vote. These are not progressives.

So I guess one ought not to be surprised that the Swiss felt threatened by the construction of Muslim edifices. Muslims, of course, make up nearly 4% of their population and are obviously a threat to the country's laws and mores.

It seems to me, though, that the Swiss have got it backwards. Rather than ban the construction of minarets, they should insist that every Muslim household build one atop their domicile, making it easy for anyone else to see where they are. And once they've done that, I see no reason why they couldn't require Muslims to wear tattoos on their forearms.

If they want to borrow from the playbook of religious intolerance, Central Europe has plenty of examples to draw from. If they are heading down that path, they should know better than to ban the symbols of religious difference that could, instead, be used to identify minorities.

Now Considering Offers

Non Sequitur

I'm Not Unemployed - I'm Running for President

Lou Dobbs has gone from an advocate for the laid-off American to role model.

I've always been a little ambivalent about Lou Dobbs. I can't say that I've followed him closely (although to be fair, I've paid far more attention to him than he has to me), but I admire that he's realized the real economic issue is stagnating wages for the average person. I don't like that he translates this into a protectionist, anti-immigrant platform. He might have the wrong solution but at least he has the right problem. With that said, my ambivalence has changed to admiration.

Two weeks ago, Dobbs was laid off from CNN. Many of his fans could likely relate. And now Dobbs has done something completely inspired: he's announced that he's running for president.

Think about this as a means to cope with the trauma of getting laid off. Imagine yourself at a job interview.

Interviewer: So, you have been laid off for, uh, three months now?
You: Not really. I'm actually in the early phase of announcing my candidacy for president. I'm discussing options with various people.
Interviewer: So you are not laid off?
You: No, not technically.
Interviewer shifts in his seat, scratches his head: Well, are you collecting unemployment?
You: Yes, but only to better understand the economy.

Think about it. No awkward gap in your resume. "Financial Analyst at GE, 2005-7, Project Manager at GE 2007-9, Presidential Candidate 2009-10." It is a bold move that would show that you are goal oriented and willing to think outside the box. And it makes being ignored by dozens of prospective employers seem paltry in comparison to being ignored by millions of prospective voters.

Lou Dobbs may have just gone from spokesperson for the working man to role model. I know that the next time I'm laid off, I'm running for president.

Arrogance

Arrogance is just nature's way of telling you that you have stalled in the quest to realize your potential. If you've mastered something, it's time to integrate it into some larger goal. If you're not humbled by what you're trying to do, you're not stretching yourself very far.

And Healthcare for All ....

We're on the first step towards turning healthcare into a right rather than something one needs to earn. I should feel wildly enthused about this, but instead I feel a little queasy.

In the last decade, we've committed trillions to foreign occupation, stabilizing our banks, and now, healthcare. We fund doctors, bankers, and soldiers. The lesson is clear: go to college or join the army.

Legislation to provide universal healthcare is both wonderful and awful. Wonderful because we finally say that everyone deserves it. Awful because the bribes needed in order to pass this legislation are going to cost untold billions. As expensive and as uncertain as war is, at least everyone gets excited about it. Congress votes for war to prove their courage and because they are scared to death that they might lose their seat if they don't. By contrast, supporting healthcare has little going for it so the legislators hold out for a series of bribes, the most obvious being the fact that this bill does little to curtail healthcare costs (at the same time that it guarantees that the government will cover the cost) and the fact that even families making 400% of poverty level ($88,200 per family) are eligible for tax credits. (If you have to subsidize nearly everyone in order to afford the legislation, doesn't everyone have to pay for the subsidies?)

Coverage has been expanded but taxpayers aren't paying more and the the healthcare industry is not accepting less revenue. That only means one thing: we're subsidizing the medical market AND the bond market.

Universal healthcare is a wonderful thing - or would be, if only our democratic process weren't so sick. This is the same country that during our invasion of Iraq, for the first time in our history gave a tax cut while going to war. Now, the quiet and seemingly thoughtful Obama may prove himself as reckless as Bush by passing legislation for a tax cut and universal health care in the same year. This kind of fiscal recklessness just seems unhealthy.

Time for a New Ritual

For all our understanding and tendency to pity "more primitive" civilizations, we don't do particularly well at ritual. And the modern world has seemingly created the necessity for a new one.

Someone told me that that as life expectancies increase, we're going to encounter more cases of dementia. My aunt has just gone through the trauma of being verbally threatened by her husband of 50+ years, a man who has such severe Alzheimer's that he no longer recognizes her and, for her safety, he has just been institutionalized. She says that the man she loved is no longer there. I think she's right. We need a new way to acknowledge the "death" of a person that precedes the time when their heart stops.

I'm not sure what this ritual would look like, but it would probably be somewhat like a funeral. Perhaps a ceremony in which loved ones mourn the lost, shared memories and praise the "dead" personality they once so loved.

Whatever the actual ritual, I do feel strongly that we need a new designation for those who have "passed over" into a mental confusion and fog so thick that they've lost themselves and everyone they know. Their loved ones need a ritual to deal with the fact that they're "gone."

Without such a ritual, the poor family members have no real way to deal with their loss, or are left to process this without any closure. Perhaps a simple ritual could help.

Better than Gold

The price of gold has soared as every other market has behaved more erratically. Apparently the thinking is that gold is a safer investment in bad times, even good for a spectacularly post-crash, or even post-apocalyptic world.

I still don't understand the allure of gold. It has value in dentistry, say, and jewelry, but that would probably account for about .1% of the demand for it. Of all the magnets for capital, it seems to me one of the most useless.

If you really do think that markets are going to collapse and society is breaking down and want a hedge against this, don't buy gold. Buy canned goods, bottled water, and toilet paper.

Freedom's Just Another Word ... Happy Veteran's Day!

Anxiety is the dizziness of freedom.
- Soren Kierkegaard

“The true end of Man … is the highest and most harmonious development of his powers to a complete and consistent whole. Freedom is the first and indispensable condition which the possibility of such a development presupposes; but there is besides another essential – intimately connected with freedom, it is true – a variety of situations. Even the most free and self-reliant of men is hindered in his development, when set in a monotonous situation.”
- Wilhelm von Humboldt

“Why should freedom of speech and freedom of the press be allowed? Why should a government which is doing what it believes to be right allow itself to be criticized? It would not allow opposition by lethal weapons. Ideas are much more fatal things than guns. Why should any man be allowed to buy a printing press and disseminate pernicious opinions calculated to embarrass the government?”
- Vladimir Lenin

“If I were to give liberty to the press, my power could not last three days.”
- Napoleon Bonaparte

“How can knowledgeable, reasonable, pragmatic men work for their own servitude, thinking they're struggling for their freedom? That … is what is called ideology.”
- Bernard-Henri Levy


“The idea that men are created free and equal is both true and misleading: men are created different; they lose their social freedom and their individual autonomy in seeking to become like each other”
- David Riesman, The Lonely Crowd (1950)

“The moral is to not set yourself goals which don’t leave you any freedom to maneuver.”
- Sidney Ross

“If there is anything in the world a person should fight for, it is freedom to pursue his ideal, because in that is his great opportunity for self-expression, for the unfoldment of the greatest thing possible to him.”
- Orison S. Marden

“Nobody can give you freedom. Nobody can give you equality or justice or anything. If you’re a man, you take it.”
- Malcolm X

Most people do not really want freedom, because freedom involves responsibility, and most people are frightened of responsibility.
- Sigmund Freud

I believe we are on an irreversible trend toward more freedom and democracy - but that could change.
- Dan Quayle

“Much of our business culture is infatuated with power – amassing it, holding on to it, using it to vanquish competitors and dominate markets. In contrast, much of Dr. Beyster’s leadership philosophy is about spreading freedom. And freedom, it turns out, packs a bigger wallop than power. Power is about what you can control; freedom is about what you can unleash.”
- William C. Taylor

Transcending Parenting

Of course the thing that no one admits is that the life of the child transcends our feeble attempts at parenting. Fortunately, the child is not any more limited by our parenting than is our brain by our understanding of it.

We have this conceit that we have to get parenting right or the child will turn out poorly. I don't intend to be glib about the danger of scarring a child, but I do know that the life of any person is more complex, more nuanced, more able than the parenting effort that went into it.

And whether you're a parent or a child, you can take comfort in this thought.

Partisan Politics

Healthcare made it through the House with only 1 (that is one) Republican vote. This discomfits some and is fuel for pundits who can now criticize the president who promised to be non-partisan.

It escapes me, though, how Obama could ever arrive at a non-partisan approach to legislation that Republicans just don't want. If you are going to war, you aren't going to work out a solution with the pacifists. For them, it is not how you approach the war, it is the very fact of war they oppose. In the same vein, if you are going to offer universal healthcare, you aren't going to work out a solution with Republicans. For them, it is not how you approach universal healthcare, it is the very fact of universal healthcare they oppose. How anyone can reach consensus with someone who simply opposes your goal escapes me.

My GRE Scores

At first blush, it would seem as though my daughter did considerably better than me in her GRE scores. But then I realized that, given about 20-some years have passed, my inflation-adjusted scores are much higher than hers. My verbal score alone would be worth about 1,700 by now. And that doesn't even take into account compound interest. I'm probably in the 144th percentile by now, and would probably be even higher if they had a special category for self delusion.

Transformational Education

Wouldn't it be fascinating if education actually gave students practice at transformation?

Imagine that the first two years of high school and last two years of university are roughly what they are now, but the four years in between actually lead students through transformation. Along with - or even more than - the knowledge they gain they'll learn how to change themselves. Let me explain.

Year three of high school - year one of their transformation - students would go through something the equivalent of boot camp - or Navy SEAL training. The emphasis would be on physical transformation, on taking orders, on becoming part of a well oiled machine. Students would be run through grueling routines of rote learning, high-stress problem solving, intense physical conditioning, and experience a radical change in their fitness levels and levels of discipline.

Year four of high school - year two of their transformation - students would go through something equivalent to that of an initiate in a monastery. They'd go through long periods of silence, intense meditation, empty days and days full of manual labor or service, a giving of themselves to something higher, something more ethereal and experience a change in their spiritual and psychological awareness.

Year one of university - year three of their transformational series - students would go through something akin to a reality show make over. They'd be taught the latest in styles, how to negotiate and present themselves, be exposed to motivational speakers, given access to plastic surgeons, and taught how to make a profit, developing their economic and business selves.

Finally, in year two of university - year four of the big transformation - students would be taught musical instruments or art and be seeped in philosophy, taught to be skeptics, smoke unfiltered cigarettes, and have long discussions about the meaning (or lack of meaning) of life and question the system. They'd be made into mad bohemians who know jazz music and abstract art and realize that everything is made up - be in on the secret that the modern world is just a social construct.

Then, in years three and four of university, when they choose a major they will realize that this is way of being they are adopting AND they will be practiced at transformation. Even more importantly, having experienced these very different ways of being, they will actually make a choice about who they will be based on having experienced different ways of being. They will have practice at change and will know how it is done. Some may revert to the bohemian philosopher role or the good soldier role. Some may just create a brand new way of being.

Too much emphasis is put on the information we put into the container of a life and not enough is put on the transformation of the container. New wine into old bottles does little to change the world.

And for those of you who think I am joking, you obviously have not been paying close attention to what I write here. Think about it: rather than prattle on about transforming education, what if we instead emphasized transformational education?

Inerrant Religion

To provide a sense of certainty, the Catholics argued that the Church - most simply represented in the office of the pope - was inerrant and the ultimate source of authority. The Protestants scoffed at this obviously ludicrous claim and pointed instead to the Bible as the source of inerrant truth.

As it turns out, they were wrong. There is nothing inerrant. Typos, errors of judgment, muddled ideas and flat out mistakes and contradictions populate the mouths of popes and the pages of the Bible. The point is not certainty but wonder - not ultimate authority but what inspires - not the absence of mistakes but the courage to make them. Respect for the other would seem to include respect for the other interpretation, the other viewpoint, the other's convictions.

Maybe the humility and caution that comes from an awareness that I might be wrong is what allows anything approximating love for others - particularly if love includes showing something more than token respect for, and listening to, the other.

What if Free Markets Really Were Free?

“The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”
- Warren Bennis

Increasingly, the digitized world is making products free: movies, music, articles, books ... even the software that lets "customers" get these products for free.

Perhaps it is no coincidence that as the portion of free goods we consume rises so does unemployment.

Maybe in the future there will be good news and bad news. The good news will be that everything is free. The bad news is that no one will have jobs.

In such a world, conspicuous consumption will take on a new urgency. Economically, there will be little else to distinguish us.

The Right's Sudden Interest in Deficits

The Obama administration gets the honor of presiding over the biggest deficit in history. This year's deficit is an outrageous amount - $1.4 trillion, or about 10% of GDP. The right pretends to be sincerely outraged at this. They are not. The right could care less about deficits - as their re-election of dubya proves.

Obama inherited a deficit of $1 trillion and added to that another $400 billion to offset what looked to be the worst downturn since 29. Just a few years in, Bush had turned Clinton's last year surplus of $128 billion into a deficit of $377 billion - a reversal of about $500 billion. $400 billion in 2009 vs. $500 billion in 2003? If critics are outraged at Obama today, where were they in 2003?

If Bush had continued with Clinton's fiscally conservative budgets, continuing to run a surplus rather than chronic deficits, two things would have happened. One, the bubble would have been less pronounced. Might not have even happened. George Bush stimulated an already growing economy. It is no surprise that prices of equities and homes ballooned given his one-two punch of tax cuts and spending increases. Two, the government would have had much greater ability to stimulate the economy a year ago when GDP did drop. Imagine deficit spending from a position of surplus rather than huge deficit. How many more options would we have had? And the stimulus would not have been done with the constant worry of currency devaluation, or spending backfiring as government borrowing crowds out private borrowing.

So, next time someone you know starts in about how awful it is that Obama is running up such a huge deficit, just inquire, "Have you flip flopped on deficits? Wasn't a vote to re-elect Bush and Cheney affirmation of Dick's little quip that deficits don't matter? Now they do?"

Dithering

It's no so bad to impulsively ask someone on a date but it seems insufficient as a basis for marriage. Dick Cheney has criticized Obama for "dithering" on his decision about what to do in Afghanistan. Assuming that Cheney's disdain is not proof enough that dithering is worth doing, here's something to consider.

Think about the implications of Obama's decision.

If he pulls out, we risk alienating any ally dependent on our commitment to their cause, risk destabilizing Afghanistan AND Pakistan, lose our ability to encourage the humane treatment of girls and women, lose a potential base in a region of the world that could explode into conflict, and provide the Taliban with a safe haven for plotting and launching the kind of attack that turned the date 9-11 into a tragic event.

If we stay, we continue to pump billions into a cause that has little chance of success, we lose more troops and alienate Muslims by continuing to kill both soldiers and civilians in the area, we are distracted from relationships that will do more to define our future (e.g., our relationship with Pakistan or India, for instance), pay an opportunity cost in terms of less money to spend on things like AIDs in Africa, pandemics, health care in the US, and every other single issue or problem or possibility to which the money and attention could be applied.

It is not just that the first order consequences are important and potentially counter intuitive; the second and third order consequences are worth spending time thinking through. I am going to assume that Obama is doing just that and think it is perfectly fine that he takes his time.

Time will tell, but I'd like to think that Obama is playing chess on the same checker board where Cheney was playing bumper cars.