Saturday, January 31, 2009

With Respect to Respectablity

Mr. Patrick Quinn, the Illinois lieutenant governor, was sworn in as interim Illinois governor this week. For those who have been living under rocks, Mr. Quinn replaced Rod Blagojevich, whose impeachment trial ended with his removal from office by unanimous vote of the Illinois Senate.

Pat Quinn, by all accounts, is a rarity in politics. Quinn stays in Super 8 motels (he can show you his Super 8 Discount card) and eats at no-frills restaurants when he travels. He first achieved political notice as what one commentator called "a champion of the little guy," leading a successful petition drive to amend Illinois law by expanding the people's right to referendum and recall of Illinois officeholders (only to see it disallowed in court). He once walked 150 miles through Illinois to promote a health care initiative, and he has fought successfully to fund greater benefits for veterans of the armed forces and current military families. Definitely Main Street. He also has headed for years a group called the "Coalition for Political Honesty" (!) It should come as no surprise, then, that the Illinois political establishment, embarrassed by the arrest of Mr. Blagojevich and subsequent revelations of his expletive-peppered pay-to-play scheming and bizarre talk-show swan song, has seized with relief on the respectable Mr. Quinn. His quiet, humble resemblance to Gerald Ford (Quinn's own comparison), who stepped in to replace Richard Nixon after the Watergate scandal, is playing well in Springfield. Quinn declared, after reciting the oath of office, that he would set himself to the task of "fumigating" public life, to rid his state of corruption.

In the respectability sweepstakes, even the Republicans tried to get into the act this week, electing, after six ballots, Michael Steele, an African-American, to head the Republican National Committee. The field of contenders had narrowed, in the final ballot, to a race between Steele and a gentlemen who had recently resigned his "whites-only" club membership. Steele was one of two black men in the filed of five male candidates for the job. The man who had led the party during the Bush years dropped out after the third ballot.

Although Republicans are noisily proclaiming a "new day" for their party, one has to wonder if the election of Mr. Steele has a bit more in common with Mr. McCain's impulsive selection of Sarah Palin as his running mate. But it's also possible that younger Republicans are as dismayed with the direction their party has gone in the last decade as young Democrats were with theirs. Just as Mr. Obama was not the first choice of the Democratic Old Guard, Mr. McCain was not the Grand Old Party's favorite son, either. The electorate sent both parties a message this time around. While the message may not be clear, but in fact is clearly mixed, the Old Guard — that group in each party that sees racism, misogyny, sexual exploitation and/or pay-to-play deals as forgivable sins in those who meet their political ends — has been given a vote of no confidence.

I'm all for an attempt at respectability. I'm frankly thrilled that Mr. Obama appears to be married not only in name, but in fact, and appears to be genuinely interested in maintaining a real rather than a sham family life. I applaud his call for the same kind of responsible behavior in others. I'm hopeful that the Obama presidency, on this subject at least, will stand in stark contrast to previous and (among Democrats, anyway) still-revered Democratic presidents (Jimmy Carter aside). I'd like to think we won't be treated to the spectacle of Mr. Obama lying under oath to the Senate and the nation about a sexual tryst after the example of Mr. Clinton or find that the press turned a blind eye to dalliance with the current "Marilyn Monroe" in Hollywood or a mobster's moll, as they did with the compulsive womanizer, John Kennedy.

As encouraging as these developments have been, I must admit to deep, deep skepticism about what goes on when the cameras aren't rolling. After all, for sake of its public respectability, the Roman Catholic church covered up priestly pedophilia for decades. Prominent evangelical pastors resign in disgrace after engaging in the very behavior against which they preach. Even those people who actively identify with movements devoted to right thinking and right living tend, it seems, to want respect without actually having to be respectable.

Certainly, the day when Americans willingly turn a blind eye to the character flaws of its cultural icons is far from over. On NPR, the day of the Blagojevich removal, callers to a talk show repeatedly defended Blagojevich, excusing his crimes because he had given them something they wanted.

Americans are quite hypocritical on the subject. We heard a lot, this week, about how Wall Street brokers shouldn't be taking those big bonuses when all around are losing their shirts. Mr. Obama, who staked himself out in opposition to rampant greed in his Inaugural Address, pointedly condemned the reported $18 million bonus Wall Street rewarded itself during the market's recent freefall. (When was the last time you heard an American president call anything a fellow American had done shameful?) Predictably, the NY Times reported that Obama's stock on Wall Street went way down, as irate stockbroker's attempted to justify the bonuses that they had "worked hard for." But few Americans would refuse that bonus if it came their way and they were pretty sure some talking head wouldn't announce it on the 5:00 o'clock news.

Americans — in Washington, on Wall Street and on Main Street — are obsessed with money, power, fame and sex. When being respectable means having to give up unrestricted access to any of those things, too many of us, from Bernard Madoff to Joe the Plumber, will gladly accept the appearance of respectability in place of the genuine article.

Unlike Mr. Quinn, Mr. Blagojevich is not a rarity. The latter said as much in his impassioned plea, delivered as his trial drew to a close. In a parting shot, he predicted that if most politicians lives were examined under the same microscope used on his, impeachment might be a commonplace.


Until we citizens are willing to frequent life's Super 8 motels, unaccompanied by people not our spouse, eschewing our entitlements to 15 minutes of fame and a winning lottery ticket, the Quinn's of the world will remain as rare in the electorate as they are among the elected, and the Blagojevich's of this world will continue to rule.

As they say: People get the leaders they deserve.

Tuesday, January 27, 2009

A Modest Proposal

Pundits are pawing over the details of the Obama Administration's economic stimulus plan as they are unearthed, looking for newsy tidbits.

Yesterday, for instance, Republicans dug up a small handful of what, to them, smelled like pork — money for the National Endowment of the Arts (NEA), for example. Apparently, for Republican lawmakers, art has its rewards as an investment that helps them preserve the bacon they bring home, but the artists themselves, it appears, aren't high on the list of those they want to keep off the unemployment rolls.

The pig sty aside, the Obama plan as a whole sounds OK to me. It's got short-term and long-term stimuli. I'd like it better if there were even more dollars for alternative energy in the mix, but it's a start. Certainly better than alt energy got the last few years.

But ... there is something missing. Something so obvious, I'm just baffled at the fact that no-one is talking about it. It would provide a significant economic stimulus, it would take a fairly big bite out of our global-warming and dependence-on-foreign-oil problems and, the best part, this program could be started tomorrow, and needn't add one cent to the real porker, our National Debt.

I have no idea, really, how many people spend their days working a computer and/or a telephone for a living, but I bet it's in the double-digit millions. A sizable majority of them work on PCs rather than mainframe computers, and most of those, these days, have, or could be issued, laptop computers. So, my proposal is simple: Mr. Obama should issue an executive order to employers: Send all of these laptop-users home and tell them to stay there.

I figure there are many millions of folks in this category, all capable of doing their jobs less than 50 ft from their bedrooms. What employee wouldn't spring for a high-speed Internet connection to reap that kind of windfall? And the smart employer could pick up the tab for it, because he/she is off the hook for a whole raft of expenses associated with such issues as long-term maternity leave, in-office child care and nursing rooms, and other accommodations they have to make (or soon will have to make) to maintain an office workforce. I bet there are thousands of employers who, for a well-dangled tax break, would be happy to comply. Eventually, companies with high percentages of stay-home workers could find smaller office spaces, as leases run out — downsizing the building rather than the workforce.

Yes, some people would take advantage of being at home, goofing off, etc. But hey, if the work falls off, employers could simply get someone else, selecting from the pool of 51 million job seekers experts say will be added to the unemployment rolls worldwide this year. There will soon be a large number of people, many of them grossly overqualified and desperate for work of any kind, standing in line for just about every job opening imaginable. I don't see goofing off as a serious problem for the foreseeable future, do you? It's much more likely that those stay-at-homers will be happy to work the extra hour they once devoted to the commute, increasing productivity without losing a second of their personal time, in order to ensure that they keep their jobs!

Imagine 20 million or more people NOT driving to work every day, NOT spending money on gas, NOT having accidents, NOT having to be late home to dinner. Imagine 20 million or more cars NOT on the road in rush hour. Figure the average commute is a half-hour, twice a day. Let's call it 25 miles, to be conservative. Let's figure 25 mpg as the average, between the gas guzzling pickups and SUVs, and the sedans and compacts, that sounds about right. So let's figure it's just one gallon of gas per day (very conservative). If 20 million people save just 1 gallon a day, five days a week, 50 weeks a year, that's more than 5 billion gallons a year. That's a lot of greenhouse gas NOT screwing up the ozone layer.

And at today's prices, (conservatively, $1.50 per gallon), that's $7.5 billion straight back into the pockets of taxpayers, (compensating them for the pay reductions and lack of bonuses this year, if they're lucky enough to stay employed) and it doesn't add one cent to the National Debt. And at $4.00 a gallon, a rate we'll no doubt be paying again very soon, the money put directly back into those taxpayers pockets balloons to $20 billion.

That's $20 billion going to the mortgage (to preclude foreclosures) the credit card (to buy down their debt), tuition (so their kids get those math/science degrees we say we need) and to help pay for hybrid or electric car they cannot, right now, afford to buy.

I think my figures are actually far too conservative. There is probably a much larger number of people who could work from home. And many of them use a whole lot more than one gallon of gas getting to work and back each day.

I suspect some Republicans won't like this idea, either. They'd think it was a worker's union plot or something. But in a day when you can reach the world, talk to anybody, face-to-face, and teleconference with a group of any size simply by logging in to a laptop, the fact that so many of us are compelled to drive to another location to do so is not only unnecessary but unproductive, disruptive, wasteful and bad for the environment, not to mention self-destructive and just plain stupid.

Monday, January 19, 2009

Tunneling Toward Peace in the Middle East

As the smoke and rhetoric clears from yet another armed conflict in the Middle East, Gazans weep for their lost and face a $1 billion humanitarian crisis as Israelis question their political leaders, in shock, about undeniably widespread civilian casualties. Thoughtful people, regardless of their allegiance, are asking what has been accomplished, and what can be learned.

From this conflict — one that has raged, in one form or another, over what three faiths consider their Holy Land — no lasting good has ever come. This latest bloodletting — months of rocket attacks by Hamas on civilian neighborhoods in southern Israel followed by a short, inevitable and bloody Israeli backlash, with the equally inevitable "collateral damage" — is no exception.

For Israel, whose right to defend itself is recognized by international law and not disputed here, the move has been costly on two fronts. Inside Gaza, Hamas has hardly accepted defeat. Instead, it has declared victory. Although that claim is ludicrous, it is, nonetheless, very unlikely that Hamas has been weakened sufficiently to prevent future rocket attacks. Rockets continued to enter Israeli airspace and randomly strike civilian settlements throughout the offensive and only stopped when Hamas joined the cease-fire. If Hamas rescinds the order, rockets will almost certainly fly again. Hamas will redig the tunnels through which it smuggles arms and aid. Outside Gaza, Israel forfeited the "public relations" battle on all fronts, losing face with foe and friend alike. Nothing works against one more than to be a bigger fellow with a bigger stick, going after an smaller offender — even when the latter deserves all he's about to get.

Make no mistake: Hamas had it coming. Even friends of Hamas, at least privately, have wondered why the democratically elected Hamas leadership authorized (or at least permitted) the rocket attacks. To the rational mind, they accomplished nothing but a seemingly useless provocation, literally forcing a centrist Israeli administration, during an election year when it is being challenged by right-wing hardliner, Benjamin Netanyahu, to put on a show of force in order to remain in power. But Hamas — powered by the bone-chilling, cold-bloodedly insane logic of the fanatical — appears to have wagered that lots of civilian casualties would somehow help its cause.

There is little doubt in my mind that Hamas used Gazan civilians, especially women and children, as shields. I have no doubt that rockets were fired from the courtyards of U.N. facilities, schools, and mosques. I wouldn't be surprised if Hamas itself was responsible for some of the civilian casualties, knowing that, in all the chaos, Israel would be blamed.

As I watched and listened to the news coverage, I recalled a day 40 years ago when I sat with a Palestinian student in a bistro near the inner city college we both attended. I'll never forget his face as he told me, quite calmly, that he would kill women and children to get what he wanted: His was a countenance that confidently enjoyed — was deeply satisfied by — the look of shock he had carved into mine. Nor did he specify whose children. No, I do not doubt for a moment that Hamas is capable of killing its own.

Unfortunately, this cold-blooded Hamas strategy has been brilliantly successful. Hoping to score campaign points with its populace by way of an election-year show of force, Israel's current governing coalition instead got branded with the "bully" label by the gathering crowd of international onlookers, most of whom rarely look below the surface drama. Israel's denial of press access and frustration of relief work for Gazan civilians — not to mention firing on U.N. facilities — not only aroused the predictable condemnations from Syria and Iran but also enraged the few Middle Easterners who try to maintain a middle ground. Egyptians turned on what they saw as their "do nothing" government and mourned for brothers and sisters in Gaza as Egypt's Mubarak refused to open its borders to displaced Gazans. Secular Arab regimes friendly to the West sometimes brutally interrupted dissent in their streets, further weakening their holds on power and playing into the hands of Muslim extremists. The Gazan suffering even prompted a stunning public denunciation from a high-ranking, always westward-leaning Saudi prince.

The press, now allowed in the Gaza Strip, has filled the air waves with the anguish of Gazans who once disdained Hamas but now have been radicalized. Israel's European allies publicly question the enormity of the response. Israel's own press finds it difficult to plead the party line. And that, surely, was Hamas' intention.

In its single-minded defense of the homeland granted to it in 1948 by the international body whose educational compounds Israeli tanks demolished two weeks ago, Israel has forgotten the lessons of its history: Israel's people and culture were nearly destroyed by another power with a big stick. The Palestinian people were displaced to make room for Israel and now live as refugees, some in Lebanese camps for 60 years, with accommodations little more inviting than those Jews died in during the Holocaust. Israel cannot afford the comparison.

Nor can Palestinians any longer sit idly by while their leaders, elected or otherwise, continue to smuggle weapons and permit missiles to be lobbed into Israeli neighborhoods. Can a Gazan actually be surprised that Israel would finally retaliate? Those who dream of a Palestinian state must come to realize that a terrorist state is one Israel would never permit. And the U.N. could not, and would not condone it. Worse, states built on terror survive on terror. Palestinians willing to trade the hope of statehood for government by terrorists will see a change only in the ethnic background of the oppressor who carries the nightstick and gun. Freedom cannot be won by compromising freedom.

The new Obama administration has appointed George Mitchell, a former U.S. Senator and veteran U.S. diplomat, to be the special envoy responsible for daily peace efforts in the Holy Land. Mitchell has credentials. He helped bring to a end the decades of bloodshed in Ireland. His selection has been praised from all quarters. Opinion is that if the job can be done, Mitchell can do it.

Although Mitchell has eloquently spoken of the possibilities for peace, based on his experience with nominally sectarian Irish unrest of a few hundred years duration, he faces the challenge of heading off a conflict the potential horror of which has roots in millennia of hate, the proportions of which are Biblical in every sense of the word.

Mitchell cannot do it alone. He cannot do it even with the aid of the U.N. and allies in international community. Not as long as the fires of hate are fanned by Middle Eastern hardliners on both sides.

Someone has to stop hating. Someone has to say, enough. Governments on both sides of the Gazan border have callously gambled with the future posterity of their citizens, in large part to prop up their questionable regimes and maintain a tenuous hold over the passions of their people. Those people would do well to cultivate a deep distrust of their leaders. The wise among them have got to seek tertium quid — only a radical third option can promise any fulfillment to the hopes held for peace on both sides of the Gazan border.

Peace does not, as too many have for so long mistakenly believed, involve the protection and security of borders, thinking that by doing so, they protect the inhabitants within those borders. Just the opposite is true. Those borders must be breached. Tunnels must again be dug ... but this time, between Gaza and Israel.

What might happen if ordinary Israelis clandestinely guided relief workers under the border to supply the needs of Gazans? What if Israeli doctors sneaked into Gaza to help Gazan physicians heal their wounded? What if Israel Defense Force reservists shed their uniforms to help rebuild the homes and U.N. compounds they so recently destroyed? What if ordinary Gazans stopped looking the other way when the neighborhood militia fired rockets or recruited "martyrs," and refused them entry to mosque, home and U.N. compound? What if both the Israeli and Gaza populace thought better of the votes they have cast in the past, and replaced hardliners with those raised up from among their own number who would rather give their own lives to wage peace than sacrifice a voter's life to wage war?

Against those who carry a stick too big to oppose, the only effective weapon is no weapon at all. It is, in fact, to act in accord with tenets of compassion and kindness that both Torah and Qu'ran command. It is to recognize that one's enemy is, all too often, little more than a political prisoner — a victim of subtle secular or sectarian oppression just like yourself, in need of a truer homeland.

Friday, January 16, 2009

Too Big to Fail

It's the byword for bail-out economics.

It's the tag that separates the truly indispensable cornerstones of the American money-making machine from those mere bricks (Circuit City, for example) for which bankruptcy or outright closure is acceptable collateral damage.

It's the magic incantation Washington pols and other Wall Street watchers intone when describing a company that, while it might not deserve a rescue from its current financial woes, is nonetheless sure to get bail-out cash because of its sheer size and the potential havoc its demise could wreck on the larger financial system.

If the pols are right, and these companies — automakers and banks, so far (inexplicably, pleas from within the pornography industry have gone unheeded) — cannot be sacrificed, no matter how ineptly they've been managed or how unlikely is there eventual recovery, then a solution is needed that goes far beyond the mere infusion of billions.

Clearly, these companies need to be smaller. They need to be broken up, like the government did with Standard Oil back in the trust-busting days and with Ma Bell in the 1980s. (This actually would be relatively easy for GM, which is simply a collection of previously separate car companies. Chevrolet, Oldmobile, Buick all were once independent and, at least theoretically, could be again.) And if troubled banks and car companies earned their bail-out funds not only by refusing big bonuses to inept execs but also by breaking up into leaner, meaner organizations, what might happen?

First off, of course, they'd once again be small enough to prevent their holding the world hostage. But they also would be small enough to change course, innovate and to hire entrepreneurs instead of executives. You know, those folks who are less interested in corporate jets than they are in the process of creating something new, better and of greater value. Those who do not work for the bonus and carefully calculated sale of corporate stock but instead live to delight customers with a better-than-expected product.

I believe this would work because it almost did, back in the early 1990s. GM, desperate even then to compete with the Japanese in the subcompact car category, authorized what was for them a radical experiment: They plunked down $5 billion (a drop in the bucket compared to the sums we're talking about today for rescues) and created a completely new division, hiring forward-thinking managers, designers, engineers and marketeers, sending them far away from Detroit to Tennessee, and giving them the go ahead to take a "clean sheet" approach to small car design. There, Saturn was born. And the cars it created were, for their time, both revolutionary and revelatory: gas-thrifty overhead cam engines (31 mpg on the highway, then among the best), sleek styling, great handling, mid-size interiors on subcompact frames, and high-tech engineered plastic fenders and door panels that would not dent.

I know because I bought one. I still drive it. My 1992 Saturn SL has 262,000 miles on it. Last time it was in for engine service, the mechanics told me I still had 30,000-40,000 miles of life in the powerplant. I have no dings in my doors. The seats are still in one piece. The paint is still good and still shines even though I've never waxed it — not even once. And I see dozens of SLs, SL1s and SL2s still on the road, still looking good and still running well, while many models from other makers are few and far between, dented on both sides, paint flaking off and faded, blowing smoke and collecting pollution tickets for their hapless owners.

Sadly, Saturn today is, just 17 years after it built my car, a ghost of its former self. GM never permitted Saturn to continuously improve the design. Last time I was in a Saturn showroom, in 2008, a tinier, less roomy hatchback stood in the SL's old spot on the showroom floor. I tapped on the car's door panel. Not that reassuring thunk of an undingable engineered plastic but the thin tink of metal. What? I said. The hovering salesman's face went red. Saturn had, he admitted, quietly abandoned its plastic side panels for thin, easily dented aluminum panels on a body made not in Tennessee but outsourced from an outfit in Europe.

One thing went wrong with Saturn: It remained part of GM. It was there for GM to cannibalize, it's coffers were still available for GM corporate execs to raid when they needed to quote better quarterly figures to greedy stockholders who cared not one fig whether GM made cars or canned canapes and couldn't care less about the people who paid the light bill, Saturn's customers.

Had Saturn been able to step out of GM's shadow, operate independently and continue to innovate and experiment, what might have happened? We'll never know. And it's not likely I'll ever want to buy another Saturn.

That's OK. GM, Ford and Chrysler can have their bail outs. I've got my eyes on a Toyota Prius unless Toyota comes out with something better. And it no doubt will. Toyota invented continuous improvement. Like GM, Chrysler and Ford, they got big, but they didn't forget, in the process, how to think like a small company.

Too Big to Fail? That phrase needs to go out the window with another favorite of mine, Buy American.

I'll buy a car from and deposit my money with any outfit I please, thank you very much. And in either case, it won't be a company that can't think beyond it's next quarterly report.

Thursday, January 15, 2009

Whatever Happened to Doing the Job? (Revisited)

In the last two years, we've been awash in political campaigns as hundreds of hopefuls ran for state and national offices. The speeches, debates and daily news reports about the ups and downs of the various campaigns — the incredible numbers of which was underscored by the quiet we've experienced since it all stopped — prompted my previous post. There, I suggested that we require campaigning politicians to continue to do the jobs we elected them to do, and to confine their re-election efforts to off hours.

When the campaigning stopped, however, the appointing began. Newly elected officials vacated old posts, and governors and other constitutionally responsible folk had to replace them. What's more, many of the newly elected also made appointments. Mr. Obama made dozens of them, to his transition team, his Cabinet and various sub-departments and agencies. As a result, hundreds of people are leaving jobs in government for other, more prestigious jobs in government, leaving hundreds of openings in lower-level positions to which even more people must be appointed. That's a lot of turnover, and it ought to concern us.

Case in point. President-elect Obama, who needed a new Secretary of the Interior, tapped our junior U.S. Senator here in Colorado, Ken Salazar, for the job. Mr. Salazar's departure left his seat open, and Colorado Governor Bill Ritter appointed current Denver Public Schools Superintendent Michael Bennett to fill it. By all accounts, Mr. Bennett is the best superintendent the Denver Schools have had in some time. My 17-year-old son is a student at one of the charter/magnet schools nurtured under Mr. Bennett's tenure. The school is not perfect, by any means, but it's a long cut above the schools my son has been subjected to in previous stages of his life, and it's not taking praise too far to say that this school is my son's first truly positive educational experience. I don't think he's alone, and I don't think I'm the only parent who believes DPS is making a change for the better.

Unfortunately, Mr Bennett, arguably the single most important catalyst in the positive tide of change, is now off to the U.S. Senate. Cheers went up at his appointment. Legions of people praised Mr. Bennett's abilities as an educational administrator. But no one talked much about how that will translate to great performance as our next junior Senator. While everyone else is praising Gov. Ritter for making such a fine selection, I'm wondering, What's so great about it? We're taking the best super DPS has had in ages out of the school system that still needs his able guidance in the midst of a long-term transition, and putting him into a job that, prior to the last couple of weeks, he's probably never given too much thought. Worse, there already has been a chorus of complaints about the gentlemen that is being considered as his replacement.

Will someone tell me why that's a good thing?

What we have, on the national level, is literally hundreds of Michael Bennetts being plucked from critical jobs in education, health care and other key services where they've been performing missions for which they have a passion, accomplishing important goals that must be met, and we're replacing them with people whose greatest distinction is that they are at best, the second best person for the job.

I've found myself imagining what the world might be like if some of these folks who are making a real difference in their current jobs just said "no" to governors and even to presidents who come knocking. "Sorry Mr. President. It would be a great honor to work with you. I'd love to, really. But I have this important task to complete. You see, I promised these people I'd do this job. I'd like to keep that promise."

Keeping promises. Seeing things through. Finishing what you start. There's a concept for you.

Tuesday, January 13, 2009

Whatever Happened to Doing the Job?

A large plurality of senators and representatives, not only at the federal level but within each state, and thousands of mayors, aldermen, attorneys general and other officeholders spent the last year or two trying to get re-elected, or elected to a higher office than that they currently held. Thousands of folks employed already in other government jobs and not facing an election, spent much of their time actively campaigning for the folks that were running for their political lives. And every minute these folks were jobseekers, they were not doing the jobs for which we pay them.

Let's try to put this into a framework with which we can more easily relate: I work at a busy publishing company. If one-third of the people in our company spent, say, 25 (this is a conservative figure, trust me, politicians on the campaign trail aren't this responsible) of their 40 hours each week this year looking for another job, what might happen? I can tell you that the work would not get done, deadlines would not be met, magazines would not be printed and mailed and advertisers (the folks that provide our income) would cancel contracts and our company, which is still profitable despite the current economic times, would go deeply in debt and reach insolvency within the year.

Ah, but Mike, you say, knowing where I'm going with this, it's not exactly the same in government. Each of the senators and representatives and most of the other public servants [I assume you use that term loosely] employ staff to do the actual work. You then remind me that the work does, indeed, get done, and that these elected folks try, at least, to show up for votes.

Yes, yes, Right you are. Point taken. So let me rephrase the question: What if, then, one third of the folks I work with (or you work with) employed just one other person (part-time, mind you) to perform the the work they don't get done during the 25 hours they are looking for a better job? Well, of course, the work would get done, after a fashion, but the company payroll would skyrocket and we'd still end up insolvent. It would just take a little longer. And that's my point: Looking for work when you're supposed to be working ... doesn't work.

It just so happens that the federal government and many of the state governments have this problem, they're insolvent. While their problems paying the bills can't be blamed entirely on the fact that large numbers of elected officials and their friends haven't actually been earning their keep lately, I suspect that the following proposal might help take the edge off of what economists are predicting will be a more than $1 trillion federal national debt for 2009, and an incalculable additional pile of money for all the state and local deficits. How about we pass a law that says all elected and appointed government officials will spend the entirety of the time between 7:30 in the morning and 5:00 in the evening, Monday through Friday, actually doing their jobs? All campaigning, speech writing, fund raising, stumping, etc. (for themselves or for others) must be done only after hours or on weekends.

That's it? you ask.

Yep, I say.

Well, gee, Mike, that sounds like an interesting idea — certainly nobody's going to have a problems with putting elected officials back to work, but ... how does that solve our money problems? you ask. Well, you got me there. They might be able to let go a staffer or two. But, that and eliminating "earmarks" wouldn't even put a dent in the debt, even in good economic times.

You're right again. But let's come at this a different way. What might happen if campaigning pols and their pals all went back to governing? First off, they'd actually get things done. For example, instead of being caught flatfooted by the current credit crisis, government officials might actually have seen it coming and, well, done something about it, rather than "suspending their campaigns for the good of the country" and rushing back to the Capitol to deal with it after its become an unmanageable crisis. They might also have noticed that something was seriously wrong with the mortgage industry. They might have outlawed subprime mortgages (anybody with a calculator, a brain and a conscience could have foreseen, long-term, that that idea was a loser). They might have stopped to wondered why the Bernard Madoffs of the world manage to make 10 percent for their clients, year in and year out, when everyone else can't. They could have looked into investment banking and asked what the hell those new types of "no lose" securities everyone was so excited over were all about. They could have inquired into why the SEC and other regulators weren't doing their jobs. They might have passed laws that ensured that loans were made ethically and that low-income people were not lured by their own greed and the avarice of others into long-term adjustable-rate mortgages that claimed half their gross income. Those folks, unencumbered by ballooning debt, could have saved some of that money, giving banks the large pool of ready cash they need to make loans to businesses for responsible, sensible investments in new equipment, research and development on new technologies like clean, renewable energy and electric cars, and creating new jobs. Slowly, those growing businesses would get healthier and with them the economy would grow. Health care programs would improve as businesses competed for talent to realize their bolder technology mandates.

Sooner or later, not all, but many of the folks who otherwise would have desperately gambled on homes they couldn't afford might eventually get one that they could pay for. These happy people would be better able to afford to pay their taxes, and wouldn't be quite as susceptible to electing any fool who promised a tax cut. The national debt would decline. People could afford the new electric cars. Not distracted every minute by the effort to make ends meet every two weeks, Main Street folks might get interested in things like improving schools, building better transit systems, repairing dangerous bridges, curing AIDS, serving their country and saving the planet. These more prosperous people would have little need to find an ethnic group to blame their troubles on. America would become a more welcoming place again ("Give me your tired your poor, your huddled masses ...."). The world might once again marvel at and envy the American Dream. They might want to imitate it. They might ask for help doing it. Terrorists might then have little success riling people up about the Great Satan. Peace might break out.

It could happen.

Sunday, January 11, 2009

Senate Seat Roulette

The once unlikely pairing of Barack Obama and Hillary Clinton together in the Executive Branch has been the occasion for a bit of post-election drama surrounding two equally unlikely appointments to their now open seats in the U.S. Senate.

Despite a five-year investigation into his conduct that he apparently knew about, Gov. Rod Blagojevich of Illinois was recorded by investigators on a number of occasions as he planned to peddle to the highest bidder Mr. Obama's empty Senate seat. A Who's Who of aspiring appointees ran from the prospect like it was the plague -- all, that is, except Mr. Roland Burris. The former Illinois attorney general and three-time losing candidate for the job Mr. Blagojevich now holds got the call and, without hesitation, accepted the appointment, dropping his own doubtful talk about the governor of a week earlier and insisting that his appointment was lawful and untainted. The Senate Democrats, in a rare show of unanimity, rose with one voice to condemn the move. Mr. Blagojevich had defied their warning not to make any appointment from his now undeserved office. They would not, they had said, seat any appointee he could name. The press, predictably, crowed about Mr. Blagojevich's clever meaness in naming an African-American, noting that it would be difficult for Democrats to refuse to seat someone who would be, with Mr. Obama's exit, the only black Senator in this U.S. Congress. Op/Ed writers enjoyed the political gamesmanship involved as the Governor, presumably on his way out, left the Senate an IED (improvised explosive device) to remember him by.

Indeed, last week, it looked like Blagojevich's "give-'em-a-no-win-choice" strategy was working. Senator Diane Feinstein, former Mayor of San Francisco, who can't afford to be viewed (even inaccurately) as anything but supportive of the disenfranchised, was the first to cave in. She was soon followed by Ms. Pelosi and the Majority Leader himself, who are now going about the business of defusing the stand off.

No doubt Mr. Burris will, sooner or later, gain his seat. The current Illinois attorney general will be persuaded to sign off on Mr. Burris' credentials after the affair becomes a little less "front page." But the pundits will have missed the point, as they often do. The issue here, as former attorney general Burris well knows, is due process. Mr. Blagojevich has been accused of, arrested for and, since the Burris appointment, impeached for alleged crimes. He has not yet been convicted, either in the Illinois Senate or any court. He is presumed innocent until proven guilty. The appointment, barring evidence of some kind of "pay-to-play deal, is perfectly legal, all the potential quid pro quo A-listers have disappeared, leaving only Mr. Burris, who until Mr. Bladojevich's arrest, was not on anybody's list.

While the Senate certainly has the right to request that Mr. Blagojevich, for the good of the nation and his office, not taint the empty seat by making an appointment at this time, he still, at the moment has the legal right and, as he noted in his defiant talk to reporters, may indeed have "a duty" to make the appointment. Mr. Burris could have refused, again for the good of the nation, to accept the appointment (and I frankly wish he had), but he has no legal obligation to do so. Of course, Mr. Blagojevich could have saved us all a lot of trouble (and the taxpayer's money it'll cost to remove him) and simply resigned. But he did not, and it is his right to demand a fair trial.

One of the downsides of a democracy, in which we pledge allegiance to a system of government by law rather than men is that some men (and women) always find ways to exploit those laws to their personal benefit or to the detriment of those they don't like — or just for spite — in blatant disregard for the public good.

So Mr. Blagoyevich has had his 15 minutes of defiance and no doubt enjoyed it, but he will also have his day (no doubt stretching into months or even years) in court. And Mr. Burris has seized the day, counting on legal precedent and not minding at all that his appointment will owe something to the governor's callous willingness to play the handy race card. Burris, too, will have his day in the court of public opinion. He will, no doubt, be one of the most watched new senators in history. A minor mistake for Mr. Burris will be a media event. In all the furor, no evidence has surfaced that Mr. Burris has ever sunk to the normal low of Illinois politics. He's handled the negative attention with reasonable grace. Yes, he wanted to be a U.S. Senator badly enough to risk this way of getting the seat. But that just makes him graspingly ambitious. What politician couldn't be accused of that? Under intense scrutiny, he'll have to be a model junior senator. And if that happens, it could be evidence that our political system, by revering rule by law and valuing a free press, could ultimately protect the public good.

On a very different note, New York Governor David Paterson will soon discharge his duty to fill the Senate seat vacated by Ms. Clinton, Mr. Obama's choice for Secretary of State. ("Keep your friends close, and your enemies closer.") No-one's running from this appointment. But one candidate among the slew of aspirants has eclipsed all others: Caroline Kennedy, daughter of John, niece of Bobby and Ted, and a practicing lawyer, has the pundits calling to mind Camelot, that mythic (and largely illusory) moniker for the tragically shortened JFK presidency.

After consciously avoiding the public eye for decades, Ms. Kennedy now seeks it in an unabashedly public campaign to win the seat, despite the fact that there will be no vote. To its credit, the allegedly left-leaning press has not shied away from asking important questions about Ms. Kennedy's qualifications, albeit with less glee than that with which they went after recent vice-presidential candidate Sarah Palin. Early on, Ms. Kennedy has proved equally unable to respond with substantive answers. She was, she says, inspired by Mr. Obama to enter public service. She is, she says, up to the job, you know, because, well, you know, she really wants to help people, you know? Although she conspicuously lacks the charisma (and the Basten accent) of her forebearers, liberals can't be blamed for getting misty-eyed about her, now that Ted's bout with brain cancer ensures that the long political legacy of the Kennedy men is soon to end.

If he appoints Ms. Kennedy, Gov. Paterson might merit the criticism that will surely come. There are seasoned pols far more qualified to handle the Senate machinery than she. No doubt, she wouldn't be in the hunt at all, had she not so famous a name. Unlike Mr. Obama and Ms. Palin, who were pointedly criticized for their relative lack of national government experience, Ms. Kennedy has never won or lost an election nor has she logged a single day of service in any government office. She even admits to having neglected to vote in several elections.

One thing in her favor is that she is a woman. Paterson is under some pressure to fill Ms. Clinton's seat with another woman, and the Kennedy name has the gravitas, at least in the Democratic Party, to fill the bill. More importantly, she is a Kennedy woman. Kennedy women, history will testify, have always been better people than Kennedy men. While Papa Joe made most of his fortune running rum during prohibition and, like some Mario Puzo Godfather, grooming his namesake for public office, his wife, Rose, quietly and with little fanfare, spent a part of his ill-gotten gain championing such ventures as the Special Olympics. Although young Joe died in the war, John came back a wounded PT boat commander and, as President, proved to be an inspiring figurehead. But JFK also oversaw the infamous Bay of Pigs affair, which led to the Cuban Missile Crisis, which took us to the brink of nuclear war and ensured the Cold War would smolder for decades. Then he got us into Vietnam. Meanwhile, Jacqueline gave the title First Lady a luster it had never had before and has not had since. She bore her grief at his death and endured the public revelations of her husband's compulsive womanizing and Mafia connections, as the fabric of Camelot finally unraveled, with equal dignity.

Like the women who preceded her, and quite unlike the men, Caroline Kennedy has no affairs in her dossier. She has no Chappaquiddick to live down. There are no Mafia connections (the dons her father's father first befriended are long dead, and those JFK secretly employed are either incarcerated, living under assumed names in the desert Southwest, or too old to care).

After avoiding for so long the political arena that killed both her father and Uncle Bobby, she has stepped up to the plate. Whatever else one might say, that takes courage. By all accounts, she has quietly earned some respect (in New York!) for her activities in education reform.

If Gov. Paterson appoints her, those who expect the imminent return of a Camelot that never was will ultimately be disappointed. But the rest of us might be surprised. She owes no special interest group. She's made no promises she can't keep. She does not seem driven by personal ambition or lust for money (that, she already has) or power. It might well be the case that an ordinary do-gooder, after a period of neglect, has indeed been inspired to public service by a sense of duty and an honest desire to help out. That alone would be a pleasant change.

She did not choose her name. And she did not ask to bear the weight of dynastic expectations. But it's not beyond the realm of possibility that the oft-tarnished Kennedy name, in the person of Caroline, might finally merit the respect it has for so long commanded.

Sunday, January 04, 2009

Ignoring the Alarm

With Wall Street in shambles and Main Street feeling wave after wave of aftershocks from the mortgage industry's self-induced earthquake, I've wondered why so few saw it coming. Turns out, a lot of people did or could have, but, in most cases, elected to ignore it. The few who didn't ignore it, but actually tried to raise the alarm were themselves ignored.

See this laudable Op/Ed piece by Michael Lewis and David Einhorn in the New York Times. It tells the story of one such alarmist, and in the process gives the best assessment I've seen yet of 2008's seismic activity on Wall Street. The authors also give relatively low grades to current Congressional and Federal Reserve efforts to correct the ills, and they propose, instead, some interesting alternatives for fixing what they identify as deep systemic flaws.

In short, they make a good case for what I've believed for years: that our financial system rewards short-term results (specifically, quarterly profits) and deeply, profoundly discourages long-term thinking of any kind. Further, they reveal that, in moral terms, the system is not just amoral, but expressly immoral because its workings, including those of its its regulatory bodies, encourage and reward greed and punish honesty.

One of the miserable effects of such immoral focus on short-term profit is the stultifying effect it has on manufacturing innovation. Here's just one of many examples: In the automotive world, we saw the Big Three desperately feeding their quarterly profits by building SUVs on truck frames that did not have to conform to passenger-car safety regulations. SUVs, as a result, could be more cheaply built but because they were in demand, could be sold at a greater profit than could less roomy passenger cars that cost more to build but sell for less. The result, of course, was that the Big Three — unlike Toyota, for instance, or upstart automakers like California-based Tesla Motors — spent precious little on developing cars powered by alternative energy systems. The Big Three were, thus, unprepared to launch hybrid electrics when fuel prices soared, and now they need bailouts. Toyota, which has never been guilty of short-term thinking, can get you a hybrid and isn't asking anyone for a bail out.

The result of all of that is that the incoming U.S. president has announced, and the taxpayers will pay for, a government program for development of alternative forms of energy that could have been developed (and much more efficiently, I'll wager) by private enterprise, if our system didn't discourage it.

One of the long-term effects of the financial collapse is that a number of key banking institutions have been nationalized (that's Lewis' and Einhorn's term, not mine). I think it's high time someone actually admitted that's what's happening. Those who fear various forms of socialism — a group that includes all those Wall Street investors and those who profited from Wall Street's recent drunken orgy — are now getting exactly what they hoped to avoid by deregulating markets. They had better hope nationalization is a temporary stop gap. But those who know their American History should know better. Temporary fixes in America have a terrible habit of becoming institutionalized. When a gambler puts the title to his car in the pot and loses, someone else is in the driver's seat.

There is a bittersweet irony in the fact that the "haves," in their clamber for instant wealth unfettered by market controls, have unwittingly surrendered the keys to an incoming President who I think it's fair to say genuinely represents the interests of the "have nots" and is quite willing tot see the government have a fairly large say in how the markets go in the future.

Lewis and Einhorn entitle their piece, "The End of the Financial World as We Know it," (almost certainly a bit of word play on the similarly titled youth anthem by rock group REM).

I think they're right. And I feel fine about that.

Thursday, January 01, 2009

It's All Gone

Good-bye 2008. Hello 2009. Looking ahead to the New Year, it's instructive to look back at the old one.

In 2008, Americans gambled and lost in the stock market in a way unmatched since the dismal end of the last century's so-called "Roaring Twenties." The loss estimates are in, and according to the New York Times today, they are colossal (italics mine):

In a mere 12 months, the Dow Jones industrial average plunged 4,488.43 points, or 33.8 percent, its most punishing loss since 1931. ... All told, about $7 trillion of shareholders’ wealth — the gains of the last six years — was wiped out .... Almost no industry was spared as the crisis that first emerged in the subprime mortgage market metastasized and the economy sank into what could be a long recession.

It's all gone. And although it may sound like American investors might have done little worse than "break even" (Whew, we've only fallen back to where we were six years ago), the truth is that it ain't nearly over. In fact, it's hardly begun. We've only seen the initial wave of requests for bailouts and declarations of bankruptcies. More will certainly follow. Jobs will continue to be lost. The shock waves of what happened on Wall Street will continue to reverberate around the globe, wave after wave. Those who understand such things — those who read their history — know that the 1930s Great Depression didn't end until World War II. The causal links between financial depression, poverty, unrest and inevitable conflict are simply too easy to trace. Things could get unimaginably worse before they get better. That reality is what triggered such quick and surprisingly nonpartisan efforts to devise "bailouts" that the U.S. Congress would have deemed unthinkable in any other time. Their willingness to go to such lengths is a accurate gauge of the primal fear that has motivated them.

The root of it all is a quintessentially American phenomenon, home ownership. Nothing intrinsically wrong with that. But historically, owning a home has not been the norm. Economists now tell us that home owners, in a healthy economy once averaged slightly more than 43 percent of the populace, while the balance were renters. The figure has risen to higher than 60 percent. While that might be a happy statistic, on the face of it, it's actually symtomatic of great ill: The increase has come in a time when earning power has steadily declined. In the last two decades it's become, very gradually, harder to make ends meet. People work longer hours for less pay. In consequence, Main Street folks have become increasingly desperate to get into a home.

Little wonder, then, that they conspired (there's no more accurate word for it) with greedy mortgage lenders to circumvent already too-loose loan qualification standards. In the 1950s, prospective homeowners were permitted to spend only one-quarter of their gross income on PITI (principal, interest, taxes and insurance). By 1980, however, this prudent standard had been relaxed to one third. In the last several years, even that precarious threshold has gone by the wayside. Scratch below the surface of today's foreclosures, you'll often find homeowners who pay one-half or more of their gross income out in PITI. Meanwhile, the banks looked the other way on loan qualifications, preferring to find ways to profit from such desperation. The fixed rate mortgage, which protected the homeowner from fluctuations in the credit market went by the board as lenders steeped in the new dogma of "creative financing" crafted ARMs (adjustable-rate mortgages); interest-only instruments that culminated, at some point in the future, in large "balloon" payments; and various combinations. Then there were the subprime mortgages, those on which (as recent events clearly demonstrate) a mortgage holder's investment could only be protected if housing prices continued to go up — despite the fact that economists have documented a long history of the inherently cyclical nature of housing prices.

What is hard to understand is that millions of people actually believed such extremely high-stakes gambles had any chance of bringing a lasting return. What's becoming increasingly clear is that many, specifically the folks who packaged the securities in which these inherently bad loans were cleverly disguised, knew full well that these loans had no chance, but callously passed them on (taking larger profits) to unwitting investors who in turn, to their chagrin, were willing to believe, often without question, outlandish promises about the securities' "safety."

Why would they do that?

For what it's worth here's my opinion: The problem really started decades ago, when the "home" began to be redefined. Once upon a time, a young couple bought their first house on Main Street, often after years of saving, and raised their kids in it, retired in it and died in it. It was once common for several generations of a family to maintain ownership of the family "homestead." The home was a physical center for a family's emotional center. An ideal, to be sure. Not everyone who aspired to it achieved it. But a home represented permanence, stability, and a repository for a family's history.

Once a place to raise a family, and the anchorage to which generations of younger family members perennially returned even after establishing their own homes, the home now is seen by many primarily as a financial investment instrument. One big reason for the current high percentage of home ownership is, in fact, the rise of the "financial advisor," who moved from Wall Street to Main Street, telling Main Street clients that their home was their best bet for retirement — their "nest egg."

The result has been a cultural shift with far-reaching effects: The average U.S. citizen moves every five years, often motivated by what real estate agents call "trading up." Buying low and waiting for housing prices to go up is the stuff of smart economic discussion around the watercooler at work. Buying a fixer-upper, giving it a facelift (often only that) and reselling it for a profit has become one of the "smart" strategies for the American middle class. Hopping long distances to cash in on the difference between markets where housing prices are artificially high and markets where they are artificially low is a common "upper-middle" strategy.

Trading up as income goes down has taken its toll. A house is no longer where we live. It's a merely place to sleep, while both parents run frantically to jobs, dumping kids in day care, spending long hours chasing the cash they need to fund the "investment." Once, the home was where the members of most families met for most if not all meals. Now it's just the place where we do the laundry. We eat out, often separately. Many kids have more fun at the McDonald's PlayPlace than they do at home. For too many of us, the only people who spend significant time in our backyards are the lawncare crewmembers who mow the lawn each week.

Meanwhile, these nomadic Main Street climbers are sleep deprived, alternately anesthetized with drink and pepped up on "energy" concoctions laced with legal drugs. They drive longer distances to work, from suburbs further out from crumbling inner cities.

What keeps them in the game are the stories about the successful gamblers. These are the folks who hit the jackpot and now sequester their belongings in ever-larger houses in gated communities, but spend a growing portion of their gains on alarm systems, gardeners, au pairs, maids and homeowner's association fees. They give their teenagers piles of cash to keep them happy while they fly to distant cities to maintain the increasingly complex businesses that keep the mortgage payments coming. (Police in affluent communities say that arrests of home-alone teens is epidemic. Stranger yet, a kid busted for shoplifting is likely to have a $100 bill in her pocket!) Parents and kids who hardly know each other escape from the craziness by buying bigger, more expensive and more distracting toys. They take second and third mortgages to finance their students' college educations, so they can get jobs that permit them, too, access to the gated lifestyle.

The unsuccessful gamblers (the vast majority, who only see the gated communities from the outside and don't see what goes on inside) wring their hands as their credit card balances escalate and hope. They endure the frequent moves, despite the painful toll the endless shuttling between schools, daycare centers, fast-food restaurants and bedrooms takes on their kids. They refuse to see the connection between the way they live and their increasingly poor educational performance, cultural alienation and deep skepticism. They await foreclosure.

Increasingly relationship poor, because they spend the greatest portion of their waking hours not with family or friends but with coworkers, lonely adults are uniquely susceptible to the career and marriage destroying workplace love affair. Those who can't find love at work find it in all the other wrong places: the local watering hole, the business trip, even the church. Or they seek a poor substitute in "escort" services, phone sex, chat rooms and Internet porn. Half of first marriages and one-quarter to one-third of the rest end in divorce. (As foreclosures mount and home values tumble, divorce lawyers who once helped their clients fight over who would get to keep the home now fight over who gets stuck with it.)

In 2008. We traded in the American Dream for a nightmare. In the scramble to get and keep a house of our own, many of us surrendered the possibility of making it a home. Main Street wanted to be like Wall Street, and everybody lost.

New Year's resolutions, anyone?