Archive for August, 2009

Stewardship

August 24, 2009

I am having the interesting experience of working on an Information Technology project for the Department of Defense. I’ve learned a lot. One unexpected experience is a deep appreciation for how much of our government is stewardship. In the Department of Defense, there is a significant amount of work to managing all of the documents – both historical and contemporary – that are related to the military. Certainly protecting Americans against global threats is stewardship in its most basic form. During peace time, it is more obviously a stewardship role than the active role as it is now during a time of war.

It occurred to me that perhaps the most important part of governing is stewardship.

There are a lot of government responsibilities, like the Securities & Exchange Commission to ensure that the markets operate on a level playing field. FEMA is there to help ensure that there is a level of preparedness for disasters – both man made and natural. The Food and Drug Administration is there to protect our food supplies and to keep the pharmaceutical companies honest. The National Institute of Health and the Centers for Disease Control model and monitor threats to our health and assist in preparedness. There is a lot of oversight required for entitlement programs like WIC, Medicaid, Head Start, etc. Even if you are politically opposed to some of those programs, they are the law of the land. They deserve appropriate stewardship.

I think the Republican party has completely lost sight of the responsibility of government for stewardship. In his first inaugural address, Ronald Reagan stated, “In this present crisis, government is not the solution to the problem; government is the problem.” [1] There might have been considerable truth to that in 1981, but modern conservatives have truncated that quote to assert simply that “government is the problem.” The current crop of conservatives want to “be the decider”, but don’t want to do the hard work of governance and stewardship that accompany the luxury of being part of the decision-making process.

Even after the economic crisis of a year ago, there are many conservatives who are whetted to a 100% free market economy and believe that government regulation of any form is wrong. Perhaps the strongest advocate for reduced government regulation in the marketplace was Alan Greenspan. Greenspan was appointed by Ronald Reagan to be the Chairman of the Federal Reserve in 1987.[2] I had a lot of respect for Alan Greenspan during his tenure, but he even admitted that his world view was wrong when it comes to the regulation of financial markets. [3][4]

Obviously too much government can be a problem, too. It is problematic when the government incarcerates people for what they consume – for example, alcohol in the 1930s or marijuana now. It is fiscally problematic for excessive entitlement programs for the impoverished. It is problematic when the government interjects themselves on a decision between a patient and a doctor. (No, I am not talking about the current health care legislation. I am talking about abortion counseling [5]).

Our first goal as voters is to ensure that those people who we elect are interested in governing – and that includes stewardship. Once that is accomplished, our second goal should be to help our elected officials determine the policies that create a minimal, effective government.

References:

[1] http://www.americanrhetoric.com/speeches/ronaldreagandfirstinaugural.html

[2] http://en.wikipedia.org/wiki/Alan_Greenspan

[3] http://www.newyorker.com/online/blogs/georgepacker/2008/10/end-of-an-era-2.html

[4] http://www.nytimes.com/2008/10/24/business/economy/24panel.html?_r=1&hp

[5] http://www.time.com/time/nation/article/0,8599,96275,00.html

Priceless

August 24, 2009

I have blogged quite a bit regarding the need for honest, intellectual debate about government policy.   I was following up on a Twitter “tweet” from a co-worker about Ronald Reagan’s LP speaking out against Medicare.  I was doing a little research because they had the date as 1969 (I am pretty sure it was 1961, which is important since Medicare was passed in 1965).

In my research,  I came across the following reply to a YouTube reference to Reagan’s LP.   I was reminded once again how difficult it can be to have an intelligent discussion with some people.  It’s the best example of cognitive dissonance I’ve seen in a while.

I cant play video on my computer. Is this the one where he [Reagan] is warning against passing medicare? I depend on medicare actually but I know its really part of the march toward socialism and wish I didnt need it. My own daughter uses my dependence on medicare to argue that she deserves some sort of public option socialized medicine also. I was going to stop going to the doctor so she couldnt hold it over me anymore but that just made her more mad so Im going to my checkups again.

Oddly, I have nothing to add to that.

Letter to Congressmen and Senators

August 22, 2009

Our elected officials can do their job best when we, the electorate, communicate with them.  Here’s my letter that will be going out in Monday’s mail:


Sen. Sam Brownback
303 Hart Senate Office Building
Washington, DC 20510-1605

Sen. Pat Roberts
109 Hart Senate Office Building
Washington, DC 20510-1605

Rep. Dennis Moore
1727 Longworth House Office Building
Washington, DC 20515

Distinguished Gentlemen,

I started my own small IT consulting company just over 14 years ago and have had the good fortune to still have a healthy business in spite of the setbacks when the dot-com bubble burst and the recent economic downturn. Unlike many Americans, I have always lived beneath my means. I started saving in my 401K when I was in my early twenties. I have no personal debt and the corporate debt is negligible. In short, I am in a better position than the vast majority of Americans. In spite of a lifetime of frugal living, there are two economic concerns that erase a lifetime of responsible financial decision-making.

The first is healthcare costs. Healthcare costs are the single largest corporate expense after payroll. These costs are going up at a dramatic rate. Although I can still afford insurance for the near future, it is clearly increasing at an unsustainable rate. If I should get ill, it could quickly and easily become unaffordable because the insurance companies can increase my rates to price me out of their plan. If I am deemed to have a preexisting condition, then I am priced out of the market completely.

Insurance is essentially a model for risk-sharing. If risk is spread across a large group of people, then no individual should have an unsustainable burden. As a corporate CEO myself, I expect insurance companies to make a profit. I tend to be skeptical of government intervention into the free market, but regulation can be necessary when an industry starts to use their wealth and position to “game the system.” The existing health insurance industry no longer shares the risk in an equitable manner. The current regulatory environment allows them to kick people out of the system who are deemed to high of a risk. Insurance companies are not sharing risk, they are pushing risk to the individual and lowering risks – and thus increasing profits – for themselves.

Elimination of exemptions for preexisting conditions is mandatory for healthcare reform. While I think the public option is the best approach I have heard so far, I am not whetted to it. If co-ops or other approaches can get us back to a level playing field for sharing risk, then that should be part of the discussion.

Speaking of “the discussion”, democracy works only when we have an informed electorate. You should all be ashamed at the level of discourse on this topic. I expect you all to stand up for an honest debate on a topic that is literally about life and death for all Americans. I got an e-mail, signed by Michael Steele from my friends at the Republican National Committee. The language is reprehensible. Phrases like…

Democrats are trying to strip us of more of our freedoms all in the name of their “government knows best” philosophy

…does nothing to further intelligent and honest debate. Since choice is a fundamental element of the public option, this policy has nothing to do with limiting choice. This is demagoguery. Since two of you are Republicans, you have a responsibility to me and others you represent to keep the debate honest. Do your job.

If the first concern for my personal financial future is healthcare, the second is an issue that is intertwined with healthcare. That is inflation. Deficit spending is eventually inflationary. History has shown that short-term deficit spending may be necessary for economic stimulus, but the current spending levels are unsustainable. We need to get back on a fiscally responsible track once the economy rebounds. We must ensure that large Federal expenditures, like any possible healthcare legislation, can be funded over the long term. While no one likes paying taxes, they are preferable to long term deficit spending, and should be accompanied by cost reductions in other government programs that aren’t effective. That, gentlemen, is a large part of your job and I don’t think any of you have been doing it well.

Policy issues, especially healthcare and fiscal responsibility, are the two issues that are most important to me. Incorrect or insufficient policies threatens my future and the future of my children. It seems to me that we have a President who strongly desires honest discourse and is willing to listen to opinions of both parties. It seems that we can all agree that the current aging demographics ensure that the current healthcare system is fiscally unsustainable.

You three were elected, along with this president, to solve these issues. Stop the childish and irresponsible rhetoric emanating from your peers and do your job. Solve this problem for me and the millions of Americans less fortunate than me.

Sincerely,

Gary Murphy

Karma

August 20, 2009

The New York Times reported that Ted Kennedy asked legislators in his state to pass a law so that Governor Patrick can appoint a replacement upon his death.   The way the law is currently written, the seat would be vacant until a special election can be held.  The health care vote is going to be extremely close in the Senate.   Democrats are going to need all of the votes they can and it appears that Kennedy may not be able to cast his vote.

I try to live by what I call the “pure of heart theory”.  The basic idea is to conduct oneself in a way that is true to your ideals, is not selfish, and does not abuse positions of authority that one might hold.  In other words, be honest and don’t game the system when you are in a position to do so.

Well, karma’s a bitch.  The Massachusetts law used to allow the governor to appoint a temporary replacement, which is typically how those situations are handled in most states.  That’s the way the law was until 2004.  So what happened in 2004?  You might remember that a Republican, Mitt Romney, was the Governor and John Kerry was running for President.  The state legislature tried to game the system in the event that Kerry won the election.

Quite often the “law of unintended consequences” kicks in and the likelihood seems to increase dramatically when people make decisions that aren’t pure of heart.  We need health insurance reform of some sort in this country, so it’s a shame the way this worked out.

Maybe decision-makers can take a lesson from this…. ah, probably not.

References:

[1] http://www.nytimes.com/2009/08/21/us/politics/21kennedy.html?partner=rss&emc=rss

The Insular Mind

August 9, 2009

I am bothered by what the Republican Party has become. If this were the party of Barry Goldwater, I would be a Republican, but something has happened. The 21% of Americans who are self-identified Republicans have become “true-believer” Republicans. They have crafted a world that no one but they can see. The rules are self-defining and closed to creative thought or logical thinking.

If there is a news article that refutes what they are saying, it’s because the liberal “mainstream media” won’t report on the real state of things. However, the “mainstream media” is never defined. I would consider Fox News mainstream media, albeit with serious credibility problems. The Wall Street Journal is the financial publication of record for America. They are owned by News Corporation – the same company that owns Fox News. They are hardly liberal by any stretch of the imagination. Peggy Noonan, former speechwriter and special assistant to Ronald Reagan and current columnist for the Wall Street Journal, even referred to the “mainstream media” in her op-ed in the Wall Street Journal[1]. I often disagree with Noonan, but she is an intelligent, well spoken Republican conservative, who seems to have accepted that her employer’s own publication is out of the mainstream.

We see Americans, such as the teabaggers, shouting that they want their America back. Back from whom? Bill Maher asked that question on the August 8, 2009 episode of Real Time and he never got a coherent answer from his two Republican guests. Nothing of substance has changed under the Obama Administration. The ill-conceived tax cuts of the Bush Administration will be allowed to expire, but they haven’t yet. There is an attempt to fix a clearly broken health care system, but that hasn’t happened yet. What are they angry at? I don’t think they know, but there is an evident persecution complex in their words.

And how about that health care? At a town hall, President Obama mentioned, “I got a letter the other day from a woman. She said, ‘I don’t want government-run health care. I don’t want socialized medicine. And don’t touch my Medicare.'”[2] A similar thing happened to Republican Congressman Robert Inglis. Someone reportedly told Inglis, “Keep your government hands off my Medicare. I had to politely explain that, ‘Actually, sir, your health care is being provided by the government,'” Inglis told the Post. “But he wasn’t having any of it.”

It’s this true-believer mindset that accepts the notion that health care reform is bad simply because it it socialist with no additional analysis. The “debate” gets into full crazy mode with Sarah Palin‘s Facebook entry[4]:

The America I know and love is not one in which my parents or my baby with Down syndrome will have to stand in front of Obama’s “death panel” so his bureaucrats can decide, based on a subjective judgment of their “level of productivity in society,” whether they are worthy of health care. Such a system is downright evil.

It is so incredulous that there would be a “death panel” in the legislation, that she must be mentally ill, or just a bald-faced liar, right? No. She is simply a true-believer.

Speaking of socialism, how many people have actually looked it up in the dictionary? Damn few, if you look at the use of the term [5] by Republicans. Even after you understand what socialism is, the argument still has to be made as to why it would be so bad for some aspect of healthcare to be socialized. I was pondering against socialism on a mailing list and a friend from Sweden asked me, “What exactly are you afraid of?” I had no immediate answer to that simple question.

We have seen this sort of insular, self-defining world before. It looks a lot like a fundamentalist religion – be it Christianity, Muslim or any other. What is true and false, good and evil, right and wrong, is self-defined.  There are no shades-of-grey. Disagreements are dismissed instead of analyzed and debated. “Truth” is accepted on faith. Not only have the precepts of fundamentalist Christianity become the planks of the Republican Party, but it has become the mindset has as well.

Of course, the liberals have their whacky camp, too. There is PeTA, the “9/11 Truthers”, the “all corporations are evil and should be abolished” crowd. In contrast to conservatives, liberals like Bill Maher threated to “kick their ass” when the “truthers” tried to disrupt his show. Democratic politicians typically ignore the lunatic fringe – except when pandering during the primary election season, of course. When it comes to policy, there is plenty of room for disagreement as evidenced by the Blue Dog Democrats stance on health care. That’s the way it should be.

If the Republicans are going to reach beyond the 21% true-believers, they better find a leader other than Glenn Beck, Rush Limbaugh, Sarah Palin and Michael Steele. They better find one who is a real conservative, but intelligent and articulate. They are out there, but they are silent on the entropy within their party. I wonder if Joe Scarborough or Peggy Noonan has what it takes to lead Republicans out of the wilderness.

References:

[1] http://online.wsj.com/article/SB124716984620819351.html

[2] http://www.talkingpointsmemo.com/livewire/2009/07/obama-pokes-fun-at-dont-touch-my-medicare-people.php

[3] http://www.huffingtonpost.com/bob-cesca/get-your-goddamn-governme_b_252326.html

[4] http://thecaucus.blogs.nytimes.com/2009/08/08/sarah-palin-has-weighed-in-on/

[5] https://politicalmoderation.wordpress.com/2009/07/24/socialism/

Intellectual Cowardice

August 8, 2009

Maybe George W. Bush got something right. When he would conduct his town hall meetings, his staff would screen people to ensure that they were true-believer Republicans. Some were even required to sign loyalty oaths. Town halls were designed to be a way for politicians to have a one-to-one honest discourse with their elected leaders. It helps prevent them from getting too insulated from what is going on with their everyday constituents. Bush simply created a video sound-bite opportunity and made a mockery of a great democratic tradition. It was cowardly, but it was effective.

During the congressional recess, many of the Congressmen will be holding town hall meetings to get feedback from their constituents, especially on health insurance. The ideal would be to hear from people who support and oppose the government adding to their existing Medicare role so the elected can truly represent the electorate. Instead, there are plans to disrupt town halls. Not converse, not protest outside congressional offices – which is perfectly democratic – but to disrupt an important democratic process.

It’s clear that the current system of healthcare provision and insurance isn’t effective. According to a 2000 World Health Organization study, the United States ranked 37th[1], behind Costa Rica, in health systems while ranking second in expenditures as a percentage of GDP. We have an unholy mix of socialized medicine with Medicare and private health insurance that is unaffordable for 47 million Americans. The uninsured drive the rates much higher for the insured. In 1985, I got the bill for the birth of my first son – all paid for by my employer-provided insurance. The ride down the hall in the wheelchair cost $350. Its nuts.

It’s also true that there is a real concern about the long-term costs of a Federal entitlement program on health care as our population ages. We, the electorate, need to voice those concerns to our congressmen. We need to hear how they think it will be funded. We need to ask about alternatives, like the health care cooperative being discussed by Republicans and Blue Dog Democrats. What little I have heard sounds like it might have potential. This is democracy in action.

I fear that this debate won’t happen because the media will find the disruption story more interesting than the health policy discussion. If this debate doesn’t happen, I am concerned that we will either be stuck with the status quo – which isn’t working – or we will get policies that were rammed through Congress by the Democrats that we don’t want to pay for. Either would be unacceptable solutions that are a direct result of intellectual cowardice by conservatives.

[1] http://www.photius.com/rankings/healthranks.html

Deficit Spending

August 2, 2009

My parents raised me to be frugal. Except for cars and homes, we were expected to save for something we wanted and then pay cash for it. As I formulated my own sense of managing finance, I extended that into a lifetime of living beneath my means. It should be no surprise then, that as a matter of policy, I am a deficit hawk. Revenue is revenue, expenses are expenses and Federal deficit spending is, in essence, living off the credit cards.

The deficit spending by both the Bush Administration and the Obama Administration are disturbing to me, but it’s important to not be dogmatic and put these fiscal policies in context. The deficit spending by the Bush Administration was in part a result of tax cuts – which should have been offset with spending cuts – and the costs of the necessary war in Afghanistan and the unnecessary war in Iraq[1].

The Obama Administration has to continue funding the two wars he inherited. In addition, he inherited the fallout from the near-collapse of the financial sector as the mortgage crisis manifested itself. As Obama tried to determine the budgetary approach, he could be a fiscal hawk – the approach natural to me and most Republicans – or he could try and spend our way out of the biggest fiscal crisis we have seen since the Great Depression. As is so often the case, history can give us some insight.

After the stock market crash in 1929, the Secretary of the Treasury, Andrew W. Mellon, indicated that the Hoover Administration would let the market sort it out[2]. They would let weak banks fail (keep in mind, this was before the FDIC) by refusing to lend them cash and refusing to put more cash into circulation[3]. These actions created a liquidity crisis. Further exacerbating the problem, Herbert Hoover signed the Revenue Act of 1932, which raised tax rates across the board in order to balance the budget.

The lessons learned from the fiscal policy of the Hoover Administration is that the market can sort it out, but it will do so with a huge human toll. It taught us that during a steep economic decline, balanced budgets are not only unnecessary, they are detrimental to recovery.

The point is, not all deficits are created equal. Short-term deficit spending in response to a specific economic crisis is necessary. Bush indebted us to enact popular, but irresponsible, tax cuts and to avoid funding an unnecessary war.   Obama is indebting us to avoid financial calamity. The job for the electorate is to ensure that this unsustainable fiscal policy is short-term and targeted toward economic recovery.

While I am not a fan of deficit spending, I am certain that the policies of the Obama Administration are the right ones. We hadn’t had an adult in the White House since George H.W. Bush. It’s comforting to see that we have one again.

References:

[1] http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aRuHfcMIxMfw

[2] Notes from Crash: The Next Depression? on the History Channel

[3] http://en.wikipedia.org/wiki/Andrew_W._Mellon