The Strange Case of Germany

Germany is an enigma for Americans. Several articles published in the mainstream media in recent months have contained references to German inability "to address the problems of Socialism" and deal with the "economic threats of labor unions and environmental activism". When an average American looks at Germany (an indeed most of the member nations of the E.U.) they see a political atmosphere that would scare the heck out of Glenn Beck's cardiologist.

Professional level individuals in Germany take home about 50% of their pay after taxes. That is half of their check. Some of that comes from the German version of the VAT (value-added tax); this tax is essentially a sales tax added at every level of production. Corporations are not able to get away from the heavy taxes either.

German companies have already agreed to the carbon reductions that the United States is starting to debate...sort of. Rather than individual companies reducing outputs, we in the United States are going to beg our corporate masters to play with the pollution they produce like a dog bone at an auction. This at least, is how I perceive "cap and trade". Germany and the rest of the European Union nations are a decade ahead or more in every area of environmental management; from clean energy, to environmental managerial accounting procedures, to total resource management, to the gas taxes.

That's right folks...gas taxes. Taxes that are similar to our average price per gallon here in the US of A. Not our taxes per gallon, our TOTAL price per gallon.

German companies have another headache to deal with...labor unions. Powerful unions. Like baseball player union powerful. These unions literally pushed Wal-Mart out of Germany after the Arkansas firm had already made an enormous investment.

So with all of these factors, the U.S. mindset would expect huge, systemic economic problems. U.S. journalists project this impression on German politics, and it would be reasonable to project an economy devoid of competition, innovation, and jobs. It would be reasonable, but it would also be wrong, which is what defies U.S. logic.

Germany is the world's leading per-capita exporter. They make more stuff per person to be sold around the world than any other country in the world. If you are a big total fan, and think averages are for the little guy, they export more outright than the U.S., which is almost 4 times more populous, and are close to number one China, which is almost 15 times as populous. German companies are world leaders in innovation across a huge array of fields. German unemployment rates have always run a little higher than the U.S., but there is something deceptive in those numbers. Germany counts people employed in part-time jobs who desire full-time labor among the unemployed. The United States does not follow this practise, functionally making the two nations unemployment numbers the same.

All of this is written with a simple idea in mind; the best companies in the world benchmark their competitors, so why shouldn't the best nation in the world follow suit? There are many policies in Germany that would simply not translate well, but they are doing something correct. They treat healthcare as a public utility, so individuals and corporations are not burdened with the budgeting issues the subject creates in the U.S. To wit, when GM went belly up, its investors held some $28 billion in bonds which were the residue of decades of poor capital decisions and bad strategy. The firm was also on the hook for $15 billion to the UAW, most of that allocated for, you guessed it, healthcare. There are many, many techniques that a nation can use to handle healthcare as a public utility. Unfortunately for us, the debate in this country on which technique to settle on was hijacked by the pro-insurance/status-quo lobby's $400 million "stimulus" plan for ad agencies and lawmakers.

German firms also have those pesky environmental regs to deal with. The trick there is that they actually do deal with them, rather than using all of their energy trying to cheat or get the regs cancelled. Management guru Michael Porter wrote that companies in markets with tough environmental regulations were pushed to innovate and become more efficient, better competitors. Porter's proof can be found throughout Europe, including the continent's industrial heart in Germany. The math is fairly simple on this point; if more of the stuff your factory buys is turned into saleable product than waste and pollution, then your factory will make more money.

It seems like Germany isn't such a strange case after all...they just haven't given up trying to get better. As an American chauvinist, it irritates me that ANY European nation can look better on ANY scorecard than the U.S.A. Currently, I am irritated a lot. Surely we Americans can get back on top, if only we could hold OUR business community accountable.

We love our kids here in this country, and we love to make them happy. We also, however, know that sometimes we have to make them mad at us to do what is best for them. In that spirit, we should continue to be pro-business...we just can't forget to do those important things that "...they may not like, but someday they will understand."

The rational middle is listening...

I Could Be A Republican...

There is a great deal about traditional conservatism that fits comfortably into my worldview. I was raised in a traditional household by married parents (still going strong after 38 years mind you). I was educated in the Catholic tradition, attended church regularly, served as an altar boy, and was read to from the Bible by my father. The last 15 years of my life have been spent as both manager and student of the world of business, and I am certainly a capitalist. My greatest heroes growing up were soldiers and airmen (there are few children who would list their idols at age ten to be Generals George Patton, Claire Chenault, and Vinegar Joe Stillwell).

That my parents are liberal Democrats who did not force religion on their children or believe in mixing their strong patriotism with xenophobia, remains a powerful force pulling me firmly to the center-left of our often silly political structure. I do believe that a liberal interpretation of the commerce clause of our Constitution is the one reading most responsible for the economic power of our nation. The uniformity of our laws, levels of education, capacity for law enforcement (civil and criminal), and infrastructure have provided the platform for local businesses to grow into world-beaters over the last century-plus. This uniformity ONLY exists with a strong federal system, which by the way, we all have a voting stake in.

So I could be a Republican, if only the party would spend more time working on solving problems, and less time making asses out of itself trying to creatively criticize the President. I will highlight a few examples this week, and attempt to revisit the topic once a month. I will also, of course, pen a similar column about those lovable losers, the Democrats with similar frequency. The Republicans first, though.

Item #1: Terrorist trial misfire

When the Obama administration announced that five terrorists would be tried in federal court in New York, according to our laws and traditions, most of the right went into spasm. While Republicans could have, had they asked questions before they shot, focused on the victims families, most focused on something less noble. The predominant argument, repeated early and often by commentators, was that we should not try these idiots according to our laws and traditions, because the trials might make us targets. The Republican talking point was that America should give up its tradition because we are afraid. Speak for yourselves cowards!

Item #2: GM quarterly earnings report

Michael Steele, the less than stellar "leader" of the Republican Party, came out swinging against the Obama administration on news that GM is still losing money "even after $50 billion worth of taxpayer's money". What? This kind of "analysis" would be comical if it didn't hurt so many people. The pro-business party and its presumably pro-business chair too often demonstrate a complete and comprehensive ignorance concerning how business works. We invested cash to keep them going, and to finance the restructuring while the firm was in bankruptcy. Businesses that size don't turn on a dime, and the federal government (contrary to the tantrums of the Tea Baggers) was not "in control of" that firm. General Motors was and remains a colossal mess wrought by decades of abysmal management, cultural protectionism, and short-sighted union partners. The move by Steele is the kind of purely political fiction that the rational middle dislikes from both sides.

Item #3: The Bow!

With apologies to the family of the brainless Steve Ducey of Fox and Friends, there is not a 200 year precedent of Presidents not bowing to foreign leaders. Conservative commentators and the GOP politicians that have taken to repeating what the commentators say are either hypocritical, dishonest, or stupid. The FLAG must not be lowered below the level of another flag...if President Obama orders our flag to submit at the Olympics, than I will jump in line to scream at him. In the meantime, the same commentators who rightly criticized the left for laughing at George W. Bush (who held hands with King Abdullah of Saudi Arabia and kissed him) are now criticizing Obama? It is DIPLOMACY...and I wonder how many of these people were critical of Nixon, who bowed to the Emperor that attacked Pearl Harbor?

Come on people...keep your eye on the ball and stop looking for an excuse to attack the President every day. If you are patient, you will capitalize on real opportunity (it always happens), and when you do, the public won't dismiss it as another BS line from the "Party of No".

The rational middle is listening...

Putting Terrorists In Their Place

Ronald Reagan's administration had its struggles with international terrorism. Early miscalculations in Lebanon combined with the despicable work of the governments in Syria and Lybia captured nearly as many headlines as the Cold War. In the end though, Mr. Reagan and his team had a coherent strategy for dealing with the issue; for the countries that sponsored activity, proportional response and international castigation; for the terrorists themselves, death by special operations or treatment as a common criminal.

Reagan's FBI director put it best when he stated that treating terrorism exclusively as an act of war elevates the terrorists to the level of nations. The administration wanted to debase the individuals by treating them as the worthless criminals that they truly were. They accomplished this by not allowing them to claim a cause. The old saying that "one man's terrorist is another man's freedom fighter" crumbles in the face of justice fairly (and ruthlessly) dispensed. Khalid Sheikh Mohammed and his ilk are murderers, nothing more. This fact does not diminish the sacrifice and heroism of the citizens of this nation on September 11, 2001. A finding, in our court of law, that these pieces of garbage are nothing more than murderers worthy of execution reinforces the strength of our nation.

The federal court in New York that is the destiny of these killers successfully convicted the first bombers of the World Trade Center, and the U.S. court system has successfully prosecuted and punished dozens of these criminals on our soil. The argument that this prosecution should not go forward because the prosecutors might fail, or because the trial might make New York a target is despicable. Our presence in the Middle East and our support of our friends in Israel make us a target, and yet we do not yield. Is our nation to believe that we can't dispense our justice for fear of reprisal? Are we to be so frightened of this "sheikh" that we shrink away from our system of justice and our ideals? Are we to be a nation of cowards who choose to abdicate everything we believe in when we are tested?

The same commentators who have spent months crying about the Founding Fathers and bemoaning the loss of our nation are now insisting that we let fear determine how we deal out justice and to whom. Patrick Henry stood two and a half centuries ago and demanded "Give me liberty or give me death". After 9/11, those of us happy to give up freedoms to the Patriot Act seem to have quickly forgot his intent. We must stick to our beliefs ESPECIALLY in times of crisis. A time of war is precisely the moment that our values should be fought for, lest those doing the fighting in distant lands make their sacrifices in vain.

Be proud of our democracy and bring these worthless killers to justice. Their labels do not dictate the level of honor to which their victims are entitled. Do not assign greater significance to these villains than they deserve. When the United States brings this petty "sheikh" to his justice in court, he will attempt to turn it into a grand stage; but the free people of our nation and those of our allies will see him revealed as he really is; another killer looking for an excuse.

The rational middle looks forward to your thoughts...

A Total Loss of Perspective

The images from the protests held Thursday on the steps of the Capitol were disturbing; the (by now) typical Obama-as-Death effigies and confused references to both Fascism and Communism shared the stage with a new twist. One of the protesters decided that graphically comparing the health care bill to a Nazi death camp was a good idea.

"National Socialist Health Care" was the label, superimposed over the emaciated bodies stacked at Dachau. Horrifying.

To protest legislation on the steps of the Capitol is a responsibility as well as a right; it is one of the prices we must pay for freedom. The rational middle contends that those protests should be passionate and pointed, but that they should also stay within some set of boundaries. There was a time when we were able to recognize when those boundaries were violated. Has that time passed?

This space takes no exception to those who believe that the election of Barack Obama or a large Democratic majority in both houses is dangerous; people on the other side of the fence believed the same of George W. Bush. This space also agrees that active and vocal political conflict is appropriate for those who are in the political minority. The difference exists in the scope and tone of the conflict. In an effort to discredit the health care bills, many in the country have built this bill into monstrous proportions. The various bills have been cast as granny killers, communist plots, and insidious Muslim conspiracies.

I definitely miss the tax and spend arguments that Reagan used to win debates. In the case of these bills, Republicans and Populists would have a great deal to question (indeed attack) regarding the spending levels and benefits attached. The great pity is that Republicans had a natural position in health care reform; only recently taking a tiny step towards it in their own version of reform. They could have acted to end anti-trust exemptions, create co-ops and/or exchanges, and provide credits to small businesses. These pro-business positions would have been reasonable and proactive attempts to resolve problems, and would have found wide support. They could have chosen a more aggressive stance, and used the opportunity to go after payroll taxes on small businesses.

The grand ole party chose to drift down to its lowest common denominator, and has missed a golden opportunity. They will vote against a bill that will disappear as an issue until people start benefiting from it. Even the costs now have some justification. The current bill, HR 3692, will end up costing about $100 billion per year over ten years (after the conference work between the House and Senate). While this is a large number, consider this fact: the Bush tax cuts were designed to stimulate the economy and will cost $300 billion per year over the 6 years of the plan. I think we all know what happened to the economy.

The big question is what this bill will or won't do. Here is a list of things the bill will not do:

• It will not mandate that anyone take Federal insurance. The exchanges and co-ops constructed by the bill rely on the existence and competitiveness of private insurance firms.
• It will not tell doctors what they can or cannot treat. The doctor-patient relationship is specifically outlined in the bill.
• It will not cover everyone. The most optimistic estimates make a claim of 96% covered. Some estimates are lower.

What will it do?

• It takes away the industry's anti-trust exemption, meaning that insurance companies can no longer operate as a monopoly.
• It creates and provides support for private, non-profit co-ops to allow individuals and small businesses to come together to get better coverage and lower rates.
• It creates exchanges that will like an insurance "stock market". This is another tactic provided to provide competition in the marketplace. It is within the exchange that the much misunderstood public option exists.
• It outlaws preexisting conditions and excessive rates for older Americans.
• It sets a floor at 85% of premiums collected to be returned to clients in the form of services. This industry measure was in the mid 90's during the mid 1990's and has declined since.

A controversial piece is the mandate for individuals to carry insurance. The idea is that many of these measures will reduce per-customer margins for the industry. When margins tighten in business, companies must replace lost margin with increased volume. This combination of directives is designed to turn the health insurance industry into a traditional service provider that is forced to deliver higher quality products at lower prices to be competitive.

Not the worst idea in the world, even if it isn't the best. What this bill represents is entitlement programs for the 21st century. It is public policy used to redefine a marketplace and refocus market pressures to drive private business solutions. Done properly, the result will force more insurers and health providers to find solutions like those used by the Mayo Clinic, Kaiser Permanente, or Intermountain Healthcare; solutions that find these systems with the highest service levels and lowest prices in the country.

Big dollars...yes. Socialism....uh, no. I think that opponents of the President's agenda should continue to resist with courage and passion. It might, however, be advisable for these folks to read the bills they are attacking first. Even better, folks should proactively propose solutions to problems we know are out there. Then we could have a good old fashioned political debate!

The Rational Middle is ready....

Stimulus Creates 10 million Jobs

The kids over at Fox News have been gleefully reporting that the "$787 billion porkulus package is a failure". The first reports from the "liberally biased mainstream media" supported the idea, because they cite the White House as the source that says 30,000 jobs have been created due to the package. Both sets of reporting come from data released on Recovery.org, the government's website for all things stimulus.

Recovery.org exists to provide transparency for spending related to the recovery package. Unfortunately, the media did not read everthing they could see on the transparent website. All of the media outlets (Fox News can't shoulder this burden alone) are to blame for what we are hearing. The problem isn't in the writing or even presentation of the information, it is in the lack of research. The website very clearly states that the 30,083 jobs created come from "federal contract spending", which represents about 8% of the total spend to date.

It gets worse....the first big number to think about is $16 billion. $16 billion is the total value of federal contracts awarded to date. The bigger number is $2.2 billion. $2.2 billion is the amount actually paid out for those contracts.

$2.2 billion for 30,000 jobs. A little different than Hannity's claims and all of the hand-wringing on CNN. So I figure it is time to do a little "modern" reporting myself. Here goes:

The Stimulus Package is on pace to create over 10,760,000 jobs! The United States set to enter new era of prosperity! Neoconservative business owners demand Obama pays Mexicans to emigrate to fill needed positions!

I can show more math to support my position than Hannity can....

But that is not what the Rational Middle is all about. Many economists last winter were predicting unemployment to top 10%, but the Obama team ignored them and made public a view that unemployment would only top 10% if the stimulus was not passed. My guess, based on the numbers so far, is that the stimulus will eventually directly create or save a little over 1 million jobs by the end of next year.The criticism of the administration because of its failure to come close on the projection is both fair and relevant, but it does not change the need for action or the results of the action taken.

More money has been "spent" for tax benefits as a result of the stimulus bill than for projects (part of the $288 billion tax cut that every Republican in Congress voted against...unless they were Senators from Maine). Over $63 billion has been spent on an extension of entitlement benefits such as unemployment. The retail sectors in hard hit areas like Southern California, Florida, and Southern Nevada are clinging to life thanks to those benefits.

The media has a responsibility to report the facts so that the people can hold their government to account. The media, in its haste to report a big "story" instead of the facts, failed that obligation.

The rational middle wants to be "stimulated" by your commentary....

A Media Biased

A television spot voiced by Sam Waterston for the political magazine, The Nation, features the line; "...and that famous liberal media bias you just can't get anywhere else." The recent comments by a White House communications staffer that Fox News was not a news company but a propaganda arm of the GOP, has renewed the focus on the question of media bias. The venerable Bill Moyers summarized the problem for media today in a somewhat different manner; Fox is a Republican machine, but the "mainstream" is motivated by ratings rather than Democratic agendas. As Moyers points out, this leaves nobody to do the business of the American people.

Free speech is the most abused right in the Constitution. The concept that is used as a crutch by paparazzi and rabble rousers is meant to protect the speaker (or writer) from government reprisal. It does not protect Rush Limbaugh from accusations of racism, nor does it protect the President from accusations of being a Communist or Muslim. The concept allows a free media or individual to investigate and/or report on the relevant actions of the government and its officers/agents on behalf of the citizens. This notion is, unfortunately, a dying ideal due in large part to the reality of our short attention spans and limited education. Real reporting on government activity is conducted on several of the better organized internet sites in addition to programs on PBS and the BBC. The reporting is fully formed and meticulously cited because the time exists to support the technique.

Network news is able to show less than a dozen stories of less than 3 minutes on a typical broadcast. We have for years been getting our news through a medium that is Twitter like in its brevity. How do you explain health care in less than three minutes? How do you define the parameters of Afghanistan in that time? The less words a news writer is able to use, the more the individuals phrasing and context dominate the story. Last week, I watched several different network and cable news stories on Afghanistan prior to watching a Frontline program on the same topic. The network and cable programs were filled with short sound bites from politicians and pundits from "each side". The Frontline presentation was a well organized compilation that described multiple sides, each with a well defined set of reasons and plan.

The football fans reading this would not likely sit down to watch a game without listening to several minutes of description (complete with graphical aids) of the individual players, coaches, and possible strategies that would be involved in the game. When it comes to national security or economic recovery, we lose interest if the commentator can't identify the good guys, bad guys, and one critical point in less than a couple of minutes.

Now that we have identified the cause for the loss of media accuracy (us), we should look at the reality. When it comes to the battle to label the "mainstream media", the reasons are clear. Stories written and reported from the perspective of working class voters are not likely to favor Conservative thinking. This is because Conservative policies are meant to benefit the working class indirectly (in an economic sense) by enabling the business class to grow rapidly and take the working class with it. There are, I would argue, valid and reasonable points scored in the favor of this "supply-side" economic argument; those points just don't resonate with a voter looking in the short-term. By impugning the reputation of media sources, the Conservative movement has, for the last thirty years in particular, been able to gain ground in demographics not associated with the Republican base. People have begun to distrust the media as much as the politicians. The fact that the same interests have attacked the concept of government in the same terms over the same time period is not a coincidence.

The current label being tossed around, is that the mainstream media is colluding with "Marxist Obama" to lead the nation towards Socialism. That sounds like scary stuff, but it fails a critical test. What is in it for the media? We know why Fox News wants to support Republican policies and personalities; the parent company, News Corp. has paid less than 6% in corporate taxes worldwide since the mid 1990's (at a time during which supposedly liberal ABC parent Disney has paid 31%). Fox News president Roger Ailes was a consultant for Nixon, Ford, Reagan, and the elder Bush. What is not clear is what would make the other companies support a Communist plot?

The "Big Three Networks" are publicly traded, capitalist ventures whose major shareholders and corporate officers all sit in the high tax brackets and pay capital gains regularly. The previous paragraph should have identified why we could expect ABC to have a Conservative bias, rather than a liberal one (see the taxes they have paid). NBC parent GE, famously and repeatedly attacked as an Obama co-conspirator by Fox News, was the firm that launched Ronald Reagan's political career (indeed GE did not pay corporate tax for many years beginning, not surprisingly, after Reagan took office). The multi-billion dollar firm is engaged in a multitude of businesses that are vulnerable to intensive federal regulation; again, the motivation of the corporate parent would indicate for a Conservative bias. CBS is owned by Sumner Redstone, who is in fact a self-proclaimed Democrat. Of course Redstone endorsed George W. Bush against John Kerry in 2004, so I don't think it fair to assign any parent company bias to CBS.

If the corporate parents have a natural Conservative tilt, and the officers and managers are better off financially in a Conservative environment, I find it hard to believe that the networks, and their cable offspring, would be capable of engendering a deep-seeded liberal bias to their reporting. As for a Communist conspiracy, the Soviet Union, as I recall, did have a news service; one news service. It was called TASS, and it is not clear that the reporters and producers were paid very well, nor is it apparent that Communist functionaries have ever had the time or inclination to indulge "personalities".

Where does that leave the members of the rational middle? Most news programs, even the news lineup shows on Fox hosted by Shepard Smith, have value as guides to what needs to be looked at by the citizens of our participatory democracy. The opinion-driven host and panel shows are likely to structure facts in the way an attorney might; they are trying to convince the jury of public opinion. Watch and believe them at your peril. If you are not reading about the news, you probably don't understand the news. That takes time, but I think the country is worth the effort.

The shows today are fancy and entertaining, but most of us learned long ago not to judge a book by its cover.

The rational middle would like to hear YOUR judgement of this column....

A Death Panel For Winter

Back in 2004, when Congress revisited Medicare and tried to deal with prescription drugs, they dealt with a related health care matter. The Schiavo debate was fresh in the public's mind and there was wide agreement that a problem existed with a fairly straightforward fix; educate the nation so that people could make legally binding decisions in order to keep government out of their death. Among the responses to the issue was a clause in the Medicare bill that provided coverage to seniors for counselling on items like living wills, do not resuscitate orders, medical powers of attorney, and final wills. This clause facilitated conversations that would help seniors and their families decide and communicate to doctors their desires; whether they be DNR's for terminally ill patients or an order to keep the tubes in and machines on indefinitely. You may not realize, but if these desires are not clearly illustrated and presented to medical and legal authorities, the state can and does step in to make the decision.

This important and well-stated legislation passed without comment in 2004; in 2009 it was included in the description of services for the public option in HR 3200. In that description (for insurance through the government that would not be mandatory), the steps were called "end of life planning". Insurance company shills quickly dubbed it "granny killing", and Sarah Palin jumped into the fray calling it "killing granny to save money". The more people have actually read the bills moving through Congress, the more they have realized what a bunch of garbage this all was. That said, the time it took away from the issue, and the way that it shifted the focus of lawmakers was a terrible waste.

As fall starts to move away, and the health care issue crawls slowly to conclusion, I have started to wonder what the next great moment of hysteria will be. There has already been some bipartisan work done (by Linsdey Graham (R) of South Carolina and John Kerry (D) of Massachusetts) on carbon reduction and energy independence. Much like health reform, which began with an interesting and unique approach authored by a Republican and a Democrat, I think the Kerry/Graham bill will be the canon fodder for the energy industry. The Insurance Cartel and Big Pharma threw better than a quarter billion at defeating health care before they came out publicly against it. Big energy has half of the world's ten most profitable companies, firms that generate $50-$70 million per day in PROFIT. Imagine how much they will throw at the issue. This winter you can count on it; Glenn Beck will go on his show and claim Barack Obama is trying to freeze Granny into communism! I am serious!

Financial regulation represents even greater fodder for panic. The legitimate public anger that drove the Tea Party car steered by Dick Armey, Karl Rove, and Glenn Beck through the spring and summer, was fueled by two contradictory sources; populists, who were incensed that taxpayers were roped into rescuing corrupt and unregulated businesses that were supposed to know better, and libertarians, who detest the very idea of government intervention in the market. For all practical purposes, there is no side to this problem; economists, bankers, fund managers, politicians, career regulators, and rank and file citizens believe reform is necessary. Of course, we stood at a similar place in the dawn of the heath care battle.

It seems clear, that if business interests have become so large as to upset the balance of the world if they fail, that something must be done. The difficulty is that populist anger will prohibit another bailout so some government intervention is called for; while libertarian forces in the country push back against the notion of regulation. Either the institutions must be made to forgo excess risk, in which case they forgo higher levels of reward, or they must be broken up, in which they competitive advantage driven by scale. There is no Pollyanna solution whereby this marketplace regulates itself; it is driven by profit and will follow the profit to the literal edge of the rules. This is an opportunity for informed, rational debate and discussion. It is an opportunity for creative solutions to be proposed and looked at without fear of political reprisals. It is an opportunity for the new and innovative.

Unfortunately, it is also an opportunity for someone to scream that the Marxist Obama is trying to steal Granny's 401k.

Our financial crisis has a lot of players, including us. Just as on climate change and health care reform, financial reform presents opportunities for we the people to make a difference (the old personal responsibility ploy...it has a place). The commercial and political sources of our problem however, go back to the Ford Administration and touch every President and every Congress since then. George W. Bush and the Republicans may have done the gift-wrapping and final assembly, but there is heavy blame to be set at the feet of President Clinton and representatives of both parties. This administration, and the Democrat and Republicans in this Congress, can fix it. They simply need to be encouraged to do so in a grown-up fashion.

There is a movie coming out centered on the Mayan calendar's supposed prediction of the end of the world in 2012 (presumably, we ran out of Christian prediction in 1999, 200, and 2001). For most people, the commercial for the film is not a moment of shock and panic. I would submit that the emails and frantic wailing of television commentators you will hear over the next few months could be treated with similar indifference.

The rational middle waits for your comments...

We Call Them Liars in the Real World

I misspoke, or made an error, or omitted a fact, or misremembered, or, or, or, errrr....I am a politician (or a ballplayer). If we said to our parents what these folks say to their constituents on a regular basis, we would be slapped and grounded.

They get to continue pretending to be important.

After spending weeks fighting the stimulus bill as "wasteful big government", Senator Kit Bond of Missouri went on a bus trip to promote projects funded by....the stimulus bill.

Over the summer, it was Congressman Boehner celebrating in June about millions of dollars in road construction funding from the stimulus bill that appeared to be "putting some folks back to work and getting things done". A couple of weeks later he insisted that he hadn't seen any money from the bill and insisted that it hadn't created any jobs. (Note: His home state of Ohio has seen more than $60 million, most of it spent on roads, police, and teachers)

Rep. Jack Kingston from Georgia fought the stimulus bill tooth and nail using the old "Washington waste" card. He issued a press release lauding the nearly $250,000 being spent to retain police officers in Alma and Jessup, Georgia. He pointed out that local efforts work better than attempts by Washington to fix problems from afar. He underlined the point by commenting on the tax savings to the district because the towns would not have to come up with the cash themselves.

He missed the tiny little, almost insignificant point that the money was from...the stimulus bill.

President Obama sold stimulus as a bill that would save or create 1.5 million jobs. So far it has saved tens of thousands of jobs (mostly police and teachers), but hasn't done much in the way of creating. The administration is trying to "stay on message" and "frame the discussion" about how things are going. I tried framing discussions with my parents....they stayed on a very particular message.

The bright side that we are missing is that less than one third of the money has been spent. More will happen in the coming months, although it is clear that Obama's team badly misread the depth of the recession we were in.

The rational middle would have been happy if all of the money spent on food stamps, unemployment benefits, and tax cuts had been funnelled towards infrastructure projects. Moody's has studied the harmonic benefit of federal spending and found that infrastructure creates the largest effect by far (tax cuts, alas, create the lowest). We the people, however, demanded immediate action and quick results. The confused timeline and muddy results have left lots of room for what politicians call "spin".

In our world, we know it as, "lies".

The rational middle looks forward to your straight talk...

Confusion, Progress, and the Status Quo

These are confusing times we live in. The Democratic president is escalating a war, confronting a union, advocating for torte reform, and angering his liberal base. The Republicans in Congress have attacked the previous (Republican) administration's economic record, positioned themselves as champions of Medicare, and voted (all of them) against a $288 billion tax cut.


This year has featured a plethora of events I never thought (or hoped) to see in the United States; governors and state legislatures considering secession (treason), threats and suggestions of military takeover, and 300,000 residential foreclosures per month. Picture if you will my friends, what the reaction would have been had Rep. John Conyers screamed at Ronald Reagan in a joint session of Congress. Now think about what did not happen to Rep. Joe Wilson after his little escapade last month. Think about the votes you and I and several million others cast to put a large Democratic majority in power; none of us cast votes to give Senator Reid and Rep. Pelosi more power, we did it to get an agenda passed.


The confusion reigning in the rational middle this year is closely tied to how low the standard for this country has fallen. If you look at polls, you notice quickly that most of the time most of the people are disgusted with the two dominant political parties. This fact is manifest in the low numbers for party identification and the abysmal numbers for Congressional approval. Depending on the poll, no more than 30% of Americans now call themselves Republicans, and no more than 40% will label themselves Democrats. My ambivalence to party identification is easily described in the context of this year; the Democrats have proven their absolute weakness, and the Republicans have proven that facts and progress are less important than winning soundbite battles.


How low is the standard now? With Congress and the nation behind him, Teddy Roosevelt broke the backs of big monopolies, built a great Navy, created the National Park system, and established the United States as a power to be reckoned with on a world stage. With Congress and the nation behind him, Franklin Roosevelt led the country out of the Great Depression (before and without WWII folks), established the FDIC that probably saved your bank account last year, established the Social Security program that has allowed your elders to retire (ask them how that pension or 401k is doing), and built much of the brown water transportation and irrigation network that is, at the moment, sliding into ruin. For good measure, FDR then led us to victory in WWII. Dwight Eisenhower built the interstate highway system at a time in which the nation was dealing with a real debt level surpassing today's. John F. Kennedy led us to the Moon in an adventure that established the market pressures that drove aeronautics, computers, and everything we do today with satellites. Ronald Reagan rebuilt, from the ground up, our entire military establishment at a time where the nation needed the debt spending the job entailed because of the terrible recession we were in.


What have done this year? We had a chance to establish effective 21st century financial market parameters...that was too much. We could have taken on the nation's $2 trillion need for infrastructure repair and modernization....that was too much. We could have dealt with the world's least efficient medical delivery system....nope, that was too much. We could have...we could have....we could have....


All of us have needs, individually and for our businesses. None of us like taxes, individually or for our business. So here we are, in possession of the greatest system of self-government in the history of the world, waiting for "the market" to fix what ails us. There is nothing quite like the Status Quo, and the Status Quo is nothing like progress. Previous generation realized that the United States needed to grow, and that the growth would eventually pay for itself. The Apollo program was far more expensive, in real dollars, than anything ever attempted by a government (anywhere) in peacetime. I would suggest that if you think it would have been better to let the Soviets get to the Moon first rather than "saddle our children with that debt", then the Communist we need to worry about is not, in fact, in the White House. The simple point being, that we used to take on big challenges with the confidence that we Americans would make it work. Over the last 30 years, most politicians' idea of a big challenge has been to figure out how not to do anything productive.


I guess that is why I am so confused...we used to be selfless and brave in this country.


The rational middle is waiting...

Sustainable Profits

Business and politics have been in open warfare since late July, when the insurance industry opened hostilities against the idea of health reform. Over the next several months, the conflict will escalate over another idea; cap and trade. Cap and trade is another in a long line of environmental action attempted by those crazy, tree-hugging, environmental wackos.

Environmental wackos like Linda Greer of the Natural Resource Defense Council. At a conference in 2003, Ms. Greer was disappointed to reveal that 67 firms had rejected her request to work with the NRDC after she related the results of a project at Dow Chemical. Working at one plant in Midland, Michigan, the crazies were able to cut toxic emissions by 37%...but it cost Dow....

Wait a moment...the operation saved $5.6 million per year! Hmm. Why would companies not want to save money on operations costs while making the world a better place to live in? I am afraid that I lack the intelligence to answer that question. Dow, of course, is no corporate angel. But the firm has made a point of being proactive on the environmental front, and using the green movement to generate efficiency in its operations. They got ahead of the curve on CFC's in the seventies, and have embraced a variety of techniques since that have strengthened its corporate position while providing social benefit. They pick the low hanging fruit.

The question on the mind of the rational middle, is why don't other firms do the same? Why do firms and individuals insist on sticking their heads in the sand? People, and companies, are afraid of change. For most of human history, the world has been so big, and we humans so small, that it was natural to see the world and its resources as infinite; and the world's ability to absorb our waste as absolute. In more direct terms, we thought it was ok to pee in the river as long as we got our drinking water upstream!

It is time to grow up. How many times do you hear, or speak yourself, the phrase "It is a small world"? Take that phrase at face value, because it is the truth.

Most regular folks have the idea that big companies are smart enough when it comes to their own self-interest. If AIG, GM, CITI, Merril, and the rest aren't enough to disabuse us all of that notion, then there isn't much left to say. Big companies, like the rest of us, sometimes miss the boat. Most estimates of remaining oil reserves state that the world will run dry in this century. The absolute effects of global warming as described by Al Gore's film have been disputed by people on the basis that there is not enough fossil fuel left in the Earth to produce enough CO2 to make the scenario happen. Despite this, BP's chief economist Peter Davies insists that they don't believe there is an absolute resource constraint...they are thinking or acting as if the tap will never run dry.

I mention these stories as a reminder that when you see someone on the news sagely lecturing the nation on what is in the interests of business, that they are just as full of vinegar as the rest of the world. We, as consumers, need to push sustainability on our businesses and in our lives. We need to let legislators know that the corporate world needs to be both responsible and efficient. The Japanese and Europeans have a legacy of voluntary agreements between government and industry to address environmental issues that have been very successful, but the great management thinker Michael Porter has found that corporations become better operators in the face of government regulations. Either way, by carrot or stick, our corporate world needs to embrace sustainable operations.

Materials flow accounting, total quality environmental management, and all of the elements of environmental managerial accounting can be leveraged to find environmental benefit that pays for itself. I could list hundreds of companies that have achieved successes of the same magnitude as the one enjoyed by Dow and Linda Greer, but none of them would change the basic need.

Whether it is health care delivery, energy policy, or our nation's infrastructure, when are we going to stop running from every challenge that comes our way? When are we going to stand up and embrace the opportunity to move the country forward?

The rational middle looks forward to your thoughts....

Repetition Matters

When you are building a brand, repetition matters. People need to hear something over and over, and in different contexts, before they fully internalize the information. In politics, as well, repetition matters. Politics is, after all, branding. So what brands have the different "producers" created over the past forty years or so?

Democrats/Liberals are pro-choice, pro-peace, pro-social welfare, pro-arts, pro-diversity, pro-science, pro-education, pro-negotiation, pro-labor, and pro-environment.

Or....

Democrats/Liberals are baby-killing, gun-hating, loafer-supporting, Hollywood worshipping, anti-American, anti-Christian, anti-self reliance, soft on defense, anti-corporation, and anti-human in the face of seals and spotted owls.

Republicans/Conservatives are pro-life, pro-business, pro-liberty, pro-individual, pro-morality, pro-American, pro-Christian, pro-private sector, pro-military, and pro people before nature.

Or....

Republicans/Conservatives are bigoted, misogynistic, chauvinist, gun-loving, warmongering, greedy, fascist polluters.

So much for party identification. One brand that a majority of Americans have bought into is the "Government is the problem" brand. What a shame. The miracle of America, the dream of America, the promise of America, and the challenge of America, was and is the notion that people can come together to govern themselves for the benefit of a common good. This very simple notion stood in stark contrast to the idea that was pervasive in humanity throughout recorded history; men needed to be governed by some power, whether religious or royalty.

A group of very brave people broke away from their colonial masters 230 years ago and proceeded to prove to the world that men did not need a king. They proved that governance could be shared through the mechanism of participatory democracy. They, and we, showed the way to the rest of the world. The effort took compromise then as well as now. The effort also took people who were willing to accept that all would not always go their way. This spirit is, I fear, a minority ideal.

We have adopted the "brand" is a tool for governance. We believe now that our brand must beat the others, Coke after all can't join Pepsi for mutual benefit; why then would Republicans and Democrats do something as silly as that? We have drawn a line around "business' and "the people" and insisted they be held separate. We have adopted the mentality of angry drivers screaming at traffic when we look at legislation. We have accepted that "the government" and "the people" are not the same thing.

There can not be another more Un-American notion than that; the miracle of America is that people vote in and define their own government. Naive, you say? No. Our government will never be perfect, as our business, sports, religion, relationships, and the rest will never be perfect. I have yet to see anyone at Fox News or MSNBC get out of a boat on a lake and walk on the water. You wouldn't guess that from the way that news outlets act.

People can and do influence legislation. It is happening right now. A nearly unprecedented majority was elected to the House and Senate in the same party as the President last year. All of those sent to Washington went with a mandate from those who voted, a total that represents the largest percentage of living Americans to vote for a party and its candidates since Reagan and the GOP dominated in 1984. The mandate was clear, and it included four fundamental pillars; fix the greed in our financial system, fix our foreign policy and refocus our military on international terrorism, align our environmental efforts with the rest of the enlightened industrialized world, and fix our corrupt and ineffective health care system.

People have wanted the health care system fixed every year for decades now. There hasn't been a month go by that I don't hear of someone who is fighting with an insurance company for a drug, or a diagnostic procedure, or a surgery, or the right to go to a specialist. Up until about three months ago, three fourths of the country wanted a comprehensive health care reform law passed; the insurance companies and the drug industry even talked the talk of finding cost savings and helping government fix the problems.

Then the branding began; "death panels", "granny killers", "government-run health care", "Marxism", "the Founder's intent", and "Obama-care" became the slogans on people's lips. Despite these slogans, a majority of Americans want reform, and more than 40% want a public option to provide competition to the insurance companies. Contrary then, to the majority's wishes, nothing has been passed, and the bill about to come out of the Senate looks to be a windfall for insurance companies. It is every bit the disaster that opponents of health reform have claimed, but for the wrong reasons. The bill will mandate coverage and force the burden of lousy insurance company bureaucracy on everyone without competition. It will be a disaster because people, convinced by an insurance company ad campaign, have spoken to (and sometimes yelled at) their representatives. It is with humorless irony that I note those who have insisted that government doesn't listen to the people are the very same who have made Senators...listen to some people.

Insurance companies and their allies have spent more than $380 million dollars fighting this concept this year alone. That is a total that describes an industry desperate to avoid losing its monopoly. That is a total that eclipses the number given to the financial sector during the first phase of the bailout. Think about that total in the context of how hard your parents had to fight to get the drugs their doctor prescribed them onto the formulary. Think about the total when you consider opening your own business but can't because you can only afford coverage through your current employer. Think about that total the next time you think you are above the impulse of advertising geeks!

Government-imposed caps or floors on prices are counter-productive. Government-forced solutions to environmental issues are less likely to succeed than aggressive carrot and stick work with industrial groups and business people. There are areas that the people, acting through their government, would do well to leave alone, but we have recognized throughout our history that monopolies are bad for the nation. Teddy Roosevelt, a Republican icon, was famous for "busting the trusts".

Insurance companies act as a monopoly, and there is no market incentive to cover the entire U.S. market. Public health is a utility; without it, business does not operate and consumers do not have cash for growth. Add those two facts up, and the need for action is obvious. Do the math, think of your own experience with insurance companies, think about your costs going forward, and try to guess why an industry would spend almost half a billion....that's BILLION with a B...fighting a bill that would help its customers.

Stamp the American brand back on the government, and remember that our corporation, The United States of America, is the one that matters. We are the sole owners and operators, and corporations big and small exist to serve their customers.

The rational middle is listening for your comments...