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April 27, 2006
The Price Of Oil? Homeland Security
From the Seattle Times:
"America's unchecked appetite for oil is seriously jeopardizing U.S. security, despite the billions of dollars the U.S. spends to safeguard steady access to cheap oil. Americans spend $1 billion every weekday on imported oil. Many of those dollars are used to frustrate critical U.S. diplomatic goals, underwrite terrorist organizations and finance jihadist movements in the Middle East and southern Asia."
From Harvard Magazine:
“The consequent global warming is already linked to a pattern of record floods, droughts, heat, and other extreme weather events around the globe, and is expected to lead to extinctions of some plants and animals. But such news from the natural world has done little to galvanize political will. Even forecasts of disastrous effects for the human sphere—severe drought in parts of Africa and Europe in the next century, and rising sea levels worldwide that will someday drown major cities—have thus far failed to mobilize public action in the United States. The time to act is running short.It’s a grand problem,” says professor of earth and planetary sciences Daniel Schrag. “One that most people haven’t even thought about.” Even within universities, he says, “research on energy has basically decayed away to almost nothing over the last 30 years. Around the country, there just isn’t that much intellectual capital, and the reason for that is really quite simple: the cost of oil has been low for a very long time.”
Posted by Doug Smith at 04:13 PM | PermalinkFamily Values
Advice given to lawyers from a general counsel at a recent panel discussion:
"If there's a family crisis or something with the kids or other clients, we don't care about it -- get the job done," Linda Louie, general counsel for the National Hot Rod Association, told an audience of about 100 women Wednesday. "You are a commodity to us -- show me how you can solve a problem."
That is, show me how you can solve a problem I have because in the world of markets, networks, and organizations, it's all about me instead of we and the only thing that matters is whether you are adding value to my problem because, face it, you're just a commodity, a cog in the wheel. Family crisis? That's your problem not my problem. Kids? Ditto. Face it. Value is the trump card -- every thing else is just road kill.
That's Linda's view. What's yours?
Posted by Doug Smith at 03:43 PM | PermalinkApril 24, 2006
The Wolf At Our Door
Susie Madrak notes that Howard Zinn has written the all-too-predictable commentary about those who forget history are condemned to repeat it. "Now that most Americans no longer believe in the war", Zinn asks, "now that they no longer trust Bush and his Administration, now that the evidence of deception has become overwhelming (so overwhelming that even the major media, always late, have begun to register indignation), we might ask: How come so many people were so easily fooled?"
Zinn's article is worth reading -- especially for his appeal that we focus on the accurate facts about poverty, health and other difficulties that have beggared at least half our population instead of the lies of self-serving presidents who are interested in power instead of the common good or the greater good.
Still, hidden within Zinn's lament is a critical problem we all face -- namely, of paying a price for remembering recent history not wisely but too well. The Bush Administration has forfeited all ethical, legal, and practical right to our credulity. Bush = Lies is simply too evident and painful. (Even the Bushophiles cannot keep their spin spun consistently.)
Let us not, as Zinn notes, be misled by self-interested liars. But, there is an additional question of great importance. As highlighted in the children's parable of the boy and the wolf, how will we proceed to judge if any threats and dangers in the coming years are real and, if so, what to do about them?
For that boy is not just one individual. He is our nation and the world.
Posted by Doug Smith at 12:51 PM | PermalinkNature Abhors A Vacuum
The Bush Administration has emptied itself of all that has been key to governing the American democratic experience: openness, accuracy, candor, debate, competence, values, charity, hope, forgiveness, ethics, the rule of law, inclusiveness, dissent, consent, shared accountability, the common good, and the greater good. They have sucked all the air out of our government and, whether this November or some future November, our nation will start to pay yet one more price for their sins. Instead of the Bush-style ignorance of all the many difficulties and real problems that face us, we will instead see a Congress so bent on investigating that it will risk yet more years of neglecting the many challenges that beset us. Such investigations will be necessary to healing the grave wounds done to our body politic. But, while necessary, investigations will not be sufficient to moving that body politic forward into the demanding 21st century. And, in a choice between just re-working the past versus both that and taking responsibility for the future, most politicians will find the former has great reward at little risk while the latter is loaded with risk. The surest thing going once Bush lacks a Republican Congress will be the public -- and even the corporate media -- embracing those who remind us just how bad this president and his administration have been. Responsible leaders must do this -- and, yet, we must pray that they will also do more than just that.
Posted by Doug Smith at 12:14 PM | PermalinkApril 23, 2006
The Decency Line
By mid-2005, according to the Economic Policy Institue, 28% of families living in the US did not have the incomes to afford the items in EPI's basic family budget for secure, safe and decent lives. There are 108 million households in this nation. So, 30 million familes cannot make ends meet and fall more and more in debt with every passing month.
That was almost a year ago. Since then, we've seen interest rates rise, consumer debt continue unabated and the price of energy (home heating oil; gasoline) skyrocket. The Bush Administration's sabre rattling toward Iran has had the predictable effect on the price of oil, now well over $70 a barrel and rapidly driving up producer prices that, in turn, will drive up consumer prices for more than just gassing up the car.
With nearly 30% of families already living below the 'decency line', the outlook for economic sustainability and sanity in the US is grim. There are many differences in affordability of life depending on where one lives (e.g. rural vs. urban), size of family, and local price patterns (among other things). Still, a very gross picture emerges from comparing the median income to the median family budget required for decent living. According to the latest figures I could find:
In 2005, the median family budget required $40,000 of income.
In 2004, the median family income was $43,200. (So, make it $44,000 for 2005)
The median is the point at which half the households are above; half below.
At 108 million households, this means 54 million operate, at best, within $4,000 of not being able to make ends meet (30 million of whom already cannot).
These are pre-tax incomes, by the way. So, the margin for (t)error is even less than the $335 per month indicated.
Everyone sees what's happened at the gas pump this last month. And, the Washington Monthly online has an interesting statistic: the typical household uses just over 90 gallons of gas a month. In the past year, of course, the price of gas has gone up more than 50 cents per gallon -- meaning this one item alone has eaten up $45 a month -- or, more than 13% of the margin of (t)error.
If you live well above the 'decency' line, these movements in gasoline (as well as interest rates and other) prices are annoying. And, it's not even noticeable if you are someone like Lee Raymond who just retired with an from ExxonMobil -- a company that, under Raymond's immoral leadership denied it had any power over gasoline prices. But, we are rapidly approaching a point where half the households in this nation will not be able to afford a decent, basic life.
Posted by Doug Smith at 02:04 PM | PermalinkApril 19, 2006
The Bunker
The Bush Administration has spent more than five years making close-mindedness, one-way conversation, we're always right, no fresh facts or information, and insularity into highly predictable shared values for themselves -- that is, for the answers to 'how we do things around here in the Bush Administration".
Posted by Doug Smith at 05:28 PM | PermalinkApril 18, 2006
Competence Is Not A Red/Blue Question
Carl Bernstein of Watergate fame in Vanity Fair: "We have never had a presidency in which the single unifying thread that flows through its major decision-making was incompetence....."
Posted by Doug Smith at 07:46 PM | PermalinkHealth Care and Ideology
Part of our cultural orthodoxy hates government and loves the market. It typifies the all-or-nothing, either/or-ism of our times. For the Republican Right Wing, this means: Thumbs up to markets; thumbs down to government. (It only means that in their advertising. In real life, the Republican Government of Bush and pals have piled up the largest government spending and deficits ever. And, they happily savage the rule of law in favor of a government that knows no bounds.)
But, in the orthodoxy, the talking points and the assumptions always begin with market idolatry and government-bashing. We will not find a path out of this darkness without adopting a both/and view -- without seeing when and why markets work best and when and why governments work best and, most importantly, how markets and governments can collaborate to achieve optimal and sustainable solutions.
Health care provides a prime exhibit for our 'head in the sands, either/or' approach. Today, health care . Like so much else in contemporary life, health care is increasingly a haves vs. have nots affair. Those who can afford insurance and those who qualify for government help versus those who fall out of both buckets.
Chaos reigns. But, instead of sincerely tackling this grave and complex challenge, those who claim to be leaders instead demagogue about markets vs. government. Unfortunately for the orthodoxy, however, the private markets idolators are increasingly pushing a fiction. Consider only this: Overhead and other costs not spent on direct care account for 13% of the expenses of private sector insurers and only 2% for Medicare. Government is over 600% more efficient and effective than markets!
Why? Well, one reason has to do with the ideology of shareholder value fundamentalism. Instead of seeking sustainable returns that benefit shareholders, customers and employees in some reasonably blended fashion, the shareholder value radicals pursue profits and only profits in order to satisfy expectations of financial markets that, not coincidentally, they themselves shape. It's a self-fulfilling prophecy of doom: we must have more profits because the financial markets -- that is, ourselves, say we must have more profits.
So, how does a private insurer insure steady and growing profits in health insurance? Well, by combining steady increases in premiums with steady increases in costs used to screen out unhealthy people as well as fight off claims from all people. Why do private sector health insurers spend 13% of their budgets on things that don't make us healthier? Because private health insurers are more in the business of making profits than the business of insuring people.
Medicare doesn't have this motivation. And, under the assault of the 'we hate goverment' crowd, Medicare has had decades of pressure to reduce any costs that cannot be linked to direct benefits. Which -- in the both/and spirit -- is both a good thing -- and also a bad thing in that such pressures have probably also led to reducing coverage that might be needed.
In any event, the orthodoxy celebrates markets for their efficiency -- yet also fuels the capital markets ideology of shareholder value fundamentalism that, in turn, drives up administrative costs of private insurers more bent on financial results than insurance results.
But, there's more. Our capital markets also support the market for corporate control. One way of gaining more leverage over the bottom line is through market consolidation. Healthy market competition disappears when markets are so concentrated that either monopoly or oligopoly power sits in the hands of too few. Which, of course, is just what has happened among .
And so how are you feeling right now? Have you been reading along and thinking to yourself, 'this is a severe criticism of markets and celebration of government?" I hope not. I'm not contending that either markets or governments are the single answer. Instead, I'm suggesting that our nation faces a health care crisis of great complexity. We can solve it. But, to do so, we must understand and deploy markets when they work best and government solutions when they work best. None of which will happen so long as the conversation remains one of our typical screaming matches.
Posted by Doug Smith at 03:44 PM | PermalinkApril 17, 2006
Principle of Disagreement
Edward Rothstein of the The NY Times has a wonderful summary and set of reflections about a recent Yale conference on strong leadership versus the popular will. Here's my letter to him:
Dear Mr. Rothstein,
Thank you for the excellent report from the recent Yale conference about leadership and democracy. There is a strand -- a view -- that may not have been fully revealed at the conference; namely, that all human societies find some blend of hierarchy and democracy in how they govern or manage themselves. Sometimes that blend balances toward one or the other -- but there's always both at work. The discussion about strong leadership - about lions and eagles -- sounds like it reflected the uses of hierarchy which, as your fine article pointed out, might be 'good' or 'bad' -- the same as democracy.
Perhaps most critical, though, is your point near the bottom about the principle of disagreement. Think of this in terms of beliefs, behaviors, and attitude -- and ask yourself, from what sources do those beliefs, behaviors and attitudes spring so that they become a predictable set of values? How does it happen that a principle of disagreement exists in real life, not just in democractic/hierarchical theory?
(And, quick note: hierarchy itself cannot work well in the absence of some 'principle of disagreement'. See, for example, the recent Time magazine piece by the retired general who points out that officers owe their duty to the Constitution. In other words, even within the hierarchy of the military, there is a source for legitimate disagreement.)
There are a variety of well established sources for what makes human belief and behavior predictable -- that is, how it might happen that a principle of disagreement becomes habit. In addition to genetics (e.g. evolutionary psychology), human relationships, shared roles and status and shared ideas all shape values.
Those who attended the conference, like your readers, cannot answer your profound questions about the principle of disagreement and virtue without taking a deep breath and 'seeing' that these sources of shared values have radically altered as a result of how we live our lives today (versus how the folks who were discussed -- Lincoln, Hitler, and so forth -- lived theirs).
They -- and importantly those who followed their leads -- lived out lives mostly in contexts of place: of neighborhood and town and among friends and family so determined. Not all. Not 100%. But mostly. And, the values they predictably shared (e.g. a principle of disgreement; the blend of hierarchy and democracy in problem-solving and government) happened as a consequence of the human relationships, roles, status and ideas they shared because of place. In this sense, place operated like a forge whose heat forced folks to share values so that they could co-exist and achieve what mattered to them.
We don't. We live in markets, networks, organizations, friends and family. Our shared values derive from relationships that happen in these contexts (e.g. the folks we interact with at work often shape our values more than neighbors whose names we might not even know), from the strong shared roles of customer, employee and investor, and from ideas that spread because of markets and networks. For example, unlike our ancestors whose place-based ignorance stemmed from an absence of new ideas, our ignorance comes from too many ideas and the lack of information about which are accurate and useful (see, e.g., the widely shared idea of 'WMD' a few years back - the use of a powerful idea in our new contexts of markets and networks by leaders more bent on hierarchy than democracy -- importantly, even within their own organizations, let alone the nation.).
One of the predictable patterns of belief, behavior and attitude in our new world of markets, etc. is 'either/or-ism': the all-or-nothing, on-off, 'red' versus 'blue' pattern that so quickly turns any interesting question into declarations instead of real debates. This is not a healthy sign for any real principle of disagreement.
And, yet, if we examine our life in organizations, we find that the blend of hierarchy and democracy quite often offers a healthier support for the principle of disagreement than our life in markets. Markets aren't very promising contexts in which to disagree in constructive ways. We make choices in markets (Pepsi v. Coke; Republican v. Democrat; and so forth). But, even when we vociferously support our choices, we are not engaged in either real debate or real dissent. We are more likely acting out our role as consumers (or investors) in an unbelievable large context (markets) where our voices aren't actually heard in the manner of dissent or problem solving about truly shared purposes so much as feedback to those selling us ideas and products.
This behavior in markets is useful. It does provide feedback. But we should not confuse it with the principle of disagreement in the context of family, among friends or in organizations. It is in those contexts where our roles, relationships and ideas must blend to help us make choices that actually go beyond consumption to some form of the 'common good' -- that is, toward the identification and implementation of shared purposes that matter to our lives together with other people we actually know and care about.
This is why the blend of hierarchy and democracy -- and the presence or absence of leaders who interact with followers in testing the limits of both -- matters much more in organizations than markets.
When I look at organizations that are even reasonably succeeding in today's chaotic world, I tend to see a principle of disagreement that is healthy and predictable. When I look at organizations that are failing (e.g. the Bush White House), I do not see this.
Your excellent article is profoundly important in it's note about the essential nature of a principle of disagreement. Now, let's hope that more and more of our colleagues and others will start connecting the dots of where, why and how such a principle thrives versus does not -- and why it matters to the safety, sanity and sustainability of the planet.
Posted by Doug Smith at 02:24 PM | PermalinkApril 16, 2006
The New Golden Rule
Over the past 36 years, the prevalence of obesity among 12 to 19 year old Americans has doubled -- among children 6 to 11 it has tripled. Today, the percentage of kids who are either obese or overweight ranges from a low of 21% in Utah to 40% in Washington DC -- and the average across the US is 31%. Meanwhile, government officials report that poor diet and exercise will help push obesity-related diseases past tobacco as the #1 killer in the US.
This epidemic in eating disorders presents a classic case for how our culture of individualism conspires to darken the prospects ahead. The policy battle will rage between those who hold parents and kids individually accountable versus those who look to government regulation for answers. Meanwhile, the food companies who produce, distribute, market and advertise the diets and foods that are killing Americans in growing numbers will sit on their hands, happily making profits while claiming to be 'socially responsible." In reality, as this recent BBC item notes, the food companies don't 'care a jot'.
In the real world, though, the food companies -- and the employees and executives who work in them -- are the best positioned to do something about this crisis. They have the resources, the know how, the data, and the motivation -- if only they would replace shareholder value fundamentalism with blended values strategies for growth and prosperity. If only they would act to make capitalism sustainable instead of suicidal. Our culture of individualism will rant and rave about consumer and investor boycotts. Fine ideas. But, the real power to do something without waiting for governments to force action lies with the food companies and the thick we's who work there.
It's classic. The executives and employees of the food companies spend their working hours sitting on their hands - then spend their nonworking hours in the midst of kids who, because of food company products and marketing, are seriously overweight or obese.
Eventually, we'll find we have a 'red vs. blue' kind of split with regard to food companies -- one that already exists with tobacco companies. When this happens, those who work in food companies will be vilified. Why are they waiting? Why not act now -- and do so according to the new golden rule in our age of markets, networks, organizations, friends and families:
"As employees, do unto others who are consumers what you would have them as employees do unto you as a consumer."
Posted by Doug Smith at 02:02 PM | PermalinkApril 14, 2006
When Decisions Are Not Enough
A number of retired military officers are calling for the resignation of Donald Rumsfeld. Meanwhile, the White House continues to support Rumsfeld with the same 'doing a great job' comments we've heard many times before, perhaps most famously applied to FEMA head Mike Brown in the wake of Katrina. Rumsfeld has certainly failed the test of performance. Take any of his assigned challenges -- whether Iraq, Afghanistan, the war on terror, or his own vision of a reengineered 21st century military. Simply ask yourselves what 'success would like like' against any of those challenges. Try your best to answer in terms of real outcomes instead of endless activities. Then weigh actual performance against the outcomes and, inevitably, Rumsfeld comes up short. Drastically short.
Even reasonable folks on the Republican side of the aisle acknowledge Rumsfeld's failure. This particular caught my eye, though, because the writer holds Rumsfeld's previous accomplishments in such high esteem. And, in doing so, the writer betrays a characteristic failure that has bedeviled all of us since 9/11: the utter lack of appreciation on the part of our elected officials, our media, and ourselves to acknowledge that profound change demands more than decisions.
There are two kinds of change faced by organizations. In one, decisions are enough. In the other, decisions are necessary but insufficient because a critical mass of already employed people must learn new skills, behaviors and ways of working with one another in order to succeed at both change and performance.
Consider, for example, three challenges that confronted Rumsfeld:
Achieving military victory in Iraq.
Nation building in Iraq following military victory.
Reengineering the military for the 21st century.
Delivering performance results against the first of these three was/is profoundly different from the second and third. The military had been thoroughly rebuilt during the Clinton years (in significant part because of true bipartisan support for the reforms). The 'already employed' folks in the military and defense and related organizations already had the skills, behaviors, and working relationships to go into Iraq and achieve military victory. Put aside the decision to take that step. Once the choice was made, that decision was enough.
Not so with the second and third challenges. Nation building in Iraq as well as reengineering the military for the 21st century cannot succeed without profound changes in skills, behaviors and working relationships among people who are already employed -- that is, human beings like you and me and everyone else who must deal with all the anxieties, uncertainties and questions about the risks that real change presents with respect to job security, career aspirations, friendships at work, and, even, our search for meaning and fulfillment.
This is why 'behavior-driven' change is so much more difficult than 'decision-driven' change. The track record for success in behavior-driven change is much worse than decision-driven change. It probably always will be harder. But, the odds of success in behavior-driven change rise dramatically when leaders understand that decisions are not enough.
Rumsfeld -- as well as Cheney, Bush, Rice and others -- do not get this. They come from the "CEO as decision maker" school of leadership. Which, again political preferences aside, is good enough when decisions will be sufficient. These folks are not alone. For example, the 9/11 Commission and its staff also failed to appreciate this difference. They worked their tails off. They did a really wonderful job under very difficult circumstances. And, the recommended decisions they shaped truly make sense.
Still, a read through of their report shows they -- and, I guess, those like Robert Mueller and Porter Goss -- who must figure out whether and why to implement such recommendations went into the challenge without recognizing when and when not decisions would be sufficient.
My guess, though, is that Mueller, a good guy who is so dedicated to doing what's right as opposed to what's only right for him and his vision (compare Rumsfeld), has learned a lot about the difference between decision versus behavior-based change. Let us hope so.
If he has, though, he separates himself from Rumsfeld.
Rumsfeld has failed. He has not delivered performance. He should resign or be fired. I share the view that such is unlikely. But, whether he goes or doesn't go, let's hope that our discourse over the many failures of this incompetent administration will begin to include insights and lessons about decision-based versus behavior-based change -- because guess what? Most of the challenges we face and will continue to face are of the second kind and most of the leaders we elect and the media who claim to inform us about them have yet to master anything but the first.
Posted by Doug Smith at 12:46 PM | PermalinkApril 13, 2006
The Dangerous Union
Today's most dangerous union has no meeting or hiring hall, no dues, no plans for strikes and no formal organization or name. There are no workers in this union. There are folks who work. But neither their self image nor the image of them held by others would translate through the word 'workers'.
Today's most dangerous union is small relative to population as a whole. Only one in ten families have full-fledged membership -- although another ten to fifteen percent of families hope that one day they'll gain admission.
Today's most dangerous union embraces all faiths, ethnic groups, genders and sexual orientations. It welcomes those who detest as well as love their fellow human beings, those who are hard headed and hard hearted as well as softies.
Today's most dangerous union dominates every industry and sector. They rule and control markets and governments. They need not issue threats or decrees or five year plans. Their shared ideas and shared values are as predictable as night following day. They are the orthodoxy of our times.
Today's most dangerous union includes folks from all walks of life, all kind of jobs and titles, all manner of hobbies and skills and predilections.
Today's most dangerous union has all manner of diversity and, at the same time, one unyielding answer to all of life's most pressing questions: Shareholder value fundamentalism.
The single answer now destroying our nation and our planet -- not to mention sustainable shareholder value itself.
Posted by Doug Smith at 04:27 PM | PermalinkApril 12, 2006
The WMD Doctrine
By now, all but the ideological zealots know that the Bush Administration 'fixed the intelligence to fit the war'. Laying deeply flawed claims to being a "CEO presidency", they also famously commented that they would roll out the war much like a product. And, so we might call this the WMD Doctrine: Words of Mass Deception -- spin and exaggerate in order to build market share for your product (including your 'ideas' as products).
It seems to have spread. For example, having raked in unprecedented profits, big oil companies run ads that present themselves as nearly impoverished while, of course, prices at the pump get ready to rise with summer temperatures. The US military admits it's hyped Zarqawi for the benefit of "the home audience in the US." A few years ago, Royal Dutch Shell falsified oir reserve information to run a number on investors. But, then that's a form of accounting subtrefuge that exploded well before the appearance of the WMD Docrine. Ameriquest celebrates the American Dream in its TV ads while bilking folks in its boiler rooms by providing exploding mortgages. On a small scale, NBC news tries to provoke the creation of news by asking folks to dress as Muslims and attend NASCAR races.
And, now we read that major pharmaceutical companies hype diseases in order to sell drugs that folks actually do not need.
Posted by Doug Smith at 02:14 PM | PermalinkApril 10, 2006
Casualness and Swagger
"My sincere view is that the commitment of our forces to this fight was done with a casualness and swagger that are the special province of those who have never had to execute these missions--or bury the results."
So writes Lt. General Greg Newbold (Ret.) in Time magazine about the incompetence and braggadocio of the rush to war by Bush, Cheney, Rumsfeld and others who had never worn the uniform of their country -- a policy Gen. Newbold, then the nation's top military operations officer, vociferously opposed. In their swagger, the Bush crowd ignored Newbold. But, then, that's no distinction. They ignore everyone and anyone who does not goose step to their command. These are dangerous men -- men who have wreaked havoc on the world out of arrogance and ignorance.
Among the missteps cited by Gen. Newbold (a first hand witness who, unlike, say Bob Woodward, was not trading integrity for book royalties): purposely distorted intelligence to sell the war, micromanagement by Rumsfeld (who, let's remember is more interested in his personal theories of 21st century force readiness than actually focusing on the battles at hand), alienation of allies, and woefully inadequate numbers of troops and material to get the job done.
None of this is a surprise to any human being who has paid any attention to the inept, ideological and corrupt Bush Administration -- or to the official Republican Party that the Bush crowd has invaded and rules with an iron fist. What is, perhaps, new 'news' to readers is Gen. Newbold's reminder that, while enlisted men swear an oath to those who command them, officers swear an oath to the Constitution.
The Constitution that Bush reportedly describes as 'just a piece of paper' -- and about which Bush's Attorney General -- like Bush's Vice President and other pals -- are so dsimissive and desctructive.
Gen. Newbold writes to remind officers of their duty to the Constitution -- a well timed warning in light of the latest news that Bush and friends are actively planning an illegal, ill advised invasion of Iran, possibly with tactical nucleur weapons.
This oath by military officers to our Constitution is also a useful guide and example to those Truth Seeking Americans who seem to believe that the only good American is an American who swears a personal oath of fealty to George Bush. These folks have a penchant for militarism in their expression of loyalty. What better antidote than Gen. Newbold's wake up call: the highest and best duty of miliatry officers -- like citizens -- is to our Constitution. Not to another human being.
Posted by Doug Smith at 07:57 PM | PermalinkPendulums and Protectionism
Slate has a piece about the link between the Bush Administration's failure in Iraq and a Congressional rush to protectionism by Ian Bremmer, President of the Eurasia Group (a firm that advises about political risk in a globalizing world). Bremer suggests that as the presidency weakens under dialy reminders of it's mendacity and incompetence, politicians in both parties race to top one another in assuring potential 2006 voters of the politicians' bona fides in protecting the United States. National security widens from narrow questions of physical and human security to include economic security. Bremmer objects to this, suggesting that somehow the economy is off limits to questions of real security.
He overstates his case. Not about the theater that has become our national politics. Senators and Congressman (and their challengers) are being themselves -- their overheated, irrational, all-advertising-all-the-time selves as they take full advantage of events such as the Dubai Ports acquisition, the attempted purchase of Unocal by a Chinese oil company, and other cross-border transactions to proclaim "U.S. First" to voters.
Bremmer, however, too easily dismisses the economic aspects of national security as well as the paltry safegaurds of an incompetent administration -- perhaps because he makes a living as a political risk consultant and writes in Slate to establish his firm's own bona fides to attract as clients companies seeking cross-border transactions. He's too intelligent a person not to see that economic security is every bit as vital as physical security in our new world of markets, networks, organizations, friends and families. It's surely fair for him to advocate a globalizing economy. But he moves too fast in his Slate piece in making a mere assumption that every reader will easily and instantly agree with him, even in the absence of any explanation for his position. There are severe dislocations, for example, in the policy he claims is best -- dislocations that matter to a sense of security. Indeed, such dislocations are themselves sources of the 'political risk' about which Mr. Bremmer advises his clients.
Moreover, he merely assumes that processes and procedures currently at work sufficiently safeguard our national and economic security -- a laughable claim in light of the routine incompetence and ideological fervor of the Bush Administration. Mr. Bremmer might argue that the design of current approaches and reviews of cross-border transactions are sufficient. But he cannot accurately claim that the implementation of those designs are sufficient. They are not.
Look only to one fact in his piece. Many of the chest-beating congressional figures are taking aim at the approval process within the Committee on Foreign Investments in The United States -- Exhibit A for what Mr. Bremmer calls the 'greatest protectionist threat' currently in play. He then goes on to cite statistical evidence for the effectiveness of the CFIUS process: Only 1 time in 1600 has the Committee rejected a proposed cross-border transaction.
This is exactly the upside-down thinking Mr. Bremmer warns can happen when elected officials play politics with national and economic security. 1 in 1600 is Exhibit A for why the process OUGHT to be reviewed -- not the reverse. It is remarkable testimony to a process that has become routine and automatic instead of thoughtful. Indeed, the ridiculous lack of attention by this Committee and it members to the Dubai Ports deal signifies the flaccidity of automatic -- and thoughtless -- approval.
Is heavy Congressional involvement the best reform of this process? Perhaps not. But, Mr. Bremmer beats his own chest instead of posing a more reflective stance on how best to judge and review cross-border transactions in a globalizing world economy when he applauds instead of questions a process that has become all hat, no cattle.
Posted by Doug Smith at 12:36 PM | PermalinkApril 09, 2006
The Shared Idea Of Transparency
All values, including financial and economic value, reflect patterns of belief and behavior. Think, for example, about pricing. Yes, pricing derives from some balancing of costs incurred, competition and some sense of what the item in question is worth to those who might buy it. All three, though: cost, competition, worth to the customer --- mirror belief and behavior, both rational and irrational.
So, what makes for predictable patterns of belief and behavior? Some of this is found in our DNA. In addition, though, we learn or pattern our belief and behavior through how each of us individually respond to what happens in our relationships with others, the roles we play in our lives (e.g. employee or parent), and in the ideas we absorb and act on. My guess, for example, is that the other day when audience members booed a man who told President Bush he was ashamed of Bush and Bush's policies, those audience members responded through some mix of shared ideas having to do with respect for the office of president -- as well as the ideas that undoubtedly helped select them for audience participation -- that is, the ideas the Bush Administration has used for more than five years to ensure that the president only speaks to supporters so that the television images portray unified enthusiasm.
The shared idea of Truth -- with a capital T -- has done much damage the American body politic ever since the Republican Party embraced Truth Seekers in it's big tent. Like most aspects of contemporary Republicanism, this has gone from bad to worse during the Bush years. Bush himself is said to have the 'black vs. white' world view of many recovering alcoholics -- the predictable belief and behavior to cast all issues and questions and policy choices in stark contrasts. That, of course, fits the shared idea of Truth strongly held by Truth Seekers. And, it means that Truth Seekers will vote disproportionately for a Truth Seeking Republican Party.
It also means that folks angered or dispirited by the the dangerous and already incurred consequences of a government of Truth Seekers (e.g. preemptive wars, the Unitary Executive, Terry Schiavo.... the Rule of Truth instead of the Rule of Law) pattern their belief and behavior around being anti-Truth Seekers. The stark contrasts becomes us v. them. And so, our nation's culture wars slip into a Cold Civil War.
Finding our way out from this suicidal pattern will rest on many things, including luck. But one sure part of any sane path forward will be to drop the shared idea of Truth in favor of shared ideas of accuracy and transparency. Enough with whether every single thing said or done is the Truth. How about putting serious resources behind making sure folks know whether X or Y or Z is accurately described and are transparent.
Consider, say, the federal budget. Is it transparent? No. The full cost of the Bush wars are not included in the budget. Tens of billions are provided under additional appropriations. How about the number of troops and other personnel in Iraq? Not transparent. Tens of thousands of defense contractors have folks in Iraq. They are not counted. Neither of these are about the Truth. As Joe Friday said on Dragnet: "Just the facts, maam."
How about executive compensation? Is it transparent? No. How about net pension liabilities? No. How about unemployment figures? No. How about poverty? No. How about the information we need to judge the future of Social Security? No. Do we get to see and read legislation in any kind of remotely reasonable time frame before it is voted on by legislative bodies? No.
Do our elected representatives even get to see such legislation? No. It is now standard practice for the ruling party to schedule votes past midnight while actually making the legislation -- often hundreds, even thousand of pages -- available for perusal only hours before the vote. This, for example, was what happened with the disastrous prescription drug law.
Speaking of which. Were the projected costs of that law accurate or transparent? No. And the Bush official who hoped to fix that got fired.
Why? Why the lack of dedication to accuracy and transparency?
Because our popular culture has a much stronger, more predictable set of beliefs and behaviors dedicated to the shared idea of Truth and Truth Seeking.
And, it is destroying us.
Posted by Doug Smith at 12:33 PM | PermalinkApril 05, 2006
Katrina Update
I just received the quarterly newsletter from an outstanding affordable housing organization in Portland, Oregon called REACH. The Executive Director's opening commentary included this quote from NBC TV anchor Brian Williams, made shortly after Katrina:
"If this disaster doesn't lead us into a national conversation on the subjects of class, race, urban planning, the environment .... then we have failed."
Katrina, like September 11th, created what philosopher Avishai Margalit calls a 'flashbulb memory" -- blinding light snapped inescapably right in front of our eyes. But memories -- even flashbulb memories -- are not conversations. They are images that, to become conversations, must connect to sustained focus, dialogue, action, and results. To an iterated effort that seeks both insight and change.
Recently, my daughter, like thousands of other students, went to the 9th Ward for spring break. The images -- and words -- she brought back portrayed a part of New Orleans every bit as devastated as it was a few days after Katrina hit. Put differently, the disaster remains as static and constant as it was when the flashbulb went off 7 months ago.
National conversation? No. Millions of us have conversed about Katrina in some reasonably sustained ways. Thousands struggle to do something in response. But there has not been any sustained national conversation replete with focus, dialogue, action and results. For that to happen, we would need 'convesation leaders' who have power and access to keep the focus and effort front and center. People like Brian Williams -- and, of course, those who hold public offices.
Like September 11th, we're mostly left with the flashbulb blinding our eyes.
Posted by Doug Smith at 03:17 PM | PermalinkApril 04, 2006
Blended Values Strategies in Food
Shareholder value fundamentalists maintain that a maniacal focus on profits is and should be the central focus of all private sector enterprise. Their credo trumps all questions of family, social, political, environmental, technological, medical, legal and other issues of values with the single question: will it promote or detract from financial/economic value?
Theirs is a fundamentalism every bit as destructive of the planet as any religious or other form of 'single answer' ideology.
Not only does this extremisim hollow out and threaten the sustainability of humane society, it also inevitably undercuts shareholder value itself. Only blended values strategies can save shareholder value from these extremists -- whose ideology, unfortunately, pervades executive suites and boardrooms across the globe.
The absurdity of shareholder value fundamentalism is well captured in this item from the BBC. Here's the sub-headline: "Many of the world's 25 biggest food firms only pay lip service to their duty to help fight the global diet crisis, a report on the issue says."
Obesity and other eating disorders are at crisis proportions in many areas and among many groups. Ought food companies care about the health of customers? All of us -- and them -- would quickly agree that food companies ought not put poison in their product. But in our shareholder value fundamentalist culture, the only thing food companies ought not do is 'break a law' (and, it's fair to report that even then, the too often ruling ethic is 'don't get caught breaking a law'). Anything goes so long as it adds to the bottom line.
All private sector enterprises must have a positive bottom line. All private sector enterprises MUST generate returns for those who provide capital. Shareholder value is essential. But shareholder value fundamentalism is a sociopathic ideology that ought not be confused with the necessary idea that return on capital provided is critical.
Laws prohibit poison in food. But only ethics embraced by executives and employees of food companies -- that are strong, predictable shared values about 'how we do things around here' -- can ever turn around this situation where major food companies endanger the health of us and our children through 'poison by other means'.
If you work at a food company -- or if you know anyone who does -- ask yourself or them, "Is this what you stand for? Selling food that is unhealthy? Are those the predictable beliefs and behaviors -- shared values -- that you want your children to remember you stood for?"
Posted by Doug Smith at 02:15 PM | PermalinkApril 02, 2006
Business Credulity
Chauncey Gardiner, better known as Chance, in Jerzi Kosinski's contemporary classic Being There, is a man whose entire experience prior to the events of the book exist within a strange, late 20th century American Eden: gardening on the estate of his adoptive father and watching TV. Chance has not tasted the fruits of knowledge, forbidden or otherwise. Yet, when those from beyond the estate discover Chance, they come to see his simple adages as the essence of wisdom and brilliance. The book, among other things, is a study in credulity: of the readiness to believe in what Chance says notwithstanding a total absence of evidence or logic.
My favorite piece of Chance's wisdom is: First comes Fall. Then Winter. Then comes the Spring. Then Summer.
I was reminded of this truism yesterday when I chanced upon the latest wisdom from Ram Charan in Strategy + Business, a magazine produced by Booz Allen Hamilton, Inc. Here's the teaser from the table of contents:
Sharpening Your Business Acumen By Ram Charan
How do executives at leading companies like Thomson Corporation, GE, Apple, and Verizon anticipate external trends and craft their strategies accordingly? They follow a six-step thinking process...
Allow Chauncey Gardiner to increase your business acumen in only three steps:
1. Seasons change.
2. Plants must change.
3. Gardeners must change too.
Translation: The world changes a lot. So must our businesses as well as our competitors. Thus, those who run businesses must see these changes and act on them if they are to have business acumen.
Business acumen?
Or, credulity of business people?
