Monthly Archives: March 2014

Faux Privatization of Government Services

Pike Place Market, Seattle

Pike Place Market, Seattle

“Privatization” of government programs has been going on for a long time; it has accelerated in the last decade. The main (real) purpose of “privatizing” government programs is to:  (a) Remove the employees (the “full time equivalents,” or FTEs) from the government payroll, so the government looks smaller; (b)  Save government the costs of pensions, workers compensation, unemployment insurance, and other benefits; and (c)  Enable politicians to argue that more of the total economy is in private hands; and there are now more “real jobs” in the economy than before.

In most forms of “privatization,” the government is still paying a contractor to provide the services. The program cost remains in the government budget, but it’s hard to find in the 1000 page budget document.  Look under “vendors,” “contracting,” “consulting,” in the back of the budget. Good luck in finding it.

Often, the contractor is not unionized, so the government pays less for the workers’ services. Yes, sometimes the program is run more efficiently by the private contractor. Many times it is not.  In many cases, the workers laid off by “privatization” are immediately hired by the contractor (though at lower wages and with less benefits).  That is often part of a deal between the government and the public sector union, which is willing to make the deal to cut its losses, and help the workers stay employed.

The Page Seven buried story which prompted this blog post is a Wall Street Journal article about Detroit seeking proposals from private companies to run and potentially buy its regional water and sewer system. In this case, the sale of assets along with the shift in operations, to a private entity, helps Detroit pay off some of its debt.

At the federal level, the poster child for privatization is the Blackwater Corporation,  which has provided training, security, transport, and logistic services to the U.S. military, most notably in the Middle East.  Nearly all of the jobs (the exact number is undisclosed for “security reasons”) are ones which have been performed by soldiers or civilian Defense Department employees in the past.  Whatever the other benefits of massive contracting with Blackwater,  having the company do the work makes our armed services look smaller.  (That isn’t all good).  It probably also makes it easier to recruit, because Blackwater’s standards for employment are not as stringent for many jobs as those of the U.S. Armed Services.

The type of “privatization” I’ve talked about thus far is not at all what economists and free market capitalists intend when they argue that more economic decisions need to be shifted back to the private sector.  This argument is at the core of classic, capitalist economic theory, which says that in the long run businesses and individuals make better spending decisions than government; and that the economy is more efficient when demand is generated privately. (I buy a lot of that, but with caveats).

What would real privatization look like?  Lets imagine that welfare grants and services to poor people shifted to the private sector. There would, of course, have to be a profit in it for entrepreneurs.  And (poor) customers would have to find a way pay for it. That seems oxymoronic, but one could envision an arrangement like this:

A private firm calling itself  “Investments in Human Capital” (ugh!), advertises that it is willing to house, feed and provide other basic daily living assistance to a single parent household (in housing maintained by the business), and pay for childcare while mom is in training (with tuition paid by the business).  The child is enrolled in a local charter school (which is presumed to be better and safer than the public school).  The family is assigned an account executive (a.k.a,,  social worker) to help with bumps in the road.

Ten to fifteen years down this bumpy road (sooner in the case of the mother), when everyone in the family is employed in a good job, the company receives 15% of the family wages, forever, or at least until each person reaches AARP age.

This is of course a very risky and tricky business, but if the company does effective profiling at the front end (using Money Ball type data mining),  they can perhaps make money down the road.  Many customers would find this attractive compared with their current, hopeless situation under Aid to Families with Dependent Children (AFDC), even if it meant some form of indentured servitude.

Lots of people currently receiving “welfare” would not be served; so some form of government welfare would still be required.  It’s not likely any entrepreneur would give this a try; but the thought experiment illustrates what true privatization means, and why certain services can’t (realistically) be provided by the market. (Perhaps there is some future for this type of arrangement using internet crowd funding, aided by the Money Ball guys and gals, and Adam Silver.  Jerry Springer or Donald Trump could host some sort of reality TV show to help out).

A more realistic example of genuine privatization, one of the few with actual, working, models, involves the government “employment service.”  All states have an Employment (or Unemployment) Office, where people who have lost jobs register for unemployment insurance benefits. Those offices typically also provide a job search and placement services.

The government run “job service” could, in theory, be terminated, and shifted to the private sector, without government paying anything for it.  Some of the unemployed people would go to a private employment “agency” like Kelly Services, Labor Ready, or Manpower Associates, especially if receipt of the state’s unemployment checks hinged on proof the worker is registered with one of the companies. That privatization arrangement has in fact happened in some states, with mixed results. Debates over the wisdom and efficacy of privatizing the employment service have raged for at least forty years.

The private employment agency, as we know, is paid, not by the government, but by the employer and the worker who, when placed, surrenders a portion of his salary to the agency for a period of time. (Not for as many years as the people in my imaginary private welfare system). This comes close to real privatization, even though many unemployed people are not served well (if at all) by the private agencies. Many others may get better service than the government provided.

There are also prominent examples in this field that are clearly faux privatization, like state governments paying a Snelling and Snelling type business to find jobs for clients.  The program is still in the government’s budget, though buried.  And the Governor can claim he cut FTEs in his reelection campaign commercials.

The arrangement being sought in the Detroit story, which prompted this article, appears to be a mixture of fauz and real privatization. Its gets FTEs off the books and enables the politicians – in this case, the Michigan Governor and emergency Czar appointed to run Detroit — to boast that the City works better with less government.  Maybe it does. In this case, the government is also selling capital assets to help pay down its debt; and recipients of the water and sewer service would pay some of the bills to the company.

In a decade or two, Detroit will be in better shape, with or without faux privatization. We will never really find out if the “private” approach worked better, because by then all of the scientific evaluation programs designed to study whether or not government programs work well, will have been eliminated.  Most have already been dumped to save money, because the ideologues don’t read or believe the studies anyway, especially if they conclude the government program has worked well.

Like a friend of mine working for the old Comprehensive Employment and Training Act (CETA) program said when I called him at home one evening in the late 1970s:  “I can’t talk now because I have to finish the CETA evaluation study before next week, when the program terminates.”  That’s a true story.

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What the Number Geeks Would Say About Duke and Mercer

Photo By Norm Olson, copyright 2013

Photo By Norm Olson, copyright 2013

Don’t think too deeply about why Mercer beat Duke. They were close enough in talent for a Mercer win to be as probable as catching a cold on a coast to coast flight, which isn’t likely, but hardly improbable. End of discussion, the stat geeks would say. Move on.

Today’s article doesn’t try to unearth a story buried on Page Seven, rather it provides a minority viewpoint on Duke’s elimination by “lowly” Mercer. The perspective is of a statistician, or numbers geek. On the heels of Money Ball and Adam Silver’s bravura performance during the 2012 elections, that viewpoint intrigues many people.

Suppose Mercer and Duke played in a 10 team conference, with all teams of top,  25 coaches’ poll caliber, each playing exactly the same 27 game schedule. They play every other team 9 times.  Suppose, further, that Duke had a .700 season record in that league, and Mercer, .500. That’s my wild, but,  I think,  plausible, guess of how much better Duke is than Mercer, if they played identical schedules in a good league. That’s clearly a supposition, but I need this device to help me provide a few observations. The basic math behind this can be found in any good stat 101 course, and here in a watered down, but accessible, discussion.

Under this scenario, the stat geeks would tell us that Duke has about a 70% chance of winning any particular game against Mercer, on a neutral court. That may sound high, but it also means that if Duke and Mercer played 9 times in this imaginary conference, you would expect Mercer to win three of the games. Those are really not bad odds for Mercer. So, Mercer’s win – if you accept my .700 versus .500 premise — doesn’t mean Mercer is better than Duke. It merely means that the March 21st game was one of those three occasions out of nine that Mercer would be expected to win.  End of discussion.  Move on. Good thing for ESPN that it doesn’t hire stat geeks to do the color analysis.

This is of course little consolation to Coach K or the Duke players; and even less solace for the alumni and boosters. The next time Coach K talks with the University President, we can be sure he won’t use the stat geek argument as an alibi. But it’s still a good explanation.

Ten or twenty years ago, the difference between Duke and a Mercer-like school in the tournament would have been more like .800 versus .300. That, according to the stat geeks, would translate roughly into more than a 90% chance of Duke winning any particular game; or Mercer winning one game, at most, out of 9, against Duke. Yes, a decade or two ago, it would have been very unlikely for a Mercer to win a game against the Blue Devils.

What has changed? Some in Duke nation are thinking Coach K has a lost a step or two, or become a bit (sub consciously) complacent. It’s called losing the edge; not being hungry enough anymore. Maybe his half time exhortations have lost some zip; or his attention to fine detail has withered. It doesn’t take much to move the needle by a lot in the fast lane.

The stat geek would look at this differently. It all has to do with the gap between Duke and Mercer closing from (perhaps) .800/.300 to .700/.500. This hasn’t happened because Coach K is a worse recruiter or has lost a few IQ points. A lot of the change has, of course, to do with the “one and done” trend in college basketball, with the top teams losing players to the NBA after one or two seasons. This affects Duke much more than Mercer.

Less obvious is the impact of the major media coverage that a Mercer and its players receives today, compared with ten or twenty years ago; from multiple ESPN channels and radio sports talk shows, to a raft of blogs that scout and rate players from every top 100 school. There is an amazing amount of detail that’s easily found on just about any player or team in the country.

In the past, a high school kid with offers from Duke or UCLA wouldn’t give a thought to a small, niche program, even if it meant riding the bench at Duke for a few years. If the kid was worried about getting lost in a large pond, he’d at least wind up at a Marquette; small, yes, but an established basketball school that’s been respected for a long time. Today the opportunities for attention are vast. The kid, and his parents, with NBA dreams would look seriously at Mercer, Butler, Gonzaga, George Mason, and others, knowing he will be show up on the NBA’s radar screen.

What about the fate of Coach K? The college basketball bloggers all say Duke’s latest recruiting class is first class. The program is in fine shape, as far as we can tell. Coach K has a lot of integrity, so I would not be the least bit surprised if he raised the possibility with the College President of moving on (Coach K, that is, not the Prez). I can’t imagine the President raising it.

I know a few ardent and knowledgeable Duke fans who argue the team was not well prepared for Mercer and that Coach K was unimaginative and lackadaisical. So, if Coach K offers to move on, the Prez could bite, if he’s heard enough (sacrilegious) barbs about the Coach from influential boosters.  As a stat geek, I am putting a probability around that of about 10 or 15 percent. That’s low, but not negligible. Then, what happens to Coach K? Maybe Phil Jackson, the new New York Knicks GM, goes for a different “K” than predicted – Krzyzewski instead of Kerr. Not very likely, but fun to think about. It would give fans and writers enough material to keep themselves busy and amused during the five years it takes to turn things around in New York.

Massive Climate Control Contraptions (MCCC) and Other Fantastical Means to Fight Global Warming

A Tesla Climate Control Device?

A Tesla Climate Control Device?

Today’s article was inspired by an obscure story, which heralded renewed efforts to attack global warming and head off predicted climate disaster with fantastical technologies.  You can see the story here,

Variously called Geo-Engineering or Climate Engineering (by believers) and referenced as massive climate control contraptions (MCCC) by skeptics (and ridiculers), this approach is now being taken seriously in some (serious) quarters, as more incremental solutions appear dead in the ozone layer.

I will, heretofore, refer to big, out of the box — way out — thinking about global warming using the whimsical “MCCC.”   Some examples of MCCC include:  ships that spew salt into the air to block sunlight; satellites designed to bounce solar rays back into space; and massive “reverse” power plants that would suck carbon from the atmosphere.  This barely scratches the surface.

These are but a few of the ideas the National Academy of Sciences has asked a panel of some of the nation’s top climate scientists to investigate. Several agencies requested the inquiry, including the CIA.   It’s hard to get much more “establishment” than that.

It’s apparent that many supporters of more practical initiatives to attack global warming, recognize their ideas have hit a brick wall.  Hail Mary passes, the grand slam homer, and buzzer beating three pointer several feet behind the arc, are taken more seriously now, perhaps by default.

Around 2008, just at about the time the U.S. and the world economy were in free fall, many U.S. states were pushing ahead with measures, long in the works, to reduce carbon emissions. These included regulatory and tax policies, and more practical, proven, smaller scale technologies,  from energy saving appliances to better coal plant scrubbers.  Bad timing!  Cap and trade,  high carbon taxes and many other measures to combat global warming, were a tough sell to begin with.  They faced impossible hurdles with an economy in free fall and double digit unemployment. Even with partial economic recovery, these efforts remain stalled.

Six years ago might have been the perfect time to ramp up efforts to attack global warming with MCCC.   The stimulus package passed by Congress included some research and development and risky capital investments to fight climate change.  These projects were not quite in the MCCC category, but they were still controversial.  Traditional stimulus spending in a recession has been on more basic projects, like public infrastructure, less policy driven, and less risky.  Although stimulus spending on clean energy did bear some fruit (and actually created some jobs), all the mainstream media seem to recall is the Solyndra “scandal.”  Check out the controversy over the 60 Minutes segment (or hit piece?)  on “massive private and public sector failures” to promote big technology solutions to global warming.  Both the failures and successes are discussed here. The 60 Minutes segment specialized in the failure side of things.  

Indeed, it would seem that big technology, even MCCC, would have been in play much sooner, even before incrementalism hit a wall when the Great Recession came along.    Cap and trade, high carbon taxes,and (even) gradual reduction of carbon emissions have so many moving parts, require so much economic dislocation, sacrifice, and behavioral change, they were destined to stall.  You would think MCCC might have been a serious international strategy from the beginning; or at least pursued on a parallel track.   But it wasn’t. Why not?

Some reasons are obvious. MCCC is very risky, not just because it’s fantastical. If we invent a  machine that can suck up most of the world’s green house gases in a few gulps, it can also have catastrophic, unintended consequences for the climate.  Tesla’s electrical experiments in downtown Manhattan are nothing compared to out of control MCCC.  MCCC also requires massive spending by government, big time venture capitalists-philanthropists (Gates, Buffet et. al), or both.  

Among the less obvious reasons for spurning MCCC, but perhaps more importantly, advocates of cap and trade, high carbon taxes, and gradual reduction of carbon emissions thought, and still believe, that (false?) hopes about MCCC would make it even more difficult to gain support for their  more practical, but immediate, measures.  The hope of MCCC is a perfect excuse to avoid tough measures NOW, while we pray and wait for the miracle.   If the fantastical technologies fail, we’d have nothing.  Better to mock MCCC.   Here is an example of some fierce opposition, on those grounds, to MCCC. 

Keep an eye on the workings of the National Academy of Sciences panel.  Unless you live in California or under a few other die hard governments that haven’t given up, this may be the only game in town.   If this scares you, here is another fantastical, but low tech, approach to save the planet, which may help you sleep better, or help you to sleep through it all.

Dick Clark, American Bandstand, and News in America Today

Re-post to correct error.

Page Seven

SONY DSCHow do we decide what information is provided to the American public,  to help us be successful citizens?  We use the American Bandstand approach.  Whichever “news” agency gets the most applause from (the equivalent) of shrieking, hormone driven teenagers, like on American Bandstand, gets to “inform” the American public.  What a system!

This is the second post (see first here) in Page Seven addressing issues around free speech and the defunct (and quaint) Fairness Doctrine.  This is also the second piece (see the first one here)  to diagnose the gut wrenching schisms of our day and the role that bad information plays in fostering polarization.

In the previous article, I talked about the repeal of the Fairness Doctrine and imagined what a day of radio might have sounded like way back in 1962, during the Cuban Missile Crisis.   This exercise (perhaps also quaint) was prompted by Russia’s annexation of…

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Dick Clark, American Bandstand, and News in America Today

SONY DSCHow do we decide what information is provided to the American public,  to help us be successful citizens?  We use the American Bandstand approach.  Whichever “news” agency gets the most applause from (the equivalent) of shrieking, hormone driven teenagers, like on American Bandstand, gets to “inform” the American public.  What a system!

This is the second post (see first here) in Page Seven addressing issues around free speech and the defunct (and quaint) Fairness Doctrine.  This is also the second piece (see the first one here)  to diagnose the gut wrenching schisms of our day and the role that bad information plays in fostering polarization.

In the previous article, I talked about the repeal of the Fairness Doctrine and imagined what a day of radio might have sounded like way back in 1962, during the Cuban Missile Crisis.   This exercise (perhaps also quaint) was prompted by Russia’s annexation of the Crimea, which hasn’t yet escalated to a full blown U.S-Russian conflict, but could still get there.

We are so inured to “news” agencies or bloggers talking like propagandists, that we’re hardly shocked anymore by what Limbaugh says about Obama and the Ukraine or what Malloy said about Bush and his foreign policy. I thought putting similar words in the mouths of legendary New York broadcasters over the course of a fictitious broadcast day, would reveal just how preposterous today’s language is about matters of great importance.   In his vituperative, verbally violent language, Mike Malloy, though hardly known, is the Left’s counterpart to Rush Limbaugh.  Not Sharpton, or Maddow, or even Schultz.  But Malloy.  He’s still around, but hard to find after the Air America network failed.  It’s instructive that the practically unknown Malloy, is Limbaugh’s counterpart on the Left. Limbaugh is more entertaining.

The Fairness Doctrine was announced in 1949 by the Federal Communications Commission (FCC) to try to ensure that broadcast licensees, who provided programming on a finite public airways spectrum, use some of the time to address issues of “public importance;” and to guarantee that most sides of important public issues were given roughly balanced attention. It’s a myth that “equal time” was required for all sides.  That provision applied only to candidates for public office.  As best I can tell, the FCC didn’t micromanage or bully the radio stations; but private, aggrieved parties often sued to get air time, which had a chilling effect on all substantive or controversial programming.

The Doctrine operated during an era when many critics, left and right, considered the public airways to be a “vast wasteland” of “inane, trivial” (those were some of the words commonly used) programming fare; and well before cable and the internet opened vast opportunities for all kinds of interests to (at least in theory) have their views aired.

The Doctrine was effectively repealed in 1987 and formally in 2011. The repeal was initiated by conservative Republicans in the Reagan era; but picked up bi-partisan support as the years passed.  In 2011, President Obama said he would not support efforts by some Democrats in Congress to restore a form of the Doctrine.

Republicans have fiercely resisted even the slightest effort to re-regulate the airways, arguing that such initiatives were designed to silence conservative talk radio and restrain conservative speech.   You bet they were. Democrats weren’t hiding that motive.   Those efforts were, and still are – explicitly and unabashedly – aimed at curtailing right wing talk radio, because that viewpoint now dominates the airways.  Liberals want to replace much of it with more of their own viewpoints. Centrists or “good government” folks want more “balanced”  “serious,” “fact-based” news programming to replace opinion and “propaganda.”

Republicans think the public broadcast airways should receive exactly the same first amendment, free speech treatment as print news. They believe the market should determine what people can hear on the radio.  They’re not bothered by the dominance of right wing talk; to them, its just a reflection of listener tastes. That’s probably true.  The question is whether something can or ought to be done about it.  And whether the solution would be worse than the problem.

Even though the public is still roughly split down the middle philosophically, programs promoting liberals/progressive views have been far less effective and profitable than Republicans and conservative talk radio.   It’s not even close.  The explanation given for the vast gap goes something like this: There are more conservatives than liberals who are intense and angry about issues, and the general state affairs in the country.   Conservatives also feel their views were suppressed for many decades; and that the mainstream press has an inherent liberal bias.  (See Buckley’s “God and Man at Yale” and Agnew’s “nattering nabobs of negativism”).  Thus many more conservatives than liberals are motivated to tune into, and support, talk radio.

Liberals argue that the intensity or quantity of “buyers” should not determine what the public is able to hear across the broadcast spectrum.  What should conservative consumers decide what all of us should hear?  Conservatives counter that, with the advent of cable and internet, there is no need to police the public airways to achieve “balance” or for government to enforce any particular standard or brand of news and  information.  Yes, you can turn the dial, but in so many markets there are no alternatives anymore; or they’re weak signals are crowded out by the more powerful conservative stations.

It is useful here to mention that conservatives find it easy to justify the dominance of talk radio and the unabashed (I think shameless) political agenda of Fox News  on grounds that the mainstream media (they believe) is, and always has been, biased toward liberal views.  More generally, they believe there is a cultural bias, based on training and inbreeding, among professional journalists from all media.   “intellectuals” become journalists, or get that way via training; and we all know how liberal intellectuals are!

There is some truth to this.  The question is: Is mainstream, establishment news which, for the most part, at least strives for balance, more harmful than “news” which is openly and proudly biased; and barely strivers for balance?   The Right believes mainstream news is more insidious than it’s in-your-face approach, because listeners didn’t know (for decades) they were being (subtly) “brainwashed.”   I understand this argument, but reject the notion that the antidote which has (for now) killed real news in America is the right answer.   And the antidote sparked reactions on the other side, so that most Americans receive the bulk of their information on important issues from propagandists.

I see the core issue here having more to do with the quality and integrity of information needed by the public and politicians in a democracy to make good decisions, rather than the principle of “free speech.”   That already puts me more on the liberal side – i.e. being concerned about both process and outcomes, rather than just process.  Here, “free speech” is the process; the quality and integrity of information is the outcome.

I don’t really know a way out.  Perhaps Google or some precocious, teenage new media entrepreneur (later to be bought out by Google)  will find a way to provide real information in a manner that also entertains.   That’s been tried by old media — “USA Today” and some CNN reforms, for example.

Efforts to strengthen laws against concentration of media ownership may help, but how soon will these be killed by pulling them under the Citizens United doctrine?  More public broadcasting could be helpful, but that won’t ensure listenership; and the political alignment in Washington won’t, any time soon,  allow that.  Conservatives here and abroad brand the BBC as left wing.

pt def 083I bet you’ve been wondering about the title of this blog post?   Here is where Dick Clark and American Bandstand comes into play:

Recall Dick Clark’s American Bandstand? The show featured teenagers dancing to Top 40 music introduced by Clark.  At least one popular musical act would appear in person to lip-sync one of their latest singles. At some point in each show, Clark would turn to his teenage, hormone driven, audience and ask them to rate a performer or a new record, with their applause and screams?   I can’t recall whether Clark had a real decibel meter or numerical rating system.   But, the choice was made based on a method similar to deciding which brand of toothpaste or deodorant to buy.

In the absence of the Fairness Doctrine, or anything reasonable to replace it, that’s how we now basically decide who gets to provide the information and news American citizens and politicians use to make profound and far reaching decisions.   What people hear on the public airways today is more than ever determined by the American Bandstand approach; only here, the hormones are aided by who has the most money.

The Cuban Missile Crisis Without the Fairness Doctrine?

dbl pk sun set455a copy

Broadcast Airways

The story which prompted this article was buried.   It deserves a lot more attention, but not just because it’s about a challenge by Newsmax Media to Fox News’ supremacy in conservative broadcasting. And not even because the challenge is coming from another source that’s conservative, albeit “center-right”, more moderate, as Newsmax CEO Chris Ruddy, characterizes himself.  http://www.businessweek.com/articles/2014-03-06/newsmaxs-chris-ruddy-preps-tv-network-to-rival-fox-news.

The story deserves more attention because of its reminders.  It had an odd effect on me, exemplifying the shambles and sad state of affairs of current “news,” information, and public discourse in our democracy (or republic, won’t quibble over that).  Combined with the Russian-Ukraine crisis, it prompted me to ask: “What would a broadcast day have sounded like in 1962 during the Cuban Missile Crisis, if we didn’t have the Fairness Doctrine back then?   For those who may not recall, the Fairness Doctrine, enforced by the Federal Communications Commission (FCC),  coaxed broadcast licensees to provide programming that was fair, honest, and equitable.  A quaint idea.

Devising an imagined script for 1962 without the Fairness Doctrine was enlightening.  Even if you weren’t around in 1962, which is quite likely, you’ll get the point; or you”ll think, “Gee, too bad they really didn’t talk that way back then.”

Lets imagine what a day of programming might have been like on a New York City,  50 megawatt radio station in 1962,  had it sounded anything like what we have today.  The names of the broadcasters will be familiar to a few, but the scripts I provide are mostly fictional. The words I put in their mouths may sound preposterous, because, especially if you know those gentlemen,  they are preposterous.   That’s the whole point.

The broadcasters I’m using for this exercise would never have spoken this way, not because they’re liberals  — in fact, Godfrey, Nebel, and definitely Bob Grant, were thought to be conservative politically and culturally.  Only Grant openly revealed that at the time.   They wouldn’t have talked this way, because we had a Fairness Doctrine.  Also, because we weren’t nearly as polarized then.   But lacking anything like a Fairness Doctrine has contributed mightily to polarization.

Am also going to take poetic license with time frames – not all of these broadcasters would have been there at the same time in 1962.  Give me a break.  Thank you.

So, we turn on the radio at 6:00 am in the morning in N.Y. in Fall 1962,  just as the Cuban Missile Crisis was coming to our attention.  It starts with Imus in the Morning.  Imus, still amused, and probably aroused,  by the clip of Marilyn Monroe’s breathy “happy birthday Mr. President” song to a blushing JFK,  jokes about rumors of private meetings between “the Prez”  and the Hollywood sex symbol.  Imus, though libertine in his own life,  is appalled (shedding crocodile tears) that the Prez doesn’t respect the dignity of his office.  “Even Imus is appalled,” he says. “How do you like that Mr. Prez!!”

Later in the morning, Arthur Godfrey, in between Julius LaRossa ballads, laments on the inexperience and naivete of the young John Kennedy.  How “dumb was it,”  says Godfrey (an expert geo-politician)  “for JFK to meet with Khrushchev in Vienna?”  “And how humiliating for an American President to be dressed down by a Russian leader; we’ve never seen this before.”  Well, maybe FDR at Yalta?”  Godfrey moves on to a Jello commercial,  and the daily quiz,  where a case of the powdered version is awarded to the winner.

Now, we’re into mid afternoon, and Bob Grant.  Grant was, arguably, the first radio talk show host to proudly proclaim his political and partisan affiliations.   He really cuts loose.  (He might have actually said this). With news of Russian ships, probably with more missiles on board, steaming toward Cuba, Grant reminds his listeners how all of this is Kennedy’s fault.  “going back to his feckless handling of the Bay of Pigs affair.”  Grant jokingly reiterates Godfrey’s taunts involving Marilyn and the Vienna Summit.  Grant knows some history, so he reminds his audience that “the President’s father, Joe Sr., was booted out of his ambassadorship to the Court of St. James, because he was a Nazi appeaser; and the son is cut from the same cloth.”    Oh yes, and what about the First Lady’s French ancestry and the way the French people embraced the couple on their trip to Paris the year before. “What do you expect,”  Grant asks, ,  “from a President who hangs out with these kind people?”

Now we’re into late afternoon, early evening drive time radio, with sports guru extraordinaire, Bill Mazur.  Bill was the first sports talk jock to truly master the details, history, and intricacies of every sport imaginable, including curling, and even the one where the guy shoots at targets with a bow and arrow, while drifting across the landscape on cross country skis.

In any event, even Mazur finds a little opening to slam the President. Talking about the upcoming Army-Navy game, Mazur says “well, we hope our President doesn’t show the same disrespect for the Army that he did last year, when he didn’t salute General Wheeler at half time.”  Sigh!  Sigh!  “Ike would never have flubbed that one.”

Around 9:00 pm,  Mazur hands the baton off to Long John Nebel, the founder of late-night radio, flying saucer, para normal, conspiracy theory conversation. Perfect for those stormy nights, under the covers, with thunder and lightening in the background.  But before Long John takes over, he invites Jean Shepherd,  the witty, engaging, story-telling, raconteur from Hammond, Indiana, to warm us up with a story from the heartland.  Sheperd was the original Garrison Keillor.

After telling a wonderful tale about Thanksgiving dinner in Hammond in 1932,  Shep can’t help himself.  He says something about how “Thanksgiving isn’t celebrated anymore in the nation’s capitol with the same warmth, heartfelt thanks,  and sincere appreciation for our freedom, prosperity, and way of life.”  Well,”  he says, with a well-timed sigh, “our President is not from the Heartland; he doesn’t get it.”

Back to Long John Nebel.

Long John hosted many guests with stories that “you won’t hear anywhere else,” from legitimate professors, not from elite universities, but legit nonetheless, to outright kooks and nut jobs.

On this night, he hosts a guy who says he served with John F. Kennedy on PT-109 in World War II.  The guy has written a book, albeit “self published,” which describes the young Lieutenant Kennedy’s dithering and indecisiveness as his boat came under attack; how he sat there paralyzed, with his mates having to shake him into action.   He, says, “well yeah, Kennedy did put himself in danger trying to save his shipmates, but none of this would have happened if Kennedy had been decisive in the first place.  He doesn’t deserve his war medals.  It’s shameful that we have a commander in chief who couldn’t even command a small boat.”  Nebel commiserates with the author, emotes a sigh, and reminds listeners that the only way we can change this is to elect a Republican in 1964.

Think this sounds silly and absurd?   It does.  Unimaginable that a 50 megawatt N.Y. station could fill the airways this way, all day long, into the night, day after day?   Welcome to America 2014.  And a lot of us are proud that we made that happen with our foresighted repeal of the Fairness Doctrine.

I of course fully realize that many folks think the Fairness Doctrine was a tool for liberals to prevent conservative  views from being aired.  That is a criticism more than worth addressing.  It was, sort of, the thesis of Buckley’s “God and Man at Yale.”  So, I will continue this discussion in the next couple of days.  In the mean time think about “what’s wrong with the picture” I painted for 1962,  and with today’s picture.  I realize a lot of folks will say: “YES!, that’s exactly what Godfrey, Grant and those radio guys should have been saying in 1962. We’d be better off today if they had.”   More later.

The Minimum Wage: Tipping Points and Slippery Slopes

Slippery Slopes, Hurricane Ridge

Slippery Slopes, Hurricane Ridge

If you look closely at the gut wrenching divisions of our time, most of them can be expressed as differences over “Tipping Points” and fears about “Slippery Slopes.”  The Mandated Minimum Wage (MMW) is just one example.

Being conscious of these sub texts can help bridge some of the differences, at least among the few remaining policy makers who can still be persuaded by good data (relative to tipping points);  or by good faith efforts to address fears over slippery slopes.

Pick just about any of the chasms in politics, or differences over economics, today, and you can see how they fit into the Tipping Points and Slippery Slopes framework. Debates about taxes and regulations boil down to differences about how much we can tax and regulate before entrepreneurs stop investing.  Just about everyone agrees such a Tipping Point exists, but differences are great as to where it lies on the continuum.

Disagreement about the welfare state or size of government is more in the Slippery Slope category.   The more benefits or “goodies” handed out  — as proponents of small and limited government like to call it —   the more people will want and demand.    And the more we want and receive, the closer we get to unsustainable spending and lack of personal responsibility, or so the argument goes.   Income inequality is yet another tipping point issue.  How much of it can be tolerated  before the overall economy suffers, or before a political system is destabilized?

Sovereign debt is mostly a Tipping Point issue, but with a Slippery Slope overtone.   At some point, debt gets so large, servicing it crowds out other essential spending. Lenders exact usurious interest, so that borrowing more is all but impossible. The result is Greece.  Again, everyone agrees there is a Tipping Point, but not about where it lies.

Climate change is of course the poster child for Tipping Points.  That is where the concept is explicitly at the center of debate, and where its been popularized of late. 

One way to think about the nature of gridlock and polarization today is that one side believes we’re already at  various Tipping Points, while the other thinks we’ve got a ways to go.  And, both sides seem to believe every policy change offered by the other. is on the very edge of a Slippery Slope, leading to an abyss, and a point of no return.  

The Mandated Minimum Wage (MMW) is also a classic example of differences around Tipping Points and Slippery Slopes.  The basic tipping point question for MMW is: “how high does the minimum wage have to rise before it truly or materially reduces employment and slows economic growth?”  The basic Slippery Slope concern around MMW is:   “If you raise the minimum wage today by a certain percent, or have it apply just to certain industries or types of work, what stops politicians from doing it again and again, in larger steps, and wider in scope? 

What is the value of thinking about the MMW, or other contentious policies, from the Tipping Point and Slippery Slope standpoints?

For the remaining 39 people in America who can still be persuaded by facts and data, the Tipping Point perspective provides some common ground; or perhaps an ice-breaker in conversation.  You can usually get even the fiercest opponents to agree that a Tipping Point exists (though not exactly where).  Nonetheless, it can be reassuring that even your (“crazy”) opponent  knows there are limits

Tipping Points also remind us that most policies are scalable, not dichotomous, binary,  black and white; and thus subject to some tinkering, adjustment, negotiation.  Yes, I understand those words are not in the vocabularies of very many  politicians today.  But giving up is not an alternative either. 

WA State Capitol Campus_Lefberg_10

Washington State Capitol

One might argue that Washington addressed the Slippery Slope problem by not only establishing a new minimum wage in its 1998 Act, but providing the slope at the same time (maybe a slippery one?).  But I see this as a safeguard, rather than a runaway train.  It pegs the minimum wage to a time when the state was just about at “full employment” and adjusts it for inflation annually.  In theory, at least, this is sustainable.

The Washington approach is not a full proof, guaranteed protection that policy-makers in Washington won’t raise the MMW faster than the law provides. In fact the small city of SeaTac, Washington, which lies between Seattle and Tacoma (get it?),  passed a $15,00 minimum wage recently.   It has limitations, and may not entirely survive continued litigation. 

Having the slope built into law with nnual COLA adjustments prevents the state from going years without a change.  Raising the MMW a knowable and predictable 2% a year, is a lot better than not doing anything for 15 years, then boosting it by 40% in one bite.  At least one caveat: you really shouldn’t raise the minimum wage by 15% in a year when inflation is 15%.  Not good for the dog to chase its tail.   That can be put into law as well.

I understand that most conservatives won’t buy much of what I’ve argued here; and that liberals might say the old minimum wage idea is passe. For example, I made no mention of the “living wage” as the goal instead of a minimum wage.  A mandated “living wage”  is based on a calculation of how much money it takes for a person to achieve some specific standard of living. The goal of living wage legislation is to ensure that Americans who work full time are not living in poverty; that they are able to support their families without relying on public welfare.

There is a tax policy counterpart to the minimum and living wage concepts which has been supported by some of the most respected conservative economists in history (e.g., Hayek and Friedman).  The idea has been known as a “Basic Income” (or negative income tax).   It  would likely be much more effective, while being less intrusive on market forces than a MMW or living wage.

I don’t usually use Wikipedia as a primary source, but here their description is especially clear and (almost) concise.   “A Basic Income (or negative income tax) is a system of social security that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. There is no means test, and the richest as well as the poorest citizens would receive it.  Proponents argue that a basic income based on a broad tax base would be more economically efficient, since the minimum wage effectively imposes a high marginal tax on employers.”

The current U.S. Earned Income Tax Credit (EITC) functions like a basic income or negative income tax.  It could be tweaked so that it applied to more taxpayers or provided higher refunds. It would not be paid mainly by small business owners who employee lots of low wage workers.  The costs and burdens would be broadly distributed.   In today’s political climate, and with the nation’s sovereign debt challenges, expanding the EITC would require offsetting changes to the tax code, or spending cuts, to make it revenue and debt neutral.   There are surely Tipping Points and Slippery Slopes to be addressed in an EITC approach as well.