Archive for July 2012

Bully Leadership

July 31, 2012

Bill Clinton brought America “triangulation”.  George W Bush brought us “in your face, I’m the decider”.  President Obama has used “leading from behind”.  These are three different approaches to Presidential leadership.   Does it make any difference?

In Clinton’s years, it made a big difference if you lived in Rwanda.  Those living in the former Yugoslavia made out better but it did take time.  Triangulation is the process somewhat like a random walk where the Administration measures public opinion following each action and then decides what the nest step will be.  Rwanda did not generate much public sympathy , so no definitive US action took place until it was too late.  Balkans’ intervention became imperative once it was clear Europe could not (or would not) act in its own best interest.

George W Bush subscribed to the neocon approach called “America’s exceptionalism”.  The neocons said America could do no wrong and that the rest of the world depended upon our unilateral exercise of our military strength.  The best way to accomplish this was to throw down the gauntlet at the first chance, pick on someone weaker, and demonstrate to the rest of the world how strong America was by crushing someone weaker.  In a world only divided between good and evil, this might be a useful strategy.  During Bush’s years, however, it failed us miserably.

President Obama has approached foreign affairs in a much more circumspect manner.  He has avoided entanglements where possible and kept focus on ending the two wars he inherited.  There has been an absence of threats and international confrontations.  Surprise, surprise, neocons don’t like his approach.

Eight years is often too short a period to judge any Administrations policies.  The Clinton years represented a failure of America to use its good offices overseas in humanitarian applications.     This failure was moral and not a blow to American self interests.

Bush, on the other hand, followed policies which confronted all sorts of countries and dictators.   US efforts produced no apparent improvement in these countries and cost the US dearly.   The Bush Administration spoke first and thought later, usually when it was too late.

It is still too soon to judge President Obama’s approach although it is hard to imagine it less effective than the two former administrations.

Bill Clinton formed policy with extreme reliance upon opinion polls.  Most of us do not always have enough information to comment wisely on US policy.  Even more, with “issues advertising” there is huge amounts of money being pumped in to influence opinion without any safe guards that the ads are correct.

George W considered almost no public opinion and sought very little input.  The Cheney lead “neocons” already knew what they wanted to do.  Not surprisingly, almost all his failures could have been avoided with more and accurate information.

President Obama’s policy formation lies somewheres in between Clinton and Bush.  Obama seeks information from experts and tries to pick the most prudent course.  His approach is safer but less understood by the general public.

Now we are approaching the 2012 Presidential election.  Candidate Mitt Romney is talking the talk in what can only be described as “neocon revisited”.  Dick Chaney must be proud of him.  Romney has threaten China over currency manipulation even though the US is running a weak dollar monetary policy.  Romney has pandered shamelessly to the American Jewish community (read money) and singled out Iran as the (little) target, if he were President, that the US would kick sand upon.  And so that every one else knows he plans to carry a big stick, Romney solemnly promised to raise defense spending.

So which style of governance would you expect a President Romney to follow?

 

Doctor In The House?

July 29, 2012

An article in today’s newspaper herald a looming shortage of doctors… just as the Affordable Care Act is about to make health care more available to millions of Americans, there will be too few doctors.  What are they trying to say?

The quoted experts said the shortage is already baked into reality.  It takes about 10 years to produce a doctor, these sources said, and so ACA or not, there will be a shortage.  What are we to do?

Some will blame the Affordable Care Act for putting demand upon the system when the system cannot respond.  Others will say this is a problem of spot shortages.  That is, in big cities or populated suburbs, no problem.  In rural areas or economically depressed regions, not so good an outlook.

So should the call go out for “full steam ahead”, train more doctors and fast?

It might be instructive to also remember that US health care costs (per capita) are almost twice that of Germany and France (and about 15 other modern countries).  Outcomes arguably are not even as good.  Why then should US doctors in aggregate, be making so much money?  And, how can the US afford to increase the number of doctors even further?

The answer of course lies in fixing an inefficient health care delivery system.  At present the US pays for service and not for outcomes.  Why not run 10 diagnostic tests and be more sure of your diagnosis?  Why not discharge a patient and readmit a few days later when both events are paid for?

Some are calling for repealing ACA and hint that this will reduce the pressure on health care delivery.  They may be correct since health care, other than emergency room access, will be out of reach for millions.  How can these advocates sleep at night?

Doctors, especially those highly skilled, deserve to be well compensated.  The question is how much is enough?

Our society is not much help with the widening gap between the wealthy (job creators) and everyone else.  Doctors are as smart (or smarter) than most CEOs and senior executives.  Specialists are very well paid.  In comparison, however, general practitioners make a comfortable living but do not make as much money unless they abandon general practice and specialize.  This adds more years of study and training and reduces the number of preventive care physicians.

In a free market, customer driven, society, how can there be a shortage of well paid doctors?  Repealing Affordable Health Care can not be the answer.

I have confidence, however, that the medical profession could fix both the availability and cost issues it if politicians stayed out of the discussion.

Focusing On What Counts

July 28, 2012

It always comes as a surprise when business leaders decide a course of action that is not in a straight line.  Why did they choose that direction?  In due time, it is all revealed.  One is left then with, “oh I see, well of course”.

In the late 1990’s’s, Sandy Weill lead a process to merge The Travelers Group with Citicorp.  The rationale was to build a “one stop” shop for everything from savings to life insurance, and everything in between.  Bigger will be better was Weill promise.

If you remember those heady days, there had been bank merger after bank merger.  All the local household names have been folded into a few big name banks.  And no sooner had that happened when a new crop of small local banks began to pop up on each corner.  So tell me again why Citibank was going to be different?

It turns out it doesn’t matter what I think.  The merger was really about the resulting stock price and its potential appreciation.  It had little to do with building a better mouse trap (since anyone could copy Travelers and Citi).  It had everything to do with feeding the market’s hunger for stocks that might appreciate.

In the same time period, the “dot com” phenomena took place.  Internet company after company published a prospectus on how they were going to grow revenue.  The picture they drew was carefully crafted to entice others to seek their new stock offering (IPO).

The market does crazy things sometimes, and this was one.

The numbers cited were clearly a real stretch and were based upon practically no track record at all.  What were we missing?

The stocks had a potential for stock appreciation.  Buy now, sell later (at a higher price).

Nobody cared about the underlying company.  It was simply a vehicle for generating stock market profits.

Fast forward to today.  Facebook recently went public.  FB said it thought it was worth about $100 billion.  On opening day, FB sold its stock and like magic, it was worth about $100 billion.  Since then, the stock price has plummeted but nothing has changed at FB nor is there any new information.  FB says “be patient, long term the stock price will rise.”

Who knows.

There is no doubt that FB has currently a winning idea as a social media company.  It is simply hard to see (today) what is so unique.  Why can’t anyone offer a page where people can leave messages and see what others are saying?  If there is an answer, it must be in something like momentum.

The thought is that FB came to the market with a better mouse trap.  It muscled out My Space and lots of chat rooms.  Users found that more users meant more of their contacts are within reach.  Then along comes Twitter and we find there is room for another large social media outlet.  Who else might arrive?

Last week Sandy Weill said in an interview he thought it would be wise to break up large banks into “banks” and “everything else”  Full circle?  Not really.  Weill was really speaking to the share price of big banks.  Prospects for Big Bank share appreciation just aren’t there.

FB like CitiBank will make future moves not for what they can do for their customers but what they can do for their investors.  Going public is not necessarily a good thing.

I wonder what job creators think?

State’s Rights?

July 27, 2012

I wonder whether the Commerce Clause can be applied to political spending?  You know, campaign donations and campaign advertisements is a huge business, and the money flows like water across States’ lines.

It seems to me so obvious that political advertisement of all types, even those called “issues ads” are a form of commerce and should be held to disclosure and truth in advertising standards.  Today there are little or no standards for spending, or for what is said in advertisements.

The right on this matter is full square for free speech.  Anyone should be able to donate any amount for the purposes of saying anything.  What is left out here is what ever is said must be something the right feels strongly about.

So we now see wealthy people donating huge sums which mysteriously finds its way from the State they live in to some other State or States for ad preparation, and then to another State(s) where the ad is televised.

And the best part, it makes no difference whether the ad is accurate or misleading or outrightly incorrect.  You say what you want and if later “factcheck.org” says “liar, liar, pants on fire”, who cares.  The message has been heard and the correction most likely has not.

But there is an even better part.  No one knows who paid to create and show the ad.  The false or derogatory ads could have been paid for by your favorite store or bank or even University.  Anonymity is the word.

Think about this.  I am going to vote for X because I heard on television something that sounded correct but I am not sure who said it.

Would you believe JP Morgan Chase or Goldman Sachs if they said bank regulations were not necessary?  Or would you believe Exxon or BP if they said oil and gas exploration needed less controls?

You might believe it if the author was an independent authority.  You would be a lot less likely to believe if you knew these authorities were paid for by certain banks or energy companies.

It would seem to me if State’s rights are so important, then political contests ought to be fought with money raised in that State and from sources native to that State, by name.  Seems simple enough.

Not going to happen, however.

I wonder then whether the Federal Government can conclude that the Supreme Court has actually endorsed expanded Federal rule making authority with its Citizens United decision?  Of course, they could say the Government still can not make certain rules but States could.

I wonder what earthly reason Massachusetts has in allowing every other State in the Country send in money to decide who Massachusetts’ next Senator might be?

A Step Forward

July 25, 2012

Yesterday a Philadelphia judge sentenced Monsignor William Lynn to 3-6 years in prison.  Lynn had been convicted of child endangerment.   He had had knowledge that several priests were child abusers and yet he arranged for those priest to be assigned to other unsuspecting parishes.  This was a noteworthy judicial milestone.

In some regards Lynn was a double loser.  First, he must live with the guilt of his actions.  Second, he got the time when in fact the orders came from above him.  Unfortunately, the Cardinal and the Pope in office at that time are dead.

Following WWII, the war crime trials prosecuted all those suspected of being part of the Nazi chain of command, right down to the prison guards who took extra pleasure in executing their orders.  Since then, the tendency has been to prosecute only those who have held the smoking gun, and not those who have furnished or have given orders to use it.

The great crime of the Catholic Church has not been pedophile priests.  Pedophiles occur naturally in nature and most organizations have some.  The Catholic Church’s crime has been the cover up.  The Church, at its highest levels, made the decision to suppress claims of child abuse in order to protect the Church’s reputation.  This has allowed more victims to be attacked by the same pedophiles.

Sentencing Lynn to 3-6 years sends a clear message that type of management won’t fly any more.

Lynn’s actions did not protect the victims.  Now Lynn is the victim himself taking the time alone.  Life is funny sometimes that way.

 

Enough Already!

July 24, 2012

Mulling over yesterday’s Penn State/NCAA news conference and the penalties handed out, the hypocrisy on display was enough to make one vomit.  No wonder our Congress is dysfunctional and over a billion dollars will be spent on the Presidential election.  The moral and ethical fiber of our Country has broken.

NCAA President, Mark Emmert, pontificated sanctimoniously about the need to fix Penn State’s college football because the culture was so powerful it ruled the campus.  He expressed great sorrow for the Jerry Sandusky’s victims and then told his super sized fib, the NCAA death penalty was not strong enough.

Penn State President, Rodney Erickson, joined in as a full conspirator.  He shed large crocodile tears for Sandusky’s victims and said the University needed to rebuild its culture.

Not going to happen.

The Jerry Sandusky incident uncovered, for sure, an Administration that did not want to endanger its football program, and a Board of Regents who did not want to know anything.

Four levels of supervision, up to an including the University President elected to suppress reports of child abuse and use other means to remove Sandusky from Penn State.  In doing so, Penn State violated Pennsylvania State laws.  So far, Sandusky has been convicted and other trials are waiting to be heard.  This is how one deals with criminal and civil issue.

The allegation that Penn State’s football culture is out of balance with other school priorities is most likely correct too.  The same claims can be made, however, with almost every other NCAA football playing school (and certainly the ones that make money with football or basketball).

Recent NCAA sanctions against SMU, USC, and Ohio State provide contrast.  They all involved perfectly legal activities.  SMU was using hidden funds to entice prospective students to attend and play football.  USC was about the same.  And, Ohio State’s case involved students selling T-shirts and other souvenirs for cash (a perfectly legal activity).  In the eyes of the NCAA competition committee, however, these would or could provide those schools with an unfair advantage in attracting talent if allowed to continue.  NCAA rules violated, no Federal, State, or local law violated.

The NCAA’s Penn State sanctions are about a much bigger issue.  Try the $6.1 billion college sports industry that the NCAA manages.  From the NCAA’s perspective, college football could not become the focus of the ongoing investigation.  They felt compelled to cut Penn State, a leader in graduating football players, loose.  Penn State understood this all to well and accepted the punishment.

It is a great shame that part of the “establishment” is again teaching the next generation a broken message.  The NCAA action was never about the victims, nor for the most part about the Penn State broken chain of command.  The NCAA was acting solely to protect its brand and the $6.1 billion golden goose.

Sanctimonious

July 23, 2012

What does the word “sanctimonious” and $6.1 billion have in common?

Today the NCAA announced sanctions against Penn State in the aftermath following the Jerry Sandusky child molestation verdict.  Penn State President, Rodney Erickson, and NCAA President, Mark Emmert stood “sanctimoniously” before television cameras and gathered reporters this morning in Indianapolis, Indiana.  Emmert announced the sanctions which had previously been accepted by Penn State.

The actual sanctions ranged from the probably appropriate (Penn State donating $60 million to the victims) to the absurd (rewriting history and saying Joe Paterno did not win  his 409 victories.  This communist era tactic of writing out of history someone or something authorities did not like is bizarre.

Penn State’s football program is believed to be the third most profitable in all football.  During the years that Paterno coached, the school has grown in stature as an educational institute and as a leader in assisting athletes to study and graduate.  The value of these two accomplishments is immence, yet they seemed not to figure in today’s announcement.

The NCAA focused upon the facts that Paterno did little in follow up on a report of Sandusky’s child sexual abuse and counseled against bringing in outside authorities.  To listen to the NCAA findings, one would think Paterno had instigated the child molestation.

This sad situation actually involved the chain of command, AD, VP, and President.  While not directly implicated, the Board actually should bare as much guilt for not having provided much of any governance during Paterno’s 50 years of coaching.

Our laws, both criminal and civil, will continue to grind.  The AD and VP are already indicted by a grand jury.  The former President may well be indicted based upon evidence uncovered by former FBI director Louis Freeh.  Justice, as we know it, should be served by these legal processes.

So what is this $6.1 Billion, and what’s its connection to “sanctimonious”?

The NCAA total revenues last year was $6.1 Billion of which about 80% comes from television contracts.  This is the golden goose.  About 97% of the $6.1 billion flows back to Universities and represents profits with practically no expense.  Did you know student athletes are not paid?  Everyone else in the process is paid handsomely.

Hmmm.

I think I wonder whether the “sanctimonious” demeanor of both Emmert and Erickson is more related to the net present value of future college sports income than the present $6.1 Billion?