Do you believe in our Political System? If not, why not?

Lee Hamilton, who is a senior adviser for Indiana University Center on Representative Government had an article on the Op Ed page of our local paper last week.  In the beginning paragraph of the article he said that he believes “that our country is divided into two political camps separated by a deep and uncomfortably wide gap.”   He says that he is talking about people who believe in our political system and those who don’t.  At this point it’s hard not to think of the Winston Churchill saying that although a democratic system is not perfect, it’s better than any other that has been tried.  The non-believers are, he says, mostly young people who are disheartened by political polarization and are convinced that people in power place their own interests ahead of the country’s.  Hamilton says that good politics means resolving our differences through dialogue and compromise.

Several years ago, I read a book and took a course by George Prince on creative problem solving.  The sub-title of his book was ‘A Manual for Dynamic Group Problem Solving”. His process started with the older idea of brainstorming which I was first introduced  to at a college seminar when I was still in High School.  Brain storming is a way to come up with new ideas from groups of people – the idea is to get people to think of ideas that might be different although maybe impractical.  Part of the process is that the group does not make any judgments of the ideas put on the table.  George Prince had a process that started with brainstorming but added a phase which would then take what seemed to be the better ideas and then make them practical through a process of group evaluation.  One of the keys to the process was that people would not get blamed for coming up with suggestions that were obviously impractical in the beginning.  This naturally took acceptance from the group and were not to be publicized by anyone in the group.  There would be no evaluation of ideas suggested in the “brainstorming” exercise.  Even though an idea might be impractical, the thought was that it might spur someone in the group to think of something that would not have come to them otherwise

A few years later I was in charge of a group that obviously needed some changes in its operation.  We had a “committee” of people from all parts of the organization that might be affected.  We wanted everybody that might be effected to be represented.  We were looking for solutions that Stephen Covey would call “win-win”.  This committee did not meet continuously, but maybe once per week until we got finished.  We had someone on the committee to take notes and do minutes so we could remember from week to week where we were in the process.  The group seemed to be working well and focused on coming up with a good set of solutions.  Then our note-taker showed up one week with a tape-recorder  which was put in the middle of the room so that everyone’s comments would be recorded.  She said she would not do anything to let anyone else hear the tapes, but it would help her write minutes that would only be seen by the committee.  I was impressed with how that simple step changed the tenor of the meetings.  Everyone got more guarded in their comments.  They knew they were being recorded and anyone who heard the tape would know who any of the ideas had come from.  The minutes had said only what the group had suggested and did not name anyone.  It was a learning experience for me, I would not have guessed that the introduction of a tape recorder by the minute taker who promised to erase the tapes would have made that much difference in how the guarded the group became on the chance that someone outside the group might hear the tapes and make judgments about them.

A few years later, as consultant,  I got a call from a lady in charge of a non-profit group who was doing work for a city outside of Tulsa and had a political problem because one of her board members had made some comments to a local news media reporter about the board.  The CEO wanted to get the other members of the board together to see if they could discuss the disparaging remarks made by the board member and decide how they should be handled.  But she thought the organization was subject to the open meeting laws and she might not be allowed to get the board together without publishing the meeting date and inviting the press and the public.  She wanted to get the other board members together by themselves to pull them together, have an open discussion and decide how they should handle the crises caused by the one board member’s comments to the press.  I understood perfectly well why the CEO wanted to do this and that it was probably a good idea.  But given the open meeting laws, I did not have a good solution for her.

Lee Hamilton cited our 240 years of history as evidence for our political effectiveness.  But it’s only been in the last 30 or 40 years that we have open meetings and live TV coverage of congress with every comment make by any of  participants judged.  And if anyone changes their mind on any subject, it’s reported as if they are not trustworthy.  It would seem in the last few years that some of the politicians have figured out ways to use these public open discussions to their advantage.  They use the news media for their political purposes in ways that are not helpful to problem solving, but may help them get re-elected.  With the politicians wanting to be re-elected, and having their every comment evaluated, they tend to make self-serving manipulative comments. And not being able to modify their thoughts or opinions without being criticized is not good for finding win-win solutions that every one can support.

One of our new state house members was asked by the local paper to list some things she learned in her first year in the Capitol.  Her first item was that “It’s not really a two-party system.  It’s a two-tribe system.”  She goes on to say that “the two tribes don’t really talk.  One doesn’t socialize with the other.  They don’t work in teams.  They are segregated.”  And “…there is little opportunity for civil discourse.  Yes, theoretically you work on committees together.  But make no mistake, the ruling tribe runs everything.”  Not exactly what our forefathers had in mind?

So it’s not surprising that we are not as effective as we were for the first 200 years and the young people are smart enough to figure that out.  I wish I had a good answer to our current situation.  Modern technology has both it’s good points and its bad points.  But don’t expect the news media to suggest changes.  It would seem they are one of the beneficiaries of this state of affairs..

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Slavery, Segregation, and Monuments

Today there seems to be some controversy over monuments in the south that remember the Confederate States of America and it’s leaders.  New Orleans recently took down a large monument near the middle of town.  And there have been some suggestions by people in the news that others should follow.  Before I go any further, let me say that I don’t believe that slavery was ever a good thing and segregation may have been even worse.  But Condoleezza Rice recently said to the news media that the monuments should be left up as a reminder of what happened in history.  (Rice was a former U.S. Secretary of state under President George W. Bush.  She is also a black woman born in Birmingham, Alabama.) I agree with Ms. Rice, but unfortunately there are a lot of people  who seem to believe that history started in 1860.

It started a long time before that.  And if it’s true that “those who don’t know history are likely to repeat it”, then we should remember that history started longer than 160 years ago. Slavery was in our world a long time ago – for example in Biblical times, Jews were slaves in Egypt.  H. G. Wells wrote a two-volume history of the world a few years ago.  Although it was not too well-regarded by historians, he did point out correctly that all the people of the world did not develop at the same rate or at the same time. I thought this was accurate and useful to remember.  All of us are capable of learning, but we don’t learn everything at the same time.  In biblical times, one of the most advanced nations was probably Egypt. And there was a time when the most advanced nation was China, and today we use Arabic numbers which were developed in the Middle East and are superior to what the Roman’s used.  In the sixteen or seventeen hundreds when the “new world” was discovered, the white Europeans were the most advanced and the most advanced have always had the upper hand. The people of the “New World” continents were not as advanced as the Europeans.  Nor were the central and southern Africans.  Slavery was not apparently considered a sin, so it was the White Europeans who started taking the black African Slaves to the New World.  The World traders could take black slaves out of Africa without paying for them and sell them in the New World where settlers needed manual labor.  In the U.S. a lot of these traders where seagoing traders out of the Northeast.  In the early days, there were no laws against slavery and people in most states – North and South owned slaves.  But the biggest market for slaves was in the South where the industry was farming.

In the 1800’s the world began to get a different perspective on the moral correctness of slave ownership.  In South Africa, the British outlawed slavery in the early 1800’s.  Doing so made enemies of the Dutch (Boers) who were the first ones into the country.  They had migrated inland, become farmers, and were much more dependent on the slaves than the English.  The Dutch had introduced slavery in 1657 – not using the people all ready in South Africa interestingly enough, but importing Negroid people from the areas further north.  In 1795, the British arrived and took control but did not abolish slavery until 1833.   The English, on the south coast were no doubt much less dependent on the slave labor, but slavery apparently didn’t bother them for the first 50 years that they were there.  In 1869 the English moved inland to mine gold and diamonds and there was no segregation so the Boers had to compete with the Blacks and Coloureds for employment in the mines.  When the National Party (primarily Boers?) came to power in 1948, the policy of Apartheid began.  There were 3 races identified in that policy – white, black & colored.  None of any the 3 races were allowed to integrate with each other.  Apartheid might have been a lot worse in many ways than slavery for the blacks.

I did not realize until I heard a black CEO of the new Smithsonian Black Museum building speak a few weeks ago, that there were many more people moved as slaves from Africa to other countries in the “new world” than were moved to the U.S.  But the 18th century saw almost all of these slaves freed – some peacefully, some not.  But apparently most were peaceful.

In the U.S., most of the slave population was in the South,  even though most of the importing of them from Africa was by trading sailors from the North.  But in the North all of the states were allowed to decide when and how they would outlaw slavery.  And I think it was all done peacefully.  In the 1800’s the U.S. was adding new states as it spread west.  In some of these there was controversy over whether or not they should allow slavery, but the decisions were left to them.  These were treated as “States Rights Decisions” even though there was interference by people outside the states in trying to influence public opinion.

But by the mid 1800’s slavery was on the way out in acceptance by Europe and the Western World.  There is a plaque in the yard of a hotel resort where we have stayed in Southwestern North Carolina to a man named Wade Hampton who it says was the “largest slave holder in the South, with over 4,000 slaves”.    The slaves worked on his plantations in Louisiana and South Carolina, and he freed them before the outbreak of the Civil War in 1860.  It also says that “General Hampton” advocated the “abolishment of slave ownership in a speech to the South Carolina legislature in 1860.”   There are  a few things that I have wondered about that the writing on the plaque doesn’t address.  a)  What happened to his plantations?  Did he have to shut them down because the freed slaves all walked off?  b) Did he start paying them wages?  And, if so, did he start charging them money for the food and shelter he provided them?

My guess is that if many of them left he would have to shut down his plantations because there was no other source of labor to keep them open.  I would guess that they did not walk off because there were not going to be other jobs available and most were unskilled.  Slavery was not “free help” as we are told today by much of our media, because the owners would be required to provide food, shelter, a medical assistance if they were to keep them working productively.  So if he paid a wage to his “freed slaves”, did he also charge them for rent and food?  And if he did charge them, was it less than or equal to what he paid them?  (Their would have been no free market for either wages of unskilled farm works or the rent for the places they lived in.)

Nothing is ever as simple as it seems?  Thomas Fleming has written a recent book titled A Disease in the Public Mind in which he gives an account of some of the things that led up to the civil war.  He seems to think that war was inevitable because of  things that people did and that much inflammatory rhetoric was published that included things that were not accurate or true.  He also says that before the war, there were some skilled slaves, such as blacksmiths that ere allowed to work off the plantation for money which they could keep.  He thinks that we would have freed the slaves in the south without the war.  I think he makes a good case for that but who knows if and when it might have happened?

What do I think?  I don’t think there is much balance or understanding in some of our public figures today or the media that has any respect for the complexity of history or what people thought they were or might be facing at the time.  I believe that nothing (like this) is ever as simple as it seems.  And much of the rhetoric today is not helpful.  Fleming’s book title is a quote from U. S. President James Buchanan (The man is the office prior to Lincoln) about what he was hearing from people’s public comments.  We have much better relationships when we put things in context and understand where people are coming from.  We still may not agree with them but we understand better what the problems are.

So here is what I think:

  •  Slavery is bad.  But the worst part was taking people from their homes, friends and relatives in Africa and, generally, that was not done by the plantation slave owners in the South.
  • Slave ownership was not “free labor” because the plantation owners had to provide food and shelter, clothes, etc.
  • Farm labor is not skilled labor and if the unskilled slaves were freed, other jobs would not be available.  Thomas Jefferson thought that we should educate the slaves before we freed them.  I think that was a good idea that never happened.
  • Freeing the slaves would probably have happened without the war, but who knows how long it would have taken.   The world that we lived in was no longer accepting slavery, so it almost surely would have happened at some point.
  • Not all Southerners who fought for the South in the civil war were slave owners or even accepted slavery as OK.  The Carolina plaque contained the title “General” (Hampton) so I assume he fought in the Confederate army.
  • Other states had been allowed to solve their slavery problems themselves.  The upset to the society and economy in the South was going to be much worse than in the North. Without the war and “reconstruction” we might have avoided segregation and be better off today.  States rights were a “real issue” to many, if not most’ white people in the south.  Even people who did not believe in slavery wanted to be able to solve the problem themselves, and results are usually better when people solve their own problems.
  • Segregation was better than apartheid, but segregation did not really help the freed slaves.  And some of the results of that are still with us today.
  • I was told growing up in the South, that the worst thing that happened was not the war, but “reconstruction”.  The people in the South were treated as criminals, and the “carpet baggers’ – with nothing to lose came in and tried to capitalize at the expense of the southerners and then go back home.  It was also the opinion of many in the South that if Lincoln had not been killed, Reconstruction as it was done might not have happened.
  • The southerner’s who owned slaves were kinder to their people than were the slave traders from the north who are kindly remembered and not thought of as evil.
  • I agree with Condoleezza Rice that we should leave the monuments up as a reminder of history, but also because it is part of the past of the current southerners whose ancestors lived there and may not have ever owned slaves or thought they were fighting for anything other than their homeland.  There is probably only one perfect person who lived in the world, and if we are going to condemn people for slavery, there is a lot of  condemnation to go around in not only the Northern states of the USA, but also many in Western Europe and other parts of the new world.  We need to remember history, but we should begin before 1860 and keep things in perspective.  If we can do that, we’ll be much better off.

 

 

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In the Age of Speed, Good Judgement and Accountability Count

A few years ago (in the late 1980’s) I was in charge of what was then called MIS (Management Information Systems).  In the transition period between the “glass house” or large main frame data centers to where we are today with e-mail and instant messaging, we had distributed information systems running on “mid-frame computers built by companies mostly out of business today.  One of the first of its kind – certainly for my company was a system for our retail marketing division.  We had retail marketing store scattered around the country with the headquarters in Tulsa.  Our marketing operation had converted from old-time gas service stations to convenience stores like we have today.  In the old service stations we only petroleum products ( gas and oil).  In the new world we were stocking a lot of other stuff that drive in, grocery stores would carry. That complicated the marketing management operations and the retail marketing operation decided they needed a distributed computer system so that each store could send in information daily that would facilitate stocking and overall operations.  The stores had a lot of non petroleum products that added to the complexity and “snail mail” was not always working efficiently.

It took maybe the better part of a year to get the system installed.  But when we did, it worked well.  We were getting information from each store at headquarters daily, instead of weekly and if a problems arose that needed a decision we could get special reports and decision based that information daily as well.  To celebrate our new state of the art system, the VP of Marketing, his administrative manager and I decided to go for a drink at a private club after work one day.  We got our drink and I asked our VP of marketing how he liked the system.  He said that it worked fine and the only problem was that we had taken his “think time” away.  I was surprised by the response, so I asked what he meant.  It seems that in the old days someone would call into headquarters from the field and describe a problem that needed a decision.  Our VP would asked for a written report that had information and data that helped define the problem and when he got the report, he would make a decision.  Before our system, it took about a week to get the report to headquarters, so he would have time to think about the problem – maybe over dinner at night or in the shower in the morning.  With contemplation time he would often think of a good solution that he might not have thought of before.  With our new system, he would have the report the same day.  Once he got the report, he felt like he should go ahead and make the decision and so he would.  But without 2 or 3 days to reflect on the situation and think of alternatives, the decisions were quicker, but he wasn’t sure they  were better and maybe not as good.

Renzi Stone, a man who is now the CEO of a corporation in Oklahoma City.  In May of this year he spoke to the graduating class of the college of Journalism and Mass Communications at the university of Oklahoma.  (He is my son’s age and his father was in retail marketing when the above story happened.)  He wrote an article on the Op Ed page of our local Tulsa paper last week about what he said to the graduating class.  His article reminded me of the my experience.  Among other things he said that:

Our brains are sorting for order, yet order is elusive because of the speed that information flows to us.  at the intersection of truth and truthiness, it is difficult to decipher which direction to take when both paths look credible.  In the past, time allowed the proper amount of reflection and introspection.  Today, if action is not taken quickly, we risk being left behind – a dreaded state called FOMO (that’s fear of missing out).

It occurred to me when I read his article that things are much faster and there is much less organization to the information we get today than it was with our system in the late 1980’s.  If our VP was worried we were taking away his think time then, what would he think now? When he told me that I had “taken away his think time” I was surprised because what he said had never occurred to me.  But after he explained it, I thought he was right.  Getting information more quickly no doubt means quicker decisions but not necessarily better decisions.  As a manager, I decided that every decision had its time.  Some need to be made quickly and some can wait.  Waiting provides more information and more “think time” which often provides better decisions.

But as Renzi pointed out to the Journalism class, today we are in information overload.  There is not a lot of time for reflection and there is a temptation to react to opinion whether we know it’s credibility or not.  The information we get today comes in short blasts without a lot of explanation or (maybe) thought.  How we react to that is important.  Renzi’s advice to his Journalism class audience was to “become gatekeepers for the truth”. They have the responsibility to tell the truth and a complete story that others can understand and rely on.

I don’t think we are likely to go back to an age when we have a lot of time for reflection time.  But the Journalists telling the story need to understand what is true and what is only opinion.  The “Whys”  need to be told along with the opinion.  They are critical to our decisions on what we think and how we vote.  They (and we) need to have good judgement and accountability.

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Who, What, When, Where, and Why?

Several years ago a Kennedy descendant flew his private airplane from New Jersey (I think ) to an island in the Atlantic offshore New England.  It crashed and he was killed.  I probably heard it first on the TV news and then in the local paper.  Both of those reports said who it was, what, when and where it happened, but didn’t say why or how.   I’m not a pilot, but In my company at one point in charge of managing our private planes.  So I had some interest in “why & how” it happened.

A day or two later, there was a story in the Wall Street Journal that reported on how and why people thought it might have happened.  It was an interesting and useful article to me.  It was also about twice as long as the article in the local paper, but I read the whole thing and think I learned something useful from it.

A few years ago my friends who were journalists or studying journalism told me of the “5-W” questions that writers or reporters should remember when writing an article reporting on a news event.  The 5-W’s are the questions Who?, What? When? Where? and Why?  Today’s news media I think does a good job with Who, What, When, and Where.  But the “Why?” question is frequently ignored.  And in most cases – as it was in the Kennedy Plane crash – the “why?” question may be the most important if the reader needs or wants to learn something from the event.  But it takes longer to learn “why” something happened, and it may require some special knowledge or expertise.  Another thing is it also takes longer to explain the answer to why, than it does for the other 4 questions.  And by the time you get the answer, it may be “old news”.  But in conceptual discussions involving the role of the press, they always take the “high moral ground” that the press is helping the voters learn and understand issues.  That is probably why we have all the open records and open meetings laws.  But the problem is that if they don’t answer the “why?” questions, the readers aren’t learning much.

To be fair, today’s “for profit” news media – both TV and newspapers – are in an increasingly competitive environment.  With all the electronic environment, news papers are having trouble surviving, and what used to be our 3 main TV news networks has a lot of competition from all the cable and internet stations.  In the struggle for survival, they need to have a lot of readers and viewers.  That results in advertising dollars and subscribers, and the revenue is important to their survival.  Which  probably leads to the dominance of the other thing I learned from my reporter friends “If it bleeds, it leads”.   News has to be “new” and the more sensational it is the more readers and viewers it is likely to get.  That helps the top accounting line – the revenue.  So if it takes longer to get to “why?”, the event might not be “new news” any more.  The other problem may be with the “expense” line.  The “why” answers no doubt take more reporter time which adds to the expense.  But it also takes – in the case of newspapers – more paper and more ink.  The Wall Street Journal article on the Kennedy plane crash was at least twice as long as the local paper article. In the case of TV, the daily network news programs are only a half-hour long and with the ad’s that leaves only about 20 minutes for actual news reporting.  That’s led to the famous “10 second sound bite”.  To explain “why” something happened takes a lot longer than the usual story time of 1 or 2 minutes.  10 second sound bites are usually someone telling their position on a political or other event.  So in the bite, one might learn what the interviewees’ position is on an issue, but not “why?”.  One network a few years ago advertised that their news program would have more “depth”.  I got excited because I thought they might explain the plusses and minuses of each side of an issue.  Instead, the time was increased from one minute to two minutes and the number of 10 second sound bites was increased from 2 to 4 (the idea of “balance” in TV reporting is apparently to have an equal number of sound bytes on each side of an issue.)  Still no “Why?” reporting.

I once had a course in dealing with the news media rom a lady who had been a reporter for CNN.  One of the things she warned us about were 10 second sound bytes.  She said if the interview lasts any time at all, you may say something that can be taken “out of context” and made to sound in the 10 second sound bite as something that is different from what you really think.  The fix, she told us, was make the point you want to get across into a short “elevator speech” and regardless of the question you get from the reporter, that speech is your answer.  And she worked on the other side of the camera, so I thought that she probably knew what she was talking about.

So the newspapers – including the Wall Street Journal – are using thinner paper, less paper, and less ink.  Stories are getting shorter and the “why?” question may have gone away completely except for maybe the “editorial page”.  But the editorial page has many column’s  by people who are trying to “sell” their side of an issue, and so the “why” does not include both the plusses and the minuses – so there is little “balance”  in these columns.  There may also be a question of accuracy or lack of specifics.

So is watching the news and reading the paper a waste of time?  No, I don’t think so, but you can get most of news in the headlines and your left to guess on what the whole story is.

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Public Knowledge, Projections, and Memory

In 1978, the U. S. Congress enacted energy legislation that outlawed the use of Natural Gas to generate electricity.  “knowledgeable Experts” were projecting that we would be out of natural gas by 1985.  Thus the popular opinion was we were facing a serious crises. The government and many of the rest of us thought that natural gas use priority should be to provide heat for homes, apartment buildings, hospitals, and if enough – office buildings.  At the time the majority of electric generation was done with coal, and their were some advantages to coal for base load electrical generation and  coal and oil would be difficult and expensive to use for home heat and hospitals since most were set up for gas.  At the time there was about 25% of electrical power generated by natural gas.  Some say that there was evidence when the law was passed in 1978,  but certainly by 1980, it was apparent that there would be enough natural gas to last a great deal longer than 1685.  But by 1985, with the law was still in place, there was O% of power generation with natural gas.  But the 1978 ban was not rescinded until 1989 – more than 10 years after it became apparent that the law wasn’t needed.  Those of us who may have disagreed with the “knowledgable Experts” opinion had some knowledge of what we thought would happen, but we did not know with certainty.  So if the media reporter had asked “do we agree with the experts?” the correct answer would be “I don’t know”.

By the late 1990’s the global average temperatures had gone up fairly steadily since 1980.  The projection by “Knowledgeable Experts” was that it would continue and it was primarily driven by people’s use of fossil fuels – of which coal is the worst and natural gas is the best from a CO2 release standpoint.  Probably not everyone involved in atmospheric projections agreed with the “knowledgeable Experts”,  that the warming trend would continue indefinitely, but – like the folks that were involved in the oil industry in the 1970’s, they could not be sure – so the correct answer was “I don’t know”.  An “I don’t know answer is treated by a lot of people – including many in the media – as a passive, non-committal, abstention  vote. So it’s reported that the vast majority of “Knowledgeable Experts” agree on the projections.  As a result our government is attempting to limit the use of coal as a fuel for any use including Power generation.

But in the first decade of this century, the average temperatures did not continue to rise significantly.  And in the second decade it is not rising as rapidly either, although the weather has gotten more strange.  It seems that the 1980 world average temperature was at or below the below the median of the cycles that the world has been through – it was called by some “the beginning or the new ice age”.   The up cycle has never been higher than the temperature cycles in the history of the earth either, although some were projected by one of the “experts” using what was later determined by professional statisticians as not valid statistical analysis.  But there seemed to be a correlation in the 1990’s between the temperature rise and the increase in man generated CO2.  Could the average temperature rise in the 1980’s been a return to normal? and the increase in CO2 generation been a result of the elimination of gas in electric generation because natural gas was eliminated in power generation and replaced by coal and heavy oil ?   I’ve heard the scientific explanation of why CO2 causes global warning and it sounds reasonable.  So do I believe that CO2 can cause global warming?  – yes.  So do I believe that man generated global CO2 is causing irreversible global warming?  I think maybe not, but the honest answer is “I don’t know”.  So the honest answer might be to not disagree with the folks saying “yes” absolutely.  Those holding reservations and thinking “we are not sure” are the answers would not say “maybe, but we’re not sure”.   So since no one is saying “absolutely not”, the media is reporting that all “experts” agree that man-generated CO2 is causing global warming and that it won’t be reversed except by a reduction in man-made CO2.  Is that correct or does it depend on how the questions are asked and the answers are interpreted?  The statistics have shown a correlation between the warming temperatures and the amount of CO2 in the atmosphere. So our government and other governments in the world have reacted to that by steps to minimize Man-made CO2 generation.

But the temperatures are not rising the way they were.  In a recent article in the Wall Street Journal,  Paul Tice reported that in 2007 the UN’s intergovernmental Panel on Climate Change (IPCC) study was the basis for the US. Government’s EPA labeling CO2 as a pollutant.  But the study  “was already outdated by that time”, but the EPA reacted in 2009.  He reports that in 2013 the IPCC issued a more “circumspect report which noted a hiatus in global warming since 1998 and a break down in the correlation between the world’s average surface temperature and the atmospheric CO2 levels.  In the meantime, our governments action has cost the government $20 to 25 billion per year.  However, since we did not run out of natural gas, since the early 1990’s, the power companies have built almost all new generation plants on natural gas in the 1990’s because it’s cheaper and more convenient.  A lot of the coal plants are old and probably need to be replaced on the future, but the urgency has no doubt caused all our power costs to go up as well.  It was an urgency that cost us money and probably wasn’t necessary.

Our environmental exercise sounds a lot like the natural gas exercise of the 1970’s and 1980’s.  Both caused some pain and agony and cost us money and probably were not necessary. There have been articles written suggesting that coal jobs will not necessarily come back as a result of Trump’s canceling Obama”s EPA emphasis on not using coal to generated electricity.  Coal has been losing out to natural gas for several decades (except in the 80’s) because natural gas is cheaper, and easier.  We would probably be father along today if natural gas had not been outlawed for electricity.

There have been other similar things that I remember as well.  Why do we do this?  The first problem is that people have a tendency to project things into the future the way they have been headed in the fairly recent past.  That’s happened with natural gas and it may have happened again with global warming.  Secondly, most of our issues today are scientific or economic.  Most people don’t have much education in either including news reporters and lawyers ( and in case you haven’t noticed most of our politicians ar lawyers.) There were correlations with the environment and directions in gas usage that could be used to “prove” points that people wanted to make.  Correlation does not prove “cause and effect”.  Probability and statistics is may be the least intuitive and trickiest math discipline, and the weather people misused it in projecting an increasing world temperature.   There are lots of variables that effect things, but we tend to oversimplify.  Some variables may not be recognized and some of the relevant data may not be available.   But those who have data to “prove” their assertions have an advantage over those who don’t agree with them for reasons that may be valid, but are not supportable by data or precise theory.  And “I don’t know for sure” answers get disregarded by reporters. “If it bleeds it leads” so stuff that appears to be a problem is reported first.  Fixes and corrections, if they are noted at all are usually not on the front page.  ( In the early 1990’s the organization where I worked, got some complaints  from our employees about the styrofoam cups in the coffee rooms because they believed styrofoam had environmental problems because of CFC’s. (a chemical that had been used in its production and had been declared a hazard in the 1970’s,)  But it turns out that in the early 1990’s when we were getting these complaints, styrofoam had not been manufactured with CFC’s by anyone in at least 10 years.  Freedom is great and a free market economy has been mostly good news over a lot of years even though there has been an “invisible hand” that has helped make it so.  The Law of Unintended Consequences is not dead, but the unintended consequences are not always bad.  If we producers and consumers are free to decide what people want, invent new stuff and take responsiblity for ourselves, and believe in helping our fellow citizens, we make many fewer mistakes than a few politicians in Washington D.C.

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Not-for Profit College Cost rising faster than inflation – Pt 2

In Part-1, we talked about non-profit colleges and three things that have changed in the last 30 or 40 years.  (1) The recognized effect of big time athletic programs and the fact that college coaches salaries have risen to be the highest paid public employees in most states.  (2) the development of college rating systems and their effect on the college hiring/staffing decisions with the current emphasis on academic background and the elimination of teaching staff with practical real world experience.  (3) The emphasis on being a “selective” academic institutions with its emphasis for attracting many more applicants than can be accepted.  And one of the ways this is done is by the elimination of required courses and flexibility in majors.

One thing we didn’t cover is that non-athletic costs have also gone up partly because of the attempts to attract students.  What I learned when my kids were in college, was that many of their classmates in picking a school gave weight to those that had competitive division I athletic programs.  If having a succesful athletic programs is important, then they obviously need to spend money on facilities as well as hire good coaches.  But at the same time it is important to attract other students, non-athletic scholarship students, by having “plush” facilities.  For example, when I was in college, I had a single dorm room that was pretty small, maybe about 10′ by 15′.  It had a single bed, a built-in desk, a four drawer chest of  drawers, and maybe a two or three-foot closet to hang clothes in..  The only bathroom on the large floor was a community bath at the end of the hall.  Everyone on the floor had to share the bathroom – even to brush their teeth.  None of my kids had that.  They had more space with two or three rooms and an adjacent bath room.  Today colleges are building dorms with apartment style facilities – living rooms, bedrooms, and baths etc.  These are not only more expensive to build, but have to be more expensive to maintain.   And there are other obviously upgraded facilities.

What we haven’t discussed is how the differences in costs have tended to result in students who end up with mountains of debt which they have difficulty paying.  Nor have we really addressed the assumption that everyone needs to go to a four-year college and get a BA degree.

Lets start with the assumption that everyone needs a four-year college degree.  The man who I heard talk last Friday morning heads a “for-profit” school that trains pilots and aircraft maintenance people for world commercial airlines.  The first point he made is that the airlines are short on pilots.  If they had more pilots, they could fly more flights to smaller airports.  In this day and age a community with good airline connections will attract more industry.  He also made the point that the newer airplanes have become technologically impressive and they require maintenance people who are well and extensively trained.  Everyone that graduates from his school has a well-paying job.  The starting pay for maintenance people is $20/per hour (~ $40,000 per year) which is about the same as higher paid graduates with BA’s and BS’s from more expensive colleges.  The training takes about half the time, and costs about the same as the less expensive college costs.  Not only that, but experienced maintenance people can make as much as $150,000 dollars per year.  (Which probably puts them statistically in the top 5%-7% or in the “rich” category of Americans.)

Several years ago I did some work with our local chamber of Commerce and was part of a few of us non-chamber people who talked to prospective employers considering  basing some of their manufacturing in Tulsa.  They thought one of the  most impressive thing about Tulsa was not the availability of four-year colleges, but the presence of technical education that was available through Tulsa Technology College.  Tulsa Tech is not an accredited University wich offers four-year degrees, but does tech training similar to what the school man Friday morning represented.  In fact they do some of the same types of training that his school does, but Tulsa Tech does not work just for the airline industry and they are a “not-for – profit”.

At this point, it might be useful to remind us that a “not-for-profit” is not prevented from making a “profit”, but they are approved of that status because they were formed to provide a service needed by the community they serve,  but at a minimum, they need to balance their budget.  The difference between “for profit” and not-for profit is whether they have to pay taxes on their net-income.  The other difference is that if I give money to a not-for – profit I get to deduct it from my taxable income because if counts as a charitable contribution.   For-profit universities don’t get contributions.  Public Universities have the availability of Tax dollars, but they may need both tuition and contributions to be competitive. Private colleges do not have the availability of tax dollars, so the tuitions are usually higher and contributions are probably more important.  Most private schools have endowments that are public information and frequently get reported along with the rating scores by people doing the ratings.  Net-income can make the endowments grow which are seen as positives by most people.

So money is not unimportant to most Universities, public and private because it helps their ratings, their appearance, and the management approval ratings.

One of the things that has changed in the last few years is the availability of student loans that are “government guaranteed”.  The students agree to pay them back, but by all reports, there are a lot of young people burdened by thousands of dollars in debt on leaving school.  This has apparently been a problem for a lot of them.  They are morally obligated to pay the money back, but even if they have a job it’s a difficult burden.  Not only are starting salaries not always that good, but most grads are on their own for the first time.  They are establishing homes and families and have a great number of needs for starting life on their own.  The universities on the other hand are not risking much.  The loans are guaranteed and so they have nothing to really lose.  A “selective” school can sell the students with higher tuitions because there is loan money available.  Some (private only?) schools can attract better students to their institutions by charging higher tuitions than they actually need and offering “scholarships” from the school to attract acceptance by higher rated students.  And the SAT scores of the freshman classes are published in their school ratings by people doing the published ratings.  This also probably helps them attract more applicants which makes them more selective.

There are, it seems, a few people today that have not bought into the idea that everyone needs, or should attend a University in pursuit of a four-year degree.  Not everyone may be suited to the academic life.  And people who attend college for a year or two and drop out may be burdened by debt without good job prospects.  Even 4 year graduates who don’t major in areas where job prospects are good may have even more debt without good job prospects.  We had a mayor that thought that high school students should be made aware of other less academic but skilled job carriers that they might like better and be more suited to.  But our current mayor has apparently signed on to the conventional wisdom that everyone should attend college and get a four-year degree.  Unfortunately not all high school students may understand what other options exist.  I think it would be good if they were fully informed and could make the choice themselves.  After all it’s their life and there are a lot of honorable options.  We need aircraft mechanics and they are well paid.  I don’t think I have a talent for that. But I like to fly, so I’m glad that there are people who do like that and are well-trained and well paid.  I’m also glad for a lot of other skilled workers as well.  They do and get paid for stuff that I’m not particularly good at.

If we had less emphasis on College, we might have a better balanced work force and better, cheaper colleges.  What do you think?

 

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Why Are not-for-profit College Costs increasing faster than inflation?

My paper carried an article a few months ago that the highest paid state employee in all bur one or two states is that states major college football coach, with the college basketball coaches not far behind.  From the numbers I’ve seen, major college sports coaches are well into the top 3% of U. S. individual income distributions and are no doubt bringing the top 5% of incomes higher.  Interestingly enough this does not seem to be much of an issue with the media and the public although there has been a lot of hand-ringing about the national income spreads going up.  At the same time college costs for the last couple of decades have been going up well past inflation percentages.  Are these tuition costs being driven by coaches salaries?  Maybe, but I don’t think that’s the primary reason.  Both prices are probably being driven by the same motivation.  It has a lot to do with competitive competition and the assistance of the Federal Government through student loan programs along with some insistence that everyone needs at least a four-year college degree.

Several years ago when I was working for a major corporation I ended up spending some time in Boston working with one of our corporate lawyers on a litigation issue.  We were using the help of a Boston Law firm , and one day we ended at the end of the day with a little time to spare.  Our corporate attorney, had, in his younger days attended Boston College.  The lawyers in the Boston firm asked if we had been out to see the BC campus and we hadn’t.  So they said if we had not seen it since they gone “big time” in division I college football that we ought to go because there had been significant money spent on the campus buildings.  They said that when the school had some big time success in football, the money that people gave the school went up significantly.  But not just for the athletic programs, but for the academic side as well.  Our lawyer, Gil, and I had a chance to take the subway out to the school before we caught the plane back to Tulsa and Gil was very impressed.  There were apparently new academic buildings, new dorms and an upgraded and changed campus from what he remembered.

So I learned something I had not expected on that trip.  A successful athletic program can have a significant effect on the whole University.  But I suspect that it needs to be succesful enough to be known nationally and have a significant amount of Nationally televised games.  With the number of games on TV these days, that is not as  big a deal as it was then.  BC had done that well enough to have few game clips become national standards.  For most colleges the two big “revenue sports” are football and basketball.  The football team probably needs bowl game and basketball needs “March madness”.  And coaches are the key to that.  So a lot of big colleges don’t want to take a chance on promoting assistant coaches, they want “proven” head coaches who have already done it at some other school.  These coaches are already making big money, so the hiring college has to pay more to get him and keep him. All this causes salaries to keep ratcheting up.

The other thing that’s changed are school rating systems.  When I went off to college (many years ago) there weren’t any well publicized national rating systems.  My high school teachers and advisors had some ideas of which schools might be better or not so good, but these all seemed to be just impressions not based on any significant objective data.  Now there several annual rating systems that are based on “objective data”.  Some of the data seems to be valid – like how many of their graduates got jobs and at what salaries.  Some things that the schools have control over may be not be particularly good indicators.  Two of the most reported re the assumed quality of the faculty based on some things that may or may not be applicable to the classroom.  The most obvious is the idea that a university that has more PhD’s is going to have better classes.  And at the same time, real world work experience is apparently not important.  When I was in both undergrad school in engineering and as a grad student in a respected MBA program, the best instructors that I remember may not have had PhD’s, but even if they did they had non-academic practical experience.  The worst instructors were those that had legitimate PhD’s but no practical real world experience.  But most of today’s rating systems give no credit for real world experience, but they give credit for PhD’s and publication of articles.  At one point im my career I was in the position  of manager of a Management Science department trying to do some analytical models that would help the operating management do better planning and have better results.  We had some significant successes that are still in use today.  During that time I had a subscription to an ORSA/TIMS (Operation research/management science professional organization) set of publications.   The two different publications had articles written by academic professionals  – one was academic theory and the other was “practical applications”.  I never spent much time with the “theory” publication – mainly it was too esoteric for me to understand or see much value in.  But for a while I tried to read the “practical applications” publication.  The practical articles seemed to have been written by people who had no experience in the real world, and most of the articles in there seemed to be out of touch with reality.  .

But the employment of PhD’s with or without any piratical experience is critical to the rating systems.  The other thing that gets noticed a lot is a University’s student acceptance ratio.  How many have applied compared to how many actually accepted.  I applied to 3 schools,  but my children and grand-children have applied to more than that, but not as many as now are the average number.  It helps a University in the rating system to have a lot of applications.  The more they have that are more than they plan to accept, the higher marks they get.  One thing that helps their application numbers in addition to those things mentioned earlier is to have more flexibility in the course requirements.  Fewer required courses and more flexibility in what the student might be interested in taking whether if helps him or her in their after school life. So both my universities have cut the number of required courses.  I heard a guy speak this morning and he cited the number of currently unemployed university grads who had not taken courses that helped them prepare for paid jobs.  He reminded me of a young guy that we hired after he went back to junior college and take a two-year degree in computer programming.  It seem he had both a BA and masters degree in Greet mythology, but those degrees did not get him a paying job, so he went back and got a two-year programming degree and we hired him. But if he thought he would get a high paid job out of his 1st two degrees, he was sadly mistaken.  Does everyone need a college BA to get a well paid job?  Maybe not.

I will probably do a part 2 to this post since I have not covered everything I would like to cover.  But I seem to have run out of time and space and I would not want to make it too long to read.

 

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