Saturday, November 28, 2009

Small Meditation

What we strive for daily is to accomplish “something.” Like tuning a fine violin in a changeable climate, we each hit the high notes from time to time. Yet even failing to reach such pinnacles may often yield pleasant and sometimes even beautiful results. The magnitude of our deeds, and their worth, is really not for ourselves to judge. To entertain the notion that our works are of great importance would be the height of hubris.

We are, after all, just cogs in a much larger machination. As such, our respective roles should neither be inflated nor diminished. For the functioning of the whole is but a reflection of collective contributions of the multitudinous parts. Any facet improperly honed or poorly employed will lessen the effect of the whole and create disharmony.

And lest the realization of the limitations of our individual roles be disheartening, meditate upon the watchmaker’s dream. For even the smallest lever, wheel or cog is important. When finely crafted and polished, when properly placed and employed to its fullest potential, even the smallest cog may observe and measure the tics and tocks of inexorable time, and record with exquisite precision the march of eternity.

Sunday, November 22, 2009

Public Finance - an Oxymoron?

There has been a great deal of heat, but far less light shed on the state of affairs surrounding the financing of public debt and investments through the use of speculative and risk laden derivatives. Like impressionable juveniles, officials of cities, municipalities, public pensions and utility coops were lured into investment schemes that promised euphoric high returns. Once hooked, they scarcely paid notice to the perilous provisions tied to a failure to pay for the continuing “fix” or the cost of “withdrawal” should the entity need to divorce itself from these derivative schemes. After all, Congress and the White House had driven regulatory monitors underground and given a clear green light to these bankers and financiers to peddle these feel good products. Why should the cities and municipalities worry about a downside?

The underbelly of these wonderful "investment opportunities" was indeed ugly. Let us start with the fees. Many of these derivative peddlers charge the funds they speculate with a management fee of from 1% to 3% of the total fund. A reasonable charge for dedicated expertise you say? Well, consider the Texas Teachers Retirement Fund with assets of more than $15 Billion. Do the math! THEN consider that the dedicated expertise has resulted in a loss of between 15% and 33% of the Fund’s value. Retirees under the Fund have not seen a cost of living increase since 2001 and are very unlikely to see another in the lifetime of many beneficiaries. Yet the investment managers continue to get paid the investment management fee. In addition, penalty clauses for failure to make payments or for withdrawing from these toxic deals can reach into the hundreds of millions of dollars, in addition to the lost values of assets suffered.

The fact that these funds are public assets should not be overlooked. Many of these assets are needed to serve very important functions, like providing public transportation, keeping public schools open and maintaining public utilities. The collision of two very interesting forces created this perfect storm. The first was the desensitized condition of public officials. They had been so used to constant operation on the verge of financial crisis because of tight budgets, continuous borrowing and shifting funding levels that they believed that they would be able to find some solution, somewhere. The lure of investments that promised to save on borrowing costs and provide potential breathing room was a seductive offer. The second force was the GOP mantra, essentially anti-government, that created a public hatred of any suggestion of tax increases. Even when things actually COST more, the ideology was that taxes should not be raised to generate the money to pay those additional costs. The combination of these forces drove the public officials into the waiting arms of the derivative peddlers.

The result, in human terms has been the cut of public services, the reduction of educational programs and closure of schools, public transportation systems required to push aged equipment to the margins of safety, and the reduction of police and fire safety services. Social services, or what was left of them from the anorexic taxation philosophy being employed, have nearly disappeared in many larger cities hit by these derivative scams.

But all this is merely prologue to the real punch line, the genuine travesty in all this. In the starving and emaciated condition of the cities as a result of decreased tax revenue when the housing bubble burst, municipalities and public coops faced failure to make payment on these speculative investments. The federal government responded by giving billions of dollars to the bankers and financiers to bail them out and relieve them from the pressure of the failed and reckless investments. This decision apparently reflects a belief that, while the cities and the people of the country whose tax money was being thrown about were not important enough to save, the banks were “too big to fail.” It is not at all clear why a moratorium on termination payments or late payment penalties could not have been used, and the federal money used to help cities and municipalities meet their current payment obligations in the form of federal no interest loans. The process seems to stand the notion of public finance [emphasis on public] on its head.

To add insult to injury, the banks and financier receiving taxpayer bailouts have taken hundreds of millions of dollars of the public bailout funds to pay bonuses to executives whose primary accomplishments have been to dupe investors, lose their assets and hoodwink the federal government into handing over billions of bailout dollars.

It may be too much to ask, but perhaps someone in charge of the federal public funds should take a moment to peruse the US Constitution and see what purposes taxpayer money was supposed to be collected and used for. I doubt that paying bonuses to Wall Street charlatans who have helped to bankrupt cities and endanger citizens through starvation of capital and public services would fit under even the most tortured reading of the founding document.

Sunday, November 15, 2009

Congressional Chicanery – Parliamentary Perversion

The USA legislative process has been held up as a model of democratic process to the world; but the homage may be ill deserved. Too often, the legislative process is corrupted by greed, unethical conduct and deceitful methods that prevent fulfillment of declared goals and aspirations. This concern is well illustrated in the current debate and legislative process involving reform of the health care system in the USA.

With slightly less than 300 million people in the richest country on the planet, it is shameful that over 50 million lack reliable access to health care services and health insurance coverage. This is exponentially embarrassing in a country supposedly founded upon the principle that government’s duty is to provide for the common welfare of its citizens. From the standpoint of Sociology and Psychology, the distorted use of legislative tricks seems abusive. There is a cognitive dissonance in claiming to be a government of the people committed to the welfare of all, with representatives sworn to uphold those principles, and at the same time allow use of disingenuous procedures to prevent the poor and disenfranchised from governmental protection and largesse. This is not a question of socialism, but rather a question whether government intervention is needed when individual and private commercial interests cannot or will not meet a critical public need. It is then that the national government is supposed to rise up as the champion and the protector of the lesser and indeed ALL citizens of the country.

Deception is so deeply embedded in the US legislative process and psyche that the term “honest politician” has become largely oxymoronic. People in the USA no longer generally expect their elected representatives to act honestly and with the best interests of the public or constituency in mind or heart. Sometimes that failure is a result of ignorance and incompetence, a failure to investigate or think through legislative measures before acting. Too often, however, the failures are a direct result of deceit and trickery intended to corrupt the process.

Historically, sleight of hand and semantics have played a critical role in the legislative process. When the founders of the nation spoke of “We the People,” they were not referring to women or people of color. That tradition of deception has been refined and repeatedly used to deprive people ostensibly protected by national and Constitutional principles of equal protection under the law. When the Civil Rights Acts were adopted in the 1960’s to protect against actions of willful discrimination in employment and housing, an amendment to cover gender was inserted with the insidious intent of derailing the legislation. National embarrassment over the treatment of Blacks and the backroom deals of Lyndon B. Johnson had forced a vote on legislation to ban overt discrimination against Blacks, but it was believed that extending such protection to women would galvanize Southern resistance and block passage of the laws. The underhanded ploy failed and women were extended protection under the law, accidentally.

In the current example, relying upon the same “poison amendment” strategy, Rep Stupak has engrafted an amendment to the Health Care Bill that prohibits any poor person from gaining access to government supported health insurance if the plan includes coverage for abortion services. It is like saying that the government will agree to provide necessary support for health care as long as coverage is denied to Black people or to Gays. The belief or strategy is that the amendment is so offensive to fair and decent Congressional representatives, that they would rather kill the entire legislative measure than adopt it with a provision that is morally and ethically offensive. This was a typical strategy of the Late Jessie Helms, representative from North Carolina who championed racism and bigotry through such deceit and indirection.

The Stupak Amendment has additional power to corrupt, by perverting the medical lexicon, which is an added twist and level of sophistication. Medically and scientifically, the D&C procedure [dilation and curettage] used to perform safe abortions is indistinguishable from routine medical procedures to treat such conditions as endometriosis and to remove cysts, ectopic pregnancies and polyps from the uterus. Indeed the procedure would even be denied when the fetus is dead and the risk of sepsis and death of the woman is involved. The procedure is coded the same for insurance and medical record purposes. As a result, poor people who may need any level of government subsidy to afford health insurance under the reform legislation would be denied access to virtually EVERY insurance plan currently available. In addition, Roe v. Wade and state insurance laws would probably prohibit insurance companies from drawing a line and provide coverage for D&C procedures, generally, while denying coverage for use of the procedure for abortion related purposes. So even if passed, the amendment may render health care reform legislation unconstitutional and invalid.

To be sure, the government cannot and should not be expected to do everything. And past failures of government, particularly in the last decade of the George W. Bush administration, urge caution against the government trying to do too much. There is a fair debate whether extensive use of government financial resources can be sustained in light of current economic struggles. At the same time, it is argued that the cost savings from employing health care reform will actually reduce the federal deficit over time, while reducing the growth of health care costs. This latter proposition is central to the debate, because reduction in health insurance industry profits is the primary reason why billions of dollars are being spent by these special interests to kill any type of reform. These economic projections do not even include the less tangible and less measurable positive impact on productivity for a healthier labor force and population. So the economic debate centers on saving money [actually, not spending it on health care is more accurate] in the short term, or investing in the general welfare of the citizens over a longer term.

Another very unfortunate aspect of this process is the insidious dishonesty involved, the parliamentary perversion. Rather than face these difficult questions directly and openly, the opposition would rather resort to backdoor measures to kill the legislation while pretending to take principled stances. Examination of the bank accounts of the campaigns of Congressmen Stupak, Sen. Lieberman* and others leaves little room for doubt that their motivation is more about garnering a share of the large purse of contributions doled out by health insurance lobbyists than about taking a moral stand. Playing a numbers game, however, Stupak and his ilk realize that mindless GOP opposition to reform plus a few negative votes from Democrat [or pseudo-Democrat] legislators could derail reform and thus create a potentially powerful bargaining position. Such manipulation is not inherently bad, if the intended use of power were for ethical and honorable purposes rather than simply to have power and for personal financial gain. But ethical use is not Stupak’s or Lieberman’s goal.

Perhaps the ultimate parliamentary perversion lies in the ulterior motives of legislative posturing. It is said that many GOP representatives actually want health care reform to pass, but are voting against it because they know that the majority support will assure passage. Yet they can posture publicly against the reform measure. In the case of Stupak, it may be even more subtle. His obstructionist Amendment can be stripped from the legislation in Conference as a concessionary move to gain passage, and the reform measure enacted while he keeps his treasure trove from the moneyed interests. This is the type of political corruption and chicanery that led to the Principate rule in Ancient Rome and to the Caesars declaring the ostensibly democratic, but in practice totally corrupt, Senate an irrelevancy. The Roman populace, the citizenry, was unable or unwilling to rise up and demand more honest government from an increasingly corrupt and insular Senate ruled by greed and venality. The experiment in representative democracy thus failed and Rome ultimately fell as a result of internal corruption. Will the USA experience the same fate? Will the US citizens rise up and demand more honesty of their “elected” representatives? The future of the nation hangs in the balance.

* Lieberman had taken a stance against inclusion of a “public option” in health care reform, a proposal that would allow for creation of a government alternative to private insurance in order to assure that insurance and health care costs will be restrained and health insurance will be truly available to all, a safety net. The device is different than the one used by Stupak, but the strategy is the same.

Wednesday, November 11, 2009

“Differentiated Education”

A recent report in an education journal caught my attention. Some schools in New Jersey are experimenting with a form of modified “curriculum” that enables schools to provide students with courses that focus exclusively on standardized test preparation instead of taking elective courses. While perhaps not exactly innovative, the approach is rational and pragmatic. The idea is to free teachers from the burden of training the students to pass the standardized tests, a special “skill,” and allow them to spend time on teaching actual content.

In the current raging debate about how to reform education, the corporate and commercialized product driven philosophy seems to be holding sway as the “sausage” making process of education policy progresses [and I use the term cautiously]. Thus, the move to tie funding and public support for education to standardized test results – production metrics- is gaining momentum. The ethic of mass production, however, does not inherently incorporate the concept of quality. If the corporate goal is to produce as many units as possible that meet minimum criteria, then the system derived from that goal will be one that yields high numbers of units that satisfy minimum criteria.

The New Jersey approach, then, is a logical and pragmatic response to the corporate directive. Whether or not it is proven that students who pass the standardized tests are actually better educated, this approach is likely to yield higher numbers of students that satisfy that minimum criterion. As a consequence of producing the “results” defined by corporate policy, the New Jersey schools should obtain the reward of continued or additional funding that will enable them to go about the real job of educating students. In some ways, this strategy is like shoveling snow in the winter or removing lint from the dryer filter. These chores have no intrinsic value, but they are necessary to maintaining access to the building or continued operation of the appliance.

The teachers view this strategy as a beneficial adaptation that supports their mission. Many feel that the standardized tests emphasize “reading, rote and regurgitation” skills, rather than critical thinking and higher order analytical competencies. Thus, removing that type of training from the regular classroom frees their time to spend with students trying to further their education in competencies that will be more crucial to success in life and their careers. Moving the test training process to elective or “differentiated” classes is seen as politically expedient, although not directly educationally germane. The realities of politics these days dictate that these students will need to pass the standardized tests as their ticket to that future life and career. Driver’s license exams have not been historically or empirically shown to ensure competence to actually operate a motor vehicle safely and well. However, they are required to enable the driver to get behind the wheel legally. Similarly, standardized tests have not been proven as an accurate or effective measure of the students’ competence to critically analyze and creatively resolve a broad array of problems that they are likely to face in the future. Yet education funding requires that schools demonstrate that the students can pass the tests.

The politics of production/scarcity has thrown education in the barrel with other taxpayer supported governmental services that are perhaps more easily amenable to metrics. For example, fire protection services can be measured by response times and resources can be allocated to that function with predictable and measurable consequences. Social services, including education, are more difficult to qualify if taking the quantify approach to evaluation. The number of cases that a social worker processes does not tell us about the well being of the clients processed. Indeed, we may speculate that there is an inverse relationship. Similarly, the number of students passing standardized tests does not tell us how well they are educated. It does indicate whether the school factory is effective at producing units.

And taxpayers have been encouraged, if not misled, to believe that the decision to allocate resources to education should be measured by such production numbers. At the same time, the taxpayers are reading study after study that shows the failure of schools to improve the quality of education and that large gaps remain in student achievement. What politicians are reluctant to focus attention on, however, is the logical disconnect. Simply put, the level of production does not indicate the level of quality. In many cases, the increase in production, for its own sake, will yield no better and perhaps poorer quality.

And so the New Jersey schools have taken a pragmatic approach. Let’s give the politicians what they want, and try to give the students what they actually need. By differentiating the two, they have dispensed with the illusion that the two are the same.