“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Saturday, July 30, 2011

The Health Industry: Capturing the States or Congress?

According to the New York Times, Florida, like about a dozen other states, debated a proposed amendment to its state constitution that would block, at least symbolically, much of the federal health-care insurance overhaul on the grounds that it tramples individual liberty. Behind the amendments was an industry with a vested interest—an industry that made substantial campaign contributions to the supporters of the amendment. I contend that there is an ethical conflict of interest in the practice, even if it is constitutional (assuming wealth as free speech, which itself is a problematic assumption).

What united the proposal’s legislative backers in Florida was more than this ideology. Its 42 co-sponsors, all Republicans, were almost all recipients of outsized campaign contributions from major health care interests, a total of about $765,000 in 2008. Around the 2008 election, the groups that provide health care contributed about $102 million to state political campaigns across the country, surpassing the $89 million the same donors spent at the federal level. This opened the backers and their state government to attack by those "nationalists" who wanted the federal government to be involved in health-insurance. Indeed, they argued that the magnitude of the health care industry’s contributions demonstrated the dangers of leaving such a question up to individual states, where campaign finance and ethics rules vary from strict to negligible. The industry has enormous power at the state level, they contended, and very few states have state-level consumer groups that are able to lobby effectively against them. Yet the alternative of consolidation of the "extended republic" carries with it other dangers.

Indeed, the matter of the US Government’s enumerated powers was not lost on the state legislators opposed to a federal health-care law. “We are trying to prepare, and trying to send a message that there is no reason for those decisions to get made at the federal level,” said Representative Linda L. Upmeyer, a Republican who is leading the council’s efforts in Iowa. Without “opt-in” or “opt-out” provisions in the federal legislation, state constitutional amendments would be preempted, and thus merely symbolic. It seems like a lot of work just to make a statement.

In terms of health-care policy, states opting out could compromise the economies of scale being assumed by the federal cost-saving measures. However, such policy reflects ideological preferences, which can vary from state to state. The effect on our system of public governance (i.e., federalism) ought to be considered as well, lest we inadvertently run our ship of state into a wall.

Consolidation at the expense of federalism works against the inherent diversity in an empire-scale Union. However, if the health-care industry is able to dominate health-care policy at the state level—a consolidated industry against comparatively smaller republics—then federal action might be necessary to protect republican principles—yet at the expense of federalism. In other words, what if the cost of maintaining federalism is rule by industry?

Governmental consolidation may well be foisted on us by necessity, given the power of consolidated private capital in the US. Yet by this logic, why stop at the US Government? To be sure, the health-care and banking industries have demonstrated their influence on Congressional action (and inaction). Why not then argue that a federation, such as that of the U.S. or E.U., is necessary to create a governmental entity large and powerful enough to fend off the encroachments of big business?

Unfortunately, the distance between the federal heads and the citizens in an empire-scale federation is apt to be taken advantage of by industry lobbyists on “K Street.” In other words, concentrated vested interests (whether business or labor) are literally closer to the federal representatives. Furthermore, the sheer amount of money required to run a campaign in a federal district and republic gives the federal representatives more of an incentive to meet with the lobbyists. In fact, legislative staff in Congress prepare “position papers” that summarize the stances of the various interest groups. Missing in these papers are the constituents.

Therefore, even though the member states of an empire-level federal system are perhaps more easily dominated by big business, the federal head is also capable of being captured (though for different reasons). Perhaps the solution lies in the checking of ambition by ambition that is available when the state governments can check the federal head, and vice versa. In other words, the worst enemy of corporate corruption of public officials at either government may be balanced federalism.

Such a balance does not necessarily mean that both levels have health-insurance plans; balanced federalism would proffer stronger checks and balances if the levels have qualitatively different approaches to a given problem. In the case of health-care, the federal head could be oriented to determining and establishing a floor (rather than ceiling) commensurate with the right of every citizen in the empire to health-care—in other words, to what each American deserves by virtue of being an American. The state governments, on the other hand, could be oriented to determining and implementing the revenues and programs at or above the federal floor guidelines. Establishing guidelines is qualitatively different than formulating and implementing a program. The two vantage-points strengthen the check and balance feature of a balanced federal system of governance.

Source: David D. Kirkpatrick, “Health Lobby Takes Fight to the States,” New York Times, December 28, 2009. http://www.nytimes.com/2009/12/29/health/policy/29lobby.html?_r=1&ref=politics

Friday, July 29, 2011

Compromise in Congress: Why So Difficult?

While it may take much effort and skill to compromise on disparate budget numbers, whether to have a public health-insurance option for the poor or sick, and whether to add regulations for the biggest banks, these compromises are actually rather narrow relative to the political-ideological spectrum. Broadening out the poles could include adding revenue considerations to the differences on spending, replacing private health insurance companies with an expanded Medicaid/Medicare program, and breaking up the $1 trillion plus banks. It could also include a balanced budget amendment complementing drastic spending cuts, having the state governments decide whether Medicaid and Medicare continue as state rather than federal programs (and how), and deregulating the financial sector further. Were public officials to enlarge the domain subject to compromise, compromise itself would be more allusive even as more positions would be represented.

The complete essay is at Essays on Two Federal Empires.

In Defense of the Tea Party

In the wake of the U.S. House’s “Tea Party” caucus in the Republican caucus effectively delaying the Speaker’s bill for raising the debt ceiling, it might be useful to row against the current for a moment if only to present a defense of the Tea Party’s agenda. To be sure, problems exist in it, but a defense can be made. I submit that the media has not been particularly accurate, or fair, concerning the movement or its involvement in the U.S. Government.

Most notably (but not obviously), Tea Party representatives are correct that August 2nd does not necessarily bring with it default, for that refers only to the Treasury department not making the required interest and principal payments on the debt. That some government agencies have to shut down does not constitute default, for the latter pertains ONLY to serving debt. Indications are that the U.S Government could service its debt August from incoming tax revenue. If so, default would only be voluntary—if the Treasury should decide to use the tax revenue for other uses.

It is more accurate to say that delaying raising the debt-ceiling would increase the likelihood that the U.S. Government’s credit rating will be lowered to AA from AAA. On this front, the refusal to compromise can be excoriated. For its part, the Tea Party might say that it is worth risking if a structural re-alignment could occur.

What does the Tea Party really want: a reduction in government or a reduction in the federal government? Or both? Other things equal, I suspect that the party would prefer a given domestic program to be at the state level, but even there the spending (and taxing) would receive some ire. If the goal is primarily to restore federalism, the Tea Party is on firmer ground. Since the CSA-USA war (1861-1865), the United States has been trending toward political consolidation at the expense of the innate diversity coming with an empire-scale. Nothing—not even Ronald Reagan and his Supreme Court—could turn the tide. One could not blame the Tea Party for saying: if not now, when? Indeed, the existence of a $14.3 trillion U.S. Government debt—roughly the amount of the annual GNP—can be viewed as a manifestation, or symptom, of the imbalance.

So it makes sense to pick the debt-ceiling as the matter on which structural adjustments can be made. However, what if the majority of the people, or branches, prefer consolidation to federalism in any meaningful sense? Is it fair to foist a structural shift on the majority? Would not it be fairer to promote a constitutional amendment directed on the question of federalism?

Of course, the Tea Party representatives could simply be opposed to the debt, and therefore of increasing it. If it is unsustainable already, then raising the debt ceiling might make matters worse even if it assuages short-term difficulties. If the leverage possible in a debt-ceiling decision is given up, there might not be another chance to stop the trend of more and more debt being added to what is already unsustainable. Rather than force massive short-term spending cuts in federal programs and agencies, however, the leverage could be used to agree to longer-term cuts, say over ten years. This is what the Tea Party has been for, though at the risk of short-term shock.

However, it could be countered that were the Tea Party really focused on reducing the debt, the objection to increasing tax revenue, especially for the rich whose effective rate is eighteen percent, would not exist. That is to say, even if citizens and residents are being taxed too much, it is not too much relative to the debt (past spending that was borrowed). This is different than saying that spending should be cut, for that applies to current and future deficits. An enhanced Tea Party position would be to come down hard on the debt (and further deficits), and thus be for both spending and revenue means of closing the gap. Even combined, it will be difficult to pay off the $14.3 trillion.  From this perspective the spending/revenue debate is premised on a false dichotomy wherein one or the other is assumed to be sufficient. The magnitude of the debt relative to GNP—the highest since the end of WWII in the twentieth century—suggests that the Tea Party is not radical enough.

Thursday, July 28, 2011

On the Futility of Divided Government at the Empire Level

Rick Perry, when he was the Republican governor of Texas running for re-election, said his primary opponent, Senator Kay Hutchison, was spending tax dollars too freely in Washington. He meant that she was too Washington. He claimed that she didn't get what he called, “Texas values.” Then, he added something really telling—something that went beyond his electoral contest: “Washington’s one-size-fits-all approaches simply don’t work. They want more control of your dollars and your life, and they want it now. We surrender that to them with peril.” His statement is worthy of our reflection even long after Perry's re-election campaign.

The frustrating matter during the summer of 2011 of whether (and how) the debt ceiling ought to be raised shows just how difficult it is to get all of the factions on board in passing a law. When both major parties must agree for a bill to become a law, “the opposition” is part of the government. No parliamentary system would mandate that a government (i.e., governing coalition) must get its opposition on board for laws to be enacted. This is true enough even on the level of EU and US states; for a diverse union of such states to require that almost every faction agree is foolhardy. In other words, “divided government” at the empire-level gives the inherent diversity too much leverage with which to block governmental action.

Why doesn’t a one-size-fits-all approach not work in the United States at the federal level?

First, an empire consisting of member states or republics is inherently diverse, given the scale of the countries themselves. Imperial-level legislation should take into account the different political entities that constitute or are members of the empire, even if the legislation applies directly to individuals (rather than to the member states). Otherwise, pressure from the real differences will build—potentially blowing the Union apart eventually.

Second, governments have ruling and opposition parties for a reason: getting all of them to agree for a bill to become a law is unrealistic given the extent of ideological distance from the far right to the far left. Compromise is difficult enough within a governing coalition. Even though having a “divided government” allows for better checks and balances, it is a recipe for nothing getting done. One size does not fit for all parties, which are themselves coalitions. Perhaps we like divided government because we are so scared about what a governing coalition might actually do. As a consequence, we suffer gridlock.

"American and European Federalism" is a short critique of Perry's book on federalism, Fed Up!

Wednesday, July 27, 2011

The Tea Party: Anti-War and Pro-States?

When he was the republican nominee for the U.S. Senate from Kentucky, Rand Paul claimed that there was not enough money in entitlement programs to counter the federal government’s deficit for 2010. Approximately 40% of the budget was military. Accordingly, the candidate said, “Part of the reason we are bankrupt as a country is that we are fighting so many foreign wars and have so many military bases around the world.” The Tea Party is animated by opposition to the exorbitant levels of federal spending and indebtedness. Applying their frugality to foreign policy, the party could make a clean break from the neo-cons such as Dick Cheney.

According to Randolph Bourne, in War is the Health of the State, “As a general rule, the longer a war lasts, the more centrally planned and government-controlled the entire economy becomes.” Robert Higgs wrote in Crisis and Leviathan that among the effects of WWI were “massive government collusion with organized special-interest groups; the de facto nationalization of the ocean shipping and railroad industries; the increased federal intrusion in labor markets, capital markets, communications, and agriculture.” Thomas DiLorenzo points to these quotes and adds that inflationary war finance “inevitably leads to calls for price controls, which inflict even greater damage on the private enterprise system by generating shortages of goods and services.” Such shortages in turn can serve as an excuse for even greater central-planning powers.

The Tea Party could thus have good reason for opposing even a standing army. Rand Paul wanted the federal budget to be 80% national defense, yet this did not mean he was for giving the Pentagon a black check. “So I believe that the defense of our country may be the primary enumerated power,” he said, “Does that mean I believe in a blank check for the military? No.” This, in short, is the argument for why the Tea Party could come out against the war machine while still viewing the federal government as being primarily occupied with providing the Union’s united defense and foreign policy. The accent on the military here has more to do with the U.S. Government being on the imperial, or empire, level than on any desire to increase defense spending.

Futhermore, the Tea Party being in favor of federalism could mean that social spending should be raised and spent by the several states individually, rather than by the general government. In being for this shift, the Tea Party would not necessarily be opposing social spending per se—only that which is at the empire-level of government of the United States. Rarely is this distinction made; it allows for the federalists in the Tea Party to accept even universal health-care in any state where the majority vote for it through their legislatures.

It is typically assumed that if someone opposes a federal program, he or she does not want it at all; it could be that the person is oriented to re-establishing federalism rather than being opposed to the policy itself. Although the Tea Party has been oriented to both, this need not be so. The Tea Party could be agnostic on whether a given state has a sustenance net while being against the U.S. Government having any involvement in entitlement programs. The question for the Tea Party would be whether there is any sustenance-floor to which any American has a right.


Thomas Di Lorenzo, “Inflating War: Central Banking and Militarism are Intimately Linked,” The American Conservative (August, 2010), 16-18.

W. James Antle, “Rand Plan: Will the Tea Parties Turn Anti-war?” The American Conservative (August, 2010), 8-9.

Tuesday, July 26, 2011

Bad Psychology and Political Violence: A Toxic Cocktail

Before the assassination attempt on Rep. Gabrielle Giffords in early 2011, it had been quite some time since there had been a major assassination attempt on American soil. The attempt on President Reagan had been almost thirty years earlier. During the intervening time, the naive view that American politics had outgrown such barbaric acts of political violence could grow and thrive. Then in July 2011 the world witnessed an anti-Muslim European go on a shooting spree in a delusional sense of being at war. In his mind, there was an actual war and his acts were justified. In fact, he viewed himself after the fact as a savior. Undoubtedly, there was no internal check in his mind for how far his sense of political reality could get from the “facts on the ground.”

To be sure, there are some real whackos out there, and they are not necessarily mentally ill. If you have ever been to a public political speech or event, I would be surprised if you didn't notice a few people who seemed unseasonably animated or perhaps simply odd--their quirks being brought out by the political nature of the event. I am not referring to simply voicing a different point of view here, or even expressing some emotion that could be reasonably expected in a political context. So I am not pointing simply to people exercising their first amendment right of free speech--a right that cannot insist on conformity of opinion. Rather, what I am getting at is the inordinate expression of emotion, which doesn't seem to fit with what one would make sense in coming from the political context. It is only natural in observing a person evincing odd behavior to suspect something else in play—something idiosyncratic to the person's psychological condition.

When uniqueness or quirkiness goes further to schizophrenia, the mix of mental illness with politics seems to be a particularly toxic cocktail. Sadly, there seems to be little or no self-restraint in the minds of many untreated schizophrenics; the quirky person, having a tenuous grasp of political reality, can unexpectedly make a beeline to “taking matters in one’s own hand.” Public officials—and the rest of us—must undoubtedly keep this point in mind.

Of course, I could simply be observing that society contains people who are not of the familiar norm. Perhaps going to a political rally or speech proffers a chance to see just what our society looks like, beyond one's circle of friends, co-workers and family. Coming out of our homes and work environments, away from our friends and family, we find that there exist people in the broader society who are "different" from us. That is to say, we realize that not everyone is like us psychologically. Of course, this doesn't mean they are crazy. "Different" must be distinguished from "emotionally disturbed." Even so, it must be admitted, I think, that there are disturbed people who react in a political situation much as an alcoholic might in being at a party. Most people at a party chat and laugh, dance and eat, but then there is the person who loses control and behaves in a way not accounted for by the context.

In the case of Rep. Giffords, the suspect was by several accounts a very troubled man. The New York Times described the suspect in court as being "wide-eyed." At the defense table, "his eyes darted back and forth and his mouth curled up at one point into a quick smile." He had been kicked out of college after having been disruptive in several classes. In the case of the shootings in Norway, the suspect’s own lawyer admitted that the guy was insane to believe he was fighting a real anti-Muslim war in Europe. I suspect that were you or me to talk with either suspect, we would be shocked as to how different (not just strange) their versions of political reality are; we might be surprised that individuals with such an unchecked-warped view of social reality could function in society. We might wonder why such persons are not in a more structured environment. Society itself may be too loose—too tolerant.

The “live free or die” attitude in modern society and the associated right of free speech should not be an excuse for a society to allow untreated schizophrenics to evade treatment. If they want the freedom to be sick, society has a greater right (and obligation) to protect the sick and the society. We need to question the right of untreated mental illness in society, as though there were a right to be sick wherein there other people are put at risk. Structured living arrangements, for example, could be required—with less structure available in exchange for accepting meds. If psychologists were required to treat poor malcontents in society pro bono as part of the license to practice, society itself would look much different and we would all be among the beneficiaries.


Marc Lacey, “Shooting Suspect Waives Bail and Is Ruled ‘a Danger,’” January 10, 2011. http://www.nytimes.com/2011/01/11/us/11giffords.html?_r=1&hp

Huffington Post, “Anders Behring Breivik, Oslo Terror Suspect, Asks How Many He Killed,” July 26, 2011. http://www.huffingtonpost.com/2011/07/26/anders-behring-breivik_n_909523.html?

Monday, July 25, 2011

Managing and Presiding: Leading as CEO and President

A manager does not preside. To manage is to be actively engaged in the operations of an organization; it is not to “sit before,” as in representing the organization itself externally and intervening in it only as needed in serving as guardian of its “constitutional” order. For example, if a company’s corporate governance system is about to implode, the President is there to preside as the board (and major stockholders) come to terms. In other words, the President would be oriented to maintaining the meeting foremost—intervening in the discussion only if a key juncture is likely to result in an implosion of the governance system.

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon.