Bruce Benidt
Jon Austin
tcarideo
Ellen Mrja
Mike Keliher
Joe LovelandDon’t want to overlook Lois Quam, quoted in yesterday’s StarTribune, supporting a public option for health insurance.
This is a big deal. Quam is smart — one of a handful of incredibly smart women in health care, including former state health commissioner Jan Malcolm, I had the privilege to meet when I did a little PR work for the Minnesota Council of HMOs years ago when I was with Shandwick. Put any one of them in charge of things and I’d be happy.
Quam worked for UnitedHealth Group, in senior positions. She’s helped shape state health policy. She knows what she’s talking about. And she supports a government-run health care option to help keep costs down and quality up.
Listen:
“The insurance industry’s actions in the current health care reform debate have too often just been wrong. Their opposition to a public option, and their efforts to protect themselves, rather than Americans, are simply wrong,” Quam said in a talk at the UofM.
“The insurance industry’s injection of the recent Price Waterhouse Coopers report on projected costs into the debate at the 11th hour, one using incomplete data and false assumptions, was irresponsible,” Quam was quoted in the Strib. “The recent economic crisis on Wall Street shows what can result if corporations and industries are not held accountable.”
This is a former business executive talking, not some wingnut person like myself. Her words, her views, carry weight.
And her words lay out a distinct difference between left and right views — corporations and industries must be held accountable vs. corporations and industries should be left alone. Which position better serves the public good underlies so many of our debates. I’m with Quam.
– Bruce Benidt
Filed under: Government, Journalism, Politics | Tagged: health care reform, Lois Quam, public option
hmm. I agree. However, you left one important thing out between right and left views and that is that government should also be held accountable vs. trusting and leaving government alone. Again, there is plenty of fraud and corporation at the door of Uncle Sam, from Fannie and Freddie to the abuse and fraud of Medicare and Medicaid and plenty in between. That’s the difference between most right and left views. Liberals tend to trust government a lot more than conservatives do. Yes, some corporations don’t do right by people, but that problem exists in government as well. Am I at all convinced that government can manage what it proposes to undertake? No. And I’m not in the minority.
Mike, I’m thrilled to have you chiming in as part of our crowd — welcome!!!! I’ve known Mike for almost 30 years and he’ll argue anyone under the table, just won’t give up. Keep it coming, Mike!
I believe it’s easier to deal with corruption in government than in business. I know you’ll disagree with that. But journalists cover government far more aggressively than they cover business, keep government more accountable than they keep business. And voting is more immediate and more effective than trying to get corporate tycoons to change.
In the history of this country, unrestrained corporate greed and power has done more harm than has government. That’s my assertion — what do you think?
Thanks, Bruce. Love the blog and the chance to interact with a smart group of people. I agree that the press covers government in greater numbers than it does business, though not always well. However, it is government’s job, I believe, to ensure the rights of private property, contract law and see to it that competition is fair. However, it struggles to do even this. The Bernie Madoff scandal is proof positive. The SEC had plenty of warning by all kinds of private sources that Madoff was pulling the biggest Ponzi scheme in history and they sat on it as chronicled in the excellent book “Too Good To Be True: The Bernie Madoff Story.”
Yes, some corporations have harmed people but many government policies from rent control to minimum wage to ag prices have done the same if not worse. The boondoogle of corn ethenol needlessly shot general food prices through the roof. Talk about hurting people most vulnerable. And many economists believe New Deal policies prolonged the Great Depression years longer than necessary.
When we talk about big business, just who is responsible for improvements in technology that make all of our lives easier from computers to autos to air-conditioning to better cleaning products, car tires, electronic equipment, drugs, health care technology, appliances……..well, you get the idea. I don’t think the contest is close. Self interest can be a very effective principle of social organization. People engage in productive behavior out of selfish or profit motivations that lead to improvements in everyone’s life. Your Caribou or Starbucks takes the voluntary efforts of hundreds if not thousands of people to plant, grow, harvest and transport your coffee beans into that steaming cup of Joe, safely and soundly for their profit and your enjoyment.
Corporations play with their own money. Government plays with other people’s money. Lastly, although business owners and executives have far more influence than market participants, you and I and every buyer exercises some control over what we buy or don’t. Market voting has a far higher participation rate than the political voting booth could ever hope to have.
Mike:
Bruce put to you an assertion, that “..unrestrained corporate greed and power has done more harm than has government…”, and you choose to dispute his assertion by pointing out the largest ever Ponzi scheme pulled off by the corporate sector?
OK, sure, the SEC probably should have caught this sooner–but the SEC didn’t pull off the Ponzi scheme. Maybe you could call the SEC incompetent, but it was the corporate sector that actually broke the law here!! Further, corporations haven’t exactly been big proponents of giving the SEC more enforcement options/powers/funding. This is a classic example of corporate greed gone wild, and corporations willing to break the law to steal from the people. The worst thing you could say about the SEC in this case is that they were in a sense suborned by Madoff and the corporate side.
And that would also be the exact same point I’d make about ethanol (I agree this is a tremendous boondoggle)–this is again something that has been pushed by corporate America on the government, enabling the corporate side to enrich themselves at the expense of the public. The problem in both of these examples is that the government has been soft on the corporate side. Big business is behind both of these schemes–and they use government to accomplish their goals! This is what is called government capture.
And no, this is not some leftist rant or screed here–this is classic public choice theory–a very conservative branch of economics (http://en.wikipedia.org/wiki/Public_choice_theory) .
Seriously, big business is all about using government for its own ends. Trust me, as a (former) lobbyist for Fortune 500’s, I know all about this.
If you want to read more, the best book on this is “The Rise and Decline of Nations” by Mancur Olson. It is an easy and fun read, and it will demonstrate just how bad for an economy that capture of the state by corporations really is. Self interest is a fine thing, but self interest more often leads to monopolies and attempts to curb competition for the benefit of those currently on top than it does to innovation. And government regulatory capture is a great way to accomplish that goal.
After all, do you think that Wall Street really wants a powerful and vigorous SEC? No, they want the kind of SEC that fails to get the Madoff’s too soon–because that is good for all of the Wall Street fat cats. Do you think that Cargill or ADM want a government that will cut subsidies to ethanol plants, or that will promote real agricultural competition (and get rid of their subsidies), by, say, allowing real competition in the sugar industry (allowing the US to import cane sugar from Brazil, for instance)? It ain’t gonna happen, because corporate America doesn’t want it to happen. They want government to protect them, not to promote competition. Innovation be damned, that is not what the corporate world is interested in–they want profits, and protection from competition is a faster and surer way to get profits.
Corporations are constantly playing with our dollars–they just have to go thru government to do so–but don’t be so naive as to think that has ever stopped them!
Mike, no doubt private business, entrepreneurs and crazy garage inventors come up with most innovations — that’s what enterprise is for. But so do scientific and academic researchers who are not spurred by dreams of Gatesian profits. And, when government is in charge of inventing stuff, we get the Manhattan project, and look where that got us.
No, I give you that government shouldn’t be in charge of innovation. But government needs to restrain greed. and corruption — it’s one of government’s basic functions, not just to keep a thief from breaking into my house, but to keep a white-collar thief from breaking into my economy and retirement savings. It’s a check and balance thing.
And you say companies play with their own money?! Watch their lobbyists squeal when you take tax breaks and tax deductions away. Business plays with our money, as PM lays out. The government deck is stacked in favor of big corporations and wealthy individuals — because they can buy congress and the White House.
The SEC was asleep at the switch because the government big business bought and paid for — through Reagan Bush and Bush — had so eviscerated the regulatory system on all fronts that busiiness criminals were like thieves running wild with the cops gone to a convention in Atlantic City.
Quam bites the United Health hand that enriched her, and WIlliam McGuire, quite well … to tune of hundreds of millions of dollars on the backs of sick patients (if you believe her husband).
I seriously doubt Quam has even read the 2,000-page Pelosi bill released less than 24 hours go. Then she has the nerve to say the PWC report was false, incomplete and irresponsible.
I think someone is trolling for a client.
It would be helpful if you mentioned Quam is married to Matt Entenza, a far-left Minnesota politician. She is hardly an unbiased business source.
John:
Matt is not far left, nor is that fact of their marriage sufficient to prove bias. If you want to assert that, prove it.
John, nobody is “an unbiased source” in business or any other endeavor. Only Fair Witnesses in Robert Heinlein’s Stranger In A Strange Land are unbiased — and that’s science fiction.
And Mary Matalin would be pretty pissed if you disqualified her views because she’s married to lefty James Carville.
I was married for many years to a woman who regularly canceled out my vote at the polls — she was smart and well-informed and made me think but seldom changed my mind, and vice versa. Independent thinkers…
Bruce and PM, I agree with some of your points. I have said on these pages that I’m not for unfettered and unchecked capitalism. But come on with the old monopoly saw. I’d like some examples of where there has been monopoly where prices have gone through the roof because they were controlled by one or few companies. Oil? No. Congress has investigated this more times than any industry and can’t find any price fixing? Microsoft? When prices actually have gone down? I’d be interested in some examples (maybe fodder for an ancillary debate)
Not true that the SEC has been gutted by Bush/Reagan. Much of Madoff happened under Clinton. At the SEC, they hire primarily lawyers (shock) to investigate companies not business people and Wall Streeters, who know how the business works. Many of them were clueless.
Big business has been behind the ethenol scheme? Surely you jest. Who is giving the price subsidies and providing the incentive? Government, I think. The market and corporations, like individuals, respond to incentives. Take away the incentives. I am for dumping the corporate welfare.
Furthermore, you just made my points that politiicans are so corrupted by money they can’t help themselves. They vote for pork barrel spending to grease the skids back home and takes lobbyists money to enrich themselves.
That sure is a ringing endorsement to trust government.
Mike:
Please….the politicians are simply responding to the same set of incentives that corporations and individuals are as well–the carrots that are dangled in front of them by the lobbyists and corporations. Take your logic and simply apply it one more time–to the politicians. they are people just like you and me, just like the CEO who lives down the street.
And, yes, the ethanol scheme was cooked up by corn growers and corn buyers/dealers all allying for their cause–protection and a market subsidy. Absolutely, this was brought to fruition by the ADM’s and Bunges and Cargills of this world–as well as all the farmers that invested in all of the ethanol plants, and all of the construction companies that helped to build those plants, etc.
Here is something pertinent:
“At least 43% of ADM’s profits come from products subsidized by the taxpayers. Most of ADM’s fortunes come from ethanol, produced through the distillation of corn into grain alcohol.”
http://www.cato.org/pub_display.php?pub_id=6079
The point is that you can trust government just as much as you can trust corporations–which is not a whole lot. Mainly because they are both composed of individuals who respond to incentives–exactly the same type of incentives (money, power, status). And they are more than willing to work hand in hand to take advantage of individuals–either thru markets or thru legislation, and preferably thru both.
The only difference is that politicians and government (at least in the US) ultimately depend on individuals for their jobs–at election time. So we have an opportunity to keep them honest, or, simply, to throw them out if we don’t like what they say or do. We have no such ability with respect to corporations (tell me how many times shareholders have thrown out CEO’s–and then tell me exactly who are shareholders who are doing this voting).
If, as you say, you want to take away corporate welfare, how are you going to do it? There is only one way–via government. You can’t do it via corporations–imagine asking a corporation to forgo some government subsidy while it’s competitors stay at the trough–there is a CEO who would be voted out by his shareholders!!! There is a corporation that would be at a competitive disadvantage, and probably soon out of business.
So the only way to end corporate welfare is thru government–politicians and politics–because ultimately, the incentive for politicians that trumps the lobbying industry is the incentive to keep their job. So it really isn’t a question of whether you trust government or not, but rather that government is your only hope if you want to achieve your goal (as you stated, reducing corporate welfare)
Hey, just passing by and couldn’t help a little eavesdropping. Provocative subject. Terrific, thoughtful conversation! Thanks.
PM:
I like your thinking. I agree that politicians simply respond to incentives, like we all do. I agree the ethenol scam was pushed by big ag and farmers but made it was made possible by government money. Take away subsidies of ethenol and some estimates have it costing nearly three times a gallon of gas.
However, I completely disagree on election voting vs. market voting. The business that doesn’t respond to consumer signals can and does go under. The polticial vote does not in any comparable way compel the political elite. A winning candidate has difficulty figuring out any signal by the voters and the vote patterns; i.e. did my constituents make it clear they opposed my vote to raise taxes? Yes, but they may overlook it by the next election of if I get them a big pork barrel project.
As economist Joseph Schumpeter once observed, political voting on issues demands too much of voters. Because it demands more thought and information than a voter can manage, plitical voting cannot serve as effectively as a control over governmental policies in a way that market voting can over entrepreneurial policies.
Who do you think shareholders are? Record numbers of people in the U.S. own individual shares of stock, mutual funds, ETFs and other parts of companies. Much of university endowments and union funds are in shares of great companies. Decisions in the hands of few? I think not. I think it is the ultimate power in market voting.
You and I every day tell supplies of goods and services what to make and how much of it, a task government is hopelessly and completely incompetent at doing. Therein lies my lack of faith at government successfully managing much of anything. From the post office to Amtrack to health care, I am not swayed.
Still “celebrating” halloween, but wondered what you make of this, Mike?
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/10/31/the_gaggle_of_economic_sociopaths?mode=PF
(I’ll get to you most recent post tomorrow)
PM:
You better sit down because this will surprise you. I agree with with much of it. However, yet again, we have someone who condemns all of Wall Street and blames the entire mess on Wall Street alone.
Who was buying a ton of these rotten mortgages and derivatives? It was Frannie and Freddie, urged on and aided by members of Congress whose promotion and lax oversight was criminal, as well, never mind some of their sweetheart housing deals and God knows what other payoffs from Countrywide etc.
If Wall Street did the robbery, Congress and the GSAs under its jurisdiction, drove the getaway cars. To put this all in the laps of Wall Street and leave out Congress, lenders, unregulated and unwatched shadow banks, mortgage brokers and lying consumers who knowingly committed fraud is just flat out intellectually dishonest in the least.
Wall Street alone bring down a $14 trillion economy? Not without a lot of help. Was corporate greed a big part of it. Yes. Was government complicit? Absolutely. Were there many others just as greedy. Ya you betcha.
This whole debate is over who you trust more and my original premise was that liberals trust government more than the market and conservatives trust the market more than the government. I don’t recall saying that neither was important in filling its role. I just don’t think government’s role should be running enterprises. It has a horrible track record. Can you defend the its record? Examples please of something that runs well and isn’t going broke.
The Minnesota Zoo.
The U of MN
Our light rail line seems to be doing pretty well
MSP Airport
US Army
Isn’t going broke…..What a strange criteria for success that is, especially now, on the day that CIT announced it is going Chapter 11. Seems far more private enterprise institutions go broke than government run institutions, and then come running to the government for a bail out or some other type of support. Whole sectors of our economy–real estate, finance, autos, farming, and more.
And, of course, the entire concept of a market is dependent upon government–currency, communications, infrastructure, even the legal underpinnings. All of private industry is built on a foundation of government. Without government, there are no markets, of any sort.
Of course, conservatives trust the market more than government. They bash government continuously–all the time they are dependent upon government. As i said before, it doesn’t matter if you trust government or not–you NEED government. Without government you are all dead, there are no markets, we are back in Hobbes’s world. Trust is a silly concept with respect to government. What you need to ensure is that government is working properly, that it is cared for and fed and regulated and controlled and allowed to do its job. You have to be vigilant about it, mostly because others will attempt to use it for their own ends, and that is not to be allowed.
Of course, government is nothing more than a reflection of the people, their wants and desires. Sadly, a lot of those wants and desires are mutually exclusive (more services and lower taxes, for example). But government is the only method that we have for making decisions and choices as a society, for pursuing our public purposes.
Private industry is great for private purposes–almost always ways to seek financial gain. Certainly, that often results in gains/benefits for society as well. But we should never forget that ALL private industries exist to serve Private and not Public purposes. They exist to provide returns to their owners. While that can provide some benefits to the broader public, that is not what they are intended to do. That is something that is a byproduct of their main purpose.
Absolutely private enterprise cannot exist without government and vice versa. Government operates on the backs of private enterprise and individuals.
Conservatives bash government nonstop? Oh, you mean the same way that liberals bash business nonstop from the fiction that great business people like Rockefeller, Carnegie and others were all Robber Barrons to the fiction that Wall Street wiped out the economy?
Again, we get to the fundamental truths of what conservatives and liberals believe. What do I fear more — decisions in the hands of a few or many?
You perhaps didn’t read my earlier post. I said I’m not diminishing the role of either but each has its role. You named me one federal program that works. That’s the only one I would have picked, as well.
The bigger the government, the less it works. The smaller — local, county and state, the more it can be held accountable. We want and need government, just as we want and need markets. Despite all its warts and some large companies bribing power hungry and money hungry politicians, I still trust the motive to do well by providing goods and services at a profit more than I do a massive federal government.
Benidt earlier stated reporters do better holding government accountable. In the past, it’s been true because when I want to college, we were trained as journalists to understand government but not business.
Business reporting is getting better all the time. We now actually have many business reporters who were trained in economics, finance and management. Now if we could get the same of federal regulators, we might be on to something.
Lastly, private enterprises cannot provide a return to their owners unless they satisfy their customers. I get to vote every day on products on services, unlike my elected officials.
Oh, also just for background. I was in college a big liberal, just ask Bruce B., one of my professors (a gem by the way). I then spent time at four daily newspapers one owned by a Fortune 500 company at the time and worked for another Fortune 500 financial corporation before starting my own business nearly 15 years ago. I have my problems with big corporations having worked for some (though some say I don’t deal well with authority).
My point in all this: Your views are shaped and colored by your experiences. I’ve had a few, good and bad and made some discoveries along the way. We all do. The way you see the world depends on what lens you are looking through.
The the fact that you haven’t worked for government in any way might be a reason for your not understanding government very well? and trusting it even less?
PM:
I see you have some of Benidt’s humor and sarcasm in you. I understand government as well as I want to. I trust it to do certain things, but think it is a mess in others. I don’t think I’m in the minority on this. I work in one of the most regulated businesses there is. But more regulation in my business didn’t stop the biggest Ponzi scheme ever. You can regulate, legislate and mandate to high heaven and people will still make stupid decisions, game the system, fall prey to greed and think of ways to screw other people. In addition, it then penalizes the many for sins of the the few. Me thinks there has got to be a better way.
This has been a truly stimulating conversation. Pleasure to listen in. How does the journalist overcome that predisposition, the “lens”? Late in life I took my first and only journalism course. Yup, that guy Benidt presiding. The wonder of the profession as I sensed it then was the miraculous opportunity to touch, enter, “see” the world through the life experience of others, their lens. For the writer each new subject an adventure, myopia and dogma inadmissible. Kind of the broad definition of the “liberal” mind I think.
Dennis:
You’re right. The profession is fascinating. I spent 10 years getting to be a voyeaur into other people’s lives and experiences. I didn’t always agree or like what I saw, but I sure saw things from other perspectives and “lenses,” from covering city government, to crime to business etc.
Now, as a financial advisor, I still get to peer into people’s lives, except that now I get to help influence them and have a stake in the outcome instead of just observe them and move on. Both are rewarding in their own ways.
Food for thought from Reason Magazine:
The Bush team has spent more taxpayer money on issuing and enforcing regulations than any previous administration in U.S. history. Between fiscal year 2001 and fiscal year 2009, outlays on regulatory activities, adjusted for inflation, increased from $26.4 billion to an estimated $42.7 billion, or 62 percent. By contrast, President Clinton increased real spending on regulatory activities by 31 percent, from $20.1 billion in 1993 to $26.4 billion in 2001.
The sad implication of these data is that today it costs more to produce each rule than it cost eight years ago. If the regulator’s budget is going up while the number of final rules is decreasing, and yet the number of pages in the Federal Register is growing, then the regulatory process is becoming increasingly inefficient. And since the regulations are becoming more expensive, taxpayers are losing on all fronts.
Figure 1 shows the real increase in regulatory spending by full presidential term between 1960 and 2009. During both his terms, President Bush outspent every one of his recent predecessors. In his first term, he increased spending on regulatory agencies by $8.3 billion, almost doubling what President Clinton—the second biggest spender—spent during his second term.
The data also show that, adjusted for inflation, expenditures for the category of finance and banking were cut by 3 percent during the Clinton years and rose 29 percent from 2001 to 2009, making it hard to argue that Bush deregulated the financial sector.
Are you certain that those last set of figures are not influenced by the dramatic changes in the deficit?
Further, it costs money to get rid of regulations–you have to go thru the exact same process as you do when you make regulations. Really, deregulating is still regulating, it just changes the standards and topics, so the amount spent in this area would not be a good measure of the laxness or rigidity (friendliness or unfriendliness) of the outcomes
Oh, and, technically, lax enforcement costs less than deregulation.
The point I am making is that an increase in the amount of money spent in the category of regulatory spending does not mean much by itself, especially when it goes up in sync with the overall increase in federal spending that occurred under the Bush Administration. It could be indicative of more jobs for cronies, for all we know.
BTW, would you please post the link to the article?
Thanks
Well, if it would have gone down, liberals would have howled. Cronies etc. is all speculation. Don’t have the foggiest regarding you trying to tie increased dollars in spending (and percentages) to growth of the deficit. He spent more in both dollars and percentages, even after adjusting for inflation (an apples to apples comparison). However, here’s the link:
http://reason.com/archives/2008/12/10/bushs-regulatory-kiss-off
Sorry, don’t know where the “a” came from when spelling voyeur. I have been lazy and haven’t read some of my posts lately before submitting them. I promise, Bruce, to do better. No more red marker, please (or was it blue? It’s been so long I don’t remember)
Green ink, Mike. Same for Dennis, if I recall.
Damn it. Another senior moment. I blame it on approaching my 50th (getting older is such a good excuse for a variety of shortcomings).
Right, the notorious green ink. Here, I fancied myself a mature and semi-accomplished adult but was invariably terrified when Bruce went around the class of twenty-year old undergrads returning the stories we had turned in days before. Hell, there he comes with mine–wanted to disappear under the desk or behind Kate who sat in front of me. Every sentence and word choice scrutinized. An education in sixteen short weeks!
Here is another take on the trust in government/trust in markets arena:
“Another lesson is more apt. After years of Republicans (and some Democrats) insisting that the market was always right, that it was always self-correcting, that it was both magical and sexy, a manifestation of God and what he intends, and that government, that foul-breathed picker of your pocket, could do nothing right, you finally got a government that, at least in this case, actually could do nothing right. Talent went into the private sector, where not only the money was but the prestige as well. The respected public servant morphed into the loathed bureaucrat — not the solution to any problem, but the problem itself, in the simplistic formulation of Ronald Reagan, whose contributions to the woes of our times have yet to be fully appreciated.”
excerpted from:
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/02/AR2009110202450.html?nav=rss_opinion/columns
Well, (isn’t that how the Gipper always started?). I think the public ranks Ronal Reagan right up there pretty high on the mountain of great modern presidents, and the stature continues to grow. However, are we to assume that Reagan cut government?
Now that’s more funny than the E Trade baby commercials. Are we to assume he chased competent people out of Washington? We would then have to assume that the occupants of the Carter administration (otherwise known as the gang that couldn’t shoot straight) were competent. We would then have to say the same thing of Nixon’s nitwits. That’s too many leaps in logic for me.
What was that Jefferson quote? Something about how those are governed best who are governed least.