Friday, August 13, 2010

Friendlier language for "social" considerations and costs

One of my clients is the Midwest High Speed Rail Association (join us!) and we advocate for building bullet trains and expanding Amtrak. It's a great investment for our country to make, as it is among the most efficient methods of travel for trips between 100-750 miles that humans have invented.

One of our challenges is that high speed rail is more efficient than all other modes (mainly driving or flying) when comparing *all* costs, not just government costs. So think of 1000 people deciding to travel between Ann Arbor and Chicago. If they each drive, think of each of them at a gas station, filling up their tank, spending $50 or $75, and exporting their wealth from their pockets to Saudi Arabia. Then they depreciate 1000 different vehicles for 200-some miles. And then there are the costs of maintaining and financing the parking spots on both ends. We normally don't think of those as costs born by society. Instead we tend to compare the costs of a building and maintaining a highway to the costs of building and maintaining a high speed rail line and end up with the conclusion: "jeez, high speed rail is expensive."

But if they each get in the same one train that sits more than 1000 people and take the same train to Chicago that lets them off in a very compact train station (compared to an airport or a 1000-car parking lot), using a relatively tiny amount of energy to move the train compared to moving a plane or moving 1000 separate cars, then the total cost is much cheaper.

We need better language to convey the total costs to all of society and encourage voters to 'zoom out' their perspective on how we run our country. Usually, government-run or -financed investments make a lot of sense from the perspective of the total costs paid by everyone in the country or state, but they don't make as much sense without that crucial perspective. Public transportation is a great example. One of the major benefits of public transportation is the reduction in time-wasting traffic congestion for drivers. If everyone on a train got in a car, traffic would be much, much worse. And that would impose a real cost on everyone else. But if we don't 'zoom out' and consider the costs born by everyone as a cost that each of us should care about, then we miss the point of making our country more efficient and economical through government-financed initiatives like public transportation. We just focus on the tax to maintain public transportation and think of that as the only cost we are all paying.

It's hard not to consider this a type of socialistic thinking, because after all, we're thinking about everyone in society. Socialism is still considered a taboo term, even though most government-investments that are really socialist institutions like highways or or high schools or fire departments are as mainstream as the military. What language can we use that avoids the taboo term of 'social' costs and benefits? (And hopefully the taboo is wearing off so we can have pragmatic and accurate discussions and debates about the best way to run our country in the most efficient, economical way).

I'm growing fond of the term 'wasteful' to describe how we run things without sufficient government investment (if, in fact, the costs born by society are higher than they would be with more government involvements -- of course, that isn't always the case). In transportation, we rely too much on roads and cars for our mobility, and that is inherently costly and wasteful. We spend far too much on gasoline, which is exporting our wealth to the oil-producing states (funding the other side of the war on terror) and the costs of transportation in the aggregate are way too high compared to what they could be with far more public transportation and high speed rail.

So as a way to get people to start zooming out and to accurately calculate the costs and benefits of different transportation investments (auto-heavy, or more government-investment in public transportation), I'm going to use the terms 'wasteful' and 'productive' as the two metrics to consider. Because ultimately, our economy needs to be more productive and less wasteful if we're going to raise our standard of living. It's a shift for lots of voters to think of their personal economic well-being as fundamentally connected to the economic well-being of their neighbors and fellow Americans, but it happens to be true. That means if our neighbors spend less money on transportation out of their personal budgets (because they have access to public transportation), we are better off because of it. And the more people who see their world in that accurate, interdependent way, the more people will vote for policies that make all of us better off. Otherwise, we're stuck with voters and politicians who believe that it doesn't really matter what makes all of us better off, it's that they are against the very idea of a government reducing costs for everyone. That idea of opposition to government generally takes our eyes off the ball of what works to improve all of our standard of living.

And so ultimately, to reduce voters' opposition to government generally, we should be encouraging citizens to think about all the costs that all Americans spend in transportation or education or health care or business. Because if government can save all of us money -- and it absolutely does -- it is economically self-defeating for Americans to continue to be wasteful because of a rejection of the idea of government.

Tuesday, August 10, 2010

Neat campaign idea for progressives: Reusable grocery bags with a re-elect tag line

Maryland State Senator Jamie Raskin's campaign came up with a smart idea to promote his re-election campaign among the socially progressive voters of his base: distributing reusable grocery bags that say "Re-use, Re-duce, Re-cycle and Re-elect Senator Jamie Raskin!"

It's just as good as a lawn sign or a bumper sticker, because it is a visible tool that gets circulated at the grocery stores and on the way home. Plus it firmly identifies the candidate as part of the sustainable movement.

By the way, in just one term, Senator Raskin has established his record as one of the most progressive state legislators in the nation. One of my favorite bills gets to the heart of the structure of American capitalism that currently imposes a legal duty upon directrors of corporations to follow their fidicuary duty to disregard employees, the environment and everything else besides maximizing corporate profits. This is a problem, because imposing a legal requirement on every single director of every single corporation to systematically ignore everything besides the maximization of profit means all of our businesses pay less than what would be optimal for our economy's purchasing power and consumes more resources that is optimal for our long-term sustainability. Profit is key, but it shouldn't be the only outcome driving corporate decision-making. And every state's corporate law imposes that obligation on all of the for-profit corporations duly incorporated in their state. Except for Maryland. A new law, authored by Senator Raskin, permits the creation of a Benefit Corporation, where the company exists not only for profit but for the benefit of the community. These B Corporations will, I hope and predict, become an increasingly important part of our economic life.

Saturday, August 07, 2010

Want a pro-business environment in Illinois? Regulate insurance companies.

You know how we can create a better environment for business growth in Illinois? We can start regulating the for-profit, parasitic insurance companies so that the people who actually create jobs and grow our economy can get better, cheaper health care for the premiums they pay.

Fortunately, the Obama and Quinn Administrations are doing something about that. The federal health insurance law includes a provision to help states beef up their ability to regulate insurance companies. In Illinois, we don't do that at all. One staffer at the Department of Insurance spends about an hour per insurance rate filing and they are all approved, because the Department doesn't have the ability to do anything about ridiculously high premium increases, according to this Sun-Times story.

Quinn's Insurance Director Michael McRaith is trying to change that. He wants the authority to approve or deny premium increases, so that businesses who pay them can save money and spend that money on creating jobs. About half the states do that, and I'll just bet the businesses in those states pay less for better health care because the insurance companies are regulated. From the Sun-Times story:

All insurance companies licensed in Illinois are for-profit, and state law doesn't require them to tell policyholders in advance about rate increases. It also doesn't restrict what premiums can be charged to individuals or employers with more than 50 workers. Smaller businesses have slightly more protection because state law limits how much premiums can vary from the norm.
McRaith said he's certain he'll be able to find lawmakers to sponsor a bill giving his department the authority to approve or deny increases, as about 25 other states do.

The bigger picture is that the "pro-business" agenda has been hijacked by the insurance companies and utilities. The people who create jobs have a completely different agenda than the insurance companies and utilities. Entrepreneurs want cheaper health care while insurance companies want to charge more. Entrepreneurs want to regulate insurance companies while insurance companies don't want to be regulated. Entrepreneurs want cheaper energy. Utilities want to charge more. Entrepreneurs want the government to regulate utilities to get them cheaper energy. Utilities say that's anti-business and they don't want to be regulated.

So in this particular debate, where the rubber meets the road, as to whether the Illinois Department of Insurance should be able to approve or deny rate increases from the for-profit insurance companies, the pro-business stance is to say HELL YES! For the companies that actually create jobs (like mine, by the way), including every freelancer who created their own job, we want the state to regulate insurance companies and get us cheaper premiums and force them to pay more claims. That will reduce our costs and allow us to create more jobs.

That's why I represent the Small Business Advocacy Council. Because finally there is a business organization that will represent organizations that create jobs, not just the insurance companies and the utilities. And they won't spend millions and millions fighting the federal health insurance law and the candidates who support them like the United States Chamber of Commerce is doing right now -- in the name of a "pro-business" agenda. If you don't like that, then join the Small Business Advocacy Council right now and organize with other businesses!