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.

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.

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!

Thank goodness the Bush tax cuts are expiring.. on the road to Recovery!

Neat chart in the Wall Street Journal on the actual tax rates (the top tax rate is on income over $373,000!) for the federal government's six tax brackets (five if we revert to the Clinton era rules).

The Bush tax cuts are almost certainly going to expire, as promised by candidate and President Obama, which will do more to shrink our deficit and reduce our debt to China than anything else. If we spend it on infrastructure, we'll generate more jobs and more wealth. Or if we do what the Republicans want and keep the tax rates at the Bush rules, then all that income above $373,000 to our millionaires can go to .... speculative investments or trust funds or anything at all that won't really create wealth or generate jobs in *our* economy. And that's our bottom line (or at least, it should be): what tax rates in which tax brackets will do the most good for the most Americans. I'll take the Clinton tax rates on the right (with billions and billions of taxes to be spent on our economy) instead of the Bush tax rates on the left (removing those billions from the government balance sheet and keeping our economy slow and in debt to China).

Illinois continues to expand the franchise by putting voter registration on campus

On Independence Day, Illinois Governor Pat Quinn signed into law SB 3012 that extends the franchise to more citizens by putting voter registration and early voting on the campuses of public universities.

The important language of the law reads:

10 ILCS 5/1-20 new

Sec 1-20. Public university registration and voting pilot project. For the 2010 general election, each appropriate election authority shall conduct grace period registration and early voting in a high traffic location on the main campus of each public university within the election authority's jurisdiction. 

I predict that tens of thousands of citizens will vote this November who otherwise would not have done so because of this law.

This is particularly important because public universities are built around pedestrians, and many of the staff and students don't have automobiles. That makes traveling to the county clerk's office which often requires a car more of a pain than it should be in order for a citizen to register and vote.

I testified in favor of earlier versions of the bill (those did not limit the law to November of this year as a pilot program; such is the nature of legislative compromise as those did not pass) and found that opponents to the bill believed that requiring the local election administrators to offer grace period registration and early voting on the campuses of public universities was both unwarranted and unwise. People should figure out how to get to the county clerk's office if they miss the regular registration deadline of a month before the election, and if most first-time voters have never heard of a county clerk and wouldn't have guessed that they need to appear before an official in a relatively anonymous layer of local government in order to vote, well, too bad for them.

After all, it costs money to offer voter registration where lots of unregistered citizens work and study. Better to spend that money elsewhere and keep the burdens that we place on citizens relatively high in order for them to exercise their fundamental right.

I take a different view.

I think any barrier between a citizen and her ballot is an enemy of democracy. Our job is to snuff out the enemy. Opposing this law or other laws like it (and I'm sorry to report that most Republican legislators opposed the bill rather vociferously) is disenfranchisement. It's offensive to the best ideals of our Republic.

The entire operation of voter registration -- where citizens need pre-approval from the government in order to vote for the people who will run the government -- is a major barrier to democracy and should be viewed with deep suspicion. The convenience of government bureaucrats in processing registration data is far less important than ensuring every citizen has the opportunity to vote. The relatively successful run of extending voter registration opportunities over the law eight years in Illinois under Democratic control has been implemented over the opposition of many election administrators and most Republican legislators. It has been a success of democracy over bureaucracy.

I understand there is a benefit-cost assessment in all government administration, and that we will hit a point of diminishing returns on how many additional voters we can attract with the next use of taxpayer dollars to make elections more accessible. That's certainly the argument some of the election administrators have been making. But we need to recognize that in the United States, the government does so little work to prepare the registration list and essentially waits for the citizen to figure out what obscure local government office is in charge of voter registration to process the paper. Most governments in the Western world take it upon themselves to prepare an accurate registration list instead of putting that burden on the citizen. In the United Kingdom, government employees go out and knock on doors to make sure all citizens are registered! In Canada, they proactively mail out voter registration applications to people they think are eligible and unregistered. Some countries combine existing government databases of citizens' names and addresses, generated from things like drivers' licenses and tax returns, to prepare the voter registration list with updated information, instead of expecting the citizen to update their information with each separate layer of government. So the small steps that the Illinois General Assembly and now Governor Pat Quinn are requiring local election administrators to do in setting up voter registration and early voting on a college campus really pale in comparison to what election administrators in other countries do on a regular basis without any fuss.

This November, Illinois will take some bold steps to expand the franchise by putting grace period registration and early voting on college campuses. It's telling how far we have to go in election administration that actually putting government services like voter registration in the place where people who are most likely to use them actually are like a college campus is a bold step, but so it is. Reform only happens incrementally, and the progress of SB 3012 in extending the ballot to tens of thousands more Illinois citizens is consistent with the spirit of democratic revolution of our Independence Day.

Neat idea: publish a data-driven list of retailers' green practices

What if you want to support retailers that are more progressive and environmental than the average company? How do you know which ones to pick?

And if you help run a retailer, how do you know how to incrementally get more green relative to your peers?

Here's a neat idea: some non-profit run an annual ranking of retailers based on an objective assessment of their green practices. As an example: out of 100 points, they get 1 point for every ten percentage points of their electricity that is generates from renewable sources. With points awarded for clear, objective (and somehow verifiable) behavior, publishing the list will encourage companies to earn each additional point by improving their environmental behavior.

I was inspired by this from looking at a J. Crew catalog today. On the cover was a notice of their commitment to sustainability in the use of their paper sourcing through the Forest Sustainability Council certification process (with a particular certification number from the FSC) where they use 30% of post-consumer content and they only get wood from sustainable forests.

Looks like a campaign from Forest Ethics out of San Francisco has helped to put just this kind of public pressure on companies. They put out an annual Santa-themed naughty-or-nice ranking of big mailers (check out the 2008 version and the 2009 version).

The neat idea would be to expand this ranking into other objective assessments (perhaps with the purchase of renewable electricity, or LEED certification for their buildings or similar commitments to green sourcing) to not only put pressure on our companies but also offer companies a clear roadmap to earning better environmental credentials among the many citizens who care.

Part of the trick will be to determine exactly what those objective assessments should be. And part of the trick will be to get the publicity and credibility that the environmental measurements are legitimate and worth considering. But no one can manage what they can't measure, so the sooner we come up with some fair measurements of behavior (X% of resources devoted to renewable energy or X pounds of paper generated per employee or revenue or X% of products sold with renewable/organic/sustainable content), the sooner companies can work to achieve those objectives. That would be incremental progress -- the only kind there is!

Entrepreneurs who actually create jobs need a voice to shape policy and politics

The standard Republican narrative for economic development goes something like this: in order to attract businesses to come here, we need to create a business-friendly environment, and that means low taxes and fewer regulations.

Thus, according to the standard Republican playbook, the way to increase employment is to lower taxes, particularly on the wealthy.

The Chamber of Commerce follows that Republican line, fiercely opposing most of the Democratic Party's agenda (buying more and better health care and education through higher taxes on the wealthy, imposing more regulations on businesses to better improve the lives of regular people).

The great disconnect is between the entrepreneurs who are actually creating jobs (and the first job they create is their own) and the Republican-leaning Chamber of Commerce that purports to speak for them.

Chambers of Commerce (particularly federal and state) primarily represent established businesses. Big companies have budgets to join groups like the Chamber, while smaller, growing companies typically do not. So the "voice of business" tends to sound a lot like the voice of Republican low-tax ideology and push for the interests of big businesses (that tend to downsize and fire employees more than hire new ones).

This disconnect came home for me this legislative session in Springfield. I was working against a bill pushed by the banks that would essentially allow lenders to make more money from their business loans. Thus, the business borrowers would pay more money. The Illinois Chamber of Commerce supported the bill, siding with the banks over any business borrower. During committee testimony, a senior Republican legislator asked why in the world the Chamber of Commerce was supporting the bill. And the unspoken answer is that most business organizations promote the interests of their largest members -- big banks, big utilities and big insurance companies.

But entrepreneurs have diametrically opposed interests to the banks, utilities and insurance companies. We want cheaper credit and the banks want more expensive credit. We want cheaper energy and the utilites want more expensive energy. We want cheaper and better insurance and the insurance companies want to charge higher premiums and pay out fewer claims. So when there is a bill that could tilt the balance of power between entrepreneurs and the banks, insurance companies or utilities, guess which side the Chamber of Commerce always takes? Not the side of the job creators.

The frustrating thing is that I believe most legislators want to do the right thing -- and if we can show that entrepreneur-supportive policies which are generally Democratic-leaning policies (regulate the banks, insurance companies and utilities to create cheaper and better products) will create more jobs than the alternative, we'll get some traction. The trouble is there isn't enough of a voice for the entrepreneurs to explain the more effective way of creating jobs than just lowering taxes and regulation -- by explaining exactly how they have been successful so far at actually creating jobs. The Chamber is supposed to play that role, but they largely don't.

We need an organization of entrepreneurs to engage in politics and policy development. And by the way, I count leaders of non-profit organizations in the definition of entrepreneur. Someone who starts and runs a dance company or an after-school program can create the same amount of jobs as someone who starts a software company or construction company. Cutting corporate taxes doesn't affect the growth of a non-profit organization (that doesn't pay any). Developing public policies to encourage more employment has to include the needs of non-profits as well, or we'll skew the results and end up with suboptimal policies.

Of course, some Chambers are better than others, but the US Chamber of Commerce is now one of the main political organizations against President Obama and the Democratic-led Congress, planning to spend $50 million in 2010 to unseat Democrats, according to this Washington Post article.

For entrepreneurs who understand that Democrats have been delivering real job-growth policies (like the Wall Street reform package forged this week that will allow us to get cheaper credit or the health insurance reform law that will allow us to get cheaper and better health insurance), we need an organization of our own. And quickly, before voters make up their minds.

World Cup brings dreams of a World Election

It isn't easy to unite the world's attention in one place for one common purpose. Sport does it every two years: the Olympics during presidential summers and the World Cup two years later. It is a wonderful thing to remember that we Americans have much more in common with the people of Asia, Africa, Europe and South America than we differ, and following the rules and results of a soccer tournament at the same time as everyone else in the world is a palpable example of our commonality. 

The best and noblest extension of our essential commonality is a world election where all the people of the world have one vote.

Imagine it: candidates stumping for votes in different languages and in different continents, appealing to the better instincts of all of humankind. The same strong sense of national purpose that a presidential election generates when each citizen is asked to help shape the future of their country with their vote would be felt by all the people of the world as they are asked to help shape the future of the world.

Closer to home, we have a lot in common with the people of Mexico. Our economies are inextricably linked. Our labor markets and immigration policies are essentially two sides of the same coin. Our drug policies and violent crime challenges are similarly tied together. But we never get a chance to vote together -- Mexicans and Americans - ideas and proposals to improve our standard of living and solve problems. The nature of separate elections leads us away from thinking about solutions that improve lives on both sides of the Rio Grande. Imagine, instead, elections for something -- it almost doesn't matter what the office would be -- where we both voted among candidates looking for votes equally from Mexicans and Americans. Imagine the shifted dynamics in the development of the public will and the candidate platforms when millions more matter in the results of the election. Imagine the debates, both between the candidates and among the electorate, when everyone affected by the policies gets an equal vote in the outcome.

That democratic spirit could sweep the entire world.

For the first time in the history of the world, thanks largely to information technology, it is feasible for billions of us (if not quite all six billion of us) to vote in the same election at about the same time and all participate in the same debate on how best to improve our shared circumstances. 

I want to join a world debate triggered by an world election in my lifetime. Because the debate, discussion and eventual decision by the people will be among the best steps towards justice for all the people of the world we can possibly take.

"Why should there not be a patient confidence in the ultimate justice of the people? Is there any better, or equal hope in the world?" Abraham Lincoln

What do we need for a stronger economy? An entrepreneurial culture.

This is insightful.

Eric Lefkofsky, one of the most successful business leaders in Chicago believes that the key to sparking our Midwestern economy is a change in culture.

We have the cash. We have the talent. Why are we not growing as many new businesses as California or New York?

Because we don't value risk. We don't embrace entrepreneurs. We are stuck in a culture of risk-aversion.

And that is something we can change today.

Here is his example.

In order to innovate you need a culture that honors risk taking.  One of my co-panelists summed it up perfectly.  When the day comes where a 35 year old husband and father comes home from work one day and says to his wife, “honey I just quit my job today to launch a start-up” and she says “that’s great news” – that’s when you’ll have a culture that honors risk taking.

Unfortunately, we don’t have that culture yet in Chicago.  We don’t encourage people to drop everything and pursue their dreams.   We don’t encourage them to sit in front of a white board and sketch out untested solutions.  We don’t throw money at new ideas.

We don’t start off believing, we start off disbelieving.

The same is true in politics. Too often, the initial reaction to a bill or a proposal or a great idea is to say why it can't be done, why the established powers will never allow it and why it won't happen.

Instead, we need to embrace the new ideas and the new policies that are relevant for growing our economy, not the economy of 1930 or 1950 or 1970.

We need to look at immigration policy (something I debated last night on Beyond the Beltway) as an opportunity to forge a new North American Union, similar to the European Union, to reflect our inextricably linked destinies in Mexico, the US and Canada, rather than reflexively try to throw out the undocumented who stream north.

We need to look at higher education as an economic driver if we reject prestige-driven performance measures (like the US News and World Report rankings) and develop our own performance measures that focus on economic growth through smarter students at the lowest possible cost.

We need to look at our transportation network as another driver of economic growth, and realize our failure to embrace high speed rail for decades has put us at the mercy of oil-producing nations and kept our cities in the Midwest too far apart to operate as one regional unit -- sapping the potential of tying the intellectual capital of our universities to the business savvy of Chicago and smaller cities.

But it all starts with embracing risk and embracing the failure that comes with risk. We should reject the safe path. That leads to mediocrity. It's a powerful thought that our personal valuation of risk can lead to major economic growth for the region -- and significantly better public policies.

How do we build a social norm that celebrates risk?

Taxes....to bury the Axis

We're in the middle of two wars.

The way to pay for those wars is through taxes.

In 1943, in the midst of World War Two, the Walt Disney company put out this video starring Donald Duck to explain why "every American should pay their income tax, gladly and proudly."



(Thanks to Adam Bonin for the link)