This past week, I was on vacation, first at Martha’s Vineyard and then in Mashpee on Cape Cod.  I have an I-Phone, which means that I have ATT cellular phone service, as was the case with my wife, my sister-in-law and brother-in-law, whom we visited on Martha’s Vineyard, and many of their other visitors.  Additionally, I rented a home that had all cordless phones.  The owners, whom we met Saturday morning, July 10, before leaving had Sprint cellular phones.

The telephone and Internet service were so bad for the eight days we were away that we were effectively cut off from communicating with others except for very brief periods when we could find a signal at a handful of locations.  Moreover, when there were power outages because of weather and horrific heat, we also were unable to use the landline phones in the rented house or the wired Internet service the owners had provided us.

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As stories appear day after day about the dire financial positions of state and local governments, the question that pops up is: where did all our tax money go?  I would suggest three answers:

• Excessive benefits for government employees and their families;
• Excessively high payments to vendors; and
• Excessively high welfare payments.

I would also suggest that states, over time, because of well-intended, but poorly conceived, laws, substituted unproductive clerical and bureaucratic rules-oriented employees for those who did productive work.  For example, governments today very likely have more clerical and administrative employees, but lack skilled professionals of all kinds to manage projects and programs.  In schools, there are many more administrators and service employees relative to teachers than there were a generation ago.

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In the Friday, May 21, 2010, issue of The New York Times, there was a front-page story by reporters Mary Williams Walsh and Amy Schoenfeld entitled “Padded Pensions Add to New York Fiscal Woes.” The reporters highlighted the fact that many financially strapped New York State cities are saddled with pension costs far in excess of what their financial experts estimated when the pension plan provisions were put into place.

Unfortunately, this is an all-too-familiar story: a governmental entity that irresponsibly agreed to rich pension benefits to allow government workers to retire very young, receive an exceptionally high percentage of their pay, and have taxpayers feel the financial burden decades later.  However, the example provided relative to Yonkers, New York, is especially outrageous.

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Recently, I re-read Michael Lewis’ great book Moneyball, which, on the surface, is a book about baseball, and, particularly about Billy Beane, the General Manager of the Oakland Athletics.

Lewis, who wrote books such as Liar’s Poker, Panic, and The Big Short, is clearly intrigued by fields of endeavor in which individuals succeed because they recognize the value of data when others are operating more by the seat of their pants.  Lewis described a baseball talent evaluation marketplace in which Billy Beane, who was obsessively driven by performance statistics, battled baseball scouts, managers, and coaches who tended to evaluate players based either on their visible physical and athletic skills or the performances these individuals observed.  As a result, when Beane overruled his organization and made decisions based on his statistical analyses, he tended to acquire undervalued talent and get a premium price when he disposed of overvalued talent.

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The title of this blog is meant to provoke thinking about a fundamental dilemma that elected officials in any democracy face: when serving the public broadly means that jobs of a small number of people could disappear, what happens?

We have known for a long time that government is more responsive to a well-organized single-issue constituency, even if the vast majority of voters would oppose the position the single-issue group is taking.  For example, that is why government officials have consistently been reluctant to take on the National Rifle Association, even though the vast majority of Americans favor a more aggressive regulation of guns than is the case today.  I am not making a value judgment about this issue, other than to say that elected officials think of the electorate as a collection of well-organized, passionate special interest groups than they do a mass of voters to which they have to respond.

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I am a big fan of Thomas Friedman, so I avidly read everything he publishes.  In the April 4, 2010, Sunday’s New York Times, he published an op-ed piece entitled “Start-Ups, Not Bailouts.” His main argument:

“Good-paying jobs don’t come from bailouts.  They come from start-ups.”  Will start-ups address our structural unemployment problem?

Yes and no.  They will be a great solution for well-educated, enthusiastic young people who are currently unemployed and perhaps discouraged about prospects for jobs and careers.  Without some additional interventions, they are not a good short-term or even medium-term solution for older workers who have lost their jobs at big companies or government agencies.  As the former CEO of a big company and the current chairman of one start-up business, Dossia, and a board member or investor in several other start-ups, big company or government and start-up jobs and work situations are radically different.

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I saw the movie Up in the Air recently, and, aside from experiencing it as a first-rate piece of entertainment, I found it to be subtle and brilliant in addressing issues I confront in my life.

In it, George Clooney plays an executive named Ryan Bingham, who works for a company that enters into contracts with large employers that have neither the will nor the skill to handle mass terminations themselves, so they outsource them to Bingham’s firm.  The subject matter is painful because the devastation of losing a job has hit so many households. I had this type of experience back in1978 when my law firm told me I would not be offered a partnership.

However, the more interesting aspect of the movie is the way Bingham leads his life.  He travels over 320 days of travel a year, and has built a life in which he gets treated exceptionally well by airlines, hotels, and other service firms, and he has temporary relationships on the road that require no deep emotional commitments.  He has successfully avoided having to deal with the messiness of a family life or maintaining a substantial home base.  In fact, his one-bedroom apartment in Omaha, Nebraska, appears unoccupied, because it is so sparsely furnished.

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I have often been described as a visionary, one who sees things before others do.  It’s a very astute characterization. Being visionary does not always mean being correct, although I have been more right than wrong, but it does mean that the more my assessments and forecasts vary from how others see the world, the more stressful and difficult it is for me to persuade them.

One of my favorite TV shows of all time, Rod Serling’s The Twilight Zone, frequently dramatized the message that people who saw the world differently from others often experienced difficulty and, in some cases, tragedy.  Two of my favorite episodes that made this point powerfully were “Terror at 20,000 Feet” starring a young William Shatner as an airplane passenger who sees gremlins trying to take apart an airplane wing while the plane is in flight, and “The Howling Man” in which an American is recounting a story to his housekeeper about why he is imprisoning a man whom he says is the devil.  In both cases, the passenger and the American seem psychotic and their perspective is disregarded.  In both cases, at the end of the show, they are proven right.

Thankfully, no one has ever accused me of being psychotic.  Unlike the William Shatner character, I did not get carted away in a straightjacket, and, unlike the American in “The Howling Man” the consequences of others not believing me did not result in the devil being unloosed upon the population.  Nevertheless, my experiences have been challenging.

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I was struck by the parallels between a story published this past week and an event I recalled from the recent baseball Hall of Fame voting.  The story appeared in the Saturday, January 9, article in The New York Times entitled “Unions Rally to Oppose a Proposed Tax on Health Insurance.”  The event was the beginning of free agent negotiations between Marvin Miller, the lawyer for the Players’ Union, and the baseball owners in the 1970’s, an event discussed at some length this past week as commentators correctly noted that the Hall of Fame voters’ decision to deny Miller admission is a grave injustice.

What do these two situations have in common?  In both cases, a party to a dispute values continuation of the status quo and control more than they do economic benefit.

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Although I usually post a blog on a public policy issue, this end-of-the-year blog will be a combination of personal, public policy, and business observations. The one thing I can say with certainty is that 2009 evolved in a very different way from what I expected when I stepped down from the Executive Chairman position at Pitney Bowes a year ago.

The only thing that happened as I anticipated was that I would disengage emotionally from Pitney Bowes very rapidly, because that is who I am.  Once I leave an organization, I leave with fond memories, great friendships, and insights of lifelong value, but I leave the organizational responsibilities completely behind.  I am not a person who is nostalgic about what I once had or did, and this was no exception.  Other than that, everything that happened was either a surprise or a disappointment.

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