There were several noteworthy insights from the program:

• The German and Central European film-makers were incredibly innovative, and they sparked the development of many features of American cinema that changed the films Americans saw, especially after World War II, when the industry was free to resume its normal kind of film-making.  Most noteworthy was the development of the “film noir” style of movie.  “Film noir” was a genre of film that usually was done in black-and-white, as opposed to color, presentation.  It was set in harsh urban settings, was a type of drama and action film, and often involved criminals or gangsters.  Films like The Asphalt Jungle, Dark Passage (which starred Humphrey Bogart and Lauren Bacall), and even On the Waterfront could be considered “film noir” movies.
• The filmmakers who emigrated from Germany and Central Europe created funds to help others trapped back in Europe come to the United States.  They not only sent money back to people trying to escape from Nazi-occupied countries, but helped them with contacts and created the equivalent of an “underground railroad” to enable people to get help crossing borders, hiding inside Nazi-occupied countries, and eventually finding their way to friendly countries.  Germany and the countries it occupied saw a huge drain on their artistic talent, but it would not have been as big of a drain as it turned out to be, had not American-based exiles provided a considerable amount of financial support.

As an aside, we underestimate the importance of support from abroad in almost every attempt to rebel against totalitarian governments.  I saw this in the early 1980’s when I walked by the Holy Name Church in the South End of Stamford, Connecticut, a Polish church that was clearly soliciting money from both parishioners and members of the public to support the Solidarity movement in Poland.

• The exiles from Germany and Central Europe brought a particular passion to their roles in certain kinds of films.  Perhaps the most insightful part of the documentary was the presentation of different scenes in Casablanca, and the description of the actor or actress in that scene who had emigrated from Germany or another Nazi-occupied country and their passion for portraying the European experience.  The saddest ironies in films like Casablanca  were that the Nazi characters were often portrayed by Jewish actors, such as Richard Ryen, a German who played Major Strasser’s Nazi aide Captain Heintz, in Casablanca.

The Casablanca stories were inspiring and tragic.  Madeleine LeBeau, who played Yvonne, the lover spurned by Rick, fled France, along with her Jewish actor husband Marcel Dalio, who played the croupier.  They had a very circuitous route to America, having to get to Portugal, to Mexico, and to Canada, before having the opportunity to enter the United States.  S.K. Sakall, who played Carl, the waiter, fled Hungary and lost three of his sisters in concentration camps.

However difficult our lives are in America or in other parts of the world, we should remember that there are individuals today who are living far away from where they started or would like to be living.  Moreover, most of us are not living in a war zone, and we have far more creature comforts than people living middle or even upper middle class lives had 1-2 generations ago.  As I write this, I am sitting in a very comfortable Starbucks restaurant in Darien, Connecticut, and enjoying a great morning cup of coffee (I usually go to another coffee shop, but it is New Year’s Day and nothing much is open here.)

The other lesson I took from this documentary is that we should reconsider our ridiculously restrictive immigration policies.  We should be able to distinguish between criminals and terrorists, whom we do not want to admit to America, and those with great skills and capabilities, who will enrich our country and create opportunities for many Americans lacking those opportunities today.  That is the argument persuasively made in the book Borderless Economics: Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism by Robert Guest.

Finally, we should recognize that an untapped source of support for people in developing economies is the direct transfer of money from individual to individual.  The major, centralized government programs, or even the programs developed by not-for-profit organizations often have too much waste, too many centrally-imposed conditions, and too many intermediaries to be as effective as direct money transfers.  Let’s encourage more efficient money transfer from rich to poor than we do today.

Most of all, as we look ahead to what is often an uncertain and somewhat frightening future, we should take stock of how blessed we are, and how grateful we should be, for those who fought for our freedom generation after generation.

In this case, the employer is the Port Authority of New York and New Jersey, an entity created by a contract between New York and New Jersey and jointly owned by the two states.  This entity is not accountable to elected officers or voters, except for the indirect influence that elected officials from the two states sitting on its board of directors have on the entity’s operations.  Oddly enough, entities like the Port Authority were created over several decades in the 20^th century because elected officials believed that they would operate in a more business-like fashion and not be subject to the corrupting influences of elected officials trying to “buy” votes by bestowing favors on constituents. However, the lack of public accountability means that the customers of the Port Authority, namely those who travel in the New York Metropolitan area, will bear the brunt of the abuses of the pension system.

In one sense, it should be easy to solve this problem: abolish this “pension spiking” scheme in the next collective bargaining session.  However, we get a hint of why these kinds of schemes are so hard to uproot. A toll collector named Princesella Smith is quoted as saying: “I’m blessed. I have a great job, and, in this economy, it’s great that I can cover everything with my eight hours a day and overs.”

Executives and union leaders who both know that paying a toll collector like Ms. Smith $89,599 per year is absurdly excessive also have to confront the fact that, but for her oversized compensation package, she probably would be living in a much more difficult economic situation.  She is a human face to the problem of reducing the government budget deficit.  I found that, at Pitney Bowes and at other large organizations, no matter how well these organizations were managed and how tightly costs were controlled, it was difficult to bring pay into line with what made sense for customers.

The overpaid employee is a real person, often well liked and appreciated for his or her organizational commitment.  While I do not know how good an employee Ms. Smith might be, she is clearly doing a job, collecting tolls on the George Washington Bridge, that few people would choose to do if they had other choices.

Not only are overpaid employees often liked and appreciated, but senior executives often know the families of these employees and the tragedies and challenges the employees face.  At Pitney Bowes’ Connecticut operations, there really are no executives living in enclaves that totally separate them from coming into contact with ordinary employees.  I was highly likely to interact with company employees outside the office. When my second son was younger, the president of the Little League baseball program was a product manager at the company. Our housekeeper’s husband worked at the company. When we went to school events, we would meet parents who were company employees and whose children were friends of our children.

It is easy to blame militant labor unions for fighting to preserve the jobs of overpaid and under-skilled employees.  However, my experience is that these problems would exist in any organization in which executives, voluntarily or otherwise, build close personal relationships with people up and down the organization.

Over time, I developed the skill of confronting people I knew and liked, but who had to leave the company.  I had to convince them that it was not only in our best interest, but in theirs, that we were taking them out of a job, reducing their pay, or in some other way taking an adverse employment action.  I operated on the simple principle that if I could not look them in the eye across a table and justify what we were doing, the action was indefensible.  Thankfully, I never had to make the judgment that an adverse employment action was indefensible when I used that test.

When we teach senior executives to care about employees as individuals, then we create a different problem.  It becomes challenging to look those overpaid and under-skilled employees in the eye, meet them in the coffee shop and deli, see their families in the school events, or run into them on the street, and tell them that you either have to eliminate their job or reduce their pay to bring it into line with what the market pay should be for their job.

Think about the job of a postal worker who manages mail sorting machines.  At Pitney Bowes, we were able to employ and retain people who would do this work at about 1/3 the rate that the Postal Service was paying for the same work.  We were consistent in our pay practices with the real market for this job.  The Postal Service’s pay rates were artificially high, both because of a collective bargaining agreement, and because of the political pressure that postal union workers could bring to bear on elected officials.

The concept of a “living wage” is that people must earn enough in any job to be able to afford a standard of living above the federal poverty line.  However, what “living wage” advocates forget is that the “living wage” movement would result in fewer jobs and more expensive products.  As I look across our economy, I see many candidates for job eliminations if wages for that job get too high, not the least of which is the toll collector job.

When I go to large retail grocery stores and pharmacies, I am increasing seeing self-service stations, including some at the checkout counter.  When I go into bathrooms, I see electrical hand driers, which clearly replace the job of transporting and stocking paper hand towels. Postal sorting machines have replaced most postal clerks who sort mail.  Automated banking kiosks replace tellers, as other vending machines provide 24×7 service in place of retail clerks.

The largest job elimination trend, which particularly comes into play at this time of year, is the substitution of online shopping for retail purchases.  In past years, my wife frantically traveled from store to store to buy Christmas gifts.  Today, she sits with her computer and orders everything online.  While the merchants that deliver in response to online orders certainly employ people, fewer people are needed for online transactions, compared with their retail counterparts.

In essence, the labor union and “living wage” movements, whether they want to admit this or not, are hastening the elimination of the jobs they are trying to protect and enhance. They will win for a few years, but eventually the desire for consumers to get the highest level of convenience and value at the lowest cost will override the desire to protect someone else’s overpaid job.

Whether he made a values-based judgment that he had simply received a windfall and did not deserve to profit simply from being in the right place at the right time, or whether he believed that he would receive more long-term economic benefit from giving up the ball does not matter: he did an admirable thing.

Everyone’s behaviors are on a continuum from being totally generous of spirit to others to being totally mercenary and interested only in helping oneself.  To be generous of spirit does not mean that one withdraws from the capitalist system, lives like Mother Teresa or Paul John Paul II, and deny or give away everything material.  A person whom I consider an example of practicing behaviors that are generous of spirit, and whom I have always admired, and got to meet by serving briefly on a board of directors with him, is Neil Armstrong, the astronaut who was the first person to walk on the moon.

His behavior that I would consider exceptionally generous of spirit is his refusal to engage in any behavior in which he personally profited from his status as the first person to walk on the moon.  He could have made millions of dollars in commercial endorsements from his lasting fame and celebrity, but he steadfastly declined every opportunity to do so. He has lived a successful life and is a wealthy person, but he recognized that many people contributed to his accomplishment as an astronaut and that he should not draw a disproportionate benefit from it.

I have aspired to be more like Neil Armstrong in not trying to extract maximum economic benefit everywhere I could.  I have given free advice to many people for which they would have paid thousands, or even tens of thousands, of dollars, or arranged introductions that have resulted in financial success for others without receiving any short-term economic benefit, even when I was not financially secure earlier in my life.  I did well financially, although I could have done better.  I never once negotiated my own compensation package, even when others around me negotiated theirs.

I have met many people who have given generously of their time, their insight, and even their services and not asked for anything in return in the short run.  I have also worked with people whom I know could have driven harder bargains with their employers.  I admire athletes like Hall-of-Fame baseball player Tony Gwynn, who stayed in San Diego and made far less money than he could have made with many other teams.  I also admire teachers who have stayed in seniority-based public education compensation systems and foregone great opportunities to make far more money in corporate training and education positions.

At the same time, I have experienced extreme distaste and stress by encountering people who think of the world as a place in which they have to extract compensation for every deed with economic value and have to extract as much as the market will allow them to extract.  People who expected to be compensated for everything they did were very common in New York.  Many jobs only made economic sense if the jobholder could get tipped consistently.  However, there was a broader philosophy that no one ever did anything for others without getting paid for it, and closely related to the fact that everything could and should be compensated was a philosophy that everything was for sale.

I remember the scene in the 1991 film Goodfellas, in which the protagonist Henry Hill takes his future wife on a date to the Copacabana.  From his car to his front-row table, he passes many hotel and restaurant workers and hands out money to every one of them.  The front-row table clearly would not have been available to anyone else.  It was moved into place and set up especially for Hill and his date.  That scene was director Martin Scorsese’s depiction of a culture in which everything was for sale and that such a culture was so ingrained that it was a regular part of everyone’s daily routine.

In 1980, the 12-year-old son of one of our neighbors regularly cut our lawn.  He was receiving what we thought was a fair price for his services.  He tried to double his price, and when we asked why, he said that his parents told him to see how much he could get from us.  He was told that if we objected, he could negotiate downward, but that he should try to maximize his short-term return.  We never employed him again, and I sent him a note telling him why.

What the Christian Lopez story reminded my wife and me about ourselves was that we are people who believe strongly that our capitalist system works best when people give value without expecting to be paid top dollar immediately for everything they do.  George Gilder, an American writer, philosopher, and Republican activist, wrote a powerful book in 1981 entitled Wealth and Poverty, in which, among other things, he described capitalism by saying that it “begins with giving.”  What Gilder meant was that capitalism, by its nature, requires one or more individuals to expend capital at a point in time and to provide goods and services for which he or she will get rewarded at a later point in time.  Capitalism requires an act of faith that investment will yield later reward.

To the degree that everything someone does requires immediate reward, the capitalist system collapses.  Such a system usually does not enable the granting of credit, except in a very close circle of family and friends.  Credit given to people one does not know is essential to the optimal growth of an economy.

Unfortunately, America has moved progressively toward a country in which there is more and more distrust, and more of an expectation of immediate gratification and maximum economic reward.  Some of this is a result of an increasingly mercenary society.  Some of it is the result of people being influenced by others to become more mercenary than they would be on their own.  Sadly, some people have become more mercenary as they have become more financially desperate.

I was saddened by the experience with the 12-year-old boy. He seemed liked an enterprising young person who could have been generous of spirit, but whose mind had been poisoned by his parents, with whom we ultimately had a dispute on unrelated matters.  I do not know what effect, if any, our refusal to continue to do business with him had on his values, but I suspect that his parents probably found a way to deflect the blame for that situation on to us.

It is reassuring that there are people like Christian Lopez in the world.  He did the right thing.  He may, or may not, ever receive economic benefit comparable to what he gave up. However, if he lives the rest of his life with values consistent with those that led him to make the quick decision to return the ball to the guy who truly created the potential for its economic value, Derek Jeter, he will live a far more satisfying life, and he might even be more financially successful than he otherwise would have been.

Here’s to you, Christian Lopez!!!

Nevertheless, I grew up reading about historical figures like the Roman leader Cincinnatus who left his farm to serve in a leadership position, fulfilled his public responsibilities, and then returned as quickly as possible to his farm and his family.  George Washington was admired because he completed his two presidential terms, and then went back to his Virginia home.  Both of these leaders represented a set of values which placed public service above personal ambition.

My dad was a member of the International Typographers Union, which was noteworthy because it had term limits for union leaders.  I have also admired great companies like UPS because they have had implicit terms limits by enforcing early retirement rules for CEOs. I attempted to stay consistent with these values by retiring well before I could get drawn into believing that Pitney Bowes could not survive without me.

Public service has changed from a temporary service environment in which a very broad range of people are drawn upon for their expertise, their diverse perspectives, and their vision of the common good, to one in which a smaller, more ideologically rigid, less diverse, and more partisan group of people have established themselves as part of a relatively permanent government bureaucracy.  This is true of elected officials, appointed officials, government union leaders, and civil service managers.

Government at all levels has become like joining a fraternity in which there are vicious hazing rituals, exclusionary admission practices, and an isolation from people outside the fraternity once a member gets admitted.

This did not happen at once, but it’s time to take a brief look at where we are today.

Running for office or being considered for appointive office

A candidate for elective office opens himself or herself to every possible form of disparagement.  We need to be held accountable for our decisions, but the ability of opponents to disparage us or any member of our immediate and extended families without any accountability is outrageous.

This is an unintended consequence of a 1964 U.S. Supreme Court decision Sullivan vs. The New York Times, in which a plaintiff lost a defamation case because the Supreme Court held that, in the pursuit of free speech, defamation claims by “public figures” were subject to a much higher standard than claims by ordinary citizens. This much higher standard of liability made it almost impossible for public figures to sue those who disparaged them falsely.

The ability to “terrorize” someone running for office or being appointed to an office is far greater than ever.  The First Amendment framers could not fathom capturing an individual’s random remark with a digital video camera, posting it globally and permanently within seconds, and building a disparagement campaign around it.  In fact, dirty tricksters follow candidates to provoke them into intemperate remarks to post them online.

We have also created such a complex set of disclosure, campaign finance, and election laws that we have increased the cost of running a campaign exponentially, or even the cost of being considered for an appointive office. Incomplete, false, or misleading disclosures, especially of financial data, have been criminalized. What is disclosed becomes the raw material for further disparagement.

Much character assassination that occurs at the national, state, and local levels relative to government officials is a kind of violence, or, if not a directly violent act, an invitation to violence by others.

Throughout history, democratic societies have been served by the collective wisdom of imperfect people in an imperfect, but effective, system of government.  I worry about the effectiveness of a person whose life is so devoid of imperfections that he or she could pass through every conceivable public screen.

Being an elected or appointed government official

Even if an individual survives the rigors of either a political campaign or a high-stakes appointment process, we have made many incremental decisions that have crippled the ability of government officials to have a significant impact on the entities they lead.  Our civil service system, combined with collective bargaining for a sizable percentage of the government workforces, has created a long-term set of stakeholders that will outlast any elected or appointed official.

I strongly support civil service. The most compelling logic for civil service reform was to insure that government had a system for selecting as many jobs as possible on the basis of merit, not political affiliation, and that there be knowledge and experience continuity in the middle and first-line management ranks during senior leadership transitions.

The key to making civil service systems effective is that the system be designed to retain people with good experience, knowledge, and judgment, not to protect incompetent or even immoral managers from being terminated.  It is virtually impossible to take effective disciplinary action in any reasonable period of time against a non-performing manager in most governments.

If an elected or appointive official is blessed with competent and motivated people to make decisions and carry them out, that leadership cadre has very difficult obstacles in getting anything done. Requirements for open meetings significantly reduce candor required for good decision making processes to take place.  We do not share publicly every half-formed thought we have, especially on important issue.  We have private conversations with people until we have a good sense of what we want to say publicly.  The notion that even preliminary discussions must be in public is an over-reaction to the Nixon White House crimes, not a rational way to run government.

When I was growing up, we used to hear about decisions being made in “smoke-filled back rooms.”  Today, the back rooms may no longer be “smoke-filled,” but they exist, and they take place outside the regulatory reach of a government meeting.   Even in government, there needs to be a zone of privacy in which leaders can have small conversations in which they can formulate their policies and actions.

The other craziness with government is the obsession with process for its own sake.  Back in 1991 through 1993, I chaired a public-private task force appointed by Governor Lowell Weicker to implement the 1990 Clean Air Act amendments for large Connecticut-based employers.  The task force was filled with the best-qualified people, and it functioned very efficiently and completed its work within a relatively short period of time.

The task forces in which I participated over the last three years were larger, more cumbersome, and much less efficient or effective.  There was a much higher level of distrust and many more stakeholders felt that they had to be represented.  The groups became larger and the meetings degenerated from problem-analysis and problem-solving sessions to a series of speeches made by each participant.  The participants no longer saw themselves focused on the best outcome for the public, but for the group they represented and on whose behalf they were selected.

The other set of issues that make public service challenging were those associated with getting changes made.  We have made so many more processes subject to elaborate reviews, comments, and litigation challenges that it is extremely difficult to get anything done.

For example, we cannot renovate a bridge or road or rebuild it, even when it desperately needs renovation, without spending years studying the problem.  There has been a broad consensus for at least two decades, that the Tappan Zee Bridge over the Hudson River desperately needs rebuilding, but the processes for getting the work done are hopelessly complex and time-consuming.

We also overcomplicate what should be simple processes.  When I chaired the Governor’s Commission for Reforming the Connecticut Department of Transportation, I discovered that the State had made the hiring of an administrative assistant so complicated that the hiring manager had to interview all 28 qualified candidates, rather than the top 3-5 candidates.

Getting rid of non-performers is equally cumbersome.  My Reform Commission members who ran government agencies told me that the average time to terminate a non-performing civil service employee was 18 months, if the agency did everything perfectly.  This is ridiculous.

How do we solve these problems?

• Recognizing the problem is a start.  When good people are discouraged from joining public service, something is wrong.
• We should relook at every law, regulation, process, and procedure to determine whether it serves its intended purpose, and, if so, whether there are excessive side effects.
• We probably need to relook at the First Amendment, as it relates to the way the Internet and modern digital media amplify the effects of false statements, or even true, but misleading, statements.
• We need to retain the civil service system, but assess whether there is a point beyond which the protection of employment and of existing processes does not serve the ultimate merit-based system goal.
• We need a nationwide effort led by the President to rebuild trust among Americans.  Many dysfunctional processes are built on distrust.
• We need to reexamine campaign finance, election, and lobbying laws to see if they violate the rights of Americans to exercise their First Amendment rights.  The Supreme Court case last year that struck down some campaign finance laws is a good start in provoking a national debate on the harmful effects of these laws.
• We need to reduce the criminally punishable financial disclosure and background questionnaire laws that discourage public service.

Whole industries and marketplaces, and often political and social paradigms, depend on people willfully denying reality.  In health care, the stubborn myth is that more care is always better care.  This myth enables health care providers to make more money, not have to make tough end-of-life decisions, and appear to be giving the patient what he or she wants.

Excessive care often puts the patient in worse position than if no care were given.  Many drugs are ineffective and have negative side effects. In certain cases, aggressive cancer treatments shorten life. Surgeries not only do not correct the problem for which the surgery is done, but create other complications.  The Dartmouth Atlas Survey, which was created by Dr. John Wennberg, has demonstrated over several decades that there is no relationship between the intensity and cost of health care across regions and the health outcomes.  It often happens that we spend more and get less for our money.

We willfully deny this self-evident truth, because, if we acknowledged it, we would have a health care system with different winners and losers.  Many high-cost health care regions would lose revenues and jobs.  More painful end-of-life conversations would have to take place. Society as a whole would be far better off, but many individuals would have painful readjustments.

Similarly, in the film industry, there is a deeply imbedded view that commercial success for films is totally random.  It is best reflected in how many people have interpreted a famous quote by William Goldman, an author and Academy-Award winning screenplay writer: “In the end, nobody knows anything.” Goldman meant to point out that making commercially successful films is an art, rather than a science, and that there are no guarantees of success.

His thoughtful observation has been distorted into a view that commercial success is totally random.  This view of success as being random is insidious because it denigrates the value of intelligent planning and execution, as opposed to the seat-of-the-pants decision-making many people make.  It turns every filmmaking endeavor into the equivalent of playing the exceptionally low-odds Powerball lottery. It also justifies making no significant changes to what intelligent film industry executives know is an unsustainable business model.

The unpredictability myth enables some to resist any changes in business practices that would increase predictability and likelihood of success.  Companies like Epigogix, which offers predictive modeling on film screenplays, and Opera Solutions, for which I am an advisor, which provides data analytic solutions for increasing the yield on film recommendations to customers, prove that, while results can never be guaranteed, the odds of success can be significantly improved.  There are many film industry executives who have developed extremely workable and intelligent business models, but what has made them successful has not been universally understood or copied.

Among politicians, a similar, deeply imbedded paradigm is that success is a result of luck.  Politicians, many of them far left Democrats, refer to taxes that redistribute wealth as “progressive” and as “ways to help the less fortunate.”  To them, the difference between success and failure is a function of how lucky breaks are distributed.

Success is a combination of smart decisionmaking and luck.  Malcolm Gladwell, in his book Outliers, argues that Bill Gates’ success was heavily influenced by computer access he had at his prep school.  He also gives many other examples of people who had similarly privileged access to resources needed for future success.  Bill Gates clearly had an opportunity not available to many Americans in the 1970’s.  However, Gates was not the only student at that school.  Others had the same access, but he was the only one who took full advantage of it.

In my life, becoming the CEO of Pitney Bowes involved a great deal of luck.  However, my work, and the assistance I received from family and friends over a lifetime, enabled me to benefit from the lucky breaks when they came.  I worked hard, deferred many gratifications, and experienced a lot of resentment from those who chose not to work as hard.

Other than lottery winners, there are no instant successes.  Many so-called “overnight successes” are really cases of people who have labored for years to be ready to take advantage of the one big break.  I wrote about this in a blog some time back about the difference between the way Bill Wyman accurately chronicled the Rolling Stones’ success, compared with how popular media described it.  Popular accounts of the Rolling Stones’ origins focus on the early partnership between Mick Jagger and Keith Richards and imply that there was instant chemistry and genius yielding early success.

Wyman, a founding band member, told a different story.  The individual band members toiled for years as solo performers and members of other bands.  They experimented with different musical styles, inspired by artists like Lonnie Donegan who led the way with musical pieces that combined multiple musical genres. The Rolling Stones did not achieve instant success, but built the foundation for what appeared to be instant success after the Beatles led the way in the U.S. in 1964.

Even those cases of performers “discovered” decades ago in various Los Angeles area soda shops, such as Lana Turner at Schwab’s drug store, often leave out the foundational processes that led to the “discovery” or that followed it.  Turner grew up under very difficult circumstances, being born in Idaho and moved to San Francisco as a child, and worked hard to be ready for her break.  She made a number of gutsy decisions, including a decision to leave one studio and join another as a teenager.

With the exception of lotteries and those smart enough to take their casino winnings and save them, there are relatively few cases of lucky, overnight sustainable successes.  When people get lucky and win lotteries, they often are unprepared to deal with the consequences of success and either lose their money over time or experience huge disruptions in their lives. A great TV show in the 1950’s The Millionaire, depicted people presented with a tax-free million dollar check (comparable to $10 million today) from an anonymous donor, who often struggled to live with their newly-found wealth.

Adherence to myth is unaffected by one’s level of education and wealth.  Many educators with advanced degrees adhere to the myth that, if only we gave teachers and schools more money, the quality of education would improve.  Clearly, good educators would benefit from having more resources.  However, giving a poor or mediocre teacher a higher salary and smaller classes with more equipment and supplies in a nicer facility will not turn that individual into a better teacher.  Moreover, someone ill-equipped to teach does not get better with experience.  Teachers’ unions and other advocates of more education funding would be much more credible if they acknowledged that many members of their profession do not belong in it.

What do we do about these persistent myths?  First, acknowledge them in a non-judgmental way. Second, recognize that, if there is economic dislocation from changing a paradigm, such as the amount of health care we deliver, the way we evaluate potential feature films, and the way we fund education, we need to anticipate and address that economic dislocation.  Unfortunately, people rely on the rules of a marketplace, a business, a government, or a system, and we need to transition them to some degree to a new system. In the transformation of electric utility service, we call these obsolete systems “stranded costs” and we develop plans to pay for phasing them out. All this obsolete health care, education, and government infrastructure is a “stranded cost.”

Most important, we need to recognize that every myth or paradigm is a temporary way of thinking about the world.  We must stop reinforcing the notion that there is a fixed way of thinking about the world that, once learned, will give someone a permanent advantage.  Experience is valuable, but the most important lesson that we need to recognize is that, sometimes, experience gets in the way of insight.  The art of being successful is knowing when experience is useful and when it must be discarded.

Life is inherently uncomfortable and insecure.  We should not teach our children to seek security and certainty, but to build resilience, continuous learning skills, and the capability to address the widest range of life’s challenges.

The assumptions underlying many of our health care policies are that people are most motivated to do what is healthy for them and their families, and if we could only get them good information, and good and affordable care, they would do the right things.  Unfortunately, the reality is much more complex.

As the Duerson case, as well as many other cases involving athletes, show, many athletes deliberately engage in unhealthy and dangerous activities because they value the experience, and, to some degree, the money that comes to them from playing a sport at an elite level.  By the way, I do not think money is the prime motivator.  Otherwise, why would scholastic and college athletes engage in the same destructive behaviors as their professional counterparts?  Also, if we go back several decades in any professional sport, the financial rewards for professional athletes were not that great, but they still played violent sports.

What struck me in a TV interview with Duerson’s wife and son was the comment by his son that Duerson had died because he played a sport he loved and experienced one of the highest accomplishments an athlete can have: being part of a world championship team.  If we were to turn the clock back to the beginning of Duerson’s career and tell him that playing professional football would so damage his brain that he might commit suicide by age 50, it is unclear whether he would have made a different decision.

Similarly, many athletes become heavy users of performance-enhancing substances, despite strong evidence that those substances eventually destroy their health, because they believe that the substances will give them a competitive advantage, or, at worst, allow them to stay even others also using performance-enhancing substances.  The only thing that has changed in the last several decades has been the substance of choice, but the propensity for many athletes to seek out an extra edge has not.

In the rest of the population, we have found that every person has life goals and priorities, of which health is a contributor or an inhibitor.  People cannot relate to “optimal health.”  They can only relate to the benefits optimal health brings to them, or the problems that less-than-optimal health creates for them.  Why does this matter?

If we are to use the many tools available to us to make people healthier and reduce our society’s runaway health care costs, we need to tap the more fundamental behavioral motivations that drive their health decisions:

• The 50-year-old who has just had triple-bypass surgery may be more receptive to giving up tobacco usage, because failing to do so may be fatal.  However, the more fundamental motivation for that individual may be more concrete, like the desire to care for grandchildren or to pursue pleasurable activities.
• The 25-year-old single woman probably cannot be induced to give up smoking by making her afraid of lung cancer, especially since smoking usually makes people thinner than they would otherwise be, but if it reduces her chance of marrying the person of her dreams, she will find a way to curtail her tobacco usage.
• The teenager who drinks alcohol is more likely to be motivated by the desire to be accepted by peers than by whether alcohol consumption is healthy or unhealthy.

What does all this mean?

• To a significant degree, we have to supplement traditional health care system tools with personalized coaching that helps an individual figure out his or her deep life goals and that helps further those goals through healthy behaviors.
• The coaching may be face-to-face, telephonic, or even online, or some combination of all of these methodologies, but it must be tailored to how a coach might build trust with individuals to help them live healthier lives, while pursuing their life goals.
• The source of coaching will vary by person.  Over the years, I have found that it can be peers, nurses, pharmacists, doctors, behavioral health counselors, psychologists, mentors, supervisors, parents, siblings, or revered relatives or members of the community.  Most people have several sources of trust.  The sooner those trying to help individuals be healthier can find those trusted sources and match individuals to them, the better.
• Sometimes, changed circumstances also change life goals.  Earlier in life, individuals are motivated by wealth accumulation, the desire to start and build a family, or the desire to get secure employment and build a career.  Later in life, financial security, retaining connectedness to loved ones and the desire to have accomplished something meaningful matter more.  Matching health goals with life goals is an ongoing process, not a one-time effort.
• Everyone has life events that shock them into making changes in their behaviors, whether the event is a divorce, becoming a parent, losing a job, having an accident, or getting diagnosed with a life-threatening condition.  Health counselors need to understand how those life events alter life goals and change the health coaching patterns.
• As individuals are either too young to have life goals and are very dependent on parents or other guardians, or too old to care for themselves, the health care system needs to recognize that there are individuals who will have far more influence on an individual’s state of health and wellbeing than the individual himself or herself might have.

As I have learned more about Dossia, the personal health record platform, that we offer through the Dossia Service Corporation, it has become clearer that, while we can be successful in empowering individuals to manage health and health care to a degree by providing information and insight, there need to be other motivators, such as financial incentives, recognition from winning games and contests, and the ability to engage in more life activities.  We can offer Dossia as a standalone data repository, but its greater value derives from its integration with broader life goals to which optimal health contributes.

Most people would agree that government has certain roles as a provider of security, a deliverer of basic services, a regulator, an enforcer of societal norms through criminal and civil laws and the court systems that enforce them, and a provider or a creator of certain “safety net” services, such as unemployment compensation and welfare.

There may be people on both political extremes who either believe the government has a broader role, such as redistributing wealth and equalizing income (the far left) or that government should have a much narrower role (the far right).  However, most people would conceptually agree on the various roles of government, and, therefore, would agree on what purposes should trigger the collection of taxes.

What has broken down in the last few decades and called our tax system into question is the fact that government has failed to fulfill its traditional missions well.  I believe there are three reasons for that, aside from the hyper-partisanship with which we are all familiar:

• Lawmakers have made a decision, which I believe to be mistake, to take traditional governmental functions and expand them to serve additional and unrelated goals.  For example, we have taken the government purchasing function, which was originally designed to acquire goods and services with the best value at the lowest cost, and stretched it beyond recognition to serve additional, unrelated, and arguably socially worthy goals like increasing employment diversity of government contractors, forcing government contractors to pay “prevailing wages,” or requiring certain contractors to unionize.  Whether these goals are truly valid and meritorious is not the issue, although some, including me, would argue with the way “prevailing wage” rules have been interpreted and enforced, and unionization has been imposed on people; enforcing them through the government’s purchasing power hides their implementation from public scrutiny.
• We have become so distrustful of government that we have gradually added more procedural steps to protect against “corruption,” or “arbitrariness,” “financial mismanagement,” or “secrecy.”  We have added steps to protect individuals, families, or organizations against government decisions, with the result that the cumulative effect of all these procedural steps is to render government slow and ineffective in delivering its core services.
• Lawmakers have made government a provider of “middle class” employment even if the jobs government creates for individuals would not merit a “middle class” paycheck in any other employment sector.  The problem has been compounded by collective bargaining agreements that prevent government officials from eliminating individual jobs or categories of jobs in a way in which individuals are involuntarily terminated. The “middle class” job commitment extends to employment benefits, some of which, like retiree benefits, when added to a “middle class” pay package, take the cost per job up to what Americans would normally consider “upper middle class.” For example, the 44-year-old Yonkers police officer who made $75,000 per year in his second last year of employment would be considered as holding a “middle class” job earning a “middle class” salary.  When he earned $148,000 , with the benefit of overtime pay, in his last year of employment, and triggered a $100,000 per year pension benefit for the rest of his life after age 45, the combination of his pension and retiree medical benefit turned his position and his pension and medical benefits into an “upper middle class” level of cost overnight.

In most cases, the decisions that make government ineffective and cause Americans to rebel against paying taxes to enable government to get bigger or even stay the same size are made one at a time, and their cumulative impact is not understood until it reaches a critical mass.  That is what happened over the last two years, and why the Obama Administration and the Democrats who supported the President were so soundly defeated in the 2010 elections.  We crossed a line beyond which Americans were saying: “Whatever has been done has gone too far.”  They are communicating that government has to shrink or, in the alternative, become far more effective in fulfilling its core missions. The message Americans are sending is quite simple: we are unwilling to pay more taxes when we are not getting anything sufficiently good for them.

The recent tax legislation reflects another failed premise of government today: governments do not stimulate long-term economic growth solely by lowering taxes broadly or selectively.  Lowering taxes can eliminate a financial obstacle to the creation or growth of businesses that would otherwise take root.  However, businesses get started or grow bigger because they offer goods and services the public wants to buy.  People get employed because they have skills the marketplace needs.  Simply making more money available will help businesses at the margins, but it cannot overcome an unemployment problem largely caused by the fact that many individuals have obsolete or inadequate skills.  The businesses will start and grow, but getting people who are unemployed back to work will require multiple steps and take a long time.  They will need new skills, and to be more flexible in their career paths, and to be passionate about lifelong learning.

That comment has not only stuck, but seems more astute than ever.  I have been both more admiring of people who stick their neck out, and more frustrated with those who should, but do not, when tough situations occur.  In the last few years, we have moved into the most difficult economic environment since the 1930’s.  It has effectively “smoked out” whether people want to embrace tough decisions and engage others in constructive conflict, or whether they will develop even more elaborate ways to avoid those decisions.  I have seen more of both kinds of people in the last three years than ever before, especially the non-performers who have learned to survive by “pretending” to perform.

Most commentators who worry about the U.S. global competitiveness focused on the poorly educated and unskilled part of our population, and they are right, to a degree, to do so.  We cannot have half our population poorly prepared to compete in a global economy.  However, what might be an equally large problem is that a good chunk of our educated population is drawing high salaries while being unproductive.  Our problem is not only the uneducated and unskilled parts of our population, but also the educated and skilled parts that “pretend” to add value, but do not.

I have worked with three highly unproductive, inefficient sectors of our economy in recent years: health care, government, and, more recently, the entertainment industry.  In all three sectors, there are some common elements that drive a lack of productivity:

• People in key leadership positions not only are not held accountable for results, but work actively to prevent stakeholders from getting data that would allow stakeholders to figure out whether these leaders are performing and adding value.  In health care, providers fight hard to keep performance data from being collected and published, so patients and payers can figure out who is good at delivering particular kinds of health care. Government unions are militantly opposed to having voters get financial reporting to describe what government is spending, based on generally accepted accounting principles, something Connecticut Governor-elect Dan Malloy has encountered with his promise to deliver greater transparency.  In the entertainment industry, there is actually a term for the deliberately confusing and complex accounting film studios do to prevent investors and shareholders from figuring out whether a film is profitable: “Hollywood accounting.”
• All three sectors have many well-educated people who attend conferences, give speeches, hold meetings, and develop complex analytic systems, but with no visible benefit.  I do not want to convey the impression that nobody in these three sectors is productive or makes worthwhile decisions, but those who are productive have to work around and battle the large lumps of people who are not. As a person actively entrenched in both the health care and the entertainment industries, I am astounded by how money and time goes into conferences to explain laws and regulations, to describe theories of how the world should be, and to allow people to socialize and network, with no apparent benefit for the organizations of which they are a part.
• In all three sectors, many people unconsciously, but deeply, fight change with vocabulary and conceptual frameworks that are obsolete, flawed, and often intellectually dishonest.  During the so-called “health care reform” debate, we saw some Democratic proponents of the legislation consistently use the term “health care access” when they really were referring to “health insurance access.”  An insurance card is not the same as a doctor’s appointment, but they did not care.  It was in their interest to confuse the issue.  Republicans were equally culpable in using the term “death panels” to confuse the issue of end-of-life decision-making.

In government, elected officials who advocate higher taxes to transfer money from “the rich” to “the middle class” and “the working class” are really advocating that money get taken from a public that has uncertain loyalties and is hard to solicit for campaign funds and transferred to unionized government employees who can be tapped for campaign contributions through union political action committees and to other special interests.

In the entertainment industry, there are many myths about how unpredictable success is, but those conceptual systems really justify a business model that allows major studios to continue to fail more than half the time.  There are many examples of consistently successful filmmakers, like the African American filmmaker Tyler Perry, whom the studios refuse to understand and refuse to copy, because shareholders of those studios would not need the overhead they create.

• In all three sectors, money keeps flowing in, and the sectors continue to consume a disproportionate share of the economy.  However, the distribution of financial rewards is skewed in some dysfunctional directions. The main problem is that, in all three sectors, there are many decisions made to keep organizations going solely to keep people employed.  In health care, it is almost impossible to close a poorly performing hospital that delivers poor quality, because the hospital is usually a major employer.  In government, it is very difficult to lay off unproductive performers.  Governments provide voluntary termination packages, which are poorly targeted, but they do not close down unproductive operations.  In the entertainment industry, the large studio production lots are used infrequently, but they remain in prime Los Angeles area real estate.

These are not the only sectors plagued with well-educated, unproductive people.  People in many large Fortune 500 companies have high-paying jobs, particularly in the legal, accounting, and consulting professions, and maintain their employment by being highly creative in keeping other people from getting things done.  Compliance activity keeps growing, and more time is spent in boardrooms and executive suits complying with the latest fad of the day.

One of the reasons we like professional sports is that it is one of the only business sectors in which there is no room for unproductive people.  As someone who is most exposed to the New York media, I am struck by how brutally the sports pages critique performance of superstars like Derek Jeter, contrasted with how the front pages report on how we tolerate schools that successfully educate a small portion of the students who come through them.  Athletes are paid a lot of money, but even when they are not, such as college athletes, their performance is closely scrutinized.  Performance metrics are not only thorough and detailed, but they keep improving.  There is no sentimentality or pity for poorly performing athletes; they lose their jobs and are expected to find some other line of work if they cannot succeed.

There are no “pretenders” in sports.  We have to eliminate the tolerance for highly paid “pretenders” in the rest of our society.

I was effectively unemployed once in my life, for about a 4-month period  (January, 1979, through May, 1979) between my second law firm job and my hiring by Pitney Bowes.  I was told in October, 1978, that I would not be offered a partnership, was given a few months to look for a job while on the payroll, and then was put in an “of counsel” status, meaning that I would be hired only for hourly project work. I had a little work, but nowhere near enough to support my family.  It was initially scary, and I felt all the self-doubt that Ms. Rampell described in the people she profiled.  When I became unemployed, despite a Harvard Law degree, I did not know when I would be hired to work again.

The economy was not in as bad a shape as it is today, but we were dealing with the second Arab oil boycott, so the economy was troubled, and unemployment rates were relatively high. We were in a studio apartment and were living very frugally, even though my wife had a full-time job.

There was a turning point in my search for work and my redefinition of my approach to getting reemployed.  I went to New York City for a full day of interviews in January, 1979, and was treated extremely rudely by just about every one of the six firms with which I interviewed.  I even had the senior partner of the last firm with which I interviewed tell me that my firm was “not a household name” in New York, that I might go to work for a corporation, which was a job for people who “could not make it in a law firm world,” and that living in Chicago was “living in Queens,” which, to him, was an insult.  I was insulted in every way a person can be insulted during that day, including being told that my experience was “thin” and “did not qualify me for any meaningful law firm job.”

I came back to Chicago and had the insight that I was addressing the problem completely the wrong way.  I was looking for existing jobs in firms for which there was ferocious competition.  Many other people wanted the same jobs, and, therefore, the partners could afford to be nasty because they could still get candidates.  I remembered all my life that people were often nasty when they had maximum leverage over someone else.  When they needed someone’s help, they did not tend to be nasty.

I realized then and there that I had to look for work in places where there were more jobs than people to do them.  The alternative I chose was the corporate legal department. I began doing research and discovered a list of companies at which I might want to work, and had Pitney Bowes on the list.  Through a chance conversation with a legal recruiter, I found that Pitney Bowes was looking for a lawyer, and I was willing to work within their budget parameters, something they could not find in the New York law firm candidates they had previously interviewed. I was eventually hired.

What lessons can we draw from my experience?

We need to train people to look for work that needs to be done, not to find a “job.”

A “job” is the bundling of a group of tasks by an employer to help it identify what needs to be done, who might be qualified to do it, and how much it should pay to secure a candidate.  “Work” consists of tasks which one person either cannot perform himself or herself, or would prefer to hire someone else to perform.  By the time “work” is organized into a posted job, the supply of applicants exceeds available jobs.  When “work” has yet to morph into a “job,” demand for workers exceeds supply.

There are two sets of tasks for which my wife and I hire people:

• Tasks that require skills we do not have, such as the troubleshooting of problems with our in-house wireless router system or our Mobile Me software; or
• Tasks we could do ourselves, but that require a great deal of time to perform, such as lawn care.

There are  other tasks that arguably fit into both categories, such as tailoring and weaving: we could learn to perform them, but it would take time to develop the skills to do so.  We pay people to shorten or lengthen pants, to let out or take in waists, or to repair a hole in a pair of pants.

We do not create a “job posting” for these tasks, but we are willing to pay competent people to do them.  In fact, there is a large quantity of work tasks people perform every day that have not ripened into posted “jobs” and may never ripen into “jobs” because they are tasks that change over time.  Some fit into the category of what we would call “handymen” tasks, that is, tasks assigned to someone who is ready, willing, available, and trusted to perform whatever tasks are needed.

Instead of treating unemployed people as “victims” of unemployment who need benefits, retraining, or “jobs,” we should train them to identify tasks that need people to do them, and to make themselves able to perform those tasks.  Marketers call these needs “pain points.” We need to train unemployed people to find out other people’s “pain points” and to figure out which ones they can address with the skills they have.

We should train people to think about tasks where there is a shortage of people to do the work, and to learn how to perform those tasks.

The best evidence of skills shortage is what we are prepared to pay per hour for someone to do a job.  Today, computer support people at the Geek Squad charge $120 per hour, with a minimum of one hour commitment, for telephonic or onsite computer-related support.  This is clearly an area of opportunity for an unemployed person.  Someone can work for someone else for $60 an hour, and, if reliable and competent, can get repeat business until the Geek Squad and its competitors reduce their prices to a much lower figure.

My experience with these technicians is that technical skills are less important than following trial-and-error processes which anyone can learn.  More important than knowledge of technology, which can be learned easily, is the ability to go to someone’s home or place of business and do the laborious work of diagnosing a problem.  Fixing it is usually the easy part once it is diagnosed.

It is not difficult to figure out where there are skills shortages in any community.  Auto mechanics are in short supply almost everywhere.  Tailors and weavers are in short supply.  Shoe repair people are in short supply.  While auto mechanic activity requires several months of training and an 8^th grade level of technical education, tailoring, weaving, and shoe repairing do not.

Back in the early 1960’s, my dad saw a need for TV repair people in Rochester, New York, tool a course, and started taking in work.  For several years, we never had to fight about who would watch which program, because we had multiple TVs, only one of which was ours.  My dad would repair a TV in one day, and keep it for one additional day, which gave us opportunity to watch the extra TV.  Those kinds of opportunities exist today, probably in the computer and consumer electronics markets.

We should train people to think about a broader geographic market for their goods and services.

My younger son worked as an online seller of used items he secured from people’s basements and attics.  During the depths of the Great Recession in 2008 and 2009, there was a huge market for one group of people to convert unused possessions into needed cash, and another group to buy used, but perfectly good items, at a significant discount to stretch their cash.  He was finding global markets for these unused items, and matching buyers who could go beyond their local retailers to buy something they wanted.

One of my startling discoveries is that one of my son’s friends was buying discounted video games at local computer and game stores and finding markets around the United States that did not access to those games in their local retail stores.  There are many parts of the United States with spotty retail capability, and many individuals who do not know where to shop online for goods they want to buy. My son’s friend identified a market, and both of them made good money working no more than one hour a day.

Final Observations

I deeply empathize with those people who have lost a good-paying job, especially after a long and distinguished career at a large organization.  I also recognize that securing another position often requires individuals to find a job with medical and dental benefits, as opposed to one that simply pays a good salary or hourly wage.  However, there are many strategies individuals can employ to keep themselves sharp, to develop new skills, to meet new people who can help them, and to market themselves without sitting at a computer and sending out resumes to hundreds of companies.

The most important lesson from my brief, but scary and instructive period of unemployment, is that individuals who succeed in getting reemployed are those who take charge of their life and their career, and internalize the perspective that they are marketing a valuable product, themselves.

Her description of certain union positions rings true to me because I recall that the Stamford Youth Foundation (Stamford, Connecticut) could not staff the variety and volume of after-school activities that it would have liked because union contracts required it to pay every teacher for the extra hours worked after the regular school day.  This deeply bothers me.

I am not against labor unions, and I believe they serve a useful purpose in being a check-and-balance on abusive management behavior.  However, the notion that volunteerism must be stamped out if there is a worker ready, willing, and able to do the same job for market-rate pay is wrong-headed.

One of the fundamental issues in all societies is the question of when and how much someone should be paid for performing a task.  If we believe that every activity that is currently the subject of volunteer work, or perhaps below minimum wage work (like the cutting of a neighbor’s lawn by a 12-year-old wielding a lawn mower) should be converted into unionized, market-rate wage-driven work, we will significantly reduce the number and variety of goods and services we can offer to one another.

The one story in Malkin’s op-ed piece that particularly troubled me was the reference to a complaint by union officials against volunteer firefighters who built sandbag barricades to protect the city from record flooding. Ultimately, the reason governments at all levels are in deep financial trouble is that they have wildly overpaid unionized workers for relatively low-skilled tasks, or for tasks for which there should not have been premium pay.  As I have said in previous blogs, I do not blame the unions for trying to get the pay and benefits they received, but I deeply blame the government officials who caved in to these demands.

As a society, we need volunteerism at all levels.  There has to be a zone of activities that we will do without expecting to be paid by the recipient of our services.  This zone should include character-building community projects by such organizations as the Boy Scouts or the Girl Scouts, emergency services by first responders and other volunteers in the event of a disaster, and charitable work.  If someone wants to donate services, as my daughter does when she performs at senior citizens homes, she should be able to do so.  Taken to a logical extreme, the position attributed to SEIU and other unions would suggest that a unionized musician charging the senior citizen home market rates should have the exclusive right to deliver performances to senior citizens.  This is an outrageous position, and I hope our government officials never allow it to become the prevailing view.