October 11, 2015

End of the Year Political Observations

I am going to make some end-of-the-year observations about the way I see the political system, the economy, and our society evolving.

Many elected officials do not have the political will to address fundamental structural economic and political issues. We built an economy after World War II promising middle class wages for all Americans, but without the foundation of skills and educational capabilities to make such promises sustainable. Public sector labor unions and unions in heavily politicized private sector industries like the automobile industry, successfully negotiated collective bargaining agreements allowing people with very low skills and educational attainment to secure middle class wages and benefits, and protections against downsizings, even as our economy has had to become more globally competitive.

Private sector companies with these less productive and over-staffed workforces are uncompetitive. The public sector has become too expensive to support for the level of services we receive, as John Donahue of Harvard’s Kennedy School of Government powerfully describes in his book The Warping of Government Work. So why do we not address these structural problems?

Elected officials do not get re-elected by allowing large numbers of individuals to experience pain. Under-skilled people in private industry or the public sector would either be unemployed or employed at well below middle class wage levels if they freely competed in a globally competitive sector of the economy.

The long-term answer is better education and re-skilling of our population. Unfortunately, labor unions control much of our education system, and most resist the kinds of education reforms, like aggressive teacher performance management, that would make our education system able to fulfill this mission.

Politicians and labor leaders cannot easily act to address these issues because the highly competent teacher and the teacher who should be downsized have the same voting power. In fact, the more a labor union is comprised of people overpaid relative to the marketplace, the more the union leader will be compelled to resist fundamental change. Elected officials representing dying communities needing to make structural change have constituents least likely to want change.

So what’s the answer? First, acknowledge the problem openly. Second, recognize that even among labor unions or dying community populations, there are many change champions from whom support can be obtained. Third, craft solutions that minimize the number of losers. Fourth, recognize that not everyone in an overpaid, under-skilled population is motivated to retain their specific compensation and benefit packages. People are diverse, and there needs to be an effort to take advantage of that diversity, rather than ignoring it.

I am less optimistic than many about the long-term recovery of our economy. We have difficulty making clean, fast, directionally powerful decisions because we have created big centrally controlled systems with powerful interest groups able to prevent actions that would have adverse effects on them even in the slightest way. That is why the Obama Administration has had to resort to a lot of ugly political horse-trading to pass a single health care reform bill in the Senate, and why the health care reform process is so ugly.

For the big structural issue I described, there will need to be three broad-based tactical approaches:

  • Find ways to dramatize the pathology by personalizing it. Think about the number of laws that have passed because of the dramatization of a particular victim of a pathology. We have “Amber alerts” because a girl named Amber was kidnapped. We have “Megan’s law” to address violent sexual abuse. The public face of government employees that receive excessive pay and benefits is usually a heroic police officer, firefighter, or teacher, not the Massachusetts toll collector who can retire at age 45 with full pension and retiree medical benefits after 23 years of service. If the public realized how much those retirement benefits cost and how the public is supporting obsolete jobs that could be replaced by automatic toll collection technology that would eliminate toll plaza traffic jams, their attitudes about these benefits could be very different.
  • Build grass-roots support through fact-based advocacy. Our society has been very successful in changing public attitudes with grass roots campaigns on issues like smoking, driving while intoxicated, and seat belt usage.
  • Use the power of entertainment. I am involved with film and reality TV investments because I need to learn about how to use entertainment to change society. Neil Baer, the executive producer of Law & Order SVU, is a physician who cares deeply about health care reform. His show is a powerful platform to address many issues associated with sexually transmitted diseases and violence.

Over the next 12 months, I will be doing a fellowship at Harvard University to help myself learn and grow in a way that will enable me to contribute creative insights and to drive actions that will help lead the way in this much more difficult environment.