Category: Society

How Simple Do You Have to Be For the American People?

No doubt, I am not the only American bewildered by the contradictory responses to President Obama’s State if the Union address.  Sounded OK to me, but what did others think?

Charles Blow, in The New York Times on Saturday, noted that the President is “stuck on studious.”  He went over the heads of most Americans:  “People want clear goals, clearly defined and clearly (and concisely) conveyed. They’re suspicious of complexity.”

He believes that the Republicans get that more easily.  Apart from simply saying “no” again and again, their points are easy to follow.  Blow concludes:  “The message that voters take away is not nuanced: Democrats in control. Bill complicated. Republicans oppose. Politicians bicker. Progress stalls. Democrats failing.

“Obama has to accept that today’s information environment is broad and  shallow, and we now communicate in headline phrases, acerbic humor and ad hominem attacks.”  Blow calls it “twitter twaddle.”  (See, “Lost in Translation.”)

Smart Politics, the University of Minnesota’s political science blog, has pointed out that in terms of verbal complexity Obama’s speech was at 8^th grade level, two grades below Bush’s SOTU speeches:  “Obama wrote and delivered a speech that incorporated shorter sentences, with those sentences containing shorter words, than nearly every such Presidential Address in the modern era.”  (See, “‘Professor’ Obama? President’s State if the Union Address Notches 4^th Lowest Flesch-Kincaid Grade Level Score Since FDR.”)

So the President is trying to reach down to us, but I suspect that is not what Blow means.  It is emotional complexity — not verbal complexity — that is the issue.  Blow is arguing, I think, that Obama should mobilize public anger while soothing our economic injuries.  He should divide us into victims and victimizers, the “good” homeowners and the “bad” bankers.

Blow has a point, but I am not sure it is a good point.  Yes, such an approach might shore up the President’s popularity, but we are already so polarized that the long-term costs might well out-weigh the short-term benefits.

The greediness of hedge-fund managers and the short sightedness of bankers are a problem.  That has to be clearly labeled and combated.  On the other hand, they are doing what they always so, what our system is set up to encourage.  But so is the indebtedness of ordinary citizens, their struggle to make ends meet.  They were going down a path cleared by both the public and private sectors.

I see the President trying to find the line between frank discussion of complex issues and taking strong and necessary positions.  Frustrating as it is to observe, he seems to be resisting the temptations of emotional simplification.

Perhaps it is too soon to fault him on that.

An Outrage — and a Distraction From the Bigger Picture

The public is outraged by the bonuses that Wall Street firms are handing out in the wake of last year’s giant bailout.  But that entirely legitimate concern actually obscures a much larger and more momentous issue:  a dramatic shift in the distribution of wealth that has occurred over the past 30 years.

Thirty years ago, the average CEO earned roughly 40 times the wage of entry-level employees.  Now it is a staggering 400 times.  And that does not include other salaries for inhabitants of the corporate “C Suites,” or their stock options, benefits, bonuses, golden handcuffs, golden parachutes, and other forms of largess.  Over time, a new class of super-wealthy corporate leaders has emerged.

In his new book, From Higher Aims to Hired Hands, Rakesh Khurana has delineated the “wholesale transformation in the relations between executives of large, publicly traded companies and shareholders and the appearance of a new type of chief executive, along with the development of a new kind of corporate model in which the interests of corporate executives and shareholders were to be closely linked.” The rationalization for the change was that the executives charged with managing our corporations would do a better job if they had a significant stake in the enterprises they managed.

Khurana adds: “as the image of the ideal executive was transformed from one of a steady, reliable caretaker of the corporation … to that of the swashbuckling, iconoclastic champion of  ‘shareholder value’ a larger story has remained untold and largely uncomprehended.”

The net result is that the people running corporations as well as the banks and investment firms that fund them have come to act like owners.  Boards of directors have largely ceded oversight and control, seldom intervening to exert their fiduciary responsibility, while enjoying the generous fees they collect for presiding. (See my post for December 30, 2009: “Unaccountable Boards.”)

Meanwhile, the actual owners of the enterprises, the shareholders, in whose name this transformation was made, have been largely passive bystanders – and victims.  John Bogle, author of the highly influential book , Common Sense on Mutual Funds, concluded last week in The Wall Street Journal that “the faith of investors has been betrayed.”

“How so? Because the returns generated by our corporate stewards have often been illusory, created by so-called financial engineering and produced only by the assumption of massive risks. What’s more, too many of our professional money managers have failed to act as vigilant stewards of the money that we investors entrusted to them.

“In short, far too many of our corporate and financial agents have failed to honor the interests of their principals. . . . allowing our corporate managers to place their own interests ahead of the interests of their shareholders.” (See, “Restoring Faith in Financial Markets.”)

But now, Bogle argues, the massive accumulation of investments in giant mutual funds and pension plans has created a potential countervailing force.  These funds all have informed professional managers, capable to exerting their clout.  They have not done so, but the recent debacle suggests that they can and should.  The helpless investor may not be so helpless now.

What we don’t know we know about our current rage against financial managers is how long it has been simmering below the surface.

http://online.wsj.com/article/SB10001424052748703436504574640523013840290.html

The Problems of Being an Organization – or Even a Movement

The various tea party factions are at each other’s throats, according to a story in Tuesday’s New York Times, suspicious of anything that suggests the establishment. Their efforts to work together on planning a convention in Nashville next month are surfacing irreconcilable conflicts and fears. (See, “Tea Party Disputes Take Toll on Convention.”)

The national director of the National Precinct Alliance, Philip Glass, announced his organization would no longer participate in the convention. American Liberty Alliance withdrew as a sponsor after its members expressed concerns about the convention’s finances being channeled through private bank accounts and its organizer being “for profit.” As for FreedomWorks, not a convention sponsor, leaders said their members, for the most part, could not afford the convention or were not interested.

Groups like Tea Party Express, which has held rallies and organized bus tours, has been accused of being related to the Republican National Committee and acting on its behalf. Tea Party Nation, begun as a social networking site year, is feuding, its founders, former sponsors and participants now trading accusations. Many are wondering who agreed to pay Sarah Palin $100,000 for her keynote address.

It doesn’t all add up into a coherent picture, and yet the reasons may not be so hard to find.

It was inevitable that differences in their interests and agendas would become more apparent over time. Easy assumptions about sharing the same basic goals were bound to fade. Moreover, planning a national event required that they raise money, establish guidelines, and make decisions, becoming more and more like the establishment organizations they set out to protest in the first place.

Their anti-authority disposition would inevitably come into conflict with the authority they needed to establish and to plan and carry out a complex event. But I also suspect that the underlying suspiciousness they share towards big government, the fears that brought them together, could not be contained once they had to set up their own organizations. They began to suspect each other.

It is an interesting and instructive example about both the need for and the difficulty of creating an organization, especially when the focus us anti-authoritarian. It is a big step from the motivation of rage to the problems of cooperation and compromise inevitable in actually carrying out any agenda. What they didn’t know they knew were the complexities of organizational life.

What started out looking like a grass-roots movement, now looks more like a sporadic set of brushfires.

Out of Sight, Out of Mind

In our minds, the suburbs are the most unlikely places to find real suffering. To be sure, the entertainment industry has populated those leafy landscapes, tucked away between rural poverty and urban blight, with the anxieties of desperate housewives, unfaithful husbands, lonely children and disappointed dreams – but not the anguish and fears of the desperately poor.

But a new report by the Brookings Institution reveals that “the largest and fastest-growing population of poor people in the U.S. is in the suburbs.”

Overall, the report showed that from 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million, 15.4 percent increase. That still does not include figures from 2009, when joblessness and foreclosures skyrocketed. But the key finding: “Suburbs gained more than 2.5 million poor individuals, accounting for almost half of the total increase in the nation’s poor population since 2000.” (See Bob Herbert in The New York Times, “They Still Don’t Get It.”)

We tend to see the disturbing sights of the “other” elsewhere, where we assume they belong – that is, if we see them at all. Perhaps that is why the plight of the poor has dropped out of our collective consciousness. It doesn’t fit with our stereotypes of an ideal, protected enclave, the winding streets, cul de sacs and lawns.

Some of us may have occasionally seen day-laborers standing on suburban street corners hoping for work, or vacancy signs in store windows on main street, or in malls. These are the clues to what we don’t know we know about the widespread effects of this Great Recession.

But the Brookings report makes it clear that they are signs of something real. No place is immune.

But What Does It Mean?

The election of a Republican Senator in Massachusetts may well have seismatic effects on health care reform because the Democrats lost their filibuster-proof majority.  But why did it happen?  And what exactly does it mean?

Some pundits see it as the public’s repudiation of Obama’s activist agenda, some see it as an indictment of his leadership style, some as a conservative shift in the electorate.  On the other hand, some attribute it to Martha Coakley’s lackluster campaign or her gaffes, to over-confidence among Bay State Democrats, etc. etc.  (A few think it may have to do with Scott Brown’s naked centerfold in Cosmo, reprinted in their September issue. See http://www.cosmopolitan.com/celebrity/news/scott-brown-nude-in-cosmo) The point is that it has to mean something, doesn’t it?

But Daniel Stone made an interesting point about that on his Newsweek blog:  “the GOP upset in the Bay State seems to have merely skimmed the surface of much of the nation’s consciousness. . . .  For the most part, people don’t spend their days thinking about election fights, upsets, and partisan victory laps.”   It’s the Washington press corps and the talking heads who make it their business to give meaning to political events. (See, “Does Most of America Even Care About the Massachusetts Election?”)

They are satisfying a basic human desire to make sense out of experience, especially complicated things that actually have too many meanings for us to absorb.  Their job is to boil reality down to a few memorable sound bites, to reassure us that the world is not too complicated for us to understand.  The fact that meaning is given is more important than any specific meaning itself.

Financial pundits will intone at the end of the day, for example, that markets were down on “fears of inflation,” or went up in response to “better than expected earnings reports.”  Maybe.  But, essentially, they are guessing, based on a few conversations with traders.  Serious analysts have a hard time with such simplicities.  But then serious analysts don’t often volunteer to be quoted on the six o’clock news.  Most are too busy figuring out how to make money from the markets they know are extremely difficult to understand.

The process begins to become dangerous when pundits use their pulpits to proclaim, with conviction, what they believe and what they want us to believe.  They project their own hopes and fears onto others, and think it’s real.

But if Daniel Stone is correct it doesn’t actually matter.  The public doesn’t really care.  The chattering classes go on chattering to each other, and the media’s voracious appetite for news is satisfied.  And we can all enjoy the reassuring thought that somewhere all the confusion if being understood by somebody.

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My book was published this week.  Check it out:

What You Don’t Know You Know: Our Hidden Motives in Life, Business, and Everything Else  (New York: Other Press)