A rather long “Essay on Moral Ecology “

Winston Churchill once said, “If public men of vision are tough, they endure. If they are not, they perish or live out their lives in lonely exile. The future serves as an appellate court, but it cannot award retroactive damages, so one is not always redeemed.”

During the 1990s, I believe society crossed a great divide in the public debate with regards to the economic and social dimensions of our lives. The rebound of the economy from the post 9/11 crash not only discredited the bears and contrarians; it also left political ideology in disarray. George Bush seemed able to win his second term only by dressing as a conservative-in-drag. Sad as it may be, both liberals and conservatives, alike, have elbowed each other to take credit for the economic prosperity of the past 15 years. It is becoming increasingly clear, however, that some new, bifurcated political ideology has emerged; where polarizing differences have divided the country 50/50. Everyone is uncertain that the business cycle has been tamed and prosperity permanently assured. Chronic deficits, entitlement programs on the brink, terrorism, natural disaster and pandemic are assumed to be a “certainty-without-a-date-certain”. The stage has been set for a convergence of events that could threaten democracy as a form of government and possibly our long term survival as a species. Western civilization has been plunged into a Dark Age before by the insanity of barbarians, but this time it may come from our own inability to mobilize before the danger becomes clear and present. The more cynical amongst us mutter under our breath that all along the two political parties have been promoting distinctions without a difference; they are setting us up for failure. The fly in the ointment, of course, is that little wealth creation has trickled down to the middle class, much less to minorities or the poor. The recent series of seemingly irreversible and positive transformations of our economy may be due to the largesse of monetary policy and fiscal stimulus designed to conceal truth. If the business cycle has not really been eliminated, there will be hell to pay when the next correction finally arrives, particularly if it turns out to be grand super-cycle. The recent rise of the stock market, notwithstanding, it is abundantly clear that the present social fabric of our society has already shredded. One need only survey the statistics on crime, teen-age pregnancy and smoking, drug use and high school minority dropout rates to see that the darker side of prosperity contains an array of seemingly intractable problems. When queried as to the solution, both sides of the political establishment espouse the new mantra that to solve such problems: “We must return to traditional family and community values”. Evidently positive, irreversible transformations apply only to economics, not to our social problems. Western society now seems deeply troubled and vulnerable. I believe that the root cause is a politicizing of nearly every aspect of our life. I also believe that a human tragedy has occurred by allowing the spiritual-core of our self to shift to government and its institutions, i.e.., the State. The end result has been the disenfranchisement of the individual and the near total destruction of family and community. Politicians, like evangelical ministers, cannot resist lecturing us about the evils and sins of modern life. The dysfunction we see in our major institutions, such as government, education and health care, they often assert, is because of a lack of adequate support and financial contributions. They caution us that this decline of traditional institutions should be viewed as of great concern, because we as individuals and families now derive our very identity, our meaning, and our value from the outcomes created by institutional processes. Reaching even further, liberal politicians view societal problems as our unwillingness to adopt a ‘communitarian’ ethic where personal, family, clan or tribal self-interest is subordinated to the common good of the mass body politic. Increasingly, I consider these laments timeworn. Neo-conservatives and neo-liberals, alike, have been trying to get us to adopt this as a new religion for too long. Like an ancestral underground coal fire, these arguments have been heatedly argued without resolution since the original founding of the colonies on American shores 500 years ago. One must remember that, in America’s early history, the colonies were the predecessors to today’s states. Rebellious individuals begrudgingly created the federal system. Our founding fathers were members of groups who were determined to escape, forever, the oppressive institutions and governments of their day. By the way, this also included the major organized churches, which for centuries, had been a shadow governing force over people’s lives in Western Europe. The kingship or monarchy form of government, with its condescending attitudes toward commoners further contributed to the intense desire of people to flee oppression. As the last vestiges of agriculture and hunter-gather societies were being destroyed by European-led industrialization, the U.S. became the last best place where sufficient freedom existed for individuals and families to live out their ideals. Our founder’s negative experiences with oppressive, dysfunctional and incompetent government had been repeating itself through the rise and decline of numerous prior civilizations over the millennia. The late 18th century had merely been the climax during a long period of loss of hope; immigration to America was the escape from that domination. With this foremost in their minds, our founding fathers articulated a philosophy of protecting individual(family) rights and assuring the sovereignty of the states(communities). Unless expressly given, all other powers were to be withheld from central government. Numerous individuals, such as Jefferson, idealized settled agriculture as a way of life; he openly held out the hope that the vast frontier west of the Mississippi would be continued in the romantic ideal of the hunter-gather cultures for the American Indian. Jefferson was appalled at the industrialization of Europe; he readily sensed the adverse impact that a mercantilist culture would have on American society. About this time Henry David Thoreau was sequestered at Walden’s Pond, challenging, through his writings, the futility of trying to create a utopian society without first solving the paradoxes of the individual’s inner spiritual life. Thoreau accepted that this meant including an individual’s desire to externalize his self-interests. What either Thoreau or our founders, could not anticipate, however, was the spectacular rise of secular materialism and the technologically-based modern industrial State that came to pass during the 20th Century. They did not expect our country to be globally involved in nation-state conflicts and international economic competition. The issues, which are now front-and-center would have been profoundly threatening to that earlier ideal of American life. Mass immigration, the close of the Western frontier, the decimation of hunter-gather tribal life and the precipitous decline in settled agriculture has had a great impact on families and small communities in the late 1800s. As we now approach the end of the 20th century, the combined forces of increasing urbanization and a decline in the role of manufacturing as a source of employment are again propelling us toward a service economy where all the rules are new. Only 20% of the work force is now needed to grow our food, make our clothing or build our homes. Soon, many of those workers will reside in Mexico or Asia. A full 80% of all workers are already deployed to producing goods and services that are not really necessary to individual and family survival. Demand for such discretionary goods and services is sustained only at the pleasure of the consumer society comprised of individuals willing to use debt to mortgage their futures. The herd of bulls could stampede with the first bolt of lightning. Such a complex society necessitates mirror-image bureaucratic institutions on a large scale to support the social, political and economic transformations of our modern life. This includes legions of social workers, school curriculum planners, health therapists and hospital administrators, building inspectors and county planners, lawyers, judges and legislators, accountants and consultants. Complex institutions will not function without hordes of professional sophisticates, who are also necessary to manage the complexity their fraternity brothers generate through the laws, policies and procedures they write. Under such a system, individuals and families struggle mightily to maintain any semblance of self-interest. In the end, we all volunteer time and contribute additional money to fund the really important causes. Savings are devalued by government’s fiscal and monetary policies and, when the need arises, higher education and health care dispossess us of our paltry savings. Our mythical heroes, the cowboy, mountain man, American Indian, miner and the lumberjack are all, one-by-one, being displaced by pseudo-heroes such as celebrity entertainers. They own the ranches in Montana now. As a society, we are collectively grieving the loss of a real way of life that once harbored our hopes and dreams in a world before industrialization and bureaucratic institutionalization. We want paradise returned; but the sequence of negative social transformations seemingly cannot be reversed, no matter how good the economy performs. At this point, I remind you of the slick sales pitch both liberal and conservative politicians fraudulently use to promise future success. You are merely asked to buy into one of their “-isms”: you know: communitarianism, environmentalism, traditionalism. What they are really saying is: “Forget society’s problems; ignore first causes; take the institutional pill; quell your personal pain”. Our founding fathers and moralists such as Thoreau had it right when, instead, they prescribed self-actualized-individualism, coupled with an internalized-spiritualism. In searching for a label, I have come to call this “moral ecology of the individual”. But, I want to be very clear that moral ecology is not my invention, and I am not attempting to patent improvements. I do not seek to coin a new currency here. My goal is merely to enter the debate and assert that the moral, individualistic way of life is still the only proven path to success in the affairs of family and the broader community. I believe that the only fix is for our culture to embrace such a philosophy, moderate the intensity of secular materialism and embrace a more sacred life linked to the individual’s spiritual core. By doing so, we could as a group, largely eliminate the need for the bulk of our large-scale, bureaucratic institutions and the complex apparatus that tax and govern us. It is important to paint a portrait of the individual as uniquely capable of making decisions of a moral nature. When expressing self interest, the “ecologically moral” individual becomes animated, and is the only one who can be counted on to be a good husband of scarce financial or environmental resources. The institutions within government, education, and health care have, fundamentally, become parasitic. Before the transfer of responsibility to government, traditions developed over the millennia dictated that individuals take responsibility. Circumstance routinely called for self-reliance. But, then, there also seemed to exist a pattern language within the family and community that could grasp the truth as to how the common collective good could also be maximized. We did not have to defer to institutional authority. Unfortunately, instead of nurturing a moral ecology as an appropriate landscape for individualism, we are, of late, turning public entitlements, employee benefit programs and institutional complexity into an “extractives” industry. Worse, we act as if there are no limitations and we do not seem to see any tradeoffs. Our relationship with government has turned addictive and, it contains a high level of hostile codependency. In the particular case of health care, where I have worked extensively, policy-makers seem indifferent to the typical rational and scientific means of making decisions where competing claims on resources are bound to occur. Even worse, there appears to be oppositional defiance to returning decision-making back toward the individual or family where self-interest and responsibility can be pursued. Instead, there is almost a pathological ploy to engage in never-ending public discussion bordering on demagoguery about the uninsured, working poor and rising costs. These symptomatic issues are argued to the total exclusion of root causes such as poor public policy and failure of the individual to pursue a healthy lifestyle. It is ironic to me that government regulators have encouraged a perverse and irrational form of individualism of a different sort to emerge. Government has indulged the social scientist’s values that every individual’s life is infinitely sacred and that each person is unique, irreplaceable, and priceless. Their underlying belief must be that every possible resource should be taken from society’s collective warehouse to prolong life, regardless of the impact such a decision will ultimately have in forcing tradeoffs for others. Why do they do this? It becomes crystal clear when we see that, in reality, government and its institutions derive immense political power from this approach to social and economic transactions. Long ago, government, which controls much of our modern world, lost any real incentive to stimulate public discussion or exert any real moral leadership. In the course of its evolution, like its constituents, it began to treat individuals, families and communities as an extractives industry, too. Seldom confronted or restrained, government and its institutions, naturally, lost respect and began to see us all as unwitting dupes. Government itself completed the circle that is required for a truly codependent relationship. In a society dominated by dysfunctional institutions and a regulatory state, the impact of economic decisions and social choices becomes defocused early on during any policy debate. Dilemmas over the scarcity of resources are blunted, since program administrators feel compelled to think about services for every segment of society. Segmentation is the essence of modern marketing and particularly necessary when polling and conducting focus groups to craft the sound bites necessary for election campaigns. Hard choices are never seriously debated, much less ever really decided. Instead, there is usually an attempt to provide every possible social service to everyone. The social contract with society is constantly amended to be all-inclusive. Tradeoffs between government, health care, education, and other potentially desired goods or services are never really considered. We quickly lose perspective on the necessity for tradeoffs and cultural limitation. Institutional services become just another part of the growing burden of an unsustainable society. In this context, why wouldn’t individuals and families vie for a share? The transfer of responsibilities from the individual, family and community to institutions, particularly government, has been done at the expense of the private sphere of life. Economic and social problems are now almost always defined as public. For example, we increasingly think of infant mortality, AIDS, smoking and other substance abuse as “public” health problems within the domain of government’s responsibility. In doing so, the “market” for individual, family and community responsibility has been replaced by these dominant institutions. Within bureaucratic institutional structure, e.g.: large hospitals, government agencies, insurance companies, professional societies and chancellor’s offices–decisions are not really decisions. Because the market has already been destroyed, there is no moral ecology possible, and the tradeoff curve has been rendered invisible. It is no longer a case of who really deserves services, and cost is the furthest thing from anyone’s mind. Government, where every vote is presumed equal, redistributes income through direct taxation, and, if necessary through cost shifting and hidden forms of taxation. The end goal, of course, is to provide everyone with an infinite array of social services as an entitlement. In the process new rights are given, building a foundation for the future. This process reclassifies services and goods as “public” and places them outside the realm of the competitive marketplace. By doing so, government’s irresponsibility renders invisible what the market used to make clearly visible and distinctive–social values and personal responsibilities and economic tradeoffs. Americans now see themselves caught in a conundrum. Many realize that the old system with its institutional arrangements is despairingly dysfunctional, but our inherited paradigm is so powerful and addictive that it inhibits a sincere quest for a new way. Thus, we are held back from responding to present realities and positioning ourselves for future needs. We are addicted to our current way of life and see no other alternative that is within reach. In designing institutional, regulatory, and taxation approaches to rectify injustices in the past, we have overreached. In the process government destroyed much of the original market system of private consumption; it is now virtually impossible to return to a way of life where personal values can operate within a context of a moral ecology. There is nothing left to sustain the spiritual core of an individual’s life. We are once again at a point in deciding the role of the institutions in our modern life, and it is very clear that many of the arrangements and priorities are no longer worth the price. It is also abundantly clear that government and its designated intermediaries exercise vast and inordinate power over the social and economic systems of our day. Because government officials are assumed to serve as our “loyal agents”, we take for granted that our institutions are doing the right things right. They have never been seriously scrutinized or criticized as to their fundamental motives, competency, or accountability. Abundant evidence exists that the capability of government is questionable. This is particularly the case when it comes to accepting the charge to reform various markets for which they were the original perpetrators of destruction. The rampant and wholesale destruction of previously sound markets, where individuals externalized their self-interests, have purposely been twisted to manufacture evidence that individualism always leads to negative consequences. As a result, we are either shamed into believing individualism is morally and ethically wrong or at best a random act of heroism. The rendering of markets as invisible combined with the demise of individualism paved the way for the enlargement of the bureaucratic empire. Power is supposed to follow wealth in the private sector, but somehow it invariably ends up preceding expenditure in the public sector. Because the government bureaucracy controls entitlement budgets, it, de facto, exerts vast control over the social and political side of the populace. Since the public has already abdicated critical decisions to its representatives, there is no real accountability for the cumulative effect of decades of bad decision-making. Hard-hitting questions are almost never asked about the wisdom of designing even more systems predicated on a perverse, institutional way of life. Prevailing systems and institutions have done almost nothing to date to educate us as sovereign consumer families. We are incapable of being prudent purchasers and we know little about cooperating at the community level. The age-old pursuit of power accumulation by entitlement stands in stark contrast to a world where there are limitations, tradeoffs and someone must take responsibility. So far, our principal legacy as a modern society seems to be the massively false idea that society is outside the natural forces that govern nature, the economy and man’s social life. We have been operating all this time on an earlier presumption that only government bureaucrats and professional sophisticates could hope to understand and administer our vast social and economic system to produce the collective outcomes we desire. The public, particularly individuals and families, have increasingly been seduced into turning over power to intermediaries. In the process, the institutional way of life has become an addictive substance and the self-professed loyal agents were allowed to accumulate excessive power in undemocratic ways. Selected citizen groups have been indulged in an orgy of social services without regard for future costs. This pattern of indulgence now places at risk the future economic status of an entire generation of children and young adults. I fear the codependency will only be broken when collapse of the current system forces a rock bottom shattering of illusion and denial. So, what might make a real difference? Clearly, my waving a moralistic flag, all the while speaking from a soapbox about ethics, values, and individualism is destined to fall on deaf ears. Well, I predict that government will eventually be forced to acknowledge stunning failure in its ability to control the economy and reform institutional systems. The future social and political costs will be enormous. I would go so far as to say that the survival of the nation-state as we have known it might even be at stake. If government and the other major institutions of society fail to deliver on the social contract they have negotiated as a replacement for self-actualized individualism within the family and community, then the legitimacy of our current form of representative democracy will be called into question. All of this was to be expected; the economy has rapidly become deeply intertwined with federal and state governments over the past two decades. The overly political conception of health care, government and education, has turned out to be profoundly destructive to the economic dimension of our society, even in the short run: witness the hyper-inflation and cost shifting in these sectors over the past twenty years. Now, look to the future and acknowledge the virtual bankruptcy of entitlements and the social security safety net. This is why more Americans believe in UFOs than their likelihood of collecting social security benefits. Without a moral philosophy that collectively harnesses the power of individuals as ruthless market maximizers, institutions will just continue to steal from family and community life. The common good is enhanced if, and only if, the complex, interdependent, systemic forces of the market are organized based on the summation of self-actualized individualism. Government program administrators habitually commodify community needs. They also believe that all good government requires is a technically competent organization operating in a context of unlimited economic support. Sadly, whenever we have submitted to an oligopoly of institutions and niche self interests a benevolent tyranny is always created. So, it could have been predicted that we would lose much of our personal freedom in this process. Little did we know, however, the full extent to which we would, so tragically, default on our God-given abilities to choose and self-govern. Bureaucrats have soothed us into believing that they have done their level best, and that life would be much worse, were it not for their efforts. The problem is that the society we are quickly becoming is exploding everywhere in costs, without any meaningful improvement in our life status. This includes health care and education on all fronts. Furthermore, current institutional arrangements are incapable of guaranteeing the emerging permanent underclass or the future generation of today’s youth access to the same entitlements on a par with the past. Immense social and political problems are guaranteed to follow as a result. When government became the funder, underwriter and regulator of all social services it virtually ensured that there would never be a critical appraisal or honest debate as to the degree these services should be a public good and an implicit amendment to the Bill of Rights. All countervailing opinions have been oppressed and obscured. All the while entitlements have been expanded, and the established political order has tightened the garret. The dynamic impetus of the current paradigm seemingly cannot be weakened, no matter whether the Democrats or Republicans are in office. Government and its institutions continually increase power in ways that are invulnerable to the knowledge of everyday citizens. As individuals and families we cannot even understand the fundamental roots of our society’s problems, much less prescribe a solution. Because our power to exercise individual self-interest has diminished so, even collectively we do not think we can make change happen. As experienced by our forefathers, it all but appears that hope of change is long lost. One again I depart from that consensus; I assert that a breakthrough is imminent. We must remember–all organizations are essentially transient and subject to upheaval by technology, economic correction and precipitating events. No matter how great their size or how long their tradition, organizations also contain within their DNA , the seeds of their eventual dissolution and irreversible transformation. Headway is made rapidly when economic conditions are profound enough to prefer different structures, processes and outcomes. Witness the transformation of Russia and the eastern bloc countries. Don’t you think the polit-bureau would have done anything within the realm of possibility to forestall change? Today, the federal government runs as a strong polity only because it has been able to coordinate their agencies, and maintain the illusion they are run by experts. In reality, control was effected largely only by having the will to vigorously initiate and legislate new programs at a pace, two steps ahead of public perception. In the future, however, the federal government will rarely ever be able to achieve intellectual consensus on the big issues. In the vacuum, state and local government will have to take control to get things done. But, this is exactly what our founders intended. The little bit of federal public policy that manages to be developed in the future will have to be more pragmatic. To make it salable, it will have to agree with what the various constituencies at the local level will accept. On the dark side, there is now, more than ever, the specter that unanticipated events might render the nation-state concept illegitimate. Cataclysmic events, beyond the control of even the most powerful nation on earth could redefine collective life as we have known it. Up until now, we have ignored such possibilities because their likelihood is not predictable. The worst-case scenario after such an occurrence, of course, would be balkanization and ethnic rivalry. However, such disintegration would likely allow the reemergence, in a positive way, of the “city-state” and small business as the preferred institutions governing our collective life. Such outcomes would be even more demanding of self-actualized individuals, but they would once again free us to pursue the ideals of family and community, as our founders intended.

Dead-weight loss

We are constantly being massaged to believe that if someone in charge were doing his job, the economy would be back on the tracks chugging along. But, I believe there is a fly in the ointment that cannot be ignored. It’s the economic concept of “dead-weight loss”.

In a nutshell, dead-weight loss represents the difference between what we would pay for something if we had to pay cash versus buy on credit.

DeadweightlossIs there any doubt you would pay less for emergency room services at a hospital if you didn’t have insurance or you had to pay out of pocket? What about the price of your house or car? If you didn’t have access to credit would you pay $350,000 for a large but poorly built house? Didn’t you willingly over-pay for your car because it had zero % financing and the monthly payments fit your budget?


And, what about those Christmas presents under the tree. Would you really have paid the amount your spouse spent in an orgy of spending to fulfill a fantasy? Hell no, you wouldn’t. Economists call this “dead-weight loss”.

American health care is nearly 18% of GDP, which is nearly double what European socialized democracies pay. Many of our best and brightest people go into health care and it is our biggest employer at 14% of the workforce. If we hit the numbers of our socialist comrades in Europe, health care would be 10% of GDP and 8% of employment. And, if health care was a truly competitive and productive sector the U.S. would be at 7% of GDP and employ 5% of the workforce. We are overspending by hundreds of billions of dollars and millions of workers are in employed in health care rather than growing food or inventing the next iPad.

If we continue systematically through every sector of our economy we would find similar savings to be achieved in education, highway construction and government services of all types. Another way to get at the number would be to focus on market segments where there is easy availability of credit. This includes government fiscal and monetary stimulus which force feeds dollars into every nook and cranny such as student loans, SBA guarantees and the like. It represents a false prosperity that leads to dead-weight loss. If we were not printing money so the banks could lend it out and if governments balanced their budgets there would be far less money to spend. Unfunded liabilities for pensions and all manner of debt will eventually require additional funding.

Every trillion dollars of spending equals 10 million jobs. If we suddenly reigned in health care spending and reduced government deficits tens of millions of people would be displaced. What would they do? The plain and simple fact is that government largesse over many years has created a gradient that has encouraged the migration of millions of workers into sectors of the economy that are now infected by dead-weight loss. This inevitably creates bubbles in the economy. When things change there is a bursting of the bubble. Reaction to popped bubbles results in even more dead-weight loss.

Government has painted itself into a corner. In every case in the past, government has used inflation as a way to get itself out of the mess. It pays off old debt with cheaper dollars and it prints money to continue the pensions and false employment. To solve this problem with restraint would displace millions and that is politically untenable.

My criticism of government should be extended to the private sector. Corporate owners achieve the same effect by encouraging massive influxes of illegal immigrants and outsourcing jobs to low cost countries to solve their problems. It contributes to unemployment. And, there are millions of underemployed working in call centers who cannot find jobs in the economy.

Taken as a whole, we have serious structural problems in the economy that cannot be solved by mere tinkering. There is a disconnect between worker skills and education and what the economy needs. We import more than we export and wealth creation has gone into reverse. Our economy cannot sustain itself without the addictive fix of easy credit.

Politicians who purport to have a fix for these problems are simply not leveling with the American people. We are stranded on one side of a raging river at the bottom of a chasm. To cross that gap will be extremely difficult and painful. Anyone who thinks it can be achieved by waving a magic wand will be disappointed in the magic act.

Right now we do not have leaders willing to step up and help us deal with problems because there is a general lack of understanding of the nature of the problem. And, we have not yet sobered up and realized that we are careening down a slippery slope and the rocks are rushing up toward us. Dead weight loss is really the cognitive dissonance between what we as individuals do in our actions and the abstract thoughts we use to perpetuate our addictions and fantasies. We haven’t bottomed out yet. There will be no positive change until that inflection point is reached.

Gods of the copybook headings

My thoughts often turn to the Book of Genesis and its mention of the Garden of Eden and our loss of paradise. Man thought he could do better with his laws and his technology. Nature has clearly suffered and we seems to be drifting away from what little remains. Whether you embrace the Bible’s book of revelations, there is a consistent belief across most religions that this will all end poorly.

* * * * *

Of all the writings that best express my feelings are Rudyard Kipling’s “Gods of the Copybook Headings

As I pass through my incarnations in every age and race,
Peering through reverent fingers I watch them flourish and fall,




When the Cambrian measures were forming, They promised perpetual peace.

On the first Feminian Sandstones* we were promised the Fuller Life
(Which started by loving our neighbor and ended by loving his wife)

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;


There are only four things certain since Social Progress began: —

The Gods of the Copybook Headings with terror and slaughter return!–Rudyard Kipling

*Feminian sandstones are a geological stratum representing a former age in which sexual mores declined as ours did in the last century, and the human race learned by natural selection that the wages of sin is death.

Isaiah on my mind

Paraphrased from the Book of Isaiah:

Many offered to help;
But, this was something I had to do on my own.
My friends have all grown tired of me!
Now that it is done, I hope they forget all that;
For it is nothing compared to what I am going to do!
For I am going to do a brand new thing.
See, I have already begun! Why won’t they believe it?
I will make a road through the wilderness of the world;
A straight smooth road through the desert;
Fill the valleys and level the hills;
Straighten out the crooked paths;
And smooth off the rough spots in the road,
For my people to return to Paradise; and
Create rivers for them in the desert!
The wild animals in the field will thank me,
The deer, raccoons and homeless cats and dogs, too.
For giving them water in the wilderness;
Yes, springs in the desert

Churchill On Islam



“How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy. The effects are apparent in many countries, improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist wherever the followers of the Prophet rule or live.

A degraded sensualism deprives this life of its grace and refinement, the next of its dignity and sanctity. The fact that in Mohammedan law every woman must belong to some man as his absolute property, either as a child, a wife, or a concubine, must delay the final extinction of slavery until the faith of Islam has ceased to be a great power among men.



Source: The River War, first edition, Vol. II, pages 248-50 London

Saving Connect for Health Colorado

Coloradoans are at an observation point in the development of Connect for Health Colorado, the state’s health exchange. Some hard decisions have to be made.

Colorado’s health exchange was breathed into existence by enabling legislation from the Colorado Legislature and almost unlimited federal funding. It was not an entrepreneurial adventure like Apple, Microsoft, Facebook or Google. The intent was to establish a nonprofit, Internet-based marketplace where individuals, families and small businesses could compare health insurance products and qualify for subsidies provided by the Affordable Care Act.

 It is an understatement to say that the past three years have been a roller-coaster ride. Partisan bickering resulted in the exchange being created with a one-vote margin. It remains a target for partisans who want Obamacare repealed.

At least one manager hired to start up the exchange was asked to leave because of wrong-doing with regards to spending federal funds. The organization was slammed by a performance audit that suggests senior management lacked discipline and control. All-in-all, the top tier of managers recently headed for greener pastures.

 The computer systems funded by the exchange have cost tens of millions of dollars but barely function.They are bug-ridden and even after a major rewrite this past year, are unstable and dysfunctional. The interface between  Colorado’s Medicaid PEAK System is problematic and lacks good design.

More troubling, Connect for Health appears to be in a co-dependent relationship with its vendor, CGI, which has it by the short hairs with regards to licensing and maintenance. This mirrors the relationship Colorado Medicaid has had with Deloitte for many years. Design-build consultants have taken out millions of dollars in fees and left a debris field.

 With hindsight, all of this could have been predicted. If you put hundreds of millions of dollars on the table, it is no surprise when pirates show up to steal the loot. Colorado Medicaid and Connect for Health have been so abused by those who should have been their loyal agents that now they cannot function on their own. It would be Greek tragedy if it was not such a comedic farce.

 Connect for Health’s board holds the organization’s fate in its hands. It needs a new CEO, but it is unclear whether the board has the wherewithal to bring in someone with the deep skills to get the job done. The first time around they hired a celebrity glam who lacked a track record of systems development and acted like a purchasing agent doling out federal dollars. Irrespective of the previous CEO’s skills, she was obviously not morally or ethically committed to Connect for Health’s long-term vision.

It is now time to shake the Etch-A-Sketch and start afresh at Connect for Health Colorado. We need to view the departure of Fontneau’s Possee as a blessing in disguise. The clean-sweep now allows the board to put in place a stage 2 management team to advance the organization’s cause. We shouldn’t let the door hit the old gang on the butt as they take their potted plants out to their BMWs.

I caution everyone that, if the board bungles the hiring of a new team, all will be lost. Colorado will be denied the ability to use affordable health care as a magnet to attract the next generation of start-ups. An immense amount is at stake. The organization is destined to be the lengthened shadow of this new group of managers. 

The second major step to be taken in turning around the organization is the technology platform. When you look at organizations such as UPS, Federal Express, Hertz and Amazon, you see organizations that have developed technology to a high level over several years to a point where it is truly a force-multiplier in their competitive efforts.

I am reminded of how Steve Jobs was obsessed with the smallest details of how a product was designed. He knew that success required beautiful design and perfect function. This cannot be done using outside contractors. It must be done in-house. Only then can it be farmed out to contractors willing to meet specifications. Firms like CGI and Deloitte use their clients as a farm club to groom their staff. They have a food chain of partners who arbitrage labor so they can pay their country club dues.

The imperative for Connect for Health is to do two really big, difficult things. First, it must bring essential design functions in-house and insure that people with the requisite skills will get the job done. Second, it needs to smash, break and shatter the co-dependent relationships that have been groomed with outside third parties.

 I would suggest making the software open-systems using a creative commons approach. Connect for Health needs to move rapidly to form a consortium among other states, all of whom have the same problem.They simply must remove the software from the clutches of vendors who are shaking them down.

We are on the cusp of a major movement toward private exchanges and eventually other states will want to establish exchanges.This calls for open systems. 

One dimension of Connect for Health’s problem is political. I would remind everyone that the reason the federal government had to intervene in the Colorado health care marketplace was because state government failed to act. The last time any meaningful health policy initiatives took place was back in the 1980s when Richard Lamm was governor. Neither Roy Romer, Bill Owens, Bill Ritter or Gov. Hickenlooper did anything more than study the problem using blue ribbon committees. The legislature has treated Medicaid’s federal matching monies as a perverse form of economic development. The insurance companies have co-opted the political process. It has been an insult to representative democracy.

The Colorado Legislature can now act by moving briskly to force the insurance commissioner to allow association health plans, cooperatives and multi-employer health plans to form with reasonable regulations in place. Federal ERISA law and the ACA already provide for such entities. But, it is the legislature that must provide a level playing field in defiance of the vested interests of the large insurance company oligopolies. Right now the seven largest insurance companies represent a franchised oligopoly. While there are hundreds of small insurance companies licensed to sell health insurance, there is no real competition because of the dominance of a few large insurers.

 At present Connect for Health does not have a viable business model to sustain itself. It is not funded beyond this year; it is effectively the indentured servant of the insurance industry. The legislature is the only entity that can come up with a funding formula. Some sort of value-added fee along with a benefits guarantee fund should be created. It is simply outrageous to require start-up competitors to provide reserves on a par with established insurers when reserve requirements are not based on real risk. Self-insured employers require no reserves, they simply use reinsurance. Government’s job is to invigorate competition and innovation, not conspire with well-heeled oligopolies to choke the market.

 Much work needs to be done within and outside Connect for Health Colorado to achieve the original intention of bringing more affordable health care to the 750,000 uninsured Coloradoans and the 400,000 small businesses in the state.

So far, Connect for Health has satisfied about 20 percent of the need, which is not bad for the first year of its operation. But, 80 percent is yet to be accomplished and the hard slog through the swamp lies ahead.

All of us will benefit by putting our shoulder to the wheel and assisting Connect for Health Colorado in their efforts to survive and thrive.

Turning point in health care

Between the end of World War II and the enactment of Medicare in 1965, the U.S. was focused on building its hospital infrastructure under the Hill-Burton Act of 1946.  The year 1965 is almost an A.D./B.C. divide because after that year, the focus shifted to providing access to specific population groups. These groups included the elderly(Medicare), the poor(Medicaid) and trade union membership and corporate employees(ERISA). The Affordable Care Act is merely an encore presentation to include uninsured individuals and small groups.
During the 1970s the U.S. began experiencing a round of severe hyper-inflation. After Ronald Regan was elected president in 1980 two key health policy strategies were devised to introduce prospective fee schedules and institutionalize the health maintenance organization as an ideal model. As a result, the American health care system has experienced a cascade of unintended consequences.
During the past 70 years we have witnessed health care grow from less than 4% of our GDP to nearly 20%. Early in the period only 3% of our workforce was employed  in health care. Today, nearly 17% of our labor force are health care workers. Because health care is largely societal overhead and non-exportable we are horrified as the health sector threatens to destroy our nation’s wealth creating ability and dispossess us all before we die.
      In spite of public policies which encouraged managed care, who has emerged as the truly outstanding health care system in terms of total value? There is little doubt that on the quality side, the Mao Clinic and Cleveland Clinic are renowned for their high quality. Kaiser Permanente consistently gets cited for its high quality in California for the Medicare population. Despite the appearance of quality almost no American health delivery system has proven to be cost efficient.
A crude examination of Kaiser Permanente, for example, illustrates my point. Nearly 20% of its employees are doctors and nurses. These are the primary hands-on providers of care. Most of the rest of Kaiser’s 100,000 plus employees are staff, clerical and support. Kaiser’s premiums are competitive with its peers, but no quality health care organization has been able to experiencing positive cost curves that you would expect from organizations achieving year in-and-out efficiencies.
During the industrial age virtually all products have had positive cost curves during their life cycles. Costs invariably start out high but as these organizations scale up the per unit cost of the product declines. Henry Ford’s first automobile was over $800, but by 1927 he had driven the cost down to a little over $200 a car. Ditto for household appliances, computers, cell phones, production homes and every aspect of our life. This is due to “learning curve phenomena” whereby producers figure out how to become more efficient over time but still manage to produce high quality. So, why is it that health care costs have defied economic laws of gravity?
      The answer is actually quite simple. Health care policy initiatives designed to increase access removed most of the disciplining forces of the marketplace through an over-reliance on subsidy and tax preferences. The consumer became insulated from the realities of the market. This coupled with the prevalence of insurance ignited round-after-round of inflation.
Hospitals, doctors and other providers have not been forced to achieve optimal micro-economics within their firms. Health providers rarely go out of business. By and large they have a franchised monopoly in their service area and continue to be specialized and labor intensive with high level of fixed costs. They have responded not by competing using marginal cost strategies; instead, they respond by increasing their intensity of clinical services to increase revenues. Administrative costs for every participant in the food chain have continued to grow as a percentage of total costs.
      As a result, the American health care system is now more expensive than any of the Western European socialized systems. Over the past few years U.S. quality has rightly been called into question. HMO’s and managed care,which were supposed to be our salvation have been a bitter disappointment. Why?
You can analyze the root causes of our current dilemma without much difficulty. A descriptive analysis of the past is not the important question to be asking. We need prescriptions for future success.
What Americans must come to grips with “…what is the role and future importance of health care in our economy and society?” To answer that question I suggest you take a look at a globe of the earth.
Every country on the planet needs a certain set of abilities to develop and prosper. Good education, water, sewer and roads are obviously basic. But, health care is a key foundation cornerstone in that edifice.
Now, in a perfect world, the U.S. would have an efficient, high quality health care system to share with the developing peoples of our planet.  They would obtain the dollars necessary to acquire our abilities by producing goods and services that we wished to buy from them. It would be a virtuous trading cycle.
If health care were a wealth-creating export industry it could be encouraged to grow to dominate our GDP. Ideally, however, only 7% to 10% of our GDP should be necessary to satisfy our own internal needs. The current excess capacity should be exported. This builds the case for imposing harsh disciplining forces on our health care system. It is necessary to achieve the means to an end. Maybe it could be achieved through socialized regulation. But, history has shown us that every nation eventually had to deregulate and reintroduce market forces to achieve both high quality and efficiency.
      The current practice of turning to large insurance companies to achieve competition and discipline in the health care marketplace is flat-out destined to fail. If General Motors and Ford were not producing high quality cars you would not complain to GM Acceptance or Ford Credit corporations, their financing arms. Asking the financial intermediaries to do the dirty work of disciplining buyers and sellers is Forrest Gump stupid.
Health insurance by its very nature creates dead weight loss and insulates the consumer from the bitterness of the environment. By its nature it encourages over-production and over-consumption. We need less insurance, not more. If you do not buy this proposition, you need to buy Paul Samuelson’s basic text for Economics 101.
I believe there are things in this World which are rocket science. Putting a man on the moon or sending a lander to Mars truly mystifies me. We build planes that defy the laws of gravity and huge ships which float.
But, health care economics is not anywhere near this complex. We have made a mess of things by putting it in the hands of the wrong people. When we wanted the Nazi code broken we brought in Alan Turing, not Winston
Churchill. When we wanted an Atomic Bomb built we created the Manhattan Project. We didn’t turn it over to a confederancy of dunces.
I remain optimistic that we will eventually see the light. Our old manufacturing industries are not coming back. They are gone forever. Americans will continue to try everything until the right thing is the only avenue left. Then, we will get on with making health care an economic engine for the 21st Century.

Working hand to mouth


Paraphrased from Linda Tirado’s book Hand to Mouth and David Shipler’s recent review in the NY Sunday Times.

The manager of the call center where I work recently told me that he was concerned about the high turnover amongst the workers. I suggested he hold exit interviews and re-contact some of the previous employees. The answers surprised him. It was not the low pay, the noise, or the impact of calls continuously coming in. Most ex-employees complained that they did not feel needed, necessary or wanted. They felt they were treated like just another body.

The craving for personal dignity is sought by everyone, no matter their position in the hierarchy. But, in low wage jobs, bosses seldom ask subordinates what they think. Humiliation and a perverse form of petty tyranny is the golden rule. Low wage workers are routinely dehumanized by higher ups. From their lofty positions these doo-dahs wield contempt, hyper-critical moral judgments and derision. Our society is bipolar, with a chasm between the highly paid and those living at the subsistence level.

You might think this an age-old caricature, but you should follow my line of reasoning to learn about life at the bottom of the totem pole. Only then will you understand why the working classes harbor a consistent anger and fear.

When you are the working poor, you cannot indulge in the luxury of indignation. Ground down by swing shifts, cash shortfalls and too little sleep, workers are badgered by an American creed that anyone who works hard will eventually prosper. Those who fail to succeed eventually internalize a belief that their shortcomings are their own fault. They take on the identity of “self-sabotaging-perpetrator”.

It might be more constructive to acknowledge common faults of the human condition, yet still feel justified in our infuriation and rage. A constructive resentment cuts through one’s chronic depression. Sharpen your wit and focus your x-ray vision toward the disparities of power and money. We need to map the chain reaction and cascade of events that leads families and individuals from one setback to another.

The poor seldom are given the opportunity to speak. Their voices are at best filtered through authors and social activists who serve as their proxies. Raw and direct clarity can be startling. Denying dignity corrodes attitudes toward work and authority. Professionals and financial intermediaries are condescending and preachy. Coaches are imperious and cruel from the intoxication of low grade power, like cheap wine. Systems within the workplace are Kafkaesque and the workplace is nothing more than a downward spiral that is defeating at best.

The degradations in the work place wouldn’t be so hard to take if the privileged were honest about things. Instead, we are admonished to work harder and be ever so grateful we have jobs, food and a roof over our heads. Of course we are. But in exchange for all the work we do in a context of miserable conditions and systematic dysfunction you would think there is one thing we could ask in return. A sense of accomplishment? No! Respect from those above? No! Job security? Surely you jest? We are expected not to seek any of these things. A licensed insurance agent in a call center is no better than a seasonal illegal picking apples at harvest time.

Some workers have to wait for a break or ask permission to go to the bathroom. Workers are monitored by cameras or told they cannot smoke or use a tablet computer in their car in the parking lot. They have to change shifts on short notice and be left wondering by workforce bulls who ignore them when they request a few hours off to go to the doctor.

The result of all this is workers simply quit caring. They have no energy; work has no joy; they are unwilling participants. Yes, they will perform as directed, but no more than that. They no longer expect a boss who gives any indication that he values them more highly than the dress-for-success outfit that must be worn to give the “client” the appearance of professionalism. Workers are interchangeable and they don’t go out of their way for management. It is more than being undervalued; it’s that persistent feeling that supervisors are flat out going out of their way to make a person understand what a useless piece of shit they really are.

Mental engagement and creativity are unwelcome by management. Nobody is interested in your thoughts, your opinions or the contributions you might be able to make if conditions were different. They want predictable responses. You are there to make up for the deficiencies of the computer system; it is not a tool to empower you in your job.

Stress over money and the exhaustion of working multiple jobs to make ends meet are not great for higher level thinking. Most of us lack intellectual stimulation and we long ago stopped thinking in higher concepts. It happened gradually. We have become stupid after realizing how long it’s been since we thought about anything beyond just keeping all the parts of our life moving. There is no philosophy, no music, and no literature. Just treading water in this job keeps us at capacity; it rankles.

There are coping mechanisms to be sure. We look forward to eating, drinking caffeine, booze, smoking and sex. It’s a way to forget about problems even if just for a little while. As for the self-righteous overseers who lord over us day in and out, they abuse the same substances but they make enough money for periodic rehab.


“Thank you for all your hard work!”—>Rings hollow like a cracked liberty bell.

Monkey-wrenching Obamacare

In 1975, Edward Abbey wrote his most famous literary work, “The Monkey Wrench Gang.”  It postulated a vision of environmental activism that eventually manifested worldwide.

Within two decades, environmental activists had gone on the offense to defend owls and prevent bulldozers from building logging roads. Environmental terrorists burned ski chalets and true-believers climbed trees to prevent redwoods from being cut.

Last month’s recent elections threaten to monkey-wrench Obamacare, aka, the Affordable Care Act.

Stalwart defenders of the law believe the bait has been swallowed into the gut of the fish and cannot be retrieved. Taking away the subsidies, mandates and doing a Control-Alt-Delete to reset the system to its pre-2013 status now seems impossible. Most supporters believe the law will remain intact and only minor changes will occur at the margins.

I see it differently.

The ACA was crafted by the insurance industry, not legislators. If you actually read the law and the rules entirely, you will understand. There isn’t a congressman smart enough to write such a complex law.

The ACA has many moving parts that were intended to precipitate a vast sea change in the group health insurance market. It’s covert long-term intention was to do battle against the federal ERISA law of 1974, which has, over the past 35 years, eroded the market share of companies such as Blue Cross/Blue Shield. The ACA’s goal was also to cement the oligopoly power of the seven largest insurance companies who now arbitrage nearly 20 percent of the U.S. GDP.

Our citizenry was thrown under the bus when Obamacare was enacted. It gave a franchised oligopoly to hospitals and insurance companies that were on the verge of being challenged the way IBM was challenged by upstarts like Apple and Microsoft back in the 1970s. It was not just Democrats who participated in this scheme. It was also Republicans and a host of executive branch regulators who owe their very existence to the lobbyists.

The public has not been served by loyal agents.

The current railing against Obamacare would normally be a campaign issue whose energy would dissipate soon after an election. The problem this time  is that too many politicians created a form of political currency by promising to repeal the law. If they fail to deliver, the 2016 election will punish them severely.

How can Obamacare be monkey-wrenched? In my mind there are at least four ways, two short term and two long term:

  1. Harpoon the subsidies,
  2. Destroy the exchanges,
  3. Deregulate health insurance markets, and
  4. Innovate the hedging of risk.

Harpooning the subsidies can come from multiple directions. The subsidies for cost share reduction health plans were never appropriated and are now being litigated. Another way to throw sand in the gears is to force subsidies to be given to lower-income workers who are on groups and being forced to buy platinum plans for their dependents.

The entire subsidy scheme is highly inflationary and it is being applied unequally to taxpayers. Monkey-wrenchers can press to eliminate the mandates and allow those who receive subsidies to obtain them by virtue of tax refunds rather than through the exchanges.

The exchanges themselves are fragile and vulnerable organizations that lack a funding formula beyond 2015. They have used grants to acquire complex technology developed by outside contractors. This, along with their call centers, have high maintenance costs. If people who are mandated to buy insurance and who receive subsidies through the exchanges were allowed to buy insurance from other sources and still receive the subsidy, the exchanges would fall like dominoes. They are being kept alive right now by insurance companies that have agreed to allow individual policies to be taxed and sold by unlicensed agents. Should this support be withdrawn by the federal government or at the state level, the exchanges will wither and die. Many of them already are dead men walking.

The health insurance markets are now where Telecom was in 1996 before it was deregulated. It is a cartel of oligopoly interests. Every aspect of the provisioning of health care has been co-opted by health insurance oligopolies at the state level. They work feverishly to keep the current medieval system in place.

For example, take insurance reserve requirements. They are designed not to insure solvency but to prevent new players from entering the market. The regulation of health insurance premiums along with mandated essential benefits prevent innovation from being effected. Insurance is no longer a device to lay off risk for similarly situated individuals in a group. It has been socialized and is now a public financing and taxing methodology to get the young to pay for the old and the healthy to pay for the sick.

Health insurance needs to be deregulated by allowing individuals and small business to form smaller cooperative and association risk pools on the same basis as larger self-insured corporations and government.

Finally, the hedging of health risks has been corrupted by an age-old contracting process. These contracts extend from the networks that include physicians up to the for-profit conglomerate hospital chains and then on to the reinsurance companies that absorb risk. It is an antiquated form of managing risk that has been displaced and innovated in most other markets.

Commodity exchanges such as the Chicago Board of Trade use futures contracts to lay off risk in everything from currency fluctuations to derivatives. Congress can further this effort the same way it funds the National Renewable Energy Laboratory for alternative energies.

The current set of problems with Obamacare does not stem from giving subsidies to uninsured people. It is because the true sponsors of the ACA, the insurance companies and the hospitals, have overreached and produced legislation whose intended consequences is to disrupt the self-insurance market and effect a migration toward the group and individual markets where certain insurers are dominant. They have enlisted the hospitals as their allies.

This is about to provoke a civil war between the parties in the market.

Like zombies, the monkey-wrenchers are sure to come out at night and do their mischief.