Healthcare legislation has passed. The effectiveness of the bill is yet to be determined. There has been a lot of talk over the past year about whether this is a bill can increase access and decrease costs, whether there was enough bipartisanship and whether the process was appropriate. In fact, I even addressed the lack of bipartisan collaboration in my first post.
Long ago Chris and I had a conversation about the importance of bringing people together and discussing solutions and calling out inaccurate or misleading rhetoric. And so here is a discussion on the latter.
Republicans act like someone insulted their mother when they talk about how the Democrats used reconciliation to pass healthcare. Reconciliation allows legislation to proceed without the possibility of a filibuster. In other words, bills can pass the Senate with a simple majority vote, just like the House, as opposed to a supermajority of 60 votes. This was originally used as a way to reconcile budget differences between the House and Senate, so they could send one bill to the president. Instead of compromising on the whole bill (in this case more than 2,000 pages), they could proceed with the common language and then just “reconcile” the differences in a separate bill. It is actually a very useful tool in saving countless hours in the legislative process. Sounds okay, right?
Well, Republicans are arguing that the majority is trampling the rights of the minority and voters will condemn this unacceptable action at the polls. Are they serious? They claim to be upset that the Democrats used a procedural move to get healthcare passed. Yet, what do they call a filibuster to stop a bill? Are voters really supposed to overlook one procedural tactic and not the other? Actually, do voters really care how a bill was passed?
I am not accusing the Republicans of having a monopoly on hypocrisy, because they certainly don’t. But when you want to complain that the rights of the minority are being egregiously stomped on, let’s think about whether you would have done the same to get one of your priorities passed. Of course the answer is yes, you would have. In fact, during my lifetime this is the 22nd time reconciliation has been used, and 16 of those times it was a Republican president signing the bill.
Tuesday, March 30, 2010
Monday, March 15, 2010
Don't Question Tom Coburn's Character
Senator Tom Coburn (R-OK) is very conservative; most even rightly refer to him as radical. But on February 25th, he proved to the world (or at least to those paying attention) what I already knew; he is very thoughtful and very good for our country.
During the health care summit, Senator Coburn provided thoughtful, measured and sincere policy differences from President Obama and the Democrats. Early in the summit it became clear that he, the president and a few others came into the summit with the clear intention of talking through policy differences. Other participants, led by Senators Harry Reid (D-NV) and John McCain (R-AZ), clearly had something else in mind.
Although Senator Coburn is an admitted obstructionist, do not question his integrity. He, unlike many elected officials, does not say no simply to make the other party look bad. He sticks to his principles and tries to do what he thinks is right – he will offer his opinion and if his objections are substantial enough (in his mind) and other members don’t agree, he will impede the bill’s progress. He does not care how popular he is or how he is viewed. I wish the same could be said for all of our elected officials.
Senator Coburn, or “Dr. No” as he likes to call himself, does not deny that he has stopped more legislation than most legislators have passed; in fact, he takes pride in it. He believes the less government intervenes, the better.
It is easy for other members – and even huge blocs of the public – to get frustrated at his obstructionist ways and often unwillingness to compromise. Of course I, like many others, get mad when he uses procedural tactics to stop important legislation, but no one should attack his character instead of his positions, even if they disagree with both his positions and inflexibility.
I know many people, particularly on the left, just wish Senator Coburn would go away. But at least he (unlike some other members) is thoughtful and clear about his opposition to legislative progress. I don’t wish we had more senators trying to block legislation, but I do find his honesty and thoughtfulness refreshing.
If you are going to obstruct progress, then be thoughtful in opposition. If you support legislation, then be a passionate advocate. But regardless of your position, do what you believe is good for the country, not just your party; Senator Coburn does.
During the health care summit, Senator Coburn provided thoughtful, measured and sincere policy differences from President Obama and the Democrats. Early in the summit it became clear that he, the president and a few others came into the summit with the clear intention of talking through policy differences. Other participants, led by Senators Harry Reid (D-NV) and John McCain (R-AZ), clearly had something else in mind.
Although Senator Coburn is an admitted obstructionist, do not question his integrity. He, unlike many elected officials, does not say no simply to make the other party look bad. He sticks to his principles and tries to do what he thinks is right – he will offer his opinion and if his objections are substantial enough (in his mind) and other members don’t agree, he will impede the bill’s progress. He does not care how popular he is or how he is viewed. I wish the same could be said for all of our elected officials.
Senator Coburn, or “Dr. No” as he likes to call himself, does not deny that he has stopped more legislation than most legislators have passed; in fact, he takes pride in it. He believes the less government intervenes, the better.
It is easy for other members – and even huge blocs of the public – to get frustrated at his obstructionist ways and often unwillingness to compromise. Of course I, like many others, get mad when he uses procedural tactics to stop important legislation, but no one should attack his character instead of his positions, even if they disagree with both his positions and inflexibility.
I know many people, particularly on the left, just wish Senator Coburn would go away. But at least he (unlike some other members) is thoughtful and clear about his opposition to legislative progress. I don’t wish we had more senators trying to block legislation, but I do find his honesty and thoughtfulness refreshing.
If you are going to obstruct progress, then be thoughtful in opposition. If you support legislation, then be a passionate advocate. But regardless of your position, do what you believe is good for the country, not just your party; Senator Coburn does.
Tuesday, March 9, 2010
When is it appropriate for the government to step-in?
While the most contentious dispute of the last 100 years may be Yankees vs Red Sox, the second most contentious, but no less vitriolic, is the dispute between free marketers and economic interventionists. Free marketers think that government should only intervene in a market to prevent collusion, theft, fraud, and coercion, while interventionists think governments should act to correct deficiencies and balance the playing field.
The decision as to whether the government should intervene was put on full display on March 7th, or “Oscar Night”, as it is known in some circles. In my television market, the dispute between Avatar and The Hurt Locker was preceded by the dispute between Cablevision and ABC 7. In a dispute over retransmission consent fees, ABC 7 pulled its broadcasting stream from Cablevision until the cable company agreed to pay the television station $1 per customer for their 4 million customers for the right to broadcast its transmission. In this instance, Democratic Senator John Kerry of Massachusetts asked the FCC to intervene to resolve the dispute, while Republican Representative Joe Barton of Texas feels the government should refrain.
Under cable television’s “must-carry” rules, which were enacted by Congress in 1992 and affirmed by the Supreme Court in 1994, local television stations have to option of either electing “must-carry” rights with the cable and satellite television operators or electing retransmission consent, which grants the cable provider permission to transmit their signal. So, our local television affiliates of ABC, CBS, NBC, and FOX, as well as other smaller local television stations have the option of asking cable providers for retransmission consent, where the local stations opt out of the “must-carry” option and negotiate compensation from each cable provider granting them the right to carry the station. But, if the station opts for retransmission consent, the cable company does not need to carry the station. So, if you’re a large local affiliate of one of the major networks, you’re going to opt for retransmission consent, where you have the option to make some additional money. If you’re a smaller station with limited leverage, you will opt for the “must-carry” option.
So, if you’re a cable provider, you’re in a tight spot. Either you are forced to carry a marginal local television station or, if you want to carry the station, you may have to pay for retransmission consent. We have to remember that this law was enacted twenty years ago when there were far fewer cable television channels that could be broadcast, and the cable providers had the leverage in choosing which stations it would carry on its lines. If the cable provider didn’t think that it would add viewers or subscribers by adding the local CBS affiliate, it didn’t carry the station. These regulations reversed that abuse.
But I’m not an apologist for either side. This regulation is being used today by cable providers and national broadcast networks to generate more revenue and higher profit margins. As national networks are using their local stations to negotiate higher fees from each local affiliate (fees which should stay with the local station), media experts fully expect for more retransmission consent battles across the country, as broadcasters look to make up for low advertising sales and cable providers look to preserve their profit margins.
So, should government intervene in a dispute between a television station with a federal broadcast license and cable service provider, both of which are regulated by the FCC? It certainly isn’t a matter of national security or economic stability. One could argue that this is simply the market attempting to correct a problem. Another perspective, however, holds that this dispute will result in the end of local television, the market that this regulation was designed to protect in the first place.
Economists will never agree on what constitutes an appropriate government intervention, and both sides are trying to persuade lawmakers to enact legislation in their favor. But, while it may seem absurd to take umbrage with a dispute between billion dollar companies over a self-congratulating Hollywood awards show, it seems clear that a government intervention designed to correct a 20-year old market problem is resulting in reduced choice for the every-day American, and, potentially, increased fees to access a critical tool of media communication. Perhaps government intervention should be limited to those options that expand choice and reduce cost for the citizens rather than the corporations. But wait, the Supreme Court already struck that down .
The decision as to whether the government should intervene was put on full display on March 7th, or “Oscar Night”, as it is known in some circles. In my television market, the dispute between Avatar and The Hurt Locker was preceded by the dispute between Cablevision and ABC 7. In a dispute over retransmission consent fees, ABC 7 pulled its broadcasting stream from Cablevision until the cable company agreed to pay the television station $1 per customer for their 4 million customers for the right to broadcast its transmission. In this instance, Democratic Senator John Kerry of Massachusetts asked the FCC to intervene to resolve the dispute, while Republican Representative Joe Barton of Texas feels the government should refrain.
Under cable television’s “must-carry” rules, which were enacted by Congress in 1992 and affirmed by the Supreme Court in 1994, local television stations have to option of either electing “must-carry” rights with the cable and satellite television operators or electing retransmission consent, which grants the cable provider permission to transmit their signal. So, our local television affiliates of ABC, CBS, NBC, and FOX, as well as other smaller local television stations have the option of asking cable providers for retransmission consent, where the local stations opt out of the “must-carry” option and negotiate compensation from each cable provider granting them the right to carry the station. But, if the station opts for retransmission consent, the cable company does not need to carry the station. So, if you’re a large local affiliate of one of the major networks, you’re going to opt for retransmission consent, where you have the option to make some additional money. If you’re a smaller station with limited leverage, you will opt for the “must-carry” option.
So, if you’re a cable provider, you’re in a tight spot. Either you are forced to carry a marginal local television station or, if you want to carry the station, you may have to pay for retransmission consent. We have to remember that this law was enacted twenty years ago when there were far fewer cable television channels that could be broadcast, and the cable providers had the leverage in choosing which stations it would carry on its lines. If the cable provider didn’t think that it would add viewers or subscribers by adding the local CBS affiliate, it didn’t carry the station. These regulations reversed that abuse.
But I’m not an apologist for either side. This regulation is being used today by cable providers and national broadcast networks to generate more revenue and higher profit margins. As national networks are using their local stations to negotiate higher fees from each local affiliate (fees which should stay with the local station), media experts fully expect for more retransmission consent battles across the country, as broadcasters look to make up for low advertising sales and cable providers look to preserve their profit margins.
So, should government intervene in a dispute between a television station with a federal broadcast license and cable service provider, both of which are regulated by the FCC? It certainly isn’t a matter of national security or economic stability. One could argue that this is simply the market attempting to correct a problem. Another perspective, however, holds that this dispute will result in the end of local television, the market that this regulation was designed to protect in the first place.
Economists will never agree on what constitutes an appropriate government intervention, and both sides are trying to persuade lawmakers to enact legislation in their favor. But, while it may seem absurd to take umbrage with a dispute between billion dollar companies over a self-congratulating Hollywood awards show, it seems clear that a government intervention designed to correct a 20-year old market problem is resulting in reduced choice for the every-day American, and, potentially, increased fees to access a critical tool of media communication. Perhaps government intervention should be limited to those options that expand choice and reduce cost for the citizens rather than the corporations. But wait, the Supreme Court already struck that down .
Tuesday, March 2, 2010
The Problem with College
United States Education Secretary Arne Duncan has spent all month aggressively advocating for student loan reform. He is trying to force the Senate to act on H.R. 3221, which the House passed in September.
H.R. 3221 would make the federal government the sole provider of student loans, which the administration argues will save $87 billion over 10 years, providing more opportunity to college students and funding early education programs.
The Republicans are threatening to filibuster. The Democrats can’t pass it without Republican support, and of course they don’t have that. It is the exact same argument we hear on every issue: Republicans urging market competition and the Democrats urging government intervention. Consequently, it is the exact same outcome: inaction. Nothing will change and nothing will improve.
Regardless of where you side on this legislation, there is a more important issue here, one that nobody disputes. College tuition costs way too much.
We are competing in an increasingly global economy and yet, we are making it increasingly difficult to pay for college. According to Evan Thomas’ recent article in Newsweek, tuition has been rising at twice the rate of inflation since 1982. Attending a four-year private university, he continues, costs 76 percent of median family income. Heck, even a public university costs 28 percent of the median family income.
Due to this, the next generation in America – for the first time ever – may have less formal education than previous ones. One does not require a college degree or “formal” education to be successful, but in key areas – science, technology, engineering and math – it certainly helps us maintain our leadership in the world.
I was struck while reading an article about a medical student that owes $555,000 in student loans. Obviously, she is the extreme case, but there is still something disturbingly wrong about this picture.
As someone who will be paying off student loans for at least the next decade, I ask that we focus less on from whom students should borrow (although admittedly, it does matter) and start asking why students have to borrow so much. The result of such high tuition costs is a disincentive for the next generation of students to attend college. This impacts the ability of America to compete globally; and that seems pretty important to me.
H.R. 3221 would make the federal government the sole provider of student loans, which the administration argues will save $87 billion over 10 years, providing more opportunity to college students and funding early education programs.
The Republicans are threatening to filibuster. The Democrats can’t pass it without Republican support, and of course they don’t have that. It is the exact same argument we hear on every issue: Republicans urging market competition and the Democrats urging government intervention. Consequently, it is the exact same outcome: inaction. Nothing will change and nothing will improve.
Regardless of where you side on this legislation, there is a more important issue here, one that nobody disputes. College tuition costs way too much.
We are competing in an increasingly global economy and yet, we are making it increasingly difficult to pay for college. According to Evan Thomas’ recent article in Newsweek, tuition has been rising at twice the rate of inflation since 1982. Attending a four-year private university, he continues, costs 76 percent of median family income. Heck, even a public university costs 28 percent of the median family income.
Due to this, the next generation in America – for the first time ever – may have less formal education than previous ones. One does not require a college degree or “formal” education to be successful, but in key areas – science, technology, engineering and math – it certainly helps us maintain our leadership in the world.
I was struck while reading an article about a medical student that owes $555,000 in student loans. Obviously, she is the extreme case, but there is still something disturbingly wrong about this picture.
As someone who will be paying off student loans for at least the next decade, I ask that we focus less on from whom students should borrow (although admittedly, it does matter) and start asking why students have to borrow so much. The result of such high tuition costs is a disincentive for the next generation of students to attend college. This impacts the ability of America to compete globally; and that seems pretty important to me.
Monday, March 1, 2010
Investment for the Long-Term
Recently, the American Recovery and Reinvestment Act of 2009, better known as the “stimulus,” “celebrated” its one year anniversary, and many have asked for an accounting of what it has accomplished. The President’s 2011 budget, which realistically forecasts the level of the federal deficit years into the future, has drawn the ire and rebuke of conservatives, who would like to reign in federal spending. Fiscal conservatives believe that we need to control federal spending, while Keynesians believe that the federal government needs to spend to stimulate the economy. The debate is focused on immediate spending control versus short-term economic stimulus.
While the rhetoric is littered with references to the unparalleled financial burden we are handing over to our grandchildren, the key salient point that’s missing from this discussion is the long-term value of government investment. To be frank, the country’s economic growth over the last two decades is primarily the result of the growth and spread of information technologies, i.e. computers and the internet. Today, we are still leveraging the technologies that were produced during a major period of government investment in technological innovations from ~1930s – 1970. A brief recap:
• IBM’s heavy investment in R&D in the early 1930s left the company at risk to bankruptcy, as it carried a large, unused inventory of equipment without a private market to sell it to. It was the Social Security Act of 1935 that allowed IBM to sell this inventory to the federal government.
• As has been frequently repeated, the internet was born out of the research and technology put into creating the Pentagon’s Defense Advanced Research Projects Agency (DARPA) ARPANET project in the 1960s.
• Philip Taubman’s Secret Empire details the way in which the president and other government leaders had private companies compete against one another to develop more innovative technologies during the infancy of our Cold War spy program.
While our Cold War technology investments may be sustaining our economy today, the trends show that we are falling behind in making the necessary investment to ensure that we have an economy that can sustain our population. A recent report from Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation, two nonprofit organizations in Silicon Valley, asserts that the technological innovation in our traditional technological hub is declining, and the World Intellectual Property Organization reports that the U.S. showed an 11.4% decrease in the number of international patent filings while China showed a 29.7% increase in patent applications.
How do we recapture the momentum in investment to ensure that we maintain a strong knowledge base in our economy? A reinvestment in math and science education is one way. But, this will only get us so far. We need to invest in foundational elements that serve as the basis for long-term economic growth, but no private company will make these technology or infrastructure investments alone. The prevailing value structure of Wall Street makes it prohibitive for any company to make long-term R&D or infrastructure investments that don’t show an improvement to the bottom line in THIS fiscal year. In the end, we need to accept that government plays a partnering role with private companies that allow them to invest in long-term R&D. There will be a lot of misses, but somewhere in that research is the seed of our next great economic driver. We may not be able to conceptualize what that driver is right now, but we need to invest in it now.
While the rhetoric is littered with references to the unparalleled financial burden we are handing over to our grandchildren, the key salient point that’s missing from this discussion is the long-term value of government investment. To be frank, the country’s economic growth over the last two decades is primarily the result of the growth and spread of information technologies, i.e. computers and the internet. Today, we are still leveraging the technologies that were produced during a major period of government investment in technological innovations from ~1930s – 1970. A brief recap:
• IBM’s heavy investment in R&D in the early 1930s left the company at risk to bankruptcy, as it carried a large, unused inventory of equipment without a private market to sell it to. It was the Social Security Act of 1935 that allowed IBM to sell this inventory to the federal government.
• As has been frequently repeated, the internet was born out of the research and technology put into creating the Pentagon’s Defense Advanced Research Projects Agency (DARPA) ARPANET project in the 1960s.
• Philip Taubman’s Secret Empire details the way in which the president and other government leaders had private companies compete against one another to develop more innovative technologies during the infancy of our Cold War spy program.
While our Cold War technology investments may be sustaining our economy today, the trends show that we are falling behind in making the necessary investment to ensure that we have an economy that can sustain our population. A recent report from Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation, two nonprofit organizations in Silicon Valley, asserts that the technological innovation in our traditional technological hub is declining, and the World Intellectual Property Organization reports that the U.S. showed an 11.4% decrease in the number of international patent filings while China showed a 29.7% increase in patent applications.
How do we recapture the momentum in investment to ensure that we maintain a strong knowledge base in our economy? A reinvestment in math and science education is one way. But, this will only get us so far. We need to invest in foundational elements that serve as the basis for long-term economic growth, but no private company will make these technology or infrastructure investments alone. The prevailing value structure of Wall Street makes it prohibitive for any company to make long-term R&D or infrastructure investments that don’t show an improvement to the bottom line in THIS fiscal year. In the end, we need to accept that government plays a partnering role with private companies that allow them to invest in long-term R&D. There will be a lot of misses, but somewhere in that research is the seed of our next great economic driver. We may not be able to conceptualize what that driver is right now, but we need to invest in it now.
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