I am the last person to defend the behavior of the Wall Street tycoons who brought down the economy by their actions over the past eight years, but we were ill served by the publication of Neal Gabler's rant about the “economic sociopaths” of Wall Street (Boston Globe, October 31, 2009: A11).
The diagnosis of a psychiatric condition (like those articulated in DSM-IV-R) should be done on an individual basis by a highly trained specialist. Such diagnoses should not be applied in a broad brush way to any subpopulation, even Wall Streeters deserve that amount of restraint. Though the phrase is an appealing metaphor.
Furthermore, there is in psychology an ongoing argument about whether behavior is driven by person or by situation. Situations, it is argued, call forth relevant behaviors. One could argue that over the past eight years, we ,through our government, created the situation in which this irresponsible behavior was appropriate. We cut taxes, we repealed Glass-Steagall, we neglected regulation, and we glorified winners. We got the behaviors that might have been expected.
On one point I agree with Mr Gabler. It is a great shame that President Obama appointed two men who facilitated those situational changes, Mr. Geithner and Mr. Summers, to be major figures on the team trying to undo those disastrous changes in the situation.
Sent to Boston Globe
Tuesday, November 3, 2009
Allston shoudn't suffer on Harvard's account
Your advice to Harvard points out the wrong strategy (Allston shouldn't suffer on Harvard's account, Boston Globe, October 28, 2009: A14).
What Harvard should do is go full steam ahead on the Science Campus Development even if it means dipping into the endowment. This is exactly the time to do so.
Money can be borrowed at reasonable rates and Harvard has impeccable collateral. It can buy more construction for the dollar in a recession. Stopping and restarting projects are more expensive than continuing on.
Finally, counter-cyclical spending of this magnitude will give a big boost to the city, region, and state economies.
Be a better citizen, Harvard.
Sent to Boston Globe
What Harvard should do is go full steam ahead on the Science Campus Development even if it means dipping into the endowment. This is exactly the time to do so.
Money can be borrowed at reasonable rates and Harvard has impeccable collateral. It can buy more construction for the dollar in a recession. Stopping and restarting projects are more expensive than continuing on.
Finally, counter-cyclical spending of this magnitude will give a big boost to the city, region, and state economies.
Be a better citizen, Harvard.
Sent to Boston Globe
Afghanistan
Your two op-eds today ([Victor Sebestyen] Transcripts of Defeat & [Nicholas Kristof] More Schools, Not Troops, New York Times, October 29, 2009: A23) provide forceful counter-aguments to that of Max Boot a few days ago (Max Boot, There's No Substitute for Troops on the Ground, New York Times, October 22, 2009).
It is clear that we do not have the stomach to put the necessary force on the ground. With 110,000 troops, the Russians were unsuccessful in "pacifying" Afghanistan. Counter insurgency experts estimate that 390,000 troops would be required (that's the Petraeus doctrine, not mine)to be successful.
Even that may be too optimistic. There are 780 cities, towns and villages in Afghanistan. Max Boot tells us that to hold the town of Nawa took 1000 marines carrying out a clear and hold policy. To succeed in them all would require 780,000 troops
Do we and NATO have enough troops? Are we prepared for the kind of casualties that would be incurred? I think not.
The time has come to try the Kristoff strategy: saturate the land with schools: Cost effective, less dangerous, and with a long term payoff. If we go the escalation route, we need to be sure that we can win, before we commit more troops and we will probably have to commit many more than are presently contemplated.
Sent to New York Times
It is clear that we do not have the stomach to put the necessary force on the ground. With 110,000 troops, the Russians were unsuccessful in "pacifying" Afghanistan. Counter insurgency experts estimate that 390,000 troops would be required (that's the Petraeus doctrine, not mine)to be successful.
Even that may be too optimistic. There are 780 cities, towns and villages in Afghanistan. Max Boot tells us that to hold the town of Nawa took 1000 marines carrying out a clear and hold policy. To succeed in them all would require 780,000 troops
Do we and NATO have enough troops? Are we prepared for the kind of casualties that would be incurred? I think not.
The time has come to try the Kristoff strategy: saturate the land with schools: Cost effective, less dangerous, and with a long term payoff. If we go the escalation route, we need to be sure that we can win, before we commit more troops and we will probably have to commit many more than are presently contemplated.
Sent to New York Times
Saturday, October 31, 2009
Seeking the Home-Field Advantage in the Public Option
The trigger suggestion is insane (Seeking the Home-Field Advantage in the Public Option, New York Times, October 23, 2009).
For nearly forty years, the Health Insurance industry has opposed improving coverage. They now claim that they can control costs and provide universal coverage. They are not to be believed.
Only a competing public option system will do. The call for a trigger is absurd. If the industry had the will it could have done what it proposes sometime in the past forty years. It has not, giving them a few more years would be an unreasonable waste of time during which many would remain uninsured.
The idea of small cooperatives is also un-workable. That is the same formula that the industry imposed with the Medicare drug plan -- small cooperatives can bargain with the drug cartels (I mean the pharmaceutical companies) but the government cannot bring its massive purchasing power to bear. That plan has no hope of cost reduction.
The President must stand firm on the need for a public option and Congress must vote for a public competitor to be in the mix.
I would prefer to see a single payer plan in place. The most compelling reason for moving quickly to a form of single-payer health insurance is the advancement of science.
Once genetic screening techniques are perfected, so that each individual's propensity for each and every disease is known from an early age, the only form of health insurance that makes sense will be the single-payer form. The private health insurance industry will go the way of the dodo, as no responsible U.S. Government will allow an unregulated market in which Insurance Companies can cherry pick for coverage those with a low propensity to get sick while excluding those from coverage who are likely to do so.
Sent to the New York Times
For nearly forty years, the Health Insurance industry has opposed improving coverage. They now claim that they can control costs and provide universal coverage. They are not to be believed.
Only a competing public option system will do. The call for a trigger is absurd. If the industry had the will it could have done what it proposes sometime in the past forty years. It has not, giving them a few more years would be an unreasonable waste of time during which many would remain uninsured.
The idea of small cooperatives is also un-workable. That is the same formula that the industry imposed with the Medicare drug plan -- small cooperatives can bargain with the drug cartels (I mean the pharmaceutical companies) but the government cannot bring its massive purchasing power to bear. That plan has no hope of cost reduction.
The President must stand firm on the need for a public option and Congress must vote for a public competitor to be in the mix.
I would prefer to see a single payer plan in place. The most compelling reason for moving quickly to a form of single-payer health insurance is the advancement of science.
Once genetic screening techniques are perfected, so that each individual's propensity for each and every disease is known from an early age, the only form of health insurance that makes sense will be the single-payer form. The private health insurance industry will go the way of the dodo, as no responsible U.S. Government will allow an unregulated market in which Insurance Companies can cherry pick for coverage those with a low propensity to get sick while excluding those from coverage who are likely to do so.
Sent to the New York Times
There's No Substitute for Troops on the Ground
Thee may be no substitute for troops on the ground (Max Boot, There's No Substitute for Troops on the Ground, New York Times, October 22, 2009), but do we and NATO have enough troops? He points to the town of Nawa where 1000 marines have carried out a clear and hold policy. About 400 Afghan troops assist them.
However there are 780 cities, towns and villages in Afghanistan. Do we have 780,000 troops to send east to hold and clear all those cities, towns and villages? I think not.
Could we be more optimistic and argue that when half the cities, towns, and villages were secure and flourishing, then a tipping point would be reached and that the Taliban and Al-Qaeda would acknowledge defeat? That would take some 390,000 troops, a far cry from what is proposed; but those are the kinds of numbers that counter-insurgency experts think necessary.
We need to be sure that we can win, before we commit more troops.
Sent to the New York Times
However there are 780 cities, towns and villages in Afghanistan. Do we have 780,000 troops to send east to hold and clear all those cities, towns and villages? I think not.
Could we be more optimistic and argue that when half the cities, towns, and villages were secure and flourishing, then a tipping point would be reached and that the Taliban and Al-Qaeda would acknowledge defeat? That would take some 390,000 troops, a far cry from what is proposed; but those are the kinds of numbers that counter-insurgency experts think necessary.
We need to be sure that we can win, before we commit more troops.
Sent to the New York Times
The New Untouchables
While I agree with Thomas L. Friedman that education must be the driver of our economic recovery, there is something missing in his analysis of the American decline (New York Times, October 21, 2009: A29).
He quotes approvingly Todd Martin's analysis of the loss of competitiveness. However, from 1980 to 2006, productivity rose at a rate of 2.2% per year. That is it was over 75% higher in 2006 than in 1980. On the other hand, real wages only increased 39% and from 1993 to 2006 only increased by 16%.
The fruits of increased productivity were not captured by employees but went to managers and shareholders. Clearly young people observing this stagnation in wage levels might well become unmotivated to take on the tough educational experiences that we all agree are necessary in our society today.
Sent to New York Times
--
He quotes approvingly Todd Martin's analysis of the loss of competitiveness. However, from 1980 to 2006, productivity rose at a rate of 2.2% per year. That is it was over 75% higher in 2006 than in 1980. On the other hand, real wages only increased 39% and from 1993 to 2006 only increased by 16%.
The fruits of increased productivity were not captured by employees but went to managers and shareholders. Clearly young people observing this stagnation in wage levels might well become unmotivated to take on the tough educational experiences that we all agree are necessary in our society today.
Sent to New York Times
--
Wednesday, October 21, 2009
The Pay Problem
The current compensation system in organizations is broken (The Pay Problem, David Owen, New Yorker, October 12, 2009). One solution to excessive executive compensation is to take seriously the fact that a corporation's success is contributed to by every member of the organization from the janitor -- if that role has not been outsourced -- to the research scientist at the bench, to the middle managers, up to the CEO.
Yes, each makes a differential contribution. Let this be reflected in their base salaries. But when it comes to bonuses based on the firm's performance, let each share the same percentage. In dollar terms, the differential will be there, but each will be rewarded for the firm's success.
I doubt that this can be sanctioned by law, but it seems like a good norm for companies, their compensation committees, and their shareholders to adopt.
Sent to the New Yorker
Yes, each makes a differential contribution. Let this be reflected in their base salaries. But when it comes to bonuses based on the firm's performance, let each share the same percentage. In dollar terms, the differential will be there, but each will be rewarded for the firm's success.
I doubt that this can be sanctioned by law, but it seems like a good norm for companies, their compensation committees, and their shareholders to adopt.
Sent to the New Yorker
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