Wednesday, August 31, 2011

Lessons for CEO's Who Want to be Liked

Will Wilkinson has noticed that life isn't fair... for billionaire CEO's who aren't named Steve Jobs.
As I was watching my social media streams froth with praise for the man in the black turtleneck, it occurred to me that, as lovely as I find Apple's gizmos, Mr Jobs's wealth, like that of other billionaire barons of the information age, was built in no small part upon an intellectual-property regime that I and many others believe to retard progress while concentrating massive rewards upon a privileged few, generating unfair and unproductive inequality.... I endorse [the] point that charity very often does rather less to improve quality of life than selling people ever better products at ever lower prices. But this line of reasoning hasn't convinced very many of us that, say, Charles and David Koch's vast wealth is proof of their successful service to humankind.
There are some obvious retorts:

First, people don't detest Charles and David Koch, or direct wild anti-Semitic conspiracy theories against George Soros, because they're rich, because they ran companies, or for any reason other than how they're trying to use their fortunes to influence legislators and elections. If you could retroactively change the recipients of their contributions, such that the Koch brothers gave to Soros' causes and vice versa, the effect would be to flip the sentiments of those who love and hate them.

Second, while charitable contributions might help a corporation or CEO deal with public relations problems, or even to rehabilitate their public image, for the most part people neither know nor care about a particular corporation's charitable activities. You're more likely to get a strong reaction to corporate "charity work" if it is revealed that what corporation is portraying as charity turns out to be a thinly veiled measure to expand its markets and market share, to advance its lobbying goals, or some other form of self-interested behavior.

Third, few pay attention to the CEO's of the world. Most people don't know or care who runs any given company. When does that change? When there's a scandal or problem that results in media attention. Why does Steve Jobs get good press, while peole like Ken Lay, Jeffrey Skilling, Conrad Black, Bernie Ebbers, Dennis Kozlowski, and Bernie Madoff get bad press? In no small part because Jobs hasn't looted his company, committed massive financial fraud or other crimes, and ended up being criminal prosecuted, convicted and/or jailed.

Wilkinson also forgets how the public perception of Jobs has changed over the years. Jobs wasn't a nationally beloved figure when he was forced out of Apple, and both he and his company were viewed with skepticism when he returned. For that matter, Wilkinson forgets how the public perception of Bill Gates has changed over the years. Gates received considerable praise and acclaim during the rise of Microsoft, and even through the era when, under his leadership, Microsoft stopped innovating in favor of producing products that mirrored the functionality of other people's innovations, then using anti-competitive tactics such as bundling in order to crush their competitors in the marketplace. Although the Bill and Melinda Gates Foundation has helped establish Gates as a philanthropist, and it does appear that Gates wants the public to appreciate his genius, it's never been clear to me that Gates has <em>personally</em> cared whether the perception is that he's a benevolent genius or an evil genius. As a family man, though, he had to start thinking about the impact of his reputation on his family and, frankly, you or I would feel the pinch from a $100 donation far more significantly than Gates has felt the pinch of his $billion+ contributions.

The number one lesson for CEO's is probably to stay out of the public eye. Run your company adequately, avoid major scandals, and retire with your billions. But let's say that you are running a large company, look at Steve Jobs and turn green with envy. What can you do?

1. Start By Doing Your Job

When you look at your stock market valuation and say, "My job as CEO is to bring new value to this company," do your thoughts immediately turn to, "So how do I rent-seek from local, state and the federal government, get massive subsidies, talk up my stock to investment houses, leverage any monopolistic advantage my company enjoys, and otherwise game the system," or do your thoughts turn to, "How do I innovate, create new products and services, improve existing products and services, and increase value to the consumer?" With due respect to the modern idea that a CEO's primary job is to pimp the stock, the public will like you better if you build wealth through innovation.

Don't play the "whocouldaknowed" game. "Whocouldaknowed that if we neglected quality for twenty years, we would go from being the world's number one manufacturer to being bankrupt?" "Whocouldaknowed that 10-20% annual inflation in housing values reflected a bubble?" Since you ask, when that question is applied to your industry, you could have known. Unless we're talking earthquakes and tsunamis, in which case it's your job to be prepared, it's your job to know. You don't think you're paid enough to understand your industry and the competition? C'mon.

2. Present Yourself in a Positive Manner

Don't wait for the press to come to you. You need to go to the press, on your terms. Work with public relations professionals to create buzz and excitement about your company, its products and services. Even when creating that buzz, try to under-promise. Then when you step before the cameras to unveil the genius of yourself and your company, do your best to over-deliver.

If you deliberately take actions that you know are going to alienate millions of people, stop and think about whether you're going to be happy only being liked by some percentage of the remaining population. If the answer is "no," consider putting off your actions until after you leave your company, or finding a different means to your desired end.

3. Perhaps You Need an Alter-Ego

Let's face it. If you're a successful CEO you're probably not the nicest, warmest person in the world. You may be a world-class jerk. That's not the face you want to show to the public. Look for an archetype that works for your industry. Kindly grandfather, cool uncle, something that will resonate with the public. That's the face you need to consistently present to the public. You can't do the cool uncle with wire rimmed glasses and a black turtleneck who doesn't visit very often but, when he does, always brings the coolest presents - that's been done. But you get the concept, right?

4. Perhaps You Need... A Funny Suit, or Clown Make-Up?

Perhaps due you your appearance, personality, industry, or other factors you need to take the alter ego thing a step further. You can't make a silk purse of of a sow's ear - or maybe you tried to convince your customers that you in fact had created "sow's ear silk" and that's why you have a public relations problem. Perhaps you want to benefit your company by having a Steve Jobs-type public perception of the corporation's leadership and, despite being a warm, telegenic person, you recognize that your tenure won't be long enough for the company to truly benefit from making you its public face.

Quickly: Who is the CEO of KFC? Who is the CEO of McDonalds? Who is the CEO of Wendy's? The average consumer is probably thinking, "Colonel Sanders, Ronald McDonald and Dave Thomas," never mind that two are deceased and the third is a fiction. Dave Thomas didn't become the public face of the company until a number of years after he resigned from leading the company. Harland Sanders was never in the military and didn't start wearing his trademark outfit until he was 55. If you can create an effective fictional face for the company, even if it's a fictionalized version of "you", you may find that your public image persists far beyond your tenure with your company.

5. Don't Claim Accidental Successes as Great Personal Achievements

You're the CEO and are stepping forward as the public face of your company, so you get to claim credit for your company's work. But if your company has not done anything noteworthy, an increase in profits due to government subsidies, war, natural disasters, and the like isn't something the public is apt to see as a great accomplishment. Ask yourself, do you actually contribute anything to your company? You may tell yourself that nobody else can do your job, but the odds are overwhelming that it's not true - and even if it's true right now, it won't remain true. Had somebody other than you been CEO of the company, what would be different? If the answer is "nothing", you're nothing special.

6. Be Special

If you want the world to think that you're special, prove that you are special. Let's take a look at Steve Jobs: He started a computer company out of a garage that helped bring about the era of the personal computer, spearheaded the development of a GUI-based operating system that led to a transformation in the way people interact with technology, when forced out of his company started NeXT and acquired Pixar, sticking with the former until he returned to Apple and (in the face of considerable skepticism) rolled the technology into a next-generation operating system and sticking with the latter through its transition from an unsuccessful computer hardware company to a highly successful animation studio, then produced innovations in the manner in which people buy music, in the music player, and ultimately in the cellular phone and tablet computer technology, with the rest of the market playing catch-up and producing copycat devices. You... did what, again?

7. Stop Letting the Bean Counters Define Your Business Model

Steve Jobs has a wonderful list of successes, but he also has a long list of expensive failures, both in terms of product releases and business decisions. Apple gave up market share with the Apple II because he didn't want to market it to small businesses, but the Apple III was a colossal failure. Outsourcing the development of key portions of its GUI OS to Microsoft, without a non-compete? Major fail. Apple computers were bigger and boxier than a lot of competing products because of a fixation on design - with a well-designed computer having no need for a fan. Do you recall the first Apple "portable" computer? The Lisa. The Newton. Not bouncing back from the Newton and letting other companies create then dominate the PDA market. But when you look back on a lot of Apple's discontinued products or failures - those that occurred under Jobs, not those attributable to John Sculley - you often see the kernel of what is to come. Cutting edge stuff that's hitting the market too early, or at too high of a price point, but which ultimately becomes commonplace.

Do you want to lead your company into making the mistakes of a Sculley, focusing on limiting the experimentation and innovation of somebody like Jobs and ultimately forcing him out of the company? Do you want to be like Bill Hewlett and David Packard, whose investment in HP Labs made the company an innovated and market leader, or a Carly Fiorina who presided over what appears to be an era of outsourcing, R&D cuts and reduced quality control in the name of short-term profits? Do you want to be like Dell, so focused on cost-accouting and increase margins that you don't even realize that you're giving away the core of your business? Maybe your company can't afford to make mistakes on the same scale as Steve Jobs, but don't expect to be as famous or to have successes on the same scale if you eschew quality and innovation in favor of risk-avoidance and short-term profit.

8. Recognize When It's Time to Give Up

Sad to say, some industries and industry practices simply aren't compatible with your having a great public image as CEO. For example, if your company makes its fortune by chopping the tops off of mountains to extract coal, leaving behind a poisoned, scarred landscape, odds are you're better off keeping your head down. "That's not fair", you say? "Steve Jobs hasn't made much noise about it, but under his leadership Apple has taken advantage of tax breaks, funneled revenues through overseas shell companies to avoid taxes, used cheap labor in Chinese factories, and appears to have concerned himself with environmental issues only to the extent that there's a P.R. advantage"? Who said life was fair?

Monday, August 29, 2011

Manufacturing, Outsourcing and Jobs

Forbes recently ran a series of blog posts examining, among other things, how Dell's focus on short-term profits led to their outsourcing more and more of their business, to the point that the company to which they had outsourced their operations effectively became a competitor. The issue, according to the author, is less that Dell outsourced and more that they focused on costs and profit margins without considering what they were bringing to the consumer experience:
This comment is in fact an illustration of the mental guide-rails generated by cost accounting. There is an automatic assumption that when faced with a market challenge the way to be more competitive is to cut costs. The possibility of adding more value is unconsciously eliminated. It would be wrong though to say that cost accounting is the main cause of these problems. But it is a contributing factor. With decisions and thinking and values based on cost-accounting and short-term profits, Dell’s fate was sealed. If decisions and thinking and values had been based on how could Dell deliver more value to customers sooner, the outcome would not have been predetermined, as Apple [AAPL] has shown.
The articles explain how, due to outsourcing, an economy can bleed high tech jobs to the locations at which the outsourcing occurs:
The U.S. has lost or is on the verge of losing its ability to develop and manufacture a slew of high-tech products. Amazon’s Kindle 2 couldn’t be made in the U.S., even if Amazon wanted to:
  • The flex circuit connectors are made in China because the US supplier base migrated to Asia.
  • The electrophoretic display is made in Taiwan because the expertise developed from producting flat-panel LCDs migrated to Asia with semiconductor manufacturing.
  • The highly polished injection-molded case is made in China because the U.S. supplier base eroded as the manufacture of toys, consumer electronics and computers migrated to China.
  • The wireless card is made in South Korea because that country became a center for making mobile phone components and handsets.
  • The controller board is made in China because U.S. companies long ago transferred manufacture of printed circuit boards to Asia.
  • The Lithium polymer battery is made in China because battery development and manufacturing migrated to China along with the development and manufacture of consumer electronics and notebook computers.
An exception is Apple [AAPL], which “has been able to preserve a first-rate design capability in the States so far by remaining deeply involved in the selection of components, in industrial design, in software development, and in the articulation of the concept of its products and how they address users’ needs.”
The series is offered under the theme, "Why Amazon Can't Make A Kindle In the USA", which, as the counter-example of Apple indicates, is not the principal problem. The problem is that when you outsource high tech manufacturing, you make it more likely that a lot of the jobs associated with any given technology will end up being located in the foreign nation. It's much less of a concern that Kindles (and Apple products) are assembled in Asia, or even that components of those products are manufactured in Asia, as compared to the loss of the industrial design, software, and similar jobs associated with the products and industries. This is the source of my skepticism of the conceit of Michael Boskin, that it is irrelevant to our nation's future whether we manufacture computer chips or potato chips. It may be that on the factory floor, there's little difference between making $10/hour frying potatoes as opposed to $10/hour assembling iPods, but when you start thinking about what our economy needs to sustain a healthy middle class, let alone to be a future leader in the design and production of high tech products, you need to avoid exporting the design and manufacturing expertise associated with those products. The articles note that even as our nation talks about developing future technologies, we tend not to ignore the fact that the associated manufacturing job opportunities are most likely to arise in other nations:
The lithium battery for GM’s [GM] Chevy Volt is being manufactured in South Korea. Making it in the U.S. wasn’t feasible: rechargeable battery manufacturing left the US long ago. Some efforts are being made to resurrect rechargeable battery manufacture in the U.S., such as the GE-backed [GE] A123Systems, but it’s difficult to go it alone when much of the expertise is now in Asia.
It's not "all bad" to export manufacturing jobs, particularly low-skilled jobs in dirty industries. Leaving issues of the environment and worker exploitation in those countries aside for the moment, there is a domestic gain in obtaining certain components and products from other nations at lower prices, while minimizing the domestic impact of many of the environmental issues associated with those industries. Even back in the 1980's, computers were packed full of components manufactured in overseas factories.
The view that the migration of mature manufacturing industries away from developed countries like the USA is just part of the healthy natural process of economic evolution that allows resources to be redeployed to new, higher potential businesses is certainly widespread. It is however mistaken. As Pisano and Shih point out in their HBR article, “It ignores the fact that new cutting-edge high-tech products often depend in some critical way on the commons of a mature industry. Lose that commons, and you lose the opportunity to be the home of the hot new businesses of tomorrow.” For instance: once silicon-processing and thin-film deposition capabilities are gone, it’s hard to become a major player in solar panels.
As the author puts it, focusing on "short-term financial gain at the expense of core capabilities is a very dangerous way to go if the company wants to survive." Apple almost died at the hands of its bean counters who, having forced Steve Jobs out, neglected product development and quality control, and authorized clone-makers only to yank the carpet out from under them the moment they realized that the clone-makers were building cheaper and arguably better machines. I don't know if Jobs had to remind people of that history as he rebuilt the company, or if by the time Apple was again turning real profits the major shareholders decided that you don't argue with success. While I have no particular reason to be optimistic, let's hope that at least some U.S. companies are taking a longer view of profit and asking, "Why can't we be more like Apple?"

What's the Benefit of an Amazon Tablet

According to the Wall Street Journal, an "analyst" has proposed that Amazon could produce a low-cost tablet computer that could "disrupt a tablet market dominated by Apple".
Forrester Research analyst Sarah Rotman Epps wrote that while "Amazon taking on Apple is a bit like David taking on Goliath," if Amazon proves willing to sell its tablet relatively cheaply and leverage its brand and surplus of online content, it could make a significant mark.

Specifically, if Amazon prices the as-yet-undisclosed tablet at less than $300, the Seattle-based company could sell up to 5 million units in the fourth quarter of this year, the analyst wrote.
By the same token, any electronics manufacturer could produce a high quality, low price tablet computer and "disrupt" the tabloid market. I recognize that the key factor here is "Amazon" - the idea being that Amazon sells a ton of ebooks and manufactures the Kindle, and thus could in theory achieve economies of scale that would be difficult for others to achieve. Even a Photoshopped logo on a medium-sized tablet can create a certain level of excitement.
What we all want is a hybrid of the [Kindle and iPad] - a kindle that is a full blown tablet computer with a browser, apps, and an OS. It looks like Amazon is going to bring that to market this fall. I'm getting one for myself and one for the Gotham Gal. And I'm pretty sure my mom and dad are getting them too. It looks like a killer product.
Except what I hear from Kindle fans is, "It's small, light, easy to hold, and liquid ink is wonderful to read," versus the larger format, heavier iPad with its much greater functionality and color display. Why not read ebooks on your smart phone? Too small, and no liquid ink? To me it seems like the "hybrid" misses the mark: You lose the larger screen size and quality display of the tablet, but you also lose the liquid ink offered by the Kindle. (It is theoretically possible to create a display that incorporates both LCD and liquid ink, and I believe I saw an Apple patent application for such a display, but I have no reason to expect that the early generations of those screens will be available on entry model devices.)

If you end up with a table that's too small to be an effective tablet, too large to replace your cellular phone, needs to be carried in a purse or briefcase instead of a pocket, and is best used for reading ebooks, you're really talking about a Kindle. When you add color, apps and additional Internet functionality, you have something that's much more of a "Kindle plus" than an iPad-Kindle hybrid. That is to say, rather than appealing to people who might be choosing between a Kindle and an iPad, such a mid-sized, mid-functionality device seems aimed at people who want a device that falls between a smart phone and a tablet - something to buy in addition to or (for those who are willing to forego liquid ink) instead of a Kindle. I'm reminded of Steve Jobs' reaction, a while back, to rumors of a smaller-sized iPad. Once you use the iPad, I don't think you yearn for a smaller version. But people who use the Kindle seem eager to get a color version, or an Android model that runs a browser and their favorite apps. So the excitement isn't, "Apple might make a smaller iPad," but, "Amazon might sell a branded version of a small tablet that could have some of the functionality of an iPad." When phrased that way, it's not particularly exciting.

Something else to consider: Apple's control of its supply chain and manufacturing allows it to sell iPads at a highly competitive price while achieving significant profit margins. When it saw the first round of competitors' tablets on the horizon, it came out with the iPad 2 so that it would stay equal to or ahead of those products while it prepared to leapfrog them with the iPad 3. Amazon can afford to sell a smaller, inexpensive tablet at close to cost, but how would that help Amazon? Amazon will add functionality to the Kindle in order to maintain its position as the market-leading ebook reader, and it would no doubt try to boost its own app store through the next-generation Kindle or "hybrid" device, but it's difficult to imagine that a smaller sized tablet, sold near cost, is going to have a significant impact on the tablet market, and without the generation of profits for R&D it's difficult to see how any short-term market gain would be sustainable. If in fact Amazon reveals a significant market for smaller tablets, Steve Jobs' past dismissals aside, Apple will produce a product for that niche.

Here's something for Apple's competitors to consider: Do you want to take the path of pharmaceutical companies, trying to design products that do the same thing as your competitors' blockbuster drugs but which provide little additional benefit to patients, or do you want to be like the company whose products you're copying - and produce well-engineered, breakthrough, market leading products in your own right? If Amazon decides that its future Kindles should be mini-iPads, it would be abandoning the latter approach in favor of the former.

Sunday, August 28, 2011

Living in a Bubble

Atrios comments,
Pampered over-privileged scribe finally discovers that it's kinda bad when people don't have any jobs or money. Better late then never I guess.
It's difficult to argue with that summary of Kristof's column. How can you not notice unemployment or its impact on the lives of ordinary people unless you live in a bubble? Would there have been too much risk of a paper cut, were somebody to suggest that Kristof scan down the page from his own column and occasionally take note of Paul Krugman? Kristof has realized,
Unless more people are working, paying taxes and making mortgage payments, it’s difficult to see how we revive the economy or address our long-term debt challenge. While debt is a legitimate long-term problem, the urgent priority should be getting people back to work. America now has more than four unemployed people for each opening. And the longer people are out of work, the less likely it is that they will ever work again.
I had thought that this stuff was pretty obvious, even back in 2009. I wonder if, two or three years from now, Kristof will suddenly realize that the choice to focus on economic factors other than unemployment (and the difficulties of individual homeowners) was a deliberate policy choice, even if we grant the decision-makers the benefit of the doubt and assume that they believed that their choices would lead to lower unemployment.

I think Kristof is sincere - I believe that all of this passed below his notice, and that he truly believes we need to focus on lowering unemployment. But given how long it took him to produce this column, I feel like I'm damning him with faint praise.

Thursday, August 25, 2011


The Huffington Post will do anything for traffic, but really - Bachmann has unflattering shoes? (Memories....) My guess is that a lot of people would find my shoes to be unflattering, not that it matters given my gender. How many guesses do you need to figure out how I pick them?

The Dummies Are Real People!

I guess that's sort of a vindication for Newt.

Tuesday, August 23, 2011

The Problem is Probably With the Compensation

The New York Times informs us,
Although the economy is wobbling and nearly 14 million people are looking for work, some employers are still having a hard time finding skilled workers for certain positions. Manufacturers in particular complain that few applicants can operate computerized equipment, read blueprints and solve production problems. And with the baby boomers starting to retire, these and other employers worry there will be few young workers willing or able to replace them.
This reminds me of prior complaints by manufacturers, as reported in newspapers like the Times, that they're unable to find employees who are fully trained, highly skilled, experienced and willing to work for $8-$10/hour. It apparently doesn't occur to them that if they offer an entry-level wage, they should expect that the applications they receive will be from entry-level workers. There are plenty of potential employees out there who can "operate computerized equipment, read blueprints and solve production problems". If for some reason they aren't applying for work with your company, odds are they have better prospects elsewhere. While it's accurate to tell kids that, if trained in industrial robotics and able to solve manufacturing issues on the fly, they can find jobs "starting in the $40,000 range and moving up to six digits, including overtime", if such job openings were either typical or plentiful in our present economy we would be in a much different economic situation.

Monday, August 22, 2011

Where's Gadhafi

Until he shows up somewhere, I'm stuck with the image of one of those ultra-luxurious escape pods created by the supervillains of the early James Bond films.

Sunday, August 21, 2011

When Prosecutions Go Wrong

It's one of those news stories you don't really expect to hear: That three men, convicted of the gruesome murder of three children during the satanic panic of the late 1980's and early 1990's, have been freed - the so-called "West Memphis Three".  Serious doubts were raised about the case before the defendants were convicted, but it appeared that they were destined to spend their lives behind bars.

The case stands in many ways as an exercise in contrasts with Casey Anthony - instead of a reasonably attractive woman, the defendants were three teenage boys at the margins of society, easily cast by the prosecutor as having killed the children as part of a fantasized satanic ritual. One defendant, whose IQ is reported to be 72, confessed and retracted, pretty much sealing his fate. The others, implicated in the confession, were apparently convicted in no small part due to the misconduct of the jury foreman. But the evidence, including the confession, was thin - what you really had were three scary teens crossed with a popular culture that was remarkably receptive to theories of hideous crimes being committed against children by the many satanists they imagined were living among us. The prosecutor is puffing his chest and pretending that the deal that freed the three defendants is somehow made necessary by the passage of time. I'm not going to repeat the facts of the crime, but I don't believe that for a moment. If the prosecutor believed he had a strong chance of again convicting the three he would be refusing deals and insisting upon a new trial.

The problem for the prosecution is not that evidence has been lost - it's that evidence has been found. Specifically, DNA evidence implicating the stepfather of one of the boys, who just happens to be the last person to see the boys alive. If the prosecutor announced that he believed the three were innocent, he would have to explain why he was not prosecuting the most likely suspect (at this point, more likely than the three his deal just released), the answer being "Because the trial and the decades of defense of a terrible investigation and problematic prosecution have created an environment in which a conviction of anybody else would be all-but-impossible". And let's not forget, the deal the prosecutor cut pretty much eliminates the possibility of a civil lawsuit.

The case reminds me of the prosecution of Randall Adams, publicized in The Thin Blue Line. The prosecution in that case, after slipshod investigation, pursued an innocent adult with no criminal record and overlooked overwhelming evidence that the then-juvenile who committed the crime was the perpetrator. Cynics have suggested that the choice to prosecute Adams was motivated in part by the fact that, in a killing of police officers, the prosecutor wanted to secure a death sentence. I think it's simpler than that: Having focused on a particular narrative, the police and prosecutor turned a blind eye toward anything that interfered with their narrative. Was there evidence that should have caused them to reconsider? Yes - and a lot of it. But they weren't interested.

In the "West Memphis Three" case, having quickly secured a confession from one of what we might call "the usual suspects" - kids who didn't look quite right and certainly didn't behave within the expected norms of the community - there was no need to look at the rest of the evidence. Three kids disappear somewhere, the last person to see them alive is a stepparent of questionable character? That's the sort of scenario that should have the police taking a long and hard look at stepdad. But no, they were already fixated on the "evil teenage satanists".

Once you fall under the shadow of suspicion it's difficult to find your way out. In relation to the Casey Anthony case, some argued that the prosecution hadn't shown where or how a crime occurred so she shouldn't be convicted. My response remains, the evidence was legally sufficient for a conviction and for upholding the conviction on appeal. Yes, it was circumstantial, but there was sufficient evidence to support an inference by the jury of first degree murder. Casey Anthony didn't have any satanists to point at when she suggested that she had no idea how her child ended up in a shallow swampy grave, so she was the obvious suspect. What's amazing is how little of a hand wave it can sometimes take to distract your audience from what's actually happening.

Friday, August 12, 2011

Sincerely Yours....

Via John Casey, an assertion about the need for sincerity in public debate:
It is naïve not to expect that the practice of politics demands some amount of assertion that is for purposes other than conveying the truth. But reasoned debate presupposes mutual knowledge of sincerity. In societies in which the media produces only propaganda, it is not possible.... There is thus a special obligation for those in the public arena to take their speech as so constrained, as well as a special obligation not to indulge in unnecessary suspicion of our fellow citizens.
It's impossible to draw a bright line and say, "You can shade the truth for political purposes to this point, but no further." But facts often do support multiple inferences, and there are often merits to competing ideas that must be to some degree reconciled or balanced in order to form a single policy. To that degree, no question, public debate requires that the participants accept that each others' interpretations of the facts and policy arguments are offered in good faith.

That said, I disapprove of the media culture in which it's possible for a politician to say one thing in the green room, say another on a show, and have nobody call him on it. Between guests, the philosophy appears to be, "We all need to lie at times in order to be reelected, so it would be dangerous to bring the green room confession into the live show," and for hosts the philosophy seems to be, "If I embarrass my guest on the air, he won't come back - and it's possible that nobody else will, either, for fear of having their chances for reelection harmed by public knowledge of the truth." How can you credit either the media or the politicians with advancing informed debate when everybody knows that one or more of the participants is being insincere and the debate displayed to the public is nothing more than a sideshow act. It does help explain how politicians who seem to be at each other's throats in any joint television appearance are later seen laughing and glad-handing, but it perpetuates problems of public perception that make it difficult to achieve compromise or to address some extremely important issues.

Casey extends the argument,
The piece focused on the problem of insincere speakers, but the same point might have been made about listeners who won't accept others' claims to sincerity.  In a lot of ways, that would be worse.
That too seems to be a double-edged sword. If politicians agree behind-the-scenes that the eventual outcome of a policy dispute will be X, then go on television and argue that the world will end if the outcome is not Y or Z, is it worse to assume that they're being duplicitous or to assume that they're being sincere?

What would be better, I think, would be for politicians to step back from their insincerity, and to create a context in which it is reasonable for people to believe that they are sincere in their public statements. Instead they're poisoning the well themselves, then asking us to trust their sincerity without so much as a "This time it's different." With a sincere political culture it is fair to ask the public to set aside its cynicism. In a "Fox News culture" it seems risky to accept any political or media message at face value.

Thursday, August 11, 2011

LinkedIn Using Your Name and Face for Advertising?

At Marketing Pilgrim, Frank Reed discusses LinkedIn's plan to use members' names and photographs to boost ad performance:
When LinkedIn members recommend people and services, follow companies, or take other actions, their name/photo may show up in related ads shown to you.
Reed provides instructions on how to opt out - and you have to opt out as by default you're opted in. Reed comments,
Honestly, I am disappointed in LinkedIn doing this. I get what they are trying to do but to stoop to Facebook’s privacy practices level is not cool.
I think LinkedIn presently has more of an incentive than Facebook to play fast and loose with your privacy, or to try to imply your endorsement of advertiser products and services. In both cases it's about boosting revenue so that the companies can justify their absurd valuations. But Facebook can still withhold a lot of information, while LinkedIn is now publicly traded and must file annual reports and answer to shareholders.  LinkedIn got a huge boost from the publicity associated with its going public, but... have you used LinkedIn? Do you do so on a regular basis?

I've been signed up for years, but by far the most significant use I get of my membership is seeing a more detailed profile than is available to me without logging in. Most of the profiles I see haven't been updated for years. I expect that in some industries the networking opportunities offered by LinkedIn, and the ability to avoid having family and social content spill over into your professional profile, makes it more valuable. But if you're not in one of those industries, why bother? I heard from a guy who, prior to the announcement of LinkedIn's IPO, had forgotten that he had signed up and thought the periodic emails he received from LinkedIn were spam. Pay for additional features? You must be joking, right?

Since the IPO, LinkedIn seems a lot more like Facebook, across the board. The new layout seems more like Facebook. The proliferation of ads, leo more like Facebook. And using your profile information to try to advertise products to your network? Unquestionably like Facebook. Whether you consider the Facebook / LinkedIn "cool" or not depends, I suppose, on how much stock you own, but the fact remains that these companies have to do something to justify their absurd valuations - either that or face what I think is the inevitable realization that those valuations are unsustainable.

If I were a LinkedIn insider I would be thinking about how I could sell as much of my stock as possible without causing other investors to recognize what I was doing, just as some Facebook insiders attempted to sell significant amounts of their stock through the failed private investor program that valued the company at $50 billion. If I were with either company I would look at Google Plus and worry - not that it's going to become quickly dominant, but that Google can use Google Plus as a loss leader and won't have to engage in the tricks, gimmicks, avalanche of ads and disrespect of privacy that appear to be a significant part of the business model for stand-alone social networks. People only have so much attention to spread around, and we can already see a litany of dead and dying social networks displaced by Facebook.

<strong>Update</strong>: LinkedIn has modified its policies in the face of the negative publicity, <a href="">but to Reed</a> there's no reason to trust them in the future.

Wednesday, August 10, 2011

What Caused the London Riots

David Cameron explains the riots in London and Manchester (and Birmingham, and Liverpool, and Bristol, and... Nottingham? I thought they had a Sheriff that made Arpaio look soft on crime):
For me the root cause of this mindless selfishness is the same thing I have spoken about for years: it is a complete lack of responsibility in parts of our society. People allowed to feel that the world owes them something, that their rights outweigh their responsibilities and that their actions do not have consequences. Well they do have consequences.
I personally would not have been so quick to blame the financial industry.

Tuesday, August 09, 2011

Thomas Friedman's Bipartisan Utopia - Where Everybody Agrees With Him

It seems fair to wonder, sometimes, if Thomas Friedman reads anything but his own columns. He seems oblivious to any opinion other than his own, and recycles his subject matter as often as Richard Cohen. Today's offering is a lazy column in which Friedman once again proposes that the solution to all of the nation's significant problems lies in a "grand bargain", involving the full cooperation of both political parties, that focuses on balancing the budget. He advances the idea by imagining John Boehner and President Obama making statements about how they have made mistakes in the name of their respective ideologies but are going to set aside their differences and find a way to both balance the budget and raise money to invest in the future. Friedman argues,
What’s sad is how much this is a fantasy and how easily — with just a little political will — it could be a reality.
Which, as usual, means that Friedman finds it to be a tragedy that the nation doesn't set aside its differences, appoint him "Philosopher King", and implement his personal agenda for what's best for the country? Jobs? Economic security for individuals and families? Not quite. King Friedman wants to serve you up a giant helping of entitlement cuts:
Let me say publicly what I committed to you privately: I have asked Erskine Bowles and Alan Simpson to revive their deficit commission and to use their recommendations for how to cut spending and raise revenues as the starting point for our negotiations. But it will now be called ‘The National Commission for American Renewal.’ Because in addition to the original Bowles-Simpson members, it will include Senator McConnell, Speaker Boehner, Senator Reid and Congresswoman Pelosi, and its goal will indeed be a comprehensive plan for American renewal.
Those of you who are familiar with Bowles-Simpson may remember that, contrary to Friedman's curious assertion that the President abandoned its recommendations due to "tactical political considerations", the commission failed to achieve consensus. Those of you who are also familiar with Thomas Friedman will be able to read between the lines of his column to understand that, although Friedman doesn't even mention Social Security and Medicare, its cuts to those programs that excite him. Yes, in Friedman's enlightened, bipartisan future, the guy who portrays Social Security as being "like a milk cow with 310 million tits" will head up the reform commission.

So we'll revive the commission that failed to endorse, under its rules, its own blueprint for reform. But we'll make it work better by adding Mitch McConnell, John Boehner, Nancy Pelosi and Harry Reid to the panel, and charging them with both balancing the budget "" while simultaneously finding hundreds of billions of dollars to spend, each year, on "infrastructure, education and scientific research". Because Friedman, putting his own fantasies into President Obama's mouth, is "confident that real tax and entitlement reform will unleash billions of dollars in investments". Best of all, by making Obama his sock puppet Friedman gets to avoid taking any ownership of that assertion - he doesn't have to share with us the location of the magic money tree, with hundreds of billions of dollars ripe for the plucking even in a seriously troubled economy.

Friedman represents the worst of the beltway's monomania about "bipartisan solutions." Friedman knows that the closest thing we've had to a "grand bargain" was a proposal made by the President during the debt ceiling debacle - a proposal that was not only rejected out-of-hand by the Republicans, but which they have used to demagogue against the President for suggesting that such a deal include cuts to Medicare and Social Security. The President suggested a deal that largely echoed Friedman's beloved Simpson-Bowles report, and the Republicans said "no". Even David Brooks was able to look at that and say, in essence, "My party is nuts". To Friedman, though, there's always blame to spread around - if the Republicans say no it can only mean that the Democrats were somehow too partisan and weren't trying hard enough. (Under the rules of this game, the same criticism applies to both parties: If Democrats say no it can also only mean that the Democrats are somehow being too partisan and aren't trying hard enough.)

What about boosting the economy? Job creation? Is it sensible to follow Friedman's approach of slashing entitlements and government spending in a jobless recovery - even if we pretend that the cuts can be "integrated and timed to minimize pain and maximize job creation" or that money will be found to spend on research and infrastructure? Is it credible that the magic money tree, wherever it is hidden, will produce the enormous crop of money Friedman predicts? Wouldn't it be better, from any rational, economic standpoint, to say, "We're right to worry about the deficit and debt, and we're going to work toward a grand solution that will take us there over the longer term, but right now we're going to stop the demagoguery and chest-thumping over budget deficits and focus on getting the economy up and running and spurring job growth, even if that means a couple more years of big deficits leading into our balancing of the budget in a more robust economy. Keep in mind, interest rates are so low right now we would pay virtually no interest on the money we borrow - this is the time to borrow and invest in our futures."

When Friedman proposes a "long-term budget deal", does he truly believe that it is possible to create and pass such a deal? By what mechanism does he propose that this Congress will tie the hands of future Congresses, who may have different taxing and spending preferences, policies and priorities? If his answer is, "Once the seed of bipartisanship is sown by my 'National Commission for American Renewal', it will grow and flourish right alongside the magic money tree, and we'll all live happily ever after," he will be making as much economic sense and he usually does - but I'm not buying it.

I favor balanced budgets and reducing the nation's debt. I thought Greenspan was full of [partisan nonsense] when he suggested that it would have been a horrible thing to reduce the deficit in lieu of offering massive tax cuts to the rich. I thought Cheney was full of [partisan nonsense] when he took the position that deficits don't matter. I thought G.W. was full of [partisan nonsense] when he made his "trifecta" joke about his out-of-control spending habits. But when I say I favor balanced budgets and reducing the debt I don't mean "Let's slash spending when times are bad" - I mean, "Let's act responsibly when times are good, so that we can afford to spend what we need to spend in the face of a crisis or emergency." Friedman finds it easy to complain that we're not slashing entitlements in the midst of a jobless recovery, but he does not appear to have any appreciation of how tax cuts and war spending factor in, and it does not appear to have occurred to him that the party he fantasizes can be a responsible and reasonable participant in working out his desired "grand bargain" has not been fiscally responsible in word or action for well over a decade. (To say "The Democrats have acted more responsibly" is, for the most part, to damn them with faint praise - but right now they're the the closest thing we have to grown-ups in Washington.)

The only place we're going to resolve the nation's problems through principled bipartisanship is in Friedman's pipe dreams. But if bipartisanship means foisting Friedman's personal beliefs on the nation, unless the rest of us also get a Freidman-style mansion, luxury hybrid SUV and Rolex, maybe partisanship isn't so bad after all.

Monday, August 08, 2011

The Debt Downgrade Blame Game

Here's something that the nation's politicians should think about before pointing their fingers at the other party and saying, "This is your fault!" By making that accusation you're admitting that the debt downgrade is appropriate - and that our nation's debt is a riskier investment than S&P triple-A rated French debt. (Let's ignore the fact that it's French debt that's taking it on the chin after the downgrade, not U.S. debt.)

 I heard Tyler Cowen on the radio this morning arguing a position that, to me, sounded like "This is a good editorial statement for S&P to make to the U.S. government." That is, he seemed less concerned with the accuracy of the S&P debt as a rating of the risks of U.S. debt, as opposed to agreeing with the implicit political statement that the U.S. needs to start working toward a balanced budget involving both tax increases and entitlement cuts. Cowen explained his reaction, in advance, on his blog. Consistent with his support for tax hikes and entitlement cuts, he argues that the Republicans should have worked with the President toward the "grand bargain" that Obama proposed during the debt ceiling debate.  Cowen is correct that, at least if we want this country to be what we claim it is, a land of opportunity, an example to the world, a leader in technology and innovation, and all that, we will need tax increases to balance the budget.

Cowen also argues that "Democrats need to choose on entitlements", which apparently means that they need to support entitlement cuts. There are unquestionably some Democrats who are taking a "no cuts now, no cuts ever" stance toward Social Security and Medicare, and it's fair for Cowan to criticize that. But it's farcical to pretend that entitlement cuts don't occur because only the Dems are blocking them. I'm not attributing this whine to Cowen, but those who complain that it was the Democrats who magically stopped the Republicans from partially privatizing Social Security under Bush consistently ignore the fact that Bush couldn't get majority support for his plan from his own party, nor could he get them to back a different plan.

Had Bush backed away from privatization and proposed the type of tweaking that has been approved in the past, odds are that he would have succeeded with his reform. Similarly, it was Bush who advanced and signed into law Medicare Part D, the unfunded prescription drug benefit. It was the Republicans who screeched about "death panels" and "Medicare cuts" during the debate of healthcare reform. It was again the Republicans who howled that President Obama was offering to cut Social Security and Medicare after the recent debt ceiling debate.

 Don't get me wrong - I'm not suggesting that the Republican Party wants to preserve either Social Security or Medicare. But there is no question that they will preserve and even expand those programs if they perceive that doing so will help them win reelection. And there's no question that they will engage in demagoguery against the Democrats that makes it difficult for them to subsequently implement the cuts that they actually support. Their dream is for the Democrats to propose and pass the cuts or reforms that undermine the social safety net, such that they benefit both from the implementation of their policy preferences and have the opportunity to angrily accuse the Democrats of harming seniors. The difficulty is, you really can't have it both ways. (Hence David Frum's crying into his coffee about how, prior to Joe Lieberman's last minute sabotage, the Affordable Care Act threatened the future of the Republican Party.)

 Cowen suggests that the lesson history will draw from the economic downturn will not be "we should have had a much bigger stimulus" but will be "We needed a big dose of inflation, promptly, right after the downturn. Repeat and rinse as necessary." Cowen argues that didn't happen because "voters hate inflation and, collectively, we proved to be cowards." But do voters actually hate inflation? Would voters have hated seeing their long-term investments show a rate of return that reflected inflation, as opposed to flatlining? Yes, voters were upset by skyrocketing energy prices and gas prices contributed to the collapse of the auto industry and probably contributed to the timing of the bursting of the housing bubble. But for some reason we were supposed to view inflation in energy prices and in housing costs as a "good thing". We were supposed to view housing inflation as turning our houses into giant piggy banks from which we could withdraw tens or hundreds of thousands of dollars with no concern for the future. There are some forms of inflation that the U.S. public can be convinced are good, and a subset of those can actually be good for average citizens.

When inflation is tied to market realities and people aren't cashing every cent of equity out of their homes, it's actually a good thing for there to be some level of inflation. It's not a horrible thing, either, for there to be a reasonable return of interest on passbook savings accounts. Spikes in food prices, on the other hand, would be unpopular. I don't see much point in speculating as to which theoretical future we will ultimately wish we had chosen. But I disagree with Cowen's suggestion that it was fear of voter reaction that led to a policy decision to pursue a stimulus instead of imposing "a big dose of inflation". I suspect that the financial interests that we had just bailed out would have been apoplectic if the government took away the all-but-free money they've been enjoying since the bail-out, and instead imposed a policy that would require that they share the burden of the recovery by across-the-board inflation that had the effect of wiping out homeowners' negative equity. If the financial industry had wanted inflation, we would have had inflation. It wanted interest rates near 0%, so that's what we got instead.

If somebody was making the case for "a big dose of inflation" during the debate over the stimulus, they did a good job of keeping it a secret. One of the loudest voices in support of a larger stimulus was Paul Krugman. But I am recalling that he has also spoken about how higher inflation could help consumers, while repeatedly pointing out that the government spending that his political critics proclaimed would result in inflation has not done anything of the sort.

 Cowen argues against the biased sample, suggesting that it is unfair to point to S&P's poor track record on other matters when questioning its present rating of U.S. debt. The problem is, Cowen does not actually present evidence that the sample is biased - he asks us to take it on faith that S&P is good at rating government securities. I was thinking of Krugman's criticism of bond raters in general; but I see that Krugman has also responded to the criticism raised by Cowen:
Notice that what’s happening in the case of S&P is precisely that many people are giving them credence because of where they sit; it’s therefore highly relevant to point out that they may be a prestigious organization for some reason, but their track record is ludicrously bad.
It's unfair to pick out a few errors from an otherwise good track record to argue, "You should never take that guy seriously," but sometimes it actually is fair to point out, "You're asking that we follow the advice of the village idiot." If Cowen wants to establish that S&P has sound methodology and a good track record, the ball appears to be in his court.

 Will this be the wake-up call that Cowen hopes it will be? Something that "years from now today may well be seen as a turning point of significance"? I doubt it. If nothing happens - as appears to be the case - it could be worse than doing nothing. The boy who cried "wolf". Being able to say "I told you so", five, ten or twenty years from now? Worthless, even if you can make the after-the-fact case that this (of all things) should have been what woke our nation's leaders up to the need for real change.

Update: Yesterday I wrote,
If the financial industry had wanted inflation, we would have had inflation. It wanted interest rates near 0%, so that's what we got instead.

The U.S. Federal Reserve on Tuesday took the unprecedented step of promising to keep interest rates near zero for at least two more years and said it would consider further steps to help growth, sparking a rebound in stocks. 
The Fed painted a gloomy picture, saying that U.S. economic growth was proving considerably weaker than expected, inflation should remain contained for the foreseeable and unemployment, currently at 9.1 percent, would come down only gradually.

Whatever voters may think of inflation, we're suppressing inflation due to the financial industry and markets, not because of consumer sentiment.

I'm Not Saying It's a Stunt, But....

My guess is that if you want to truly understand the S&P downgrade of U.S. debt, you would have to consider two things:
  1. Primacy: Nobody will pay much attention to the second bond rating agency to pull this type of stunt, er, I mean to carefully reassess the risks associated with U.S. debt.
  2. Profits: Wanna bet that more than a few S&P insiders made some investment decisions on Friday in anticipation of the downgrade announcement on Saturday?
Perhaps the U.S. government should figure out how it can pay for ratings, so it can be as accurately as the proprietors of those AAA mortgage-backed securities that turned out to be toxic. Seriously, I can understand being concerned that the U.S. won't get its act together, or that "Tea Party" Republicans will confuse this type of stunt with actual policy and trigger a default. But if bond ratings are supposed to be about the safety of your money, where would S&P have us put our money? I mean, albeit way late, even S&P figured out that those mortgage-backed securities were a bad deal, and we can't all put our money into UM.

Truth be told, and S&P must be aware of this, if the markets believed that the U.S. was truly going to default on its debts we would have seen panic in the market prior to the announcement and passage of the final deal. It may sometimes involve choke chains, but the Republican leadership knows the price it will pay if it allows the idiots in its ranks to actually force a default - whatever reward the Tea Partiers imagine that they might reap at the polls, the party would be severely punished by the deep pocketed contributors who bankroll their campaigns - and thus their actual agenda.

Tuesday, August 02, 2011

The Debt Deal as Continuing Political Theater

Paul Campos attempts to find a silver lining in the debt deal, but in so doing he reminds me of how seriously we take this type of political theater. Although there are some who argue that the deal harms the President, it would appear that his primary goal was to make sure that there was not a repeat performance of this debacle prior to the 2012 election. But then what?

The 2012 election will have one of two outcomes: Either Obama will be reelected or a Republican will become President. Do you recall the noise that Ronald Reagan made about Jimmy Carter's deficits before taking the nation's debt to unprecedented levels? Do you recall G.W. "joking" that he hit a "trifecta" and was thus free to deficit spend as he pleased, while Dick Cheney argued that deficits don't even matter? If President Obama does not win reelection, we'll return to Republican business as usual. The Republicans in Congress will set aside their obsession with balancing the budget in favor of attempting to buy votes. Serious cuts in Medicare? In Social Security? Budget cuts that may drag down their President in 2016? Get real. We're more likely to get the proud announcement of an unfunded, multi-trillion dollar "Medicare, Part E."

But what happens if President Obama is reelected? Then we are again faced with one of two realties: Either the Democrats control Congress, or the Republicans control one or both chambers. Realistically speaking, it's going to be the latter. The Republicans, with all of their sound and fury about government spending and the need for budget cuts, agreed to this deal to postpone identifying the actual cuts for two reasons: First, they couldn't identify and agree upon enough cuts to hit the arbitrary figures they kept tossing around, and second because they wanted to avoid having to take responsibility for cuts that will inevitably be very unpopular with motivated blocs of voters. Recall, the principal targets for Republican budget cuts are Social Security and Medicare. It's possible that they will insist, through the latest iteration of a deficit commission, that deficit reduction occur only through budget cuts. It's possible that, through lockstep partisanship and obstructionist tactics, they'll force a budget cutting bill through Congress. It's even possible that the President would sign the bill. The Republicans will then have to go to the polls attempting to blame obviously partisan, Republican-driven cuts on the other party's outgoing President. I don't see that the voters at issue are going to fall for that one.

Oh, and the special interests? Health insurance companies, long-term care facilities, doctors and hospitals, all of whom profit enormously from the status quo (even as they squawk about the alleged inadequacy of Medicare reimbursements)? You expect them to sit quietly by the sidelines as the Republicans slash hundreds of billions of dollars out of Medicare and the ACA? This Congress cannot bind future congresses - if they don't like the constraints of this legislation, they can and will change it. And the pressure to do so will be intense.

Here's something else to ponder: The best possible outcome would be for this new deficit commission to succeed where prior deficit commissions failed, and to actually come up with a viable long-term plan for the budget and economy that could be supported by both parties. Right now the left is expecting that the commission will principally target entitlements, something that is inevitable given that entitlement growth is significantly higher than inflation, while doing too little to generate new revenues (i.e., raise taxes). If it's impossible to come up with a fair and sensible plan to get Medicare spending and spending growth under control, we're doomed. We can wait and hope for a miracle, but there's no reason to believe that we're going to produce a new form of medical treatment or a new approach to medical care that is going to transform the bleak financial picture arising from the cost of treating chronic medical conditions and terminal disease, of "old age". But as we all know, it's not going to happen. Given a choice between responsible governance that could cost them reelection and running the nation into a brick wall, most members of Congress will choose the latter.

So this commission will fail and the Republicans in Congress will plot their next move not on policy but on elections and reelection: Who is in the White House, how much of a price will they pay for cutting entitlement spending, will it serve them better to return to their "business as usual" of running up the nation's debt to heights they know to be unsustainable (then complain and obstruct in their usual fashion when a Democrat is elected to clean up their mess). For a Republican President, after all, two wars, a recession and a national disaster (e.g., the collapse of the financial industry) is anything but cause for austerity - it's a "trifecta".

A Giant Sucking Sound....

I have to give credit to anybody whose performance on Real Time leaves you thinking, "I wish Maher had found a more honest, more insightful conservative guest, who won't attempt to cloak her inability to respond to the facts raised by others by interrupting them and talking over them. Like his guest from last week, Ann Coulter." So, whether or not I should be surprised that she wants to take this nation down the same path forged by her much more famous great-grandfather, I have to hand it to Margaret Hoover for making Ann Coulter seem like a well-mannered intellectual.

The Failure Wasn't Obama's

You can't miss the hand-wringing: Obama once again gave away too much, Obama could have cut a better deal, Obama governs as a moderate conservative.... And there's truth to all of that. But still, we're speaking of legislation. Remind me again, how many votes does the President get when a bill is being considered by the House or Senate? If a better bill was out there, where is it? I don't even recall one being advanced by a majority of the Senate - sure, such a bill would have been subject to a filibuster, but wouldn't it have been helpful had the Democrats put together a sane, solid proposal and announced to the world, "Here's the wonderful bill you could have if only John Boehner could get his Tea Partiers under control." Even after the deal was struck Boehner had to scramble to keep them in line. Two meetings to convince the inmates that even if they run the asylum, it's best not to make that fact too obvious.

Where does the Democratic Party stand? That has been a fair question throughout Obama's Presidency and the answer has too often been, "In the path of the President's agenda." Obama has been politically cautious from the start, seeming hesitant to even speak publicly on an issue that is before Congress unless he is apt to receive a favorable vote. That is not something that particularly distinguishes himself from his predecessors, and you can see from Bill Clinton's experience with healthcare reform or G.W.'s experience attempting to partially privatize Social Security how much damage a President can do to himself if he takes a strong position and can't obtain support for his agenda even from his own party. Obama thought he had his party's support for healthcare reform, something that has been on the Democratic agenda for decades, something that Republicans feared could devastate their future at the polls, something that had been discussed and debated to death. He made some ugly up-front deals to get the major special interest groups out of the way, turned to his party and said, in effect, "Now produce a bill," and... Congress, in particular the Senate, bungled it.

Thanks to delays resulting in no small part from ineffective Senate leadership, the bill almost died in the face of an onslaught of Republican misinformation and demagoguery, and even after that it almost died due to the huge giveaways demanded by a handful of self-serving Senators. Had Senators Nelson, Lieberman, Landrieu and their ilk been willing to set aside their self-interest, can anybody dispute that we would have had a better bill? By a similar measure, had the Blue Dogs been willing to act responsibly as legislators, rather than echoing Republican talking points, voting against the bill and even running against the bill, could they not have supported the legislation while explaining to their constituents how they made it a better bill through their demands and contributions? After all, fat lot of good it did them to brag about voting against their party and President.

The same is true for the stimulus bill. For energy policy and climate change legislation. For immigration. The Democratic Congress had ample opportunity to put together and pass meaningful reform bills, but instead watered down the stimulus, sold out on healthcare reform, and got all wobbly in the knees about passing any other significant legislation. Their well-known reward was the loss of control of the House and coming close to losing control of the Senate. Good job.

So imagine you're the President and assume that, like most politicians, you wake up in the morning and ask yourself, "What do I have to do to get reelected?" Do you say, "I'll do the same thing I did with stimulus and healthcare reform legislation, back when my party controlled both chambers of Congress, and help my party put together a bill that my own party will insist be watered down, and even assuming I can get a bill with majority support in the Senate ignore the fact that any bill with the Democratic imprimatur will be rejected out-of-hand by the Republican-controlled House and filibustered by Senate Republicans?" Or do you take a look at the political environment, the near-useless media coverage, and your own party's internal divisions and say, "The people say they want a balanced budget, the people say they want government cuts, opinion polls show that a ridiculous number of people believe that government spending causes unemployment to rise. My party can't put together a progressive bill, or even a mediocre bill that would pass in the House. I can work with the Republicans, get a bill that will pass, prevent the economic catastrophe of default, legitimately claim to have engineered a bipartisan compromise, and get a deal that I can point to in the next election to say, 'I'm the adult in the room who's working to balance the budget.'" (Now imagine on top of that, that you personally believe in the virtues of leaner government and a balanced budget.)

Listen to the leaders for the Republican nomination yammer about this vote and you get a good sense of the pathetic state of political media coverage in this country. The Republicans most likely to win the nomination assume that the voters are politically ignorant, speak to them in a manner that an informed voter should find offensive, and expect their demagoguery to carry them into the White House. Yes, the argument can be made that the President could do more to educate the public and attempt to lead opinion, but the reality is a bit different. The President has no chance of winning over the Tea Partiers or making a significant dent in Republican opinions, and the media already knows the true story. The President might try to convince those within his party to support more progressive legislation but that's apt to earn him the same type of criticism from the left that he's received on pretty much every piece of legislation he's signed, not actually get him any more votes for his legislation within his party, and will do nothing to change the fact that the Republicans control the House and can filibuster in the Senate.

The roots of this bill lie in the Democratic Party's perception that their 2008 victory was their opportunity to cash in, as opposed to an opportunity to govern responsibly and pass important legislation. Speaking cynically, that's about what you would expect from politicians. But you might have thought that the Democratic Party would have some memory of how it behaved during the first two years of Clinton's Presidency and how Clinton, having barely survived, became a cautious poll-watcher and triangulator who fastidiously avoided thorny issues for the remainder of his Presidency. They say that those who don't know history are destined to repeat it, but what does it say about you when you do know the history and choose to repeat it?