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the atlantic

Creating Blind Spots

From David Frum, a Republican reflecting on the ongoing destruction of the Republican party in "The Great Republican Revolt."

Against all evidence, both groups interpreted the Tea Party as a mass movement in favor of the agenda of the Wall Street Journal editorial page. One of the more dangerous pleasures of great wealth is that you never have to hear anyone tell you that you are completely wrong.

Unfortunately this also appears to be a blindspot of the Clintons - they surround themselves with people that either are afraid to tell them when they are wrong or simply see the world the same way. As I have built a staff, one of my goals is that those around me are not afraid to tell me when I am wrong. And I encourage them not to take it personally when I disagree. And time will tell who is right.

Money Shouts ... We Walk...

In a recent article that covers a topic I have long wrestled with, Kim Phillips-Fein explores two recent books exploring why, in the face of an ever-declining middle class, so few people are organizing to improve their lives. The article is "Why Workers Won't Unite."

One of the issues that struck me is how we have moved so strongly in the direction that only people with money matter.

At every level of our society today, the idea that only people with money matter is confirmed daily. From the kind of health care that we receive, to the schools our children attend, to the parks near our houses, our segregation by wealth renders a common social experience nearly impossible.

Everyone else gets to dream of the day when they will matter. But in present trends, fewer and fewer people will have the money to matter because more and more of the gains in the economy go to a tiny minority.

Businesses Need Anti-Monopoly Policies from Government

A James Fallows article in The Atlantic, "Made in America, Again, reminds us of the paramount importance of government policy with regard to monopoly and market power. Any one or a few massive market players can ruin the market for innovation and small business, which is one of the reasons government should seriously focus on preventing any one or a few entities from growing too large.

When Liam Casey took me through his Highway1 incubator for hardware start-ups in San Francisco, I spoke with 10 (mainly) young entrepreneurs who each hoped to set up a small hardware company somewhere in the United States. Not one of them volunteered tax or regulatory concerns as playing big parts in his or her go/no-go decisions. What they did want was a streamlined system to get their products into customers’ hands. To that end, they were concerned with things like the structure of retail distribution, especially the huge investment in inventory required to get their products carried in big-box stores. “Boring-seeming practical details make a big difference for these start-ups,” James Manyika told me. “If I am a small manufacturer doing something interesting, my chances are much better if I happen to be in physical proximity to a larger company, or to a network of experienced people who can help me get to scale.”

Our Tribal Politics

Reason is a hard thing, perhaps because so many of us fool ourselves into thinking we have weighed the pros and cons of decisions, of our political choices. But most don't and odds are we are at least some of them.

This article from The Atlantic called "The War on Reason" explores just how rational we are. Consider -

Most of us know nothing about constitutional law, so it’s hardly surprising that we take sides in the Obamacare debate the way we root for the Red Sox or the Yankees. Loyalty to the team is what matters. A set of experiments run by the Stanford psychologist Geoffrey Cohen illustrates this principle perfectly. Subjects were told about a proposed welfare program, which was described as being endorsed by either Republicans or Democrats, and were asked whether they approved of it. Some subjects were told about an extremely generous program, others about an extremely stingy program, but this made little difference. What mattered was party: Democrats approved of the Democratic program, and Republicans, the Republican program.

We are tribal - a quality that served us well as an evolutionary strategy over hundreds of thousands of years. But now we have to work to overcome that if we actually want to live in a pluralistic, democratic society. Thus far, the evidence seems to suggest most people don't want to go to that effort or simply don't understand that they have to if we are going to call our form of government a republic.

Community Banking

Michelle and I just refinanced out home for two reasons: getting a lower rate and moving from a massive Wall Street bank to a local Main Street bank. Working at the Institute for Local Self-Reliance, I have learned a bit about banks from our Community Banking Initiative.

Bigger banks claim to be more convenient, but they hit you with higher fees and they lend far less to local businesses, which are more likely to be important to your local economy than massive corporations.

But after reading this story in The Atlantic, I was shocked at just how little we know about how big banks operate and what risks they are taking.

Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.

The actions we take matter. When you pick a massive bank over a local bank, you are not only throwing your own money away, you are supporting the very same institutions that gave us the Great Recession and will likely lead us into the next one. They will get bailed out - and we may have only ourselves to blame for not supporting the banks in our communities that actually are responsible.

The Complicated Challenge

In reading an article about International Relations in The Atlantic, I came across this quote that struck me (as someone who often answers questions by saying, "Well... it's complicated...")

As Huntington once told his protégé Fareed Zakaria: “If you tell people the world is complicated, you’re not doing your job as a social scientist. They already know it’s complicated. Your job is to distill it, simplify it, and give them a sense of what is the single [cause], or what are the couple of powerful causes that explain this powerful phenomenon.”

And though I think Huntington was wrong about just about everything he said, I think this insight will stick with me. Things are complicated but eventually we do have to act.

From Those Who Take Much, Little Will Be Returned

After reading Richard White's Railroaded history of the railroad barons in the late 1800's, I realized that if one had left Earth in 1900 and returned in 2000, they would be quite at home.

The rise of regulations that limited the destruction wrought by supposedly smart financiers and established a middle class following the excesses of the Gilded Age had largely been gutted by 2000 and the middle class was once again in danger of being listed on the Endangered Species list.

After smart regulations prevented any major financial crises for decades, elected officials began dismantling them. After each financial crisis (e.g., Savings & Loan), we deregulated further.

Fannie Mae and Freddie Mac, the agencies responsible for the 30 year fixed rate mortgage that allows millions of us to afford homes, had been largely privatized but still retained a public guarantee, the worst of both worlds but all part of the Republican big-business strategy of privatizing gains and socializing loss.

And the response of tens of millions of Americans? More deregulation! Let's run back into the age where we cannot breathe the air, swim in our waterways, or trust that the food we buy is not going to poison us.

There are those who say the government cannot grow forever and cannot forever raise taxes. Those people are EVERYBODY. No one is proposing such a ludicrous approach. What many have proposed instead is returning to the tax rates of 15 years ago... because the government cannot lower taxes forever.

There are good reasons to have government programs. Roads are one. Keeping illiterate orphans from overrunning the streets are another. A military designed only to provide jobs to well-connected firms with massive lobbying budgets is not one.

But back to the middle class - I recommend "Can the Middle Class Be Saved?" from The Atlantic.

For those who have forgotten that taxes are in fact at historic lows, this passage toward the end of the article is an accurate reminder:

Over time, the United States has expected less and less of its elite, even as society has oriented itself in a way that is most likely to maximize their income. The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000, and is now 35 percent. Income from investments is taxed at a rate of 15 percent. The estate tax has been gutted.

Government policies are overwhelmingly designed by interest groups with powerful lobbyists... and those lobbyists promote the interests of the powerful. Duh - who else can hire them??

What’s more, some of the policies that have most benefited the rich have little to do with greater competition or economic efficiency. Fortunes on Wall Street have grown so large in part because of implicit government protection against catastrophic losses, combined with the steady elimination of government measures to limit excessive risk-taking, from the 1980s right on through the crash of 2008.

Our failure is not a general failure of government, it is a specific failure of a government that governs in the interest of a few. It should be no surprise that those few are doing very well.

Future of Health Care ... Maybe

As long as we have gutless elected officials and a general population that doesn't mind having the worst health care system in the developed world (unless you happen to have an income greater than $1 million/year), we probably should not expect a rational solution that will ensure we all have access to at least the basic care available to anyone in Cuba.

I have finally paid off the medical debt I incurred despite what is supposed a "pretty good" insurance plan, showing what that is worth in the U.S.

But there is some hope from a private provider in the southwest, as detailed in this article from the Atlantic:

CareMore, through its unique approach to caring for the elderly, is routinely achieving patient outcomes that other providers can only dream about: a hospitalization rate 24 percent below average; hospital stays 38 percent shorter; an amputation rate among diabetics 60 percent lower than average. Perhaps most remarkable of all, these improved outcomes have come without increased total cost. Though they may seem expensive, CareMore’s “upstream” interventions—the wireless scales, the free rides to medical appointments, etc.—save money in the long run by preventing vastly more costly “downstream” outcomes such as hospitalizations and surgeries. As a result, CareMore’s overall member costs are actually 18 percent below the industry average.

Good stuff, and a pretty short article for this mag - give it a go.

Good Computer Habits

What if your hard drive crashed right now or someone broke in and stole it? Where would you be? I would be greatly annoyed, but I wouldn't lose anything because I have multiple backup strategies and use secure passwords at every opportunity.

I know people who have lost everything and yet still do not do a proper job of backing up, even though the cost is less than $5/month at most.

So if this describes you also, take a few minutes to read this excellent article by James Fallows and be better prepared for the inevitable problems you will have eventually.

If you are using the same password on multiple different web sites, especially if any of them have your credit card or banking information, you are inviting a massive headache and weeks of frustration.

I have long been a LastPass user and Fallows recommends it in his article. Take a look - it's free for most uses (you have to pay $1/month to use it on your mobile device but free for your laptop and desktop computers).

Be smart, backup and secure your data before you lose it (again).

Good Short Fiction - Stephen King

The May 2011 issue of The Atlantic featured some short fiction, included pieces by Stephen King and Mary Morris (I had not yet read anything by Morris). Stephen King's piece was great fiction, but is not a happy read (shocker).

The story behind the theme of the May issue actually came from a critique by Stephen King:

Almost four years ago, in The New York Times Book Review, a celebrated writer lamented the decline in the publication of short stories, and with it, a decline in the quality of the short story itself. Too many of the stories that still threaded the needle to publication, he wrote, felt “not quite dead on the page, I won’t go that far, but airless.” They seemed “show-offy rather than entertaining, self-important rather than interesting, guarded and self-conscious rather than gloriously open, and worst of all, written for editors and teachers rather than for readers.”

We found that writer hard to ignore, in part because he kicked us in the teeth. (“No need to check out The Atlantic Monthly; its editors now settle for publishing their own selections of fiction once a year in a special issue and criticizing everyone else’s the rest of the time. Jokes about eunuchs in the bordello come to mind, but I will suppress them.” Thanks!)

We also found him hard to ignore because he was Stephen King, and we thought he knew something about entertaining readers rather than merely furrowing the brows of a writers’ group.

...

King’s short story, for example, originated with a bet he lost to his son Owen over the NCAA men’s basketball tournament. The loser had to write a story to fit a title invented by the winner. Stephen King, being Stephen King, set out to write “Herman Wouk Is Still Alive” as a funny story set in a mental hospital.

The result is Herman Wouk Is Still Alive. Well written, on a topic few would dare attempt.

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