02 Jan The 2020’s are here.
We have access to so much information. Too much information. And everyone’s busy. With some time over the holidays, I thought I’d take the time to do some research about the issues which people are talking about. Here are insights from someone who has observed the events of the past sixty years which are responsible for today’s uncertainties and suggestions for how we can do to make a difference in this next decade.
In 1961, Eisenhower warned of the growing influence of the “Military Industrial Complex” in government and politics. Virtually everyone agrees special interest lobbying and political contributions are out of control. There have been two approaches to govern special interests, term limits and campaign finance reform. Unfortunately, the Supreme Court has struck down political contribution cap legislation based on a conflict with the First Amendment – Freedom of Speech, and ruled that term limits require a constitutional amendment, throwing out Congressional term limit legislation in 23 states. Getting rid of “politics as a career” is one way to limit how much money is raised through political contributions from special interests and re-focus politicians on representing all constituents’ interests. The President has no role in proposing Constitutional Amendments. Only Congress or the States may propose a Constitutional Amendment with a 2/3rds majority. It then takes 75% (38) state legislatures or conventions to approve the amendment. That is not out of reach. Today 36 states have legislated some kind of term limit. In 2019, Ted Cruz offered a term limit amendment for Congress to propose, to start the process.
What can we do about it? Vote for legislative candidates locally and nationally who are pro-term limits and don’t vote out that ones that are.
Before the Military Industrial Complex became impenetrable, in 1962, Rachel Carson, a marine biologist, gifted writer, and conservationist, published her fourth book, Silent Spring, a research-backed case to ban DDT, which had been used by the Military during WWII to prevent Malaria, Typhus, Body Lice, and Bubonic Plague. Carson’s research was inspired by anecdotal observations of the disappearance of birds after DDT spraying. The book resonated because others shared Carson’s observations. It was a best seller and contributed to the start of an environmental movement that compelled the formation of the EPA in 1972. After several months of public hearings where scientists debated pros and cons, the EPA banned DDT. The results validate the decision. From an all-time low of 417 Bald Eagle breeding pairs in 1963, the population in the lower 48 states has grown to a high of 9,789 pairs today And DDT’s effectiveness, where it is still used, is diluted by the evolution of DDT resistant mosquitoes. Al Gore’s attempts to replicate Rachel Carson’s combination of anecdotal observations with scientific research in “An Inconvenient Truth” hasn’t had the same impact. The economic consequences of banning fossil fuels are much more complex than banning DDT. A lot of progress has been made in solar and wind energy generation. But there’s more to being sustainable. We need to overcome our reliance on an old and vulnerable pole and wire infrastructure by de-centralizing distribution. Batteries can do that. But, as we learned from Lithium Ion Batteries, it is important to safely and reliably store and distribute power. That demands both new technology and new jobs (someone will have to install and maintain all those batteries). With both Venture Capital and traditional energy companies sharply increasing investment in these alternatives, progress is being made.
What can we do about it? Be aware and educated about progress in batteries developed to store and distribute energy, safely, when you invest or buy.
3. Equal Rights:
The United States experiment started with this famous sentence from the Declaration of Independence in 1776 – “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
It took almost 100 years to clarify that “men” meant all persons. In 1868, the Fourteenth Amendment to the Constitution was passed:
Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
And it took another 50 years, in 1920, to identify that persons meant women, too, at least when it came to voting, with the Nineteenth Amendment to the Constitution.
“The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.”
After another forty years, Congress passed legislation to enforce these amendments. In 1964, the Civil Rights Act outlaws “discrimination based on race, color, religion, sex, or national origin.”
And another eight years to breakdown the last hurdle to independence – property ownership, since most homeowners require a mortgage. The Equal Credit Opportunity Act of 1972 made it illegal for lenders to discriminate.
Few women realize that without the Honorable Lindy Boggs, even if they could afford a mortgage, they would be dependent on an x-husband or a father to co-sign.
“When the Banking committee marked up the ECOA, congresswoman Boggs added the provision banning discrimination due to sex or marital status without informing the other members of the committee beforehand, personally inserting the language on her own and photocopying new versions of the bill. She then told the other committee members, “Knowing the members composing this committee as well as I do, I’m sure it was just an oversight that we didn’t have ‘sex’ or ‘marital status’ included. I’ve taken care of that, and I trust it meets with the committee’s approval.” The committee unanimously approved the bill.”
What can we do about it? As long as we require legislation to clarify that “men” means “persons” and “persons” means “everyone,” equal rights aren’t a reality. Vote for judges and the politicians who select and confirm them who will interpret the word “men” and “persons” to mean everyone. Encourage the “good people” we’re missing in politics to run for office. (Jack Johnson, “Where did all the good people go?”)
In 1965, Medicare and Medicaid were passed. Just four years later, in 1969, President Nixon declared “‘We face a massive crisis in this area.’ Without prompt administrative and legislative action, he added at a special press briefing, ‘we will have a breakdown in our medical care system.’”
The crisis was the unanticipated acceleration of medical costs after Medicare and Medicaid implementation, nearly doubling from $38.4 Billion in 1964 to $65.9 Billion in 1969, largely due to an increase in hospital fees for service. Hospital net income increased 76% during the same 5 year period. The implication was that with access to Medicare and Medicaid, more people were seeking surgical procedures. That was the intention of these programs, but the unexpected consequence was the inflationary effect of the “reasonable cost” principle as the reimbursement policy. According to Wilbur Cohen who drafted the legislation, this was never debated nor were alternatives considered. probably to overcome American Medical Association objections to Medicare reimbursement policies interfering with physician diagnosis and treatment.
The tension between between practitioner effectiveness and controlling costs is at the heart of the healthcare crisis. Technology is used to gather and analyze information to establish treatment and cost standards. But neither quality nor cost control have been achieved. Diagnostic error rates start at 21% (depending on how you define an error) and healthcare costs have increased from 5.6% of GDP in 1965 to nearly 18% (which seems low when you consider what percent $18,000 for family health insurance plus deductible represents of the average income). And the methods for collecting data are interfering with patient care. Reportedly nurses and doctors are spending 50% of their time on it. That’s not all, during my recent experience with the health care system, nurses and doctors were unable to override the electronic records system to provide pain medication to my Mother.
Since Medicare/Medicaid was passed in 1965, costs have increased so much more than predicted that the insurance business model is broken. Insurance is when you pay into a fund over time so that it is there when you need it. Either no one predicted the costs would increase this much or they didn’t think we’d pay enough. Obamacare is based on enough people contributing to the pot each year to cover the costs of that year. That’s not insurance.
What can we do about it? Take better care of ourselves so we don’t end up in the hospital to avoid costly errors and so we contribute to a reduction in costs. Healthcare spending on preventable diseases caused by obesity and drug, alcohol, and nicotine addiction has increased exponentially in the US to over $1.5 Trillion.
#5. Surveillance Economy: In 1960, Billy Wilder co-wrote, directed and produced “The Apartment,” a story about an aspiring insurance company employee lending his apartment to executives for trysts with “girls” from the office. The obvious connection to today is its relevance to the #MeToo movement. But the surprise is the reveal of the beginning of the surveillance economy and its unintended value to post-9/11 secret government security.
The film opens with Jack Lemmon as C.C. Baxter reporting on how small the world was becoming.
“On November 1st, 1959, the population of New York City was 8,042,783. if you laid all those people end to end, figuring an average height of 5 feet 6.5 inches, you’d reach from Time Square to the outskirts of Karachi, Pakistan. I know facts like this because I work for an insurance company.”
Later in the film, foreshadowing Mark Zuckerburg’s reported motivation for Facebook – to find a girl – Baxter tells his love interest Ms. Kubilik, played by Shirley MacLaine, that he knows where she lives, whom she lives with, and that she had appendix surgery among other personal information. MacLaine looks at him with shock and surprise, at first. Then they break into nervous giggles, hoping that romantic ends justify the means.
Today we still hope easy access to our personal data is harmless. Who is protecting us? Edward Snowden revealed in 2013, during the Obama administration, that a secret warrant had been issued by the Federal Intelligence Security Act (FISA) Court ordering Verizon Business Network Services to provide a daily feed to the NSA about all calls in its system, or in 2017 when Equifax revealed personal data of 143 million people was compromised, or in 2018 when the Cambridge Analytica scandal revealed that Facebook was selling personal information for undisclosed purposes. Many of us take more time and effort to adjust privacy settings, self-censure or camouflage. Talk about uncertainty! We are hold our nose and click enter when we interact with business and government, as evidenced by all time low Trust which surely has a chilling effect on the economy and society.
What can we do about it? These data driven business model companies are almost exclusively funded by advertisers. They say they are increasingly disturbed by ad fraud, inappropriate context for ad placement, and wasted spending on excessive frequency and re-targeting ads. (We’ll write more about this soon). As advertising spending decision-makers or advisors, we can support companies offering alternative ways for business (and politicians) to connect with current and new customers. Ways which are more transparent and waste less of what we pay for their products and services on advertising to us. We are already doing it with Netflix and other OTT video streaming alternatives that offer no advertising for a premium price.
We look forward to a new decade when we can help entrepreneurs, corporate intrapreneurs, solopreneurs innovate to make a difference.