Read the whole article HERE. Here’s a snip:
“Incivility destroys a community’s capacity to generate wealth.
In a networked, knowledge-driven economy, collaboration drives wealth creation. And collaboration can only thrive in a stable environment of trust. The corrosion of our civil society –– the alarming growth of incivility and pervasive lying –– undercuts our economy’s productivity and our capacity to innovate.
Incivility — fraudulent concealment (“hiding the ball”), lying, manipulation, and associated behaviors — can work well to redistribute wealth. We see almost endless examples from MF Global to the subprime mess. Yet, these behaviors do not generate wealth. Indeed, they erode capitalism’s capacity to generate wealth. That’s why corruption slows economic growth and why trust is associated with higher rates of economic growth.”
Thanks to Tony for the heads up on this great article.
If there is such a thing as Village Square required reading, this is it. It describes a reality coming to a city near you that we either grapple with now or we live its consequences later. I guess we pick. Please share this one on social media. Michael Lewis argues (convincingly) in November’s Vanity Fair that it is ultimately America’s hometowns and states who will bear the brunt of the Congressional failure to govern either by raising taxes or cutting spending or both. I hope I live in a city and state that gets this sooner rather than later. Read all »
This month LeRoy Collins Institute released their report The Double Whammy Facing Florida’s Counties outlining what the one-two punch of economic trends and state mandates is doing to Florida’s counties. That includes public safety spending dropping precipitously. Be sure to download a copy from the LeRoy Collins Institute website HERE.
More required reading from Standard & Poor’s statement on the lowering of the U.S. AAA debt rating:
“The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.”
Read the entire statement HERE.
“Confidence in our political system is beginning to fade.” – A Wall Street broker, yesterday
Noting that “we live in an age of economic stagnation and social crisis, and the two are intimately connected,” Ross Douthat wrote this about the end of Mike Huckabee’s 2012 presidential prospects in The New York Times:
Heâ€™ll be missed because he embodied a political persuasion thatâ€™s common in American life but rare in Americaâ€™s political class. This worldview mixes cultural conservatism with economic populism: itâ€™s tax-sensitive without being stridently antigovernment, skeptical of Wall Street as well as Washington, and as concerned about immigration, family breakdown and public morals as it is about the debt ceiling.
This combination of views represents one of the plausible middle grounds in American politics.
Read the whole article HERE. Hat tip to Bill Mattox for sending it our way.
“The lifestyle we have today is based on miracles.”–Bill Gates on GPS with Fareed Zakaria
Bill Moyers on yesterday’s Bill Moyers Journal offers up some advice (you can watch a video clip of the same content here):
With all due respect, we can only wish those tea party activists who gathered this week were not so single-minded about just who’s responsible for their troubles, real and imagined. They’re up in arms, so to speak, against big government, especially the Obama administration.
But if they thought this through, they’d be joining forces with other grassroots Americans who will soon be demonstrating in Washington and elsewhere against high finance, taking on Wall Street and the country’s biggest banks.
The original Tea Party, remember, wasn’t directed just against the British redcoats. Colonial patriots also took aim at the East India Company. That was the joint-stock enterprise originally chartered by the first Queen Elizabeth. Over the years, the government granted them special rights and privileges, which the owners turned into a monopoly over trade, including tea.
It may seem a stretch from tea to credit default swaps, but the principle is the same: when enormous private wealth goes unchecked, regular folks get hurt – badly. That’s what happened in 2008 when the monied interests led us up the garden path to the great collapse.
Suppose the Tea Party folk had dropped by those Senate hearings this week looking into the failure of Washington Mutual. That’s the bank that went belly up during the meltdown in September 2008. It was the largest such failure in American history.
Fareed Zakaria on CNN’s GPS Sunday:(emphasis added)
“In 1979 Paul Volker was appointed Chairman of the Federal Reserve and he began to raise interest rates to crush inflation. It succeeded. And it had a follow-on affect around the world ushering in an era of low inflation, low interest rates and strong growth. What impresses me most about Volker was his willingness to do something that was deeply unpopular at the time in the short term for the long term good of the country. What he did then is now widely praised, but at the time he was burned in effigy as a job destroyer.
If you think about just about every problem we face in the United States, and in fact in Europe, Japan and every advanced industrial country, the solutions are readily identifiable. But they all involve trimming benefits, restricting credit, raising retirement age, trimming pensions and of course raising taxes. The effect of these reforms would be to place the country on much stronger economic foundation, but that benefit comes slowly over time while the costs are sharply felt now and by powerful special interests.
That’s why no one will propose any serious cuts in spending or any serious increases in taxation. Much easier to give everyone what they want and solve the problem by borrowing, borrowing, and more borrowing. So the core problem facing rich democracies these days is they can’t impose any short-term pain for long-term gain. And if we can’t find the the courage to do it, it is very difficult to be optimistic about the future for these countries, including the United States.”
Jump on over to Purple State of Mind to read the entire interview with Village Square board member Neil Skene. Here’s a tickler:
The thing about the political â€œbaseâ€ of both parties is that they are much more in love with rhetoric and litmus tests than results. Ronald Reagan didnâ€™t reduce the federal budget, and Jeb Bush didnâ€™t reduce Floridaâ€™s budget, but they talked a great game and remain conservative heroes. Conservatives love to pass â€œsunset lawsâ€ and â€œbalanced budget amendmentsâ€ and everything else, but they rarely declare their opposition to any consequential program and successfully turn that position into policy. Liberals have their own philosophical litmus tests, around race and social programs, for example, but are often unable to manage what we already have.
Bottom line recommendations from The LeRoy Collins Institute:
Modify Class Size Amendment
Redress under-funding of higher education
Reform Bright Futures
Assess infrastructure needs
Conduct comprehensive examination of Medicaid
Join interstate compact on internet sales
Add new construction concurrently on tax rolls
Access adequacy of impact fees
The LeRoy Collins Institute expects a coming increase in Medicaid enrollment and calls it the “800 pound gorilla” as we make tough fiscal choices. From the recently updated report â€œTough Choices: Shaping Floridaâ€™s Future”
Medicaid currently accounts for more than 25% of Floridaâ€™s budget, insuring a quarter of Floridaâ€™s children and funding 63% of the stateâ€™s nursing home care. As we noted in Tough Choices: Update 2008, cuts in Medicaid spending not only leave many residents of Florida with costly, uncovered medical expenses but they also leave available matching federal money on the table. Health care research shows that when providers are financially strapped, quality of care for serious conditions gets worse.
In our original Tough Choices recommendations in 2005 we urged a careful assessment of Medicaid as a prerequisite for both making cuts and improving the effectiveness of the massive safety-net program. Instead, the state has continued to cut services here and there without a careful assessment of their impacts and without a full understanding of the intricacies and myriad components of the Medicaid system. We continue to urge a careful assessment of Medicaid, including prioritization of services and recipients, prior to additional incremental reductions.
“I think we need to bring education funding back up. If weâ€™re going to be competitive economically, we have to have a world class education system. We had a very conservative governor who thought education was important and thought that a 72 billion dollar education budget was necessary for this state. Now weâ€™ve cut down to the low 60â€™s. Weâ€™ve cut too low and we must bring it back.” –State Senator Thad Altman (R- Melbourne)
On seeking a higher education: “Because if you think in your own families, your own lives, who was the first person in your family, the very first, who decided they would seek higher education? Maybe it was you, maybe it will be your children, maybe it was your father or your grandfather or mother or grandmother. But the moment that Rubicon was crossed, the moment that someone in your family decided they were going to advance themselves to a different level, your entire family changed, forever. And guess what? So did your community, when it happens in multiples and so did your city.and so did your county and your state and your nation.” –State Senator Dan Gelber (D- Miami Beach)