Why We’re in This Mess

March 1, 2013

The NYS Comptroller revealed today that New York State overpaid Medicaid $26 million due to flaws in the computer system built to process claims. We should be pleased that the Comptroller’s auditors found the problem and that the NYS Dept. of Health is implementing the OSC recommendations. Unfortunately, however, this is another case of shutting the barn door after the entire herd escaped.

What the Comptroller’s press release does NOT tell us is why the mistake was made? Who developed the computer system? Was it a private contractor or an in-house system? Was political favoritism involved either in choosing the winner of a bid or deciding against letting a contract for the system? Why did it take so long to discover the problem? Will any heads roll as a result?

In a nutshell this is the problem with modern government––federal and state. No one takes responsibility or pays the price either for success or failure.

Andrew Mason, Groupon CEO, lost his job today. It probably should have happened in November of last year. He did a lousy job and he had to go.

In the public sector, you have to commit a crime to lose your job and, if you’re a teacher in the NYC school system, even that’s not assured.

In the public sector, no one pays the price when $26 million dollars are pissed away, just like no one is rewarded beyond their regular salary if they save the taxpayers money or exceed expected results.

That is why so many government run programs either fail or produce mediocre results. We rely on the good will of the public sector employee to care about the results. That’s nice when it works, but what about when it doesn’t work? What about when a person has been promoted above their level of competency? What about when someone consistenly makes bad decisions? What about the lack of oversight coming from the Executive Chamber and the White House?

Management in the public sector suffers because our elected officials seem to spend 99% of their time campaigning. Even Barack Obama spends most of his time campaigning and he can’t run again.

Who’s minding the store?

Sampling other recent audits from the Comptroller’s office we learn that many localities fail to employ proper procedures for monitoring expenditures. A few examples:

• Payments were made to the clerk-treasurer of the village of Richmondville without board approval.
• In the village of Forestville, “the clerk-treasurer’s records for the water fund were inaccurate and misrepresented the fund’s financial condition.”
• The Town of Finley board “did not develop and adopt accurate budgets…based on realistic estimates of revenues and expenditures.”
• The Village of Parish’ board “did not ensure that all claims were audited prior to payment…”
• There are significant weaknesses with the timeliness and accuracy of how the town of Livingston’s tax collector recorded, supported, deposited, disbursed and reported tax payments.
• Internal controls over cash receipts and disbursements were not appropriately designed or operating effectively for the Niagara County Soil and Water Conservation District.

In a year’s time, the Comptroller’s office finds dozens of examples of mismanagement and poor controls. They also find fraud and theft, which lead to criminal prosecution and conviction. But keep in mind that what is discovered is only the tip of the iceberg and all of the problems are discovered AFTER THE FACT.

All of the above explain why so few Americans––other than the ones who are going to be furloughed––are upset about sequester. Americans know in too many instances their local, state and federal governments are not being managed properly. They know too much of their money is being wasted. They know too many of those who should be benefiting from government programs are being short-changed.

That’s the part of the story some people don’t want to hear. It’s not because the public hates government or doesn’t think it’s needed. What we hate is mismanagement and waste––not the public sector employee. We hate that system doesn’t include the possibility that a bad job is punished and a good job is rewarded. We hate thinking this is the best there is. AND, we hate those who make excuses and blame the messenger. It’s time the apologists for mediocrity and failure took some responsibility or get out of the way. Let’s clean up this mess now.


Who’s Watching Washington?

February 14, 2013

In light of President Obama’s pledge to introduce more programs to solve our nation’s problems, someone ought to ask him how those already in place are doing! How well are taxpayers being served by the Energy Department’s Economic Recovery Act grants, for example? The one to LG Chem Michigan, the manufacturer of car batteries, seems to have been a near total waste of $150 million dollars. According to today’s Washington Post (Page A11), the U.S. Inspector General issued a report that found less than half of the promised jobs were created AND workers were found to be playing games, watching movies––even volunteering for animal shelters WHILE GETTING PAID.

Those were monies that the administration spent to stimulate the economy and we already know they deserve a C at best for those efforts. What about the day to day routine operations of government in Washington? Let’s take the U.S. Department of Housing and Urban Development as a case study in how Washington operates. First, Congress authorizes expenditures that propose to solve some problem. In this case affordable housing. Then dozens of people are hired to administer the program at the federal level and of course at the state level as well. Then if there’s anything left over, local politicians decide where those monies are spent and which of their campaign donars get the work. The people who need affordable housing? A few of them get the housing, but not as many as if Washington had just given them the money in the first place and let them buy their own housing.

Then there’s the sad truth that all these federal and state employees whose job it is to manage the $1 to $2 billion annual expenditure designed to build, buy or renovate housing are not up to the job. I don’t blame them individually, but I do fault the concept. Why would we expect layers upon layers of bureaucrats to be able to do a good job managing monies whose intent is clouded by political aims? At best the U.S. Department of Housing and Urban Development should be shuttered. If states want to use taxpayer monies to build and renovate affordable housing, fine, but why should the federal government be involved? Oh, the Inspector General–which seems to be the only agency in Washington that does its job–which found HUD’s oversight faulty a year ago says there hasn’t been much improvement (Washington Post, 2/14/13, Page A2). Are we surprised?

School Safety and the Meaning of Comprehensive

January 31, 2013

Protecting Children in Schools

The State Legislature has been trying to address the problem ex-service people are having finding work. There is a way to provide useful and needed work to ex-service men and women. Employ them as school security personnel.

The tragedy at Newtown made it very clear that current safety measures are inadequate. The buildings themselves need to be made more secure including systems that speed-up police response times. It took 20 minutes for the police to respond in Newtown. If they’d arrived sooner, there would be less focus today on the number of bullets allowable in a gun magazine.

Having security personnel in schools would also serve as a deterrent to those who would behave badly––parents irate about students’ grades or a teacher’s approach to a subject, fired teachers wanting to chew out an administrator, or a mentally ill person capable of inflicting bodily harm on children or teachers.

Adding trained security personnel would counter balance the fear now felt by millions of school children who were exposed to the Newtown story. They would see that their country cares enough about them to protect them.

In my opinion these security personnel should not wear uniforms and their weaponry should not be prominently displayed, for to do so only adds to children’s fear level. It’s enough that they know that person is there to protect them. Monies should be taken from the TSA program, which was a huge over-response to the problem and needs to be down-scaled, and if not enough former military personnel are available to work in schools, hire ex-TSA monitors.

Political Dictionary: The Meaning of Comprehensive

You may think you know the meaning of comprehensive, but if you apply the standard meaning to the political realm, you’re going to miss what’s really going on.

When a politician calls for a comprehensive approach to a problem, such as health care or immigration, here’s what s/he is saying to the members of the other party. “I’m going to hold up a needed change, which I happen to agree with, as a bargaining chip because your constituents want it more than mine.”

Too abstract? Let’s take an example from the current discussion of immigration reform. The business community would like to be able to hire more skilled workers than they are able to find domestically. They would like to offer unfilled job openings to non-US citizens, but the quotas are too small to meet the need. Making that change, which has nothing to do with ILLEGAL immigration, has been held up and tied to a comprehensive solution. Why? Applying our understanding of the meaning of “comprehensive,” it must be that the Republicans want it more than the Democrats and the Democrats won’t deal with it by itself because they think they can use it as a bargaining chip to get something they want.

Hence, whenever you hear anyone in Washington call for a comprehensive approach to an issue, you can bet your last dollar that legislation with bi-partisan support is being held up in hopes that it can be used to get someone to support legislation favored by only one party.

When is a lie not a lie? Answer: When the public believes it.

January 6, 2013

President Obama’s claim that the cliff deal reduced the deficit by $737 billion earned only one Pinocchio from the Washington Post’s Glenn Kessler. The fact is that the deal cost $3.8 billion in lost revenue over ten years, and middle class families––who supposedly didn’t have their taxes raised––are losing the payroll tax break which the President claimed as part of his tax cut during the campaign.

But Obama deserves at least one more Pinocchio for pretending the tax rate hike truly impacts the wealthiest 2 percent of Americans. In fact, it only impacts to any meaningful extent high salary wage earners (like pro athletes). As Rush Limbaugh and others have pointed out, the deal doesn’t impact Warren Buffet and the truly wealthy whose income is derived from capital gains or carried interest (which is income that is treated as a capital gain). Warren’s rate will only go from 15% to 20%––which is still less than his secretary will pay if she earns more than $36,250 (assuming she’s single or she and her husband earn more than $72,500.)

Here’s Kessler’s conclusion: “In effect, Obama is arguing that eliminating the tax cuts for the wealthy reduces the projected deficit, but keeping tax cuts for all other Americans…has no impact on the deficit.” Further, the end of the tax holiday is not a tax increase because it was deemed to be temporary. Got it?!

Why is any of this important? If we’re not used to Washington truthspeak by now, we haven’t been paying attention, right? The point is that Obama and the Democrats can’t and won’t stop with this victory. They will need more revenue in order to implement their agenda. Therefore, like the Communist Party of the Soviet Union, which claimed they had gotten rid of all the capitalists until they needed to impose some new harsh measure and therefore found some vestiges of capitalism that had escaped their prior house cleaning, the Democrats are suddenly going to discover that the wealthy still aren’t paying their fair share––only this time, they’re going to have to include more people in the “wealthy” category in order to meet their spending needs.

Limbaugh argues the Democrats can’t touch the truly wealthy because they are dependent on them for campaign contributions. So, look for wage earners in the $250,000 to $450,000 category to be the sacrificial lambs in the next Democratic Party tax deal. How many Pinocchios would you give them?

Fast, Furious and Wrong: The Response to Connecticut

December 18, 2012

Sunday night I had a conversation with a couple who were planning on attending the protest the next day in Washington, D.C. at NRA headquarters. They were going despite believing incorrectly that a semi-automatic gun sprays bullets and despite not knowing that re-instating the federal assault weapons ban would not have prevented Adam Lanza’s mother from buying the guns used in Newtown. They did not know that Connecticut already has an assault weapons ban or that neither the rifle nor the pistols in Adam’s possession are classified as “assault” weapons under that law, nor did they understand that the number of bullets in the magazines used by Lanza made little difference in the outcome given the number of guns he had at his disposal.

One can excuse the ignorance of people who are outraged at the loss of so many lives, but not the behavior of politicians who leapt onto the public stage trying to be the first to go on record as saying we need more gun control. Elected officials should know the history of gun control legislation and should know that assault rifle bans and limits on magazines would not have prevented the Connecticut tragedy.

It is natural when hearing about such events to want to do something to prevent a reoccurrence, but legislation enacted in the heat of the moment is inevitably foolish legislation. Assault rifle bans are a case in point. To begin with the definition of an assault rifle is a political construct without correspondence in the world of weaponry. Second banning the manufacture and sale of certain types of guns will not prevent those who intend on doing harm to others from obtaining guns. It would take years to reduce the number of such weapons that currently exist in private hands, and it is inevitable that outlawing specific types of guns will create a black market for the import and sale of outlawed guns to those with enough cash and desire to obtain them.

Too often legislation is passed to make the legislators feel good and of course to give them something to brag about to their constituents. They pass bills without regard for whether their legislation will actually accomplish what they claim. Criminal justice legislation is the prime example of this fallacy. Increasing the penalty for a crime has zero impact on the likelihood that someone will commit that crime since most crimes are committed in moments of anger or out of drug-induced need and such criminals have no idea, nor do they care, about the length of the sentence if caught.

The hardest thing for adults to do in a world where news is immediate and constant is to admit that there is nothing we can do about a situation. We cannot prevent some children from starving in Africa. That will take place even if we donate to relief organizations. We cannot prevent some children from being sold into slavery no matter how many letters we write demanding it be stopped. We cannot prevent certain some individuals from doing terrible things to others and/or themselves.

It’s also possible that passing a law is the worst possible thing we can do because it gives people the false impression that the problem has been solved and they can go back to ignoring the world around them.

What we can do is be conscious of things happening in our own lives. We can speak out when there’s a situation that doesn’t seem right. That still might not prevent a tragedy from occurring, but we don’t know how many Adam Lanzas are brought back from the brink by a conscientious teacher or neighbor.

Keeping guns out of the hands of the wrong people cannot be prevented entirely by passing assault weapon bans. We can and should try, but there is no perfect solution. That said, we can be better citizens by reaching out to those who appear to be in trouble. Nancy Lanza needed help. The cost of someone’s not giving it to her should make all of us more vigilant in the future.

The Plight of Black Males: My Take

December 14, 2012

Michael Gerson wrote about a topic today in his Washington Post column that I’ve given a lot of thought to over the years––“the plight of black males”. Gerson argues that “the vast, increasing segregation of young, African American men and boys from the promise of their country” constitutes the “greatest single threat to the unity of America.”

I don’t know where on the scale of threats to unity the plight of black men lies, but it is a major problem which Gerson correctly observes is not top of mind of most political leaders.

Few of us need to be reminded that black men are under-schooled, under-employed and in prison in higher numbers than any other identifiable group.

What are his solutions?

1. Promoting early childhood education and parenting skills––been there, done that.
2. Encouraging youth development and mentoring––ditto.
3. Expanding technical education and apprenticeships––ditto.
4. Fostering college enrollment and completion––ditto.
5. Offering greater opportunities for national service––like Job Corps? Ditto.
6. Extending wage subsidies to low-income, non-custodial fathers––Is that practical?
7. Reforming sentencing and easing prisoner re-entry––even this has been tried with mixed results.

In other words, everything he mentions has already been tried or is impractical. Gerson’s final message? Try harder, spend more money, and really mean it this time.

Sorry, Mr. Gerson. I’m with you on the need to do something, but your solutions are a recipe for continued failure.

To solve a problem one needs to understand the cause and while this problem is as complex as any social problem facing our country, solutions exist that can be identified.

To see the solutions, we need to look more closely at those black men who are succeeding despite the historical and cultural obstacles facing them. If no one were succeeding, the problem would have to be defined differently, but that’s not the case. Although the number of success stories is not high enough, some black men are succeeding. In other words, there are opportunities for those young men who can see them and who are sufficiently motivated to go after them.

I’m not talking about starring in the NFL or NBA. Instead I’m referring to those men who became employable either by going far enough in school or the military service to acquire a skill and work ethic or those who start on the bottom rung on a job and work their way from minimum wage to a living salary.

The problem is that there are too few non-school, non-military opportunities and too many young men are turned off by the prospect of starting as a stocking clerk and working twenty years before becoming an assistant manager.

Those young men see greater opportunity in gangs and drugs than in private sector employment. What it comes down to is the lack of employment opportunities for unskilled workers. Even “expanding technical education and apprenticeships” won’t solve the problem if there are no jobs for the graduates of those programs.

Some people blame the lack of such jobs on companies for shipping jobs overseas. The news on that front, however, is not all bad. Some companies are moving back to the US where they can see their way to success.

Opportunities for unskilled males in those communities where there is high unemployment can grow if government recognizes lack of attractive jobs is the primary problem.

Compounding that lack of jobs problem is the fact that public sector employment, which has been an outlet for minorities for the past 40 years, is drying up and will not grow as fast as it did in the past.

Economic growth is driven by access to capital, labor and markets. Policies that repress access to capital and attempt to control labor and markets, such as high taxes, excessive regulation, and funding the public sector to do work that can better be done by private sector all militate against the growth of economic opportunity.

Another major problem is the monopoly over construction trades by the union movement, which drives up the cost of construction projects and discourages hiring. Union leaders prefer to bribe their members with overtime than hire an extra hand. Right to work laws therefore will help minority youth gain employment opportunities.

Obamacare will exacerbate the problem, as private sector companies will be loath to hire someone unless they are absolutely certain that potential revenue will exceed the cost of that person’s labor including the cost of healthcare. In too many union shops the math doesn’t add up, which again is why right to work laws are critical for minority youth opportunity.

Finally, let’s address the question of racism. In my opinion it belongs at the bottom of the list of factors that contribute to the plight of black men. Employers want to hire people who will help their businesses succeed. Present the right attitude and walk your talk and you’ll succeed.

Bottom line. Foster economic growth and in time the plight of black men will no longer threaten national unity.

Michael Gerson wants leadership in driving that solution to come from the current occupant of the White House. Unfortunately, that’s not going to happen. Obama’s agenda is anti-growth pure and simple.

Progress is being made in some states and localities (like Texas) and that’s where Gerson will have to look if he wants to publicize examples of success in addressing the minority employment problem.

I hope Gerson continues to focus on this problem and that he begins to sort out solutions that have a chance of succeeding from those that are built on a misleading analysis of the cause.

Sandy is Katrina Repeat

December 3, 2012

How well prepared was the federal government’s disaster recovery agency for the impact of Sandy? About as well prepared as they were for Katrina it appears. Which means not well prepared at all.

Despite the Siena College poll giving high marks to FEMA, the facts on the ground are very different.

See Answers in short supply as exasperated Staten Islanders throng Sandy forum.

Of course, Siena wasn’t able to poll any of the people who are frustrated with FEMA because those people don’t have houses much less telephones!

That exposes the flaw in polling. The positive response reflects news coverage about the event and the news media have largely ignored FEMA’s failures in dealing with Sandy’s victims–in contrast to how they treated FEMA after Katrina.

It’s a self-fulfilling proposition. Tell people FEMA is doing a good job. Then ask them how FEMA is doing! But don’t ask the victims. That would spoil the story.