The blog 'Breaking Bread' is for a civil general discussion, like you might have at the dinner table with guests. The posts 'Economics Without the B.S.' are intended for a general audience that wouldn't have to know the difference between a Phillips Curve, a Laffer Curve, or a Cole Hamels Curve.
Vic Volpe was formally educated at Penn State and the University of Scranton, with major studies in History, Economics and Finance, and Business; and, is self-educated since by way of books and on-line university courses. His practical education came from fifty years of work experience in the blue-collar trades as well as a white-collar professional career -- a white-collar professional career in production and R&D. In his professional career and as a long-haul trucker, he has traveled throughout the lower forty-eight. From his professional career alone he has visited many manufacturing plants in the United States, Europe and China. He has lived in major metropolitan areas and very small towns in various parts of the United States. He served three years with the U.S. Army as an enlisted man, much of that time in Germany.
Economics Without The B.S.**: Anat Admati: The most dangerous woman in America
[** Double entendre intended.]
Anat Admati: The most dangerous woman in America
James Pethokoukis of
the American Enterprise Institute had an article out this week with this
headline. Binyamin Appelbaum of the New
York Times had an article out this past week also, ‘When She Talks, Banks
Shudder’.
Last month President
Obama met with Anat Admati to discuss her views – about six years too late.
The present Social
Security Program, if fixed with the modifications that have been historically
made, is sustainable over the long-term, economically sound, and socially
responsible – so say the actuaries (namely Stephen Goss) who work on the
program and are responsible for providing guidance for the sound upkeep of the
program.
Star Parker’s
recommendation to fix Social Security was to turn it into a retirement savings
program; but, Social Security was designed from its start over seventy years
ago as a social insurance program to primarily benefit low-to-middle-income
Americans. Her 30/30 Plan is inadequate
to address the realities of someone who earns $30,000 or less. To talk about savings at this income level is
a non sequitur, often they are in a negative net worth status and so they are
unable to build any kind of real savings.
Social Security addresses this by being a forced savings program, not
voluntary; and, by being a guaranteed benefit, not one that is subject to the
risks of the marketplace borne by the individual participant.
She talks about
building on the first principles of our free society but ignores one of the
basic ones, promoting the general welfare, which Social Security does by being
redistributive in nature and progressive in dispensing benefits to the lower
incomes in our society – the sine qua non of social insurance.
She talks about an
ownership society and implies that Social Security is part of our welfare state,
not recognizing that we all pay into Social Security and that it is not
financed by tax payer dollars from the General Fund but from the Social
Security Trust Fund, currently with a $2.7 trillion surplus, that we (and our
employers on our behalf) paid into. We
earned it; and, that is why it is an entitlement program – not welfare.
The Social Security Program
is not hopelessly broken. Mr. Goss, the
Chief Actuary, has plenty of statistical studies to show that the type of
modifications that were made in the past – raising the income cap, raising the
payroll tax, adjusting the retirement age, re-computing the benefit formula,
etc. – and were gradually phased in so as not to shock people can restore the
system as is to long-term sustainability.
The biggest obstacle to this has been political inaction because
politicians would be labeled as tax increasers.
But President Reagan was able to gather a bi-partisan group to fix
Social Security the last time it faced a similar crisis in 1983. Is there any politician who expects to get
re-elected after telling Granny that she is only going to get 75 cents on the
dollar for benefits?
We live in a democratic
system. It is up to each generation that
participates in the Social Security System to either renew that support or find
a different approach. Political will is
not just a test for politicians, but also a test for the people they serve.
Our Constitution is
not, and never has been, a static document.
The fundamental principle of our democratic process is that we govern by
the consent of the governed while respecting
dissenting opinions. Each
generation that comes along gets to renew its pledge to our Constitution.
Institutionally and
culturally we are not a status quo nation.
(1) In our founding documents, the Declaration of
Independence and the Constitution, you will find a variety of values stated:
liberty, equality, promoting the general welfare, life and the pursuit of Happiness. They
are neither defined, delineated, nor ranked in order. They can at times conflict with one
another. Sometimes we lean one way
during a conflict; and, sometimes we lean the other way. We are constantly re-examining our
values. Each generation does this.
Andrew Jackson’s Presidency was the first
deviation from the founding fathers – giving a Western/frontiersman
interpretation to liberty, rugged individualism mixed with an egalitarian
spirit, and the ‘Common Man’ mythology.
(2) Institutionally
we have a federal system of government that not only divides power among the
branches of government but also between the federal government and state and
local governments. That division of
power may cause competitiveness in our political system; but, it means that in
order for something to get accomplished cooperation rules and the game plan is to build viable coalitions. Those political leaders that can forge a
consensus are successful in our political system. Factions have never ruled. [Read Federalist Paper #10 – Madison; and E
Pluribus Unum, from many, one.]
As independent individuals, we function through institutions. Politics is the exercise of power; so,
influence, money, organization come into play not only in our political sphere
but also in the economic and social realms.
They are not separate, distinct entities. One is the mirror image of the other. The ability to organize is what determines
the effectiveness of exercising power.
(3) Culturally we have always been a diverse
nation, right from our beginning. Very
quickly in our history we spanned the continent to become a contiguous continental
nation. We have always had a mixture of
people in our nation, non-English speakers and not of a European origin. We are probably the only nation in history
that is not defined by an ethnic or religious makeup but instead by a loose
governing concept. As different people
come here they eventually figure it out.
This also has fed into the re-examination of our values through time. When Andrew Jackson
became President in 1829, his Western outlook of individualism redefined
democracy, a word and concept – albeit direct democracy – which was considered
with great caution on the part of our Founding Fathers; and, has now been woven
into the fabric of Americanism.
Unlike other cultures
in history that upon reaching greatness become status quo, we are a dynamic
system that has incorporated change into our system, institutionally and
culturally. You can refer to it
as change; or, you can think of it as a self-correcting mechanism built into
the political process.What may be
perceived as a wrong from a previous generation can be righted in a future
generation. That is what makes us unique
and has contributed to our greatness.
I guess I should add
the influence that popular American culture has on foreign cultures in
spreading American values in a world connected globally. As
other cultures pick up on popular American culture like music (jazz, rock n’
roll, hip hop, etc.), the movies, and art and architecture they pick up on
their interpretation of individual freedom, liberty, equality, gender and
sexual equality and freedom, and a youth culture and the impact it has on these
“foreign” cultures. And these “foreign”
interpretations get reflected back on America.
Warren G. Bennis, an eminent scholar and author who advised presidents and business executives on his academic specialty, the essence of successful leadership — a commodity he found in short supply in recent decades — died on Thursday in Los Angeles. He was 89.
The University of Southern California, where he had been a distinguished professor of business administration for more than 30 years, announced his death on Friday. He lived in Santa Monica, Calif.
Professor Bennis wrote more than 30 books on leadership, a subject that grabbed his attention early in life, when he led a platoon during World War II at the age of 19.
“I look at Peter Drucker as the father of management and Warren Bennis as the father of leadership,” William W. George, a professor at the Harvard Business School and a former chief executive of the medical device company Medtronic, said in an interview in 2009.
As a consultant, Professor Bennis was sought out by generations of business leaders, among them Howard D. Schultz, the chief executive of Starbucks, who regarded him as a mentor. Presidents John F. Kennedy, Lyndon B. Johnson, Gerald R. Ford and Ronald Reagan all conferred with him.
Photo
"Still Surprised" by Professor Bennis.
As an educator, he taught organizational studies at Harvard, Boston University and the M.I.T. Sloan School of Management.
Professor Bennis believed in the adage that great leaders are not born but made, insisting that “the process of becoming a leader is similar, if not identical, to becoming a fully integrated human being,” he said in an interview in 2009. Both, he said, were grounded in self-discovery.
In his influential book “On Becoming a Leader,” published in 1989, Professor Bennis wrote that a successful leader must first have a guiding vision of the task or mission to be accomplished and the strength to persist in the face of setbacks, even failure. Another requirement, he said, is “a very particular passion for a vocation, a profession, a course of action.”
“The leader who communicates passion gives hope and inspiration to other people,” he wrote.
Integrity, he said, is imperative: “The leader never lies to himself, especially about himself, knows his flaws as well as his assets, and deals with them directly.”
So, too, are curiosity and daring: “The leader wonders about everything, wants to learn as much as he can, is willing to take risks, experiment, try new things. He does not worry about failure but embraces errors, knowing he will learn from them.”
But Professor Bennis said he found such leadership largely missing in the late 20th century in all quarters of society — in business, politics, academia and the military. In “On Becoming a Leader,” he took aim at corporate leadership, finding it particularly ineffectual and tracing its failings in part to corporate corruption, extravagant executive compensation and an undue emphasis on quarterly earnings over long-term benefits, both for the business itself and society at large.
He worried until recently about what he called a “leadership vacuum” in America, a problem he said was caused to a great extent by a lack of high-quality leadership training at the nation’s business schools.
A dearth of visionary business leaders, he said, meant that companies were being led more by managers of the bottom line than by passionate, independent thinkers who could steer an organization effectively.
“We are at least halfway through the looking glass, on our way to utter chaos,” he wrote in “On Becoming a Leader.” “When the very model of a modern manager becomes C.E.O., he does not become a leader, he becomes a boss, and it is the bosses who have gotten America into its current fix.”
Warren Gamaliel Bennis was born in the Bronx on March 8, 1925. He grew up in Westwood, N.J., during the Great Depression. In 1933, his father, a shipping clerk, was fired “with no appeal and no justification,” Professor Bennis recalled in an interview for this obituary in February.
“I was struck at how he was left in a situation where you are helpless, where the next morning you are out of work,” he added. “For the next three or four months, he was loading illegal booze on the Mafia’s trucks to keep food on the table.”
The experience taught him about the power of organizations and their impact on lives. “That will never happen to me,” he recalled thinking. “I will never lose my power to affect my own life.”
With the outbreak of World War II, he enlisted in the Army and completed officers’ training at Ft. Benning, Ga. In 1944, as a newly commissioned 19-year old lieutenant, he became one of the youngest platoon leaders to serve in Europe, arriving just as the Battle of the Bulge was concluding. He was awarded both a Purple Heart and a Bronze Star.
After the war he enrolled at Antioch College in Ohio and earned a bachelor’s degree in 1951. Its innovative president, Douglas McGregor, a social psychologist, had taken him under his wing and recommended him to M.I.T. for postgraduate work. There he completed a doctorate in economics, studying under Paul A. Samuelson, Franco Modigliani and Robert M. Solow, all of whom were later awarded the Nobel in economic science. Organizational behavior was an emerging academic discipline, and Professor Bennis immersed himself in it.
In the late 1960s Professor Bennis took a break from theoretical work and accepted an appointment as provost of the State University of New York at Buffalo for four years. That was followed by a seven-year stint as president of the University of Cincinnati.
A heart attack in 1979 during an academic conference in England sidelined him for three months of recuperation. After returning to the United States he joined U.S.C. in 1980 as a business professor.
Reinvigorated, Professor Bennis wrote a series of influential books, including “Leaders: Strategies for Taking Charge” and “Why Leaders Can’t Lead,” and began advising business and political leaders more regularly.
Professor Bennis’s first marriage, in 1962, to Clurie Williams, ended in divorce. He is survived by his wife, Dr. Grace Gabe, a physician he married in 1992; his children from his first marriage, Katherine, John and Will Bennis; his stepdaughters, Nina Freedman and Eden Steinberg; six grandchildren; and four step-grandchildren.
Since 1999 Professor Bennis had been chairman of the advisory board of the Center for Public Leadership at the John F. Kennedy School of Government at Harvard. His memoir, “Still Surprised,” was published in 2010.
In recent years Professor Bennis became more optimistic about the next wave of business leaders, labeling it “the Crucible Generation,” which he said compared favorably to his own World War II generation.
Rather than hubris and arrogance, he said, this new generation’s brand of leadership may well be characterized by “respect, not just tolerance.” He saw signs that business leaders in the decades to come, inheriting a diverse and complex global environment, would have a better understanding of the territory in which they lead — what he called “contextual intelligence.”
“The truth,” he wrote in an essay in Forbes magazine in 2009, “may be that history, in its kindness, gave this new generation a grand crucible challenge, as it did my own. The young of today have been summoned to receive that same kindness through the collective failures of their elders.”
