Category Archives: Random Blogging

Bottom-line Ideology Bites

The news-magazine show Sunday Morning had a fascinating piece this week on a new approach to debt collection. The story reported on a collection company that refuses to employ the typical tactics–harassing phone calls, threats and the like. Instead, the collectors work respectfully with the debtors, helping them to renegotiate what they owe and manage their finances more prudently. The founder’s basic premise: people would pay their bills if they had the money, and hounding them is unlikely to give them the means to pay.

According to the company’s owner, his firm is twice as profitable as those using the more traditional tactics.

Respect for people–what a concept!

Respect for the worth of one’s employees can also boost profits, no matter how counter-intuitive some “hard headed” businesses might find that simple premise.

I’ve written before about the difference between the approach of Costco and Sam’s Club to  their workers. Costco pays its workers, on average, twice as much per hour as Sam’s Club, and provides them with health insurance to boot. Yet it is far more profitable.

There is a self-defeating belief among some businesspeople to the effect that a healthy bottom line depends on cutting costs wherever possible, especially personnel costs. There is plenty of evidence to the contrary: employee turnover and disaffection can cost more than skimpy payrolls can save. That is a lesson that even Walmart appears to be learning. The company recently announced that some 35,000 part-time workers will be returned to full-time status–entitling them, not so coincidentally, to heath coverage as required by  the Affordable Care Act.

As Forbes reported, Walmart’s unwillingness to pay most of its workers a living wage has left the company without enough full-time workers to properly run a retail outlet. The result has been that the company has placed dead last among department and discount stores in the Customer Satisfaction Index for the last six years.

Furthermore, again according to Forbes, Walmart sales have been “sinking dramatically”–a state of affairs that even Walmart has concluded is the result of its relentless effort to avoid paying decent wages and offering health insurance.

This was a lesson learned by Home Depot in the early 2000s, when its CEO cut full-time staffing in hopes that the savings would boost the bottom line. It worked–briefly. Then customer service declined, and with it, same-store sales. Home Depot reversed course–and profits rose.

As the Forbes columnist noted,

Who  would have guessed that a well-staffed store filled with competent and reasonably paid employees might actually have an impact on the success of a company?

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From the Mouths of Babes….

Okay, so maybe not babes. Actually, graduate students.

Where I teach, at SPEA-IUPUI, students have the option of enrolling in “Directed Studies,” essentially, tutorials in which a professor supervises student research that culminates in a relatively lengthy and (hopefully) analytical paper on a subject that the student wishes to explore.

I recently worked with a student who wanted to understand why lower-income Americans so often vote against their own economic self-interest.

The paper he turned in gave evidence of considerable research, and it made a number of very good points. He gave me permission to share a couple of his more intriguing conclusions.

For example, he looked closely at Paul Ryan’s 2012 proposed budget, and the analysis of that budget by the Congressional Budget office. As widely reported, the plan proposed massive savings to be generated by “adjusting” Medicaid and turning Medicare into a “voucher” system. It also dramatically reduced corporate and individual tax rates, while purportedly “growing overall revenue…What was not included, however, was the way Mr. Ryan intended to grow this revenue.”

These specifics would seem to be particularly important, since the plan made very clear that tax receipts would plummet and defense spending would increase. As my student recognized, however,  actually identifying specifics–in this case, specifying the programs that would be cut and the extent of those cuts–would spell political doom.

“This is an example of calculated policy ambiguity. When presented to less educated voters or those who do not possess the means or time to fact-check its claims, it appears as a viable way to aid our country in the face of mounting debt. However, when examined closely it reveals a strategy of political gamesmanship and a budget plan that would hurt most those its simplified talking points are aimed to attract.”

A second tactic pinpointed in the paper revolved around the deliberate use of religion to divert focus from bread-and-butter issues–the use of hot-button “wedge issues” to obscure the economic harms likely to flow from other, less emotionally-freighted policies and positions. The paper cited research showing that religiosity is more important than income, sex, age or ethnicity in predicting support for conservative causes.

So. Bright shiny objects (Stop the “homosexual agenda”!! Birth control means sex without consequences!! War on Christmas!!) plus “calculated economic ambiguity.”

Sounds about Right.

There Must Be a Pony Here Somewhere

As if the posturing and idiocy of the shutdown weren’t enough, Ed Brayton quotes Ezra Klein on the GOP’s opening debt limit gambit.

The House GOP’s debt limit bill — obtained by the National Review — isn’t a serious governing document. It’s not even a plausible opening bid. It’s a cry for help.

In return for a one-year suspension of the debt ceiling, House Republicans are demanding a yearlong delay of Obamacare, Rep. Paul Ryan’s tax reform plan, the Keystone XL pipeline, more offshore oil drilling, more drilling on federally protected lands, rewriting of ash coal regulations, a suspension of the Environmental Protection Agency’s efforts to regulate carbon emissions, more power over the regulatory process in general, reform of the federal employee retirement program, an overhaul of the Dodd-Frank financial regulations, more power over the Consumer Financial Protection Bureau’s budget, repeal of the Social Services Block Grant, more means-testing in Medicare, repeal of the Public Health trust fund, and more…

House Republicans are walking into the debt-ceiling negotiations with an opening bid that makes them look ridiculous. This looks like an Onion parody of what the House’s debt-ceiling demands might be. It’s a wonder it’s not written in comic sans.

Words fail.

While there have been recent signs that Boehner may be retreating from the Tea Partiers’ insistence on pushing the world economy into depression if they don’t get their way, this opening demand would seem to prove a point often made by people who object to the “plague on both your houses” or “they all do it” constructions so beloved by the media–the so-called false equivalency.

Perhaps over time, we can count on both political parties to be equally irresponsible, but right now, no one can beat the GOP for sheer lunacy.

At their most idiotic, next to this, Democrats look like statesmen.

It’s Not a Game!

Or is it?

From Talking Points Memo:

The reason Congress is mired in repeated fiscal crises is that Republicans have thwarted budget conference negotiations since April, when the two chambers passed their own deeply divergent budget resolutions. Senate Democrats have requested conference negotiations 18 times and Republicans have denied their request each time.

“After blocking Senate Democrats’ attempts to start a budget conference 18 times over the past six months, Republicans are now scrambling to start a conference committee with mere minutes to go before a government shutdown,” said Senate Budget Chair Patty Murray (D-WA).

I am so tired of self-important bloviators engaging in PR and theatrics at the expense of governing. I’m furious with self-described “patriots” and “Christians” who pontificate about the Constitution and morality, and then proceed ignore both and to play games with the lives and health of ordinary Americans.

And I’m frustrated that the rest of us can’t seem to do anything about it.

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Sunday Sermon

I was reading a paper sent to me by a member of our Center’s National Advisory Board, and was struck by the following paragraph:

Democratic modes of association are not given by nature; on this the historical record could not be clearer. Rather, they are built, and much of the construction work is done by people who share an understanding of what kind of polity they are trying to create. These people are not born grasping the difficult political principles of limited government, civil rights and liberties, toleration and equality before the law. These are social, moral and cognitive achievements.

Those “social, moral and cognitive achievements” are missing from the zealots who are currently holding Congress–and the American government–hostage.

We ordinary Americans will bear the brunt of their absence.

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