Public Policy and Governance – Page 329

Trust and Transparency

A couple of years ago, I wrote a book titled “Distrust: American Style” in which I argued that much of our current social dysfunction and polarization results from a massive loss of trust in our common institutions–not just government, but also big business and even nonprofits. Think of Enron and World Com, think of the Red Cross scandals, think of doping sports stars. Think of the Catholic Church cover-up scandal.

Things haven’t improved since I wrote the book. In the wake of the fiscal collapse triggered by big investment banks and too-cozy relationships with the people responsible for regulating them, there has been enough information to tarnish our confidence in a whole raft of financial and governmental institutions. Pre-eminent among them were the ratings agencies–the entities most of us had long trusted to serve as “grey eminences” protecting us from accounting shenanigans and other trickery by carefully examining the books of those issuing debt instruments. That they operated with little transparency was rarely noted. What we discovered after the proverbial shit hit the fan was that the ratings agencies–paid by the issuers–weren’t above looking the other way in order to collect their very handsome fees. Somehow, this very real conflict of interest had escaped everyone’s notice.

So I must agree with Senator Bernie Sanders, who issued the following statement when Standard and Poor downgraded U.S. debt this weekend:

“I find it interesting to see S&P so vigilant today in downgrading the U.S. credit rating. Where were they four years ago when they, and other credit rating agencies, helped cause this horrendous recession by providing AAA ratings to worthless sub-prime mortgage securities on behalf of Wall Street investment firms? Where were they last December when Congress and the White House drove up the national debt by $700 billion by extending Bush’s tax breaks for the rich?”

Fair questions.

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Google That!

We’ve returned from vacation, and with reliable internet, blogging will once again become regular. In the meantime, here is my upcoming IBJ column.

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My husband and I just returned from a month visiting various parts of Europe–the sort of vacation that becomes possible only when your children are grown and gone. This trip afforded us the luxury of time for observation and reflection that shorter ones rarely did; I even had time to read some of the books I’d optimistically loaded on my IPad.

So what did I learn on my summer vacation?

One thing that immediately struck me was how homogenized citizens from western industrialized countries have become—how much we all look and dress alike. Thirty years ago, on our first trip to Europe, cultural differences expressed in clothing and mannerisms made it fairly easy to spot Americans. Over the intervening years, that has changed. Today, we dress alike, drive the same cars, watch the same television programs and listen to the same (mostly American) music. IPhones, IPods and IPads (and their various clones) are ubiquitous, as are Facebook and Google. Evidence of the globalization of culture—at least pop culture—is everywhere.

But beneath the surface similarities, there is evidence of quite a contrary trend; as Eli Pariser documents in his recent book, “The Filter Bubble,” the internet technology that promises (and delivers) so much is moving us into what he calls a “mediated future”—a future in which each of us exists in a personalized universe of our own construction.

In an effort to give each of us what we want, sites like Google, Facebook, and Amazon are constantly refining their algorithms in order to deliver results that are “relevant” to each particular searcher, and they have more data about our individual likes and dislikes than we can imagine. As a result, two people googling “BP,” for example, will not necessarily get the same results, and certainly not in the same order. Someone whose search history suggests interest in investment information may get the company’s annual report, while someone with a history of environmental interests will get stories about the Gulf spill. Similarly, Facebook delivers the posts of friends and family that its algorithm suggests are most consistent with the member’s interests and beliefs, not everything those friends post.

Pariser calls this the “filter bubble,” and points out that—unlike choosing to listen to Fox rather than PBS, for example—the resulting bias is invisible to us.

Little by little, search by search, individuals are constructing different–and disparate–realities. At the same time, traditional news sources aimed at a general audience—the newspapers and broadcasts that required reporters to fact-check assertions, label opinion and aim for objectivity—are losing market share. How many will survive is anyone’s guess.

The implications of both these changes—globalization and individuation—will be especially profound for our political structures. We are already seeing the dysfunctions that result when we elect people with radically different views of reality.

At SPEA, where I work, our mission is to teach aspiring public managers how to govern. This used to mean classes in budgeting, in cost-benefit analysis, in urban policy and human resource management. Today, we face more daunting questions: How do public servants govern effectively when there is no commonly accepted role for government? How do public managers communicate with citizens who do not—in any meaningful way—occupy the same country (or in some cases, the same planet)? (We have just introduced a new major—Media and Public Affairs—in an effort to prepare our students for these unprecedented challenges.)

We’ve globalized commerce, and everyone wears tee-shirts and jeans. But personalization and social fragmentation is also global, and we can’t Google the future.

Of Debt and Taxes

I haven’t written about the congressional impasse (polite word for food fight) over the debt ceiling, because really, what could I say that hasn’t been said many times by many people? But being here in Split, surrounded by evidence that human efforts at civilization have persisted over thousands of years, I’ve grudgingly recognized that our species has persisted through many periods of collective craziness, many characterized by even more self-destructive psychosis than now.

In other words, humans will survive the current capture of Congress by unreflective fanatics who believe God has instructed them not to raise the debt ceiling. (To be honest, I’m less sanguine about our ability to survive the climate-change deniers….previous generations haven’t had the means to destroy the Earth.)

But even though my brain–such as it is–tells me we’ll get through this crazy time, I have a lot of trouble understanding the emergence of the Tea Party. Not their existence; we’ve always had strains of malcontents–anti-social or anti-intellectual or white supremacist or other odd movements–but their ability to make resentment of taxes a rallying cry and a focus for so many people’s anger. And not anger at a particular tax or tax policy, but at the very idea of taxes. They have somehow convinced otherwise reasonable citizens that taxes levied for the general welfare are somehow illegitimate.

During this trip, the things we’ve most enjoyed are the products of just such taxes–great public transportation, preservation of historically significant sites, museums…Do these troglodytes think such services are supported by magic? Let alone police and fire protection, garbage collection, etc.? Are they really willing to forego the very things that make us civilized–trade with other cultures, which depends upon confidence that we will pay our bills, the myriad services that make our common lives easier and more pleasant, any sense of common purpose–for gated communities and personal gun collections?

Everywhere we’ve been, we’ve met lovely people who are not remotely anti-American but who are mystified and worried by what is happening to our political system.

Me too.

We have another day and a half in Split, then two days in Rome before we head home. I wonder what we’ll find when we get there.

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Civilized Travel

I’m so jealous.

I’m writing this in the absolutely magnificent St. Pancris station in London, using the free, fast wifi while waiting for the Eurostar to depart for Paris.

I may be jinxing us by saying this, but so far we’ve found travel far more efficient than our experiences at home led us to expect.

We’ve flown Baltic Air twice and Ryan Air once–each time leaving promptly on time, with a minimum of fuss. No removing our shoes, no “getting intimate” with security personnel. No boarding by row numbers. (In the case of Ryan Air, no assigned seats.)

We flew from Dublin to Birmingham, and took the train directly from the airport to London’s Euston Station. The train was high speed; we were served breakfast, and there was free wifi. Businesspeople plugged in their laptops and worked, and there was no clickety-clack to disturb them–it was smooth continous rail. When we arrived in London, we walked three blocks to St. Pancreas, which, in addition to being beautifully renovated, is immaculate and inviting. The rest of our trip to Berlin will also be by rail.

Trains here are modern and clean. Electronic signs on the platforms tell how many minutes until the next arrivals; similar signs are at bus stops. (We have access to the technology, but to my knowledge it isn’t being used by IndyGo. It would be helpful in Indianapolis, since unlike the five-minute headways here, our buses run every forty minutes or so, and are frequently late.)

It’s so civilized to travel on a dependable, integrated transportation system. We could have such a system, if we had the political will.

Instead, we aren’t even repairing our bridges.

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That Housing Bubble

I rarely read George Will’s columns, and I stopped completely when he wrote one that blatantly lied about the findings of a university research center in an effort to debunk global climate change. (The center involved issued a statement protesting the mis-characterization of its research, but if the Washington Post ran it, I didn’t see it.)

Evidently, Will used a recent column to resurrect a horse that should have been dead long ago. When the housing bubble first burst, conservative pundits immediately blamed the whole mess on the CRA–the Community Reinvestment Act. The big bad government had forced lenders to make bad loans out of a misplaced “compassion” for non-creditworthy slackers. I knew this was bullshit, because I’d spent several years as a real-estate lawyer, and was well-acquainted with the Act and the practices of the banks that were covered by it.

Dean Baker has responded to Will’s effort to resurrect that argument with an excellent (and–gasp!–factual) smack down. It’s worth quoting at some length:

“There is not much ambiguity in the story of the housing bubble. The private financial sector went nuts. They made a fortune issuing bad and often fraudulent loans which they could quickly resell in the secondary market. The big actors in the junk market were the private issuers like Goldman Sachs, Citigroup, and Lehman Brothers. However, George Will and Co. are determined to blame this disaster on government “compassion” for low-income families.

The facts that Will musters to make this case are so obviously off-base that this sort of column would not appear in a serious newspaper. But, Will writes for the Washington Post.

The first culprit is the Community Re-investment Act (CRA). Supposedly the government forced banks to make loans against their will to low-income families who did not qualify for their mortgages. This one is wrong at every step. First, the biggest actors in the subprime market were mortgage banks like Ameriquest and Countrywide. For the most part these companies raised their money on Wall Street, they did not take checking and savings deposits. This means that they were not covered by the CRA.

Let’s try that again so that even George Will might understand it. Most of the worst actors in the subprime market were not covered by the CRA. The CRA had as much to do with them as it does with Google or Boeing. …”

Nuff said.