Telling It Like It Is

THE ENTERPRISE--Rights vs. Responsibilities

THE ENTERPRISE

We seem to have a problem in the USA. Somewhere along the line in our 200+ years of existence as a nation, many of our citizens have formed the impression that they are entitled to the RIGHTS of free Americans without accepting any of the RESPONSIBILITIES. Certainly the Katrina disaster showed this to be the case. Our major cities all have areas populated largely by minority populations of people who live off welfare and assume--correctly in many cases--that they are entitled to be taken care of by the government. But this disconnect of rights vs. responsibilities extends far beyond the "under-class" to a broad spectrum of Americans--and it is growing.

Why is this so? These people would answer, because we have discriminated against them, or denied them of something they "needed and deserved." Perhaps we have, since we did not force them to earn their own way, to deserve the rights they claim by accepting the responsibilities of adults and citizens. But also because our country and its government has trained them to be irresponsible and dependent, and demagogues like Senator Ted Kennedy, Congressman Charlie Rangel (and a cadre of like minded legislators), Al Sharpton and the Reverend (!) Jesse Jackson continue to reinforce those expectations. Our liberal dominated media and entertainment industries fuel these expectations by sensationalizing their plight--a plight for which they are clearly responsible--but for which they will take no responsibility. Even noted blacks like Actor/Comedian Bill Cosby and Author/Educator Thomas Sowell confirm this fact at every chance they get.

QUOTES TO CONSIDER:
"What the American people have seen is this incredible disparity in which those people who had cars and money got out and those people who were impoverished died."
-- Ted Kennedy on Hurricane Katrina

"Right"
-- Mary Jo Kopechne (for those who don't recall her, this is the young woman that Kennedy left to drown in his car when he drove it off the Chappquiddick Bridge in Martha's Vineyard, while he was allegedly "under the influence"...)

Meanwhile, special interests and political correctness run rampant, destroying any reasonable or logically arrived at conclusions because "they might offend someone," or take away the so-called rights of some vocal special interest. This is a prostitution of our Founding Fathers intention when the US Constitution was written. The Bill of Rights, which is so often held up as an excuse for the most egregious behavior, was in fact, pretty well drafted. It has just been distorted almost beyond recognition.

The most noted recent example is the abuse of the "advise and consent" role of the US Senate in the selection of Judges, and other similar matters. The "filibuster" which was once truly a unique institution requiring the Senator doing the "filibustering" to actually stand in front of the Senate and "talk" continuously for hours or days. Now "filibustering" has become political extortion. The sooner that the Senate faces the so-called "nuclear option" and forces an up-down majority vote on a judicial candidate...and un-Constitutional filibusters, the better. Is this a double-edged sword? Can it backfire when the opposing party gains control of the Senate? Sure. But that is exactly what the Constitution mandates. President Bush's next pick for a Supreme Court Justice will likely be the case that brings this option to a head. So be it.

Finally, if you think this is a misguided rant, then consider the work done by a University of Dayton professor, Joseph Martino, almost 15 years ago. As far back as that, he saw the number of majority rights being usurped by vocal minorities and special interests. It has only gotten worse. The latest outrage is aimed again at Wal*Mart (who else...other than President Bush, it is the biggest target around). Wal*Mart had the audacity to actually discuss trying to hire healthier people as a means of containing health care costs. Some have proposed that this is illegal and discriminatory. What nonsense. Since when is it illegal to construct job content the way the employer chooses, and then hire people who are appropriately qualified to do those jobs.

I have reproduced Martino's proposals for the new Industrial Bill of Rights, just in case any reader has good legislative connections. This needs to be raised on the floor of Congress and read into the Congressional Record by a member of Congress, at least once, to remind them of what the Constitution does, and doesn't restrict. (This is from an article I wrote almost ten years ago--to no avail that time.)
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"...the drafters of our Constitution were rightly concerned about limiting government's ability to take away the rights of the people. Many of the parts of the Constitution, specifically the Bill of Rights and the Ninth and Tenth amendments oblige government to protect people's rights, and show where the Constitution grants government the power to do something that limits their rights. The founders of the country were clearly concerned about factions gaining control. The first ten amendments are replete with language such as "Congress shall make no law..." and "The right of the people to...shall not be abridged."

Professor Martino's work contends (and I agree) that over the years, the Bill of Rights has been violated by the passage of laws favoring special groups who somehow convinced Congress they deserved special treatment even if it essentially denied the rights of much larger groups. Many of these laws have reduced or limited the efficiency, productivity, and competitiveness of our industries and economy. To compete successfully in an intensely competitive global economy, those rights must be reclaimed, and these wrongs righted.

Here are a few of the proposed statements from the 1991 draft of the Industrial Bill of Rights.

Each statement begins with the words "GOVERNMENT SHALL MAKE NO LAW ..."

-- ...abridging the right of employers to hire those job applicants which they deem most likely to operate their enterprise in a profitable manner.

--...restricting the right of a willing buyer and a willing seller to enter into any contract the object of which is not itself illegal.

-- ...imposing liability on a seller or manufacturer for occurrences caused in whole or in part, by actions over which said seller or manufacturer had no control.

-- ...which restricts the right of a manager, business owner, or employee to transmit to the public, to owners, to other employees, or to competitors, any information which is legitimately theirs to transmit.

-- ...which restricts an individual's use or enjoyment of his property, nor make any law or regulation which diminishes the value of that property, without compensating the owner at fair market value.

--...which abridges the right of managers or owners of a business to enter or leave a specific market, or to charge whatever price they wish in a particular market.

--...which abridges the right of a manager or owners to introduce a new product or new technology to the market, except to assure that risks or hazards associated with the product or technology are made known to the buyer.

--...which abridges the right of a manager or owners to collaborate with suppliers, customers, or competitors in the development of new technologies or new products.

-- ...which abridges the right of managers or owners to establish regulations they deem necessary for the health and safety of their employees, including the right to deny particular jobs to workers for whom those jobs might pose a greater than normal risk, nor shall the government make any law abridging the right of an employee to be informed of the risks associated with particular jobs.

--...which prescribes the means by which owners or managers must achieve governmentally-established environmental emission limits. The right of an owner or manager to achieve prescribed limits by the most economical means shall not be abridged.

These are not just Professor Martino's statements, but the consensus of a large group of managers, owners, and executives. They do not make claims on others; they merely reclaim rights that have been taken away from everyone to benefit some special interest group. Maybe these are not all right, but they'd make a great starting point for legislative and Constitutional reform.
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If you have access to your Senator and Representative, I suggest you pass this on to him/her. It deserves a serious review in the House and Senate. I plan to send it to mine. Perhaps in their spare time between hearing from Special Prosecutors and grilling prospective Supreme Court Justices, they could look out for us ordinary Americans. That would be something to write about.

Best, John

THE ENTERPRISE--Miscellany

THE ENTERPRISE

It's probably a bad idea to write while suffering from jet lag, but here goes anyway--a collection of thoughts and observations, since the possibility of stringing together a coherent longer piece is slim.

---Understanding How Weak the US Dollar is--first hand
Nothing quite brings home just how weak the Dollar is vs. the Euro like going to the window of an Italian currency exchange and trading US $200 for €128.75 after fees, etc. When reading prices in Euros, you could almost forget to add the 30% premium if you are planning on spending your US dollars...

---When Money Rules the Game
Has anyone really considered how much too long the baseball season is when the World Series is not over until nearly Halloween, and it's so cold for night games that you can easily see the players breath on TV? But as long as the incremental additional games bring in a positive income contribution...it will stay that way. Anyone for Trick or Treat IF the White Sox win it all?

---Tourism is BIG Business in Europe
The hordes of tourists (yours truly included) visiting the legendary Mediterranean locales in mid-late Oct. were amazing. It was hard just walking in the streets in some places. Even with a weak US dollar, there were many Americans. Surprisingly, the Italians won the rudeness award hands down (defeating the traditional winners, the French.

---Storms are Bigger and Badder, but that isn't all
There are more and more people living in US coastal areas, particularly along the Gulf of Mexico and SE Atlantic Coast. This means that both the damage from big, bad storms will be worse, and the difficulty in evacuation will also be greater. With the hurricane predictors advising that we are in a cycle of more and stronger tropical storms, plans and emergency efforts must be more effective. And the government simply must curtail its liberal "insurance" protection that actually encourages development AND rebuilding in storm-damage-prone locations. Otherwise, the entire country could soon be subsidizing a "hold harmless" for coastal dwellers.

---A Disconnect--on Iraq--Again
Once again, I continue to hear positive first and second hand reports about Iraq (largely from military and/or parents of military serving there) that just don't match the constant gloom and doom headlines in the major media. Since I have not been there, I wonder just what the truth is. It makes a BIG difference in our national psyche.

---The NY Times says "Mea Culpa"--Again
A major war of words between this once prestigious newspaper and a misbehaving reporter--again--the third such incident in recent times. But don't underestimate the power of the media. After all, is it a coincidence that the writers of the West Wing (NBC-TV) had a major 2nd tier White House official being fired for leaking classified information? Or that a new show Commander in Chief heralds a woman President, just to soften up those who don't realize that Hillary wants the job sooo badly. With 90-95% of the major entertainment and news media admittedly liberal, neither of these "creative" twists are surprising--nor is the fact that NY Times reporters either report the news, or make up what they want to report.

---President Bush at a crossroads
The recent Supreme Court nomination of Harriet Miers, a seemingly "lightly-qualified crony" could be the "straw that broke the camel's back" for George W. Bush. IF a sitting President loses the support of his core political supporters, he loses the ability to govern. Bush has already alienated many foreign countries. His approval level in general is at an all time low. Conservatives in his own party question the choice openly. IF they "break ranks" as seems likely, Bush is "toast." He will be a 2-1/2 year, very lame duck. That would be a serious setback for the US as a country. Scandals aside, Presidents in the past who have met this fate have caused our country to suffer both domestically and internationally. We'll see.

That's enough for now. My body thinks it is 4 AM, and although I'm a night person, I'm not that much of a night person. Next week, it's back to work.

Best, John

THE ENTERPRISE--A Medical Retail Revolution

THE ENTERPRISE

I was about to spend time poring through the archives of THE ENTERPRISE from 2+ years ago, when I realized that wasn't a productive way to spend the last day before my vacation. What I was looking for was THE ENTERPRISE edition where I predicted that one of these days, hopefully sooner rather than later, we'd go to Wal*Mart for our medical care. It's coming--soon.

I've been using its Vision Center and Optometrist for years, at a sizable discount to the others I used previously. They all do the same tests, using the same equipment--a fact confirmed by the Optometrist at my last home Wal*Mart in Knoxville, TN. When his practice was displaced by a highway expansion, he decided to use Wal*Mart's infrastructure and not bother to set up a new practice, hire people, advertise, etc. He said it was the best decision he ever made.

In today's Wall Street Journal there is a large article about Clinics being set up in retail stores--notably in (guess where) Wal*Marts and major drug chains. Staffing is with Nurse Practitioners, and there is a limited range of diagnosis and prescribing that can be done, but what a fine idea. Open more hours, convenient, get the prescription filled right there, and frankly, staffed almost as well as many "doc in a box" Urgent Care centers I've been to--IF dealing with the "routine" medical complaints that plague most people.

Now, if the medical industry will use IT to move into the 21st Century, permitting medical records on flash memory devices, portable from provider to provider and readable on all of the systems (may require a bit of government arm-twisting), this can save a huge amount of the current health care cost burden. Expand that to permit limited email interaction with doctors, as a preamble to coming in for a visit, and still more money can be saved.

Make no mistake, good doctors are scarce--and invaluable. They are wonderful resources and can sense nuances that no simple system will handle. But let's help thembe mnore productive, more effective in diagnosing, and use all the Artificial Intelligence available (like is done at Intermountain West Hospitals out in Salt Lake City). Let's equip them with PDAs to avoid misread handwritten prescriptions and unfortunate drug interactions, too. That will save both lives and money--big time.

For years, caring for your car at the Midases and Jiffy Lubes of the world took care of the routine stuff, and only when there was serious diagnosis needed, did the skilled (or) dealer mechanics and their diagnostic computers get involved...at near $100/hour. Why can't the same selective process be applied to Health Care. Answer--it can. It's coming. I hope it accelerates, because otherwise, between our aging population and the exorbitant, rising cost of health care, we will create an unnecessary fiscal crisis in the US.

Sure we need to fix Medicare. But how about fixing the front-end medical diagnosis, treatment and delivery system first. There is no doubt that sophisticated retailers know a lot about efficient processes. (Anyone who doesn't read FORTUNE missed some great articles in the Oct. 3, 2005 special feature on Katrina relief. one featured Home Depot's response to Katrina. The other was 'The Only Lifeline Was the Wal*Mart'. It told how Wal*Mart's response far exceeded any "public sector" response in both efficiency and humanity. Maybe big retailing and Wal*Mart in particular isn't the 'evil empire" after all--do you suppose?

We are on the threshold of a breakthrough--if only there is concerted effort to make it happen. Spread the word. Help where you can. It will be good for all of us.

Back to you in a few weeks...

Best, John

THE ENTERPRISE--Leadership and a Problem

THE ENTERPRISE
Some of my favorite things quoted from the media I've seen over the past few weeks.

HOW ABOUT THE RIGHT KIND OF LEADERSHIP--SURPRISED?
"Farsighted, tolerant, humane and practical CEOs returned 758% over 10 years versus 128% returns for the S&P 500." (Derived by winnowing down a list of several hundred top firms, and doing detailed studies on 60 to develop a list of 35 with the best records.) This quote was highlighted in Fast Company magazine's Sept. 2005 issue. The article went on to say far more. "I think leadership is more important than strategy, and I say that as a former McKinsey guy," says James Citrin, Senior Director, Spencer Stuart. "Strategy is important, but the same strategy executed by two different leaders will have dramatically different results." This from a man who has placed high-level CEOs like Terry Semel of Yahoo! and Ed Zander of Motorola. He's right; but why is it that so many people, especially on corporate boards, don't get this? The numbers are the scoreboard, but people play the game and leaders help make the plans and play together cohesively. Do it right, and the scoreboard will reflect that. Try to "manage the scoreboard," and not much good happens--and maybe a lot of bad happens, too.

"DON'T GET STUCK ON STUPID"
To illustrate the difference between strong, competent yet considerate leadership, I am attaching an edited version of a press conference in New Orleans when hurricane Rita was threatening. Lt. General Russel Honore took control after Mayor Ray Nagin started losing control to a panicky media pool... The General may lack a def touch, but there is not doubt that as a leader, he had things under control, and that included the media! Hurray of Honore! (emphasis added is mine)
-----Honore: We are NOT going to go, by order of the mayor and the governor, and open the convention center for people to come in. There are buses there. Is that clear to you? Buses parked. There are 4,000 troops there. People come, they get on a bus, they get on a truck, they move on. Is that clear? Is that clear to the public?
-----Female reporter: Where do they move on...
-----Honore: That's not your business.
-----Male reporter: But General, that didn't work the first time...
-----Honore: Wait a minute. It didn't work the first time. This ain't the first time. Okay? ... You will come to the convention center. There are soldiers there from the 82nd Airborne, and from the Louisiana National Guard. People will be told to get on the bus, and we will take care of them. And where they go will be dependent on the capacity in this state. We've got our communications up. And we'll tell them where to go. And when they get there, they'll be able to get a chance, an opportunity to get registered, and so they can let their families know where they are. But don't start panic here. Okay? We've got a location. It is in the front of the convention center, and that's where we will use to migrate people from it, into the system.
-----Male reporter: General Honore, we were told that Berman Stadium on the west bank would be another staging area...
-----Honore: Not to my knowledge. Again, the current place, I just told you one time, is the convention center. ... Let's not get stuck on the last storm. You're asking last storm questions for people who are concerned about the future storm. Don't get stuck on stupid, reporters. We are moving forward. And don't confuse the people please. You are part of the public message. So help us get the message straight. And if you don't understand, maybe you'll confuse it to the people. That's why we like follow-up questions. But right now, it's the convention center, and move on.
-----Male reporter: General, a little bit more about why that's happening this time, though, and did not have that last time...
-----Honore: You are stuck on stupid. I'm not going to answer that question. We are going to deal with Rita. This is public information that people are depending on the government to put out. This is the way we've got to do it. So please. I apologize to you, but let's talk about the future. Rita is happening. And right now, we need to get good, clean information out to the people that they can use. And we can have a conversation on the side about the past, in a couple of months.

A SCARY TIDBIT
In South Carolina, background checks on 457 refugees flown in turned up 301 with criminal records. In West Virginia, roughly half of the 350 had criminal records, and 22 had a history of violent crime. I doubt that there was any selection process that would lead us to believe this is anything but a trend that could cause a backlash in communities taking in refugees...and a scary one. 

A VERY CONCERNING, BUT REALISTIC ASSESSMENT
Much has been said and written about the poor people of New Orleans. This terrible tragedy just exposed a problem that exists in our country in far more places than New Orleans. Before the misguided rantings of partisan politicians distort the truth and re-frame the debate into a no-win proposition, it is worth the time to read a reasoned analysis of a problem that our country is facing--or rather--not facing. I encourage you to take the time to read the WSJ article attached below. It will both inform and concern you, too...at least that's my bet.

AN AMERICAN PROBLEM
This problem is affecting the lives of ALL Americans, and will become worse if we don't face it, and attempt to deal with it. Even black leaders (like Bill Cosby) have spoken out about these problems. Why is it that a part of our leadership is deaf to it, and a part just wants to blame it on someone else. We have a bigger problem than China--and it is right here in our largest cities. Can anyone help get this on our leaders' agendas for more than throwing money at it, and hoping it will go unnoticed for a while again? This is not a Republican problem. It's not a Democratic problem. It's an American problem.

Best, John

The Hallmark of the Underclass
By CHARLES MURRAY
September 29, 2005; Page A18
©The Wall Street Journal & Dow Jones, Inc.

Watching the courage of ordinary low-income people as they deal with the aftermath of Katrina and Rita, it is hard to decide which politicians are more contemptible -- Democrats who are rediscovering poverty and blaming it on George W. Bush, or Republicans who are rediscovering poverty and claiming that the government can fix it. Both sides are unwilling to face reality: We haven't rediscovered poverty, we have rediscovered the underclass; the underclass has been growing during all the years that people were ignoring it, including the Clinton years; and the programs politicians tout as solutions are a mismatch for the people who constitute the problem.

We have rediscovered the underclass. Newspapers and television understandably prefer to feature low-income people who are trying hard -- the middle-aged man working two jobs, the mother worrying about how to get her children into school in a strange city. These people are rightly the objects of an outpouring of help from around the country, but their troubles are relatively easy to resolve. Tell the man where a job is, and he will take it. Tell the mother where a school is, and she will get her children into it. Other images show us the face of the hard problem: those of the looters and thugs, and those of inert women doing nothing to help themselves or their children. They are the underclass.

We in the better parts of town haven't had to deal with the underclass for many years, having successfully erected screens that keep them from troubling us. We no longer have to send our children to school with their children. Except in the most progressive cities, the homeless have been taken off the streets. And most importantly, we have dealt with crime. This has led to a curious paradox: falling crime and a growing underclass.

The underclass has been growing. The crime rate has been dropping for 13 years. But the proportion of young men who grow up unsocialized and who, given the opportunity, commit crimes, has not.

A rough operational measure of criminality is the percentage of the population under correctional supervision. This is less sensitive to changes in correctional fashion than imprisonment rates, since people convicted of a crime get some sort of correctional supervision regardless of the political climate. When Ronald Reagan took office, 0.9% of the population was under correctional supervision. That figure has continued to rise. When crime began to fall in 1992, it stood at 1.9%. In 2003 it was 2.4%. Crime has dropped, but criminality has continued to rise.

This doesn't matter to the middle and upper classes, because we figured out how to deal with it. Partly we created enclaves where criminals have a harder time getting at us, and instead must be content with preying on their own neighbors. But mainly we locked 'em up, a radical change from the 1960s and 1970s. Consider this statistic: The ratio of prisoners to crimes that prevailed when Ronald Reagan took office, applied to the number of crimes reported in 2003, corresponds to a prison population of 490,000. The actual prison population in 2003 was 2,086,000, a difference of 1.6 million. If you doubt that criminality has increased, imagine the crime rate tomorrow if today we released 1.6 million people from our jails and prisons.

Criminality is the most extreme manifestation of the unsocialized young male. Another is the proportion of young males who choose not to work. Among black males ages 20-24, for example, the percentage who were not working or looking for work when the first numbers were gathered in 1954 was 9%. That figure grew during the 1960s and 1970s, stabilizing at around 20% during the 1980s. The proportion rose again, reaching 30% in 1999, a year when employers were frantically seeking workers for every level of job. The dropout rate among young white males is lower, but has been increasing faster than among blacks.

These increases are not explained by changes in college enrollment or any other benign cause. Large numbers of healthy young men, at ages when labor force participation used to be close to universal, have dropped out. Remember that these numbers ignore young males already in prison. Include them in the calculation, and the evidence of the deteriorating socialization of young males, concentrated in low income groups, is overwhelming.

Why has the proportion of unsocialized young males risen so relentlessly? In large part, I would argue, because the proportion of young males who have grown up without fathers has also risen relentlessly. The indicator here is the illegitimacy ratio -- the percentage of live births that occur to single women. It was a minuscule 4% in the early 1950s, and it has risen substantially in every subsequent decade. The ratio reached the 25% milestone in 1988 and the 33% milestone in 1999. As of 2003, the figure was 35% -- of all births, including whites. The black illegitimacy ratio in 2003 was 68%. By way of comparison: The illegitimacy ratio that caused Daniel Patrick Moynihan to proclaim the breakdown of the black family in the early 1960s was 24%.

But illegitimacy is now common throughout the population, right? No, it is heavily concentrated in low-income groups. Perhaps illegitimacy isn't as bad as we used to think it was? No, during the last decade the evidence about the problems caused by illegitimacy has grown stronger. What about all the good news about falling teenage births? About plunging welfare rolls? Both trends are welcome, but neither has anything to do with the proportion of children being born and raised without fathers, and that proportion is the indicator that predicts the size of the underclass in the next generation.

The government hasn't a clue. Versions of every program being proposed in the aftermath of Katrina have been tried before and evaluated. We already know that the programs are mismatched with the characteristics of the underclass. Job training? Unemployment in the underclass is not caused by lack of jobs or of job skills, but by the inability to get up every morning and go to work. A homesteading act? The lack of home ownership is not caused by the inability to save money from meager earnings, but because the concept of thrift is alien. You name it, we've tried it. It doesn't work with the underclass.

Perhaps the programs now being proposed by the administration will help ordinary poor people whose socialization is just fine and need nothing more than a chance. It is comforting to think so, but past experience with similar programs does not give reason for optimism -- it is hard to exaggerate how ineffectually they have been administered. In any case, poor people who are not part of the underclass seldom need help to get out of poverty. Despite the exceptions that get the newspaper ink, the statistical reality is that people who get into the American job market and stay there seldom remain poor unless they do something self-destructive. And behaving self-destructively is the hallmark of the underclass.

Hurricane Katrina temporarily blew away the screens that we have erected to keep the underclass out of sight and out of mind. We are now to be treated to a flurry of government efforts from politicians who are shocked, shocked, by what they saw. What comes next is depressingly predictable. Five years from now, the official evaluations will report that there were no statistically significant differences between the subsequent lives of people who got the government help and the lives of people in a control group. Newspapers will not carry that story, because no one will be interested any longer. No one will be interested because we will have long since replaced the screens, and long since forgotten.

Mr. Murray, W.H. Brady Scholar at the American Enterprise Institute, is the author, most recently, of "Human Accomplishment" (HarperCollins, 2003).

URL for this article:
http://online.wsj.com/article/SB112795305361255317.html