THE ENTERPRISE--Changing the Game
I suspect we may be at the cusp of a major societal change. Almost a century ago, as large corporations became the major source of employment and new jobs, the government and employers discovered the issues of providing for workers and families.
The changes will come in three areas, and at accelerating rates: Pensions, Health Care and Education. Save this edition of THE ENTERPRISE and read it each year right after Thanksgiving. I think you'll be surprised at how fast this transition moves once it gets rolling. I have personally resisted the government taking too large a role in these areas, but as more and more corporations collapse under the weight of pension and health care legacy costs, there will be few viable alternatives.
Ironically, the cusp and reversal in education will be in the opposite direction, back to more privatization and a smaller role for government; a larger role for parents and "communities of interest" (which might be geographical, religious or some other aggregation based on needs, interests or social situations).
First a little history on each.
Pensions
Although employer-provided retirement plans are a relatively recent phenomenon in the private sector, dating from the late 19th century, public sector plans go back much further in history to the Roman Empire and the early-modern nation state. Military pensions, in particular, have a long history, and they have often been used as a key element to attract, retain, and motivate military personnel [They might still be a good tool for that purpose.]. In the United States, pensions for disabled and retired military personnel predate the signing of the U.S. Constitution.
Like military pensions, pensions for loyal civil servants date back centuries. Prior to the nineteenth century, however, these pensions were typically handed out on a case-by-case basis. The nature of work in that early 20th century wore out the workers such that men of 50 were "old" and life expectancy was in the mid-60's. By 1930, pension coverage in the public sector was relatively widespread in the United States, with all federal workers covered by pensions and an increasing share of state and local employees included. In contrast, pension coverage in the private sector during the first three decades of the twentieth century remained very low (10 to 12 percent of the labor force). Even today, pension coverage is much higher in the public sector than it is in the private sector. Over 90 percent of public sector workers are covered by an employer-provided pension plan, whereas only about half of the private sector work force is covered.
When Social Security was created in the 1930's, the life expectancy of a workingman was in the mid-60's. Thus the retirement age was set at 65, in hopes of helping those who lived beyond a "normal life expectancy." Today, with life expectancy in the upper 70's [admittedly, a lot of that gain is due is better infant mortality rates] the retirement age in Social Security is still in the mid-60's. That is an example of what's wrong with government-controlled programs. They are slow to respond to change. Still, as more and more companies dump under-funded plans on an under-funded Pension Benefit Guaranty Corporation, the inevitable future outcome becomes more apparent.
This is just the beginning, so rather than resist the inevitable, it's time to take the "bull by the horns" and manage the outcome. A combination of Social Security, revised to be more effective in its investment returns and slightly less generous in its pay-out (especially at the upper levels of income) will need to be integrated with PBGC's liabilities into a new American Retirement Act on which all employers and employees are taxed to fund benefits for ALL retirees who live beyond the normalized "working-life expectancy," which will soon be closer to age 70. Actuarially reduced early retirements can be provided, and those in the age 65-70 ranges can be grand-fathered at a scaled down rate. CONGRESS & PRESIDENT BUSH: The time is now.
Health Care
There are ample writings about the relative strengths and weaknesses of national health care systems such as the UK and Canada. I had first hand exposure working with the UK's system while preparing for a keynote speech to its annual convention about 8 years ago. It has problems, but largely of its own making. Canada's works better, but both have proven that a "national plan" for all, and the option of buying private health care for those who choose and can afford it is probably the best combination.
If one considers that Medicare's administration costs run 2% and private health care plans (insurance based) run 12-17% it is easy to see that there are some things the government can actually do more economically. The US health care cost by any measure is higher, by far, than many countries that generate equal or better health care results. It is time for an overhaul of the system, concurrent with an overhaul of the processes used. This is best done with (at least) governmental oversight.
Information technology is one area that is ripe for providing huge savings and improved results. Personal, portable medical records must be developed, provided and carried by all Americans seeking health care. Mandated standardized system formats for health care institutions and providers with uniform data transfer of CT and MRI (etc.) records are no harder than developing the Internet protocols was. Another is mandated consolidation/use of the widely duplicated and very expensive diagnostic equipment/centers (MRI, CT Scans, etc.)
Limiting medical malpractice liabilities to dramatically reduce spending on lawsuits and malpractice insurance is still another. Medical savings accounts alone have not worked or been widely used. But these could be integrated into the American Retirement Act (as a starting place) and rolled out broadly in a new, broader version of National Medicare. The abusers and flagrant users could be sorted out and restricted as they are in some welfare system control processes. The know-how to do this exists. All that is lacking is the incentive, and as health care costs spiral further out of control and the quality of care languishes, the motivation is here. CONGRESS & PRESIDENT BUSH: The time is now.
Education
During the 19th century, American classrooms were a sparsely decorated and furnished, the result of a largely rural, agricultural economy. Women educated their children, unless there was a small "schoolhouse" nearby where churches or communities could pay a "schoolmarm" to provide education, since many mothers were uneducated as well. Rural communities had few resources to spend on education, and there was a lack of commercially available products for schools. Often the school would be open only for a few months of the year, usually when children were not needed to work at home or on the farm. In the one-room schoolhouse sat students of all ages and abilities. The sole teacher was usually an unmarried woman; sometimes the students were older than the teacher. Using only the most basic tools - slate, chalk, and a few books - teaching and learning was mainly done in basic literacy, penmanship, arithmetic, and “good manners.” Farmers supplied the wood or other fuel for the stove to keep the schoolroom warm in the winter. Parents built school desks and took turns cleaning and stocking the stable that housed the horses the children used to get to and from school each day. Teachers often lived with local families, rotating from household to household. Honestly, they had the right idea, just on a far more primitive level.
The elementary and secondary educational system in the US is "broken." We keep dumbing down elementary and secondary educational content. More students than ever require remedial classes just to move from high school to college. Colleges, the US bastion of educational strength, are just starting to "catch the illness." Grade inflation is rampant, pressured by parents who would rather try to "rig the game" than act responsibly. It's time to shift the educational burden back onto parents, communities and social groups. School vouchers are a start. Legislated limits on the percentage of spending on administration [bench-marked to best practice school districts] is another. Legal limits on teacher's union power is yet another. Indemnification of teachers from lawsuits by parents and students is a fourth. Tightening qualifications for teachers and raising pay is another way to enhance educational standards.
Then let's create a tier of "Educational Associates" who can assist fully degreed teachers and do the more mundane, time-consuming educational work (grading papers, monitoring exams, preparing educational materials, etc.). This can provide employment for thousands of responsible but unemployed or underemployed manufacturing workers, in jobs that would preserve their self-respect and dignity, and provide them a "summer" opportunity to attend school retraining themselves [tuition-free via tax credits] in return for stepped up pay grades as appropriate education is added. We can grow our own new educational system and the people to staff it. Radical ideas? Sure. But what we are doing now is not working. Quit the "No Child Left Behind" platitudes and actually change the system and processes. CONGRESS & PRESIDENT BUSH: The time is now.
Conclusion
There you have it. A traditional, conservative former executive espousing increased roles for government in two cases and a dramatic reversal to privatization in the third. Will anyone have the nerve to do something? Think about it and pass this on if you know someone in a position to improve on it. There are plenty of brilliant people out there who can improve on these core concepts. This is just a "straw man" to get us out of the loop of "insanity" we are trapped in now. [Insanity: Doing the same thing over and over and expecting different outcomes.]
How about we quit the petty partisan politics and do something positive for America's future? CONGRESS & PRESIDENT BUSH: The time is now.
Best, John
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