Inside the Sausage Factory: Making Policy, Managing Politics and

Maneuvering Interests
Frameworks, Process, Politics, Mechanism and Implementation

Introduction

We have an idealized and naïve view of how public policy is made which is ignorant of what goes on
“inside the sausage factory” where intended policy is turned into actual legislation and then translated
into implementation. Influenced, if not entirely controlled, by interest groups, partisan politics, political
maneuvers and other backoffice activities.

Yet these things are inherent, endemic and historical. In fact the “if you can’t stand to watch the sausage
being made” aphorism was originally coined by Otto von Bismarck, well over a 100 years ago.

To understand how good intentions go thru the slaughtering, processing and packaging we start with the
commonest failure – the thought that good intentions without thinking thru the consequences count. That
failure to ask the next question (preferably at least five layers deep) often results in bad, or worse,
unintended consequences because we fail to account for the incentives created. If we’d like to live in a
better world we need a better approach.

One key to that better approach is understanding that politics is not just about the typical left and right
discussion but, in the process of dealing with real world consequences is also about mechanism. That is,
how are you going to implement policy. Which then leads us to framing a strawman policy agenda
designed to address the key issues we’ve been ignoring for three decades and suggest the things we
should do that are pragmatic, workable and centrist.

But no discussion of policy is complete without understanding how policy is influenced by private
concerns, the maneuverings of the special interests groups whose Positions, Power and Politics have
more to do with the final outcome and the resulting implementation than civics textbooks will tell you.
The other governing factors are the interests and concerns of the voters and their choice-making – in
particular why the idea of a rational voter is a myth in the textbook sense as well as the psychology of
how they actually make their decisions.

Consider this a post-graduate introduction to the real world of policy making. Even if you’re not
interested in it for its own sake the results govern your life. And if you’re at all interested in what can
reasonably be expected from the sausage factory we hope this is a start on the operating manual.
Table of Contents

1. Politics & Policy: Take the Next Step 2

2. What World Do You Want to Live In? 2

3. The Sage of Omaha: Values, Integrity and the World We Want 3

4. Unintended Consequences: Blowing Off Our Own Feet 5

5. Putting the Pieces Together: Framing, Crisis & Linkages 9

6. Finding the RadCenter: Making Politics Work? 11

7. Framing the Radical Center: a Policy Agenda for the 4th Republic 12

8. Hidden Issues and Government Reform: the Politics of Special Interests 14

9. Party on Grasshopper: Digging Deeper....into the Policy Agendi 15

10. Inside the Sausage Factory: the 4P's of Political Reality 18

11. Rational Voters, Public Choice, Economics and Futures 20

12. Voice, Leadership, Messages, Realities: Living in a Tough World 25

13. Peace in the Public Square: the 100 Days and Re-emergence of Civitas 27

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Politics & Policy: Take the Next Step
http://llinlithgow.com/PtW/2008/01/wrfest_20jan08politics_policy.html
January 25, 2008

Well here's the final post for last week's readings. The prior two covered enough ground we decided to delay
these. Below you'll find interesting readings on the current US election, including an interesting piece on "How
Voters Think" that tries, somewhat successfully, to address the surprises so far in this campaign. There are also
two pieces analyzing the underlying economics of racial behavior and the costs/benefits of the Iraq War. Both of
which we highly recommend. Another piece on the "Durably Democratic" nature of American society and another
on a recent discovery by Chinese scientists on the main biological pathways of drug addiction.
You may be wondering what they all have in common. Well, to some extent they are indeed our usual potpourri of
interesting readings across a spectrum of interests. But one thing they do have in common, particularly the
readings on racial spending patterns and the costs of Iraq, is taking a look using a disciplined approach to
understanding the deeper structures and casual patterns of things. Tom Sowell makes an interesting point when
he calls for taking the next step. (Basic Economics: A Common Sense Guide to the Economy, Applied
Economics: Thinking Beyond Stage One)

As he point out all too often you hear people and policy makers complaining about the unintended consequences
of things. The so-called "Black Swan" effect. But what actually happens is that the unfortunate outcome is usually
perfectly natural and likely, and not as afterwards thinking but beforehand. But almost always policy is made
focused on intent without asking what are the changes in incentives created. In other words what is the likely
behavior going to be as a result of the policy. And furthermore have you asked and "then what happens ?". It's
this taking the next step based on basic investigations of the deep structure that all too often result in unfortunate
outcomes. In other words on a willful denial of the nature of things combined with a deliberate blindness. Bluntly,
people and policy is made by deliberately and determinedly screwing up. So instead of relying on hope we prefer
to actually examine things in a systematic AND systemic way to try and understand what's going on. Of course a
major part of such an approach is the understanding that most decisions will be, as the Buddhists put it,
"UNSKILLFULL" :). The readings on spending patterns and Iraq are perfect exemplars of digging in and
understanding things as they are.

BtW - the prior post on the problems in the economy and the policy moves are a good example in two ways. First,
the consequences of such blindness that creates a mess. And second, what happens when you've got to clean it
up.(Pump Priming, Rates Cuts and Crameritis: More on Economic Outlook). Finally there are more posts in the
Science & Culture section - one on the searches for new forms of artificial life that could be as big a breakthru as
Pharmaceuticals, Plastics and Electronics were post-WW2. Another on Europe's strangely peaceful interlude
since then, which is fascinating inasmuch as it talks about the Continent that brought us all our World Wars and
now is the most peaceful (albeit artificially). And the final two excerpts - one on leaning to appreciate wine based
on your own preferences instead of the common shibboleths. Point made ? :) And another about a Man who
became a deserved Icon - Beethoven's last symphony and his life.

What World Do You Want to Live In?

http://llinlithgow.com/PtW/2008/01/wrfest_27jan08_what_world_do_y.html
January 28, 2008

An interesting question, is it not ? At the end of the day a lot of the sturm und drang in the elections, or elsewhere,
are really disputes about just that question. If it wasn't clear then let me admit our attempt at sketching such a
world was captured in a series of holiday posts, capstoned by Welcome to Ganesha's World: Obstacles, Foresight
and Action, which also lists the prior links and has some interesting readings in its' own right. Several times this
last week we've seen some other posts and stories that ask this essential question. But to put it more directly our
ideal world is one in which everyone has a reasonable opportunity to live a decent life, develop their own
attributes to their best potential and strife is reduced to the workable minimum. We've argued, perhaps a little too

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implicitly, that such a world is possible and achievable but requires a stable order, a system of justice that people
believe is fair, defense against both external and internal enemies and a sound, progressive economic system.
There's lots more to say and explore but let's at least take that as a strawman to work with.

In this week's readings you'll find several that point at the topic and, in fact, point at the results. Below you'll find a
nice little summary from the Economist that illustrates how more people have made more progress in the last 2+
decades at better lives than at any time in human history. Progress that is in fact the result of the gradual
emergence of the key characteristics we listed above across wider and wider stretches of the world. This contrast
to another article that finds US "Hegemony" is fading. Well Bravo - not because I'm anti-US. Far from it. In fact I'd
argue that the US had made larger efforts in its' history to help the world move in the right directions than any
other power in history (THE case in point being made by the Marshall Plan as related in the "Most Noble
Adventure"). Rather it's time for the rest of the world to move to "that natural state of opulence" that they can
achieve thru justice, good government, fair taxes and a strong defense (paraphrasing Adam Smith of all people).
Let me put it another way - even if the US slice of the pie gets relatively smaller it's possible to make the whole pie
so much bigger that we're all better off. Oddly enough for the Dismal Science this is a fundamental proposition to
which 99% of all mainstream economists would agree.

• UPDATE: in browsing the online archives of the

Charlie Rose program ran across an interesting
program that, by-n-large, captures the points about the
US role in being the primary supporter of the current
international system. While I don' t necessarily agree
with all points they largely are on target. BtW on these
lines have you ever consider that it's the US Navy
which defends the sea-lanes for free access for oil for
all countries of the world? Despite all the rhetoric and
arm-waving China, India and Japan count on the USN
to protect this vital underpinning of their economies
and societies :)!

Some of the other readings below talk about the US elections in which this is becoming, as it really always was,
the central question. Combined with the other of character and leadership. At the heart of all these issues, in
many ways, lies the question of values and choices. By both citizens and leaders. I found it extraordinarily
refreshing and encouraging that most of my fellow citizens don't view questions of "Values" as code-words for
social policies, unlike the punditocracies. They view them as critical attributes like honesty, integrity, courage and
a willingness to do what's right. Another complement can be found in what occupations we admire the most - if
you skim those two excerpts or read the backup articles hopefully you'll find it as encouraging as I do.
One of the most interesting explorations of values, believes and religion is one by ExperimentalTheology who is
currently, as both a devote Christian and a professor of evolutionary psychology (think about that for a minute :) !),
exploring the meaning of Peanuts as a source of theological insight on values, life and living. Highly
recommended.

At the end of the day the "What World" game is one we can all play. In fact we play it whether we want to or not.
So, whether you feel like chiming in in the comments, riffing over somewhere else or just kicking it around, ask
yourself the question. Then do yourself and all of us a favor and add two more. 1) How do we get there and 2)
what are the mechanisms and institutions for making it work ? Hint take the next step (WRFest 20Jan08(Politics &
Policy): Take the Next Step)

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January 30, 2008

The Sage of Omaha: Values, Integrity and the World We Want

http://llinlithgow.com/PtW/2008/01/the_sage_of_omaha_values_integ.html

The prior post, while our regular weekly collection of

interesting stories and links, had a couple of central themes.
One of which is what kind of world do you want to live in ? A
question that's with us every day in how we live our lives but
is also central to this year's elections. On both a personal,
micro level and on a community, national and macro level. In
fact it is, at least subliminally, THE central question of the
election though not yet at center stage among the punditry. It
IS however center stage with voters, especially for the
younger folks.

I recently ran across an interesting set of comments on these

topics by, of all people, Warren Buffett. The Investment guru
of the century and the folksy sage of Omaha. Now as it
happens he was supposed to be speaking about security
analysis and investments. But he began his time with a focus
on the values that make for a happy life. And ended it with
comments on the nature of the world and what kind of world
we'd like it to be.

Now I'd recommend watching all ten parts of this vidclip series but the picture at right will take you to Part 1 on
individual values, which is as good an argument for living a life of integrity, finding good work that you love and
being satisfied with a reasonable lifestyle as any I've ever heard. And a pragmatic and workable one as well. Zen-
like in fact when you parse it out.

Part 10 which talks about the nature of the world is, in my view even more interesting. It riffs on Warren's idea of
the Ovarian Lottery. That if you're in his audience you've already WON because you're an American, a college
student and have the drive, ambition and intelligence to leverage your opportunities.

He's not, emphatically NOT, picking on anybody in particular but putting some real ground truths out there (and
bear in mind this speech was circa 1998). Here's a paraphrase on his model Supposed God dropped by and
asked your help in re-designing the world? Here's the catch - once you put your specifications out there then your
name goes back in the lottery bowl and gets re-drawn. Suppose God reaches in and pulls out 100 marbles and
your name is on one. In '98 the chances were about 1 in 20 at best that you'd even be an American. Of that one
maybe 1 in 3 or 1 in 4 would be a college student. Which is no guarantee of anything. Nonetheless with a
reasonable level of effort such a person is going to live a life that's healthy, fairly well rewarded, eat good food,
drink good wine, see interesting places and have a fair shot at doing rewarding work to make their way. What
about the other 19? Their chances ain't so good.

Well that makes things pretty darn clear to me - I'd like a world where a larger portion had a better chance. Where
that portion grew fairly rapidly and their share of things got better and better. The thing is that's not just me or
idiosyncratic - it's been the goal of most people now and throughout history. But now, more than at any other time
in history more people have a shot. And more and more will have a shot if we can keep the wheels on the wagon
as it roars down the hill. Let me put it another way.

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In fact try these three:

1. Would you rather have a larger slice of a smaller pie or a smaller slice of a much bigger pie ?
2. Odd paradox - I'm better off when we're all better off. And y'all are better off, all things being
equal, when I'm better off. Making it really intellectually painful btw that's a fundamental
tenet of economics. And the basis for the socio-biology of our evolutionary history as a social
species.
3. If we don't build a world where everybody has a better shot at a bigger slice there's always a
pretty chance we can end up spending all our time squabbling over who gets which slice of a
smaller pie. And in the process dropping the whole thing on the floor and making a mess.

So, back to the beginning: what kind of world would you like to live in? Warren'
s or Attila'
s?

Unintended Consequences: Blowing Off Our Own Feet

March 31, 2008
http://llinlithgow.com/PtW/2008/03/unintended_consequences_blowin.html

Take a look at the cartoon (click to enlarge) on the Bear-Sterns

rescue and tell me/us/yourself how you react to. Right on brother?
Yeah, yeah, sure, sure ? Well there are some elements of truth in
the argument but more that are missed, wrong-headed and
fundamentally dangerous. And by dangerous we're talking about the
collapse of civilization dangerous - with not too much hyperbole. First
off the bank's not getting bailed out the Fed is guaranteeing debts
that suddenly turned into nearly worthless to keep BSC from
declaring bankruptcy. And the real central truth is that Bear was
involved in so many other links to other banks and financial
institutions that if they had much of their paper would have followed,
we'd have had a cascading run on the financial system and we'd
have re-created the factors that led to the Great Depression. We'll
diagnose that and related economic problems some other time.
Though if you want some wonky discussions you can try these (Five
"Funny" Things on the Way to the Market, Continuing the Dialog:
Facing Realities in the Credit Market).

What we'd like to focus on is the unintended consequences of well-meaning policy choices that turn out to cause
longer-term and deeper problems than they purported to solve and didn't solve the problems they were targeted
at. Instead they created new ones. In fact much of the last forty years of domestic policy has turned out to be
social engineering on a grand scale and almost all of the consequences have turned out badly. We're going to
explore that some more here with some examples and start with an illustration from wildlife management in
Yellowstone Park where the restoration of the wolf population has re-created a natural and healthy balance.
Over the weekend we got involved in three major threads of exchanges about the economy, credit collapse, the
dangers of inner city collapse, social policy and on and on.

There were three constant struggles common to all: 1) figuring out what the facts were, 2) figuring out how to
analyze the problems and 3) figuring out why most people seem to willfully ignore those in favor of simple,
ideological choices. The latter is the most important because the policy failures that are causing us so much
trouble are largely of our own choosing - that is politicians gave us simple solutions to complex problems because
that's what we wanted. Interestingly many of my discussants weren't entirely immune from the problem when it
gored their own ox. So one of our key challenges is to find a way to explain these things simply enough to be
grasped without damaging the accuracy. And the bigger challenge is to do so in a compelling and convincing
fashion that causes folks to step back. We're still looking for the magic beans that make that possible, let alone

Page 6 of 34
easy, but in the meantime let's start with at least explaining some of the cases. Just to set the stage though you
might find this essay by Paul Graham a worthy introduction to the art of reasoned discourse (How to Disagree)

Getting Started

We're going to start by introducing a series

of "small-scale", that is mostly local, policy
choices that are good examples of
Unintended Consequences (UiC) and some
key ways to think about them, which you
can see at right. When people and
politicians complain about UiC sometimes
it's reasonable because of the complexity.
More often, in fact almost all of the time, it's
because a simple solution that sounded
"right" was adopted but not thought thru. Not
because it couldn't have been. And there's
actually a simple way to think about it. Ask
the question - "what happens next?". In
other words what are the rippling results
from these choices. And usually the way to
start answering the question is by asking
how do the incentives for the players
change - who benefits, who gets hurt and
what are the costs and benefits. All driven
by the oldest of economic physics - when
the price goes up people want less and
conversely.

For example during the 80 years war with Spain during the Dutch Revolt the City of Antwerp, the commercial
capital of northern Europe, was under siege by the Spanish Army but because so much food was being smuggled
in they survived very well thank you. Then the city fathers passed a series of price controls that capped what
could be charged, the smugglers were no longer compensated for their risks, the city began starving, the Army
conquered and sacked the city and it was replaced ever since by Amsterdam. After years of holding out things
were completely reversed in months. Can't happen here you say? Think again. They failed to work their way
across the columns of the table.

Wolves in Yellowstone

Here's one example of of a fairly complex problem where suppression of the wolf population led to a rise in the elk
population in Yellowstone. When wolves were re-introduced a more natural ecological balance was re-created
that led to the restoration of the original ecology. An ecology which was and is much healthier, more stable and
robust and more appealing.

Lessons from the Wolf Bringing the top predator back to Yellowstone has triggered a cascade
of unanticipated changes in the park's ecosystem. In the dead of winter in 1995 the National Park
Service and the U.S. Fish and Wildlife Service brought 14 wolves into Yellowstone by truck and
sleigh. Gray wolves (Canis lupus) from Canada, these were the first to call Yellowstone home
since the creatures were hunted out of existence there early in the 20th century. A year later 17
more Canadian wolves were added. Biologists hoped that the reintroduction would return the mix
of animals to its more natural state. They expected, for instance, that the wolves would cull many
of the elk that lived in the park. The wolf introduction has had numerous unexpected effects as
well. The animals' impact on the flora and fauna in the park has been profound. Indeed, the
breadth of change has been so far-reaching that researchers from around the country have come
to study the alterations. The wolf-effect theory holds that wolves kept elk numbers at a level that

Page 7 of 34
 prevented them from gobbling up every tree or willow that poked its head aboveground. When the
wolves were extirpated in the park as a menace, elk numbers soared, and the hordes consumed
the vegetation, denuding the Lamar Valley and driving out many other species. Without young
trees on the range, beavers, for example, had little or no food, and indeed they had been absent
since at least the 1950s. Without beaver dams and the ponds they create, fewer succulents could
survive, and these plants are a critical food for grizzly bears when they emerge from hibernation.

Although the jury is still deliberating the effects of wolves, early evidence strongly suggests that
the canids are unwitting restoration biologists. By simply doing what they do--mainly preying on
elk--they are visiting great changes on the Yellowstone ecosystem. Many of the changes are
positive for those things humans value, and for experts to accomplish some of these same goals
would be hugely expensive. Wolves have brought other lessons with them. They dramatically
illustrate the balance that top-of-the-food-chain predators maintain, underscoring what is missing
in much of the country where predators have been eliminated. They are a parable for the
unintended and unknown effects of how one action surges through an ecosystem.

Misguided Social Policies

Now let's consider several

representative social policies that
have badly damaged the economies
of many major cities in this country
and around the world, always and
without fail. The chart considers Rent
Control, Corporate Taxes, Minimum
Wages, Land Use Controls and Drug
Laws.

And for each we trace thru several

stages of the what next question by
examining how the incentives worked
themselves out. If you'll look at each
you can see, we believe, how none is
a surprise. For example imposing
rent controls increases demand but
decreases upkeep because renters
get below market prices while
landlords can't get a return. As that
keeps working less housing is built
and the situation worsens and
worsens until the inner city often
looses affordable housing all
together. Yet where luxury housing is
often exempted the market leads to
new construction. If you wondered
why housing in NYC is expensive, scarce and limited to the high-end there you go. For some of the data and
analysis behind this see either/both Basic Economics: A Common Sense Guide to the Economy and/or Applied
Economics: Thinking Beyond Stage One by Thomas Sowell.

Page 8 of 34
All Together Now

Worse yet these things work together

synergistically. Rent control to create
affordable housing does the opposite,
corporate taxes lead companies to quit
investing and them move thereby
eliminating many middle class jobs,
minimum wages increase the demand
for higher-skilled labor, make capital
using technology more profitable and
make it more difficult for under-educated
minorities to get on the job ladder and
develop skills and experience. And so
and so on.

When you put them all together you

have the working folks driving hundreds
of miles for minimum wage jobs as
energy and food prices increase and
those left in the city become an
underclass prone to violence, gang
warfare and never-existing
opportunities. All because well-
intentioned folks tried to do the "right" thing that really suited their own prejudices without examining the
consequences.

Take a look at the "synergies" summary and see if our take on how all the pieces work together to get a vicious
downspiral of socio-economic decay. All because of good intentions, bad judgment and intellectual laziness.

The Parable of the Homeless Dog

A story that illustrates that attitude in part for me is a common experience we all have. Meeting a stray dog who
wags his tail and after we pat him to make ourselves feel good starts to follow us home. Well we aren't prepared
to acquire another responsibility so we chase him away. The morally correct choice in my book would be to walk
on by in the first place rather than raise the dog's hopes and then dash them. Now don't take this as
condescending or patronizing - it's not. Or not intended that way in any case (hmm...more UiC?). What it does is
illustrate how doing the emotionally satisfying thing in the moment and walking away is irresponsible and immoral.
If you really want to fix the dog's problems you need to find him a way to get fed and housed, preferably on a
more permanent basis.

For some good examples that use real world problems to depict consequences you might see some of the more
interesting episodes of NUMB3RS. Gang war in LA was and is a recurrent theme and we all "know" it and the
associated crime levels are endemic. But it wasn't until hearing some of the stats that the extent of the problem
came clear(er) to us.

• "The OG": When Don and his team are called to the murder scene of a Los Angeles gang
member, they learn the victim is a fellow agent who had been working undercover.
• "Sacrifice": A researcher is murdered in his home, and Charlie must reconstruct data erased from
his computer while Don investigates possible suspects.

Page 9 of 34
The last one is a head fake, as Randy Pausch calls it, because it's based around the ability (hypothesized of
course) to develop Sabermetrics for socio-economic analysis. We'd change the direction of the story to decide
how and where to invest in bad areas not disinvest. And speaking of Pausch - a final note. Have you considered
that besides all the other things we said in the prior post (Sunday Morning Reflections: Ramblin Randy's Rules of
Life, Living and Love) that over and above everything else he was facing reality as it is. Not as he wants it to be.

Putting the Pieces Together: Framing, Crisis & Linkages

April 19, 2008
http://llinlithgow.com/PtW/2008/04/putting_the_pieces_together_fr.html

A friend suggested that this blog had so much loaded up

that he couldn't see how the pieces all tied together so it
seems like a good idea to show the framework that
underlies all the postings. But just showing the
framework leaves us with an abstraction - a powerful,
useful tool for understanding how all the myriad bits and
pieces fit together into a more comprehensive whole.
That's nice but so what?

Well we're facing an accelerating series of crisis, e.g.

the Black Swan of the exponentiating world food crisis,
which we need to address both nationally and
internationally. What each of these problems have in
common is this: they all inter-relate and are themselves
built of component parts. If we want to address them we
need, as my intellectual hero Robert Heinlein puts it,
"know how the buzz saw works".

Good intentions are no substitute for being able to run the sawmill if you need lumber to build houses, provide
jobs and all the other things that are bedeviling us. And TANSTAFFL - there ain't no such thing as a free lunch.

Telling people what they want to hear instead of telling them how things work and pretending the easy answers
are feasible is disingenuous at best and dangerous. But not at worst. Worst is when all these problems
metastasize into crisis and catastrophes.

Fortunately we can solve most of them with a The Dimensions of Development:

combination of realism, hard-work, skills &
knowledge and discipline. In fact there's no crisis
I'm aware of that's not capable of being addressed, Rankings of Importance & Criticality

if not readily solved. But let me appeal to Hans
Rosling in the 2nd
Key Area

Means

Goal


(http://www.ted.com/talks/view/id/140 ) of two great Human Rights + +++
TED talks he gave on how things all work together. Environment + ++
In the accompanying video he uses his great Governance ++ +
toolkit to show us where we've been and are Economic Growth +++ 0
going, introduces some realism on how things
Education ++ +
really work and points the way to the critical factors
we need to address. It'll take you 19 min. but it's Health + ++
such a well-spent 19min that you may want to
Culture + +++
watch it more than once. + Important but not Critical

The table summarizes Han's final points about ++ Important and Critical
which are the critical factors and how they serve
as either means or ends - as you'll see an
+++ Very Important and Very Critical

Page 10 of 34
important and vital distinction. After the break we lay out some more of our framework - one we hope you find
answers the challenge.

Now we'd like to do a couple of things. First, briefly illustrate how supposed Unintended Consequences (UiC)
arise from a failure to understand and deal with the complexities of major policy issues and then introduce a
simple version of a general framework for looking at these sorts of things. It's quite a bit more abstract than Hans'
talk but lays out a way of thinking that can be applied to each.

Unintended Consequences: Major

Policy Problems

Here we look at several major policy

challenges including Energy, Environment,
Education, Healthcare, Welfare and
Retirement. Each of them are their own
complexities of course and they all have
inter-relationships. What we've briefly done
is sketch out how we arrived at our current
situation though in each case by failing to
ask the most fundamental policy question -
what happens next? That is if we adopt your
goal and pass the "right" legislation how's it
going to work? What's the buzz saw? In
each case what we find is that well-
intentioned, badly thought-thru and terribly
executed policies have resulted in perverse
outcomes that nobody should really want.

Generalists and Specialists

The same friend pointed me at an interesting

chart that illustrates how we need to think
about these things generally. Each of these
topics requires experts but in fact those
experts need to be a team. And as, or
perhaps more, importantly we need to have
generalists who can link the pieces of a
problem area together into a cohesive whole.
And link these areas in turn to others. It's a
conceptual chart but it pretty well captures
the notion of combining depth with breadth
with linkages.

Take a look at the chart for a minute and see

if it works for you. Every problem we'd like to
address needs to have a specific
chart/analysis/model built for it whether it's
Energy, Education, reducing inner-city
poverty or whatever. This is the kind of thing
that Hans is talking about. For example in our
assessments of why a reasonable outcome in
Iraq is important we built a specific chart that
looks at the linkages within Iraq to Iran, the

Page 11 of 34
broader ME situation and the worldwide geo-political situation. And then re-used it to frame a discussion of the
strategic situation in the ME.(WRFest 16Mar08(Middle East):Diversity, Complexity & Confusions).

Socionomic Dynamics: a Strawman Framework

In this particular "simplified" framework you

see what we think are the key factors in
any socio-political situation, and the
linkages between them.

Rather like Hans we think that the state of

the Economy is the most important and
critical factor to start with. It is the sine qua
non - that without which there is no other.
According to Hans economic growth
explains 80% of the well-being of a country
for example. At the same time market-
based economies don't function without a
proper institutional framework which
includes the rule of law, safety and security
of property and a stable government able
to protect its' citizens.

But both the political and economic

systems function in the context of a society
- in other words who gets what by right of
social position. It's literally taken us
millennia to learn that a static, rigid and hierarchical society which prevents people from achieving their dreams
provides mediocre economic progress.

At the same time it takes a certain amount of wealth to support a more inclusive and open-ended society. Hence
the dynamic linkages - the more an economy grows the more it depends on good government. The difference
between Africa and Western Europe, because both have the "propensity to truck, barter and trade" lies in the
ability of sound governments to provide the long-term stability and security necessary for major investments. And
at the end of the day the other major governing factor are Values, in addition to Institutions. People have to see
that they have a chance and believe in the justice and legitimacy of the system as whole or they not only don't
support, they can't afford to. People have to work with each other in a system they trust and in turn the system
has to support the people, not subsets of special interests, as a whole. That's a key trick in growing the pie for us
all instead of letting some get bigger slices of an ever-decreasing pie.

If not then they fall back to reliance on more primitive social structures. This turns out to be exactly the problem
with tribes that we face in Iraq and throughout the ME. Finally of course just working hard just gets you in the
game - it is the progress of Technology, broadly defined to include not just science and engineering but
organization and general knowledge, that makes us more efficient and effective.

There you have it in brief - this is our framework and why we think it's important. You won't find a post on here
that doesn't slot into one or another of these categories and usually slots into several along with the linkages that
tie them into a larger whole. More importantly we don't think you'll find a serious issue that you can about or that
impacts you that doesn't need to be thought of in this sort of systematic and systemic way.

Page 12 of 34
Finding the RadCenter: Making Politics Work?
April 22, 2008
http://llinlithgow.com/PtW/2008/04/finding_the_radcenter_making_p.html

We're going to start with a confession of being tremendously jealous of the Brits and what their political system
has managed for them. If you've ever seen The Hitchhiker's Guide to the Galaxy you've got a perfect picture in
the Borgons of what their system was like after decades of socialism and wrong-headed policies - a level of
dysfunction we thankfully never reached. So when Thatcher came on board and proceeded to Roto-rooter the
arteries and blow out the accumulated sclerosis we applauded. And hoped that Reagan would do the same for
us. Which he did, but not to the same radical extent. The question then was what was the next step? Once you
got the blood flowing again it was time to pendulum back off the extremes, which Major proceeded to do. And
when Bill Clinton came in '92 he and the DLC proceeded to promise to maintain a healthy, growing adaptive
economy, continue to free us up from regulation and find new, innovative ways to achieve major social policy
reform.

After being in power too long the Tories lost to Labor in

Britain and Blair started his reign as the longest serving
Prime Minister since Pitt. Yet, oddly, he continued Major's
major policy thrusts at the expense of alienating the die-
hard ideologues in his own party. Clinton turned Healthcare
over to Hillary who proceeded back to 1963 with a huge,
unwieldy, unworkable, high-tax and politically un-saleable
proposal for a giant "moonshot" of a program. At which
point we got the "Contract with America" which turned out
to be as ideological and unworkable in the other direction.
So the Brits got 25+ years of continuous, thoughtful and
workable adaptation and we got increasingly partisan, bitter
and special interest based politics. Which we apparently
wanted because we kept voting for these idiots.

Before you start thinking we're entirely nuts about all this
we've got a few things for you to check out. First off the
graphic at right will take you to a worldwide survey and you
can find out where you stand. Now it's a European survey and while you're there take the time to look at the
examination of European politics if you don't think the US is both different and more conservative on the whole.

Since '95 as the partisanship has grown Americans have gotten increasingly dissatisfied with Washington, the in-
fighting and the breakdown. Which, IOHO, is central to this election. Before we go on though we think you ought
to know there's a 3rd Way forward, it works and it's got some darn good leadership with names like Bloomberg,
Schwarzeneggar, et.al. Take a pause (it's a full hour but it's chock full of really good insights) take a look at this:
A conversation with Mayor Michael Bloomberg, Mayor of New York City and Governor Arnold Schwarzenegger,
Governor of California.

[PAUSE]

Now we've been here before and with worse challenges. When Industrialization took off in the late 1800's we had
no mechanisms for dealing with the growth of the economy, industry, urbanization, public health, education or any
of the other things that we're threatening to break down our society. That was the Progressive Era and we had
two great almost back-to-back presidents in Roosevelt and Wilson who helped lead us thru the morass. But they
didn't get it started or done by themselves. It was started, tested and developed on the state and local levels by
concerned citizens who knew we had to find ways to change. And didn't have a clue to start with but invented
them and then put them in place. In fact this country is run today on the socio-political innovations of that era.
Which have obviously been successful but need to be significantly, if not radically adapted, in combination with

Page 13 of 34
the adoption of new innovations, to deal with the challenges we face. Which are not at crisis proportions yet but
could be if we don't Gung Ho - "all pull together now" - these things.

By and large we've actually reached a point of

national consensus on what we'd like to
accomplish though with significant differences
remaining. The real problem is the means not
the goals. We've been our own victims for years
and decades now by creating UiC galore thru
choosing to believe the easy answers and opt
for the quik fix. The second graphic captures
that, at least conceptually. If you'd like to see
some changes then vote for the candidate who
a) tells you the truth, b) recognizes how hard
and complex this is and c) is willing to work in
the center and not on the extremes. Otherwise,
par for the course, we'll get what we deserve.
Again.

And if you don't believe us check out the

readings below which range from the previously
unknown and hidden story of how Newt the
Grinch and Slick Willie almost worked it out but
got sideswiped by Monica and the partisan
warfare that resulted. There are so many ironies
here since it was Newt who created this attack-
dog political process in the first place and which has hamstrung us ever since. IOHO the reason Barry's had so
much appeal this time is that's been speaking toward this Radical Center. Let's hope we can all find it.

And oh yeah, in case you were wondering the first graphic are my results :) !

UPDATE: This is a great interview with Howard Fineman, a noted political commentator, on Charlie Rose. It starts
with a discussion of the Penn. primary contest but the real interesting part is his new book on the 13 American
Debates discussing the key questions we've argued over since the founding of the country. Obviously I think well
of this and it's alignment with my basic argument. See what you think!

Framing the Radical Center: a Policy Agenda for the 4th Republic
April 23, 2008
http://llinlithgow.com/PtW/2008/04/framing_the_radical_center_a_p.html

After the break are several of this week's interesting excerpts on key policy issues, which we'll leave you to skim
as you would. [UPDATE: two new readings on Education have been added recently].
We're going to use them as an excuse and fulcrum to sketch a framework for thinking about an integrated set of
policies. They point toward a set of pragmatic and workable paths for where we need to go to tackle all our "Black
Swan" challenges. Let's start with a diagram we've used before to illustrate the dynamics and dysfunctions we
face and explain where it comes from, in part. Just to frame it we return to one of our favorite Adam Smith quotes
(the real one not the popular financial columnist):

"Little else is required to carry a state to the highest degree of opulence from the lowest
barbarism but peace, easy taxes, and a tolerable administration of justice."

Page 14 of 34
We've used the diagram before to analyze
why the parties and politicians retreat to
the extremes, where the electorate tends
to converge on the middle and how the
major policy clusters map to the political
spectrum. In case you were wondering the
party mappings come from the last 20
years of partisanship and the voter
mappings from the last several years of
polls. But the policy mappings are the most
interesting and come from our
accumulated analysis of what's the best
portfolio of policies that satisfy Smith's
Criteria of Prosperity. Notice he essentially
uses the same three categories we use of
Defense, Economics and Social
administration, as understood in his day.

Our proposals build on the string of

analysis you've seen being built up from
the framework, the issues of making
politics more about serving the national
instead of special interests and the
examples of what happens when the politicians and the voters (that means US) choose short-sighted, sounds-
good over sound, sensible and workable. The posts are listed below if you want to track them down.

We start with the great paradox of a Prosperous

society - this isn't tribal warfare where you win
and I loose. It's a non-zero sum game where if
we cooperate the pie gets bigger even though
my share may be relatively smaller - a
proposition that seems to have escaped most
statesmen and societies for millennia and still
today. Oddly enough what's really a
fundamental and provable tenet of Political
Economy sounds rather like a fundamental
principle of Moral Philosophy (Smith's 1rst book
was "Theory of Moral Sentiments" btw and he
was famous for it in his day). Or Religion even, if
we may be so bold.

From that over-arching 1rst Principle we go to

each of the areas - not just by derivation but
also because the sub-principles stand along on
their own merits as well. First, we need to be
constructively engaged with the world both
because of the gains and, as we should have all
learned and known, the need to avoid the
losses. That just keeps us safe - to make us
satisfied we need food, clothing, shelter etc. In
other words we need a healthy economy.

Finally economics alone is not enough - both as an end goal and as a means. For everybody to get into the game
the playing field has to be level and accessible. And finally society needs to have citizens who believe in it
because it works and they know these principles. Which we call and define as Civitas.

Page 15 of 34
At the end of the day we don't owe you a win in this game but we owe you a fair chance to play and visa versa.
There'll always be differences in ability, character and history. The trick is to not let the fortunate abuse privilege
to reduce access for the rest. As Buster says in Gettysburg, "I want to be judged for myself, as a man, on my own
merits. Not on who my father was or his position. And damm all gentlemen to hell".

You can break all those principles down a bit more in each of the areas and also make the big picture stuff more
operational IOHO. Our breakdown of the Critical Philosophies is not so much new as a return to the principles that
have underpinned our entire history. The big change maker is to re-discover that the implication is that on a level
field with equal access you are then self-responsible, not owed or excused from playing.

To make that work we need to re-visit our

governance machinery - not at the
Constitutional level where it's one of the most
brilliant and creative creations in the history of
mankind. Rather we need to leverage the
framework's adaptability to adapt yet again and
change the machinery that's grown up in the
last 40-50 years. Machinery that, all too often,
sounded good but was distorted to support
political agendii of one group, party or another.

Finally in each of the Big Three policy areas

you need to break down the principles to
Policy, Strategy and Plans for the major issues
contained in the larger buckets. While each list
is not entirely exhaustive we will very strongly
suggest it is comprehensive. That is the key
issues listed taken all together span strategies
and solutions for all the swirling myriads of
details. In other words, among other things,
you can think of this as a filter and analysis
toolkit for sorting things into graspable and
workable categories. Solve the key issues and
the rest can be cloned. Or so we opine, though
not without a little work, investigation and thinking.

But test it for yourself on the excerpts below - or in fact any prior post. We think you'll find that things do slot in
fairly well.

Hidden Issues and Government Reform: the Politics of Special

Interests
June 02, 2008
http://llinlithgow.com/PtW/2008/06/hidden_issues_and_government_r.html

Well thru the last post we built up an interesting series of posts on the role of good government in the overall well-
being and longevity of society. Which leads, eventually, to a set of imperatives for US Foreign Policy. But the
lessons and implications come much closer to home. They are in fact the central but very hidden issue in these
elections. And something we've posted on in terms of describing the symptoms, growing public dissatisfaction and
consequences in several prior posts. We'll list those after the break for a refresher. But week before last David
Brooks of the NYT had a magnificent column on what we think is the central issue. Here's a brief excerpt with the
whole below the break:

Page 16 of 34
 Talking Versus Doing Barack Obama’s vote for a recent farm bill may help him win Iowa, but it
will lead to higher global food prices and more hunger in Africa. In 1965, Mancur Olson wrote a
classic book called “The Logic of Collective Action,” which pointed out that large, amorphous
groups are often less powerful politically than small, organized ones. He followed it up with “The
Rise and Decline of Nations.” In that book, Olson observed that as the number of small,
organized factions in a society grows, the political culture becomes more divisive, the economy
becomes more rigid and the nation loses vitality. If you look around America today, you see the
Olson logic playing out. Interest groups turn every judicial fight into an ideological war. They lobby
for more spending on the elderly, even though the country is trillions of dollars short of being able
to live up to its promises. They’ve turned environmental concern into subsidies for corn growers
and energy concerns into subsidies for oil companies.

If you'd like to see real change our central challenge is to find new mechanisms of government that recognize the
interests of narrow groups but don't allow them to dominate policy making at the expense of society as a whole.
There is no single policy domain we've discussed that doesn't need a new institutional framework. In other words
the mechanisms of government are as important as the policy goals. If for no other reasons than we now have
decades of experience with watching good intentions being subverted by terrible implementation and the triumph
of special interests.

Consider the inter-linked social policies in the

graphic. If we continue business as usual we'll
get results as usual. What's the old saying ….
something about the triumph of optimism over
experience? Yet when and where have you
heard this as a major subject of discussion in
the election campaign so far? That's why we
were and are so tickled to have a major,
respected and insightful columnist like Brooks
put it on the table. We've talked before about
the economic crisis facing us as well as the
performance problems in education and other
social policy areas that we face. If we'd like to
see them addressed we need new
mechanisms.

After the break you'll find a longer excerpt from

Brooks as well as a lengthier excerpt from a
young think-tanker who wrote an interesting article that triggered Brooks' interest. That's followed by a set of other
excerpts that talk about many of the symptoms in various areas. But, we repeat, if you'd like to see constructive
change give some thought to the HOW...as well as the WHAT.

Page 17 of 34
Party on Grasshopper: Digging Deeper....into the Policy Agendi

http://llinlithgow.com/PtW/2008/06/party_on_grasshopper_digging_d.html

June 20, 2008

Like we argued in the last post we're

anticipating a shift to more emphasis
on policy and a tad less on
pizazzaroni, depending on what we
the voters ask for. At least so we
hope and anticipate given the
seriousness of the multiple
challenges that have come home to
roost. In sharing that post with
several friends there was general
agreement and a couple of constant
themes in feedback. One was Barry
supporters wouldn't cut the slack for
John-boy they gave their own guy
and visa versa - sobeit. May the best
man win.

Another and stronger one was for

more depth on policy - a challenge
we've actually been building up to
with prior deep dives on particular
issues, particularly economics. That
said our primary goal here is to take
another turn of the crank and break
down the Principles/Strategies/Categories to the next level of detail. A third was the objection, a reasonable and
accurate one, that no voter is going to dissect things this way.

Quite true and rational - people spend more time on picking a car than a President because it matters more, more
immediately and they control the whole decision rather than being a minuscule part. Yet wrong in another way.
People, at least IOHO, judge the status of these issues by the surface symptoms they see and experience
combined with the inputs from friends, neighbors and commentators they trust. And at the end of the day they'll
look to the candidate they think will do best on these issues as they can best judge it - even if not using analysis
worthy of the Kennedy Skul. Yet strangely enough not only do we have to live with this collective wisdom but, over
the course, of time the people do tend to converge on a collective judgment that's relatively sophisticated,
accurate and deep. Strange isn't it how socio-biology works itself out?

Anyway just as a reminder the opening graphic was our

attempt to capture the key policy issues taken all
together. While we laid out what we thought was a
balanced strawman proposal in priority order, given how
things work in reality and the challenges we face, the
template is as important as the specifics. The intent was
for you to use the blueprint to build your own house if
you chose, with our suggestions as a starter kit. Though
we're prepared to defend the specifics of course as
being the only sensible strategy available to us :). That

Page 18 of 34
said let's capture the fundamental challenge facing us less abstractly. 'nuff said?

We thought so though the excerpts after the break start with some prior posts on why shooting ourselves in both
feet around the kneecap continues to be an inherent structural problem. Back to that reality problem-facing thing
again Pogo. BtW - just for the record - when you vote for a solution, or the candidate who proposes it, that's
based on short-term fixes that serve your own special interests and presume that water runs uphill when
legislated you get your own slot at the trough. Oink, oink, oink...

Like we said the central concern will be the Economy followed by Defense and Foreign Policy and then Domestic
policy. That's based on our best judgment not of voters wants but their needs. However the way the
dependencies work the sine qua non of a stable and safe nation is a secure defense coupled with a competent
foreign policy. That then sets the stage for the next fundamental, which is a healthy and growing economy - which
is the penultimate requirement for any social policy debate to be material. If you can't afford it you can't afford it. A
combat medic calls it Triage. Then we can talk about Domestic policy and perform the same sort of trade-off
Darwinian filtrations. Fortunately or not there are linkages and inter-dependencies.

Foreign Policy

Despite what you may hear the US hasn't just

been influential it has been the architect and
prime move of the post-WW2 world. The basic
system design with the UN, World Bank, IMF,
GATT/WTO, even the progenitors of the EU
were all creations of US policy. Not to mention
the Marshall Plan or the recovery and
development of Germany, Japan, South Korea
and Taiwan. And let's be real - it wasn't entirely
disinterested nor should it have been.

When a national decision maker is going to

spend the national treasure and citizen's lives
he has a fundamental obligation to allocate
those resources in the best interests of his
country. It just so happens that our best
interests are served by supporting a stable,
peaceful, law-aligning and progressive
international regime. Nonetheless the world is
changing and we need to change with it and
help instigate the necessary adaptive evolution
of a modified world system. We've talked
before about why that's important in a series on the State-of-the-World and the nature of good governance
(Peace, Stability and Prosperity: the Nature of Good Government) so we'll leave it there for your reference.

Page 19 of 34
Economic Policy

Something we probably need to re-visit but

have spent considerable time and
investigation on in several prior posts - a few
of which are referenced below. The
fundamental requirement is Innovation -
which is the major driver of new jobs,
economic growth and national wealth.

In the short-term we're facing a major

economic downturn triggered by breakdowns
and malfeasant behavior in the real estate
and financial markets as well as just plain old-
fashioned greed, stupidities and illegal
behavior. There are no clean hands. So in the
next two years we've got to fix the breakage,
keep the economy from tanking as much as
possible and start laying the groundwork for
the future. Among other things the boulder
that kills many birds would be a twofer -
serious national investment and spending on
revamping our infrastructure and on a concerted national energy program. Both of which by their very nature
would help stimulate the economy and without which the tanking could get really rough.

But both of which create longer-term jobs AND, the most important, change the structural nature of the economy.
Infrastructure by making the operation of the national economy more efficient and creating new capabilities. The
energy program by improving national security, lowering the cost of energy and oil and creating new technologies,
which creates new industries, jobs and competitive goods for world trade. Voila'....a win...win...win..win strategy.
Which also depends by the way on both Education and Healthcare cost reductions, performance improvements
and increased Benefits:Costs performance in the long-run.

Domestic Policy

The "Pigs-at-Trough" problem means that for the

rest of these strategies to be successful we can't
just keep substituting good intentions for
understanding how to run the buzz saw and the
lumber plant. Hence the need for "institutional re-
engineering", i.e. we're actually pretty close on
policy agendii but making them workout is a
whole other problem. Now we're faced with a
situation where Healthcare, Social Security and
Medicare costs will destroy the long-term
economic capacity of the US. Nonetheless the
later two are relatively easy fixes with a
combination of bi-partisanship (ha, no I'm not
kidding) and realism on the part of the voting
public. When SocSecur was established
retirement was 65 and life expectancy was 65+.
You do the math. Ditto for the Medixxx programs.

Page 20 of 34
Healthcare needs some major structural changes but we're starting to get a handle on that. In terms of timing,
feasibility and so on it probably goes #1 in the queue because we can start making progress. But the #1 domestic
policy agenda item is Education because without progress in teaching and training people for this brave new
world it all falls apart.

Part of the excerpts below are some pointers to various online programs, mostly from Charlie Rose, which start
with an '04 appearance by Tim Russert which was supposed to focus on his book but ended up mostly discussing
politics and policy. Notice that by and large if you didn't know the date nothing's changed. Now you can't discuss
Russert without leading yourself to Danial Patrick Moynihan - one of the great public servants of recent American
history and a brilliant and pragmatically insightful man. So there are two more shows of which he was a part that
go back into the '90s. Guess what - the problems they're discussing are largely the ones we've just discussed.
UP to us this time....Oink, Oink, Oink.

Inside the Sausage Factory: the 4P's of Political Reality

June 25, 2008
http://llinlithgow.com/PtW/2008/06/inside_the_sausage_factory_the.html

Our last post (Party on Grasshopper: Digging Deeper....into

the Policy Agendi) laid out a perspective on a
comprehensive strategic policy agendii that covered Foreign,
Economic and Domestic/Social Policy and related them to
some over-riding principles. The goal was only partly to
suggest specifics - it was also to provide a blueprint and
checklist for your own thinking and to show how all the
moving pieces fit together. We took our own best shot at the
"right answers" of course but are more than willing for you to
take yours.

That said there's many a slip 'twixt cup and lip - or as a

famous German statesman once pointed out if you can't
stand the sight of blood but want to enjoy the results don't go
inside the sausage factory. In other words no matter what
our best intentions on Policy nothing will change unless we understand how things get translated.

The key factors that control the results are Policy, Players, Position and Power. After the break we're going to
take a deeper dive, again, and get a little abstract on you, again, but sometimes a picture or headline is worth a
thousand graphics and arm-waving so let's shoot for a little motivation. Since the last major post several friends
and I have had a running exchange on "CHANGE" and one of them put it very nicely - "Perhaps only an
independently wealthy President can achieve his policy goals", talking about why a decent national energy policy
has been available and frozen in limbo since '01. Of the major policy issues we outline there are none them not
resolvable, IOHO, and most with straight-forward and available knowledge, resources and capabilities. So why
ain't nuttin gettin done, Yogi?

Consider the following headlines:

Call for Change Ignored, Levees Remain Patchy Few of a presidential panel’s recommendations after the
Midwest’s devastating flood in 1993 were implemented.
Did Bank of America Write the Housing Bailout Bill? ." I don't understand why a realistic bill can't be
hammered together. It should reflect the following realities:... It is not the taxpayers responsibility to
bailout borrowers who are in over their heads, or lenders that made bad loans. How hard can that be?
Economic Scene: High Medicare Costs, Courtesy of Congress Based on a pilot program, the price of
walkers, delivery and setup included, will fall to about $80. Now, would you like to guess how the
equipment makers feel about this?

Page 21 of 34
Reading those headlines/excerpts perhaps it's clear why the opening cartoon makes so much sense or why we
started with "Institutional Re-engineering" as the sine qua non, the fundamental starting point without which we'll
continue to remove both our feet at the shoulder or higher, as the critical initial point of our Domestic Agendii
blueprint. After the break we'll dissect the whole problem in some more detail but consider the accompanying
chart, which summarizes, some major policy problems that we've cheerfully been ignoring until the current stage
of near-terminal feasturation has set in. BtW - this and other charts are part of a dloadable Powerpoint slideshow
you can open and save. Please feel free to do so and share it around as widely as you like - better yet, mail it to
your political representatives. Politics of Change: Strategic Agenda vs Interests

Assessing Where We're At

Let's start by taking a look at where we're

at, have been and might/should be with
regard to the major policy dimensions.
Again, of course, IOHO. Feel free to
disagree, dispute and fill it in any 'ol way
you want. But fill it in - or come up with a
reasonable alternative. If we address
these issues and move forward on them
we'll be in good shape. If we don't...well.
The upper right compares each of the
three areas with each other while the
other elements break each down into the
major components we're arguing need to
be addressed. Think of this as the
dashboard for our policy control center.

From Policy to Action

The next chart takes those high-

level rankings and breaks them out
so you can see where we're at and
the next level we ought to shoot for.
But it also introduces the first stage
of reality - you can't just wave a
magic wand and, like King Canute,
substitute wishes for fishes or wave
the tide back. Instead for each area
you have to decide what specific
actions, resources, etc. etc. are
required and available. And most
likely make some hard choices in
trading off all that we'd like with
what we can accomplish given the
level of capacities available. But
that's a key beauty of this approach
- we find out what's required, who's
ox is gored and that those tradeoffs
are. Rather than let decisions be
made blindly in backroom vacuum.

Page 22 of 34
From Policy to Pragmatics: the
4P's

That's only the first level of practicalities.

The real ground truth comes from
understanding who the key Players are,
what their Positions are - that is where
their interests, public statements and
private concerns lie, and what Power
(clout, influence, baksheesh,...) are. And
what kind of resources they have
available to influence policy and
implementation. For each one of Barry
and John-boys simple-minded public
statements the reality of what'll happen
depends on a 4P analysis of each major
issue. Conversely if you think something
is the right thing to do you can judge the
gap between likelihoods and your own
preferences by understanding these gaps
and requirements.

Nothing Is So Difficult

Change is not easy and history is more the

story of people, organizations and cultures that
refused to change in the face of necessities to
do so. As Jared Diamond pointed out the
Vikings on Greenland died out because the
lifestyles and technologies they brought from
home were wildly inappropriate to the ecology
and resources available. Yet in a similar
environment the Eskimos did and continue to
prosper. One can make the argument that the
fall of the last Chinese Imperial Dynasty was
thru their refusal to adapt and adopt -
something modern China is well on the way to
rectifying.

The other thing the 4P analysis does for us is

to measure the gap between where we're at
and where we need to be and couple that with
a specification of the folks most likely to defend
the old way of doing things. The real problem
is that the bigger the gap the faster the
resistance mounts. And there's nothing new
under the Sun - as the quote from Machiavelli -
a widely misunderstood political philosopher
points out.

Go back to the last chart in the first section - we repeat there's no major policy issue we're facing that a) is not
addressable, b) where some pretty good blueprints aren't in place, c) (given proper tradeoffs) the capability isn't

Page 23 of 34
available and d) for which the primary obstacle has been our short-sighted choices. And decide whether the
game's worth the candles to fix - or relax and party on Grasshopper!

Rational Voters, Public Choice, Economics and Futures

July 26, 2008

Over the weekend a friend sent me an interesting message talking about irrational voters making the wrong
choices and not doing what they were told to by the academic economics community. Now as it happens there’s
often a great deal of sense in what the economists have to say - on the whole their analysis pans out. On the
other hand they often are too narrow in their views, as all specialists tend to be and neglect many real world
factors and dependencies. This is such an important issues it seemed like it was worthwhile to share the
exchange with you. Below is the original e-mail and my reply – which with my friend’s pronounced talent for
tabling simple questions with painfully complex answers require some effort to respond to. Hence…

But the reply, longish as it is, bears so much on the dilemmas we face in this election and the structural problems
we need to resolve that it provides a very useful piece of background information.

“These are serious times and we have serious problems….and we need serious people to
address them. Your 15 minutes are up.”
- Andrew Shephard

----- Original Message -----

Subject: book on voters “I was reading a Jacoby article "These are (still) the good old days",
which argued that our economic condition is much better than the picture alarmists paint. In the
article he has a link to the book The Myth of the Rational Voter. When I clicked on it I was
amused at the cover: http://press.princeton.edu/titles/8384.html It might be an interesting
book, as among other things it urges "economic educators to focusing on popular
misconceptions". Now if only we knew how to do that... “

My Reply:

Interesting and fascinating from a couple of points. The author (Caplan) has a blog
(http://econlog.econlib.org/) I used to follow and I first ran across the book via Mankiw' s blog. Another
friend and I got into some discussions over my objections to the book. Which considering our current
difficulties are really worth considering. Sorry if this is a longer reply than imagined but with your usual
flair you've stumbled over a big, messy and complex issue. And let me note to start Jacoby should have
explored some of this before firing off - they're really important.

The book is important in that it re-raises issues of public choice and the role of economics. It strikes me
as pernicious in that it'
s unfailingly libertarian, beyond Sowell, in it'
s hidden assumptions and narrow,
perhaps, disingenuous in the analysis. There are several thinks worth thinking about here that bear on
public decisions. It should also be mentioned that these problems have been discussed and really well
analyzed by a lot of 1rst class minds for some time, including Milton, George Stigler, Tom Schelling,
et.al. The seminal work on how perverse results emerge from political processes is, in my mind, "Logic
of Collective Action". As it happens there' s a resource y'
all should know about
(http://www.econlib.org/ - particularly the encyclopedia and podcasts: http://www.econtalk.org/ ) which
I was reminded of looking for stuff on Olsen and this whole process. This short, simple and accurate

Page 24 of 34
summary makes all the points I might have:
http://www.econlib.org/library/Enc/PublicChoiceTheory.html

There are in my analysis 3-4 major problems with either Caplan' s views or Jacoby' s re-iteration of we'
re
good. Let me dispose of the latter first. Economic progress in this country has been enormous and
people's wealth and well-being as well as access to resources is unprecedented. And much of our current
malaise is the Boomer disease of forgetting where this all comes from and that the world is a difficult
and uncertain place. All that said we enjoyed a golden age during the ' 50s and ' 60s and like all nouveau
riche got ourselves in trouble and paid for it in the '
70s. We tried to recover in the '
80s but really didn't.

Please take a look at these three blog posts which serendipitously sketch some of this out: Bears of the
Apocalypse I: Long-term Market Performance Perspectives, Bears of the Apocalypse II (LT Econ):
Who' s Fault is this Mess ?, WRFest 23Feb08(Int' l Affairs): What Makes for Progress. The bottom line
here is that we' re in a natural secular, long-cycle as the benefits of the post-war surge in new industries
matured, we face some global adjustments and need to re-tool some education and social policies that
haven' t worked out well. By and large this is nothing new and not as serious as prior challenges. Which
is not to say the doing of it will be easy - and not least of our challenges our attitudes, complacency and
political machinery.

More specifically on Caplan let me work thru what are the major defects in his argument:

1) he narrowly defines rationality as choosing theoretical textbook economic solutions

that got a check of approval at the AEA convention,

2) academic economists suffer from the "Flock of Dodos'problem as do almost all

specialist disciplines - including classical musicians (& Barry btw),

3) the specialist solutions are often deficient in a more complex world where more factors
are involved,

4) nearly all "free-market" solutions fail to account for the institutional foundations that
markets are embedded in as part of a larger socio-politico context (for an extended
discussion on alternative mechanisms, failures and strategies you might consider this
dloadable file: "Notes on Regulatory Reform" ) and

5) voters make rational choices based on their immediate known interests constrained by
the information available to them. Costly information btw is a major reason for the failure
of simple-minded market solutions because bad information can lead to bad solutions.

Rational Voters Defined

I'll counter-define rationality as making the best choices among those available to you based on accessible
information and our values and preferences. Let's remember btw that self-interest need not be narrowly defined.
We know that fundamental preferences for the public good have always existed (why did George Washington do
what he did - at least thrice or more saving the nation) and that's linked to long-term evolutionary characteristics of
the species. And our forces in the military can certainly be said to be acting in their own narrow, private interests
only by widening the definition so far it breaks. Public spirit is alive and well when it needs to be and people see
the need.

Page 25 of 34
Specialists and Dodos

Any specialist organization that wants it'

s recommendations adopted by the wider populace it obliged to
present, defend and explain those proposals in terms that are comprehensible and convincing to the
wider public. Or suffer the consequences.

"FofD" problems come about when specialists, e.g. evolutionary biologists, a) lecture the public and
treat them as children while not explaining themselves, b) presuming they are so entitled because of
their privileged position which may in fact represent only their own narrow interests and conclusions
and c) forget that they are dependent on the health and continued development of the larger socio-
economic system for their own support. In the vernacular if you keep crapping in your own well pretty
soon you' ll poison yourself. Academic economists are particularly prone as a group to this deficiency. A
classic example of predictable unintended consequences that were unanticipated is school busing where
bad analysis and bad thinking created a major mess we’re still trying to recover from. So much for
society wide social engineering experiments when you don’t know what you’re doing.

Int'
l trade theory suggests that we are always better off because more people have more things at lower
cost. History, experience and empirics have born that out for centuries. Recently studies have shown that
the lower income distribution population has benefited greatly from trade with China and the resulting
lowering of costs. (America' s overstated inequality )

Yet trade theory has one major macro-deficiency - it assumes that displaced resources, e.g. workers, can
be re-deployed to other uses. And further that the costs of the transition are far less than the larger-scale
benefits. When the displacement is relatively small compared to the increase in overall output that' s true.
On the other hand when the displacement is large, as it was when the US Midwest replaced E.Eur and
Russia as the breadbasket of Europe in the late 19th C. and no substitute alternatives were available, the
impacts can vastly outweigh the gains. The situation we face today is a combination of major
adjustments costs and barriers combined with a huge reservoir of under-employed labor in the BRIC
countries who will be in transition for decades. These are not the only examples but are a telling one.
Political support for free-trade requires fairness, legitimacy and conviction - all of which the academics
and blind free-trade supporters have failed of gaining.

You can't legitimately lecture people for not adopting your solutions when those are incomplete,
wrong or damage them more than you know and they are aware of. In fact you merely demonstrate
your own dodoness - with all the implied consequences that in a just Universe would/should/could
result.

Markets, Institutions and Government

Markets don' t magically spring up but gradually emerge over long time periods - they require common
measures of goods, e.g. grain contracts, rules of exchange, enforceability which all require in return the
presence of legal systems to enforce and adjudicated inevitable disputes and stable political systems that
defend the rights that citizens think they have. (Books to Read: Structure and Change in Economic
History by Douglass C. North, Power and Prosperity: Outgrowing Communist and Capitalist
Dictatorships by Mancur Olson ).

Page 26 of 34
Moreover markets often fail because many goods aren' t well-suited to markets, e.g. defense and security
are shared among many people. Buying increments is impossible and without taxes and public decisions
too many opportunists will free ride. Same arguments apply to Healthcare, Legal Systems, Public
Education, Highways, Public Health, and so on. Markets also fail when certain outputs or inputs aren' t
traded, e.g. the pollution created by a factory creates a public bad which the plant owners have no
incentive to correct. Or when common fisheries are badly over-exploited. One needs a political system
to establish public or private property rights and change these non-traded goods into controllable ones,
either thru markets or regulation.

Voter Choices and Rationality

Voters always choose what they think is best for them, best including short- and long-term as well as
private and family and general interest in the health of the society insomuch as it'
s recognized. Which
most do to some extent, greater or lesser. They may choose things that in fact result in bad consequences
from mis-understanding, poor information, poor presentation or the machinations of special interests
(Hidden Issues and Government Reform: the Politics of Special Interests) who gain so much from
manipulating the public legislative and regulatory environment that they can afford to invest
considerable resources in fixing those problems and changing things to suite.

The Challenges and Approaches

Very few of the policy issues we face are un-resolvable or unsolvable. The first if nothing else by
definition though we may not like the outcomes. In the areas of defense, foreign policy and economics
we actually understand pretty well since we have centuries of accumulated experience on the first two,
decades on the third and a core consensus. Key challenges are resolving Energy and stimulating
innovation to create the Next Big Things that will cause the emergence of new industries. On domestic
social policy it'
s a much more mixed picture. On traditional areas, e.g. Public Health and Infrastructure
governmentts have provided those for centuries. There are admin challenges but we pretty well
understand them. Our two biggest challenges are I) finding new models for social policy in those areas
where big solution/government social engineering has failed miserably thru not understanding the
complexities and II) creating new mechanisms of governance that are hybrids between markets and
public regulation. These are frontiers of invention, innovation and deployment where we' re still learning.

So, bottomline, we' re facing many challenges, they' re all hard, we'
ve done well but are reaching
exhaustion on our inheritances that requires us to suck it up. We know how to fix some things, we need
to get creative on others and pursue the 3rd Way forward.

Caplan on the whole makes a negative contribution thru his narrowness to all these challenges. And so,
therefore by inference and linkage, does Jaccoby. The free-market and conservative revolutions started
by Buckley and carried on by Friedman, et.al. and implemented under Reagan were necessary
correctives to big government solutions inherited from FDR' s "New Deal". Which are themselves
sensible and workable responses to breakages in the economy and socio-political system that no existing
mechanisms handled.

As FDR put it the two most dangerous men in America were MacArthur (the man on the white horse)
and Huey Long (the populist panderer). Just consider the last century of dysfunctional oscillation in

Page 27 of 34
Latin America between militaristic oligarchies and populist demagogues. Or the recurrent breakdowns
in Fr. gov'
t over the last two centuries.

Comments

Posted by: Jon Entwistle | July 28, 2008 06:57 AM

The linked article on Public Choice Theory is fascinating. The points that most strike me from that are:
-- "The voter is largely ignorant of political issues and ... this ignorance is rational. Even though the result of an
election may be very important, an individual's vote rarely decides an election. Thus, the direct impact of casting a
well-informed vote is almost nil; the voter has virtually no chance to determine the outcome of the election. So
spending time following the issues is not personally worthwhile for the voter." By contrasting voting with
purchasing a car, Ms. Shaw makes clear that voters are acting rationally! (I don't think that makes me feel better
though.)
-- Re legislator's actions: "Politicians may intend to spend taxpayer money wisely. Efficient decisions, however,
will neither save their own money nor give them any proportion of the wealth they save for citizens. There is no
direct reward for fighting powerful interest groups in order to confer benefits on a public that is not even aware of
the benefits or of who conferred them. Thus, the incentives for good management in the public interest are weak.
In contrast, interest groups are organized by people with very strong gains to be made from governmental action.
They provide politicians with campaign funds and campaign workers. In return they receive at least the "ear" of
the politician and often gain support for their goals." And Shaw goes on in the next paragraph to demonstrate how
this works to citizens' disadvantage. Between this point and the last, it seems pretty clear that government, due to
its sheer size and complexity of competing interests, will often screw the public. Or at least result in highly
inefficient use of the taxpayers' money.
-- Then one of the conclusions: "Although public choice economists have focused mostly on analyzing
government failure, they also have suggested ways to correct problems. For example, they argue that if
government action is required, it should take place at the local level whenever possible. Because there are many
local governments, and because people "vote with their feet," there is competition among local governments, as
well as some experimentation." Sounds good to me. In fact, in general I'd vote for a platform that promotes
pushing more of government to local levels. Else how to overcome the "organosclerosis" of this mammoth
bureaucracy and its patent inefficiencies?

Jon - glad you got so much out of. That short piece on Public Choice is a jewel though it doesn't go far enough. I
took a "Law and Econ" class in grad school where many of those key texts were intro'd and found it a startling
introduction. Shaped my thinking ever since.

The interesting thing about the critical points you focused on are a) that they are sine qua non of understanding
the political economy of gov't and b) are really so much common sense when you think 'em thru. Powerful,
powerful, powerful.

The shortfall is that the article doesn't go far enough. To the list needs IMHO to be added:
1) gov't is an inescapable requirement for organizing collective life - and the bigger and more complex the society
so to the gov't...dancing bear syndrome (be amazed he dances at all not critiquing how poorly he does)

2) the problems you highlight have been endemic going back to large-scale chiefdoms and central to the rise and
fall of all advanced societies....in fact they've killed most of 'em thru organoscelrosis.

3) what should have been married to the article is a discussion of how institutions and the control of power create
the framework in which the gov't, society and economy operate; and how they develop and evolve: Peace,
Stability and Prosperity: the Nature of Good Government

But overall I have to thank you for triggering off the effort - as many hours as it took me :). Several people have
commented quite favorably, surprisingly so in fact. And after turning it into a blog post, though the day is far from
over, the traffic has been significantly up.

Page 28 of 34
Voice, Leadership, Messages, Realities: Living in a Tough World
http://llinlithgow.com/PtW/2008/07/voice_leadership_messages_real.html
July 30, 2008
The latest Real Clear Politics poll has it like this: Barry
46.3, John-boy 43.7, Difference 2.6(B). Not much of a gap
and one that's narrowing, even after the triumphal world
tour. We'll have to see how things play out of course.
Every "objective" indicator from dislike of Bush, to the
state of the economy, to accelerating voter anxiety about
the future to the successes in Iraq would favor Barry.
What's going on here?

Well some of, if not most of it, is the dilemmas and lack of
clarity we already discussed (Moral Clarity ? Good
Intentions, Muddy Proposals, Directional Obscurities).
And the cartoon, puts it in perspective. A caveat - while
the cartoonist probably intended to take a shot at Barry
IMHO it applies to John-boy as well, just differently.

My bottom line is this - we have a pretty clear grip on the major policy challenges, both here on the blog in some
depth and analytical fashion and among the general public. Who may be less analytical but has a darn good
grasp of what the real challenges are. Where the rub's turning into pain and how serious it is. What we don't have
a clear grip on is what either candidate is proposing to do about it. Let me wrap a couple of pictures around that,
just for fun, illustration and to riff off of.

Policy Directions

First, just as a reminder and to frame

the discussion, here's how we see the
major policy challenges. Including our
recommendations for strategic
directions to follow to dealing with
them - basic or fundamental principles
if you will. Now the categories and
descriptions got built up out of the way
things work - reality as best we can
judge - and the way people end up
thinking about these things, even when
it's not so crisp. The directional
recommendations are what our
analysis suggests offer the best and
most workable objectives to pursue at
a high level. But of course the devil's in
the details.

Page 29 of 34
Candidate Evaluation

So how're the candidates doing against the

blueprint? And how will/are people judging
them? The next picture we put together to try
and frame those question from a couple of
direction. As the last post discussed (Rational
Voters, Public Choice, Economics and Futures)
nobody's got the time or resources to do
detailed evaluations on all the issues and
alternatives, the candidates and their non-
existent proposals. So we all tend to the next
best thing - judging on Vision, Leadership and
Policy Principles. More or less - and it's not a
bad way to go.

If you combine that list with the policy principles

blueprint you might end up with something like
this. And apply it to the two candidates you
might end up with the two-color triangles. Which
aren't entirely fair but hey, what'd you expect for
free graphics anyway? But they aren't entirely
inaccurate either - Barry is a lot stronger on the
Vision thing but sure seems to fade out fast on
anything below that. On the other hand John-
boy gets to down to brass tacks on a few things
where he's comfortable (his paint scheme
should have been spottier for sure) but sure
fades fast when trying to explain how he sees it all tying together. If Barry is running on eloquence John-boy's
running on true-grit and track record and both might just be running on empty.

As Good As It Gets??? Where's Ronnie When You Need Him?

That's a complaint, not a diagnosis and not a treatment for sure but it may be as good as it gets. Going back to
the "Policy Principles" chart we're in a world where there are major structural changes in every category. It's a
brave new, multi-polar world where peace and love haven't broken out but there are major rising powers who
need to be incorporated constructively into some new system. Meanwhile we're experiencing major structural
shifts in the economy which is making people legitimately anxious about future growth prospects. And it's also
leading to major pressures on society that are making people less comfortable with the old American verities. The
only good news IOHO is that the culture wars have been back-burnered as the seriousness of these challenges
mount up.

The last time we faced a range and depth of problems this severe was in 1980 when we had an imploding
economy, a failing foreign policy that was losing the Cold War and a mounting backlash against the failed social
engineering of the '60s and the associated libertinism attacking our core historic values. And Ronnie managed to
step forward, calm everybody down by offering a vision for the future and specific action plans that did address
many of these problems. In a small way he shared Lincoln's abilities in finding simple explanations for complex
problems and converting them into convincing stories. But also for the record he was badly wrong about much of
his economics and we're still living with the consequences. On the other hand there was a lot he was right about;
for example he and Volcker broke the back of inflation and restored a growing economy though supply-side
turned out to be voodoo economics indeed.

Page 30 of 34
In other words he had a VOICE - he could tell us straight out what he thought was going on and what we ought to
do about it, in a way we could understand and find convincing...or not.

Voice and Leadership

And therein lies the problem - neither of the candidates has found their VOICES as yet.
They haven't come up with simple, clear and compelling explanations of who they are, what they
stand for, what they think we should do and how we should go about.

That's it in a nutshell.

But let's set the record straight. The scope and seriousness of the problems we face now are not anything like the
ones Reagan faced and those were nothing in comparison to what we faced at prior major turning points in the
history of the Republic. So let's everyone get a grip - we got thru those. Maybe not with style and grace but overall
not ineffectively either. We'll muddle thru these somehow as well - if nothing else by definition. The question then
becomes will we like the outcome?

Part of the problem is that for a long time politicians have been successful telling us what the think we want to
hear because we haven't insisted on hearing painful truths. Well the fact of the matter is that the world is what it is
and we're in a better position, now and for decades than almost any other entity. But there are serious challenges.
The one of most concern is the economy and there aren't any magic answers, there especially. Most of the
problems we face with regard to the Economy, and the associated problems with Energy and Education are the
result of deep structural flaws that have been accumulating for decades. They are addressable....just not quickly,
easily or cheaply. So?

The bottomline of the bottomlines is that the central challenge is the short- and long-term economic
issues. And neither candidate has demonstrated any comfort, competence or command there.

Despite, at least in Barry's case, having as fine a composite team of business leaders and economists at his
disposal as any I've ever known to be assembled. And John-boy's on the whole ain't to bad either. But that's in a
nutshell - they need to find their VOICES on the Economy and we're running out of time.
And with only a little over three months left this may indeed be as good as it gets.

Peace in the Public Square: the 100 Days and Re-emergence of Civitas (Updates)

http://llinlithgow.com/PtW/2009/04/peace_in_the_public_square_the.html
April 28, 2009

Welcome to the "Brave New World", or as we like to call it the Land of Reset. If
you listened to the 100-day press conference we think the President did a
decent job but not a great one, unlike his economic situation and policy review.
Nonetheless, excepting the die-hard ideologues, this is a remarkable
performance. And, in our judgment, an effort to find centrist, pragmatic and
workable policies domestically, economically and internationally. In each of
these areas thoughtful, informed, bold and potentially revolutionary policies
have been put forth. An assessment put forth by a wide range of pundits (some
of whom you'll find in the readings). We're going to try and take that apart a bit
and look at what went on (though there's too much to review in ANY detail),
what some of the assessments are and, our typical schtick, what the context
and consequences are and how things will play out structurally.

Setting aside partisan posturings the three major criticisms that have been voiced (many by David Brooks initially
and then picked up by others) are: 1) too much, to quick, 2) workability and execution (not in so many words but it

Page 31 of 34
is THE issue now that we're moving beyond ideological posturings) and 3) a radical shift in the line between the
public and private spheres. All of them are legitimate, raise serious concerns and need to be addressed.

But the bottomline here is that we're seen a remarkable 100 Days where critical markers have been laid down that
set the tone, direction and strategies for most of the rest of the term and beyond. We are in fact engaged in an
audacious reset at the most fundamental levels that will frame our outlook for decades. Perhaps most importantly
with "Coach Carter" treating the voters like responsible adults and a slow shift in how they respond: from poll-
driven policy-faking to principle-based decisions that try to balance what's best with what's feasible and saleable.
Now it's time to execute, execute, execute.

A 100-Day Assessment: Brooks, et.al.

In the readings you'll find selected excerpts and URL links to some of the
more thoughtful pundits but so far the doyen and dean of reasonably
balanced commentary is Mr. Brooks. Who, despite being a moderate
conservative and a Burkian who worries about disrupting complex
socionomic systems and unintended consequences, has applauded many
of the decisions. For example calling the new Afghanistan policy bold but
the war winnable or describing the economics speech as stunningly good or
being dazzled and amazed at the sheer managerial competence of the
Administration and how much they've managed to get done on so many
fronts. We strongly suggest you invest the 30 min. required in watching the
interview and taking notes because he covers an immense amount of
ground quickly but insightfully. Some of the those major points deserve long
essays in response.

On the workability question we'll pursue some critical aspects later in policy focused posts but what Brooks and
the others are missing is the repeated application of a systematic and systemic decision-solving methodology that
seems to permeate each issue: gather the best people and ideas, pull them together, put a framework down, work
out the details, start working the legislative process and selling to the voters. Review, revise,verify and extend as
circumstances evolve.

Policy, Politics, Lizard-brains and the

Disruptive Opposition

Let's get a little more analytical about some of

the things swirling around. The accompanying
graphic is a little busy but instead of building it
up we compress several key ideas so that you
can see how they all work together. Policy and
politics have at least three key dimensions that
must be addressed to be effective: what's the
right policy, what constituencies does it impact
and how do they react (the Political Spectrum)
and how do you persuade sufficient support
(the Mental Spectrum).

Political interest combines the moderate and

centrist leanings of the polity with the
tendencies of party activists to retreat to the
extremes while selling a policy has to balance
the depth and density of information with the
appeals to the hindbrain where decisions are
really made. Clinton sold to the polls and told
us what we wanted to hear - he got away with

Page 32 of 34
it because the times were good. Bush II told us what he thought we ought to hear based on his own ideologies.
Obama is telling us what we must hear and not sugar-coating it. We'll see if the polity evolves itself enough to
continue to respond constructively - so far there's more faith in the President than in his policies.

We first used this chart during the elections and have modified it to show how a centrist candidate (Barry) sold his
intent while a wannabe centrist (McCain) retreated to the right and more and more appealed to the hindbrain.
Now President Obama has gotten even more information-rich and is doing a fabulous job explaining things. It's
not clear he's selling them - which is in fact one of the two major weaknesses he's got so far. That's not a problem
that goes away until more pudding is eaten for proof however. On the other hand the Rips are retreating faster
and faster into pure hindbrain appeals and bad policies.

It's all very well and good to be "sincere" but right counts first and foremost and they're pushing shibboleths that
were appropriate in Reagan's day, had a positive impact for a while but are badly outdated and deeply flawed. But
instead of re-thinking themselves the True Believers are getting increasingly self-destructive. Too bad for them
and ultimately for the country - a set of observations that roughly Brooks agrees with btw ! Ironically (cf. the
readings, especially the assessment by Matt Miller) Obama's major initiatives in Healthcare, Education and
Energy are closer to a combination of a) what Bush tabled in several State of the Union speeches (on Energy for
example what's emerging is pretty close to his 2001 National Energy Strategy) and b) what other moderate
Republicans have proposed over the last 20+ years. The Republicans, as opposed to the Rips, should be getting
behind these instead of pursuing power and advantage at the cost of what's best for the country.

The Public Square: What Makes the Agora Work

Any society consists of a private sphere where people

conduct their lives and make a living, a public sphere where
the society makes decisions for everyone and a civic sphere
where culture, religion and values define the ecology of the
private and public sphere. If you go to almost any city in the
world you'll find a public square which typically has shoppers
strolling around, shops and commerce, public buildings and
civic institutions (libraries, schools and churches for
example). In Ancient Greece the called it the Agora - where
all the myriad facets of the life of the city-state came
together into one organic whole. Have you ever stopped to
wonder what makes the public square work?

Like our mutual agreement that we have to have rules of the

road so that we can operate our highways safely and
efficiently we have to have rules that govern the Agora. Key
among which is the agreement to abide by the rules, a recognition that they are necessary, tolerance for anybody
who follows the rules to have the right to come to the square and be heard and a willingness to cooperate in it's
creation, maintenance and safety. The public square has defined Civilization for millennia and, in it's modern,
complex and gigantic form, it still does.

We've spent the last two or more decades abusing the rules necessary for the long-term health of the public
square and damaged both the private and civic spheres as a result. Largely thru the opportunistic pursuit of
various interest groups of their own advantages and interests at the expense of the general health and well-being.
Now the question is will we all be citizens together and act in our collective self-interest to return the square to
health or not?

Page 33 of 34
Changes in Attitude: Paco vs the
Consumer

This might be an odd sort of source to look at but

Paco Underhill, who is one of the best consultants
and strategists in the world when it comes to retail
and consumer behavior, was interviewed on the
Newshour last week. He had a lot to say that was
"ostensibly" about change in consumer behavior.
But his critical observations and insights were
really about whether or not we can continue to
sustain our old behaviors. This economic crisis is
forcing major and radical changes in shopping but
Paco think the changes in attitudes are going to be
permanent. We happen to agree.

As he points out - we can no longer afford to

consume beyond our means. More importantly,
fundamentally and even philosophically, we don't
need to. Perhaps his most startling observation is
that people need to learn, and are learning, that
the next car or house or vacation is not only
unnecessary. IT's NOT SATISFYING ! Now that's a SEE-change in our books. And when it comes from a guy
who makes his living getting you to buy more and he's calling for changes in basic attitudes something is up.

UPDATES: the Difference Between Pundits and Executive Responsibility

Here's the link for the CSpan: Obama 100 Day Press Conference and the post-conference Rose panel that
discussed it. We were struck in the first case by how closely our assessment of things mirrored the President's
directional intent while at the same time was reinforced by the pundits. BUT that's NOT the most important thing -
THE important things are that the pundits don't talk at all about 1) whether the policies are right (which we've
argued at length that they are), 2) what it takes to implement them (the question never came up among them) and
3) what it takes to explain and sell them to motivate the country in support of them. Yet as a matter of fact those
are the central questions that must concern the Administration. The difference is between outside observers
who've never stepped in front of the gun, even in a small way and the people who see dealing with all the elbow
jostlers as just another part of their job but who's primary concern is getting it done, and getting it done right,
workably and sustainably.

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