An Evolved Kindness Toward Strangers? Yes, Really.

If you look around the world today, and around the U.S., too, there are a lot of reasons to question just how welcoming, trusting and generous different people are inclined to be toward strangers. That is especially true for certain foreigners or immigrants in their lands, especially those of other races or religious persuasions. It has too often been anything but an attractive or uplifting affirmation of mutual acceptance, or even tolerance. Yet, there is now research evidence supporting evolution of just such a human impulse to be welcoming and kindly to strangers.

As reported in a recent edition of The Economist, there appears to be a human inclination to to be cooperative, even trusting and kind toward strangers--as long as there is no present threat, demagoguery or signal to warn or poison us against it. An evolutionary basis for trust among those in family or community relationship has long been accepted. But in the case of strangers, it has generally been thought some extraordinary situation or context was required to explain it. Now, this new study uses computer simulations meant to reflect real life interactions, consequences and probabilities, and runs 10,000 generational iterations to reach the conclusion that such openness and kindness to strangers is indeed alive and well, and very likely has evolutionary origins.

From The Economist:

THE extraordinary success of Homo sapiens is a result of four things: intelligence, language, an ability to manipulate objects dexterously in order to make tools, and co-operation... At the moment co-operation is the most fashionable subject of investigation. In particular, why are humans so willing to collaborate with unrelated strangers, even to the point of risking being cheated by people whose characters they cannot possibly know? 

Evidence from economic games played in the laboratory for real money suggests humans are both trusting of those they have no reason to expect they will ever see again, and surprisingly unwilling to cheat them—and that these phenomena are deeply ingrained in the specie's psychology. Existing theories of the evolution of trust depend either on the participants being relatives (and thus sharing genes) or on their relationship being long-term, with each keeping count to make sure the overall benefits of collaboration exceed the costs. Neither applies in the case of passing strangers, and that has led to speculation that something extraordinary, such as a need for extreme collaboration prompted by the emergence of warfare that uses weapons, has happened in recent human evolution to promote the emergence of an instinct for unconditional generosity. 

Leda Cosmides and John Tooby, two doyens of the field, who work at the University of California, Santa Barbara, do not agree. They see no need for extraordinary mechanisms and the latest study to come from their group (the actual work was done by Andrew Delton and Max Krasnow, who have just published the results in the Proceedings of the National Academy of Sciences) suggests they are right. It also shows the value of applying common sense to psychological analyses—but then of backing that common sense with some solid mathematical modeling... 

After a certain amount of time the agents reproduced in proportion to their accumulated fitness [success]; the old generation died, and the young took over. The process was then repeated for 10,000 generations (equivalent to about 200,000 years of human history, or the entire period for which Homo sapiens has existed), to see what level of collaboration would emerge. 

The upshot was that, as the researchers predicted, generosity pays—or, rather, the cost of early selfishness is greater than the cost of trust... For most plausible sets of costs, benefits and chances of future encounters the simulation found that it pays to be trusting, even though you will sometimes be cheated. Which, if you think about it, makes perfect sense...  No need, then, for special mechanisms to explain generosity. An open hand to the stranger makes evolutionary as well as moral sense.  

---"Welcome, Stranger: The Evolution of Generosity," The Economist, Science and Technology section (7.30.11)

Of course, modeling assumptions, conditions and contingencies can always be questioned or challenged. The modeling in this research is no exception. Still, a rigorous and logical thought process appears to have gone into the modeling and the research. And, if we can remove ourselves from the hot-button issues and demagoguery, the fear and animosity so often incited in us toward different ethnicities and faith perspectives, foreign or immigrant populations, then the notion of welcoming and helping strangers really does resonate with us all, doesn't it? 

Absent the sense of economic threat, or threat to our sense of identity and community, aren't we most likely to greet all people from a more welcoming and helpful stance? Isn't our unthreatened impulse to be kind, supportive and generous to others, whether or not they are strangers or in some way foreign to us? I think so, and I think that's true for most people I know.

Hospitality runs deep in us through our history in community and among communities. And it has been buttressed by the faith teachings and practice dictates of the Abrahamic faiths and other deistic and nondeistic spiritualities and philosophies, East and West--even if they are often and wisely suspended in cases of real or threatened harm. So it appears this evolved impulse derives from the multi-generational experience of peoples with their feet set firmly on the ground, even as it is reinforced from the founts of wisdom on high.

If only we could eliminate those features of group interaction (including the exploitative demagoguery) that threaten the well-being, identity or peace of others. Isn't trust, generosity and cooperation so much more appealing? Doesn't it feel so much more assuring and secure? But much of that, too, is a function of our evolved attentiveness to danger, our wariness of potential threats, our self-protectiveness. At the least then, we must more consistently identify, deny and ignore the exploitative populist demagogues and bigots, lay bare the avarice and ambitions for power that drive them, and the divisive designs and methods they shamelessly employ.

That is not to say there are not very good reasons to be fearful and self-protective among certain people or groups, in certain situations or venues. We all know that. But the insidious part, the exploitative part, is using our fears to generalize the real threats to larger groups and conditions that pose no real threat at all--and in the process, deny us access to so many good people who would also be good friends.

Link to the article at the cite above, or here:

http://www.economist.com/node/21524698

Just Who They Are

Even those whose identity is shaped by the most common human experiences, forged in pain by the bluntest instruments of life--the common carpentry nails of society--fill places and serve purposes unique to them, important to others, and needed by society. They may be marked by humility--although not all are--but they live as well they can, give as much as they can, and care and love with all they are.

Sometimes they are called to serve God or man in ways they may not understand, that those served do not appreciate, and society rarely acknowledges. But they trust in their calling and their work. They must. They just are who they are, the best God has to offer. And I hope they can sense God smiling on them. GH

What The Hammer Holds

The song "The Hammer Holds" always moves me. It's a favorite. The lyrics and vocal are by Bebo Norman. It begins as though a metaphor for a rather common, but challenging, existential and spiritual understanding. But it then turns to the most unique, inspiring, and instructive of stories in the end. And I don't think you have to be a Christian, a person of faith or spirituality, to appreciate the poetry, the beauty and inspiration of Norman's verse.

(Click here or on highlighted title, above, to hear song on YouTube.)

The Hammer Holds  

A shapeless piece of steel, that's all I claim to be
This hammer pounds to give me form, this flame, it melts my dreams.
I glow with fire and fury, as I'm twisted like a vine
My final shape, my final form I'm sure I'm bound to find. 

So dream a little, dream for me in hopes that I'll remain
And cry a little, cry for me so I can bear the flames
And hurt a little, hurt for me my future is untold
But my dreams are not the issue here, for they, the hammer holds. 

This task before me may seem unclear
But it, my maker holds. 

And the water, it cools me gray, and the hurt's subdued somehow
I have my shape, this sharpened point, what is my purpose now?
And the question still remains, what am I to be
Perhaps some perfect piece of art displayed for all to see. 

So dream a little, dream for me in hopes that I'll remain
And cry a little, cry for me so I can bear the flames
And hurt a little, hurt for me my future is untold.
But my dreams are not the issue here, for they, the hammer holds. 

The hammer pounds again, but flames I do not feel.
This force that drives me, helplessly, through flesh, and wood reveals
A burn that burns much deeper, it's more than I can stand.
The reason for my life was to take the life of a guiltless man. 

So dream a little, dream for me in hopes that I'll remain
And cry a little, cry for me so I can bear the pain
And hurt a little, hurt for me, my future is so bold.  

But my dreams are not the issue here, for they, the hammer holds. 

This task before me may seem unclear
But it, my maker holds.

The notion of a metaphor for forging identity in the painful difficulties of life, a process in God's hands, gives way to the clearer device that Norman is using. He has anthropomorphized the forging of a common, rough-hewn nail of 2000 years ago--and he is delivering it--and us--to the cross and crucifixion of Jesus. 

The anthropomorphized nail struggles with its painful forging, simple identity, and purpose in life--and then the sinking realization of the use to which it has been put, which it cannot understand. Norman delivers us to the cross from a most creative and insightful perspective; he does so powerfully, instructively, even inspirationally. He shares how God uses our commonplace identities and painful lives for His purposes in ways we sometimes just cannot understand--but then, refuge and peace is accepted in our faith and trust in His purposes for our lives. And it inspires in me this further reflection:

Even those whose identity is shaped by the most common human experiences, forged in pain by the bluntest instruments of life, fill places and serve purposes unique to them, important to others, and needed by society. They may be marked by humility--although not all are--but they live as well they can, give as much as they can, and care and love with all they are.

Sometimes they are called to serve God or man in ways they may not understand, that those served do not appreciate, and society rarely acknowledges. But they trust in their calling and work. They must. They just are who they are, the best God has to offer. And I hope they can sense God smiling.

 

 

A Guest Viewpoint: Qualified Support for Increasing Taxes, Obama

Long-time friend and former Textron colleague, Rick Watson, offers a direct, well-considered viewpoint in response to my last post and comments--the one on Warren Buffett's WSJ Op-Ed piece advocating higher taxes for the rich and super-rich. With Rick's permission I share it with you here. For many years, Rick managed Textron's pension and insurance company investments, then served as group officer for Textron's financial services companies, and ended his career as vp, treasurer and sometime M&A deal team leader. He and wife Carolyn are among our favorite dinner and conversation companions. Rick's response:

Greg, 

Like you, I thought Buffett's comments were on point and appropriate. I also am open to paying higher taxes personally and seeing some reduction in my entitlements. However, I could only be supportive of higher taxes if it were part of a global solution to the debt and fairness issues facing the US. Simply raising taxes on those of us with incomes above $250,000 and making no other changes would allow Congress to temporarily avoid the bigger long-term problems.  

I favor a solution like Simpson Bowles and think taxes without addressing all the other important issues is as bad as spending cuts alone. I believe that Medicare, Social Security and Medicaid need to be changed for long term viability. Defense spending needs to be reduced. The tax code needs simplification and broadening of the base. I favor a truly flat, graduated tax, no deductions, no exemptions and no incentives. This should be true for corporations as well as individuals.  

We need a clear national discussion about what we want our government to provide and what we want the states and individuals to be responsible for. I now believe that the Tea Party, which I generally dislike, has actually done the country a service. We need the issue of deficits and governments role in our lives put under a spot light. Now that we've got the attention of a least some voters, we need honesty and facing up to the tough choices. Unless Obama's new plan addresses the big issues and is honest about government's limited ability to create jobs, I'll look elsewhere for a presidential candidate. 

Rick

Thanks, Rick. Looking forward to dinner and conversation again.

 

Warren Buffett: Coddling the Rich

Mr. Buffet:

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as "carried interest," thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they'd been long-term investors.  

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It's nice to have friends in high places.  

---"Stop Coddling the Super-Rich," by Warren E. Buffett, New York Times Op-Ed page (8.14.11)

In my prior comments on deficit reduction, I have made clear my willingness to pay higher federal income taxes--and I don't view myself as rich, certainly not super-rich. But I'm relatively well-off, and I recognize the importance of the revenue side of deficit reduction, the necessity to raise taxes on those who can afford it, those who will be unlikely to reduce their consumption or investment as the economy struggles to recover. 

Now comes Warren Buffet, one the world's wealthiest and most socially responsible men. He thinks it's nothing short or shameless and ludicrous--my interpretation--that wealthy people are not called on to play the part only they can equitably play in helping restore budget responsibility and a stronger economy. In this NYT Op-Ed piece, Mr. Buffett shares his reasoning:

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.  

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot... The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It's a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.  

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.  

I didn't refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation.  

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.  

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)   

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering... 

Twelve members of Congress will soon take on the crucial job of rearranging our country's finances. They've been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It's vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country's fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.  

I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.  

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.  

My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice.

[Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.]

Thank you, Warren Buffett, for the straight talk, a fair look at taxation of the rich, and why paying 3% more is asking so little of people who have benefited so greatly from the opportunity America affords. As most of you know, I would extend the request for shared sacrifice further; I'd restore the 3% that Bush removed for the very well-off as well, those for whom it will not likely reduce their consumption. That could mean President Obama's definition including those making $250,000 in annual income, or at least those making $500,000.

But to fail to call on the rich and super-rich is both fiscally irresponsible and denigrating to the notion of social fairness. Adding these needed revenues to the necessary budget reductions and social program reform is just too important to a fair and reasonable solution of the budget crisis--and to helping the middle class and poor feel they are not carrying the pain and sacrifice of a troubled economy alone. It's not much to ask.

Link to article after 1st paragraph or here:

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1

This is a great review and opinion by good friend, Sandy Parker, retired corporate treasurer, former area president of the League of Women Voters, and member of my Naples foreign affairs discussion group. It is about the left-liberals' disappointment with President Obama's failure to win the day on all progressive issues due to his lack of passion, and his failure to exercise the power of his gifted rhetoric. 

I stand right with Sandy and the supporting commentary of Fareed Zakaria, whom she cites. I too think these left-liberals need to grow up and embrace practical, responsible governance; I too think Obama has most often bravely, rightly, taken the road of balanced realism and common sense. Again, Zakaria offers his balanced, if "simple," straight-forward analysis from a position informed by both fiscal and legislative pragmatism, and realistic, progressive social hopefulness. I was going to post on the Zakaria piece myself, but I can't do it better than Sandy did, so I'm just sending hers along.

Greg

Sparker's Soapbox: Drew Westen and Obama's Passion

---

Drew Westen and Obama's Passion Posted: 13 Aug 2011 05:26 PM PDT Drew Westen Drew Westen's "What Happened to Obama's Passion" (New York Times 8/6/11) has been sent to me by more friends and readers than any other I can remember.  It clearly struck a chord with many who are feeling disappointed and disillusioned with President Obama's leadership.  To me, Westen is "the-glass-is-half-empty" incarnate.  (See my 8/3 post "My thoughts on the debt deal.") So I was gratified to watch Fareed Zakaria, Editor-at-Large of TIME Magazine, and Jonathan Chait, Senior Editor of The New Republic, debate Mr. Westen on The Charlie Rose Show the other night.  If you've been taken in by Westen's piece, I highly recommend that you watch the Charlie Rose segment by clicking here. Rose said he set up this particular line-up of guests because --  If you do what I do, this is a perfect storm.  First you have somebody write something, then you have someone respond to it, and then you have someone come along in Time magazine and talk about all of them. After watching and appreciating the debate, I was curious to read the Chaitt and Zakaria pieces Rose referred to, so I tracked them down. Chaitt's piece appeared in The New Republic on 8/8 with the title "Drew Westen's Nonsense."   Here are some excerpts: There are some strong criticisms to be made of the Obama administration from the left, especially concerning Obama's passive response to the debt ceiling hostage crisis, and his frightening willingness to give away the store to John Boehner. I've made many of these criticisms myself. But Drew Westen's lengthy, attention-grabbing Sunday New York Times op-ed is not a strong criticism. It's a parody of liberal fantasizing. .... Westen's op-ed rests upon a model of American politics in which the president in the not only the most important figure, but his most powerful weapon is rhetoric. The argument appears calculated to infuriate anybody with a passing familiarity with the basics of political science. In Westen's telling, every known impediment to legislative progress -- special interest lobbying, the filibuster, macroeconomic conditions, not to mention certain settled beliefs of public opinion -- are but tiny stick huts trembling in the face of the atomic bomb of the presidential speech. The impediment to an era of total and uncompromising liberal success is Obama's failure to properly deploy this awesome weapon. ... Obama took office at the cusp of a massive worldwide financial crisis that was bound to inflict severe damage on himself and his party. That he faced such difficult circumstances does not absolve him of blame for any failures. It sets the bar lower, but the bar still exists. How should we judge Obama against it? I would argue that both the legislative record of 2009-2010 and Obama's personal popularity level exceed the expectation level -- facing worse economic conditions than the last two Democratic presidents at a similar juncture, Obama is far more popular than Jimmy Carter and nearly as popular as Bill Clinton, and vastly more accomplished than both put together. Obviously this is the crux of the dispute, and I don't have the time and space to defend this larger judgment here. But Westen offers almost nothing but hand-waving and misstatements. He blames Obama for the insufficiently large stimulus without even mentioning the role of Senate moderate Republicans, whose votes were needed to pass it, in weakening the stimulus. An argument can be made that Obama could have secured a larger stimulus through better legislative tactics, but Westen does not make this case, or even flick at it. A foreign reader unfamiliar with our political system would come away from Westen's op-ed believing Obama writes laws by fiat. ... Chaitt concluded: The most inexcusable factual errors in Westen's essay have been documented by Andrew Sprung ["A lover of fairy tales casts Obama as villain-in-chief,"], who points out some of the occasions Obama has used exactly the kind of rhetoric Westen accuses him of refusing to deploy. Westen is apparently unaware, to take one example, that Obama repeatedly and passionately argued for universal coverage. The fact of his unawareness is the most devastating rejoinder to his entire rhetoric-centered worldview. If even a professional follower of political rhetoric like Westen never realized basic, repeated themes of Obama's speeches and remarks, how could presidential rhetoric -- sorry, "storytelling" -- be anywhere near as important as he claims? The clear reality is that Americans pay hardly any attention to what presidents say, and what little they take in, they forget almost immediately. Even Drew Westen. The Zakaria piece appeared in TIME and on Zakaria's Global Public Square website on 8/12 with the title "Fareed's Take: Defending Obama's pragmatism."  It begins: Over the last week, liberal politicians and commentators took to the airwaves and op-ed pages to criticize the debt deal that Congress reached. But their ire was directed not at the Tea Party or even the Republicans but rather at Barack Obama, who they concluded had failed as a President because of his persistent tendency to compromise. This has been a running theme ever since Obama took office. I think that liberals need to grow up. ... The disappointment over the debt deal is just the latest episode of liberal bewilderment about Obama. "I have no idea what Barack Obama ... believes on virtually any issue," Drew Westen writes in the New York Times, confused over Obama's tendency to take "balanced" positions. Westen hints that his professional experience - he is a psychologist - suggests deep, traumatic causes for Obama's disease. Zakaria offers his own "simpler explanation" – with which I agree wholeheartedly: Obama is a centrist and a pragmatist who understands that in a country divided over core issues, you cannot make the best the enemy of the good. Obama passed a large stimulus package within weeks of taking office. Perhaps it should have been bigger, but despite a Democratic House and Senate, it passed by just one vote. He signed into law an unprecedented expansion of regulations in the financial-services industry, though one that did not break up the large banks. He enacted universal health care, through a complex program modeled after Mitt Romney's plan in Massachusetts. And he has advocated a balanced approach to deficit reduction that combines tax increases with spending cuts. Maybe he believes in all these things. Maybe he understands that with a budget deficit of 10% of GDP, the second highest in the industrialized world, and a debt that will rise to almost 100% of GDP in a few years, we cannot cavalierly spend another few trillion dollars hoping that will jump-start the economy. Perhaps he believes that while banks need better regulations, America also needs a vibrant banking system, and that in a globalized economy, constraining American banks will only ensure that the world's largest global financial institutions will be British, German, Swiss and Chinese. He might understand that Larry Summers and Tim Geithner are smart people who, in long careers in public service, got some things wrong but also got many things right. Perhaps he understands that getting entitlement costs under control is in fact a crucial part of stabilizing our fiscal situation, and that you do need both tax increases and spending cuts -- cuts that are smaller than they appear because they all start with the 2010 budget, which was boosted by the stimulus. Is all this dangerous weakness, incoherence and appeasement, or is it common sense? Zakaria's opinion (and mine): common sense. If you're one of those who thought Westen had it right, I hope that Zakaria's, Chaitt's and Sprung's comments give you a different perspective.  I know folks are frustrated.  I am too.  But a lot can happen between now and November 2012, and no doubt will.     Keep the faith.  Hang in there.  Resolve to see the glass as half full.

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Here Soar, Here Love

From the Sufi Poet Hafiz, as rendered by Daniel Ladinsky:

Not With Wings (1)  

Here soar
Not with wings, 

But with your moving hands and feet
And sweating brows-- 

Standing by your Beloved's side
Reaching out to comfort the world 

With your cup of solace
Drawn from your vast reservoir of Truth. 

Here soar
Not with your eyes and senses 

That turn their backs
On the earth's sweet stumbling dance
Which needs you. 

Here love, O here love... 

And with your heart on duty
To the souls of rivers, children, forest animals,
All the shy feathered ones, 

O here, Pilgrim,
Love
On the holy battleground of life 

Where there are bleeding men
Who are calling for a sacred drink, 

A gentle word or touch from man
Or God...

From Thomas Merton, a 20th-century Cistercian monk (2):

All the worst sins are denials and rejections of love, refusals to love. The chief aim...is not to sin against love.  

[A] total surrender to the power of love [i]s the sole basis of spiritual authority...So many Christians exalt the demands and rigors of law because, in reality, law is less demanding than [love].

(1) The Subject Tonight is Love: 60 Wild and Sweet Poems of Hafiz (1996, 2003)
(2) Mystics and Zen Masters (1967)

Play of the Hand

Most often we do not get to choose the cards we are dealt; but we do get to choose how we play them. Its all about the play of the hand. And its often spiritual guidance that best directs us. Some selected guidance that speaks to me right now:

Jeremiah 6:16 

Stand by the crossroads and watch,

   and ask for the ancient paths,

Where the good way is,

   and walk in it. 

Isaiah 43:18 

Do not call to mind the former things,

Or ponder things of the past.

Behold, I will do something new.

Now it will spring forth;

Will you not be aware of it? 

Psalm 73, Excerpts 

My flesh and my heart may fail,

But God is the strength of my heart

   and my portion forever... 

[A]s for me, the nearness of God is my good;

I have made the Lord God my refuge. 

Psalm 139, Excerpts 

You scrutinize my path and my lying down,

And are intimately acquainted with all my ways.

Even before there is a word on my tongue,

You know it all... 

For You formed my inward parts;

You weaved me in my mother's womb.

I will give you thanks

   because I am fearfully and wonderfully made.

Wonderful are your works,

And my soul knows it very well. 

Psalm 23, Excerpts 

The Lord is my Shepherd,

   I shall not want.

He makes me lie down in green pastures;

He leads me beside quiet waters.

He restores my soul. 

Psalm 131, Excerpts 

Surely I have composed and quieted my soul;

Like a weaned child rests upon his mother,

My soul is like a weaned child within me. 

Psalm 16, Excerpts 

The Lord is the portion

   of my inheritance and my cup;

You support my lot.

The lines have fallen to me

   in pleasant places;

Indeed, my heritage is beautiful to me. 

You will make known to me the path of life;

In your presence, is fulness of joy.

S&P On the Downgrade: Leadership Matters

Organizational leadership matters. It is the pre-eminent factor in an organization's success. And its failure or weakness most often means the failure or weakness of the enterprise.

Whether we are talking about rating agencies or equities analysts, their role and responsibility is to clear-mindedly and straight-forwardly make well-informed assessments of the strength of an enterprise, their operational and financial strengths and weaknesses, and their ability to meet certain performance expectations or debt obligations. And one of the key assessments in any analyst's report I've ever read--or at least a key assessment to informed investors--is the strength and effectiveness of leadership. (I invite friend and retired Wall Street analyst, Marc Schulman, to expand on this in the comments section.)

So, after S&P announced its downgrade of U.S. debt, and after the disagreement and anger pointedly addressed at S&P for their bold and well-explained judgment, they rightly responded with what the NY Times called "a full-throated defense of its decision." And the defense was the universally acknowledged dysfunction and failings of US political leadership evidenced yet again in the "debacle" of raising the debt ceiling--a dysfunction largely the result of the bitter, partisan divide and the absence among some ideological zealots of the requisite statesmanship and willingness to indulge compromise.

From the NY Times:

A day after Standard & Poor's took the unprecedented step of downgrading the creditworthiness of the United States government, the ratings agency offered a full-throated defense of its decision, calling the bitter stand-off between President Obama and Congress over raising the debt ceiling a "debacle," and warning that further downgrades may lie ahead.  

In an unusual Saturday conference call with reporters, senior S.& P. officials insisted the ratings firm hadn't overstepped its bounds by focusing on the political paralysis in Washington as much as fiscal policy in determining the new rating. "The debacle over the debt ceiling continued until almost the midnight hour," said John B. Chambers, chairman of S.& P.'s sovereign ratings committee. Another S.& P. official, David Beers, added that "fiscal policy, like other government policy, is fundamentally a political process." 

The ratings agency put additional pressure on the joint Congressional committee to find additional spending cuts, tax hikes or both to bring down the inexorably rising national debt. 

Administration officials at the White House and Treasury angrily criticized S.& P.'s action as based on faulty budget accounting that discounted the just-enacted deal for increasing the debt limit.... "The bipartisan compromise on deficit reduction was an important step in the right direction," the White House press secretary, Jay Carney, said in a statement on Saturday. "Yet, the path to getting there took too long and was at times too divisive. We must do better to make clear our nation's will, capacity and commitment to work together to tackle our major fiscal and economic challenges."  

Still, the posturing on Capitol Hill continued[:]  

"Unfortunately, decades of reckless spending cannot be reversed immediately, especially when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground," Speaker John A. Boehner, an Ohio Republican, said in a statement.  

Senate Majority Leader Harry Reid said the downgrade affirmed the need for the Democratic approach, which would combine spending cuts with tax increases.The decision, he said, "shows why leaders should appoint members who will approach the committee's work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S.& P. are demanding."  

---"Amid criticism on downgrades of U.S., S&P fires back--Agency skewers debt ceiling 'debacle,' warns that more downgrades may come," by Nelson D. Schwartz and Eric Dash, New York Times (8.6.11), as reported on MSNBC.MSN.com.

And the finger pointing continues, the partisan spin and legerdemain remain at center court, and their is no indication that a new sense of statesmanship is coming over those most recalcitrant and ideologically uncompromising. So, it appears it will all have to get still worse before it has any chance of getting better. And there also remains their apparent failure to recognize that the timing of deficit reduction must take into consideration the effect of anti-stimulative measures on a fragile economy, or else recession or worse will have to be added to their continuing failures.

The Onion: Drunk with Power

For you Onion fans out there--and anyone else with a satirical sense of humor--this piece at the expense of Fed chairman Ben Bernanke is just too funny to pass up, whatever your political views. Just click on The Onion, highlighted below. (Thanks to Marc Schulman for sending it along.)

           "Drunk with Power," from The Onion.

On Deficit Reduction & Public Policy

I support deficit reduction and a responsible, accountable budgeting process as much as anyone, anywhere. It is essential, and the future of our nation depends on it. But mine is a politics and social philosphy of pragmatism, nation strengthening, and sharing. It is a politics of continually strengthening all people to help build and contribute to a better economic and societal experience, and it includes compassion and sharing success with all who are truly in need--especially the least fortunate of our brethren, whether poor, infirm, aged or strangers in our land. I believe that's what advanced societies do.

I support reform of Social Security, Medicare and Medicaid; this is also essential. We have to refashion needed social support programs so that they can be carried out within our means. You could add public education as well. But I believe those programs have to serve effectively and cost-efficiently those who need to be served. They have to be cost-efficient based on global best practices and, with the exception of public education, they should be focused on serving only those who really need them and can't afford them. And that would exclude me. All should be means-tested. And fraud must be policed, rooted out, and punished, consistently.

I view these essential programs--Social Security, Medicare and Medicaid--as public insurance for those who can't afford them, not universal entitlements. And in the area of public healthcare, heroic efforts and extraordinary costs in the last year of life--cases of terminal illness or advanced age--now account for 35-40% of all healthcare costs. Extraordinary cost to keep someone alive for another week, month or months is not something we can afford as a nation. For each of us there comes a time to die; let us learn to do it with understanding and dignity. Most such cases should be directed to hospice care. For those who would so elevate the value and public cost of another day at the end of their lives to such a level, there is available private insurance. A much more responsible public trade-off is to better provide or subsidize care for young and working-age people in need.

But I cannot fly false colors, I also support single-payor--government--health insurance for the general population, at the very least as an alternative. Some form of universal healthcare is almost as important to our economy and society as education. But the varied financial interests in the healthcare industry and their political proxies have frightened the public, often those who would most benefit from it, and their combined voices have assured that it's just not going to happen anytime soon. So, pragmatism dictates that we deal intelligently, responsibly, accountably, with the system we have.

Those social support programs and public education are critical to our increasing need for better educated, healthier and more productive sources of skilled labor and intellectual capital--from every corner of society. But the marketplace, by its very nature and dynamics, does not distribute public goods effectively, equitably to all. It distributes them by amount and quality according to ability to pay. Markets insure that those without most often remain without. That's just the reality of it, the way it works. That's why there is the notion and programs called "public goods," those services needed for all to strengthen and protect our people, grow our country, and maintain its stability, those services that only government can provide on that basis.

But let's say more about the whole issue of social and political stability, especially as it is threatened by a shrinking middle-class of decreasing means. We should be mindful of the dynamics of social and political instability, it's causes and potential results, something we have too little experience with to treat seriously. Nevertheless, it is something we should take more seriously, something about which history and so many failed or dysfunctional international states in modern times inform us. And the relationship between failed or failing social support functions and social and political instability is strong. And a signal, a warning of potential issues of instability is a weakening or disappearing middle class.

If these social goods are as important to our economy and society as I believe, then after reforming them as much as possible, making them as cost-efficient, focused and effective as possible, if there is still a budget shortfall--and everything I've read suggests there will be--then taxes must be raised, and first on those who can most afford to contribute more. And while I would likely be among those affected, another 3% or so will not change my life; I paid that in the '90s. So I would count it my duty and privilege to play a larger part in financially supporting those values, and those social/economic goals. That, to me, is also patriotism. (And yes, I also served my country in the military. I was six years an enlisted man, a sergeant in the Marine Corps during the Vietnam War era. Only after did I attend college on the government's GI bill and loans, then law school and graduate business school.)

Then there is the attraction of a balanced budget requirement, which sounds good, but is too often unworkable, or at least too limiting. There have been those times when economic disaster threatened, 1929, 1937, and 2008, and to a lesser extent in every recession, when deficit government spending was important or essential to avoid economic calamity. We ignorantly took the wrong road in both 1929 and 1937, but took the right road in 2008--even if we have a major defit challenge to address as we struggle back toward economic growth. We have to retain the fiscal flexibility to meet the economic challenges facing our country, whatever that may require. And if in the past, the congress has been irresponsible in managing the budget and deficits--and it has, for a long time--then it's time to vote in people who will be more responsible and balanced, not hamstring the congress when it has to lead in those worst of economic times. 

Finally there is the question of timing. Substantial progress on deficit reduction has to move forward, even if it must be in the nature of commiting us to measures that will not take effect for a few years. I say that because that is the warning that most credible economists are now sounding, and a concern I raised in a recent post, "I Have Questions." Anti-stimulative measures--reducing government spending or increasing taxes--at a time when the economy remains weak, even fragile, and the original stimulus programs have run their course, runs a substantial risk of either driving us back deeper into recession or significantly extenting the time for meaningful recovery and job creation. We heard little of this in the government and public debate, but it is nonetheless a significant consideration. Only now, in the last couple of days, is it being made clear that this is a further problem that must be treated seriously as deficit reduction planning moves forward.

Of course, there are many who do not agree with--or don't understand--the economic importance I place on these social programs and education, and the responsibility, the duty, we have to pay our fair share of taxes to support them. It is part of the price and privilege of sharing and growing in the American experience, the American dream. I'm sure many of those folks are as sincere and convinced of the rightness of their views as I am of mine. But as a former corporate executive for 20 years, I have become  convinced of their importance to meeting the increasing demands of global competition, the need for enhanced capability and increased contribution at all levels of the talent pool, and to the stability and happiness of an advancing society.

Now, as a 21st-century man, and having lived the life of American possibilities for almost 65 years, I also want to be part of the next step in providing for the economic and social advancement of American society, for increasing the breadth and depth of access to opportunity, to education, healthcare, and retirement security, and for broadening the sense of civic responsibility and accountability. That means a strong economy is essential, as is budget responsibility; but it also means that government must play its part in providing the necessary public goods equitably to all, and we all must recognize the duty and necessity of financial support that falls to all who have benefited from  them.