Growth & Justice Blog

A week for reflection and commitment to justice and broader prosperity (and yes, taxes and public investments help do that)

We have this week a confluence of events that ought to lift our hopes and sharpen our resolve to reduce racial and economic inequality in our state and nation,  and to build a more inclusive prosperity.

The hope comes from the momentous coincidence today of Martin Luther King's official birthday observance and a re-inauguration, after a convincing re-election,  of the first African-American president of the United States.    Michelle Obama, a descendant of slaves, is the First Lady of a White House that once was occupied by white slave-holders, and actually built by slaves.   This is a remarkable country, capable of extraordinary self-correction, powerful and wealthy because it is governed by its own people, and stronger yet when ALL its people are empowered.  We can  expect President Obama will build on the theme in his inauguration speech that we all do better when we ALL do better.    While the Obamas have succeeded spectacularly, far too many people of color are still left behind, and economic disparities continue to grow between top incomes and families of all races in the middle-income brackets.

In Minnesota, attention swivels on Tuesday to the release of both a two-year state budget proposal and a major tax system overhual from Gov. Mark Dayton.    Minnesota's prosperity rests on an innovative business leadership, to be sure, but also on a  foundation of public investment, in the form of high-quality public education,  physical public works infrastructure, public health and natural resource protection.   We need to invest more and more effectively in those things, including early childhood education and post-secondary training,  and Gov. Dayton can be expected to emphasize that this broader prosperity and better government is the end we seek, while taxes merely are one of the  means.   Minnesotans understand these fundamentals and have long been distinguished by a commitment to public good, as well as private gain.   Let's try to keep this in our heads as we all get ready to argue over the details.

Dane Smith

 

 

An innovative "two-fer" in health care and higher-ed: Community paramedic program at Inver Hills

The St. Paul Pioneer Press last week highlighted on both its news and editorial pages a splendid innovation in postsecondary training and health care, now being offered by Inver Hills Community College. The new wrinkle is training and certification of "community paramedics," who will provide at-home care for less severe medical needs, filling a gap between regularly scheduled in-home nursing and those expensive trips to emergency rooms by conventional paramedics and emergency responders. Community paramedics would serve only those who don't qualify for home health care and the service could be adapted to regional and local needs. "In rural Minnesota, [community paramedics] may provide vaccinations when the demand for ambulance service is slow. In cities like St. Paul, they could check on patients who recently had surgery or provide routine health screenings in low-income communities," the Pioneer Press reported. An editorial endorsement of this creative response described it as "a homegrown example of the search for productivity gains and efficiencies that will be essential as governments confront growing health care costs," and as a promising effort to "rethink and redesign" both health care and postsecondary education.

--Dane Smith

 

Inequality, education and innovation: U.S. higher on the first, slipping on the other two

Sometimes the anti-tax, anti-government zealots will actually concede that the United States is an outlier in economic inequality and becoming more unequal all the time. But they hasten to insist that this is a function of a meritocracy, and that our weak economic security system and low taxes foster creativity, initiative and innovation, from which all boats will rise.

But during a period marked by historic tax cuts and federal-state disinvestment in education, the U.S. has slipped in average education attainment (largely provided by taxes and government) and there are signs it may be slipping in innovation too.

The U.S. has dropped to 10th on the Global Innovaton Index, behind nations such as Sweden, Finland, Denmark, the U.K. and the Netherlands, all with much superior economic security entitlement. The index is an annual analysis published by Insead, an international business school, and the World Intellectual Property Organization, a United Nations Agency. The index is comprehensive and takes into account dozens of factors, including business sophistication, human capital and research, and creative output.

I like the analysis on these rankings by Education Week blogger Jason Tomassini, who says this:

"So, if we didn't know already, in order to create innovators through education we need to increase rigor in Science, Technology, Engineering, and Math instruction; teach students business acumen and entrepreneurship; and lower class sizes. Get to it!

Oh, and there's another factor we should watch out for: We are No. 2 in the world in video uploads to YouTube. According to the Global Innovation Index, this is a good thing, but I can't see the harm in dropping a few spots before next year." 

Let's allow that there might be a trade-off for public-sector size and private-sector growth rates, and in the extreme too much government and prohibitive tax rates might well stifle creativity and incentive.   I personally think people tend to be more creative and productive when they are relatively secure, and know they will have health care and enough to eat, even if they take a risk and fail. That's how a retired Swedish businessman explained it to me when I visited there three years ago, as I wrote in an op-ed column inspired by his creative analogy of economic efficiency to humane handling of hunting dogs.

--Dane Smith

 

Five Reasons For Optimism in 2012

Five reasons, small and grand, for optimism in 2012:

• Even Katherine Kersten is hopeful. I like much of what the conservative firebrand said in her latest Star Tribune column about the "debilitating hail" of news that emphasizes "crisis and decline" and how American success has been founded on the "virtue of hope." This was a nice break from her relentless negativity about any and all things public and progressive about our nation and state. She missed some points about how Americans were always hopeful for justice and greater equality as well as freedom and business growth. But a little ray of sunshine from KK is wonderfully refreshing.
• A good friend of mine may have turned the corner in treatment for a nasty disease. A big reason health care costs keep going up is that people live longer, and thus more people need more medicine and more doctors during more of their lives. I'll got out on a limb and declare that people living longer is a good thing. Another reason for rising health care costs and increasing under-insurance is expensive financial administrative costs in the health sector. Growth & Justice will produce a study early this year that takes a look a the costs and benefits of a universal and unified system of health care for Minnesota.
• The American people are hopeful, amazingly. Although most Americans overwhelmingly view 2011 as a bad year, a recent Associated Press poll found that almost 80 percent of Americans are optimistic about the future of their own families in 2012, and more than 60 percent are optimistic about 2012 for the country as a whole. The polls suggests that Democrats are optimistic than their candidate will be re-elected and Republicans are optimistic than they will win, but hey, it's all optimism.
• Things actually are getting better for humankind as a whole. As Harvard professor Steven Pinker recounts in his convincing and exhaustive new book, "The Better Angels of Our Nature" (reviewed here), the current era is the safest and least violent in recent human history, and living conditions are improving everywhere. I like his theory about human progress being part of the “civilizing process," a term he borrows from the sociologist Norbert Elias, who attributes it to the consolidation of the power of the state above feudal loyalties, and to the effect of the spread of commerce. In other words: a happy synthesis of capitalism and good strong democratic governments.
• Finally, in Minnesota, we are well governed and our business leadership is better than elsewhere. Our public sector and our private sector are fundamentally sound, despite gridlock in Washington and depredations on Wall Street. I like what a recent Star Tribune editorial had to say at year's end about Gov. Mark Dayton taking us in the right direction, and the state Senate is now under the leadership of a Republican who is openly moderate.

The economic collapse of late 2008 turned out to be as big a hole as we thought and there is lots of room for improvement all around, from redesigning our governments to restoring our public investments in education and public infrastructure to reducing racial and income inequality. Lots of things can and will go wrong. But there's no future in pessimism. See the doughnut, not the hole.

--Dane Smith 

Governments innovate and improve all the time, and sometimes it makes the news

No news is good news, they say.  And in the news business, good news too often is NOT news, or sensational enough to display prominently.  But one distinctive cover page of the Star Tribune’s metro section earlier this month provided a refreshing exception.  The story at the top of the page revealed how nursing homes in the Ecumen chain are improving the quality of their residents’ lives by replacing sedative drugs with massage, music, games, aromatherapy, and other alternatives for pain and anxiety control, in a very encouraging project mostly  funded by a state government grant.  Another article on the page and a large photo described how the Burnsville Police Department is using body cameras instead of more expensive dashboard cameras,  to more quickly settle claims of excessive force and other disputes.  And a third article on the page explained how the city of North St. Paul was planning to save money and improve services by turning its recreational programs over to the neighboring city of Maplewood.  Our new governor and our new Legislature will be leaving no stones unturned in their search for better ways for our governments to do things and to save money.  It’s important to be aware that Minnesota already is blessed with a culture of good government, conscientious public employees and leaders, and a tradition of innovation in the public sector.  Mostly unheralded efforts like the above are occurring every day across the state.  All of us, as the actual bosses of our governments, need to be part of this.  You can add your two cents by contributing your thoughts to the Common Cents project , sponsored by the Citizens League and the Bush Foundation.  Check out their website for an interesting and robust discussion of the further things Minnesota can do with long-term care, with technology improvements and with consolidation and collaboration between governments.

Dane Smith

Michael O'Keefe with budget wisdom

Michael O'Keefe was one of the standouts in  a highly respected state cabinet that came together to help neophyte Gov. Jesse Ventura in 1999, and O'Keefe served ably as commissioner of the Department of Human Services, one of the state's largest and most complex agencies.   He's also had a distinguished career as a foundation CEO  (McKnight) and a college president (Minneapolis College of Art and Design), and he has degrees in mathematics and physics.   So when he talks about state budget crisis realities, one really should pay attention.   Here are some of the standout excerpts from his recent interview with the Civic Caucus on the "Hard Realities of Minnesota's Budget Situation."

•  Address the problem with every tool in sight, but do not dig a deeper hole--O'Keefe described how he was in government for "good years," when they had extra money to spend. "Then we hit a bad year. The budget was good before the Legislature got a hold of it. Governor Ventura had actually put together a very reasonable plan that included some taxes and some cuts, and drew down some  state reserves with a strategy to replace them.
• "Offset medical costs by accepting federal Medicaid assistance, and find efficiencies--In the area of health, O'Keefe advocates taking the federal Medicaid money-over $1billion-"because one of our goals of a state is to have a safety net." The state really screwed up when it cut general assistance medical care, he said. Now minor conditions become chronic or more serious and people will show up at emergency rooms that cost someone--the state, the county, insured people-- much more than if they had received preventative care.
• The health care system will need a crisis to change--He has concerns about the system of care, and its methods of payment. "A third-party-payer marketplace is never going to work unless you have substantial restructuring. We have a system that rewards doctors on volume, on throughput," and on the cleverness of their support staff to classify what it is that went on in the exam room. He described a doctor who told him that whenever he performs a service he cuts and pastes a description for the service directly out of the Medicare guidebook, which guarantees he'll be reimbursed. Instead, O'Keefe said, the state needs more systems like Mayo where doctors are paid salaries.
  
• The state may not need two public post-secondary systems--A participant asked whether the state government really needs two higher education systems. "I don't think so," O'Keefe responded. "Take a look at the administrative over-structure-it's huge." O'Keefe described his hope that new leadership at the University and at MNSCU will be willing to engage in a discussion about reducing the aggregate administrative overhead, admitting that it would be enormously unpopular with their constituents but nevertheless needs to be done."
  
• Post-secondary costs are being driven up faster than inflation--Higher education costs have been rising at double the rate of inflation for 25 years, he said, and that's not sustainable. Part of the cost-driver has been on the administrative side, and part because of increased complication caused by increased requirements of the federal government. "But a huge increase has been a market phenomenon driven by students and families: they want more, and they're willing to pay for it."  Expectations have increased. "You can't sell a dorm room with three beds anymore. What students and their families want is an apartment suite with living area, kitchen, laundry etc. And, they're willing to pay for it. Witness private developers who are putting up such style dorms and making them profitable."  O'Keefe recalled many years ago that The George Washington University was considered "middling" in terms of quality. They brought in a consultant whose recommendation was that they double tuition. They increased it by 40 percent in the face of deep concern that  applications would go down; instead they went up by 60 percent. "People were willing to pay more because of the perception of quality implied by the higher tuition."
• Virtual education has significant, widespread potential--To a question about virtual education, O'Keefe said he thinks it has huge potential to bring students rich experiences without having to first bring them together in person. At the college of Art and Design he described a professor who taught via the internet from South Africa. The students were satisfied, he said, with a balance of internet-conferencing, faxing images to each other, and working face-to-face in groups on campus. "I was very surprised; it resulted in a quality experience." Even so, the application of technology has increased costs: "So far when new technologies have been added they haven't reduced costs, as some had promised. I'd argue you have to change the system of teaching for that to happen."

There's substantially more from O'Keefe on the Civic Caucus website,  including a provocative challenge to rethink  whether Minnesota's spending on prisons and lifetime incarceration of sex offenders can be sustained.   We're proud to have Michael on our board of directors at Growth & Justice and as a significant  influence on our policy thinking.

Dane Smith

Post-ACA situation for Minnesota still fuzzy, but getting clearer

Some day,  the acronym "ACA" will be as commonly understood in everyday conversations as the FBI or MnDOT or FEMA.    But there's still a whole lot to learn about the Affordable Care Act, the sweeping federal health-care overhaul that eventually extends coverage to as many as 40 million previously uninsured Americans.

I had the privilege of attending a presentation on the subject this week by one of Minnesota's most respected leaders in the field, Mary Brainerd, CEO of Bloomington-based  Health Partners, and sponsored by KeyStone Search, an executive search firm.   Brainerd also has been a key  leader in the Itasca Project team, a far-sighted group of top business leaders who tackle broad issues affecting Minnesot'a quality of life and economic competitiveness.

Among the key takeaways in Brainerd's presentation:   

• The important principle that everybody is in the pool _ well people and sick people _ "marks a turning point'' toward "solidarity'' in the U.S. system.   The federal reform gets there with individual mandates, need-based subsidies, insurance reforms, state insurance exchanges and expanded Medicaid coverage.
• Although more coverage of an additional 35 million to 40 million Americans by 2019 is the goal, and it might mean lower bottom-line costs for some or many Americans, the price tag for the federal responsibility could be as high as $1 trillion over the decade.    And "there are a lot of elections and budgets between now and then.''   
• Aside from the business of financing health-care equitably and universally, all of us need to tackle the behaviors that threaten our national health.   Obesity rates and diabetes are  becoming epidemic and fewer than 10 percent of Americans really adhere to the obvious and basic behavioral regimen that improves health: fruits and vegetables five times a day, no smoking, moderate alcohol intake, and regular and vigorous exercise.

Brainerd promised on her last PowerPoint slide that in the cause of "Real Health Care Reform,'' she and Health Partners would "advocate for it,'' and "be an example of it.''

Minnesota policy-makers have a lot of work to do between now and January to figure out what legislation, if any, is needed to follow up and complement the federal legislation.    For a primer on Minnesota angle, here's an at-a-glance guide to Minnesota-specific impacts of the Affordable Care Act  and there's more data and information at the federal main page, HealthCare.gov 

Dane Smith

Historian Alan Brinkley on right-wing populism and "fighting back''

Eminent historian Alan Brinkley (Columbia University professor, an authority on 1930s populist movements of the left and the right and the New Deal, also son of legendary TV anchor David Brinkley) was in town this week and offered some timely wisdom at the Humphrey Institute about the conservative populist uprising.

Brinkley is himself a progressive and a voice for "pragmatic liberalism.'' Although an admirer of President Obama and his agenda, Brinkley compared him unfavorably in some respects to Franklin D. Roosevelt, noting that FDR fought back against a right-wing populist revolt to his progressive agenda with passion and "almost incendiary'' rhetoric, sweeping to reelection in 1936. 

Brinkley said Obama has been too cool and passive and there has been "no effective rebuttal to many of the dishonest claims made by opponents of the health-care bill.'' And he suggested that for Obama, this is "not a time to conciliate, it's a time to fight.'' 

I liked his candid repsonse to a question I asked, as to whether progressives should be more clear about the growing economic inequality in the nation, and more honest about growing the public sector to provide more economic security, as insurance against private-sector abuse and failure. Brinkley said "progressives should talk about inequalities and (conservative) policies that have made (inequality) greater... Taxes do have to go up.'' 

But he added: "Nobody wants to be raising taxes and nobody wants to talk about inequality because nobody is sure how to fix it.'' 

— Dane Smith 

Less Government? We Tried That. It's Not Working.

The Star Tribune's front-page story today finds that "less government'' is the overwhelming consensus "vision'' for Republican gubernatorial candidates. Peggy Lee and most Minnesotans want to know: Is that all there is?   

Leaving aside that this mantra sounds more like hard-right, activist-energizing radio talk than inclusive vision casting — and has to be extremely disappointing to hundreds of thousands of moderate and progressive Republican voters — we need some context here.   

The Price of Government, an official state Minnesota Management and Budget measure, shows that we DO have less government over the last decade, ever since the no-new-taxes religion, like some southern invasive species, got a hold on the North Star State. (See page 13 of the PowerPoint presented at the capitol last week by State Economist Tom Stinson and State Demographer Tom Gillaspy).

The bar graphs clearly show that our governments are using about two percentage points less (15.5 percent in 2008 compared to about 17.5 percent through the 1990s) of our personal income share than those governments were spending when the economy was actually doing better. Huge income tax cuts in 1999 and 2000 left us with chronic  budget crises, and the promised payoff in sustained, tide-rising economic growth didn't materialize, either.  

Wealth concentration at the top got worse, bridge and road conditions deteriorated, public school course offerings were cut, and thousands of working low-income folks lost their health care. And our economy is slumping and beginning to underperform the national average on some key indicators.  

We surely could use some more judicious restructuring and redesign of how we do our government work. But the basic things government provides are essential for our shared prosperity and quality of life.  

NOTE: The Price of Government measure is one of the most comprehensive of all the measures we have to describe the size and role of government. It counts state and local government revenues as a percentage of total income and therefore accounts for inflation, population growth and economic growth. It was instituted at the behest and with the approval of business groups in the late 1980s.

— Dane Smith

Minnesota Poll's progressive majority on health care

As a former reporter for the Star Tribune who wrote scores of news stories based on the Minnesota Poll, I am very familiar with the science of polling and its limitations,  and the crucial importance of context.    Here's some important context for the poll results and the headline that declared "Obama's support declines sharply.''   

 A drop in 10 percentage points on job approval, after the "honeymoon" and late in a president's first year,  is typical, but especially if he's mounting the most sweeping social and economic reforms in decades during the most serious recession in a century.    The coroporate bailouts and continuing war in the Middle East have  angered the left, the bailouts and the expansion of a public role in health-care have infuriated the right, everybody's still worried about their personal finances, and still the president's approval rating is about 20 points higher than his predecessor's.

The concerns about health-care transformation undoubtedly are an overriding factor but it appears that the dissatisfaction with Obama's plan comes from many liberal folks who wish he'd gone further.   Although Minnesotans disapprove of his overall "handling" of health care (45 percent to 39 percent),  there is clear approval of the  "public option'' despised by the right-wing critics (51 percent to 37 percent).   Most in the poll  approve a law requiring coverage (54 percent to 37 percent) and a slight plurality (43 percent to 40 percent) actually favor the overall changes being supported by Obama and his congressional allies.   Most important,  perhaps, the poll showed that about 40 percent of Minnesotans are either worried about losing coverage or are currently uninsured.

We've often made the case that there is a sustained majority in Minnesota who favor the moderate-to-progressive position on key economic and tax-budget issues.   These key issues include support for public education, transportation, public health-care, environmental protection and most of the worthwhile vital investments that our governments provide.    This majority also favors  a fairer and reasonably larger tax burden on those at the top of the income scale,  and polls show it opooses an  inflexible "no new taxes'' orthodoxy.

Dane Smith