Sunday, November 30, 2008

Littering: An Unacceptable Social Plague

Even though it's not generally considered a major problem in most circles, one of my biggest pet peeves for a great many years is littering, all kinds of litterering, but especially that involving cirgarette butts and chewing gum. I know society has more important problems to deal with, especially now, with our poor national economy, high unemployment, large number of home foreclosures, and financial crisis, as well as a continuing high level of serious crimes. However, I'd still like to see a comprehensive, well thought-out and effective action plan with teeth developed and implemented at a number of different levels. Our ultimate goal, though realistically it will not be easy to achieve, should be to eliminate littering permanently as a significant issue in this country.

Littering is a very meaningful problem for many different reasons. First of all, it is very unsightly and has an adverse impact on our ability to fully enjoy the scenic beauty of our country and the attractiveness of the places we work, live and shop. To me this is reason enough for our society to pay good attention and act on this issue. However, there are several other important reasons. Studies demonstrate that littering can often be harmful to wildlife, which can mistake litter for food. It can also be a big nuisance and even harmful to us. Accidently stepping on discarded chewing gum is one of the biggest nuisances to my mind. Stepping on a discarded banana peel can cause one to slip and fall, and potentially sprain or break a leg or hip, especially for elderly people.

There are three additional fairly obvious reasons why littering is an issue worthy of more attention. Picking up litter can cost state or local municipalities a significant amount of money, to the extent unpaid volunteers or prisoners cannot be recruited to do the job. Cigarette butts not completely put out and thrown out of vehicle windows, or dropped by pedestrians on a street can cause, and have caused, dangerous and expensive fires destroying homes and businesses and occasionally leading to human and pet casualties. Finally, littering is completely unnecessary and represents a careless, anti-social and selfish act. Afterall, trash cans are generally available and most cars have ashtrays.

Some facts may help support some of my points. According to the non-profit group Keep America Beautiful, cigarette butts account for as much as one-third of all litter in the U. S. 370 billion filtered cigarettes smoked in this country each year result in 135 million pounds of butts littering the landscape, particularly on city streets, parking lots and on our beaches. (The significance of the filters is that they are made of a plastic-like material called cellulose acetate which is not biodegradable.) In terms of the environmental impact of littering, studies show discarded plastic bags can be expected to last as long as 10-20 years, aluminum cans 80-100 years, glass bottles an incredible 1 million years, and plastic bottles "indefinitely."

A Texas study concluded that prime litterers are males, all youth under 25, smokers, and frequenters of bars and fast food restaurants. Most offenders who are caught apparently settle out of court. For limited littering, offenders typically face a monetary penalty depending on proven income and/or a specified number of hours picking up litter or other community service. Jail is a very rare punishment.

Based on my limited research, littering is a social activity we generally learn from parents and pass on unconsciously to children. The existing presence of litter is a influential instigator of more littering. Lax law enforcement due to higher priorities and inadequate police and security staffing is reportedly a contributing factor. A residential area primarily consisting of home owners typically has less littering than an area where home renters predominate. Litter laws, enforcement efforts, and prosecutions definitely help to curtail littering. None of this surprises me.

What more can be done? Litter control is usually, and should be, a local or state issue, as opposed to federal. Nevertheless, the President-Elect could in his inauguration speech or subsequently in a press conference spend a few minutes to outline an initiative to work with state and local authorities to come up with a limited cost, coordinated effort to compile and distribute a listing of litter control successes that have surfaced in various states and communities. It wouldn't have to be a federal project. President Obama could propose that the state governors handle this and advise him in due course how the federal government could play an effective supporting role, without any substantial financial contribution. His support and involvement could add needed leadership and visibility to a government sponsored anti-litter initiative.

It would also be helpful for this initiative if President Obama would declare, in this connection, that the federal government would shortly establish a serious anti-litter "clean up America" campaign implemented by their employees on all federal properties, including military bases, in the country. Private companies should be encouraged to initiate similar programs without a need for government subsidies or tax incentives.

Parents need to rethink whatever littering habits they may have, and the importance of their example as key role models, with a view to favorably influencing the behavior of their children. Churches, community groups, non-profit agencies, and, importantly, the media can play constructive inspirational, educational and supporting roles in this endeavor.

I'd also like to see local government officials, prosecutors and court judges review their anti-litter policies, enforcement actions, and sentencing guidelines, comparing them with other towns and cities which have had more success, and making appropriate adjustments to improve outcomes. Finally, individuals, acting alone or as volunteers as part of a non-profit group, remember there are about 305 million of us in total, can make an important contribution. I think admiringly of my deceased sister who very regularly picked up and carried out other people's litter when hiking and camping in our many attractive wilderness areas. I have tried to follow her good example by picking up and disposing of litter dropped by golfers on a number of public courses I play on. It is both surprising and quite irritating to me that so many golfers, most of them adults, litter so much, when with few exceptions there are trash cans on every tee where most of the littering seems to take place.

Friday, November 28, 2008

Auto Industry Bailout - Supplement

On November 16th I published a post indicating I had very mixed feelings about a federal taxpayer bailout, but could reluctantly support one along the lines suggested by President-Elect Obama with some additional conditions. It now looks virtually certain that bailout legislation will be seriously and urgently pursued, based on a scheduled meeting next week between key members of Congress and the three major company CEO's who will supposedly be presenting their plans for the U. S. industry's rescue and restructuring.

Industry spokespersons over the past week have been claiming that one or more of the big three companies may run out of money as soon as the end of December, much sooner than previously represented and thereby underlining their case for increased urgency for the prospective bailout. I'm skeptical of the validity of the timing claim, but it's indicative of the obviously poor senior management and board of directors performance over many years. As I commented in my very recent post on the pending Citigroup bailout, the Bush Administration and Congress, as well as Obama's transition team, which certainly will be involved, any bailout plan must include a significant number of appropriate key personnel changes on the management teams and on the boards, especially for those members who have been serving for several years or more. This is a no-brainer and hopefully will be acted upon!

The evidence of the incredibly poor management and board performance is everywhere to be found, has been going on for decades, and is definitely not primarily due to the current eonomic recession and financial crisis, though those have greatly harmed the industry and accelerated their present dire position. Of course, one of the more important early evidence components was their overly generous, poorly negotiated labor agreements with the United Auto Workers, which has significantly impaired the industry's ability to compete well with several foreign manufacturers, primarily those in Japan and South Korea, with Toyota clearly being in the lead among those. Another obvious piece of evidence is their sizeable loss in marketshares, their poor operating performance and greatly reduced stock prices in recent years.

I can also point to their marketing and advertising strategies. Earlier this year on a three week trip to the Midwest, my wife and I had occasion to rent a small Chevy Cobalt in Minneapolis. I had never heard of the car before. The Avis representative told me the car would get fuel economy at about 30 miles to the gallon. We liked the car and were impressed that over roughly 4,000 miles of driving on freeways and in towns we actually got an average of 36 miles per gallon. Until watching a football game on TV yesterday, I cannot recall seeing any ads for the Cobalt on TV, or in several magazines and newspapers we subscribe to. Amazing to me! However, on the other hand, I've seen dozens of ads for the Cadillac Escalade, GM's full-size, luxury SUV at a much higher price and much lower mileage. I recognize that the profit margin is probably much higher on the Escalade, but doesn't it strike you that GM has apparently done relatively little to advertise the much more fuel efficient Cobalt for which there must be a much larger market?

GM, Ford and Chrysler management could learn a lot more from relatively successful auto companies like Toyota, Nissan, Honda, Subaru, and Volkswagon, some of whom, like Toyota, are operating profitable auto plants in the U. S. However, we should acknowledge that the foreign owned plants are generally benefiting from running newer more efficient facilities, lower cost non-union labor, and regional tax incentives in places like Tennessee and other southern states. They could also learn from successful non-industry companies like Southwest Airlines, and corporate investors and turnaround entrepreneurs like Warren Buffett and Carl Icahn, respectively.

It won't be long before we'll know the specific shape and structure of the bailout. Hopefully it won't unduly benefit current management and shareholders, there will ultimately be some reasonable returns to the taxpayers from the sale of the government's equity holdings and repayment of any loans, and the bailout will eventually prove successful in terms of a sustainable, profitable, very competitive, though probably smaller auto industry.

Tuesday, November 25, 2008

Citigroup Bailout

Until the last several weeks, a majority of Americans had probably not heard of Citigroup, or at least did not have much of an idea of what kind of company it was. Following recent news about a massive federal bailout, many more now know. What's going on, what should be going on, and what can be learned from this situation?

Citigroup, based in New York, with assets at year end 2007 of $2.19 trillion, revenues of $159 billion, total staff of about 358,000, and an incredible 200 million customer accounts, has been operating the world's largest financial services network spanning as many as 107 countries. The company has been one of the world's largest players domestically and internationally in consumer banking, corporate banking , private wealth management, investment banking, credit card issuance, travel services, and many kinds of insurance. However, their senior management and board of directors have not served them well. The company essentially grew out of control due to poor management and got greatly caught up in the current economic recession and financial crisis. One of their major problems is that, like the case with many other financial industry companies, they've ended up holding several hundred billion dollars of bad, so-called"toxic" assets, which are not worth very much at present.

While Citigroup reported net earnings in 2007 of roughly $3.6 billion, far less than in 2006, they reported a loss of $2.8 billion for the third quarter of this year alone, and no doubt will have a huge loss for the year as a whole. Their stock has fallen from a 52 week high of $35 a share to a low of $3.05 and has recovered a little in recent days to a present level of about $6 a share. As a result, their market capitalization has fallen dramatically. Since it has been a stock widely held by both institutions and individuals, its great reduction in value has had a major adverse impact on investment portfolios across the board. Bankruptcy has been a serious possibility that many experts have felt could have widespread negative repercussions on other large financial institutions and the economy as a whole.

Due to widespread concern with a potential bankruptcy, the Bush Administration, generally supported by President-Elect Obama's transition team, as I understand it, has approved a very substantial federal bailout announced late last Sunday, consisting primarily of a capital injection of $20 billion and a loss sharing agreement on a $306 billion pool of some of their bad assets, under which three government agencies, and we taxpayers, are exposed to $249 billion of bailout costs. The capital injection will be in the form of preferred shares paying an 8% dividend. This bailout is on top of the $25 billion capital injection by the U. S. Treasury under the $700 billion Troubled Asset Relief Program (TARP) announced last month.

Obviously we're talking about a huge amount of taxpayer support to help a very major financial institution which has been poorly managed for at least several years, even though the company reported substantial earnings through 2006. Financial industry and congressional supporters of Citigroup's rescue and bailout by the federal government believe that this action is needed to help restore confidence and stability in our financial markets, to unclog frozen lending pipelines, and that Citigroup is just too big to fail. These supporters may well be correct, but surprisingly there seem to be many very critical elements apparently missing from this bailout. However, I may have just missed hearing about them, because I was trekking in Nepal for half of October.

Missing from my vantage point as a career banker, to start with, is a requirement to provide a compelling business plan demonstrating specific actions senior management will take, and how these should enable the company to successfully compete in the current global economy. The plan should also provide credible financial projections that will allow government negotiators and monitors to calculate what risk-adjusted returns the government can expect for their investments. If Citigroup and its advisors cannot provide a compelling plan with credible projections, the bailout should be seriously reconsidered and perhaps should not go forward without substantive adjustments. But it's virtually certain this won't happen. The bailout will go forward.

Furthermore, what about Citigroup's senior management and its board of directors who, as a group, have performed poorly? Government negotiators decided not to push for the ouster of CEO Vikram Pandit, because he didn't take up his position until last December, although he was there in charge when it became clear that the sub-prime mortgage crisis was brewing. What about all the others? Should not at least some of them be replaced, both on the management team and on the board? To what extent is that happening? It's not, according to an editorial piece in the respected Wall Street Journal yesterday. Reportedly, not a single senior manager or director will be let go as a condition of taxpayer assistance!

A large number of key board members have been in place for many years, and therefore cannot argue they cannot be held accountable. Former Treasury Secretary Robert Rubin has been on Citigroup's board for ten years, for much of that time as chairman of their executive committee. Chairman Sir Win Bischoff has held senior positions in the company since 2000. Six other directors have served for more than ten years. Didn't they know what was going on? Why not?

I trust there won't be any bonuses paid out to members of management for their work in 2008, but that should be checked. There should also be an independent review and appropriate adjustments of senior management salaries, severance payment agreements, and retirement benefits, considering their individual responsibilities for the company's problems. Is that taking place?

What can we learn from this bailout, considering the implications and huge taxpayer costs? First, our government, representing the voters and taxpayers, cannot, and should not, rescue every failing company, even if it's very large and in a key industry. Second, as almost everyone agrees, we need more, intelligent oversight, regulation, and effective coordination with the other major industrial countries to minimize the possibility that a similar financial crisis can happen again. Third, given the widespread belief that Citigroup is "too big to fail," perhaps the government should review existing antitrust laws and enforcement practices to see what steps should be taken to keep companies in key industries from growing too big and dominant. Fourth, since this seems to be a common problem in failed companies, we need to have established stronger and clearer accountabilities, with appropriate enforcement, for board members of public companies. Finally, the new Obama Administration, working with the Congress, needs to put together a prudent plan for how they should deal with any more very large failing companies, including specific requirements for any financial support.

With the Bush Administration technically still in the lead for another seven weeks or so, our federal politicians will gain some good practical experience dealing with the CEO's and their advisors of General Motors, Ford, and Chrysler in the weeks ahead.

Sunday, November 16, 2008

Saving the U. S. Auto Industry

One of the biggest and most controversial issues to be discussed and negotiated next week in Washington, D. C. is whether and how the U. S. taxpayers should help our three major auto industry manufacturers, General Motors, Ford and Chrysler, with a large financial bailout in order to give them a better chance to survive and thereby to save hundreds of thousands of jobs.

GM seems to be leading the very weak industry in lobbying aggressively with federal officials for urgent help, suggesting bluntly in recent weeks that without government aid the company will probably have to file for bankruptcy some time next year, and that this would cause a massive chain reaction causing irreparable harm to the entire industry and consequent further damage to the U. S. economy as a whole. It's quite obvious that the Democratic leadership in Congress plans to move forward with bailout legislation already this week. Senate Majority Leader Harry Reid has indicated he will move forward with a bill which would give the auto industry access to the $700 billion Troubled Asset Relief Program (TARP) approved by the Congress last month to help ailing banks and other financial firms.

The Bush Administration and quite a few Republican senators reportedly will oppose this bill. President Bush instead has urged the Congress to speed up releasing $25 billion in already approved loans to the auto industry and dropping pending requirements that these loans be used specifically to help the industry retool their factories to meet higher fuel economy standards.

President-Elect Obama indicated in a "60 Minutes" interview played yesterday that, while he would not normally support a bailout to any private sector company, these are extraordinary times with our economy in crisis, and he would therefore support federal aid under certain conditions. These would include, as I recall, an agreement by the principal stakeholders (management, shareholders, bondholders, and the United Auto Workers) that would provide the government and taxpayers reasonable assurance that the company should have an ability to operate successfully in the longer term.

Personally I have very mixed feelings about any federal bailout, though I acknowledge that a bankruptcy by either GM or Ford would likely be such that the industry as we know it today would likely collapse. However, even in that case I'm confident that a new smaller and more focused auto industry would arise through initiatives of entrepreneurs and private equity funds. The main problems with a bailout, as I and many others see it, are that it's very difficult to be certain that a bailout will succeed, that much more money will not be needed later, and that it would make it much more difficult politically to say no to other important industries needing bailout assistance.

That said, I'd be reluctantly open to supporting a bailout along the lines proposed by Barack Obama, but with some more substantive stronger conditions. I'd want to have the bailout subject to a limited industry study and an associated compelling business plan written by neutral experts, agreed to in writing by senior representatives of all the stakeholders, and approved by the U. S. Senate and the President. It wouldn't be easy, but that work could be done in three months if put on a fast track by the key players. I'd also want the bailout to include a meaningful equity stake, say 25-40%, for the government on behalf of U. S. taxpayers. Whether it also would make sense to require some interest or dividend returns to the government I don't know, but would leave to the negotiators, and clearly that issue would depend on the specific structure of any deal arrived at.

Finally, while less important than the first two conditions, there should be specific limits to executive management compensation for existing personnel, but not necessarily if new management is brought in. Salary compensation should in either case be relatively modest, but meaningful financial incentives should be incorporated to provide adequate inducements for success.

Wednesday, November 12, 2008

Public Education

Understandably, President-Elect Obama's top priority during the current transition, aside from putting together his White House team and his Cabinet, and the first weeks and months of his administration beginning on January 20th, is working urgently with the Congress to try to fix our dismal economy. Given its great impact on virtually all of us, most Americans would agree with this prioritization. From what we can understand from his recent speeches and interview comments from his newly selected Chief of Staff, Rahm Emanuel, Obama's other senior priorities for at least the first several months of his term include review and probable revision of our military missions in Iraq and Afghanistan, healthcare, energy policy, and public education. I want to dedicate this post to the latter.

It is very hard to argue that our public education system, primarily for K-12 schools, should not be a senior priority for our next president. In February 2005 Microsoft founder Bill Gates at a conference of the National Governor's Association went so far as to say that "Training the workforce of tomorrow with today's high schools is like trying to teach kids about computers on a 50 year old mainframe." Strong words, but given his stature they deserve serious reflection. I don't know, but suspect he thinks the same comment would still apply today.

What's the main evidence that we have major problems with our about 95,000 K-12 public schools in this country, especially in our larger urban schools? To start with, we have high drop-out and unacceptably low graduation rates in too many schools. In a recent year only 48% of students in one of the country's largest school districts, Los Angeles Unified, graduated within four years of starting as freshmen! That's terrible. My research indicated that 75-80% of the 2.2 million people in our federal, state and local prisons a few years ago were high school drop-outs! That's costing us a fortune in cprison and other related criminal justice expenses. Our students are in general doing poorly in critically important math and science classes and, reportedly, are doing worse in test results than students in many of the other industrialized nations we are competing against in the current global economy. Apparently as many as 44% of 9th graders in L. A. Unified a few years ago flunked beginning algebra classes! We should be very concerned with that.

What's causing these very poor and unacceptable results in many of our schools? As a great many administrators, teachers and parents know, the causes are many and they have been widely discussed and written about. Some of the main causes include overcrowded classes, inadequate school facilities, teachers who are not fully qualified, starting teacher salaries which are too low, unmotivated students, negative impact of inner city gangs, poor classroom and schoolyard discipline, and insufficient student fluency in English. However, in my opinion, equally important causes include poor parenting and expectations for student achievement by parents, administrators, and teachers which are too low. Funding inadequacy may be a factor to some extent, but I'm not yet convinced it's really a major factor relative to most of the others mentioned.

What should be done to correct the situation we have? As one would expect, there are many different opinions. Some sincere people believe the primary need is just to fully fund the No Child Left Behind Act (NCLB) of 2001. Others say eliminate the U. S. Department of Education and leave education up to the states and local administrators. Neither of those would really accomplish much of what is needed. President-Elect Obama made a rather compelling speech on education in Dayton, Ohio on 9/9/08. I support many of his ideas. Here is my partial take as a former student in California public schools many years ago, parent of two children and grandparent of two children, all of whom have attended public schools in California, one who has family members and close friends who are teachers in K-12 public and private schools, and who has done a fair amount of research on the subject:

1. Determine how we can save a great deal of money and make our current system much more efficient and streamlined by examining whether we really need all the bureaucratic layers we now have in place and giving more authority and accountability to school principals and teachers.
2. Make an investment in quality early childhood education, initially at no cost to low income parents and partially subsidized for middle income parents. (I believe high income parents to a significant degree already provide this to their young children.) This should give all children a much better start as they enter K-12 schools.
3. Make sure that all math, science and technology teachers have the appropriate educational and training qualifications to effectively teach these subjects. Right now too many teachers apparently do not have the right qualifications. For example, many majored in English, history or sociology in college, yet are teaching high school math without an adequate math educational background.
4. Increase starting salaries for teachers, now averaging $30,000 to $35,000, excluding $10,000 to $12,000 in value of benefits granted, by 15-20%, especially for fully qualified and experienced math, science and technology teachers. One of the reasons for this is to attract better teachers who can make much more money in the private sector in many cases. Another reason is to reduce high teacher attrition, which is very costly for the school system. Also seriously consider instituting a reasonable merit compensation system for high performing teachers to be administered by the school principal, with awards perhaps subject to concurrence of one or two school board members.
5. End the current still common practice of social promotions under which undeserving students graduate or are promoted to the next higher grade, misleading parents and diluting the value of a diploma.
6. Establish a clear written code of conduct for students to be posted on school bulletin boards and distributed to parents or guardians at the beginning of each school year. Code violators should be subject to suspensions from classes, school activities or school for a short, longer, or permanent term, depending on the gravity of the offense and the number of prior violations.
7. Parents should also be provided with a letter from the school principal advising specifically what is expected and recommended of them to help their children get a good education. Issues to be covered should include such as homework completion, adequate studying, getting adequate sleep, limiting time watching TV and playing video games, participation in parent/teacher meetings, and communicating their educational expectations.
8. Extend school hours by 1-2 hours daily to provide more time for teaching, using the school or public library, and study/homework completion at school, where there probably are fewer distractions.
9. Try to set up week-end and summer internships with local companies and non-profit agencies to provide work experience, income, and career planning opportunities for students in good standing.
10. In concert with parents and local city officials try to identify mentoring and tutoring resources for needy students, especially those with one-parent and recent immigrant families.

Schools should also work with parents, city officials and the local police to see what more can be done to minimize gang and criminal activities in or near the schools and residential neighborhoods. This is usually not a problem in most suburbs and smaller towns, but it's definitely a big problem in most larger cities, especially where there are sizable minority and recent immigrant populations. Once most, if not all, of the above steps have been taken and allowed to work, we should determine what additional funding, if any, might be needed and what sources might potentially be available.

Wednesday, November 5, 2008

Post-election Reactions

I was not at all surprised that Senator Obama won to become the President-elect, but I didn't think he would win by that huge of an electoral vote margin. As almost everyone knows, he won big for several rather obvious reasons. The majority of Americans have been very disappointed and unhappy with the Bush Administration, as evidenced by the historic low public opinion polls for the President. Senator McCain had difficulty disassociating himself from the President, given his status as a Republican, his voting record in the Senate, and his consistent support for the widely unpopular and very costly Iraq War. Thirdly, the recent emergence of our depressed economy as the most important issue in the minds of the great majority of voters, and his inability to convince most voters that he had an effective plan to turn it around, greatly hurt him.

However, not so well known, perhaps, a very important factor in Obama's victory, as I alluded to in my previous post, was the widely acknowledged view that Obama's team ran one of the most disciplined and effective presidential campaigns in recent memory. McCain's team did not. The well-known conservative political commentator, Bill O'Reilly, on his radio show yesterday said McCain's team conducted a "chaotic" campaign, especially in dealing with the media. In part, O'Reilly apparently came to this harsh conclusion because of the team's erratic and too frequently negative ad focus and their shielding of Sarah Palin from the media, presumably because she had the questionable performances on one or two major media interviews, especially the one with Katie Couric on September 24th. I know there are differences of opinion on this, but I'm one of the many who think his selection of Palin as a running mate also had a net negative impact on his campaign, even though it apparently energized many in the conservative wing of his party. In my view, there were a number of stronger candidates available, including Governor Mitt Romney.

As was broadly expected, Obama gave a very appropriate and effective victory speech last night, acknowledging that he and his supporters have a great deal of hard work to do in the months and years ahead, that progress in fulfilling campaign promises will take time and require a substantial level of bipartisan support, but expressing confidence that working together we will "get there" and succeed. I was also very impressed with McCain's concession speech and President Bush's fairly brief remarks from the Rose Garden this morning. They both pledged full cooperation for the upcoming transition and, in McCain's case, in trying to work with the new administration in solving many of the country's problems from the Senate. Though one would expect that at a time like this, their remarks were gracious and positive, and good to hear. It gives Americans and our friends abroad reasons to be cautiously optimistic about the future.

All of that said, Obama faces a highly challenging period over the next several months, a period filled with high expectations by his followers. He will have to carefully balance those expectations with the financial and political realities on the ground. There will be little time for rest and relaxation. I would guess that his initial priority is to select a White House Chief of Staff and immediately thereafter his Cabinet, the three most important probably being his Secretary of State, the Secretary of the Treasury, and his National Security Advisor. Current Treasury Secretary Henry Paulson has made it clear he would like to have his replacement available as soon as possible to work closely with him on the federal plan to rescue our financial markets and our economy in general. I hope Obama's new Treasury Secretary takes him up on that.

It is a very historic time, and few would disagree that President-elect Obama will shortly be the most important and influential person, not only in the country, but in the entire world. Aside from his staffing, his top priority must be our nation's economy. Next, I'd think it would be meeting with his national security advisors, military leaders and General Petraeus to discuss our missions and strategies for Iraq and Afghanistan, and combating worldwide terrorism. I'm sure he'll early on want to meet with the leaders of all our major allies abroad, but another top priority must be to try to mend our critical relationship with Russia, given our mutual interests in so many important areas, including nuclear non-proliferation and fighting terrorism.

It will be extremely interesting to follow what Obama does and how he and Joe Biden perform. I'm certain he will not meet the expectations of all his constituents, but I think he has a good chance to be successful, particularly if he is able to get a reasonable level of support from congressional Republicans on major legislative initiatives.

Sunday, November 2, 2008

Presidential Election Conclusions

The great majority of political pundits think Barack Obama will be our next president. I agree with them. The great majority of American voters seem to be increasingly tired of two long years of campaigning, much of it negative, and the incredible levels of fundraising we have seen, and will be glad the election will be over after November 4th. I agree with them as well.

I've also been concerned with the many campaign promises made by both Senator Obama and Senator McCain that they most likely will not be able to deliver on because on their own they don't have the constitutional authority, might not have adequate bipartisan support in Congress, or the needed federal funding availability, given the huge and growing budget deficit, worrisome national debt level, our very weak economy, ongoing expensive war commitments in the Middle East, and promises to push for lower income taxes and tax credits. Realistically, whether Obama or McCain win, to govern in this environment, the next president will have to prioritize the legislative agenda, make concessions to gain enough support, and defer action on a number of campaign promises.

And this doesn't even take directly into account several highly important national issues which were not given all that much attention in Obama and McCain's campaigns and the media covering them: Social Security, Medicare and Medicaid, and public education, all big ticket issues of great interest to a significant majority of Americans. It has also been quite surprising to me that there has been so little talk in the campaigns about a substantive reform of our archaic and unnecessarily complex and expensive income tax system. I know that tax attorneys and tax accountants are very happy with the present system, because it provides them a good living. But my guess is that most taxpayers don't see it that way.

While I have some concerns with both candidates, I think the country will be best served by the election of Obama. It is true that he has limited governing experience, but so does McCain. The smooth and effective way his campaign has been managed, supports the view that he is a good manager, with capability to be a well performing executive. A significant number of senior military men and women, including especially Colin Powell, have endorsed him and believe he will be a very capable Commander-in-Chief. That should give us some comfort. Like most presidents, I'm quite confident that he will surround himself with a highly experienced team of national security, military, economic, foreign policy and domestic policy advisors. While he has been repeatedly branded as a socialist and liberal leftist, I believe he will be a pragmatic problem solver, listening to his advisors, and that he will govern from the center, similar to Bill Clinton. His judgment, intellectual capacity, superior communication skills, and his level-headed presidential bearing during his campaign make up for his relatively limited resume.

No one should question McCain's courage, honor, patriotism, or devotion to public service. However, I have been concerned with many of his comments on foreign policy, including his inclination to seriously consider going to war against Russia and moving to kick the Russians out of the G8, the group of major industrialized countries. Instead of provoking the Russian leadership, such as President Bush has done with the expansion of NATO and missile defense systems in eastern Europe, we need to pursue a dialogue path towards strategic cooperation on higher priority issues like fighting terrorism, combating global warming, energy conservation, and nuclear non-proliferation. I also question McCain's continuous, unrealistic insistence that "victory" in Iraq must still be our primary goal, implying that this should be so regardless of costs, whether human or financial. It seems to me, instead, that our primary goal should be a stable, democratic Iraq that can defend itself against insurgents and any external enemies, to be achieved as soon as possible with a very limited level of further U. S. financial expenditures and casualties.

If it wasn't clear at the beginning of these presidential campaigns, it must be clear now, that the U. S. does not have the resources, or public support, to police the world and solve the planet's problems largely by ourselves. We have to work more closely with allies and friends, as well as the near super-powers (Russia, China and India, and possibly later on, Brazil). Going to another war must be a very last resort. We also need to focus more on our domestic priorities, including rebuilding our public infrastructure, energy independence, K-12 public education, healthcare, and putting Medicare and Social Security on a more solid financial footing.

The next president is inheriting an incredibly serious, complex and challenging set of major unsolved problems, perhaps more so than any other president-elect in recent history. To be successful he will need to all his analytical, negotiation and communication skills, a highly effective team of experienced advisors, a great deal of bipartisan support in the Congress, strong support from our allies, the media and the American people, and, yes, also some measure of good luck.