~synthesis~

threeway anyone?

My last post about the Sovietization of America and the comments by J.R. and Erin got me to thinking about multi-party (vs. one or two-party) politics:

One-party politics is a sham. But it is also the closest thing to an ideal government provided you have the luxury of an integrity-filled, un-bribable, benevolent dictator. If you don't have that, it's a false democracy, and just plain sucks.

Two-party politics is by definition polarizing. There is no way for one to prevail over the other if they are so similar that it's hard to tell them apart. Each of the two parties has to stake out ground that is sufficiently different from the other that the constituents have a clear choice to make. Further, the issues need to be sufficiently provocative as to elicit powerful emotional responses from proponents of either view (ex. religion, security, abortion, etc.).

Another aspect you might not have thought about - two-party systems make it really easy for special interest groups to form and flourish. The parties themselves help because they've chosen opposing views on highly polarized issues. By promoting and advocating their views, they create a population that is violently for or against the issue, and the special interests get to prey on these people for funding and activism.

Two-party systems are shockingly divisive, you only have to look at the last presidential election to see proof of this. The combative and vitriolic tone was such that witless citizens actually began to believe the rhetoric, and suddenly the opposing leader became a terrorist or evil incarnate or worse. How sad, and how wrong.

Three-party politics can get very interesting. America saw a hint of this recently with Senator Liberman's defection from the Democratic party. Did you notice how much power he had all of a sudden? In a tight, often deadlocked Senate, he was a deciding vote, and hence actively courted by both parties. One person/party ended up wielding much more power was their due...

Now imagine if there were three parties in the US - D, R, and X. Say that D and R are the incumbents, and X was formed Nov 6, 2008 - just after the presidential election. X is centrist (fiscally conservative and socially liberal), and led and funded by the 18-29 year-old demographic [worth reading this article about shifting electoral tides]. It engages via non-traditional means (no TV advertising, purely e-focused, therefore requiring relatively little funding); it is led by university student activists and leaders, and new economy business leaders. Importantly, it hardly ever competes with either D or R for mind-share, since it doesn't go after traditional R&D issues, nor does it target traditional D&R strongholds (seniors, unions, religious groups, etc.).

In the mid-term elections, X is able to convert 45 D and 15 R seats, resulting in the following mix in the House: D:210, R:163, X:60. Since a majority vote = 218, neither party can win a vote without X, but either D+X or R+X (or D+R) can prevail.

In the end, all three parties will moderate their positions because none of the three can go it alone anymore. The more polarizing the proposition, the more likely it is to be discarded. Ideally, the three parties might also come together to pass anti-lobbying and campaign finance reforms.

Some of you might be thinking "what if it goes the other way" - imagine if instead of X, the new party that formed was G**2 (G-squared). Let's say G**2 stands for Guns and God. They splinter off of the existing R party and manage to get 40-50 candidates elected. Now you have an altogether different dynamic - R becomes the new X (it is socially moderate, and fiscally conservative); in most cases, D and R will work together, moderate their positions, and annex G**2. At some point, G**2 will become completely fractionalized.

Impact of Original D, R & X:

• Both R and D have to court X, but because X is centrist and doesn't care about all of R or D's issues, nor are they competing in R or D's strongholds, R & D will have to moderate their positions to even reach X.
• The special interests and lobbyists are thrown in a tizzy (technical term) - their ability to influence votes is diminished, and they are unable to affect change on issues X cares about by going to their traditional D or R representatives. Those guys simply don't have the votes to make change happen anymore, and X voters don't really spend money on this crap:-)!
• In 2012, if X has been effective, it will vie for 2-3 Senate seats and grow its House base by 4-6 seats. It will maintain its e-engagement model and continue to require minimal funding to reach its audience.

A three-party system would absolutely change the dynamic in American politics. Moreover, this is the perfect time for a well-organized X party for and by the 18-29 demographic to take hold and flourish.

What do you say? Would you vote for X?

nyet nyet...

I read an outsider's view of life in the Soviet Union in 1982 by Edward Crane this morning. 1982 is 27 years, or roughly a generation ago - it seems like so much longer ...or does it?

The Soviet Union was formed in 1922 following a long and bloody civil war. Its formation spawned a massive industrialization, achieving among other things, the electrification of the USSR. Socialism became the policy, along with a one-party system that viewed everyone including their own citizenry with suspicion and mistrust.

Following WWII, the USSR built a mighty military machine and a progressively oppressed society. It viewed everyone not "of the Party" as "them" and not "us." The socialist way achieved a high degree of equality, but very little quality. Over time, the "thems" became most of the rest of the world; and despite becoming an industrial/military superpower, the Soviets were only interested in further domination and suppression. Needless to say, this created enemies among all the "thems," who were united in their "the enemy of my enemy is my friend" mentality. In the end, there were very few countries that the USSR could count on, and most of those were "allies" due to economic ties vs. any sense of camaraderie.

According to Crane, Debra Kocher, and Wikipedia, life there was at best dour. It was permeated with authoritarian thuggery, excessive oversight, chronic despair, alcoholism, religious oppression, dilapidated infrastructure, lack of basic services (like health care, good education), and shortages of food and consumer goods. While not explicit, each also remarks on how the Soviet people's views of life in the West were inaccurate, and "crafted" by their government. Worst of all, all three characterized the Soviet people as being entirely without hope.

The downfall of the USSR was the result of a lack of industrial self-sufficiency, the resulting economic disparity leading to a lack of foreign currency with which to import goods; and then the disaffection of all the States in the Union, leading to their own declarations of independence, and the eventual Soviet dissolution by Gorbachev.

Is there parallelism between then and now? Yes, I think so, but these are still two very different unions. 

In America, politics is a predatory act. Politicians either prey on hope, fear, or ignorance, or sometimes all three. The ideal situation for any politician, Democrat or Republican, is to have an utterly submissive and willing populace. After September 11, 2001, Americans bowed to Cheney/Bush's will, blindly accepted everything they said, and believed their resolution to be true and righteous.

During this time, Americans accepted many changes to their way of life in the name of a secure society. The government was happily given permission to impinge on its citizens' privacy (listening to communications, proliferating security cameras, watching economic transactions); control movement (all air travel and border crossings); declare war on nations; commit crimes on foreign soil; and spend $billions that it didn't have - all in the name of national security.

Americans have also become increasingly xenophobic - everyone else is "them" and only Americans are "us." The idea of building, dare I say it, an Iron Curtain between the United States and Mexico was at the forefront of political debate just a few short months ago, as is the ever-present issue of restricting immigration.

Religion dominates policy issues, whether it is marriage or sex education or abortion or gay rights or curriculum. It aims to control large swaths of political will and social behavior.

American infrastructure is horribly dilapidated - roads and bridges are falling apart, trains are failing, airplanes are poorly maintained, and air traffic control is in a dangerous state. Hospitals are unable (or unwilling) to care for everyone, millions go without health care altogether; schools are in decline, students that do manage to graduate are poorly equipped for their next evolution. The economy is tanking, unemployment is rising precipitously, as is the number of people who have already lost unemployment benefits but remain without work or income.

Is it simply a matter of time before someone comes along with a "just and righteous" value proposition, and the citizens willingly accept a bold new way to salvation, where the "state" controls everything and "provides" everyone exactly what they need?

The recent election might be a ray of hope, though things don't seem to have changed a whole lot. The many economic packages have dramatically increased state ownership of industry (textbook socialism); the ideas of nationalization, excessive government oversight, and foreign intervention have become acceptable; a tacit rejection of the very things that made America the country it once was. A country that rejected oppression (religious or otherwise); that opened its arms and welcomed all people; whose Declaration of Indepencence brilliantly stated:

We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Why aren't these words quoted more often? Why isn't their truth and practice promoted more often? And why isn't their violation called out more often?

Now I don't really believe that America will all of a sudden turn into a variant of the Soviet Union, but I think some sense of why and how this country was formed in the first place needs to be much closer to the front of our minds than mired somewhere in the bowels. 

Let us be vigilant lest we be doomed to generations of constipation...

UPDATE - corrected to reflect correct document - thanks Josh

epic movements

How do you create a global movement? What does it take to start something that sufficiently compels the leaders of governments around world to make the necessary trade-offs on a national scale to make change happen?

About a month ago, I had the opportunity to spend 30 minutes on the phone with Steve Killelea - a very interesting fellow who has taken on an equally interesting mission - global peace. To do this, Steve decided to make peace tangible - define it, quantify it, and build a model that allows each country to be assessed and ranked so that government leaders can see how they compare to each other, and take action.

As our conversation went on, he said that there were three causative factors for peace - income per capita, perception of corruption, and education. So the wealthier, more educated and less corrupt you are, the more likely you are to be peaceful - kinda makes sense. I also learned that the biggest driver of change in a country's ranking is domestic stability; Mexico for example has fallen significantly due to its drug-related issues.

Around the same time, I had the good fortune of previewing the premier of the upcoming NOVA scienceNOW season, where I learned about Luis von Ahn, and in particular this really cool idea he has called GWAP - games with a purpose. von Ahn is a fascinating and rather divergent thinker - he's done some brilliant and powerful work in a variety of areas - watch the NOVA episode when it airs to learn more.

Going back to Killelea's GPI (global peace index), I think it's a bizarrely interesting idea to quantify peace (I would have thought of it like porn - you know it when you see it:-)). First, I think you have to be very sure of your data before you publish - there are some numbers that I do question - the USA is absolutely not 99% literate, nor with a 75% (or less) high school graduation rate is post secondary enrollment 82%. I say this because the countries that this Index needs to influence are those that will dismiss the analysis (which I think is worthwhile) based on any error, and then we're nowhere.

I think for Killelea (or anyone) to create geopolitical change, there needs to be a really (really) big hammer - it's called the power of the people. There's no way you're going to pressure the USA (ranked #83 - remember the three factors - education, corruption and wealth!) to do anything differently without two actions - demonstrate the profundity of their impact, and get their citizens to viscerally understand how widely-felt their country's acts are, and start the change from within (witness recent events in Iran).

To do the first, the Peace Index must include a coefficient of influence for every country that measures and demonstrates the ripple effect on other countries of their malfeasance. So if America does something untoward, the impact spreads well beyond her borders to affect XX other countries. In this way, the whole world can see how interdependent it is, and each country will know just how much it's harshing on everyone else off with its actions. This can be an incredible motivator - both for the one country and those that are affected by its actions.

To do the second, we must humanize. Let's bring Luis von Ahn back into the mix. I think his GWAP is unique in how it connects with people's insides. The two gents need to collaborate and build a game (or other vehicle) that can go seriously viral, that shows people exactly how their government creates un-peace, how it affects them, and then helps them understand and play out approaches to shift the balance so that the country becomes peaceful from within - as Kellelea stated, domestic issues are the biggest driver of changes in ranking - let the people act!

Global change comes from within - let the people be the change they seek.

prodding the prodders

Education is a seemingly complex beast. Everyone knows it needs to be great, there's little argument on this point. Everyone knows that this is an investment with a sure return, there's also little argument on this point. America spends among the most per student in the world, yet student performance is declining there is no argument on this. Is it really that complex - everyone has these intricate views on how to affect change - are they right? Who (beside politicians and bloggers) complains the most about declining academic performance?

It's exactly the people that have caused this problem - our very own employers, colleges and universities! How? By valuing something that no longer has value.

The original business case for an education was simple - you needed one to earn a living. The nature of your living was largely determined by the person that taught you (the master taught the apprentice who worked beside the master and then eventually took over). As the world evolved, the path to employment shifted from proficiency in a craft to an accreditation of core skills. In America that's called a High School Diploma. It's important to note that the value of this "ticket" is not set by the primary/secondary school system, but rather the gatekeepers that guard a student's next steps - employers and post-secondary schools.

One of the reasons parents send their kids to school (and willingly pay the taxes) is because it is the one step that they believe will help their children create a better life, that education is the path towards prosperity. They believe this because it is how they got to where they are, or how they saw others get to where they wish their children to be. They also want their children to be best-equipped to survive and thrive no matter what life or the world throws at them.

Employers have decided a high school diploma is critical, and will prefer candidates that have one. Colleges and universities have decided to accept students based on their high school (plus related standardized test) performance and will rarely if ever take a candidate who doesn't have one.

But. Colleges and universities complain that they have to spend millions (if not billions) to remediate students because secondary schools are not adequately preparing them for tertiary schools. Employers say the same thing - that a significant percentage of high schools students are poorly prepared to enter the workforce. Together both bemoan that fact that even when students have some basic skills, they aren't able to function well in a team setting, deal with complexity and ambiguity, communicate effectively, etc.

ASIDE:

There are schools that can and do prepare their students for the real world, and their graduates are eagerly sought out.

My two favorites - High Tech High (HTH) and Seattle Girl's School (SGS) are among these. Ask Larry Rosenstock at HTH and he will tell you this - creating a great engineer or scientist absolutely doesn't imply that you must sublimate the arts and humanities. To the contrary - it requires that you treat students like one, let them behave like one, and compel them by how much fun it is to be one. To do that, you must immerse them in the sciences and the arts and the humanities - why - because that's what real people are. You accomplish this with an integrated, project-based approach to teaching, where students are committed, respected, engaged, and critical participants in the process. Ask Marja Brandon at SGS and she'll say the same thing.

Graduates of HTH or SGS are "ideal" for colleges, universities and employers alike - they will and do run after them. Their diplomas are not generic.

The change agent - just say "no":

I've argued in the past that we must federalize education, that students are the customer, that we measure the wrong things. I must amend one of these - students are not the customer - they are the fodder. The real customers are colleges, universities and employers. Sadly they are not using their power wisely or effectively.

What if the Chamber of Commerce and Association of American Colleges and Universities decided not to accept high school diplomas anymore? What if they only employed or accepted students from schools they felt did a great job of educating, and not from all schools? Would parents happily agree to fund schools via taxes knowing that it wasn't buying their children enough?

We could start with America's largest employers - the Federal Government (including Defense), Wal Mart and McDonalds. That's only three CEOs (well, two CEOs & a President) to convince.

What if they issued high schools a once-cyle (4 years - grades 9-12) ultimatum? If the incoming grade 9 class in the high school system was not transformed this year (9-10 in Y2, 9-11 in Y3, and 9-12 in Y4), they would cease to accept a high school diploma'ed candidates. This would create an automatic ripple effect to elementary and middle schools.

Faced with dramatic cuts in funding, would schools feel the impetus to change and follow a better path? Money is a powerful catalyst. Just look at how "open" to compromise and negotiations management, partners, dealers and unions alike were when faced with the reality of GM/Chrysler bankruptcy?

The education system is not feeling similar pressure right now. We need it to. Let's all rally the biggest employers in our countries, states and towns and have the leaders of those three or four organizations help us create the change we need.

standards-schmandards

A great friend and brilliant educator recently shared this frame for learning with me - it is about observation, reflection, documentation, and exhibition. This is powerful. It fits well with the beginnings of learning, where each master taught their student according to that child’s unique shape, ability and needs. He or she realized that their pupil would eventually replace them as master, and acted and taught accordingly. Each apprentice paid attention, was engaged and focused, because this was the real world, and they easily saw themselves as adults doing this work. Learning happened.

In time, the shape of learning "evolved" to the point where “schools” were built. They may have begun teaching religion or language, but they soon expanded to contain many masters, each tasked with creating proficiency in their particular subject. As schools grew, overseers defined “a complete education,” and students were required to complete a rigorous and structured process, accomplish a specified result, and then “credentialed” to move forward – either to further education, or the workplace.

This new shape of learning was deemed “better” because it allowed teachers to reach many students at once, and it freed the “value creators” (the original masters) to focus on their work without the "distraction" of apprentices. In time, the politically-anointed “overseers” of the these schools identified “core” skills that could be "extracted" from original subjects, and taught independently of any craft or discipline (carpentry, medicine, farming, etc.). These core skills, literacy and numeracy (which in a bizarre fit of illiteracy are referred to as the "3 Rs"), were deemed of greater importance to educational success (both institutional and personal) than proficiency in a given craft.

The present day education system has "progressed" to the point where teaching is highly specialized, a big part of curriculum is focused on these "core" skills, and in the spirit of scale and mass production, school systems also have an objective and common way of assessing proficiency. Relative performance is deemed to matter more than individual need, ability, or potential; and schools, teachers and students alike are measured on the basis of student performance. "They" have found a "fair" way to do this - it is called Standardized Testing.

Standardized Failure

Each State in America for example has its own standardized tests to judge aggregated student performance. This then translates to how schools get funded, and how teachers and administrators get paid. As anyone would, teachers are forced to make sure students are taught exactly how to do well on the tests. Moreover, the State overseers, knowing that Federal funding depends on performance, have lowered the bar to raise pass rates. The result is embarrassing; students have "passed" these standardized tests, but not learned anything. More than a third require remediation if they are even able to get accepted into college or university in the first place. Worse, despite lowering standards, student achievement has not improved, class participation and attendance are declining, and most of the students and even some of the parents no longer respect the institution.

In effect, teachers are required to treat students on a "micro" basis, so that they have the specific tools to pass their test. There is very little scope or latitude for the teachers in the mainstream school system to create a complete, integrated learning experience with project-based outcomes, like High Tech High for example where students actually publish books, owning all aspects (writing, photography, editing, layout, production, etc.), or Seattle Girls' School, where the students conduct a full simulation of a mission to Mars (from the press conferences to space station docking to landing on Mars), and what many other charter and choice schools do around the country. This "macro" idea of treating a student as a complete person, building an integrated curriculum that develops core skills but also does so much more (create a broader, real world context and deeply engage the student) is simply not possible in the micro-brained-standardized-testing public school system.

But it's actually worse than this - the process of teaching (again a reaction to the tests) is also an issue. Because each teacher is measured on the performance of the student in their class, they in effect compete for the students' attention against other teachers in the school, making the student the victim of this mess. The teacher does this against their better judgment because they understand that rote/memorization/etc. is not true learning, but it is the way their curriculum is developed, and what they're told is the way to create students that pass tests.

Standardized tests are arbitrary judgments that move based on political and economic will and not academic efficacy or the best interests of the student. They force a micro-mentality that is not dissimilar to worst of the commercial world.

Shape of Things to Come?

Is the American education system unique? How about the American automobile industry? Their equivalent of standardized testing is the EPA and trade protection. Knowing that the Big Three couldn't compete directly with foreign companies given their manufacturing (in)ability and the burden of their union contracts, they changed the nature of environmental protection (ostensibly safeguarding best interests of their citizenry) to deem "light trucks" (which are the most profitable segment of the Big Three's portfolio) exempt from emission standards! By allowing the Big Three to blithely continue to produce badly-engineered products and marry them to incentives to make them even more attractive, they solved a problem in the short term, but as the last months have shown, the lasting effect is bankruptcy, job loss, and a massive increase in the nation's carbon footprint.

This cutting your nose off to spite your face approach is a mirror to standardized testing. Combine recent studies that show how uncompetitive American students are vs. their counterparts abroad; the relative power of the union bases; the ease with which politicians "game" the system by altering standards for convenience; and worst of all, the de-funding of schools due to the economic downturn, and you have a perfect storm that is portentous of a dire and ominous fate for Edu Americana...

"I'm not dead yet!"

Want more proof? Can you think of the most pervasive implementation of standardized testing in America? I say it's drivers' licensing. Theirs includes both a written exam and a practical street driving test. Almost every American over the age of sixteen has taken this particular test.

How successful do you think it's been? Do you think Americans are good drivers? Are they safe drivers? Are you TOTALLY confident as a pedestrian, passenger or driver that all the other drivers on the street are completely safe, trustworthy and predictable because they successfully completed their standardized test?

Life and Death is NOT Standard

Now think of your police or fire department, the military, and even your physician. What does their training look like? Are randomly-created and arbitrarily judged standardized tests their approach to creating successful graduates? Emphatically no! They are all required to observe both theory and practice, reflect and understand how things actually work, document their understanding and insight, and then extensively exhibit their proficiency in simulated or real-world settings that provide their masters with the ability to not only judge success, but also fine tune to create proficiency.

When it really matters, we do have a pretty good way of educating people for certain disciplines. There are schools that work this way in this country. Two that I've had the pleasure of visiting are High Tech High in San Diego and Seattle Girls' School; there are others (though not enough others). If you are nearby do visit them - you will be blown away.

Why then are all our children not educated this way? Why then do we resort to standardized tests that are proven failures? We must all rise together to emphatically decry this approach to education "oversight" and implore our politicians to finally do the right thing.

Are there better ways, I think so. This, this and this are where I would start.

uniting divides

Why is abortion such a pivotal and polarizing issue in the United States? Why doesn't the death penalty get the same level of attention? If one is deemed murder, how is it that the other is not?

Pro Life proponents argue that abortion is wrong because life is life; that from the moment of conception, a fetus is alive and human. While I get that capital punishment responds to a criminal act, if life is life, then killing is murder - period. No life (irrespective of how good or bad it is) should be ended, and society is equally guilty of murder if they employ the electric chair or an abortionist. Why then doesn't the Pro-Life movement fight the death penalty with the same vigor?

By the same token, why doesn't the Pro Choice lobby advocate for the death penalty? Why are they not also proponents of euthanasia? Why is their energy not equally applied to all forms of life-related self (or societal)-determination?

Similarly, the equal access to marriage debate (exemplified by Proposition 8 in California) is also polarizing but flawed. If all men are created equal, then how is it possible for a law to discriminate against some but not others? Moreover, how is it possible for a law (Proposition 8) to exist claiming that it protects the sanctity of marriage, and yet there is a sister law (divorce) that facilitates dissolution of this "most sacred institution"? How is giving people a legal "out" to marriage an acceptable compromise, but allowing "different" people to get married wrong?

What about rape? With mandatory sentencing rules, it is possible for someone to get a ridiculous sentence for a relatively benign crime (like Billy Ochoa a drug addict who at 53 was sentenced to 326 years to life for welfare fraud totaling $2,100.00, yes - a lousy $2k), while David Harold E. Earls was sentenced to one (1) year in jail for raping a 5-year-old girl. [This just makes me want to vomit.]

It feels wrong that these other issues have such relatively small bases of support vs. abortion. Don't get me wrong, I'm not saying abortion is OK or trivial, nor am I advocating for one side or the other. I'm just trying to figure out why this one issue, which for decades has dominated American society, politics and jurisprudence, has no resolution, but rather an ever-rising level of angst and vitriol.

Einstein defined insanity as doing the same thing over and over but expecting a different result. This qualifies - both sides are insane and sadly, appear to have no intention of stopping the insanity.

Thanks to J.R., I first re-read sorry seems to be the hardest word, then read a John Baldoni post that J.R. referenced, and then listened to President Obama's Cairo speech. Like John, I was struck by this statement in response to another insanity:

So long as our relationship is defined by our differences, we will empower those who sow hatred rather than peace, and who promote conflict rather than the cooperation that can help all of our people achieve justice and prosperity. This cycle of suspicion and discord must end.

How true.

Is there anything that unites these two sides (Pro Life - Pro Choice) besides the word "Pro"?

I think there is - the unwanted pregnancy; irrespective of how it came about (consensual or otherwise), I believe both sides would wholeheartedly agree that it is a far, far better thing for all if the number of unwanted pregnancies goes to zero.

Then why not work together - Pro Life/Choice side-by-side - to educate youths and adults alike, to offer free and unencumbered (no strings attached) counseling, and to also provide free contraception to those that need it?

Their precedent is Portugal legalizing personal use drugs, causing overall drug use to fall dramatically.

Both sides would have a productive mechanism through which to participate and channel their passion. They would be able to measure success by helping more and more babies in this country and around the world be born to healthy, happy, willing, and prepared parents, thus eliminating the reason for fighting in the first place.

Imagine that.

Then imagine all of us together putting our energy and focus behind the next big issue, and then the one after that... <-- this is democracy in action.

adventures in babysitting

I was listening to The Watchmen on This American Life last weekend - it affirmed my conviction about the sad, sad state of American regulatory oversight. The show is about financial services regulators and attempts to find out "who's to blame for this mess." It determines that one regulator was most "in charge" of many of the companies that failed most miserably.

It reminds me of a post a few months ago questioning whether our government has any regulatory insight at all, and then one that pushes our government to own it's own decisions. Listening to "The Watchmen" brought all this back, identified a potential scapegoat, and I think pointed to the real culprit.

A Fateful Year

In 1989 the Federal Home Loan Bank Board (FHLBB) was abolished by President George H. Bush and replaced with the Federal Housing Finance Board (FHFB) and the Office of Thrift Supervision (OTS). The FHFB regulates the 12 Federal Home Loan Banks, and the OTS regulates the Thrifts (providers of home loans).

Among others, here are some recognizable names that are managed by the OTS: AIG, Countrywide, GE, Ameriprise, American Express, Washington Mutual, IndyMac, and ING. I'm sure you've read about these fine institutions often in the last few months.

Around that same time, Alan Greenspan successfully pressured Congress into not legislating derivatives; and finally 1989 is also the year the Glass-Steagall Act was repealed by Congress.

Missed Intentions

But these were only the beginning. When the FHLBB was abolished, rather than start from scratch, the Administration did the worst thing possible. They ignored why things happened, just assumed it wouldn't happen again, and did the bare minimum. They appointed a new leader and changed FHLBB's name OTS - they did NOTHING else.

The real culprits (as is often the case) are not the front organization (OTS), but rather our elected representatives, who naively assumed that once the crisis was over, going back to business as usual would magically fix everything.

I haven't seen any Senate hearings on their own failings??? Gluttons for punishment that they are, the citizenry keeps reelecting these same culprits over and over again :-(.

What about the regulators?

Here's something I didn't realize: they are funded by those they regulate. Implication - the more companies they regulate, the more money they get. This is horrible!

Worse, when the new leader for OTS came on board, his mission was to expand his pie, and to do that he went on what amounts to a recruiting spree. He was aided tremendously by the fact that financial services companies can choose their regulator if they "qualify." For example - AIG, having learned about OTS' value proposition ("we're really flexible and generous with our oversight"), purchased a small Thrift (worth a mere one tenth of one percent of AIG), and was then able to elect to be regulated by OTS! Worse still, it was in OTS' best interests to keep a hold of as many of the old Savings & Loans as possible, which meant the most lenient regulator was regulating the worst offenders!

Is it any wonder that all of this combined with the creativity and ingenuity of traders, and the "you're only as good as your last deal" performance/compensation mentality, that things turned out the way they did?

So...

Should there be an organization that monitors the monitors? I don't think so - adding management layers never works well. What can we do instead??

First, it's pretty clear that regulators must be independently funded (via tax dollars), and that they must never solicit business (no lobbying or recruiting members). The hard one though is performance expectations (if you are what you measure, then how do we measure them?). Regulators are most effective when they're harmoniously (working well with their "flock") invisible, with their ideal result being a smoothly running machine.

What about real babysitters? A wage is negotiated, and the sitter is paid at the end of the job, provided the house is intact, and the kids are unwounded and asleep. If the sitter is good, then s/he gets more gigs, and because they're now in demand, their fees go up as well.

So... I propose an accelerated pay scale based on continued good results. Say they get 90% of current salaries as base. For every year their community is issue-free, their salaries go up 10% (1st year = 99%). If it remains issue-free in Y2, it's another 10% to 109%, and so on - by year five they're at 145% of base. We  bump it up by another 5% after five years so that the Y6 increment is 15% - then by Y10 they're up to 291% of base <-- not bad! But if an issue arises, they're back to 90% and have to start over. This might seem generous, but wouldn't you want great people in these jobs? You also want to make the pain of failure relevant. Moreover, think of the cost to taxpayers of the failure we've just experienced. The motivation then is to keep getting paid really well and increasingly better, provided the house remains intact, and the kids are safely sleeping.

Will this have the desired effect? I welcome your ideas...

performance anxiety

How will it go? Will all my hard work be appreciated? Was all that extra stuff I did noticed and appreciated? Was I better than the rest? How often might you ask yourself these questions in life ;-) ? How often might you ask yourself these questions at work? Many of us face these questions at least once a year, during our annual reviews.

There's a fantastic conversation between Gillian (an HR professional) and J.R. about employee performance management, what works, what doesn't and whether it makes a genuine difference to both the employee and the organization. It began with an assertion on my part that when organizations grow, they begin to hire people whose abilities and intent only create micro-outcomes. In and of themselves, these micro efforts might achieve (or indeed exceed) their individual objectives, but there's no assurance that they aggregate up to something meaningful for the business as a whole. Sometimes (perhaps too often) they can even detract from the mission. The micro-performers exist because there is supposedly a role for them to play in a big company. Convention dictates that one must have a lot of microbes (sorry) buzzing around doing all sorts of micro-work; it emerges when an organization gets to a certain size and starts believing that it needs microbes because it is now "big" and must have girth (only they call it "gravitas").

About four months ago, I suggested that there was a way for an organization to avoid girth/gravitas and reduce its microbe quotient by focusing on being great vs. growing bigger. But I conveniently ignored performance and compensation. This is of course the subject of many organizational behavior PhDs and I don't presume to know anything, so here goes :-).

Harvard Business Review recently talked about The 10 Most Common Failures of Bad Leaders - see adjacent table. First, wow! Who hired these rubes? Second, not sure about you, but it looks pretty consistent with the failings of non-leaders doesn't it? But since these are "leaders" the failings are even more severe, and in need of more urgent remediation (vs. the peons). So my first take is that this is a really big and hairy problem - it's not simple, it's not clear what the answers are, and it's also more likely that your management is fumbling and bumbling with this. First implication - scary!!  Second and more critical implication: it sucks to be you...

Performance management in smaller companies is simpler - "if the company does well, we all do well (and vice-versa)." It can also be easier to identify the strongest (and weakest) performers and do the right thing.

Some argue that compensating sales people must be done on a short-term revenue basis. I suppose that's true, but it really depends on the business. If there is value to be had from maintaining a customer relationship over time (not always the case) and creating a long term revenue stream for your company, then here's a way to reward those that do best by you and your customers over the long term. But what about the rest of the organization? How do we reconcile team output with individual recognition? Herein lies the apparent rub...

Some of the challenges include employee morale and output; recruiting ability; rewarding your best people and remediating (or culling) your worst; and recognizing that you need both leaders and workers and that both are critical to success.

Scary as this is for me, what about the model the US Armed Forces use? Their total compensation plan is completely laid out, transparent, and visible to everyone. You know exactly where you stand and what you can hope to accomplish either by level growth or tenure. There is also clarity about what you need to do to move from level to level, and the decision to stay at a given level because you happen to like what you do doesn't seem to have as big a stigma as it does in the private sector.

Now what if you combined this clarity with a bonus matrix based on percentage of salary by level (but not by tenure) that is tied to a published company-wide goal of performance. (Example - 20% of our year-over-year revenue growth will be allocated to bonuses" - we will all benefit from our mutual success - we're a team.) And what if there was no individual recognition model (other than promotion) whatsoever? The implication - those people that need individual recognition, and must be anointed with "superstar" status will leave because "they've outgrown you." Hmmm... is that so bad? How often is true and lasting value created by these people? How often do they end up compromising team chemistry?

Would you want to work for a company that was only measured on how the team did? It works for smaller organizations (which common wisdom says are the most efficient and effective and resilient part of our economy) - doesn't it?

I would.