Scandalous Reflections

The news is dominated by two scandals, one each in the public and private sectors. While "sobering" (one of the president-elect's apt descriptors), they are hardly surprising.

Bernie Madoff's asset management business is but the latest Ponzi scheme to fall apart, with the distinction that his fraud operated for at least a decade - a remarkably long duration - and sucked in A-list investors. Financial markets put a premium on cash right now, and undoubtedly the dramatic ebb tide of cash flow over the last three months made Madoff realize the inevitable end was at hand.

The Madoff scandal illustrates the limits of both public and private checks and balances. There are news reports of Madoff being reported to the SEC repeatedly, and yet nothing was done. Sophisticated investors were supposed to do their homework, yet nothing was done by the victims or their advisors. Reportedly some advisors kept their clients away from Madoff, who refused to discuss investment strategy or disclose true financial records. Transparency and accountability would have shortened the fraud's duration, but sometimes enforcing these essential principles requires backbone, forcefulness and fearlessness of being unpopular. And how many humans posess such strengths, either in government or the private sector? Democracy and capitalism are limited in their speed of self-correction by the frequency of human fallibility.

One common sense aphorism I've often used is "if it sounds too good to be true, it probably is." Homeowners and investors alike were lulled into an uncritical stupor by perennially rising asset appreciation. The good times were too good to be true, and now many are paying the price (me included - and I've used the phrase "don't confuse brains with a bull market" many times in the past).

Meanwhile, the Blagojevich scandal is another reminder that greed motivates both public and private leaders. Surprising? Not really. But the next time you hear a gratuitous screed against corporate greed, just reply "What about Blagojevich?" There are no genetic differences between those in the public and private sectors, so we shouldn't be surprised when financial incentives drive behavior, scandalous or otherwise, of public and private leaders.

Democracy and capitalism are designed to have multiple layer of checks and balances driven by financial and other incentives. Sometimes the incentives are mis-aligned (think mortgage meltdown), but sometimes it's just bad actors who bully their way through the levees of checks and balances upheld by mere mortals. No law can entirely overcome human weakness. It is the Sysiphean imperative for all of us to keep our eyes open.

A Good IDEA

My degree is in economics, not political science. Not wanting to re-invent the wheel, I'm educating myself about such things as voting systems. I knew there were lots of options used in the world's democracies - and I just learned about a small organization dedicated to helping democracies choose the right "rules of the game" for themselves. 

The International Institute for Democracy and Electoral Assistance (International IDEA) is an intergovernmental organization that supports sustainable democracy worldwide. Its objective is to strengthen democratic institutions and processes.

International IDEA acts as a catalyst for democracy building by providing knowledge resources, expertise and a platform for debate on democracy issues. It works together with policy makers, donor governments, UN organizations and agencies, regional organizations and others engaged in democracy building.

The US is not a member of this young organization. I hope some day we will be!

Executive Clawbacks

To The Editor, Wall Street Journal:
Carly Fiorina ("Corporate Leadership and the Crisis") recommended clawback provisions for CEOs, which are the right solution to the debate over executive compensation. Successful CEOs should be richly rewarded for great work, but if they've built a house of cards that collapses, they need to give it back. Well-designed clawbacks would not only satisfy the public's need for fairness, they would focus CEOs – and other corporate officers, and boards of directors – on long term performance rather than annual goals tied to compensation.

The devil is always in the details, so I'd like to encourage those focused on corporate governance to develop a "standard American clawback." My two cents: all compensation above what is earned by the President of the United States is subject to a two-year clawback – for example, bankruptcy in September 2008 would mean executives return all "excess compensation" from September 2006 on. Triggering events would include precipitous stock drops, significant layoffs, executive indictments, bankruptcy, and government bailouts. Mitigating circumstances might include popped stock bubbles, CEOs hired for turnarounds, whistleblowers and force majeure events.  All corporate officers and board members would be subject to the clawbacks, including those who have left the company. Clawback proceeds would go to the company in the case of bankruptcy, bailouts or indictments. Terminated employees would share clawback proceeds after major layoffs, and shareholders would receive a special dividend in the case of stock swoons. In no instance would the government share in the proceeds.

If this "standard American clawback" had been in place during 2008, hundreds of corporate executives and board members would be disgorging hundreds of millions of dollars, at times going into personal bankruptcy as a result. And that's exactly the point – we want our corporate leaders keenly focused to make sure this mess never happens again.

Left-Center-Right Sub-species

Wikipedia tells me that the modern American left includes New Deal liberals, Rawlsian liberals, social democrats and civil libertarians.

Conservative classifications include fiscal conservatives, social conservatives, libertarians (who sometimes argue they are neither conservative nor liberal), and the much-maligned neoconservatives. I'm not quite sure yet where the Edmund Burke/Kirk Russell followers would fit.

It would follow, then, that Centrists will include sub-species as well. Utterly speculating here, there might be Pragmatists, Realists, Fiscally Conservative Social Moderates, Poll Reading Straddlers (a brand of politicians, not voters), Moderate Republicans and Conservative Democrats. 

I'm a Fiscally Conservative Social Moderate.  I believe I have lots of company, but I'll need some hard data to back that up. Hopefully some enterprising political scientists have conducted polls that break out these nuances.

Liberal Principles - John Rawls

Wikipedia continues to amaze and enlighten.

I read the entry on Left-Right Politics - it's worth spending some time on to get an historical perspective. It's good to be reminded that our concepts of Left and Right have changed rather dramatically over time, as well as across geographies.

I hyperlinked to the entry on John Rawls after reading this sentence:

The contemporary left in the United States is usually understood as a category including New Deal liberals, Rawlsian liberals, social democrats, and civil libertarians, and is generally identified with the Democratic Party.

Rawls was an important developer of Liberal principles. His primary values appear to be fairness and justice - his principle of Justice as Fairness articulates principels that justify government intervention on behalf of the disadvantaged. 

First, each person is to have an equal right to the most extensive basic liberty compatible with similar liberty for others. 

Second, "Social and economic inequalities are to satisfy two conditions: (a) They are to be attached to positions and offices open to all under conditions of fair equality of opportunity; and (b), they are to be to the greatest benefit of the least advantaged members of society."  

The first of these two principles is known as the liberty principle, while the second half, reflecting the idea that inequality is only justified if it is to the advantage of those who are less well-off, is known as the difference principle.

I'll need to read the primary text before I can adequately respond to these. However, my initial reaction is that it highlights two value trade-offs: fairness versus individual liberty, and fairness versus effectiveness. The Wikipedia entry noted that Rawls was worried about moral hazard in applying these principles to nations versus individuals - that is, unproductive nations would expect to be bailed out by productive nations. The entry is silent on whether worried about moral hazard for individuals, which was a driving principle for the centrist welfare reform of the 1990s. 

Pragmatism

Obama's "pragmatic centrist" appointments, as characterized in the mainstream media, show the typical association of pragmatic the adjective with being a centrist. I didn't realize until I was preparing this post that Pragmatism originated as an American philosophy in the late 1800s by Charles Pierce.

I doubt that most centrists subscribe to a Pragmatist philosophy - or could even understand it for that matter. My brother-in-law has a Ph.D. in philosophy from Yale, and the vernacular used by his brethren quickly makes eyes glaze over. Here's an online definition that is more in line with common usage:

a practical approach to problems and affairs - tried to strike a balance between principles and pragmatism

I'm intrigued that the example given is just what I'm trying to describe for centrists - stiking a balance between principles and pragmatism, which by being shown in this example as being a contrast to principles, thus falls outside the realm of centrist principles per se.

Lawyers, Mediators and Centrists

My younger daughter Mary finishes the Semester Intensive program at Kripalu Institute this week, and last night we talked at some length about similarities between centrism and yoga (Kripalu is "Yoga University" in North America).

One of her insights is that American politicians are mostly lawyers, who are trained in advocating one side or another in adversarial circumstances. This may account for politicians' propensity to argue for the extremes and go for the win rather than searching for middle ground, as mediators often do. While some lawyers are trained to be mediators, we both guessed that most lawyers are not.

I've thought in the past that mediation training would benefit all of our newly-elected officials. As I don't know the specifics of what that really means - how are mediators trained? - I'll put that idea on the back burner for further research. However, a quick look at the Wikipedia discussion of mediation makes me think that the "muscular middle" I'm trying to define is different from mediation - which is "a neutral third party who has no enforcing powers." I'll speculate that mediators' communication skills would help build balanced centrist policies, but effective centrist leaders need to wield power advocating specific (not neutral) points of view.

First Principles III

80/20 Government

Far too often government policies inadequately focus on the 20% that’s causing 80% of the problem. For example, if the current financial crisis focused on fixing the housing problems in California, Nevada, Arizona and Florida they might actually have fixed something by now.

Value for Tax Dollars

It’s not unreasonable to ask the government what we’re getting for our tax dollars, and to see annual measures of the overhead in the services provided. Americans don’t mind getting value for their tax dollars – it’s bridges to nowhere, $50 toilet seats, bloated bureaucracies, corporate welfare and cushy government retirement benefits that raise centrist citizen dander. The federal government has started the process of evaluating program efficiency, which is a good beginning. Another way of expressing this is...

It's Our Money

Centrists would align with conservatives in asserting that the money we earn, the wealth we accumulate, belongs first to we the people. Government of the people only earns the right to use some of it in the form of taxes by spending it wisely, with the consent of the people. Obviously we the people don't agree on everything, so not all expenditures will be made with the consent of all the people. That does not, however, give elected officials carte blanche to spend wildly, which is the perennial danger of those who deal with Other People's Money (OPM can be as addicting as opium).

What Does Government/The Market Do Well?

Typical conservative/liberal spitball fights are full of generalizations and often low on specifics when it comes to the relative competencies of government and markets. Centrists want the facts – inquiring minds want to know.

Reason Rules

Going back to Plato, centrists have advocated that reason should rule over passion, both in government and individual behavior (see http://theglitteringeye.com/?p=2926 for a thoughtful advocacy of moderation). 

Progressive Principles

I found a list of Progressive Principles here:

DeclarationOfProgressivePrinciples.pdf

The project to develop this list just left its finished work. All other web pages bring a friendly "Access Denied" message. 

Since it's short, I'll post it here in full:

We believe in America's historic promise of liberty, justice and the expansion of opportunity for all people. These commitments to fundamental human dignity and a better nation for all animate the American spirit and give us a sense of common purpose. We honor these commitments by recognizing that with the great freedoms afforded us comes an even

greater responsibility to see that those freedoms are extended to all people in all places.

We believe that this sense of shared responsibility—for our families, our communities, our nation and our world—strengthens our country and secures our future.

__________

We believe in defending dignity:

“All people are created equal” is not just a fact—it is a call to action. Either we create justice for all or we have justice for none.

All people have the right to lead their personal lives in accordance with their own beliefs, free from imposition or monitoring by others.

All people have a right to the basic necessities required to lead dignified lives and to pursue happiness.

We believe in strengthening democracy:

It is the shared responsibility of a nation to ensure each citizen’s freedom, security and equality. Through government, we honor our responsibility to promote the common good.

Government must be transparent, accessible and open to all citizens who wish to oversee its workings and share in its benefits.

America must work to enhance the democratic process by ensuring an educated citizenry, equal opportunity for influence, honest public debate, competitive elections and robust civic participation.

A healthy democracy requires tireless vigilance against corruption and abuses of power, and a government that is accountable to its people.

We believe in promoting progress:

We must promote innovation and entrepreneurship, cultivate the arts and sciences, and ensure a quality education for everyone. When we invest in individual potential, the benefits are shared by all.

America must continue to be a welcoming home to all people. We believe that diversity of faith, culture and perspective enriches our nation.

America must keep a watchful eye on the economy to ensure fairness, transparency and genuine opportunity for all.

Each generation has a duty to protect and improve those resources we hold in common—our community spaces, our public institutions and our natural environment.

We believe in embracing leadership:

America’s security requires an effective military and a commitment to enduring alliances, but we must remember that America’s true power is found in its wisdom as well as its strength.

Our security and prosperity rely on the security and prosperity of people throughout the world. By helping others, we will help ourselves.

America must join with other nations to build global institutions that protect the vulnerable, promote democratic self-government, and improve the health and welfare of all people throughout the world.

America must never suspend its belief in democracy and human rights in the pursuit of its global objectives. Noble ends require nothing short of noble means.

__________

As progressives, these are our guiding principles—to defend dignity, to strengthen democracy, to promote progress and to embrace leadership. We believe that our country must always be looking toward a better and brighter future for all people, and in this pursuit we pledge to come forward and work with whomever we can. We will fight for these principles in every community, every forum and every office of government, because the struggles of this new century will not only be about preserving the freedoms we already enjoy—they will be about expanding those freedoms for all people.

Principles, Beliefs, World Views, Priorities, Policies

As I scour the internet for political principles, it's clear that "principles" is a bigger tent including beliefs or truths, priorities and policies alongside what one might call principles. No doubt dictionary consultation will help, but fuzzy thinking is pervasive. Clarity without didacticism is the challenge.

As one example, principle one for the conservative list is really a belief:  "First, the conservative believes that there exists an enduring moral order."  Same for the social democrats:  "that the workers of all nations share more in economic interest with each other, than the workers of any nation share with the political and economic elites of their own nation."

Political credos and world views create principles.  Russell Kirk writes "Second, the conservative adheres to custom, convention, and continuity." This alliterative principle of action is derived from a world view that may be part belief, part an interpretation of human history:  "It is old custom that enables people to live together peaceably; the destroyers of custom demolish more than they know or desire. It is through convention—a word much abused in our time—that we contrive to avoid perpetual disputes about rights and duties: law at base is a body of conventions. Continuity is the means of linking generation to generation; it matters as much for society as it does for the individual; without it, life is meaningless." 

The Social Democrats mix in policy prescriptions - "We support the American Labor Movement" - with more general principles - "We oppose totalitarianism in its secular and religious forms." Then later they throw in some rants that are likely inspired by specific incidents, such as "we social democrats will never be cheerleaders for the slaughter of any group of people no matter what the ideology of those pursuing the massacre may be." Sorta sounds like the lady doth protest too much, trying to run away from previous support of Stalin perhaps? 

None of these tend towards policies, but I've seen some other discussion of "principles" get far more specific than I think a "principle" should. And nowhere have I seen a discussion of priorities, but that may be more tied to policy discussions.

In short, I'll need to think clearly about how narrowly to focus a list of principles - do they also integrate beliefs and world views? Maybe so. I don't think most people have thought through these fine distinctions, nor do they really care about them.

Civilization

Editing is the essence of civilization.

Socialist Democrat Principles

There are two sets here, with the second being more along the feel of what I'm trying to develop for centrists.

http://www.socialdemocratsusa.org/principles.shtml

WE SUPPORT THE AMERICAN LABOR MOVEMENT. Working men and women, organized in their trade unions, can be the most important force for progressive social change. We support an open democratic and self-critical labor movement.

WE SUPPORT VIGOROUS DEMOCRACY HERE IN THE US AND ABROAD: Social democracy can only exist in a climate of strong democratic institutions. We support strong voting rights, public campaign finance and equal access to media for all candidates. We look to strengthen the longest most successful democratic experiment in world history, the USA.

WE SUPPORT THE SOCIALIST INTERNATIONAL as the society of like minded parties and activists. We stand with the Labour Party of Britain, the Social Democratic Party of Germany, the French Socialist Party and labor parties across the world. We look to SI members in government for guidance in effective and just government. SD,USA has adopted the SI Declaration of Principles and Ethical Charter and uses the Party of European Socialists the SI working group in the European Parlment as its pragmatic basis.

WE EMBRACE THE LIBERATORY POTENTIAL OF RELIGION - The world's sacred texts provide some of the strongest support for the dignity of labor, the need for social fairness and the ability of humanity to achieve its highest aspirations. SD,USA embraces religious faith not as an "interest group" within a larger movement, but as fundamental to the creation of a better world.

WE OPPOSE TOTALITARIANISM IN ITS SECULAR AND RELIGIOUS FORMS. Communism is a horrible, destructive parody of socialism. "Communism" is the most dangerous enemy of democracy and free Labor in the world. We rejoice in its collapse of the Soviet Union with formerly enslaved nations now joining the society of democracy. SD,USA proudly opposes Communist totalitarianism and opposes religious extremism arising in many religious traditions, especially in the Islamic world.

WE DEFEND ISRAEL. The State of Israel is not a product of "racism" or "imperialism". It is a democratic society. Its Labour movement is lead by Social Democrats. During the first decades of its existence, it was founded and governed by a Social Democratic Labour party. We are unconditional advocates of Israel's right to exist, and that our support does not depend on it being "nice" in order to deserve our defense. But we are not uncritical. We support Israeli democratic ideals and those who work for them. We support a just resolution for the Palestinians that grants their legitimate national aspirations without fatally compromising the legitimate security concerns of the Jewish State.

WE, IN GENERAL, WORK WITHIN THE TWO PARTY SYSTEM IN THE UNITED STATES. The realities of American politics make running independent Socialist candidates for public office frequently a gesture in futility. We ally ourselves with the pro-labor forces of the Democratic Party and work to strengthen Social Democratic ideals in the DP. When appropriate individual locals may run third party candidates, or fusion candidates The SD,USA is willing to experiment with different democratic processes on the local level.

WE STAND FOR SOCIAL DEMOCRACY AND EMBRACE THE HISTORY OF SOCIAL DEMOCRATS, USA

We fight for the extension of democracy into all aspects of our society.

This means means not a government-dominated, but a democratic, non-sexist, un-racist, welfare state with a mixed economy in which the people and democratically-responsible representatives will have the maximum fearasible influence in setting economic priorities.

[Yes, that last semi-coherent paragraph is on the web site]

Alternate Principle Statement

While this statement is not binding upon members, it expresses the same sentiment and clearly demonstrates our positions.

AS SOCIALISTS OF THE DEMOCRATIC LEFT, we wish these truths were self-evident:

First, that the workers of all nations share more in economic interest with each other, than the workers of any nation share with the political and economic elites of their own nation.

Second, that governments derive all just power from the consent of the governed. That governments exist for the benefit of the governed and not the reverse. Therefore, it is the duty of the governed to alter and abolish all forms of domination, political, economic, cultural, and religious, that would seek to deny the governed full and complete access to the power, which belongs to them alone.

Third, that war is, by its very nature, a crime against humanity. Occasionally, it may be necessary for a people to defend itself from attack. This is never an excuse for the imperial acquisition of resources, territory, or an attempt to establish military or ideological hegemony.

Fourth, that the rights of humanity as set forth in the United Nations International Declaration of Human Rights, may never be transgressed by any party no matter how imperiled or aggrieved that party believes itself to be. Torture, the deliberate targeting of non-combatants with anti-personnel devices (regardless of whether the bomb falls from fast moving airplanes, or is carried in backpacks aboard public transportation), or the deliberate imprisonment, starvation, or displacement of massive numbers of people for political gain is now and will forever be WRONG!

Fifth, that human kind has a right to be free from persecution because of ethnicity, gender, age, religious preference, sexual orientation. The peoples of the earth are entitled to national self determination within political boundaries that respect for the sovernity of others and real concerns for self protection shall allow.

Sixth, we social democrats will never be cheerleaders for the slaughter of any group of people no matter what the ideology of those pursuing the massacre may be. We will never apologize for tyranny or injustice no matter what grave exigencies the tyrant shall claim.

Seventh, while people are hungry, homeless, poorly clothed, and without the basic necessities of life, there can be no democratic process.

Eighth, people have an inherent right to worship God or participate in spirituality as their conscience dictates. The state must never be the arbiter of religious thought. Instead, it is the people who must instruct the government as to spiritual and moral precepts. Therefore, it is the right of each person to disagree vehemently with others in their society upon the nature of what is moral. A democratic government cannot take sides. This does not mean that the individual members of an elected government cannot and should not be guided by moral precepts No one seeking election in a democratic society should be asked to divest him or herself of whatever spiritual and moral precepts he or she holds.

Ninth, while governments have a right to maintain the security of their borders, they do not have the right to harass those forced to cross a particular national frontier in order to find gainful employment or shelter from the ravages of war, famine or natural disaster.

Tenth, human beings are the stewards of the earth, not its masters. No generation has a right to pass on a polluted or degraded planet to the generations that follow.

Eleventh, that in any prosecution brought for any crime a defendant shall have a right to be heard by himself, and/or through counsel and shall have an absolute right to examine all evidence, to face all accusers, to call all material witnesses and to make whatever representations to the tribunal which he or she faces, which may seem to the defendant to be exculpatory. The judiciary of a democratic nation must be independent and separate from that nation's legislative and executive branches of government.

Twelfth, there is only one cure for the ills of democracy; more democracy. Free people will build a wondrous and diverse culture that will express what it is to be truly human.

Conservative Principles

A list of centrist principles ought to look like a list of conservative or liberal principles - or so I thought as I Googled today. It appears that conservatives have their framework much more clearly thought out than liberals.

Russell Kirk wins the prize for conciseness and clarity here:

http://www.kirkcenter.org/kirk/ten-principles.html

I've summarized them below, but the thinking is pretty clear - not that I agree with all of the points, nor do I find the principles addressing everything they should.

First, the conservative believes that there exists an enduring moral order.

Second, the conservative adheres to custom, convention, and continuity.

Third, conservatives believe in what may be called the principle of prescription.

Fourth, conservatives are guided by their principle of prudence.

Fifth, conservatives pay attention to the principle of variety.

Sixth, conservatives are chastened by their principle of imperfectability.

Seventh, conservatives are persuaded that freedom and property are closely linked.

Eighth, conservatives uphold voluntary community, quite as they oppose involuntary collectivism.

Ninth, the conservative perceives the need for prudent restraints upon power and upon human passions.

Tenth, the thinking conservative understands that permanence and change must be recognized and reconciled in a vigorous society.

Other principles of equal importance might have been discussed here: the conservative understanding of justice, for one, or the conservative view of education.

So far I haven't found a liberal equivalent coming from a thinker of Russell Kirk's stature.

First Principles II

The following is a continuation of yesterday's random laundry list of centrist principles, world views and policy prescription summaries.

Principles

What Works

Centrists value what works – which is not to be confused with “the ends justify the means.” With a 360-degree, long-term view, centrists don’t advocate expediency for short-term results or horrific means to achieve them. 

Genetic Similarity

There’s no reason to think humans who choose business careers have a nature or nurture substantially different from public servants. The litany of human weaknesses and quirks that can lead to untoward business results also plague those on government payrolls. So while liberals give government benefit of the doubt and conservatives cut business a break, centrists give the public and private sectors equal measures of support and skepticism.

Distributed Honeypots

Part of the genius and success of American democratic capitalism is that power and money are widely distributed among competing government branches and industry giants, which helps mitigate (but does not eliminate) self-dealing by Big Leaders.

Bill of Responsibilities

In a world of conflicting rights, individuals must exercise responsibility, the first of which is to respect others’ rights.

Equal Opportunity, Not Equal Results

Exceptionally capable people happen, and we all benefit when their abilities are amply rewarded. Progress and growth are highly dependent on outliers. At the same time, we all benefit when human capital is fully developed across the board. Equal opportunity is in all of our enlightened self-interest as well as being the right thing to do.

Transparency

In government and commerce, transparency is essential to proper functioning. It’s often battled, occasionally for good reasons but more often to hide socially undesirable behavior.

Accountability

Democracy and capitalism don’t work without accountability. Incumbents will forever attempt to escape or soften or delay or defer their judgment days.  Widespread bailouts and 95% re-election rates are not a good sign.

Contextualism, Not Relativism

Centrists believe in the importance of core values like liberty, personal responsibility, supporting the needy, protecting the innocent. They are not relativists who believe that all values are relative and judging one higher than another is pointless. However, in the real world core values can collide, and context is the key to assessing balance – which means that no value is permanently dominant.

World View

Financial Incentives Matter A Lot

If you want to figure out whether markets, businesses, and even government agencies are working as they should, follow the money. 

Watch the Watchdogs

Government isn’t the only important commerce referee. Accounting firms, boards of directors, bond rating companies, stock analysts, buy-side investors, banks and the press all play important roles. If watchdog financial incentives are misaligned, trouble follows.

Elite Hubris

Smart people often over-rate their own abilities. Too often elite policy prescriptions project their over-rated abilities onto their favorite organizations – government, business, religion, non-profits. Average competence is in fact alarmingly low, and it is average public servants, business people and ministers who implement these prescriptions to continual disappointment.

Mistakes Happen

In a complex universe filled with uncertainty, mistakes happen all the time. To err is human, to recognize and correct them quickly is divine.

Unintended Consequences Happen

In a complex universe filled with uncertainty, many choices produce unwanted, unintended results alongside the desirable. Hubris-fired elite myopia compounds the problem with denial. Humble centrists plan for the unexpected and adjust at the line of scrimmage.

Not So Simple

Democracy is more than voting. Capitalism is more than private ownership. Actually, they are much more. The failure of neoconservatives stems from their overly simplified understanding of democracy and capitalism.

The Rules of the Game

Democracy and capitalism have extensive rules that dramatically affect outcomes. It’s often easier to rig the rules in your favor than win on merit, so rule rigging is frequent and attempted rule rigging never ends. Never. 

Watch the Bigs

Big government, big business, big religion, big unions, big non-profits, big military… when power and money amass under one roof, it’s an irresistible honey pot for those who crave power and money, and a heady brew for all who try to lead. Large organizations are uniquely capable of massive projects (think lunar landings) but create Sisyphean imperatives for corruption watchdogs. 

Short Termism

One of our most debilitating human flaws is our propensity to embrace short-term rewards over long-term success. Encouraging long-termism is both important and difficult.

Policy Prescriptions

Democracy 2.0

The US led the world in creating modern democracy, but as other countries have created their constitutions, some of America’s “legacy systems” have not been emulated. It’s time to upgrade.

Votes and Purchases: Crude Tools

In our multi-polar, multi-issue, two-party democracy, a vote provides insufficient information. Is it supporting economic policy? Social? Foreign? Or just good teeth? Similarly, purchasing multi-featured products in crowded markets is insufficient to guide product planning. Democracy and capitalism need more information-rich transactions.

Immigrants Fuel Growth

The data show immigrants and their children contribute disproportionately to America’s growth. Steady immigrant flow is key to creation of new companies, new industries, new jobs, and American competitive advantage in the globalized twenty-first century.

Centrist Economics

Economic Evolution

Capitalist commerce follows evolutionary patterns just like ecosystems and species. Innovations have improved American capitalism, although extinctions and dangerous mutations happen along the way. More innovations are needed to polish capitalism’s rough edges.

Massively Synchronized Errors

Mistakes and failures that happen randomly with bounded and predictable frequency do not hobble modern capitalist systems. When errors are massively synchronized – as in most homeowners and mortgage lenders believing that housing prices can strongly rise without end – recessions happen and bubbles burst.

Economic Acts = Experiments

Every economic action is like a scientific experiment. There is a thesis – demand today will be like demand yesterday; buying this product will make me happy – and the results of the action are forecast with some perceived and actual risk of failure.  

(Un)Manageable Risks

All businesses face daily risks. A business executive’s job is to manage those risks within their grasp: people, technology, competitive strategy, financial management. Government’s job is to minimize unmanageable business risks: unpredictable inflation, unstable growth, infrastructure costs, security, the rule of law, bad actors (economic actors that is, although Hollywood isn’t great at eliminating the other kind).

First Principles

Obama appointees have often been labeled centrists, despite the lack of agreement on what it means to be a centrist. The primary goal of this blog, which may become a Wiki-blog ("bliki") if I find an appropriate platform, is to articulate principles that can underlie centrist policies, thereby giving them intellectual underpinnings.

Why is this important? The knock on centrists (by extremist conservatives and liberals alike) is that they are "moderates" - really a "mushy middle." Mainstream media generally presents two sides of any question, when the third side - a 360-degree view from the middle - might actually lead to solutions rather than nightly bickering by talking heads.

I believe credible principles backed by a coherent world view are essential for a Muscular Middle to emerge. This initial posting is not intended to be a comprehensive nor well organized list, but rather, an initial dump of thoughts to be assembled, expanded, interconnected, polished, and of course discussed over the next five years.

Balance (aka The Goldilocks Principle)
When values or principles conflict, centrists seek creative balance such that opposing values can both be honored while unintended consequences of extremist adherence are minimized.

Results
Typically politicians declare victory when a bill is passed. Businesses know that new product launches mark the beginning of the work, not the end. Centrists understand that balanced results aren't guaranteed by mere compromises; victory can't be declared until inevitable unintended consequences surface and are addressed.

360-Degree View
The right and the left have their blind spots, people or constituencies they largely ignore. Centrists have to work harder, striving to understand policy implications for everyone.

Policy Dials
Extremists hyperbolize about capitalism suddenly switching to socialism, or popular safety nets disappearing with a click of a voting booth for the "other" party. Centrists see a rainbow of options, a broad spectrum of policy choices that can be adjusted between values (fairness versus effectiveness, freedom versus security) on a policy dial.

Open Minds
AKA "The Truth Is My Friend." Nobody has a monopoly on the truth, and centrists are unafraid to embrace good ideas as well as harsh realities wherever they appear.

Humility With Confidence
In a complex universe centrists eschew blinding hubris. That does not preclude optimism and confidence that collectively we can overcome any obstacles the universe might throw at us.

Mutual Respect
We believe that all men are created equal. Combine that with open minds and confident humility, you get a prescription for mutual respect as a centrist modus operandi that stands in stark contrast to shrill put-downs from Extremist Talking Heads. Centrists don't make for great television, they make for great governance.

Informed Loyalty
Centrists love our country. But friends don't let friends... and citizens don't let their government...

Enlightened Self-Interest
Conservatives have faith that self-interest, guided by Adam Smith's "invisible hand," will lead to optimal social outcomes. Only when we myopic humans look long-term with 360-degree vision do we develop enlightened self-interest that truly can lead to great social outcomes.

Freedom From, Freedom To
Liberals emphasize freedom "from" poverty, prejudice, injustice. Conservatives emphasize freedom "to" live their lives without government interference. Both are important to centrists.

Centrist Economics
The "free market" versus "socialism" debate has reared its ugly head. In its place I'll be offering a different view on the appropriate relationship between commerce and government.

Marketology is the classification of markets, which are incredibly diverse, according to attributes which suggest different government approaches should be taken based on those attributes.

Fair Markets combine the "conservative" (or classical liberal) appreciation of markets' benefits with the notion that government often needs to play referee, and maybe set the rules of the game, to keep capitalists from "cheating."

Popular capitalism is the most desirable form of private ownership of the means of production, in contrast to crony capitalism, corporatism, mercantilism, kleptocracies, and lots of other approaches that have been tried from time to time.

Behavioral economics is an important emerging field at the intersection of psychology and economics, whose experimental data results need to inform policy far more than they do.

Incentive misalignment is far too common in "free" markets and leads to undesirable results, the mortgage meltdown being only the most recent example.

Competing competitions can lead to meritocratic "free" markets being overthrown by crony capitalists, mercantilists, Machiavellianists, and even thugocracies.

That's it for now - I know there's more, but dinner is calling!