“Senior” Management ?

This past weekend, an interesting analysis appeared in a number of newspapers, showing that the highest-paid people in medicine weren’t the doctors, but the “senior management” types in healthcare. Hospital directors make a lot more than the most expensive surgeons, and multiple times what general practitioners do. This is a problem, but it’s not confined to medicine. It’s everywhere. The senior executives in pharmaceutical companies make ten times what their top researchers make – if not hundreds of times. In my wife’s university, from what I can determine, nine of the ten top-paid individuals are “management” types, and most of the top fifty are either management types or professors of business or management. The same has long been true in corporate America as well.

The question is, then, just why are these management types so much more valuable than those under them who actually do the work, design and make the products, do the market research, sell those new products, teach the students, build the highways, heal and repair the sick. Not only that but even among the top executive types, pay levels are marginally related, if even that, to actual performance or worth to society. The highest-paid individuals in America are hedge fund managers and other financial types whose greatest accomplishments are speculation and speed-trading, which is essentially legal high-speed graft and extortion, justified by them as “providing market liquidity.” Study after study has shown that the highest-paid executives tend, overwhelmingly, to be taller, good-looking males – whose actual performance on the job is, on average, less than that of either shorter male CEOs or women.

These facts are anything but unknown. So why do we continue to select and reward individuals and occupations that aren’t the best for improving life for the vast majority of us? For that matter, why don’t corporations pick executives and managers based on more than a modicum of talent and a maximum of appearance and charisma? And what’s the societal point of minimizing productive people and resources in the United States so that a comparative handful of executives and speculators can pile up more hundreds of millions or billions of dollars?

Are we really that self-destructive?

“Cost” of Education

The last few days, with graduations occurring somewhere practically everywhere, it’s not surprising that I’ve run across columns, letters, and blogs all decrying the increase in the cost of education. They’re all correct in the fact that the cost of education has increased faster than the rate of inflation, and almost all of them are wrong about most of the rest of it, especially their “remedies” for reducing costs.

The first thing that people tend to forget is that a huge component of the increased costs is the number of students attending college. In 1960, only 7.7% of the population had a bachelor’s degree or higher. In 2013, the percentage was 33.5%. Now, considering that the U.S. population was 180 million in 1960 and was 317 million in 2013, that means that there were only about 14 million people with an undergraduate college degree or higher in 1960, while there are 106 million today. No one seems to be considering the cost of at least tripling the infrastructure needed to educate close to a hundred million more students. And in some ways it’s worse than that, since in 1960 roughly forty percent of graduating high school seniors entered college and fewer than half graduated from college. Today, more than 66% of all high school seniors enter college, and still only about half make it through. With a still increasing population, that requires more facilities and more teachers.

Some of this problem could be solved by stricter admission standards and more rigorous grading and higher academic standards, especially on the secondary school level, both to improve preparation for college and to weed out early those students either unable or unwilling to do college-level work. Greater investment in teaching high level, non-college skills would also help, but all of these are currently politically highly unlikely.

The second factor is that in all areas, but especially in the more technical areas, the cost of educational equipment and facilities has increased. When I taught university more than twenty years ago, most faculty didn’t have computers. Now they all do, and they’re necessary, given state and federal requirements. Laboratory equipment is far more expensive, as are building and safety requirements.

Interestingly enough, while university personnel costs have increased significantly, the largest area of growth has been in administrative personnel, while cost growth in teaching faculty has been restrained by hiring far fewer tenured and tenure track faculty and ever greater numbers of part-time adjuncts, so that on average college and university faculty have gone from being more than two-thirds full-time faculty to one third full-time and two-thirds adjunct, while the numbers of high-paid administrators have continued to increase, in some instances by as much as ten times the increase in full-time faculty.

Then, as I’ve mentioned earlier in other posts, the share of who pays the overall cost of education at public universities and colleges has also shifted dramatically over the past fifty years, from the majority of such costs, often 90%, being paid by the state in the immediate post WWII era, to the present, where, on average, 90% is now paid through student tuition and fees.

Given all these factors, and the fact that public universities and colleges, who educate the vast majority of students, have essentially limited staff and faculty pay to less than the rate of inflation over the past twenty years, any significant cost cuts in teaching personnel are not possible, no matter what anyone claims, and no one seems willing to even look at administrative bloat. In addtion, because the college-age population is still increasing, the need for more facilities and equipment isn’t likely to shrink, either. The only question is whether voters and taxpayers are willing to increase the state and local governments’ share of funding higher education, so that less of a cost burden falls on the student or the student’s family, or whether the United States will, by default,effectively restrict higher education to those of greater means and to the comparative handful of less affluent students who are so brilliant that they can obtain scholarships and grants.

Business

The biggest problem American companies and probably every other corporate-level business in the world has is that few of them, if any, understand that there can indeed be too much of a good thing, or at least too much trying to obtain too much of a good thing, especially when that “good thing” happens to be increased revenues or profits or increased CEO and high-level executive compensation. Revenue and profit have become such a dominating target that almost none of their CEOs or corporate boards ask, “How much is enough?” Those that do ask invariably answer, “As much as we can get.”

I’m not against profit, just as I’m not against eating, but trying to gorge on profits is the corporate equivalent of gluttony, and sooner or later it results in either corporate unwellness, terminal corporate illness, or societal malfunctioning on a grand scale. Corporations are continually trying to do more with less, in order to increase revenues and profits, but none of them ask what the results of their “success” will be, or the implications for the future.

The other day I went to get a plastic pipe joint for my sprinkler system – just a piece of PVC pipe maybe five inches long at most. When I got home I discovered I actually had an unused one, but I thought they were different. They were. The new one was almost an inch shorter than the older one, which means that it’s not as strong. I suppose it doesn’t make that much difference for a buried sprinkler system pipe, but the problem is that making things smaller and cheaper while selling them for the same price or even more doesn’t stop at PVC pipe. It goes into things like General Motors car ignition switches, whose failure resulted in people being killed, all for a savings of a dollar a car. And the only lesson Detroit has learned since the Pinto fuel tank disasters is that people eventually forget.

The problem with doing more with less and maximizing profits is that the goods and services are cheaper, that fewer employees have good paying jobs, and the profits go to those already well-off, either through dividends, capital gains, or higher compensation. All that makes executives happy and well-paid, and investors equally happy – but only for the moment. The problem is that ninety-five percent of Americans (and before long it’s likely to be 99.5%, it isn’t already) aren’t sharing in this wealth, and, as I’ve noted before, in a consumption driven economy that also imports more than it exports, as income inequality increases, the ninety percent have less and less to spend, and that means that they buy less and they buy cheaper goods. It also means that welfare and food stamp program costs go up, yet with tax revenues already in deficit, that means that infrastructure programs have lower funding, as do research, defense, and education, among others necessary for the successful functioning of society.

In effect, the quest for greater revenues at all costs is bankrupting the country, slowly but inexorably. And for what, so the top 25 hedge fund managers can make more money than all the kindergarten teachers in America? So U.S. corporations can outsource more and more jobs? Maybe, just maybe, if the top ½ of one percent of the earners in the United States had to pay taxes at U.S. levels in the 1960s, they might not be so obsessed with profits, and we could pay for the basics society needs without running deficits, and we might get back to 1960s prosperity. And… please… don’t talk about welfare cheats; the biggest cheats are in the finance industry.

But don’t count on any real tax and structure reform happening so long as the Republicans claim that higher taxes are job killers. Higher taxes on the right people aren’t. Tell me, honestly, exactly what benefit do all those exorbitant multi-million dollar compensation packages provide for the country?

Benghazi and BLM

The Republicans in the U.S. House of Representatives have formed another committee to investigate the so-called Benghazi scandal. Besides being a waste of time and money, it’s also an example of the total self-centeredness and the failure of the Republican Party even to follow their own self-proclaimed principles. The deaths of the U.S. Ambassador and three others were tragic. They shouldn’t have died, but let’s look at the situation. The two possibilities for the cause most cited are: (1) the killings were motivated by a spontaneous reaction to an anti-Islamic video produced in the U.S. or (2) the attack was planned and executed by anti-American Islamic terrorists. The bottom line is that four people died because a great many people in Libya and throughout the Middle East hate Americans and because security was not adequate. In the larger context, it doesn’t matter that much which anti-American cause led to the killings. The real cause was poor security, and and that was not caused because the Congress had cut State Department funding, but because the career staff of the State Department, not the Secretary of State, not the political appointees, had allocated the security personnel as they saw fit and failed to offer adequate support for the ambassador when he visited a CIA post in Benghazi. Yet the Congressional investigations continue to focus on former Secretary of State Clinton and President Obama, for their misleading political statements about the issue, rather than on those in the State Department who were actually responsible for the lax security. Of course, Clinton and Obama tried to spin the issue after the fact. So did the Republicans, and they’re still trying. The problem here is that yet another hearing won’t do a damned thing to solve the problem. It will convince die-hard Republicans – again – that Clinton and Obama are out to mislead the public. It will also convince die-hard Democrats, again,that the Republicans are continuing to avoid doing anything constructive while using the Congress as a basis for personal attacks. And, guess what? The left and the right are both correct… and totally ignoring the real problems and issues.

Now… in this light, let’s look at the BLM mess in the west. We have a Nevada rancher who has refused to pay grazing fees for twenty years. After twenty years of essentially doing nothing, the BLM suddenly decides to seize his cattle. Hundreds of self-proclaimed militia appear, armed with everything from handguns to high-powered rifles and semi-automatic weapons. The BLM backs down, again, and the “militia” remain patrolling the area and stopping residents and others at will. This is hardly an issue of an overbearing government. For years, the BLM has charged grazing fees set as low as legally possible, at rates often as low as ten percent of what private land owners charge and far below the rates charged by states on state-owned lands. In addition, the BLM has failed to maintain the lands, at least with regard to wild horses, so that there are tens of thousands of wild horses on federal lands that can only support a fraction of that total, and excess of 2,000 alone in just Iron County, Utah. Yet, last week, a BLM wrangler was threatened by two men, one of whom was armed, for actually transporting horses to a holding area, and an elected state official led an illegal ATV ride through a roadless area closed to motorized vehicles, in protest of BLM procedures protecting environmental and archeological features of the area.

In both of these cases, we have Republicans and Democrats both playing politics… and neither side seems in the slightest interested in addressing the underlying problems. We don’t need another political Benghazi investigation; we don’t need posturing over citizens’ and states’ “rights” to claim federal lands, so-called “rights” that have no basis in law. And we certainly don’t need self-proclaimed militia telling residents and government alike what to do. What we need is less posturing and more action, but, of course, almost no politician really wants action because enforcing the law and looking into real incompetence, as opposed to politically-trumped-up issues, just upsets various political interests and costs votes, and votes are apparently far more important than law or good government to the vast majority of politicians. But then, maybe after so many years in politics, they really can’t even tell the difference.

Belief or Thought?

The vast majority of people believe what they want to. What distinguishes a thinking individual from a believing individual is that thinking individuals do their best to evaluate all the facts in their environment and in the universe, not just the ones that support what they believe. What complicates this is that some individuals believe in things that are so; that is, what they believe is aligned with what the facts indicate is in fact so, but they do so out of belief, and often the basis for those beliefs rests upon other biases not grounded in fact. Add to that the fact that someone can be a thinking individual in some respects and a total “believer” in something that is anything but grounded in fact in others. In life, most of us are a mixture of thinker and believer.

From what I’ve observed and from what some psychologists report, all too often when “loyalties” that require adherence to a belief ungrounded in fact [and by that I mean the preponderance of fact and not just selected facts] conflict with the preponderance of fact, loyalties almost always win out. Thus, a far greater number of Republicans believe President Obama is a Muslim than do Democrats, while a far greater number of liberals oppose all genetically modified foods than do conservatives. Extreme fundamentalist Christians cannot accept evolution because it conflicts with an essential loyalty. Extreme libertarians believe that minimal or no government secures the most freedom for the most people, despite the bloody evidence of all human history to the contrary.

What makes all this even more of a problem is that when one marshals even what might seem an unassailable array of facts and proof against a belief with little or no support grounded in reality, all such an assault does, in the vast majority of instances, is to strengthen the belief. Which is why a small army of self-proclaimed and armed militia members continue to patrol the side-roads around Bunkerville, Nevada, most firmly convinced that Cliven Bundy, the man who owes the federal government [i.e., the taxpayers] over a million dollars, is a patriot supporting states’ rights, in particular rights that the state of Nevada relinquished in writing upon gaining statehood, and rights that are superseded in writing in the Constitution, that very document those true-believing militia types insist they are upholding.

But then, how many of us have beliefs ungrounded in fact and reality that we uphold against the evidence all around us, evidence we choose not to see because it conflicts with what we need to believe?