Taking Note

Greg Mortenson and the Perils of "Great Idea-Great Man" Philanthropy

(This piece originally appeared at the Incidental Economist.)

Greg Mortenson's sad predicament should chasten the world of philanthropy and nonprofit services. Some of the most basic lessons concern boring mechanical matters such as financial statements and accounting controls. These mechanical niceties are an incredible pain and frustration--right up to the moment they are screwed up. It shouldn't have taken an investigative reporter to unmask this situation. Many nonprofit boards and nonprofit managers are untrained in this stuff, or they are simply too lax. This invites trouble.

I think there is also a more general market failure--or at least a general market challenge--in the philanthropic sector that is worth noting. If you want to attack a tough problem, it's often easiest to catch the imagination of funders and the public when you have a visionary, charismatic leader proposing some disruptive innovation. Mortenson is one such leader, but anyone involved in education, environmental advocacy, microcredit, crime control, or global health could identify many others.

I was at a meeting not long ago at which where a foundation leaders challenged the assembled experts: "Find me the next Perry Preschool." He's not the only one asking such questions.

Cato Institute Exposes Leftist Plot: Medicare’s Independent Payment Advisory Board

(This is cross-posted at the Reality Based Community)

For most of my childhood, I lived in nice suburb near Rochester, NY. Our town included many Holocaust survivors and refugees from the Soviet Union. Inscribed in a notebook at our local Jewish Community Center were names of relatives lost. Our neighbor up the street survived a roundup of Jews by hiding in a wall, listening silently while a neighbor and local police tore the place apart looking for him.

At that same JCC, one could find an elderly poet hobbled by injuries inflicted decades before in a Gulag work camp. Many of these men and women lived quietly with memories of staggering trauma and loss. I knew people my own age from summer camp who endured less-homicidal, but still cruel and unjust mistreatment in the Soviet Union.

None of this has anything to do with the subjects I usually write about. It happens to be important to me. It certainly has nothing to do with Medicare’s Independent Payment Advisory Board (IPAB). Or maybe it does.

What Rep. Ryan’s Medicare Proposal Means If You’re Over 55

“Divide and Conquer” is a strategy that has served conservatives well over the years. Remind younger Americans that their elders are “greedy geezers.”  Set the middle-class against the poor, by telling tall tales about welfare queens. Pit the native-born against new immigrants.

And now, Rep. Paul Ryan’s (R-WI) plan for Medicare draws a bright line between Americans over 55 and those who have not yet reached that turning point in their lives. As I explained in an earlier post, Ryan would give folks in that younger group a voucher when they retire, send them out into the private sector to buy their own insurance, and wish them good luck keeping up with health care inflation. Those over 55, on the other hand, would be allowed to keep the federal program that guarantees their care. For once you may think, it pays to be older.

Not quite. First, the Medicare that a 56-year-old will sign up for ten years from now won’t be the Medicare that seniors enjoy today. The House Republican budget proposal would slash $30 billion from the program over 10 years. And while the Affordable Care Act strives to make sure that Medicare is shedding “waste,” not benefits, the Republican plan leaves it up to politicians and the lobbyists who counsel them to make the decisions. Good news for drug-makers, bad news for poorer seniors who can expect co-pays and deductibles to rise. Moreover, the Republican plan would repeal the Affordable Care Act, which would mean re-opening the prescription drug coverage gap (the “donut hole”).  According to Families USA, this would expose beneficiaries to up to $6,000 in additional out-of-pocket prescription drug costs by 2020.

Fact vs. Fear-mongering About the Independent Payment Advisory Board

A headline in last week’s New York Times suggested that, at last, conservatives and liberals have found an issue that they can agree on: “Obama Panel to Curb Medicare Finds Foes in Both Parties,” the story announced, referring to the Independent Payment Advisory Board (IPAB) created by the Accountable Care Act (ACA) to monitor and curb Medicare inflation. The article quotes both Democrats and Republicans warning that the panel is, in fact a “rationing board” made up of “unaccountable bureaucrats” who threaten to “endanger patient care.” While spotlighting the board’s opponents, the Times quotes only one Democrat who supports the bill: Senator John D. Rockefeller IV, (D, W.VA), the chief architect of IPAB. One is left with the impression that legislators have found a righteous bipartisan cause, and that the IPAB is likely to be repealed.

Then, there are the facts:  Exactly four Democrats have signed on to Rep. Phil Roe's (R-Tenn.) IPAB repeal bill:  Reps. Shelley Berkley (D-Nev.), Michael Capuano (D-Mass.) Larry Kissell (D-N.C.) and Rep. Allyson Schwartz (D-Pa)  Meanwhile, in his recent speech on the deficit, President Obama made it clear that that he has no intention of eliminating the board; to the contrary, he hopes to strengthen IPAB.. Any legislation that attempts to kill or seriously weaken the Independent Payment Advisory Board faces a certain veto. In other words, reports that IPAB is about to be repealed are greatly exaggerated—as are suggestions that IPAB poses a threat to Medicare beneficiaries.

For one, the Affordable Care Act specifically prohibits IPAB from making recommendations that “cut benefits.” Secondly, as Joe Baker, president of the New York-based Medicare Rights Center told Fox News last week: “IPAB is a backstop. It's something that will be used if these other initiatives” in the ACA—“quality initiatives and better drug cost controls don't work” to rein in spiraling costs. “There’s some good consumer protections built into the IPAB," Baker added.

What About That "Immediate Cease-Fire"?

NATO’s Easter Monday air attack on Libya state television’s facilities, along with its third strike at Colonel Muammar Qaddafi’s compound, signals a ratcheting up of Western military pressures on the Libyan regime’s support base before the inconclusive civil war freezes into stalemate.  

But if the colonel’s supporters do not soon desert his cause, the rebels’ European and American backers will have to start taking seriously the part of their United Nations mandate that “demands the immediate establishment of a cease-fire.”  

The Senate Contemplates Movement on Presidential Appointments

Monday’s New York Times features a front-page article with the lead: “Hoping to unclog the Senate and spare scores of presidential appointees from what is often a grueling confirmation process, leading lawmakers in both parties are moving to cut the number of administration posts that are subject to Senate approval.” Even though the relatively modest measure under consideration would end Senate review of just 200 mostly mid-level positions, enactment of any reform to the presidential appointments process would be almost as miraculous as last year’s passage of sweeping health care legislation.

Way back in 1996, The Twentieth Century Fund (as The Century Foundation was then known) published a widely praised report of a bipartisan task force that called for major changes to the appointments process. Titled Obstacle Course, the report marshaled abundant evidence that the appointments process was too slow, that it discouraged many of the best potential candidates for executive branch positions from serving, that it was often abusive to appointees, and that it was excessively complex. The system that had evolved, the report argued, “often disables the government as key appointments languish and federal agencies and departments go without leadership for months—even years—at a time.” Among other reforms, the report called for reducing the number of presidential appointments requiring Senate confirmation by about a third.

In the fifteen years since then, all of the problems identified in Obstacle Course have festered and in most cases worsened. As the Times article points out, for example, about one fourth of President Obama’s nominees still have not been confirmed 18 months into his administration. But throughout the period since the task force report, no meaningful action has ever come close to being taken. Senators simply don’t like relinquishing their prerogatives, no matter how self-evidently harmful to democracy they might be. G. Calvin Mackenzie, the Colby College professor who served as executive director of the task force and was recognized as the nation’s leading expert on the presidential appointments process, told me a while back that he long ago stopped focusing on the issue because it seemed so hopeless.

So the minimal changes being considered now by Congress, even without really addressing the fundamental problems plaguing the system, would be welcome and somewhat remarkable. At this rate, in another 15 years the Senate might contemplate implementing at least one of the task force’s recommendations, which would entail genuine reform.            

Please Sir, I Want Some More!

 Representative Ryan’s proposed budget is so extreme regarding Medicare, Medicaid, and tax policy that its other, often equally extreme features receive too little attention.

Jonathan Cohn addresses one of these provisions today, in a detailed article appropriately called The Republicans’ Really Thin Gruel. The proposal to sharply cut and block-grant federal food stamps—more properly now known as the Supplemental Nutrition Assistance Program, or SNAP.

Five Questions and Answers on Budget Reform

In 2000, the federal budget surplus equaled 2.4% of GDP.   In 2011, the budget deficit will be about 11% of GDP.  How did we fall so far, so fast?  What can we do to get back to a sustainable budget?  What sort of budgetary issues face the country in the longer run?  

1. How did the budget balance deteriorate so much?

The deterioration in the budget balance can be accounted for about equally by increases in outlays and decreases in revenues.   Outlays have increased from about 18% of GDP in 2000 to 25% in 2011, while receipts have fallen from about 21% of GDP in 2000 to 14% in 2011.  Outlays increased by 7.1% of GDP, revenues declined by 6.2%.

2. Why did this collapse in the budget balance happen?

The changes in the budget can be divided between policy measures – for example, the tax cuts introduced under President George W. Bush and his initiation of two wars, in Iraq and Afghanistan, as well as the stimulus measures under President Barack Obama – and changes in the underlying economy, notably the serious economic crisis of 2007-2008, from which we have yet to recover.  The crisis caused GDP and tax revenues to fall and spending to rise, automatically raising spending and reducing revenues relative to GDP.  Perhaps half of the deterioration of the budget is due to the continuing dismal state of the economy and the temporary measures that have been taken to reflate the economy.  If all stimulus spending were to end tomorrow and all tax rates were to revert to year 2000 levels, the deficit would be close to a sustainable level, probably about 3-4% of GDP, but the economy still would face budgetary challenges, especially if we fail to solve the long run cost challenges we face.

When 14-Year-Olds Kill

(This is cross-posted at the Reality Based Community)

Today’s New York Times includes an amazing story by Adam Liptak and Lisa Fayle Petak. Its opener speaks for itself in underscoring the misguided mindset of our justice system.

More than a decade ago, a 14-year-old boy killed his stepbrother in a scuffle that escalated from goofing around with a blowgun to an angry threat with a bow and arrow to the fatal thrust of a hunting knife.

The boy, Quantel Lotts, had spent part of the morning playing with Pokémon cards. He was in seventh grade and not yet five feet tall.

Mr. Lotts is 25 now, and he is in the maximum-security prison here, serving a sentence of life without the possibility of parole for murder.

According to the story, there are about seventy prisoners serving life without parole for homicides committed when they were 14 or younger. In my view, this is a barbaric policy.

Young people can certainly commit atrocities. As I have related before, I was once badly beaten in the New York subway by a group of kids who grabbed me by the hair and banged my head against a concrete floor to wrest away an $80 watch. Not long after that, my gentle cousin was beaten to death by two 16-year-old burglars.

Possessing newly-powerful bodies, surging hormones, and limited tools for impulse control, for thinking about the future, or for resolving conflict, some teenagers are genuinely dangerous. Some face the onset of serious psychiatric disorders. Some are involved in communuty or gang-related violence. Some must be locked up to protect themselves and others.

Until recently, states sometimes executed juveniles and people with IQ’s of 60. The Supreme Court found this unconstitutional, noting the pointless cruelty of such policies.

I see no empirical support, no pragmatic justification for policies which impose life sentences on a 14-year-old child who commits a stupid and impulsive crime. Such harsh policies are not necessary or helpful in creating a safer or a more humane society. It’s unworthy of us that this question even comes up for debate.

This Year’s Pulitzer for Sophistry

Joseph Rago, a senior editorial writer for the Wall Street Journal, won a Pulitzer Prize yesterday for a collection of pieces that mount a relentless attack on the federal health care law that he derogatorily refers to as “ObamaCare.”

Editorial writing by definition requires the author to take an opinion—and sometimes to offer prescriptive alternatives. The Pulitzer Prize board says Rago's columns are “well-crafted, against-the-grain editorials challenging the health care reform advocated by President Barack Obama.” And in the partisan battle that continues to surround health reform, clearly there is an important role for just this kind of bully pulpit. But if you read Rago’s body of work you will find editorials that are perhaps well-crafted stylistically (i.e. he’s not a bad writer), but his staunchly conservative opposition to the Affordable Care Act relies on oft-repeated mistruths. In fact, his criticisms of the health law pretty much go “with the grain” of those who have led the attack against not just the Affordable Care Act but against Obama’s leadership in general.

In fact, Rago’s series of columns promote opinions that are the standard fare on Fox News and spouted as fact by other right-wing pundits. He assails the individual mandate as unconstitutional, warns that “ObamaCare” actually is a government take-over of health care and charges that Accountable Care Organizations will lead to a dangerous consolidation of power that will increase costs by crushing competition and ending the “autonomy of independent practice.” He misstates figures concerning health spending and savings and repeats alarmist misinformation.