WHY I’M AGAINST BUSH’S SOCIAL SECURITY PLAN

You might think that because I’m a fiscal conservative, I’d be for Bush’s Social Security plan. That because I am an avid buy-and-hold investor, a true believer in “stocks for the long run,” that I’d be all over personal investment accounts. That as a thirty-something with thirty-plus years left for my investments to grow, I’d be in favor of carving out a piece of my paycheck that used to go to the government and letting it accumulate for my golden years.

You’d be wrong.

But my reasons are for both conservative and liberal reasons. You have to first decide, as Philadelphia Inquirer columnist Andy Cassel noted, what Social Security is for. Is it a safety net for society or a savings account for individuals? It was first envisioned as the former, and it does a pretty good job. In fact, one huge population that isn’t being talked about, save the bottom flap of today’s Philadelphia Inquirer front page, is the non-elderly and non-retired who are receiving Social Security: the disabled, of which there are eight million, and children of retired, deceased, or disabled parents, of which there are more receiving checks than from TANF. In fact, of the 48 million checks that Social Security sends out every month, over thirty percent are to people who aren’t retired or elderly. Where are they in the current debate over whether a sliver of your paycheck goes to today’s retirees or tomorrow’s?

As I’ve shared in this space before, I am a firm believer in free markets. But free markets fall short because they inefficiently account for the long-term, the moral, and the communal. And where they inefficiently account for such important things, the government should get involved. And so I believe that Social Security should remain in its current form, because it is a safety net that market forces would not create on its own, a safety net that is the right thing to do in a nation where there will always be people who need financial help because they cannot work for themselves. Maybe that makes me a liberal. Or maybe that makes me a conservative who understands the limits of being conservative.

But what of the allure of swapping safe government investments for the possibility of higher returns in the open market? Especially for younger folks, who have more time to allow short-term ups and downs to even out, playing the market is by far the more prudent way to stay ahead of inflation. There you will find no disagreement from me, President Bush. But why is the government meddling in what I can already do, and do in fact already do, in the private markets? Why not let me have that sliver of my paycheck back and let me invest it by myself? For the best ownership is not government-mandated choices, but government-free choices. So the conservative in me says stay out of the retirement savings business and keep taxes low so I can do whatever I want with my money.

Of course, the debate on Capitol Hill is much more complicated than what I’ve just parsed out in the few paragraphs above. The furor over Social Security isn’t fundamentally about retirement savings or actuarial tables or budget deficits. It’s about political ideologies and political blocs and political wins. I guess the reason why I’m sharing my viewpoint on President Bush’s Social Security plan is that it’s a good illustration of where my conservatism looks liberal, and where my conservatism supports liberal ideas.

THE GAME OF POLITICS

I can’t go into too much detail as to the setting in which this situation came up, but I was reminded earlier this month that political office isn’t just about finding the best person for the job. In fact, sometimes it’s not about that at all, but rather who can get elected, what you can gain by running even if you lose, and what else is going on in your party that might help or hinder your candidacy.

It all sort of reminds me of the better reality TV shows. Alliances are formed, deals are cut, and people settle into familiar caricatures (“the loose cannon,” “the conniver,” “the hot chick”). Meanwhile, somebody moans about how they don’t want to stoop to such deceit and doubletalk: “I’m going to be true to myself, and if that costs me the game, so be it.” And just like in politics, they get voted off.

I shouldn’t be so cynical. Even the slimiest politicians have some bone in their body that seeks to serve the public interest (even if their ego or lust skews their sense of what is good for the public). The two-party system in our country, for all of its foibles, is a sound way to ensure choice and accountability. And more often than not, the best man or woman for the job does in fact win.

So politics isn’t so bad. But I should never forget that it’s still a game.

WE MADE IT MEANINGFUL BECAUSE WE HAD TO

One of the main points of a book I’m reading for my Leadership class is that leaders must learn to appeal to intrinsic motivations to inspire their workers. In other words, extrinsic motivators such as bonuses and related perks will only lead to minimum exertion of effort and maximum need for supervision. The authors suggest, “Treat your employees as if they were volunteers.”

I had to laugh at that suggestion, since we’ve been doing that at our small non-profit for years. Our budget is so small and our work so hard that hiring and retaining employees necessitates that we offer substantial intrinsic motivators. I am blunt with applicants that we don’t pay well and we work long hours. Many times, I am outright embarrassed that we have the audacity to recruit people who could enjoy much better compensation and many more comforts elsewhere.

A funny thing has happened on the way to apologizing to applicants and employees, though: our office has become a great place to work. By having no resources to offer the usual extrinsic motivators, we have had to follow up on our word that we would compensate people in other ways. Our lofty mission, to assist minority entrepreneurs, motivates staff to extraordinary levels of effort. We have created a work setting that is familial AND professional, fostering autonomy AND collaboration. We give people significant responsibilities and cheer them on as they accomplish things they didn’t know they had the skills to accomplish.

I believe that the desire to change the world is not just in twentysomethings and granola crunchers. We’ve found staff, interns, and volunteers, who seek to engage in meaningful work in a dynamic setting where they are respected and valued. And we’ve worked long and hard to make our office that kind of place. We made work meaningful because we had to. And so far, it’s worked for us and for those who work with us.

BLINK TWICE ON "BLINK"

Malcolm Gladwell’s eagerly anticipated second book, “Blink,” is for sale now. I haven’t gotten a chance to read it but I have seen excerpts and skimmed book reviews. And I have to say that while I am a fan and believer, I am skeptical about the premises of “Blink.”

Ironically, his premise might be what keeps me from accepting his premise. “Blink” argues that our intuition, often formed in seconds, is remarkably accurate. He uses examples from a variety of fields: art experts who instantly knew that a particular piece was a fraud when other experts’ extensive analysis said it wasn’t; athletes who rely on instinct rather than thinking their steps through; and psychologists who could predict with 90% accuracy which marriages were destined for success based on thirty seconds of observation.

I’m sure the book is well-written, engaging, and more nuanced than my above summary. Nevertheless, I am leery of the power of first impressions to create a filter by which everything about something gets processed. In other words, Gladwell writes about how when we meet someone, we form an almost instantaneous impression about them based on something, and then we extrapolate everything about them based on that something. If I notice that someone is clean-shaven, I make assumptions about what his work desk looks, what job he has, what kind of communications style he uses. And Gladwell argues that more often than not, I am surprisingly correct.

You might think I’m going in a certain direction with this argument, but I’m not. Such thinking as described above can lead to pre-judging and stereotyping and stubbornness, yes. It is noble to withhold judgment; to not make assumptions; and to be open-minded enough that if the second thing you learn about someone doesn’t fit the profile you’ve created about them after you learned the first thing, you change the profile. All well and good, I agree.

I guess where I’m coming from is Billy Beane’s “Moneyball” school of thought. I’m a contrarian who believes there’s money to be made and advantage to be gained by going against popular and simplified opinion. The masses tend to overvalue certain things and undervalue other things. And these misvaluations are usually based on first impressions, impressions that may hold some truth to them but filter out other, larger truths. Dan Quayle was a laughingstock in the mid-1990’s for a couple of verbal gaffes, obscuring a decorated vice-presidential administration. People fawn over Derek Jeter for being such a clutch player, but in fact his statistical performance in “clutch” situations is at or below his normal performance. Procter and Gamble got unfairly beat up in the media a few years ago, and investor lemmings sold in a panic, dropping prices well below what they should be.

Smart people know how to take advantage of these misvaluations. In the political realm, smart administrators know to choose what works over what sounds good. The Oakland A’s have fielded a competitive team at a fraction of the New York Yankees’ payroll by buying up undervalued players. And value investors make a lot of money snatching up out-of-favor stocks that tend to regain their losses once the masses realize the fundamentals are still there.

So is Malcolm Gladwell advocating the kind of “herd” mentality I abhor? I’m sure he doesn’t, or if he does it isn’t as simple as that. I hope I don’t let this first impression of “Blink” create an unwavering profile of the book such that when I finally get around to reading it, I’m able to keep an open mind. Wouldn’t that be ironic?

STUDYING THE BIBLE IS LIKE SURFING THE INTERNET

I attended our church’s men’s Bible study meeting this morning. We Presbyterians are quite efficient: 30 minutes of Bible study, 10 minutes of sharing, 20 minutes of prayer, and by 7:30am we are all out of the door and on to the rest of our days.

The group has been making our way through the book of Hebrews, and as we studied this morning I couldn’t help but draw a parallel between reading the Bible and surfing the Internet. When you surf the net, as you’re reading something, there’s a link on a name so you can get more detail, there are related stories on the side panel, and the format of similar contented pages is similar.

And so it is with the Bible. We constantly flipped back and forth to read the quoted Old Testament passages in their original context. We noticed parallels between the author’s main points and the main points of another New Testament book. We made note of repeated words and phrases, and saw in the parallel structure more of what was really being said.

For someone who gets a lot of information off the Internet, studying the Bible this morning with other men from the church suited me just fine. I look forward to doing more “surfing,” “double-clicking,” and “scrolling” next week!

A CHRISTIAN OBLIGATION TO LOCAL ISSUES

One of the things I hope to explore at Fels is this notion of city services for various classes of people. We are learning about how cities are like any other products: if they offer more value (trash removal, recreation department, public schools) than cost (taxes and user fees), people "buy" (i.e. move in or don't move out), and if they don't, they "sell" (i.e. move out or don't move in).

Free-market dynamics, then, help cities reach equilibrium in terms of rewarding cities that do a good job of offering value and managing cost. This is, of course, predicated on peoples' mobility, i.e. the ability to choose to move to whichever city or suburb offers the most value to them. But what about the poor, who are not nearly as mobile as you or me? Essentially, the city has a monopoly over them. And you know how inefficient monopolies are in dispensing services and allocating resources.

So what is our role as upper-class Christians living in cities in terms of making sure that our cities do not act like the inefficient monopolies that they are to entire populations of poor people? Somewhere in between "not my problem, screw the poor" and "let's make everybody equal" is, I think, an effective and Biblical solution. But what is it?

It is not, obviously, everyone's calling to push on these issues; it may not even be mine. But nor is it right for Christians to completely ignore such dynamics. We would be wise to understand that we are in positions of privilege, and compassionate in desiring to leverage its perks on behalf of those less fortunate, and ultimately for the sake of the Kingdom. We should not feel guilty about making money or accumulating wealth or making decisions to enrich our families. But nor should we choose to be ignorant as to how our upper-class lifestyles and choices and consumptions affect our neighbor.

SOCIALLY RESPONSIBLE INVESTING

I am actually not a big fan of the family of funds known as socially responsible. The intent is good: we should want to at least do no harm, if not work to do good, with the lump of money we tuck aside to make money for us on the side. We shouldn't bifurcate the part of our lives that seeks to do justly in the world with the part of our lives that seeks to effectively invest our money.

However, do socially responsible funds accomplish that intent? Most of these funds simply screen out companies in "sin" industries such as alcohol, tobacco, and pornography. (By the way, with its ownership of some key cable stations, none other than GE is the largest purveyor of porn and therefore would be excluded from consideration by such funds.) Others go a good next step further and screen out companies that have poor track records vis a vis environment, discrimination, and/or animal rights. What you're left with, usually, is a basket of tech companies and financial services institutions. (Which, by the way, these firms do business with companies in "sin" industries, so is there really any way around enriching them?) Is a basket of tech companies and financial services institutions necessarily being more faithful to the Kingdom? For sure, it isn't an effective way to invest: that lack of diversification usually means the funds do well in some cycles and poorly in others.

Furthermore, I am of the opinion (now I am showing my political cards – and now the issue of sanctions on countries that violate human rights will have to be the subject of a future blog) that the best way to effect change is to be inclusive, not exclusive. Phillip Morris, for example, is going to sell cigarettes no matter what, as long as there is demand in the market for a product they can efficiently and effectively produce. Let's say a suitable Christian response is to lobby for them to 1) make their cigarettes safer, 2) educate the population on the health hazards of smoking, and 3) use their resources to fund initiatives that promote healthy living. If a few of those Christian voices were shareholders, might Phillip Morris listen more carefully? In fact, perhaps Christians should get in the habit of writing the CEO’s of companies in which they invest, to thank them for progressive thinking or to scold them for harmful practices.

I'm not advocating that Christians deliberately seek out investment opportunities with "sin" companies in order to maliciously take them down. I do hope that we Christians will use our spending dollars, our investments, and our voices as levers to reward good firms and make bad ones better. In my mind, what it means in this dimension to be “in” this world but not “of” it is to use sound investment practices (i.e. diversify, buy and hold, invest early and often) but to be vocal with our stake in letting leaders know what we value and what we oppose. If you lived in a city run by a corrupt mayor, would it be more spiritual to leave or to lobby? I would not judge you either way, but nor would I say that either way is definitely wrong. And so I think the same principle can apply to multinational companies. But I am open to counterpoint.

WHAT A CHRISTIAN BRINGS TO THE BUSINESS WORLD

I blogged a few days ago about five business principles I had seen in my read through my first issue of Harvard Business Review. Today, I’d like to add five more: five that I think represent the Christian perspective I bring to the business world, five that are true to Christian faith and to for-profit business.

1. The more diverse your hiring pool, the more diverse your workforce; and the more diverse your workforce, the better your ideas; and the better your ideas, the better your business.

2. Sacrificing long-term gain for short-term gain MAY result in short-term gain but WILL result in long-term loss; sacrificing short-term gain for long-term gain MAY result in short-term loss but WILL result in long-term gain.

3. It is important for a company to have strong morals because (in ascending order of importance): a) bad morals result in financial losses to the company in the form of lawsuits and fines b) good morals result in financial gains to the company in the form of good publicity and enhanced brand image c) some things are more important than financial gains and losses.

4. If you create more loss (through environmental damage, health hazards, and community displacement) than gain (through monetary profit, employment growth, and quality goods) by doing your business, you shouldn’t do your business.

5. People who say businesses’ sole purpose is to reward its stakeholders are only half-right: businesses exist to enrich their stakeholders, but that shouldn’t have to be limited to investors, for businesses have much to give and gain from customers, employees, and communities, as well as broader stakeholders such as the environment, political regimes, and future generations.

TALKING IN MY SLEEP

I seem to have a recurring dream about speaking in public. In my dreams, I am speaking before a large crowd, and I am on. Sometimes I am speaking of the love of God. Sometimes I am laying into Christians for half-hearted living. Sometimes I am appealing to people to open their eyes to the plight of the poor in our cities or around the world. But whatever the topic and wherever the setting, I am speaking with passion and I am good.

They say that dreams reveal our secret desires. Perhaps I have a desire to use speech to proclaim truths that this generation needs to hear. I am hesitant about being someone who talks big but doesn’t live it out. But I am also aware that if God has given me a skill and a desire, to half-use it is wrong. So I pray God would help me discern what my dreams are saying, and what I can do when I’m awake to make my dreams come true.

WHY I’M A FREE-TRADER

In this week’s Newsweek, columnist Fareed Zakaria argues that the biggest thing facing South Asia right now isn’t the tsunami or even the threat of massive disease, horrific as those two things are. Rather, South Asia’s biggest problem is economic development. On an individual and national level, the region simply lacks the resources to thrive. Money isn’t everything, but it sure can help pay for mass immunizations, drinkable water, and physical infrastructure.

And that’s why I’m a free-trader. The people that lose the most when we restrict free trade are those in poor countries, whose goods are not allowed to be bought and sold in the international marketplace because politicians in rich countries are in the pocket of powerful manufacturing and agricultural conglomerates. Much foreign aid is needed now, and may always be needed; but the best way to help a poor country is to let it participate in the global economy.

Instead, politicians protect their power base and earn patriotism points by protecting domestic goods from non-US competition. At this very minute, when the world is as rich as it has ever been, there are more people on this earth who earn less than $2 a day than there are those who earn more than $2 a day. That most of the extremely poor on our planet are concentrated in areas vulnerable to drought, famine, and tsunami makes things even trickier. We may not be able to predict or stop the next natural disaster, but we sure can lobby for trade policies that allow poorer countries to earn their fair share of the world’s economic growth.

LESSONS FROM HARVARD BUSINESS SCHOOL

One of our board members was nice enough to buy my youth program a one-year subscription to Harvard Business Review. Over the holidays, I’ve gotten a chance to plow through the first issue. Having matriculated from b-school undergrad ten years ago, reading the case studies and surveys flooded my mind with memories. How I love learning about business.

For all of the complexities of the modern business world, it is interesting how a few key nuggets of wisdom can carry you far. So while this space is a bit full – 7 Habits, 5th Discipline, Level 5 Leaders, etc ad nauseum – here are some guiding principles that I have found useful in a variety of settings, all of which I saw in motion in the pages of this issue of HBR:

1. There are arbitrage opportunities when you take the road less traveled. Examples: sports betting, bargain hunting, predicting trends.

2. When it’s set up for everyone to win, everyone usually wins. Examples: joint ventures, management-labor relations, leadership development.

3a. Fuss about the numbers . . . 3b. but remember that people are people, too. Examples: employee incentives, program design, team-building.

4. The best way to deliver a product is to listen to the customer. Examples: marketing, ministry, event planning.

5. The best budgeters know when to spend 10% more in resources to get 50% more in impact, and when to be OK with 10% less in impact in exchange for 50% less in resources spent. Examples: advertising, IT, hiring.

WHAT I LEARN FROM VACATIONS

My wife and I head home in two days after a nice week of family, food, and fun here in California. Vacations are always great, even for a workaholic like me who pines to get back my usual hustle and bustle, because I am able to return to some important habits that I hope to keep up in the everyday grind. Here are some useful nuggets that I have been reminded of on this trip, New Year’s resolutions for this year and every year, if you will:

Ask good questions.
Be thankful.
Don’t leave important things unsaid.
Drink more water.
Eat right and enjoy it.
Exercise regularly.
Leave work at work.
Make time for friends and family.
Spend quality time with your spouse.
Watch less TV.