Friday, October 26, 2012

Republican Marketing Genius

The fact that Mitt Romney is in a dead heat with Obama is evidence Republican's are very good at Marketing.  Consider these facts:  

1.  There are always significantly more registered Democrats than Republicans. 

2.  Empirical historical and economic data show that over the last century the country generally suffers economically when Republicans run the show, and generally does well when Democrats run the shoe.

3.  Empirical historical and economic data show that over the last century the countries national debt generally shoots up after Republican's have run the show, and levels off or falls when Democrats have run the show.

4.  Within the recent memory of most voters Republicans controlled Congress from 1995 to 2007 and created the conditions that caused the financial collapse of 2008-09 which bogged us down in recession.

5.  Mitt Romney's stated economic theories are rooted in beliefs and assumptions identical to the theories the Republican's put into effect between 1995 and 2007 (and also between 1919 to 1933 that led to the great Depression), and indistinguishable from George W. Bush's campaign rhetoric.

6.  Barack Obama took office in January of 2009 when the economy was in free fall.  The economy shrunk something like 4% in the couple months before he took office and we were losing a million jobs a month.  He was like a Dr. who arrived at the scene of a crash as the patient was bleeding out.  His administration stopped the bleeding and has the patient well on the way toward recovery.  We have now had a couple of years of modest growth while Japan, Europe and the other large economies also sucked into the economic collapse we spawned in 2008-09 are still mired in recesssion.   

7.  After Republican's took over the House in 2011 their publicly stated policy was to prevent Obama from having any success that would help him get re-elected.  They put their policital agenda ahead of the countries business.  They played the major role in making the 2011-13 Congress statistically the most do-nothing Congress in history.

On these objective facts the Republican's should get obliterated in this election.  The vast majority of voters who are not political and are most interested in figuring out who is going to do the best job for the country should, on these simple facts, vote for Obama and the Democrats.

But it is the facts that have been obliterated.

I thought the Republican's made a crucial mistake about a year ago when they decided to have 12 or 13 televised debates to choose their candidate.  I thought it would educate the public about the nonsense of many of their positions.  To some extent it did, Republican's have garnered alot of votes over the last couple decades by appealing to voters prejudices about gays, or their outrage about abortion.  Both of those issues have lost most of their ability to generate more votes than they lose for Republicans (for the moment).

But the much bigger problem for Republican's in this election was economic.  They controlled all the levers of Government in the years leading up to the worst financial collapse since the great Depression.  How does one distract voters who lived through those years from that simple, damning fact?  

Their answer, which seems to be working, is to inundate the public in politics until they are sick of it.  Endless debates, coupled with unprecedented advertsing blitzes on every possible media, have created a sort of fact fatigue.  Voters have jobs to do, families to take care of, and want to have some fun.  They don't want to spend their spare time sorting through the overwhelming avalanche of information that has descended on us all.  

Once fact fatigue is in place the simple principles of marketing that business Republican's are so very good at can be effective.  Appeal to emotions with simple messages, and happy images.

It reminds me of the US auto industry that used their marketing expertise to sell us tail fins and images while the rest of the world was developing better cars.  Eventually the US auto industry hit a crisis point where a critical mass of consumers realized the US auto industry were selling lousy cars.  The US auto industry has never fully recovered.

So when will voters realize the Republican party is selling lousy economics?  

Not yet evidently.  A tip of the hat to Republican marketing, a razzberry for putting marketing ahead of good policy.

Wednesday, October 24, 2012

Health Care Policy - Hiring Caregivers - An Example

Republican's are convinced that Government should have no role in in health-care - at least that is what they profess on the campaign trail.  My experience has been that it is private business that is not good at balancing making a profit with good care.

Some years ago I was handling care for a loved one who had a debilitating disease that eventually required almost constant care.  At a point, as her needs got more acute, I had to start hiring caregivers to take care of her during periods I could not cover.

There are many private sector companies offerring to provide caregivers for a fee.  I turned to a private company first, since that is the easiest and quickest solution.  It didn't take long for me to learn you don't get much for your money with private company caregivers.  The problem is built into the market.  The companies don't want you to get to chummy with a particular caregiver, since you could hire them directly at probably 60% of what you were paying the company, so they moved the caregivers around constantly to keep them from forming relationships with the patients.  This not only disrupted the ability of the patient to bond with the caregiver, it also meant every couple days a new caregiver would arrive who knew nothing about the patient, or the patients needs, or the routines of the household.  Because the caregivers were being moved around so much they lost interest in forming relationships with the patients and saw no reward in doing good work.  They were just punching a clock, doing as little as they could, getting out of the house as soon as they could.

So although it took a lot of my time, I ended up interviewing and hiring caregivers directly.  I found the County maintained a list of caregivers.  The county did background checks, and provided for bonding as a requirement for a caregiver to be on the list, and set a specific amount as the minimum the caregiver could be paid.  Over the next year or so I found a number of really hardworking, caring caregivers on the county list.  

At one point I got really busy and didn't feel like I had time to interview people, so I hired another company.  I had the same experience as with the first company.  So I went back to interviewing.

Now other folks I know around my age are confronting the problem of caring for an aging parent.  They often live a long way from the parent, or work all day, so they hire companies to provide assistance.  They have the same problems.  No continuity in care.   Caregivers pushed by the companies to get in and get out quickly so the company can send them to a bunch of different people in a day.  So the caregivers do little beyond show up for awhile.  

Unfortunately the option I used is generally no longer available because those county offices that maintained caregiver lists have been decimated by budget cuts, impelled by the financial collapse of that other "free" market on Wall Street.

Sunday, October 21, 2012

And The Greatest Generation begat the Greediest

A few years ago there was a lot of celebrating the WW II generation that was reaching the end of their time. It was a whole generation who went to war as a country, instead of hiring people who need the money, to defeat facism.  The people who stayed home endured rationing, the nation took on an enormous debt, and millions of soldiers died.

Then after the war was won that generation came home, had lots of babies, and dominated the country from 1945 until 1980.  They supported candidates who voted to impose heavy tax burdens, particularly on the wealthy, to pay down the war debt.  They believed in our democratic Government because they had seen how government had saved the world from greedy, power hungry fascists, and many were old enough to remember how big business had blown up the world economy in the 1920's.

Then their kids grew up.  As the 1980's dawned the kids began to dominate politics, just by sheer weight of numbers.  They elected people to Congress who cut taxes, but somehow forgot to cut expenses to match the lost revenue so the country began sinking into debt again.  They bought into the notion that business is good and government is bad.  Then they cut taxes again, and again, still ignoring the fact the National debt continued to rise.

Here are some statistical facts from an Economist article (*) that sparked this blog.  

In 1981 the federal tax rate for a median income American household was 18%.  Today it is 11%.  The drop in tax rate correlates with a rise in Federal debt.  Boomers also supported politicians who granted an expensive prescription drug benefit without bothering to figure out how to pay for it.  One economist calculates the average baby boomer can expect 2.2 million dollars in net transfers from the Federal Government (SSN, Medicare etc) over their lifetime.  Those aged 65 in 2010 may receive 333 billion more than they pay in taxes, 17 times more than what someone who was 25 in 2010 is likely to receive.

The debt involves more than just money.  Annual spending on infrastructure (roads, bridges etc) dropped form more than 3% of GDP in the early 1960's to less than 1% today.  We have a big infrastructure debt.

There is no quick fix.  By 2030 the over-65 voting age population in the US will rise from the current 17% of total voters to 26%.  Older voters won't like inflation. so the Fed will have limited powers to inflate the national debt away.  

We boomers have painted ours kids into a corner.

*  Economist, September 29, 2012, p.75 "Sponging Boomers"