Change You Can Believe In

I was recently alerted to an article that highlighted a recent challenge to the federal 8(a) program. As you know the 8(a) program seeks to help small disadvantaged businesses compete in the American economy and access the federal procurement market.

Quoting from the article,

“A federal appeals court has thrown out a law establishing a 5 percent goal for awarding defense contracts to small businesses owned by socially and economically disadvantaged individuals. The decision has the potential to invalidate the small disadvantaged and 8(a) contracting programs, which help socially and economically disadvantaged firms win billions of dollars in federal contracts every year.”

Some comments to the article have struck the familiar chord of discontent. “I just don't see how anyone cannot see how this is discrimination.” Or “I have always argued the fact that to be truly equal we must use other criteria for evaluating people (in this case companies); vice by the color of their skin. All small businesses should be considered on their financial status only in considering their disadvantaged status.”

Sure these comments lack a full understanding of the 8(a) program, but despite the underlying ignorance the response is familiar and galvanizing to an influential segment of the population. However, I always thought the cries of “reverse racism” and/or “reverse discrimination” were the weakest arguments against these programs. The true measure of the policies to support women and underrepresented minorities would be the effectiveness with respect to closing the educational, income, and opportunity gaps.

On some levels we have seen improvements. On many we have not. A currently popular argument (see TARP 1) is that things would have been worse if these programs had not existed. It looks like we will be able to test that hypothesis.

Whatever You Say Boss

Our new President gave his first press conference two nights ago. He addressed the nation in the midst of our worst financial crisis since the great depression. He was direct, convincing, passionate and thoughtful. The tenor of the press conference was completely different than his predecessor. Even the constitution of the press corps reflected a change in the Washington political dynamic. Very cool.

But for all the differences, I got the eerie feeling of déjà vu. "We must act quickly". "This won’t be perfect". "We have to do something". The certainty of the conviction for a such a monumental decision ($850 billion is about $200 billion more than the cost of the entire Iraq War thus far) is reminiscent of the last administration, whose confidence and bravado in the face of questionable decision making was disheartening.

The stimulus package is confusing. I used this analogy in a conversation with a colleague.

Imagine this conversation between a father and his college aged son

Son: I am strapped for cash again. I am in a bind and need help immediately.
Father: Why
Son: Books are expensive for all the lab classes I am taking
Father: Books are a known college scam. How much are the books?
Son: Books will be $300.
Father: I can send you a check for …
Son: (interrupting) Make it out for $4,200.
Father: Huh
Son: Well, books are $300. But I need pens and pencils and notebooks and stuff, $50. I need to put a down payment on my study abroad program in the summer, $4,200. I will need money for student dues and lab fees, $50.
Father: And I have to decide now.
Son: Give me the money now or all is lost.
Father: Well everything you outlined is more than $4,200.
Son: Yeah, well I am only going to buy $200 worth of books. And to be honest the total cost of the summer program will be $20,000.

The conversation seems crazy but this is our stimulus package. We are providing less than half of the money needed for “shovel ready” projects. We are being forced to decide now on expenditures that won’t happen for months. We are only providing a small down payment on the necessary long term projects. My example couldn’t account for other challenges such as uncertainty that we are spending enough in the stimulus plan or too much. Plus, there is legitimate dissension that this is the right approach. Tax credit to new home buyers, what about existing home owners? etc. etc.

But in the end I like our President. Plus putting a down payment on green jobs and new schools and trying to create construction jobs and extending entitlement programs are all good things. Let's hope it works. So despite my misgivings, I trust his values and integrity and I am willing to give him the benefit of the doubt. He deserves this chance.

Inaguration - Our Last Celebration?

As I think about the historical significance of the inauguration of Barack Obama, I am struck by the number of historic firsts achieved by African Americans during my lifetime.

• Secretary of State: Colin Powell, 2001.
• Female Senator: Carol Mosely Braun, 1992.
• Female Astronaut: Mae Jemison, 1992.
• Winning Superbowl Head Coach: Tony Dungy, 2007
• Winning NCAA Basketball Championship Head Coach: John Thompson, 1984
• Ivy League President: Ruth Simmons, 2001.
• Oscar / Best Actress: Halle Berry, 2001.
• Golf Masters Champion: Tiger Woods, 1997
• Billionaire: Robert Johnson, 2001.
• Miss America: Vanessa Williams, 1984

Each one of these achievements sparked a sense of pride and reaffirmed the American dream that one can achieve the highest levels of success with determination, talent, and perseverance. These “firsts” also helped to dispel that skin color was an insurmountable deterrent. My mom told me I could do anything – and I believed. Mostly.

But as we celebrate these individual accomplishments I am also struck by the absence of societal gains. By all measures the income gap between African Americans and the majority population has increased. So has the educational gap, incarceration rates, life expectancy, and wage. Continuing with this list would just be depressing.

Why haven’t we been able to capitalize on Robert Johnson’s financial acumen to create more wealth in black communities? Why haven’t we been able to build upon Ruth Simmon’s talents in education to improve the reading and math skills of the African American youth? Why haven’t we been able to get more African American head coaches in College Football despite the obvious success and talents of the few African Americans that have been given the opportunity to coach at the professional and Division I level?

Why? Because we no longer focus on achieving societal goals - integration, equal access, voting rights – we are now defined by celebrating individual accomplishments.

Barack Obama’s Presidency marks the most significant individual African American achievement in our nation’s history. What will we celebrate next? All other individual accomplishments for African American will undoubtedly pale in comparison. I hope I witness something else, something noteworthy, something societal, to celebrate in our lifetime.

Why Lebron Should Come to NY

Look, the NBA League Offices aren't colluding to put Lebron James in NY. Nor does it need to. The NBA wants Lebron deep into the playoffs. Whether that is with the Cavs, or the Knicks, or Boston, or Detroit it doesn't matter. Wouldn't the NBA be salivating at a Cavs vs. Lakers Final - Lebron vs. Kobe? The worst thing for Lebron and the NBA is if Lebron goes to a team with no title hopes. But that won't happen ... neither side would let it happen. So why should Lebron come to NY?

Reason 1. Global ICON. Lebron wants to be a global icon. He has already played league sanctioned exhibition games overseas. He has been and will be a fixture on U.S. international teams. His sponsorship deals are noteworthy for their scope and breadth. He has done all of this from Cleveland. But in NYC - King James presumably can invest his wealth and brand into other business ventures. Go international. Easier access to Europe. Easier access for others to him.

Get Real. Who are we kidding? He is not going to NY to cut investment banking deals or start a mutual fund. The most logical business extension for an athlete is entertainment. Movies, TV, Radio, Music, etc. are all facilitated from either LA or NY. You don't hear artists leaving their families and trying to make a name for themselves on Ontario Street in Cleveland. Just guessing but doesn't KJ (King James) clothing sound about right. Or how about King James Records. Or KJ Production Studio. Whatever. If he wants to make money and influence others through culture and through entertainment he has to go to LA or NY. LA isn't a viable option so NY here we come.

Reason 2. Winning and Winning with Style. Cleveland is one of the top 5 teams in the league with a legitimate chance at the title. But Mo Williams and Delonte West aren't drawing comparisons to the Showtime Lakers. They grind out victories with defense and a over reliance on King James' greatness. That is a winning formula - albeit boring and physically taxing on him.

If he comes to NY he could be paired with Dwayne Wade. Steve Nash, Tracy McGrady, and/or Marcus Camby might sign mid-level exemptions just to tag along for a title. They would be playing a fun, less stressful, up-tempo, score as many points as you want style with NY coach D'Antoni. He could redefine how to win in the NBA. Offense wins championships - not Defense. He could win on new terms. He could help change the perception of the league and make basketball more exciting for all fans. Either the coach, style, or market attractiveness would not work for any other team in the league. NY gives him his only shot at winning with this new style for a coach he likes for teammates he truly respects.

See you in NY in 2010 Lebron!

10 Questions Post Election

1. Are we expecting President Elect Obama to appoint African-American's in prominent positions in the cabinet? (see George W. Bush). Should we expect it?

2. Is the election of Barack Obama help or hurt the cause for affirmative action? Now, try to argue the other side

3. Would "we" have celebrated like this if President Elect Obama were Republican?

4. Did President Elect Obama really bring the country together with 53% of the vote?

5. Would it have mattered if McCain picked a more 'reasonable' running mate? (say Lieberman, Guiliani, or Romney)

6. Would we have 'celebrated' like this if Hillary were elected President?

7. Should we have been so surprised that an African American was elected president considering the relative rise of African American in other walks of life (industry, finance, sports/entertainment, etc.)?

8. Is this the last 'symbol' of advancement needed for African Americans in the U.S.?

9. If President Elect Obama presides over our exit from Iraq and the "turnaround" from our financial crisis will he be viewed in the same light as Roosevelt?

10. How much money will President Elect Obama make off of his next book?

Report Card Continued - On the Issues

In my last post, I evaluated the relative readiness or experience of the candidates for president. But experience is but 1 of 3 factors in my mind. The other two are Position on the Issues and Personal Characteristics. Here we will delve into who has the best ideas on the issues that matter.

So, what are the issues that matter to the electorate? Recent polls from Newsweek, CBS, and Fox conclude that the Economy, "War on Terror", and Healthcare are weighing most on the minds of people ... with the Economy dominating the discussion.

1. Economy.
In doing my research for this analysis ... I became overwhelmed. There is so much to consider with respect to goverment spending, corporate taxes, individual taxes, response to the global recesssion, etc. Yet, so much of what the candidates say are subject to change based on the current financial conditions. In the end, I found them to be relatively even with a slight edge to ...

Interesting Fact. Currently the top 5% of people pay 20% of their income to taxes, whereas the bottom 50% pay only 3% of their income to taxes. And the top 5% have been paying a greater portion of the overall taxes in the country. For example, in 1980 the top 5% of Americans accounted for 36% of tax revenue. In 2006, the top 5% of Americans accounted for 60% of tax revenue. On the flip side, the top 5% of Americans were making about 20% of all income in 1980 and they are now making 36%. So the rich are getting richer ... but they are also paying a lot more. (Top 5% is roughly an Adjusted Gross Income of $150K)

Obama: B. I thought some of his corporate tax cuts (research credit, tax cuts for creating jobs, etc.) and pay as you go philosophy are strong. But he could do more to help corporations and his unclear stance on free trade is not the best. Both he and McCain have missed the mark on the bailout or rescue plan. Finally, he really wants to help the poor and middle class with additional tax breaks - even on top of the current bailout plan. I am not convinced it is necessary or that it will work but I understand that these cuts are probably overdue.

McCain: B-. His corporate tax cuts are more aggressive and therefore more favorable and I think he understands that the excessive spending in DC requires a hatchet job. However, he losses big points on his economic response to the financial crisis. He didn't have the political courage to promote or stick with his idea to help homeowners.

Btw ... personal view is that corporate tax cuts creates jobs, individual income tax cuts promotes consumption. Both are good and needed for our economy, but I think corporate tax cuts are more needed.

2. War on Terror.
Who knows what that means, I will assume War in Iraq and Afghanistan.

Obama: B. His time line for withdrawal was always couched by "conditions on the ground", so it is hard to disagree with his approach. Hunting down Osama Bin Laden in Afghanistan is a mistake that will reach Iraq proportions. War in Afghanistan will cost billions, cost many American lives, and require reconstruction in order to ensure long term stability ... sound familiar

McCain. B. His time line for withdrawl was linked to "conditions on the ground", so it is hard to disagree with his approach. Hunting down Osama Bin Laden in Afghanistan using a "surge" strategy is a mistake that will reach Iraq proportions. (see above)

3. Healthcare.
First, let's recognize that neither has a good chance of planning any credible reforms to Healthcare due to our current economic crisis. That being said ...

Obama: B+. Generally more economists and more doctors support his plan. His plan will probably cover more people, especially people with preconditions. The downside is that we are still left with an employer based system and he doesn't do enough to lower the overall costs in the system.

McCain: D. If he were as articulate as Obama, he would state that employer based health care will never get us to universal health care. He would argue that running health care from DC will never be an efficient use of taxpayer money. He would point out that increased competition is more likely to reduce overall health care cots. However his biggest mistake was not finding a way to cover people with preexisting conditions.

So, wrapping up ...
Obama's GPA: 3.1
McCain's GPA: 2.2

Next Up, Personal Characteristics ... Leadership, Intelligence, and Likeability

Readiness Report Card

The more I pay attention to politics, the more I regret paying attention to politics. The issues of today and tomorrow are incredibly complex and I am not confident that either ticket has distinguished themselves in their ability to respond and react effectively. So, I have decided to decompose each ticket based on their readiness or experience along key Presidential/Executive responsibilities. This is not a measure of how they would or could perform in office. No. This is more a cursory analysis of their relative experience to manage each responsibility.

Here are the criteria for the report card: 1. Financial Management, 2. Foreign Affairs, 3. Commander in Chief, and lastly 4. Legislative Ability.

1. Financial Management.
Sara Palin: D+. Responsible for $11Bn budget for Alaska (but no state taxes), plus multiple campaign budgets. Both pale in comparison to the scope and complexity of the federal government. Doubt she or any of the other candidates understand the complexities of our markets, our regulations, or the solution options.
Barack Obama, Joe Biden, & John McCain: D-
They have each raised millions of dollars in contributions. Barack in the order of $400 million ... but John and Joe have managed campaign contributions for more cycles. Nonetheless the D- is generous for each.

2. Foreign Affairs.
Joe Biden: B+. Long time outspoken member of the foreign relations committee. Now chairs the committee.
John McCain: B-. Foreign policy experience rooted in military experience, reestablishing relationships with Vietnam, and Armed Services committee.
Barack Obama: D+. I guess meeting foreign dignitaries counts for something.
Sara Palin: F. Nothing to write, must be an F. I almost kicked her out of our esteemed institution based on the academic dishonesty of the proximity to Russia argument.

3. Commander in Chief.
John McCain: A-. Credible military record of success and results beyond POW experience. Ranking member of the Senate Armed Services Committee.
Sara Palin: C-. As a Governor, she is the commander in chief of the state military forces and must comply with national security directives. Petty, but it counts.
Joe Biden & Barack Obama: F. Please alert me if I am missing something.

4. Legislative Ability.
John McCain: B. Has credible national examples of bi-partisan legislation. Served in both the House and the Senate.
Joe Biden. B. Well respected member of the Senate. Started career as an anti-War candidate, pro civil rights, and "change". Sound familiar. Can also credit authoring national legislation.
Barack Obama. C+. Not much national legislative experience. Gets some credit for responsibilities in Chicago and Illinois.
Sara Palin. D. Acting as mayor and governor doesn't speak to your ability to author and pass federal legislation.

GPA's
McCain - 2.52
Biden - 1.74
Obama - 1.07
Palin - 1.00

This would appear to be directionally correct. But I shouldn't compare them individually. Let's compare the ticket. If you take the best scores from each of the categories the result would be ...

Republican - 2.68 (Palin adds some points in the Financial Mgmt Category for McCain)
Democratic - 1.74 (Obama doesn't help Biden)

Experience doesn't guarantee success ... but it would sure help me feel better about my vote. McCain seems to have the most experience but B-/C+ students don't always engender the greatest amount of trust.