Laurie pointed us to this interesting view of our current reality. Star Tribune: Future so Bright Being somewhat of a financial conservative and being firmly entrenched in "Economy 1", it of course makes little or no sense to me. I can not understand why we would delay making Healthcare, Education and Government more efficient.
From the article, it seems David thinks Democrats see these industries as "make work" industries to keep people from becoming unemployed. (ie like Economy 1) The problem is that these are anchors that are preventing Economy 1 and the USA it's people from being as competitive as the USA could be in our Global World.
Check out the 7 wastes that are listed in these links. Wiki Toyota Production Systems Wiki Lean I realize that many of you will say that these only apply in manufacturing. (ie doesn't apply to me/us...) I realize this because I have the same discussion with office personnel at work. Then I have to help them stretch or change their paradigms. The reality is that paperwork, data, information, etc can all be impacted by the same wastes. I know this because my specialty is improving the effectiveness and robustness of office processes. (ie reducing waste and opportunity for errors)
One of my favorite Peter Drucker quotes is "There is nothing so useless as doing efficiently that which should not be done
at all.” Yet that is what most waste is... I am thinking that Economy 2 folks are suffering from a Scarcity mentality. (see below) And they need to work towards having an Abundance mentality. Meaning that there will be plenty of jobs and money if we get rid of the wastes. They will just be in wealth creating areas rather than wealth wasting areas. Thoughts?
Think Exist: Peter Drucker Quotes
University of St Thomas: Frederick Zimmerman Articles
Simple Dollar: Scarcity and Abundance Mentality
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7 comments:
The reason we can't make health care more efficient is that those who are involved in it are too deeply entrenched and politically powerful. In some very important ways, we don't want to make health care efficient in any important way.
As for education, efficiency simply isn't a value we seek. We spend lots of money on the most expensive things, in particular special education. We don't fire our inefficient students. We maintain multiple school systems. We maintain neighborhood schools. We want our kids to have bus service, and school lunches. We want them to have AP classes and Spanish immersion.
--Hiram
People don't want government to be efficient. They like Saturday postal delivery, and post offices in their towns. J. Ewing very much wants the Secretary of State to check registrations for millions of Minnesotans every two years. Any effort at all to limit health care costs is fought with fury as socialism, communism, rationing or death panels. We build bridges to nowhere in the off chance that they will eventually go somewhere.
Government is our way as a people of providing that which is inefficient, but that we need.
--Hiram
I think Drucker's comment is apt. We have become very good at doing things that are very bad for us. Efficiency is an economically and morally neutral value.
--Hiram
I think the point to be made is that Economy II will eventually die of its own vast obesity and indolence. Or Economy I will starve it to death. Even now, health care is controlled mostly by government, and so competition is flourishing on the side-- call it black market or whatever. Public education likewise is bloated and ineffective, while competition slowly circles around it. You can't offer higher prices and poorer results forever, no matter your "business."
J. Ewing
Even now, health care is controlled mostly by government, and so competition is flourishing on the side-- call it black market or whatever.
Can you buy an appendectomy on eBay?
--Hiram
Garbage collection... Does anyone want it to return back to Economy 2? Are they willing to pay for it?
In the relatively recent past it would take 2 or 3 people to collect your garbage. (ie 1 driving, and 1 or 2 loading) The upside is that you were providing 3 full time jobs that paid pretty good and required almost no academic qualifications. The down side is it was hard work, prone to injuries, employed extra personnel and the cost were transferred to you. (ie the customer)
With this in mind, should we get rid of the big containers and the trucks with the arm that grabs and dumps them? (Economy 2) This would create jobs... Of course they would be pointless wasteful jobs with regard to helping America compete in a Global Economy.
I think Economy 2 is simply created by fear of change. Employees are rightly worried that they will be made obsolete by the new technologies and automation. My local Blockbuster employees were recently replaced by RedBox and Streaming because folks were unwilling to pay for their salaries. (I miss that store... They had older movies that the girls liked to watch again and again...)
Now the questions are... Are we going to let this fear of change and scarcity prevent us from seizing opportunities to reduce waste? (Economy 2) Or are we going to face our fears, believe in abundance and continue to retrain and adjust with the times? (Economy 1)
Unfortunately I disagree with J, I think it will be easier for Economy 2 to starve Economy 1 to death. The only upside is that then Economy 2 will also die, and we will get to start over. (ie Atlas Shrugged) Now that could be painful...
Brooks is a talented writer but his strengths have to do with politics not economics. His second economy, one not subject to global competition is a lot more extensive than he lets on. It includes service industries, real estate, construction, agriculture, all that local stuff. And of course, there is really no fine line between the first and second economies. Agriculture, for example, grows products for both domestic and global consumption. Brooks also seems to implicitly assume that his second economy isn't competitive simply because it isn't globally competitive. Brooks' columns often remind me of state fair food. They hold together for a moment or two, but they just do not last.
--Hiram
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