Intelligence, Please…

The economic potato. See below

All of you need to get your act together, stat. Many of you are still operating in a sort of “pissed at Obama” mode that clouds judgment. You sit there, eating the finest of crabcakes and lobster from the East Coast, unaware that the powers that be have every intention of ripping even the lobster from your mouth. Either you take things too seriously or not seriously enough, or both.

The grand exit from this recession, desired by many, is not going to come in the way that the politicos, economists and financial planners believe it will. They (and many of you) are watching things like housing numbers, consumer spending, etc. for clues to the end of this situation. At the same time, they are decrying Obama “job-killing policies” and saying that mess like “austerity” will somehow fix us.

Idiots. If anyone thinks that austerity is some sort of magic pill that’s going to pull us out of the recession at a rapid-fire pace, they are, in a word, wrong. Austerity has all the possibility of throwing us into Great Recession Round 2, if not approached with the appropriate style. I only endorse austerity as the current Administration (and its enemy Republicans) have no notion of how to use stimulus of any sort.

Clearly, everyone has forgotten what makes successful economies happen. Successful economies occur when gentlemen with large brains see some way of capitalizing on gaps in the market and exploit them. We enter epic economic booms when the world is revolutionized, as was witnessed in the technology bubble of the ’90s. Investors, economists, politicians, etc. are so concerned about bubbles that they have forgotten the benefits of the Internet investment cycle. You are reading this post as a result of those investors and innovators alike. You will see it tweeted later today. The Internet has become so commonplace today that investors have forgotten the risks needed to put it in place.

The 2000s was not an investment cycle like the Internet cycle. We, as a country, did not do anything new. We built and upgraded many houses using styles familiar to architects of the 1990s. We purchased many consumer goods from China. And we patted ourselves on the back as we transitioned to a “service” economy.

I have no issue with a service economy in principle. However, if the economy can be compared to a baked potato, we have forgotten to cook the actual potato out in favor of making amazing butter for it.

When I state that neither the Democrats nor the Republicans understand stimulus, I am talking about potatoes. Democrats have decided to pursue a course of adding salt to the uncooked potato with poorly directed stimulus funding – in essence, by randomly injecting liquidity into the system. Republicans, on the other hand, scream “tax cuts” or “bacon bits” for the potato. Tax cuts for whom? Bush-era tax cuts seem to indicate that unconditional tax cuts do not spur real economic growth in a risk-averse populace.

Before I draw the fire of the conservative types that accidentally read this blog because of George, bear in mind that I am not unilaterally opposed to stimulus or tax cuts. I’m merely saying that neither party seems to be able to do it right. Neither one is cooking the potato.

Thus, I condone the use of austerity, so long as spending reductions outpace any sort of tax cuts. I am not in favor of false austerity, where spending is cut only marginally. If we’re going to do it, we must go big – and here’s why.

1. There are reasonable long-term concerns about the deficit if we are expected to take charge of world growth again. Europe’s debt situation sucks, in a word. China’s looking like its growth may be a little long in the tooth. Latin America doesn’t seem to have the special sauce. So, if it is to be us to take up the economic torch, deficit-reduction plans should be in place.
2. It would be far easier to negotiate currency terms with China if we didn’t need them to buy so much of our debt. Asking China to keep buying our debt and loosen the peg on the yuan is a mutually exclusive request.
3. It would send the message to our corporate overlords that there are no more bailouts coming. Why should any company invest any more? If you wait long enough, Congressional Democrats will inevitably throw a bone out there. So far, they’ve covered the financial sector, the health care sector, the automobile sector, and probably the state governments next. The risk of spending your own money is a fool’s gamble when there’s money flying out of Washington.

While the first is a concern, the second and third bullet points deal with the heart of why austerity must be done with a purpose instead of half-assed. Austerity only works if we intend to send a message. Otherwise, long live record low interest rates and epic amounts of government debt.

There are two parts to this potato. This merely discusses the first – that austerity must become a part of the economy in tandem with the second half of the potato. I shall discuss the second half of the potato in my next post.

I am merely here to raise a few questions for my own ponderings, offering no opinions or things of that matter.

Admittedly, I voted for Obama. I chose to look past any skeletons in his closet or hints at whatever his political beliefs shaped up to be. If you are so inclined as to tell me “I told you so,” in the comments of this article, you have missed the point. I will be most happy to delete said comments, with the authority vested in me as site administrator. The point, currently, is not Obama vs. McCain vs. Barr vs. Ron Paul. So if you want to play against Obama specifically at this point, go find Mr. Scoville’s blog, where you will find ample opportunity to comment.

My musings instead turn to higher things.

As many of you may know, both my philosophies on blogging and the markets have been heavily drawn from Mr. Fly at iBankCoin.com. There are few individuals who draw regular readings from me, but Mr. Fly is one of them. On the whole, Fly ignores typical arguments against big business and focuses instead on making money. Yet he made a special exception for BP.

I shall not quote the article in whole here, as it is filled with countless vulgarities which you are more than welcome to view yourself. I shall instead edit it in a manner that I believe is in line with primetime network censor rules:

I don’t think I have ever hated corporations, like I do BP, CAM and RIG. Sure, I’m a big capitalism guy, always rooting for the middle class guy to get milked of his paycheck and all. But, this whole Gulf of Mexico “accident” situation is getting a bit lame. … A lot of you are corporate bitches, always rooting for the bad guys because you think they represent enterprise. WRONG. Those assholes represent oligarchy, not capitalism.

He continues with the next post here:

All of your theories about the economy, government, and life in general, are abhorrent lies. You believe said lies, for the same reasons why you believe communists are going to hell, while big hatted oil men will be going to heaven. … Whether you want to acknowledge it or not, we are living in a world without morals, rules or decency. I imagine the world has always been like this, just not as brazen sans the medieval era.

As for myself, Mr. Fly finally showed me that I am not the only good pragmatic small governmentalist thinking that the lack of action from the Obama administration is just plain wrong.

I ask you, each and every one of you, especially the conservatives who read my blog as an extension of George’s (and I am grateful to be alongside such an individual) – what would you have the government do? And who has the dignity and consistency to do that? Ms. Palin and Mr. McCain, were they in office, were all “drill, baby, drill” – the kind of thinking that drove this catastrophe. It appears that there are two thoughts on offshore drilling: either jump in the ocean and damn the sharks, or don’t go in at all. I ask you this – what should the policy be, and who has consistently chosen to advocate for that policy?

I am generally opposed to most everything the Good President Obama does these days, which is frustrating. It’s frustrating because I generally agree with everything he starts to do, then he goes and lets Washington rip it all to pieces.

I will remark that, the more I consider it, the Goldman lawsuit was a brilliant piece of Chicago-style politics. It will be even better if more banks are sued until they capitulate, but I rather doubt they will. If Mr. Obama wishes to reform the financial culture, he is going to need to play to the inherent assumptions of that culture.

Mr. Obama is forgetting that the people who really “run” the financial system are individuals like the Fabulous Fab over there at Goldman Sachs. There are also small-time yet influential players like my good man “The Fly” over at iBankCoin. There are hundreds of thousands of traders, some with copious amounts of cash to throw around. We (I trade as well) have no interest in your pitiful sense of what investing “should be.” We are interested in making money off each other.

The banks will always find loopholes in the system. If you try to regulate them, they will find opportunities in your regulations and exploit them. This is the natural function of financial institutions – to capitalize on opportunity. If you allow them bailouts when they fail, they will fail in great numbers because you have completely screwed with their sense of risk and reward.

Classical economics has plenty of flaws, but it is certainly hinting at something here with the concept of price ceilings and floors. In this, government forces prices within a certain range for its own purposes. This was the purpose of Freddie Mac and Fannie Mae – to set a ceiling on the cost of owning a home. Banks, however, were not interested in abiding by that cost if they took on low-income borrower credit risk. Thus, Fannie and Freddie had to accept that credit risk themselves, to perpetuate the ceiling. Fannie and Freddie are currently in shambles and Goldman’s Truth is Marching On.

We have two players in the game of the Financial System: the Banks and the Government. The Government is attempting to play by the rules of flag football, where grabbing the butt of your opponent is enough to stop them. The Banks are playing by the rules of smash mouth, goal-line-stand, SEC-style football, where grabbing the butt of your opponent is really just awkward and cause for a beatdown on the next play. If you wish to stop the Fabulous Fab, a.k.a. Tim Tebow, you’re going to have to bring in your Alabama defense and make him cry like a little girl.

So if you want to regulate the banks, get the flag football team out of the way and unleash the big dogs on each other.

I like Mankiw’s idea, referenced in the post above, about forcing the banks to issue credit-monitoring bonds, convertible to equity on certain conditions. I might add to this idea that such bonds must be issued any time a bank wishes to “lever up” past a certain number, somewhere in the realm of 5-10x equity. Should these bonds be forced into conversion, the equity will be diluted and the shares of the officers (past and present) will be diluted as well, giving incentive to the officers to not be idiots. And who, might we ask, will end up trading these bonds? The banks themselves, who are more than willing to gobble each other up, a la Bear Stearns or WaMu. Combo this with forced disclosure of all derivative positions and watch as the banks smack each other into line at the first sign of weakness.

But, as we can see, this is not the current plan of the administration. Instead, the Good President Obama will argue for increased regulation under the assumption that the administration will be able to stop further problems. Because, of course, they have such a phenomenal track record.

Immigration is one of the two ‘political’ issues I absolutely HATE reading about.

Arizona just passed a new Immigration law that everyone is calling the toughest in the country. And everyone from President Obama to some guy in Iowa has an opinion on it. What does the law do?

The law would require the police “when practicable” to detain people they reasonably suspected were in the country without authorization. It would also allow the police to charge immigrants with a state crime for not carrying immigration documents. And it allows residents to sue cities if they believe the law is not being enforced…

Most police agencies or jails here already check the immigration status of people charged with a crime, in consultation with Immigration and Customs Enforcement, but the new law would expand that power and allows the police to stop people on the suspicion of being in the country without documents…

Some people say this will lead to racial profiling.

Policies do not lead to racial profiling. Prejudices do. If a police officer is going to pull someone over for being Hispanic, which accounts for 25% of the population of Arizona, they’ll do it regardless of any policy. What this law does is say “That’s ok.” And something tells me that if this legislation was endorsed by the AZ-FOP, then those cops would be pulling them over anyways.

Immigration is obviously a National Issue and the Federal government has ignored the immigration “problem” for a very long time. Arizona is one of many states that is doing what they consider necessary to “protect their state” or whatever.

Does that make the law good? Of course not. But is it unreasonable to think that states with vast numbers of undocumented workers would want to try to ensure that their own citizens don’t get the proverbial shaft when it comes to jobs, public services, etc? I don’t think so.

If the President is serious about the law being “misguided” then he needs to do something about it. Bring Immigration to the forefront of debate and sell the case, because it really is a human rights issue. The fault of illegal immigration does not lie on the immigrants but on the government for making them criminals.

Open borders means free trade and free trade means prosperity. You will be hard pressed to find an economist that doesnt hold that stance. And for a country that likes to tout our free market principles, we certainly do not show them when it comes to labor.

Ever hear anyone complain about getting a job outsourced to India or Mexico? When American labor gets to be “too expensive,” a company can either raise its consumer costs or cut its internal costs by finding cheaper labor. The only reason that we have outsourced jobs is because it is actually CHEAPER for Company X to lease out space in a warehouse in Country Y, purchase computers and supplies and ship internationally with Company Z, hire foreign employees A-V, and ship supplies back to our own country, than it is to employ American Worker W. And it’s cheaper to do that over a long period of time. Not to mention the opportunity costs wasted because managing an overseas branch has to be a pain in the ass. So I don’t think companies outsource jobs just for the sake of pissing off a few line workers.

I’m willing to bet that it would be better for business AND better for American workers to fix immigration laws that would actually ALLOW the business to move Employees A-V and their families from Guatalawherever to the states like some companies already do. But the costs of immigrating and a visa are ridiculously expensive and a bigger pain in the ass. Try to get a green card here. This is another barrier for entry that the government imposes on workers, no different than requiring a license to cut hair or answer a telephone.

But I think that the President will pursue a path that is preferred by voters. And by voters, I mean one of the fast growing voter demographics. I’ll bet money that the bill he or Congress proposes will be slanted towards hispanic immigrants, while ignoring people from the rest of the world, which is exactly what a “path to citizenship” does when it does nothing to generally loosen immigration restrictions as a whole.

So Democrats will appear to be the welcoming and embracing party who will ignore the real issue and Republicans will appear to be the racists who will also ignore the real issue. Sounds like politics as usual.

UPDATE: A group has vandalized Arizona’s capitol building by spearing refried beans in the shape of swastikas on the windows.  Sorry, but that’s kind of funny.

“John Marshall has made his decision, now let him enforce it!”

President Andrew Jackson allegedly made this famous statement in response to the Supreme Court’s ruling that a state could not impose its laws on Indian tribal lands (Worcester v. Georgia).

Earlier this week, President Obama issued a similar response to a US District court which ruled that a National Day of Prayer is unconstitutional.

In a Tweet, the White House said that regardless of the ruling, the president still “intends to recognize a National Day of Prayer.” The decision does not ban the president from issuing a proclamation, the White House said.

The President’s decision could serve as an opportunity for the Tea Party movement to prove itself as the non-partisan and purely ideological movement that it claims to be. From what I’ve gathered, one of the primary themes of the movement is constitutionalism, or even strict constructionalism.

How the tea party reacts to the President’s decision will help reveal what it really is. If it slams the President’s decision and sides with the Court’s interpretation of the constitution (which is now precedent until it is appealed), then then the movement may very well be as dedicated as it claims to be. If it praises the President’s decision, it may very well just be part of the religious arm of voters who doesn’t like bailouts, but doesn’t really know why.

If it makes no statement regarding the decision, then it really is dedicated to economic issues like it initially claimed and sees the National Day of Prayer as a non-issue, which would be my preference as a Tea sympathist.

——

As for my take, the President may be right when he says the decision does not ban him from proclaiming May 6 as a National Day of Prayer, as the First amendment speaks specifically of Congress.   The Judge who made the ruling said:

It goes beyond mere ‘acknowledgment’ of religion because its sole purpose is to encourage all citizens to engage in prayer, an inherently religious exercise that serves no secular function in this context,” wrote Judge Barbara Crabb, who said the Day of Prayer violates the First Amendment’s establishment clause, which bans the creation of a “law respecting an establishment of religion” in the Constitution.

So the Court’s ruling is that the statute that orders the President to issue the proclamation is unconstitutional, which can easily be remedied by the President making the proclamation on his own free will. I am pretty sure the 1st amendment does not apply to the executive branch. Someone please correct me if I’m wrong.

Read the Court’s opinion here.

I can appreciate the good people at Goldman Sachs, mainly because they’re complete assholes and people continue to buy their crap. You see, if no one has told you yet, I generally enjoy what I like to term “unmitigated douchebaggery,” which roughly translates to “doing whatever we want and laughing at you.” Thus, I was sad to hear that my good compadres at “The Sach” are getting sued by the most egregious of offenders, the SEC. Generally, I like the SEC, as they further my intentions of stamping on the face of the little guy, by way of offering him stock market assurances as he jumps into the Pit of Despair. But when they feel that they should actually do their stated job and sue on behalf of shamed investors, it just makes me sad.

My good buddy George, who does not appreciate the same things as I do, points out that “The Sach” took out anti-populist insurance policies at the height of the credit crisis. Given their probable complicity in causing said crisis, you have to be proud of them for orchestrating the collapse of two of their less crafty rivals and destroying the jobs of many fine American citizens who now have less money to purchase Double Downs. Said Double Downs, of course, were financed by the Most Wise of Insurers, striving to hedge their portfolios against the increased risk of Americans getting caught in door frames.

Thus, you must understand my utter glee when Goldman shorts itself after hearing that it’s going to get sued. Such things are most amusing to me, as they are truly proving that there is nothing you can do to stop them. Truly, they must indeed be doing “God’s work.“

Greg Mankiw (Harvard economist) brings up a particularly interesting point today. He references a Parade magazine feature (here and here) that compares salaries from all walks of life. There is no distinction between celebrity paychecks and “average” paychecks – indeed, the magazine disproportionately features celebrity salaries in their article. Mankiw makes this note:

By my count, about 14 percent of the people in Parade’s sample earn more than $1 million a year.  In the real world, the actual percentage is about 0.2 percent.  So, in a truly representative sample of a hundred people, you would most likely have zero, or perhaps one, person with a million dollar income.  Finding two would be highly unlikely.  14 would be nearly impossible.

Does this matter?  I think it might.  There is a common perception in some circles that we can solve all our fiscal problems if only we were willing to tax the rich some more.  Yet, in reality, there are not enough rich for this to work.”

Federal tax data shows that (in 2007) the top 1% of earners (over ~$400K) covered 40% of the total tax revenue. The top 5% of earners (over ~$160K) covered 60% of the total tax revenue. Now, using the assumption that the 2007 tax revenue would cover the 2008 budget, I present to you the 2008 budget spending percentages. What would you like to cut?

I respect the populist anger that governs both the Tea Party and Obama administration rhetoric. At the same time, however, I must take a pragmatic approach to fixing deficit issues. Taxing the rich isn’t going to solve the problem. Taxing the poor won’t help either. It’s not a tax shortfall that is causing the budget deficit, it’s the overall inability of the United States of America to continue spending at these levels. And, eventually, the piper will be paid.

(and before he is referenced in any comments: yes, I have heard of Mr. Paul Ryan. What I haven’t heard of, though, are the politicians willing to evangelize his exact message, word for painful word)

There has been much criticism that the newly elected health care package will bring medical innovation to a standstill. I do not believe it is beneficial to our country to make arguments like this without a counter-argument, and thus I shall provide at least one.

This particular case comes from the United Kingdom, a socialized health care system. The article describes an innovative new treatment that took place in a British hospital – indeed, the first treatment of its kind.

This is not to say that innovation will not be hampered, but merely to state that it would seem that innovation still continues in socialized systems.

NOTE: If you’re looking for the usual pithy political punditry in this post, you won’t find it. Not this time. This is purely a self-indulgent post. You have been warned.

At the first of the year, I wrote a piece about 10 goals I have for the year 2010 – yes, you read that correctly. “Goals.” I have a personal aversion to “resolutions.” Sue me. The post was titled “10 Things I Need Your Help Doing,” so this post is just a way for me to stay accountable – it’s a good practice. If you’ll notice, my friend Codey Holland is doing it too. It’s amazing what happens to a person’s life when he knows someone out there is listening. But enough of the set-up; let’s see how I’m doing:

10. Finish the first year of graduate school

• STATUS: INCOMPLETE
• Well, it’s still April, and the spring semester is still in full swing (fuller than I’d like, actually). But my Science & Technology course went really well, and was capped off by a presentation I gave about some of the problems I think stakeholders are facing in trying to develop national standards for the smart grid. I’m pretty sure that course – and my course on the politics of public policy – will be A’s. Second semester statistics is really the elephant in the room at this point, but a project on marijuana usage based on the 2007 National Drug Use Survey data is nearing the finish line.
• NOTES: I can’t really envision this one ending badly, but just to be sure, I’ll come back and update this in a month or so when finals have passed and grades are in.

9. Travel abroad

• STATUS: INCOMPLETE
• I haven’t traveled period this year, save for a day trip by car with Emily up to Delaware to visit my brother (and parents, who had flown up from Nashville to visit him). I have, however, looked longingly at vacation packages on the Internet that I probably can’t afford, and my friend Severan (currently on the ground doing economic development work in Jinja, Uganda) have talked about a Christmastime trip to either Zanzibar or the Seychelles. Maybe it’ll happen. Yeah. Maybe I’m a Chinese jet pilot (hat tip to Bruce Campbell and Sam Raimi).
• NOTES: There are so many x-factors out of my control on this one (the economy, my work and class schedules, etc.) that I have to think that I’d be willing to let myself off the hook if this one isn’t realized. I think I said as much in the original post.

8. Start and finish two books by two really smart liberals

• STATUS: INCOMPLETE
• I’m totally playing the school card here. Those of you who’ve been to grad school while working full time, back me up.
• NOTES: Yeah, I know. I’m lazy.

7. Begin learning CSS

• STATUS: INCOMPLETE…sort of
• On this one, I’ve certainly spent time looking at CSS – but I’m trying to self-teach like I self-taught HTML. It isn’t going so well, and I meant to go about it differently (like, maybe buy a book and self-teach that way – see #8).
• NOTES: Does anyone in the DC area (or anywhere) want to help me learn some of this, or can you point me in the right direction? Comment below!

6. See the Nashville Predators win a 2010 playoff game at the Sommet Center in Nashville

• STATUS: INCOMPLETE…but that’s kind of okay
• I’m not ashamed to play a game of semantics, so let me say that this technically can’t ever be completed, because the Sommet Center is no more. That said, there were plenty of qualifiers baked into this particular goal, the biggest of which was the Predators making the playoffs. That has now happened, so that’ll help…I’m traveling to Nashville at the end of April/beginning of May for a few days, and it’s theoretically possible for this goal to be met then, but again, lots of things have to happen. The Predators will likely have to get out of the first round of the playoffs (which they have never done) and they’ll have to be playing in Nashville the one Saturday night I’m home. I wish my circumstances were different, but I don’t think I’ll be able to afford a return trip home if they don’t play on Saturday, May 1.
• NOTES: Like the travel goal, the x-factors involved here might just leave me with watching the 2010 playoffs unfold on television. I can think of worse fates, to be sure.

5. Do something that terrifies me, and blog about it

• STATUS: COMPLETE
• Like I said in the original post, there are a number of things that could satisfy this. But I’ll tell you that, as a huge opponent of many of the Obama Administration’s policy initiatives, I was quite terrified about going to the White House to talk transparency and open government with some senior administration officials. It’s kind of like when you’re the small kid in class, and you’re talking smack to the big bad bully in class, and when he finally turns around to hit you, you wince a little (no, I’m not speaking from personal experience, thankyouverymuch). Anyway I did it, and if you missed it, I blogged about it.
• I also started blogging for another site that I’ve been reading for a couple years, and I had my inaugural post promoted to the front page. It’s one thing to idly ramble and lob bombs from the sidelines at a rinky-dink site like this one without ever really having to care who reads it or when, but it’s quite a scary prospect to put ideas out there in a forum where you know there’ll be high readership, particularly when the ideas you’re floating out there aren’t exactly popular among a majority of the target audience.
• NOTES: I’m sure I’ll be afraid of lots more stuff this year – check back for more!

4. Spend more time with my best friend and his wife

• STATUS: COMPLETE…I think
• Let’s face it, I’m so busy in life right now that I can’t tell what day tomorrow will be some days, so I’m not exactly an accurate assessor of progress on this front. But Emily moved to town at the beginning of March (score one for yours truly!), and she lives less than a mile from Scott and Jennie. It at least feels like I’ve seen them more than I did in the fall after just having moved to Washington.
• NOTES: Even if I’m right on this one, there’s always room for improvement in being a better friend to my best friend. We talked today about taking a trip to Atlantic City this summer, or seeing Phish play a two-night engagement in Columbia, MD. Either would be epic in scope, not only for the awesomeness of activity but for the company of a friend for life.

3. Have something to celebrate on April 30

• STATUS: INCOMPLETE
• It’s not April 30 yet, so I can’t really be faulted for this one. This goal has a lot of personal meaning for me that I’m not really comfortable sharing in the public sphere, so suffice it to say that nothing has happened that would preclude me from celebrating something on April 30.
• NOTES: None, really. Of myself I am nothing. The Father doeth the works.

2. Get involved in a political campaign or issue campaign

• STATUS: COMPLETE
• I’ve gotten in touch with both the Campaign for Liberty and the Libertarian Party about volunteering for some events. Seems I missed the CPAC boatload of opportunities to volunteer, and I’m not sure what else the two organizations have planned for the year. Hopefully something will come down the pike, but for now I’ve done all I can do.
• I’m also going to make a shameless plug here for my girlfriend Emily. She is currently raising money to help the Leukemia & Lymphoma Society fight blood cancer, and is competing in a swath of athletic events in 2010 in memory of a childhood friend of hers who died of cancer and in honor of a former colleague of hers who has been in remission for almost 5 years, thanks to a revolutionary treatment developed with funding from LLS. As of this writing, Emily still has $800 to go in her fundraising drive, so if you owe me a favor for anything please follow this link and make a 100% tax-deductible, secure online donation of your choosing. She has worked very hard and has raised almost $10,000 in 12 months for LLS – doing my best Barack Obama impression, “I need your help to bring this across the finish line.”
• NOTES: Please donate to Emily’s fundraising campaign, even if it’s only $10. Fighting deadly blood cancer is a great cause, and LLS has had great success with the research they have funded with generous contributions like yours.

1. Shed 20 lbs. by July 19

• STATUS: INCOMPLETE
• It’s actually taken an embarrassingly long time for me to get off my duff and start attacking this one. I tried unsuccessfully at the beginning of the year to change my diet some, but I wasn’t exercising. I’ll say that now that it’s warm out and Emily has finally moved here and can train with me, I’ve been on the bike a couple times a week for about a month now, and much to my chagrin, I’ve been tricked into distance running again. This initiative is just sort of getting off the ground, but if I’m extra-vigilant I can probably pull it off (I hope).
• NOTES: We’ll have to check back on this one. I started out at nearly 210 lbs, which is not a bad weight for my height…if I was a professional hockey player, which clearly I am not. If I can get down to 190-195 lbs range, I’ll be pretty happy with that, even if it isn’t 20+ lbs.

Thanks for reading and for following my journey to becoming a more useful and productive citizen – I’ll have another review after June!

The White House - Washington, DC

I had a pretty unique privilege earlier this week – and frankly, as a huge transparency advocate, I’m still a bit electrified by the experience – in getting to attend a series of briefings at the White House Conference Center by individual government agencies to collaborate with stakeholders on how best to adopt the principles set forth in President Obama’s January 21, 2009 Memorandum on Transparency and Open Government (which was later translated into more detailed instructions for federal agencies by the Office of Management and Budget via the Open Government Directive, or “OGD”). It’s not every day that one gets to sit down with Administration officials to have a dialogue about how best to transition to a more transparent, collaborative, and participatory government. Several agencies participated in the day-long series of briefings, but I only attended the meetings with the Office of Management and Budget (OMB), the White House Council on Environmental Quality (CEQ), the National Archives and Records Administration (NARA), the Department of Labor (DoL), and the White House Office of Science and Technology Policy (OSTP). Here is just a quick summary of what I captured from the discussions, and a bit of commentary:

OMB

This was a pretty interesting briefing, and OMB has some incredibly lofty long-term goals, including putting the Budget of the United States Government online while it’s being written/developed with a built-in mechanism for public comment, so that anyone – including John Q. Taxpayer – can collaborate on setting the federal agenda. I doubt very much that this will ever come to pass unless the Democrats miraculously sprout seriously long, muscular political legs in the near-term that can sustain them for the long-term, or at least long enough to see an initiative like this through. In any case, this is a very interesting proposal that ought to excite populists of all stripes, and it shows how seriously and creatively OMB is thinking about the President’s goals. OMB identified as its flagship initiative under the OGD a new online dashboard for the Office of Information and Regulatory Affairs (OIRA). Ostensibly, with the right capabilities built in to the OIRA dashboard, citizens would be able to track the development of a regulation from statute to implementation. OMB intends to pull this feat off by tagging Federal Register publications (which OMB recognizes as an elite policy-tracking tool that is difficult to wade through in its current format) with user-friendly metadata that will help index the documents by subject matter and relevance. This too is a pretty lofty goal, but again, this demonstrates the creativity driving the initiative. It is worth noting, too, that OMB (along with OSTP) is not only responsible for meeting the requirements of the OGD itself, but as a management agency it is responsible for helping every other federal agency to pass OGD muster as well.

Personally, I'm waiting for OIRA to integrate with the Xbox 360 dashboard. Hey, if Facebook and Twitter can pull it off, why not OMB?

OSTP

It should come as no surprise that this agency has made more progress than any other on complying with the OGD. Their self-described flagship initiative is to construct a digital enterprise network of scientific/technological experts (something possibly akin, they said, to NASA’s Spacebook – as if anyone could possibly make Facebook more nerdy than I can), for the purposes of collaborating on public policy. This should confront the White House with an interesting messaging consistency problem going forward, and the problem takes the form of a simple question: what constitutes a “lobbyist?” Special Counsel to the President for Ethics and Government Reform Norm Eisen was in the room during this particular briefing (see WhoRunsGov.com for an interesting summary bio on Eisen). He has been notoriously unsympathetic to federal lobbyists despite pleas to the contrary. Currently, anyone spending 20% or more of their billable hours trying to shape or influence policy must register as a federal lobbyist (which comes with a whole host of restrictions on one’s ability to participate in the political process), and if this administration has its way, I think those restrictions will get tougher, particularly for anyone with corporate ties. Are scientific/technological experts on OSTP’s policy network to be considered “federal appointees?” Will they spend more than 20% of their billable hours trying to “shape or influence policy?” These are tough legal questions that the White House will have to answer going forward. If the Administration tries to manipulate lobbying standards so that it suits their political goals, they will do so at their peril. That’s just common sense punditry. Needless to say, I kept my mouth shut.

Darth Vader likes to get down on the Spacebook

Dept. of Labor

I couldn’t help but smirk a little to find out that employees at the most union-friendly federal agency in the entire government tend to view things like FOIA requests and social media as “extra work,” outside the scope of their respective job descriptions. Obviously the agency intends to comply with the OGD, but they seem to have a cultural barrier to overcome that other agencies do not. A portion of the OGD requires that agencies immediately post three high-value data sets online at Data.gov, and then inventory the remainder of their high-value data sets to see what needs to be made publicly available, and what does not. The Labor representatives meeting with us said that they had a plan for inventorying their high-value data sets (by the way, the OGD requires simply that agencies inventory these data sets – if Labor would just do that instead of spending time writing a plan for inventorying, they might not be having the issues they’re having – bureaucracy at its finest, folks), but that their largest problem – and I am somewhat sympathetic to this – has been gathering consensus on what constitutes “high-value.” High-value to whom?

This is what happened the last time someone was told to adopt social media

NARA

As John Wonderlich of the Sunlight Foundation (@JohnWonderlich on Twitter) noted during the meeting, NARA should give themselves a big pat on the back for being one of the only independent agencies to take on the challenge of adopting the OGD (which they are not required to do at all). Going forward, as I suggested in the meeting, they can be showcased as a model for encouraging other agencies to participate, particularly if they catalog their capabilities and document their processes so that other independent agencies simply have to follow a map and purchase some capabilities to comply. Hell, NARA could even develop a handbook of best practices that struggling agencies who are actually required to comply can follow to navigate whatever challenges they encounter. NARA’s flagship initiative has been to publish their Archival Research Catalog (all the holdings of the federal government) online in XML format, and they were happy to report that this is now over 70% complete. The only caveat I offered up at the time is that their efforts will be for naught if the enterprise architecture and grading of data aren’t useful or meaningful to the consumer (John Q. Taxpayer).

Hey, it could happen, right?...Right? *crickets chirping*

CEQ

The young lady from this administration focused far more of her attention on the openness provisions of Executive Order 13514 (President Obama’s energy sustainability plans for the federal government) than on the OGD itself. I’m not a procurement policy expert by any means, and I’m still somewhat unclear as to what impact EO 13514 has on vendors in the contracting community (or to what extent, if at all), but CEQ plans to make plenty of data about pollution generation and abatement across the federal government publicly available with some kind of flashy data visualization project. One can certainly imagine – if these provisions do apply to private vendors performing contract work for the federal government – that these proposed requirements (disclosure of pollution data) could be met with significant litigation, since there is no due process of law involved, and vendors are afforded certain protections under the Freedom of Information Act. The impact on the private sector could be huge, particularly if someone makes a mistake in reporting pollution data, since going green is nothing short of a cultural phenomenon (if not a global paradigm shift altogether). The Administration will need to address these questions as well.

Exxon still hasn't lived this little mishap down...just imagine what a mistake in the government could do to a company's brand

All in all, I was very pleased with the steps the government reported having taken since the OGD was first published. As a student of the Federalist papers, I’m not entirely comfortable with the collaborative and participatory aspects of the OGD – certainly plenty of room here for the whims of the masses and the mischief of factions to take over the public sphere (as if we aren’t there already). But these are tremendous gains in transparency, and while I have been a vehement opponent of this Administration on many fronts, I am always willing to give credit where I think it is due. Transparency as a fundamental principle of governance tends to disinfect institutions and deter governing actors from corruption, and it ought to be viewed as a political good in and of itself. I will certainly be watching closely in coming months to see how this develops; the next bit of guidance on the OGD is supposed to come next Wednesday, April 7.

Other Organizations Present:

OpenTheGovernment.org

O’Reilly Media, Inc.

Sunlight Foundation <– excellent resource

Athena Bridge

Project On Government Oversight

OMB Watch

The Media Laboratory – Massachusetts Institute of Technology

Please visit these other sites too – lots of great stuff going on!

Cross-posted at GovLoop.com.