ARTS & FARCES internet

Minnesota’s Republican Governor Tim Pawlenty gave his state of the state address today. Aside from the coldest weather in five years, we’re in deep shit. Pawlenty calls it “challenged” but it’s still hip-deep. And once again, the governor provides evidence that he hasn’t a clue.

Pawlenty insists that tax and service cuts are the way out of a US$5 billion projected deficit (Minnesota is constitutionally mandated to have a balanced budget). Remember that’s a US$5 billion projected deficit over the biennium and certain to rise in reality.

Take for example, Pawlenty’s proposal to cut Minnesota’s business tax rate by more than half, from 9.8% to 4.8% over six years. What Pawlenty either doesn’t know or willfully ignores is that the vast majority of business taxes paid in the state come from proprietorships, LLCs, S-Corps, and other pass-through entities. These businesses pay taxes at personal tax rates (almost always significantly north of 9.8%) of the business owners. Never mind that these businesses are responsible for almost all of the job growth in the state—and far fewer of the layoffs. What we have here is a governor greasing the palms of his corporate buddies in anticipation of a presidential run.

When we moved to Minnesota in 1982 it was one of the best states in the country. Now it’s close to the lead in the race to the bottom.

Thank God for a veto-proof Senate and only three votes short in the House.

Is Pawlenty incompetent or malfeasant? You decide.

I don’t like Steve Jobs—never have. He’s an arrogant, abrasive, prima donna. But unlike most other people I dislike, I have tremendous respect for Steve Jobs. He’s outrageously creative, wildly persuasive, has a gift for seeing what the rest of us don’t, and is obsessed with quality. The positives, believe it or not, far outweigh the negatives.

Steve Jobs and Apple’s board of directors have done everything that’s necessary with regard to his personal information and his role as CEO of a publicly-traded US corporation. Period. If he doesn’t want to disclose the details of his health, that’s no one’s business but his own and the financial and technical media must back the fuck off.

I’ve chosen to take a fairly open position with regard to the status of my health. I fully disclose my health condition, its co-morbidities, and the ramifications involved to employers and co-workers, up-front. Partly because I don’t want to be accused of withholding crucial information later, should my condition worsen—of which there’s a fairly high likelihood. But mostly because it’s easier to just get it out of the way as early as possible: like my job, it’s part of my life but it’s not who I am.

But full disclosure was my choice. Steve Jobs’ choice is to disclose the minimum amount of information necessary for appropriate decisions to be made. That’s his choice—and his choice alone—and it’s every bit as valid as mine. Fact is, it’s none of our business.

The gist of what I’m about to write here was already published as a comment on Jeff Jarvis’s BuzzMachine. If you’ve already seen that, move along, there’s nothing really new in this article.

Michael Hirschorn has written a must-read piece in the Atlantic, “End Times,” concerning the death of the New York Times in print.

Hirschorn is pretty much spot on in his analysis except for one crucial bit. He argues that the Times should evolve into a “bigger, better, and less partisan” Huffington Post. Such a move would indeed be the end of the Times. Arianna Huffington’s business model for the Huffington Post amounts to little more than cheap thievery.

The problem that remains is finding a sustainable business model for enterprise, investigative, and beat reporting.

Michael Lewis and David Einhorn have a stunning two-fer op-ed, “The end of the financial world as we know it” and “How to repair a broken financial world,” in last Sunday’s New York Times. The duo points out six of the core problems leading to the current financial crisis.

1. The sacrifice of long-term, collective interests for short-term, individual gain
2. Mismeasurement of corporate risk—either through malice or incompetence—by the credit-rating agencies, who are paid by the issuers of the bonds they rate
3. Reversal of the purpose of the Securities and Exchange Commission (SEC) from protecting investors from financial predators to “protecting financial predators with political clout from investors”
4. The revolving door at the SEC: “If you work for the enforcement division of the SEC you probably know in the back of your mind, and in the front too, that if you maintain good relations with Wall Street you might soon be paid huge sums of money to be employed by it”
5. Treasury Secretary Henry Paulson Jr. insisted on US$700 billion to buy distressed assets from banks; when he got the money, Paulson instead overpaid for preferred stocks in the banks
6. Paulson “granted himself the power to dispense unlimited sums of money without Congressional oversight.”

What’s especially disturbing is that not one of these problems have been resolved. No checks or incentives have been put in place to prevent even one of them from happening again.

Free marketeers are cute; they really are. Faced with an unquestionably failed economic policy, they solider on. It’s fascinating how they can robotically recite—with a straight face and fierce precision—that any government intervention whatever in any market leads to disaster. Like I said, fascinating.

There are, for better or worse, some sectors of an economy that are beyond market capabilities and can only be adequately and appropriately handled by government. Healthcare, for example. I knew this even before I got sick, but it was driven home for me like a shot between the eyes when I realized that without US government intervention in healthcare, I’d be dead.

When asked to provide evidence of a US government program that actually works, I point—without hesitation—to Medicare. That’s not to say it’s perfect—it’s not by a long shot—but it unquestionably works.

The US spends 16 percent of gross domestic product on healthcare. Most other industrialized nations spend roughly half that. Medicare is more efficient than market-driven alternatives; spending three percent or less of its budget on administrative overhead (.pdf; 72Kb), for example, compared to private insurers who spend a whopping 20% of their budgets.

The free marketeers were wrong about just about everything. Instead of arguing the point, it’s time to route around the damage they wrought and let markets work for the things they do well and find other options for those things best handled outside a market economy. Let’s start with an overhauled healthcare system free from the market and its attendant profit-driven motives.