Tuesday, November 30, 2010

Responsibility ... high crime ... firing police!

Dear Colleagues

Thanksgiving is over ... Christmas is coming ... and so is the end of the year. Budgets have to be balanced in most States and Cities around America ... and this means firing workers.

There is something very wrong with the way the economic system works when police are being let go when crime is high. Newark is in a budget bind ... the result of pretty pathetic leadership for decades ... both corporate and political ... but it is what it is. Mayor Cory Booker, the current mayor, is doing a great job of turning this city around, but a 40 year decline cannot be reversed easily ... but he has been doing it.

But now the budget crunch is getting in the way. The checks and balances that are reasonable have now become unreasonable ... Newark has stabilized its crime situation, but it has a long way to go before it will be a low crime city. Newark needs the police to keep police on the payroll ... the crime situation is unfinished business.

Money accounting is not what should be driving public policy. Public policy should be driven by TrueValueMatrics. Money should be allocated so that needs are being satisfied. In Newark, there is a need to reduce crime. Money should be one of the resources available to reduce crime. In Newark, there is a need to have more jobs. Money should be one of the resources available to increase the number of jobs ... maybe good jobs in the Police Department.

With ridiculous situations like the one in Newark, it is no surprise that the economy of the United States remains in trouble with very high unemployment.

But is is also ridiculous that corporate institutions ... banking and others ... are awash in financial liquidity when the needs of society are only getting met at a very very low level.

With wide use of TrueValueMetrics we would be seeing a very different set of behaviors. Money is not a good measure of quality of life and the progress towards a better society.

How is your community doing? Is the quality of life getting better or not?

Peter Burgess

Campaign for Community Change

Dear Colleagues

I am interested in the betterment of society ... a reasonable thing to want. But the only people that want to talk to me are people who see me as another ATM machine for them to use. Every organization I have ever contacted is now trying to get me to send them money ... and I am really not interested.

What I would like to do is to help some of these organizations use their money more effectively ... but very few are interested in this, even taking the first steps. Here is an example:
From: Deepak Bhargava, Campaign for Community Change to me

Dear Peter,

What a way to ruin the holidays.

800,000 people will lose their unemployment insurance if Congress does not pass an extension TODAY. 2 million total people will lose their benefits between now and January 1, 2011. This means unhappy holidays for families and communities everywhere.

Call Your Senator. Demand extending unemployment benefits for a full year.

These benefits are a critical lifeline for Americans and their families at the mercy of the worst job crisis since the Great Depression. This is not the time for Congress to turn its back on unemployed workers desperately looking for jobs that simply aren’t there. Unemployment stands at 9.6 percent and is in the double digits in communities of color.

Call 866-956-1737: Tell your Senator to do what’s right for workers.

Make your voice heard and tell yuor Senator to put politics aside and come together to do what’s right for Americans who’ve lost their jobs and are fighting to survive in this economy.

In solidarity,

Deepak Bhargava and the CCC Team
Campaign for Community Change

The Campaign for Community Change is the action arm of the Center for Community Change. Connect to thousands of community organizers and leaders in a grassroots struggle for change by joining us today.

Subscription Management:
This is their URL http://www.campaignforcommunities.org/ and some contact info from their website.
home | who we are | what we do | act | contact us | terms of use | donate
Campaign for Community Change |
1536 U Street NW | Washington, DC 20009 |
(202) 339-9300 | toll-free (877) 777-1536 |
I would like to see an organization like this partnering with TrueValueMetrics so that the work that they are doing can be "valued" and compared to what the big organizations in the corporate world are doing that wrecks "value".

I was very proud as I was growing up that fascism had been defeated ... and proud of the socio-economic progress that was being achieved post war in Europe and the United States ... and proud of progress in many aspects of civil rights. But my big disappointment has been the way in which the modern economy tries to make money and in the process "guts" society. I am proud of my education and my training as an accountant ... but disgusted that accountancy is such a power for measuring money and is irrelevant in measuring the value dimensions of society and economy with the result that big profits get made on top of value destruction in society. Wrong measurement ends up with wrong results.

I would imagine that this group could be more important for the United States than Goldman Sachs ... but nobody will ever know unless they do something like TrueValueMetrics (TVM) to measure the impact they are having on society.

Bluntly put ... good people need to wake up and do TVM type reporting so that the world starts to pay attention to people doing good rather than only paying attention to people making profit.

I am not against profit ... I just think it is only half of what should be being measured!

Peter Burgess

American Public Vastly Overestimates Amount of U.S. Foreign Aid

Dear Colleagues

The fact that the American Public is misinformed on this matter should come as now surprise! It would be interested to know anything that the American Public is informed about ... the role of misinformation dominates politics ... dominates marketing ... dominates the media ... and it is no wonder that the American Public ends up being misinformed.

Frankly the knowledge economy that was anticipated when IT (information technology) emerged ... and promptly fueled the the dot.com bubble ... has been hijacked. Our economy is now driven by super-rich kleptocrats who thrive in a world where misinformation flows freely ... and rule of law serves to make the ethically unacceptable quite legal and impossible to stop through any system of due process.

This is not what the American Founding Fathers had in mind.

Maybe with the application of True Value Metrics some sanity might be possible. This is the text of the note that triggered this responce. The text was at this URL http://www.worldpublicopinion.org/

Peter Burgess
American Public Vastly Overestimates Amount of U.S. Foreign Aid

As debates about how to deal with the budget deficit have heated up in recent weeks, a new WorldPublicOpinion.org/Knowledge Networks poll finds that Americans continue to vastly overestimate the amount of the federal budget that is devoted to foreign aid.

Asked to estimate how much of the federal budget goes to foreign aid the median estimate is 25 percent. Asked how much they thought would be an "appropriate" percentage the median response is 10 percent.

In fact just 1 percent of the federal budget goes to foreign aid. Even if one only includes the discretionary part of the federal budget, foreign aid represents only 2.6 percent.

Solari in 2002 ... I wonder what has happened since then?

Dear Colleagues

I just "tweeted" the following on @TrueValueMetric
Solari & The Rise of the Rule of Law by Catherine Austin Fitts from 2002 is worth reading see http://www.courtskinner.com/solari/Rise.htm
This connection was sent to me by Mark Roest, a friend in California. I was interested to see the date when this was published ... 2002 ... and now curious about what has happened since then.

One of the issues that I have been concerned about for a very long time is that there is very little "system thinking" in what most people of good will are doing. A lot of effort goes into thinking about what is wrong and what might be a solution ... and then a book or report is produced ... and then rather little happens after that. The end purpose seems to be merely publishing the book or report.

Accountants ... and I am one ... come from a different mindset. There is, to be sure, the duty to product the financial reports every quarter and year ... and internally perhaps monthly ... but the real job is to have all the data organized so that these reports are easy to produce and also to help the organization get better and better results. A successful accountant is not one that simply produces the reports, but one that has the data that helps make the organization successful and getting better and better.

So my question of Catherine Austin Fitts is not so much how many people liked the report, but how much has society improved.

Sadly my perspective is that between 2002 and now (2010) the world has gone through a huge series of economic bubble busts ... housing ... financial services ... public sector finances ... jobs ... and nobody seems to be measuring anything that really matters. Success seems to be simply to get on track to build another bubble. The system and its metrics are insane.

Good news ... there is a better way! We need to use True Value Metrics to supplement regular business corporate accountancy.

Anyway ... thank you Mark for alerting me to the work being done by Catherine.

Peter Burgess

Friday, November 26, 2010

Obituary ... Norman Macrae ... The unacknowledged giant

Dear Colleagues

This is the text of the Norman Macrae obituary referred to in an earlier post. The Economist URL is http://www.economist.com/node/16374404?story_id=16374404

I am fortunate to know Chris Macrae, Norman Macrae's son who has shared with me many pearls of wisdom that I like to think have improved my work with True Value Metrics and my analysis of important issues. Here is the obituary.

Obituary ... Norman Macrae ... The unacknowledged giant

Few journalists have had as great an influence—or been proved right so often—as the man who, for 23 years, was the deputy editor of The Economist
Jun 17th 2010

WHEN Norman Macrae died on June 11th, aged 89, no major British newspaper published an obituary of him. You could blame The Economist’s tradition of anonymity; you could blame the extraordinary modesty of the man himself who, if you tried to take his photo, would duck down and giggle, convinced that no one could possibly be interested in him.

Yet Norman was one of the intellectual giants of post-war Britain: one of the very few journalists who could bear comparison with the best brains of his time. Like Milton Friedman, he applied free-market principles to public services such as education and council housing. Like Daniel Bell, he charted the shift from the industrial to the post-industrial society. And like Peter Drucker he illuminated the internal workings of companies, the organisations that drove the West’s prosperity and guaranteed its freedoms.

He kept the flame of free-market thinking burning during the long night of collectivism. He predicted the collapse of the Soviet Union, at a time when the CIA was obsessed by Russia’s growing strength, and foresaw the privatisation of industry, when other intellectuals were celebrating the triumph of the “mixed economy”.

Norman was the first journalist to “discover” Japan. In 1962 he wrote a survey predicting that a country most Westerners regarded as synonymous with knick-knacks and knock-offs would become an industrial power-house. He was also the first journalist to “discover” the internet. In 1984 he wrote another survey arguing that life was about to be transformed by “terminals” which would give users access to giant databases. He predicted that the 1973 energy shock would eventually lead to a surge in the supply of energy. He also dismissed the Club of Rome’s prediction that the world was about to run out of food as arrant nonsense.

The Economist was fortunate that Norman decided to park his formidable intellect at 25 St James’s Street. During his almost 40 years here—23 of them, from 1965 to 1988, as deputy editor—he did more than anyone else to provide the intellectual originality of what he liked to describe as “the world’s favourite viewspaper”. He constantly enlivened editorial meetings with proposals to allow Disneyworld to run the West’s cities or to move the British government from London to York. Roy Jenkins rightly described him as the “epitome of the internal spirit of The Economist”.

He could be a brutal editor and a savage critic of flabby ideas. He altered colleagues’ copy with abandon. But he was greatly liked, generous with his time and amiable in conversation. He was also a loyal company man, never allowing his growing renown to go to his head. He frequently slept in his office, his large frame heaped on the floor, and sweated blood to correct errant facts as well as to expunge creeping heresy. More than anyone else, he made sure that The Economist was not blown off course by the winds of ideological fashion or becalmed in routine reporting.

But if The Economist was lucky to find Norman, he was lucky to find The Economist. His website poses a question at the end of each of his essays: “Brilliant? Batty?” and invites readers to join the fray. His undoubted eccentricity was partly a matter of personal style. The words tumbled out in an incoherent jumble interrupted by heaving shoulders and gales of cackling laughter. His handwriting was such a scrawl that only one person in the world, his loyal secretary, Elizabeth Methold, could decipher it—and she could perform this miracle only by holding the script at arm’s length, half-shutting her eyes and (in her words) going into a trance.

The eccentricity extended to his writing. Norman was a punctilious student of statistics. But he was quite happy to illustrate a 1969 article on American productivity with the assertion that a time-and-motion study of housewives at the kitchen sink would “almost certainly find” that the average American housewife was twice as efficient as the average British one. Why? Because the American housewife was capable of instinctively working out in her head, for each chore, “some rough approximation of what modern businessmen call a critical path analysis”.

The Economist provided him with the ideal mixture of freedom and discipline. He could travel to any corner of the world he fancied to produce lengthy reports on anything he wished, from the state of America to the future of mankind. Many of these special reports became books. But he was reined in when he got a bit too wild—as when he advocated writing a cover leader championing a nasal spray to “cure” homosexuals (who, he thought, were driven that way by their aversion to the smell of their mothers). He was passed over three times for the editorship. But, in truth, he was in exactly the right position.

The crystal ball

His greatest gift was his uncanny ability to predict the future. But the problem with the future is that it eventually arrives. Visions that are called from the vasty deep become reality. Ideas that were once pooh-poohed as outlandish become commonplace. “Nobody listened, then everybody did,” Norman wrote ruefully in a 1991 article called “A future history of privatisation, 1992-2022”. To grasp his prescience, it is necessary to return to an era when today’s commonplaces were heresies.

Not so murky to him

During much of the post-war period the market was “out” and the benevolent state was “in”. Public intellectuals such as Kenneth Galbraith argued that the age of the entrepreneur had given way to the age of the giant corporation. Practical politicians poured money into British Steel and the Concorde project. The market meant chaos and unemployment; industrial policy meant smooth growth and jobs for all.

Norman saw this as a recipe for flabby politics and failed economics. In 1954 he coined the term “Butskellism” to describe the portmanteau politics of the Conservative chancellor of the exchequer, R.A. Butler, and a Labour predecessor, Hugh Gaitskell. Throughout the Butskellite era he relentlessly documented the failures of industrial policy and government planning.

This makes it sound as if Norman was nothing more than a prophet of the new right. But the truth is more complicated—and, as befits the man, more idiosyncratic. Even while he embraced the market on micro-economic policy, he remained more or less a Keynesian on macroeconomic policy until the late 1970s. He was a firm believer in pumping up demand with deficit spending and holding down inflation with incomes policy. No deficit was too big and no incomes policy too hopeless. He greeted the first macroeconomic flushes of Reaganism and Thatcherism with sceptical editorials before finally admitting that he had been wrong. It was perhaps the only time he was not ahead of the debate.

Norman also had no time for social conservatism. He worried about broken families and out-of-wedlock births, but entirely from a utilitarian rather than a moral point of view. He dismissed the religious right as vigorously as he dismissed feminists and environmentalists (“both simple and psychotic Americans have too often been dominated by religious liars”). He argued that one of man’s greatest problems in the coming years would be growing life-expectancy—and advocated a “system of planned death” to deal with it. In a survey of America in 1975 he predicted that euthanasia would soon be as acceptable as abortion: “It will not be at all surprising if there is in some quite near decade-and-a-half a similarly swift and equally civilised dash to acceptance of killing off old codgers (by then, like me) as there has been, in so short a twinkling, towards the more emotive act of killing unborn babies.”

In Stalin’s Russia

Why did Norman think as he did? Why did he reject the post-war consensus about the virtues of government? And why did he keep his distance from a new right that embraced so many of his ideas? Part of the answer lies in his personality. Norman was an extraordinarily self-contained figure. He seldom used his telephone to call people, preferring to sit in his office poring over statistics. He had few doubts about the rightness of his opinions. Once he had an idea in his head he pushed it to its logical conclusion—and if he was proved wrong he simply shifted to another idea, which he pursued with equal certainty. Richard Holt Hutton once wrote about Walter Bagehot’s “dash and doubt”. Norman was just dash.

But his outlook was also shaped by his odd adolescence. His father was a British consul in Moscow in 1935-38, and Norman’s summer holidays from school were spent there at the height of Stalin’s purges. He saw members of the embassy staff—including maids his own age—disappearing, probably to be shot. Before and after his posting to Moscow his father also had jobs in Nazi-dominated Europe. Many of his family’s Jewish friends were terrorised and later slaughtered.

When he left school in 1941, Norman wrote later,
my first job was a public-sector one, with public-sector productivity, as a teenager supposed to throw bombs about as an RAF navigator, creating a slum in the heart of the continent. By the time I got there, the Russians were coming in from the other side. All the politicians, including Churchill and Roosevelt, told us these were fine liberating democrats. And of course I knew from those school summer holidays so briefly before that those were astonishing lies. That has given me one advantage in my 40 years as a newspaperman. I have never since then believed a word either politicians or public relations officers have said.
Norman’s early experiences did not just sour him to politicians. They soured him to collectivism in all its many varieties. He had no time for the government-worshipping intellectuals he found when he studied economics at Cambridge in 1945-47. He loathed the feminists and black-power activists he came across in America in the late 1960s and 1970s, smelling in their affection for group rights and their willingness to use intimidation the same intolerance he had smelt in Europe in the 1930s and 1940s. He took his children on trips to eastern Europe in order to teach them the difference between freedom and tyranny. He seldom missed an opportunity to champion the “hard hats” over the “soft heads”.

Norman’s case for market capitalism did not rest merely on its ability to create wealth, but on its capacity to advance individual freedom. He was almost as critical of big-company capitalism as he was of big-government socialism. In a 1976 survey on “The coming entrepreneurial revolution” he argued that big business was as doomed as big government. Hierarchical managers sitting in their skyscrapers could no longer arrange how brain workers should best use their imaginations. The future lay with small firms that could exploit individual creativity and with bigger firms that could split themselves into small centres and encourage competition between them.

Norman’s critique of the welfare state was inspired by a similar belief in individualism. He pointed out that the market had produced a remarkable equalisation in people’s lives. Rich and poor had access to the same consumer goods—the same television programmes, the same comfortable armchairs, the same plethora of goods in supermarkets, which were spreading from the suburbs to the slums. In 1945 the average Englishman had only one pair of trousers; in the swinging 1960s he had access not only to lots of pairs of (tight) trousers but also to holidays in the sun and cheap mortgages.

The great exception to this story of equalisation was the state. The state distributed its largesse disproportionately to the rich—exactly the opposite of what was supposed to happen—allowing them to end up with better schools and better health services. It also trapped the poorest in poverty, in sink estates with lousy schools and soaring crime and in public-sector jobs with little prospect of long-term prosperity. Norman argued that the only way to change this was to empower individuals—to allow them to own their own homes, through privatisation, and to choose their own schools, through vouchers. Give power to the state and you end up with self-serving interest groups. Give power to the individual and you apply the same creative ingenuity to public services as companies have long done to the invention of washing powder.

Norman’s belief in individualism also drove his enthusiasm for technology. This enthusiasm provoked widespread mirth at The Economist. The man who predicted the rise of the internet in 1984 and preached the virtues of telecommuting in articles on almost anything was by far the most incompetent member of the staff when it came to using new (or not so new) inventions. In battles with the office fax machine he usually came off worse. It was rumoured that paper clips baffled him. The staff were amazed when the Atex publishing system was introduced in 1982 and Norman revealed that he could actually type.

But as a techno-visionary he had few equals. He predicted a world in which “books, files, television programmes, computer information and telecommunications will merge”—in which people could explore the world’s knowledge repositories at a touch of a button, and in which readers would have access to custom-made newspapers paid for by targeted advertising (in typical fashion, he imagined this newspaper emerging from a fax machine at the back of the television). He saw that this revolution would have huge implications for the balance of power. Giant organisations such as governments and companies would lose their comparative advantage. Entrepreneurs would be empowered. Taxpayers would flee the coop and telecommute from rural villages—thus putting more pressure on governments to give up their powers and start serving people rather than bossing them about.

The last clue to Norman was that he was a consummate newspaperman. In print—or indeed on the lecture podium—the cackling incoherence of his speech simply vanished, and he was invariably lucid and frequently amusing, even coruscating. (A similar stylishness could be seen on the tennis court, where the immobility of middle age did nothing to inhibit a well-aimed slice that flummoxed younger and nimbler players.) He was one of the best word-coiners of his generation, producing “intrapreneurship” and “telecommuting” (the coinage of “privatisation” and “Eurocrat” is disputed). He littered his prose with memorable phrases. Milton Friedman was “the maddening gnome of Chicago”. American ghettoes exhibited “public squalor amid private non-affluence”. In diagnosing the failure of British firms to get the most out of computers, he likened them to “former slum dwellers who, when promoted into being council-house tenants, tended to keep coal in the bath”. In championing the virtues of entrepreneurship and people working in small teams, he pointed out that “Jesus Christ tried 12, and that proved one too many.”

Everything he wrote was compulsively readable—partly because he mixed battiness with brilliance and partly because he came at everything from such unexpected angles. His 1975 survey of “America’s third century” started by posing a surprising public-policy quandary:

Our children will probably “progressively” be able to order their babies with the shape and strength and level of intelligence that they choose, as well as alter existing human beings so as to insert artificial intelligence, retune brains, change personality, modify moods, control behaviour.

That raised troubling ethical issues which would be best decided by a world that was shaped by America rather than “the inexperienced Japanese”.

Yet it was those Japanese who best demonstrated Norman’s skills as a journalist. In 1962 he visited Japan to get a measure of how the country had changed since the second world war. He learned little from talking to British ex-pats. But then, in a Mitsubishi factory, he came across a British machine-tool salesman who told him that Japanese workers were getting three times as much out of their machines as their better paid British counterparts.

The resulting article, “Consider Japan”, sealed his global reputation as a journalist and turned him into a hero in Japan (on his retirement in 1988 he was honoured by the emperor with the Order of the Rising Sun). He argued that the key to Japanese success lay in their plethora of tiny entrepreneurial component-makers and in their ability to break up huge plants into “small but brotherly” profit centres. He predicted that the Japanese productivity miracle would transform the world economy.

IMAGE Arise Sir Norman, knight of the rising sun!

An eternal optimist

But for all his interest in the rest of the world, he was a very English figure. His ideas were rooted in the English liberalism of the 19th century — a liberalism that celebrated the individual over the collective, progress over reaction, free thought over superstition. This set him against both the “over-government” that had triumphed in his youth and the religious conservatism that prospered under Reaganism. But it also turned him into an irrepressible optimist. Few people since Bagehot and Macaulay have been so convinced that life is getting better, and that it will get better still if only a few doltish politicians can be elbowed out of the way.

This commitment to classical liberalism ensures that much of his work continues to sing. Norman devoted his energies to two of the most ephemeral bits of journalism—opinionated leaders and lengthy exercises in futurology. Yet a remarkable amount of what he wrote remains relevant today. His 1975 survey on America’s 200th birthday, in which he chastises the Democrats for flirting with the Fabian cult of government expertise, conservatives for flirting with religious extremism, and business for underinvesting in innovation, might easily be a portrait of Barack Obama’s America. Big government has been on the march for much of the past decade. The Beijing consensus celebrates the alliance of big government and big companies. Much of the public sector has resisted the power of vouchers and internal markets. The battle that Norman fought for so long has still not been won.

Copyright © The Economist Newspaper Limited 2010. All rights reserved.

Norman Macrae ... journalist and visionary

Dear Colleagues

Norman Macrae died last June at the age of 89. He worked at the Economist for about 40 years, 23 years in the post of Deputy Editor. This is a wonderful description of his contribution to journalism via the Economist ... a must read. http://www.economist.com/node/16374404?story_id=16374404

Peter Burgess

Thursday, November 25, 2010

Study study study ... wasting our money!

Dear Colleagues

I have just read this report titled "Private Delivery Care in Developing Countries: Trends and Determinants" written by Amanda Pomeroy(1), Marge Koblinsky(1) and Soumya Alva(2)
http://www.measuredhs.com/pubs/pdf/WP76/WP76.pdf ... 1 is John Snow Inc. ... 2 is CF Macro. As far as I can see, this study was funded by USAID.

I learned about this report from a list serve that has a dialog about health in Africa ... in the following e-mail:
November, 2010, Washington, DC-- JSI's /Amanda Pomeroy and Marge Koblinksy have authored a DHS working paper entitled, Private Delivery Care in Developing Countries: Trends and Determinants. This article used Demographic and Health Surveys (DHS) data from 16 countries to examine a) trends in growth of delivery care provided by private facilities, and b) determinants of private sector use within the health care system.

For a subset of eight countries, the authors examined determinants of a mother's choice to deliver in a health facility and then, among women delivering in a facility, their decision to use a private provider. Determinants of use were grouped by socioeconomic characteristics, economic and physical access and by actual/perceived need.

Results showed a significant trend toward privatization of delivery care over the 13 years covered in the study, but there was considerable variation in the characteristics driving this increased use across countries. The results warn against making generalizations on the effects of privatization on maternal health use.

Bluntly put ... I am not impressed ... worse I am really very disappointed. The work is almost totally something that we do not need. We need solutions not studies, especially studies that do not have much in them to move the health situation forward. The academic community and consulting community may be happy, but no change of any substance on the ground! I responded to the list serve as follows:
Dear Colleagues

I would like to see a dialog about solutions to the problems of health around the world. In my view this DHS working paper does not contribute very much to a dialog about solutions since it is 90% about "state" rather than "progress" ... and the concept of "performance" is almost totally missing.

Reports like this have been funded by various agencies in the international development community for 40 odd years ... and at the end of this time there are hundreds of reports and essentially no solutions to the core problems.

I was at a conference in New York last week at the New School where some high level people in development assistance talked about the progress that has been made. I tried to ask a question about progress achieved compared to what should have been achieved but did not get much of an answer. The problem is that the dialog is based on a whole lot of study that is subject to enormous potential for statistical interpretation ... and very little of the data has the reliability that one should be getting.

My perspective is that a very different medical care model is needed that recognizes that developing countries have little money but a lot of people ... many of whom have some training ... many of whom could do a lot with a modest amount of training ... etc. In other words there needs to be the best possible use of human capital rather than merely doing things based on welfare money that flows from donors. We also have to look at the dysfunction of the business economy in the development context ... and the resource flows that are making profit
for some while leaving most in continuing poverty.

All of this becomes clear when data a looked at carefully and evaluated with an "accountant's" mindset!

I am appalled at how much development assistance has done so little over a very long time! There is a better way.

Peter Burgess
Peter Burgess
Meaningful Metrics for a Smart Society
It is painful to see scarce funds being used over and over again to do things that have almost no impact on the work needed to improve the health of real people in poor places!

Peter Burgess

Monday, November 15, 2010

There has to be a paradigm change ... we have the metrics to support it!

Dear Colleagues

A new book "Rebooting the American Dream" by Thom Hartmann has recently been published. I have only read some excerpts and they are quite thought provoking. The following caught my attention:
"... when Ronald Reagan came into office, as the result of 190 years of Hamilton’s plan, the United States was the world’s largest importer of raw materials; the world’s largest exporter of finished, manufactured goods; and the world’s largest creditor.

After 30 years of Reaganomics, we’ve completely flipped this upside down: we’ve become the world’s largest exporter of raw materials, the world’s largest importer of finished goods, and the world’s largest debtor. We now export raw materials to China, and buy from it manufactured goods. And we borrow from China to do it.
Part of the reason why this got my attention is that there was a time when the British economy was very powerful ... importing raw materials and exporting manufactured goods.

In True Value Metrics there can be a good quality of life ... but there cannot be a money wealth redistribution along the lines of what has been happening for the past several decades ... which some eminent economists and business journalists have described as a period of some of the greatest sustained economic growth ever. The money metrics might have given this impression, but the reality is that it was being done on top of what eventually turned out to be a bubble of historic scale!

Peter Burgess

The big risk of polluting groundwater should not be discounted!

Dear Colleagues

RISK ... something nobody wants to talk about.

I just came across this piece ... text below:

Oil is a big part of the modern profit economy ... water is something most people in rich countries take for granted. The dangerous problem is that there may well be a link between the "frack" process for extracting natural gas and the pollution of groundwater.

This RISK is serious. My approach to risk is not purely mathematical, discounting the danger of an event by a probability ... but considering the danger of the event itself. What would be the impact of groundwater for New York City becoming tainted with toxins ... one can hardly imagine!

I certainly do not want to trust Halliburton with this risk.

Peter Burgess
Halliburton to EPA: Just Trust Us and Go Away
by Jess Leber November 09, 2010 10:49 AM (PT)

Oh, Halliburton. How your arrogance astounds me.

Two months ago, U.S. EPA wrote nine major natural gas drilling companies a letter. It politely asked the recipients to voluntarily tell agency officials the secret brew of chemicals they use to "frack" gas from the shale deposits. EPA wasn't even planning to make the ingredient list public, a policy the industry is fighting tooth-and-nail in Congress.

Instead, it just wanted the information to help with a crucial first-ever federal study of the health and safety risks of hydraulic fracturing, a drilling technique that has already ruined water and air quality in towns across the country and has proceeded unregulated thanks to the Dick Cheney-pushed "Halliburton loophole" passed in 2005. In case anyone's memory fails them, Cheney himself is a former Halliburton executive.

Today, EPA announced that 8 of the 9 companies complied with the request. You can take a wild guess which one refused.

EPA now issued a subpoena to Halliburton to compel the information from them, since it has a tight legal deadline to provide the initial results by the end of 2012, and that will be sort of hard to meet without knowing the chemicals they are studying.

Halliburton's antics do not stop at the federal level.

As the anti-fracking advocacy group EarthWorks points out, its lobbyists have fanned out to weaken or halt public disclosure laws in major fracking states. Against the wishes of the industry, Wyoming recently passed a law to require the first disclosures of drilling toxics. And a proposal now being considered in Pennsylvania has now been successfully weakened at Halliburton's specific behest.

Halliburton argues the chemicals are trade secrets. But when those chemicals risk contaminating public water supplies and producing huge volumes of toxic wastewater that the public must deal with—trade secret or not, we all have the right to know.

As Earthworks writes in a clever headline, "Halliburton to PA govt: "trust us." PA govt to Halliburton: "ok." PA citizens: "What!?!"

Don't let Halliburton get away with this any longer. We don't want to trust them. We want to know.

Tell Halliburton to disclose its fracking chemicals by signing this petition.

For global progress ... what is really important?

Dear Colleagues

How important are monetary and fiscal policies? How important are Governments and the Central Banks? How important are Capital Markets and the Banking Sector?

I spend a certain amount of time listening to Bloomberg radio, and you would think that these things are really important ... but I would argue that in reality they are not really very important at all.

What is important is the underlying capacity of society to be productive and to be surplus producing. This is a function of what scientists and engineers are able to do to make activity efficient ... to get more output for less input.

It is also a function of people making the investment to deploy high production processes. This is where banking and the capital markets come in ... they are able to facilitate investment. This is where policy can help ... but only modestly. The real driver is entrepreneurial technical innovation way more than it is purely political or financial!

As the system of True Value Metrics is articulated it becomes increasingly clear that sustainable progress is going to be achieved when billions of people are making decisions that move their communities forward with more and more surplus production ... a win-win model. This is a contrast to the zero sum system that has prevailed in the "rich" economies where wealth accumulation has been too much at the expense of some sector of society ... either locally or in the global economy.

Win-win is a better way forward ... but it will only work when the metrics are showing both the money profit dimension and the value dimension

Peter Burgess

Friday, November 12, 2010

Concern USA ... excellent fund raising ... good stories ... no value accounting!

Dear Colleagues

I really do not know why the big and efficient fund raisers for social progress activities do not embrace a value based accountability system like True Value Metrics. These organizations tell heart rending stories about the problems ... then they tell impressive stories about what they are doing ... but they do it in a way that makes it almost impossible to make any judgement about how well they are doing ... and whether their work is doing much good.

The following is an example from Concern USA ... they send me (and perhaps millions of other people) periodic e-mails for fund raising ... but nothing seems to be accessible about what they have done with the money last week, last month, last year and in fact for the last several decades! This is the fund raising email text:
This Week's Challenge: Winning Back the Water in Ethiopia
Field Challenge Friday Team to me

Winning Back the Water in Ethiopia
Posted on Friday, November 12th, 2010
By Joan Bolger, Communications Officer, Concern NY

IMAGE Abebech Tito, from the village of Fango Bijo, Ethiopia

There’s a saying in southwestern Ethiopia and not surprisingly—in an area ravaged by drought for three months of the year—it relates to water. Loosely translated it goes: it’s impossible to win back your water after the bucket has tipped over.

Abebech Tito, a mother of five, told me this through the school fence near her children’s classroom as she considered how her life might have been different had she not dropped out of school at Grade 8. She delivered the proverb with a smile and a shrug. “It was my own foolishness,” she added.

Her village is located in the Rift Valley in the Southern Nations, Nationalities, and People's Region (SNNPR) of Ethiopia, where recurrent drought and the prevalence of malaria is notoriously high.
When I followed the link to learn more ... the first step to being a donor, I reached the following text:
This week, Joan Bolger, Concern Worldwide US Communications Officer, writes about her visit to the remote village of Fango Bijo in Ethiopia where she spoke to Abebech Tito, a mother who had dropped out of school at Grade 8 and was determined to choose a different path for her children.

Two of Abebech's boys now attend the Concern-supported “non-formal” school that aims to offer the poorest rural kids “alternative basic education.” Many of these children live in very isolated areas where there are few, if any, government schools—they have to walk long distances every day, on their own, to reach them.

Joan challenges you to learn about the barriers that prevent children in rural Ethiopia from having access to basic education – and to share this blog with your friends.
Now I like education as a "development investment" and I am very much aware how little money needs to be involved in running a "non-formal" school that can be a very good investment. I am also very much aware that the way the modern relief and development community does its monitoring and evaluation (M&E) is horrendously expensive are not very useful. For the money that was spent in having Joan Bolger visit this location and write this story, perhaps 100 children could have had a year of "non-formal" education.

In True Value Metrics, part of the core information is to relate the amount of education capacity in the community in the past ... with the amount of education capacity in the community now ... and to estimate how much resources were used to get from state A to state B. A second element is to assess how much additional human capacity has emerged as a result of the education ... how much better educated are people becoming. A third element is to understand whether or not the education has any value in making the community a better place ... in making the family more able to earn more and move modestly forward to a more prosperous (less poor) situation.

When True Value Metrics is done in the community by local people it costs very little ... and when it is studied by visitors ... or communicated to donors, it gets to be very interesting. Top down is very expensive ... bottom up enables a lot of value for a modest cost.

Peter Burgess

Thursday, November 11, 2010

Transparency and Accountability ... Kris Dev in India

Dear Colleagues

I have collaborated with Kris Dev in India for almost a decade. His work in mobilizing IT to improve governance is impressive ... and he keeps on going.
To: Peter Burgess
Seminar on Transparency and Accountability in Public Administration
From: Kris Dev
Thu, Nov 11, 2010 at 2:02 PM


When most countries are witnessing a plethora of alleged high level corruption cases in public administration running to millions of dollars the presentation made at the National Seminar on Transparency and Accountability in Public Administration can be seen at: The NDTV-HINDU coverage can be seen at the below link from 2.58 min to 4.27 min.http://www.youtube.com/user/ndtvhindu#p/u/13/4PiTICt-SZo

Kris Dev, e-Gov Consultant, Chennai
Gopala Krishnan Devanathan,
President & CEO,
Life Line to Business / Life Line to Citizen,
Chennai, Tamil Nadu, India.
email: krisdev@gmail.com
URL: http://ll2b.blogspot.com
Ph: + 91 98 408 52132 / 1 (206) 274 1635
Twitter: @krisdev

- Winner of Innovations Award 2009 for IT Innovation;
- Manthan Awardee 2006 for Rural Grass-Root Initiative in Establishing Unique Biometric Identity for e-Inclusion & Livelihood Creation;
- Selected for World Bank Innovation Fair 2010.
These are also interesting notes
Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. … Article 25 of the Universal Declaration of Human Rights.

"A quick evaluation of the progress we have achieved in the last 20 years shows that in the area of poverty alleviation, we have not done enough. History will judge us harshly, unless we seize the opportunity to do more." - Archbishop Njongo Ndungane, President and Founder, African Monitor.

"When the Power of Love overcomes the Love of Power the World will know peace." Jimi Hendrix.

"Be not afraid of life. Believe that life is worth living, and your belief will help create the fact." - William James

"There is nothing more sacred to a free people than the right to govern themselves and take matters into their own hands when their elected officials have failed them. When the very government which the people have created to secure their liberty and domestic tranquility imposes restraints on their freedom, the people have a duty to try to break the shackles themselves." - Ward Connerly, Chairman of the American Civil Rights Coalition.

"We are powerful before the powerless; and powerless before the powerful"; how sadly true! why not reverse it?!

Practice is better than precept.
At the present time there is the 14th International Anti-Corruption Conference (IACC) in Thailand. It is good that there is now more talk about the problem of corruption than 20 years ago ... but it is sad there is so much corruption to talk about. In fact, what is disconcerting is that corruption is part of the mainstream modern economic system with a lot of influential people and organizations implicated in it. Worse ... the rule of law often contributes to corruption by making it difficult to stop it ... even though it is clear that something untoward is going on!

The implementation of True Value Metrics is a part of a paradigm shift in transparency and accountability that will help ... maybe significantly!

Peter Burgess

Risk ... natural gas production, shale and drinking water

Dear Colleagues

Natural gas production is one of the boom areas in the energy field ... but there may be risks that are presently "off-the-radar" in the news and the public dialog.

In the aftermath of the BP Gulf oil spill, the matter if risk ought to be high on the agenda for public dialog ... but sadly this does not seem to be so.

While energy is important ... water is even more important. In the main the United States of America has been able to manage the water situation, but it is getting more tenuous as time goes by. The major water infrastructure construction that has taken place in the past would not be allowed today because of rules about "environmental impact" ... so much of the water presently being used is available courtesy of "old" infrastructure.

Potable safe groundwater is a key to water in the United States ... but what is going to happen to groundwater when natural gas is broken out of shale formations. There is some evidence that the groundwater may become polluted ... maybe not a lot of evidence but enough to be concerned.

When asked how to "un-pollute" the groundwater ... engineers tell you that it cannot be done.

At the moment the water in New York City is natural and very pure. The source of this water is many miles North of New York City in formations that may soon be subject to natural gas exploration and eventually production. How much is the "risk" in a situation where New York City no more has potable water?

I would like to see more informed dialog about all aspects of this question. At the moment the dominant part of the dialog is that there are big profits to be made by exploiting natural gas in the shale formations around the United States. But what is the pollution risk for the country's groundwater?

Peter Burgess

UN/World Bank write that natural disaster costs set to rise sharply

Dear Colleagues

In a new report titled "Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention" the UN/World Bank write that natural disasters are going to cost a lot more. This is from an IRIN news item http://www.irinnews.org/report.aspx?Reportid=91064. The text of this news item is below.

There is something very bothersome about the reports that come out of the UN and the World Bank. In some ways they are simply objectives studies ... and in another way they are terrible indictments of the performance of global leadership, of which they are an important part.

One way to interpret the findings that get published in UN and World Bank reports is to conclude that these organizations are a big part of the reason why the findings are the way they are. The fact that natural disaster costs are set to rise sharply is that these organizations ... and the other organizations associated with natural disaster recovery are incredibly badly managed and have extremely high cost operations largely associated with high salaries, high operational costs and low efficiency.

High salaries, high operational costs and low efficiency are a result of years and years of work without any significant management controls. The UN and the World bank advise ... but like the cobbler of old, they do not mend their own shoes! The management systems in the UN and the World Bank would have looked modern in the stone age ... but that is about it.

True Value Metrics is a response to the missing management information dimension of the international relief and development sector ... and to the lack of metrics in the society we live in. We know a lot about corporate performance and the stock market ... we know rather little about performance of economic activities and society. This needs to change, and we hope that True Value Metrics can be a step towards a way better use of resources in our society.

This report is another call to action to change the status quo where high costs produce little far too little impact ... and nobody seems to be responsible for anything. The UN and the World Bank are responsible parties in the prevailing high costs and low performance in the international relief and development arena!

In Brief: Natural disaster costs set to rise sharply - new report

Costs because of more intense and frequent cyclones will mount
Johannesburg, 11 November 2010 (IRIN) - A new report by the World Bank and the UN says the cost of coping with natural disasters could triple to US$185 billion per year by the end of the century.

The report - compiled mainly by economists over two years - said the projection did not include climate change impact costs. But added more frequent and intense tropical cyclones because of climate change could raise total costs by an additional $28-$68 billion a year by 2100.

Entitled Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention, the report makes four main policy suggestions to governments: make information more easily accessible to prevent disasters; permit land and housing markets to function; provide adequate infrastructure and public services; help develop effective oversight institutions.

Meanwhile, donors need to focus more on prevention: “About a fifth of total humanitarian aid between 2000 and 2008 was devoted to spending on disaster relief and response" but far less was spent on prevention, it said.


Friday, November 5, 2010

The Fed goes one way ... is the economy going the other?

Dear Colleagues

Some metrics about the US economy ... a few months of new job creation at a rate of more than 100,000 a month, and 10 months of positive private sector job creation. A modest sign of the increased stability of the job situation in the United States ... but the average unemployment rate of 9.5% is way too high ... and the level of better job seekers may be as high as 17%.

The financial and big corporate community has plenty of cash ... and is getting very low cost credit if they want it ... not so much the small business that is struggling on the front line of little aggregate demand.

The US Fed has chosen to launch a new round of quantitative easing ... QE2 ... and when it was announced the US stock market went up a near record amount ... to a level that is about where the stockmarket was before the financial implosion.

Bluntly put ... something is very wrong with the way the markets are working and how the levers of power are being manipulated,

Apparently the German financial minister has described the US Fed's action as "clueless" and many others are looking at the present US situation with increasing concern ... not to mention their view of the US electorate's enthusiasm for the Tea Party and Republican agenda. Serious foreigners seem to have a longer memory than the American voters ... who seem to forget that it was free spending Republicans and an anything goes approach to regulation that precipitated the financial disaster ... and without very responsible government intervention for the past 24 months saved the day. We should never forget!

William Fleckenstein who is an expert on the Fed seems to have a better perspective than most about what the Fed should be doing ... others associated with the US capital markets are laughing all the way to the bank because printing money is making their speculation profitable!

The system is very dangerous and needs better metrics ... metrics like True Value Metrics that have a value component for society as well as the money profit for investors.

Peter Burgess

Raising money by NGOs based on disaster news ... obscene!

Dear Colleagues

The business model of the modern NGO world is obscene ... not much better than the obscene business model of the financial sector that delivered a near catastrophic meltdown of the global economy.

When the earthquake struck in Haiti in January ... within 12 hours most of the big NGOs had deployed websites to solicit donations ... and within days many thousands of other organizations were soliciting donations from the public that really wanted to help.

I have been trying to get some accountability that is worth a damn ... but there is none. The last thing that anyone in the NGO community seems to want is some rigorous accountability, and it becomes very questionable whether these organizations deserve to be funded at all. They do everything to make donors "think" that they are making a big impact on critical humanitarian issues ... but verifiable information is almost totally missing.

I am prompted to write this note today because Haiti has moved back into the news ... first because of a cholera outbreak that has killed an estimated 400 people up to now and several thousand sick. And at this time a tropical storm is very near Haiti and the winds and rain are going to do damage. The email copied below is an example of an NGO using these events to build up its cash reserves.

As far as I am able to discern this NGO is no better than average ... a very low bar ... in its public information about accountability and its performance. Clearly the world has a huge amount of "failed" relief and development ... and interestingly nobody is responsible. Nobody ... or everybody ... nobody knows, and this seems to be the way the executives of these organizations want it to be.

A start on accountability is to know how well the organization is performing ... what impact the organization is having ... but it would appear that this information is almost totally missing. Increasingly, money is being spent on metrics, but from my perspective as a one time accountant/auditor ... and management information specialist ... the money is getting spent and better metrics that have any clarity remain missing.

The need for True Value Metrics (TVM) is obvious ... but having this turn into demand is unlikely. Accordingly, the deployment of TVM may well be done on top of an industry that would really prefer that TVM goes away!

Below is the email from ActionAid ... and please note, this NGO is one of the better ones! It does not name Tomas ... the tropical storm/hurricane approaching Haiti ... but it clearly is using the association! These fund raising people are expert!

Peter Burgess
Dear Peter,

Global climate change is endangering the world's poorest communities.

But now the Obama Administration has a chance to help.

Tell President Obama to take the steps necessary to help poor nations cope with climate change.

They're called extreme weather events – monsoons or heat waves that result from global climate change. And nowhere are their effects more horrifying than in the world's poorest nations.

But now you and I have a small window of opportunity in which to speak out for the millions impacted each year by these natural disasters.

The Obama administration will participate in a major conference on climate change this month where it will make decisions that will impact the next decade of climate policy. Before they get there, we must make our voices heard and demand the Administration announce how it plans to help the world's poor cope with the brutal impact of climate change and transition to clean energy economies.

Peter, we only have until the end of the month to deliver our call to action – and along with our coalition partners we've set an ambitious goal of 50,000 names in order to make the most effective case possible. Will you join our call and help us reach our goal?

Tell President Obama to take real action to help poor nations adapt to the impacts of climate change.

At the Copenhagen climate conference last year, the United States and other developed countries agreed to jointly mobilize $100 billion per year by 2020 to help developing countries adapt to the impacts of climate change, protect their forests, and promote clean energy.

The tools for raising this money are within reach right now. With enough public support from activists like you, we can convince President Obama to back initiatives that could have real, tangible impacts, such as:

Removing subsidies from the world's biggest commercial polluters to slow the pace of climate change;
Placing a tiny tax on the financial sector's biggest transactions to generate additional funding for life-saving climate adaptation programs; and
Taxing the shipping and aviation industries whose largely unchecked pollution contributes to global warming.
Sign the petition to President Obama now. Tell him to support funding proposals to meet the urgent needs of the world's poor in the face of climate change.

We'll deliver your petitions in person when we meet with key officials in the Administration at the climate conference in Cancun, Mexico in December – all in our concerted effort to get President Obama to act decisively and without delay.

As part of ActionAid's vocal online community, you can be a voice for the world's marginalized poor by helping us reach our coalition's 50,000 petition goal – and by showing President Obama how vital it is to act.

Lend them your voice. Be one of the 50,000 voices standing for the rights of poor people. Sign our petition and tell President Obama to act now.

Thank you for your support and for your continued belief that together – standing up for others – we can all make a difference.


Ilana Solomon
Policy Analyst
ActionAid USA

Share on Facebook | Share on Twitter

Thursday, November 4, 2010

Casino finance ... Stockman does not buy it!

Dear Colleagues

Stockman was right in the 1980s when he opined that the Reagan economic policy would end up with a government fiscal crisis ... which it did. People have short memories, and history gets rewritten.

By the end of the 2nd term of the Reagan presidency, expectation was that the US economic superpower status was over and it was going to be Japan that dominated the future. Reagan did some good things to restore American confidence in itself post Nixon and post Vietnam, but economic management was not something he did well at all. So much gets forgotten!

Today ... Thursday, November 4th, the stockmarket is going up to high levels in response to the diminished power of the democrats in Washington, good profits from the big business sector, and a large commitment by the US Fed to "QE2" ... shorthand for the 2nd Round of Quantitative Easing.

It appears that Stockman sees the current capital market euphoria as stupidity at its best ... my words, not his, but the idea is the same. The problem with the economy in the United States and in most of Europe is simply a structural mismatch between the jobs that need to be done, the money there is to do them and worker expectations. This is a toxic reality. What is going on in the capital markets is hope sitting on top of a mountain of paper money ... not even paper, really ... just electronic notations in supra-national level bookkeeping.

Stockman describes what is going on as monetary policy that is seriously like heroine addiction ... something that makes you feel good, but is devastating to you in every possible way ... and I could not agree more.

The capital markets ... the banking sector ... are still extremely fragile. This is on top of a US unemployment rate that stubbornly stays at an official level of about 9.5% ... and is way higher in many parts of the country and in certain demographic groups.

The Obama Presidency has delivered two years of stability, and improvement in the numbers that move stock markets higher ... like higher profits for big business. But the core foundation of the economy and society remains mired in depression with few signs that there is going to be much help from the economic elite and political leadership.

The global economy is moving ahead because there is true economic demand in the BRIC economies unlike the "faux demand" in the formerly rich economies with their continuing addiction to growth as the key metric about socio-economic performance. Profits in the corporate sector have been going up ... but now commodity prices (raw material costs) are going up in due course profits will come down ... and it is my guess most big corporations will solve that problem by further reduction in labor.

The big question is how to get the corporate sector to pay some attention to their role in making socio-economic progress as well as capital market progress!

It was a pleasure to hear what Stockman had to say ... on Bloomberg TV ... and I look forward to hearing some more.

Peter Burgess