Pages

Saturday, June 11, 2011

Rethinking GDP: Why We Must Broaden Our Measures of Economic Success


The Religious Right and GOP Escalate Battle to Destroy Public Schools



By Joseph L. Conn, Church & State Magazine
Posted on June 5, 2011, Printed on June 10, 2011
http://www.alternet.org/story/151204/the_religious_right_and_gop_escalate_battle_to_destroy_public_schools
America’s public school system and the constitutional separation of church and state are under relentless assault.
In late April, the Indiana legislature approved House Bill 1003, a measure that broadly funds religious and other private schools. The multi-million-dollar program sets up a new school voucher scheme, expands a tax credit program and offers tax deductions for the costs of private education and homeschooling.
Gov. Mitch Daniels was a chief promoter of the package, and he clearly means to force taxpayers to fund religious education. He is the founder and driving force behind The Oaks Academy, a “Christ-centered” private school in Indianapolis. Daniels sometimes poses as a moderate, but his education plan is anything but.
Make no mistake. This is not about “education reform.” This is part of a national drive to radically privatize education. Indiana is just one of many states where mega-bucks foundations and sectarian interest groups are demanding taxpayer dollars for parochial and other private schools. Their long-term goal is to shut down the public school system or leave it so damaged that its role in American life is minimal.
In October 2010, Religious Right godfather Tim LaHaye addressed the Council for National Policy about his goals for education. (The secretive CNP is the premier meeting place for Religious Right zealots, TV preachers, right-wing fat cats and others who want to take America back to the Dark Ages.) He viciously mischaracterized the public schools and issued a call to arms for the CNP and its allies to remake them.
“I have a pet concern,” said LaHaye, the fundamentalist preacher and “Left Behind” author who founded the CNP. “And I think it is the concern of everyone in this room; and that is we are being destroyed in America by the public school systems of our country. And it was Abraham Lincoln who said, essentially, let me educate the children of this generation and they will be the political leaders of the next generation.
“And, folks, we have let the enemy come in and take over the greatest school system in the history of the world,” he continued. “At one time, Noah Webster was the school master of America, a dedicated Christian who founded people on the Word of God and principles of God. And I’d like to see you join me in prayer that God would let us wrestle control of the American school system from the secularists, the anti-Christians and anti-Americans that want to bend the minds of our children.
“At our expense,” LaHaye blustered, “they want to take the most priceless thing we have – the brains of our children – and let them educate them. They educate the teachers, they provide the textbooks, and we give them the most precious things we have. That doesn’t make any sense to me. I’m hoping that this conservative movement will be long enough to get a majority who can vote what I consider a new bill of rights – a bill of parental rights where parents can decide where to send their children to school.”
Touting “biblically based education,” LaHaye concluded that ideology is the answer to education reform, not additional funding.
“May I suggest,” he said, that “more money is not what they need, it is a better ideology, and we have already got it.”
LaHaye’s take on public schools is, of course, a pack of lies. Our school system is not secularist or anti-Christian or anti-American. It welcomes children of all faiths (and none). Nobody is turned away from the door, regardless of religion, race, sex, sexual orientation, family background, disability or economic situation. And our public schools are generally governed by elected school boards, whose members represent their diverse communities and are answerable to them.
But LaHaye’s screed serves an important purpose. It gives us the master plan that he and other right-wing ideologues are pursuing. That’s why we have raging battles over vouchers in Pennsylvania, New Jersey and a host of other states. (And it’s why House Speaker John Boehner strong-armed through Congress a federal taxpayer-funded voucher scheme in the District of Columbia.)
LaHaye and his cronies hate America’s vitally important public school system. They want to shut it down and move to a “choice” system where taxpayers subsidize private schools that are accountable only to the sponsoring clergy and are free to indoctrinate children in their “biblically based” ideology. They don’t want to improve public education, as they sometimes claim; they want to destroy it.
LaHaye is not alone in this battle. Betsy DeVos, the infamous Koch brothers and other wealthy members and supporters of the CNP are funding the nationwide attack on public schools and church-state separation today. Don’t be fooled. They often put forward bogus “parents groups,” to serve as front operations, but it’s they who are calling the shots.
Wake up, America. This radical movement is advancing. Let your legislators and members of Congress know how you feel before it’s too late.

Did Herman Cain turn around Godfather's Pizza?



By Angie Drobnic Holan
Published on Friday, June 10th, 2011 at 10:59 a.m.
The Republican field for president includes the usual mix, professional politicians who have been governors, senator, or speaker of the House. Herman Cain stands out not only because he hasn’t held elective office, but because he used to sell pizza.
His experience in business has attracted early interest from Republican voters, especially the tea party movement. Last month, a Fox News focus group saidoverwhelmingly that Cain won the first GOP debate.
Pizza is Cain's biggest selling point. He says his track record running Godfather’s Pizza, a chain that once billed itself as "the cure for the pizza emergency," shows he has the ability to run the country. The 620-store chain was on the brink of bankruptcy when he arrived in 1986, he says, and he "turned it around with common-sense business principles."
A PolitiFact examination of Godfather’s, based on interviews with industry analysts and company officials, shows Cain is largely correct. The chain wasn’t literally preparing paperwork for bankruptcy, but it was widely considered troubled. Cain changed that by uniting the franchisees, overhauling the chain's advertising, and getting his team focused on its core mission: pizza.
Burgers before pizza
Cain grew up in Atlanta, the son of a chauffeur to a Coca-Cola executive. He majored in math at Morehouse College and got a master’s degree in computer science from Purdue University. He started his early career as a technology manager before eventually joining Pillsbury and entering a fast-track program for young executives.
His first big challenge in the restaurant business was turning around the Burger King stores in Philadelphia, which at the time were low performers. Cain went through "burger boot camp," putting burgers on the broiler himself and learning the restaurants' operations from the ground up. He went on the road, visiting other franchises in the region and getting other managers to improve operations. Colleagues remember him as a sharp manager and an inspirational leader with a knack for getting people to worth together.
Spencer Wiggins was a human resources officer working at Kraft Foods when an executive headhunter recruited him for Cain’s Burger King project. Wiggins said he wasn’t interested in working in restaurants, but the head hunter talked him into meeting Cain.
When Wiggins walked into the room, Cain pulled out a folder, looked him right in the eye, and said, "Spencer Wiggins! My man! I have been waiting for you!"
"It was like he had known me all my life," Wiggins recalled from his home in Nashville. "And the next thing I knew I was working for the Burger King corporation."
In 1986, Pillsbury tapped Cain to rescue Godfather’s, an Omaha-based subsidiary it had just acquired, and the story virtually repeated itself. Cain asked Wiggins to go with him.
"I said ‘Herman. C’mon, man. Omaha, Nebraska?’ I just don’t have it on my map to go to Omaha. Herman said, just come out and look around. And at the end of the day, I ended up moving to Omaha."
The Godfather’s story
Pillsbury bought Godfather’s largely by accident, according to press reports from the time. Godfather’s was part of Diversifoods Inc., a conglomerate that included more than 300 Burger King franchises. Pillsbury wanted the Burger Kings, and the chain of more than 800 Godfather’s pizza restaurants came with it.
"The value of Diversifoods was its ownership of the Burger Kings, and the deal made sense without Godfather's," John McMillin, an industry analyst, told the Chicago Tribune shortly after the deal. "Pillsbury got Godfather's for nothing, and some said they got what they paid for."
The chain’s problems included franchisee lawsuits, an overly long menu, and a dejected workforce. Even its TV ads seemed hapless, showing a car full of executives driving around, unable to find a Godfather's. ("Find one. It's worth it," the ad lamely concluded.) As Cain said later, the chain had "had one foot in the grave and the other on a banana peel."
Cain attacked problems on every front. He declared the company’s advertising account up for review, pitting ad agencies against each other in a bidding war. He trimmed the menu and enforced quality standards. He pushed more restaurants to offer delivery, and he closed low-performing franchises.
He emphasized communication, giving speeches at important moments to employees and franchisees. After his first 60 days at Godfather's, he gave a speech he called "get on the wagon," which he now uses in political speeches.
When he was a boy, Cain said, his grandfather, a potato farmer, would hitch up his mules for the weekly trip to town. Any grandchildren who wanted to go could ride along.  Cain would finish the story in his grandfather’s thundering voice: "Them that’s going, get on the wagon! Them that ain’t, get out of the way!"
Charles Henderson, who runs coffee kiosks in Pennsylvania, was Cain’s director of marketing back then. He says Cain is "probably the most inspirational person I’ve ever met in my life."
"He can be mesmerizing. He’s very dynamic. I’m not slamming our current president, but Herman Cain will give a 20- or 30-minute speech extemporaneously, and certainly without teleprompters. He is without a doubt the most dynamic speaker I’ve ever heard," Henderson said.
Henderson said Cain succeeded because he immersed himself in all aspects of the business and wasn’t afraid to get his hands into the dough. Cain baked pies on a weekly basis after he arrived in Omaha. "He loved to make pizzas. We had a test store over on Pacific Street, which wasn’t too far from Godfather’s, and once a week, he’d round us all up and we’d go make pizzas," Henderson said.
Cain directed an overhaul of the Godfather's television ads that focused on Godfather's "hot slice," a customized pizza slice aimed for the lunch crowd and intended to compete with Pizza Hut's Personal Pan Pizza. The new ads showed a secretary at a desk about to have a "pizza emergency." Godfather's, of course, was the cure.
Later commercials tended toward attention-getting and even bizarre humor. The "Studney twins" – an old white guy and a young black guy in garish blue and green tuxedos – promoted Godfather's two-for-one specials. Another ad featured attorney-turned-actor Ben Stein of "Ferris Bueller's Day Off" as a burned out hipster needing pizza.
Cain himself even appeared in a series that Advertising Age named one of the best campaigns of 1989. In one ad, Cain told viewers Godfather's has conducted exhaustive research to find out why customers preferred Godfather's pizza. He introduced his director of research, who unveiled the results by unfolding a piece of paper and reading two words: "More topping."
"Enjoy your Godfather's pizza and take life one bite at a time," Cain concluded.
Jeff Campbell is the retired Pillsbury executive who selected Cain to run Godfather’s. Reached by PolitiFact at his home in San Diego, he said there was no doubt in his mind that Cain turned Godfather's around.
"He was the best thing that happened to Godfather’s in a long time," Campbell said.
Cain has said that the chain returned to profitability within 14 months of his arrival. That number wasn’t possible for PolitiFact to independently confirm because the chain did not report its profits as a stand-alone unit, but industry analysts do not dispute that Cain stabilized the company.
Technomic, a research and consulting firm focused on the restaurant industry, has research data on Godfather’s going back to the 1970s. At PolitiFact’s request, vice president Darren Tristano examined the revenues and franchise numbers for Godfather’s during the time Cain headed it from 1986 to 1995.
It's not possible to determine profitability from those numbers, but they do show Godfather's place in the market, particularly in comparison with its competitors.
"It’s really hard from that period to find a strong positive or a strong negative. It’s more like ‘steady the course,’" Tristano said.
Still, "steady the course" isn’t bad for a company that was troubled to start out with and in an industry that’s punishingly competitive, analysts said.
Godfather’s position was particularly perilous. It wasn’t as big as chains like Pizza Hut and Domino’s, and it also had to compete with locally owned mom-and-pops in just about every market.
"They had to be very innovative to compete with the big three and with the little guys. They couldn’t rest on their laurels," said John Correll, a Michigan-based pizza industry consultant. "For a number of years, Herman Cain and his management team were able to pull that off."
Pizza Hut, the industry leader at the time, was a particularly difficult foe. After Godfather's launched its "pizza emergency" campaign in 1986, Pizza Hut matched it with ads imitating the emergency broadcast system. In the event of a real pizza emergency, "you should go directly to Pizza Hut and order their famous pan pizza," the ad said. Pizza Hut executives said the similarity was coincidence.
Cain said the alleged thievery wouldn’t matter in the end, and he wouldn’t pursue legal action. "It's not a big deal to us," Cain told AdWeek, which documented the feud.
Godfather’s never grew fast enough to outpace giants like Pizza Hut and Domino’s, but today it still claims about 620 franchises across the country.
John Chisholm was a Godfather's franchisee who owned 90 restaurants in five states when Cain arrived to run the company.
"His leadership and his ability to deal with people were just outstanding. I have nothing but the highest praise for Herman Cain," Chisholm said.
Cain's primary accomplishment was motivating the people who worked for Godfather's, Chisolm said. The turn-around happened "mostly through motivation and talking to people and getting people to work as a team."
Chisholm recalled Cain's first speech to the entire company as one of the "most charismatic" he ever heard.
Cain included a copy of the speech in his 1999 book, Speak as a Leader.
"Sixty days ago I came to Godfather's with a curiosity about what I would find. I had already accepted my newly bestowed responsibilities even before I stepped foot on Nebraska soil and before I met or knew anyone or anything about Godfather's. … Sixty days ago, I came to Godfather's anxious to tackle a situation considered by some of our external constituencies to be irreversible.  I came without a golden parachute because I never entertained the idea that the situation was irreversible. I came committed to prove the skeptics wrong because I have a personal, fundamental belief in the power of human determination. I came to Godfather's believing in you even before I met you. I challenge you to commit and believe in yourself and Godfather's pizza as a system."
Life after pizza
Two years after Cain was named CEO, Pillsbury decided to get out of the pizza business and sell Godfather’s. Cain and his management team decided to buy the chain in a leveraged buyout for an undisclosed sum. He continued as CEO, but his transition away from day-to-day management started around 1994. That was the year Cain went toe-to-toe with Bill Clinton over health care reform.
Cain was part of an audience in Omaha watching a town hall with Clinton, who was promoting his health plan. Cain was selected to ask Clinton a question, and he began by commending Clinton for "making health care a national priority." But then he said he had run the numbers and found that costs for Godfather’s would be so high that he would have to eliminate jobs to pay for health care for the other employees.
"On behalf of all of those business owners that are in a situation similar to mine, my question is quite simply, if I’m forced to do this, what will I tell those people whose jobs I will have to eliminate?"
Cain and Clinton went back and forth on the numbers and details of the policy, before Clinton concluded by telling Cain to send his numbers to the White House.
The high-profile exchange came as Cain was getting more involved in government and politics. He was serving as a board member of the Federal Reserve of Kansas City and was about to begin a year as president of the National Restaurant Association, eventually going to work for the association full-time.
A year after the town hall, Cain appeared with Speaker of the House Newt Gingrich to throw the association’s support behind welfare reform. In 1999, he left his post there to co-chair Republican Steve Forbes’ run for the presidency.
Cain formally ended his management of Godfather’s in 1996, turning over his CEO duties to Ron Gartlan, who remains CEO today. Godfather’s wouldn’t comment on Cain’s time there, but released a statement saying, "Godfather’s Pizza takes no position on political candidates, but we do make great pizza."
Cain moved to Atlanta in 2000 to concentrate on his public speaking career, his books and other business ventures. He eventually sold his stake in Godfather’s. In recent years, he’s worked as a conservative radio talk show host, and in 2004, he ran for a U.S. Senate seat in Georgia. He came in second in the Republican primary, behind the eventual winner Johnny Isakson, but ahead of Mac Collins, a sitting member of Congress.
Cain is still considered, at best, a longshot for winning the presidency. He’s been asked several times why he’s running, since he doesn’t have any experience. Cain has a standard reply that he seems to enjoy delivering.
"Well, all the people in Washington, D.C., they’ve held office before. How’s that working for you?"

Papantonio: America's New Service Economy



Uploaded by  on Jun 6, 2011
For millions of out of work Americans, the news that the private sector added more than 200,000 new jobs in April was a breath of fresh air. The only problem is that these aren't the kinds of jobs that Americans would normally be lining up to apply for. 62,000 of these jobs are for McDonald's, and many of the rest include minimum wage-paying positions that are either for seasonal work, or provide no benefits. This recovery poses a serious question -- are we becoming a service society?

Obama Touting Job Training, Not Aggregate Demand, As Key To Boosting Economy



By Matthew Cameron
The Washington Post reports today that President Obama will be making an appearance at Northern Virginia Community College on Wednesday “to discuss the importance of job training to improving the economy.” NVCC is one of Obama’s favorite stops when on the road, and the fact that Virginia is likely to be a battleground state in 2012 means he is probably looking for any excuse to engage the state’s voters. Nevertheless, the message he plans on delivering seems oddly out-of-touch with the nation’s current economic situation.
Although we don’t yet know the specifics of Obama’s speech, its billing as a discussion about “the importance of job training to improving the economy” suggests that the administration remains attached to the idea that the nation’s unemployment crisis is structural rather than cyclical in nature. That unemployment spiked for all education levels following the 2008 financial crisis, however, indicates the economy is plagued by more than just structural unemployment caused by a dearth of human capital. Rather, it is coping with severely depressed aggregate demand.
Of course, Obama has little say in whether Congress or the Fed acts appropriately. And it is true that job training is a good policy objective for the long-term strengthening of the U.S. economy. But if Obama hopes to convince voters that he cares about the immediate employment situation, he should address the real issue and not settle for nice-sounding speeches that essentially are irrelevant to the average American’s ongoing plight.

The Elderly And The Political Economy Of Deflation



I’m glad to see that my former editor Robert Kuttner’s article “Debtor’s Prison” (PDF) is sparking increased attention to the political economy of monetary policy. As Mike Konczaland Paul Krugman emphasize we seem to have something a rentier problem in this country, including the fact that the financial services industry benefits from too-low inflation in the wake of a credit bust:
I don’t mean to suggest that it’s all cynical; my experience is that there are relatively few people who consciously keep a secret set of intellectual books, who preach Neanderthal goldbuggism because it’s in their interests while rereading Keynes by dead of night to figure out what’s really happening. Instead, people generally manage to believe whatever is in their interests. And maybe not even that: I suspect that there are a fair number of small business owners who faithfully believed in Glenn Becks’s warnings of hyperinflation by 2010, quite unaware that the intimidation of the Fed has savaged their own bottom lines.
So let me add to this a constituency that’s even more important than the banksters: Old people. People in general overestimate the harm of inflation and old people are insulated from problems in the labor market. And of course old people have emerged as a core conservative constituency in recent terms. Obviously grandpa’s not sitting around saying “hahaha I don’t care if my son’s crushed by mortgage debts and my grandson can’t get a job!” But as Krugman says, people generally manage to believe whatever is in their interests. And grandpa’s developed a marked tendency to believe that austerity budgeting (with the current elderly exempted!) and disinflationary monetary policy are good for him and his grandchildren alike.

Unbalanced Deflation And Its Consequences



Something that I think often isn’t reported right in the business press is the meaning of real estate prices. All else being equal, there’s no reason to think of a market in which homes are expensive as “good” and one in which homes are cheap as “bad.” A home is a useful thing to get your hands on, so when homes are cheap it’s easier for people to get their hands on something useful. That’s a good thing.
The problem we’re dealing with is something more specific. People took out loans to buy expensive homes, and now that the homes have become cheaper that’s left the country with more debt. A Calculated Risk chart illustrates this:


The problem here is really with the expensive mortgages, not the cheap houses. Over the long run, an equilibrium in which houses are cheap and therefore mortgages are cheap too would be an excellent one to reach. The trouble is that when you try to reach this equilibrium through liquidation rather than inflation you get this unbalanced transition period in which the ratio of debts to assets goes up. And that, by the same token, is why monetary stimulus is preferable to trying to force people to swallow nominal wage cuts. Either reduces the cost of hiring a new worker, but one deflates debts along with incomes and the other is unbalanced and causes long painful transitions. Unfortunately, we’re on the bad path.

The perils of ignoring science



The perils of ignoring science
AP
Rick Santorum and Rush Limbaugh
I heard a remarkable thing on the radio the other day and it had nothing to do with a congressman’s nether regions.
A local NPR reporter was talking with Joseph Nicholson, CEO of Red Jacket Orchards in Geneva, New York, up in the neck of the upstate woods where I was born and raised. There’s been a lot more rain than usual, he said. Produce hasn’t been exposed to sufficient "heat units" -- in other words, the sun.
"We're going to be at least two weeks behind in harvest or ripening," he said, and if the skies don’t brighten up soon, yields could be down 30 to 35 percent. That’s a lot of lost apples -- and cherries, peaches and plums (although the rhubarb is doing just fine, thanks for asking).
As upstate kids we were told -- apocryphally -- that the only part of the world more overcast than us was Poland, so the idea that all these years later it’s cloudier than ever is startling. Is this part of manmade climate change?
Republican presidential candidate Rick Santorum sure doesn’t think so. The other day he told Rush Limbaugh "the idea that man… is somehow responsible for climate change is, I think, just patently absurd." He went on to call it a left-wing conspiracy, "just an excuse for more government control of your life… I’ve never been for any scheme or even accepted the junk science behind the whole narrative."
Better you should listen to Ram Khatri Yadav, a rice farmer in northeastern India, who recently complained to The New York Times, "It will not rain in the rainy season, but it will rain in the nonrainy season. The cold season is also shrinking." He’s experiencing climate change as a life or death reality. In a June 4 article headlined "A Warming Planet Struggles to Feed Itself," the Times reported, “The great agricultural system that feeds the human race is in trouble… Many of the failed harvests of the past decade were a consequence of weather disasters, like floods in the United States, drought in Australia and blistering heat waves in Europe and Russia. Scientists believe some, though not all, of those events were caused or worsened by human-induced global warming.”
For years, scientists believed that the carbon dioxide produced by greenhouse emissions were at least in part beneficial for crops, acting as a fertilizer that helped counterbalance the deleterious effects of climate change. But according to the Times, new research indicates "extra carbon dioxide does act as plant fertilizer, but that the benefits are less than previously believed -- and probably less than needed to avert food shortages."
The World Bank estimates that there may be as many 940 million hungry people this year. The international relief agency Oxfam projects already high food prices more than doubling by 2030 with perhaps half of that spike due to climate change. With those increases could come hoarding, gouging, panic buying and food riots like those that led to the overthrow of the Haitian government in 2008.
Nor is it just our food supply that has climate change breathing hot and heavy down our collective necks. City and state planners also are examining its impact on urban centers and preparing for the worst. A May 22 Times article notes, "Climate scientists have told city planners that based on current trends, Chicago will feel more like Baton Rouge than a Northern metropolis before the end of this century... New York City, which is doing its own adaptation planning, is worried about flooding from the rising ocean."
In Chicago’s case, scientists project that if global carbon emissions continue at their current pace, the Second City would have summers
"like the Deep South, with as many as 72 days over 90 degrees before the end of the century. For most of the 20th century, the city averaged fewer than 15…
"The city could see heat-related deaths reaching 1,200 a year. The increasing occurrences of freezes and thaws (the root of potholes) would cause billions of dollars’ worth of deterioration to building facades, bridges and roads. Termites, never previously able to withstand Chicago’s winters, would start gorging on wooden frames."
Conservatives like Santorum may scoff but the insurance industry is telling cities and states they had better adapt to reality or face ever higher premiums: "The reinsurance giant Swiss Re, for example, has said that if the shore communities of four Gulf Coast states choose not to implement adaptation strategies, they could see annual climate-change related damages jump 65 percent a year to $23 billion by 2030."
Of course, it’s the science that right-wingers dismiss as "junk" that could help save us, not that they want to hear that. Researchers are developing strains of rice and wheat more resistant to heat, drought, flood and rising levels of carbon dioxide.
That takes cash, another notion to which conservatives are especially adverse. Over the last five years, the Bill and Melinda Gates Foundation has spent $1.7 billion to feed the world but private philanthropy isn’t enough.
A year ago, the State Department and the US Agency for International Development began Feed the Future, a global hunger and food security initiative to boost agriculture in 20 desperately poor countries. President Obama has pledged $3.5 billion; so far, Congress has come up with a little more than half of it.
We live on a planet where, New York Times reporter Justin Gillis wrote, "Little new land is available for farming, where water supplies are tightening, where the temperature is rising, where the weather has become erratic and where the food system is already showing serious signs of instability." But last month, the House appropriations subcommittee on agriculture, headed by Georgia Republican Jack "I Came from God, Not from a Monkey" Kingston, cut Feed the Future’s budget by thirty percent. How do you like them apples?
  • Michael Winship is senior writing fellow at Demos, former senior writer at "Bill Moyers Journal" on PBS and current president of the Writers Guild of America, East More: Michael Winship