UNdoing The World's Business

The United States is the center of the diplomatic world. That's been the case for quite a while. Woodrow Wilson was instrumental in establishing the League of Nations – even if the United States never joined. And the establishment of the United Nations during World War II was, in large part, based on American initiatives. In 1945 that newly-organized body was formally established when the United Nations Charter was signed in San Francisco, and eventually was headquartered in Turtle Bay on land donated by the Rockefellers. It was a noble endeavor.

There were many reasons for constituting the organization – initially it derived from the formation of an alliance to defeat the Axis powers, but, by the time it was finally established, the war was over. Nonetheless it was believed that a forum where all nations could meet and talk would be preferable to multiple discussions and multiple treaties between nations, and it was felt that problems could be talked out and wars averted. Honorable goals, indeed.

Declarations of rights followed, and agencies were formed in order to deal with particular problems – problems whose solution would benefit us all, but primarily the impoverished, oppressed, and needy around the world. We might approximate Wendell Willkie's goal of One World.

It didn't take long to discover, however, that serious problems existed. Perhaps the most obvious of these was the veto, that allowed certain nations to block decisions of the Security Council – the most important action organ of the UN. The veto, itself, however, made sense on paper. It was clear that when the organization admitted more members – members who may not have aided in the defeat of the Axis – they might outvote the “heavy lifters” who had done the bulk of the fighting and dying during the war, the nations that founded the UN, and those nations might use the UN for their own purposes. Giving the founders, nations large in power but small in numbers, the power to block actions that might involve them in popular whims, more war, or anything else undesirable, was considered a wise action.

The result, however, was that these powerful nations, with different national interests and agendas, used their veto in the service of political aims, and they have done so to the present. Vetoes provide bargaining leverage when that is needed, and the illusion of being in control, although they know that countries that were once their allies could also veto their own favored programs. Perhaps these were unintended consequences, but they should have been anticipated.

What's left, then, is a General Assembly quite capable of righteous indignation and of talking, but a Security Council that can stymie any meaningful action – and almost invariably does. And the result is that the founders have “protected” their interests in the Council, but the other nations have hijacked the General Assembly. (And they've manipulated it – for example, making Israel the scapegoat for all the world's problems while they ignore the wars, genocides, and tyrannies around the world. Their words result largely from antisemitism and economics, but are framed in the jargon of political correctness and liberal ideology. It's Israel now, but could be another nation once Israel is out of the way.)

That is not to say that the UN doesn't have useful projects which, when not used as political tools, help the disadvantaged. There are efforts to improve health and to feed the needy; there are scientific projects and programs that provide aid in time of natural disaster. But when it comes to man-made disasters – actions and situations that might be viewed as suggesting responsibility – the UN is likely to be paralyzed by one or more of its members. And that's the case when conflict benefits one of the founding nations. Nations are more concerned about their own interests than the benefit of the world.

What are our interests? Specifically, how do we benefit from the UN? Has that organization achieved what it aimed at? Unfortunately there are still many wars, and there have been many murderous attacks to which the UN has not responded. The organization may have provided a forum for talk, but it has not prevented war, because war, murder, and even malicious speech are the acts of people – even if only a minority of people – people who have only their own interests at heart. And while they may try to affect the words and actions of the United Nations, they will not be affected by it. Their personal, and to a lesser extent their national, interests are all they care about. And they want the world to care about them too.

Has the UN made other alliances unnecessary? NATO, the EU, Confédération Interalliée des Sous-Officiers de Réserve (CISOR), the Islamic Military Alliance, the Peninsula Shield Force, and numerous other organizations suggest that this is not the case. Many such treaties and alliances exist outside the UN even though they should have been eliminated long ago.

Sad to note, however, the UN failure has not come cheap. The United States is assessed more than all the other founders combined for “peacekeeping” operations. Erin R. Graham , in an opinion essay in yesterday's Washington Post – one attempting to minimize and justify the cost to the US, – notes that “The United States also pays an estimated 28 percent of U.N. Peacekeeping budgets, due to its position as a permanent, veto-bearing member on the Security Council” but omits any mention of the far smaller assessments for the other “veto-bearing member[s].” It is of interest that our country, which supplies a home for the organization, also pays 22 percent of its total annual budget.

And there are costs to New York and to New Yorkers. In addition to the loss of valuable property in mid-town Manhattan, and the taxes that would accrue from it, there is the inconvenience of street closings and traffic congestion during General Assembly sessions. Not to be overlooked is the fat that the diplomats from many countries have immunity to all our laws, and, most annoyingly, are exempt from the parking and other regulations which we must observe.

The UN has failed, and we are all paying a high price for that failure. One solution (and I'll have more to say on the subject next week) is withdrawal from the UN and utilization of the property on which it stands. The billions saved by not supporting its bureaucracy and operations could be used to fund the kinds of health and agriculture projects which have been successful – without a “middle man” to drain off some of what we offer. And the absence of an outside controller would give us a greater ability to act in a timely manner.

Obviously it's not that simple. But the first step is acknowledgment that our hopes for unity and world peace have not been met. Perhaps we'd be better off if we were not at the center of the diplomatic world.

America – Land Of Enchantment

                                                                                                                       

(Another in the series of essays on balancing the budget.)

I recently had a problem with an appliance, so I did what the manual said and called the number for service. It was an “800” number so it didn't cost me anything except my time. Unfortunately the technician on the other end,ⁱ although he spoke English, had a thick accent and communication was a real problem. The tech was in Indiaⁱⁱ and the appliance company had farmed out its service. Outsourcing was far less expensive for them than hiring Americans to do the job. In fact, that procedure is quite common and saves a whole lot of money. And, as you know, in free enterprise, entrepreneurs are always looking for ways to save a buck.ⁱⁱⁱ

If outsourcing makes sense, though, isn't it time the government tried it? I don't mean in any kind of limited way, like printing our postage stamps. I have in mind outsourcing the majority of the US government. Before you dismiss this idea out of hand and make it a source of ridicule, hear me out.

One of the greatest expenses in any business or industry involves the salaried staff who perform the work. Not just their salaries, but their health care, pensions, vacations, sick time, and other fringe benefits. And they need a place to work. Usually it's an office building in an area where many of them live. That's generally an urban center with high rental scales. So that's another part of the cost of the bureaucracy – one we take on each time we establish a new set of regulations and a new bureaucracy to administer them. And, unfortunately, we do that all the time.

The buildings in which they work require maintenance staffs which adds to the expense. As do uniforms, laundry, maintenance materials, guards, and the like. Of course the employees will need conference rooms, cafeterias, toilets, and facilities to park their cars, and these will add to the rental costs.

Some learned economist will suggest that it would save money if the government built and owned the work facilities, however in addition to all of the expenses of renting, apart from the rent itself, the government would take on the cost of land and the various costs of building, including the construction crews and their expenses. And, of course, that includes fringe benefits, as well as what various groups – legitimate and otherwise – manage to skim off the top.

And the land and buildings will have to be removed from the tax roles – another of the costs of hiring people to run the government. But you have to spend money to save money. Of course you don't always save money. The government doesn't really know how to do that. That's a negative perspective though, and it's better to be positive. The government really knows how to spend money. I'm positive of that.

However our concern is saving money. And one way to do that is to outsource much of our government. There's no reason why most of our bureaucracy's charge couldn't be handled by men and women outside of our boundaries – in India, perhaps. For a single price – and with many departments we'd probably get a discount – a large amount of our work could be done without overtime costs or fringe benefits. They may not be perfect for the job – they may not know how to botch our government as well as local bureaucrats – but they'll learn. And we won't need service workers to help those employees, or buildings to house their efforts.

Certain functions would have to be retained, of course,^iv but those will primarily be those that are demanded by the Constitution, like defense^v and taxation. They're not our favorites, but our Founding Fathers gave us the responsibility for handling them.^vi They even wanted us to have governmental officials, like Representatives and Senators, however they had higher hopes for them than we do. In any case, no other country would want them, so we're stuck. I'll have more to say on that issue next week and after that I'll discuss a few other ways to save money and to enhance revenues.^vii

With the government lowering its employment roles there would be a temporary rise in the unemployment roles, but fairly soon wages would go down and private enterprise could afford to hire more workers. With lower wages, people would have to remain in their jobs longer before retiring, increasing American productivity and lowering Social Security payouts. The birth rate would also probably decrease making the cost of health care less.

And with a larger available work force we won't need to outsource as much, which will mean that more Americans will have jobs, pay taxes, and buy consumer goods. We're on our way to a healthier economy already.

[Happy Purim]

Next episode: “Go Tell It On The Mountain” – The rule of law.

i      He said his name was “Roger” but I suspect that that's not the name to which he answers when among friends. I'd guess that it's his nom de phone, imposed on him by the appliance manufacturer in the hope of convincing consumers that the service was local.

ii     Although it's not the focus of the movie, “The Best Exotic Marigold Hotel” gives a glimpse at outsourcing.

iii    That's about 55 rupees.

iv     Delivering the mail in Keokuk would be difficult (but not necessarily impossible – see future postings) by a mail carrier in Mumbai.

v      We have the responsibility for our own defense so the military should be retained. We have, however, used mercenaries before and that possibility shouldn't be off the table.

vi     Many of our other activities were taken on by Congress or the courts because they thought it “right” (or politically expedient). The courts sometimes make up the law to suit their beliefs, even if there is no Constitutional basis for their position. Examples include Lochner v New York and Roe v Wade. Legal scholars question whether either has any basis in the Constitution, irrespective of the decision.

vii    Not just raising taxes, though that's a good start.

Paying The Bills

                                                                                

Percentage of United States budget for Health Care:ⁱ

Other health care costs:

Total cost of your health care:

I'm not a sophisticated economist. No. Change that. I'm not an economist. But my mind wandered a little this morning and I started wondering about health care costs. The presidential election's over now, and with it the rhetoric that usually clouds such issues with the complicated overlays of emotion and politics that make any real understanding difficult at best.

So I have the luxury of considering [selected] numbers without having to factor in such distractions [from the numbers] as guilt, responsibility, and the purpose of society. It's even easier since I've decided not to look up the numbers right now. I'll do that presently – after I've given some thought to the nature of the problem. Only then, when we both have a little more information, can we try to quantify it. I may be surprised and find out that no problem exists, but in the meantime I can give some thought to the way we manage money in our current society.

So let me get to some basic considerations, and they're really considerations of human nature. Because I spent most of my life in medicine (no, not taking, it but working as a physician) I'm focusing on health care. I noticed early on – in fact I noticed as a college student before I became a doctor – that there was a paradox in the cost of scientific glassware. It was both unconscionably expensive, and it was free. It was “free” because someone else was paying for it – usually the government or a granting foundation – but the price was inordinately high because the vendors knew that the people ordering it weren't paying for it themselves. And very often they didn't even need it. I also learned that there was a basic rule that you always spend all of the money given you, or you may get less the following year.

That's the way money management works. An individual may be very careful with his own budget, but will freely disburse what he doesn't see as his own. And he'll spare no effort to increase his intake – as income for himself or as money he can give away or spend on others. There's always an organization or some sucker with deep pockets who can be convinced to pick up the slack.

But that philosophy is one that involves not only people: governmentsⁱⁱ have little hesitation about spending our money on programs that sound good, and we don't care – especially since we don't recognize that in the end we'll wind up paying the tab. More likely our grandchildren or their grandchildren will wind up with the bill. We're paying for the generosity of those who preceded us. We're paying for their guilt and magnanimity, and our descendants will pay for ours. Actually we're only making the interest payments, but sooner or later our creditors will demand that we – really it will be those who follow us – start paying off the principle. That principle is the National Debt, which now amounts to … (I'll look that up later, too). We keep kicking the can down the road, but sooner or later someone will get it and have to open it – and it's a real can of worms. Greece knows that.

The needy, however, are everywhere, not just in our country. And they suffer not only from poverty but from disease and oppression.ⁱⁱⁱ The basic idea, and it is a beautiful one, is that we are all responsible for each other. In the Western tradition, the Bible tells us to help the poor, the widow, and the orphan. “Love thy neighbor.” And I have no doubt that there are similar injunctions in all other cultures. But religious teachings often place limits on the amount that one can give away, and realpolitik governs the extent of involvement we're permitted in the affairs of other countries. We're not always wise to try to care for all of humanity, nor are we always free to do so. We know about the tribulations of those around the world, but we can't afford to deal with all of them. And, many believe, it's not our place to do so.

That, however, is neither here nor there. At least it's not the subject of today's discourse. More to the point is our consideration of the cost of caring for the health of our own citizens. That used to be a family obligation but not any longer. Now it is a duty that has devolved onto society in general, even if we may disagree on what standards we should use to judge it^iv and those who receive it, we all pay for it.^{v vi} We consider it self-evident that those who can better afford it than we should pay more to support the kind of care that all our citizens deserve.^vii

Oh. I finally got around to checking. Health care makes up about 23% of the national budget. Apart what you pay for your own care, $230 of every $1,000 you pay in income taxes goes in that basket.^viii As well as 23% of what you pay in a variety of other taxes you pay – like tariffs for imported items – and the costs incorporated into the prices of whatever you buy. The latter reflect producer's and manufacturer's costs that are simply passed on to the consumer. Congratulations. The bottom line is that you're probably paying not only for your own medical costs but for those of others as well. I trust you feel magnanimous.

By the way, our National debt now is over $16 and a quarter trillion and rising rapidly with each new program. But who cares? There isn't any real problem (for me). It's only money, and soon enough it will be someone else's burden.

Next episode: “Growing Down” – It's a tall order.

i      By the way, the use of health care costs is only an example The same issues and calculations can be considered for all parts of our budget. I won't look up any numbers for you though.

ii     Or, more accurately, our elected representatives who are looking for votes in the next election.

iii    Sickness doesn't stop at the water's edge. Nor does guilt.

iv    We wish to raise our standards, but as more and more individuals become eligible for subsidized care, as payments for that care diminish, as medicine becomes more assembly-line, standards are more likely to diminish.

v      That includes Christian Scientists and others who may oppose the programs in general or some who oppose particular parts for religious reasons (like those who consider abortion to be murder). The First Amendment guarantee of religious freedom does not extend to health care.

vi      The reimbursement for some services can be lowered artificially, but that doesn't actually change the costs of performing or providing those services. If it leads to a lowering of salaries it will drive the best practitioners into other fields, diminishing both the number of providers and their quality. It may be necessary to enlarge the bureaucracy to supervise these services even if that will raise costs. The more people involved in regulating and minimizing the costs, the higher they'll be. But it will provide jobs.

vii    “From each according to his ability to each according to his needs.” It was good enough for Robin Hood and it's good enough for us (even if it's not clear who decides on ability and needs). The redistribution of resources makes a lot of sense in a society that prizes equality. Those who view Marx's words ("Jeder nach seinen Fähigkeiten, jedem nach seinen Bedürfnissen!") as a call for socialism are simply mean-spirited. And those who fear that this kind of redistribution will lessen the initiative of the capable are fear-mongers. We'll all work hard and work long hours to support those who don't.

As for those who contend that actions of this sort are contrary to the ideas of the Founders, they should be aware that the Declaration of Independence and the Constitution are outdated, and we now have the Supreme Court to make the laws.

viii   As you must certainly realize that is the amount expended by the government only. It covers Medicare and costs that cannot be paid by the poor and the disabled. It does not cover your costs to private insurers (I pay for long-term insurance to protect my children), deductibles, and out-of-pocket expenses for medications and the like.