Monthly Archives: June 2011
On Barriers to Entry: Radio Essay for June 25, 2011
Perhaps you have heard of the term, “barriers to entry.” In economics, it refers to obstacles that make it difficult for another to enter a given market. It could take the form of regulation or economies of scale or global reach. This gives existing firms in a market a decided advantage. At a personal level, it may require special licensing or certification to undertake a given endeavor. Imagine if the government required everyone who shoveled snow for money to undertake a back ergonomics course to protect them from back strain. Few children would be able to shovel out their neighbor’s driveway for a couple of bucks on a snowy day.
Barriers to entry tend to protect incumbents and keep competitors from gaining a foothold. If one can yield some political influence, these barriers can become impenetrable. Free markets become distorted as fewer and fewer firms can compete: oligopolies become duopolies become monopolies.
Picture for a moment our present political scene here in Massachusetts. Did you know that there are 24 political parties registered with the Secretary of State? Sounds like we have a lot of choice, right? Can you name more than 5 parties? Well, there’s Republican and Democrat: that’s two. Independent: no, that’s a state of mind, not a party. Green-Rainbow: they ran an auditor candidate, didn’t they? That’s three. Conservative: four. Liberal: What do you mean there is no liberal party in Massachusetts? Don’t need one, I guess.
Twenty four parties constitute wide choice, perhaps too much choice. Four makes it an oligopoly. At the Federal level, we shrink immediately to a duopoly: the Republicans and the Democrats. Third parties just muck up the mathematics. Without H. Ross Perot, George Herbert Walker Bush likely defeats William Jefferson Clinton and Monica Samille Lewinsky remains an anonymous college graduate with a psychology degree rather than at the center of the impeachment of a President.
So, it’s two parties for the near future. At least that is what the incumbent powers wish you to believe. Remember “barriers to entry?” Picture this. The average Congressional candidate spent $1.6 million in the last election cycle; Senators running for reelection spent $9.1 million. Additionally, elected officials traditionally campaign while serving in their current office! Incumbents have built a levee around their rank and privilege that keeps would be challengers largely at bay. Imagine trying to raise $1.6 million in two years to really fight to win a campaign. That’s $15,000 each and every week, $50 or $100 at a time, with an occasional big donor. It requires special interest vetting or even pandering to pick up a few thousand more. It requires a machine and 100% of a candidate’s time and energy. Frankly, it requires an incumbent in some government position whose electorate is content with part time constituent service.
In short, the duopoly of the three major parties has created a situation that solidifies their situations in quick setting cement. Make it past your first or second election and the barrier to entry is too steep to breach. Play your cards right and you can parlay one job into your next without regard to serving your constituents with any real personal effort. And if it doesn’t work out, you have your existing job to return to.
If the intention of our founders is to be honored in elections to come, the way we view the present duopoly must change. We need another party to offset the excesses of the duopoly without empowering either too greatly. It is less about “finding a middle ground” argument than one of pure reason. There no longer is meaningful choice. Washington is locked into an ideological struggle for power that comes at the expense of the working people of this great country. We are asked to vote for hope and change at every turn from each party but what we get is status quo.
The third party is coming. It may complement the other two or it may supplant one but its’ time is coming and it is urgent that it comes. I know of only one major movement in this country that has the determination to meaningfully work towards this end and that is the Tea Party. Not the Tea Party of the media but the Tea Party of the people: people who have had enough already of the waste, the taxes, the inequity, the deceit and the decline; people who are actively concerned about the fall; people who are ready to rise up again and again for however long it takes to return the promise of America back to all Americans, not just the political class in Washington.
Filed under Essay
On New Frontiers
I met an American Idol this week. Actually, he is more of an American Icon: Gene Kranz. He was the Flight Director during the golden age of American space exploration that included all of the Mercury, Gemini and Apollo missions. He led the flight control team for the first lunar mission when Neil Armstrong landed with just 17 seconds of fuel to spare. And it was he who heard the famous words uttered by Jim Lovell, Mission Commander of the ill-fated Apollo 13: Houston, we have a problem. And it was he whose determined leadership and team spirit provided the ultimate response: Failure is not an option.
Mr. Kranz and I shared breakfast together and talked like two old pilots are wont to do, using our hands as much as our mouths. We swapped stories. His were far more interesting than mine. There is no mission more interesting to debrief than Apollo 13. His story was succinct and captivating. If you are of my age, you probably remember it well from memory or from the movie of the same name so I won’t go into detail here.
What I want to talk about are his comments regarding spaceflight, our national will and our tolerance for risk and reward. Let me start by reading the wonderful inscription that Gene Kranz wrote for me in his book.
“Inspired by a brash, young and articulate President, we rose to the challenge and won the war for space.”
That brash, young and articulate President was John F. Kennedy. He said,
“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.”
That war was fought by engineers who averaged 26 years of age; using a hundred “computers,” real people with slide rules and graph paper instead a laptop; designers who invented new alloys and developed new metallurgy to carry man into space; and intrepid explorers who all risked their lives and some who lost theirs in an effort to fulfill the destiny of mankind to seek new frontiers, this one in space.
President Kennedy committed us to meet not only the challenge of space but the “other things,” too. They were different times back in 1962. We were in Cold War with the Soviet Union; we were at the precipice of expanding the war in Vietnam; the Cuban Missile Crisis was just in front of us; and we had successfully led the planet from the rubble of a World War. We had the best and we had the brightest talent in the world upon whose shoulders we could support an entire nation and lead an entire world. There was a lot on our plate.
We met great challenges with the courage and confidence that springs from a determined national leadership, a strong national identity and a frontier spirit. Each challenge is measured in terms of risk versus reward. America was a risk taker and a reaper of great rewards.
I told Mr. Kranz that I became a Navy pilot in hopes of becoming an astronaut. He wondered aloud, “what will we become if our children can’t dream of being an astronaut?”
What has become of us? We are no longer risk takers. We have traded our frontier spirit for the living room couch. We shield our children from competition: no dodge ball; no tag; no losers. The richest among us no longer create things of value. The poorest among us no longer have to work.
In the absence of a manned space program, we are shutting down large chunks of our space infrastructure. We are discarding thousands of engineers and interrupting the steady stream of knowledge and experience that we toiled so long and hard to earn. We are abrogating the highest of high technology to other countries whose own sense of national identity calls for bold and brash leadership. We beat the Russians to the moon and now we hitch a ride into space from them.
These times call for brash leadership in America. If we are ever to reemerge as the preeminent power on this planet and resume our leadership of the free world, then we must stake our claim on new frontiers and new challenges that inspire a generation to work hard and to engage our very best talent in its successful pursuit. Lofty goals and high ambition must be met with the sweat of our brow with our shoulders to the wheel. America’s destiny has always been to lead.
Gene Kranz is no longer the brash, young and articulate man of 30-something who led mission control during its’ finest hour. But age has not diminished his message that bold leadership and accountability mitigate risk and leads to ultimate reward.
Are you listening Mr. President? America, we have a problem and failure is not an option.
Filed under Essay, Uncategorized