Ca. 2010…The US economy in a shambles.

There is an unquestioned assumption that the solution is complex and expensive. In reality what is most complex and expensive is preserving the status quo. This is what the status quo wants, which is why those with power and privilege are fighting tooth and nail against any new order. The genesis of our problems is not found in structural economics. The real genesis of all this is the death of honesty and accountability in society. The death of integrity.

We keep judging the effectiveness of the latest government intervention by how the markets respond, forgetting that the people in the market trenches may not be as smart as the strategizers and if they are, they are most likely judging the intervention on whether it will restore what they know. Wall Street isn’t “not responding” to efforts at intervention because it lacks faith that the intervention will work. Wall Street is not responding, because the financial industry correctly feels that “the jig is up”. They don’t want to change the system, and they’ll be damned if they’re going to respond positively to any attempt to regulate the orgy to which they’ve become accustomed.

That orgy is defined by the mantra from the movie “Wall Street” that “Greed is Good”. Everyone on “The Street” may not be making millions in obscene bonuses by looting their own companies and in turn the clients they serve…..but even those who aren’t too often aspire to. Because of this, they are happy to accept the inaccurate assumption that we can fix this with an incrementally tweaked version of “business as usual”.

Well, you know what? Greed isn’t good. Good business management isn’t about getting an MBA to learn how best to prop up your business for the short term and then loot it on its way down the drain. Good business management isn’t about doing anything you can get away with to maximize profits “for the good of our shareholders”.

Good business management is about being a good steward. It is about growing a strong company and strong industries within the context of what is good for your workers, your clients, your shareholders, and the economic ecosystem within which you live. CEO’s used to have a stewardship ethic. Now, too many see themselves as rock stars who deserve 21 million dollar offices and private plane rides to everything from ski lodges to bailout hearings. We have lost that sense of stewardship, and we need it back. The old system is broken and we shouldn’t want it back. The only people who do are those who had the advantage in that system, those who lack the vision to move ahead not only into new markets but also into old values.

We have fallen into a snake hole wherein what is right is defined by what you can get away with. Financial people skimming clients and companies. Ponzi schemes. Bonuses and luxury junkets on taxpayer money. Athletes making more in 10 minutes than teachers make in a year, while they too often set examples that destroy the efforts of those teachers. I am an eye surgeon. Too often, I see patients from other practices with healthy eyes that have had unnecessary surgery because “who’s gonna find out?”. I see doctors who withhold accepted therapies in order to sell patients into drug company marketing projects disguised as “studies”. This is not addressed as it should be because, frankly, the drug companies have infiltrated the medical industry and government so thoroughly that even those who would fight too often throw up their hands in frustration, or hopelessness, or fear. The phenomenon portrayed in the movie “The Insider” is very real.

Well, you know what? There is a right and a wrong in most things. CS Lewis wryly argued that we can all agree on the “right” as that thing which most of us fight against doing. I would argue that we can get pretty close to doing right by remaining accountable to the values that define our roles, our own “stories”. Our stories are defined by what we are: doctors in service of our patients, lawyers in service of the law, business people in service to clients, politicians in service to constituents rather than lobbyists. Anyone in service to another. Not that you can’t benefit in the process. We all deserve to make a living, but when you’re primarily out for “number one” at the expense of another, that’s a red flag.

We can get back on track, but it’s not by throwing trillions at the status quo. The stimulus is valid to the extent that it helps people victimized by others’ greed or helps people build new productivity, such as green energy, but make no mistake: The reason the financial sector doesn’t like the new order is that it challenges the old order. When “they” say it won’t work, what they mean is that it won’t get them back to where they can make billions on the backs of the common man. The shakers and movers who got us into this mess, who until the crash were so admired by their minions, have become accustomed to the era of mutual funds and online trading that has allowed the individual investor to become the “easy money” for these pros at the Wall Street Casino.

The way back will depend on a return to honesty and integrity. It will require a return to accountability and stewardship. Given the degree of corruption we have come to, it will require a return to regulation. This does not mean socialism. Socialism deteriorates to arbitrary governmental control of society that is just as self-serving and corrupt as unprincipled and unregulated corporate self-interest. Regulation is simply the act of codifying the values that we can all agree protect us as individuals and as a fair and free society, and then holding our institutions and each other accountable to those values.

Getting back can be at least partially self-funding. There is enough fraud built into the system now to get a good start on funding the new order. We have pumped billions into the banking system only to see hoarding and 18 billion in year-end bonuses. We need to pass legislation requiring these institutions to pass on money to qualified borrowers. Lending to no one on the pretense that the lenders are “just being careful” is a self serving copout. Legislate them. Mr. Obama’s foreclosure protection plan has merit, but proposing 75 billion to prop up predatory subprime mortgages misses the point. Simply recast all of the troubled mortgages to 40 year terms with interest rates capped at 7 %. A 100,000 loan at 9% and 15 years costs $1014.00 per month. At 7% and 40 years this decreases to $621.00. Almost all mortgage payers would once again be solvent, lenders would be hurt but not killed, and once the crisis was under control, we could always look at recasting again to shorter terms.

And health care? Health care is ruined at many levels but there is low hanging fruit that could get us back on track. Reinventing healthcare from the ground up at this point would be prohibitively complex, but there are things we could do that would at least get us solvent and back to a fixable mess. There are 50 million uninsured Americans. Individual HMO coverage costs around $3600.00 per year. That would be 180 billion per year to give every uninsured person basic coverage not even considering that family coverage rates offer significant savings. A huge amount, but “chump change” compared to bailing out AIG alone. There is enough fraud in the pharmaceutical industry alone to pay for almost all of that bill. This has been extensively documented in scholarly and well researched books such as “The Truth about the Drug Companies”, “On the Take”, “Hooked”, and many others. There are additional savings in liability reform and reigning in defensive medicine. Embracing true evidence based medicine would help, but what we have now is the bastard child of EBM, where the “evidence” upon which doctors are supposed to make decisions is often defined by the marketing departments of the drug companies who fund much of the research.

Another costly source of waste is that we simply don’t use the things we already know. In many cases we actively suppress known inexpensive therapies in favor of equivalent or inferior but new and more profitable ones. Pharmaceutical and device companies defend their exorbitant pricing as necessary to fund ever more research to replace therapies as their patents expire. Consider the development of Nexium when Prilosec went generic. Now consider that Nexium and Prilosec are the same molecule. Nexium is just the isomeric form of the molecule, enough of a difference to renew the patent and quadruple the price. Another example is the comparative study of the newest and most expensive blood pressure meds, a study in which good old thiazide came in first at pennies a dose. Then there is the eye drug Lucentis, the ultimate me-too drug in that the “me” version, Avastin, is actively suppressed because it was already approved in much higher doses for cancer and was therefore priced too cheaply to make money in ophthalmology.

The truth is that if we simply worked to fully utilize and keep proven treatments, we would do better at a small fraction of the cost.

Much of this corruption is made possible by the same kind of deregulation that has brought the financial system to ruin. If the government was willing to declare independence from pharmaceutical industry purse strings, we could easily re-establish regulations that would rein in the fraud, remove the entanglements between this industry and doctors, again protect patients from predatory and dishonest marketing, and in the process, we could pay for universal healthcare without reinventing a 2 trillion dollar industry. At that point, we could reinvestigate further reforms. The task would then look more doable.

I had voted Republican much of my life, until Mr. Bush and the neo-cons highjacked the party in the service of their own hegemony and self interest. Historically, the Republicans have been the party of individual responsibility and accountability. The past eight years has seen its conversion to the party of deregulation and wanton self interest. I believe in Mr. Obama as a post-partisan, which I know some would see as naïve. Time will tell, but it is also naïve not to see that with Democratic majorities in both houses, the Republicans have decided that they can oppose things that they know must pass simply so they can point fingers if something doesn’t work. It is politically pragmatic but also cowardly to play this game with the country’s future. Part of the integrity we need back is for politicians to consider that the country is where we all live and not a chess board upon which to play games of partisan brinksmanship. It is time for all of us to be post-partisan and take issues for what they are instead of being arbitrarily packaged and traded in endless quid pro quos.

We need to get back to the best traditions of America, to live with integrity, and honesty, and accountability to our values and to each other. Our leaders need to be stewards and models, because it is right to be so. We need to have values that respect each other. We need to be a bit less fancy and less obsessed with the big score. We need to rediscover a sense of conscience, and of shame. We need to get back to fundamentals. The way forward to a self-sustaining future is to go back to the values and self-control that made us great in the first place.