“Laying a business, and dreams, to rest,” The Colorado Springs Business Journal, June 8 - 14, 2012, 19.

BUSINESS BURIALS

Shakespeare famous lines, “I come to bury Caesar, not to praise him,” came to mind as I boarded my flight to New York to celebrate the closing night of Mercat on Bond Street in Manhattan (after 5 years). An authentic Catalan restaurant next to one of the best Italian restaurants in New York and on one of the last cobble-stone streets in the city, Mercat has become a destination point for local and visiting Spaniards.

This where Lionel Messi has been watched on big-screen televisions for the past two years; this is where grandmother’s recipes find admiring customers; this is where celebrities knew they could hide from the paparazzi.

Almost half my age, my partner inspired me to think about the restaurant business not as something I did in the past, but as something I should still be doing. Having sold the Warehouse Restaurant and Gallery in 2007 (after 10 years), I thought I’d never be part of another restaurant ever again.

Not only did I become a partner in Mercat, I helped open a second location in Brooklyn. But as sure as we were that our warehouse conversion was perfectly timed with the gentrification of this Williamsburg neighborhood, we discovered that the Great Recession affected us, too.

Instead of economies of scale, preparing the food in one location and shipping it to the other, we were burdening one successful enterprise with a newly opened laggard. We even changed Mercat Negra (black market) with its Catalan cuisine to Tecalote (owl) which served high-end Mexican food. Within two years a dream was sold to another operator.

In the summer of 2010 a group of investors helped me renovate what became Il Postino. Within six months the Mining Exchange Hotel incorporated it into its overall operations, making it Springs Orleans. Here, too, the menu radically changed to Cajun/Creole and the restaurant is thriving.

Not all burials are the same, and some deserve praise, after all. Financially, there is never a proper compensation for the sweat equity that accompanies the actual money it takes to open the original restaurants. You are lucky to recoup some of your investment.

Emotionally, there is no clarity. You are sad because you failed to fulfill your dream: you had to close or sell it. It’s impossible to sugar-coat the fact that you failed. No matter the reason, you are no longer part of it.

Yet there is some profound pride that your labor is bearing fruits, even if for someone else. Your partners and you are the ones who had the vision, courage, and tenacity to take on massive renovations and open restaurants. And this feeling will never be taken away from you, even if most of the new customers have no idea about the history of the place.

None of these cases warrant the label of resurrection, since their reopening isn’t that profound or divinely inspired. But their resuscitation is still magical and astonishing, reassuring you that your own failure has been turned around.

The sadness of your failure gives way to a deep humility, having realized that someone else can better execute your dream. And perhaps this is what the business world is all about: measuring your success or failure against others.

As long as your ego isn’t entangled in this process, you can withstand public scrutiny. Your customers have a sense of “ownership,” and vote with their wallets. New York restaurants (numbering 4,500) are radically different from those in Colorado Springs (numbering 750). In NYC fierce competition and messy licensing processes are daunting; in CS, “Fast Food Nation” reigns supreme.

The harsh realities of different marketplaces ensure a level of transparency and honesty. You can tell whatever tales you want, but at the end of the day, you either can make it or not. If you can, you stay in the game, if you can’t, cook at home and serve your friends.

The lessons to be learned from the opening and closing of four restaurants are too many to recount here. Some have to do with partnerships and investors, some with banks and landlords; others have to do with permits and contractors, and still others with health and liquor licensing boards; and finally, many have to do with employees and customers.

Unless you think about the team that makes it possible for you to succeed, unless you think about the ambiance you are creating to invite your guests to dine and drink with you, don’t ever open a restaurant. It’s a labor of love, given the anemic profit margins of this industry (5% national average). And love is difficult to sustain when your counterpart is an amalgam of diverse people and their ideas of a perfect meal.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Belief in marketplace,” The Colorado Springs Business Journal, June 1 - 7, 2012, 17.

VIVA CHINA

One of the hallmarks of American capitalism is its faith in the efficiency of the marketplace. This means the setting of prices, the allocation of resources, and the distribution of labor across different industries. Inefficiencies are ruthlessly punished.

But how efficient is it when two companies producing the same product compete for market share? Isn’t there an overall inefficiency? Isn’t there a redundancy? Why waste resources rather than combine the two, ensuring economies of scale and overall cost reduction?

We allow redundancy in military operations: if A doesn’t work, B will, so that soldiers and pilots will not be at harm’s way without proper protection. With sufficient redundancy, safety is assured. It’s a balancing act in the marketplace between safety and efficiency.

The best place to ensure an efficient balancing act where the dynamics of free operations allow for immediate changes and adjustments. No company can survive without paying close attention to whatever market forces—the Invisible Hand—dictate.

Since the marketplace is somehow regulated by political forces, government agencies, Congressional mandates, and Presidential directives, it has been customary to assume that our democracy is up to the task: checks and balances as well as term limits and ongoing election cycles.

Between a dynamic political framework and a dynamic economic marketplace, it would seem that efficiency, productivity, and even creativity would be guaranteed. The balancing act found its home in the best of all worlds: a capitalist democracy.

Yet, a different story emerged when the Conference Board for the Business Council asked 70 CEOs to evaluate the political and economic climate. According to Gillian Tett of the Financial Times, “when this group was asked which global institutions they considered most competent and credible,” they put themselves in first place (90%).

Self-congratulation is a funny thing: you hear it more often than you expect, and it’s hard to argue with the one so earnestly declaring it. Isn’t this true, especially when the average compensation in 2011 for CEOs was $9.6 million (AP)? What can you say? Perhaps retell the story of Narcissus who was lured to a pool to look at his own beauty, and not realizing he was looking at an image of himself, was unable to stop looking at the image and died.

In second place they put central banks (80% of them), a reasonable choice if one considers their bailout plans as guarantors of last resort for failing commercial and investments banks. The CEOs seem to say that they can count on them to stabilize a faltering economy; this also entails counting on the politicians that oversee them.

Relying on central banks and government regulators and politicians who oversee them is akin to asking the Politburo to watch your back. Either you believe in the competitive capitalist powers of the marketplace or you believe in a socialist planned economy. Choosing the latter at your convenience to protect the former is ideologically dishonest.

The most astonishing result of this survey was the third place choice: the Chinese Communist party leadership (64%). The US president garnered a mere 33%, while the US Congress unsurprisingly came in at 5%. The justification was that unlike US politicians who think only about the short-term, the Chinese enact long-terms policies.

This way, the CEOs explained, they know what to expect. Unknown variables cannot be plugged into excel spreadsheets; nor can one plan investment strategies if one has no idea what government policies and regulations will be forthcoming. Risk mitigation is crucial for success; and our own government raises business risks as opposed to the totalitarian Chinese regime that is transparent and predictable (you know what to expect, even if you don’t like it).

So, while we may debate till the cows come home how superior we are in comparison to the Chinese, CEOs of global corporations leave such debates to television pundits and uninformed ideologues. They admire China’s proactive intervention, ensuring that the 2007 crisis was less disastrous than what the US and the EU have experienced to date.

In a bizarre way, corporate leaders admit that government intervention is necessary and welcome: they like rescue plans and coordinated operations; they like to know that they’ll be saved if they drown; they like to play like competitive warriors as long as the battlefield is rigged to ensure their victory.

Maybe they are rich enough to speak truth to power; maybe they can afford to question the presumptions of the capitalist marketplace. Their compensations don’t depend on their ideas or speeches, only on the compensation committee of their boards. And that committee is usually appointed by them—yes, they are all narcissists!

Raphael Sassower is professor of philosophy at UCCS who published Postcapitalism in 2009.  He can be reached at rsassower@gmail.com Previous articles can be found at sassower.blogspot.com

“Perry Sanders and shrewd dealing,” The Colorado Springs Business Journal, May 25 - 31, 2012, 21.

THE MINING EXCHANGE HOTEL

The latest debacle at J.P. Morgan, when $2 billion was lost because of misconceived trades that were supposed to hedge risks, is only the tip of a much bigger iceberg of silly activities that some consider entrepreneur-like; they are not.

Any kind of arbitrage, despite whatever justification made by Wall Street, ends up adding no value to the marketplace. It is defined as “the simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms.”

Wall Street insiders may argue about “market inefficiencies” that ought to be exploited to the fullest. But as long as the very concept of “fair value” is itself under greater scrutiny in light of Facebook’s Initial Public Offering, valuing the company at $100 billion, one must pause with incredulity. Remember the dot.com bubble?

There is nothing courageous about betting against one’s own stock, finding minimal deviations in prices—with the aid of sophisticated computer algorithms—in order to squeeze a daily profit. It’s not even risk-taking, unless you are clueless.

And then there are real entrepreneurs, like my dear friend Perry R. Sanders, Jr. I had a small part to play in this downtown saga, so I know what it took to make this dream come true. It was a labor of love that required a vision; and yes, it was and still is as risky as it gets, but he’s not betting someone else’s money.

Having gotten out of the toxic relationship with Landco , Perry was free from the apartment plans they originally agreed to. For him, a hotel was the best use of an existing building, because of parking concerns for residential units.

Perry’s vision was contagious, and I was swept up by it: Perry’s enthusiasm and rhetorical skills, his salesmanship and conviction, honed for years as one of the most successful trial attorneys in the country, came in handy in this project.

We started small with Il Postino—now Springs Orleans—and were gratified to see immediate positive response from the local community. The “bones” of these structures are so magnificent that they provide an aesthetic experience unlike anything else in this town—they take us back to the days of gold prosperity that endowed our city with great legacies.

When we parted ways as partners, we didn’t part ways as close friends. The rule of thumb in partnerships is that most fall apart because of rancor or personality conflict. This was not our case. I have been asked, since the hotel opened last week, if I have any regrets no longer being part of this success story.

There are three emotions that are wasteful, and definitely have no room in a rational business world: anger, jealousy, and regret. I recommend you train yourself to excise them from your emotional repertoire.

Anger is wasteful because, as Spinoza already noted in the 1600s, it merely expresses your own feelings. It’s not a response to someone else’s actions, because you have no control over them. When you yell or scream, you are simply emoting irrationally and finding an excuse to blame someone else for how you feel. Instead of “anger management” try anger elimination.

Jealousy is wasteful as well because it can’t change anything; no good comes out of eating your heart out trying to “keep up with the Joneses”. You should be happy that your friend succeeds, that you bear witness to this success, and that you were helpful in its achievement. There is plenty of room at the top—it’s not a zero-sum game.

Regret is similar to guilt insofar that it’s about what could or should have happened but didn’t. Unlike guilt which is justified if you willfully hurt someone (acted immorally), regret is victimless (you think you hurt yourself in some ways). Heraclitus said, “you can’t step twice in the same river”—what’s gone is forever gone (“water under the bridge”). It’s more productive to focus on the present. Buddhists call it mindfulness. Westerners call it intentionality.

As an entrepreneur, Perry teaches us to focuses on the tasks at hand and get them done. No obstacle is too large for him to circumvent: from bank loans to design and remodeling. His positive outlook and ready smile, his outpour of friendly chatter and tales from across the country, his love of music and people, all contributed to accomplish his dream of bringing a classy boutique hotel to downtown.

As fortunate recipients of his hard work, we should support his dream and make it our own. And whenever tempted, refuse to waste our emotional capital.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Is college worth it?,” The Colorado Springs Business Journal, May 18 – 24, 2012, 19.

DISTANCE LEARNING

As about 1,300 students will be graduating today from UCCS, the value of higher education remains controversial: is it worth the money?

According to the National Center for Public Policy and Higher Education, “57 percent of the 2,142 Americans surveyed claimed that the nation's higher education system does not offer adequate value in return for increasingly high costs, and 75 percent feel it is unaffordable for the average citizen.”

Graduating students owe about $1 trillion, more than all the mortgages and credit card debt combined. Colorado is ranked 49^th in the nation in per-capita support for higher education. The CU system receives about 5% of its budget from the state.

Tuition is rising annually to accommodate more students—at UCCS enrollment has tripled in the past twenty years—and a dismal labor market awaits them—less than half will be employed including unpaid internships. So, why bother?

According to the Pew Research Center, “the typical adult with a bachelor’s degree (but no further education) will earn $1.42 million over a 40-year career, compared with $770,000 for a typical high school graduate. “ Is the $650,000 difference worth the $18,704 investment at UCCS?

The obvious answer tells only a fraction of the story. Presumably, UCCS graduates would also have forty years of a more fulfilling job, even a career where their contributions are better appreciated. Can you quantify that?

A study from the University of Maryland found that “the rate of breakups within 10 years of marriage dropped by one-third among college-educated women while remaining stable among less-educated women.”

The Alliance for Excellent Education reports that “about 75 percent of America’s state prison inmates, almost 59 percent of federal inmates, and 69 percent of jail inmates did not complete high school.” Outside of high-profile white-collar crime of Wall Street insiders, college-educated citizens are less likely to end in prison.

A study by the University of Wisconsin Population Health Institute suggests that “the relative health of people in more than 3,000 U.S. counties showed that those with more college-educated residents had fewer premature deaths and fewer reports of being in poor or fair health.” Need we continue?

There are many reasons why college education is good for the individual and for the nation as a whole. So, why is there persistence in criticizing college-bound students? What is it about college itself that irks so many?

Congressional wrangling over rate increases for some student loans is useful for political demagoguery but unimportant compared to other changes to Pell Grant qualification, for example. And all of this pales by comparison to European policies of subsidized higher education for their best students.

The issue then isn’t money as such but ideology: who should pay for college education? Should it be a personal investment? Should the state pay for college education? Or should it only guarantee student loans?

Let’s do some math: B-2 “spirit” bomber costs around $2.2 billion. Annual tuition at UCCS is $4,676. If we skipped buying one such bomber, 470,487 students could spend one year there, or 117,621 students could complete their entire 4-year education.

But how can you mix national security with education? In an age of drone-attacks and “smart bombs,” college-educated soldiers are more important than ever before. Our national security will always depend on smart people rather than raw physical strength. Even the Greeks figured this out, ensuring a healthy mind in a healthy warrior’s body.

Instead of thinking about higher education in terms of skill-acquisition or content accumulation, we need to appreciate our ability to think critically, to assess data collections, and to navigate a new era of digital information that may not resemble anything we have known in the past.

This is true not only for computer geeks and nerds whose genius surpasses the average student—they can skip college, but for the rest of us whose curiosity can be challenged at the university—those who slept through their high-school education.

Since no one wants to close K-12 education, we should remember that teachers are college-educated, and therefore the better their education the better the education of their young students. And what about having better-informed citizens?

Even if everyone agrees to keep higher education and subsidize it, the question still remains: can it be done more efficiently? Can’t it all be transmitted via the Internet?

This may be true for content transmission, even skill-acquisition, but what about education? As more studies show our social misbehavior in the virtual reality of social media, such as Facebook, leading in extreme cases to suicide, we need to socialize our youth to read body language and social cues.

Classroom experiences are about brain-storming and interactive critical thinking.  Especially in the Digital Age, we need more of this training rather than less.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Earnings fairness,” The Colorado Springs Business Journal, May 11 – 17, 2012, 19.

FAIRNESS

The latest twist in the checkered career of Dr. McEvoy, the CEO of Memorial Hospital System, is upsetting citizens and in different cities could cost Council President Scott Hente his job. Are we upset about 18 month severance, totaling around $1.15 million? Or, are we upset at the lack of oversight by the appropriate governing boards?

The fact that Dr. McEvoy, whom I lampooned months ago for his scare tactics while the hospital was profitable, overplayed his hand and lost badly, agreeing to a “separation” so that he’s neither resigning nor being fired, is perhaps what justice should look like.

He wanted the hospital to himself, setting it up as a non-profit with a board he’d appoint, a cushy relationship indeed. Along the way he got a pay raise amidst negotiations for the sale of MHS to UCH. What warranted his raise, excellent performance? And Council President Hente, consulting with his right-hand woman, Pro Term Jan Martin, thought nothing of it.

They also didn’t challenge the severance pay until Mayor Bach forced the issue in an open letter to Hente. Convening Council, they agreed to dismiss MHS’ board and appoint their own. Does the Mayor have to wake up Hente and Martin from their political slumber? Are they really that out of touch with public sentiments?

What upsets citizens at the end of the day isn’t how much money anyone makes, but rather morality. We want to know that someone in position of power monitors abuses and ensures fairness in the system.

The New York Times reported that according to Greenlining Institute, Apple—the brainchild of Saint Jobs—paid just $3.3 billion in 2011 on profits of $34.2 billion, making it an effective rate of 9.8%. Forbes’ contributor, Tim Worstall, explains that taxes paid in 2011 are for profits made in 2010 which were only $18 billion, making it an effective rate of 18%.

Worstall is probably correct, and The Washington Post was delighted to correct its northern rival. The issue remains: is it fair for Apple to use its off-shore subsidiaries in order to avoid paying taxes in the US? Isn’t its headquarters in California? Isn’t it enjoying the infrastructure provided here? When copyright issues arise, isn’t Apple happy to appeal to American rule of law?

Isn’t the brain-power that propels companies like Apple nourished on our campuses, courtesy of taxpayers who guarantee student loans and provide needed research and development grants from the National Science Foundation and the National Institute of Health?

The same fairness questions have been raised before by the legendary Warren Buffet who paid taxes totaling 17% percent of his $40 million in taxable income. Romney’s tax rate for 2010 was 14%, while Obama, comparably the poorest, paid 20% on his $789,674 taxable income. Do any of these relate to the 99% of American taxpayers?

The fact that Dr. McEvoy earns much more than the US President’s $400,000 only proves how much more valuable his services must be. If he were in private practice, no one would care. But he works for us, after all.

Perhaps the comparison should be closer to home. On MHS’ website, this Note was posted: “On June 29, Memorial Health System will begin relying on Bonfils Blood Center, a Colorado organization, to collect blood and provide products for our patients. This change means memorial will no longer operate its own blood donor services.”

Richard Titmuss’ The Gift Relationship (1971) suggested that countries where blood is donated rather than bought and sold had no shortages, and the blood in their banks was less contaminated. What does this switch in policy, under the leadership of McEvoy mean? Has he read the book? 

Or is the financial cut implemented to ensure his salary raise and severance pay? Has he cut anything else at MHS to guarantee that he stays within the budget, and thereby doesn’t need his board to get Council approval?

It won’t be a week too early for MHS to be sold to UCH. Get this mess off our hands, because our own watchdogs, City Council, obviously lack the kind of leadership that can handle its fiduciary responsibilities.

How are they doing with CSU? The less you hear about council leadership and CSU, the more you should worry. At least with MHS there are leaks that get to the press and then to the public. CSU, by contrast, is so close-mouthed that no one knows what’s going on, including Council

This is an open plea for Council to probe the depths of CSU and devise a plan for selling it to the highest bidder. CEO Forte won’t care as much, now that he knows he can ask for a raise and get a hefty severance pay—it’s a win-win, no?

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“A tale of two cities,” The Colorado Springs Business Journal, May 4 – 10, 2012, 19.

A TALE OF TWO CITIES

Instead of Charles Dickens’ famous novel about Paris and London during the French Revolution, we are talking about Colorado Springs Utilities and the Pikes Peak Regional Building Department, representing two radically different “cities” or mindsets.

Dickens’ opening paragraph still resonates: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…” Is our city going through “the spring of hope” or “the winter of despair”?

When there is unanimity of public disregard, as is the case with the CEO of CSU (Forte) and its Chairman (Councilman Hente), then no oversight is expected and stonewalling is standard procedure. Perhaps they already concede that CSU will be sold like Memorial, so why bother?

But when there is a difference between the head of RBD (Yankpwski) and its Chair (Brown), when the former responds in person while the latter takes three months to respond by e-mail (after pressure from the other two Commissioners), we can hear quite a bit.

Having taunted RBD’s Commissioners, it’s only fair that a brief summary of their answers should be provided.

Many answers come from the Intergovernmental Agreement that set up RBD in 1966. Once RBD puts it on its website, anyone can read it. It specifies the role of the Commissioners, the composition of their board, and the relationships between the oversight body, the advisory boards, and employment conditions.

Likewise, the organizational charts are in place—they know who does what—but should find their way to the website for public scrutiny.

The budget of $9.5 million (2012) reflects a decrease from $9.8 million (2011) and $11.2 million (2006). Since the budget is entirely composed of fees, and since fees haven’t increased since 2008, staff has been cut from 114 (2008) to 72 (2012).

Other statistical data that may be of interest: in 2011 some 53,000 permits were issued, 63% of them on the website. Around 150,000 inspections were required for these permits with over 80% approved on the first visit; 99% of the inspections are performed the same day they are requested. Pretty impressive!

RBD instituted a call-ahead program where an inspector will call thirty minutes prior to arrival so that the contractor or homeowner can be present. RBD is trying to streamline its operations electronically, from submission to approval, while maintaining a process for appeal with various technical boards. So, why are there still complaints about RBD?

Perhaps the culprits are architects and designers who have been “grand-fathered” when new codes were adopted a few years ago. When developers and owners think they get reliable information about zoning or use-change, they might be mistaken. Better ask RBD officials than rely on some professionals.

It seems that of the three Commissioners, Sharon Brown (Chair), Bernie Herpin (CS Councilman), and Dennis Hisey (County Commissioner), only Hisey takes his oversight job seriously. He recounted in writing his political engagement with state agencies on behalf of RBD.

What is politically at stake here? Why is RBD the “other city” as compared to CSU? While at CSU everyone seems to be asleep, congratulating themselves on lower-than-expected rate hikes for water, for example, RBD is proactive and serious about its mission and responsibilities.

At stake is political leadership that should ensure a climate that is responsive to local needs without shirking public responsibilities, balancing public safety with entrepreneurial efficiency. Developers and remodelers can put pressure on politicians so they perform.

Unlike CSU which raises rates in order to cover an ever-increasing budget—new cars for executives lately?—RBD hasn’t increased fees in four years. Unlike CSU, RBD realizes the impact of the Great Recession and has adjusted its budget.

Unlike CSU, RBD realized that to hustle for new business means spreading its wings outside the region, specializing in school permits and inspections in other counties. Yes, it’s legal; other jurisdictions are puzzled by this competition. This mindset guards against the need to raise fees.

Likewise, some legislation that imposes state electrical and plumbing codes on local jurisdictions ties the hands of RBD’s inspectors. Even when the cases are ridiculous, like requiring a child-proof outlet on the ceiling of garages, the local agency isn’t permitted discretionary application. It has to administer the state code, however bizarre.

Here’s where politics comes into play, and no, it doesn’t require money. Instead, the political leadership of RBD can ask for political help from other local politicians and petition the pro-business Governor who appoints individuals to these state boards so as to allow for greater local maneuvering power.

As long as government agencies hold the power to dictate building codes, the best we can do is direct this power to the local level, where common sense may prevail.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Our drug dilemma,” The Colorado Springs Business Journal, April 27 – May 3, 2012, 15.

LEGALIZING DRUGS

It’s easy to understand why former vice-president Dick Cheney claims that president Obama has been an “unmitigated disaster.” But it’s becoming clear that even his progressive supporters are becoming disenchanted with him.

In the Summit of the Americas in Cartagena, Colombia regional presidents discussed the effects of drug traffic to the US and the failed policies of fighting this losing battle, suggesting the decriminalization of at least marijuana.

Obama flatly ruled out legalizing drugs as a way to combat the illegal trafficking that has ravaged the region. This is the same president who we thought was forward-looking, using digital technologies and the Internet not only to raise funds for his own campaign.

At some point, as Tapscott and Williams report in their MacroWikinomics (2010), his administration created the Citizen’s Briefing Book to field ideas from the public that could inform his policy platform.

What astonished everyone was the fact that when citizens could voice their opinions, and suggest topics for policy change, the highest-ranking idea was to legalize marijuana, an idea nearly twice as popular as repealing the Bush tax cuts on the wealthy!  And this while we were engaged in two wars and struggling through the Great Recession.

What did Obama do? He roundly ignored popular demand to reconsider federal classification of marijuana, so that its decriminalization or outright legalization will not be taken seriously.

When in doubt, ignore the public. Attorney General Holder agreed to limit federal prosecution, and confused states passed their own legislation regarding the medical use of marijuana.

If there was ever an economic common ground between the right and left, between conservatives who want as little as possible government regulations and progressives who want government sanction of social conventions, the case of pot legalization is ripe for harvesting.

If there was ever was a legislative common ground between the old and young, those who need pot for medical use or recreationally as a reminder of the sixties and those who feel the urge to rebel and be cool, the case of legalizing pot should be it.

How many prisoners are incarcerated because of marijuana use? How much does it cost us to deal with these non-violent crimes? Is it turning our inner-cities into safer places?

What if pot were treated like alcohol? What if it were regulated and taxed? Would Latin American drug cartels disappear? Even if not completely, would their business diminish? Could we then divert resources to more productive domestic ends?

All of these questions have been asked for years, but when politicians, like Obama, answer them they shift gears from simple economic analyses to social and moral ones. Why not deal with the economic dimension first, and then worry about social effects?

The hypocrisy of conservative legislators is amazing: inserting government regulation where none should be, making social and moral issues legal ones. Let every family struggle with educating its members on the preference of exercising over smoking, reading over television watching, board-games over Tweeting.

When more Americans support rather than oppose the legalization of marijuana, according to a recent Rassmusen national poll, why does Obama ignore them?

Some estimate that enough taxes will be collected from the sale of marijuana to substantially close the federal deficit. Would you rather increase taxes on all to lower the national deficit rather than impose taxes on marijuana users?

Just as Prohibition failed despite a Constitutional amendment, so the war on drugs has failed. For those arguing about the problems associated with the use of pot, fearing lawlessness and crime, it should be noted that a stoner has the munchies and not much energy to rob.

A couple of months ago, The New York Times reported that the amount of tax collection at the city and state level is becoming more significant in tough economic times. It cited Colorado Springs collecting more than $700,000 in taxes from the medical marijuana industry in 2011. Denver collected $3.4 million last year from sales tax and application and licensing fees, while the state as a whole collected more than $5 million.

Putting all of this in perspective will take time. The Obama administration is giving states mixed messages about its intentions, leaving open the possibility that a crack-down is imminent. Perhaps a strong statement from our local leaders can set the tone of the debate.

Regardless of how much common sense we can expect from Washington, we can be progressive and conservative at once and completely decriminalize marijuana. For those who still worry about its effects, the city is installing cameras downtown: Big Brother will be watching!

Raphael Sassower is professor of philosophy at UCCS who encourages free love and responsible intoxication. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Money and faith,” The Colorado Springs Business Journal, April 20 - 26, 2012, 17.

MONEY AND FAITH

We have heard about Tim Tebow and the merging of faith and sports: is he going too far? Did Jesus really help him win games for the Broncos? What will happen now in New York?

We have heard about the religious views politicians and the merging of faith and politics: should we care if Romney is a Mormon? Should we worry about a Catholic President being beholden to the Pope rather than the Constitution?

But we are not hearing much about faith and business: isn’t the marketplace secular? Do you care if your partner is Mormon or Catholic? What if she’s a Muslim or Jewish?

Morality provides the foundation for the marketplace, from small exchanges to major contracts. When you buy a 500-page packet at OfficeMax, you assume that indeed there are 500 pages inside. Would you waste your time counting them?

Why wouldn’t the company put only 490 pages in each packet and increase its profits by 2%? There is basic trust associated with these kinds of transactions, a moral code we all abide by: the golden rule.

When we follow it, do onto others as you would have them do onto you, we save ourselves the trouble of counting 500 pages. Trust and integrity also mean honesty, consideration, accountability, and transparency, values you find in mission statements that large corporation post on their websites. Moral conduct also equates to efficiency.

But is this trust shared across religious beliefs? Are Mormons as trustworthy as Muslims? What about the Jews who have been maligned for centuries? Is one’s religion a moral indicator of one’s business behavior? Does religion teach these values?

The German sociologist Max Weber had the following observation regarding American salesmanship. He suggested coming to a new town on Saturday, going to church with the locals on Sunday, and then making sales-calls on Monday. Gain their trust through religion before attempting to sell anything.

This advice is still followed in some mega-churches where congregants are encouraged to do business with each other, and frequent each other’s places of business. Is there a necessary connection between worship and moral conduct?

Some argue that because God sees all, even if you get away being immoral in this life, you’ll be punished in the afterlife. For many this idea of heaven and hell keeps them within moral boundaries in the here and now.

What if your faith doesn’t include the idea of an afterlife? Does that mean you necessarily don’t care about morality? Plenty secular businesspeople are moral while being nonbelievers. The marketplace is irreligious. But aren’t our worldly activities an expression of our inner core of beliefs? Isn’t there a direct line between one’s honesty and integrity and one’s conduct in the marketplace?

It’s odd, then, that we demand to know a candidate’s detailed belief system and relation to God—“born again” comes up as a significant statement of faith—when we are willing to ignore it in the marketplace. Do you demand prayer before signing a contract? Do you expect God’s blessing to succeed in business?

What’s going on in the marketplace, as Adam Smith already reminded us centuries ago, is a tacit commitment to moral behavior: we assume everyone is honest, until proven otherwise; it’s a more efficient system than suspecting everyone (and counting 500 sheets of paper).

So, are we moral in the name of efficiency? Is efficiency as powerful as the watchful eye of the Impartial Spectator to keep you honest in the marketplace? Perhaps it’s also common sense: you are bound to encounter the same people over and over again; they’ll remember if you cheated them in the past.

So, efficiency plus memory equals moral behavior in the marketplace. Add to it cost and convenience—do you want to do a background check on everyone?—and you are getting closer to the recipe for marketplace morality. Is religion then necessary?

If by religion we mean moral sentiments, then religion in general and religious mandates and institutions in particular are helpful. But when religion divides, it may interfere in the marketplace.

I recall growing up in Israel when our family business had close to half of its clients Palestinians from the West Bank and Gaza. The Intifada was a financial nuisance, not a political matter. Christian, Jewish, or Muslim, all they wanted was to make a living and support their families—hostilities ruin the marketplace, they all admitted.

We all count on the marketplace to even the odds—when it isn’t manipulated by Wall Street—among moral businesspeople who are trying to prosper under conditions of personal liberty and equal opportunity.

One’s faith is a private matter we can neither buy nor sell. Let’s keep it then out of the marketplace!

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“On the beauty of paying taxes,” The Colorado Springs Business Journal, April 13 -19, 2012, 21.

ON THE BEAUTY OF TAXES

Many years ago, when my sister and brother-in-law opened their training and consulting firm, I asked her what was their goal. “I hope to pay more than $1 million in taxes,” she answered. I thought it was the oddest answer. If the only things we can be sure of are taxes and death, why welcome either? It took me some years to appreciate the wisdom of her answer.

Why do we hate paying taxes so much? There are three main lines of arguments used by militant groups, such as the Tea Party or American for Tax Reform, and other, run-of-the-mill libertarians, to answer this question.

The first, principled, suggests that it’s a question of justice: I deserve to retain what I earn. Any tax whatsoever infringes on my individual rights. The government is taking away something I own.

Though there are Constitutional provisions to raise funds for government needs, such as wars, a uniform personal tax is a much later addition the reasonableness of which remains questionable. Those making this argument also refer to the 16^th Amendment (1913), and suggest that not all states ratified it.

A variant of this argument is aimed at inheritance tax, for example, as an outright theft: I already paid once income tax, why must my heirs pay again for the same earnings when I die?

Nine states have no income tax—illustrating that income tax isn’t necessary to run a state—but charge fees for particular services and have sales taxes.

The second, functional, set of arguments uses a different logical line: federal and state governments are wasteful; if taxes were reduced, they would necessarily have to shrink in size: when starved (no taxes), they will die (a natural death).

The third, applied, set of arguments concedes that taxes are needed for some public goods and services, but wonder what the simplest and fairest system of taxation would be. Progressive taxation—the system we currently have, where the rich pay more proportionately on additional increments of their income—is contrasted with a flat tax system—where everyone pays the same percentage, say 10%, of their income regardless of how much money they make.

No matter which set of arguments appeals to you, think about the social contract: are you getting more benefits out of paying taxes? What if you paid none? What services can you do without?

Should only use-taxes be paid, as Milton Friedman suggested decades ago? If you use the road, pay toll; if you go into a park, pay a fee; if you call the fire department, pay a protection fee. Perhaps this is what the Mafia understood all along, personalizing protection fees, and providing safety nets only for its members.

The focus on reducing government expenditures is always warranted, unless we want to go to wars. Will government agencies necessarily become more efficient if their funding declined? From Reagan to Obama, with or without tax breaks, Republican and Democratic administrations alike have routinely failed to shrink the government payroll: about 22 million currently work for the government (about 16% of the total workforce).

The US Postal Service—a federal agency, lest you forget—is trying to reduce its deficit of $14 billion by $3 billion, focusing on closing facilities and not replacing retirees. But as a federally-mandated public service, it has less flexibility than FedEx or UPS.

Will its size shrink? Will service be compromised? What if it were eliminated? Who’d suffer? Should we care about the few rural residents when the many urban dwellers have alternative options?  

Instead of focusing on taxes as the root of all evil, let’s focus on government waste, locally and all the way to the federal level: when you see waste, call your representatives, write them an e-mail, or suggest alternatives.

Think about what services you can do without: garbage collection, potholes repair, clean air, parks? What are you willing to pay for individually and take away from government control: sidewalks, street lights, health care, food inspection, burglary alarm?

There are those whose defiance of the social contract is more extreme. They belong to the underground economy or black market. Their unreported income is estimated at around $2 trillion annually with an effect of tax revenue loss of about $500 billion, representing about 10% of GDP (of course in other countries, such as Greece and Italy, it accounts for as much as a third of GDP). Would you like to join their ranks?

While you ponder this question, I’ll stay in the social contract, pay taxes and enjoy government services. I still dream of paying $1 million in taxes, consulting the best tax lawyers in town. Would you mind joining my dream?

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“On style and substance,” The Colorado Springs Business Journal, April 6 -12, 2012, 21.

ON STYLE AND SUBSTANCE

When logic was formalized in ancient Greece, it separated arguments from those who made them. Arguments should be tested as valid or not on their own merit, rather than on the credibility of those making them. At times, we forget this simple principle.

The legal system doesn’t help, either. In case after case, lawyers and juries assess the guilt or innocence of defendants not only in terms of the facts, but also on their moral character or that of witnesses. What does good moral character have to do with the fact that someone committed a crime? Does it matter how the defendant dresses to court?

Businesses interview job applicants looking at how they dress, how they handle themselves, as much as they care about their resumes. Should it matter that an employee is unpleasant, even deficient when it comes to hygiene, when assessing job performance?

Perhaps the best way of thinking about this is the famous phrase “all sizzle no steak” as a way to enforce in the marketing world that style always trumps substance: we are drawn by the ad and are disappointed by the product.

It’s with this in mind that we keep on hearing complaints about the style of Mayor Bach which offends some Councilmembers. Are they listening to what he says? Or are they more concerned with how he says it? Would they rather have a friendly, smooth-talking snake-oil salesman than an executive who gets things done?

Not only is the focus on style misplaced, it gives at times cover for substance not to be examined at all. Local church leaders, from the mega-churches in the north of town to small, local ones in the south, are preachers and social workers, ministering to their congregants in finely styled soliloquies. But what are they doing in the public square?

Churches receive numerous local and federal tax benefits, because there is a deep sense of respect for their religious role in the social contract. Would it be style or substance if we ask each of the churches in town to adopt a park in town and take care of it because of shortfalls in city budgets? Is it style or substance when some of them speak out in the public square about poverty and hunger, child abuse and indigent health care? Catholic charities run Marion House downtown—style or substance?

The religious style, just like that of public officials, may be important in retaining civility, ensuring we interact peacefully in the public square. But focusing on style alone may miss the opportunity to have candid and heart-wrenching dialogues about the things that matter most to the good life in our city.

I hear colleagues and acquaintances insist that “he is a good guy” or “she is really nice.” These statements might be true, but they still tell me nothing about their competence and substance: Are we paying them to be nice or to get a job done? I’d readily give up bed-side manners for the competence of a surgeon anytime.

There are businesses, especially hospitality, where style seems more important than substance. Waiters are supposed to be nice and friendly, smile and remain cheerful no matter how rude the customer. But wouldn’t you rather have a waitperson bring you the right dish or drink without a smile than a smiling waitperson screw it up?

Is it a matter of style when the charming, grandfatherly Chuck Murphy, the chairman of the downtown taskforce, and the likeable Steve Cox, the new economic tsar, promote the idea of downtown surveillance camera? Is the substance the police statistics about reducing crime?

Or is the substance different: what is the root of the problem? Is it three Tejon Street clubs where fighting is rampant? So, why not deal with them, rather than suggest turning downtown into a prison-yard with surveillance cameras? Are cameras now stylish?

Is it style or substance when Scott Hente, the Council President, shirks his oversight responsibilities as chairman of CSU or board member of URA?

Is it style or substance when his second in command, Councilwoman Jan Martin, works behind closed doors to appoint her loyalists to task forces?

Is it style or substance when Councilman Bernie Herpin refuses to deal with RBD publicly as its commissioner?

Is it style of substance when Councilman Tim Leigh doesn’t filter his public statements?

The more you think about it, the more you’d agree that we want the steak and care less about the sizzle, that we want to respect our public officials rather than like them as  people. As Easter is upon us, taking stock of the deeper lesson of renewal may resonate with our political leaders: resurrect the core of what should be done without losing your civility with each other.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com