OP-ED | The Search for Sustainability
Financially inefficient markets are not sustainable. They crash.
In 1929, stock brokers asked people without money to pay for stocks with no worth. The stock market was wildly inefficient because at the core there was no value.
The Great Recession of 2008 occurred because the real estate market did not have the value we perceived. Individuals and entities the world over were invested in our illusion. Securities were sold and “backed” by the promise of those who could not pay. The check was in the mail.
There is a similar crisis unfolding in the funding of public services. The manner in which we fund our public functions is often labeled “unsustainable.” The revenue base decreases as the need we address increases. Despite this gradual realization — one I certainly do not own — thinking different in the big ways necessary does not seem to be an endeavor we embrace with urgency.
If the manner in which we deliver public services crashes, the human results will be devastating. Our public investments are purported to improve our society and living conditions. If these are proven to be an illusion, look out for education, the quality of our workforce, economic mobility, and true public safety for all. If these do not exist, what do we have?
As taxpayers and voters, we should insist on true value in the huge local, state and federal investments we make in the American people. These investments represent more than 40 percent of our economy. Population results make clear that our investments are not accomplishing what we desire. The insistence on honestly evaluating the impact of public investments can result in financial efficiencies and positive population results. Credibility and efficiency in our public funding systems will make us stronger in every way.
The nurturing and development of trends to evaluate the impact of public investments are crucial for an informed democracy. The heavy lifting falls on the electorate. It will not happen in Washington or any of our state capitols. The political process is about advocacy and disbursement of funds along historical funding lines. Meaningful self-evaluation is against the interest of those who disburse or receive funds. It is human nature.
True analysis is needed everywhere. After 35 years of secrecy, we review Medicare data kept private by the AMA. One Florida ophthalmologist is paid $21 million in taxpayer dollars in one year. Crime is at a 50-year low, except in the areas where we spend the most taxpayer money on arrest, incarceration, and subsequent social services. We are in the process of winding down 10 years of war. Did we get what we paid for? Lots of red and blue people don’t want us to look. It is human nature to be about the green.
Both political parties promote financial inefficiencies. One side wants big government, one side wants unregulated healthcare. These strange bedfellows created a structure that results in healthcare costs pushing out investments in everything else. As the Supreme Court once again confirms that money is speech, it is incumbent upon taxpayers to seek honest answers about results. You have paid for this right.
Most importantly, the ability to talk about whether we have achieved the results we all care about will start a conversation, not a fight. The political debate is so contentious today that many red and blue people are saying “Forget it. I don’t want any money spent on anything.” The discourse will continue to radicalize without an honest and nonpartisan evaluation of what happens when we spend public funds.
It is the mission of the private sector to create “perceptions of value.” Who cares if the guy down the street spends twice what you do on a foreign car always in the shop, while the odometer on your car passes 200K? Vineyards pour the same wine into bottles with 2 different labels and the more expensive one sells better. Good for them. No one is hurt.
The public sector is not the private sector. If a dwindling supply of public money funds expensive labels, we are in danger. Funding a system that creates more need is not sustainable.
The problem is big and so too will be the solutions. The fixes are not conducive to election cycles. Many pathways have led us here and many will lead us out. However, the search for real value requires looking. The blind belief that a function is served because it is funded is an illusion that will lead to a crash.
Brian O’Shaughnessy of New Haven is a principal in the firm Community Impact Strategies Ltd.