A Necessary Challenge...

Historically, America’s economic strength has largely been dependent on the quality and accessibility of the education system particularly at the college and graduate levels.  Excellence here has been the fuel for America’s global growth.

But, increasingly, over the past decade plus there has been a most troubling cost growth with tuition growing faster than inflation and student loan debts exploding.  Today, the total loan debts exceed $1 trillion with some 15 percent of that expected to go into default leaving another huge debt burden on the taxpayer.  Further, these sharp rises in tuition have all but eliminated the possibility of a student working his way through college and, thereby, jeopardizing another vital part of the American Dream.

Today a student working at minimum pay rates would have to work some 61 hours per week in order to cover University of Minnesota costs.  In 1970, that figure was 24 hours.  Further, the average student now graduates with a debt load of nearly $30,000.  Assume a couple marries, the combined debt load is $60,000 and this does not include any graduate school costs.  But what it does do is severely hamper the ability of that couple to purchase a home and it also influences the type of employment they seek. Economics compels them to make choices related more to earning power than toward service-oriented opportunities including teaching

For instance, in medicine the debt load is approximately $150,000 and this clearly is impacting career choices with specialties gaining and the area of general practice in decline.

As a result of these changes, our economy will be hurt from fewer housing starts to attracting teachers and doctors.  These rising costs will also prevent many talented individuals from seeking advanced degrees particularly in areas vital to our economic growth.  For instance, a recent Price-Waterhouse report noted that the United States is losing its “innovative edge” in medical technology to countries like China and Brazil

That is a trend we cannot allow to continue.

Over the past several months, there have been troubling stories published in the Star Tribune, Washington Post, and Wall Street Journal relative to the University of Minnesota’s administrative bloat and excessive compensation costs.  And contrary to the efforts by administrators to brush aside the importance of these rising costs, it is of vital importance that we deal with them and prevent further harm.

Personally, I had always thought of the role of academic administration to be one of fostering an environment of excellence and success for the teaching and research pursuits that constitute the mission of a university.  In so many ways they defined the public service value in higher education.

Sadly, higher education leaders have created a financial model that focuses on their importance and it is spiraling out of control   And it is this spiraling that is increasingly creating media criticism and is being identified as a cause for the sharp increases in tuition.

For instance, when I came into the Governor’s office in 1991, the President of the University made approximately $152,000 while I made $112,000 – a gap of some $40,000.  Today, the Governor makes $120,000 and the University President, $610,000 – a gap of $490,000.

This mirrors the overall explosion of administrative salaries.  As an example, the lead attorney for the University makes $295,000 or $95,000 more than the Attorney General of the United States, and over $180,000 more than the Minnesota Attorney General and some $78,000 more than the Chief Justice of the United States Supreme Court.

The University President’s Chief of Staff earns a salary commensurate with the United States Secretary of State while the University lobbyist who pleads the University’s case at the State Capitol earns some $60,000 more than the Governor.

Joel Maturi, a fundraiser and part-time teacher makes $468,000 while the President of the United States earns $400,000.

This comparison with federal and state government officials with comparable responsibilities could go on ad infinitum.

Overall, the Wall Street Journal and Washington Post found some 17 administrators making over $300,000 per year  - well more than the Vice President of the United States and some 81 earning over $200,000 per year or more than any cabinet-level secretary.

As if this is not sufficient cause for alarm, the retirement packages have been attracting attention.

First of all, the University has a rich pension formula for its higher-level employees including administrators. Prior to January 2012, the required employee contribution rate was 2.5 percent of salary with the University contributing 13 percent.  Most public employee systems require a more even split between employer and employee.  In January 2012, a new formula went into effect with employees contributing 5.5 percent while the University puts in 10 percent – still a most generous plan.

Interestingly, the University is far less generous to its civil service employees.  They are part of the Minnesota State Retirement System and contribute 5 percent of their salaries with the University putting in another 5 percent.  Simply put, the top echelons of administrators have a substantially richer pension reward system than the average employee.

On top of this, the Star Tribune has published the enormous costs of some retirement packages.

At the height of the deep recession from 2007-2012 when the middle class was losing some 40 percent of its total net worth and students were buckling under the weight of sharp tuition increases, some top University administrators were helping themselves to unprecedented retirement riches.  For instance, the Chancellor of the University of Minnesota, Duluth was granted by retiring President Robert Bruinincks a $535,700 bonus package.  Other top administrators were also benefactors in sharing the $2.8 million made available by the University.

The one that caught everyone’s attention was the enrichment package President Bruininck’s negotiated.  In addition to compensation in excess of $700,000, he received $455,000 for the purpose of preparing himself to return to the academic world.  He also funneled some $355,000 to his newly created Center for Integrative Leadership where he teaches at a salary of $355,000 per year.

This excess directly translates into higher administrative costs which are then placed on the various colleges under the umbrella of the University.  For instance, the medical school pays over $66 million for overall administration services ranging from utilities to a variety of student services as well as technology, library, etc.  There is no one specific item that identifies administrative overhead.  Rather these costs are blended in with the overall figures.

However, the bottom-line result is that our medical students pay the highest or near the highest tuition for public universities and this impacts our ability to attract the highest quality students.  Further, as mentioned previously, this high cost burden is a factor in the type of medicine students pursue.

At the Business School, the overhead is nearly $21 million.  The prior Dean of the Carlson School pursued financial independence for the school in order to reign in the costs. This effort was not successful.  She resigned and accepted the position of Dean of the University of Michigan School of Business which enjoys more financial independence.

Clearly, high administrative costs have serious consequences.  But salaries, pensions, and retirement packages are only a part of the overall problem of administrative costs.  Perhaps even more serious is the effect of management layering.

For instance, at the University of Minnesota, most management employees are under contract rather than serving at-will.  This means they can only be fired with cause.  This has created some highly expensive and inefficient practices.  It is not uncommon for an outgoing President to extend the contracts of his favorite managers thereby limiting the flexibility of the incoming President.

Further, it has created an environment resistant to dismissal and supportive of transferring the less productive employees.

The overall effect has been one of creating a confusing array of management layers.  For instance, when the University of North Carolina at Chapel Hill hired Bain & Company, they concluded: multiple layers of management can exacerbate complexity.  Complexity and related operating issues lead to inefficiency.  Likewise, when Bain and company reviewed management at the University of California, Berkeley, they noted the redundancies, complexities and inefficiencies.

 Is the challenge worth it?  Well, the Bain report for the University of North Carolina outlined cost savings of $66 million per year.  At Berkeley it was $75 million per year and at Cornell the anticipated savings were $85 million.

Frankly, I have not enjoyed writing this blog. Like so many of you, I love the University and have nothing but fond memories or professors going the extra mile to help faltering students and lead us into a world of ideas and exploration.  They were truly brilliant teachers in the best sense of the word.

As I get older, my acquaintanceship with the medical facilities has become more frequent.  Again, the nurses and doctors are not only talented but also caring. They are exceptional.

They all define the best in serving the public.  But, sadly, the leadership of Morrill Hall has left us with serious problems that must be dealt with if the University is to succeed. It is clearly a necessary challenge…

In my next blog, I will deal with issues of leadership, etc.

See you then.

Again: A House Divided

Rachel E. Stassen-Berger, a Star Tribune reporter, recently wrote a column relative to the new rule imposed by House Democrats requiring that all proposed amendments to bills on the House floor be submitted 24 hours before the main bill is taken up.  Supposedly, this move was done in the name of disclosure in that it would allow the public the opportunity to contact their legislators prior to public debate.  That may well be the case but those who watch legislation closely tend to be lobbyists and they are quite aware of all happenings relative to their interests.  I suspect this move is more about punishing the minority than serving the public.  However, what the Democrats should realize is that this will hurt the quality of the legislation and that will harm their own members.

Limiting member input is never wise.  The quality of a proposed law can always tolerate improvement through debate and amendment and no member’s right of participation should be restricted. The amendment process should be seen as an instrument that can forge quality and one that enhances the opportunity for bi-partisanship.

Flexibility and spontaneity are valuable ingredients in any management system.  Would we ever think of restricting a surgeon in the operating room or an airplane pilot handling a crisis?  We rely on judgment and experience.

We should expect no less from our legislators.  There should be no place for political revenge.  When exercised it only makes the majority look small.

Bear in mind, when legislators campaign for office and want our support they talk of representing the interests of their district.  I never heard a single candidate ever suggest that they would give their vote away to a political caucus or political party.  Yet, that is precisely what happens time and again.  And this increases unyielding partisanship.

In 2012, the public discharged the Republicans in part because of policy excesses, rigid conformity, and an abuse of power.  Usually when one side insists on revenge, the other will retaliate.  I suspect Republicans will think of endless amendments to every bill thereby slowing down an already slow process.  Further, they could hold the bonding bill hostage since a super majority is required for approval.  That is precisely what is not needed.

This session has major issues to confront including preparing a balanced budget, dealing with expensive infrastructure projects and handling the challenges of tuition and higher education.  Solid and intelligent management of these concerns will be required if the session is to be successful.  This amendment does serious harm to that expectation

Governor Dayton has set a most appropriate standard of conduct for his office.  It is one of graciousness, transparency, and a willingness to work with all.  The House democrats would be well advised to do the same.

Seize the Moment

Mitt Romney is clearly going through a trial by fire with his daily decline in the polls and the endless barrage of negative media observations and increasing criticisms from his own party.  The mantle of “loser” is slowly being placed on his head and in politics a loser is barely a footnote in history.

But lost in all the haste of media analysis is one simple truth and that is that we learn more in defeat than in victory.  This is not meant as an endorsement of the former but rather a recognition that in times of stress we have the opportunity to reach into ourselves and do that which we instinctively know to be right.

In this case, Romney, more than anyone, knows he sacrificed a large part of his integrity in order to be the nominee.  But now the very people he catered to are pulling away in direct proportion to his drop in the polls. Even his wife is lashing out in frustration.

However, Romney holds the ultimate power lever if he is willing to use it:  “to thine own self be true”.

This advice from Shakespeare has incredible potency.  Every great President from Washington on allowed their inner self to define their governance.  Certainly, they had their moments of pandering but they never allowed that to define them.  They had an instinct for doing that which is right and the courage to carry it out.  That is why we celebrate them as leaders.

Romney would be well advised to seize the moment and stand tall.  Set aside a day for a major speech and once and for all put an end to this “birther” campaign which is a cancer on the Republican brand.  Forthrightly,  paint a picture of an America that recognizes all shades of people united by a common sense of decency and community.  Declare without hesitation that competitive politics is about challenging ideas and not the ugliness of bigotry.

Americans, regardless of party affiliation, expect both parties and their candidates to fully uphold the fundamental principles of human rights that are a basis for a democratic society.  We are committed to “one nation under God” and we fully embrace the aspirations and services of all and self-appointed voices of suspicion and divisiveness have no place in American politics.

Leadership endures when it embraces all of us and radiates with optimism and confidence.  It is an inclusive vision for tomorrow.

For Mitt Romney, his leadership is now being tested.  Will he…

Michele Bachmann…. A Lady in Decline

Michele Bachmann’s recent assaults against the Muslims and again suggesting that President Obama is sympathetic to Islamic extremism reminds me of the desperation of Senator Joseph McCarthy in his declining months.

Like McCarthy, Bachmann was once at the center of the new Republican Right with her attacks on the President’s loyalty and questioning his commitment to standing up against the “enemy.”  Both McCarthy and Bachmann were able to define their Presidential targets as “sympathizers” and “appeasers”.

And, like McCarthy, she has found herself in decline and outside her party’s power structure.

The early Iowa primary campaign was her high water mark.  While lashing out against the patriotism of Obama, she was proclaiming the virtues of her Iowa upbringing and pledging her undying loyalty to our neighbors south of us.

But more recently, she was relegated to a minor role outside the Republican National Convention in Tampa and her pronouncements are now carried closer to the obituary section of the newspaper than page one.

What has happened to Bachmann is common with the McCarthy types – they rise quickly as they step loudly and carelessly on the reputations of innocent people and they fall just as rapidly in accordance with the public’s insistence on truth and decency.  Rising Republican criticism has clearly hastened her downturn.

But the Bachman story deserves to be more than a brief historical footnote.  For over a decade, she has attempted to define patriotism and conservatism while cloaking it under her interpretation of the Bible.  Clearly, she has maintained that a Higher Power supports her actions.

First of all, on the religious front, Jesus preached love, acceptance, compassion, forgiveness and humility; not self-interest, war, suspicion, and self-righteousness.  Religious chest thumping has no place in American politics.

As to her conservatism, she sat on the Minnesota Senate Tax Committee as well as on the Subcommittee overseeing property taxes from 2001-2002 and later served as Assistant Minority Leader.  During her stint, we started to see the sharp increases in property taxes as the state began its course of massive borrowings of one-time monies, accounting shifts, reducing local government aids and generally moving more of the financial burden from state to local governments.  The results were astounding:  during Bachmann’s six years in the legislature, property taxes rose by over $1.7 billion.  For the purpose of comparison, they rose some $514 million for the prior six years.  That is more than a tripling in the increase.

Further, the state commenced lurching from deficit to deficit. 

In June of 2003, Moody’s downgraded Minnesota’s credit rating citing such risky financial practices as “fund draw downs, transfers, and tax and payment shifts.”  Sadly, this is what happens when short-term politics replaces courage and substance.

As a member of Congress, she rolled up a stunning record of absences.  For instance, from July 2011 to October 2011, she missed more than 50 percent of the recorded votes in the U.S. House of Representatives.  In the following quarter, from October 2011 to January 2012, her absenteeism hit over 90 percent. 

Yet, she collected full pay and full benefits including federal healthcare which she condemns as socialism when made available to all Americans.

As leader of the Tea Party caucus in the House, she has continuously railed against out-of-control federal spending.  One would think Bachmann would lead the battle against excess spending such as the Congressional franking privilege.  This allows members of Congress to send beautiful multi-color brochures to all their constituents letting them know about the magnificence of their performance.  This costs taxpayers untold millions but is a marvelous campaign tool since these expenditures are not treated as campaign related.  It is truly a frightening example of waste, fraud, and abuse.  Sadly, Bachmann has been a user and not a conservative reformer.

It is not surprising that this daughter of Iowa and absentee Representative is in decline and now operates outside the sphere of this new Republican power structure.  She is regarded as an embarrassment and in politics that is an unforgiveable liability.

Yes….It Does Take a Village

When we pull back from the current political debate, it tends to revolve around the same conflicts that were present during the founding of our nation; namely the rights of the individual versus the defined role of society as represented by government.  Loosely speaking, Republicans or conservatives have been more in the former camp while Democrats or liberals tend to lean toward a more involved government role.

This is a healthy and necessary debate but only when there is more truth than exaggeration and a willingness to concede that there are serious flaws in both approaches when they go to their extremes.  Our system of governance, along with economic realities, do well when there is a balance and fare poorly when there is an extreme.

Sadly, today, we are witnessing too much extreme on the right and too much indifference to economic realities on the left.

Successful administrations, Republican and Democrat, understood the vital role of balance.  The hallmark administrations on the Republican side would probably include Abraham Lincoln, Theodore Roosevelt, Dwight Eisenhower and Ronald Reagan.  All understood the vital role of protecting and encouraging the success of the individual.  However, they did not hesitate to use extraordinary governmental powers to preserve the union, harness excessive capitalism, enforce federal court mandates of desegregation against the perceived rights of states, and crush non-conforming unions.

But, in more human terms, they were all by nature and political bent inclined towards seeing America not as an endless array of individual silos but rather as a beautiful patch work of communities where people worked together for the common good.   In essence, they understood the human role of government in helping others.

All post-world War II Republican Presidents were heavily influenced by the values of the Greatest Generation.  They fully endorsed the notion of “we” when it came towards celebrating and committing financial resources to finance education, human services, the transportation infrastructure, and even using taxpayer funds to help businesses startup and grow.  They were not into the drawing of arbitrary lines but rather governing with a sense of pragmatism.  And while they may have decried regulations and bureaucracies they tended to use the regulatory powers of government and, surprisingly, expanded government.

But my central point here is that they avoided extremes, sought balance, and were protective of both individual rights and societal responsibility.  In one way or other they would agree that it takes a village to raise a child.

From my vantage point, this new Republican Party now controlled by the Tea Party lacks the historical heritage to fully appreciate the role of community.  All too often, they are like the ego-laden athlete who pounds his chest in a moment of self-glorification when he scores a touchdown.  Yes, he may be the hero of the moment but how dare he be unmindful of the contributions of his teammates, the coaching staff and the entire support system that allowed him to score.

When Neil Armstrong walked on the moon, he declared:  “One small step for man, one giant leap for mankind.”  Why did he not instead shout “look at me, I did it"?

Coming out of the Bronx in New York City, I was blessed with a full scholarship to the Choate School in Connecticut.  It was, without question, the most transformative experience of my life.  Totally unprepared academically, the faculty through a process of tough love gave me the opportunity to catch up provided I was willing to put in the extra work.  It was a wonderful tradeoff.

But my most lasting memories were daily chapel where the Headmaster would deliver sermonetts that stressed values designed to build a sense of community.  Years before, John F. Kennedy sat in the same pews and heard the Headmaster of that time advise students “Ask not what Choate can do for you.  Ask what you can do for Choate.”  Obviously, Kennedy was touched by those words.

But the simple fact is that all of us have been touched and helped in a meaningful way by others; parents, teachers, friends, religious leaders, colleagues, and yes, even institutions including business and government.  We believe in the helping hand.

I truly hope this new Republican Party gets out of the Ayn Rand syndrome and begins to recognize the role of balance and the strength of community.

H.H.H….A Golden Moment

The day following the unveiling of the statue of  former Vice President and Senator Hubert H. Humphrey on the grounds of the State Capitol, Walter Mondale called and spoke glowingly of the Humphrey event referring to it as a “golden moment”.  How true.

It was a very special occasion.  The Humphrey family radiated joy and gratitude so reminiscent of the Vice President.  All the speakers were upbeat, brief and focused and all cited the extraordinary courage and determination that dominated Humphrey’s life.

But, in a larger sense, I believe there was a considerable amount of nostalgia for the days when political leaders actually led and knew how to get things done.  Several speakers including President Clinton mentioned the union formed between Humphrey and Senator Dirksen, the Senate Republican leader.  Together, they gained Senate passage of the historic civil rights act of 1964.  Certainly, Dirksen was fully aware of the powerful feelings his conservative colleagues had towards states’ rights and their considerable concerns relative to federal intrusion into the area of voting rights which traditionally were in the purview of the states.  Yet, somehow Humphrey persuaded Dirksen that human rights guaranteed by the constitution had to be enforced fully by the national government.

Both men came together and made Senate passage a reality.  They fully understood that in challenging times great leaders must put aside smaller differences in order to properly govern.

That partnership and the courage it represented was truly the glue that attracted so many former Humphrey staffers and supporters including civil rights activists and lovers of history.  But it also brought out current and former members of Congress, the legislature, and the courts as well as former and current occupants of the “Humphrey” seat; Republicans Rudy Boschwitz, Norm Coleman, and Democrats Amy Klobuchar and Al Franken.

As President Clinton spoke in his compelling fashion about the historic civil rights partnership, I thought back to the unlikely teaming of President Clinton with Speaker Gingrich to bring about a balanced budget and welfare reform.  That was leadership.  Prayerfully, this magnificent past will compel our leaders of today to reach the same heights of excellence in public service.

But, again, it was Hubert H. Humphrey of Minnesota who made this a truly “golden moment.”


My comments at the unveiling of the Humphrey statue on August 4, 2012:

As a young man working on the Humphrey campaign staff, we always referred to him as   “The Senator”.   There was no other name – just “The Senator” – because he personified the title.

Titles do not create leaders.  Rather leaders give definition to titles and that is why Hubert H. Humphrey will always be “The Senator”.

And he has left to us a legacy and a challenge:  public service meant serving the public good.  It was not about personal gain or poll numbers.  No, he understood the great issues of the day and he vigorously participated and led.

In “Mr. Smith Goes to Washington”, actor Jimmy Stewart, fighting desperately for his cause, acknowledged that maybe it was a lost cause but then declared that they were the ones worth fighting for.

When “The Senator” fought for civil rights, it was a lost cause.  But, he clearly understood that this cause was worth fighting for.  And, ultimately, America agreed and we all stand taller for it.

Today, amidst a dysfunctional political system, a system where compromise is under attack and disagreement is all too often treated as disloyalty, the Senator would likely summon his full passion and energy to advance his core beliefs of reason, good will and opportunity for all.

He saw America as it could be and brought out the best in all of us.

Today, we dedicate a statue in his honor.  But, in a broader sense, we dedicate ourselves to his belief in public service and his courageous commitment to it.

Thank you Senator.

Pick the Best…Jeb Bush

Over the past several weeks, there has been endless media speculation on the GOP Vice Presidential pick.  What is interesting, but also alarming, is the focus on satisfying the expectations of the party’s base instead of merit and competency.  It is another major example of where our nation’s priority compass is off course.

Shortly after the election, we will have to make some enormously painful and vital decisions relative to extending the Bush tax cuts, lifting the nation’s debt limit and bringing the budget into closer balance.  These domestic decisions will be made in the midst of a continuing uprising in the Middle East and a severe debt crisis in Europe.  In short, the actions taken by the United States will have a major impact on a fragile global economy.

What this suggests is that both political parties have an obligation to present to all the voters their best and brightest.  For the Republicans it means people of accomplishment and proven competence.  Personally, I would move former Florida Governor, Jeb Bush, to the top of the list.  Yes, his selection may overshadow the likely nominee, Mitt Romney, but that may be a significant asset.  Speaking frankly, Romney is currently swimming in troubled waters and there is a declining confidence in his ability to survive.  He needs a life raft that suggests quality.  In political terms, that would be a game changer.

There are others that should be considered including Senators Portman and Coburn, former Secretary of State, Condoleezza Rice, along with Governor Mitch Daniels. They are clearly qualified and would bring good judgment and balance to the ticket.

But no one has the heavyweight appeal of Jeb Bush who enjoyed a highly successful run as Governor of Florida and has a demonstrated ability to work with both parties.  In short, he can successfully govern and that is key.

Further, his appeal goes well beyond a narrow party base and  he would likely capture a large segment of middle America.  It goes without saying that his presence on the ticket would give the party real steadiness at the top.

Names like Governors Pawlenty and Jindal are advanced on the grounds that they are considered “safe”.  In other words, they will not overshadow Romney nor will they attract negative attention.  At least that is the speculation.

However, I would respectfully disagree.  If the principal Republican argument is that President Obama has not successfully led this nation out of its financial crisis then one would expect the Republican team to have demonstrated excellence in this area.

As stated, Romney is having difficulty and needs some serious shoring up with a solid VP pick.  Bush, Rice, Daniels, Portman, Colburn all have solid financial credentials. Pawlenty possesses many political skills but financial management is not one of them.  Against the repeated advice of rating agencies, Pawlenty borrowed heavily to balance budgets and left Minnesota with a massive deficit and a downgraded credit rating.   In addition, he presided over the largest property tax increases in the state’s history.  That is hardly a platform from which to launch criticism of Obama’s fiscal management.

However, in another twist, the issue that could ignite some national interest is the continuing saga of a Minnesota Republican Party deeply in debt and allegations of serious – possibly criminal – mismanagement by Pawlenty’s choice for party chairman.  The last thing Romney needs is more distraction.

With a campaign currently floundering, Romney would be well advised to do what his father would do – pick the most talented individual for the well being of the nation.  That is always the safest choice.  For my money, it is Jeb Bush.