The Total War of Pandemic

It took us a little time to figure out how to fit the Coronavirus pandemic into a fully formed political debate. We’ve hit our stride pretty quickly though. It turns out it actually fits neatly into the same sort of debate we’ve always had in American politics.

Coastal elites with their charts and mathematical models and high science degrees are telling everyone else that there’s a giant problem. And while most of them have the sorts of jobs where they make a living in just about any economy, they’ve gone ahead and forced us to do something that’s killed all the higher paying working-class jobs. And they’re hiding behind a “phony” motivation of protecting the most vulnerable Americans in order to do it.

Meanwhile, Joe the plumber, just doesn’t get it. The universe is trying to tell him the world is going to end. And he doesn’t care. All he cares about is himself and people that look like him. All the experts agree but he doesn’t care because he doesn’t understand science. It may be hard on him. But it’s not as hard on him as it is on the truly poor and the elderly. Who are ALL going to die. Why won’t he just listen and do what we tell him to?

Healthcare, globalization, immigration, climate change…now Covid-19.

It’s on.

There’s one critical difference here though. This is not a hypothetical slow burn discussion that requires pundits and politicians to pour gas on it from time to time to keep it going. It’s an acute crisis that will force an outcome, one way or another, in weeks or months…not years or decades.

Over 4,000 Americans have died in the last 24 hours. Most of the deaths are in metropolitan areas like New York. Meanwhile, we’ve got at least 25% unemployment in Michigan. And they’re not alone.

Neither of these issues are sustainable for very long. So, we’ve got some extremely difficult choices that are going to require thinking that can’t be contained by the standard 21st Century American political debate.

It starts by acknowledging that both the problems of a sustained great depression level economic crash and an overwhelming viral pandemic killing thousands of Americans a day are things we can’t live with. We don’t need hyperbolic claims that recessions kill people. And we don’t need people who are urging us to open the economy being called murderers. It’s sufficient to simply say that we can’t trade one outcome for the other. Not for long.

Debates over what’s worse aren’t necessary. Clearly the pandemic is worse because it’s killing thousands of people a day. But it’s worse the way dying of dehydration is worse than starving to death. You can tell people not to eat or they’ll die of thirst for only so long before they go looking for food on their own. The protests are already starting.

Objectively we should all agree that there will be a time when we can start to have an intelligent discussion about when the economic impact begins to outweigh the value of future improvements in public safety. For those folks in the “break a few eggs to make an omelet” camp that think we’re there now, I’ve got a chart originally published by The New Atlantis that can add perspective:



Dr. Phil was right when he went on Fox News and said we don’t close down the economy for car crashes or the flu, both of which kill tens of thousands of Americans a year. As you can see from the chart, Covid-19 is not the flu or car crashes. Or anything we’ve seen since the advent of modern medicine. That curve will flatten out on it’s own at some point…probably… But we’d kill a whole lot of people to find out when. We’ll definately break some eggs. It’s not clear whether or not we’d even have an omelet on the other side though. Which brings up the most critical aspect of our current predicament.

While the Covid-19 weekly death curve looks like that, does it really matter if someone declares the economy open?

Let’s take my hometown of Atlantic City as a case study for this question. It’s a single industry town of casino tourism. Right now all casinos are closed. If Governor Phil Murphy declared the economy “open” at noon today, are people going to the Casino this weekend? Are Americans going to gather in the thousands in small rooms and close seating with senior citizens to gamble?

How about you? Are you going to a crowded restaurant? To the movies? Are you getting on a plane to fly cross country for a work conference you don’t feel like going to?

How about employers? Are they making their staff show up?

Right now over four thousand Cops in New York City have Covid-19. 27 have died. That’s more police officers than died on 9/11. And about 10% of all line of duty related deaths for NYC cops since 1950. In three weeks. You read that right.

Whose excited to bring their teams back together…?

The painful reality is that in many areas, the government hasn’t shut down the economy. The virus has. And for the others, the belief is that it would just be a matter of time before it does so we may as well save lives while we wait it out.

That’s the right strategy. It’s just not complete.

“Stay the fuck home” memes are a fun way to value signal that you’re on team coastal elite. But they don’t do much to help people who don’t know what they’re going to do if we shut down forever. The good news for them is that no one thinks we can shut down forever. The bad news is that no one has provided an alternative reality to look forward to. Which means people are arguing what they know; “open” or “shut”. The future looks like neither, at least not for a little while. So a political debate is not only unhelpful, it’s fundamentally illogical.

This is not a binary political debate. It’s a war. But unlike previous American wars that were fought in far off places bolstered by an American economy that was actually energized to support it, this one is being fought on our soil.

We’re not America in WWII. We’re France…complete with Maginot Line to the south.

We have the brutal task of defeating an external belligerent (the virus) and an internal one (economic collapse) at the same time. It might be an exaggeration to say this is America’s first total war on our soil. But not by much. And we need to fight it that way.

There are three fronts:

1-Fight the disease. Medical capacity, disease containment, therapeutic treatment, and…vaccine.

2-Provide financial sustainment. Over the top, New Deal scope programs that cover people, small businesses and corporations. Don’t make it an either or. Do it all. Do it for as long as we can.

3-Systematically open up society where we can and when we can. Maybe start with schools. Ask questions like what behavioral, technological and organizational innovations would be required to get kids back into school by September?

That’s it. That’s the fight. Anything else is a show.

Be wary of the political/media industrial complex pitching other topics. And be wary of politicians disguised as civic leaders using this war as a platform. If they aren’t talking about any of the three fronts in the war and what they are doing to deliver against them, it’s not worth the time.


The Capacity Problem of Pandemics

I’m an operations guy. I have been my whole professional career. I was an operations officer in SOCOM for the better part of a decade and for most of the last decade I’ve been doing some version of the same thing in the consumer software industry.

It’s hard for me to see problems through any other lens.

At it’s core, the art of operations is the activity of matching capacity with demand. There’s a X amount of a particular thing needed because there is Y amount of people/places/enemies who need it.

Figuring out exactly what the X and Y are isn’t really the art of it. That’s just math. The art of operations is understanding the levers that get pulled on either side of the equation to change the math. And understanding what forces move those levers and ensuring that, when the barbarian hordes are amassing at the gates, you’ve got the right levers in your hand to pull to address the ones that you don’t.

At the heart of the COVID-19 epidemic is an incredibly dire capacity problem. And the most common misconception that I’ve seen in the discussion about how to approach the pandemic, is a lack of understanding that capacity problems, at some point, cease to become a symptom of the problem and actually become the problem itself.

The impact from a mismatch of capacity to demand eventually consumes an entire operation. And once that happens, the train is off the track and it doesn’t get back on until demand subsides.

The only variable to control at that point is how many people who need something won’t get it. The grim assumption in pandemic is some higher than acceptable proportion of that group ends up dying.

Spending some time in the math of capacity planning, we can see quickly how shortages reach a tipping point and in pandemic how once that point has tipped, it’s so hard to get it back under control.

The entire acute health care capacity plan in America is based on one baseline assumption:

That an extremely small percentage of Americans will need acute care.

According to the Society for Critical Care Medicine (SCCM) there are about 97,000 ICU beds in America. At any given night, they are about 2/3 full. Which means the working forecast for ICU beds in America is grounded in the assumption that, at any given point in time, 99.98% of Americans will not need an ICU bed.

We have an excess capacity of about 32K beds. Which means that we can stretch our assumption to 99.97% of Americans not needing an ICU bed, without a problem.

Now here’s where the law of large numbers gets problematic for us in a hurry. Let’s say, for the sake of estimation, a hypothetical epidemic hits us and we can only really assume that, at any point in time, 99.9 percent of Americans can be depended on to not need an ICU bed.

This, .07% difference to the untrained, non operations forecaster eye, sounds like an extremely small number. In reality, represents a 400% spike in demand. And it results in a shortfall of 130 thousand ICU beds on any given night.

The clock never stops though. And now time is the enemy.

Say the hypothetical pandemic causing that spike lasts for 60 days. Then over that time, 7.8 million Americans who need acute care, will not have access to ICU beds. This shows how extremely small changes at the top of the demand funnel make for crushing outcomes at the bottom when you have a population of 330M. Based on this estimation, I can describe this problem two ways accurately:

This hypothetical virus will result in less than one tenth of one tenth of one percent increase in need for acute care.


Over the next two months, about 8 million Americans infected with the hypothetical virus who need acute care, will not get it.

The ops guy in me sees the problem the second way immediately and knows that I’ve got a problem. And my only hope is to address both sides of the equation. I need more capacity AND I need less demand. It will be insufficient to try to simply increase capacity. Because the good guys are playing the game with resource dependent arithmetic growth. The bad guys are playing with resource independent exponential growth.

Let’s unpack that.

When I make a new ventilator or a test or an ICU bed, the existence of that ventilator or test or ICU bed does nothing to increase my capability to to make more. On the contrary, it diminishes my capacity to make more because each one uses some amount of finite resources.

Right now the nation that put a man on the moon with slide rules and pencils doesn’t have enough long Q-tips to make COVID19 tests. This is the reality of where we are on increasing capacity.

On the other side of the fence, every person who catches the hypothetical virus can effortlessly spread the virus and infect countless others. The only resource the virus requires is an uninfected human. This is exponential growth. And it gets out of hand in a hurry. A penny that doubles in value every day is worth $5 million at the end of a month.

The hard part about handling exponential demand growth with arithmetic supply growth is that once you’ve fallen behind, it is impossible to catch up. In fact it’s impossible not to rapidly fall further and further behind. If you don’t stop the growth of demand, it doesn’t really matter what you do.

Social media platforms illustrate this gap effectively. Their customer growth is exponential. The more they have the more they get. Their ability to provide human support to those customers is arithmetic.

Ever try to talk to a person, real time, for help with a problem on Facebook? You can’t. They know they can’t provide it. So they don’t try. It’s a luxury social media platform have that the medical community doesn’t.

This is where the truly brutal nature of epidemic starts to materialize. My capacity is behind. I’m falling farther behind by the second. And then the virus actually starts to diminish my capacity to help the people I actually can. Because besides beds ventilators and tests, the capacity to provide care depends on humans to provide it. Now the virus and my operation are fighting over the same resource. And the virus is better…exponentially so. Eventually, they get infected. The gap widens even further until eventually capacity reaches near zero while demand accelerates.

Now the virus is no longer the problem. My lack of medical infrastructure is. I no longer have capacity to deliver services for other issues. And problems that are entirely unrelated to the epidemic can’t be addressed.

Now, I’m on the road to operational collapse.

It starts with eliminating elective procedures. And then I start to pull DEFCON levers that increase in severity until I’m making decisions on who lives and who dies. And then simply how long to shut down the whole operation because the declaration of no capacity is better than the unfilled promise of some.

All because of an increase in one tenth of one tenth of a percentage of demand for acute care.

In the operations world, nothing about that scenario is controversial. It’s the pattern we understand that defines why we do what we do. Where the controversy lies in every operations problem, is the math that gets you to solving the mystery of demand.

For COVID19, we don’t know what the baseline infection rate is. And we don’t know the impact efforts to limit it will be.

These are all common forecasting problems. The way we get around them is through the collection of historical arrival patterns and the collection of massive data sets that allow us to use machine learning algorithms to enable more effective predictions.

We don’t have historical COVID19 data. And we don’t have nearly enough real time data to start to feed ML platforms that can help. And we won’t until it’s too late. So we’re left with the mother of all bad operations problems.

We have a huge area to cover. We have an unknown incidence of events to respond to. And we have extremely limited resources to respond.

As an Ops guy, I’m out of precise, limited measures. The only action I can take is 1-Broad measures I know inherently decrease demand. 2-Rapid production of capacity.

Right now the bets we’re making are on the forecast. And I can tell you from experience that we don’t have enough data to know that it’s accurate. People telling you X people will die don’t know. People telling you Y people won’t die don’t know.

So we’re in a place we’re we have to decide something undecidable. Which means we really have to fall back on principles that allow us to answer the following question:

If we’re wrong, and we most certainly are to some degree because we don’t have enough information to be right, what’s the acceptable damage we’re willing to incur?

Is it worse to have to simply shut the operation down?

Or is it worse to do the things it requires to keep it running?

This is the question every ops person answers on their way out the door when it’s gotten to bad to stay. And it’s the one on the table for world leaders now.

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It’s Not Checkers

It’s been more than twenty years since the IBM computer Deep Blue beat Grandmaster Garry Kasparov in a six game challenge of chess. Now, a few decades into a reality where something we’ve created can beat us at a game of strategy, we’re all pretty sure we’re only a few decades away from being enslaved by machines. I’m more skeptical. Or more optimistic I guess, depending on which way you look at it. But there’s quite a bit to learn from the observations you can gather from paying attention to the evolution of machine chess. And not just about chess.

A truly world class chess playing human can look a half dozen or so moves into the future and reasonably predict where the most relevant pieces will be. A computer can go dozens. So the thing that makes a computer better than a human at chess is not in fact it’s ability to ponder consequences to itself and infer the intention of its opponent. What makes the machine better is simply a function of how many simultaneous calculations it can do relative to what a human can. And how much it can remember about the variables of moves it considers. For a computer, that’s all of them. For a human, it’s something less than that.

One of the things you’ll hear, if you pay attention to chess is that commentators will often say things like, “That’s a move no human would make.” Because chess computers not only see more of the future, they care less about the past and present. A computer doesn’t worry if the move looks crazy. And it doesn’t concern itself with how harsh the criticism will be if that move fails. It simply sees that it will likely work. And it makes the move.

The human it’s playing is often so dismayed by the abnormality of the move that they get flustered. And they make mistakes. And even quit. That’s what happened to Kasparov. He conceded a game after a bug in the program made the computer do something stupid. The Grandmaster wrongly assumed it was genius. So he quit. The computer is not bogged down by the troublesome human burdens of risk aversion, doubt or shame. And so for the most inhuman of reasons, the computer is better at winning chess matches against humans than other humans are.

There is one part of chess that computers aren’t better at than humans though. It’s the the first dozen or so moves. What’s called the opening. In fact, computer chess programs are so bad at computing the opening they don’t do it. Because the end outcome is so distant and the variables are near infinite, they won’t even try. Instead it will use a reference database of known openings instead. Because the openings chess players use are some variation of the known openings that humans have learned work most effectively over 15 centuries playing chess. Because even the most powerful computer in the world is no match for the collective learnings of our species. So in that respect, they imitate us.

There’s a reason we’ve been playing chess for as long as we have. There are so many parallels to life. How a computer needs to play it, is one of them. It’s very easy to be bold and uncompromising when you are just a little shrewder than some of the others in the room. And you started the game with the advantage that others handed to you. Say, if you were given a real estate empire. And all you had to do, was punch the guy across the table hard enough and long enough that he conceded that you had the stronger hand. And that you made the rules. You could even be outrageous. Knock people’s foundations out from under them. Get them flustered and outraged. Make them fold when perhaps, they didn’t have to.

And you might find, that gives you success.

But if you start something brand new, for instance, like take on the responsibility of governing the country that’s been most effectively governed for longer than any democracy in the history of governing, perhaps you may want to consider how some of the men who did it before you chose to act. See how they treated people. Practice the same disciplines they did. Follow some of the norms. You might find then, like the computer did, that several centuries of human consciousness is not in fact, less savvy than you are at something so very important.

And perhaps then you might find that you can drain the swamp the way it so needs to be drained. Because those who have given you the power you so sought will fear you less than what they fear they’ll find at the bottom when you drain it.

Or you can go on flubbing the opening. And lose early and often. Because computer chess tells us one other thing about it that is a powerful analogy to life. The scoring systems show that it’s almost never a glaring error that loses the game. It’s the compilation of smaller ones that ultimately erodes one player’s stronger position until they’ve got nothing left.

Like an illegal travel ban that no one needed. Or a healthcare plan that couldn’t be passed. Or a wall that your people don’t care about paid for by funds that your people don’t have.


American Vision: Revised Edition

My mother’s favorite poet was Robert Frost. She kept a book of his poems with illustrations on our old wooden bookshelf in the living room of our house in New Jersey. There were a handful of books on that bookshelf that I would pull down and thumb through from time to time. One was a compilation of photographs of Lincoln. Another was an illustrated account of the Kennedy assassination. Another was the story of our accomplishment of space flight. They were huge books, about half the size of me with colorful pictures, worn dust jackets and coffee stains. She’d gotten them in college in the 60’s. They sat on that shelf for decades. Some of them are still there, though she’s long since passed.

Stopping by Woods On a Snowy Evening By Robert Frost

I remember the picture of a tree on the page with Frost’s Stopping by Woods on a Snowy Evening. It looked like the tree in my front yard. I would read that poem over and over again. There was something about the end of it that just stuck in my head. The part about the woods, “lovely dark and deep.” And the part about life, “miles to go before I sleep”, twice said.  There was beauty in that described moment of peace. And the realization that it was fragile and fleeting and that there was work ahead that made it more so. One last breath of fog in the cold night air while your feet stay still in the snow. And then it’s back to the business of life. Less beautiful. More permanent.

Life moves on. The future is our only constant. And no matter how beautiful or still or comfortable the peace of now might be, you cannot stay in it. The instant you realize it is the now you’re experiencing, it becomes the past. And you must move on. There’s work to be done.

Elections aren’t what make democracy great. They are a messy, imperfect means to an end. Accountability is what makes democracy great. And elections are the best measure of that accountability that we have to do that thing that is so hard to do. Since the days when we wandered out of the woods and onto the planes and further still over the horizon, the process of choosing who we allow to leads us has been hard, costly and not always for the best. The way we do it in America has yielded strong outcomes for centuries though. But it is not what makes us great. The greatness comes in between. After we choose. After we begin our journey again. We’ve got quite a bit of road ahead of us to cover. We’ve got miles to go. No sleep in sight.

There is a world beyond our current myopic focus. Our politics or the Jihad of a small group of foreign, hateful, religious zealots have distracted us. The world is about to remind us that those things weren’t quite the magnitude of threat we’ve faced in the past. What lies ahead, the rhetorical promise of a new arms race and the rise of an eastern power with enough resources to dominate the world for centuries, are far more serious threats. Threats that will force us to remember a time when Russian field commanders had nuclear weapons release authority for the payloads being placed in Cuba, 90 miles from our shores. Or when global imperial powers had the capacity to cripple our military with equal or greater military might of their own. And nothing the last president did, or the one before him or the next one is at fault. It’s the ebb and flow of a global species in which there is rarely a singular power that remains singular for very long.

It’s time to pick our heads up. There are sails on the horizon. And we’ve got work to do.

It’s been 45 days since the American people elected Donald J. Trump president. And it’s another 30 until he is sworn in as the 45th president of the United States of America. We’ve had enough time to reflect on what the election says about us. And what it says about the state of our political discourse. And what it says about our culture. We’ve taken our deep breath in the cold dark woods. And it’s time to move on. And it’s time to move past the what and why’s of what happened. It’s time to ask the better question. What do we want from a Donald  J. Trump presidency? What do we want for America? The answer is pretty straight forward.

I don’t want him to fail. I don’t want him to be the disaster that would prove secretly delightful to those of us who so strongly opposed his candidacy. That justification can only come with four years of failure. Four years of worse outcomes for the American people. Four years of a weaker country amidst the backdrop of a rising China and a belligerent Russia. I don’t want that and neither should you. What I want out of a Trump presidency is the same thing I would want out of any presidency. Success.

Success is a weak word. It hasn’t done the work. The work of success begins with a narrow vision of what right looks like in the end. And if you don’t have one for America, then you haven’t done the work.  And you don’t know anything about the effectiveness of her direction. And if your vision is 1950’s American, it’s a bad one. Success starts with a vision. So I’ll share with you mine. Because a great 21st century America needs to start moving forward in earnest. A great 21st Century America accomplishes the following, no matter who sits in the oval office or what ideas they have about America and her people:

  • 25 Million new jobs created over the next ten years. China is on the hook for ten million a year. They’re still in catch up mode. We can win with a quarter of that.
  • Balance the federal budget by 2030. If you refuse to accept any other outcome, it can be done. But you are going to have to re-define your reality of taxation and government services. If you can’t, your future is already decidedly less great.
  • Eliminate fossil fuels within 75 years. Not through regulation. Through innovation and a better way. 100 years from now people need to laugh at their grandparents for digging dead things up from the ground and burning them for power. Pay attention to what Elon Musk is doing. And root for him to succeed.
  • A complete overhaul to modernize American infrastructure by 2025. I don’t mean repair. I don’t mean upgrade. I mean build again. Better, more innovative, more American. We win with better things and a better way of life.
  • Manned space flight to Mars by 2035. If it sounds silly, then I’d ask you what happens when a people reach their ceiling? They atrophy, or they blast through it. I’m for the latter. Again, watch Musk.
  • Put science, treatment and doctors back at the center of American healthcare. Get shareholders out of the game. Do that in any sustainable way possible.

That’s not an exhaustive list. You could probably find other things. But it’s a start. And we have to start. That’s what a vision looks and sounds like. That’s what making 21st century America great looks like.  It’s more than a red hat and a snappy saying. It’s hard work.

There’s something refreshing about turning away from the messy footprints behind us that got us where we are and turning towards a goal. It’s cathartic. Because you spend time thinking about what you want. So much of American mind-space for the last 18 months has been focused on what we don’t want. It’s time to move on. And move forward.

If you’re one of the tens of millions of Americans who the president elect alienated with his campaign rhetoric or personal behavior, I’m not going to ask you to just get over it. But I am asking you to have a vision for what you want. Not simply what you don’t. And it’s entirely fair to assume that in order to realize that vision, it’s mandatory to build some foundation of unity where Americans aren’t living in fear of each other or the government. And if that can’t be done with Mr. Trump, then step one on the vision, is choosing a new leader. So be watchful. We are a nation of people. But we are a government of laws-laws that exist for the betterment of our people. No one is above them. We didn’t elect a king. Only a president.

It’s time to get going now. Feet moving over the snow again…miles to go before we sleep. Miles to go before we sleep.

City By the Sea

My people are an old Atlantic City people. We go back to the grand days of the boardwalk empire. My great-grandfather was a boat captain in the inlet basin. He drove the famed Miss America speedboats. My grandmother was a show girl in the Ice Capades. She performed on Steel Pier long before it burnt down and fell into the sea. My father worked over 30 years on the Atlantic City Beach Patrol. I put in 6 myself. It’s in my blood.

Gambling came to the city the year I was born. My mother, a schoolteacher, worked as a blackjack dealer in the summers and in the evenings. She wasn’t from there. She married into Atlantic City. And it wove itself into her. She died there.

I have aunts and uncles and brothers who all work in the casino industry today. And though I left to join the navy when I was 18, and spent most of my adult life in California, Atlantic City has stayed with me. It’s the kind of town that leaves a mark-for good or for bad.

Like I said. It’s in my blood.

Something’s gone horribly wrong with America’s Playground though. To be honest, something’s always been wrong. She’s never really been on the up and up. Even when she tried. And now it looks like it’s caught up to her in a way it never had before.

This past week, the municipal government of Atlantic City received permission to shift paying their employees-cops, firefighters, teachers, etc-to a monthly basis instead of bi-weekly. Had she not, the city would have been out of money by the end of the month. This new payment schedule buys them until May. Which means that unless something changes, the first and arguably grandest destination resort of 20th Century America will be unable to pay her employees, her debt obligations or any of her other financial commitments. In which case, under normal circumstances, she would declare bankruptcy.

Except she can’t.

Because there’s something else going on in New Jersey. Something that, fifty years from now, history and political science majors will be dissecting in case studies. If we’re lucky.  If we’re not, they’ll be teaching it to our grade school and high school students learning about it the way they learn about things like Tammany Hall or the Teapot Dome scandal.  It will be one of those otherwise obscure events we teach to generations for how teachably perfect it illustrates a massive societal problem of the time, and how it served as a warning-a canary in the coal mine if you will-that ushered in change. It’s a troubling compilations of civic catastrophe.

If you’re not paying attention to it, let me help.

If you are paying attention to what’s going on in New Jersey, you’ll see what appears to be a long series of governing through press conferences. You’ll see the mayor of Atlantic City, Don Guardian with his odd bow-tie, defiantly standing at city hall trading barbs with the imposing Governor Chris Christie, fresh off of his unsuccessful presidential bid having somehow been out bullied by Donald Trump before eventually endorsing him in a tragic race to the bottom that is the political despair of the Republican Party. The mayor and the governor are at an impasse.

But over what?

Hold on tight because this gets complicated. And you may begin to think I’m joking as I explain. Sadly, I’m not.

The municipal government of Atlantic City wants to receive state assistance that is on par with other municipalities. If they do, they will be able to pay the bills. If they don’t they will likely have to declare bankruptcy. But they can’t. Because bankruptcy would have to be approved by the governor. And he won’t. Because the governor believes that Atlantic City spends too much money on their government workforce and is incapable of self government. And he’s right. So he wants state takeover of the city as a condition of increased funding. Except he can’t do that because only the state legislature can pass that type of legislation and they won’t. Because a state take-over would void all public union contracts previously negotiated by the city of Atlantic City and open up state collective bargaining agreements that would no doubt be more austere.  And if there’s one thing you don’t do as a state legislator in New Jersey, it’s take on public unions. Which brings us back to three groups pulling on the same rope in three different directions. All while the meter is running in Atlantic City who is out of money. It’s a mess that’s hard to follow but that’s about 150 words that sums it up.

So who is right?

No one.

What I just said is a massive oversimplification of the issues. But that actually doesn’t matter because the level of detail required to form an opinion on their differences and take a side isn’t required. Because no one’s right. Which is good for me because if I actually had to take sides, family barbecues would be uncomfortable. It’s a remarkably small town and I’ve got family on both sides of this issue all the way to the top. Me glossing over the details isn’t for lack of information or understanding. It’s because it doesn’t matter.  Because what they actually can’t agree on, won’t be what is taught in history classes fifty years from now.  How they’ve gotten to this stand off and what it says about early 21st Century America, will be.

If you took the time to listen to what Governor Christie said in his press conference earlier this week, you would have heard him run through a litany of items showing a gross mismanagement of tax payer money by the Atlantic City government officials.  He called out the fact that police and fire department employees, allowed to retire in their 40’s are able to cash in unused sick pay and vacation time to walk away with $300K “boat checks” on retirement. And that health care plans divested by the state decades ago but still in use in Atlantic City were costing the government $4M more a year than they need to. And that there are over 100 municipal employees that make over $100K a year. And that the utilities managed by the city are inefficient and have needed to be reformed or privatized for decades. All of these things are clear and inarguable mismanagement for a city of 39,000 people. That’s right. There are only 39,000 people in Atlantic City. Hold that thought.  We’ll get back to it.  The list goes on and on to make the point:

Horrible greedy government workers are manipulating the system for personal gain while their city goes broke.

That’s the message.

Here’s the thing with those claims. They’re reasonably accurate. For the most part, these are indefensible positions for the municipal government to have. And they are in need of reform. And they probably don’t deserve to receive state assistance unless they fix them.  But here’s one other thing to consider.

None of it matters.

Not a bit of it.  Because the budget gap for Atlantic City is about $100M. Annually. You could fire every one of those high paid employees and save $10M. Great. Now you’re down to $90M. In fact, you could fire every police officer and fireman in the city-don’t worry this is hypothetical- and still only be about 2/3 of the way to solving your problem. And one other thing. It’s 2016. $100K isn’t really that much money in NJ where you’re going to pay 4% property tax on your highly valued home. So when it comes down to it, this massive over spending is wrong and it needs to be fixed. Because of principle and future impacts. But fixing it isn’t solving the problem. At least not on a material level. Let’s ask a better question.

How did a city with 39,000 people open up a budget deficit of $100M?

Here’s where this story actually starts to matter. Because on a microeconomic scale, it’s an extreme but accurate portrayal of what is happening in 21st century urban America.  The city has a massive infrastructure that is designed to support it’s singular industry, casino gaming. Over 30 million people a year visit the city. Another 40,000 are employed by the casinos. None of them live in Atlantic City. Because the city of Atlantic City has 39,000 people. 75% of those people own no property. Which means that the city’s lone source of income, property taxes, is funded almost entirely by the lone industry in the city-casinos. 80% of city revenue comes from the property taxes paid by the casinos.  Which is great. Until the economy takes a turn for the worse, and a neighboring state opens a few casinos and then the industry tanks.

In 2015, four of Atlantic City’s 11 casinos closed.  And the fifth, the Borgata, the largest tax payer in the city was awarded a $150M tax ruling that makes it so they don’t have to pay taxes to the city for years or until the debt is paid off. Which means that Atlantic City lost about half of its tax revenue, almost overnight.

That’s how 39,000 people get behind a $100M eight ball.

In Atlantic City it’s the casinos. In Detroit it was the auto industry. In Baltimore, it was the steel industry. Name the town and the outcomes are the same. High paying, working class jobs have left urban America because they’ve moved overseas, been automated or moved to the suburbs.  And those that do work in the cities live outside of it. That’s always been the case in Atlantic City. So those left behind, the urban poor, live in a city that quickly runs out of money during an economic downturn and the basic services, schools, police and safety and general infrastructure-see Flint, MI-break down. And the urban gap widens.

In the four decades that Atlantic City has had gambling, the revenue generated by that gambling is in the tens of billions of dollars. The property values have increased over 600%. But the people of Atlantic City haven’t benefited much. They have double the unemployment rate of the rest of the state. Their median income is a third of the rest of the state. Their crime rate is six times the rest of the state. 30% live under the poverty level. Beyond the gaming and tourist attractions-the ones still open are actually amazing-the city of Atlantic City is an urban wasteland. And in about a month, they’re about to stop paying their teachers…and their cops…and their firefighters. It’s a cycle of despair we don’t have a way out of.  And it’s bad for all of us, not just them.

Enter the State of New Jersey. The bow-tied mayor has a point. This is why municipalities organize into counties and why counties organize into states and states organize into a union. They do it to minimize risk. The state clearly benefited by the fact that South Jersey’s economy boomed in the last decade. And the city gets 0% of the gaming revenue, unlike the 2% being proposed for the cities hosting the development of proposed North Jersey Casinos-which will kill Atlantic City by the way. But in the mean time,  now that Atlantic City is suffering, it’s time to help them weather the storm. Right?

Here’s the second part of the discussion that actually matters. The governor can’t help.  Because the state is broke too. Not the same way that Atlantic City is broke. The state can pay its current bills. It just can’t pay it’s future ones. Here’s why.

When you look at New Jersey’s government spending on a macro level, it looks pretty unremarkable. New Jersey has the 8th largest budget in America for the 8th largest economy in America generated by the 11th largest population. New Jersey spends just over $11K per citizen, which is 12th highest in the country. As bad as taxes feel in New Jersey, the state collects about $10K in taxes per citizen which is the 17th most in the country.  Which means that the state runs about about a thousand dollars per citizen in the red each year. Which sounds bad but it’s actually better then neighboring Pennsylvania, New York, Connecticut and Massachusetts. Only 10 states run at a surplus. The others close the gap with planned federal funding or other assistance programs. So what’s wrong with New Jersey?

Well, the big one is this. For the last 20 years, the state government has decided not to fund it’s pension program.

If you listen to the governor talk about the issue, you’ll hear him speak  of a massive out of control pension program that has suffered mismanagement resulting from public unions having their way with the government contracts. Which there’s certainly truth to. But when you actually look at the numbers, it’s about on par with other states expenditures. New Jersey spends about $1,100 per citizen on pensions, the 8th most in the country, entirely aligned with the size of its economy-less than New York, about the same as Pennsylvania. There’s one difference though. New Jersey hasn’t fully funded its pension fund for the last 20 years. In fact, from 2001 to 2004, they didn’t fund it at all. And now, New Jersey has a $37B pension gap for a state with $100B budget.  Which means they can pay pensions to those currently retired, but unless something changes, those retiring in the future will have nothing.

Now, the details of how the Governor has handled the pension problem are a source of great frustration and anger for state and local employees in New Jersey. They claim that he’s  been a bully, called people names and gone back on his word. And they’re right. He has. Partly because of who he is. But mostly because he’s trying to jam reform down the throats of New Jersey citizens to close a gap that even draconian reform won’t solve.  Because the damage is done. The ship has already hit the ice berg. And the only thing that’s going to help New Jersey is massive increases in revenue-yes that means taxes. Or a complete scrapping of their pension system. Which means that people who have paid into a pension system that legally have the right to expect a return on it when they retire, will not get one. Which is wrong. And no one can tell anyone that it’s right. And telling them they are greedy and that the pension system is bloated is political crap designed to lubricate the populous for change. Just like calling out how many employees in Atlantic City make over $100 a year.  It’s the same thing.

You can ignore it all.

Because it’s detached from the real tragedy here. Which is this. Unfortunately, all the expectations that the citizens of New Jersey had for their retirement, assumed one thing.  That the public representatives that they elected to office, the legislature, the governors, all of them, would do their civic duty and responsibly manage the states finances. For 20 years they did not. So all bets are off.

Democracy has consequences.  Electing the wrong people has consequences.

So what does this have to do with Atlantic City?  It’s not a long leap. The governor can’t let them declare bankruptcy because places like Camden and Patterson and a list of other urban areas in New Jersey that are in similar boats would quickly follow suit. And if the governor capitulates and simply hands Atlantic City the funding, he has the same risk. So he’s using Atlantic City as an opportunity to drive reform because in the end, the state can’t pay its own bills and it can’t run the risk of paying municipal bills for the failing urban areas. So here’s the message. We can help. But it’s going to be painful for you. And any of you other places thinking about going this route, take notice.

In the end, both sides have valid arguments. And the men standing at the podiums trading political jabs aren’t the ones that put their respective organizations in this mess. And what will probably happen is some level of anti-climactic agreement that involves some state take over and assistance and both Atlantic City and New Jersey will live to fight another day, having successfully kicked the can down the road, the way American politics in 2016 does.

So why will they be teaching this in civics classes 50 years from now?  Because in one small package- 4.1 miles of build-able land to be exact-the Atlantic City crisis illustrates two of the most troubling issues about American society today. The first is urban decay that has resulted from the de-insdustrialization of America. The crumbling infrastructure and failing socioeconomic climates in our cities is a massive problem driving racial inequality and driving citizens in the most powerful country in the world down to a quality of life that is massively at odds with our national wealth. The second is that we have a cataclysmic entitlements problem in our country. At the state level, we are under funding our pensions by a trillion dollars collectively. That’s 20% underfunded. And if you think that’s bad, social security at a federal level is 32% underfunded, that’s a shade under 26 trillion dollars. Right now about 40% of our federal budget goes to social security and medical costs.

And it’s not enough.  Not by a long shot.

So, while we select the next leader of the free world, candidates from both sides are waving the shiny objects of traditional values, immigration and wars on women. But probably the only two things that really matter is that our economy can no longer support our urban inhabitants and we’re going to go broke because we can’t fund our entitlements without massive cuts in other areas or higher taxes. Those are hard problems. Give a listen for solutions in our national political debate. You won’t hear them. And as we plod forward on our path as we do, eventually we’ll fall over when the issue becomes so big that we have no choice. What Atlantic City is telling us is when we do fall, we’re left with men standing at podiums shouting bad options at each other. Because all the good ones went away when the tide of irresponsible governing receded.

I’m saying prayers for my friends and family back home that they make it through this difficult time as whole as they can. In the end, it’s the people that suffer. But it’s also the people who elect. So we’ve got a choice here.  Learn the lesson Atlantic City and New Jersey are teaching us. Or face the consequences.

I’ll mourn the canary. Those are my people. Everyone else, worry about the coal mine.

Democracy has it’s consequences.


Nothing… in the Name of Liberty

Tomorrow would by my mother’s 70th Birthday. She’s been gone for ten years but I remember when the end began as if it were yesterday. I was far away, leading my team in some crappy corner of the globe talking to her on a satellite phone. It was cancer. They’d caught it early and were able to operate and contain it. She dodged a bullet. Cancer alone, wouldn’t do it.

Shortly after I returned from that deployment I remember noticing her speech slowing considerably more each time I would call. The doctors thought it may have been related to the cancer medications she was taking. It wasn’t. It was ALS. ALS, as it does in every person who ever suffers from it, killed her. It killed her in a slow, methodical painful horrible way.

This isn’t a story about losing a parent. We all expect to lose them at some time. I was fortunate enough to have both of mine well into adulthood, after I crossed the bridge of financial stability-after I started a family of my own. This isn’t a story about ALS either.   It’s a horrible disease. But it’s very rare. It touches less than one tenth of one tenth of one percent of Americans annually. Chances are, it won’t matter to you. This is a story of what happens in 21st century America when someone you are obligated to care for, gets sick.

My mother lived less than two years after she was diagnosed with ALS. For most of the second year, she was reduced to a completely motionless state as her nervous system rapidly shut down. There are a few things I will remember for the rest of my life that happened during that time. I’ll remember the long drive she asked me to take her on shortly before her speech completely failed. She slowly told me the story of how she met my father and how happy they were, for a brief time, when they were married. They split when I was too young to remember any of it. We’d never talked about it. She wanted me to know that I came from something good. It was the type of thing you tell your son when you know its the last thing you’ll tell him.

I remember the trip to the specialist’s office in Philadelphia. When the doctor told her that her lungs were soon going to lose the ability to draw air. And when he asked her if she wanted a respirator, because without it, she would be dead in months. She looked at me for permission to say no. Then she pointed to my wife’s stomach. We were pregnant.  She wanted to live to see him. But the pain was too much. With a silent hug, I let her know it was ok. I understood. She was done.

I remember the afternoon, a few months later, alone in the house I grew up in with her. I dozed off in the comfortable yellow fabric chair I spent my childhood watching TV in.  Something startled me. I realize now it was the gasp of her last breath that woke me up.  She was gone. The last thing I remember was the feeling of relief.

Surely you can forgive yourself for feeling relief when someone comes to the end of such a hard, painful journey. It’s only natural. But there’s a part of that relief that I haven’t been able to shake. One that wasn’t linked to the pain and suffering of my mother. One that wasn’t linked to the emotional marathon that is a long terminal illness. One I will feel guilty about for the rest of my life; the relief that my mother’s passing had given me from the ever growing certainty that we were all going broke caring for her.

My mother did everything right. She graduated from college and became a teacher. She spent 35 years teaching kids how to read in some of the lowest income school districts in South Jersey. She saved her money and put her kids through college. She even bought a long term disability insurance policy. But when she fell ill after she retired, and before she was eligible for social security, the financial burden was unavoidable.

ALS patients live an average of three to five years after diagnosis. She lived two. Had she lived longer, my family, including myself, also providing for a family of my own, would have gone bankrupt caring for her. Ten years later, I still bear financial burdens that I had to assume in order to relocate my family to provide care for her. Because we, in America,  do something with medical care that we don’t do with anything else this important. We let profit drive the outcomes.

The single most common reason for bankruptcy in America is medical cost. Whether it be injury, illness or terminal diagnosis, nothing drives us into financial failure like medical issues. More than one in four bankruptcies in America are caused by medical reasons. And that’s just for people who have issues. The happy path is no better.

The average cost of healthcare in America for a family of four is just over $25k annually.  Employers pay about 60% of that. Employees, you and me that is, pay the other 40%.  Which means that a family of four, in a good year, pays $10k out of pocket annually to provide basic health care. In 2001 that cost was a about a third of what it is today as it has increased at two to three times the rate of inflation over the last 15 years. If you’re interested in politicizing the issue and blaming the Affordable Care Act (Obamacare) look elsewhere. Since it’s inception in 2014 the annual increases in cost have slowed to the lowest point since the good folks at the Milliman Group started publishing the Milliman Medical Index in 2001. If you’ve got an opinion and you haven’t yet read their 2015 issue, read it.  If you can’t take the ten minutes to do that, save your breath. This issue is too important for uninformed rhetoric.

What the data shows is massive, uncontrollable cost growth in almost every area for decades. Why? Because there’s something wrong with private medical care. It’s called profit. Take a pause here before you start with the anti-capitalist rhetoric. I’m a corporate stooge in my private life. I love profit and make a living growing it. But there’s one thing that my MBA and my years of corporate leadership experience has taught me.  Corporations are addicted to growth. And in industries like medical care, where you can’t and shouldn’t aim to grow it by increasing customers and massive efficiency gains aren’t really appropriate, you’re stuck with two options. Increase price by increasing demand or increasing services. There’s a reason why there’s more pharmaceutical ads on TV than beer commercials these days. They’ve become a consumer product. Which is a uniquely American thing. Advertising drugs is actually illegal in other countries

So what should do we be doing? It’s a dirty thing to say in America. But I’ve got worse scars than most because of this so I will. Forget about profits. Which means one thing. Yes-government run health care.

By now. it’s possible that you’ve stopped reading, posted something in the comments section of this article that screams angrily about communism or that “damn Obama”.  If you’ve made it back, perhaps it’s because you’ve realized that we do this all the time in areas that no one objects to. If we need to bring our founding father’s into this one, people who were raised a generation removed from when we were burning witches and still regularly bled people to death to get the “bad spirits” out of them, we can do that. Long ago those brilliant men set out to create a society in which “life, liberty and the pursuit of happiness” was a right, and in as much as government existed, it existed to enable the provision of these “self-evident” aspects of the human existence.  Since then we’ve deemed things like education, police and fire, utilities, national defense and even space exploration to be so basic to our ability to pursue happiness, that we’ve invested our pooled resources to enable it. How basic health care does not fit into that group is simply a function of how recent the gap of having it and not having it has widened as a result of technology and the regrettable outcome of our current political paralysis.

Right now, there is a senseless debate going on relative to the Affordable Care Act.  The schism in American views on healthcare runs right down party lines. Here’s the truth though. The Affordable Care Act is a miserable solution to a serious problem. But it’s what we have because the real solution is a single-payer system. Until we all cross that bridge of acceptance, which I am aware we probably never will, we all need to realize that the Affordable Care Act is the only solution to date that gives more people healthcare insurance than if it weren’t in place. And though that’s a massively low bar, and it will one day collapse under the spiraling costs of profit driven health care, it’s better than what anyone else is willing to do. Which is nothing in the name of liberty.

Doing nothing means that people every day make decisions about health care based on cost. People with families decide against the best health interest of their children because they can’t afford it. People with special needs children have to choose between working to receive benefits that provide their children with care, and participating in the care that only they can provide because someone else providing it is cost prohibitive. My family is one of those last ones. I’ll be transparent for the sake of making this point.  I have an autistic son. And I make choices for his care based on cost. I still have to choose. And I’m a “one percenter.”

You see it on your Facebook feed regularly.  Someone’s page asking for help for their family who did nothing other then get sick. If your thought when you see one is that those folks “ought to have prepared better” then you have no idea how much catastrophic medical care costs, and how high the out of pocket limits are for standard medical plans.

Nothing in the name of liberty is the solution that my family dealt with in our painful journey with my mother. It was a journey that still haunts me to this day. Every day, millions of Americans, even ones with healthcare insurance, are forced to make decisions about medical care because of cost. The idea that politics and profit are the two dominant forces in how we care for our American citizens is tremendously painful for those of us who have suffered under the current system.  The counter-point playbook to public healthcare usually involves the argument that American  healthcare is better than any of the other countries that have public health care. And that’s true. It is. But not because it’s private. Like our military, our space program, our police officers and fireman, it’s better because it’s American.

American public programs put a man on the moon before color TV existed. American public programs sent the largest invasion force in the history of mankind over the beach in Normandy. American public programs created nuclear energy and the internet. These are the things we can do when we all agree they need to be done. Comparatively speaking, administrating and funding a public health care system-not really that hard. Unless of course you want nothing, in the name of liberty. I pray you have a different outcome then my family did. Because nothing is what you’ll get.