my dad spent his career moving things across the country, so he’s pretty intimate with tariffs. at dinner recently, he was talking about a story he’d been told when he was in college, and it kicked off this email exchange. i think we’re going to be working on this one for a long time.
the original story was about a room in DC in ~1970 that was full of government employees whose job it was to check tariffs. he was saying that there were 50 of them, and they only ever found one error in their checking, and it was some single trucker who made a typo. the moral of the story was wasteful regulation, government bad.
i just keep thinking about that story, and i had to do some digging because it just struck me so much.
sure, there were men in a room proof-reading tariffs. well, proofreading had to happen and we didn’t have computers to do that work yet. but you told the story as if they were useless, and never did any work, but that’s not what happened. lots of people depended on those tariffs for running all the things that have to move in this country. you yourself spent a lot of time staring at those documents! enormous portions of your job were built on them. and if anyone could publish a tariff, there needed to be some kind of central body who was proofreading them, because you can’t expect joe-schmoe’s-trucking to get everything right; tariffs are complicated.
so it’s appropriate that there were people who were proofreading them to make sure they were correct. but as it turns out (thanks, trusty google!), not all of those people were really sitting there only checking for teardrops (a symbol that signified a change in rate). they were checking all of it. and even if no one ever found a mistake save that one trucker (again, supposedly a funny story, but it’s not: it’s a constructed story intended to be told by politicians and businessmen so that people will believe that government is wasteful – more wasteful than any other business, and i’ll come back to that), which i don’t for one minute believe and as a man with critical thinking skills, i honestly don’t think you believe it either if you stop to think about it, you’re just retelling the story because it suits your bias and people with your bias or who aren’t going to think critically will laugh. but even if it were true, honestly, it might still be fine, because the knowledge that things will be checked means that people submit better work. and anyway, that stuff is still checked today too, just it’s done by computers so it doesn’t require a room of people anymore.
(oh boy, i was really straining with being positive there. :-/ )
any group of workers, whether it’s a private business or a government agency or even just one guy in his drum shop – any group of workers is inherently inefficient. time is wasted. things are done that didn’t really need to be done. we have a system that demands that everyone work 8 hours a day, but there isn’t actually 8 hours of work to do every day: sometimes there’s more, often there’s less. so there’s busy work. that’s just the nature of the system we have. not to mention there are bosses trying to cover their asses, or trying to manipulate situations, which means that workers end up doing unnecessary things – this is all stuff you have lived.
and heck even just trying to solve a problem often means going down the wrong path and having to back track – it’s all normal. so just because there is some inefficiency in government doesn’t mean it’s bad. it means it’s made up of humans.
i’m all for evaluating and trying to make things as efficient as possible, but that can’t be done when we’re all too busy trying to fight out whether regulation should happen at all, or with disingenuous people making regulation that’s intended to muck up the works so that people will think regulation is bad, or… we need to acknowledge the need for regulation and then we need to work together to make it super effective, so that it yields what we need.
the thing is, of all people, with family in and around the mines, growing up where you did, how can you not see that capitalism without rules kills people? you can see that, but you’ve created a barrier between your political affiliation and your lived experience. you’ve been taught to accept that it’s ok if there’s collateral damage as long as business moves forward. you absolutely know from your lived experience that to save a buck, a feed company would do whatever they could get away with, right up to the very line and maybe even just a bit over it, just right up to the edge of losing customers (and of course, when there are fewer and fewer companies to buy from, then even if a cow dies from bad feed, there’s nowhere else to get feed so you’re stuck!) – companies would do that if there weren’t regulations that created lines you can’t cross.
we were talking about coal regulations earlier this year – and you were hoping that things would go well for the miners instead of committing to voting for people who would make laws that ensure things will be safer for miners. we can’t hope that mine owners will take care of miners, that’s never going to happen. that movie at the lackawana coal mine visitors’ center is just burned into my memory, with the footage of the interviews with the mine owners…
yes, laws are imperfect, and yes, some regulations are written with good intention but without the appropriate expertise, or they get so compromised in committee that the result is suboptimal or VERY suboptimal (which again, is often intentional because then there is ammunition to say, look, this regulation is stupid, people who want regulation are stupid). that’s not a reason to do away with regulation, it’s a reason to create an environment that supports regulation so that we have the space to create GOOD regulation.
and the thing is, if everything we’ve been taught about america is true, then we should be able to have successful business AND value workers’ lives and dignity. we should be able to create things that are effective AND don’t hurt the planet. we should be able to create anything better than a two-stroke engine for lawn mowers, good heavens, don’t get me started on stupid stinky two-stroke engines! we should be able to do good work that lifts everyone up a little.
if we really have the greatest engineers and the greatest businesspeople and the greatest all the things, then why is it onerous to create products without hurting the environment? why can we not create all products like the scrubbers in the diesel trucks that spit out air cleaner than it went in? let’s apply THAT to all products everywhere – we could really engineer our way out of a lot of big problems, and create good jobs at the same time!
deregulation benefits people who are already rich, and as we saw with the tax cut they used to buy back their own stock (and demonstrably with every other time any kind of trickle-down experiment is tried), giving more money to rich people does not in fact trickle down.
and the thing is, you’re not rich! you’re super privileged, you have things that most people don’t have, you have a level of stability and safety and abundance that literally, you’re better than the top 10%. top 8% let’s say. but you’re not the kind of “rich” who benefits from this stuff. that kind of rich is nobility without the title – longstanding generational wealth, made not by the work of the wealthy person, but by the work of others. why vote the way that rich people want you to when all that will come of it is that they get richer and medicare will be less reliable and have more paperwork and that social security will be less reliable and have more paperwork and that rivers and air will be more polluted and, and whatever else.
maybe when they told you that story, you just believed it and said, wow, that’s terrible! and maybe that and a lot of other experiences – i mean, it was your job to argue for the corporation in court and even in congress – taken all together and not critically examined just led you into a certain end conclusion.
but you’re really smart! you have critical thinking skills! there’s no way that you should be falling for this stuff. you’re smart enough also to see nuance, to say, hey, the fact that this isn’t perfect isn’t an indicator that we should throw it away, it’s an indicator that we didn’t get it right yet – you have that kind of awareness in the shop. i think you can have it here, too. and i wouldn’t bother but that your vote actually counts for something because you’re in a swing state, and honestly, why bother spending all this time taking care of my brother’s children if you’re just going to leave them a world that is uninhabitable because instead of being strengthened, the EPA has been completely gutted by people who would rather save a few bucks, and because no one worked on climate change, and because we can’t have the kind of stable reliable jobs that you had because they don’t exist anymore (because turning employees into contractors is cheaper for business!) and…
after all: you raised me that it didn’t matter if i made the mess, or if i knew or didn’t know who made the mess, if i saw the mess, it was my responsibility to help clean it up. maybe you only meant that for like, in our own house, but that’s not how i interpreted it, and there’s a lot of mess out here.
so anyway, that’s what i wish i had said when you told that story, but i was too busy thinking OMG!! listening to it to get all these thoughts in order.
but we should talk more about this stuff! and we should read that history book together because even though it starts in 1974, i obviously don’t remember at least anything from the first half of it! i can send you one if you think it would be fun!
love you!
i really struggled to stay positive in this email. that holiday dinner was very difficult, and there was a lot to unpack, and it’s winter and it’s dark and it’s not easy to stay positive.
also, i think that positive is context dependent. i’m pretty sure that i can have a real and challenging discussion with my dad if my mom isn’t around, and i’m pretty sure that he can take it if i feel strongly, as long as i make room for him to respond and to feel strongly too. i’m pretty sure that he can not only handle some challenging statements but also that it would be mentally interesting to him – i’m not 100% certain, because we are usually only together if my mom is around, which drastically changes the nature of all conversations. but for 2020, i am committing to write to him once a week and see if we can do this.
and i might be right, because he replied today – i have never seen my dad type so much ever!
dad to me:
Wow, that’s a lot to digest and I still need to consider points but a few comments.
I agree that government regulation is necessary in cases where individuals don’t have competitive choices to allow market forces to do the regulation as with the BNSF railroad in Montana, etc. Industries like power companies and transportation companies were referred to as Public Utilities and were highly regulated. It did get to the point where innovation was stifled because if a particular power company came up with a money saving innovation all the savings went thru to consumers since rates were based on cost plus. The partial deregulation of electricity has reduced rates for pretty much everyone while retaining enough regulation to try to make sure people are protected from excessive rate increases or unsafe operations. Economic deregulation of the trucking industry has resulted in better service and lower costs for shippers right down to the individual level. Companies like U-Ship could have existed under the old ICC rules. Trucking is a relatively low cost industry to enter and any trucker can serve any industry so every trucker knows that, unless they perform they will lose business. Not to say there aren’t bad carriers (in ethical terms) but there always have been and always will be. Because the customer has a wide choice of ethical carriers the market will tend to weed out the bad guys.
The tariff readers we discussed were strictly involved with the trucking industry while it was still highly regulated. In the context of regulation at the time they did insure that the rules were followed but experience shows that the level of regulation was simply not necessary and continued to exist due largely to the amounts of money the railroads doled out to Congress to prevent truckers from competing more effectively against them. In the scheme of things, if the trucker who accidentally reduced a rate and forgot the teardrop reference mark lost some money, well that’s what he gets for not minding his business. In today’s world he would either proofread and catch the mistake or haul just a few loads and then go to his customer and explain that a mistake was made and future loads would move at the correct agreed rate. I have been down that road myself and worked things out easily. So I do think that while the men in that room were doing their job and likely doing it well, the job they were doing was simply not necessary and the 50 salaries plus benefits could have been better used elsewhere.
The government still regulates equipment safety issues and driver qualifications and I believe that is a good thing even though it took some effort to make sure my company was in compliance. That’s the trucking side. Railroads are a different story because in so many cases a given railroad is a monopoly for a shipper or group of shippers.
I would generally agree that economic deregulation has helped railroads and shippers alike. I could sit down with, say [a guy at a high level at a particular railroad] and brainstorm about rates that would work for both of us and, if we could agree, put the rate into effect almost immediately. He and I made our respective companies a lot of money in this way. Another time, we had an opportunity to buy materials from suppliers that would have required switching between two railroad service areas. [The aforementioned railroad] refused to make a connecting rate so we were locked out of that supplier and could only buy from suppliers served by the first railroad. We didn’t ask for an unprofitable rate, just a rate. Same situation when a large railroad sells a branch line to a short line operator with the proviso that, even though the short line connects with other carriers, the new short line can only accept and deliver traffic from/to the railroad that sold the line. The regulation structure that currently exists for railroads does give the regulators authority to address this but the way the rules are structured and the makeup of the regulators (Surface Transportation Board) are such that shippers big enough to have the resources to bring a case virtually never win.
So it is not so much a matter of should regulation exist but what type of regulation and how to fairly enforce regulation. Your comments about mine regulation illustrates the problem of enforcement. There are plenty of good regulations covering all aspects of mining but they are not enforced until after a tragedy occurs. Mine owners do cut corners and the industry sends a lot of money to Washington as well as, in some cases, money to local inspectors to “not see” some things.
Your animal feed analogy doesn’t work because there are still many, many feed makers both large and small so the farmer has quite a choice and won’t likely make a mistake twice. The farmer also has the choice and ability to make feed on farm and many do. Because livestock farming involves the human food chain there are some pretty good regulations in place regarding food safety although, as with mines, there are still issues with required inspections in processing plants.
As for mines of any sort, I do support most safety regulation but I dearly wish more effort and money would be put into making sure inspection are properly done and infractions cited and responsible parties punished. Frankly, I feel strongly that in a number of industries some CEOs need to go to jail for a few years in order to get the message thru to industry that there are lines that can’t be crossed. While I am on this soapbox, I believe that the Citizens United ruling needs to be revisited. Corporation should be considered individuals ONLY for the purposes of making and being bound by contracts. They are NOT individuals when it comes to political contributions. If industries are limited I guess unions should be limited as well. Maybe we should go to public funding for candidates. Say give presidential candidates $100,000 for primary period and $1,000,000 for final campaign. Lesser amounts for Senate and House. Make that the only money that could be spent and enforce it. That would rule out most of the so called issue ads but PACs that are actually ads for a specific candidate. Devil is in the details because all of this would be nearly impossible to enforce.
By the way, I am a believer in climate change and yes, humans are a factor to be sure. Whatever the time frame as we look at history, whatever living creatures were around had an impact, ie, dinosaur farts… We have likely accelerated things but in geological terms in probably not enough to matter. We need to do all we can to clean things up and, right now there is a lot of progress. We need to focus more on solar conversion and battery efficiency so we can have more battery powered items without having to build power plants and transport electricity. Batteries are really important because they would help make wind power more usable. Big 2 cycle problems now are the leaf blowers, weed wackers and chain saws. The motors are heavy so if batteries could be produced that would power these tools for relatively long periods, acceptance would be pretty quick. These days virtually all lawn mowers, lawn tractors, tillers, etc have 4 cycle engines and newer one are pretty clean.
Coal for most uses is being displaced by natural gas which will serve as a bridge to solar/wind/battery as the major source. Coal is still a major resource if we can just figure out a way to use it cleanly.
Whatever the causes of climate change, we need to admit that we can’t stop it. We might delay it by a few years but it is going to happen as it has in the past. While we are trying to clean up our messes we need to be figuring out how to live with what is coming. They used to grow wine grapes in Siberia and we may have to grow a lot more of our crops in Canada but whatever, we need to be figuring out this stuff now.
Fortunately, the climate change process is long enough so we can work with it if we don’t wait too long to come up with a plan.
Deregulation in many cases does benefit people who are not rich. Trucking deregulation made it possible for many people to enter the industry and allowed the more skilled people to create major operations. Schneider Transport was started with one man driving one truck. JB Hunt was created by a guy who owned a small rice mill and had a truck to deliver rice bran and rice hulls to Arkansas feed mills. At the time he was “comfortable” but not rich by any means. Deregulation gave railroads the ability to spin off poor performing branch lines to short line operators. In many cases these short lines provided far superior service and built business. In the process they saved rail service for the shippers on the line as well as the jobs of the former employees of the big railroad.
You comment that we have things many people don’t have. Well we lived a life that allowed us to have things. We made a lot of things and Mom’s ability to ferret out deeply discounted things or used things that we could use as well a a new item meant a lot. Because I learned how to fix things we saved thousands of dollars. I was fortunate to work in a basic, mostly ethical, industry and took advantage of every saving opportunity offered. To the extent that tax reductions for business helped the stock market do well we definitely benefited. Most 401K and IRA accounts are made up of mutual fund holdings and the mutual funds largely hold various stocks so when the value of stocks goes up average folks who don’t really know what they own suddenly have more savings. We probably gained 25% over the last 2 years. We also got help when Dad passed and left some stock to the four of us. With any luck we’ll be able to do the same for you and Billy.
So, to a larger degree that many people understand, a rising tide does lift all boats, even if not to the degree that it should. One thing that really does bother me is the structure of the really large multi national corporations. They have no loyalty to anyone except top management boards of directors and there performance bonuses. Boards tend to be interlocked and directors take care of each others. Top management people are often hired guys who don’t expect to retire form whatever company they are currently with so there just isn’t the long term outlook that should exist.
I guess I wish we could go back to whatever good things there about companies with the founders involved in management so, as my company owner used to say, that’s my name on that bag and on that truck so let’s do things right! If we make a product that meets minimum standards it is not good enough to have my name on it. Our company was big enough to have economies of scale but not so large that owners didn’t know the people working for them. The owners had worked in the mills as they grew up and their fathers owned it, and they knew practically everyone by name.
I also think top executives of mega companies get paid an obscene amount of money. Money that should go into everything from line workers pay to r&d for the future. Doubt we can do much about that but if a something wiped out all CEOs, etc making huge salaries, upper middle management would simply step in and things would generally go on. It would prove that in the majority of cases the top guys are simply not worth what they are paid.
But, people and companies can move. A few years back it became popular for the large corporations to buy a company in a low tax country like Ireland and move the parent company headquarters there to avoid the US corporate tax structure. When UK individual income tax on the very wealthy got very high in the ’70s and ’80s, the very wealthy moved to places like Switzerland. There may be ways to create a fair tax structure that would work but it won’t be easy. I frankly like the flat tax idea probably with capital gains treated as ordinary income. That won’t happen as long as big money flows into Washington. Haven’t heard from anyone who has a viably plan to stop that since any such plan would have to get thru Congress where the foxes are guarding the hen house so to speak.
OK my brain is hurting so I need to stop. We certainly do have some interesting topics of conversation. I love you so very much. Please take care.
wow. there’s a lot to unpack in this email. but there’s also a LOT to work with. it’s going to take me a while, probably the next whole month, but once a week i’m going to write back to a part of this email. i feel on one hand that there’s a lot of opening here, and on the other hand, that there is SO. MUCH. to de-propagandize and to rebuild. and also just to update – things aren’t like they were. so i guess, i’m hopeful.
if you’re following along, this was the email that lead to this blog. the emails before this happened through 2019. today is the first of January, 2020, and my dad sent this reply this morning. this is the first time that i feel like i’m getting real traction, and we’re going to get somewhere – or that there’s a real opening to get somewhere. so i’m sharing it with you in case you’re having similar conversations too. good luck to all of us.