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A New Birth of Freedom

Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate—we can not consecrate—we can not hallow—this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.

Abraham Lincoln

One hundred fifty seven years ago, in a little over two minutes, Abraham Lincoln delivered the most powerful speech ever given on this continent. In these 272 words, he reminded all of us of what has made the American concept exceptional.

In 1863, Mr. Lincoln had taken the first step toward ending slavery in this country. Undoubtedly, this was part of what inspired his “new birth of freedom.” But just below the surface of his words, we can find the face of Freedom’s homely twin – responsibility – “who here gave their lives that that nation might live.”

In our highly polarized politics at the national level, both sides claim to be for “Freedom,” although they seem to be worlds apart in what they think Freedom is. This polarization is filtering down to our communities, impacting their resilience. To me, our Bill of Rights provides an excellent operational definition of Freedom, especially the First Amendment. We must be free to worship (or not) as we wish. We must be free to peaceably assemble. We must be free to believe as we wish and to express those beliefs. In the Constitution, these are couched in terms of prohibiting the federal government from denying these rights.

But it is just as important that we recognize that no individual or group has the right to abridge those freedoms either. “Cancel culture” does not exist in a society that values freedom. A recent survey found that one third of Americans are unwilling – even afraid – to express their political beliefs. This week, two poll watchers in Michigan were vilified, their families threatened, and were finally browbeaten into accepting election results that they believed were tainted. Communities where one side does not allow opposing views to be expressed cannot engender the trust needed for resilience.

Events such as the one in Michigan happen because some of us have forgotten Freedom’s twin – Responsibility. There’s nothing sexy about Responsibility, but it is essential for community resilience. By accepting the good things that come from being a part of my community, I incur a responsibility to the community, especially in times of crisis. Over the last few years, but especially in this time of Covid, too many of us have forgotten that our freedoms bring with them responsibilities. I am free to express my beliefs as long as they don’t harm others, but I also have a responsibility to protect others’ freedoms even if I don’t agree with them. I am free to express my opinions (e.g., that lockdowns are essentially worthless), but I can’t yell “Fire” in a crowded theater. And while I might not want to wear a mask or a condom, I have a responsibility to avoid passing on whatever I might have to the rest of the community.

Just as in 1863, many of our communities – and our country – are riven by very different conceptions of government and governance. If our communities are to be truly resilient, we must repair our social fabric, and bind our communities’ wounds. Let us heed Lincoln’s words and be midwives to a new birth of freedom, and responsibility.

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Visualizing resilience

Standing knee-deep in a river and dying of thirst.

Joe Cocker

As I’m writing this, we’re at the end of our election cycle in the US. For months, we’ve been bombarded with snarky snippets aimed at getting us to vote against the other guy, not for somebody. No matter our political affiliation, I think we all sometimes feel we’re in a river of factoids, looking for the truth.

The same thought applies to community resilience. Since I began working in the field, we’ve seen an explosive growth in the knowledge base. Unfortunately, this has not been matched by the application of the knowledge in practice. There are several reasons for this:

  • Accessibility. Much of the knowledge base is captured in academic journals that are never seldom read by anyone other than academics; and even if read, academic jargon and the creep of politics into much of the social science literature turns off many practitioners;
  • Lack of a framework. There isn’t a generally accepted theory of resilience that ties the many disparate strands together;
  • The resilience to __ problem. Practitioners are most often interested in strengthening specific domains and mitigating specific threats, not something as nebulous as fostering a community’s resilience (i.e., practitioners are most interested in the resilience of X to Y). Much of the literature treats resilience as an inherent attribute of a community, ignoring specific threats;
  • Lack of community-specific information. While there are several excellent presentations of data at the state or county level (e.g., Susan Cutter’s maps), there is much less at the level of individual communities;
  • Need to “kiss a lot of frogs.” There is so much information out there (and more being published daily, it seems) that finding that one key paper that will unlock the door to desired solutions requires time and effort that no few practitioners have.

Three years ago, Brian Dabson introduced me to an approach he was developing for the Missouri Transect Project. At the time, I was immersed in the ANCR Benchmarking effort, and – although I praised the overall conception and sent him some suggestions for making it better – I essentially forgot about it. At almost the same time, he left Mizzou for North Carolina (as good an excuse as any to not follow up on my “helpful” suggestions!) and his erstwhile co-workers appear to have dropped the approach as well.

Three months ago, I was asked to consider how to provide meaningful measures for the resilience of small communities, especially in rural areas. I expanded my writ a bit by looking at Opportunity Zones as well. In going back through all of the material I’ve accumulated, I stumbled across Brian’s excellent work. Below, I present my adaptation of Brian’s approach (with apologies to him where I’ve strayed from his original conception). The approach is intended for use by practitioners to determine where to invest scarce community resources.

The concept is deceptively simple. It starts with the concept that the purpose of a community is to carry out common functions for the members of the community. In general, the business of the community – carrying out its common functions – is performed through the consumption and production of community capital – financial, human, social, institutional. Thus, one way to look at a disruptive event is as a disruption of a community’s normal pattern of transactions (thanks due to Dan Alesch for this idea). Recovery then means establishing a new pattern of transactions, i.e., a New Normal. This enables us to assess a community’s resilience in terms of capital – its capital at risk vs the dispatchable capital available for recovery, from a given disruptive event. Examples of fixed and dispatchable assets:

Disruptive events might be natural disasters, or economic crises, or the return of the coronavirus. As discussed in a previous post, the “weaknesses” at the potential point of attack corresponding to the threat comprise the susceptibility. Generally speaking, these are the weaknesses of fixed assets to the threat’s attack. An attractive feature of this approach is that it can be applied to a community system (e.g., housing, water), a neighborhood, or an entire community.

One of the thing that I found very attractive in Brian’s original concept was the way he treated indicators for both susceptibility and recovery. For the Transect Project, he converted each indicator to a value between 0 and 1, by dividing by the range of values. As is generally done, he took the average of sets of indicators to come up with overall values for susceptibility and recoverability. An unintended consequence of this is that this enables us to use qualitative data as well.

For example, if we’re interested in the recoverability of a community’s electric power system, we might have quantitative data relating to financial reserves of its power authority. We might not have quantitative data on its susceptibility to a natural disaster, but through survey data or other means we could come up with a “good, bad, indifferent” rating which we could fuzzify onto a 0 to 1 scale. We then plot recoverability (Y) vs susceptibility (X).

This approach can be usefully applied in several ways. For example, it can be used to look at several threats to determine where to put mitigation dollars. In this figure, I’ve notionally looked at flooding, a health crisis and an economic crisis for a community. For susceptibility to flooding, I would include the condition of houses and other structures, and FEMA flood zone information (for both, there are useful quantitative and qualitative indicators). For recoverability, I would look the fraction of residents living in poverty, whether there were sufficient construction professionals. I would do similar things for the other disruptive events. The results might then look like


In this case, it appears that it might be more useful to invest in mitigating a health care crisis. While there is slightly greater susceptibility to an economic crisis, recovery from a health crisis is much less certain. While recovery from flooding is also “iffy,” a damaging flood is much less likely. Miami provides a real-world example of the latter. Many of the poorer sections of the city (i.e., those with less resources for recovery) are built on higher ground (i.e., less susceptible to flooding).

This approach can be used in other ways as well. For example, flood mitigation funding for Miami might better be used in those low-lying areas with the lowest incomes; i.e., the approach can be used to determine where best to use targeted mitigation money. Similarly, the approach can also be used to determine how to invest. In this case, the different indicators for recovery are compared, as are those for susceptibility. Those that most greatly increase the distance from “red” to “green” are those most likely to have an impact. But since there are costs associated with any action, communities will most likely want to do a “distance / dollar” type calculation. In my next post, I’m going to look at a method a community can use to determine what resources are needed for recovery.

I like this approach for several reasons:
• First and foremost, it is visual. There’s not a lot of numbers or complicated words for the layman to try to understand. If you’re in the red, you want to get in the green.
• Unlike the other common visuals – maps, I can look at how well my community (or my neighborhoods, or my water system…) will handle all of the threats I’m worried about. This makes it easier for a community to prioritize its investments.
• Because I’m looking at all of the community capitals, I can also consider the impact of non-financial investments, and of investments made by all parts of the community. It allows the local government to look at the impacts of investments made by non-profits, businesses, and of “capital stacks” on recoverability. For example, if there were insufficient construction professionals, a partnership could be formed between construction companies, local unions and a community college to begin to fill the need.
• Finally, its extensible. As we learn more about how communities actually recover, and the relative importance of various factors to susceptibility and recoverability, we can add factors or throw out others or learn how best to combine them.

My goal – as always – is to find ways to help communities strengthen themselves. Knowing which strengths are relevant to a community’s ability to withstand or recover from the threats it faces is a crucial first step. That knowledge is the key to taking action to become a stronger – more resilient – community.

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Of Ice Storms, Interdependencies and Impacts on Running a Bar

With apologies to the spirit of Finley Peter Dunne.

We are all caught in an inescapable network of mutuality, tied into a single garment of destiny. Whatever affects one destiny, affects all indirectly.

Martin Luther King, Jr.

I originally posted this in 2014, after a rather devastating ice storm hit the southeastern US.  The essential conclusion is that our interdependencies can lead to a cascade of consequences from a disruptive event.  While a community’s web of interdependencies can be a source of strength it also inevitably introduces new vulnerabilities.  We’ve seen this in spades with Covid-19.

This weekend I was sharing a bottle of wine (or so) with my neighbor Dooley, who owns a small pub.  We hadn’t seen each other since before the ice storm which had knocked out power for a couple of weeks, and he asked what I was doing now.  When I told him a little about my work in resilience, and especially when I mentioned interdependencies, he looked at me as if I was some kind of freak and said, “That’s all well and good, but it’s way too [expletive deleted] Ivory Tower for the real world.”  So, with the courage born of three or so glasses of wine, I tried to prove the practical importance of resilience to him.

“You’re a small businessman, right?”  “Yeah.”

“We live in South Carolina, right?”  “Well, duh [Sometimes Dooley is not the most sparkling of conversationalists].”

“Of all the things in this community, what’s probably the most important to your business?”  He looked at me as if I was an idiot and said, “My customers, of course.”

“Okay, but what is the most important thing besides your customers?  What service do you rely on the most to keep your business open?”  “I don’t know, electricity?”  “Bingo.  Electricity – keeps your beer cold, your customers cool, and your business hot.”

“So?”

“What happened to your business when we lost power during the ice storm?”  “I couldn’t open.  In fact, since my rent’s so high, I had trouble making ends meet for a few weeks afterward.  Fortunately, Glen and Shirley [Dooley’s bartender and waitress] were willing to let me be a little late in paying them.  The landlord – that [expletive deleted] – wouldn’t cut me any slack.”  

“And how are you doing now?”  Well, I’m back on my feet; in fact, I’m actually doing better than before the storm – Bill’s Brews and Bratz didn’t make it so I’ve got some new customers.”

“And what happened to Bill’s bartender?”  “I think he left town.  I’d have liked to hire him – he came by looking for work – but the new business wasn’t that good.” 

“See, that’s why interdependencies are so important.  You depend on the electricity being on – if it isn’t, you can’t open.  The folks who work for you rely on you being open for their livelihood; but that means that they also depend on the electric company because you do.  If you bought a generator, you might not depend directly on the power company, but you would depend on a distributor for fuel, which would probably mean that you’d now depend on the power company to power the fuel pumps.  And the electric company depends on its customers to pay their bills, otherwise the company couldn’t pay its employees and suppliers.”

Dooley – always gracious in defeat and articulate to fault – grumbled something like “Humph, rhubarb, rhubarb ratz a fratz.”

I’ve portrayed what I was telling Dooley in the figures below.  In the first, I’ve shown a sort of general picture of a community’s electric utility that experiences a disaster.  There’s an initial loss of capacity, followed by a gradual return of service to its customers.  I’ve also shown a red region, indicating that without power small businesses will begin to fail.  The figure is meant to indicate that some smaller businesses actually fail.  As the outage goes longer, more and more businesses will fail.  You may notice as well that eventually the capacity of the electrical system goes back to what it was before – no more nor less.  That’s because a utility almost never adds new generation in response to a disaster.

In the second, I’ve plotted gross sales for the community’s small businesses.  Sales fall during the service outage, because many of the businesses aren’t open.  And, as indicated in the first figure, some never reopen.  Thus, gross sales plummet. Sales probably won’t fall in proportion to the number of businesses that haven’t reopened, because some of the competitors of the closed businesses in the community will reopen (or stay open if they have a generator) and capture their customers, just as my friend Dooley did.  I’ve plotted small business activity in terms of gross sales because that’s what businesses use to pay their staff.  You may notice that the figure suggests that the workforce is even more vulnerable than small businesses.  The businesses, at least, can lay off one or more of their employees.

In the third figure, I’ve plotted the workforce, expressed as employment.  As you can see, it’s taking a much longer time for this part of the community to recover.  Even after the electricity gets turned back on, it takes a while for entrepreneurs to open new businesses to replace the jobs lost.  I’ve used the different colors to suggest another step in the cascade:  the local government may be able to build up a reserve fund when employment is high (green) through taxes on payroll and other economic activity; may just break even at somewhat lower levels (yellow) of employment; but high unemployment will likely bring with it a higher demand for community services and lower taxes, meaning the government will be running in the red.

As Dooley and I discussed later, each part of the community can do something to reduce the impacts.  Small businesses could buy generators if they need them or buy business interruption insurance for lost revenue.  That shrinks the red region in the first figure. The utility could bury its lines, pulling the black line away from the red region.  Businesses are just as vulnerable, but the likelihood of a loss of electric service is reduced.  Workers could save so they can live without a paycheck if necessary, or gain a diverse enough skill set to be more broadly employable.

We have seen the same kind of cascade of consequences caused by our response to the pandemic.  Our lockdowns and social distancing requirements closed small businesses which didn’t have the financial reserves to survive and recover.  At one point, 20% of our workforce was without jobs.  Local and state governments were – and are – operating in the red because of a lack of revenue (The “stimulus” spending by the federal government has helped tide many (most?) of the displaced workers over, but this isn’t a sustainable solution.).  One of the biggest challenges facing governments at all levels after this election is implementing policies to mitigate this type of disaster.

An ice storm is not a hurricane, or an earthquake, or a terrorist attack.  In fact, ice storms are pretty common in many places across the country.  Resilience is not just about recovering from disasters.  Resilience is really about realizing that change is inevitable, and that our interdependencies – our connections within and outside the community – can amplify the impacts of disruptive events. Community resilience demands that we recognize those possible impacts, and let that recognition point us to a more secure future.

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Covid-19: Disasters Have Direction

You can be sure of succeeding in your attacks if you only attack places which are undefended. You can ensure the safety of your defense if you only hold positions that cannot be attacked.

Sun Tzu

This is an updating of an old post.  The original did not have any specific examples; I think Covid-19 provides a good one.  I’m sure the concept “Disasters Have Direction” is obvious to many of you, but I’ve never seen it articulated.  As I try to show in the discussion of the pandemic, it can be a useful construct as we think about a community’s resilience.

For a few years, FEMA and DHS have championed the idea of an “All Hazards – Maximum of Maxima” approach to planning.  The basic premise is that if a community plans for the worst of the worst, then it will be prepared for whatever may actually happen. This is a deceptively simple tautology that I think deserves a little more analysis than it usually receives, especially in terms of community resilience.

Let’s start by looking at an idealized community.   A community can be thought of as an ecosystem.  There is a “human layer,” made up of individuals and families.  There is an institutional layer, consisting of private businesses and other economic institutions, and all of the other “human-serving” organizations in the community.  Then there is the physical, environmental, layer – containing the built and natural environment.  All of these are held together by the social capital within the community (some may argue whether the physical layer is bound to the community by its social capital, but that’s a subject for another post!).

Of course, this is an ideal community; real communities may have a strong economy but be weak in the human element.  Some have a decaying infrastructure but a flourishing natural environment.  Thus, we can depict a real community as follows.  This real community would be relatively weak in terms of its community institutions, have a somewhat stressed natural environment, but have a robust built environment.

Now let’s assume the community is hit by a pandemic.  There is no immediate physical damage.  Any that occurs most likely happens because the humans who normally maintain things –infrastructure, for example – are not able to do so.  This disaster has attacked individuals and families, and – because they are closely tied to the human layer – the community organizations that meet social needs.  For a pandemic, hospitals, clinics and the public health department would certainly be included.  Since, in this case, there is relatively little capacity in the community institutions (e.g., a rural community), they will be particularly hard hit – most likely overwhelmed. 

But what happens in a natural disaster?  The initial impact on the community is going to be on the physical layer; buildings are going to be blown down, debris will be strewn about, flooding may occur. The other parts of the community will be impacted because of these physical blows.  In our notional real community depicted above, there would be relatively little damage done to the built environment, but the natural environment would experience much greater damage (at least in relative terms) because it is weaker. 

A severe economic downturn attacks the community from another direction.  Businesses lay off workers; some close.  Many individuals and families experience severe economic hardship.  There is no immediate impact on the other parts of the community ecosystem.  Eventually, however, all will be affected.  In our example community, the economic impacts are less severe than for a community with a weak economy, or already burdened individuals and families.

Thus, disasters have a direction, as shown in the next graphic. It must be stressed that the graphic points out the initial point of attack.  If the magnitude of the initial impact is huge, or other parts of the community are weak, then the disaster is likely to ripple throughout the community with cascading impacts.

This simple concept is consistent with the idea that vulnerability to a threat depends on weakness at the point of attack.  This is shown in the next figure.  Threat X indicates a potential health crisis (e.g., a pandemic), while Threat Y is primarily a threat to the community’s economy.  As depicted, Threat X is more likely to lead to disaster than Threat Y because the greater relative strength of the community to withstand an economic downturn.

This simple picture of a community also has meaning in terms of recovery and community resilience.  If community resilience is measured by how fast – and effectively – resources are deployed to achieve community restoration and recovery, then the social capital within the community plays a crucial role.  Suppose Threat X above actually materializes.  The vulnerable part of the community has few available resources.  It is the community’s social capital – its connectedness – that provides the pathways for resources to be shifted within the community.  It is the community’s social capital that determines whether resources from outside the community are effectively brought to bear.  In a very real sense, it is the community’s social capital that determines whether the community actually recovers from disaster.

If we look at Covid-19 through this lens, clearly the pandemic attacked individuals and families, and community health organizations.  Its magnitude varied from community to community, but – initially – dealing with the pandemic exceeded the resources (e.g., PPE, ventilators) available to most communities, i.e., it was a disaster and it had a direction.  Communities had to rely on their connections (bridging and linking social capital) to others in the region and to the state (and, for the biggest cities, to the federal government) to get the resources they needed.  In a later post, I’ll outline a methodology that, if used, could have reduced the impact of the pandemic at the community level.

Our response to the pandemic triggered an economic disaster.  For those of you who remember my old post “Of Ice Storms, Interdependencies and their Impacts on Running a Bar” I pointed out that the number of businesses which could reopen after a disaster depended on how long they were closed.  In some places, the Covid-19 lockdowns lasted for months – and the economic consequences have been devastating.  I intend to update that post as well and expand upon it a little based on the knowledge we’ve gained from the pandemic.

Dan Alesch once said that we recall a disaster by the name of its triggering event, but remember it because of its impacts.  If that’s the case, Covid-19 will join the Dishonor Roll with Katrina, Deep Water Horizon, the Great Recession and so many others.  Each of these disasters were daggers that first pierced specific parts of the community, i.e., they had a direction.  Their impacts were determined by communities’ strengths at the point of attack and the force of the dagger’s thrust.  A community’s social capital determines how rapidly resources can be brought to bear to heal the wounds.  However, those who are not connected – without significant social capital – have to recover on their own:  resources won’t flow where messages don’t go.  In this way, the community’s social capital plays a crucial role in its recovery – and thus is a key component of the community’s resilience.

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Community Recovery in the Time of Covid

Sometimes things fall apart so that better things can fall together.

Marilyn Monroe

Our communities are going through tough times right now. All have seen disease and death damage their social fabrics. Some are experiencing physical devastation due to nature’s wrath and men’s anger. Sadly, we know that more death and destruction is inevitable. Our response to this has led to economic and educational chaos, and stunted lives.

But we also know that eventually these will ebb and end. We will stand on the rubble and realize that our communities must now recover – must now reach toward a New and, hopefully, Better Normal. We know that for some, recovery will require more resources than they have to give. Communities will look to state and federal governments to provide them the resources they lack. But what resources will our communities actually need?

Unfortunately, there’s no single answer. The damage done to many of our communities covers the spectrum from their physical environments to their social fabrics and their economies. Just as the damage experienced by communities will vary so to will the resources needed for recovery. Some communities will reach for any funding that they can, and sort of haphazardly aim to rebuild what was lost. But for those with the greatest damage, “You Can’t Go Home Again.” This time the magnitude of the damage is too great. For them, trying to rebuild the past has no future.

Other, more resilient, communities will recognize that the changes wrought by Covid and our response are so great that they require almost a reinvention. They will make the tough decisions to rebuild their communities to be “Future Fit,” ready to face whatever adversities the future may bring. They will take responsibility for their own recovery and develop plans to reach a New and Better Normal. And through their planning most will recover more rapidly than those who don’t plan.

While those plans will vary in detail, on another level they will have in common a focus on functionality, infrastructure and assets. In terms of functionality, they will likely start with an assessment of the damage to the community’s infrastructures. They will then look at how the existing infrastructure and assets will be used to achieve recovery. While these plans are likely to differ in the terms they use, I think it’s useful to look at their common focus through the lens of the Seven Capitals.

Social. In the US, our social fabric (our social infrastructure, if you will) has been badly frayed, especially in many of our major cities. Rioting, aided by masking and lockdowns, have prevented our social networks from the message-passing that is so vital for recovery of our communities – as I’ve said before, “Resources won‘t flow where messages don’t go.” And I’m not just talking about PPE and medical supplies. Although we don’t talk about it enough, most people depend on their networks of friends, neighbors and acquaintances to find out about job opportunities.

Unfortunately, while academia has established the importance of social capital, the damage to it is being ignored by many politicians. Recovery will require opening the places we gather as quickly as possible, so that we can reestablish our personal networks. That means churches, libraries, schools, parks and recreational venues. That also means getting rid of masks as soon as we can – they facilitate anti-social behavior. And most importantly, getting rid of those barriers that are keeping families apart.

Human. Even before Covid-19 reared its gnarly snout, our educational system had some serious problems. Educational “attainment,” especially in our de facto segregated inner city schools was so bad that it would have had to improve to be abysmal. Look at Baltimore – proficiency in reading and math hovering just slightly over 10%, but with a 70% graduation rate. And DC bordering on the criminal – a whopping 20% proficiency in reading and math among eighth graders, while spending twice the national average per pupil.

But just getting back to that “Normal” is proving challenging. While the “hybrid” model (part in-person, part online) sort-of, kind-of works for middle class kids, inevitably the disadvantaged (esp. in rural areas) will fall behind. We need to get the schools fully open now. But that will not absolve us of fixing the damage the lockdowns have already caused. If you can’t read and can’t do basic math, you can’t get a job to support yourself, let alone your family. One way to approach this is to task the federal Senior Corps with providing educational mentors for those who are struggling. This may also be a business opportunity for some of those out of work.

At the same time we’re taking care of our kids, we need to take a hard look at the skills of our out-of workers. These folks, in general, have developed the life skills to hold down a job. Most of those eventually will find similar work. But many won’t – a lot of jobs are gone, especially those in small businesses. We need to beef up our infrastructure for coaching, redirecting and retraining these once-and-future assets to our society.

Economic. Overall, the US now has a “90%” economy – about 10% of our labor force is out of work. Our goal should be careers, not simply jobs. That means businesses aimed at today’s and tomorrow’s needs, and workers with skills to match. Local government has a small role to play (as I discuss below) but ultimately economic recovery will be accomplished through the actions of innovators and entrepreneurs creating careers, and workers willing to learn new skills.

But that’s not to say that businesses, especially small businesses, don’t need help – many do. Professional and business associations should play a major role. First and foremost, small business owners need coaching as they make the tough decisions about whether and how to relaunch. Damage assessment is a skill that they seldom need, yet it is crucial to these decisions. It may indicate that the customer base isn’t there, or that a new business model is needed. Small business owners also often need help with the paperwork for SBA loans. Most professional associations already are providing guidelines for protecting the health of customers and employees, but they can do more.

Cultural. Anyone who watches the news has to be worried about the cultural chasm that seems to be widening in our country. We’ve always had the elitists who believe that government can solve all of our problems. We’ve always had the anarchists who believe that the only answer to our problems is the complete destruction of society as we know it. In past decades, the sensible middle – those who recognized our problems and worked to implement practical solutions – was strong enough to hold us together in this ideological tug-of-war. I’m not so sure that’s true any more.

If we are to recover our culture, we must first once more define it for ourselves. That means rediscovering our common values – freedom (and its homely twin, responsibility), family, the rule of law, equality of opportunity. That means regaining confidence in our own ability – that of each one of us – to make a difference in our world. That means recapturing our history – America the Aspirational – and our ability to dream. That means looking clearly and critically at our world, not through red- or blue-tinted glasses, but through the lens of our common values. And when we see situations not consistent with those values, once more working for the common good.

Doing all of this requires time and starts with small steps: opening churches, museums, art galleries, recreational venues and, yes, even bars. Rebuilding our culture will require that we reestablish our social networks, especially our ability to repair and extend those networks. The task of community rebuilding and recovery, if done well, will strengthen the sensible middle, and thus strengthen our cultural bonds.

Institutional. It is clear that many (most?) of our communities are going to need rebuilding (if not reinvention). That effort is going to require planning and resources. Since entire communities have been impacted, the whole of these communities needs to be a part of recovery planning, not just government. Further, all must recognize that while there likely will be more federal and state aid, ultimately recovery of the community will depend on how well the community can mobilize its own resources – financial, human and social.

For some communities, some sort of long-term recovery committee will move the community to a New Normal. Ideally, the committee will include all of those who can mobilize resources to get things done. Its most important job will be to “define victory” – determine what a successful recovery is for the community. It will integrate local (not just government!), state and federal resources. A part of this will be finding “patient capital.” It will act as an information hub, letting the public know what businesses are open, and where there are job openings. It will act as an economic gardener, focusing its attention on new and existing businesses looking to grow. Working with both local business and local government, it will flatten some of the regulatory barriers (e.g., licensing/permitting, unnecessary zoning restrictions, environmental reviews) to the birth of new businesses. The committee will also report on progress to the public. After a disaster of this magnitude, recovery will take years not weeks, so keeping the public informed is essential.

Built. Some locations have experienced significant damage to their infrastructures (e.g., from wildfires in the western US and tropical storms in the southeast). We know the drill for recovery – sort of. But if the New Normal is to be better than the old, then we may need to rethink the physical infrastructure, particularly in our bigger cities. I’m not a big fan of Governor Cuomo, but his ideas for making New York City both more livable and “socially distance-able” make sense. But what the events of the last few months have really highlighted are the infrastructure needs of our rural communities. Many of our responses to the pandemic have greatly stressed our – already fragile – rural health care infrastructure. And as I’ve noted above, we need to expand our internet coverage to include everyone, especially those in our rural areas.

This post is much longer than normal (I apologize!) but I could have written even more for each of these. Recovery from the pandemic will be a long slog. We cannot claim to have recovered until we’ve rebuilt all of our infrastructures (the assets of our community capitals) and have them functioning again. While government has a role to play, our communities’ recoveries won’t depend on government’s actions (although failure to recover may). Ultimately the recovery of my community, or your community, will depend on whether you and I – all of us – work together to achieve a New Normal. Our goal must be “Future Fit” communities, ready to face whatever adversities and to seize whatever opportunities the future may present.

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Law of Community Momentum Revisited

Disasters accelerate existing trends.

Joe Riley, former Mayor of Charleston, SC.

Every body persists in its state of being at rest or of moving uniformly straight forward, except insofar as it is compelled to change its state by force impressed.

Isaac Newton (translated from the Latin in wikipedia)

Remember back in high school physics when your teacher droned on about “a body in motion tends to stay in motion; a body at rest tends to stay at rest.” This past week as I was looking at some data relating to migration away from cities, I remembered an older post I wrote – about something I called the Law of Community Momentum. I developed the concept that a variation of Newton’s Law of Conservation of Momentum might help explain Mayor Riley’s “Law.”

I stated the Law as “A community’s trajectory will not change unless some force changes its path.” This says that if a community property has some sort of clear trend (e.g., loss of population, economic growth) that it will continue that trend unless or until some change occurs to alter the community’s path. This means that if the community is on a downward trend, then a negative force is likely to accelerate the trend, and its converse. In this context, a “force” may be a natural event (e.g., a hurricane) or an intentional human action (e.g., investing in the community, making policy changes). Certainly the pandemic and the concomitant social unrest have exerted tremendous force on all of our lives. They are accelerating change across our communities.

Let’s look at a few examples of how a force can accelerate an existing trend. Over the last decade, videoconferencing had slowly matured and made some inroads in both business and education. In fact, when I started teaching in 2013, I had to learn how to teach online (as I’m sure my former students will attest, I was only sort of successful!). Over the last 15 years or so, governments and businesses have increasingly used some form of videoconferencing. Now, however, online interaction has virtually taken over education. Zoom and its siblings have not only changed how we do business but made drastic changes in our social interactions.

Over the last decade, the populations of New York and Illinois have been slowly decreasing. More recently, California has also begun to see a net outmigration. High taxes and arguably poor governance have “encouraged” those who can to leave, especially from urban areas. The pandemic and social unrest have changed this trickle to a stream – trucks are carrying people’s possessions out of these states at an accelerating rate – now at least twice what it was last year.

The parishes in the New Orleans metro area provide several examples. The city itself (Orleans Parish) has seen declining populations since 1960. Katrina (a most negative force!) accelerated that trend. Tammany Parish has seen continuous growth in population over the last 15 years – Katrina affected this only slightly, bending the curve somewhat downward. The stats for St. Charles Parish tell a similar story. One of the hardest hit parishes – St. Bernard – also experienced a population decline during the 2000’s. Katrina accelerated the trend and it now appears that the rate of decline has increased. The same holds true for Jefferson Parish.

Greensburg, KS, offers more examples. Its population had been slowly declining since 1960 when it was hit by an EF-5 tornado in 2007. Housing prices and average income had also declined. The city’s population was immediately halved, and continues to shrink.

Newark, NJ had experienced a population decline since the 1940’s, amid problems caused by “White Flight” and ineffective and/or corrupt politicians. Its overall decline – especially in providing public services – mirrored that of Detroit. Under then-Mayor Cory Booker (2006-13), the population decline turned around; public services improved; investment began returning to the city. This shows that purposeful action aimed at overcoming existing trends can, in fact, change a community’s momentum.

One more example – Camden, NJ. When I was growing up in the Philadelphia area, Camden was a basket case. Unsafe to walk the streets; people fleeing to the suburbs; high unemployment and low quality of education. City leaders took some highly nontraditional steps (e.g., reconstituting the police force) to change the city’s trajectory. As a result, crime is at a 50-year low; unemployment (at least prior to Covid-19) was at its lowest in three decades; high school graduation rates were up 40%; billions of dollars were being invested in the city; its parks were providing social and recreational opportunities that would have been unimaginable two decades before.

All of these examples show that a community’s trajectory is not its destiny – while a disaster may accelerate negative trends, good leadership can help the community recover and perhaps even thrive. Yet, in this time of the virus, I have to ask – what will become of those communities that do not or cannot arrest their trends? Whither Seattle, Portland, San Francisco? Recovery requires purposeful action – investment of money, people’s time and skills, and mobilization of the entire community. Will these communities be able to act purposefully to reverse their current trajectories?

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Economic recovery – sort of

These are the times that try men’s souls.

Thomas Paine

The pandemic and protests and civil disorder continue to assail both the social fabrics and the economies of our cities, states and nation. Over the last few weeks, I’ve been following an interesting set of maps and graphs detailing the ongoing evolution of the US economy.*

The graphs and maps are focused on consumer spending, and based on private sector data (e.g., credit card transactions). Thus, they do not directly reflect business activity (although the team has separately analyzed some data relating to business activity). They also are significantly distorted by government initiatives designed to mitigate the economic impacts (more on that below). The data is broken down into seven economic sectors** – by state and county, and also includes data for 50+ metro areas. Data are also reported on a national level for consumers living in high, medium and low income areas. In the following, let me give you a sort of high-level early-stage summary on the recovery of consumer spending (based on data up 6/26/20).

Total consumer spending is still down by about 7% since the group’s January baseline. However, that total is misleading – spending on Arts, entertainment and recreation and Transportation is still only abut half of the baseline, with a very slow trajectory toward recovery. It may take years for these sectors related to tourism to recover, especially Transportation. Spending on Restaurants and hotels is also still down by a third nation-wide, but with a better trajectory. Health care spending is down 12%, but seems to be recovering well. Spending on Apparel and merchandise has essentially recovered, though the data does not reflect shifts from storefronts to online suppliers. The biggest surprise is Grocery spending – up 12%, probably reflecting eating at home vs dining out. This is highlighted by data from March: Grocery spending spiked at +73%!

Another surprise is in who’s not spending – consumers in affluent areas are spending 12% less than in January. Middle income areas are seeing a drop of only about 6% in spending; while there is a negligible drop in less affluent areas. Other data collected by the group indicate that small businesses in the more affluent areas are also being harder hit than in other areas.

Looking at the data at a state level, mid-America is doing the best, with generally increased consumer spending; Tennessee having the largest increase (5%). West Virginia, New Hampshire, Idaho, Hawaii and Maine are also seeing somewhat increased consumer spending compared to January. Both coasts are doing more poorly, especially the West Coast. Consumer spending in Rhode Island and California has lagged the worst among the states.

Looking at the metro areas, there are two surprises: Jacksonville and Nashville. Jacksonville’s consumer spending is up over 5% compared to January; Nashville’s is off 33%(!). Nashville is particularly surprising given that Tennessee in general is doing rather well. San Francisco is also lagging badly, as are the other California metro areas as well as DC.

A few other observations about the data:

  • Iowa is the only state which has seen a decline on spending for groceries (11%).
  • Nashville saw the biggest drop in Transportation spending – 80%, and it’s staying flat.
  • In terms of Health care spending, the southern tier of states has recovered more than the northern tier; poorest performing is Vermont, off 52%.
  • In general, spending in rural areas is recovering more rapidly than in urban areas; and several rural counties actually saw increased consumer spending.
  • There is one aspect of the data that I find fascinating, but can’t explain: almost everyone one of the curves bottomed out in the period 3/28-4/17. However, in each case, there were two dips – one around 3/30 and another around 4/15, with slightly increased spending in between.

Here’s my takeaways:

  • The data shows great disparities in terms of geography, economic sector and income group. When I add in the data not included here (e.g., unemployment, housing, bankruptcies, small businesses closing) I come to the conclusion that recovery policies are going to have to be carefully crafted if they are to work. One size won’t fit all. Given the continuing dysfunction in Washington, I have to wonder whether my prediction of a four to five year recovery wasn’t overly optimistic. If Congress can’t come together on something as relatively simple as policing reform, how are they going to deal with the knottier (and naughtier!) issues surrounding recovery? As one example, increasing taxes on higher income groups will penalize already suffering small businesses in their areas – is this what we really want to do?
  • These data necessarily paint a much more positive picture than reality. They reflect the positive impacts on spending due to stimulus and unemployment payments (which eventually have to expire), but hide the looming problems associated with housing. Throughout the country, there have effectively been rent and mortgage “holidays” – most often three to six month moratoria on evictions and foreclosures. As these expire, the pressures on the consumer are going to increase. Governments will be forced to choose between landlords and renters, banks and homeowners. In general, my sympathies are always with the underdog, but the choice between landlords and renters is actually between two little guys – over half of the nation’s landlords manage only one or a very few units.
  • The prognosis for many metro areas is not very good. People are leaving NYC, San Francisco (in fact, all of California) and other big cities in droves. Conversely, the suburbs and near-urban rural areas are already seeing signs of growth. If this de-urbanizing trend continues (and I think it will) it will constitute a watershed period in American history, testing urban resilience as never before.
  • Still, the data could have been worse; even with the caveats above, rebounding consumer spending is a necessity for our consumer-driven economy. And recovery is actually happening in some places. We aren’t seeing a V-shaped recovery, but progress is being made.

* Developed by a group consisting of Raj Chetty, John N. Friedman, Nathaniel Hendren, Michael Stepner, and the Opportunity Insights Team.

** Apparel and general merchandise; Arts, entertainment and recreation; Grocery; Health care; Restaurant and hotel; and Transportation.

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Connecting the Disconnected

Man was born for society. However little He may be attached to the World, He never can wholly forget it, or bear to be wholly forgotten by it.

Matthew Gregory Lewis

The McKinsey Global Institute recently identified ten high priority challenges in forging a social compact for the 21st Century. To me, the essay screams out the need to connect the disconnected to the rest of us – the poor, the elderly, the under-30’s without jobs, those with physical or mental challenges, the marginalized. If we can forge those connections, then we will have made great progress toward curing the symptoms of the social sicknesses we see around us.

I would love to stop right there – and why not? I would have admired the problem and provided its solution. But you and I know that that would be fundamentally dishonest – saying connect without saying how to connect is like telling a kid to go play baseball without explaining how to play the game.

One of the tragedies of modern life – highlighted by the pandemic – is that we are surrounded by tools to help us connect but bereft of rules telling us how to do so. An article I read the other day looked at crisis communications by municipal governments in Florida. It found that many were not using social media, suggested that they should and then went on to opine why they didn’t (e.g., not capable enough, didn’t have the resources). What the authors seem to have overlooked – as so many do – is that it’s not the tool, it’s the connection that’s important.

Why? – quite simply, isolation kills. In the US, the life expectancy of white Americans who have been left lonely and isolated by globalism’s shifting tides has plummeted due to deaths of despair – alcoholism, drugs and suicide – to the point that it is approaching that of black Americans. In the UK, the biggest killer of men under the age of 45 is suicide.

We have lost social capital just when we need it the most. If we are to regain it, we must reconnect the disconnected to our communities. That means helping the disconnected to look forward, not backward; to give them a reason to believe that they matter. And to begin to do that we must always recognize that this is a contact sport – we have to do it one person at a time.

That means communication, but communication with a purpose: helping the those who are not part of the community to rejoin. I am not a communications specialist (obviously!) but having given a few hundred talks in my time, I know it’s important to both know your audience and to know what the communication is intended to achieve. So, to reconnect the disconnected to the community, it’s important to:

Recognize that there are horses for courses. For the message to resonate, there must be trust in the messenger. For many of the disconnected, that means that the messenger must have shared at least some of their experiences. Thus, both have a sort of common language that provides an element of trust in the messenger and the message. As an example, other veterans are far more likely to be able to bring disconnected veterans back into the community than those who haven’t seen service.

First, eat the gumbo. Brenda Phillips coined this term to encapsulate why some groups of volunteers (e.g., the Mennonite Disaster Service) had been so successful in the aftermath of Katrina while others had not. Since the best gumbo is always made at home, this means that to connect you must meet the disconnected where they are – physically, mentally and emotionally. In essence, the goal is to transplant the disconnected back in the community. That means finding out how their present is rooted in their past experiences. Thus, you have to listen – actively listen. Don’t peddle your solutions to what you think their problems are, show them respect by letting them tell you what those problems are. For some of the disconnected – especially the elderly – just having a shining face take the time to sit and talk with them may be enough so that they look forward to another day; for others, fixing and serving the gumbo is just the first step.

Find hooks. An important part of active listening is finding out what interests them or that they may be passionate about. It may be something as simple as sports or gardening, or it may be something more complicated like politics or the plight of veterans. These are potential hooks to draw them back to the community. To push the analogy of transplanting a little further, reconnection requires a certain amount of root-pruning, cutting through some of the more tenacious roots to the disconnected’s dark past so that new roots can grow.

Transplant. Those new roots will grow best in soil conditioned for the plant; connection is more likely if rooted in the disconnected’s interests. If they are interested in sports, see if you can get them involved in some sort of sports program – coaching, officiating, maybe even playing. An elderly homemaker may be able to go into a school’s Home Ec class and teach kids her favorite recipes. Wounded warriors can help each other adapt and cope with their physical and mental challenges. Political parties always can use volunteers.

However, transplanting doesn’t mean cutting all of the roots. Just as a plant won’t survive transplanting without a good root ball, the disconnected need to be able to maintain a sense of self – and that means keeping some of the roots to their past.

Keep watering. The disconnected have to walk down the pathway on their own, but they may need encouragement – or occasionally a little shove. Your goal is not so much motivation, but movement. Ultimately, the disconnected have to see rewards in reconnection; but that recognition won’t come until they have established strong new roots. We all stumble sometimes; we all find change uncomfortable. Reconnection can be the most uncomfortable kind of change, so it’s important to follow up occasionally – your caring can water the transplant and help it take root.

Recognize that some transplants won’t take root. Any of us who have gardened have seen transplants fail. So, too, sometimes – sadly – the disconnected are just too deeply rooted in misery or despair to be drawn back to the community. Perhaps, in their misery, they finally don’t care that they are no longer “attached to the World.” But still we must try.

Failure is the risk of trying; but we should not let fear of failure keep us from trying to bring the disconnected back into the community. Disconnected, they are a burden to themselves and the community. Connected, they can become an important new resource that strengthens the community. And thus an addition to its resilience.

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Even Pretty Models Can Give Ugly Results

All models are wrong; some are useful.

George Box

More and more, leaders of every sort of enterprise – from corporations to federal, state and local governments – are using mathematical models to help guide them in decision-making. Clearly, the US and UK governments’ approaches to dealing with the Covid-19 pandemic were greatly influenced by the model developed by Neil Ferguson of the Imperial College in London, and his co-workers. The calls for the Green New Deal stand (or fall) in part on the accuracy (or not) of the predictions of numerous global climate models. Many companies rely on weather models to guide important operating decisions. Most financial institutions (e.g., banks and esp. the Federal Reserve) rely on models to develop strategies for dealing with the future.

Leaders are increasingly relying on models because they are a convenient way to harmonize the cacophony of data that assails all of us daily. But as Mae West once said, “A model’s just an imitation of the real thing.” (For those of you who don’t remember Mae West, think of Dolly Parton smirking Nikki Glazer’s innuendo.). Like a Monet landscape, a model accentuates certain facets of reality, ignores others and, sometimes, fills in blank spaces that can’t be seen. Thus, though produced by scientists, there is a certain art in crafting a model – what to include, what to ignore, how to bridge regions where data may not be available.

The snare facing a decision maker in using the results of a mathematical model is that even the most elegant of models may mislead. The modeler, like Monet, has made choices about what data to include. If the model does not represent all of the data relevant to the decision to be made, then its usefulness is suspect. Decision makers need some sort of user’s guide to avoid that snare.

In my career, I have both developed and used models developed by others (usually successfully!). I have learned that the precision of a model’s results provide an illusion of certainty; i.e., the results may have three decimal places, but sometimes can only be relied upon within a factor of ten. Along the way, I’ve developed a few rules of thumb that have served me well in using the results of mathematical models. I generally use these in the form of questions I ask myself.

What was the model developed for? If the model was developed for a different purpose, then I have to satisfy myself that the model is appropriate for the decision I have to make – e.g., what data were included; what were omitted. If the model was developed for a different purpose, I need to dig into what important facets of my situation may not be represented in the model.

Has the model been successfully used before for my purpose? In the case of the Imperial College infectious disease model, it was developed to look at deaths from SARS and other infectious diseases; thus, presumably it is suitable for its use in the current pandemic. However, the model’s previous predictions of fatalities were off by orders of magnitude. Almost certainly, its predictions are upper bounds; however, they are so high that their usefulness is questionable.

Is my situation included within the bounds of the model? The Federal Reserve’s actions to respond to the pandemic are being driven, in part, by econometric models based on past history. Clearly, however, the usefulness of those models is open to debate – we’ve never been in this situation before – it’s like asking a blind man to paint a landscape. This can be very important when two or more models are coupled, e.g., modeling economic changes based on the results of a climate change model. If the climate change model’s results are based on an implausible scenario (RCP 8.5) then the results of the economic model are highly suspect.

What is the uncertainty associated with the model’s results? In some cases, the uncertainty is so large that the models results are not useful for decision-making. And if the modeler can’t tell me how certain/uncertain the model’s results are, that’s a huge “Caution” flag.

How sensitive are the model’s results to variability in its inputs (e.g., initial conditions)? This is of crucial importance when considering large-scale mathematical models of complex phenomena (e.g., climate change). If the model’s results are very sensitive to its inputs, then the model’s input must be known very precisely. If the model developer has not performed a sensitivity analysis, another “Caution” flag goes up.

Has the model been validated in some way? This can be done in a variety of ways, but my order of preference is:

  1. Showing that model outputs are in reasonable accord with a real-world data set. “Reasonable” means that the agreement is good enough I am convinced I can use the model’s results for my situation to make good decisions.
  2. Showing that each piece of the model is consistent with established principles. In some cases, there are no real-world data for comparison. If not, I want the modeler to be able to demonstrate that the algorithms in the model are consistent with accepted principles. This is fairly straightforward for physical phenomena unless the model assumes that they are coupled. It is much less so when one brings in social science constructs.
  3. (actually down about #22 on my list). Peer review. Sometimes modeling results from peer-reviewed journal articles are offered as guides for decision-making. If the model has not been otherwise validated, I am wary in using its results. Peer review is not what it used to be (if it ever was!) . I see it all too often becoming the last refuge of scoundrels – friends approving friends’ papers with limited review. The failed experiment of replicating some of the most widely accepted results in psychological research (less than half could in fact be replicated); the David Baltimore scandal; and too many others lead me to accept peer review by itself as validation only if I have no other choice.

Our leaders – at all levels – are increasingly relying on the results of a wide variety of models as decision-making aids. Often these are held up by experts as “the science” that must be followed. And yet, even the most elegant – the prettiest – of models may mislead. If a model’s results are accepted without question, the consequences for the community may be quite ugly. The wise leader trusts, but verifies by asking simple questions such as these.

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Leadership

Leadership is a matter of intelligence, trustworthiness, humaneness, courage, and sternness.

Sun Tzu

This year has tested leaders at all levels in ways they never could have imagined.  A pandemic spawning an economic crisis, coupled with widespread social unrest.  One has to wonder if a plague of frogs is next!

Effective leadership is essential for community resilience.  While we all recognize what a leader should do, we often overlook what a leader should be – those attributes necessary for effective leadership.  The Art of War – the two millenium old classic Chinese treatise on war by Sun Tzu – has much to offer us as we try to understand what is needed for effective community leadership. 

According to Sun Tzu, a successful leader must have the five traits listed above.  In the context of a community and its resilience, these traits might be better described as follows.

Intelligence.  Intelligence in leadership means that the leader knows how to clearly identify an objective, communicate it, plan to achieve it and then mobilize the resources needed to actually achieve the objective.  This implies that an intelligent community leader recognizes when the community must adapt to changing circumstances.  The intelligent leader is able to articulate that need and initiate the planning effort needed to affect change.  The efforts of city leaders in southeast Florida to adapt to rising seas are good examples.

Trustworthiness.  A trustworthy leader is recognized by the community as a person of integrity.  Thus, the community believes that the leader will carry out promised actions, and will provide support to the rest of the community to implement action plans.  Such a leader is thus able to communicate more effectively to the larger community, because even unpopular messages are more likely to be heard.  The public’s trust in Mayor Latoya Cantrell has played an important role in both limiting the coronavirus death toll in New Orleans, and in dampening the potential for violence.

Humaneness.   A humane leader cares about the community, and that caring is manifested in actions.  The community believes that the leader “feels their pain,” and therefore is more likely to follow where the leader is going.  This recognized innate humaneness of the leader is especially important when trying to reconcile different factions within the community.  Since mobilizing human and social capital is so important for action, humaneness

Courage.  A leader must have the courage to persevere even when obstacles are encountered.  In essence, the courage needed by an effective leader is born of a certain innate confidence in one’s own integrity and intelligence – the leader believes the community is on the right course.

Sternness.  By “sternness,” Sun Tzu means a sort of rigorous fairness.  Rewards and punishments are strictly based on actions, not the person acting.  Ultimately, this sternness is the result of a sort of self-discipline in which the leader may have favorites but does not favor them. It inherently results in leadership that holds itself responsible, and does not fear to hold others accountable for their actions.

Many of the commenters on The Art of War have stressed the danger of valuing one of these above the others. For example, excessive humaneness (think empathy) can lead to either weakness or paralysis; courage to foolhardiness. Excessive sternness can lead to cruelty; intelligence to arrogance. Leaders thus should strive for an Aristotelian balance of these attributes.

The transformation of Charlotte, NC, from a textiles to a financial center illustrates the importance of several of these leadership traits.  Up until the 1970’s, Charlotte had been one of the leading centers for the textile industry in the country.  The heads of two of the largest banks in North Carolina and the head of Duke Power recognized that the demise of that industry threatened Charlotte’s vitality.  All three were embedded in the community, and had earned its trust. All three passionately cared about Charlotte’s future, and their their caring about the city’s future was widely recognized by the public.  Acting largely independently of city and county governments, these three formed an organization aimed at helping Charlotte adapt to these changing conditions.  As plans were developed, these three spearheaded the transformational effort.  They helped rebuild some of the poorest sections of the city (encountering opposition because many of these were predominately black), courageously turning what had been almost slums into desirable neighborhoods.  In spite of criticism and carping, these three eventually transformed Charlotte into what has become the second largest financial center in the country.

Many of our communities and our country are embroiled in painful and often rancorous debates about racism, inequality and our future.  Effective leadership is essential if we are to emerge from the acrimony and build the better future we all want.  Sun Tzu’s wisdom can point us toward those leaders likely to be effective. Leaders who have the intelligence to see the problems and to recognize real solutions. Leaders with the recognized trustworthiness and passion to move the community forward. Leaders who care enough and are courageous enough to enlist the entire community; yet disciplined enough to hold themselves and everyone else accountable.

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A User’s Guide to Expert Advice

All your knowledge is about the past and all your decisions are about the future.

Ian Wilson

The Mayor of my small city owns a short string of dry cleaners. He sort of galumphs around town like a latter-day Bullwinkle. He’s a small-town avatar of Alfred E. Neuman.

His job – like that of all leaders – is to mobilize resources and get the right things done. But in our complex world, it’s often difficult for a leader to know what the right things are. Decisions must be made in realms in which community leaders have no experience or expertise. Thus, they must rely on the advice of experts for guidance.

For a decade or so, I was the recognized technical expert in a field fraught with technical challenges and political minefields, where decisions sometimes involved hundreds of millions of dollars. I later led a multi-million dollar enterprise, where I had to rely on the expertise of others. Having both provided expert advice and used others’ expertise to make important decisions, let me share a few lessons I’ve learned.

Experts advise, leaders decide. This is the most important lesson I’ve learned! Simple, isn’t it – but packed with meaning. First and foremost, a leader needs to define victory – what is the desired outcome. We all want to make data-informed decisions, but that means that the leader needs to lay out the context for the decision. If not, the expert’s advice may not only be misdirected but might lead to unintended consequences. In my experience, describing one or more desirable end-states and asking how to achieve them gives better results than effectively limiting the expert’s response.

Let me use a climate change example. South Florida has seen rising sea levels, and increasing numbers of King Tides and flooding of low-lying areas. Area leaders are united in wanting to limit the impacts of flooding on their communities. One leader might go to his experts and ask how to prevent roads from flooding. Experts might answer that roadways should be elevated. And – voila! – it works, except that now the flooding is in residents’ yards and houses. A better approach might be to ask how to limit flooding so that it did not impact either transportation or disrupt people’s lives, leading to changes in land use and better water shed management.

Another example. The US approach to the pandemic has been to “flatten the curve,” i.e., victory was defined as no Covid-19 deaths due to lack of appropriate medical care. The Swedish approach has focused on protecting the most vulnerable while not intruding too much on daily life. The rising tide of deaths of despair (not to mention medical procedures delayed too long), the economic upheaval and the social unrest we in the US are already experiencing may indicate that Swedish leaders were better at defining victory. No matter which approach ends up with a better end-state, this highlights the importance of carefully defining victory.

One other point to remember. Decisions, particularly public policy decisions must transcend domain expertise by considering other factors. It’s not enough to follow the science. Legal, economic (resulting unemployment) and social impacts (e.g., potential domestic violence, increased deaths of despair) and squishy things like values and the public’s expectations must also be considered. Thus, for decisions with broad societal ramifications, a leader needs advice from a number of different disciplines. The leader has to balance their different perspectives and try to craft a decision that comes as close as possible to the desired outcome. Ultimately, that’s why it’s lonely at the top – leaders often have to implement decisions in an uncertain environment.

Experts are human – usually. Man is a pattern-seeking animal. One of the keys to our survival as a species is that we see patterns (for example, of potential danger) and act on them (e.g., run like hell in the opposite direction). An expert’s advice is most often based on the pattern the expert perceives. Experts’ expertise is thus simply the sum of their experiences, i.e., what they have seen and what they have learned. Sometimes we take that to mean that an expert has to be some hoary old fart who’s been around for years. While it does take time to develop expertise, it’s really more a matter of how much has been learned rather than the time spent learning it (i.e., it’s better to have learned from thirty different experiences, than to have experienced the same thing thirty times).

In my case, I was relatively young (and in a young field) but had seen – and caused! – a lot of failures and had worked hard to learn their causes and prevention. In my case, that bred a great deal of humility – I recognized that I probably knew more than most others, but also recognized how little I knew compared to all that there was to know. Leaders should beware of experts who think that they know it all. They’re likely to introduce cognitive biases into their advice (e.g., cherrypicking data; ignoring facts that don’t fit their preconceptions).

Just as dangerous is the expert who recognizes the uncertainties within a given situation (i.e., can’t find a pattern) but defaults to some other basis for advising leaders (e.g., an unvalidated computer model; use and abuse of models will be the subject of a later post). Too often, these situations result in a sort of “Groupthink” – where experts cluster around a single concept that they might individually not support so strongly.

I’ve learned one other useful lesson: experts, like the rest of us, have biases that may not match those of the decision-maker. I’m sure many of you have been in the situation where a consultant has recommended a course of action that would benefit him, but might or might not achieve victory. The expert may recommend a very conservative course of action so that there is little danger of the expert being proven wrong in his field – the expert can claim success whether or not he’s pointed to the best path. If the expert is part of an entrenched bureaucracy, she may tilt her advice so that it benefits her organization.

Hedgehogs and foxes. Philip Tetlock popularized a concept that dates back to the Greek poet-warrior Archilocus – there are those that know lots of little things (foxes), and those that know one big thing (hedgehogs). This applies to experts as well. Each type has its strengths and weaknesses. Foxes are more likely to foresee potential unintended consequences of a proposed action than hedgehogs, and to be collaborative. However, hedgehogs’ advice may reflect their deeper understanding within a given situation, and thus be superior for bounded problems. Conversely, hedgehogs often are guilty of “epistemic trespassing,” believing that their expertise in one discipline makes their opinion of great value in another.

In my experience, experts from a specialized organization tend to be hedgehogs; broader organizations provide the broader range of experiences needed for foxes. The decision-maker needs to remember that while life is not stovepiped, bureaucracies are – the best advice comes from a competitive intellectual market, involving both foxes and hedgehogs. In the words of Dr. Li Wenliang, who tried to warn the Chinese government of the dangers of Covid-19, “There should be more than one voice in a healthy society,” i.e., an effective decision should have broad input.

To use – or not to use. Let me briefly close with an echo of something I touched on above. The decision-maker is responsible – and accountable – for decisions made, not the expert. Saying that “I’m just following the Science” is a copout and an abdication of responsibility. In my career, I’ve tried to determine whether to follow expert advice based on three factors:

• My trust in the expert or group of experts. This entails factors such as their inherent biases, their track record, their confidence in their conclusions and their consideration of potential unintended consequences.
• The inherent quality of the advice. This entails factors such as how well the current situation seems to match the experts’ assumptions and the experts’ appropriate consideration of uncertainties.
• The fit to the decision. The experts may give me great advice but it’s up to me to determine whether it actually will lead to victory as I’ve defined it.

All leaders eventually are faced with decisions which transcend their own experience. The increasing complexity of our communities, and the unprecedented challenges they face, require that the leaders of our communities receive expert advice. But those leaders must recognize that they are the ones who will make the decisions, and who will be held accountable for their results. I hope that these extracts from my own experience will help leaders better utilize experts and their expertise, and to make better decisions based on expert advice.

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A brief postscript. This week, we surpassed 100,000 deaths from the coronavirus in the US. On Memorial Day, we also honored those whose lives were sacrificed in service to their country. We can best honor those whose lives were lost from the virus by learning – and acting on – the lessons their loss can teach us. We need to do this with eyes not shaded by party or prejudice, and with a clear intent to not walk down this path again.

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Finding a Better Path

I’ve learned that the safest path is not always the best path and I’ve learned that the voice of fear is not always to be trusted.

Steve Goodier

If COVID-19 returns in the fall, do we really want to go down the same path we’ve been taking? In the US, we have focused on “flattening the curve” – not reducing the total number of deaths directly due to COVID-19, but rather spacing them out so that “indirect” deaths due to insufficient health care system capacity have been minimized. We took this path because our models initially predicted tens of millions of cases – and millions of deaths – that would have overwhelmed our emergency rooms. In taking this approach, all of us were faced with a situation for which we were unprepared – we had never been faced with this kind of crisis. Our stocks of many critical resources had been depleted but never replenished. The “Triple Header” of hurricanes almost three years ago had hinted at what we now know – our EM doctrines are clearly inadequate to handle disasters that go beyond the regional. We acted largely out of caution and a fear of the unknown.

Things will be different the next time. We know that the approach we’ve taken to the pandemic is fraught with unintended consequences – impacting our economy, our social compact and our mental health. We will have much greater testing capability and probably sufficient PPE, and capable supply chains for each, the next time. With luck, we may also have more effective treatments available for those infected.

The problem we face in crafting a new approach is simply that too much conflicting “information” is being fire-hosed at us; it’s damned difficult to find the nuggets of truth in the rushing torrent so that we can plot a better path for the future. I strongly believe we should empanel a national Board of Inquiry for the coronavirus chartered to develop a better approach for nationwide disasters such as this. It is important that we do this for next fall, but also because this crisis may impact our ability to manage severe weather events starting this summer.

Rather than bipartisan, the Board should be non-partisan – focused on policy and planning rather than personalities and politics; lasered in on developing a better approach rather than playing the Blame Game. Such a Board needs a strong chair, versed in both the strategic and operational aspects of dealing with crises; Craig Fugate, Honore Russell or Thad Allen come to mind. The Board should be independent of both the Executive and Legislative Branches, perhaps under the National Academies. The Board should include expertise in economics; health and health care; law; and federal, state and local decision-making.

Such a Board should pursue lines of inquiry such as:

Situational awareness. Whatever plan we develop, we can be sure that it will have to be modified once case numbers start to rise. Those changes will be informed by the data at hand. I’m sure I’m not the only one who can’t figure out whether we’re severely undercounting or overcounting cases and deaths (My guess is undercounting cases and overcounting deaths, but who knows?). The federal government should provide useful guidance in terms of how to count and report, esp. considering that both the pub;lic and private sectors are likely to be involved.

Federal, state, community and private sector roles. There seem to be as many opinions about who should lead and how, who should follow, and who should get out of the way as there are politicians and pundits, i.e., way too many. We need simple efficient processes at all levels, minimizing paperwork, and clear on what they are and how to follow them. We really began to have success when we let the private sector get involved. Our processes need to stop stymieing and start encouraging private sector participation.

Urban areas. Most importantly, we need to understand why urban areas such as NYC were hit so hard. Less than 3% of US counties – all urban and accounting for half of our nation’s GDP – have had 60% of US cases. If NYC was a separate country, its mortality rate would exceed Italy’s! Over one-third of US deaths occurred within a 30 mile radius of NYC. We have to understand what happened in these urban areas to perform better next time.

Foreign experience. The Board should consider successful responses from other countries. As of today, Taiwan has had only six deaths and less than 450 cases out of a population of 23+M. They learned some hard lessons from SARS – and acted on what they learned; we apparently haven’t.

Lockdowns. Singapore, South Korea and Sweden all have approached the “Wu Flu” very differently than we have in the US, with arguably better results. One element these have in common is aggressive contact tracking; it seems that we can learn from what they have done. In these countries, the elderly and those potentially at greatest risk were urged to quarantine, but schools weren’t closed; restaurants weren’t closed; retailers weren’t closed. If we look at the responses across our states, lockdowns don’t seem to have had a quantifiable impact on health outcomes; population density does. Conversely, we will likely pay a terrible price later in deaths of those who didn’t go for their cancer treatments, who couldn’t afford to pay for their medications, who didn’t get the proper exercise. This doesn’t begin to address the incalculable impacts on our kids’ educations and future employability, or the millions of children worldwide who the UN estimates are going to die of starvation.

Next points of attack. We now know that urban centers were the hardest hit in this first round. We need to determine whether this has resulted in “herd immunity.” The potential vulnerability of more rural populations also needs to be addressed.

There are other issues (e.g., border security and immigration) that also should be considered. What we need most now, however, is the wisdom to find those nuggets of truth, the wisdom to use them as signposts toward a better path, and the courage to follow those signs onto that path. Given our highly partisan polity, wisdom, will and courage will all be needed. The GOP and the Dems have both contributed to the problems; the best ideas from both are needed to solve them.

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Once the pale horseman fades away

It’s not how far you fall, but how high you bounce that counts.

Zig Ziglar

As I threatened promised a few weeks ago, over the next few posts I’m going to float some ideas intended to make the New Normal we’re groping for a better place for all of us to live. Each of the things I’m going to propose are going to make at least some of you uncomfortable (Some of the concepts will make all of us uncomfortable!). But these uncomfortable times demand that each of us break out of our bubbles if we’re going to “Build Back Better.”

My focus throughout all of these essays on COVID-19 recovery is on something called “Main Street.” I trust Wall Street will take care of itself, but our Main Streets are going to need help to recover. I use the phrase “Main Street” to evoke a sense of community; a belief in neighbors helping neighbors; a trust in our inherent ability to synthesize a New – and better – Normal from our differing perspectives. And while that may seem overly idealistic, I believe that this is a time for radical pragmatism: real solutions to our real problems that we can all fight for. In this post, I’m going to focus on building a better economy for our communities.

As I’ve pointed out in previous posts, small businesses – the mainstay of our Main Streets – are the ones who have been hardest hit by the pandemic. Last Friday, John Mauldin wrote about an 80% economy in our future – with the lost 20% primarily small businesses. More importantly, the most economically fragile are the ones most likely to lose their jobs and, sadly, the ones least likely to be able catch on somewhere else due to location, education and lack of marketable skills. Many of their jobs – especially in retail and restaurants – are unlikely to come back soon. For decades our “service economy” was lauded; but I do not believe that it can lead us back to something better in its former shape.

There are going to be new job opportunities for those who can stretch to meet them – our entrepreneurs. In the service sector people will be needed to deploy and service the new tools that entrepreneurs are developing for telework and teleschool. Workers will be needed to meet health care needs with new high-tech and low-tech solutions. For example, I foresee a major role for thermal imaging at entrances of any building open to the public – preventing those with fevers from exposing others (and, ideally, at border and customers and immigration checkpoints as well). Initially this will be crudely done by hand-held instruments, requiring workers to “point and shoot” the devices. Workers are being added to support warehousing and delivery of our essentials (and not so essentials) as well.

But I see a greater opportunity for new businesses and jobs in manufacturing. Major companies are already taking a much closer look at their supply chains. Part of our recovery plan should include policies to encourage shortening our supply chains whenever possible, and encouraging our manufacturers to buy American first. But not just shorten but fundamentally change the way we think about our supply chains. For too long, our manufacturers have aimed to make their supply chains as efficient as possible – going for the cheapest source with “Just in Time” delivery. But now we’re seeing “Just-in-time” turning into “Almost never” (e.g., China preventing American factories in China from shipping medical supplies back to the US). The pandemic should teach us that resilience is not the same as efficiency; redundancy (e.g., multiple suppliers) must be built in to avoid loss and for quick recovery (or as we physical scientists say – “Entropy rules!”).

An important part of this rethinking of our supply chains is reducing our dependence on a single source: China, Inc. Our pharmaceutical industry is dependent on Chinese sources of raw materials for about four-fifths of our medicines. China is a primary source of cheap finished medical supplies (e.g., surgical masks). What hasn’t been mentioned enough is that with their Belt and Road initiative, our electronics industry has also become critically dependent on Chinese-controlled sources of precious and rare earth metals. We need to address this in our national recovery strategy – looking at the economics of recovery of critical metals from electronic and other wastes would be an intriguing place to start.

But while entrepreneurial efforts will undoubtedly create new jobs, it is also likely that they won’t be nearly enough for all of the workers displaced by the pandemic. Upgrading our nation’s infrastructure has to play a prime role in putting people back to work. We need to make existing public spaces as pandemic proof as possible. Governor Cuomo’s vision for a New York City that is both more livable and more socially distance-able is a good example. But there are a host of other actions that should be taken to ensure that our infrastructure not only meets present needs but is ready to support our New Normal. For example, rapidly building out and extending the G5 internet throughout the country, especially to rural areas. Hardening existing infrastructure while reimagining how infrastructure can support – perhaps even guide – safer and better living patterns in the future; solving the conundrum of affordable housing; recognizing the value offered by our suburbs in this time of the pandemic. Upgrading our infrastructure will be a tremendous undertaking, with the potential to put all of America back to work. Undoubtedly it will be expensive, costing trillions of dollars, but the return on that investment can be a lasting monument to our resilience.

But just giving people jobs and an income is not enough – the enduring problem that the pandemic has pointed out is that so many of us do not have any savings to tide us over in emergencies, i.e., it’s not so much lack of income, but lack of wealth. We need to find a way to help even the least skilled begin to build a grubstake for emergencies, and to seize opportunities to have a better life. I would suggest that if – as we are being told – we’re in a war, that we harken back to one of the best ideas of the World Wars – bonds, call them Rebuilding America Bonds. If we have to go into debt to repair our economy and reinvigorate our infrastructure, then let’s owe that debt to ourselves, and have that debt aimed at helping the least of us. Give us our income tax refunds in Rebuilding America Bonds. Nudge employers to include Rebuilding America Bonds as part of their pension portfolios. Encourage parents, grandparents, extended family and friends to give Rebuilding America Bonds for birthdays and holidays. Encourage states and communities to float their own version of these bonds to pay for their own infrastructure refurbishment programs, and backstop those programs at the federal level.

For not only our physical infrastructure needs repair; while we say we’re all in this together the words and actions of some are evidence that their “all” is not everyone. We also need to rebuild our trust in each other and our recognition of our common humanity.

Finally, we must – MUST – begin to seriously address the impacts of the pandemic on those just entering or just about to enter the workforce. During the Great Depression, FDR used the WPA and the CCC (enough initialisms there to satisfy even the fussiest of bureaucrats!) as a way to give meaningful work to the jobless. The Civilian Conservation Corps, in particular, gave jobs to about 300,000 youths at a time. Even before the pandemic, about 13% of those 16-25 years of age weren’t in school and didn’t have jobs. Let’s craft programs similar to those implemented 80+ years ago for today’s young people. Have them work at the community level to do needed jobs which will also help them become more employable.

Similarly, we need to think seriously about the minimum wage. While it is kind to consider raising it, it is not wise – here, wisdom is kindness through a telescopic lens, looking at the future impacts of an action. One of those impacts is that raising the minimum wage effectively lowers the boom on young people trying to get the skills necessary for employment. Whatever we decide as a nation to do about the minimum wage, we need to maintain a lower “youth minimum wage” so that there are entry points for even unskilled young people into the workforce. They need to learn the discipline of working at a job; even as they gain the experience and the satisfaction of doing the things to make their jobs a success.

We need to break out of the cocoon of fear fostered by the media – too often minor league politicians-without-portfolios playing “Gotcha Games.” We need to Go Big in our thinking and in our recovery: unleashing our entrepreneurs, rebuilding our infrastructure so that it is both more robust and better sited – and suited – to a changing world; providing our kids with the tools they’re going to need to live – and thrive – in this changing world; supporting the least among us so that they can survive – and lift themselves up – in the world as it changes. This is a different message too often unheard – borne of optimism in our ability to shape a better future for ourselves and our communities.

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Minsky Moments revisited

As Dan Alesch has pointed out, we designate disasters by their triggering events, but we recognize them by their impacts. Thus, we know Katrina and Sandy by the devastation they created; had they exhausted their energies over the Atlantic, their names would be forgotten. In years to come, COVID-19 will cause all of us to shudder, even though we’ve experienced many decades of influenza outbreaks.

But why were these disasters so impactful? And, for all of them, why were there such great disparities in those impacts, even among neighboring countries (Taiwan vs China) and even communities? My answer – Minsky Moments.

A Minsky Moment is a crisis paradoxically born of stability (It takes its name from Hyman Minsky and his financial instability hypothesis). Minsky believed that a long period of stable financial markets led to ever increasing risk tolerance (and often risk-taking) which in turn led to a sudden collapse in the market. His ideas have been used to explain both the crisis in Asian markets in the late 1990’s and the Great Recession that we were slowly climbing out of.

But we see this same behavior occurring over and over again, leading to other kinds of disasters. For example, the hurricanes in Florida in 2004 and 2005 were the first major storms to hit south Florida since Hurricane Andrew in 1992. Individually, each was weaker than Andrew, but collectively their impacts were much greater (For example, Wilma – a Cat 3 hurricane – did almost as much damage as the Cat 5 Andrew even after Ivan and Charley had already done so much.). Over time, people forgot Nature’s devastation – many let their insurance policies lapse; many didn’t properly protect their homes; virtually no effort was made to strengthen buildings built prior to the more stringent building codes put in force after Andrew. People became so risk tolerant that even common sense precautions (such as properly functioning storm shutters) were ignored.

Similarly, even after the devastating effects of this coronavirus in China became apparent (in spite of the Chinese government’s efforts to hide them) in January, the President and many governors and mayors tried to downplay its potential impacts. People were encouraged to “party hearty” – Chinese New Year, Mardi Gras and others. Spring Breakers beached it even into March, and for some, sadly, it was their last Big Wave. We had not had a major epidemic in 100 years; the false alarms of the last two decades (SARS, Ebola, et al.) conditioned us to believe that the party would never end – until it did.

We take action immediately after a disaster and then as its devastation slowly fades from our memories we become more and more tolerant of risk and eventually engage in increasingly risky behavior. Almost invariably, this behavior leads to a Minsky Moment.

Sadly, there can be Minsky Moments in any and every aspect of our lives. Certainly AIDS took so many lives in the 1980s because of the risk tolerance and risky behavior that were the hallmarks of the sexual revolution and drug use in the ’60s and ’70s. We had conquered polio in the ’50s; antibiotics seemed able to cure even STDs; there was no real risk – or so we thought. And yet a virus that apparently had been lying in wait since the ’20s pounced on our risky behavior to become a pandemic that continues today.

The levees of the Sacramento River Valley provide the basis for a potential Minsky Moment in the making. Originally built to provide water for reliable irrigation of farm land, the levee system has led to unrestrained development. This residential and commercial development is occurring in an area that has seen at least six massive floods (When Leland Stanford became Governor of California, he had to use a rowboat to get to his inauguration.). When the levees breach (one estimate indicates a 64% chance in the next third of a century), the drinking water for 25 million people will be contaminated, millions will be left homeless and tens of thousands will die. All because we have forgotten the lessons of the Great Mississippi flood of 1927 (John Barry’s Rising Tide provides an excellent explanation of how bad management and engineering contributed to this event. His The Great Influenza is a worthwhile reference on the Spanish flu pandemic.). Similarly, had we remembered the lessons that Nature tried to teach us with the Long Island Express of 1938 (a massive meat cleaver – compared to Sandy’s butter knife – that carved up the Long Island Sound) much of the devastation of Hurricane Sandy would have been avoided. While some communities had wide beaches and recently constructed berms and dunes that protected them from the worst of the storm, many more of their neighbors went unprotected into that good night. And those still rage over the blight that is strangling their communities.

In too many cases, the impacts caused by extreme events – especially the human suffering – can be attributed to Minsky Moments like these. It is all too human to want to forget the bad things that have happened to us. It is all too human to believe that since no crisis has happened recently, none lies lurking in our future. But to be resilient we must go beyond our human failings – we must ensure that fading memories do not give rise to tolerance of risk, then risky behavior, and then the inevitable Minsky Moment.

Stay well!

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Starting to Bring Back Main Street

The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools.

Confucius

The one thing we know for sure about our recovery from the coronavirus pandemic is that things will be different. Like Yeats’ rough beast, we will slowly slouch toward a New Normal. There are things that we can reasonably predict will happen along the way, but for now we do not know what’s at path’s end. In the next few posts I’m going to look at recovery. As the title implies, I see recovery as bringing back the Main Streets in our communities; regaining some stability and control in our lives in more resilient communities.

Recently I stumbled across a definition of resilience as purposeful action to achieve positive change. When I define victory as more resilient communities, what I’m saying is that the goal should be to rebuild communities so that they are better able to make good things happen for their members. “Building back better” shouldn’t only apply to buildings and bridges but to all of the tangibles and intangibles that are a part of our communities. To do this, we will have to reestablish community capital; all kinds of community capital.

Central to rebuilding community capital is rebuilding the capital of individuals, families and neighborhoods. Over the last decade we’ve heard a lot about income inequality, but too little about wealth. It’s estimated that about 39% of Americans have sufficient savings to deal with an $1,000 emergency. When these emergencies inevitably occur, those affected must rely on others to help them make it through: they must have social capital to cope. The question becomes “how do we help them build their capital accounts so that they can better cope with emergencies?”

Because recovery means looking at all types of community capital, I’m breaking this into several parts. In this first part, like the Confucian mechanic, I’m doing my due diligence – sharpening my tools (and wits – both of them) for what’s to come: defining the goal, and trying to see where we’ll be when the fog of our war with the virus clears.

• First, time. We can’t know when this first wave will end, but my best guess – and hope that I’m too pessimistic – is that we’ll be able to really begin on the recovery by the 4th of July. If we accept the rule of thumb that full recovery will take ten times as long as the period of loss, that means five years! There is likely to be a second wave come fall; we should be much better prepared to contain the damage to our communities than we were for this first round.

• Next, the economy. Unfortunately, the recently passed “Stimulus” bill won’t stimulate the economy very much; at best, it will allow many working people to stabilize their living arrangements – mortgages or rents, keeping food on the table. Small businesses and their employees will be the most likely to suffer. A study by the JP Morgan Chase Institute found that the 50% of small businesses had only enough cash to last 27 days. The picture was even grimmer for labor-intensive, low-wage sectors of the economy (restaurants, retail, repair and maintenance, and personal services): the financial buffer of 50% of these businesses was two-three weeks. In my small city, most of the local restaurants have tried to make a go of it via take-out only service. Today’s paper headlined that two of the most popular couldn’t make a go of it. More will follow their lead.

The most fragile businesses were the ones that with the most minority- and woman-ownership. Conversely, capital-intensive, higher-wage sectors (e.g., high tech manufacturing) had over one month of cash buffer. I’m afraid that much of the money allocated for small business loans won’t be accessed – what small business-person will want to take on more debt in a very volatile economic environment? If you’re a restaurant owner, reopening while people are remembering social distancing is risky business.

And, sadly, we’re likely going to see 8-digit unemployment figures. About 20% of restaurant workers already live below the poverty line. About one-third of our workers were barely getting by as part of the gig economy. Undoubtedly the number of cost-burdened and severely cost-burdened renters – and the number of the homeless – will spike.

• Social capital. In a recent column, George Friedman wrote that Canceling social life … cuts against not only the economy but, even more, what it means to be human. Several years ago, a group supported by CARRI* walked through a Whole Community pandemic exercise. One of the things that struck us was the potentially drastic social changes that might occur. Even before the appearance of the virus, we were seeing fewer family networks and, often, almost no contact even between next door neighbors. While many families are soldiering on in this world of social distancing, the bonding and bridging ties that hold our communities together are being further stretched and unraveled; . This is coming at a time of great distrust in our institutions: see the anti-social antics of the Spring Breakers. Once the crisis is over, I foresee something like the social upheaval of the early 1920’s after the Spanish flu pandemic. I also anticipate that both births and divorces will spike! And the elites will segregate themselves further from the rest of us.

• Human capital. The impacts of the crisis on our young people may be the greatest price we will pay, in the long-term. I’ve written before about the problems of youth unemployment; automation and increases in the minimum wage are conspiring to make many of them (esp. young men of color) unemployable. The closing of schools only adds to this. While we are seeing an uptick in online education particularly for colleges and universities, the teachers unions in Pennsylvania and Oregon have used their political power to prevent cyber charter schools from accepting new students. In spite of this, “teleschool” is probably an idea whose time has come.

• Institutional capital. Many of our government institutions have been conspicuous in their incompetence. Closing our borders undoubtedly bought us some time to prepare but – without doubt – we frittered that away in bureaucratic failures. But the rot goes beyond that – our responses to so many of the crises we’ve faced in recent years demonstrates our perverse inability to take action in the absence of a crisis.

Thus, I believe that the national recovery effort will trigger one of the seminal battles in our nation’s history: pitting those who still believe in our federal system of government against those who believe that we must fundamentally change our expand federal power while limiting state and local autonomy. While I want to remain nonpolitical in this essay, our response to COVID-19 indicates that – wherever we are between these two poles – our nation needs to find an approach to crisis management that is faster and more effective.

Once we get through this initial stage of the virus, the real work will begin: rebuilding our economy and reknitting our social fabric. Undoubtedly, some – many? – of the details surrounding my projections of where we’ll be when we begin recovery planning will be proven wrong. However, I strongly believe that the goal is right: building more resilient communities; communities better able to take action to improve our lives. Whether right or wrong, the most important thing is to have a goal in mind for recovery and then to plan and above all ACT to achieve it.


* Jane Kushma, Andy Felts, Susan Kammeraad-Campbell, Charlene Milliken and I.

Pretty heavy stuff! On the lighter side, I recently stumbled across an apocryphal letter from F. Scott Fitzgerald on his approach to social isolation during the Spanish flu pandemic.

The officials have alerted us to ensure we have a month’s worth of necessities. Zelda and I have stocked up on red wine, whiskey, rum, vermouth, absinthe, white wine, sherry, gin, and lord, if we need it, brandy. Please pray for us.

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Future-Focused Education

Don’t stop thinking about tomorrow,
Don’t stop it’ll soon be here…
Yesterday’s gone, yesterday’s gone.

Christine McVie

Over the summer I wrote about the importance of having an ecosystem that would enable the poor and disadvantaged to succeed – to rise out of poverty. I used a quote from Bobby Unser to identify the key attributes of that ecosystem – preparation and opportunity – and went into some detail about what opportunity is, and isn’t. But opportunity by itself isn’t enough – our enabling ecosystem must help the poor and disadvantaged recognize opportunities and provide them with the tools to seize them.

And that’s where education comes in. A strong educational system is a hallmark of a resilient community. In these communities everyone has a good chance to succeed. Even the poor and disadvantaged are prepared to seize the opportunities that are there for them. While there are already too many voices screaming out what an education should be, let me softly come at it from a slightly different direction.

Obviously, I’m not an educational expert (I’m sure some of you sometimes wonder if I’m even educated, or an expert in anything). But what I think we all need to focus on is education for what. That’s why the song lyrics from Fleetwood Mac – the what is to be ready for whatever tomorrow brings. I want our kids – all of them – to be ready to be able to survive and thrive in the world to come. And I want them – all of them – focused on their futures, and not dwelling on their parents’ past. After all, yesterday’s gone…

A farmer in 1800 would be doing things much the same as his forefathers in the 16 and 1700’s. By 1900, he would be very uncomfortable with the mechanization of farming, but would still recognize many of the basics he knew. That same farmer really would be lost in the world of precision farming based on information technology we have today. Further, he would not be able to cope with the accelerating pace of change in our world; that didn’t happen in his.

So, to me, a future-focused education has to provide the following:

An accurate understanding of the path to the present and possible futures. As I’ve often said before, trajectory doesn’t have to be destiny, but it takes action to set a different course. To be future-focused means knowing how we got where we are, where the world is heading and what its drivers are. This means our education system has to provide an accurate picture of what we know about our past and our present and where the world may be going. That picture can’t be black and white; whether we like it or not, we’re awash in a world of grey. And the picture shouldn’t be just shades of red or blue.

To be more concrete, let me use climate change as an example. The global climate is changing; it is getting warmer on average, and has been (by fits and starts) since the 1700s. Sea levels are rising on average. But the sea level at some locations is actually falling; some locations are actually seeing a long-term cooling trend. Students need to understand what is happening to their local climate. Coastal development coupled with poor land use decisions has resulted in greater devastation due to storms, i.e., the number and intensity of the storms we’re having has stayed about the same but the damage is greater. Students need to be taught the facts not just about climate but about the drivers that have put so many people and so much property in harm’s way.

The ability to learn. The amount of new knowledge is growing exponentially; there is no sign that this is abating. No one can expect to grasp all of it. But being future-focused requires that we are able to restock our mental shelves with new information and cast aside what’s no longer useful. Many have talked about the skills and sources that are necessary for continued learning; often overlooked is the personal element that has to underlie their use. Our education has to help us to find our place in the global kaleidoscope. If we know that and understand the world around us and how it might change we can begin to apply the general lessons of how to learn to gain the knowledge we will need for future success.

Opportunities to form networks. We humans are social animals. For most of us, the networks we form are important components of our success. Throughout my life I’ve been fortunate to have lots of chances to network. As a kid I played football and baseball and soccer in school; I acted in plays; I worked on the high school yearbook. Throughout my life, the networks I’ve formed have provided social and emotional support when I needed it, and helped me to what’s been a great career (or three). Very importantly, my networks have been great indicators of future trends for me.

Our educational system needs to help students form their own networks. These are formed naturally through participation in sports teams, special interest clubs (e.g., chess, 4H, computers, gardening), music or drama groups, or junior ROTC. Not all kids will form lifelong networks (you can lead a horse to water but you can’t make it drink) but we need to make sure they have the chance.

Confidence. Confidence is probably the most overlooked component of success (this applies to communities as well). If you have the confidence of accomplishment you’re more likely to take steps to better yourself. No matter how benevolent our governments, the poor ultimately have to take the steps to lift themselves out of poverty. That means they need to have accomplished something or have developed some special skills (forming networks is one of those skills) to give them the confidence to act to better themselves. Participation in network-forming activities can provide this confidence, but there are other ways – sports, academics, home ec (for women and men), shop (ditto) – where accomplishment can lead to confidence.

In a previous post I noted that kids need “the experience of working with their hands. We have too many who took on too much debt going for a college education that hasn’t prepared them for a career. We need people in the crafts and trades – especially when disaster strikes. Roofers, plumbers, electricians even at the bottom of their professional ladders make much more than the poverty level, giving them the chance to accumulate some wealth.” Becoming confident is arguably more important than simply acquiring academic skills; we’ve all seen examples of kids with high grades who had virtually no life skills or street smarts.

Communication skills. Whether you’re a plumber or a CEO, you have to acquire information if you’re to succeed, especially as the world changes around you. That means you have to be able to read. In a networked world, you have to rely on others sometimes; that means learning to write and to speak coherently. Public speaking is probably the most basic of these skills; it needs to have greater emphasis in education. And our globalized world increases the value of being able to speak a foreign language.

Financial literacy. In an earlier post, I mentioned the importance of being able to handle money. All children need to become financially literate. Ignorance leads to bad decisions in handling money which leads to a lack of reserves when times get bad. This is especially important for the poor; they have less to manage and the greatest need to manage their money wisely.

Technological literacy. Information technology has been the greatest accelerant of change the world has ever seen. However, we are on the cusp of even greater change brought on by the intersection of information technology, psychology and the health sciences. The nature of work will change; life spans will potentially become much longer; how we learn will change. In other words, technology will continue to be a major change agent shaping our futures. Technological literacy thus has to be a key component of a future-focused education.

Ultimately, community resilience is predicated on people and institutions ready to take on the future. That’s why education is more important now than at any time in the past. But education cannot simply be a presentation of a panoply of facts; it has to be focused on preparing everyone – especially the poor and disadvantaged – for the future. Unless the young acquire the knowledge and skills I’ve listed, they will be ill-equipped to deal with future change. And thus our communities will be less resilient. Don’t stop thinking about tomorrow.