Liberal and Loving It

Senator Mark Udall Interview

Senator Udall was gracious enough to sit down with me for an interview this past Monday. In the spirit of bi-partisanship, we talked at the same table in the same Coffee Shop where I interviewed Ken Buck a year ago. Mark Udall comes across with the gravitas most Senators have but does so in a way that is personal and friendly. He also provides the most wide-ranging answers of anyone I have ever interviewed. (In a good way – lots of interesting additional details.)

He first talked about the MLK parade he had just come from. He said it is the largest MLK parade in the country (go us!). He talked a bit about the history of trying to get MLK day made a state holiday here and his involvement in making that happen.

Mark next talked about Governor Abercrombie (HI) who he knew from when they both served in the House together. He made the spot-on observation that some legislators are able to transition to the executive job, and some aren't.

I first asked about his proposal for mixed seating at the SOTU speech. Senator Udall said "I'm going to call Senator McCain and ask him to be my date." (If you see them together at the SOTU – don't ask if they're on a date, and Senator McCain won't tell.) He is hopeful that we will dial back the hateful political speech to some extent.

I followed up asking why he thinks we have such violent and extreme speech. Mark first brought up that Democracy is a replacement for physical battle and as such it is only a bit removed from that level. He next talked about the political discussion at the time of our founding fathers, which was even worse than what we have today. He then said to all that you add in the large number of 24/7 news sources, and you have this talk constantly bombarding everyone.

He then discussed how people are mostly involved on issues they are passionate about. And passion tends to make you view an issue in black & white and that also leads to this extreme discourse. I asked if things would get better as we learned to handle this new (and still changing) world. His answer was that he doesn't know. Senator Udall does see part of the problem being that people are facing economic uncertainty and that also leads to a more divisive discourse.

Mark then shot into the economic picture most people face, where they took out a home equity loan figuring the economy would continue to grow, and now find themselves faced with the payments on reduced (or in some cases no) income. He used himself as a personal example where he took one out to put solar panels on his house. (This is a good sign that Mark Udall has not been bought by lobbyists – he's still paying that loan off.)

I next asked about what do we do if 70% of the workforce can provide for 100% of the populace (I call it the Craigslist Effect). He talked at great length about the need nowadays for a College degree for a good job, and how for most people with a degree there's a job out there for them (true on both counts). Mark then went on to say that he had not thought about the possibility that with the technological advances now occurring, that we might be facing a permanent lack of jobs even with more college degrees. He then said that this is something they will need to take in to account.

The next questions was how do we address our increasing debt rate. Senator Udall immediately replied he would like to see an up or down vote on the Bowles-Simpson proposal. He said that while there are elements in it that he intensely dislikes, he would vote for it because in sum total it is a good start on addressing our debt problem. He then talked about how we have so many special interest groups, and all of them are fighting to protect their one piece of the pie.

He then discussed the line item bill he was a sponsor of back when he was in the house. How the President could use that to reduce spending and say no to the lobbyists that were able to get their piece protected in Congress. This segued into a discussion about earmarks. He discussed how the true cost of earmarks is much greater than the actual dollars allocated. First is the immense amount of time required to wade through all the requests, research them, talk to everyone asking for one, etc. And all that is time that is not spent on oversight, on discussing legislation, on all the other parts of the job that are much more important.

It also skews priorities based on political effort instead of dispassionate ordering. In some cases it moves items to the head of the line, which then teaches everyone else they should also lobby for an earmark to boost their priority. Even worse, in some cases it pulls money where it is legitimately needed to use it on something much less important. He brought up the example of money needed by NIST to upgrade some decades old parts of their facilities, and that instead was sent to an aquarium.

And then once the earmarks are in the spending bill, then there is a ton of pressure on each Congressperson to vote for the bill, because voting against it means voting against their earmarks.

My $0.02: I think Senator Udall is spot-on here and that ending earmarks would dramatically improve Congress, both for the reasons he lists and because it is inherently corrupting of the political process. He feels passionately about this, here's hoping that can be part of ending the practice.

I followed up asking why is the federal (as opposed to state/local) government paying for all these local capital improvements. Senator Udall said that it is partially that the federal government stepped in to do so during the depression and then increased the effort a lot under the Eisenhower administration. And so we're continuing from that. He then added that legislators like capital expenditures because they can look at a specific positive result of their efforts and that makes them feel good.

The next question was the gigantic cost of our military. Mark first discussed the military expense in general, then talked about how he talked to a lot of people before voting against the Iraq war. That Iraq was a fight, and an expense, that we should not have incurred.

On Afghanistan he said we did need to go in, but that the Bush Administration then turned their focus to Iraq and ignored Afghanistan. He added that he supports the President's plan to get us out. Senator Udall then went on to discuss the wasteful military spending on projects we have no real needed for like the C-17. He also called out the military for leading on the issue of moving to alternative energy where possible because they realize that dependency on foreign oil and global warming are both major military threats to our country.

We then moved on to the cost of medical care. He talked about how the bill was primarily focused on providing care to everyone, but that there are items in the bill that there are items in the bill that will help decrease costs. He particularly called out the Medicare Advisory Panel that has power similar to the base closing commission to take an independent look at Medicare costs and propose a set of changes that the Congress must accept or decline in full. (Here's hoping they accept it.)

He then discussed how we have every type of medical system here from government run (VA) to government paid (Medicare), etc. And how we know how well these various approaches work. Mark then went on to discuss a book where a reporter with a bum shoulder went to doctors in multiple countries to get it treated, listing out the treatment and the cost. He concentrated on the treatment in India which was the cheapest, and one of the most effective (yet his insurance would not pay for it).

For my final question, I asked him about fundraising. He looked very pained at first as he discussed how awful that part of the job is and how much time it takes up. Time that cannot be spent talking to constituents or working in Congress. He first said that he sells it to donors not as an investment in him, but as an investment in Democracy. And that's the only way he is willing to ask for funds.

Mark discussed how the giant cost is TV time. He first discussed matching funds where candidates would have to raise a reasonable amount to show there were people who supported them. But with that minimum, on the order of $100,000.00, then there would be matching funds to fill out the campaign.

He next talked at depth about transparency so any donation was up on the web within 24 hours. So we would know who was pouring money into what. I asked if that included 3^rd parties and he said yes 3^rd party groups too. He also said ads funded by corporations should require the CEO at the end of the ad to say they approved the message (I love this idea!).

Mark then discussed removing all limits. He brought up the example of Eugene McCarthy ran for president and what made that possible as a 1 million dollar donation from one person. That donation, being from a single person, allowed McCarthy to concentrate on campaigning instead of fundraising.

My $.02: I think the trade-off of allowing unlimited contributions in exchange for immediate and full transparency is really good. I'd rather our Senators each got 1 million from 10 people, and we know who those 10 people are, than $2,400.00 from 4,170. Because we'll pay close attention to the interests of those 10 vs. our Senator's vote.

This then dove into the discussion of is a corporation a person. Mark is against both rulings on this account, but thinks it will require a constitutional amendment to change that. He also brought up the great point that if money equals speech, there's a lot of people not being heard.

I got a chance to sneak in one more question. I asked him who is his insurgent. He talked about a number of people, both on staff and friends, that he will bounce things off of. But it didn't sound like any of them were people that come from a significantly different perspective. (He's not different from the vast majority of representatives in this.) He did then say that his wife is probably the person who is his insurgent.

He then talked about how it is so important as a Senator to punch holes in the bubble that surrounds them and get out and talk to people. To get a clear picture of what people are concerned about, etc.

Finis

The most interesting part of this interview (to me) was Senator Udall's discussion of the negative ramifications of earmarks. It shows a deep understanding of the problem. And it was clear he has an equally strong understanding of numerous issues. That understanding, and openness to how to address issues speaks well to how he approaches legislation.

My regret on this interview was that the short time meant we did not get to most of the questions. I think there would have been some additional interesting answers, but a Senators time is extremely limited.

Full interview: MarkUdall.wmv

If the State of Colorado is Serious About Jobs

Jobs, jobs, jobs! Every politician in Colorado is claiming that they are totally focused on jobs. But then in so many (not all) cases, they then fall back on the same tired proposals they present for any problem. So let's look as what's really needed.

First off, increasing the number of jobs in this state comes primarily from one source – new companies. (The theory used to be all small companies, but further investigation showed that it is small companies less than 10 years old that provide most jobs.) And of those startups, we need companies that sell outside the state. A new coffee shop is a new company, but it's a zero sum game because it does not increase the money coming into the state and therefore is offset by a job loss at another coffee shop.

What we're talking about is companies like mine. Most of our employees are in Colorado but 98% of our sales are to companies outside of Colorado. Over half are outside the United States. We have customers worldwide including in PRC and India. Oh, and as a software company we provide jobs that pay well, are in a great work environment, and have minimal negative impact on the environment. What's not to love.

Ok, so what we need to focus on is encouraging more successful startups and helping the existing startups. These startups do not need to be exclusively high-tech, but they do need to be focused on selling worldwide. This is not to say we tell all other business to take a hike. Anything that helps any business increase jobs is a good thing. But the focus should be where the new jobs are – and that's startups.

So what to do? There are actually a number of actions the State can take that will have a significant impact. And while I have split them up by time, I don't mean wait on some, I mean some will take time to have their impact felt. But we need to start on all of the below immediately.

Immediately

1. Place quality people in charge of the state agencies. A benchwarmer like Roxy Huber at Department of Revenue negatively impacts every business in the state. And the smaller the business, the greater the impact. An impact that puts resources to extra effort required by the state rather than hiring additional employees.
2. Require state agencies to give businesses clear specific answers when they ask what they need to do to meet the rules, what tax/fee has to be paid, etc. And the agency lives with that answer for a year. In most cases businesses just want to know what to do and telling them to guess creates an antagonistic relationship that costs money. And again, that is money that would be better used to hire additional employees.
3. Have state agencies look to Colorado businesses for goods & services. Some agencies are good about this. But others like OIT have an ABC (Anywhere But Colorado) policy when they look to make purchases. If a local company has the best product or solution – aren't they at least worth a look? I have had 3 companies tell me they have a product that provides the functionality needed for CBMS – but OIT refuses to even look. I don't think high prices, an out of state address, and lobbyists should be required to do business with the state.
4. Boulder has a phenomenal program with Tech Stars. It does more than just find 10 companies too, all of the applicants learn a lot from the process. Some of those others also go on to success. It has also built an infrastructure of advisors and consultants that are key to a vibrant start-up community. But we need more. We need this for industries other than software (starting with green energy). And we need these groups throughout the state – at a minimum in every city we have a University in.
5. Don't do stupid shit. High-tech workers tend to be libertarian on social issues. Disallowing civil unions sends a message of intolerance which turns people off. Opposing immigration when 1/3 of the people starting high-tech companies are immigrants is a giant flashing Go Away! message to the people we want here creating new companies. Talking about reduced taxes in the present economy is telling people that the quality of life here will continue to degrade.

Medium Term

1. Quality high-speed broadband everywhere. If three people can create a company and run it out of their house, with a server in their basement to be their face to the world, you've dropped the barrier to entry to nil. But for that to work the line has to stay up (Qwest tends to drop connections for a couple of days once a year), it has to be fast (we're talking 40mbps bi-directional, not 1.5mbps down/364kbps up), and fast everywhere (not just downtown).
2. Handle sales tax statewide – with a single rate. The present mis-mash of taxing jurisdictions, each with their own laws as to what is taxed and different authorities to report to (yes, over 80) is not workable in a global economy. At present I would advise any company selling online to not locate in Colorado. Or if they do locate here, to not sell to anyone in the state. Get the top 7 cities together, hammer out an agreement on how the state can handle this for all of them, and then invite the other home rule cities to join. If a little town like Ft. Logan opts out – fine they can be a do not sell zone for the world economy and the rest does fine. And by having a single tax rate state-wide, you eliminate the use tax case of buying in one city to use in another.
3. Eliminate the high overhead taxes. The business personal property tax is the worst – at my company we spend as much calculating it as the amount we pay. If all companies paid the same amount, but didn't have that overhead, then the state is equally well off and the private sector would have had money to hire another thousand people or so. Replace these taxes with a carbon tax fee.

Long Term

1. Fully fund SB-191. We have spent months trying to fill 4 full time and 3 paid internship positions. Last week we finally filled one of them. We have high unemployment and yet there is a severe shortage of qualified people to hire. Why? Lack of education. If you had twice as many Computer Science students at C.U., every outstanding student would have an internship offer today and multiple job offers upon graduation. To create this workforce requires first that we fix K-12 so that most children graduate prepared to excel at a good University. SB-191 gives us a means, but we have to implement it, and implement it well.
2. Adequately fund High Ed, and double its capacity over the next 10 years. This will require a significant investment as we flip from a state contribution headed toward zero to one that makes College very inexpensive for in-state students. And either adds or grows campuses to increase the capacity. But without this, Colorado's high-tech business community is already limited due to the lack of qualified people to hire. We can't grow to be a leading economy of tomorrow if we don't make the investment in Higher Ed – starting now.
3. Address our crumbling infrastructure. People who work for high-tech companies can work anywhere and are well paid. If their goal was low taxes they would move to Mississippi or Somalia. What they want is to live in a nice place with a quality infrastructure. I'm not saying go overboard like Boulder does, but if we have unsafe bridges, uninspected restaurants, etc. – well a 2^nd world infrastructure will get a 2^nd world workforce. And pretty mountains don't make up for being robbed monthly due to reduced police protection.
4. Address TABOR, Gallagher, Amend 23, etc. This is such a giant interrelated mess that it requires a constitutional convention to clean it up. Take a deep breath and set that in motion. By definition any new constitution will require strong bi-partisan support to pass so the worries about the final product being a left or right-wing wet dream are overblown.
5. Get rid of sales tax. First off it's counter-productive because jobs come from people buying stuff. The more they save the lower the demand and the fewer the jobs. Second, it's got a high overhead for companies that sell services and digital goods world-wide. What you want are taxes that get the state their money with minimal additional cost to the business. Increase income and/or property taxes to compensate.

Governor Ritter put it well in his final interview – we need to have an adult conversation about the fact that providing services requires taxes. And that the economy and quality of jobs we will have in 5, 10, 20 years is directly dependent on the money we invest now. This is not to say that there is only one reasonable conclusion from that conversation – if you're 60 years old and have no children, then letting the state degrade so with your lower tax rate you can afford an upgrade on your vacations is a logical choice. And for those that do want Colorado to be a leader in the new global economy, while I think the above goals will be uncontroversial, how to accomplish each is a gigantic question where multiple viewpoints should make for a better approach.

But any politician who says "jobs, jobs, jobs" and is not focusing on items like the above – is either duplicitous or does not understand the economy of today (and tomorrow). And to the (hopefully small) GOP component who is saying the answer is lower taxes and reduced regulation – trying to fit your preferences to the situation shows an utter lack of intellectual rigor. The wise person is one who is willing to let the facts trump their beliefs.

News will Find Me

One of the best comments I have heard about the future of news is a teenager when asked how he reads the news said "that news I need to know will find me." In other words, he does not go to any news website, nor even a news aggregator. But through his social media from Facebook friends, tweets he follows, etc., he will get any news that is relevant to him.

This is not just the future of how news will be delivered, it's the present. Demographics trumps all and everyday people who actually pull news from a news source die of old age while people who won't are born. Going by memory I think it's now age 35 where no one younger reads a newspaper or hits a news website regularly. This is a significant chunk of the population and over the next couple of decades will approach 100%.

So what does this mean? Well here's a couple of gigantic things:

1. The mainstream media is trying to present their content on their websites in a way to move people from their newspapers/magazines/TV to their websites. This will fail. Younger people have no interest in a destination news site. None. They are interested in specific content produced on that site important enough that it finds them. So the problem just got a lot harder – it's not how do you monetize your news website, it's how do you monetize individual stories.
2. How do political campaigns get their message out? Most people will not find the messaging from a campaign "news I need to know." A large and growing chunk of the populace does not see TV commercials between TIVO, Hulu, and bittorrent. Campaigns are going to have to figure out how to create content that gets forwarded and read.
3. Cells phones are no longer a device we use, they have become an extension of ourselves. Yes we use computers, iPads, etc., but the phone is how we plug in to the world. And as such, it's where we will be receiving most of the news we read. Content optimized for this form factor and delivery channel will dominate.
4. We will all have a personalized news feed (for lack of a better term as most will see it just as additional information they get over the course of the day). This will even further segment us as no two people will read the same set of news.

There's a lot more we'll see change because of this. But I think we will see most existing content providers go out of business. Not just news organizations, but record labels, movie studios, TV broadcasters, book publishers – across the board. Most are still half fighting the changes so far and half trying to force their physical model onto a web page – and failing at both. The world's changing ever faster and outrunning the old businesses at a greater and greater rate.

On the plus side, new companies are coming along to step in and take advantage of the opportunity change provides. I think 10, 20, 30 years from now we'll have quality news providers, quality songs, movies, and books all being produced. I think the people producing it will make a good living. But the mechanism will be very different from today and the giant companies that were the middleman/gatekeeper for all of this will be replaced (or for a few, radically changed).