Dr. Forbush Thinks

There isn’t anything that could be proclaimed the silver bullet to cure all our ills. There are, however, many things that we should not ignore because they are quite important concepts. One of these things is known as “Return on Investment.”

People that have capital spend a lot of time thinking about ROI. Some people make ROI the most important thing to consider when they determine what stocks to buy or what efforts they should promote. This is not evil, this is part of the American way. However, ROI is not the only issue that one should consider when they think about investing. For example, a loan shark certainly has a huge ROI when he loans money to an addicted gambler. If the loan shark is also the bookmaker, then he can’t lose. The guy will bet in hopes of paying back his loan. If the sucker loses the loan shark gets the money bet, plus he can hold the debt over the sucker’s head. If the sucker should win he still gets paid back, and he gets the high interest rate to boot. This is known as a low risk high ROI deal. And, it is illegal precisely because of this.

It turns out that the goal of most people is to spend the least amount of money and get the highest ROI.

But, there is a problem with this when we talk about government. The idea behind government is that we all contribute to an effort to provide something that we can not have on the individual level. There are many examples of things that the government can provide, but individuals can not provide. One of these is law enforcement. From a practical point of view law enforcement needs to be controlled by everyone in an agreed upon way. This is because if a small group determines law enforcement priority on their own they will be certain not to enforce any of the laws that they personally break. If the entire community has oversight, then we should be confident that law enforcement is being applied uniformly to everyone. So, as a community we all agree to contribute to the effort of law enforcement in the belief that the safety and security that they provide will be worth the expense of the project. This safety and security is the ROI in this effort.

We should keep in mind that this safety and security allows us to participate in other activities that could be impossible without this safety and security.

Return on Investment is not only about money as was illustrated in the example above. Safety and security are intangible returns that allow us as a community to improve our lives. And, government does not make money for us, instead it helps us to make a better life by doing the things that we can not do on our own. We can not be our own personal security system, unless we live in a shack in the mountains of Montana. But we can contribute to the community so that we can have both safety and security.

There are other ways in which the government can provide a good ROI. One system is the US patent laws that not only protect inventors when they come up with a new invention, but it also allows us to distribute that information to others once the patent runs out. Maintaining this system encourages the sharing of technology, which is a good return on investment for us as a community.

There are many examples of positive effects on our society from a community effort.

Of course there are risks with every investment. In fact, ROI is usually higher when there is more risk. For example, one of the highest risk adventures that the United States ever took on was John Kennedy’s risky effort to land a man on the moon. “We do not do these things because they are easy, we do them because the are hard,” he had said and it continues to echo into our time. The success of that mission was not guaranteed, in fact it had a high probability of failure. But, the ROI on that effort was to thrust America far above the Soviet Union in the eyes of the world. America regained what it had lost when sputnik shocked the world as it sailed over our heads.

In recent years, however, those in favor of small government have condemned many government projects as being too risky or unrealistic. These people have some strange idea that hard work without risk will yield an America rightly placed at the top of the food chain. But, unfortunately these people do not understand the concept of risk and ROI. Somehow these people believe that private enterprise is enough to triumph over everyone else. Somehow people with money will figure out how to spend their money and succeed without the aid of everyone pitching in together. This is the same mentality that has us thinking that we don’t need to sacrifice anything and we can still win the war on terror.

I was listening to a talk by Rajiv Chandrasekaran about Iraq. He has written a book entitled, “Imperial Life in the Emerald City: Inside Iraq’s Green Zone.” We already know what a debacle Iraq is, but Rajiv gives us some additional insight into why we are having such horrendous trouble in Iraq. The key to many of the problems is that the Bush administration did not look for the best and the brightest to go to Iraq and build the new democracy. Instead, they hired Republican ideologues to build Iraq in the blueprint of their own views of and ideal nation. This was a giant experiment in nation building where the blue print was the same plan that Republics envisioned for the rest of us in the United States. They believed that a 15% flat tax was the solution to all their problems, so they implemented it in Iraq. They believed that health care could be solved by creating the proper formulary. They spent months writing an Iraq formulary where drugs would be provided by US companies while people died of infections because they couldn't get antibiotics. The bureaucrats in the Green Zone spent an enormous amount of time writing intellectual property rights laws while they bought black market DVDs because their DVD players provided by Haliburton wouldn’t play the DVDs sold legally in the PX. The issue here is that these ideologues had no idea what the ROI for their efforts would be. They lost sight of the reality of the situation. Instead they came to believe in the ideology without the thinking about the reasons that these ideas were proposed.

We still have this problem in this country. We see it everywhere that people don’t think about the ROI. What is the return on investment in Iraq? What do we hope to gain, and is it worth the $400 billion plus we have spent in Iraq? We hear about how much it would cost to retool the American automobile industry to cut back on green house gases, but we don’t think about the return on that investment. How much will the change in climate cost us if we do nothing? Then there are obvious things that cost so little, but we don’t realize the ROI. It would cost $30 billion, one tenth of the cost of the Iraq effort so far to preserve most of the bio-diversity in the world today, but some say that the cost is too high. There are thousands of potential drugs that could be isolated from these rare organisms.

Unfortunately the bottom line does have to do with return on investment. But the return is not the public’s profit, but instead the leaders, corporate power and the capitalists that benefit. They believe that their personal return on investment is the most important issue. Those with the money buy the politicians who seek the power. The money spent requires a return on that investment, or the politician won’t see the any more money. The politicians don’t care about the public’s ROI, because they get theirs in the way of the power that they seek. The only way to keep these people in check is to continue to ask the right question; what is the return on investment?



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Don't forget what Stephen Colbert said, "Reality has a well-known liberal bias."


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