Unbroken Glass

Unbroken Glass is a warm, sad, endearing and sometimes funny documentary centered on an Indian immigrant family.  Dinesh Sabu, the youngest of five children, attempts to piece together the lives of his parents that tragically died a month apart when he was just six years old.  Their deaths left the five children to raise each other and cope with the loss.  Densely packed with several themes, Sabu’s work explores the lives of his parents and the themes of loss, marriage, mental illness, acculturation, religion, and even gender roles.  With few memories of his own to rely on, Sabu must turn to interviews with his siblings and other relatives to find out who his parents really were.

We learn through the narratives that the father died of stomach cancer and the children were not prepared ahead of time for his death.  Sabu is merely informed one day when he gets home from school that his father is gone.  His mother then dies less than a month later by her own hand after battling schizophrenia through most of her adult life. Undoubtedly, the stigma of mental illness and suicide are major factors in the silence that was maintained by the family. 

The film deals with her illness, and the childrens’ experience of it; how she was available to them sometimes, and sometimes not, as she would lapse into a cold and catatonic state.  Their recollection of their parents’ marriage was as of a stormy one—their fights sometimes devolved into shouting and physical altercations.  Still, despite false accusations of infidelity from his wife, their father stayed and soldiered on.  He coped by burying himself in his work, perhaps resigning himself as her caretaker.  One of the children commented that without someone to care for them, many schizophrenics end up on the street—which may well have been the fate of their mother without their father.

It’s clear that the mother attempted to fit in to the U.S. despite her traditional Hindi upbringing– the family uncovers old photographs show her in modern American dress that would be deemed scandalous by the standards of homeland.  Sabu nicely contrasts his mother’s acculturation with his own attempt to reconnect to his family’s native culture as he prepares for a wedding in India.   Yet, despite her own admittance to medical school, the mother foregoes a professional life and marries a man that is well educated and has a future—adopting traditional Indian gender roles.

We learn that schizophrenia runs in the family and that there have been multiple suicides in his family tree that resulted from it.  This fact provokes the painful decision of whether to take on that risk by having children.  One of the sisters weighs her thoughts during the interviewing and decided that she will, in fact, take the plunge.  We are left to wonder whether any of these five or their children will succumb to the family curse.  We wonder also whether the mother’s genetic predisposition was triggered by the stress of moving to America.

This film conjures up another excellent book of the same genre:  The Lost: A Search for Six of the Six Million by Daniel Mendelsohn.  In his book, Mendelsohn, a descendant of Holocaust victims, took up the challenge of learning about his great aunt, great uncle, and their four daughters to discover exactly who those six people were.   Like Sabu, Mendelsohn’s family was encased in silence about them until he discovered some letters that piqued his curiosity and he spun out a wonderful mystery book from the fragmentary bits available to him.   It seems that we often have an almost innate drive to tell the story of our blood, especially when it is tinged by tragedy or misunderstanding.  It gives meaning to the lives that are gone and helps us to come to a better understanding of ourselves.

I told a friend that the film provoked the question of what my children will say about my wife and I after we are gone.  My friend said, “Why don’t you ask them now?”  It wouldn’t do any good. That story is still in progress and while memories may be a bit clearer, you do not gain perspective until much time passes and you are able to go through all the photographs, read the letters, and visit the places they inhabited.  Because of the parent/child bond, they are unlikely to give you a candid view.   Often, our complete stories will not be able to be told until long after we are gone.

Sabu does all that in a warm, yet painful way that will provoke questions and thoughts that linger for days after.   Despite the tragedy and years of silence, one can detect an underlying tensile strength in the family.  We are on another level awed by the resiliency and resourcefulness of this family that survived a terrible tragedy. This is a surprisingly complex short film that can be viewed through several different lenses.

Taking on the Regulatory State

One of the front pages stories in this Sunday’s New York Times concerned the feelings of dread among employees in the federal bureaucracy.   The arrival of Donald Trump has “spread anxiety, frustration, fear and resistance” among the federal workforce.   Last week, the press reported that EPA employees were showing up to work in tears.

I don’t mean to be unsympathetic, and I certainly don’t want to convey any schadenfreude over someone that worries about job loss, but my immediate reaction was, “now you know how the rest of us have felt –more or less constantly---over the past 8 or 9 years.”  The uncontrolled Bureaucratic State was partly to blame for our anxiety and fear. Under Obama, this Bureaucratic State flourished.  The election of Donald Trump is, in part, a response to its growth.  

There are four principal sources of resentment that began to boil up due the explosive growth of the Bureaucratic State:

• Growth of regulations, period.  They were especially pronounced in financial services, health care and the environment.   More and more business owners were complaining that a larger proportion of their time was being unproductively consumed by trying to satisfy the whims of their local regulator rather than innovating and providing goods and services to their customers.  Worse, the regulations sometimes had the perverse effect on segments of the population that government purports to help.   For example, when the Department of Labor promulgated regulations that consolidated franchisees, making them subject to federal wage and overtime regulations, those regulations threatened the viability of the entire industry.  Franchisees are disproportionately minority and therefore, the consequence of these regulations is to threaten to deprive these entrepreneurially minded people of the opportunity to run their own businesses.

• Safety and security of these jobs vis-à-vis the private sector.  The conventional wisdom used to be that government workers were trading off income for security.   But as the power of government unions grew and politicians learned that they could compensate them with health and pension benefits that remained largely out of the public eye.  In addition, many government workers can retire 10 years or more ahead of the normal retirement age.  This unholy alliance is exactly why Illinois is insolvent.    If you measure the TOTAL adjusted compensation of a government worker and take into account all forms of compensation and risk adjust the income because a government worker has a much lower risk of pay interruption, you’d see that government has been overpaying for its labor and paying more for comparable skill than the private sector…and citizens are now figuring that out.
  
• Targeted industries.  The Obama administration initiated Operation Choke Point, under which banks that did business with certain disfavored industries were subject to additional scrutiny.  Payday lenders, e-cigarette companies, and –you guessed it—manufacturers of arms and ammo could have their liquidity crimped because banks were simply not going to open themselves up to even more headaches from regulators.  Through Operation Choke Point, denying arms to those who could not show themselves to be financially self-sufficient under Social Security, or who ended up by mistake on a no-fly list, Obama tried to curtail 2^nd Amendment rights as much as possible through regulatory action and executive orders.  Without any legislative action at all, the Obama administration waged war on certain industries by raising their costs so dramatically or so impairing their access to capital that it became uneconomical to compete.
  
• Contributor to income inequality.  Progressives have been beating their drums about pay inequality for nearly a decade now, with Thomas Piketty (Capital in the Twenty-First Century) as their intellectual standard bearer.    Income inequality is THE social and economic problem to be solved (never mind education, innovation, productivity, infrastructure, government debt) and that argument is used to justify government taking MORE resources from individuals.  But economists have established that firm size is related to income inequality---big companies pay better.  And the growth of the Regulatory State is driving consolidation in many industries.  As is often the case, Progressives are complaining about the consequences that result from enacting THEIR policies.  The Regulatory State is a contributor to the growth of income inequality.

I knew something was out of whack when the most sought after talent in corporate America ceased to be “marketing executive,” “strategist,” or “operations officer,” but rather “chief compliance officer.”  Many CEO’s intimated to me that they were considering selling their businesses because they just couldn’t afford to hire additional overhead in nonincome producing staff jobs just to comply with government regulations. The ACA was particularly painful and costly to small employers….especially companies with unions where the union contract required the employer to pick up most or all of the tab related to premium increases.   I was involved in sale of one in particular last year that was a direct consequence of these costs.   The acquiring company bought the assets and terminated each and every employee.  Likewise,  Dodd-Frank  has been devastating to community banks.  Only one new bank has been chartered nationwide since its passage and the number of community banks has been reduced by about 14% and has driven, and will continue to drive, consolidation in finance.   Small banks simply cannot afford the compliance costs.

What irks me most about the New York Times article is that the paper was blithely unconcerned about business owners and their employees during the past eight years.   From 2009 to 2014, I worked in the workout or “distressed asset” area of a regional bank.  This bank made business loans principally to small and medium sized businesses.   The four years of 2009 to 2013 were perhaps the worst I have ever seen in business.  For some manufacturers and distributors, volume drops of 20-25% were not uncommon.   Several CEO’s were reduced to tears in my presence and, understandably, some responded with anger.  Businesses that took a lifetime to build were sometimes forced to be sold, liquidated or had to make painful choices.    More than one business owner reached into his or her personal retirement funds to make a payroll.   So many of these owners worked tirelessly, endured many sleepless nights,  came up with creative alternatives,  often swallowed their pride, and demonstrated great creativity and resourcefulness to keep their businesses afloat and many of the families of their employees solvent. 

When the maelstrom hit in ’08, several economists advocated a regulatory freeze for 5 years to let the economy heal.  Business—particularly small businesses and small banks could not withstand the additional costs.  The Obama administration ignored those pleas and doubled down.   Regulations exploded under the Obama administration with the Federal Register reaching almost 97,000 pages under Obama’s aegis.    A financial institution I know quintupled the number of people in their compliance department.  It was estimated that regulations added $100 billion in annual costs to an already staggered economy that was suffering from inadequate demand.  Under the Obama administration, light bulbs, microwave ovens, and school lunches came under the federal government’s regulatory thumb. 

The power and unaccountability of the Regulatory State has grown unabated and more lawless.  Charles Murray, in his incisive book By the People: Rebuilding Liberty Without Permission  lays out just how the Regulatory State ossifies our society.  Probably the most egregious examples are the EPA, which has not only failed to comply with the law itself by failing to deliver required cost/benefit analyses, but famously polluted the Animas River in Colorado.   The CFPB was structured to be out of the reach of Congress and to be run by a single individual.   That’s per se tyranny—government completely unresponsive and unaccountable to the people.

There are certainly dedicated individuals within those regulatory bodies.  But they have had a safe, unperturbed existence and for decades were at little risk of losing their jobs.  For once, they are feeling a taste of the anxiety, frustration and fear that their brothers and sisters in the private sector have been feeling.   No U.S. president has been able to reverse the growth of the Regulatory State—not even Ronald Reagan.  By putting people in charge of these agencies that will challenge these departments to justify their existences and by forcing them to take out 2 regulations for each one they put in, the new administration is imposing a form of accountability and prioritizing that the private sector has to deal with every day.   The REINS Act (Regulations From the Executive in Need of Scrutiny), which requires “major rules” and rules that have impact of $100 million or more on the economy to be voted on by Congress.

So yes, people working in government agencies will be anxious and frustrated.  Welcome to real life, boys and girls.  The salad days for unaccountable and all powerful regulators may be over.  It would be a welcome reallocation of human capital to move some of these people back to the private sector.

We’ll see if Trump will ultimately be successful in trimming the sales of the federal bureaucracy.  No other president has been able to arrest the growth of the Bureaucratic State—not even Ronald Reagan.  

People do not give up power and influence easily.

Ask Michael Flynn.

Foreshadowing Trump--Not Brexit

Of course, many commentators and pundits caught the obvious connection between Brexit and the Trump election.  Many (wrongly, I believe) ascribed both occurrences to xenophobia.  To write both off to xenophobia is simplistic progressive narrative.  Immigration policies played a part in both instances, to be sure, but there were other factors at play here.  The foreshadowing of Trump, it turns out, was not so much Brexit as the election in Illinois. Illinois had become a solidly Democratic stronghold, the center of the donut in what I have tabbed the “Stale Donut Strategy” (take both coasts with Illinois in the middle with leadership that is in its 70’s).  Illinois had delivered on a national level for years, buttressed by liberal senator Dick Durbin and Democratic lord Mike Madigan, and anchored by a city run by the Daley clan for most of 5 decades.  Only Jane Byrne and black Democrat Harold Washington interrupted the string, and then only briefly.    Republicans were totally in disarray at all levels.   The machine put up Mike Madigan enabler, Pat Quinn.  Quinn was a don’t-rock-the-boat kind of guy, not well spoken, a standard “dems and does” kind of Democrat, not someone eager to push back at Madigan or the existing order. 

But the existing order was killing Illinois.  It continued to fruitlessly raise taxes and Quinn, Madigan and Cullerton promised even higher hikes as the state’s debt ballooned.  Illinois workers didn’t work much, got lifelong fat pensions and health care and early retirement while the rest of the state’s workers suffered.   Businesses fled along with high earners. 

Along came Bruce Rauner, a wealthy businessman who had made a fortune in private equity but had no political experience.  He financed his campaign mostly with his own money, and promised fundamental changes in the way government conducted itself in Illinois.  He was able to convince voters that the state was run entirely for the benefit of the insiders and that the taxpayer was getting fleeced (sound familiar?).  He was able to defeat the Democratic machine—the unholy alliance of Madigan, the real estate interests that fund Madigan and the army of city and state workers that feed at the trough.  Rauner continues to push hard for fundamental reform--not just tax increases.  This drama is still playing out, as Rauner is steadfastly holding the line against tax increases before structural changes are made and Mike Madigan (and his AG daughter Lisa) equally determined to hang onto power. 

This drama was played out on the national level.  Like Bruce Rauner,  Trump had no government experience and financed his campaign largely out of his own pocket.  Trump had to defeat the establishment in his own party, but, like Rauner, was up against forces with very vested interests, a well financed opponent with a deep and entrenched network.    Hillary Clinton had over two decades to put together a well-financed organization and messaging machine.  And, like Mike Madigan, she had a very reliable base of government workers that would turn out to the polls.

Both of these candidates were businessmen that were up against history (other nonpoliticians like Jesse Ventura and Arnold Schwartzenegger  had failed) and well entrenched, well financed forces with powerful economic interests wedded to the status quo.  But the polity decided that the state was no longer serving its citizens.  Rather, the mechanisms of the state were used to empower and enrich the political class and those that feed off it.  And in both cases, the resources the State was commandeering was not nearly enough to feed it.  Both Illinois and the federal government were taxing at higher and higher levels and the deficits and debt grew larger and larger.   Yet the problems that each was entrusted to solve weren’t being solved, or worse, the wrong problems were being solved.   Pat Quinn in Illinois represented the status quo and incremental change.  So did Hillary Clinton.  Neither saw that the State was failing its citizens and both campaigned on a promise of draining more resources from private citizens to fund the State.

The citizens decided to risk a change.  They decided to shrug off the status quo and turn to businesspeople that solved real world business problems, that had to bring balance budgets, hire the right people and fire people when necessary.  Neither person got wealthy by leveraging experience in government but by doing deals in the business world.   Neither person NEEDS the job.  Both of them have promised fundamental, not just incremental changes in the way government operates.

As expected, both are being fought tooth and nail by the forces of the status quo.  Rauner has the Illinois and Chicago Democratic machine to contend with.  Trump has both liberal Democrats, establishment Republicans and the mainstream media arrayed against him.  Viewed this way, you have to ask who is “bitterly clinging” now?

Yes, Brexit preceded the Trump surprise victory, but the real foreshadowing and closer parallel was the improbable victory of Bruce Rauner in Illinois.