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 Response Page  -  Fred Zimmerman  Interview  -  Economy Issues    

These comments are responses to the questions listed below,
which were generated in regard to the
Fred Zimmerman Interview of 03-20-09.

 
The questions:

_7.4 average_____
1.  On a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, what is your view on whether the service sector has become too large a portion of the nation's economy relative to the production sector (e.g. manufacturing)?

_8.2 average_____ 2.  On a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, what is your view on whether pension plans for public employees have become so generous that there'll never be enough money to pay benefits as promised?

_7.2 average_____ 3.  On a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, what is your view on whether many college professors spend too much time in non-productive meetings and not enough time in teaching and research?

Larry Baker (8) (10) (9)

Kent Eklund (2) (8) (5)

Bert Press (10) (10)(5)

David Broden (5)(10) (5)

Question 1:  The issue is not whether the service sector is too large it is rather has the economy adapted to how to work with the value added of a service society and how the service society is integrated with other elements of the overall society and the economy--service, manufacturing, , and other elements.  If believe in free trade and that the type of work done is dependent on the cost of the work and resouces in each area then perhaps we need to become better at balancing the types of content in our society and leveraging each accordingly. We also need to define what we mean by service to include not only retail, waiters, janitors, etc. but to include high tech , software, engineering, etc. Need to have a big picture view and  with that be sure that the service element understands that what they are doing in some way does relate to real work not just pushing paper etc. The key is to build a better understanding of "what value added really is--that is what is work"

Question 2:  There is a critical need to begin a dialogue that is state and national regarding the role and benefits related to the civil sevice system at all levels of government. This rapidly focuses on not just what the role of civil service is but how do we pay for the service not just as the work they do is done but how they are provided pensions and how many pensions can be provided simultaneously and certainly at what age. The challenge that the private sector faces in pension must be extended to the public sector in a clear and serious discussion of the impact to government budgets etc. 

Question 3:  The academic community varies in style and effect by each institution and each department and discipline. As a whole the academic community could benefit by seeking to link more effectively with the community, with industry, and with policy makers. There is much done and said by academia that is positive and the sitting in meeting thinking is OK if it links with the real world in some ways. Frequent challenges from the public, from industry, and from within the academic community to ask the question of all academic community personnel the basic question--what have we done recently to help solve the issues and problems of our discipline is an important challenge that the academic community often overlooks. Asking for more self Discipline to provide the value added to the community as well as thoughtful discussion should be the goal of all in academia.  

Lyall Schwarzkopf (10) (6) (9)

It was refreshing to hear Fred Zimmerman really tell it as it is.  There was no sugar coating.

Bob White (9) (8) (6)

This is a really important issue.  On questions 2 and 3 I have no direct knowledge, so I'm accepting Zimmerman's findings.

On question 1, I've argued for years that we -- the U.S. -- are on a downhill slope because too many of us, individuals as well as companies, lack the knowledge and skill and incentive to make things.  There are big exceptions: 3M, for instance, and medical-alley pioneers like Medtronic.  But where's the market for, say, machinists?  It exists, if we're collectively wise enough to move the economy into building wind turbines and creating other green jobs.  Sure, the need also continues for plumbers and carpenters, and some of us still do a bit of what they do, and enjoy ogling the shelves of hardware stores.  We used to tinker with our autos; no more, and not just because they have become amazingly reliable, but also because looking under the hood is like landing in a foreign city with no street signs or maps.  (Response: Get a GPS.  I did, last summer driving in Spain, into urban tangletowns like Barcelona, where the machine's most frequent voice command was, "Turn around when possible.")  To conclude this rant: By making things I don't mean making credit default swaps.  Brilliant minds created them.  Look where they got us.  

Wayne Jennings (5) (8) (10)

I loved his comment about professorial production. Probably not the same degree, but I suspect it's much the same in many other public service areas and probably in the headquarters of large corporations. Responding to regulations, procedures, reviews and endless communication today the modern office job has huge amounts of lost productivity. In addition, too much time is frittered away sitting at computers reading and responding to blogs, gaming and personal pursuits. It just seems life and any kind of action has become far too complicated. 

Vici Oshiro

While I agree with, or in some cases simply accept, Zimmerman's ideas, your questions are too broad for a vote.  The service sector includes teachers and others who enhance our human capital.  The financial service sector grew too large and is now changing rapidly.  A few years from now I expect the retail sector to be a bit smaller too.  We cannot continue to consume as we have in the past 50 years.

Pension funds as now constructed are a disaster waiting in the wings.  But cutting health care costs and other modifications can alleviate some of this.

I'm not associated with any college so I must accept Zimmerman's opinion on the way they spend their time.  If they don't want to spend time on administrative tasks, then they will have to give up some (much?) of their influence on administrative decisions and accept the consequences.

Bill Kuisle (9) (10) (10)

Rick Bishop (5) (5)(8)

Charles and Hertha Lutz (5) (7) (7)

Ann Berget (10) (10) (8)

Peter Hennessey (0) (10) (5)

I don't see how this fits into your charter or past interests; certainly in recent meetings you have delved deep into micromanaging various problems. However,

Question 1. I went to college and spent my career in private industry during a time when the numbers and proportion of engineers, managers and tech support vs. production line workers grew rapidly, whether we were still making things in the US or increasingly overseas. The mantra was, humans should not be beasts of burden. Humans think, machines work. Even the human work during most manufacturing processes consists of operating machines or maintaining robots, not old-fashioned "work," that is, sustained physical exertion. It is economically and morally right that, especially in the mining and steel industries cited by the Professor, there should be NO humans doing the actual work, which by its very nature is very dangerous. 

So, this concern over the size of the service sector vs. the manufacturing sector is misdirected, if it focuses on the number of workers in each. The concern should be over the value of goods produced, and over the academic problem of the proper valuation of services vs. products. Even the unit productivity per worker is a suspicious measure. My father worked, as his third job during his work day, as the only night shift worker in a factory that consisted of endless rows of knitting machines rattling away all day and all night, 24/7/365. Every so often a machine would break a thread, a spool ran out and a full one had to be mounted, or a machine had to be taken off line if it broke bad enough. There were enough machines so he could not actually sleep on the job. But what great productivity; he turned out thousands of yards of knit fabric, socks, hose, whatever, all by himself, night after night.

I am especially annoyed by the financial sector's use of the term "product" when all it means is contracts with different terms -- checking accounts, savings accounts, mortgages, annuities, derivatives, etc. -- there is nothing "produced," only money shifted around different ways, and even that only in terms of symbols dancing on pieces of paper or on computer screens, not actual physical or paper money. How do you measure productivity in the service sector?

Question 2. The worst example is Congress. They get a pension at 100% base pay, full benefits, plus office and staff, for life, after only one term. Or so I hear. You can't extend that to all public sector employees, unless their numbers are greatly reduced relative to the number of people still paying taxes. 

Something has to give. Soon we'll have all the baby boomers retiring. 70 million good-for-nothing loafers expecting to get by on SS and Medicare benefits paid from taxes on whom, no more than 70-100 million people still trying to scratch out reduced-expectation lives from off-shored jobs? I don't know what the numbers are, but SS was no problem when about a hundred workers supported one retiree whose life expectancy was no more than 65. Now we are headed for a ratio of 1:1 or worse, living forever. Well yes, once upon a time we did have just such a situation, where one man supported 4-5 others, but we called it the nuclear family supported by the man's income. All the do-gooders had to destroy that, of course.

Question 3. I have no idea. When I was in college, my professors were either in the classroom or in the lab. Nobody was so depraved as to force them into useless meetings. Also we had very few people in "administration."

Carolyn Ring (10) (10) (5)

Question 1:  Even though I personally have been very involved in non-profits, add those to your service entities and you increase the percentage.
 
Question 2:  Most pensions from business and industry do not get the increases that  public employees receive.  Some public pensions, such as legislative and local councils were incentives for public service where pay was very low.

Jackie Underferth (8) (10) (10)

Al Quie (5) (10) (10)

Terry Stone (10) (10) (10)

Paul and Ruth Hauge (5) (9) (2)

David Dillon (10) (10) (5)

Glenn Dorfman (5) (10) (5)

Productivity growth is faster in the things that kids consume than in the things that the elderly need.   As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently. Productivity is notoriously difficult to pro­ject, but many forces will be pushing it downward as the Baby Boomers age.

Essentially, the next 20 years will require a massive transfer of resources and people away from the care of children, who will decline in relative number, and toward the care of old people.

Chuck Slocum (8) (8) (5)

Question 1:  We need to "reinvent manufacturing" in America; a high value part of our economy.

Question 2:  Public employment is essential and we need professionalism...pay and benefits must compare to private sector jobs but not be vastly superior, as is the case with certain pensions, etc 

Question 3:  I lack info but have heard the stories about certain faculty excesses.

Robert J. Brown (8) (10) (10)

Question 1:  As technology enables production to be done more efficiently with less people it appears inevitable that there will be some shift of employees from the production sector, but what is needed in the production sector is more people with technical training. Our overemphasis on four year college degrees has placed too many people in relatively useless programs (e.g., sociology unless you intend to be a college professor in that field.) I remember when Jim Benson was President of Dunwoody he commented on how many of his students were college graduates who came to his school so that they could become employable and make more money that they could with their college degrees.

Question 2:  We should have learned years ago when the police and fire pensions bankrupted the city of New York that these rich defined benefit pension programs, enacted when most of the employees were relatively young, would eventually lead to major financial problems for government as the group of public employees ages. Unfortunately, elected officials look only at what will take them through the next election. I remember in the 1970s the legislature changed the basis of teacher retirement from a career average salary to one based on the high five years. While this bought political support from the teachers’ unions it dramatically increased the unfunded liability of the state, particularly when inflation rose. We can see a parallel situation in the Detroit where it is impossible to make money on the cars produced there because of the huge retirement and other benefits won by the unions means that the companies cannot compete with others even though the so-called foreign companies are making their cars in this country.

Question 3:  I couldn’t agree more with my old friend Fred. To most academics the process is the product – they are great at meeting and very poor at resolving matters. They meet for the sake of meeting. I saw this not only here but all around the country when I worked on building business-education partnership for the U.S. Department of Education. When you would bring a group of educators together with a group of business leaders the businessmen focused on the goals and the educators focused on the process. One other point – most of what is called research in education, particularly in the social sciences, is merely grinding out useless information that will be published in “refereed journals” which will probably never be read, but can be used in gaining promotion and tenure. It would be much better if the research in my field (education) would be field based (action research) which could actually lead to some possible improvement in the effectiveness and/or efficiency of the system.

Donald H. Anderson (8) (0) (6)

Maybe as a country we have gone overboard in emphasizing higher education over economic realities.

Bright Dornblaser (8) (10) (5)

Question 1:  The proportion problem of course is that the production sector has declined in absolute or growth terms vs. the growth in the service sector.  There is a problem with the service sector growth especially in the financial sector where the absence of regulation of the financial sector has undesirable growth.  One book on Bad Money dramatizes this.

Question 3:  Probably is true in some parts of a university.  Howvever in the School of Public Health where 50% of faculty salaries has to be earned from research grants, the faculty is very resistant to meetings that take time away from chasing research grants where the hit rate is one in three applications.  Note, the SPH has the highest amount of research money obtained per faculty member than any unit on UMN campus.   Zimmerman's comments on the work week does not represent what I have seen at the UMN.  In addition to research, preparation time for teaching is very extensive and increasing with the very time consuming preparation for on-line teaching, if one wants to do it well.

Donna Anderson (10) (9) (8)

Fred Zimmerman (10) (10) (10)

Gene Franchett (10) (8) (10)

Dennis Johnson (8) (10) (10)

Another title for this caucus could be: "Why is so tuition so high today?"  While at the U. of M. in the early 1950's, my tuition was $37.00 per quarter or $148.00 per year. With inflation only, it should now be about $1500 per year.

Bill Frenzel (2) (10) (9)

Question 1:  I have no idea what “too large” is.  I only know that I would prefer to let the market make such decisions.

Question 2:  And, you can throw in SS, Medicare, Medicaid and other entitlements, too.

Question 3:  For one outside of the groves of academe, this is a highly subjective perception, rather than a conclusion from observation or experience.

Rudy Allebach (7) (9) (7)

Jim Weaver (10) (10) (8.5)

You have good interviews but this one was par excellence.  Zimmerman knew early on that the change from producing to servicing was a seminal change in our economic direction.  MIT engineers in bygone days were concerned with machines, production, efficiency, buildings, etc; now too many of them with their compatriots from other  schools head for Wall Street and engineer financially.  What a waste.  

Joe Lampe (10) (10) (10)

John Nowicki (10) (0) (_)

Scott Halstead (10) (5) (10)

Question 2:   As a retired federal employee, there are several problems that stick out.  Retirements are allowed/encouraged/forced too early.  Many pension plans fail to properly manage retirement funds.  Political appointments are being made to many unqualified individuals in management levels of government.

 

Question 3:  This is a problem in all institutions.  Professors in many subject areas need real on the job experience in the field!!

 

Clarence Shallbetter (7) (9) (8)

 

Robert Mairs (10) (10) (5)

 

Joe Mansky (0) (0) (0)

Well, I couldn’t disagree more with this presentation. On item #1, if you accept this conclusion, then most Americans should still be farmers. The economic progress of the 1980s (the widespread implementation of the personal computer), the 1990s (the application of internet technology) and this decade (wireless communication, which the US was late in adopting compared to the rest of the world) are all examples of knowledge based businesses on which profits are made from conceptualization and design.

On item #2, what planet is the speaker living on? As someone who may well get a public pension some day, it is self evident that I will receive only about 70-75% of the benefits promised. The legislature will do this by allowing inflation to reduce the real impact of the pension obligations. Also, who is interested in living on ˝ income for 30 years? At the moment, I have no intention of “retiring” (whatever that means) until age 70-75. Based on what has been going on in the stock market recently, I suspect that I will have company. I also would not operate under the assumption that the employment and retirement patterns of the past 50 years will be duplicated in the next 30. It’s a whole new ballgame – apparently, some folks have yet to figure this out.

On item #3, the speaker’s personal experience is substantially at variance with the faculty members that I know personally and whose work I am familiar with. One minor anecdote: research faculty at many universities receive no salary as such from the nominal employer – they must self fund their positions through grants that they are able to procure. The result: no tangible results = no salary.

Unlike some, I have no bias against manufacturing – I grew up seven blocks from a steel mill (still in business, by the way, making low carbon specialty steel). Many of my friends and neighbors continue to be employed in that sector.  But even they realize that times have changed and that there is no profit in labor intensive businesses that result in low value products. The enterprises that will survive in the US will either be highly automated, or result in high value products or both. The key to our success will be to beat everyone else to develop and market new products for which there is room for only one player in the market. Hence our interest in basic and applied university research, which will give us the edge we need.

Shirley Heaton (10) (5) (5)

Tom Swain (5) (9) (7)

 

    

The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions, reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   Verne C. Johnson, chair;  Lee Canning,  Charles Clay, Bill Frenzel, 
Paul Gilje,  Jim Hetland,  John Mooty,  Jim Olson,  Wayne Popham  and  John Rollwagen.  


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The Civic Caucus, 01-01-2008
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