1
The Problem, and How We Got There

Today, across the United States, we have something like 12 percent effective unemployment.

Yes, I know that's about three times the reported unemployment rate. But the real numbers are far worse than the reported rates. If you add in all the people who are underemployed or have given up hope of finding work in our economy—including a lot of black males in our cities—the unemployment rate soars. The unemployment rate among black males in New York City, for example, is 50 percent. That's right: 50 percent. What's more, this is largely "structural" unemployment, which means it's embedded in our system and isn't going to go away with the next uptick in the economy.

My office is in the beautifully refurbished Chrysler Building, in midtown Manhattan. Although I'm only a short cab ride from where most of New York's unemployed live, I could be thousands of miles away from them. Unless I make an effort to bridge that gap, my life is almost completely separate from the lives of the people who live in those communities.

Or is it?

A central premise of this book is that, collectively, we own that unemployment—or it owns us. America's corporate leadership, and especially its CEOs, have a special role to play in addressing this great and growing social evil.

When I was a college student in the late 1960s, the unemployment rate among black males in New York was much lower—something like a third of what it is today. Back then, most people thought that the then-prevailing rates of unemployment in the ghetto were scandalously, unacceptably high. Government at every level took bold steps to provide more opportunity for the unemployed. Everyone thought that with a little determined effort, we could make unemployment go away. We could build a "Great Society," as Lyndon Johnson put it. And corporate America played its part—sometimes awkwardly, but with good intentions.

Obviously, the Great Society didn't happen. Instead, we decided to turn our backs on the problem. We couldn't afford both the "guns and butter" that President Johnson promised us, so we embraced the guns. Again, corporate America went with the flow. Our CEOs stopped worrying about what was briefly referred to as "corporate social responsibility" and went back to making money.

The problem doesn't begin and end with employment, unfortunately. Take health insurance. Two or three decades back, nobody talked much about health insurance. For the most part, most people who wanted it were able to get it, at a rate they could more or less afford. Health benefits were taken for granted: of course your company offered a relatively generous medical plan, or even several such plans. Not a perfect system, to be sure—among other problems, your health insurance wasn't "portable"—and that's why U.S. presidents since Harry Truman have been arguing in favor of some sort of national health insurance. But all in all, it was a workable system.

Today, according to the latest Kaiser Foundation numbers, there are at least 45 million Americans with no health insurance. In the first two years of this brand-new century, the number of uninsured under the age of sixty-five grew by 3.7 million, or almost 10 percent. These numbers grew in part as a result of the anemic economy, but also—as we will see—mostly as a result of inept government policies and morally bankrupt corporate practices.

Who cares? Well, we all should. When one of these uninsured people experiences a serious medical problem, emergency or not, he or she heads for the emergency room at the local hospital, which is obligated to provide free care to anyone who needs it.

This is bad medicine, but it's also bad economics. Emergency rooms, which are expensive to operate, should be reserved for actual emergencies. It's no surprise that hospitals are increasingly unwilling to foot the bill. From a social-policy standpoint too, the system is a disaster. Uninsured people rarely visit doctors to keep themselves healthy; that's a luxury reserved for the wealthy and the insured. So the uninsured wait until their medical problem is so far along that they have no choice but to seek help—at which point the problem tends to be hugely expensive to treat, or untreatable.

In either case, somebody pays a very large bill—either in medical care to treat an advanced condition or in lost productivity or both. It may be a company health plan or an already strapped municipal budget, but somebody pays.

In the health-care realm, as in the corporate-social-responsibility realm, our CEOs and other corporate leaders have learned a painful lesson. We can't wish these problems away. We can't wash our hands of them. We own them—or they own us.

So that's the first premise of this book. I believe, strongly, that this country is facing major challenges and choices. Some of those challenges can't be solved without the direct involvement of America's corporate leadership. It's not a question of those leaders' being "nice guys" or "nice gals." It's a question of their acting in the long-term interests of their organizations and of the nation.

But there's another important premise of this book. In addition to accepting (partial) responsibility for tackling issues like unemployment and health care, our corporate leaders have to take more responsibility for this nation's moral tone and for the quality of our cultural and social discourse. This means different things for different executives, depending on where they and their organizations are today. For some, it means stopping bad things from happening. For others, it means making better things happen.

I was president of TCI—the largest cable operator in the United States—beginning in February 1997. In that capacity, one of my jobs was to pass final judgment on the shows that aired on our numerous cable systems. When I took over at TCI, the company was already involved with a pay-per-view event called "extreme fighting." Basically, extreme fighting involved putting two guys in a Cyclone-fence-enclosed hexagon and having them go at each other until one of the two guys "tapped out."

Biting, kicking, eye gouging, whatever: this was no holds barred. I hated the whole enterprise. I had refused to carry it on the cable systems of InterMedia Partners, which I had started in 1988 and headed before arriving at TCI. Extreme fighting was gladiatorial, perverse—even obscene. So I said, "TCI is out of the extreme fighting business."

In early 1997, I had enough influence over the industry that when I said, "It's off the air at TCI," it wasn't going to happen elsewhere. There was only one practical avenue into the home at that time: through the cable industry. If my company and the larger industry were out, that didn't leave enough homes to be profitable for these guys to invade.

What I didn't fully appreciate at that time was that extreme fighting was an industry, of sorts, and that its backers were absolutely determined to overcome my objections and get into America's homes. So what did they do, in response to my banning of the sport and my condemnation of it as "rule-less"? They came up with something they informally called the "Hindery rules," which they proposed to adopt on a going-forward basis. The Hindery rules boiled down to no eye gouging, no throat jabs, no biting, and no obvious shots to the groin. Apparently, they hoped that by adopting these rules, they could make me and like-minded CEOs back off. Maybe they thought I'd be flattered by having a set of rules named after me. (I wasn't.) In any case, they promulgated these rules, and then they said, "Now will you let us come back on?"

I continued to say, "No way. Not on my systems."

I traveled for two years with security. And to make things worse, I began to understand that it wasn't just the fighters and promoters who were angry, it was also the small but passionate audience for extreme fighting. They weren't getting their favorite entertainment pumped into their living rooms because of my stubbornness, and they were really, really angry about that.

Copyright © 2005 by Leo Hindery