Saturday, May 27, 2017

A bizarre explanation for the high cost of health care in the land of austerity

The hysteria over Trump's budget has been mounting for weeks. There is nothing in the news but deep, deep cuts to everything except the military. And even then, some say that we're not spending enough on the military - never mind that we spend more than the next 6 to 12 countries combined (depending on the source you choose to read). It may be awful to watch, but the debate has subtext.

Lately, most of the focus has been on the Affordable Care Act (aka, Obamacare) and the American Health Care Act. Most of the press has been given to the Republicans and their surreal opinions on the state of health care. Naked Capitalism has a very good shortlist of some of the untruths Republicans are brazen enough to speak, which you can read about in full detail here. I've reduced it to a short list here for your review so that we can explore then in some detail from a different perspective:

  1. The poor don't want health care and the fact that they have such poor lifestyles proves it.
  2. The people who are healthy pay for the sick.
  3. Men shouldn't have to pay for prenatal care for women.
  4. People who lead good lives do not get sick.
  5. No one dies due to lack of access or coverage.
  6. People who don't take care of themselves don't deserve health care or insurance.
That is a short list of talking points that Republicans have made about the current state of health care. The first thing we should notice, as the Naked Capitalism article notes, is the complete absence of science. There is no scientific or empirical evidence backing up these outrageous claims. They are all judgments on the people who suffer the most from the current crisis of health care.

Since Congress is 91% Christian and 99% of Republicans in Congress are Christian, we can infer that according to some members of Congress, "God is punishing those who are sick, so lets pile on". So sorry for the 1st Amendment. I also note with interest that as far as I know, there has been nothing provided in the budget to teach people the skills they need to stay healthy. Even if they did, people who have the skills to lead a healthy life can still get sick and they can still have accidents. Perhaps they did not see or hear of Carl Sagan with his brainy quote: "Extinction is the rule. Survival is the exception." I guess that's a bit much for people who believe in an afterlife.

From the faith of some members of Congress, we can also infer that "sick people should not be rewarded, they should be punished". I'm still thinking about the 1st Amendment here. Can we also infer that some in Congress believe that they are "doing God's will"? If so, there needs to be a healthy and public discussion of just what "God's will" is. Who knows what God's will is? I sure don't and I doubt anyone in Congress really knows. Given the immense egos of the people in Congress, it would be easy for them to conflate their own will with God's will.

Somewhere in their Good Book, God said, "Vengeance is mine". That would seem to mean that it's not up to those in Congress to decide who gets to live and who gets to die. I think I'll go with Gandhi, "An eye for an eye and the whole world is blind".

So from what we can see, we have members of Congress constituting a majority, preaching a faith, and being unwilling to use federal funds to teach the skills necessary to "deserve" health care. Are those poor people who are so undeserving of health care really contributing to the high costs of health care? I don't think so. As one member of Congress put it, "the poor will always be with us", and they always have, so the poor can't really be used to explain the high cost of health care.

Our health care costs were in line with the rest of the industrialized world for much of modern history until sometime around the Reagan Administration. Economist Dean Baker has some interesting numbers to share with us, and a nice little chart he got from the OECD:

Notice how American health care costs were fairly close to other industrialized countries for at least 10 years since they started collecting data in 1971. Notice also, how health care costs in the United States diverged in 1981. Hmm. Isn't that around the time of the Reagan Revolution? I think it is.

In Baker's article he had this to say about the costs of health care:
The reason our health care costs have risen so much more rapidly than anywhere else is not Baumol's disease. Health care is a service everywhere, not just in the United States. The difference stems from the fact that doctors, insurers, drug companies, and medical equipment makers are far more capable of controlling the political process in the United States than in these other countries. They use their political power to restrict competition and get government subsidies. As a result, these actors are able to secure massive rents that come out of the pockets of the rest of us.
Rent seeking? Really? Since the poor have always been with us, it can't be them. It must be the changes in public policy made during the Rent Seeking ... I mean, Reagan Revolution. Doesn't it seem odd then, that no Republicans are talking about this development in our history and what we can do to reverse those changes?

Thursday, May 25, 2017

The conflict between good and evil in the context of Maslow's Hierarchy of Needs

For months now, there has been a quiet conversation in my head, a sort of reduction process to understand just where good and evil come from. As I've mentioned before on this blog, I do not believe in good and evil. Good and evil are terms that come from religion, a sort of supernatural explanation for helpful and challenging behavior observed in human beings.

In this context, there are really only two kinds of people. There are those who are confused, people we might call "evil" and those who are less confused, those we might call "good". I use the terms "good" and "evil" here to keep the subject matter simple and easy to understand rather than to justify that behavior with a supernatural explanation.

When I watch pop culture, a movie or a TV series, or read articles in the news, and there is violence in the story, my mind will go to that question, without fail, and ask, "why would anyone do such a horrible thing to another person"?

To put it differently, and a bit more personally, I ask the following question of myself, every day, all the time: does this serve me? Does this action meet my needs?

Good and evil, for the purposes of this article and discussion are really about how we get our needs met. Children will learn to lie if they fear for their lives or physical safety. They are not being evil. They are just confused by caregivers who believe that violence will grant the caregivers the relief they need. Even the caregivers are not being evil when they commit violence against children. Yes, their actions are abhorrent, but those actions are evidence of confusion, not evil. Violence doesn't serve any need other than self-preservation in self-defense, and even that is a matter of controversy.

In almost every example that I choose to look at, transgressions are really about getting needs met, but not knowing how to get those needs met without saying, "please". From a trivial offense, to violence, to corruption on a massive scale, it must be clear to anyone on the outside that negotiation in good faith is not a skill held by the "evildoer".

When I see one man seeking to acquire and exert power and control over another, I have to ask myself what need, exactly, is that person seeking to satisfy? We can explore this a bit with the chart below, a chart of Maslow's Hierarchy of Needs and take an act which we might define as "evil" and place it in context.

Physiological needs are like air, water, space and are governed by instinct. Safety is the need to preserve oneself from harm and is also governed by instinct. Love and belonging, managed by the higher thinking parts of the brain along with some instinct, are best described as fellowship, friendship, mate or spouse, and family. Esteem is a warm regard and compassion for oneself. And then there is self-actualization, the realization of one's calling and utilization of one's talents in the service of others.

I can take any movie plot and deconstruct it with this line of thinking. I wrote about Star Wars not too long ago and attempted to put the plot in this context. I wondered aloud about the antagonists in the Star Wars movies. When the lead antagonist gives the order to blow up a planet, what need is he seeking to meet? As a leader of a well financed, very well organized military organization, all of his basic needs for food, air, water and space are met. He is safe in his ship, which is armed to the teeth and has no adversaries to fear.

Has our Star Wars antagonist ever experienced love and belonging? Well, that is an open question. In almost every interaction that Darth Vader or Senator Palaptine had with others, there is no question of the power they hold over others. Subordinates know that if they speak out of turn, their throats will be constricted by the use of the Dark Side of The Force, in a possibly fatal encounter.

So, when Darth Vader crushes the throat of his subordinate almost to the point of suffocation, what need is he meeting? It is most certainly not fellowship or anything even remotely close to that of love. Is he meeting his need for personal safety? He's wearing a suit for his own protection, is armed with a laser gun and light saber and can count upon the obedience of everyone else in his army for protection. Side note: the only thing that punishment teaches is obedience, and in that army, obedience is in abundance.

Fellowship exists where intimacy is permitted. You cannot have intimacy between two people when one person exerts and maintains overwhelming power over another. Both parties are scared. The one with the power is afraid that at some point, his subordinate will lose fear of that power. The subordinate fears for his life. You cannot have intimacy with all that fear hanging around. So fellowship and any possibility of true love are lost with an overwhelming imbalance of power. In such a relationship, there is power and obedience, and there is no room for love or even a mutual warm regard.

Where there is a vacuum of esteem, we can expect to find a boatload of power and the willingness to use it against others. To put it differently, if you don't respect yourself, you won't respect others. If you talk with negativity and profanely against others, there is a very high probability that you do the same to yourself, too. Most people who think poorly of themselves, believe that everyone else knows the same thing.

So if you have power, but still don't believe that your need for personal safety has been met, you will continue to seek more power, more security, and you may never find that what you have is enough. An all powerful being who is still mortal, will spend days and even months, planning for every possible contingency to ensure his needs are met and that everyone else is obedient to him. At some point, that person will need a break. He might need to get high so that he can stop all that thinking.

Blowing up a planet would induce the brain to release adrenaline. That would be nothing less than an exciting event for someone who lives on power. That is a gigantic high for someone we might deem to be "evil". But is it self-actualization? Being responsible for the deaths of billions of other living beings is not exactly creative. It will not prove that one is lovable, far from it, even when love is what we really want. At best, it is addiction in the extreme.

Taken in context, I can't think of a single act of evildoing that really meets any human need. At best, evildoing serves as a distraction from the pain that one can be in when the skills to sooth oneself, or to ask for help are lacking. Evildoing is really just challenging behavior, but we use the term "challenging behavior" to describe kids, not adults.

Challenging behavior in kids is modeled by the parents. If the parents yell, the kids yell. If the parents are not flexible in their expectations, then kids will not be, either. If the parents hit, the kids will hit. If the parents lie, the kids will lie. If the parents have a low tolerance for frustration, the kids will, too. Kids look to the parents to know how to act and respond to changes in the environment - they imitate the behavior of the people around them.

Challenging behavior is what kids do when they lack the skills to meet the demands of their environment. In adults, this is what some challenging behavior looks like:

What Mr. Reich observes may be a moral crisis, as he put it, but to me, it's a lack of interpersonal skills. White collar crime is not what we see on the local news. The local news is about violent crime, one person doing something awful to another. The local news is replete with stories about one poor person doing some awful thing to another, and neither person has the skills to get their needs met. These are people with no power to control the news of their unfortunate fate.

A person committing a violent crime is "acting out" because he lacks the skills to meet the demands of his environment. We can call him "evil" but that doesn't really explain why someone would commit an act of violence against another. Once that person is caught, we cast him off to prison as if prison is going to teach him the skills he needs to avoid that situation again. But American prisons are hell on earth by design, they are not places where one learns the skills of civilization. In prison, Americans learn the ways of the jungle.

Let's have a look at the white collar transgressions above:

  • Insider trading
  • CEO pay that is unhinged from productivity
  • Wage theft
  • Bribery
  • Gambling with other people's money
It's almost automatic that when we look at those activities, we think, "evil". I look at those kinds of activities and wonder what needs are met by participating in such activity. With some effort, I can imagine how one might feel doing all that. Here I think of someone like Bernie Madoff, or a hedge fund manager who is caught trading on insider information that everyone else is not privy to.

In every case listed above, there is adrenaline, pure and simple. White collar crime involves adrenaline just as much as violent crime, if not more. Because it often plays out over time, it is a longer, slower high, but it is still mood altering, it is a distraction from reality - how we are feeling, thinking and doing. White collar crime is just a very profitable addiction.

What needs are being met by white collar crime? We're talking about people who have so much money, they're never going to be on the street. They're never going to be poor. Even after paying fines, they can park what remains of their money in a Vanguard 500 fund and live quite comfortably selling a part of the growth at 5% a year on average. Then they can just paint pictures in quiet solitude if they want to. So now we know that the first two rows of the hierarchy of needs are fulfilled. 

What about love and belonging? White collar criminals might not have that anymore once their family figures out what is going on. Or maybe the family is fine with it, but as any soap opera fan knows, it's thin ice. And I can't imagine how anyone could have esteem while committing a white collar crime. Even if the transgression is "legal", like how the CEO of Home Depot still got a pot of cash after being ejected from the company in 2007. He was a taker. How does one find esteem in that?

None of that activity, even if it's legal, comes even remotely close to "self-actualization". How does one feel good about buying a company, loading it up with debt and wiping out the employee pension fund for personal gain? This is what Mitt Romney did, yet millions of people voted for him in a presidential election.

When I think of human suffering in the context of skills, I find compassion for others. When I see people suffering, I see people who lack the skills to respond adaptively to the demands of their environment. When I see grown men and women defending a system that allows white collar transgressions against the people who serve them as employees and how they justify it, I also see people who lack the skills to meet the demands of their environment - without saying please. Money is a terrible substitute for interpersonal skills.

To me, this is the subtext of the circus on display in the White House and in our Congress. Underneath all the drama is the realization that most of those people do not know how to get their needs met without imposing their will upon someone else. Negotiation in good faith is a rare skill to find. Corruption is rampant.

This is why I use compassion first when someone makes a mistake. I avoid assuming that people are motivated to make mistakes. I assume that a mistake arises from a lack of skill, not motivation. When I see people suffering, I see them as lacking the skills to do better, not motivation. And it doesn't matter how much money or power you have. It doesn't matter if you're beautiful, either. If you don't have the skills to appreciate what you have, you will always want more.

No amount of punishment nor reward will teach the skills we need to appreciate what we have or each other. The best tool for teaching the subtle skills of discernment and appreciation is collaboration. When we collaborate, we teach the skill of cooperation, too. And when we collaborate, we begin to discover that The Force is within, not without.

True, some see the situation in American politics as dire, and I would agree. But it took a long time to get here. It may take some time to get out, maybe a generation or two. While we're waiting, we can focus on teaching our kids (and everyone else in our lives) the skills of collaboration, for when we teach them, we teach ourselves, too. It's time for Plan B for Humanity

We must teach skills before punishment. We must teach compassion before punishment. Perhaps then, we can finally find peace as a species, because we're going to need peace in order to collaborate and solve the problems we've created for ourselves.

Thursday, May 18, 2017

To prevent another Trump, open the primary elections in every state at every level

The bile and the acid Clinton Democrats have flung at Sanders supporters has become a river. It is particularly evident on Facebook, especially now, with a class action lawsuit underway against the Dingaling National Committee and Debra Wasserman-Schultz for "tipping the scales" for Clinton. Given the deep and wide Clinton News Network, it is hardly a surprise that there is a virtual blackout on the story. I guess that would explain why the press has turned to the story on Trump and Russia.

Clinton supporters claim that Sanders wasn't a real Democrat, but conveniently omit the fact that he registered as a Democrat to run as a Democrat. He met all the criteria to run for president as a Democrat, and the DNC allowed him to run, but to Clinton supporters, he's not a real Democrat. He's caucused with Democrats in the Senate and in the House and voted with Democrats in both houses, but he's still not a real Democrat. Sanders wasn't just running for president, he was ringing a bell. Did any of you Clinton supporters hear it?

Clinton supporters tell me I should just stop whining and get with the party, that I should have voted for Clinton. That her loss is my fault. How convenient it is for them to omit that Clinton collected commitments from more than 400 superdelegates before the first primaries were held. How convenient it is for Clinton supporters to omit that mainstream media were there to apologize for her and cover her butt and used their positions of power to create an implicit bias against Bernie Sanders. And somehow, she still lost the general election.

Through it all, Clinton was supported by Barack Obama, nearly every sitting Democrat in federal and state office, and the DNC, despite losing more than 900 seats nationwide during the 8 years that Obama was president. How did they lose those seats? By acting like Republicans and voting for policies that redistributed income upwards. By fundraising like Republicans (that link is to a ginormous 1986 article that describes ground zero - the point at which the Democrats lost their way) and ignoring their base. Clinton ignored Sanders supporters at her own peril and lost.

Do you think that Democrats losing more than 900 seats nationwide had anything to with Clinton's loss? I do. Democrats lost those seats because they failed to offer a meaningful and progressive liberal alternative to Republicans.

Clinton supporters have told me how I have to stop crying over the loss that Sanders suffered. I demur. I'm not crying for Sanders. As an independent voter, I'm crying for relief from the disenfranchisement imposed by both parties with their allegiance firmly held for Boss Tweed. Here are some well known quotes from Mr. Tweed:
I don't care who does the electing, so long as I get to do the nominating.
The way to have power is to take it.
From the Wikipedia article on Boss Tweed:
According to Tweed biographer Kenneth D. Ackerman:
It's hard not to admire the skill behind Tweed's system ... The Tweed ring at its height was an engineering marvel, strong and solid, strategically deployed to control key power points: the courts, the legislature, the treasury and the ballot box. Its frauds had a grandeur of scale and an elegance of structure: money-laundering, profit sharing and organization.
What happened at the DNC is probably the best demonstration we've seen in recent history of how much control the wealthy seek to maintain over the nomination process. And when I say "wealthy", I'm not talking about your small business owner pulling a few million a year in gross business income. I'm talking billion dollar businesses running defacto monopolies. Think Walmart, Amazon, Facebook and Google. Think Mobil, Exxon and Shell. Think Comcast, ATT and Verizon. I saw coverage of the Convention and all the logos everywhere.

Sanders said he's nobody's savior, that his campaign was not about him and he never told us who to vote for, anyway. He told us over and over again, that his campaign was about the issues, not about him. I agree. The debate is not about Sanders losing the nomination to Clinton even though there is serious contention as to that point. The context of the debate between Clinton supporters and Sanders supporters is about accountability.

The DNC is not willing to be held accountable to the people they claim to represent because the people they serve (the real party in interest), do not want any changes. The DNC claims to represent "Democrats", but after what I saw in the news about the nomination process, I will not call them "the Democratic Party", anymore. The superdelegates are unaccountable and are not democratic. The primaries are all for show because, with a few exceptions like Bernie, the vast majority of candidates must win the "money primary". That's where Boss Tweed chooses who gets to run and do well in any election.

The DNC defense in the courtroom over a motion to dismiss in the class action lawsuit can be summarized as follows:
  • We have the right to tip the scales to any candidate we choose.
  • Votes don't matter.
  • We're a private organization with zero fiduciary duty to anyone who sends us money.
Seriously? This is an organization that claims "democracy" in their namesake yet refuses to listen to the will of the people they claim to represent?

And what's with this "we" business? Who is "we"? If the DNC has no obligation to follow the will of the people as expressed through their votes, why are they here? They are here as a conduit for the concentration of power. If the vote doesn't matter, who do they represent? The 0.02% who use money to exert control over the outcome of the primary elections. They don't really care who votes in the general election, they just want control over the nomination process, and it would follow, the nominee. That is the walled garden erected by the wealthiest people in this country. This is the context of the struggle between the middle class and those who seek to marginalize the middle class.

My opponents in this debate on Facebook (and elsewhere) insist that primaries should be closed for the people who work so hard to cultivate a candidate, to prevent the primaries from being hijacked by the opposition party. It takes two to tango. If one party can do it, the other party can return the favor. Our party politics are so very polarized precisely because we have closed primaries. And once you close the primaries, then the 0.02% can go wild, serving us up with candidates many of us neither needed nor wanted. Like Trump and Clinton.

Opening the primaries in every state would provide a check on the power of the dominant parties. It would necessarily moderate the choice of candidates for office by each party. Open primaries would allow independents, now 45% of voters, to have a say in who they want to vote for in the general election. Indeed, it is a neat trick to see that the Republicans with 26% and Democrats with 30% of the national voter registration maintain absolute control over state and federal politics. Open primaries would go a long way to reducing the extreme polarization of our politics.

It would seem to me then, that extreme polarization of our politics is by design rather than an accident, for nothing in politics is accidental. Closing the primaries has increased the polarization of our politics, dividing our nation and preventing us from acting as one. Opening the primaries at every level of government would dilute the polarization. Open primaries would serve as a reminder to political parties running as private organizations, that they serve the public at large, not just a few very wealthy and organized interests. Open primaries would allow the entire country to work together, to prevent a hijacking of our government by a few very wealthy and entrenched interests.

It also follows that we need to open our debates. The Democrats and Republicans must not be allowed to keep the debate stage and the free media exposure that follows, to themselves. The tide is starting to turn on the Commission for Presidential Debates and the courts are starting to take notice. In Leveling the Playing Field v. FEC (Case No. 15-cv-1397), a federal court has ruled that the Federal Election Commission must reconsider their rules in light of the evidence presented in that case. They must acknowledge that only one third party candidate has appeared in a presidential debate since 1988. Just one in nearly 30 years.

The antipathy directed by Clinton supporters to Sanders supporters must be seen as an excruciating example of resistance to change, rather than a desire for it. The tension created by Clinton supporters demonstrates a clear lack of empathy for Sanders supporters. Sanders supporters wanted someone who was not of the old guard. They wanted someone they could trust and did not find that in Clinton.

So dear Clinton supporters, if you want the Democrats to win in the midterms, remember, we're progressives and we're here. We're waiting. We'd like to see some inclusion. We'd like to be welcomed. We'd like to agree upon a candidate that all of us progressives want. But if you continue to browbeat us, I'm sure Sanders supporters like me will find something else to do.

Wednesday, May 10, 2017

Skills vs morality in the debate over health care

I found myself inspired to do a little bit of research on Mo Brooks after reading about his interview with CNN just the other day. In this particular instance, his grandiosity (or that of any Congressperson for that matter) was simply breathtaking. Numerous outlets have covered the apparent gaffe by Brooks and I found that Salon had a particularly insightful account:
As Brooks told [Jake] Tapper: “My understanding is that (the new proposal) will allow insurance companies to require people who have higher health care costs to contribute more to the insurance pool. That helps offset all these costs, thereby reducing the cost to those people who lead good lives, they’re healthy, they’ve done the things to keep their bodies healthy. And right now, those are the people — who’ve done things the right way — that are seeing their costs skyrocketing.”
Clearly, Brooks ignores the question of whether or not those people with higher health care costs have the capacity to offset those higher costs in the first place. When people are ill, their capacity to earn more money is diminished, and getting a job is more difficult when employers see your health insurance as a liability.

The implication of his statement is that people who have higher health care costs are "bad" and that "they deserve" their suffering for being bad people. To put it differently, Brooks seems to think that "people who lead good lives do things the right way" and that the bad people should be punished. The Salon article did mention that Brooks seemed somewhat aware of his gaffe:
Perhaps realizing that his previous comments sounded insensitive, Brooks did try to backpedal later in the interview. “In fairness, a lot of these people with pre-existing conditions, they have those conditions through no fault of their own,” the Alabama congressman told Tapper. “And I think our society, under those circumstances, needs to help. The challenge though is that it’s a tough balancing act between the higher cost of these mandates which denies people coverage because they can’t afford their health insurance policies . . . and having enough coverage to help those people truly in need.”
So, people who are addicts are not people who are truly in need? People who have compulsive diseases are not people who are truly in need? According to Brooks, people should get assistance only under certain circumstances. Which circumstances? If someone received a "preexisting condition" through no fault of their own, like an accident or genetics, they're covered. Oh, wait. Brooks wasn't talking about genetics now, was he? He must be thinking about people living in a polluted environment. Hmm. That's not it, either. Brooks believes that manure is not a pollutant and that business will regulate itself. I guess a disease from pollution is not a pre-existing condition then.

The underlying assumption here is that people who are bad should be punished. People who are bad have failed at making good decisions about their health. They should face the consequences of their decisions without government protection. Brooks claims that those bad people are the people who are increasing costs for the good people, yet he doesn't mind that members of Congress have no compunction about exempting themselves from their own laws.

I used to think this way, too. I used to be one of those "good people" who didn't want to pay for the poor health decisions made by others. But I've made plenty of mistakes of my own and I received plenty of help from other people along the way. In my life, I've learned to be more forgiving, and to let the one without sin cast the first stone.

Brooks seems to think of himself as a rational person. But he did pretty much what many other people do at the checkstand after shopping for groceries at the market. He seems to have made a rather impulsive decision about health care policy. From the Wikipedia page on Mo Brooks:
In March 2017, Brooks said that he would not vote in support of the American Health Care Act, the GOP's initial plan to replace the Affordable Care Act. Brooks said, "I will vote against the American Health Care Act because it has more bad policy than any bill I have ever faced."But on May 4, 2017, Brooks voted to repeal the Patient Protection and Affordable Care Act (Obamacare) and pass the American Health Care Act.
If the assumption is that good people make rational choices for their own health, and Brooks implies that he's one of those good people by his own statements, how did he flip on the vote? A few months ago he said that Trumpcare had more bad policy than any bill he had ever faced and still voted for that bill. I bet he succumbed to peer pressure.

The Nation set the record straight by noting that most members of the House had almost no clue about what they were voting for. It's like watching a flock of birds decide which way to go:
To do this [vote], Ryan’s Republicans voted for a devastating piece of legislation without knowing:
  • the cost of their plan
  • how many tens of millions of Americans will lose insurance
  • how their plan will be implemented at the federal or state level
  • what will remain of their plan after it is reviewed by the Senate
House Republicans simply did not care. The overwhelming majority of them cast their votes as Ryan said they should, and then they ran the gantlet—past crowds of citizens chanting “Shame! Shame! Shame!”—on their way to a White House Rose Garden “celebration” of their partisanship with Donald Trump.
So it was peer pressure! Is this is Mo Brooks' idea of rational? I find it supremely ironic how the conservatives in Congress seem so fixated on individuals making good decisions and yet they vote for bad legislation and know that they're voting for bad legislation. To vote for that bill, they must be thinking more about all the dark money that funds their campaigns than the people who live in their districts. Brooks is a member of the Freedom Caucus and was elected to Congress in 2010 with that infamous wave of Tea Party upstarts, but apparently, that isn't a sign of a rational thinker.

I believe that the debate about personal responsibility is a ruse, a deflection, a misdirection. Congress is asking the American people to take responsibility for themselves but at the same time, exempting themselves from the changes in law they propose to make. They are asking people to take responsibility for themselves while protecting doctors from international competition. They are asking people to get into shape while inflicting huge costs with drug patents. They are asking people to take responsibility for their own health care costs, but refuse to address 40 years of wage stagnation.

At the same time, they are not willing to acknowledge that living a "good life" requires skill. Remember 92% of Congress is Christian and the conservatives among them seem to think that if we could just "let Jesus into our heart" that all would be well and good. Perhaps those God fearing Christians in Congress believe that if we prayed about our health conditions, we could lower our health care costs, too. Ergo, we won't need universal health care because God offers the best plan of all: immortality through salvation.

Here's the thing. If you're a believer, and I say this with the utmost respect for your faith, and you are praying for something specific, then you're treating God as a personal assistant, not your master. You could just pray for knowledge of God's will for you and the power to carry that out, and be the servant you claim you want to be. Especially if you're a member of Congress (sample prayer in Congress here). As a believer, you can have only one master, and it's not you.

If you're a believer, and believe that all humans are God's Children, you would not make another person a slave or your personal assistant, either. Slavery, racism, and violent "redemption" (thinking of the movie, "7 Years A Slave" here) are all incompatible with Christianity. Yet history is replete with numerous examples of white Christians subjecting other human beings to awful indignities as punishment for their skin color or lack of religious fervor. Our Congress is mostly white, male and Christian, and seems to rely more on punishment for compliance with their ideology than compassionate teaching of skills, First Amendment be damned.

Evidently, religious fervor is not a very good substitute for skills. Consider sex education as a way to teach the skills young people need. Sex education can teach kids how to treat their sexuality with all the care and respect they need to avoid getting pregnant or getting someone else pregnant until they're in a committed relationship, prepared to accept the responsibilities and duties of parenthood.

Conservatives think that sex education is a private matter that should not be taught in school. But if kids live in God fearing homes where there is a lot of shame about sex, there will be no discussion of the subject, and like Sleeping Beauty, they're going to make the mistake that the parents always feared. At that point, can kids go to their church to learn what they need to know? You know, something beyond "just abstain"?

The point about teaching sex education in public schools is to put all the science on the subject together and explain it in a way that kids can comprehend and use. Yet conservatives the land over, seizing the power that they now have, are cutting funding for public education wherever they can. Education is what our society uses to transfer knowledge, including skills, from one generation to another. We teach reading, writing and arithmetic as basic skills. We teach communication as a fundamental skill because we transfer all skills through communication, not just genes.

Oh, yeah. Genes. We use genes to transfer knowledge in the form of instincts, but our brains are big enough to ignore or override our instincts, often at our own peril. Have you ever noticed that when you punish kids, they lack the ability to be rational? That's because punishment sends kids right into their instincts. They're all about fight or flight in the face of physical punishment. Is that love?

Communication leads immediately to collaboration. Humans collaborate to solve problems, even really big problems created by humans, and collaboration requires skill. And when governments cut funding for education to give a few very wealthy people large tax breaks, they reduce the capacity for our culture to teach the skills our next generation needs to not just to survive, but to live. I know, it seems evil, doesn't it?

Note to Mr. Brooks:

The word "evil" is a supernatural explanation for challenging behavior in children and adults, therefore, evil doesn't really exist. There is only confused (what we might call "evil") and less confused (what we might call "good"). Challenging behavior arises from a lack of skills needed to get one's needs met.

Teach the skills needed to get needs met and the challenging behavior goes away. This is how how brute nature yields to love. I say this because love is more than having a warm regard for another. Love includes teaching the skills required to get needs met, respectfully, honestly, openly and with regard to the needs of others.

As humans, we have cooperation baked into our genes. Love is the highest level of cooperation, includes sharing of knowledge and including skills, and is ultimately, human nature.

End of note to Mr. Brooks.

Human nature is to teach skills for survival, not punishment, and punishment doesn't teach any skills. If Mo Brooks wants high maintenance humans to pay for their health costs, he might take an interest in teaching those humans the skills required to make the money they need to pay for it. Or he can settle for creating a system where everyone pays for it with a universal health care system (think HR 676).

If Brooks is truly interested in making the world a better place, he may also want to take notice that in his faith, there is only one master, and it's not him.

Wednesday, May 03, 2017

Myth: The Community Reinvestment Act forced banks to make bad loans

In recent days, I've been participating in an interesting debate in the Fox News Politics community of Google+. You can find it here. It started out as a debate over trickle down politics, but after a day or two, turned into a debate on the collapse of the housing bubble.

First, let me show you the meme that I shared in that community:

It's an interesting meme and point of departure for discussion. None of the tax cuts we've seen since Reagan was president have ever closed the federal budget deficit. Yet the pretense is that if you cut taxes, businesses will flower and blossom that will employ more workers in a virtuous circle. During the Bush Administration, tax rates were at a historical low yet, near the end of the 2nd Bush term as president, our nation was plunged into the Great Recession.

What I find interesting is not how the debate turned to the Community Reinvestment Act (CRA) as the cause of the Great Recession. What I find interesting is that many conservatives hold a sincere belief that the CRA forced banks to make bad loans. It's like an urban myth, literally, but it's a conservative myth.

I recall the collapse of the housing bubble in 2008 very well. I was working a new job as "the IT guy" at a debt collection shop. I enjoyed working there because I saw the other side of debt collection, having at one point in my life, been the person of interest with debt collectors. Working there gave me a window into how at least one loan collector runs his business.

Every Monday, the owner (who shall remain nameless for this article) would hold a meeting in the lunch room to educate his employees about the law. During his meetings, he would discuss both federal and state laws concerning debt collection. He was quite enthusiastic when he talked about the laws, but he really shined when he talked about the federal Fair Debt Collection Practices Act. The Act has been modified since then, but I can recall with clarity, how he discussed the first few sections of the Act, as codified at Title 15, United States Code, section 1692, in shorthand, 15 USC 1692.

He seemed to glow as he discussed the Congressional findings and purpose, the intent of Congress. He explained, with some glee, that "no debt collector shall be disadvantaged from following the spirit and the letter of the law". He understood that the law was intended to curb or eliminate abuses in debt collection practices and he emphasized that point to a room full of debt collectors every Monday. He said, "Your job, as debt collectors is to follow the law."

What he showed me is that the preamble to the act, as codified, demonstrates Congressional intent.

So, during the debate on the subject of the CRA at Fox News Politics, I researched the CRA. It is codified at 12 USC 2901, et. seq. As with the Fair Debt Collection Practices Act, Congress saw fit in 1977, to state their intent concerning this law:
§2901. Congressional findings and statement of purpose
  (a) The Congress finds that—
       (1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
       (2) the convenience and needs of communities include the need for credit services as well as deposit services; and
       (3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
  (b) It is the purpose of this chapter to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions. (emphasis mine)
The CRA grants authority to agencies responsible for implementing this law, to encourage lending institutions to make loans that are safe and sound. There is nothing in that law about "liars loans" or directing banks to make loans without checking for income or the ability of the borrower to pay back the loan.

Conservatives cry foul and claim that banks were forced to make bad loans, but they conveniently ignore the preamble of the CRA which states the intent of the law. That means that everything that follows within that chapter of law must conform to the intent of Congress - the law must be taken in context. Agencies charged with executing the laws are not free to exceed the authority granted to them. If Congress says that agencies must encourage lending institutions to make loans that are consistent with the safe and sound operation of the institution, then agencies must do that. If they did not, any bank could sue for relief from such a rogue agency.

Did any banks sue over the CRA? Did any banks ever cry foul over a law that purports to make them sell bad loans? Not that I'm aware of. But the banks had no problem selling expensive loans to minorities, even when they could have qualified for better terms. Just ask the city of Miami, Florida, where they're still cleaning up the mess from all the bad loans that were made. That city sued Bank of America and Wells Fargo over the costs of cleaning the blight left from abandoned homes left by people who could not pay back their loans with bad terms. Those people were sold loans at higher interest rates based on the color of their skin, not their credit scores or history.

Conservatives in their defense of the banks will blindly ignore the fact that four men were acquitted over loan fraud because executives at the lending institution did not check for income for years before the collapse of the housing bubble. I mentioned this in said debate above, and Salon has that story here. Here are some highlights:
  • Four men charged with loan fraud used a novel defense: the bank never checked for income and made "stated income" or "liars loans", so if the bank knew that information on the loan application could be false and just wanted to make the loan, how could they have committed fraud on the bank?
  • Bill Black, a professor of economics and law at the University of Missouri-Kansas City and also a Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota’s School of Law, says that bank executives knew what they were doing and committed "accounting control fraud". Bank executives were allowing risky loans while earning bonuses from the sales of the loans.
  • The Federal agent who had investigated the case—a man with plenty of experience detecting mortgage fraud—told the court that he had not talked to executives at the firms in question and, indeed, had not interviewed any top mortgage executives, ever. As if the bank had no responsibility at all.
  • The bank CEO never appeared at the trial. He wasn't even subpoenaed.
Conservatives (even neoliberal Democrats like Barack Obama) will tell you that the banks were the victims. But given what we learned in this trial and acquittal of 4 men, banks knew very well what they were doing. When Bank of America bought Countrywide, do you think they performed due diligence? I think they did, and they knew about all the bad loans that Countrywide was holding, expected a bailout, and they got one. All of the big banks knew what was going on.

The same people who defended the banks as victims of government regulation are also willing to overlook one simple fact: banks who can wrangle an $800 billion bailout at their darkest hour are most certainly not powerless to stop a bad law. Banks have the money and the influence to get the laws they want. They act as if we live in an oligarchy. They could have stopped or amended the CRA to their liking in Congress, but they did not. They could have amended the CRA with a more sympathetic Congress later. They did not.

The debate at Fox News Politics then turned to vagueness, that there is too much vagueness in the law to fight it. Well, there's a legal doctrine for that. "Void for vagueness" from the Legal Information Institute:
Under vagueness doctrine, a statute is also void for vagueness if a legislature's delegation of authority to judges and/or administrators is so extensive that it would lead to arbitrary prosecutions.

An enterprising law firm hired by the banks could have made that argument to stop a law they believe is bad. But they did not.

Banks do not have clean hands in the meltdown. Not only did they participate in an orgy of bad finance practice, they contributed to the stagnation of wages that made it difficult if not impossible for borrowers to pay back their loans. Banks used their money to influence the public policy decisions that decoupled productivity from wages and have been doing so since the 1970s.

Since the 1970s, CEO salaries (including bank CEOs) have grown more than 900% while wages have grown a mere 30%. This is a result of a long line of public policy decisions that distributed income upwards. These public policy decisions didn't just decoupled wages from productivity. They decoupled CEO salary from productivity as well, but at the expense of the working class.

The rise of CEO salary relative to wages cannot be explained by mere economics. A far more plausible explanation is that extreme inequality is a public policy choice, not economics. Economist Dean Baker has that story in plenty of detail in his book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (it's free, too).

Not only did the big banks cry foul when they stood to lose billions, they created the situation to begin with. They could have acted proactively to prevent the housing bubble and its collapse, but did not, and they had no problem leaving the taxpayer with the bill.

Monday, May 01, 2017

If you sell access to the network known as "the internet", you're a common carrier

Federal Communications Commission Chairman Ajit Pai (Twitter account link) has laid down the gauntlet in his quest to reverse a 2015 ruling that classifies Internet Service Providers (ISPs) as common carriers. Mr. Pai seems to think that classifying ISPs as information services will restore freedom to the internet.

Pai says that the FCC must dial it back to the lighter touch that was applied before the ruling with Chairman Tom Wheeler at the helm, so that ISPs will invest in their infrastructure again. This despite the fact that more than 450 cities have built their own world class ISPs when they could not get service from incumbent service providers - and most of them were built before 2015.

Mr. Pai has filed a notice of rulemaking and a request for comments, here is a factsheet for that filing. You can file your comments on the same here. The vote on the proposed rule isn't until May 18th and even after that, there will be a lengthy period of public comment available (no deadline has been formally announced yet). Ars Technica has a brief article with some very interesting analysis, here. The best analysis I've found so far can be seen at Y-Combinator here (highly recommended!).

I wrote about this issue in 2014 when the FCC and Congress were debating the idea of classifying ISPs as common carriers in my article, "Justice Scalia told us cable ISPs are common carriers 10 years ago". Here is the nugget of the article:
Scalia's opinion notes that the cable ISPs are providing the same telecommunications service that the phone companies offer, just using different hardware, while offering "information services". The cable companies offered free email addresses and websites to show that they are "information services", too. The FCC took this to mean that since they are offering information services, they must be classified as an information service rather than a telecommunications service. Scalia's point is that even if the cable companies offer "information services", they are still providing "telecommunications services" and are thus Title II Common Carriers.
This is the same point as the Y-Combinator article posted above. Lest there be any confusion, let's see what the FCC regulations can say. But before we can get to that, a short civics lesson is in order. The way power is delegated in American law is that all power resides in the people and they delegate power certain powers to Congress. Congress writes the laws and when they write the laws, they delegate power to implement the law to the executive branch. Usually, they delegate such power to the head of an agency. In this case, we're talking about the chairman of the FCC. And when Congress delegates that power, they delegate the power to write rules on how the law should be interpreted and implemented. Those rules are called regulations and they are found in the Code of Federal Regulations. 

So how does Congress define a common carrier? 47 U.S. Code § 153 - Definitions
(11) Common carrier
The term “common carrier” or “carrier” means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier. (emphasis mine)
Congress was specifically identifying communication by wire or radio, meaning, if you own the wire, you're a common carrier. Even if you don't own the wire and you rent the wire to someone else, you're still a common carrier. So if you just sell access to the network of wires, you're still a common carrier. That means, ATT, Verizon, Comcast, Time-Warner and any other entity that sells access to a network, regardless of ownership.

Since this is a delegation of power from the Congress to the FCC, no regulation promulgated by the FCC can exceed the power delegated to it, including the definition of "common carrier". The FCC can neither reduce nor increase the scope of the definition without a grant of power from Congress to do so.

For decades, ISPs have been hiding behind their "information services" while selling access to their network, pretending that they're not telecommunications services. To paint a bright red line around it, you cannot sell access to the network and then claim you're not a telecommunications provider just because you include "information services", too. This is the issue that was discerned by Justice Scalia NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION et al. v. BRAND X INTERNET SERVICES et al. [04-277]:
     If, for example, I call up a pizzeria and ask whether they offer delivery, both common sense and common "usage," ante, at 18, would prevent them from answering: "No, we do not offer delivery--but if you order a pizza from us, we'll bake it for you and then bring it to your house." The logical response to this would be something on the order of, "so, you do offer delivery." But our pizza-man may continue to deny the obvious and explain, paraphrasing the FCC and the Court: "No, even though we bring the pizza to your house, we are not actually 'offering' you delivery, because the delivery that we provide to our end users is 'part and parcel' of our pizzeria-pizza-at-home service and is 'integral to its other capabilities.' " Cf. Declaratory Ruling 4823, ¶39; ante, at 16, 26.1 Any reasonable customer would conclude at that point that his interlocutor was either crazy or following some too-clever-by-half legal advice.
     In short, for the inputs of a finished service to qualify as the objects of an "offer" (as that term is reasonably understood), it is perhaps a sufficient, but surely not a necessary, condition that the seller offer separately "each discrete input that is necessary to providing ... a finished service," ante, at 19. The pet store may have a policy of selling puppies only with leashes, but any customer will say that it does offer puppies--because a leashed puppy is still a puppy, even though it is not offered on a "stand-alone" basis.
     Despite the Court's mighty labors to prove otherwise, ante, at 17-29, the telecommunications component of cable-modem service retains such ample independent identity that it must be regarded as being on offer--especially when seen from the perspective of the consumer or the end user, which the Court purports to find determinative, ante, at 18, 22, 27, 28. The Commission's ruling began by noting that cable-modem service provides both "high-speed access to the Internet" and other "applications and functions," Declaratory Ruling 4799, ¶1, because that is exactly how any reasonable consumer would perceive it: as consisting of two separate things.
Note also that this is an excerpt from a dissenting opinion with concurrence of Justice Souter and Justice Ginsburg. Even Ginsburg, a liberal almost diametrically opposed to Scalia on many issues, concurs with Scalia! Though it is a dissenting opinion, it is worth noting that dissenting opinions do sometimes become the majority opinion in future cases.

I will be posting my own comment on this issue as well as the many thousands, perhaps millions of others will, and I hope you do, too. The point we must make to the FCC in our filings is this: if you own the pipes, or even sell access to the pipes, you're a common carrier. Even if you add some fancy information service on top of that, you're still a common carrier by virtue of selling access to the network you manage, lease or own. The network includes the last mile, the copper cable or fiber that gets your signals to the internet and that means the companies we love to hate must be regulated as common carriers.

Sticking to this point and this point alone will bring the debate to a head and finally pull back the facade of "information services" to reveal ISPs as common carriers.