Monday, July 20, 2015

Prison reform in the context of Maslow's Hierarchy of Needs

I'm still thinking about Maslow's Hierarchy of Needs, but this time, I'd like to explore how that concept can be applied to prisons, or what are formally known as "correctional facilities". As I've mentioned in a past post, the US has the highest incarceration rate in the world and one of the highest recidivism rates in the world at 60% or better.

As more prisons are privatized, the prison system in the United States has become a cash cow for the companies and unions that run them. Our correctional facilities have a revolving door for everyone that is on good behavior and a closed door for those who are not. It's sort of a Hotel California, only not so nice. Privatizing prisons into profit centers has a corrupting influence on public policy and seems to lead to an interesting bias. When prisons become profit centers, the bias is on getting people into prisons, not keeping them out.

I see also that President Obama is the first sitting president to visit a federal prison and he's talking about prison reform. It's good that he's taking a good long hard look at the problem, because we have a problem that's been growing for 20 years and counting. Even former President Clinton admits he made a mistake by signing into law stricter and heavier sentencing guidelines for judges with very little latitude to work with.

It would seem that since then, the idea was to make prisons a hell hole and make it much harder to avoid - but if you have money - hey, you're cool. You get probation. You get the country club prison. You're isolated from the violent criminals doing hard time.

So let's review Maslow's Hierarchy of Needs again. Here's the same graphic I showed a few days ago:


Of the accounts I've read about prisons, prisoners can pretty much forget about anything above the first two levels of needs. Even safety is in question if a prisoner is stuck in a cell with a really big guy named "Bubba". There is no privacy in American prison cells. Well, unless you're in isolated confinement. Then you're perfectly safe until you've gone for a few weeks without seeing sunshine or a human face. Privacy is a basic human need that is mostly denied in prison.

American prisons are not interested in Maslow's Hierarchy of Needs. They are interested in denying prisoners their needs except for the basic physiological needs. They treat prisoners like animals and seem uniquely designed for that purpose. Humans rose above animals because they developed the capacity to love and be loved. But in prison, love is denied. Fellowship is denied. And forget about real job training so that you can make a living when you get out. Prisons seem to be designed for job security at a buck a day.

Contrast that environment to Norway. In Norway, their recidivism rate is about 20%. Prisoners are taught skills to take care of themselves. They are given space to live in private. They can cook their own food, and are provided with their own private bathroom. They are treated as humans and are expected to act like one when they get out. They have skills to get a job when they get out. Prisoners in Norway are treated like adults, not adolescents.

Adolescence is often when people who go to prison first get a taste of what that is like. Adolescents can be the most challenging people we encounter. But they are also instructive in why we send them to prison when they commit crimes. Most crimes in America are committed during adolescence or during young adulthood, so if we're going to fix the prison problem I think we should start there.

I believe that it's time to change the way we think about challenging kids. Rather than assume they are challenging because they want to be, perhaps we might be better off understanding that when we're confronted with a challenge from a young person, we're dealing with someone who lacks the skills to adapt to the situation. They have a need but cannot articulate the need, so they offer up a challenge instead.

A few days ago, I happened upon a website called "Lives in the Balance". I've been watching the videos and reading the materials and as a parent, I'm fascinated with this approach to raising kids, even challenging kids.

The organization is headed by Dr. Ross Greene, PhD, a man with more than 20 years of experience working with kids. His organization's web site is a treasure trove of information on how kids behave and how to respond to challenging behavior. The overarching theme is that whether or not kids behave well is not a question of motivation. It is a question of ability. Kids do well if they can. If they can't, then there is a lag in their ability to be flexible and adapt to the situation. They offer up a challenge when they lack the skills needed to adapt to the situation.

Adult criminals do the same thing. People turn to crime not because they want to, they do it because they think they have to. In our culture it's easy to turn to "original sin" and think that people are just born bad. I disagree. People are born innocent. Almost everything we know about ourselves we learn from someone else. 

I know this after watching the birth and subsequent growth of my two daughters. They are watching me and what I do when I'm around. They are watching their mother and how she interacts with me and them. They are learning how to live from me and their mother.

As a father, my job is to create an environment where their physical and safety needs are met. Then I work on love and belonging. I let them know every day that I love them in some way. I start my day with the intention to err on the side of peace and kindness with them. When the house is quiet and drama free, they can relax, absorb the environment and learn while they interact.

But when they present a challenge, it is my job to remember that the challenge means they are not able to respond to the demands of the of their environment. I will admit that what I learned from Dr. Greene is not new to me. For a long time, I've known about this way of life, but have not been able to articulate it until now. 

As a country, if we really want to reform our prisons, we need to stop making the assumption that people aren't motivated to do better. I believe that people are always motivated to do better, they just don't know how. Instead, we can assume that when people are not capable of doing better, that the desire to do better has always been there, but the skills to do better are not. Better to assume ignorance before malice. 

When our needs are met, we can learn and not before then. Getting our needs met is a skill that we must teach our children to keep them out of prison.

This is true of adults inside and outside of prison. Norway has proven that if you help the prisoner meet their needs by giving them the skills they need to get their needs met, they are less likely to return to prison. Dr. Greene proves that if you teach kids the skills they need to cope with the challenges they face, they will be far less likely to see the walls of a prison.

The question of prison reform is not a question of skills. It's a question of motivation. We can choose between money and compassion. If we choose money, then we will get more of the last 20 years. If we choose compassion, we can help to end the suffering of millions of incarcerated Americans and prevent the suffering of countless more.

Saturday, July 18, 2015

Terrorism isn't just for Muslims, but that doesn't fit the mainstream narrative

Black churches are burning in the Deep South of America, but Muslim fundraising has stepped in to help rebuild those churches. Big news right? Not judging by this search of Google for news articles relating to the same trends:



I would expect to see big names like ABC, NBC, CBS or even MSNBC covering this story. Sure, we got one hit from CNN towards the bottom (not shown). Isn't it interesting how Al-Jazeera is at the top?

Could it be that when Muslims fundraise to help rebuild black churches, there's something wrong with the narrative we've been given? If there is a liberal media bias as conservatives often complain of, I'm not seeing it here.

This story is not in the major news because it doesn't fit the mainstream narrative that all Muslims want to kill Christians. I can hardly see why there should be any tension at all between the two since both religions are what are known as Abrahamic religions. Christianity, Judaism and Islam all derive from a single patriarch, Abraham.

I suspect there is a very interesting reason why this news trend doesn't fit the narrative. If Muslims had been found to be burning black churches you can bet that would be news. Then whoever claimed responsibility would be called "terrorists'. But these church burnings are being done by white supremacists and so far, no one is call them terrorists.

The narrative that we are supposed to believe then, is that only Muslims are terrorists. So even if white supremacists are motivated by their Christian beliefs to burn churches, it's just a hate crime, not terrorism. Yet Muslims involved in terrorism are often alleged to be motivated by their Islamic faith.

It is good to see Muslims motivated by their faith to help Christians rebuild their burned down Christians. Peace is possible no matter what the religion. It is simply a matter of desire and effort.

Friday, July 17, 2015

One picture says it all: The people of Iran want peace

There is an amazing photo floating around social media, starting with Twitter:


Check out that t-shirt and the pride of the man wearing it. Considering all the hubris from conservatives in Congress about Iran and nuclear weapons, that's not exactly a model terrorist in the picture. This image is an incredible contrast to the students shouting death to the US that I saw in 1979.

It would seem to me that the people of Iran, at least the young people, are very happy with the nuclear arms agreement that President Obama signed with their country. Proponents say that the agreement will avert a new war in the region. Opponents say that it will only give Iran more room to build a few bombs they can toss at Israel. Well then, if that's the case, Israel might want to shape up, and I sincerely doubt Iran wants a war with anyone right now, if ever.

Still, there's more to the deal with Iran than just weapons. I think some people are really upset that sanctions might be lifted. Some are concerned that trade relations might normalize, that free trade might lift many young Iranians out of poverty by growing their economy. As you can see from this Twitter feed, there is widespread celebration in Iran of the conclusion of this agreement. Cooler heads may prevail with the young people of Iran.

Iran is sitting on 158 billion barrels of oil and has something north of 30 million barrels sitting in tankers offshore. They want to sell oil, no doubt. But the infrastructure is in decline and significant investments are needed to get production back to pre-2008 levels. So don't expect much of a drop in prices at the pump just yet. The implications of this deal have already been baked into gas prices. Frackers are not going to be happy.

I think that the most significant aspect of this deal is the release of so much tension about a possible war with Iran. This agreement could still fall through as conservatives in Congress seem aching to nix it in whatever way they can. Their unstated reason for killing the deal? Because it's another achievement for Obama. That might be bad news in the polls come November of next year. I guess conservatives in Congress have to decide if they want to be seen as doves or hawks. Hopefully, the decision to approve the agreement with Iran is not entirely up to them.

We could have peace. But all of us must share the desire for it.

Thursday, July 16, 2015

If a single payer system is so bad, why all the mergers?

Here is some interesting news regarding Obamacare. It seems that the insurance industry is participating in the current wave of mergers and acquisitions going on worldwide. The fuel for this M/A activity is profits from Obamacare. All of this consolidation is leading to higher premiums for everyone, but for those who can afford it, it won't matter because they own the stock of the companies that are merging.

Moyers and Company have posted an article by Robert Reich noting that while stock values and executive compensation increase, employee wages have remained stagnant in order to support the extra padding for executives. As the mergers are approved by their respective regulators, you know, the people just panting for a job at one of the companies they regulate, we will eventually see layoffs by the thousands. Layoffs are the usual result of mergers and are required in order to get the "efficiencies" that are so necessary to support executive compensation and stock dividends.

All of this would suggest that we will eventually wind up with a few "too big to fail" health insurance companies using whatever market power they have to drive up numbers while sacrificing service and support. We will in effect have a privately monopoly on health insurance with one really big government competitor: Medicare.

It is interesting to note the entire Obamacare debate was of concern that government would take over health care and that rates would rise in response. That is exactly what is happening now, but with private insurers at the wheel. But you wouldn't know that by reading the news. Why not?

Members of the boards of directors in our biggest insurance companies are also members of the boards of directors for media companies. I found that from a rather old article that describes the "interlocking directorates" between health insurers and the media and it is rather startling. Given the current wave of consolidation in nearly every industry, it would not surprise me if the practice of interlocking directorates remains as popular now as it was in 2009.

I first learned about interlocking directorates from AdBusters, home of "Buy Nothing Day", long before the internet became the norm in our lives. I actually subscribed to their magazine - I know, I'm showing my years. Back then, they crafted a very interesting chart of the interlocking directorates of major corporations between disparate industries. I was fascinated that a member of one board of directors could sit on another. It's a great way to coordinate activities between companies - oh, wait a minute. Isn't that "collusion"? Well, not if you ask the US Attorney General.

For many years insurance companies have been using their ties to the media to clamp down on any news that most Americans might have a favorable view of a single payer plan,  you know, that thing that conservatives have been fighting to avoid since President Clinton was in office?

It may well be that private insurers don't mind a single payer plan just so long as it's private, invisible and profitable.

Wednesday, July 15, 2015

A basic guaranteed income in the context of Maslow's Hierarchy of Needs

There has been some discussion lately of a guaranteed basic income. Instead of welfare, everyone, regardless of age or wealth will receive a check from the government as basic income for a year.

A guaranteed basic income is mainly a liberal idea and has actually been around a long, long time. It is surprising to see even some conservatives giving serious consideration to the idea. But given how low skill jobs are slowly disappearing at the hidden hand of automation, as a culture, we need to remember that not everyone is an expert. It just isn't humane to let people starve because they missed the boat, or were not gifted investors with friends in the right places.

Despite the conservative rhetoric that a basic income guaranteed (BIG) would create further dependence on the welfare state, there is significant evidence to the contrary. Radio host and humanitarian Thom Hartmann has taken note of the benefits of a BIG:
A paper published in 2013 looked at two groups in Uganda: one group that received a no-strings attached grant equal to their annual income - about 380 dollars per person - and a control group that received no grant. And what did the unemployed youth do when they were “paid not to work”?
The group that received the grant worked on average an extra 17 hours in comparison to the control group. And they showed a 41% increase in earnings four years after receiving the grant. They invested in skills and businesses. Individuals were 65% more likely to practice a skilled trade two years after receiving the grants. 
Interesting, isn't it? That looks to me like once the basic needs were met, people were free to starting thinking about and acting on what they really, really wanted to do. Consider this chart of Abraham Maslow's Hierarchy of Needs:

This is a concept I learned about long ago. Back then I wanted to be a therapist, but then I learned about the abysmal pay of social workers, so I got into IT instead. Anyway, the chart shows where we start with meeting our needs. Throughout our lives, we are primarily focused on meeting the bottom two, physiological and safety needs.

As we create a stable environment for ourselves for physical and emotional safety, we start looking for love and fellowship. That builds esteem and as we build esteem, we begin to think of who we really want to be and how we can contribute to our culture and society.

When people are faced with the choice to work a dead end job just to keep things going or starve, they will invariably find work, even if they don't like the work. But that way of life is a life of constant fear and self-loathing. "Hey, the money's good, but I really hate my job." Without that guaranteed income, it's hard to take a break, step back and get a job to love rather than hate.

Knowing that BIG is there means being able to invest time and effort into new skills. It also means being able to choose a job to love rather than just taking what comes next. When we're doing what we love, that builds esteem to the point where we are self-actualized. What, exactly does that mean?

There are some slightly differing opinions about what self-actualization is, but it is described in the opening paragraph of the Wikipedia article on the subject as follows:
"Expressing one's creativity, quest for spiritual enlightenment, pursuit of knowledge, and the desire to give to society are examples of self-actualization." (emphasis mine)
Think for a moment about what this means. If our basic needs are met, then we are more able pursue work we enjoy. I once had a video production teacher who said, "Love what you do for work and never work a day in your life". People who love what they do work to give, not to receive. Look at every great actor, songwriter or artist. All of them do it because there is a drive, a force, that compels them to do it. It's just not that easy to make a living as an artist unless you're one of the best.

That's why for many centuries, artistic works were commissioned by the wealthiest alive throughout history. Anyone who has ever seen the J. Paul Getty Museum will know what I'm talking about.

A guaranteed basic income would create a culture where more people are doing jobs they love rather than have to do for survival. They're thinking about the work, not the money. That leads to more productive people, happier people, lower turnover. That would also make employers more accountable, maybe even more polite, for fear of turnover. Turnover is expensive.

The current capitalist system reduces life to a fight over a sandwich. An eye for an eye and everyone is blind. But Darwin said that the fittest shall survive, not the strongest. A country filled with men and women who are doing what they love will outperform any another country filled with men and women who have been foreclosed of every opportunity for advancement (where we've been headed for 35 years).

A basic guaranteed income means we can let go of the basics and work on self-actualization. We can work to give rather than work to receive. We can think BIG.

Tuesday, July 14, 2015

Which country has the lowest homicide rate in the world?

The UN has released a very interesting study of worldwide homicide rates and has found that Japan has the lowest rate of homicide of *any* country in the world. I view this with considerable irony as they were the country that was the recipient of two atom bombs in World War II. Here is a rather long nugget from the report:
With no notable fluctuations, the homicide rate in Japan has decreased steadily since 1955 to reach one of the lowest levels in the world. The country’s homicide rate is associated with a stable and prosperous society with low inequality and high levels of development. Young Japanese males now commit only a tenth of the homicides committed by their predecessors in 1955, and the age and sex distribution of victims tend to be uniform across age groups. This has been attributed by some researchers to, amongst other factors, extremely low levels of gun ownership (1 in 175 households), a greater chance of detection (according to police data, 98 per cent of homicide cases are solved), the rejection of violence after the Second World War, the growth of affluence without the accompanying concentrations of poverty common in many highly developed countries, and the stigma of arrest for any crime in Japanese society. (emphasis mine)
I see several key factors namely, low inequality and very low levels of ownership due to very strict gun control laws. Those two factors alone contribute to this startling contrast in statistics:
The U.S. saw more than 12,000 firearm-related homicides in 2008, while Japan had only 11.
So when I see Republicans fighting every measure aimed at inequality and gun control, I see them fighting against peace and happiness. I see them fighting against a shared prosperity for everyone. I see them fighting against a right to life. If they're looking for a good guy with a gun to prevent gun violence, they're going to have a mighty tough time trying to find one.

Maybe that's because the stress of inequality leaves people predisposed to violence. Just ask the people living in Ferguson and Baltimore. They know.

Sunday, July 12, 2015

Self-imposed Confederate flag amnesia

It is interesting to note the angst, suspicion and antipathy to the Confederate flag. I don't like the Confederate flag for what it was intended to represent: supremacy of the white man over all others of color. Therefore, I agree that it should not be flown by any government, at any level. Taking that flag down is a reasonable, thoughtful and compassionate thing to do. It is how I want my government to act.

If a private person wants to wave that flag in front of his own home, he's legally permitted to do so. The flag can be used as an expression of speech protected by the 1st Amendment. I once had a neighbor that dangled that flag in front of his home. I moved to a better neighborhood because that flag also represents rebellion, a sort of middle finger for the authorities, which didn't seem to bode well for that house or the neighborhood. So I felt justified in moving.

There is even discussion of taking the flag down in museums and removing it from culture in general. This is where I draw the line. The Confederate flag has played an important role in our history and should remain in our museums and our culture as a reminder of the wrong paths our country has taken. It should be displayed in museums with the only other Confederate flag that ever really mattered, the white flag. The Confederate flag should serve as a reminder that we must work every day to defeat everything that the Confederate flag represents.

There is an interesting fairy tale from the Brothers Grimm that emphasizes the point I want to make here: Sleeping Beauty. Sleeping Beauty is a story about a king and his lovely new daughter. At the daughter's first birthday party her guests included family and friends of the king along with several important fairies. But one fairy was not invited probably by oversight, and in her wrath, cast a spell upon the princess. The spell foretold the future, a day where the young princess on her 15th birthday, would prick her finger on a spindle and fall dead. The spell was countered somewhat by a good fairy's spell to limit the damage to 100 years of sleep rather than death.

To save the princess from such a fate, the king removed every spindle from the kingdom, and every cultural reference to the same. In the following years, everyone forgot about the spindle and the princess never saw one until that fateful 15th birthday. (SPOILER ALERT!) On that day, she ventured around the castle to find the same still angry fairy, spinning yarn in a lonely, dusty, forgotten room of the castle. The fairy offered the princess a try at the spindle to learn how to spin yarn, only to prick her finger on the spindle as foretold by the fairy's spell. I guess that's why they call that story "a fairy tale".

Forgetting our history is the problem we want to avoid, for if we forget it, we are doomed to repeat it. It is one thing to ask the government not to fly the Confederate flag. Doing so means that the government acknowledges our wish not to promote what the Confederate flag represents. That flag should remain in our culture, museums and text books to remind us and our children that if institutionalized slavery and discrimination happened once, it can happen again. We need to keep the Confederate flag in our culture not to promote what it represents, but to remind us that we can choose a different path than the one we took so painfully before.

The 1st Amendment reminds us that the right of expression of speech is protected for the people. Not the government.

Saturday, July 11, 2015

Mergers and Acquisitions!! The hobby most favored by billionaire "job creators"

Since the Occupy Wall Street movement started, Wall Street has been on the defensive, trying to justify their wealth by painting themselves as job creators. The bankers in Wall Street seem to think that what they do actually creates jobs. So what have they been up to lately?

There is a boom in mergers and acquisitions this year and the Financial Times in the UK has provided some interesting analysis on the trend. This boom is bigger than any of the previous waves of M/A activity (I'd use an ampersand, but Blogger messes that up). Average price per share in acquisitions and mergers are also much higher than before. But does all this activity create jobs?

Naked Capitalism has reported on the trend and offers a case study: Microsoft and their acquisition of Nokia. Here are the results in a nutshell:
"Beyond the insufferable corporate speak? The “standalone” business Microsoft bought for $7.2 billion a year and a half ago would essentially be shut down. The costs are ballooning. The tab for the Nokia acquisition and some other moves, with both waves combined, now lists 25,800 jobs axed and $10 billion down the drain."
This activity was picked up by Yves Smith, someone who has extensive experience in M/A and can attest to the surreal world of high finance. She happened to notice the original Microsoft story on Wolf Richter's website, Wolfstreet. So when you go to the case study link above, you'll see that there is some commentary by Yves followed by the article reprinted from Wolf Street. Wolf Richter and the story are described as follows:
"By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street."
The nugget in all of this is right here from Mr. Richter:
"Share repurchases, M&A, layoffs, and cost-cutting are easier to make happen for a CEO than inventing things and boosting sales organically, which is really hard."
I know that my post here meanders a bit, but I want to focus on that last point about the contrast between buying companies (that usually means buying the competition) and building and creating things to sell that add value to the lives of customers. You know, the people that are the source of revenue for the company.

When there is real competition, M/A goes out the window and really smart people work hard to create stuff that we can all use and want to buy or support (in the case of free products like Gmail and Blogger). When there is no competition or when money is easy, it's better to pad the compensation package with mergers and acquisitions. Is this the decision that the "job creators" are faced with?

We're currently in the early thrall of a worldwide wave of M/A activity. Microsoft, in their acquisition of Nokia lost $10 billion and cut 25,000 jobs. That's just *one* acquisition out of a sea of acquisitions. Steve Ballmer made a nice chunk of change from this activity. He made enough money that when he left Microsoft, he bought a basketball team for $2 billion. Did he create any jobs? Not many that I can see. I doubt he created enough jobs buying the LA Clippers to wash the 25,000 he lost at Microsoft.

What was the tax rate on the capital gains he made from his "job creating activity"? 15%. Sweet.

This is what we're facing when we go to work for a large corporation that is more focused on M/A than on creating products that customers want. This also begs the question we should be asking when we vote: Do we want to reward capital or labor?

As I've noted in previous blogs, capital hates labor. There seems to be some serious antipathy between capital and labor and it's not really necessary. There is currently a cooperative movement afoot in the US. You might not have heard about it because it seems small now. But the M/A boom we see now, with associated job losses will only increase the chance that the cooperative movement will become a sea change.

Most cooperatives go unnoticed. There are a few of them that are well known. Southwest Airlines is employee owned and is pretty close to a cooperative. Few of us know that South Airlines didn't layoff anyone after 9/11. They found work for their employees to do because they knew the work would pick up again. There is also WinCo Foods. Some of their long-time employees have $1 million saved in retirement due to their compensation planning that works for the employee, rather than just the CEO. You can find a list of employee owned companies here.

The current system is unsustainable and change is inevitable. Unfortunately, most of the changes that need to take place are in public policy. So when you look at the slate of candidates you get to choose from between now and next November, remember that some of them like labor and some like capital.

The lesson from Microsoft is that CEO's and financial engineers don't always know how to create jobs. A vote for capital is a vote for a repeat of that lesson.

Friday, July 10, 2015

Everyone deserves a second chance

Long ago, I was a customer of ATT's cellular service. I seemed to be getting a better rate than before and better service than with Sprint. That was before the ATT we know now with some of the worst customer service around. At that time, ATT was having a bit of a struggle migrating numbers from one carrier to their service and they were pilloried in the press for that bit of trouble.

I held out thinking that ATT was going to learn from that mistake and they did. They did much better shortly after that fiasco and they prospered for working through it. I gave them a second chance.

I'm a parent and I see the value in giving kids a second chance. God knows we give babies a second chance. We try to put food in their mouth and they spit it out. We put it back in until they understand that food is something we swallow. We sit them up and they fall down. We sit them up again and again until they learn to sit on their own. They try to walk and they fall down. We let them hold our hand until they learn how to walk. This process goes on and on until adulthood. Kids will always ask for help until they think they don't need our help, then promptly ignore us to solve their problems on their own. They come back when they find they still need help.

When our kids make a mistake, we can either punish them or give them a second chance. Most of us learned from B.F. Skinner whether we know it or not and punish the kid instead of giving a second chance. We think that somehow, punishment is going to make it better, but it only gets worse. Why talk it out when you can punish first and never ask questions? Besides, we can reward them later when they get something right, right?

That game, rewards and punishment, is not about fostering a better relationship, it's about control. As adults, we play that game, not only with our kids, but with our peers. Kids who didn't learn how to control their own actions can grow into adults who become criminals or just really difficult people.

It is only recently that some have noticed that people behave the way they do not because they want to, but because they don't know a better way. This isn't to say that we should not incarcerate a murderer or a banker that cheated millions out of billions. This is to say that we need only look into the mirror when surveying the pain and suffering around us.

I've grown up in the reward and punishment game in school and in family life. My goal is to stop that cycle and learn how to talk to kids, adults, whoever, to figure out what problem it is they are trying to solve and to help them solve the problem rather than punish them for a problem they don't know how to solve. They might not even have the capacity to solve the problems before them.

This attitude keeps people accountable. It keeps people honest since fear is the reason people lie, cheat and steal, if they do. Most importantly, it allows everyone to engage in the one skill that is going to save mankind: problem solving.

I'm a liberal because I believe in second chances. I believe that when people are not in fear, they are better able to handle the problems they need to solve for themselves. When I look at conservative politics, I just see an eye for an eye and everyone is blind. I see that they punish first and try to forget about the person they put away, rather than look at ways to prevent the problem from occurring in the first place. I see that their philosophy is to cut social spending because that is the only way people are going to learn, without ever wondering if the people they're punishing lack the capacity to learn the lesson in the first place.

So when I see conservative zeal to cut Social Security, Medicare, education, infrastructure and the like, I see a group of people who are unwilling to give others a second chance. Unless, of course, they are "family".

Let me give you an example. Jeb Bush played a significant part in the Savings and Loan scandal back in the 1980s. In fact, the father and 3 brothers were all complicit in the S&L scandal in the 1980s. They cheated people out of millions, yet none of them have gone to prison, two of them have been elected president based on their failed economic policies and one hopes to someday be president, "like his daddy". They all got a second chance.

Ironically, the public policies they promote do not include a second chance for everyone else. Cutting Social Security is all about eliminating that second chance for most people who are not expert investors with friends in the right places. Cutting Medicare is eliminating the second chance for all of those people who did not managed to keep up with the rapidly advancing costs of health care by making more money. Cutting education funding is about removing the ladder they got to use to climb to the next level.

This is why I'm voting for Bernie Sanders. Bernie Sanders is all about second chances. He's all about sharing prosperity when people work hard to create that prosperity. He's all about sharing the risks we take as a country, fairly and squarely. If we build a ladder, we climb it and leave it behind so that the next person can use it. If we want to go up the ladder to the next level, we build another ladder, climb it and leave it for the next person to use. Conservatives want to take that ladder away and use it for private gain. Liberals like Bernie want to share the ladder.

Share the ladder? What a concept. That is how humanity has worked for thousands of years. Some of us know that process as scientific progress. Some of us know is as civilization. Perhaps someday, we'll come to know it as fellowship. In a fellowship, we give our brother or sister a second chance when they make a mistake. That fellowship is the mark of a country I want to build. Together, we can build it.

Thursday, July 09, 2015

The city that legacy incumbent ISPs don't want you to see

Community Broadband Networks brings us yet another success story from Sandy, Oregon (not to be confused with Sandy, Utah). Sandy's municipally owned broadband network now delivers a gig for $60 a month (that's 1 gigabit per second of up and down speed - 100x the typical 10mb/s most Americans are lucky enough to get). The town of Sandy has about 10,000 residents and 60% of the town is either connected or on a waiting list to get connected.

Like so many other towns that wanted better speed, reliability and price, Sandy was met with indifference from the legacy incumbent ISPs like ATT, Verizon, Comcast, Time-Warner and Centurylink. The only way they were going to get better service was by rolling their own network. Fortunately for the residents of Sandy, their legislature is not completely owned by legacy incumbent ISPs.

Here in Utah, the legislature passed a bill into law that prohibits cities from owning their own broadband network unless and until they pass a stringent and expensive set of tests. That bill was passed first in 2001, making Utah the first to do so. The Municipal Telecommunications Private Industry Safeguards Act is model legislation written by the members of the American Legislative Exchange Council (ALEC) and was eventually passed in more than 20 states since 2001.

The goal of ALEC in Utah was to head off projects like Utopia, a consortium of 13 cities that could not get better speeds, service or price for internet access from Comcast or Centurylink. So they worked together to do it. But before they could get the project off the ground, ALEC was there with the legacy incumbent ISPs to do whatever it takes to prevent residents of Utah from getting better internet access.

Some might say that Sandy, Oregon has an advantage, it's a small town, so the costs of building the network are small. Then have a look at Chattanooga, Tennessee with a population of 173,000. They're a much bigger city and they have a very popular and successful municipally owned broadband service working for them right now. Residents in Chattanooga can get a gig for $70 a month. Who is offering that service? The Electric Power Board, a cooperative better known as EPB. The legacy incumbent ISPs and ALEC tried to stop them too, but it was too late.

Millions of people across the United States are being denied better service for internet access not because they don't want it. They don't get the service they want because public policy is not written by the people. It's written by the big money monopolies, including our legacy incumbent ISPs. I say "legacy incumbent ISPs" for a few very important reasons. First is that they're still running copper for the last mile. Second is that some like ATT and Verizon are abandoning their copper infrastructure so that they can escape the burdens of common carrier regulation and the costs of keeping all that copper running. Third is that they make promises they won't keep just to keep the monopoly business going. And lastly, they're utterly dependent upon a monopoly business model that is stamped with government approval - that's the local franchise deals between the ISP and the cities they service.

Sandy, Oregon has something we could all have. That fair city has also proven beyond a doubt that municipally owned broadband networks easily outperform the legacy incumbent ISPs on price, performance and service. The only thing stopping us is a legislature that would rather cater to commercial interests than to the people.

If you're looking for changes in your town and want community broadband, look no further than the Community Connectivity Toolkit, created by the good folks at Community Broadband Networks. There you will find many very useful tools and tips to help bring about a community owned internet service that listens to the people of your town rather than a bean counter in New York.

We can have the ISP of our dreams, but we must get involved and let our representatives at every level of government know that we want it.

Wednesday, July 08, 2015

Clerks who defy the Supreme Court are acting in a personal capacity

It has been interesting to watch the responses to the ruling by the Supreme Court that makes gay marriage legal in all 50 states. Clerks are a quittin'. Senator Ted Cruz says to ignore it. Some businesses are protesting and continue discriminating on religious grounds. Never mind that the the opinion was written by a conservative judge with concurrence from four of the liberal judges at the Supreme Court.

Setting aside all the hubris, I want to focus on one particular aspect of the fallout that few have discussed: personal liability. In Texas, there is a court case brewing over the refusal of the clerk to issue a marriage license for a same sex couple after the Supreme Court ruling:
In Texas, Hood County Clerk Katie Lang had refused to issue marriage licenses to same-sex couples for well over a week after the Supreme Court’s ruling in Obergefell v. Hodges. The conservative group Texas Values rallied in her defense and even the Family Research Council propped up her discriminatory cause. On Monday, however, Lang folded, and she may now have to pay the price for waiting.
What is that price? Attorney's fees for a lawsuit that never had to happen. Now the clerk faces the real possibility of being made an example for others to beware of should county clerks refuse to follow the law. The court, in its discretion may require the state, or the clerk, or both, to pay attorney's fees.

The relevant law is 42 USC 1988, regarding enforcement of civil rights. The law at subsection (b) notes that the court has discretion to apply the law as follows:
In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92–318 [20 U.S.C. 1681 et seq.], the Religious Freedom Restoration Act of 1993 [42 U.S.C. 2000bb et seq.], the Religious Land Use and Institutionalized Persons Act of 2000 [42 U.S.C. 2000cc et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], or section 13981 of this title, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs, except that in any action brought against a judicial officer for an act or omission taken in such officer’s judicial capacity such officer shall not be held liable for any costs, including attorney’s fees, unless such action was clearly in excess of such officer’s jurisdiction. (emphasis mine)
This section clearly acknowledges a well known, long accepted principle in law: actions taken by a government official that are not supported by the law cannot be seen in an official capacity and are considered to be actions in a personal capacity. In other words, a county clerk may not perform or omit an act without authority and be liable in an official capacity. Such action exposes the actor to personal liability, which could amount to a great sum of money, perhaps far greater than a year of salary.

For any clerk who resigned in respect of their refusal to issue a license to a gay couple, they may know well the consequences of ignoring the Supreme Court without authority. So they acted on their conscience while saving their bank account, house and any securities they might happen to own. As long as the government hires clerks that will adhere to the oath they take when they take office, that is a positive trend.

This ruling is important for a number of reasons well beyond the gay community. In decades past, the Supreme Court has ruled unconstitutional laws against interracial marriage, recognizing that the right of marriage applies to anyone, regardless of race or gender. It is a right protected by the 14th Amendment and is not subject to the petty whims of fundamentalists of any religion.

The right of marriage needs no religion to support it or define it. The only thing required to exercise the right of marriage is unwavering, devoted love. All that the Supreme Court is saying is that regardless of your religion, you must recognize that marriage just like any other marriage.

If Clerk Lang is saddled with personal liability for attorney's fees, then let that be a lesson to anyone else who wishes to challenge the Supreme Court in a pretended official capacity.

Tuesday, July 07, 2015

Inequality is the social movement of the 21st century

Yesterday, I wrote about how public policy has come to be the primary tool of the elite in fostering and maintaining extreme levels of inequality. Part of that article devoted time and space to the social movements of the past century. I have known about these social movements for a long time - I've read about them in school as part of my history lessons but I've never really seen a social movement first hand as an adult. I didn't really connect the social movements to inequality abatement until I read the following passage from this report:
"From the 1930s through the 1970s, capital generally fought a losing battle, able to shape and contain the specific policies that grew out of the various social movements, but ultimately unable to prevent the enactment and enforcement of a host of policies that worked strongly against employers’ immediate economic interests."
The report, "Inequality as Policy - The United States Since 1979", by John Schmitt, is from the Center for Economic and Policy Research (CEPR), and was published in 2009. CEPR is also host to one of my favorite blogs, "Beat the Press" (Image in my mind when I first found it: dog meets rolled up paper). Anyway, that report really highlighted the role of social movements in the enactment of economic and social reforms for the rest of us. To put it differently, the wealthy may still think they can rule the country without the rest of us, but they still need us. Otherwise, there is no "country" to live in.

Every major policy change in America came about due to social movements as noted in the same report by Mr. Schmitt (notice below that Thomas Piketty is cited long before his rise in the NYTimes bestseller list):
"The decline in inequality from the end of the 1920s through the end of the 1970s – evident in the Piketty and Saez graph – was a function of a series of social movements over that same period that worked to reduce economic and social inequality. The 1930s saw the ascendancy of the U.S. labor movement, which went from a small force scattered across the national geography and industrial structure to an institution representing over one-third of U.S. private-sector workers by the mid- 1950s. The civil rights movement of the 1950s and 1960s pressed for political, social, and economic equality for blacks. The women’s movement of the 1960s and 1970s fought for social and economic equality for women. The labor movement, the civil rights movement, and the women’s movement separately, but especially together, changed the way U.S. corporations did business. Wages and benefits rose for all workers, union and non-union. Employers were legally and socially prohibited from paying minority and women workers less than white men for the same work. Together with the environmental and consumer movements of the 1960s and 1970s, which sought to constrain U.S. businesses engaged in endangering the environment and consumers, these social movements had the effect of increasing incomes for those at the bottom and lowering incomes for those at the top (by raising the cost of doing business). "
All of these social movements were met with strenuous opposition by the business community. We still see this opposition today, though not as overtly. Unions are still around, but only amount to about 8% of the workforce. Right to work laws have largely neutered the power of unions. We still see on the books laws aimed at minimizing the power of minorities in elections. We still see enormous losses to the minorities in terms of unemployment and poverty. We still see that women earn about 77 cents for every dollar a man earns. We still see banks gambling with their deposits and running to the government when they lose all their chips. And pollution by some big businesses, namely, big oil and coal, has seen a huge revival with Deepwater Horizon being the most vivid example, but not completely without punitive action.

Over 30 years, we've seen numerous protests over war, racial and gender equality, but despite having an internet to work with, nothing quite as organized as the social movements of the middle of the last century. Perhaps that's because the elite feared a population with time on their hands to get engaged in government, to protest when government did not address their concerns, and be ready to fetch their pitchforks when protests went unheeded. The elite in America seem to fear a truly empowered middle class.

The economic policies of the last 30 years seem to have had more to do with keeping everyone really, really busy than with economic growth. Perhaps that plan may finally backfire when it becomes common knowledge that the real unemployment rate is 11%, far above the stated 5.3% that this administration would have us follow. That is a lot of idle hands, but without the money to buy a pitchfork.

There is just one candidate running for president that understands that social movements are required for effective social and economic change: Bernie Sanders:
"Here is my promise to you for this campaign. Not only will I fight to protect the working families of this country, but we're going to build a movement of millions of Americans who are prepared to stand up and fight back," Sanders said in the first major speech of his campaign. "We are going to take this campaign directly to the people - in town meetings, door to door conversations, on street corners and in social media."
Check out this short bit of irony. The ad at the top of the page for the article I linked to above looks like this:



A new reality TV show about how an entrepreneur turns a small company around? What an appropriate juxtaposition. The message? "My money, my rules." Yeah, we've been getting that message for the last 35 years from the elite.

Bernie Sanders has been engaged in social movements since the 60's. He understands how they work and has contributed to their many successes of that era. He also understands the relationship between public policy and inequality.

Now Bernie comes full circle to running for president, not just as a man who wants to be president. More than that, he is here to lead a social movement that will help him get elected as president and to effect the economic and social changes that the 99% have been clamoring for. No other candidate seems to notice that in order to make effective change, a social movement is exactly what is needed today.

Armed with social media, decades of experience with social movements, and some of the key players who worked Obama's campaign in 2008, the odds look good for success. He's filling stadiums whenever he comes to speak. The internet is buzzing with #feelthebern. The place where the social movement to arrest inequality meets with Bernie Sanders is in stadiums across the country, but ultimately, they are likely to meet in the White House about 14 months from now.

Monday, July 06, 2015

Public policy decisions to depress wages can lead to unconscionable contracts

Evidence is mounting that inequality is a public policy decision, not just something that happened. In any economy, there is bound to be some inequality. But the inequality we see today, in the United States towers above all other countries. Most people have no clue just how bad it is and find it hard to imagine that inequality in the US is worse than your typical banana republic. Here's a video to explain the magnitude of the problem in the US:


I just finished a report about inequality as a result of public policy. This report by economist John Schmitt provides a good overview of the way public policy has been debated. In most cases, the debate over inequality focuses on some external effect, as if that process is happening to us. Globalization and technology are the two main bogeymen in the conservative story, bogeymen meant to distract us from what is really happening.

As Schmitt notes in his report, from about the 1930s to the late 1970s, social movements have worked to create and implement public policy that reduces inequality. Equal rights and equal pay for women, the unionizing movements, progressive taxation, and desegregation were all policies that helped to flatten the distribution of wealth.

But starting around the late 70s, business interests began to coalesce and organize to provide effective opposition to the movements that made the middle class strong in the middle of the last century. The opposition to labor started to deliver decisive blows with the Reagan administration starting with the firing of the air traffic controllers when they went on strike in 1981. Since then, we've been treated to a non-stop party to marginalize or neuter the power of labor.

Businesses are in the market to make money to be sure. They want to be paid fairly for their products and they want to be paid in a timely fashion. They want to make a profit. This is a reasonable set of assumptions to work from.

On the other hand, business interests worked hard to resist the social and economic reforms of the last century. Having established the upper hand, they have pursued their interests with government intervention in the market to the point we see today. A point where one family owns more wealth than 130 million Americans - combined.

This concentration of wealth has become an unbeatable opponent in public policy debates. We know this because our legislatures have largely ignored everyone except the 1% for at least the last 20 years. Study after study has borne this out. Without the organized social movements we had in the 20th century, the average man or woman is unable to influence public policy.

Any businessman will tell you that they know an unconscionable contract when they see one. They know when they're not being treated fairly. They know they can sue when they're being treated unfairly. They also know that they can find another supplier or customer rather than take an unconscionable contract in order to pay the bills. A good businessman always knows he has options.

The last 30 years have shown us that business in general has had little compassion for the employee. The lack of paid time off, a minimum wage that has not kept pace with inflation or productivity, the fight over health care, these are just some of the examples where businesses have worked hard to externalize costs at the expense of the employee.

A basic principle of contract law is that a good contract is one where both parties are better off after entering the contract than if they did not. Business knows a good contract when they see one. Businesses organize in associations, like the US Chamber of Commerce to improve their bargaining power.

In the same way, employees organize into a union to improve their bargaining power. Yet, businesses prefer not to allow employees to unionize and seek government intervention in the market to prevent unionization. This is just one example of many to show that business likes a free market to the extent they are the ones set free.

But when business uses government intervention in the market to suppress wages, or deny the right to unionize, that intervention can color all employment contracts as unconscionable. Businesses claim to want to work in a free market, but their desire for government intervention on their part belies their claims.

Where we draw the line depends on whether our leaders just represent the top or everyone.

Sunday, July 05, 2015

Gigabit Internet access is (almost) free for ten years in North Kansas City

As some of you may already know, I'm a big, big fan of community broadband networks. Community broadband networks come in many forms, but generally, they are owned by a local municipality, usually a city or a small town cooperative. The vast majority of community broadband networks outperform legacy monopoly operators on both price and performance. To put it differently, Comcast, Time-Warner, ATT and Verizon are not the only game in town in cities with municipal broadband.

Community broadband networks arise from the lack of service provided by the legacy monopoly operators. Small communities from around the country, stuck with slow, unreliable access, begged the big 4 and a few more for better service, with higher speeds and better reliability. When the incumbents ignored the requests or failed to deliver, the local government took matters into their own hands to find a way to finance a fiber network for their citizens.

In almost every case (more than 450 cities and towns around the country) where there is community broadband, there is economic growth. There is a draw of business to the community. Jobs are created. Money starts to move and the people connected to that network get some relief from the gnawing sense of being left behind.

Today, I want to share with you a development from North Kansas City. I learned about it from the Community Broadband Networks website, the place where I go to get the news about community broadband. NKC happens to be next to Kansas City, where Google Fiber first opened shop. Google made big news by offering a gig for $70 a month plus a reasonable installation fee a couple years ago. Google Fiber is now in a handful of cities across the country, but they have no plans to build out in North Kansas City. Why not?

Because a few years ago, that city laid their own fiber network in the ground. But once they had their fiber network in the ground, they did not have the internet connection to deliver service to their residents and businesses. Along comes Data Shack, a dedicated hosting provider.

A hosting provider is someone who will host your website, or your server if you want to use your own hardware. A hosting provider takes care of the power and connectivity required to keep your business on the web alive. They ensure continuity of service in a way that most of us in small business or even a large business can't do in a cost effective manner, for a fee.

DataShack and the City of North Kansas have created LinkCity, an entity that offers internet access over a municipal network to business and residents alike. Here's the kicker: residents get gigabit access for $300 for installation and $0 monthly charges for 10 years. No one else that I know is doing that. You'd think that would be big news, but Community Broadband Networks broke the story first as far as I know.

The circumstances and business environment in NKC seem to be hard to reproduce anywhere else, but this network shows us what is possible. It shows us that business service revenue can support free residential internet access on a municipal network and it represents a natural synergy between business and consumers.

Business is generated when people have access to the internet. The money that people aren't spending on their internet access is spent at local businesses. For a family that might be paying nearly $200 a month for triple play (phone, cable and internet), that can translate into a nice dividend for the local economy. Community broadband networks are about just that - keeping the money in the local economy and growing jobs in our hometown.

When I first read the story I didn't think it was really possible. So I listened to the interview and it all made sense. Not every community can do this, but now we can see what is possible. Now we can see what our leaders aren't telling us about how internet access can be deployed and financed. Now we can see internet access as a true utility.

Saturday, July 04, 2015

Boycott, Divest and Sanction Laws make their way through TPA

Israel sees itself as a victim in the court of public opinion. Israel has been accused of committing numerous war crimes against their perennial adversary, "The Palestinians". In response, numerous financial entities have joined a movement to divest, boycott and sanction Israel. Companies, institutional investors and other entities that have influence on Israeli economics have become a target of legislation designed to punish any attempt at politically motivated boycotts, divestment or sanctions against Israel. That movement is better known as the BDS movement, for Boycott, Divest and Sanction.

Yes, there is now a law just for that, quietly hidden in the Trade Promotion Authority bill signed into law by President Obama only a few short days ago. Congress never ceases to amaze me in how they show favoritism to this or that entity, however big or small.

While this custom made legislation seems notable, there is an overarching theme to consider, perhaps it's better to identify this line of thought as a subtext to the debate. There has been plenty of news regarding the move to divest, boycott or sanction coal and oil. There are also websites devoted to helping people divest their investment portfolio of anything that would support fossil fuels, such as this one.

What I find of interest is that when it comes to Israel, someone in Congress thinks that the government can intervene and discourage divestment of Israel. Yet, no one has offered legislation to do the same for Big Oil or any other company.

Boycotts, divestment and sanctions are perfectly legitimate free market responses, even if they are politically motivated. I know for myself, that if I don't like the way a company is behaving, I avoid buying their products. If I join a group of people to do the same thing, that is still a free market response to bad corporate behavior, and it has the benefit of being coordinated.

Divestment is also a free market response to bad corporate behavior. If I join a movement to divest my investment portfolio from any entity, whether that be company or country, it's my right to do so. It's a perfectly legitimate free market response to bad corporate behavior that I believe places me at a disadvantage.

As to sanctions, well, that's up to the government. It's a matter of diplomacy and sanctions should be investigated carefully and used with caution.

Boycotts and divestment movements have not always been able to show clear results, but the news about them sends a clear and politically motivated message to their targets. The people still have power if they organize and coordinate their campaigns, as long as they remember that no matter what Congress passes, the right to divest and boycott remain expressions protected by the 1st Amendment.

Divestment and boycotts are what we can expect in a free market when corporations or countries act badly. This is what rational people know, even if a foreign country believes they have Congress in their pocket.

Friday, July 03, 2015

Memo to billionaires: you can't have it all.

I just saw an amazing video last night. The star of this video is Bernie Sanders. For those of you who are familiar with his politics, I won't bore you with the details of his speech. For those who don't know Bernie Sanders, you can find out more about him here, here and here. If you would like to donate to his campaign, go to berniesanders.com.

The video below is more than an hour, including a brief introduction. The speech is all Bernie. For those familiar with Bernie, you are going to hear familiar talking points. The overarching message is this: To the Billionaires and millionaires, you can't have it all.


Now take a look at that audience (this assumes that the picture in the video stays the same after I post this blog). The entire stadium is packed with 10,000 people. Before the event, there were more than 9,000 RSVPs from people in Wisconsin just to see him on July 1st, 2015. This is from a state that somehow managed to elect Scott Walker to the office of governor. Note to the GOP clown car: none of these people were paid to attend.

If anyone still thinks that Bernie doesn't have a chance of winning the Democratic nomination and the White House, they haven't seen this video. The audience is absolutely fanatical. Near the beginning of the speech, someone yells, "We love you, Bernie!", and he laughs a little to acknowledge what he heard, and smiles. In that audience there is genuine affection for Bernie. I've never seen anything like it for any politician. Note that this just one of many examples of fervently excited crowds where Bernie gives a speech, with many more to come.

Some will say that Bernie is outgunned by Hilary's money. Sure, that's true if you want this election to be about money in politics. But Bernie is not about money in politics. He's about taking money out of politics and replacing it with character, substance and ideas that can stand on their merits.

Bernie is outgunned by money in politics if we expect voters to passively accept what is being advertised on TV, radio, the papers and on the internet. Bernie Sanders for president is not just about getting one man into the highest office in the land. This is a movement far bigger than Bernie. This is a movement to remind the billionaires that they can't have it all. This country and its government belongs to all of us, not just a handful of billionaires and millionaires.

It would seem fitting then to be writing this post on the eve of Independence Day. Bernie notes in his speech that the Walton Family, owners of Wal-Mart, own more wealth than the bottom 130 million Americans. That family, and others like them, have fostered a dependence upon them and their near-monopoly power in the American market. That monopoly power is not possible without relentless influence in public policy. That is what we want independence from.

Bernie Sanders for President is a movement to declare independence from the billionaires and millionaires singular influence in government. It is a movement to wrest enough political power from the monied interests to restore our system of government to a state where it can work for all of us. As Bernie said in the video, "When the people stand together, we can win!"

Thursday, July 02, 2015

Payday loans for Greece

If you're a fan of international news where the only topics ever discussed on NPR are Israel, Palestine and Washington, DC, you might have missed the news about Greece. Greece defaulted on a nearly $1.8 billion payment that was due a couple days ago. Shortly after that, their leader, Alexis Tsipras, indicated there is willingness to accept most of the terms for bailout from the European Commission, the IMF and European Central Bank, also known as "The Troika".

There is some very interesting commentary that can be found on the internet on this topic. First, there is Joseph Stiglitz, a noted economist very well known for his progressive views. He notes that the terms being offered by the Troika are quite punitive and almost totally unnecessary. He also notes that the Troika has exactly zero interest in accepting part of the blame for the current situation with their austerity measures. Two very interesting observations also came to light: the money being paid by Greece to repay the loans is being used to support other banking systems in Europe and that same money will likely be loaned out to Greece again for the bailout. The same money being loaned to Greece will be loaned to them again? Isn't that sort of like a payday loan?

Some economists have noted that the current debt to GDP ratio of Greece, as a country, is about 177%. Supporters of Greece have noted that Greece isn't the only country with a very high debt to GDP ratio. Supporters of the Syriza government in Greece would do well to note that in 2013, Japan had a debt to GDP ration of 240%, but we don't see the IMF hammering them hard for their debt like they're doing to Greece. Funny how the IMF is not pressing them for reform. Maybe that's because they're running big trade surpluses.

There are even a few economists that are comparing the US to Greece and offering warnings that we could be in the same boat with Greece in the not too distant future. I happen to disagree, and I'm not alone. As noted previously, Japan at one time in the recent past, boasted a debt to GDP ratio of 240% yet their interest rates on bonds are still very, very low. No one is worried that Japan will default on their bonds. In 2013, that ratio for the US was about 96% and even now, treasury bonds are still selling at very low rates. The interest rate is what tells us how confident we are about the ability of a government to repay the bonds.

And more than one economist has noticed that austerity policy has cost the region lots of money and economic growth. Even Stiglitz has pointed out that the structure of authority in the European Union was designed to put workers at a disadvantage. It seems to be a backdoor to imposing austerity on workers and putting bankers in the driver's seat of the government.

There is plenty of talk about a "Grexit", where this weekend, Greece will vote on a referendum to accept the bailout terms or not, that vote determines if Greece will stay in the European Union. Even Angela Merkel, the Chancellor of Germany - that country is one of the chief creditors to Greece - is insisting that Greeks have their vote and the time to do it. If Greece leaves the union, everyone else is going to feel the pain. Greece will be fine and should recover nicely from their experiment with the Euro. At least someone is willing to give them the space to make up their minds.

This might be seen as the first really big crack in the European Union, but it's not the only one. It's starting to look like a significant minority wants to leave the union. Adam Ludlow of The Spectator in the UK notes as follows:
"While the German Finance Minister, Wolfgang Schäuble, has been doling out the conditions to Greece about what it will have to do to stay in the euro, one in three people from his own country want to return to the Deutschmark. The same proportion of Italians and French would like to see a return to Lira and the Franc. By comparison, people are most supportive of keeping their current currency in Britain and Sweden, countries with their own national tender and monetary supply."
Notice also, that the countries that retained their own currency are pretty happy with the union as it is. Isn't that interesting? The ability to maintain a reserve currency is what makes the US, Japan, the UK and Sweden so strong. The surrender of that power means subjugation to the entity that controls that power. That is probably the biggest reason yet why the Greeks are so likely to leave the Euro.

Tuesday, June 30, 2015

Sorry. The negotiating restrictions in TPA are all for show

So President Obama signed the Trade Promotion Authority (TPA) he wanted into law and he gets the authority so coveted by the elites, the 1%. The authority to negotiate a trade agreement for a straight up and down vote by Congress. In that act, Congress waives the right to amend or filibuster trade agreements under TPA. That will grease the chute for the Trans Pacific Partnership and the TransAtlantic Trade and Investment Partnership along with 41 other trade agreements. Oh, and that Trade Promotion Authority is for six, very long years.

Here is the TPA bill that was signed into law. I reviewed it and could find only one paragraph for currency manipulation (hey, lets keep the dollar strong). Note also that there is a big section for intellectual property (a trade barrier that will surely be raised). I bet that will get more attention than compliance with international labor and environmental protection laws or an unwanted balance of trade. There are 12 major objectives, but those are the two that I was really looking for. You might find interest in the others.

Orrin Hatch wrote this editorial and got free press in the Deseret News for it. He is my old and crusty Senator for my state, Utah. He gushes eloquent about how great TPA is going to be. He tells us how important free trade is for middle class jobs. He tells us that the authority granted to the President includes restrictions on how trade agreements should be negotiated. He tells us that the new law signed by President Obama yesterday contains numerous "objectives" that must be met by Congress.

Here is what Hatch didn't say. He failed to mention that projected growth in the economy from the two biggest trade agreements mentioned above will amount to a rounding error in calculating GDP (most of which will go to the top 1%). He failed to mention that trade barriers are already at historic lows and that there isn't much else that can be done to lower trade barriers. Finally, after all that he doesn't even mention that when the Fed starts to raise interest rates, as they want to do, all of the projected gains from those two really big (not so free) trade agreements will be wiped out. But wait, there is one more gem our esteemed Senator Hatch forgot to mention.

We can do more to balance trade by eliminating the strong dollar policy that we've maintained for 30 years than we can by all of the trade agreements contemplated by the TPA signed just yesterday. A balance of the dollar against the currencies of our major trading partners will stem the flow of some $500 billion a year to foreign countries. A balanced dollar will bring about 5-6 million jobs home, far more than any of these trade deals promise. But you won't here that from Orrin Hatch.

Hatch is one of the old guard. He's financed by big donors, the relevant donors who think that having a billion is not enough. Having a few billion is still not enough. Having effective legislative control, well, that's really nice, but it's still not enough. I'm not even sure if the elites have any idea of what "enough" means.

There is a silver lining, though. There is a man running for president, a democratic socialist, with a legislative agenda that has remained the same for 30 plus years - an agenda diametrically opposed to trade agreements like TPP and TTIP. He's climbing the polls and if projections are correct, he very likely to beat Hilary Clinton (a supporter of NAFTA) at the Democratic Convention next year for the nomination. The passing of the TPA is lighting another fire under a campaign that is already on fire. That man is Bernie Sanders.

The major media are doing everything they can to put out that fire and frankly, they're using cold water on an electrical fire. That electricity runs through the internet, spreading the news, filling auditoriums, football fields and parks to overflow capacity. The internet is alive with the Bernie Buzz. The passing of the TPA is to me, a tipping point where Democrats, Republicans (!) and independents know they've been had and can now have a genuine alternative come next November.

President Obama has done a great many things with a very difficult Congress that insults him and spits on him like there is no tomorrow. But on the issue of trade, well, we've been played and played hard by Mr. Obama. As president, Bernie will be of even greater help to put an end to all this nonsense about "free trade".

Bring it on, Bernie!

Monday, June 29, 2015

I thought ISDS was only for banana republics

Trade Promotion Authority (TPA) is not just for President Obama, it is also intended for the next president after that (the term for TPA is six long years). There are two big trade agreements that are getting much of the news, the Trans Pacific Partnership (TPP) and the TransAtlantic Trade and Investment Partnership (TTIP). That's what most of the fuss is about with TPA in the news.

I say six long years because TPA will grease the chutes for 41 other trade agreements that will surely beat the stuffing out of the middle class if they are ratified. It's just a wonderful power grab for the elites without having to do all that haggling with a Congress that is trying to look like they love the middle class, when all they really want more money for their next election. TPA means that the president can negotiate an agreement and submit it to Congress for an up or down vote without amendment. That's what removes the haggling from the picture.

Despite all that fuss, there is not that much discussion about a provision common to both agreements called Investor State Dispute System or, ISDS. ISDS is a concept designed for dealing with developing nations with developing legal systems. The point of ISDS is to enable trade between two countries to minimize risk of "nationalization" or expropriation of a business by a government during times of civil unrest or crisis. You know, revolution. Or maybe, the foreign government gets greedy and decides that they want the oil industry for themselves. That's what ISDS is for.

ISDS is not for mature countries with mature legal systems like the US, Canada and just about every other member of the European Union. It is not for Japan, or South Korea, either.

Before ISDS, businesses would buy business insurance to make sure that if their foreign branch was somehow expropriated by a foreign government, they could recover their costs. That worked pretty well, but there are some emerging markets where they want in, but insurance costs are too high. I don't think those emerging countries are a party to the treaties currently in negotiations. Here is list of the TPP partners:

Australia
Brunei Darussalam
Canada
Chile
Japan
Malaysia
Mexico
New Zealand
Peru
Singapore
Vietnam

The point of ISDS is to have some recourse when a banana republic nationalizes your industry. Isn't it? There might be a couple of countries here that qualify as a "banana republic". Brunei still uses caning as a form of punishment in their legal system. All of the other countries are well established in their legal systems and have mature economic systems. Even Vietnam is coming along nicely with major manufacturers like Intel employing thousands there.

So if none of the parties to the agreement are banana republics, what is the point of ISDS? My guess is, legislative control, but not in the way we usually think of it.

In the United States, the government is sovereign. Jurisdiction is invited and you can't sue it directly unless there is a law that gives you standing to sue. Oh, you can try to sue, but if you have no standing, your case will be summarily dismissed.

The TPP would give corporations standing to sue the government directly in the event that the government passes some law that would interfere with a corporation's business. That includes imagined future profits that would be lost due to some law that the corporation doesn't like. This can result in payouts in the billions to said corporation - with taxpayer money. There are numerous examples and truth be told, the number of ISDS suits has exploded in recent years.

There is another aspect of ISDS: the potential for self-dealing. Lawyers working for a corporation can also serve as a judge on an ISDS panel in TPP. The Public Citizen website explains the concept rather well, here:
Comprised of three private attorneys, the extrajudicial tribunals are authorized to order unlimited sums of taxpayer compensation for health, environmental, financial and other public interest policies seen as frustrating the corporations' expectations. The amount is based on the "expected future profits" the tribunal surmises that the corporation would have earned in the absence of the public policy it is attacking. There is no outside appeal. Many of these attorneys rotate between acting as tribunal "judges" and as the lawyers launching cases against the government on behalf of the corporations. Under this system, foreign corporations are provided greater rights than domestic firms.
In a very real and legal sense, ISDS is a backdoor, a way to circumvent the host country's legal system without the checks and balances we already maintain in the US. It is a provision we should not take lightly and we should be ready to fight it.

I believe that the ISDS provisions in any of the treaties before Congress should be removed. But if they remain, then we can challenge them on one simple basis: The Constitution is still the supreme law of the land, and there is nothing in the Constitution that permits subordination of the Constitution to a treaty. Nothing.

Any country that thinks it needs ISDS in the treaty is probably making a tacit admission that it is a banana republic. Could it be that Obama is aware of that admission in his quest to sign treaties with ISDS provisions?

Sunday, June 28, 2015

The best things in life are often unanticipated

Ever notice how some of the coolest things in life are a surprise? Consider the humble birthday. We have one each year of our lives and we take notice of them in whatever way we are comfortable. Some of us get presents that are wrapped so that we know that something is there and elicits some anticipation.

When we open the present, we discover a gift, often, it's a gift we never considered before and it's something we like. That's what this little post is about.

What I want isn't necessarily something I already know about. Let's start with a circle to show what I know:


That's a pretty small circle, huh? Now let's look at something else:


That is what I know I don't know. It's a little bigger, but still small compared to everything else:


Everything else is out there. What you want isn't necessarily what you already know about. I've seen this happen to me countless times and treasure it when it happens. 

There is a great example of how this works in a show called, "Joan of Arcadia". It was a short run TV series that had great writing and character development. That show always put the protagonist, Joan, into situations she didn't like and found herself doing stuff she didn't want to do. But she always found some silver lining at the end.

Expect the unexpected and roll with it. It might turn out to be a really nice day.

Saturday, June 27, 2015

Marriage is not defined by religion. The 1st Amendment says so.

I see that some Christians are very upset with the ruling by the Supreme Court regarding same sex marriage. Some are saying that the decision will lead to polygamy (Utahn Mormons rejoice). Some are saying that the government has no right to define marriage (I'm one of them, but not for the same reasons). Some are saying that they will set themselves on fire in response to the ruling. Some have offered a box of matches and gas.

Justice Kennedy wrote the opinion and the final paragraph provides the nugget of truth everyone was waiting for:
No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its
fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.
Equal dignity under the law. That sounds like the 14th Amendment. The paragraph resonates with most, if not all of us. All of us would like union with some other person. I found it myself with my wife from Vietnam, Alice. There was a time in our country when social norms and perhaps some laws would have proscribed our marriage. But we live in a more enlightened age.

This ruling makes same sex marriage legal in all 50 states and provides a measure of security for everyone. For as soon as you prohibit a basic right for someone, it's only a matter of time before someone else finds a reason to limit access to that right for another group or set of people. In this particular case, Christians felt that they were being demonized for trying to corner the definition of marriage to suit their own purpose - to further their ambitions for their religion. A sort of Christian supremacy.

There is another reason that same sex couples should be able to get married. Sure, equal protection under the law is important, but the big one, at least in my mind, is that marriage cannot be defined by religion and recognized by government, without violating the 1st Amendment. What does the 1st Amendment to the Constitution say?
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." (emphasis mine)
If I read that correctly, Congress lacks the authority to define marriage based on any religion. That means the end of the Defense of Marriage Act. Maybe some could see that if Congress is prohibited, that the states have the right to prohibit same sex marriage reserved to them. Or that the states may define marriage as it suits them. Granted, equal protection under the 14th Amendment is the stronger argument, just about every state constitution prohibits establishment of religion. We usually see the following language in their various constitions:

"The State shall make no law respecting an establishment of religion or prohibiting the free exercise thereof"

Usually, this provision gets top billing, first and foremost just so that we can get it out of the way. This my point. No state in their right mind would allow the government to define marriage. If they did, it's only a matter of time before some other religion (besides good 'ol Christianity) gets a foothold in government to do things *their* way. The Founding Fathers established a secular government and for good reason.

They know that honest people sincere in their beliefs can come to blows when it comes to religion. Getting religion out of the way in civic life makes everything else so much easier. If the government were allowed to use a definition of marriage promoted by one religion or another, there's going to be trouble.

I'm glad to see the ruling and an end to so much suffering. Letting gay people get married is not a problem to me and it doesn't bother me. For those who are bothered by it, there are bigger problems to be concerned about that require much greater attention, time and resources to solve. Let's just get along and move on.