Tuesday, December 23, 2014

Do Protests Based in Confrontation Work?

Based on my knowledge of history I think confrontation works in some specific (and rare) circumstances, but not in others.  Here is my thesis:  Confrontation is counterproductive if the people you need to achieve your goals identify with the people whom you are confronting.

The Civil Rights movement in the United States used protest marches, sit-ins and other confrontational tactics and in the end they were very successful, segregation was abolished. The reason the movement was successful was that the marches, sit-ins and other confrontational approaches were directed at the people of the South.  The people and local and State governments in the South just got angry and defiant in response to the protests. But the rest of the country, that did not particularly identify with the people of the south because of their segregationist policies, imposed the solution through Federal legislation.

Gandhi used similar tactics in India to achieve independence.  The people in England, thousands of miles away, largely unaffected by the protests, imposed the solution.

Confrontational tactics in South Africa made little headway for decades.  The white population that dominated government just got more determined to defend Apartheid.  The end of Apartheid was the result of press coverage that ultimately caused the uninvolved rest of the world to impose crippling economic sanctions.

On the other hand in my 45 years of adult life I have seen confrontational protests by many groups about many perceived wrongs that in my estimation did not produce positive results.  The Vietnam war protests went on for nearly a decade and in my estimation did not shorten the war and may have lengthened it.  The lack of success by the Occupy protests of a couple years ago is highlighted by the fact the Republicans whose policies created the inequality economy are about to take over both houses of Congress.   The numerous protests that led to the overthrow of dictatorships during the Arab spring have failed miserably because in the end the confrontational tactics undermine the restraint necessary for a functioning democracy and have resulted in a confrontational (as in shooting each other) free for all among different groups striving for influence.

So, I conclude that unless there is some uninvolved greater power that can impose a solution, the emotion confrontation causes in those confronted will undermine both the support of many of the folks needed to create the solution, and to some extent the restraint and respect fundamental to democracy.

The current wave of protests about trigger happy cops in local jurisdictions does not seem to me to lend itself to solution by imposition from some uninvolved greater power, and in fact the confrontational actions are aimed at the citizens and police of the jurisdictions where the change must occur.  They are in the face of the people they need to solve the problem.  They are more likely to create resentment than cooperation.

Comments?

Monday, December 15, 2014

Racism or Apathy?

On Monday, December 8 at about 8:45 pm I was one of those trapped in a car stopped by protesters invading Interstate-80. At one point during the hour or so the protesters were milling around the car they began chanting "This is Democracy in Action".

Wrong. Protests are the tool for disenfranchised populations. Democracy in action is voting.

The focus of the protests is the shooting of a young black man in Ferguson Missouri. Ferguson is a town of about 21,000 persons.  67% of the population is black, yet 5 of the 6 city council members are white, 50 of the 53 police officers are white, the city government funds much of its operations from traffic fines that fall disproportionately on blacks. So is the problem racism? Or apathy?  Despite 2/3rds of the eligible voters in town being black, in the last city election cycle less than 10% of the eligible black voters cast a ballot.

The shooting in Ferguson, the recent shooting of a black teenager playing in a park with a BB gun, the choking of a black man in Staten Island, the fact that 20 black men are killed by police for every white man, indicate there is clearly a problem that needs to be addressed.  


It seems to me these protests are venting, not problem solving.  The Ferguson shooting happened last summer.  For the next couple months leading up to the congressional elections in November the news all over the country was full of protests, marches, confrontations and pundits pointing at racism, or defending the police.  Yet in the election in November voter turnout in Missouri was 32% of eligible voters, and 37% nationwide, the lowest turnout in over 50 years for a mid-term election. Republicans, based on recent history a party that is not going to be particularly concerned with even considering whether there is a problem, swept to victory all over the country, including Missouri. Evidently if the angry protests that filled media headlines fired up anybody it was mostly Republicans. White conservatives control Ferguson and now law and order Republicans are regaining control Congress. 

I don't live in Ferguson, so I can't vote in Ferguson.  I voted nationally, and my vote got lost in a sea of apathy.  It's frustrating to watch people trashing businesses, blocking trains and freeways and costing local taxpayers millions of dollars in extraordinary police expenses in my town when the solution to the problem is in voter registration drives to convince the folks most affected by the problem to register and vote.  A politically organized black community in Ferguson could dictate the kind of police department they want, and a democratic Congress would be much more inclined to take steps to address the problem on a national scale.   







Wednesday, December 3, 2014

Racism - a Red Herring

While the underlying brain and behavioral characteristics that create that capability to be racist are present in all of us, it seems like sometimes the word becomes an excuse rather than a path to a solution.

Scientific evidence seems to document that we are all hardwired to instinctively draw distinctions between "we" and "others" (see discussion in "Syria & Ukraine - Thoughts on Tribalism" published at this site 3-12-14).  Everyone is inclined to put themselves and people like them in the "us" category and adopt stereotypical views about everyone else in the "other" category.  Does racism, or sexism or religious bigotry exist in America? Unquestionably, and every other country, and it always will.  But calling people racist solves nothing, and explains nothing.

The Grand Jury decision, and accompanying vandalism and looting, in response to the decision not to prosecute the police officer who shot Micheal Brown in Ferguson Missouri brought this to mind.

I tried to ignore what was going on in Ferguson, because American media are useless when it comes to understanding problems and developing solutions.  Facts are boring.  But emotions and opinions stir people up, so the media hands the microphone to advocates willing to use strong language and state unequivocal opinions.  Little effort goes into developing facts and what few facts are developed get buried in a blizzard of opinion and innuendo.  But, I got caught up and have since been stewing about it.  

On the one hand were the commentators characterizing the shooting as a regrettable incident, a police investigation into a petty theft that went badly wrong because the very physically imposing young victim became aggressive.  The facts that are available provide some support for this view.  The victim was a young man 6'4" tall and about 290 pounds.  A very big man.  Having tussled with other young men a bit when I was that age I have no doubt a man that size could kill me - and most of us - with his bare hands if that was his goal and he caught us in close quarters where we couldn't use greater mobility to stay out reach or reach a weapon.  The physical evidence and the Grand Jury testimony seem make it pretty clear the victim was acting aggressively, then trapped the police officer in his car, punched him and tussled with him over the officers gun.  So clearly the officer had reason to be afraid.  But this view makes one wonder why the officer pulled his car sideways, essentially trapping himself, and why he didn't have a taser or other non-lethal defense option for close quarters.  This suggests not racism, but bad police training and equipment.

On the other hand were the commentators characterizing the event as a shooting of an unarmed black teenager sparked by white America's racism toward black America.  I don't think I saw or heard a single comment that didn't link "an unarmed black teenager" with the victims name.   Technically correct, Micheal Brown did not seem to have a weapon, but the description is a misleading characterization considering the aggressiveness he demonstrated and the threat his size presented

Both views seemed to ignore some part of reality.  The November 29th issue of the Economist brought out a number of facts that helped crystallize my thinking about what was bothering me.  So here are some facts, largely gleaned from the Economist.

The town of Ferguson is run by white Republicans who seem to follow conservative principles.  They evidently don't like taxes, are not keen on spending money for city services.  The city council has 5 white members and one black member.  The police department has 50 white officers, 3 black officers.  The second biggest source of funding for town operations, 20% of the towns revenue, comes from fines and asset confiscations imposed by the criminal justice system.  The amount collected averages to $124 in fines paid each year for each of the 21,135 residents of the city.  Last year the municipal court in Ferguson issued 32,975 arrest warrants last year, 1.5 times the number of arrest warrants as their are city residents, mostly for traffic violations.  86% of the traffic stops are of blacks.

The Economist cited the story of one woman who was stopped by police because she had "a black looking car".  The officer asked whether she had any marijuana, she replied no, perhaps a little to vehemently.  She ended up with three tickets, one for car windows tinted too dark, one for slowing down to much at a traffic light, and one for disrespectful behavior towards a police officer.  Three tickets carrying, presumably three fines.  Paying fines can involve standing in line for hours, if you don't have the money to pay the fine you may incur jail time and more fines.  It is hard to avoid the implication much of what police do in Ferguson has more to do with bringing money into the city than protecting and serving the residents.

These are the sorts of facts that cause people to say the problem is the whites being racist.  

Here is my problem with citing racism as the problem.  It makes the problem a function of white behavior.  But 67% of the population of Ferguson is black.   Yet turnout for the last election of city officials was 12% of the eligible voters.  A Washington Post analysis of the election found that white citizens were three times more likely to vote than black citizens.  If we use that figure as accurate it means that significantly less than 5% of the eligible black voters bothered to vote.

That mirrors the recent congressional election across the country where only 37% of the eligible voters voted, the lowest percentage since 1942 when many voters were overseas fighting WW II.  California actually had a significantly higher voter turnout, so that means much rest of the country probably had less than 37% of the eligible voters participate. Conservative Republicans (mostly white) almost always vote.  Most Blacks, mostly Democrats, apparently are too busy or otherwise engaged to vote.  So Conservative whites run Ferguson, and the country.

I recognize that who we each are today is strongly influenced by the ancestors we descend from, from whom we take much of our outlook on the world, and the black population of this country has a legacy of slavery, then second class citizenship in the south, and poverty.  I also recognize we all, of every race or creed, have to constantly fight the tendency to lump people we don't know into categories and create expectations based in stereotypes.  But in my experience the vast majority of white America see blacks as persons of equal citizenship stature.  They may sometimes still engage in black stereotyping, but they also stereotype Muslims, and at times even people from France, or fans of rival football teams. 

As conservative Republicans are prone to say, freedom isn't free.   As the Bible says, God helps those who help themselves.  I have no power to help folks who can't take the time to vote, so I have no patience with folks who still think calling folks racist is solving a problem.  



Monday, November 24, 2014

Should Government Pay for Art?

Media stories here in the San Francisco Bay Area lately been covering a movement among artist's (under-employed in their view) for a repeat of the Government subsidies of Art that occurred during the Great Depression.

San Francisco and other older parts of the Bay Area are full of Art from the Great Depression, particularly murals on public buildings.  I love them.  I could live without them easily, sometimes I stand right by or under a mural oblivious to its existence, but still from time to time I have contemplated a mural and enjoyed it as an emotional expression of the views of a particular time in history.

But in my estimation government sponsorship of Art is generally inappropriate and unwise because of the nature of Government and the nature of Art.  

First, Government is inherently coercive.  Even in our democracy, you have to pay your taxes.  We tolerate this coercive nature of government because for many things only government effectively address needs for the common good.  But government is also very susceptible to individual groups of people using political power to bend government to what is in their interests rather than some clearly defined common good.  

Second, Art is fundamentally personal expression.  Art can be a form of play that is very healthy and necessary, particularly for children, or it can be an expression of deeply rooted emotions, but in either case Art is primarily created to make the artist feel good about himself.

To me, Art that is timeless, is generally created by people for whom self expression is more important than money.  They see the world through their emotions and their Art allows them to express those emotions.  Many great artists did not achieve much financial success during their lifetimes because they did not cater to the current fads in art, or did so within the context of exploring deep and timeless emotional worlds in their own soul.

But there is another world of Art - Art as a business - filled with intelligent people who have good social skills and  are primarily motivated by financial and social success.  This world is about our logical brain, not our emotions.  It grows out of one of the characteristics of human behavior that becomes more prominent as life gets easier.   When we feel secure about basic needs some people become willing to pay inordinate amounts of money to buy designer clothes or handbags as a status symbol to assure themselves they are more special than everyone else around them.  When everyone can buy designer jeans, those with more money turn to Art to be special.  It is the world where Andy Warhol paints a Campbell's Soup can and sells it for millions, because he is perceived as a little more cool than everyone else.  Art as business isn't about exploring deeply held emotions, its about current fads.  Its about looking at what everyone else thinks is the latest cool thing in art, then trying to figure out how to do something just different enough to be perceived as clever and cooler.

I used to live in an upper middle class university city.  It is a great town, filled with intelligent, highly educated people, I doubt there is a nicer place to live in the world.  That city has been buying public art and putting it around the city for years.  It is abysmal.  I never had any involvement in how the art was chosen, but have talked to a few local politicians about it at social events so I have a suspicion what happens.   It is Art as business.  Successful politician's generally build their life around figuring out what society thinks is good and supporting it.   Art is good so supporting the arts becomes an important goal, particularly in and upper middle class city where meeting basic needs has never been an issue for most people.  

Politician generally are not going to encounter a moody starving artist focused on self expression, nor have the background to recognize artistic genius.  But they are going to encounter lots of the Art as business people because the Art as business people are going out lobbying for public money.  So the art as business folks get the public money.   In that city I lived in that has resulted in a town full of public art that to me has no more emotional appeal than a banana peel on the sidewalk, and is often tacky in its efforts to use color to give an installation some meaning.  Most of it I find not particularly pleasant to look at nor is it capable of sparking any kind of coherent emotion.

I am sure there are lots of folks who view themselves as artists in that city who think the local public art is great.  That's fine, or it would be if they had paid for it.  But my tax dollars apparently were used to pay for something that I, and I suspect many other taxpayers, consider inappropriate and/or ugly.  I have no problem with the Art as business folks building a whole industry out of selling stuff to people with too much money, but I do have a problem with Art becoming just another lobbying group trying to advance their interests at the public trough.

When all the hungry people have been fed, and all the old folks taken care of, and all those who aspire to be educated have been educated, maybe then I would consider government getting involved in paying for public art.  

Saturday, November 22, 2014

What does Net Nuetrality Mean?

There is a big fight going on the Washington right now about whether what is apparently the current policy of  Federal Regulations, "net neutrality" should be changed to allow Internet pricing according to use.   I've been getting periodical emails from outraged folks claiming this is a Comcast, ATT, Verizon power grab - that we are all going to be pawns of these big corporations extorting money from us.

It is complicated and hard to understand what it is all about, and it is not helped by the term "net neutrality" which seems to have been chosen to be one of those nice sounding buzz words that will create a positive perception without regard to what it is actually about.

Then I heard the other day that some enormous percentage of the band width in the entire world is used up by Net-flix.  It was a mind boggling number, I want to say somewhere around 50% of all the worlds bandwidth is used by Net-Flix, apparently one of the biggest opponents of "Net Neutrality".   It began to make sense to me, I believe.  I could reduce it to a simple, easy to understand principle I could use to make a decision, to wit:

That people that use the net pay in proportion to the how much band width they use.

This changed my whole view of the argument, from leaning toward supporting net neutrality toward being pretty dubious of it being a good thing.  I basically believe good economics requires that the people that use something need to pay for it in proportion to their use, and that not following that system warps both behavior and economics for the worse.

It appears to me that the supporters of Net Neutrality are people who enjoy an unfair economic advantage under the current system, who want to keep it.  Internet entertainment companies can offer entertainment options at prices so cheap people use them much more than they would if they had to pay more to reflect how much they are hogging the bandwidth.  The people whose whole lives revolve around the net and electronic media are riding on the backs of all the companies and people that use the net as a part of their business, or life, but not the central part.

Not being well versed in the law Congress enacted that provides the underpinning for the current regulation of the Internet, beyond the perception it is nonsensical and way to complex, I have no way of knowing if the proposed rule would give an unfair benefit to Comcast, AT&T, Verizon, or other companies through whose system the Internet operates.  But if it does I think we need to address that unfair benefit with oversight of their activities rather than continue to enshrine a rule based on a fundamentally wrong principle as a basic operating premise of the Internet.

Maybe net neutrality was justifiable in the early days of the Internet to jump start use of the Internet.  It kept prices low to encourage people to take advantage of the benefits of the Internet.  But the Internet is no longer a fledgling, the biggest companies in the world are now tech companies largely built around the Internet.  Time to start letting market forces make decisions, not regulators.

Sunday, November 16, 2014

Global Warming and Nuclear Power Plants

Nuclear Power plants require enormous amounts of water to cool reactors.   So engineers often put them at or near sea level, often literally at the seashore, where abundant water can be drawn in and discharged.

What happens if the sea level rises 200 feet?   Despite the scientific certainty of the early 50's, we have never developed a safe process for getting rid of spent nuclear fuel rods, our best solution is burying them miles under a mountain out in the desert somewhere.  What will happen to the Nuclear Power plants located near sea level all over the world if the sea levels continue to rise?  How will we deal with all the fuel rods?  Will the physical structure that is the reactor core become a source of radiation in sea water?

Here in California I am thankful we have largely rejected Nuclear Power development over the years.  Within the State there is only one active Nuclear Power Plant, Diablo Canyon on the Central Coast near San Luis Obispo.  Attempts to locate Nuclear Power plants at Bodega Bay, Sun Desert and on the Stanislaus river were defeated before construction was begun.   Plants at Humboldt Bay, San Onofre, Rancho Seco and Vallecitos were built and operated for some period of time, but decommissioned after mechanical problems (typically problems with getting cooling water to the reactor core) generated a lot of bad publicity.   Rancho Seco was closed after approval of the voters of a ballot proposition which pretty much closed the door to future efforts to locate Nuclear Power plants in California.

But virtually every one of the power plants in California were at low elevation, and are near major urban areas.

What is the risk?  Will the closed Rancho Seco contaminate the bay that will created in the area around Sacramento?  Will the closed San Onofre plant contaminate the shoreline that will be where much of coastal Southern California is now?  Will Diablo Valley contaminate the coast from Hearst Castle down to San Luis Obispo (beachfront property with a 200 foot sea level rise) Pismo Beach and beyond.

I don't know, and the problem is even sincere efforts by science to predict the risk have to be taken with a grain of salt.  Far too often science has made pronouncements about reality that turn out to be false.  Scientists, like all of us, are prone to forgot that, paraphrasing the immortal words of Donald Rumsfeld (quoting others before him) - we don't know what we don't know.

Thursday, November 13, 2014

Do Low Tax Rates Really Encourage Investment?

Now that Republicans have taken control of both houses of Congress there is once again talk of boosting the economy by cutting taxes.

It made me realize that in the 20 years or so I have been reading the Economist I have regularly seen the assertion that low taxes encourage investment, sometimes by the Economist quoting Republicans, sometimes by the Economist theorizing or editorializing.  But I have never seen any data to support the assertion.

Looking back over the last 40 years I have a harder and harder time accepting that assertion as true, and am certain it is not true for all situations.

Recent economic history has made it pretty clear that the theories of human motivation that the science of economics has been rooted in is to reality what a stick figure drawn by a 5 year old is to the reality of human anatomy.  This assertion that low taxes encourage investment is beginning to look to me like economic theory based on this stick figure understanding of human motivation.  It assumes every person is motivated by money above all, and that nobody ever feels like they have enough money to focus on other things.

This assumption doesn't square with my life experience or research findings I have seen.  

A research study from a couple years ago found that for most people about $70,000 a year is enough, beyond that figure money doesn't  motivate them.  I'm sure there are people who want far more, but I can't imagine that there is anyone that doesn't have a point where they feel their needs and wants are met, at least in what money can buy. So for most humans who reach the point where they have enough, if they continue working it is not for the money.

So what is it?  I think there are lots of potential explanations.

I came out of law school just about the time Ronald Reagan took office.  Within a couple years he started the rash of tax cuts that have characterized the last 40 years of government policy.  When I first started practicing law lawyers expected to make good money, but it was only part of the reward.  As they built up their practice they hired staff so they could work reasonable hours and have a life as their practice expanded.

I left the practice of law nearly thirty years ago, but am in touch enough to know the practice has changed dramatically.  It is all about money.  To compete big law firms require their lawyers work incredibly long hours.  The have downsized the amount of support staff enormously.  In the law business it is pretty clear to me the primary result of tax cuts has been longer hours for those driven to succeed, layoffs of the staff that used to lighten their load, and more money in the pockets of the most driven individuals.

For the lawyers in big firms I don't think it is all about the money.  It is about prestige, accomplishment measured against your peers.  To the extent it is about the money its not fundamentally about what they want to buy, it is that how much money you have is the marker of how successful you are.  

Back in the early 1950's, partly to pay off the debt of WW II, Congress created really high tax rates for people that made a lot of money.  If you were hauling in vastly more than most other people each year the dollars at the top end your pile of money were taxed at 70, 80 or even 90% of what you took in.

The logical response of the very wealthy at that time was to limit the amount of money they took in personally, so they focused on building empires.  They hired lots of people, started new companies.  Instead of paying high taxes to Uncle Sam they plowed money into building for the future.  The following couple decades are now viewed by economists as the golden years.  Low unemployment, high wages, a health economy.

Contrast that with the last couple decades of boom and bust and asset inflation.  Big companies are currently rolling in money but they are generally not hiring or starting new businesses, they are kicking out the money in enormous salaries for the top executives, or using stock buy-backs to pump up their stock price, making both the top management and shareholders wealthier.  Low taxes on individuals make this an economically rational choice.

Individual wealthy people also generally aren't starting new businesses and hiring people.  They are trading in stock, real estate, art, classic cars - building their personal wealth and in the process inflating asset prices.  The assets aren't improved, no value is added.  The price just keeps going up because the people with lots of money are swapping them back and forth, both as an easy, low maintenance way to store your money, and as a way to  evidence their high status in society.  But it is not generating productive economic activity.  

It seems to me our tax cutting policies of the last 40 years have stood motivation on its head.  The 1954 Tax Code, with its high marginal rates discouraged what I would describe as frivolous earning and spending to encourage people to invest in real productive activity.  The 1954 tax code also had a provision called income averaging, so the people who were just making lots of money for the first time could average their income over the last five years for tax purposes.  This provided a ladder for people to get up to that position of comfort before the really high tax levels kicked in.   Income averaging disappeared with the Reagan tax cuts in the mid-1980's.

I think if we really want to rebuild an economy that works for everyone we need to start looking at high personal tax rates that kick in at some point on the income scale to make overbuilding your short term personal fortune less attractive than building long term investments.

Tuesday, November 11, 2014

The Problem Isn't God

For decades the Middle East has been full of dedicated warriors of God convinced God wants them to fight non-believers.   That mind-set has now developed to what is perhaps its logical conclusion.  ISIS, the self proclaimed Caliphate of the Levant, essentially kills or enslaves anyone who disagrees with them.

In India millions have been killed since the country achieved Independence as different religious sects wrap themselves in their religious beliefs and attack others with different beliefs.

In the US, for last couple decades politics has been dominated by people who believed God wanted them to punish homosexuals, even though their religion reveres the ultimate man of tolerance and peace.

The transparent injustice of people wrapping themselves in religious belief to judge and punish others causes some folks to reject the whole notion of God.  But the void left by the rejection of God is often replaced by other ideologies that, in the end become logic obsuring naked self interest.  ISIS is oddly reminiscent of the Kymer Rouge in Cambodia a couple decades ago, who slaughtered all those of who did not accept their rule in the name of communism, a doctrine that explicitly rejected God.

The problem isn't God, it is our hubris.  A basic truth is that we cannot know the exact nature of reality, we can only infer from what we can perceive about the world.  Even with Science we regularly see yesterdays truth superseded by a different and more nuanced reality.   But imprecision can spark indecision, so we follow leaders whose personalities reject imprecision by adopting a plan that creates rules for action.  God becomes the logic that fills the void to the personal advantage of the leader (and by association the like minded followers).  God becomes a tool for pushing those who are not us down for the benefit of us.

All the major religions have enjoyed periods of peace and tolerance.  But when times get tough our tendency to frame our view of God in a reflection of our own needs and desires produces persons impatient with inaction who rally others of like mind to political action, or violence.

Ironically, the most dedicated religious folk often reject the notion that Darwin described reality with his theory of evolution.  Then they adopt religious views that are in essence a reflection of Darwin's fundamental tenant, survival of the fittest.  Life is a battle and God is on our side, we are chosen to lord it over others.

If one believes the history of the evolution of human society reflects the influence of God it becomes obvious that whatever force it is that we call God favors, above all else, that we cherish and respect our differences, instead of using them as catalyst for battle.   Societies based in survival of the fittest among competing religious groups tend to foster turmoil and conflict, societies based in respect and cooperation tend to foster peace and prosperity.

Democracy is in one sense fundamentally consistent with the notion God favors respect and tolerance.   A functioning democracy requires a degree of respect and cooperation.  Like the proverbial canary in a coal mine, if democracy is wobbly, or cannot survive it is a reflection of the fact the society is still fragmented into groups in survival of the fittest mode.

Sunday, November 9, 2014

Global Warming - Why We Won't Muster An Effective Response

One of the reasons I am operating from the assumption no significant response will happen to slow down global warming is because almost any response by individual countries will be ineffective if it isn't simultaneously adopted in every major industrial country in the world.  That won't happen due to the realities imposed by countries economically competing with one another.  An example is the proposed Carbon Tax intended to encourage a reduction in greenhouse gases.

Here's a hypothetical:

USA.Inc and China.Inc both manufacture widgets.  It costs both $1 to produce each widget.

The US imposes a carbon tax that adds $.05 per widget to USA.Inc's cost per widget.  The US also imposes a border tariff on incoming widgets of $.05 per widget, so USA.Inc and China.Inc, in theory, remain equally competitive within the US.

But USA.Inc is no longer competitive anywhere outside the US, because their fixed cost on every single widget they manufacture is now $1.05 and China.Inc's fixed cost per widget is $1.00.  So USA.Inc's market share outside the US will plummet, while their market share inside the US will remain static, so they will sell fewer widgets.  This undermines their economies of scale, over time driving their fixed costs per widget up even higher.  At the same time China.Inc's market share is rising, they may be experiencing greater economies of scale so their cost per widget may continue to come down over time.

USA.Inc won't just stand by and sink into bankruptcy.  Their only real solution will be to move their manufacturing facilities to another country so they don't have to pay the tax, and only pay the tariff on widgets sent to the US.

So the net effect of a unilateral carbon tax adoption by the US will be more US companies moving operations out of the country, fewer jobs in the US, and a slowed down economy, while boosting the economy of countries that are not addressing global warming.

If we adopt a carbon tax will other nations also adopt one out of the goodness of their heart or to avoid our tariff?  Short answer is No.  It is hard for me to imagine, for example, China's leadership, having suddenly been handed the gift of a huge industrial competitive advantage over wide swaths of US industry would upset that situation.  (Or our Congress doing anything if China suddenly made their industries less competitive).  They would take about it, and might eventually, dawdling around for 10 or 15 years to let their industries get thoroughly entrenched as market leaders, but by that time the damage to the US economy will be considerable, and probably very little will have been accomplished in reducing greenhouse gases.

So in essence to effectively address the problem we have to get much of the world to agree to the solution, simultaneously.   Will Russia, a oligarchy built on oil wealth, or any country whose political stability depends on selling petroleum to the rest of the world, jump on board?   Will teetering governments in developing countries who would have to tell their people they have to wait to achieved the access to stuff they see on electronic media be able to put the whole country on the path of delayed gratification?

I hope to be proved to be an excessively cynical old Grinch, but I put that hope in the same category as my hope to discover the fountain of eternal youth.   

Wednesday, November 5, 2014

A Republican Congress - Here we go again?

I don't consider myself particularly partisan or ideological, so whoever wins an election I am hoping for the best.  But I must admit having the Republicans take control of Congress (again), in light of the past history of Republican's controlling Congress, doesn't leave much room for optomism about a good result.

In the last 100 years this will be the fourth time Republicans have controlled both houses of Congress.  The first time was 14 years from 1919 to 1933.  The second time was short, one congressional session, from 1953 to 1955 when they rode into power on Ikes coattails.  The third time was the 12 years from 1995 to 2007.

Of course the long periods of time Republicans controlled Congress, 1919 to 1932 and 1995 to 2006 both ended with the US in two of the worst economic crisis in recent history.  The Great Depression and the Great Recession.  As I have noted previously when exploring the striking similarity between those two time periods, Republicans pursued similar policies with similar disasterous results.

However, the two year session from 1953 to 1955 does offer a little bit of hope.  They did manage to pass the 1954 Internal Revenue Code that was the rules of the game for the next 30 years of relative prosperity.  (Of course we did sink into a bad recession a little after the Democrats replaced them).  

But my cautious optomism is tempered by the differences between 2014 and 1953.  In 1953 Ike was the President.  As the hero of WW II Ike was enormously popular.  He was a moderate Republican, which coupled with his popularity and his inclination to compromise tempered the power of Conservatives in Congress.  Today, with Obama the President, the most hardline Republicans seem to control the agenda, and they seem to care more about crushing Obama than doing good things for the country.

I think back to a couple years ago, after the Fed's announcement of QE3, which was followed by a jump in the stock market, Republicans objected to QE3, sparking comments from some stock traders speculating that Republicans really did not want the country to succeed.  

The Republican objections were partly based on economic theory but mostly seem to rest in their current ideological fixation that Government is necessarily always bad and should never tinker in the markets.   My personal take is that Republicans would be offended by the suggestion they don't want the country to succeed, but from where I sit it appears they have a different idea of success for the country, coupled with a real attraction to simple, easy to understand ideology's so they don't have to deal with facts, which tend to be messy and difficult to sort out. 

In general Republicans represent the people who have done well the last couple decades.  A simple truth of psychology is that for most of us, when things are good, we resist change that moves away from the habits to which we have become accustomed.  This makes people tend to ignore facts that are inconvenient, and the older we get the more resistant we are to change. Two years ago a lot of people were noting that when the camera panned across the audience at the Republican Convention that chose Mitt the delegates were overwhelmingly white and older.  What we have been doing for the last 30 years has worked for them, so they don't want to change it, even if it hasn't worked so well for much of the country.

Another factor is a lot of Republicans work in the defense industry, which is partly why they have done so well personally the last 20 to 30 years, because for nearly 30 years we have been incurring debt primarily to fund our huge defense outlays.  It is very convenient for them to pretend that our deficit is a function of food stamps and welfare so they can ignore the fact we incurred most of our deficit by almost dollar for dollar increases in defense spending coupled with simultaneous tax cuts.

(That's not to suggest there aren't Democrats who aren't set in their ways, but the Republican party seems to rely much more on older folk than the Democrats.)

One of the big differences between the Great Depression and the Great Recession was the Great Recession never got near as bad as the Great Depression.  In part that was due to the GW Bush economic team steering him away from classic theories of Republicans that the markets will fix everything, and pushing him into initiating the (hold your nose) bank bailouts.  After the 1929 stock market crash, Herbert Hoover had three years left as President, and Republicans continued to control both houses of Congress for the next three years.  Hoover and the Republicans sat on their hands believing the markets would correct themselves.  By 1932 around 5000 banks had failed, unemployment was near 25%.  Franklin Roosevelt and the Democrats swept the Republican's aside and Republicans were really a minority party for the nearly 50 years, Democrats controlling both house of Congress for 24 straight years in the 50's, 60's and 70's.    It was very clear to most voters whose policies caused the Depression so Republican ideological arguments made little headway (there was even such a thing as a moderate Republican during those years). 

Unfortunately for the Democrats (and the country in my view) after the policy mistakes had been made and we were just beginning to slide into the Great Recession the Republicans began losing control when the Democrats won the house in 2006, and then in 2008 won both houses and the Presidency just as the bottom was completely falling out of the economy.  The Democrats in effect stepped in just in time to take the blame for the mess the Republicans created, at least in some voters minds.  That allowed Republicans to do nothing but obstruct for 6 years to make Democrats look bad, and their obstruction has now rewarded them with control of both houses of Congress again.

There may be some Karma at work here.  There are a lot of indicators that the recovery everyone has been expecting momentarily for the last 6 years is not only not arriving, but the US and world economy are probably going to get worse before they get better.  Maybe just in time for the Republicans to step into control of Congress and take some well deserved blame.


Tuesday, November 4, 2014

Global Warming - the Politics of Winners and Losers


Accepting the projected rise in sea levels of 216 feet in the next 100 years as at least a useful working number, here are some elevations for the seat of Government for various political entities.

California:  All but two of the major cities in California are at elevations below 216 feet.  Sacramento will be 150 feet under water.  Move the capitol to San Francisco or Los Angeles?  Both will also be largely inundated, as will Oakland, Stockton, Santa Rosa, Eureka, much of San Diego and Santa Barbara.  The only major cities that will not be underwater will be Fresno and Bakersfield.  California potentially has a big problem with rising sea levels.

The United States.   All the major cities on the Eastern Seaboard are barely above the current sea level.  A rise far less than the projected 216 feet will swallow up much of  Boston, New York, Baltimore, Washington DC and Coastal cities all the way down to Florida, a State almost entirely lower than 216 feet.   On the gulf New Orleans is already under threat, most of Louisiana will disappear, Shreveport will need dikes to survive.  Houston is at 50 feet above current sea level,  On the west coast Portland will be 50 feet under the inland bay that runs down the Willamette Valley, much of the greater Seattle area will be underwater.

Internationally:  Of our two greatest rivals in the last half century, Russia and China, Russia's seat of government is in no direct physical danger from rising sea levels.  Moscow is at about 550 feet above sea level.   Beijing on the other hand is about 150 to 200 feet above sea level, below the maximum projected rise of 216 feet.   London is only about 78 feet above the current sea level, Paris about 115 feet.  Berlin 112 feet.

Much of Central and South America will be relatively unaffected, the seats of Government for many countries are far up in the mountains.  Buenas Aires is only 82 feet however, while Brasilia, on the other hand is nearly 4000 feet.

So What?  So what does this suggest about how the world will respond to rising sea levels.  It seems to me that a lot of people are going to be desperate and angry as the sea level starts swallowing up their homes and businesses.  It is going to create enormous political unrest.  It would be a very difficult, potentially explosive time in the best of circumstances, but it will be exacerbated by the disruption of Government institutions being displaced.  It could be a time where what many of us hoped would be the rising tide of democracy will become a rising tide of militaristic despotism.

Ironically, Central and South America, whom the rest of the world has often viewed as one of the most politically unstable areas of the world, could become the worlds most politically stable areas, along with Central Asia.

Next:  Why we won't muster an effective response to global warming.

Saturday, November 1, 2014

I've Become Obsessed with Global Warming - part 1 of ?

I'm in Cambria this afternoon, a little coastal town that is not as famous as the big nearby tourist attraction, Hearst's Castle, about 8 miles up the road, but a delightful coastal community.  This area in San Luis Obisbo County is one of the areas that is suffering from severe drought, so bad they have closed the bathrooms at Hearst Castle to save water and brought in port-a-potties.  But Cambria is still a peaceful bucoloic place to spend some time.  We saw Dolphins cavorting around the surfers when we went out to watch the Sunset last night.  Actually the Dolphins had probably found a school of fish under the surfers so were mostly hunting but they look cavorting ish much to the delight of the tourists on shore watching the sun go down behind the clouds.

I'm neither a global warming fanatic, nor a global warming denier.  I accept that the science suggests we are probably heating the world up with our industrial development and lifestyle.  Sure we don't even know what we don't know, but you have to make decisions based on the evidence available, at least if you want to behave conservatively in the true sense.  If you pick at the weaknesses in the evidence so you have an excuse to deny the most likely explanation for all the evidence, you are not practicing good decision making.

But for many years I wasn't really inclined to pay too much attention to global warning.  It is pretty clear to me a political solution is not going to happen since trying to control global warming by cutting back emissions pits the haves with developed economy's against the have nots with billions of people who want to enjoy something like the standard of living the haves have.  Even within the haves there is conflict between the people that take the long view and the people that don't want to upset their advantageous current economic situation.  So a unified world response is not going to happen.  The weather will change in some undetermined manner, rainfall patterns will change in some undetermined manner, and there will be winners and losers.  But, I've thought, we here in California, blessed with so much diversity, will be able to adapt to the changes.  So it was pretty low on my list of concerns.

Then I saw the National Geographic article a while ago about how much the sea level will rise if all the ice caps melt in Greenland and Antarctica.  The science guys who study melting ice and such things said it would all melt in 100 years if melting continues at the rate it has been occurring, and that would bring the sea level up 216 feet.

Presumably it won't be the sea level jumping up 216 feet on January 1, 2114.  It will be sort of like compound interest, rising little bits at first then accelerating over the years, but it still would be an astounding change to our physical environment.

In the article, and in other sources I have seen they talk about the disaster rising sea levels would cause in Bangladesh, but 216 feet, or even 26 feet would threaten coastal areas all over the world.  When I was 20 years old 100 years seemed an unfathomably distant future.  Now at 67 it seems much shorter.  100 years ago my grandparents were in their teens.   Coupled with the fact the science is imprecise, it could happen sooner (or later) but what if, for example, it rose 25 feet in the next couple decades?

I live on the ridge that forms the eastern boundary of the City of Berkeley looking out at the San Franscisco Bay.  So I pulled up a google map of the bay area and set it on the terrain setting to have access to the elevation markings.  If the sea level rises 216 feet the economic engine that is the bay area today will no longer exist.  The houses on the ridges that surround the bay will be looking at a much bigger bay that has swallowed up all the commercial areas.  From the financial district in San Francisco, to Silicon Valley to the I-880 stretch of development in Oakland, it would all be under water.  Even 26 feet would swamp all the Bay Area airports and much of the crucial economic infrastructure

When I expanded the map I saw that at 216 feet Sacramento, and Davis, the town I lived in for 30+ years will be under 150 or so of water.  Stockton will be gone, Fresno will be the bay front property at the southern end of a second inland bay.  Much of Napa and Sonoma County will be underwater, the northern end of the expanded bay will be about Geyserville and St. Helena.

Most of Los Angeles and much of San Diego will be seafloor.  On the west coast Portland will be largely underwater, and much of Seattle.  The whole eastern seaboard, including Boston, New York, Washington DC, Baltimore, Charleston, and most of the State of Florida will be underwater.

Rising sea levels would have a massive economic impact on the United States.

So now I go to some nice relaxing beach resort like Cambria and I find myself looking around imagining what is going to be underwater, both in the near future, and in the longer term.  I pull up topographical maps to see how far up the canyon that brings Santa Rosa Creek down through town will the sea intrude.  I imagine which houses up on the hill are going to have great view, which houses are going to be isolated on little islands surrounded by the intruding sea.  I speculate on where the business district down along Santa Rosa Creek will go as the sea swallows up the current business district..

The California I've known all my life is going to be reshaped in ways that affect people I know and love today, and I want to know what it will look like.

Next:  The politics of global warming - who wins and loses from rising sea levels.

Monday, October 20, 2014

The Irony of Obamacare

As we approach the congressional mid-term election the media conversation is all about how the Republicans are well positioned to come out of the mid-terms with control of both houses of Congress for the first time since the period from 1996-2007.

The last time voters trusted Republicans with the keys to Congress they managed to set the table for the biggest economic catastrophe since the Great Depression, and for dessert they invaded Iraq, an action that has destabilized the entire middle east, creating a quagmire of violently competing interests from which it is beginning to appear we will never be able to extract ourselves, and which it is beyond question we are not going to resolve.

How have the Republicans managed to convince voters to turn back to their leadership?  Most of the issues they flogged on the road to victory from 1995-2007, fear of the gay menace and immigrants, trust Wall Street but don't trust Government, have become losing issues with many voters.  Although Obama walked in the door in 2008 with impossibly difficult problems on the economy and in the middle east, the Republicans have managed to convince many voters Obama is the reason those problem aren't solved.  But Republicans can't make a lot of headway using those issues because too many voters remember that it was Republicans that made all the really bad decisions that blew up the economy and got us into Iraq.  But, the Republican fingerprints on the first big thing Obama did, enact a law to set up a framework to provide health insurance to all, are not so obvious.  So the biggest issue the Republicans have tied their hopes too the last couple years has been Obamacare.

Obamacare is a perceived as a bureaucratic mess (and this voter shares that perception to some extent).  Ironically Obamacare is mess mostly because of the Republicans in Congress were so intransigent, so stubborn and uninterested in dealing with the fact our health care system was the most expensive and least efficient system in the world, that they refused to support any kind of health care reform unless every possible lobbying group with campaign dollars was appeased.  

That universal medical coverage for all citizens is a good thing is a no-brainer (a fact currently highlighted by the Ebola fears).  Even arch conservative Richard Nixon had recognized that it was necessary for a smoothly functioning modern state 45 years ago.  Free market principles that work for efficient production of refrigerators or cars don't work for Medical care.  But Republicans were so dead set against any plan of "socialized medicine" Obama perceived the only way he could get some sort of Universal Health coverage enacted was to use a "Republican" model (Mitt Romney's Massachusetts plan) and cut deals with lobbyist for people making piles of money off the old system at every turn to get enough votes to get the law passed.

Obamacare is successful in one huge respect.  Voters now recognize the value of universal medical coverage.  Most Republicans no longer dare talk about repealing Obamacare but Republicans have been pretty successful at spinning reality to convince voters the bureaucratic snafu's associated with Obamacare are all Obama's fault.  That their strategy may put them back in control of both houses of Congress is historically nonsensical.  It's like giving a kid an ice cream cone for blaming his brother trying to clean up a broken window, forgetting it was he that threw the rock that broke it.  

But it does say something about who ultimately is responsible for stupid acts by Congress.  If voters really want to know who's screwing up the government many will see the culprit in their bathroom mirror.  

Postscript - One reader felt the last sentence did not connect with the rest of the article.  The point I was trying to make (unsuccessfully perhaps) was that in the end if Government is screwing things up, the solution will usually only be found when enough voters examine their preconceived notions about issues, immunize themselves from emotional name calling and exaggeration, and figure out for themselves the nature of reality. 

Thursday, October 9, 2014

The Welfare Conundrum

If any kind of government handout is truly free it undermines productive activity.  The social safety net becomes a hammock people many people will rely upon for a life without responsibility.

Those who live in this situation for long periods of time sometimes become convinced they are victims in life, that nothing is their responsibility, that the world is conspiring against them.

On the other hand our free market is not very good at finding productive activity for all members of society.  It leaves many young people without opportunity, and often discards older people.  

Republicans and Democrats both tend to dismiss the complexity of the problem. Republicans are hostile to government assistance to folks who have little, suspicious that everyone without a means of support has only themselves to blame.  Democrats refuse to acknowledge that some of those without means of support are in that position because of concious decisions not to be bothered with the restraints on their fun activites that are sometimes required to successfully support yourself. 

To me the answer is pretty obvious.  We need a government run assistance system that doesn't just hand out money, it requires payment for the benefits in the currency most people without means of support have in abundance - time.

The time requirements could involve public service, volunteering for non-profits, advancing educational achievement.

There would still be folks who tried to work the system, so a structured system that progressively requires more time and committment the longer the person receives public benefits would provide incentive for people to get away from the public trough and into self sufficiency so they will have more control over their life.

Wednesday, July 30, 2014

Republicans - The Party of Ideas

In early July (2014) the New York Times Sunday Magazine had a long feature article about all the new think tanks full of Republicans developing new substantive ideas.  The Republican's have evidently woken up to the fact just saying no to Democratic ideas isn't enough for voters, outside the reddest of red states.

After reviewing the ideas discussed in the article it is apparant the Republican notion of new ideas is to take problems the Democrats have been harping about for years and find "Republican" solutions.


Conservative Republicans have the same deeply flawed approach to addressing policy problem that left wing Democrats have.  Both ends of the political spectrum start with an narrow view of reality then build their policy ideas based on the their false notion that their view of the world reflects the totality of reality.  For Republicans its "business good, government bad."  For the left wing its "business bad, government good."

The left wing of the Democratic party has had a hard time being taken seriously the last few decades but the right wing of the Republican party is still a force in American politics.

However Republicans have a lot of history to overcome before I will spend my time seriously considering their new ideas.  

Back around the end of World War I Republican's used support for Prohibition, coupled with "fresh" ideas about cutting taxes and regulations and enacting business friendly laws to sell voters on trusting them and grab and control Congress, which they held from 1919 to 1933.  We went through a business boom where the stock market went wild, the housing market went wild, the rich got richer and the rest got poorer, then the 1929 Stock market crash ushered in the Great Depression.  But the time the Republicans lost control of government in 1933 the country was on its knees.

Voters remembered that, so Republican's were a minority party for the next 40 years, but as those voters died off the Republican parties influence began to rise again.  By the 1980's the conventional wisdom (still unquestioned today) was that the Republican party was again "the party of ideas". In the mid-1990's they used their glossy list of nice sounding new ideas to gain control of Congress and over the next decade or so enacted many of the same ideas they sold the country on back in 1919 (dragging along Democratic politicians who knew which way the wind was blowing).  Again we had a steady diet of tax cuts, business friendly laws, and cuts in government's ability to regulate economic activity.  Securities markets took off, the price of housing took off.  A quote from a 1980's movie that "greed is good" went from ironic in the movie to a hallowed truth in Congress. 

As voters finally ushered the Republican Congressional majority out the door in 2007 we were sliding into the biggest financial collapse since the the Great Depression, the greatest concentration of wealth in the hands of a few since the Great Depression, the housing market had become a casino for speculation, and unemployment had risen to levels not seen for decades.

History suggests Republican's are much better at marketing ideas than actually coming up with workable ones.

I just don't want to waste time on ideas from either end of the poltical spectrum that grow out of simplistic views of the world rooted in an emotional commitment to a particular ideology.

Monday, July 21, 2014

Why We Are So Clueless About Alzhiemer's

My mother has Alzhiemer's.  As I and my sibling's struggle to find some way for her to live out her life as comfortably as possible and die as peacefully as possible, it has become apparent to me the medical profession is pretty clueless about why Alzhiemer's progresses differently in each person, and that the drug companies solutions, as to any particular person, are unguided missles, as likely to cause harm as good.

In the middle of this ongoing struggle I ran across an article in Science News (August 24, 2013, p. 15) that rekindled frustrations that I have felt for decades.   The article discussed a July 25 article in "Current Biology" reporting on recent research that found that people do not sleep as well on nights when the moon is a full, even if they are in a windowless room where they have no idea it is a full moon.   Other sleep researchers reported being surprised by the findings, although they have praised the study as well conceived and executed.   What struck me as particularly significant was the leader of the research team reported he was at first reluctant to publish the study because "If you publish lunar stuff, your going to be put in the "lunatic' corner and not be considered a serious sleep researcher anymore."

It is disheartening that the sleep research scientists found the studies results surprising.  There is so much data from other disciplines that has existed for decades - data about more crime during a full moon, more conceptions during a full moon, the stock market falling during a full moon.  How can any field of scientific enterprise still be surprised in 2013 that the full moon influences behavior?

The answer, sadly, can be found in the researchers comment about being afraid of being put in the "lunatic" corner.  In our western culture Astrology has been viewed as heresy - incompatible and competing with religion - for centuries because it challenged the ability of church leaders to use the Bible to claim they were the final source of knowledge on everything.  The bias is so ingrained that any idea that could be interpreted as suggesting that what is happening with the moon, sun or planets might have predictive value for human behavior was career suicide for a scientist.

The hard sciences, physics, astronomy, chemistry, have managed to largely put the bias behind them. Even large parts of biology are no longer encumbered by this bias.  But those areas of science that most directly affect human behavior, medicine and the social sciences, are still wearing blinders.   

Science has known for 100+ years that many of the chemicals in our body are not constant, the ratio's of different chemical's rise and fall predictibly over the course of a day, a lunar month or a year.  Over the years research findings have documented that the time of the day, or the time of year a person is born can predict things like when a women begins menopause, or who is a good driver or a bad driver.  

Yet little or no research funding goes to look at how those predictable fluctuations in our body chemistry affect us.  As a result we as a culture still have no real idea how to develop truly personalized medicine.  It is pretty apparent to all of us we are all different.  Yet medicine, psychiatry, and the drug industry, still treat us all as identical chemical clones.  

Think of the feel good commercials on which drug companies spend billions to fill our airwaves.  Each one is followed by some person talking as fast as they possibly can about all the possible bad things that can happen from taking the drug.  Yet neither the drug companies nor the medical profession generally have a clue why some drugs help some people and harm others.  More disheartening, they don't seem particularly interested in finding out.

Someday we will put aside the prejudice against investigating how those predictible changes in our body chemistry make us different from those whose chemical processes started at a different stage in the fluctuating chemical reaction.  Until then we have to learn to live with the fact science has been most impaired by ancient prejudices in those areas that have the most direct impact on our ability to understand in what ways we are all slightly different chemical beings. 


For related discussions:
http://motrvoter.blogspot.com/2012/05/big-surprise-genetics-is-of-little-use.html
http://motrvoter.blogspot.com/2011/09/nature-v-nurture.html

http://motrvoter.blogspot.com/2013/04/obamas-mapping-brain-project.html
http://motrvoter.blogspot.com/2013/04/what-western-medicine-is-good-at-and.html

Monday, July 7, 2014

The Tiresome Argument about Mlinimum Wage Laws

During the half century of my life that I have been old enough to pay attention to the news there has been nothing in politics more predictable than periodic fights about increasing the minimum wage.

It will start with Democrats pointing to poverty statistics and saying the minimum wage is so low it allows business to exploit workers.  Republicans will respond that increasing the minimum wage will force lots of business closures and hurt the economy.  Democrats respond that putting more money in consumers pockets will give the economy a boost.

The body of research by economists over the years tends to favor the Democratic argument somewhat based on what has actually happened but that might partly be a function of the fact the Democrats demands were always moderated by Republican opposition.  If the Democrats always got what they wanted we might well have ended up with a more stagnant economy.

So they are both right and they are both wrong.  Big box retailers, fast food chains and other big businesses that rely on very low wages to generate big profits are exploiting workers to some extent, and, equally important, are undermining consumer buying power, and thereby our economy, by using very low wages to pump up their profitability.    

On the other hand the small businesses or start-ups that are the backbone of our economy may not be making enough profit to pay more than minimum wage - in individual cases they may indeed go out of business, or decide to not start a business, if the minimum wage goes up.

From my position outside the argument it seems like a simple long term solution would be to link the minimum wage a business can pay to the profitability of the business.   

Thus a new business that isn't making any money could pay people a lower wage, but as the business grows in profitability, the minimum wage the business pays workers would rise.  

That approach would probably hurt Wall-Street a little bit, big businesses that rely on cheap labor would be less profitable.  But the added money in the pockets of people who actually spend all their money instead using the excess cash to swap assets back and forth with other well off folk would be a big boost to our economy.  It would increase demand that business could satisfy, and alleviate the asset bubbles that have plagued us the last couple decades.

Tuesday, June 17, 2014

Falling business start up rate

Research by a fellow at the Harvard Business School finds that beginning in 1978 the rate of business start ups has consistently fallen, other than a brief rise in 1983-88 and 2003 to 2008.  In 1978 business start up rates stood at about 15%, by 2011 the start up rate was about 8%.  Since 2008 the start up rate has been below the business failure rate - more businesses have died than have been started.

A fellow at the Harvard Business School suggests the cause may in part be the rise of big box and on line retailers that have killed local retailing.

What does it mean for our future that our business diversity is shrinking?  That more and more of our life is controlled by fewer and fewer Corporate CEO's?  Is this related to the increasing gap between most of us the the very wealthy?   Is this related to the overarching monetary muscle that now controls our politics?

Economist May 10, 2014, page 27 - Citing research by the Brookings Institute

Wednesday, June 11, 2014

Things that could make one a Republican

I had an employee who left my employ some time ago.  She got pregnant and, according to my other employee's, announced around the office for some period of time she was going to take the pregnancy as an opportunity to not work for awhile.  (We are a tiny business so exempt from the family leave act - she had no right to family leave).

At some point as her due date got closer (paraphrasing her sworn testimony) she started investigating all the ways she could get money from the government.  At one point before she left her supervisor reported to me she was soliciting another employee to pretend they were me so they could lie for her so she could qualify for some state benefit for expectant mothers that she was not in fact qualified for.  The supervisor and other employee reported to me that when they refused to help her commit fraud, she got irritated and said she would get a google voice account, give the agency that number and when they called to verify the facts she needed to qualify for the benefit she would pretend to be me herself.

As she got closer to her due date she stopped talking about what she was going to do after the baby was born.  Her supervisor repeatedly asked her if she planned on coming back to work, she would never answer, telling the supervisor "I will let you know."

Then a couple weeks before the baby was due she reported her doctor has said she had some problems with her pregnancy, so she was going out on disability leave.  We never heard a word from her about her job after she left until over a year later we got a notice she had filed for unemployment and listed us as her last employer.  She never contacted us to say she was ready or wanted to come back, the only contact with her was when she showed up one day at the office to show the new baby to other employees (I did not work out of that office)

Since both her immediate supervisor and I believed, and still believe, she never intended to come back to work, I appealed the decision, since I understand the law to be one is not entitled to unemployment benefits when you voluntarily leave the work force.  Her benefits are charged against my business reserve account - not a huge deal, but I believe in unemployment insurance as a protection against events beyond your control, and it irritated me to have someone - evidently - using it to fund a vacation from work.  The fact that we had to go through the trouble of sending a part of her paycheck every month to the government under a garnishment order almost the entire time she worked for us, because she been doing her best to avoid paying her student loans, didn't help her credibility with us.

While awaiting the appeal hearing I got to wondering about the other state benefits my employees said she tried to get them to help her fraudulently procure so called the agency.   I went through the usual lengthy period of going from one phone menu to another, finally got someone on the phone who then referred me to the "program integrity" unit (or some such politically correct name for fraud).  At the "program integrity" unit I got voice mail instead of a person.  I left a brief message along with my contact information and that I had information about possible fraud.  Never heard a word back.  Evidently they are to busy giving out money to worry about possible fraud.

In the end the administrative law judge decided in her favor.  She (the employee) did have complications from her pregnancy, so it sounds like her disability benefits were legitimate - she did leave work earlier than she had planned.  But in the end her testimony made it apparent she had made a deliberate effort in her last months at work, even though she had no intention of coming back to work, to avoid saying she would not come back, despite regularly being asked.  After she left she never contacted us about coming back to work then filed for unemployment a year later.  

The administrative law judge's decision made it sound like we had talked about whether she would come back but no decision had been made.  It was pretty clear to me his findings were aimed more at justifying awarding unemployment.  My testimony, which she did not dispute, was that we asked regularly about her intentions, she refused to answer, and she never contacted us after we left prior to filing the unemployment claim a year later.  I suspect she had learned that by not saying anything she could claim unemployment, and it seems pretty clear if you are the employee you have to do something pretty stupid or pretty outrageous to not get unemployment.

I could have filed an appeal with a real court, but it's not worth my time.  I was probably tilting at windmills to pursue it as far as I did.  But the integrity of the unemployment insurance program is important to me and this just seems wrong.  

This women worked for me for three years.  She was very bright, but was never a particularly good employee.  I learned things when I started making inquiries that made me realize she seems to have found the challenge of manipulating to minimize the amount of work she did much more interesting than her job.  If she spent as much time and energy on doing her job as she spent on figuring out how to be a freeloader she could be very successful (and could make a lot more than I was paying her).  

It aggravates me people like her provide so much ammunition for those who dislike the idea of safety nets.