Saturday, May 4, 2013

Peak OIl or No, The Answer is Back to the Future


I have been a firm believer in the peak oil theory.  A recent article in the Atlantic, however, “What If We Never Run Out of Oil?” provided updated facts and changed my perspective.  If one believes in peak oil, then one believes in an oncoming economic disaster since the world’s economy is based on oil.  But the proponents of peak oil provide no answer to that scenario.  If one believes that there is no end to obtainable oil reserves, and we keep on living as we have been, perhaps even more so, then the disaster comes from climate change which will also reek economic disaster.  And we have no answer for that either.

In addressing these issues, people either seem focused on how to keep living as we have been, or they throw up their hands in despair.  Even climate change proponents don’t argue for a radical change in lifestyle but base their proposals on the smarter use of fossils fuels together with alternative energy sources because of the economic implications of doing otherwise.  No one is really moving us closer to an answer to the riddle.

This is one of those moments that screams for thinking outside the box.  Whether peak oil  is or comes to be, or whether we have an endless supply of it, the bottom line is the same ... we must find a way to wean the world off of oil so that we avoid economic and social disaster, whether it comes from the lack of oil or climate change.

The answer I propose is in one sense surprisingly simple.  We go back to the future.  We for the most part go back to a system and structure that is not dependent on oil or other fossil fuels.  We don’t have to make up a new world, we just have to look back at the world we came from to see how it would work.  

That at least is the basic rule, though in some areas of life the use of fossil fuels will continue to be necessary.  Why?  Because our population has grown so much and is more concentrated in cities.  Because, for example, the cold-water flats of the past are no longer acceptable in a modern-day scenario and heating with wood is not a viable option.

There are various ways to look at the implications of what I am proposing.

Replacing oil as an energy source.  As the industrial revolution advanced, one of the main changes was the replacement of human labor by machines.  And that has increased exponentially in the digital and robotic age of manufacturing.  Modern methods of manufacturing and farming are highly energy intensive.  We will have to go back to a form of operation that is more labor intensive.  That will have the double advantage of not only freeing us from oil, but once again finding appropriate employment for masses of workers in industry and farming, thus ending the unemployment problem.  To the extent that an energy source is needed, it will have to come from cleaner sources.

This will without question make products more expensive, which will mean a drop in the standard of living for many, but that will be offset by the increased standard of living of all the millions of people who now once again have gainful employment.  We have been living too long with the illusion of cheap goods fostered by the exploitation of the poor in far away lands and the availability of cheap transport made possible by cheap oil.

Where goods are manufactured.  In a back to the future world, the modern global economy will cease to be.  Instead, the economy will be as it was before ... primarily national, and in many cases regional or local.  While again this means an increase in the cost of many items, and a corresponding lowering of the standard of living many are used to, it will mean the repatriation of millions of jobs which will, together with the increased employment of human labor noted above, result in far less income inequality than has existed in recent times as well as an increased standard of living for many.  Plus whole towns and cities will be reborn.

The products we use.  Almost everything we use today is derived at least partially from oil.  That will end.  Instead, we will go back to natural products ... whether it’s glass bottles, or cotton shirts, or wood siding for homes, and of course all food products.  Again, this will mean an increase in cost but it will have the benefit of reviving rural economies, both nationally and world-wide, that have been devastated by the modern industrial economy. 

There is at least one area, though, where limited use of oil will be required, and that is in the production of modern pharmaceuticals.  Unless a way can be found to produce them without the organic compounds that come from oil, that will remain a necessary ingredient.

Transportation.  While we won’t have to go back to the horse and buggy, major changes will be necessary.  First, all cars will have to be electric, and the electric generating plants that produce the electricity to charge them must be operated on natural gas, hydro-electric, nuclear, or alternative energy, otherwise there is no energy saving.  All public transportation must be electric or alternate energy, and there must be more public transport.  The nation’s regional train system needs to be revitalized with efficient, modern high-speed trains.  Air travel would be limited to national (i.e. not regional) and international travel.

While all of this will involve a massive restructuring, given the entrepreneurial prowess of American business, there is no question in my mind that all of this can be accomplished.  If we start planning now rather than waiting for disaster to strike, our economy and people will prosper as perhaps never before and with greater equality.  

But American business and politics has operated for a long time on a short-term planning basis.  The question is whether our corporate and political leaders can face the facts and engage in the type of long-range planning that this massive restructuring of our system and lives will require.

Saturday, April 27, 2013

A Grace to Change the World


Saying grace before or after meals is something that is routinely done by millions if not billions of people all over the world.  Regardless of the religion, saying grace is part of one’s religious practice.

What is grace?  From every grace that I had ever heard, whether it was in movies, in people’s homes, or in the company of my family, grace was about thanking God for his bounty.  Praising God.  Sometimes additional thoughts would be added asking for God’s grace with regards to something ... like a child’s taking an important exam, or an upcoming marriage or operation, etc.

Then one day I went to a Vietnamese Buddhist temple in rural Michigan.  (I was born and raised Jewish, but I had become interested in Buddhism.)  After meditation and conversation about the Buddha’s teachings, we sat down to lunch.  Before we began, the two nuns who ran the temple rang a bell for silence and one of the temple members said the following grace:

This food is the gift of the whole universe -- the earth, the  sky, and much hard work.
May we live in a way that makes us worthy to receive it.
May we transform our unskillful states of mind.
May we take only foods that nourish us and prevent illness.
We accept this food so that we may realize the path of practice.

The first four mouthfuls
With the first taste, I promise to offer joy.
With the second taste, I promise to help relieve the suffering of others.
With the third taste, I promise to see others’ joy as my own.
With the fourth taste, I promise to learn the way of non-attachment and equanimity.

Eighteen years later, I still carry these words with me every day in my wallet, and recite this grace every morning before eating breakfast and starting my day.  Why?

The words of this grace are not so much about thanks, although that element is there.  It is about how we as human beings should live our lives so as to be worthy of the gift of life  and food that has been bestowed upon us.  If everyone, regardless of their religion, spoke and took to heart the words of this nondenominational grace, the world would be on its way to solving all the intractable problems that we face.

This food is the gift of the whole universe -- the earth, the sky, and much hard work.”  This reminds us not to take the food that we eat for granted.  It is the result of much hard work, whether it be peasants in some faraway land or a worker in a food processing plant where we live.  People labored, and if we eat meat animals died, so that we may live.

May we live in a way that makes us worthy to receive it.”  Having food to eat is not some absolute or unconditional right we have.  With food, as with life, come responsibilities ... to ourselves and to others.  We may have the power to nourish or destroy, whether it’s ourselves, those close to us, or strangers.  But it is our responsibility as human beings to nourish ourselves, our fellow human beings and all sentient creatures, as well as the environment, not to destroy.  All religions have at their core morality the saying, “Do unto others as you would have them do unto you.”  That is our highest moral responsibility.

May we transform our unskillful states of mind.”  What are these states of mind?  They are greed, lust, envy, anger, pride.  These cravings destroy our ability to exercise good judgment and do what is right for us, our loved ones, and for others.  And despite our tendency to almost revel in these states of mind, they cause us nothing but suffering for they always ultimately result in frustration.  Because when we feed these states of mind, our mind just wants more.  There is good reason why these emotions form the core of the Seven Deadly Sins of Christianity, as well as being admonished in other religions.  

May we take only foods that nourish us and prevent illness.”  There are two aspects to this thought.  One is that to eat foods that do not nourish us or prevent illness is not good for our body ... witness the epidemic of obesity in this country.  It is not so much a question of eating too much, but of what we eat.  Although gluttony (another one of the Seven Deadly Sins) is also not good for our health.  Second, food is a precious commodity; it is limited.  There are many people in this world who go hungry, even in the United States.  The problem is not that there isn’t enough food; it’s that there isn’t an equitable distribution of it because obtaining food is a function of having money.  If we all just ate what was necessary to nourish us and prevent illness, there would be plenty of food to go around; just look at all the food Americans waste.

We accept this food so that we may realize the path of practice.”  The word, “practice,” here refers to Buddhist practice, but it applies equally to the practice of any religion.  Again, with life and food come responsibilities.  And what are they?

With the first taste, I promise to offer joy.”  Just as we want other people to offer us joy, we should offer others joy.  And if we aren’t offered it, that makes no difference.  The point is to do other others as you would have them do under you.  And this is not just to be a goody-two-shoes.  As in all aspects of the teachings of this grace, what we do is not just to benefit others but to benefit ourselves as well.   When we offer others joy ... for the pure reason of wanting to offer joy, not for an expectation of receiving anything in return (and that’s a major catch for many people), we experience joy just in the giving.  Regardless where you are, if you interact with people in a friendly, joyful way, you will experience joy yourself, regardless of their reaction.  Likewise if you go through life interacting with others in a perfunctory fashion, you will experience no joy.

With the second taste, I promise to help relieve the suffering of others.”  There is so much suffering in the world ... and I don’t just mean the obvious suffering of malnutrition or illness or extreme poverty, but the daily suffering of people caused by their insecurities and the neuroses that stem from that feeling.  One of our main responsibilities as human beings is to help others, and in so doing we bring joy into our lives.  Not because we feel sanctimonious and superior because of our good deeds, but for the pure pleasure of trying to help another suffering person.  Whether it be random acts of kindness or donations to charity or hands-on volunteer work, you will experience joy when you help relieve the suffering of others.

With the third taste, I promise to see others’ joy as my own.”  In our culture, we are so ego obsessed, that the common reaction to much of this teaching is, “What about me!”  If our focus in life is in finding ways to make ourselves happy, we will not find happiness because wanting something that we don’t have just leads to frustration.  One may achieve what one wants initially, but then one always wants more.  The fact is that if we stop being so ego obsessed, if we see our oneness with others, and see others’ joy as our own, we are much more likely to experience joy and happiness.  That being said, I must advise that if one truly sees others’ joy as your own, you will also see their pain as your own.  The two go hand in hand.  But that’s an essential part of what being human and understanding your oneness with others is about ... whether you think of it as we’re all in this boat together or we are all children of the same God.

With the fourth taste, I promise to learn the way of non-attachment and equanimity.”  This is the real kicker, the real challenge, for most of us.  We can do all sorts of things that are on the surface good or worthwhile, but if we attach to them (obsess about them) or if we do these things because we are unhappy or dissatisfied with our life as it is, if we feel insecure, while we may still be productive and help others, we will be frustrated and unhappy.  We will feel anger, greed, envy, and lust regarding the things that we or others do.  We will suffer and we will make all those close to us suffer.

People sometimes react to the teachings of the Buddha with, “Why should I always be thinking of others; what about me!”  What people often fail to understand, and their teachers don’t make the point clearly, is that the Buddha developed his teaching as a way to end suffering, starting with the individual.  The Buddha understood that to free the world of suffering, one must start with the individual who causes suffering in himself and others.  The teaching thus is all about how to free ourselves from our suffering, which is mainly caused by our learned experience, our past.  A significant part of that process is learning to find joy in giving joy to others, helping others, and seeing others’ joy as your own. This is one way we free ourselves from our ego.

If everyone acted according to the words of this grace, there would in time be no more suffering in the world.  Everyone would feel secure and loved.  No one would try to gain control over others, to exploit others, to oppress others, to take advantage of others.  The world’s wealth and resources would be distributed more equitably.  It would be a very different world indeed.

Monday, April 22, 2013

Our Political System Has Failed Us


The health of our democracy depends on three components, among others.  The first is an informed electorate which has the responsibility of electing those who will both represent  it and help lead the country.  The second is leaders who both represent their constituencies and act for the greater good of the country.  The third is an electorate and leaders that respect that all are working in the best interest of the country and accept the inevitable loss, whether of a legislative bill or an election, that is part of the democratic process.

On the first point, we have always been weak.  From the very beginning of our country, the electorate base was not well-informed about the issues, in the sense of being able to think rationally about the choices.  Not that they weren’t or aren’t capable of it.  But politicians (even the august Thomas Jefferson, through surrogates of course) have often played more to the electorate’s emotions than its mind and have often used inflammatory words, making reckless, deceitful charges, in order to rouse the populace in their favor and against others.

As to the second point, while American politics, especially elections, have always involved a good amount of mud-slinging, historically politicians on the national level once elected have generally speaking comported themselves appropriately and have, while representing their constituents, acted in what they saw as the national interest.  Except on the issue of racism (or in the pre-Civil War years, slavery), ideology was not a controlling factor in actions of Congress.  

And although there has always been a strong element of conflict between the powerful central government forces v the small/weak central government forces (the parties names have changed over the years), those arguments were, once the Constitution was in place, more on peripheral issues.  Even a staunch small central government advocate such as Jefferson, presided over a huge increase in the responsibility of the federal government.  Similarly George W. Bush presided over a huge increase in the federal deficit as a result of his policies.

But the art of compromise in Congress had been weakening and the nastiness of interchange increasing since the election of Bill Clinton in 1992.  Since the election of Barack Obama and the 2010 midterms, the functioning of Congress has basically come to a halt.  

The Republican Right has taken control of the party and the Republican Congressional agenda.  With their extreme ideological rigidity, the Republican majority in the House and the Republican minority in the Senate (which can stop any legislation or appointment through the filibuster, even when a majority of the Senate is in favor) have been able to halt any legislation that addresses the national interest from other than their narrow perspective. 

The most egregious example of this was in the recent debate on expanding background checks for gun purchases.  90% of Americans surveyed, and 85% of NRA members, supported expanded background checks.  A bi-partisan compromise measure was introduced lead by arch gun rights advocates, one Republican, one Democrat.  And still the measure was defeated through the filibuster process by Republicans joined by a few Democrats.  

That this measure, which would not have kept a single gun of any type out of the hands of anyone who was legally entitled to own one and thus, as the Republican co-sponsor said, was really not a gun control measure, was defeated despite overwhelming popular support and desperate need shows the total failure of our system.  It also shows clearly another aspect of the system’s failure ... the preponderant influence of corporate America.  The only powerful interests against the Senate measure were firearm manufacturers and their de facto voice, the NRA.

Corporations have for more than a century had a strong voice in Congress through their lobbyists and political donations.  And this has impacted both parties.  Both are in thrall to and support the power of the big corporations, although the Republicans more so than the Democrats because they have been the greater beneficiary of corporate dollars.  

The old saying, "What's good for General Motors is good for the country," was discredited years ago, and yet that still is often the marching tune for both Republicans and Democrats in Congress.  What happened to the concept that, while being supportive of a strong and healthy business sector, an important role of government, and therefore Congress, is to protect the general public from the excesses of corporate activity and power? 

This can especially be seen in the federal response to the recent financial crisis ... nothing has really changed; the same financial practices that led to the collapse are ongoing; regulation has not really improved; no one in the big investment firms has been brought to justice for their shady practices; it's business as usual on Wall Street.  It can also sadly be seen in the team that President Obama put together after his inauguration to advise him on such matters ... all seasoned Wall Street types who were prime actors in the period leading up to the collapse.  

But since the Supreme Court’s 2010 ruling that corporations can spend unlimited sums supporting someone’s candidacy through PACs, the power of corporations not just over the actions of Congressmen, but on who gets elected, has been increased manyfold.  Through huge purchases of advertising air time to support candidates favorable to them, they have been able or tried to influence the electorate and change the outcome of close elections.  If ever there was an argument for Federally-financed elections, this is it.

The third point, which has always been the most solid aspect of our democracy, is under threat.  The basic premise, that each side respects the other’s bone fides in working for the national interest, has been gravely weakened if not destroyed.  Neither side trusts the other nor will it give the other credit for acting in the national interest.  Instead, each side accuses the other of special interest politics and being a threat to the nation’s well-being.  

There have even been some who have voiced the possibility of violence if their position does not win the day.  And there has been a substantial rise in the number of right-wing militias around the country since the election of Barack Obama.  While there is no danger of the constitutional transfer of power being interrupted, there is certainly a danger that the peacefulness of that transfer or the peacefulness of legislative losses may become a thing of the past.

This situation cannot continue unabated without seriously damaging our democratic system.  Several actions are necessary.  At a minimum, all federal elections should be publicly financed.  That would have the benefit of putting all candidates on an equal footing ... winning an election should not depend on how much money you can raise ... and would greatly decrease the prevalence of advertising, which is almost never informative.  Second, all broadcasters, who use federally-licensed air waves, should be required to provide a certain amount of free advertising and speaking time to all candidates.  This should help increase the exchange of ideas rather than sound bites.  Third, no other organizations should be allowed to take out advertising to influence elections or pressure their employees to vote a certain way; contrary to the recent Supreme Court opinion, corporations are not people ... they don’t have a vote and likewise they shouldn’t have a voice.  Fourth, religious organizations who are granted tax-exempt non-profit status should be held to the regulations regarding that status, which prohibit supporting candidates for political office.  Finally, there should be a truth in campaigning measure passed which disciplines candidates who not just stretch the truth but lie and sets up a nonpartisan group to monitor all campaign statements and literature,

The factor of money must be removed from elections and politics.  And the electorate must be communicated with in a way that engages their mind on competing ideas rather than on competing emotions.

Thursday, April 18, 2013

American Exceptionalism - A Myth Exposed


American political leaders and average Americans too take great pride in trumpeting the United States as the greatest country in the world.  We are the strongest, the richest; we have the best medical system; we have the best educational system; and the list goes on and on.

But are we the greatest country?  While it is incontrovertible that we are the strongest country in the world militarily, and that we are the richest country in the world in terms of the size of our economy, when it comes to the health and welfare of the American people we are far from the greatest, as the data below will show.  And I believe it is in the ability of all Americans to pursue the American promise of “equality” and “life, liberty, and the pursuit of happiness” that our greatness is best measured.

You might ask, “Why bother exposing this myth?”  Because we have many problems in this country which seem to be intractable, largely because people ... both most leaders and the average American ... refuse to acknowledge the facts, let alone view them as presenting a serious problem that must be addressed.  Most people are so caught up in how great we are and how good life in this country is that we have come to believe the illusion and cannot see the gritty reality which is quite different.  

Only when our leaders and the public are able to see and admit these significant problems that limit our greatness will the political will exist to do what is necessary to fix them.  And they can be fixed.  We have the riches and the knowledge to do all that needs to be done.

In the data below, the United States is compared with the rest of the developed world, and at times the entire world.  The areas I will examine ... health, education, income inequality, violence/security, social mobility, and equal opportunity ... are essential to the ability of our country to live up to the promises made in the Declaration of Independence and truly be the great nation we aspire to.

Health:  Despite having by far the most costly health system in the world, the United States consistently underperforms on most measures of the quality of health care.  Looking at quality of care, access to care, efficiency, equity, and living healthy lives, the US ranks last or next-to-last when compared with Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom.  Most troubling is the failure of the US in the area of health outcomes ... people leading healthy lives.

The summary table below says it all:

                                       AUS     CAN      GER     NETH       NZ    UK       US
Overall Ranking (2010)         3          6             4             1            5       2          7
Quality of Care                     4           7            5             2             1      3           6
Access                                 6.5        5            3             1             4      2         6.5
Efficiency                             2           6            5             3             4      1           7
Equity                                  4           5            3             1             6      2           7
Long, Healthy Lives               1           2            3             4             5      6           7
Health Exp/Capita (2007)   $3357   $3895   $3588  $3837   $2454  $2992  $7290

This data, which comes from a report by The Commonwealth Fund, is consistent with the findings of other reports and surveys.  For example, a recent report sponsored by the National Research Council and the Institute of Medicine compared the US with 17 other developed countries, and the US came in last.  The report shows a “strikingly consistent and pervasive” pattern of poorer health at all stages of life, from infancy to old age.  Further, the report shows that even white, well-off Americans live sicker and die sooner than similarly situated people elsewhere. 

Education: The US fares somewhat better in education comparisons, in that it was not dead last.  This is the one area regarding which the media will occasionally ring the alarm bell that “we are falling behind.”  In data comparing the G-8 countries, American 15-years old come in 3rd in Reading, 6th in Math, and 5th in Science.  In looking at high school graduation rates, the US and Canada tie for the lowest rate, 76%.  The other 6 G-8 countries range from 85% (Italy) to 97% (Germany).   This is a huge failure of our system.

Income Inequality: In a report on income inequality in 17 developed countries based on various studies, the United States had the greatest income inequality.  The top 1% of income earners accounted for 17.4% of US income while at the other end, in the Netherlands, the top 1% accounted for only 5.4% of income.  In looking at World Bank figures for the entire world, with the exception of China and Hong Kong, only undeveloped or developing countries, mostly in Africa and Central and South America, had greater income inequality than the US.

And income inequality is been increasing steadily in the US over the past 50 years.  For example, in 1949, the top 1% accounted for 11% of income, similar to or less than many developed countries at that time.  But for 10 of the 17 countries, income inequality has actually decreased in the past 50 years while those that have increased have experienced a much lower percentage increase than the US.

In looking at total net worth, the top 1% in the US accounted for 34% of net worth, the top 10% accounted for 70%, while the bottom 80% accounted for only 15%.  According to a UN report on the distribution of household wealth worldwide, only 4 countries in the world had greater inequality in household wealth than the US!

Violence/Security: In 2003, there were 30,000 fire-arm related deaths in the US  (homicides and suicides).  According to an American Bar Association report, the rate of death from firearms in the US is eight times higher than in other industrialized countries.  According to the U.S. Centers for Disease Control,  the fire-arm related death rate among US children younger than 15 is nearly 12 times higher than among children in 25 other industrialized countries combined.  The US has the highest rate of youth homicides and suicides among the 26 wealthiest nations.  

In a UN report comparing the intentional homicide rate (i.e. excluding suicide) worldwide, the US at 4.8 per 100,000 people was the highest for a developed country.  The next highest was 2.2 for Finland.  Germany, Italy, and France were 0.8, 0.9, and 1.1 respectively.  The United Kingdom was 1.2.

It would seem that our vaunted right to purchase firearms of all sorts has helped to create a more violent, less secure environment for Americans, rather than a less violent, more secure one as argued by gun proponents.  Interestingly, in a recent article regarding the Texas District Attorney and his wife who were murdered in their home, it was reported that he had 60-72 guns of all types planted all over the house and that both he and his wife were expert at using them.  But apparently all those guns were to no avail.

Social Mobility:  America has always prided itself as being the land of opportunity.  Over the years, especially the late 1800s and early 1900s, tens of millions of immigrants came to the US because of the American dream.  And indeed, while data for that period is not available, certainly anecdotal stories of the upward mobility of immigrants abound.  Surveys show that Americans still think of their country as being a meritocracy; that is, if you have what it takes and you are hardworking, you will succeed.

But the data from two recent studies show that the image is far from true.  Yes, there is still social mobility, but the US is hardly the leader in this area.  In a study by the PEW Economic Mobility Project of 10 developed countries, the US had a lower generational income mobility than that of the other countries.  That means that a child’s income (as an adult) was more a function of his father’s income.  Likewise, in a study that compared 6 developed countries regarding the likelihood of children remaining in the same income quintile as their their father, 42% of American children in the poorest quintile remained in that quintile, a rate of poverty persistence far greater than the 30% in the United Kingdom and the 25-28% range found in the Scandinavian countries.  Likewise in looking at the percentage who moved from the lowest quintile to the highest quintile, the US rate was 7.9%, while the rate in the other 5 countries was 11 - 14%.

Equal Opportunity:  The United States has many laws guaranteeing equal opportunity, meaning freedom from discrimination.  But even if those laws worked perfectly and there was no more discrimination in this country, which of course is far from the case, there would still be a significant lack of equal opportunity because your parents’ income usually determines where you live and the quality of education that you receive, which in turn determines the range of your opportunity.  Given the high income inequality in the US, that means that true equal opportunity is really a phantom in our country.  

While this lack of equal opportunity is not just a function of unequal funding, legal and legislative efforts to alter this dynamic by changing the way in which schools are financed ... equally by the state rather than unequally by school districts ... have not gained traction anywhere because of the opposition of those who fare better under the current system.  While there is no comparative data on this specific issue with other countries, the data on social mobility reflect this reality.

In summary, the data show that the United States has the worst health system in the developed world, even if it is by far the most expensive.  It has a mediocre educational system compared with other developed countries.  It has the highest income inequality in the developed world and almost the highest wealth inequality in the entire world.  It has the highest rate by far of people dying from firearms in the developed world.  The social upward mobility of Americans from generation to generation is now significantly lower than that in other developed countries.  And equal opportunity is not available because lower income Americans receive an inferior education.

This data is cause for our political leaders and the public to stop and consider what has caused these problems to develop and what needs to be done to return America to the path of greatness.  It is not just a matter of throwing more money at a problem.  Each of these problems reflects structural defects in our system that must be corrected.  The American people are hurting.  Further, the combined impact of these problems will lead, if not addressed, to a steadily weaker America on the world stage.

Tuesday, April 9, 2013

How to Prevent the Next Financial Collapse


The newest scheme that the financial industry has devised to avoid transparency is something called a “deep pool.” Apparently these trading pools have popped up all over the place.  According to the New York Times, on some recent days as much as 40% of trades occurred in such pools, which are totally unregulated and secret.  This has given pause to many.  In Canada and Australia, rules have been passed to limit such off-exchange trading.  But the SEC has shown no inclination to do so.

There appears to be no end to the ingenuity of the industry to come up with products and devise trading mechanisms that will be to its advantage.  But as we have seen all too well, those products and mechanisms can pose grave risks to the economy and the welfare of millions of Americans.

Because the impact and size of the financial industry has grown exponentially from what it was decades ago, and because the risk of its actions are broad-based, the time has come for government to change the way in which the industry is regulated.  The current system pretty much gives the industry freedom to do as it wishes with some after-the-fact regulation.  Instead, the system should be changed to one where a new product or a new mechanism must be first approved by the government before it is put to use.

We do this for the pharmaceutical industry because of the damage that drugs can have on people.  It is done in other industries where environmental impact statements are required before a project can go forward.  The damage from the financial industry’s risky products and destabilizing mechanisms can be, as we have recently seen, even more toxic.  Yes, this would be a pain in the neck for the industry and pose a considerable restraint on its activities ... but that’s just the point.  Such restraint is needed.  And we have seen that it cannot effectively be applied after the fact.

The financial industry has proven that it cannot be trusted to regulate itself.  There are far too many people at positions both high and low who are not ethical and will do anything to make a buck, regardless of its potential risk to the nation’s economy.

In addition, Glass-Steagall must be re-enacted.  This law, which was passed in the 30s to separate commercial and investment banking activities, served us well for 60 years.  But the industry and the Republicans didn’t like it, and so it was repealed in the late 90s and unfortunately signed into law by President Clinton.  

It is the repeal of this law which allowed the monster firms ... those too big to fail ... like Goldman Sachs and JP Morgan Chase to develop and pose the risks that caused the 2008 financial near-collapse.  And those same risks continue to be posed today, as the various efforts to rein in the industry’s actions have been ineffectual at best.  Despite the rhetoric of the Obama administration, not much has changed in this area since pre-2008 days.

Our country is at grave risk.  Congress must act to protect the people from future financial catastrophe.

Monday, April 1, 2013

An Open Letter to Gun Owners


Let me start by saying that this is not about taking away your rights to hunt or defend your family.  This is not about in any way infringing on your legitimate rights to own guns and use them.  What this is solely about is trying to stop the epidemic of gun violence against innocent people that is plaguing our nation, causing untold grief to tens of thousands of families each year.

Gun violence is not limited to the mass shootings that get national attention.  While such events are horrific, a far greater problem exists impacting large numbers of innocent Americans.  In 2010, for example, guns took the lives of 31,076 Americans.  Roughly 20,000 of these were suicides; the rest were intentional homicides.  Only 5% were accidental shootings. In addition, 73,505 Americans were treated in hospital emergency departments for non-fatal gunshot wounds in 2010. 

Recently, I learned of a particularly moving example of gun violence.  A young man who was severely sight-disabled went outside with his guide dog to try and see a comet that was passing in the night sky.  While he was outside, a man leaving a neighboring unit after an argument with his girlfriend shot someone on the stairs.  Upon hearing the shot, the young man started to hurry back to his apartment.  Before he could get back inside, the distraught gunman shot him in the back and killed him.  He died on his kitchen floor, his guide dog howling beside him.

In the face of all of this unnecessary loss of innocent life and family grief,  how can you be against reasonable efforts aimed to lessen gun violence while not infringing on your legitimate right to own firearms for hunting and self-defense?  

Let’s look at the NRA’s arguments and your fears.  The NRA’s main arguments boil down to this:  No measure reducing access to guns is acceptable because any such measure is a first step by the government and gun opponents to ultimately removing guns from private possession.

This is patently nonsense.  There isn’t a politician alive, nor any but a small fringe of the gun control advocacy community, that wants to do anything more than control access to guns for the reasons I’ve stated without disturbing legitimate ownership and use for hunting and self-defense.

If this is the case, then why, you may ask, does the NRA, an organization you trust, take such a broad position?  The answer is that the NRA, which began as an organization of sportsmen, hunters, and gun collectors, has morphed into the prime spokesman and defender of the gun industry.  

Why?  More than half of the NRA’s funding now comes from the gun industry, rather than from the dues of its members.  And because the NRA can say that it speaks for gun owners ... a broad-based group of Americans ... it is the NRA who is front and center after each gun incident and in lobbying Congress, rather than the trade association of the gun industry.  And the gun industry is, not surprisingly, against any form of regulations that reduces sales and impacts their profits.

That is why the NRA is against a ban on assault-weapons.  These types of rifles and guns are not used by hunters or in self-defense.  But they are a major revenue source for the gun industry.

That is why the NRA is against a ban on magazines holding large numbers (100) of bullets.  Again, such magazines are not used by hunters or in self-defense.

That is why the NRA is against mandating background checks in all sales and improving the nature of the checks.  These would in no way hinder the purchase by hunters or your average home-owner, but it would dampen sales to criminals and mentally ill people who should not have guns, thereby decreasing sales and impacting profits.

That is why the NRA responded to the Newtown, CT massacre by saying that all schools should have armed guards.  This would require a huge increase in the sale of firearms to local government and thus benefit the industry’s profits.

Every position the NRA takes is in support of the gun industry, NOT in support of the sportsmen, hunters, and gun collectors who they claim to speak for.  But it is you, the NRA members, who have taken the public relations hit for being unreasonable on this subject, not the gun industry.

The time has come for gun owners to realize that they have been used and manipulated by the NRA and the gun industry for its own purposes.  You must speak clearly and loudly that you do not support the NRA’s positions and you are in favor of reasonable measures that reduce gun violence while protecting your legitimate right to own and use firearms for hunting, sport, and self-defense.

Gun violence can never be eliminated because, as the NRA is fond of saying, “people do kill people.”  People who legitimately own guns will on occasion end up using them in a way other than intended.  But the extent of violence can be greatly reduced through reasonable, effective laws.

Please support the modest gun control measures that are before Congress.  Call your Congressman today.

Sunday, March 17, 2013

The Rise and Fall of the American Republic


Over the past 30 years, we have been witnessing the slow demise of the American Republic.  I don’t mean that the United States will cease to exist, or that we will be conquered by some external power.  What I mean is that the principles on which this nation was founded and the philosophy that fostered the continued betterment of life for its citizens ... those things that made this country great and a beacon to the world ... have been and are now being weakened at an accelerating pace, to the detriment of our democratic principles and the common good.

The fundamental underpinning of the great American experiment is found in the Declaration of Independence.  It exists in two parts.  The first is the well-known phrase that “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”  The second equally essential part of the experiment is the statement “That to secure these Rights, governments are instituted among Men, deriving their just powers from the consent of the governed.”

These were radical, indeed revolutionary, concepts and they sparked not just the American revolution, but revolutions first in Europe, and ultimately throughout the world.  Even though America did not always live up to its founding credos, it was these credos and the strength and prosperity that flowed from them that made the United States the envy of the world.

When our nation was founded and for much of its history, it goes without saying that all men and women were not equal, under the law or otherwise.  Slavery existed as a legal enterprise until 1863 when the Emancipation Proclamation was signed by President Lincoln.  But as then Vice-President Lyndon Johnson stated in 1963, “Emancipation was a Proclamation but not a fact.”  It would take another 90 years till the Supreme Court finally declared that segregated education was unconstitutional and a further 10 years before Congress passed the Civil Rights Act of 1964 which provided a statutory basis for blacks being treated equally under the law.  

Women ... the wives of the founders and the mothers of their children ... were legally chattel at the time.  Women had no rights at all, and whatever property they had prior to marriage (as the result of inheritance or otherwise) became the property of their husbands.  Though the legal rights of women were expanded during the 19th century, it was not until 1920 that women were finally given the right to vote.

These are the two most prominently cited examples of historic inequality in this country.  The other obvious, though less spoken of historically, inequality is one of wealth.  There  have always been masses of poor among the few rich, and that is indeed a fact of life in every society, regardless the nature of its government.  But over the decades, and especially since the beginning of the 20th century, government has passed laws which have both protected the common man from the power of the mighty (e.g. the Taft-Hartley labor law) and sought to at least partially ameliorate the economic inequality and its impact through programs that support the financially vulnerable.  The funds for such programs were made available by our system of progressive taxation, under which those who are more able contribute more to the betterment of the common good.

In each of these examples, while we are still a long way from a nation where “all men are created equal” or have equality of opportunity, government has over the years increasingly met its obligation as stated in the Declaration to “secure these rights” and to insure that every adult has the right to vote so that government does draw its powers justly “from the consent of the governed.”

But on all of these fronts, government and the nation as a whole has begun to disassemble these credos.  President Reagan famously said, “Government is not the solution, government is the problem.”  Over the next 30 years and continuing at an accelerated pace in the present, the Republican Party’s concept of government has been less government, less regulation (don’t interfere with business), smaller government, let people fend for themselves.  Their attitude is that if people don’t succeed, it’s their own fault.

This is a major shift in attitude from that contained in the Declaration and in the way our modern progressive government, under both Democratic and Republican administrations, developed during most of the 20th century.  And since the Republican Party has been the majority party in Congress for most of the past 30+ years, that has resulted in a major shift in government itself.  The result, together with the huge influence of big business in policy-making through lobbying, fundraising, and PACs, is that corporations pretty much rule our government and set policy.  It is no longer there to secure everyone’s rights to life, liberty, and the pursuit of happiness.  This has affected policy in all areas of government ... from clean air to mining on federal lands to social security to elections.

At the same time, Reagan’s introduction of the “me” generation has resulted in a major shift in cultural attitudes.  Everyone is now out for him- or herself.  The idea behind the American social contract that we all share a responsibility for the common good, and that those with more ability have a responsibility to contribute more to insure the common good is fast becoming out of date.  This is especially prevalent among the elite rich.  Indeed, not only have they little concern for the welfare of their fellow Americans; they have little concern for the welfare of the country because as citizens with a global range of business activity, they see no place as their “home.”  For the first time in our history, the rich are not committed to the United States.

The combined change in the attitude of government and the public has resulted in a retrenchment on the advances in equality that had been achieved over the previous century.  Over the past 30-40 years, the income of the working class or middle class has remained stagnant in real dollar terms while the top 5% have just gotten richer and richer.  The result is that income inequality is greater now than it has been since before the depression.

While people of color (primarily blacks and hispanics) have not become less equal during this period, they have made no progress in the march to equality.  They still lack equal opportunity because inner city schools remain subpar (and there are enough success stories now that we know that this failure is not a function of the students’ background) and because subtle discrimination is still rampant despite its having been illegal for decades.  There has been no push, except marginally, to do anything to change this situation.

Finally, there is the issue of ethics.  While ethics has never been part of America’s credo or ethos, based as it is on capitalism, during the middle of the 20th century ethics in government and business came to be expected and certainly was the culturally correct position.  But as the importance of money and business together with egocentrism has increased again, so too has the attitude that the end justifies the means.  If doing something unethical provides an opportunity to make more money, then corporations and financial titans as well as workers in the cogs of those organizations will do so without barely a second thought or care for who might get hurt, whether the general public or even customers.  It’s back to the future. 

That was the primary cause for the recent financial debacle that we are still recovering from.  Yes, many point to the repeal of Glass-Steagall (the depression era law that separated commercial and investment banking) as well as deregulation as having caused the crisis.  And while that is true, it is only true because people in business cannot be counted on to act in an ethical, professional manner.  They must be monitored to enforce an ethical code that respects the common good.

One could go on and on about the ways in which the government’s protection of the common good, thereby securing the right to life, liberty, and the pursuit of happiness for all, has dramatically decreased over the past 30 years.  That there is less equality now than 30 or 40 years ago cannot be disputed (yes, women and gays/lesbians have more equality now than then, but that is mostly an upper class phenomenon).  

If this trend continues over the coming decades, the promise of the American Republic will have failed.  The concept of equality will be nothing but an illusion.  And government will not be there to secure rights for all and protect the common good.  Historically, our system struck a balance between private rights, the public good, and government.  That balance is on the tipping edge, if not already past it.