Tuesday, July 14, 2009
Brahma Bull Bankers
You can't be a master of the universe without unmitigated audacity. The current generation of "Brahma bull" bankers, especially in light of the recent meltdown they precipitated, make John D. "Competition is a Sin" Rockefeller look like Henry Thoreau. They have boldly resorted to blatant "trickle up" economic practices of robbing the poor to fund the ever-richer rich. Meanwhile, the federal government is dangerously close to becoming nothing more than a tool of capitalistic excess rather than a safeguard against it. Now is the time for rigorous regulation of what has become a much too powerful economic beast. It's time to rope and ride, not hope and slide.
Saturday, July 11, 2009
The Justice of Privilege
"How diligently privilege ha[s] to work to remain oblivious to its cost."
America, America by Ethan Canin
Book smarts probably has little to do with the leadership skills necessary to fight fires successfully, but that’s not the point, according to the latest Supreme Court decision in the New Haven firefighters’ case that recently came before them.
Apparently, according to the 5-4 decision, you can’t throw a test out after you have already given it if the results don’t yield the city’s desired outcome. Regardless how arbitrary or irrelevant a test might be, once the rules to the contest are set down in advance, you have to stick with the game plan and live with the results. That’s only fair to the individuals who passed the test. And I mean that in both senses.
The Swiss government is currently upholding the long-held principle of identity security in the face of the demand by the U.S. government to turn over the names of U.S. clients of Swiss bank UBS who may be avoiding U.S. taxes by squirreling away money in identity protected UBS accounts. In this case, Swiss protection of privacy trumps U.S. income tax cheating. What is one country’s sense of justice is another’s crime.
The U.S. split-estate law has been on the books for over a century and a half. The gist of it is that sub-surface owners’ rights trump those of surface owners whenever they might conflict. In the animal world, split-estate would mean worms and gophers would have power over bison and elk in land use.
In all three of these cases, ultimately privilege triumphs over actual justice. The written test is irrelevant to the actual necessary qualities of leadership; the protection of privacy interferes with the greater good of financial justice; and the notion that sub-surface ownership is somehow a greater good than surface ownership is clearly arbitrary and disregards the whole concept of ecology, a modern view of nature that did not even exist when the law was written.
Privilege has many faces, some visible and some not. To say that justice is progressive in the long run may be true. But these three cases indicate that justice often has an inertia that protects privilege first before it finally evolves to serve the greater good.
America, America by Ethan Canin
Book smarts probably has little to do with the leadership skills necessary to fight fires successfully, but that’s not the point, according to the latest Supreme Court decision in the New Haven firefighters’ case that recently came before them.
Apparently, according to the 5-4 decision, you can’t throw a test out after you have already given it if the results don’t yield the city’s desired outcome. Regardless how arbitrary or irrelevant a test might be, once the rules to the contest are set down in advance, you have to stick with the game plan and live with the results. That’s only fair to the individuals who passed the test. And I mean that in both senses.
The Swiss government is currently upholding the long-held principle of identity security in the face of the demand by the U.S. government to turn over the names of U.S. clients of Swiss bank UBS who may be avoiding U.S. taxes by squirreling away money in identity protected UBS accounts. In this case, Swiss protection of privacy trumps U.S. income tax cheating. What is one country’s sense of justice is another’s crime.
The U.S. split-estate law has been on the books for over a century and a half. The gist of it is that sub-surface owners’ rights trump those of surface owners whenever they might conflict. In the animal world, split-estate would mean worms and gophers would have power over bison and elk in land use.
In all three of these cases, ultimately privilege triumphs over actual justice. The written test is irrelevant to the actual necessary qualities of leadership; the protection of privacy interferes with the greater good of financial justice; and the notion that sub-surface ownership is somehow a greater good than surface ownership is clearly arbitrary and disregards the whole concept of ecology, a modern view of nature that did not even exist when the law was written.
Privilege has many faces, some visible and some not. To say that justice is progressive in the long run may be true. But these three cases indicate that justice often has an inertia that protects privilege first before it finally evolves to serve the greater good.
Friday, July 10, 2009
Bonuses
Once upon a time a bonus was a payment for exceptional work. Today, it seems to mean a contractual agreement in which an executive of some financial enterprise such as Citi or AIG is guaranteed an astronomical amount of money no matter how well he does or how much money the company loses. It is just another form of win at all cost.
Because lawyers have been involved in arranging contracts and therefore contracts have a greater currency than profits, apparently the logical notion of executives foregoing bonuses when company profits tank is not feasible.
However, there is a solution. Have the feds pay the contract-based bonuses with government-issue derivatives based on, say, decreasing unemployment statistics and/or shrinking national debt. In other words, the bonuses would increase in value as the debt and/or unemployment shrinks. That would prevent actual tax dollars going to logically unwarranted bonuses for executives, and they would be paid with the government equivalent of what these bonus seekers used to get us in economic trouble to begin with: default-swap mortgage securities, derivatives, etc.
Instead of the government investing in these undeserving rich, force them to invest in economic recovery directly. Then their interest would be in seeing the recovery to its conclusion without reaping any further dividends that might undermine that full recovery. Rather than spending their time trying to “game” the economy in new and unregulated ways, they would be certain to see that Uncle Sam and the workforce of America would get their due.
Paying bonuses with the same type of currency that the Wall Street rascals traded in would be a fitting response to the outrage the American public feels toward reckless banks and insurance companies like AIG. If your company got bailout money, you personally get paid contractual bonuses in government sponsored derivatives tied to reducing national debt and unemployment.
As President Kennedy once said, “Ask not what your country can do for you: ask what you can do for your country.” Making federal bailout beneficiaries pay contractual corporate bonuses with government derivatives based inversely on proportional reduction of national debt and/or unemployment would serve our country well and would provide the Wall Street rascals with an opportunity to do community service within their professions.
Because lawyers have been involved in arranging contracts and therefore contracts have a greater currency than profits, apparently the logical notion of executives foregoing bonuses when company profits tank is not feasible.
However, there is a solution. Have the feds pay the contract-based bonuses with government-issue derivatives based on, say, decreasing unemployment statistics and/or shrinking national debt. In other words, the bonuses would increase in value as the debt and/or unemployment shrinks. That would prevent actual tax dollars going to logically unwarranted bonuses for executives, and they would be paid with the government equivalent of what these bonus seekers used to get us in economic trouble to begin with: default-swap mortgage securities, derivatives, etc.
Instead of the government investing in these undeserving rich, force them to invest in economic recovery directly. Then their interest would be in seeing the recovery to its conclusion without reaping any further dividends that might undermine that full recovery. Rather than spending their time trying to “game” the economy in new and unregulated ways, they would be certain to see that Uncle Sam and the workforce of America would get their due.
Paying bonuses with the same type of currency that the Wall Street rascals traded in would be a fitting response to the outrage the American public feels toward reckless banks and insurance companies like AIG. If your company got bailout money, you personally get paid contractual bonuses in government sponsored derivatives tied to reducing national debt and unemployment.
As President Kennedy once said, “Ask not what your country can do for you: ask what you can do for your country.” Making federal bailout beneficiaries pay contractual corporate bonuses with government derivatives based inversely on proportional reduction of national debt and/or unemployment would serve our country well and would provide the Wall Street rascals with an opportunity to do community service within their professions.
Wednesday, July 1, 2009
Canary or Canard?
The philosopher Montaigne’s notion of man was that he is essentially good in a natural state but civilization corrupts him. Modern science has pretty much shown the truth that man is neither good nor bad, that he is a combination of nature and nurture, and that he is capable of learning new tricks, good or bad, well into old age.
Today, we occasionally hear and see people who still believe, even in the wake of the disaster on Wall Street and the deep recession caused by it, that laissez-faire capitalism is essentially good. They hang on to the myth that markets are rational and by themselves can cure whatever is wrong; and that “civilization” in the form of government regulation only corrupts or stifles progress and success. If we have settled the nature of man question, why haven’t we done the same for business?
A Denver Post columnist, Vincent Carroll, stated in a recent opinion column the following: “From time to time, of course, regulators have been known to become cozy with industry” and then suggests “Is it really likely, however, that every state’s regulators are industry apologists?” The answer is, of course it is likely, given the history of such commissions. They were historically better scouts than sentries. Given the current variety of regulation across many states, their apologies are anything but uniform. Mostly, state regulators have moved from ushering in gas and oil expansion to some widely varied minimal regulation. They have certainly not barred the door anywhere or even set up any high hurdles. In Colorado, for instance, the COGCC has not set minimal bonding and insurance requirements that even begin to match the possibility of disaster waiting to happen. Industry is, by a long shot, more protected than citizenry from potential disaster. In general, what industry has had to sacrifice of late is far less than what little human and natural habitat has gained by COGCC regs.
Given what has happened to health care regulation by state, I would think the oil and gas industry would welcome some federal regulation so that they would have to operate by one set of basic rules regarding water rather than many. (The health insurance industry, for example, would love to have just one federal set of rules rather than those variably imposed by the states.) Since water is far more valuable than gold let alone gas and oil, the Clean Water Act is a good watershed (so-to-speak) benchmark for federal regulation. We’ll need clean water long after gas and oil drilling is history. And we won’t have it if we don’t protect it.
However, for my peace of mind, if federal and state law ends up producing redundancies, that’s all the better. When one agency fails, another can pick up the slack. What we don’t need to find out is that “fracking” was a bad idea in hindsight. And just because Dave Neslin of the COGCC says, “We have no verified example of fracking contaminating groundwater in Colorado” does not mean there hasn’t been any contamination. It is going to take an incredible faith in coincidence to keep that myth going. Better safe than sorry.
Writing this has given me a headache. I think I’ll go take some Tylenol. Oops! I forgot. Tylenol intake may contribute to liver damage, a finding that has just been revealed in the past 24 hours. As I said, I’d rather be safe than sorry.
Today, we occasionally hear and see people who still believe, even in the wake of the disaster on Wall Street and the deep recession caused by it, that laissez-faire capitalism is essentially good. They hang on to the myth that markets are rational and by themselves can cure whatever is wrong; and that “civilization” in the form of government regulation only corrupts or stifles progress and success. If we have settled the nature of man question, why haven’t we done the same for business?
A Denver Post columnist, Vincent Carroll, stated in a recent opinion column the following: “From time to time, of course, regulators have been known to become cozy with industry” and then suggests “Is it really likely, however, that every state’s regulators are industry apologists?” The answer is, of course it is likely, given the history of such commissions. They were historically better scouts than sentries. Given the current variety of regulation across many states, their apologies are anything but uniform. Mostly, state regulators have moved from ushering in gas and oil expansion to some widely varied minimal regulation. They have certainly not barred the door anywhere or even set up any high hurdles. In Colorado, for instance, the COGCC has not set minimal bonding and insurance requirements that even begin to match the possibility of disaster waiting to happen. Industry is, by a long shot, more protected than citizenry from potential disaster. In general, what industry has had to sacrifice of late is far less than what little human and natural habitat has gained by COGCC regs.
Given what has happened to health care regulation by state, I would think the oil and gas industry would welcome some federal regulation so that they would have to operate by one set of basic rules regarding water rather than many. (The health insurance industry, for example, would love to have just one federal set of rules rather than those variably imposed by the states.) Since water is far more valuable than gold let alone gas and oil, the Clean Water Act is a good watershed (so-to-speak) benchmark for federal regulation. We’ll need clean water long after gas and oil drilling is history. And we won’t have it if we don’t protect it.
However, for my peace of mind, if federal and state law ends up producing redundancies, that’s all the better. When one agency fails, another can pick up the slack. What we don’t need to find out is that “fracking” was a bad idea in hindsight. And just because Dave Neslin of the COGCC says, “We have no verified example of fracking contaminating groundwater in Colorado” does not mean there hasn’t been any contamination. It is going to take an incredible faith in coincidence to keep that myth going. Better safe than sorry.
Writing this has given me a headache. I think I’ll go take some Tylenol. Oops! I forgot. Tylenol intake may contribute to liver damage, a finding that has just been revealed in the past 24 hours. As I said, I’d rather be safe than sorry.
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