September 30, 2013

Essential--And Unasked--Healthcare Questions

Despite all the talk about the Affordable Care Act, two questions essential to the debate go largely unasked and ignored.  They are the following:
  • Who pays for the cost of healthcare?  For example, if someone obtains an emergency hospital service but doesn't pay for it, who covers the cost?  Moreover, when people declare bankruptcy in order to avoid accumulated medical expenses, who pays for that?  Do hospitals eat the difference?  Not really.  The costs become components of the overhead hospitals pass on to paying consumers.  For county-owned hospitals that offer below-cost services, taxpayers cover deficiencies.  In other words, paying consumers not only foot their own healthcare bills, but they cover the costs of non-paying patients, too.  This is an example of what is called the "freeloader" problem in economics and it's a cost that is borne by society, because when it comes to emergency medical services, our morality informs us that we must help first and ask for payment later.  Quite often, however, the freeloaders described here are people who simply couldn't get insurance or lost the coverage they once had.  These situations occur due to job loss or development of pre-existing conditions, which leads me to my second question.
  • Do we want everyone who desires coverage to be able to obtain health insurance, including people with pre-existing conditions?  If that's what you believe, you have no option but to support an individual mandate requiring everyone to be insured.  Do you see why?  The fact is in a situation where everyone can choose if and when they obtain health insurance, rational consumers--and most of us are rational when it comes to money--won't get covered until after being diagnosed with a serious illness!  In other words, we'll avoid the need to make premium payments until we're sick and have reason to file for benefits.  In the insurance world this is known as an extreme case of adverse selection and it's terribly problematic.  In fact, insurance wouldn't work in the situation just described.  That's because premiums would be prohibitively expensive since only high-risk individuals would seek coverage.  
So let me summarize what I've just said: If you want everyone to have access to health insurance, you must support the necessity that everyone be required to obtain coverage.  The alternative is to say it's too bad, but people with pre-existing conditions shouldn't expect the benefit of health insurance.  While heartless, it's a legitimate position, but as I've said above, to the extent that our morality informs us that we must provide emergency treatment to the uninsured, the associated costs are borne by society--namely taxpayers or those who pay for their own healthcare--anyway.  Withholding care and letting people die is also an alternative, but tell that to a baby born with a life-threatening, but reparable, heart condition.  
So what's my point?

If you're opposed to the individual mandate in the Affordable Care Act, you're supporting an environment in which only the healthy get insured.  In such a case, we either let people with pre-existing conditions flounder, or we help them and cover their costs of care by paying higher hospital bills.  Doesn't it make more sense to ask everyone to obtain coverage up front and ask everyone to pay a portion of the cost of care?  It not only makes sense from a societal benefit perspective,  but the law of large numbers allows us to better mange risks as well.

September 21, 2013

Faith Waits

Life isn't fair, which is arguably an implication of believing in a God who defines what is fair, is powerful enough to destroy all that’s unfair, but allows the most virulent incarnations of unfairness to flourish anyway.

Ah, you say, but that’s just the problem of pain, a conundrum of faith you’ve already contemplated to your satisfaction. Some people—perhaps you included—resolve the paradox by saying God is infinitely wise and knows that goodness is possible only in the presence of its opposite. How can anyone, for instance, be judged righteous, who hasn’t recognized and overcome evil? To this you might add another, supremely comforting, idea: While mortality is pain-filled and subject to corruption, it’s but a blink of an eye compared to the eternal reward that awaits the just. Fairness will come in the hereafter.

But do you see the problem with that notion? I’m not referring to the inexplicable narrative of how God creates a world and populates it with children He loves, only to watch them kill and brutalize each other. Rather, I speak of the license it gives the living to do likewise, to simply witness the evil and say: “Thank God, for the pain is only for a moment and He will right these wrongs.” This shining article of faith serves as a salve on the conscience and a boast to all who hear it, but it’s also an excuse to do nothing. The living could mitigate life’s unfairness, but too many abide by a tainted premise: While shit rains, I can wait for God’s will to manifest itself, there’s no need for an umbrella.

And so faith waits.

We pray for peace—just like we pray for the hungry, the naked and the sick—but rarely do we become the miracles we seek. Help for the displaced pales beside the wars, pogroms, class boundaries and other weapons of alienation that displace even more. All the while our faith waits for the end times, or a miracle, or some other divine response to prayer’s equivalent of kicking the ball into God’s court.  I would rather we had no faith in a hereafter at all and worked to bring heaven here.  Maybe our world would be more caring and sharing then.

September 19, 2013

An Embarrassing Admission

I'm going to out myself.  Here goes.

Before I moved from California last year, I was a registered Republican.  (There, it took a lot for me to admit that--the embarrassment is overwhelming).  Now that I live in Wisconsin, I'm not required to state my political affiliation, but if it were necessary, I wouldn't do so as a Republican--not anymore.  The party, in short, abandoned me a long time ago.

I'd been wondering how to best describe my feelings of abandonment, when I saw a scene in an episode of HBO's Newsroom that resonated with me.  In this scene, a news anchor for a fictional cable news program justifies his identity as a Republican after making several disparaging remarks about the party.  This is what he says:
I call myself a Republican because I am one.  I believe in market solutions.  And I believe in common sense realities and the necessity to defend ourselves against a dangerous world and that's about it.   
The problem is now I have to be homophobic.  I have to count the number of times people go to church.  I have to deny facts and think scientific research is a long con.  I have to think poor people are getting a sweet ride.  And I have to have such a stunning inferiority complex that I fear education and intellect in the 21st century.  Now most of all, the biggest new requirement--really the only requirement--is that I have to hate democrats.

I cannot align myself to this new breed of Republicanism that claims to be Christian, but battles efforts to feed the hungry and care for the sick.  I reject its assertions that science is trying to deceive the populace and that we have no obligation to heal the planet because God will fix our problems.  I'm tired of how the party works to dismantle voting and women's rights that stood as bold lines against hatred and bigotry.  I'm sickened by its depictions of the poor as lazy and its solutions that disproportionately benefit the rich.  Most of all, I'm disheartened by its apologetic worldview that rejects fact and reason in search of ways to justify its intolerance.

September 18, 2013

Great Idea: Let's Arm Schools

After the shooting at Sandy Hook Elementary, one of the solutions many gun advocates offered to solve the problem of mass killings was to post armed security guards at schools.  In the wake of the most recent shooting in our nation's capitol, it's clear that this is far from a reasonable solution to the problem. 

Facts regarding the tragedy continue to emerge, but two widely reported pieces of information should be noted: 
  • At least one of the twelve who died was an armed security officer
  • The gunman apparently used two firearms that he took from his victims to continue the rampage
Ignoring the cost of the solution, which would be problematic given already stretched budgets, do we make our public places safer by putting them under the protection of armed security?  I doubt it.  The Navy Yard was apparently heavily armed and guns were in the possession of people whom I imagine were well trained.  Yet, some of the weapons appear to have become tools used to murder more innocent victims.  I shudder at the thought of the accidents and deadly crossfire that will occur if schools are similarly armed

For information about the most recent shooting, go to this link

September 17, 2013

The Doubt Essential to Faith

When I was a young Mormon missionary, I was intrigued by a dialogue that I would hear regularly during one of the lessons we taught investigators.  The lesson was entitled, The Plan of Salvation, and one of the first tenants it covered was our reasons for being born into mortality. According to Mormon theology, there are two grand purposes for our lives here on earth: 1) To gain a body and 2) To learn to walk by faith.  In combination, the two conditions allow us to be tested.  Regarding the second purpose, my missionary companion and I were very quick to point out that faith is not a perfect knowledge.  Humans, we taught, were caused to forget their pre-mortal existence with God, so that faith was not only possible, but that uncertainty would become an ingredient of their lives.  

Now, here's the interesting part of the story.  No sooner would we cover this concept than my companion would say with the greatest conviction: "I bear you my testimony that I know these things are true."  And he would repeat the same mantra, time and time again, after relating new theological concepts.  Was my companion a bit nutty?  Of course not, because that's exactly what our lesson plan taught us to say, but do you see the irony in this?  We were essentially saying: Faith isn't a perfect knowledge, but we can know that it's a necessary part of our existence and that all aspects of Mormon theology are true.  

As I've pointed out before, the fundamentalist's dogmatic and unshakable boast that he knows God's will on a matter disregards the fact that faith has far more to do with uncertainty than knowledge of what is true.  Yet, Christians deem uncertainty as a kind of failing and a sin.  When I tell my Mormon friends that I've become agnostic to everything that the church teaches, except for the most fundamental of Christ's commandments that we're to love each other, they believe I've committed some horrible wrong that keeps me from true communion with God.  I would know otherwise, they say, if I'd only humble myself and pray with real intent.  

I've done that, of course.  For decades there was nothing more important to me than to one day know that the church was true, but God answered my pleas in a way that surprised me.  The fact is, if we harbor no doubts about Noah and his ark, or if we stick to literal readings of Genesis, then we relegate Christian culture to a scientific backwater that fears facts and learning.  We might as well read chicken entrails for the value it provides.  

Press this link for a wonderful TED speech given by Lesley Hazleton, who has apparently been doing a lot of thinking on this topic.

July 21, 2013

The Essential Question of Trayvon Martin

Here is what I see as the essential question we must answer in the wake of the Trayvon Martin decision. 

Let's say the NAACP decides to respond to the trial's outcome by encouraging all law-abiding adults of color living in states where "stand your ground" laws are in effect to arm themselves.  They say the message isn't meant to foment violence, but to enable individuals to protect themselves from the kind of aggressive actions that led George Zimmerman to kill a teenage boy.  It's a message that is consistent with the nation's interpretation of what we refer to as the right to bear arms and understandable in light of what happened.

Are you uncomfortable with such a position?  If so, why?  In particular, if you're a Tea Party advocate, do you see the Second Amendment as applying only to white Americans?  Do you see your right to bear arms as the means by which you protect yourself from ice tea-guzzling and Skittles-eating black teenagers who wear hoodies?  Would you limit the ability of people of color to take advantage of the same right you cherish to protect themselves against a wayward system that promotes discriminating violence?  If that's the way you feel, I would suggest you might be a racist.

Some people, however, will say they're not racist, but that encouraging minority groups to arm themselves will only give rise to civil disorder and violence.  Yet, that's exactly how I feel about the self-righteous on the far right, who believe they will need arms to support a constitution they don't understand and have never read.  I fully expect them to wage an armed war against liberals, a possibility that frightens me terribly.  When people have free access to weapons and suffer no consequences for bone-headed decisions that result in the loss of property and life, we have a volatile and dangerous situation.  Stand your ground laws encourage both preconditions.  

July 6, 2012

Barclays Influence

State legislatures across the country are passing voter suppression laws ostensibly to prevent fraud.  While over thirty states have considered regulations requiring people to present government-issued photo IDs to vote, up to 11% of American citizens lack such identification.  The requirement would make it more difficult for certain people—especially the elderly, blacks, students and people with disabilities—to vote. 

Here is a summary of other similar actions that have been taken:

  • Three states passed laws to require documentary proof of citizenship, though as many as 7 percent of American citizens do not have such proof.
  • Seven states shortened early voting time frames, even though over 30 percent of all votes cast in the 2008 general election were cast before Election Day.
  • Two state legislatures voted to repeal Election Day registration laws, though Election Day registration increases voter turnout by 10-12 percent.
  • Two states passed legislation making it much more difficult for third-party organizations to register voters—so difficult, in fact, that some voter registration organizations are leaving the states altogether.

Proponents of voter suppression legislation have failed to show that fraud is a problem anywhere in the country.  For example, despite the Department of Justice’s 2002 Ballot Access and Voting Integrity Initiative, which promised to vigorously prosecute voter fraud, the federal government obtained only 26 convictions or guilty pleas between 2002 and 2005.  Other studies consistently find that voter fraud appears to be extraordinarily rare.  

At the same time as these steps are being taken, corporations have been given the extraordinary ability to sway votes through unlimited campaign contributions.  One case in point goes beyond the believable into the realm of the surreal.  Barclays, the bank that has acknowledged irregularities among its traders, has been revealed to be the ninth largest bundler of campaign funds to the Romney campaign.  What its traders were apparently doing was to go into cahoots with at least four other banks to manipulate the London Interbank Offering Rate (or LIBOR).  LIBOR is a floating interest rate that $350 trillion of financial contracts, including residential mortgages, reference.  The effect of this manipulation conceivably led to instances in which mortgage borrowers were made to pay too high a rate in order to improve the profit performance of Barclays traders. 

Barclays has been a vocal critic of financial regulation and with its access to corporate profits and a network of well-heeled bankers, is able to influence American voters.  But the thing that is most bizarre about this is that Barclays is a British—not an American—bank.  In other words, a foreign corporation that wants to reduce its regulatory scrutiny despite a spotty ethical track record is bundling millions of dollars to support a candidate who has vowed to dismantle the legal framework built to prevent another financial collapse.   If we don’t recognize something incredibly dangerous in all this, we’re not paying attention.  While it is becoming increasingly difficult for American citizens to cast their votes, even foreign corporations are expanding their influence in our elections.  

July 5, 2012

The Bible's Morality

The more one reads from the scriptures, the more it becomes apparent that a great deal of it should not be taken as useful, or even moral.  For example, the premise that God would select a chosen people and make enemies of everyone outside that group should make any moral person shudder.  Can we really find joy in the vengeance of the Psalmist as it is written in 137:8-9?
O daughter of Babylon, who art to be destroyed; happy shall he be, that rewardeth thee as thou hast served us.  Happy shall he be, that taketh and dasheth thy little ones against the stones.
The New Testament, too, is not without fault and Paul is especially problematic.  To me, Paul never really became converted to the gospel.  Rather, he took what was most abhorrent from the Old Testament and amplified it, telling the Galatians, for example: "I would they were even cut off which trouble you."  In doing so, he encourages men to emasculate themselves to achieve the aims of heaven.  But this is not all.  In Ephesians he tells slaves to obey their masters, thereby giving tacit approval for this barbaric institution.

If we were to accept every tenant of the Old Testament, we would be spending all our time executing people for crimes that are inconsistent with even the eye-for-an-eye admonition of Moses.  Here is a short list of offenses that deserve death:
  • Stubbornness and overeating--Deut 21:18-21
  • Cursing--Lev 24:13-14
  • Disobeying the Sabbath--Exod 35:2
  • Touching pigskin--Lev 11:7-8
Apparently God doesn't like football!  With regard to these and other flaws in scripture, the theologian, John Shelby Spong, says:  
I am now convinced that institutionalized Christianity has become so consumed by its quest for power and authority--most of which is rooted in the excessive claims for the Bible--that the authentic voice of God can no longer be heard within it...  The constant attack of right-wing voices on Christian scholarship is a clear tip-off that they cannot face reality.  When people cannot deal with the message, the ancient and still regularly practiced tactic is to shoot the messenger.

May 18, 2012

Government Waste or Corruption?

A friend of mine recently told me a story that should anger any American taxpayer.  Not too long ago he was working for a company that had earned a $120 million federal contract for the development of a computer system and he was the project's manager.  The work was going well and the system was on schedule for an on-time completion.  After the company had charged $90 million of the full contract amount, a representative of the agency that had ordered the work, visited my friend and ordered a stop to it.

My friend, rightly so, was incredulous.  The system was still a work-in-progress, but enough had been completed that he could show it was living up to expectations.  The man said a demo wasn't necessary and that he didn't intend to take the contract away form the company.  In fact, he wanted to replenish the budget in full, but he needed the work to begin again from scratch.  Why?  Did it have to do with some new consideration or development that hadn't been a concern at the time of the bidding?  No, the agency wanted the work farmed out to a specific subcontractor.  

You probably already suspect what had happened behind the scenes, but here's the summary: 1) An original bidder on the project complained to a congressional representative who was on an important appropriations committee, 2) the congressman put pressure on the regulatory agency to rethink the project to include the losing bidder, and 3) the agency--afraid future appropriations would be jeopardized without political support--cancelled the contract and demanded the work be restarted with the new subcontractor.  Now, some people might call the result government waste, but in my mind, it's more than that.  It's corruption based upon the influence of a well-heeled corporation and the money at its disposal.  The result was that $90 million of tax revenue--money you and I paid--evaporated.  

We can't give corporations and billionaires the ability to exert financial arm-twisting in this way, and a good place to start would be to end their influence in campaign financing.  The degree to which fraud occurs is dangerous and destructive.  Here's a case in point: Karl Rove's Crossroads GPS has raised tens of millions of dollars from unnamed donors and is using the money in attack adds against democratic opponents.  This would normally be illegal, but he's getting away with it because he calls Crossroads GPS a 501 (c) non-profit entity that is working to enhance social welfare.  

This is nothing short of a scam that only increases the influence of the moneyed class in America.  We can't let him get away with it.  We only do so at our peril.  If you don't believe this is a problem, listen to this recording (from This American Life) of an elected official shaking down a lobbyist for money.  

May 16, 2012

The Farce of Tea Party Patriotism

The other day I was driving down the road and saw a car ahead that sported an array of bumper stickers and two miniature American flags where the dry cleaning is sometimes hung.  One of the bumper stickers advertized the call letters of the Bay Area radio station that features Rush Limbaugh.  Others addressed conservative causes: Defense of Marriage and gun rights to name two.  It was, however, the message placed in the center of the rear windshield that really got my goat.  It said quite simply, “I’m a Patriot.”

It bothers me that conservatives believe they are the only patriots in the country.  It also upsets me that many Christian fundamentalists believe conservatism is consistent with their faith.  Patriotism has nothing to do with such principals.  Here are a few of its aspects that I believe are worth mentioning:

  • A truly patriotic American will choose the education of the nation’s children as a higher priority than the amassing of weapons sufficient to destroy the world.
  • Patriotism means negotiating in good faith to fix the problems of the nation instead of filibustering away any real chance to solve them.
  • A patriot would rather see fellow citizens rehabilitated than demand a warped justice that is no more than institutionalized vengeance that fills prisons.
  • Patriots will regulate equal access to economic opportunity instead of prescribed behavior in bed.
  • The most patriotic of acts protect the young, old, weak and impoverished and insist that those blessed with good fortune contribute to the cause.
  • A patriotic America will accept good advice in order to leave to future generations an un-blighted world. 
  • Christian patriots will follow the teachings of Jesus—especially the injunction to love one another—rather than the Mosaic Law that speaks of stoning, condones slavery and depicts women as chattel.
What happened to the patriotism of the Civil Rights Movement and social programs, like the GI Bill, that led to greater access to opportunities and national prosperity?  Ditto Heads don’t have a monopoly on patriotism.  In fact, by their protection of corporate interests and the 1%, they don’t have much of a claim to it, at all.

May 15, 2012

The Evolution of the Wasp

There are over 5,000 species of a parasitic wasp occurring in North America that make up the family Ichneumonidae.  While they all live at the expense of other creatures, some take part in a reproductive process that is especially gruesome. 

A noted biologist describes the process in the following way (taken from The Greatest Show on Earth):

The female wasps lay their eggs in live insect prey, such as caterpillars, but not before carefully seeking out with their sting each nerve ganglion in turn, in such a way that the prey is paralyzed, but still stays alive.  It must be kept alive to provide fresh meat for the growing wasp larva feeding inside.  And the larva, for its part, takes care to eat the internal organs in a judicious order.  It begins by taking out the fat bodies and digestive organs, leaving the vital heart and nervous system till last—they are necessary, you see, to keep the caterpillar alive. 

Here is a question I pose to anyone who insists upon a literal reading of Genesis: Do you really believe God is, on one hand, benevolent, but on the other hand, capable of creating this horrific spook house creature?  In my darkest dreams, I couldn’t imagine such a torture leading to death.  I hope, on behalf of the caterpillar, that it doesn’t feel pain. 

Now, here’s my point: Even if evolution wasn’t empirically proven to be a description of how nature perpetuates itself (which is has) I would believe in it, rather than put my faith in a being capable of imagining and creating that poor caterpillar’s hell.  But if you can only accept literal readings of the Bible as true, let me remind you of what’s contained in Genesis 1:20:

And God said, Let the waters bring forth abundantly the moving creature that hath life, and fowl that may fly above the earth in the open firmament of heaven.

Did you catch the subtlety?  It says God let the waters bring forth life.  Later in Genesis, God lets the earth do the same thing.  That, to me, suggests a creative process that gives our environment an important part to play.  After all, what fowl is born out of water, except in the way all life emerged from a primordial soup? 

If you honestly want to know whether science has it right and evolution is factual, there is plenty of evidence.  In fact, the mechanics of the theory have been replicated in experiment after experiment and seen in observation after observation.  The reason we call evolution a theory isn’t because it hasn’t been proven—again, it has.  The nomenclature is based upon the conservatism of the scientific approach.  We’ve only proven it inductively by examining all the available evidence, rather than through deduction in the way of a mathematical proof.  In the same way, relativity is also a theory, but that hasn’t stopped us from using its equations.  

If you're teaching your children that evolution is one of the devil's lies, you're doing them a great disservice.  You might as well teach them not to take the next generation antibiotic, because it will be fashioned using the knowledge evolution has imparted to us.  You might as well tell them to remain ignorant about breakthroughs in the study of DNA, because it has given us the mechanics by which evolution occurs.  In fact, you should tell them not to study biology at all, since you cannot divorce it from evolution, except in the minds of Christian apologists.  It is the framework by which biology is understood.  When I have the time I’ll summarize the results of a fascinating biological experiment to support my point.

May 14, 2012

The Ryan Budget and Territorial Taxation

Have you looked at Paul Ryan’s budget?  Among its many proposals benefiting the ubber-rich at the expense of the poor, it calls for a shift away from our system of taxation based upon worldwide income.  In doing so, the plan would exempt from U.S. taxation foreign profits earned by multinational corporations.  This aspect of the proposal is little understood and has received almost no press coverage, but it speaks volumes about the lengths conservatives will go to enrich the 1%. 

Today, when a U.S. citizen earns interest on investments held in a foreign bank or trust, he’s required to report the income to the IRS, subjecting it to U.S. taxation.  The same is true for corporate profits booked by overseas subsidiaries.  However, tax lawyers and accountants have found sophisticated ways that the rich use to shield income and avoid such liabilities.  This is crucial to note and the subject of an earlier blog I wrote.  If you’re unfamiliar with the issue of transfer pricing, go to this link.  It will be worth your time. 

The problem with Ryan’s proposed shift to a territorial system of taxation goes beyond a loss of revenue, which would be substantial.  (The Tax Policy Center estimates that his plan will result in a $4.6 trillion shortfall in revenue by 2022--$10 trillion if the Bush tax cuts are retained as Ryan proposes).  In my mind, the more significant problem is that it will result in regulatory arbitrage.  What do I mean by that?  Have you ever noticed how many U.S. businesses incorporate in states (Delaware, for example) outside their places of operation?  They often do that in order to take advantage of a less intrusive regulatory environment.  AIG, for example, was able to choose its federal regulator and opted for the Office of Thrift Supervision (it had ingeniously purchased a small S&L to give itself the option).  AIG's management knew it would receive little sophisticated supervision as a result, which was part of the truth behind the company's implosion.  The OTS, which was familiar only with the simple business model of thrifts, was completely unprepared to regulate the complexity of AIG's businesses.  In a similar way, if we allow a shift to territorial taxation, it will encourage our multinational corporations to book more income in less intrusive tax havens and move their operations (and probably more jobs) offshore.  They will do it to enrich shareholders at the expense of workers.

The proposal is moronic and must have been written by the Chamber of Commerce, which cares nothing about working class Americans.  The fact that Paul Ryan is pitching it is an indication that he and the other Republicans who support it are bought by moneyed interests and are party to the institutionalized corruption that jeopardizes the health of our nation.  What is painfully clear in all this is that a faction of America's leadership not only wants to reduce corporate income tax rates, but to eliminate it all together.  But conservatives have no middle ground.  Either corporations are people, in which case they must pay their fair share of income tax and help build the roads, schools and other public projects that benefit them, or they are not people and shouldn't be allowed to fund super pacs that give them the ability to buy elections and elected officials.  

May 10, 2012

A Heavenly Reward

Decades ago I persuaded a high school friend of mine to investigate the Mormon Church and for several months she studied with missionaries, only to decide the teachings weren’t to her liking.  Then years later she visited me after we’d gone separate ways to college.  With a weekend of activities planned, I asked if she would mind a brief stop at a Kinko’s to get copies of a document that I needed for the next day.  It would only take a minute.

When we stepped into the copy shop, however, we noticed that there was only one worker behind the counter and two customers ahead of us.  The other customers—an elderly lady and her granddaughter—had the Kinko’s lady copying what I recognized to be a Book of Remembrance.  A Book of Remembrance is, for active members of the Mormon Church, a family history that has been painstakingly gathered and recorded by the person who possesses it and generally includes a detailed genealogy.  In the case of the elderly woman and her granddaughter, the copy-in-progress was meant as a gift and tender reminder of the importance of family.  However, because the pages were of odd size, the young women behind the counter was copying an impressive stack of paper by hand, one at a time.

The worker looked at me and asked what I needed.  I answered that I wanted twenty copies of a one-page document, all on standard paper.  She then turned to the grandmother and suggested that my job go first, since it would only take a few seconds to complete.  The older woman responded that the next person through the door would then get similar treatment and she would never get her print job done.  I understood the point and told the worker that I could leave my document and come back for copies later.

Once we left the store my friend said something that bothered me.  She said we’d just witnessed the primary reason she could never consider joining a church.  When I pressed her on the point, she answered, “You guys are so focused on personal salvation that you don’t give a shit (her words) about being kind to each other.”

Now, I know the criticism is unfair and exaggerated, but it serves to substantiate a point Jon Meachem recently made in a Time article entitled Rethinking Heaven.  The gist of his point is that the idea of heaven as a place where the righteous earn an eternal reward gives people license to not give a shit (my words now) about the people around them who might need help.  In my mind there are two unfortunate results of a traditional view of heaven:

  1. We can justify our lack of assistance to—and empathy for—those who suffer from adverse circumstances because we can say they will have a lasting reward someday if they’re only good enough to deserve it. 
  2. In justifying our inaction, we ignore the fact that we serve God best when are in the service of our brothers and sisters here in this life.  In essence, we leave it to God to bless others.  It becomes His responsibility, rather than our own.

As an alternative view to this, Meacham writes:
The scholarly redefinition of heaven as a manifestation of God’s love on earth has been illuminating, for it at once puts believers in closer proximity to the intent of the New Testament authors and should inspire the religious to open their arms more often then they point fingers.  Heaven thus becomes, for now, the reality one creates in the service of the poor, the sick, the enslaved, the oppressed.  It is not paradise in the sky but acts of selflessness and love that bring God’s sacred space and grace to a broken world suffused with tragedy.
To me, it’s no coincidence that the secular governments of Western Europe have stronger social safety nets than that of Middle Eastern countries and yes, the good ole US of A.  Where people believe poverty is just a temporary condition that can be resolved with good behavior and God’s blessing, there is a temptation to devote less attention to the matter.  But therein lies the rub.  In short, if we’re not working to bring a bit of heaven to the unfortunate souls around us, we don’t deserve the heavenly rewards we seek.  

April 17, 2012

When Saw We Thee?

Jesus once said that there would come a day when He would condemn us for not feeding Him when He was hungry, not clothing Him when He was naked and not ministering to Him when He was sick.  With hearts pierced by guilt, we would reply by asking when we ever saw Him hungry, or naked, or sick.  And He would answer: "Inasmuch as ye did it not to one of the least of these, ye did it not to me."

Christ could very well answer our question the following way: When you supported policies that further enriched the wealthy to the detriment of the poor, when you chose to fund the production of bombs while children died from hunger, when you fought against the one chance the nation had to bring healthcare to each of its citizens, you did it contrary to the gospel's directive to love all your neighbors.

In a recent Newsweek article, Andrew Sullivan tells us to, "forget the church, follow Jesus."  Seeing how Christian fundamentalists fight against the most basic aspects of Christ's teachings, Sullivan's admonition is arguably good advice.  In speaking of those teachings, he says:
What were those doctrines? Not the supernatural claims that, fused with politics and power, gave successive generations wars, inquisitions, pogroms, reformations, and counterreformations. Jesus’ doctrines were the practical commandments, the truly radical ideas that immediately leap out in the simple stories he told and which he exemplified in everything he did. Not simply love one another, but love your enemy and forgive those who harm you; give up all material wealth; love the ineffable Being behind all things, and know that this Being is actually your truest Father, in whose image you were made. Above all: give up power over others, because power, if it is to be effective, ultimately requires the threat of violence, and violence is incompatible with the total acceptance and love of all other human beings that is at the sacred heart of Jesus’ teaching. 
 To this I add, Amen.

March 3, 2012

Who's Running the Show?

When I was a young undergraduate studying economics, I thought the globalization of industries would benefit the world. My reckoning was this: As corporations expand across borders, nations will be motivated to find peaceable and well-reasoned solutions to problems. At the time, there was still a Soviet Union and the Cold War remained a fact of life. It seemed to me then that a real war would be less probable if Exxon was drilling Siberian oil wells and GE was building Moscow’s power plants. How could anyone chose to train bombs on the global enterprises that created economic prosperity?

Today I have a different view of the growing concentration of economic power. As a recent Time article states:

National governments have, over the past several decades, seen the most basic pillars of their power erode. Globalization has undermined their efforts to manage their borders. The ability to control their own currency has been lost but for all but a handful of major powers. Fewer than two dozen have the ability to sustainably project force beyond their borders. Meanwhile, corporations play against one another as they venue-shop for more attractive tax or regulatory regimes. This regulatory arbitrage undermines nations’ ability to enforce their own laws

This has occurred, in part, because corporations are amoral constructs created for a single purpose: to generate profits for shareholders. While we all recognize this to be the case, we’ve drank Ivan Boesky’s Kool-Aid in our belief that greed is good and the invisible hand works a kind of magic. Yet, can we reconcile this notion with an Apple executive’s recent assertion that, “We don’t have an obligation to solve America’s problems,” when that same company expects American taxpayers to protect its intellectual property rights and shipping lanes?

Corporations, as I said before, are amoral. They’re not evil, but unless regulated to do so, few will spend time considering societal needs beyond the needs of their shareholders. If they had a social conscience, we wouldn’t need regulators and regulations, but they are devoid of consciousness and intent. That being said, we’ve given them more rights than people possess. Here’s a case in point: The 14th Amendment was established to protect freed slaves and give them equal protections under the law. However, of the 288 cases brought under its terms, all but 19 have dealt with the interests of corporations. It has been used to block certain taxes, limit punitive damages, and define advertising copy as speech worthy of protection.

The Supreme Court’s decision in Citizen’s United only expands the influence of corporations by giving their well-heeled shareholders free reign to buy votes through unlimited PAC donations. Of the $60 million of PAC money raised since January 2011, 80% came from just 196 donors. More shocking, one of every four dollars came from just five people: Harold Simmons, owner of Contran, Las Vegas casino mogul Sheldon Adelson, Houston home builder and Swift Boater Bob Perry and PayPal co-founder Peter Thiel.

Isn’t it obvious that we no longer live in a nation where each person exercises a single vote in matters of great importance? We now have a dollar-per-vote system that is controlled by amoral corporations that care only to perpetuate their shareholder-enriching ways.

February 29, 2012

Faith as a Grain of Mustard Seed

Be patient with me here, because I’ll attempt to show that a popular interpretation of an important scripture is incorrect and leads to corrupted thinking.  First, let me make a rather obvious statement: Math and logic are types of languages. For example, the function f(x) = a + xb can be expressed in plain English as an equation that describes a straight line, where x is the slope. Similarly, the statement “If x, then y” also has a corollary in both grammar and logic.

Consider, for example, the following sentence that is a reference to the game of basketball: “If you are tall, you can rebound.” Here, the initial clause establishes that being tall is a necessary condition for what follows, which is the ability to rebound. Now, I’m not saying the sentence is true. I’m only summarizing what the expression is trying to say. Regarding its veracity, however, most people would agree that all else being equal—relative athleticism, strength, experience, and the ability to leap and grasp—the taller of any two men will be the better rebounder in a game of hoop.

Let’s now make a small adjustment to the sentence. Add the word “even” to the beginning of it and the result is this: Even if you are tall, you can rebound. Anyone who thought the previous sentence was intuitively correct will find fault in this one. Why? With this change the condition of being tall is disparaged. The meaning of the sentence is, in effect, that the ability to rebound is a fait accompli. It will occur despite one being tall.

This is an important distinction because it’s at the center of what I consider a misreading of an important declaration Christ makes in Matthew Chapter 17. In a passage that begins with verse 14, Jesus performs a miracle His disciples had attempted, but failed, to accomplish. When asked why previous efforts had been ineffective, Jesus answers that it was because of the “unbelief” of His followers. He goes on to say:

For verily I say unto you, If ye have faith as a grain of mustard seed, ye shall say unto this mountain, Remove hence to yonder place; and it shall remove; and nothing shall be impossible unto you.

Notice that Christ’s words are couched as a conditional statement similar to the one I introduced above. That being said, when people quote the scripture, they tend to disparage faith the size of “a grain of mustard seed” and interpret the statement as though it begins with the term, “Even if.” In doing so, they imply that bigger is better. However one can assume from a literal reading of the scripture that Christ isn’t being critical of a small grain-sized amount of faith, but is presenting a necessary pre-condition for the miraculous in life to occur. It’s possible that He’s describing an ideal!

Perhaps what He’s saying is that faith doesn’t imbue us with power despite its small size, but rather because faith at its most powerful is small and inconspicuous, that it doesn’t walk with a swagger but admits that it doesn’t know. Admitting to a lack of knowledge is the beginning of true learning. On the other hand, when we convince ourselves in an a priori fashion that the Bible is an infallible rendering of reality, then we become apologists to everything it contains, including, for example, its approval of slavery. In this way, apologists don’t discover anything new, because they don’t seek knowledge or wisdom. What they seek is only comfort and confirmation and they’ll obtain both, even if it requires them to ignore facts and discrepancies.

The difference in people who practice true scholarship verses apologetics is remarkable. The difference is especially clear when comparing the accomplishments of the people of my church—the Mormons—verses people who identify as being Jewish. I once heard a Jewish friend of mine say that if you put two Jews in a room, you will have between them five different opinions. That’s because they welcome questions and intellectual inquiry, even if it countermands previously held notions of truth. One of their heroes, the 13th Century thinker Maimonides, coined the phrase “Teach my mouth to say I don’t know.” Maimonides taught that to admit to a lack of knowledge was a noble and courageous act.

To Mormons and other fundamentalist Christian sects, however, doubt and questioning has been elevated to a sin. Disbelief is deemed the fault of individuals, rather than an implication of life’s uncertainty. When scriptures lead to moral ambiguity, it becomes the duty of Christian apologists to ignore the discrepancies. That’s the message of Mormon leaders who have excommunicated church intellectuals for speaking truthfully—but too critically—about the organization’s past. One of its leaders, Boyd K. Packer, has demonstrated his mistrust of intellectual inquiry by saying, “Some things that are true are not very useful.”

How these two differing worldviews translate into a regard for scholarship is clear. There are roughly as many people in this world who self-identify as being Jewish as there are Mormons, but while 185 Jews have earned Nobel Prizes, no Mormon has yet to receive the honor.

Coincidence? I don’t think so.

February 26, 2012

Repatriation of Offshore Corporate Profits

Yesterday Mitt Romney made a statement about the repatriation of corporate profits that got me hopping mad.  It angered me, in part, because Romney certainly understands the issue better than most people, but obfuscated the truth in order to score political points with an unknowing public.  He said that as president he would encourage the return of a trillion dollars currently held by foreign subsidiaries of US corporations so the funds could be invested in jobs here, rather than in outside markets.  Presumably he would do this by reducing, or eliminating, the income tax on repatriated dollars.  According to him, these dollars arise when a US corporation establishes an offshore presence—his example was an auto plant in China—from which it generates profits.  These profits, he said, will be invested in foreign markets if not brought back to the US.

This analysis is disingenuous on so many levels.  The first is related to how the profits are derived.  Romney is right when he says they’re generated by the foreign operations of US corporations, but what he failed to say is that in most cases the profits arise through something called transfer pricing associated with interactions with shell companies.  Transfer pricing is an important aspect of the tax and treasury operations of many global businesses.  In fact, it’s so important that people who understand its ins-and-outs are paid as if they were professional athletes.

The way transfer pricing works is by first establishing a shell company in a tax haven—the Cayman Islands, for example.  The shell company is then caused to purchase important licenses or other rights that are central to the corporation’s operation.  High tech companies are especially fond of selling software licenses to their offshore entities.  Since the shell companies have no assets, they must raise cash to purchase the licenses, but this is generally accomplished through intercompany loans.  These transactions—the selling of licenses and the borrowings—are, of course, transactions only on paper. 

Here is what a corporation is then able to do.  Every time a product is sold, it owes its foreign shell company a licensing fee, which appears as an expense on the corporation’s income statement and thereby reduces its taxable income.  In other words, this is essentially a means to avoid the payment of tax.  The shell company, on the other hand, is located in a tax haven, and though it receives revenue, it incurs no tax liability.  It can use a portion of the fees it receives to make interest and principal payments on the intercompany loan.  Over time, however, the shell company records substantial excess cash balances that in a real sense represents the parent company's deferred tax obligation. 

If the corporation wishes to repatriate the balances, it can do so through a dividend payment, but that would be a taxable event.  However, teams of tax accountants and lawyers work to come up with other ingenious ways to move cash around, including intercompany lending from the shell company to the parent.  I mention this for several reasons.  First, the repatriation of corporate cash is an issue that arises primarily because global companies have found creative ways to AVOID their tax obligations.  Second, allowing the repatriation to occur in a tax-advantaged manner, as Romney suggests, only gives corporations more reason to continue with the practice.  Third, corporations can find creative ways to return cash to their home operations, but they won't do so until domestic demand increases and requires expansion.  The tax-free repatriation of cash is another example of how conservatives are only interested in supporting corporate and other well-heeled interests and should be flatly rejected.  

Finally, Romney and other conservatives say repatriated dollars will be invested in such a way that it will result in job creation here.  If that's the case, why haven't corporations used the over $2 trillion contained in domestic corporate bank accounts to grow manufacturing?  US corporations are generating tremendous profits due to efficiencies gained through massive layoffs.  They're sitting on those profits and will continue to do so until Americans begin to consume again.  The key to overcoming our economic malaise is not to allow corporations to withhold contributions into the community pot that benefits us all, but to put more cash in the pockets of the middleclass.  It's time corporations pay their fair share. 

January 26, 2012

Economic Externalities

In my last entry, I mentioned that a focus on financial metrics, such as ROI (Return on Investment) and ROE (Return on Equity), can result in a reduction in the quality of our lives.  While transactions that achieve targeted returns lead to the enriching of shareholders, the same transactions can also have a range of impacts on the wellbeing of others.  These impacts can be beneficial, but are often costly. 

This transaction spillover is often called an economic externality.  Some economists define an externality as the result of undefined property rights.  For example, no one owns the air we breathe and so no one bears the burden of its cleanup.  As a result, we pollute it without regard to the costs of our actions.  If we were somehow able to assign ownership rights—legally and otherwise—in a way that requires the owners of the sky to bear the costs of dirty air, they would be far more interested in keeping it clean.  To do so, they would exact a toll on others who use the resource.  In other words, if the sky’s owners were made to cover the costs of pollution (such as medical expenses associated with emphysema, or the costs of restoring coral reefs damaged by acidity) they would, in turn, charge users of the air in a way that would provide a return over incurred costs. 

While air pollution is certainly an example of a negative externality, the issue goes deeper than a lack of ownership rights as we traditionally recognize them.  When a private equity company purchases a plant, for example, it legally acquires the right to do a number of things to the assets it now owns.  The new shareholders can downsize the plant’s operations, move contracted production to offshore facilities, sell off some of its component pieces, and siphon away excess pension assets.  These actions can ring up huge transactional returns, in part, because the shareholders are not made to own the external costs they cause others to bear.  Since the private equity firm doesn’t bear the long-term costs of a worker’s unemployment, for instance, it doesn’t care about the resulting layoffs.  However, someone has to bear such costs.  Who?  Let me mention one: taxpayers who are the eventual payers of unemployment benefits.  In other words, you and I pay for a portion of the return shareholders achieve.    

When investors are allowed to look solely at ROI or ROE in making transactional decisions, they evaluate the potential for personal returns, without considering impacts to society.  This is a mistake.  The costs of transactions can be far-ranging and well in excess of the gains made by a small number of people.  Think, for example, about the multi-million dollar bonuses paid to the developers of mortgage derivatives.  Think also of how those derivatives sunk our economy and caused us to lose a ton of home equity and 401K value.  This explains, in part, why an economic rising tide doesn’t float all boats and can result in huge wealth disparities, the likes of which our nation has been experiencing. 

In fact, the ROI metric, in connection with Wall Street’s focus on quarterly results, is at the center of our nation’s loss of good manufacturing jobs.  What’s incredibly problematic about this is that when manufacturing jobs leave our country, so does manufacturing technology.  We tell China, or India, to figure out how to make things cheaply.  While today they have the advantage of having low-cost workforces, eventually that won’t be the case, but we’ve handed them the ability to ride a manufacturing learning curve that we may never be able to follow.  In short, if we aren’t making things, we’ll forget how things are made, which is another external cost not embedded in our short-sighted ROI metric. 

Perhaps no cost is as ignored and misunderstood as the cost of a bad education.  During government budget discussions, it seems that our schools and teachers invariably get the short end of the stick.  What’s the effect of this?  As I’ve mentioned before, McKinsey and Company estimates that the cost of the black verse white achievement divide alone was as much as $525 billion in lost GDP in 2008.  When we shortchange our children, we incur external costs that few seem to recognize.  It’s delineated not only in lost productivity, but increased incarceration, unwanted pregnancies, heightened drug use and other social costs.  Some people respond to this assertion by saying money doesn’t produce a good education.  But if that’s true, why do the rich put their kids in private schools?  Warren Buffet has been known to say he’d like to eliminate private schools altogether.  By doing so, he reasons, the rich will become part owners of public education and finally be made to contribute to heightened general achievement.  Embedded in this idea are two important implications: 1) What the well-to-do want from public education doesn’t affect them or their families, because they don’t use it and 2) The fact that education has become bifurcated in this country ensures the continuation of a moneyed class. 

So what does all this have to do with a New Christian Ethic?  After Christ’s crucifixion, His followers lived communally and there were no poor among them.  Don’t take my word for that, but read Acts 4:34-35, which tells how the people sold their belongings and distributed their resources according to need.  The historian, Elaine Pagels, describes a remarkable people, who practiced literally Christ’s admonition to feed the hungry, clothe the naked and minister to the sick.  As I’ve mentioned before, when plagues struck cities, they were the few who remained behind to practice charitable acts of service, even though it put them in harm’s way.  I’d love to encourage us all to be as noble, but I don’t think it’s possible—we’re too far gone—but let’s at least look out for what Jesus called “the least of these”, the people who need our help.  That can’t be done by encouraging the continuation of a system that allows the rich to further enrich themselves at the expense of the less fortunate.  

January 23, 2012

The Pursuit of Shareholder Wealth

One of the last deals Drexel Burnham Lambert closed before it was forced into bankruptcy was the debt issuance for a petrochemical company called Rexene Corporation.  The gist of the transaction was this: Rexene issued $500 million in bridge financing that it used to pay a special $7 per share dividend.  Essentially, the company borrowed a ton of money simply to pass the cash on to shareholders.  None of it went for for plant expansion, R&D or any other production purpose.  In terms of a corollary, it was like a man taking out a second mortgage—jeopardizing the well-being of his family—in order to pay for a mistress’s boob job. 

When I heard about the deal in one of our morning meetings, I asked a simple question: Who are the shareholders?  I was treated with disdain for asking it, but I remained persistent.  Finally I was told that 80% of Rexene’s shares were held by three trusts.  As far as I was concerned, that wasn’t much of an answer, either.  Eventually I learned that the primary beneficiary of the trusts was Drexel!  In other words, the investment bank was causing a manufacturer it owned to go into debt—dangerously so, as is evidenced by what happened later—in order to pay Drexel half a billion dollars.  As alarming as that may seem, it gets worse: Within two years, Rexene sought Chapter 11 bankruptcy protection due to its excessive debt load and employee layoffs resulted.  It should also be noted that no part of the transaction was deemed illegal.  It would still be legal today.  In fact, similar transactions occur all the time. 

This is the kind of capitalism that many who wish to protect the interests of Wall Street want to perpetuate.  Why do plants shut down and pension benefits evaporate?  It often happens when someone with a spreadsheet and a mandate to further enrich the moneyed class, recognizes that the breakup value of a company exceeds its stock price.  A process is then put in motion that’s meant to serve only one constituency.  In the search for the last damn buck, Bain Capital and others of its ilk cancel pension benefits in order to raid assets meant to support retired employees.  It’s not capitalism, but a cancer. 

Someone recently left a comment about one my blogs, saying the notion that a rising tide lifts all boats is a truism.  Really?  Well, tell that to the collateral damaged workers of our nation who have suffered most from our lust for efficiency.  Who gains from plant closings that inevitably occur in the holy wake of enhancing shareholder value?  Not the people who lose jobs.  Not suppliers to the plants.  Not the communities that are decimated.  The beneficiary is Wall Street.  Then we add insult to injury by telling the moneyed class that they can pay a lower tax rate on their investment returns than the percent paid by those who’ve lost their working-class jobs.  If we’re experiencing class warfare, the first atomic bomb was dropped by the 1%, who discovered a range of ingenious ways to steal from the middle class and have learned to protect their positions by paying off politicians.

In this context, why would the majority of us vote for anyone who supported such a system?  And why would we trust someone who spent most of his adult life in search of the last damn buck?  I don’t fault people for their successes—unless, of course, their successes came at the expense of others.  No matter how cleverly the process is decorated, it’s theft and only an ignorant public would find it laudable.  There are things more important than Return on Investment that Wall Street can’t be made to understand.  In fact, a maniacal focus on metrics such as ROI and ROE are primary reasons for a decline in the quality of our lives. 

In my next blog, I plan to write about that last point and the problem of economic externalities. 

December 20, 2011

I Have Another Novel Out!

Thanks to those who have purchased my novel, Autumn Run.  Sales have surpassed the publisher's expectations, which has prompted the early release of my second novel, Wall Street Preoccupied.  As the title suggests, it is timely in that it deals with an issue of concern to many who are dealing with the impact of a struggling economy. 

The following is a synopsis of the book.

When his father dies unexpectedly, high-powered investment banker, Tucker Landis, returns to his boyhood home in Cold Dog, Alaska and learns that he has inherited the family business, a salmon packing facility called Inlet Song. Since the plant is essential to the town’s economy, Tucker is caught between his obligations to a community he left years ago and responsibilities at the New York investment bank where he works.

Tucker chooses to manage the plant until he can sell it, but Inlet Song—and the out-of-work call girls who run the butchering line—are almost more than he can handle. Just as he thinks his career on Wall Street has come to an end, he is offered the opportunity of a lifetime, but before he can accept it, Tucker must answer a question posed by the woman he has loved since childhood.

While you’re off in search of wealth, will you settle for position and money instead?