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.

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 basketball.

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 do. 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 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.

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 only 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 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. 

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.  

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. 

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?

Penn State: Winning Shouldn't Be Everything

I'm going to make a broad assertion that may anger people.  While I was at Drexel Burnham Lambert's Tokyo office, I was often asked to accompany clients on visits with Japanese institutional investors.  In that context, I associated with both billionaires and millionaires and I discovered that there is a startling difference between the two. Millionaires can be lucky and stumble onto substantial net worth and income.  A billionaire, however, can only achieve that kind of wealth by thinking of nothing else but the accumulation of financial assets. Billionaires don't make the Forbe's list by accident.  They get there because it's an all-encompassing need.

That's one of the reasons why I could never buy the argument that Ross Perot, for example, would have made a good president.  People who acquire incredible wealth do so by suppressing the occasional inclination to be a good neighbor.  Exercising compassion requires a detour on the way to achieving financial goals, so no matter how well a person might manage an organization, if he lacks the desire to raise people--all people--above the human condition, he isn't qualified to lead anything that doesn't possess a profit motive.

A corollary can be said, in my opinion, about people who will win at all costs.  The adage that "winning isn't everything, it's the only thing," is possibly the worst lie that evil professes.  Winning isn't the only thing.  In fact, it can be the worst thing when it requires turning a blind eye to pain inflicted on the innocent.  That's what apparently happened at Penn State.  It might be said, therefore, that a decent man sometimes loses--and he does it gladly--in order to uphold standards of morality and to be a good neighbor.  He might not earn any medals or make a ton of money, but he is the real winner.

We All Want the Same Thing

Have you noticed how much the Tea Party and Occupy Wall Street have in common?  Both movements are about disenfranchisement and distrust of those in power.  You would think they’d be working together, but they don’t.  Why?  The reason has to do with their divergent views regarding the government’s role in our lives.  While the Tea Party believes government invariably fails and is best when it leaves people alone, Occupy Wall Street sees government as having a role in regulating and leveling the economic playing field. 

Who’s right?

When I was working for Lehman Brothers, both the U.S. and U.K. governments deregulated their financial sectors in a way that many believed would result in a “Big Bang,” an explosion of availability to cheap sources of capital.  One aspect of the U.S. version was the dismantling of Glass Steagall, which had been in place since the Great Depression and was meant to separate depository institutions, such as banks, from securities firms.  The reason for Glass Steagall was to protect deposits (and depositors) from the high-risk and highly leveraged businesses that investment banks practice.

The result of this deregulation was apparent in the bailout taxpayers were required to endure when the nation’s biggest banks teetered on the verge of bankruptcy.  The effort was deemed necessary when depositories were in jeopardy of sustaining significant losses.  The choice we had was to payoff depositors through the FDIC insurance fund, or bail out the institutions that held the deposits.  Either way, taxpayers were going to fit the bill.  Clearly there had been a role for the government that was missed through deregulation. 

The Tea Party’s desire to drown the federal government in a bathtub will lead to increases in the wealth and influence of the rich and a new Gilded Age.  The history of the Gilded Age was one in which politicians were bought, public resources were sacrificed for the gain of a few, and the interests of the many were trampled upon.  Do we really want to go back to that?  Without a return to sanity, the alternative will be economic collapse, or violent revolution. 

It’s my greatest hope that people forming the two movements making the most headlines today realize that, in many respects, they want the same thing.  Furthermore, I hope they learn to work together to make government (perhaps a smaller government) more responsive to the needs of people, rather than to the interests of corporations, which are amoral and self-interested constructs and not people, at all. 

Occupy Oakland

Today I went to Oakland to visit the site of the Occupy protests.  I went there, in part, to disprove with my own eyes Sean Hannity’s assertions that there was public defecation and sexual assaults occurring there.  Rest assured that Hannity, and not Frank Ogawa Plaza, is full of crap.

The square has been covered with straw and a tent city has been established.  Some of the more noticeable aspects of the gathering include a small library containing a hundred or more books, an area where donated food is cached and prepared for anyone who needs it, and a tent where medical services are provided.  Hand-written placards encourage people to clean up after themselves.  The demonstrators are mostly young, but they fit every demographic imaginable and their reasons for dissatisfaction are also varied. 

Cardboard signs are posted throughout the square.  Yes, they speak of the lack of economic opportunities for mainstream Americans, but they also remind us of the destruction of our environment, the prohibitive cost of education, the war in the Middle East.  Along the perimeter of the square the people have demonstrated their desire for peace in a powerful way: They’ve planted flowers. 

I caught myself hoping that the flowers, like the movement, will be allowed to grow.

One of the protest signs, in particular, caught my eye.  It simply said: Join a credit union.  In recent months the large banks have lost deposits that are now going to credit unions.  I believe this to be a positive development.  When we put cash in a credit union, we're not cutomers.  We're members and part owners of the institution.  As I've said elsewhere in this blog, giving people ownership is an important part of the solution to our economic malaise. 

Responding to Anonymous

In response to a blog I wrote regarding the influence of the rich, Anonymous asked if I was for restricting freedom of speech.  My answer is: of course not. 

I'm all for freedom of speech.  After all, I write this blog in exercise of it.  On the other hand, I object to the ability of CEOs to use corporate funds to influence politicians in a way that is often contrary to the interests of the employees without whom the profits couldn't be possible.  It cannot, to my way of thinking, be moral or ethical and it shouldn't be legal.  If corporate leaders want to influence their regulatory environment so that they can export jobs with impunity, let them use their own personal resources.  They shouldn't have recourse to wealth that a community of workers have pitched in to create in order to further wholly self-interested aims.

Institutionalized Corruption

Here is information made available by the Center for Responsive Politics regarding the connection between political contributions and campaign success.  In each case the numbers reflect the percentage of winning candidates who also raised and spent the most money during their campaigns.

·        In 2004

o   98% of House seats (were won by the candidates spending the most money)

o   88% of Senate seats

·        In 2006

o   94% of House seats

o   73% of Senate seats

·        In 2008

o   93% of House seats

o   86% of Senate seats

·        In 2010

o   85% of House seats

o   83% of Senate seats

The correlation between campaign funding and election success is indisputable—the more money that is raised, the more likely a candidate will be elected.  People like Rush Limbaugh claim this isn’t a problem because money, they say, reflects the popularity of candidates.  However, ever since the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, money can be sourced from deep corporate pockets that are controlled by a small number of individuals who have interests that run counter to that of mainstream Americans. 

There are so many reasons why this is problematic.  Retired Supreme Court justice John Paul Stevens was—and continues to be—critical of the ruling that gave corporations the same freedom of speech granted to individuals and therefore lifted restrictions on the amount of campaign contributions they can make.  As part of his dissenting opinion he said, “The decision is at war with the views of generations of Americans.”  He has since argued that the ruling could afford protection to acts similar to those of Tokyo Rose and the Watergate burglars. 

However, the bigger problem as I see it is that it violates the premise that a person has a single vote.  When corporations are allowed to fund PACs without restriction, it gives powerful CEOs and Board Chairmen the ability to influence a disproportionately large number of votes in a way that could likely run counter to the interests of their employees.  This can result in what many have called institutionalized corruption.  As Fareed Zakaria has recently said:

Special interests pay politicians vast amounts of cash for their campaigns, and in return they get favorable exemptions or credits in the tax code.  In other countries, this sort of bribery takes place underneath bridges and with cash in brown envelopes.  In America it is institutionalized and legal, but it is the same—cash for politicians in return for favorable treatment from the government.  The U.S. tax system is not simply corrupt; it is corrupt in a deceptive manner that has degraded the entire system of American government.  Congress is able to funnel vast sums of money to its favored funders through the tax code without anyone realizing it. 

Please, Tea Party Christians, realize that what your favorite officials are doing to protect corporations is not only bad for America, but reflects the worst kind of corruption.  In light of the recent CBO report on the growing wealth inequality among us, it’s clear that their actions will only line the pockets of the rich and force the middleclass to pay for corporate mistakes.  It will protect the behavior of the CEO of Whirlpool, who acquired a primary competitor, only to close many of its plants and cancel the pension benefits of the people who’d worked there. 

Is that the behavior you want to protect?

Indulgences and the Influence of the Rich

A sad aspect of Christianity’s history occurred during the Middle Ages, when representatives of the church sought money from parishioners through the granting of indulgences.  Essentially, pardoners—armed with mandates to collect alms—promised salvation to those who paid for it.  Indulgences were seen by Martin Luther as the purchase and sale of salvation and as a way to justify acts of great evil.  This was one of the catalysts that ushered in the Protestant Reformation. 

Today we see the practice for what it is—barbaric and based primarily upon greed.  However, future generations will make the same claim about a similar evil among us.  In this nation, where a vast majority of people claim to be Christian, we see political power being bought by the rich, while institutions and processes meant to defend the middleclass are dismantled.  A good example of this is how collective bargaining rights have been restricted in many states, even as the influence of a rich few, like the Koch family, grows in ways that brings them unprecedented access.

Why do Christians tolerate this, when their Savior said, “Inasmuch as ye did it not to the least of these, ye did it not to me”?  Why, in particular, do the Tea Party faithful applaud draconian budget cuts that cause fire fighters and teachers to lose their jobs, even while the richest among us horde the cash they receive through tax savings?

There are two reasons why this occurs.  For starters, we’re not Christian—at least not in the way Jesus taught.  Hopefully you’ve read compelling evidence that supports that view elsewhere in this blog, but it doesn’t help that Herman Cain—who claims God told him to run for the presidency—says, “If you don't have a job and you're not rich, blame yourself.”  Apparently, he believes our primary goal in life should be the acquisition of wealth and shame on anyone who chooses to be a school teacher who’d rather prepare children for life, but can’t keep a job in today’s uneasy economic climate. 

But a notion I’ve only alluded to is nearly as important as an explanation for the inequality in our nation.  We’re witnessing an institutional corruption that mirrors the indulgences practiced in the Middle Ages.  We say our freedom of speech applies to corporations and so we allow them to fund the campaigns of politicians, which they control like an army of ventriloquists’ dummies.  Then we watch while wetlands are destroyed to access a few more barrels of oil.  We allow the wealthiest corporations in the world to report billions of dollars in profit and pay nothing in taxes.  We deregulate an industry that subsequently sells radioactive derivatives to our pension funds in a way that nearly bankrupts us. 

Why do we tolerate this? 

There are ways to take back our nation.  Former Labor Secretary, Robert Reich, has what I think is a great idea.  Quite simply, it’s this: Cause all campaign contributions to be put in a blind trust so that candidates don’t know who their donors are.  This step should reduce the risk of an inequitable quid pro quo. 

God Told Me to Run

When I was a student at BYU, many young men were coming home from missionary service eager to get on with their lives and praying for guidance to find a future marriage partner.  A not-atypical returned missionary—after receiving what he presumed to be an answer to prayer—would go to a young woman and tell her that God had revealed to him that they should marry.  This sometimes resulted in great confusion for the young lady and it happened often enough that the church’s ecclesiastical leaders assured BYU co-eds that they were equally entitled to inspiration before making a decision as important as marriage. 

A corollary to this is the declaration made by multiple presidential candidates that God told them to run for office.  This, I’m sure, will sway many fundamentalists who will accept the assertion as “revealed word” and vote in accordance with it.  However, when it comes to group decision-making, the claim to having received revelation is, in my opinion, a death knell.  This is due, in part, because there is no way to prove the claim and therefore no demands for proof, a condition that leaves little basis for examination.  It’s deemed enough to say, “God told me so.” 

The problem with this, however, is that where there is no examination, there is no debate.  And when ideas aren’t compared and discussed, there is no progress.  Take, for example, the case for global warning: No logic or empirical evidence can sway fundamental Christians from the idea that God gave them dominion over the earth and that if global warming becomes a problem, the righteous can pray it away.  Never mind that this is tantamount to kicking the ball into God’s court.  Never mind that He helps those who help themselves.

This idea was addressed by Harvard physics professor, Lisa Randall, who recently wrote in a Time magazine article, the following:

With science, we put together observations with explanatory frameworks, whose predictions can be tested and ultimately agreed on.  Empirically based logic and the revelatory nature of faith are very different methods for seeking answers, and only logic can be systematically improved and applied.

Combine this idea with the difficulty of reaching agreement on matters of faith and it’s clear that reliance on revelation is dangerous.  There are over 10,000 Christian sects that profess a wide variety of beliefs.  Which of their interpretations of sacred text is correct?  Furthermore, as I’ve pointed out elsewhere in this blog, anyone who thinks the Bible is consistent in its worldview simply isn’t paying attention.  On nearly every important topic of the day, the Bible can be used to support a range of conclusions that leads to moral ambiguity.

When it comes to personal issues, inspiration can be an important part of life.  It is not helpful, however, when directing the lives of others. 

Occupy Wall Street

Most people think the phrase, “It takes money to make money” to be a truism, and in doing so they make apparent their belief that the economic rules regulating our world are rigged.  Statistics seem to prove this view out.  Over the last decade, the wealthy have gotten richer, while the middle-class have lost net worth through diminished home equity and 401K balances.  While many Tea Party members believe this to be unfair, they think our government is part of the problem, and they're so steeped in cynicism that many aim for the dismantling of our government, despite its duty to protect and defend. They cheer when Grover Nordquist says we must drown the government in a bathtub and they fight against nearly all regulation, believing that government is best when it stays out of the way.

Now the same people are criticizing the Occupy Wall Street movement, which protests the economic reality that says the wealthy need not shoulder a commensurate obligation to maintain the nation's well-being.  Why conservatives choose to protect Wall Street interests can only be explained by their need for the campaign contributions big business lavishes on its cronies.  But here's their dilemma: They must either 1) acknowledge that there's something wrong about bankers getting bailed out while regular people get foreclosed upon and do something about it, or 2) argue that the perception is incorrect.  The former will require regulation from a government that they demand to be less intrusive, and the latter can't be advisable, since the belief that our system is corrupt is central to the Tea Party's suspicious worldview.  

I was once a Wall Street banker--in fact, I was one of those guys who used to buy mortgages and turn them into various derivative instruments--but I applaud Occupy's efforts.  We, as a nation, must force corporate leaders to act responsibly and penalize them for reckless behavior that jeopardizes the livelihoods of employees and society in general.  That said, I believe Occupy's endgame is misplaced.  To say the bailout of the nation's largest banks was wrong (and that we should never do it again) is to say we must accept the consequence of a drastic loss of market liquidity and a world-wide economic collapse.  Sure, we could have punished bank CEOs by letting their institutions fail, but would that have been the right course of action for the tellers and other employees who would have lost their jobs, or the borrowers who needed loans?  Would that have been the best thing for an already weak economy that required improved market confidence to operate properly?  

Second, I don't see how charging bank CEOs with crimes will lead to anything good.  I suspect any such effort will cost a lot of money and only demonstrate how poorly judgment had been exercised.  And as far as I know there are no laws prohibiting stupidity.  In a way, shareholders and boards of directors share much of the blame.  They approved our current system whereby a CEO is paid handsomely for taking idiotic risks that happen to work out but won't claw back compensation for decisions that backfire.  In a way, the real problem we face is accounting related.  We need to ensure that when a CEO is paid millions of dollars, the company is clean of hidden liabilities that can come back to haunt it.  In other words, CEOs should only receive significant performance bonuses after the results of their gambling are fully manifest and liabilities associated with risk taking are eliminated.  It would also help if, as is the case for many European companies, boards of directors included employee representatives.  These actions would result in more responsible behavior.  
 
If CEOs want to take huge risks that have the potential of destroying capital, let's tell them to use their own money.

Who Would Jesus Vote For?

Where would Jesus be on the issues of today?

Crime—While Moses would want a tough-on-crimes policy that expanded our current use of capital punishment to cover homosexuals and adulterers, Jesus would want a gentler version of justice based upon forgiveness.

Defense Spending—While Moses would want a strong armed force to be used against our enemies, Jesus would ask us to be peacemakers and refrain from violence by turning the other cheek.  He would have us understand that all people—even those whom our first inclination is to hate—are our neighbors and worthy of our love.

Economic Policy—While Moses would support a system that enriched a chosen few through theft and murder (think of the taking of the Promised Land) not to mention legal chicanery (see the reference to Corban in the gospels), Jesus would ask us to make personal sacrifices in order to feed the hungry, clothe the naked and minister to the sick.

Regulation—While Moses would see arcane regulation as essential to keeping the peace (remember the 613 traditionally defined statutes in Leviticus) Jesus would want a standard of behavior that simply led us to: 1) love God, and 2) love our neighbors.

What Would Jesus Do?

Moral people aren’t conflicted by choices between good and evil.  In a sense, they’ve already made such decisions in advance and know what to do without a second thought.  They realize, however, that life sometimes demands they select the lesser of two evils, or one good over another.  Moral people are tortured, for example, when forced to choose between a personally fulfilling career and more time with family. 

Standing at such a crossroad, many people ask: What would Jesus do?

The implications of the question, however, are seldom considered.  Let’s be honest, what Jesus did is emulated by only the rarest of us.  He forsook the world at an age when most people are seeking material wealth and taught His gospel of love without consideration for “purse or scrip.”  In this way He practiced what He preached, living true to His admonition to neither reap nor sow and to give freely to the poor.  He overruled the Mosaic notion of justice by telling His followers to forgive unconditionally and “judge not,” then He supported the view by reproving those who would punish an adulteress according to the demands of the law.  Jesus understood that justice has little to do with punishment for crimes, but that it refers to doing what is just, which is another way to describe doing what is right.  In that way, He despised the kind of legal wrangling that remunerates lawyers handsomely, but ignores the Golden Rule.  Jesus was also a peacemaker, who would be puzzled today by the violent metaphors used in hymns sung in His honor.  Would the Savior—who told Peter to put down his sword—condone our references to “Christian soldiers, marching as to war”?  Rather, I’m sure He’s horrified by the violent acts committed in His name. 

What would Jesus do? 

Something quite unlike the actions of His mainstream followers.

The Terror of Dominionism

One of the reasons I’m frightened by the religious right stems from the emergence of Dominionism.  Until recently, Dominionist views were considered elements of fanatical fringe groups, but today, with two republican presidential candidates professing links to such organizations, it’s clear that the influence of this philosophy is expanding.  This hasn’t gone unnoticed by the mainstream media, which has begun to write extensively on the topic.

Dominionism takes its mandate from Genesis 1:28, in which God tells Adam and Eve to:

Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.  

Devoted Dominionists, in the words of Time Magazine’s Jon Meacham,

“…believe it their obligation to control (the hard-line term) or influence (the softer version) what are called the ‘seven mountains’ of business, government, media, arts and entertainment, education, family and religion.  The more extreme elements of this movement seek conquest and theocracy.  Others insist they want only to transform the culture into something more in keeping with God’s kingdom of justice and mercy.”

There is a lot to be frightened by this.  If not countered, Dominionism’s desire to transform—which extends even into realms of education and family life—would result in a kind of religious policing typical of some Islamic countries.  But ignoring this obvious incompatibility with the First Amendment’s prohibition on the free exercise of religion (or no religion), an equally disturbing problem is that Dominionism’s version of justice and mercy is based upon the Mosaic Law, rather than Christ’s teachings. 

Influenced by the radical Christian Reconstructionism espoused by RJ Rushdoony, Dominionists seek to replace our legal system with the 613 strictures of Leviticus, including its call for the death penalty to homosexuals.  Its purists also defend slavery.  In reference to the Old Testament’s acceptance of this immoral practice, Rushdoony writes in his Institutes of Biblical Law, “The law here is humane and also unsentimental.  It recognizes that some people are by nature slaves and will always be so.”  He goes on to say, “God’s laws concerning slavery provided parameters for treatment of slaves, which were for the benefit of all involved.”

Ignoring the weighty issues of Dominionism’s single-minded desire for control, my greatest concern is that it completely misconstrues what Christ attempted to accomplish during his ministry, which was to overturn much of the Mosaic Law.  Leviticus was meant to influence its followers to love God and to love God’s children, but it fails in this regard.  Instead, its adherents fear God as vengeful and jealous and, in lieu of brotherly love, it focuses on the intricacies of a law that has no soul or charity.  That’s why, near the end of His ministry—when His rebuke was most strident—Christ loosed His indignation against scribes and Pharisees, hypocrites! likening them to painted sepulchers that were decorous on the outside, but full of filth and decay. 

Class Warfare

To use a football metaphor, conservatives must have called a huddle and settled on a play because they’re all speaking from the same game plan.  In response to President Obama’s proposed tax policy, they say it would provoke class warfare.

Do I understand the implication correctly?  Are they saying that the President’s proposal, which would require millionaires to pay no less than the same tax rate paid by middle-class Americans, would cause serious—possibly even violent—division among us?  If that’s the message, it’s just another example of language rules that disparage by playing into a strong prevailing emotion.  Don’t just say your opponent has misconstrued the facts.  Say he lied, or better yet, say he committed a blood libel! 

The idea that class warfare will result from requiring rich American’s to forgo the myriad tax deductions of which they can avail themselves is laughable.  If anything, it was the Bush-era tax cuts that have caused the kind of class division that has resulted in economic collapse or revolution every time it has occurred in the past.  President Obama said his policy was based upon “math.”  He could also have said it was the fair thing to do.  But I’ll repeat something I’ve said before.  If we’re truly a Christian nation, we’ll seek ways to share in each other’s burdens and the fact is too many corporations and billionaires have been getting off light for too many years.

Conservatives will say tax increases result in job losses.  If that’s true, why did Clinton create an unprecedented 25 million jobs while raising taxes?  And why did Bush create no more than 3 million jobs—the fewest for a two-term president since records were kept—while lowering taxes?  Today, corporations and the rich have pocketed increasingly high after-tax incomes, due partly to our country’s economic policies over the last decade.  According to a report issued by Forbes, the 400 wealthiest Americans—who, by the way, have a combined net worth of $1.53 trillion—saw their personal wealth rise by 12% in 2010.  This happened while the rest of the nation suffered from declining home prices and crushing unemployment.  

The truth is, the rich and their corporate interests are not employing new workers and they will do so only when consumer demand increases, which won’t happen if middle-class Americans are forced to cover a disproportionately high percentage of the national debt.  But that’s only economics.  The bigger issue as far as I’m concerned is this: If you’re a rich Christian, you’ll vote for the privilege of contributing an equitable share toward funding the nation’s financial burden and you’ll demand the money be used for something greater than the building of WMDs.  You’ll hope to achieve our nation’s most noble desires—to feed the hungry, clothe the naked and administer to the sick.  And you’ll do it, in part, because that’s what Jesus has asked of us. 

Our Civil Rights

Here’s a great idea.  Let’s agree that only people who’ve actually read the Constitution be allowed to use the phrase, “my Constitutional rights.”  And while we’re at it, let’s subject the expression “the intent of the founding fathers,” to the same restriction.  The Constitution is, in fact, a lot like the Bible—treasured and often referenced, but universally misunderstood and almost never read.  (Both Bachmann and Boehner have quoted from the Declaration of Independence saying it came from the Constitution).  It’s also similar to the Bible in that many people believe it’s an inspired document that God had a role in developing.  That’s fine, but what distresses me is that nearly everyone thinks the Constitution’s intent is clear, when in fact, just like the Bible, it’s subject to a range of interpretations. 

For example, the 2nd Amendment to the Constitution—part of what we refer to as the Bill of Rights—reads as follows:

A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed.

Short isn’t it?  That’s the whole enchilada and it’s not particularly well written, either.  In combination, these 27 words are often referred to as the right to bear arms, but it’s, at once, both more and less than that.  As is evident from the text, it’s meant to allow local agencies to hire and maintain police forces.  In this way, the amendment was instituted to allow groups of people to use weapons to protect themselves against enemies.  What enemies?  Recall that the founding fathers had just experienced a revolution and were as concerned with the tyranny of a federal government gone astray than with the acts of common criminals and thugs.  And they wanted citizens to have a way to counteract all possible dangers.

That’s a notion that the NRA and fringe survivalists remind us of continually, however, one aspect of the gun rights conversation that never gets mentioned is the question of what constitutes a protective counterbalance to a tyrannical regime?  In a world where the federal government controls an arsenal of nuclear arms, is it constitutional to allow a state—Texas, for example—to develop a hydrogen bomb to counter an effort to prevent it from seceding?  (Now, that’s something for Rick Perry to ponder).

On the other hand, since the Amendment has been defined as a right of individuals—and not just local governments—to bear arms, we don’t have to be talking about the right of a state.  Can a group of polygamists, therefore, buy a black market A-bomb in order to protect its way of life?  I’m sure very few of us would agree to either of these scenarios, however, they both could be seen as consistent with the handful of words that make up the amendment.

It sounds awfully patriotic to talk of God-given rights under the Constitution, but any single definition of what the Constitution means is open to debate.   In the end, an interpretation that might protect one group of people could be devastating to another.