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

Someone recently left a simple anonymous  comment on one of my postings.  It was this:

Thank God, because he'll fix these problems!

Here is my response.

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.  

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. 

The Banality of Evil

I have a book that’s in perfect condition, which is to say it’s tattered and dog eared with many notes in the margins and underlined passages.  Its title is Eichmann in Jerusalem and aside from the New Testament, it has influenced me more than any other book.

It covers, however, the grim topic of the holocaust and is therefore not an easy read.  The author, Hannah Arendt, was a brilliant thinker who tried to answer in its 300, or so, pages the question: How did a relatively well educated and informed German public allow six million of its neighbors to be murdered?  I won’t try to summarize her conclusions, but they are at once insightful and frightening.

The book, of course, is about Adolf Eichmann, who was the man in charge of transporting Jews to their deaths during World War II.  After his kidnapping by Israeli commandos, Eichmann was taken from his hiding place in Argentina and put on trial in Jerusalem.  The hearing was meant to showcase to the world the sufferings of the Jews and the demonic nature of the people who’d caused it.  In the end, however, Eichmann was seen as a pathetic figure, who was only trying to do his job.  In short, he performed a heinous work without ever considering its underlying immorality.  This led Arendt to coin the phrase the banality of evil, as if evil could be so commonplace that it’s unremarkable.  She writes: 

The trouble with Eichmann was precisely that so many were like him, and that the many were neither perverted nor sadistic, that they were, and still are, terribly and terrifyingly normal.  From the viewpoint of our legal institutions and of our moral standards of judgment, this normality was much more terrifying than all the atrocities put together, for it implied—as had been said at Nuremberg over and over again by the defendants and their counsels—that this new type of criminal, who is in actual fact hostis generis humani, commits his crimes under circumstances that make it well-nigh impossible for him to know or to feel that he is doing wrong.

One of the implications of Arendt’s conclusions is that when people are made to think they’re alone in their beliefs, they will adopt what appears to be the prevailing worldview.  People will, in the sad but accurate parlance of today’s youth, go with the flow.  But this can also work in the reverse.  In a few countries—Denmark, for instance—Nazis who were sent to fulfill the terms of the Final Solution changed their views in the face of majority opposition.  In other words, they not only defied orders, but recognized and admitted to the depravity of their goal. 

It’s essential, therefore, that we refuse to go with the flow and hold dear to personal philosophies that are consistent with moral axioms, but let’s not take the Bible in its entirety as a safe standard.  Quite the contrary, the Bible is unreliable as a definition of moral behavior, because it contains both Mosaic and Christian values that are inconsistent in their descriptions of what is Godly.  In some cases the Bible tells us that Godliness incorporates vengeance and anger.  In other passages it requires unconditional forgiveness.  My suggestion, therefore, is to hold Christ’s great commandments as inviolate—no matter what the Bible might say otherwise—and above all else love our neigbors. 

How Christians can do so and still fight against universal healthcare is beyond any logic that I can understand.  Similarly, I don’t see how we can love our neighbors and not support gay men and women in their efforts to express fidelity in marriage.  In this way, by refusing to hold Christ’s great commandments as inviolate, we are as shifting as the tide.  After all, there is nothing more frightening than a human being with evil intent, unless it’s the mass of humanity with no intent at all. 

The Fallacy of $2 Gas

A republican candidate for president recently added to an already confusing political platform the promise that, if elected, he/she would keep gas prices at $2 a gallon.  (I won't mention who made the statement since it would seem like I'm picking on a single individual too much).  It's important, however, to understand the implications of putting such a measure into practice.

If you've ever taken an introductory macroeconomics class, you'll know what I'm about to say.  The fact, however, that someone seeking the highest office in the country doesn't understand the implications of his/her campaign promises is disheartening.

The first point to be made is about the nature of demand as it relates to changes in price.  We as consumers—when all other features of a product are held constant—demand (or purchase) more of the product as its price falls.  The opposite, of course, is true as well: We restrict our purchases as prices rise.  This, I realize, is intuitive, especially to anyone who likes to shop and get a good deal. 

The nature of supply is equally apparent.  As prices rise for a given product, producers want to make and sell more of it as it becomes more profitable to do so.  In contrast, as prices fall, production declines.  This is especially true of oil and other commodities.  In fact, provable oil reserves are generally measured relative to their costs of production.  In other words, as the price of oil rises, the calculation of provable oil reserves increase, because now there is more oil that can be brought out of the ground profitably.

So what does this have to do with $2 a gallon gas?  The effect of enforcing such a policy would be two-fold:

·    Suppliers will restrict production, because they'll no longer make a profit on a portion of their former volume.  In other words, they will drill from only low-cost reserves.

·    Consumers will want to purchase more gas, because it has suddenly become cheap.

The overall result would be gas shortages that could only be dealt with in a few unsatisfactory ways.  One is to simply let the shortages occur and tolerate the long lines and inability to supply gas to the extent it's truly needed.  This would be destructive to the economy and likely require some sort of rationing, as was experienced in the mid-70s. 

Another solution avoids shortages but creates an equally unsettling problem.  The resolution requires the government to purchase gas at the higher market rate and sell it to consumers at the lower enforced rate.  This of course, is government involvement in the extreme and would contribute to a widening budget deficit and a diminishing of strategic reserves. 

And there you have the only two results of implementing, by fiat, a lowering of commodity prices.  We can have shortages, or government intervention that will eventually force consumers to pay through taxation anyway.  Since the proposal came from a Tea Party candidate, I have to assume that either the person has no understanding of fundamental economics, or is willing to say anything to get a few more votes.  If the Tea Party really wanted to help consumers, it would require Exxon Mobile (which paid no taxes in 2010) to pay a fair share and put some of that money in the pockets of the dispossessed. 

Capital Markets Dysfunction

Here is what worries me about our financial markets. 

The public knows more about quantum mechanics than it knows about capital.  This is due, in part, to the way new discoveries are promulgated.  Advances in physics are made in universities, where newly acquired insights are quickly published for the entire world to absorb.  In contrast, new trading algorithms and hedging strategies are developed on Wall Street trading floors—often by physics and math PhDs—where the information is kept confidential and considered trade secrets.  Information, therefore, isn’t disseminated to people who can effect appropriate change.  Let me give you an example.  Remember how the Obama Administration introduced a loan modification program and hoped to prevent six million foreclosures with it?  People who understood how loans are aggregated and placed into CDOs knew it would do little good.  Why?  Because the owners of the loans—those who had the legal right to approve the modifications—were hedge funds that were now bankrupt!

Governments are ill-equipped to evaluate and regulate the investment industry.  This is because of two main factors.  First, as mentioned above, Wall Street deems its trading strategies as proprietary.  They report balance sheet positions in aggregate, but offer few explanations of how risks are mitigated.  Regulators monitor key metrics—such as overall leverage and credit quality—but in the end they can only assume the other risks are being managed well.  More importantly, however, if regulators could understand the complex strategies of the companies they monitored, they could make far more money trading.  In other words, those who can, do, and those who can’t work for the SEC.   

Many senior banking executives lack training in the management of key risks.  Just like a pediatrician may not know much about neurology, a salesperson on the commercial paper desk understands little about mortgage derivatives or other esoteric instruments.  This is a significant problem, because many proprietary traders—those who manage the largest and most problematic balance sheet exposures at investment banks—often leave to run their own hedge funds or eschew promotion to remain in their positions where they can demand compensation packages rivaling that of homerun hitters.  The executives who do get promoted, therefore, usually have little experience in managing complex risks.  That was true at Lehman Brothers, where the top executives had grown up together selling commercial paper.  This least complex of financial instruments is not a place to learn how to mitigate financial risks, and this showed in the management of the company.  I can recall, for example, a meeting with key Lehman executives during which I sought approval for a complex transaction.  By the questions I was asked it was clear the executives didn’t understand the trade, but they gave me approval anyway. 

What should be done?  Well, I believe many things ought to be done to enhance transparency and increase financial literacy, but the key to regulating the industry is to incentivize investment banks to do what is proper.  That isn’t to say they should, in all cases, be allowed to fail.  In fact, if all the recipients of TARP money had gone bankrupt, we’d be scrounging for food and guns to protect ourselves today.  (I’m not kidding.  It would be that bad).  What I suggest is that investment banks be allowed to book trading profits, ONLY after all the liabilities associated with such transactions are extinguished.  That’s how owners treat their businesses.  In fact, a good way to insure appropriate risk-taking is to make employees owners of the firms where they work, so that they’re exposed to both the long-term profits and adverse effects of their decisions.