Selective Amnesia of Reagan’s Legacy        

Amazingly and audaciously, the mainstream media and liberal pundocracy has created a narrative that President Obama’s newly found centrism is molded in the inspirational optimism of President Reagan.  This narrative seems confusing, when many liberals excoriate Reagan’s economic policy as the grim reaper of capitalism coming to instill all the inequities of the free market.


Reagan, like the Tea Party, believed heavily in the primacy of the individual over the government and limited self-government constrained by the Constitution.  
Reagan, in his “A Time for Choosing” speech, echoed these sentiments by saying, “A government can't control the economy without controlling people. And they know when a government sets out to do that, it must use force and coercion to achieve its purpose. They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy.”


On the flipside, President Obama in his State of the Union Address enunciated the greater need for “investment” (i.e. government spending and subsidies) wrapped in the rhetorical trappings of American exceptionalism and greatness.   This deceptive rhetoric attempted to mask the policy that undergirded Obama’s State of the Union address which called for more dubious government subsidies for green energy and an increase in spending for high-speed rail boondoggles.  If American citizens were groping and longing for high-speed rail,  wouldn’t it be flourishing by now after nearly 30 years since the French launched their Paris-Lyon TGV line?

 
If there is no demand for these industries, how else can government make them appealing, but by way of force, coercion or wasteful subsidizing hoping to create a market for these currently unwanted and inefficient products?

 
Are we to forget the GM bailout,  Dodd-Frank financial regulation and an intrusive government intervention into our healthcare system?  Do President Obama’s policies even close to matching his own rhetoric in the State of the Union, let alone Reagan’s?


These pontificators may be well-intentioned, but it is more than condescending to attempt to link President Obama with the former President merely based on oratorical flourishes and Reaganesque-style optimism.  Their ideas on the proper function and role of the government stand in stark contrast.


As AEI’s Steven Hayward insightfully notes, Reagan believed that modern liberalism unequivocally left him.  

Reagan's invocation of Paine, as well as his quotation of John Winthrop's "City upon a Hill" sermon, expresses the core of his optimism and belief in the dynamism of American society, a dynamism that can have unconservative effects. But he explained his use of Paine in conservative terms way back in his 1965 autobiography, Where's the Rest of Me? "The classic liberal," Reagan wrote, "used to be the man who believed the individual was, and should be forever, the master of his destiny. That is now the conservative position. The liberal used to believe in freedom under law. He now takes the ancient feudal position that power is everything. He believes in a stronger and stronger central government, in the philosophy that control is better than freedom. The conservative now quotes Thomas Paine, a longtime refuge of the liberals: 'Government is a necessary evil; let us have as little of it as possible.'"

Maybe It is time for President Obama to return to some of Founder's writings in order to rediscover his inner centrism.  He can begin with Thomas Paine.

 


          Will Wilkinson & Brian Doherty        
Brian's new book, Radicals for Capitalism ... Are libertarians right wing? ... Ayn Rand: lukewarm cold warrior ... Self-actualization, the me decade, and survivalism: brought to you by libertarians? ... Did free marketers free the slaves? ... Modern American libertarianism ...
          John Tamny Joins FreedomWorks' New Center for Economic Freedom        

FreedomWorks today announced that John Tamny will join FreedomWorks and serve as the director of the organization’s Center for Economic Freedom.

The Center for Economic Freedom will have a special focus on promoting policies that get government out of the way and allow Americans to keep more of what they earn, while highlighting the dangers of overregulation and protectionism.

John Tamny will lead the Center for Economic Freedom. John has been the political economy editor at Forbes and the managing editor at RealClearMarkets since 2002. He is an author of two books related to his specialization in economics: Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You about Economics (Regnery Publishing, 2015) and Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016).

Among other projects, John will begin his time at the Center for Economic Freedom with a weekly Facebook Live called “Not Fake News” to highlight the very real facts about what our federal and state governments are doing to slow our economy and dampen American entrepreneurship.

“John is a brilliant mind and seasoned expert in his field, and we are excited to have him working with us to promote economic freedom,” said FreedomWorks President Adam Brandon. “He is a great addition to our already stellar team, helping us to spread our message for free markets and limited government even further.”

John Tamny said, “FreedomWorks expertly enhances the terms of the U.S. policy discussion, and in doing so is constantly changing the course of policy in Washington for the better. I'm thrilled to add my voice to an organization that is on any short list of Washington's most influential.”

“In the coming years, I'll be publishing various books and hundreds of opinion pieces meant to expand FreedomWorks' already substantial voice. The fight for economic freedom is of singular importance, and I'm excited to be a part of an organization that will continue to advance these freedoms,” Tamny added.


          In Defense of Economic Noninterventionism         

A recent Wall Street Journal article has surprisingly good news: US companies are seeing the highest profit growth in two years with “two consecutive quarters of double-digit profit growth for the first time since 2011.” This surprisingly comes not from policies pursued in Washington, but the hard work of the private sector.

The fact that businesses and job creators can make such a phenomenal showing after years of regulatory uncertainty and continued political intervention reminds us of the power of the free market and that the best successes come from the work of the individuals, not collectivists in the public sector.

Perhaps the best reminding of what the last eight years brought us was President Obama’s infamous 2012 campaign speech “If you've got a business, you didn't build that.” Throughout the course of his administration saw a creation of routine legislative and executive actions that were designed to both micromanage business and supposedly “create” jobs. Unfortunately, none of this had the intended success.

Most prominently among the actions from the executive administration while Obama was presidents include significantly increased regulations. Among these have included the Waters of the United States Rule (WOTUS), Dodd-Frank, the stimulus package, and, most spectacularly of all, Obamacare. All of these added a large interventions and onerous barriers in the economy that failed to achieve their stated goal.

WOTUS was probably one of the greatest power grabs by the EPA in recent history. The rule essentially sought to define “navigable waters” in the clean water Act which “brought nearly half of Alaska and a total area in the lower 48 states equivalent to the size of California under the CWA’s jurisdiction.” The proposal, had it not been blocked and rescinded, would have cost thousands of dollars for permits on land that was not previously under the EPA’s jurisdiction, delayed production since a permit can take up to months, and this would have resulted in reduced development and production as well as higher prices.

Though the WOTUS rule was not fully implemented, regulations that did have a massive negative impact on the economy include the Dodd–Frank Wall Street Reform and Consumer Protection Act.

As implemented, Dodd-Frank imposed various new regulations on the financial sector, including creating the Consumer Financial Protection Bureau (CFPB), designated firms as systemically important financial institutions (SIFIs), and instituted price controls on debit and credit card transactions. The result was a climate of over regulation with banks being incentivized to become as large as possible in the hopes of being bailed out while the CFPB became a revolving door for lobbyists and influence peddlers to regulate the market with little to no oversight.

Unsurprisingly, one fifth of the banks in the U.S. banks, totalling 1,708, went under between the law’s creation and 2016, which is about one per day, and by 2015 five large banks controlled 50 percent of the banking industry.

Outside of simple regulation, there was also so called “jobs creations” programs that were supposed to create jobs the President did not think businesses could such as the stimulus package. The program was sold as a job creation plan that would keep unemployment below 8 percent for the low price of $830 billion.

The next four years were marked by above 8 percent unemployment while the money ended up being wasted on worthless projects, including trees in wealthy neighborhoods, a study of erectile dysfunction, and the failed company solyndra which was run by a bundler for the Obama campaign. To make matters worse, though unemployment eventually went down long after the stimulus’s implementation, the labor participation rate reached its lowest in 38 years which shows that people still weren’t working.

However, the crowned jewel of overregulation and job destruction during the Obama administration was ObamaCare. Implemented to expand health insurance coverage, it has repeatedly failed to reach its goals as premiums went up, enrollment failed to reach its projections, and the legislation gave corporate welfare (including promised bailouts) to the insurance lobby. In the end, most of the coops failed and major companies pulled out of the exchanges, resulting in 1,000 counties, including five whole states, only having one insurer, a major failure in the goal of expanded coverage.

Inevitably, the phenomenal intervention in the economy by President Obama failed to achieve the job creation while it instead made made doing business that much harder. With record breaking numbers of regulations, Obama was the first President since the Great Depression to never see 3 percent GDP growth.

The Trump administration in the meantime has pursued a different approach than its predecessor. The Trump administration has seen sixteen regulations cut for every one it has created, had signed four resolutions of disapproval under the Congressional Review Act to overturn regulation within two months as President, and rolled back the clean power plan which could have cost $40 billion per year. All of this marks a significant change in policy that will greatly open up business opportunities and expand economic growth.

However, policy alone does not explain why there has been high profit growth for the last two quarters. As the Wall Street Journal article admits, health care legislation and tax reform have been stalled in the senate. This has caused a climate of uncertainty which businesses have not been happy with.

Nevertheless, they have instead moved on from Washington and instead remained focused on doing business. Political events seem to have taken a backseat to actual business as the number of S&P 500 companies have mentioned the President or his administration during conferences is down by a third as the research firm Sentieo found out. To be blunt, the involvement of Washington and government policy is not driving the current profit growth and the lack of involvement may actually be increasing it.

For a better example of how reduced involvement can improve the economy, look no further than the Depression of 1920. At the time, war time debt had exploded, unemployment peaked at 11.7 percent in 1921, and inflation rates jumped above twenty percent. It had the potential to be even more catastrophic than the Great Depression that started in 1929.

However, the policies pursued were entirely different. The federal budget was severely reduced from $18.5 billion in FY 1919 to $3.3 billion for FY 1922. Taxes at the same time were cut by about 40 percent.

As a result, unemployment dropped to 2.3 percent by 1923 and a crisis had been averted. This was accomplished not by bailouts and and overregulation but by getting the government entirely out of the way. This is a radically different approach than was pursued during the financial panic of 2008 or even the Great Depression.

Overall, there has been a repeated belief that government involvement has made economic advancement harder. As was stated by former President Reagan, “Government is not the solution to our problem; government is the problem.” President Kennedy noted the same when he said “Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort — thereby aborting our recoveries and stifling our national growth rate.”

It should come as no surprise then that business are fully prepared to run their own affairs and is best capable to address its own need, for as JP Morgan Chase CEO Jamie Dimon noted, “We’ve been growing at 1.5% to 2%...because the American business sector is powerful and strong and is going to grow regardless.”

It remains the desire of others that the government should intervene in the economy to make improvements. However, this has always resulted in guaranteed failure. Be it raising the minimum wage in Seattle or increased taxation and regulations in Connecticut, the result is usually lackluster growth and decreased jobs. At the national level, Venezuela’s nationalization and China’s increased infrastructure projects have created the same results, which is to say none.

As history and current events have shown time and time again, the best results come not from government involvement and micromanagement, but from the hard work of free individuals in free markets. More and more, the adaptability of businesses to their consumer’s demands and their ability to whether adversity in the marketplace has always been more efficient than the micromanagement the state perceives. As a result, sometimes the best thing to do is to have the government do nothing so that those who can make the economy better will.


          Support the CREATES Act, S. 974 and H.R. 2212        

On behalf of FreedomWorks’ activist community, I urge you to contact your representative and ask him or her to support the Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act, S. 974 and H.R. 2212. This bill would lower prescription drug prices by crushing illegal, anti-competitive, and monopolistic practices by the biggest pharmaceutical companies.

Prescription drug prices have soared above general inflation rates for years, a telltale sign of lacking producer competition. Large moneyed pharmaceutical companies abuse a loophole in the FDA Amendments Act of 2007 that allows them to bar potential competitors from entering the market. They do this by refusing to provide drug samples and safety information that new producers need for medical research required in the FDA approval process of generic drugs.

Without these samples and safety procedures, new producers never earn FDA approval. Meanwhile, existing producers establish monopolies and hike prices.

This especially harms the emerging market for “biosimilars,” innovative remakes of biologic drugs. Biosimilars are often much cheaper to produce than name-brand biologics, reducing costs for millions of Americans.

The CREATES Act would grant relief in court for generic and biosimilar competitors seeking FDA approval. This would clear the pathway for new drugs to enter the market, drastically reducing prices through increased competition. The cost savings stemming from this legislation could reach between 15 percent and 50 percent of current prices for impacted drugs.

Such legislation would reduce both the federal deficit and national debt. Decreasing prescription drug costs would lessen the financial burden on Medicare, saving taxpayers up to $5 billion annually.

As you know, FreedomWorks fights for free markets and smaller government. The CREATES Act would lead to a freer market, less cronyism, and cheaper medication. For these reasons, I urge you to contact your representative and ask him or her to support the CREATES, S. 974 and H.R. 2212.

Sincerely,

Adam Brandon, President, FreedomWorks


          It's Not Libor Stupid, Central Banks Are The Problem        
So, here’s why the bad news for the central bank (encouraging, no, make that, demanding fraud) is really good news for free markets.
          The worst product ever marketed        
SUBHEAD: Eventually we learn what's the good way to do things. Too bad that it is almost always too late.

By Ugo Bardi on 30 July 2017 for Cassandra's Legacy -

(http://cassandralegacy.blogspot.com/2017/07/what-is-worst-product-ever-marketed.html)


Image above: Detail of Bic advertisement celebrating the 40th anniversary of the introduction of the Bic lighter.  From original article.

Greens often exaggerate in inviting people to save energy and be happier by staying in the dark and eating insects. However, it is also true that sometimes wastefulness goes a few notches higher and becomes truly a scandal. It is the case of the ordinary disposable lighter.

Bic alone produces almost a billion lighters per year and has produced some 20 billions of them in the past 30 years. The whole world production is probably of a few billion per year. A good example of a successful product, but is it a good product?

The disposable lighter is surely practical but also, if you think about it, a very bad deal. It contains some 5 cc of butane, that you pay, typically, more than $1. That means around $200 per liter, or $800/gallon.

You wouldn't be happy to pay that kind of money when you refill the tank of your car. And, being powered by a fossil fuel, butane, every time you light up one you add some CO2 to the atmosphere, some of which will stay there for tens of thousands of years.

Then, the disposable lighter doesn't contain just non-renewable fuel but plastics manufactured from fossil fuels and also polluting. Then, it contains metals such as cerium, lanthanum, neodymium, praeseodymium and more.

These metals are classified as "rare earths;" they are not so rare as the name seems to imply, but they are not so common, either. And the lighter is thrown away after use and it will never be recycled. The rare earths it contains will be lost forever.

Is all that enough to qualify disposable lighters as "the worst product ever marketed"? Well, everything can be questioned, but if you line up the characteristics of a bad product as;
  1. uses rare and non-renewable resources, 
  2. is not recycled and not supposed to be recyclable, 
  3. is manufactured on a large scale, 
  4. it has non-polluting and less expensive alternatives, there are few examples other than lighters for which you can tick all the four boxes.
I can hardly think of anything so wasteful to set something on fire, no matter whether you are a professional arsonist or simply an ordinary smoker.

After all, what was so wrong with using the old matches? Matches contain only recyclable materials: wood, paper, phosphorous, sulfur. I can't see anything that can be done with a lighter that cannot be done with a match, except that a lighter can burn steadily for a longer time.

But if your purpose is to light up a cigarette or a kitchen burner, it makes no difference. And, by all means, there is no way that a lighter would cost less than a match, at least if manufactured on a comparable scale.

So, disposable lighters are all an example of how a combination of financial factors and government regulations can push a bad product to dominate the market. It is, after all, what has happened with fossil fuels, still gathering large government subsidies, despite the damage they are doing to all of us.

In the case of lighter vs. matches, the playing field has been made unfavorable to matches from the beginning, because they have been traditionally taxed by governments (also lighters, in some cases, but not always).

Add to that the rapid expansion of the cigarette market during the past decades, with some six billion cigarettes sold worldwide every year, and growing, some large companies saw their chance.

They engaged in the large scale manufacturing of lighters and they crushed the match manufacturers, mainly small companies that couldn't match (indeed!) the financial power of large corporations.

The advertising power, too, played a big role, with the appeal of colored and fashionable items that could also be collected. And it was world domination for the disposable lighter.

Could we reverse this demonic trend? Maybe there are signs of an inversion of the tendency and, not long ago, I saw again courtesy matchboxes appearing in an Italian Hotel.

Maybe it was because finally (in 2015) the Italian government decided to abolish the tax on matches, a good idea that, unfortunately, arrived at least 50 years too late (the French Government did that in 1999).

Whatever the case, it is high time that someone realizes that some ideas, such as disposable lighters, are evil to the bone. And that the mythical "free market" cannot turn evil into good.

But maybe you think that the old matches are passé? In this case, we have technologies for getting rid of the obsolete propane lighters without having to get back to the somewhat primitive matches. For instance, we have spark lighters that use only electricity.

They are a solid state alternative to propane lighters in the same way as photovoltaic energy is a solid state alternative to fossil energy. In the picture, you see one of these super hi-tech lighters in the hands of my daughter, Donata.


Image above: Donata Bardi holds solid state spark lighter.  From original article.

So, eventually, we learn what's the good way to do things. Too bad that it is almost always too late.

.

          New Chapter: Technical Manager        
Up to £50,000 + benefits package: New Chapter: Exciting free-from goodies need exciting Technical Support The UK retail gluten free market is currently worth up to 200m and shows no sign of slow... East Midlands Region
          President Barack Obama 2013 Inauguration Speech        
2013 Presidential Inauguration Day - Preparati...
2013 Presidential Inauguration Day - Preparation - Capitol Building (Photo credit: Glyn Lowe Photoworks)





Today President Barack Obama gave what will be known as a historic speech as far as LGBT Americans are concerned. It was the first time the word gay was used in an inaugural speech and it was used to speak about the need for equality. I was happy that my daughter was there in D.C. to hear her President speak so positively about her family. It was an amazing speech that drew on the fact that it was given on Martin Luther King, Jr. Day and made comparison to the civil rights struggles, women's rights and rights for gay Americans. It will be exciting to see how this sets up the State of the Union address and this coming session of Congress. While I believe the President will not do the work for us, he may be willing to be a more active advocate for us. But, I do believe that this President likes to see the American people involved in the process. He wants to see us use our voices and do everything we can to be heard and help to move our elected officials to take action. We must continue to lead this fight. However, the President is clearly in our corner.

Watch the President's speech. Full transcript follows the video




The remarks of President Obama, as released by The White House and prepared for delivery: 
Vice President Biden, Mr. Chief Justice, Members of the United States Congress, distinguished guests, and fellow citizens: 
Each time we gather to inaugurate a president, we bear witness to the enduring strength of our Constitution. We affirm the promise of our democracy. We recall that what binds this nation together is not the colors of our skin or the tenets of our faith or the origins of our names. What makes us exceptional — what makes us American — is our allegiance to an idea, articulated in a declaration made more than two centuries ago: 
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the pursuit of Happiness." 
Today we continue a never-ending journey, to bridge the meaning of those words with the realities of our time. For history tells us that while these truths may be self-evident, they have never been self-executing; that while freedom is a gift from God, it must be secured by His people here on Earth. The patriots of 1776 did not fight to replace the tyranny of a king with the privileges of a few or the rule of a mob. They gave to us a Republic, a government of, and by, and for the people, entrusting each generation to keep safe our founding creed. 
For more than two hundred years, we have. 
Through blood drawn by lash and blood drawn by sword, we learned that no union founded on the principles of liberty and equality could survive half-slave and half-free. We made ourselves anew, and vowed to move forward together. 
Together, we determined that a modern economy requires railroads and highways to speed travel and commerce; schools and colleges to train our workers. 
Together, we discovered that a free market only thrives when there are rules to ensure competition and fair play. 
Together, we resolved that a great nation must care for the vulnerable, and protect its people from life's worst hazards and misfortune. 
Through it all, we have never relinquished our skepticism of central authority, nor have we succumbed to the fiction that all society's ills can be cured through government alone. Our celebration of initiative and enterprise; our insistence on hard work and personal responsibility, are constants in our character. 
But we have always understood that when times change, so must we; that fidelity to our founding principles requires new responses to new challenges; that preserving our individual freedoms ultimately requires collective action. For the American people can no more meet the demands of today's world by acting alone than American soldiers could have met the forces of fascism or communism with muskets and militias. No single person can train all the math and science teachers we'll need to equip our children for the future, or build the roads and networks and research labs that will bring new jobs and businesses to our shores. Now, more than ever, we must do these things together, as one nation, and one people. 
This generation of Americans has been tested by crises that steeled our resolve and proved our resilience. A decade of war is now ending. An economic recovery has begun. America's possibilities are limitless, for we possess all the qualities that this world without boundaries demands: youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention. My fellow Americans, we are made for this moment, and we will seize it — so long as we seize it together. 
For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America's prosperity must rest upon the broad shoulders of a rising middle class. We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship. We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American, she is free, and she is equal, not just in the eyes of God but also in our own. 
We understand that outworn programs are inadequate to the needs of our time. We must harness new ideas and technology to remake our government, revamp our tax code, reform our schools, and empower our citizens with the skills they need to work harder, learn more, and reach higher. But while the means will change, our purpose endures: a nation that rewards the effort and determination of every single American. That is what this moment requires. That is what will give real meaning to our creed. 
We, the people, still believe that every citizen deserves a basic measure of security and dignity. We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future. For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn. We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few. We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other — through Medicare, and Medicaid, and Social Security — these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.
We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries — we must claim its promise. That is how we will maintain our economic vitality and our national treasure — our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That's what will lend meaning to the creed our fathers once declared. 
We, the people, still believe that enduring security and lasting peace do not require perpetual war. Our brave men and women in uniform, tempered by the flames of battle, are unmatched in skill and courage. Our citizens, seared by the memory of those we have lost, know too well the price that is paid for liberty. The knowledge of their sacrifice will keep us forever vigilant against those who would do us harm. But we are also heirs to those who won the peace and not just the war, who turned sworn enemies into the surest of friends, and we must carry those lessons into this time as well. 
We will defend our people and uphold our values through strength of arms and rule of law. We will show the courage to try and resolve our differences with other nations peacefully — not because we are naïve about the dangers we face, but because engagement can more durably lift suspicion and fear. America will remain the anchor of strong alliances in every corner of the globe; and we will renew those institutions that extend our capacity to manage crisis abroad, for no one has a greater stake in a peaceful world than its most powerful nation. We will support democracy from Asia to Africa; from the Americas to the Middle East, because our interests and our conscience compel us to act on behalf of those who long for freedom. And we must be a source of hope to the poor, the sick, the marginalized, the victims of prejudice — not out of mere charity, but because peace in our time requires the constant advance of those principles that our common creed describes: tolerance and opportunity; human dignity and justice. 
We, the people, declare today that the most evident of truths — that all of us are created equal — is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall; just as it guided all those men and women, sung and unsung, who left footprints along this great Mall, to hear a preacher say that we cannot walk alone; to hear a King proclaim that our individual freedom is inextricably bound to the freedom of every soul on Earth. 
It is now our generation's task to carry on what those pioneers began. For our journey is not complete until our wives, our mothers, and daughters can earn a living equal to their efforts. Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law — for if we are truly created equal, then surely the love we commit to one another must be equal as well. Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote. Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity; until bright young students and engineers are enlisted in our workforce rather than expelled from our country. Our journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia to the quiet lanes of Newtown, know that they are cared for, and cherished, and always safe from harm. 
That is our generation's task — to make these words, these rights, these values — of Life, and Liberty, and the Pursuit of Happiness — real for every American. Being true to our founding documents does not require us to agree on every contour of life; it does not mean we will all define liberty in exactly the same way, or follow the same precise path to happiness. Progress does not compel us to settle centuries-long debates about the role of government for all time — but it does require us to act in our time. 
For now decisions are upon us, and we cannot afford delay. We cannot mistake absolutism for principle, or substitute spectacle for politics, or treat name-calling as reasoned debate. We must act, knowing that our work will be imperfect. We must act, knowing that today's victories will be only partial, and that it will be up to those who stand here in four years, and forty years, and four hundred years hence to advance the timeless spirit once conferred to us in a spare Philadelphia hall. 
My fellow Americans, the oath I have sworn before you today, like the one recited by others who serve in this Capitol, was an oath to God and country, not party or faction — and we must faithfully execute that pledge during the duration of our service. But the words I spoke today are not so different from the oath that is taken each time a soldier signs up for duty, or an immigrant realizes her dream. My oath is not so different from the pledge we all make to the flag that waves above and that fills our hearts with pride. 
They are the words of citizens, and they represent our greatest hope. 
You and I, as citizens, have the power to set this country's course. 
You and I, as citizens, have the obligation to shape the debates of our time — not only with the votes we cast, but with the voices we lift in defense of our most ancient values and enduring ideals. 
Let each of us now embrace, with solemn duty and awesome joy, what is our lasting birthright. With common effort and common purpose, with passion and dedication, let us answer the call of history, and carry into an uncertain future that precious light of freedom. 
Thank you, God Bless you, and may He forever bless these United States of America.




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          Libertarianism is not traditionalism 2        
I published a post a few days ago on the Cato Institute, a leading libertarian organisation. I was therefore interested to find this in my Twitter feed:



Libertarians, like other right-liberals, look to the free market to regulate society. They believe that this is the engine of human progress. Hence the following quote:
"Capitalism reduces the oppression of traditional societies that impose hierarchies of gender and caste,” writes Cudd, because embedded within market exchange itself is the idea that each individual should be free to pursue her self-interest.

So there you go. The Cato Institute approves a model of society in which there are simply individuals in pursuit of their own self-interest (in particular their economic self-interest).

To a traditionalist this is a model of society that is not only ultimately unworkable, but that also has too limited a view of individual life. Are we really just atomised individuals in pursuit of our own individual profit? Is that what defines us as humans? Are men and women simply interchangeable units within a system of production and consumption?

Capitalism, as an economic system, should not define what humans are. Nor should it define our concept of society. Nor our understanding of the roles of men and women in society.

Does anyone really believe that if we tell young men and women that the highest good is to pursue their own individual self-interest that we will arrive at successful relationships between men and women? Stable families? High levels of trust between the sexes? A commitment to raise children successfully?

Capitalism alone cannot create a good society. It's necessary to keep to those traditional values and institutions that cohere or successfully order a society and which express deeper truths about man, community, belonging and identity.

The one good thing to draw from the Cato tweet is that it reminds us of what to look out for. Perhaps it is, in fact, true that a market system encourages the idea "that each individual should be free to pursue his or her self-interest." This idea goes back a long way in Western political theory - it brings to mind the view of man and society of John Locke in the late 1600s. It is likely that men made wealthy in the market will be attracted to the idea and give patronage to those holding it. But wherever and whenever it arises it needs to be vigorously opposed.
          Cato libertarians take a step to the left        
The Cato Institute is a leading libertarian organisation in the U.S. The Institute recently published a significant article about race. It's fascinating to read because it shows the logic of how left-liberalism developed out of classical/right-liberalism.

But I need to quickly set the scene for this. All forms of liberalism begin with the idea that what matters is a freedom of the individual to be autonomous: to have the liberty to choose to be or to do whatever, as long as it does not limit a similar liberty for others to choose to be or to do whatever.

But this raises the question of how a society of atomised, autonomous individuals each seeking their own subjective good can be successfully regulated. Although there is no single answer given by liberals, the dominant form of liberalism in the mid-1800s, classical liberalism, emphasised the idea that the market could best regulate society. Millions of individuals could participate in the free market, each seeking their own profit, but the hidden hand of the market would ensure that the larger outcome was a positive one for society.

So what went wrong? The classical liberals would say that as long as everyone had an equal opportunity to participate in the market, then everyone had an equal human dignity as an autonomous individual.

But in the later 1800s this was queried. If I am poor and uneducated do I really have the same opportunity in the market as someone who is born to private schools and so on? The new liberals thought that there needed to be a greater role for government intervention to overcome institutional disadvantage.

And so the modern left emerged. For decades there has been a right-liberal party which emphasises markets (Republicans, Tories etc.) and a left-liberal one which emphasises government programs to overcome inequality (Democrats, Labour etc.). Libertarians have mostly been purist right-liberal types, pushing for limited government, markets, and liberty understood as individual autonomy.

So it is no surprise that the Cato Institute piece on race begins as follows:
Libertarians tend to think of freedom as either a means to an end of maximum utility—e.g., free markets produce the most wealth—or, in a more philosophical sense, in opposition to arbitrary authority—e.g., “Who are you to tell me what to do?” Both views fuel good arguments for less government and more personal autonomy.

That's exactly what you would expect from someone on the liberal right. Autonomy, free markets, limited government, freedom. But look at what happens next:
Yet neither separately, nor both taken together, address the impediments to freedom that have plagued the United States since its founding. Many of the oppressions America has foisted upon its citizens, particularly its black citizens, indeed came from government actors and agents. But a large number of offenses, from petty indignities to incidents of unspeakable violence, have been perpetrated by private individuals, or by government with full approval of its white citizens.

You can tell what this is leading up to. It's leading up to the left-liberal idea that there are institutional, systemic barriers to equal participation. That disparities in outcomes are to be explained in terms of institutional oppression, racism and systemic discrimination. And that's exactly where the Cato writer goes:
Take, for example, the common libertarian/conservative trope: “We believe in equal opportunity, not equal outcomes.” Most people, outside of the few and most ardent socialists, should believe that is a fair statement. But to say such a thing as a general defense of the status quo assumes that the current American system offers roughly equal opportunity just because Jim Crow is dead. Yet, that cannot possibly be true.

Think of the phrase “Don’t go there, it’s a bad neighborhood.” Now, sometimes that neighborhood is just a little run down, doesn’t have the best houses, doesn’t have the best shopping nearby, or feeds a mediocre school. But, more often, that neighborhood is very poor, lacks decent public infrastructure, suffers from high unemployment, has the worst schools, and is prone to gang or other violence. And, in many cities—in both North and South—that neighborhood is almost entirely populated by minorities.

There are only two conclusions possible when facing the very real prospect that thousands or millions of Americans live in areas you warn your friends not to go, even by accident: Either everyone in those areas is a criminal, or is content to live among and be victimized by criminals; or there is some number of people, and probably a large one, trapped in living conditions that cannot help but greatly inhibit their opportunities for success and advancement.

He goes on at length about racism and white supremacy and how the Federal Government has helped to overcome this more than markets have. He stops a short of endorsing big government solutions, but you can see how the logic of his argument prepares the ground for this.

The mainstream left and right are not so different from each other. They both exist within the same philosophical framework, sharing the same assumptions about what human life is for. Mainstream leftism is an attempt to perfect the liberalism that came before it, to realize it in a more equitable and consistent way.

The challenge for those who dislike what the modern West has become is to step outside of the liberal framework entirely - to be neither of the left nor of the classical liberal/libertarian right.
          Fair Trade Coffee        

So while I was trekking the Twin Cities looking for the best coffee houses I kept running into signs advertising for "Fair Trade Coffee." Time to de-mystify that term.

Lets start with a definition of fair trade. Fair trade is an organizational process undertaken by many in the agricultural industry to promote a fair price for raw goods. The general philosophy is to help protect the interests of smaller producers that tend to be marginalized by global companies. Fair trade has grown to become a booming multi-billion dollar industry that grew by 47% year after year (once it caught on that is). Most would argue that success is indicative of the poor times that were experienced by produces prior to organization. While its difficult to surmise what a "fair" price really is in a mostly free market economy, one must admit that fair trade has become something of a marketing phenomenon.

Now lets turn to coffee. Coffee is an agricultural product. As with most ag products, it is raised largely by independent owners and purchased by (in coffee's case) roaster co-ops, speculators, and investors as a commodity. Growing up as a dairy farmer, I can tell you that the economics of supply and demand don't work out very well on a farmer-by-farmer basis. Typically the middle man makes the most money. That could be anyone from a speculator on the New York Mercantile Exchange to Starbucks.

Then, lets combine the two. Fair trade coffee originated with a Dutch company by the name of Max Havelaar Foundation. It was a labeling campaign, meant to enlighten coffee drinkers to the plight of the small time coffee farmer. Well its introduction was of tremendous success, so much so that today, major coffee lines are beginning to carry Fair Trade coffee. Even independent research has shown that fair trade coffee, which seeks to give farmers a negotiated pre-harvest price, has improved the lives of many farm families.

In essence Fair Trade coffee doesn't taste better (necessarily), it isn't better for you, but it may be better for the farmers producing it and that may be a humanitarian effort worth backing.

Ironically, in these hard times one of the first pieces of financial advice is to cut down on consumption (which further depresses markets, leading to a tail spin effect...roughly speaking). One of those items on the cutting board is the $6 Turtle Mocha each morning before work. How do you reconcile that price with poor farmers? The answer is obvious once you know it. The farmers don't get the bulk of that money. In fact, most of that cash is made off of greedy speculation - essentially paper trade. Little if nothing has to do with the actual coffee, the roaster or the Batista that serves it. A lot has to do with selling short and buying long in the commodities trade.

What then is the compromise? How can I look out for my fellow global citizen without breaking the bank? You can certainly look for the fair trade label on products and begin brewing a cup or two of coffee each morning. That will save a ton off the "half-caf, no whip, mocha latte with soy" that essentially is coffee with soy milk and a little cocoa powder. Try it out, you may be surprised how easy it is to get your own self-brewed cup of fantastic coffee.

Now you can ask the question "Is this fair trade?" not for the sake of sounding vogue, but for the sake of helping out a small coffee farmer somewhere in the world.
          Internet Marketing Solutions to Take You to the Next Level        
It really is of little importance, how you go about promoting your business. There is a wide array of methods for you to advertise using paid and free marketing. Article marketing, and forum posting are two very effective advertising methods. The potential of social networking sites, like Facebook, and Twitter, should not be ignored.

Next on the list for internet marketing solutions to help you succeed online is the use of video and audio. The days when it was possible to get away with content only are gone. Enhancing your website will increase your income. Video is taking over the internet as it offers people a new way to experience the information presented. Videos and audio components are essential to keep up with Today's competition.

To improve the exposure of business, webmasters decided to opt for a new and reliable online marketing solution. Many internet-marketing strategies help to expose you towards a strong competitor for other rivals and to make you popular in the world of Internet. Online marketing solutions focus mainly towards drawing targeted traffic to the web sites. Often, Internet marketing solutions need to include effective ways to improve the search engine PR (Page Rank) of a web site.

Find the best internet marketing solution for your business?

Below discussed are some of the well-known Internet marketing solutions. Search Engine Submission: You need to submit your site to as many directories and search engines as possible to attract massive traffic towards your web site. In addition, you need to optimize your site and list important keywords inside popular search engines to achieve better results.

Link Building: Link building is another important way to attract prospective visitors towards your online venture. Popularity for high link also means high position in the search engine queries and hence you get massive exposure for your online business venture.

As mentioned in my earlier statement, a website can be the electronic equivalent of a card in a shop window or a full blown marketing campaign. Before you can realize this potential you need to establish what you would like to achieve from a website, E marketing or trading online Some of the benefits might be obvious, but what are the real benefits of marketing on the internet.

Trying to figure out what is important and what is not important for your business is going to be one of the hardest things you will need to think of when you are trying to grow your online business. You should try and find an internet marketing solution for your business.

But at the end of the day, you will see this everywhere when it comes to marketing, providing good content, building links, developing social media strategies are three of the most sure fire ways to generate targeted traffic and sales. You do have to think a little bit out of the box when it comes standing out from the crowd these days online.

Don't be in a rush, spend time learning and trying new things out and testing. Before you know it you will have developed your own internet marketing strategy that works for your business.

Find the best internet marketing solution for your business?


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          Tech conservatives move Alt Right        
My free trade debate opponent, Dr. James Miller, has published a piece on Business Insider about the way in which conservatives like himself are gravitating towards the Alt Right under the growing pressure from SJWs in technology.
Many Business Insider readers won’t trust an anonymous Breitbart interview, but for what’s relevant to this article, please do trust that this Googler’s views accurately reflects how many on the right think about SJWs.

Vox Day, a leader of the alt-right, wrote a book called “SJWs Always Lie” with the explicit goal to “show you how SJWs operate, teach you how to see through their words, explain how to correctly anticipate their actions, and give you the weapons you need to successfully thwart their inevitable attempts to disqualify you, discredit you, and destroy your reputation.”

Damore’s firing is probably going to cause many Silicon Valley Republicans to prepare themselves by reading this book.

The key difference in tactics between the alt-right and traditional right is that the alt-right doesn’t place much value on playing fair, and they mock conservatives’ seeming desire to lose honorably. On a recent Periscope video Vox said that his supporters in tech companies (which he claims are numerous) should “be the second or third most enthusiastic SJW in your group.”

He considers SJWs to be the enemy that’s beyond reason. When a commentator suggested that publically supporting SJW views might give them legitimacy, Vox said “F--- legitimacy. You are thinking like a conservative…”

It will be poisonous if the tech right feels compelled to not only hide their beliefs but also to actively pretend to believe in progressive diversity values. This pretending will embitter them, probably pushing many to the more radical alt-right.... Business works best if different political tribes don’t seek to crush others when they have a temporary upper-hand. If, however, the right perceived that SJWs are after them, it’s understandable (if regrettable) that they will treat SJWs likewise when they have the power.

Although the left greatly outnumbers the right in tech, if the right uses stealth tactics and the left doesn’t, the right might eventually gain an advantage in the career-destroying game because they will more easily locate high-value targets.

As a free market Republican, I dislike most of the alt-right policy views. But my kind are not inclined to fight an underhanded company by company dirty political war, while the alt-right is. If SJWs force the tech right into these fights, they will push them into the eager arms of the alt-right.
People have no use for the McClellans and the parade ground generals once the shooting starts. They need Grants and Shermans and Pattons, and they know it. The Alt Right is the only right that fights. That is why it is the only Right that will command any allegiance from all the various right-leaning, pro-Western, pro-Christian, pro-freedom, pro-white, and pro-nationalist populations.
          Enron: The Smartest Guys in the Room - Friday Night Movie at Cafe Rozella - March 8, 2008 at 7 p.m.        

Enron: The Smartest Guys in the Room is a 2005 documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history.

The film examines the collapse of the Enron Corporation, which resulted in criminal trials for several of the company's top executives; it also shows the involvement of the Enron traders in the California electricity crisis.

Interviews are conducted with former executives, stock analysts, reporters and the former Governor of California Gray Davis.

The film was nominated for Best Documentary Feature at the 78th Academy Awards.

As an analysis of corruption in corporations the film gives a realistic look at corporate culture and the inherent problems within. The movie presents two mechanisms for motivating a vastly immoral and profit-driven corporate culture; namely the vitality curve and the Milgram experiment.

The vitality curve is an idea of constant competition in the work place. Individuals are driven to out-perform each other wherever possible because the employees doing worst in a particular field will be fired. Enron constantly hired new staff because even with record profits it was firing people for making less than 1000 times what they were being paid. The atmosphere of the work place caused people to not only disregard the law, but also to act competitively in breaking the law.

The film features actual voice clips from Enron employees discussing the transfer of electricity from the state of California into nodes in other states where there was a surplus. California had signed legislation allowing for a free market in energy. As a response to this, Enron created a demand by causing blackouts across the state. Following this the price of electricity sky-rocketed, right in time for Enron to ship back the energy they took out of California back into California, making billions upon billons of dollars in profits. The controllers who were doing this discussed how much energy they had transferred knowing full well that it was going to blackout the cities in California.

The Milgram experiment was conducted to see how long an individual can take an order before they question that order. The test was set up so that a person is told that an individual will be shocked with electricity every time they push a button. The person is told to raise the voltage and push the button over and over until the person pushing the button decides to stop on moral grounds. On average a person would die three times over with the number of times the button was pushed.

With a goal derived from the pursuit of profit, Enron employees were constantly told to break laws or perform acts that could be considered immoral. Few Enron employees ever came forward to report the corruption. The factor that inevitably led to people coming forward was a "sinking ship" feeling, resulting in some of the Enron executives selling their shares while telling employees to keep their shares.


          As A Weight Management Product, Nuratrim Functions!        

There are very few health associated products that can claim duality.

Exactly what do we mean by that?

Well, Nuratrim tackles two distinct aspects of weight administration.

One associates with enhancing electricity degrees, food digestion and metabolic rate, while the various other deals with and boosts, digestive uniformity.

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With greater power degrees, it is so much easier to locate the motivation to work out more compared to ever, and thus burn even more of those all-important additional calories.

While with enhanced food digestion likewise addressed, our system functions much more properly at regulating the calories our physiques takes in from the food we eat.

Nuratrim s examine reduction item seems to have seamlessly met BOTH of these duality criterion, and, not remarkably, as a result, it has turninged into one of the leading weight, health-related products on the market today.

Helped obviously by its one-of-a-kind blend of leading-edge, scientifically proven, weight management boosting components, it is obtaining an excellent share of the weight management supplement market.

What is really featured in this mix that makes Nuratrim operates quite so efficiently?

Well, to start with, permit s have a look at the following, partial listing, to see the perks that could be stemmed from Nuratrim:.

Glucomannan: Nature s richest source of soluble fiber and which guarantees to help you discover your trick to health, fitness and stamina.

Licorice Extract: This not just lessens your body fat, but it considerably eliminates body weight, physical body mass index, and LDL cholesterol degrees.

Eco-friendly Coffee: Baseding on an individual study, when made use of for an extended time, Environment-friendly coffee could lead to reduced body mass test figures, and physical body fatty tissue clearly, when ased opposed to the use of typical instant coffee.

Capsicum Extract: Medical researches have likewise shown, that capsicum extract can help burn about 278 even more calories previously, during and after exercising on a treadmill for one hr.

Thus, with this excellent mix of ingredients, it s little wonder that Nuratrim workings so efficiently in doing away with unwanted body fat.

Nuratrim, created by Nuropharm Limited, is readily available throughout the world. While there are no high road stockists where you could get Nuratrim, its developers are stating that soon it will certainly be offered.

While Nuratrim is not currently readily available offline, it could obviously be provided right to your doorstep via on the internet stockists.

Going by the forgoing, there are great deals of positives for Nuratrim. There are a few negatives.

One is, that regrettably, Nuratrim is not ideal for vegetarians and vegans. Why? The product has gelatin, something that all vegans and vegetarians purely prevent. Sorry vegetarians.

Others will certainly be satisfied to understand that Nuratrim consists of a cocktail of proven, metabolic rate enhancing stimulants, that.

While numerous weighting loss tablet computers contain amphetamines and guaranam, it has actually been proven that these stimulants have at the very least unpleasant adverse effects that can, in some people, feature, anxiousness, irritability and sleeping disorder.

Nuratrim, on the other hand, stays well free from all artificial active ingredients, hence priding itself in being ONE HUNDRED each cent natural.

Nuratrim is just taken once a day, preferably in the morning with breakfast and a glass of water. Each container stands for a month s provide of 30 pills.

Although Nuratrim is extremely extremely considereded as a class-leading weight-loss item, it isn t for everyone.

Just like all weight management items, Nuratrim actually isn t recommended for expecting ladies, or for children under the age of 18.

And once more, as is common to all weight management products, it is suggested to first speak with your medical physician prior to taking any type of fat loss supplement.

The ingesting of any caffeine-related item could at first have some impact on rest. However, with Nuratrim, sleeping habits are rarely too disturbed, just because of the really small amounts of caffeine it has.

Just like any kind of product, prospective customers will always want to know if the product that they are interested, in sources any damaging negative side effects. With Nuratrim, there are no such issues, as it consists of just 100 % all-natural ingredients.

We must include this, that one of its natural components is a chilli draw out, which normally improves body temperature level in order to burn fat a lot more successfully. This extract can, sometimes, give some individuals, the sensation of what us described by some as, moderate hot flushes, and undoubtedly, this has been stated by an extremely little portion of Nuratrim individuals.

Yet apart from that, it seems from all records, that there is little else to bother with from eating Nuratrim.

Nuratrim does appear therefore, to be one of the greatest weight management items on the free market, and without a doubt most of users concur, that there ought to be few bookings about utilizing it.

For more information Regarding Nuratrim See nuratrim


          Advice to Trump: Leave Medicare Drug Prices to the Free Market        
President-elect Donald Trump has bashed drug prices on numerous occasions. During his campaign, he championed the idea of having the government directly negotiate the price of Medicare drugs for Part D drug plans. Trump seemingly dropped the idea later in his campaign only to resurrect it again mid-January. Many Democrats also believe the government could […]
          John Strossel, Gadfly        

We begin with a question. Who is the TV investigative reporter whose career spans forty-three years, who has won no fewer than nineteen Emmys and five National Press Club awards, and who is a libertarian who celebrates free markets and denigrates government? If you answered "John Stossel," you're right on the money. (1) Although it is now six years old, Stossel's book, Myths, Lies, and Downright Stupidity, (2) remains the best distillation of his body of work over the years. Let's focus on parts of his discussion of two topics in this book - the media and public schools. (3)Stossel pulls no punches with his journalistic peers. Many, he says, are scaremongers. They file stories that instill fear because "fear sells." What's more, he insists, when it comes to science and economics, reporters are "clueless." Of the many examples that he cites, here are two.

We often get news stories about potentially fatal carcinogens in thousands of food products due to pesticides. To evaluate these stories, Stossel interviewed the scientist who invented the tests to screen for carcinogens in food and other products. He is Dr. Bruce Ames of the University of California at Berkeley. In the interview, Dr. Ames assured Stossel and the TV audience that worries about foods causing cancer are silly because the level of pesticides in them is so low.

Next, virtually every time that gas prices go up, reporters sound the alarm that they are "going through the roof." "Hold on," Stossel objects. If reporters took the time to figure out how to adjust gas prices for inflation, they would discover that the cost of gas in recent years is actually cheaper that it was eighty years ago!

As for America's public schools, Stossel charges that they are failing by any reasonable standard. The reason? They are government-run monopolies which perform like any other monopoly – poorly. To make his case, he cites data from international tests which show two things: U.S. students of all age groups place far down the list from their peers in many other nations, including those which spend much less per-pupil than we do, and the longer students spend in our public schools, the worse they perform in such tests. (4) There is only one way to salvage education in America, according to Stossel - competition. To achieve this, he says, Government should give all parents vouchers so that they can select their child's school, secular or religious, or opt for home schooling. "Vouchers," he is confident, "will make all schools better." (5) Thus, for Stossel, we need government-funded but not government-run schools.

Are Stossel's attacks on reporters justified and are vouchers the key to progress? Certainly accuracy takes a back seat to speed and audience impact in many cases, (6) and some reporters lack the knowledge to tackle some assignments competently. But, should we blame only reporters for these problems? How about management? As for vouchers, we've had over two decades of experience with voucher-driven competition and there is little evidence that they have triggered significant overall improvement in education across the nation.

A few years ago John Stossel moved from ABC, where he worked for twenty-eight years, to Fox News. (7) Despite the move, he remains an irreverent and often infuriating gadfly who finds a way to offend virtually everyone sooner or later.


  1. When Stossel graduated from Princeton in 1969 with a degree in political science, he had a stutter which he overcame with the help of a clinic in Roanoke,Virginia. After stints as a TV news reporter in Portland, Oregon, and New York City, Roone Arledge hired him at ABC in 1981 where he won national acclaim.
  2. Hyperion, 2006. The subtitle is Get Out the Shovel – Why Everything You Know is Wrong.
  3. Myths, Lies, and Downright Stupidity has twelve chapters in which Stossel defends or disputes no fewer than 228 claims.
  4. Myth, Lies, and Downright Stupidity, pp. 108-109.
  5. Myths, Lies, and Downright Stupidity..., p. 135. As long as parents receive the vouchers and choose their child's school, even if religious, vouchers do not violate the separation of church and state, according to Stossel.
  6. The saying in the news industry is "If it bleeds, it leads.
  7. "Stossel joined Fox News in 2009. At Fox News, he writes a blog called "John Stossel's Take," hosts his own prime time news show on Thursdays, and appears as a weekly guest on The O'Reilly Factor. He also writes a syndicated newspaper column.

© 2012 Tom Shipka


          Is Socialism Coming?        

In the United States today health care reform is front and center. President Obama has stumped for reform in dozens of appearances across the nation, an address to the Congress, and no fewer than five televised news shows last Sunday. On a daily basis the media report the latest wrinkles in a spate of health care proposals under discussion in the Congress and speculate on the political prospects of the President's preferred "public option."

In the health care debate, as in the government bailout of failing banks and two major U.S. auto producers, some critics of the White House invoke the "S" word – socialism. They warn that America is abandoning its historic commitment to limited government, private ownership, and the free market in favor of a welfare state, public ownership, and a planned economy. Such critics, including those attending TEA (Taxed Enough Already) parties, seem to share Ronald Reagan's distrust of government. Government, they believe, is the problem, not the solution. Government, they tell us, is inept, it covets more and more power, it steals from producers to support parasites, it threatens our liberties, and it saddles future generations with enormous debt. (1) Setting aside the voices of dissent from the radical fringe - the birthers, the conspiracy theorists, those who vilify the President as a liar, and those who construe his pep talk to the nation's students as socialist propaganda - let's engage the central issue: Is the United States abandoning capitalism for socialism?

Let us understand that under socialism the government owns and administers the productive apparatus of society and provides all the goods and services, and by contrast, under capitalism individuals and companies own and administer the productive apparatus of society and provide all the goods and services with the possible exception of law enforcement and national defense. Now, where can we find examples of these two systems in practice? The fact is that we can't because the dominant economic system in the world today is a mixed one. A mixed economy incorporates elements of socialism and capitalism, although the mix differs from nation to nation. When a good or service is provided by a public source in a society, there is a socialist component; when a good or service is provided by a private source in a society, there is a capitalist component.

Thus, if you want to see socialist components in the United States, look no farther than the Grand Canyon National Park, Social Security, Head Start, Medicare, Medicaid, the U.S. Postal Service, food stamps, police and fire departments, Youngstown State University, the Canfield public schools, the Public Library of Youngstown and Mahoning County, and the Mill Creek Metroparks. (2) Similarly, if you want to see capitalist components in the United States, look no farther than Disney World, the stock market, McDonald's, Wal-Mart, Amazon.com, Microsoft, Omaha Steaks, UPS, ESPN, Grove City College, Farmers National Bank, the Exal Corporation, and Handel's Ice Cream.

It seems clear to me that the U.S. is not abandoning capitalism for socialism. Rather, it continues to blend elements of both systems. Although the specific jurisdictions of the public and private sectors in America will change in the future as they have in the past, our economic hybrid is here to stay for the foreseeable future.


  1. See, for instance, the recent statements of the Atlas Society, a group which seeks to perpetuate the ideas of Ayn Rand, an advocate of laissez-faire capitalism. See www.atlassociety.org.
  2. One of the ironies in recent weeks is a mother objecting to her child hearing a talk in his public school by President Obama because she wanted to shield him from "socialist propaganda." Public schools are a socialist component in America. If Americans were pure capitalists, there would be only private schools.

© 2009 Tom Shipka


          American Religious Identification Survey 2008        

Last month researchers at Trinity College in Hartford, Connecticut, published the results of a national survey of beliefs about religion called the American Religious Identification Survey, or ARIS for short. This is the third such survey from this group over an eighteen year span. (1) Perhaps the most startling finding in ARIS 2008 is about the Nones. That's N-O-N-E-S. The Nones are the non-religious among us. There are twenty million more Nones today than in 1990, an increase of 138 percent, and the percentage of Nones has jumped from 8.2 percent to 15 percent of the population. (p. 3) Indeed, Nones are the only group on the American religious landscape which has increased in numbers and percentage in every state in the past two decades. (p. 17)

Here are some of the survey's other findings:

  1. While the majority of Americans self-identify as Christian, and the number of Christians in the nation has increased since 1990 by 22 million, the percentage of Christians in the adult population has dropped by more than 10 percent. (p. 3)
  2. Mainline Protestants dropped from 18.7 percent to 12.9 percent of the population (p. 5) (2), and Baptists dropped from 19.3 percent to 12.9 percent of the population. (p. 5) At the same time, the number of Americans who self-identify as "generic Christians" or "non-denominational Christians" rose from less than 800,000 in 1990 to more than 8 million in 2008. (pp. 5-6)
  3. 27 percent of Americans say that they do not expect to have a religious funeral or service when they die. (p. 10
  4. )On the subject of divorce, except for Jews and Mormons, whose divorce rates are atypically low, Nones compare favorably to believers. The divorce rate for Catholics, Baptists, and Nones is 11 percent; other Christian groups, such as Pentecostals and generic Christians, have a higher divorce rate. (p. 13)
  5. The influx of Hispanics, now the nation's largest minority, (p. 15) has contributed significantly to a huge increase in the Catholic populations of California, Texas, and Florida. (3) Over the past two decades, the Catholic population rose from 29 percent to 37 percent in California, from 23 percent to 32 percent in Texas, and from 23 percent to 27 percent in Florida. (pp. 20-22) Migration of Catholics from the northeast and the mid-west also contributed to this trend. (pp. 20-22)
  6. The percentage of Catholics in New England declined from 50 percent in 1990 to 36 percent in 2008. At the same time, the percentage of Nones in New England grew from 8 percent to 22 percent. (p. 18)

Does all this mean that we are witnessing "The Decline and Fall of Christian America," as the cover of a recent issue (April 13, 2009) of Newsweek magazine suggests? Hardly. A significant majority of Americans remain Christians, more and larger mega-churches are built each month, Christian media reach over a hundred million of the faithful daily, Christian groups spend hundreds of millions each year to proselytize and to shape public policy, and, as is the case today, the occupant of the White House for the foreseeable future will be a person of faith.


 

  1. The 1990 survey was published in 1993 under the title One Nation under God: Religion in Contemporary American Society, and the 2001 survey was published in 2006 under the title Religion in a Free Market: Religious and Non-Religious Americans. The principal investigator for all three is Barry Kosmin, a sociologist. For the 2008 survey, see www.americanreligionsurvey-aris.org. ARIS 2008 follows on the heels of the U.S. Religious Landscape Survey which was published in February of this year. This survey found that a) 28% of Americans have left the religion of their youth for another religion or no religion, b) the fastest growing segment of the population is those who say they are religious but connect with no particular church and those who say that they are atheist or agnostic, c) more than one in ten Catholics born in the United States are no longer Catholic, and d) those embracing Protestantism – mainline, evangelical, and historically black – have declined to a bare majority – 51%. See my WYSU commentary on this survey at www.wysu.org. Click on "Public Affairs," then "Commentaries." Both surveys have been reported extensively in the media and ARIS 2008 serves as the basis of the cover story in Newsweek, April 13, 2009, pp. 34-38.
  2. Mainline Protestants are Methodists, Lutherans, Presbyterians, Episcopalians, Anglicans, and members of the United Church of Christ.
  3. Surprisingly, the percentage of Catholics among Hispanics in America has declined from 66 percent in 1990 to 59 percent in 2008. Many Hispanics have gravitated to generic Christianity (from 8 percent in 1990 to 11 percent in 2008) and to the Nones (from 6 percent in 1990 to 12 percent in 2008). (p. 14)

© 2009 Tom Shipka


          Galbraith on Global Warming and Planning        

The mobilization for World War II by the United States shows government planning at its best. During a four-year period the United States recruited, trained, and deployed eleven million soldiers; commissioned the production of countless aircraft, seacraft, trucks, jeeps, tanks, bombs, guns, and bullets; kept inflation low; and achieved full employment. (1) The result was victory over the Axis powers. By contrast, the devastation in New Orleans caused by Hurricane Katrina shows government planning at its worst. In New Orleans the levees were structurally flawed; residents remained in low-lying areas of the city at great risk; and the evacuation plan ignored those without automobiles. The result was that thousands died, hundreds of thousands fled, most permanently, and New Orleans today is "largely a ruin." (2)

These are the sentiments of James K. Galbraith, an economist, in his most recent book, The Predator State. In this book Galbraith gives us both a devastating critique of free market economics and a plea for a recommitment by government to planning. Galbraith argues that in a "properly designed (economic) system, planning and markets do not contradict each other" and "are not mutually exclusive." (3) Markets, he says, "distribute today's production to consumers...reasonably well" but are not equipped to deal with "the use of today's resources to meet tomorrow's needs" (4) because markets do not think ahead. (5) Thus, the interests of future generations must be provided for through government planning. (6)

Although Galbraith sees a need for effective planning by government in several areas, the one which he addresses with a special sense of urgency is global warming. Galbraith cites a 2007 report on this subject by the Intergovernmental Panel on Climate Change (IPCC). This report, he says, is a wake up call to the governments of the world to take individual and joint action on a par with the U.S. mobilization for World War II to prevent unprecedented global disaster. (7) According to this report, failure to act will cause carbon dioxide in the atmosphere to reach levels within the next three generations that will cause the collapse of ice sheets in the West Antarctic and Greenland. If and when half these ice sheets melt, sea levels will rise by twenty feet around the world resulting in the loss due to flooding of "every beach, every low-lying island, every coastal marsh, and nearly every coastal city on the face of the globe, as well as the ports, airports, power plants, refineries, and other seaside infrastructure..." (8) To reduce greenhouse emissions, Galbraith argues, we will have to get gasoline out of cars and coal out of power plants and replace them with new, clean energy. (9) The unfettered market will do nothing to help us. Indeed, governments will have to take control of the sources and uses of energy from private corporations. (10) "Either the problem of climate change will be planned out, by a public authority acting with public power," Galbraith writes, "or it will be planned away, by private corporations whose priorities lie in selling coal, oil, and gas-burning cars." (11)

The science behind Galbraith's proposal on climate change is well-founded, despite the naysayers. Whether the more than six billion people across the world and their political leaders have the intelligence, responsibility, and courage to act in time, however, is another question altogether.


 

  1. See James K. Galbraith, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, p. 172. References in footnotes are to this book. Galbraith is the son of John Kenneth Galbraith, famous Harvard economist and U.S. Ambassador to India, who died in 2006.
  2. Pages 168-169.
  3. Pages 164-165.
  4. Page 165.
  5. Page 167.
  6. Pages 166-167. Galbraith cites two inherent market flaws: "Even if the market is perfectly efficient, it still suffers from two ineradicable defects. The first relates to the distribution of income and power: the market conveys signals only in proportion to the purchasing power of the individuals transmitting them. The poor do not matter to the market. The second relates to representation: people not yet born do not turn up at the stores. They send no market signals at all." (p. 166)
  7. The report is Climate Change 2007: Synthesis Report, Intergovernmental Panel on Climate Change Fourth Assessment Report, November 17, 2007. Galbraith opines that "In the IPCC, we can come as close as humanity has ever known to a trusted voice on a scientific matter." (Page 171)
  8. Page 170.
  9. Page 171.
  10. Page 170.
  11. Page 175.

© 2008 Tom Shipka


          PRICELESS: The Case, and Concession, for a Free Market for Egg Donation        

by Corlandos R. Scott, Esq. and Andrew Vorzimer, Esq.

Two hundred years ago, American trusts stood atop several market sectors, effectively owning entire industries. From railroads and sugar to oil and steel these trusts controlled America’s ability to eat, travel and build.…

Continue reading on the Path2Parenthood Blog »


          Ed Broadbent testifies to the House of Commons Finance Committee on income inequality        


*CHECK AGAINST DELIVERY*

Last September, the Broadbent Institute issued a major discussion paper Towards a More Equal Canada, which addressed the issue of rising economic inequality. For every $1 increase in national earnings over the past twenty years, more than 30 cents have gone to the top 1% of earners, while 70 cents have had to be shared among the bottom 99%.  Middle class incomes have now been stagnant for thirty years.

Today is the deadline for filing personal income tax returns. It is a day to remind ourselves that our tax system could move us to a more equal Canada if we made the system fairer, with a particular focus on expanding tax credits for low and middle income Canadians.  Canada’s poverty rate is, at 8.2% for children and 10.1% for working-age adults in 2010, far too high and could be reduced significantly through the targeted measures we propose.

Our discussion paper drew upon the work of many distinguished experts, examined the causes and consequences of the growth of economic inequality over the past thirty years, and set out a broad policy framework to reverse the trend and lead us back to a more equal Canada.

We have just released another paper “Union Communities, Healthy Communities” that highlights the importance of a strong labour movement in building a more equal Canada.  And we have also published more than twenty responses to our reports from a wide range of points of view, as well as the results of an independent poll of Canadians that revealed their opposition to the growth of inequality and their strong support for corrective measures.

Extreme economic inequality undermines democracy and the common good. Very unequal societies do much worse in terms of both social and economic performance, including in such fundamental terms as health and life expectancy, social mobility (equality of opportunity for children), crime levels, the quality of democracy, and levels of social trust.

The level of inequality in a nation is ultimately a matter of political choice. While it is true that rising inequality is due in significant part to fundamental economic changes such as globalization and technological change which are difficult to manage, it is equally true that some advanced industrial countries have been able to remain much more equal than others. Political choices matter. The empirical evidence – from Canada, the US, Europe and the OECD – is clear. 

The rise of extreme income inequality has been much greater in those countries which have most strongly embraced a fundamentalist so-called free market agenda, and much less in those countries which have continued to believe in the need for shared progress.

The Broadbent Institute believes that we must, as a society, strike a balance between the roles of the market and democratic government in determining the distribution of economic resources.

The market, properly regulated, is a useful tool for creating wealth. But democratic governments must ensure that that the needs of all citizens, such as access to health care and education as well as the means to secure a decent livelihood, are met regardless of the level of wealth and income acquired through the market. 

A very important goal of democratic governments should be to protect and promote not only political and civil rights but also to promote social and economic rights. This is essential to secure genuine equality of opportunity, and to ensure fair outcomes for citizens. It is why Canada signed on to the two UN covenants that include both categories of rights in the mid 1970s.

Research by the OECD and the Conference Board among others shows that Canada used to do quite well at striking a balance between having a growing market economy and securing a fair distribution of the fruits of economic growth. But cuts to social programs and public services as well as changes to transfers (income support programs) and the personal income tax system since the mid 1990s have compounded the rising inequality which has been delivered by the market economy

Growing inequality of market income has, as shown in our recent paper Union Communities, Healthy Communities, been driven in significant part by the decline in union density and bargaining power since the 1980s. Respect for labour rights by governments enables unions to ensure that the gains of a growing economy are equitably shared with workers, and collective bargaining has been shown to narrow pay differences, especially pay gaps between women and men. 

Another major part of the problem has been the increase in precarious employment, meaning that more than one third of working Canadians do not have permanent, full-time paid jobs. Many fall below the poverty line due to low hourly wages and/or not enough weeks of work. These issues have been highlighted in recent reports from the Law Commission of Ontario and the United Way. Yet we have failed to support these struggling workers and their families through the tax system and through improvements to basic employment standards.

As recognized in the Broadbent Institute discussion paper on inequality good jobs are the basic building block of successful societies, and a successful economy combined with strong labour rights is a major force for equality. It has been well documented that countries with strong trade union movements are much more equal in terms of the distribution of market income, and that such countries also tend to be prepared to invest more to promote greater equality through public services and social programs. Canada’s already acute inequality problem will become much worse if  Canada imports from the United States so called right to work laws, as well as legislation that limits the ability of the labour movement to act as political advocates for their members and all workers. Bill C-377, passed by the House of Commons and now before the Senate, singles out unions for highly onerous reporting requirements under tax law which do not apply to the activities of other associations, including business associations. 

Providing key services to citizens outside of the market mechanism is crucial to promoting the goal of greater equality. Our public health care system provides important rights, and these should be extended by ensuring that all citizens have a right to prescription drug coverage and to home and elder care as needed by reason of disability or old age. There is perhaps no more powerful tool for securing real equality of opportunity than major public investments in education, from child care and early learning through post secondary education and adult learning.

As requested by the Committee and spelled out in the motion, this brief will focus on the role of the tax/transfer system in promoting greater income equality. 

Providing a basic income-tested guarantee to all citizens through a fairer personal income tax system would be a powerful force for greater equality.

The tax/transfer system equalizes income in two important ways first, progressive income taxes mean that the affluent pay to governments a higher percentage of income earned in the market than do middle and low income earners. 

Second, these taxes help finance income transfer programs (such as public pensions, Employment Insurance, child benefits and refundable tax credits) which benefit those who have middle and low incomes more than those with high incomes. The result is that incomes after taxes and transfers are more equal than incomes earned in the market.

Statistics Canada data (CANSIM Table 202-0703) show that the top 20% of Canadian families receive 47.0% of all market income, but a lower 40.0% percent of all income after taxes and income transfers. The bottom 20% receive just 3.4% of all market income, but a higher 7.1% of all income after taxes and transfers. The middle class (the middle income quintile) has about the same share of market and after tax and transfer income (16.0% and 17.2% respectively).

The Centre for the Study of Living Standards calculate that the income tax/income transfer system reduces inequality as measured by the Gini co-efficient by 24%, with the transfer system having about twice as great an equalizing impact as the personal income tax system.

However, while our tax/transfer system remains modestly re-distributive, the fact remains that we still have a very unequal distribution of income after the impact of taxes and transfers has been taken into account. And, according to the OECD, the re-distributive impact of the system in Canada has been declining since the mid 1990s. 

The Centre for the Study of Living Standards has also shown that the inequality reducing role of the tax/transfer system in Canada has been falling, and is now 20% below the OECD average. The major reason for the decline in redistribution has been the cuts to social assistance and Employment Insurance programs of the mid 1990s combined with our failure to respond to the growth of more precarious and low paid work.

What major changes might we make to our tax/transfer system?

The Broadbent Institute believes that we should embrace the goal of a basic income guarantee sufficient to eliminate poverty and to help close the growing gap between low and higher income Canadians.  

This goal should be met by building incrementally on existing income support programs targeted to different age groups and by promoting greater tax fairness.

Step 1:  The Broadbent Institute supports the long-standing position of Campaign 2000, other anti poverty groups and research institutions that the maximum level of income-tested child benefits should be raised to cover the full cost of raising children. 

Canada has a basic income guarantee for children in the form of refundable federal child benefits (with additional contributions by some provinces.)  Child benefits are delivered through the income tax system and are “refundable”, meaning that they are paid even to tax filers who do not have a tax obligation. Benefits are paid on a regular basis and are changed as family income changes from year to year. 

Research by the Caledon Institute among others shows that Canada’s system of income-tested child benefits has been effective in reducing (though far from eliminating) child poverty, and still pays significant amounts to middle-class families to help meet the costs of raising children. The problem is that the maximum benefits paid by Canada Child Tax Benefit and the National Child Benefit Supplement fall well short of the costs of supporting children.

The cost of raising these child tax credits should be offset in part by eliminating the poorly targeted Universal Child Care Benefit.

Step 2:  We should significantly increase the federal Working Income Tax Benefit to support working poor individuals and families and to deal with the growing reality of low pay and precarious work.

The greatest gap in the current architecture of Canadian income support programs is for the working age population, especially the growing part of this population who are employed in precarious and low-paid jobs. The working poor and near poor -– those who move in and out of low paid jobs but often fail to attain a decent standard of living – is disproportionately made up of recent immigrants, especially those belonging to racial minorities, persons with disabilities, women single parents, the single near elderly, Aboriginal Canadians, and young people trying to get into secure employment.

Credit should be given to the present federal government for creating the Working Income Tax Benefit, a new form of benefit which has been shown in the US and elsewhere to reduce poverty while promoting employment as the best path out of poverty.

However, the current benefit is extremely modest (less than $1,000 for a single person and less than $1,800 for a family) and is lost completely at low levels of employment income ($18,000 for a single person and $27,000 for a family).  

The maximum benefit should be increased significantly and phased out more slowly as income rises so that recipients are always better off if they find more weeks and hours of work or find better-paid jobs. 

Increases to the Working Income Tax Benefit should be matched by incremental increases in minimum wages to raise incomes and also to ensure that income supplements for the working poor do not become subsidies to low wage employers. Minimum wages should be set at a level sufficient to ensure that a single person working full time for a full year does not live in poverty.

Improving conditions for low wage workers will also involve raising minimum employment standards covering issues such as hours of work, rights of part-time workers and pay and employment equity, pro actively enforcing such standards, facilitating access to unionization, and greatly expanding skills training programs for unemployed and under-employed workers. 

Canada ranks among the bottom of OECD countries in terms of adequate income support for the unemployed. Our Employment Insurance system currently fails to provide benefits to 60% of unemployed workers even though all workers and their employers pay into the system. We must reform EI so that we provide income security to all persons who experience temporary involuntary unemployment.

Step 3:  Eliminate poverty in old age. 

Canada already has a basic income guarantee for seniors in the form of the Guaranteed Income Supplement (GIS) to Old Age Security (OAS). The GIS is gradually phased out as income rises and is currently received by about one in four seniors. The fact that the OAS plus the maximum amount of GIS is very close to the poverty line means that very few seniors live in poverty. Indeed, the fact that Canada has the lowest poverty rate for seniors among the advanced industrial countries is evidence of a very successful public pensions policy dating back to the 1970s. However, the GIS does need to be raised to ensure that provides all Canadian seniors with an adequate standard of living, particularly single women seniors in large urban areas who are most likely to experience poverty.

Step 4:  As a long term goal – and this would clearly involve complex negotiations with the provinces –- we should abolish welfare as it currently exists and replace it with an income support program for working-age adults delivered through the tax system in the form of a negative income tax. This program would deliver regular benefits based on family income, phased-out as income from employment and other sources rises.  

Canada’s income security program of last resort, social assistance, paid for by the provinces, provides meagre and stigmatizing benefits which are, as shown in reports by the recently abolished National Council of Welfare, far below the poverty line for almost all family-types in all provinces.

The aim has been, as in the Victorian era Poor Laws, to ensure that even extremely low wage jobs will deliver more income than does welfare. Yet the evidence shows that the vast majority of recipients who are able to engage in paid work do, in fact, seek to work.

Social assistance is of no help to the working poor. A recipient must be unemployed, have no access to family income, and must have exhausted almost all assets in order to qualify. Benefits are cut off after only a very few days of work. At the same time, it is very difficult for many recipients, especially persons with disabilities and single parents of young children, to climb the “welfare wall” since leaving social assistance often also means giving up health and housing benefits and since the needed supports and services, such as affordable child care, are not in place.

The aim would be to ensure that working age adults with no or very low incomes from paid work, unemployment insurance, disability benefits and other sources receive a supplement which would be sufficient to secure an acceptable basic income. The supplement would be phased out with rising income rather than being turned off as soon as a person starts to receive employment income. Such a supplement could be partly financed by folding in some current tax credits such as the GST credit.

Such an alternative, a negative income tax, has been broadly championed across the political spectrum, including by Senator Hugh Segal in his published response to the Broadbent Institute paper on inequality, and by the late Tom Kent, the prime architect of Canada’s social reforms of the 1970s, who wrote the first paper published by the Institute. 

Without addressing the complex issues, there is also a pressing need for reform and improvement of disability benefits.

Step 5:  Improvements to income support programs could and should be financed by making our income tax system much fairer. 

The incomes of the top 1% have risen from 7% to 11% of the total income of Canadians since the early 1980s, while the incomes of middle-class and working Canadians have increased little in real terms. The rising share of the top 1% is the main reason why market income inequality in Canada increased so significantly from the early 1980s to 2009.

Recent Statistics Canada data show the effective income tax rate on the top 1% has fallen from 39.4 per cent to 33.3 per cent since 2000, and the effective income tax rate on the top 0.1 per cent of Canadians, whose incomes start from $685,000 and average $1,519,000, has fallen sharply from 41.6 percent to 35.4 per cent.  Thus, even as the income share of very high income earners has risen, their effective tax rate has fallen significantly. As we have said before, we should consider changes to top income tax rates.

We should also scale back special tax breaks that deliver huge benefits to the very well off, such as the exclusion of 50% of capital gains incomes from taxes and low tax rates on gains from stock options. (It is reasonable only to tax capital gains above inflation over the period for which assets were held.) We should also be cracking down on tax avoidance by the very rich through offshore tax havens and other means such as sheltering income and wealth within private companies and family trusts. It is time to crack down on the tax cheats who undermine government finances and public belief in the fairness of the tax system, and the present federal government should be commended for their 2013 Budget proposals in this area. Additional revenues can also be gained by more broadly applying the principle of “polluter pay.”  Our current tax system allows corporate polluters to offload risk and current and future payments for cleaning up their mess to individual taxpayers.  This isn’t fair, and needs to be changed.

There is much more to dealing with inequality than reforms to the tax/transfer system. However, changes in this area could narrow the widening gap between the very affluent and the middle class, and also lead us closer to the goal of eliminating poverty in Canada.

In summary, concrete steps can be taken to make our tax system a much more effective vehicle for closing the growing gap in Canada between the very rich on the one hand, and the middle class and the poor on the other. The priority should be to eliminate poverty by expanding refundable tax credits, especially for the working poor who fall through the cracks of our current income support system. Our tax system would also be much fairer if we closed special tax loopholes for the very affluent, ensured that corporations pay to clean up their own mess and cracked down on tax cheaters.


          Dark Money and the new American politics        


Last weekend I finished Dark Money by Jane Mayer, which appeared last year.  It was marketed, largely, as a history of the involvement of the fossil fuel magnates Charles and David Koch in American politics over the last few decades, but it is much more than that.  I intend in what follows to summarize what I found in the book, but from a slightly different perspective than Mayer’s, and without much of any attention to the voluminous, and fascinating, personal data that she provides about the Kochs and other financiers of our new “conservative” political movement.  Instead I am going to treat the book as the first draft, as it were, of a genuine political history of the last 40 or 50 years—because it explains more about where we are and how we got here than anything else that I have ever read.   Mayer leads her readers through the story in rough chronological order, and I recommend the book to everyone.  I on the other hand am going to try to identify its major features in an effort to explain how we got to the miserable point at which we find ourselves.

Charles and David Koch are the most striking example of extraordinarily wealthy Americans who have had an outsized impact on the politics of the last forty years—and whose impact is reaching a new peak right now.  They followed in the footsteps of their father Fred, who in the 1950s was one of the founding members, along with candy manufacturer Robert Welch, of the John Birch Society.  Nothing illustrates what has happened to American politics in my lifetime in more striking fashion than this.  The ideas of the John Birch Society, a group of fanatically anti-government lunatics who in the 1950s identified Dwight D. Eisenhower as a member of the international Communist conspiracy, are now the single most influential set of ideas in American political life. Their main tenets are an unlimited faith in free enterprise and a conviction that government attempts to moderate the negative impacts of capitalism are simply a power grab designed to establish dictatorship.  And because of the success of their political movement, their fortunes have grown by orders of magnitude over the last few decades.

In addition to the Kochs, the superrich political elite has included John Olin, a chemical manufacturer; Richard Mellon Scaife, a scion of a Pittsburgh family prominent in banking and industry; and Harry Bradley, another Birch Society acolyte who ran the Allen-Bradley Electronics Company in New York.  In the middle of the twentieth century, when marginal income tax rates topped out at 91%, these men had all taken advantage of a provision in the tax code—first used by the Rockefeller family—to create a “philanthropic” foundation to shield substantial portions of their enormous income from taxes.  Unfortunately, the definition of philanthropy has been broad enough to include the subsidy of a particular ideology—and ultimately, direct intervention in politics.  That one tragic flaw in our tax code has reshaped opinion and redistributed power at every level of American government.

            Now I have rarely been impressed by any of the ideas coming out of the new Right during the last few decades, but like many liberal Democrats, I suspect, I have assumed that conservative intellectuals had honestly come by their ideas.  I am not suggesting now that they have lied about them, but Mayer leaves no doubt that the entire new right wing intellectual establishment was created from the ground up by the handful of major benefactors listed above.  Both the American Enterprise Institute and the Heritage Foundation—the two centers of conservative “thought” in Washington—were originally funded largely by Richard Mellon Scaife. The Bradley and Olin Foundations were also powers behind the Heritage Foundation, and the Kochs have been involved as well.  I have always thought of the Cato Institute as a nest of principled libertarians—partly because it tends to oppose foreign interventions—but it turns out to have been started by Charles Koch.  Charles Murray was an unknown writer before the Olin foundation adopted him and subsidized his first book, Losing Ground, arguing that social programs were hurting the poor.  (Spoiled, perhaps, by success, Murray went a bridge too far when he and Richard Herrnstein argued in The Bell Curve that black people were intellectually inferior to whites.)  And I was amazed to learn from Mayer that the Bradley foundation gives four annual awards of $250,000 each to leading conservative journalists, activists, and intellectuals. Winners have included George Will, Charles Krauthammer, Thomas Sowell, Ward Connerly, Heather MacDonald, Shelby Steele, Victor Davis Hanson, John Bolton, William Kristol, Paul Gigot, Michael Barone, Jeb Bush, Harvey Mansfield, Edwin Meese, Roger Ailes of Fox News, General John Keane, and Charles Murray.

Changing the intellectual climate was step 1 in the program.  Another spectacularly successful front was opened within the American legal system, Started in 1982 with money from the Olin Foundation and affiliates of the Scaifes and the Kochs, the Federalist Society has become a behemoth, an organization of conservative legal thinkers that includes all the conservative members of the US Supreme Court.   That is not all. The Olin Foundation has sponsored two week seminars on Law and Economics for sitting judges, somewhat reminiscent of the seminars drug companies hold for physicians at major resorts.  There they have exposed sitting judges to the evils of regulation and the glories of the free market—and this may explain some of the more extraordinary decisions that federal courts have handed down lately, such as one that limited the legal definition of insider trading to narrowly as to make most prosecutions for it impossible.

Nor is this all: the foundations have not hesitated to challenge liberal intellectuals in their own presumed stronghold, universities.  Using the irresistible lever of their wealth—which no American university, in this day and age, can resist—they have established beachheads such as the Olin Center at Harvard University (promoting conservative ideas on foreign policy) and several institutes at George Mason University, conveniently located in the Washington suburbs.  These have opened career paths for conservative public policy intellectuals—at the same time that mainstream academic departments have been going in directions largely irrelevant to real politics.

This vast intellectual infrastructure works in tandem, of course, with the right wing media, led by Fox News and Clear Channel Radio, to shift public opinion on key events.  The alternative media outlets are largely self-financing, of course, but I was very surprised that another key rightwing organization, Freedom Works—funded largely by the Scaife foundation—had paid Glenn Beck more than $1 million a year to allow them to write his monologues.  And this infrastructure has not only convinced many Americans, and probably most better-off Americans, that social programs do more harm than good, but it has also convinced millions that lower taxes on the wealthy increase economic growth—and, critically, created real doubt as to whether man-made global warming exists.  Mayer traces the campaign against global warming effectively.  It employed some of the same personnel and used the same playbook as the tobacco companies’ earlier effort to create doubt as to whether cigarettes caused cancer—but evidently with far more significant results.  (I am leaving out of this essay the names of many key operatives within the network who have organized particular legal, lobbying and electoral campaigns.  They are the battlefield commanders of our new political struggle.)  The intellectual infrastructure also carries out campaigns against academics and journalists who stand in its way—including Mayer herself.

The other long-running campaign waged by the new right was the attempt to undo a century of regulation of spending on political campaigns. At the dawn of the Progressive Era a consensus emerged that the influence of money on politics had to be restricted, and Watergate had reinforced that lesson. But the counteroffensive against regulation began in the decade after Watergate, won various victories, and culminated in the Citizens United decision, the Kochs’ and their allies’ greatest and perhaps most influential triumph.  The floodgates are now open, and the results are clear for all to see.

The right wing network gained much power over the Republican Party by 2000 and was rewarded by very friendly Bush Administration policies towards the energy industry, which turned fracking loose and set the US on the path to energy independence.  It could not prevent a groundswell of negative feeling against the Bush Administration in its second term, however, or stop the election of a Democratic Congress and Barack Obama.  But it went into high gear to stop Obama from accomplishing very much.  To begin with, implementing a long standing plan to form a mass base, the Kochs and their allies took advantage of the financial crisis to get the Tea Party movement going in 2009.  Their newly won financial power under Citizens United allowed them to intimidate virtually every Republican Senator and Representative with the threat of primary opposition, bringing them all into line for total opposition to the President. The Kochs now hold seminars every year for Republican officeholders, where they are informed in secret of the party line.   They convinced millions of Americans that the financial crisis was really the fault of the federal government.  When Obama threatened the carried interest tax loophole, their lobbying organizations found new allies among private equity titans and hedge fund managers on Wall Street.  All this enabled the Republicans, backed by this network of plutocrats, to win their extraordinary victory in the 2010 elections.  After redistricting was finished with the help of techniques provided by the same set of conservative donors, the Republicans probably had secured control of the House of Representatives for the rest of this decade.

The Koch network has also made a huge and successful effort at the state level, making the Democratic Party irrelevant in large parts of the nation.  Originally founded with Scaife money in the 1970s, the American Legislative Exchange Council (ALEC) now writes draft anti-government, pro-business legislation for state legislatures all over the country.  Local Kochs have also sprung up, such as Art Pope, a North Carolina discount store owner who in the last decade has taken over the state Republican Party and orchestrated its (now partial) takeover of the North Carolina state government.  At the national level, ideological loyalties are still strong enough to allow Democratic candidates to win the popular vote in 4 of the last five Presidential elections, but at the local level, in red and some purple states, there is no alternative force that can stand up to the Koch-led network. And the ultraconservative domination of state legislatures poses perhaps the greatest threat to our democracy of all: a constitutional convention called by those legislatures which could rewrite key provisions of the Constitution along more “libertarian” lines.

Another chapter of this story does not appear in Mayer’s book.  She finished it when Donald Trump’s presidential candidacy had just begun, and he initially exchanged insults with the Kochs, who did not trust him.  Six months into his Administration it seems to represent an unqualified victory.  The Kochs had a long-standing connection to Mike Pence. The DeVos family—the founders of Amway, an organization that has escaped serious legal trouble more than once—has also been a long-standing member of the megadonor network with a particular interest in education, and they have provided Trump with his education secretary.  The EPA and the Department of Energy and firmly in the hands of Koch allies and are now taking the skeptical line on climate change.  New rounds of tax cuts are being prepared.  The Kochs are undoubtedly unhappy about the failure to repeal the ACA, but they now hold more levers of power than they ever did. 

A political revolution has been in progress for more than four decades, a reaction to the New Deal and the more just society that it created.  Fueled by successive rounds of tax cuts, this revolution has created a tiny group of billionaires that now control most of our political life.  This is way, as a widely cited study by Marin Gilens and Benjamin I. Page discovered, the beliefs of average American citizens and broad-based activist groups on key issues have very little influence on policy outcomes, while the beliefs of interest groups have a great deal. It's also why most Republicans will vote for legislation that will clearly hurt far more of their constituents than it will help. This is, I believe, the new America that our current Fourth Turning has created, and like the Gilded Age, it will not be overturned, in all probability, for a very long time.

          Trump, the Republicans, and History        
Even before Donald Trump took office, comparisons between him and the right wing totalitarian leaders of the 20th century were flying freely around the net and social media.  I have made comparisons of my own here before, but my comparisons incline me to reject any equivalence between Trump on the one hand and Hitler, Mussolini, or Franco on the other.  Trump and the Republican Party with which he is working are simply not totalitarians.  They want less government authority, not more. Their model is the United States before the Progressive era, not Italy or Germany during the last great Atlantic crisis.  Yet in another way, as the President's speech withdrawing from the Paris accords showed, there is a profound similarity between Trump and the Republicans on the one hand, and all the totalitarian movements of the last century on the other, including not only National Socialism and Fascism, but Communism in both the USSR and Mao's China. Like the Nazis, the Stalinists and the Maoists, the Republicans and Trump have sold themselves on a view of the world that has little or no relation to reality.  Having developed that worldview over several decades, they are now trying to implement it.  But because it is a fantasy, this attempt is bound to do enormous harm--whether the American people find the strength to reject it during the next 20 years or so or not.

President Trump in his speech last week did not warn that the United Nations was planning to land a force in black helicopters to take over teh USA, but he might as well have.  The Paris accord, he said, "is simply the latest example of Washington entering into an agreement that disadvantages the United States, to the exclusive benefit of other countries, leaving American workers, who I love, and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories and vastly diminished economic production."  The Green Climate Fund, he claimed, "is costing the United States a vast fortune," although our commitment of $3 billion amounted to just $10 per US citizen.  Incredibly, Trump claimed that the fund would cost us tens or hundreds of billions of dollars, with no evidence whatever. This is the way that Hitler (with more justification, actually) talked about the Versailles Treaty and the reparations settlements that followed it during the 1920s, and the way the Bolsheviks talked about the huge prewar loans from France, Britain, and other nations, which had funded the development of the Russian railway system.  Continuing, Trump claimed that the Paris accord was going to cost us 2.7 million jobs by 2025, citing a discredited study from a conservative think tank.  Their report painted a picture of incredible economic devastation which the President of the United States treated as fact.  Rather than give in, the President promised a renaissance of American coal mining and jobs for miners--which no one believes can possibly happen in the current energy environment.  The President talked about the rest of the world the way Communist leaders talked about the capitalism world, painting it as a vast conspiracy designed to cripple the United States for their own benefit. "The rest of the world," the President said, "applauded when we signed the Paris Agreement. They went wild.  They were so happy. For the simple reason that it put our country, the United States of America, which we all love, at a very, very big economic disadvantage. . . .The agreement is a massive redistribution of United States wealth to other countries."  Unspoken was the obvious conclusion, spread by Dinesh D'Souza and other conservative pundits, that President Obama signed it because he has always hated the United States.

The President specifically argued that China and India would take advantage of the agreement to increase coal production while the US had to cut it, but those countries are in fact moving away from it.  He said nothing, of course, about the rapidly falling price of clean energy and the jobs that could be gained by investing in it.  That is because the Republican Party is virtually a wholly owned subsidiary of the most conservative elements of the energy industry, led by the Koch brothers.  And that is a key difference between today's Republicanism on the one hand, and the National Socialists and Communists on the other. They were genuinely motivated by ideology; the Republicans are simply slaves to private interests.

The recurring theme of Trump's speech, that he is reasserting America's national sovereignty against illegitimate international authority, could be traced back to the 1950s and the founding of the John Birch Society--led, among others, by the Koch brothers' father. "It would once have been unthinkable that an international agreement could prevent the United States from conducting its own domestic economic affairs," he said. "But this is the new reality we face if we do not leave the agreement or if we do not negotiate a far better deal."  And the Paris agreement--which is based, in fact, entirely on voluntary compliance--will be, he warned, only the prelude to further attacks on our sovereignty. In the last 60 years, such fringe ideas have found their way to the summit of power.  That idea may also have led Trump to refuse to promise our NATO allies that he would defend them all against attack, and it will encourage him to take more and more unilateral steps in foreign affairs, just as Hitler boasted of freeing Germany from the shackles of the Versailles Treaty and the subsequent Locarno Pact before he unleashed the Second World War.

The situation with regard to health care is similar.  Committed to the belief that the free market will provide the most people with the best insurance, the Republicans have to ignore the unpleasant reality that insurance companies love writing policies for healthy people but would rather not insure sick ones.  Thus they are trying to eliminate the ACA, and insurance for at least 20 million Americans, while claiming that this will make things better.

Where will all this lead?  History is not especially encouraging.

National Socialism could not, as I pointed out in an earlier post, deliver on its promises to the German people, but totalitarian methods secured its hold on power .It destroyed itself because it was dedicated to a hopeless war of expansion that brought it into conflict with three superior industrial and military powers.  Fascism was not particularly successful, but it had survived for 18 years before Mussolini in 1940 made the fatal mistake of following Hitler into war.  Franco,. who carefully avoided that mistake, survived for the rest of his life, 36 years, after seizing power.  And the Soviet Union, with the help of totalitarian methods, survived for more than four decades after the Second World War despite its clear failure to meet the needs of its people.

Trump and the Republicans, it seems to me, will further enrich the fossil fuel industry, take away health care from millions of Americans, and roll back some of the regulations of the financial industry--which have never been severe enough as it is.  But given the entrenched power of the Republicans, the continuing movement of population to the Sunbelt, and the Democrats' inability to unite behind a compelling alternative set of policies, we cannot be sure that the Republican philosophy, which has been steadily gaining in power since the 1980s, will not remain dominant for some time to come.  The politics of the Gilded Age disgusted many educated and patriotic Americans from the time of the Grant Administration forward, but not until Theodore Roosevelt--30 years later--did any real reforms begin. 

The threat of climate change is, of course, very real.  In fact, serious students of the subject have argued for some time that the Paris accords were grossly inadequate to meet the threat and threatened to lull the public to sleep.  I have been convinced for some time that only a series of environmental catastrophes such as the flooding of Miami will mobilize the world to the necessary extent in any case.  Such a chain of events is, paradoxically, perhaps our best hope of recovering some civic spirit and mobilizing resources for good ends.   I can't see much else that would have that effect.
          The Anatomy Of A Mass Media Fake News Lie        
The Internet is a wondrous free speech-free market Xanadu. It has revolutionized an incalculable number of things. Life is better, stronger, faster – easier.
          Comment on Your Brain on Politics: The Cognitive Neuroscience of Liberals and Conservatives by Benjamin David Steele        
@ 65. rational revolution - I think you might be trapped in an ideological reality tunnel. Let me take your own example: "For example, conservatives in America are ardently against federal programs like Social Security, even though the program has been around for as long as just about anyone alive in America can remember and its a tremendously stable system of consistency, that provides not only individual stability in old age, but stability to the entire American economy." Many conservatives and Republicans would like to reform Social Security, but very few are ardently against it. Diverse data proves my point: http://benjamindavidsteele.wordpress.com/2010/08/16/most-oppose-cutting-social-security-data/ http://i2.cdn.turner.com/cnn/2011/images/09/12/rel15b.pdf I have no desire to analyze your long post. I just wanted to show how disconnected your analysis is from the actual data. By your own definitions, you know what 'conservatives' should be for and against. But apparently your definitions aren't the same as the basic beliefs and values that motivate most American conservatives. I will, however, offer a simple explanation for your confusing right-wing/left-wing ideology with 'liberal'/'conservative' psychological predisposition: http://www.tnr.com/blog/alan-wolfe/false-distinction "[E]verywhere I go, the moment I tell people that I have written a book about liberalism, I am invariably asked which of the two I mean. Classical liberalism, my interlocutors patiently explain to me, is that wonderful notion of the free market elucidated by Adam Smith that worships the idea of freedom. The modern version, by contrast, is committed to expansion of the state and, if taken to its logical conclusion, leads to slavery. One must choose one or the other. There really is no such thing, therefore, as modern liberalism. If you opt for the market, you are a libertarian. If you choose government, you are a socialist or, in more recent times, a fascist. "I try to explain to people that in my book I reject any such distinction and argue instead for the existence of a continuous liberal understanding that includes both Adam Smith and John Maynard Keynes. But so foreign is this idea to them that they stare at me in utter disbelief. How could I have possibly written a book on liberalism, I can almost hear them thinking, when this guy doesn’t know a thing about it? "[ . . . ] I think of the whole question of governmental intervention as a matter of technique. Sometimes the market does pretty well and it pays to rely on it. Sometimes it runs into very rough patches and then you need government to regulate it and correct its course. No matters of deep philosophy or religious meaning are at stake when we discuss such matters. A society simply does what it has to do. "When instead we do discuss human purpose and the meaning of life, Adam Smith and John Maynard Keynes are on the same side. Both of them possessed an expansive sense of what we are put on this earth to accomplish. Both were on the side of enlightenment. Both were optimists who believed in progress but were dubious about grand schemes that claimed to know all the answers. For Smith, mercantilism was the enemy of human liberty. For Keynes, monopolies were. It makes perfect sense for an eighteenth century thinker to conclude that humanity would flourish under the market. For a twentieth century thinker committed to the same ideal, government was an essential tool to the same end." http://benjamindavidsteele.wordpress.com/2011/03/18/is-classical-liberalism-liberal/ "Liberalism and conservatism aren’t specific ideologies so much as they are general attitudes. By definition, a conservative wishes to conserve and a liberal does not. This brings us to one of the problem of American politics. As Gunnar Myrdal explained, “America is conservative in fundamental principles… but the principles conserved are liberal and some, indeed, are radical.” So, conservatism will criticize the living breathing liberalism of the moment often in defense of the fossilized liberalism of the past. This is why conservatives will claim classical liberalism as their own. Liberalism of the past is safe because it’s been cleansed of all unknown, and hence uncontrollable, elements. Even though neither is a specific ideology, conservatism is forever seeking to conserve the ideologies of the past whether they are considered liberal or conservative. Conservatives in the past would have criticized classical liberalism, but conservatives today can safely admire it because it’s been made into a set doctrine. This might also explain why many Americans identify as conservative even as they hold traditionally ‘liberal’ positions. Progressive policies were liberal when they were first proposed, but now that they’ve been established for almost a century they’ve become a part of the American tradition and so many conservatives will seek to conserve something like Social Security. "Liberalism, by nature, is constantly changing, constantly pushing the boundaries, constantly trying new things (or putting old things in new contexts). As such, liberalism isn’t a single set of beliefs and policies. When conservatives are getting used to classical liberalism, liberals are already onto another original concept or system. Liberals adapt to present circumstances seeking to go in new directions."
          Free Marketing and Free Cats        
There is no such thing as a free cat and there is no such thing as free marketing.  Both require something.

Someone might give you a cat for free, but then you realize that you have to pay to take it to the vet to get immunizations and buy all of the stuff that a cat needs. $200 later you have a free cat.

Some people think SEO is free.  Its not.  I once had someone tell me that with a little "Creativity" I could appear in the top results for some very competitive terms.  I am not sure what they meant by "Creativity" but unless they meant time, money and lots of effort, then no, you can't appear in the top results.

There are a lot of marketing tactics that may seem free.  SEO, Social Media, Guerrilla Marketing, Grass Roots, Word of Mouth.   But at the end of the day someone is still paying for it.  Either you are doing the work or you are paying someone to do the work.  Its not free.
          How Canadian Dairy Farmers Escape The Global Milk Glut        
President Trump recently went on a small rampage against Canada for blocking imports of one particular type of milk from the United States. The details of this particular dispute aren't that interesting or important. What is remarkable, though, is Canada's system for managing its dairy industry, which is the underlying cause of Trump's complaint. When it comes to milk, Canada rejects free markets, free trade and the policy advice of most mainstream economists. And as a result, Canadian dairy farmers live in a completely different world from those in the U.S. American dairy farmers like Bill Bruins, in Fond du Lac County, Wis., are constantly reacting to shifts in the supply and demand for milk. "You have high prices followed by low prices followed by high prices," Bruins says. Those prices are shaped by global events ; about 20 percent of America's milk gets exported, often as powder or cheese. Right now, prices are low because the world's cows are producing too much milk. They're so
          Kidney Donations, by Amy Willis        

A special thank you to Alice Temnick for creating this week's Extra.

kidney%20transplant2.jpgDo you or have you known someone who has donated, is in need of, or has received a transplanted organ? If so, how has that association shaped your thinking about organ donations and the illegality of organ markets?

Whether you have or have not been exposed to the current arguments for and against potential donor compensation, we hope this conversation with Sally Satel will encourage you to share your thoughts about this.

1. Sally Satel presents the multiple costs (and benefits) donors face, from the pre-surgery preparation work, the recovery, the psychological effect of donating and family influences. Are there other costs that might influence potential donors?

2. With a waiting list of 80,000 and 12 people dying daily as they wait for a kidney, directed donations from living donors are a patient's best hope. Satel indicates that a thriving black market exists globally. Who is helped or harmed by this?

3. Sally Satel discusses the opposing argument to a classic free market in kidneys and the need for paternalistic compensation proposals such as delayed payments, tax credits, loan forgiveness and more. What other payment plans might "dampen the magnitude of the incentive" for those seeking immediate compensation? Which ideas do you believe might best appease the opposition to a market for kidneys?

4. Russ acknowledged the potential of falling charitable donations as a possible consequence of a market for kidneys. How likely is this or the further concern stated by the National Kidney Foundation that it could crowd out altruistic giving in general? Would direct donations be effected? How?

5. Consider the term commodification. If this term suggests an immoral connotation of paying money for a body part, do Satel's four points of her plan address that? (ensuring that the donor has the capacity to make the decision, gives their informed consent, has their health protected, and is amply rewarded)

(1 COMMENTS) Posted at http://www.econtalk.org/archives/2017/07/kidney_donation.html.

          Sally Satel on Organ Donation        

kidney.jpg Sally Satel, psychiatrist and resident scholar at the American Enterprise Institute, talks with EconTalk host Russ Roberts about the challenges of increasing the supply of donated organs for transplantation and ways that public policy might increase the supply. Satel, who has received two kidney donations, suggests a federal tax credit as a way to increase the supply of organs while saving the federal government money. She also discusses the ethical issues surrounding various forms of compensation for organ donors.

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0:33

Intro. [Recording date: July 6, 2017.]

Russ Roberts: Sally Satel recently wrote an article with Alan Viard entitled "The Kindest (Tax) Cut: A Federal Tax Credit for Organ Donations," and that's going to be our topic for today.... So, you bring a special perspective to kidney donations. Talk about your personal story.

Sally Satel: Yeah. I got a kidney in 2006; and then I got another kidney a year ago, almost a year ago today. And, when I got my first one it was sort of a surprise. A lot of people who know that they're going to need a kidney--well, by definition, they know that they're going to need a kidney. What I meant is that they have certain illnesses--they are either diabetic, or they've got lupus, severe hypertension that's been poorly managed for a while, high blood pressure. People know they are at risk for this, for kidney failure. But my case was sort of a surprise. I just went to the doctor for a regular checkup. This is the part of the story that scares everyone, because I felt completely fine. And during a routine blood draw, found out that I had--well, that I had kidney failure. Which is rather easy to diagnose. It's a test called a creatinine level. But when you go for a regular blood draw, a routine blood draw, that's one of the indexes they measure. So, they tested it again, and that was the same. So, the clock was ticking for me, because I knew from my medical training that if you have kidney failure, you need a new kidney, or you will languish on dialysis for years. And no matter how long you are on dialysis, your life will be prematurely shortened. I mean, people have lived for 20 years, even a little longer, on dialysis. Some people tolerate it better than others. That's a process where your blood is cleansed of toxins about 3 times a week for about 4 hours at a time; you go to a clinic. Most people feel very debilitated by it. The average person on dialysis can't hold a job. But some do. And, some people--it isn't as psychologically devastating to some folks. But others find it so distressing, they are actually--suicide is not that unusual. So, the idea of being tethered to that machine, while, granted, it would keep me alive. Now, if my liver had failed and I didn't get a transplant, that would be it. So, kidney dialysis does keep people alive for awhile. But it just seemed like a really, really half a life. So, I knew I needed a kidney, but I didn't know exactly when I would need dialysis. So, as I said, the clock started ticking. And it turned out I had a good year before the function got to the point where I really was becoming physically debilitated. But it was very hard finding a donor. And that's what kind of galvanized me, this whole issue of the shortage. But, just in terms of finding a donor, as I say, it was extremely difficult. It's not like every day you ask people for a body part. And I didn't have--I have a very tiny family. And, to make a long story short, none of them--I didn't feel I could ask any of them. And in fact I never really asked anyone. I would do it all differently if, heaven forbid, there is yet a third time I have to go through this--see, I'm very nice to my interns. But I would just talk about it with folks and wasn't even being coy. I just sort of thought magically, 'Oh, well some people will think of being a donor, and it will work out.' But it became pretty clear that it wasn't working out. And a lot of people actually said they would do it; and I appreciate that in that I know they wanted to be--I know they felt empathy for my situation; but in the end, basically, a lot of them got cold feet and backed out. And then you're in this terribly awkward position, because you really can't be angry. I mean it's an enormous thing to ask, and it would be incredibly presumptuous to have the expectation that they owed you anything. So, I was really getting very demoralized and about to get ready to go on dialysis. And, Virginia Postrel, who I knew, not very well, had been at a cocktail reception somewhere--this was in November of 2005--and she ran into a mutual friend and asked that friend how I was. And the friend said, 'Not so hot. She needs a kidney.' And, Virginia went--I think the next went to her computer--I remember the subject line; I still have a printout of her email--it said, 'Serious Offer.' And she said, 'So-and-so told me you needed a kidney, and if I match, I will do it.' And I think she followed up a few minutes later with another email: 'I won't back out.' And, so, she went through with it. This was March of 2006. And I'm almost as grateful to Steve, her husband, as to her, because that was one of the reasons that two of my friends, other of my friends who had seriously considered donating did not go through with it--because their spouse basically said, 'It's the kidney or a divorce.' So, you kind of underestimate how important family buy-in is, in something like this. But, you know, God bless both of them. So she did it. And clearly I got a lot smarter. And Virginia did very well and she wrote some, I think very powerful articles about the importance of donating organs. And I suspect she influenced a few people. I know an article I wrote about the whole experience back in 2007--for about 2 years afterwards, I got emails from people. It was the most gratifying thing that's ever happened to me in my life: People saying, 'I read your article and I decided to donate to a stranger.' So I feel my work is done. Anyway, so that had a happy ending. Then I took on, in addition to my various interests, at AEI (American Enterprise Institute), I also took on the interest of how to expand the organ supply.

7:53

Russ Roberts: Virginia Postrel was a guest on EconTalk, and we talked about that. It is an incredible gift, kindness, an amazing thing. I want to talk about your second donor in a second. But first I want to stick with Virginia. And you are psychiatrist--so you are somewhat, at least, if not very self-aware of the emotional component to this. How did that, the receiving of that organ, affect you? You made a joke, 'I got a lot smarter.' I think that was an allusion to the fact that you have Virginia Postrel's kidney.

Sally Satel: Yes--

Russ Roberts: But how did it affect you psychologically? And how do you think it affected her? And have you and she talked about it?

Sally Satel: Oh, of course. You're certainly not the first person to ask me that. But I always find that a curious question. Some people have actually said, 'Do you still see Virginia?' My goodness! Yes, I see Virginia. And she's remained magnificent. You know, as she wrote about it, and as she acted the entire time--you know, we were planning to do this, because there's quite a bit of a workup medically, and to some extent psychologically for the donor--which is done by the medical center; and you know, and rightly so. So, she acted the whole time like, 'Well, let's just get this thing over.' And, in fact--and she's written about it. She said, her attitude--these are her words: I was 'very instrumental about it.' You know: 'I had something she needed, and I knew she had no one else to give it to her, and clearly, it truly was a life and death, or at least a quality-of-life-and-death solution'--I mean, 'situation.' And she did. And I mean, while, on the one hand of course I'm just speechless with gratitude--and I would actually, occasionally feel tearful in that first year, and a few years after with what I think of what she did for me. But, it was sort of [?]--I kind of shared her sense and hoped that I would feel the same way if the tables were turned and someone I knew needed one. But, you know, the sense of--I didn't feel--of course, I kid when I said my IQ went up: I could only wish. But, people do talk about--they kind of romanticize the whole process. I felt, and especially with hearts, as you can imagine--heart transplants--but they actually feel like a sort of piece of the person, almost spiritually, you know, inside them, or they feel a little change in their personality. And both of us were sort of, 'You know, I think, listen, we just exchanged organs'--or rather, she gave me one. And again, thank God. I wish I were wealthy: I would endow a wing wherever she wanted. But, I just feel like she's--of course, I mean a bond with her that I'm sure you don't feel with even your closest friend. It has a quality that's different and almost primitive in some way. But in a charming way.

10:59

Russ Roberts: But that kidney didn't work out completely.

Sally Satel: Yeah. It should have lasted about 15 to 20 years. Living kidneys last about 15 to 20 years. And ones you get from deceased people, cadaver kidneys, about 10 to 12. So, hers should have lasted longer. Also, because I wasn't on dialysis first. And that tends to also detract from the longevity of the kidney of like, a deceased or living kidney, if you've already been on dialysis for quite a while. So, I was an ideal candidate to have her kidney last, you know, quite a while. But, just make a long story short: I ended up getting pneumonia--possibly from the immunosuppressant--because you know you have to be on immunosuppressive drugs forever, so that your own immune system doesn't attack the new organ. But anyway, so I got a fairly serious pneumonia. So, then, it becomes very difficult, because in order to fight off the pneumonia, your immune system needs to be unleashed. But if it's unleashed, it's also going to attack the kidney. So it's a very delicate balance. Which I lost. Although, again, it was a gradual matter. It took about 3 years for Virginia's kidney to really, you know, for all the mileage, basically to run out. And so I knew about 2 years even before, it was probably going to fail completely, that I needed to start looking for another one.

Russ Roberts: So that's rather incredible; but I just have to ask a medical question first. So, your body, 8 or 9 years after getting this kidney--which looked something quite similar to your original kidney that you were born with. It's a kidney. It's not a repurposed Lego toy or a repurposed liver: It's a kidney. And 8 or 10 years later, your body still is angry at it and would reject it if you were not on immunosuppressant drugs?

Sally Satel: Oh, yeah.

Russ Roberts: That's so interesting to me. I didn't realize that.

Sally Satel: Oh, yes. That's true of all organs, and all transplants. And some organs are--some organs are--I think the word is 'immunogenic' than others. Which--kidneys are, bone marrow is, actually livers are--any organ will be rejected if there is no immunosuppression. But apparently people who have liver transplants need to take fewer--a smaller dose--of immunosuppressants. For some reason it's more resistant to rejection.

Russ Roberts: What's the rejection --what happens? What would have happened if you didn't take immunosuppression drugs, say, a few years after?

Sally Satel: Well, in two weeks, if you stop--if you stop taking immunosuppressant drugs completely, then within two weeks, 2-4 weeks, your organ just starts to fail. So, your complete metabolic milieu just goes out of balance. And if your kidney shuts down, basically--you don't, there's no way for fluid to leave your body. So, at its worst, you know, it would back up into your lungs and impede breathing. Although, by the time it gets to that part, you've been, such metabolic derangement[?] you are already somewhat delusional, or delirious, I should say. But, yeah, it happens. You know, people stop dialysis, for example, which is effectively the same thing: that's your external kidney, you could argue.

Russ Roberts: Right. Sure.

Sally Satel: And within about 2 weeks, if you have zero kidney function--some people always have a little residual kidney function--but if you truly have none, few people will last more than about a month. And that's called uremic poisoning--just a quaint term for it.

Russ Roberts: But you got a second kidney, from--this was a stranger?

Sally Satel: No. No. This is another earthbound saint. This woman is named Kim Hendrickson. And she was a kind of a witness to all this trauma during, before I met--well, as I said, I knew Virginia slightly, but before Virginia agreed to do this for me back in 2005. And Kim was a research assistant for Michael Greva [? Michael Greve?--Econlib Ed.]--I'm sure many folks probably know. He's a Constitutional lawyer who was a scholar who was at AEI at the time. And she was his assistant, and my friend. And she saw all this happening. And she thought: 'Wow, if you need another one, I'm keeping mine warm.' At the time, she couldn't do it because she was--just got married, wanted to have children; and understandably wanted to have her kids first, before she subjected herself to--it's a fairly small risk--but, you know, didn't want to complicate things for her future family. I understand completely. Also, at the time, she was--well, she still is--Blood Type B. And, at the time, you had to have the same Blood Type as your donor. But again, the science of immunology has made such progress that now you can get a kidney from a donor who doesn't even have your blood type. And, you do a little more preparation than last time. So, I had to go into the hospital a few days earlier, and then, what is called plasmapheresis: but basically they take out--they filter out some of the cells that would otherwise attack the new organ at the--right when it's introduced. And so, they were able to do that. And her kidney is working fine; and she did it; and that time around, the stress level was next to zero. Because, what made the experience of the transplant so difficult was not the surgery. You know, to tell you the truth, it's over. Right? I left the hospital in 5 days, 6 days. And I'm not that stoic, but actually all I needed was Tylenol. Not that it didn't hurt--but I mean--and then you recover. The scary parts are whether it's going to be rejected--in other words, whether your immune system will still overpower the efforts to suppress it; or whether you get an infection--because, again, you are immuno-suppressed, and they really do industrial strength immunosuppression at the time of the surgery. And that makes you very prone to infection--you are not supposed to go on a train or a crowded place or a plane for about 6 months. And I actually did get an infection and I had to go back, but only for 4 days; and the antibiotics were incredibly effective. And then I came home. And that was that. So, again, the difficult part, for me, was finding that donor; and Kim took that anxiety, just completely removed it. So, I'm so grateful.

18:21

Russ Roberts: Let's talk about the policy implications, or policy environment--which to review, which people have forgotten from our past episodes on this, which I'll put a link up to. So, let's say you were talking to me when you needed that second kidney and I'd said, 'You know, Sally, you are a nice person, but this is just a real hardship for me. But I'd do it $10,000.' Now, that's not a legal transaction, right? I cannot sell you my kidney. Can I give--I can donate a kidney to a stranger--and evidently I can donate a kidney to a particular stranger. So, there's a waiting list right now that's frighteningly long of people who are on dialysis who would like a kidney. They get one when someone just donates to the list. But Kim didn't donate to the list. She donated to you. Explain how that worked.

Sally Satel: Sure. So, among living donation--and then we'll get to deceased donation--but among living donation, which accounted for--I have the numbers here somewhere--but which accounted for a little under--well, there were 18,000 kidney transplants last year, and about 5600 of them came from living people. The remainder came from, obviously from deceased; but not 18,000-5600, because you can get more than one kidney--

Russ Roberts: 18,000, because you can get two from a--

Sally Satel: Yeah. In any case, a living donor either comes from a friend or a relative. And that's the typical scenario. There are some amazing souls, called good-Samaritan donors, who just listen to EconTalk and think, 'Wow, the shortage is just terrible.' Twelve people every day die because nobody is able to give them a kidney, or they could not survive the list--which now has 98,000 people on it. So, someone listens to this, goes to a GW (?) and says, 'I just want to be an anonymous kidney donor.' So, that's called Nondirected Donation. When someone gives to someone they know, a friend or a relative, that's Directed. Another form of Directed could be--and I don't imagine this happens very much, is, if I heard that your uncle needed a kidney, and I really just didn't want to deal with it--I just wanted to give him the kidney, and I could just literally go to the hospital and say, 'Please give my kidney to Russ's uncle.' But I think that's more common in the Deceased scenario, where your neighbor is on dialysis, and heaven forbid your kid is in a terrible accident and ultimately dies and you could say, 'Please give my son's kidney to Russ's uncle.' And, so that would be a Directed Deceased. But most Deceased kidneys, which come from people who are mainly brain dead, although there are some other mechanisms, but it's mainly brain dead individuals, those kidneys, right, go to the next person on the list, which pretty much is a first-come, first-serve as far as the kidney queue.

Russ Roberts: 98,000 people are on the list--

Sally Satel: Oh, Russ, it went down--

Russ Roberts: and 18,000 are available. So, that means there's 80,000 disappointed people who are going to have to wait till next year. And some of them of course don't make it. They die.

22:11

Russ Roberts: So, the first question--I'm sure someone's asked you this. It's not a comfortable question. I think it comes to mind. It's not my way of looking at the world; but there are people who look at the world this way. They would say, 'You had no right to two kidneys when there were 98,000 people on that list. You should have donated Kim's kidney--you should have asked Kim to give to the next person on that waiting list.' What's your response to that?

Sally Satel: If somebody said that to me, I would ask them--

Russ Roberts: Sally, I'm really glad you are here. Right?

Sally Satel: Thanks.

Russ Roberts: I don't know your work as well as I could or should. But, I'm glad you are alive. But it's an interesting question of, when there's a shortage like this, of who should get this precious thing. And--

Sally Satel: Yeah. Right. Right. Well, there are two answers to that. And I would truly ask the person who asked me that question: Why don't they consider donating? My other question to them is, would you please join our effort to change, frankly, the law--the ban--against rewarding people who would like to save someone's life? Let's be able to do that.

Russ Roberts: I mean, my view is: Kim is allowed to give her kidney to whoever she wants, and if it happens to be you, that's her choice. So, I have no problem with it. But I am sure there are many people who don't think she should have that choice, and who would resent or judge--that's the system for that aspect of it.

Sally Satel: Yeah. If they did though, the reality is, Kim would say, 'Well, tough. Now, I'm keeping it.'

Russ Roberts: Right.

23:48

Russ Roberts: The other question I had, and I don't know if you know about this, so you can certainly say you don't know. But, my understanding is that if you are a person of means and you don't want to wait on that list, you can go to certain countries in the world. We talked about--I think it's Iran--is it Iran that has--?

Sally Satel: Iran, but you couldn't go there. But, yes. This is a--

Russ Roberts: This is a separate issue. But a person could; or they could go somewhere else, where an Iranian kidney could be transferred to you, or it could be Turkey. Who knows where. But I would think that, given how valuable this is, you'd think it would be difficult to keep people from, stopping people from making the transaction. I guess the barrier is the medical system, because if I say to you--well, I don't know why. But let's say it this way. You come to me. I'm at the cocktail party. I hear you need a kidney. And I say to you, 'You know, Sally, I'd really like to give you a kidney, but it seems to me that it's a big pain--I was going to say in the neck--but a big pain in the side. I don't want to give it up. But, you know, if you made it worth my while, I think we could work something out.' And so, I quote, direct my kidney to you, but then you buy me a Ferrari six months afterwards--is anybody keeping an eye on that? I hope they're not; but--

Sally Satel: Nah. I don't think they are. And I'm sure this kind of thing goes on. And I would be happy to engage in that myself, if, you know, if that happened, and it was someone I could trust. Because you really do--it's uncomfortable. Well, let me back up. I didn't talk about MatchingDonors.com, which is a website, kind of like a Jdate thing except it's Kdate--you are looking for someone to give you a kidney. And it's totally legal. You can go on it right now, MatchingDonors.com, and it is, again, no money is exchanged; and there's a big warning sign that it's illegal to exchange any money. But that's a mechanism that I did try at first, before the guy backed out. And that's when Virginia came along. But that's relevant to what you just asked me, because there are people on that website who are looking for green cards--I mean, they are looking for something, in exchange. And, I've also gotten a lot of letters from people who say, 'I wish this was during the Recession.' I got so many letters from people saying, 'I wish I could sell my kidney, and get out of foreclosure'--or, one woman had ICU (Intensive Care Unit) bills to pay; another man lost his business. And every one of those letters--every person said, 'And I would be saving someone.' So, I grant you, even if they didn't have that, even if there wasn't that humane dimension to it, I still think it would be legitimate for people to be able to be rewarded for saving someone's life. But, the fact is that both the financial and the humanitarian dimensions intermingle. All the people who wrote to me--it was really kind of moving, and you wish they could have been able to do that.

Russ Roberts: Yeah. I often emphasize--I think it's a really important point--that money certainly motivates people; it's not the only thing that motivates people. There are many, many, many intrinsic rewards that we receive, or punishments for the things that we do. And financial incentives, both positive and negative are not the only things that motivate us. They can motivate us, though. And they can certainly co-exist with those other motives. So, certainly if I sold you a kidney for $25,000, or a new car, or whatever it was, I hope I'd still also, in addition to that, the satisfaction of knowing that a person whose health was impaired was now healthy and had a better chance of living a good and healthy life. So, I think that's a really important point. So, I have--in theory; maybe we'll get to this in a little bit--but I have in theory no problem with a market for kidneys where people buy and sell. I assume they would also get the satisfaction from helping people, not just the money. I don't see any reason why those things are exclusive, and I think it's a terrible mistake to think that they are.

28:13

Russ Roberts: Now let's move to your proposal. You have suggested in this article that the Federal government incentivize kidney donors with a tax credit. So, explain how that might work.

Sally Satel: A tax credit would just be one option. And I'll locate it in a larger context, and then I'll tell you what our plan was. But, the general idea--and, I think people have been talking about this since--I once found a paper from 1968. The first kidney transplant was in 1953. And soon, within a decade, people already realized that there was going to be a shortage, even though we officially didn't set up The List until 1984 in this country. But the idea is--well, think about, I guess, first, what you don't want to happen. You don't want someone to rush into this kind of thing and then regret it. Now, maybe you are going to say, 'Well, that happens all the time in human transactions.' And that's probably true. But in this case, if you were to design an ideal system--this is a transaction, kind of unlike other things. There are some analogies and we could talk about that. But, it's a momentous kind of engagement for a person to donate. So, you want to make sure they are not rushing into something that they regret. And so, this is why a free market, a classic free market, is not something that has ever seriously been considered, in terms of proposals. So, the general idea is that, there is a third party--and it could be the government; it could be a government-appointed charity; or even this could be at the state level--that is the provider of the benefit. And the benefit is not immediate cash. Because, again, you want to prevent a scenario where a desperately poor person is rushing to do this and then going to regret it. So, you don't offer what desperately poor people want, which is immediate cash. So, the kinds of rewards that people have talked about are [?] tax credits; or, a contribution to someone's 401k; loan forgiveness; or they could, for example, forward the benefit to a charity of their choice. But you get the idea. And, as I said, a third party would administer this. And there would probably be a waiting period built in, about 6 months to a year, again, for a cooling-off kind of aspect to it. And, the funding for this could come from dialysis, which is--payments for dialysis from Medicare, which is the largest payer of dialysis are 7%--seven percent--of the entire Medicare budget. So, it's about $90,000 a year for each person. So that could easily underwrite the value of the benefit. Which most people have pegged around $50,000, but it's just really almost an intuitive amount. So, the tax credit, if that were the route that was taken--it would be a refundable tax credit; so, people who didn't pay tax at all would be able to benefit. And they would get $5000 a year, either as a refunded benefit or off your taxes if you paid taxes. But that wouldn't kick in--we put in a lot of protections, and it's quite paternalistic--but it wouldn't kick in for a year. And then, again, it would be $5000 a year. And if it were refundable, it would be $5000 a year for 10 years. And if it were, if a person were paying taxes, I think we said they could have the $25,000 after 5 years. But the idea is to, again, dampen the magnitude of the incentive. And I can tell you why we are twisting ourselves in a pretzel to do this kind of thing. The answer, very quickly, is because of the intense opposition to this idea that has been mounted by much of the transplant community. Although, to the credit of the transplant surgeons, they are more receptive to it, and have become more receptive to it over the years.

Russ Roberts: I think they would be. They have a financial incentive. I want to interrupt, because I find it utterly fascinating. Obviously, there's a pragmatic aspect to what you are proposing, which I respect; I have no problem with it. I don't agree with the outlines of it, though. And I just want to make the case against it, and you can either say, 'Well, it's pragmatic,' or you can disagree with me, whatever you want. It's remarkable to me--first of all, of course, the doctor--the surgeon--is not expected to do this life-saving surgery, life-transforming surgery as a charitable act. No one says to the surgeon, 'We'll give you a $50,000 tax credit for every one of these you do,' or a $5000--whatever it is. We're not--I don't want you to get paid for it, of course, because that would be immoral and it might make you think that the human body is like, oh, I don't know, a slag mine, some kind of coal mine. So, we're not going to pay you directly, and we're not going to pay you right away, because I want you to do it for the good of the patient. So, obviously, the surgeon is somehow managed to live a decent life and survive being paid directly a full, semi-market--it's not a market amount, of course, because it's all messed up--but they get cash. They get what's called cash. And yet, you are going to make a poor person who wants to transform the life of their child, for example, wait 5 years to get their money. You are going to make them wait--

Sally Satel: Well, it's [?] a year, but--

Russ Roberts: No, but they are only going to get $5000 the first year.

Sally Satel: Oh, okay. All of it.

Russ Roberts: Yeah. To get all of it is going to be over a few years. And then, the idea that they might want to help their kid now: 'Too bad. We're going to make you wait 6 months so you can be sure you are not going to regret it.' Um, I find it interesting that--of course, I'm a messed up person; I'm an economist--but I find it interesting that anyone would object to this. So, the people--I'm fascinated--

Sally Satel: Welcome to [?]

Russ Roberts: What? Oh: Welcome to your world. So, who would--I mean, I think there are different ways to think about it. If you did a survey and said, 'Are you in favor of letting people buy and sell their kidneys?' I think the number would be 98% to 2% against. But if you said, 'If a poor person is really desperate and they can save someone's life, should they be allowed to sell their kidney and thereby get their child a college education?' I think the number would be very different than 98-to-2. And I'm curious how politically you think that works out. Why is it--a better way to say it: Is there a vested interest here that I'm not thinking about yet, when I work on it, who would be harmed by this? I mean, that the people who run the list, they are very important now, and they get a lot of attention, and they have a purpose in life that might be hurt by the fact that this market would work better if we had these incentives even though they are roundabout. Who would be against this? Who is against this?

Sally Satel: Well, start with the National Kidney Foundation. They have been the most vociferous opponent. And they actually did actively try to sabotage--I know I'm not supposed to talk about specific legislation, but efforts, years ago, that were made to try to rethink the National Organ Transplant Act, which is the legislation that forbids any kind of exchange. But--

Russ Roberts: Why are they against it? Why would the National Kidney Foundation, which is supposedly in favor of people being helped who are struggling with kidney issues--why wouldn't they be thrilled that, say, I don't know, 75,000 would get kidneys than now?

Sally Satel: Well, I'm baffled, as well. But I can tell you what they say.

Russ Roberts: Yeah: what do they say?

Sally Satel: Well, they say a few things. They start using the language of 'commodification'--in other words, you are treating people like spare fenders in a junk yard. They are afraid you are--'it will taint the process,' I've heard. It will devalue human life. It will--and then they say something that's actually something one could measure, because it's an empirical matter--that it will crowd out altruistic giving. And, worse, that it will just crowd out giving in general. But that's testable. I've actually looked into--go ahead.

37:54

Russ Roberts: That's possible. Right? I was going to say that--it's possible that if you don't--and this is an argument made for blood donation, as well: If you are not going to get the moral satisfaction of helping someone, and now it becomes something you can just buy and sell, you won't donate, because it's tawdry. Which just means that, as an economist, it just means you better set the price a little higher than you thought you might have needed to, to overcome--you might lose the, what is it, the 5000 people who donate right now, willingly, out of an incredible human kindness? And so, now you are going to get as many people as you want to donate out of mercenary motives. And--

Sally Satel: Exactly. Exactly. I see your point exactly.

Russ Roberts: I know you do.

Sally Satel: To the extent that anyone would be dissuaded, I would, as a psychiatrist, say, 'Well, gee, are we talking about altruism or narcissism? What was really motivating you--was social signaling motivating you?' But in any case, maybe it was. And then we know that is powerful for some people. But, well, okay, then I'm sorry that you won't be able to save someone. But here are 10 other people in line who would love to do it. So, that gets into the question of motivation, which is also held very dearly by the National Kidney Foundation, other opponents, which is: it has to be done for the right reasons. But this is what we hear from the National Kidney Foundation, what you hear from some particularly vocal transplant surgeons and nephrologists. Although, as I said, as a group, the transplant surgeons are--they did a poll of their organization in 2009, and the vast majority, 75%, were in favor of at least testing this idea. So, I do give them credit. But I have to tell you, I've looked at all the polls that have been done on this. And, the public is much more open-minded than the experts. And then we bring in the bio-ethicists--

Russ Roberts: Well, that's because the public--there are many of us who have relatives who have kidney problems. We want to help them. I just have to go back to the National Kidney Foundation for a second. I don't know anyone in the National Kidney Foundation. I know nothing about the NKF (National Kidney Foundation) or whatever it's called. But, it's not like a, um, it's not like the AARP (American Association of Retired Persons), the American Association of retired people which has millions of members. The National Kidney Foundation is a nonprofit--I assume. Its headquarters, I assume, are in Washington, D.C. Correct me if I'm wrong.

Sally Satel: No, I think they are.

Russ Roberts: And they have some number of people in that building in Washington, D.C.--maybe 100. I doubt they have a thousand. What does it mean to say they are against it? Why do they matter? And, politically, why does anyone care what the National Kidney Foundation thinks?

Sally Satel: Yeah, they matter a lot. To my deep chagrin. Because they are the first organization that Congress, Congressional offices think of. They always say, 'Well, what does the NKF think?' It's kind of like a cancer issue: What does the NCI (National Cancer Institute), what does the American Cancer Society think they have? They have disproportionate influence. And they have a PAC (Political Action Committee) as well. But it is unfortunate--

Russ Roberts: Who would donate money to that PAC?

Sally Satel: Oh, anyone who is--see people who get, people who, people who have gotten deceased kidneys, and people who--they actually have--

Russ Roberts: I get it. It's okay. I get it. Obviously there's some sense of gratitude there, because they are the coordinators of the list, and they make a donation, or whatever. But I'm not giving them another penny until they change their view on monetary incentives. And I don't give them a penny now, so it's not much of a threat. But, it's a fascinating issue.

41:47

Russ Roberts: Let's take one of their arguments more seriously--we're picking on them, and of course it's not of course just them. They are not alone. It's not like they are the only people against this. There are a lot of people who are troubled or uneasy about monetary incentives. And I understand that. Would it--let's take the commodification idea seriously. Is there something immoral--or, we have taboos about it--but if we think about it rationally a little bit, is there something immoral about sharing a body part for money? I mean, that's really what it comes down to. What I think is fascinating--and the reason I bring up the surgeon thing--it wasn't my idea, forget who wrote about it first where I read it, but--it's fascinating: That's not commodification, that the surgeon's hands are used to make money to rip out somebody's kidney and shove it into somebody else's body. We don't consider that person somehow morally troubled. And yet, somehow--and they make money, real cash. And yet, somehow, if we are to do it, who don't have their--what, high priest status? I don't know what's the--I mean, I'm in an ornery mood, hearing your plight. It's just interesting that this idea--'commodification' is an interesting word, right? It sounds awful. I don't know really what it means when I push it.

Sally Satel: Well, it's one of the three words that are used to, frankly--I don't want to sound melodramatic but [?] folks like me, and I'm not the only one, heaven knows--Richard Epstein, a lot of us, Virginia, are vocal about changing the law. But commodification, exploitation, and coercion are the holy trinity that's supposed to end the discussion. But, you are exactly right. The one person who takes the risk and gives the thing of value gets nothing. Commodification, from what I can--becomes pretty clear from people who brandish that word in a menacing way. What they really are concerned about is having respect for the donor, and treating him or her well. And of course, that is essential. That is the basis of an ethically sound system. In fact, I would say there are at least four elements. One is respect for the person's capacity to make a decision about something that might be in his own best interest. Then of course, informed consent. These are all the things that are not, of course, in a black market. Yet, folks who have debated the others say, 'Well, if we do this here we'll have a black market.' You want to say, 'What?' We have a black market. Frankly, we have a thriving global black market in organs--because we don't have a transparent system. But, anyway: Respect for the person's autonomy, informed consent; protecting their help--which of course doesn't happen in a black market at all. And in fact, even in our current system, if you don't have health insurance and you have a complication a few months after you've donated--granted, probably most hospitals will help you out. But they don't have to. In fact, in our plan there would be health insurance for at least two years, so that if there were complications, a person would be guaranteed to be taken care of.

Russ Roberts: You know what that reminds me of? It reminds of--I think if you are in the Baseball Hall of Fame, you get a lifetime pass to any park in America. It kind of should be. This is not a serious comment. But there is something emotionally satisfying about the idea that if you have crossed into a hospital to voluntarily help save a life with one of your organs, you should be able to walk into a hospital for the rest of your life and say, 'I need this. Give it to me,' and they should just say--

Sally Satel: At least a gift shop--

Russ Roberts: Yeah. And they should just say, 'Yeah, you are one of those? You're in. It's all taken care of. It's free. Here's your free pass.' But that's a little extreme.

Sally Satel: Well, I was just going through my internal list, the conditions that need to be satisfied to allay the fact that someone is not being respected. So, you reward them amply. Obviously, if you gave them a buck, now that would be exploitation. But you reward them in a generous way. Gratitude is expressed. And that's really all that needs to happen. And none of it happens in a black market, of course. But it can easily happen here. And it happens already, except there's no money attached to it. But in this case, there would be a reward for people who would like, again, to benefit while they save someone's life.

46:25

Russ Roberts: You spoke loosely a minute ago--you said the one person who doesn't get anything out of it is the donor. But, of course, the donor does get the emotional satisfaction--

Sally Satel: Oh, definitely.

Russ Roberts: which is enormous. I know you meant that. It just was a figure of speech.

Sally Satel: Thank you.

Russ Roberts: But, it's an interesting question: I'm now going to take the critics of our perspective a little more seriously. Interesting question: Let's suppose, just hypothetically, that the market price--whether we're a literal market, which I understand, I agree is unlikely; no one proposes seriously except maybe me, and three other people. But let's say we went to some system where we allowed this sort of arm's length, third party compensation via the tax system or something else, that you'd like to encourage. And let's say that number got to be a million dollars. Okay? That's what it took. And someone, maybe a foundation steps forward and says, 'I don't just want to save the 98,000 people on the list. I want to save the x-hundred thousand, 500,000, whatever it is, who are at risk. And rather than wait till they go on dialysis, they should just get a new kidney. And I'm going to pick a large enough number, compensating them, that the donors, enough will step forward.' And that turns out to be worth a million dollars. Now, I'm going to say something really tacky here, which is--but it's mildly amusing for EconTalk listeners. Somebody who has been listening to EconTalk since 2010 has heard about Bitcoin. And I have a friend who mocks me because I knew about Bitcoin in 2010 and missed the boat. Of course, he wasn't an EconTalk listener then, so he missed the boat, too. So, it's kind of a mutual make-fun-of-each-other thing. But it would be an interesting thing to think about--you have two people in your life who did something unbelievably generous--what this system you are encouraging would do would put a monetary value in some dimension on their kindness. And it also in a way would suggest what they gave up to give you a kidney. That, it's one to say, 'Well, they risked their life'--which they did. It's one thing to say that they went through surgery, which is painful and scary, which they did. They also had recovery that they endured, which they did. And now you are telling them, 'And by the way, you could have made a million dollars. You gave away that precious thing.' Now, my view on that is: That makes it even sweeter to them, that they did something--in a way, it enhances their generosity. But perhaps some people would say it creates bitterness; it takes the emotion out of it. I don't know. What are your thoughts on that? [More to come, 49:01]

(16 COMMENTS) Posted at http://www.econtalk.org/archives/2017/07/sally_satel_on.html.

          Chris Blattman on Chickens, Cash, and Development Economics        

poverty%20chickens.jpg Chris Blattman of the University of Chicago talks with EconTalk host Russ Roberts about whether it's better to give poor Africans cash or chickens and the role of experiments in helping us figure out the answer. Along the way he discusses the importance of growth vs. smaller interventions and the state of development economics.

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0:33

Intro. [Recording date: June 12, 2017.]

Russ Roberts: Today's episode is a little strange. It starts with the fact that a while back you wrote--not so long ago--you wrote an open letter to Bill Gates, a very wealthy man, reacting to his idea of giving poor people chickens--poor people in Africa--as a way to escape poverty. That open letter of yours to Bill Gates prompted a response from Lant Pritchett. And so, I interviewed Lant about the topic of how do we help the poor. And inevitably some of your arguments and points came into the conversation. So, I want to get your side of the story today on some of those issues and more broadly and more generally on how we should think about development. Let's start with Bill Gates's original idea. What was he suggesting, and how did you respond to it?

Chris Blattman: So, Gates and the Gates Foundation have a lot of big ideas; and this includes driving down financial transaction costs and tackling serious diseases. And generally terrific programs. One idea that Bill Gates has floated a few times in the last year is the idea that chickens are the future for Africa: basically, that they are very poor people who don't have a lot of income, and they are basically scrounging around a subsistence [?]. And, if we could give them chickens, they they'd be able to raise them. They could eat them, of course. But more importantly, they could sell them or they could sell the eggs, and make some extra money. And, this would make them much less poor: maybe they earned $2/day; maybe now they'll earn $4/day. Who really knows? And he called this one of the best investments we could make. Which is probably true to some extent, except what was unusual about his idea is that he envisioned perhaps 30% of Africans. So, this would be 300 million people raising these chickens rather than the existing number, which is maybe 5% of Africans--so, maybe 15 million people, for argument's sake.

Russ Roberts: And, you wrote this open letter. What did you say in that letter?

Chris Blattman: Well, I mean, so, you know, we share a common premise is that one of the reasons people are very poor is that they don't have the opportunity to engage in business: that it's actually not so hard for a lot of people to go from earning $1 a day to earning $2 a day or $2-$4 a day, or $5-$10 a day by starting up a small enterprise; and that the main thing stopping them from doing this is they don't have any capital. If they had capital, they wouldn't be poor. So, they don't have a lot of cash; they don't have a lot of assets; they don't have productive assets. And that could be tools, it could be buildings to build things in; that could be the raw materials, and the skills to build these things. It could be animals. A cow is an asset, or a form of capital; a chicken, or a bunch of chickens is. So, they don't have these things; and they generally don't have access to borrowing. And so, if they get access to capital, you often see people leap ahead and start businesses. So, I think we share this idea. And chickens probably aren't a bad--they aren't a terrible investment. I guess I--before Bill Gates, who is one of the most influential people in development--writes influential development letters--I think it's important to try to correct some possible problems. One is that it's not clear that anyone's going to actually make money if you suddenly go from 15 million to 300 million Africans producing--I think I've actually got my numbers wrong, actually: I'm not doing division and multiplication in my head.

Russ Roberts: It doesn't matter. It's a big [?] increase. And we're pretty sure that--

Chris Blattman: Yeah, 33%--a third of Africa.

Russ Roberts: That could affect the price of eggs. You know. Hypothetically.

Chris Blattman: Yeah. You know. I was surprised he made this argument because he's a very smart guy and he understands economics. So, this isn't a crazy idea: If a third of Africans start producing chickens and eggs, that the price of chickens and eggs are going to fall pretty fast. And there's probably limits to how many chickens and eggs people can eat. So, that's--it just struck me as an odd idea. And if it was some other organization saying, 'We're going to do this,' then I sort of roll my eyes. But when Bill Gates says he's going to do it, there's a good chance he's really going to try, and maybe succeed. So, it's not the best--not everyone should invest in the same thing. And then, of all the things people could invest in, it's not clear to me--and I think there's a lot of evidence pointing to the idea that: Chickens are a fine investment. But they are not necessarily a great investment. And so, why were folks [?] on giving people chickens? I don't know.

6:01

Russ Roberts: But, I thought your real point was: If we gave them money, they'd be free to buy chickens if they wanted; or they could buy a piece of a cow [i.e., a share of a jointly-owned cow--Econlib Ed.]; or they could buy a hammer; or they could buy access to electricity--or whatever it is. And presumably, people have a pretty good idea of what they need relative to what you think they need. And, chickens just obviously--to me--we're going to get more deeply into the economics of this--but it's obvious that chickens is the wrong answer. Whatever the virtues of chickens are, it can't be the case that giving 300 million something is--it's going to be better to give them money. I'm pretty confident about that. Now, you could argue that if you give them money they are going to use it on gambling, or drinking, or partying, or whatever you think is the wrong use of the money; but, 'They can sell the chicken, come on! They can convert it into money.' So, this romance, I think, 'Chickens are the key to the future,' like plastics are in the movie, The Graduate--it's just--or computers in 1978--it does seem a bit naive for someone who is clearly not a naive person. You could think of it as symbolic. But I think your point was: We've had these debates--which is what I think we talked about in a previous episode about different ways to help people with small amounts. Obviously, if you give them 1000 chickens--one person a thousand chickens, and one person a thousand of something else, and another person a thousand of something else, maybe it would really change their lives. But if we're going to give micro-amounts, like 5 chickens, or 1 chicken, cash might be even better. And you and I are both kind of fans of cash. There are problems with cash. That's a different episode. That's not what we're talking about today. We all understand that cash has drawbacks, too. But, I think you proposed--what was interesting about your response to Gates was: 'Let's have a horse race,' to add another animal to the metaphor mix. 'Let's see whether chickens outperform cash.' Right? Wasn't that the thrust of your point?

Chris Blattman: Yeah. And the reason is, is because it may be like a deeper point. It's not about whether--there's lots of reasons cash could be better than chickens, and for the reasons you've just mentioned; and there's some risks, as well. Those are all--and we don't have to talk about--I think generally the picture looks pretty good for cash, and we don't have to talk about the details today. But, the deeper point is the problem with a lot of programs--given that we're already giving--a lot of aid is donor agencies and governments giving very poor people stuff. It's giving them skills-training. It's giving them chickens. It's giving them cash. It's giving them other forms of capital. It's giving them productive assets. Right? And I'm excluding all the stuff that's about public goods, and water, and health--these are huge and they are important. And we're going to set them aside because they are just a different kind of thing. A lot of assistance is giving poor people stuff to either eat or to turn into something they can eat. Meaning, they can start a small business with it. And that's what the training and the cows and the [?] and some of the cash are mainly for. So, the problem with most of these programs is everyone thinks about the numerator: What's the impact of this program? And nobody thinks about the denominator, which is: What's the cost of providing this program? And then, we sort of divide that to get some sort of return. And when we compare those things, if you ignore the fact that some of these programs are dramatically more costly than others to deliver, then even if one is more effective in terms of its impact, in terms of how big a business someone can grow, if it's also 10 times as costly, that's a problem. And this is the problem with chickens, in some sense, is: Somebody has to go and buy the chickens; and then deliver them to the people. Or, somebody has to go and hire a trainer and bring them to the village, to train people in whatever it is you want to train. Maybe it's raising chickens--this is often a big part of these chicken programs. But maybe it's something that's standalone, like how to start a business. Or something. So, this is a problem, because those people--all that labor and all that transport is really, really, really expensive. And these people are often in remote areas. They are very poor. Even if they are in an urban area and not that remote, they are earning so little that giving some reasonably middle-class person in that country to go off and buy the chickens and then deliver them, or deliver the training, or even get the training to go and deliver the chicken, is so costly that it totally outweighs any potential benefits that--maybe not totally, but it grossly outweighs a lot of the benefits. Such that, some of these programs--the studies that have looked at chickens and giving people chickens and cows and goats randomly pay off, but it takes something like 15 or 20 years before they cover the costs. Basically, the impact is as much as the program costs. And that's a lot.

11:02

Russ Roberts: But I also thought your main--and that's a great point. Those are great point. And they raise a separate issue we may come back to, which is: 'Hey, I know what you need. Here.' I alluded to that earlier. It's like, 'You need to learn how to make butter. Here, let me teach you. I'll give you some butter machinery.' There's a certain lack of appreciation for knowledge and how hard it is to understand how to impact a person's life, and the material versus spiritual, and [?]--

Chris Blattman: Well, one of the other things that's going on--I have a lot of friends in these organizations. My wife works for an international rescue committee. I've spent a lot of time working with these organizations. And one of the--if you put yourself in their shoes--first of all, you don't always know. And the thing is that you've seen a lot of programs where people get chickens without the training--because that seemed like a good idea. Or they just get cash. Like, you see a lot of examples where people fail. You don't know if everyone fails. You don't know how many people succeed. You know a lot of people fail. And we know this is true. Like, the big cash experiments I've done, others have done--at least half the people don't really move ahead as a result of this cash. They start a small enterprise and it fails. This is what business is. And that's hard to--you don't know if on balance people are succeeding or failing, especially when you just give them cash. At least with the chickens you can see something there. And you are really hesitant to let people fail. So, you want to do, you want to invest as much as possible in people to minimize the risk of failure, because they are in your circle. You see them, you care about them, you are responsible, you've done something to their lives and in some ways you are responsible. And you have the ability to continue to help them. And you don't see all these other people you are not helping. So, doubling or tripling or quadrupling or even further increasing the cost of a program--not to make them dramatically more successful but just to reduce their costs of failure--is really natural human instinct. Some people would say that's their responsibility; you could make a moral argument that that's appropriate. But I think that's what drives this cost up. So, it's easy for me to sort of, from afar, say, 'Well, I don't know any of these people. They are all strangers to me, and I'd rather see more people helped for less; and if some fail, that's going to happen anyways,' rather than just investing in a small number of people and trying to keep them from failing. But, if I were in their position--certainly when I raise my children I don't take that approach. And that's another extreme example, right? So, you know, I'm sympathetic. But as a small NGO--a small Non-Governmental Organization--you can afford to make your own moral choice about whether you help a lot of people a little bit and let them fail sometimes, or if you help just a few people and really foster them through. But if you are the U.S. Government Aid agency, or you are the Ugandan Bureau of blah-blah-blah that's in charge of this, in some sense you don't get to make that choice. In some sense, your responsibility, I think, is to help the most people.

Russ Roberts: But I also thought you are making a methodological point with Gates which is really interesting, which is: Well, maybe it will have a good impact; maybe it won't. Obviously if you sat down, if you and I had 30 minutes with Mr. Gates we'd say, 'Gee, 300 million is a big increase. Maybe that's going to have an unexpected effect on--you wouldn't want to generalize from the 5% who have chickens now to the 30% you'd like to have them.' And he'd nod, say that's a good point. But I think you are trying to say, 'Let's try to actually measure this. Let's try to actually see--let's learn something. Before we launch this enormous, grandiose experiment, let's do a pre-experiment where we try to see which is better. And we'd learn so much that we would be able to help people much more down the road, not just with your venture.' Is that a fair summary?

Chris Blattman: Yeah. This is actually--I make [?] this point sort of in general: If I go to--pick a country--if I go to Uganda or like Uruguay[?] or Colombia which are all places where I spend a lot of time or have spent a lot of time, you'll see that the government or the World Bank or somebody saying, 'All right, we have this $5 million, or $100 million, or $500 million dollar program that we're going to roll out over the next 5 years; and we've written the program manual and we [?] spend all that money doing x.' And x is quite specific. It might be like chickens. It might be job training. And then they just launch into it. And inevitably it fails, because, what are the chances that you ever get that formula right from the outset when you implement it? And so, 2 or 3 years in they redesign and they start figuring it out; and, they don't have a lot of sense of what's going on. Maybe then they run some evaluations or they turn to more of the evidence. And let's say they get a slightly better program for the last half of that 5-year program. Then, that's a lot of money wasted. And if it's a credit to that country, meaning it's a loan to that country, then some future taxpayer of that country has to pay that back. Which seems kind of tragic. Or it has to be forgiven--some future taxpayer of this country has to pay that back. And that just was all money that--you know, that could have been averted. And I, so every time I'm there, I'm saying, 'Listen, instead of doing this, I'm saying: Why don't you do 5 or 10 things on a small scale for the first year? You have to scale up, you have to get moving. I understand the political pressure. So get moving; but why don't you just try 5 or 10 things? And maybe you then really rigorously study what you're going to do?' That would be fine. Sometimes we should do that. But even if you don't, it will probably be obvious which of those 5 or 10 things seems to be more successful than the others. Certainly the ones that are failures will be more obvious. And then you'll know with more precision, if you invest some money in studying it. So, as a general principle, this is just something that's not done with aid--the sort of trial and error and with some rigorous testing. And we've managed in the last 10 years to introduce the idea of randomized testing with randomized trials without introducing this idea of trial and error and moving ahead and trying many ideas. And that's a problem. I would like to see both. So, that's kind of what I'm saying--this is just another case. Instead of just scaling up your crazily specific program that's only been a little bit tested, why don't you try a few different things and then push ahead with the thing that's most successful? And in this case, I think we've got enough evidence to say, 'Actually, we're doing a lot of this chicken stuff, regardless of what Gates is doing. We're doing a lot of handing out of chickens and cows. And--I don't know if it's $1 billion, or $10 billion, or $100 million dollars a year, but it's somewhere in that range. And if we could spend $10 million dollars just to, like, tweak the direction of that, to sort of kill a bad idea and replace it with a less bad idea'--that's kind of what I want to see. I want to see us rigorously evaluate, like, run a horse race between these different things that we could do, these different varieties, kind of like trial and error but in a structured way. And then just replace the bad things with less-bad things. And thereby make a lot of very, very unfortunate people a bit better off. That's basically it.

18:05

Russ Roberts: So, I have a lot of things to say to that. It's a fantastic summary of, I think, the position you are taking. I just have to mention in passing, though: you said, 'Well, of course it fails.' And I think a lot of people would say, 'How could it fail? You are injecting all this money into these sectors, regions, poor people, whatever. It's got to have some effect--some overwhelmingly good effect. You're putting--you are going to add $100 million into this community?' And it's really, I think, a sobering reality that it often doesn't work very well. So I just want to mention that to the point where you say, 'Well, of course it doesn't work.' But I think most intuitive, everyday people would say it would work, akin to their natural inclination to inject money into the U.S. school system. 'Because the more you spend, the more education you get.' Which of course isn't true. It might be true. But it need not be true. And, if the incentives--

Chris Blattman: Right. And I would say, even if you are more optimistic--and I think if you put in more input you are going to get more output. You put in more money to the educational system, I think probably you are going to get more education, or better outcomes--not always, you are right. Same with this aid, chickens. The chickens are not going to be a bad idea. They are not going to all fail. It's just: We're putting so much money into this that--not only is someone going to have to pay back in future, but it's such a missed opportunity. Like, it's really desperate to--if you were making $1 or $2 a day, this means like, your child is probably going to--the chance your child dies in infancy or of some disease or that some crisis hits and really terrible things happen to someone in your family is just so high. And that's also true at any level of poverty. And it's just more dire and risky, the poorer you are. So, to sort of callously and irresponsibly, in my mind, not try to use the sort of trial-and-error approach and try to do the right thing, and rather than just have 33% of Africans or something producing chickens--they might be a bit better off, they'd probably be better off. What if--that's such a missed opportunity to really change some people's lives? One of the rare instances where I really think aid can have a big impact. It really is an area where we can be super-effective; and I don't say that about a lot of things. And so, it's such a sad, tragic thing not to do this more responsibly.

20:34

Russ Roberts: Well, I want to challenge the premise that underlies that, even though I'm sympathetic to it and it sounds great. We had on the program a while back, Adam Cifu, author of a very provocative book, co-author of a book, Ending Medical Reversal, where he shows that so many times a study will be done, a cross-sectional, longitudinal study, a statistical analysis of some device or some dietary change, some relationship in epidemiology, is alarming or effective, whatever it is. And people start doing this technique or avoiding this technique. And then, 15 years later, there's an actual randomized control trial where people are put into two different groups: You're not using statistical techniques to try to hold things constant; you are actually using a real experiment, not a pseudo-experiment. And you find out that the original finding doesn't hold up under the randomized control trial. So, this is why--we can call it the gold standard of experimental science. It's what scientists do: They see if things can be replicated; they try to actually test things directly. It's a really nice thing. And, there's a huge--I don't want to call it a fad--a trend, we'll call it a trend--it could be a fad--in Development Economics to do randomized control trials. Which is what you're talking about: Wouldn't it be great, do 5 or 10 experiments to see what works and what doesn't work? But, the problem it seems to me is that unlike epidemiology or medical things where a trial could actually often illuminate what does and doesn't work, it strikes me that in human societies, that's a lot more difficult. So, an example we've mentioned before on the program is deworming. Deworming, a lot of excitement about it because some experiments had showed it to be very effective in helping children--if you took the worms and parasites out of their system, they could sit in school longer, make more money, etc.--have better lives. But, it's not obvious that it scales. It's not obvious that it worked in other villages. It's not obviously--etc. So, isn't [?] part of the problem here--and is this a reality or am I being too skeptical?--that, the kind of knowledge that you would like to produce with those trials in the early stages of a large-scale rollout of a program--they are not necessarily going to be as reliable as a true scientific experiment would be?

Chris Blattman: Right. Well, yes. So, this is basically right. But the question is--I guess, my argument would be, I guess I think is a pretty basic premise: Through the accumulation of lots and lots of empirical evidence and theoretical thinking and then using that empirical evidence to sort of understand our theory of poverty--why are people poor and what kinds of things make them less poor? The accumulation of lots of evidence from lots of places is how we get a better theory. This is just how it works; and it will be harder than in physics or medicine for exactly the reasons you say. But, there's a big difference here. So, the deworming excitement is coming off of--I don't know if you know this: I worked on this experiment when I was a graduate student. This was like one of my first jobs in development: I ran one of the followup surveys.

Russ Roberts: I did not know that.

Chris Blattman: Yeah. So, I ran the 5-year followup survey. So, I spent a lot of time with these kids who got this deworming medicine. It's a very incestuous group, a small, incestuous group, development economics. So, listen: There was one big trial showing big effects, and it was on the shores of Lake Victoria in Kenya, which is the birthplace of humanity, and then not coincidentally the birthplace of human parasites. So, an impact of deworming medicine there is going to be not surprisingly quite impactful; and if you go somewhere else, where you are not on the shores of a parasite-filled lake, then maybe it's going to be different. And that doesn't surprise me. And we don't actually have a lot of trials of deworming medicine elsewhere. And, the other ones haven't been very good, or they haven't been very long term, or they haven't measured economic outcomes and educational outcomes. So, we just don't know. Whereas, when it comes to policy, we have dozens and dozens and dozens and dozens and dozens. So, it's not just randomized control trials but all sorts of evidence. A great book is Poor Economics, by Abhijit Banerjee and Esther Duflo, who sort of pulled together all the descriptive and observational and qualitative, and experimental data. And just a lot of it points to a particular view of poverty--that people have constraints; that from little access to credit and to capital and little access to insurance; and overwhelming evidence that just one of those constraints is relieved, maybe cash, maybe by a chicken, that people leap ahead. That you can make improvements on the margin. And it's not some magic formula. And you can also improve the way financial markets function; and then people get more access to insurance and credit and capital and things. So, it's just a totally different story. And everything I'm saying about both chickens and cash are very consistent with that theory. And now, the randomized trials which I was proposing we do, on large numbers of people and large numbers of countries in different parts of the world, in a way that we could get at what you're saying is sort of getting at the finer details: saying, okay--not knowing if we can make any general statements but, do we see a general pattern across many types of people in many types of places that chickens tend to be lower return than cash? That, people tend to use cash wisely in many places. And then also, very importantly, to figure out what we call the general equilibrium effects. Or the spillover effects. Like, what happens to the whole local economy when you get this giant influx of chickens, or cash? Like it's good? Bad? And it could go either way. We don't really know. So, there's a really different evidence base. And then, the kind of experiment I was proposing, which costs $15 million dollars or some number like that because it's much bigger than anything that's ever been run, is in some sense designed to get around exactly this concern.

26:48

Russ Roberts: So, that's a nice defense. In fact, you are kind of channeling your inner Lant Pritchett there. When you talked about the accumulation of knowledge, he made this similar argument, which I found unpersuasive. But, I find it a little more persuasive in your case. He was talking about general economic theory that's small--any one piece of economic research may not be that informative but it eventually creates this great base of knowledge. And I think that's romanticizing what economic research does, somewhat inaccurately. But let's put that to the side--

Chris Blattman: Well, if I could just interrupt--one thing is: I don't think that knowledge is accumulated to a consistent understanding of how something works across lots of different areas. I also study--I mean, I'm a professor of global conflict studies. In principle, I spend most of my time studying violence, as well. And, we don't really have a good understanding of what reduces violence. Like the things have not accumulated to a coherent answer. Or if you take the macro study of aid, and whether aid is good or bad, and what its good or bad affects our economics or politics--we don't have a coherent answer. It's sort of cumulated into a mess. That was my--

Russ Roberts: Yeah, that was my--it's my, it's close to my view.

Chris Blattman: But there's--but, right. But, other things have turned out--sometimes in certain medical research, and in this case, I think [?] our micro-understanding of poverty turns out, 'Oh, this thing seems to work pretty much similar ways'--you know, we're wrong in lots of details I'm sure. But, more than other things I've understood. And this is why I come on podcasts, you're right, about we should act on this and I don't come on and talk about violence. I don't have a coherent message about what we should do to reduce violence. I don't know that we've accumulated a coherent answer. But, in this case the world works in a simple or straightforward-enough way to have enough evidence, or something about, something the situation is just, I think, points us to more confidence than a lot of other areas. And so, great. And the wonderful thing is it can, like, a lot of people who are in a really, really, really terrible place can benefit from that, in a relatively simple way. This is one of the things that aid does well. Like, just logistically, like just get a lot of stuff out there that seems to work on its own.

29:04

Russ Roberts: This isn't where I thought we'd end up. But let's stay here for a while, because it's so interesting. You are telling me that the aid literature is indecisive--imperfect. Which I think is true. Many people would disagree with you, by the way. I think some people would say, 'Oh, we know exactly what works.' In fact, Lant Pritchett said so: we know it's property rights and free markets and prices. And, while I'm sympathetic to that, I think it actually is more complicated than that. Other people would say, 'We know what works.' Jeffrey Sachs, on the program, 'We just need to give a lot more money. We need to spend it well.' And he thinks he knows how to spend it well. But you are skeptical. Okay. Fine.

Chris Blattman: Well, you know, but Jeffrey Sachs--if you want to say, like an African nation--how do we help an African nation go from $1500 a head to $3000 a head? That's not necessarily a hard problem. Or, you know, that's a hard problem. But it's a much different problem to say, how does that nation, what could we do as outsiders or what could that government do as insiders to get to $20,--- a head? Some sort of like middle-income status. And then nobody has a good answer to that. So, sometimes they are just talking about different changes. When you are talking about development, they can be talking to different things.

Russ Roberts: That's a great point. Just what I was going to say, actually. So, what I was going to say is that, if you are telling me that at the micro level, we know that it's good to give people more access to financial markets--the ability to borrow--because they are often financially constrained. Or, we know that if we give them things they will be better off--it's not so interesting, really. But it really comes to what I think is the crux of the matter. Which is, the, what I would call, the real essential point that Pritchett was upset about in that previous episode, which is the following. He is claiming that--and I have mixed feelings about this, but I don't care, it doesn't matter; whatever you have to say--he's claiming that the real problem isn't poor people. It's poor countries. These people are in places with bad economies: Bad government, bad economies. And to put a band aid on their economies with a chicken is the wrong thing to be spending time on. We ought to be spending time on [?] we ought to figure out how to liberate their economy, liberate the skills to cooperate together in a market setting--which is how we know, that's [?] how you get to $20,000. When you get to $20,000, you've got to have a vibrant labor market. You've got to have a vibrant skills market. You've got to have people trade and exchange with each other within a country and outside of a country. And, we know all that already. And so that's what we ought to be spending our time on, not whether 5 chickens are going to improve somebody's life. Of course they would. They'd improve mine, too. I'd eat them. I like chicken. My wife, she's a vegetarian, but she'd be happy to see me happy. We know all that. So, what's the--what is the defense of the approach that you are suggesting of these micro-experiments to get people truly out of poverty? We understand--what you're saying is all true. It's not important.

Chris Blattman: So, you know, these things aren't in complete contradiction. So, if you want to make--I think Lant's larger--he's got two big points. Lant--I think I've mentioned to you in the past--Lant is, I mean, Lant was one of my first teachers in Development, and still remains sort of one of my idols in Development. And everything of his I can read, I do read, because I think he's got--you know, he has a really, he says a lot of original things and he has his finger on the pulse of these things. And he's made two points here that I think are true. One is that the Development community at large has tended to focus on sort of this weird, extreme form of poverty rather than just thinking of other people who are vey poor instead of extremely poor. So, there's this artificial threshold of $1, $2 a day that distorts a lot of policy. That's fine; I agree with that; and a lot of things--all the chickens and cash stuff I'm talking about, you can ignore that concern. You could say, 'Well, I think the chickens and cash could help someone who is extremely poor and very poor and just a little bit poor.' All these people have limited access to capital. I think that's what we would, what we are learning from the evidence, what we would learn from my experiment. His bigger point is that there is maybe a misallocation of time and policy in academia: That, a lot of people are just focused on the small stuff; that there are these bright, shiny [?]s that come along; it's very appealing to get an answer that a lot of people--there's all this data and computer technology that lets us do, answer a lot of small questions while [?]--

Russ Roberts: You get an article real quick; you get an article on your CV (Curriculum Vitae).

Chris Blattman: Yeah. And so there's two--with a profession--the world would be a better place if more smart policy-makers and more smart economists and political scientists were spending more sweat and brains and money on big questions about growth in this case[?]. And then, and so--and I think that's probably right. I think we probably do have a slight misallocation--I think you could make a good argument. But that doesn't mean--it doesn't mean--he sort of made a--he sort of exaggerates as some do and say, 'We should only focus on growth. Most people should focus on growth.' And I think that's wrong for two reasons. One is, I think it's wrong big thing to focus on. And we could get to that. But I think more immediately, I think you can't ignore the poverty. Because, what this says--so listen: If I say, 'I'm going to--everyone needs to be focused on growth.' If we just dedicate all this time, even if he's right, and we were able to make future unborn generations better off, because we're spending all this time and money and brains and energy, on growth, the fact is that there's still a lot of horribly-off people today. Now, if you, if you sort of--some people make that tradeoff. They'll say, 'Listen. Better make 20 generations much better off than trade off making them slightly better off just to make these people less poor.' That's just--someone who is, say, a utilitarian who wants to make the most good for the most people, would say we need to sacrifice today's generation and help these future generations. That's the way to maximize the good. But if you have sort of a different moral calculus--that if you think, for example, that we're only as good as, say, the least among us; or that we have a responsibility to help the very, very least among us even if that means we wealthy people or future wealthy people who are not yet born will be substantially worse off--that's also a defensible claim. And I guess I would say I'm willing to make that tradeoff, to some degree. And I think a lot of--I think that's fundamentally why so much policy is dedicated toward alleviating poverty. That, even if we knew how to make future generations off with certainty, it would still make sense to spend a lot of time worrying about poverty today. That's a--not everyone is going to feel that way, but it's a totally justifiable way. And that's how I feel.

36:03

Russ Roberts: So, I'm not a utilitarian. But I do think we should improve future generations at the expense of the current one--for a different reason. So, let me lay that out. And you can respond. The people themselves who are alive today would want us to do that, because they love their children and their grandchildren. And if I said to them, 'I'm going to give you a choice. I'm going to give you a bunch of chickens and I'm going to make your suffering less dire,' or, 'You're not going to get any chickens. You're going to lead a miserable life, but your children and grandchildren are going to lead very, very greatly improved, materially improved lives,' I think most, if not all people would jump at the chance. And we see that people do that all the time. They take risks, and they impoverish themselves. They risk death to come to richer countries. So, that would be my argument there. But I think, to me, the real issue is just the severity of the poverty. For people who are, you know, near death, that, yes, we need to do something for those people now. For people who are just having a hard time--if we can, I add that proviso of course, if we know how. And I think people should choose morally to do that. But for people who are just uncomfortable, I think they'd be thrilled to live with that discomfort and have their children thrive.

Chris Blattman: Right. So, I mean, we can debate this. On some level it's a moot point to--yeah, I mean, it's a moot--sort of the defense of my argument--where we should--and I want--I'm, personally in my life, I agree with Lant[?]; I spend too much time on stupid randomized control trials and on poverty alleviation. It's important, but this is not what I think is really important or really where I can, you know, contribute in some way. So, in some sense I'm unbalanced. I fundamentally agree. But still I think this experiment, this grand thing that I pitched to Bill, Bill Gates, is important. And I would even work on it. The last thing I really want to do--it's really miserable to run these--it's really, really hard and miserable. I hate running these things. It's so logistically and managerially intensive. And you don't think. You just sort of make things happen. And I'm okay at that, I'm pretty good at that. But I don't enjoy it. And I would rather spend my time on something else. But I will do it, if I have to. Because nobody else seems to be doing it. I will do it, because we live in a world not where we are making these grand, philosophical choices, but how to orient aid--and we live in a world where the rich countries and poor countries have made the decision that we are going to spend $10 or $100 billion a year giving the very poorest people stuff. And if I can do a little thing, spend, like 10% of my time for 3 years and $15 million dollars, somebody else's money, to sort of say, 'Guess what? You could be twice as effective and really make an impact on people's lives if you just killed this bad idea and did something less bad,'--that's a huge thing. There's a way to just sort of--given the world we live in, on the margin, there's a handful of studies that I think could really reallocate how this giving people stuff is done. And, and that would be a big thing. And I think that's actually what--I think because I look back at the last 10 years and the cash-transfer work that's been done, including my own experiments--and I say, 'That's the impact this had.' Despite the fact that I wasn't working on what I really wanted to work on, it was important to work on and I actually think that had a lot more immediate impact, precisely because we live in a world where there's just buckets of money, pipelines of money going to these places, being spent poorly. And that can be improved, on the margin.

Russ Roberts: Superbly said. I salute that. Beautiful.

39:41

Russ Roberts: Has Bill Gates responded?

Chris Blattman: No. And, you know what? Someone pointed out to me--

Russ Roberts: Sound of crickets--

Chris Blattman: Well, I even--I got a chance to--so, someone pointed out to me after I wrote this letter that, 'Do you know that Bill Gates follows your Twitter?' Then it turns out he only follows, like, 300 people; and a number of them are development people, for obvious reasons; and one of them, it turns out, was me. So, I thought--I had no idea. I'm going to direct-message Bill Gates. Maybe he reads his Twitter feed. Like, why else would he only follow it, 2-300 people? So I even direct-messaged him on Twitter--politely, saying, 'With all due respect, this was my [?]; I'd love to have a conversation about this, if you're interested.' And then: Crickets.

Russ Roberts: Well, I don't know that he listens to EconTalk; but this could put him over the edge, if he does. You may be getting--when this comes out, you'll probably get a summons. And I'd be happy to interview Mr. Gates, by the way.

Chris Blattman: I'm a marginalist, right? I think that every little bit matters.

Russ Roberts: Definitely raised the probability. And I want to just say publicly I would love to interview Bill Gates for EconTalk. So, Bill, if you are listening, or if someone who knows you is listening and thinks that would also be a good idea, please get in touch. But it is an interesting question. By the way--this is a sub-point; and you're sort of--I think you have feet in all the various camps: The academic world--there's the academic world; there's the money world--which would be the Gates foundation--and then there's this weird, nether-region of international organizations like the World Bank that has academic people in it, in and out of it--they come and go. So, that whole thing is--they all have their own rules. I'd like to hear you react to the idea that the incentives are what ruin where development economists spend their time. Of course, people have written not-so-nice things about the appeal of traveling to exotic places and having nice meals and Range Rovers to carry you around, and all that. But, talk about the incentives that you experience as an academic, but also as somebody who is in these different worlds, even if you're not--you don't get calls from Bill Gates's cellphone.

Chris Blattman: Mmmhmmm. The incentives to go do these kinds of--

Russ Roberts: Whatever it is. I mean, they are incentives that encourage some people to just do all kinds of things--articles on this or that, spend time in a particular country because the World Bank funds it. And all of the--we do what we like, and we also care, most of us do, about what makes the world a better place. As you point out. And you confessed a minute ago that you wish you'd maybe spent a little less time on some of these things and more on the bigger things. So, just reflect on that.

Chris Blattman: Well, answering the bigger questions would still put me firmly, even more often, in foreign places. Like, right now, I'm really interested in, I happen to be studying a lot of gangs in Latin America and also in Chicago. And, the thing that's holding me back from being more effective is my lack of tie-in to go and spend time in these places. One of the fundamental incentives is that, I think that to answer important questions about other parts of the world, you have to spend a lot of time in other parts of the world. And you also--not just talking to people and collecting data, but also building relationships with other academics who are there or other policymakers. Because it's not an individual production function. So, that's--answering the question requires be there, big or small question, whatever if you are going to do this right. The incentives in the economics profession, for a long time, and to a lesser extent now, were always against young economists and especially graduate students going and spending lots of time in the field. And in some sense, there is still a discouragement to spend a lot of time often in other countries: still spend relatively little time compared to other academic disciplines. And it used to be zero. There's--an interesting set of people to bring on would be people like Michael Kremer, Chris Utry, who are development economists who broke the path in the, maybe the 1980s and 1990s by spending a lot of time in places like Ghana in Chris's case, and Kenya in Michael's case, doing this kind of work, pioneering it. There are others as well. They sort of stand out in my mind. And showing that you could do important work, and making development economics credible again in the profession. And showing--and sending their students to Ghana--like, this is why--why was I in Busia[?], Kenya running this deworming experiment? Because Michael's student, Ted Miguel [?], he sent to run some experiments and collect data. And Ted did his dissertation there; and he started his own studies in Busia[?], Kenya. And then I showed up at Berkeley, and Ted was this young prof, maybe just one or two years in, who became my dissertation adviser. And he sent me to Kenya, my first semester. And then, why did I end up working on violence in northern Uganda? Because the second time I got sent to Kenya, I was sitting in a cafe, and I met a woman--because it takes 20 minutes or 30 minutes for the Hotmail page to load up, which should tell you what year it was. And so I struck up a conversation with a woman next to me who was doing this qualitative study of children affected by conflict and child soldiers in northern Uganda. And then a year later I was landing by plane in northern Uganda to run a survey that looked a lot like what Ted was doing in deworming except I was studying the effects of violence. And that became my dissertation. And it also so happens that we produced several papers and a marriage, and now two children. Because they're more important than the papers.

Russ Roberts: Yeah; of course it is. But the best part about that story is--most unintended consequences are negative. But here we have the positive unintended consequence of a lousy internet access. That you were sitting there for 20 to 30 minutes waiting for your page to load, and you meet your future wife. What a great--

Chris Blattman: Right. But my--then I've sent my students to go work on my project in northern Uganda, and later Liberia; and now, Colombia. And now, they are graduating, they're Ph.Ds., they're getting jobs; and they are doing amazing research; and they are sending their students to these--or wherever they happen to work. And so, this has been this amazing thing that has happened: You talk about the incentives. It's against the grain, against the incentives to go and invest all this time really understanding a place. All the inputs required for all these experiments, or any big study, data--you have to collect your own data in a place like Africa. Most of the time. And so, the incentives are all against that. So, why are people doing it? I think they are really passionate about the questions. And, of course, now there's its own set of esteem[?], and you have your own dysfunctions as a profession; and we're doing a lot of the wrong things; and so on, and so on. But, nonetheless, like, this is still a big, positive change. And I've always said that the most important thing about randomized control trials is not the causal effect that lots of people, we've identified. The effect of like--the important part about the deworming experiment in all this time in Kenya by all these people is not--it's now[?] the fact that Ted Miguel and Michael Kremer could lecture you for hours on Kenyan politics and development in a very sophisticated way that has nothing to do with the causal estimate. Economists now have a much richer understanding of the way world works, how the aid sector works, what the political and social and organizational dysfunctions are from everything from USAID (United States Agency for International Development) to some government in some far corner of the world. There's this rich knowledge that was just not there before that I think is really affecting the way the theories were developing. It's affecting the cognitive teaching; it's affecting the questions we're asking; it's affecting the advice. And I think that's been so much more important than any stupid little causal effect.

Russ Roberts: That's great. And I think Adam Smith would be happy about it. Maybe I'm wrong. I like to think of Adam Smith--maybe I'm romanticizing, which I am prone to--but I do think of him as open to the richer understanding of human activity than our sort of blackboard theories; and obviously was a student of many aspects of human life, not just the financial and monetary side.

Chris Blattman: Right, right.

Russ Roberts: What you are really arguing is that it's good that we've become more like sociology. Which could be true.

48:37

Russ Roberts: I would have argued that the reason we shouldn't work on big picture issues and big picture questions is because we don't know much about them. So, I think most people would argue that governance, political institutions are a big problem. I suggested recently that what we should do with that $15 million dollars, say, is pay a leader to leave, and replace him with someone more--of course, obviously, replace him with another dictator is the problem. But if you could change a political system, that would be the way you'd spend your money. We don't know how to do that. And the idea that we should be spending more time understanding that doesn't necessarily follow; the idea that that's the most important thing. If we can't figure out the levers to improve it, it really doesn't matter. So, what are your thoughts on that?

Chris Blattman: I'm more hopeful. I think we don't know a lot about it. I think we also--I think that--I actually teach a class on this, and it turns out Lant Pritchett has just written a book on this as well, with two co-authors. He's focused more on building, on something a bit narrower, which is building state capabilities--which is basically making states more effective. And that includes public sectors and governments. It's actually a free book online, and I think it's actually one of my favorite books I've read this year. So, he didn't talk about that, but--

Russ Roberts: What's it called?

Chris Blattman: I think it's called Building State Capabilities.

Russ Roberts: We'll put a link up to it, for this episode.

Chris Blattman: Exactly. And he even negotiated to be able to get this free online. And I think he has a course, as well, where you can go along this as well. And so, there's both a book and a free course online. And I teach a class. Sometimes I call it "Order and Violence." Sometimes I call it "Political Economy Development." But, it's really about these big questions about saying: You know what? What doesn't--I think Lant would agree with this: Growth is the wrong way to think about this. We don't need more people focused on economic growth. I think we need more people focused on understanding state capabilities, and democratization, and politics in these countries. There's a fair amount already: most other political science--there's a lot of bad research; there's a lot of good research. And I--by spending a lot of the last 10 years reading that research and trying to teach it, and learning it; and when I say I want to reorient what I do, in some ways, I--this is the book I would like to write. Probably I won't write it for 10 years. But one day I will write this book about this kind of political development, if you will. And I think that's fundamentally the problem. And it's hard for me to believe, partly because I've read so much that really has changed the way I think about how the world works; and I think if it could be translated into terms, sort of messages that people could absorb and understand in a less academic way, I think it would be really impactful. So, one, I think we could translate more; two, I think we could do more of it. But it kind of a big--it's a big risk. It's hard to see immediate payoffs. Yet, I guess the reason I think it can't be ignored is, maybe you could put it simply like this: That, China and Brazil and Russia and Vietnam and a whole host of countries that are currently like middle income, or a little poorer or a little richer, are generally growing, you know, at a reasonably quick pace--like, say, I don't know, maybe it's 5% a year. In some years that will be higher; in some years that will be lower. But they are basically on their way to being high-middle, or upper-middle--or even upper-income countries. So, they are growing. And as long as there is no major world cataclysm, then in 20 years, those are going to be basically rich countries. And that's going to be most of the population of the world. And that's probably most countries in the world. But there's a bunch of countries, a couple in, you know, Central and South America, maybe Bolivia, certainly Guatemala, and maybe like a Honduras or Jamaica, and much of sub-Saharan Africa, and some parts of Central Asia that are just not growing at all, or they are growing a little bit but not very fast. Or, they are growing a little bit but there is a lot of inherent political instability and it's hard to imagine that growth lasting for long before there's some tanking[?]. So, it's possible that in 15 or 20 years there will be about 20 or 30 countries in the world that are still enormously poor and unstable, next to what are generally a relatively homogenous group of middle- and high-income countries. And that's going to be a bad situation. It's not--it's a better situation than today, where we've got a lot of poor people. But there's going to be this growing inequality; and these are going to be places of instability. And there's going to be a lot of negative spillovers for the

          Free Market University---in Guatemala        
What a cool thing!!



HT Ideas Matter.
          2008 Crash--unfettered government, not unfettered capitalism        

Washington and Wall Street: The Revolving Door


The recent report of the Financial Crisis Inquiry Commission blamed all the usual suspects — Wall Street banks, financial regulators, the mortgage giants Fannie Mae and Freddie Mac, and subprime lenders — which is tantamount to blaming no one. “Reckless Endangerment” concentrates on particular individuals who played key roles. --NYT Sunday Book Review

In particular, "when the Clinton administration called for a partnership between the private sector and Fannie and Freddie to encourage home buying...[T]axpayers were unknowingly handing Fannie billions of dollars a year to finance a campaign of self-promotion and self-­protection."

In our mixed economy, statists like to blame capitalism---when it is actually the toxic mixture of free markets and government intervention that is so destructively destabilizing.

For explanations which counter "market failure" theories of our recent financial crash, read the rest of the book review, and then consider reading the book.
          Heartland Institute        

The Heartland Institute

Background

The Heartland Institute is a Chicago-based free market think tank and 501(c)(3) charity that has been at the forefront of denying the scientific evidence for man-made climate change. The Heartland Institute has received at least $676,500 from ExxonMobil since 1998 but no longer discloses its funding sources. The Union of Concerned Scientists found (PDF) that “Nearly 40% of the total funds that the Heartland Institute has received from ExxonMobil since 1998 were specifically designated for climate change projects.” [1]

David Padden founded The Heartland Institute in 1984 and served as its Chairman between 1984 and 1995, co-chairing with Joseph Bast. Padden was also one of the original members of the Board of Directors of the Cato Institute. Padden, a Chicago, IL-based investment banker and then owner of Padden & Company, passed away in October 2011. [13]

Padden also served on the original Board of Directors of another organization founded that year, Citizens for a Sound Economy, which later split into two groups, FreedomWorks and Americans for Prosperity (AFP). The Cato Institute and both of these organizations received their initial seed money from Koch Industries. [14]

According to a July 2011 Nature editorial,

“Despite criticizing climate scientists for being overconfident about their data, models and theories, the Heartland Institute proclaims a conspicuous confidence in single studies and grand interpretations… . makes many bold assertions that are often questionable or misleading. … Many climate skeptics seem to review scientific data and studies not as scientists but as attorneys, magnifying doubts and treating incomplete explanations as falsehoods rather than signs of progress towards the truth. … The Heartland Institute and its ilk are not trying to build a theory of anything. They have set the bar much lower, and are happy muddying the waters.” [15]

2012 Heartland Document Leak

In 2012, leaked documents revealed some of the Heartland Institute's initiatives and climate change strategy including a tailored high school curriculum. As reported at the New York Times, (“Leak Offers Glimpse of Campaign Against Climate Science”) the Heartland Institute would have help from the Charles G. Koch Foundation to “cast doubt on the scientific finding that fossil fuel emissions endanger the long-term welfare of the planet.”  

The documents also discussed “Operation Angry Badger,” which the New York Times described as “a plan to spend $612,000 to influence the outcome of recall elections and related fights … in Wisconsin over the role of public-sector unions.” [2], [3]

Heartland has promoted itself using a partial quote from The Economist that describes Heartland as “the world's most prominent think-tank promoting scepticism about man-made climate change.” However, the full paragraph in The Economist's 2012 article provides a more complete picture: “The Heartland Institute, the world's most prominent think-tank promoting scepticism about man-made climate change, is getting a lot of heat.”

Heartland lost an estimated $825,000 in expected donations, a number of directors and almost its entire branch in Washington, DC shortly after putting up a billboard comparing those who believed in man-made global warming to the Unabomber Ted Kaczynski. At its annual meeting in Chicago, the institute's president, Joseph Bast, said Heartland had 'discovered who our real friends are.' The 100-odd guests who failed to show up for the '7th Climate Conference' were not among them.” [4], [5]

Heartland Institute and Tobacco

In the 1990s, the Heartland Institute worked with the tobacco company Philip Morris to question the science linking second-hand smoke to health risks, and lobbied against government public health reforms. Heartland continues to maintain a “Smoker's Lounge” section of their website which brings together their policy studies, Op-Eds, essays, and other documents that purport to “[cut] through the propaganda and exaggeration of anti-smoking groups.” [6]

In a 1998 op-ed, former Heartland president Joe Bast claimed that “moderate” smoking doesn't raise lung cancer risks, and that there were  “few, if any, adverse health effects” associated with smoking. In a fundraising letter to Phillip Morris, Bast wrote to a Phillip Morris executive  that “Heartland does many things that benefit Philip Morris’s bottom line, things that no other organization does.” Later, in 2014 Bast denied that he had claimed cigarettes were not harmful, until confronted with his own op-ed. [7], [182], [8]

Roy Marden, past Corporate Affairs Policy Analyst and Manager of Industry Affairs at Philip Morris, served as a board member at the Heartland Institute from 1996 until 2008. According to Heartland, “The public health community's campaign to demonize smokers and all forms of tobacco is based on junk science.” Joseph Bast, current President and CEO, was a strong defender of RJ Reynolds brand Camel's “Joe Camel” campaign, which some have argued (here, and here, for example)  targeted younger children. [9], [10], [11], [12]

Incoming President Tim Huelskamp

In June, 2017, The Heartland Institute announced Kansas Rep. Tim Huelskamp would be replacing Joe Bast as president, to begin working starting July, 2017. Bast said he would remain with Heartland as CEO until some time in 2018. [182]

Huelskamp is former chairman of the Tea Party Caucus and a member of the far-right House Freedom Caucus. Huelskamp maintains a lifetime score of 5% with the League of Conservation Voters, with a score of 0% in 2016. A full list of legislation sponsored or cosponsored by Huelskamp is available at Congress.gov. According to his voting record tracked at OnTheIssues, Huelskamp has consistently voted against any legislation that would combat fossil fuel emissions or climate change. [183], [184], [185], [186]

According to data from OpenSecrets, Huelskamp's top donor is Koch Industries and he has received the highest lifetime campaign contributions from the Oil and Gas industry, totally over one-quarter of a million dollars. Below are career totals added up by OpenSecrets. [187], [188]

Industry Total Contributor Total Indivs PACs
Oil & Gas $252,393 Koch Industries $40,900 $3,400 $37,500
Retired $209,441 Watco Companies $36,200 $36,200 $0
Crop Production & Basic Processing $196,178 American Bankers Assn $35,000 $0 $35,000
Republican/Conservative $167,254 B&G Production $34,400 $34,400 $0
Leadership PACs $152,163 House Freedom Fund $34,025 $250 $33,775
Health Professionals $124,755 National Assn of Home Builders $32,500 $0 $32,500
Misc Manufacturing & Distributing $102,850 Russell Stover Candies $32,200 $32,200 $0
Commercial Banks $93,600 Vess Oil Corp $30,000 $30,000 $0
Real Estate $75,310 Hodgdon Powder $28,700 $28,700 $0
Railroads $67,848 Onyx Collection $25,500 $25,500 $0
Agricultural Services/Products $65,700 KMG Tool $24,400 $24,400 $0
General Contractors $59,647 Berexco Inc $23,700 $23,700 $0
Food & Beverage $59,550 National Auto Dealers Assn $22,500 $0 $22,500
Home Builders $58,900 Citizens United $22,000 $0 $22,000
Securities & Investment $55,286 Every Republican is Crucial PAC $20,000 $0 $20,000
Misc Finance $53,250 AT&T Inc $19,500 $500 $19,000
Livestock $51,025 American Medical Assn $19,000 $1,000 $18,000
Insurance $50,613 National Assn of Realtors $19,000 $0 $19,000
Retail Sales $44,700 Ariel Corp $18,900 $18,900 $0
Lawyers/Law Firms $42,422 Ag Services $18,250 $18,250 $0

Tim Huelskamp also a signatory to Americans for Prosperity's “No Climate Tax” pledge. The pledge reads as follows:[189]

“I, ________________, pledge to the American people that I will oppose any legislation relating to climate change that includes a net increase in government revenue”

He also told HuffPost that he didn't believe that climate change was “settled “science.” [190]

“I don’t think there’s a scientific consensus on that,” Huelskamp said. “If you want to print that life begins at conception, that’s settled science.”

Stance on Climate Change

“Probably two-thirds of the warming in the 1990s was due to natural causes; the warming trend already has stopped and forecasts of future warming are unreliable; and the benefits of a moderate warming are likely to outweigh the costs.

“Global warming, in other words, is not a crisis.” [16]

“You may also know us from our work exposing the shoddy science and missing economics behind the global warming delusion. Our videos, books, studies, and international conferences changed the debate and led to the defeat of 'cap and trade.'” [17]

“Some environmentalists call for a 'save-the-day' strategy to 'stop global warming,' saying it is better to be safe than sorry. Such a position seems logical until we stop to think: Immediate action wouldn't make us any safer, but it would surely make us poorer. And being poorer would make us less safe.” [18]
“Unfortunately, global warming is an issue that is well suited to political demagoguery, which can be defined as pandering to misinformed voters and promising unrealistic solutions. Since opinion polls indicate a majority of the public believes warming is happening, politicians might think the safe strategy is to say 'I believe global warming is a serious problem and I support measures to reduce global warming pollution by supporting renewable fuels and energy efficiency.' Such politicians should be 'outed' for claiming to be smarter than scientists who have studied climate for many years and for using scare tactics to win elections.” [19]
“There is no consensus about the causes, effects, or future rate of global warming.” [20]

Funding

501(c)(3) Charitable Status

According to Heartland in 2011, “Approximately 1,800 supporters support an annual budget of $6 million. Heartland does not accept government funding. Contributions are tax-deductible under Section 501(c)(3) of the Internal Revenue Code.” As of June 2015, that number has increased to 8,300 supporters, (budget remains listed at $6 million). [21], [22]

Computer scientist John Mashey filed a complaint in 2012 with the IRS questioning Heartland's charitable status: 

“I believe there was a massive abuse of 501c(3),” Mashey said. “My extensive study of these think tanks showed numerous specific actions that violated the rules – such as that their work is supposed to be factually based. Such as there was a whole lot of behavior that sure looked like lobbying and sending money to foreign organizations that are not charities.” [23]

Mashey's 2012 report on the Heartland Institute (see PDF) also examines the finances and actions of other organizations including the Science and Environmental Policy Project (SEPP), and the Center for the Study of Carbon Dioxide and Global Change (CDCDGC).

According to his report (p. 39), the Heartland Institute has received roughly $395,000 from the tobacco company Philip Morris.

Heartland no longer reveals their individual donors, they explain, because “listing our donors in this way allowed people who disagree with our views to accuse us of being 'paid' by specific donors to take positions in public policy debates, something we never do. After much deliberation and with some regret, we now keep confidential the identities of all our donors.” [24]

Greenpeace's ExxonSecrets reports that the Heartland Institute has received $676,500 from ExxonMobil since 1998. Greenpeace also reports that Heartland received at least $55,000 from Koch Industries. [25], [26]

990 Forms

Heartland Institute as Recipient

The following is based on data from the Conservative Transparency project and from publicly available 990 forms. Not all funding values have been verified by DeSmogBlog. [27]

See the attached spreadsheet for additional information on Heartland Institute funding by year (.xlsx).  [27]

Donor Total Contributions
Donors Capital Fund $19,310,544
Mercer Family Foundation $5,088,000
The Lynde and Harry Bradley Foundation $1,215,500
Barbara and Barre Seid Foundation $1,037,977
Dunn's Foundation for the Advancement of Right Thinking $830,000
DonorsTrust $632,000
Exxon Mobil $531,500
Walton Family Foundation $400,000
Chase Foundation of Virginia $364,500
Sarah Scaife Foundation $325,000
Searle Freedom Trust $300,000
American Action Network $300,000
Barney Family Foundation1 $280,000
Friedman Foundation For Educational Choice $205,100
Jaquelin Hume Foundation $201,000
The Rodney Fund $194,000
Charlotte and Walter Kohler Charitable Trust $190,500
Stuart Family Foundation $175,000
Ed Uihlein Family Foundation $150,000
The McWethy Foundation $125,000
Castle Rock Foundation $110,000
PhRMA $90,000
JM Foundation $82,000
Charles G. Koch Charitable Foundation $62,578
Armstrong Foundation $60,000
National Association of Manufacturers $52,500
John William Pope Foundation $50,000
Windway Foundation $47,000
Arthur N. Rupe Foundation $44,000
Robert P. Rotella Foundation $42,500
The Roe Foundation $41,500
Claude R. Lambe Charitable Foundation $40,000
John M. Olin Foundation $40,000
American Petroleum Institute $25,000
Hickory Foundation $23,000
The Robertson-Finley Foundation $18,000
Woodhouse Family Foundation $12,500
The Carthage Foundation $10,000
Deramus Foundation2 $10,000
The Challenge Foundation $6,000
Foundation for Economic Education $255
Grand Total $32,722,454

1Has funded to DonorsTrust, a group that has distributed over $80 million to conservative causes, many of which deny man-made climate change.

2Has funded Philanthropy Roundtable, a spinoff of DonorsTrust and Donors Capital Fund. They all operate in a similar way to cloak the identity of donors by having donations under the name of DonorsTrust, Donors Capital Fund, or Philanthropy Roundtable.

Heartland Institute as Donor

Heartland Institute donations are listed on their 990 forms up to the year 2010. Current values are not available. [27], [28]

Recipient Total
Shimer College $500,000
Moving Picture Institute $250,000
Texas Public Policy Foundation $100,000
Americans for Prosperity Foundation $50,000
Pacific Research Institute for Public Policy $50,000
Evergreen Freedom Foundation $50,000
Maine Heritage Policy Center $50,000
James Madison Institute $50,000
International Climate Science Coalition $45,000
Galen Institute $43,000
Alabama Policy Institute $40,000
Free Enterprise Education Institute $25,000
Africa Fighting Malaria $25,000
Frontier Centre for Public Policy $25,000
Kansas Taxpayers Network $25,000
New Zealand Climate Science Coalition $25,000
Natural Resources Stewardship Project $25,000
Council for Affordable Health Insurance $20,000
Science & Environmental Policy Project $15,000
South Carolina Policy Council $10,000
Grand Total $1,423,000

Koch Funding

According to Greenpeace USA, Koch Foundations contributed $55,000 to the Heartland Institute between 1997 and 2011. [26]

*Original tax forms prior to 1997 are no longer available for verification. If you include these values, the grand total jumps to $100,000 in Koch funding from 1987 to 2011. [26]

Year Charles Koch Foundation Claude R. Lambe Charitable Foundation Grand Total
*1987 $5,000 $5,000
*1988 $5,000 $5,000
*1989 $5,000 $5,000
*1992 $10,000 $10,000
*1995 $10,000 $10,000
*1996 $10,000 $10,000
1997 $10,000 $10,000
1998 $10,000 $10,000
1999 $10,000 $10,000
2011 $25,000 $25,000
Grand Total $60,000 $40,000 $100,000

The Heartland Institute's leaked 2012 Fundraising Plan states that “The Charles G. Koch Foundation returned as a Heartland Donor in 2011. We expect to ramp up their level of support in 2012 and gain access to the network of philanthropists they work with.”

However, the Foundation since released the following statement: “… the Charles Koch Foundation provided $25,000 to the Heartland Institute in 2011 for research in healthcare, not climate change, and this was the first and only donation the Foundation made to the institute in more than a decade. The Foundation has made no further commitments of funding to Heartland.” [29]

Donors Capital Fund/DonorsTrust

Donors Capital Fund (DCF) and its partner organization DonorsTrust allow donors to fund organizations anonymously. They appear to be a spinoff of the Philanthropy Roundtable, a group run by Whitney Ball, who also launched DonorsTrust.

The Heartland Institute has received large anonymous donations through DCF and DonorsTrust, with a combined total of at least $15,391,794.

See p. 58 of the 2012 Mashey Report for more details.John Mashey also covers DCF on page 65 of his 2012 report. According to DCF's website, “Donors Capital Fund is an IRS-approved, 501(c)(3), 509(a)(3) supporting organization that is associated with DonorsTrust, a public charity and donor-advised fund formed to safeguard the charitable intent of donors who are dedicated to the ideals of limited government, personal responsibility, and free enterprise.”


DonorsTrust refers clients to Donors Capital Fund if they expect to open donor-advised funds of over $1,000,000. [30]

DonorsTrust

DonorsTrust contributed at least $631,250 between 2008 and 2012 to the Heartland Institute: [31]

Source 990 forms:

Year Project
2008 general operations $11,750
2009 general operations $1,000
general operations $1,000
general operations $3,000
general operations $5,000
“advertising in response to organization's emphasis on marketing of research.” $6,500
general operations $500,000
Total $516,500
2010 general operations $250
general operations $1,000
general operations $1,000
Total $2,250
2012 Seventh International Conference on Climate Change $100,000
general operations $250
general operations $500
Total $100,750
Grand Total $631,250

Donors Capital Fund

From 2005 to 2013, DCF contributed at least $14,760,544 to the Heartland Institute (possibly more, as some details are missing from 2006's 990): [32]

Source 990 forms:

Year Project
2005 Individual projects not listed. $550,427
2007 Individual projects not listed. $2,955,437
2008 general operations $2,000,000
“the global warming research project” $900,000
“media materials” $100,000
“staff directed research” $126,000
“final installment of three-year general ops support” $1,300,000
“global warming research projects” $184,000
Total $4,610,000
2009 “CORE” $10,590
“G.W. reporting for one year” $150,000
“health care project” $190,000
“Ranthum, Australia and Old projects” $300,000
general operations $400,000
$620,940 for “GW-end” and $500,000 for annual support $1,120,940
Total $2,171,530
2010 for the organization's India Meeting Project $14,150
general operations $1,650,000
Total $1,664,150
2011 $49,000 for the NIPCC/Climate Change Project and $80,000 for School Choice in TX $129,000
2012 general operations $1,000,000
2013 for Climatism books & DVD projects $100,000
for the Sri Fi Project ($60,000) and the  New Zealand Project ($20,000) $80,000
general operations $1,500,000
Total $1,680,000
Grand Total $14,760,544

Anonymous Donor

One Anonymous Donor has contributed a large percentage of Heartland's budget in past years, with a focus on their global warming projects.

According to the Heartland 2012 Fundraising Plan, the Anonymous Donor made the following contributions from 2007-2011:

Project 2007 2008 2009 2010 2011
General Operating $500,000 $500,000 $500,000 $700,000 $350,000
Ramp Up Program $800,000 $800,000 $400,000 $0 $0
Global Warming Projects $1,976,937 $3,300,000 $1,732,180 $964,150 $629,000
Health Care $0 $0 $190,000 $0 $0
School Reform $0 $0 $0 $0 $80,000
Total $3,276,937 $4,600,000 $2,822,180 $1,664,150 $979,000

Illinois auditor reports for 2003-2009 reveal that a single donor (possibly the same individual as the “Anonymous Donor”) contributed the following percentages of outstanding accounts receivable in those years (also see p. 56 of John Mashey's report):

2004 (PDF — See p. 27) — 74% contributed by two donors.

2005 (PDF — See p. 32) — 74% from one donor.

2006 (PDF — See p. 33) — 25% from one individual.

2007 (PDF — See p. 32) — 38% fr

          UK General Election: A choice between uninspiring statism and barely concealed evil        
There is nothing to inspire me to vote Conservative in the UK General Election.  Theresa May is an unreconstructed statist big-government conservative.  She is instinctively authoritarian.  She advocated for the security and police wet-dream on surveillance as Home Secretary, so that UK ISPs and telcos now keep a record of every single website visited in the UK over the past 12 months - because somehow what you read should be able to be accessed by the state when it sees fit.  She is pushing further, driven by concern over terrorism, but wanting to sanitise the internet to make it "safe" - the state working with parents, parenting us all.

Yet, it was all known that she takes a "trust me with your private information" approach to surveillance, rather than focus on the real issue, which is Islamism.  She explicitly says that we should remember "the good that government can do" and then outlines plenty of areas the government intervenes extensively in, such as energy, but instead of blaming virtue signalling policies like the Climate Change Act (which has seen the UK Government guaranteeing to a French led consortium that it will ensure it gets paid a price for electricity generated at its forthcoming nuclear power plant double what is the current market price for electricity).  She thinks libertarians are atomistic and people who seek to take advantage of others and thinks she is as distant from that as she is from Jeremy Corbyn.

That may well be true.  She said this:

We do not believe in untrammelled free markets. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality. We believe not just in society but in the good that government can do. Paying your fair share of tax is the price of living in a civilised society.

Tom Harris in the Daily Mail said she was a real socialist offering left wing policies.

I couldn't vote for her if she was my Conservative candidate, like I couldn't vote for Amber Rudd (who thinks a solution to terrorism is to "make" WhatsApp end encryption, yet stands on a platform with a known Islamist because the UK Government is too ignorant to call them out.  Fortunately I have a tolerable choice and it is a safe Conservative seat.  The Conservatives have pledged not to increase VAT, unlike the previous election when there was a pledge to not increase income tax and National Insurance (another form of income tax), because the Chancellor of the Exchequer wants "more freedom" but pledges the Conservatives are still the "low tax party".

It's nonsense.  The Conservative manifesto could almost be one from any of the Labour leaders since 1997, except the current one.  It's a cynical move to move to the centre-left to try to hoover up votes from the middle and to destroy the Labour Party, but there is one problem.  It has backfired due to ineptness, a lack of enthusiasm from the rank and file of many Conservatives and the simple fact that May does not ooze authenticity.  That doesn't mean Labour will win, thankfully, because it isn't just led by an inept naive idiot, but a nasty hater of capitalism, individual freedom and even Western liberal democracy.

I disagree with most of what the Labour Party advocates, and accept that it holds a fundamentally different view as to the role of the state from me, but Jeremy Corbyn and his closes allies are not like that.  Jeremy Corbyn has never, repeat never held any office of significance in Parliament under any Labour Government.  He was never an under-secretary, nor Chair of a select committee, although he has been on select committees.  He was never trusted with power by his colleagues, he was no Michael Foot

Corbyn invited senior members of the IRA to Parliament three weeks after the Grand Hotel bombing in Brighton which targeted the Conservative Party conference, both killing and maiming people.  His history in supporting the IRA and campaigning for those who had killed for the IRA, is brushed aside as saying he wanted to talk to "all sides", but no one can recall him ever meeting Unionists. Corbyn opposed the Anglo-Irish Agreement (which set out between the UK and Ireland how devolved government would work in Northern Ireland) and his right hand man John McDonnell opposed the Good Friday Agreement in 1998 (which ended the terror campaigns from both sides).  

Corbyn opposed the UK ejecting the fascist military dictatorship of Argentina from its invasion of the Falkland Islands.  He has called Hamas and Hezbollah "his friends" (although has apologised for his use of words), but spoke on a platform with Islamists who were calling for war with Israel.

His Shadow Chancellor John McDonnell called Lenin and Trotsky his greatest influences and stands on a platform alongside Stalinists.  Indeed Andrew Murray, a Stalinist open supporter of north Korea (which he calls "People's Korea"), is now helping Corbyn with his campaign.  The same man who after the Paris terrorist attacks said:

“The barbarism we condemn in Paris is minute compared to the barbarism wrought by imperialism across the planet in the last 13 years and we must condemn that… It is a sad lesson we have to re-learn from the attacks in Paris, it needs bringing home again and again.”

Of course Corbyn blames the US for "escalating tensions" with north Korea, not the totalitarian police state that has developed nuclear weapons and keeps testing missiles whilst uttering bombastic rhetoric about attacking the United States.  You see Corbyn was Chair of the ironically named Stop the War Coalition.  An organisation that has never once campaigned for any anti-Western regimes or militant groups to stop waging war.  It never took on Russia, Hamas, the Assad regime, Al Qaeda, ISIS, north Korea et al.  Stop the War is only too much in favour of war, as long as it is waged against any Western liberal democracy including Israel.

Corbyn claimed that 9/11 was "manipulated" into blaming Al Qaeda.  He has been paid by Iran's international propaganda TV channel, Press TV, to appear, but not, of course, to criticise human rights in Iran, but to criticise the West.  

Corbyn has admitted that he would never use nuclear weapons, effectively making the UK's nuclear deterrent worthless.  He has long campaigned for unilateral Western nuclear disarmament, including during the Cold War.  Was he a pacifist who just believed the USSR would follow, or was he not too fussed if the Red Army had rolled its way across Europe to "liberate" it from capitalism and "US imperialism"?  In any case the British Communist Party wont be fielding candidates in this election, but is uncharacteristically supporting Labour.

Corbyn is a strong supporter of the Chavez/Maduro authoritarian socialist disaster in Venezuela, but you can't be surprised at that.  After all, he says Castro was a champion of social justice, what with all those opponents he got murdered.  Corbyn also seems to attract anti-semites, not just Ken Livingstone's obsession that the Nazis were in cahoots with Zionists and Jews, but supporters.

These people appear again and again.  However he does join in on Quds Day rallies organised by the Islamic Republic of Iran (yes that bastion of peace, diversity and human rights) to criticise Israel and call for it to be pushed into the sea.

Corbyn is a sympathiser of Russia's position on Ukraine and Georgia, presumably because it is the opposite of the US and European position.  He blamed the Russian insurgency in Ukraine on "NATO belligerence".  After all, how dare Ukraine dump mother Russia led by such a nice liberal democratic regime to embrace the evil West right?

Shadow Home Secretary Diane Abbott said on balance Chairman Mao did more good than harm, which will be news to the tens of millions murdered or starved by his policies, with the bizarre justification is that he left China on the verge of a great economic boom (even though China's economic success has been because the Chinese Communist Party abandoned socialist economics).

So as awful as Theresa May is, and corporatist and centre-left as they may be, it is not a party led by IRA sympathisers, appeasers of Islamism and sympathisers of Stalin. 

The moral turpitude of these entities is utterly beyond contempt.  Corbyn refused to condemn the killing of Osama Bin Laden (much better to put him on trial, give him the benefit of the doubt), he has linked terrorism to British foreign policy (but doesn't explain, of course, why neutral Sweden and non-interventionist France get attacked).  

He and his ilk have spent decades on the backbenches campaigning for "understanding" for just about every group that sought to wage war with the UK, whether the IRA, fascist Argentina or Islamists.   He has campaigned for the UK to be disarmed, to withdraw from NATO and to distance itself from the US.  He allies himself with political leaders that torture and murder people, and who use violence.

Of course many Labour MPs know and hope he loses, just that they don't lose their seats.  It is because of them that Labour remains committed to NATO and the nuclear deterrent, both positions Corbyn opposes.

He isn't a nice guy, despite his softly spoken manner.  

He is an advocate of political violence who has appeased and turned a blind eye to brutal murderers, because he shares their political ambitions.  He supported the IRA because he believed in a united Ireland by all means necessary, and to hell with the opinions and concerns of Unionists (whose views he never courted and sought, presumably for a Marxist they were the hated bourgeoisie).  He supported the Galtieri military dictatorship, the same one that imprisoned and tortured socialists in Argentina, because it dared take on the bigger evil - Thatcher's government (hence why he didn't care less than the IRA tried to murder her and did kill several Conservatives) over the Falklands.  He is warm towards Hamas and Iran because he supports the Palestinians and supports just about any regime that dares take on the hated United States and its ally Israel.   I understand concern for the plight of the Palestinians (although keeping Hamas in power is shooting yourself in the foot), but to treat Iran as a partner is morally bankrupt.

He is without doubt the worst candidate for Prime Minister put up by any major UK political party in modern times.  Those who stand with him should be ashamed of him, and the ONLY reason to vote Conservative is to send the strong message that Corbyn and his group of violence touters have no place in government.


 


          The case to leave the EU is about openness, tolerance, kindness and freedom        
The shocking murder of Labour MP Jo Cox may well prove decisive in the referendum on EU membership.   Tommy Mair appears to have repeatedly shot and stabbed the MP and for all we now know, when asked for his name he shouted out “Death to Traitors, Freedom for Britain", but Mr Mair doesn't believe in freedom.

It appears he is a fascist, and so of course, the new narrative has been that “politics are too angry” and that the anti-EU campaign has “fuelled” this murder.  Of course, those claiming the hate tend to be on the left/Remain side, like legendary leftwing polemicist Polly Toynbee, who once claimed Conservative welfare cuts were like The Final Solution for the disabled.  You can’t do much more in hate than accuse your opponents of being Nazis can you?  Of course Labour is led by a man who used to go to the funerals of IRA terrorists and invite their leaders for meetings, all the time it was waging war against the UK public and UK government (and had killed several MPs).  Corbyn’s statements against hate and violence are as duplicitous as they are disgusting.  The late Jo Cox had a range of views across the spectrum, including a belief that the world shouldn't let Assad barrel bomb and drop chemical weapons on civilians, which saw her be damned by the mediocre "Madame Mao" Labour front bencher Diane Abbott as a "warmongering Tory".  She faced a campaign for de-selection, which Labour has carefully airbrushed away, as her tragic murder becomes politicised.  She did support remaining in the EU, quite vehemently, so it has become easy to claim that the other side were opposed to her.

Yet, the narrative that links the murder to leaving the EU may well stick among undecided voters, especially as polls have been close throughout the campaign, and most recently have put Leave ahead by a few points.  

It’s grossly simplistic and opportunistic to claim, as Remain advocates are, that their side is about kindness, tolerance and openness, when the EU is neither open, nor particularly tolerant and kind with its trade policies, or indeed with diversity of opinion about itself.

The EU isn't open when it maintains a fortress around it trading with the world, especially on services and agriculture.  It has been a force for openness in trade within with enormous resistance from one of its founding members, France, which sees the EU as a tool for "solidarity" - code for spending ever more taxpayers' money on its dirigiste vanity led economic nationalism and absurd profligacy for 19th century farming enterprises.

The EU isn't tolerant when it ignores referenda in France, Ireland, the Netherlands on EU Treaties and simply demands their governments ignore them.  It isn't tolerant when it says that it wont allow "extremists" to be in government in Member States even if democratically elected.

The EU isn't kind when it continues to flood world markets with subsidised agricultural produce, undermining exports and domestic production in developing countries, and so impoverishing poor country producers, whilst funding subsidies for Prince Charles's farming empire.  

Do I think leaving the EU will mean the UK will embark on some free market libertarian revolution of less government?  No, not really.  However, within the EU the only certainty is that there will be growth in EU spending programmes, growth in regulation and ever less accountability for the new laws and spending from Brussels/Strasbourg (don’t forget the EU has two locations for its Parliament, because France wanted an impoverished area to get a boost, so monthly the entire Parliament relocates between cities, at a cost of over €330 million annually).

For all of the relatively mild rhetoric about immigration, the Leave campaign is led by politicians who have mostly been sceptical about government power and all are advancing an agenda of more free trade, more openness to the world and greater engagement with the world.  Leaving the EU is not the fascist/socialist vision of a self-sufficient island that waves a flag and shuts out the world (although those who hold those views want to the leave the EU because its own internal market is an anathema).

I don’t doubt a vote to leave the EU will be a shock, initially to financial markets, more fundamentally to the EU and to the UK Government.  However, the shock need not last for the UK, when there are many years to negotiate leaving the EU and a new trade relationship.  It wont give succour to Putin, nor will it mean a loss of influence for the world’s fifth largest economy.



Given that the EU has proved that it is structurally incapable of reform, we now have a choice. Do we cave in, because we’re too scared to leave? Or do we vote to retrieve our sovereignty, walk away from the whole racket and engage with the world on our own terms? A vote to leave would represent an extraordinary vote of confidence in the project of the United Kingdom and the principle of national self-determination. It would also show reform-minded Europeans that theirs is not a lost cause. And that we stand willing to help forge a Europe based on freedom, co–operation and respect for sovereignty.

It isn't a vote for UKIP politicians, for leaving the EU will put most of them out of a job.  Nigel Farage isn't even an MP, and the one UKIP MP, Douglas Cardwell, is very much a libertarian.

I urge all those in the UK eligible to vote, to Vote Leave.  It is time to break free, for a more open, a more tolerant and a kinder UK. 

          Wellington Airport Runway Extension: Definition of a Cargo Cult: Part One        
For those unfamiliar with the term "cargo cult" it is a description of what might best be called as a naive practice of some cultures with low levels of scientific understanding and a high belief in animist religions that certain rituals will result in untold riches arriving from the skies.  Nowadays it is often shortened into "built it and they will come".

Such is the hype around the planned extension to the runway of Wellington Airport - a proposal that completely lacks pure commercial merit and has no net wider economic benefit - but is being promoted by the opportunistic, encouraged by the naive and to be paid for, largely, by those will get no benefit from it at all.



I say this as someone who grew up 1.5kms from the airport and knows a bit about the aviation sector, having recently been part of the team that reviewed over 50 proposals for expanding airport capacity in London.  I know Wellington Airport very well, and the likelihood that there will be long haul flights into that airport that will generate net benefits to Wellington ratepayers to recover the costs of subsidising the runway extension is very low indeed.

Let's remember the airport is a commercial concern, two-thirds owned by Infratil, which itself is not willing to contribute two-thirds of the capital costs of the project.  It's the owner of the other third - Wellington City Council - that is the problem, because it is willing to force ratepayers (along with other Wellington councils) to cough up half of the liability to boost the value of Infratil's investment. This in itself should cause both believers in the free market and socialists to baulk at public subsidy for a predominantly private entity, but no - they have cargo cult syndrome.

They believe that magically if an airport extension is built, there will be long haul flights from Wellington to Asia and the Middle East, making the city more attractive for business.  However, it is far from clear exactly:

- Why airlines will fly long haul to Wellington;
- Are the assumptions about the the benefits claimed valid?




Who would fly to Wellington?

Let's kill off one idea quickly.  

Air New Zealand will not fly long-haul from Wellington. Its international hub is Auckland, the reason being that it is the business hub for the country, and also enables it to attract traffic between Australian cities and the Americas/South Pacific (which it does rather successfully).   Given its location it can generate high yielding (i.e. not economy class travelling) passengers with enough of an economy of scale to be just profitable enough to sustain a business, in a very volatile sector.  It once flew long-haul out of Christchurch (to LA, Singapore and Tokyo), but has recently dropped the last of these services.  Even the Trans Tasman services from Wellington are no great money spinners, as the decision about the Air NZ-Virgin Australia Alliance revealed.

Wellington Airport and two Wellington Councils (and associated bodies) all demanded that in exchange for approving the Alliance, Air NZ and Virgin Australia be forced to maintain a minimum flight frequency on their routes between Wellington and Australia.  This hardly indicates confidence in the commercial attractiveness of flying to Wellington Airport.  The Australian Competition and Consumer Commission in its approval of the Alliance required the two airlines to maintain a minimum level of service between Wellington and Brisbane.  

Hardly great confidence that Wellington is a lucrative destination.  Air NZ has made it clear it has no plans to fly long-haul from Wellington and that a runway extension would not change this.

Beyond that, there have been claims that the latest generation of longhaul aircraft - Boeing 787s and Airbus A350s - will suddenly make it viable to fly to Wellington.   However, a useful guide to who this might be is to look at Christchurch, which with both a wider pool of air cargo and as a gateway to the main tourism destinations of the country, has some long haul flights.

By some I mean actually 2 non-stop from Christchurch.  One is Singapore Airlines and the other is China Southern to Guangzhou.  Singapore Airlines has been decidedly lukewarm on flying to Wellington, and China Southern is driven mostly by outbound Chinese tourism traffic, which has limited interest in visiting Wellington.  Emirates flies from Christchurch to Dubai via Sydney and Bangkok, which of course is not at all better than flying to Dubai via Sydney from Wellington, except it is a larger aircraft.  China Airlines flies from Taipei to Christchurch, but only via Australia.  Same issue again.  This isn't a long haul flight, and isn't substantially different from flying Air NZ or Qantas into Sydney or Melbourne to connect to a long haul flight to Asia or Europe.

If Christchurch can only attract one flight from Singapore and one from China, what's all the hype about Gulf airlines flying to Wellington (when the other two big Gulf airlines, Etihad and Qatar Airways don't even fly to Auckland)?  

China Southern (which is going through a rapid growth phase) has indicated it might consider Wellington, but given it is Chinese Government owned airline, it is operating not to grow profit but to find markets it can grow.  Quite how many business people or tourists wish to hub through Guangzhou to and from Europe or elsewhere in Asia, on an airline with a mixed reputation for service when things go wrong, is unclear.   I wouldn't want to base the decision to spend millions of taxpayers' dollars on giving one airline the chance to start a flight it might cancel a year later.   Neither does the major owner of the airport, who is happy to let taxpayers cough up the money to subsidise its ambitions (bear in mind Infratil recently offloaded completely failed airport investments in the UK for token amounts).

Why would there be benefits from long haul flights to Wellington?

The whole premise of the Wellington runway cargo cult is that Wellington is less attractive for business because it doesn't have long haul flights.  The same arguments are made for Canberra, which even struggles to get Trans-Tasman flights, because airlines simply aren't interested.  However, the benefits of direct flights come from reduced travel time and assumptions about lower airfares, yet these are wanting.

Ernst and Young authored the study into the benefits of the project, but some of its assumptions demonstrate a paucity of understanding of the airline industry and some heroic assumptions about benefits that airline passengers are willing to pay for.

In the next installment, I review the report and find it full of assumptions and assertions that don't bear close scrutiny.

          Harmful Digital Communications Act indeed        
Turn away for long enough and I find the NZ government does something outrageous to curtail freedom and to expand Nanny State, sure enough it has with the Orwellian sounding "Harmful Digital Communications Act".  Even if I supported it, if I was a Minister getting that title passed over my desk by a Ministry of Justice manager, I'd have tore a strip off of her or him for having had a complete lack of any education in either literature or history to give ANY legislation such a title.

The purpose of the Act as well has shades of Big Brother:

"to deter, prevent, and mitigate harm caused to individuals by digital communications; and
provide victims of harmful digital communications with a quick and efficient means of redress"

It's a curious post-modernist trend for laws to be created not to protect rights based on well worn principles of individual rights and freedoms, property rights, contracts and torts, but to "prevent harm" - to have laws to sanitise life so that "everyone" is protected.

However, the term "harm" doesn't mean physical harm.  There is no need for new laws covering an actual infringement of your body (although the digital dimension does justify ensuring laws protect your property and covers contracts and torts), for such laws exist - in abundance - including ones to protect you from yourself.  The harm being covered is, what "The Flight of the Conchords" would say are "hurt feelings".

Being offended, is to be harmed.  To be distressed by what someone else has said, is to harmed.  This goes beyond defamation, which is - indeed - damage to one's property in the form of your reputation. It's an almost childlike drive to make everything structured and inoffensive.  In the UK, it came out in its most absurd form a few months ago with the National Union of Students Women's Conference saying:

"Some delegates are requesting that we move to jazz hands rather than clapping, as it's triggering anxiety. Please be mindful"

I didn't make that up.  If someone is a little bit upset, then everyone else must conform to avoid upsetting that person.  It's the radical so-called "progressive" identity politics champions being manufactured by post-modernist university departments out of air headed students raised on this form of Newspeak. 

So the Harmful Digital Communications Act is about "serious emotional distress".  It is now a crime in New Zealand to make someone else upset, digitally (now now!).  I know I did that when I separated from my wife, thankfully I didn't do it by text message today, or I might be in trouble.

However, let's see how you might get into trouble, because Amy Adams, the National Party, the Labour Party, the Maori Party, NZ First and much of the Green Party thinks your freedom of speech should be curtailed, in case it distresses someone.  Kudos to ACT's David Seymour for standing up to it, and indeed Russel Norman, Gareth Hughes, Julie-Anne Genter and Steffan Browning for having thought about it.  

I know this legislation has had much coverage online for what's bad about it, but it deserves constant attention, and every single MP who voted for it needs to be exposed for their moronic endorsement of it.  It's a disgrace to all who voted for it, and if anything indicates clearly how utterly incompetent they are in being able to apply principle and concepts to problems and issues, it is this law.

I encourage all to push the boundaries of this law to expose this incompetence.


The Act defines the term "intimate visual recording" to demonstrate that the English language is a lost cause in New Zealand, with the word "toileting" having been exuded because MPs can't cope with the words urination and defecation. The mere fact that it was decided to have to define this should raise alarm bells, when the issue itself can more clearly be defined on principle as one of property rights.

What does the Act do?  It sets out, oddly, a set of "communications principles", which are the post-modernist lawyer's way of not clearly defining anything.  However, many of those principles are unreasonable in any free society.

Principle 1
A digital communication should not disclose sensitive personal facts about an individual.

Really?  Why not?  You can write a letter about someone having committed a crime, or cheating on you, or having no money, or being indeed anything else.  Why should this be a crime?  It is quite one thing to have legal protection for you supplying personal information to the state, or to any other organisation under contract, another to "prohibit" "disclosing" sensitive personal facts.  Can a parent not send to the other parent information about their child's weight?

Principle 2
A digital communication should not be threatening, intimidating, or menacing.

So what is threatening? Shouldn't that include a threat to commit a violent or sexual offence upon a person?  Is a threat "I'm going to leave you"  or "I'm going to tell everyone what a prick you are"? Sections 306 to 308 of the Crimes Act already covering threatening behaviour, it should be relatively easy to ensure such legislation is inclusive of threats communicated digitally.  

Indeed Section 306(1)(b) states Every one is liable to imprisonment for a term not exceeding 7 years who sends or causes to be received, knowing the contents thereof, any letter or writing containing any threat to kill or do grievous bodily harm to any person

How difficult would it have been to insert into that Act a definition of "writing" that includes any digital communications?  Similar provisions apply to threatening to damage property, and could have been extended to other forms of violent or sexual crimes.  Why not?

Principle 3
A digital communication should not be grossly offensive to a reasonable person in the position of the affected individual.

Why not? Why is the law to protect people from being offended?  If I am Muslim am I protected if someone sends me a drawing of Mohammed? Is there a law to protect me from being offended by what someone says to my face?  Of course not.

Principle 4
A digital communication should not be indecent or obscene.

All in the eye of the beholder.  One person's indecency is another's desire.  

Principle 5
A digital communication should not be used to harass an individual.

The Harassment Act 1997 exists.  

Principle 6
A digital communication should not make a false allegation.

The Defamation Act 1992 exists.

Principle 7
A digital communication should not contain a matter that is published in breach of confidence.

Legislative and common law of contract exists.

Principle 8
A digital communication should not incite or encourage anyone to send a message to an individual for the purpose of causing harm to the individual.

This is one step removed from the act itself.  You should't send an email to encourage anyone to write a letter or send a message.  So don't text your friend to tell her to tell her boyfriend to "go fuck himself for being an ugly stupid useless dickhead" because you want him to experience serious emotional distress.  You criminal you.  You can't even encourage someone to send someone a message that might upset them.

Principle 9
A digital communication should not incite or encourage an individual to commit suicide.

Section 179 of the Crimes Act already applies.

Principle 10
A digital communication should not denigrate an individual by reason of his or her colour, race, ethnic or national origins, religion, gender, sexual orientation, or disability.

Identity politics hate crime time.  Yes it's vile, but it is part of the sanitising of communications by law process.  I'd much prefer that anyone who does this simply gets their communications published and exposed for being a repulsive fool, but then I think free speech should be fought with free speech.

Yet these "principles" are not law, but what a new bureaucracy - the Approved Agency - will "take account of" when it censors communications.

For that is what this Act does - it sets up a central People's digital communications censorship office, to parallel the Office of Film, Video and Literature Classification.  You can officials are watching, in Beijing, Hanoi, Abu Dhabi and the like.

Now yes, it is meant to "act consistently with the rights and freedoms contained in the New Zealand Bill of Rights Act 1990" yet it most expressly undermines these.  This is a law that constrains speech. If there were a NZ equivalent to the First Amendment, the Supreme Court would rule the law as unconstitutional.

The "Agency" has powers as follows:

(a) to receive and assess complaints about harm caused to individuals by digital communications:
(b) to investigate complaints:
(c) to use advice, negotiation, mediation, and persuasion (as appropriate) to resolve complaints:
(d) to establish and maintain relationships with domestic and foreign service providers, online content hosts, and agencies (as appropriate) to achieve the purpose of this Act:
(e) to provide education and advice on policies for online safety and conduct on the Internet:
(f) to perform the other functions conferred on it by or under this Act, including functions prescribed by Order in Council made under section 7.

It is the state regulator of digital communications.  You complain to it, and it addresses your complaint.  Upset at what someone said to you? Complain to the government, it's here to help.  

Grounds to refuse to assess a complaint will be if it is frivilous, trivial or vexatious, unlikely to "cause harm to any individual" (any, of course, includes children or anyone with any mental "condition" or if it doesn't contravene any of the "principles" above, and it has discretion if it doesn't think action is appropriate.  In other words, it had carte blanche to consider action if anything you have published or sent digitally could "cause harm to any individual".  Interfering with a politician's career, reducing the patronage of a business, or making someone feel a bit uncomfortable. 

So who can get the new agency (let's call it the Ministry of Information for argument's sake) to act?  Anyone...

an individual (the affected individual) who alleges that he or she has suffered or will suffer harm as a result of a digital communication: a parent or guardian on behalf of the affected individual:

So you claim you "will suffer harm" because of something published on a blog, or on Twitter, or an email, then you can go to Court.  Indeed if an overly protective parent sees something a child's friend has sent a child and thinks it is harmful for the child, then off to court the parent can go.  Think of a parent who catches that a girlfriend and boyfriend have been sexting each other - off to court.  Any age limit?  Well no. You can be 20 or even 30, and the parent can do so on your behalf, because you would rather Mum or Dad took the lead, because you can't handle a "digital communication".

Time to remind you of the definition of "digital communication" again. It "means any form of electronic communication; and includes any text message, writing, photograph, picture, recording, or other matter that is communicated electronically".  That's not just a private communication, it can be a social media post, a blog, a news item or a broadcast.

So yes, a politician or an entrepreneur, hearing that a broadcast is to be made that exposes a scandal, dishonesty or the expression of an unsavoury opinion, could go to court to stop the broadcast going ahead.

Oh yes, this is the charter to sanitise investigative journalism and discourse BEFORE it is published.  

An offence is created of posting a digital communication with the intention of "causing harm" to the victim, as long as it would do so to an "ordinary" reasonable person in the victim's position and actually causes harm.  Presumably intended to cover revenge porn, it also covers any communication of outrage to distress someone, regardless if that person hurt you in the first place.  Imagine someone who caught her partner with someone else and then texted a juicy message and said it was over and to move out immediately.  You may well indeed intend to cause harm, because you have been hurt.  It's a natural human response, and in a free society is par for the course of human relationships. However, with this new law, the recipient can attempt to criminalise YOU for sending it.

Furthermore, the Ministry of Information that will enforce this can be ANYONE appointed by the government.  Amy Adams is on the lookout for who can be the Stasi for the internet - a classic example of a state coercive function to be "outsourced" by a government that prefers corporatism to freedom, the free market and personal responsibility.

So yes, this law is a disgrace.  Amy Adams, with her first class Honours law degree (albeit from Canterbury - oops that probably breaks the law) should be utterly ashamed.  She is younger than me and quite clueless about the digital sector, having agreed to a law that isn't only unworkable, authoritarian and invasive of privacy and free speech, but a bastardisation of the English language.

Cyberbullying is a problem, but here's how you resolve it:

1. Extend legislation on all real crimes and harassment (including inciting suicide) to include digital communications.
2. Clarify how property rights applies to all photography and recordings of people (including intimate ones).  If you make a recording of yourself, you own it.  If you sent it to another person, that person owns it too and unless you communicate it with the express condition that it not be made available to others, then you've transferred that right to another.  Own responsibility for content you make of yourself.

It isn't actually a crime to "bully" someone that doesn't involve actual threats and harassment, so trying to create an online crime for it is absurd.

Return to first principles.  Don't pass laws to protect people from "serious emotional harm", because life creates serious emotional harm.  People will lie to you, people will let you down, people will break up with you, people will insult you and belittle you.  Your reaction to all of that is what you own.  If it's your children affected by other children, then confront the parents, keep the children apart, confront the school or other institution if it is happening there, but most importantly - teach your children how to block or delete communications they don't like.  Expose those who express hate and are vile, and demand that social media platforms and the like enforce their own terms and conditions for behaviour (which exist and can be legally enforced too).

As I said at the beginning of this rant, one of the worst trends in recent years has been the drive - particularly by those on the "progressive" left, post-modernist identity politics types, to sanitise discourse and to declare how "offensive" something is.  It would appear those types are now writing our laws and passing them.

Is there now a generation of soft-headed easily offended adults who run to nanny state to fix their personal problems?

Do people really want a public-private agency to run to if they are upset at what they see online?

Is the National Party now just Helen Clark's administration under a different party?

Does Amy Adams have a clue about what harm she has done?

          A Kickstart from the Divine        
The week in Apocalyptica: first an earthquake, and now a hurricane.

In the wake of Irene, it was interesting to see this (shorter Eric Cantor: "Now let's hold disaster victims hostage.") Interesting because, while the hurricane was howling, and when I wasn't keeping an eye on the basement flooding and worrying about trees coming down, I was watching the destruction unfold up and down the coast and thinking "Jobs! GDP!! Economic stimulus!!!" As Mother Nature has devastated the country this year with fires, droughts, heat waves, tornadoes, floods, and hurricanes, I've wondered if She's been sending us a message (no, not the climate change message, although, duh, that, too), that contra Michele Bachmann, we really DO need government, because the free market isn't going to rescue us from the 2nd floor of a burning building or pull our asses out of a swollen river. And while She's at it, maybe She's also thinking, "If those asshats in Washington won't get it together to create work for their people, I'll just have to do it for them."


          Citizens Property Insurance Privatization: Crony Capitalism or Good Policy?        

On Wednesday Citizens Property Insurance, Florida’s state-run windstorm and general insurance provider, will decide on whether or not to transfer a small portion of its existing policies into the hands of the private sector.

The deal would have Citizens Property Insurance paying private insurer Heritage Property and Casualty Insurance $52 million to “handpick” some 60,000 of the state-run insurer's 1.3 million policies. The deal comes just two months after Heritage Insurance donated $110,000 to Florida Governor Rick Scott’s reelection campaign—money a Gov. Scott spokeswoman says won't be returned.

It's not the first time Citizens has come under scrutiny. In February, Citizens' board approved a deal with Weston Insurance, which paid the company $63 million to take on 30,000 policies. The deal came after the firm spent more than $250,000 on lobbying this year alone. So is this crony capitalism or a step in the right direction for Florida's state-run insurance program? The answer: maybe a little of both.

As John K. Ross explains in a recent Reason Hit & Run piece, this may be crony capitalism and a sweetheart deal, but the fact that a portion of government held insurance policies in a high risk state are being shifted over into the private sector is not the end of the world, as some journalists have suggested.

The bad side of the deal is obvious: the state is subsidizing a private insurer who may or may not have received an unfair advantage to take over insurance policies at the rate of $866 per policy. But the bright side is that the deal offloads millions of dollars worth of risk from the backs of Florida taxpayer’s right as the 2013 hurricane season starts up.

Critics of the deal can point to the fact that Citizens has been a profitable company the last few years, as it currently holds a $6.4 billion dollar surplus, and there is no need for the shift. The reality is that Florida and Citizens Insurance has just been lucky the last few years. The last time Florida was impacted by a major hurricane (a category three or higher on the Sapphire-Simpson Scale) was in 2005 when the state was hit by Hurricane Wilma, along with two other major storms.

One can hope that if Heritage Insurance proves as fortunate and profitable as Citizens has been over the last few years, it will spur more insurance providers to come into the state rather than flee it—a trend since the 2004 and 2005 hurricane seasons.

Shifting more policies into the hands of the private sector is a laudable goal—it's just a shame the deal looks dirty. Someone has to bear the burden of insuring homes in the most hurricane prone state in the union, and it's better for that burden to be shouldered by the private sector than taxpayers.

Of course, the biggest problem here is the state-subsidized insurance is encouraging people to build and live in dangerous areas. As John K. Ross notes, the fragility of Florida's insurance market is likely to continue until residents realize an inconvenient truth:

 

If you cannot purchase insurance from a private provider that is the free market screaming, pleading, tearing its hair out, and repeatedly punching itself in the face all in an earnest attempt to get you not to build where you're building."

 


          Meet David Brat, The Giant-Killer Who Knocked Off Eric Cantor        
Who is David Brat , the slayer of a goliath of congressional politics, House Majority Leader Eric Cantor? The man who rocked the political world Tuesday is a 52-year-old, passionate, self-described "free-market, Milton Friedman economist" and a professor at Randolph-Macon College in Virginia. In addition to economics, Brat has also taught ethics, a testament to having attended Princeton Theological Seminary, where he got a master's degree. He later earned a Ph.D. from American University. Cantor tried to paint Brat as a liberal, but in reality he's anything but. Supported by Tea Party and grass-roots activists, at campaign stops and in interviews Brat would tick through the elements of what he stands for, what he calls the Republican "creed — free markets, equal protection under the law, fiscal responsibility, constitutional restraint, strong military and belief in God." "There's only one problem with the Republican creed, and that is no Republican follows it," Brat told conservative
          By: deadrightkev        
Trump has been serious from day one. His life story is quite something and he is a family man. He has never had a drink, smoked or taken drugs. Those that think he is an attention seeker need to read his books. He was thinking about standing and concerned about the US issues in 2000. The Act party would not look out of place with Trump as leader. He calls for tariffs, not to give the US an advantage, but only as a threat if he cannot get a level playing field of free market economics. Trump says drop your tariffs and we will deal with you on the same level. Who would not want to keep dealing with the US? China would have to buckle. What is wrong with using your size and power to "encourage" the removal of subsidies in other trading partners?
          Manuel Ayau, the freedom fighter, the hero, the grandfather        
I am deeply saddened to learn about Muso's passing away on August 3.  I met Muso, a friend of my father, some 19 years ago in 1991. I had heard some interesting stories about him from my parents when they visited Guatemala in 1985. Over the years my dad kept in
touch with him through meetings and while I was too young to understand why he was so important I started to read a lot more about free market ideas, and to learn about the freedom movement through stories that were written for young kids. I especially remember reading as a preteen Muso's cartoon book " Cómo mejorar el nivel de vida"  (How to improve your living standard).  The book may be long forgotten but it had a deep impact on me because it lead me to start reading more and more why people are poor and how economics and free markets play a role into an individual’s welfare.  He was one of the first to plant the seeds in my head for a career of promoting liberty.
As I grew up I learned more about the Francisco Marroquin University (UFM) which Muso founded, and that inspired me to want to go there to study under the author of that little cartoon book that had made me forget my dreams of studying engineering, which came natural to me.  What I wanted was to learn about economics from Muso on that beautiful campus that I read about through publications and brochures
that my father received from one of his earlier ventures the think tank Center for Economic and Social Studies (CEES).


Finally, my wishes came true in January of 1991 despite my friends concern that I was going to Guatemala to study how to be a communist guerrilla fighter. I arrived in Guatemala City from Ecuador in the midst of the civil war, violent crime and kidnappings.  Little did my friends know that I was going there because I was totally convinced that the best fight against enemies of freedom was through education in free market principles. Some of my friends were concerned that I was going there out of idealistic pursuit of ideas, and not because it was the best university available. I had to admit that I myself was not sure if the University was an indoctrination camp and not a real university. These worries were quickly dissipated once I stepped foot on campus. Its reputation as a stellar institution of higher learning is rivaled by few.  
When I first met Muso I was pleasantly surprised at how warm he and his family were. I was invited to spend many weekends at their Amatitlán home. Muso was an engineer by trade, although he knew as much about economics despite not studying it formally.  He also shared with me (I learned over the years) a fascination for electronic gadgets and a kind of natural ability to learn how to use them quickly.  Of all his towering achievements this little fact might seem unimportant, but to me it revealed an attitude of defying usual expectations and doing things that other people thought impossible.  This trait was apparent when he founded one of the oldest think tanks in Latin America, a university in the middle of one of the longest and most devastating civil wars in the Americas, and a lifetime of entrepreneurial and academic success.  The icing was when he learned to fly helicopters at nearly 80 years old. Unbelievable…except to those who knew him personally.  
For those of us who were lucky enough to meet the man, Muso had a serious and talented mind. He was youthful not only in spirit, but physically too.  I still remember the first time I met him.  He took us on a tour around the Amatitlán Lake where his family lived.  At that time he was wearing a special belt around
his waist because he was suffering from lower back pain. Upon returning to his house he told me to try to tie up the boat at the pier.  I have never been particularly athletic and despite my youth I was afraid of falling into the water. Seeing that I was not able to do it, he told me, "let me show you."  He jumped from the boat to the pier like a teenager, and proceeded to pull the boat and tie it up to the pier.  Needless to say I still feel embarrassed at the fact that a sexagenarian was able to teach me that lesson. Over the years, until the last time I saw him in at a Liberty fund Colloquium held in Guatemala in November of 2008, he looked pretty much the same - not much different from those pictures 19 years ago.  Always with that funny grin like a kid about to do something naughty, very clever despite of starting to suffer the effects of the chemotherapy for his cancer, and despite being sometimes forgetful last time I saw him, always very witty and clever. 
Throughout my five years in Guatemala I went to Muso's home on weekends and he and Olga always complained to me and my father that I was not a more frequent visitor. It was a home away from home. It was such a warm and welcoming environment for a young man away from his home country. For that I am forever grateful.  A lot of times I felt a little shy as if I was abusing their generosity.  I felt a certain reverential fear when in Muso's presence.  He was always very open and talking with him challenged me to be extremely focused all the time because I was speaking to a towering figure.
Over the years I matured and began to feel more comfortable, but sadly I was not living any more in Guatemala and I longed every time I learned that he was attending one of Atlas's events to have some time and sit with him and talk.  Even better if Muso's wife Olga was with him.  With them I always felt as
though I was visiting my grandparents, a certain joy like seeing family.  I use to feel a little jealous of my brothers and sister who were able to regularly visit the Ayau family gatherings.  Even worst jealous of others,because when seeing him I was not able to talk in that familial environment that I had with him early on.  Muso had become like a rock star and many people wanted his attention.  The legend was reaching the pinnacle of his life and everybody wanted a piece of him.  Despite all that I knew that whenever he saw me he would come and ask me how things were, about my family and how important it was for me to lose weight (I was so much thinner when I met him in Guatemala!) I thank him because he was never judgmental in doing so but he was seriously concerned about me.
I reflect on this today as I am writing these random recollections because upon learning of his death I could not at first put together in words what I felt towards the hero of my childhood, the hero that put me on the path of advocacy with a cartoon book, the friend that opened the doors of his home and family to me and my family and was always concerned about my future like a grandfather. I can thank him for the fact that I studied at Francisco Marroquín, a university where you go to learn about freedom, but also and institution that strives for excellence in education and that focuses on the search for truth and independence.
I owe to him the fact that I do what I do at Atlas where I am committed to the cause of liberty. Lots of people I’m sure will be able to better put in words his lifetime of achievements, but I wanted to pay tribute to the man, the hero, the grandfather that he was to me.  I know that I am not alone, Muso and the Ayau family were very generous to all people that came through their lives and many will have similar recollections. He might be gone but the spirit and legacy left to those of us that try to engage in teaching and promoting liberty will be with us forever.


          Entrevista y medios recogen la noticia        

Hoy tuve un día un poco ajetreado entre otras cosas porque estuve hablando por 45 minutos con Fausta Wer (influente bloguera sobre asuntos latinoamericanos) en su podcast 15 minutes about Latin America.  En dicho podcast relaté la persecusión que sufre mi padre y especulé y divagué sobre las curiosas conecciones que tiene ahora el gobierno nacional con Iran y el gobierno Chino.  La entrevista se puede escuchar aca:

Luego más tarde me encontré gratamente con que algunos bloggers y medios recogen la noticia sobre el asedio de mi padre, lo cual me da tranquilidad de que no quedará en el olvido ni el será una estadística más o una victima de las patanerías, violencia verbal y abusos de Rafael Correa.

Free Marketeros

Fausta's Blog

Plegaria de un Pagano




          Re:Politics - USA        

Ok its a right wing rag but this is great.

http://townhall.com/columnists/bobbarr/2016/05/11/transcript-president-trumps-first-state-of-the-union-address-january-2017-n2161263


TRANSCRIPT: President Trump’s First State of the Union Address, January 2017

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans -- tonight I look around this room and I see two types of people. My friends who want to make America great again, and the rest of you losers who were too stupid to vote for me. I mean, seriously; I won…you didn’t…and that’s why you’re down there in the loser pit because you didn’t have what it takes to be a winner like me.

Now, America is going to win because I won and I will make it happen.

So to all you losers tonight I say this: You’re fired. No, no. Stop laughing. I’m not joking. You’re fired. Go home. Take a vacation to Loser Island. I don’t need you here. America doesn’t need you here. I don’t need you to make America great again. I don’t need a bunch of losers in Congress talking about rules, and procedures, and votes, and filibusters, and closure or cloture or whatever it is you in the Senate use to avoid making decisions. All these things just get in the way. I don’t need them.

So how am I going to make America great again? Easy. I have a plan and the best people. I only hire the best people. I don’t tolerate anything but the best. I fire losers. I will take those plans and make them a reality. We are going to start winning again in so many places. It will be great. And it will be very fast. And the Congress will only get in the way and slow things down.

We’re going to win on trade and make trade great again. One of my first actions will be to fire all the CEOs who want to take their businesses to other countries. You know, capitalism and free markets are great, but they need a guiding hand like my big hands [see; they are big] to keep winning. I know business and markets and economics – just look at how much money I made by winning in business.
CARTOONS | Steve Kelley
View Cartoon

All these loser economists talk about trade wars and higher costs to consumers as the result of my policies, but they’re morons with calculators; and none of them has ever run a business before like me who’s run a bunch of highly successful businesses (aside from a few bankruptcies that weren’t my fault).

We’re also going to start winning at foreign policy again and make our foreign policy great again. A bunch of losers at the Geneva Convention tell us we have to play by their rules. Their rules! No more. No way. From now on, we’ll do whatever it takes to defeat the terrorists and anyone else who gets in my way, even if it means we have to loosen up on our morals and our laws a little bit.

And we’re going to build a wall. It’s going to be a great wall. It’s going to be so high and so long and so wide that anybody trying to climb it will die of oxygen deprivation. And Mexico is going to pay for the whole thing because I’m a great negotiator. I’ve negotiated some of the biggest deals in history – and I’ll get them to pay. And if they don’t pay we’ll sue them; and if there is one place you don’t want to mess with me, it’s in court, because I don’t settle unless my lawyers tell me to settle . . . and I never hire lawyers who tell me to settle

We’re going to make America’s national security great again by stopping the NSA, FBI and others from harassing good Americans, and instead use them to start spying on those who don’t want America to win; people like Muslims, illegal immigrants, and anybody who insults my presidency. We’re going to tap their phones, emails, text messages – whatever – and then we’re going to listen to what they say, and if I don’t like it, we’ll either sue them or send them to Guantanamo, which will once again be great!

Thank you. If you need me, I’ll be at the White House.

And, by the way, what’s with the name the “White House?” White is for losers; it’s for those who surrender, and I never surrender. White is boooooring. We will paint the “White House” gold, because gold is for winners, and I’m a winner. It will be called the “Gold House.”

And where did the name “Air Force One” come from? I mean, who came up with that? I’m not in the “Air Force.” “Trump” is for winners. So I’m going to rename the plane “Trump Force Won” because I’m a winner and I won.

The next time you hear from me, it will be to send you my budget. And you’d better approve it. Otherwise, I will hire you again just to fire you again.

          Re:Politics - USA        
 Frazzled wrote:

Ok its a right wing rag but this is great.

http://townhall.com/columnists/bobbarr/2016/05/11/transcript-president-trumps-first-state-of-the-union-address-january-2017-n2161263


TRANSCRIPT: President Trump’s First State of the Union Address, January 2017

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans -- tonight I look around this room and I see two types of people. My friends who want to make America great again, and the rest of you losers who were too stupid to vote for me. I mean, seriously; I won…you didn’t…and that’s why you’re down there in the loser pit because you didn’t have what it takes to be a winner like me.

Now, America is going to win because I won and I will make it happen.

So to all you losers tonight I say this: You’re fired. No, no. Stop laughing. I’m not joking. You’re fired. Go home. Take a vacation to Loser Island. I don’t need you here. America doesn’t need you here. I don’t need you to make America great again. I don’t need a bunch of losers in Congress talking about rules, and procedures, and votes, and filibusters, and closure or cloture or whatever it is you in the Senate use to avoid making decisions. All these things just get in the way. I don’t need them.

So how am I going to make America great again? Easy. I have a plan and the best people. I only hire the best people. I don’t tolerate anything but the best. I fire losers. I will take those plans and make them a reality. We are going to start winning again in so many places. It will be great. And it will be very fast. And the Congress will only get in the way and slow things down.

We’re going to win on trade and make trade great again. One of my first actions will be to fire all the CEOs who want to take their businesses to other countries. You know, capitalism and free markets are great, but they need a guiding hand like my big hands [see; they are big] to keep winning. I know business and markets and economics – just look at how much money I made by winning in business.
CARTOONS | Steve Kelley
View Cartoon

All these loser economists talk about trade wars and higher costs to consumers as the result of my policies, but they’re morons with calculators; and none of them has ever run a business before like me who’s run a bunch of highly successful businesses (aside from a few bankruptcies that weren’t my fault).

We’re also going to start winning at foreign policy again and make our foreign policy great again. A bunch of losers at the Geneva Convention tell us we have to play by their rules. Their rules! No more. No way. From now on, we’ll do whatever it takes to defeat the terrorists and anyone else who gets in my way, even if it means we have to loosen up on our morals and our laws a little bit.

And we’re going to build a wall. It’s going to be a great wall. It’s going to be so high and so long and so wide that anybody trying to climb it will die of oxygen deprivation. And Mexico is going to pay for the whole thing because I’m a great negotiator. I’ve negotiated some of the biggest deals in history – and I’ll get them to pay. And if they don’t pay we’ll sue them; and if there is one place you don’t want to mess with me, it’s in court, because I don’t settle unless my lawyers tell me to settle . . . and I never hire lawyers who tell me to settle

We’re going to make America’s national security great again by stopping the NSA, FBI and others from harassing good Americans, and instead use them to start spying on those who don’t want America to win; people like Muslims, illegal immigrants, and anybody who insults my presidency. We’re going to tap their phones, emails, text messages – whatever – and then we’re going to listen to what they say, and if I don’t like it, we’ll either sue them or send them to Guantanamo, which will once again be great!

Thank you. If you need me, I’ll be at the White House.

And, by the way, what’s with the name the “White House?” White is for losers; it’s for those who surrender, and I never surrender. White is boooooring. We will paint the “White House” gold, because gold is for winners, and I’m a winner. It will be called the “Gold House.”

And where did the name “Air Force One” come from? I mean, who came up with that? I’m not in the “Air Force.” “Trump” is for winners. So I’m going to rename the plane “Trump Force Won” because I’m a winner and I won.

The next time you hear from me, it will be to send you my budget. And you’d better approve it. Otherwise, I will hire you again just to fire you again.


Holy gak. I'm dying over here
          Re:Politics - USA        
Spoiler:
 jreilly89 wrote:
 Frazzled wrote:

Ok its a right wing rag but this is great.

http://townhall.com/columnists/bobbarr/2016/05/11/transcript-president-trumps-first-state-of-the-union-address-january-2017-n2161263


TRANSCRIPT: President Trump’s First State of the Union Address, January 2017

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans -- tonight I look around this room and I see two types of people. My friends who want to make America great again, and the rest of you losers who were too stupid to vote for me. I mean, seriously; I won…you didn’t…and that’s why you’re down there in the loser pit because you didn’t have what it takes to be a winner like me.

Now, America is going to win because I won and I will make it happen.

So to all you losers tonight I say this: You’re fired. No, no. Stop laughing. I’m not joking. You’re fired. Go home. Take a vacation to Loser Island. I don’t need you here. America doesn’t need you here. I don’t need you to make America great again. I don’t need a bunch of losers in Congress talking about rules, and procedures, and votes, and filibusters, and closure or cloture or whatever it is you in the Senate use to avoid making decisions. All these things just get in the way. I don’t need them.

So how am I going to make America great again? Easy. I have a plan and the best people. I only hire the best people. I don’t tolerate anything but the best. I fire losers. I will take those plans and make them a reality. We are going to start winning again in so many places. It will be great. And it will be very fast. And the Congress will only get in the way and slow things down.

We’re going to win on trade and make trade great again. One of my first actions will be to fire all the CEOs who want to take their businesses to other countries. You know, capitalism and free markets are great, but they need a guiding hand like my big hands [see; they are big] to keep winning. I know business and markets and economics – just look at how much money I made by winning in business.
CARTOONS | Steve Kelley
View Cartoon

All these loser economists talk about trade wars and higher costs to consumers as the result of my policies, but they’re morons with calculators; and none of them has ever run a business before like me who’s run a bunch of highly successful businesses (aside from a few bankruptcies that weren’t my fault).

We’re also going to start winning at foreign policy again and make our foreign policy great again. A bunch of losers at the Geneva Convention tell us we have to play by their rules. Their rules! No more. No way. From now on, we’ll do whatever it takes to defeat the terrorists and anyone else who gets in my way, even if it means we have to loosen up on our morals and our laws a little bit.

And we’re going to build a wall. It’s going to be a great wall. It’s going to be so high and so long and so wide that anybody trying to climb it will die of oxygen deprivation. And Mexico is going to pay for the whole thing because I’m a great negotiator. I’ve negotiated some of the biggest deals in history – and I’ll get them to pay. And if they don’t pay we’ll sue them; and if there is one place you don’t want to mess with me, it’s in court, because I don’t settle unless my lawyers tell me to settle . . . and I never hire lawyers who tell me to settle

We’re going to make America’s national security great again by stopping the NSA, FBI and others from harassing good Americans, and instead use them to start spying on those who don’t want America to win; people like Muslims, illegal immigrants, and anybody who insults my presidency. We’re going to tap their phones, emails, text messages – whatever – and then we’re going to listen to what they say, and if I don’t like it, we’ll either sue them or send them to Guantanamo, which will once again be great!

Thank you. If you need me, I’ll be at the White House.

And, by the way, what’s with the name the “White House?” White is for losers; it’s for those who surrender, and I never surrender. White is boooooring. We will paint the “White House” gold, because gold is for winners, and I’m a winner. It will be called the “Gold House.”

And where did the name “Air Force One” come from? I mean, who came up with that? I’m not in the “Air Force.” “Trump” is for winners. So I’m going to rename the plane “Trump Force Won” because I’m a winner and I won.

The next time you hear from me, it will be to send you my budget. And you’d better approve it. Otherwise, I will hire you again just to fire you again.


Holy gak. I'm dying over here


Gotta admit, I enjoyed reading that. LOLz
          Re:Politics - USA        
 TheMeanDM wrote:
Spoiler:
 jreilly89 wrote:
 Frazzled wrote:

Ok its a right wing rag but this is great.

http://townhall.com/columnists/bobbarr/2016/05/11/transcript-president-trumps-first-state-of-the-union-address-january-2017-n2161263


TRANSCRIPT: President Trump’s First State of the Union Address, January 2017

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans -- tonight I look around this room and I see two types of people. My friends who want to make America great again, and the rest of you losers who were too stupid to vote for me. I mean, seriously; I won…you didn’t…and that’s why you’re down there in the loser pit because you didn’t have what it takes to be a winner like me.

Now, America is going to win because I won and I will make it happen.

So to all you losers tonight I say this: You’re fired. No, no. Stop laughing. I’m not joking. You’re fired. Go home. Take a vacation to Loser Island. I don’t need you here. America doesn’t need you here. I don’t need you to make America great again. I don’t need a bunch of losers in Congress talking about rules, and procedures, and votes, and filibusters, and closure or cloture or whatever it is you in the Senate use to avoid making decisions. All these things just get in the way. I don’t need them.

So how am I going to make America great again? Easy. I have a plan and the best people. I only hire the best people. I don’t tolerate anything but the best. I fire losers. I will take those plans and make them a reality. We are going to start winning again in so many places. It will be great. And it will be very fast. And the Congress will only get in the way and slow things down.

We’re going to win on trade and make trade great again. One of my first actions will be to fire all the CEOs who want to take their businesses to other countries. You know, capitalism and free markets are great, but they need a guiding hand like my big hands [see; they are big] to keep winning. I know business and markets and economics – just look at how much money I made by winning in business.
CARTOONS | Steve Kelley
View Cartoon

All these loser economists talk about trade wars and higher costs to consumers as the result of my policies, but they’re morons with calculators; and none of them has ever run a business before like me who’s run a bunch of highly successful businesses (aside from a few bankruptcies that weren’t my fault).

We’re also going to start winning at foreign policy again and make our foreign policy great again. A bunch of losers at the Geneva Convention tell us we have to play by their rules. Their rules! No more. No way. From now on, we’ll do whatever it takes to defeat the terrorists and anyone else who gets in my way, even if it means we have to loosen up on our morals and our laws a little bit.

And we’re going to build a wall. It’s going to be a great wall. It’s going to be so high and so long and so wide that anybody trying to climb it will die of oxygen deprivation. And Mexico is going to pay for the whole thing because I’m a great negotiator. I’ve negotiated some of the biggest deals in history – and I’ll get them to pay. And if they don’t pay we’ll sue them; and if there is one place you don’t want to mess with me, it’s in court, because I don’t settle unless my lawyers tell me to settle . . . and I never hire lawyers who tell me to settle

We’re going to make America’s national security great again by stopping the NSA, FBI and others from harassing good Americans, and instead use them to start spying on those who don’t want America to win; people like Muslims, illegal immigrants, and anybody who insults my presidency. We’re going to tap their phones, emails, text messages – whatever – and then we’re going to listen to what they say, and if I don’t like it, we’ll either sue them or send them to Guantanamo, which will once again be great!

Thank you. If you need me, I’ll be at the White House.

And, by the way, what’s with the name the “White House?” White is for losers; it’s for those who surrender, and I never surrender. White is boooooring. We will paint the “White House” gold, because gold is for winners, and I’m a winner. It will be called the “Gold House.”

And where did the name “Air Force One” come from? I mean, who came up with that? I’m not in the “Air Force.” “Trump” is for winners. So I’m going to rename the plane “Trump Force Won” because I’m a winner and I won.

The next time you hear from me, it will be to send you my budget. And you’d better approve it. Otherwise, I will hire you again just to fire you again.


Holy gak. I'm dying over here


Gotta admit, I enjoyed reading that. LOLz

How many here wish that happens though
          Life Sentences for the New America        
by
Tim Keane
2006-10-29

Prison-building in the United States and in its Cuban and Middle Eastern colonies is as much a boon for private companies as it is a life-support industry for American members of Congress. David Matlin’s Prisons: Inside the New America shows how the building and operating of penitentiaries is a ten-billion dollar a year boon to the private entity that gets into the booming market. The companies which Matlin identifies have real names that sound like tags from B-movie scripts: “Wakenhut Corrections Corporation,” “HLM Justice,” “Tindell Concrete Products,” “The Dick Group of Companies.”

David Matlin’s book brings before us startling evidence from Prison Inc., like this pitch, a promotion by the “American Correctional Association,” which gleefully reports to potential investors that:

The prison industry continues to grow at an unprecedented rate. With the number of inmates incarcerated in our nation’s prison’s jails and detention rates approaching 1.5 million the need for…new products and services continues to be an industry priority…and unlimited opportunity for your company to profit from this multi-billion dollar industry (61)

So is this sick industry just another example of good old post-millennial free market Republicanism run amuck? Partly. David Matlin’s study is largely based on his many years teaching creative writing in the New York State prison system, and he informs us that it was Democratic Governor Mario Cuomo who, for the ten years leading up to his final 1994 election campaign, supervised a doubling in the number of penitentiaries in New York State and nearly tripled the number of inmates, all while Democratic President Bill Clinton’s 1995 Crime Bill decimated the very prisoner education initiatives in which Matlin nobly served.

So why did an accomplished novelist and poet and native Californian choose to transplant himself across the country for almost two decades to teach in New York prisons?

His private purposes, besides making a living, are left mostly understated, mainly because this memoir, unlike most autobiographies these days, works from the inside out, rather than the other way round. Prisons: Inside the New America is a meditation on a self which finds its own struggles manifest in our wider ones: in writing the book, Matlin seems to be have been drawn, much like Henry David Thoreau, to live out the American writer’s personal struggle with his country’s built-in contradictions. So the book is a rhythmical, readable, call-and-response testimony of facts and anguish. Matlin is not only concerned with the politics of Prison Inc. but also with the ecological place of incarceration in a consumer culture.

To this end he ruminates on and even narrates from the land where our prisons are built, namely, in the “most beautiful countryside in North America,” from a New York correctional facility built on Seneca natives’ land near where “the Genesee gorge fall[s] a sheer thousand feet into swamp, sand bar, and a waiting river that has been eating into this plateau since the final recession of the last glaciers.”

His survey of prison locations extends to his native California, where he lives comfortably in a lush valley surrounded by “Cambrian ridges” in view of the “willows” along “Esopus Creek,” but where he is ever-mindful of other Californian terrain where “163,000 men and women [are] imprisoned” and where the “Border ‘Wall’ [which] extends literally into the Pacific and for detailed miles past Tijuana and on into the dangerous remote deserts where people die by the hundreds, nearly mummifying within hours of their death” (xix).

What keeps Matlin’s wandering narrative so readable are the specific accounts of prisoners with whom he works - prisoners such as “Kenneth,” a veteran who did time in a Saigon army jail for having gone AWOL after participating in the My Lai massacre and now imprisoned for armed robbery in upstate New York in the late 1980s. Matlin introduces Kenneth to the avant-garde verse of H.D., William Carlos Williams, Charles Olson and Robert Duncan, and in these newly opened “fields” of poetics, this inmate finds “a measure for the consequences he’s lived through” and writes “the finest beginning poetry” Matlin has ever read.

Matlin shows how writing bears on the fate of doing hard time: writing is about exercising freedom through one kind of sentence, and prison is about terminating that freedom through another kind of sentence. Or, as Matlin puts it, a written sentence “is as far as a breath can be carried, as a sentence is as far as a life can be condemned.” Take, for example, the horrifying truth that, in March 1993, he found about “200,000” veterans were serving sentences inside American prisons, some of whom, in New York State, under his instruction, compose poetry that, in the tradition of Arthur Rimbaud and Ezra Pound “offers us [readers] no escapable device” (59):

Honor is the

          sight of red-gray matter

                                   sickly falling

                                             in small jellied

clumps

          from the waist

                              of a mango tree…

                                                       like opaque snot

                                                                                sliding off

9th century

               China. (58)

He shows his incarcerated students capable of writing exposés as realistic as those of other war veterans-turned-literary-lions such as Norman Mailer or Tim O’Brien, including one autobiography by an inmate whom Matlin identifies as “Nick.” Nick shares with his teacher first-hand accounts of how the US military in Vietnam replaced the soldiers’ M14 rifles (which had “cut [US] troops to shreds”) with M16 rifles so defective that soldiers had to mail order “lubricants, solvents, shoe-strings, WD-40 and insect repellants to clear their pieces” (47).

Matlin’s star student is “Bennie,” an African-American who earns a Bachelors’ degree while serving time. Bennie is paroled only to find that, as a former sex offender, he cannot even rent an apartment from a sympathetic black landlord who calls Matlin to share their resigned frustration about this ex-con’s permanent exile from any kind of home. After all, high recidivism rates (at over 60% over all and a staggering 90% among California’s young offenders) are the built-in pistons of the prison biz.

The conditions inside the various “correctional facilities” where Matlin works reflect the nightmares of the 1980s and 1990s on the outside: battle-traumatized Vietnam vets who have turned to lives of crime, an unchecked and possibly government encouraged AIDS epidemic, the insanity of the failed and failing war on drugs, and the decades-old racial imbalance regarding incarceration, the latter fact most stirring Matlin’s anger.

Matlin doesn’t thoroughly explore the causes of racism in the criminal justice system. But Ishmael Reed’s introduction to the book suggests that someone should, if only because “the majority of those arrested in both cities and rural areas are white; while those imprisoned are disproportionately black and Hispanic” (xiii). Whites are arrested more yet they are incarcerated in fewer numbers. And they are less prepared than blacks for the cell block when they are in it; Matlin cites a New York State study that counted a “2 to 1 ratio of white to black inmate suicides for the year 1989, and a 4 to 1 ratio of white to Hispanic suicides” (67).

For all its attention to statistics, Matlin strives less after traditional sociology than the pursuit of a philosophical critique of a republic at risk. His book is written in the acknowledged tradition of French writers from Alexis De Tocqueville to Michel Foucault who, like Matlin, explore the consequences of imprisoning bodies on its “free” citizens’ behalf. In turn, he shows how that collective contract turns jails into emblems of social necessity rather than what they are, disgraces to a healthy democracy. It’s a situation which Matlin claims intensified in the U.S. during the Cold War which made citizens “cold…like Ahani in Blake’s terrifying book….’unbodied’ and ‘parted’ in our civil conception of ourselves.” (43)

The abstraction and the objectification of those incarcerated in political and media languages encourages “the evaporation of a civic vision” and propels the ongoing prison-building boon, a process which, owing to US occupations in the Middle East, has spread internationally. Matlin describes the former architect of the Iraq invasion, Paul Wolfowitz in 2003, proudly “inspecting the refurbished jail cells of Abu Ghraib,” the most famous “correctional facility” on earth outside of Guantanamo Bay. And Matlin eerily and convincingly compares Abu Ghraib to Fort Marion prison in Florida built not of stone but of “coquina” for the incarceration of Apache, Kiowa, Cheynne and Arapho native Americans in the late 1800s, who faced death by either yellow fever and tuberculosis and/or the guns of white imperialists dead-set on “ ‘methods for the solution of the Indian problem’ ” (130).

Writers within prisons is hardly a new story, even in the U.S. But the intersection between these two kinds of sentences is revealing. In the 1840s, as much opposed to slavery as he was to the Mexican War, Thoreau spent a single night in jail rather than pay his taxes. From that laughably simple sentence he formulated far more complicated sentences about principled law-breaking as a model for human progress, writing sentences on disobedience which partially guided Mahatma Gandhi and Martin Luther King Jr. decades later as they found themselves in and out of jail while they led their respective liberation movements. They too wrote from prison.

And what would such prophets of liberation write, or even do, today, after reading Matlin’s disturbing facts? Like the reality that “between 1985 and 2000 the Nation’s spending on ‘Corrections’ increased by 166 percent compared to a 24% increase in higher education”? And how to respond to a U.S. government that today collects federal taxes in no small part to finance the construction of new and newer prisons from California to New York, from Maine to Cuba, from Afghanistan to Mesopotamia?

Matlin’s book offers few solutions beyond his crucial instigation that his readers recognize what our politicians are doing to make prisons a lucrative commodity at our expense.

One progressive bright spot he cites is the ongoing success of educational programs in prisons despite Clinton’s drastic federal cutbacks. He also alludes to the recently striking success of Missouri’s juvenile detention system in driving down recidivism rates, a model now being examined to fix California’s abysmal justice system.

Ultimately, though, the rest is up to us as free citizens who are now aware that “2.1 million” of our three hundred million fellow citizens are now locked up (that is, one-quarter of the earth’s entire inmate population is locked up here in America). They are quarantined almost invisibly from our view in the recesses of American wilderness while, mostly in cities, we remain under the siege (or the spell) of politicians with their “will to hatred and panic soaking”-rhetoric and their (and our) “affirmation[s] of prison as cultural and historical monument” (87), all of which helps government-contracted corporations get rich and underwrites our “security” - a circumstance that is most definitely a physical force.

It’s a physical force Thoreau himself pinpointed over 150 years ago when he not-so-passively advocated the resistance of a misguided US government that “never intentionally confronts a man’s sense, intellectual or moral, but only his body, his senses. It is not armed with superior wit or honesty, but with superior physical strength. I was not born to be forced. I will breath after my own fashion. Let us see who is the strongest.” (127).

Put another way, Matlin puts before us the words of Joseph Brant, a Mohawk “warrior and diplomat” who tracked his life sentences against the physical force of the U.S. government long before Thoreau, resisting and writing against an American penal system that shatters the religious pretense of its very culture: “I had rather die by the most severe tortures ever inflicted on this Continent, than languish in your prisons for a single year…Does then the religion of Him whom you call your Savior inspire this spirit and lead to such practices? Surely no. It is recorded of Him a bruised reed He never broke.”

Works Cited

Matlin, David. Prisons: Inside the New America from Vernooykill Creek to Abu Ghraib. 2nd ed. Berkeley: North Atlantic, 2004.

Thoreau, Henry David. The Portable Thoreau. Ed. Carl Bode. New York: Penguin, 1947.


          Politics - USA        
Western society has always struggled to get the wealthy to pay their fair share. It goes back to British kings, for crying out loud. Long story short- it is easier to force compliance on those with fewer resources to resist. In the US, the wealthy have created the whole "job creators" narrative to try to insulate themselves and whine about taxation, despite top level taxation being at a historic low and wealth concentration approaching historic highs. In other words the very top have more than ever and yet pay less in taxes. You would think with stagnant and declining wages, the average citizen would be very upset, but a big enough group buys into the crony capitalist story to keep it going. The fact that these people naively believe that we have anything even remotely resembling free markets and yet point to major market failures where there has been government involvement to buttress their argument would be laughable if it weren't so sad. Of course government is involved in major business issues- business pays loads of money to make sure that happens! They just want the protections and bail outs though, not the oversight and limits.

Part of the problem is the legal fiction of corporations as people and the free flow of money and influence into the political process. It undermines the whole concept of individual democracy and substitutes a bizarre collectivism for the wealthy. What it ignores is that those at the top are very few actual people and not the primary drivers of economic activity. Rather, they are largely the beneficiaries of it. While one can point to individual exceptions who innovate something new that does create wealth, by and large most just sit atop existing systems and are more or less interchangeable. Heck, get rid of them all and it would make much less of a difference than if you eliminated half of the people under them. It's why ensuring that generated wealth flows back into the systems for further improvement and expansion is so important. Otherwise you just end up with a quasi-feudal wealth extraction and collection system.

Efficient tax systems should adequately cover necessary government functions as well as encourage sound economic practices. Arguably current US tax systems focus too much on income and encourage hoarding at high levels. Encouraging more fair systems is in the best interests of everyone over the long term as it encourages greater overall growth and stability.

As to societal revolution, it is always messy. But when it starts people are usually so upset and miserable, even death becomes a limited deterrent, so pointing out that "the poor die too" is kind of a nonpoint. Such revolutions are bloody and rarely make things more equitable as it is easy for military strongmen to take advantage of the chaos. It doesn't change the fact that if things grow too desperate, people tend to revolt. Such actors are primarily motivated by immediate concerns. Agitating for change or deposal of current authorities is not the same as a call for violent revolution. Though the former may become the latter.
          Politics - USA        
 jmurph wrote:
Western society has always struggled to get the wealthy to pay their fair share. It goes back to British kings, for crying out loud. Long story short- it is easier to force compliance on those with fewer resources to resist. In the US, the wealthy have created the whole "job creators" narrative to try to insulate themselves and whine about taxation, despite top level taxation being at a historic low and wealth concentration approaching historic highs. In other words the very top have more than ever and yet pay less in taxes. You would think with stagnant and declining wages, the average citizen would be very upset, but a big enough group buys into the crony capitalist story to keep it going. The fact that these people naively believe that we have anything even remotely resembling free markets and yet point to major market failures where there has been government involvement to buttress their argument would be laughable if it weren't so sad. Of course government is involved in major business issues- business pays loads of money to make sure that happens! They just want the protections and bail outs though, not the oversight and limits.

Part of the problem is the legal fiction of corporations as people and the free flow of money and influence into the political process. It undermines the whole concept of individual democracy and substitutes a bizarre collectivism for the wealthy. What it ignores is that those at the top are very few actual people and not the primary drivers of economic activity. Rather, they are largely the beneficiaries of it. While one can point to individual exceptions who innovate something new that does create wealth, by and large most just sit atop existing systems and are more or less interchangeable. Heck, get rid of them all and it would make much less of a difference than if you eliminated half of the people under them. It's why ensuring that generated wealth flows back into the systems for further improvement and expansion is so important. Otherwise you just end up with a quasi-feudal wealth extraction and collection system.

Efficient tax systems should adequately cover necessary government functions as well as encourage sound economic practices. Arguably current US tax systems focus too much on income and encourage hoarding at high levels. Encouraging more fair systems is in the best interests of everyone over the long term as it encourages greater overall growth and stability.

As to societal revolution, it is always messy. But when it starts people are usually so upset and miserable, even death becomes a limited deterrent, so pointing out that "the poor die too" is kind of a nonpoint. Such revolutions are bloody and rarely make things more equitable as it is easy for military strongmen to take advantage of the chaos. It doesn't change the fact that if things grow too desperate, people tend to revolt. Such actors are primarily motivated by immediate concerns. Agitating for change or deposal of current authorities is not the same as a call for violent revolution. Though the former may become the latter.


Even the "poor" people in the US enjoy a standard of living that prevents the risk/reward equation of violent revolution balanced in favor of continuing to sit on the couch watching reality television. Things would have to get apocalyptically worse than they are now for nominally sane normal people to believe that murdering hedge fund managers or blowing up Wall St would improve their standard of living.
          Politics - USA        
 jmurph wrote:
Western society has always struggled to get the wealthy to pay their fair share. It goes back to British kings, for crying out loud. Long story short- it is easier to force compliance on those with fewer resources to resist. In the US, the wealthy have created the whole "job creators" narrative to try to insulate themselves and whine about taxation, despite top level taxation being at a historic low and wealth concentration approaching historic highs. In other words the very top have more than ever and yet pay less in taxes. You would think with stagnant and declining wages, the average citizen would be very upset, but a big enough group buys into the crony capitalist story to keep it going. The fact that these people naively believe that we have anything even remotely resembling free markets and yet point to major market failures where there has been government involvement to buttress their argument would be laughable if it weren't so sad. Of course government is involved in major business issues- business pays loads of money to make sure that happens! They just want the protections and bail outs though, not the oversight and limits.

Part of the problem is the legal fiction of corporations as people and the free flow of money and influence into the political process. It undermines the whole concept of individual democracy and substitutes a bizarre collectivism for the wealthy. What it ignores is that those at the top are very few actual people and not the primary drivers of economic activity. Rather, they are largely the beneficiaries of it. While one can point to individual exceptions who innovate something new that does create wealth, by and large most just sit atop existing systems and are more or less interchangeable. Heck, get rid of them all and it would make much less of a difference than if you eliminated half of the people under them. It's why ensuring that generated wealth flows back into the systems for further improvement and expansion is so important. Otherwise you just end up with a quasi-feudal wealth extraction and collection system.

Efficient tax systems should adequately cover necessary government functions as well as encourage sound economic practices. Arguably current US tax systems focus too much on income and encourage hoarding at high levels. Encouraging more fair systems is in the best interests of everyone over the long term as it encourages greater overall growth and stability.

As to societal revolution, it is always messy. But when it starts people are usually so upset and miserable, even death becomes a limited deterrent, so pointing out that "the poor die too" is kind of a nonpoint. Such revolutions are bloody and rarely make things more equitable as it is easy for military strongmen to take advantage of the chaos. It doesn't change the fact that if things grow too desperate, people tend to revolt. Such actors are primarily motivated by immediate concerns. Agitating for change or deposal of current authorities is not the same as a call for violent revolution. Though the former may become the latter.


The top earners pay most of taxes already and the bottom 40% don't pay taxes at all. What do you mean by the term fair share? Everyone pays tax?

http://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24



          UU Hak Cipta, Ketentuan Umum, Lingkup Hak Cipta, Perlindungan Hak Cipta, Perbatasan Hak Cipta Teknologi Informasi         

Hak Cipta dalam Kerangka Persaingan Pasar
Keberadaan hak cipta sebagai hak ekslusif bagi para penciptanya harus dapat dihormati dan dihargai. Penemuan baru oleh peneliti atau pencipta bukan pekerjaan dalam waktu singkat, ia membutuhkan waktu lama dan biaya besar sehingga wajar hasil cipta tersebut harus dilindungi. Hasil ciptaan tersebut bahkan dapat digunakan untuk tujuan komersial dalam kegiatan bisnis yang amat menguntungkan.
John Naisbitt dan Patricia Aburdene telah meramalkan bahwa suatu saat nanti dunia yang dihuni manusia ini akan berubah menjadi suatu perkampungan global (global village) dengan pola satu sistem perekonomian atau single economy system berdasarkan permintaan/mekanisme pasar dan persaingan bebas. Mereka yang mampu survive adalah orang atau para pengusaha yang dapat menghasilkan “produk” dengan kualitas tinggi dan harga bersaing. Artinya, manusia yang berkualitas dalam era ini adalah mereka yang dianggap memiliki produk dengan “nilai jual” yang dapat diandalkan pada persaingan global, baik di pasar nasional, regional maupun internasional dengan berlakunya pasar bebas (free market) dalam perdagangan internasional.
Berkaitan dengan era pasar bebas dengan perdagangan barang dan atau jasa, bermula pada 15 April 1994 dengan tercapainya kesepakatan internasional di Maroko melalui Agreement on Establishing the World Trade Organization (WTO) yang dikenal sebagai Marrakesh Agreement. Adanya kesepakatan yang akhirnya melahirkan organisasi perdagangan dunia (WTO) ini, maka produk dari setiap orang atau negara diatur melalui mekanisme pasar yang mengutamakan kualitas barang dan atau jasa. Produk tersebut biasanya dilindungi hukum sebagai hasil rasa, karsa dan cipta manusia yang tidak bisa begitu saja untuk dilanggar. Indonesia sebagai bagian dari masyarakat internasional ikut menandatangani kesepakatan ter-sebut melalui UU No. 7 Tahun 1994 (LN Tahun 1994 No. 95 TLN No. 3564) tanggal 2 Nopember 1994 yang berlaku sebagai ius constitutum dalam konstelasi hukum nasional yang mempunyai dampak luas pada bidang lain.
Konsekuensinya, semua kesepakatan itu harus ditaati dan diterapkan dengan konsisten. Salah satu agenda penting dari WTO adalah Agreement on Trade Related Aspects of Intellectual Property Rights Including Trade in Counterfeit Goods. Kesepakatan ini akhirnya melahirkan TRIPs (Trade Related Aspect of Intellectual Property Rights) yang bertujuan untuk meningkatkan perlindungan di bidang Hak Kekayaan Intelektual (HKI) dari pembajakan atas suatu karya kreatif dan inovatif seseorang/kelompok orang, baik di bidang sastra, seni, teknologi dan karya ilmiah. Suatu hal yang cukup kompleks dan perlu dilakukan upaya adaptasi (penyesuai-an) terus menerus untuk dapat mengikuti dinamika perkembangan dengan perangkat hukum yang mengatur masalah baru tersebut karena sebelumnya justru tidak diatur dalam ketentuan hukum nasional. Kevakuman ini harus ditutupi dengan adanya aturan undang-undang sebagai kepastian hukum untuk mengikuti perkembangan iptek dan masyarakat internasional.
Salah satu bidang HKI adalah hak cipta (copy rights) yang merupakan hak ekslusif (khusus) bagi pencipta atau penerima hak untuk mengumum-kan atau memperbanyak ciptaannya atau memberikan izin untuk itu dengan tidak mengurangi pembatasan-pembatasan menurut peraturan perundang-undangan yang berlaku (Pasal 1 LTU No. 19 Tahun 2002). Ciptaan merupakan hasil setiap karya pencipta dalam bentuk khas apapun juga dalam lapangan ilmu, seni dan sastra yang menguntungkan dari segi materil, moril dan reputasi seseorang atau kelompok orang yang menghasil-kan ciptaan berdasarkan kerja keras melalui pengamatan, kajian dan penelitian secara terus menerus. Sudah sewajarnya, hasil ciptaan orang lain harus dapat dilindungi hukum dari setiap bentuk pelanggaran hak cipta. la sebenarnya merupakan suatu perbuatan tidak terpuji dan tercela bahkan tidak “bermoral” oleh orang-orang tidak bertanggungjawab yang melakukannya, karena adanya”the morality that makes law possible.”
Pada kondisi ini, sudah pasti tidak dapat dihindarkan adanya kecen-derungan sebagian orang/kelompok orang yang menginginkan dengan berbagai cara untuk meneguk keuntungan finansial secara cepat tanpa usaha keras, mengeluarkan modal dan kejujuran dengan membajak hasil ciptaan orang lain ataupun mendompleng reputasi ciptaan pihak lain sehingga amat merugikan bagi para pencipta pertama. Tindakan ini sudah tentu tidak dapat dibenarkan, karena melanggar hukum sebab bukan hanya para pencipta yang sah saja merasa dirugikan, akan tetapi juga masyarakat luas mengalami kerugian besar karena memperoleh barang dan atau jasa tidak sesuai kualitas yang diharapkan. Keadaan ini dikhawatirkan dapat mengakibatkan terjadi degradasi moral dan etika dalam kehidupan masyarakat yang tidak mau menghargai kreasi intelektual pihak lain yang telah bersusah payah melahirkan ciptaannya.
Dalam pergaulan masyarakat internasional, negara-negara yang memproteksi atau membiarkan pelanggaran hak cipta tanpa adanya penindakan hukum dapat dimasukkan dalam priority watch list, karena tidak memberikan perlindungan HKI secara memadai bagi negara atau pemilik/pemegang izin ciptaan tersebut. Sanksi yang dijatuhkan dapat berupa pengucilan dalam pergaulan masyarakat internasional atau sanksi ekonomi dari produk negara itu pada transaksi bisnis internasional.
UU No. 19 Tahun 2002 yang berlaku efektif pada tanggal 23 Juli 2003 sebagai pengganti UU No. 6 Tahun 1982 tentang Hak Cipta sebagaimana telah diubah dengan UU No. 7 Tahun 1987 dan UU No. 12 Tahun 1997 diharapkan sekali menjadi a new legal framework atau perangkat hukum baru untuk mengantisipasi merebaknya pelanggaran hak cipta di tanah air oleh orang-orang yang tidak bertanggungjawab dengan maksud untuk memperoleh keuntungan secara “bypass” atau “potong kompas” (cepat) dengan cara tercela melanggar hukum atas hak-hak orang lain. Keadaan demikian tentu akan menimbulkan masalah terhadap upaya perlindungan hukum atas pelanggaran hak cipta mengingat tidak semua orang dapat memahami-nya dengan baik.
Perkembangan dan Pembatasan Hak Cipta
Keberadaan copyright atau hak cipta semenjak tahun 1886 telah diakui oleh masyarakat internasional sebagai hak ekslusif para pencipta. Sebagai salah satu bentuk karya intelektual yang dilindungi dalam HKI, hak cipta memiliki peran amat penting dalam rangka mendorong dan melindungi penciptaan, penyebarluasan hasil karya ilmu pengetahuan, seni dan sastra serta teknologi untuk mempercepat upaya pertumbuhan pembangunan dan kecerdasan kehidupan suatu bangsa. Keadaan ini amat disadari oleh Pemerintah Indonesia sebagaimana diamanatkan dalam UU No. 25 Tahun 2000 tentang Program Pembangunan Nasional tahun 2000-2004 pada kegiatan pembangunan pendidikan, khususnya program penelitian, peningkatan kapasitas dan pengembangan kemampuan sumber daya ilmu pengetahuan dan teknologi.
Suatu ciptaan dapat memberi nilai ekonomis bagi para pencipta dan pemegang izin melalui kegiatan ekonomi, yakni penjualannya ke pasar. Upaya menghasilkan suatu ciptaan membutuhkan proses waktu, nspirasi, pemikiran dana dan kerja keras sehingga wajar hasil karya para pencipta itu harus dilindungi dari setiap bentuk pelanggaran hak cipta yang sangat merugikan para pencipta. Sebaliknya, dalam batas-batas tertentu pada ketentuan undang-undang hak cipta, hasil ciptaan seseorang dapat dibenarkan diambil orang lain dengan izin atau tanpa izin pemilik yang bersangkutan tanpa perlu takut dikategorikan sebagai pelanggaran hukum terhadap hak cipta.
Standar perlindungan atas HKI yang diterapkan dalam perjanjian adalah standar perlindungan minimal yang telah tertuang dalam perjanjian yang sudah ada sebelumnya yang dikembangkan pada perjanjian dan konvensi dalam naungan World Intellectual Property Organization (WIP0). Perlindungan terhadap hak cipta adalah berdasarkan pada kesepakatan The Beme Convention for the Protection of Literary and Artistic Works tanggal 9 September 1886 di Bern, Swiss.
Pemerintah Belanda yang menjajah Indonesia pada tanggal 1 November 1912 memberlakukan keikutsertaannya pada Konvensi Bern melalui asas konkordansi di Hindia Belanda dengan mengeluarkan suatu Auterswet 1912 berdasarkan UU Hak Cipta Belanda pada tanggal 29 Juni 1911 (Stb Belanda No. 197). Konvensi Bern 1886 terus direvisi dan diamandir oleh negara-negara anggota WIP0. Terakhir direvisi di Paris pada tahun 1971 dan 1989.
Keikutsertaan suatu negara sebagai anggota Konvensi Bern akan menimbulkan kewajiban negara peserta untuk menerapkan dalam perundang-undangan nasional di bidang hak cipta. Lima prinsip dasar dianut Konvensi Bern adalah sebagai berikut:
Pertama, prinsip perlakuan nasional (national treatment principle), yakni ciptaan yang berasal dari salah satu peserta perjanjian atau suatu ciptaan yang pertama kali diterbitkan pada salah satu negara peserta perjanjian harus mendapat perlindungan hukum hak cipta yang sama sebagaimana diperoleh ciptaan peserta warga negara itu sendiri.
Kedua, prinsip perlindungan hukum langsung/otomatis (automatic protection principle). Pemberian perlindungan hukum harus diberikan secara langsung tanpa harus memenuhi syarat apa pun (must not be conditional upon compliance with any formality).
Ketiga, prinsip perlindungan independen (independent of protection principle), yakni suatu perlindungan hukum diberikan tanpa harus bergantung kepada pengaturan perlindungan hukum negara asal pencipta.
Keempat, prinsip minimal jangka waktu hak cipta (minimum duration of copyright). Perlindungan diberikan minimal selama hidup pencipta ditambah 50 tahun setelah pencipta meninggal dunia.
Kelima, prinsip hak-hak moral (moral rights principle). Hak yang tergolong sebagai hak moral dimiliki pencipta seperti keberatan mengubah, menambah atau mengurangi keaslian ciptaan yang perlu mendapat pengaturan perlindungan-nya dalam hukum nasional negara peserta Konvensi Bern.
Pemerintah Indonesia menjadi anggota WTO sejak tahun 1994. Keikutsertaan ini juga membawa konsekuensi hukum harus memberla-kukan semua hasil dan prinsip dasar dari Konvensi Bern.
Hal, ini ditindak-lanjuti dengan mensahkannya melalui pembentukan Keppres RI No. 18 Tahun 1997 pada tanggal 7 Mei 1997 dan segera dinotifikasikan ke WIPO berdasarkan Keppres RI No. 19 Tahun 1997 tanggal 5 Juni 1997. Berlakunya hasil kesepakatan The Berne Convention di Indonesia, maka pemerintah harus mampu untuk melindungi ciptaan dari seluruh negara anggota peserta dan penandatangan The Berne Convention tersebut. Selain itu, Indonesia harus pula melindungi ciptaan bangsa asing yang ada di tanah air melalui kesepakatan pada perjanjian bilateral yang telah diratifikasi.
Adanya perjanjian bilateral tersebut akan memberi perlindungan hukum dan rasa aman hak cipta secara timbal balik antara ciptaan bangsa kita dengan bangsa lain yang sama-sama bergabung dalam WTO, terutama
dengan berlakunya pasar bebas.
Pada persetujuan TREPs, khususnya Pasal 7 menentukan konsep dasar sasaran perlindungan dan penegakan hukum (law enforcement) terhadap HKI yang ditujukan untuk memacu penemuan baru di bidang teknologi dan untuk memperlancar alih serta penyebaran teknologi dengan tetap memperhatikan kepentingan produsen dan pengguna pengetahuan tentang teknologi dan dilakukan dengan cara yang menunjang kesejahteraan sosial dan ekonomi, dan keseimbangan antara hak dan kewajiban. Perlindungan itu didasarkan pada masalah pokok ruang lingkup berlakunya hak cipta dengan dua prinsip dasar, yakni utilitarian-non utilitarian or junctional-non functional dichotomy and idea expression dichotomy. Artinya, adanya dikotomi pada kegunaan-ketidakgunaan atau berfungsi-tidak berfungsi dan munculnya gagasan dari ciptaan tersebut.
Penjabaran dari kesepakatan internasional mengenai hak cipta yang diratifikasi oleh Indonesia terdapat pada ketentuan UU No. 19 Tahun 2002. Pada Pasal 12 ayat (1) UU No. 19 Tahun 2002 menentukan ciptaan yang dapat dilindungi ialah ciptaan dalam bidang ilmu pengetahuan, sastra dan seni yang meliputi hasil karya
(a) buku, program komputer, pamplet, perwajahan karya tulis yang diterbitkan, dan semua hasil karya tulis lain,
(b) ceramah, kuliah, pidato dan ciptaan lain yang sejenis dengan itu,
(c) alat peraga yang dibuat untuk kepentingan pendidikan dan ilmu pengetahuan,
(d) lagu atau musik dengan atau tanpa teks,
(e) drama atau drama musikal, tari, koreografl, pewayangan, dan pantomim,
(f) seni rupa dalam segala bentuk seperti seni lukis, gambar, seni ukir, seni kaligrafi, seni pahat, seni patung, kolase dan seni terapan
(g) arsitektur,
(h) peta,
(i) seni batik,
(j) fotografi,
(k) sinematografi, dan
(1) terjemahan, tafsir, saduran, bunga rampai, database, dan karya lain dari hasil pengalihwujudan.

Sebaliknya, pada isi Pasal 13 menentukan pula dianggap tidak ada suatu hak cipta atas :
 (a) hasil rapat terbuka lembaga-lembaga negara,
 (b) peraturan perundang-undangan,
 (c) pidato kenegaraaan dan Pidato pejabat Pemerintah,
 (d) putusan pengadilan atau penetapan hakim, atau
 (e) keputusan badan arbitrase atau keputusan badan-badan sejenis lainnya.

Setiap ciptaan seseorang, kelompok orang ataupun korporasi (badan hukum) dilindungi oleh undang-undang karena pada ciptaan itu otomatis melekat hak cipta yang seyogianya harus dapat dihormati dan dipatuhi oleh orang lain. Perlindungan hukum itu dimaksudkan agar hak pencipta secara ekonomis dapat dinikmati dengan tenang dan aman mengingat cukup lamanya diatur undang-undang waktu perlindungan tersebut. Masa berlaku perlindungan hak cipta secara umum adalah selain hidup pencipta dan terus berlangsung hingga 50 tahun setelah penciptanya meninggal dunia yang dimulai sejak 1 Januari untuk tahun berikutnya setelah ciptaan tersebut diumumkan, diketahui oleh umum, diterbitkan, atau setelah penciptanya meninggal dunia (vide Pasal 34).
Setiap pencipta atau pemegang izin hak cipta bebas untuk dapat menggunakan hak ciptanya, akan tetapi undang-undang menentukan pula adanya pembatasan terhadap penggunaan hak cipta itu. Pembatasan tersebut dimaksudkan supaya para pencipta dalam kegiatan kreatif dan inovatifnya tidak melanggar norma-nonna atau asas kepatutan yang berlaku dalam kehidupan bermasyarakat dan bernegara, terutama di negara hukum seperti Indonesia mengingat hasil ciptaan umumnya akan dijual ke pasar (dalam dan luar negeri) untuk memperoleh keuntungan ekonomis bagi para pencipta atau pemegang izin guna dapat dinikmati oleh masyarakat luas. Oleh karena sudah ditentukan pembatasan oleh ketentuan undang-undang, maka kebebasan penggunaan hak cipta tidak boleh melanggar pembatasan tersebut. Apabila pembatasan tersebut dilanggar oleh pencipta dan pemegang izin hak cipta, maka pencipta akan memperoleh sanksi hukum.
Adapun pembatasan penggunaan hak cipta yang tidak boleh dilanggar oleh siapa pun dapat dibagi dalam tiga hal:
Pertama, kesusilaan dan ketertiban umum. Keterbatasan penggunaan hak cipta tidak boleh melanggar pada kesusilaan dan ketertiban umun. Contoh hak cipta yang melanggar kesusilaan adalah penggunaan hak untuk mengumumkan atau memper-banyak kalender bergambar wanita/pria telanjang, kebebasan seks atau pomografi, sedangkan termasuk melanggar ketertiban umum adalah memperbanyak dan menyebarkan buku yang berisi ajaran yang membolehkan wanita bersuami lebih dari satu (poliandri).
Kedua, fungsi sosial hak cipta. Kebebasan penggunaan hak cipta tidak boleh meniadakan/mengurangi fungsi sosial dari pada hak cipta. Fungsi sosial hak cipta adalah memberi kesempatan kepada masyarakat luas untuk memanfaatkan ciptaan itu guna kepentingan pendidikan dan ilmu pengetahuan, bahan pemecahan masalah, pembela-an perkara di pengadilan, bahan ceramah dengan menyebutkan sumbernya secara lengkap.
Ketiga, pemberian lisensi wajib. Kebebasan penggunaan hak cipta tidak boleh meniadakan kewenangan dari negara untuk mewajibkan pencipta/pemegang hak cipta memberikan lisensi (compulsory licensing) kepada pihak lain untuk menerjemahkan atau memperbanyak hasil ciptaannya dengan imbalan yang wajar. Pemberian lisensi wajib didasarkan pada pertimbangan tertentu, yakni bila negara meman-dang perlu atau menilai suatu ciptaan sangat penting artinya bagi kehidupan masyarakat dan negara, misalnya untuk tujuan pendidikan, pengajaran, ilmu pengetahuan, penelitian, pertahanan, keamanan, dan ketertiban masyarakat yang membutuhkan pemakaian ciptaan tersebut.
Pembatasan penggunaan hak cipta adalah sebagai upaya keseimbangan hak antara pencipta dengan kepentingan masyarakat. Artinya, penggunaan hak cipta oleh pencipta diharapkan akan mewujudkan pula keadilan dalam kehidupan bermasyarakat. Bentuk-bentuk Pelanggaran Hak Cipta Umumnya pelanggaran hak cipta didorong untuk mencari keuntungan finansial secara cepat dengan mengabaikan kepentingan para pencipta dan pemegang izin hak cipta. Perbuatan para pelaku jelas melanggar fatsoen hukum yang menentukan agar setiap orang dapat mematuhi, menghormati dan menghargai hak-hak orang lain dalam hubungan keperdataan termasuk penemuan baru sebagai ciptaan orang lain yang diakui sebagai hak milik oleh ketentuan hukum.
Faktor-faktor yang mempengaruhi warga masyarakat untuk melanggar HKI menurut Parlugutan Lubis antara lain adalah sebagai berikut:
1) pelanggaran HKI dilakukan untuk mengambil jalan pintas guna mendapatkan keun-tungan yang sebesar-besarnya dari pelanggaran tersebut;
2) para pelanggar menganggap bahwa sanksi hukum yang dijatuhkan oleh pengadilan selama ini terlalu ringan bahkan tidak ada tindakan preventif maupun represif yang dilakukan oleh para penegak hukum;
3) ada sebagian warga masyarakat sebagai pencipta yang bangga apabila hasil karyanya ditiru oleh orang lain, namun hal ini sudah mulai hilang berkat adanya peningkatan kesadaran hukum terhadap HKI;
4) dengan melakukan pelanggaran, pajak atas produk hasil pelanggaran tersebut tidak perlu dibayar kepada pemerintah; dan
5) masyarakat tidak memperhatikan apakah barang yang dibeli tersebut asli atau palsu (aspal), yang penting bagi mereka harganya murah dan terjangkau dengan kemampuan ekonomi.

Dampak dari kegiatan tindak pidana hak cipta tersebut telah sedemikian besarnya merugikan terhadap tatanan kehidupan bangsa di bidang ekonomi, hukum dan sosial budaya. Di bidang sosial budaya, misalnya dampak semakin maraknya pelanggaran hak cipta akan menimbulkan sikap dan pandangan bahwa pembajakan sudah merupakan hal yang biasa dalam kehidupan masyarakat dan tidak lagi merupakan tindakan melanggar undang-undang (wet delicten). Pelanggaran hak cipta selama ini lebih banyak terjadi pada negara-negara berkembang (developing countries) karena ia dapat memberikan keuntungan ekonomi yang tidak kecil artinya bagi para pelanggar (pembajak) dengan memanfaatkan kelemahan sistem pengawasan dan pemantauan tindak pidana hak cipta.
Harus diakui, upaya pencegahan dan penindakan terhadap pelanggaran hak cipta selama ini belum mampu membuat jera para pembajak untuk tidak mengulangi perbuatannya, karena upaya penanggulangannya tidak optimal.
Bentuk-bentuk pelanggaran hak cipta antara lain berupa pengambilan, pengutipan, perekaman, pertanyaan dan pengumuman sebagian atau seluruh ciptaan orang lain dengan cara apa pun tanpa izin pencipta/pemegang hak cipta, bertentangan dengan undang-undang atau. melanggar perjanjian.
Dilarang undang-undang artinya undang-undang hak cipta tidak memperkenan-kan perbuatan itu dilakukan oleh orang yang tidak berhak, karena tiga hal, yakni:
(1) merugikan pencipta/pemegang hak cipta, misalnya mem-foto kopi sebagian atau selurulnya ciptaan orang lain kemudian dijual/belikan kepada masyarakat luas;
(2)  merugikan kepentingan negara, misalnya mengumumkan ciptaan yang bertentangan dengan kebijakan pemerintah di bidang pertahanan dan keamanan atau;
(3) bertentangan dengan ketertiban umum dan kesusilaan, misalnya memperbanyak dan menjual video compact disc (vcd) pomo.
Melanggar perjanjian artinya memenuhi kewajiban tidak sesuai dengan isi kesepakatan yang telah disetujui oleh kedua belah pihak, misalnya dalam perjanjian penerbitan karya cipta disetujui untuk dicetak sebanyak 2.000 eksemplar, tetapi yang dicetak/diedarkan di pasar adalah 4.000 eksemplar. Pembayaran royalti kepada pencipta didasarkan pada perjanjian penerbitan, yaitu 2.000 eksemplar bukan 4.000 eksemplar. Ini sangat merugikan bagi pencipta.
Pelanggaran hak cipta menurut ketentuan Ikatan Penerbit Indonesia (Ikapi) pada tanggal 15 Pebruari 1984 dapat dibedakan dua jenis, yakni :
(1) mengutip sebagian ciptaan orang lain dan dimasukkan ke dalam ciptaan sendiri seolah-olah ciptaan sendiri atau mengakui ciptaan orang lain seolah-olah ciptaan sendiri. Perbuatan ini disebut plagiat atau penjiplakan (plagiarism) yang dapat terjadi antara lain pada karya cipta berupa buku, lagu dan notasi lagu, dan
(2) mengambil ciptaan orang lain untuk diperbanyak dan diumumkan sebagaimana yang aslinya tanpa mengubah bentuk isi, pencipta dan penerbit/perekam. Perbuatan ini disebut dengan piracy (pembajakan) yang banyak dilakukan pada ciptaan berupa buku, rekaman audio/video seperti kaset lagu dan gambar (vcd), karena menyangkut dengan masalah a commercial scale.

Pembajakan terhadap karya orang lain seperti buku dan rekaman adalah salah satu bentuk dari tindak pidana hak cipta yang dilarang dalam undang-undang hak cipta. Pekerjaannya liar, tersembunyi dan tidak diketahui orang banyak apalagi oleh petugas penegak hukum dan pajak. Pekerjaan tersembunyi ini dilakukan untuk menghindarkan diri dari penangkapan pihak kepolisian. Para pembajak tidak akan mungkin menunaikan kewajiban hukum untuk membayar pajak kepada negara sebagaimana layaknya warga negara yang baik. Pembajakan merupakan salah satu dampak negatif dari kemajuan iptek di bidang grafika dan elektronika yang dimanfaatkan secara melawan hukum (illegal) oleh mereka yang ingin mencari keuntungan dengan jalan cepat dan mudah.
Pasal 72 UU No. 19 Tahun 2002 menentukan pula bentuk perbuatan pelanggaran hak cipta sebagai delik undang-undang (wet delict) yang dibagi tiga kelompok, yakni :
(1) Dengan sengaja dan tanpa hak mengumumkan, memperbanyak suatu ciptaan atau memberi izin untuk itu. Termasuk perbuatan pelanggaran ini antara lain melanggar larangan untuk mengumumkan, memperbanyak atau memberi izin untuk itu setiap ciptaan yang bertentangan dengan kebijak-sanaan pemerintah di bidang pertahanan dan keamanan negara, kesusilaan dan ketertiban umum;
(2) Dengan sengaja memamerkan, mengedarkan atau menjual kepada umum suatu ciptaan atau barang-barang hasil pelanggaran hak cipta. Termasuk perbuatan pelanggaran ini antara lain penjualan buku dan vcd bajakan;
(3) Dengan sengaja dan tanpa hak memperbanyak penggunaan untuk kepentingan komersial suatu program komputer.
Dari ketentuan Pasal 72 tersebut, ada dua golongan pelaku pelanggaran hak cipta yang dapat diancam dengan sanksi pidana. Pertama, pelaku utama adalah perseorangan maupun badan hukum yang dengan sengaja melanggar hak cipta atau melanggar larangan undang-undang. Termasuk pelaku utama ini adalah penerbit, pembajak, penjiplak dan pencetak. Kedua, pelaku pembantu adalah pihak-pihak yang menyiarkan, memamerkan atau menjual kepada umum setiap ciptaan yang diketahuinya melanggar hak cipta atau melanggar larangan undang-undang hak cipta. Termasuk pelaku pembantu ini adalah penyiar, penyelenggara pameran, penjual dan pengedar yang menyewakan setiap ciptaan hasil kejahatan/pelanggaran hak cipta atau larangan yang diatur oleh undang-undang.
           
            Kedua golongan pelaku pelanggaran hak cipta di atas, dapat diancam dengan sanksi pidana oleh ketentuan UU No. 19 tahun 2002. Pelanggaran dilakukan dengan sengaja untuk niat meraih keuntungan sebesar-besanya, baik secara pribadi, kelompok maupun badan usaha yang sangat merugikan bagi kepentingan para pencipta. Pengaturan Perlindungan Hukum Hak Cipta
Barang-barang yang diproduksi palsu dan dijual ke pasar, selain merugikan bagi penerimaan royalti para pencipta juga mengurangi pendapatan pajak negara dan penurunan kualitas barang yang dapat dinikmati oleh masyarakat konsumen. Kerugian ini jelas harus ditanggulangi dengan melakukan penegakan hukum atas pelanggaran hak cipta tersebut sehingga dapat tercipta perlindungan yang diharapkan oleh semua pihak, terutama para pencipta/pemegang izin.
            Daya kreatif dan inovatif para pencipta akan mengalami penurunan, jika pelanggaran hak cipta terus berlangsung tanpa ada penegakan hukum yang memadai dengan menindak para pelakunya. Negara melalui aparat penegak hukum, baik secara langsung maupun tidak langsung harus bertanggung jawab dengan adanya peristiwa ini dengan berupaya keras melakukan penang-gulangan merebaknya pelanggaran hak cipta. Apabila tidak ada penegakan hukum yang konsisten terhadap para pelanggar, maka akan sulit terwujudnya suatu perlindungan hukum terhadap hak cipta yang baik. Masalah ini telah menjadi tuntutan masyarakat internasional terhadap bangsa dan negara Indonesia yang dinilai masih rendah untuk menghargai HAKI.
            Pengaturan standar minimum perlindungan hukum atas ciptaan-ciptaan, hak-hak pencipta dan jangka waktu perlindungan dalam Konvensi Bern adalah sebagai berikut.
            Pertama, ciptaan yang dilindungi adalah semua ciptaan di bidang sastra, ilmu pengetahuan dan seni dalam bentuk apa pun perwujudannya.
            Kedua, kecuali jika ditentukan dengan cara reservasi, pembatasan atau pengecualian yang tergolong sebagai hak-hak ekslusif seperti
(a) hak untuk menerjemahkan,
(b) hak mempertun-jukkan di muka umum ciptaan drama musik dan ciptaan musik,
(c) hak mendeklamasikan di muka umum suatu ciptaan sastra,
(d) hak penyiaran,
(e) hak membuat reproduksi dengan cara dan bentuk perwujudan apa pun,
(f) hak menggunakan ciptaannya sebagai bahan untuk ciptaan, dan
(g)hak membuat aransemen dan adapsi dari suatu ciptaan.
            Selain hak-hak ekslusif di atas, Konvensi Bern juga mengatur sekumpulan hak yang dinamakan dengan hak-hak moral (moral rights). Hak moral adalah hak pencipta untuk mengklaim sebagai pencipta atas suatu hasil ciptaan dan hak pencipta untuk mengajukan keberatan-keberatan terhadap setiap perbuatan yang bermaksud untuk mengubah, mengurangi atau menambah keaslian ciptaan, yang akan dapat meragukan kehormatan dan reputasi pencipta pertama.
            Hak moral seorang pencipta menurut pendapat A. Komen dan D.WS Verkade mengandung empat makna. Pertama, hak untuk melakukan atau tidak melakukan pengumuman ciptaannya. Kedua, hak untuk melakukan perubahan-perubahan yang dianggap perlu atas ciptaannya, dan hak untuk menarik dari peredaran ciptaan yang telah diumumkan kepada publik.
Ketiga, hak untuk tidak menyetujui dilakukannya perubahan-perubahan atas ciptaannya oleh pihak lain. Keempat, hak untuk mencantum-kan nama pencipta, hak untuk tidak menyetujui setiap perubahan atas nama pencipta yang akan dicantumkan, dan hak untuk mengumumkan sebagai pihak pencipta setiap waktu yang diinginkan. Hak ini mempunyai kedudukan sejajar dengan hak ekonomi yang dapat dimiliki seorang pencipta atas suatu hasil ciptaannya.
            Perlindungan hukum merupakan upaya yang diatur dalam undang-undang untuk mencegah terjadinya pelanggaran hak cipta oleh orang-orang yang tidak berhak. Apabila terjadi pelanggaran, maka pelang-garan itu harus diproses secara hukum, dan bilamana terbukti melakukan pelanggaran akan dijatuhi hukuman sesuai dengan ketentuan undang-undang hak cipta. UU No. 19 Tahun 2002 mengatur jenis-jenis perbuatan pelanggaran dan ancaman hukumannya, baik secara perdata maupun pidana. UU ini memuat sistem deklaratif (first to use system), yaitu perlindungan hukum hanya diberikan kepada pemegang/pemakai pertama atas hak cipta. Apabila ada pihak lain yang mengaku sebagai pihak yang berhak atas hak cipta, maka pemegang/pemakai pertama harus membuktikan bahwa dia sebagai pemegang pemakai pertama yang berhak atas hasil ciptaan tersebut. Sistem deklaratif ini tidak mengharus-kan pendaftaran hak cipta, namun pendaftaran pada pihak yang berwenang (cq Ditjen Hak Kekayaan Intelektual Depkeh RI) merupakan bentuk perlindungan yang dapat memberikan kepastian hukum atas suatu hak cipta.
            Apakah suatu perbuatan merupakan pelanggaran hak cipta, harus dapat dipenuhi unsur-unsur yang penting berikut ini. Pertama, larangan undang-un
          Politics - USA        
xraytango wrote:
That's what is called true liberalism, however the leftist version of liberalism actually means to liberally apply government. Make government bigger, increase taxation to liberally pay for services and use taxation to redistribute wealth.

It is not the liberalism you think.

Liberalism for personal freedom and liberty with small government is actually called conservatism, and in the extreme libertarianism.

Usually liberalism in government refers to fiscal and regulatory being liberally applied in order to reach a government's objective.


That is actually included in the Wiki link...

You are referring to Classical Liberalism and Progressive Liberalism. Yeah, I've taken Political Science 101 too, brah.


And really... rereading what you wrote, it's just so laughably wrong.... the "leftist" idea of liberalism does not in any way mean to "liberally apply"... we're not talking about putting ketchup on fries here.


the left leaning people in the US follow the progressive liberal views, in that they see that while the Ideal is that all are equal, the reality is that we aren't. They mean to make progress through government programs that promote more equality within the populace, because they see the historical evidence that shows that conservatism is completely cool with keeping the downtrodden, downtrodden.... Progressives see that continuing to simply be lazy, and allow the "free market, private sector" to uphold and act on its whims, is detrimental to everyone.
          Valuing Experiences More than Stuff - and other thoughts on Reuse Conex, vintage record players, and traveling 'round the world        
Last month I had the opportunity to participate in the Reuse Expo at Reuse Conex, a three-day conference on reuse and sustainability put on by national group Reuse Alliance.  My friend Joanna Dyer (co-founder of SCRAP) invited me to vend at the Expo.

At one point during the day I noticed there was a rack of reusable shopping bags for sale (did you know that in my city of Portland, Oregon, single-use plastic bags have been BANNED from grocery stores?) and they were printed with a very interesting legend.  They said "I value experiences more than stuff" or something like that - wish I'd thought to snap a picture because I found it so intriguing. I could not agree more with that sentiment and I think it sums up the goal of the whole reuse movement.  If you haven't seen it before - go watch The Story of Stuff right now.  (It's only 20 minutes.  Seriously, go watch it.  I'll wait.)

It was a fun and inspiring day.  I was between Oregon Breakers (they fix and rebuild circuit breakers to keep them working and out of the landfill), and Long Way Home (they reuse plastic bottles and tires to build schools in Guatemala).

I also gave a little presentation on "10 Ways to Repurpose Vinyl Records."  Dont' worry - I will be sharing those tips in an upcoming blog post!

Here are some pictures of my table:

It dawned on me that I can and should use old record players in my display!  The one you see in the above photo is my old "Linoleum Hogass" record player. 

Long story but once upon a time at St. Vinny's in Great Falls, Montana, there was a roll of beautiful psychedelic vinyl, and we called it Linoleum.  One day Chuck said he would build a wall from this linoleum to make a room divider in our studio apartment, and I called him a linoleum hogass.  The wall was not built.  The linoleum came back to Portland.  I liked the pattern a lot and named my business Linoleum Hogass Records when I started selling mandalas at Portland Saturday Market in 1998.  I painted the pattern on the record player and used to have it on display at the market with a painted record spinning on it (every booth came with electricity) until something happened, it fried the circuit for all the booths surrounding me, and the lady who made knitted hats yelled at me.  The site manager for the market even attempted to fix the record player for me (maybe he felt bad for that one time he had my car towed after we left it too long in the loading zone) but the fix didn't last (and I do value that experience).  I think the cord is broken.

SIDE NOTE.  Interestingly enough, I have discovered the word hogass in the urban dictionary. And here I thought Melodie made that up in our 11th grade economics class to describe the horde of students descending upon the box full of magazines from which we were to cut images for a collage on the joys of consumption in a free market system.  What a bunch of hogasses.  (Or, hogii.)

Anyway, the record player doesn't work anymore but I can still use it in my booth!  I might never have thought of this, but recently an old friend of mine from high school (not one of the above-mentioned high school hogii) gave me another cute vintage kids' record player - which you can see here:

This particular old friend was in the process of getting rid of all of his belongings in order to embark on a journey around the world with his wife and daughter!  Now THERE is a family who values experiences more than stuff!!  I am honored to be gifted with his childhood toy record player.  I remember many an afternoon hanging out with friends at his house in downtown Oregon City...wishing them all the best on their big adventure!

(They have a blog and you keep up with their journey at www.travel-junkies.comThere was a great article about them in the Oregonian this week too.)

What you see above is some cool new packaging I've come up with for my Vintage Record Clocks.  YES!  Finally, a solution for the boxes and boxes of album jackets (they can't ALL be made into coasters), the lack of wall space for displaying the clocks, and the difficulty of storing them in between sales.  I am making the boxes out of 12" album jackets which make a perfect package for a 10" record clock. 

Obviously the jacket used is not for the same record as the clock that's inside (that would not be possible) but I did have fun matching them up loosely based on a general theme.  (You can now buy these at Tender Loving Empire and SCRAP's Re: Boutique.)


Ad don't forget, PORTLAND RECORDS!  Because Portland rocks!  And PORTLAND is still the secret code you need to save 20% off everything in the Eye Pop Art shop during the month of November.  Not that you need any more STUFF...but there is a big gift-giving holiday coming up, and if you're going to buy stuff, may I suggest you buy stuff that is handmade by an artist from reused, recycled, and repurposed materials?  That way, you can value the experience and the stuff...at least, a little bit more than when you buy something from the mall. 
          Politics - USA        
 Hulksmash wrote:
 feeder wrote:
 Hulksmash wrote:
I'm putting my vote behind Gary Johnson. We desperately need a moderate party and this is a chance to take a step in that direction.



Libertarianism is not moderate. Libertariamism is Capital A anarchy for old people and rednecks. Libertarianism is flying bat gak crazy.


It's the name of the party not the actual political agenda of the party. Be serious for a second and take a step away from the hyperbole. The candidates for the part are both term limit leaders of states. They were republicans but the republican party is insane and wants to invade our lives as much as the democrats do just for different (and in some ways to me, worse) stuff. It really is where most of the moderates should be able to find their ground. If you can't tell the difference between actual ideology and the definition of a term I don't know what to tell you.


The Libertarian Party of America wants to do away with taxation and allow unfettered "free market" capitalism. It's a strange mix of wild west and industrial revolution ideals. It's basically a masturbatory cowboy fantasy for frustrated white guys. It's not a coherent policy.
          THE END OF THE FUTURE: Peter Thiel Essay On the Failure of Innovation        


I.


Modern Western civilization stands on the twin plinths of science and technology. Taken together, these two interrelated domains reassure us that the 19th-century story of never-ending progress remains intact. Without them, the arguments that we are undergoing cultural decay — ranging from the collapse of art and literature after 1945 to the soft totalitarianism of political correctness in media and academia to the sordid worlds of reality television and popular entertainment — would gather far more force. Liberals often assert that science and technology remain essentially healthy; conservatives sometimes counter that these are false utopias; but the two sides of the culture wars silently agree that the accelerating development and application of the natural sciences continues apace.

Yet during the Great Recession, which began in 2008 and has no end in sight, these great expectations have been supplemented by a desperate necessity. We need high-paying jobs to avoid thinking about how to compete with China and India for low-paying jobs. We need rapid growth to meet the wishful expectations of our retirement plans and our runaway welfare states. We need science and technology to dig us out of our deep economic and financial hole, even though most of us cannot separate science from superstition or technology from magic. In our hearts and minds, we know that desperate optimism will not save us. Progress is neither automatic nor mechanistic; it is rare. Indeed, the unique history of the West proves the exception to the rule that most human beings through the millennia have existed in a naturally brutal, unchanging, and impoverished state. But there is no law that the exceptional rise of the West must continue. So we could do worse than to inquire into the widely held opinion that America is on the wrong track (and has been for some time), to wonder whether Progress is not doing as well as advertised, and perhaps to take exceptional measures to arrest and reverse any decline.

The state of true science is the key to knowing whether something is truly rotten in the United States. But any such assessment encounters an immediate and almost insuperable challenge. Who can speak about the true health of the ever-expanding universe of human knowledge, given how complex, esoteric, and specialized the many scientific and technological fields have become? When any given field takes half a lifetime of study to master, who can compare and contrast and properly weight the rate of progress in nanotechnology and cryptography and superstring theory and 610 other disciplines? Indeed, how do we even know whether the so-called scientists are not just lawmakers and politicians in disguise, as some conservatives suspect in fields as disparate as climate change, evolutionary biology, and embryonic-stem-cell research, and as I have come to suspect in almost all fields? For now, let us acknowledge this measurement problem — I will return to it later — but not let it stop our inquiry into modernity before it has even begun.



II.

When tracked against the admittedly lofty hopes of the 1950s and 1960s, technological progress has fallen short in many domains. Consider the most literal instance of non-acceleration: We are no longer moving faster. The centuries-long acceleration of travel speeds — from ever-faster sailing ships in the 16th through 18th centuries, to the advent of ever-faster railroads in the 19th century, and ever-faster cars and airplanes in the 20th century — reversed with the decommissioning of the Concorde in 2003, to say nothing of the nightmarish delays caused by strikingly low-tech post-9/11 airport-security systems. Today’s advocates of space jets, lunar vacations, and the manned exploration of the solar system appear to hail from another planet. A faded 1964 Popular Science cover story — “Who’ll Fly You at 2,000 m.p.h.?” — barely recalls the dreams of a bygone age.

The official explanation for the slowdown in travel centers on the high cost of fuel, which points to the much larger failure in energy innovation. Real oil prices today exceed those of the Carter catastrophe of 1979–80. Nixon’s 1974 call for full energy independence by 1980 has given way to Obama’s 2011 call for one-third oil independence by 2020. Even before Fukushima, the nuclear industry and its 1954 promise of “electrical energy too cheap to meter” had long since been defeated by environmentalism and nuclear-proliferation concerns. One cannot in good conscience encourage an undergraduate in 2011 to study nuclear engineering as a career. “Clean tech” has become a euphemism for “energy too expensive to afford,” and in Silicon Valley it has also become an increasingly toxic term for near-certain ways to lose money. Without dramatic breakthroughs, the alternative to more-expensive oil may turn out to be not cleaner and much-more-expensive wind, algae, or solar, but rather less-expensive and dirtier coal.

Warren Buffett massively capitalized on both of these trends with his $44 billion investment, most made in late 2009, in BNSF Railway — making it the largest non-financial company in the Berkshire Hathaway portfolio. Understandably, the Oracle of Omaha proclaimed “an all-in wager on the economic future of the United States” and downplayed any doubts he might have harbored. For present purposes, it suffices to note that 40 percent of railroad freight involves the transport of coal, and that railroads will do especially well if the travel and energy consumption patterns of the 21st century involve a regression to the past.

In the past decade, the unresolved energy challenges of the 1970s have broadened into a more general commodity shock, which has been greater in magnitude than the price spikes of the two world wars and has undone the price improvements of the previous century. In the case of agriculture, at least, technological famine may lead to real old-fashioned famine. The fading of the true Green Revolution — which increased grain yields by 126 percent from 1950 to 1980, but has improved them by only 47 percent in the years since, barely keeping pace with global population growth — has encouraged another, more highly publicized “green revolution” of a more political and less certain character. We may embellish the 2011 Arab Spring as the hopeful by-product of the information age, but we should not downplay the primary role of runaway food prices and of the many desperate people who became more hungry than scared.

Warren Buffett massively capitalized on both of these trends with his $44 billion investment, most made in late 2009, in BNSF Railway — making it the largest non-financial company in the Berkshire Hathaway portfolio. Understandably, the Oracle of Omaha proclaimed “an all-in wager on the economic future of the United States” and downplayed any doubts he might have harbored. For present purposes, it suffices to note that 40 percent of railroad freight involves the transport of coal, and that railroads will do especially well if the travel and energy consumption patterns of the 21st century involve a regression to the past.

In the past decade, the unresolved energy challenges of the 1970s have broadened into a more general commodity shock, which has been greater in magnitude than the price spikes of the two world wars and has undone the price improvements of the previous century. In the case of agriculture, at least, technological famine may lead to real old-fashioned famine. The fading of the true Green Revolution — which increased grain yields by 126 percent from 1950 to 1980, but has improved them by only 47 percent in the years since, barely keeping pace with global population growth — has encouraged another, more highly publicized “green revolution” of a more political and less certain character. We may embellish the 2011 Arab Spring as the hopeful by-product of the information age, but we should not downplay the primary role of runaway food prices and of the many desperate people who became more hungry than scared.


IV.
Let us now try to tackle this very thorny measurement problem from a very different angle. If meaningful scientific and technological progress occurs, then we reasonably would expect greater economic prosperity (though this may be offset by other factors). And also in reverse: If economic gains, as measured by certain key indicators, have been limited or nonexistent, then perhaps so has scientific and technological progress. Therefore, to the extent that economic growth is easier to quantify than scientific or technological progress, economic numbers will contain indirect but important clues to our larger investigation.

The single most important economic development in recent times has been the broad stagnation of real wages and incomes since 1973, the year when oil prices quadrupled. To a first approximation, the progress in computers and the failure in energy appear to have roughly canceled each other out. Like Alice in the Red Queen’s race, we (and our computers) have been forced to run faster and faster to stay in the same place.
Taken at face value, the economic numbers suggest that the notion of breathtaking and across-the-board progress is far from the mark. If one believes the economic data, then one must reject the optimism of the scientific establishment. Indeed, if one shares the widely held view that the U.S. government may have understated the true rate of inflation — perhaps by ignoring the runaway inflation in government itself, notably in education and health care (where much higher spending has yielded no improvement in the former and only modest improvement in the latter) — then one may be inclined to take gold prices seriously and conclude that real incomes have fared even worse than the official data indicate.

This dismal and straightforward conclusion tends to be obscured by a range of secondary issues, which are important but do not really change the larger point about trends since 1973:


Mean incomes outperformed median incomes (inflation-adjusted in both cases), and there was a trend towards greater inequality. Median incomes rose by only 10 percent. Mean incomes rose by 29 percent, which works out to a glacial pace of only about 0.7 percent per year — much slower than in the preceding four decades.
Non-wage benefits, mostly health care, increased by about $2,600 per worker, for an additional 0.2 percent per year since 1973. So if the U.S. government has underestimated inflation by only 0.9 percentage points per year, then mean wages and benefits have been completely stagnant.
Corporate profits increased from 9 percent to 12 percent of GDP — again, a significant but easily exaggerated shift.
Women were hired in the 1980s and men were fired in the 2000s.
College graduates did better, and high-school graduates did worse. But both became worse off in the years after 2000, especially when one includes the rapidly escalating costs of college.
The era of globalization improved living standards by making labor and goods cheaper, but also hurt living standards through increased competition for limited resources. Free-trade advocates tend to think that the first effect dominates the second.
Economic progress may lag behind scientific and technological achievement, but 38 years seems like an awfully long time.

The economic future looked very different in the 1960s. In his 1967 bestseller The American Challenge, Jean-Jacques Servan-Schreiber argued that accelerating technological progress would widen the gap between the United States and the rest of the world, and that by 2000, “the post-industrial societies will be, in this order: the United States, Japan, Canada, Sweden. That is all.” According to Servan-Schreiber, the difference between the United States and the rest of Europe would grow from a difference of degree into a difference of kind, comparable to the difference between Europe and Egypt or Nigeria. As a result of this steady divergence, Americans would face less pressure to compete:

In 30 years America will be a post-industrial society. . . . There will be only four work days a week of seven hours per day. The year will be comprised of 39 work weeks and 13 weeks of vacation. With weekends and holidays this makes 147 work days a year and 218 free days a year. All this within a single generation.
We need to resist the temptation to dismiss Servan-Schreiber’s space-age optimism so that we can better understand how the consensus he represented could have been so terribly wrong — and how, instead, for many Americans, the Fourth Commandment (“Remember the Sabbath day, and keep it holy”) has been effectively forgotten.
V.
Like technology, credit also makes claims on the future. “I will gladly pay you a dollar on Tuesday for a hamburger today” works only if a dollar gets earned by Tuesday. A credit crisis happens when earnings disappoint and the present does not live up to past expectations of the future.

The current crisis of housing and financial leverage contains many hidden links to broader questions concerning long-term progress in science and technology. On one hand, the lack of easy progress makes leverage more dangerous, because when something goes wrong, macroeconomic growth cannot offer a salve; time will not cure liquidity or solvency problems in a world where little grows or improves with time. On the other hand, the lack of easy progress also makes leverage far more tempting, as unleveraged real returns fall below the expectations of pension funds and other investors

This analysis suggests an explanation for the strange way the technology bubble of the 1990s gave rise to the real-estate bubble of the 2000s. After betting heavily on technology growth that did not materialize, investors tried to achieve the needed double-digit returns through massive leverage in seemingly safe real-estate investments. This did not work either, because a major reason for the bubble in real estate turned out to be the same as the reason for the bubble in technology: a mistaken but nearly universal background assumption about easy progress. Without fundamental gains in productivity (presumably driven by technology), real-estate values could not go up forever. Leverage is not a substitute for scientific progress.



VI.
The technology slowdown threatens not just our financial markets, but the entire modern political order, which is predicated on easy and relentless growth. The give-and-take of Western democracies depends on the idea that we can craft political solutions that enable most people to win most of the time. But in a world without growth, we can expect a loser for every winner. Many will suspect that the winners are involved in some sort of racket, so we can expect an increasingly nasty edge to our politics. We may be witnessing the beginnings of such a zero-sum system in politics in the U.S. and Western Europe, as the risks shift from winning less to losing more, and as our leaders desperately cast about for macroeconomic solutions to problems that have not been primarily about economics for a long time.

The most common name for a misplaced emphasis on macroeconomic policy is “Keynesianism.” Despite his brilliance, John Maynard Keynes was always a bit of a fraud, and there is always a bit of clever trickery in massive fiscal stimulus and the related printing of paper money. But we must acknowledge that this fraud strangely seemed to work for many decades. (The great scientific and technological tailwind of the 20th century powered many economically delusional ideas.) Even during the Great Depression of the 1930s, innovation expanded new and emerging fields as divergent as radio, movies, aeronautics, household appliances, polymer chemistry, and secondary oil recovery. In spite of their many mistakes, the New Dealers pushed technological innovation very hard.

The New Deal deficits, however misguided, were easily repaid by the growth of subsequent decades. During the Great Recession of the 2010s, by contrast, our policy leaders narrowly debate fiscal and monetary questions with much greater erudition, but have adopted a cargo-cult mentality with respect to the question of future innovation. As the years pass and the cargo fails to arrive, we eventually may doubt whether it will ever return. The age of monetary bubbles naturally ends in real austerity.

On the political right, we are seeing a quiet shift from the optimism of Jack Kemp to the pessimism of Ron Paul, from supply-side economics to theTea Party, and from the idea that we can combine tax cuts with more spending to the idea that money is either hard or fake. A mischievous person might even ask whether “supply-side economics” really was just a sort of code word for “Keynesianism.” For now it suffices to acknowledge that lower marginal tax rates might not happen and would not substitute for the much-needed construction of hundreds of new nuclear reactors.
VII.
We have seen that even the simple question of whether a technology slowdown has occurred is far from straightforward. The critical question of why such a slowdown seems to have occurred is harder still, and we do not have the space to tackle it fully here. Let us end with the related question of what can now be done. Most narrowly, can our government restart the stalled innovation engine?

The state can successfully push science; there is no sense denying it. The Manhattan Project and the Apollo program remind us of this possibility. Free markets may not fund as much basic research as needed. On the day after Hiroshima, the New York Times could with some reason pontificate about the superiority of centralized planning in matters scientific: “End result: An invention [the nuclear bomb] was given to the world in three years which it would have taken perhaps half a century to develop if we had to rely on“You cannot enrich a country by impoverishing its people.”
Imperative viewing:
Charlie Rose: Sir James Goldsmith Interview - 15.11.94 (YouTube)

In my opinion, it’s the progeny of those who pave the path to perdition, who should pay for the turpitude of their profligacious progenitors (NB: Provided the culprits themselves are unavailable / unreachable / untouchable — almost always a given, in the context of the real world.)

My rationale for this—on face value—Draconian view, is that those who are afflicted with pathological greed, are the economic equivalent of fundamentalist religious zealots — lunatics that would martyr their families to further an insane, ideological bent.  In other words, and to quote the U.S.‘s esteemed current wordsmith-in-chief —
“You have to take out their families.”

There is no reasoning with nihilism; and so, the prospect of future punitive action — much less, the non intimate repercussions of their actions — is no deterrent whatsoever.  In the same way that those who reach a certain threshold of wealth accumulation, automatically abrogate their societal responsibilities (...anyone found those anthrax-producing, “mobile chemical weapons” labs yet?), so too do they divest themselves of any possible comeuppance they should duly attract (*implying the airy-fairy hypothetical, that any of these vampires would ever even be revealed in time to punish; let alone, actually be subjected to punishment in this legislatively corrupted society which we suffer in).

We must create a disincentive to this species-immolating, myopic greed, which so many use to wreak havoc with impunity — protected by the mendacious cloak of “free market” and “globalism”.  We cannot continue down this path to oblivion and expect everything to “be alright in the end”... because it won’t.  Even a dumb, deaf, blind mute, who’s afflicted with Dumbf DNA, could see that the canaries are all dead and that the stench of hydrogen sulphide is becoming overbearing.

Do we want to live long and prosper, or to get rich quick and die in the process of trying?


          FDR1603 True News: The 'Economist' Defends the US Government        
The free market of legal bribery meets with the moral approval of the magazine the 'Economist'.

          How Canadian Dairy Farmers Escape The Global Milk Glut        
President Trump recently accused Canada of unfairly blocking imports of milk from the U.S. He was taking aim at a Canadian system that defiantly rejects the free market, and protects small farmers.
          FDR1608 Empiricism, Humility and the Free Market        
Why it is so tough to be humble and rational if you have never lived in the free market.

          FDR1663 Freedomain Radio Sunday Show 16 May 2010        
An Izzy update, an analysis of the BP gulf oil leak, the stock market in a free market, kids and morality, the family as a template for the state, and is beauty shallow?

          FDR1747 Freedomain Radio E-Mails of the Week, September 14, 2010        
Free markets versus tuna, human farming, and one of the most brilliant emails I've ever received - from a 15 year old no less!

          FDR1831 The Death of America' - Doug Casey - The Freedomain Radio Interview        
Douglas 'Doug' Casey is an American-born free market economist, best-selling financial author, and international investor and entrepreneur.

          FDR1852 Free Market Myths Debunked        
Four of the most common myths about the free market debunked. (audio to a video)

          FDR1924 Freedomain Radio Sunday Call in Show, 5 June 2011        
Adam vs the Man, is God the fool's way to gain self-love?, the entrepreneurship of starting a magazine, and why doesn't the free market work in immigration?

          FDR1932 True News: Bitcoin, Free Markets and Economics 101        
Why we would be better off without seat belts - everything in the free market balances out, Bitcoin versus Gold is just one example.

          FDR2086 Listener Emails Feb 2 2012        
Solving property disputes without the state, free market education, and exploitation in freedom?

          What Will Financial Reform Mean for the Poorest?        

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JUDY WOODRUFF: The fight over unemployment assistance is not the only economic story capturing Washington’s attention this week. The president will sign legislation to reform the financial sector on Wednesday. Most attention surrounding that bill has focused on Wall Street and big banks. But there’s been considerably less discussion about lending practices to poorer and working Americans.

Earlier today, Hari Sreenivasan had a conversation on that subject.

HARI SREENIVASAN: The economy has rebounded from its worst lows of the recession, but, for millions of Americans, it remains far too weak to have made a meaningful difference in their lives. And, for some, the poorest Americans, the bad news just keeps coming.

And there’s a whole industry focused on providing financial assistance to those Americans. But there are big questions about the practices of the industry.

That’s the subject of a new book. Gary Rivlin is the author of “Broke, USA: From Pawnshops to Poverty, Inc., How the Working Poor Became Big Business.” He’s a former reporter for The New York Times.

Thanks for being with us.

GARY RIVLIN, author, “Broke, USA: From Pawnshops to Poverty, Inc., How the Working Poor Became Big Business“: Thank you, Hari.

HARI SREENIVASAN: It seems like there is almost a correlation. The worse the economy gets, the better off this industry does.

GARY RIVLIN: Well, what really drew me to this topic a couple of years ago as we were heading into a recession that these would be good times for some of the industries I’m writing about, pawnbrokers, payday lenders, because people with no money in their pockets is good for these businesses.

You don’t go to the pawnbroker when you have a few hundred dollars of cash in your pocket. You go when you are broke. You go to the payday lender when you are out of cash and payday is next Friday. And so I just thought it would be really interesting to explore these industries at a time when they would be boom times for the payday lenders, pawnbrokers, et cetera.

HARI SREENIVASAN: Let’s talk a little bit about payday loans. We’re talking about an industry that’s at least, what, $7 billion? I mean, this is enormous.

GARY RIVLIN: Well, the amazing part of about the payday lenders, the business just started in 1993. By 2006, there were more payday loan shops in the U.S. than McDonald’s and Burger Kings combined.

These are loans of $300, $400, $500 at a time, but they are making $40 billion in loans a year, which turns out to be $7 billion in fees. And, you know, in theory, it makes sense. What do you do if your car breaks down and you don’t have a rich uncle, you don’t have a credit card? You need to get to work.

The problem is that the — with the fees they charge. The person who is so desperate for $300 today, that they will pay a fee that is equivalent to an interest rate of 400, 500, 600 percent or more, how are they in two weeks going to have the $300 plus the fees to pay it back on top of their other bills?

So, what you see happening are people roll these loans over in states where it is legal just to roll them over. In those states where they don’t permit that, there is kind of a human pinball. You go to store B to pay back store A.

HARI SREENIVASAN: Yes.

GARY RIVLIN: You owe A and B. You end up owing to store C.

You look at — you look at the payday lending statistics, two million or so people a year essentially owe money for the entire year. So, instead of a theoretical interest rate of 400, 500, 600 percent, there are two million people every year who are paying those kind of interest rates.

So, a $500 loan, that is $2,000 in fees over the course of the year. And, of course, these are people who could least afford it.

HARI SREENIVASAN: Yes.

Now, what are the new laws on the books with financial regulation going to do about that? Right now, we seem to have a patchwork on what type of percentage interest you can be paying on these payday loans from one place to the next.

GARY RIVLIN: Well, it’s up to the states. Every state has their own set of laws around how much you can charge for check cashing. In New York, it is under 2 percent of the face value of a check. In Georgia, it is 5 percent of the face value. In one-third of the states, there is no limit on how much you can charge someone to cash a payroll check or any other kind of check.

The same with the payday lenders — one-third of the states don’t permit payday lending. They either have a usury cap that doesn’t work for the payday lenders, so they don’t bother setting up shop there, or they just have laws not allowing them.

But it depends on the state. If you live in Missouri, you could charge $22.50 for every $100 borrowed, which works out to an annual interest rate of 650 percent.

HARI SREENIVASAN: Wow.

GARY RIVLIN: You live in a different state, it could be 400 percent. So, it’s really state by states.

But there has been talk of national laws that cap the number of payday loans you could take in a year at six. There’s been talk of a national usury cap of maybe 36 percent, which still sounds high, but…

(CROSSTALK)

HARI SREENIVASAN: Yes. Compared to 650 percent, that is not so bad.

So, some of these payday lenders are coming back and saying, listen, instead of trying to tackle us, why don’t you fix the real mess, which was the subprime mortgages that got so many people into this problem in the first place? They shouldn’t have been signing financial paperwork that they didn’t understand.

GARY RIVLIN: The difference between the subprime mortgage lending disaster and payday lenders, auto title lenders, instant tax mills — some of the fun of doing this book was exploring the many, many ways that entrepreneurs have figured out how to get wealthy off the working poor.

HARI SREENIVASAN: Yes.

GARY RIVLIN: There doesn’t tend to be a deception in the deal. You go to a payday lending store, it’s going to be posted that you are going to pay $15 for every $100, and that works out to an annual interest rate of 400 percent.

The thing is that people are so desperate for the money that they don’t care.

HARI SREENIVASAN: Yes.

GARY RIVLIN: They just want the $300 now. They will worry about how they are going to pay it back in a couple of weeks.

HARI SREENIVASAN: And there are also the rent-to-own furniture things. We see these ads on TV all the time. Some of these entrepreneurs have become very wealthy on these programs and these plans.

GARY RIVLIN: Right.

So, rent to own is another huge industry. It is about $7 billion a year. It’s dominated by two publicly traded companies. All of these industries we have been talking about, all these businesses are dominated by publicly-traded companies.

And the banks have provided huge funding that has let them grow to this size. It is really — at the same time that the banks have been pulling back from some services, they have been putting money into these various poverty — poverty industries. And thus we see that they have become multibillion-dollar industries.

HARI SREENIVASAN: And what about the people that say this is just the free market at work, that, basically, we’re actually creating — I guess, on Wall Street, you would call it liquidity. On Main Street, you would say, listen, I’m providing a service. They don’t have to come to me. They don’t have to take out this very-high-interest loan. I’m advertising it up front, whether it is a payday loan or rent-to-own furniture.

GARY RIVLIN: Well, it needs to be pointed out that they got exemptions, the payday lenders got exemptions from existing usury laws, that this was about deregulation.

So, our country has had a long tradition of putting a cap on the interest rates we charge people.

HARI SREENIVASAN: We call it loan-sharking.

(LAUGHTER)

GARY RIVLIN: And — well, actually, a loan shark works out to about 150 percent annual interest rate.

(LAUGHTER)

GARY RIVLIN: So, they don’t break kneecaps in the payday lending industry, but they do charge much, much more.

But, you know, the problem is that this is the kind of pill that feels good short-term. You need the money, and you get it. But, long-term, it’s really destructive for people’s health. And I’m not saying we should outlaw the payday lenders.

You, in fact, do need ways for people of modest means to get cash. I’m saying it needs to be much further regulated. We have taken some steps. The financial reform package that the president seems like he’s about to sign does, in fact, provide some regulation over the payday lenders, the pawnbrokers, the check cashers, the various businesses I wrote about. But it’s just a start.

HARI SREENIVASAN: All right, Gary Rivlin, thanks so much for your time.

GARY RIVLIN: Great. Thank you.

The post What Will Financial Reform Mean for the Poorest? appeared first on PBS NewsHour.


          Cancel Colbert Already, but not for racism; Dead Wrong Radio's CLFA Roundtable 03/29 by We Built That Network | Politics Conservative Podcasts        
Cancel Colbert Already, but not for racism; Dead Wrong Radio's CLFA Roundtable 03/29 by We Built That Network | Politics Conservative Podcasts



Dead Wrong Radio is...
an irreverent attempt to make deathly-serious topics more accessible to freedom-loving Americans, Dead Wrong Radio covers a full range of issues including Gun Rights, Border Security, Free Market Capitalism and common liberal myths.
Join the Conservative-Libertarian Fiction Alliance panel as we talk about:
RINOs, Moderates and Liberals
The State of Conservative Non-Fiction
The Obamacare Delay
Changing the cultural landscape through fiction
The Totalitarianism of #CancelColbert
Conservative Libertarian Fiction Alliance Roundtable Guests: 
(Cohost) Jack July 

          The Evils of Communism Part 1: Definitions        

Before we start let's clarify what we mean when we use the word "evil". From Merriam-Webster:


evil
adjective \ˈē-vəl, British often & US also ˈē-(ˌ)vil\
Definition of EVIL
1
a : morally reprehensible : sinful, wicked evil impulse

b : arising from actual or imputed bad character or conduct evil reputation

2
a archaic : inferior

b : causing discomfort or repulsion : offensive evil odor

c : disagreeable evil temper
3
a : causing harm : pernicious evil institution of slavery

b : marked by misfortune : unlucky

The acts and consequences that I will be listing (not comprehensively nor exhaustively) certainly qualify as "morally reprehensible". Atrocities done for the purpose of furthering the goals of communism are the norm and thus well documented. The idea of communism itself is morally reprehensible. Who could in good faith defend a system that devalued the individual and took away the natural incentives for progress and replaced them with coercion? What kind of economic system operates with a gun against the heads of its labor and consumers? Communism to put it bluntly.


As for the next definition, "arising from actual or imputed bad character or conduct" I would have to say it certainly applied to those villains who gave and followed the orders that led to such great suffering and death. As for those who chose the path out of ignorance and desperation I would think such a definition not apply to them. Most communist sympathizers and self-described communists are, from my experience, ignorant to the volumes upon volumes of horrors that go along with it. When confronted with the numbers they tend to brush them off easily explaining that in China and the Soviet Union proper communism or "true communism" was never really applied. Imagine brushing off millions of deaths and millions of cases of forced labor because of a simple misunderstanding. As Stalin famously said, "The death of one man is a tragedy, the death of millions is a statistic."

"Archaic" or "inferior" are words that describe communism quite well; however, for the purpose of this essay I don't intend to use this definition.

While it's obviously true that the gulags of the Soviet Union and the forced labor camps in China caused "discomfort" and "repulsion" I won't insult the memory of those that died and/or were subjected to such degradation by understating their situation so.

"Causing harm." If the definition hadn't gone on to compare this definition with the "evil institution of slavery" I would have to reject it for the reasons above. Communism caused harm to the vast majority of people it touched leaving only a small class of unelected officials mostly untouched by the suffering that it caused. People often describe communism as a classless system, but they're wrong. Communist governments are always set up in strict and unbreakable classes based upon their roles in the "society" and ruled by a small pampered ruling class. Someone has to lead! Someone has to write the laws! Any perceived privileges to the ruling class are misinformed, out-of-context and/or not excluding Capitalist Propaganda after all. Why yes, the best doctors and medicine are consumed by this class as are the best food, clothing and housing, but it is necessary! The leaders must be healthy and strong to think clearly and to plan etc. etc. etc.

The excuses go on and on if the person questioning the excesses isn't arrested on the spot in the first place. Which leads me to the final definition of "evil" which is "marked by misfortune" or "unlucky". Now, I don't ascribe to the idea of luck, but I would certainly agree with anyone describing the practice of communism as unlucky. What other form of socio-economic government has produced such a terrible track record as communism? The two major communist governments of the 20th century are now two major practitioners of capitalism. The only two countries in the world with elected Communist party officials are Nepal and Cyprus and both of these countries continue to practice a form of Capitalism in spite of their leadership I'd call that "marked by misfortune". Of the countries that still call themselves "communist" (I mentioned China before) only North Korea seems hellbent on keeping up the charade and at great detriment to the people affected by it. If only the other communist countries had embraced capitalism sooner one could imagine the great number of lives saved and the amount of suffering that might have been prevented.

Finally, let us define communism:



com·mu·nism
noun \ˈkäm-yə-ˌni-zəm, -yü-\
Definition of COMMUNISM
1
a : a theory advocating elimination of private property
b : a system in which goods are owned in common and are available to all as needed
2
capitalized
a : a doctrine based on revolutionary Marxian socialism and Marxism-Leninism that was the official ideology of the Union of Soviet Socialist Republics
b : a totalitarian system of government in which a single authoritarian party controls state-owned means of production
c : a final stage of society in Marxist theory in which the state has withered away and economic goods are distributed equitably
d : communist systems collectively

Communism as a "theory advocating elimination of private property" certainly sounds right. Under communist governments there aren't a lot of things like essential goods and bourgeois fancies like food. The destruction of the idea of private property is of course the first step in erasing the individual. If no one owns anything then there is an equality of sorts, everyone is equally poor.

The next definition stretches reality quite a bit, "a system in which goods are owned in common and are available to all as needed" is supposed to accurately describe any past form of communism we have ever seen? Put aside the first fallacy about goods being owned in common, we already know that the ruling class had the best goods available and weren't fond of sharing. However, the idea that goods were "available" does not accurately describe the conditions in communist countries where starvation was a common apparition and where rationing of food became an iconic symbol in Russia's bread lines. Surely this is undeniably the intent of of communism, but it is arguably rarely the actual result.

I'll skip the obvious ones and get to b. What more can I add to the first definition offered for a anyways?

"A totalitarian system of government in which a single authoritarian party controls state-owned means of production" seems accurate at first, until you realize that while communism breeds totalitarianism and single party rule by dictators, they don't truly control the "means of production" in the way that is traditionally thought of. People are the means of production. People produce goods and services. They build, farm, design and fix. Thinking of factories and mills as the "means" in which production happens is missing the point. While the communists seized the privately owned factories, ships and mills from the people they claimed to serve the best interests of what they were really doing was seizing ownership of the people themselves. So yes, communists controlled the "means of production", but usually the phrase is confused with machines and tools when in fact it is referring to the people who put those things to use efficiently.

A more accurate definition of communism, in my humble opinion, would be a system of government in which individual incentive is ignored and the collective well-being (the greater good) is touted as the only priority. This definition would better explain why communism always fails and always causes terrible suffering whenever it is practiced. A government simply cannot ignore the rights and desires of the individual and hope for progress. The Soviets thought that they could create progress through fear and violence, but coercion did not lead to the kinds of spectacular progress that was seen in countries that practiced Free Market Capitalism. No matter how many people they shot or starved or jailed the communists could never quite make their system of government work.

It is for that reason that I feel compelled to write these essays. It doesn't matter if anyone reads them but myself. What matters is that I write down what I know to be the truth.




          It could be worse        
A lot of people in America have had their faith in a better future shaken over the past five or so years. As the economy stumbled and fell and more Americans turned to ideas and practices long since discredited many of us have been left feeling as if we are unwilling participants in the dismantling of the greatest experiment in human enterprise ever known. As bad as it has gotten and as bad as it may still get it's important to have some perspective during these times.

This is not the Communist Revolution. This is merely a host of bad regulatory and tax policies put forth by those who lack a proper understanding of the positive potential of Capitalism. While politicians and their short-sighted policies by their nature are ephemeral the principles of Free Market capitalism will survive as long as humanity.

There is no starvation in America. Our neighbors do not carry with them warrants for our arrests. We have the freedom to bring our ideas into the most important marketplace of all, that of Ideas. Capitalism can't lose when put up against broken and outright evil systems like socialism and communism. So beef up on your history and economic basics and be prepared for the standard talking points about sweat-shops, George W. Bush and the exploitation of the labor class by people who have never witnessed the horrors of the systems they have romanticized inside their minds.

At the moment the deck is stacked against us. We have millions of people to educate, millions of debates to engage. If you find yourself worrying that it's been for nothing just remember one small truth. It could be worse, you could be wrong.
          The Incentive to Innovate        
One of the things I still marvel at is the way Capitalism drives technological progress. The AEI has a wonderful article up at their website written by Mark J. Perry about the advances in energy efficiency for various house-hold appliances stressing this point. While efficiency and quality of the product have increased cost relative to inflation has actually decreased.

Source: http://www.aei-ideas.org
Thanks to ongoing advances in energy-saving technologies, the chart above shows the significant increases in the energy efficiency of five common home appliances based on historical data that were just released by the Association of Home Appliance Manufacturers (AHAM) for the years 1981 to 2011. Those improvements in energy efficiency translate into significant energy cost savings for American households. According to a press release from the AHAM, U.S. consumers could save $90 per year on average if they replaced their 10-year old refrigerator, clothes washer and dishwasher with today’s energy efficient models. The savings from lower operating costs would be even greater when comparing today’s modern models to the appliances of 20 or 30 years ago.
Advances don't stop at the home, of course, anyone with a rudimentary knowledge of history will understand how valuable the Free Market has been in every single field from entertainment to medicine. MRIs, CT Scans, artificial limbs, bionic contact lenses, Deep Sea Submarines...the list of innovations is as extensive as it is impressive.

We innovate to increase productivity and to please consumers. We move forward because in Capitalism there's no profit in standing still.

Just look at the technological challenges that have been overcome because of our beloved system of economics. At the turn of the century in America Private Businesses spent over a hundred billion dollars to ensure no repercussions were felt from the much-feared Y2K bug. That was more than ten to one what the US Government spent.

In 2004 the first Privately-funded manned space flight took place. We're entering into an era not unlike science fiction and it's hard not to be a little optimistic.
          UPMC’s Taking Snit With Highmark Out On Patients?        
By J.J. Jackson

In the Greater Pittsburgh area, the University of Pittsburgh Medical Center (UPMC) is well known. Sometimes however it is not known for the best of reasons. While UPMC has many good doctors that work for it and is known for good quality care, it is also often cursed for what it has done. For years and years UPMC has been gobbling up as many regional hospitals and doctor’s offices under its own banner as it can.

Often UPMC’s actions seem good. They swoop in to save smaller independent offices that are struggling under economic and regulatory burdens. In the early days this was praised. Now that so many facilities have been taken over it is hard to have a conversation about health care in the Pittsburgh area without UPMC’s name being taken in vain multiple times. Just randomly talking to people I have known over the years has led to a collection of many stories about how after so-and-so’s family doctor became a UPMC facility the waiting room became overly crowded and how appointments were no longer kept in a timely manner. That 5:00 PM appointment you thought you had slowly and painfully became a 7:00 PM one as you sit and sit and wait and wait. Then there are the stories about how customer service went to pot and how it is nearly impossible to get appointments for routine examinations without getting up early in the morning and trying to get through busy phone lines for a same day appointment.

The impression in Pittsburgh is that the unspoken doctrine of UPMC is that they want to be the sole provider of medical care in the region and put out of business other, smaller systems such as Ohio Valley Medical System and West Penn Allegheny. And, let me make sure everyone understands, there is nothing wrong with that. It is called the free markets.

Recently, UPMC made headlines when it refused to negotiate a new contract with the area’s largest medical insurance provider. That insurer is Highmark Blue Cross/Blue Shield. UPMC should of course be free to negotiate contracts with whomever it wants. However it’s reasoning for not negotiating with Highmark quickly perked up the ears of Pittsburghers already suspicious of them. That reasoning was also discovered quickly to be hypocritical.

As it goes, Highmark recently decided to invest money in struggling West Penn Allegheny’s system of hospitals. UPMC turned up its nose and denounced Highmark for the action and said it would not, under any circumstances, negotiate with an entity it now saw as a “competitor”. There is only one problem with this claim though. See, UPMC offers its own health insurance alternatives called the UPMC Health Plan. This health plan has long been in existence. So Highmark and UPMC have been “competitors” long before Highmark’s investment in one of UPMC’s competitors in the sector of hospitals. Yet year after year UPMC negotiated with Highmark anyway.

In fact, when you look at what UPMC has done, they have said that they will not do business with someone who both provides hospital services and health insurance options while they themselves offer hospital services and health insurance options. That’s fine. It is their choice.

However people who use Highmark as their service provider for health insurance are going to see, unless UPMC negotiates a new contract, themselves unable to access UPMC facilities as in-network providers and pay higher costs for care. The cynical, and I would call intelligent, people in Pittsburgh see this as UPMC trying to throw its weight around to either bring down Highmark, causing their subscribers to flee the service in order to access hundreds of facilities under the UPMC banner without added costs, or bring down the financially struggling West Penn Allegheny hospital system and destroy yet another competitor. Either way, UPMC wins.

But it seems that UPMC is upping the ante. While you expect businesses to fight it out among themselves, UPMC appears to also be taking out their snit with Highmark on those who have Highmark’s insurance plans.

Recently, despite years of never having a problem at UPMC facilities, my family has now witnessed recently UPMC’s apparent attack on Highmark insurance holders not once, but twice in recent months. Both have been billing disputes and note that we have not had billing problems in the past. So that makes these two recent problems all the more suspicious. It is almost as if UPMC is attempting to make me upset with Highmark for denying payments for services that should be clearly covered. I know, how cynical of me right?

The first incident was a couple months ago. Charlotte, my daughter, did something stupid. She stuck one of those little plastic beads that people often put in their hair up her nose. It promptly got stuck and stuck good. We took her to UPMC’s Children’s Hospital after the local emergency room at Forbes Regional Medical Center (West Penn Allegheny) was unable to remove it and told us that they would not be able to operate until the morning. Thinking we might be able to get quicker care elsewhere we had them transfer us knowing that there was always the possibility that the bead could travel deeper into nasal cavity and even into the brain cavity if left unchecked for an evening.

Upon arriving at Children’s my daughter was admitted (somewhere around 1:00AM in the morning) and we were told that in the morning they would operate to remove the bead. Of course, since there were higher priority cases to deal with, and I understand that, the surgery was pushed back several hours until the afternoon. So much for quicker care at UPMC right? Well, my daughter eventually went under anesthesia and with a pair of tweezers the offending bead was swiftly removed. We were sent home.

A few weeks later, a bill from Children’s Hospital arrived claiming we owed $100 for our co-pay. Not so fast I thought. Emergency Room visits, which is what this was, had the $100 co-pay waived if the patient was admitted. It says this right in my explanation of benefits brochure from Highmark. So my wife immediately called the insurance provider to inquire and to complain of the charge. Highmark them informed us that the $100 co-pay was because our daughter, according to the code UPMC used, was never admitted to the hospital but rather simply “put under observation.”

Huh? How do you do surgery on someone without admitting them? Well, a second call to complain to UPMC got the code changed to the correct one as my wife, who is a nurse, explained to them that what they were claiming was impossible. Problem solved. But it was still a little suspicious. You cannot tell me that UPMC made such a simple mistake except on purpose. Especially considering what has happened next.

Last month my daughter went to the family doctor, which became a UPMC facility a couple years back, for her annual check up. This was a standard, run of the mill well child visit. Nothing fancy at all.

She gets some shots and the doctor checks her out proclaiming her a perfectly healthy four year old girl. We go home.

A week later we get a benefits summary from Highmark. Several items are denied. Actually, they are the same item, mysteriously listed twice as “Developmental Testing” and labeled as code 96110 at $237 each. Now the fact that this service was listed twice on the same bill raised several red flags and Highmark’s remarks said the services were denied for payment because “the patient” was not “within certain age ranges, meets certain risk factors, or is of a specific gender.”

Again, my Highmark membership brochure clearly states that Pediatric care is fully covered for “Routine physical examinations, regardless of medical necessity and appropriateness and other items and services.” We wait for the inevitable bill from UPMC. It comes. Not only are they asking for this $237 charge to be paid twice, but also another $26 found no where on our Highmark statement. It comes out, continently, to $500.

So of course at this point I am pretty upset with Highmark and have our company’s HR department call and protest. Highmark responds back that the problem, once again, is the code that UPMC used. The code entered was for non-routine care.

With information in hand the wife, again a nurse who understands these codes and services better than I, was sicked on the doctor’s office. UPMC’s response is that they will have to resubmit the claim though the coding department and that there was no guarantee, of course, that after reviewing the services they would be recoded.

But I knew that would be their answer. The night before my wife and I had discussed what to do if they would not correctly code the services from the visit. We both agreed that we would not, under any circumstances, pay the bill. My wife informed them of this during the call. They had two options. Either they would recode the visit properly and get paid through the insurance OR they keep the existing bogus codes and get not a dime of what they want. Plus, they will promptly lose four patients.

UPMC tap danced and told her that the bill was on hold for the next 5 to 10 days while it was reviewed. No, no, no, UPMC you do not get it.

Time for me to get on my soapbox and use the rest of this article to inform UPMC what will happen.

Let me make this clear to you here publicly. IF after that review period you refuse to code the visit properly, continue to double charge us for the same service twice and send us a new bill that reads anything other than Total Amount Due: $0 you will not get a dime from us.

If, should you continue to try to bill us for these services by purposefully miscoding the purpose of the visit so that Highmark rejects it and as I have threatened to do, not to pay you, you want to ding my credit, I encourage you to do that. Because I will haul your little pink butts down to the court house so fast your heads will spin. And you can explain to the judge why you are playing games to try and get me upset with Highmark because you want to have a tantrum over who they are investing in.

I am sure your lawyer costs for handling such a case will be well in excess of the $500 you want to try and fleece me for. I am not going to let you get away with this. And you can bet I can make your lives a miserable Hell over something that should not be happening and seems to be a pattern with your company these days.

I am all for UPMC making money. I am all for UPMC doing their damnedest to put their competitors out of business if they cannot compete. But what I am not for is what I consider insurance fraud on UPMC’s part by misrepresenting services rendered.

After talking to several others with Highmark insurance this seems to be a pattern of behavior from UPMC as of late. All of a sudden bills for procedures never before questioned are getting rejected by Highmark over code issues.

I will not stand for it. And I am not the guy you want to mess with. As you can see I have a blog, a sizable syndication network, and I am not at all afraid to us either of them.

I await my bill for $0. Have a nice day!

======================================================
J.J. Jackson is a libertarian conservative author from Pittsburgh , PA who has been writing and promoting individual liberty since 1993 and is President of Land of the Free Studios, Inc. He is the Pittsburgh Conservative Examiner for Examiner.com. He is also the owner of The Right Things - Conservative T-shirts & Gifts The Right Things. His weekly commentary along with exclusives not available anywhere else can be found at Liberty Reborn.
          China's New Silk Road: Powerful Borrow and Build Stimulus for Emerging Markets        

The Marshall Plan, mentioned above, focussed on rebuilding a devastated Europe, including all countries which were not part of the Soviet Union. In contrast, the oddly named One Belt/One Road project is another grandiose scheme, favoured by Chinese governments, to jumpstart faltering GDP growth. At least it is better than building more ghost cities.

I hope it succeeds because that would be good for global GDP growth. However, I would prefer to see China create more of a free market environment for its entrepreneurs. China’s economic emergence over the last 30 years has been inspired, disciplined and often spectacular but the next stage of development is more challenging. Their population has the potential to achieve anything but their political system encourages corruption and the best talent is seldom given free reign.


          Republocrat Review: A Sneak Peek        
I just sent off a draft of a brief review of Carl Trueman‘s new book Republocrat: Confessions of a Liberal Conservative to appear in the next issue of Religion & Liberty. Continue Reading...
          Free marketing tools        
Internet is now full of useful free resources. Just you need to find out the appropriate tools that meet your needs. A lot of free marketing tools are available on the net as well. I want to mention a few here which I use frequently: Craigslist.org : the most popular free advertising location on the […]
          Why a free market would work for health care        
TAMPA, October 26, 2013 – Conservatives are confused again, rejoicing in Obamacare’s early operational struggles. One would think that their only objection to the legislation has been that the Democrats wouldn’t run it efficiently. Maybe it was. After all, the Republicans ran a candidate against Obama that had implemented virtually the same program in Massachusetts, promising […]
          Pankaj Mishra : The 'People's War'        
[from London Review of Books: Vol. 27 No. 12 dated 23 June 2005 ]

http://www.lrb.co.uk/v27/n12/mish01_.html

In Kathmandu this March, I met a Nepalese businessman who said he knew what had provoked Crown Prince Dipendra, supposed incarnation of Vishnu and former pupil at Eton, to mass murder. On the night of 1 June 2001, Dipendra appeared in the drawing-room of the royal palace in Kathmandu, dressed in combat fatigues, apparently out of it on Famous Grouse and hashish, and armed with assault rifles and pistols. In a few frenzied minutes, he killed his parents, King Birendra and Queen Aishwarya, a brother, a sister and five other relatives before putting a pistol to his head. Anointed king as he lay unconscious in hospital, he died two days later, passing his title to his uncle Gyanendra.

Dipendra’s obsession with guns at Eton, where he was admired by Lord Camoys as a ‘damn good shot’, his heavy drinking, which attracted the malice of the Sun, his addiction to hashish and his fondness for the films of Arnold Schwarzenegger – all this outlines a philistinism, and a potential for violence, commonplace among scions of Third World dynasties (Suharto, Nehru-Gandhi, Bhutto). And it is not so hard to believe the semi-official explanation for his actions: that his parents disapproved of his fiancée. However, the businessman, who claimed to know the royal family, had a more elaborate and intriguing theory.

We sat in a rooftop café in Thamel, Kathmandu’s tourist centre, a few hundred feet from the royal palace. March, the businessman said, was a good season for tourists in Nepal. ‘But look,’ he continued, pointing to the alleys below us, where the bookshops, trekking agencies, cybercafés, bakeries, malls and restaurants were empty. In recent years, the tourist industry has been damaged by news in the international press about the Maoist guerrillas, who model themselves on the Shining Path in Peru, and whose ‘people’s war’ has claimed more than 11,000 lives since 1996. Even fewer tourists have ventured to Nepal since 1 February this year, when King Gyanendra, citing the threat presented by the Maoists, grounded all flights, cut off phone and internet lines, arrested opposition politicians and imposed censorship on the media.

A portly man wearing a cotton tunic, tight trousers and a cloth cap, the businessman had the prejudices of his class, the tiny minority of affluent Nepalese whose wealth comes largely from tourism and foreign aid; and that morning – the spring sun growing warm and burning off the smog over the Kathmandu Valley; the vendors of carpets, Gurkha knives, pirate DVDs and Tibetan prayer flags sullenly eyeing a stray tourist in tie-dye clothes – he aired them freely.

He said that Maoists had bombed the private school he sent his children to; he worried that his servants might join the guerrillas, who controlled 80 per cent of the countryside and were growing strong in the Kathmandu Valley. He said that he was all for democracy – he had been among the protesters demanding a new constitution in the spring of 1990 – but peace and stability were more important. What the country needed now, he declared, was a strong and principled ruler, someone who could crush the Maoists. He said that he missed Dipendra: he was the man Nepal needed at this hour of crisis.

According to him, Dipendra’s three years as a schoolboy in Britain had radicalised him. Just as Pandit Nehru had discovered the poverty of India after his stints at Harrow and Cambridge, so Dipendra had developed a new political awareness in England. He had begun to look, with mounting horror and concern, at his homeland. Returning to Nepal, he had realised that it would take more than tourism to create a strong middle class, accelerate economic growth, build democratic institutions and lift the ninth poorest country in the world to the ranks of modern democratic nations. As it turned out, he had been thwarted at every step by conservative elements in the royal palace. He had watched multi-party democracy, introduced in 1991, grow corrupt and feeble while enriching an elite of politicians and bureaucrats; equally helplessly, he had watched the new rulers of Nepal fail to tackle the Maoists. Frustration in politics rather than love, the businessman claimed, had driven Dipendra to alcohol, drugs, guns and, finally, to regicide.

It’s often hard to know what to believe in Nepal, the only Hindu kingdom in the world, where conspiracy and rumour have long fuelled a particularly secretive kind of court politics. Independent newspapers and magazines have been widely available only since 1990, and though intellectually lively, the press has little influence over a largely illiterate population easily swayed by rumour. In December 2000, news that a Bollywood actor had insulted Nepal incited riots and attacks on Indians and Indian-owned shops across the country. Little is known about Dipendra, apart from his time at Eton, where his fellow pupils nicknamed him ‘Dippy’. There is even greater mystery surrounding Pushpa Kamal Dahal, or Prachanda, the middle-aged, articulate leader of the Maoists, who has been in hiding for the last two decades.

King Gyanendra appeared on national television to blame the palace massacre on a ‘sudden discharge by an automatic weapon’. A popular conspiracy theory, in turn, blamed it on the new king himself, who was allegedly involved in smuggling artefacts out of Nepal, and on his son, Paras, much disliked in Nepal for his habit of brandishing guns in public and dangerous driving – he has run over at least three people in recent years, killing one. More confusingly, the Maoists claimed that they had an ‘undeclared working unity’ with King Birendra, and accused Gyanendra, and Indian and American imperialists, of his murder.

This atmosphere of secrecy and intrigue seems to have grown murkier since February, when Gyanendra adopted the Bush administration’s rhetoric about ‘terrorism’ and assumed supreme power. Flights to Nepal were resumed after only a few days, and the king claimed to have lifted the emergency on 30 April, but most civil rights are still suspended today. When I arrived in Kathmandu, fear hung heavy over the street crossings, where soldiers peeped out from behind machine-gun emplacements. Men in ill-fitting Western suits, with the furtive manner of inept spies, lurked in the lobby of my hotel. Journalists spoke of threatening phone calls from senior army officers who tended to finger as Maoists anyone who didn’t support the king. Many of the people I wanted to meet turned out to be in prison or in exile. Appointments with underground activists, arduously made, were cancelled at the last minute, or people simply didn’t turn up.

Sitting in her gloomy office, a human rights activist described the routine torture and extra-judicial killing of suspected Maoists, which had risen to a startling average of eight a day. Nothing was known about the more than 1200 people the army had taken from their homes since the beginning of the ‘people’s war’ – the highest number of unexplained disappearances in the world. She spoke of the ‘massive impunity’ enjoyed by the army, which was accountable only to the king. She claimed that the governments of India, the US and the UK had failed to understand the root causes of the Maoist phenomenon and had decided, out of fear and ignorance, to supply weapons to the Royal National Army: 20,000 M-16 rifles from the US, 20,000 rifles from India, helicopters from the UK.

She said that the ‘international community’ had chosen the wrong side in a conflict that in any case was not likely to be resolved by violence. Though recently expanded, and mobilised against the Maoists in 2001, the army was no more than 85,000 strong, and could not hold the countryside, where, among the high mountains, ravines and rivers – almost perfect terrain for guerrillas – it faced a formidable enemy.

She spoke with something close to despair. Much of her work – particularly risky at present – depended on international support. But few people outside Nepal cared or knew enough about its human rights record, and the proof lay in her office, which was austerely furnished, with none of the emblems of Western philanthropy – new computers, armed guards, shiny four-wheel drives in the parking lot – that I had seen in December in Afghanistan.

‘People are passing their days here,’ she said as I left her office, and the remark, puzzling at first, became clearer as I spent more time in Kathmandu. In the streets where all demonstrations were banned, and any protest was quickly quashed by the police, a bizarre feeling of normality prevailed, best symbolised by the vibrant billboards advertising mobile phones (banned since 1 February). Adverts in which companies affirmed faith in King Gyanendra appeared daily in the heavily censored newspapers, alongside news of Maoist bombings of police stations, unverified reports of rifts between Maoist leaders, promotional articles about Mercedes Benz cars and Tag Heuer watches, and reports of parties and fashion shows and concerts in Kathmandu.

Thamel opened for business every day, but its alleys remained empty of tourists. Months of Maoist-enforced blockades and strikes were also beginning to scare away the few foreign investors who had been deceived by the affluence of Kathmandu into thinking that Nepal was a big market for luxury consumer goods. Interviewed in a local newspaper, a Dutch investor described the Nepalese as an ‘extremely corrupt, greedy, triple-faced, myopic, slow, inexperienced and uneducated people’, and declared that he was taking his hair-replacement business to Latvia. Western diplomats and United Nations officials – darting in their SUVs from one walled compound to another – speculated about a possible assault on the capital by guerrillas.

But it is the middle-class Nepalese, denounced by the Maoists as ‘comprador capitalists’, who appear to live most precariously, their hopes and anxieties echoed in the newspapers by royalist journalists who affirm daily that Nepal needs a strong ruler and Gyanendra is best placed to defend the country, by means of a spell of autocratic rule, from both Maoist ‘terrorists’ and corrupt politicians.

Often while listening to them, I would remember the businessman I had met in Thamel and what he had told me about Dipendra; and I would wonder how the crown prince, if he had indeed been sensitised to social and economic distress during his three years in Thatcher’s England, had seen his strange inheritance, a country where almost half of the 26 million people earned less than $100 a year and had no access to electricity, running water or sanitation; a country whose small economy, parasitic on foreign aid and tourism, had to be boosted by the remittances of Nepalese workers abroad, and where political forces seen as anachronisms elsewhere – monarchy and Communism – fought for supremacy.

Histories of South Asia rarely describe Nepal, except as a recipient of religions and ideologies – Buddhism, Hinduism, Communism – from India; even today, the country’s 60 ethnic and caste communities are regarded as little more than a picturesque backdrop to some of the world’s highest mountains. This is partly because Western imperialists overlooked Nepal when they radically remade Asia in the 19th and 20th centuries.*

While a British-educated middle class emerged in India and began to aspire to self-rule, Nepal remained a country of peasants, nomads and traders, controlled by a few clans and families. Previously dependent on China, its high-caste Hindu ruling class courted the British as they expanded across India in the 19th century. As in the so-called princely states of India, the British were keen to support despotic regimes in Nepal, and even reward them with territory; it was one way of staving off potentially destabilising change in a strategically important buffer state to Tibet and China. The country was also a source of cheap mercenaries. Tens of thousands of soldiers recruited by the British from the western hills of Nepal fought during the Indian Mutiny, the Boxer Rebellion in China, and in the two world wars. The Gurkhas also helped the British suppress political dissenters in India, and then, more violently, Communist anti-colonialists in Malaya in the 1950s.

As the movement for political independence grew in India, Nepal came to be even more strongly controlled by Hindu kings and the elites they created by giving land grants to members of the high castes, Bahun and Chhetri, which make up less than 30 per cent of the population. The end of the British Empire in Asia didn’t lead to rapid change in Nepal, or end its status as a client state. Indian-made goods flooded Nepalese markets, stifling local industry and deepening the country’s dependence on India. In the 1950s and 1960s, as the Cold War intensified, Nepal was the forward base of the CIA’s operations against China.

American economists and advisers trying to make the world safe for capitalism came to Nepal with plans for ‘modernisation’ and ‘development’ – then seen as strong defences against the growth of Communism in poor countries. In the Rapti valley, west of Kathmandu, where, ironically, the Maoists found their first loyal supporters in the 1990s, the US government spent about $50 million ‘improving household food production and consumption, improving income-generating opportunities for poor farmers, landless labourers, occupational castes and women’.

Modernisation and development, as defined by Western experts during the Cold War, were always compatible with, and often best expedited by, despotic rule. Few among the so-called international community protested when, after a brief experiment with parliamentary democracy in the 1950s, King Mahendra, Dipendra’s grandfather, banned all political parties. A new constitution in 1962 instituted a partyless ‘Panchayat’ system of ‘guided democracy’ in which advisers chosen or controlled by the king rubber-stamped his decisions. The representatives of the Panchayat, largely from the upper castes, helped themselves to the foreign aid that made up most of the state budget, and did little to alleviate poverty in rural areas. The king also declared Nepal a Hindu state and sought to impose on its ethnic and linguistic communities a new national identity by promoting the Nepali language.

Such hectic nation-building could have lulled Nepal’s many ethnic and linguistic communities into a patriotic daze had the project of modernisation and development not failed, or benefited so exclusively and egregiously an already privileged elite. During the years of autocratic rule (1962-90), a few roads were built in the countryside, infant mortality was halved, and the literacy rate went up from 5 per cent in 1952 to 40 per cent in 1991. But Nepal’s population also grew rapidly, further increasing pressure on the country’s scarce arable land; and the gap between the city and the countryside widened fast.

What leads the sensitive prince to drugs and alcohol often forces the pauper to migrate. Millions of Nepalese have swelled the armies of cheap mobile labour that drive the global economy, serving in Indian brothels, Thai and Malaysian sweatshops, the mansions of oil sheikhs in the Gulf and, most recently, the war zones of Iraq. Many more have migrated internally, often from the hills to the subtropical Tarai region on the long border with India. The Tarai produces most of the country’s food and cash crops, and accommodates half of its population. On its flat alluvial land, where malaria was only recently eradicated, the Buddha was born 2500 years ago; it is also where a generation of displaced Nepalese began to dream of revolution.

In Chitwan, one of the more densely populated districts in the Tarai, I met Mukti Raj Dahal, the father of the underground Maoist leader, Prachanda. Dahal was one of the millions of Nepalese to migrate to the Tarai in the 1950s. His son was then eight years old. He had travelled on to India, doing menial jobs in many cities, before returning to Chitwan, which American advisers and the Nepalese government were then developing as a ‘model district’ with education and health facilities. In Chitwan, Dalal bought some land and managed to give his eight children an education of sorts. Though he is tormented by stomach and spinal ailments, he exuded calm as he sat on the verandah of his two-roomed brick house, wearing a blue T-shirt and shorts under a black cap, a Brahminical caste mark on his forehead.

He had the serenity of a man at the end of his life. And, given the circumstances, he had not done too badly. I had spent much of that day on the road from Kathmandu to the Tarai, shuffling past long queues of Tata trucks from India, through a fog of dust and thick diesel smoke, ragged settlements occasionally appearing beside the road: shops made of wooden planks, selling food fried in peanut oil and tea in sticky clouded glasses, mud houses with thatched roofs – a pre-industrial bareness in which only the gleaming automatic guns of young soldiers and the tangle of barbed wire behind which they sat spoke of the world beyond Nepal.

The jittery soldiers who approached the car with fingers on their triggers were very young, hard to associate with stories I had heard in Kathmandu – stories no newspaper would touch – of the army marching men out of overcrowded prisons and executing them. My companion, a Nepalese journalist, was nervous. He knew that the soldiers in the countryside attacked anyone they suspected of being a Maoist, and journalists were no exception. Many of the soldiers barely knew what a journalist was.

There are few places in Nepal untouched by violence – murder, torture, arbitrary arrest – and most people live perpetually in fear of both the army and the Maoists, without expectation of justice or recompense. Dahal, however, appeared to have made a private peace with his surroundings. He told me that he spent much of his day at the local temple, listening to recitals of the Ramayana. He said that he still believed the king had good intentions. He appeared both bemused by, and admiring of, his famous son, whom he had last seen at the funeral of his wife in 1996. The ideas of equality and justice, he thought, had always appealed to Prachanda, who was a sensitive man, someone who shared his food with poor people in the village. He couldn’t tell me how his son had got interested in Mao or Marx in such a place as Chitwan, which had no bookshop or library. But he did know that Prachanda had got involved with Communists when he couldn’t find a good job with the government and had to teach at a primary school in his native hills of Pokhara.

In his speeches, which claim inspiration from Mao and seek to mobilise the peasants in the countryside against the urban elite, Prachanda comes across as an ideologue of another era: he’s an embarrassment to the Chinese regime, which is engaged in the un-Maoist task of enriching Chinese coastal cities at the expense of the hinterland, and feels compelled to accuse Nepalese Maoists of besmirching the Chairman’s good name.

In the few interviews he has given, Prachanda avoids answering questions about his background and motivation, which have to be divined from details given by Dahal: the haphazard schooling, the useless degree, the ill-paid teaching job in a village school, all of which seem to lead inexorably to a conflict with, and resentment of, unjust authority.

The ‘modernisation’ and ‘development’ of Nepal during the 1950s and 1960s created millions of men like Prachanda, lured away from their subsistence economies and abandoned on the threshold of a world in which they found they had, and could have, no place. Nepal’s agricultural economy offered few of them the jobs or the dignity they felt was their due, and they were too aware of the possibilities thwarted by an unequal, stratified society to reconcile themselves to a life of menial labour in unknown lands, and an old age spent in religious stupor. Educated, but with no prospects, many young men like Prachanda must have been more than ready to embrace radical ideas about the ways that an entrenched urban elite could be challenged and even overthrown if peasants in the countryside were organised.

Growing up in Nepal in the 1960s, Prachanda watched these ideas grow in the Naxalbari movement in India. Communist activists lived and worked secretly in parts of Nepal during the Panchayat era – in the 1950s, a famous Communist leader called M.B. Singh travelled in the midwestern hills and acquired followers among the Magars, one of Nepal’s more prominent ethnic groups now supporting the Maoists. But Prachanda says that the ‘historic Naxalbari movement’ of India was the ‘greatest influence’ on the Communists of Nepal.

In the late 1960s, thousands of students, many of them middle-class and upper-caste, joined an armed peasant uprising led by an extremist faction of the Communist Party of India (Marxist) in West Bengal and Bihar. Known as Naxalites, after the Naxalbari district where the revolt first erupted in 1967, they attacked ‘class enemies’ – big landlords, policemen, bureaucrats – and ‘liberated’ territories which they hoped would form bases for an eventual assault on the cities, as had happened in China. The Indian government responded brutally, killing and torturing thousands. Driven underground, the Naxalite movement splintered, and remained dormant for many years.

In the 1990s, when India began to move towards a free market, the Naxalite movement revived in some of the poorest and most populous Indian states. Part of the reason for this is that successive Indian governments have steadily reduced subsidies for agriculture, public health, education and poverty-eradication, exposing large sections of the population to disease, debt, hunger and starvation. Almost three thousand farmers committed suicide in the southern state of Andhra Pradesh after the government, advised by McKinsey, cut agricultural subsidies in an attempt to initiate farmers into the world of unregulated markets. In recent years, Naxalite movements, which have long organised landless, low-caste peasants in Bihar and Andhra Pradesh, have grown quickly in parts of Uttar Pradesh and Madhya Pradesh – where an enfeebled Indian state is increasingly absent – to the extent that police and intelligence officials in India now speak anxiously of an unbroken belt of Communist-dominated territory from Nepal to South India.

The Naxalite uprising in the late 1960s invigorated the few Communists in Nepal, who, like the members of the Nepali Congress, the main underground political organisation, sought guidance and encouragement from India. In 1971, some Nepalese Communists living across the border from Naxalbari declared a ‘people’s war’ against the monarchy. They killed seven ‘class enemies’ before being suppressed by the king. As fractious as their Indian counterparts, the Nepalese Communist parties split and split again over petty doctrinal or personality issues. In 1991, after the restoration of multi-party democracy, several of them contested elections, and even did well: a Communist coalition became the biggest opposition party, and briefly held power in 1994. In the early 1990s, however, few people in Nepal could have predicted the swift rise of Prachanda and the obscure faction he led.

The Maoists under Prachanda resolved as early as 1986 to follow Mao’s strategy of capturing state power through a ‘people’s war’. They did not start the war until the mid-1990s, however, when disillusionment with parliamentary democracy created for them a potentially wide popular base in the countryside. Still, hardly anyone noticed when on 4 February 1996 the Maoists presented the government with a list of 40 demands, which included abrogating existing treaties with India, stripping the monarchy of all power and privileges, drafting a new constitution by means of a constituent assembly, nationalising private property, declaring Nepal a secular nation and ending all foreign aid. These demands were not likely to be met; and as though aware of this, the Maoists began their ‘people’s war’ by attacking police stations in six districts four days before the deadline.

For the next five years, the Maoists forced their way into the national consciousness with their increasingly bold tactics. They financed themselves by collecting ‘taxes’ from farmers, and they exacted ‘donations’ from many businessmen in the Kathmandu Valley. They indoctrinated schoolchildren; they formed people’s governments in the areas they controlled and dispensed rough justice to criminals and ‘class enemies’. But much of the new power and charisma of the Maoists came from their ability to launch audacious attacks on the police and the army.

The military wing of the Maoists initially consisted of a few ill-trained men armed with antique rifles and homemade weapons. But they chose their first target cannily: the police, almost the only representatives of the central government in much of Nepal. Poorly armed, often with little more than sticks and .303 Lee Enfield rifles, the police retreated swiftly before the Maoists, who also attacked roads, bridges, dams, administrative offices, bridges, power plants – anything they felt might aid the counter-insurgency efforts of the government.

In recent years, the Maoists have grown militarily strong, mostly through conscription in the countryside, and regular training – allegedly provided by Indian Naxalites. They have acquired better weapons by looting police stations and buying from the arms bazaars of India; they have also learned how to make roadside explosives, pipe and ‘pressure cooker’ bombs. In November 2001, the Maoists launched 48 attacks on the army and the police in a single day, forcing the Nepalese government to impose a state of emergency. More than 5000 people died in the next 15 months, the bloodiest period in Nepal’s modern history.

But violence is only a part of the Maoists’ overall strategy. In an interview in 2000, Prachanda criticised Indian Communist groups for their lack of vision and spoke of the importance of developing ‘base areas’. Since 1996, the Maoists have spread out from their traditional home in the midwestern hills of Rolpa and Rukum districts. Their cadres – estimated to number as many as 100,000 – travel to deprived areas, addressing, and often recruiting from, the large and growing mass of people deeply unhappy with Nepal’s new democratic dispensation.

Some measure of democracy was inevitable in Nepal by the 1980s. In previous decades, the state’s half-hearted efforts at development had produced many low-level bureaucrats, small businessmen, teachers, students and unemployed graduates. This new class resented the continuing dominance of upper-caste clans and families. The conflict between the old elite and its challengers was aggravated by a series of economic crises in the late 1980s. In 1985-86, Nepal had negotiated a loan with the IMF and World Bank. The bank’s euphemistically named (and free-market oriented) ‘structural adjustment programme’, which was then causing havoc in Latin American economies, forced the Nepalese government to cut farm subsidies and jobs in the public sector. GDP grew as a result but the gains were cancelled out by inflation of up to 10 per cent and a trade and transit embargo imposed by India in 1989, which caused severe fuel shortages and price rises.

The protesters who filled the streets of Kathmandu in the spring of 1990 were convinced that the decaying Panchayat system could not deal with the shocks of the new world and needed to be reformed. In acceding to demands for multi-party democracy, the king appeared to acknowledge the strength of the new educated class and to recognise that the old political system needed a degree of popular legitimacy if it was to survive. It’s clear now that what happened in 1990 was less a revolution than a reconfiguration of power, sanctified by elections, among the old royalist oligarchy and an emerging urban middle class. Many courtiers and sycophants of the king managed to reinvent themselves as parliamentary politicians, often joining the Nepali Congress, the political party that ruled Nepal for all but one of the next 13 years. There were few ideological differences between the Nepali Congress and the main opposition party, the radical-sounding Communist Party of Nepal (United Marxist-Leninist), both of which continued to be led by upper-caste men motivated largely by a desire for money and power. Elections were held frequently, and a procession of governments – 13 in as many years – made Nepalese democracy appear vibrant. But the majority of the population, especially its ethnic communities, went largely unrepresented.

In 1992, when democracy still promised much, and Maoism was no more than another rumour in the streets of Kathmandu, Andrew Nickson, a British expert on Latin America, wrote prophetically:

The future prospects of Maoism in Nepal will . . . depend largely on the extent to which the newly elected Nepali Congress government addresses the historic neglect and discrimination of the small rural communities which still make up the overwhelming bulk of the population of the country. As in the case of Peru, this would require a radical reallocation of government expenditures towards rural areas in the form of agricultural extension services and primary healthcare provision.

Needless to say, this didn’t happen. In 2002, Dalits, low-caste Hindus, had an annual per capita income of only $40, compared to a national average of $210; fewer than 10 per cent of Dalits were literate. The upper-caste men who dominated the new democratic regime were competing among themselves to siphon off the money pouring into Nepal from foreign donors. A fresh convert to the ideology of the free market, the Nepalese government dedicated itself to creating wealth in urban areas. Trying to boost private investment in Kathmandu, it neglected agriculture, on which more than 80 per cent of the population depend for a living. Not surprisingly, absolute poverty continued to increase in the late 1990s, even as Kathmandu Valley benefited from the growth in the tourist, garment and carpet industries, and filled up with new hotels, resorts and villas.

In such circumstances, many people are likely to be attracted to violent, extra-parliamentary groups. The Maoists in Nepal had their first ready constituency among rural youths, more than 100,000 of whom fail their high school examination every year. Unemployed and adrift, many of these young men worked for other political parties in the countryside before becoming disillusioned and joining the Maoists.

Mohan was one of the young men who joined a newly legitimate political party after 1990 and then found himself remote from the spoils of power. He then worked with the Maoists for almost five years, living in jungles, once travelling to the easternmost corner of Nepal, before deciding to leave them. He couldn’t return to his village, which lay in the Maoist-dominated region of Rolpa, and had gone to India for a while. He was now trying to lie low in Kathmandu, and although he didn’t say so, he seemed to be ‘passing his days’ and making a living through odd jobs, like so many other people in the city.

We had arranged to meet in Boudhanath, Kathmandu’s major Buddhist site. Sitting in the square around the white stupa, among monks in swirling crimson robes and often with white faces, Mohan spoke of ‘feudal forces’ and the ‘bourgeoisie’: their corruption had paved the way for the Maoists, whom he described as ‘anarchists’. He used the foreign words with a Nepalese inflection. He said that he had picked them up while accompanying a Maoist propagandist on tour; and it occurred to me, as he described his background, that he still used them despite having left the Maoists because he had no other vocabulary with which to describe his experience of deprivation and disappointment.

He was born and brought up in a family of Magar shepherds in a corner of Rolpa district that had no proper roads, schools or hospitals. Educated at a school in Palpa, a walk of several miles from his village, he had joined the Nepali Congress in 1992, when still in his late teens, and become a personal aide to a prominent local politician. There were many such young men. They received no money for their services, but slept in the politician’s house, ate the food prepared for his family, and travelled with him to Kathmandu. Mohan said that it was a good time, the early years of democracy. He liked being in Kathmandu, especially with someone who had a bit of power. But he couldn’t fail to notice that the politician returned less and less often to his constituency in the hills and often refused to meet people who came to his door asking for jobs, money and medical help. He was surprised to hear that the politician was building a new house for himself in Kathmandu. Soon, he felt he was not needed, and one day the politician’s wife told him to eat elsewhere.

Clashes between Nepali Congress activists and the Maoists were common in his area; he felt that he could be useful to the Maoists with his knowledge of politics. He was also attracted to the idea of ethnic autonomy that the Maoists espoused. He had seen in his time with the politician how the upper-caste-dominated government in Kathmandu possessed an unjust share of the country’s wealth and resources. Many people he knew had already joined the Maoists, and in 1995, one of his friends introduced him to the Maoist ‘squad commander’ in the region.

As he spoke, I wondered if this was the whole truth, if he hadn’t joined the Maoists for the same reason he had joined the Nepali Congress, the reason many young men like him in India joined political parties: for food and shelter. In any case, he joined the Maoists at a bad time: it was in 1995 that the Nepalese government launched Operation Romeo.

This scorched-earth campaign is described as an instance of ‘state terror’ in a report by INSEC (Informal Sector Service Centre), Nepal’s most reliable human rights group. The police, according to the report, invaded villages in the Rolpa and Rukum districts, killing and torturing young men and raping women. When I mentioned this to Mohan, he said that things weren’t as bad as they were made out to be by the ‘bourgeois’ intelligentsia in Kathmandu, who, he thought, were soft on the Maoists. He said the Maoists were simply another opportunistic political group; this was why he had left them. They were interested in mobilising ethnic communities only to the extent that this would help them capture ‘state power’; they weren’t really interested in giving them autonomy. He had also been repelled by their cruelty. He had heard about – if not actually seen – instances of Maoists punishing people who refused to pay taxes, defied their alcohol ban or were suspected of being police informers. Using rocks and hammers, they often broke all the bones in their victims’ bodies before skinning them alive and cutting off their tongues, ears, lips and noses.

Many of these stories appear in reports by Nepalese and international human rights groups. The Maoist leaders were, I often heard in Kathmandu, riding a tiger, unable to prevent their angry and frustrated cadres from committing torture and murder. Criminals had infiltrated their movement, and some Maoists now made a living from extortion and kidnapping. When confronted with these excesses, Maoist leaders deny or deplore them. They probably realise that that they are losing many of their original supporters, who are as tired of the organisation’s growing extremism as of the years of indecisive fighting. Nevertheless, these leaders can often seem constrained in their political thinking by revolutionary methods and rhetoric created in another time and place. Prachanda, for instance, is convinced that ‘a new wave of revolution, world revolution is beginning, because imperialism is facing a great crisis.’

When the subject is not world revolution but the specific situation of Nepal, he can be shrewdly perceptive. A police officer in India told me that many of the Indian Communists he interviewed confessed to learning much from the Maoists in Nepal, who were not as rigidly doctrinal as Communists in India and Afghanistan. As Prachanda put it:

The situation in Nepal is not classical, not traditional. In the Terai region we find landlords with some lands, and we have to seize the lands and distribute them among the poor peasants. But in the whole mountainous regions, that is not the case. There are smallholdings, and no big landlords . . . How to develop production, how to raise production is the main problem here. The small pieces of land mean the peasants have low productivity. With collective farming it will be more scientific and things can be done to raise production.

It is not clear how much collective farming exists, or what non-military use the Maoists make of the taxes they collect. In fact, there is little reliable information about what goes on in the countryside. Few journalists venture out of their urban bases, and the Maoists aren’t the only obstacle. Most of the very few roads outside Kathmandu are a series of large potholes, and then there are the nervous soldiers at checkpoints. And once you move away from the highway, no soldiers or policemen appear for miles on end. In Shakti Khor, a village in the Tarai region populated by one of the poorest communities in Nepal, a few men quietly informed us that Maoist guerrillas were hiding in the nearby forest, where no security forces ever ventured and from where the Maoists often escaped to India. At a small co-operative shop selling honey, mustard oil, turmeric and herbal medicines, two men in their mid-twenties appeared very keen to put in a good word for the Maoists – who the previous night had painted red anti-monarchy slogans on the clean walls.

In the other Maoist-dominated regions I visited, people seemed too afraid to talk. At Deurali Bazaar, a village at the end of a long and treacherous drive in the hills near Pokhara, a newly constructed bamboo gate was wrapped with a red cloth painted with a hammer and sickle and the names of Maoists either dead or in prison. The scene in the square appeared normal at first – women scrubbing children at a municipal tap, young men drinking tea, an old tailor hunched over an antique sewing-machine, his walking stick leaning against his chair – but the presence of the Maoists, if unacknowledged, was unmistakable. When I tried to talk to the men at the teashop, they walked away fast, one of them knocking over the tailor’s stick. The shopkeeper said that he knew nothing about Maoists. He didn’t know who had built the bamboo gate; it had simply appeared one morning.

When I got back to Pokhara that evening, the news was of three teenage students killed as they tried to stop an army car on the highway. The previous day I had seen newspaper reports in which the army described the students as ‘terrorists’ and claimed to have found documents linking them to the Maoists. But it now seemed clear that they were just collecting donations for Holi, the Hindu festival of colours. There were eyewitnesses to the shooting. The parents of the victims had exhumed their corpses from the shallow graves in which the army had quickly buried them and discovered that two of them had been wearing their school uniforms. Like much else in Nepal, this would not appear in the newspapers.

The bloody stalemate in Nepal may last for a long time. The army is too small and poorly equipped at present decisively to defeat the Maoists. In some areas it has recently tried arming upper-caste villagers and inciting them to take action against the Maoists. In the southern district of Kapilavastu, vigilante groups organised by a local landlord and armed by the government claim to have killed more than fifty Maoists in February. Such tactics are not only likely to lead to a civil war but also to increase support for the Maoists in areas where the government is either absent or disliked.

Though unlikely at present, talks may offer a way forward. The Maoists have shown themselves willing to negotiate and even to compromise: in July 2001 they dropped their demand that Nepal cease to be a monarchy. More recently, Prachanda hinted at a flexible stance when he called for a united front of mainstream political parties against the monarch. He probably fears that the guerrilla force might self-destruct if its leaders fail to lead their more extreme cadres in the direction of moderate politics. But any Maoist concessions to bourgeois democracy are unlikely to please Gyanendra, who clearly wants to use the current chaos to help him hold on to his power.

If he periodically evokes the prospect of terrorists taking over Nepal, Gyanendra can count on the support of India, the US and the UK. In late 2001, the US ambassador to Nepal, Michael Malinowski, a veteran of the CIA-sponsored anti-Soviet jihad in Afghanistan, said that ‘these terrorists, under the guise of Maoism or the so-called “people’s war”, are fundamentally the same as terrorists elsewhere – be they members of the Shining Path, Abu Sayaf, the Khmer Rouge or al-Qaida.’ The then Hindu nationalist government in Delhi, just as eager to name new enemies, also described the Maoists as ‘terrorists’.

The present Indian government has a more nuanced view of Nepal. But it is worried about India’s own Communist rebels and their links with the Nepalese Maoists, and it believes that, as Malinowski put it, ‘all kinds of bad guys could use Nepal as a base, like in Afghanistan.’ Responding to fears that the army in Nepal was running out of ammunition, India resumed its arms supply this year, partly hoping to contain the Maoists and wanting too to maintain its influence over Nepal in the face of growing competition from the US.

There is no evidence that bad guys, as defined by the Bush administration, have flocked to Nepal; the Maoists are far from achieving a military victory; and the Communists in India are unlikely to extend their influence beyond the poverty-stricken districts they presently control. The rise of an armed Communist movement in a strategically important country nevertheless disturbs many political elites, who believe that Communism died in 1989 and that history has arrived at the terminus of liberal-capitalist democracy.

A European diplomat in Kathmandu told me that although Western countries hoped the political parties and the king would put up a joint front against the Maoists, they knew they might at some point have to support the king and his army if he alone was left to protect the country from the Maoists and keep alive the prospects for democracy. I did not feel that I could ask him about the nature of a democracy that is protected by an autocrat. Perhaps he meant nothing more by the word ‘democracy’ than regular elections: the kind of democracy whose failure to contain violence or to limit systemic poverty and inequality does not matter so long as elections are held, even if, as in Afghanistan and Iraq, under a form of martial law, and in which the turnout of voters does nothing but empower and legitimise a native elite willing to push the priorities of its Western patrons.

Such a form of democracy, which is slowly coming into being in Pakistan, could be revived again in Nepal, as the king repairs his relationship with the mainstream political parties. It is possible, too, that the excesses of the Maoists will cause them to self-destruct. Certainly the international revolution Prachanda speaks of will prove a fantasy. Yet it’s hard to wish away the rage and despair of people who, arriving late in the modern world, have known its primary ideology, democracy, only as another delusion – the disenchanted millions who will increasingly seek, through other means than elections, the dignity and justice that they feel is owed to them.

Footnotes

* For an accessible account of the beginnings of modern Nepal, see John Whelpton's A History of Nepal, Cambridge, 2005. Some recent scholarship on the Maoists is collected in Himalayan 'People's War': Nepal's Maoist Rebellion, ed. Michael Hutt, Hurst and Co, 2004. The Nepalese novelist Manjushree Thapa provides an engaging personal account of Nepal's recent turbulent years in Forget Kathmandu: An Elegy for Democracy, Penguin India, Delhi, 2005'
          Oh! This Noble Land of Looters        

Was just wondering if any contestant in a TV singing competition would come on stage to sing that once famous patriotic song "Loken uthum rata Lankavayi…." (Lanka the noblest country in the world). In this noblest of all countries, Presidential Commission investigating into the Central Bank's (CBSL) Treasury Bond Scam has opened up a huge stinking cesspit that makes the 09 year Rajapaksa rule "a bearable stink". PM Wickramasinghe who went all out of his way to defend Arjuna Mahendran's tenure as Governor of the CBSL and tried his best to close up the scam, now stand complicit, unless the 'PM' mentioned in short messages exchanged between former Finance Minister Ravi Karunanayake and Mahendran's son in law and businessman Arjun Aloysius refers to a 'Post Master' or to a 'Para Medic'.

There now seem little chance of damage controlling. "Yahapalana" side-kicks nevertheless shamelessly murmur, it is "Yahapalana" rule that allows even a powerful minister like Karunanayake to be investigated. First, it is "yahapalanaya" that allowed robbing big like the Rajapaksas or even bigger, making "yahapalanaya" and "Rajapaksa" the same. Second is that it was being covered up and denied for almost 02 and a half years by none other than the PM of this "yahapalana" unity government. How it broke out into the open is not because of "yahapalanaya" but due to growing political conflicts within the unity government.

President Sirisena was almost forced by his own SLFP ministers to investigate the bond scam. They were pushed to prove their bona fide as SLFP in their own anti UNP constituencies. Though in government, pro Sirisena SLFP ministers in this unity government have to prove to the SLFP voter, they are "anti UNP".

'Bond scam' was the most dubious deal that remained continuously in front page news reports and as first news in TV channels from March 2015 to date. President Sirisena was therefore compelled to investigate the bond scam in satisfying his own men in the SLFP. When it was constituted to investigate the bond scam, this Presidential Commission too was taken as another sham in covering it up. Yet it became aggressive beyond what no one ever expected from a 'presidential commission'. Investigations have now moved from Arjun Mahendran as Governor of CBSL and his son in law's Perpetual Treasuries to RaviK and others in CBSL who were involved in the scam with even the PM seen as complicit.

Although RaviK was only called in for a statement and have not been indicted as yet, he is seen deeply involved in the scam with huge kickbacks going his way. There were also statements to the effect unaccounted for money bags were kept in the safe of the family company, the daughter is also a director with her mum. And that money had also been used, though the daughter asked "why only my dad?" RaviK's and Aloysius's involvement in financing the 'Sunday Leader' newspaper also came to light by way of short messages quoted. Proof that media is also where black money is laundered.  

Unable to roll back the commission's probing, it has dragged President Sirisena into a quagmire he cannot possibly climb out from, without serious new crises in his own political life. He cannot this moment shun the UNP to go it alone as a SLFP government. That needs Rajapaksa, he is awfully afraid of. His political 'Guru' Chandrika would go any distance to keep Rajapaksa from entering the scene. President Sirisena nevertheless needs a quick fix to the crisis that is brewing not only within his unity government, but in society that now questions the moral of a "yahapalana" government promised at two consecutive elections.

His and some of Wickramasinghe's allies in Colombo elite circles seem to believe, asking RaviK to resign or removing him from his ministerial portfolio could get the government out of this political crisis. It is the government that is already screwed, not RaviK alone as an individual politician. Thus getting him to resign or removing him from the foreign affairs portfolio will not leave this unity government clean and credible once again. Removing RaviK will also not conclude investigations into the bond scam. In fact this is the first bond scam and the second remains to be investigated.

This bond scam investigation and what had already been thrown open, cannot be covered by talking of Rajapaksas anymore. Dumb politicians like Deputy Minister of Power and Renewable Energy Ajith P who now say it’s the Minister of Justice and Buddha Sasana who stalled investigations into Rajapaksa corruptions only make matters worse for his "yahapalana" government. He sounds as if Justice Minister Wijedasa Rajapaksa is a minister in a different government. IF his "yahapalana" government was serious about cleaning up corruption and bringing to book everyone found guilty during the Rajapaksa era, why wasn't Minister of Justice Wijedasa Rajapaksa then asked to resign when Minister Marapona was asked to resign over a statement made in parliament in relation to Avant-Garde corruptions? Marapona after all was only the legal counsel to Avant-Garde before becoming a minister in this government. Wijedasa Rajapaksa was not so. He was directly accused in parliament of having very close personal connections with the Avant-Garde boss under investigation and that amounted to a conflict of interest.

Added is the fact that Minister Rajapaksa is also openly racist, cultivating relationships with extreme Sinhala Buddhist groups, no serious leader of a government that talks of "reconciliation" and honouring "Tamil aspirations" would ever tolerate. But he continues as a cabinet minister from the same UNP that Deputy Minister Perera is from. If the "yahapalana" government is as serious as Deputy Minister Ajith P says, Justice Minister Rajapaksa would have been removed at least when the cabinet was reshuffled in May this year, 03 months ago. But he still continues, proving this "yahapalanaya" is not what it means in Sinhala language. And Ajith P actually says by innuendo is this "yahapalana" government is not only in serious conflict between the UNP and Sirisena's SLFP bloc, but also within his own party, the UNP.

With such amateurish politics, that cannot even match the "political authority" (not meaning the almighty power wielded over State officials) Rajapaksa had over the SLFP and over the State as President, this "yahapalana" unity government is not seen and perceived in society as one that can make the State run the way it wants. It is also perceived as one that has no vision and development programme of its own. It is a fact that it runs on everything borrowed from the Rajapaksas and is wholly stuck with China, more than even Rajapaksa.   

In such socio economic and political context, the government is unable to contain any of the conflicts erupting as anti "yahapalanaya" campaign. It has allowed the anti SAITM protests to take to streets, every time more rebellious than the previous time. The government is being cowed down by the GMOA that cannot even launch a token strike with half the medical doctors in public service. Having declared fuel distribution an essential service, use of goons and security forces to crush the petroleum workers' strike, pushed some of the trade unions that were "anti Rajapaksa" to go "anti yahapalanaya".

With clear signs of social de stabilising and serious loss of faith in the "yahapalana" government, this society is once again looking at Rajapaksa as the next possible leader to form a government. They talk of different scenarios in how Rajapaksa could come to power. Most practical presumption is that Rajapaksa would change the equation in parliament with a few cross overs from the UNP, as the bond scam investigations implicate more in the UNP leadership.

Yet the sad fact is, this Sinhala society has no real, viable alternative to replace this "yahapalana" rule. It has never been working on political alternatives based on a programme. Alternatives have always been personality based and political party alliance based. During this 40 year neo liberal economy as the bond scam now exposes, both political parties and their leaderships are equally corrupt. Both political parties are driven by crony capitalism drowned in black money as much as the media is. This society, especially the urban middle class and its professionals from medical doctors to the legal profession, including Accountants, Academics and Engineers are part of the problem. They don't need an alternative to this free market, in which they can also earn as much as they wish. They therefore cry for changes that are only cosmetic and short term.

In short, these professionals cannot contribute to break out of the intellectual poverty the society lives with. They thus leave Rajapaksa as the next option, where most now keep saying, "Rajapaksa robbed while doing some work. But this government robs not doing anything for the people".

The crisis that this society is gradually sinking into, even if there is no change of government immediately will not provide any serious and worthy alternative at the next elections, two or three years later, if we survive that long without much anarchy, but joking about all what has to be seriously discoursed.

Kusal Perera
Colombo

2017 August 06    

          40 years of Neo Liberalism ! A long wait for "real change"        

 This is termed open market economics. Neo liberalism. In this the rural folk, that's 70.4 per cent of the population of this country, Sinhala, Tamil and Muslims all included, live outside the main market. They live in a peripheral, slow moving and almost stagnant market. They don't have the "buying power" the extra rupee, to be of any worth in a busy and brisk consumer society, driven by investments for big profits. Buying power in this consumer society is not that of the poor who "buy to live". To exist. But buying power is that extra heavy spending, done for the extra comfort in topping up a comfortable life.

For the past 40 years, we are living in that neo liberal economy. An economy that introduced export manufacture in place of manufacture for import substitution. Thus the free market economy changed the economy from primarily servicing local needs to that of manufacturing to the global market. The "choice" in this very liberal economy was left for the individual.

In this free market economy, freedom of "choice" is not only for the individual consumer to spend his or her income on his or her choice, but it is fundamentally for the investor businessman to choose where his investments should go for bigger profits. No investor would dump money on productions or services in a market with little cash flow. Given the choice, apart from exporting to the global market, they would serve the rich city markets. Consumer thinking is fashioned by heavy advertising in this free market for increased demand of products and services the businesses invest in.

Skylines and road facades say it all. In Colombo, tall high rise buildings for commercial offices, mushrooming condominiums and apartment housing, large shopping malls with designer wear, expensive restaurants with Manchurian to Rajasthani, to Mongolian to Spanish and Western cuisine, departmental store chains, modern private hospitals with medical care, well equipped gyms for exercising, toll levying car parks and well laid out large walking and cycling paths for the health conscious with cafeterias and benches for resting shows the economic growth of a free market economy. Neo liberalism is all about matching the buying power (demand) of the growing urban middle class and the small super rich with that of "supply". The expanding Colombo city is everything symbolic about the modern culture of lavish spending consumerism.

This visual image and the feel of fast moving life of consumerism is totally absent in Moneragala or Hambantota. In Polonnaruwa or Kegalle. There isn't a rich middle class that can generate profits for such investments in these rural societies. There is no purpose therefore to invest in designer wear shopping outlets in Monergala. No purpose in opening up high end restaurants in Hambantota. In heavy investments going to Polonnaruwa for modern private hospitals, despite medical data on increasing CKDu (Chronic Kidney Disease of uncertain aetiology) patients.

It's not just cash flow economics and profits that define neo liberal economics. It’s the marginalising of rural life, the neglect of once State funded priority services like education, health and transport that defines neo liberalism. It is also the ideology of neo liberal market economics that sustains neo liberal markets. The right for the individual to decide what he or she would want in life and in the market. The ideology that turns consumer choice into "democracy" and "freedom" that justifies continuing free and open markets.

Yet within that democracy, within that freedom, no government can plan for sustainable economic growth, equal opportunities and access to social development. Responsibility of planning nationally in a free market economy is about planning to attract more and more "investors for export promotion". This formula is still being chanted as the God given "Mantra" for development. Within this planning, governments don't plan for quality improvement of healthcare, of education, of commuter transport, or even for efficient public administration. The logic of a free market economy is that, the consumer decides what he or she wants and that not only decides supply, but also the quality. The government therefore steps in to create the environment for investor promotion.

During the last 40 years Sri Lanka was taken on this route to an elusive world of "development". Along this route implementing of labour laws were seen to be gradually relaxing. Amendments to industrial laws and also laws for easy access and ownership of land were being drafted and enacted. Common parlance was "business friendly" for economic growth. It meant labour rights should not be emphasised in export manufacture industry. With such guarantees by successive governments, investors who came to collaborate with local businesses for export manufacture, were legally allowed untold and unaudited benefits and profits at the expense of public income. What they earned during their operations here and what the people had to forego as tax and duty incomes have never been assessed. In terms of loss to the people on foregone taxes and duty levies, it could well be over a couple of trillions of rupees.

The neo liberal economic model for development has thus left many issues that wouldn't ever be resolved within an increasingly liberalised market economy, the type Wickramasinghe leadership in this government is desperately pushing for. This model has resulted in the richest 20 per cent of the population accruing 52.9 per cent of the national income while the 20 per cent at the bottom is left with only 4.5 per cent by 2013, according to the Central Bank of SL Annual Report of 2016. The report also says in 2014, the GDP per capita according to provinces had been Rs. 428,212 in Uva, Rs.360,876 in Sabaragamuwa and Rs.417,225 in North Central province while in Western province it had been almost two fold with Rs.734,094.

This suffocating disparity has left its mark on education, health, public transport and on cultural life of the rural poor. In Uva 6.5 per cent had no schooling. In Central province it is 5.2 per cent and 4.5 per cent in Sabaragamuwa (CBSL Annual Report of 2016). While in Colombo district there are 185 medical doctors for 100,000 population, Kalutara, Kegalle, Puttlam, Ratnapura, Moneragala and Mullaitivu all have medical doctors between 50 and 60. Nuwara eliya the lowest is with 38 doctors. So is the disparity in distribution of trained nurses (Annual Health Bulletin – 2014).

These major disparities have been growing at different rates over 40 years, instead of narrowing. A proven fact, this neo liberal economic model under any government can only keep increasing inequality and disparities in society. It is on top of all these social injustice that mega corruption in the political establishment, serious lapses in maintaining law and order, corruption and inefficiency in the bureaucracy is dumped on. It is on top of all these that Sinhala extremism against minorities is dumped on. The BBS boss Gnanasara who reports to Court he is in hospital is still free while there are 04 special police units deployed to arrest him for racial violence and hate speech. Ethno religious polarisation is part of neo liberalism in developing countries. Including India under Narendra Modi and South Asia too.

After the 2008 meltdown of the global neo liberal economy, efforts by the US and British to prop up their economies by bailing out big business with public funds, the lower middle and working class population and the marginalised groups came out to register their disgust and frustration in neo liberalism. They now seek a way out for safer and secure economic life. Sanders in the US and Corbyn in the UK are clear projections of this growing political dissatisfaction, articulating deviations from the free market economy.

That remains true for all and Sri Lanka too. We need to find an alternative to this free market economy that cannot provide answers for any of the socio economic and cultural issues demanding answers within "development" the free market has failed to achieve.

What could that alternate model be? The Soviet type "socialism" for sure is no answer. A closed market economy as in 1970-77 in SL will not be an answer too. A way out would be to,
1.      have a carefully regulated open market that will not turn citizens into robot like consumers, in an atomised society
2.      plan and reform education, health and commuter transport with greater responsibility held with the State
3.      shift investments to planned and identified economic sectors with strict conditions laid down for employment and safeguards on employee rights
4.      restructure lower tiers of elected representative bodies like local government and provincial councils as participatory democratic organs of governance
5.      ensure public policy making is open and participatory within a socially discoursed and adopted national development plan that includes short and long term programmes and proposals

All or most of these would need a new Constitution dialogued in society, consented to and approved by the people. It needs before all things else, a serious social dialogue to identify what people want as development. That dialogue will not be to the liking of mainstream political parties that are entrenched in big business, profiting from this free market economy. That is also not possible with corroded thinking in the much splintered "Left" that remains without attraction and without democratic organisational structures to facilitate such dialogue. Thus without intellectual resources too.

Thus the question is, where and how could this begin. It can only begin with dissenting voices outside traditional social and political organisations and in urban society. From among the more matured in the new generation.

Kusal Perera

09 June, 2017 

          Year 2017 for Sri Lanka ; Reading outside Astrology         

Photo coutesy - Economynext.com
Year 2017 dawns with all arrangements including a week for "reconciliation" put in place to celebrate two years of Maithripala Sirisena presidency and Wickramasinghe government, beginning from 09 January 2015. More precisely, it would be 02 years celebrated for ousting the Rajapaksas. UNP on its own was conceded as no strong contender to floor Rajapaksa. Wickramasinghe thus agreed on Sirisena as the Common Candidate to defeat Rajapaksa. Ousting Rajapaksa is all what the Colombo "civil society" owners too wanted. They still cry proud not about them winning but about them defeating Rajapaksa. Everything else is unimportant for them even now.

Two Years Spent

From there, drawing up a brief profile of this government's 02 year performance begins with leaders of this government exposed as totally incapable of reading the global economy, "post 2008". They expected the West to fund their projects as soon as they came to power. No funds coming from West, they ended up at the doorsteps of China. They are also far more untidy and corrupt than the Rajapaksas. Already they have 47 cabinet ministers plus another 45 Sate and Deputy ministers on tax payer funds. In just 18 months they have at least 07 mega corruptions including 02 bond scams as against 03 such mega deals during the first 36 months of Rajapaksa.

The government failed miserably in annual budgeting, 02 years for now. The 2016 budget was cut, chopped, axed and sawed from day one. So is this 2017 budget. It ran into public protests immediately. Different and contradictory interpretations were given to proposals by the Finance Minister himself. President promised protesting bus owners he would amend budget proposals, least concerned about revenue and expensiture.

Having failed in smuggling a VAT without informing parliament, the government blundered again in getting a proper bill in parliament to levy the VAT. On finance and monetary policies and management, this government is pretty amateurish. Within an year PM made 02 statements on economic policy and strategy. Yet budgets don't reflect any policy nor does what President proposes and implements under him.

The most shameless betrayal by this government is on reconciliation and in letting down Tamils and Muslims. The North and the East have not been out of the "Rajapaksa grip", 02 years after January 2015.

With all those messing up come efforts to bully and intimidate media. The PM publicly threatened and coerced media many a times demanding media "fall in line" with the government. These were no isolated threats to democratic life. This government proposed amendments and bills that are more draconian and tyrannical than what the Rajapaksas passed.

With them the year 2017

Two major issues that have been dragged along for two years post January 2015, await reasonable and justifiable answers at least in the year 2017. The IOSL Resolution 30/1 demands more serious attention than it had in 2016. Tamil political demands and war related issues tinkered around with no political will to address them needs no more delaying. On the economic front, "national development" must go beyond urban economic gains. Rural economy should be able to retain youth with space for viable economic life. That is what's necessary. But what's in store for the North-East Tamils and Muslims and for the majority rural Sinhala poor in 2017, under this famously labelled "Yahapalanaya"?

The "reconciliation week" proposed by President Sirisena to mark his 02 year presidency is a publicity gimmick that wouldn't fool the Tamil people. A president who clubs the Ministry of Buddhism with the Ministry of Justice in Sri Lanka, is one who is wholly ignorant of the conflicting ethno religious mind sets in this war battered society. It is also chaotic to leave these two conflicting ministries in the wrong hands too. But he has done just that. A president who cannot instruct the Justice Minister to unconditionally release all Tamil youth detained without charges for many long years, can only talk of reconciliation for publicity. A president who patronises extremely racist and violent Buddhist monks nurtured by the Rajapaksas and should be arrested for openly inciting racial and religious hatred, is frighteningly dangerous to pin hopes on. A government led by such confirmed Sinhala leaders will not leave any hope for the Tamils and Muslims in 2017.

This government shows no deviation from the Rajapaksas to believe they could be better in 2017. Torture continues with impunity proving the government is incapable of disciplining the law enforcement agencies. It refuses to admit the judiciary as a system is ethnically bias. Even before the verdict on the murder of former MP Raviraj raised serious concerns, the judicial process was proved bias against Tamil victims and when indicting security forces personnel, President Sirisena vows to defend as "war heroes". The case on the mass murder of 24 Tamil villagers including 12 women and 07 children of Kumarapuram in Trincomalee exposed the judiciary's racial bias. The Kumarapuram case was transferred from Muttur to Anuradhapura High Courts after a long lapse. Transfer to Anuradhapura allowed for a Sinhala jury. All accused were identified by victims as those who committed the crimes. In July 2016, the Sinhala Jury nevertheless decided all suspects as innocent.

With 03 PC elections and the unjustifiably postponed island wide LG elections to come in 2017, this Sinhala political trend is destined to take a more aggressive leap. Desperate in grabbing control of the SLFP, President Sirisena is seen collecting Sinhala extremism around him with Rajapaksa making loud promises to the Sinhala constituency. That competition to be more Sinhala than Rajapaksa has prompted the government to leave the OMP bill adopted in parliament in cold storage. The new draft Constitution the TNA wants with more power sharing than in the 13A and genuine reconciliation would thus be a far cry in 2017 under this government. 

Reconciliation limited to rhetoric, a "corruption free" rule and "national development" in 2017 will not be the fate of the people. Frantic haste in bringing investments into this crude neo liberal economy will certainly ensure mega corruption. "Development" promised by this government is now exclusively Chinese and Indian. This free market model with direct Chinese investments and designed for profits with economic growth, will have to allow Chinese labour in massive numbers into the country.

Already there is an unaccounted number of Indian, Bangladeshi, Pakistani and Chinese labour on "tourist visa" employed in factories. Agreements with China on Hambantota industrial zone and Chinese invested FTZ will involve large scale Chinese labour, more than what the government would publicly accept. Indian sponsored investments would be no different. All of it could even compel the government to amend the Immigration and Emigration Act to accommodate foreign labour legally. Export industry had been canvassing for the right to import labour, even during the Rajapaksa era. Initial protests by the Rajapaksas therefore will only be publicity stunts. These after all, are extensions of their own projects.

For its own survival and in serving its own financiers, these mega investor projects would need arrogant implementation, ignoring protests and disregarding existing laws. Most mega projects including the redesigned Colombo Port City, pays no response to continued public protests and scant respect for environmental concerns, totally disregarding coastal zone management plans. 2017 will see an acceleration of all such arrogance.

There naturally will be public protests against land grabbing and environmental issues with large extent of land acquired, displacing people. There will also be brewing unrest and protests within employed labour too. Trade unions don't seem to understand the crisis they'll be dragged into in 2017. Sri Lanka will have to have carved out large zones with Chinese and South Indian labour, with no labour laws applicable to them. Not even to the extent they are presently applied in already existing FTZs. A condition the government will have to agree to, when big Chinese and Indian investments are canvassed. That certainly will have a viral effect. Other investors will also want the right for same relaxed conditions applied in their factories too. The reading is already on the wall. The employer thrust even now is in union busting especially in the Katunayake FTZ. Key players in the government seem to be bidding time, to give the nod for a complete go. Trade unions will have a turbulent year ahead.

The rabidly free economy the government is obsessed with, demands the State to facilitate arrogant and repressive rule in 2017. The role of this repressive State is being defined by draft bills, the government has in its hands. The draft "Development (Special Provisions) Bill" that was rejected by PCs but would be brought up in February 2017, together with the draft "Counter Terrorism Bill" to replace the existing PTA, spells out how much centralising the government wants in canvassing Chinese and Indian investment and how repressive the government intends to be, in its effort to crush all inevitable protests.

Thus 2017 will be a year that would test the ability of this "two part" government to stay together. Shameless and morally unacceptable greasing of MPs with numerous packages and privileges are legal bribes to hold the government together for wheeler dealer projects. That while disappointing and leaving Tamils and Muslims in a further polarised Sri Lanka. It would also be a year the government replicates few more "Rathupaswelas" and workers' could taste from the Hambantota port "menu". PM thanking Navy action at the Hambantota port, says it all.

Kusal Perera

27 December 2016 

          Looking for Alternatives with "Left" left out         
1970 LSSP May Day Courtesy CDN
















When independence was granted to Ceylon, the alternative to the United National Party (UNP) at the 1947 parliamentary election was the Lanka Sama Samaja Party (LSSP). In that first parliamentary election the Ceylon National Congress which merged with the Sinhala Maha Sabhava (SMS) to form the UNP led by D.S. Senanayake, could not have a clear majority. In a parliament of 101 MPs with 95 elected, UNP managed only 42 seats. They coalesced with the All Ceylon Tamil Congress (ACTC) that had 07 seats, to have a majority government.

The leading opposition was the LSSP. Contesting as two opposing Trotskyite factions, the LSSP and the Bolshevik Leninist Party of India (BLPI) won 10 and 05 seats respectively. They re-united after elections as the LSSP with Dr. N.M. Perera becoming the first Opposition Leader of independent Ceylon. If not for another division in the LSSP and Philip Gunawardne forming his own LSSP-V (Viplavakari meaning revolutionary) and contesting with the CP, the LSSP would have been yet again the main opposition at the 1952 elections as well. The LSSP was the only Trotskyite mass party in the world, with a very strong urban trade union base, influential and much respected Buddhist monks, middle class intellectuals and the few "Rationalists" also sympathising with their alternate political thinking.

Ideologically, it was the LSSP dominated "Left" that provided opposition to the UNP while the SLFP played a very Sinhala nationalist role sticking to a more State centred, undefined "middle path". Thus in very simple political terms, the "Left", more the LSSP, was the known and seen "anti UNP" force that stood for a "socialist" alternative. Though without the "socialist" alternative, even during the Rajapaksa rule the LSSP and the CP used their historical "anti UNP" position to co-habit with Rajapaksa. After the 18 Amendment to the Constitution, the dissenting factions within the LSSP and the CP refused to leave the Rajapaksa government on the single argument, "that would only strengthen the UNP".

Over a week ago, the dissenting group in the LSSP calling themselves the "majority group", celebrated 81 years of "Samasamaja" politics. Ironically this faction is led by the UNP national list MP Dr. Jayampathy Wickramaratne. Presently an Advisor to the UNP leader and PM Wickramasinghe.  So is it with the dissenters from the CP. A leading CP dissenter Raja Uswetakeiyawa was in the National list of the UNP at the last August 2015 parliamentary elections.

How would one explain this total collapse and political demise of the anti UNP "Left" in Sri Lanka? Most would attribute this to "coalition" politics of the old "Left". "Tailing the SLFP" from early 1960's to have it in simple language. But then, there was a serious "anti coalition" faction within the LSSP in mid 1970's that eventually became the "Nava Samasmaja Party"(NSSP) when the "Left" got wiped out completely at the 1977 parliamentary election. In less than a decade, that "anti-coalition" left Samasamajism as the NSSP also disintegrated, unable to meet the intellectual challenge of providing an alternative to the UNP and the SLFP. The JVP, about a decade older to the NSSP was never able to project itself as a political alternative to UNP-SLFP politics that's now in a "unity" government.

Coalition politics apart, this demise of the "Left" is not just a local "Sri Lankan crash". Internationally, the "Marxists" in all their shades and diversity has failed to grasp the growth, slump, recovery, stability, meltdown and instability" of global capitalism. They have thus not been able to provide a viable alternative when global capitalism slumped in 1929, in 1976 and again in 2008. Not been able to provide an alternative to the world even with the two giant Communist Party led countries, Soviet Russia and China with other East European countries. They together governed over 30% of the world population of around 06 billion by 1988. Though revolutions dislodged despotic rulers from Cuba to Vietnam to Nicaragua, none survived to establish an alternative to neo liberalism. From Soviet Russia to China including the Eastern bloc and Vietnam, the whole "Socialist" world caved in, leaving one large neo liberal global economy controlling the lives of the world Citizenry. The odd one out is North Korea, under a militarily organised despotic regime.  

The issue therefore is the failure of the "Left" in defining "socio economic development" within neo liberalism. The "free" market in Sri Lanka was ushered in at a time, the whole society was tired and exhausted within a heavily regulated State controlled economy. An economy that substituted imports with local production for "self sufficiency". The regulated "Development" was aimed at servicing basic needs in controlled "quantities".  

From 1978 these State controls were removed to allow for free trade. This economy was a polar opposite to the previous "import substituted" regulated economy. This worked on the premise, foreign direct investment (FDI) in export oriented production will generate economic growth with a "trickle down" effect. The market was given its own freedom for investment. Flooded with "choices" for people to choose from, they felt they had unlimited "freedom" in this free market economy. The new found consumer "freedom" was what the "Left" could not explain in terms of "development and democracy".

The "Left" anyway was very much trained in reading society and life in economic terms. "Cultural life" was not important in their political explanations. They therefore did not notice  neo liberalism wiping out intellectual cultural life in moulding a narrow, linear "consumer". People were made to slog through whole day to earn enough to buy their basket of daily goodies. Yet the fact that they decided their basket, gave "democracy and freedom" a new meaning within a consumer society. Democracy and freedom came to be substituted by "consumer choice", a way of life the "left" could not deconstruct to reconstruct a new alternative.

In such social context, the Western intelligentsia, all institutes funded by Western powers including the UN agencies were trained and groomed to doctor effects of the free market economy. A new liberal intelligentsia thereafter justified neo liberalism as the model for economic growth and equated economic growth to "socio economic development". Economic growth came to be assessed in terms of GDP, per capita income, millennium development goals (MDG) and the like.

Indices and data calculated for assessing economic performance, often contradict the very "growth" claimed by liberal economists and politicians. When Census and Statistics Department says the required average monthly income of a family of four to meet basic needs (excluding a cultural life) is Rs.40,000 plus, the poverty line is drawn at Rs.4,000 per month per person. While the per capita income is calculated at 4,000 dollars (Rs.50,000 per month), the national minimum wage remains at a low of Rs.13,500 for the private sector. The argument goes it is the "take home pay" that should be counted. The "take home pay" for female workers in export manufacture is not more than Rs.20,000 with all the overtime they are compelled to do and their other incentives all added.

Neo liberalism is only an urban market phenomenon and has no relevance to "national development". Neo liberal economies are inherently corrupt too irrespective of what the electoral system is. In India it is "FPP" while ours is a PR system. Over 35 years after their economy was liberalised, the Indian Lok Sabha does not represent the poor any more. 430 out of its 534 MPs are "Crorepatis". As a rule, all governments have garbage loads of mega deals on their backs. Corruption itself is urban based leading to declared and undeclared wealth accumulation in mega cities. PM Narendra Modi's development thus promised 50 "smart cities". PM Wickramasinghe promises a Western Province based "Megapolis".  Inaugurating this Megapolis programme he confirmed this mega urban development would lift the rest of the country in "development".

The actual crisis in this neo liberal economy is that State agencies and social structures don't function the way they should, as the State is only left to facilitate investments and markets. Sans intellectual and cultural life, it turns societies into one without social values and morals. In a single line, the neo liberal market denies democracy in its functional form in a society that loses the "collective" mind set where intellectual cultural life is replaced with "entertainment" in competitive urban consumerism.

As Noam Chomsky says, "This, to go back to our original discussion, is a reflection, substantially, of the Neo Liberal policies of the past generation. It has harmed much of the population, offered nothing to them, given power and prestige to extreme wealth and professional elites who are protected." (DM interview – December 14)

This certainly needs an alternative that could attract the "marginalised and cast aside" majority. The heavily fragmented "Left" and also the JVP have no intellectual resources even to ignite such discourse. They are also products of this 38 year old neo liberal market that leaves them aside as grumbling "Left liberals" living within this status quo.

As Chomsky asked the DM, "Well, why did an overwhelming majority of young people support Bernie Sanders?" Sanders is a "new phenomenon" way outside traditional "left" politics and attracted young people. "They don’t have wealth, military power, corporate backing, media backing, nor support from intellectuals; but sure, they are challenging the status quo." Finding an alternate programme therefore falls on the shoulders of the new generation who would want to challenge the status quo for a more democratic and decent life.

Kusal Perera
2016 December 19



          From Rajapaksa to Bond Scam; Clean up Political Parties First         

Much is written about Arjuna Mahendran and the "Bond scam". This is only the first Bond scam that is talked of while the second needs investigations. In any other decent, democratic society, that would have demanded for a "Ranexit". Not here in this "most noble country" on planet earth. In fact Bond deals are not the only shady deals taking place under "Yahapalanaya" and Arjuna Mahendran is not the only man under the clouds to be in the dock, IF, let me stress, if investigations are carried out impartially, efficiently and effectively.

Most other mega corruptions tend to go unnoticed or quietly dropped, as "Yahapalana hurrah boys" in Colombo circles don't wish to make it "uneasy" for Wickramasinghe, they are comfortable with. That was precisely the logic with three respectable good governance activists who went to the Supreme Court in March, 2015 with a fundamental rights petition on the February 2015 Bond deal, the first of the two. They refrained from petitioning the SC on a fraud in the bond deal. Instead petitioned the SC to direct the Monetary Board to have stricter procedures, rules and regulations in place, for transparency and good governance. Their reluctance to call the spade a spade in order to avoid embarrassing their government, saw the FR petition being rejected. Worst, it gave Arjuna Mahendran and the Wickramasinghe government a chance to say, the SC has ruled him as "clean". Far worse, it gave the Finance Ministry and the Central Bank enough confidence to go for another Bond deal in March this year that too needs to be investigated.

With that, if one dares to compare the first 02 years of Rajapaksa rule with this "Yahapalana" government's 22 months since January 2015, everything stinks to the bones. The first 02 to 03 years or even up to the conclusion of the war in 2009 May, Rajapaksa corruption was in line with that under Chandrika Kumaratunge's presidency. Chandrika era was no clean and there were serious allegations, some proved and some not that prompted editor/journalist Victor Ivan to chronicle her as a "Bandit Queen". That was corruption that kept growing since the "open" economy was introduced in 1978. Premadasa era had more allegations on corruptions than in the Jayawardne era. Kumaratunge era that began by promising a "human face" to the free market economy surpassed the Premadasa era in terms of big corruption. Rajapaksa continued with that in the first few years. The only mega deal reported during the first 02 years was that on Mig air craft purchases, which Lasantha Wickramatunge investigated and perhaps fell victim to. Taking over from Rajapaksa, this Wickramasinghe led "Yahapalana" government has a long list that goes without attention and with no loud cry for investigations.

A week ago, a letter written by Finance Minister Ravi Karunanayake to the Central Bank (CB) Governor Coomaraswamy went viral. He had requested a special favour for Minister Sarath Fonseka's son in law in granting the security contract advertised by the CB. That drove a chill deep down the Colombo middle class. It provoked the loud retort "OMG! When will this stop?" by a well respected legal expert who had a copy of that letter in her "in-box". Yes, when will it stop? For sure, it will NOT stop, unless it is made to stop with determination, by the society. The question is, where and how could it begin?

Let's be honest and be bold enough to own up that we keep voting political parties to power that are wholly corrupt and undemocratic without ever questioning their bona fide. Let's face the truth, we keep changing governments between political parties that can never be democratic and clean. No leader is interested in having clean and independent men and women in their party organisations. Political parties are run with State patronage if in power, or with funding from wheeler dealers when in opposition. Irrespective of political colour and rhetoric, all political leaders and their selected henchmen use political power in bargaining stakes from all State sponsored projects when in government. This free and open market economy is run on such greasy deals and cannot be run in any other way, whoever comes to power.

Instead of holding political leaders responsible for corruption, Colombo 'pundits' argued the "preference" vote in the PR election system is what corrupted politics. In the old "first past the post" (FPP) electoral system, they argued, the elected MP was held responsible to the constituency and therefore was not easily induced to corruption. Indian parliamentary and State government elections since opening up the economy prove this argument totally wrong. India still continues with the FPP system. At the last parliamentary elections held in 2014 when BJP was elected to power with Modi as PM, the Indians elected a Lok Sabha with 186 MPs having criminal cases against them says a New Delhi based research cum lobby group, "Association for Democratic Reforms" (ADR). This is an increase from 154 elected MPs with criminal cases in the previous parliament. Of the present lot in Lok Sabha, 112 have serious crimes with charges for murder, attempted murder, abductions, extortions and crimes against women. 16 of them are booked for crimes on racial hatred and incitement. From among the elected ruling party BJP number, 63 MPs have cases against them for crimes committed. These crimes are all within an extremely corrupt political party system.

That speaks enough for the FPP electoral system. That also says, it is not the electoral system which actually leads to heavy corruptions and crimes. It is the unrestricted market economy which allows unlimited accumulation of wealth no matter how they are accrued, that leads to heavy corruption often tied to crimes.

In this free market economy, it is common knowledge but goes without any questioning how political parties spend billions of rupees for their election campaigning even when in the opposition. There were also public statements that claimed some candidates at the last parliamentary elections spent over 02 billion rupees for election campaigning. Numbers being true or not, there was nevertheless huge unaccounted for money spent for election campaigning. Fact remains, these campaign funds go without any public accounting and scrutiny.

It must therefore be stressed, the free market economy is a vulgar adaptation for unaccounted for mega profits earned by any means. In all countries it carries with it the duality of doing business with public funds and pocketing profits privately. This requires government patronage for investments in private business within a free market defined as "development". All heavy construction earmarked as projects for development are thus State funded. Governments borrow big money through bi lateral and multi lateral agreements signed with foreign funding agencies and foreign governments to invest in mega "construction centric" development. They are given out to the private sector with ballooned profits on sharing basis. For the private sector to gain such profits, they cultivate political patronage. That is the basis of "mega corruption". The requirement of "political decisions" and the ability to "buy" those decisions.

This dynamics of the free market economy, over the decades since 1978 have turned out "political businessmen" who now control party politics either from inside or from outside. All that has changed the social value system too. Mega corruption now works through political parties and go without questioning. We therefore now have a different politician who needs more power and more access to funds and unlimited material wealth. To be that s/he as candidates spend massive amounts of money during elections the voter knows not, from where they come. In fact now, political party leaders pitching in for State power prefers to cultivate men and women who can spend big money at elections as candidates to win enough numbers to form a government.

We have thus reached a state of affairs, where corruption cannot be checked through mechanisms that do not bring political parties and politicians to account publicly for their election funds. We need to demand from the Election Commission to propose necessary amendments without ambiguity to the Assets & Liabilities Act to have annual declaration of assets of all elected politicians mandatory. A new unambiguous law to compel all political parties to publicly declare their election funds with details of sources too, at all elections. Or else, COPE would only be a one off publicity issue, with unending mega corruption continuing unabated under "Yahapalanaya" too. In short, no government would be clean when political parties are heaped with garbage.

[Unedited version of the same article that appears in the DM today/04.11.2016]

Kusal Perera
02 November, 2016

          A Manifesto for a Dignified Democratic Sri Lanka         

We Sri Lankans are truly in a big crisis. A crisis that we don't pay attention to in detail but a crisis that demands alternate answers to resurrect the State. A crisis that demands alternate answers for socio economic development in the same breath. Alternate answers for democratising of society as well. The January 08 presidential election that ousted Rajapaksa from presidency in no way provided answers to that crisis. It’s a misnomer to say we achieved "change". A "change" there was none. It was only a replacement of personalities to head a heavily politicised, corrupt and an inefficient State left by Rajapaksa rule that was achieved. A new hybrid and incompetent government that lacks commitment and capacity to understand the depth of the crisis and incapable of planning and implementing socio economic development is all that remains.

The crisis is many faceted and is deepening. From Ministry Secretaries, department heads to District Secretaries and down to Grama Seva Niladharies, the whole State administration is politicised at every level. Politicisation has led to corruption and inefficiency too. So is law enforcement and rule of law. Police department undoubtedly needs serious reforms to have it as a civil department with public acceptance and trust. Interpreting re- establishment of "independence of the judiciary" in terms of replacing a politically appointed Chief Justice through an equally flawed process, was nowhere near an answer to the actual issues that weigh in on the judiciary. Independence of the judiciary needs to be discussed in the context of efficiency and a clean judiciary. Socio economic development has been left within a free market economy leading to heavy corruption, growing disparities between urban and rural life and eroding of quality of life too. All important services are left dwindling and in apathy.

To have Independent Commissions to pull the State apparatus out of the rut serves no purpose. They don't have a mandate to turn around State agencies to some civility and would therefore have to sit on top of a corrupt, inefficient and a lethargic State. Over time, the commissions would even lose the credibility they started with.

Democracy is merely procedural. Political parties know nothing about democracy and are in the grips of wheeler dealer schemers. These political parties have no genuine discipline and the corrupt in them continue without any hindrance. Such political parties don't spend time in developing principle positions on important issues, but work on cheap, populist slogans instead. One major reason the Tamil national question remains unresolved this long is because of this neglect of political discipline and responsibility in political leaderships. Elections to all representative bodies thus have little relevance to functional democracy and people's sovereignty. To expect these political parties to lead major reforms therefore can never have any worthy response in an ailing society.

That deep and complex is the crisis we are living in. It therefore demands a very serious and holistic intervention on a full canvass than on segmented carpets. It demands society to seriously and intellectually focus on,
1.     1)  re defining "socio economic development" this country would need in decades to come
2.     2) re structuring of State power that allows for greater democracy to people in the provinces

01.     Socio economic development

We have been stuck in a free market economy for almost 04 decades since 1978. The free market economy is based on the concept of market freedom without State interventions. The role of the government thus is to facilitate such a market with less and less State interventions, leaving little or no restrictions on trade, internal and external. Within this free market economy, the liberty to roam for employment and income generation and to decide and choose his or her basket of goodies came to be accepted as freedom and democracy. "Development" came to be explained in that context of market access and consumer freedom within "economic growth".

Economic growth was left dependent on "investor interests". Creation of "export promotion zones" and the establishment of the BOI-SL was emphasised with exclusive powers in some areas overriding even labour laws and labour rights, in promoting investments for an export oriented economy. While it is taken for granted export oriented manufacture with foreign direct investments (FDI) has helped economic growth, there has been no survey or study on "cost against benefits" for people on billions of public monies spent annually over 38 year for special infrastructure, tax holidays, tax concessions, tax waivers and even subsidised electricity provided by the State for these investor projects.

In practical life, this investor driven "development" over 03 decades has not helped answer any of the major issues. In reality the past 38 years of "free market development" has left a seriously ailing society. This ailing society with a larger urban middle class struggling to increase its purchasing power is being showcased as "development". The claim for poverty reduction is a crude game of numbers. In September (2016) the "poverty line" was drawn at Rs.4,038 per person per month. On that calculation Sri Lanka's poor was only 6.7 per cent and by virtue of an income over Rs.4,038 the rest of the population is not poor. These numbers prove how fake the claim on poverty reduction is. The 2012/2013 Household Income & Expenditure Survey by the Census & Statistics Department says an urban family of 04 needs a monthly income of Rs.58,930 for basic living while in rural society it is Rs.38,274 per month.

Over decades, this economic activity termed "development" has also created a growing disparity in distribution of wealth and income. In 2013 Colombo district household income at an average is Rs.77,723. It was far less than half at Rs.23,687 in Mullaitivu, Rs.30,643 in Kilinochchi almost 04 years after the war concluded and Rs.34,804 in Moneragala, Rs.35,004 in Matale and Rs.35,460 in Anuradhapura. It is not that the other districts are fare better. They remain around 45 to 55,000 rupees at an average compared to Colombo's 77,000 plus.

Within this disparity lie growing restrictions on access to health, education, public commuting, access to markets and cultural and intellectual life. Break down of moral and social values have to be accounted for, in such socio political and economic context. We thus have to re define "development" people need to have and enjoy. Development should not be "economic growth" in a market in which 20 per cent enjoy 52.6 per cent of the per capita income, leaving the majority with little or no access to basics. Development should gradually diminish these serious anomalies and disparities, while improving the standard and quality of life. "Quality of life", not only in terms of material improvement but also in terms of access to "cultural and intellectual life". It therefore means "development" should honour and create space for "cultural rights" and "right to culture" too.

Accepting such as "holistic development" we need to work on a "National Policy on Socio Economic Development". National policy that should include proposals for, (a) education (b) health (c) transport (d) national and rural economy (e) agriculture and (f) cultural life.

a.       a) Education reforms seriously thought and planned for pre, primary, secondary, tertiary and university and also post university higher education. Education should also have focus on cultural and secular life. The concept of "free education" should be defined in terms of marginalised, the poor and the less privileged, excluding the rich. Serious attention must be drawn on "adult education" reaching the provinces. Provisions for the teaching profession in service training and knowledge improvement/advancement is another that needs very serious attention.
b.      b) Health too needs an overall shaking up. All aspects of "curative health" has become commercialised and is now a very lucrative business with the medical profession holding a monopoly over human life. Curative health needs to have a strong referral system across the country whether State or private. The General Practitioner (GP) should always be the starting point. The role and responsibility of preventive health sector personnel should be given preference and expanded to include regular school based eye, dental and ENT clinics. The focus being to produce a healthy future generation.
c.       c) Public commuting should be given high preference over private commuting. Import of vehicles for personal and private use should be heavily restricted to ease growing traffic congestions that wastes time on the roads and burning of fuel on "dead mileage". City commuting should have efficient and economical linked services between rail and bus to reduce individual private vehicles entering cities. Schools should promote bicycles for which only pupils resident within 02 km should be enrolled to public schools.
d.      d) National economy should be "people driven" and not "investor" driven as at present. It should not be left on a free for all market with investor priority. National economy should be planned with a guarantee on a minimum national wage for decent work. The economy has to be regulated, though left within the global economy. Fundamental rule therefore should be a selective mix between import substitution and a total export based economy. Rural economy should be planned to have scope and space for youth to indulge in productive economic activities in their own area. An economy that would greatly reduce migration in search of employment to cities and the Mid East. An economy that would also ensure adequate green canopy in all cities, a minimum national forest cover area and a guarantee on wetland and coast conversation.
e.      e)  Agriculture will have to have a wholly different approach to subsidised farming. Total dependence on subsidised paddy farming in the dry zone not only leave agriculture labour idling for half the year, but also leaves large tracts of seasonally under utilised land. Complete neglect of post harvest technology for most agri products have denied stabilised market prices throughout the year with glut harvests leaving farmers at the mercy of middlemen exploiting seasonal over production.
f.       f) End of the day, socio economic development is about facilitating the development of a culturally and intellectually advanced Citizen. All development planning thus should include modern facilities in the provinces for different museums, modern and multi dimensional libraries, fully equipped auditoriums, theatre halls and also recreational centres and parks for both children and adults.   

02.     Re structuring of State power

The "challenge" is in how we could create an inclusive "State" that can bear the responsibility for such a broad and complex new approach for "development" that all Citizens can share and enjoy without anomalies and disparity. Experience though not discussed, is that we have during the past 68 years failed brutally in developing a multi cultural, multi ethnic modern society with a "centralised" State run on the Soulburry and the 02 Republican Constitutions.

With politics that compete on ethno-religious bias centralising the State as a "Sinhala" State, it was not only the Tamil society that was left out of socio economic and political activity, but also the majority of the Sinhala and Muslim communities. The wholly Sinhala Buddhist Moneragala district lags far behind as much as the war depleted North and East. So are largely Sinhala Buddhist districts like Hambantota, Anuradhapura and Kurunegala. Even in the rest of the districts outside Colombo, the Sinhala people have remained poor and deprived with wealth and income being the privilege of the Colombo urban life. By and large, the Sinhala (Buddhist/non Buddhist) rural society has always been left out of economic activity, access to political power and "development" within this free market economy that lived with centralising of State power.

·         Evolution of the "Unitary" State and Rural Sinhala Society

The Sri Lankan State was conceived, established and improved upon by the British over a period of about 130 years as a "Unitary" State after the 1815 Kandyan Accord. When Ceylon was handed over to its people as an independent and sovereign State, centralising was structured and firm, centred around Colombo. That centralised colonial State continued with the first Soulburry Constitution. Sinhala landed gentry backed by the Sinhala trader community and in political leadership, began establishing their power over the State by re fashioning the State into a Sinhala Unitary State. In the first parliament itself, they disfranchised and turned plantation Tamil labour into Stateless wage earners despite Article 29 of the Soulburry Constitution guaranteeing minority rights.

The political usurping of power continued in the hands of the urban Sinhala elite and the business community, further consolidating the Unitary State as a Sinhala State with Sinhala Language made the only official language in 1956. The first Republican Constitution in 1972 not only made certain the Unitary State remains further strengthened, but also written to foster Buddhist Sangha as a  privileged religious clergy (Chapter 02 Constitution 09 says Buddhism will be given the foremost place and guarantees that the State as a duty will protect and foster the Buddha Sasana, ie., the clergy). This allowed the Colombo centred government to directly patronise Buddhist monks who gained further political recognition in the Sinhala South.  

·         Unitary State and Rural Sinhala fate

History of this Colombo centred Sinhala Unitary State in Ceylon and Sri Lanka during 68 years of independence reveals how major efforts taken for "development" has left the rural Sinhala people marginalised despite the State being "Sinhala" and "Unitary". They clearly show the rural Sinhala society has not gained substantial benefit from any major funded project, nor done better than the Tamil and Muslim people in North and East. The phased out lists include -
·         1952 – Kandyan Peasantry Rehabilitation Commission turned into Udarata Development Authority in 2005 ; covers whole of Central Province, Kegalle district, part of Uva and part of North Central Province
·         1990 – Janasaviya Trust Fund thereafter turned into Samurdhi Authority and then to Divi neguma in 2013 ; constitutionally operational all island
·         1995 – Southern Development Authority (SDA) ; exclusively for Galle, Matara, Hambantota and Moneragala districts

Major colonisation schemes like Gal-oya, Uda-walava and Rajanganaya were carried out when Ceylon was under the Soulburry Constitution. There were also major development programmes in Sri Lanka with very heavy funding after the first and the second Republican Constitutions.
·         1972 Land Reforms and 1973 Nationalisation of Plantations
·         1978 onwards Mahaweli development in NCP and subsequently Uda-walawe
·         1978 Katunayake FTZ, 1986 Biyagama and 1991 Koggala EPZs
·         1986 to 1992 Samanala Oya project, North of Uda-walawe
·         1992 export oriented 200 garment factory expansion programme ; only 138 became operational

Meanwhile there were also foreign donor funded Integrated Rural Development Programmes (IRDPs) operational from 1978. All IRDPs were outside North and East. Designed under the Ministry of Planning and implemented through District Secretaries (earlier GAs) most of them went into double phase. Felt very much under-performing, from 1997 IRDPs were re designed as Rural Enterprise Advancement Programmes (REAP) and after a few years folded up.

Added to district development were money spent under the Decentralised Budgets; each of the 225 MPs given 35 million rupees every year till 2002 and since then 50 million every year. These have added school buildings at random, provided electricity to some villages and tarred side roads on political affiliations that adds some little decency to rural living. But much gone waste and into few pockets as well.  

·         Important reforms for democracy & development

What is important is that all the above "development" were under a "Unitary" Sinhala State, that planned and designed and implemented all those development work from Colombo. None of them have helped improve rural Sinhala life, the way they helped a Colombo based rich urban middle class and a new business community. In short, this centralised Sinhala State has not helped the larger majority of the Sinhala, Tamil and Muslim societies living in the provinces in qualitatively improving their lives with dignity.

It is important to learn from 68 years of misrule under a centralised Unitary State, unless democracy with people's participation is strengthened and ensured, "development" would remain the privilege of the Colombo centred urban life. Constitutional reforms therefore need to first accept that the sole purpose of a democratic Constitution is to, ensure "a fully contented life with dignity and peace with stability" (from proposal submitted by 'DecentLanka2015' to the Public Representations Committee on Constitutional Reforms).

Based on such assumption, it is necessary to ensure the Constitution making is process is a fully people based process, done in no hurry but with a time frame attached. The Constitution should thus include,
1.      1) Fundamental rights as ratified in the UN Human Rights Charter and the Core Conventions of the ILO with provisions to establish a national minimum wage commission that will equate the national poverty line with that of the minimum national wage.
2.      2) Citizens' right to culture and cultural rights has to be accepted as a fundamental right, while all religions should be declared as the right of citizens to practise either personally or collectively and foster through religious organisations and institutes without any linkages to the State. Thus all schools, public and private will not have any religion included in their school curricula by virtue of the Constitution.
3.      3) Constitution to provide for all registered political parties to declare annually, their audited income and expenditure sheet and declare publicly their election funds in detail with sources, at all elections.
4.      4) The Constitution will guarantee a minimum forestry cover over and above the existing forestry cover.

It is proposed to use the APRC Final Report (accessed here - http://www.groundviews.org/wp-content/uploads/July-20-APRC-Final-Report.pdf?x98647) as the main "discussion document" with the above and as expanded below.
5.      5) The structure of governance will be 03 tiered with elected representatives as at present and LG bodies provided with people's participation arranged through "Ward Committees" on annual budgeting and policy issues to strengthen democracy and accountability while proposing the APRC Final Report concept and proposal on power sharing between the Centre and the Provinces.

Kusal Perera

16 October, 2016

          Sirisena's Kurunegala SLFP Conference & Wickramasinghe        














The SLFP conference on September 04 is to be chaired by President Sirisena and is to be held in Kurunegala. The district Mahinda Rajapaksa chose to contest, leaving Hambantota to Chamal and Namal and the district Gotabhaya Rajapaksa was rumoured to enter politics from. This in a way is a challenge thrown at Rajapaksa's front door, after his Kandy-Colombo "foot march" proved foot soldiers of the SLFP would not accept President Sirisena as their authentic leader. Kurunegala is also the home district of Dayasiri Jayasekera. Crossing over to the SLFP under Rajapaksa in 2013 he polled a staggering 336,000 plus preference votes proving the Sinhala Buddhist voters rally with the SLFP than around UNP. President Sirisena and his small coterie of political aids are banking on this Sinhala Buddhist votes, to show they can also garner big support. A claim President Sirisena made after the Kandy-Colombo foot march by Rajapaksa. 

Focus thus is on what Mahinda Rajapaksa dissidents would make out of the SLFP conference. News reports claimed a fair percentage of local SLFP party men would keep away from the conference. General Secretary Duminda Dissanayake said the conference is open for all party men, organisers and MPs without restrictions. Officially invited to the conference, Mahinda Rajapaksa has opted to avoid any confrontation by leaving the country on a Malaysian tour. This is not a party conference that can constitutionally elect the next leadership. Yet it would be used to anoint President Sirisena as party leader. President Sirisena had no constitutional right to be even considered the party leader, leave alone appointing him leader. He wasn't the SLFP presidential candidate to qualify for that post. He contested against the SLFP candidate at the 2015 January presidential elections on the "Swan" symbol of the Democratic Party. He was accommodated as the SLFP leader purely on a very opportunistic move for the survival of the "corrupt". For some SLFP-UPFA parliamentarians to continue in a government that wasn't even elected by people. His hold on the SLFP therefore is decided by the power vested on him as President of the country and not as the rightful leader of the party. The crisis within the SLFP is thus about President Sirisena's legitimacy in party leadership.

For Mahinda Rajapaksa to part ways with the SLFP nevertheless is no easy task. Politically he was born and bred a clean and pure SLFPer. In stark contrast to Chandrika Kumaratunge and Sirisena, in his 48 year old political career first appointed organiser for Beliatte in 1968, he had never left the SLFP. Chandrika with Vijeya who was never a SLFP politician till marriage made him one, were the two who broke the SLFP in 1982 and formed the SLMP. They went on a completely different political path positioning themselves as totally opposed to the SLFP.

Almost 10 years after her defection, Chandrika's return to the SLFP was decided by the tragic death of Vijeya in 1988 February and the splits that ensued in the SLMP. She lost hold of the SLMP when Ossie Abeygoonasekera took the party and went away with President Premadasa. By 1990 she ended up with a tiny sect called the BNP that Rajitha Senaratne toiled day and night to keep afloat. Her political isolation thereafter prompted her to woe her ailing mother to provide her a political position within the SLFP. By then Mangala and S.B. Dissanayake who did not see Anura B as a good enough replacement for Madam B were scavenging for a new political face to lead the SLFP. Thus Chandrika's re-entry fitted into their scheme of resurrecting a squabbling SLFP.     

Mahinda's political life in the SLFP has been one with calculated risks that catapulted him into a national leader both within the SLFP and among the Sinhala Buddhists. On two occasions he resisted moves to split from the SLFP. First was when Anura B went away with Maithripala Senanayake to form a counter to the SLFP with Basil Rajapaksa made the General Secretary. Mahinda then opted to listen to the speeches made in the Anura-Maithripala rally in Tangalle, seated in the front veranda of his "Carlton" residence. Having come back to the SLFP with a promotion and a pardon from the all powerful mother, Anura's second departure from the SLFP was in 1993 to take oaths as Minister of Higher Education in President Wijetunge's cabinet. Mahinda was coaxed to join Thilak Karunaratne, Prof Kamal Karunanayake, Pradeep Hapangama and the rest who followed Anura into the UNP. Avoiding this group he made a statement to "Lankadeepa" 02 days later to pledge his loyalty to the ordinary SLFP members and to say on the faith he has in them, he would never leave the SLFP for any reason.

True to his words, his allegiance to the SLFP and his mass campaigns with "pada yathra" and "Jana Gosha" in 1992 propelled him into national leadership as a militant campaigner, Anura B defined as a "barricade fighter". That rallied around him a horizontally and a vertically fractured defunct party as an anti government force, giving him the right to claim SLFP leadership as one of the most senior members. He was also backed by Sinhala Buddhists who saw in him a "leader" of their choice. With Shiamopali Siyam nikaya honouring him as "Sri Rohana Jana Ranjana", an honour only Madam B was privileged with, Mahinda was the perfect fit for SLFP politics and its leadership.

Thus the SLFP is more a party for Mahinda types than for Maithripala Sirisena or Chandrika Kumaratunge. Both defectors. Both who betrayed the SLFP rank and file and its traditional voter base that is not only Sinhala Buddhist, but also "anti UNP". This was proved beyond doubt when Mahinda bore the total responsibility of campaigning for the SLFP against the UNP at the August (2015) parliamentary elections. Despite President Sirisena sacking party General Secretary, getting SC Orders to have the Central Committee defunct and his other disgusting manipulations including public statements that he would not allow the SLFP to form a government with Mahinda as PM on powers vested with him as Executive President, Mahinda brought home 95 seats for SLFP, as against 106 by UNP. Thus for Mahinda to leave the SLFP is no easy task, politically and sentimentally.    

It is also no easy task for a Sirisena type to oust Mahinda en bloc even with Chandrika's backing. The conference and its outcome will thus be no different to that of Kandy-Colombo foot march. All the growling and snarling ends where they begin. The conference will not have the political strength to flatten the Rajapaksa factor. It could only exhibit the Sirisena-Chandrika group's ability with State power to muster enough support in Kurunegala as the SLFP.

This is what Wickramasinghe would wish to have. A factional fight where Rajapaksa will not be allowed the performance he made at the 2015 August elections. Yet Wickramasinghe needs Rajapaksa to be a factor within the SLFP. Though publicly not argued, he firmly believes as any other, the Sirisena-Chandrika vs Rajapaksa squabbling could be of advantage to the UNP. A conflict that would tie down President Sirisena in an escalating party conflict, eroding his authority and restricting his role in decision making in government affairs. Certainly a situation that can strengthen his hands as PM to run the government his way

In such context to have President Sirisena even with much reduced SLFP ministers in cabinet, would allow greater status for Wickramasinghe to project himself as the executive PM in a UNP government. With 106 plus 01 SLMC seats, Wickramasinghe is only 06 less, for a simple majority to run a government. That leaves Sirisena helpless with 19A ensuring a 04 year term to this government. In any eventuality, the TNA with 16 MPs in the present parliament is expected to hold the UNP in power. Another factor that makes Sirisena a weak President.

The JVP with only 05 MPs cannot be a force to tilt power in any direction. They are only visible due to Wickramasinghe manipulations to have them in parliamentary positions that adds to their anti corruption shouting. They have no political clout to play alternative to this UNP government. To Wickramasinghe's free market economic policy vigorously pursued with unbridled corporate backing. The JVP is without any serious critique for an attractive alternate development policy and programme to counter Wickramasinghe's "bak to Rajapaksa" development package on Chinese aid.

The Kurunegala SLFP fiesta will thus create greater polarisation within the SLFP leaving Sirisena weaker in provincial SLFP politics than even now. That lifts chances for Wickramasignhe and his UNP to gain better political leverage in the lower tier of governance when local government elections are held in at least 06 months. Whatever political and economic crisis the country gets dragged into Wickramasinghe could this time feel satisfied, his manipulations can keep him and the UNP in power.

Kusal Perera
Colombo

31 August, 2016.

          Danger in competing to be "Good Sinhala Buddhists"        
About two weeks ago on 26 July, Archbishop of Colombo, Malcolm Cardinal Ranjith, was quoted in media as saying, Buddhism being a philosophy historically linked to Sri Lanka there is no necessity in changing the preferential status given to Buddhism in the Constitution. The issue of religion and Buddhism in the Constitution often seem to gather undue importance with unwanted comments from privileged personalities who seem to lack common sense.

Five days later on 01st August, the DM online had another report that said, the PM had requested President Sirisena to appoint a "presidential commission to determine whether anyone tried to create divisions within the Malwatte Chapter". The report further quotes PM as saying, “A person could be stripped of his civic rights if he is found to have worked towards a division within the chapters of the Maha Sangha". He is then reported to have said. he had suggested a clause in the proposed new Constitution to prohibit the division within the Sangha chapters and to make such an act an offence.
 Competing to be better Buddhists or "willing supports" for Buddhism than practising Buddhists, don't serve any in creating an accommodating society for all. We have gone through a protracted war and paid with blood and life for refusing to accept equal status for all. We have denied a secular State and have created a society that refuse to accept equality of status for religions that has led to violent clashes against religious minorities. It is this Sinhala Buddhist supremacy that both Malcolm Cardinal Ranjith and PM Wickramsinghe is pandering to, disregarding equality in a multi religious, multi cultural country.  

Leaving the PM's statements aside for a moment, let me say, religious leaders of other faiths should not get involved in any discourse in how Buddhism should be treated in the Constitution, a discourse best left for the lay Citizens to discuss and debate. "Marxists" in coalition with the SLFP government of Madam Bandaranayake, sealed the fate of a secular society 44 years ago, when Dr. Colvin R de Silva as Minister of Constitutional Affairs helped create the first Republican Constitution. Buddhism was then written into it as a privileged religion. For 44 years the State has been gradually fashioned into a Buddhist State leaving other religious leaders outside the discussion on how Buddhism should be treated in the formulation of a new Constitution. That responsibility falls on Buddhist clergy and lay Buddhist leaders. They will have to discuss and debate whether they would take responsibility in nurturing Buddhism or if they don't. IF they as Buddhists don't take responsibility in nurturing Buddhism, then there is no necessity for any other to take over that responsibility.

Larger majority of ordinary Buddhist folks I doubt take any interest in what is written into the Constitution. Those large numbers who flock to temples during poya holidays, those who indulge in rituals like "Paansakoole" (a Buddhist ritual at a funeral), third month or first year death anniversary alms giving, all night "pirith" ceremonies, those who go for meditation classes and those who patronise the new cult of "Ashram Buddhism", all with different perceptions in practising Buddhism wouldn't care what is written in the Constitution for Buddhism. They don't practise their own form of Buddhism, because it is a privileged religion in the Constitution. Nor do they remain Buddhists because Buddhism is given a privileged status in the Constitution. They remain the largest number, the biggest percentage of Buddhists who would go on practising Buddhism the way they know, despite what is written in the Constitution or what is not written in the Constitution. The status of Buddhism in society is largely decided by them and not with the Constitution. 

The demand for Constitutional space for Buddhism has other ulterior motives mooted by a very small group of clergy and lay persons. Though small they are vocal groups with Sinhala media giving them larger than life coverage and they seek special social status and State power for which a "Sinhala Buddhist" plate is used. With Chapter II, Article 09 of the Constitution holding the State responsible to "protect and foster Buddha Sasana" the Sangha society became very much politicised. The Constitutional provision gave leaders in Sangha society, privileged access to State power. Most leading monks in powerful major Sanga chapters or "Nikayas" now wield authority to prevail upon government leaders for benefits and privileges. Benefits and privileges political leaders willingly offer to project themselves as "patrons of Buddhism". All that often has little to do with nurturing Buddhism.

On the platform of nurturing and fostering Buddhism, neither political leaders nor leading Buddhist monks have ever taken an interest in improving the quality of Buddhist philosophical education and reforming Buddhism. They are least bothered about weird mystic rituals marketed as Buddhist practices that only promote the temple and its leading monk and not Buddhism. Even as a humanitarian necessity, no thought is given to a social security scheme for aged Buddhist monks to be taken care of with respect and dignity. A situation that compels the elderly monk to hold on to temple property till the last breath. Such has led to conflicts, at times violent, between junior monks who are left to share property owned by the temple. No thought is given to commercialising of temple premises that needs to be consciously discouraged.

Meanwhile, "nurturing and fostering" Buddhism has been reduced to colourful and expensive material gains; annexing more and more land, large and heavy constructions, all material comforts that ordinary people cannot even dream of earning. State power is sought just for that. Like how a large extent of wetland declared a sanctuary was filled up with State acceptance to have a large vehicle park and "Rest rooms" as property of the temple.  

The Sangha has never been without rivalry, never been without crisis and feuding in all its history in Sri Lanka. There were times the Kings were part of the conflict and patronised one Vihara over another. Periods the Sangha was not even considered Buddhist monks and were popularly called "Ganin-naanse". It is such degeneration of Buddhism and its Sangha that Article 09 dragged into further degeneration with State patronage. Left in a free market economy Buddhism was also heavily commercialised. Temples as property owned and controlled by individual monks outside any structural or organisational discipline and obligations, became market places and competitive over material life. Traditional one hour sermons by popular monks were given a market price, only the urban middle class could afford. It is such monks and their "Nikayas" that PM Wickramasinghe is promising State patronage and intervention to help survive.

He tries to project himself as a very pious Buddhist by giving a crude definition to "rivalry" among monks, calling such conflicts, "creating divisions" among the Sangha with special mention of the Malwatte chapter. It is leading monks of the Malwatte Chapter who led to the creation of divisions in the Sangha by refusing higher ordination to "low country" monks. They thus compelled Southern Buddhist monks to establish their own "Nikayas", Amarapura and Ramanna backed by Sinhala traders. Since then these Nikayas have had their internal conflicts and personal rivalries that led to over 05 main "Nikayas" and over 03 dozen "sub Nikayas" by now. Amarapura alone has around 24 sub Nikayas.

Let me stress this fact. No "Nikaya" was established on philosophical deviations and interpretations on Dhamma. Most "Nikayas" are geographically restricted like the Malwatte and Asigiriya chapters strictly restricted to the Kandyan nobility and are also caste oriented. What other divisions does the PM talk of in preventing through Presidential Commissions?

Politically decided State patronage always accelerates the decline and degeneration of Buddhism, or any religion for that matter. State interventions have always made certain, leadership of any religion co-opted within its political authority is reduced to political survival. Constitutional provision has made such politicising, legal. This provokes political leaders to project themselves as pious Buddhists, visiting temples and promising better patronage than the opposing politicians. This State patronage is not promised in terms of improving and supporting Buddhism. It is calculated in terms of Sinhala Buddhist votes they believe they could garner at elections. Wickramasinghe is no different, competing with Rajapaksa to be a better Buddhist.   

Thus it is time for the larger majority of practising Buddhists to say, they don't need politicians and governments to interfere with their Buddhism. Time to ask politicians to leave Buddhism and the Sangha for the devotees to take care of, the way they wish and could. It is time too for saner Buddhists to tell their monks, they wish to have their temples free of government leaders who are also political leaders. In short, it is time for ordinary Buddhists to decide, they can be practising Buddhists without Constitutional provisions. They can take care of the Sangha, who are anyway cared for by devotees. Constitutional provisions always being wholly irrelevant in how Buddhists, the monks and the temples decide their relationship. Except when monks decide in allowing politicians to use temples as political campaign centres. A culture that needs to be strictly checked by Buddhists for the benefit of Buddhism.

Kusal Perera
Colombo

06 August, 2016    

          "Culture & Poverty" In our Neo Liberal Economy        

Courtesy - Asia News
In this neo liberal or free market global economy, Sri Lanka was counted as a country moving in to the middle income group with an annual per capita income of 3,230 US dollars by the year 2014. It was expected to reach 4,400 US dollars by end this year (2016). In year 2014 this was equivalent to Rs.436,050 and for a month, was Rs.36,337 per person. In Sri Lanka, IF every person has that income, there cannot be beggars on the streets. There cannot be "Samurdhi" recipients in villages. There are beggars at every street corner and Samurdhi recipients in every village. Though termed "per capita", the majority is excluded from enjoying that income.

Neo liberal economics distorts the living picture of poverty. The "poverty line", GDP, inflation, foreign debt is mere "numbers" on paper. In real life they have no relevance to the majority. Life with the majority is quite a struggle. With a 2,500 rupee increase from May 2016, the minimum wage in the private sector became Rs.13,500 only. The apparel sector alone has over 412,000 workers of which 85 per cent are female workers. They have to meet very heavy targets arbitrarily fixed by management, work compulsory over time each day and sweat through a whole month to collect a "take home" pay of Rs.16,000 to 18,000 per month. This certainly is less than half the per capita income that Sri Lanka is said to enjoy.

This much sweated for income of less than 20,000 rupees if compared to basic needs of a family, is again less than half the Rs.40,887 required as the last "Household Income and Expenditure" survey of the Census and Statistics Department in 2012 September shows. The survey based on data collected on 1] demography 2] school education 3] health 4] food and non food items (like clothing, travel, electricity, kerosene, house rent) 5] family income 6] permanent assets 7] access to local facilities and household debt 8] details about the house and 9] cultivations and animal husbandry, says the average monthly income of an individual is only Rs.11,932, making the dollar per capita calculation a joke. In a family where there are two persons making a living and in almost all instances the two don't have equal incomes, the average monthly household income is Rs.25,778. Again, almost 15,000 rupees less than the required minimum income for a basic family life.

In these calculations, "poverty" is all about a "consumer life" on a Rupees and Cents scale. That consumer life is one major struggle for the majority who don't and cannot earn even the minimum required 40,000 rupees per month. This is more than the truth in rural life. Malnourishment is over 53 per cent in children under 05 years in rural society, leading to stunted growth. Rural culture doesn't talk of nourishment, but of filling the belly. It is on this rural "culture" that most politicians argue, people don't die of starvation in Sri Lanka. A whole family can live on a "Jak fruit" they say. This rural culture allows for poverty to go unchallenged in a heavily competitive free market.

The most important issue is, the monthly income used for calculations on poverty is not based on an income on a 08 hour working day. Calculations are done on the total income a person earns at the end of the month. The gross income accounted for therefore includes "over time" done each day, work on holidays and some who do even part time work for extra income. Accepting such a monthly income reduces human life to one that exists purely for consumption with basic living and nothing more. All "Citizens" are turned into mere "Consumers" to live within a competitive market economy. The struggling "consumers" are thus denied time for a decent "cultural" life. In short, this crude acceptance of human life as just a "consumer" denies the citizen his or her "right to culture" and "cultural rights".

"Urbanisation" and neo liberal "impotence"

Human beings are "cultural" beings with intellectual activities. Development of art, music, dance, architecture, cuisine, etc., are all part of civilisation with intellectual curiosity. Human life spent in making a livelihood that only provides for a basic life with no free time for intellectual indulgence and cultural engagements, is a life lived in poverty. Thus "poverty" has to be calculated with due recognition given to "right to culture" and "cultural rights" in addition to economic numbers and terms.

Unfortunately, over 37 years of moulding within a very competitive free market, has made almost all think and accept "freedom of choice" on the shop shelf is part of "democratic" living. A larger majority have accordingly attuned themselves to keep competing for comfortable lives at the expense of leisure and culture. The free market economy thus survives on the popular belief, social mobility can be achieved through "hard work" in a competitive market economy.

What is therefore given amiss is the fact that "employment" or income generation is not a timeless activity for mere living. Importance of the 08 hour working day lies in just that. Importance in the sacrifices the workers made with their lives at the Haymarket Square in Chicago over 130 years ago is that, the whole world now accepts an 08 hour working day, written into law. That 08 hour working day has to be paid adequately in wages, for the worker to not only eat, feed and clothe himself and a family, but to sustain his and his collective cultural life during the next 08 hours of the day, before s/he retires for the remaining 08 hours that makes a 24 hour day. That in fact is the logic of a 08 hour working day.

In a neo liberal economy, "development" is all about middle class urban life. It is all about "buying power" of an urban consumer. Poverty is what is compared with that urban life and "development" is always "City centred". When Narendra Modi was voted to power on a popular vote in 2014, one of his first major development programmes included the "100 Smart City" programme. The programme projected an urban population growth from 375 million to 590 million by year 2030. It also said, the urban share of the GDP would grow to about 70 per cent. He declared these "Smart Cities" will have very efficient and fast modern commuter facilities and all households would have free wi-fi. Now that is what city development is all about, apart from maintaining them clean and tidy.

Post war "development" in Sri Lanka during the Rajapaksa regime was no different. All proposed highways and circular road connectivity are Colombo centred and for urban use. Colombo city beautification had to be without the poor in the city. Coastal land acquired after the end of the war, were meant for a heavily hyped hospitality trade that left nothing for the war affected. Except for few menial jobs, investment in them meant for accruing of profits in Colombo.

The much maligned and heavily protested against "Colombo Port City" project begun by Rajapaksa is now being carried through under PM Wickramasinghe with the same Chinese company without any details given as to what was changed, if any was changed. And this hybrid government of Sirisena-Wickramasinghe duo also leans heavily on urban development, no different to Rajapaksa. Their only development project the "Megapolis" would leave all rural life outside the Megapolis, wholly neglected. Very much like Modi's "Smart Cities", the Megapolis is about enlarging the Colombo Port City model to cover Colombo-Gampaha districts and some parts of Kalutara as well. The Megapolis transport plan, the only complete plan so far under Megapolis is expecting an influx of 01 million people into the new megacity, once completed. Their commuting will bring in an estimated 1.8 million vehicles daily into the city. In addition, the plan has tramcars, a light electric train service and 02 new railway extensions, one linking Kottawa and Horana and the other Kelaniya and Kosgama via Dompe.  

There are no estimates on how much extra fuel these vehicles and the commuting systems would burn through day and night. For now, 66 per cent of foreign income generation is by the poorest segments in society; the plantation workers, apparel and export manufacturing workers and the migrant labour especially in the Mid East. All who would be left out of Megapolis development but whose sweat would be burnt off as fuel in the megacity. The irony is not that PM Wickramasinghe in complete control of economic planning believes, its megacities that develop whole countries in this new millennia and says at the launch of the Megapolis programme on 29 January (2016) at the Independence Square, "…..this megacity would be developed into a very strong economic centre and linked to the global economy. That would lift the whole country up". The irony is, he wants all others also to believe his fantasy is the right answer for development.

To date, after more than 150 days, there is no plan made available on the economic drive in the mega city. There is nothing tangible on what the total cost of the complete project is and what exactly is included in the project. Nothing is known about who funds the project in its different phases and its components. Worst, there is no assurance that these projects would have Environmental Impact Assessments (EIA) done through independent and competent agencies, made available for public scrutiny. All one would know about it is simply nothing in a 02.27 minute video titled "Colombo is South Asia's Open City" (https://vimeo.com/153351844) within the official website (http://www.megapolis.gov.lk/  accessed on 28 June, 2016)  that proudly says "An island metropolis with continental potential" and nothing more. Eventually, with unknown or questionable contracts given out, there will be heavy construction sites here and there coming up with perhaps colourful publicity campaigns. That's where big money comes and goes. In most countries like ours, politicians in power go for huge construction contracts. That was what we saw during Rajapaksa and we would see them under the Sirisena-Wickramasinghe government too, IF they find investors to come in.

The launch of the Megapolis in January clearly proved this government under PM Wickramasinghe and his business class "royal" group brought into big time responsibilities, knows nothing beyond business in a free market. They believe wooing foreign investors for a "Singapore" style city development is medicine for all aches and pains. FDI and export oriented development over 03 decades has left the whole rural society unattended to. Rural youth were left to be used as cheap labour in FTZ's, as frontline soldiers in a brutal war and as the cheapest house maids in Mid East.

As a development model, Singapore and Lee Kuan Yew are terribly over simplified and exaggerated icons of "success". IF, and I say it with much conviction, if Lee Kuan Yew was put in place here in Sri Lanka in late 60's, he wouldn't have known what to do with our tea and rubber plantations. With our subsistence farming in rural society where paddy is more a cultural life than economic farming. With our land tenure system and parcelling of land from generation to generation. Our historical bondages that keep the rural society still in a semi feudal culture and our ethnic divide that was asking for political answers, were not there for him in his plate. In Singapore, it was all minus that a "city" asking for simple urban development. He would have been a total wreck here, far worse than even our failed leaders who knew the constituencies they had to deal with.

This neo liberal economic model the PM Wickramasinghe is obsessed with and is trying to push through, is thus a heavily funded ultra urbanised "commercial development" that would only lead to a far more stressed out urban society. In a market, regulated not by "supply and demand", but manipulated by big business for bigger and bigger profits.

The present day tragedy is, hyped neo liberal urban development does not allow for "total development". We therefore don't have modern libraries and reading rooms for school children and adults in beautified megacities. We don't have modern museums, theatres, cinemas, art galleries and auditoriums for collective discourses in any of the development plans. What is invested upon in the megacity are huge shopping malls, modern cafes and restaurants with Indian, Chinese and Thai menus, recreational centres with massage parlours, Spas and night life with karaoke and casinos, toll collected car parks, walking and jogging paths for the health conscious middle class urbanites and modern gyms. Added are modern private hospital and international schools. Total lack of facilities and space for intellectual cultural engagement, denies growth of a modern, culturally developed human.
 
Cultural impotence and divided society

The free market has developed its own novel addictive culture over a 38 year period. Those who were born into this free market in 1977 after Jayawardne was voted in with an overwhelming majority are now 38 years old. Those born 10 years after are 28 years old and the next generation born another 10 years later are now qualified voters at 18 years. This large and active population have never tasted any other economic life, but this unrestricted free market. Over the decades it has developed a very aggressive advertising industry that fashions consumer thinking. This advertising industry is so effective, the "Sinhala Buddhist" consumer who seldom thought of buying "chicken" 03 decades ago, was turned into a regular "chicken consumer", with every grocer in every street corner selling "broiler chicken" much faster than even "Masoor dal". So was the "plain tea" that was largely replaced by "coke".  

This post '77 urban and semi urban generation grew up taught to compete for personal gains. Social mobility for most came through new formal and informal sectors the free market economy created in and around Colombo. In all these new economic sectors, the new generation work for bigger and bigger "take home" pay. They don't know of a decent pay for a 08 hour working day. The new and simple mind-set is, "money makeths a man". They live in a society, where "collective" life has extremely little opportunity. Their workplaces are not where organised labour is and where collective bargaining is accepted. "Leisure" in this very individualised, busy urban society knows only restaurants, beach parties, Sunday buffets, karaoke and the like. That too is a "culture". But lacks the intellectual refinement that comes with libraries, museums, theatre, discussion forums, music and art.

That market culture is now termed a "Gastritis culture" with most urban life from around 10 years on and the good majority of factory workers are ailing with continuous "gastric" disorders. It is also a market culture, that is ethno religious in thinking. Trader competition for cash flow share in urban society has made a Sinhala Buddhist claim for supremacy for over 08 decades. In the second half of the post independent period, the Sinhala South came to be identified as everything national. Even the national economy was restricted to the Sinhala South, the North-East going under a brutal war. With a very competitive neo liberal economy in place, the Sinhala Buddhist supremacist claim thus became more or less "official". In a weak and unrefined culture, racial affiliations take root quite fast. That becomes a fad when planted in social media patronised by this empty unrefined market culture of the new generation. The Sinhala niche in politics solely in the Colombo district that backs the "Hela Urumaya" types goes to prove this Sinhala trader mind-set in the competitive urban market.

Need for alternatives

Thus for two reasons, we need to go beyond talks in reforming governments and systems that could run a neo liberal economy better. One, that can never happen in our part of the world, where functional democratic structures and traditions have not come to stay, as in the developed West. In our part of the world where social structures and traditions are semi feudal and beliefs are parochial, rational thinking has little relevance in decision making. That is reason why the concept of a "benevolent dictator" gets a stronger grip in the East and no more in the West.

In the South Asian context, neo liberalism and mega corruption go hand in glove. They just cannot take divergent paths. just 18 months of "Yahapalanaya" proved it would not be clean and efficient as promised and as expected by urban middle class activists. PM Wickramsinghe, called "Mr. Clean" when in Opposition, has proved he is no more clean as expected. His most loyal royal gang in government is the most accused lot for wheeler dealing. He wouldn't even investigate them in a decent, trustworthy manner. Nepotism around President Sirisena is casually growing. Most accused for corruption under Rajapaksa are now in President Sirisena's team with numerous designations.

The next important fact is neo liberalism in our context does not allow a Sinhala culture that can be progressive. That can be intelligent enough to understand the advantage of a plural inclusive society. The neo liberal culture in the Sinhala South is an insecure culture. It therefore needs State patronage. This insecure majority psyche is being exploited by all neo liberal regimes in South Asia. From Modi to Sheikh Hasina to President Sirisena. From Modi's anti Muslim Hindutva campaigns to Hasina's Muslim extremism in Bangladesh to Sirisena's "war heroes" and backtracking on the 2015 OISL Resolution, neo liberalism is all about supremacist racial politics that go hand in glove with mega corruption and nepotism.

A turn around to accountable, transparent and democratic governance is not possible with tinkering the corrupt, politicised, inefficient systems. "Reforms" are too ancient to be even tried out. This today demands an alternative to this unrestricted, "urban centred development" submerged in mega corruption with total political patronage and State interventions. With "socialism" ruled out for an alternative, it is definitely a hard choice to make. But one that has to be made, and one that needs serious intelligent dialogue.

Kusal Perera
Colombo
29 June, 2016



          FreedomWorks Letter Support GSE Bailout Elimination and Taxpayer Protection Act        

Dear FreedomWorks member,

As one of our million-plus FreedomWorks members nationwide, I urge you to contact your representatives and ask them to support H.R. 1182 GSE Bailout Elimination and Taxpayer Protection Act. Introduced by Rep. Hensarling (R-TX) the bill would end conservatorship for government sponsored enterprises Fannie Mae and Freddie Mac. Taxpayers should not be forced to bailout Fannie Mae and Freddie Mac from their poor lending decisions.

Fannie Mae and Freddie Mac must be allowed to sink or swim in a free market. The government sponsored enterprises are a prime example of crony capitalism. Evidence shows that Fannie Mae and Freddie Mac played a major role in the recent housing bubble. The government sponsored enterprises Fannie Mae and Freddie Mac were at the center of the collapse. Since these two public companies knew they had an implicit taxpayer bailout guarantee, they took more risks than they otherwise would.

The GSE Bailout Elimination and Taxpayer Protection Act would end Fannie Mae and Freddie Mac’s conservatorship within two years. It will immediately provide taxpayers relief by repealing the Affordable Housing Trust Fund, the affordable housing goals mandate and caps their maximum portfolio size at $700 billion. That cap would be reduced to $250 billion over the next five years.

I urge you to contact your representatives and ask them to cosponsor the GSE Bailout Elimination and Taxpayer Protection Act today. Mortgage lending should take place on a competitive playing field without any government advantages. This bill is a step in the right direction towards privatizing Fannie Mae and Freddie Mac for the sake of taxpayers and economic prosperity.

Sincerely,
 
Matt Kibbe
President and CEO
FreedomWorks
[Click here for a PDF of this letter.]


          ATR Urges Texas Lawmakers to Support Paycheck Protection Legislation        

Texas is widely seen as a bastion of conservative and free market policies and governance. However, while Texas is a Right to Work state, it does not have a Paycheck Protection law on the books. As a result, state agencies and municipalities across the Lone Star State relieve government worker union bosses of dues collection responsibilities and take care of that for them using taxpayer resources. 

Money the state automatically takes from worker paychecks and hands to union bosses is then used to support anti-business, anti-taxpayer policies and candidates. Today ATR president Grover Norquist sent the following letter to Texas state representatives, urging them to vote Yes on legislation already approved by the state senate that would put an end to this misuses of scarce taxpayer resources:

 

To: Members of the Texas House of Representatives

From: Americans for Tax Reform

Re: Paycheck Protection Legislation

Dear Representative,

On behalf of Americans for Tax Reform (ATR) and our supporters across Texas, I urge you to support and vote Yes on Senate Bill 13, legislation approved by the Senate, and House Bill 510, legislation introduced by Rep. Sarah Davis. This pro-worker legislation, if enacted, would end automatic government deduction of union dues from public employee paychecks.

It is a completely inappropriate use of taxpayer resources to have state agencies and municipalities serving as the money bagmen for unions, but that is the current practice in the Lone Star State, a fact whose revelation surprises many who otherwise view Texas as a bastion of pro-business policies. The question comes down to whether lawmakers think the state should be in the business of using taxpayer resources to collect political money for government unions. Lawmakers who think that is an improper function of government and use of taxpayer resources can put a stop to it by voting Yes on SB 13/HB 510.

Despite what opponents of this legislation have incorrectly alleged, SB 13/HB 510 would not affect the right to organize and join a union; the legislation would simply require union bosses to collect their dues from workers voluntarily, as opposed to the current practice of having state agencies and municipalities collect it for them. If unions are providing a valuable service to workers, then they will have no problem convincing workers that they should join and pay dues voluntarily without automatic state confiscation. However, research indicates that without proper safeguards, many workers are forced to give up hard earned wages against their will.

A study by the Heritage Foundation found states that passed paycheck protection laws like SB 13 & HB 510 saw union spending on political campaigns and activities fall by an average by 50% after such laws were enacted. In Washington State, the Washington Education Association saw the number of members donating to the political activity fund drop from 82% to 11% following the implementation of Washington’s paycheck protection law in 1992. This underscores the fact that often the goals of the union leadership do not reflect the priorities of workers.

One of the more egregious aspects of automatic confiscation of union dues from government worker paychecks in Texas is fact that money the state collects for union bosses is in turn funneled to candidates and lobbyists who advance and advocate anti-business, anti-taxpayer policies. Enactment of SB 13 or HB 510 would put an end to this racket. As such, ATR urges you to vote Yes on SB 13 and HB 510. ATR will be educating your constituents and all Texas taxpayers as to how lawmakers in Austin vote on this and other important fiscal and economic matters throughout the legislative session.   

 

Sincerely,

Grover G. Norquist

President

Americans for Tax Reform

Senate-passed legisaltion to stop taxpayer resources from being used for union dues collection awaits House consideration
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          ATR Urges Colorado Lawmakers to Reject Proposed Sales Tax Hike        

 

Colorado House Speaker Crisanta Duran (D) and Senate President Kevin Grantham (R) recently unveiled House Bill 1242, their proposal to put a sale tax increase on the November ballot in order to generate $3.5 billion for transportation. The proposal has been met with swift opposition by Republican legislators in both chambers of the state legislature, as well as conservative and free market organizations like the Independence Institute, a free market think tank based in Denver, and Americans for Prosperity.

Reporters and HB 1242 proponents describe the proposed sale tax hike as “less than a penny,” which is a great way to mislead folks into thinking this proposal entails a small tax hike. Point of fact, HB 1242, if approved, would advance a sales tax hike that represents a more than 21% increase from the current rate. Anyone who describes this as “less than a penny” is trying to distract from what would be a massive rate hike.

Grover Norquist, president of Americans for Tax Reform, sent a letter to Colorado legislators today, urging them to oppose HB 1242. In the letter, Norquist explains how those who claim a tax hike is needed for transportation are actually admitting transportation is their lowest priority:

“Some lawmakers contend this regressive tax hike is needed because transportation is a priority,” said Grover Norquist, president of Americans for Tax Reform. “Yet lawmakers calling for a tax hike to fund transportation are actually admitting that transportation is their lowest priority. Were that not the case, they would not have funded everything else in the budget first.”

The Independence Institute has filed what would be a competing measure on the November ballot.  Titled “Fix Our Damn Roads,” that measure, which will require requisite citizen signatures to make it to the ballot, would ask voters to approve a $2.5 billion transportation bond, to be paid for with existing revenues and not tax hikes.

“Let’s be clear, this is not a tax increase or a budget cut, it’s a re-allocation of existing state spending to roads,” said Jon Caldara, Independence Institute president. “If lawmakers aren’t willing to do their jobs, then we’ll ask the voters to do it for them.”

Colorado has divided state government, with Democrats holding the state house and governor’s mansion, while Republicans control the state senate. Expect this to be one of the most contentious tax battles of 2017. A copy of the letter that ATR sent to Colorado lawmakers is as follows: 

March 13, 2017

To: Members of the Colorado House of Representatives

From: Americans for Tax Reform

Re: House Bill 1242/Proposed Sales Tax Hike

Dear Members of the Colorado House,

On behalf of Americans for Tax Reform (ATR) and our supporters across Colorado, I urge you to reject House Bill 1242, the recently unveiled proposal to refer a sales tax increase the ballot. Your constituents have been hit with 20 Obamacare tax increases and an onslaught of onerous federal regulations over the last eight years. The last thing individuals, families, and employers across Colorado need is to have lawmakers in Denver pile on with further tax hikes at the state level, but that is the goal of HB 1242.

The sales tax increase that HB 1242 seeks to advance has been described as “less than a penny on the dollar,” yet such description is intended to mislead. In fact, the sales tax hike entailed in HB 1242 represents a whopping 21% hike in the current rate. Some lawmakers contend this regressive tax hike is needed because transportation is a priority. Yet lawmakers calling for a tax hike to fund transportation are actually admitting that transportation is their lowest priority. Were that not the case, they would not have funded everything else in the budget first. 

There is ample evidence that higher taxes make states less competitive, and harm economic growth. John Hood, chairman of the John Locke Foundation, a non-partisan think tank, analyzed 681 peer-reviewed academic journal articles dating back to 1990. Most of the studies found that lower levels of taxation and spending correlate with stronger economic performance. When Tax Foundation chief economist William McBride reviewed academic literature going back three decades, he found “the results consistently point to significant negative effects of taxes on economic growth, even after controlling for various other factors such as government spending, business cycle conditions and monetary policy.”

As such, I urge you to reject efforts to raise the sales tax, which would disproportionately harm low and middle-income Colorado households. ATR will be educating your constituents and all Colorado taxpayers as to how lawmakers in Denver vote on HB 1242, and other important fiscal and economic matters throughout the legislative session. Please look to ATR to as a resource on tax, budget, and other policy matters pending before you. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

 

Sincerely,

 

Grover G. Norquist

President

Americans for Tax Reform

 

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          The Senate’s New Health Care Bill Is a Win for Ted Cruz—and Almost Nobody Else        

Ted Cruz: 1. Humanity: 0.

That is, sadly, the simplest way I can summarize the latest version of the Senate health care bill, which Republicans unveiled Thursday afternoon. Not much has fundamentally changed about the legislation, which still amounts to a large tax cut financed by shearing away large swaths of the social safety net. But it does represent a big win for the senator from Texas, as it includes a version of his proposal to let insurers sell cut-rate, unregulated coverage as long as they also offer plans that comply with all of Obamacare's mandates.

Cruz, who is attempting to morph from the most hated man in the Senate into a conservative dealmaker, is very pleased with this development. He now supports the bill. His conservative buddy Mike Lee of Utah, who also pressed for the amendment, may get to yes as well, though he's still officially undecided.

There is far less in the legislation to assuage the concerns of moderate Republicans, or for that matter lower-income Americans and middle class cancer patients who might fear for their health coverage. All of the draconian Medicaid cuts? Those are still there. The skimpy tax credits meant to help people buy private coverage? Still meager. The completely bonkers waivers that, as one widely respected health policy expert put it, could feasibly let state lawmakers spend their Obamacare funding on “cocaine and hookers” instead of health care? Still right there in the legislative text.

On the other hand, the new bill doesn't include quite as many tax cuts for the wealthy. So it's got that going for it.

The Cruz amendment is an odd piece of legislative maneuvering. Again: Under it, insurers can sell whatever kind of threadbare coverage they want if they also offer health plans that abide by all of the Affordable Care Act's rules, meaning those products would cover the ACA's expansive essential health benefits and couldn't discriminate against customers with pre-existing conditions. It partially achieves the conservative goal of slaying Obamacare's various consumer protections in order to let insurance carriers market cheapo coverage. But it also throws a bone to moderates, since it doesn't entirely abandon sick Americans to the fangs of the free market.

There are some obvious problems with this approach. Young and physically well Americans will likely buy inexpensive, unregulated insurance plans, which will cost them relatively less since they'll be priced based on health and won't have to cover extensive benefits like mental health and maternity care. Many sick individuals, meanwhile, will need to buy Obamacare-compliant plans—which could send the cost of that coverage skyward.

This might not be such a concern for poorer customers, since they'll receive subsidies that cap their premiums as a percentage of their incomes. (For them, it acts like a high-risk pool with unlimited funding, which isn't so terrible.) But Americans who earn too much to qualify for those tax credits—they cut off at 350 percent of the poverty line, or about $71,000 for a family of three today—will get stuck paying full price. So if you're sick and middle-to-upper-middle class and insured on the individual market, you're stuck paying full fare for some very expensive coverage. The Kaiser Family Foundation has estimated that about 1.5 million Americans could end up in that boat.

Notably, the insurance industry itself seems to believe splitting the market this way could be a horrible, infeasible idea. “Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets,” the trade group America's Health Insurance Plans said in a memo that made the rounds earlier this week. The Blue Cross Blue Shield Association was similarly critical.

There are some reasons to think that the version of the Cruz amendment that showed up in Thursday's draft wouldn't be quite such a boondoggle. For one, the draft bill includes an additional $70 billion to help insurers with the cost of especially ill or high-risk patients, which should keep premiums down a bit. (It also bulks up the market stabilization fund that was already in the legislation by an additional $70 billion, which should help keep a lid on premiums.) Beyond that, the market probably won't divide entirely into two tiers. The Senate doesn't provide subsidies to buy unregulated insurance plans, so even if they're healthy, lower-income Americans might be better off buying Obamacare-compliant coverage. That will balance out the health profile of the customer pool a bit.

Still, we're talking about a plan designed to make healthy people pay less for their insurance and sick people pay more. That will probably be the ultimate outcome. I don't know how many people not named Ted Cruz will be pleased with that.

And that brings us back to the rest of the bill, which gives moderates vanishingly little. Because cutting taxes on the wealthy while slashing Medicaid was a transparent act of class warfare on the poor, the legislation no longer nixes Obamacare's tax on investment earnings or the additional Medicare tax on high earners. It also kicks in an extra $45 billion toward opioid treatment.

Beyond that? There's not much. The bill's insurance tax credits are still designed to buy low-end, high-deductible coverage, meaning poorer adults likely won't be able to afford to use the health plans they purchase. The aforementioned waivers—which are theoretically meant to encourage health care "innovation"—still give states almost incredible latitude to divert federal money to god knows what. Meanwhile, Medicaid still gets brutalized—just as before, the bill ends Obamacare's expansion of the program and throttles its traditional funding stream over time. Republican leaders have softened their approach a tiny bit around the edges by carving out exceptions meant to deal with public health emergencies, for instance, but the basic thrust hasn't changed.

Of course, Medicaid has supposedly been the single biggest concern for senators like Maine's Susan Collins, Nevada's Dean Heller, West Virginia's Shelley Moore Capito, and Ohio's Rob Portman. Which is as it should be. We're talking about America's largest health insurance program, after all, a piece of the safety net that serves vulnerable populations like the elderly, disabled, and children. The individual market, which so much of the Obamacare debate has focused on, is a shrub by comparison.

If Republican moderates cave now and abandon their fight over the single most significant aspect of this legislation, they'll show what a weak and insignificant faction of their party they truly are. They'll show that the only GOPers who really matter are men like Ted Cruz.


          San Francisco’s Civil War        

Local politics is always, in one way or another, about housing. In San Francisco, a deep blue city whose fault lines long ago ceased to resemble America’s, that politics is a vitriolic civic scrimmage, where people who agree about almost every national issue make sworn enemies over zoning, demolition, and development. It’s like a circular firing squad at a co-op meeting.

On June 1, members of a group that advocates for housing growth to lower rents called San Francisco YIMBY (for “Yes, In My Back Yard”) helped organize a panel in downtown San Francisco: “The Political Dynamics of Housing.” Over food and drink, a group of local experts and activists tried to talk through why, despite widespread local consensus that something must change, San Francisco continues to be the country’s most expensive city for renting an apartment.

The day before the event, the San Francisco chapter of the Democratic Socialists of America—an organization founded in 1982 whose membership more than tripled, in the 12 months ending in March 2017, to 19,000 dues-paying members—included a note in their regular membership letter. “The SF YIMBY Party is a pro-development, pro-gentrification, pro-landlord organization,” it read. “DSA SF is seeking folks to come up with materials and a plan for challenging this narrative and the disinformation they will undoubtedly be spreading regarding housing at this meeting.”

That call, and an ensuing shouting match at the panel, was the most overt skirmish in a feud between the DSA and the YIMBYs, two groups that have more in common than you might expect. Each has harnessed the political energy of young people in West Coast cities. Each considers entrenched wealthy homeowners an enemy. They have a good number of members in common. And the goal, of course, is the same: more affordable housing.

San Francisco’s left—tenants and homeowners both—has long been hostile to new development, and the YIMBYs, as a group that claims tenants’ interests broadly align with developers’ and, therefore, that cities should do everything they can to increase the housing stock, have received particular opprobrium. In a vicious article in TruthOut and the San Francisco Examiner published last month, writers Toshio Meronek and Andrew Szeto called YIMBYism a “libertarian, anti-poor campaign to turn longtime sites of progressive organizing into rich-people-only zones” and compared pro-growth advocates to the white nationalists of the alt-right. (That second charge was later deleted.) San Francisco supervisor Aaron Peskin compared YIMBYism to the U.S. military’s destruction of the Vietnamese village of Ben Tre: “They have a very Ayn Rand, bomb-the-village-to-save-it point of view,” he told San Francisco magazine in December.* (San Francisco, population 850,000, being the village.)

But the specific relationship between YIMBYs and Socialists is more complicated—and potentially more promising. “We’re still developing our perspective as a chapter,” Darby Thomas, a San Francisco DSA co-chair who works on homelessness, wrote me in an email.* The chapter had diverse perspectives, including YIMBYs, she noted, and would hold a rigorous debate before taking an official position. Unlike the city’s older leftist organizations, the DSA has seen a big influx of new members who have new ideas about how the American city can fairly accommodate newcomers, and insist that socialism and skyscraperism aren’t irreconcilable philosophies.

What if they could all just get along?

YIMBY groups, which have also sprung up in cities like Boulder, Colorado, and Seattle, are especially vocal in the Bay Area, which has the highest rents in the country thanks to a housing shortage stoked by decades of development restrictions. The YIMBY doctrine is more housing, all the time, everywhere. “The thing that’s been frustrating about fighting with leftists is that our goal, which is building a lot of housing, is completely distribution-neutral,” explains Sonja Trauss, the head of the San Francisco Bay Area Renters Federation, a pro-growth counterpart to the storied San Francisco Tenants Union. “I do not care who builds the housing. The goal is 5,000 units a year in S.F., every single year. I think the market is the institution that’s in the position to deliver that for us right now.” Trauss and her peers have become a fixture at community meetings not just in San Francisco but in neighboring cities too, like Brisbane and Berkeley, where they travel to stand up for housing growth.

More traditional tenant activists, by contrast, believe that new luxury housing can drive up rents locally, especially if it comes with amenities that serve as a catalyst—the theory of “induced demand.” Most insist that the housing market is segmented, if not structurally, then at least for the foreseeable future—meaning that new high-rent units do not change price points at the bottom and certainly do nothing to help the city’s stubbornly high homeless population. Practically all of them believe that developers should be required to provide large numbers of affordable units with new construction. Such policies have the effect of reducing the total number of units built and driving up the costs of those that are completed. But they do create some new apartments that rent for under market rate, which in San Francisco right now is $2,400 for a one-bedroom according to ApartmentList, an online brokerage.

As is often the case in politics, each side sincerely thinks the other has already got its way and has therefore been discredited by the city’s continuing rent crisis. Democratic Socialists see a city where towers and rents keep rising, offering housing mostly for newcomers and little respite to longtime San Franciscans. (Newcomers is a flexible term, but 84 percent of residents of new units inhabited an older unit in the city the previous year.) YIMBY activists see a city of low-slung outer neighborhoods, endless permitting processes, and underbuilt transit corridors adding up to a sluggish pace of housing growth. The San Francisco metropolitan area, which also includes Oakland and a raft of wildly expensive suburbs, has added 373,000 jobs over the past five years, but only built 58,000 units of housing. That job-to-home ratio of 6.4 is the highest in the country.

And if it wasn’t for developers building those new units, YIMBYs say, the crisis would be far, far worse. “They don’t think through where the people who would have lived in the market-rate housing are going to live instead,” says Trauss. “You’d think they were selling cigarettes. It’s housing!”

The shouting between Socialists and YIMBYs has mostly occurred on the internet, as most shouting does these days. But like earlier left-on-left conflicts, it’s spilled into real life, stranding people caught between the causes like Victoria Fierce, a self-described “YIMBY Socialist” who sat on the June 1 panel. “It has really soured relationships between me and my DSA comrades,” she says. “I’ve been confronted at parties, pushed into the corner, and had my commitment to socialism questioned.”

“A lot of the leadership of the DSAs have the old Bay Area mentality that large corporate developers are evil and awful and we need to stop them—although they’re the only ones building housing,” Fierce told me. “That benefits the idea of socialism, though it doesn’t necessarily benefit the people that are supposed to benefit from socialism.”

In addition to political disagreements about the best way to achieve the goal, each side suspects the other is acting in bad faith. Why aren’t Socialists lobbying for a $3 billion affordable housing bond? How could YIMBY groups oppose a bill to mandate high wages for construction workers?

In March, a note of hope sounded from Los Angeles. On an off-cycle ballot was a measure called the Neighborhood Integrity Initiative, which would have instituted one of the country’s strictest anti-development policies in a city with some of the nation’s highest rents relative to incomes. The prospect of passage panicked growth advocates, who worried a freeze on new construction would worsen the rent crisis. In fact that was the stated reason: Michael Weinstein, the president of the AIDS Healthcare Foundation, sponsored the legislation as an anti-gentrification measure. He wanted to make sure L.A. didn’t turn out like San Francisco, which he called “a rich ghetto.” His bill won the support of the L.A. Tenants Union, an active tenant advocacy group.

But not the local chapter of the DSA, which produced a strongly worded statement explaining its opposition—a template for common ground between YIMBYs and Socialists. The bill failed by a wide margin, in the end. (It was also opposed by labor unions, among other interest groups.) Denser development is better for the environment, the DSA noted, and its promises of “local control” were spurious. “True democratic control requires that the people have the ability to afford housing,” the statement read. The referendum “restricts development to homes that few people live in and allows property owners to rent or sell for an increasing profit.”

Anne Orchier and Kristina Meshelski, two members of L.A.’s DSA Housing and Homelessness Committee who helped write that statement, told me they resented the YIMBY rhetoric that painted tenants’ groups as reactionary. There was a lot of daylight between the two groups, they said. And yet, the statement signaled that even anti-capitalist tenants and pro-growth tenants had more in common than the homeowners who still retain such immense power in both cities.

In San Francisco, the alliance between liberal landed homeowners and vulnerable tenants is stronger. The Coalition for San Francisco Neighborhoods—a group that advocates mostly against development—was started by the same guy who founded the Council of Community Housing Organizations, an umbrella group for affordable housing advocacy.

“These two groups have diametrically opposed interests on paper, but were started by the same people and end up being in coalition all the time,” says Laura Foote Clark, the executive director of S.F. YIMBY. Affordable housing developers want to advance each individual project, not reform the system as a whole, she says, and the resulting piecemeal strategy has yielded little. People tell her, “ ‘It’s the long game, you just don’t understand the long game, we’ve been here 50 years.’ How is you having been here a long time a mark in your favor? I get told all the time, especially by people I disparagingly refer to as fauxgressive, that we need to move slower, that we don’t want to piss off the [homeowners’ associations]. But—we do want to piss off the HOAs.” Homeowners tend to resist change in all circumstances, whether it comes in the form of affordable housing or tall buildings with expensive rental apartments.

“NIMBY people have coopted this leftist rhetoric that we can’t have giveaways to housing developers,” says Fierce. “Leftists who don’t really have a critical eye for this pick it up and they run with it.”

Everyone is resistant to demographic change. But the pre-eminent problem, demonstrated by the Harvard Ph.D. candidate Michael Hankinson in surveys of San Francisco renters, is that tenants believe new housing will raise their rents, and when it comes to development, behave like homeowners. There’s little evidence to show that this is true on a citywide level: On the contrary, it looks like San Francisco’s post-recession boom actually caused a small rent drop. But anecdotally, and in absence of the alternate history where San Francisco does not build, the connection looks clear: Expensive rentals were built, rents rose.

There is also, Trauss suggested, an element of realpolitik. Tenants have little power despite their numbers. So they work with homeowners to achieve their aims. The Mission Moratorium—San Francisco’s version of Measure S, a prohibition on new building that failed in 2015—started as a moratorium on evictions before it expanded to include new buildings. Trauss asked Erick Arguello, the founder of Calle 24, a group that supports Latino culture in the Mission District, how one became the other. He told her they thought a moratorium on buildings would be more likely to win, she recalls.

Even where YIMBYs and Socialists have found common ground on housing growth, like Los Angeles, there are substantive policy disagreements. DSA L.A., for example, is strongly in favor of a linkage fee on new construction to support affordable housing—a policy that Mayor Eric Garcetti also supports. Opponents say it will constrain new development and create just a handful of subsidized units, driving up the price of market-rate apartments but adding little to the subsidized stock. “Everyone wants more affordable housing,” Michael Manville, a professor of urban planning at University of California, Los Angeles, who says the fee is a bad idea, told the Los Angeles Times. “On this policy issue, there just isn’t a clear consensus on whether this is the way to get there.”

In Seattle, which has built more new housing than any of its peers, the DSA endorsed City Council candidate Jon Grant, a former tenants’ union director who is promising a 25 percent affordability mandate. Developers insist that level of cross-subsidy will grind construction to a halt, and drive up the price of market-rate units on which most tenants of all income levels depend. “If the capitalist system cannot provide housing for everyone who wants and needs to live in the city, then we should be sending a signal: This system cannot accommodate everyone who needs to live in the city,” Andrej Markovčič, the chair of the Seattle DSA, explained. “If developers cannot provide this 25 percent, that’s a sign we need to be looking at other solutions.” (Requiring private developers to construct affordable housing also drives up the cost of nonsubsidized units, and I suspect many YIMBYs would agree with Markovčič that the system is not ideal.)

But it’s also, unfortunately, all we’ve got right now. Within the YIMBY community, there’s disagreement about affordability requirements—what policy is right, if any policy is right at all. Mandatory inclusionary zoning, a popular urban policy that requires developers to build affordable units in every project of a certain size, has produced a paltry number of new units. Still, for many Socialists, the drip of affordable housing is more direly needed than the flood of market-rate.

In Cambridge, Massachusetts, City Councillor Nadeem Mazen explained his opposition to YIMBY groups to a conference of housing journalists in March. “The housing advocates and especially young urban planners, like this organization here A Better Cambridge, say ‘Build it now,’ ” Mazen said, referring to the local YIMBY group. “The problem with ‘Build it now’ is what we’re building is luxury housing with a small modicum of affordable required. They say there’s a 30-year wait, wait 30 years and luxury income will become middle-income housing. We have to understand that the free market isn’t going to solve this problem. Twelve or 20 percent isn’t enough.”

That is a common refrain among Socialists, too. “We are in favor of increased urban housing density,” says Robbie Nelson, a member of the East Bay DSA who serves on its housing caucus. “It’s dishonest for people to claim that the left doesn’t want those things. The point is, if that program of densification is controlled by capitalist developers and landlords, only the rich have access to those conditions, and the working class and poor get pushed out to car-dependent suburbs.” When the long-term goal is the “decommodification” of housing, bowing to developers’ expectations of return-on-investment does not feel like a step in the right direction.

But people keep coming to cities like Cambridge and San Francisco. Those newcomers tend to have steady incomes but no arrangement with existing social housing. They feel stigmatized by what they perceive as hypocrisy on the anti-growth left: a theoretical embrace of migrants, but in reality a social and political rejection of their interests. They see the signs that say “immigrants are welcome here” next to signs rejecting new local development.

Those people find a political home in groups like S.F. YIMBY, Clark’s organization. She rejects the implication that increasing supply is a 30-year project and is optimistic about the complex problem of regional responsibility wherein (thanks in part to the California tax code) suburbs want new businesses but not the housing that comes with it. “We went to the moon,” she said. “We are capable of large structural change.”

But she has also largely stopped trying to change the minds of tenants’ rights activists who think market-rate development can make rents rise. “What they get confused is the difference between landlord interest and developer interest,” Clark says. But she gets it, too.

“There’s this level where things are shitty, rich people are coming in, and you see those condos and you think: ‘Fuck those condos, if I can stop the condos I can stop the change.’ But the rich people are coming anyway, and if there aren’t condos, they’re coming for your apartment.”

*Correction, June 28, 2017: This article originally misstated that San Francisco supervisor Aaron Peskin used a colorful metaphor to describe YIMBYs in an interview with Modern Luxury. The interview was with San Francisco magazine. It also misspelled Darby Thomas’ last name. (Return.)


          Stanley and the Giant Shekel        
For those of you not living the Shekel-Dollar drama of the past year, I wanted to give a quick update. Twice over the past year, the Israeli export economy (including all high tech), has been jolted by the rapid strengthening of the Israeli currency. Versus the Dollar, the Shekel gained almost 25%, then lost it, and was most recently showing worrying signs of strengthening yet again. This might be great for those Israelis traveling abroad during the August vacation, or Israeli peddlers of Ahava Dead Sea products in suburban American shopping malls, but it’s downright awful for the industrial and high tech sector! In the current economic environment it’s probably the worst possible thing that could happen, especially given our natural dependence on exports.



The drama with our central bank started back in March of 2008 when the Shekel reached a low of 3.2 to the Dollar (after sitting around 4.2 for an extended period). Chairman of the Bank of Israel(our Federal Reserve), Prof. Stanley Fischer, announced he would start purchasing $25m a day to take advantage the strong shekel and increase Israel’s foreign currency reserve which then stood at $29bn. It worked for a while, until the Shekel began to steadily rise again. Most recently, Fischer started spending $100m a day; taking Israel’s reserves to an all-time high of $51 billion (India only has 5x that amount). Today he aggravated many and committed himself to a different form of intervention spending anywhere between zero to several hundred million dollars a day.

Most countries have the opposite problem of too weak a currency, which creates a real burden for individuals and the state when purchasing vital imports and natural resources. Our problem is that because Israeli exporters sell their products in Dollars and Euros, the rising cost base of Israeli companies (labor) actually threatening the country’s long-term competitiveness. Our shiny new car is cheaper, but the owner of our R&D center is already drawing up plans to move the facility to China.

There are many potential causes for the rise in the Shekel, including the weakening of the dollar versus most other currencies. We can speculate about speculators, about Israel’s pending entry into the OECD and pending upgrade to “developed country” in the MSCI composite. However, the real problem is that our economy and currency markets are simply too small, and easily moved by large transactions such as a block sale of stock. It’s notoriously difficult to assess the true value of a currency, but as a consumer and venture investor, I know the shekel is too strong. Unfortunately, the Big Mac index doesn’t really support my view, but it doesn’t matter (it doesn’t negate it either). Take it from me when I say Israel needs to be at a discount to the US market, and when the cost of high tech labor approaches that of the US, we venture capitalists start pondering our 6-day work weeks and trans-Atlantic jetlag.

For start-ups that take their investment in dollars and spend in Shekels, the fluctuations can be hazardess. As a board member, I advise my start-ups to use a conservative exchange rate for budget planning and then to lock-in at least 9 months expenses at a fixed rate.


Bank to Stanley.
At first analysts and columnists predicted that the Bank of Israel would fail to tame the free market, but they were forgetting that the Bank has infinite resources at its disposal…the ability to print all the shekels the world wants. As long as there are buyers, Stanley is happy to keep the mint working overtime. As a reminder, this is not a repeat of the fabled battle of George Soros against the Bank of England, but the opposite!
Like me, Fischer is an import from Washington, and former citizen of an African apartheid state (Northern Rhodesia). He likely doesn't remember, but I met him in his Georgetown home in the early '90s when he was at the IMF, and discussed our mutual interest in Israel and Zionism. The point I am trying to make is that one should never underestimate the resolve of such an accomplished immigrant. Fischer may halt his dollar buying binge for other reasons, but I am rooting for him day and night…and so should you if you want Israeli high tech to succeed.

          Cuba’s Future? It’s Up To The Cubans        

The US and Britain are not in a position to lecture Cuba on the nature of ‘democracy,’ writes Bernard Regan.

Following President Barack Obama’s release of Gerardo Hernandez, Ramon Labanino and Antonio Guerrero, the remaining three of the Miami Five, to join Rene Gonzalez and Fernando Gonzalez back in Cuba there has bee much speculation about the future of Cuba-United States relations.



Obama has claimed that political relations between Cuba and the US are about to enter a “new chapter.”

It remains to be seen just how much of a new chapter will be written, but what is certain is that the US and its allies will once again be criticising Cuba framed around such topics as “democracy.”

Let’s be clear. Washington is in no position to lecture anyone about democracy.

Few, if any, of Cuba’s critics ever pause to ask the question: “What is meant by democracy?”

After all, there are many forms of democracy and even when countries have had elections, the US has often ignored the outcomes unless they produce governments Washington approves of.

One only has to look at Venezuelan President Nicolas Maduro’s 2013 victory to see what scant regard the US has for electoral processes.

On December 12 the US House of Representatives voted to impose sanctions against Venezuela.

Similarly, in Palestine an internationally observed open electoral process returned a Hamas majority in 2006 which the White House and its Israeli ally refused to accept.

A blockade was imposed on Gaza which to all intents and purposes is still in place.

The White House and Wall Street are not interested in democracy — they are interested in achieving their own political and economic agendas.

When president George W Bush established the Commission for Assistance to a Free Cuba in 2003, chaired by secretary of state Colin Powell, the May 2004 report made clear that the objective was to achieve a transition “from communism to democracy and free markets.”

The White House press statement on Cuba issued on Wednesday December 17, coinciding with Obama’s speech, made clear that the change in policy was because the blockade had not worked.

It emphasised that “options for promoting the growth of entrepreneurship and the private sector in Cuba will be explored.”

The statement made clear that the expansion of “commercial sales/exports from the United States of certain goods and services … will seek to empower the nascent private sector.”

It is there for everyone to see that any US funds to Cuba will be to spur on the private sector.

The big US corporations will be looking to take over the island’s economy.

We know only too well from our own experience what will then happen to social welfare, the health service and education as a result.

“Democracy,” in the language of the US administration, is simply a euphemism for “privatisation” and the restoration of unfettered capitalism.

Anyone who doubts this should look at the contract-grapping exercise by US companies that accompanied the introduction of “democracy” to Iraq.

Cuba’s achievements in the fields of medicine and education are because of the kind of government it has, not in spite of it.

When the Soviet Union ended in 1990, the Cuban economy faced a catastrophic collapse, losing 70 per cent of its imports — far more significant than the impact of the 2008 banking crisis in Britain.

Notwithstanding that, Havana maintained the education and health services. Not a single teacher or medic lost their job. People did not starve to death. What a contrast with Britain today.

Why were education and health protected in Cuba? Quite simply put, because they are rights, alongside a host of others, which are written into the constitution of the country itself.

To pass over these gains as though there was no relationship between the nature of the state, governmental forms and economic policies is a mistake.

Shouldn’t we regard good-quality health and education, protection in employment and decent pensions as essential to any democracy? Shouldn’t they be seen as rights?

The US understands the relationship between state, governmental forms and political outcomes far better than many.

That is why Washington wants “regime change” in Havana.

It recognises that it is the Cuban state which defends these gains.

Let us then turn to the question of democracy in Cuba. To begin with, one might wonder what model of democracy should the Cubans adopt?

Perhaps that of their neighbours to the north, where money determines votes and the real competition lies in who gets what for their financial backing of the presidency?

Or to the mainland to their west, Mexico, where elections in 2006 and 2012 were marred by massive ballot-rigging, 43 students have disappeared and thousands of others have been murdered?

Or maybe the British system, where a handful of press barons constantly seek to manipulate public opinion to their own advantage?

What about an unelected second chamber and an unelected head of state? The right of recall of parliamentarians? What about public expressions of opinion like the multimillion demonstration against the Iraq war?

Which of these examples of “democracy” should Cuba look to?

And if the answer is “none of the above” then let’s have a serious discussion about how countries should be run, rather than repeat the tired tropes of the press barons we all despise.

The truth is that there is no “perfect” form of democracy.

Each and every governmental form has been the product of years of history and is the outcome of social, economic, political and cultural factors.

Cuba should have the right to decide its own constitution, what changes to make to it and when.

The parliamentary structure that exists in Cuba is not the same as that in Britain.

In the pre-revolutionary days before 1959, political parties were the pawns of US mafia gangsters and their Cuban acolytes.

Corrupt to their core, they were backed by “pistoleros” who enforced the will of the gangsters looking to protect their “assets” in the casinos, brothels and money rackets that abounded.

Today there are national elections every five years, with candidates nominated by their peers in contested elections. Political parties, including the Communist Party, are not allowed to stand.

Candidates have to take part in hustings, have their biographical details published, accept that their electors have the right of recall and are paid based on the salary that they earned in employment.

The composition of the Cuban assembly far more corresponds to the social background, gender and age of its constituents than the British Cabinet or even Parliament, stuffed as it is with bankers, lawyers, ex-military, millionaire private school miseducated individuals.

Of those elected to the Cuban National Assembly in 2012, 49 per cent were women and 80 per cent were born after the revolution in 1959.

In Cuba the involvement of the people in decision-making is not restricted to parliamentary elections once every five years, as it is in Britain.

When the government in Havana proposed wide-ranging changes to the economy in 2008, for example, exhaustive discussions were held in local community organisations, professional bodies, trade unions, women’s organisations, student bodies and workplace meetings.

These discussions generated 1.3 million proposals, many of which were incorporated into the final decisions.

What British chancellor has even entered discussions with his own government, let alone the broad mass of people before laying down the Budget in Parliament?

When were local communities and mass organisations ever consulted on the government’s economic proposals here in Britain?

Many commentators seem to assume that a complete change in relations between the US and Cuba is imminent.

They may be right.

But while Obama has the power to vary aspects of the aggressive policies imposed on Cuba, he will need the backing of Congress to remove the most pernicious structures that underpin the blockade — the Helms-Burton Act and the Torricelli Act.

It is these two pieces of legisl