Pointing the finger

The House Republicans obviously don’t give a damn about the Havenots, the millions who are poor, hungry, or homeless. But that’s hardly news. Now they’ve set their sights on the so-called working class, although millions of Americans still lack jobs. To inflict further pain and suffering, the GOP intends to abolish federal agencies whose charges include ameliorating the plight of at-risk citizens and cleaning up an at-risk environment. The Republican mantra is as simple as it is insidious and benighted: keep lowering taxes and cutting budgets.

The Right will tell anyone and everyone that they’re all about fiscal responsibility. After all, they claim with tongue firmly embedded in cheek, governments should behave like prudent households: carry no debt and spend within your means. Since nearly every government at every level is running a deficit, the solution is to cut, cut, and cut some more. But by all means, don’t increase revenues.

And while we’re at it, the Republicans continue, let’s eliminate those programs that help our worst-off citizens survive. Slash their basic health plans. Gut unemployment benefits. Abolish welfare.

Yet, such draconian measures are not only heartless they’re also lousy economics.

A while back Moody’s produced a version of the this linked graph (bang-for-buck). It shows the multiplier effect of a dollar spent or un-taxed in selected ways.

McClatchy News, one of the few papers to expose the inanity of Bush’s Iraq adventure, has published a report of states’ efforts to reduce taxes, ostensibly to stimulate their economies. It hasn’t worked.

Their willingness to forgo needed tax revenue is hard to fathom, as states face a collective $125 billion budget shortfall for the coming fiscal year, said Jon Shure, the deputy director of the State Fiscal Project at the Center on Budget and Policy Priorities, a respected liberal research institute in Washington.

“To be cutting taxes when you’re short of revenue is like saying you could run faster if you cut off your foot,” Shure said.

The logic is not difficult to follow. By lowering tax rates during relatively robust economic times, states have incurred a double whammy during recessionary periods, as the costs of providing public services—supplied only by governments—rise while revenues decline.

“My argument to state lawmakers is that lower rates for everybody are better than tax incentives for some,” [Tax Foundation President Scott] Hodge said.

That incentive-free philosophy was behind Michigan Gov. Rick Snyder’s call for a flat 6 percent corporate income tax to replace the current business tax system. But Snyder’s flat tax amounts to a $1.5 billion tax cut for businesses, paid for in part by education cuts, personal income tax increases and taxing public and private pensions.

“We think that’s the way to rebuild our state, and to get it on a path toward economic prosperity,” Snyder’s top economic development official, Michael Finney, said during a recent trip to Washington.

History suggests otherwise, however. After the nation recovered from the 1990-91 recession, 43 states made sizable tax cuts from 1994 to 2001 as the economy surged. Twenty-eight states, in fact, reduced their unemployment insurance payroll taxes after 1995.

But states that cut taxes the most ended up with the largest budget shortfalls and higher job losses when the economy slowed again in 2001, according to research by the Center on Budget and Policy Priorities.

I submit that from a moral perspective, the suffering incurred by our least well-off can and should be blamed on those who wish to both cut taxes and squeeze government budgets. So, when you read about someone who has to forgo prescription drugs to treat a serious ailment, because of budget cuts, blame it on the Republicans. When you see long lines in front of a local food bank, blame them on the Republicans. If an elderly person is forced to eat cat food, blame it on the Republicans. Should you be encountering potholes in the roadways, blame them on the Republicans. When public school teachers are forced to live in trailer parks, blame this on the Republicans.

The GOP and the Tea Party may have done us a favor by revealing themselves as soulless bastards. Now it’s up to the rest of us to exploit the revelation in a concerted call for decency and sympathy. Yep, that means higher taxes on the rich and expanded public services.

Golly, that sounds so socialistic. Amen.

Hark back to Bush

This essay first appeared in the Marysville Globe, July 2002.

In a much anticipated speech before Wall Street “wrongdoers,” George Bush the Second vowed to restore confidence to investors by doing “everything in [his] power to end the days of cooking the books.” The P-I cartoonist, David Horsey, used the occasion as an example of “simile”: the president talking about corporate ethics was like Monica Lewinsky talking about chastity. The next day, Bush announced that he would make it illegal to use the book-cooking schemes that he himself had employed as a director of Harken Energy in his Texas “bidness” days.

Against the backdrop of “Corporate Responsibility,” Bush’s unctuous words to a roomful of stockbrokers had all the markings of a Cotton Mather sermon. The answer to corporate corruption was to be found in thousands of bathroom mirrors, as if the CEOs of America need only discover one morning, preening themselves for another day at the office, that they were really good people doing bad things. Bush urged “higher ethical standards” on those who would lead the country’s economy—and woe to the few who would stray.

Then he uttered the mother of all fatuous phrases: “There is no capitalism without conscience, there is no wealth without character.” Bush’s claim on Americans’ ignorance vastly exceeds his understanding of U.S. history. The great fortunes of Rockefeller, Ford, Vanderbilt, Astor, Weyerhaeuser, et al. were amassed by unbridled greed, immense political power, and the kind of conscience and character that forces wage-slavers to toil long hours under miserable conditions for nearly nothing. The nation’s first Gilded Age spawned the Progressive Movement, some notable reforms, and even a man in the White House who railed against “the malefactors of great wealth.” Today, the second Gilded Age yields even worse economic disparities, but instead of TDR we get a preacher with soiled hands.

When the modern-day fortunes of WorldCom, Xerox, Enron, Global Crossing—the list keeps growing—are forced to restate billions of dollars of earnings because they were “cooking the books,” an editor of Fortune magazine, the preeminent chronicler of capitalism, responds: “Phony earnings, inflated revenues, conflicted Wall Street analysts [who were promoting stocks that they themselves would never buy], directors asleep at the switch—this isn’t a few bad apples we’re talking about here. This, my friends, is a systematic breakdown. Nearly every known check on corporate behavior—moral, regulatory, you name it—fell by the wayside, replaced by the stupendous greed that marked the end of the bubble. And that has created a crisis of investor confidence the likes of which hasn’t been seen since—well, since the Great Depression.”

Yet, here was George W. Bush, the man of privilege and scion of old money, lecturing the nation like a hypocritical parent: don’t do as I do, do as I say. Junior, as he was known in the oil bidness, can recognize ill-gotten gains because they were a staple of his pre-political career and most assuredly propelled him into office.

After leaving Harvard with an MBA, Bush the Son returned to Texas in the 1970s with some play-money in his pockets and the expectation of striking it rich drilling for oil. With some financial backing from Salem bin Laden, brother of Osama and close friend of Saudi King Fahd, Bush formed Arbusto (“shrub” in Spanish) Energy, then, when his father became vice president, changed the name to Bush Exploration, which promptly lost money before being acquired by Spectrum 7, a company run by several of his daddy’s friends. That company also lost money. But the son of the vice president possesses a certain amount of cachet, not to mention obvious connections to the pinnacles of power. To the rescue came Harken Energy and 600,000 shares for Junior. In addition to the free stock, Bush the Second received a salary and low-interest loans—later forgiven—for serving as one of Harken’s directors and a member of the company’s audit committee.

However, Harken did no better than Bush’s previous ventures. It was spending more money than it was taking in. In 1989, Bush and other directors created a supposedly independent group that paid a wildly exorbitant price for a Harken subsidiary, Aloha Petroleum, which Harken reported as a capital gain of $10 million. But the purchase was financed using Harken money; there was no real sale and no real purchase, just cooked books. The reported “profit” from the transaction masked a bleak bottom line while inducing investors to bid up the price of Harken’s stock. By 1990, the company owed creditors $150 million and had no source of revenue. An internal memo to the company’s directors from Smith Barney warned of a rapidly deteriorating financial  situation.

Junior had set his sights on an expensive new house in Dallas. So he sold some of his stocks at the artificially inflated price of $4 a share to net over $800,000.  That was in June. In July the company reported a net loss of $23 million. The next month Bush’s father launched the Persian Gulf War, which, along with ailing finances, sent Harken’s shares plummeting to less than a dollar. The Securities and Exchange Commission required Junior to report his insider sale by July of that year. He didn’t get around to filing until March of the following year. The SEC, when it learned of the Aloha Petroleum farce, also forced Harken to restate its earnings to reflect a net loss of over $12.5 million for 1989. U.S. News and World Report wrote: “There is substantial evidence to suggest that Bush knew Harken was in dire straits in the weeks before he sold the $848,560 of Harken stock.”

Of course, Enron and “Kenny Boy” Lay turned fraud into an art-form, making the Bush schemes seem like petty kid’s stuff. Along with WorldCom, Merck, and other corporate darlings of deception, Enron parlayed one accounting trick after another into bilking investors and shafting thousands of workers—with the official blessing of Arthur Anderson.

But these are Bush’s people, making money the old-fashioned way—they steal it.

Follow the money

This essay first appeared in the Marysville Globe on Oct. 10, 2001

What a tangled web we weave,

When first we practice to deceive!

  • Sir Walter Scott

In the early 19th century, the French aristocrat Alexis de Tocqueville, having spent several years in the newly formed United States, cited, in particular, Americans’ “love of money,” which he thought to be a necessary engine “to clear, cultivate, and transform the huge uninhabited continent which is their domain.” Tocqueville observed somewhat haughtily that Americans attached nobility to the pursuit of wealth whereas “our medieval ancestors would have called [this] base cupidity.” While Tocqueville and his European contemporaries had evolved beyond the ordinary desire for money, it is altogether clear that the modern American has not; and wealth is still extracted by clearing and transforming the landscape.

Today we call these individuals developers. They buy raw land, scrape away the trees, fill in the damp spots, mark off lots, lay asphalt, then erect in hurried fashion rows of bland-looking houses that stretch from one tract to another as far as the eye can see. And just as quickly, young families fill the new enclosures and add their numbers and their vehicles to the public infrastructures.

In the movie All the President’s Men, the energetic reporters for the Washington Post were urged to “follow the money.” Even in little old Marysville, the same prescription reveals a tangled web of interlocking interests spun by the usual suspects who earn their fortunes by building subdivisions.

Let’s look at some public officials who draw their political sustenance from the development industry. There are two incumbents on the council who do not face re-election this year and who have sided with the developers on a number of votes, in particular those involving impact mitigation fees. Mike Leighan has been openly hostile to the Marysville School District’s repeated efforts to increase developer contributions to funding new schools. John Soriano has sat beside and voted with Leighan on this issue. Both Leighan and Soriano have contributed to the campaign of Tom Grady, who is running for city council this year. Grady’s campaign treasurer, Katherine Smith, also served as Leighan’s treasurer when he ran for re-election in 1999. Leighan and his wife make most of the political signs for growth machine candidates.

Shirley Bartholomew, whom I ran against four years ago, has decided not to seek re-election. However, she has contributed to the campaigns of Grady and Jon Nehring. Council member Donna Pedersen, whose term ends this year, has contributed to Nehring’s campaign.

As of October 4, the day this column is being written, Nehring had raised $2,534. Of this, $500 came from Shelby Construction; $100 from a principal of Belmark Industries, a major local developer and generous contributor to the group Concerned Citizens of Marysville, of which I’ll have more to say later; $200 from Harv Jubie, a prominent local developer; $200 from Stephen Leifer, who is in “construction”; $200 from Jess Darling a local developer; and $200 from Mr. & Mrs. Porter, developers from Clinton, Wash. The Porters also gave $500 to Mayor Dave Weiser’s 1999 re-election campaign.

And speaking of the Mayor, we should spend a little time reviewing his 1999 contributors. They include: $500 from Boyden and Robinett, extremely active developers in Snohomish County; $2,500 from the aforementioned Shelby Construction company; $350 from Jess Darling; $200 from Jim Mulligan, a retired developer; $250 from members of the Leifer family; $500 from Norman Tubbs, who is with Pacific Rim Development in Everett; $300 from Douglas MacDonald, whose father, Arch, left a sizeable estate from development activity; $100 from Michael Leighan; $100 from the Washington Association of Realtors; $250 from the law firm that represents the City of Marysville; and $250 from Tom Grady.

As for Mr. Grady, he has so far reported $5,776 in contributions this year. The largest contribution is from Concerned Citizens of Marysville, which gave $2,000. He has also received $250 from the Affordable Housing Council, the political action committee of the Master Builders Association. Douglas MacDonald contributed $500, and Mike Leighan and his wife have given $250.

John Myers, who quit the council a few years ago and is now running for his old seat, has filed only a declaration of candidacy. He has yet to report contributions or expenditures, even though his signs have been posted all over the city. His campaign treasurer is none other than Kathy Weiser, the Mayor’s wife.

Now for Concerned Citizens of Marysville, the group that is “out to get” incumbent NormaJean Dierck. As of October 4, the group had raised over $18,000—forty percent coming from developers outside Marysville. I’ll list a few of the group’s major contributors: Belmark Industries ($2,000); Barclay’s North, Inc. ($2,000); Darling Investment ($1,000); Bill Roberts, a local developer, former city councilor, and current member of the planning commission ($1,000); Mainline Construction ($2,000); Pacific Rim Development ($4,000); Harv Jubie ($1,000); Gott Construction, a principal of which also contributed to Jon Nehring’s campaign ($200); Pacific Logging ($750); Jim Mulligan ($500); and Ken Baxter, former city council member who also contributed to Mayor Weiser’s 1999 campaign ($200).

Concerned Citizens has reported only two expenditures: $2,000 to the Tom Grady campaign, and $1,000 to the Marysville-Tulalip Chamber of Commerce to fund candidate forums. The $15,000 left in the account will begin to flow to the favored candidates, who are Nehring, Grady, and Myers. As you drive around Marysville, you can’t help but notice the huge Grady signs with smaller Nehring and Myers signs either attached like barnacles or residing underneath.

Four council members compose a majority. Soriano and Leighan are already on board. Donna Wright, the quintessential stooge of all developers, faces no opposition this November. (Nevertheless, her campaign continues to receive contributions from developers.) The growth machine needs to win only one of the three contested races. I’ll have a bit more to say on the races next time.

Shooting fish in a barrel

Carrying on in the best Chomskyan manner, UK’s Media Lens diligently reveals the conspicuous hypocrisy among the media. Their recent posts concern the media’s coverage of the Libyan intervention, comparing, in particular, attitudes toward Gadaffi before and after the indigenous protests began.

Here’s an example:

As a Sunday Times leader made clear on March 20, sometimes you just have to draw a line:

‘[T]here can be no accommodation with a man like Gadaffi or any of his family who aspire to succeed him.’ (Leading article, ‘Allies need a rapid victory to outwit Gadaffi,’ Sunday Times, March 20, 2011)

Seven years earlier, Alan Massie wrote in the same newspaper:

‘The sight of Tony Blair shaking hands with Colonel Gadaffi last week will have disgusted many… One may sympathise with these sentiments but, pushing emotion aside, Blair has shown courage. It would be lovely if international politics could be conducted so you were always dealing with decent people. It might be nice if governments were able consistently to pursue the “ethical foreign policy” of which Robin Cook used to speak so enthusiastically but the world isn’t like that.’ (Massie, ‘Keeping Gadaffi close is the safest option,’ Sunday Times, March 28, 2004)

We Americans are no strangers to such hypocrisy. Consider the photographs of Donald Rumsfeld embracing the hand of Saddam Hussein.

Of course, Rumsfeld, after becoming G.W. Bush’s defense secretary, bombed the hell out of Iraq, invaded and occupied that country, then created the conditions for Hussein’s eventual capture and public hanging.

These and other examples of blatant hypocrisy should disabuse us of any notion that official government statements bear truth or morality. In other words, governments’ actions give us every reason and right to reject their rhetoric.

The iPad2

The few who know me appreciate that I’m an Apple addict, having acquired the original Macintosh, then never looking back to the PC world, except when forced to do so. There is no surprise that I adopted early the Apple laptops, desktops, and now the mobile devices, including the original iPhone 3G and now the iPhone 4. It never stops, of course. So now I’ve upgraded to the new iPad2, having sold the original iPad to Gazelle. The previous laptops and desktops have all been sent down the family tree, which is a nice way of justifying each new purchase.

So, now that I’ve had the newest tablet from Mr. Jobs, what are my initial thoughts over the last few days of ownership?

In a word, splendid.

The iPad2 is much faster. The display is brighter and smudge-resistant. The device is lighter and thinner. The new smart cover is ingenious. Did I say faster?

Of course, describing the unit is a poor substitute for actually using one, as 15 million customers of the original have so far discovered. There is no other device quite like it, given the design, power, and the apps. I have not missed my laptops.

The new iPad has cameras, both front and back. I can see the business community using the tablets for video conferencing or as an alternative to sitting across the table and incurring travel expenses. The video and camera features will be lost on me, however.

Yet, the iPad is not for everyone. For writing, it sucks. I chock that up to old age, since I’ve never gotten the hang of thumb-typing, which the young and hip have nailed. I don’t text. I write this, then, on an Apple wireless keyboard associated via Bluetooth with my Mac Pro. Overkill, I know.

I have to admit that Apple, in its zeal for thinness and lightness, has made some activities more difficult. The ports now sit along beveled edges, which requires some adjustments from the first iPad, where the ports were vertical, rather than angled, to the display. The volume and mute switches have sharper, uncomfortable edges. (By the way, you can convert the mute switch to a display mode lock under the settings menu, a welcome modification in the iOS update.) Controlling the volume via the external switches, then, has become an awkward affair. (I suspect that Jobs’s typical attention to detail was absent, because of his medical leave. Johnny Ive, where were you on this?)

But these are nitpicks. On the whole, the iPad, both the original and the new, are transformational devices. That is, the user will be doing things differently and, I predict, more efficiently and conveniently. Expect businesses to buy and use millions of these for a variety of purposes. It’s only a matter of getting these into different people’s hands. And that’s the key: you really have to experience the tablet to gain a sense of its potential.

I don’t believe the iPad is a fad, as some have suggested. Indeed, it starts a revolution, with apologies to Che.

Capitalism and the Internet

When television first appeared during the 50’s, social commenters slathered encomiums on the pages of newspapers and magazines alike. TV would usher in a new dawn of civilization. For the first time, the masses would be exposed to fine arts, instant news, and the opportunity to witness the fortunes of one’s favorite athletic teams—live. Television, it was suggested, would become the social glue, making us all one America. Grand.

But, as the evidence surely attests, television has become America’s vast wasteland. Instead of refinement and education, we have a collective race to the bottom, with countless reality shows trying their best to out-gross each other, bringing dumber and dumber Americans along for the dismal ride . Rather than uniting us, we have become atomized, watching TV in our living rooms instead of engaging in the stuff of democracy.

Ah, but along comes the Internet, America’s “information superhighway,” intoned Al Gore. If we didn’t quite get there with television, we’ll surely arrive via the system of “tubes.”

Guess what? It’s not happening. But why?

Well, perhaps the failure of both media has something to do with our economic system. The interminable quest for profits, facilitated by a purchased Congress, has transformed two modes of communication (TV and the WWW) into conduits for commerce. We are capitalism’s customers and hardly citizens. So, both the Internet and television deliver consumers to profiteers, just as newspapers have done for decades.

In their joint critique, authors John Bellamy Foster and Robert W. McChesney write:

…In a world in which private riches grow at the expense of public wealth, it should not surprise us that what seemed at first as the enormous potential of the Internet—representing a whole new realm of public wealth, analogous to the discovery of a whole new continent, and pointing to the possibility of a vast new democratic sphere of unrestricted communication—has vaporized in a couple of decades. Competitive strategy in this sphere revolves around the concept of the lock-in of customers and the leveraging of demand-side economies of scale, which allow for the creation of massive concentrations of capital in individual firms.

Like the elimination of free land in the United States, the Internet is being transformed into a few dominant spaces that are thereby able to exploit their scarcity value. The effective “closure” (or displacement) of much of the free public space on the Internet, which now seems to be occurring, means that what was once clearly a form of public wealth in new communicative possibilities, as measured by use values—that is, in the new, universal human capacities it seemed to promise—is giving way to a very different type of system. Here exchange value dominates, and the disappearance of those use values associated with relatively free communication comes to be registered as a gain in wealth, since it produces massive private riches overnight.

I commend the rest of their essay. You’ll begin to appreciate how potentially good things always turn out bad for most of us Americans. Call it ‘The Giant Siphoning.’ Or simply: business as usual.

Fair and balanced reading

I admit it. I don’t read a damn word written by a self-proclaimed conservative. Does that make me simply biased or, worse, ignorant? I doubt it.

First, I cannot comprehend the conservative mind, although I’ve read George Lakoff’s attempts to explain it—metaphorically, of course. I can’t seem to get past the idiocy, and I mean that in a literal sense; an idiot being one who is not only self-absorbed but either incapable of or unwilling to feel sympathy. I know, that definition brings one awfully close to autism. (The Greek origin of ‘idiot’ translates roughly ‘private person,’ or ‘ignorant’—though not necessarily stupid.)

Second, as Paul Krugman suggests, there’s not much useful information coming out of the mouths or keyboards of conservatives. As Exhibit A I offer the incoming Republican freshmen in the House. Or, for that matter, any incumbent Republican, whether in the House or Senate.

That said, it’s probably important to see what the crazies are up to, so as to know where to step. This country is perilously close to electing a Palin or Bachman or Gingrich or Romney or…You get the picture.

Tragically, our man in the White House, or somebody’s man, is doing his darnedest to appease the loonies in the hope of appearing civil and respectable. But it’s tough to smell like a rose after groveling in shit.