A Sinkhole That Is Pulling Us All Down

While most local papers probably did not splash the news on their front page or headline their evening news last week, our largely bought Congress just gave the Military-Industrial-Complex (MIC) a sizable raise in thanks for their contributions and lobbying pursuits. President Trump's initial budget request for the Pentagon was for a sizable $54 billion increase for the military last February. This proposed hike to $668 billion, while sizable by any measuring stick, was not enough for our Congressional members (with rare exception). This past week in their rush to show their true patriotism (cough, cough) they upped the ante by a most generous $32 billion taking it to an even $700 billion.  Of course, they will now all be able to tout how they are strong on defense as they hit the campaign trail. But put this in the perspective of the new budget proposal as the National Priority Project just did and your eyes might water as we invest in permanent war.



Of course, when they dream this stuff up they aren't thinking of budget balancing or deficits or least of all the robbery of our treasury so that we can't rebuild our infrastructure, care for our veterans or seniors, provide better education and health care and develop our communities with renewable energy and other green technologies that make living in the future better for everyone. Never mind either that those types of investments in real human security produce way more jobs per $1 billion dollar of investment than does equal money spent on the military.

But perhaps this isn't enough reason to balk at suggestions from MIC lobbyists to throw more money into weapon systems.For any willing to follow any of the many who shine the light on military waste and corruption there is plenty more reason to plug the leaks of our tax dollars into their coffers. William Hartung, director of the Arms and Security Project at the Center for International Policy and one of those who have toiled for years to follow the money in the MIC showed in a post last week how some of this game is played. In this piece he lays out the influence peddling in the nuclear weapons arena as just one example. To get your blood pressure up a little more read any of his earlier works or reports to see how corrupt the system is.





Or from a slightly different angle take a look at a report last week from the dedicated folks at the Project on Government Oversight. This highlights how even when we empty our purses for the Pentagon,  requesting how those dollars are performing is a bit too much to ask. The fact that the Pentagon has escaped any complete audit for decades might give you a hint. A few of those crazy (yes bipartisan members) have asked that such an audit be required before we hand over any more money.



The almost total capture of the Congress by the myth of more military spending means a more secure world should be easy to show. 16 years of war in Afghanistan and thousand of American lives lost, which are dwarfed on the losses sustained by the Afghan people, have made the country and its people no better off. Trillions of dollars for regime change in Iraq (or was it weapons of mass destruction - seems like we did the mass destruction with our relentless bombing)  in Iraq destroyed the country.

Yet, each budget cycle the relentless, and may I suggest stupid, belief that only adding more force will solve the problem is a pompous American belief. You don't need to believe me. Read what military people themselves say. Three I look to are Andrew Bacevich, William Astore, and Danny Sjursen.



But let me suggest the sinkhole of military spending is about to take an exponential leap based upon recent actions by the MIC in partnership with their key friends in Congress. A report in last week's trade publication for all things military, Defense News, gives a glimpse of what's to come - "Congress to MDA: Prepare for Spaced-Base Missile Attacks" . Yes, that's right - Congress is calling the shots on this, not the Pentagon. Earlier this year I saw hints of this when I noticed a new piece of legislation co-sponsored by my own Senator Gary Peters. A recent addition to the Senate Armed Services Committee, Sen. Peters and his conservative colleagues propose and elaborate on a space based military presence in their S.1196 "Advancing America's Missile Defense Act of 2017".

It's clear to this reader that the authors of this bill drink from the "technological optimism" fountain. Those that drink from this fountain believe that whatever ails us, there is a technological solution. And not only are they sure of its success, they are unencumbered by consideration of any 'unintended consequences' or what economists refer to externalities. Neither of course do they consider, to borrow another economics phrase, 'lost opportunity costs'. There can be little doubt that these grand plans come from the many millions the MIC invests in lobbying. For an excellent consideration of concerns with 'technological optimism' read economist Robert Costanza's provocative look at the future through various lenses in "Four Visions of the Century Ahead: Will it be Stark Trek, Ecotopia, Big Government of Mad Max" written on the eve of this century.

This bill has no price tag of course. But once we are shown that we can't live without it, to oppose it will mean you are 'soft on defense'. The F-35 boondoggle, perhaps the Pentagon's largest cost overrun of all time (and the planes are still not fully operational) has parts of it built in moire than 400 of the 435 Congressional districts. That's not accidental. If a Congress person argues to cut funding for a failed program, the threat to local jobs has them rethink that originally prudent consideration. The MIC knows this.

That notion is alive as a perfect example in my own beloved state of Michigan. Here all but one member of the Michigan delegation signed on to a letter to the Pentagon to select Ft. Custer, near Battle Creek in southwestern Michigan as home to a new Ground Based Missile Defense System. Battle Creek area like many in Michigan can use a hand, and Ft. Custer is underutilized. But this proposed $3.2+ billion project was not requested by the Pentagon. A Union of Concerned Scientists report highlighted other problems with the addition of a third ground based missile defense site (existing sites are located in Alaska and California). Number one being that the likelihood of it working is questionable. Oh, and two, the Pentagon hasn't asked for additional sites.

This is a textbook example of how MIC works. First ingredient is fear. You absolutely need to be afraid of some possibility to occur for which the weapon system must be developed and deployed.. Since the West coast already has two of these sites, of questionable effectiveness - to perhaps save us from missiles launched from N. Korea, China, Russia or Pakistan, now we need protection from the Iranians, who no doubt think that if they launch a nuclear missile (they don't have), they could possible take out all of our missiles scattered around the world, many on moving submarines. Once the fear is established then you need Congress to bring home the bacon, or pork. So the race is on to see who can win the prize.

Now as a Congressional member it may seem like a worthy effort to secure the missile system for your backyard, but a wise soul might entertain some second thoughts. If you really want to bring jobs to your community there are a few problems with this. The major component of the system is, you guessed it, missiles. These are made by our friends at Boeing. So they won't be built here. Then there is the concern that money invested in military doesn't produce  near as many jobs for dollar of investment as does education, health care, infrastructure or green technologies. All of which would make the world a bit better off. And all of which become lost opportunity costs if the money is diverted to these weapons systems. But then, there is the fact that the chances of these expensive systems actually working in a real event are slim. Seems like a high-risk, low profit investment.

And we really haven't even discussed perhaps the biggest elephant in the room - outright military waste. The Pentagon did a study over five years and found $125 Billion in waste. It tried to hide the report but it was just last December by the Washington Post. One can only wonder how much additional waste might be identified with an audit of all of its operations including more than 800 military bases scattered around the world.

I don't believe in simply criticizing without offering alternatives, or in my parlance "possibilities". So here is one such possibility. At the end of the Cold War there was an expected 'peace dividend' that we never received. There was talk and consideration for a brief time of something called "economic conversion". The idea was to convert existing facilities to non-military community development opportunities so as not to disrupt the closure of a facility on a local community. The emphasis was also on decent employment for those who would otherwise lose jobs from the closure. Base closure has become almost impossible, largely because of the impact on the community and no civilian  reinvestment in the community. Legislators fight fiercely to protect their community regardless of the overall benefit to the country.

Providing economic conversion funds that are managed locally by communities will relieve the Congress of fighting for programs none of us need and do not make us safer. We should reduce funding for the military and shift it towards conversion that builds stronger communities with emphasis on green technologies, enhanced education and health care, and other local infrastructure improvements. All of which create more jobs. That's where we'll find real security. Now we need to elect members of Congress who can look beyond the paid lobbyists and seek out real alternatives to war and militarism. Otherwise we'll all be sliding into that sinkhole.



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Putting a Lid On It

It is time for me to get off my duff. I have been sitting safely a bit too long, ensconced in my middle class security. A security a majority can't share. Time to push forward some radical possibilities. Here's one to start, some of which I've hinted around in the past.




It's time to enact a maximum wage. 

More often our political forces focus on increasing the bare minimums, but the more conservative voices claim that giving the bottom a raise will cost us all more, prices will go up, yada, yada, yada. If that theory holds water, and I'm not suggesting it does, then capping the maximum income should reduce the costs to everyone, right?  There is enough for every one's needs, but not enough for every one's greed. And the data of increasing capture of wealth by the wealthiest is inscribed in the frequency of reference to the 1% and the 99%. 

We can't grow an economy based upon the consumption of more stuff on a finite planet with an increasing population and expect any outcome down the road beyond disaster. It just isn't possible, thermodynamics and the other laws of nature are against it.

I'm not suggesting that we shouldn't raise the floor too, either with a sizable minimum/living income adjustment or perhaps even as Finland is beginning to try - a basic guaranteed minimum income for everyone. But let me focus on a couple of strategies to set a maximum income. The foundation of my argument is that  Gandhian bumper sticker, "There's enough for every one's need, but not for any one's greed."

 So what might this look like. These figures are based on US economy.

The current median household annual income is approximately $50,000 (keeping these numbers rounded makes it a bit easier to calculate). One can surely also develop much more complex systems than the ones I am proposing The median is the point from which half the households make more, and half make less. I can't imagine that anyone currently at that midpoint $50,000 would find it a struggle to get by on 10 times that amount in a year. Just think of being lucky enough to make that much year after year!! So let's start the bidding at a maximum $500,000 annual income.

Another way to look at this is that the typical working life is about 50 years. So someone making $500,000 in one year would be about the same as a current minimum wage worker would make in 33 years.

$500,000 is about what the president makes in a year ($400,000 salary, + $50,000 living expenses, + $19,000 living expenses + travel + housing). So why not cap income there. Roosevelt and Congress increased the progressive rate on income over $200,000 (1945) to 94% against the cries of the conservatives of the time. Note that as a country we enjoyed our greatest sustained growth and simultaneous contraction of income inequality in the years between 1945 and the end of the Eisenhower administration when that top tax rate was reduced.

While number crunch-ers might make arguments for capping incomes at a different level or adjusting the top tax bracket a bit differently, perhaps the main impact would be how we as a society reconsider what wealth, prosperity and sharing mean.  The no-holds-barred approach to stuffing as much as one can in one's pocket, everyone else be damned, isn't a mores that has a happy ending for an increasing population on a finite planet. The average incomes of the 1 percent, let alone of the 0.1 percent, are significantly more than this threshold. A recent Economic Policy Institute report finds the average income of the 1 per-centers is $1.3 million and the minimum is $385,000.



See the detailed state by state list here.



Now I can foretell some criticism from those who think it unfair to those who could make more. Heck, some of our celebrities make that much from one performance or one speaking engagement. How will they manage to get by if we cap their income? A further canard is the one about how the top performers, be they athletes, CEO's, actors, lawyers, physicians, non-profit directors, university administrators and football and basketball coaches will stop working or performing. Surely no one does any work in our time for any reason other than money, right? But this is one place where the market harms us by essentially creating an arms race. Just look at the salaries of collegiate football and basketball coaches over the past decade or two.

Well, another approach could be to tie-bar the maximum wage to the minimum wage. They could  be set as some magic ratio. For example the average Fortune 500 CEO is taking in about 204 times their median employee. Of those 500, 150 of those firms ratio is higher than that. That seems a little high to me. Take a look at the list of companies, some of which you no doubt use to see how they stack up here.

But we could decide to make it 10:1 or 50:1 for example. Or we could set a specific minimum wage and a specific maximum income. Robley George presents a variety of possible approaches including a annual citizen vote on setting maximum and minimum in his thoughtful book Socio-Economic Democracy.

Seriously, we need a discussion of what's enough, what is sufficient, and what's too much?

Even steadfast believers in the power of markets recognize that for markets to function well there needs to be access to relevant information so consumers can make judgments based upon the values they hold dear, e.g. quality, durability, integrity, fairness. While markets should surely not be making all the decisions we need to make in a human society, to be useful they need transparency. So we need full disclosure. The public good demands access to the information that impacts us and the natural world that sustains us.

New rules adopted by the Securities and Exchange Commission (SEC) last summer require public companies, beginning in 2017 to disclose the ratio of CEO pay to median worker pay.

Highlights of the New Rule

Pay Ratio Disclosure Requirement

As required by the Dodd-Frank Act, the rule would amend existing executive compensation disclosure rules to require companies to disclose:

• The median of the annual total compensation of all its employees, except the CEO;
• The annual total compensation of its CEO; and
• The ratio of those two amounts. 

I suggest that this rule be applied to any enterprise, public or private, profit or not for profit, or governmental agencies that receive any contracts, tax credits, or other federal government assistance. 

While the rule would force this obligation on any sanctioned enterprise, it isn't necessary for any enterprise to wait to do this on their own. Organizations which operate in good faith should be proud to post this level of information on their website. This refreshing transparency would allow citizens to judge for themselves whether to purchase from, invest in, or donate to the enterprise. Transparency also has the extra advantage of tempering corruption. As the saying goes, sunshine is the best disinfectant. 

Let the sun shine!!

Credit and the Public Good, Part 1

(An earlier version of this was published in City Pulse, a local alternative weekly serving Michigan's Capitol region.)

I suspect that few folks reading this don’t have an account at a bank or credit union. I belong to two credit unions. Credit unions differ from traditional private banks in that they are member owned. This makes it all the more interesting that when I wrote the credit unions I am a member of to ask how we pay our employees, I received no initial response. I asked for three simple figures:
       • What is the minimum beginning wage for a full-time employee?
       • What is the median salary of all employees (the amount that 50 percent of employees make more or     less than)?
       • What is the wage ratio from the bottom to the top?

I looked at their websites before I sent this request, but there is almost no information about how either credit union compensates it employees. I thought OK, I can see where they may not want to share with the larger public, but I was taken back that they wouldn’t share this information with its members/owners.

Now the genesis for this query comes from the physical expansion of both credit unions, which are both statewide entities. Members seem to have no say in the decision-making that goes into this, even though we are member owners? There is little if any transparency in the decision process. The boards has no minutes shared or posted of their deliberations. And in only one case is there even any slim excuse for a financial statement that might allow a member to judge if the expenditures for expansion are warranted.

In the midst of this query into local banking, I tripped upon a new web site http://banklocal.info/ . This site allows you to type in your city and see a rating of local financial institutions and how they rank. They use seven criteria pulled from publicly available data: 
1) Small Business Lending, 
2) HQ Location, 
3) Bank Branch Concentration,
4) Ownership Type,
 5) Bank Size,
 6) Small Farm and Agricultural Lending, and
 7) Speculative Trading. 

They then aggregate scores and rank banks/credit unions according to their impact on the locale. The scoring system is spelled out, so one can decide if the scoring reflects one’s own values.

Lansing has a number of institutions that score STRONG, the highest rating. Neither of my credit unions made that category, each coming is as MODERATE. This was somewhat surprising because credit unions and mutual savings banks get an extra point over shareholder-owned banks. Of course, as I mentioned, one can take issue with the criteria selected in this rating system. But the more important issue for this credit union member is, does the place where I bank align with my values. It wasn’t that long ago when we were looking to refinance our home after interest rates fell that we went shopping for a new mortgage. Universally the loan officers we approached and asked how their funds were invested were surprised that we would ask such a question. I mean, after all, isn’t this activity only about money and the best deal for me? Why should we be concerned about whether the bank invests most of its money out of state as long as my interest rate stays low?

Three of the rating criteria used by Bank Local are around what they do with the money we lend them — do they lend to small business; do they lend to small farms; and do they engage in speculative trading. The website allows you to see how each bank/credit union scores in each criteria. It’s not the most complete transparency that I would like when choosing a financial institution to do business with, but it’s certainly adds some perspective to consider. I still want to know how they share the wealth within the business, thus my three-part question. I’m ready to move my accounts to a financial institution willing to tell me what my money is doing for others. Is there any bank or credit union in this community that is willing to do so? I decided to try one of the STRONG rated credit unions in the area, asking my three questions, indicating that I was shopping for a new home to house my finances. I was promptly and politely informed by the VP of human resources for that credit union, that while they were very proud of their treatment of employees they would not disclose this information to me.

Thinking that this might be a reasonable response to a non-member, I replied asking if I would be able to get this information if I became a member. I’m still waiting for responses. My search for a credit union to bank with continues. You can follow my learning journey here.

Strange Alignments - Trade and Democracy

As the battle for fast track status for the Trans-Pacific Partnership (TPP) continues watching the alignments for either side form has been curious at least. President Obama and generally progressive Senator Ron Wyden (D-OR) have been bullish on the pact, as of of course has been conservative stalwarts like Sen. Orin Hatch (R-UT) and Sen. Mitch McConnel (R-KY). Obama claims that if we don't pull this off soon (thus fast-track) will lose a big opportunity to control trade relations with China. 

Critics like Senators Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT) are claiming that not only is the deal secretive from the public, as the Intercept reported recently,

        " So who can read the text of the TPP? Not you, it’s classified. Even members of Congress can only look at it one section at a time in the Capitol’s basement, without most of their staff or the ability to keep notes. But there’s an exception: if you’re part of one of 28 U.S. government-appointed trade advisory committees providing advice to the U.S. negotiators. The committees with the most access to what’s going on in the negotiations are 16 “Industry Trade Advisory Committees,” whose members include AT&T, General Electric, Apple, Dow Chemical, Nike, Walmart and the American Petroleum Institute. "

But critics argue the agreement will likely empower global corporate behemoths to override local (national) policies. Wyden and Obama deny this, and suggest that pending legislation for fast track has safeguards and enforcement and a window of 90 days where citizens can read and debate the final agreement before Congress votes it up or down. Wyden clearly sees the TPP, if done right, as an economic boon for his home state of Oregon. East coasters like Warren and Sanders constituents won't see the same benefits as Wyden's. But are Wyden's and Obama's faith in global trade regimes misplaced?

Nobel economist Joseph Stiglitz thinks so.

     " The real intent of these provisions is to impede health, environmental, safety, and, yes, even financial regulations meant to protect America’s own economy and citizens. Companies can sue governments for full compensation for any reduction in their future expected profits resulting from regulatory changes."

 And so do groups as diverse as Public Citizen, Doctors Without Borders and the Electronic Frontier Foundaton....


A study just released this week by The Guardian of financial contributions to the Senate between January and April of this year shares some interesting findings.

     "Fast-tracking the TPP, meaning its passage through Congress without having its contents available for debate or amendments, was only possible after lots of corporate money exchanged hands with senators. The US Senate passed Trade Promotion Authority (TPA) – the fast-tracking bill – by a 65-33 margin on 14 May. Last Thursday, the Senate voted 62-38 to bring the debate on TPA to a close. Those impressive majorities follow months of behind-the-scenes wheeling and dealing by the world’s most well-heeled multinational corporations with just a handful of holdouts. 

Using data from the Federal Election Commission, this chart shows all donations that corporate members of the US Business Coalition for TPP made to US Senate campaigns between January and March 2015, when fast-tracking the TPP was being debated in the Senate."

While it might be hard to prove a quid pro quo with these donations, what they do show is that the increasing inequality and the power of the 1% to shape policy. They have access via cash contributions and invitations to participate in trade advisory committees that typical citizens do not enjoy. One of the findings in The Guardian study stands out as representative of that power.

• In just 24 hours, Wyden and five of those Democratic holdouts – Michael Bennet of Colorado, Dianne Feinstein of California, Claire McCaskill of Missouri, Patty Murray of Washington, and Bill Nelson of Florida – caved and voted for fast-track.
• Bennet, Murray, and Wyden – all running for re-election in 2016 – received $105,900 between the three of them. Bennet, who comes from the more purple state of Colorado, got $53,700 in corporate campaign donations between January and March 2015, according to Channing’s research.

 The only antidote to the hijacking of our democracy is for citizens to use their voice and and their vote. The proposed rush to get this deal done has its own unpleasant odor to it. Wyden and other supporters of this deal look to see the US profit from such agreements.  But with the rules rigged, there will be losers, and something tells me it will be the 99%.

Ending Hide and Seek

Who’s Afraid of Information?

It has been said that sunshine is the best disinfectant. Why is it then that so many who seek wealth and/or power want to hide the process by which they acquire and use it? If there is a cry to hide information from those who can use it to make decisions that affect their lives, can it be that the powerful are afraid of sharing information?

The ongoing battle against transparency is getting more volatile. The Citizens’ United ruling allows wealthy donors to hide their efforts to affect election outcomes. Monsanto and other big food corporations don’t want consumers to know which foods are genetically modified. The government doesn’t want us to read about atrocities (torture,drone killings, etc.) done in our name.

Joseph Stiglitz won his Nobel award in economics based upon the basic notion that without full information even the miracle of markets do not work and that transparency and access to information are essential for consumers to make informed decisions.

                

          “Transparency is about information, the obligation to provide it, and the right to      access it. As such, it is an important concept in the effort to achieve sustainability in politics, economics, environmental well-being, and numerous other fields. In any field, information is needed for decisions, and informed decisions are likely to be better than decisions made in the absence of good information. Strong transparency policies enhance the availability of information and thus provide the informational framework for good decisions and good practices in both the public and private sectors.”  (William B. T. Black, Professor of Law “Transparency” in Achieving Sustainability: Visions,Principles and Practices (Gale/Cengage, 2014) p. 742.

The stakes of the game are being raised.  Note the recent announcement by Charles Koch that he and his brother David hope to raise and spend nearly $1 billion on the run-up to the 2016 election campaign and most of it will be untraceable. I’m pretty confident that thanks to Citizen’s United the Koch Brothers will not be alone among the wealthiest trying to use their exorbitant wealth to affect the outcome of our supposedly democratic election. At a time when we need to rely on skilled and dedicated journalists and news organizations to do the muckraking that can inform us who is pulling the strings in our society, the daily news organization is decimated.

During the recent fight over a new farm bill, the handful of global corporate giants who control a majority of the food system successfully lobbied to kill stronger requirements even for country of origin labeling on some foods. Senator Barbara Boxer with 13 co-sponsors just introduced legislation (S.511) that would require food that has been genetically modified to be so labeled. If the marketplace is supposed to work, consumers ought to know what they are buying.  It would also be nice if we knew who’s getting rich off who when we make a purchase. Could we post the pay ratio of a business on it’s website or on its door, or perhaps the minimum and median wage of the employees. It would help me make an informed decision when selecting retail establishments. 

Regardless of one's personal views on Ralph Nader, we can thank him for pushing the idea of Freedom of Information, which is now not only a legally transcribed avenue here in the U.S. but in numerous other countries as well.  If we don't know what our government is up to, how can we hold them accountable. In Michigan we have someone like Rich Robinson

 

who has the led the Michigan Campaign Finance Network which has helped provide access for citizens to the money affecting election campaigns in this state. 

We have a right to be skeptical when the powerful want to hide information from us. Hiding information from consumers and citizens releases the odor of corruption. As the powerful gather more and more wealth and more and more power, we should demand more transparency, not less. Even glorified markets can't work without sunshine. Let's open the curtains!!!