Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Thursday, December 22, 2011

What, Exactly Do They Produce?

One of the things that really make me laugh hysterically, to the point of slapping my knee, then leaning back and falling out of my chair, is the relentless whining that corporate America does when they hear that the public criticizing their extreme sense of entitlement to wealth. So, we're stuck with this sentiment that it's so unfair to criticize those that have supposedly worked so very hard to attain their entitled positions, and have earned their wealth because they are the only ones in society that effectively "produce" (1). The comedy stems from the mere absurdity of how people who confess to huge success, remain victims of the criticisms of society, as if society looks at corporate America and literally says that being successful is bad, but corporate America is avoiding the point being made. Being successful is not bad at all, but the method by which that success was attained, if corrupt or damaging to the public good and even the markets, does in fact make it bad, especially when success is directly linked to the ability to persuasively furnish things for the market, and literally be a "very productive" member of society.

So, what I have to ask you, corporate America, is, in a time of crumbling economies, markets that tread barely above deep recession levels, a large number of unemployed, the lack of new and innovative industry, discontent mobs in the streets chanting down Wall Street, large financial institutions receiving taxpayer funded bail outs, the government rescue of the American auto industry, and more, what have you actually produced? In what matter is corporate America actually being "very productive"? It's a very mocking behavior, to claim that public criticism of corporate America is destructive, when there is greater income inequality in America, than in China or India before the recession hit (1). Corporate America, you subsist off the lowest taxed nation in the world, so you cannot possibly use the age-old conservative excuse that high taxes prevent you from producing jobs (5). Even though it claims to have its hands tied by too much regulation and high taxes when it wants to create jobs, it still doesn't produce a significant amount of jobs to make up for those lost. What is it? What is the missing ingredient? What else can the American people provide for you in order to avoid any criticism? The American public is still waiting for an answer, and a payback on their bail out investments. If corporate wealth keeps increasing, while the rest of working America sees no exceptional result, how can they effectively label themselves as "very productive"?

Financial institutions around the world, especially now in Europe, while creating an environment for austerity in nearly every nation, in order to buffer the collapse of market stability, have shocked investors with the "sheer amount of money" that banks have demanded, while those investors notice their shares deplete in value, with minimal gains, and a complete lack of growth instilled. So even after a Euro-zone near collapse, a U.S. collapse that's been patched up, and still flounders, and the looming threat of another recession, I reiterate to also the global corporate producers, where is the product (2)?

When it comes to corporate production, the only thing worth noting that gets "produced" are bets against the growth of the economy. Basically, unregulated financial capital companies work hand-in-hand with Senators in Washington D.C. They produce profits for themselves, by getting non-public information from our publicly elected representatives, in order to place bets on elements of the market that are detrimental to creating growing markets, like health care, and banking regulation. These are called hedge funds, and more often than none, these days, hedge fund brokers are looking for bets against growth. If they know that a particular market will fail, or go negative, they will heavily bet on that failure, instead of placing financial resources in growth markets. It apparently doesn't matter to financial corporate America whether or not a business or policy will "produce" for the gain of the markets. It doesn't really factor into that fact that these monied interests that are well connected in American politics will go to no-end, in order to gain profit, yes producing money for themselves, but failing to fill the void created by betting on failure. What is getting produced here, if a particular market no longer exists to produce anything (3)?

This mechanism of investing is bad, and very non-productive, except for those who exploit it. And, that is just what these so called "producers" are doing is manufacturing exploitation. As an author, Henry Mintzberg, puts it, there are two sides to every economy: exploration; and exploitation. Our current economy and political sphere, for whatever reason favors exploitation. It is the bets and the bailouts that are true to the form of exploitation, because it sure isn't those powerless and stigmatized Occupiers who have the leverage to attain fortunes through non-productive means. It is Wall Street, and the political power brokers who do, and they are simply exploiting our markets, leaving the rest of the economy to wonder why everything is out of control and there is nothing they can do about it. In contrast to exploitative enterprise, there is the exploration version, and this is what is disabled in the current economy. It is a feasible way of having monied private interests invest in risky ventures, because they are not bad ideas, but just new, and have an undetermined course, but they can easily succeed as much as they can easily fail (4).

When Mintzberg mentions economists, and how they boast about America's "great productivity", he emphasizes that it is great, because it is the enterprise of exploration, not of exploitation. Exploitative enterprise is what we have now, and that has been and continues to be very destructive to our economy, because unlike exploration, it does not aim to "do things better". It only preserves the current market we have now, that doesn't produce, but instead sells supply, which is only manufactured outside of our markets, and why, because production comes in the form of near slavery -- cheap foreign labor.

Corporate America is not producing anything. In fact all they do is sell. Home Depot doesn't produce hand drills, and hammers, it sells them. Staples doesn't produce staplers, and reams of paper, they only sell them. Best Buy doesn't produce electronics, they are manufactured overseas, and shipped here, and simply sit on a shelf. But even that's not even the worst case, because this holiday season, even after successful sales, Best Buy didn't even have any product on the shelf to sell (6). Hedge fund brokers don't even produce money, they just sell faulty market mechanisms that tempt desperate investors away from exploratory investments, and place value on non-productive facets of our economy. The scenario we have now in America, is just a bunch of overpaid, over-valued, salesmen, and even though they stake claim to production, they have nothing really in production, just a lot of leftovers to sell. Mintzberg puts it like this, if "a company that fires all of its workers and then ships its orders from stock", and economically that may seem like production, but what happens when the supply runs out? Mintzberg, simply, states, "America is running out of stock" (4).

The only other thing left to do is produce, and that can only be effectively done by the explorers of enterprise, who will invest in new industries, or those that create new, efficient, and progressive forms of production.When all corporate America is doing is enabling the the mechanisms, like "disruptive day trading and other exploitative speculation that crowds out sustainable investment and disrupts regular business activities", then productivity by definition and practicality are non-existent. So, how can they possibly claim that they are productive?

  1. Bankers Join Billionaires to Debunk ‘Imbecile’ Attack on Top 1%
  2. Stocks Subdued After European Lending Move
  3. Inside Capitol, Investor Access Yields Rich Tips
  4. Who Will Fix the US Economy?
  5. GRAPH: Contrary To GOP Claims, U.S. Has Second Lowest Corporate Taxes In The Developed World
  6. Whoops! That Stuff You Ordered Weeks Ago from Best Buy? It’s Not Coming

Monday, July 04, 2011

The Global Citizenship? Why Not?

There exists, an untapped concept: the concept of declaring our global independence. Having read many accounts of a flattening world, or a shrinking one (the internet and the technology provided to us, that enables us to communicate/interact more effectively over great distances), and observed the habits of some larger institutions within our society that carry out their business on a global scale, I have failed to find any avenue by which the individual has gained the rights or the capacity of freedom to live under laws unbound by national borders. Today, we have the ability to communicate and share information by way of technology, but we are restricted by compartmentalized international state laws, to move about the globe, participate in global business as individuals, and are not even provided civil rights on a global level.

The concept of global citizenship is so insignificant to the policy makers and the populace. It remains, that a national sentiment, or pride is the foremost ingredient of our individual character. If this type of citizenship is such a minor consideration, then why the sudden shift of momentum in popular protests in the Middle East? The European people in Spain and Greece have also taken measures to challenge their own governments, that have taken austerity measures to the point of becoming an oppressive character, like that of tyrants. Foreign policy in the U.S. constantly is chasing down global disruptions, and patching holes in international relations. Why, do conservatives in the U.S. instantly latch on to the sentiment that government is oppressive, and at the same time liberals tout that mega-corporations are destroying their economy? People across the globe are in fact economically oppressed, and this is the single most crucial component that links all these cultures together, because while one small percentage of the ruling elements of society participate in economic globe-trotting, a preponderance of individuals are bound by the lack of fair global rights, and are enraged at all those responsible for making the global environment less receptive to their societal and individual needs.

A Global Redefining of Welfare: Who Really is Benefiting from Free Markets?

Globalization has only enabled limited and more powerful elements of society, like those of corporations, the private military industrial complex, and more powerful elements that have the financial capacity to corral rights to an international presence. This arrangement seems to emphasize the incongruity and underlying injustice that the greater population must endure, in order to maintain the stability of the upper levels of class. For instance, in the United States, immigrants that have not yet acquired full citizenship, yet have the ability to attain public benefits in the form of welfare (1). The first question that arises from this, is why do people emigrate to the U.S. in the first place? One could propose that they come here for the opportunities of prosperity, those that their former nation could not or would not provide. On the other hand, who is to assume the prior predicament of an immigrant? There could be a slight chance that they came from a livelihood of sustainability, and did not have to wholly depend on the state for the bare necessities. Until there was a point in time that free trade, a product of global free markets, destroyed their sustainable life. So, then they arrive to the U.S. and the job markets may not be so open to newly arrived immigrants, and the economy is bad on top of that, so they have only to turn to welfare.  The best the most free country in the world has to offer to the rest of the world, is a hand out?

Fine! I can understand that social programs like public benefits offers a certain level of economic stability, and is a social tool by which American citizens can fend off poor or unhealthy living conditions on a larger scale. In most cases it is beneficial to all of us, citizen or not, richer or poorer, but we are dealing with a crisis of failed global leadership, and their inability to improve economic conditions for those that have no national status, unlike the status of large corporations who spill over into other countries on the backs of their domestic taxpayers, with the protection of the taxpayer's soldiers or their hired military contractors. Ask yourself, who pays for this level of privileged welfare? The answer is a globally compartmentalized majority of citizens who are isolated by domestic rights and laws, yet have no ability to participate on the same playing field as transnational corporations or traders, who transgress the world suppressing human rights at the national level, by way of practicing business exceeding international laws, that lack regulatory effectiveness, and simultaneously depend on the welfare of nationalized taxpayers.

Take for instance, the small farmers within the United States! If they choose to sell their product on the market, they are required to meet an endless regiment of regulations put forth by domestic legislation. They are also hit by business contracts and the threat of agricultural intellectual property infringements, brought upon by huge agribusiness companies, when they've been enabled by the government to place patents on genetic modification of plant seeds. In contrast to the small farmer, large agricultural companies have the means by which to move certain elements of their business offshore, in the case that their practices fail to abide by the standards of regulations stateside. The U.S. government has provided no avenue for non-corporate agriculture to thrive in the same sense that the large corporations have.

There is an intrinsic failure when two elements so powerful as a developed nation's government, and a very financially endowed corporation team up to create the perfect scenario for creating excessive profits, especially when that gain is provided at the cost of a greater element of society's loss. This advantage is not some well crafted strategy, but rather a disposition that can only be attained by isolating lower class citizens (which does include the middle class) from any functional financial apparatus, such as those provided on a global scale, and forcing the lower realms of business to obey the limits of those isolated national laws or regulations. So, if capitalism's message is all about unbound free markets, it is beyond comprehension that the more enabled elements of any economy, by way of lacking international laws or regulation, combined with the absence of rights for the individual at the global level, a majority of the world has been disabled from participating in "free" markets.

Governments, very powerful ones, have a consistent desire to create a perfect economic environment for international businesses. If provided with the perfect conditions of enterprise, by which to maximize profits without contention, there is no limit as to how far these powerful entities are willing to make sacrifices in preservation of either sustainable economy, sound environment, the well-being of the average to below average citizen, or laws that are fair enough to those who cannot afford to purchase their way into legal favor. It is evident that "foreign capital creates incentives for states to establish an investment climate that is attractive to transnational corporations". This makes entering within a nation's border very enticing, and if the authority ignores its own laws, in order to persuade corporations to enter its country, that authority is no more, and it "may choose not to monitor or enforce laws and regulations that would increase the cost of operating within their borders" (3). If this is beneficial to the state at all, then why is there so much austerity taking place in the Western world? Were these corporations not successfully emigrated into the states, in order to create jobs? If this is correct, then why the need for providing welfare to lower class individuals, immigrants, that continue to struggle against a plethora of legal obstacles, and economic despair?

Creating borders that only exist for one element of the global society, and then erasing them for others is a fabrication of advantage. If the U.S. government, for example, is going to enter certain countries with a presence of force, in order to provide a secure environment for multinational companies to carry out trade, the single most characteristic principle of capitalism is missing: competition. In contrast to concepts presented by Thomas Friedman in his book, The World Is Flat, where everywhere around the globe, we all compete on a level playing field, the U.S. government has consistently preserved pre-globalization inequities. If the field of competition is going to be level, then individuals and smaller businesses will all need to be able to shed the shackles of national laws and begin to demand that their domestic leaders provide balanced legislation that grants them global rights and regulates those who have taken advantage of a system that has been looking the other way when it comes to global regulation.

Iraq and Afghanistan: Nations Made of Walls

 A very good example of how individuals and small businesses are compartmentalized and are regulated from participating in global profit mechanism is the Iraq war, or more in general the need to economically control the Middle East. Here you have two compartments: the U.S. citizenry on one side, and the citizens of Middle Eastern nations (what is often labeled as the the insurgency) on the other. Both segments are powerless to function, operate, or overcome the force that Western coalitions bear upon them, as well as the lesser visible Western multinational corporations that swing in behind occupational forces, in order to gain business from this action, through lofty priced contracts. The U.S. enters a country rich in oil resources and attempts to sustain the limitations and the hazards of this resource. No matter the cost, whether it be lives or money, the powerful nation continues to force containment through economics and occupation. Instead of providing investments domestically for engineers, inventors or business persons to develop, research or design new forms of energy consumption, U.S. leaders find it befitting that the masses remain stagnant economically, and receive the resources that they have been consuming for almost over a century.

Many of the people in Iraq and Afghanistan faced an occupier that was interested in many things, other than to provide civil legislation that would elevate the peoples' rights, their ability to participate alongside the "civilian provisional authority", in a peaceful manner (even the name alludes to compartmentalization of Iraq itself by way of provisioning the economic infrastructure, instead of offering it whole). For example, there were no efforts by the CPA to have responsible elements of society compete alongside non-military contractors, and the only visible participation that individuals had to provide stability to their nation was to join the war effort and create more of an element of violence against Iraqis with Iraqi troop and police training. Obviously there is a good reason to have this, but it is not the single solution to stabilizing country or any other part of the region.

In Afghanistan, private contractors that financially subsist off of American tax revenues have consistently operated under a shroud of secrecy, and have been enabled to do so because they reserve the rights of privacy as recognized by U.S. constitutional laws, and not the laws of the nation of Afghanistan or the United Nations. They took on work within the war torn country, providing services meant to rebuild its infrastructure, but to this day, the American taxpayer has yet to see evidence of sweeping improvement in this realm. Yet, while both Afghani as well as American citizens await a solution, a rudimentary element of the economy has been sidelined by the occupation's failure to acknowledge the farming community, and the coalition-driven Afghan government's ignorance of any form of effective economic policy.

As noted by the Atlantic Monthly, "Afghanistan's economy is heavily agricultural, the health of the country's economy is directly tied to the mission of rolling back Taliban influence, and the U.S. has been sending farming consultants there for years" (2).With the destruction of most of Afghanistan's agricultural irrigation infrastructure mostly caused by combat, the farming community has had to rebuild it, or come face-to-face with economic fallout, being that agriculture "is the mainstay of Afghanistan’s economy", from where "eighty-five percent of income" derives (5). So, if one considers the reason for occupying Afghanistan was initially for hunting a single terrorist organization, and that this mission was responsible for completely destroying the main ingredient to thriving agriculture in this country, U.S. efforts, to re-stabilize the economy through something they initially destroyed, are simply a misgiving.

The same article addressed how the Pentagon is now in search of "secret farmers". To put this into definition, a secret farmer would be a private contractor hired as a agricultural consultant to advise local communities along the same lines as previously mentioned, where consultants would teach farmers how to farm. In a country where eighty-five percent of income is derived from farming, the U.S. military, of all agencies, feels the need to send in high-priced consultants to advise individuals who have spent their entire lives farming? The best way to control the economic development of a nation is not just secure by military means, but to also send in consultants to attempt to improve the economy, and yet the taxpayers in the states as well as the Afghan government and its citizens would have no insight as to why this is needed, and what it is these advisers would be doing. It is evident that secrecy breeds compartmentalization of society, and the mere fact that farmers need special clearance to farm, it is obvious that "this latest farming mission is about more than just the usual subsistence farming" (2). These farmers, if they held global rights, and the ability to import the needed resources on their own, without having to depend so much on either their own failed government or the profiteering mechanism drawn in by developed powers, they could just as well prosper and provide on their own. With the secrets of the powerful and advantaged, this is not part of the wider plan.

The exorbitant amount of security enacted in the Middle East as well as domestically for the U.S. is a symbol that explains that this is a conflict to contain, and to isolate the powerless from powerful potential and capacity, because what the occupation did was become "an operational norm for innumerable local, regional and sectional interests all intent upon acting as their own more-or-less equally inept ‘civilian provisional authorities’ within their respective neighborhoods, clan areas, ethnic homelands, sectarian zones or provincial jurisdictions" (4). It allowed private contractors, and other foreign profit makers to enter Iraq, with more freedom than what was granted to individual Iraqis, in order to access the resources of war and the natural landscape. The occupation was considered a "restoration" to the damage and violence that the occupying force had generated in the first place, and this was the primary justification to walling off Iraqi citizens from participating in the so called restoration, and the occupying force took full advantage of billions upon billion of American taxpayer dollars to fund this effort (compartmentalized by physical distance, homeland security, and national borders). Both Americans and Iraqis faced economic ruin.

How could an under-developed country like Iraq even need to step up from local economic strength, directly to the international market's competitive level? Why would that even be necessary, and why couldn't it slowly take steps to improving its economy on its own? If it had something that valuable to offer the world's developed nations and their own markets, it would make a lot of sense that the Western economies would push through Iraq militarily, in order to tunnel through the chaotic economic mess of conflict. The Iraq war was simply a "political strategy for isolating the ‘enemy’ element, engaging ‘supportive Iraqis’ and building ‘new institutions’ in pursuit of a security strategy for clearing areas of enemy control, holding areas seized from enemy resistance, and building new Iraqi security forces to nurture civil society. This which would underpin an economic strategy of restoring neglected infrastructures, reforming the economy, and building national market capacity" (4). But the Western coalition did not fully succeed in "nurturing" a civil society at all. Instead it contained it, and put in security to preserve its own interests from being torn down again by the interests of the Iraqi people.

The enemy was only defined as an insurgency, that was basically rebelling against the doctrines of a foreign state, not the pre-existing state that was Iraq. The Western coalition did not offer anything but the option of insurgency, isolating all factions of Iraqi society from one another through the single agenda of security. There was and still is no intention to break open the compartmentalized national sentiment through religious freedoms, civil rights, and practical constitutional foundation. What still is present is the huge amount of war profiteering that is being committed by transnational corporations, by way of the American taxpayer unable to restrict the use of tax revenue for defense, yet the Iraqi people still await even their nationally recognized citizenship.

It is apparent that the U.S. leadership, and leaders of the Western world have this aim to isolate national citizens of any country for the sake of preserving government and transnational corporate interests. It is purely a game, and a rigged one, at that. The scenario between Native Americans and American colonists has been turned inside-out, where instead of dominating a new world of a less advanced society, we are committing ourselves to domination of the old world that lacks a more advanced economy, that exists within globe of disconnected sustainable economies. It is the old world attempting to grasp at as much of its past's powers and wealth and draw that same dominance into a new world, future. By drawing apart the greater elements of society, the veritable citizens of the world, the powers that be are conquering by division, making the greater elements of the globe, much, much smaller, and therefore incapable of economically overcoming an empire of bogus competition. If the citizens of each nation were granted a global citizen status, they would gain a better foothold in this rigged game, not so much an advantage, but more of an ability to fairly compete, participate, and make provisions for themselves, and not be misguided by profit-schemes enabled by government policies that restrict only the citizens.

Free Trade, Bound Global Citizens

One of the greatest ironies or should it be called a double standard, are the policies of free trade agreements. Political leaders of developed nations have sought to take advantage of underdeveloped nations by tapping their cheap labor sources, and allowing the products made in those countries to come back through their borders for free. Yet, again, transnational corporate elements are easily granted the privileges to move freely about the globe, driving wages down, therefore driving the quality of life downward, and that becomes an economic advantage only to those elements of the corporate global society, and not the individuals who make up the economic cultures of each nation. Very powerful corporations have been granted a common law right to move freely about the globe without regulatory measures or laws to restrict their activities, meanwhile citizens of either nation are bound by strict, if not oppressive, immigration laws, the inability to move about the globe, in order to enterprise in the same fashion as transnational corporations.

Global free market capitalism is unequal, or unbalanced in a world without global citizens. It does not favor the individual economically in the least. Therefore, citizens all over the globe tend to migrate, based on what is called the "push-pull model", migrating from developing to developed nations. This is happening because instinctively people have the need to live where they can have a better quality of life, they want to remove themselves from environments of poor social, economic and political exposure, thus moving to environments of the same elements, it is attractive to want to earn higher wages and have a higher standard of living, and improved social conditions, that offer a higher sense of personal freedom (6). This is the right of every citizen throughout the globe, regardless of their national status, but its principles have only been granted to very powerful elements of our society known as the corporation (comprised of many individuals who have already attained a better quality of life), because they have the financial capacity to either drive regulatory legislation out of global policy making, or to ensure that their ventures are not restricted by any laws that would diminish their unrestricted colonial practice of market takeover.

Bound citizens have no options when isolated from global maneuvering, like that which is practiced by corporate elements. It is not like several hundred years ago, where an element of society that was overwhelmed by an oppressive leadership, could just pick up and flee to a new world, because there is no more unsettled places in the world. So, the only thing left to do is to counter the oppression. But, in a highly controlled global market, attacks on the system, in the form of reform, are not warranted, and must be contained through higher levels of security. This is not in the form of an obvious police state, but something more along the lines of inspection of the citizenry, so as to preserve the sentiment of personal freedom, but below the surface there is much more being done. It is extremely unfortunate that acts of terrorism have removed certain freedoms from American society, the most free people in the world. Through no fault of their own, the average citizen can no longer travel in or out of the country without being thoroughly inspected. Not a single person is an exception, and every item on their person is exposed and/or scrutinized. This is representative of a higher sense of personal freedom, and a quality of life? There is no place in a sustainable and developing economy for highly sensitized security that takes its citizenry for granted for the sake of satisfying fear. Confidence in an economy stems from the mere fact that there are no castle walls to be protected, and that if one group of citizens can interact freely with a separate group of citizens without fear of the unknown, then that is truly representative of global prosperity. That is a free market for all, and not a select few who can afford to be free.

"Growth comes from innovation driven by individuals", and not the massive structures that succeed at sequestering the capacity of the individual to compete at the global level (7). As long as citizens remain constrained by national borders, they will never reach the capacity to compete or innovate on the global scale. Free market global capitalism is an annihilator of societies, because its sole focus is growth through competition. It represents globalization in the form of crusade, but it does not ensure preservation of society, because in concept it destroyed the security of market reciprocity, where one individual receives an item of value in trade for another, "market relationships were destroyed", and while it created the perfect environment for "rapid accumulation" it, over the long-term, "consumed the social and human fabric of society" (7). On one hand those who participate in markets globally, must have the financial capacity to do so, therefore they have inherited a freedom that, without global representation for each individual, goes beyond the extension of national laws. Deregulated markets will travel the globe consuming elements of society without ensuring the rights of global individuals, and at the same time, the society of individuals have no legal recourse to ensure that they are receiving a fair deal. Of course, most free market capitalists have a eugenic attitude about how great the concept, that there will always be many losers for every winner in global capital markets, and this is the crux at which confidence in global markets today is lost.

It would be more of an advantage if global citizenship was a reality. If individuals were capable of moving about the globe with minimal regulation, performing trade in the same manner as corporations, it would benefit all of the elements of the economy. Instead of this elegant scenario, the citizens of the world are limited to the faulty economic structures bound by primitive national policies, that only support the upper levels of society in a brute and clumsy manner. If the world's corporations are incapable of creating thriving markets for even themselves, then states should collaborate on creating the global citizen. Global citizens would provide not just the man-power to enable more production, but would also be a presence for new ideas and concepts on how to manage the world economies in an effective, as well as an efficient manner. The modern world is getting too complicated, and moving much too fast for the masters of the old world order to keep contained anymore.

REFERENCES:
  1. BHUYAN, R. (2010). Reconstructing Citizenship in a Global Economy: How Restricting Immigrants from Welfare Undermines Social Rights for U.S. Citizens. Journal of Sociology & Social Welfare, 37(2), 63-85. Retrieved from EBSCOhost.
  2. Fisher, Max. "Pentagon in Search of 'Secret' Farmers for Afghanistan". The Atlantic. The Atlantic Monthly, 15 June 2011.
  3. Anderson, Rachel J. "REIMAGINING HUMAN RIGHTS LAW: TOWARD GLOBAL REGULATION OF TRANSNATIONAL CORPORATIONS." Denver University Law Review 88.1 (2010): 183-236. Academic Search Complete. EBSCO. Web. 15 June 2011. 
  4. Luke, Timothy W. "The insurgency of global Empire and the counterinsurgency of local resistance: new world order in an era of civilian provisional authority." Third World Quarterly 28.2 (2007): 419-434. Academic Search Complete. EBSCO. Web. 23 June 2011. 
  5. Glasse, Jennifer. (2011, June 15). Americans Work to Modernize Afghan Agriculture. Lincoln Tribune. Retrieved from http://lincolntribune.com/?p=14117.
  6. Varma, Roli. "Changing Borders and Realities: Emigration of Indian Scientists and Engineers to the United States." Perspectives on Global Development & Technology 6.4 (2007): 539-556. Academic Search Complete. EBSCO. Web. 2 July 2011. 
  7. Taylor-Gooby, Peter. "Introduction: Open Markets versus Welfare Citizenship: Conflicting Approaches to Policy Convergence in Europe." Social Policy & Administration 37.6 (2003): 539. Academic Search Complete. EBSCO. Web. 4 July 2011.

Friday, April 22, 2011

Don't Make the Public Private!

Of late, it seems as if political leaders are making public investment and its value in infrastructure extremely insignificant. As news continues to pour in about the privatization of Social Security, more legislation is built up to prevent single-payer health care, and now our elected officials aim to sell off our infrastructure as if it were not the public's in the first place (1). It is important to recognize that private procurement of public infrastructure or services is not necessarily a bad thing, but it is detrimental to the quality, effectiveness, and financial efficiency of these things, when there is a tremendous gap in economic laws that passively allow private owners to take advantage of the public, utilizing the same legal avenues by which they dodge taxes, ignore accountability, and just plain rip off the American taxpayers (11).

Wired magazine in February 2011 published an article entitled, The Village of Shadows, about a small Romanian city that was host to numerous technology-based con-artists. A particular shady character named Chita was mainly responsible for generating a large network of fraudulent businesses, in order to scheme people out of money. Chita was using a legitimate business to serve as a shell for fraudulent activities such as phishing attacks. Romanian authorities were quick to catch up with the scheme of his business, because he was purchasing big money items, without a justifiable source of income, and when the authorities (government officials) wanted to see his business records, Chita had none (2).

No records? How does one operate an effective an ethical business without records? This is not a comparison of how most privately owned businesses behave, but it is a signal to those who fail to understand that profit can be a dangerous thing, when it comes to the security and welfare of a state. When maximizing money is the main focus of a particular party, every other matter is secondary, if not irrelevant. The stability of government, and public infrastructure, that is meant to defend against a state collapse into chaos, is placed right into dire straits. Such a market already exists in the shadows, and the only thing that keeps the public from economic despair is that regulatory mechanisms are in place to route out any questionable practices.

Such is the state of affairs these days among the private corporate elite. How is Chita's business-related behavior any different than a "drug company mislead[ing] doctors about heart attack risks in order to sell more pills", "an insurance company manipulat[ing] its earnings by billions through complicated offshore reinsurance dealings", or a major bank "illegally charging minority borrowers higher loan rates or helping a dictator stash his ill-gotten gains" (10)? With the encroaching invasion of free market ideals, and the demand for the expansion of deregulation, fraud seeps into the cracks of companies, with private investors, that invest in corporations that are granted the same civil rights to privacy as the individual. Given this level of questionable, if not illegal, practice, it is evident that profit-driven business in a deregulated market could directly lead to a crime-ridden, dysfunctional, and destabilized public services infrastructure.

In contrast, government or public servants are accountable to the public, no matter the level of service being provided. The bureaucratic system cannot dodge the scrutiny of the public eye forever, as private interests practice everyday, avoiding the scrutiny of their questionable business practices. Private business on the other hand is accountable to only the customer, but this relationship is worlds different from the patronage of the public or the taxpayers, in that there is a certain level of openness when a service is publicly executed, whereas there is a tremendous potential for private contractors to conceal elements of quality, fraud, efficiency, and effective improvements (9). What type of public system would we have if questionable businessmen, like Chita, used the ownership of the Brooklyn Bridge as a means to defraud individuals?

When private business acquires public services for profit, this breeds a duality, in that the private interest is compelled to balance between profits and integrity of the provision of service. Instead of relying on weak legal contracts between the public and private parties, if a business were to acquire a public service, then it would be sensible to apply the same public laws by which public servants must abide. Therefore, profit is not secondary to improvement, but rather carries equal weight with quality and effectiveness of service. What this guarantees is that private businesses, that are granted the operation of public services, are required to provide proper customer service, and can no longer hide behind contract loopholes, and a lack of transparency. If a private business procures a public service it is no longer just a private business, but a public servant as well (9).

"Proponents have argued that when government is both the owner and the producer/deliverer of a service, it makes it difficult to monitor the activities of its agents – the bureaucracy – and that such problems can be overcome by engaging the private sector through legalistic contractual arrangements. The flaw in this argument lies in what some scholars have identified as a problem of incomplete contractual arrangements" (3). This is widely known as "asymmetric information" and has been the primary utility of private banks and investment firms that created faulty loan packages, that in turn were sold to investors for a profit, with the buyer making the assumption that the financial product was risk-free, when it was not. It is considered to be a characteristic of "one party [having] more or better information than the other" (4), and so it's not fraud, it's just taking advantage of the other party by withholding knowledge. Basically, a fraud of indifference, or better yet, purposeful negligence. If private interests, like those of investment firms and banks on Wall Street, that used a passive-aggressive mechanism to, for lack of a better word, lie about the financial products they were selling, how treacherous would that same business practice be, if these same types of companies were allowed to say they were maintaining public infrastructure, while the public taxpayer has no avenue to ensure that that information is correct? In the case of the government, the private contractor can supply a service, but by taking advantage of incomplete legal agreements, the servicing party can avoid providing quality assurance and not have to provide the public with absolute transparency.

Most people would assume that not all private institutions are capable of being intrinsically deviant, in order to avoid the liability of providing a more efficient service than government. These assumptions can be correct some of the time through a measure of corporate social responsibility, but it is important to remember that government that offers public services is intrinsically held accountable, and transparent, not because law requires it, but the representative bodies in place will ensure the security, stability, and sanctity of the public.

With business it's a entirely different story. Private industry is dedicated to its own "bottom line". There is this ever-present "incentive for the private sector to cut costs in order to maximize profit". So how does one company effectively cut costs so as to maximize profits? This is done through basic labor reduction, by "retrenchment" (diminishing the workforce), "employee cutbacks, lower wages, and the greater use of part-time labor", in order to eliminate the expense of paying full-time benefits (3). It's fairly safe to say that across the board the profit-driven private company is reducing its productive capacity. If that is done the quality either remains the same or has to decrease, due to a rotating schedule of cuts. In other words the private sector is only concerned with itself, and that concern has the same weight, if not more, as the concern for the preservation of the public society it is serving.

Reconsider corporate social responsibility (CSR)! In some economic circles it is considered a myth, in that a company that strives to meet its "bottom line", does so to the point that social welfare is ardently relinquished by corporations. Take for instance, the reformation prospects of the Canadian mining industry (12). The irony dispelled by the industry is rampant, and it stinks of a smattering of double standards put forth by corporation who dread having to face regulation. Canada's government wants to pass legislation to softly regulate the mining industry on a global scale, in order to ensure that the industry does not abuse the rights of the citizens directly effected by mining in their country. The mining companies on the other hand are reluctant to be regulated by law, but instead insist that they can apply voluntary social responsibility to their business model or practices.

So, in other words, companies that follow along this same logic, are willing to regulate themselves. That is absolute nonsense. Is it acceptable to believe that governed regulation is synonymous with voluntary responsibility? It would be safe to assume that this premise would never support social responsibility, because of the model of a conventional corporation. That is, a corporation will only consider the interests of the stakeholders, and not all individuals of a society are stakeholders. Even if some have the capacity to be a stakeholder, they are invested in various businesses, more often than none competing against one another (13). So, you have two separate elements of the corporation that fail to fit into the model of social responsibility: 1) there is a demographic of society that does not have the capacity to benefit from the interests of a corporation; and 2) the interests of competing corporation pitch the interests of individuals against one another. In fact, corporate social responsibility is actually negligence, and in order for a corporation to function it would need to indirectly go against the best interest of a society.

What is most interesting about political attempts to privatize public services is that there is this attitude that privatization is great as long as it lays off workers, and moves more business into the realm of private interests. It's as if the attitude lends itself to characterization of some tough, suck it up, indifferent directorate, whose responsibility is voluntarily limited to shutting down one system, and failing to preserve economic stability. By being accountable for the economic repercussions of producing such drastic changes to an economy, any policy executive would realize that such a sudden change in the economic landscape would be ruinous, especially if one of the effects of overhead costs would deplete the workforce, and therefore directly effect the individual's right to a sustainable life.

The Universal Declaration of Human Rights states, that "receiving a fair remuneration with which one can fulfill one's basic needs is an inalienable human right" (14). Now this is a guideline that corporations should follow, but in reality, the corporation's goal of maximizing profit is in conflict with minimal financial rights of the individual (because they must decrease wages, in order to lower the costs of production), and so corporate entities force themselves to not comply with the declaration. Deregulation, in a global free market, disables national governments from questioning or even enforcing that a corporation abides by the declaration or their own doctrine of voluntary social responsibility. Only so much policy can be drawn up in favor of CSR, but when it is voluntary, and not law, then it is not a matter of ensuring that corporations preserve human rights, it is whether or not the corporation as an element of society can compel itself to participate in the community as a responsible member, and not place the liabilities of profits before the priorities of human rights. Keep in mind, that this is the one policy that at least government of the United States has ensured.

Maybe, slashing overhead costs isn't the only problem, and when we consider the effects of profit-driven models, the lack of transparency adds more fuel to the profit-maximization fire. No matter which viewpoint you have, private industry's entitlement to not having to disclose its business secrets to the public, and possibly only to those who have vested financial interests (i.e. investors or shareholders), is another detrimental factor to supplying the public with quality services.

The public answers to itself, because it is placing revenue into a system that intrinsically belongs to itself. Just like a private interest would do to ensure its financial well-being. When public services are privatized, as long as their is a binding contract between the public and private parties, and that contract offers bounds that determine that the private party will provide superior services, there is intrinsically a gap. This gap is between the private entity's assurance of providing quality and efficient service, and the ability of the patrons to assess that quality and efficiency. In essence, the public, when it pays for a service should absolutely be aware of the value for which they are paying.

Works Cited:

1) Cities for Sale: Psst! Wanna buy the New Jersey Turnpike? http://www.slate.com/id/2288401/


2) Bhattacharjee, Yudhijit. "The Village of Shadows." Wired Feb. 2011: 82+. Print.


3) Ohemeng, Frank K., and John K. Grant. "When markets fail to deliver: An examination of the privatization and de-privatization of water and wastewater services delivery in Hamilton, Canada." Canadian Public Administration 51.3 (2008): 475-499. Academic Search Complete. EBSCO. Web. 6 Apr. 2011.


4) http://en.wikipedia.org/wiki/Information_asymmetry


5) Charter Schools Outsource Education to Management Firms, With Mixed Resultshttp://www.propublica.org/article/charter-schools-outsource-education-to-management-firms-with-mixed-results?utm_source=socmed&utm_medium=Twitter&utm_content=tweet4&utm_campaign=Charters


6) "Rudy's way." Economist 330.7849 (1994): 26. Academic Search Complete. EBSCO. Web. 13 Apr. 2011.


7) Walsh, Mark. "New York City Votes Are a Blow to Edison." Education Week 20.30 (2001): 5. Academic Search Complete. EBSCO. Web. 13 Apr. 2011.


8) "The odd couple." Economist 333.7893 (1994): 24-25. Academic Search Complete. EBSCO. Web. 13 Apr. 2011.


9) Bovis, Christopher. "The Effects of the Principles of Transparency and Accountability on Public Procurement and Public-Private Partnerships Regulation." European Public Private Partnership Law Review 4.1 (2009): 7-25. Academic Search Complete. EBSCO. Web. 17 Apr. 2011.


10) Nader, Ralph. "How to Curb Corporate Power." Nation 281.11 (2005): 20-24. Academic Search Complete. EBSCO. Web. 19 Apr. 2011.


11) Risen, Clay. "Accounts Due." New Republic 230.11 (2004): 16-18. Academic Search Complete. EBSCO. Web. 19 Apr. 2011.


12) LAPIANTE, J. P., and CATHERINE NOLIN. "Snake Oil and the Myth of Corporate Social Responsibility." Canadian Dimension 45.1 (2011): 24-27. Academic Search Complete. EBSCO. Web. 19 Apr. 2011. 


13) Uccello, Cynthia. "Social Interest and Social Responsibility in Contemporary Corporate Environments." Journal of Individual Psychology 65.4 (2009): 412-419. Academic Search Complete. EBSCO. Web. 20 Apr. 2011. 


14) Rabet, Delphine. "Human Rights and Globalization: The Myth of Corporate Social Responsibility?." Journal of Alternative Perspectives in the Social Sciences 1.2 (2009): 463-475. Academic Search Complete. EBSCO. Web. 21 Apr. 2011.

Saturday, April 02, 2011

No More Tea Time for Newport Beach

One of the biggest frustrations that American taxpayers have with government is its inability to ensure that the wealthy are paying their fair share of taxes. By wealthy, I specifically mean, the corporate element of society. In past articles I've argued against the right of corporations to be legally defined as a "person", and in doing so, it was an attempt to help readers understand that being defined as a corporate "person" is only a legal avenue by which the plutocracy in America can get away with having to pay its expected rate of taxes like every other tax paying "person" in the United States. The argument is against the rich in America, because it is this same group of individuals who have griped about government placing too much pressure on them to pay forth reasonable taxes. Yet, there are so many tax laws in place that permit this class to piece by piece remove themselves from the enforcement of having to share in the responsibility of sustaining society's infrastructure. So, according to the tax laws, in the U.S., the poorer classes are mainly upholding the burden of economic national stability, while the rich, and those with more financial capacity try to shed their responsibilities to American society, all for the sake of financial self-preservation.

Before I move any further along with my argument, I would like to discuss the concept behind the formation of today's Tea Party. Even if most individuals think that the Tea Party is not made up of wholly wealthy elements, it portrays the characterization of elitist wealth. It's a club for those wishing to preserve the image of wealth and prosperity.

Don't believe it? Well, New York Times and CBS conducted a poll in August of 2010 of 1,600 adults, and found that 31% of Tea Party supporters earn more than $75,000 per year, as contrasted by the 26% total participants of the poll. 68% of those Tea Partiers consider themselves middle class or above, and the main reason why they are angry with government is spending. That is spending on poor people. The observers of the poll, The Nation magazine, concluded that the Tea Party supporters simply loathe poor people, because they assume, that what is in their minds defined as minorities, or the "poor", are receiving way too many benefits of entitlement from the government. The Nation reporter continued to point out that this was simply a myth, in that the poor who do receive welfare benefits from the U.S. government do not make windfall incomes from what the Tea Party terms excessive waste, and on the same token, those that consider themselves middle-class or higher, are receiving tax cuts in excessive amounts, that in comparison to welfare benefits, seem a greater compensation than welfare. It's very evident based on that poll that Tea-Partiers are the wealthy class, and their argument against excessive waste at the government level to enable the poor to be entitled is just simply a disproportionate attack on the poor, especially when the Tea Party middle class is receiving tax benefits that benefit their class by far. It comes down to placing the government benefits side-by-side for comparison, and reconsidering who actually is prospering more from government spending, regardless of whether it is a handout or a mechanism to help individuals with money keep more of it from government hands (3).

The political atmosphere is now flooded with the language of wasteful government spending, and according to members of the Tea Party, this waste comes from providing a level of sustainable income for the poor, instead of the government deciding to relinquish its responsibilities in providing a stable economic environment for all people, whether rich or poor, so that there is not a tremendous part of the population, without the capacity to sustain itself with the necessities of life. Instead those struggling to survive are labeled as spoiled, or entitled individuals, who are also persecuted as those taking too much from a system meant to provide stability. Someone needs to preserve that element of society, and it certainly won't be the Tea Party stepping up to offer assistance for the poor, in an effort to stabilize economic chaos.

The name 'Tea Party' itself, when viewed from the perspective of a historical context, has a strong connotation and connection to money. The name was drawn from the historic "tea party" of the American Revolution, where revolutionaries boarded ships carrying tea, dumping the ships' inventories into the waters of Boston harbor, in protest of the imposed tea tax by the British Parliament. This was in part driven by wealthy tax-paying land owning colonists, who were insistent they were no longer obligated to hand over money to the crown of England. It was always about money. Not only this, but it was about who was entitled to what money, and how much of it went to whomever thought they were entitled to it. Really?! What poor people or financially disadvantaged individual, would spend money on tea, anyhow, when their limited budget needs to go towards putting nourishment on the table, not some lavish cup of warm leaf brew?

This point is brought forth, not to argue that the colonists were wrong in fighting a tax, but to compare it to the efforts put forth by today's Tea Party, how the two situations are completely derived from two separate agendas, and how absurd their argument is in comparison to that of revolutionary principles. The American Revolution was a fight for independence, or let's say the freedom not to be financially tied to a foreign empire, to which the colonists had no social bridge. Money, or public funds were meant to go directly back into the colonial municipalities, to benefit the colonies, and not some distant nation.

Now, the modern-day Tea Party is not some foreign entity, nor is it representative of an American colony. It is a political party, so tied into the U.S. social structure, in that its constituents drive on public roads, benefit from public programs, probably send their kids to public schools, reserve the right not to pay exorbitant taxes, and in some cases benefit from public funding somehow as contractors or consultants of the Federal system. All of the aforementioned things are funded for the most part by tax dollars, that everyone pays within the American social net. What the Tea Party is countering is the infrastructure that offers them nationality. If they seek the elements of a nation by denying a tax that is fundamental to the existence of their nation, then they are not seeking independence, but only the preservation of their financial entitlement.

If this battle over taxes and spending is truly about independence, then why isn't there a significant number of individuals ready to band together, and prepare for secession? Instead of asking the federal government for financial freedom, why doesn't the Tea Party, establish itself as a nation in and of itself, and veritably declare independence? This is because it is simply a political strategy to ensure financial stability for a class of people in the United States, that are satisfied with the perks of being a citizen of one of the most free nations in the world, yet under financial pressures, they must fight to preserve their own economic status, against the tide of social stability. The Tea Party is not pressing for independence as a populace under the guise of one state, which is what the American Revolution's Boston Tea Party colonists sought. The colonial revolutionaries had a common purpose to found an independent nation, where as the Tea Party has yet to form "around a single leader, a single agenda or even a common name" (4).

The mere fact that the party has no single defining purpose, expresses to the political scene that it is not ready or willing to form and independent state, and that members of the Tea Party are content with what the U.S. has to offer, but never will its members admit to how the benefits of being a U.S. citizen are tied to the elements of a federal society, upon which they subsist. "There appears to be no consistent ideology or coherent set of policies behind the movement", and that alone shows that this movement is based on an idea, not a framework, by which supporters can bind themselves to, and begin to build a defining state. Instead, their focus is upon government taking their money away, or implementing laws that would further crush their individual financial sustainability, including radical if not extreme proposals to "return to the gold standard", abolishing Social Security, and a reflectance to implement a carbon-based emissions tax upon private enterprise (5). When it comes down to it, the Tea Party is all about the money, and in contrast to the 1776 American revolutionary model in which they tend to cast themselves, the party is in no way concerned with creating a stable, secure, and independent state, but rather more concerned with individual financial preservation, by taking down the elements of a state that provides stability for the greater citizenry.

If you look over the plethora of web sites tied to the Tea Party movement, you will often find mission statements that talk a lot about taxes and government spending. Take for instance The California Tea Party's web site, and its about page states, "The number one principle and goal of the California Tea Party is to empower the California Tax payer to fight for change!" (About | California Tea Party). So, they are willing to fight for change? Change what? Why, only tax payers? Why does the Tea Party feel the need to emphasize enabling specifically taxpayers? Again, there is this ever-present language that alludes to some form of financial constraint placed upon the citizen, and that there is some external factor involved in oppressing the taxpayer into paying-up, but there is no discussion in their mission of what needs to be changed in government in order to provide the taxpayer with more return for their tax dollar. In other words, a Tea Party individual would rather preserve their own dollar, then have to hand it over to a state entity, and feel convinced that that dollar will never benefit the individual in any manner (when in fact it does in some indirect way). It's as if the members of the Tea Party are all members of a really great country club, but they don't want to be obligated to pay their membership dues, and failing to understand that they can join or create another club, maybe cheaper, or maybe one that provides more member benefits. There is no implementation of new policy concepts, but instead a lot of finger-pointing, and an underlying agenda to hijack the government for the purpose of forcing the greater part of society to play by their selfish financial rules.

So, when we are debating change for ourselves, the Tea Party is missing the mark, completely, because the main focus is financial independence, and not providing a discourse on how to rebuild infrastructure, or instead of disabling government, finding more progressive ways to reform it. In other words the Tea Party doctrine really represents the "independence of me", and not the independence of a particular society or state. It's platform shouts of greed, selfishness, a lack of stability among any state that they would attempt to form, and its attempts at destroying a system that is in place for all the reasons of civilized society. The Tea Party is bringing us back to the Dark Ages.

A particular situation that has arisen in a region of the United States, Orange County, California, is the persistent selfish demands of the wealthy elite, and those associating themselves with wealth, that follow along the same political threads as those of the truly elite. There is this beach-side city known as Newport Beach, and since the 2008 presidential election, this city has been the thorn in the side of most other Orange County citizens, in that those who can afford to live in one of the nicest areas of California, are making demands upon the state and local governing agencies to meet the desires of a privileged life, at the cost of the average taxpayer.

The first instance that caught my attention was the battle over redirecting aircraft taking off from John Wayne airport, located in Santa Ana, requiring pilots to direct their planes up a steeper takeoff angle, so as to rise far enough above the beach-side residential areas of Newport Beach. This noise abatement is understandable from the perspective of providing a better living environment for those in the takeoff path of commercial airliners, but it is the cost and sacrifices that other taxpayers in Orange County are having to make, in order to preserve the sanctity of an over-privileged, wealthy beach community.

The John Wayne airport "maintains some of the most stringent noise rules in the United States", according to its website, utilizing a regulatory system called General Aviation Noise Abatement (GANO), which has been in place for many years now, and includes official enforcement and technological audio monitoring, all paid for by the taxpayers. This compliance program basically requires that air carriers remain within a certain decibel level so as to not excessively disturb the beach communities that lie within the take off pattern of the airport. This is the most outrageous thing I've ever heard, when you weigh and compare the noise of a single commercial jet airliner to the environmental effects of nearby noisy freeways, their contribution to greenhouse pollution, and the pollution produced by making airliners take off at a steeper rate, requiring pilots to burn more fuel to accelerate higher and higher above Newport Beach residents.

The irony, here, lies in the fact that a Tea Party supporting community, that in turn supports less taxes, enjoys the legal implementations of noise abatement, that is fully regulated by Federal, state, and local governments, and therefore paid for by the taxpayers (Airport Noise Law: Statutes and Regulations). Another irony exists in the inefficiency of environmental protection of the noise abatement program, in that it is a protection against noise pollution, and not environmental or climate pollution. A plane is required to make adjustments to its takeoff pattern, so as to climb faster and steeper, in order to put distance between the residence of Newport Beach, therefore generating more greenhouse gas emissions from the jet engines as they consume more fuel to do so (12).

It is utterly ridiculous to be more concerned about the effects of noise when people consider a jet taking off, then to try to balance that with the effects of pollution from jet engine exhaust being sprinkled upon the residence below. Instead of rich residents relocating, private airport interests redeveloping land, within the scope of takeoff patterns, for aerospace use only, or simply dealing with it, the taxpayers are left with a huge wasteful bill to cover the costs of making sure the elite of Newport Beach get a good night's rest. While tax dollars go to waste, these same residents breathe the pollution from jet exhaust, surrounding freeway exhaust, and can't provide the funding necessary to build seawalls or preserve wetlands (we're getting to that) to protect from the sea's effects of "global warming". It's just too noisy in Newport Beach. According to Newport Beach residents, pollution is only bad if you can see or hear it, but not if you're breathing or drinking it.

Not only does this produce a higher cost for the private interests, like the commercial airlines, but this cost eventually spills over into the private businesses that depend on airport's economy, and most importantly the cost of regulating noise. I mention the effects of vehicle traffic noise, because Newport Beach is littered with heavily traveled side streets, and there at least three major freeways intersecting through the city, that potentially could create more of a noise factor than a single airplane. No one in Newport Beach complains about that element of noise pollution, and if they did, regional taxpayers would be paying for it at some point as well.

Well, there is more. Newport Beach residents make more of a demand on state taxpayers to construct sea walls, and reinforce wetlands in the area, so as to protect their homes from flooding. Think that over, and while you do, consider the fact that in the 2008 presidential election, the Republican candidate for vice president, Sarah Palin, made a fund raising visit to Newport Beach, and the cost of: $1,000 for the food, and $2,300 for food and a photo with the candidate (6). With a population of about 86,000, 4.4% of that below the poverty line (source: the Wikipedia entry for the city), let's be generous and say that 50% of the population could afford a $1,000 dinner with Sarah Palin. That's a whopping $43 million. Now, I'm not trying to say that gathering campaign funds is a problem, here, but if the Newport Beach community is so overly concerned with the preservation of their environment (or lack thereof, because there is really very little left of the environment, when you consider that it's less that 50 miles from the L.A. metropolis, and is one of the most over-developed areas in the country), one would think they would be wise enough to pool their resources for conservation, instead of the political preservation of a GOP vote?

So, we are all well enough aware, that the lower income voters of Orange County were not going to be shelling out $1,000 for dinner, and the mere fact that Palin decided to fund raise in one of the wealthiest areas of Orange County, mostly recognized as a right leaning region, heading left, she decided against simply creating a wider campaign presence, by visiting other less financially-enabled areas of Southern California, for the sake of adding more dollars to her campaign. To add to this she drew money from those complaining about the lack of funding for their area's preservation of environmental elements that are meant to protect from natural disasters such as flooding from excessive tides or even earthquake damage. If they should be complaining about anything, it should be about the point that they wasted their money on a hollow presidential campaign. Instead the wealthy class of Newport Beach should have been spending those lost contributions on taxes, that could go back to the state or local governments so that their public investments could go back into building up seawalls or any other related infrastructure needed to ensure the safety of their elite neighborhoods. But, no! Why would the rich stoop as low as to use public funding to ensure their own security in case something should go drastically wrong, because conservative/Tea Party doctrines assume that tax dollars used to protect the public is not theirs to spend. A blatant irony. Is it not?

Another thing to weigh in on these so called big spenders, is that while the conservative elements of both the Tea Party, and Republicans, beat it into our collective heads, that implementing infrastructure spending, into things such as high-speed rail, or general public transportation is just way too expensive of an investment for the taxpayer, the reality (contrary to what the media tells us) is that investing in mass transit infrastructure is an environmental strategy to step-down global warming, the one reason the conservative elite of Newport Beach want to use tax dollars to build sea walls and conserve the surrounding area's wetlands. Of course it is a large investment, but the return that would be offered to taxpayers comes in the form of a secure, stable, and efficient infrastructure, offering the necessary engineering feats that provide civilization with roadways, trade ports, rails, preserved open spaces, and yes, even sea walls to protect homes from washing into the sea.

So, instead of focusing their efforts, and their big dollars on social spending, and providing the means to gain effective infrastructure, more attempts are made to isolate individual income from the community, and at the same time negatively impact the governing agencies' finances that provide large scale assured infrastructure. Maybe, if the tax structure in California was more sensible and less extreme in the realm of creating more tax breaks, the state could effectively supply a reformed plan for implementing engineering projects statewide that would have a climate strategy plan. It may cost more in the short-term, but it would certainly alleviate heavier tax-derived revenue expenses in such things such as environmental preservation, and sea-wall construction, both of which are smaller, and more expensive fixes, that would not ensure unabridged protection from disaster over the long-term.

Building sea-walls, and preserving wetlands has its good intentions, but it is not an end-game solution for addressing domestic protection from natural disasters related to global climate change. While, infrastructure is beginning to crumble nationwide, there is no better time then now, to invest in state infrastructure, and look to new ways of overcoming our old ways of indifference toward carbon-based emissions, and the "avenues" by which we keep enabling its increased presence.

If the conservative element of Orange County wishes to continue with a global-warming prevention strategy that is too small, non-effective, expensive, and self-serving, then they should do it at their personal expense. Let the wealthy community take care of its own environment on its own terms. While touting that taxes are unfair, and while making demands on the state's tax revenue, in order to implement securities that don't benefit the state's infrastructure as a whole, the self-serving elite of this region do not have the capacity to understand that creating a greater resource of revenue at the state level, would create alternatives to conventional transportation infrastructure, like the implementation of efficient public transportation, a system by which climate change can be reined in, and over time decrease our overwhelming contribution to global-warming (7).

Even if the conservative, wealthy elite of Newport Beach don't buy into the whole global-warming story, or their disbelief is just a by-product of entitlement, the evidence is stacked against their disbelief. As Tea Party members and politicians alike, share in a common theme, that climate activists and scientists are a part of some conspiracy to make the world aware of the dangers of climate change, because a potential threat, according to conservatives, has never been a threat at all (sarcasm is present here), experts, leaders and scientists all have relentlessly proven that human factors over the past century have had an effect on warming our climate (9).


There was a recent speech given by Keith Olbermann at Cornell University, where a conservative student reprimanded Mr. Olbermann for labeling conservatives as being "stupid". Well, when you consider the overwhelming amount of scientific evidence put forth by academia, and institutions of intelligence, evidence that screams of climate-change warnings, yet this evidence is ignored by conservatives or marginalized as a farce without evidence proving it so, the irony of their position shows that they are "wildly stupid" or ignorant of the truth for the sake of preserving their financial status (keep in mind, as well, that Newport Beach has recently decided to scale back their public libraries by removing library staff and books on shelves, as part of austerity due to the bad economy, so it's no wonder there is a lack of common intelligence among those conservative elite (13)).

As a note, there is a paper studying the effects of transportation on the climate in New York State, a two-part study to adjust transportation infrastructure, land development, and their climate effects, so as to curb natural disasters related to global-warming. This study found that "[t]ransportation, and in particular, emissions from vehicular transport is considered a major contributor to greenhouse gasses" (8).

So, while the Orange County conservative element, especially those in Newport Beach, seek out sea walls to protect their private land from global-warming, while simultaneously seeking to limit the amount of taxes they would have to contribute to the state, what they fail to realize is that they are working against their own efforts. The tax franchise in California would provide larger scale solutions, not just to implement sea barriers, but to also have the state provide alternative forms of transportation through mass transit infrastructures, like more train lines in the region, and a more efficient and effective bus system (10).

Even if the revenue didn't derive from an income or a property tax, which is currently in low supply as it is, most South County residents, including Newport Beach, mostly single-rider drivers, have been enjoying relief from transportation sales taxes, from things like low sales taxes at the gas pump (11). So, according to this demographic of wealthy, granted limited tax liability, placing a heavier demand on the state's budget, in order to maintain a climate-damaging transportation system, like freeways, and constructing sea-walls to protect against the same systems which they utilize at the cost of all the other taxpayers, who is really taking advantage of the welfare system in a two-fold damaging way to security, social stability, and sensible spending? This is welfare for the rich. There's no need for a modern day Tea Party, when the reality of abuse of the individual fiscal rights is stomped out by extreme entitlement, and meanwhile the wealth defeats itself.

If we are to seriously contend with the economic issues that we are having on a national scale, locally we need to recognize that some conservative elements like the Tea Party, provide us with ideals that feel good to promote, and may make sense from a financial standpoint, but the Tea Party, and conservative idealists are completely missing the point. Solutions for our local economies are born from contribution to the community in the form of investing in the mechanisms by which we gain better community, sustainable infrastructure, and an improvement in the quality of life for all that take part in those communities, whether or not those individuals have an ample amount of financial capacity. Instead of challenging or making expensive demands upon government, why not work with, and contribute to the mechanisms that would provide stability.

References:
  1. Why Do Conservatives Hate Trains? http://www.theatlantic.com/business/archive/2011/03/why-do-conservatives-hate-trains/72242/
  2. Coastal cities prepare for rising sea levels http://www.latimes.com/news/local/la-me-newport-sea-levels-20110306,0,3204468.story
  3. Koeppel, Barbara. Nation, 8/2/2010, Vol. 291 Issue 5/6, p4-6, 3p.
  4. Von Drehle, David. "2 The Tea Party." Time 176.26 (2010): 81-86. Academic Search Complete. EBSCO. Web. 13 Mar. 2011.
  5. Harris, Lee. Policy Review, Jun/Jul2010, Issue 161, p3-14, 12p.
  6. Palin to Fundraise in Newport http://articles.dailypilot.com/2008-09-09/news/dpt-palin09092008_1_sarah-palin-alaskan-governor-newport-beach
  7. Connecting California: Key Public Transportation Projects and Their Benefits for the Golden State http://www.uspirg.org/home/reports/report-archives/transportation/transportation2/connecting-california-key-public-transportation-projects-and-their-benefits-for-the-golden-state
  8. Global Climate Change and Transportation Infrastructure: Lessons from the New York Area http://climate.dot.gov/documents/workshop1002/zimmermanrch.pdf
  9. Science bites climate skeptics in the ass on the House floor http://www.grist.org/list/2011-04-01-science-bites-climate-skeptics-in-the-ass-on-the-house-floor 
  10. Grand jury says OCTA fails low-income bus riders http://articles.ocregister.com/2010-06-09/cities/24630277_1_grand-jury-bus-service-octa 
  11. OCTA board approves cuts to bus service http://abclocal.go.com/kabc/story?section=news/local/orange_county&id=7133743 
  12. Plane Pollution http://ehp03.niehs.nih.gov/article/fetchArticle.action?articleURI=info:doi/10.1289/ehp.971051300 
  13. Tomes' time might be up at Newport Beach library http://www.latimes.com/news/local/la-me-0329-newport-library-20110329,0,1671782.story 

Monday, January 17, 2011

Taxes Can Sustain Us, but Never Will the Machines of Profit

Maybe the toughest and best solution for a public bailout is possibly removing any and all public services. Not permanently, but take away public services long enough for taxpayers to learn how to appreciate and understand where and how their tax dollars are spent to keep the society in which they live stable, secure, and apart from living in squalor and third world status. In the United States, many voters/taxpayers are mislead into thinking that taxes are too much, harm the individual's ability to do business and profit from it, provides extreme power to government, and only provides services to those who, unlike them, are not a contributing part of society. These premises are completely unfounded, and lack the reasoning that would wholly explain why taxes even exist at all.

 I have always held to the saying, "one has to spend money, to make money", sometime more than you earn, and this statement has so many truths that can stand up to our current financial dilemma, in that the money needs to come from somewhere, and if those that possess it fail to reintroduce it into society, then that is the point at which the economic machine grinds to a halt. It's a cycle, and as the saying imparts, the economy needs a consistent cycling of money in order to sustain itself. Businesses do it everyday, yet those who favor business spending associate that type of revenue as a benefit to profit only. Those same members of society, though view public spending in a negative manner, maybe because it is not providing instant gratification to their profit margins, and associate it right away with wasteful spending.

So, let's take it to the extreme. Let's provide a scenario that meets the far-right's wet dream of tax policies, which would be minimal to if any taxes at all. What kind of society would that be? Let us compare the benefits of a nation with a structured tax system to that of an under-developed nation, that may have a minimal tax policy system in place. Consider, the United States, or any other fully developed nation in Western Europe, and you would find that these are nations that carry a fairly well structured taxation system. Along with this well structured taxation system, comes a strong military presence, one that can move about the globe with ease and provide ample security for its citizens, due to a consistent revenue stream. These well funded governments can go into other countries and invest in their natural resources and provide a pathway for the private industries to business and make profits.

Then there are the amenities of well paved roads, running water, a consistent flow of electricity to each and every home. Look to nations that uphold the status of global tax havens, like Barbados (a 74,000 land force with a coast guard), Aruba (no military force at all), Belize (a force of 79,000 soldiers)! Most of these nations, lack a significant military force, and if they were to be invaded by a foreign force, they could not independently defend themselves. Set the military aside, and weigh in on transportation infrastructure! The U.S. (with a maximum tax rate on individuals of 35%) has well over 15,000 airports, and it is ranked number one in total roadways and railways. Compare that to Russia (with a 13% individual tax rate), with just over 1200 airports, ranked number two in railways, and number eight in roadway infrastructure. It is apparent that societies with higher taxes reap the benefits of return, that comes in the form of a stable and well structured state.

Granted some of these services are supplied by some private companies, but without subsidies and regulation by government, all of which costs money to build and regulate, not only would these utilities be scantily available, they would not be sustainable (Without Taxes, America Would be a Third World Country). I would challenge any individual, who believes in a limited tax system, to provide an example of a state that legally unbinds its citizens from taxation in any form, and show that state could provide the stability and security that matches that of nations that participate in a sensible tax system. An under-developed country without a feasible tax structure will never climb out of non-developed status. According to experts at the International Monetary Fund, development "will often generate additional needs for tax revenue to finance a rise in public spending". This public spending is necessary because it provides all the necessary mechanisms to create effective infrastructure, and without out it, the country stalls in the process of developing (Tax Policy for Developing Countries).

Speaking of developed nations, let's shift the focus to the comparison of tax structures in European states to that of the U.S. Most would argue that European taxes are way to high, and that argument lends itself to the entitlement of U.S. taxpayers, who pay little taxes in comparison to European social democracies, but on the same token receive less services from public sector, and that service is lacking in quality as well. Americans are paying more, simply because they aren't getting a significant return, and psychologically that angers taxpayers, and lends them to believe that government is taking advantage of them (a.k.a. big, bad, and overburdening goverment). If U.S. taxation is placed within the model of private investment, one would see that it is a bad investment, because even though taxes are lower in comparison to other developed nations in Europe, the return of services is lacking quality, efficiency, effectiveness, security, and stability. Why would anyone want to continue the punishment of investing badly? On the other hand, investors would pay more for a share if they felt that its value would have a good chance of increasing over time, and if value is to increase, then that would lead us to believe that more money is being placed into that same investment. Contrary to current investment practices, the taxpayer effectively needs to understand that you cannot get something for nothing, and that a higher rate of taxation doesn't necessarily mean a deflation in the quality of life. The U.S. has "the lowest tax rates among rich countries, the least generous public services" (1). This makes so much sense, because if the taxpayer consensus is to pay less, then obviously the return on services would match the level of financial provision.

An interesting view is if you compare not the rate of taxes, but the effects of government spending and the movement toward privatization and deregulation. The decrease in taxes and the increase in private infrastructure, seem to have an evident detrimental effect on lack of progress in worldwide economies. Take for instance the huge amount of government spending in the U.S. in the 1960's, a time when big programs like Medicare, the space program, military research, and increased regulation were strongly sustaining the economy, and were enhancing the economy on the taxpayer's dime. It was a time of good investment from and for the public. The U.S. was taking on the spending characteristics of the European model (1). It was during the 1980's, with the introduction of Reaganomics (i.e. trickle-down economic theory), and the drive for more market deregulation and the privatization of nationalized companies, where it seems that the descent into economic instability began, where economic bubbles formed and burst in an almost schizophrenic manner. Privatization of once public infrastructure gave conservative leaders a good excuse to justify lowering taxes. It makes a lot of sense, if a company is no longer public, why should the taxpayers have to pay for it? Though this restructuring of the economy sounds good, it fails to work, and fails to guarantee that a stable and effective infrastructure would be provided to the society that, even if it pays a lower rate, has to pay taxes. Look at private energy firms like Enron, or many other privately run utility firms, who place profit over social stability, that took over national energy responsibilities, and yet failed to provide a stable source of electricity for California (Enron linked to California Blackouts); (U.S. electricity blackouts skyrocketing), or created the scenario for regional blackouts in the Northeast. If these utilities were provided by government, the only entity to protect the interests of society and not profit, could such a threat to the stability of society have been prevented?

Where's the evidence, well look back to the 1960's or further back to post-war America, when the economy was growing intrinsically, based on production and value. The nation at that time was providing economic security. Sure, the business economy kept growing through the new millennium, but it was false value, and was only producing profitable returns for those investing in compartmentalized returns, failing to reach the greater element of society. There is no guarantee that private investment will benefit the growth of society. It is ridiculous to think that a privatized nation could promise the same level of efficiency, effectiveness, stability, and security that a nationalized infrastructure could carry. Self interest and the decrease or elimination of taxes fails to benefit either society, the taxpayer or the business realm.

So, for those who doubt government spending, and label it as wasteful, and that it fails to benefit the country as a whole, well I would ask those people to provide me with some evidence in current economic affairs, where private industry has made up for the loss of publicly funded infrastructure. Currently, while most states are preparing to make way for even more cuts to public spending, not a single element of the private industry has come forth to fill that gap. On the same token, they wouldn't be able to because they lack the investors from both sides: the taxpayer funded states who are slashing budgets for spending, and the lack of public investors. Newly re-elected California governor, Gerald Brown, has taken on the same economic character as his predecessor Schwarzenegger, who made extreme cuts to government funded services, and Brown plans to continue this practice by pursuing state worker's pensions. So that's one effort to cut spending. Wisconsin governor, Scott Walker, would provide "only the essential services our citizens need and taxpayers can afford" (2). Illinois, having recently struggled to pay its bills, due to the recent economic fallout, has $8 billion in unpaid social services bills, on top of it under-financed pension plan system. This is number two on our list, and proves that there is still no proof of excessive spending, and in fact its a lack of capacity to spend (2). Due to a significant lack of effective tax rates, it is outrageous to think that any government agencies have the ability to over-spend. It is simply a matter of reality, that there is not enough money coming in to spend anything at all, and that "money coming in" is better known as taxes. It's all well and good to want to cut spending, but it is a futile measure to rant about cutting spending at a time when governments lack the capacity to do so.

With our current rate of taxation, from where is most of this wasteful spending derived? There was plenty of money in the government to be had by the private banks and investment firms, when they failed to provide adequate returns on the false-value commodities they packaged. That wasn't spending, that was considered a stabilization of secure economy, because the private sector was incapable of providing sustainability for society, but at the same time not holding itself liable for doing so. Is it a fair premise that the only heroes of society are the same which failed to rescue anyone but themselves, while the taxpayers lose their right to public services? It was not government that wasted money on the wealthy private industry, but instead the private industry that threatened society's stability, due to its irresponsible free market behaviors. If we are to remove taxes and government, the people that make up the nation will lack economic security, and will only a threat to their livelihood.
  1. "From sea to shining sea." Economist 369.8349 (2003): 6-8. Academic Search Complete. EBSCO. Web. 17 Jan. 2011.
  2. "Budget Worries Push Governors to Same Mind-Set". Davey, Monica. The New York Times. January 17, 2011. <http://www.nytimes.com/2011/01/17/us/17governors.html>