Friday, November 25, 2011

We are the 100%!

As my bank and brokerage account balances will attest, I am not part of the 1%, but I certainly don't feel any affinity for these people who claim to be the 99% ("We are the 99%!") and who stand in opposition to the supposed 1%. Rather, I consider myself to belong to the 100%, which is a group of public-spirited individuals who eschew the kind of class warfare that seeks to divide and isolate the American people into antithetical classes of the 1% and the 99%.
We in the 100% consider that we are all in the same boat, whether rich or poor, employed or unemployed; we are all in this together. The U.S. Declaration of Independence assures every one of us, every member of the 100%, that we all have the same unalienable rights of "life, liberty, and the pursuit of happiness", regardless of our financial condition.
Trying to divide us into separate classes called "The 1%" and "The 99%" is misleading and counterproductive.
It is indeed unfortunate that quite a few normal Americans have been suckered into falsely believing that they are part of some mythical 99% that somehow is less fortunate than the rest of us in the 100%.
We are the 100%!

Is there a tension between capitalism and democracy?

Columnist Harold Meyerson penned an opinion piece in The Washington Post entitled "The growing tension between capitalism and democracy" in which he ponders the questions of "Do capitalism and democracy conflict?" and "Does each weaken the other?" He concludes by suggesting that "Conflicts between capitalism and democracy are breaking out all over. And Europeans — and even Americans — may soon have to face a question they have not contemplated in a very long time, if ever: Which side are they on?" I'm not fully persuaded by his arguments. He has most of his facts right, but his reasoning is a different story and more along the lines of a socio-political "narrative" than analytic reasoning.
To be clear, our political system and our economic system are separate and distinct but joined at the hip. We have a representational democracy, which by definition is not a "pure" democracy. We also have campaign donors, lobbyists, and private ownership of stock in businesses by politicians, making our political system even a bit more less than purely democratic. Our system has always been that way. There is nothing new about any of that.
Our economic system is basically capitalism, but not a pure, unregulated open market. A fair number of people and many billions of dollars of investment are due to government spending at all levels of government, including spending for regulation of the economy, so we are even less of a pure capitalist system than many critics speak of America as being.
With unemployment insurance, Social Security, Medicare and Medicaid, welfare, the postal service, FDIC, and a variety of social services, we clearly have a hybrid political/economic system that certainly does have elements of socialism. That is the "joined at the hip" quality of our system.
Tension? Sure. Absolutely. But we've always had it. We've always had those lobbyists and special interest groups and politicians having an interest in businesses. Our political and economic systems are far from pure and hardly free from tension, but that makes the system stronger and is not the weakness that critics claim. Sure, they would like a more pure democratic political system, but they never have a clearly articulated vision and well-thought out plan for the economic system, maybe because they are closet socialists.
But if they think that capitalist economics skews our political system, don't they realize how socialist economics would almost completely dominate the political system? That's why socialism basically won't work, because it perverts the political system by so thoroughly dominating it in a much deeper sense than even our current capitalist system.

Thursday, November 24, 2011

Third party vs. four-party system

There has been various chattering about the need for a third party in our political system. We occasionally have a third-party candidate, but no true, durable alternative to the current two-party political system. Recently some liberal progressives have been muttering about their disgust with Obama and the need for a much more left-wing progressive liberal third party, and now we read in The Washington Post in an article entitled "Moderate Americans Elect group hoping to add third candidate to 2012 election ballot" about the efforts of a group called Americans Elect to prepare for running a moderate centrist candidate to be picked using a populist Internet voting system. I'm all for moderate centrists, but with so many groups jockeying for who would be the third party, I don't see that any third party would really be able to win out over the two entrenched parties. Sure, a third party gives one group of voters a sense that they had a voice, but to what end other than merely to have a voice just for the sake of having a voice? My preference would be to have two new centrist parties, one moderate conservative centrist and one moderate liberal centrist and let the left and right-wing extremists who "control" the two existing parties keep them.
So, what I envision is simultaneously and symmetrically creating those two new moderate centrist parties and then encourage the moderates from the Republican and Democratic parties to migrate to their respective moderate centrist parties. It might take a few election cycles to complete the transition, but eventually we would have a four-party system in which everybody gets a much stronger voice to express their political views.
I think this would be a win-win for all parties and the American public individually and as a whole.
Hard-core conservatives would control the old Republican party and not have to feel that their positions and policies are being "watered down" by moderate centrist conservatives.
Hard-core liberal progressives (and even socialists) would control the old Democratic party and not have to feel that their positions and policies are being "watered down" by moderate centrist liberals.
Moderate centrist conservatives would control the new center-right party and know that they can "compromise" and work with the new center-left party without being restrained by far right wingnuts.
Moderate centrist liberals would control the new center-left party and know that they can "compromise" and work with the new center-right party without being restrained by far left wingnuts.
Voters would be able to express their votes in a way that more truly expresses how they feel, and in an average election a voter for either moderate centrist party could sleep well at night knowing that a win by the other moderate centrist party is not going result in feeling that they are going to get really screwed as seems to be the case today.
Voters would also be able to cross over and vote for the other moderate centrist party if they felt that it was better positioned to win or had a more appealing candidate, or if the opposing wingnut party was actually threatening to attract a winning collection of voters due to some special issues in a particular election. And, sometimes, one party simply doesn't offer a truly great candidate for the voters.
Sometimes both centrist parties may have very similar goals, but one has either a more appealing plan or a candidate who just seems more capable of pulling off the plan (and being elected first.)
There might even be situations where the two centrist parties decide that their agendas are close enough and that one or both of the wingnut parties is a big enough threat that it makes more sense to pool their interests and have one of the two centrist candidates voluntarily drop out and strongly urge his or her supporters to vote for the other moderate centrist candidate.
To me, this would be a much more sensible political party system and go a long way in addressing the complaints of both the left and right extremes and citizens who feel that the extremes have two much power in their respective parties and are preventing desirable moderate centrists from being nominated.

Wednesday, November 23, 2011

Rocking the boat - How America maintains a moderate government

Despite the wide disparity of political beliefs and left vs. right and liberal vs. conservative divisions in America we still manage to maintain an overall moderate form of government. Sure, sometimes it is a little too liberal for some folks and sometimes it is a little too conservative for other folks, but on average the policies of the U.S. government are moderate and fairly centrist. How do we do it?
Overall, our government policies tend to be reasonably moderate and centrist even if in the short-term they may be quite volatile and leap from very liberal to very conservative and back again in a rather violent manner.
Basically we have two sides, one side rather liberal and one side rather conservative. Although we sometimes have bipartisan agreement to stay approximately in the center on policy, much of the time one of the sides manages to secure "power" and policy suddenly lurches in that side's direction. Not to worry, because usually it doesn't take too long, maybe a single election cycle or in some cases a decade or two or three and then the American people grow weary of the limitations of that one-sided power and the balance among voters suddenly flips over and people vote to give the other side the opportunity to balance out or otherwise compensate for the excesses of the previous regime.
Alas, the side in charge rarely stops when they hit the center line of moderate policies and just keep going towards the other extreme and once again voters grow weary of the extremism and the balance of voters flips again.
Rinse and repeat. The result is that over time we average out to that magical moderate centrist center line, not by precise design but simply as a result of lurching to and fro, like a drunken driver careening from guardrail to guardrail. Hey, it may not be a pretty sight, but it does manage to give the desirable average end result of a roughly moderate centrism.
I do think that in a very real sense we can say that we achieve a moderate centrism by balancing the liberal and conservative agendas. Not a static, fixed balance, but a continuously variable dynamic balancing.
And I do think the U.S. government is healthier and more functional with this constant rebalancing. It gives us the opportunities to experiment with policy elements that are a bit further from dead center than if we merely had a single mega-centrist party or even two parties that were more finely hewed to near-center agendas.
Can we do better and simply stay in the rough vicinity of the moderate center line without the disruptive detours? Maybe, but I personally am not convinced. I think the problem with that hope is that although there may be a silent majority that is moderate, that is the problem: they are silent and passive and not as active and passionate in politics as the left and right extremists and political opportunists are.
Now here we are at the threshold of another election cycle. Are the American people in a mood to sit back and tolerate only a little rocking of the boat, or are they ready to do some heavy leaning and shifting of weight, either further to the liberal left, or are they ready to give up on liberalism for now and put their weight into leaning towards the right? My personal sense is that we will see a lot of little side-to-side rocking but overall maintain roughly the same direction. Although there may be a lot of disappointment with the current lean to the left, they don't really want to lean a lot further in that same direction just yet, nor do they want to radically switch directions. They simply want to give the current direction a little more time and then decide what to do based on what results get achieved. Individuals may disagree strongly with staying the course, but averaging the left-leaning with the right-leaning in terms of vote counts probably just balances out. Whether this is really the case remains to be sorted out next November.
In any case, the angst and the anxiety and all the boat-rocking are simply core components of the American political experience. It really is who we are, not so much as individuals, but collectively, and that is all that really matters. Our incredible diversity and how we manage to balance it is a key aspect of our core strength and will allow us to survive just about anything.

Tuesday, November 22, 2011

Larry Summers on inequality

Former Treasury Secretary Larry Summers has an opinion piece in The Financial Times entitled "We have to do better on inequality" in which he proposes a few ideas for dealing with inequality and concludes by saying that "Neither the politics of polarisation nor those of noblesse oblige will serve to protect the interests of the middle class in the post-industrial economy. We will have to find ways to do better." I'm not terribly persuaded by his arguments, but they are worth considering. I think his only idea that is indisputable is that we need to assure that higher education is affordable by all. His other two ideas were basically that we shouldn't reward the wealthy with special "concessions" as well as to charge market-based premiums where government provides implicit or explicit insurance, and that the estate tax should not be "eviscerated." I would note that he did not distinguish income inequality from wealth inequality.

My "Go Simple" plan for deficit reduction

Given the failure of the deficit supercommittee and a sense that Congress can't come to any agreement, I realized that I actually have a deficit reduction plan that can actually work and doesn't require anybody in Congress to even lift a finger since it all happens automatically.
My "Go Simple" approach to deficit reduction gets us most of the way to where we need to be, with just two components that don't require any agreement/deal to achieve:
  1. The automatic $1.2 trillion in spending cuts.
  2. The automatic expiration of the Bush tax cuts at the end of 2012 gives us $4.7 trillion (the CBO estimate of $3.9 trillion plus $800 billion of interest to borrow that $3.9 trillion.)
That's a total of $5.9 trillion over 10 years, more than even any of the so-called "Go Big" plans.
The beauty of this plan is that this is in fact what will happen if Congress decides to "do nothing."
Granted there is still more work to be done to solve the deficit long term, including Medicare and Social Security reform, but at least my plan is a better start.

Is disturbing the peace peaceful?

Interesting question: Is disturbing the peace un-peaceful by definition? I think so.
Here are some forms of behavior that clearly can be categorized as "disturbing the peace" and hence should not be considered "peaceful":
  • Very loud music.
  • Large crowds that restrict access to public space and pathways.
  • Loud noise (music, yelling, drumming, etc.) during "quiet hours" (say, 11 PM to 6 AM.)
  • Mob-like or gang-like activity that intimidates the general public.
  • Any behavior designed or perceived to be a "psychological assault", such as loud drumming or noisemaking for many hours on end.

More on peaceful behavior

There are plenty of forms of behavior that may be nominally legal or tolerated by society as forms of protest or even tolerated as forms of civil disobedience, but there are definitely limits to what can be considered "peaceful." Peaceful doesn't just mean a lack of hard-core violence where blood is drawn and bones and windows are broken. Peaceful means... peaceful, both the absence of the use of force and restraint from physical resistance and verbal assault.

Here are a few more forms of clearly un-peaceful behavior that I have seen recently in videos or media reports:
  • Blocking traffic.
  • Physically resisting a police officer, by pushing or pulling back.
  • Attempting to push past a police or other security barricade.
  • Yelling at a police officer. This may be protected speech, to some degree, but clearly is not peaceful.
  • Refusing to move when requested by a police officer or security guard.
  • Yelling with a tone of anger. Technically this is protected "speech" to some extent but is definitely not "peaceful."
  • Any destruction of property of others.
  • Rowdiness.
  • Engaging in provocation. Basically incitement.

Monday, November 21, 2011

RIP deficit supercommittee

As widely expected, the joint congressional deficit supercommittee threw in the towel and admitted that they could not reach a deal, opening the door to the automatic across the board $1.2 trillion in spending cuts starting in 2013. That's fine with me and will be a much-needed strong dose of medicine for what ails the federal budget. There will be plenty or more work to do on the federal budget in the coming months and years, but these automatic cuts are a great next step.
Although there is some chatter about reducing or redirecting some or all of the automatic cuts, there simply aren't the votes for such actions. In fact, President Obama has now publically stated that he will veto any such attempts to prevent the automatic cuts.
Some are criticizing Obama for not being involved in the supercommittee negotiations, but I would suggest that it was not his job and that he already did his job during the negotiations that set up the supercommittee back at the end of July.
Besides, I think Obama is making the wise political decision to distance himself a little from Congress to focus on his own reelection. It is now up to the American people to decide how to vote for Congress next year to refocus them as voters see fit.

Just missed an Occupy protest at Baruch College

I just barely missed an Occupy protest at Baruch College. I was walking down Lexington Avenue and as I crossed 25th Street I saw a bunch of small clumps of cops and students and police vans around Baruch and down 25th Street towards 3rd Avenue I noticed a much larger group of people out in the street and I heard a lot of loud voices. I was on my way to a New America event so I didn't have time to check out what was going on and simply assumed that it was an Occupy event. I also saw a helicopter hovering a couple of blocks further west on 25th Street. The Occupy Wall Street web site says that this was an Occupy CUNY protest where occupiers were prevented from entering a CUNY public event where tuition hikes were to be discussed.
The protest was covered by the New York Times as well. And NY1 News.
I can understand objections to being excluded from a public meeting, but given the track record of the Occupy movement, let's just say that their reputation has preceded them. I would simply assert that well-behaved citizens of course have a right to attend and speak at public meetings, but only to the extent that they exhibit a sense of decorum, follow the rules, and respect the rights of others to listen to the proceedings of the meeting without disruption.

Dysfunctional government, gridlock, and bipartisanship

I don't concur with critics of Congress and Washington that our government is "dysfunctional." The primary argument they have, in fact the only argument they really have, is that gridlock indicates dysfunction. That's where I disagree with them. Gridlock is a function, not dysfunctional. Gridlock simply indicates that bipartisan agreement has not been reached. That's all. If members of Congress or the administration wish to put forward partisan proposals that do not have broad bipartisan support, that is their prerogative and there is nothing wrong or dysfunctional with that since they do so knowing full well in advance that partisan proposals are intended merely to score political points rather than to secure bipartisan support and become law. Passing more legislation just for the sake of passing more legislation is not automatically better government or more functional government or less dysfunctional government. Gridlock is merely a check on government, an assurance that important legislation has broad bipartisan support before in becomes law. That is an important function of the process, not dysfunction.
The makeup of Congress merely reflects the broad makeup of the entire country, albeit roughly and without precision per se. Members of Congress represent their constituents; if their constituents feel otherwise they are free to vote them out in the next election. If Congress seems gridlocked, that usually simply indicates that the country as a whole lacks a consensus, and in such cases the right thing for Congress to do is... nothing. And that is very functional since it better represents the country as a whole.
Even non-starter partisan proposals are not really dysfunctional since they give a voice to the various constituencies that exist in this country. That also is an important function of government. Even if there is no broad bipartisan consensus on a particular issue or proposal, at least the various constituencies can have their voices heard so that future proposals can find broader bipartisan support.
The impending failure of the deficit super-committee is a perfect example. Sure they may "fail" (although there is still time for a last-minute breakthrough), but that is primarily due to the partisan nature of the proposals and the strength of the partisanship merely indicates that there is strong anxiety across the entire country about both rising taxes and reduction of government services, whether the reduction is for defense or social services. This particular gridlock is a good thing since there is not broad bipartisan support right now for doing anything other than the default which is the across the board $1.2 trillion in spending cuts. For all intents and purposes there does appear to be broad bipartisan support for going with the default spending cuts as unappealing as they may seem to various constituencies. It's called shared sacrifice, each side giving up some of its sacred cows for the greater good. And, it is a sign of a functional government, not dysfunction.
Polls may show that a majority of Americans are unhappy with their government and Congress in particular, but I think that is more a matter of each partisan constituency being unhappy that their partisan agenda is not advancing (achieving smaller government and lower taxes on the right and enhancing government services on the left), or with independents merely expressing the opinion that they don't like partisan politics despite the fact that a lot of Americans do.
Does the unhappy majority really agree on an acceptable solution? Nope. That means that gridlock is the answer until somebody comes up with a broad bipartisan approach that the majority does find acceptable. As unhappy as many people are with the status quo, maybe it just happens to be that the status quo is the optimal solution for the present time. There is nothing dysfunctional in that.
Finally, gridlock on Congress or Washington does not mean we have gridlock in all of America. People continue to go about their daily business, businesses continue to spend and hire (or fire as the case may be), farmers continue to plant and harvest crops, Detroit cranks out cars and trucks, etc. Life goes on. Imagine that – life can go on even if Congress doesn't pass any new legislation. That's a tough concept for some people to swallow, but that is the nature of reality.
Maybe the economy would grow faster with more government stimulus and spending, or maybe with lower taxes. Could be (and likely is), but maybe growing at a more leisurely and more sustainable pace right now is actually better for the long-term sustainable economic health of the whole country, despite what any partisan constituency might say.

Sunday, November 20, 2011

How will lack of a deficit deal impact the markets

AFAICT, it looks as if the failure to reach a deal on how to cut the federal deficit will be mostly a moot point for the markets. Sure, there are probably traders and speculators more than willing to use any negative news as an excuse to push the market down, but according to Bloomberg, Moody's Analytics' economist Mark Zandi said "I don't think there'd be much of a reaction" by markets to a supercommittee failure to agree on a plan. He said "It's all relative to expectations" and investor expectations with regard to the committee "have been and are still very, very low."
We could even see a modest rally in relief that the uncertainty of the outcome of the supercommittee's deliberations is finally resolved.
OTOH, lingering uncertainty about any contagion from the European debt crisis and uncertinty about the economic outlook in the U.S. could be a continuing drag on the stock market, although one would think that much of that uncertainty should already have been priced into the market.
One other lingering uncertainty for 2012 is whether certain existing tax cuts, unemployment aid, and the payroll tax cut will simply expire at the end of this year or whether Congress may agree to extend them again for 2012. If not extended, the economy could take a hit of some degree for 2012. These are different from the Bush tax cuts which automatically expire at the end of next year (end of 2012.)

Closing the federal deficit with higher taxes

I have no problem with the general proposition that the federal deficit should be closed with a combination spending cuts and tax increases (as well as higher growth over time providing higher tax revenues), but I do have a problem with the ideological targeting that quite a few Democrats are using when they absolutely insist on a "millionaire's tax" and ideologically insist that "the rich" are not paying their "fair" share (whatever that really means) and that anything else would be "balancing the budget on the backs of the poor and the middle class." Ideology should not have any place in the deficit talks. There are plenty of people in the middle class, including myself, who are more than capable of footing a higher tax burden for paying down the deficit. There is simply no non-ideological reason for suggesting that it must be only "the rich" who must have their taxes raised to pay down the deficit.

Acts of defiance to police authority are also inherently violence by their nature

Add to my list of actions which should be construed as violence by their nature and inherently not peaceful, refusal to obey reasonable requests by the police and outright defiance of police authority. Again, not that civil disobedience is not a time-honored tradition and maybe even appropriate in some situations, but refusing to comply with a police request is simply not a peaceful act. Most commonly this will occur when protesters are already being disruptive, maybe even passively such as blocking a public space or pathway with a sit-in or parading in the street without a permit, so adding refusal to comply with a reasonable police request simply makes the protesters' activities doubly less non-violent and non-peaceful.

No debt deal is still a win

Even if the joint congressional debt/deficit super-committee fails to arrive at some grand deal by tomorrow, as now seems likely, this is still a "win" for everybody but Congress and the two political parties since we will still automatically see $1.2 trillion in across the board spending cuts in 2013.
And, the Bush tax cuts automatically expire at the end of 2012 within any "action" required by Congress, equivalent to another $800 billion over ten years. Between the two, plus incremental economic growth as the recession recovery gradually build steam, plus winding down of Iraq and Afghanistan, plus winding down of corporate tax deductions for losses during the financial crisis, and the result is that two years from now the federal budget deficit won't look anywhere near as bad as it does today in hindsight.

The puppet masters of Occupy Wall Street finally speak in the mainstream media

The puppet masters of the Occupy Wall Street "leaderless movement" have now spoken publically in the mainstream media. Kalle Lasn and Micah White, editor in chief and senior editor of Adbusters magazine, have penned an opinion piece in The Washington Post entitled "Why Occupy Wall Street will keep up the fight." It provides a little background and a little bit of a roadmap for where the movement may be headed.
If there was any doubt that the Culture Jammers at Adbusters were "behind" the Occupy Wall Street movement, they state it explicitly:
The Occupy Wall Street meme was launched by a poster in the 97th issue of our international ad-free magazine, Adbusters, the hash tag #OCCUPYWALLSTREET and a "tactical briefing" that we sent to our 90,000-strong "culture jammer" global network of activists, artists and rabble-rousers in mid-July. The movement's true origins, however, go back to the revolutions in Tunisia and Egypt. That was when the world witnessed how intransigent regimes can be toppled by leaderless democratic crowds, brought together by social media, that stand firm and courageously refuse to go home until their demands for change are met. Our shared epiphany was that America, too, needs its Tahrir Square moment and its own kind of regime change. Perhaps not the hard regime change of Tunisia and Egypt, but certainly a soft one.
They say they want a "Tahrir Square moment", but then what? As we are currently seeing on a daily basis with angry protests in Egypt with hundreds being injured and a few dying every day, the magic of any "moment" is quickly lost as reality sinks in. To me, if you want some grand change, you really need a hard-core plan for the long run to actually make the change happen in a sustainable manner, not just some clever scheme to achieve that magic "moment" of "regime change", even if it is a "soft regime change." I mean, I think most people recognize that "toppling" is relatively easy compared to governing. Ask former President Bush about his little adventure into Iraq.
One not so obvious point needs to be raised. The piece says that "Occupy was born because we the people feel that our country and our economy are moving precipitously in the wrong direction", but it has to be noted that the head puppet master, Kalle Lasn, is not an American citizen and does not live in America (he's an Estonian emigree, now a Canadian living in Vancouver, BC), so this immediately puts into question the true meaning of "we", "us", "our", and "our country" and "our economy." Deputy puppet master Micah White is indeed an American citizen, but he is a resident of Berkeley, California, which is about as separated from mainstream America as one can get (other than maybe Washington, D.C.)
The puppet masters promise us that "we will see clearly articulated demands emerging." The piece lists a few of the more predictable ones, consistent with the usual agenda of the liberal progressives.
They say they will be entering a "visceral, canny, militantly nonviolent phase of our march to real democracy." I don't know how they can possible imagine non-violence that is simultaneously "militant" in nature. It sounds like somebody is going to get defrauded if not hurt in such a deal.
And finally they assure us that they "will build momentum for a full-spectrum counterattack when the crocuses bloom next spring." Once again, they are giving lip service to peaceful and truly non-violent protest while using the language of violence to promote such efforts. How could anyone think that "a full-spectrum counterattack" could be anything but violent?
For reference, here is a similar, but milder opinion piece that the same puppet masters penned for The Guardian back on September 19, 2011, entitled "The call to occupy Wall Street resonates around the world."

Are protests truly non-violent?

Granted, some police responses have been excessive, but are a lot of the Occupy protests truly non-violent? Is peaceful vs. violent a simple black and white, or is it more of a gradient? Is speech always by definition non-violent, or can it be just as threatening and harmful as physical violence? Can passive inaction be considered a form of violence? I would submit that extreme forms of speech and even some forms of seemingly passive inaction can indeed constitute forms of physical force or low-grade violence and definitely non-peaceful behavior.
But before I elaborate, I did want to mention that a lot of apparently excessive police activity is usually simply an attempt to preemptively avoid allowing the situation to get out of hand. That was a big lesson from N30, the protests against the WTO that did turn rather violent before the police cracked down on them. So, police "learned" their lesson from that episode and what we see today played out all across the country is that lesson that the N30 protesters "taught" the police.
To me, peaceful people share public space and pathways and facilities, so any attempt to monopolize a public space or pathway or facility by protesters is clearly not "peaceful." It may be an act of civil disobedience, but physically blocking the use of this public space is indeed an act of force or low-grade violence against the non-protestors.
Locking arms and standing still to block public access or any other seemingly passive behavior may nominally seem to be non-violent, but since it retains the element of physical blockage and intimidation it is indeed a form of violence, albeit low-grade.
Civil disobedience is by definition unlawful, but can in fact be peaceful. A sit-in that does not block all access can be quite peaceful, non-threatening, non-intimidating, and indeed non-violent. There is some kind of line or gray area between action or peaceful inaction and physically infringing on the rights of others.
Chanting can be peaceful, for sure. But when the volume and intensity results in intimidation or the language is threatening or intimidating, then indeed it can be violent in nature. Incitement clearly needs to be treated as a form of violence, if only because it can quickly lead to violence. There can be nothing peaceful about threats or intimidation. Protesters can claim to be peaceful, but only to the extent that they refrain from crossing the line into threats, intimidation, name-calling, or incitement. Many protesters are in fact peaceful, but even if a very few cross the line and become aggressive, the quality of peaceful can quickly evaporate for the whole group.
We're all used to disruptions of various sorts in our daily lives and tolerate them when they are minor and temporary, so protesters can get away with a very limited amount of disruption, but the truth is that disruption is a physical act, an act of force, even if that act is nominally passive. It is its physical quality that makes it an act of force, and hence an act of violence, albeit low-grade. Even very short temporary disruptions run the risk of inciting unexpected and possibly violent reactions, and hence need to be characterized as physical force and indeed at least a low-grade of violence.
To be clear, to me, low-grade violence or any "show of force" and intent to disrupt or threaten or intimidate is clearly not peaceful in nature.
So, yes, many protests and protesters can clearly be truly peaceful and truly non-violent, but it is equally true that many forms of protest involve a physical element and various forms of intimidation if not outright incitement and hence need to be considered at least a low-grade of violence. And since violence begets violence, there is a great risk that even low-grade violence can lead to hard-core violence.
There is the practical problem that a protest can be made of of smaller groups of protesters, each with their own agenda and personality, so that some groups can be very peaceful and respectful of others even as other groups or individuals in the same overall protest can be quite the opposite. It is the latter who may taint the character of the entire protest, unfair as that may be. Unfortunately, it is the prospect of those latter "bad apples" that force the police and civic leaders to act preemptively and sometimes excessively to all protesters.

Occupying vacant buildings

On my way back up to midtown on my usual walk around lower Manhattan yesterday (11/19) I passed by the TD Bank branch on the corner of 14th Street and Fifth Avenue and saw some "occupy" banners hanging above the bank signs and even a tent hung on the side of the building above the bank. Looking closer I saw a lot of posters in the windows of the second floor. The occupied space is actually leased by the New School (supposedly from Wells Fargo) who is supposedly willing to tolerate the occupants in that portion of a student study center.
There is certainly a lot of vacant commercial, retail, and office space around that people could theoretically "occupy." Maybe that is a possible next phase of the occupy movement. But they're not really occupying "Wall Street". They're really occupying "the lingering effects of the recession" or "the weak recovery."
One of the banners is quite telling: "Annihilate Capitalism." That doesn't seem oriented towards garnering broad support and would tend to limit the movement to being a narrow niche and not being able to appeal to mainstream America. OTOH, it is kind of a trademark action of a "culture jammer" that Adbusters would probably appreciate.
During the minute or so that I stopped at the curb to read all the posters and banners I saw almost nobody else stop or even apparently notice them. One woman stopped and took a picture. That was it. Interesting. This suggests that even if the movement can stay in this mode of operation, they may quickly lose the attention of the general populace.

-- Jack Krupansky

Saturday, November 19, 2011

Income/wealth inequality is a red herring

Yes, it is absolutely true that the numeric value of the financial wealth of a "rich" person is greater than for a "poor" person or even a "middle class" person or a "working class" person, but in our system of representational government each still gets a single vote. The "inequality" of financial income or wealth is a red herring and completely irrelevant when it comes to choosing representatives. There is a myth or "narrative" that money buys access, but there is plenty of access in our system and the perceived extra access provided by money is grossly overrated. If there is so much money in politics it is precisely because it doesn't manage to buy the degree of access and control or even influence that progressive liberals and groups such as Occupy Wall Street and the rest of the national Occupy movement imagine it does.
Lobbying and bribery are not the same. Bribery and extortion are crimes and of course should be prosecuted, but lobbying and otherwise legally seeking to influence government is neither a crime nor inherently evil or "corrupt." Even unions, environmental groups, state and local governments, and a variety of social advocacy groups pursuing "social justice" engage in lobbying in Washington. Lobbying is hardly limited to business and "corporatists."
Liberal groups are lobbying as much as conservative groups. If conservatives raise a lot of money for lobbying, it is precisely because they are competing against the lobbying of liberal groups.
Sure, the rich have more money, but there are fewer of them. Sure the middle class and working class have less individual income and wealth, but there are more of them. It actually kind of balances out, in a rough sense. In fact, as famed economist Joseph Stiglitz's own numbers show, the 1% only have 25% of total income and only 40% of total wealth. Yes, the 99% actually do get the lion share of the income, 75%, and possess a modest majority of the total wealth, 60%. But when it comes to votes and winning elections, which is all that politicians actually really care about, it is number of votes and not the income or wealth of the individual voters that determines who wins the elections. Sure, campaign funding does matter, but once again there is no clear indication that a smaller number of large donations really "buys" more votes than a larger number of small donations.
The simple fact is that big business needs workers and consumers and has a vested interest in jobs, healthy incomes, and (relatively) happy workers. The problem with declining incomes over the past few decades is a problem, not a "feature" for businesses. Sure, businesses seek to keep expenses down, but they also seek to retain workers and keep them reasonably happy.
A lot of the decline in incomes over the past few decades has far less to do with some devious scheme of the rich and all to do with a needed adjustment after the excesses of unreasonable wage hikes due to union extortion in the 1960's and 1970's ("pay up or we strike!" and state and local politicians "buying" the support of unions) coupled with the high expense of dealing with the ballooning regulatory environment in the U.S. in that period as well. Starting in the early 1980's and even late 1970's, increased foreign competition (e.g., cheaper imported compact cars and electronics and textiles) and the maturing of the Baby Boomers as consumers resulted in intense pressure on businesses to cut costs. They really had no choice. There was no longer a growing market for the products and rising prices that they had depended upon during the earlier period when they passed the cost of higher wages and regulatory expenses directly on to consumers. And the Federal Reserve under Paul Volcker put an end to elevated inflation as well. Competition was changing, consumers were changing, technology was changing, government and regulation were changing, etc. None of that was any kind of grand conspiracy by The 1%.
And it is simply true that far too many middle class, working class, and poor consumers spent too much and saved too little. There was simply too much "consumerism." Was there some grand conspiracy by The 1% to encourage an excess of consumption and a deficit of savings? No, not that I am aware of. Sure, there was lots of advertising to encourage consumption, but there was certainly a dearth of discipline and responsibility on the part of The 99%. To assert that they were not responsible for their own actions is absurd. It is also true than many (most) of us got very poor if any financial education in how to properly budget for the future and how to properly prioritize saving over spending.
If the activists and promoters of the class warfare tactic of blaming income/wealth inequality and blaming The Rich for that inequality believe they have a good case for their beliefs, I have yet to hear that case. Yes, I have heard their arguments, but as I note above, their arguments ring hollow and do not amount to a solid case.
Yes, we have high unemployment and underemployment and stagnant incomes, but businesses stand to benefit from addressing these issues as much as workers themselves, so this really is more of a 100% of us in the same boat than the divisive argument of The 99% vs. The 1% and blaming The Rich for all social and economic ills.
Income/wealth inequality is an ideological "talking point", not an enlightening path to a solution to anybody's problems.

Friday, November 18, 2011

Wealth extraction: Another surefire indiction of a socialist

If the term "redistribution of wealth" is a surefire sign of a socialist (or at least a socialist at heart), "wealth extraction" is certainly a rock-solid indication of a socialist as well. The (socialist) theory is that The Rich get rich by "extracting wealth" from The Poor. As the Socialist Central Committee of America's Socialist Party says in their "Socialist Agenda":
Capitalism is an exclusive economic system that extracts wealth from lower ranked families to subsidize the affluent lifestyles of families in the upper ranks.
Personally, I hadn't heard the term "wealth extraction" or "extraction of wealth" very often in the past , but since Occupy Wall Street popped onto the scene it is getting bandied about much more frequently.

Is Occupy Wall Street now on life support?

The multiple Occupy Wall Street protest events yesterday were a mixed bag. The "Shut Down Wall Street" protest in the morning did attract some attention, but was on the small side and really didn't "shut down" the stock market, banks, or other financial markets in any way. Maybe that's all they really wanted: a little attention. I've seen absolutely zip in terms of any coverage of the "Occupy the Subways" phase in the afternoon. The only real success of the day was when students and union members joined in moderate-sized marches from Union Square and Cooper Union down to Foley Square. The march down Fifth Avenue was probably the most successful since the police were focused on the march down Broadway and so preoccupied with keeping the Broadway marchers on the sidewalk that the Fifth Avenue marchers were able to walk out in the street between the cars and trucks and vans disrupting rush-hour traffic (a little compared to the normal disruption of rush-hour traffic itself.) That said, I'm not sure that disruptive and chaotic "march" delivered much of a coherent "message" to anybody. After Foley Square the marchers walked across the Brooklyn bridge, uneventfully. Later, livestream showed only a few dozen diehard "occupiers" hanging out at Zuccotti Park, actually being "peaceful."
Without all those students and union members, who can't be counted on 24x7, the Occupy Wall Street movement is barely hanging in there.
One amusing anecdote... Late Thursday evening a young woman stopped by the livestream in Zuccotti Park for just a couple of minutes, saying how she missed out on all the action because she "had to work" and she had to go home to get some sleep so she could "work tomorrow." Another guy from Utica, NY lamented that their camp shut down because all but two of them had jobs to go to and needed to get some sleep at home. The press has been filled with examples of people who left jobs to come down to protest.
So much for the idea that a lack of jobs is "fueling the movement."
This really is a movement of the elite. Sure, there are probably plenty of unemployed characters sucked into the frenzy as well, but it really does seem to be more of a social/political movement than an economics-based movement.
People in the movement seem to want "change" not to help create sustainable jobs for real people, but in support of their social/political ideology and agenda.
The whole 1%/99% angle seems less about achieving the results of more and better jobs than picking an ideological fight. It sure smacks of "class warfare" to me.
Occupy Wall Street seems quiet today. Nothing but reruns on the main livestreams.
There have been no new instructions from The Mother Ship, the puppet masters at Adbusters, Culture Jammers HQ in Vancouver, BC (Canada) today. In fact, none since Wednesday.
Maybe the main accomplishment of the day was probably a quote from one of the kids hanging out at Zuccotti late in the evening who had a great retort to an interloper who referred to them by their own moniker of being "a leaderless movement" – he said "No, we're not a leaderless movement, we're a movement of leaders."
I'll probably stop by Zuccotti on my usual Saturday walk around all of Lower Manhattan, not that I expect to see much that I haven't already seen on livestreams. Before Occupy Wall Street there was always a modest crowd of vendors, tourists, and the homeless and skateboard crowds hanging out there.
Other than that, I think I can safely put Occupy Wall Street on my "ignore" list for the rest of the year, but I'll keep an eye open for any major new developments, other than random noise such as the kind of protests we saw yesterday.

Wednesday, November 16, 2011

Latest command update from the Occupy Wall Street Mother Ship in Canada

I know that last week I said I was going to ignore the Occupy Wall Street movement for the rest of the year, but the "reset" of the movement's occupation of Zuccotti park in Manhattan kind of "changes everything" or at least has the prospect of changing everything. In fact, the movement's Mother Ship, the puppet masters at Adbusters Culture Jammers HQ in Vancouver, BC, just issued Tactical Briefing #19 – Our Existential Moment, which bluntly states that:
Our movement is living through an existential, make-or-break moment.
That's actually a semi-grim admission for a movement based on blind optimism, but part of that is probably simply to frighten the movement's members and supporters and promoters into a higher level of commitment and involvement.
The self-styled Culture Jammers admit the importance of New York to their movement, referring to Zuccotti Park as "our movement's spiritual home."
The "briefing" goes on to say:
This assault has stiffened our resolve. Now begins the second, visceral, canny, militant phase of our nonviolent march to real democracy. We regroup, lick our wounds and begin our counterattack as early as tomorrow.
We will turn this winter into a training ground for precision disruptions – flashmobs, stink bombs, edgy theatrics – against the megacorps and the unrepentant 1%, a festival of resistance in the snow with, or without, an encampment that'll lay the tactical foundation for our Spring Offensive.
I note that although they superficially claim nonviolence, they resort frequently to the language of violence: "militant phase", "counterattack", "disruptions", "bombs", "resistance", and "Spring Offensive." If noviolence is truly the goal, why resort to so much language of violence? Don't they accept that "words have meaning"? Or maybe they do.
I may or may not comment on the activities of the movement on "N17" which is their code word for their "Day of Action" tomorrow (November 17th.) They say they intend to "Shut Down Wall Street" and "Occupy the Subways", but that remains to be seen and I am rather skeptical that they will get much further than some flash mobs, some union rallies, minor disruptions, and a bunch of arrests. I note that they use the same naming nomenclature as the anti-globalization movement (N30, A16, J18, etc.) But after tomorrow I hope and expect to go back to ignoring the movement unless they hit some other new and significant existential make-or-break moment or milestone.

Oops... forgot someone seeking to co-opt Occupy Wall Street: Matt Taibbi

Matt Taibbi of The Rolling Stone is yet another member of the gang of outsiders seeking to co-opt the Occupy Wall Street movement. In his article entitled "How I Stopped Worrying and Learned to Love the OWS Protests" he re-interprets the "aims" of the movement as:
... I'm beginning to see another angle. Occupy Wall Street was always about something much bigger than a movement against big banks and modern finance. It's about providing a forum for people to show how tired they are not just of Wall Street, but everything. This is a visceral, impassioned, deep-seated rejection of the entire direction of our society, a refusal to take even one more step forward into the shallow commercial abyss of phoniness, short-term calculation, withered idealism and intellectual bankruptcy that American mass society has become. If there is such a thing as going on strike from one's own culture, this is it. And by being so broad in scope and so elemental in its motivation, it's flown over the heads of many on both the right and the left.
Who knows, maybe a lot of the true, card-carrying, legitimate members of the OWS movement  may agree with Matt or at least his general sentiments, but then we are once again faced with the prospect of a supposedly leaderless organization being "lead" by someone outside the organization.
Or maybe we will essentially get a new OWS-Prime social-political "movement" that is the original movement (co-opted) wrapped in the protective ideological cloak of the co-opters, whatever that might really be.

Who will win an co-opting Occupy Wall Street

The real issue is not what's next for Occupy Wall Street or whether they will accomplish anything at all, but which socio-political faction will win at co-opting them. That would appear to the the far-left progressive liberal wing of the Democratic party, exemplified by the Big Three economists, Paul Krugman, Joseph Stiglitz, and Jeffrey Sachs, as well as Thomas Friedman, Elizabeth Warren, and others. Most of them are not political activists per se, but have clearly been cheerleading for the Occupy Wall Street movement.
The far-left progressive wing has so far failed to fully capture the agenda of the party and be a "real force" on the national political front. They excel at flitting in and out of the political scene, but also excel at avoiding any deep commitment to the party and even occasionally flirt with hinting at "a third party."
Elizabeth is running for Senate, so we'll have to see how she does and how she may try to further co-opt the OWS movement.
So far, the movement itself has expressed no political aspirations other than to insist that "we don't need politicians to build a better society."

Zuccotti, not Zucotti

Huh, I just noticed that I was incorrectly spelling Zuccotti as Zucotti (one "c.") Oops. My mistake. My vision or at least my visual acuity must be weakening.

Is Occupy Wall Street really occupying or just... whatever?

After "cleaning" Zucotti Park, the police barricaded the park and instituted controlled access with inspection of bags, as well as lots of private security patrols within the park, and very strict prohibitions against sleeping, and then eventually permitted protesters to re-enter the park, but does this really constitute "occupying" the park (and Wall Street) that Occupy Wall Street is now claiming? Doesn't seem so to me. As of when I write this, 7:55 AM, 11/16, the livestream for the park shows just a few people and mostly the private security guys.
Granted, the movement is certainly not "gone", at least yet, and maybe/probably they are regrouping (and awaiting instructions from The Mother Ship, the puppet masters up in Vancouver, BC, at, but in truth it is simply too soon to tell what the future holds for the movement.
For right now, at this moment, "occupation" is dead in NYC. But like and good zombie attack don't get complacent betting that they will necessarily "stay down", for long. Stay tuned.
I'm sure there will be plenty of follow-on "pop-up", flash mob protests, but will they merely be post-mortem involuntary twitches or something more?
As I close, I see that the "boring" scene on the livestream has been replaced with... reruns of the raid videos. Is that the future of the movement, reruns to relive the "glory days" of the movement?

Tuesday, November 15, 2011

The rich, professionals, the middle class, the working class, the poor, unemployed youth, and the rest

A lot of protesters, pundits, and progressive liberals are making a big stink about "The 1%" vs. "The 99%" or "The rich" and "The Rest of Us", but the simple truth is that we are a society of shades of gray rather than simple black and white. I see our socio-economic system broken down into "strata" of the rich, professionals, the middle class, the working class, the poor, unemployed youth, and "the rest."
At the top of the heap we do have the "super rich" who either don't work or if they do work it is despite the fact that they don't need to work to survive and thrive perfectly well without income from work.
Then we have the professionals, the elite workers who certainly take down hefty paychecks, but only because they work for it and have a significant investment in professional training. This includes executives, managers, doctors, lawyers, scientists, professors, accountants, engineers, elite sales people, etc. They commonly have a graduate degree of some sort, or at least a professionally-oriented undergraduate degree, although in rare cases exceptional individuals can do the "Horatio Alger" thing. Even today, we have college dropouts that created monster successes such as YouTube and FaceBook, not to mention Microsoft and Apple.
Then we have the Middle Class. Technically many of the professionals are part of the middle class as well, at least from the perspective of raw income level, but the bulk of the Middle Class are the workers who have an undergraduate college degree but not necessarily one that is strictly professional in nature. They may have only a liberal arts degree or a degree from a community college. They have jobs that have some degree of complexity and frequently require creative problem solving or significant people skills. They are typically, but not necessarily white collar, office workers. This would include many teachers, supervisors, lab technicians, sales people, etc. Some teachers may have the advanced degrees or experience to qualify for the professional class, but that less typical.
Then we have the Working Class. Although some may have college degrees, that would be atypical. More typical is a high school education, possibly some vocational training, possibly a degree from a community college. Their work tends to be more structured and well-defined and much lower in complexity or complex in a very narrow technical sense such as a mechanic or manufacturing worker. I would put most soldiers in the working class, although some (e.g., senior officers and pilots) qualify as professionals as well.
In recent decades we have had a significant blurring of middle class and working class, if not a virtual merger of the two, but I think that was a mistake (distinction in education level, task complexity, and people skills) and accounts for a lot of the anxiety over the "decimation of the middle class." In particular, a lot of non-degreed manufacturing workers (among others) were considered middle class when in truth they were simply at the high-end of the working class. Now, especially over the past decade, we have seen that trend reverse so that we are getting a much cleaner delineation between the middle and working classes.
Then we have the poor. They are "chronically unemployed", either never having a job or alternating between short spurts of temporary employment and longer periods of unemployment. Limited education is a factor, but social problems tend to be the underlying cause of their poverty. They may truly want jobs but simply aren't able to surmount their social problems. Their main "hope" for employment is to gain assistance and perseverance at dealing with those social problems.
We also have a relatively new category of unemployed youth. They have the education, the degrees, to possibly even start out as entry-level professionals, but due to economic weakness and high unemployment they simply aren't "needed." Technically, one could assign each of them to the unemployed of the other relevant categories as if they could find work, but they are special in some sense, namely that they never had a chance and it is not for a lack of education or hard work or trying.
Finally we have "the rest", people for whom employment is not an option, including those in prison or jails, those in mental institutions, the disabled, the mentally ill, etc.
This is my overall model of our socio-economic system. I think it provides a more enlightening and productive framework than the 1% vs. 99% "model" which seems more focused on class warfare than enlightenment and productivity.
I'll reserve a discussion of "inequality" for another post.

What next for Occupy Wall Street?

Now that they have been "evicted" from Zucotti Park, the Occupy Wall Street crowd are at a turning point and will have to decide what their new focus will be. I'm sure that they will not be "going away", but I doubt that they can succeed at "occupying" any other space in Manhattan. If they try occupying a public park in NYC they will quickly run afoul of the new "no smoking" ordinance, not to mention the camping prohibition. I'm sure they will have lots of "pop-up" protests in the coming weeks and months. My guess is that they will try to "shut down" street intersections or business locations on occasion. Social media will facilitate such "flash mobs", but also make it just as easy for the police to keep tabs on them. But New Yorkers are used to occasional disturbances and closures from street fairs and parades to conventions and fires and accidents, so it is hard to imagine what the protesters could do to "phase" New York. And they have the problem of finding something to do that will attract the sympathy and support of the vast majority of the general public without annoying them and turning them off in the process.
If the "occupy" movement reverts to simply a "protest" movement, I'm not sure what they will accomplish. Sure, they will exercise their rights to peaceable assembly and free speech and make their grievances know, but is that really all they want, a permanent protest movement?
So, the open question is whether the occupy movement is about to fizzle out or morph into something else that is not known at this time.
I did walk by and through the "camp" on Saturday and it seemed to have less people than the previous Saturday, although it was now dark (5:30 PM) due to the time change, so maybe there is a natural waxing and waning of the camp size as the day progresses. Still, I would say that OWS was NOT "growing" in NYC. I think it had peaked and people were starting to lose some of their passion and commitment (and tolerance for the weather.) Not the hard-core who stayed until the police dragged them away earlier this morning, but the "hangers-on" and "tourist" protesters/activists and other "supporters" whose commitment was tentative at best. Sympathetic, yes, but deeply committed, not so much.
To me, the critical issue was whether or not the movement was poised to attract participation from the vast majority of the general public, and it seemed to me that the answer was a fairly resounding "no." Sympathy, maybe, commitment, nope.
That said, we will have to see how the movement decides to remake themselves in the coming days, simply as a protest movement or something else, and whether that something else draws in the participation of the vast majority of the general public. That's the essential question, whether to remain a "niche annoyance" or to "go mainstream." Personally, I don't think they have any chance of succeeding at the latter, but know knows what they may turn themselves into.
Meanwhile, back at The Mother Ship in Vancouver, BC, "Culture Jammers HQ",, the puppet masters of the "Occupy" movement, have issued "Tactical Briefing #18" to provide guidance and inspiration to the "Occupy" movement, but that was issued before Zucotti Park was "cleared." It will be interesting to read what the movement's puppet masters come up with next. Their "tactical briefing" advises us:
We declare "victory" and throw a party... We dance like we've never danced before and invite the world to join us. Then we clean up, scale back and most of us go indoors while the die-hards hold the camps. We use the winter to brainstorm, network, build momentum so that we may emerge rejuvenated with fresh tactics, philosophies, and a myriad projects ready to rumble next Spring.

Sunday, November 13, 2011

Will the economists save Greece and Italy (and Europe)?

I was personally quite heartened to see seasoned economists put in charge of both Greece and Italy. Granted that is no guaranteed silver bullet solution, but at least it is a solid step in the right direction. Both countries, and Europe in general, still have lot of difficult decisions to make about their fiscal policies (and the EU's united monetary policy), but the willingness to give sane economic policies a shot is a very welcome development.
Sure, euro critics/skeptics will continue to remind us that they consider this a mere band-aid that will buy the EU a few months or maybe even just a few weeks or even days and that the euro is doomed, but that's what we should expect them to say, no matter what positive developments occur.
Now, whether the markets continue to respond positively as they did on Thursday remains an open question. It could easily go either way. Thursday's pop could already have discounted any amount of positive news, or maybe not. After the big decline on Wednesday, the partial recovery on Thursday may simply have been a classic "dead-cat bounce" and simply have been due to short-sellers locking in a profit ahead of a long weekend when anything can (and did) happen. Another risk is that a lot of professional speculators may still have a "sell into any rally" bias which weakens the market as it moves higher. That means that even if stock futures are higher, any initial pop at the open could be eroded as the day progresses. But if there is any true underlying bullish sentiment, the market could (maybe) move up through any superficial cynicism.
I don't mean to be cynical about the market outlook for the coming week, but simply to highlight the downside risks despite any superficial good news. There is still plenty of room for excessive volatility.
But getting back to the headline question, I do actually expect that the economists will save Greece and Italy, and Europe as well. Maybe not in a single week but over time.

Saturday, November 12, 2011

What are the largest banks in the U.S.?

Here's the most recent list of the Top 10 largest banks in the U.S., as of June 30, 2011, courtesy of the Federal Reserve:
  • 5. U.S. Bank (U S BK NA/U S BC, CINCINNATI, OH)
I'm note sure why FIA is separated from Bank of America, but I suspect it may be their credit card operations.
I am amused that Citigroup is listed as being in Las Vegas. Makes sense. Others may not be as amused as me.
And here is the list of the next ten to round out the Top 20 Largest banks in the U.S.:
I have no idea why Citibank SD is listed separately, but I suspect it may be their credit card operations. Ditto for Chase Bank.
TD Bank is actually a Canadian bank ("T" for Toronto, the "D" is for Dominion.) I have a local checking account with them. TD had bought CommerceBank which was based in New Jersey and with branches in New York where I opened an account.
Interesting that only two out of the Top 20 are based in New York and only one of the Top 10. And Wells Fargo is based in South Dakota. Yeah, right. These legal shenanigans are annoying.
It's also a real pain trying to get the exact name of a bank. In most cases they publically use a trade name rather than their actual legal name. And with so many subsidiaries and parent and holding companies it is quite a... shell game. Again, lots of legal shenanigans.
Most of my money is in two smaller banks, one in Texas, and one in Ohio. I also have a fair amount of money in, which is aactually held "on deposit" in Compass Bank or BBVA or BBVA Compass or BBVA Compass Bancshares ("BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group.", according to their web site) which is at #29 on the Federal Reserve list and based in Birmingham, AL. I hope they weren't holding too many of Jefferson County's bankrupt bonds. But, not to worry, as long as you have FDIC protection.

Why can't economists agree?

Isn't economics really just a lot of numbers and math? So, why can't economists agree on... just about anything? Ah, well, yes, maybe there is a lot of numbers and math, but there are also a lot of assumptions behind that math and a lot of interpretation of the numbers and the mathematical results and subjective values on those interpretations. In fact, it is all such a mess that economists refer to "schools of economic thought", which basic means groups of people who can't with other groups of people. The Wikipedia gives us this list of 27 schools of economic thought (and more!):
  1. Ancient economic thought
  2. Islamic economics
  3. Scholasticism
  4. Mercantilism
  5. Physiocrats
  6. Classical political economy
  7. American (National) School
  8. French liberal school
  9. German historical school
  10. English historical school
  11. French historical school
  12. Utopian economics
  13. Marxian economics
  14. State socialism
  15. Ricardian socialism
  16. Anarchist economics
  17. Distributism
  18. Institutional economics
  19. New institutional economics
  20. Neoclassical economics
  21. Lausanne school
  22. Austrian school
  23. Stockholm school
  24. Keynesian economics
  25. Chicago school
  26. Carnegie school
  27. Neo-Ricardianism
  28. Modern schools
  29. Current heterodox schools
  30. Other 20th century schools
  31. Viewpoints within mainstream economics
  32. Viewpoints outside economics
Even to get agreement between the prominent Chicago, Austrian, and Keynesian schools  would be difficult enough, but we have so many diverse views on so many of the factors that influence how the basic numbers and math of economics are interpreted. Even for seemingly simply issues such as the role of government in commerce.

Employer-Based Health Insurance Continues to Trend Down

I just noticed this Gallup report from yesterday entitled "Employer-Based Health Insurance Continues to Trend Down" which notes that only 44.5% of Americans get health insurance from their employer. Gallup says this number has steadily declined since they started tracking it in 2008 (at 49.8% back then.)
To me this is further evidence that we need to Repeal Obamacare – and replace it with universal health care (with no fine print!).
The uninsured rate held steady at 17.3%.
The U.S. Census Bureau says there are 312.6 million people in the U.S. now, so that is 54 million uninsured. BTW, I am uninsured, but that is my personal preference and I could afford health insurance if I wanted it or felt I needed it. I am essentially self-insured.

Repeal Obamacare... and replace it with universal health care

I'm going to go ahead and agree with conservative Republicans that Obamacare should be repealed. But, then I would replace the current system with "no fine print" universal health care. The intense struggle to get any kind of health care "reform" through Congress really just reaffirms what Michael Moore already knew years ago: the fundamental basis for our current health care system simply sucks and can't be "fixed" other than by going with a proven system that is known to work: universal health care. And I'd add my own twist: "No fine print", meaning no oddball exceptions and limitations or exclusions or anything that would require that anybody read or understand any fine print. All you need to do is simply show up at a clinic and ask for care.
How do we get there? Ohhhh... who knows. It will take some time and maybe we'll have to muddle through a few more iterations of "reform" of the current system before we get there, but the way I see things the writing is on the wall and universal health care is inevitable. If for no other reason than that eventually corporations will get tired of having to divert management attention and budgets to dealing with the proverbial endlessly rising health care costs. Ditto for federal, state, and local budgets. And military health care. And Medicare. An Medicaid. We simply have too much complexity and too much bureaucracy and too much paperwork today.
How to fund it? I propose that we simply have a national sales tax dedicated to health care.
Who would run it? I would have a national "standards" commission to set and monitor health care standards and then leave it to each state to run their own health care system according to those standards coupled with "local sensibilities." Budget based on state population, with some adjustment for the smallest states. Or maybe allow states to form regional health care consortiums. And maybe some of the larger states might want to have multiple regions and possible separate urban and non-urban areas to retain the principle of "local sensibilities."
Meanwhile, let's continue soldiering on with Obamacare for the indefinite future, tweaking it every year or two as we get more experience with it.

-- Jack Krupansky

Friday, November 11, 2011

Good grief, the Occupy movement now has a body count

TIME has the headline "2 Dead at Vt., Oakland Occupy Protests". I guess that means the movement has officially "arrived" as a legitimate social phenomenon. It's only a matter of time before web sites start using a "stats box" to give us an updated body count, with killings, shootings, assaults, sexual assaults, arrests, etc.
Up until a week or two ago the Occupy movement had a sense of innocence and purity to it. Now, its rapidly devolving into yet another power struggle, squabble, and thuggish bullying effort that merely mocks free speech.

What's endgame for Italy's sovereign debt crisis?

I don't think anyone definitively knows the exact formula for the endgame of Italy's sovereign debt crisis, but I do think "the writing on the wall" is for a bailout of some sort by the European Commission (EC.) How much comes from the European Central Bank (ECB) or the European Financial Stability Facility (EFSF) or individual European countries or the IMF or China or the UK or even the U.S., and what haircut debtholders will be asked to "voluntarily" accept remains to be seen, but the bottom line is that "the fix is in"; some sort of bailout will be arranged. It may not be pretty, it may not be what people really want, and it definitely won't satisfy the "euro critics", but it will happen. Why will it happen? What is the guarantee that it will happen? It's simply the way they do things in Europe. It's the whole point of the European Union. There is simply no compelling reason for Europe not to do it.
Is there a magical "window" when it has to happen and is that purported window "closing"? Not really. The Europeans will take their time and work things out at their own pace, regardless of what any "euro critics" think they have to say about the matter. The big benefit of stretching it out is that it helps to eliminate the "moral hazard" of bailouts. Sure, there is a moral hazard for bailouts, but if investors get the message that relief does not come quickly and without pain (e.g., the haircut), the moral hazard is minimized. Stretching out the process assures that everyone has had a full chance to be heard, that all options have been explored, and then as many people as possible are "on board" with the final approach. Yes, stretching the process out builds anxiety, but it also minimizes anxiety at the end.
So, yes, Italy, et al will continue to quite a drama in the coming weeks and even months, but the ultimate outcome (some sort of bailout) should not be a matter of dispute, even if the details must be haggled over.

Wednesday, November 09, 2011

Obama is still a shoe-in for re-election in 2012

Despite significant anxiety about the economy, I think Obama is still a shoe-in for re-election in 2012. I think most people recognize that a lot of what is going on in the economy is simply beyond the control of Obama, Congress, the Fed, Wall Street, Big Business, or anybody else and simply a bad thing that we all have to slog through, and of course that the bad economy is mostly something that Obama inherited. Most importantly, I think most people would prefer a Democrat with a bias towards a better social safety net in bad times. And, to his credit, Obama's team has had a strong pro-business bias even if their rhetoric at times speaks more loudly to his traditional not-so-pro-business liberal "base."
The Intrade Prediction Market is currently bidding a 50.1% chance of Obama's re-election, even as Gallop is reporting only 43% job approval.
My personal view is that Obama is taking a fairly stridently anti-business tone to appeal to his base right now, long before the election, to shore up that base, but come spring and early summer next year he will shift back to a very pro-business, pro-economic growth tone to appeal to moderate Americans, especially the center-right who he really needs to make in-roads with due to weakness in his base that he simply can't re-capture due to their profound sense of excessive expectations back in 2008.
Intrade currently indicates the Mitt Romney has a 67.2% chance of being the Republican nominee. He's probably the pick of the litter for Republicans, but I don't see that voters in the general election will see enough in him to dump Obama, provided that Obama "stays the course" and lets the economy incrementally improve over the next eleven months.
This election will be Obama's to lose.

Tuesday, November 08, 2011

Latest IAEA report on Iran really isn't as dramatic as the media suggests

I just finished reading the latest IAEA report on Iran and it is very clearly not as dramatic as various media reports and commentators have suggested. There really aren't any major "smoking guns" an Iran simply isn't "at the threshold" of having even a single nuclear weapon. Yes, Iran is continuing with uranium enrichment, yes Iran continues to drag their feet on answering IAEA questions and accessing all facilities, yes Iran had a number of nuclear weapon design activities going on through 2003, and yes there MAY have been some design and test-related activities in recent years, but the report simply does not detail and recent activity that would suggest that any Manhattan Project-scale of weapon activity is going on in Iran.
Mostly this was simply a current status report of the ongoing IAEA work and a little refinement of details along the timeline of the last decade (and even back to 1997 and even 1987), and a reiteration of the simple fact that the IAEA needs more cooperation from Iran.
A common theme in the report: "As a result of Iran's lack of cooperation on those issues, the Agency is unable to verify and report fully on these matters."
There is some indication of design work occurring in 2005, but nothing truly definitive.
About the strongest and clearest and specific thing the IAEA can say is:
The Agency has serious concerns regarding possible  military dimensions to Iran's nuclear programme. After assessing carefully and critically the extensive information available to it, the Agency finds the information to be, overall, credible. The information indicates that Iran has carried out activities relevant to the development of a nuclear explosive device. The information also indicates that prior to the end of 2003, these activities took place under a structured programme, and that some activities may still be ongoing.
They can't definitively tell us that the bulk of these activities ARE ongoing, just that "some activities may still be ongoing." Doesn't sound like a Manhattan Project to me.
We had more than that going into Iraq, and look how well that turned out in terms of validating the purported evidence.
So, let's keep the IAEA at it and maybe one day they will turn up a truly credible smoking gun.
But, most importantly, let's cease and desist with the incessant drumbeat for military action in Iran.