It's Not Nice to Tinker With Nature

This week, several states are in the process of tinkering with nature.  Well, of course, governments, heck we humans, are always tinkering with nature.  But at least two actions seem classic examples of not really thinking too much.

First, the State of Idaho, where elk hunting seems to be considered The Primary Right of Man, will ask the federal government permission to kill at least 80% of the wolves in the Lolo National Forest area.  Apparently this kill is estimated to be about 100 wolves.  Why?  Because big game hunters and guides believe that wolf predation is causing declines in elk herds.  

Second, the States of Oregon and Washington are about to kill Sea lions in the Columbia River who are believed to be the sole reason for declines in salmon spawning up the river.  Salmon, of course, are not only a trophy fishery, but also harvested commercially and by several Native American tribes along the Columbia River pursuant to their treaty rights.  

And we all know the outcomes of these wildlife management schemes.  Sooner or later the elk herds in the Lolo National Forest will destroy the vegetation because other than hunters, there are no other predators, and once the Sea lions are gone, the wildlife biologists will have to find another animal to blame for salmon declines because, God Forbid, we can't engage in discussions about the complex and complicated reasons for salmon declines which might require a whole set of politically delicate decisions about dams, agriculture, real estate development, off shore international fishing, Native treaty rights, sports fishing....

It appears the Sea lions will begin to be trapped very soon.  The wolf issue will require decisions from federal fish and wildlife administrators.  My guess is the feds will not allow the culling of the wolves.  

But it will be interesting in a year or two to see what we can blame next after we have tried to tinker with nature.

Paper or Plastic

Today's news is from Colorado, where the state legislature turned down a proposal to ban plastic bags.  This would have been the first state wide ban on plastic bags in the nation.

As I have written before, these kinds of either/or laws usually have unintended consequences.  In Seattle, there is a proposed fee for bags, adding what seemed, at the height of the economic boom, a minimal amount to a grocery bill, but if you don't bring your own bags and have to purchase ones from the store, could add to your overall grocery costs.  It's these kinds of bans that always make me wonder whether policy makers think only of how they live versus how many of their constituents live.  

For instance, many environmentally aware people try to limit their shopping trips.  Once at the store, they may buy for a whole week, half a month, or even a month.  Let's assume they buy once a week, requiring four bags.  And let's assume the policy maker goes to the store every  night on their way home from the office, plus, maybe once on the weekend.  They may use 6 bags.  But they also use fuel, wear and tear on their transportation vehicle, additional energy to produce those bags...you get the drift.  

I think we should really focus our efforts on education rather than the bag issue.  First, the production of bags provide jobs, most often union wage, health care provided jobs.  Why risk that?  Second, many health experts will tell us that limiting trips to the grocery usually leads to healthier purchases and hence, better eating habits.  How about instead of creating whole new bureaucracies that monitor and enforce bans or collect revenues from fees, we try some education on using cloth bags (which, of course, many are made with cotton, not exactly the most environmentally friendly material, or are made in China which think about the carbon footprint of getting those over to America) or recycling paper bags?  Public service announcements on shopping lists, limiting trips, and recycling.  Instead of charging a fee for bags how about following the examples of Whole Foods who gives a credit if you bring your own bag?

It's time for new thinking, not instinctually reaching for "no" or bans that create consequences down the road which we knew would happen.

Where's Your Lobbyist?

Recently I read a short article about transit planning in Seattle.  The commentator said that he was at a meeting where the Seattle Department of Transportation (SDOT) was unveiling yet another "street diet" where the city removes one lane of traffic from use by automobiles and devotes it to bicycles.  This "street diet" thing has been going on for several years and on several major arterials.  Trust me, it bogs up traffic enormously.  But, here is the point: when the commentator asked the SDOT representative about who speaks against the "street diets," the SDOT employee said: "I speak with a lobbyist from Cascade Bicycle Club everyday.  Where is your lobbyist?"

Holy Cow Batman!  You mean we all need lobbyists to speak to government?  Much less to be listened?  The irony of that encounter is that it happened at an open house where SDOT was supposedly listening to input on the street diet.  But we all know that so-called public meetings are really a way of "letting the public let off steam" even though the decision is already made.

Today, the Obama Administration announced that it will begin describing it's ideas for regulatory reform of the financial sector.  Of course, this means everything, I assume, from how different countries interact financially to how we monitor individual financial transactions in this country.  And, I wonder, who will be speaking to the Pooh-bahs of decision making on these financial reforms?  Certainly not the average American who was foreclosed out of their house or the retired couple struggling to stay afloat when their so-called safe investments went south this month.

Indeed, the financial sector lobbyists in Washington, DC alone ensure that politicians and their staffs are well feted and their campaigns stuffed with cash.  The average person doesn't stand a chance, much less the non-profits based in DC who purportedly advocate for the "little guy."

In all of the economic restructuring that is occurring, I believe the examination and proposals to monitor and regulate the financial industry, although late in being thrust into the policy spheres, is critical.  Each of us should pay attention.  Find allies or organizations to represent you views.  Call your Congressman or Senator.  Because how the financial sector is restructured will really be the crux of our economic security in the decades to come.  We can no longer rely on the Lords of Wall Street to do what is right but on the other hand we can not stifle our ingenuity.  Just know, however, that the banks, investment houses, mortgage lenders, credit card companies, real estate industry, are swarming Capital Hill, they're calling presidential staff members, having drinks with friends of Barack Obama, writing checks for campaigns.  

We need to pay attention or else things we care about will be "street dieted" because we couldn't talk to anyone every day.

Mortgage Interest Deductions

In today's on-line version of the New York Times came an interesting proposal.  Eliminate the deduction of mortgage interest on your taxes.  Of course, in the political world, that is like talking about changing Social Security, the mortgage interest deduction is the sacred cow of tax planning.

But I suggest you read it.  I recall during the real estate financing boom I would receive direct mail pieces from, oh, let's see Countrywide, Citibank, Wells Fargo, Bank of America, among many others, who trolled the public records, saw the mortgage on the house, saw it wasn't re-financed.  They tried to lure me with suggestions that I re-finance to "reduce" my credit card interest rate and oh by golly, the interest on mortgages was deductible!  

Almost every other country does not allow home mortgage deductions from income taxes.  Yet, home ownership rates in countries like Canada and many in Europe, are as high as the United States.

While I do not think an income tax deduction is the sole reason people by houses, I also believe proposals like this, re-examining the sacred cows, are good for us.  Whether it all pencils out is another matter.  It is challenging the paradigm, as a friend would say.  And in these times, we need to be doing just that.

Can Green Technology Save Us?

Now that the economic stimulus bill has been signed into law, it's time to examine some of the assumptions contained within the legislation and campaign rhetoric about green technologies (which the development of those technologies is a key element in the jobs creation).

It goes without saying that green technologies are not particularly environmentally friendly, in other words, often the most "green" thing you can do is if your appliance, car, house, or whatever is working, don't replace it.  Replacing with "green" items is as bad or worse than doing nothing.  

However, now the emphasis is on clean energy.  While commentators from other regions of the country drool over clean power, the Pacific Northwest, semi-abundant with large and powerful rivers, knows full well the impacts of hydroelectric power, considered clean by so-called energy gurus (as in it sure beats coal).  As with everything, there are pluses and minuses to hydroelectric power, just as there are with coal, nuclear, wind, and harnessing the tides or waves.  In my opinion it will take a mix of all potential power sources, not relying on one or two, to create a relatively green source of power.

Hydro power not only increases the temperatures of the rivers, but it also creates an impassible barricade to anadromous fish such as salmon and steelhead.  And these barriers are extremely difficult to "fix" in order to assist salmon in their return to spawning grounds.  In the Pacific Northwest we have fish hatched, barged, trucked, fish laddered, and airlifted salmon up and down the Columbia and it's tributaries, and still find ourselves listing salmon spawns on the federal Endangered Species lists.  Not only is the spawn an issue, but once you create an impassible barricade, predators become an impediment to the fish, such that the predators such as Sea lions or Caspian terns become prey of humans trying to prevent lower numbers of salmon spawn and yes, the cycle continues.

Then, there are the issues of displacement that we witnessed with China's massive construction of the Three Gorges Dam or the potential irrevocable damage to First Peoples with the proposed Hydro-Quebec's dams on James Bay.  

And, of course, when any technology is seen as a panacea for perceived problems, we overlook or neglect the problems with the technology itself.  For instance, the actual mileage per charge for electric cars is almost 50% less than originally touted.  Plus, there are the issues of battery disposal, much less the amount of electrical energy the cars require.

Ah, then there is the issue of increasing our power capacities.  If we're going to be finding and developing "green" power, the major problem is apparently the current power grids in this country can not handle new sources of power (wind, solar, geothermal) and are vastly  over capacity as it is.  Recently, Senator Harry Reid from Nevada, the current leader of the majority in the Senate, introduced a bill to have the federal government essentially take control of siting of the the high voltage power lines.  In other words, removing all the regulatory red-tape from 231 different state agencies across the country, so that the feds can determine where to put power lines.  Which on it's face seems like a good idea, except who really wants a high tension power line running through a national forest (the bill asks that federal lands be opened up for these kinds of lines) or even, gasp, in your back yard?

Today, I had an appliance repair man come over to fix my oven.  I have this old stove, my guess is it's at least 25 or 30 years old.  The bottom heating element died on the oven.  It cost about $175 to fix.  I've thought for years about replacing it, getting a swanky stainless stove (in fact, I had a free one that was gas a few years ago, but that is a whole other story about my city's bureaucratic nightmare on digging a hole to access the gas main).  But the repair man said to me: "listen, this is the best stove GE every made.  It will last you a long time.  Hold onto it. "  And so I will.  And to me, that is the greenest thing I can do.

As an aside, he also told me that appliances are being made, now, that will generate an error code which will be transmitted to the manufacturer's service division, who will then email or call you to set up a time to repair...he said, that will put him out of business.

As we look to these new and amazing technologies we need to remember we are beginning to emerge from a decade, if not longer, of jumping feet first without looking, thinking, pausing.  It's time for us to  pause, to pencil out all the ramifications of our love affair with more and more technological solutions to our environmental problems.  If the noodling says these technology is worth it, given all the consequences, then let's go for it.  If not, there will be other answers over time.  Remember, the root of conservation is conserve, to be conservative.  Sometimes that is a good thing!

Laying Blame At The Wrong Place

In today's Wall Street Journal  former US Senator from Texas, Phil Gramm, opined on the economy.  Now, this is the same Phil Gramm who said this summer that we had become a nation of whiners.  And this is the same Phil Gramm whose wife was on the board of directors of Enron during the whole period of criminal activity led by Jeff Skilling and Ken Lay.  So, keeping that in mind, Mr. Gramm talked about what he perceives to be the two causes of the economic meltdown (another note, here, Mr. Gramm is an economist by training).

The first cause, he asserted, was monetary policy related to moving inventory which had stockpiled due to the September 11th recession.  By lowering interest rates as an incentive for businesses to borrow and acquire computers, machines, materials, the Federal Reserve also, in Gramm's opinion, threw fire on an already stable housing market, thus causing a sustainable market to become a boom.

But it's the second cause that I dispute.  Gramm has always been an opponent of the Community Reinvestment Act (CRA) which was originally signed into law by President Jimmy Carter as a result of glaringly obvious discriminatory lending practices by FDIC insured banks.  These discriminatory lending practices were known as redlining.  Essentially banks looked at maps, determined where the "poor sections" were and rarely if ever made a loan in those neighborhoods.  A redline was drawn around the area.

Now, the CRA was more of a feel good law than anything with regulatory teeth.  It simply "asked" banks to look at their loans and attempt to make investments in areas that they had previously redlined, as long as the investments were made with sound lending practices.  

It was not until 1989, under a Republican president, that some teeth was added to the law, which allowed community groups and researchers to access the lending information and perform more rigorous quantitative analysis on a bank's lending strategies.  But really, the whole idea of the CRA was more carrot than stick.  If a bank wanted to merge or to open more branches, the CRA was a vehicle for community groups to protest the expansion if the institution was not making investments in previously redlined communities.  However, not one bank merger or expansion was held up because of CRA complaints.

President Clinton further sought to open up the information on CRA based lending but did not promote any further regulatory bite.  In 1999, Mr. Gramm lead the charge to repeal the Depression era banking laws, commonly known as Glass-Steagall, and forced President Clinton to back off his ideas of strengthening the CRA by giving the FDIC and Office of Thrift Supervision more power to examine banks CRA compliance.  

In fact, in 2005, the Bush Administration did loosen the CRA requirements, allowing banks to include the acquisition of mortgage backed securities as a means of compliance.  In other words, banks looked at the zip codes of loans within the pool of mortgages and essentially said: "hey, there are some loans within a poor neighborhood, we're all good here!"  They were also allowed to include all of their services as part of the CRA "investments," so if a bank sold an annuity or a CD to someone within a suspect neighborhood zip code, it met the CRA "obligations."

Now folks like Mr. Gramm are maintaining the the CRA is responsible for sub-prime loans.

In fact, over 50% of all sub-prime loans made in the past 9 years, particularly those which are causing so much trouble, were made by non-federally regulated institutions.  Institutions not under the umbrella of CRA.  Another 25% to 30% came from banks, like Countrywide Bank (part of the infamous Countrywide "family") which are only partially obligated to follow the CRA.  

On the other hand, banks that did follow the traditional CRA requirements have significantly lower default rates.  They followed "sound business and lending practices."  They educated their borrowers on issues of credit, borrowing, and homeownership, instead of seeking the fast buck and selling the mortgage way down the road.

To blame a toothless law, intended to guide banks toward viewing the whole communities in which they lend, is gutless.  It reeks of sound bite moments that we witnessed during debates over welfare or other issues, when it became fashionable among some politicians to blame the poor because they didn't have expensive lobbyists in Washington, DC.  

In fact, if the numbers are accurate, it seems to me that strictly following the CRA may have saved some lenders from the crisis larger banks are now experiencing.  And those borrowers who were the beneficiaries of true CRA lending are also smiling as they sit at their kitchen tables in their homes.

But Is It Enough?

Yesterday, President Barack Obama finally introduced his plan to help homeowners who are on the verge or in the throws of foreclosure.  In Washington State, as in numerous states across the nation, foreclosures are usually done without any intervention from the court.  Rather, notices of foreclosure are sent to the homeowner by the lender (or usually, through some foreclosure specialist who does this for a living) and the clock starts ticking.  In Washington, a homeowner has 180 days from the notice of foreclosure to come up with the delinquent payments plus accrued late fees, attorney fees (even though no attorney for the bank is involved), assessments for mailing, publishing costs...you get the drift.  And because these foreclosures are done without any judicial review, there are chances that a lot of foreclosures happen to folks who may not be in default, or who are close to coming up with the delinquencies but can't find a voice at the end of the phone at the lender to talk to.  And from this time last year when policy-makers started talking about the foreclosure crisis to yesterday, you can only imagine that there have been a lot of foreclosures.  A lot of families put into the streets.  A lot of stress, pain, and suffering.

Meanwhile, the least discussed part of the Obama plan is the stick he will ask Congress to impose if lenders do not cooperate in stemming some of the tide of foreclosures.  Currently in US bankruptcy law if you are in default of your mortgage and you file for bankruptcy, the only thing the bankruptcy court can do for you is to suggest you find the money to become current.  A bankruptcy judge can not "force" a lender to modify the loan.  However, this was not always the case, but the banking lobbyists got to Congress and the so-called cram down provisions were taken out of the bankruptcy code (a note here, if you're a corporation a bankruptcy court can "force" lenders to adjust terms of loans...gee, are we surprised?  And ironically, cram-down provisions are still legal for second homes and vacation properties...hmmm, who owns those I wonder?).  

Today, in the financial press, such as the Wall Street Journal, there is a lot of gnashing of teeth over the possible re-institution of the cram-downs.  And I ask again, what world are these financial institutions living in?  If these geniuses get what they want, they may end up owning every house in places like Nevada!

But here is the thing that caught my attention in listening to President Obama.  Several times in his speech he said that this plan would help "people who followed the rules."  The first time I noticed this kind of language was during the Clinton Administration.  The language is code for: "we're not going to help people who are poor, on welfare, or are not breaking their backs to make minimum wage."  For instance, the Obama foreclosure plan is specifically excluding people who "bought more house than they could afford."  Apparently, they did not follow the rules.  Or the plan is not designed to help people whose mortgage debt exceeds 105% of the current market value.  I guess those folks didn't follow the rules either.

Here's what I want to know:  First, who wrote these so-called rules?  Second, since when do politicians, who haven't followed very many rules themselves, get to dictate what rules are followed in a crisis like this?  Third, is it then true that the mortgage brokers who made gazillions of dollars and realtors who are driving around in their big honking Mercedes bought with their fat commissions after luring, purring, and assuring people that indeed they could afford this house, did they follow the rules?

My suggestion to politicians?  Lose the line about Americans who follow the rules.  We all know what you're trying to do, to assuage the few people left in America who may get upset that their tax dollars are being used for any bail out whatsoever.  But really, they will never be happy so why bother trying to assure them "only the rule followers" will be helped.

Frankly, if I were President, I would attempt to call a halt to foreclosures right now.  Suspend every single one of them.  1 in 10 homes in America are in some financial stress, whether it is worth less than the mortgage, in default, struggling to make payments, whatever.  That is a lot of folks.  Call a time out.  Ask Treasury to take 180 days to compile data on exactly what the problems are, where, who are the people, and what can we do to keep the greatest number of families in their homes.  Maybe we do mass cram-downs.  Wipe the slates clean of the consumer debt, cleaning up bank balance sheets as well, adjust the mortgages to where the greatest number of people stay put.  Backload the debt for a future sale.  Eliminate the due on sale clauses in Deeds of Trust so a borrower can sell the house without the buyer having to find a new loan.  There are tons of things we can be doing now to increase the numbers of people not losing their homes.

And oh, the next time, you know, in the next boom-bust cycle?  Let's make sure everyone knows what the rules are and follows them, so we're not segregating out people who simply got suckered.  Or we're not also bailing out the lenders, automotive manufacturers and whoever else has great lobbyists, who by the way, have never played by the rules.

Our Homes

Recently, the Pew Research Center finished a poll on American's attitudes toward their homes.  By this, I mean (and maybe so did Pew) the places American's want to consider home, not just the walls, but the location or ideal, as in near mountains, on a river...

During the past number of years, urban planners as well as hip transit engineers, have dreamed of a new American order, one where sprawl would be eliminated, people would move to cities, urban areas, and live in dense, transit oriented developments.  Now, with the real estate crash, these same urban planners believe the idea of a single family house is dead, and are piling dirt on the suburbs as well.  In fact, many of them have articulated the belief that the real estate crash is exhibit A that the single family home was "unsustainable."  They believe high density housing, clustered around urban amenities is the panacea to everything that irks them.

You can see the effects of this urban planning dream in small townhouse condominiums that sprouted like weeds in cities throughout the West (they are, in my aesthetic opinion, ridiculously designed and probably a developer's dream because they can be replicated over and over without any additional design costs to the developer).  These urban planners believe the single family house with a yard is wasted space, encouraging the suburbanization of America.  They tend to think folks who disagree with them are old guard, out of the mainstream, and not particularly environmental.

But the Pew Research shows that most Americans still want to live in a house with a yard, a fence, and in urban areas that have natural amenities (think Seattle, Portland, Denver).  In fact, one op-ed writer opined that American's want to live in those cities and have a garage filled with outdoor equipment (welcome to my world)!  

Increasingly, I think there is a polarization that is occurring in our society that may lead to as intense battles as the so-called blue/red polarities we currently witness.  This divide is over age and, for lack of a better word, entitlement.  The young, hip, urban planner types remind me of the young, hip, Wall Street types, or the young, hip, dot.com types of the late 1990s.  They know a lot.  And are not afraid to let you know they know a lot.  But they also feel they are entitled to being right.  A recent study on expectations of college grades demonstrates my point.

And so, these young urban planners are confident. They know that all the theories they studied, all the GIS maps they've done, all the European cities they have evaluated, are right.  Density is the trick.

But homogeneity is so un-American.  We don't want to look all the same.  We don't live all the same.  Many of us have kids who play sports, all over the city.  Some of us work from home and use our cars during the day to check on elderly parents.  Seniors like getting out and about, maybe even driving to the store or a mall just to look, to be around people.  Not everyone commutes to a downtown glass office building.  Those who want to live near natural amenities want to get out in them.  Not all of us want to live in cookie-cutter close in townhouses.  I think if we wanted to be Europe we'd have designed our communities based on those models decades ago.

I think about my friend who lives less than a mile from her office.  I have known her for over 30 years, and not once has she walked, biked, or even ridden the bus to work.  But she votes for every tax that will go to mass transit.  She's emphatic that we should have it.  But she has never used it to get from her single family detached house with a yard home to work.  She drives to work because she likes to meet with friends who don't work where she does for lunch, or see them for dinner.  Her car has given her a way to maintain a vibrant and vital life with her community.

While I appreciate what the young urban planners are trying to do, and applaud their ability to reach the ears of many politicians who sit through the transit oriented development seminars at their retreats held in swanky hotels far away from urban centers, I also think the young urban planners need to realize they are not the only ones living in urban centers.  Diversity is what makes us vital.  The Pew Research shows that just as much as we are hip and like Starbucks, the same survey on housing also showed that more Americans like McDonalds.  Now, perhaps the urban planners want to encourage more fast food chains near their transit oriented development?

What Are They Thinking?

In today's news, President Barack Obama is going to offer carrots to mortgage lenders in order to encourage them to reduce monthly payments of borrowers.  And of course, anything the federal government can do to help struggling home owners, owners who are either in default or on the verge of defaulting, is a good thing.  At least 6% of American home owners are either in foreclosure or on the verge.  That figure, of course, does not take into account the thousands who are struggling, who are not paying other bills in order to pay the mortgage, of the hundreds of thousands who have already mailed their house keys to lenders, or simply walked away.

But what really bothers me are two things.  First, lenders who are reluctant, no, objecting to helping any borrowers.  And second, the ya-hoos who say things like President Obama is running a risk of angering homeowners who are not in default and "bitterly" resent the government bailing out those who may have made bad decisions.  

First, the lenders.  It goes without saying that while there may be banks who are not taking any government money every single bank right now is benefiting from those who are seeking help from the Troubled Asset Relief Program (TARP).  On the idea that if one bank falters, especially one like Washington Mutual or Citibank or Bank of America, all the other banks suffer, then every bank should be responsive to direction from the government.  We, the taxpayers, are helping them survive in this economic climate.  So the lenders who say they can not do anything to help the borrowers and don't have an obligation to do so are really saying, what, they think holding on to empty real estate or selling it for a loss is a good thing because it proves you're man enough to foreclose?  And to the investors in the banks, or the ones who bought the collatoralized securities and are now apparently suing banks saying they have no right to suspend foreclosures (the banks, therefore, acting as mortgage servicers rather than owning the promissory note) I ask the same question: why would you want to hold onto vacant real estate.  It makes no sense given that the majority of foreclosures are happening in particular regions such as Southern California suburbs, Florida, Nevada.  Hello!  Lenders you foreclose and you end up with what?

Second, this whole argument about moral hazard is a straw man.  The idea comes from economic theory that if you have insurance you are less likely to guard against risk (as an aside, it seems the banks and other Lords of Wall Street sure knew a lot about moral hazard as they sliced and diced the mortgages to sell as securities in order to get them off their books).  In this context, of helping home owners reduce their mortgage payments, the moral hazard proponents seem to be arguing (using the term moral hazard as shorthand) that if the government helps homeowners now, a seed, a very bad horrible seed will be planted in American's minds that if they get into financial trouble, the government will always bail them out.

Done laughing yet?  

Seems to me that if you're robbed by a financial fraud, which evidence indicates many of the loans were done through dubious lending practices, you merit, in our society, help.  Let's not call this homeowners bail out, let's call it victim's assistance.  Victims of economic terror.  Victims of theft.  Victims of greed.

These bright bankers also think opposing re-instituting cram down provisions in bankruptcy laws is also a good idea.  Good Lord, banks lived with those provisions for decades before they finally contributed enough money to Democrats and Republicans in Congress to get them repealed.  Bankruptcy judges are not unreasonable wild-eyed populists who are going to make revisions to mortgages that will cause dire consequences to banks.  In fact, I would guess most cram-downs worked in the banks benefit before it was repealed.  Can our legislators please stop being afraid of bankers and their lobbyists?  They failed.  Repeat after me, they failed.  But for some reason (hmmm, do we need to check those campaign contributions, again?) Congress drags it's feet on re-instituting laws we all lived with for decades.  

If any of the Lords of Wall Street doubt that we are in an economic depression, look at the markets today, almost at the lowest point in a decade.  Look at how their own investors respond when they believe the Obama Administration is not doing enough to, oh, what is the word, bail out the banks.  It's time to look at helping the victims of this debacle, to make sure American's stay in their homes, that their kids stay in their schools, that their families share memories with their neighbors, that the local green grocery stocks the foods that family enjoys.  It's going to be a tiny amount of help in comparison to the monies banks are getting under TARP.

And hello, bankers?  Start thinking again, ok?

Rural Economies

The State of Washington has maintained it "trust" lands that were deeded to them by the federal government when it became a state.  These trust lands are required by federal law to maximize income for education, and thus, the trees are managed under a sustained yield model and sold for timber to the highest bidders.  Funds are then used for local schools and state universities and colleges.

However, with the economic meltdown, projections of income from these state trust lands has greatly diminished.  The state trust lands, which are distinct from other state own forest lands and federal forests, provided some of the last places where small timber companies and family owned logging operations could find, log, and mill wood.  Unfortunately, these small operations will probably not last during this recession.

What concerns me are the attitudes from primarily urban based environmental folks who see this decline and probably demise of small logging and milling operations as a good thing.  I could go on a rant about this, but only want to suggest that if we want to think about buying local as a good thing, then we ought to remember that includes wood products.  

As we begin to unravel what is in the economic stimulus package, I hope we begin to realize all boats are rising and falling on the same tide.  Rural, suburban, urban.  No one is better, all of us can be worse.

Evolving Toward Acceptance

Along with every other scientist and romantic (who wouldn't find it romantic to sail in the South Pacific for five years studying nature?), I want to talk about Charles Darwin on the bi-centennial of his birth.

The Origin of Species over time has become a seminal work, but really to biologists, it is the progression of observed science along with work done by Carolus Linneaus among others.  For me the value of Darwin's work is the amazing beauty of a curious mind.  

While the theories of evolution have become, in the United States, a polarizing debate between those who believe that life was created from God and those who resent "believers" from not recognizing science, I would like to add a voice toward the idea that both the idea of creation and evolution theories can happily co-exist.  Here is a man, a naturalist, who wondered why, among many things, the beaks of finches in one area were slightly different than the beaks of finches in another place.  And from that curious mind, those astute observations, came a celebration, in my opinion, of the miracle of life, not a repudiation of God.

So today, on this amazing bi-centennial of genius, let's also be grateful that God gave us such a brilliant man, Charles Darwin.

Unable to Move

An interesting article in USA Today caught my eye as another consequence of the economic melt down (aka recession).  Because of the economy, and especially due to the real estate markets, Americans are unable to move to take another job.  One of the things that apparently that has been a strength of the American economy has been our mobility.  Unlike Europe, where people are reluctant to leave the towns and cities where they were born, Americans are willing to pack the kids in the car and head to other places for jobs.  

But given the inability for many to sell their homes for the amount they owe much less the costs of moving, this mobility seems to be another factor in daily deluge of bad economic news.  

Combine this news with the data that is indicating rural communities are being severely hit with the recession and we may be staring at a reverse of The Grapes of Wrath where instead of migrating to orchards, vineyards, and other farms in California, if there is any migration at all, it will be to the cities.  Of course, this has been a trend for the past several decades, but it leads me back to a point I made recently.  For all the discussions about bailing out Wall Street, the banks, and providing broadband service to rural communities, we need to think about maintaining, restoring, and creating jobs that actually make something.  This will mean we need to use some of our natural resources, we'll need to provide energy to factories, and we'll need to energize downtrodden communities.  

But we are not going to get ourselves out of this economic debacle by trying to revitalize the same economy we had until last year, and we certainly can not afford to import products from countries that do not maintain similar environmental or labor values that we do here.  It may mean we pay more for our products, but let's begin to make high quality furniture, televisions, automobiles, computers.  Then let's sell them to people overseas who want quality in design and function.  

Then, maybe then, moving doesn't become such a necessity.  Maybe we have communities where there are good jobs, a quality environment, and chances for movement within the economic strata.  Where the idea of mobility is about where we go for vacations not having to move to find another job.

Smart Grids and Big Brothers

Today, in the New York Times was a small article that Google is getting involved in metering power.  All the rage among energy conservation folks is the idea of "smart grids."  Quite simplistically, a smart grid is one that is centrally controlled and in a sense pulses energy when needed.  For instance, it would increase energy over, say, high power tension wires, when all the lights are on in Las Vegas (wait, bad example, those lights are on day or night), ok, when the lights are on in Portland, Oregon.  But the smart grid would reduce power when the lights are off.  

A smart grid is also on a micro level.  Apparently, appliance manufacturers have been installing chips in the gorgeous stainless steel dishwasher you bought two years ago that sends a signal to your utility when you're washing the dishes.  How the smart grid would work is the utility would control when your dishwasher was running, not you.  So, essentially, all the power sucking dishwashers would not be running at the same time in a certain grid sector.  

First, there is a little bit of irony in Google's entry into this large scale power conservation.  Of course, they see a way to monetize the monitoring of power usage, your electrical meter perhaps being connected to the Internet...anyway, here is a company whose products are all web based, thus requiring enormous use of power in their servers.  Google, along with Microsoft and Yahoo are scouring the Pacific Northwest (think cheap federally subsidized power) for real estate near dams along the Columbia River to locate their huge server farms.  So, perhaps the deal is that if we all conserve energy there will be more for the server farms?

Ok, that said, here is my other concern: there is a chip in my appliances?  Now, I haven't bought a new appliance in years (imagine my surprise when I finally bought a refrigerator and a light went on as I opened the door!) so no one in the world knows when I run my dishwasher.  But for an old-school girl like me, the idea that there are chips installed in appliances that could communicate with my utility company is more than disconcerting.  Imagine the kinds of mischief law enforcement can get into once it gets its hands on the data, among other concerns.

However, having said that, our "new new economy" will rely on power generated by hydroelectricity, coal, and indeed, nuclear power (yes, everyone take a big gulp,but the reality is there are only so many rivers in North America that we can ruin by constructing dams).  The big surge to produce electric cars, which use enormous amounts of electricity as well as the server farms (for all those devotees of cloud computing), will require some trafficking of the power grids that we have now and will construct over the next few years (watch for many many lawsuits over the eminent domain of large swathes of land for transmission corridors).  Perhaps allowing utilities to make choices when to surge and conserve power is in the long run, wise.

Nonetheless, I do believe we need to have a discussion about those chips inside our dishwashers.  They seem like an uninvited guest to the dinner party.

Batter Up

And are we surprised about today's news?  That million-dollar man, Alex Rodriguez was outed by Sports Illustrated for taking steriods (or, performance enhancing drugs) and so, in a long line of the rich, famous, and powerful, he stood in front of microphones and apologized.

Am I the only one out here who is getting a little bored with all the folks apologizing?  And am I the only one beginning to think the public relations gurus that each of these guys hire to shake out magic dust and make the headache go away need to be thinking of a new script?  Honestly, each apology, whether it's for unpaid taxes, beating a woman, or taking drugs, is beginning to sound the same to me.  Contrived not contrite.  Forced not felt.  Made in order to get the next job, the next paycheck, the next endorsement, not made because they really believed deceiving the public is a bad thing.

Baseball is a game of inches.  The few extra feet beyond the center fielder is a triple, the stretch into the infield creates a double play.  If your body is feeling better, is bigger, has a bit more power than the other guy, well, you can win in the game of inches.  The names are a roll call of the highest paid, sometimes the best players of the past decade: Roger Clemens, Jason Giambi, Alex Rodriguez, Mark McGwire, Sammy Sosa, Andy Pettite, Barry Bonds.  Which, of course, leads to the lesser knowns, trying to gain an inch on the giants.

I think it is time we tell the apologists not even to bother until they really mean it.  Demonstrate some accountability.  Don't apologize just because some highly paid flake told you that is how everyone does it.

In the interim, I may walk up the street to watch Little League games this spring.  They will at least feel a bit more real and authentic.

The Importance of Critical Thinking

Years ago I read a book where the description of the marriage struck me.  The wife said something to the effect that she felt her husband made her try to be better every single day.  Yesterday I lunched with a very close friend.  The conversation meandered, as it usually does, but landed on the economy for quite awhile.  I said something about how our economy has been on a melt down for well over two decades, and my friend reacted almost violently.  To her, it was all President George Bush's fault.  And I have to say, my friend is a very very smart person.  She even knows what praxis means without having to look it up every time (like I do!).

Here is the thing.  If we don't try to make our leaders better every day, we have failed democracy.  And we can not, especially now, just think every thing is hunky dory because we have a new President in office.  We need to examine every thing he proposes, yell and scream if we don't think it's good, celebrate if we think it is fabulous.  But to believe that one side is bad and the other is good is, well, naive.

Critical thinking is what is required of us in this democracy.  By simply aligning ourselves with one side or the other, we fail.  And in fact, I think the lack of critical thinking by all sides is one of the reasons we are standing knee deep in quicksand now.

Frankly, I consider myself one of the "team of rivals" for Obama.  Challenge, nudge, scream, yell, demand better.  For too long we neglected our country.  We let people inside the Washington, DC bubble run amok.  Everyone inside that bubble.  It took both parties to tango on these issues, truly.  Wall Street and US corporations didn't care what high powered politicians believed on abortion or saving the Northern spotted owl (trust me, large timber companies wanted the endangered species listing, it put small competing mills out of business, but that is for another day).  But what Wall Street did care about was buying those same politicians, whether liberal or conservative, to look the other way and vote to remove legislative obstacle after obstacle so there  was no oversight on what the geniuses did.  Both parties looked the other way and were richly rewarded.

So, it's become our jobs to be the oversight, to make sure our interests are protected.  And that requires critical thinking.  It's patriotic.

More Thoughts on Compensation

First, here is a link to a video of President Obama discussing the salary caps he ordered on firms (banks and auto industry so far) that receive bail-out money from the federal government.

But I have some more thoughts about this issue.  As I type this, lobbyists for every single business group (oops, I almost said industry group, but we really don't have much industry in this country, so...) are walking the halls of state legislatures and Congress, seeking more and more tax credits or breaks.  Their usual song is if we don't get more tax credits or breaks, we'll up and leave for another country.  Business lobbyists are whispering in the ears of city council members, mayors, and county executives, asking for incentives, heck, even cash, to keep their businesses from moving to another location which will be willing to offer them land, money, and God knows what else.  I would guess that nine times out of ten, these businesses will get what they are asking for.  Meanwhile, the rest of us, you know, the ones that don't have a lobbyist working the halls, whispering in ears, we get tax hikes to pay for the tax credits the businesses get.  And I am not talking about small businesses, I am talking about Boeing, Microsoft, Google, IBM...

Meanwhile the executives of those companies continue to pull in millions of dollars in compensation.  

So I would ask, aren't the tax credits and incentives that we give those companies similar to the cash the federal government is giving banks and the auto industry?  Shouldn't state governments, heck, even Congress, begin demanding that if the corporations want special favors then they have to give something back other than staying in some state for a few years then bailing anyway?  And, oh, does anyone every evaluate whether they are successful?  Millions in tax credits to Boeing and they are laying off, not retaining employees in Washington State.

Nope, I think it is time that we examine the whole cocoon that has woven around American corporations.  It's a myth that there is a free market.  Each and every company has become a, to use the crass term from the Reagan era, welfare queens, driving in their limos to the welfare office, which happens to be the legislative bodies, and asking for hand outs without having to make their business actually work.  We cut off women who weren't looking for work from welfare, I think it is time we cut off corporations that are not working for us.  We seek further restrictions on executive salaries (I frankly don't buy the hiring the best help, because they sure weren't doing a good job for the past few years, now were they?  Plus, where are the "smart ones" going to go anyway?), we increase their taxes, and we hold them to the fire on environmental and labor issues.  

Maybe we'll begin to have businesses that actually produce quality products and that succeed.  

Reimbursing the Rescuers

Well, populism is alive and well.  Today, President Barack Obama did what the public has been demanding, limited the salaries of corporate executives who have sought federal "bail out" money.    These gentlemen, the head of Citibank, Bank of America, General Motors, to name a few, have made millions of dollars, enjoy limos, private planes, luxury suites in hotels, sports stadiums, their own offices...yet, they failed in their management and still were paid exorbitant sums of money.

For awhile I was trying to figure out how this situation was similar to mountain climbers who have to be rescued.  Paying for the rescue is a much debated problem among climbers.    It can, I believe, cut both ways.  Climbing is inherently risky.  Few people do it because of the risk, so why should those people, the ones who don't climb, have to shoulder costs of rescuing those who do?  As a society we rely on climbers to assess the risks, make decisions about continuing with the climb based on their abilities and the knowledges they may have concerning the risks when they begin the ascent.  On the other hand, climbing is an adventure that, in many ways, makes us all human.  From Homer's odyssey to Hilary's first ascent on Mt. Everest, adventurers open and expand our own souls.  We, as a society, want to encourage not discourage people taking risk and challenge with nature.

But these failed businesses?  It's true, capitalism is about risk.  Unfortunately, many  more lives are at stake than the CEOs of the bankrupt businesses.  In fact, those CEOs will always land on their feet, they certainly have stashed away enough money and assets.  It's their administrative assistant who is, well, to be blunt, screwed.  

So, not only do I think their salaries ought to be limited, but like the call to have climbers reimburse the rescuers, I think the individual CEOs, and their top executives, ought to reimburse the government (or us) for their salaries from the moment their books began to bleed red and they continued to take huge salaries.  

Heck, between those reimbursements and all the back taxes we seem to be collecting recently, we may cut the federal deficit in half!

Who Elected These People?

When I was growing up I remember my father debunking the ultra-right wing conspiracy theories that the world was controlled by the Trilateral Commission, or bankers, or the Rockefellers.  

But now, I am beginning to believe those folks were on to something.  The World Economic Forum has been held in the ski resort town of Davos, Switzerland for 38 years, but in the past decade, it has become the must go to event for the world's powerful and gliterati.  Former President Bill Clinton, Angelina Jolie, Former Prime Minister Tony Blair, heck, even African dictators muscle an invitation.  Private jets fly corporate executives, cocktails and dinner parties entertain the attendees, and apparently there is a famous all night party hosted by, of course, Google.

So who cares if they are in Davos or Cannes?

The difference is, in Davos there is a lethal mix of corporate interests and policy makers, all allegedly talking about how to help the world.  And indeed, theories about free trade and the globalization of the economy (the lifting all boats idea), are discussed with enthusiasm.

It has been reported (which, by the way, hot-shot reporters and opinion makers like Arianna Huffington and Tom The World is Flat Friedman not only attend, but give talks at this Forum) that at this years forum which recently ended, many policy makers and more than likely corporate leaders, derided American politicians for including stipulations in the stimulus packages before Congress that American produced goods should be used on infrastructure projects.  And these leaders say, if America is not careful, free trade will end.  With straight faces they assure Americans that China will have an open bidding process for their infrastructure projects, so maybe American steel could be used for railroad tracks.   Raise your hand if you believe that any American manufacturing company will win a bid in China.  

But really what these threats are about is that the rest of the world still views the United States as one large consuming population.  And if we become even the slightest "protectionist" it means we won't buy BMWs from Germany or running shoes made in China.  Since we barely manufacture anything in the United States, those countries are not afraid of us flooding the world markets with goods, but rather that we will not buy their goods.  

I am not a buy American person.  I don't think I have ever owned an American car, although the foreign car I own now was manufactured in America.   I buy Chinese made running shoes, wear Mexican made jeans, Vietnamese made fleece vests, Thai oxford cloth shirts.  But, I do resent the simplistic and self serving pro-globalized economic arguments that are made these days.  And I think it behooves us to spend time examining the fundamentals of what went wrong with our economy before we gleefully return to spending money on imports.

Last, I really want to know who elected those people who attend the World Economic Forum and why it is the rich, powerful, and famous all get together to decide the fate of this world?

That's a Lot of Car Service

The recent news of former US Senator Tom Daschle's failure to declare much less pay taxes on the limo or car service he received for free from a friend (and Democratic fund raiser) brings up many many issues.  While I will speculate that he will be confirmed by the US Senate, I have, even before this tax issue arose, wondered about this appointment.  Tom Daschle is a man who has evolved from Washington, DC.  His wife (Linda Hall) is a lobbyist for aircraft manufacturers and other businesses, that while she claims she is not doing health care lobbying, hello!, aircraft manufacturers and associated businesses all provide health care benefits to their employees.  Working the "inside" the Beltway has become the family business for the Daschles.  And, after Tom Daschle is gone from being the Secretary of Health and Human Services you can bet he will be back at the lobbying angle.  As the former Democratic leader of the US Senate, Tom Daschle stood to make a lot of money from his connections after he lost the election for his seat in South Dakota.  Why go back to South Dakota for God's sake when you can ride around Washington, DC in a free limo?

So, really, here are my concerns: we're putting in someone for this job who is a creature of a bubble.  Understanding what is going on in not only health care, insurance, welfare, drug and alcohol addictions, and all the other pedestrian mandates in Health and Human Services takes, in my opinion, someone who has walked the walk.  Being a creature of DC is not that person.

Much less the fact his life is so far outside of the every day lives of the people he will impact the most.  I mean, to owe $128,oo0 on free limo services means he used an awful lot of limo service.  Just assume that the $128,000 is taxed at 25%, that means he used, what, over $500,000 in limo services during a less than three year time period!  That's amazing!  Hey, Tom, the rest of us take Metro!  That's a lot of self-importance.

Last, I am still concerned that so many of President Obama's appointments are from the same backgrounds.  By that I mean, federal legislators or people who have spent almost all of their careers in government service.  I don't know what is so unappealing about the Senate, but there sure seems to be a stampede to get out of there (sounds like a rather nice job to me, frankly).  While President Obama may not be afraid of having a lot of smart people around him (that's good), the one problem is that when all those smart people have had essentially the same lives, isolated in Washington, DC, it his team of rivals could end up being an echo chamber.  And that is not good.

Time to ditch Daschle and find someone who has actually had to live a normal life.