Understanding Regulation

Every day there are stories about how regulation prevents a good guy from fulfilling his passion. In this story, it's about someone who wanted to start a small farm in an area of King County, Washington which used to be filled with small farms (ah, I remember many a summer picking strawberries out in Carnation) but which is now filled with Microsoft mega-estates. Yep, there is open space, that is, unbuilt lawns for the large, gated estates.

What we don't really understand in our society is often regulation is meant to protect special interests. For instance, during the Northern spotted owl debates in the Pacific Northwest, large multi-national timber companies encouraged enforcement of the Endangered Species Act because they knew it would eliminate competition from smaller, more nimble logging companies. And indeed, the big companies survived, the small ones went bankrupt. But the cleverness of this "campaign" was the small logging companies thought it was the forest activists that wanted them out of business, not their so-called colleagues in the big timber companies!

And this story about the farm is another example. Surely the hip Microsoft millionaires shop in chic markets exclaiming local foods. But they just don't want the smell of manure next door to their "LEED Certified" houses behind gates. So they regulate farms away from their fancy homes....

Not An Activist Court? Bah-Humbug

The decision announced today by the US Supreme Court (Citizens United v. FEC) is an appalling use of judicial activism by the 5 conservative judges (Roberts, Kennedy, Alito, Scalia, Thomas). Instead of narrowly ruling on the facts presented to the Court in last year's term, the Chief Justice asked for and received a re-hearing of the case based on parameters he set. In other words, he wanted to examine whether campaign finance regulations barring corporations from buying advertisements to endorse candidates, was a unconstitutional ban on free speech.

As we all know, the First Amendment is for individuals, but long ago the US Supreme Court decided that corporations are "individuals," and therefore entitled to the same constitutional protections.

This case unravels years of sane campaign finance laws which, while not doing a good job at keeping out obscene amounts of money in federal campaigns, at least had the noble idea that people contributed to a candidate's election. Now, we'll have the candidate from Citibank, the candidate from Boeing, the candidate from Goldman Sachs, from Johnson & Johnson....

And we all know the "magic" of corporate marketing. They managed to convince a whole nation to leverage their homes to the hilt to buy flat screen TVs, granite counter tops, and stainless steel appliances against the homeowner's better interest, just think of the snarky ads they will come up with the convince you to vote for their candidate. Signed, sealed, delivered...Senator Bank of America.

Look at how corporations have perverted and corrupted sports in America. Wow, maybe a corporation can get naming rights to the US Capital or even the White House! Goldman Sachs White House or the Blue Cross US Capital.

I have one more thought: really this decision isn't about "free" speech, it's about bought and paid for speech. Manipulated speech. Advertising speech. It's about marketing a candidate. Instead of Manchurian Candidate, think AIG Candidate, primed and programed to do the bidding of the huge insurance corporation...

May we live in interesting times...we sure do now!

G-20

It seems the City of Pittsburgh has learned from Seattle's experience with the World Trade Organization in 1999. There is something about these large meetings of "world leaders" that attracts protesters in all shapes, sizes, and affiliations. But one thing is for sure, the "Battle in Seattle" set a high bar that every protester wants to match: total disruption of the meetings.

I was in Seattle during the WTO protests. In fact, I was downtown watching the parade of this huge coalition consisting of steelworkers, students, environmentalists, service workers, marching to various "citizen" bands. Then all hell broke loose. I'd heard there was tear gas which is why I was downtown, to rescue my parents who'd lived quite close to the protest areas. No one warned them there was going to be a riot.

I knew a lot of people who'd organized teach-ins about globalization, who were involved in the parade, and citizen's events. I didn't know anyone who came with the intent to throw bricks or rocks at Starbucks, yell at Gap employees, or burn dumpsters. Along with the smoky haze that took over Seattle, the important messages about the relationships between globalized corporations, poverty, environmental degradation, and unlimited consumption, got hidden in the tear gas. Rather, Seattle became all about anarchists and unbridled rage.

In the ten years since those tense days in Seattle, the world economies have churned at levels never seen before, and collapsed to the brink of an unprecedented recession. Poisoned pet food, lead filled toys, and knocked-off luxury goods flooded markets. Oil prices soared then plunged. Complicated financial products were sold and simple Ponzi schemes were devised. And no one world leader is asking "what is wrong with this picture?" Rather the world leaders continue to meet trying to figure out how to put the economies back to the same positions. "Really, it's getting back to normal..."

Pittsburgh's glass windows are covered in plywood. Police and National Guardmen and women stand on street corners protected with gas masks and riot gear. Since Seattle, cities that host these international events become symbols of power and might versus small, roving bands of angry young people looking for something to throw.

Perhaps if these so-called world leaders thought to understand the discontent and pain outside of their bunkers and the loud youngsters who area adding protester to their resumes, if they peered outside the lavish dinner parties, art gallery tours, and swanky tour of Teresa Heinz Kerry's farm, they could see the damage they have brought in the ten years since Seattle. And that almost nothing they are doing now, the small, incremental changes they are tinkering with, will help. These world leaders, doing the bidding of globalized economies dominated by the companies "too big to fail," have brought the world to the brink, but not back.

At least the lumber mill that supplied the plywood (probably from Chile or China where an employee makes virtually nothing) made some money this week.

Corporate America

As we begin digesting the Obama Administration's financial industry bail-out plan, I am struck by the lack of debate concerning the relationship between government and private investors.  Certainly there are discussions about the large guarantees and actual cash the Federal Government is contributing in order to lure private money (something like 9¢ on the dollar, in other words, the government is contributing  91¢) in buying the so-called "toxic assets" off the financial institution's books.  But there is scant discussion about the new partnership that is created.  In other words, the United States Government is now partners with private investors who will be eagerly trying to maximize their profits.  

Aside from the distaste of how those profits are going to be maximized (assume that some of those toxic assets are mortgages which are "submarined" or that are secured by real estate worth far less than the face value of the promissory note) by foreclosing and selling people's homes, developer's half baked projects, and overly-leveraged businesses like Donald Trump.  But there are real people behind those toxic assets, with real homes, kids in neighborhood schools, struggling to afford a loan sold to them on dreams and more than likely fraudulent practices.

In the middle of these discussions, about how do we want corporate America intwined with our government, we also should look at corporate "solutions" to other issues.  For instance, in yesterday's New York Times I noticed a full page ad from IBM.  The ad gave a litany of food problems: mad cow, salmonella, e. coli.  And, IBM touted it's solution, of tracing food from production to market as a way to trace and track problems.  Of course, this tracking would require Federal legislation and regulation.  Interestingly, many proponents of local foods, people in the slow food movement, oppose tracking system because, ah-ha, it benefits the conglomerates who can afford the IBM systems!  It will, essentially, put the small producers out of the market.  

And then we have the in vogue with transportation planners, congestion pricing.  IBM is running commercials, which have to be expensive, on the NCAA basketball championships, regaling viewers with how much time we waste stuck in traffic.  How European countries have solved this problem (cut to happy Norwegians) with congestion pricing.  Of course, IBM is all to happy to sell you lots of expensive technology to solve this "problem."  

Let me tell you how IBM sales work.  For years they sold main frames to Boeing.  And they were so in bed with Boeing, that IBM sales force had offices in Boeing corporate offices.  Same thing with Nordstrom, selling them point-of-sales machines.  You just know IBM marketing folks are wining and dining transit planners, agriculture, food, and drug regulators, and of course, Congress, to legislate "solutions" to "problems."  

We have to remember, these corporations have lobbyists.  Lots of them.  They are good at what they do.  Many of these lobbyists used to be Congressmen, Democrats and Republicans.  They are friends with the current Administration.  When they yell "fire," everyone is conditioned to listen, even if there is no fire or a small flame easily extinguished.

So, we then must wonder...what are these toxic assets that we have to so urgently buy?  What is the problem that corporate America is whispering to our "leaders?"  And is it a good thing we are now partners with the very investors who were so eager to make a buck off of sub-prime mortgages?  What, really, is this fire?