So, in secret, the Fed subsidizes big banks to the tune of over $250 million dollars (So That's Where the Money Went, Sunday Business, December 5, 2010:1,5). What did Main Street get? Nothing!
A much better way to stem the panic induced by failing mortgages would have been to do one of two things:
1. Force the lenders, as a condition of the subsidized loan, to enter into Shared Appreciation Mortgages (SAMs) with the distressed homeowners, or
2. Have the government itself enter into such arrangements (SAMs) with the distressed homeowners.
This would have removed virtually all risk of default. The rickety pyramid of derivatives would have been underpinned. The housing market would have been stabilized. People would be able to stay in their homes and schools. Neighborhoods would have been stabilized.
What a failure of imagination; what a failure to institute a pollicy with multiple winners.
I have one request of the Big Bankers. The Federal Government is willing to accept gifts to reduce the debt. We bailed you out in your hour of need with these subsidies. Now that banks are profitable, give back that money to the Treasury rather than paying it out in bonuses to executives; really the Treasury by providing those subsidies earned those bonuses.
Sent to New York Times
Sunday, December 12, 2010
Thursday, December 9, 2010
Wednesday, December 8, 2010
Why not Reconciliation for Extending Tax Cuts
In all the talk about the repeal of the Bush tax cuts for the rich, there has been no discussion of the giant elephant in the Senate Chamber. No I don't mean Mitch McConnell and his fellow Republican obstructionists, there has been plenty said about them. I mean no one is talking about the possibility of passing the tax changes through the reconciliation process (No hits on the Washington Post website this month).
The original Bush cuts were passed under the reconciliation rules, why can't the Obama extensions of the poor and middle class be passed under these rules too? While we are at it, under reconciliation we could also extend unemployment benefits. Perhaps we could also provide additional funds to States, towns, and cities who have moved back into budget cutting and layoff modes.
Is it that forcing reconciliation would violate Obama's post partisan hopes? Forget it, these hopes have long been shattered. Or is it that the vote counters know that under reconciliation they would not be able to get a simple majority? If that is the case, let's force a vote and get all those Senators to show their colors.
Sent to Washington Post
The original Bush cuts were passed under the reconciliation rules, why can't the Obama extensions of the poor and middle class be passed under these rules too? While we are at it, under reconciliation we could also extend unemployment benefits. Perhaps we could also provide additional funds to States, towns, and cities who have moved back into budget cutting and layoff modes.
Is it that forcing reconciliation would violate Obama's post partisan hopes? Forget it, these hopes have long been shattered. Or is it that the vote counters know that under reconciliation they would not be able to get a simple majority? If that is the case, let's force a vote and get all those Senators to show their colors.
Sent to Washington Post
Wednesday, December 1, 2010
Memo to Albany: It's Your Job
You applaud the Governor's proposal of a 2% across the board budget cut, saying, "That is the fairest way to go." (Memo to Albany: It's Your Job, New York Times, November 27, 2010: A14)
There are two problems with the across the board approach.
First, it is the lazy man's way of budgeting. It prevents one from taking a hard look at all the expenditures and making tough choices about which are justified and which can be cut.
Second, it is manifestly unfair. A Department that is running a tight ship with little slack will be badly impacted in its ability to deliver services. A Department that is fat and flabby will be able to maintain its critical activities by divesting less productive endeavors.
What Albany needs is precision and focus in its budgetary activities.
Sent to New York Times
There are two problems with the across the board approach.
First, it is the lazy man's way of budgeting. It prevents one from taking a hard look at all the expenditures and making tough choices about which are justified and which can be cut.
Second, it is manifestly unfair. A Department that is running a tight ship with little slack will be badly impacted in its ability to deliver services. A Department that is fat and flabby will be able to maintain its critical activities by divesting less productive endeavors.
What Albany needs is precision and focus in its budgetary activities.
Sent to New York Times
Justice DeLayed
Justice DeLayed is Justice Denied.
Mr Delay was finally convicted of money laundering (DeLay Convicted in Donation Case by a Texas Jury, New York Times, November 25, 2010 A1
However there is no restitution for the voters of Texas. Indirectly, the money provided by Delay was used to support Republican candidates in the state office elections. They won control of the legislature and then, in an unprecidented between census redistricting, redrew federal House district boundaries to benefit their fellow Republicans.
In the subsequent election, the Texas delegation which had a small Democratic majority (17-15) swung decisively to the Republicans (21-11).
Are the Texas House victories won by Republicans to be declared invalid because of the tainted funding? Are the House district boundaries to be redrawn?
How can Texas be made whole again?
Mr Delay was finally convicted of money laundering (DeLay Convicted in Donation Case by a Texas Jury, New York Times, November 25, 2010 A1
However there is no restitution for the voters of Texas. Indirectly, the money provided by Delay was used to support Republican candidates in the state office elections. They won control of the legislature and then, in an unprecidented between census redistricting, redrew federal House district boundaries to benefit their fellow Republicans.
In the subsequent election, the Texas delegation which had a small Democratic majority (17-15) swung decisively to the Republicans (21-11).
Are the Texas House victories won by Republicans to be declared invalid because of the tainted funding? Are the House district boundaries to be redrawn?
How can Texas be made whole again?
The GOP's lame duck Hardball
The GOP is mindlessly opposing the START Treaty (The GOP's lame duck Hardball, Washington Post, November 21, 2010)
The GOP has struck a blow in the war on terror; on the side of the terrorists.
A side benefit of the inspection regime of the Russian nuclear sites is the pressure on the Russians to keep these sites secure. Continued absence of American inspectors will result in a slackening of security and a greater ability for unscrupulous criminals to steal nuclear material from the sites and sell them to well funded terrorist groups.
What is it about nuclear security that the GOP leaders, with the honorable exception of Senator Lugar, do not understand?
Sent to Washington Post
The GOP has struck a blow in the war on terror; on the side of the terrorists.
A side benefit of the inspection regime of the Russian nuclear sites is the pressure on the Russians to keep these sites secure. Continued absence of American inspectors will result in a slackening of security and a greater ability for unscrupulous criminals to steal nuclear material from the sites and sell them to well funded terrorist groups.
What is it about nuclear security that the GOP leaders, with the honorable exception of Senator Lugar, do not understand?
Sent to Washington Post
Dual Pay Structures
Dual Pay structures are a bad idea (Unions Yield on Two-Tier Wage Scales to Preserve Jobs, New York Times, November 20, 2010: A1, B2).
They create major inequities between employees hired at different times. In our modern economy, we are told that collaboration between workers and between management and workers is essential for the development and manufacture of new products. The management of these companies will regret their coercive actions as these two-tiers pay scales will inhibit the development of a cooperative climate.
These lower pay scales for new hires will also contribute to the large income inequities in the country. It is the Tragedy of the Commons all over again. It may make sense for one company to improve its profitability (and the managers' bonuses) by cutting wages, but the enlarging of a large pool of people lacking purchasing power will do little to improve demand in the long run.
Sent to New York Times
They create major inequities between employees hired at different times. In our modern economy, we are told that collaboration between workers and between management and workers is essential for the development and manufacture of new products. The management of these companies will regret their coercive actions as these two-tiers pay scales will inhibit the development of a cooperative climate.
These lower pay scales for new hires will also contribute to the large income inequities in the country. It is the Tragedy of the Commons all over again. It may make sense for one company to improve its profitability (and the managers' bonuses) by cutting wages, but the enlarging of a large pool of people lacking purchasing power will do little to improve demand in the long run.
Sent to New York Times
Monday, November 22, 2010
Justices' Opinions
I have never seen such misleading graphs as those accompanying the article Justices' Opinions Often Long on Words but Short on Guidelines (New York Times, November 18, 2010: A1, A22).
The graph on number of cases taken seems to shrink to zilch in 1090 because the graph does not have a zero point; the bottom edge is at some unspecified point between 50 and 100 cases. This is unacceptable.
The second graph on the number of words has the opposite problem. It seems as though reports in the 1950s were very brief and that they increased exponentially in the 1970's and have since leveled off. Again this graph has no zero point; the bottom edge is somewhere about 1900 words. If the graph had begun at zero words, the change would not have appeared so dramatic.
Readers really do expect better of the Times' graphic artists. Their watchword should be: always include the zero.
Sent to New York Times [& to the Public Editor]
The graph on number of cases taken seems to shrink to zilch in 1090 because the graph does not have a zero point; the bottom edge is at some unspecified point between 50 and 100 cases. This is unacceptable.
The second graph on the number of words has the opposite problem. It seems as though reports in the 1950s were very brief and that they increased exponentially in the 1970's and have since leveled off. Again this graph has no zero point; the bottom edge is somewhere about 1900 words. If the graph had begun at zero words, the change would not have appeared so dramatic.
Readers really do expect better of the Times' graphic artists. Their watchword should be: always include the zero.
Sent to New York Times [& to the Public Editor]
The Two Cultures
Let me apply some psychological analysis to one of the phenomena described by David Brooks (The Two Cultures, New York Times, November 15, 2010).
He takes at face value that business leaders are accurately reflecting the causes of their behavior when they say that "she is holding off on investing because she is scared about the future..."
But we are not very good at identifying and reporting on causal attribution. When things are going well for us, we tend to identify the causes internally: we developed new products, we designed them well, our manufacturing was of high quality, and we marketed the products well. When things are not going well, we make attributions to the environment: the market collapsed, there is too much uncertainty, and so on.
This pattern of attributions has been well documented in the Management Letters of many firms as they confront the ups and downs of the business cycle.
The fact is that firms can enact their environments. If the 300,000 members of the Chamber of Commerce were each to hire one new employee next week that might well start a virtuous cycle of increased demand (hopefully for goods and services made in the US) leading to increased hiring and so on.
Sent to the New York Times
He takes at face value that business leaders are accurately reflecting the causes of their behavior when they say that "she is holding off on investing because she is scared about the future..."
But we are not very good at identifying and reporting on causal attribution. When things are going well for us, we tend to identify the causes internally: we developed new products, we designed them well, our manufacturing was of high quality, and we marketed the products well. When things are not going well, we make attributions to the environment: the market collapsed, there is too much uncertainty, and so on.
This pattern of attributions has been well documented in the Management Letters of many firms as they confront the ups and downs of the business cycle.
The fact is that firms can enact their environments. If the 300,000 members of the Chamber of Commerce were each to hire one new employee next week that might well start a virtuous cycle of increased demand (hopefully for goods and services made in the US) leading to increased hiring and so on.
Sent to the New York Times
Massport: Director's pay hike doesn't fly
I have only lived in Massachusetts for eight years so I am puzzled by the way in which employment contracts seem to be written in, at least part, of the Public sector.
You report that when he retires, Mr Thomas Kinton (Massport) will be entitled to draw on $400,000 in "sick pay" (Massport: Director's pay hike doesn't fly, Boston Globe, November 16, 2010: A22).
Sick pay should be just that, payment for days when you are prevented from working because you are sick. Properly administered, sick pay does two things. It allows the individuals to recuperate more quickly than they might if they came to work, this would enhance the organization's productivity; it also protects the organization by not having coughing and sneezing individuals in the workplace who might infect their colleagues, this too enhances productivity.
If, however, you can claim payment for unused sick days at retirement, these incentives are reversed. To get a big terminal bonus, the individual is encouraged to come to work, to work at a torpid pace because of sickness, and possibly infect colleagues with the illness.
How did such contracts come to be written?
Sent to the Boston Globe
You report that when he retires, Mr Thomas Kinton (Massport) will be entitled to draw on $400,000 in "sick pay" (Massport: Director's pay hike doesn't fly, Boston Globe, November 16, 2010: A22).
Sick pay should be just that, payment for days when you are prevented from working because you are sick. Properly administered, sick pay does two things. It allows the individuals to recuperate more quickly than they might if they came to work, this would enhance the organization's productivity; it also protects the organization by not having coughing and sneezing individuals in the workplace who might infect their colleagues, this too enhances productivity.
If, however, you can claim payment for unused sick days at retirement, these incentives are reversed. To get a big terminal bonus, the individual is encouraged to come to work, to work at a torpid pace because of sickness, and possibly infect colleagues with the illness.
How did such contracts come to be written?
Sent to the Boston Globe
Get a Pencil: You're Tacking the Deficit
I regret that your budget options (Week in Review, November 14, 2010) did not in clude a financial transactions tax.
Just look at the Wall Street volumes and prices. That is where the money is. That is what we should be taxing.
At least tell us what a small financial transaction tax would raise.
Thank you.
Sent to the New York Times
Just look at the Wall Street volumes and prices. That is where the money is. That is what we should be taxing.
At least tell us what a small financial transaction tax would raise.
Thank you.
Sent to the New York Times
Wednesday, November 17, 2010
Panel Seeks Social Security Cuts and Higher Taxes
For many years, Canadians have not shared the mortgage interest deduction from their
income taxes, yet their rate of home ownership is identical to that of the US (about 68%)
[Panel Seeks Social Security Cuts and Higher Taxes, New York Times, November 11, 2010].
We probably will not harm the housing market if that benefit is withdrawn gradually.
Sent to New York Times
income taxes, yet their rate of home ownership is identical to that of the US (about 68%)
[Panel Seeks Social Security Cuts and Higher Taxes, New York Times, November 11, 2010].
We probably will not harm the housing market if that benefit is withdrawn gradually.
Sent to New York Times
Sunday, November 14, 2010
Aftermath of the Election
How long do you think it will be before the Republicans cry "For how much longer are we going to let those filibustering Democrats to thwart the will of the people?"
Sent to Boston Globe
Sent to Boston Globe
Panel Seeks Social Security Cuts and Higher Taxes
For many years, Canadians have not shared the mortgage interest deduction from their income taxes, yet their rate of home ownership is identical to that of the US (about 68%) [Panel Seeks Social Security Cuts and Higher Taxes, New York Times, November 11, 2010].
We probably will not harm the housing market if that benefit is withdrawn gradually.
Sent to New York Times
We probably will not harm the housing market if that benefit is withdrawn gradually.
Sent to New York Times
McConnell Eases Talk of A Thaw
Mitch McConnell spoke eloquently yesterday about his unwillingness to compromise Republican principles (McConnell Eases Talk of Thaw, New York Times, November 5, 2010).
What are these principles?
I had always thought that Budget balancing was a major principle for the party. Why didn't they stand up for those principles during the Bush years when the deficit soared.
As Republicans caused at least half the deficit, shouldn't they be willing to put many of their favorite programs (spending and tax expenditures -- such as not extending the Bush tax cuts to the wealthy)) to the axe in order to bring the budget into balance.
Their pet programs should be reduced to cover at least half the savings.
Sent to New York Times
What are these principles?
I had always thought that Budget balancing was a major principle for the party. Why didn't they stand up for those principles during the Bush years when the deficit soared.
As Republicans caused at least half the deficit, shouldn't they be willing to put many of their favorite programs (spending and tax expenditures -- such as not extending the Bush tax cuts to the wealthy)) to the axe in order to bring the budget into balance.
Their pet programs should be reduced to cover at least half the savings.
Sent to New York Times
Cede Political Turf? Never! Well, Maybe
One factor is omitted in the discussion about collaboration between political opponents (Cede Political Turf? Never! Well, Maybe. Science Times, November 2, 2010).
If the opponents during their negotiations are interrupted with messages from their constituents telling them to remember their principles and their goals, it will be very difficult for them to explore the issues being discussed in sufficient detail to arrive at the possibility of agreement. There will be no win-win and probably not even compromise.
Sent to the New York Times
If the opponents during their negotiations are interrupted with messages from their constituents telling them to remember their principles and their goals, it will be very difficult for them to explore the issues being discussed in sufficient detail to arrive at the possibility of agreement. There will be no win-win and probably not even compromise.
Sent to the New York Times
The Election
The financial backers of the Republican Party have, with their financial support, just made a down-payment on the kind of government they want.
For that government to succeed they will have to invest ten times that amount in hiring 400,000 new employees in the US. This will begin a virtuous cycle of new employment leading to more consumption and then to even more employment in the US.
That is how their stimulus will have to work and if it works they will reap the country's gratitude.
Sent to the New York Times
For that government to succeed they will have to invest ten times that amount in hiring 400,000 new employees in the US. This will begin a virtuous cycle of new employment leading to more consumption and then to even more employment in the US.
That is how their stimulus will have to work and if it works they will reap the country's gratitude.
Sent to the New York Times
The 'big dog' in campaign spending
Mr. Jacoby paints an incomplete picture in his comparison between Union and Corporate spending on elections (The 'big dog' in campaign spending, Boston Globe, October 31, 2010).
First, he cannot know that Unions outspent Corporations. Without any disclosure information about corporate contributions to the Chamber and the Rove inspired organizations. It is perfectly possible for corporations to donate to multiple organizations and thus outspend unions.
Spending by unions has to be from funds earmarked by each member. The same constraint does not apply to corporations who do not need permission from either shareholders or customers. As a customer, I do not expect that my purchases would provide funds for corporate lobbying. When I contacted three service providers asking that the proportion of my tiny contributions to their cash flow allocated to political activity be diverted to charity they ignored my request.
Finally, the fact that public setcor hourly wages exceed those of private sector workers is not due to the irresponsible generosity of public sector employers; rather it is due to the fact that private sector wages have stagnated due to top management of private sector employers (and especially the very top managers) having reaped in their pay and benefit packages all the gains in productivity that have been achieved in America over the past decade.
Sent to Boston Globe
First, he cannot know that Unions outspent Corporations. Without any disclosure information about corporate contributions to the Chamber and the Rove inspired organizations. It is perfectly possible for corporations to donate to multiple organizations and thus outspend unions.
Spending by unions has to be from funds earmarked by each member. The same constraint does not apply to corporations who do not need permission from either shareholders or customers. As a customer, I do not expect that my purchases would provide funds for corporate lobbying. When I contacted three service providers asking that the proportion of my tiny contributions to their cash flow allocated to political activity be diverted to charity they ignored my request.
Finally, the fact that public setcor hourly wages exceed those of private sector workers is not due to the irresponsible generosity of public sector employers; rather it is due to the fact that private sector wages have stagnated due to top management of private sector employers (and especially the very top managers) having reaped in their pay and benefit packages all the gains in productivity that have been achieved in America over the past decade.
Sent to Boston Globe
Patrick opens narrow lead, poll suggests
I am appalled that the graph appearing alongside Frank Phillips' report on the gubernatorial race did not include data for Jill Stein (Patrick opens Narrow Lead, Poll Suggests, Boston Globe, October 222nd., 2010: A1).
She is a candidate and she has some some good ideas. By your failure to acknowledge her presence in the race you are unfairly handicapping her.
That is shameful.
I hope you will print a corrected graph.
Sent to Boston Globe
She is a candidate and she has some some good ideas. By your failure to acknowledge her presence in the race you are unfairly handicapping her.
That is shameful.
I hope you will print a corrected graph.
Sent to Boston Globe
Special Report on Austerity
Your special report fails to emphasize where the money really is (Recovery, Not Austerity, American Prospect, November 2010: A1).
The money is not in Social Security it is in the financial sector.
The real need in this Century is for a Tobin tax levied on every financial transaction.
This would give us the resources to bring alive the American dream for us all.
Sent to American Prospect
The money is not in Social Security it is in the financial sector.
The real need in this Century is for a Tobin tax levied on every financial transaction.
This would give us the resources to bring alive the American dream for us all.
Sent to American Prospect
The Foreclosure Mess
There is much to agree with in Professor Peiser's Op-Ed (The foreclosure mess, Boston Globe, October 20, 2010: A13).
However his suggestion that those people have suffered from improper foreclosure forego litigation against their mortgage servers is absurd. People need to be able to redress the wrongs committed against them.
One suggestion for cleaning up the mess is for Institutions (banks, state government, federal government) enter into Shared Appreciation mortgages with the distressed homeowner. The homeowners pay what they can, the institution picks up the rest. Both share in any appreciation of the home when it is finally sold.
This has multiple benefits. Only the institution and the homeowner have to agree on a contract. The multiple, often unknown, holders of the mortgage do not need to agree as their cash flow will be unchanged. Homeowners stay in the houses; property taxes continue to be paid; neighborhoods will be stabilized; and school classes will not be disrupted as pupils move as a result of foreclosure.
There are not many solutions with so many beneficiaries.
Sent to Boston Globe
However his suggestion that those people have suffered from improper foreclosure forego litigation against their mortgage servers is absurd. People need to be able to redress the wrongs committed against them.
One suggestion for cleaning up the mess is for Institutions (banks, state government, federal government) enter into Shared Appreciation mortgages with the distressed homeowner. The homeowners pay what they can, the institution picks up the rest. Both share in any appreciation of the home when it is finally sold.
This has multiple benefits. Only the institution and the homeowner have to agree on a contract. The multiple, often unknown, holders of the mortgage do not need to agree as their cash flow will be unchanged. Homeowners stay in the houses; property taxes continue to be paid; neighborhoods will be stabilized; and school classes will not be disrupted as pupils move as a result of foreclosure.
There are not many solutions with so many beneficiaries.
Sent to Boston Globe
Thursday, October 21, 2010
Friday, October 15, 2010
Paternalism and Soda (scroll down for Rosser's letter)
Ezra Rosser is wrong (Letters, October 12, 2010: A24).
Through its massive agricultural subsidies of almost $4 billion per year for corn, the US government keeps the price of soda, laced with corn syrup, low for all of us.
Through its massive agricultural subsidies of almost $4 billion per year for corn, the US government keeps the price of soda, laced with corn syrup, low for all of us.
The Paralysis of the State
I agree with David Brooks that unfunded public (and private) sector pensions are a major problem that must be faced sooner rather than later (The Paralysis of the State, New York Times, October 12, 2010: A25).
There are however two points with which I must take issue. First is his statement that public sector workers average $14.00 more than private sector workers; traditionally the gap has been in the other direction with private sector workers earning a premium over public sector workers. This reversal is not due to the irresponsible generosity of public sector employers; rather it is due to the fact that private sector wages have stagnated due to top management of private sector employers (and especially the very top managers) having reaped in their pay an benefit packages all the gains in productivity that have been achieved in America over the past decade.
Secondly, under the traditional model, the lower public sector wage was balanced by enhanced job security and good pensions. Security is gone especially at the state and local level. These pensions are not undeserved, they compensate for years when the wage gap was in the opposite direction.
As citizens we need to do two things: We must ensure that pension funds for state and local governments be merged so as to minimize administrative costs and increase the actuarial benefits that come from a larger pool of pensioners; we must also make sure that, once there is an economic recovery, we raise taxes to properly fund these benefits.
There are however two points with which I must take issue. First is his statement that public sector workers average $14.00 more than private sector workers; traditionally the gap has been in the other direction with private sector workers earning a premium over public sector workers. This reversal is not due to the irresponsible generosity of public sector employers; rather it is due to the fact that private sector wages have stagnated due to top management of private sector employers (and especially the very top managers) having reaped in their pay an benefit packages all the gains in productivity that have been achieved in America over the past decade.
Secondly, under the traditional model, the lower public sector wage was balanced by enhanced job security and good pensions. Security is gone especially at the state and local level. These pensions are not undeserved, they compensate for years when the wage gap was in the opposite direction.
As citizens we need to do two things: We must ensure that pension funds for state and local governments be merged so as to minimize administrative costs and increase the actuarial benefits that come from a larger pool of pensioners; we must also make sure that, once there is an economic recovery, we raise taxes to properly fund these benefits.
Mankiw's Motivation
I do not think that Mr. Mankiw writes for money (I Can Afford Higher Taxes, But They'll Make Me Work Less. New York Times Sunday Business, October 10, 2010: page 3).
I believe that he writes to share his ideas with the rest of us. He accepts speaking engagements so that he can influence senior corporate executives and government officials. He speaks and writes so that, ever so slightly, he can influence the economic policy of our country. He writes so as to leave a name for posterity.
Money is merely a by-product of of his activity. His motivation is intrinsic. If the group making the invitation was influential enough, I am sure he would speak to them for free.
I believe that he writes to share his ideas with the rest of us. He accepts speaking engagements so that he can influence senior corporate executives and government officials. He speaks and writes so that, ever so slightly, he can influence the economic policy of our country. He writes so as to leave a name for posterity.
Money is merely a by-product of of his activity. His motivation is intrinsic. If the group making the invitation was influential enough, I am sure he would speak to them for free.
Cahill Baker Plot
The revelations of the Baker Campaign's interactions with Cahill's top aides will hurt Charlie Baker's candidacy (Cahill accuses ex-aides of plot to help Baker, Boston Globe, October 8th. 2010: A1).
He positioned himself as an ethical outsider who would go up to Beacon Hill and eliminate all the unsavory deals that lurk in the halls of the State House.
He is now implicated in one of the least savory deals of the past decade. To whom will his adherents turn?
Sent to Boston Globe
He positioned himself as an ethical outsider who would go up to Beacon Hill and eliminate all the unsavory deals that lurk in the halls of the State House.
He is now implicated in one of the least savory deals of the past decade. To whom will his adherents turn?
Sent to Boston Globe
Friday, October 1, 2010
What are we fighting about? The impact of the Bush tax increases on the small business owner
What are we fighting about? The impact of the Bush tax increases on the small business owner.
The Republicans are claiming that allowing the Bush tax cuts to elapse will have an adverse impact on small business owners who do not incorporate; so they enter their business income on their personal 1040 Tax Form. The critics of the Administration's plan claim that it will reduce the small business owner's propensity to hire new employees and reduce their propensity to invest in new equipment.
These claims are false.
What is taxed is income. A firm's income is calculated after wages have have been paid to employees and after deductions have been taken for investments in equipment, land, and buildings. So taxes come after these deductions, so an increased tax (on net income) can have absolutely no direct impact on an owner's propensity to hire or to plow money back into the firm.
There is however a modest indirect impact. According to the National Association of Manufacturers, the average small business makes a profit of $600,000.
Under the present tax regime with 33% and 35% as the top two rates, if the owner filed jointly with a spouse and there was no other income, the tax owed would be $180,293.81. Under the new tax regime with a 36% rate for income over $250,000 and a top rate of 39.6%, the owner would pay $194,415.33, an increase of about $14,000.
If the owner wanted to maintain his or her current level of after-tax income, he or she would have to increase the firm's profit to about $620,000. In a firm that generates these levels of profit, $20,000 dollars is not going to have much impact on hiring and investment decisions.
For firm's below the average, the impact would be even smaller. It is only when firms get to make profits above $2,000,000 that we get into serious money: to maintain that lifestyle, the owner would need to increase profits by $100,000.0 so this might impact hiring or investment decisions.
So the truth is, allowing the tax cuts on incomes over $250,000 to expire will have little impact on most small businesses only on highly profitable firms and very rich owners will the impact be even noticeable!
Letter in Cambridge Chronicle, Sept 30, 2010.
Monday, September 20, 2010
Tuesday, August 24, 2010
Grow Jobs ... Shrink Government
In his op-ed "Grow Jobs, Shrink Government" (Boston Globe, August 18, 2010) Mitt Romney claims that the Republicans have other ideas apart from the "cut taxes" mantra.
A careful examination of the nine items in the brief agenda laid out by Mitt Romney show that three were revenue neutral (negotiate trade agreements, those these might result in tariff reductions; adopting an energy policy that reduces dependence on middle east oil, though Romney gives no indication of what such a policy might be and whether it would be acceptable to other Republicans; preserve our balanced labor and management rules and regulators), one would increase taxes (eliminate lobbyist inspired loopholes), one is ambiguous on the effect on taxes (align corporate taxes with other developed economies, but I assume he expects a reduction), while four unequivically involve reductions in taxes (preserve the Bush tax cuts, that will be a cut from the anticipated 20011 rates; accelerated write-offs for corporate investments; eliminate tax on dividends; eliminate tax on capital gains and interest).
It is clear that the more specific parts of Romney's program involve tax cuts. He never makes clear which government programs should be curtailed to avoid an increase in the National Debt.
Saddest of course is Romney's failure to note that policies similar to these were what the Republicans followed during eight of the last ten years that Romney deplores.
Sent to Boston Globe
A careful examination of the nine items in the brief agenda laid out by Mitt Romney show that three were revenue neutral (negotiate trade agreements, those these might result in tariff reductions; adopting an energy policy that reduces dependence on middle east oil, though Romney gives no indication of what such a policy might be and whether it would be acceptable to other Republicans; preserve our balanced labor and management rules and regulators), one would increase taxes (eliminate lobbyist inspired loopholes), one is ambiguous on the effect on taxes (align corporate taxes with other developed economies, but I assume he expects a reduction), while four unequivically involve reductions in taxes (preserve the Bush tax cuts, that will be a cut from the anticipated 20011 rates; accelerated write-offs for corporate investments; eliminate tax on dividends; eliminate tax on capital gains and interest).
It is clear that the more specific parts of Romney's program involve tax cuts. He never makes clear which government programs should be curtailed to avoid an increase in the National Debt.
Saddest of course is Romney's failure to note that policies similar to these were what the Republicans followed during eight of the last ten years that Romney deplores.
Sent to Boston Globe
Tuesday, August 17, 2010
Foreclosure Crisis
A recent news story (US Plans more aid for jobless homeowners, August 11, 2010) and John Carney's Op-Ed on Fannie Mae and Freddie Mac (Too big not to fail, August 11, 2010) contain the seeds of a good idea for the solution to the foreclosure crisis. Mr. Carney notes that overlooked suggestions for reform include encouraging banks to partner with homeowners in shared appreciation mortgages. Included in the additional aid are funds to enable "local aid groups to provide [interest free] bridge loans of up to $50,000 to eligible borrowers to help them pay mortgage principal, interest, insurance, and taxes for up to 24 months.
Let us combine these two ideas into a government financed and administered program. Our experience going through middle men for the government guaranteed student loan program was an expensive mistake.
Let the government absorb Fannie Mae and Freddie MAc and give them a new role. Entering into shared appreciation mortgages with distressed homeowners. With this version of a shared appreciation mortgage, the homeowner would pay what he or she could, the government would pay the rest.
With such a scheme there would be multiple winners:
* mortgage holders would get their promised stream of payments,
*government would finally get some traction in reducing the rate of foreclosures -- nothing has worked so far because getting multiple mortgage holders to agree on modifying the terms of a mortgage is virtually impossible; over time government might even build up some positive equity in the houses it co-owned,
* homeowners would continue to live in their homes,
*towns and cities would continue to enjoy vibrant neighborhoods.
All around it seems a sensible way to go.
Let us combine these two ideas into a government financed and administered program. Our experience going through middle men for the government guaranteed student loan program was an expensive mistake.
Let the government absorb Fannie Mae and Freddie MAc and give them a new role. Entering into shared appreciation mortgages with distressed homeowners. With this version of a shared appreciation mortgage, the homeowner would pay what he or she could, the government would pay the rest.
With such a scheme there would be multiple winners:
* mortgage holders would get their promised stream of payments,
*government would finally get some traction in reducing the rate of foreclosures -- nothing has worked so far because getting multiple mortgage holders to agree on modifying the terms of a mortgage is virtually impossible; over time government might even build up some positive equity in the houses it co-owned,
* homeowners would continue to live in their homes,
*towns and cities would continue to enjoy vibrant neighborhoods.
All around it seems a sensible way to go.
Bureaucratic Failure in the case of Shirley Sherrod
The indecent haste with which the Department of Agriculture engineered Ms. Sherrod's
resignation suggests a major failure in the bureaucratic protections that the Federal
Government has in place for its employees.
To be fired without any attempt to hear her side of the story, without a full
consideration of all the facts suggests gross incompetence in senior management of the
agency.
They should be disciplined.
--
resignation suggests a major failure in the bureaucratic protections that the Federal
Government has in place for its employees.
To be fired without any attempt to hear her side of the story, without a full
consideration of all the facts suggests gross incompetence in senior management of the
agency.
They should be disciplined.
--
Friday, July 2, 2010
Supreme Court and Maher Arar
I share your outrage that the Supreme Court has refused to take on the case of Mr Maher Arar (New York Times, June 15, 2010), a Canadian who was wrongly accused of terrorist links, and who was arrested in New York, rendered to Syria where he was tortured, before returned to Canada.
This refusal was, in part, based on arguments by the Justice Department that "the court should not investigate the communications between the United States and other countries because it might damage diplomatic relations and affect national security."
It is difficult to see what further harm could be done. The case was extensively studied by a Canadian Royal Commission and Mr. Arar was cleared of wrongdoing and given a large financial settlement. The trouble is that the refusal to open this case is based upon the docrine of "the States Secrets Privilege." This allows the State to be its own judge in deciding what is or is not a State Secret. The privilege was born of a lie in the 1950's and should not be allowed to continue in its present form.
The Justice Department in this case and others is continuing to follow the policies of the Bush Administration. It should not. Rather it should give strong support to The States Secret Protection Act of 2009[H.R. 984/ S417] which will allow for checks and balances in the use of the privilege. This law still languishes somewhere on the Congressional Calendar.
We should note that in this case, the Supreme Court has followed the doctrine of stare decisis; quite a contrast to its overturning one hundred years of precedent for campaign financing.
Sent to New York Times
This refusal was, in part, based on arguments by the Justice Department that "the court should not investigate the communications between the United States and other countries because it might damage diplomatic relations and affect national security."
It is difficult to see what further harm could be done. The case was extensively studied by a Canadian Royal Commission and Mr. Arar was cleared of wrongdoing and given a large financial settlement. The trouble is that the refusal to open this case is based upon the docrine of "the States Secrets Privilege." This allows the State to be its own judge in deciding what is or is not a State Secret. The privilege was born of a lie in the 1950's and should not be allowed to continue in its present form.
The Justice Department in this case and others is continuing to follow the policies of the Bush Administration. It should not. Rather it should give strong support to The States Secret Protection Act of 2009[H.R. 984/ S417] which will allow for checks and balances in the use of the privilege. This law still languishes somewhere on the Congressional Calendar.
We should note that in this case, the Supreme Court has followed the doctrine of stare decisis; quite a contrast to its overturning one hundred years of precedent for campaign financing.
Sent to New York Times
Rating Agencies
Andrew Ross Sorkin fails to explicitly offer the simple answer to how to avoid conflict of interest by the rating agencies (Answers On Ratings Are Overdue, New York Times (Business Day), June 1, 2010: B1, B2).
Let the agencies' paymasters be the investors. Each financial transaction should have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress does not yet seem to be moving in a direction to correct this situation.
Sent to New York Times
Let the agencies' paymasters be the investors. Each financial transaction should have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress does not yet seem to be moving in a direction to correct this situation.
Sent to New York Times
More on the Euro
The constraints that the Euro places on European policy described and decried by your editorial writer yesterday (Greece's troubles reveal fatal flaws in the Euro, Boston Globe, May 6, 2010)are exactly the same as the constraints placed upon the regions and states of the United States by our acceptance of the US dollar as a common currency.
Without the dollar, Massachusetts could try to solve it's budget problems by devaluing its currency thereby reducing imports from other states and increasing exports to those states.
Alas, other states would probably reciprocate or add tariff barriers thereby making both Massachusetts and the rest of the country less well off. This is what would happen in Europe absent the Euro's constraints.
We should be glad that the Euro provides those constraints and hope that the unified currency will survive the current stresses and strains and survive, like the dollar, for many centuries.
Sent to the Boston Globe
Without the dollar, Massachusetts could try to solve it's budget problems by devaluing its currency thereby reducing imports from other states and increasing exports to those states.
Alas, other states would probably reciprocate or add tariff barriers thereby making both Massachusetts and the rest of the country less well off. This is what would happen in Europe absent the Euro's constraints.
We should be glad that the Euro provides those constraints and hope that the unified currency will survive the current stresses and strains and survive, like the dollar, for many centuries.
Sent to the Boston Globe
Greek Wealth Is Everywhere But Tax Forms
Before we sneer too much at those Greeks who, to avoid taxes, failed to report that their homes had swimming pools, we should look at our own behavior (New York Times, May 2, 2010: A1).
I do not volunteer to pay the Massachusetts Tax at the 5.85% instead of 5.3%. Many companies have moved their headquarters as well as their production facilities offshore in order to reduce their taxes.
I almost wrote "tax burden" because that is the way we see taxes rather than, what they really are, the cost of civilization.
Sent to New York Times
I do not volunteer to pay the Massachusetts Tax at the 5.85% instead of 5.3%. Many companies have moved their headquarters as well as their production facilities offshore in order to reduce their taxes.
I almost wrote "tax burden" because that is the way we see taxes rather than, what they really are, the cost of civilization.
Sent to New York Times
The Data Driven Life
In his piece on "The Data Driven Life," Gary Wolf claims (pp. 40-41) to have written a long article (New York Times Magazine, May 2, 2010: 38-45).
How long?
Sent to New York Times Magazine
How long?
Sent to New York Times Magazine
The Euro Trap
The constraints that the Euro places on European policy described and decried by Paul Krugman (The Euro Trap, New York Times, April 30, 2010) are exactly the same as the constraints placed upon the regions and states of the United States by our acceptance of the US dollar as a common currency.
Without the dollar, Massachusetts could solve it's budget problems by devaluing its currency thereby reducing imports from other states and increasing exports to those states.
Alas other states would probably reciprocate or add tariff barriers thereby making both Massachusetts and the rest of the country less well off.
We should be glad that the Euro provides those constraints and hope that the unified currency will survive the current stresses and strains and survive, like the dollar, for many centuries.
Sent to New York Times
Without the dollar, Massachusetts could solve it's budget problems by devaluing its currency thereby reducing imports from other states and increasing exports to those states.
Alas other states would probably reciprocate or add tariff barriers thereby making both Massachusetts and the rest of the country less well off.
We should be glad that the Euro provides those constraints and hope that the unified currency will survive the current stresses and strains and survive, like the dollar, for many centuries.
Sent to New York Times
The coming catastrophe
Neither Scot Lehigh, nor Penner and Reischauer whose work he reports, seem aware of the most sensible form for future taxation: a Tobin tax on financial transactions (The coming catastrophe, Boston Globe, April 30, 2010: A9).
This has many advantages:
It can be harmonized with similar taxes at the international level, to avoid firms' jurisdiction shopping.
It taxes activities that represent the bulk of the US economy: 61% at the latest count.
By increasing transaction costs it will reduce the kind of speculative activity that brought our economy to its knees, but if set at a low rate will not inhibit normal business transactions.
Part of the proceeds from the tax can be used to pay the Credit Rating Agencies and thus remove the horrendous conflicts of interest they currently experience.
Multiple wins, I'd have thought.
Sent to Boston Globe
This has many advantages:
It can be harmonized with similar taxes at the international level, to avoid firms' jurisdiction shopping.
It taxes activities that represent the bulk of the US economy: 61% at the latest count.
By increasing transaction costs it will reduce the kind of speculative activity that brought our economy to its knees, but if set at a low rate will not inhibit normal business transactions.
Part of the proceeds from the tax can be used to pay the Credit Rating Agencies and thus remove the horrendous conflicts of interest they currently experience.
Multiple wins, I'd have thought.
Sent to Boston Globe
Sunday, April 25, 2010
Paedophile Crisis
A deeply dysfunctional organization is one that does not learn from its mistakes.
In 1993, Cardinal Bernard Law of Boston, breaking the 7th commandment, called down the wrath of God on the Boston media for outing a paedophile priest in Fall River, MA.
Today, the Vatican excoriates the New York Imes for its coverage of stories that bring the shame of near involvement in a new coverup to the Pope.
The Vatican is simply and sadly repeating a losing course of action.
Sent to New York Times
Sent to New York Times
Not a race for the top
It is unconscionable that the Department of Education is rating states' 'race to the top' plans on whether or not states encourage schools to pay teachers on the basis of student performance (Not a race to the top for Massachusetts, Boston Globe April 6, 2010).
As an organizational psychologist I am well aware that the nature of the effect of extrinsic motivation (pay on the basis of childrens' performance) on intrinsic motivation (the joy of teaching) is controversial. In some studies there is an undermining effect, in others there is not. As far as I know the large scale study of the effectiveness of pay for performance in the New York City School System has not yet reported any long term results.
For an administration dedicated to using the best science available, the decision favoring pay for performance for teachers seems premature.
Sent to Boston Globe
Sent to Boston Globe
Deficits
Where was Senator Tom Coburn when we used (and are using) deficits to pay for the Iraq war (9200 in Bay State lose access to jobless benefits, Boston Globe, April 6, 2010: A2).
Surely, deficits for the reducing the trauma of unemployment is as justifiable as deficits to pay for war.
\perhaps if we drafted the unemployed, Senator Coburn would approve of those payments -- but then of course there would be no work for the contractors who make such generous contributions to political campaign funding.
Sent to Boston Globe
Sent to Boston Globe
Who Needs Wall Street?
Your correspondent, Roger Lowenstein, speaks favorably about the imposition of a Tobin Tax on financial transactions (New York Times Magazine, March 21st., 2010: 15-16).
This has two advantages. Government should tax where the money is. There is lots of it sloshing around.
Second, a first call on the funds raised should be to pay the rating agencies for their work. Right now, the rating agencies are paid by the very firms/issuers they rate. This is a major conflict of interest as the rating agencies are pressured by their paymasters to give high ratings.
In such a system, part of the fee could be tied to achievement: that is the medium and long term accuracy of their ratings. This would encourage the agencies to give accurate ratings.
It is a great shame that Congress has not yet moved to impose such a tax which would help reduce the deficit and help keep markets honest.
Sent to New York Times Magazine
This has two advantages. Government should tax where the money is. There is lots of it sloshing around.
Second, a first call on the funds raised should be to pay the rating agencies for their work. Right now, the rating agencies are paid by the very firms/issuers they rate. This is a major conflict of interest as the rating agencies are pressured by their paymasters to give high ratings.
In such a system, part of the fee could be tied to achievement: that is the medium and long term accuracy of their ratings. This would encourage the agencies to give accurate ratings.
It is a great shame that Congress has not yet moved to impose such a tax which would help reduce the deficit and help keep markets honest.
Sent to New York Times Magazine
Rating Agencies
We need action, not studies (As Lawmakers Grapple With Financial Oversight, They Call For More Studies, New York Times, March 17, 2010: B3).
It is clear that we must remove the conflicts of interest currently existing in the way that Rating Agencies are compensated.
Let the agencies' paymasters be the investors. Each financial transaction would have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress has not yet moved to correct this situation.
Sent to New York Times
It is clear that we must remove the conflicts of interest currently existing in the way that Rating Agencies are compensated.
Let the agencies' paymasters be the investors. Each financial transaction would have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress has not yet moved to correct this situation.
Sent to New York Times
Friday, April 23, 2010
Federal Positions Unfilled
Article in Transforming Management. Manchester Business School, April 19th., 2010
Thursday, March 4, 2010
How the GOP Can Fix Health Care
The GOP must be truly bereft of ideas on health care if the commentary on your op-ed page is the best they can do (How the GOP Can Fix Health Care, New York Times, February 22, 2010: A17).
Former senator Bill Frist starts out strongly advocating that we pay for quality care. However he fails on the crucial tests: How is quality to be assessed; How much do we pay for it? Instead he segues into a non-sequitur advocating decentralization of payment decisions. As far as I can tell he means that "he who wields the scalpel should control the purse," which may be OK for the surgeon but may not be for the other 55 members of the team.
Mr. McClellan has some sensible ideas around Medicare; but why didn't he implement them when he was in charge of Medicare?
Mr. Pinkerton has little to offer; after all most medical research is already funded through the research councils using Federal Government funding.
One of Mr. Kolb's suggestions (health exchanges and ending tax exemptions) has already been rejected by the GOP.
Mr. Gingrich is focused on tort reform; but states that already engage in malpractice damage limitation do not have lower health costs than those who do not.
I do hope that better ideas emerge at next week's conference on health care.
Sent to New York Times
Former senator Bill Frist starts out strongly advocating that we pay for quality care. However he fails on the crucial tests: How is quality to be assessed; How much do we pay for it? Instead he segues into a non-sequitur advocating decentralization of payment decisions. As far as I can tell he means that "he who wields the scalpel should control the purse," which may be OK for the surgeon but may not be for the other 55 members of the team.
Mr. McClellan has some sensible ideas around Medicare; but why didn't he implement them when he was in charge of Medicare?
Mr. Pinkerton has little to offer; after all most medical research is already funded through the research councils using Federal Government funding.
One of Mr. Kolb's suggestions (health exchanges and ending tax exemptions) has already been rejected by the GOP.
Mr. Gingrich is focused on tort reform; but states that already engage in malpractice damage limitation do not have lower health costs than those who do not.
I do hope that better ideas emerge at next week's conference on health care.
Sent to New York Times
Report Faults 2 Who Wrote Terror Memos
Shame on your headline writer (Report Faults 2 Who Wrote Terror Memos, New York Times, February 20, 2010: A1, A9). They were Torture Memos not Terror Memos.
Shame on the Justice Department for arguing that the context of the times justified sloppy legal arguments. It is when we are under attack that we should hew most strongly to our ideals.
Sent to New York Times
Shame on the Justice Department for arguing that the context of the times justified sloppy legal arguments. It is when we are under attack that we should hew most strongly to our ideals.
Sent to New York Times
Dr. Fitzgerald and Mr. Enrich do not go far enough (State should yell "cut" to film tax credit, Boston Globe, February 19, 2010: A11).
Giving tax breaks to big business to encourage them to locate in a given area is a beggar-thy-neighbor proposition. Often, as in New London, CT, the jobs never materialize.
Right now a bill going through the legislature is proposing an inter-state compact to bypass the Electoral College to ensure that the President is elected by all the people. We urgently need an inter-state, inter-city, inter-town compact that will disallow these ridiculous handouts to the wealthy top managers of corporations seeking tax breaks.
Where do you think that $4m or $10m or $20m tax rebate will go: right into the pockets of the CEO and top management through their profit related bonuses.
It is past time to say "No" to the corporate welfare bums (Quote from former Canadian New Democratic Party leader, David Lewis).
Sent to Boston Globe
Giving tax breaks to big business to encourage them to locate in a given area is a beggar-thy-neighbor proposition. Often, as in New London, CT, the jobs never materialize.
Right now a bill going through the legislature is proposing an inter-state compact to bypass the Electoral College to ensure that the President is elected by all the people. We urgently need an inter-state, inter-city, inter-town compact that will disallow these ridiculous handouts to the wealthy top managers of corporations seeking tax breaks.
Where do you think that $4m or $10m or $20m tax rebate will go: right into the pockets of the CEO and top management through their profit related bonuses.
It is past time to say "No" to the corporate welfare bums (Quote from former Canadian New Democratic Party leader, David Lewis).
Sent to Boston Globe
A Hand in a House of Cards
The legal efforts to punish the rating agencies are insufficient (A Hand in a House of Cards, New York Times, February 16, 2009. We need to do something so that going forward the agencies' conflicts of interest are reduced.
Let the agencies' paymasters be the investors. Each financial transaction would have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress has not yet moved to correct this situation.
Sent to the New York Times
Let the agencies' paymasters be the investors. Each financial transaction would have a small fee attached to it, like a Tobin tax. These fees would be used to pay the rating agencies; to keep them honest, a portion of the pay would be tied to achievement, that is the medium and long term accuracy of their ratings.
Such a system would eliminate the current conflict of interest faced by the rating agencies who are paid by the very firms/issuers they rate.
It is a great shame that Congress has not yet moved to correct this situation.
Sent to the New York Times
Liberty Mutual sets Hub expansion
I sent this letter to Mr. Edmund Kelly CEO of Liberty Mutual today.
I hope you will publicize it.
Since 1964 I have been a policy holder and owner of Liberty Mutual. I am distressed that at this difficult time for our cities and the Commonwealth our company is seeking $16M in tax relief from the City of Boston to help fund the expansion of our head office.
Think about the opportunity cost of that tax relief to the city in terms of teacher salaries, help to the disadvantaged, policing, and maintenance of the city's infrastructure.
I am ashamed that a profitable company like ours should come begging to the city which is facing major financial constraints. We need to pay our fair share. We had earnings of $259 million in the last quarter alone. We can afford to do the right thing.
I hope you will withdraw your request. It is the responsible thing to do.
Sent to Boston Globe
I hope you will publicize it.
Since 1964 I have been a policy holder and owner of Liberty Mutual. I am distressed that at this difficult time for our cities and the Commonwealth our company is seeking $16M in tax relief from the City of Boston to help fund the expansion of our head office.
Think about the opportunity cost of that tax relief to the city in terms of teacher salaries, help to the disadvantaged, policing, and maintenance of the city's infrastructure.
I am ashamed that a profitable company like ours should come begging to the city which is facing major financial constraints. We need to pay our fair share. We had earnings of $259 million in the last quarter alone. We can afford to do the right thing.
I hope you will withdraw your request. It is the responsible thing to do.
Sent to Boston Globe
Gentle Diplomacy with Iran will not Work
Mr. Jacoby may come to regret what he wishes for: an armed attack on Iran (Gentle diplomacy with Iran will not work, Boston Globe, February 10, 2010).
Neither Mr. Jacoby nor I know what is going on in behind the scenes diplomacy, so to label it a failure is premature and unhelpful. What is clear is that like the Cold War Soviet Union, there are hawks and doves in Tehran; a fact never mentioned by Mr. Jacoby. That the mixed signals coming out of Tehran about their nuclear program provide an opportunity for skillful diplomacy to reinforce the doves and undermine the hawks in order to reach an acceptable agreement.
It seems to me that opening a third war front by an attack on Iran would be virtually impossible. Yes, an initial attack might be successful but what of the aftermath?
I am one with Winston Churchill on this one: "Jaw-Jaw is better than War-War."
Neither Mr. Jacoby nor I know what is going on in behind the scenes diplomacy, so to label it a failure is premature and unhelpful. What is clear is that like the Cold War Soviet Union, there are hawks and doves in Tehran; a fact never mentioned by Mr. Jacoby. That the mixed signals coming out of Tehran about their nuclear program provide an opportunity for skillful diplomacy to reinforce the doves and undermine the hawks in order to reach an acceptable agreement.
It seems to me that opening a third war front by an attack on Iran would be virtually impossible. Yes, an initial attack might be successful but what of the aftermath?
I am one with Winston Churchill on this one: "Jaw-Jaw is better than War-War."
Baker Left Facts Behind
It seems that Mr. Baker has been quick to pick up the first rule in the Republican play-book: lie and then retract (Baker left facts behind, Boston Globe, February 7, 2010: B1).
It was after all George H. W. Bush who famously said during his campaign for President: "Everyone remembers the lie, no one remembers the retraction."
It is going to be a long campaign. Let us hope it is not too nasty.
Sent to Boston Globe
It was after all George H. W. Bush who famously said during his campaign for President: "Everyone remembers the lie, no one remembers the retraction."
It is going to be a long campaign. Let us hope it is not too nasty.
Sent to Boston Globe
Sunday, February 14, 2010
Op Ed: Unemployment and Massachusetts Voting Patterns.
Cambridge Chronicle Op Ed
Here is the bottom line:
Boston (Suffolk County) with its large black population and relatively low unemployment was immune to Brown's appeal. The I-495 belt was attracted to Brown even in the counties with low unemployment.
However for all counties outside the I-495 belt, there was a strong relation between unemployment and Brown's appeal. Where unemployment was less than 8.5%, Brown only got about 38% of the vote. On the other hand, when unemployment was over 8.5%, Brown's appeal was very high, gaining about 60% of the vote. Eight and a half percent unemployment seems to be a tipping point.
Here is the bottom line:
Boston (Suffolk County) with its large black population and relatively low unemployment was immune to Brown's appeal. The I-495 belt was attracted to Brown even in the counties with low unemployment.
However for all counties outside the I-495 belt, there was a strong relation between unemployment and Brown's appeal. Where unemployment was less than 8.5%, Brown only got about 38% of the vote. On the other hand, when unemployment was over 8.5%, Brown's appeal was very high, gaining about 60% of the vote. Eight and a half percent unemployment seems to be a tipping point.
Tuesday, February 9, 2010
Drving and Texting
It would be good if our legislators focused on the science relevant to cell phone use rather than just the motor coordination required to text or dial a phone while driving (Mass. House OK's driving safety bill, Boston Globe, February 5, 2010: B1).
The science in unequivocal: a large part of the danger in cell phone use while driving is due to the concentration required while talking with a person on the other end of the phone. It is unequivocally not the same as chatting to a passenger in the car.
A passenger is also attuned to what is going on in the driver's environment so can adjust speech patterns in line with traffic flows and emergencies. A person at the other end of a telephone conversation has no such access to changes in the driver's environment.
We just do not have enough cognitive resources to attend to a conversation and to the unexpected changes that occur on the most routine of drives.
We must ban cell phones while driving. Period. Though I suppose this is a step in the right direction.
Sent to Boston Globe
The science in unequivocal: a large part of the danger in cell phone use while driving is due to the concentration required while talking with a person on the other end of the phone. It is unequivocally not the same as chatting to a passenger in the car.
A passenger is also attuned to what is going on in the driver's environment so can adjust speech patterns in line with traffic flows and emergencies. A person at the other end of a telephone conversation has no such access to changes in the driver's environment.
We just do not have enough cognitive resources to attend to a conversation and to the unexpected changes that occur on the most routine of drives.
We must ban cell phones while driving. Period. Though I suppose this is a step in the right direction.
Sent to Boston Globe
No sanctions for authors of torture memos
Your article on the decision not to prosecute John Yoo said that the statute of limitations had expired for his reprehensible conduct (No sanctions for authors of torture memos, Boston Globe, February 1, 2010).
I cannot believe that there is any statute of limitations for a person who advocated war crimes (torture).
Sent to Boston Globe
I cannot believe that there is any statute of limitations for a person who advocated war crimes (torture).
Sent to Boston Globe
Obama Centralizes
You report that following the loss of a Senate seat in Massachusetts, President Obama is moving to centralize next fall's election strategy (Obama moves to centralize Control Over Party Strategy, New York Times, January 23, 2010).
That is seem to me to be a big mistake. He has forgotten the wisdom of Tip O'Neill's "All politics is local."
The issues that candidates face in different parts of the country, and even in different parts of the same state, are unique and local. Such differences cannot be coordinated by a central office.
Decentralization is what is needed.
Sent to New York Times
That is seem to me to be a big mistake. He has forgotten the wisdom of Tip O'Neill's "All politics is local."
The issues that candidates face in different parts of the country, and even in different parts of the same state, are unique and local. Such differences cannot be coordinated by a central office.
Decentralization is what is needed.
Sent to New York Times
Ben Schott Credit Ratings
You can believe those ratings if you like (Op-Chart, February 3, 2010: A23).
But remember these were the rating agencies that brought you AAA ratings on derivatives based on sub-prime mortgages.
Sent to New York Times
But remember these were the rating agencies that brought you AAA ratings on derivatives based on sub-prime mortgages.
Sent to New York Times
Thursday, February 4, 2010
How to Keep Scott Brown OFF Balance
I was wondering how to keep Scott Brown off balance for the next three years. Here are the results of my Monday morning fantasy all based on his advocacy of water-boarding to extract information from terror suspects.
1. Surely he cannot be allowed to take the Senate oath to uphold the constitution when he is on record as advocating actions that surely contravene the 8th amendment on cruel and unusual punishment.
2. For his statements on water-boarding, the US attorney for Massachusetts should bring a prosecution for advocating criminal activity. Water-boarding is contrary to the Geneva Convention and US anti-torture laws.[it would be sweet if Martha Coakley could have been prosecuting officer, but I think it is a federal crime that I suspect him of.]
3. The Massachusetts bar should initiate proceedings to disbar lawyer Brown for his advocacy of criminal activity.
4. As a Lt-Colonel in the National Guard, Brown is subject to military discipline. The Judge Advocate General should bring Court-Martial proceedings against Brown for advocating interrogation techniques that are well outside the military's guidelines.
I think the best chance is #4. #1 is untested and I doubt the Senate would want to create a precedent. If federal prosecutors (#2) [also this is probably protected under the first amendment as he is not advocating actions that would put someone in immediate danger] and bar associations (#3) have taken no action against the developers of the torture memomrandums, then there is little chance of disbarring Brown. However many have been Court-Martialed for engaging in torture and some have been Court-Martialed for permitting it on their watch, so that might have a small chance of success.
OK. Back to Monday morning reality. Brown will take his seat today.
1. Surely he cannot be allowed to take the Senate oath to uphold the constitution when he is on record as advocating actions that surely contravene the 8th amendment on cruel and unusual punishment.
2. For his statements on water-boarding, the US attorney for Massachusetts should bring a prosecution for advocating criminal activity. Water-boarding is contrary to the Geneva Convention and US anti-torture laws.[it would be sweet if Martha Coakley could have been prosecuting officer, but I think it is a federal crime that I suspect him of.]
3. The Massachusetts bar should initiate proceedings to disbar lawyer Brown for his advocacy of criminal activity.
4. As a Lt-Colonel in the National Guard, Brown is subject to military discipline. The Judge Advocate General should bring Court-Martial proceedings against Brown for advocating interrogation techniques that are well outside the military's guidelines.
I think the best chance is #4. #1 is untested and I doubt the Senate would want to create a precedent. If federal prosecutors (#2) [also this is probably protected under the first amendment as he is not advocating actions that would put someone in immediate danger] and bar associations (#3) have taken no action against the developers of the torture memomrandums, then there is little chance of disbarring Brown. However many have been Court-Martialed for engaging in torture and some have been Court-Martialed for permitting it on their watch, so that might have a small chance of success.
OK. Back to Monday morning reality. Brown will take his seat today.
Sunday, January 31, 2010
Wednesday, January 27, 2010
Tuesday, January 26, 2010
Treasury Weighs Fix to Foreclosure Program
A sure sign of incompetence is to continue to follow a losing course of action, only more so. That is what the Treasury is doing in its futile attempts to stem foreclosures (Treasury Weighs Fix to Foreclosure Program, New York Times, Business Section, January 22, 2010).
These attempts to vary interest rates or to write ff value are doomed to failure. The problem is structural: the servicers do not own the mortgages and only the owners can agree to modify the mortgages. As the mortgages have been sliced and diced into a multiplicity of tiny tranches, finding the owners is very difficult and getting all owners of a particular mortgage to agree to modifications is virtually impossible.
There is however an easy solution if only the Treasury could think outside its focus on mortgage modification. The solution is for the treasury to join with each troubled homeowner in a shared appreciation mortgage (SAM). The mortgage value and interest rate are unchanged: the homeowner pays what he or she can and the government picks up the balance. Over time, both homeowner and government build up equity in the home. Over time, the housing market is stabilized. Owners stay in their homes, lives and neighborhoods are not disrupted. I call that a win, win, win situation.
Sent to New York Times
These attempts to vary interest rates or to write ff value are doomed to failure. The problem is structural: the servicers do not own the mortgages and only the owners can agree to modify the mortgages. As the mortgages have been sliced and diced into a multiplicity of tiny tranches, finding the owners is very difficult and getting all owners of a particular mortgage to agree to modifications is virtually impossible.
There is however an easy solution if only the Treasury could think outside its focus on mortgage modification. The solution is for the treasury to join with each troubled homeowner in a shared appreciation mortgage (SAM). The mortgage value and interest rate are unchanged: the homeowner pays what he or she can and the government picks up the balance. Over time, both homeowner and government build up equity in the home. Over time, the housing market is stabilized. Owners stay in their homes, lives and neighborhoods are not disrupted. I call that a win, win, win situation.
Sent to New York Times
Studies of Medical Marijuana Discouraged
Whatever happened to this administration's commitment to scientific research. You report that government bureaucracies are preventing Dr. Lyle Craker cannot get a license to grow various types of marijuana so that he can study their effectiveness (Researchers Find Studies of Medical Marijuana Discouraged, New York Times, January 19, 2010).
WSe cannot have science based medicine unless scientists ae allowed to do the science.
The message does not have seemed to reach the National Institute for Drug Abuse and the Federal Drug Administration that we are in a new era: an era in which scientific research is to be encouraged not discouraged.
Too many of the Bush norms seem to continue in effect.
Sent to New York Times
WSe cannot have science based medicine unless scientists ae allowed to do the science.
The message does not have seemed to reach the National Institute for Drug Abuse and the Federal Drug Administration that we are in a new era: an era in which scientific research is to be encouraged not discouraged.
Too many of the Bush norms seem to continue in effect.
Sent to New York Times
Paying Kids to Stay in School
David Whelan and Stuart Ablon argue that we should not pay kids to stay in school because adding extrinsic rewards (pay) to an intrinsically interesting activity (education) will undermine kids' interest in education (Letters, Boston Globe, January 17, 2010).
Their argument is flawed. The conditions under which intrinsic motivation is undermined by extrinsic rewards are quite subtle. If kids are rewarded for academic achievement, then paying for achievement will likely undermine the intrinsic motivation to achieve. However, if kids are paid for simply attending school, (that is for engaging in the activity rather than striving to accomplish excellence in the activity) then there is not likely to be an undermining effect (that is kids will still want to attend school).
Therefore I see no danger in the proposal (Lawrence Harmon, Boston Globe, January 12, 2010). In fact there will be major benefits to children whose life circumstances are characterized by poverty and the need to help support a family during their teen years.
On the other hand, I would argue that paying teachers on the basis of their students' achievement (grades and test scores) is very likely to reduce the teachers' intrinsic interest in the craft of teaching.
However I do agree with Whelan and Ablon that focusing on the barriers to a student's attendance at school is the key to developing appropriate solutions to the problems .
Sent to Boston Globe
Their argument is flawed. The conditions under which intrinsic motivation is undermined by extrinsic rewards are quite subtle. If kids are rewarded for academic achievement, then paying for achievement will likely undermine the intrinsic motivation to achieve. However, if kids are paid for simply attending school, (that is for engaging in the activity rather than striving to accomplish excellence in the activity) then there is not likely to be an undermining effect (that is kids will still want to attend school).
Therefore I see no danger in the proposal (Lawrence Harmon, Boston Globe, January 12, 2010). In fact there will be major benefits to children whose life circumstances are characterized by poverty and the need to help support a family during their teen years.
On the other hand, I would argue that paying teachers on the basis of their students' achievement (grades and test scores) is very likely to reduce the teachers' intrinsic interest in the craft of teaching.
However I do agree with Whelan and Ablon that focusing on the barriers to a student's attendance at school is the key to developing appropriate solutions to the problems .
Sent to Boston Globe
Massachusetts Model
Republicans are looking at the Massachusetts race as a model for the GOP campaign throughout the country (Boston Globe, January 15: A1, A4).
It is, I hope, a failing model. GOP operatives argue that "the health care bill is a big empty vessel into which people can assign their pet peeves or anger." Scott Brown is an empty suit onto which voters can project their dearest wishes. He has little in the way of legislative accomplishment in Massachusetts.
Of course there is a better way to reform health care, but Scott Brown does not tell us what that is, he just mouths the platitude. The real question is,"Is there a politically feasible better way?" I think not. As Congress is so beholden to the lobbyists for all parties in the health care industry (except the patients).
Reform in our political system may have to precede reform in those areas where we need it most: health care, banking, and the alleviation of poverty.
Sent to Boston Globe
It is, I hope, a failing model. GOP operatives argue that "the health care bill is a big empty vessel into which people can assign their pet peeves or anger." Scott Brown is an empty suit onto which voters can project their dearest wishes. He has little in the way of legislative accomplishment in Massachusetts.
Of course there is a better way to reform health care, but Scott Brown does not tell us what that is, he just mouths the platitude. The real question is,"Is there a politically feasible better way?" I think not. As Congress is so beholden to the lobbyists for all parties in the health care industry (except the patients).
Reform in our political system may have to precede reform in those areas where we need it most: health care, banking, and the alleviation of poverty.
Sent to Boston Globe
This Year's Housing Crisis
Your editorial continues to propose inside the box remedies that are proving unsuccessful (This Year's Housing Crisis, New York Times, January 5, 2010: A16). We need a more radical approach.
The truth is that it is very difficult to modify the terms (principal or interest rate) of a mortgage loan in a world in which mortgages have been diced and sliced into many derivative products. It is impossible or at least very difficult to identify the owners who will have to agree to the terms of any modifications.
There is a simple, albeit expensive, alternative: the Shared Appreciation Mortgage. With these, government could partner with homeowners having trouble paying the full mortgage: the homeowners would pay what they can, the government would pick up the rest. Each would build up equity in the home in proportion to their contribution. Over time, as housing prices recovered, the government might even make money in the deal.
This is solution that only requires agreement between the government and the homeowner; the mortgage servicers and the mortgage holders continue to get the original earnings stream; the homeowners keep their homes; neighborhoods are not devastated by multiple foreclosures; towns and ciites continue to receive a stream of property taxes.
It is sad to think that if this strategy had been followed when the housing markets began to collapse, SAMs would have sustained the value of the derivatives so big banks would not have needed direct bailouts. Wall Street and Main Street would have both been helped with the same money.
Sent to New York Times
The truth is that it is very difficult to modify the terms (principal or interest rate) of a mortgage loan in a world in which mortgages have been diced and sliced into many derivative products. It is impossible or at least very difficult to identify the owners who will have to agree to the terms of any modifications.
There is a simple, albeit expensive, alternative: the Shared Appreciation Mortgage. With these, government could partner with homeowners having trouble paying the full mortgage: the homeowners would pay what they can, the government would pick up the rest. Each would build up equity in the home in proportion to their contribution. Over time, as housing prices recovered, the government might even make money in the deal.
This is solution that only requires agreement between the government and the homeowner; the mortgage servicers and the mortgage holders continue to get the original earnings stream; the homeowners keep their homes; neighborhoods are not devastated by multiple foreclosures; towns and ciites continue to receive a stream of property taxes.
It is sad to think that if this strategy had been followed when the housing markets began to collapse, SAMs would have sustained the value of the derivatives so big banks would not have needed direct bailouts. Wall Street and Main Street would have both been helped with the same money.
Sent to New York Times
Saturday, January 23, 2010
Wednesday, January 20, 2010
Response to McCain petition to seat Brown
Dear Senator:
I received your email today asking me to sign a petition to seat Senator-Elect Brown as soon as possible.
First you must understand that the Massachusetts Secretary of State is bound by laws (not rules or conventions) that require delay in certifying an election until all votes have been counted.
Second, the remedy lies in your hands, you could I suppose suspend the Senate rules or convention that requires certification before seating a Senator elect.
As you were the standard bearer of the borrow and spend Republicans in the last Presidential election, complaints about "out of control spending" by the Democrats do little to advance your cause.
Finally as you have been the recipient of Government health care for most of your career, I am offended by your complaint about government interference in health care. Shame on you!
Sent to Senator John McCain, January 20, 2010
I received your email today asking me to sign a petition to seat Senator-Elect Brown as soon as possible.
First you must understand that the Massachusetts Secretary of State is bound by laws (not rules or conventions) that require delay in certifying an election until all votes have been counted.
Second, the remedy lies in your hands, you could I suppose suspend the Senate rules or convention that requires certification before seating a Senator elect.
As you were the standard bearer of the borrow and spend Republicans in the last Presidential election, complaints about "out of control spending" by the Democrats do little to advance your cause.
Finally as you have been the recipient of Government health care for most of your career, I am offended by your complaint about government interference in health care. Shame on you!
Sent to Senator John McCain, January 20, 2010
Sunday, January 17, 2010
Questions for Big Bankers
Your questioners omitted one important domain: the role of the rating agencies (Questions for the Big Bankers, January 13, 2010: A27).
We need to ask:
1. What role did the rating agencies play in the collapse?
2. How did the way rating agencies are compensated affect their ratings?
3. Did your bank go rating agency shopping to get good ratings for junk securities?
4. If a small financial transactions tax was instituted to provide an alternative source of payment to rating agencies (instead of being paid by the issuer of the securities), would your bank support that? Why or why not?
Respectfully submitted
Sent to New York Times
We need to ask:
1. What role did the rating agencies play in the collapse?
2. How did the way rating agencies are compensated affect their ratings?
3. Did your bank go rating agency shopping to get good ratings for junk securities?
4. If a small financial transactions tax was instituted to provide an alternative source of payment to rating agencies (instead of being paid by the issuer of the securities), would your bank support that? Why or why not?
Respectfully submitted
Sent to New York Times
Roger Martin on Leadership
Roger Martin (Leading into 2010) is correct that coordination costs are a major expense in large organizations.
However, downsizing is not the answer. The same work has to be done and the coordination costs between an organization and its outsourced suppliers are much higher than the internal costs were.
Downsizing only works if you cut down on the amount or types of business you do; it does not work if one tries to do the same amount of work with fewer people.
Sent to Washington Post
However, downsizing is not the answer. The same work has to be done and the coordination costs between an organization and its outsourced suppliers are much higher than the internal costs were.
Downsizing only works if you cut down on the amount or types of business you do; it does not work if one tries to do the same amount of work with fewer people.
Sent to Washington Post
Connect the dots
I was going to submit a letter to the editor about the great difficulty security services have in distinguishing relevant information from the irrelevant.
I don't need to: Wasserman's cartoon [Ed: Actually it was Toles, not Wasserman] today (January 11, 2009) says it all.
Thank you.
Sent to Boston Globe
I don't need to: Wasserman's cartoon [Ed: Actually it was Toles, not Wasserman] today (January 11, 2009) says it all.
Thank you.
Sent to Boston Globe
Lax Oversight
Mr. Bernanke may be correct that lax oversight was responsible for the housing bubble (Lax Oversight Caused Bubble, Bernanke Says, New York Times, January 4, 2010: A1, A11).
But what caused the lax oversight? It was a lack of political will. The Clinton and Bush administrations were uninterested in regulation and did not ensure that the regulators did their jobs properly. As a result we have had economic collapse and the destruction of several asset classes.
Given the shilly-shallying going on in Congress with respect to developing a better regulatory regime and the presence of two former deregulators in high level economic positions in the Obama administration (Geithner and Summers), I despair that we will find the necessary political will any time soon.
Sent to New York Times
But what caused the lax oversight? It was a lack of political will. The Clinton and Bush administrations were uninterested in regulation and did not ensure that the regulators did their jobs properly. As a result we have had economic collapse and the destruction of several asset classes.
Given the shilly-shallying going on in Congress with respect to developing a better regulatory regime and the presence of two former deregulators in high level economic positions in the Obama administration (Geithner and Summers), I despair that we will find the necessary political will any time soon.
Sent to New York Times
Yes it was torture
The Obama Justice Department has "urged the Supreme Court not to grant the victims' appeal because the illegality of torture was not 'clearly established' [between 2002 and 2004]" (Yes, It was Torture, and Illegal, New York Times, January 4, 2010: A16).
This bizarre position is similar to the continued obdurate defense put forth by the department of the pernicious States Secrets Privilege.
As a student of bureaucracy, I can only attribute these unreasonable positions to the continued lack of full time political appointees at senior levels in the department (e.g., Office of the Legal Counsel, Assistant Attorney General for Legal Policy). The present temporary incumbents seem to be continuing to use the Bush play book. It is time that they ceased to do so.
Sent to the New York Times
This bizarre position is similar to the continued obdurate defense put forth by the department of the pernicious States Secrets Privilege.
As a student of bureaucracy, I can only attribute these unreasonable positions to the continued lack of full time political appointees at senior levels in the department (e.g., Office of the Legal Counsel, Assistant Attorney General for Legal Policy). The present temporary incumbents seem to be continuing to use the Bush play book. It is time that they ceased to do so.
Sent to the New York Times
Limbaugh's Health Care (scroll down)
So Rush Limbaugh thinks there is nothing wrong with the American Health Care system (Limbaugh says heart health care system OK, Boston Globe, Saturday, January 2, 2010: A4). He is of course absolutely right; as long as you are rich.
In fact America has two health care systems: one for the rich and middle class; the other for the poor -- and more of us are slipping out of the middle class every day.
It is this second, health care for the poor, system that gives us our appalling standing in the international public health statistics.
We need reform, preferably with a public option now. As a triple UK/Canadian/US citizen, I am not afraid of a public option or even a single payer system.
Sent to Boston Globe
In fact America has two health care systems: one for the rich and middle class; the other for the poor -- and more of us are slipping out of the middle class every day.
It is this second, health care for the poor, system that gives us our appalling standing in the international public health statistics.
We need reform, preferably with a public option now. As a triple UK/Canadian/US citizen, I am not afraid of a public option or even a single payer system.
Sent to Boston Globe
Monday, January 4, 2010
Limbaugh on Health Care
So Rush Limbaugh thinks there is nothing wrong with the American Health Care system (Limbaugh says heart health care system OK (Boston Globe, Saturday, January 2, 2010: A4). He is of course absolutely right; as long as you are rich.
In fact America has two health care systems: one for the rich and mddle class; the other for the poor -- and more of us are slipping out of the middle class every day.
It is this second, health care for the poor, system that gives us our appalling standing in the international public health statistics.
We need reform, preferably with a public option now. As a triple UK/Canadian/US citizen, I am not afraid of a public option or even a single payer system.
Sent to Boston Globe
In fact America has two health care systems: one for the rich and mddle class; the other for the poor -- and more of us are slipping out of the middle class every day.
It is this second, health care for the poor, system that gives us our appalling standing in the international public health statistics.
We need reform, preferably with a public option now. As a triple UK/Canadian/US citizen, I am not afraid of a public option or even a single payer system.
Sent to Boston Globe
Adding Injury to Injury
It is well known that lobbyists from the big pharmaceutical companies, the Insurance Companies, the for profit Hospital chains, and any rich stakeholder in the health care business are busy influencing legislators, pouring money into their campaign chests, and making sure that the forthcoming legislation reflects their interests.
Left out of the influential lobbies are the people who are actually paying for them: the ordinary people of America. Every time we buy an over the counter medicine, every time we fill a prescription, every time we pay a hospital bill, a tiny fraction of what we pay is allocated for lobbying by the businesses we patronize. Aggregated over hundreds of millions of transactions, that small fraction becomes the flood of corporate cash that finds itself in legislator's pockets.
Through our purchases, we are buying a health care bill that is flawed.
Just as in some jurisdictions union members have to ask that political contributions be deducted from their wages, as a customer or consumer I would like the right to withhold that fraction of my payment that goes to lobbying. If I had my way I would redirect it to charity.
At least then I would not be contributing to my own distress.
Sent to New York Times
I sent a more detailed letter to the Times later that week
The past six months have, in case we did not know already, demonstrated the malignant influence that corporate lobbying has had on legislation. It is time to call a halt.
Lobbyists are the cancers on the body politic; ordinary people cannot outspend them, but perhaps we can restrict their life blood but cutting the flow of money to them. This money comes from us, every penny of it. Every over-the-counter drug we buy, every prescription we fill, every hospital bill we pay has a fraction of a cent (a micro-cent) allocated by the companies to the lobbyists who have almost destroyed health care reform. Similarly every time we buy a gallon of gasoline we pay for the lobbyists who are impeding climate control. A micro-cent of every banking transaction we engage in goes to lobbyists who are destroying any chance we have of preventing the next big crash through sensible financial regulation. Over millions of people engaging in millions of transaction, the aggregation of these micro-cents turn into a flood of corporate cash that goes to the lobbyist and eventually. Ends up in the legislators' pockets. We pay them to advance their interests rather than ours.
In some jurisdictions, for Unions to raise funds for political purposes each individual member must specify that the money is to go for political purposes, otherwise an equivalent amount is given to charity. I propose that we insist that companies treat our micro-cents the same way.
I suggest an ongoing campaign to starve lobbyists of money. I intend to write to the companies with whom I do business that they divert the micro-cents from my purchases that would go to lobbyists to charity instead. After all, we are major stakeholders in their businesses; we have the upper hand; and we can go elsewhere if they refuse to comply.
Yes it is a quixotic and seemingly hopeless quest, but with the help of others, we can starve the lobbyists.
Remember that in 1971 Dr. Judah Folkman introduced the bizarre idea that cancer tumor growth could be inhibited by reducing the flow of blood to the cancerous tumor. Over the next 36 years he pursued the dream of curing cancer through the restriction of blood flow. He persevered despite skepticism from his colleagues. Finally in 2004 the FDA approved the use of cancer reducing drugs based on his research. So too, if others follow my example, we can starve the lobbyists of their life blood; let us hope it does not take 36 years.
Left out of the influential lobbies are the people who are actually paying for them: the ordinary people of America. Every time we buy an over the counter medicine, every time we fill a prescription, every time we pay a hospital bill, a tiny fraction of what we pay is allocated for lobbying by the businesses we patronize. Aggregated over hundreds of millions of transactions, that small fraction becomes the flood of corporate cash that finds itself in legislator's pockets.
Through our purchases, we are buying a health care bill that is flawed.
Just as in some jurisdictions union members have to ask that political contributions be deducted from their wages, as a customer or consumer I would like the right to withhold that fraction of my payment that goes to lobbying. If I had my way I would redirect it to charity.
At least then I would not be contributing to my own distress.
Sent to New York Times
I sent a more detailed letter to the Times later that week
The past six months have, in case we did not know already, demonstrated the malignant influence that corporate lobbying has had on legislation. It is time to call a halt.
Lobbyists are the cancers on the body politic; ordinary people cannot outspend them, but perhaps we can restrict their life blood but cutting the flow of money to them. This money comes from us, every penny of it. Every over-the-counter drug we buy, every prescription we fill, every hospital bill we pay has a fraction of a cent (a micro-cent) allocated by the companies to the lobbyists who have almost destroyed health care reform. Similarly every time we buy a gallon of gasoline we pay for the lobbyists who are impeding climate control. A micro-cent of every banking transaction we engage in goes to lobbyists who are destroying any chance we have of preventing the next big crash through sensible financial regulation. Over millions of people engaging in millions of transaction, the aggregation of these micro-cents turn into a flood of corporate cash that goes to the lobbyist and eventually. Ends up in the legislators' pockets. We pay them to advance their interests rather than ours.
In some jurisdictions, for Unions to raise funds for political purposes each individual member must specify that the money is to go for political purposes, otherwise an equivalent amount is given to charity. I propose that we insist that companies treat our micro-cents the same way.
I suggest an ongoing campaign to starve lobbyists of money. I intend to write to the companies with whom I do business that they divert the micro-cents from my purchases that would go to lobbyists to charity instead. After all, we are major stakeholders in their businesses; we have the upper hand; and we can go elsewhere if they refuse to comply.
Yes it is a quixotic and seemingly hopeless quest, but with the help of others, we can starve the lobbyists.
Remember that in 1971 Dr. Judah Folkman introduced the bizarre idea that cancer tumor growth could be inhibited by reducing the flow of blood to the cancerous tumor. Over the next 36 years he pursued the dream of curing cancer through the restriction of blood flow. He persevered despite skepticism from his colleagues. Finally in 2004 the FDA approved the use of cancer reducing drugs based on his research. So too, if others follow my example, we can starve the lobbyists of their life blood; let us hope it does not take 36 years.
Driving while Cell Phoning
Mr. Witonsky is wrong (Letters, New York Times, December 12, 2009: A34).
Using a voice-activated cell phone while driving is not the same thing as chatting with a passenger beside you.
When chatting with a passenger, that person is also aware of the road conditions, sensitive to unforeseen emergencies so will adjust whether or not he or she talks. The person at the other end of a cell phone conversations completely unaware of what is going on while one is driving so cannot adjust the pace of conversation as road conditions change.
The killer is the distracted attention of the driver, not whether the phone is hand held or fitted with some fancy new technology.
Sent to New York Times
--
Using a voice-activated cell phone while driving is not the same thing as chatting with a passenger beside you.
When chatting with a passenger, that person is also aware of the road conditions, sensitive to unforeseen emergencies so will adjust whether or not he or she talks. The person at the other end of a cell phone conversations completely unaware of what is going on while one is driving so cannot adjust the pace of conversation as road conditions change.
The killer is the distracted attention of the driver, not whether the phone is hand held or fitted with some fancy new technology.
Sent to New York Times
--
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