Monday, November 2, 2009

Yemen: Victim of the Green Revolution

One of the lead stories in the Sunday New York Times international section was titled “Thirsty Plant Dries Out Yemen.” It was about the cultivation of qat, a mildly narcotic plant that most Yemeni, both men and women, imbibe on a daily basis.

Yemen, the author notes in an aside, is a major provider of foot soldiers for Al Qaeda, and the implication is that Yemen’s deteriorating economy and environment, along with the scourge of drug use, is providing fertile ground for Al Qaeda recruiters.

True enough, but reading further into the article, we find the following deeper roots for Yemen’s current predicament:

“For millenniums, Yemen preserved traditions of careful water use. Farmers depended mostly on rainwater collection and shallow wells. In some areas they built dams, including the great Marib dam in northern Yemen, which lasted for more than 1,000 years until it collapsed in the sixth century A.D…But traditional agriculture began to fall apart in the 1960s after Yemen was flooded with cheap foreign grain, which put many farmers out of business. Qat began replacing food crops, and in the late 1960s, motorized drills began to proliferate, allowing farmers and villagers to pump water from underground aquifers much faster than it could be replaced through natural processes. The number of drills has only grown since they were outlawed in 2002.”

Proponents of neoliberal economic theory, with its emphasis on free trade and promoting the use of industrialized processes over traditional ones, often cite the “Green Revolution” of the 1960s as an unqualified success. The expansion of plantation style agriculture and the wide use of pesticides and herbicides, tractors, irrigation ditches, and single-crop plantings supposedly brought prosperity to the Third World.

Yemen, however, is an example of what went wrong. Traditional Yemeni farmers who had relied on rainwater collection and water conservation, who had grown drought tolerant plants to feed the population, were put out of business by cheap, imported grain. The only crop they could grow and make money from was qat. Qat, however, requires a lot of water. And so we have another example of the disastrous results of the Green Revolution.

Ironically, the World Bank is now trying to reintroduces drip irrigation and rainwater collection in Yemen, along with the cultivation of drought tolerant plants, but it’s an uphill struggle. We should keep in mind that it’s easier to preserve traditional agricultural practices than to reintroduce them after they’ve been decimated by the ravages of the free market.

And we should remember Yemen’s problems when big agribusiness companies like Monsanto point to the Green Revolution as a good reason for developing and releasing genetically-engineered crops into the environment without proper testing. While the Green Revolution may have been a bonanza for Monsanto, it has brought environmental destruction, poverty, drug use, and—as we now know—has contributed to the rise of Al Qaeda.

Source: “Thirsty Plant Dries Out Yemen,” Bryan Denton, New York Times, Sunday, 11/1/09.

Thursday, October 8, 2009

Slash Healthcare Costs, Tip #2: Ditch the Cell Phone (Before You Drive Into a Ditch)

The title says it all. Yes, researchers have studied the effects of cell phone use on your driving skills. They found that using a cell phone while driving is equivalent to having a blood alcohol level of 0.08%--the legal limit for driving under the influence of alcohol.

It’s also equivalent to having a couple of noisy kids in the backseat throwing their stuffed toys at you and screaming, “Mommy! Mommy! Bobby hit me!” It’s equivalent to eating a hamburger with one hand and sipping a soda with the other, or plucking your eyebrows, or checking your email on your crackberry, playing video games, listening to your IPod, or fiddling with your overpriced, underwhelming satellite navigation system—all things that people do every day while they’re behind the wheel: drive while distracted.

About 6,000 people die per year, every year from distracted driving—mostly because of cell phone use while driving. Tragically, it’s often not the cell phone user/driver who’s killed, but the pedestrian, bicyclist, passenger, or other driver who gets nailed by the thoughtless jerk who couldn’t wait to answer that text message or phone call.

Of course, most people involved in cell-phone-use-while-driving accidents aren’t killed outright. They’re injured and have to go to the hospital or see a doctor. They often end up needing a series of treatments for chronic pain, or neck or back injuries that can take years and endless physical therapy sessions and surgery to help them heal. If they fully heal, and many don’t.

Approximately 800,000 people every day drive with a cell phone in hand. The Insurance Institute says that it makes no difference whether you hold the cell phone in your hand or use a hands-free device; both are equally distracting. In fact, the hands-free device may be more dangerous, since it gives us a false sense of safety.

An easy way to save millions in healthcare costs each year would be for Congress to pass the bill introduced in the Senate by Charles Schumer (D-NY) and Amy Klobuchar (D-Minn) that would force states to pass laws banning driving while text messaging or risk losing 25% of their federal highway funding. Currently only 18 states ban text messaging while driving.

Only 7 states ban cell phone use in the car. The US public could save a lot of money passing a federal law that bans cell phone use while driving, except to allow drivers to dial 9-1-1 in case of an emergency.

Simple, yes, but is anyone proposing a bill? Hello? Is anyone there?

Tuesday, October 6, 2009

Sheila Bair's Big Gamble

Last week the FDIC shut down another three banks, bringing total bank failures in the US so far this year to 98. Last year there were 25, and in 2007, there were only 3.

The Federal Deposit Insurance Corp. is not just the government entity that insures your cash deposits in the bank; the FDIC also has the unenviable task of unwinding banks that have run up massive debts and have no cash on hand to pay them off or cover their customer’s needs. When too many customers (depositors) learn of the rickety state of their bank and line up to demand their money, it’s called a run on the bank. Runs can drain a bank down to nothing, and the FDIC has to make the call when it’s time to close the doors and sell off the remaining deposits and assets to another, healthier bank, thus avoiding a situation where the FDIC has to make good on all the remaining cash demands of the depositors and creditors of the bank long after all the cash has been drained away.

Unfortunately for the FDIC, the pool of healthy banks willing (and able) to buy up the assets of ailing banks has dwindled, leaving the FDIC with a lot of assets on its hands that may in the long-term be worth money, but right now can’t be sold for even pennies on the dollar. The FDIC’s own cash pool, which comes from annual fees paid by banks (about 12 to 16 cents for every $100 of deposits) has dwindled.

In 2008, the FDIC spent $20 billion of its cash reserves on 25 bank failures; this year, that figure is more than $30 billion. Last week, the FDIC’s cash reserves went into the red—meaning that they need to raise cash fast to cover more expected bank failures. The FDIC estimated earlier this year that they would spend approximately $70 billion total by the end of next year, but raised that estimate recently to $100 billion, so the need for cash is hanging over FDIC Chair Sheila Bair like the sword of Damocles.

Big investment banks, like Goldman Sachs and JP Morgan, have been keeping an eye on the situation and trying to figure out how to make money from it all. Last month they proposed loaning money to the FDIC so Sheila Bair, who’s been a major critic of how Fed Chief Ben Bernanke and Treasury Secretary Timothy Geithner have run the financial industry bailout (without strengthening regulation in the process), can avoid going to her enemies for a loan.

The FDIC has two ways to raise more money. It can borrow money from the US Treasury (with Timothy Geithner’s approval) or it can levy a special assessment on banks. But the FDIC had already issued a special assessment last May, and Bair’s critics wailed that another special assessment would only drive more ailing banks into the ground. Bair didn’t much like the prospect of borrowing money from Goldman or JP Morgan at usurious rates or, heaven forbid, at adjustable rates (a type of loan that should be illegal, after all the damage it’s done to the economy and to people’s personal balance sheets, but of course it’s not—that would stifle business). So Bair came up with a compromise.

The FDIC will ask banks to pre-pay their annual assessments through 2012. In other words, Bair is taking an interest-free loan from banks. In order to avoid harming the banks that are still struggling, she gave them the okay to not report the prepayments on their financial statements, so their cash reserves will look better than they really are.

How is this different from the accounting tricks that banks have been using to hide their debts and overvalue their risky investments to make their cash reserves look good? According to Bair, the difference is in degree. The few pennies that make up the FDIC assessment will be small change compared to the other expenses on banks’ financial statements. But those assessments will add up to $45 billion to replenish the FDIC fund.

The other, more important question is this: will this $45 billion be enough? By the FDIC’s own estimate, they’ll need at least $50 billion to get through the end of 2010. By asking banks to pay their assessments through 2012 right now, that leaves a gap of two years when the FDIC can expect zero income from its main source but will still have to close down troubled banks. A taxpayer bailout will be inevitable.

The fact that Sheila Bair—the only top regulator in this country who’s been outspoken about the causes of the crash—can’t turn to either the Obama administration or to Congress to replenish the FDIC’s fund is a symptom of just how sick our system is. She’s betting that things will get better between now and next year, that new financial regulation will be in place, that the economy will turn a corner, and that Congress and the American people won’t view a request from her to replenish the FDIC’s fund with taxpayer money as a taxpayer bailout that marks her as the same kind of leach as Kenneth Lewis of Bank of America or Franklin Raines of Fannie Mae.

I hope she’s right.

Sunday, October 4, 2009

Don't Break Out the Champagne Yet

Economists have been spewing happy talk lately like it’s going out of style. I thought they would have learned something from the last two stock market bubbles fueled by irrational optimism. Apparently not, because the consensus now is that the recession is over and that the US economy has entered a “slow” or “Jobless” recovery.

At least they’re being somewhat cautious about their excess exuberance. I can’t say the same thing about investors, who’ve driven the stock market over 10,000 again without any sign that these stock prices are justified. We might blame the Fed for this, with Ben Bernanke’s insistence that a summertime bump in housing sales means the recession is over; never mind that sales are mostly in the low-end of the market, and overall housing prices are still falling in most parts of the country. No one knows what will happen once the First Time Homebuyer Credit expires later this year.

The phenomenon of a “jobless recovery” is an interesting one, worth more discussion than it usually gets in the media. Economists toss out the term as if we all should understand intuitively what it means, leading to a widespread suspicion that it is, in fact, a meaningless term. But it does have a meaning—just one that, for political reasons, economists and politicians would like to keep secret from the average American.

In US economic history, recessions (including the Great Depression) were followed by periods of economic recovery during which business activity expanded. This meant that employment increased, too, since businesses had to hire more workers. But a curious thing has developed over the last twenty years: recessions have been followed by long periods of high unemployment. We’ve had three opportunities to witness this: first, in the early 1990’s (coinciding with the first Gulf War and high oil prices), in the late 1990’s (the bursting of the tech stock bubble), and the current mess we’re in right now. In all three situations, businesses have reported upticks in their economic activity or improvements in their balance sheets, but they’re not hiring people, and most are laying people off.

Some of that is related to “increased worker productivity,” a term that means bosses are laying off people and expecting the remaining staff to pick up the extra work. But there’s only so much slack in that rope before employers have to go looking for new employees. Unfortunately, many of them are looking overseas, where labor is cheaper. Outsourcing is a phenomenon that started in the 1980’s with US manufacturers relocating their production plants overseas. US government foreign aid programs (with the help of the World Bank and the IMF) provided money to developing countries to build “infrastructure” to attract business investment—in other words: factory buildings, roads, and port facilities for US companies that wanted to relocate abroad to take advantage of a cheap labor force. And cheap oil made it even easier to produce everything overseas and ship it all back to the US for consumption. In the 1990’s, even the US service industry got on the bandwagon by setting up call centers and customer service centers in India to save money.

Much of the “jobless” aspect of the last two recoveries can be accounted for by outsourcing. But there’s no indication that outsourcing is playing the dominant role in the current “recovery” (if you believe that we’re really in one, which I don’t). The most recent unemployment figures show that the US lost 263,000 jobs in September. More important are the revised figures for the first quarter of this year. The rule of thumb has been that we lost about half a million jobs each month at the beginning of this year. In fact, the figures are much, much worse, culminating in a revised total for March 2009 of 824,000 jobs lost in that month alone. Currently, the official number of people looking for work is 15 million, or about 35.6% of the unemployed. This doesn’t count the underemployed (those working part-time or as temps who are searching for full-time, permanent employment). Some economists put the real unemployment figure (which counts everyone who’s out of work, including the “discouraged” who no longer looking for work) at close to 20% of the US adult population—one in every five people.

So what is accounting for the profits on the balance sheets of US corporations? Well, for one thing, most of them are paring down by selling off pieces of their businesses. The business press has been full of headlines announcing mergers and sales, many of which are being financed by US taxpayers through the federal government’s bailout plan, one aspect of which is to provide low or no interest loans to businesses, ostensibly to help them fund operations. (The US government is doing this because banks won’t—that’s what they mean when they say “credit has dried up.”) But once the money goes into the bank accounts of American businesses, the Treasury and the Fed have no means to ensure that the money is being spent on day-to-day operations and not being used to buy up other distressed companies. In fact, Fed Chief Ben Bernanke and Treasury Secretary Timothy Geithner are satisfied that funding mergers is a legitimate use of taxpayer money, because that’s what the US government did with the Bank of America/Merrill Lynch bailout in 2008 (which was engineered by Bernanke and former Treasury Secretary Henry Paulson, but Geithner was on the board of the New York Federal Reserve at the time, and he pushed for these kinds of bailouts).

Your taxes and mine are paying for the “jobless” recovery and sparking a run-up in stock prices, which is keeping the rich happy, and naturally leading to lots of happy talk. But there’s another, more sinister reason why US businesses have healthy balance sheets.

There’s been a lot of talk about increasing financial regulation, but not much action. For example, it’s still legal, eight years after the Enron and Worldcom collapses, for businesses to hide their debts in off-balance-sheet entities. In other words, they set up special “holding companies” that only hold debts or worthless “assets,” like mortgage-backed securities. And in March, the Financial Accounting Standards Board extended another benefit to US businesses by repealing the mark-to-market rule that forced companies to value mortgage-backed securities and similar derivatives at current market rates (the prices they’d get if they tried to sell the securities today—for many of those securities that price would be $0.00).

These accounting tricks, which contributed to the last stock market bubble, are still be used by businesses today to hide the true state of their finances. So, no, I don’t believe that we’re in a recovery. In fact, I think we’re heading into yet another bubble…with another implosion headed our way.

Friday, October 2, 2009

Slashing Healthcare Costs, Tip #1: Stub Out Cigarettes

How can we cut health care costs? You’d think it was a hard problem to address—with all this moaning and finger-pointing in Congress and the mainstream media. But, as it turns out, scientists and researchers are finding easy answers to this question.

Take, for example, two studies released last week on the effects of secondhand cigarette smoke. Both studies looked at the same data: a compilation of individual studies that followed more than 24 million people in the US, Canada, and Europe who were living in states, provinces, and municipalities that had passed laws banning cigarette smoking in public places like bars, restaurants, and workplaces.

Researchers at the University of Kansas School of Medicine found that, in the first year of a ban on smoking in public places, the incidence of heart attacks in the general population fell by 17%. By year three, heart attack rates fell by 26%. That’s not only statistically significant, it’s indicative of a major public health crisis caused by secondhand smoke. A nationwide ban on smoking in public places would not only prevent 150,000 heart attacks in the first year alone (think of all the pain and suffering we could prevent), it would save massive amounts of money.

And that didn’t even look at the myriad other illnesses caused by cigarette smoke: lung cancer, throat and stomach cancers, hypertension, asthma, migraines—the list goes on and on. If the data on heart attacks is so dramatic, we can expect equally steep reductions in these other expensive illnesses, too.

The second study, done by researchers at the University of California at San Francisco, looked at the same data as the first study, but analyzed it slightly differently. The UC researchers found the same 17% decrease in heart attacks in the first year of public smoking bans, but found an astounding 36% drop in heart attacks by year three.

Right now there’s no bill in the House or Senate that calls for a nationwide ban on cigarette smoking in public places, but there should be. Currently, only 17 states and about 350 cities ban smoking in bars, restaurants, and workplaces, which means that only about 40% of the US population can dine out, listen to music, or go to work in a smoke-free place. A partial ban exists in about 14 other states, but the remaining 19 states—primarily in the South and Midwest--have no ban at all.

We should heed the information that scientists provide us. Remember, just because the Bush administration did its best to undermine the work of scientists and researchers doesn’t mean we need to continue operating in ignorance. We have one easy way to save millions, if not billions, of dollars currently being spent on health care, and we’re choosing to ignore it. That’s just stupid.

Tuesday, September 29, 2009

The People Vs. Monsanto

We can thank our founding fathers for the “balance of powers” in our federal government, because that’s the only thing that is saving environmental regulation in this country, after the dark ages of the Clinton/Bush era.

Last week, Judge Jeffrey S. White of Federal District Court in San Francisco ruled that the US Department of Agriculture had failed to assess the environmental impact of planting genetically modified sugar beets when it granted Monsanto the go-ahead to market and sell its GMO beets.

This is a very important ruling. About 95% of the sugar beets planted in the US are Monsanto GMO beets, and about 50% of the US supply of sugar is made from sugar beets. Chances are, if you’ve eaten anything sugary in the past year, you’ve eaten a genetically modified organism and not known it.

The judge accepted evidence provided by the plaintiffs (the Center for Food Safety, the Sierra Club, the Organic Seed Alliance, and High Mowing Organic Seeds) that GMO sugar beets can cross-pollinate and contaminate table beets, kale, cabbage, and a number of other vegetables, and that organic farmers won’t be able to ensure that their crops are GMO-free if Monsanto is allowed to sell GMO beet seed.

Let’s be clear about what GMO crops are. Many people think that Monsanto and other companies are altering the genetic makeup of beets and other plants to make them more hardy and more resistant to pests and weeds. Not so. Monsanto genetically alters crops to make them more resistant to Monsanto’s highly profitable herbicide, Roundup, thereby increasing their profit and cornering the market: Monsanto provides the seeds, then provides the tons of herbicide the farmers need to make those beet plants grow big enough and produce enough beet to justify the high cost of the GMO seed they purchased from Monsanto in the first place.

The judge’s ruling is a major victory for environmental groups, consumers, and farmers (who’ve had no say in Monsanto’s efforts to squeeze more money out of them). The ruling could eventually lead to a ban on planting GMO sugar beets, since it requires that the USDA conduct an environmental impact statement, and there’s not a lot of extra money in the federal budget allocated for that purpose.

The judge will meet with both parties in the lawsuit and issue a remedy later this year, but so far it looks like Monsanto has lost this round.

Monday, September 28, 2009

The Afghan Sinkhole

I went to a book reading by Dahr Jamail last night and was reminded that the US is still engaged in two major wars which are draining our country of resources we could better use in addressing both healthcare reform and our financial crisis. Some folks would argue (including me) that the wars are one of the causes of our current financial crisis. It’s hard to argue that a record budget deficit has no impact on the country’s current struggle to emerge from the recession. While the Bush tax cuts for the rich helped make that budget deficit, the wars have had an equal impact.

Jamail didn’t really talk about those issues; the event was being held as fundraiser for the GI coffeehouse Coffee Strong, located near the Fort Lewis military reservation. So Jamail mostly discussed the fact that US military personnel are suffering from explosive rates of post-traumatic stress syndrome, inadequate healthcare, and the looming menace of “stop-loss” (the Pentagon program that allows the US military to void contracts with troops—in other words, just when a soldier thinks he or she has reached the end of their four-year commitment, the US Army can say, “sorry, but we’re invoking Stop Loss, which means we’re extending your contract indefinitely and sending you back to Afghanistan for another tour.”). He stressed that the US military is on the verge of collapse. This is the subject of his latest book, which is a collection of interviews with US military personnel who are resisting the wars in various ways.

I was deeply shocked by the high rates of sexual assault and rape within the military units based in Iraq and Afghanistan. While most of the victims are assumed to be women, they’re not exclusively so, unsurprising, given that the US military is now actively recruiting felons and gang members to fill out its ranks. What’s deeply shocking is the refusal of the US military brass to find and prosecute the perpetrators, as if the upper leadership at the Pentagon want to punish women for having won the right to serve in the armed forces.

So I wasn’t surprised to read this morning that the US government has given Hamid Karzai an assurance that we'll support him as the winner of the recent Afghan elections. Never mind the fact that the New York Times recently reviewed the results released by Karzai’s government and determined that approximately one in four votes should be subject to a recount because of the high number of ballots turned in by “nonexistent” polling stations. Yes, that's right: Karzai was so desperate to win, and so certain that he wouldn't, that his backers not only printed up massive numbers of fake ballots to stuff in ballot boxes, they also invented hundreds of polling stations with nonexistent ballot boxes to hold those fake ballots.

A 25% fraud figure would almost certainly invalidate Karzai’s self-declared 54% majority of the vote; in fact, in a better world where the US government truly stood for democracy, such overt cheating would invalidate the entire election.

But the Obama foreign policy, as run by a Defense director and a cadre of generals held over from the Bush administration, finds more value in supporting a corrupt narco-state that only control one-third of the county than it does in ensuring a fair election. General Stanley McCrystal, the head of US forces in Afghanistan, is expected to ask Obama for an additional 45,000 troops this week, and it’s not clear where those troops will come from.

According to Jamail’s interviews, “search and avoid missions” (wherein US troops pretend to patrol but instead find various ways to park their humvees, hide out, and avoid danger) are becoming more common in both Iraq and Afghanistan. This partly explains why those wars—particularly Afghanistan—are unwinnable. Now, more than ever, the US population needs to ask the same question that large numbers of US troops ask themselves every day: “What the hell are we doing in Afghanistan anyway?” Because once we ask that question, the notion of “stay the course” becomes patently absurd.

Special note: GI coffeehouse Coffee Strong provides essential support services, from counseling to legal help, for troops based at Fort Lewis. Coffee Strong is one of only two GI coffeehouses currently operating in the US. Because of a convergence of the ailing economy and the overseas deployment of about 60% of the forces at Fort Lewis (depriving Coffee Strong of much of their customer base), Coffee Strong is in dire need of financial support. Also, they are always in need of volunteers. To get in touch with them, visit their website at http://www.givevoice.org/coffeestrong or call them at 253-581-1565 or visit them at 15109 Union Avenue SW, Lakewood, WA 98499.

Friday, September 18, 2009

How The Seattle Times Lost Me as a Subscriber

[Phone rings.]

Me: Hello?

Woman on the other end of the line: I’m calling from The Seattle Times to offer you a subscription to the newspaper…

Me: No, no, no. This is the third time you’ve called me about this. I have a subscription on my Kindle. I already subscribe! Did you get that?

Seattle Times salesperson: Oh, we don’t have access to that information here.

Me: What? How can you not have access to subscriber information? Isn’t it all on a computerized system?

Seattle Times salesperson: Yes, but that’s the Circulation Department. I’m with Sales. I got your name because you owe us money—

Me: WHAT? I don’t owe you any money! Look up my account—

Seattle Times salesperson: Ma’am, I don’t have access to those records, but I can give you our Customer Service number and you can call and find out how much you owe.

Me: I already called Customer Service last month—the last time you called me with this bullshit story. They said I was paid in full. [A light goes on in my head.] Oh, you’re not really with The Seattle Times, are you?

Seattle Times salesperson [or maybe not]: Yes, I am—

Me: No you’re not! You’re really some third party caller who’s trying to scam me, aren’t you? I mean, look at it from my perspective. You call me up to offer me a subscription when I already have one, then you tell me you can’t access those records, then you say I owe you money when I don’t. Sounds like a scam to me.

Seattle Times salesperson [starting to get upset]: Ma’am, I can get my supervisor to talk to you, if you’d like…

Me: Yes, I’d like that.

Seattle Times salesperson: Okay, I’m putting you on hold now.

[Two minutes pass in silence while I’m on hold.]

Seattle Times salesperson [the same one]: Ma’am, I’m not able to transfer you to her line right now, but I can give you her phone number—

Me: Oh, no, no, no. I’m not spending one more dime to call you people again. Just take me off your call list or put a note by my name that says I have a Kindle subscription. Please.

Seattle Times salesperson [sounding a little snotty]: You know, you only get 30% of the paper’s articles on your Kindle, don’t you?

Me: Really?! [Shocked pause.] Oh, my god! You mean I’ve been paying to get less than a third of your content? Damn! I’m going to cancel my Kindle subscription like right now. I can get more articles from your website for free. Are you sure I can’t talk to your supervisor? I think she ought to know she just lost a subscriber—

Seattle Times salesperson: Ma’am, I have to hang up now. I can’t talk to you anymore.

Me: Okay, have a nice day.

And I really did go directly to my computer, log in, and cancel my Kindle subscription to The Seattle Times. Then I went to their website and left them a message telling them exactly why I cancelled.

Of course, I had other reasons to cancel, too--like an article in Thursday's edition that basically summed up all the crap Sean Hannity and Glen Beck spewed on their right-wing extremist opinion shows this week (and it wasn't on the Opinion Page, where it belonged).

If the Seattle Times goes out of business, I'll throw a party. Having no newspaper at all is better than reading a truly execrable one.

Saturday, September 12, 2009

Mayor Nickels Proves He Can't Do Math

After closing down the entire public library system for a week and asking city employees to take ten unpaid days off this year, Mayor Nickels has the gall to ask the City Council for more money to run the loathed South Lake Union street car line.

Apparantly, advertising has only brought in about half the revenue expected and, gosh, only about 1300 people ride it per day (less than one-quarter the number of people who ride the average in-city bus route). Combined with zero enforcement of fare-paying, it’s no wonder the street car is a financial bust.

For one thing, it was never built to be integrated into any existing transportation system, since there’s no equipment to scan Puget Passes (issued by the tri-county bus agencies) or the new ORCA cards, which are compatible with the new light rail line. Hence, the city can’t ask Metro or Sound Transit for money.

No, it’s a toy train for Paul Allen—one that’s cost $2.2 million in city money so far, and will cost another $1.45 million in loans from “other city accounts” that don’t have the money to spare. Nickels says the money will be structured as a loan and paid back over a five-year period starting in 2018. Say what? How does the city, which runs the street car, justify paying itself interest? And who says the street car will still be running in 2023?

It’s high time we shut down the street car and sell off the equipment…if we can find a buyer—and that’s not so certain. Who would want the damn thing?

Friday, September 4, 2009

More Private Contractors in Afghanistan?

The War in Afghanistan is heating up and becoming more deadly for US troops, with a higher number of casualties in August than in any other month since the war started eight years ago.

The head of US command in Afghanistan, Gen. Stanley McChrystal, wants more troops shipped to Afghanistan, but the US public would rather see troops come home.

President Obama, on the other hand, is more concerned about a record federal budget deficit. He has proposed saving money on the War in Afghanistan by bringing home noncombat troops and replacing them with private contractors, while shifting combat troops from Iraq to Afghanistan.

But there’s peril in that plan. For one thing, the use of private contractors has done a great deal of harm in Iraq, where the government has driven the largest private contracting company, Blackwater, out of Iraq in disgrace. And another, similar scandal is developing in Afghanistan.

According to a report by the Project On Government Oversight, private contractors working for ArmorGroup North America, have been accused by their own coworkers of engaging in lewd and deviant behavior, illegal hazing, and activities that imperil the security of the personnel they’re supposed to be guarding. ArmorGroup has a $180 million contract from the State Department to guard the US embassy in Kabul.

Where have we heard such charges before? Abu Ghraib comes to mind—in particular, the charges made by military guards that civilian contractors employed by the CIA to oversee interrogations encouraged their subordinates to engage in lewd behavior and outright torture.

In March, the Congressional Research Service reported that that, while there were 52,300 US military troops in Afghanistan, there were also 68,200 private contractors—the highest percentage of private contractor ever used in any war in US history.

President Obama needs to stand back and ask himself if that’s a good thing, or if he should extend his promise to "bring the troops home" to the US troops fighting right now to support a narco-state in Afghanistan.

Besides, shifting troops from Iraq to Afghanistan is not “bringing them home,” as their families would be quick to point out.


Sources: “General Seeks Shift in Afghan Strategy,” The Wall Street Journal, 9/1/09; “U.S. to beef up combat force in Aghanistan,” Julian E. Barnes, The Seattle Times, 9/2/09; and “Security guards for U.S. accused of deviant acts,” Ann Scott Tyson, The Seattle Times, 9/2/09.

Wednesday, September 2, 2009

Kudos to Ed Murray

State Sen. Ed Murray deserves a pat on the back for refusing to run a write-in campaign for mayor of Seattle.

Since the primary results knocked current Mayor Greg Nickels out of the running for another term, local Democrats and the business community have been in a panic. Neither of the two candidates on the ballot for November—Joe Mallahan, a Comcast executive, and Mike McGuinn, an environmentalist who wants to stop construction of the downtown traffic tunnel—have any prior experience in political office. Neither of them owes any favors to party bosses or major donors (McGuinn’s donations come primarily from individuals who support his environmental views and Mallahan has funded his campaign mostly out of his own deep pockets). Hence the pressure from the party for Democrat Ed Murray to run a write-in campaign.

But today Murray declined to run, saying he wanted to focus his efforts on a far more important goal: making sure the backers of Referendum 71 wouldn’t sink a new law that extends equal rights to gay couples in Washington State. He deserves a big “thank you” from all of Seattle’s citizens.

Today I listened to Murray say point-blank, on KUOW, that his energy would be better spent on the Ref. 71 struggle. Any self-serving politician might have argued the opposite: that he would be more effective in influencing the course of gay rights by becoming Seattle’s first openly gay mayor. But Murray showed a selfless restraint and respect for reality that is missing in so many politicians these days.

Thanks, Ed. And you’ll have my vote this November… to support gay rights in Washington State.

Sunday, August 30, 2009

A Visit to the Grungy City

Vancouver BC is an authentically grungy city. It looks the way a city is supposed to look and feel.

Seattle, on the other hand, ceased being a grungy city sometime in the late-90’s, after Mayors Rice and Schell, and their cohorts on the City Council, succeeded in shoveling public money to developers. Add the tech stock boom, easy credit, and sky-rocketing housing prices, and we got a city that has swept all its poor people right out of the city limits. And that was the plan, as Mayor Schell would have told you back then. Poor people don’t belong in our city, so they were forced to leave.

Which explains the city’s attitude today, with Mayor Nickels endorsing sweeps of homeless encampments and his refusal to deal with the Nickelsville tent city. No wonder he didn’t make it through the primary.

Unfortunately, when the poor left Seattle, most of Seattle’s character left with them.

Vancouver has several neighborhoods that have cleaned out the drug dealers and prostitutes, but have nevertheless maintained their unique, hole-in-the-wall stores, cheap ethnic restaurants, tiny artsy boutiques with handmade clothing, and a proliferation of affordable family housing. Of course, politicians and big businessmen in Vancouver would like their city to look like Seattle, but the majority of Vancouverites are pushing back and trying to hold on to what makes Vancouver so great.

Not so, in Seattle. Even the Fremont neighborhood has been sanitized and turned into an outdoor shopping mall. It’s a sad day when Vancouver can boast more vegetarian restaurants per square mile than Seattle has in its entire city limits.

It all boils down to two things: first, the price of rent. In Seattle, local coffee shops, used bookstores, and even the little storefront martial arts studios have all closed down because they can’t make the rent. (I feel compelled to point out that Vancouver has a Starbucks on almost every corner, just like we have here, but Vancouver still has great, small coffee shops, too. Seattle has maybe three or four left in the whole city.)

The second problem is attitude. Everyone in America wants to get rich right now, and that’s reflected not only in our borrowing and spending habits (we want to live like the rich but don’t really have the means for it), but also in our inability to use patience and hard work to achieve a vision of something unique.

For example, in Vancouver, a young clothing designer might decide to open her own storefront in a tiny neighborhood shop with cheap rent and make clothing that students can afford to buy. She would find it important and empowering to see lots of hip, young people wearing her clothes, and be happy to build business that way. But in Seattle, that same designer would choose instead to make a few items, place them in an expensive consignment shop, and price them well out of the reach of almost everyone but the wealthy. Then she’d try to build her “brand” through an idiotic Internet campaign, and try to get on a reality TV show for fashion designers, eventually learning how to fit in with the fashion industry’s standards. This is a route that ensures sterility, stifles creativity, isolates artists from the people who’d appreciate their work the most (most of whom are not rich), and in the process destroys a city’s cultural life and its streetscapes.

Maybe the economic downturn, which is based on unsustainable rents and housing prices, will change all that. Americans are already voting on the quality of merchandise in chain stores by becoming more choosy. We are literally waking up, smelling the coffee, and deciding that Starbucks isn’t any better than the stuff we make at home.

Maybe most American artists and entrepreneurs will give up on their “get rich quick” fantasies and search instead for fulfillment in their work. Falling rents just might make it possible for them to realize this new dream.

I hope so, for Seattle’s sake.

Friday, August 28, 2009

What's This Dynasty Crap Anyway?

I’ve just come back from a vacation to Vancouver, BC. The hotel where I stayed provided me with a free newspaper every morning, which I enjoyed fully. Not only was the local news interesting, but Canadians’ views of US news were highly entertaining.

For example, the news of Sen. Edward Kennedy’s death. The Canadian press were respectful, but they couldn’t refrain from commenting on how the US press treated the Kennedys as if they were royalty, and how much the US media mourned the death of a political dynasty. The Vancouver Sun even printed a piece that speculated about which political family might replace the Kennedys: the Clintons? The Bushes? The Obamas?

Fighting back nausea, I turned to the opinion page, where I was happy to read commentary pointing out that, for a Democracy, the US sure has a strange love of aristocratic forms (i.e., “the political dynasty” bullshit). Oh, they are so right.

But there’s more to Kennedy worship than that. Most Americans believe we live in a meritocracy, where anyone can succeed with a lot of hard work, perseverance, brains, confidence, etc. The Kennedys were representative of that “pull yourself up by your bootstraps” philosophy in most people’s minds.

But what many Americans forget is that it also takes a great deal of luck and/or connections to make as much money as Joseph Kennedy Sr. did. The political success of his children is proof that money can open doors and create opportunities that aren’t available to, say, a homeless street kid who never graduated from middle school.

Amazingly, the Kennedys seemed to understand that. Old-style Democrats, they knew that folks often need a helping hand to climb the ladder out of poverty, and so they supported social service programs that other politicians (including most Democrats these days) sought to dismantle. They had a self-awareness that most politicians—and nearly all media personalities—lack.

So before we start talking about a dynasty to replace the Kennedys, let’s acknowledge that it’s not a particular political family that we’ll truly miss. It’s a strong and credible champion of the poor: someone who believes in equal access to education, universal access to healthcare, affordable housing, programs to address domestic violence, and services for people with disabilities.

We’re waiting.

Tuesday, August 18, 2009

Meanwhile, In Russia's Afghanistan...

While the US government condemns the sham trial and sentencing of Burmese politician and activist Aung San Suu Kyi, the Obama administration is notably silent on the continuing human rights crisis in Chechnya. In the past two weeks, two more activists were killed when a gang of armed men, some dressed in police uniforms, kidnapped and murdered the head of a children’s charity and her husband.

So many social justice and human rights workers have been killed in Chechnya in the past few months that a local radio station in Grozny, the Chechen capital, couldn’t find anyone to interview about the recent killings. Scanning down a list of Chechen charities revealed that every single one of the station’s contacts had been murdered.

The Kremlin-backed leader of Chechnya, Ramzan Kadyrov, is widely considered to be the man to blame for these killings. Kadyrov, a former Chechen separatist, gave up the cause to be Vladimir Putin’s man in Grozny. He was the compromise candidate who was supposed to bring stability to Chechnya; now Human Rights Watch blames him for running death squads that have murdered dozens of activists and journalists. Stability, apparently, comes at a steep price.

Yet Kadyrov is quick to point the finger at Russian President Vladimir Putin, saying that Moscow wants to discredit him and destabilize his government. It’s an absurd charge, given that Russia has fought multiple wars in Chechnya in the last decade, and is struggling to put down separatist, Islamic uprisings in Chechnya’s neighboring republics of Ingushetia and Dagestan. The last thing Putin wants is to topple Kadyrov’s government.

Kadyrov is obviously working with Putin’s blessing to suppress any and all forms of dissent in Chechnya, even when that dissent falls into the category of peaceful work on behalf of orphaned children. Kadyrov believes that Putin (so fond of his own bloodthirsty reputation) can stand a bit more slander, as long as it diverts the UN and the international media from the truth.

So far the US media has been happy to oblige, as long as US presidents are willing to shake Putin’s hand at international forums. A picture is worth more than a thousand words.

Saturday, August 15, 2009

Banking: Where It Pays to Keep Secrets

US banks posted record losses in the first quarter of this year, which was the worst quarter in history for Wall Street since The Great Depression. In one effort to stem the bleeding, big banks resorted to lobbying the Financial Accounting Standards Board (FASB) to repeal the mark-to-market accounting rule.

Simply defined, the mark-to-market rule requires companies to value their assets at the price they would receive for those assets if they tried to sell them on the market right now. Because of the collapse of the credit markets in 2008, the loans and mortgage-backed securities that banks held on their books were worth next to nothing on the market, so they had to value them accordingly. This made their balance sheets look terrible, and their stock prices plummeted. Naturally, banks wanted to declare that their loans were worth more.

So the banking industry lobbied FASB to repeal mark-to-market accounting. Big banks wanted to value their mortgage-backed securities and other loans as if the principle and interest on those loans would be paid back 100%, as if none of their customers would default on their loans.

Shockingly, FASB agreed, allowing banks to use an accounting trick to hide the terrible state of their balance sheets. Unsurprisingly, banks’ second quarter earnings vastly improved. Investors began buying bank stocks again, deeming them a good deal. Many economists declared that the tide had turned on the financial crisis.

But now, FASB is considering reinstituting mark-to-market accounting for all financial products, including loans, mortgage-backed securities, and other derivatives. This is terrible news for the banking industry.

After suffering from a double wave of defaults—first, from subprime mortgage loans given to people with bad credit, then from prime mortgages given to people with good credit who borrowed more money than they could afford—US banks are now getting hit with a third wave of defaults on commercial real estate loans. Commercial loans extended to hotels, malls, retail outlets, and office-building developers have hit a default rate of 7%, approximately double what it was last year.

Economists don’t expect the fall in the commercial loan market to hit bottom for another three years, due to lingering unemployment and lagging consumer spending. This is terrible news for mid-size regional banks, in particular, who invested heavily in loans to commercial real estate developers.

A recent example is this week’s collapse of Colonial Bancorp, the sixth largest bank default in US history. Joining 76 other banks that have defaulted so far this year, Colonial is a sign of things to come. No wonder bank lobbyists are gearing up to inundate FASB with protests against mark-to-market accounting.

Transparency is the enemy, and they make no secret of it.

Wednesday, August 12, 2009

Is Maliki the New Saddam?

The only rational justification that the Bush administration ever publically gave for the War in Iraq was the desire to replace a tyrant (Saddam Hussein) with a democratic government. That assertion has always been the hardest one for opponents of the war to counter, and it was the last justification that stood up to any kind of scrutiny. Until this week.

Iraqi Prime Minister Nouri al-Maliki has proposed a list of laws that will do away with most of the democratic reforms in Iraq’s new constitution. The draft laws include the following:

  • A proposal to legalize a new government body, the State Ministry for National Security, which will run a “political crimes directorate.” The new directorate will monitor political parties and nongovernmental organizations (NGO’s) in much the same way Saddam’s Baath party monitored its opponents.

  • A proposed law to give the Iraqi government complete control over NGO’s, including requiring government review and approval of every single donation and project undertaken, and every office opened and run by all NGO’s. Simple registration of a new NGO (as now required under Iraqi law and the governments of most western nations) is not sufficient, apparently.

  • A law to put heavy restrictions on Iraqi media that would require all journalists to be licensed by the Iraqi government and would give the government say over who is hired and fired by media organizations. The law also allows the Iraqi government to censor specific stories that would “compromise the security and stability of the country,” and it forbids the use of anonymous sources.

Alaa Talibani, head of the NGO committee in the Iraqi Parliament, said: “So many articles in this law go against what it means to have a free civil society, against the fundamental principles of liberty, and even against our own constitution.”

That, as Saddam Hussein might say, is the point. The US people, however, should rigorously question the whole point of having engaged in a long, bloody conflict just to replace one dictator with another.

[Source: “Iraq’s Maliki Seeks Tighter Media Grip,” Charles Levinson, The Wall Street Journal, 8/8/09.]

Tuesday, August 11, 2009

Now We Bomb Hospitals?

Assassination is banned by a US federal executive order issued by President Gerald Ford in the 1970’s. The Bush administration, however, resurrected assassination in its the War on Terror. Unfortunately, the Obama administration has not only taken up the torch, but has vastly expanded a CIA program that uses unmanned aerial drones to summarily execute suspected Taliban and Al Qaeda leaders…and anyone who happens to be in the vicinity.

These are not “surgical strikes.” Aerial drones fly at very high altitudes to avoid detection. Some carry cameras to locate suspicious clusters of people, while others carry high-powered bombs to target groups of people in the hope that someone of importance is killed.

Over the weekend, US officials boasted that Baitullah Mehsud, a suspected Taliban leader, had been assassinated by a missile fired from a CIA-controlled aerial done. At first, US officials told the New York Times (and the paper faithfully reported) that Mehsud, a diabetic suffering from kidney failure, was killed while receiving medical treatment on the roof of his father-in-law’s villa. No sooner had the strike been reported than conflicting information emerged.

An Associated Press article appearing in the Seattle Times on Saturday, August 8th, said that Mehsud was killed along with his wife and several bodyguards while hooked up to an intravenous drip and undergoing treatment for “stomach problems.” The Wall Street Journal quoted Pakistani officials saying that Mehsud was “undergoing treatment for a kidney ailment.” Almost certainly he was receiving kidney dialysis at the time—not something that can occur on the roof of his father-in-law’s villa. Also, the article stated that Mehsud was killed when a missile targeted the second-story balcony of a building where he was receiving treatment. No mention was made of any rooftop.

In fact, it appears that Mehsud was killed when the CIA bombed a medical clinic—probably the only facility that offers kidney dialysis in the Waziristan frontier. We can believe with some confidence that his wife and bodyguards were not the only ones killed in the bombing, but medical personnel and other patients were included in the death toll. In addition, anyone who lives in South Waziristan who needs kidney dialysis will now die without access to the complex, sterile equipment and medical personnel required to keep them alive.

Let’s remember what’s been forgotten by US officials and the US press: the bombing of medical facilities is a war crime, a direct violation of international law and the rules of warfare. It doesn’t matter if the enemy is receiving medical treatment at the time. It doesn’t matter if the clinic is treating Hitler or Osama bin Laden, or Baitullah Mehsud, or enemy foot soldiers. Hospitals and clinics are off limits.

Nevertheless, US officials were jubilant. They happily theorized that the death of Mehsud would cause a fatal fracture among the Waziristan tribes who’ve been helping Mehsud target the Pakistani government. Scholars of Pakistan and observers on the ground in Waziristan had a different view. In the Seattle Times report, Karim Mehsud, a lawyer in Peshawar who had met Baitullah Mehsud, was quoted as saying, “Another Baitullah will emerge. This is an ideological war, this is not a local problem.” Almost everyone agrees that Baitullah Mehsud was responsible for focusing his tribe’s attention away from Aghanistan and towards the Pakistani government; now that he’s gone, his 10,000-man guerilla army is free to reunite with the Taliban and once again attack US troops in Afghanistan.

More than 360 people have been killed in over 40 drone attacks in Pakistan this year. Pakistan has publicly condemned each and every one of these attacks as a violation of Pakistani sovereignty. But both Pakistan’s foreign minister and the chief of its Interior Ministry have hailed the assassination of Mehsud as a major success. The Pakistani military has been preparing (with dread) for a offensive against tribal elements in the rugged, mountainous region of Waziristan, spurred on by heavy urging from the US government. The Pakistani government is now hopeful they can avoid the effort and expense altogether, much to the Pentagon’s dismay.

Not only is our government engaging in assassination prohibited by US law, but it’s also engaging in international war crimes, for the sake of expediency, and with the excuse that it will “save American lives” and “help end the war in Afghanistan.” Nothing could be further from the truth. When you assassinate an enemy’s leader, someone will inevitably take his place. In the case of Baitullah Mehsud, who’s been ill for some time now, the preparations for succession are probably already complete. A new leader of the Mehsud tribe will arise swiftly and without most of the infighting so ardently expected by CIA officials.

One more thing we can easily surmise: the man who replaces Baitullah Mehsud will be more radical and more bloodthirsty. And he’ll be looking for revenge.


Sources:

“Taliban leader in Pakistan reportedly dead,” Joby Warrick, Joshua Partlow, and Haq Nawaz Khan, Associated Press, reprinted in The Seattle Times, 8/8/09

“U.S. Drone Kills Chief of Taliban in Pakistan,” Matthew Rosenberg, Zahid Hussain, and Siobhan Gorman, The Wall Street Journal, 8/8/09.

Monday, August 10, 2009

The Program Only an Idiot Could Love

All the hype about the cash for clunkers program, that it’s “the best economic stimulus we’ve undertaken yet” are based on the estimate that consumer spending drives 60-70% of all economic activity in the US, if not the world. So any tiny impetus for consumer spending, even a mere $3 billion worth, will have an enormous impact, far greater than the hundreds of billions of dollars approved in the Economic Stimulus Spending Act. Or so the reasoning goes.

The bulk of the money in the Economic Stimulus Spending Act was approved for “shovel-ready” infrastructure projects. Unfortunately, many of those projects are still waiting for the first shovel of dirt to be turned over. Time’s a-wasting. The construction season will be over soon, and it’s becoming clear that most of those projects wont’ get underway until next spring.

Hence the excitement over the cash for clunker program. A tiny blip of consumer spending! Let us rejoice!

But not so fast. The Federal Reserve and the Commerce Department reported last week that, in June, consumer borrowing fell for a fifth straight month. The US public is using its cash to pay down its debts, not to spend. Economists expected a decline of $4.1 billion in consumer credit in June; the actual total was $10.3 billion, almost double the May decline of $5.4 billion. Credit card use in June dropped by $5.3 billion, the tenth monthly decline in a row, a record for the US economy.

Americans are paying down their debts, which is making the US economy suffer. Nevertheless, we could argue that this is a good sign for individual US households, except for one sobering fact: total personal debt still lingers at $2.503 trillion (not counting mortgage debt and home improvement loans). We all have a long way to go to pay off our credit cards, student loans, and auto loans.

Which is why cash for clunkers may be a good deal for the US economy (at least in the short term), but it’s a very bad one for US households, which don’t need to take on new auto loans right now—no matter how nice it is to get a government rebate check. This is yet another way that the Republicans’ anti-tax mantra has damaged the American psyche; we will do anything to get something back from the IRS, even if it kills us.

And let’s not forget the cost to society and the environment to junk all those clunkers (a requirement of the program) instead of keeping the perfectly good ones running and recycling the real clunkers for parts. Meanwhile the auto industry is gearing up to use dwindling resources to make new cars to fulfill the demand created by the cash for clunkers program.

Replacing a 1999 17-mpg pickup truck with a new 2009 model that gets 18-mpg makes no sense whatsoever. That $3 billion in taxpayer money could have been spent much more efficiently if the government had randomly handed out $4,500 checks. Or given the money to state and local governments to plug their budget holes, to prevent layoffs in state and county governments, to provide homeless services, to fund more transit services (which would truly help the environment), to pay teacher salaries, or to prevent billions in government service cuts all over the country.

Cash for clunkers? What idiot came up with that one? Probably someone who was taking money from the auto industry, the only real beneficiary of the program.

By the way, both of Washington state’s senators, Maria Cantwell and Patty Murray, voted in favor of the program. They need to explain why.

[Source: “U.S. Consumers Reduce Debt for Fifth Month in a Row,” Jeff Bater, The Wall Street Journal, 8/8/09.]

Friday, August 7, 2009

What will hurt the poor: higher bus fares

Forget the bag fee as a burden to the poor. What we should really be incensed about is the King County Council’s proposals to raise money for Metro bus service. Their brilliant ideas have included abolishing the ride free zone downtown—widely used by the poor to navigate from one downtown service provider to another—to raising bus fares by 25-cents per year for the next four years. Yes, by 2013, riders would be paying $3 for a one-zone, peak hour trip and $2.75 for a one-zone, off-peak trip. If you live in low-income housing in the cheaper parts of the county outside of Seattle, your fare will be $3.50 for a peak hour trip.

Let’s not kid ourselves. Poor people ride the bus because it’s cheaper than maintaining a clunker that breaks down all the time. It’s cheaper than gas. It’s cheaper than car insurance. It’s cheaper than parking and new tires and radiator fluid and oil changes and new brake pads.

But it’s not so cheap that people don’t feel the sting when fares go up, and they will if the county council passes this insane increase. Council members Julia Patterson, Reagan Dunn, Kathy Lambert, and Pete von Reichbauer need to hear from you:

Julia.patterson@kingcounty.gov or 206-296-1005
Reagan.dunn@kingcounty.gov or 206-296-1009
Kathy.Lambert@kingcounty.gov or 206-296-1003
Pete.vonreichbauer@kingcounty.gov or 206-296-1007

Of course, these are all representatives from conservative, rural and suburban districts on the south and east side of the county. You might also want to contact the other county council members and ask them to out-vote this coterie. Larry Phillips and Dow Constantine, in particular, are so busy running their campaigns for King County Executive that they’re probably not paying close attention to what their colleagues are doing. Visit the king county council website at www.kingcounty.gov/council/Councilmembers.aspx to get the complete contact information for all council members.

Tuesday, August 4, 2009

The Bag Fee and The Poor

Edmonds has become the first city in our state to ban plastic grocery bags. The Edmonds City Council considered a 20-cent fee similar to Seattle’s Referendum 1 (which is up for a vote on August 18th), but opted instead for an outright ban. They’re joining the distinguished ranks of other cities who’ve chosen to ban nuisance plastic, like Washington DC, San Francisco (which banned the bags in 2007) and Los Angeles (whose ban will go into effect next year). A few nations around the world have banned or discouraged their use: France and Germany (“Old Europe”), India, and…you’re gonna cringe…China has also seen the light. So what are we waiting for?

Well, we might be waiting for progressive, social justice groups to support this measure. Most have been unwilling to weigh in, probably because they buy the argument that the 20-cent fee will impact the poor more heavily than the rich. Possibly true. Possibly not.

It didn’t help that Danny Westneat wrote in his Seattle Times column on July 29th that the Central Area Motivation Program (CAMP) is against the bag fee. They did an informal survey of their clients, which entailed handing out reusable bags to food recipients and requiring that they bring them back on future trips to the food bank. CAMP found that the poor have a hard time remembering to bring back their reusable bags.

But there were problems with their informal survey. For one thing, CAMP didn’t say how many of their clients don’t speak or understand English well; this can effect whether or not their clients really understand that they should reuse the bags CAMP furnished to them. The same is true for folks who are mentally ill or cognitively impaired. It may take a few tries before these folks grasp the concept. So do we give up just because they don’t get it right the first time? Most people don’t remember to take their reusable bags with them the first couple of times they go to the grocery store—until they get in the habit of remembering to grab them before they head out the door. The poor are no different in that respect.

There were other problems with the survey. Food banks often see a high turnover in clientele. How many of the people who showed up without reusable bags ever received one from CAMP in the first place?

In addition, the survey doesn’t take into account the willingness of green progressives to regularly donate reusable bags for use in food banks, homeless shelters, and other programs that serve the poor. Nor did Westneat mention that part of the money raised through the bag fee will be used to purchase reusable bags for the poor. You might argue that those dollars could be better spent buying food or other services for low income people, but why does it have to be a zero sum game? Can’t we help the poor and the environment at the same time? I think Seattle residents are humane enough to do both, even in tough economic times.

Monday, August 3, 2009

Dark Pools and Other Financial Arcana

“Dark pools” and “flash trading” sound like terms you’d find in a Harry Potter movie. But if you work for a large investment bank, these terms are as familiar as stocks and bonds and the NYSE. Too bad mom and pop investors don’t know what they are or how they can affect the value of your savings. The Wall Street Journal defines dark pools as “private markets where large orders are transacted.” [Source: “Traders Blamed for Oil Spike,” Ianthe Jeanne Dugan and Alistair MacDonald, WSJ, 7/28/09.]

Usually used by investment banks, hedge funds, and mutual fund brokers to disguise large purchases and sales of stocks and mutual fund shares (the trades are undertaken anonymously and don’t appear on any public exchange), dark pools are privately run and not subject to regulation by any governmental authority. Recently the SEC has recommended that dark pools register with the government and provide basic information on their activities. The companies that own and run dark pools are largely in favor of this mild increase in scrutiny, probably because they fear the SEC and Congress will close them down entirely if they don’t submit to some form of regulation.

The companies that utilize dark pools to avoid price run-ups or steep declines are resisting the government’s move to bring their activities to light. They argue that dark pools smooth price swings and thereby benefit small investors who would be afraid to invest in a more volatile market. But that’s the very best reason to regulate or shut down dark pools entirely. As with mortgage fraud, the federal regulators must go after any mechanism or scheme that makes the act of investing in the stock market and/or mutual funds seem safer than it really is. If people fully understand the risks of what they’re doing, they will make better choices for themselves. At the very least, we can hope that fewer people will unwittingly commit financial suicide by borrowing money on a line of credit or taking out a second mortgage in order to pour that cash into the stock market.

I can’t even pretend to understand how flash trading works. But I do know that it’s one of many strategies that takes advantage of the speed-of-light trading that’s evolved since the computerization of the markets. With the introduction of the Internet, broadband, fiber optics, and other technological marvels, high-volume traders can now make vast sums of money on the fraction-of-a-penny difference between the millisecond when an order to buy or sell a security is placed and when that order is actually fulfilled. Money can also be made on how trades are routed through our vast computer system, because vultures wait at every step of the way to skim fractional cents. Not so very long ago—about ten or twelve years in the past—skimming fractional cents was considered fraud. Not anymore. Now it’s considered the right of every financial behemoth; a right that must be ardently protected...if you believe the big financial firms that are lobbying Congress and the SEC to stop any proposal that would ban flash trading.

Tuesday, July 28, 2009

WMD: Made in Washington State

The Sunday (July 26) issue of the Seattle Times carried an article entitle "Soaring success: Drones lift Gorge economy," an ode to the latest US-made weapon of mass destruction: unmanned, aerial drones. Remember when Colin Powell stood before the UN and condemned Saddam Hussein for building unmanned aerial drones? That's a weapon of mass destruction, boys! Let's bomb the shit out of him!

Meanwhile, US companies were busy building the first generation of aerial drones. Today, the Predator drone is routinely used to bomb villages where Taliban militants are thought to be hiding, or to assassinate suspected Al Qaeda leaders and their "sympathizers" (the latest terminology to connote innocent bystanders). As of mid-July of this year, the US military had launched 40 drone strikes in Western Pakistan alone, which caused the Pakistani government to issue a formal protest with the US State Department. The Predator is also used in Iraq and Afghanistan.

A company called Insitu, based in Klickitat County here in Washington State, recently churned out its 1,000th aerial drone. Insitu was founded in 1994 and has 15 separate offices in the Columbia Gorge area where 630 workers make drones for Boeing, which purchased Insitu in 2008. In fact, Insitu is one of Boeing's most profitable divisions...and a non-unionized one, too.

Insitu also says that its main product is not a missile wielding weapon; no, they build the ScanEagle, an aerial surveillance drone that isn't big enough to carry missiles. Instead, the ScanEagle carries high-resolution and/or infrared cameras that help pinpoint where people live so the Predator drone can bomb them to kingdom come. Big difference.

Saturday, July 25, 2009

A Million Bucks to Defeat the Bag Fee

The American Chemistry Council (Dow Chemical, Exxon Mobil, etc.) just announced this week that they're pouring more than $1 million into a campaign to defeat the plastic shopping bag tax that will be on the ballot in Seattle on August 18th. That's the most money ever poured into a Seattle ballot measure in history, according to the Seattle Times. All to defeat a 20 cent fee that most retailers think is a good idea. C'mon, people, the cost of these bags is already figured into the price you pay for your food, clothing, and other stuff you buy; the tax will go to fund new environmental initiaves here in Seattle. Who loses from that? Get this: only big retailers will have to remit the tax to the city. Small businesses will be able to keep 100% of it.

The argument that the bag fee will be onerous to the poor is just wrong. I've done a little personal experiment. I committed six months ago to stop using any more plastic bags for my groceries. I paid $3 for three reusable bags. Note: one reusable bag holds the equivalent of what three to four flimsy disposable plastic bags can hold (and sometimes more). In six months, I've used only two disposable plastic bags (a 40-cent expenditure if the bag-fee becomes law), I've made fewer trips to the grocery store (because I can carry more stuff in my reusable bags), and I've yet to wear out or tear even one of my reusable bags. Is it hard to remember to bring reusable bags to the grocery store with me? Are you kidding me? If I can remember to take my wallet with me, I can certainly remember to grab a couple of bags on the way out the door.

As for people who want to use those flimsy plastic bags for garbage sacks, oh please. The whole point is to keep these things out of the waste stream because that's where they do the most damage! Own up to your responsibility as an adult and recognize the impact your choices have on our environment. Recycle and compost (if you can) to reduce your waste, and buy an environmentally-friendly alternative garbage bag.

The city can and should encourage environmentally responsible behavior. Kudos to the city council members who supported the bag fee. All of them did, except for Jan Drago, who wants to be our next mayor. Maybe we should call her Ms. Yuck and make a green sticker with her face on it.

Monday, July 20, 2009

Seattle Head-Tax Repeal

The Seattle Times, in all its kiss-The-Rich glory, led its editorial page today with an opinion piece entitled "Hey, City Hall: What's the holdup on head-tax repeal?" The "head-tax" is the Times' name for the Employee Tax that charges a tiny fee ($25) to each business for each employee that doesn't bike, walk, take the bus, or commute to work in an environmentally friendly way. In other words, if you drive and park to work in Seattle, your boss has to pay $25 per year.

As taxes go, it's progressive in both its effects and its collection: small businesses are given an exemption from the tax, and it encourages businesses to encourage their employees to carpool, bus, bike, and walk to work. Hell, in my workplace, we even have a guy who longboards to work. (Google it and watch a video of longboarders. Who wouldn't want to travel that way if they could?)

In the Times editorial, they bitch and moan about how it's taking the city council forever to repeal the damn tax. Oh, boo hoo that some of the city council members want to wait until the budget discussions start in the fall. That's called "common sense." You know, the kind that makes a reasonable person say, "gosh, maybe we should wait to see how much money is in the city coffers before we repeal a tax that's not particularly burdensome and helps pay for streets and sidewalks." That seems reasonable to me. But I don't work at the Seattle Times, obviously.

Welcome to my blog

I've been writing about politics for a long time, in a very structured way, through my articles for various left-wing, progressive publications. I'm welcoming the chance to be more informal here, and to write more frequently.