Monday, October 5, 2015

Corporations don’t have to break laws as Volkswagen did to manipulate & cheat the public

Volkswagen’s use of manipulative software to conceal that its diesel engines couldn’t pass emissions inspections is far from the first time that a large corporation has broken the law to cheat the public, not even the first time this year. Cheating can show up in any industry, as demonstrated by the Peanut Corporation of America executives who knowingly sold the public peanut butter tainted with salmonella. 

These companies knowingly broke laws that regulate the marketplace. Weakened as government oversight has been by the general starvation of all non-military government functions over the past 35 years, the American public is indeed fortunate we caught both Volkswagen and the peanut-mongers.  

Most Americans, regardless of their political views, are appalled by Volkswagen’s treachery, although I have yet to see or hear anyone come up with a proposal to prevent these acts of corporate manipulation from repeating. The answer, of course, is obvious:  spend more money inspecting products and facilities and more aggressively prosecute companies that break the law and their executives and directors. But common sense will often ruffle the feathers of large industries and their elected factotums. 

Extremist supporters of the unfettered free market always assume that corporations will uphold the highest standards of ethical behavior and those that don’t will soon be unmasked and ultimately fail. This overarching theory gives no thought to what happens to the innocent people killed and hurt during the period in which the “marketplace” “naturally” removes these bad apples. 

The more reasonable among free market advocates admit the need for regulations, but insist that the regulated industry must develop the regulations.  It’s this approach that leads to phone tariffs and securities regulations that limit damages and emissions requirements that always go into effect years after the laws are passed.  

In fact, industry has so many ways to manipulate individuals and communities that it’s surprising that a company ever feels it has to break the law to make a profit. 

Industry has a great say on the overall policy and economic strategies that the federal government and the states formulate and implement. Reading Street Smart: The Rise of Cities and the Fall of Cars by leading transportation engineer Samuel I. Schwartz, reminded me of how much sway corporations and industries have over government. Take our spending on infrastructure improvement: Almost 80% of it goes to highways and only 20% of it goes to mass transit. Highway spending has established and now reinforces a way of life that is leading to resource shortages and human-induced global warming. Not good for the public, but a car-centric lifestyle helps the automobile industry, the oil industry and suburban developers.  

By the way, Schwartz demonstrates that this enormous decades-long financial support of car-and-mall culture has not been enough to make living in car-centric areas less expensive. While people complain that cities with mass transit are the most expensive in which to live, as of 2010 the average person in New York, Washington, Philadelphia, San Francisco, Chicago and Boston all spent less of their household budget on housing and transportation combined than the average person did in Riverside, Miami, Jacksonville, San Diego, Los Angeles, Phoenix, Houston, Atlanta or Columbus, all of which have lower housing costs but much higher costs to travel from home to work, school and recreation. (Of course, San Francisco and New York have seen real estate booms over the past five years that may change the numbers somewhat). See p. 111 of Schwartz’s book for a chart with details. 

Schwartz’s main interest in Street Smart is to advocate for a series of innovations that will help move people from place to place more quickly and create more mixed-use neighborhoods in which people can walk to retail stores, restaurants and other amenities. But along the way, Schwartz reminds us of other ways that large corporations manipulate the public for their own ends.  

Let’s start with suppressing the competition. Schwartz is far from the first to write about the two companies formed by General Motors, Firestone Tires, Standard Oil of California and other large companies in 1936 that bought electric train and trolley systems in at least 45 cities, including Los Angeles, St. Louis, Baltimore and Newark, and then shut them down in favor of oil-burning buses. The federal government finally realized that the series of ostensibly legal actions like forming a company, buying other companies and reallocating assets constituted a conspiracy to restrain trade and indicted one of the shell companies in 1947. The corporations were convicted of some crimes, but not others, and had to pay fines of $5,000 per company and $1 per chief executive officer.   

Schwartz also alludes to companies putting out false propaganda and supporting phony research. His examples, all financed by the Koch brothers, are climate change (a term I have come to despise, because it is so squeamishly euphemistic), healthcare reform and the United Nation’s nonbinding blueprint for sustainable development called Agenda 21. Without consulting sources, we can quickly add Coca Cola, the tobacco companies, pharmaceutical companies and automobile companies to the list of companies supporting false research, on such topics as the benefits of exercise versus calorie-counting in losing weight; the health hazards of smoking; the efficacy of a number of prescription drugs; and the real cost to install safety measures in vehicles or meet emission standards. 

Perhaps the most disturbing way that corporations manipulate the public, individuals and the government to make more profit is to write legislation and spend money to defeat or pass laws. We know generally that the American Legislative Exchange Council routinely produces model bills which are introduced in state legislatures by the elected officials they control. This legislation generally hurts the public, and includes new laws to reduce corporate regulation and taxation, loosen environmental regulations, make it harder to vote, weaken labor unions and promote gun rights. In Street Smart, Schwartz gives some disgusting examples of what Americans for Prosperity and the Reason Foundation—two Koch Brothers-financed organizations—and their millions did in one year alone, 2014: undermined a Nashville plan for dedicated transit lines; forbade Indianapolis from studying a light rail system; killed Florida’s plans for a high-speed rail system which voters had overwhelmingly approved; and unsuccessfully opposed the expansion of the Washington DC Metro and the LA Exposition Line rail system.   

We haven’t even mentioned how corporations control the political process with political contributions and influence over the news media through advertising and ownership. 

With all these legal ways to fix the game in their favor, it strikes me that only the most venal and stupid of corporate executives ever explicitly break the law the way Volkswagen and Peanut Corporation honchos did.

Friday, October 2, 2015

10 more innocent victims sacrificed to a misreading of the 2nd amendment

By Marc Jampole

As of this writing, the unanswered question is how Chris Harper Mercer obtained the gun he used to kill 10 people at Umpqua Community College.

The police easily reconstructed a profile of Mercer, and it’s a chillingly familiar one: Young male, antisocial, withdrawn, without real relationships, mental problems that his family and others recognized.

So how did he get his guns? Did he buy them legally? Did his mother get them for him?  The New York Times reports that when a reporter asked a neighbor whether he ever saw Mercer with a gun, the reply was “I’d rather not say,” which sounds like he was thinking “Yes, I saw him with a gun and I knew he was crazy and now I feel like dog meat.”

“I've been waiting to do this for years,” Mercer told a professor before gunning him down, according to a CNN report.  Combine this statement with the ease at which he operated his firearms and the fact that he had three with him: two handguns and a long gun, which is a gun with an extra-long barrel. Consider all these facts and we can only conclude that someone who knew he was unbalanced also knew he liked to pack. It defies reason to believe that none of the people who suspected this kid was mentally ill knew he liked guns and had a few.

We cannot, however, blame mental illness for what Mercer did. Nor can we blame his parents, do-nothing neighbors or guidance counselors at whatever schools he attended. We shouldn’t even blame the gun dealers who sold the weapons, assuming that they followed all existing laws at the time.

The blame falls fully on the laws themselves—correction, the lack of laws regulating the sale, ownership and use of guns in the United States. 

Even though the federal government banned the use of tax dollars to study gun safety years ago, enough research exists to state unequivocally that the more guns there are in a society, the more people will die and be wounded by guns. Nations in which there are few guns have lower rates of gun deaths. The United States with the highest number of guns in the hands of its citizens has the highest number of gun deaths per capita a year. 

It’s true that criminals will get guns no matter how few guns there are afloat in society. It’s also true that no one can stop the psychopath or spurned lover who wants to take out a dozen or more people with a spray of bullets.

But if we had fewer guns, we would have fewer deaths, fewer mass murders and fewer crimes committed with firearms. That’s tragically clear from the available research.

We need to act on virtually every front on the local, state and federal levels to control the distribution and use of firearms. Here is what I would propose:
·         Increase the wait time for firearms purchases to a month and make the application process more rigorous.
·         Require gun owners to get a license with testing requirements at least as rigorous as those required to drive a car; include a psychological test as one the requirements.
·         Ban the sale and use of all automatic weapons and ammunition.
·         Make all states participate in a national gun registry and implement an active campaign to improve the information in that registry.
·         Ban private citizens carrying firearms on all college campuses and in all public buildings, modes of public transportation, arenas, movie theatres, other entertainment venues, restaurants, malls and retail outlets.
·         Ban carrying firearms by employees in their places of employment or their employer’s parking lots, unless as a requirement of the job.
·         Repeal all “stand your ground” laws.

Evoking the Second Amendment has always been a canard. The National Rifle Association and others opposed to gun control laws make two mistakes: 1) They wrongly infer that infringe means “can’t regulate”; 2) They misunderstand that the stipulated purpose of private ownership of firearms in the Constitution was to allow participation in a militia (volunteer army).  

Despite what the gun lobby says, the gun control issue is not a matter of personal freedom, unless you propose that people should have absolute freedom to do whatever they like with no constraints regardless of the impact on others. No, gun control is a matter of safety and the social contract by which we all agree to follow certain rules for the good of all of us.

As it turns out, only about one third of American households own guns, down from more than 50% in 1978. Almost 90% of all Americans and three-quarters of NRA member support stiffer gun control laws. Thus, less than one third of the country is bullying the rest of us to accept guns and the death and destruction they bring.

It’s time for the voters in the two-thirds of all households without guns to let their elected officials and the candidates know that if they want the vote, they better support implementing tough gun control laws.

Tuesday, September 29, 2015

Pope is right to hate cap-and-trade, which is akin to the Church selling indulgences

Yale economist William Nordhaus writes as if he wants to address human-induced global warming—euphemistically called “climate change” even by the most ardent environmentalists—but I think he loves what he calls “the market” more than he does the environment.

You can see him grasping for straws to balance his love or humankind and other living things and his greater love for the “market” in his recent New York Review of Books critique of Laudato Si’, Pope Francis’s encyclical on the environment and capitalism. While he applauds the Pope’s concern for the environment, he essentially condemns the Pope for specifically rejecting the use of carbon credits. To do so, he has to take a leap of faith similar to the one taken by Pascal and Kierkegaard. But instead of leaping towards a silent, hidden god, Nordhaus leaps towards the infallibility of “markets.”

Nordhaus does a good job of describing how the carbon credit system, also called cap-and-trade, operates, so I’ll repeat his brief explanation: Cap-and-trade begins with actions by which a country, through its government, caps or limits its carbon dioxide emissions. The country then auctions or issues a limited number of ‘emissions permits.’ These convey the right to emit a given quantity of emissions. Firms that own the permits can use them or sell them on carbon markets, while firms who need them can purchase permits. The advantage of establishing a market in permits is that it ensures that emissions are used in the most productive manner.” 

The Pope rightly asserts that the trading of carbon credits can lead to speculation and enables countries and industrial sectors to buy the right to pump excessive pollution
into the environment. The Pope doesn’t mention another problem with trading carbon credits: it give these dirty industrial companies and utilities absolutely no incentive to clean up their acts.

It makes sense that the Pope condemns markets. Markets by their nature are brutal, because they reduce everything to money, and not to the well-being of a community and its members. The market assumes that all market players are individuals, responsible for their own selves. Market theory further assumes that the mostly unguided action of all these individual players will lead to the greatest good for all. This basic premise strikes me to be as much based on faith as is the idea that a half god-half man born of a virgin died for our sins and came back to life three days later. I have a feeling that Pope Francis would rate the absurdity of the invisible hand much lower.   

I’m uncertain why Nordhaus has so much faith in markets, when it is the market economy that has helped to create the environmental mess in which we find ourselves in several ways: 1) The market hides the social cost of pollution by reducing the value and cost of producing goods and services to dollars and cents; 2) The market mentality has contributed to the rampant consumerism that has infected all western-style economies, thereby driving the rapid rise of greenhouse gases, resource shortages and other environmental challenges.

Like all those who believe in the religion of free markets, Nordhaus has to construct an overly complicated argument for why the current market does not work to benefit the environment. Basically, he (and others) say that environmental degradation results from “distorted market signals” that put too low a price on environmental effects. The good professor uses as his examples the water shortage in California and people dying before their time because of small sulfur particles in the air. In both cases, he blames underpricing—if people paid more for water or air pollution, they would use less. That argument ignores the fact that the wealthy won’t care what they pay, which will engender an inequality in resource access similar to the gapping inequality in wealth that currently exists throughout the planet. It also ignores the fact that water and some of the products made in processes that emit sulfur particles are necessities for human life.

Nordhaus is talking in convoluted euphemisms. What he means to say is that the market isn’t working because it’s leading to the carbon-loading of the atmosphere and oceans.

And his solution for something that isn’t working? Create another thing just like it. A market for the right to pollute.

Wouldn’t it be much simpler just to set limits for each industry and make companies pay huge fines and shut facilities if they can’t meet the standards? Sure prices will go up, but I assert that instead of raising prices, corporations could absorb some of the costs to pay for pollution controls, more fuel-efficient processes and alternative energy. All they have to do is shrink the profit before paying executive salaries, bonuses and benefits. In other words, executives could choose to pay themselves and shareholders less.  That certainly won’t happen with cap-and-trade.

The essence of cap-and-trade is a dirty company paying a clean company so that it can keep polluting. The immorality of this market solution will leap into focus when you think about rich folk paying people to serve in the military in their place during the Civil War. What about someone who paid the Catholic Church money to receive absolution for sins or a church office for a ne’er-do-well nephew in the 15th and 16th centuries?  These situations rightly offend us. Cap-and-trade is the very same thing. Nordhaus’ argument that cap-and-trade enables society to use its carbon emissions most productively would apply to the wealthy draft dodger or church manipulator. Why get the wealthy banker’s son shot up when he could be making lots of money that he will use to build an art collection to donate to a museum for a tax write-off?

In both the analogies I gave, an informal market was created: Buying and selling humans for slaughter. Buying and selling church favors. Buying and selling the pollutants that are rapidly degrading our planet. Do you see a difference?  I don’t, nor does Pope Francis. Only a true believer in markets blinded by the invisible hand would.