You’re not American. It’s okay

It’s understandable to want to “belong.”  Waving your country’s flag means you’re happy to be a part of a group connected by the freedoms associated with consumer choice, political participation, and personal expression, with as little overt regulation as possible.  It’s what many living in the United States would call freedom.

Being American, however, goes beyond the baseball, hot dogs, apple pie, and Chevrolet.  Being an American is about being fully invested in the political economy of the United States.  It means being able to impact markets and influence policy makers.  It means you’re sitting at the table.  It’s a day-to-day operation to be an American because the alternative means not being able to enjoy the returns from your capital and using them as you see fit.

Being an American is more than just waiving the flag from the sidelines.  It means you own the company that manufacturers the flags; create the narrative around the flag; and get other people to buy into the narrative surrounding the flag.

Based on this view, 99% of us are not Americans.  We don’t control commerce.  We don’t control infrastructure.  We have little access to or own less than enough of capital to buffer ourselves against an economic downturn.  And after 400 years on the North American continent, blacks aren’t even looked at as American.  Other peoples of color are also looked at this way.

Nicholas Kristof argues this point on how blacks are not viewed as American in an opinion piece for The New York Times.  Citing the findings from a survey on racial attitudes, Mr. Kristof writes:

“One finding is that we unconsciously associate “American” with “white.” Thus, in 2008, some California college students — many who were supporting Barack Obama for president — unconsciously treated Obama as more foreign than Tony Blair, the former British prime minister. Likewise, Americans may be factually aware that Lucy Liu is an American actress and Kate Winslet is British, but the tests indicated that Americans considered Liu as more foreign than Winslet.”

This view of blacks in particular may be due in part to the failure of the administrative state to fully incorporate blacks into the U.S. political economy.  Social barriers taking the form of bigoted or racial attitudes were compounded by an administrative state that passed and executed laws that supported negative social attitudes.  Instead of a public policy of inclusion, the state chose exclusion.  One example stems from the almost 100 years it took for the state to incorporate the 14th and 15th amendments to the U.S. Constitution.  While the amendments were ratified in 1868 and 1870, respectively, they did not come a part of the national legal framework until passage of the Civil Rights Act of 1964, the Voting Rights Act of 1965, and the Fair Housing Act of 1968.

One irony is that the vast majority of whites are also not Americans.  Although on average whites have accumulated greater amounts of wealth than the United States’ ethnic minorities, most of their members do not wield any more influence on the political economy than people of color.

This may sound strange because we see the vast majority of individuals wielding political, economic, and financial power is white, specifically white male, but just because you hold a plane ticket doesn’t mean you get to sit in the cockpit and hold the stick.  License to fly is held by those with capital.

For some it may be a bit of a downer to hear that waving the flag is not that significant, but they should remember that we are still United States citizens.  As a citizen we can use the legal rights afforded to us by this jurisdiction to improve our communities.  We need not define ourselves by social nomenclature that represents a value system that treats our lives as less significant.

In the Open Country, rather than trying to occupy another’s playpen, we can build our own sand box.


Posted in capital, civil rights, commerce, democracy, Equality, human rights, libertarian, liberty, Political Economy, race | Tagged , , , , , | Leave a comment

Does salvation have a place in public policy? #liberty #socialprograms

Is the administrative state concerned preoccupied with salvation?  On foreign policy the United States spent over a decade nation building in Afghanistan and Iraq on the premise that citizens in both countries needed to be saved from autocratic rule.  Democracy was to be the “Jesus” of Afghanistan and Iraq with a pseudo biblical narrative provided by the American constitution and injected intravenously by American politicians and the military.

On the domestic front, the majority of the U.S. federal budget is devoted to saving people.  According to the Center on Budget and Policy Priorities, in 2013, 24% of the federal budget was spent on Social Security.   Three federal health insurance programs – Medicare, Medicaid, and the Children’s Health Insurance Program – accounted for 22% of the federal budget.  Other safety net programs, according to the Center, accounted for 12% of federal government spending.

You may ask what is wrong with the administrative state subsidizing consumer expenditures on food, health care, and other safety nets?  The problem that government “salvation” creates is the promotion of the belief among program clients of their personal destinies. Their lives become an open window that the administrative state pries open pursuant to onerous rules that require personal and financial disclosure. Like religion, program clients are required to bare their souls; sharing information on source of income, home address, family size, marital status, criminal records, and work history.  This is dehumanizing.

The rebuttal offered by social welfare proponents is that this is the price program clients pay in order to get benefits.  But should that price include giving up privacy?  

On the flip side, why do beneficiaries of social programs feel that they must submit themselves to government salvation?  Were they unable to build and maintain the social networks necessary for sustenance during the rough patches?  If not, should government be responsible for providing substitutes for those unavailable organic social agents?

Proponents of government intervention will counter that without the administrative state’s safety nets, society will be subjected to more crime, foreclosures, and family disruptions; that the costs of these negative externalities will be borne by society at costs higher than the programs designed to mitigate them. 

If that is the case then maybe the state should focus more on being a clearinghouse of information versus a behavior regulator.  The state can leverage information capital to facilitate pointing citizens toward resources that can substitute for the lack of organic social agents.  It shouldn’t take a thousand pages of rules regulating behavior to direct a person to resources that can help them.

The risk of submitting to the administrative state as savior is following a narrative that doesn’t promote individual liberty and self-actualization.  The state can avoid being a savior by simply providing good road signs.

Posted in Equality, liberty, Political Economy, poverty, public benefits, regulation, social networks | Tagged , | 1 Comment

Export-Import Bank: What good is a government if it can’t allocate #capital?

The downside of a society that is more narrative driven versus data driven is the resulting bandwagon effect.  Someone has a problem with a policy or a program and without one iota of quantitative analysis or data they go on a rant riddled with the usual ideological verbosity and if articulated forcefully enough is able to get more narrow-minded ideologues to follow along.  Both Democrats and Republicans are guilty of this as they continuously forego leadership opting instead to appease the ratchet wings of their respective parties.  It’s no wonder Congress gets low ratings.

The narrative opera is hitting high pitch as the U.S. Export-Import Bank faces its final curtain call on 30 September, the last day of Fiscal Year 2014.  Congress must vote to reauthorize the bank by that date or, according to the Bank’s supporters, the United States will lose an important role player in America’s attempts to keep the economy chugging along.

Just what is the Export-Import Bank?  According to 12 U.S.C. 635(a)(1), among the objects and the powers of the Bank is the financing and facilitating of the export of goods and services, imports, and the exchange of commodities between the United States, its territories, or insular territories, and foreign nations or their agencies or nationals.  The Bank can provide these services by authorizing loans, guarantees, insurance, and credits with the goal of increasing employment in the United States.  According to the Bank, they are not competing with the private sector.  They assume credit and country risks when the private sector is unwilling or unable to do so.  They also try to level the playing field particularly where other countries are subsidizing their exports to the United States.

Supporters like U.S. Senator Tammy Baldwin, Democrat of Wisconsin, have been repeating the policy goals provided in the law; that the Bank helps create global competitiveness and allows businesses here in the U.S. to create jobs.

Some Republicans, on the other hand, would give the impression that re-authorization of the Bank would amount to return to 18th century mercantilism.  They are not impressed with the Banks eighty-year record of supporting $600 billion in U.S. exports.  Instead, they have made claims of “crony capitalism” in their opposition to continuing the Bank.  Recently, House financial services committee chairman Jeb Hensarling took a trade group and Boeing to the woodshed for their attempts to marshal Congressional support for re-authorization.  According to The Huffington Post, Mr. Hensarling, in a letter to Boeing chairman James McNerney and Jay Timmons, president of the National Association of Manufacturers, said the following:

“I respect your constitutional right to petition your government for the redress of grievances,” Hensarling wrote to Timmons and McNerney. “I just wish you had used the occasion to petition for opportunity instead of special privilege.”  

There is a historical irony here, of course.  Republicans, who are always first out of the gate to talk about the Founding Fathers and adhering to the nation’s economic traditions forget that the United States was spawned from petitions for special privilege.  Christopher Columbus’ voyages to the New World were financed by the Spanish crown.  

The British monarchy granted individuals charters permitting them to settle in North America and carve out the thirteen colonies from whence the United States came about.  

The granting of monopolies was a special privilege to communications companies and utilities that allowed the construction of railroad and communications infrastructure by private entities that needed the protection from investment destroying competition and inefficiencies that only such franchises could provide.

In this case the “special privilege” at issue isn’t keeping any firms out.  The Bank invites small and large companies to seek out its services.  Rather, the Bank is helping companies knock down barriers to capital access and international markets.

Congress has a duty to regulate commerce, but regulation doesn’t mean stifling the flow of capital necessary for commerce to achieve liftoff.  Regulation can easily mean taking the foot off the brakes and pushing the throttle forward and by re-authorizing the Export-Import Bank, the economy takes another step toward achieving full employment.   

Posted in banks, business, capital, commerce, Congress, credit, Economy, employment, globalization, labor markets | Tagged , , | Leave a comment

On #poverty, .@RepPaulRyan’s approach is too top-down

In an opinion piece in The Wall Street Journal, U.S. Representative Paul J. Ryan, Republican of Wisconsin, shared his thoughts on the appropriate fiscal approach for resolving the issue of poverty in the United States.  In his piece Mr. Ryan tries to clarify that in past comments on the level of social program participation that he did not intend to attack individuals who are recipients of social program benefits but wanted to point out that the current philosophy of American government erodes the American ideal.

That ideal, according to Mr. Ryan, is a society where Americans govern themselves.  Faith should not be placed in government but in the actions of a free people, says Mr. Ryan. Again, according to Mr. Ryan:

“And instead of managing poverty, we’d actually be fighting it. Today, we’re spending almost $800 billion on 92 federal antipoverty programs—and yet we have the highest poverty rate in a generation. That’s because the solution can’t be found in a federal bureaucracy; it lies within individual Americans and the community that surrounds and supports them.

As it stands, we’re not empowering people; we’re overseeing them. That’s got to change. We need to see an individual’s problems and potential. Our goal shouldn’t be to simply meet their needs; we should help them tap into their talent and achieve their goals.”

I don’t think his plan goes far enough, however.  Frankly, it is still too top-down.  To get to a more self-governing society there will have to be greater initiatives on the local level.  Local communities will have to generate and accept a more “we run this” mindset versus looking upward for manna fro the national level.  Mr. Ryan is correct that unnecessary top-down regulations from the national government will have to be eliminated so that citizens and their localities will have the flexibility to govern their commercial relationships.  

To facilitate the self-governance of commercial relationships, national, state, and local governments will have to streamline their roles to that of infrastructure providers and maintainers while leaving the stewardship of commerce to producers and consumers.  Roads, airports, harbors, and bridges connecting self-governing communities have to be built and maintained and using government may be a cost-effective way of sharing risks among local communities for deploying infrastructure.  The restructure of government’s role is where the real work will take place. 

Mr. Ryan, along with his other conservative colleagues may have to start taking a few more risks themselves by getting out of the rhetorical box that has “less government spending” as its mantra and offer up concrete approaches to restructuring society so that poverty is appropriately addressed through a paradigm of self-governance.

Posted in commerce, Congress, culture, democracy, Economy, free markets, government, libertarian, Paul Ryan, Political Economy, poverty, regulation, Republicans, self regulated markets | Tagged , , , | 1 Comment

#Ferguson, Missouri: Why are we surprised when a snake bites?

One of the benefits of my ban on broadcast or cable news is that I am less inundated by biased coverage of news events.  I would hate to see how Fox News or MSNBC are skewing the events occurring in Ferguson, Missouri in the aftermath of the police taking the life of a teenager named Michael Brown.  As a father I again had to go through the ritual with my son where I remind him how to engage the police in order to reduce the probability of young Mr. Brown’s fate.

I, unfortunately, am becoming desensitized to these events.  They, including the acts of police and the protests that follow, no longer surprise me.  As my great friend and journalist, Barrington Salmon, noted, “Why are we surprised when a snake bites.  That’s what a snake does.”   Given Ferguson’s demographic make up and political power structure, Ferguson carries a lot of venom.

According to The New York Times, Ferguson, Missouri, a northern suburb of St. Louis, has a population of 21,000 people, two-thirds of whom are black.  In 1980, 85% of the population was white, but as blacks started to move into the city, “white flight” took hold and the racial makeup began to change.  What did not change was the political and economic power structure.  Whites still control the city council, which is made up of five whites and one Hispanic.  Of the 53 officers on the Ferguson’s police force, only three are black.  

With this imbalance of economic and political power, it should be expected that Ferguson’s administrative state would take actions to protect against any perceived threat to the structure including the use of deadly force by the agents commissioned to protect the power structure, in the case the Ferguson police force.

For the black residents of Ferguson the most effective action plan that they can take against what they have described as an abuse of the administrative state’s power would be to boycott against the city’s economic structure.  Rather than burning down stores, stop patronizing them.  Ferguson should simply be somewhere to sleep and not a place where money the rest of disposable income is spent.

Such an approach will take true leadership from the civil rights advocates that pop up out of the wood works when events like these happen.  It will take coordination and planning to get people to travel on limited budgets to other areas to shop for groceries and other items.  Boycotting takes money and time, but the decision will have to be made that the benefits of grinding it out and sending a strong message to the city’s economic and political power structure are worth it if black residents really want to create a safe environment to live in.  There is no better option but to de-fang the snake.   

Posted in black American, civil rights, crime, democracy, Equality, human rights, Political Economy | Tagged , | 2 Comments

What keeps Mitch McConnell from letting his people go?

Annie Lowery wrote a piece for The New York Times discussing the hard times faced by the residents of Eastern Kentucky.  Ms. Lowery identifies six Kentucky counties (Breathitt, Clay, Jackson, Lee, Leslie, and Mayoffin) that rank among the ten poorest in the United States.

Among the causes leading to poverty in these counties is a lack of infrastructure that results in isolating these counties from commercial activity and opportunity; and very low investment in education.  According to Ms. Lowery only 7.4% of Clay County residents have a bachelor’s degree or higher.

The educated are more likely to move as a result of their higher level of personal human investment but the poor are pretty much stuck with little in capital necessary for leveraging an escape.

I wonder how persistent poverty best serves any state’s political and economic oligarchy.  As the article points out federal investment has failed to lesson the impact of poverty in Eastern Kentucky.  What kind of returns are the political and economic oligarchs expecting to gain from poverty?  

Posted in capital, culture, Economy, government, Political Economy, poverty, unemployment | Leave a comment

Random thoughts on #HobbyLobby

There are two takeaways from the case. First, the state’s mission is to use government as a redistribution mechanism for wealth. This is why factions, left, right, and center, battle for control of government every two years.

In the case of an entrepreneur, the government wants to ensure that part of the entrepreneur’s wealth (positive or negative) goes toward funding of benefits that the electorate has no fiscal stomach for funding itself, in this case access to health insurance and the benefits attached to it. The entrepreneur will either purchase a plan for her employees; pay a fine; or push the employees on to an alternative like Medicaid, if it is available. Under either scenario, the entrepreneur is forced to make a decision she otherwise would not have absent the government’s action.

The second takeaway is that for start-ups, how they organize their business must take into account the “political economy” promoted by the state at the time they form. In other words, what type of environment is the state promoting and how will it impact my ability to generate revenues and hopefully sooner than later earn a profit. In the case of the Affordable Care Act, more entrepreneurs may leverage innovative technology and outsourcing to get around hiring employees and paying exorbitant benefits packages. Why have a payroll when you can retain a mix of temporary workers and independent contractors.

I predict over the next decade more individuals, especially skilled or professional workers, will find themselves in the independent contractor ranks and purchasing benefits on their own. That will be a great day for ….#TheOpenCountry

Posted in Economy, employment, entrepreneur, government, labor markets, libertarian, liberty, Political Economy, public benefits, regulation | Tagged , , | Leave a comment

Forty million dollars was not enough, #NewYorkCity

Yesterday after my son’s performance at the neighborhood arts center, I decided to treat him to a Frosty. “I want a Frosty shake, Dad.” It was Friday so I said what the heck. We enter the restaurant and on a very rare occasion I felt unsafe. Why? Because there were five armed individuals in the store, each of them authorized by the state of Georgia to execute deadly force.

We call them Babylon Bandits. (Full attribution to Barrington Salmon for coining the phrase.) The rest of you call them … the police.

They sat there calmly engaging in cop chit chat and a few minutes later they left. My blood pressure started to go down as the distance between these paid hunters and my son and me increased as they entered their vehicles.

The reality behind raising a son is that as he gets older and taller he inches onto the profile and within the gun sights of these “Urban Cowboys.” As individuals some of these men and women may be cool, but I don’t want to get too close to them to find out.

As the recent settlement between the City of New York and five men wrongfully accused of raping a jogger in Central Park should remind us, unless we are old, gray, and in a wheelchair, we are target practice for a law enforcement and judicial system that still views us as chattel….

Forty million dollars was not enough …..

Posted in black American, civil rights, human rights, race | Tagged , , , | 1 Comment

#NetNeutrality: Is @Netflix posturing?

The New York Times has an article talking about the net neutrality spat between edge provider Netflix and broadband access provider Verizon.  Netflix posted a warning to its subscribers blaming Verizon for a slow down in viewer streaming.  Verizon has taken issue with the warning, saying that the warning “is self-serving, deceptive, inaccurate and an unfair business practice.”

Sounds like Netflix wants its cake and the chance to eat it, too.  Probably a doughnut would be the better pastry of choice not only because its National Doughnut Day, but because Netflix’s argument has a whole in it.

Netflix’s data traffic accounts for 34% of North America’s downloads, according to The Wall Street Journal, testament to America’s appetite for video services online.  With that amount of traffic there is bound to be congestion. According to The Journal:

“Overall, Internet traffic is becoming a much more concentrated affair, even as regulators in Washington debate rules to encourage new competitors by maintaining, in theory, equal access to broadband subscribers. The biggest online brands like Netflix, Google,Apple AAPL +0.59% and Amazon account for a dominant share of Americans’ personal data usage. The growth is fueled by the large size of video files offered by a few of the most popular sites.”

Hope you read the above paragraph carefully for the net neutrality side note.  Not only are we seeing heavy video traffic, but heavy traffic coming from an increasingly concentrated source of edge providers.  Netflix and Google talk about strong net neutrality while distracting their grassroots supporters from the lack of “search neutrality” on the edge provider/content producer side.

I have no problem with concentration.  It signals the market that it may be time to invest in a little disruptive technology.  Let it concentrate then blow it up.  What I have a problem with is the posturing on the part of Google, Netflix, and other large edge players seeking to optimize their positions on the Internet with a little deception of their own.  Just be honest about it.

Posted in broadband, broadband access provider, cable, Federal Communications Commission, Internet, media, net neutrality, regulation, technology | Tagged , , , , , | 2 Comments

#Broadband: Why would an edge provider let @FCC see its business model #netneutrality

Technocrat’s Anne L. Kim blogged on comments Consumer Electronics Association CEO and president Gary Shapiro made at a recent Brookings Institution event.  Here is an excerpt from her post:

On net neutrality, Shapiro wants more of a hands-off approach from the government. He wants to see government allow industry and nongovernmental organizations establish principals. “And if the principals are violated, then act,” he said.

“I personally am fearful of all of a sudden sending those companies into a new area of regulation like utilities,” referring to the FCC considering using Title II of the 1996 Communications Act to rewrite net neutrality rules.

He said he likes things the “way they are” and that he’s rather not see them changed, adding that “good intentions scare me.”

Take a look at Title II, something more edge providers need to do, and you can appreciate some of Mr. Shapiro’s fear.  For example, section 211 of the Communications Act requires that common carriers (a classification that net neutrality advocates want applied to broadband providers) file copies of all contracts that they have with other common carriers.  So, if Google, a broadband wannabe, has peering or transit contracts with Comcast, Google will have to file its contracts with the Federal Communications Commission, and probably with state public utility commissions as well.  If these contracts contain information regarding traffic from certain edge providers a la Netflix, Netflix wouldn’t be happy that some aspect of its business model may be on public display with the FCC.

This type of transparency may bring joy to net neutrality proponents but not to the edge providers they purportedly are so concerned about.  In my opinion, letting the government have a copy of a contract entered into autonomously is the same as the government regulating your free speech.  Unless there is a dispute to be resolved between two parties to a contract, I see no reason to let the government have access to its contents.  If edge providers want to see a slippery slope created that takes regulation right to their doorsteps, Title II will lay the bricks for that driveway.

My walk down the Yellow Brick Road of regulation gets scarier when I take a look at section 215.  Section 215 allows the FCC to examine transactions involving the furnishing of services, supplies, equipment, personnel, etc., to a carrier.  Also, the FCC, pursuant to this section, may examine transactions that impact charges a common carrier assesses for provision of wire or wireless services.  Section 215 also allows the FCC to determine how reasonable these charges are.  Also, the FCC may report its recommendations to Congress as to whether charges are invalid and should be modified and prohibited.

Now, not to knock on Google, but since they are the Internet flavor of the week given the disclosure of their perceived wretched diversity in hiring practices, disclosing matters regarding personnel much less on their services should make the company and its investors think twice about supporting net neutrality brought to you via Title II classification.

All of Title II should be scary to venture capitalists, private equity, and their investor clients, but section 218 should bring great pause. This section allows the FCC to inquire into the management of all common carriers.  The FCC may obtain management information not just from the carriers, but from entities that directly or indirectly control them.  That, in my mind, includes private equity firms or venture capitalists that may have a controlling interest in some little regional or rural broadband provider.  With the SEC stepping up its scrutiny of private equity via the Dodd Frank Act, does private equity want another alphabet soup agency knocking on its door?

Here is one more, especially for the app developers.  Section 231 speaks to app developers, or more definitively access software providers.  This section prohibits the use of the World Wide Web to transmit material harmful to minors.  I wonder how many apps fall under this category.

When you look behind the curtain of good open network intentions, you can find some scary stuff.

Posted in broadband, Federal Communications Commission, Internet, net neutrality | Tagged , , , , , | Leave a comment