Tag Archives: corruption

Doubts about Climate Change

Old timers like Jeremiah recall that winters used to be longer and colder.  Old photos in ski lodges invariably show more snowpack and a bigger glacier.  There can be little doubt about climate change.  One can, however, doubt the policy response.

Do you agree with President Obama, that climate change is the greatest threat facing humanity?  Jeremiah can find, without exerting himself, at least a billion people who feel more imminently threatened by hunger.

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Among resource crises, the shortage of fresh water is easily more urgent.  With oil at $40 a barrel, the world’s desalination plants should be running flat out.  Alas, water is universally mispriced and so squandered.

A global outreach to discourage meat would go a long way.  Raising animals for food is an egregious waste of resources, especially fresh water.  Plus, livestock produce methane, a much worse greenhouse gas than carbon dioxide.

The root cause of our resource problems is overpopulation.  So, why not a global program to promote birth control?  Better yet, a global program (backed by sanctions and incentives) to mandate equal rights for women.  You can’t go wrong emancipating half the world, plus – fertility drops off sharply once women stop being chattel.

 “Population policy has been abandoned in recent decades. It is barely mentioned in discussions on sustainability or development” – Simon Ross

Why are the world’s policy makers focused on climate change, a distant and secondary effect, instead of root causes and immediate returns?  There is no logic to it, unless we apply our imagination and think like a criminal.

State control over energy is the mother lode of political rent seeking.  Politicians wielding this power can make or break any company they choose.  Those who donate generously can be rewarded with “green energy” grants.  Those who don’t can be sanctioned, without much evidence.

You can’t do that with birth control.

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Selling Out

The Economist has been just brutal on President Obama’s foreign policy, despite having endorsed him in 2008 and again in 2012. They had some other policy in mind, and Jeremiah knows what it is. To prove it, we confidently predict the magazine will endorse Jeb Bush in 2016. Need a hint? Here is the latest shameless advertisement for Common Core.

Pearson2014

The data in this chart is from Pearson’s annual report. We love The Economist, but it is chump change to the money Pearson makes from its multimillion dollar no-bid education contracts. They might as well use it for an advertising vehicle. Oh, and did we mention that “Doctor Evil,” Eric Schmidt of the Google-NSA security apparatus, recently joined the board?

A Politico investigation has found that Pearson stands to make tens of millions in taxpayer dollars and cuts in student tuition from deals arranged without competitive bids in states from Florida to Texas.

As for the substance of Common Core, centrist Jeremiah splits the difference. Standards, testing, and merit pay – good. Reliance on agitprop course packs – not so much. At this point, the best way for The Economist to recover its editorial integrity would be for Jeff Bezos to buy it and make it into an app.

Update:  Shortly after this post, Pearson sold FT.  As of this writing, July 28, they also plan to sell The Economist.  Someone must be reading Jeremiah.

See also: Strictly Fishwrap

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Taking Your Stuff

Police-might-shoot-you-during-a-traffic-stopBelow is an abridged transcript of the Fifth Amendment. Not too bad, is it? The government is not allowed to take your stuff, much less kill or imprison you without due process. Plus, we have habeas corpus – the right to our day in court, with a jury of our peers.

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury … nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

It’s just as well that you never learned this in public school, because it’s obsolete. Not only can the government take your stuff – and they are constantly dreaming up new ways to do it – but they can outright kill you with no “due process” at all.

We have covered extrajudicial killing previously. That’s the doctrine that if you are merely accused of being a terrorist – by a properly anointed government official, of course – your own government can murder you, and never present evidence to anyone. If that sounds paranoid to you, there is plenty of backup on the ACLU web site.

The U.S. targeted killing program operates without meaningful oversight outside the executive branch, and essential details about the program still remain secret

Short of taking your life, the government can absolutely take your property. This used to be called eminent domain, as in the famous Norwalk case. True story – the city turfed these people out of their homes so that they could build a mixed-use retail block.

Eminent domain is passé now, because city governments are getting desperate. Now the police can rob you in broad daylight, like some banana republic. It’s not true that Loretta Lynch invented civil asset forfeiture but, as New York’s D.A., she was a big proponent. Lynch is now America’s “top cop,” the Attorney General of the United States.

… civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited.

Perhaps you have heard of deposit structuring. This is a truly Kafkaesque money grab, as if the IRS were not already omnipotent. If you deposit more than $10,000 cash into your bank, you might be a terrorist, or laundering drug money. You might also be depositing the week’s take from your hair salon, but never mind – you have to fill out Form 8300.

Here’s the Kafkaesque part. If you deposit less than $10,000, you do not have to fill out Form 8300 … and now the IRS seizes your entire bank account! That’s because you are apparently dodging Form 8300. Good luck suing the IRS. You are guilty until proven innocent, plus you’re broke.

The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent.

The list goes on and on – the DEA, IRS, ATF, the Patriot Act (or whatever), RICO, FINCEN, and the DHS. Government agencies have more power to deprive you of life, liberty, and property than was ever dreamed of in 1791.

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American Gulag

There is some scary stuff going on with law enforcement in America. Last week, we reported on civil asset forfeiture, and now the leading practitioner of this nefarious program has been nominated for Attorney General. We have been following the trend of police militarization and, today, we bring dispatches from America’s carceral state. Meanwhile, habeas corpus looks like it’s gone forever.

Now, in our outsourced, corporate gulag, you can be locked up and never see your family again – at least not live. The new thing is prison visits on low-def video, for which your loved ones will pay a premium. That means more revenue and lower costs for the prison industrial complex. If you have ever had the experience of a prison telephone visit, you know what a cruel scam it is. Video calls will certainly be worse and, no – they are not allowed to visit in person.

America has about 5% of the world’s population but almost 25% of its prisoners, with the world’s largest number of inmates and highest per capita rate of incarceration

Law and order types say that prison is intended to be punishment. We refer them to the Constitution’s prohibition of “cruel and unusual” punishment, and the Supreme Court’s ruling against California. Ironically, while California is generally a liberal state, it is also broke. The Supreme Court found that extreme overcrowding in Californian prisons amounted to something like torture. Prisoners are left to die from agonizing diseases. If you’re one of these law and order types, go ahead and read the judgment.

The answer to overcrowding is not simply to build more prisons. We incarcerate more people, per capita, than any other civilized country – by a wide margin. See chart below, and this wonderful infographic from Pew. There are 2.5 million Americans behind bars. If the “carceral state” were actually a state, it would be our 36th largest, just behind Nevada. In his book, Jonathon Simon makes the case that mass incarceration is fundamentally at odds with the Eighth Amendment.

Prison Chart

The answer, in terms of policy choices, is blindingly obvious. As judge Morris Hoffman writes, “there is a large body of criminological research that shows that just a handful of criminal law doctrines — including three-strikes laws and mandatory minima for simple drug possession — drive sentences substantially higher than the average citizen believes is just.” The ACLU should be campaigning hard against these doctrines.

Just a handful of criminal law doctrines — including three-strikes laws and mandatory minimums for simple drug possession — drive sentences substantially higher than the average citizen believes is just.

Behind the doctrines is a sinister convergence of interests between “law and order” politicians and commercial interests. Politicians can reduce crime by budgeting more money for law enforcement or, more cheaply, by passing tough sentencing laws. Like pension commitments, these laws create unfunded liabilities that come due after the politician is gone and the prisons are full. Yes, in America people really do serve life in prison for marijuana.

[Supreme Court Justice] Kennedy… called it “sick” that the state’s prison-guards union had sponsored a notorious ballot measure that … now keeps far too many Californians locked up.

The commercial interests include private prison operators, subcontractors, and – for public prisons – the prison guards’ union. These are groups who profit from a large prison population. They lobby very effectively for long sentences, and against rehabilitation. Corrections Corp. has annual revenue of $1.6 billion, and is currently rated a strong buy. See stock chart, below.

CXW Chart

This is not to say that private prisons are bad, operationally, but it does mean that we have a system of perverse incentives. Instead of rehabilitating people, we have incentives to warehouse them cheaply for as long as possible. As with much else in government, this boils down to cost accounting. We do not hold our leaders to account for the economic and social costs of their decisions.

It was nice to see the Supreme Court rule on this, but it took an extreme case. We, the voters, should be taking action. Otherwise, we can add the Eighth Amendment to the growing list of “rights we used to have.”

See also: End Mass Incarceration Now

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Bogus Capitalism

HappyBankerThe expression “crony capitalism” is misleading. Capitalism is all about competition, which drives innovation and keeps prices low. Cronyism means using government connections to stifle competition. This leads to confusion on both sides of the aisle.

Republicans believe uncritically in helping business, which often means protecting entrenched companies from the rigors of competition. Democrats generally want more power to regulate companies, which only produces more opportunities for rent seeking.

The result is a vicious cycle, in which big government abets monopolistic companies. Here are a few of the cases we’ve looked at recently:

Here is how the cycle works. Someone says capitalism isn’t working – we need to step in and regulate, bail them out, form a new agency, or whatever. Connected companies then soak up the bailout money and capture the regulator – at the expense of taxpayers, consumers, et al.

This drives our economy farther down its thirty year death spiral, and soon someone observes that capitalism isn’t working, again. Wash, rinse, repeat.

Jeremiah’s reaction to “capitalism isn’t working,” is incredulity. Capitalism? Where?

See also: You Say You Want a Revolution

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Rule of Law

RuleOfLaw2014Remember that bit where Jon Stewart makes fun of Uruguay? Shown here is the latest Rule of Law ranking from the World Justice Project. Once again, Uruguay comes in just below America. They should be ashamed, although – their government is not quite as corrupt as ours.

Rule of Law does not mean a Congress full of lawyers churning out bespoke laws – or, worse, federal agencies writing arbitrary regulations. What it means is that everyone is treated equally by the law, everyone understands the law, and laws are reasonably stable over time.

Law experts say that average citizens routinely break federal law without any knowledge they are committing a crime.

Apart from the obvious impact on personal freedom, Rule of Law – or lack of it – has profound implications for our economy. Companies, especially foreign ones, will not hire if they face a shifting and arbitrary environment.

If the actions of the state are to be predictable, they must be determined by rules fixed independently of the circumstances – F.A. Hayek

Corruption figures prominently in the WJP report. When a big company can rent a government agency, as Comcast did here, that distorts the whole idea of capitalism.

This particular distortion of capitalism leads to secular stagnation. Big, obsolete companies use the government to protect their positions in the market, at the expense of new companies and new jobs. Below is the BLS chart of jobs created by startups.

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The Rule of Law survey ranks America twentieth out of thirty in our income class – and lower on corruption. This means that a new employer entering from abroad, or a new startup company, will think twice about “country risk” before hiring here.

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Cable Company Thievery

Bad_DingoJohn Oliver has the last word on net neutrality, which is a clear example of our government for sale to the highest bidder. Net neutrality, in brief, means that when you pay your cable company for internet access, the price includes whatever content you care to download – even if that is Netflix, which competes with content offerings from the cable company.

Verizon alone spent $100 million to lobby Congress on net neutrality since 2009

The cable companies would prefer to charge you extra for Netflix, or charge Netflix directly – and YouTube and Hulu – which amounts to the same thing. Because the cable companies are a monopoly (technically, a cartel) you are already paying more than most viewers elsewhere on the planet. Watch Mr. Oliver for the details. He’s entertaining and informative.

Obviously, weakening net neutrality would strengthen the cartel – and raise prices, reduce quality, stifle innovation, and block new entrants. The cable companies have no argument for their position except vague promises about using the extra money to build more bandwidth – something they would have to do anyway, if there were competition.

The cartel does not claim to be safer, greener, help the poor, or protect free speech. The only argument they have is the millions they have spent buying influence in Washington. That is why, in interviews, their answers are muddled, arrogant, and condescending. They are not talking to you. They are talking to Washington – and money talks.

See also: Washington Skills

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