Federal officials view Americans as largely uninformed on key public policy issues, according to a new study from Johns Hopkins University.
A survey of 850 federal bureaucrats conducted by Hopkins finds that most non-elected officials think Americans know "very little" about key issues. Researchers found 73 percent of government officials think the public knows little or nothing about programs aimed at helping the poor, for instance.
The yearlong study was conducted by political scientists Jennifer Bachner and Benjamin Ginsberg. It will appear in a book -- "What Washington Gets Wrong: The Unelected Officials Who Actually Run the Government and Their Misconceptions about the American People" -- to be published next week.
"This disdain for the public results from the wide gulf between the life experiences of ordinary Americans and the denizens of official Washington," the authors write.
"Official Washington is wealthier, whiter and better educated than ordinary citizens. It lives in its own inside-the-Beltway bubble, where Washingtonians converse with one another and rarely interact on an intellectual plane with Americans at large."
The results and the book come during a presidential election that has amplified a sense among many voters that Washington is out of touch with the citizens they serve. Republican nominee Donald Trump has largely built a campaign around that theme.
The findings are based on a study of officials working at federal agencies, on Capitol Hill and in other Washington policy jobs.
Researchers found that 71 percent of federal officials think the public knows little or nothing about science and technology policy. Just over six in 10 think the public knows almost nothing about childcare.
Earlier findings from the study released in 2014 indicated that the federal workforce is whiter, richer, more educated and more liberal than the rest of the country.
At the time, a spokeswoman with the American Federation of Government Employees, said the study had "horrendously misrepresented the federal workplace."
Friday, September 30, 2016
Wednesday, September 28, 2016
On the debate stage Monday night, Hillary Clinton smugly repeated the big lie that Democrats have been telling with something close to impunity since 2008.
“We had the worst financial crisis, the Great Recession, the worst since the 1930s,” said Hillary. “That was in large part because of tax policies that slashed taxes on the wealthy, failed to invest in the middle class, took their eyes off of Wall Street, and created a perfect storm.”
In fact, tax policies had almost nothing to do with the recession of 2008. What caused the market crash was the collapse of the subprime market. If that collapse had an architect-in-chief, his name was Bill Clinton. This is not a speculation. It is an easily documented fact.
When Bill Clinton was inaugurated in 1993, the homeownership rate was lower than it had been when Richard Nixon was inaugurated in 1969. Despite increasing prosperity, despite the growth in the condominium market, the numbers were declining.
The Clintons wanted to push those numbers up. If they had been inclined to look, the explanation for the decline was simple enough: the collapse of the two-parent family. From 1970 to 2000, single-parent households, disproportionately black, increased 60 percent. In that same period, married couples with their own children fell from 40 percent of all households to just 24 percent.
The Clintons and their media allies refused to acknowledge family breakdown as a problem -- remember “Murphy Brown” -- let alone as an explanation for the disparity in home-ownership rates. Their preferred explanation for just about everything unpleasant, then as now, was the inevitable racism. This they could and would freely impute to less enlightened Americans, “the deplorables” as they would come to be known.
The Clintons found the confirmation they were looking for in a 1991 study by the Federal Reserve. According to the study, 61 percent of blacks had been approved in their quest for government-backed home loans as compared to 77 percent for whites. Bingo!
To make the racism story line work, the Clintons had to ignore another significant set of data, namely, default rates. A comprehensive HUD study of FHA loans for the years 1992-1999 found that blacks were defaulting more than twice as frequently as whites, and Hispanics were defaulting three times more frequently. If minorities had been held to a higher standard, their default rates should have been lower than whites, not higher. This was obvious.
No matter. As early as 1993, HUD began to bring legal action against those mortgage bankers who declined a higher percentage of minorities than whites. In 1995, the Clinton administration put teeth in Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which had merely “encouraged” financial institutions to “help meet the credit needs of local communities.” Under Clinton, regulators moved from encouraging to strong-arming.
The regulators were backed by the street-level bullyboy tactics of the late and unlamented ACORN, shorthand for Association of Community Organizations for Reform Now. Historically, banks had been reluctant to offer home loans to people who might not pay them back, and so ACORN set out to embarrass bankers into overcoming that reluctance.
A sympathetic media romanticized ACORN and turned what might have been a nuisance for the banks into a public-relations nightmare. As the New York Times reported approvingly, “The nation’s largest banks have come to the negotiating table just to silence objections that could derail or create costly delays to a merger.”
To make ACORN’s task easier, the Clinton administration demanded that banks quantify the progress they were making in giving loans to LMIs -- people of “low and moderate income.” The administration encouraged banks to use “innovative or flexible” lending practices to reach their LMI numbers.
Meanwhile HUD, which Congress had made the regulator of Fannie Mae and Freddie Mac in 1992, began to pressure these agencies to set numerical goals for affordable housing, even if that meant buying subprime mortgages. The media cheered the agencies on. A September 1999 Times article commended Fannie Mae for prodding banks to provide mortgages to those whose credit was “not good enough to qualify for conventional loans.”
With a gun to their head, the lenders turned to Fannie Mae and Freddie Mac to relieve them of the imprudent loans they were now being forced to make. Before the 1990s, Fannie and Freddie had sufficiently tough lending standards that default was not much of an issue. That would change.
In 1999, the Clintons’ newly appointed CEO, Franklin Delano Raines, was boasting of the changes Fannie Mae had already made and the changes to come. As he told the Times, Fannie Mae had lowered the down payment requirements for a home and now planned to extend credit to borrowers a “notch below its traditional standards.” That notch was spelled subprime.
Given the greater risk, subprime prospects typically have had to pay more interest to secure a loan. For investors, high interest translated into high yield. In October 1997, the investment banks Bear Stearns and First Union Capital Markets underwrote the first securitization of subprime loans for a total of $385 million.
The back-patting press release announcing the launch hit all the bubble-era hot buttons: these “affordable” and “flexible” mortgages offered the possibility of credit for “low and moderate income families” in “traditionally underserved markets.”
These securities proved enormously popular. They promised a 7.5 percent yield in a low-interest environment and, if that were not enough, a chance to cleanse one’s venal Wall Street soul by doing what appeared to be a social good.
To rally the base a week before the 2000 election, the Clinton administration announced historic new regulations that would put a further squeeze on Fannie Mae and Freddie Mac. “These new regulations will greatly enhance access to affordable housing for minorities, urban residents, new immigrants and others left behind, giving millions of families the opportunity to buy homes,” said HUD Secretary, now New York State governor, Andrew Cuomo.
The regs upped Fannie and Freddie’s “affordable housing” quota from 42 to 50 percent. “We have not been a major presence in the subprime market,” boasted CEO Raines, “but you can bet that under these goals, we will be.”
Raines deflected criticism by focusing on Fannie Mae’s success at social engineering. “We have met or exceeded our affordable housing goals, even as they have increased,” he told the Congressional Finance Committee in late 2003. He also shared the company’s “voluntary goal,” namely, to “lead the market in serving minority families.”
When President Bush expressed concern about the precarious state of Fannie and Freddie in June 2004, he triggered seventy-six Democrats in Congress to sign a letter warning that “an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.”
Despite early signs of impending disaster, Congress kept the pressure on. On June 27, 2005, Barney Frank, the ranking Democrat on House Financial Services Committee, took to the House floor to chide those who worried about a housing bubble.
“You are not going to see the collapse that you see when people talk about a bubble,” he lectured his colleagues. “So those on our committee in particular are going to continue to push for homeownership.”
And push they did. Subprime credit had become, what one wag called, “the mad cow disease of structured finance.” With a clean bill of health from the media and the Democrats, and a shockingly ignorant assist from Wall Street, the infected product was allowed to poison the entire economy.
No sweat for Hillary. The final convulsion -- Phew! -- occurred on George Bush’s watch.
Saturday, September 24, 2016
Probably since time immemorial, each generation has thought the next one lacked industriousness. But for the last half-century, this belief has been true of American men. Even as the economy has grown, a rising share of prime-age males have opted out of work.
Men Without Work: America’s Invisible Crisis, a brief book by Nicholas Eberstadt of the American Enterprise Institute, drives this point home forcefully, drawing on an impressive array of data to explain what’s happening and why.
The ups and downs of the economy obviously matter; more men stop working during recessions. But for half a century, there’s been a trend of increasing joblessness, as is especially obvious from the bars depicting decade-long averages. This trend does not go away when Eberstadt adjusts the data to account for things like rising college enrollment and an aging population.
Men who aren’t even looking for jobs are driving a lot of the trend. To judge from various surveys, these men fill their days with mindless leisure, sometimes including drugs. They are actually less socially engaged than men with jobs, with lower rates of church attendance and volunteering. In fairness, non-working men do spend about 30 minutes more each day on housework than working men, which puts them roughly on par with employed women.
Why is this happening? Eberstadt offers a number of explanations, some more controversial than others.
One obvious factor is that the economy has changed in ways that make life harder for low-skilled men, the group that has experienced the most pronounced drop-off in employment. We can argue about how much to blame immigration, trade, or technology for the shift, but the bottom line is that the days of easily available, decent-paying factory jobs for men with little education are over. This isn’t a full explanation—for instance, low-skilled immigrants don’t seem to have trouble finding jobs—but it’s a big one.
Another factor may be the rise of mass incarceration, though as Eberstadt notes, any policy change in this area must be made with an eye toward preserving public safety. Only about one-half of one percent of the American population is imprisoned at any given time, but that’s still five times the rate of the 1960s. Additionally, most prison sentences are short, meaning that while the “stock” of prisoners is low relative to the size of the total population, the “flow” of prisoners is substantial. During the course of their lives, many men enter the system and then return to society with criminal records.
Eberstadt marshals a lot of data about this problem, which is a welcome surprise given that few surveys ask about Americans’ incarceration history. But the number I found most helpful was one the book inspired me to dig up myself. In 2012, the General Social Survey asked Americans a question often seen on job applications: “Not counting minor traffic offenses, have you ever been convicted of a crime?” Among men 25-54, one-fifth said they had. Drawing on other data, Eberstadt estimates that 13 percent of adult men have been convicted not just of any crime but of a felony. Criminal records are concentrated among African-Americans and those with less education.
How does this affect the labor market? Eberstadt provides unsurprising data showing that greater involvement with the justice system correlates with less work, both among individuals and at the state level. I wish he had also cited “matched pair” studies in which actors pose as job applicants with and without criminal records. Such studies show convincingly that employers discriminate severely against men with criminal records. As a group, men who break the law are probably destined to have below-average work histories whether they get caught and convicted or not, but a criminal record makes employment even less likely for these men, and there are a lot of them.
A third argument Eberstadt makes is sure to enrage the left—indeed, the book contains a response from liberal economist Jared Bernstein taking issue with it. Eberstadt argues that the social safety net is financing men’s decisions to stop working. While the 1996 welfare reform law did a lot to promote work among single mothers, there has also been a steady rise in men collecting disability, even as jobs have become less dangerous.
Just a few months ago, the president’s Council of Economic Advisers seemingly destroyed this talking point, noting that “from 1967 until 2014, the percentage of prime-age men receiving [Social Security Disability Insurance] rose from 1 percent to 3 percent, not nearly enough to explain the 7.5 percentage-point decline in the labor force participation rate over that period.”
Eberstadt counters that other programs are available to the disabled as well—and that in the Survey of Income and Program Participation, 57 percent of men who were out of the labor force lived in homes reporting disability benefits. That number has increased 20 percentage points since 1985, and it is twice as high as the council’s figure. It may also be an underestimate, because people don’t always admit to using safety net programs in surveys.
Eberstadt doesn’t spend much time talking about solutions, keeping the book unnecessarily short at 206 pages, including two dissents, Eberstadt’s response to his critics, and endnotes. The solutions he does offer are great in theory but difficult in practice: more jobs and economic growth, safety net reform, and efforts to draw ex-prisoners into the workforce. It’s “only one person’s initial thoughts and suggestions,” he writes. Indeed.
But that doesn’t undermine the value of Men Without Work. Eberstadt is right that this is “America’s invisible crisis”: an enormous problem that is rarely discussed and will not go away on its own. Eberstadt has done more than anyone else to raise awareness of the issue and to sketch its contours.
Friday, September 23, 2016
In moments of social unrest featuring violence and crime, one would expect the only proper role of the taxpayer-funded federal government is to quash the disturbance.
However, a unit of progressive attorneys within the Department of Justice has been at the center of every significant riot during the Obama administration, and this unit -- the Community Relations Service, or CRS -- was not at those scenes to protect the safety of all citizens.
In fact, the CRS was caught encouraging the chaos.
Not only did CRS side only with the protesters and not with law enforcement, they actively facilitated the protests, even as they were turning violent.
Additionally, this same unit has a serious fraud and corruption problem.
CRS came under fire this year for internally generated charges of incompetence, out-of-control management, and abuse of taxpayer funds.
The Washington Examiner reports:A Justice Department spokesman told the Washington Examiner that staffers from its Community Relations Service will be deploying to Charlotte ...
The department's Community Relations Service provides conflict resolution specialists across the nation "to promote peaceful resolution of conflicts and tensions," according to the DOJ's website.
"The Community Relations Service is the department's 'peacemaker' for community conflicts arising from differences of race, color, national origin, gender, gender identity, sexual orientation, religion and disability," the website says.
Despite the reasoning behind CRS's existence, their actions under the Obama administration and the Eric Holder/Loretta Lynch DOJ couldn't have strayed further from the mission.
Rather than "promote peaceful resolution," the CRS instead -- and always -- promotes resolution only in favor of the side fomenting violence.
The Justice Department Community Relations Service (CRS) was founded in 1964, originally intended to be an intermediary between contested sides in racially charged disputes. In recent years, however, CRS has been criticized for taking sides in places such as Ferguson, Missouri, Baltimore, and Sanford, Florida. For example:
-- A report claimed that CRS helped facilitate bus transportation for protesters to attend a rally to protest the Trayvon Martin shooting in Sanford.
-- In Ferguson, CRS was criticized for appearing to take sides rather than serving as an impartial intermediary. Attorney General Eric Holder traveled to Ferguson after the riots and made statements that reinforced this perceived bias.
The Orlando Sentinel revealed further details of CRS's actions in Florida:
When civil-rights organizers wanted to demonstrate, these federal workers taught them how to peacefully manage crowds.Why was Thomas Battles not organizing a meeting with those opposed to the filing of charges? Or with the majority of Sanford residents, who had preferred an end to the protests? Or with law enforcement?
They even arranged a police escort for college students to ensure safe passage for their 40-mile march from Daytona Beach to Sanford to demand justice ...
"They were there for us," said the Rev. Valarie Houston, pastor of Allen Chapel AME Church, a focal point for the community after the unarmed teen's death. She met the peacekeepers there for the first time during a March 20 town-hall meeting. "We felt protected," she said.
Houston said the conciliators told her they act as the "eyes and ears of the community" and provided guidance about keeping their message about nonviolence clear.
Thomas Battles, the Southern regional director for Community Relations Service, arranged a Thursday meeting between Special Prosecutor Angela Corey and a group of Sanford ministers, where Corey answered questions and shared her testimony of faith.
The visit came one day after Corey announced her office charged Zimmerman with second-degree murder.
Perhaps because Battles was ... at the dentist:Employees have complained about the personal travel of Thomas Battles. The director of southeastern states for the DOJ, Battles makes in excess of $133,000 in salary and benefits in the Atlanta office of CRS. But DOJ employees have complained that Battles is using federal dollars for personal travel from his office in Atlanta to Miami, his hometown. The DOJ employees have complained that Battles makes taxpayer-funded travel to Miami approximately 24 times a year to visit his family -- and also to attend to personal affairs such as visiting his favorite dentist for teeth cleanings. Regional CRS employees in the Miami office purportedly are not even aware of Battles being in Florida when these taxpayer-funded visits occur.Or, perhaps Battles was signing a lease for unnecessary prime office space:PJ Media has obtained video taken inside Justice Department offices which show empty, unused office space within leased commercial space. The offices are intended for at least twenty federal employees according to DOJ sources -- but only TWO are using them.
The Justice Department Community Relations Service offices in Dallas are on the 20th floor of the Harwood Center, a luxury downtown high rise. Justice Department sources provided PJ Media with a video taken inside the Dallas DOJ offices which documents the brazen waste of taxpayer dollars.
The video shows empty offices, boxes stacked on unused desks, jumbo window offices with couches, large conference rooms with television sets running, enormous offices which appear to be unused, stacks of printer boxes, bookshelves filled with VHS tapes, and a kitchen area with seating for four.
The video shows 58 chairs for use by just two employees working in the office.
In reality, these "civil-rights organizers" and college students aided by CRS included many intent on violence.
The taxpayer-abusing, outrageously mismanaged CRS created a further, dangerous burden on law enforcement and the local community that could have been minimized had CRS carried out its actual mission rather than encourage one side.
They were the "eyes and ears of the community" -- but only of the very small segment of the community that wished to cause a disturbance. The vast majority of Sanford residents -- who preferred to stay inside and to return to their peaceful lives immediately -- were not aided by CRS.
But they did foot their bill.
And now, they're paying for CRS to possibly encourage even more chaos in Charlotte.
Thursday, September 22, 2016
While Donald Trump has made up ground recently in several battleground states, a new independent poll released Thursday finds the Republican presidential nominee has seen no improvement in deep blue Maryland.
Democrat Hillary Clinton is leading Trump 58 percent to 25 percent in the new Goucher Poll — a slightly larger margin than she had in a poll conducted in the state late month.
The poll also found no movement in the contest to replace retiring Sen. Barbara A. Mikulski, with Democratic Rep. Chris Van Hollen holding a 30-point advantage over Republican Del. Kathy Szeliga.
"The Democrat-to-Republican ratio, coupled with a large percentage of African American voters and populous progressive strongholds continue to give Democratic candidates a significant advantage in presidential election years," Mileah Kromer, director of the Sarah T. Hughes Field Politics Center, said in a statement.
Maryland hasn't chosen a Republican for president since George H.W. Bush beat Michael Dukakis in 1988. President Barack Obama beat Republican nominee Mitt Romney by 25 points among Maryland voters in 2012.
The poll was, conducted from September 17-20, surveyed 514 likely Maryland voters and has a margin of error of plus or minus 4.3 percentage points.
Eighty-two percent of Maryland's likely voters said politics comes up in their everyday conversations "very" or "somewhat" often. Reflecting what some believe is a heightened level of polarization nationwide, most people tend to associate with those of the same political affiliation.
Among Republican voters, 57 percent said they have "some" or "a lot" of Democratic friends. Among Democratic voters, 37 percent said they have "some" or "a lot" of Republican friends.
The poll is the first to ask about Green Party candidate Margaret Flowers in the Senate contest. She received 2 percent, not enough to qualify her to take part in the two broadcast debates scheduled in the contest. Organizers have set candidate participation thresholds at 10 percent for one debate and 15 percent for the other.
Nearly two in 10 voters are undecided in the Senate contest.
Wednesday, September 21, 2016
The simulacrum is never that which conceals the truth—it is the truth which conceals that there is none. The simulacrum is true.
from The Daily Signal
On Tuesday night the Senate voted to proceed to the Continuing Resolution (CR), a bill that will allegedly fund the government until Dec. 9.
The only problem is that there isn’t actually a bill yet.
There is no text. There is no agreement between Democrats and Republicans on what the bill will fund — Planned Parenthood, the Export-Import Bank, control of the Internet — all of it remains a mystery.
Yet the Senate voted 89 – 7 to proceed to this non-existent bill..
The Senate operates under complex parliamentary rules that require a series of votes in order to “proceed to” or “get onto” a bill. The vote Tuesday night was the first in what will be a series of votes on the continuing resolution or spending bill.
And Senate leadership tried to pitch this as simply a process vote. Sen. Mitch McConnell’s, R-Ky., communications director tweeted that this vote was “just procedural” and “not a vote on the CR” or on Zika funding. Various reporters tweeted that this was just a vote on a “shell bill,” and that the text of the continuing resolution would be crafted at a later date.
But the fact still remains: on Tuesday, the Senate voted to proceed to a bill that does not yet exist.
Forget not being able to read it, or not having time to digest the policy at hand. The bill does not exist.
Despite Senate leadership’s protests to the contrary, a vote to proceed to a bill that’s not yet written is, in fact, a substantive act — particularly when there is so much at stake. The continuing resolution will be the battleground for major policies, like whether or not Planned Parenthood will receive Zika funding, if the Export-Import Bank can send taxpayer dollars to fund Boeing deals with Iran, or if the U.S. will lose control of the Internet.
All of these deals have yet to be struck (although press reports suggest that Republicans have already caved to Democrats on Planned Parenthood funding). What the Senate did Tuesday was to give the go-ahead to Senate leadership to strike those deals on their behalf. Each of the 89 senators who voted to proceed to text that they’ve never seen yielded their authority to have input on the deal, to influence the outcome of a major funding bill.
This is not just a procedural vote, and it is wrong to describe it as such. Voting to proceed to a bill is as much a substantive act as voting on the bill — different, but still substantive. In this case, the Senate voted to proceed to whatever backroom deal their leadership happens to strike.
As Sen. James Lankford, R-Okla., explained his “no” vote to Congressional Quarterly, “We don’t have that text yet. It’s important that we do have that and we do know the direction that it’s going when we get to that spot.”
Lankford is right about why senators must have text before beginning any vote series, procedural or otherwise — you can’t approve the start of a process without knowing first where it’s going to end.
The McConnell-Reid era has witnessed a Senate that is less transparent, where individual members are less aware of their rights, and where there is a growing centralization of power in the Leader’s office. Tuesday’s vote was another step in that direction.
Individual senators are all equal in authority — with the same rights and the same access to the Senate rules. Senators would do well to keep that in mind next time their leadership says, “Trust us,” and tells them to approve moving forward on a bill they have yet to see.
Saturday, September 17, 2016
Theres an ocean where data flows
Woman in a boat out on the sea
A sea of little bits of you and me
Let it all go set it all free
You let the whole wide world see
Exactly what is going on
Exactly who was looking on
Theres no safe place to go
Now youve let that whistle blow
Show Exactly what is going on
Show Exactly who was looking on
Stories start to leak they color your name
While up above cloud turns to rain
You can feel the touch of a hand you know well
Its a very long way from Maryland
Let it all go
Set it all free
You let the whole wide world see
Exactly what is going on
Exactly who was looking on
Theres no safe place to go
Now you've let that whistle blow
Show exactly what is going on
Show exactly who was looking on
Some say youre a patriot
Some call you a sile
An American hero
Or a traitor that deserves to die
In the heart of the free world
In the home of the brave
You gave up everything
To bring down the veil
Let it all go set it all free
You let the whole wide world see
Exactly what is going on
Exactly who was looking on
Theres no safe place to go
Now youve let that whistle blow
Show exactly what is going on
Show exactly who was looking on
Let it all go
Set it free
Let it all go
Let it go free
Set it free
Huh huh huh huh haaa aaahh
Thursday, September 15, 2016
A giant problem
The rise of the corporate colossus threatens both competition and the legitimacy of business
DISRUPTION may be the buzzword in boardrooms, but the most striking feature of business today is not the overturning of the established order. It is the entrenchment of a group of superstar companies at the heart of the global economy. Some of these are old firms, like GE, that have reinvented themselves. Some are emerging-market champions, like Samsung, which have seized the opportunities provided by globalisation. The elite of the elite are high-tech wizards—Google, Apple, Facebook and the rest—that have conjured up corporate empires from bits and bytes.
As our special report this week makes clear, the superstars are admirable in many ways. They churn out products that improve consumers’ lives, from smarter smartphones to sharper televisions. They provide Americans and Europeans with an estimated $280 billion-worth of “free” services—such as search or directions—a year. But they have two big faults. They are squashing competition, and they are using the darker arts of management to stay ahead. Neither is easy to solve. But failing to do so risks a backlash which will be bad for everyone.
More concentration, less focus
Bulking up is a global trend. The annual number of mergers and acquisitions is more than twice what it was in the 1990s. But concentration is at its most worrying in America. The share of GDP generated by America’s 100 biggest companies rose from about 33% in 1994 to 46% in 2013. The five largest banks account for 45% of banking assets, up from 25% in 2000. In the home of the entrepreneur, the number of startups is lower than it has been at any time since the 1970s. More firms are dying than being born. Founders dream of selling their firms to one of the giants rather than of building their own titans.
For many laissez-faire types this is only a temporary problem. Modern technology is lowering barriers to entry; flaccid incumbents will be destroyed by smaller, leaner ones. But the idea that market concentration is self-correcting is more questionable than it once was. Slower growth encourages companies to buy their rivals and squeeze out costs. High-tech companies grow more useful to customers when they attract more users and when they gather ever more data about those users.
The heft of the superstars also reflects their excellence at less productive activities. About 30% of global foreign direct investment (FDI) flows through tax havens; big companies routinely use “transfer pricing” to pretend that profits generated in one part of the world are in fact made in another. The giants also deploy huge armies of lobbyists, bringing the same techniques to Brussels, where 30,000 lobbyists now walk the corridors, that they perfected in Washington, DC. Laws such as Sarbanes-Oxley and Dodd-Frank, to say nothing of America’s tax code, penalise small firms more than large ones.
None of this helps the image of big business. Paying tax seems to be unavoidable for individuals but optional for firms. Rules are unbending for citizens, and up for negotiation when it comes to companies. Nor do profits translate into jobs as once they did. In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.
Anger at all this is understandable, but an inchoate desire to bash business leaves everyone worse off. Disenchantment with pro-business policies, particularly liberal immigration rules, helped the “outs” to win the Brexit referendum in Britain and Donald Trump to seize the Republican nomination. Protectionism and nativism will only lower living standards. Reining in the giants requires the scalpel, not the soapbox.
That means a tough-but-considered approach to issues such as tax avoidance. The OECD countries have already made progress in drawing up common rules to prevent companies from parking money in tax havens, for example. They have more to do, not least to address the convenient fiction that different units of multinationals are really separate companies. But better the grind of multilateral negotiation than moves such as the European Commission’s recent attempt to impose retrospective taxes on Apple in Ireland.
Concentration is an even harder problem. America in particular has got into the habit of giving the benefit of the doubt to big business. This made some sense in the 1980s and 1990s when giant companies such as General Motors and IBM were being threatened by foreign rivals or domestic upstarts. It is less defensible now that superstar firms are gaining control of entire markets and finding new ways to entrench themselves.
Prudent policymakers must reinvent antitrust for the digital age. That means being more alert to the long-term consequences of large firms acquiring promising startups. It means making it easier for consumers to move their data from one company to another, and preventing tech firms from unfairly privileging their own services on platforms they control (an area where the commission, in its pursuit of Google, deserves credit). And it means making sure that people have a choice of ways of authenticating their identity online.
1917 and all that
The rise of the giants is a reversal of recent history. In the 1980s big companies were on the retreat, as Margaret Thatcher and Ronald Reagan took a wrecking ball to state-protected behemoths such as AT&T and British Leyland. But there are some worrying similarities to a much earlier era. In 1860-1917 the global economy was reshaped by the rise of giant new industries (steel and oil) and revolutionary new technologies (electricity and the combustion engine). These disruptions led to brief bursts of competition followed by prolonged periods of oligopoly. The business titans of that age reinforced their positions by driving their competitors out of business and cultivating close relations with politicians. The backlash that followed helped to destroy the liberal order in much of Europe.
So, by all means celebrate the astonishing achievements of today’s superstar companies. But also watch them. The world needs a healthy dose of competition to keep today’s giants on their toes and to give those in their shadow a chance to grow.
Saturday, September 10, 2016
from the Washington Post
The surge of populist right-wing parties in Europe has now damaged the standing of the continent’s most important leader, German Chancellor Angela Merkel. Worse, the rise of movements fueled by nationalistic and racist programs signals that a core ethos of the European-American alliance vital to global stability for seven decades is threatened by extremist politics on both sides of the Atlantic.
There are many tangible factors in the lurch to the narrow nationalism reflected in Britain’s vote to quit the European Union, the defeat of Merkel’s conservative forces by the three-year-old Alternative for Germany party in a key state election last Sunday, and the earlier rise of such movements in Poland, Hungary, France and elsewhere.
These factors include a backlash to economic dislocation caused by globalization, the floodtide of refugees coming from Syria and other failed states on Europe’s southern periphery, and the terrorist outrages committed by the Islamic State and other jihadist forces.
But there is an intangible factor as well that merits close attention in this turbulent U.S. political season. It is the waning of the cohesion and steadying influence brought by the large U.S. military, commercial and cultural commitment to a vulnerable Europe since 1945 — the steady weakening of an American ideal of engaged internationalism that was absorbed into the intellectual bloodstream of post-war Europe as the Old and New Worlds joined to rebuild a devastated continent and confront a clear Soviet menace.
That internationalist ideal was clearly imprinted on the still-war-damaged Europe I first saw in 1961 and which I was to study and work in, or frequently visit, since.
The United States was, after all, originally a nation that proudly stated as its purpose the absorbing of the world’s “tired . . . poor . . . huddled masses yearning to breathe free.” It supported with troops, defense spending and active public diplomacy the spirit of a broad internationalism that was the opposite of the European chauvinistic hatreds that had triggered two world wars. The founders of what is today the European Union saw the United States as a model for the community they wanted to build.
The European idea of a certain America helped discourage the breeding of bitter nationalistic politics and anti-immigration stances, as did of course the memories of the recent conflagrations.
This is not to claim that the United States itself ever fully lived up to the ideal that, for a time at least, helped Europe find its way. American disasters abroad, running from Vietnam to Iraq, and continuing racial and social strife at home, have left the United States in no position to lecture other nations in moralistic terms or tones.
That is to my way of thinking Europe’s misfortune as well as America’s. This year’s stomach-turning U.S. presidential campaign threatens to remove us as a model for anybody else’s politics. By the standards set by Donald Trump, the Alternative for Germany’s fear-mongering nativism is politics as usual, not an evil to be quashed.
The right-wing party finished ahead of Merkel’s Christian Democratic Union in elections for the legislature of the Mecklenburg-Western Pomerania, a northern state known for its shipyards and quiet beaches and for being the chancellor’s political home base.
The AfD — its initials in German — won 20 percent in the state, and is polling around 14 percent nationally. The incumbent Social Democratic Party maintained its leadership of the state legislature, making Merkel’s defeat largely symbolic. But that will handicap her ability to fill the appalling leadership vacuum that exists today in Europe’s major capitals.
Meanwhile, Trump would have us believe that the American ideal is fading globally solely because of President Obama’s “weak” foreign policy. Obama’s strategic retrenchment and initial benign neglect of Europe did contribute to the problem. But the long-term redistribution of economic power globally, to America’s detriment, and the American public’s fatigue with distant wars and entanglements weigh much more heavily on history’s scales than do Obama’s policies.
In any event, Trump’s remedies would only accelerate the erosion of alliance cohesion. The enthusiastic wheeler-dealerism he promises to establish with Russian President Vladimir Putin — a hero to France’s Marine Le Pen and other European ultra-rightists who subscribe to notions of racial and national superiority — will force politically volatile European nations to scramble to strike their own bargains with Russia.
Count on a European stampede toward Moscow — and an even more precipitous swing to the nationalistic right in European politics — if Trump is declared the winner here in November. That moment would also mark the final burial of that American ideal of internationalism that helped to make Europe a more prosperous and peaceful continent for the second half of the 20th century.
- Franz Kafka, "Josephine the Singer, or the Mouse Folk"
"May Josephine be spared from recognizing that the mere fact of . . . listening to her is proof that she is no singer."
Thursday, September 8, 2016
A national small business group that has been active in Maryland endorsed state Del. Kathy Szeliga's campaign for the state's open Senate seat on Thursday.
The National Federation of Independent Businesses, which has over 4,000 members in the state and which helped to kill a controversial paid sick leave measure in the General Assembly earlier this year, cited Szeliga's business background.
Szeliga, a Baltimore County Republican, is the co-owner of a construction company.
Speaking in Baltimore at Betson Enterprises, a fourth-generation distributor of amusement and vending equipment, Szeliga pointed to the 2010 national health care law as the most onerous federal measure that she said has hurt small businesses in Maryland.
The law exempts small business owners with fewer than 50 employees from most of its requirements, but opponents say the law has affected the health insurance market in ways that reach even those small firms.
"What happens in Washington so often [is] people propose things that sound good but then when you get to the brass tacks it doesn't work," Szeliga said. "As a small business owner myself I know how hard it's been, especially over the past 10 years, to stay in business."
Szeliga is running against Democratic Rep. Chris Van Hollen of Montgomery County for the Senate seat that will be left open next year by Sen. Barbara A. Mikulski's retirement. A recent poll by Annapolis-based OpinionWorks found Van Hollen significantly ahead in a state where registered Democrats outnumber Republicans by a two-to-one margin.
Szeliga dismissed the survey's findings, saying she isn't surprised that a "career politician" was better known in the state and that the 29-point deficit was "exactly where Larry Hogan was two years ago." That's not entirely accurate: Democrat Anthony G. Brown had a significant lead in early polling, but be never led Hogan by more than 18 points.
By early October, two polls had Hogan within single digits.
"Another career politician that the Democrats have anointed to be their next senator is not what voters are looking for," Szeliga said.
Szeliga, who has touted her small business background during the course of the campaign, toured Betson and took a minute to try her hand at a "Ghostbusters" pinball machine. The company, which employs 14 people, distributes game and vending machines all over the state, from the boardwalk in Ocean City to government building lobbies.
Though the NFIB has endorsed state Democrats in the past, its candidates are mostly Republicans. The group's political action committee spent $1.4 million on independent expenditure advertising in the 2014 election cycle nationwide in competitive races. The group spent no ad money in Maryland in the 2014, 2012 or 2010 cycles, according to the Center for Responsive Politics.
"She's been one of our staunchest advocates for the small business community," said Mike O'Halloran, NFIB's state director in Maryland. "We've seen too many professional politicians that don't understand the hardships that small business owners face."
Wednesday, September 7, 2016
Communist Party General Secretary Xi Jinping, United Nations Secretary General Ban Ki-moon and President Barack Obama rendezvoused Saturday, Sept. 3, in the People's Republic of China.
Thus unfolded a moment of unusual clarity in the struggle between those who believe in individual liberty and those who believe government should plan and control our lives.
The purpose of the meeting? The Communist leader and the president handed over to the secretary general documents declaring their nations were officially joining the Paris Agreement on climate change.
The agreement itself describes such documents as "instruments of ratification, acceptance, approval or accession."
Obama did not ask the Senate to ratify this agreement by the two-thirds vote our Constitution requires of treaties.
So to what did Obama — alone — commit this nation?
The agreement says one of its primary aims is: "Holding the increase in the global average temperature to well below 2 C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change."
The Sunday New York Times described the varying U.S. and Chinese commitments to this project as follows: "They include a promise for China's carbon emissions to reach a plateau or decline 'around 2030,' but without any specific target for reductions like those Mr. Obama pledged for the United States (between 26 and 28 percent of 2005 levels by 2025). That means China has plenty of room to continue burning fossil fuels to power its economy."
Obama, nonetheless, described his unilateral approval of the Paris Agreement as a personal triumph — that could save the Earth.
"One of the reasons I ran for this office was to make sure that America does its part to protect this planet for future generations," Obama said, according to the White House transcript of his remarks.
"Over the past seven and a half years, we've transformed the United States into a global leader in the fight against climate change," he said.
"And someday we may see this as the moment that we finally decided to save our planet," he said.
So, what does the People's Republic do with people?
"The government restricted the rights of parents to choose the number of children they have," the State Department said in its latest human rights report on China.
"Intense pressure to meet birth-limitation targets set by government regulations resulted in instances of local family-planning officials using physical coercion to meet government goals," said State. "Such practices included the mandatory use of birth control and the forced abortion of unauthorized pregnancies. In the case of families that already had two children, one parent was often required to undergo sterilization."
Chinese families that have a child without government approval can be subject to what amounts to a 1,000-percent income tax.
"The law requires each parent of an unapproved child to pay a 'social compensation fee' that could reach 10 times a person's annual disposable income," said the State Department.
One of Obama's top advisers on climate change is John P. Holdren, director of the White House Office of Science and Technology Policy.
In 1973, as this column has noted before, Holdren joined Paul and Anne Ehrlich — authors of "The Population Bomb" — in writing "Human Ecology: Problems and Solutions." The co-authors saw three sources for environmental degradation: people, affluence and technology.
"The relation," they wrote, "can be written as a mathematical equation: total environment damage equals population, times the level of material affluence per person, times the environmental damage done by the technology we use to supply each bit of affluence."
"Halting population growth must be done, but that alone would not be enough," Holdren and his co-authors wrote. "Stabilizing or reducing the per capita consumption of resources in the United States is necessary, but not sufficient. Attempts to reduce technology's impact on the environment are essential, but ultimately will be futile if population and affluence grow unchecked. Clearly, if there is to be any chance of success, simultaneous attacks must be mounted on all the components of the problem."
In their conclusion, Holdren and the Ehrlichs said: "Political pressure must be applied immediately to induce the United States government to assume its responsibility to halt the growth of the American population."
"A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States," they said.
"Redistribution of wealth both within and among nations is absolutely essential, if a decent life is to be provided for every human being," Holdren and his co-authors wrote.
Forty-three years later, with Holdren serving as White House science adviser, Obama took the Little Sisters of the Poor all the way to the Supreme Court in an effort to ensure that their employee health care plan would cover abortion-inducing drugs and devices.
And on Saturday, in China, President Obama said of his climate change agreement: "Someday we may see this as the moment that we finally decided to save our planet."
Sunday, September 4, 2016
Saturday, September 3, 2016
Friday, September 2, 2016
Government employees in the United States outnumber manufacturing employees by 9,932,000, according to data released today by the Bureau of Labor Statistics.
Federal, state and local government employed 22,213,000 people in August, while the manufacturing sector employed 12,281,000.
The BLS has published seasonally-adjusted month-by-month employment data for both government and manufacturing going back to 1939. For half a century—from January 1939 through July 1989—manufacturing employment always exceeded government employment in the United States, according to these numbers.
Then, in August 1989, the seasonally-adjusted employment numbers for government exceeded the employment numbers for manufacturing for the first time. That month, manufacturing employed 17,964,000 and government employed 17,989,000.
Manufacturing employment in the United States had peaked a decade before that in June 1979 at 19,553,000
From August 2015 to August 2016 seasonally-adjusted manufacturing employment declined by 37,000--dropping from 12,318,000 last August to 12,281,000 this August.
The 22,213,000 government employees in August, according to the BLS, included 2,790,000 federal employees, 5,120,000 state government employees, and 14,303,000 local government employees.