The Unsettlement

Madame:

I see you have left it to the readers to imagine just what kind of diagram would be drawn “depicting” sex scandals. :)

BP.  Ah yes, I have SUCH a shortage of things to analyze! :)

Of course, the settlement is better than nothing, and an improvement from previous administrations.  Does it affect the corporation BP much?  Not significantly.  It certainly doesn’t affect the finances of those who made decisions at the executive and board levels.

Even if shareholders and their board of directors somehow wanted to hold management accountable, things are usually stretched out so long that the perpetrators are not even around much anymore, having been given golden parachutes.

Yes, some low and mid-level people (who appear quite guilty, to be sure) were served up by their corporate masters.  The true individual culprits were not held accountable, especially those who fostered the corporate culture of criminal, arrogant disregard for safety or considerations for workers.

When it’s an out of court settlement, a corporation can usually deduct it from their income.  They thus make sure the country’s and world’s taxpayers share in the bill for their criminality.  And even the “settlement” will be stretched out over many years, with excess assets (BP has many) sold off to make the payments and not dent even a quarter’s profits (of which the settlement does not even equal).   And laws are in the works saying individuals cannot sue oil companies, but must sue the state.

A telling reminder happened recently.  Another offshore rig caught fire in the Gulf of Mexico.  Yes, BP didn’t own it, and it wasn’t nearly as serious.  Yet, how many eagerly nodded their heads during the campaign season when Romney blasted the Obama administration for not allowing more offshore drilling?  And a “free” market needs no laws or regulators?  Would a football game work without rules or referees?

How EASY it is to get us off-focus on how polluting, enslaving, impoverishing, and climate changing, fossil fuel addiction is.  We need to be moving like a sprinter toward a truly energy independent, clean, carbon-neutral goal, and yet here we are crawling on the ground like a baby—and most babies don’t crawl fast and are easily diverted.

BP Revisited

Professor J,

What a week in the news! I can't help thinking that Fox canceled Glen Beck's show too soon. He could be putting that blackboard to really good use. Sex scandals are so much more fun to diagram than connections to the Illuminati. ;)

As a matter of fact, it's the kind of thing that is much more fun to think about than things like crashing over the fiscal cliff and what the implications of that might be. The escalating trouble between Israel and Gaza is getting more attention though. Apparently war is a sexier topic than economics.

But there is one piece of news that came full circle from the beginnings of this blog. Our very first postings were about the BP oil spill. You might remember that I asked you what solution it was that you would like to see. Here was your answer:

The solution, maybe a fantasy one, would see corporate law and regulation changed dramatically, primarily in the arena of personal accountability, and the enforcement of existing law and regulation about this. These days, the “corporate veil” (which is not an unsound idea in and of itself) is rarely pierced by the judicial system for criminal liability, and almost never pierced for anything else, to financially or otherwise punish the arrogantly disdainful and near-utterly disconnected managements and boards who inflict the colossal damage we’ve been discussing. It would also be nice if our legislators and executive agents actually held managements and boards truly accountable, but again, that would be a bit like asking a bribed judge to hold Tammany Hall accountable. This idea that corporations should have the same First Amendment protections that individuals have has also made a terrible travesty of true justice.

The reader can read the entire post here.

Can you give us your opinion on the agreement announced today by the Attorney General?

Here's an article from Huffington Post: BP Oil Spill Settlement 

While we are recovering from the election and you are trying to get to answering JC's questions, I  know you'll want something else to analyze! :)

Points, Sharpness Unassured

Well made points Madame.  To them I would add only:

Governor Christie may now hold some belief about climate change other than his party’s.

In reference to AC, your point about silliness evaporating in the event of life and death brings up an interesting point question to those who despise his orientation so much:  If you could for sure have your life be saved by help from a homosexual, would you accept it, or take a chance on a non-homosexual coming by?

Although I am rarely in the mood to give Mr. Mathews too much of the BOTD, perhaps what he meant by that semi-exhausted blurting was (instead of the apparent partisan advantage) that there would be more cooperation and sane political behavior?

Billed by the state for stupidity and obstinate behavior?  Capital idea!  “Freedom of choice” must have its companion with it: “Responsibility.”

A quick post-mortem of the election:

The status quo and potential stalemate was largely preserved.

The Republican Party now has multiple components—plutocrat servers, tea party activists, and religious and pseudo-religious zealots among them—but could not quite come together.  Also, despite rhetoric, not quite enough were truly convinced Obama was the Arch-socialist Antichrist Anarchist.

The Democratic Party has always had multiple components, and the progressive elements within it were ready to withhold their votes—except that the extremist views of the components of the Republican Party made them swallow their distaste for the corporatists and establishment servers of their own party and vote for them by voting against the other side.

Demographics do not appear on the side of the Republicans, and that and the Republicans’ own penchant for breeding distrust among significant numbers of the electorate overcame much efforts by the Republicans and their allies.   What much?  Despite their unenthusiasm for Romney, corporations and the wealthy went near-all out with Super PACs and other spending for him, Senate candidates, etc.  It wasn’t completely for naught, but it did not succeed.  Neither, largely, did the blatant voter suppression in many of the key states. 

With all that, and some fairly anemic Democratic candidates opposing their own candidates (and a weak economy to boot), they still couldn’t pull it off.  Goes to show both the weakness of their own candidates and the out of resonance stances of their own positions, but also that they are failing heavily with African Americans, Asians, Latinos, and even women.

However, those making dire predictions for the future of the Republican Party should remember that a prime vehicle for the possible reinvigoration of the

Republican Party already exists: The Democratic Party, which has proven time and again its consummate skill in squandering advantages, moments, and opportunities.

The Perfect Election Storm

Professor J,

Just as I was breathing a sigh of relief that the election was over, one way or the other, I'll be darned if the pundits and prognosticators didn't start talking about what all this will mean for the NEXT election. No wonder no one can get around to governing, it would mean a break in campaigning. Why can't we stop selling and start solving?

I went to vote with my daughter who has more fun than anyone realizes is possible on election day. There was actually jumping up and down as we entered our precinct. And of course, the requisite photo was made for instagram. While I appreciated her enthusiasm, as a parent, fellow voter, and citizen I felt a pang of sadness that we aren't able to offer up candidates with ideas worthy of her excitement.  But now that the whole thing is over I'm thinking about some things we've learned in the last few days of the election, and from Hurricane Sandy:

Governor Chris Christie is his own man. Known for his brashness and stubbornly sticking to his ideas, he gained a lot of credibility this week for having his priorities in place. An especially interesting explanation of his thinking was given in response to a silly question from Fox's Steve Doocy about whether or not Romney would get a photo-op touring the damage with the N.J. governor: 

“I have no idea, nor am I the least bit concerned or interested, I’ve got a job to do here in New Jersey that’s much bigger than presidential politics and I could [sic] care less about any of that stuff. I have a job to do,” he added. “I’ve got 2.4 million people out of power, I’ve got devastation on the shore, I’ve got floods in the northern part of my state. If you think right now I give a damn about presidential politics then you don’t know me.”

Since Obama's reelection Tuesday night Christie has been taken to task by commentators and radio talk show hosts for praising Obama's handling of the situation. Lou Dobbs referred to it as "slobbering over the president" and insinuated that it was a calculated move toward reelection in his predominately blue state.  He's being referred to by members of his own party as "Judas" and "traitor." Talk show host Laura Ingram said this week that it wouldn't surprise her if he became a democrat. Given how his party is treating him, who could blame him? 

 In the midst of disaster no one cares that Anderson Cooper is gay. Night after night as AC stood out in the cold listening to the stories of residents rendered homeless by the storm I didn't see anyone ask him about his sexual orientation. People just wanted to be heard. They wanted their stories to be told. They wanted some help. They did not want their stories told by a straight anchorman/reporter. They wanted their stories by a human being. In matters of life and death it is striking how quickly silliness gets set aside.

Chris Mathews should not be allowed on air when sleep deprived, okay I'd argue he shouldn't be allowed on air ever, masquerading as an objective journalist. Just before the end of election coverage on MSNBC Mathews said, speaking in reference to the effect Sandy had on the election, “I’m so glad we had that storm last week because I think the storm was one of those things.” After an audible sound from co-anchor Rachel Maddow, who then put her hand on his arm as if to say "Please stop talking," he added,  “No, politically I should say. Not in terms of hurting people. The storm brought in possibilities for good politics.” Oh yes. Because of course loss of life and people's personal suffering is nothing compared to good political theater.

We didn't learn as much as we should have from Katrina. Federal, state, and local officials looked as if they could have had a better plan in place for such a densely populated area. But the main thing that shocked me (again) is the refusal of citizens to heed mandatory evacuation orders making the job of those who are trying to ensure the safety of residents, that much harder. If you don't evacuate after being told and you need to be rescued, I think you should be billed by the state for the cost of your bail out. 

Here's an article about just how much we didn't learn: Sandy Refugees Say Life In Tent City Feels Like Prison

Polar Icing

Madame M:

Hope you’re not too disappointed, but my answer is NOT going to be that comprehensive.

You are correct that we seem to lack the ability to see connections.  Like selfish children, we want, but don’t want to pay, and certainly don’t see our common interest with our fellows.  Yet we scream loud when things aren’t there for us, and go into refusal/denial/scream louder mode when it’s pointed out that that’s the result of what we said we wanted.

Neither party cooperates well anymore, and the in-need-of-reform rules of the Senate don’t help.  But because they are the weaker party (money/power base, etc.), Dems tend to seek compromise more.  The other party, almost never anymore.  Mitt Romney says he will work in a bipartisan fashion if elected by finding “good Democrats.”  Since compromise has not been his party’s forte, doesn’t that just mean Democrats that can be intimidated?  Since they are easier to isolate and make vulnerable, he could probably find some, unlike his own party, who rarely was willing to work out or compromise on anything.

We are a changed people, and these are changed times.  Without a single systemic threat (Axis, Communism) to rally against and focus our energies, we’ve often been a divided people.  And some periods, such as pre-Civil War, are so intensely divided, it almost seems only some system-seismic event can change that.  Moderates usually are pushed out or sickened out by the ever more polarized stances of the parties in an environment that has such room for country bickering.  Rome, when it stood undisputed master of the civilized Western world, soon took to bitter, destructive civil wars.  An ethic of expansion—whether for empire or capitalism—can have the same effect if frustrated.

Our campaigning has transitioned from vetting and informing to one of endless news cycles and spectacle.  It feeds the love my side/ hate the other side phenomenon, and the fracturing of communications channels only shovels it in.

We have certainly had a splintering of issues, and that’s part of it too.  But overall, we don’t have issues, we have political theater.  Spectacle and contention among elites, perhaps, but nothing for or about the average person.

No doubt that we are more selfish and inward looking as a people, with less community.  Even when we don’t (or say we don’t) want to be that way.  But it translates into how easy we segment ourselves, and how comfortable we are with it.    The way we live, the where we live.  Even the process.  Ear buds anyone?  They keep you shut off from the world and people around you, and easy to dismiss them by easy caricatures, rather than know them for who and what they are.

And this mantra of hyper-individualism we have hypnotized ourselves with—do it all yourself, and keep everything yourself, and let others do the same—is unrealistic, foolish, self-destructive, and polarizing.

Gerrymandering may be one of the biggest causes of our polarization, and drives much of the lack of give and take.  With so many seats in Congress “safe” for a party (and all the damage that does to democracy), it becomes easier for those opposite the president to thumb their noses.

We also have classic change, and classic reactionary response, going on in the country.  Demographics are changing, and a large portion of the “traditional” group feels threatened by the change, which they perceive will bring a change of their life and values.  Marry that up with a slight conservative preference for a majority of citizens, and you get the struggle between those who want change (or at least acceptance of certain progressive ideas) and those who are afraid of change (especially the change they can see and feel coming).

By transference we then project all this on to two figures who compete to direct the executive branch, pouring most focus and partially or totally ignoring all the other major players in the equation (Congress, Fed, G-20, Big Business and wealthy, etc.).

This answer went long.  I am very behind on replying to JC’s comments.

Building an Analogy

Professor J,

Thorough answer, as always. I'm amused that you anticipated my question about adjustments and answered it before I even had a chance to think of it. :)

You are right in pointing out that a certain amount (you put it at $30,000) would need to be exempt, thus protecting a base amount of income for people to live on. I was more intrigued though by your concept of a "US occupancy fee." That might help in some small way towards people having a sense of "ownership." I think most people rarely give any thought to their own responsibility as citizens, or how they are or are not contributing to their communities or to the nation as a whole. It also reminded me of something I heard Ben Stein say during a panel discussion once. His Democratic counterpart used the analogy of a building association in reference to taxes used to pay for things we all benefit from and the meetings were likened to elections, where we all decide how we are going to manage the building. Stein stopped the anchor person who was ready to move on to say (I'm paraphrasing), "Can we just stop for a moment? I want to acknowledge an excellent point when I hear one, and that is actually a very good analogy."

The way the Republicans twisted the president's "You didn't build that" comment, when he was trying to make a point about how we all benefit from investments in things like roads and bridges, shows how detached we are from grasping this concept. A dearth of understanding (due to the lack of teaching, and valuing) of basic civics keeps us arguing and divided about things, that in reality, people would certainly agree on if they could be bothered to give it five minutes of rational thought.

Here's a question as the election looms: To what do you attribute the closeness of so many presidential elections? State and local elections seem to have more clear winners and losers.  We seem to be almost divided exactly in half in regards to political ideology. Are we like a divorced couple who agree on little sharing the same house, or is something else at play, like a populace that is wary of either side wielding too much power for too long?

I'd never thought of the fact that just after elections we are all distracted immediately by the holidays. Excellent point. Then it's time for weight loss and organization followed by Valentine's Day. And of course there are always squirrels! ;) We'll give it our somewhat full and temporary attention again when we are on the verge of a full blown crisis. But as you have noted, something may be coming that will demand our total long term focus. 

You just have time to squeeze in a civics lesson before Tuesday! :)

Look, A Squirrel

Madame M:

A completely flat tax might SEEM fair, but it isn’t unless adjustments are built into it, and, assuming no deductions, those adjustments are the same complexity as a progressive system.  But a progressive system without deductions brings in far more revenue on average, and, more importantly, spurs the system to delay and de-emphasize profit taking, and instead reinvest in both workers and the long-term. 

I will anticipate you asking me what adjustments would have to be built if there were a flat tax, and they are primarily these: A certain amount ($30,000?) of each person’s income would need to be exempt from taxation (except for maybe a $100 “US occupancy fee”) to keep a flat rate from falling disproportionally upon the poor.  In effect, this would mean taxation would not begin until one had an income of $30,000, with everything above that amount having the flat tax rate applied to it.  This too has complications, however, among them the determination whether one begins it at that point, or one “pro-rates” it over the whole expectancy period, meaning, the expected tax is deducted bit by bit every “pay period.”

The idea of eliminating deductions has complications where businesses are concerned.  We would have to decide as a society whether to allow businesses to deduct nearly the full range of their present types of deductions (there are both benefits and abuses to this), or to merely allow them to deduct the costs to directly produce the goods or services.  If we allow the full range, expect the number of “businesses” to increase significantly, and that means headaches with auditing and enforcement.  And deciding whether the present types of entrepreneurial businesses, that are treated as flow through individual persons for tax purposes, will get to have the deductions, is a problem too.  Always complications!

Regardless, having present tax rates without deductions can only be kept up for so long without needing to reduce the rates.  A deep and painful recession would be effectively unavoidable, and we would need to get some rate relief within a reasonable time so as not to contract the economy too much or trigger a depression.

Pain.  Serious pain.   Not going to be easy AT ALL.

The election is nine days away.  We Americans, among our many political/civic/historical bad habits, have the particularly bad one of most of us paying SOME attention to the spectacle of electioneering for a while, and then ceasing to pay almost ANY attention afterwards.  Just when the hard business of governing, legislating, and forcing the system to be responsive is needed, most Americans jump instead into shopping, holidays, and diversions of many sorts, and never really get TO, let alone BACK, to the matter of making their creature—government, the instrument Locke and the Framers devised for them—bend to their will, the good of the many.

Leaving the selfish relative few to get what they want instead.

Repeat.