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Thursday, April 14, 2011

BRICS Leaders See Threat to Growth From Commodity Volatility

0 comments Posted by Find Insurance Online at 3:49 PM

By Bloomberg News - Apr 14, 2011The leaders of Brazil, Russia, India, China and South Africa said excessively volatile commodity prices pose a threat to the global economy and called for greater regulation of derivatives markets.Volatility “poses new risks for the ongoing recovery of the world economy,” the leaders said, according to a communique from their summit in the Chinese resort of Sanya.

Uganda tense as opposition leaders are arrested

0 comments Posted by Find Insurance Online at 3:46 PM

Posted on Tuesday 12 April 2011Eriasa Mukiibi Sserunjogi, AfricaNews reporter in Kampala, UgandaAs preparations for the swearing-in of Uganda's President Yoweri Museveni on May 12 gather steam, the country has still to shake off the tenterhooks resulting from the Feb. 18 election. On April 11, the police were once again called into action and by the end of the day they had brought various

Manzini 'turned into a Swazi war zone'

0 comments Posted by Find Insurance Online at 3:41 PM

Protesters go into hiding as crackdown intensifiesApr 12, 2011 9:50 PM | By OWN CORRESPONDENT, SIPHO MASONDO and HARRIET MCLEASwazi protesters have vowed to intensify their protests against the monarchy even as the police yesterday unleashed a violent crackdown, arresting foreign journalists and assaulting protesters in a bid to crush the rebellion against King Mswati.By midday Manzini resembled

SA adds political cement to BRICS

0 comments Posted by Find Insurance Online at 3:39 PM

In terms of its economic might, South Africa hardly deserves a seat at the table when the leaders of the BRIC group of major emerging economies meet this week in China.But the country, which is making its debut at the summit, has earned a spot politically as the stepping stone to the quickly emerging states of sub-Saharan Africa, which helps expand the geographic reach of the original BRIC states

A Basis for Entitlement Programs in Individualism via Collective Means

0 comments Posted by Find Insurance Online at 11:30 AM

In his speech on April 13, 2011 on reducing U.S. Government deficits, President Obama identified two strains that have run through the country’s political history and inform our political culture even today. “More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government. But there has always been another thread running throughout our history – a belief that we are all connected; and that there are some things we can only do together, as a nation. We believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.” These two strains can be identified as individualism and collectivism, respectively.

I contend that collectivism enables both individual and collective security. Individual security is oriented to a person’s survival and collective security is exemplified by national defense. In his speech, the president explicitly placed individual security within the collectivist strain. “Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. ‘There but for the grace of God go I,’ we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities.” In other words, the president rests entitlement programs on compassion for others with whom we share a society.

According to Obama, our societal connectedness with others implies a duty to contribute to the survival needs of those who cannot fend for themselves. I contend that most Americans are not likely to relate to this deontological basis that relies on the sentiment of compassion. Bluntly stated, too many of us are too selfish (or self-absorbed) to be motivated by such a normative basis. Fortunately, there is an alternative basis of individual security through collective means. Such a basis more firmly integrates the individualism and collectivism that the President identified as running through American history.

Specifically, as the president pointed out in his speech, hard luck can befall each of us; no one is immune from calamity and ruin. Perhaps the richest Americans feel confident that they will never be without their fortunes even in spite of the crushing experiences of many wealthy investors in the stock market crashes of 1873 and 1929, for instance. Yet for even the rich, and certainly for the rest of us, there is a basic psychological ease of mind in being able to have confidence that even in the worst case scenario concerning oneself, a safety net dependent only on the continued existence of the social contract (i.e., the collective) exists. Regardless of income, we all tend to ignore the foundational peace of mind that comes with security in

survival. Hence, each individual tends to understate the interest that he or she has in contributing to a fund even if he or she never has to use it.

In other words, self-interest and individual security by collective means are not incompatible. Therefore, the duty of compassion need not be relied upon as a motivation. Even if I never need to draw on Social Security (taking this program as insurance to be issued only to those who need it rather than as a combination of retirement savings accounts with the wealthy retirees having a claim on at least the money they paid in), it is in my self-interest that there be such a program available to me should I be impoverished at retirement. Even if I never need to draw on the program, the psychological security afforded to me by it through my life—and, indeed, to a society made up of people of such a psychology—makes being taxed to support the program quite valuable to me even if the value is subtle in my daily life. In a basic sense, each of us lives with a quiet anxiety concerning one’s own survival being less than certain. Perhaps the existence-anxiety is not consciously felt by those of us who have means; the poor surely are in touch with it. Yet we are all affected by it, like radiation, whether we know it or not.

Therefore, it is in an American’s self-interest to be taxed for survival-oriented entitlements even if the need is never actually realized; the psychological benefit begins immediately. We are “in it together” in that each of us, being a human being, is subject to the basic existence anxiety as well as to the beneficial effects from the reduction of it. Additionally, should a person be in need of an entitlement for survival, there is that more tangible benefit too. In isolating only this benefit and calculating the probability of one’s eventual need for it, the typical American tends to understand the value to himself of individual security by collective means. This understatement of the value may involve a rather narrow selfishness that is not in one’s own self-interest, fundamentally speaking. Besides being contrary to compassion for others in need, the narrow breed of self-interest (i.e., selfishness) is not even in one’s own interest.

Perhaps it is in each of us enjoying the same feeling that comes with having security in our survival being bolstered by social contract that we can feel community. Perhaps such a shared basis can trump even the different experiences in being rich and poor. That is to say, community may simply be the recognition of having the same feeling or experience. In the case of individual security by collective means, the basis of community can be located in individualism rather than the less reliable motive of compassionate duty.

Click to add a question or comment on President Obama on social programs and the deficit.

Source:

Barak Obama, “Text of Obama Speech on Deficit,” The Wall Street Journal, April 13, 2011.

Wednesday, April 13, 2011

Achieving Balance in American Federalism: On the Crusade of Texas’ Rick Perry

0 comments Posted by Find Insurance Online at 11:34 PM

As the governor, or head of state, of Texas, Rick Perry has been on a crusade to reinvigorate American federalism. Referring to the efforts of officials in the U.S. Government to secure the Mexican border, Perry said, “It is part of that frustrating paradox where Washington neglects their responsibility for areas clearly within their purview, while interfering in other areas in which they’re neither welcome nor authorized.” The chief executive was pointing to a little-noticed point concerning the expansion of the domains in which the federal government is active.

In going into a domain hitherto covered by the state governments, the federal government officials, including legislatures, the president, and even the justices assume that no downside is involved in terms of the federal government being able to cover its traditional realm. For example, in going into education policy, as in enforcing standardized testing, U.S. Government officials assume that the foray has no impact on the ability of the federal government to secure the Mexican border. Hence, Arizona’s effort was resisted. The assumption is erroneous. To the extent the U.S. Government’s actions on the border are insufficient, attention on education has an opportunity cost in terms of foregone attention on how to better secure the border. In short, the “attention pool” is finite even in an expansive federal government, so expanding into domains traditionally (and constitutionally) reserved for the state governments can exacerbate or compromise federal efforts in the traditional areas of the U.S. Government.

Accordingly, Governor Perry has sought to renew, or reinvent, American federalism, “taking an extraordinarily robust view of states’ sovereignty and an extraordinarily restrictive view of the ‘enumerated powers’ listed in Article 1, Section 8 of the [U.S.] Constitution.” (1) Such a renewal would shift the balance of governmental power in American federalism such that the respective domains of power would reflect the dual sovereignty core of federalism. That is, the power of the state governments and the general government would be in balance. As a result, each of the government systems (i.e., of the states and the union) could operate as a check on the other. As Rick Perry observes, federalism is “a critical part of the well-balanced American constitutional order.” (2) Such balance may be inherently elusive in any federal system given the nature of power to move in one direction or the other.

On one side of balance in favor of state governments, the tendency of power in a federal system could be toward dissolution, while once a federal system has crossed a threshold of greater union power, the tendency could be toward eventual consolidation. For example, whereas the E.U. is not in balance because the state governments have more power than does the E.U. apart from the state governments, the U.S. is not in balance because the U.S. Government has nearly consolidated power at the expense of the state governments. Both unions would do well to shift power domains between their two respective governmental systems in the direction of balance.

Federalism is particularly well suited to an “extended republic,” or modern-day empire, such as the U.S. or E.U. Considering that Ireland was a kingdom member of the British empire and a member state of the E.U., while Pennsylvania too was a member of the British empire, the E.U. and U.S. are thus commensurate, as are Ireland (and Britain, the host kingdom of the British empire and a state of the E.U.) and Pennsylvania. In fact, Britain (less Scotland) was a province (before it was split in thirds for political reason) in the Roman empire. Hence by broader implication, the E.U., U.S., British empire and Roman empire are all on the empire level, and their states/kingdoms/provinces (respectively) are on the same level. These two levels are qualitatively and quantitatively different.

Whereas an early-modern kingdom-scale polity can be diverse or homogenous internally, an empire is inherently diverse because its units are or could be reckoned as equivalent to the early-modern kingdom (i.e., the modern countries in Europe and the isomorphic American states based on the British colonies along the east coast of North America). Indeed, the prospect of the United Colonies was referred to on both sides of the Atlantic as “a potential empire” until 1776 when that empire was being realized as an alliance. In other words, the colonies were designed as replicas of the host kingdoms in the sense of the ancient Greek (rather than Roman) colonies. Both Ireland and Pennsylvania were members of the British empire (the kingdom of Britain being itself the host member). While federalism could be applied to Britain, Ireland or Pennsylvania (particularly where there is diversity within them), the system of government is particularly suited to compound polities at the empire-scale, given the inherent diversity at that level (or scale).

Federalism works well at the empire level because the inherent diversity can be accommodated rather than stifled. I suspect that the U.S. being on the empire level is not lost on Governor Perry. Furthermore, he makes explicit the point that the accommodation requisite for a federal balance is not easy, for it takes great tolerance. I submit that such tolerance in turn takes some awareness of the U.S. being on the empire-level (and scale). Referring to the tolerance needed, Governor Perry declares, “I’ll fight to the death for California’s right to decide for themselves how they want to live.” (3) He quickly notes that some of the implications are repugnant to him. For example, he recoils from the prospect of legal gay marriage and marijuana in a semi-sovereign republic of California. Of course, tolerance would be needed across the ideological spectrum.

It could just as well be said that liberal democrats in Massachusetts might recoil in utter disbelief in hearing that Kansas has outlawed abortion after the twentieth week (which occurred in April, 2011). Were more governmental sovereignty shifted to the states from the U.S. Supreme Court, state governments could outlaw abortion outright. Americans would have to confront the question of what they should insist on across the union, for what an American would be entitled to across the union would be narrowed as state governments take on more domains of policy.

It would be interesting to ask Governor Perry whether a fetus’ right to life is something that should be guaranteed to every fetus throughout the union, and if so, whether we would be right back at consolidation under the rubric of everyone’s “we all should stand for X,” where X can mark not only the spot, but the entire carpet. In other words, a balanced federalism means that the citizens of a union tolerate differences that they care about; one must be willing to say, “I don’t agree with that, but if the people of Texas want it, they should have the right to determine their own way of life.” This means taking seriously the empire-scale of the U.S. being constituted by republics.

Indeed, the U.S. Senate’s members are republics, not citizens. That is, that body is, strictly speaking, an international organization wherein the member states have equal suffrage. The U.S. House represents citizens irrespective of their republics and thus is of the species of national government. In this respect, empire-level governance reflects that of its member states even though the two levels are qualitatively different as polities and in terms of scale.

In short, the head of the government of Texas, Rich Perry, is aware of the need for tolerance in restoring the balance to American federalism (has there ever been such a balance?). Lest he is too successful, balance does not mean that the state governments hold most of the power. Hence, the issue is not “state rights.” Rather, the thesis bearing on American federalism hinges on balance as against either dissolution or consolidation. If a shift back to balance does occur, the challenge of design will be on how to safeguard the achievement from going too far in either direction. Theoretically, a design of checks and balances pitting ambition against ambition can conceivably sustain the equilibrium of balance. Perry’s crusade is thus not sufficient, even if it is a good start. As daunting as going into the head-wind of extant concentrated power is, the abstract work needed on design is perhaps even more of a challenge.

Click to add a question or comment on Rick Perry on federalism.

Footnotes:

1. Kevin D. Williamson, “Rick Perry’s Tenth Commandment’s Washington Shall Not Micromanage,” National Review, April 4, 2011, pp. 28-31, p. 28.

2. Ibid., p. 29.

3. Ibid.

Cigaretter Ordinance

0 comments Posted by Find Insurance Online at 7:27 PM

It must have taken up an hour and half of the meeting last night. Random thoughts:
The sign portion is a positive step, but still allows up to 50% of the windows to be covered. Not sure what is "historic" about this?
I have heard the Chamber of Commerce did not oppose this since it was would mainly only hurt the biggger chain stores not the small stores. I can think of some smaller

On the Cruelty of Gadhafi's Libyan Troops from a Nietzschean Perspective of Strength and Weakness in a Will to Power

0 comments Posted by Find Insurance Online at 2:40 AM

Gadhafi, or any tyrant who violates the human rights of citizens, can be reckoned as weak rather than strong from a Nietzschean standpoint. Such an analysis could embolden (i.e. awaken) protesters around the world who remain under the subterfuge of a ruler's enforcement of his or her assumed dominance.

USA Today reports that “(t)roops loyal to Moammar Gadhafi may be torturing and executing rebel prisoners.” This is according to human rights workers and physicians near the front lines. Such treatment would constitute war crimes under the Geneva Convention. Physicians said the bullet wounds on one man's body weren't meant to kill, but to torture. "When you put a gun to his head, that's execution," said Mohammed Hussain, the head of intensive care at a hospital near the front lines. "When you shoot him here and here and here, that's something else. That's torture. They want him to feel the pain." This last remark struck me as particularly revealing.

What sort of mentality derives a feeling of pleasure from perceiving another person in pain? To what extent is it the other person feeling the pain that is pleasurable to the person watching? Alternatively, the inflicting of the pain could be pleasurable. The inflicting pleasure for the inflictor might involve the pleasure of having power, as in having control of another person against the other person’s will. Such a will to power is a principal motivator, according to Nietzsche. He avers that human beings are primarily motivated to feel the pleasure that comes with exercising power. Yet such pleasure is in the exercise of one’s strength rather than in cruelty itself. It is the weak, who, in being driven to dominate beyond their innate strength, delight in cruelty as a means to enforce their domination. In other words, the weak who have an irresistible urge to dominate have to instill (or inflict) their dominance because they are not strong and thus naturally to be respected as powers.

Therefore, the troops loyal to Gadhafi were displaying their condition of weakness rather than their strength by devoting time and energy to being cruel. With the strong, damage is incidental to the charge rather than intended; the strong relish their experience of strength in conquering and therefore they are not interested in cruelty. That is to say, harm is a byproduct of the vanquishing by the strong, as the latter conquer out of their overflowing confidence of strength. This can perhaps be thought of in terms of stepping outside in the cold after building up a sweat from exercise—the excess heat radiates outward from one’s body such that one does not even feel the cold air. What is the cold to me? Similarly, what are the parasites to me who fall by the wayside as I take the village? Any intent to be cruel to a parasite would be a waste or diversion from the strong vanquisher’s self-confident feeling of power that naturally issues out in his or her strength. Only weakness with a relentless instinct to dominate would be oriented to cruelty as a means, for the feeling of pleasure of strength is not available or realizable.

For example, "Col. Gadhafi's militias are brutal," said Mustafa El Gheriany, media liaison for the Transitional National Committee according to USA Today. "They did that probably on purpose to scare our young men, to show them that they are not taking prisoners.” This motivation would be an alternative to simply wanting to inflict pain or to see another person feel it. Even so, the use of cruelty as a means is ultimately to impose one’s dominance, which means that the person’s strength is not sufficient. In other words, the person using cruelty to send a message has an urge to feel more pleasure from power than his or her weakness can proffer in itself.

Essentially then, human rights advocates point to the tactics whereby the weak who suffer from a hypertrophic drive to dominate seek to enforce, or take, beyond their native pith. This investigation can lead to the following questions. Why is it that certain persons of weak constitutions seek to dominate nonetheless, rather than simply to be content with whatever pleasure naturally issues from the power in the strength they do have? Furthermore, is dictatorship as a form of government a weak form in that autocrats do not simply lead, but are almost invariably oriented to efforts to enforce their dominance by intentionally inflicting pain on protesters? It would be ironic were unarmed protesters in the streets stronger than the rulers whose dominance is being questioned or repudiated. Indeed, such repudiation strikes at the core of the effort of the weak to dominate; hence such violence as was evinced by Gadhafi should be no surprise.

To the weak who are driven to dominate, the refusal of others to acknowledge the imposition or enforcement of their claim must be utterly intolerable. “How dare they!” the weak dominator is apt to exclaim even though the strong naturally rebuff the pretentions of the weak. In fact, Nietzsche thought it remarkable that the weak are able to hoodwink the strong into taking the autocratic enforcement mechanisms seriously. In the case of the mass protests, enough fortitude among enough unarmed protesters could simply overflow the boundaries invented by the tyrants. Were the people itself mobilized, the autocrat might realize that were the entire populous killed, he would have no one to dominate! There would be no feeling of pleasure in exercising power over a dead city. The strength in the people as a whole lies in simply being able to say no, yet this strength is typically hid from the strong by the weak who benefit from the subterfuge.

Click to add a question or comment on human rights in Libya according to Nietzsche.

Source: Greg Campbell, “Libyan Doctors Suspect Brutal War Crimes,” USA Today, April 12, 2011, p. 6A.

Tuesday, April 12, 2011

Wellfleet Harbor Steamboat

0 comments Posted by Find Insurance Online at 11:25 PM

Business has ben busy as of late. Today I was visting a client in Attleboro and the owner, who is pretty much retired was there. Ask him what he has been up to and he showed me this video:

Surveillane Cameras

0 comments Posted by Find Insurance Online at 7:19 PM

In the enwspaper today there is a picture of three kids, who were arrested for the double murder this past week-end. In the story, it mentioned how the surveillance cameras helped the police. I can not tell you how helpful these are for neighborhoods.

The City should do all they can to secure monies (Weed & Seed??) to install these wherever they can and have a dedicated person, or hire someone

Absa, Barclays start African co-operation in Botswana

0 comments Posted by Find Insurance Online at 7:12 PM

By Renee Bonorchis (Business Report) -- April 12 2011Absa and Barclays, which controls the Johannesburg-based bank, have started selling insurance in Botswana as they plan to co-operate more closely to expand in other African countries.“We want the same insurance licences in Mozambique and Zambia,” Louis von Zeuner, Absa’s deputy chief executive, said in an interview on Friday. In the past, Absa

IMF backs Swazi government budget loan

0 comments Posted by Find Insurance Online at 7:10 PM

Mantoe Phakathi - April 11 2011Barely days before a looming “uprising” set for tomorrow to pit the Swaziland government against growing political and economic discontent, Prime Minister Barnabas Dlamini on Friday announced receipt of a letter of comfort from the International Monetary Fund (IMF) to enable the country to borrow funds for budget support.Through this document expected in the next

Discours de M. Johnnie Carson sur la politique des États-Unis à l’égard de l’Afrique en 2011

0 comments Posted by Find Insurance Online at 7:07 PM

WASHINGTON, 11 avril 2011/African Press Organization (APO)/ — Département d’ÉtatAllocution de M. Johnnie Carson, secrétaire d’État adjoint Bureau des affaires africainesCentre Woodrow Wilson -- Washington - Le 5 avril 2011La politique des États-Unis envers l’Afrique en 2011 : les enjeux du temps présentJe tiens à remercier Steve McDonald et le centre Woodrow Wilson de m’avoir invité à prendre

Statement at the conclusion of OHCHR mission to Egypt 27 March to 4 April 2011

0 comments Posted by Find Insurance Online at 7:04 PM

CAIRO, Egypt, April 11, 2011/African Press Organization (APO)A delegation of the Office of the UN High Commissioner for Human Rights (OHCHR) said that there had been a number of clear human rights achievements in Egypt since 25 January and encouraged the country leadership to translate the legitimate aspirations of the Egyptian people for change into concrete democratic institutional reforms. It

Labor-Management Relations: Starving Workers as a Childish Tactic

0 comments Posted by Find Insurance Online at 11:40 AM

Before the industrialization in the nineteenth century, nothing "intrinsic or permanent separated those who hired from those who hired out" because "many laborers could hope to ear and saven enough to become their own employers." (1) That is to say, the employee/employer distinction was not overlaid with connotations of disparate distinctions, such as child/parent and subject/ruler. Relatedly, the two parties to the economic agreements bearing on labor in exchange for money had roughly equal bargaining power. As the United States industrialized, however, a distinct working class developed as industrial workers found their upward mobility cut off by rising start-up costs and other barriers to entry. Additionally, the advent of the monopolies (and oligopolies) swung the balance of power in contract negotiations strongly in favor of the corporations. With the added leverage came pretensions going far beyond what could be justified by the relation of labor and capital in a commercial contract. The case of the first transcontinental railroad, which was completed in 1869, demonstrates just how distended the pretentions on the corporate side had become.

As the Central Pacific Railroad was working eastward on the first transcontinental railroad in the late 1860s, Chinese immigrants were hired at $26 per month (including board). The rate for white Americans was $30. The railroad was getting a good deal for the Chinese, as some of them had had experience using explosive black power (which had been invented by Chinese). Where the railroad had to blow out bedrock along a cliff, Chinese workers were lowered in reed baskets to place explosive in the rock and ignite the fuses in time to get out of the way. It was highly skilled and dangerous work. Accordingly, the Chinese struck for $40 per month. The reaction from the railroad partners gives us a snapshot of the attitude of management toward labor in nineteenth-century America.

According to Brands, “the Central partners determined not to give in. ‘If they are successful in this demand, then they control and their demands will be increased,’ Hopkins warned the others. Edwin Crocker put the danger differently. ‘The truth is, he said, ‘they are getting smart.’” (2) From this description, it can be seen that the partners viewed the Chinese demand for a higher wage as an “all or none” matter rather than as one for negotiation. Moreover, the partners’ perception was that the matter was fundamentally one of control rather than compensation. That the Chinese demand probably had merit is supported by Edwin Crocker’s admission that the Chinese were getting smart. The Chinese’ skill with explosives also lends support to this view. Had the Chinese workers been over-reaching, Crocker might have said that the Chinese were getting greedy. Therefore, we can conclude more generally that in labor-management disputes, managers probably tended to react in terms of power rather than economics. Moreover, the power presumed was beyond that which pertains to an economic negotiation and contract. In other words, the partners assumed more control than they had a right to claim. In actuality, they and the workers were two parties to an agreement, rather than say rulers and subjects. The presumption led to a rather extreme tactic.

According to Brands, “Charles Crocker ordered the provisioners to the Chinese camps to stop supplying them with food. ‘They really began to suffer,’ Edwin Crocker recalled.” Edwin Crocker reported that after a week, Charles told the laborers “that he would not be dictated to that he made the rules for them and not they for him.” The hungriest of the strikers agreed to return to work. (3)

Although it could be argued that the contract for board also involved labor, the railroad would presumably be obligated to transport the workers back to civilization. Such contractual technicalities aside, starving other human beings in order to manipulate them to get one’s way is indicative of a criminal mind; it is essentially attempted murder. The over-extended presumption of a right to power based on an economic contract between two parties is obvious here. That the partners perceived the over-arching axis as one of control rather than money is evident from Charles Crocker’s use of dictated to and rules. These words are out of place in an economic transaction. In short, Crocker was presuming himself to be a ruler rather than a party to a contract. In addition, his tone suggests that he might have held the view that his side of the contract somehow made him akin to a parent, thus fittingly oriented to scolding the children.

The projections of being a ruler and a parent are so unnatural, or out of place, in an economic relationship between two parties that the psychology of the perpetrators must be questioned and found wanting. Even the psychological wherewithal and legal legitimacy even to stand as party in a contract can be questioned, so it is telling that the partners got away with their attitude and conduct. Ironically, it was the partners rather than the Chinese who were acting like children, yet how many people in the society and government who heard of the strike perceived the partners as being seriously out of line? If this perception was lacking because of what the society at the time attributed to being a business practitioner with a title, the problem may be in the societal values as well as what was presumed to come from position itself.

That childish (and perhaps even sadistic) behavior could issue out of a corporate office awash with economic leverage, being checked neither by whatever power labor could muster nor at least by humane societal values, points to the ability of corporate capitalism to effectively project its version of social reality onto society. A miner's mintrel in the wake of the unsuccessful "Long Strike" against the Philadelphia & Reading Railroad in 1874 captured the new situation facing both the workers and the country from the emergence of the modern corporation:

"Well, we've been beaten, beaten all to smash
And now, sir, we've begun to feel the lash,
As wielded by a gigantic corporation,
Which runs the Commonwealth and ruins the nation." (4)

Footnotes:

1. Henry W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), 96.

2. Ibid., 55.

3. Ibid., 56.

4. Priscilla Long, Where the Sun Never Shines: A History of America's Bloody Coal Industry (New York: Paragon House, 1989), 109.

Click to add a question or comment (and to view them) on historical labor management relations in the railroad industry.

The specter of Egypt's colonial interior

0 comments Posted by Find Insurance Online at 1:47 AM

by Aaron Jakes -- Monday, 11 April, 2011In the spring of 1896, the British Consul-General and de facto colonial overlord of Egypt, Lord Cromer, submitted his annual report to Parliament on the "Progress of Reforms" in the preceding year. Among the proudest accomplishments he sought to advertise was a wholesale reorganization of the Ministry of the Interior. A streamlined administrative hierarchy

Monday, April 11, 2011

Tax Avoidance at GE: On Corporate Income Taxation

0 comments Posted by Find Insurance Online at 11:11 PM

In spite of $14.2 billion in global operating profit ($5.1 billion on U.S. operations) in 2010, GE paid no corporate income tax to the U.S. Treasury that year thanks to offsetting prior losses by GE Capital (i.e., bad loans). In spite of that unit having received TARP funds from U.S. taxpayers, the corporation was able to avoid paying any income tax. This seems like Rousseau's social contract run amuck: corporate welfere in exchange for nada. Such a modus operendi is in line with the corporate mission: to economize in the sense of maximizing (or satisficing) what is taken in while minimizing what must go out. In other words, a corporation aims to turn itself from a productive, lean throughput to a concentration of capital in its own right.

In terms of U.S. corporate income taxation, the extent of resources that corporations devote to minimizing what they owe the U.S. Treasury is money that could be better spent, or invested, in productive enterprise. For example, G.E. files returns in 250 jurisdictions and has a staff of 975 working in the corporation's tax department. Even if those people pay for themselves and more by reducing the company's tax liability, the company could eliminate that entire department and orient its global operations in terms of efficiency rather than taxation were income tax applied only to individuals. The legal person "doctrine" aside, corporations are not citizens; rather, they are groups of citizens.

Robert Samuelson suggests that the top corporate income tax rate be reduced from 35%, which is one of the highest in the world. He argues that the 15% rate in individual income taxation on dividends and capital gains should be increased. The effect would be regressive, for the top one percent receive two-thirds of all the capital gains and dividends. At the very least, the 15% is relatively low in the individual income tax system and most of the taxpayers subject to the tax could afford a higher rate.

In my opinion, Samuelson does not go far enough, for even with a lower top corporate rate companies would retain their tax departments and steer profit into countries with low tax rates (for there would still be differentials between countries). Theoretically, it does not make sense to tax both corporate income and dividends. Furthermore, corporate income taxation treats companies as end-points rather than as throughputs. The implications of taxing individuals rather than corporations are staggering not only for more efficient productive investment, but also for attracting foreign direct investment to the U.S. In addition, public accounting firms could eliminate their tax departments and focus all of their attention on auditing--an endeavor made all the more important on account of the misleading financials on Wall Street leading up to the financial crisis of 2008. Rather than getting headaches over the intracacies of tax rules, public accountants could devote more attention to whether it is enough to follow GAAP in giving an unqualified opinion.

In short, taxation ought not to have so much gravity in orienting corporate America. Instead, business would do much better in focusing more on building better mousetraps. Individuals who benefit financially from the productive enterprise would be taxed, perhaps even without all the deductions that enable them to avoid being taxed. Imagine a tax-returnless system of individual income taxation involving a fixed low rate applied like a fee on any income taken in, whether from wages, salary, dividends or capital gains. Ironically, by simplifying taxation, more of it could be collected even as businesses are left to do business.

Click to add a question or comment on GE and corporate income taxation.

Source: Robert Samuelson, "The Real GE Scandal," Newsweek, April 11, 2011, p. 21.

The Nineteenth-Century Eclipse of Democratic Governance by Capitalism. Part I: Jacksonian Democracy over Capitalism

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I contend that a trajectory wherein capitalism came to eclipse or capture democratic governance occurred in the nineteenth century in the United States. President Andrew Jackson’s actions in the early 1830s can be viewed as a benchmark wherein government officials were still willing to relegate the interests of capitalists for the good of the whole.

According to Brands, “Andrew Jackson embodied the democratic ethos, by both his humble origins and his reverence for the people as the wellspring of political legitimacy. Jackson waged political war on the pet projects of the big capitalists of his day, smashing the Bank of the United States, vetoing federal funding on roads and canals, and beating down tariff rates.” (1) Actually, Jackson’s object was not to reduce the capitalists of his day; rather, he was attempting to protect the balance between the general and state governments in the federal system.

For example, President Jackson vetoed federal funding for the Mayville road because it was confined to the territory of Missouri. That is, the road did not cross state lines, so it did not involve interstate commerce directly. The state itself had jurisdiction. Had Jackson not vetoed the funding, then interstate commerce “regulation” as spending would have opened the floodgates to Congressional power. Jackson was also rejecting the argument that spending for the general welfare goes beyond the enumerated power domains. In refusing to fund the public works project, Jackson was not acting in the interest of the potential private construction bidders. Hence as a byproduct the president was standing up to capitalists in his effort to contain federal power from encroaching on the state governments.

Second, Jackson feared that having a bank of its own would give the general government in Washington too much power relative to the state governments. For example, the Second Bank of the United States could conceivably print an unlimited number of bank notes to fund its government’s spending “for the general welfare”—eviscerating the enumerated powers in the process. Jackson refused to fund the bank before his re-election. Thus he risked having the financial sector turn against him in an election season. The long term viability of the American federal system was worth more to him than his own continuance in office.

Notably, Jackson was willing to cross Wall Street (something notably absent in President Obama’s financial “reform” law) for the good of the republic’s governance system. Put another way, the president’s protection of the system of democratic governance wherein governments check and balance governments in federalism trumped the particular financial interests of capitalists. By the time of Lincoln’s tight re-election race in 1864, capitalists would find a president willing to use (and defraud) the government to benefit them financially. The balance of power between capitalism and democracy had already shifted.

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1. Henry W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), p. 5

The Nineteenth-Century Eclipse of Democratic Governance by Capitalism. Part II: Wartime Exploitation of Government by Lincoln and the Railroads

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By the time of Lincoln, the capitalists had amassed sufficient capital that they could literally write federal laws concerning them and exploit the government beyond their own statues for additional profits. In 1869, the first transcontinental railroad was completed. Brands notes that “the capitalists commanding the road recruited the institutions of government to share the risk and costs of construction.” (1) In other words, the capitalist investors (not the workers) get the rewards while the taxpayers take on the risk. Capitalism might thus be called convenience by another name. To be sure, a political ideology came into play that was highly conducive to this arrangement.

By the Civil War, “(a)mong the Republicans, support for a Pacific railroad fitted a general belief that government could benefit the American people by helping American business.” (2) This was an early version of what is good for GM is good for America. The fallacy in this assertion is that what is good to a part is necessarily good for the whole. For example, a part benefits from exclusion (e.g., not paying for externalities), which is not in the interest of the whole.

In any case, the fashioning of the first transcontinental railroad during the Civil War involved Lincoln, Stanford (the Governor of California and a partner of the Central Pacific Railroad),

and the two railroads in some shady dealing and related conflicts of interest. Generally speaking, the capitalist capture of democratic government can be expected to spin off various unethical twisters.

Funding by the U.S. Government for the railroad would entice California, which might have adopted a pro-Confederate independence otherwise, to remain in the union. (3) It was also not lost on Lincoln that the western republic had gold. Accordingly, the new party adopted into its platform the plank of government financial assistance in the undertaking. Brands reports that “Californians’ brave talk of self-sufficiency suddenly ceased when they heard the Republican offer.” (4) For the plank to be converted into legislation favorable to California, as well as to the railroads, the remnants of democracy had to be overcome in the Congress. This required “the concerted efforts of small armies of lobbyists.” (5) This experience gave capitalists a “way in” to the halls of the national government, which they could exploit in the future. In other words, the Republican policy involved a shift in government with respect to the influence of capitalists. American government would never be the same.

Specifically, Durant’s Union Pacific Railroad bribed members of Congress. Not to be outdone, Theodore Judah brought shares of the Central Pacific Railroad to Congress to disperse as he saw fit. (6) The result was the Pacific Railway Act of 1862, which was essentially written by the railroads even though they had vested interests in the project. (7) The federal government would offer the railroads loans financed by 30 year bonds held by the taxpayers and grants of land. If the project failed, the certificates would be worthless.

To be sure, private capital markets could not attract investors willing to risk large sums on such a long-term (and risky) payoff. (8) The interest of the U.S. Government in integrating the union such that new western states would not follow the example of the Confederacy made it worthwhile to make up for the shortfall in those markets. The problem is that the precedent risked giving capitalists access to the Treasury—a new source of food for the new feeding machines. It is not as though the cats would have one taste of the tuna only to never come back for more. Once on the scent of the government money, the capitalists would surely follow up in the halls of Congress. The case was the same in California.

Leland Stanford (the namesake of Stanford University) was elected governor of California without having to reduce his participation in the Central Pacific. His brother Philip distributed gold coins to voters. As if there were no conflict of interest between his office and his business interests, he got the California legislature to contribute $15 million to get the transcontinental railroad started on the California end. (9) In general, the capitalist capture of democratic government makes use of the public’s proclivity to ignore conflicts of interest. This continued to be the case for Governor Stanford.

In July 1864, the Pacific Railway Act of 1862 was amended so the U.S. Government would bear most of the risk (giving up first lein) and the railroads would get even more from the government. Even though the railroads had written the original act, only with the amended act did the capitalists find the railroad to be “a most attractive investment.” (10) It was no concern to them that in 1864 the U.S. Government was nearly bankrupt on account of the war. Nor did the sacrifices being made on the battlefields in the wilderness intimate to the capitalists that they too should sacrifice so the U.S. Government could add more resources to the war effort. The matter was one solely of risk and profit calculations—the railroads leveraging the government until the investment was sufficiently sweetened for enough potential investors to come on board. Duty, or ethics more generally, does not compute in business terms. Business ethicists would be wise to remember this.

In any case, the U.S. Government would pay the railroads $48,000 per mile in the mountains and $32,000 per mile on the flat land away in the desert. The self-written terms not be enough for the Central Pacific railroad, Governor Stanford used California’s geologists to claim flat land as mountainous. With a difficult election approaching, Lincoln overruled his own secretary of the Interior in favor of his railroad allies in California. (11) Lincoln himself had been a railroad lawyer. The preserver of the union was inadvertently making the task more difficult for the U.S. Government by bowing to the new capitalist might at the expense of his own government. In other words, he was willing to acquiesce in the defrauding of his own government even when it was fighting a rebellion. Such is the allure of capitalists at the expense of public governance in the name of democracy.

Lest this information on Lincoln be deemed as counter-productive by Lincoln fans, pointing out the president’s faults makes him “all the more beloved because they discourage us from turning him into a plaster saint. His greatness, without the flaws, would make him unapproachable and remote — a canonization made even more probable by his martyrdom.” (12) Made human, all too human in fact, Lincoln can stand for us as a marker on the trajectory of capitalism over democracy that occurred during the nineteenth century.

Speaking on the capitalist inroads in democratic government already by the end of the Civil War, Rep. Elihu Washburne, interestingly a Republican lawyer from Illinois and the chairman of the U.S. House Commerce Committee, said, “I have no faith in the noisy patriotism of shoddy contractors and none in the men who in these times of trial and tribulation through which the country is passing are scheming and plotting to fill their own pockets while the nation is verging toward bankruptcy. The sublime and unselfish patriotism of our people, . . . a people suffering, bleeding, dying for their country, is in magnificent contrast to the flaunting counterfeit everywhere to be seen.” (13) Worse still were those contractors who had paid gold coins to gain public office only to engage their government in the service of their capitalist ventures. Of the “flaunting counterfeits” who would avoid government office, the richest would become the robber barons of the Gilded Age. Government would be theirs for the taking, such that holding office would no longer be necessary.

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1. Henry W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), p. 40.

2. Ibid., p. 42.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid., p. 44.

7. Ibid., 48.

8. Ibid., p. 45.

9. Ibid., p. 47.

10. Ibid., p. 49.

11. Ibid., p. 49.

12. Ross Baker, “Lincoln—Like All of Us—Had his Flaws,” USA Today, April 10, 2011 (on-line).

13. Congressional Globe, 38^th Congress, 1^st session. June 21, 1864, 3150-152. Quoted by Brands, American Collosus, p. 48.

The Nineteenth-Century Eclipse of Democratic Governance by Capitalism. Part III: The Robber Barons

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By the end of the nineteenth century, a small group of “robber barons,” the captains of industry, had come to hold such tremendous power in the American republics that those captains of industry could influence government policy profoundly, even when they stood to gain financially. According to Brands, “Wealth had always conferred power, but never had a class of Americans been so wealthy as the great capitalists of the late nineteenth century, and never had such a small class wielded such incommensurate power.” (1) Such power was an inherent threat to the republic itself and its democratic foundation based on the equality of one citizen, one vote. The “great capitalists” could use their power, for example, to buy office holders of various stripes in order to evade governmental constraints and even profit by government policy and its largess.

Brands maintains, for instance, that “(i)n accomplishing its revolution, capitalism threatened to eclipse American democracy. . . . Rockefeller [for example] held whole regions hostage to his petroleum monopoly; he browbeat city governments, extorted favors from the states, and defied the federal government to rein him in.” (2) When the Ohio Supreme Court went after his company for restraint of trade in the early 1890s, for example, the monopolist simply converted the Standard companies into a giant trust. Even when facing the decision of the U.S. Supreme Court breaking up the Standard Oil Trust in 1913, each of the resulting companies had the same ownership as before. In fact, the managements of those companies continued to work in the same building in New York City! Rockefeller’s monopoly could even get around the U.S. Supreme Court, to say nothing of the impact in terms of favorable legislation from campaign contributions and bribes paid to elected representatives.

In the twentieth century, large American corporations had war-chests of funds to contribute to political campaigns and otherwise purchase media spots. The leverage of capitalists over government and democracy by that time can be summed up by Sen. Dick Durbin’s comment after Wall Street effectively killed an amendment that would have given judges the power to adjust the sub-prime mortgage terms for those facing foreclosures after the financial crisis of 2008. Durbin simply said, “The banking lobby owns Congress.” (3) That bankers could write (or sabotage) legislation bearing on themselves even in the wake of a financial crisis in which the banks were at least contributory negligent (e.g., liars loans) furnishes us with a stark indication of what has followed from the trajectory of capitalists over democracy that occurred in the nineteenth century.

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1. Henry W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), p. 7.

2. Ibid. See also my chapters on John D. Rockefeller in Godliness and Greed. See also my related essay on the efficacy of religio-moral constraints on greed.
3. Ryan Grim, “Dick Durbin: Banks “Frankly Own the Place,” The Huffington Post. April 29, 2009. See also my essay on the banking lobby in Congress.