Monday, March 25, 2013

Division

The Supreme Court is taking up Proposition 8 and the Defense of Marriage Act, and it's going to be a big shift in social policy for the US either way it goes. But it shouldn't be.

Gay marriage has become the political talking point of choice for social conservatives and liberals alike. They use their position on this one issue to grapple with their base. For the conservatives, it has always been a losing battle as it becomes harder and harder to explain their opposition without sounding like discriminating bigots. The main argument they've wielded in recent years is the whole "Bible says it's wrong" argument. The problem with that argument, as you may have guessed, is that our political system is not built on religious doctrine (one can make an argument for or against its influence). But it's the only argument they have against gay marriage.

The funny thing is, fiscal conservatives should really be in favor of gay marriage, since it measns more tax revenue for the federal government. It also means a more streamlined insurance industry, since providers won't have to fight with those who've lost life partners and want to collect benefits. It would make it easier for couples looking to adopt as well, since there wouldn't be such a big issue over which partner will have custody.

Aside from the legal and social reasons for supporting gay marriage, it's worth noting the profound moral reasons as well. Denying rights to a segment of the population because of their lifestyle is discrimination, pure and simple. It doesn't matter if you believe that homosexuality is biological or if it is a choice, if a person is living their life in the manner of their choosing, it is wrong to limit their rights and protections because of that. It is an imperative of equality that we extend the same rights to all individuals in equal measure. It was decided decades ago that all individuals over the age of 18 were allowed to vote, regardless of race, gender, or sexual orientation. It is illegal to discriminate for a job based on race, gender, or sexual orientation. This same logic should be applied to marriage.

I understand that Christians feel that to allow gay marriage is to threaten the institution itself. The problem is, there are many people who are not Christians who get married. Jews, Hindus, Muslims, Buddhists, Wiccans, Atheists, and Agnostics all get married. Does this threaten the Christian marriage institution? If a person chooses to become a Muslim and then gets married, is that a threat to Christian marriage?

So, I'm hopeful that the Supreme Court will ere on the side of equality and fairness, and not be bogged down by a religious doctrine that is meant to hold no weight in our politics anyway.

Monday, March 18, 2013

Cyprus Bailout

The recent news that Cyprus would be taxing 10% of every savings account in domestic banks has sparked major backlash, as well as a negative ripple effect through the global markets. But there's more than an unprecedented tax that makes the Cyprus situation unique. And it's worth taking a look at just why this tax is being placed on the people of Cyprus.

So, like many other small EU nations, Cyprus took advantage of the protection and stability of the Eurozone to borrow large amounts of money, driving themselves into debt. Like other countries that have done this (Greece is the best example), Cyprus was abruptly cut off when the recession hit back in 2007/08.

The thing that sets Cyprus apart is its banking system. First of all, the banks can make almost no money on bonds, so they focus a lot more on savings. Because of that, the Cyprus banks have very loose regulations to help attract big investors. This has led Cyprus to become a major tax haven for foreign Oligarchs, specifically Russians. Many wealthy Russians use the Cyprus banking system to keep their savings free from higher domestic taxes. The EU struggles with banking because different nations have different laws and regulations, creating pockets where investment and savings grow while others shrink. The Cyprus banks used all that foreign money to invest and keep themselves afloat, at least until the crisis.

Now, Cyprus is asking for a bailout for its banks. In other nations, the EU (really, Germany, but it's essentially the same thing) has demanded steep austerity measures to offset the influx of cash to bail out the government. But it's not just the governments that are asking for bailouts, its the banks. In Cyprus, the banks are demanding a bailout from the Cyprus government who, in turn, is asking for the money from their creditors.

The problem, though, is that the EU is not about to bail out a bunch of wealthy foreigners, especially not Russians. They are loathe to pour European Union money into a banking system that is used by wealthy non-EU tax cheats. So, the creditors gave Cyprus the ultimatum: charge the savings accounts to help with the bailout cost, or say goodbye to the Eurozone.

It's an interesting calamity. Cyprus is a relatively small country, like Greece, and both have been threatened with EU ostracization. Both have relatively small economies, and both have borrowed huge sums of money to help improve and maintain a high standard of living for their citizens. But Cyprus has been given what appears to be a no-win situation. Either they steal 10% of their citizens' money, or they are kicked out of the Eurozone. You can imagine why Cyprus faced a near-run on the banks, stopped only when the government ordered all the banks closed until Thursday, likely when the 10% tax will be incurred.

But wait, there are some limits on that tax. For one thing, it won't touch anyone with less than $100K. Second, it's worth noting what the alternative appears to be: the end of the Euro in Cyprus. What will everyone's money be worth when it has to be converted into domestic currency? Not only that, forget about Eurozone trade, Eurozone politics and "borderless" diplomacy, easy Eurozone protection and support, and so on.

Like I said, the EU has essentially put Cyprus in a situation they cannot possibly work out without serious damage to their credibility, economy, or both. The EU, and especially Germany, has got to stop demanding blood sacrfices for every penny they kick to these developing nations. Places like Greece and Cyprus can't keep up with the rest of the Eurozone economy, so they have to borrow. Then, the big banks in Germany and the other lending nations call in these debts, and demand austerity for them. Those small countries don't have much of a budget to slash, so every little bit hurts. This leads to layoffs, depressed economies, and more borrowing to keep things running, which demands more austerity to keep the cycle going.

I'm not saying the major powers of the European Union should just give away this money, and I can understand their reluctance to bail out the Cyprus banks. But they have to see now that austerity helps no one and hurts everyone, and that continuing to hold small countries to impossible standards, to the point of forcing complete chaos in their economy and banking system (not to mention global implications) is unwise, unfair, unjustified, and downright stupid. If they expect to get their money back from a country that has to steal the wealth of its citizens (by their own direction, mind you), and demanding spending cuts, they have no concept of basic economics and investment returns. That money has to be put to use, it can't be shackled to austerity cuts.

So, that's basically the Cyprus story. It will be interesting to see how this plays out, and how the rest of the Eurozone responds to whatever Cyprus ends up doing. Seeing as how they've closed their banks until later in the week, they seem to be leaning toward tax. Or, they are attempting to prevent a run and buy themselves enough time to fashion a new deal with their lenders. I wish them well. Any deal would be better than what they've been handed now.

By the way, the reason there aren't more links in this is because so few new agencies are reporting on it, at least beyond the fact that it is happening. Let's hope this gets more attention.

Sunday, March 17, 2013

Social Imperialism

Social Imperialism takes many forms and comes from many sources. The book The Constant Gardner is about British Imperialism in the developing nations of Africa, partnering with private industry (in this case, big pharma) to make tons of money and maintain socio-political control while the population is victimized as lab rats. Social Imperialism is the idea that a powerful outside force creates a need and then fills that need as a means of control and concentrating power.

As we begin to learn more about the new Pope, whose past has been spent serving the poor and destitute, it is worth noting that such work often comes as a result of those same institutions and their previous impact.

The Catholic Church is a great example. Their resistance to birth control in the Third World has not only contributed to the spread of AIDS in Africa, but has also done nothing to help with overpopulation and resource shortages. These types of decisions lead to situations where these countries must rely more and more heavily on the aid of organizations that directly contributed to their inability to support themselves.

Social Imperialism exists in the US as well. The cycle of cutting social programs, relegating spending to individuals, and stagnation of wages creates situations where those people most effected have nowhere to turn but private lending companies or privatized social programs, who in turn back the politicians that created those situations in the first place. Dependency is the currency of Imperialism, and power is it's wealth. With Dependency comes power, and with more power, more dependency is inevitable.

Social Imperialism is about more than just exploiting a situation, but creating a situation to exploit. There is enough food in the world to feed everyone, enough energy and technology that we no longer need fossil fuels, enough money to fully fund all of the infrastructure and health care plans we could ever want, but none of that is done. Why? Because there is no Power or Dependency to be gained from giving people a measure of control over their own lives. Great, powerful companies, wealthy and well-connected, control these systems, through government or not, to create a system of dependence on their product or service, so that they might gain more power over the people. That is the goal of Social Imperialism.

Thursday, March 14, 2013

Self-serving Bias

Paul Krugman wrote an op-ed last week about the booming stock market. As you may have noticed, the DJIA has been on a hot streak for the past week and a half, setting new records each day in what has been seen as a clear indication that things are getting much, much better. That, at least, has been the opinion of many well-respected economists and politicians.

As Krugman points out, though, making vague assertions about the state of our economy based on the stock market is not good economics, or even good logic. In fact, he says, you need only look at the stagnant wages, stubborn unemployment, and fantastical corporate profits to see just where all the growth is happening. And that's nothing new.

Krugman's article is particularly great because he points out a phenomenon that I've been frustrated about for some time. It's the tendency of academics, pundits, and politicians to propose ideas, and then take available evidence as validation for them. Krugman's point, and my complaint, is that this happens all the time, and it leads to shoddy reporting, bad science, poor logic, and eventually failed policy.


A great example that I know of is the issue of Glenn Beck, who has been spouting for years about the approaching hyper-inflation, and the need to go back to the gold standard. It's a self-serving idea, and Beck takes every up-tick in inflation as a sign that it's coming.....riiiggghtt......abbbbboooooouuuuuttttt........

Except it hasn't come. It's been five or more years, and it still hasn't happened. Beck argues that he's good at predicting what will happen, not when it will happen. That's a genius excuse, because it gives him an unlimited amount of time to be proven right. If we experience hyper-inflation at any time in the next few decades, you can bet Glenn will be tooting his own horn about how he was right all along. He was just many, many years ahead of his time.

Krugman has several examples of this self-serving issue, and how many people get caught up in these things. It's like the people who see the face of Jesus in their Cheerios. Has an Atheist ever seen Jesus in their Cheerios? No, because Athiests aren't expecting to find it. Until our greatest minds stop trying to prove how great they really are by being right all the time, maybe we should stop listening to them so closely when they try to tell us they know exactly what's going on.

Friday, March 8, 2013

Changes

So, it's been a while since I posted. I keep meaning to, but things have been very busy here recently and I haven't had time. Quite a bit has happened, which makes it even harder to just jump back in. But I wanted to point out an interesting and, in my opinion, important trend that I've noticed.

Ever since Obama's reelection, Republicans in the House have been acting differently. They've scaled back their rhetoric on a large number of topics, from the VAWA bill to immigration and entitlements, and even on taxes. Basically, they've made some strides toward the center.

While they've been doing that, they've been digging in their heels in other areas. The sequester (which they then tried to end, but only for the military-industrial complex), Wall Street Reform, and nominations have all been targeted recently for the GOP, which has solidified their positions on these issues by grandstanding (literally, in the case of Rand Paul), mass obstructionism, and essentially business as usual.

In other words, the GOP is moving while standing still. The reason for this, I think, is to put themselves in a good position for 2016. They failed in their attempt to oust Obama by sheer force of hyper-partisan willpower. In the 2012 elections, they tried to ignite their base at the expense of the general electorate. In 2016, they seem to be looking for a broader support system to carry them into the White House. They won't be facing a popular incumbent, and so I think they are attempting to build a track record that is more popular with the general public.

The VAWA is a great example, as is their renewed stance on immigration reform. In both cases, the GOP was once a staunch opposition to reform in both areas, and used their muscle in the House to kill any new measures. The VAWA reinstatement alone took months of back and forth wrangling over something as simple as protecting victims of violence in same-sex relationships. Standing on this principle during election season may have been smart, but digging in their heels on a bill that has major public support would have been stupid.

How does this change things in Washington? I think that it speaks to a slight change to the normal gridlock we've been seeing. I think we'll see a bit more movement in Congress to pass largely popular bills and nominations through without so much fuss. We're still going to see major opposition to big legislative measures, but it would take a miracle to change that. All in all, Congress seems to be working a little smoother, and I hope that it will continue to do so for our benefit.