What the 99% really needs

There was a great discussion on the Diane Rehm show yesterday.  It started out about the Occupy movement, but it focused mostly on the inequality of power among different special interests.   The Occupy movement thinks that this is caused by the difference between rich and poor (as I blogged yesterday) and therefore we need more income redistribution.  The panelists (Lawrence Lessig, Tyler Cowen, and a few Occupiers) represented both the right and the left (not GOP and Dem, but philosophically) and everyone was very well informed, intelligent, and not demagogic. 

Tyler Cowen made a few great points from the right.  He said that even in the 2008 election when Obama dominated the young vote, older people still outvoted young people by a wide margin.  So rather than occupying parks, maybe they should do more occupying of voting booths.  He also made the point that the wealthy and powerful interest groups will always seek to influence government for their own benefit and government (right and left) will always be susceptible to their influence. So the best way to make things equal is to minimize the influence of government on the economy in the first place. 

Of course you could take that too far:  we do need progressive taxation and a social safety net of some kind.  And regulating food safety, workplace safety, drug approval, and these kinds of things need to be regulated at the federal level to be efficient.  But if everyone were more educated about the issues, and not whipsawed this way and that by extremist talk show hosts (on both sides), maybe we can make the system more equal. 

Lessig made the great point that free market capitalism and crony capitalism are not the same things.  The free market has equal opportunity for everyone and does not allow the wealthy to abuse their power.  Crony capitalism is ostensibly free, but if the wealthy are free to use their wealth to exert influence, change the rules, and perpetuate their wealth (i.e. privatize profits and socialize risks), then that is a freedom we can do without.  What we need is the right kind of regulation that keeps the playing field level and then opens up a free market within that constraint. 

I want to download the podcast and listen to it 2 or 3 times.  There was so much good stuff in there.  If I get some new insights, I will add to this discussion.

The Occupy Movement

I think the Occupy movement has a strong point, but not the one they think they do.  They think they are protesting against a free market system that advances the interests of the top 1%.  But their best point is that the free market has been adulterated to the point that the top 1% manipulates the market so that is no longer a free market.  Friends of the powerful get mysterious benefits on both sides of the political spectrum.  Obama supporters getting green energy loan guarantees; Koch brother supplicants getting tax breaks and regulation waivers written into law as earmarks; Berlusconi cronies getting licenses for extra wireless network bandwidth; Russian oligarchy mysteriously getting access to new markets while their toughest competitors are indicted on tax fraud charges; US companies in China mysteriously getting inspected for safety violations that are clearly more violated by Chinese companies that haven’t been inspected, and on and on it goes. 

What the Occupy movement should be protesting for is not a step back from the free market but an acknowledgement that the free market is not really free and we need to admit is has its flaws.  We either need to prevent manipulation or rethink the way the market is implemented.

Science and the Supernatural

Yesterday’s second hour of On Point was an interview with a theoretical physicist who was talking about the nature of the universe and existence.  As usual with these kinds of interviews, someone had to call in and ask if her research would eventually prove or disprove the existence of G-d or other supernatural phenomena usually considered in the realm of religion.  I hate when they mix these two things up.

I like Stephen Hawking’s view on the subject, which I think I have blogged about before but will add a few additional thoughts.  He says that science can never answer these questions.  By definition, the supernatural is made up of whatever we believe to be true but cannot prove with science.  So as soon as we prove or disprove it with science, it ceases to be supernatural in the first place.

The reason I like this perspective is what it means for faith.  There is some comfort and reliability that we get from having science prove and disprove things.  Otherwise, we wouldn’t be able to design technology, medicine, and all of the other perks of civilization.  But there is also some comfort and strength that we gain from having pure faith in something, the kind that is based on zero physical or logical evidence.  Anyone who hasn’t experienced this kind of faith may not know what I am talking about, but it is a really powerful feeling and can be used for an incredible variety of life enrichment and betterment goals. 

Not only would a scientific proof or disproof of a supernatural phenomenon remove it from the realm of the supernatural, it would also eliminate it from the realm of faith.  We might gain some knowledge that gives us more of the technology perks, but we would lose the spiritual perks we get from faith.  I wouldn’t want to make this sacrifice even if I could.  I would rather not have existential physicists proving or disproving supernatural phenomena.  I get a lot of benefit from my unscientific faith. There are plenty of other good things for physicists to research.

Of course, I am not talking about organized religion and the associated bureaucracy.  Telling me to believe something because some text or prophet says so is not faith either.  I would be relying on their knowledge in the same way that I am relying on the chemist’s knowledge of how to distill crude oil into gasoline.  These might be based on trust, but not pure faith.  Pure faith is when you believe in something because you BELIEVE in it.  

The new European Monroe Doctrine?

The first hour of Diane Rhieme was a discussion of the European economic crisis.  But in my usual stream of consciousness stlye was able to make a leap that I think it pretty insightful and possible relevant. 

Most of 19^th century US history was guided by the Monroe Doctrine and western expansion.   In the US’s unique version of empire building, we took territory from Mexico, Spain, and Canada to expand all the way to the Pacific Coast – from sea to shining sea.  Of course, there were underlying ulterior motives, like rich mineral resources, lumber, territorial expansion, and imperialism.  But what was interesting is that the public face of this expansion was that the current owners of these territories were mismanaging them.   Mexico had 25 governments in 25 years, mostly due to military coup.  So they were ignoring their northern territories in Texas and Arizona because they had no money left for development.  Canada was mismanaging the Oregon Territories because they just didn’t have enough people.  They could barely fill their own heartland let alone expand to new territories.  The Native American tribes didn’t seem to have any desire to develop the land at all.  So by taking these territories away from them, we were doing them a favor.  We could more effectively develop and efficiently manage growth.  We were doing it for their own good.

So now jump to modern day Europe.  Northern Europe contains the only countries that have managed their economies well.  And Germany is the only one with the size and infrastructure to help out Greece, Italy, Spain, Portugal, and Ireland out of the messes they have created.  They could teach these companies the effective way to manage a modern economy.  Instead of breaking up the Euro, they could strengthen it by taking a more leading role, just like the US did in the western territories in the 19^th Century.  Times are different now, so I wouldn’t expect Germany to annex Greece and Italy.  The Euro wouldn’t get renamed the new DeutsheMark and the ECB wouldn’t get renamed the Bundesbank.  But slowly and surely these companies would become more and more Germanized for their own benefit.  German manufacturers would take over operations of Italian manufacturers to show them how to do it right.  German banks would take over Greek banks to show them how to do it right.  Perhaps with shareholder agreements that give them controlling interest with preferred shares.  Pretty soon, Germany is running Europe from sea  (Atlantic) to shining sea (Baltic and Caspian).  And given how cash strapped the US is right now, we might look at this with a sigh of relief that the crisis is over.

Possible?    Likely?  Perhaps a good thing – compared to the alternatives?

If its not in the law, you can't prosecute.

I don’t want to talk about the assistant coach at Penn State who committed the heinous crimes.  He deserves the worst that he gets in prison. 

But I was talking to a very knowledgeable attorney about the other people involved.  The ones who saw a crime, told the boss, and considered their job done. Or the bosses who were told of the crime, told their boss, and considered their job done.   Nobody told the police.  And nothing was done.  This attorney agreed with me at the heinousness of the crime.  But he also told me that there is no criminal responsibility to report a crime to the police.    Especially for the bosses who were told about it but didn’t see it personally.  Only doctors, teachers, and cops have to report suspicions of abuse.  There may be an ethical responsibility for the rest of us to report it, and a good reason to fire and take any civil measures against people who don’t.  But as of now, we can’t put them in jail. Another lawyer said it was a state law, so it depends.  Perhaps the one episode in Texas will be different.

This first attorney is hoping that the notoriety of this incident leads to the passing of a law that requires everyone to report particularly heinous crimes like sexual abuse, especially of a minor.  The details will have to be figured out because this is harder than it sounds at first.  How does the layperson know what is a crime (not in this case, but maybe in more grey areas).  We don't want people reporting every possible thing just to cover their asses.  

We can define "reasonable suspicion" and "probably cause" for detectives and judges because we can train them.   But we can't do this for the general public.  So we can’t require just any suspicion to require reporting or that would lead to all kinds of nonsense.  It might only be a direct witnessing of a serious and obvious crime.  Paterno might still get off the criminal hook, but not the guy that actually saw the crime happening.

I know the worst time to make important decisions is in the heat of the moment.  But I hope something is done, and soon, to minimize the chance of this happening again.