Bill's Views!

The CRA, Low Income People, and the Bailout: Results vs. Intentions

bill@falzett.com — Tue, 14 Oct 2008 15:50:00 GMT

An interesting result of all the flash and hoopla about bailout-Mainstreet-Wallstreet is that conservative free-marketeers have decided it's the fault of poor people. Their specious, circular reasoning is that the Community Reinvestment Act (CRA) helped low income people get loans. This led to the banks, mortgage lenders, and various executives making money hand over fist because they got greedy. This led to the markets and politicians also getting greedy. Are you with me so far?

Obviously when people are so tempted and so greedy, they overextend themselves and do stupid stuff. Of course, they would not have done so if we (the people and the government) weren't so concerned about all those low income people and minorities. So, in conclusion, the conservative, free market guy says, "these people (those of low income status) are directly responsible for the glut of foreclosures and the current crisis"-. Do you get it? Good.

OK, let's check out the CRA. It was developed, according to the CRA website, in order to ""-encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulations 12 CFR parts 25, 228, 345, and 563e. The CRA requires that each insured depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities, including mergers and acquisitions. CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS)."-

In 2004, The New York Times, David Chen reported: "Federal banking regulators in the Bush administration are poised to limit the nation's primary law requiring small banks to serve low-income residents in their own neighborhoods through housing investments and development projects."- You see, up to that point, CRA had a good record of managing, evaluating, and controlling lending to low income and minority people.

Chen continued: "Since 1977, the Community Reinvestment Act has required banks with assets of more than $250 million to satisfy stringent tests gauging their banking services to low- and moderate-income residents. Because of that obligation, housing groups say, banks have channeled $1.5 trillion into housing, medical clinics and other projects."- I might add that the record showed that these same borrowers and the lending institutions were exemplars of success with little record of default and foreclosure due to that stringent regulatory process. I want to repeat that last phrase---due to the regulatory process.

So, what you ask was the problem? As Chen reported, the problem was that some banks and lenders were aggravated by the regulations. "Two of the nation's four bank regulators have published formal proposals seeking to reduce the number of banks subject to the law. Under the proposal, only banks with $1 billion in assets would have to comply, meaning that 1,100 smaller banks would be subject to less scrutiny. The thrift office has already put its proposal into effect; the F.D.I.C. is a few months away from acting, although today is the deadline for public comment on the plan."- The other 2 regulatory agencies were inclined to go along and did. These regulators were under the direction of Bush-Cheney and their appointees.

So, fans, the mortgage meltdown was the result of deregulation that let loose the havoc of corporate and individual greed not CRA. In an April, 2008 article from the American Prospect: "University of Michigan's Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans was made by the institutions fully governed by CRA."-

The same article quoted Janet Yellen, president of the San Francisco Federal Reserve, "Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts."- The real conclusion about the CRA and the mortgage meltdown is that laws and regulations did not make lenders engage in predatory lending, absence of oversight and lender greed did.

These people, the banks, the lenders, and the executives are the ones who are directly responsible for the crisis. Next in line are the politicians who are subsidized by these same big money interests who helped do away with responsible regulations and crippled regulatory agencies. All those who believe that the free market will properly regulate itself are the real culprits.

Every person with any sense knows if someone feels that he or she is not answerable to anyone else, that person's behavior gets deviant. This meltdown is such a case--there was and probably will be no consequences for the perpetrators. Equally important for us to remember is the notion that openness to community scrutiny along with fair, just consequences for wrongdoing allows each of us to be and do our best even if it is within the confines of civilization.

Simple Economics: Supply, Demand, and aBailout for the Worker

bill@falzett.com — Tue, 14 Oct 2008 15:46:00 GMT

I've been paying close attention to what the politicians, bankers, brokers, and lenders are doing with our money. I joke with some of my friends about how they must really like owning a major insurance company and so much stock in financial services companies. Obviously, I'm skeptical as to how our taxpayer investments are going to develop. I suspect that the abovementioned folks will do pretty well. The rest of us will continue to do the best we can with what we have while falling behind.

I figured that a basic economics lesson was in order since so much time is being spent by the corporate media and various pundits on the effects of the bailout/rescue on mortgages, brokers, bankers, and lenders. I certainly have a better picture of how these folks are hurting and how scared they and the politicians are. My sympathy for them is limited. What they haven't really talked much about is basic economics and how the economy works. Here is what really makes the economy go.

There is supply and there is demand. Supply requires that goods be produced--in other words, steady or increasing worker productivity. Demand relies on--guess what?--those same folks, workers and their incomes--in other words, their wages. To repeat, supply = overall average production worker productivity; demand = overall average worker wages.

A historical note: In the last 28 years according to federal agencies who monitor this stuff, average worker productivity has consistently increased every year. This is one of the reasons that people can say that the fundamentals of our economy are strong --we're working harder. In that same period, average worker wages have steadily declined or remained flat. The formula is out of kilter. History demonstrates that if you give the money to the folks on top, it stays there and stagnates.

OK, so now we have a situation where worker wages are less ,so they can't buy as much as the producers would like. How do you increase demand to keep up with growing productivity? There are a number of ways. The main one is to raise wages. Lately, what the administrations have done is to get Alan Greenspan and the Fed to make money easier to borrow. Then, political leaders can tell you to go borrow and refinance so you increase what you can buy.

Average wages have stagnated unless you add in the CEOs and Hedge Fund managers. So, people have borrowed and run up credit card debt. First quiz question: How did we get in such a pickle? Right answer: we've borrowed to the max and most of the jobs that remain don't pay well enough. The current mess is a symptom of what happens when you ignore the base of your economy, worker wages. Wages have not kept up with productivity--simple formula. Everything else is an offshoot of that basic equation.

It should be obvious that we need to generate more and better jobs that pay better wages if we really want a prosperous economy. Instead, we are bailing out a small sector of economy that props up the stock markets numbers. This inflates our Gross Domestic Product numbers so that the U. S. economy looks good on paper. This small segment of the economy dictates to the rest of us through our government. Most of us are working harder with less purchasing power because the value of our dollars is declining. That's a different lesson.

I don't want another $300 or $600 stimulus check from the government. I want a prosperous country for as many of us as is possible. When we kids were bugging him, my dad used to say, "Throw "-em a bone."- That's what those checks are. A "bone"- to keep us quiet.

Whoever gets to be the next President and whoever your Representatives are should hear from you. I know that I'm going to be making a lot of noise. Join me. Tell them to put billions into jobs that pay a living wage that are tied to productivity increases. No bones, thank you. I think most of the American people would rather do meaningful work and be paid a fair, living wage than to keep bailing and spending.

The Survivor's Health Checklist

bill@falzett.com — Mon, 13 Oct 2008 00:21:00 GMT

In addition to community activism and lots of opinions about people and politics, I am a psychotherapist. I decided to share a checklist that I have used for many years that is designed to maximize mood and health. It is a combination of supplements, nutrition and behavioral techniques. I hope you find it useful.

I have listed some suggestions that, according to research, are helpful with mood and thinking. Please remember that these are suggestions and not prescriptions since I am not licensed to prescribe in California. Check these with your physician and/or pharmacist to make sure there are no interactions or contraindications. These suggestions are as up to date as I am aware.

_____ Eat every 2-4 hours – you don’t have to eat a lot and it’s important to eat regularly.

_____ Drink more water per day – up to 6-8 glasses

_____ Take a multi-vitamin/mineral daily

_____ Take 200-400mg of B6 and 200-400mcg of B12 daily – Get a B-100 Complex. (check if taking statin meds and if blood pressure is affected.)

_____ Take a minimum of 1000mg of Flaxseed oil(or Flaxseed granules) and 1000mg of Omega3(fish) oil. After a couple of days and you are digesting the 1000mg of fish oil OK, you can increase the fish oil to around 2000mg twice a day. Make sure that you get at least 1000mg of EPA per day (look on the back of the bottle for the amount of EPA per dose) If you decide to take the capsule forms, they usually come in 1000mg and that’s OK. If you have difficulty with gelcaps, get the oil and take that. There are flavored forms of the oil that are easier to digest if that is an issue.

_____ Sing, whistle and hum – it soothes your cingulate gyrus – this brain structure along with others is what leads to crowded/racing/obsessive thinking when it gets stuck. The rhythmic noise calms the brain and gets it unstuck.

_____ Regular physical activity commensurate with your physical state

_____ Relaxation training (see additional info below)

_____ Abdominal breathing exercise Inhale for a count of….4 inhale 5

Hold for a count of…...4 repeat 10 times. -- After 2 weeks go to hold 5 repeat 10 times

Exhale for a count of …8 exhale 10

Do 10 repetitions. If you feel dizzy or light-headed, make sure you are exhaling completely. If the dizziness continues, consult your doctor. Make sure you are seated or lying down the first few time times you do this exercise. Do it as your only activity.If you smoke, do 3, 3, and 6. Make sure that your abdomen moves out as you inhale and in as you exhale. This should give you a good exchange of carbon dioxide and oxygen for better functioning.

_____ Get the South Beach Diet(or something similar such as Nicolas Perricone MD). You do not necessarily have to follow the diet. The books are good references for the types of foods and frequency of eating with emphasis on low glycemic index foods.

If you wish to Supplement your protein intake: get soy protein powder in bulk food section of your store. Mix 2-4 tablespoons of the powder with your favorite liquid, banana, and a small portion of frozen fruit(strawberry or blueberry) or ice.; or try out a mix of your own.

RELAXATION TRAINING

Relaxation training is a method used to teach deep muscle relaxation in order to:

1. help you recognize the difference between tension and relaxation,

2. make your level of relaxation deeper.

3. teach you a method that is refreshing to increase your energy level.

Many people are tenser than is necessary. When you learn to relax, you save energy and enhance your quality of life. You will also find anxieties less troublesome when you are relaxed. Relaxation training readjusts your tension level and enhances your comfort more readily whenever you wish.

THE GOAL IS FOR YOU TO BE ABLE TO RELAX COMPLETELY WITHIN A VERY SHORT PERIOD OF TIME -- from a few seconds to several minutes. Eventually, you will be able to simply use a word or an image to trigger your desired level of relaxation. It may take a few sessions or several weeks for you to achieve your ideal relaxed state. It will depend on how often you use the method, your tension level, and experience with meditation or imagery.

INSTRUCTIONS FOR TENSING AND BREATHING

When you begin the exercises, you will be following the procedure outlined below:

TENSION-BREATHING SEQUENCE

1. I usually suggest that people do this training at night just before sleep. Tense your muscle system(see below) without straining or cramping.

2. Take a full breath and hold it for a count of five while tensing the muscle system,

3. Notice the easy tension in those muscles as you hold your breath for a five count,

4. Exhale slowly and release tension allowing the muscles to return to a relaxed position (You may wish to use your trigger word or image here -- see below),

5. Notice the difference between muscles relaxed and when they were tensed, and do that with each muscle system

6. Repeat each muscle system as needed depending on your level of relaxation. If you have a particular part of your body that you cannot tense comfortably, skip that system.

TRIGGERING RELAXED STATE After you are relaxed(it's usually best to do this after 3 or 4 nights of relaxation training. You should be getting good at relaxing.), decide what word and image you will use to signal your state of relaxed awareness. It can be a word like 'relax', 'calm', 'easy'. The image can be of lying on the beach or sitting in a meadow in the mountains with the feel of the sun on your skin and the sound of the wind or the smells around you or any comfortable, safe place you prefer. In addition to your image and word, as you are fully relaxed, squeeze your first 2 fingers and thumb together for about 3 seconds.

Use your finger pressure, word, and image while you are fully relaxed. Then use them during the day as triggers for relaxation in other settings – home, work, school, different times of the day, different rooms of the house, etc.

To begin the relaxation, sit or lie comfortably, close your eyes, take a full deep breath, and exhale slowly. Notice your muscles as you inhale and exhale.

HANDS & FOREARMS. Make fists and tighten them without excessive strain. Notice feelings as you tighten and hold. Take a deep breath and hold it for a count of five as you notice the tension in your hands and forearms. At the five-count, exhale slowly as you release the tension, remembering the feeling as your muscles relax. Learn that difference between tension and relaxation with each muscle group.

UPPER ARMS(BICEPS). Tighten your biceps as you follow the Sequence.

NECK. Tense your neck muscles by pressing the back of your head against the surface you're on just enough to create an easy tension. Follow the Sequence.

SHOULDERS & UPPER BACK. Shrug your shoulders or press them backward against the surface.

ABDOMEN. Tense your abdominals and follow the sequence.

THIGHS. Press your legs downward without locking your knees and follow the sequence.

LOWER LEGS. Point your toes away from you or rotate your feet with toes toward your head. Repeat the sequence to achieve relaxation.

Now, review your body, see if there is any tension. If you notice some, focus on it and take a full breath, hold it for a five-count, then exhale slowly.

When you are at a maximum feeling of relaxation and comfort, use your word or image. The other thing to do is to squeeze your left thumb and first two fingers together for a count of 3. This finger pressure, the image, the word and the breathing can serve as triggers for relaxation during the day in various settings. During the day, trigger relaxation in various places at various times about 5-6 times. That way, you can relax wherever you are whenever you wish. When people practice at least once a day, they notice an overall improvement in well-being, energy, tension and, if applied to specific fears, a reduction in anxiety.

Representative Democracy, Integrity, and the Bailout

bill@falzett.com — Thu, 02 Oct 2008 17:44:00 GMT

Appeal-Democrat headline says: "Herger supports bailout despite district opposition". The Woodland paper quotes Herger: "the plan needs to include better oversight... and fix flaws in an outdated regulation system". Wally wants it both ways. Wally doesn't really stay tuned into his constituents except for those few privileged subsidy recipients.

What ever happened to being a representative of and for the people. These two quotes show how Herger is obedient to and compliant with the Bush-Cheney administration. He has no sense of the integrity required to stay with his constituents. The Bush-Cheney-Herger economics plan has failed miserably. It failed because of relaxed regulation that encouraged corruption and deviation from solid practices that should be open and aboveboard.

This bailout can be solved in ways that benefit people all over the country by some rather simple, straightforward steps: transparency in the market transactions; equity shares if we do actually give the banks & markets any money; transparent accounting for the above; stock transfer fees that would help Wall Street bail themselves out in addition to curbing market speculation that inflates our costs in all segments of the economy; and restructuring of the faulty loans that would infuse money into the system from the bottom up --- to name but a few.

Many economists say the bailout is a temporary step as currently structured that will lead to more dire consequences. We should all hope that the House stays strong against it. Make some noise about this nonsense to your representatives and senators. They have failed us again with a plan that will see us as slaves to the fat cats if the House goes along with the Senate.

If we insist on Wall Street bailing themselves out of their mess and giving us fair value for our help in assisting then we are stakeholders and shareholders. Surely you free market folks can support this position.

Madness 101: McCain's New Clothes!

bill@falzett.com — Sun, 07 Sep 2008 00:09:00 GMT

You must remember the fairytale called "The Emperor's New Clothes”. We're seeing a modern day version with a twist - John McCain in the role of the leader as a serial dupe.

Take yourself back to 2000. John is running for Republican Presidential nominee. The Rovian/Neo-Con tailors fit him with a suit that has threads that are invisible - that is, they are untrue, mixed with innuendo, and full of push polling. Lo and behold! Enough of the electorate goes into a trance state that they actually see the threads that are supposed to be hanging on John. He loses.

Fast forward to 2008. John, again running for the Republican Presidential nominee, has become the presumptive heir to the Bush legacy. He remembers the invisible, misleading, goofy suit that the Rove/Neo-Con tailors wove in 2000. His wardrobe at this point is that of a war veteran, POW, hardworking, long term Senator from Arizona. A good fit but lackluster and essentially tarnished by too much association with the Bushies. He actually wore those clothes while voting for Neo-Con policies over 90% of the time. Not only are they out of date but they are filthy.

He wants a better wardrobe so he hires the same tailors that fitted him for the defeat suit in 2000. They begin weaving a wardrobe that says "maverick", "reformer", "change agent", and "environmentalist". Anybody with any sense and the ability to see the obvious,obvious knows that this outer part of the wardrobe is totally invisible threads.

Not only that, but the underwear, the policy parts, the foundation garments, are recycled from the Bush administration. He has no clothes on and his undies are holey and belong to someone else. The GOP/Rove/NeoCon/Corporate media, without substance, are left with only spurious attacks on character. The noise machine is flapping, wheezing, and sputtering indignantly in attempts to distract you and me from the real issues -- the Iraq occupation, the economy, the Constitutional losses, corruption, the misleading effects of media, the lack of proper regulation of agencies/big businesses, healthcare, education/training, jobs, appropriate taxation, fair trade, etc. The distractions will likely work for a while until people realize there is no there, there. The scary part goes on while voters are discovering that conservative, purposeful deception. So, hang on, it's going to be a bumpy ride.

The Republican Presidential nominee has no clothes on. If the rest of the story goes like the fairy tale, people will eventually listen to a clear-sighted, brave young man, come to their senses, and run the crooks out of town. In this version, the leader, McCain, should go with them so that we can get some actual rebuilding, refurbishing, and reforms done. Go away McCain. Go to the White House, young man. Your threads are real.

Madness 101: Throwaway People

bill@falzett.com — Tue, 01 Jul 2008 19:42:00 GMT

Scarcity scares people. When we see that there might be a lack of goodies, there is an immediate reaction. We compete aggressively or fade into the woodwork – the old fight-or-flight response. There are some who struggle a bit and give up after that initial energy surge. Others attach themselves to more aggressive folks. Still others gang up and drag down the guys on top. Some simply die.

In certain contexts, competition for scarce resources is appropriate. Sports teams compete aggressively for the “trophy”. The individual athletes compete for fame, more money in their next contracts, and perhaps for the love of the competition. The sports team owners compete for revenue and prestige and who knows what else. That seems like a reasonable kind of competition and there is real scarcity at the top to make it worthwhile.

In other contexts, there is no scarcity. Love, affection, caring, and understanding are arenas of plenty. People can do those without running out or having to compete. Of course, if an individual doesn’t replenish their own supplies, it is difficult to pass out the supplies to others. If people believe that these commodities are limited they set up artificial markets wherein we have to compete with each other for limited supplies.

In still other contexts, there are questions about scarcity. Resources like oil, gas, and coal seem to have a limit. The question is often about when they will run out or how much is left. Land, water, clean air, and other kinds of natural resources are also subject to manipulations of fears. Healthcare, jobs, manufacturing, and other aspects of life often get defined in terms of scarcity also.

For example, many conservative politicians and corporate interests say healthcare is rationed or unresponsive to patients in countries with universal health programs. Research by various groups shows that universal health care does work and quite well. Many of the studies show that the U. S. lags behind in many health care categories. We are no longer number one.

On the other hand, many of us believe that all politicians and corporate bigwigs are “crooks” anyway but we can’t do anything about it. Folks like that dig in and do the best they can while trying to ignore any looming catastrophe.

Whether you see it as good, bad, or are indifferent, the practitioners of the scarcity model in human activity neglect to deal with their basic assumption that there are throwaway people. Throwaway people are unskilled, evil, stupid, careless, or worthless for a variety of reasons according to the greedy. Once you make that assumption – that is, that there are certain people who are not OK – all sorts of greed, avarice, neglect, corruption, or disdain are justified.

Most human responses to scarcity are automatic and don’t involve much real thinking. Most of the “successful” people seem to be adopting a survival-of-the-fittest attitude – “Whatever I do is justified by results.” Since they are successful, they start trying to define what is good or bad for the rest of us. That reality is competitive, cold, and solitary.

At best they show pride in participation in a winter coat drive for the needy or serving Thanksgiving dinner in a rescue mission. They don’t have to question how “those people” came to be there. They already know – these are throwaways, they must have some character flaw. Some of these successful folks may even share with family members and close acquaintances as long as these folks accept paternalistic direction and restrictions. At worst, their care-less behaviors cause great harm and even death.

Are there throwaways? If you support corporate health insurance, your basic belief is that there are. If you support universal healthcare, you see that people are OK and deserve consideration no matter their circumstance. There are no throwaways. If it turns out that there are some areas of scarcity, we marshal our resources and fix them. We have the resources, energy, and creativity for all people.

Thoughts on Corporatism/Fascism

bill@falzett.com — Fri, 06 Jun 2008 19:56:00 GMT

Here are some collected thoughts on the state of things today. I hope you use these in your talking points to people. Remember that in spite of what the conservative radicals might say, the results contradict their words. Look at results not intent.

Thanks to Tom Feeley of Information Clearing House for these quotations:

"Fascism should more appropriately be called Corporatism because it is a merger of State and corporate power." : Benito Mussolini

We're not a democracy. It's a terrible misunderstanding and a slander to the idea of democracy to call us that. In reality, we're a plutocracy: a government by the wealthy." : Ramsey Clark, former U.S. Attorney General

"Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy" : John Pierpont Morgan

"I hope we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country." : Thomas Jefferson

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." : Abraham Lincoln
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson." : Franklin D. Roosevelt

Thanks to Howard Zinn for these:

The UN Universal Declaration of Human Rights (to which Eleanor Roosevelt was a contributor) declared that decent wages, food, housing, health care, and education are the right of all people.

"Capitalism has always been a failure for thelower classes. It is now beginning to fail for the middle classes" This is due to the great accumulation of wealth in the top 1-5 percent of the population. (my note)

Madness 101: Liberal, Conservative, Neo-Liberal Economics?

bill@falzett.com — Mon, 19 May 2008 23:53:00 GMT

Wow! What’s the deal? Talk about crazy-making. Take a look at Milton Friedman, Naomi Klein, Ravi Batra, Ha-Joon Chang, and all the media pundits who supposedly know economics. Friedman was quoted as saying, “Look at results not intention.” Evidently, that was a rule for others and not for him. I am going to explain economics in a clear and not necessarily all encompassing way. My emphasis is on what really happens

If you look at the results of Neo-Liberal economics – Friedman’s baby – the track record for the masses is lousy. Lots of dictators and their handymen got quite rich. The policies called for liberalization of trade (i.e., no tariffs, free movement of money from outside the country, low or no taxation of business, slow down & cripple unions), deregulation, and low wages.

Now, the United States and most, if not all, of the currently successful economies relied on governmental regulation, tariffs to protect fledgling industries, state support of favored industries, and fair wages tied to productivity. These factors were deemed necessary for the economy to grow and for prosperity to encompass most of us.

In other words, not trickle down but boom upward. The basic notion was that a prosperous working population would fuel demand and increase productivity. The U. S. middle class was the greatest economic engine in history. As the economy reached points where it could grow on its own, supports could be withdrawn for some industries and focused on development of newer technologies. Eminently sensible wouldn’t you say?

Eminently successful also – look at Korea, Japan, the U. S. prior to 1980 to name a few. Since 1980, free market folks have sold much of the U. S. on the ideas of supply side economics. The problem is that in terms of results, the numbers for most of us are terrible and the rich get richer.

Productivity, a supply item, has increased steadily since the ‘80s. In other words, our workforce is more productive. Wonderful. Wages, a demand item, have stagnated and even declined in real terms. When that happens, supply outstrips demand and that is not good. So, the Fed and big businesses encourage borrowing, a demand item. When you and I borrow, we can buy more of the excess supply.

Borrowing increases and we keep creating debt. Where does all the money that we borrowed go? It goes into the pockets of the guys and gals that own the supply. In fact, today, they have so much money that they just don’t know what to do with it. They don’t increase wages for the working folks but they do for the CEOs. Those folks also don’t know what to do with all that money, so they create hedge funds and they speculate in commodities markets like oil, gas, corn, etc with much of that money.

Speculation drives up prices. Prices of oil, gas, corn, rice, etc. The Fed lowers interest rates so we can borrow more. The loans are bundled to use as another commodity. We now have amassed tremendous individual and government debt. Foreign countries own us, the dollar is worth less, we don’t have jobs, our wages are still stagnating.

So, there you have it. A rather over-simplified version of conservative, neo-liberal, free market economics. While it may not be precise, it is clear. The shorter version is: Support your Local Capitalist. Do you really believe that all corporate managers and CEOs are trustworthy? Is anyone really trustworthy when they have no accountability, no requirements for transparency, or need to be responsive to authority? Ha-Joon Chang, Naomi Klein, and Ravi Batra can give you more details about what really happens with so-called free markets.

Traditional economics is knowledgeable and respectful of the constraints of supply and demand in addition to an awareness of the problems inherent in unbridled human activity. Even Adam Smith extolled compassion and empathy.

Madness 101: Responsibility, Liability & Self Fulfilling Prophesy

bill@falzett.com — Tue, 06 May 2008 17:19:00 GMT

The original context for responsibility was in politics. John Stuart Mill and Max Weber, two able philosophers, both recognized the importance of responsibility in representative democracies. Both stressed attention to people, situations, and consequences. What they really emphasized was responsiveness to and by the people as is supposed to happen in a democracy.

Liability today is usually the focus in what used to be called the personnel or human resources department. Emphasis is on “risk management”. Instead of resources or personnel, employees are risks to be managed and minimized. Instead of customers or clients, the people who use products or services are potential lawsuits that have to be avoided or finessed. We have created “limited liability” partnerships and corporations to protect ourselves from each other.

According to many economists, the United States has moved to a service economy from what used to be a mixed industrial/service economy. The irony, the contradiction, in that so-called move is that “service sucks.” Complaints about the quality of service and the durability of products in businesses dominate the small talk around the water coolers and the coffee shops.

Since the advent of risk management, have we moved from service to dire predictions that often come true. How much can you really “manage” risk without creating the environment for that risk. To answer those questions, consider that risk management is considered “preemptive.” In other words, you anticipate what could happen, then have a plan. A further step in corporate management is “business continuity planning”.

Business continuity planning (BCP) goes that extra mile – it assumes that whatever awful could happen, eventually will happen. The necessity to have BCP in place arises because even very unlikely events will occur if given enough time. Good grief! No wonder we have such trouble getting along with each other.

When we continue on the basic idea of BCP, we are programming the future. We end up accomplishing a dire future. Studies show that when you treat others in a particular way you will get what you expect. In behavioral terms, the equation is: description equals prescription. If you keep describing a person in a particular way, you are also telling that person how to act. Add it all up. What we keep doing is anticipating risk and getting catastrophe.

I know, I know. This view isn’t pragmatic; it is not sensible; it’s Utopian. I believe that the folks who spend so much time anticipating disaster or who are grousing about how responsibility and service are secondary to risk management live in a Dootopia. They believe that things will get excrementally worse. In other words, they practice self fulfilling prophecy.

Competence assumes each of us will -- with proper training, experience, and empathy while working cooperatively with mutual respect – do the right thing and do it well. If you fear, disrespect others, worry excessively, your energies are channeled into internal processes that detract from paying attention to the external obvious – every situation has 3 parts: you, other people, and the context. You are able to take care of and educate yourself in order to be the best you can. You don’t get to be in charge of the other two. You can understand, cooperate, and know that you are competent to deal with life in concert with your allies, friends, and family. People often get what they have planned for and anticipated. Plan to be responsible and responsive. Anticipate success.

Pootopia: the Utopia where things got excrementally worse -- An Adult Fairy Tale

bill@falzett.com — Sun, 02 Mar 2008 04:39:00 GMT

Once upon a time about 230 years ago, there was a country made up of many diverse tribes, clans, groups, and individuals. They were ruled by a king that lived very far away. This king didn’t seem to care about these many peoples in this land so far away. Whether he did or not, his advisers were businessmen and royalty to whom caring was secondary to acquisition. They saw this faraway land as a place for them to get many goodies that would make them even more rich and powerful. The people of the faraway land didn’t know the king or his advisers. They did know that they were paying a lot of money to them. They didn’t mind because there was so much land, opportunity, and wealth that there was plenty for all.

But, over time the king’s group started demanding more and making the faraway land’s people into a slave class. Well, that certainly wasn’t what these diverse peoples wanted for themselves and their families. So they got together and asked the king to be more reasonable and fair. The king, with the advice of the royalty and the businessmen said, “No way”.

The people of the faraway land decided to have some of their wisest people get together and discuss forming their own country with their own king who would listen to them and be fair. Well, sure enough, the wise people gathered and they talked and argued and shared many ideas. They finally declared independence from the king and there was war. Some of the diverse people disagreed with the idea of fighting the king. There were a lot of upset folks.

The war was long and difficult but the people of the faraway land won. Then they had the problems of who would be king and how would everyone decide how to do things. Who would build the roads? Who would be in charge of making laws so that everyone would know what behavior was okay and what was not? Who would be the ones to enforce the rules?

Everyone was clear that when a lot of people get together there are lots of different ways to think and act. They also knew that if there weren’t some rules, then there would be problems. Some people would do whatever they wanted to because they would say they were free to do so. Others would not do some things because they would believe they had the right to do so or not. Still others would demand that everyone act the same and almost everybody knows that won’t work.

So, right off from the start, the faraway people were stuck. Someone suggested getting the wise people together again. That seemed a good idea. So, the wise people got together and finally came up with a document that defined some rules to live by that all the diverse peoples could accept. They decided to have a leader instead of a king, representatives who talked to the people and gave guidance to the leader, and judges who helped decide on things when people disagreed. Some did not agree with all the rules and others had differing points of views about the rules but they pretty much agreed to go along and get along.

The people wanted a new name for their land. They felt that there were resources and land for all. They had decided that all people were created equal and had the right to life, liberty, and the pursuit of happiness. They felt that this new land and its many different peoples had much talent, wisdom, understanding, and care enough for all. They believed that when people get together and do things as a group of free individuals—free to say and think what they will – that any situation can be fixed and that such a people would surely flourish.

Because they believed in this new country of so much, they took to calling it – Utopia, the land of positive incremental changes. Since there were plenty of opportunities and lots of land, there were no great problems for a while. (I should probably add here that the Utopians took advantages in many ways of native peoples that already inhabited these new lands. That’s a subject for another story and it should be told because the Utopians made the same mistakes again in different situations in the next 200 years.)

Well, because there was rapid growth and fantastic opportunity, the people flourished. There were some, however, who were worried – Would there be enough land, resources, money? They worried so much that they scared themselves and others. Because they were scared of these dire possibilities they started hoarding and trying to control things. I’m sure that you can see the connection here to self-fulfilling prophecy. They believed in scarcity so much that they created it. They even took to calling themselves Pootopians – they believed that whatever bad can happen, will happen, so we better get ready. Pootopians believed that things would get excrementally worse.

The pootopians kept hoarding, collecting, controlling, and worrying. The more of that they did the more conditions worsened. At various times in the next 150 years or so, various Utopians banded together and were able to break up some of the hoarding by influencing the government to protect the rest of the people from the pootopians. Many of these efforts were successful. Still, the pootopians managed to learn how to control parts of the government. They influenced the passage of new laws that enabled some to take advantage of others without it being generally known. These seemed non-threatening to many people at first.

In the meantime, people went back to achieving their own brands of prosperity. New groups of people joined the Utopians because they not only saw opportunity but a country where the highest principles and ideals were valued. (I must again add here that even though the ideals were valued they were not always practiced. This subject is probably for another story too and it should also be told.)

Fortunately the ideals were practiced often enough to assure people of the Utopians friendliness and integrity. It was clear to many that improvement still could be had in many areas because they believed in positive incremental changes. There came a time in Utopia when the pootopians started questioning the rights of others to voice their opinions. They would accuse some people of disloyalty. Many people were hurt by these accusations and others feared for their own rights and the future of Utopian.

There were, however, journalists and writers who challenged the pootopians. They reminded the people of Utopia of their commitment to their ideals and the people remembered and revolted – peacefully but firmly. The pootopians were temporarily silenced.

About 10 years later, the Utopians went to war against a group they said was invading the more peaceful part of their own country. In other words they tried to help in a family fight rather than starting peace talks. Well, the pootopians came out in full force. They were in favor of this war. It made them feel safe even though the people in the other country didn’t want them to be there. The Utopians, or at least part of them, objected and caused great unrest in the country. They felt that people should treat others with respect and talk rather than fight. These rad Utopians believed in the effectiveness of the group wisdom, caring, respect, and love. Commonsense told them that if people really cared they would find ways to reach agreement.

The pootopians kept saying that the bad guys were evil and didn’t care. Because of that the pootopians got even more upset. They also got scared of the rads. The rads were mostly young, they let their hair grow long, and they dressed in many colors. They were led by the Hip Woman. She told them that there was no scarcity of resources and love. She told them that they could bring about positive change by remembering that and that people have rights and responsibilities. She told them to be firm and to use their energies together and they would be rewarded with peace.

The pootopians had gotten control of parts of government and were saying that the young people were bad guys too. They questioned the patriotism of the young people. They even managed to call out the Utopian Guard to shoot some of the young people. But the young people did not give up. They managed to get the government to stop the war after many deaths and much destruction. The pootopians went underground and since they weren’t very good at thinking, formed what were called “think tanks”. (They formed about 400 of them so you would think they would get good at money management and playing well with others.)

The pootopian “think tanks” got lots of money from big business and power grabbers -- these were the most worried of all the pootopians. People weren’t really sure about why the pootopians were so worried and scared. Some thought it was because they weren’t treated right as children. Others thought it was because they were just naturally greedy. (I suspect it’s because they believed what they said and didn’t really look at what was happening.)

The pootopians still couldn’t see that getting together with the wisest representatives of all the people was the best way to solve problems. Instead they started using their money and power to get the wisest representatives defeated in elections by what they called “our yes men and women”. (Most of us know that if people only tell you what you want to hear, you’re going to get stranger.)

At this same time, the pootopians also started buying all the news outlets and replacing the real journalists with more “yes men and women” mouthpieces. These folks tended to be a lot prettier than the old journalists. Even though some of them may have been trying to be journalists, they were limited by their bosses in what they could say and do. Some of the new journalists were really scared pootopians.

One of those new journalists was a radio host guy who was overweight and loud. He was so loud that he eventually got hearing problems but some people think it was because he took too much medication. Another one was a TV guy who railed and railed so much in such a way that was silly but he got paid a lot. These guys and others like them kept saying the same stuff over and over again. They did that because pootopians believed it was the way to convince people. In other words, to them the truth happens if you say things loudly and over and over again and again.

There were three other ways to convince or educate people, as far as the pootopians were concerned. One was to scare them, another was to give them only two choices, and the other was to silence discussion. Now, every one with any sense knew that there were very few situations in life that have only two choices. Two choices almost always led to more conflicts. That’s why when the original faraway people decided to have their own country they had a whole bunch of wise people get together. That’s why the wise people had elections where more than two people voted. They knew that you could have some situations where there were only two choices and it was why you should have lots of discussions and lots of people involved. When you did that, conflicts were settled even though it sometimes took a while.

About the same time that the news people were changing, Utopia got a new leader that was a pootopian. He seemed a nice man and most folks saw him as a kindly “uncle” type of person. He ran up huge credit card bills and let the other pootopians have their way with the money and resources of Utopia. Bankers and big businessmen took over running the country. Strangely, even with bankers and businessmen running the country, most Utopians were getting poorer. The “uncle” guy finally left and another Utopian took over as leader. He was good for most of the people in many areas of life but he had to put up with a lot of pootopian advisers and leaders. Sure enough, things kept getting excrementally worse.

The Utopian leaders, because they were mostly pootopians, passed lots of new rules that led to businesses going to other countries. The companies wanted to go for cheaper labor and government benefits. When they went, they were allowed to stop paying for their part of the maintenance of Utopia. Certain companies were allowed to get extra help from the government. Some Utopians called this welfare but the pootopians said it was an “investment”. The businesses would provide jobs and the money would trickle down to the people. That didn’t happen and things got excrementally worse. There were lots of other things like that going on and people got really discouraged. It seemed to them that nothing they could do would make any difference.

You remember self-fulfilling prophesy? – you predict or decide something and then act in ways that make it happen. Well, that’s what happened to the Utopians. They were despairing and frustrated and they felt that it didn’t matter who their leaders were. The ones who voted just voted for whoever was there. The ones who were there were financially supported by pootopians so things got excrementally worse for the people.

And just when you thought things couldn’t get worse, the pootopians engineered the election of a radical pootopian. This leader was totally scared. He believed that evil was everywhere. He also believed that he had a direct line to the Supreme Being and that he knew what was best for everyone.

This leader wanted everyone to think and act the same – his way. He listened only to the more radical pootopians. Of course they were also the most scared ones. They were inconsolable. No one could convince them that the world was not as scary as they believed it to be. They did not seem to know that if you were competent and connected with other competent people, you could solve problems. They refused to honor commitments to other countries and they began to bully people. They offered one choice which when you think about it isn’t a choice. Do it this way or else you are un-Utopian and a traitor. Things got really quite worse excrement-wise.

About this time, evidently many Utopians were upset enough to consider voting. Many of them started showing up to cast their votes for favorites who were real Utopians. In fact, there were so many Utopians leaders and voters showing up that people were confused. Who should I vote for? Which of them will do the best job?

Other Utopians were so excited about the possibilities that things could go back to positive incremental changes. Still others had grown so disillusioned that they suspected a trick. They believed that one or more of the Utopians running for leader was a secret pootopian. Who can blame them? So many leaders and representatives had turned out that way before. Many of the past leaders had abandoned the people and the ideals of the original wise representatives. Who could they trust?

It finally came down to 3 choices. There was a woman who was smart, able, and sincere. She encouraged people because she was tough and experienced. There was a relatively young man who reminded people of the Hip Woman’s philosophy. People liked him because he spoke of hope and everyone knows that hope is central to humans. The third was the closest to the pootopians. He favored strength, war, big business but he was also respected for his courage. In the past he had been the voice of dissent in the pootopian faction. Still, many worried that he had abandoned the people to make more pootopians like him.

So, the question is yet to be answered. Which of these leaders will win? Or is that the real question? Isn’t the real question about the people of Utopia? What values and ideals do they want to believe in? Have they become so cynical and discouraged that they only care about toys and entertainment? Or, will they finally take up the ideals that the original wise representatives agreed on? Do the Utopians believe in cooperation, understanding, justice, liberty, and the pursuit of happiness? Do the Utopians believe that people of good will can band together and accomplish great things? Or: Do the Utopians believe that no matter what you do, “things will get excrementally worse so you better get yours while you can”?

It doesn’t seem like such a tough choice, unless you’re scared. Are you scared?