Rick's Blog

2011-12-07T21:08:00.001-07:00

[This is an online post that I made on December 7, 2011 to the environmental economics class that I teach online at Front Range Community College, in our General Discussion forum, where I post things to keep up my students' interest, outside of the required material. It is a sort of end-of-year sendoff note, meant to encourage my students that what they learned in this introductory course still contains powerful ideas that are currently completely absent from mainstream economics courses, such as those thought by Dr Mankiw....]Hello class,Here is another article that I thought would be of interest, if you have the time....It is from last Sunday's New York Times editorial pages (Dec 4, 2011), where Prof Gregory Mankiw (pronounced man-queue), who's a frequent contributor, wrote an artilce titles "Know What You're Protesting." In it, he talks about how some of his students (5-10%) recently staged a walkout on his class, Economics 10, in sympathy with the Occupy movement, because of “the biased nature of Economics 10 contributes to and symbolizes the increasing economic inequality in America.”Now I'm sure Prof Mankiw is an intelligent, educated, thoughtful person; and the fact that he's taught at Harvard for the last twenty-five years makes him an "authority." But In the rest of the article, Professor Mankiw also makes clear that he is unaware of why economics is so unbalanced; and I suspect he has never heard about "material throughput" and why the concept demonstrates how out of balance mainstream economics is. To me, it shows how out of touch he is with environmental reality (and, from the tone of his article, how out of touch he is with sympathizers of the Occupy movement.)So I just wanted to let you know that you know something that Prof Mankiw does not: what material throughput* in the economy is, how it is completely lacking from mainstream economic thought, and why it is so very necessary for economics to begin to consider.Regards, --Rick* to learn about what I'm referring to, material throughput, you can view my slides class slides about the Neoclassical Economic Model and the Environment.

2011-11-12T20:21:00.001-07:00

[This is a comment that I made on a guest commentary in the Boulder Daily Camera newspaper on Nov 6, 2011, titled "The Occupy movement and Prop. 103", which would have increased sales taxes slightly over the next few years in Colorado to help make up the budget shortfall in funds for public education, but which was defeated 2-1 in the Nov 1 election. I thought the author's analysis rather missed the point, and felt compelled to write this in response.]

The entire point of this well deserved commentary is contained in the sentence: "The defeat of Proposition 103 should serve as a clarion call for all of us who believe we need more robust public institutions for our democracy to survive." I agree; but the author's argument contains some serious flaws, resulting in an incorrect analysis of what's wrong.

We already have several institutions whose explicit purpose is supposedly to protect our democracy: namely, the US Congress, the US Supreme Court and the Executive branch, all of which are based on the US Constitution and its 29 amendments. How good a job are they doing at protecting democracy?

Well, after the 2010 Citizens United decision by the Supreme Court, which allows corporations to spend unlimited amounts of money in political campaigns, based on alleged corporations' constitutional First Amendment rights, I'd say the SCOTUS is not defending democracy at all; rather, it has sealed its fate, and doomed our country to corporate rule -- until this dastardly decision is reversed by a constitutional amendment. This decision was a decisive, though far from the only, factor that helped ignite the Occupy movement.

How well is the legislative branch doing at looking out for the peoples' interests and protecting democracy? With over 40 plus lobbyists per legislator -- which are overwhelmingly representing large corporate interests, though there is a sprinkling of consumer and progressive lobbyists in there too -- I think we all realize that, by and large, the Congress has been looking out more for the interests of the corporate elite than the common people, with a few notable exceptions such as Bernie Sanders and Dennis Kucinich.

And that leaves us with the executive branch; how well has it looked out for the interests of democracy? Well, the jury's still out on that. Mr Obama has a mixed record here, but I'd say he could have done more by now if he weren't blocked at every turn by an utterly dysfunctional Congress controlled by the Republican party that is locked in ideological straitjackets, and cannot seem to do what politicians are supposed to do: compromise, negotiate agreements and get things done.

So what is the underlying theme here? It is corporate influence and economic power in nearly every sphere of our economy, culture and politics. And this is what this commentary so glaringly left out: the decisive vote by the people of Boulder on referendum 2H on corporate personhood. On Nov 1, the democratic republic of Boulder voted nearly 3 to 1 (74%) saying that they are in favor of a constitutional amendment that states that corporations are not entitled to constitutional rights, and that money is not speech, which would reverse Citizens United.

For this is what the Occupy movement is really about: not the need for more "robust democratic institutions" (try telling that to a General Assembly!), but the reclaiming of our public institutions from corporate influence. The only way this will happen will be taking away the secret to corporate power, which is their fictitious claim to constitutional rights. Corporations have been using this legal fiction for 125 years, which was established in a seminal 1886 Supreme Court decision, setting a precedent that is an insult to our democratic processes, as it was slipped into the headnotes, not into the body, of the case, and is therefore is not even technically part of the law. (See Thom Hartmann's "Unequal Protection" for an authoritative examination of this critical part of American legal history.)

Corporations have gradually but continually expanded their claim to constitutional rights on the basis that they are "corporate persons" -- which is a legal fiction and a moral outrage -- for the past 125 years. They have used this to slowly but effectively erode, weaken or outright defeat the statutory laws and regulations that were created to reign in their behavior in defense of the public good. This steady campaign that what's good for corporations is good for the economy (another lie; it only helps the corporate elite at the top) has been their conscious strategy to use these constitutional rights to trump statutory laws for the past 125 years. And it has only been accomplished through US Supreme Court decisions -- never have these issues been allowed to be voted on by the American people, anytime, anywhere.

But now there's a movement against this, and it's called Move To Amend (see movetoamend.org), which is dedicated to passing the constitutional amendment I mentioned above. I helped start the Boulder chapter of Move To Amend in the summer of 2010, and it has now culminated in Boulder's vote on referendum 2H, thanks to a broad consortium of progressive groups who carried out the highly successful Yes On 2H campaign. It was a prime example of swift democracy in action, and will remain one of the most rewarding moments of my life.

I don't know how the author Mr. Meens voted on 2H, but since he was in favor of 2B and 2C, I would hope he was similarly in favor of it, and am rather puzzled that he did not mention it in his otherwise well intended commentary, for the above reasons.

Whence OWS? Repeal Corporate Personhood!

2011-10-12T18:55:00.002-06:00

[This was a comment I posted at slashdot.org today (October 12, 2011) in response to a solicitation about what people thought about the Occupy Wall Street movement. As you can see, I have some pretty strong views on the matter, which I believe are well supported by history! --Rick]

I have not read all of the many interesting comments here, but a text search tells me that no one has yet mentioned the issue of corporate personhood; but it deserves mention, because it is the Achilles heel in the legal armor that corporations have used to rise to prominence in our economy -- and deserves to become a more prominent part of the hue and cry at OWS events. (I've seen it as part of their demands, but not very prominently.)

This singular fact is well known to some in the progressive activist community -- Thom Hartmann, Amy Goodman, Dennis Kucinich, Chris Hedges, Van Jones, to name a few -- but not to the mainstream media, much less the American public. The main activity center trying to raise awareness about it is the Move To Amend group (see movetoamend.org). They sprang into existence in Feb 2010, the month after the disastrous Citizens United decision, but it has some deep activist roots behind it, in their main spokesman, David Cobb. Their goal is to grow a nationwide, grassroots campaign to get towns, then cities, then states to begin passing referendums that state, to the effect, that they agree a US Constitutional amendment should be passed that says (1) money is not speech, and (2) that corporations are not entitled to constitutional rights. This is the only way to reverse Citizens United (as the justices are unlikely to reverse it themselves, though it was a close 5-to-4 decision.) Once hundreds of communities have passed such a referendum, it can become a state level issue, then a national one. They acknowledge the path to adopting a Constitutional amendment will be a long and difficult one; the last attempt to do so in this country, the Equal Rights Amendment for women (ERA) was a long, hard fought battle that came within a whisker of passing, but ended in bitter defeat, after a ten year effort. (Some say it deserves another shot, and I would agree.)

Now comes the OWS phenomena, catching on like a prairie grassfire, ignited by a common awareness of the injustice of our economic system. But I cannot see how it will amount to anything unless it results in effective political action. The legal and financial fortresses of the corporate giants are strong, unlikely to be taken by frontal assault. Indeed, American history is replete with examples of where the state crushed violent protest with even more violent suppression, whenever private property was threatened (see Howard Zinn's excellent book, A People's History of the United States, for abundant examples of this.). No, this will require a smart fight, an intelligent fight; and like any good fighter, you should possess a knowledge of your opponent's strengths and weaknesses.

Corporate personhood is this weakness -- and it may be the only weakness that can be really used; corporations have been building up their financial, legal and political defenses for quite some time. It is through the claiming of constitutional rights since the post-Civil War era (read Thom Hartmann's book Unequal Protection) that corporations have steadily built up their legal case to weaken, if not defeat, the controls imposed on them through statutory laws and regulations. My own hope is that some of the energy swelling up behind the OWS movement will gain this awareness -- and help to shorten the path to such a constitutional amendment.

A path to restructuring the financial industry: State Banks

2011-09-01T00:00:00.001-06:00

[For those not aware, the steady deregulation of the financial industry since the 1980's basically gave the big banks and associated industries (insurance, credit rating, etc) the freedom to do whatever the hell they want, which pushed us back into the situation of the 1920's, where there was zero regulation of anything financial -- ie, recreating conditions that led to the Great Crash of 1929 due to a huge asset bubble (that time in stock prices, this time in housing prices), and inducing the Great Depression...which we only narrowly averted reenacting in 2008, and are still experiencing. A big area of interest in how to restructure the financial industry landscape is state banks, in which we have a living, breathing example in North Dakota. A great article was recently published on this very topic, and I have taken the liberty of reproducing the key excerpts from it...which I hope convey its vital essential message that this is a HUGELY GOOD IDEA to put our support behind. --Rick]

These are excerpts from How State Banks Bring the Money Home by Stacy Mitchell, appearing in Yes! magazine (link to article to appear soon! until then, here are my excerpts that show why this is such a compelling article):

How State Banks Bring the Money Home

by Stacy Mitchell

...[t]he rapid and dramatic consolidation of the banking industry over the last decade...has hindered the US economy's ability to create jobs.

...[t]he nation's 6,900 small, locally owned, community banks...control $1.4 trillion in assets...[t]hat's 11 percent of all bank assets.

...[f]our giant banks -- JP Morgan Chase, Bank of America, Citibank and Wells Fargo -- now command $5.4 trillion in assets, or 40 percent of the total.

Why do giant banks make so few small-business loans? Automation is the short answer....

Small-business loans are not so easily mechanized. Each is a custom job, requiring human judgement to evaluate...

Our financial system is top-heavy with big banks that are scaled to meet the needs of large multinational corporations....US-based multinationals have eliminated 3 million American jobs over the last decade.

In short, we have a financial system that is mismatched to the economic needs of American communities.

...one of the most promising strategies involves creating state-owed banks that can bolster the lending capacity of local banks...

North Dakota is the only state, so far, that has a publicly owned bank. Founded in 1919, the Bank of North Dakota (BND) was a populist response to dynamics similar to those we face today...

BND is wholly owned by the state which deposits all of its money, except pension funds, with the bank...

Thanks largely to BND, North Dakota has a more robust community banking network than any other state....

Small banks account for 60 percent of deposits in North Dakota, compared to only 16 percent nationally...

...BND has pumped $300 million in profit [Emphasis mine. --rick] into the state's general fund over the last decade. (In a state like Illinois that has a population of 13 million, the equivalent return would be about $6 billion.)

Inspired by the North Dakota model, activists and small-business owners in more than a dozen states, including Oregon, Maine, Massachusetts, Montana and Washington, backed bills this year to create state-owned banks. ...

...the Center for State Innovation has produced several reports analyzing how a public bank would function in various states....

...the real power of a state bank lies not so much in its own lending, but rather in its capacity to support local banks and remake the financial landscape to better meet the needs of small businesses and communities.

On raising awareness...

2011-08-27T19:36:00.005-06:00

[This was a reply I made on August 27, 2011 to a question poised on the steadystaters@googlegroups.com listserv. It mainly points out how raising awareness among the general public is the underlying action that needs to happen -- which can be thought of a lifelong service to a noble goal.]

Sharon,

To reply to your questions, please see my responses below:

is there something else that needs to happen besides abolishing the right of corporations to be treated as 'people'?

I think what needs to happen is raising awareness and education among the general public which amounts to consciousness raising about the issue of corporate personhood and why we must change it. This will not happen quickly, but there are literally hundreds of thousands of activist organizations all over the world working hard on this goal. Have you heard of Bioneers and wiserearth.org, started by Paul Hawken? They are certainly in the vanguard but unfortunately the mainstream media does not quite "get it" yet how serious these issues are, and needs to prodded into covering these issues. So, this is why I'm trying to do my part by volunteering as much as I can to help.

But accomplishing a US Constitutional amendment that abolishes the constitutional rights of corporations will require a huge effort; the last time this was attempted in this country was the Equal Rights Amendment for women. It was a long and exhausting struggle, which came very close to passage, but ultimately failed. The time may come where it will be attempted again for them -- which I think could only help the Move To Amend struggle. Please see movetoamend.org for more background on why this goal is necessary.

Some of the more inspirational authors who have influenced me of the need to engage in this consciousness raising comes from David Korten's The Great Turning and Riane Eisler's The Chalice and the Blade. They are powerful visionaries, who have faith that it is not human nature to want to destroy ourselves, and point out with abundant and persuasive evidence in their excellent and extensive research.

was there anything in that little deal that spoke of the *responsibilities* of corporations (aside from obeying legal requirements)?

Nope. Appealing to the moral sensibility of corporations is not a strategy that activists who have long been engaged in this struggle would recommend, to put it politely. There are numerous documentaries out there that testify to the psychopathic behavior that large corporations exhibit and cultivate, both as institutions and in the individuals that lead them; one recent one I'd recommend is Inside Job. Certainly, there are outstanding examples of corporations that do do great good because they are headed by individuals with a conscience and a heart, such as Patagonia's Yvon Chouinard; but unfortunately they too small a minority at the moment.

So, raising the political awareness and call to action to curb corporate behavior, and the standard of leadership to, yes, have respect for the environment and communities, goes hand in hand with this awareness raising -- including reforming the teaching of economics and how the profession practices its "faith" as well. That is my particular area of interest. The carrot may be to appeal to their sense of responsibility, which really has more value as a political plank, but to expect a real response the real effort must be in the stick -- or cudgel, is how I like to think about it -- of legal and political change, which is the only force that the corporate elite will really respond to -- and certainly not willingly.

Sincerely,
Rick Casey
Boulder, CO

Ecological economists must become activists!

2011-08-26T14:51:00.002-06:00

[Another post to the steadystaters@google.com listserv....on August 26, 2011]

I fully agree with Sharon of Australia. What she makes clear is that all of us are facing the same economic, environmental and political problem. But this political aspect is what I saw missing from Sharon's compassionate description of what needs to happen to improve our economic and environmental situation -- but which is critical to acknowledge within the steady state community. From my viewpoint, the economic and environmental situation will never change until the political perception changes to the point where we begin to pass legislation that supports the environment and supports an economy based on people, and not corporations. And it is this struggle between the rights of people and the rights of corporations which will become more and more clear, as our problems intensify, and the causes of them become more and more obvious.

This will require changing the stated public purpose of the institutions that underlie global capitalism: to support an economy that serves people, community and the environment, not an economy that is based on a power elite at the top, which seeks only to deregulate everything to keep profits up for the largest banks and the dominant multi-nationals, many of which are deeply tied either to biggest financial corporations, to the military-industrial complex that supports the American global Empire or to the giant corporations that dominate the energy (fossil fuel and nuclear) and extraction industries, the current economic base.

The political problem is based on the current incorrect paradigm -- or popular perception -- about why the economy exists. The popular perception about why the economy exists has been a mantra drummed into the public consciousness which is based solely on money and profits and jobs, and that There Is No Alternative -- or TINA -- an acronym introduced my Magaret Thatcher, I believe.

We all know this is an insufficient framework, which is based on the efficiency principle alone. For a complete solution, we students of ecological economics know that it needs to based on three principles of scale and distribution as well as efficiency. There is so much good analysis out there as to why the current paradigm is so broken, and how a new wholistic view of the economy must change the paradigm, that I do not need to go into that here.

This is why I am supporting the Move To Amend campaign in the US, and encourage you all to do so too, which would strip corporations of their US Constitutional rights, which is the key reason why they have become so powerful and so big. It is also a legal fiction that should never have been allowed to exist in the first place. So I repeat: ecological economists must become activists!

Rick Casey
Boulder, CO

Economists need to become activists

2011-08-22T11:06:00.005-06:00

[This is a post I made to a listserv dedicated to ecological economics, sometimes referred to as steady state economics. I sidestep the ideological discussions that the question below could devolve into, and point that if ecological economists are sincere about the change they say they seek, they must get involved political process...otherwise their contributions are merely "academic", i.e. without effect in the so-called 'real world.']

On Sun, Aug 7, 2011 at 10:43 PM, cruxcatalyst (sharon) wrote:

Here's a curly question for the economists among us with more
expertise than myself: how can a capitalist world model exist
(theoretically and practically) without an ever expanding world
population?

Cheers
Sharon

To answer, such questions, I agree that it is wise to avoid ideology. My following comments are based solely on the practical recent lessons of why we are experiencing the current recession, and the direction we surely need to head in our economic policies, where I believe ecological economics has much to contribute. I have become convinced that if ecological economists want to be heard, the field will need to become more politically active; this is not an ideological question, but one of practical reality.

I see no conflict between the principles of ecological economics and capitalism, as far as I have come to know them, but that to achieve them from our current economic structure, it will be crucial to re-regulate the financial industry. As abundant research has shown (my main reference is 13 Bankers by Simon Johnson and James Kwak, but there are many others), every recession since the 1980s has been induced by Wall Street speculation, which was brought on by the financial deregulation that it so earnestly sought ever since the New Deal, which established financial stability for nearly five decades. But beginning the Reagan "revolution" (which, in reality, was a devolution, or going backwards), there were periodic recessions about every 10 years. The final straw was the 2008 global financial meltdown, which is a profound lesson in why Wall Street needs to be re-regulated, and the biggest banks broken up.

But as Johnson makes abundantly clear in his excellent research, this will be politically difficult given the stranglehold that Wall Street and the banking industry have on Washington politics. Until there is broad political uprising from the American citizenry, this does present a political stalemate, as the recent near-disaster over the debt ceiling has shown.

This is why I have become personally active in the Move To Amend campaign in Boulder, which is achieving some success. This campaign is about stripping corporations of their constitutional rights through a Constitutional amendment. Such rights, which we can refer to as "corporate personhood," have been gained strictly by court precedent, primarily SCOTUS court precedent. When one looks deeply into the matter, it become obvious that corporations were never granted these rights by the people, which is where such rights ultimately reside. This struggle deserves to become the biggest struggle for civil rights in history -- larger by far than the civil rights struggle of the Sixties. It is ultimately also related to the violent struggle for democracy that is currently being played out throughout the Mideast, where the plutocracy are autocratic families, instead of autocratic corporations.

I urge anyone concerned over these issues to consider this question of corporate personhood and becoming involved in Move To Amend, as I consider it a sine qua non when any serious political solution to our severe economic and environmental problems is considered.

-- Rick
-----------------------------------------------
Rick Casey :: case...@gmail.com
online Instructor, Environmental Economics, Front Range Community College, Ft Collins, CO
online Instructor, Database Systems, Champlain College, Burlington, VT
Professional Research Assistant, Institute of Behavioral Genetics, University of Colorado, Boulder, CO

A plea to the profession of Ecological Economics

2011-08-17T21:29:00.004-06:00

[This is a post that I wrote to an email list that is subscribed to by those interested in the field of Ecological Economics. This field has personally inspired me to return to teaching economics -- but only environmental economics, because it represents a crack in the door to let the message of Ecological Economics get through to our existing institutions -- which sorely need to hear its message.]

Thank you Mr John Veitch.

Your reply is, to my mind, what this email list is for: to inform and educate each other, and I appreciate this quick sketch of the milestones in the background thinking that underlies modern thinking in ecological economics.

While I don't wish to discourage easy camaraderie among its subscribers, the more I see uninformative posts that simply take up cycles of my time, the less inclined am I to take this list seriously; but I see Mr Veitch's post as an opening for a plea that I have been wanting to post to this list for some time.

I am just a beginner in the field of ecological economics myself, and much appreciate these kind of sincere efforts to challenge each other to stimulate new and original thought, which I genuinely believe are needed -- especially within the emerging profession of ecological economics. My (quick) background is that I am going into teaching environmental economics at a local community college in Colorado (frontrange.edu) for my fifth semester. I attempted to introduce a course in Ecological Economics there, but have given up, due to lack of support within my department; otherwise, I earn a living primarily as a database programmer in an academic research center (at CU Boulder).

Given the dark clouds on the horizon, I believe the small band represented by ecological economists has a certain list of duties to perform (and here I will reveal my own activist bent): (1) to develop the new ideas and empirical studies with ecological economics to mature its stature as a scientific field of knowledge to be taken seriously, (2) to challenge the existing economics profession to fully embrace ecological economics for its advancement of the overall field of economics and accept that reality, (3) to thoroughly reexamine old ideas (particularly the prominent examples among classical economists who long ago challenged the premises of basing an economy on unlimited growth or materialism) so that we can point out to the 'old regime' where they have 'gone wrong' but were warned earlier, and (4) develop new bridges of thought between mainstream economics and mainstream ecology (a truly new area of investigation).

The further challenge will be to (5) communicate this to the public and to the policymakers. In these charged political times, I do not expect this to be a high priority for the field; but perhaps there are those among us, young and indomitable, who would wish to take on that duty. For myself, at age 57, I am focusing on my own professional development as an ecological economist, at my level, and working on other political change.

In these pressing times, when we, as economists, can perceive a bit more into the future and know what lies ahead, while uncertain in its exact dimensions and form, portends certain harm unless action is taken, dictates a certain moral responsibility. I much admire figures such as Paul Hawken and Bill McKibbon who are some of the more leading moral figures in our times, who attempt to point out the need to change our economic ways.

I look forward with interest, and expect to learn, from others' replies.

Respectfully submitted,
Rick Casey
Boulder, CO

[Below is Mr Veitch's original message....to give my reply some context....]

The new economics has to deal with these facts. (Which I listed with links in a previous post.)
Keynes had no idea what long term damage his theory would create. We do have that knowledge.
Our New Knowledge
In the 1970's Nicholas Georgescu-Roegan, demonstrated that an economy didn't depend on money at all. All economic processes involve a transfer of energy. Whatever we do, we take some high quality energy and we dissipate it into the environment. There are real limits to economic practices, that are determined by the rules of physics, not the rules of the market place.

In 1972 Dennis Meadows and associates published Limits to Growth. This book was widely ridiculed at the time, but it's proven to be a remarkably good guide to what's happened in the last 40 years. Meadows understood nothing about climate change, but he did anticipate peak oil, and shortages of water.

In 1992, with Agenda 21, the nations of the world agreed to save the biodiversity of the world and to take active steps to protect the environment. But since then little has been done. In the USA, attacks on the principles of Agenda 21 (more American irrational madness), were widely supported.

In 1980 the Brandt Commission reported that there were serious problems the world needed to address. Four areas: Environment, justice, economics and social conflict.

The Intergovernmental Panel on Climate Change, has now produced four reports. The bad news is that the way we have developed our economies is destroying the planet's climate system. We MUST, reduce and where possible STOP our use of fossil fuels as quickly as possible. No effective action so far.

The Stockholm Resilience Centre has identified nine planetary boundaries that are likely to have tipping points that when crossed could have devastating consequences for the Earth. They believe that we have already crossed three of those.

We now have a problem called jobless growth. In modern economies, new businesses employ very few people. This is particualrly evident in high unemployment for young people.

Keynes and Hayek knew nothing about any of the new knowledge above. Keynes and Hayek produced an economic proposal for the 20th Century, and those ideas served us well. But like Keynes and Hayek, themselves, those ideas are now inappropriate (dead). Why are we still debating those principles? Here's James Gustave Speth's proposal for Eight Necessary Transitions, to solve our 21st Century problems.

Here's the brutal truth. No modern economy can employ all it's people. Gross Domestic Product, is a poor measure of economic performance and the pursuit of GDP, is the prime cause of climate change and environmental destruction. We cannot solve 21st Century problems with 20th Century economic principles. We don't need to be trapped in the past. That's a choice we make.

Regarding the referendum on corporate personhood

2011-07-12T23:35:00.014-06:00

[This is an email I wrote to the Boulder City Council on July 12, explaining to them why I hope they will vote in favor of putting a referendum on corporate personhood on Boulder's fall ballot.]

Dear Mrs. Osborne, Mrs. Becker, Ms. Ageton, Mr. Wilson and Mr. Applebaum,

I am writing you all to voice my support for the referendum on corporate personhood, as I have not seen that you have taken a public stand on the issue. Perhaps you are waiting to hear from the public before making up your mind; I hope this email will help you to realize what broad public support I believe this measure will have.

I'd like to believe I possess some qualifications and credentials to address this issue. I am the primary organizer for the Boulder chapter of Move To Amend (see our website here) I've been following socio-economic and environmental problems all of my adult life. In college, I was inspired by the teachings of Buckminster Fuller, attending his last World Game Workshop at the University of Pennsylvania in the summer of 1975. This ironically foreshadowed my later attending graduate school there, graduating with a master's in Regional Science in 1981. This is a specialized field of economics, focused on the location of economic activity, and with providing policy makers with analytical tools to solve practical economic problems. Problem solving, then, has always been my bent; and undoing corporate power in our political process will be a tough nut to crack.

Most of my professional career has been spent as an analyst of some type, first in economics, then later in programming, solving analytical problems for companies or institutions. I tried teaching micro and macro economics at Front Range Community College (FRCC) from 1988 to 1992, but gave it up because I had become cynical over the direction of global economic change, and the power of the global corporate state; so I gave up on economics, and became a self-taught programmer. Since 1999, I have worked at two different research centers at CU Boulder, first at the Center for Advanced Decision Support for Water and Environmental Systems (CADSWES), and currently at the Institute for Behavioral Genetics (IBG). The academic environment agrees with me. Along the way, I earned a second masters in telecommunitions at CU Boulder, while working part-time, graduating in 2002.

However, I returned to teaching economics part-time at FRCC in 2009 (and still teach there); but only environmental economics. I am as deeply concerned over the environmental impact that our economy is having on the world, as I am distressed over its overtly unfair treatment of individuals, communities and the disadvantaged. But I was inspired to return to teaching environmental economics because I had learned about ecological economics, which is an entirely different beast. If you are not aware of this field, I highly recommend it to your attention; I am convinced it deserves to become the economics of the 21st century, as it has answers for the tough environmental and social problems that the neo-classical paradigm has created, and will only make worse, if this new paradigm is not allowed to displace it.

I am doing my best to try and advance this new paradigm. It's foremost lesson is that basing economic policy purely on unlimited growth is insane; worse than insane, it is environmental suicide. I'm sure you are aware of this, and of the host of lucid analyses of various researchers about the dangers of the economics of business-as-usual, such as David Korten, Paul Hawken, Riane Eisler, and Annie Leonard, among many others.

And if there is one thing all these authors agree on is that the most prominent, common and overbearing theme of these web of intertwined problems is the role that corporate power plays behind the scenes in creating them. Of all these authors, I most recommend David Korten's book, The Great Turning, not only for its brilliant and penetrating analysis of the history of the corporate model and the devastating aspects of its influence on society, but because Korten offers real suggestions for real solutions. And the conclusion of all this research points to a common culprit: the domination of our political and financial system by Wall Street, multinational corporations and the aristocratic, disdainful, attitude of the super-rich.

But how will we, the people, ever hope to begin to change this situation? It cannot be done at the national level, not with the vast resources of the controlling powers that be. Change will have to come from below; it is useless to think that change will come from above. And change will come -- this is inevitable. But will come by design or by default? If by default, as a result of the unsustainable path that the corporations are attempting to force us, I think we'll agree the danger in that path, which is leading us over the looming cliff of global climate change and the final phase of peak oil.

Or will we attempt to have change by design? By taking a stand for positive change, for rational change, for change that calls out for humanity to regain its common sense, and its heart? We must take that stand -- and Boulder has a real opportunity to help in boosting this awareness, and giving others real hope for real change, by taking this stand.

When I learned about the actual legal origins of corporate personhood, which is lucidly laid out in Thom Hartmann's Unequal Protection, I was outraged. Corporate personhood has only been established by court precedent, by corporate lawyers (or by Supreme Court clerks, spinning the headnotes) pushing the limits, little by little, bit by bit, over the past 125 years, culminating in the Kafkaesque logic of the SCOTUS's Citizen's United ruling. The American revolution was fought, to a large degree, to resist corporate domination and control of our economy. It is now time to take up this fight again, as corporate control is not only ruling our economy, dominating our judiciary and legislatures, it is destroying the very environment in which we all live, besides poisoning our environmental resources, our bodies and the food we eat.

And the beginning of that fight needs to be an amendment to the United States Constitution which states, once and for all, that corporations are not entitled to constitutional rights, and that money is not free speech. Similar resolutions passed in Madison, WI this April by 84 per cent, and in Dane County by 78 per cent. This was a direct result of an intense campaign run there by Move To Amend starting the previous fall.

I do hope the Council will also take a stand on this issue, and let the community of Boulder vote on this as well.

Rick Casey
Lafayette, CO

Corporate Personhood: It's False History

2011-06-21T12:42:00.002-06:00

[The following is a Letter To The Editor that I sent to the Daily Camera, Boulder Weekly and the Denver Post on June 21, 2011.]

Since the Boulder City Council may be deciding at their July 19 meeting on a fall ballot resolution about the issue of corporate personhood, I thought the community would be interested to learn more about the
origins of this legal fiction, and its bearing on current politics.

Corporate personhood is the claim by corporations that they have constitutional rights equal to Americans. This legal fiction was established only by court precedent since the post-Civil War era. “Corporation” is not mentioned in the Declaration of Independence, the Constitution, the Bill of Rights, nor has “corporate personhood” been voted on by any legislative body, anytime, anywhere.

So how did it start? After the 14th Amendment was passed in 1868 to grant citizenship to all persons born in the United States, lawyers for the railroads (the biggest corporations then) crafted a brilliant scheme: could they claim rights as “corporate persons” under this law, and thereby escape laws seeking to restrain them? The result: between 1886 and 1910, there were 307 Supreme Court cases involving this amendment. Of these, 19 involved black men seeking to protect their rights; the other 288 were corporations seeking to expand their “rights” as “legal persons.” (from Unequal Protection by Thom Hartmann, page 105).

This began 125 years of steady expansion of the rights of “corporate persons” -- solely through court precedent -- culminating in the disastrous 2010 Supreme Court decision, Citizens United,
saying money is equivalent to speech, and allowing corporations to spend unlimited money in politics. This is a clear and present danger to our democracy. It must be reversed. I hope the City Council will put
a resolution on the fall ballot to allow Boulder citizens to vote on it.

Sincerely,

Rick Casey

A Success in Fighting Wall Street

2011-04-30T19:40:00.002-06:00

Gretchen Morgenson is a business columnist for the New York Times. I enjoy reading her articles in the Sunday Business section for their relentless focus on the criminal activities conducted by Wall Street -- criminal in the moral sense, as they are usually legally defensible.

But that's changing: in last week's article (April 24, 2011), titled A Crack in Wall Street's Defenses, describes how two investors (who are neighbors in Aspen) successfully battled Smith Barney (a Citigroup subsidiary) and were recently awarded $54 million in a securities arbitration case, $17 million of which was for punitive damages. This was decided by the Financial Industry Regulatory Authority (or FINRA), an industry sponsored self-regulatory board that is approved by the SEC.

These investors were told that a complex arbitrage portfolio involving municipal bonds would provide above average returns between 2002 and 2007. In reality, it was providing Smith Barney guaranteed profits at investors' expense. I'll spare you the details; it's a story we all know too well...don't we?

But the award is highly unusual, Ms. Morgenson notes, because the usual lame excuses (um, excuse me, I meant to say 'usual defenses') which Wall Street typically hides behind did not work this time, namely:

1. We didn't blow up your portfolio, the financial crisis did.

2. If you're wealthy and sophisticated, you should have understood the risks.

3. The prospectus warned that you could lose your shirt, so don't come crying to us if you do.

I found this highly encouraging; and if Ms. Morgenson is putting into her Sunday Times column, you can be sure she thought so as well.

I also found the final comment by the principle investor, Gerald Hosier, pretty telling as well: "Instead of the financial world being the lubricant for business, they are out there manufacturing products with no utility whatsoever except for generating fees. Somebody's got to do something about Wall Street. It is destroying the country."

Join the club, Mr. Hosier; this is what David Korten has been telling us for years now. We need to mobilize as a society, take back our economy from the Wall Street by reregulating that self-serving and criminally damaging industry, and make it start serving Main Street again!

Intel's tax holiday is a sheep in wolf's clothing

2011-03-15T23:02:00.004-06:00

[This is a comment I had to make at NPR on March 15, 2011 after hearing a disgustingly self-serving interview with the CEO of Intel, Paul Otellini, by a sycophantic NPR reporter. When I made my comment right after I heard it, there were about five posts; when I returned to npr.org about 11pm tonight to post this to my blog, there were 39 comments -- all of them slamming the falsehood and hypocrisy of the statements by Otellini. It was heartening to see there are a lot of other pissed off Americans out there who are tuned into the economic class warfare going on in our country -- and that they're not afraid to let NPR know about it!]

While I enjoyed most of what Mr Otellini had to say about creating more jobs in America, his remarks about how a 'tax holiday' would help create jobs tipped his hand as a wolf in sheep's clothing -- which I wish the NPR reporter would have pursued.
"A tax holiday costs us nothing!", Mr Otellini asserts; this is wrong. I teach economics, and know full well the disingenuousness of that statement. This is the typical comeon of so many corporations that beg for tax relief, promise much, and deliver little, often pulling up stakes well before the length of time they promised to stay in a community is up; there are many, many examples of this, and it has only become worse as globalization has increased over the years. If Intel truly wants to create jobs in the US, then why don't they invest in the US as they've done in Vietnam over the past five years, where they've invested millions in not only their own factories, but even in schools in those communities. Why? Not out of the goodness of their hearts, to be sure, but because of the cheap labor Vietnam can provide -- and, I would bet, a tax holiday! No, tax holidays are a race to the bottom, and communities should stop giving them!

In Support of Wisconsin

2011-02-26T14:23:00.008-07:00

[This is a speech I gave on the steps of the Denver capital building on Saturday, February 26, 2011 to about 1,000 to 3,000 people (estimates varied) who had gathered in response to MoveOn's call for a Saturday protest rally in support of the Wisconsin protests. I was the last of five speakers, and the crowd had been led in some group chants in between the speakers, so they were pretty primed by the time I spoke. At many points in my speech, I had to stop until the crowd's yelling in support had quieted down. It was a brisk, sunny Colorado day, with the snow capped peaks of the Rockies in the distance to the west -- it was a beautiful and inspiring event!]

In Support of Wisconsin

by Rick Casey

February 26, 2011

Hello to all you protesters out there standing in support of Wisconsin! It's a great day here in Colorado to be taking a stand for democracy, isn't it?

I want to say a few words today in support of all those brave people in Wisconsin that are also taking a stand for democracy.

I want to stand in solidarity with them to take a stand against the insane policies of the Republicans and the Tea Party.

I call their policies insane because what they do is the definition of insanity: they keep repeating the same action and expecting a different result. That's exactly what Scott Walker in Wisconsin, and the Republicans in Washington, are doing: they want to do exactly what they did before, and they are telling us the same lies again: that their policies are good for us, and that if we just go along with their policies, that it will be better for us, and for the economy, in the end.

Well, my friends, I want to ask you: why is it, do you think, that Wisconsin...and Colorado...and New York...and California...and just about every other friggin' state in our country is having a budget crisis? Why is it that Scott Walker had to even draft his "Budget Repair Bill" in the first place?

I'll tell you why we're having this crisis: because it was the insane policies of the Republicans that caused it! For eight years the Republican Party under George Bush got exactly what they wanted for economic policy. The REPUBLICANS passed the laws that made it easy for Wall Street to get exactly what they wanted. The REPUBLICANS enacted the policies that tore down the financial regulations that were created back in the 1930's in the depths of the Great Depression, and gave us a stable financial sector for 50 years. It was the REPUBLICANS who told us during the housing boom just a few years ago that "everything was different now" and the "innovations" that Wall Street was coming up with was going to lead the way to global prosperity and everybody was going to get rich!

And look where those policies got us: the 2008 fincancial meltdown that brought the global economy teetering on the edge of collapse. And now America and Europe are both suffering the consequences.

I want to ask you: do you think unions are responsible for the recession that was caused by the 2008 global financial meltdown?

I want to ask you: do you think unions are responsible for the loss of millions -- MILLIONS!! -- of manufacturing jobs that have been outsourced from America for the last 30 years?

NO THEY'RE NOT!! It was the Republican Party and Wall Street and their failed economic policies that caused this financial crisis! It is THEIR fault, and we should not let them forget it!

It is the insane policies of the Republicans that have rewarded the rich and eroded the middle class over the last 30 years, that caused the housing crisis, and now these state budget crises. This began with the deregulations that started during the Reagan administration, and snowballed in the 90s, and reached a crescendo in the last decade, and has brought us to this present sorry state of affairs.

But does Scott Walker and his fellow Republicans have the integrity or the moral character to accept responsibility for their actions? No! They want to point the finger at unions, at teachers, at policemen and firefighters, at anyone or anything EXCEPT themselves. They act like they have no memory of how we got into this financial crisis. They want to tell the American people to let them take control, and just let them repeat their failed policies of the past.

Are we going to let them do this to us -- again? No, my fellow citizens, I say let us stand in definace against this insanity. Let us stand in solidarity with the proud people of Wisconsin, who have a long history of politcal action that supports their own people, and which had been a shining example of democracy -- until now. I say NO WAY to Governor Scott Walker and the insane policies of the Republicans -- and I hope you will too! Go Wisconsin!!

The Corporate Achilles Heel

2011-01-22T23:21:00.005-07:00

The Corporate Achilles Heel

by Rick Casey

Protest rally on the first anniversay of Citizen's United,

Boulder, CO

January 21, 2011

Introductory Remarks

I'd like to thank the Boulder County Democrats, the Coffee Party, and especially Move To Amend, its founders and its many volunteers, and all the other people who are here today working on these fundamental and vitally important issues: corporate personhood and the disastrous Supreme Court ruling on Citizens United. Both must be reversed; but today I want to emphasize what I consider the Achilles Heel of the power of corporations: namely, the legal fiction that we call corporate personhood.

The Setting

Corporations are some of most powerful organizations in the history of the world. It's said that of the 100 largest economies on the planet, 51 of them are corporations -- and that statistic is several years old. Maybe it's even more now. They have grown so powerful that it is difficult indeed for even the US government to control them -- but I don't need to tell you that. You know this! So how can we, the common people, ever hope to bring them under control? How can we even have the audacity to think that we, the common people, can even confront them, these mighty corporate behemoths which stop at nothing in their quests for riches and power, which are trashing our planet, eroding our communities and which have turned our hard-earned democratic form of government into a joke that is governed by a financial plutocracy?

Why? Because we have the truth on our side.

How? Because the very concept of a corporation is a legal fiction.

The Early History

A corporation does not exist in Nature. It was not made by God. It is never mentioned in the Constitution. Corporations exist in their current form in our country only because the Supreme Court of the United States says that they can exist in that form. But is the Supreme Court always right? Are they so perfect that, in their infinite wisdom, we should allow them to perpetuate this blatant falsehood -- that a corporation is equal to a human being before the law? No, my fellow citizens, we should not! And this is why:

Because corporate personhood is a legal fiction with the flimsiest of foundations. It was never actually decided by a court decision. It was never legislated into existence by any legislature. No, it was established by hook and by crook, I would say -- and I think if you read the history of how it happened I think that is exactly how you would describe it too.

You should know it for certain that corporations were kept on damn short leashes by all the state governments, where they were incorporated, during the first 75 years of our country's existence. Every American patriot who fought in the Revolution knew they weren't just fighting the King's army -- they were also fighting against the Crown Charted corporations that operated the American colonies on the King's behalf. So when the newly formed American states allowed a corporation to come into existence, it could only do so for a specific stated purpose that served a specific local need and for a specific period of time. Corporations could not own other corporations. When their charter expired, the assets were divided among the shareholders, and it was dissolved. And if they did not operate within the stated purpose of their charter, they were either fined or their charter was revoked -- pronto! Dozens of corporations had their charters revoked in first half of the 19th century. The young Nation, and its founding Fathers, were rightfully wary to keep the power of corporations under strict control, because they had known firsthand what it meant to be dominated by giant, transnational corporations, such as the East Asia Company.

The Change

So how did this change? It changed when the railroad companies, in the aftermath of the Civil War, began craftily using the 14th Amendment to their own legal advantage. That Constitutional amendment, which helped to end the Civil War and was passed in 1868, was supposed to grant citizenship to anyone born in America, and to overturn the Dred Scott decision (another astoundingly bad Supreme Court decision in 1857). Do you think when the US Congress passed the 14th Amendment, they thought they were establishing corporate personhood? I don't think so!

No, to my mind, the 14th Amendment was perverted -- yes, perverted I would say is about the right word to describe this disastrous turn of events -- by Corporations to apply the Amendment to themselves, as legal persons in the eyes of the law. Don't believe me? It's true! The first such Supreme Court case was Santa Clara Country vs Southern Pacific Railroad in 1886, where the term "corporate person" was first used -- but not in the case itself. No, it was interjected into the court summary by a clerk! A clerk! It was never even mentioned by one of the Supreme Court justices in their decision. But once established, a precedent was set, and that is how this legal fiction got established: by corporations, mostly railroads, which were the largest corporations back then, who agressively pushed a concious legal strategy to achieve it. And so it spead: between 1886 and 1910 there were 307 more cases brought before the Supreme Court regaring the Fourteenth Amendment. Nineteen of them involved the rights of African Americans; two hundred and eight-eight of them were about Corporations seeking human rights. And that, my friends, is how this legal fiction started. (1)

The Aftermath

But is this such a bad thing, you might ask? Should we be so concerned that something so remote, so artificial, this complicated legal abstraction really be of such concern to us? And besides, it has been around since 1886, one hundred and twenty five years. How can we ever expect to reverse 125 years of corporate law?

My friends and fellow Americans, it's because we have to do this. We simply have no choice. Corporations have used this legal fiction over the last 125 years to bend and shape and force and warp our entire economy -- really! the entire legal and financial system that supports the economy, and without which it could not operate -- into an economy that exists for the health and well being of who? [pause....then softly] Not human beings. Not for the nurturing of our children. Not for sake of families and communites, where human beings are meant to grow and develop, be educated...and play....and love.

NO!! We have an economy that exists for the health and well being of General Motors, of Exxon, of Goldman Sachs, and for the military industrial complex that eats up over half of each your tax dollars, year in and year out!!! Just look at who is most rewarded in our economy -- and you will see why the economy exists.

The Right Thing To Do

So, I ask you again, how can we, the common people, the little people, dare to stand up against these colossal economic empires? It is a dark time in our country, a dark time....but does that mean we give up? There have been dark times in our country before....and some people did not give up...such as Howard Zinn, the late great historian, who knew full well the dangers of excessive corporate power; and here what he might say today:

"To be hopeful in bad times is not just foolishly romantic. It is based on the fact that human history is a history not only of cruelty, but also of compassion, sacrifice, courage, kindness. What we choose to emphasize in this complex history will determine our lives. If we see only the worst, it destroys our capacity to do something. If we remember those times and places--and there are so many -- where people have behaved magnificently, this gives us the energy to act, and at least the possibility of sending this spinning top of a world in a different direction. And if we do act, in however small a way, we don't have to wait for some grand Utopian future. The future is an infinite succession of presents, and to live now as we think human beings should live, in defiance of all that is bad around us, is itself a marvelous victory." 2

Yes, my friends -- reversing corporate personhood is the right thing to do!!
Let's get started today!!
Thank you!!

1 Hartmann, p. 105

2 Zinn, p. 208

References 

Constitutional Accountability Center (2010). A tale of two courts: Comparing corporate rulings by the Roberts and Burger courts. 1200 18th Street, N.W., Suite 1002, Washington, D.C. 20036. www.theusconstitution.org.   

Barry Friedman (2009). The story of ex parte Young: Once controversial, now canon. New York University School of Law, New York University Public Law and Legal Theory Working Papers, NELLCO Year 2009. barry.friedman@nyu.edu. (Friedman is Fuchsberg Professor of Law and Vice Dean, New York University School of Law. B.A., University of Chicago, 1978; J.D., Georgetown University Law Center, 1982. His faculty biography calls him a leading authority on constitutional law.)

David H. Gans & Douglas T. Kendall (2010). A capitalist joker: The strange origins, disturbing past and uncertain future of corporate personhood in American law. Constitutional Accountability Center. www.theusconstitution.org.
Howard Jay Graham (1968). Every man’s constitution. Madison, Wisconsin: State Historical Society of Wisconsin.

Thom Hartmann (2002). Unequal protection: The rise of corporate dominance and the theft of human rights. Rodale.

Ted Nace (2003). Gangs of America: The rise of corporate power and the disabling of democracy. San Francisco: Berrrett-Koehler, 2003.

Howard Zinn (1980). You Can't Be Neutral on a Moving Train: A personal history of our times.

For more information, see:
movetoamend.org

Facebook: "Move to Amend"

Facebook: "Colorado Move to Amend"

The Economy and Mental Health

2011-01-11T08:22:00.012-07:00

With the nation grieving over the recent shooting in Tuscon, there has barely been any acknowledgement in the mainstream media of the fact that Jared Loughner is afflicted with a mental illness (i.e. a brain disorder), but did not get help. On Democracy Now's show this morning (Jan 11, 2011) however, there was a balanced and compassionate interview of one Loughner's past classmates in a poetry class. It demonstrated that this young man clearly stood out from his classmates due to poor socialization skills, but was highly functioning, enough to be attending classes at a community college. Even though symptoms of his mental illness had been apparent since high school, he nor his parents apparently ever sought, or been offered, treatment for it. Instead, the community college he was attending last fall withdrew him from class, and forbade him from coming on campus until he had obtained treatment, and been given a clear bill of health from a mental health professional that he was not a danger to himself or others.

Because of the drastic cuts in support for the public mental health system in Arizona, the only way Loughner could have done this, apparently, would have been to personally contact a psychiatrist and pay for this himself, which was highly unlikely. There were no other public services available, as described by another interview in the episode with a representative from NAMI, the National Alliance for Mental Illness. NAMI is the foremost organization in the country that is seeking to achieve greater awareness of the widespread distribution of mental illness across all strata of society, and the need to develop more investment in its treatment, particularly the sources of the illness, and reducing the stigma associated with it. This is quite apparent in how the mainstream media is typically hesitant to address the issue directly. Recognizing this, NAMI's current executive director has provided a clear procedure for how the media should be reacting to the issue.

But in terms of public safety, the first such preventive measure is detection. In that Democracy Now interview, the NAMI representative related a story about his own son, who was excelling in school as a teenager where their family was living in Belgium at the time. The school counselor called him, saying that his son needed to be withdrawn from school for a while. Surprised, he asked why? The answer was that the son had been diagnosed with schizophrenia. This was a painful realization, but at least the family was made aware this illness, which they have had to deal with since then. In hindsight, it is worth contemplating if this tragedy in Tuscon might have been prevented had there been an alert counselor in Loughner's high school, well trained to identify mental illness traits.

However, there is a deeper theme to this tragedy which deserves greater discussion, namely that our society is destined to produce more such tragic incidents until we acknowledge the role of good mental health in our country -- and that good mental health starts with healthy, intact families, especially during childhood. The data about healthy, intact families in this country is a sheaf of bad news. This issue has been recognized and extensively diagnosed by some of the more insightful among us, such as David Korten and Riane Eisler. Consider this passage from Korten's The Great Turning (p 336) which illustrates the direct connection between deterioration of intact families and the economic policies advocated by the conservative right:

The New Right's propagandists would have us believe that family stress and breakdown are the fault of gay marriage, abortion, feminists, immigrants and the liberals who support them. They are prepared to blame most anyone or anthing except their own economic and social policies. In pursuit of their own personal power and profits, New Right leaders [Author's note: think the newly elected Republicans in the House led by John Boehner] work tirelessly to

roll back health and safety standards for the environment, consumers and workers, including workplace standards, a meaningful minimum wage, and the right to form unions to bargain collectively for improved wages and working conditions;
drive down wages and benefits for working people through international job outsourcing;
shift the tax burden from the investor class to the working class;
eliminate public services and safety nets, including public education and Social Security [Author's note: and public mental health services in Arizona?];
generate military contracts for crony corporations;
secure intellectual property to facilitate monopoly control and pricing of access to information and technology, including essential seeds and medicine;
increase tax breaks and subsidies for large corporations to give them a competitive advantage over local businesses.

Each of these policies transfers wealth and power from ordinary people to the ruling elite and leaves families and communities without the means to provide their children with the essentials for healthful physical and mental development.

The following are but a few of the consequences. The details of this list are specific to the United States, but similar consequences are being experienced nearly everywhere as a direct consequence of neoliberal policies [of the New Right (Author's note)].

High unemployment undermines family formation, and punitive welfare policies force single mothers into jobs paying less than a living wage without affordable, high-quality child care options. Even two-parent households are forced to piece together mulitiple jobs, allowing no time or energy for child care or for a normal family and community life. Parents are thus forced to abandon their children to television and an unregulated entertainment and gaming industry that finds it profitable to fill their minds with images of sex and violence and to actively undermine parental authority and values.
Corporations spend billions on direct marketing to children to create lifetime additions to junk food, alcohol and cigarettes, and a childhood obesity epidemic is poised to become the leading cause of premature death.
Declining health care coverage and skyrocketing health care costs place essential health care beyond the reach of most families.
A deteriorating public education system is unable to deal with the special needs of children physically and mentally [Author's emphasis] handicapped by the consequences of growing up in physically and socially toxic environments, let alone deal with normal individual differences in learning styles and talents.
Lax environmental regulations allow corporations to discharge into the air, soil, and water massive quantities of tens of thousands of toxins destructive of children's physical, neurological, and endocrinological development.

Intended or not, these conditions are all a direct result of the neoliberal economic policies that are the real priority of the corporate plutocracy. They leave families with few or no good options, and the lead to mental stress, family breakdown, divorce, the destruction of community life and a coarsening of moral values. The New Right argues that it is the responsibility of parents, not the state, to provide proper care for their children. Ideally, that would be the case; but the policies the New Right advances virtually guarantee that the substantial majority of parents are unable to fulfill this responsibility.

These words, published in 2006, ring prophetically over the tragic event in Tuscon on January 8, 2011. I hope some of new elected representatives in the House will hear them and take them to heart.

Creative economic fix-its? Please, spare us...

2010-12-05T11:26:00.006-07:00

[This was a letter to David Segal, a prominent New York Times reporter who writes on various economic topics, usually in the business section. Normally I enjoy his stories, but this one was a real bomb....and on the front page of the Sunday business section, no less...sent Dec 5, 2010]

Dear Mr. Segal,

While I usually enjoy your economic articles, I was rather disappointed with your piece last Sunday (Nov 28, 2010) "Economic Fix-Its." Where do you find such inept economists who provide such inane and superficial recommendations? For a more balanced, informed and penetrating treatment of our economic malaise, please consider Robert Reich's recently published Aftershock. In it you will a rigorous and trenchant treatment of our problems, which deserves greater public discussion. It's not hard to see why there's a lack of good jobs in this country: they've been outsourced for decades by American corporations who care for little beyond their own bottom line. Witness Intel's massive investment this year in Vietnam -- not only for their own factories, but in that country's schools, to provide a more educated labor force! Would that they could be investing in the human capital in this country instead. Please try to contribute to a clearer understanding of our economic problems, instead of obsfucating it.

Sincerely,
Rick Casey

Free-market environmentalism is an oxymoron!

2010-07-14T00:17:00.004-06:00

[The following is a response to an editorial that appeared in the July 12, 2010 issue of the Colorado Daily, by a J. Craig Green, P.E., from the Independence Institute, a conservative think tank based in Golden, CO. You can rest assured that the financial backers of the Independence Institute and the Environment Research Center in Bozeman, MT, mentioned in the editorial, are backed by conservative corporations with an interest in privatizing natural resources. I tried to uncover this by accessing their Form 990's online, but was unsuccessful (The Form 990 is a public document that all non-profits that are 501(c)3 corporations must provide, which is supposed to show their source and use of financial funds.)]

Dear Colorado Daily,

I would like to respond to the editorial "Free-market environmentalism" by J. Craig Green on July 12, 2010.

My desire to address this is based on my teaching of environmental economics at Front Range Community College, and holding a masters degree in economics from the University of Pennsylvania. I do not know what Mr. Green's training is in economics, but as a professional engineer, I am sure he should be able to grasp some fundamental concepts from environmental economics which he seems to be lacking -- beginning with a public good.

A public good is one that cannot be easily packaged, whose consumption by one person does not reduce its availability to someone else, and is difficult to exclude others' access to it. The classic example is a lighthouse: no one's "consumption" of the light from a lighthouse diminishes another's consumption. I like to tell my students that environmental quality is the ultimate public good.

The other basic lesson about public goods is that private markets will consistently underproduce them, and do a terrible job of providing them if they try. This is due to the fact that public goods are inherently difficult to package and price, which rather destroys the incentive of firms to enter such markets. Coming up with ways of valuing the environment, such as clean air, clean water, aesthetic enjoyment, and ecological services, in order to develop market-like mechanisms that can be used to protect them, are major and difficult fields of study in environmental economics. Mr. Green's rather glib assurance that "private property owners have more incentive and control to take care of property they own" completely misses the point. No one can "own" environmental quality, Mr. Green's assertions notwithstanding.

No, the hidden agenda of "free-market environmentalists" and their minions is what really needs to be discussed here: the insane and dangerous greed of major corporations to privatize public resources for their own benefit. This is nothing new; it has been going on throughout history. The "free market" system was producing colossal environmental pollution before the environmental movement began to reverse this damage in the Sixties, a struggle which continues today. Mr. Green's other cheap swipes at the Obama administration, and incomprehensible mischaracterisation of excessive public debt as the cause of the 2008 financial meltdown, only further discredits his biased, incomplete and incorrect analysis.

Sincerely,
Rick Casey

"Americans For Prosperity" - What A Joke!

2010-06-07T15:56:00.012-06:00

[This is a letter I wrote to the editor of the Colorado Daily, a small Boulder newspaper that caters to the University of Colorado community, in reaction to an editorial they ran on June 7, 2010.]

Dear Colorado Daily,

I wish to respond to the editorial in today's paper, "FCC shouldn't regulate Web" by Phil Kerpen of Americans for Prosperity.

I must strongly disagree with Mr Kerpen's conclusion that the FCC should be prevented from "regulating" the Internet, as well as his erroneous assertion that "The Internet -- in the absence of regulation -- has flourished into a remarkable engine of economic growth, innovation, competition and free expression." The Internet is a wonderful invention, it is true, but Mr Kerpen's twisting of the issues needs some correcting.

The Internet, as well as the entire telecommunications industry, has always been regulated since shortly after it got started -- as it must be, if society is to derive the full benefits of this wonderful technology. This was painfully learned early in the 20th century, when unbridled competition between private telephone companies was creating a maddeningly inefficient and wasteful industry due to duplication of phone lines. The result was granting a licensed monopoly to the Bell Company, which created the best telecommunications network in the world for decades. I speak from some experience: I earned an MS in Telecommunications at CU-Boulder in 2002, where I studied the issue of competition in telecommunications in some detail, and in fact won a national prize in 1999 from the International Communication Association for my essay on industry competition in the aftermath of the 1996 Telecommunications Act.

The case brought by the FCC against Comcast for the slowing of Bitorrent traffic was dismissed on the legal technicality that the FCC "lacked authority" to regulate the broadband industry. This flies in the face of common sense, and deserves to be overturned; it is certainly reason enough for the FCC to be explicitly granted that authority by Congress -- but which has been hog-tied by lobbying interests from the telecommunications industry, as was evident in the 1996 Act. Actually, in this case the FCC was striving to preserve net neutrality -- the true cornerstone which makes the Internet work so well. This was an entirely serendipitous development stemming the Internet's evolution. It developed almost entirely within the US academic research community in the latter 20th century, after the seminal technology was invented as a result of DARPA reseach in the early 1960's. This is something the "free market" could never have delivered, and it is preposterous for Mr Kerpen to even suggest it. Apparently he also doesn't have a clue as to how the software on which most of the Internet runs was developed and is still maintained by the global open source software community. If this court decision is allowed to stand, it will be the first crack in the wall of net neutrality, leading to a slippery slope with the other big carriers beginning to discriminate in their handling of Internet traffic, who will start to nickel and dime everyone they can for how their Internet services are delivered. This is a marketplace nightmare which we should strenuously seek to avoid.

Furthermore, Mr Kerpen's shrill mischaracterization of the issues on so many other points, e.g. "..Washington takeover...FCC extremism...free-market Internet...mobilizing the public"... are all indicators that point to his underlying "Trojan horse" mission: to establish corporate power over a public resource, disguised as an effort to do good for all. No, make no mistake: Mr Kergen, and his band of scheming colleagues over at the misnamed "Americans For Prosperity" camp, need to be shown for what they are: a front for naked corporate power, who deliberately twist the truth for a hidden agenda that seeks to confuse the public with their doublespeak, rather than empower them with a knowledge of history and plain facts.

Rick Casey
1118 Centaur Circle #D
Lafayette, CO 80026
303.345.8893

Push BP out of the way now!

2010-05-29T20:48:00.006-06:00

As the Gulf oil disaster continues, the credibility of BP to shut down the oil leak they created decreases day by day. The patience of the American public is wearing thin: how long will it be before BP must be pushed out the way to get the job done?

It is a mistake to assume, as the federal government has done up to now, that only BP has the "expertise" to do this. What has this so-called expertise accomplished? How much longer can this "expertise" be allowed to bungle the job?

I would like to suggest to the blogosphere another option: that the US government force BP out of the way, take over control of the operation, while keeping BP in an advisory role. Call in leading experts for a new plan: to plant explosive charges to seal the blowout through geological means.

The circumstances of this pollutive catastrophe are without precedent - and may therefore require unprecedented solutions. Shutting off of this eruption by implanting subsurface charges in strategic locations, determined by the best seismic and geologic information available (which BP surely must have), is beginning to appear, at least to this author's mind, the only permanent solution to this horrific ecological catastrophe.

Stronger action must be taken immediately; the longer we delay, the greater the damage will be.

Once again, lame NPR reporting lacks insight, relevance and courage

2010-05-27T16:05:00.011-06:00

Today NPR, in reporting on the top news story of the day, the Gulf oil leak disaster, was once again lacking in insight and relevance. In so doing, they failed to perform one of the basic functions of journalism in our culture: to inform the public on dangerous industry practices, and to bring public pressure to bear on BP for its fraud, its lies and its wanton disregard for the health and welfare of its employees and contractors -- indeed, its wanton disregard for life itself, whether human, animal or plant.

In particular, my complaint is in regard to the NPR report about today's recall by the Coast Guard of the hundred plus boats operating as constractors to help with the oil clean up, by placing booms, removing oil from the water, etc. They were called in because of reports of nausea, eye and lung irritation and other symptoms; and there the NPR report stopped -- end of story.

However, that is not the end of the story; it should have been the beginning of the *real* story: BP's subtle strategy to escape legal liability. All the words spoken in the media matter not: what counts to BP, and what should count to the American public outraged over this issue, are the words that will matter in court. If you are concerned about this issue, you should be following how the court cases will emerge, and what BP's legal strategy is.

At central issue in that legal strategy should be the deliberate denial by BP of the use of protective gear by these innocent contractors. BP is not allowing these contractors to use respirators, even though some of them have been advised to so by other authorities helping in the cleanup. Let me repeat that: BP is not allowing these contractors to use respirators, in conditions which are making them seriously ill. Why? Well, that is the question the NPR reporter should have posed to someone at BP. Then we could have had the opportunity to watch another corporate PR person from BP dance around the question and not admit to the gigantic elephant in the room: that BP needs to be held liable for all damages stemming from this disaster, and should be made to fully pay for all the damage it has caused. But BP will seek to evade all the liability they can. Let me repeat that: mark my words, they will seek to evade all the liability they can. Is this not obvious? It's how Exxon acted in the aftermath of the Valdez disaster, and we can confidently expect that BP will act the same.

But back to our original question: why would BP prevent its contractors from wearing respirators? Because this would amount to their acknowledging that the contractors are operating in a toxic environment which BP caused, which would amount to admitting that they have liability for these damages. Rather than admit the obvious, this corrupt corporation willingly sacrifices the health of their contractors on the alter of denial. Put another way: they don't give a damn about the health of these innocent contractors, who are serving as mere pawns in their game.

In contrast, Amy Goodman on Democracy Now on the morning of Thursday, May 27 interviewed Clint Guidry, president of the Louisiana Shrimp Association, who was working directly with these contractors, trying to get them protective gear to operate in this toxic environment. He had direct experience of these contractors, and was told that they could not use the respirators, for the reasons stated above. (Check out his interview at democracynow.org)

This despicable behavior by BP needs to publicly criticized until they admit the motives for their behavior, and accept full liability for the worst environmental disaster in human history.

Yet another lame NPR interview...

2010-04-29T15:53:00.008-06:00

[A comment that I made at NPR's website on April 29, 2010, right after hearing the interview...]

I listened with interest this afternoon as NPR interviewed the CEO of Goldman Sachs, Lloyd Blankfein, on the heels of his grueling testimony before Congress yesterday. It was a rare opportunity to put some tough, direct questions to the head of the corporation that is more responsible than any other for causing the current US recession (not to mention their underhanded dealings on the international scene; they are behind Greece's current difficulties as well). Not surprisingly, the NPR reporter was not up to the task, and let this duplicitous scoundrel off with a mere rap of his knuckles.

The main point that Mr Blankfein tried to use to defend his company is that they are constantly financing US business and government activities that help build and maintain our economy; that is only partially true, and hides an ugly truth. The glaring reality is that over 70 percent of Goldman Sachs' profits come from trading for their own accounts. This is not investing in the real economy; it is like a cancer that is sucking the life out of its host body.

If the NPR reporter had bothered to do a little research prior to the interview, she would have found that Goldman Sachs is foremost in high frequency trading by having their own supercomputers located right at the exchanges, allowing them to front-end the trading market and skim off profits with near certainty, with their milliseconds of trade execution advantage. Indeed, recent evidence indicates that around 70 percent of all trading activity is done by this type of automated trading. If that is not newsworthy, I don't know what is; the global financial investment sector has become one giant casino, and it will be our undoing yet again if it is not brought under control, and soon.

So, another lame interview from NPR passes for "news"...and the American people are kept in the dark once more. When there was a golden opportunity to shed some light on one of its chief denizens of darkness, the public is shielded once again from the ugly truth that Wall Street is a predatory and vicious institution that cares nothing for the real welfare of US citizens and their communities. They care for one thing: their lust for profits that enrich only them.

NPR vs Democracy Now: No Contest

2010-04-08T16:48:00.003-06:00

[This is a comment I had to make on the NPR website on April 6, 2010 after hearing their lame and sycophantic coverage of a brutal assault by US forces against innocent Iraqi civilians. The story is based on a video leaked to WikiLeaks, which has posed it on collateralmurder.com ]

Dear NPR,

I listened to your report on this leaked video after hearing it earlier this morning on Democracy Now with Amy Goodman; the difference in the two reports was striking. Ms Goodman's presentation was much more open, revealing and truthful (with abundant live clips of conversation exchange between the gunship and commanders on the ground), including an interview with a London Times reporter in Kabul who just published a very similar story that recently occurred in Afghanistan. In contrast, NPR's coverage appeared insipid, hesitant and utterly sympathetic to the US military. After hearing the riviting account on Democracy Now, there is no doubt in my mind that the daily war in Iraq and Afghanistan is engaging the US military in nearly daily murders of innocent civilians, including children and pregnant women. Small wonder there is an insurgent war against an occupying force that behaves in such a manner. Shame on you for not reporting the truth to the American public. I suggest your reporters go to the Democracy Now website and take a look at some real reporting -- maybe they'll learn something.

Very Sincerely,
Rick Casey
Lafayette, CO

Is Global Climate Change Man-made?

2009-12-15T16:11:00.004-07:00

In case you were wondering...

I've had any number of people ask me where is the best place for evidence of scientific concensus that global warming, or, more correctly, global climate change, is anthropogenic, i.e. man-made; well, here it is....

I finally found (thanks to one of my students) the document that shows this US scientific consensus :
http://www.ucsusa.org/assets/documents/ssi/climate-change-statement-from.pdf

A Scary Night on Long's Peak

2009-11-24T19:23:00.008-07:00

It was to be a classic day: the forecast was perfect for the time of year, August 22: calm, clear and warm. I was to lead a CMC rock climb up the North Ridge of Spearhead, and had formed a strong team. Kent Crites, a mountaineer of deep experience, was my co-leader, and Heather Pore was the sole participant, both strong climbers. Since Spearhead is about four mile hike in, and since Kent and I were a little older (in our fifties), we decided to hike in the night before and bivouac below the climb to have a fresh start in the morning. Heather, a mere 20 something, of course thought nothing of hiking in and climbing the same day, so she was to meet us the next morning.

Kent and I enjoyed a pleasurable and leisurely hike in the balmy weather. Rocky Mountain Park was in its full summer glory, as we drank in the majestic sights that make up Glacier Gorge: Mills Lake, MacHenry's Peak, Spearhead, Chiefshead, Arrowhead, Pagoda Peak and, of course, the west face of Long's Peak. This is certainly one of the most scenic valleys in the park, and the compact clustering of high quality rock routes makes it especially exciting to climbers. Arriving in the cirque below Spearhead, we chose a flat grassy area about mid-way up the slopes towards the start of our route. With such benign weather, we would be fine sleeping without a tent, bedding down under the starry sky. We cooked and ate our simple meals, enjoying quiet conversation as dusk deepened into twilight. We were alone in the cirque, and savored the immense silence.

All seemed well as I snuggled into my bag, glancing up at the first stars appearing in the inky sky. The dark rocky ramparts of the west face of Long's were directly across the valley from us, the exact ridgeline hard to make out in the dark, as I tried to make out exactly where the Keyhole would be. All of a sudden, I noticed two tiny points of light moving slowly along, bobbing and winking; a few seconds of steady observation confirmed that they must be hikers returning along the Keyhole route, the most popular trail up Long's. I called over to Kent, and he noticed them too. Those poor guys! It was past nine o'clock, but they looked like they would be through the Keyhole soon, and, I thought, at least they would then be past the most exposed and dangerous part of the route.

A few minutes later, this assumption of safe harbor for the hikers seemed to be going terribly wrong: instead of the two bobbing lights going up and over the ridge as they neared the Keyhole, they seemed to be going down the ridge, toward Black Lake! I spoke in alarm to Kent, who confirmed what I saw -- but there was absolutely nothing we could do. Communication was impossible at that distance, and we couldn't call anyone for help; nor was it advisable to leave our camp to try to reach them in such dangerous terrain. I knew what that face looked like in daylight: steep, large, loose boulders, even large blank sections of rock face; at night, even with headlamps, it would be a nightmare to negotiate. But down they went, first left, then right...at times the lights would disappear, and I could only think the worst. I half expected one or both of them to suddenly begin descending rapidly, indicating a fall. Slowly but surely, they kept up their hesitant, zig-zag descent. When they were about half-way down, Kent and I could both hear cries of help; still, there was nothing we could do, other than pray for their safety.

Somehow though, unbelievable as it seemed at the time, after about an hour and a half, they were nearing the lower third of the black wall across the valley. The lights began to veer more to the right, indicating horizontal traversing on more level ground; this was good. They were going to make it! As the lights changed direction, now heading more directly into the eastern rim of the valley floor, we could just make out their voices: animated, strong, exhuberant. I couldn't make out the words, but I could pick up on what it meant: two young guys, probably inexperienced, but very excited to have survived a dangerous escapade in the mountains. Ah well! I thought, that's good; now all they have to worry about is hiking all the way out Glacier Gorge, at night, with their car probably parked at the Long's Peak trailhead -- a mere triviality, having cheated death! Kent and I congratulated each other on not having to participate in a rescue, and turned back into our bags, finally able to go to sleep. We never heard anything about the pair again; just another scary night in RMNP...

--Rick Casey

The Growing Case for Local Banks

2009-11-18T22:19:00.009-07:00

I read with interest an article in my local newspaper, The Denver Post, last Sunday, November 15, 2009, Too Big To Succeed? which was about how big banks are "too big to succeed" to help local businesses, and how we need to "revive the nation's broken community banking system." This was written by Henry Dubroff and John Huggins, who should both know the local business environment in Denver extremely well. Dubroff was formerly business editor of The Denver Post and the Denver Business Journal; he's currently editor at the Pacific Coast Business Times. Huggins is an entrepreneur and investor who twice served as economic development director for the city and county of Denver.

What was of interest to me is how their call for local, community oriented banking coincides exactly with similar recommendations I reading about several years ago (2006, 2007) in the works of David Korten and Michael Shuman. Both these authors have been decrying the disastrous effects of global capitalism on local economies for years, and I was thankful to them as my first discovery of authors who were able to validate and give shape to the vague but nagging feeling of dismay I'd had about the direction of local, and international, economic development for some time. At times, this led to bouts of profound emotional nausea, since there seemed no chance of escape from these global financial forces that were slowly but surely grinding the life and joy out local communities the world over by making them ever more dependent on multinational banks and chain stores.

So it was with no small amount of enjoyment to read how Dubroff and Huggins were bluntly stating that the "big banks" (national banks and financial institutions like Chase, Wells Fargo, CIT and the like) are simply ignoring the financing needs of small to medium sized companies at the local level. Because of their own misguided greed for short term profit and obscene executive paychecks, their failed balance sheets have sucked up the trillions of taxpayer bailouts with little or none of it passing through them to serve as loans to local banks, much less local companies -- all without the least evidence of shame or contrition on their part.

But what to do? Rather than try to change these behemouths, it seems more sensible, say Dubroff and Huggins, to start over with new local banks that do listen and respond to the needs of local businesses; in other words, "to bring back community-savings intstitutions that would harken back to the 'building and loan' of the past-World War II era." They then go on to briefly describe how this smaller, more locally-oriented banks would work, and their advantages over larger banks. However, their description any detail on how such a transition might get started was disappointing. The only quote from Dr. Sung Won Sohn, former chief economist at Wells Fargo, stated "...he thinks it would be essential for any new community banks to have 'enough products and economies of scale' to attractive to investors."

Huh? Why these authors chose to use a quote from a high level employee of one the very institutions that helped cause our current mess is confusing, to say the least; and Dr. Sohn's statement insinuates that such local banks would end up beholden to some vague, larger investment source...perhaps the very same larger banks we would like to rid ourselves of?

A clearer statement of how to the slavish relationship to larger banks is not hard to find. (In fact, I suspect this story has been told many times, ever since big banks have been oppressing communities.):

Every existing business support program needs to be reviewed and recast in community-friendly terms. Here are some goals policymakers might keep in mind: Make publicly supported incubators and one-stop small business shops off-limits to TINA. [Explanation of TINA below.] Use public money for educating entrepreneurs, whether through adult-ed classes or full-blown MBA programs, to emphasize LOIS [Explanation of LOIS below.] entrepreneurs. Fund studies that focus on the needs of LOIS businesses -- on indicators, assets, leakages, entrepreneurship, finance, policy reform -- and take advantage of a whole new generation of economists eager to do this kind of research. (Shuman, 2006, 168)

To explain TINA and LOIS: TINA means 'There Is No Alternative' and LOIS means 'Local Ownership and Import Substitution'. Both terms...

An even more powerful case for why local banks are needed comes from David Korten, who has a 12 point litany of urgent supplications of what to do here:

1. Redirect the focus of economic policy from growing phantom wealth to growing real wealth
2. Recover Wall Street's unearned profits, and assess fees and fines to make Wall Street theft and gambling unprofitable.
3. Implement full-cost market pricing.
4. Reclaim the corporate charter.
5. Restores national economic sovereignty.
6. Rebuild communities with a goal of achieving local self-reliance in meeting basic needs.
7. Implement policies that create a strong bias in favor of human-scale businesses owned by local stakeholders.
8. Facilitate and fund stakeholder buyouts to democratize ownership.
9. Use tax and income policies to favor the equitable distribution of wealth and income.
10. Revise intellectual property rules to facilitate the free sharing of information and technology.
11. Restructure financial services to serve Main Street.
12. Transfer to the federal governement the responsibility for issuing money.
(Korten, 2009, 122)

References

Korten, David C., Agenda for a New Economy: From Phantom Wealth to Real Wealth, Berrett-Koehler Publishers, 2009.

Shuman, Michael H., The Small-Mart Revolution: How Local Businesses are Beating the Global Competition, Berrett-Koehler Publishers, 2006.

The Last Hours of Ancient Sunlight

2009-11-17T09:38:00.003-07:00

I'm currently reading this eloquent book by Thom Hartman. Published in 1998, it is highly relevant, as it simply and lucidly paints the global environmental catastrophes we have collectively created. It is also truly informative; I'll be posting excerpts here from time to time.

(p 47) So trees, as it turns out, are the major source of recycled oxygen for the atmosphere. They are our planet's lungs. ... A fully grown pine or hardwood tree has a leaf surface area that can run from a quarter-acre to over three acres, depending on the species. Rainforest trees have leaf surface areas that run as high as forty acres per tree. [My note: that's the equivalent surface area of a forty acre lake!] ... A rainforest tree will draw three million [emphasis added] gallons of water up through its roots and release it into the atmosphere as water vapor during its lifetime. While it may seem this would deplete the soil of water, actually the reverse is true: trees draw water into the soil, the first step in a complex cycle which prevents land from becoming desert...

(p 49) The total amount of rainforest left on the planet [My note: in 1998] is about the size of the continental United States, and, every year, as area the size of Florida is cut down and permanently destroyed...

Which side is NPR on?

2009-11-16T23:40:00.003-07:00

A comment I made on NPR's website, the day after a particularly upsetting report about the lack of consumer savings in America....

I completely agree with the previous comment by Lawrence Jones, and am insulted that NPR would make this statement:"For nearly two years, the U.S. economy has been struggling with a recession brought on by excessive borrowing, both for home mortgages and consumer purchases." What planet are you guys living on? This current recession, the worst since the Great Depression, and which remains to be seen if it exceeds it in severity, was absolutely caused by Wall Street, particularly its inner sanctum of the most powerful investment banks, starting with Goldman Sachs. Insinuating that the blame lies with a lack of consumer savings is not just grossly unfair, factually wrong and morally depraved, it puts NPR on the side of the hated Wall Street villains who have inflicted this pain and hell upon millions of American households that have lost their homes. Which side are you on NPR??!!
November 17, 2009

Letter to Charlie Rose, news commentator

2009-11-11T11:47:00.002-07:00

Mr Rose,

I am watching your interview tonight with Ken Rogoff. While I appreciate his expertise as an economist, he is disappointing to hear for his lack of insight to our current situation. Nonetheless, I will certainly investigate his latest book for his perspective on past financial crises. However, he seems to only offer the same old tired saw: we must grow our way out of this crisis.

I wish to suggest this a failed economic paradigm. With 6.8 billion people on the planet, and projected to reach 9 billion within a generation, when are the mainstream economists going to wake up and smell the coffee? Unlimited economic growth by all is no longer viable. What will take its place?

In a nutshell: ecological economics. You should check it out, as I predict it will be the economics of the 21st century, if we survive as a species. I know I'm just an unimportant, unknown voice, but I have followed economic trends closely all my adult life, teach environmental economics at a local community college, and get incredibly frustrated by hearing such a lack on ideas in the mainstream media -- particularly when it's on more progressive shows such as your's.

Honestly, Amy Goodman on Democracy Now! gets economic commentators who are better at speaking the truth -- such as John Perkins whom she had on just this morning. His new book Hookwinked looks to be much more insightful and honest about the brutish reality of our harsh economic system.

However, if you would like to have a truly original, fresh and honest economic perspective on your show -- from a man who has seen the future, who is not trapped in old paradigms of the past and speaks from a lifetime of experience in American economic dealings -- you cannot do better than David Korten. If you have not heard of him, you should -- before it is too late, and the Great Unraveling has irreversibly begun.

Sincerely,
-- Rick Casey

Achieving Competition in the Local Loop

2009-10-18T15:03:00.012-06:00

Achieving Competition in the Local Loop:

The Case for Structural Separation

by Rick Casey

A non-technical paper submitted to the 1999 Student Paper Competition

sponsored by the International Communications Association

in the topic category Status of Public Policy

January 26, 1999

Table of Contents

Section 2.1 Events Prior to the 96 Act
Section 2.2 The Telecommunications Act of 1996
Section 2.2.1 The Components of Local Competition

Section 3.1 Market Trends
Section 3.1.1 Anecdotal Evidence
Section 3.1.2 Evidence from the FCC 2nd Survey
Section 3.1.3 New products and services from CLECs
Section 3.2 Policy Trends
Section 3.2.1 Trends among the ILECs
Section 3.2.2 Trends among State PUCs

Section 4.1 Reasons for and against separation
Section 4.2 The natural monopoly question
Section 4.3 The Illinois NOI

Section 5.1 Policy objectives of structural separation

Executive Summary

This paper examines the current state of competition in the local loop (as of fall 1998) from a public policy perspective. The thesis is that one of the central policy aims of the 1996 Telecommunication Act, to develop competition in the local exchange market, is failing. The reasons for this failure suggest how the policy could be revised. The history of the legal and regulatory changes concerning competition in the local exchange market is reviewed, which illustrates the difficulty of this issue.

Current data from the FCC and a survey of the literature document the lack of competition in this market since the 96 Act. The lack of competition and the numerous legal challenges from the incumbent local exchange carriers suggest reconsidering how the local competition regulations are constructed. The most radical solution (but perhaps the correct one) would be new legislation that requires structural separation of the regional Bell operating companies into separate companies that maintain the local loop infrastructure and that provide local exchange service.

Section 1: Introduction

In a way, opening the local loop to sustainable competition may be viewed as the culmination of regulation of the telecommunications industry. If successful, this will be a crowning achievement in the long, contested history of telecommunications regulation; however, success is far from assured. Indeed, it is still an open question if providing local telecommunication services is a normative, natural monopoly; if so, structural separation of the phone companies could become an issue once again.

In a bold and innovative move, the Congress ruled in the 1996 Telecommunications Act that the local loop should be opened up "...on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory." The FCC has attempted to carry out this mandate by defining what unbundled elements are and carefully guiding the state PUCs in the pricing of them. However, these policies have become mired in a host of difficulties, resulting in little competition in the local loop. This paperís thesis is that the policies meant to stimulate local competition are fundamentally flawed and need to be reconsidered. In particular, we will examine a proposed radical solution to the problem: structural separation of the Regional Bell Operating Companies (RBOCs).

Solving the local loop problem is the sine qua non for achieving the full potential social benefits of telecommunications. This is particularly true for the Internet, which is rapidly achieving de facto status as the only viable long term platform for a global network. Until end consumers, residential and business, enjoy a high bandwidth connection to the Internet, it will be hobbled and underutilized. It is also clear that an unfettered laissez faire market solution under current conditions could result in a very undesirable imbalance of access. This would have disturbing long term implications for creating social unrest as we enter the 21^st century in an overcrowded world. As such, overcoming the local loop barrier should remain a vital goal of both U.S. and foreign telecommunications regulatory policy.

Section 2: U.S. Telecommunications Policy and the Local Loop

Section 2.1 Events Prior to the 96 Act

Opening the local loop to competition was a fundamental justification underpinning the 1984 Modified Final Judgement (MFJ), the antitrust case that divested AT&T of its Regional Bell Operating Companies (RBOC). Twenty-two existing regional operating companies within the AT&T organization were grouped into the seven RBOCs to create companies of more competitive size. The other conditions that were considered necessary to apply to the RBOCs to foster competitive markets in local exchange services were:

Adopt price cap regulations to encourage innovation

Lower barriers to entry sufficiently to attract firms to compete

Prevent predatory pricing

Prevent cross-subsidization of services

Ensure that competing firms could offer services of equivalent quality

These conditions were the reason the RBOCs were prevented from being allowed to enter long distance service or from offering information services over their networks. The FCC and the Court wished to preserve these more lucrative markets for emerging competitors. It would be far easier, however, to keep the RBOCs out of certain markets than to entice other firms to enter theirís.

The Computer Inquiries were a series of three investigations by the FCC in 1970, 1980 and 1985 into how the use of digital computers should be regulated. This was caused by the inevitable conflict between the direction of telecommunication technology and the 1956 Consent Decree, where AT&T had agreed not to enter the data services industry. By the 1960s, computers were blurring the distinction between communications and data services. Though barred from entering "enhanced services" (i.e., computer-aided services), telecommunications equipment was becoming more digital for its superior characteristics; additionally, markets were demanding the new information features possible with digital systems. Naturally, the phone companies desired to enter these profitable markets, and it was inefficient from a technical standpoint to totally prevent them from doing so. Thus, the FCC was forced into regulatory decisions on whether and how AT&T and the RBOCs be allowed to enter the "enhanced services" markets.

The FCC and the state PUCs agonized over the dilemma of how to separate communication services from data services, which was necessary to detect cross-subsidization of services and discriminatory access. This was evident in how their decisions changed over the course of the three inquiries. The First Computer Inquiry (1970) ruled that all telephone companies wishing to offer "enhanced services" (i.e. data processing) must do so through separate business organizations on the basis that cost allocation accounting methods were insufficient to detect cross-subsidization and discriminatory access. In the Second Computer Inquiry (1980), the FCC continued its structural separation policy, but restricted it to the Bell companies and exempted all other carriers, which went unchallenged. After the 1984 divestiture, AT&T was free to enter any market, but the divested RBOCs could still not offer enhanced services because they had inherited AT&Tís monopoly power for local telephone service. In January 1984 the FCC began investigation into how the Computer II rules should be applied in light of the AT&T divestiture. The BOCs naturally argued that structural separation was unnecessary, which the FCC rejected. Structural separation, the FCC stated, was the only effective means of detecting and preventing cross-subsidization by the BOCs, and protecting its captive markets from monopolistic pricing. Thus it was quite a surprise when the FCC issued its Third Computer Inquiry in August 1985 that they reversed their requirement for structural separation for the RBOCs, based on the following reasoning:

Structural regulation was too costly compared to its benefits

It was an inefficient use of resources from a technical standpoint

There were insufficient competitors offering similar services

Divestiture had lessened the BOCís ability to cross-subsidize

Political pressure and state PUCs could keep down local phone rates

The threat of discriminatory access had diminished

Growth of local competition to bypass the local exchange had significantly increased.

The Third Computer Inquiry was swiftly challenged in the California vs FCC case, brought by a broad coalition of industry groups and state PUCs, united in their opposition to the RBOCs to enter the enhanced services market without structural separation.The court decided in their favor, reversing the FCC Order on many points because the FCC was "arbitrary and capricious" in its actions and did not provide sufficient evidence for its decisions. However, the court let stand the FCC order not to require structural separation on the grounds that the record supported the FCCís claim that structural separation would be too costly and that technical advances improved the ability to detect discriminatory access.

Section 2.2 The Telecommunications Act of 1996

The 1996 Telecommunications Act (hereafter, the Act) was the FCCís break with the past. It ended an era of shielded monopolies to provide phone services, and began an era of open competition ñ at least, such was the goal. How was this to be accomplished? The FCC envisioned three paths of entry into local markets by competitors:

full facilities-based entry

purchase of unbundled network elements (UNEs)

resale of the incumbent's retail services

None of these avenues have developed to any significant extent, as we will see. This three-pronged strategy for opening competition in the local loop is part of a long range vision of an intelligent, open network of the future, called ONA, or Open Network Architecture. By stimulating local competition through UNEs, the FCC aims to prod the ILECs towards innovation towards the distant goals of ONA.

Section 2.2.1 The Components of Local Competition

The principle components of the 96 Act pertaining to competition in the local loop are Unbundled Network Elements (UNEs), Open Network Architecture (ONA) and the Local Competition Order.

Unbundled Network Elements are meant to be technically feasible points of interconnection through which competitors can reach consumers. They are defined as:

Specfic Interconnection Points in UNEs

Network interface devices

Local loops

Local and tandem switches

Interoffice transmission facilities

Signaling and call-related database facilities

Operations support systems

Directory assistance facilities

This was an ambitious attempt by the FCC to explicitly instruct the ILECs how new competitors requesting access to the phone network be allowed to do so. In practice, this has proven difficult, as we examine in Section 4.

Open Network Architecture is a regulatory goal of the FCC first mentioned in Computer Inquiry III. It is a grand vision of a uniform, open, interconnection network in place of the previously closed, isolated PSTN. Though still a lofty future goal, ONA is quite significant now because it grants the RBOCs "structural relief" from offering enhanced services through a separate corporation. This relief continues as long as the RBOCs file plans on a regular basis with their customers and the FCC about how they plan to open their networks over time. The first plans were filed in February 1988; descriptions of ONA services are published periodically by Bellcore. The purpose of ONA is to unbundle network services located at the switch to allow their use by competing firms wishing to interconnect. In practice, this also has not worked out well. The FCC has allowed ONA requirements to become diluted upon petition from the RBOCs. As such, ONA is not much of an issue until the problems of establishing local competition have been settled, although they should be discussed in parallel for technical compatibility as local competition evolves.

The Local Competition Order is the FCCís implementation of the part of the 96 Act directing the opening up of local competition. This is the fundamental document containing the specific details by which the FCC directed the state PUCs to implement the new law, including technical details concerning interconnection, resale of services, UNEs, obligations of the LECs, reciprocal compensation rules, pricing guidelines, and other details. It was a remarkable feat to have published such complex regulations barely eight months after the 96 Act. However, such haste may be part of the reason the Order has had such difficulties in its implementation, as discussed below.

Section 3: Current State of Local Competition

Section 3.1 Market Trends

Section 3.1.1 Anecdotal Evidence

Since the 96 Act, there is mounting evidence that its policies for encouraging local competition are failing to produce results:

...outside of a few small start-ups...the leasing approach just hasnít worked out as planned...because, the would-be providers [of local exchange services] complain the local phone monopolies charge too steep a price to lease the lines.

The Telecom Act of 1996 was supposed to promote competition, thereby benefitting consumers. Instead,...big businesses ñ not consumers ñ are the only real beneficiaries of the Act...

The Telecommunications Act of 1996 was designed to open the local loop to competition, but progress toward that end has been slowed in a regulatory, legal, and technical morass.

The real activity among CLECs since the 96 Act has been in mergers and acquisitions, driven by the need to become as large as competitor as possible before entering the ILEC local exchange markets. But such activity is a tempest in a teacup compared to the market reality: the total market revenue of all CLECs in 1997 was $3.7 billion compared to the $100 billion total market. Moreover, the structure of the CLEC market itself is quite skewed. The top three firms ñ WorldCom, TCG and MCI Local Services ñ held 44 percent of revenues, and just 12 companies created 70 percent of CLEC revenues.

Given these results, the following considerations come to mind:

Has enough time elapsed for the policies to have had their effect?

If not, how much more time will be necessary?

What kind of data should be collected to track the effects of the policy?

If enough time has passed, how should the policies be corrected?

Question 1 turns on economic conditions and investment cycles: have economic conditions have been favorable for investment, and has the market for investment in local exchange service passed through enough cycles to observe its behavior? Generally, economic conditions in the U.S. have been very good between 1996 and 1998; the is overwhelming evidence in the GDP growth rates, low inflation, low unemployment and performance of telecommunication stocks speaks to that. The essential nature of local phone service invalidates a business cycle model for estimating investment in its infrastructure. Thus, Question 2 is unavoidably political in nature; enough time will have passed for observing a policyís success or failure when enough people feel the impulse to act its current results. Question 3 is quite legitimate, and the FCC is attempting to address it, as we discuss in the next section. Question 4 is addressed in our conclusion.

Section 3.1.2 Evidence from the FCC 2^nd Survey

To better understand how competition is evolving in the local loop, the FCC began to solicit data on a voluntary basis from telephone companies using a short survey form. The FCC is conducting surveys of local competition because it

...requires timely and reliable information on the pace and extent of development of local competition in different geographic markets to evaluate the effectiveness of decisions taken to implement the pro-competition provisions and to achieve the universal service goals of the 1996 Act.

The surveys are an attempt by the FCC to measure quantitatively the extent of competition between CLECs and ILECs in the local loop. Three surveys were conducted between February and October 1998. Since the data are voluntary, the responses were somewhat erratic, but the FCC has collected the raw data into several files and made them available at their website. The file from the second survey that contained more responses than others was chosen to summarize, shown in the following table. These data represent four of the five ILECs and three major CLECs, a total of over 118 million phone lines, creating a regionally diverse and substantial sample of the nation's total phone lines.

		TOTALS	PERCENTAGE OF TOTAL LINES IN SERVICE
Total Lines for Resale	Residential	596,548	0.50%
	Non-residential	1,021,155	0.86%
	Total	1,617,703	1.36%
Unbundled Network Element Lines	Residential	0	0.00%
	Non-residential	11,612	0.01%
	Total	161,928	0.14%
Total Lines in Service	Residential	67,239,144	56.58%
	Non-residential	34,411,924	28.96%
	Total	118,833,323	100.00%

As the data show, resale services and UNEs are present in less than 1 percent of the serviced lines. The highest category is in business resale services, as one would expect since this is the easiest path of entry for a new competitor ñ and here the total is just 0.86 per cent of all lines in service in this sample. CLEC competition has just 0.50 per cent of residential lines. This is hard evidence that local competition has barely begun, indeed almost non-existent, at a national level at this time. Though these data are not a statistically rigorous survey, the sample size is certainly sufficient to indicate the character of the market.

Section 3.1.3 New products and services from CLECs

There is limited evidence that new products and services are appearing that would make facilities based entry easier for CLECs. This is indicative that, over time, competitive pressures can provide for innovation, just the kinds of results policy makers were seeking in the 96 Act. New products for CLECs alone, however, are clearly not having any significant impact in creating competitive conditions in the local loop, except perhaps for tapping business markets in large urban areas. The recent purchase of TCI, the nationís largest cable company, by AT&T signifies the most serious attempt thus far by a long distance carrier to enter the local exchange market; however, no local exchange services are expected from this merger until late 1999 at the earliest. Until competitive conditions exist on a nationwide scale, however, we can expect few product and service innovations for society at large. This market evidence is supported by theoretical research that suggests CLECs will adopt strategies that delay such investment beyond what is socially desirable.

Section 3.2 Policy Trends

Section 3.2.1 Trends among the ILECs

The ILECs have attempted to evade the requirements placed on them under 96 Act, from avoiding interconnection to entering interLATA long distance services ; a veritable forest of lawsuits have been filed by ILECs at what seems every possible opportunity. Such actions suggest a conscious strategy of the ILECs is to avoid the 96 Act by all legal means. In the interest of not wasting resources on legal matters, it would certainly seem that the FCC would benefit the country by revising the local competition orders to reduce or preempt legal challenges from the ILECs.

Section 271 is the part of the 96 Act that stipulates the conditions that ILECs must satisfy to demonstrate that competitive market conditions exist in their local areas. They are not allowed to enter the long distance (interLATA) markets until they have met this requirement. To date, none of the ILECs have yet qualified, though many applications have been filed. For example, Bell Southís recent application for qualification was denied and it highly likely the same story holds true for every ILEC in the country. It would indeed seem the ILECs find it either impossible or highly undesirable to satisfy the requirements, and as such represent a significant problem with local competition policy.

Section 3.2.2 Trends among state PUCs

The FCC has adopted a difficult strategy to implement the Local Competition Order in that it is dependent on the states to implement their order, yet contains many specific guidelines. This has resulted in uneven implementation of the Act across states, placing the ILECs in very difficult situation of trying to operate across states and yet comply with varying regulation. One of the more striking examples has been the direction taken Wyomingís PUC by allowing in-state pricing to rise to unprecedented levels, provoking local consumer protest.

Section 4: The Case for Structural Separation

Section 4.1 Reasons for and against separation

Given the results of the past two years, one must conclude that competition in the local loop is not being achieved at an acceptable pace. From current observations, there is nothing on the horizon that will cause such conditions to change in the foreseeable future; the danger is that current policies could freeze competition in the local loop indefinitely. The "local bypass" envisioned by cable and wireless services has not had a significant effect in local exchange markets. The reason for this, of course, is the control that the ILECs have over essential resources in the local loop. Though the 96 Act attempted to create competition in the local exchange market with explicit instructions how the ILECs must allow interconnection, it would appear these are necessary but not sufficient conditions to foster competitive market conditions. The current situation is an undesirable morass of regulatory challenges, confusion at the state PUC level, and rising consumer dissatisfaction with local service, particularly faster Internet connections.

Overly complex regulations suggest that an initial premise was allowed into the rules that should not be there. In this case, the faulty premise appears to be the dual role of engaging in regulated and unregulated services which the ILECs have been allowed to play in the 96 Act and its subsequent implementation. This was, of course, what the ILECs desired and lobbied for during the construction of the legislation: to maintain their common carrier and universal service responsibilities, but open their networks just enough to be considered competitors instead of monopolists. This approach seems fundamentally flawed. It creates a conflict of interest for an ILEC to favor its own retail services and discourage its wholesale services to CLECs desiring interconnection.

Under the 96 Act and the FCCís Local Competition Order, the ILECs have forestalled competition in the local loop through legal challenges, have been able to feign cooperative behavior with the CLECs due to the complexity, vagueness and incomplete nature of the guidelines, while at the same time claiming competitive conditions exist and petitioning for access to long distance markets. In the meantime, society at large is losing out on the benefits that telecommunications technology could offer, a tremendous opportunity cost.

The question of structural separation for the RBOCs bears reconsideration. Structural separation of the ILECs, of course, is not to be taken lightly, as the separation of AT&T in 1984 showed. Inflicting this on the ILECs could have negative results in terms of consumer confusion, disrupted services and or higher prices for local service; however, much has been learned on all sides since the 96 Act. If properly done, it is possible that structural separation could more effectively achieve the elusive goal of competition. Obviously, such a drastic action should not be attempted without a thorough analysis that clearly justifies it. Any reasonable analysis considering structural separation of the ILECs would need to examine the following factors that would argue against separation. This paper did not focus on this area, but certainly these and other possible factors would need to be considered:

The cost to the ILECs and special financing considerations

Effect on Universal Service Fund for loss of cross-subsidization

Consumer confusion

Disruption of service

Section 4.2 The natural monopoly question

Scholars are divided on the question whether local exchange carriers constitute a natural monopoly. Prior to the 96 Act, there was enthusiastic support for the idea that simply legislating competition would unleash pent-up competitive forces in the local exchange market. This school of thought dismisses the idea that the local loop is a natural monopoly:

When coupled with unbundling of the local exchange, removal of the interLATA restriction will create a framework that allows market forces to determine whether services are offered by an integrated or a nonintegrated entity and how different services are priced.

Others are not so sure, particularly the CLECs trying to enter the LEC markets for the last two years:

...perhaps the only way [the CLECs] will get equal access to the local networks...[is to] create ... a separate wholesale operation that would sell or lease parts of their local networks to all carriers, including their former parent.

One characteristic of a natural monopoly is that it is the outcome of an unregulated market. A simple mental experiment suggests the RBOCs are indeed natural monopolies. Imagine that in the next instant that all RBOCs have all restrictions on them lifted, including access to long distance markets. Could anyone seriously doubt that the RBOCs would use their control of local access to their own advantage, refuse interconnection to competitors just as AT&T did earlier in this century?

Another characteristic of a natural monopoly is that it is the most efficient market structure. There is a case to be made that this is true for the local loop. No one realistically expects new competitors to lay new lines to connect end consumers to the CO (Central Office). The sunk investment in the physical plant of the local loop is perhaps the greatest barrier to entry the ILECs possess. Since it would clearly be inefficient for new entrants to install new lines, this supports the natural monopoly hypothesis.

If the local loop is a natural monopoly, then separating the local exchange into distinct retail and wholesale operations, where the wholesale operation remains a regulated monopoly, should create more competitive conditions for CLECs wishing to enter the market. This experiment may have already been successfully demonstrated. Southern New England Telecommunications Corporation, the ILEC serving most of Connecticut, voluntarily split itself into retail and wholesale entities in order to qualify for access to interLATA markets. Moreover, they appear to be doing quite well, as they were recently acquired by SBC Communications Inc. of San Antonio, Texas. This example of structural separation in action is strong evidence the approach can work, and should be studied for its research contributions to any structural separation order.

The "final mile" in the local loop ñ commonly the twisted pair wiring connecting consumers to the CO ñ is the singlemost part of the system that is most clearly qualifies as a natural monopoly. How far into the switching network the natural monopoly dividing line should be drawn for purposes of structural separation is difficult to answer, no doubt; but this appears be the weak point in the FCC mandate attempting to create competitive conditions. It simply did not go far enough in sorting out the knotty technical details involved. The legacy OSS systems which are so critical for customer service and support is an item particularly mentioned by protesting CLECs. Converting legacy OSS systems would be costly indeed, and could only be done gradually over time, but if such issues are the real barriers to local competition, then that fact needs to be faced. Even if such conversions were not enforced, at least the reasons for the lack of local competition would be better understood.

Section 4.3 The Illinois NOI

There is currently an open Notice of Inquiry by the Illinois Commerce Commission to investigate the question of requiring structural separation of Ameritech Illinois. Very little has been decided at this point, and the staff of the Illinois Commission have not taken a stand on many of the questions they have raised. They are proceeding cautiously on this explosive topic.

Ameritech (unsurprisingly) strongly opposes the measure on legal and policy grounds, arguing that the FCC does not have the legal authority to order such separation, that the 96 Act never intended this, that the plan in not financially viable and, in general, is poor public policy. The comments of AT&T, WorldCom and MCI, among others (also unsurprisingly) strongly favor the notion, but not as proposed by LCI, and go into detailed suggestions for improving how structural separation should occur. In general, the comments supporting the NOI suggest that

local competition under current policy is a failure

structural separation is needed to remove the conflict of interest on the part of the ILEC offering interconnection to CLECs

structural separation is highly complex, and will require thorough analysis of where to divide network components.

If the Illinois Commerce Commission proceeds beyond the NOI stage, it will be interesting indeed to observe what transpires. Should structural separation proceed and produce the desired results, this would be strong evidence for the FCC to launch its own NOI for structural separation at the national level for all ILECs.

Section 5 : Conclusions

Section 5.1 : Policy objectives of structural separation

The following points are suggested as improvements to local competition policy, based on the experiences of the past two years. These are not suggested to be a final answer to the difficult questions involved, but a beginning framework for reexamining the 96 Act and the Local Competition Order.

Remove the monopoly power of the ILECs through total structural separation into retail and wholesale entities (no shared facilities, contracts, employees, brand name, etc.) where the wholesale entity maintains local loop infrastructure and the retail entity markets local exchange services.

Simplify and reduce the need for regulation by clearly separating regulated and unregulated activities between the wholesale and retail entities.

Conduct thorough analyses of the complex technical issues involved, providing realistic and adequate deadlines for this.

Expedite competitive entry by removing the ability of the retail entity to inhibit CLECs access to customers.

Use of cost-based (TELRIC) price cap pricing for the wholesale entity.

Separate the retail and wholesale operations where it makes technical sense, not gloss over this vitally important aspect.

Once structurally separate, grant the retail entity immediate access to interLATA markets as an incentive to achieve structural separation.

Establish rules for measuring competitive market conditions, allowing pricing retail services to be deregulated when this occurs, but re-regulated if competitive conditions lapse.

Regulate pricing of the wholesale services using price caps.

Strive for rules that encourage high quality customer service by the wholesale entity.

Include consideration of universal service, access charges and reciprocal payments.

The final aim of the Telecommunications Act of 1996 was to reduce the need for regulation by achieving true competition. Achieving true competition has turned out to be more difficult than expected, but that should not deter policy makers and the market participants from recognizing mistakes and correcting them in pursuit of this final goal.

Epilogue

As this paper was in final editing for submission, the Supreme Court made two very significant decisions concerning local exchange market competition that deserve mention (the rulings were so recent the case texts and full citations could not be obtained). On January 19, 1999 the Court ruled against SBC Communications, U S West, and Bell Atlantic against a challenge they had brought against entering the long distance market. On January 25, in an even more significant case, the Court reversed a circuit court decision that had been brought by "the Bells and GTE" against the FCC, claiming the FCC had overstepped its authority in drafting local competion regulations. Such definitive rulings from the highest court indeed suggest that our hypothesis ñ that competition in the local loop deserves careful regulatory reconsideration ñ is necessary and correct. A laissez faire approach handled only by the private sector, such as the ILECs have been arguing in case upon case, is simply inappropriate to be the sole governing force of the vital public nature that telecommunications networks will play in the future of our country.

GLOSSARY

Belcore A reseach institute that serves the ILEC community, which resulted from the 1984 MFJ.

CLEC Competitive Local Exchange Carriers. Any Local Exchange Carrier that is not an Incumbant Local Exchange Carrier.

ILEC Incumbent Local Exchange Carrier. All RBOCs were defined as Incumbant Local Exchange Carriers by definition in the MFJ.

IXC Interexchange Carriers. Firms offering long distance service between LATAs.

LATA Local Area Transport and Access Area. The boundaries within which the RBOCs could offer local phone service, beyond which was considered long distance.

LEC Local Exchange Carriers. Firms offering local phone service within a LATA.

MFJ Modified Final Judgement of the historic 1984 anti-trust case that split AT&T into a long distance company and the RBOCs.

NOI Notice Of Inquiry. An official announcement made by the FCC or a state PUC about a policy change under consideration in order to solicit comments from affected parties.

OSS Operations, Systems and Support. Hardware/software systems created and still maintained by Bellcore for the ILECs through which they enter new customer orders and provide customer service.

PSTN Public Switched Telephone Network

RBOC Regional Bell Operating Company. The seven holding companies (now five) which operated AT&Tís local phone service, divided along contiguous geographic regions, and which control access to long distance services.

TELRIC Total Element Long Range Incremental Cost. An economic method of estimating future ("forward looking") costs of industrial equipment, used in all telecommunications cost models.

APPENDIX I

The 1996 Telcommunications Act

The part of the Act which defines unbundled network elements is in ß 251(c)(3), quoted as follows:

UNBUNDLED ACCESS. The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.

APPENDIX II

This appendix contains a sample form of the FCC Local Competition survey and a summary of the data collected with it from August 31 to October 20, 1998. The form is an Excel spreadsheet which respondents replied to voluntarily. (See the Websites appendix for description of the file obtained from the FCC website.) The summary file is printed in Appendix 2. What was summarized are lines 3, 4 and 6 from Part B as shown in the survey form, quoted here:

B. Lines you own or lease from a non-communications carrier that you provide to another communications carrier, categorized by:

3. Total Service Resale, as defined in 47 U.S.C. ß251.

4. UNE, as defined in 47 U.S.C. ß251.

5. Other arrangements.

6. Total lines in service.

Answers to these questions are the vital evidence of local competition as defined by the 96 Act. Question 5 was omitted in the summary because it contained no data. The horizontal lines 1.B.3-6 in the survey were transposed to columns in the summarized data shown in Appendix 2 in order to view the data with one company per row.

References

Aron, Debra, Ken Dunmore and Frank Pampush. "The Impact of Unbundled Network Elements and the Internet on Telecommunications Access Infrastructure". unpublished document. Harvard Information Infrastructure Project. December 4, 1997. http://ksgwww.harvard.edu/iip/iicompol/Papers/Pampush.html

Chan, Shirley. "NorthPoint Goes Turbo Speed With Lucent Laying the Groundwork". Lucent Magazine. Oct 1998. Corporate publication from Lucent Technologies, Inc.

Gai, Silvano. Internetworking Ipv6 With Cisco Routers. McGraw Hill . 1998.

Krattenmaker, Thomas G. Telecommunications Law and Policy, 2^nd ed. Carolina Academic Press. Chapel Hill, NC. 1998.

Mehta, N. "Cut The Connection". Wall Street Journal. Sept 21, 1998.

Noll, A. Michael. "The Telecom Act of 1996: Two Years Later." Telecommunications Online. July 1998. <http://www.telecoms-mag.com/issues/199807/tcs/noll.htm>

Perrin, Sterling. "The Market: Prospects, Problems and Opportunities." Telecommunications Online. September 1998. <http://www.telecoms-mag.com/issues/199809/tcs/perrin.htm>

Teece, David J. "Telecommunications in Transition: Unbundling, Reintegration, and Competition" MichiganTelecommunications Technical Law Review. 4 (1995). http://www.law.umich.edu/mttlr/VolOne/teece.html

Vogelsang, Ingo and Bridger M. Mitchell. Telecommunications Competition: The Last Ten Miles. The AEI Press. Washington, D.C. 1997.

Wall Street Journal. "AT&Tís Cuts Are Just the First Shot in the Telecomm Wars". Jan 4, 1996. page A2.

Ziegler, Bart. "What Ever Happened to Competition for Local Phone Service? Itís Simple Economics". Wall Street Journal. Sept 21, 1998.

Websites

http://www.fcc.gov/ccb/local_competition/survey/responses

The FCC webpage for responses to three surveys by the Common Carrier Bureau on the State of Local Competition. My data were contained in file lecpub98.zip, the responses to the Second Survey received between 8/31/98 - 10/20/98. Of the seven or so files representing disparate responses collected in this period, this file appeared to contain the most data, and so was selected to summarize. The other files could be included later, but I doubt they would change the general results of the summary.

http://www.icc.state.il.us/icc/Telecom/98NOI

The site for the Illinois Commerce Commisionís Notice of Inquiry concerning the Structural Separation of Ameritech Illinois, plus numerous comments filed by interested parties.

Should Wolves Be in National Parks?

2009-10-02T21:08:00.003-06:00

Ok, first question: have wolves killed people? Answer: barely. The evidence I found tonight on the web is this: prior to 1900, when wolves were much more numerous, there is ZERO recorded deaths. Since then, there was ONE recorded incident of human death from wolves in 2005. Here is where I found this information:
http://www.conservationnw.org/pressroom/press-clips/wolves-and-humans-what-the-experts-say

Ellen Ruppel Shell: meet The Great Turning

2009-08-14T10:42:00.006-06:00

As I was reading a somewhat recent New York Times Book Review (July 19^th that is; they do tend to pile up on my Sunday morning breakfast table sometimes), I discovered a courageous new voice in the cause for human decency in the face of global capitalism, Ellen Ruppel Shell. Her new book, Cheap: The High Cost of Discount Culture, looks like great reading, and I'll have to put it on my (too long) list of must-reads. After pulling up a few of her online articles at The Atlantic, my impression of courage was confirmed: she takes on some tough cookies, like Megan McArtle (who sounds like a most unpleasant person that I would rather avoid.)

However, I was most struck by a telling comment towards the end of the review by Laura Shapiro:

Ruppel Shell doesn't conclude with any grand ideas for reshaping the world's economy, ...

I would like to connect Ms. Shell's excellent work with that of Mr. David Korten -- because he does have grand ideas for reshaping the world's economy -- which mesh perfectly with her efforts at improving the world.

I'll be brief, as this is not meant to be an exhaustive or comprehensive. As an example, take the shrimp farming boom in Thailand that, she reports, supplied the cheap shrimp all-you-can-eat deals in American restaurants beginning back in the 1980's, and its eventual demise into "...environmental degradation, human rights abuses and violence that left millions destitute."

The ultimate cause for this kind of economic exploitation is excessive access to global capital by unscrupulous investors who crave quick profits over human welfare. If you have read David Korten's work, starting back in 1996 with When Corporations Rule The World, you would know how he, for one, is intimately familiar with this phenomenon. But what to do? That's the rub; for the force and ingrained culture and sheer power of global capitalism -- politically, militarily and financially -- seems impossible to fight.

But fight it we must, or we cannot live with ourselves. And I have come to agree with Korten's summation of the problem. It is futile to attempt to "fix the system" by fighting global capitalism in the courts or legislatures all over the globe, where "the blessed unrest" is doing just that right now. The only real solution is to remove the fuel source for this cancer: the money supply. There should begin a movement in all countries all over the world to take back the legal right of banks to create the money supply and return to where it belongs: to the government. Of course, the temptation for corruption in weak sovereign governments will always be there, to print money for selfish ends. However, in cultures with a stronger history of more orderly government (and a truly free press), there are sufficient social pressures to provide an honest governmental service: to have the money supply serve the real needs the of the real economy -- not the needs of the global elite. I'll be doing my best to help it -- along with Mr. Korten's vision of where our global civilization must navigate, or perish: The Great Turning. Please check out his work; I believe you'll be glad you did.

ARRA's Economic Forecasts Disparaged

2009-08-03T16:34:00.003-06:00

[This was an email I sent to Mark Cavanaugh, director of Colorado's Economic Recovery Team, and to Greg Griffin, the Denver Post reporter who wrote the story, on Monday, August 3, 2009. I was incensed over the closing comment in the story, for reasons I address below.]

Dear Mr Cavanaugh,

I was disappointed to read that the Denver Post's Sunday edition front page story ended with this quote attributed to you:

I have no idea where that number came from...I think it was pin the tail on the donkey.

-- Mike Cavanaugh, Director of Colorado Economic Recovery program, page 6A, Denver Post, Sunday, August 2, 2009,
in referring to how the Obama administration developed its estimates of the number of jobs created by ARRA, the American
Reinvestment and Recovery Act

This was disappointing to read because (1) in the previous paragraph it was explained how the federal economists made the estimate, (2) it put you in the position of belittling and undermining the very mission of the Colorado Economic Recovery program which you are directing, and, finally, (3) disparaging the economics profession in general.

Don't get me wrong: I don't have much respect for economic forecasts either. However, I have worked as a professional economic consultant and have taught undergraduate economics for some years, and know well the obstacles that economists are up against when they are expected to deliver a forecast -- but not given any reliable first-hand data sources on which to base them. So they do the best they can with what they've got -- which often is not very much. The problem lies not so much with the economics profession itself, or its forecasting methodologies; rather, it is much like the old computer addage: GIGO, or Garbage In, Garbage Out. In other words, if the politicians and governmental administrators are unwilling to invest in better economic reporting systems, they will be forced to rely on such "donkey tail" forecasts; it is hardly the fault of the economists forced to work with the poor data.

It would not be surprising to hear that your remarks may have been taken out of context, and misrepresented by the reporter who wrote this piece; but, at any rate, it was an unprofessional and negative remark about a very serious topic. I've been unemployed myself since the end of last year, and sincerely hope that ARRA will have its intended effect.

Very sincerely,
Rick Casey

Wells Fargo Is Stealing Me Blind! (or just blindly stealing?)

2009-07-09T12:45:00.033-06:00

This little diatribe is about an economic fact of life that's been bugging me for some time now as a result of the mortgage crisis. Let me describe this a bit and see if it might bug you too...right where it hurts, in your wallet...

Here's the simple logic, step by step: (a) the mortgage boom (which happened for whatever reasons, however nefarious) caused housing prices to rise to unforeseen heights during the Nineties and into the first years of the 21st century, causing (b) an asset bubble. This meant that many (most?) homes purchased in this period were at (historically) inflated prices. (It made no difference why the home was bought, for speculation or occupation, of course.) However, (c) the boom ultimately crashes due to the financial crisis, initiating the biggest recession since the Great Depression (which has a long time to yet play out), with consequent unemployment, causing (d) a wide and prolonged rise in foreclosures across the country, more intensely in some areas than others, resulting in, of course, (e) the asset bubble to finally burst, resulting in the current dramatic devaluation of housing market prices, again more intensely in some areas than others.

Now why should this bug me, you're thinking? Because I'm one of those people who bought a home in this period, who is now unemployed (due to cutbacks in federal funding for scientific research by NIH, thank you very much George W. et al), and struggling to hang on to my home.

What is bugging me is how much I paid for my home, how much it is worth now, and just how little I expect Wells Fargo, my mortgage bank, to care; but I'm trying! I have an application in to them for a "mortgage loan modification" as we speak. And here's the reason: I paid $143,000 for my two bedroom condo is a nice, but definitely middle class, neighbor in Lafayette, a suburb between Boulder and Denver in 2003 -- probably at the height of housing boom. With hindsight, yes, it was not a smart time to buy; but at the time, I had been renting all my adult life, I'd just graduated from CU-Boulder with a graduate degree, the economy was still in the final overheated phase of the financial boom, and I needed a place to live -- it was the time in my life to buy. Boy, was I in the wrong place at the wrong time...

Last week I received my 2008 assessed value for my home: as of June 30, 2008 it was $133,100. Which means a decrease in value of $9,900 in the last five years, or a drop of 6.9%. Acutally, I doubt I could get $120,000 for it now, a drop of 16%. This on top of being unemployed since the end of last year. I'm barely making my mortgage payments with my unemployment benefits.

But does any of this make a difference to Wells Fargo? Not a bit; all they're worried about is foreclosure, which would stick them with this now-lower-value property -- and a lot less bucks to them over the life of the loan. So of course they send me a weekly barrage of mail warning me about being late with mortgage payments (gee, sorry I'm late, my cash flow is totally dependent on my unemployment benefits now), where to seek "credit counseling" and even warnings about how "short sales" of foreclosed homes dumped on the market work. Hey, do I need this? I'm a little late with my mortgage payment each month, and WF starts acting like a paranoid grandmother -- give me a break. (I called them to ask if they would change the date my monthly payment was due; no way, they said, because it's "fixed by my mortgage." Aww, give me a friggin' break...)

No, what is really bugging me about this is what happens when you take my situation, which is all too common in the country right now, and scale it up to the macroeconomic level. Observed from that perspective, the situation begins to look like a massive wealth transfer from the low to middle class to the financial institutions who own the mortgages (and, of course, to the higher level management that runs them. ) Because few, if any, of the mortgage banks are reducing the principle on the loans of these homes that were purchased during that time, meaning that the homeowners who are stuck with the bill will be paying back much more than the home is worth now, or probably ever will be worth again. Which is why I feel like my mortgage bank is blindly stealing from me. Of course, they will claim they can't be blamed for how housing prices rise and fall (or can they?), and it's not their fault that the balance I still owe on my place ($127,554.63) is probably more than the price at which it would currently sell.

No, I suppose not. This is all just as legal as it gets. But it's still unfair, and it's still a massive wealth transfer, and it's also beginning to be noticed by others. In the July 5, 2009 issue of the Sunday New York Times, reporter Gretchen Mortgenson aptly pointed out that "Foreclosures remain one of the great financial ills for the economy." And as one of her sources describes just the point that's bugging me: how few mortgages are being "modified" and how few loans have had anyreduction in principal...and how irrational this action is on the part of the big mortgage banks; let me quote at length:

Given losses like these, Mr. White said he was perplexed that lenders and their representatives were resisting reducing principal when they modify loans. His data shows how rare it is for lenders to reduce principal. In June, for example, 3,135 loans — just 17.2 percent of the total modified — involved write-downs of principal, interest or fees. The total loss from these write-downs was just $45 million in June.

And yet, the losses incurred in foreclosure sales involving loans in the securitization trusts were a staggering $4.59 billion in June. “There is 100 times as much money lost in foreclosure sales as there was in writing down balances in modifications,” Mr. White said. “That is not rational economic behavior.”¹

And there you have it: the mortage banks stealing from the middle class, claiming that this is just blind economic forces at work...or are they? I think it's only fair that the mortgage banks be forced to share in the economic pain of readjustment, and be given fair, transparent, national standard guidelines -- and be required by force of law to obey them -- by how to reduce principal balances on any mortgages purchased during this bubble in housing prices, until housing payments are brought back in line with income levels in this country.

I think this in only fair particularly since the mortgage banks were so complicit in creating this situation; but that's another story...

¹Gretchen Morgenson, So Many Foreclosures, So Little Logic, New York Times, June 5, 2009, page BU 1.

I Believe in the Sustainability Movement

2009-02-19T13:09:00.002-07:00

[This essay was submitted, and accepted, to NPR's "This I Believe" radio project on January 20, 2009. I wanted to summarize my personal vision of how the sustainability movement is transforming society, based on my experiences in the economics field and growing up in America in the Sixties. I started this essay in November 2005 but it took the Obama campaign and election to inspire me to finish it. I believe we are observing a global paradigm shift that will force out the long-broken economic model of neoclassical economic development which could, potentially, result in new methods of sustainable development that unites the world in a culture that is more at harmony with nature and fosters true community and human development. I want to help make that shift happen.]

I Believe in the Sustainability Movement

I grew up in the turbulent Sixties. When I started college in 1972, the world was a chaotic mix of the civil rights movement, political assassinations, Vietnam, the nuclear weapons race, hippies, Watergate and Woodstock. In college, I dedicated my university education to understanding social and environmental problems at a deeper level, searching for something to believe in; but it wasn't until graduate school that I discovered my intellectual calling: economics. It showed how the "real world" really worked, and held the promise of not only explaining the world, but, I believed, how to improve it.

After graduation, I tried teaching economics at a community college. I enjoyed connecting with my students, helping them to better understand this complex world. But after a few years, as I read and thought more deeply on my own, it became increasingly difficult to believe conventional economic theory fully explained how the "real world" works. Gradually, I became convinced that my textbooks were missing a rather important fact: that the global economy was more accurately described as a global corporate state, where governments the world over were mostly acting in the interests of corporations at the expense of the people they were elected to serve. The proposition that the well being of people and corporations were identical, with the benefits trickling down to all, became increasingly difficult to support in the face of evidence to the contrary. Actually, the economy was being managed for the profits of corporations at increasingly greater expense to the environment and society's collective well being, though my textbooks put little emphasis on this. Discouraged, I turned to computer programming to earn a living, resigned to a world ruled by unstoppable global capitalism.

Since then, global warming has become a scientific fact. Far from fearing global climate change, I welcome it, because I believe this dark cloud has a silver lining: it will drive us towards the green economy which conventional "market forces" could never have achieved. The dramatic and frightening economic events of 2008 have only further convinced me that the conventional economic belief that the market forces of global capitalism work themselves out to our benefit is dangerously naive.

In the last few years I've learned much about the sustainability movement, and it gives me new hope. I believe it can fundamentally change how we think about the economy, though there is still much work to be done to accomplish that. The sustainability movement is actually the convergence of many movements with deep historical roots -- it’s about human rights, world peace, injecting a higher awareness into economic activity, and rooting out corruption in business and politics by making them transparent to the public they serve. It’s about having a real and personal connection to Nature. It’s about waking up in the morning and feeling good about yourself because you work at a job that has a purpose for you and your community. I believe this is what all people truly want, all over the world.

How Much More Evidence Do We Need?

2008-12-15T16:10:00.000-07:00

As the Madoff scandal unfolds, what is becoming evident is that the largest fraud ever perpetrated in the US financial markets was never detected by the government regulatory agency charged with preventing this kind of thing: the Securities and Exchange Commission. Why? Because it has been so weakened by the presidential appointment of top officials who do not believe in the need to regulate and by Congressional laws that have greatly weakened the regulatory framework.

The SEC had abundant warnings: "Madoff Securities is the world's largest Ponzi Scheme," Mr. Markopolos, wrote in a letter to the U.S. Securities and Exchange Commission in 1999." (from WSJ, Dec 13, 2008. Mr. Markopolos worked at a Wall Street firm that competed with Madoff.)

Transparency in the financial sector has always been resisted by disreputable firms and pro-business administrations, who prefer to keep their dealings secret. To achieve transparency requires effective and intelligent regulation. But the global economy has been on a deregulatory trend for the past 30 years, ever since the election of Ronald Reagan. The Gramm-Leach-Bliley Act (GLBA) passed by Congress in 1999, allowed commercial and investment banks to consolidate. In the vernacular, this basically allows banks to get into the stock market. Its passage effectively repealed the 1933 Glass-Stegall Act, which was enacted to prevent precisely that activity, because that was a primary cause of the 1929 stock market crash and consequent Great Depression. How little we have learned!

In economic theory, the financial sector is supposed to act as a fiduciary channel that allows society's collective savings to be used for investment in the real economy. When the financial sector starts to act like an out of control casino with outright fraud run in plain sight for years, and has become so swollen in size that the collective outstanding capital dwarfs the real economy (such as the deriviatives markets now do on a global scale), it is a case of the tail wagging the dog; it has corrupted its economic function and its effect on the global body is like a cancer that must be controlled or eliminated -- or death can be the result. The results from this rampage of deregulation are tragic, devastating and have yet to fully play out; clearly, it will take years upon years to recover from the damage that has been done. We need no more evidence: the financial sector deserves to be restructured and re-regulated immediately, before it is allowed to wreak more havoc on communities all around the globe. The culture that dominates this industry is based on ruthless greed that is killing the planet, undermining our communities, perpetuating economic theft that extracts wealth from the lower to higher income classes on an international scale, perpetuates a violence towards the environment and marginal cultures, and strangles the ability of democracy to function with its connections and lobbying. Enough is enough! Make your voice heard and contact your congressional representatives today; or better yet, go to change.gov and make your input heard directly.

Open Source Government

2008-12-09T12:36:00.000-07:00

The open source movement has revolutionized the software industry. [insert overwhelming citations here...]

Governments the world over are in dire need of assistance and input from the public to help support politicians with the courage and leadership to stand up to the influence of corporate lobbyists. [insert even more overwhelming citations here...first and foremost: change.gov]

In turn, the public needs current, up-to-date information about the economy and status of political issues from the government -- which only the government can collect, organize and authorize -- in order to stay informed on these complex and interwoven topics.

Enter the open software movement. The programmers who make it run will be inspired to help -- if the way is made clear to allow them to contribute. Keep code open and secure!

Online citations:
Steady-State Economics by Herman Daly

[more to follow....]

Do We Need a Court of Economic Justice?

2008-10-30T15:47:00.000-06:00

I've been reading about a lot of tales of economic woe in the news lately due to the wrenching effects of the subprime mortgage debacle. One of the more bizarre cases is Jefferson County, Alabama, which is currently several billion dollars in debt because, apparently, some of its public officials, with questionable backgrounds and dubious motives, thought they could save on interest payments for the taxpayers by making some risky bond-swapping agreements. In addition, there was some plain old-fashioned graft going on in a county-wide overhaul of the sewer system being awarded to inexperienced companies with ties to the same questionable officials. Though they haven't hit bottom yet, poor Jefferson County appears headed to break the record for municipal bankruptcy. Who's to blame? More importantly, who should pay? The citizens of the county are on the hook to the tune of around $7,000 a person. Who in their right mind can call that fair?

Municipal bankruptcy laws were created during the Great Depression to deal with the woefully inadequate laws then on the books. Prior to then, the only choice for a county or state in debt was to raise taxes on its citizens to pay off their debts - as required by law. (The justification for that type of legal action was termed by mandamus, Latin for "we command"; who's "we" in this case, I wonder?) It seems we are still learning the lessons of the Great Depression, for many municipalities will be very thankful for these bankruptcy laws now in place. Jefferson County is not alone: there are many news stories on municipal bankruptcy can be easily found on the Net.

Municipalities are just one type of victim of the current global financial crisis; but it is an impersonal aspect of it. The more personal aspect is more compelling: who knows how many millions of households are now facing foreclosure, and the massive scale of hardship they are enduring? What is now clear is that this has been caused by financial chicanery on an international scale.

A fundamental point here is that all this debt -- which is causing real hardship, misery, even homelessness, murders and suicides -- has been inflicted on unknowing innocents by an unjust economy. The economy is not some blind, impartial force of Nature, and cannot fall into that famous clause in legal contracts as "acts of God." Far from it! The economy is an entirely man-made artifact, subject to our possible collective control; so why does it seem so out of control? It is because the current laws and regulations allow it -- laws and regulations heavily influenced by corporate lobbyists, but ultimately under democratic control. I believe that we should start to recognize that economic stalkings and killings are just as serious as those criminal acts committed in person -- and they are far more widespread. Innocent victims should not be made to pay for the economic injustice knowingly committed by economic thieves and murderers. We need a new Court of Economic Justice where such people and communities can plead their case, name their attackers and have the economic evidence reviewed and considered, just as we do now for the criminal acts that consider the motives, the weapons, the evidence, and all the facts, before reaching a verdict.