Sunday, March 29, 2009
Sherman's Fade...
The news all the time now really has been all economy all the time. You barely hear about war or flag burning or stem cells...all the issues that were the wedge issues from the past what 30 years or so seem to have been buried. But as I have watched the coverage of the financial crisis over and over again a nagging question keeps coming back to me about capitalism and the system we all live under and it is simply this : For the companies that exist within a capitalist society...what happens when you win?
Do you understand what I am asking? What happens when you are the only one left?
I discussed this with someone in work because they had gone and visited a Circuit City before they closed their doors. Because we have been paying attention to our own finances and not the bigger picture what happens when a company wins and is all that remains? Is that still capitalism? What happens to your choices and options for access to goods within the system? How is innovation not stifled?
You take any industry right now and before you would be able to name maybe three competitors who were the giants in each industry or sector. Now even those giants are dying before us. Think about any industry. Pick one and try to make a list for yourself.
Retailers for Books who are the top three?
I can name:
1. Barnes and Noble
2. Borders
3. ?
That's it. I can't name a third. Can you?
How about Credit Card companies:
1. Citigroup
2. Bank of America
3. Wells Fargo?
Electronics retailers...
1. Best Buy
2. Fry's
3. ?
How about phone companies?
1. Verizon
2. AT&T
3. Sprint ?
Online Retailers...
1. Amazon
2. ?
3. ?
Toy Retailers...
1. Toys R ' Us
2. FAO Schwartz ?
3. ?
See what I mean? We used to be able to pick the three biggest in industries. Now for some all there is left is one. Constantly over and over I hear that companies have to be bailed out because they are 'too big to fail'. What happens when all those companies become one. Just become 'the company'. What happens to Capitalism then?
I was fascinated by a story told to me by a woman whose husband is a senior VP for one of the toy manufacturers. This guy was in Hong Kong when he was called into a meeting. And the meeting's agenda surrounded a decision that the toy company had on its hands. You see the toy company produced toys for America. But Walmart was playing hardball. They wanted the toys given to them at below market cost...meaning the manufacturer would have taken a loss just to sell Walmart the toys it had created. The Toy Company would eventually make money because of Walmart's sales volume but they would still be selling the toys at a loss.
Now Toys R' Us because they were fighting with Walmart over toys wanted to give the toy company more space in its stores...more shelf room. And they would do it if the manufacturer specifically gave Toys R' Us a subsidy so they could reduce their prices close to Walmart's and narrow their losses. Well you can pay a company to give you more shelf space but sell less or you can go with the company that gives you the volume. They went with Walmart because they had to for the health of the company.
Now you as a consumer because you never saw the rest of the selection the toy company had missed out on maybe what could have made your child happy. But unless you were behind the scenes you would never know that. How many devices that could be the next step up for the ipod, the better TV, the better car stereo get shut out because the manufacturer can't get access to the shelf? Well if there is only one retailer how would you ever really know? Is that capitalism?
Matt Taibbi had one of the best articles about the Wall Street mess in Rolling Stone called 'The Big Takeover'...
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
But again this theme of companies being too big to fail to me is critical. And this has also become the problem for the companies that we are supporting with your tax dollars. I had no idea that AIG as a group is not one company but how many? 47.
47 different units and that does not even count the smaller competitors that they gobbled up and added to their business. To put AIG in perspective we have given AIG more money and funding then every single department in the Federal Government except Veterans Affairs and Defense. So we spent more on AIG then we did Homeland Security. We have spent more on AIG then in the Departments of Education, Health and Commerce combined.
GM has this issue too. GM got to big to fail because they had several different brands and they could not integrate them all with their contracts and legacy costs. As they are submitting plans for survival that is why you are seeing brands left and right being tossed aside...Saturn, Jeep (which they sold), Saab (which will go bankrupt) and about 10 other brands will just die. But if they were smaller they could have adjusted.
And the strange part to me is that in the law we have a mechanism in place to deal with these companies being 'Too big to fail', but we don't use it. That could be because it was a law written by a guy nicknamed 'The Ohio Icicle'.
This man Senator John Sherman...
http://en.wikipedia.org/wiki/John_Sherman_(politician)
Who in 1890 wrote the backbone for Antitrust law. The Sherman Antitrust Act...
http://en.wikipedia.org/wiki/Sherman_Antitrust_Act
That was specifically written to break up the power of monopolies. In particular it tries to prevent monopolies or attempts to create monopolies. Now the law is controversial. Who is to judge when a company is too big to fail? Well our politicians are making those pronouncements now why aren't they using the legal authority they have to actually break these monopolies and make a difference? I heard a committee chair actually say that these big companies were holding us 'hostage'. Now he's right. Why aren't we using the tools we have to address that?
Because if they did that would effect things like political campaign contributions. And its strange to me that all across the political spectrum no matter what political party you see people espouse the power of small business. They should because small business employs over 75% of the workers in this country. But small business can't keep creating those jobs if they are trying to compete with global monopolies. What happens when only one company remains? Is it still capitalism then? How democratic will your buying choices be when there is only one place left to buy something?
What should we do with companies that are 'Too big to fail'?
Do you understand what I am asking? What happens when you are the only one left?
I discussed this with someone in work because they had gone and visited a Circuit City before they closed their doors. Because we have been paying attention to our own finances and not the bigger picture what happens when a company wins and is all that remains? Is that still capitalism? What happens to your choices and options for access to goods within the system? How is innovation not stifled?
You take any industry right now and before you would be able to name maybe three competitors who were the giants in each industry or sector. Now even those giants are dying before us. Think about any industry. Pick one and try to make a list for yourself.
Retailers for Books who are the top three?
I can name:
1. Barnes and Noble
2. Borders
3. ?
That's it. I can't name a third. Can you?
How about Credit Card companies:
1. Citigroup
2. Bank of America
3. Wells Fargo?
Electronics retailers...
1. Best Buy
2. Fry's
3. ?
How about phone companies?
1. Verizon
2. AT&T
3. Sprint ?
Online Retailers...
1. Amazon
2. ?
3. ?
Toy Retailers...
1. Toys R ' Us
2. FAO Schwartz ?
3. ?
See what I mean? We used to be able to pick the three biggest in industries. Now for some all there is left is one. Constantly over and over I hear that companies have to be bailed out because they are 'too big to fail'. What happens when all those companies become one. Just become 'the company'. What happens to Capitalism then?
I was fascinated by a story told to me by a woman whose husband is a senior VP for one of the toy manufacturers. This guy was in Hong Kong when he was called into a meeting. And the meeting's agenda surrounded a decision that the toy company had on its hands. You see the toy company produced toys for America. But Walmart was playing hardball. They wanted the toys given to them at below market cost...meaning the manufacturer would have taken a loss just to sell Walmart the toys it had created. The Toy Company would eventually make money because of Walmart's sales volume but they would still be selling the toys at a loss.
Now Toys R' Us because they were fighting with Walmart over toys wanted to give the toy company more space in its stores...more shelf room. And they would do it if the manufacturer specifically gave Toys R' Us a subsidy so they could reduce their prices close to Walmart's and narrow their losses. Well you can pay a company to give you more shelf space but sell less or you can go with the company that gives you the volume. They went with Walmart because they had to for the health of the company.
Now you as a consumer because you never saw the rest of the selection the toy company had missed out on maybe what could have made your child happy. But unless you were behind the scenes you would never know that. How many devices that could be the next step up for the ipod, the better TV, the better car stereo get shut out because the manufacturer can't get access to the shelf? Well if there is only one retailer how would you ever really know? Is that capitalism?
Matt Taibbi had one of the best articles about the Wall Street mess in Rolling Stone called 'The Big Takeover'...
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
But again this theme of companies being too big to fail to me is critical. And this has also become the problem for the companies that we are supporting with your tax dollars. I had no idea that AIG as a group is not one company but how many? 47.
47 different units and that does not even count the smaller competitors that they gobbled up and added to their business. To put AIG in perspective we have given AIG more money and funding then every single department in the Federal Government except Veterans Affairs and Defense. So we spent more on AIG then we did Homeland Security. We have spent more on AIG then in the Departments of Education, Health and Commerce combined.
GM has this issue too. GM got to big to fail because they had several different brands and they could not integrate them all with their contracts and legacy costs. As they are submitting plans for survival that is why you are seeing brands left and right being tossed aside...Saturn, Jeep (which they sold), Saab (which will go bankrupt) and about 10 other brands will just die. But if they were smaller they could have adjusted.
And the strange part to me is that in the law we have a mechanism in place to deal with these companies being 'Too big to fail', but we don't use it. That could be because it was a law written by a guy nicknamed 'The Ohio Icicle'.
This man Senator John Sherman...
http://en.wikipedia.org/wiki/John_Sherman_(politician)
Who in 1890 wrote the backbone for Antitrust law. The Sherman Antitrust Act...
http://en.wikipedia.org/wiki/Sherman_Antitrust_Act
That was specifically written to break up the power of monopolies. In particular it tries to prevent monopolies or attempts to create monopolies. Now the law is controversial. Who is to judge when a company is too big to fail? Well our politicians are making those pronouncements now why aren't they using the legal authority they have to actually break these monopolies and make a difference? I heard a committee chair actually say that these big companies were holding us 'hostage'. Now he's right. Why aren't we using the tools we have to address that?
Because if they did that would effect things like political campaign contributions. And its strange to me that all across the political spectrum no matter what political party you see people espouse the power of small business. They should because small business employs over 75% of the workers in this country. But small business can't keep creating those jobs if they are trying to compete with global monopolies. What happens when only one company remains? Is it still capitalism then? How democratic will your buying choices be when there is only one place left to buy something?
What should we do with companies that are 'Too big to fail'?
Thursday, March 05, 2009
The Mexican-American War (on Drugs) pt.1
Ciudad Juarez: Mayor José Reyes Ferriz is supposed to be the one to hire and fire the police chief in this gritty border city that is at the center of Mexico's drug war. It turns out, though, that real life in Ciudad Juárez does not follow the municipal code.
It was drug traffickers, led by Vicente Carillo-Fuentes, who decided that Chief Roberto Orduña Cruz, a retired army major who had been on the job since May, should go. To make clear their insistence, they vowed to kill a police officer every 48 hours until he resigned. The violence in Mexico has gotten so bad, that many Americans in border cities are now fearing the violence will spill across the border. Where did this violence come from? Why is the media spotlight now back on the War on Drugs instead of the War on Terror? A comprehensive understanding of the War on Drugs in both America and Mexico is appropriate in understanding the seemingly new war being waged just South of the border.
The War on Drugs is a controversial prohibition campaign undertaken by the United States government with the assistance of participating countries (such as Mexico or Columbia), intended to reduce the illegal drug trade—that is, to curb supply and diminish demand for specific psychoactive substances deemed immoral, harmful, dangerous, or undesirable. This initiative includes a set of laws and policies that are intended to discourage the production, distribution, and consumption of targeted substances. The term was first used by President Richard Nixon in 1971, and his choice of words was probably based on the War on Poverty, announced by President Lyndon B. Johnson in 1964. In 1994, it was reported that the War on Drugs results in the incarceration of one million Americans each year. Of the related drug arrests, about 225,000 are for possession of marijuana, the fourth most common cause of arrest in the United States. In the 1980s, while the number of arrests for all crimes was rising 28%, the number of arrests for drug offenses rose 126%. The United States has a higher proportion of its population incarcerated than any other country in the world for which reliable statistics are available, reaching a total of 2.2 million inmates in the U.S. in 2005. The U.S. Dept. of Justice, reporting on the effects of state initiatives, has stated that, from 1990 through 2000, "the increasing number of drug offenses accounted for 27% of the total growth among black inmates, 7% of the total growth among Hispanic inmates, and 15% of the growth among white inmates." In addition, the United States provides for the deportation of many non-citizens convicted of drug offenses. Federal and state policies also impose collateral consequences on those convicted of drug offenses, such as denial of public benefits or licenses, that are not applicable to those convicted of other types of crime.
It is commonly known that the U.S. War on Drugs is hardly a national problem. Our allies to the South have long since been the suppliers of much of the drug production to feed the habits of their relatively wealthy northern counter-parts. Mexico remains a transit and not a cocaine production country. Marijuana and methamphetamine production do take place in Mexico and are responsible for an estimated 80% of the methamphetamine on the streets in the United States, while 1100 metric tons of marijuana are smuggled each year from Mexico. Still, the drug cartels enjoy no support from the Mexican public.
In 1990, just over half the cocaine imported into the U.S. came through Mexico. By 2007, that had risen to more than 90 percent, according to U.S. State Department estimates. Although violence between drug cartels has been occurring long before the war began, the government used its police forces in the 1990s and early 2000s with little effect. That changed on December 11, 2006, when newly elected President Felipe Calderón sent 6,500 federal troops to the state of Michoacán to put an end to drug violence there. This action is regarded as the first major retaliation made against cartel operations, and is generally viewed as the starting point of the war between the government and the drug cartels. As time progressed, Calderón continued to escalate his anti-drug campaign, in which there are now well over 25,000 troops involved. During president Calderón's administration, the Mexican government has spent approximately $7 USD billion in an 18-month-old campaign against drug cartels. It is estimated that during 2006, there were about 2000 drug-related violent deaths about 2300 deaths during 2007; more than 3,725 people have died this year. Many of the dead were gang members killed by rivals or by the government, some have been bystanders. At least 450 police officers and soldiers have been killed since January 2007. Some reports list 2008 as the bloodiest year yet with counts as low as 6,000 and as high as 8,000 drug-cartel related deaths.
It was drug traffickers, led by Vicente Carillo-Fuentes, who decided that Chief Roberto Orduña Cruz, a retired army major who had been on the job since May, should go. To make clear their insistence, they vowed to kill a police officer every 48 hours until he resigned. The violence in Mexico has gotten so bad, that many Americans in border cities are now fearing the violence will spill across the border. Where did this violence come from? Why is the media spotlight now back on the War on Drugs instead of the War on Terror? A comprehensive understanding of the War on Drugs in both America and Mexico is appropriate in understanding the seemingly new war being waged just South of the border.
The War on Drugs is a controversial prohibition campaign undertaken by the United States government with the assistance of participating countries (such as Mexico or Columbia), intended to reduce the illegal drug trade—that is, to curb supply and diminish demand for specific psychoactive substances deemed immoral, harmful, dangerous, or undesirable. This initiative includes a set of laws and policies that are intended to discourage the production, distribution, and consumption of targeted substances. The term was first used by President Richard Nixon in 1971, and his choice of words was probably based on the War on Poverty, announced by President Lyndon B. Johnson in 1964. In 1994, it was reported that the War on Drugs results in the incarceration of one million Americans each year. Of the related drug arrests, about 225,000 are for possession of marijuana, the fourth most common cause of arrest in the United States. In the 1980s, while the number of arrests for all crimes was rising 28%, the number of arrests for drug offenses rose 126%. The United States has a higher proportion of its population incarcerated than any other country in the world for which reliable statistics are available, reaching a total of 2.2 million inmates in the U.S. in 2005. The U.S. Dept. of Justice, reporting on the effects of state initiatives, has stated that, from 1990 through 2000, "the increasing number of drug offenses accounted for 27% of the total growth among black inmates, 7% of the total growth among Hispanic inmates, and 15% of the growth among white inmates." In addition, the United States provides for the deportation of many non-citizens convicted of drug offenses. Federal and state policies also impose collateral consequences on those convicted of drug offenses, such as denial of public benefits or licenses, that are not applicable to those convicted of other types of crime.
It is commonly known that the U.S. War on Drugs is hardly a national problem. Our allies to the South have long since been the suppliers of much of the drug production to feed the habits of their relatively wealthy northern counter-parts. Mexico remains a transit and not a cocaine production country. Marijuana and methamphetamine production do take place in Mexico and are responsible for an estimated 80% of the methamphetamine on the streets in the United States, while 1100 metric tons of marijuana are smuggled each year from Mexico. Still, the drug cartels enjoy no support from the Mexican public.
In 1990, just over half the cocaine imported into the U.S. came through Mexico. By 2007, that had risen to more than 90 percent, according to U.S. State Department estimates. Although violence between drug cartels has been occurring long before the war began, the government used its police forces in the 1990s and early 2000s with little effect. That changed on December 11, 2006, when newly elected President Felipe Calderón sent 6,500 federal troops to the state of Michoacán to put an end to drug violence there. This action is regarded as the first major retaliation made against cartel operations, and is generally viewed as the starting point of the war between the government and the drug cartels. As time progressed, Calderón continued to escalate his anti-drug campaign, in which there are now well over 25,000 troops involved. During president Calderón's administration, the Mexican government has spent approximately $7 USD billion in an 18-month-old campaign against drug cartels. It is estimated that during 2006, there were about 2000 drug-related violent deaths about 2300 deaths during 2007; more than 3,725 people have died this year. Many of the dead were gang members killed by rivals or by the government, some have been bystanders. At least 450 police officers and soldiers have been killed since January 2007. Some reports list 2008 as the bloodiest year yet with counts as low as 6,000 and as high as 8,000 drug-cartel related deaths.
Monday, March 02, 2009
Prop 8 Legal Battle Continues
When California's highest court agreed to hear several legal challenges to the state's new ban on same-sex marriage it refused to allow gay couples to resume marrying before it rules.
Three suits seeking to nullify the measure now before the court claim the initiative abridges the civil rights of a vulnerable minority group. They argue that voters alone did not have the authority to enact such a significant constitutional change.
"The issue is not whether the prohibition of gay marriage violates the constitution," said Prof. Erwin Chemerinsky, the dean of UCI's law school.
Instead, he said, the questions before the California Supreme Court boil down to two issues.
If the initiative is a revision of the constitution, then it's invalid because that requires approval from two-thirds of both houses of the California Legislature before submitting it to voters.
"If it's a revision, then Proposition 8 is invalid and then we go back to having marriage equality in California," Chemerinsky said.
But if it's an amendment, then assuming it's valid the court then has to consider its affect on the 18,000 some gay marriages already sanctioned.
"If they uphold (the proposition), they have to decide whether it applies retroactively," said Chemerinsky, who has taken the position that the initiative is an unconstitutional revision.
Over the past century, the California Supreme Court has heard nine cases challenging legislative acts or ballot initiatives as improper revisions. The court eventually invalidated three of the measures, according to the gay rights group Lambda Legal.
Andrew Pugno, legal counsel for the Yes on 8 campaign, said he doubts the court will buy the revision argument in the case of the gay marriage ban because the plaintiffs would have to prove the measure alters the state's basic governmental framework.
Joel Franklin, a constitutional law professor at Monterey College of Law, said that even though the court rejected similar procedural arguments when it upheld amendments reinstating the death penalty and limiting property taxes, those cases do not represent as much of a fundamental change as Proposition 8.
"Those amendments applied universally to all Californians," Franklin said. "This is a situation where you are removing rights from a particular group of citizens, a class of individuals the court has said is entitled to constitutional protection. That is a structural change."
(OC Register 2/27/2009)
Three suits seeking to nullify the measure now before the court claim the initiative abridges the civil rights of a vulnerable minority group. They argue that voters alone did not have the authority to enact such a significant constitutional change.
"The issue is not whether the prohibition of gay marriage violates the constitution," said Prof. Erwin Chemerinsky, the dean of UCI's law school.
Instead, he said, the questions before the California Supreme Court boil down to two issues.
If the initiative is a revision of the constitution, then it's invalid because that requires approval from two-thirds of both houses of the California Legislature before submitting it to voters.
"If it's a revision, then Proposition 8 is invalid and then we go back to having marriage equality in California," Chemerinsky said.
But if it's an amendment, then assuming it's valid the court then has to consider its affect on the 18,000 some gay marriages already sanctioned.
"If they uphold (the proposition), they have to decide whether it applies retroactively," said Chemerinsky, who has taken the position that the initiative is an unconstitutional revision.
Over the past century, the California Supreme Court has heard nine cases challenging legislative acts or ballot initiatives as improper revisions. The court eventually invalidated three of the measures, according to the gay rights group Lambda Legal.
Andrew Pugno, legal counsel for the Yes on 8 campaign, said he doubts the court will buy the revision argument in the case of the gay marriage ban because the plaintiffs would have to prove the measure alters the state's basic governmental framework.
Joel Franklin, a constitutional law professor at Monterey College of Law, said that even though the court rejected similar procedural arguments when it upheld amendments reinstating the death penalty and limiting property taxes, those cases do not represent as much of a fundamental change as Proposition 8.
"Those amendments applied universally to all Californians," Franklin said. "This is a situation where you are removing rights from a particular group of citizens, a class of individuals the court has said is entitled to constitutional protection. That is a structural change."
(OC Register 2/27/2009)
