Reflections on 2013

DSC01281The most important event this year was Pope Francis. Our time is a moment for cultural shifts, an evolution in values away from self-centeredness to compassion. With his pronouncements on economic injustice, the Pope, supported by some 80% of American Catholics, has contributed to this cause.

Another significant event was the break in the Tea Party’s vise-like grip on the Republican Party, which opens up some possibility for some progress in Congress on some issues. How lasting this development will be remains to be seen. But those Republicans who want to win back the White House saw the writing on the wall. Especially with ongoing demographic changes, the Tea Party was leading them over the cliff. So I suspect the Tea Party is history.

Elizabeth Warren qualifies for third place. Her remarkable rise to prominence, conducted with such grace and poise, is profoundly heartening. Economic populism is percolating throughout the country. Even if she doesn’t enter the Democratic Party primaries, and I hope she does, she will likely continue to have an impact, for she is giving voice to a largely unrepresented sentiment that needs to be empowered.

In March, three academics, funded by the estimable Russell Sage Foundation, released “Democracy and the Policy Preferences of Wealthy Americans,” in which they reported that two-thirds of the general public in the United States believe “the government in Washington ought to see to it that everyone who wants to work can find a job” and 78% believe the minimum wage should be “high enough so that no family with a full-time worker falls below [the] official poverty line.”

Those numbers were not new to me. I knew that a majority hold this conviction. But its timing, and their use of the frame “see to it,” prompted me to undertake the Guarantee Living-Wage Jobs Campaign. With valuable assistance from the economist Dean Baker and the Internet strategist Michael Stein, I plan to launch that campaign early next year to encourage activist organizations to take on the issue.

I hope that this time I won’t get too excited by prospects for “success” and disappointed by apparent “failure.” I feel that I may have broken through to a new level of self-confidence, grounded in the awareness that I don’t need to prove anything to anyone (including myself). I can simply do the best that I can and let the chips fall where they may.

Writing my autobiography has helped in this regard. Reviewing my life in its entirety has helped me to regard my past efforts with greater respect.

Reading The Politics of Authenticity by Marshall Berman also helped. I now see more clearly that I am less alone than I sometimes feel, with my concerns about how the modern world fosters alienation and self-alienation, the divided self. These concerns go back to the onset of the modern age, and were beautifully expressed by Pascal and (the early) Rousseau, for example.

This book prompted me to shift my “holistic growth” focus toward enabling people to more fully “be real” and “true to themselves.” This shift will be reflected in the upcoming “The Personal, the Social, and the Political” survey.

Being so alone for so long here on the north coast of the Dominican Republic and really enjoying it has also helped. Dick Price, Esalen Institute co-founder, affirmed “moving toward increasing self-sufficiency, while drawing on support as needed.” I’m still on that path, and it feels good.

I still would prefer a deeper sense of community, remain open to that possibility, and will continue to try to find, experience, and/or nurture it. But in the meantime, I accept life.

The life force that drives evolution, or God, will prevail, even if humanity wipes humanity off the face of the Earth. And considering that there are at least one septillion (that’s 24 zeros) stars in the universe, most likely self-consciousness is alive elsewhere. So we humans are probably not as special as we think we are.

Paradoxically, being aware of this reality makes us very special. So, as Kathy Kelly’s Iraqi friend advised her, “Don’t forget to love the Universe.”

Living-wage Jobs Campaign (12/27/13 Draft)

Following is the latest draft of the key content for the campaign that Michael Stein and I are planning to launch early next year on the powerful, new website. The economist Dean Baker, co-author of the recently published, excellent book, Getting Back to Full Employment, has offered valuable input. The text in bold indicates the framework, which cannot be altered. By default, the title and the URL for the campaign consist of the text in the Goal.

Your feedback would be most welcome.


Goal (limit: 60 characters):
[I want to] get Congress to guarantee living-wage job opportunities.

Short Description (limit: 120 characters):
Everyone needs the opportunity to work at a living-wage job in order to develop their potential and serve their community.

Full Description (no known limit):

Most Americans believe that our society should assure everyone a living-wage job opportunity. In a March 2013 article, “Democracy and the Policy Preferences of Wealthy Americans,” Benjamin I. Page, Larry M. Bartels, and Jason Seawright reported that 68% of the general public believe “the government in Washington ought to see to it that everyone who wants to work can find a job” and 78% believe that the minimum wage should be “high enough so that no family with a full-time worker falls below [the] official poverty line.”

So far there’s little grassroots pressure demanding action to achieve this goal. But some signs suggest that such movement may emerge in the near future. You can encourage activist organizations to take on this issue by signing our petition: “We, the undersigned, call on Congress to see to it that everyone who wants to work can find a living-wage job.” You can also pledge to recruit additional signers and start your own “personal campaign” on our site to gather more signers. If you join us, we’ll keep you informed about other efforts to guarantee living-wage job opportunities as we become aware of them. (We will not share your email address.)

As citizens, we need not prescribe precisely how the federal government should achieve full employment. The experts and the policy makers can make those decisions. Our job is to determine if they have accomplished that goal and keep pushing them until they do. They managed to save Wall Street and our car companies when those industries were on the verge of collapse. Surely they can figure out how to enable every American who is willing and able to find a living-wage job.

Without dictating the exact methods, however, we can indicate that our mission is realistic by outlining the problem and suggesting some concrete options in terms of solutions. (As conditions change and we receive feedback, we’ll modify this statement from time to time.)

First, the federal government could enable the working poor to lift themselves out of poverty by increasing the minimum wage and the Earned Income Tax Credit to levels necessary to assure that workers earn a living wage.

Second, the federal government could send funds to local governments to hire public-service workers to meet needs that are currently being neglected. Those needs include teachers’ assistants, in-home caregiving, nursing home staff, child care workers, park and recreation staff, substance abuse counselors, neighborhood center staff, and environmental cleanup.

By relying on revenue sharing with local governments, we could minimize problems associated with “big government” and give people a greater opportunity to have a voice in how funds are spent. Citizens can more easily impact City Hall than they can the federal government.

By requiring local governments to maintain current spending levels, we could assure that they did not simply use the new funds to reduce local taxes.

By steadily increasing such funding each year until those jobs go begging due to lack of applicants, we could reach full employment. When such funding is no longer needed, it could be decreased.

About 10 million individuals are officially unemployed. But if more living-wage job opportunities were available, several million more under- and unemployed workers might take those jobs. Because a major national jobs program would boost economic growth, many workers would take jobs in the private sector. In addition, mandating paid sick time, paid family leave, and four weeks of paid vacation, as do all wealthy countries except the United States, would lead businesses to hire more workers.

To get a rough idea, let’s estimate what it might cost the federal government to fund five million living-wage public jobs at $12 per hour. Since a full-time worker at that rate earns $25,000 annually, total wages would be $125 billion. Add on another $25 billion for supervisory and administrative costs, and the total is $150 billion.

Where might those funds come from? Without increasing income and payroll tax rates, the following deficit-neutral options include:
• A small tax on financial transactions would discourage unproductive, destabilizing speculation and generate $100 billion or more.
• Reducing wasteful military spending could free up $60 billion per year or more.
• Tens of billions in increased revenues would be generated from the boost to the economy that would result from full employment.
• Billions would be saved from decreased social insurance payments to people who would no longer need assistance.
• The Federal Reserve Bank could buy municipal bonds, which would lower borrowing costs for local governments and help them pay salaries and invest in infrastructure improvements.

If those measures were insufficient, the government could borrow money. (Annual interest payments on the debt have declined from 15% of the federal budget in the 1990s to about 5% now, so we could afford this option.)

Measures such as these would enable us to move toward full employment. After gauging our progress, if more funding were needed, a one-half-of-one-percent wealth tax on the top 1% could generate $100 billion. (More than one-third of the nation’s $60 trillion wealth is held by the top 1%.)

So clearly lack of revenue is no reason to back away from guaranteeing living-wage job opportunities. The United States has more than enough money to assure living-wage job opportunities.

The standard argument against full employment has been that it would cause excessive inflation. But partly due to global competition, it’s unclear how much inflationary pressure would result. From 1997 to 2000 the unemployment rate was below 5% and falling (approaching full employment, for some workers will always be between jobs), and from 2003 to 2008 it declined from 6.0% to 4.6%, but the core inflation rate has averaged less than 3% since 1997, which is acceptable.

True enough, higher than expected inflation does hurt Wall Street. The price traders pay for financial instruments is based on expected inflation. When they sell, if inflation proves to be greater than expected, the purchasing power of the money they get is less than what they anticipated. Inflation erodes their assets. And this creditor class has great influence on public policy.

But if wages keep pace, some inflation is beneficial to the economy, partly because it gives companies confidence their profits will increase. And multiple measures are available to handle excessive inflationary pressure, including indexing Social Security to inflation and raising interest rates.

Steadily increasing federal revenue-sharing year-by-year would enable the whole country to monitor whether reducing unemployment was contributing to excessive inflation. This decision needs to be made openly following full discussion. What is worse? Stagnant wages for the middle class, severe poverty, and widespread unemployment, or some inflation that benefits most people? How much inflation is acceptable? Historically, most countries have managed quite well with inflation rates that have been much higher than in the United States. But the official Federal Reserve Bank policy, also adopted by other central banks, is an unjustifiable goal of 2% inflation.

In Getting Back to Full Employment: A Better Bargain for Working People, the economists Dean Baker and Jared Bernstein argue that if and when inflation became a serious problem, we could deal with it then.

The issue is one of relative risks. We understand that as the unemployment rate falls to lower levels, the risk of accelerating inflation increases. But if the rate of inflation is not accelerating, there is the risk that people are being needlessly denied the chance to work and wages for those at the bottom are being held down by bad government policy. Based on the relative costs, it seems far better to take the risk of a short period with rising inflation than maintaining a higher-than-necessary level of unemployment…. Few would agree that it is appropriate to keep millions out of work and deny wage growth to tens of millions simply to reduce the risk of modestly higher inflation. [emphasis added]

In a recent interview with Washington Post columnist Ezra Klein, Bernstein stated:

The largest group of beneficiaries of full employment is not the un- and underemployed. It’s people with jobs. It creates enough pressure on the compensation system such that the bottom two-thirds of the workforce, for whom growth has been pretty much a spectator sport, get back in the game.

Klein concluded, “Full employment gives average workers the power to demand a better deal from their employers and thus reduces inequality by giving the working class an overdue raise.”

As former union leader William Winpisinger argued:

Official government policy declares unemployment is necessary to combat inflation. For two decades we’ve used high unemployment to combat inflation. We’ve had mini-recessions, mild recessions and severe recessions. We’ve sacrificed the unemployed and their families on the altar of fighting inflation and managing the economy. All we have to show for it are a decline in real incomes for American workers and their families, a growth in poverty-level jobs, and the wasted lives of nearly 10 million people marking time in the ranks of an army of unemployed.

Trading unemployment for price stability is like burning down the barn to get rid of the rats. We lock up people who practice arson as a rodent control policy. Those who promote the conscious use of unemployment to manage the economy are even more dangerous. As a national policy it is hypocritical, bankrupt and bereft of intelligence. It is long past due for this nation to commit, absolutely and unequivocally, to full employment as its number one priority.

The remaining question is how to build a movement to see to it that everyone who wants to work has a living-wage job opportunity. If you support the ““Get Congress to Guarantee Living-Wage Job Opportunities” campaign, sign our petition, and get others to sign, you’ll encourage activist organizations to take on this issue and we’ll keep you informed about opportunities to get more involved when we learn about them.

(The substitution of future versions will be noted here.)

Sermon on the Mount (edited)

Bloch-SermonOnTheMount / Public Domain Mark 1.0

And seeing the multitudes, he went up into a mountain: and when he was set, his disciples came unto him:
and he opened his mouth, and taught them, saying,
Blessed are the poor in spirit: for theirs is the kingdom of heaven.
Blessed are they that mourn: for they shall be comforted.
Blessed are the meek: for they shall inherit the earth.
Blessed are they which do hunger and thirst after righteousness: for they shall be filled.
Blessed are the merciful: for they shall obtain mercy.
Blessed are the pure in heart: for they shall see God.
Blessed are the peacemakers: for they shall be called the children of God.
Blessed are they which are persecuted for righteousness’ sake: for theirs is the kingdom of heaven.
Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.
Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you.
Ye are the salt of the earth: but if the salt have lost his savor, wherewith shall it be salted? it is thenceforth good for nothing, but to be cast out, and to be trodden under foot of men.
Ye are the light of the world. A city that is set on a hill cannot be hid.
Neither do men light a candle, and put it under a bushel, but on a candlestick; and it giveth light unto all that are in the house.
Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven.
Think not that I am come to destroy the law, or the prophets: I am not come to destroy, but to fulfil.
For verily I say unto you, Till heaven and earth pass, one jot or one tittle shall in no wise pass from the law, till all be fulfilled.
Whosoever therefore shall break one of these least commandments, and shall teach men so, he shall be called the least in the kingdom of heaven: but whosoever shall do and teach them, the same shall be called great in the kingdom of heaven.
For I say unto you, That except your righteousness shall exceed the righteousness of the scribes and Pharisees, ye shall in no case enter into the kingdom of heaven.
Ye have heard that it was said by them of old time, Thou shalt not kill; and whosoever shall kill shall be in danger of the judgment:
but I say unto you, That whosoever is angry with his brother without a cause shall be in danger of the judgment: and whosoever shall say to his brother, Raca, shall be in danger of the council: but whosoever shall say, Thou fool, shall be in danger of hell fire.
Therefore if thou bring thy gift to the altar, and there rememberest that thy brother hath aught against thee;
leave there thy gift before the altar, and go thy way; first be reconciled to thy brother, and then come and offer thy gift.
Agree with thine adversary quickly, while thou art in the way with him; lest at any time the adversary deliver thee to the judge, and the judge deliver thee to the officer, and thou be cast into prison.
Verily I say unto thee, Thou shalt by no means come out thence, till thou hast paid the uttermost farthing.

Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth:
but I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also.
And if any man will sue thee at the law, and take away thy coat, let him have thy cloak also.
And whosoever shall compel thee to go a mile, go with him twain.
Give to him that asketh thee, and from him that would borrow of thee turn not thou away.

Ye have heard that it hath been said, Thou shalt love thy neighbor, and hate thine enemy.
But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you;
that ye may be the children of your Father which is in heaven: for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust.
For if ye love them which love you, what reward have ye? do not even the publicans the same?
And if ye salute your brethren only, what do ye more than others? do not even the publicans so?
Be ye therefore perfect, even as your Father which is in heaven is perfect.

Guaranteeing a Living-Wage Job Opportunity: A Question

Social Media Camp 2009- Social Media for the Job Search
deanmeyersnet / / CC BY

Early next year, I plan to launch a campaign calling on the federal government to assure everyone a living-wage job opportunity. In late August of this year, made major improvements to their website. For an overview of the new site, click here.

The main purpose of the campaign that I’m initiating is to demonstrate to grassroots activist organizations that they should take on this issue because there is widespread support for it and a substantial number of people would be available to participate in an effort to push for it.

Most Americans believe that our society should assure everyone a living-wage job opportunity. In a March 2013 report, “Democracy and the Policy Preferences of Wealthy Americans,” Benjamin I. Page, Larry M. Bartels, and Jason Seawright reported that 78% of the general public believe that the minimum wage should be “high enough so that no family with a full-time worker falls below [the] official poverty line,” and 68% believe “the government in Washington ought to see to it that everyone who wants to work can find a job.”

The current description of the campaign reads:

This campaign therefore calls for the federal government to send funds to local governments to hire public-service workers to meet pressing needs that are being neglected. These jobs include teachers’ assistants, in-home caregiving, nursing home staff, child care workers, park and recreation staff, substance abuse counselors, neighborhood center staff, and environmental cleanup.

Those funds could be generated primarily by increasing taxes on the top 1%, roughly 1.2 million households whose average income before taxes in 2012 was $1,873,000. So their total income was $2, 250 billion. Their effective tax rate was 20.6%. In the late 1970s, they paid 35%. If they had paid 40% instead of 20%, that would have generated an additional $450 billion in revenue.

About 10 million individuals are officially unemployed, but if living-wage job opportunities were available, another eight million might take those jobs, or 18 million total. A full-time worker paid $12 per hour earns $25,000. So with $450 billion we could hire 18 million workers at $12 per hour.

To guarantee living-wage job opportunities would require additional costs not detailed here. But additional revenues would also be available. For example, the newly employed would pay taxes and reducing wasteful military spending could free up $60 billion per year or more. These numbers indicate that achieving full employment is feasible.

Democracy and the Policy Preferences of Wealthy Americans
List of countries by number of households
Effective tax rates
The Obsession with Nominal Tax Rates or the Twinkie Romanticism

My question concerns the language for the goal that will be highlighted on the campaign’s homepage. This mission statement can be no more than 60 characters and must begin with “I want to.”

Current options under consideration are:

Option A: [I want to] tell Congress to guarantee living-wage job opportunities.
Option B: [I want to] tell Congress to see to it that everyone can find a job.
Option C: [I want to] get Congress to see to it that everyone can find a job.
Option D: [I want to] get Washington to see to it that everyone can find a job.
Option E: [I want to] get Congress to guarantee living-wage job opportunities.

The phrase “see to it” comes from the study cited above. It may have fewer problematic connotations, like another “entitlement,” and may be less hackneyed than “guaranteed.”

The term “Washington” also comes from that study and may be more inclusive than “Congress,” for the President also needs to be involved.

“Get” may be more achievement-oriented than “tell,” but it may be more grandiose.

Do you have any suggestions?

Peer-To-Peer Leadership

Peer to Peer LeadershipPeer-To-Peer Leadership
Why the Network is the Leader
By Mila N. Baker

Why Read It? Mila Baker believes that most of today’s leadership theories are old wines in new skins and still rely on the leader-follower hierarchy. Yet hierarchy is breaking down everywhere in society, from politics to religion to social relationships — and most particularly in computers and networking.

Baker’s inspiration is the peer-to-peer model of computing, which is also mirrored in social networking technologies where a network with “equipotent” nodes of power — think peer leaders — is infinitely more powerful than a “client-server” (i.e., leader-follower) network. By creating organizations with leaders at all levels, architects of peer-to-peer organizations can build flexibility, resiliency, and accountability.

Read an excerpt here and buy the book for 30% off here.


Practicing Positive Leadership
Tools and Techniques That Create Extraordinary Results
By Kim Cameron

Why Read It? Over a decade ago, Kim Cameron and his colleagues decided that rather than analyze what went terribly wrong with organizations and how to prevent it, they would look at what went extraordinarily right and how to replicate it. This research was the birth of positive organizational scholarship, a new field that focused on what they called “positive deviance” — outcomes that far exceeded normal success.

In his previous book Positive Leadership, Cameron outlined four leadership strategies — Positive Climate, Positive Relationships, Positive Communications, and Positive Meaning — that characterize exceptionally high-performing organizations. Here he takes these strategies further by laying out tactics for implementing them.
Read an excerpt here and buy the book for 30% off.

New Projects for 2014

2014 Calendar
danielmoyle / / CC BY

Next year, I plan to undertake four new projects: 

1. Wade’s Monthly, a listserv to which I’ll send one email each month reporting on my work, as well as my inner experience.
2. A campaign calling on the federal government to guarantee a living-wage job opportunity.
3. A “The Personal, the Social, and the Political” survey to gauge interest in developing a network of “personal-political support circles.”
4. A road trip. Beginning March 25, I’ll travel throughout the United States meeting with friends, old and new, to have a cup of tea and discuss whatever’s on our minds at that time. If you want to meet, please let me know.

Below are the latest drafts of content for those projects, including:
1. The invitation to subscribe to Wade’s Monthly.
2. The content for the campaign.
3. An essay promoting that campaign.
4. The content for the survey.
5. An essay promoting that survey.

[To read more, click here]

Nietzsche on Music

For you / Para vosotras (Sant Jordi)
. SantiMB . / / CC BY-NC-ND

“Without music, life would be a mistake.”

“We should consider every day lost on which we have not danced at least once.”

“I would believe only in a God that knows how to dance.”

“In these dancers of Saint John and Saint Vitus we can recognize the Bacchic choruses of the Greeks, with their prehistory in Asia Minor, as far back as Babylon and the orgiastic Sacaea. Some people, either through a lack of experience or through obtuseness, turn away with pity or contempt from phenomena such as these as from ‘folk diseases’, bolstered by a sense of their own sanity; these poor creatures have no idea how blighted and ghostly this ‘sanity’ of theirs sounds when the glowing life of Dionysiac revellers thunders past them.

Now dare to be tragic men, for you will be redeemed. You shall join the Dionysiac procession from India to Greece! Gird yourselves for a hard battle, but have faith in the miracles of your god!”

“And those who were seen dancing were thought to be insane by those who could not hear the music.”

“Only sick music makes money today.”

“One must learn to love.— This is what happens to us in music: first one has to learn to hear a figure and melody at all, to detect and distinguish it, to isolate it and delimit it as a separate life; then it requires some exertion and good will to tolerate it in spite of its strangeness, to be patient with its appearance and expression, and kindhearted about its oddity:—finally there comes a moment when we are used to it, when we wait for it, when we sense that we should miss it if it were missing: and now it continues to compel and enchant us relentlessly until we have become its humble and enraptured lovers who desire nothing better from the world than it and only it.— But that is what happens to us not only in music: that is how we have learned to love all things that we now love.”

“In music the passions enjoy themselves.”

“At a certain place in Beethoven’s Ninth Symphony, for example, he might feel that he is floating above the earth in a starry dome, with the dream of immortality in his heart; all the stars seem to glimmer around him, and the earth seems to sink ever deeper downwards.”

“My melancholy wants to rest in the hiding places and abysses of perfection: that is why I need music.”

From goodreads

Chase Bank and Me

Laser Burners / / CC BY-NC-ND

JP Morgan Chase can lose $13 billion and hardly bat an eye. But when it comes to a $2,000 domestic wire transfer from one Chase account to another, they can be vigilant to the point of absurdity.

Having damaged my smartphone by dropping it, I asked the daughter of my Dominican landlady, who works in a computer store in NYC and knows how to ship stuff here, to buy me a new phone and laptop battery. Her mother then asked me to include money for her daughter’s school fee when I wired the money. She had other options, but her daughter faced a deadline and time was short. Since we both have Chase accounts, we expected it to be quick and easy.

But after I wired the $2,000, I learned that the daughter could not get it. I inquired and learned that the Fraud Department was suspicious and had blocked the transfer. I called and after ten minutes, the third person I talked to started asking me a long list of questions to verify my identity. Then she wanted to know to whom I was sending the money and why. I told her it was money from her mother and money for an electronic device. She replied, “If you don’t mind me asking, what kind of electronic device?” After some more stupid questions, she said everything was ok and that I could sign in again and re-send the money, which I did.

Hours later, I went downstairs and discovered that the mother and daughter were on Skype while the daughter was on hold with Chase, for she once again couldn’t get the money. She had been told there was no record of my earlier call. When the agent returned, she told him I was on the line and could verify what had happened. He took my social security number and other information and placed us on hold, only to come back and tell us that I had to call again because my account had been frozen.

I did and the transfer finally went through, but altogether the hassle cost both the daughter and me about an hour of our time.

Though I doubt it, perhaps they had red-flagged my account and were giving me a hard time because several months ago I sued Chase in Small Claims Court and won a settlement. In reporting on it here, I’m violating my promise not to discuss the case publicly. I wonder what the penalty is.

Before going to Mexico earlier this year to sell my property there, my local Chase branch manager told me I would have no problem depositing a Mexican cashier’s check in my account. But when I returned with the modest-sized check, after making me wait almost ten minutes, she told me that she could not deposit it and we would have to send it to headquarters for approval. I gave her the check and signed a document that said when they gave me my funds, “the rate of the day will apply.”

They then sent the check to headquarters, who sent it to Mexico to verify that it was legal, all of which took 15 days and caused me cash-flow difficulties. When they finally deposited funds into my account, I checked the rate of the day on the Internet and calculated that they gave me $1,300 less than they should have. I called headquarters about it and they said, “Oh, we’re our own investment bank and we set our own conversion rate.”

Unpersuaded, I sued them. Several days before the court date, their paralegal called and gave me the same song-and-dance about Chase being its own investment bank and said they could send their representative to the court to explain that. I replied, “The document I signed said nothing about Chase’s rate. And when I googled ‘rate of the day,’ I got the number I’m using.”

He then offered to settle. We haggled and I settled for $650, half of what I was entitled to. But a bird in the hand…., and time is money…. I then had to sign one of those famous non-disclosure agreements, which I hereby violate.

I put most of my money in a credit union, but I kept my Chase account for convenience. Some convenience!

But at least we can rest assured that Chase in now on the case, helping to make banking safe.

The System: Collapse, Overthrow, or Reform?

Another Smithsonian Winner, some upcoming appearances, and a new photo of Rockefeller center
Stuck in Customs / / CC BY-NC-SA

I do not support capitalism as-we-know-it, or crony capitalism. Nor do I support free-market fundamentalism.

I affirm the restructuring of our social system to make it more compassionate and more democratic, so that it better enables everyone to be true to who they really are and to become who they really want to become.

This fundamental reform would involve insisting that our society live up to its ideals. We must “promote the general welfare,” as stated in the Preamble to the U.S. Constitution, especially by assuring that everyone has a living-wage job opportunity. We must maximize democracy throughout society so that everyone has a real voice in affairs that affect them. And we must enrich our culture, cultivate caring communities, and engage in ongoing self-development in order to promote those values.

At the same time, I support the right of individuals and workers to start their own businesses and establish their own prices – if they do so in a way that does not damage the common good. So I support some forms of capitalism. Talking about “overthrowing capitalism” and identifying oneself as “anti-capitalist” therefore strikes me as imprecise and counter-productive.

Those who want conditions to worsen so “the system” will collapse might do well to read “Is the Safety Net Just Masking Tape?” in the December 17 New York Times. As the author, Thomas B. Edsall points out, worsening conditions can lead societies to or toward fascism. On the other hand, steadily improving economic conditions can lead to a “revolution of rising expectations.”

Edsall also points out that liberals have neglected the need for structural reforms that empower workers and increase economic opportunity, such as higher taxes on the wealthy to fund public investment and full employment. Breaking up the big banks is another needed structural reform. Instead, liberals have promoted means-tested “pity-charity” liberalism. Due to an excessive reliance on those programs, Edsall argues, “The state has become the resource of last resort, consigning just the people progressives would like to turn into a powerful force for reform to a condition of subjugation — living out their lives on government subsidies like Medicaid, the Earned Income Tax Credit and now Obamacare.”

How to build a popular movement for empowerment through economic-security measures already supported by a strong majority of the American people is no easy question to answer. But surely not talking about the issue is no way to begin.


Wake Up the Banking Police

morgenson-thumbStandardDecember 14, 2013

The Volcker Rule has landed. Will the United States financial system be safer and sounder as a result?

That’s the goal, after all, of the almost 1,000-page document approved by banking, securities and commodities regulators last week. Years in the making, the rule is supposed to reduce the risks that a major bank will have to be rescued by taxpayers if some of its bets go bad.

The rule, named for Paul A. Volcker, the former Federal Reserve Board chairman, was supposed to be the 21st century’s answer to theGlass-Steagall Act, the Depression-era law that separated investment banks from their commercial brethren. To at least one financial historian, the emergence of the new rule last week was momentous.

“The passage of the Volcker Rule represents a step partway back to the Glass-Steagall regime that has historical significance for helping to give us four to five decades of relative financial stability from the 1930s to the 1980s,” said Richard E. Sylla, the Henry Kaufman professor of the history of financial institutions and markets at New York University. “Even if we don’t see a lot of actions against violators, the mere fact that the rule is on the books will make banks think twice before engaging in activities that might result in actionable violations.”

As a result, Professor Sylla said, “the financial system should become more responsible and safer.”

Let’s hope so.

Still, Mr. Sylla’s point about actions against violators raises perhaps the most crucial question surrounding this new rule. How assiduously will the regulators charged with enforcing it do their jobs?

We learned all too well during the lead-up to the recent financial crisis what happens when bank watchdogs snooze. There were plenty of regulations on the books that could have been enforced to rein in reckless lenders. But the police force was disengaged, or worse, protecting the institutions it was supposed to oversee.

Put simply, the success or failure of the Volcker Rule will depend upon the appetite of financial regulators to regulate. This is always the case, of course, with regulation. But it is particularly so with the Volcker Rule because some of its most important measures are open to interpretation.

Consider the exceptions to the rule’s ban on proprietary trading — the bets that a bank can make using its own money. Proprietary trading was what hammered JPMorgan Chase in the incident known as the London whale; curbing these types of transactions was central to the new rule and to protecting taxpayers from future bank bailouts.

But there are always exceptions to any rule. And in proprietary trading, the Volcker Rule makes an exception that relates to a bank’s liquidity management.

Liquidity represents a bank’s ready cash needed to meet its obligations. If an institution can meet these obligations without generating a loss, it’s considered to have sufficient liquidity.

Reading the rule is a tough slog through legal jargon. The bar on proprietary trading, for example, does not include “any purchase or sale of a security by a banking entity for the purpose of liquidity management in accordance with a documented liquidity management plan of the banking entity.”

If that’s not enough, the rule goes on to warn that these exempted transactions should exclude purchases “for the purpose of short-term resale, benefiting from actual or expected short-term price movements, realizing short-term arbitrage profits, or hedging a position taken for such short-term purposes.”

Are these exceptions big enough for the London whale to swim through? We don’t really know: It would be up to regulators to ensure that proprietary bets aren’t being improperly labeled liquidity management.

A second aspect of the rule granting financial institutions loads of leeway relates to their so-called market-making activities. These transactions are entered into by a bank but are ultimately for the benefit of its customers.

In this area, sayeth the rule: “The amount, types and risks of the financial instruments in the trading desk’s market maker inventory are designed not to exceed, on an ongoing basis, the reasonably expected near-term demands of clients, customers or counterparties.”

Someone will have to police whether a bank puts on a trade that it says is for market-making activities but in reality is a proprietary bet.

“You can drive a pretty large truck through that exception,” said David A. Skeel, a law professor and an expert in bankruptcy at the University of Pennsylvania Law School. As a result, he said: “The success or failure of the rule is really going to come down to what the bank regulators will do to enforce it. It can’t work unless it’s aggressively enforced, but it’s hard to imagine it’s going to be aggressively enforced.”

That’s hard to imagine because banking regulators are going to be the main enforcers of the Volcker Rule. For the most part (excepting the Federal Deposit Insurance Corporation), these are the very people who didn’t see the mortgage crisis bearing down on them. One reason: Where the big banks are concerned, the overseers often favor the overseen.

And yet regulators for the most part have not been held accountable for their woeful performance in the years leading up to the financial debacle. Instead, they have received even greater powers.

That no penalties have been exacted for the recent regulatory lapses means they are more likely to continue, Mr. Skeel said.

“If there were some sort of penalty for regulators who cross a boundary in failing to enforce the Volcker Rule, that would be interesting,” he said. “Even if there aren’t immediate obvious abuses, it would give you an opportunity to ask if there is any regulator whose job or pay ought to be in jeopardy because the rules aren’t being enforced.”

An intriguing idea. Just as the Volcker Rule is an opportunity to reduce the risks that big banks pose to taxpayers, it could also begin a discussion about regulatory accountability. That’s long overdue.


Published by The New York Times at