Author Archives: Bill Humphrey

Bill Humphrey

About Bill Humphrey

Bill Humphrey is the primary host of WVUD's Arsenal For Democracy talk radio show and a local elected official.

O’Malley on GOP economics: “Kind of patently bullshit”

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Former Maryland Gov. Martin O’Malley, weighing a Democratic presidential bid, continued to hit his recent themes of re-regulating the economy to protect ordinary people, in a pre-recorded upcoming NPR interview, this time much more strongly:

“And, certainly, the concentrated wealth and accumulated power and the systematic deregulation of Wall Street has led to this situation where the economy isn’t working for us. All of that is true. But it is not true that regulation holds poor people down or regulation keeps middle class from advancing. That’s kind of patently bullshit.”

NPR’s full interview with former Maryland Gov. Martin O’Malley will be broadcast Monday on NPR’s Morning Edition.

O’Malley also asked:

“The bigger issue is, do we have the ability as a party to lead by our principles? Or are we going to conduct polls every time we try to determine where the middle is on any given day?”

 
The former governor also recently addressed the National Action Network (Al Sharpton’s organization) and spoke at quite some length — drawing upon his experiences as Governor of Maryland and Mayor of Baltimore — about the death of Walter Scott, police violence against Black Americans more broadly, and the general challenges surrounding race in America today. More than six minutes of excerpts were posted in this video:

Most of his remarks were pretty solid, in my opinion, and I think it’s been a while since a White politician spoke this openly with these words for this amount of time on this issue.

An age-old struggle that isn’t age-old

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In Washington conventional wisdom these days, the Middle East has been an endless sectarian struggle between Sunnis and Shiites since the split of 632 CE.

In the Middle East’s actual reality, there were 13 centuries where that wasn’t actually true. There was plenty of fighting, just as there was pretty much everywhere else at the time, but that wasn’t the motivating factor.

Nick Danforth explains:

Perhaps the biggest problem with this historical narrative is that it ignores everything that happened between 680 and, say, 1980. Op-eds about the “ancient” and “age-old” Sunni-Shiite warfare rarely reference this crucial 13-century period — a.k.a. the entire time during which Sunnis and Shiites were supposedly in conflict. Like everywhere in the world, people in the region were definitely fighting during this time. Historians could even provide a couple good examples of battles along Sunni-Shiite lines. But sectarian identity was seldom the chief issue that brought people in the Middle East to war.

 
The full piece is excellent and provides lots of citations in the links, some of which were also very cool to read. Danforth also offers some thoughts on how certain factions today are exploiting the perception of a timeless sectarian split to ensure everyone rallies to one side or the other out of self-preservation against the other side.

Calligraphy in Istanbul of the name of Abu Bakr, the Caliph whose selection first divided the Sunni and Shia followers of Islam. (Credit: Mark Ahsmann)

Calligraphy in Istanbul of the name of Abu Bakr, the Caliph whose selection first divided the Sunni and Shia followers of Islam. (Credit: Mark Ahsmann)

Vignette

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ABC12 in Flint, Michigan reports on a high school tour of colleges for Black students from Flint, which ran into serious trouble in northern Florida after their bus broke down and they want to a local motel:

Odum says things felt so tense that to avoid any trouble, he tried to be proactive by calling police. When police arrived, they told the group to stay in their rooms for the night. Odum says the officer left him with a chilling message. “The officer pulled me to the side and said, ‘You know, I just want to let you know this area right off the interstate, people aren’t too accommodating to you all.’ And he said, ‘If you know what I mean.’ I said, ‘Black people?’ And he said, ‘Yeah,'” Odum said.

The students tell ABC 12 overnight, the staff antagonized them. The group says they were told to check out the next morning immediately at 10. As they left, that’s when Odum says tensions reached a boiling point, when he says he heard the manager say, “‘We’re going to get these N****rs off our property.’ And I was blown back by that,” Odum said.

 
Good thing American racism ended with the election of a Black president. *eyeroll*

Social Impact? Deval Patrick joins Romney’s old firm

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Former Massachusetts Governor Deval Patrick seems to have decisively ended speculation he had national aspirations in the Democratic Party after announcing he will be going to work for the job-slashing firm Mitt Romney founded to help rich people park their money in “good causes”:

Deval Patrick is joining the Boston investment giant Bain Capital, where the former governor will start a new line of business, directing investments in companies that produce profits but also have a positive impact on social problems. […] Patrick will help give Bain its first foothold in the growing field of “social impact” investing, tackling social problems such as hunger and climate change with for-profit investments.
[…]
During the 2012 presidential campaign, when stumping for Barack Obama against Romney, Patrick declined to join Democrats who vilified Bain and Romney’s work for the firm. On MSNBC’s “Morning Joe,” Patrick called Bain “a perfectly fine company.”
[…]
For Bain Capital, the Patrick hiring goes beyond the common practice of giving a politician a desk and a rainmaker’s role between elections. It is a way for a firm known for hard-core business deals to provide clients such as pension funds and wealthy individuals with a social outlet for their money.

 

Former Massachusetts Gov. Deval Patrick served from 2007 to 2015. (Photo by Scott LaPierre)

Former Massachusetts Gov. Deval Patrick served from 2007 to 2015. (Photo by Scott LaPierre)

This role sounds innocuous, or even positive, and perhaps it will be. But Bain in particular has a fairly nasty reputation, and the general field of “social impact investing” can be fairly shady. Instead of just using money to fix long-term problems, everything becomes a shorter-term profit-seeking investment. Many of these private sector investments aim to replace government functions (or even profit off government) and treat all the problems in profit/loss terms. Whereas a one-way donor or a government program is ostensibly acting in the public interest, all social impact investments are made in the primary interest of the shareholders or company stake-owners. Some of the money that could be re-invested into getting an even bigger impact is instead needlessly siphoned out to create a profit margin.

Moreover, I am specifically concerned because of the recent, very sketchy “social impact” investments of Goldman Sachs in the Massachusetts correctional system, when Gov. Deval Patrick was still in office, which could foreshadow the type of investments he would introduce into the Bain portfolios. Such investments are far more concrete (and financially less abstract or long-term) than amorphous goals like “hunger” and “climate change.” I wrote about them in May 2014:

Recently, in some states, Goldman Sachs has been issuing “social impact bonds,” a new financial instrument that purports to help cure social ills with Wall Street’s “help.”

In this case, they’re loaning $9 million to the state of Massachusetts to help support a Boston organization that tries to help young offenders from bouncing back into prison. (Reducing young recidivism is a good social goal, obviously, and would have a ripple effect on crime prevention.)

If the effort reduces the number of days past inmate spend back in prison — which would save the state money — the savings would go back to Goldman Sachs, up to a million dollars. If the effort really pays off (above and beyond the bond repayment terms), then the state would get to keep the money. Of course, if the effort doesn’t hit the minimum targets needed to generate enough savings, Goldman Sachs would still get interest payments on the bond, but would lose the principal loan ($9 million or however much of it couldn’t be repaid due to insufficient savings).

As private investments in the prison industry go, it’s not the worst thing in the world. At least the profit incentive is toward rehabilitation rather than toward further imprisonment in the way privatized prisons are. But the question is why is it even necessary to involve the private sector middleman in the first place?

The state could pay for the upfront cost of the program through tax revenues (if it were willing to raise taxes, of course), instead of taking a loan, it would keep all the money and not end up paying Wall Street no matter how things turn out. That money could be reinvested into expanding the successful efforts even more, thus benefiting all taxpayers.

In my opinion, the job of corrections and the rehabilitation of young offenders is part of the role of government. The private sector is free to help, but it should be an add-on to the process, not a redundant profit diversion mechanism in the middle.

 
Another problem is the issue of emphasizing data-driven decision-making in government. The profit motive strengthens this trend much faster, even though government is often meant to be performing roles that could not be profitably well executed by the private sector and remain profitable. The data-driven policymaking favored by such approaches presents a false objectivity in place of really subjective questions: Read more

April 15, 2015 – Arsenal For Democracy 124

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AFD-logo-470

Topics: Lee Kuan Yew’s Singapore and the meaning of democracy; the pros and cons of term limits. People: Bill and Nate. Produced: April 13th, 2015.

Episode 124 (40 min):
AFD 124

Discussion points:

– What does Lee Kuan Yew’s legacy in Singapore tell us about other systems of government?
– Does democracy or enlightened despotism serve the public interest better?
– Can China’s ruling party actually govern well without democracy?
– Term limits on legislators and executives: Positive or negative?

Related Links:

– AFD: The Singapore model probably isn’t widely applicable
– AFD: Abolition of Russian Serfdom vs Abolition of US Slavery
– NCSL: Frequently Asked Questions About Term Limits

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Clinton takes aim at executive pay, hedge fund managers

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On day two of Hillary Clinton’s campaign through Iowa, she made an effort to distance herself from some of the Wall Street crowd she used to represent (and drew a lot of financial support from) as a US Senator from New York. Reuters:

“There is something wrong when hedge fund managers pay lower tax rates than nurses or the truckers that I saw on I-80 as I was driving here over the last two days,” Clinton said, perched on a stiff metal chair in the automotive shop of a community college.

Some hedge fund managers and private equity firm partners, among the wealthiest financiers on Wall Street, benefit from a tax code loophole that lets them pay the capital gains tax rate, which is lower than the ordinary tax rate, on large portions of their incomes.

Clinton also repeated her concerns, first voiced on Sunday, that chief executives make 300 times more than the average worker, and sympathized with students discussing the high cost of a college education.

 
The United States has the highest executive pay packages in the world, and the already large disparity between CEO compensation and salaries of the average American worker has exploded since 1980 (although the gap peaked in 2000).

The Globalist itemizes the facts in “CEOs and the Rest of Us”:

1. On average, the CEOs of large U.S. companies received $12.3 million in compensation in 2012, based on an analysis of S&P 500 companies.

2. Given that the average American worker earned $34,645 in 2012, the typical U.S. CEO earns 354 times what the average worker does.
[…]
5. A worker at the U.S. minimum wage would have to work 813 hours — or 20 weeks — to earn an hour’s worth of CEO pay.
[…]
9. The CEOs of the 100 largest companies in the United Kingdom earned an average of just under $3.8 million in 2012. That is 84 times the average British worker’s compensation of $44,743.

10. Britain’s CEO-to-worker wage ratio today is almost exactly the same as the one in the United States in 1990 — more than two decades ago.

11. At that time, U.S. CEOs earned “only” 85 times the average U.S. worker’s wage.

 
Vermont Senator Bernie Sanders, a democratic socialist, has been speaking in Iowa on these issues as well for many months, as he decides whether or not to run against Clinton for the Democratic presidential nomination. Another likely contender, Maryland Gov. Martin O’Malley, also called recently for stronger regulations on Wall Street.

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A tentative thought on presidential qualifications

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I’m not 100% sure about this, but I feel like we Democrats should probably stick with nominating people who didn’t vote for the Iraq War, given that the whole “well that was a world-altering catastrophe” thing hasn’t really stopped being true…

I realize that we’re not “supposed” to bring this up twelve years after the Iraq War started, but people who voted for the Iraq War should probably be automatically disqualified from being President of the United States. As a lifetime policy.

Anyone who cast that vote was exercising astonishingly bad judgment whatever their reasons — whether that person was a true believer, fell for the lazy/massaged intelligence without looking into it independently, or was scared about the short-term political ramifications of voting no. The important fact is that the consequences of the U.S. invasion and occupation of Iraq in 2003 for the world and for the United States were catastrophic. I know that — 7 years out from Bush and 12 out from the invasion — it can seem a bit distant today. But the resulting mess we’re in over here and the resulting mess they (with our continued involvement!) are in over there is ongoing. It is still not done blowing up in our faces and causing misery for the people who actually live there.

Even if it were true that we could have no way of knowing what would happen, it did happen, and it means anyone who supported the war made an appalling call that will haunt their foreign policy record forever, just as it financially and strategically haunts the United States and violently haunts the Middle East.

But at any rate, it wasn’t actually that hard to know at the time why the war was a bad idea. I was basically a child when the Iraq War began, but my social studies teacher made sure we knew about Iraq’s sectarian division. Which — newsflash! — any adult in politics in October 2002 who remembered back just 11 years to 1991 should have known about too. I also knew the difference, as a child, between Saddam Hussein and Al Qaeda. Our actual elected government pretended not to.

I’m sure plenty of potential candidates who didn’t vote on the Iraq War or express a view might do worse as president. That’s unknowable. But at least we know for sure that they didn’t do that. There don’t seem to be a lot of serious consequences in Washington for grievous policy errors abroad. There probably should be.