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.

ISIS obliterates ancient Assyrian city of Nimrud dig sites

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Priceless undiscovered antiquities in the ancient Assyrian city of Nimrud, 20 miles south of Mosul (and ancient Nineveh), were lost forever in recent days as ISIS continued its purge of pre-Islamic history in Mesopotamia by packing dig sites with explosives and blasting them into oblivion.

Flashpoint Intelligence, a global security firm and NBC News consultant, could not confirm that the site being destroyed in the video is in fact Nimrud, but it said “online chatter does seem to corroborate the claims, and the rest of the video does follow the group’s pattern of destroying ‘idols,’ as they call it.”

 

nimrud-isis-destruction

The city was built more than 3,000 years ago in the Middle Assyrian Empire and eventually became the capital of the later Neo-Assyrian Empire, under King Ashurnasirpal II, a brutal conqueror who shocked much of the surrounding region but also loved art promoting his success.

Last month, the terrorist organization destroyed exposed/above-ground excavation sites (some opened in the mid-19th century) with bulldozers and released footage showing fighters smashing ancient statues — including the world-famous lamassu winged bull-men — and wall reliefs from the city that is mentioned in the Book of Genesis.

Even some early Islamic sites have been devastated or erased by ISIS attacks including the Tomb of the Prophet Jonah in Mosul last July.

A separation of one’s own creation

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Estonia has — quite vindictively — done an extremely poor job integrating the older generations of its large Russian-speaking population, which has unfortunately left them closely oriented toward Russia.

For example, Estonia could have provided extensive homegrown Russian-language television programming and instead limited it to 15 minutes per day, which left Russian state television across the border to fill the void, enthusiastically, with anti-Estonian propaganda. Younger Russian Estonians, born shortly before or some time after the Soviet breakup, are somewhat better integrated but only by virtue of cultural assimilation out of necessity, which fosters its own kind of resentments.

These failures, not small military strengths, is what has left the Baltic States vulnerable to Russian intimidation and threats.



 
In related news (pictured above and below), about two weeks ago, the United States rolled a large military convoy with great deliberation 1,100 miles across Poland and 5 other countries, in a show of support to NATO members or a show of force against Russia. NYT:

By the time it is finished, Operation Dragoon Ride, which began a week ago in the Baltics and is due to conclude later this week, will be the longest such movement the United States Army has made across Europe since Gen. George S. Patton diverted his Third Army to relieve Bastogne, Belgium, in 1944.

 

Operation Dragoon Ride, Eastern/Central Europe, Day 4. (Credit: US Army)

Operation Dragoon Ride, Eastern/Central Europe, Day 4. (Credit: US Army)

Also from Arsenal For Democracy on this topic

“Lithuania reactivates interwar paramilitary”
“Poland readies itself to go deep, if necessary”

Film the Police

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When Mike Brown was murdered on August 9th, 2014, something that the US has been trying to hide for decades erupted. In the town of Ferguson MO, years and years of living under oppressive circumstances was brought to a head in the months after the fatal shooting of an 18-year-old teenager who was walking with his friends. There were what seemed like endless and dangerous marches, where protesters bravely stared down armored vehicles and assault rifles, armed with nothing but signs imploring anyone who could read them to recognize the humanity of Black people. All across the country Black people, as well as other People of Color, began to speak louder to get their message across. Despite efforts, it seems as if nothing is changing. In fact things are getting worse, as more and more are being added to the list of hashtagged names of victims of the police’s extrajudicial killings.

Last Saturday, in North Charleston, South Carolina, a Coast Guard veteran named Walter Scott was killed by a police officer who shot him eight times in the back, but claims to have “feared for his life” — a phrase commonly used in these killings. Someone nearby managed to get a video of the shooting, which shows the police officer not only shooting Walter Scott from a distance, but also apparently planting what people believe is the stun gun that the officer claims Mr. Scott had tried to take from him.

Walter L. Scott was killed on April 4, 2015 in North Charleston, S.C. (Photo Credit: U.S. Coast Guard.)

Walter L. Scott was killed on April 4, 2015 in North Charleston, S.C. (Photo Credit: U.S. Coast Guard.)

Another video was also released this week of a shooting in Miami FL. In this video, the shooting of Lavell Hall is documented. The police state they shot for fear of Mr. Hall attacking them with a broomstick. In a disturbingly familiar turn of events, Hall’s mother had called the police in the first place because he was schizophrenic, and she was hoping they would take him to a mental health facility. In the video, there’s no broomstick seen, and Mr. Hall is running away from the police.

In a break from the normal course of events, after Walter Scott’s death — or at least after the subsequent release of the video of his murder — North Charleston’s police department has taken quick action, something that is rare in police-involved shootings where the officer is the shooter. After release of the video on Tuesday, Officer Michael Slager was arrested and charged with the murder of Mr. Scott. Whether or not he will be put in jail for the crime is another story, but it doesn’t seem as if Officer Slager will be able to get much help, as a crowdfunding attempt for him was already rejected by GoFundMe.

With more and more people willing and able to pull out cameras and record police brutality, you would think that would mean less frequent incidents of police brutality, but that doesn’t seem to be the case. Many people during the Ferguson protests, as well as at other protests for victims like Eric Garner, had their phones confiscated from them during confrontations with the police. Eric Orta, the man who managed to get film of the police harassing and ultimately killing Eric Garner, was arrested shortly after the video was released. The police solution seems to be suppressing the exposure, not ending the problem.

Despite the efforts of so many people, it seems that these murders, arrests, trials and even news coverage of these events are only making baby steps towards progress. Many people, specifically people of color and especially Black people, are left to wonder when will it end. With every passing week and every added name to the long list of those unjustly killed by police, what exactly is needed to convince police departments across the country that there needs to be a sweeping change in the way they handle confrontations? Things like routine traffic stops, as occurred with Walter Scott and so many others, shouldn’t end in the death of unarmed people. Whether their hands are in the air, or they’re running for their life, a Black person’s mere presence shouldn’t be considered life-threatening to an officer with a gun.