Saturday, March 14, 2009

New Funding for Amtrak a Blessing

What a breath of fresh air that we finally have an administration that supports Amtrak. The beleaguered rail system has been demeaned and starved for so long it’s amazing there’s anything left of it. Now, perhaps, it can start serving a broader purpose and take some of the pressure off air travel and its gargantuan environmental footprint. It’s been hard to find much sympathy for Amtrak among the general public, so effective has been the propaganda against it. But one circumstance in particular has always provided an opportunity to think more charitably about the virtues of rail: weather-related delays at airports. Having been a victim of innumerable such delays (mostly at O’Hare, which seems to be in an eternal bad weather vortex) I have never wasted the chance to suggest to my fellow sufferers that now would be a good time to call their members of Congress and ask for new investments in Amtrak. I point out that for shorter trips—less than 500 miles—train service could be a lot more efficient and less time-consuming than air travel with its long security lines, advance check in times, and predictably unpredictable delays.

Amtrak suffers from numerous problems, or course: degraded tracks, aging equipment, and second-class status to freight traffic on east-west routes. The factor of second-class status is a huge one, and one of the greatest detriments to the system. Rarely does any east or west-bound Amtrak train arrive or leave on schedule; and this unreliability factor is like a death sentence in a world where most important activities—business meetings, vacations, family events—abide by firm schedules. In Europe the trains tend to run on exact schedules, and they often ride on state-of-the-art tracks at speeds double or triple what an automobile could achieve. But here in the US, where the mystique of the “rugged individual” (and its partner “personal freedom”) has been used for years to deny public support for things like trains and health care, trains usually run on degraded tracks, at 19th century speeds, and on schedules so undependable that ridership is limited mainly to those who are afraid of flying, or who love trains for their own sake.

Imagine if we had trains running east west at 150 mph. DC to Pittsburgh would take about two hours. Chicago to DC would take about 5 hours. A cross-country trip could be completed in one day with a single overnight. I happen to like Amtrak trains already, even though most of the equipment is aging. I like the freedom to get up and walk around, the convenience (if not the offerings) of the cafĂ© car, the electric sockets for charging computers and cell phones, and the sense of community that I often feel (people tend to be a lot more relaxed on trains than on airplanes). I also like the absence of heightened security and its associated lines and inconveniences (isn’t it fun to remove one’s shoes at the airport!). Wouldn’t it be wonderful if our trains felt as clean and modern as most airplanes? And think how much we could cut CO2 emissions: a passenger on a train requires about 1/10th the greenhouse gas output compared to one traveling by plane.

So, all I can say is it’s about time! And let’s not stop with small investments in Amtrak. Let’s invest enough to fix the big problems and make train travel the mode of choice for all Americans.

Friday, March 13, 2009

The Tone of Political Debate in America

I spend probably too much time following a number of issues in the news with which I have been involved as an activist over the years: the fate of the Vermont Yankee nuclear power plant, campaign finance reform, health care reform, the war in Iraq, corporate governance, fishing conditions on the Chesapeake Bay (!), and others. Google News Alerts is both a blessing and a curse in this regard, for my inbox is daily deluged with links to news articles that I usually cannot resist reading. As everyone reading this must know, most on-line news organizations now offer opportunities to comment on the story at hand, and lots of people avail themselves of this opportunity. This interactive on-line feature provides the potential for a wonderful public forum, where alternative perspectives and opinions might be aired and explored. But all too often these venues are dominated by polarized spitting matches between people who sound like they have listened to too much Rush Limbaugh or watched too much Keith Olbermann.

I find this trend to be very disturbing: it seems dehumanizing at its core when the rhetoric descends into insults, name-calling, stereotyping, and vitriol. Not that I haven’t laughed from time to time at some of the more outrageous tirades, like Al Franken’s book a few years ago, “Rush Limbaugh is a Big Fat Idiot.” But what we see in today’s talk radio hosts and TV commentators—mostly on the right—is not an attempt at humor, but hate speech, pure and simple. Embarrassed leaders like Republican Party Chair Michael Steele may try to make light of it by calling such demagogues “entertainers,” but the demagogues themselves take it a great deal more seriously, as demonstrated by Rush Limbaugh last week rejecting that demeaning title (entertainer) and quickly forcing an apology from Steele. Rush, evidently, relishes the de facto role as party leader that Rahm Emanuel has so cynically (or cleverly) thrust upon him.

Political gamesmanship aside, however, what is truly disturbing here is that millions of people are apparently taking license from their political opinion leaders to indulge in the same kind of disrespect and hate-mongering in their own forays into the public square. With Rush Limbaugh and scores of other talk show hosts legitimizing a sub-basement standard of “political dialogue” for more than 20 million listeners, it shouldn’t be too surprising, perhaps, that unreasoned contempt and overt bigotry have become increasingly common in on-line forums. But it is disturbing, nonetheless—especially when people on the other side of the issue at hand fall into the same obnoxious behavior. Is this healthy? Is it, perhaps, a harmless way for people to vent their extreme frustrations in a failing economy and a world where “moral certainty” increasingly leads to devastating outcomes? Actually, I think it is unhealthy, like a cancer in our social fabric. I try to dispassionately call it out when I see it and to set an example of evenhanded calm in debate (though I fail at this from time to time), but I don’t really have a clue how to stop it. Wasn’t this one of those things we were supposed to learn in Kindergarten?

Tuesday, March 10, 2009


It is wonderfully encouraging to see that the Obama Administration's new trade representative, former Dallas Mayor Ron Kirk, is drawing a hard line on the enforcement of labor rights and environmental protections by our trading partners. (See: This is how we can "export" our treasured American values of freedom, fairness, and human dignity. The laws we have in this country should apply equally to the countries that we trade with. In the heat of the Iraq war the administration said "We don't torture" but then turned over prisoners to Syria, Egypt, and other countries, knowing full well that they would be tortured. (The administration, in some cases, even relied on "confessions" obtained under torture in other countries.) Obviously, this was a subversion of our values. If we don't torture we can't use other countries to do the torturing for us!

The same principle should apply to the exploitation of labor and environment. If we don't exploit labor ( theory, anyway) we can't allow other countries to do the exploiting for us. But that is exactly what has occurred under globalization and "free trade". We get most of our consumer goods from countries where working conditions, wages, and environmental degradation are so bad they would never be allowed in the US. Yet, our willingness to ignore those conditions as long as we could get cheap consumer goods has enabled and encouraged horrendous abuses. Obama and Ron Kirk are on the right path to restoring the US as global leader of freedom and democracy by insisting that our trading partners rise to acceptable standards in the way workers and the environment are treated.


Sunday, March 8, 2009

The Opportuntity to Create a Sustainable Economy

With all the rush and anxiety to get our economy (and the world economy) moving again we are at risk of losing an opportunity to redesign from the ground up the way the economy works. After all, what good would it be to recreate the same unsustainable, excessively consumer-driven system that we already know has been destroying the ability of the earth’s ecosystems to sustain life? In response to the crisis, American families seem to be following a logical course: reducing spending and personal debt and increasing personal savings. Banks and businesses are doing the same thing, and with good reason. Because so much of Wall Street value turns out to have been based on fraudulent (or at best, highly leveraged) transactions, it is natural for individuals and institutions alike slow down and look twice before leaping back into a “business as usual” scenario.

Unfortunately, as a result, millions of people have lost their jobs. And as the economy stalls and tries to find a new footing, millions more jobs will be lost. The question is, what kind of new jobs will be created for these legions of unemployed to fill? The opportunity before us is to encourage the development of new businesses based on principles of sustainable development. And it is not a small opportunity! Let’s start with energy efficiency. For decades we have been wasting unconscionable amounts of energy in the way we heat and cool our homes, businesses, schools, and public buildings. The market for retrofitting buildings with energy efficiency improvements—from weatherization and lighting to appliances and insulation—is enormous: hundreds of billions of dollars in the US. Some states are taking the lead on this. Vermont has led the way with an “efficiency utility” that has dramatically cut the cost of energy bills for many homes and businesses, and the Maine legislature is now considering two bills that would boost investments in energy efficiency and help underwrite the advancement of a multi-billion dollar efficiency industry, creating many thousands of jobs just within the state of Maine. (See Other states should follow suit, and the federal government should support and encourage these efforts.

The production of electricity is another area where huge strides could be made. Traditional coal, gas, and nuclear power plants are unbelievably inefficient. Even at peak efficiency, only about one third of the embodied energy from the primary fuel source gets converted into electricity. The rest goes up the smokestack or gets released into the environment as waste heat. Then, because of voltage losses in hundreds of miles of power lines, a tenth or more of the electricity that is generated gets lost in transmission. Even more disturbing is the fact that traditional coal and nuke power plants are designed and run at full power, and they burn up fuel day and night at the same rate whether the electricity is being used or not! Needless to say, a revolution in the way we produce and use electricity is urgently needed; and it offers the promise of a new multi-trillion dollar, high-tech industry. There has never been a better time for Washington to reset its priorities and policies on energy.

Other areas with enormous potential are ecosystem restoration and adaptation to the impacts of global warming. Sometimes these are one and the same. For example, the increasingly extreme storms attributed to climate change are overwhelming municipal waste-water and storm-water systems, causing degradation of our lakes, rivers, and coastal areas on a massive scale. The EPA estimates that nearly $400 billion is currently needed to upgrade these systems throughout the US. Other job-creating ecosystem restoration projects include cleaning up toxic sediments in rivers, harbors, and industrial sites, restoring and preserving wildlife habitat, and finding and retrieving abandoned fishing gear in coastal waters and estuaries like the Chesapeake Bay and Gulf of Maine. Taken together, these kinds of projects can create many hundreds of thousands of jobs nationwide and provide enormous societal benefits such as clean drinking water, swimmable beaches, and revitalized fisheries.

There are many other industries where reforms and re-invention could boost efficiencies and create jobs, including transportation, health care, education, and agriculture. But at the bottom line, we come back to consumer behavior. Under our current system, over-consumption is not only encouraged, it is subsidized by political policies that enable the exploitation of labor and resources by many of our ‘trading partners”--countries whose governments do not care about human rights, justice, fairness, or human dignity. This laissez-faire policy approach, which is so undermining to American values, has also undermined our nation’s ability to provide the basic goods and services upon which we all depend. We have largely exported to other countries the means of production for everything from clothing to electronics, and now we are even at risk of losing our ability to manufacture automobiles and many of our basic foods. Public policy and consumer behavior need to evolve hand in hand. Consumers are already focusing more on necessities, which is natural in a recession. But public policy should quickly adapt to encourage this more conservative form of consumer behavior while raising the bar with market signals to our trading partners to clean up their act. For example, we should stop importing goods and services from third world countries where laborers work in virtual slavery.

Finally, as this enormous restructuring of our economic system takes place, the government must ensure that individual families are not cast into poverty and homelessness, and that the out-of-work workforce is quickly trained to fill the jobs that a new, sustainable economy will create. The challenge is great, but the opportunity is greater. No one likes change: as long as the status quo was reasonably comfortable nothing was going to change. But now that things are in turmoil, now that people are already very uncomfortable—this is the time to seize the moment, making the kind of dramatic changes that were politically impossible before. Now is the time to re-engineer our economy—not by micromanagement and central control, but by using the economic power of our government to absorb much of the shock that threatens the well being of American families, and by crafting policies that encourage industries and consumer behaviors that are sustainable in the long run.

Wednesday, March 4, 2009

A Pro-Business Pathway to a Better World

“Competitive advantage” is a key concept for the success of any business in a free market economy. There are many factors that can give a business a competitive advantage, ranging from honest strategies to illegal ones. Honest ones include having a better product or service, having better marketing and advertising, or making efficient use of resources to keep costs down. Less honest factors include using political influence to get company or industry-specific tax breaks and subsidies, or waivers from compliance with environmental standards. And, too often, companies go over the edge into unethical and illegal activities like union busting, illegal dumping of toxic waste, bribing public officials, conspiring to fix retail prices, or—in the case of the Mafia—simply bumping off one’s competitors.

It is natural for any company to use all the advantages available to it by law, and most companies push the envelope a little about the exact letter of the law. In fact, company officials have a fiduciary obligation to their stockholders to maximize profit, so they are always looking for new ways to do that. But when federal law creates a certain standard to which all companies in a particular sector are held, then that factor gets taken off the table and none can use it as a way of gaining competitive advantage. For example, no automobile manufacturer is allowed to gain a competitive advantage by eliminating seatbelts or reducing air pollution controls. So society is better off and no individual company is harmed. This is an appropriate role for government.

But the government has fallen short in two areas where it could be a great deal more proactive in protecting society from corporate practices that are damaging. The first of these is the cost of labor. Corporations have argued since time immemorial that the cost of labor should not be dictated by government. But if all corporations were held to the same minimum standard, none would be able to use the cost of labor as a way of gaining competitive advantage. The same concept applies to environmental regulations. Forward looking businessmen could take the lead on this and engage with government to create uniform labor and environmental standards that would better serve society, pressing for a ‘living wage” (sufficient to lift all full time workers out of poverty) without giving a competitive advantage to any one company.

Uniform standards, however, are much more difficult to develop and enforce in a global economy, thanks in large part to President Clinton’s rush to pass global free trade treaties in which labor and environmental protections were almost completely ignored. Nonetheless, if we can ban the import of illegal ivory, we should be able to ban the import of goods manufactured by companies that exploit their labor force or trash the environment. The regulatory and enforcement infrastructure needed to implement such a program would be expensive, and the price of consumer goods would certainly rise, but the benefits to society everywhere would be well worth the cost.

Further, by having product prices reflect their true cost (rather than keeping prices artificially low by “externalizing” the costs of human suffering and environmental degradation), consumers would be encouraged to focus more on necessities and less on the trivialities that have so cluttered up our world. As a result, our collective quality of life would rise, even though our “standard of living”, as narrowly defined by how much stuff we can buy, would likely take a dip. It’s sometimes difficult to imagine a world where everyone could have a good paying job, where no one has to starve, and where society works collectively to protect the precious ecosystems upon which all life depends. But if labor and environment were taken off the table as factors by which companies gain a competitive advantage, we would make great strides in that direction. Will the new Obama administration have the vision and courage to do this?


Sunday, March 1, 2009

Locks Are For Honest People

In high school I had an English teacher who was fond of saying “Locks are for honest people.” This odd phrase always raised questions among my fellow students, and the old man delighted in explaining that criminals simply use bolt cutters! Obviously, a lock provides little protection from a criminal armed with bolt cutters. On the other hand, “honest” people—people who might otherwise be tempted into mischief—are easily deterred by a lock. Later in life I figured out that this same principle applies to laws. There are some incredibly honest and sensible people who don’t need the constraint of laws to ensure good behavior, but most of us need things like speed limits and the threat of punishment to keep us at reasonable speeds on the highway and to encourage us to file our taxes.

Recently, it has become clear that this principle should also apply to corporate and financial regulations. Former Federal Reserve Bank Chairman Allan Greenspan famously admitted in the midst of the financial crash that he had been wrong in his assumption that bankers would self-regulate for their own good. Bankers, stockbrokers, mortgage lenders, insurance salesmen, and corporate executives of all stripes, just like other “honest” people need some form of constraint to keep them from slipping into unethical or criminal behavior. And herein lies the great failing of the Republican approach to business and finance.

Republicans tend to view regulations as burdensome constraints that hinder business and stifle economic growth. This view might be substantiated in extreme cases where there is an excess of regulation. (For example, I remember trying to cash a check in India a number of years ago and watching in dismay as nearly a dozen clerks spent a half hour scurrying around making entries by hand in as many different journals before I could receive my money). Unfortunately, politicians are adept at using extreme examples to discredit policies that they don’t like. Reagan very effectively picked on a couple of notable welfare cheats to characterize the entire welfare system as corrupt. But using an exception to promote the opposite is both disingenuous and foolish. Would anyone—even a Republican—use excesses of police violence to suggest that we should have no police at all, or the disgrace of Abu Ghraib as reason to disband the US Army?

But that is exactly the kind of thinking Republicans have applied to all functions of government related to taxes, business, and finance. Their creed is “hands off!” But the result has been catastrophic. Without the constraints of regulation and enforcement, many business executives have slipped over the ethical line to become con men, liars, and cheats. Credit card companies routinely use small print and bait and switch tactics to charge outrageous interest rates and impose unjustifiable fees and penalties. Mortgage brokers lie with impunity, making millions by talking unsophisticated homeowners into ruinous mortgages. CEOs bend accounting principles to create a false appearance of company value. Corporate board members rubber stamp policies and unbelievably excessive executive salaries and bonuses while being paid hundreds of thousands of dollars per year for their “wisdom and oversight.” Corporations, originally licensed strictly to serve the public good, act without conscience and without ramifications as they exploit workers and dump poisons into our rapidly deteriorating environment. Not every businessman is dishonest, of course, but the trend has been depressingly consistent.

Anyone who has watched “It’s a Wonderful Life” remembers how the charming town of Bedford Falls transforms into Pottersville, a horrid, squalid and depressed rural dump, when Mr. Potter, the conniving and miserly businessman, wrests control of the local bank from Jimmy Stewart’s character, George Bailey. It is a shocking scene that brings Bailey to his senses. His former friends, in the desperation of poverty, have become mean spirited drunks, gamblers and prostitutes; it’s only one step away from the wretched slums of Mumbai in "Slumdog Millionaire."

But Pottersville is the extreme Republican vision for America—the logical outcome for a nation where the rich are super rich, and everyone else is destitute and miserable. Is this a vision that any true American can embrace? I don’t think that even most Republicans could stomach such a perversion of the American Dream. Now that the Republican vision has had its day, and has been shown a dismal failure, it is time to redesign the way business and finance operate in America. We must provide sufficient regulations and enforcement to keep the world of business honest. Otherwise, even some “honest” men and women will stretch the rules, lose their moral compass, and eventually take themselves, our country, and the entire planet down the road to ruin.


Hooray for Barack Obama's Plan

Hooray for Barack Obama’s new direction, and his bold initiative to make the super rich pay their fair share. Predictably, Republicans are calling it class warfare, forgetting that it was Reagan and Bush who declared war on the poor and middle classes by slashing taxes on the wealthy and declaring that greed was good. It is no secret that the richest Americans have grown considerably richer under Reaganomics, while the poor got poorer and the middle class lost ground. Not only did the Republicans shift the tax burden away from those who could afford it and onto the backs of those who could not, they also gave license to criminals and con artists on Wall Street and in corporate boardrooms by cutting regulations and enforcement. With greed given virtue status and a no-holds barred approach to business and finance, the Republicans turned the US economy into a high-stakes casino where ethics and common sense were both thrown out the window.

The spectacle of Enron energy traders gleefully cheating California electricity markets was emblematic of the Republican-inspired business culture, while the Ponzi schemes of Bernie Madoff, Allen Stanford, and perhaps hundreds more like them are the logical outcome of a deregulated environment. Once respected financial firms jumped into the game by throwing caution to the wind and leveraging their clients' investments at ratios of 30 or 40 to one. The appearance of wealth that these radically irresponsible practices created was nothing more than an illusion—a house of cards that could only be sustained by the impossibility of continuous growth and unlimited profitability. They turned the economy into a giant Ponzi scheme, doomed to fail as soon as credit and trust in the markets took even the smallest downturn. Yet, incredibly, most of those who were responsible—the CEOs, the Wall Street traders, and the politicians who gave them license to steal—will keep their ill-gained wealth while millions of workers suffer the loss not only of their dreams, but of their jobs, retirements, health insurance, and homes.

The Republican ideology and worn out slogans of “tax cuts and small government” are now thoroughly discredited, and Obama is right to claim a bold mandate for change. Huge investments are needed to pay for the debts created by the gambling losses of the super rich. And those who have benefited, and continue to benefit by the protections of free markets and a law-abiding society, would do well to appreciate the special privileges afforded them, and see as their patriotic duty the repayment of the nation’s debts.