Now, It's Come To This?

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“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein

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The gap between the 'haves' and 'have-nots' is getting wider and deeper, yet not many in our National politics seem to care enough to even acknowledge it, much less try doing anything about it.

This article confirms what some have felt was true; that a there are many more Americans in the near-poor category than we wanted to believe. Yet, at some level, many did know all along.

How else would you expect the constant -and sometimes irresistible- pressure to use easy credit to purchase what we want, but don't necessarily need? In turn, this leads to a reliance on credit to obtain even those things we do need!

Because compound interest is a really marvelous invention. - Albert Einstein (1879 - 1955) called it the 8th Wonder - It can work for you, or against you. When you invest it works for you. When you borrow it works against you!

We do need credit, but not an overdose of it. Even more, we need honesty and effective action on the part of those who would be our political leaders!

The latter is certainly not happening, as tuning into any of the current 'debates' about how to reduce our Federal deficit, who will be the Republican candidate for President, how to 'create' jobs, how to repair our crumbling infrastructure, how to reform our increasingly unfair tax system, how to ensure affordable basic health care, how to deal with the proliferation of wars & terrorism, how to strengthen our public education system, how to curtail the rising dominance of corporate & monetary influence in politics, how to deal with climate change, and almost any other issue of universal importance to all citizens.

It should be getting pretty obvious -to everyone paying attention- who is serious about doing anything positive about any of these pervasive problems and who isn't.

Right now, to me, our great experiment in Democracy is on the verge of failure.

Consider for a moment this caution, issued many years ago, then tell me if it hasn't already come true:

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

Now, tell me why you doubt this isn't coming to pass right now. It seems to me that we are having our freedoms constantly eroded by a tyranny of wealth & power that is controlled by the few. Whether that few equates to the 1% of very wealthy & powerful, I don't know, but that seems probable, particularly with the tremendous, growing gap between the few & the many.

That may constitute something of a 'dictatorship' by oligarchy, but by any name it amounts to a form of economic slavery.

I'm reminded of a cartoon which depicted a large, streaming herd of small Lemming-like animals rushing mindlessly toward falling off a big cliff. In the midst of this chaos, one animal raised its head and shouted; 'hey, we're Lemurs! LEMURS!'

At some point, we need to wake up to the signs that we are heading in a similar direction, toward a precipice from which it will become increasingly difficult to even slow down, much less reverse.

Did you know that the folks who used to be called Republicans are now called Democrats?

I don't know what present day Republicans used to be called, but it might have been Tories, a gentle version of King's dupes. That might be too harsh an indictment, but have you witnessed the current crop of Republican Presidential candidates? It's certainly true of most of them!

Newt Gingrich now is polling higher numbers than any of the others? Get serious! A more hypocritical political elite cannot be found. His recent quip about those involved in the 'Occupy' movement was 'they need to get a job, right after they take a bath' is an insensitive cheap shot, designed to appeal to the 'haves' from whom he wants support.

Lest you think I'm just picking on Republicans, there are plenty of folks who call themselves Democrats, Independents, Libertarians, T-Partyans and other names or non-names, who qualify as opportunistic, self-centered elites as well. You know the ones I mean, you see them or hear their screed every day on our public airways like TV, either as talking heads, the frequent guests of talking heads, the faceless owners of talking heads, or those paid by them, brainwashed by them, or otherwise in their thrall.

I'm really tired of the insidious line of propaganda, self-serving commentary and outright BS these people continually spout, but that is what dominates our media these days. That and constant, destructive criticism of the very leaders, institutions and values that are there to help knit us together as a nation. We are a nation, you know. But, we're acting like a bunch of spoiled brats that are constantly trying to climb over one another without regard for anything remotely resembling the greater good.

That type of trajectory is not leading us to sharing anything likely to be sustainable or worthy of our best intentions.

But, maybe that's not important to us any more?

More likely, we're too distracted with making ends meet, or in the case of the privileged 1%, making our next million?

The comparison of our gradual awareness of the effects of inequality to that of a frog being brought slowly to a boil, seems apt. Sometimes trends themselves are not noticed until some tangible benchmark is reached that gets our attention.

I believe the objective of the Occupy movement is to get our attention on matters than have steadily encroached upon us, like growing inequality and indifference to unnecessary suffering that could be significantly mitigated. When taken to their limits, these things will become intolerable, a point we are now beginning to reach.

For example, we hear many complaints about the fiscal stimulus measures taken to help jump start our economy. Here's a 'joke' I received recently from a friend, entitled What is a Financial Bail-Out ?:

It is a slow day in a damp little Irish town. The rain is beating down harshly, and all the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit.

On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a ¤100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some room-keys and, as soon as the visitor has walked upstairs, the hotelier grabs the ¤100 note and runs next door to pay his debt to the butcher.

The butcher takes the ¤100 note and rushes down the street to repay his debt to the pig farmer. The pig farmer takes the ¤100 note and heads off to pay his bill at the supplier of animal feed and fuel.

The guy at the Farmers' Co-op takes the ¤100 note and runs to pay his drinks bill at the friendly neighbourhood pub. The pub owner slips the money along to the local prostitute drinking at the bar - who, in spite of facing hard times, has always gladly offered him her 'services' on credit.

The hooker then rushes over to the hotel and pays off her room bill to the hotel owner with the ¤100 note.

The hotel proprietor quietly replaces the ¤100 note back on the counter, so that the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, states that none of the rooms are satisfactory, picks up the ¤100 note, pockets it and leaves town.

No one has produced anything. No one has earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

And that, dear ladies and gentlemen, is how a basic financial bailout package works!

That joke is amusing, but its intent seems to be to take a shot at the very idea of any sort of bailout.

Is that necessary? After all, all the people involved were rewarded by paying off debts, and the investor got all his money back! What's wrong with that?

The debtors are relieved to no longer be in debt and the wealthy depositor got his money back. What would be a better ending than that? That the wealthy depositor got wealthier?

And, who is that depositor? A tycoon, a Good Samaritan, or a government?

To me, it's the thought -and action- that counts, not the fact that nothing was created but debt relief.

Being in debt is not fun; getting out of it is. It's that simple.

So, have we become so cynical that we discount intended good acts that do much good and little harm? And, do we now value wealth, power and intentional inaction in the face of clear need above basic human kindness, care of society's problems and degradation of our very nests here on earth?

If so, we are experiencing the compound impacts of excessive greed & cynicism, neither of which helps build upon our real values and freedoms.

I hope it hasn't come to this, but there are clear signs that is happening.

If it is, there's a better name for than the 8th wonder of the world!

When nearly one in three in our nation lives in near-poverty, maybe the correct name is more like the fatal wound of the world?

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Local Labor Boss Issues 11th Hour 'Warning'

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Yesterday's Herald carried an opinion piece by David Warren designed to not-so-subtlely dissuade our Mayor and City Council from seriously reconsidering the City's ill-advised 'Big-Box' ban.
You can read this article right here.

Of course, today - the 'ides of June' - is the day that public discussions will be held to reconsider the so-called 'big-box ban, along with other measures to help the City bring its General Fund budget back into a better semblance of balanced.
So, it's understandable that folks who are afraid their ox will be gored, show up to beg, cajole or intimidate our elected officials to do their bidding.
That's OK, and part of the process, as long as our electeds are careful to observe the fractured latin of 'petticoati tyrannus non bossanova', which roughly translates into 'don't let petty tyrants boss you around'

In his piece, Mr Warren:
• disagrees with the Herald editorial board that the 'big-box' was really targeting Wal-Mart [it was]
• tries on a 'green suit' in an effort to court sustainability fans [not his color]
• rails against any corporation who dares to get too big, resist unionization, go bankrupt, pay less than family wages & benefits, lays off workers, or leaves an 'empty' building behind [welcome to America]
• claims -unconvincingly- he is not an 'anti' Mayor Pike [huh?]
• applauds the City for searching for 'creative ways' to solve the current severe revenue shortfall, without offering any plan himself for reducing expenditures [kinda hard, isn't it?]
• avoids mentioning entirely the furlough plan now being considered by Whatcom County [inconvenient & unpleasant]

Can you see a pattern here?
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As the chief architect of the hasty and unwise so-called 'big-box ban', Mr Warren's response is predictable.
Perhaps, he has another remedy in mind for the city's major revenue shortfall, which is partly due to loss of sales taxes from big box stores, including Wal-Mart, itself the largest single sales tax source?

As president of the Northwest Washington Central Labor Council, Warren wields inordinate power, not only over the 85% of City employees who are members of nine different unions, but over elected officials dependent upon the support of organized labor.
Is he sending a 'message', designed to influence officials and candidates during the upcoming elections?
After all, union bosses are sometimes noted for their strong-arm tactics, as I personally experienced after my opposition to both the so-called 'living wage' ordinance, the 2004 budget shenanigans and the big-box ban.
Those tactics didn't work very well on me, but they did on 4 or 5 Council members, and the mayor at the time.

And, you know 4 of those Council members are still around.
[drumroll, please]
rat-a-tat: Louise Bjornson
rat-a-tat-tat: Gene Knutson
rat-a-tat-tat-tat: Barbara Ryan
rat-a-tat-tat-tat-tat: Terry Bornemann

Of course, that's not to say other Council members, Mayors, mayor-wannabe's, or candidates couldn't be similarly 'persuaded' by Mr Warren to do his bidding, either

Hey, no one blames Mr Warren for doing what he is paid to do, but he is not an official who is elected by the public, or necessarily represents them as a first priority.

Maybe Warren does have a plan to reduce the substantial union contract wages & benefits that have been negotiated over time?
Something like that would certainly help the budget situation more than any other responsible act the City could take.
That's because the great majority of the General Fund is comprised of mainly employee wages & benefits.
Much as we might like to shift those monies around, there are laws and mandatory government accounting practices that prevent us from doing so.
Sometimes, it is possible to borrow from Peter to pay Paul. But Peter needs to be paid back. And, what about Mary?

I cannot imagine anyone doubting that the City's employees are its main asset!
That is why a voluntary wage & benefit reduction plan would respond best to the short-term problem, as well as long-term sustainability.
But, I'm not holding my breath for that to happen.
More likely, Mr Warren and his ilk will push to have any budget cutting happen 'somewhere else', even though there is 'no where else' that can be legitimately cut - to the extent needed.

And, I seriously doubt the City has ANY plans to sell real estate to big box stores.
That is simply ludicrous and designed to appeal to emotion, not facts.
Besides, most available property is not owned by the City, but by private interests.

The fact is, the big-boxes are already here, and have been here for some years.
Plus, I have heard NOTHING about totally rescinding big-box regulations, and Mr Warren should know that, if he doesn't already.

One other point, this article purports to be about so-called 'big-boxes, but that doesn't wash.
It IS about Wal-Mart, pure & simple, as it has been from the start.
Expanding Wal-Mart to 'big-boxes' was necessary for the legal cover needed to 'legitimize' the unwise measure initially approved by the City Council.

Citizens may wish to understand that our local 'big-boxes' also include Target, Costco, Home Depot, Lowe's, Fred Meyer and others, of course excluding the now defunct Circuit City and any others that may not yet survive these tough economic times.
But, methinks Mr Warren would really rather not open this discussion more widely, preferring instead to stonewall wage & benefit gains already achieved.

And, don't forget those 'big-box' bragging rights, either!
Hey, did you know Bellingham was the first city in Washington to adopt an anti-Wal-Mart -er, 'Big-Box' - ordinance?

One last question; If Warren feels so good about Costco, why include them in the 'Big-Box' ban?
Is it Catch-22 time?

This is the time of year when the heat starts getting turned up on the local government griddle!
Good luck, Council.
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Pork Barrel Heaven: Reflections on the City’s "Living Wage" Ordinance

With the recent announcement of the G-P Tissue Mill finally closing down, with the loss of 210 more truly Family Wage jobs, and with the continued adverse trends of increased poverty levels and un-affordable home prices, it may be appropriate to revisit discussions that started 5 years ago that somewhat related to addressing these problems at the local level.

Because this particular Ordinance impacts the City's budget, but without measurable compensating benefits, it is fair game for scrutiny.
As the article reprinted below demonstrates, this unplanned, un-prioritized and unfunded measure is a 'poster child' example of what can happen when citizens aren't paying attention to the forces at work to influence Council decisions.

In its initial version, this Ordinance was estimated [by Finance Dept & Human Resources] to cost the City over $450,000 ANNUALLY. That amount is currently the equivalent to about 3% in new property taxes!
Of course, the Council can only authorize by itself, a 1% increase in property taxes each year, without a public vote.
Fortunately, the estimated costs per year were reduced in the final version to about $56,000, but because no accounting was provided for, even this remains an estimate.

But, it was not only the ongoing fiscal impacts that were so troubling to me; it was the short-sighted arrogance, driven by organized labor's hidden agenda that was so brazen!
This was mainly a 'feel-good' measure, that was admittedly symbolic in nature; but also one that had hidden costs and other impacts that do not help anyone at budget time.

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Just after this Ordinance was passed, I published this Herald Guest Editorial - Circa November 2002:

Aren’t there better ways of achieving the goal of providing more livable wage jobs?

The so-called ‘Living Wage’ ordinance recently passed by City Council supports the Eric Severeid theory; that often a chief cause of problems, are the very ‘solutions’ that politicians devise.

A more accurate title would have been "Minimum Wage" ordinance, but this title was avoided because it loses the cachet of popular appeal.
As supporters of this measure readily admit, it is mostly symbolic and will do very little to actually achieve its professed goal. Let's go a step further and say it will likely just hurt taxpayers by perpetually saddling them with more unnecessary taxes and creeping bureaucracy.

Every City Council member strongly supports the goal of providing more living wages for our community.
But major differences do exist in the methods advocated to achieve this goal.
Without carefully targeting those recipients who are most in need, the effectiveness of this ordinance cannot even be measured.
This is certainly not the kind of law likely to honestly achieve its stated goal.
Whose interest is served by expediting such a symbolic 'shotgun' approach, calculated to attract a bare majority of Council votes, plus the Mayor's blessing?

H.L. Mencken once said that every complex problem has at least one simple solution – which is absolutely wrong!
By passing such a ‘pseudo solution’, more is promised than can be delivered, and already scarce tax money is wasted.
The $55 thousand dollars per year estimated price tag represents the equivalent of about one-half percent property tax increase, or half the amount the Council can legally raise each year without a citizen's vote.
If the Council wants to give this money to people truly in need, why not just award it to the Opportunity Council, or another deserving non-profit with desperate needs?

Recently, a local economist described such inherently futile efforts as examples of the ‘Lake Wobegone Scenario’.
Like that fictional Minnesota town, where ‘all the women are strong, the men are good-looking and the children are above average’, this ordinance rests on a false ‘Alice in Wonderland’ economic theory that suggests we can simply tax and spend our way out of complex problems.
That is wishful thinking.

The most troubling part of this process was that it was mostly conducted in a few Council discussions.
Although these are public meetings, this is typically not an effective way to meaningfully involve those citizens who will later have to pay for resulting programs.
Since this measure is to be funded from existing accounts already earmarked for other purposes, additional revenues will need to be found to make up the shortfall - meaning still more taxes.
It is ironic that the Council was also expected to approve a one- percent property tax increase the same night this ordinance was so hastily passed.
If both measures had passed, over half of the property tax increase would have already been committed to paying for this ordinance.

A wider and more candid discussion, involving the community, might have revealed, and avoided, an unstated objective; that of establishing the precedent of a higher minimum wage to give organized labor a greater leverage in bargaining with the city.
Hidden agendas like this are sometimes disguised as ‘Trojan Horses’, designed to finesse the approval of ‘unintended consequences’.
The understandable reluctance of city officials to openly discuss this sensitive, and potentially very costly, aspect of the issue may have unintentionally aided and abetted this tactic.
Backers were simply able to pass this ordinance with a combination of friendly persuasion and old-fashioned arm-twisting.

Everyone knows it is the duty of public officials to avoid conflicts of interest and not violate the appearance of fairness when engaged in official business.
Our state sunshine laws are designed specifically to insure their accountability to the public.
Unless a consistently careful and balanced approach is followed on all public business, criticism and distrust are invited.

Aristotle was right when he considered politics to be a practical, but inexact science.
Unfortunately, politics has also become a symbolic dirty word because of adverse public perceptions.
Good perceptions are difficult to gain, but easy to lose.
Much more public discussion and deliberation is needed to make effective progress on this important issue.
Additional taxes, if required, should be raised by a public vote.
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Two years later, in December of 2004, I considered proposing this ordinance be rescinded as one item on the list of budget cuts to be considered for the following year's budget.
But, because no one really knew how much this 'Living Wage' Ordinance actually costs the City, and that four Council votes were still there to defeat the idea, I didn't bother.
But, here were my thoughts anyway:

[Recall that this measure was passed 4-3 after hot debate, even though its estimated effect was to add approximately $56k in costs in the first year]

I continue to have serious concerns in several areas regarding this ordinance:

1.The rates themselves, while well intended, are artificially high for our local economy.
The skills which warrant such rates are already demanding them in the marketplace, and without City subsidy.

2. The City has no mechanisms for:

• capturing the actual additional costs being incurred each year, whether they occur in the General Fund or not

• insuring that contractors & subcontractors are actually using this ordinance to develop bids for City work

• insuring that contractors & subcontractors are actually paying their employees these rates

• insuring that Whatcom County and Bellingham residents are the primary recipients of these wages

• insuring that recipients are truly heads of household, permanent employees or other classes of people needing such financial assistance

• regularly auditing the effects of this ordinance and paying for these costs

3. The rates have the overall effect of increasing costs without any discernable increase in the services received.
In so doing, they may amount to a gifting of scarce public funds to unknown persons

4. The rates themselves exceed other rates paid to City employees, thereby causing salary compression and potential discontent in the work force

5. The precedent set by establishing these rates has the effect of giving more leverage to collective bargaining units, which then tends to increase pressures on escalation of wages and benefits generally

In my mind, this is not responsible legislation and it adds unnecessary costs to our already overburdened General Fund.
I don't know the exact provisions of reconsidering ordinances, but recommend further researching this question.
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Unfortunately, the 'Living Wage' Ordinance still stands to this day, costing taxpayers an unknown amount for unknown services.

I wonder if the new Council and Administration will do anything about rescinding this Ordinance and relegating to the scrap heap of bad law where it belongs?