Update from the Heartland
No.574
10.12.12 – 16.12.12
Blog version: http://heartlandupdate.blogspot.com/
To all,
The follow-up news items:
-- Japan scrambled a section of interceptors, most likely
F-15Js, from Okinawa after a Chinese state aircraft of unspecified type
penetrated Japanese airspace over the disputed Senkaku Islands [567]. The PRC has apparently decided to increase tension over the
ownership of the islands and risk armed confrontation with Japan, which is
consistent with their aggressive stance from the South China Sea to the Yellow
Sea. The Japanese Ministry of Defense indicated the incident was the first
violation of Japanese airspace by a PRC aircraft since at least 1958.
“A gayer approach to marriage – Everyone might do well to
take a same-sex-marriage approach to nuptials, starting with not taking them
for granted”
by Meghan Daum – Op-Ed
Los Angeles Times
Published: December 13, 2012
The Daum Op-Ed article highlights a recently discovered prenuptial
letter of sorts from Aviator Amelia Mary Earhart to Publisher George Palmer Putnam
prior to their marriage, and comes on the same week as the Supreme Courts
announcement that they will hear arguments in two of the most prominent of the
many non-heterosexual rights cases – United States v. Windsor [No. 12-307]
and Hollingsworth
v. Perry, [No. 12-144] [530]. For those who have listened to my
yammerings over the years, I have been and remain a state’s right citizen; I
urge autonomy at the lowest possible levels of governance. However, this Grand Republic was NOT
founded as a bulwark for independent state action on all issues. Granted, the boundaries between federal
and state authority have been blurred over the years; yet, there is one aspect
that has remained constant – each and every citizen’s fundamental right to
“Life, Liberty and [his/her] pursuit of Happiness.” I cannot miss the opportunity to add every citizen’s
fundamental right to privacy to the listing. When it comes to private conduct that does not include
injury to anyone, an individual’s freedom exceeds the State’s authority, absent
a compelling state interest, for intruding or imposing upon a citizen’s private
domain.
Ambassador Dr. Susan Elizabeth Rice, PhD, 48, withdrew her
name from consideration to succeed Secretary of State Hillary Clinton. To be blunt, I am seriously
disappointed in Senator John McCain of Arizona; I truly believed he was a
bigger man. His parochial partisan
attack on Rice was uncharacteristic of a combat-veteran and elder statesman,
and more akin to the raging bull antics of Senators Jesse Helms or Joe
McCarthy. The Senate’s advice and
consent mandate under the U.S. Constitution, Article I, Section 2, Clause 2
is not a popularity forum. The
issue before the Senate should be whether a candidate is qualified, not whether
they agree with her politics, her affiliations, or even her opinions. Secretary of State is a Cabinet-level,
executive staff position answerable to the President of the United States, not
the Senate and not Congress. There
is no doubt in my little pea-brain that Ambassador Rice was well qualified to
be Secretary of State. Senator John
Forbes Kerry of Massachusetts, 69, now becomes the leading contender according
to the Press. Frankly, I believe
Rice would have made a far better secretary of state than Kerry; but hey, that
is just me.
The whole world knows the details of the Sandy Hook School
tragedy in Newtown, Connecticut, so I do not need to recount them here. These events invariably instigate calls
for stricter or complete gun control by the State, and the aftermath of this
event is no different. In an
emotional White House press conference, President Obama admonished us, “[W]e're
going to have to come together and take meaningful action to prevent more
tragedies like this, regardless of the politics.” I absolutely agree with the President, although my concept of
action is probably not the same as the President’s ideas.
In
an odd twist of events, three days prior to the Newtown massacre, the 7th
Circuit Court of Appeals in the case of Moore v. Madigan [7CCA nos. 12-1269, 12-1788 (2012)] struck down the Illinois
concealed-carry law.
While
these tragedies are heartrending and deplorable, the perpetrators are sick,
deranged or consumed people who execute these events. This is not and never will be about inanimate firearms, or
the 2nd
Amendment, or anything other than the perpetrator’s crimes. There are a variety of lame reason
disturbed people do these horrific deeds; there are invariably signs, which are
often, if not always, ignored by citizens exposed to the signs. Let us focus our ire and motivation on
the real root cause(s). Two
primary issues attract my attention: 1.) parental accountability, and 2.)
community involvement. These crazies do NOT spontaneously combust. If we want to stop these perpetrators,
let us go after the root cause, NOT just one of the symptoms. The notion of impinging upon the 2nd
Amendment for ALL
citizens because there are a few deranged individuals who their families,
neighbors, co-workers, and communities choose to ignore is simply NOT
acceptable in any form. I readily
acknowledge that more than a few citizens are not comfortable with firearms,
are downright scared of firearms, and do not want anything to do with
firearms. I fully support and will
defend their choices for their lives and their families. All I ask is they respect and defend my
choices. As long as we hold
mindlessly to our “mind your own business” and “no snitches” mentality, we must
endure these terrible episodes. I
have no intention of relinquishing my 2nd Amendment rights because other
folks choose to ignore the signs before them. These crises are NOT about assault rifles; they are always
about bad parenting and/or community complacency. We cannot afford to get this wrong.
There
is little the Federal government can or should do, since violent crimes are
predominately state offenses and mental treatment is a state issue. Congress could pass a resolution to
establish a standard or objective for the states, but action at the individual
level remains a state responsibility.
We must not blame firearms as an easy symptomatic, knee-jerk target. We must intellectually overcome the
stigma of mental illness and get serious about mental illness treatment. Perhaps, PPACA can be enhanced to
enable intervention treatment for those who display the symptoms. Let us take the correct path, not the
easy route that will ultimately be ineffective. We must intercede before disturbed men can act, rather than
pretend prohibitions on the implements of their crimes will solve the problem.
"The foundation of national morality must be laid in
private families."
--John Adams, 2.June.1778
From the Patriot Post:
"Before a standing army can rule, the people must be
disarmed; as they are in almost every kingdom of Europe. The supreme power in
America cannot enforce unjust laws by the sword; because the whole body of the
people are armed, and constitute a force superior to any band of regular troops
that can be, on any pretence, raised in the United States."
--Noah Webster, An Examination
of the Leading Principles of the Federal Constitution, 1787
News from
the economic front:
-- The PRC’s annualized exports increased 2.9% in November,
down from an 11.6% in October and well short of forecasts. Imports were unchanged from a year earlier,
decreasing from a 2.4% increase in October.
-- Japan’s GDP decreased 0.9% in 3Q2012, and revised
downward the 2Q2012 GDP to an annualised 0.1% contraction, making it a textbook
technical recession – the fifth recession in the past 15 years.
-- The U.S. Government announced a US$1.9B settlement with
HSBC Holdings PLC to settle allegations the bank ignored red flags about money
laundering, apparently in support of illegal drug cartels, al-Qa’ida, and other
terrorist and criminal organizations.
The settlement includes nearly US$1.3B in forfeiture as part of a
deferred prosecution agreement, which officials said was a record amount for a
bank. Standard Charter PLC also agreed to pay US$327M for the same reason. The settlements are intended to resolve
multiple investigations conducted by the Justice Department, the Treasury
Department and other federal agencies, as well as the Manhattan district
attorney. Two articles give us
better illumination.
“Too Big to Indict”
Editorial
New York Times
Published: December 11, 2012
and
“UK banks hit by record $2.6bn US fines”
by Shahien Nasiripour in Washington and Kara Scannell in New
York
Financial Times
[of London]
Last updated: December 11, 2012; 7:40 am
“Too Big to Indict” is precisely the reason “Too Big to
Fail” must be relegated to the heap of dinosaur bones. Banks or corporations did not make the
decisions that took us into the worst recession in our lifetime. The men, who made those decisions,
broke the law, and they deserve to suffer the consequences of their decisions
as well as forfeit the ill-gotten gains they have enjoyed while the Treasury
paid their bills and kept them alive, and all of us common citizens suffered
for their greed. With settlements
like these, corporations and banks appear to be above the law, not subject to
the same punishment as a common citizen.
Corporations are NOT citizens.
The people in those corporations must be subject to the same punishment
as the rest of us.
-- The U.S. Government is selling its remaining shares of
American International Group (AIG) stock, moving to close the books on the
government’s biggest bailout during the 2008 financial crisis.
-- After the massive settlements noted above, we have a
shimmer of hope. The British
Serious Fraud Office (SFO) and the City of London Police executed search
warrants on three homes in the southeast of England. Three British men – Thomas Hayes, Terry Farr and Jim Gilmour
– have been arrested as part of an investigation into the rigging of LIBOR
interest rates [550/3]. The arrests are the first by
authorities amid a global probe into alleged rigging by bank personnel [552]. Also, British and American authorities are reportedly in the
final stages of negotiations to impose greater than US$1B fine against Swiss Bank
UBS as part of the evolving LIBOR investigation.
-- The Federal Reserve Open Market Committee announced they
would hold rates close to zero while the unemployment rate is above 6.5%, as
long as inflation does not rise above 2.5%. They indicated they would begin buying US$45B of long-term
Treasury bonds each month. The latest stimulus from the Fed will replace an
expiring program to extend its far-reaching effort to revitalize the jobs
market and boost the economic recovery into 2013.
-- In the early morning hours of Thursday, European Union
finance ministers reached a landmark deal that would bring many of the continent's
banks under a single supervisor, in what governments hope will be a major step
toward resolving their three-year-old debt crisis. Unfortunately, the constituent leaders chose to postpone all
major decisions on closer fiscal and economic integration until at least next June.
-- The European parliament and member state negotiators
drafted a deal that would apply to all banks operating in the EU and impose a
1:1 bonus to salary ratio compensation cap, which could be increased to 2:1 with
a supermajority approval of shareholders.
Comments and contributions from Update no.573:
“Roger on the Army-Navy game, a tough end for the Black,
Gold, and Grey. Watched with my
oldest, USMA'09- who was just promoted to CPT, Chemical Corps, U.S.Army last
week- - was able to attend the ceremony.
“Re Social Security- the Government now considers SS as part
of the retirement package for not only Federal workers but the military. That
ways, retirement benefits can be limited or curtailed. They can't have it both
ways, using SS to limit retirement benefits and try to end it at the same time.”
My reply:
Congratulations
to your oldest [USMA 2009] on promotion.
Chemical Corp . . . nasty business. I trust he enjoys it.
Is he stationed at [Fort] Detrick?
Re:
SSA. Good point. Fortunately, commercial industry hasn’t
gone that far yet, and I’m closer to pullin’ the trigger.
Comment to the Blog:
“Thank you for your masterful and appropriate parallel among
change in general, Social Security and PPACA (Obamacare). Ultimately, most
human fears come back to the fear of change, hence the resistance to even the
most helpful changes. If I ever get some spare time, I will look for any
history of nullification and/or secession that has actually worked well in the
Western world. I’m not betting on finding anything at all, though.
“Another interesting bit of history would be more difficult
to research, but would be revealing. I would like to know the actual national
results of austerity programs implemented in the name of economic improvement,
especially when those have been combined with deregulation of corporate and/or
banking interests. We have been experimenting with that here since Reagan and
the results are in, but the policies are not changing. Pretty much the same
applies to Europe. I believe this is based on a distortion of Adam Smith’s work
Wealth of Nations. The most essential flaw in the logic is that the speakers do
not realize or do not admit that Smith opposed limited liability, the
foundation of corporate life. Imagine, for one example, if each and every BP
shareholder were personally liable for every dollar of damage caused by BP’s
operations. That would make a different economic world. Smith’s ideas apply
best to small areas where people know one another and the results of people’s
actions are local. Global corporate commerce is another matter entirely.
“The attacks on online banking signify an important
consequence of technology development. As an online banking customer myself, I
hope the cyber-security industry can respond promptly and well.”
My response to the
Blog:
Re:
change. Indeed! Change often involves degrees of
unknown, which in turn creates risk.
We do not know if it will work as we intend it. Thus, we have the quite common
resistance to change.
Re:
secession. I view the process
quite like cutting one’s nose off to spite his face. We have been through this before. I would think the sacrifice of 600,000 citizens and millions
more wounded would have been sufficient to dampen such political ardor.
Re:
austerity. Deregulation of the
financial industry has been underway since at least President Ford. From my perspective, the largest
quantum shift was Financial Services Modernization Act of 1999 (AKA
Gramm-Leach-Bliley Act) [PL 106-102; 113 Stat. 1338; 12.November.1999]. Various metrics show the effects in the
massive increase in real estate borrowing and indebtedness as well as the
explosion of the financial derivatives gambling business. Deregulation aside, austerity alone is
not the path out of this morass in which we find ourselves. The key will be a balance between
revenue & expenses, between austerity & spending.
Re:
limited liability. Limited
liability has been a cornerstone in American commercial growth. Nonetheless, I join you in seeking
greater accountability to go along with those incredible profits; shareholders
gain with profits, they should suffer with losses. On a related note, I think the same should be true for
labor. Limited liability is quite
akin to that damnable insurance banks took out for the insanity of Credit
Default Swaps.
Re:
on-line banking. I share your
apprehension. I use the feature
extensively, and I also watch it like a hawk.
. . . follow-up comment:
“A clarification: I also would like to see greater
accountability required to obtain limited liability. This is one of the central
reasons corporations should not be accorded the rights of person, who do not have
limited liability. However, my central point was that much of the current
discussion in economics rests upon the ideas of Adam Smith, who never intended
his ideas to be used with limited liability. This results in great distortion
and over-simplification of his ideas, which were sound when applied in the
environment he described. The idea that a General Motors or a Citibank will
face the same pressures as a local merchant in a small community does not make
sense but has become the basis of much ‘free market’ advocacy and policy. Hence many disastrous results including ‘too
big to fail’ banks.”
. . . my follow-up response:
Indeed! There was no such concept, let alone
legal principle, even remotely similar to limited liability as we know it
today. It is my understanding in
the modern usage that limited liability was intended to stimulate commerce; it
was not meant to shield wrongdoers from prosecution and punishment. Adam Smith’s Wealth
of Nations (1776) did not consider such a concept, either, as
you noted. The New York Times editorial staff
illuminated an interesting but disappointing twist yesterday, in the HSBC
settlement case (I’m writing an opinion for this week’s Update).
Another contribution:
“How about wishing Arizona State luck?”
My considered reply:
Re:
Arizona State v. Navy – Kraft Fight Hunger Bowl, AT&T Park, San Francisco,
California; Saturday, 29.December.2012, 13:00 [U] PST. Sorry, my friend. I cannot do that. Navy will have an uphill fight against
a much bigger team. However, I
will say, let us have a safe and enjoyable contest. Go Navy!
My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)
2 comments:
You link to a well-written op-ed piece this week on marriage. I had not been aware of the details of gay marriages, but the idea of “customizing” marriage makes a great deal of sense to me. For a personal example, my wife and I wrote our own vows to avoid some conventional notions that we disregarded, and both our clergy person and I saw it as my wife’s personal decision whether she took my name. The issues raised by Amelia Earhart in her letter address substantive issues that can and should be addressed by each couple rather than being settled by churches or others who have no personal connection to the marriage. As clergy, I see clergy as having a potential role in this process, so long as the clergy person does not seek to impose his or her views of marriage on the couple.
The defeat of President Obama’s nomination of Dr. Susan Rice provides yet another example of runaway partisanship specifically on the part of Republicans in this country. This short-sighted opposition to any action whatever by Obama also holds up the nominations of dozens of candidates for Federal Judgeships. Of course, the follow-up complaint on that one is about the Federal Courts suffering overload and delays.
I do not see this as the moment to argue gun control again, but I will point out that your Noah Webster quote does not apply; European nations are not in fact ruled by standing armies. Meanwhile, the USA suffers from the provisions of NDAA, which allow the President to imprison and/or kill anyone with no due process by simply and secretly accusing them of terrorism.
In reference to parental accountability and community involvement, it remains easier to talk about these than to implement them. In general, controlling parenting techniques without directly invading the home seems impossible. For reasons that are extremely personal, I do not believe that community detection and treatment of mental/emotional illnesses will work without unacceptable limitations on personal freedom.
In reference to the banking scandals, one way that corporations are not people is that they currently cannot face a death penalty. I suspect a death penalty of some sort would be more effective on corporations than it is on people, because corporate decisions are more calculated than individual choices. Other methods of imposing such a consequence in extreme cases have been proposed, but what about simply revoking their limited liability? If each shareholder of, for example, HSBC or USB, could potentially be held personally liable for extreme illegal actions of the company, caution and legal compliance would become far greater factors than they have been to date. That would further support criminal prosecution of individual wrongdoers as well, I think. Each of the other parties would have a personal stake in bringing consequences to scofflaws rather than themselves.
What is a “bonus to salary ratio compensation cap”? I do not recall ever encountering that term.
Calvin,
Re: marriage & Earhart letter. Very well said, my friend. There are so many important topics that should be discussed and agreed upon before marriage. The “customizing” you illuminated represents the agreement between two (or more for that matter) people about to join in marriage should have prior to joining lives, and especially before producing new lives. We must get beyond the societal expectations of The Box to have more productive dialogue about our marital relationships.
Re: partisanship. Whoa, dawgy; not so fast. Parochial partisanship is not confined to Republicans during the Obama administration. The opposite was exactly true during the Bush 43 administration. Nonetheless, that little detail aside, I agree with your assessment. This mindless parochialism is harming this Grand Republic in so many ways and must end.
I believe you missed the point of the Webster quotation. The issue is the potential for governmental tyranny. You mentioned NDAA; I could add a variety of other recent laws that have infringed upon our most basic freedoms. These are reasons the Framers sought to protect a well-armed citizenry.
Re: “parental accountability and community involvement.” If we attempt to regulate private conduct, I would agree, doing so will never work in a free society. I am NOT advocating for greater or further governmental intrusion. I do not know the details of Nancy Lanza’s struggle to raise her youngest son, but I imagine she found herself with a deep dilemma – schools probably resisted dealing with his personality and developmental problems that forced her to home school him, which in turn further isolated him socially. There are signs the community knew well of her struggles. Tough decisions must be made when it is time to institutionalize problematic individuals. We do not like to think of such actions or states, but that is our reality. Law enforcement cannot intervene until a crime has been committed or about to be committed, which is why I like the idea of a social police – able to intervene in non-criminal cases. We need to think out of the box before we start down the path of restricting constitutional rights of ALL citizens.
Re: “limited liability.” This is a tricky issue. Making shareholders liable to corporate actions would probably only hurt small investors. The big money guys would probably have access to information enabling them to bail before a crisis, leaving the small guys holding the bag. It would quite probably curtail investment. Shareholders are an obvious starting point as they are the ultimate owners. However, I think corporate officers are a more appropriate target; after all, it is their decisions that produce criminal conduct, and pretend ignorance should never be a defense – if they didn’t know, they should have known.
Re: “What is a ‘bonus to salary ratio compensation cap’?” In the proposed EU law, if a bank officer’s annual salary is €1M, his maximum (presumably performance-based) annual bonus with at 1:1 cap would be €1M, for a total compensation in a given year of €2M, or €3M for a 2:1 cap. I appreciate the objective, but I’m not sure that is a wise path.
“That’s just my opinion, but I could be wrong.”
Cheers,
Cap
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