J.C. Moore Online
Current events from a science perspective.

Tax Increases Work

     Posted on Tue ,24/02/2015 by J.C. Moore

Would you risk your state’s economy and the health and welfare of its citizens on a theory that has never worked? Well, Oklahoma’s Governor and Legislature decided they would try Laffer’s trickle-down economics again and sure will rogeresenough it did not work, – again. The budget hole in Oklahoma is now $600 million deep and our politicians just keep digging. Perhaps they should have  consider what our most popular Oklahoman, Will Rogers, said about trickle-down economics back in 1932.

Oklahoma is now having to make cuts in education, infrastructure, the salaries of public workers,  pension plans, and they are thinking about letting people out of jail because they cannot afford to keep them keep them locked up. Even yet, Oklahoma is cutting taxes even more next year thinking that the problem is that they just have not tried it hard enough.

It has not worked in Kansas either. Governor Sam Brownback has put Kansas deeply in debt with his experiment, he calls it, with the trickle-down theory. He cut taxes and refuses to raise taxes even though there is $179 million budget shortfall. Governor Brownback, too, thinks the problem is that Kansans just have not wished hard enough that Tickle-down Theory will work. He is also wishing that the $500 million budget deficit projected for next year will somehow magically go away.

Governor Tim Pawlenty tried it in Minnesota and he left office in 2011 with a a $6.2 billion budget deficit and a 7 percent unemployment rate. When Mark Dayton, a businessman an d billionaire, was elected governor in Minnesota he had the good sense to realize that when something was not working, you give it up. During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000 – a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. He was warned that the job creators and corporations, big and small would leave, but they did not. Between 2011 and 2015, Gov. Dayton added 172,000 new jobs, and though Minnesota’s  top income tax rate is the 4th-highest in the country, it has the 5th-lowest unemployment rate in the country at 3.6 percent.

Will Rogers had the theory right. Money trickles up and pools at the top. Those at the top really like that, and they pour campaign money to politicians who will keep trying  trickle-down economics. Governor Dayton showed that tax increases  and rational economic policies work, but Oklahoma and Kansas are just going to keep wishing and digging.

Boyen Slat: A Teenager Who Plans to Clean up the Oceans

     Posted on Fri ,13/02/2015 by J.C. Moore

This is a guest post by Jerry Verlinger, originally written for the Newstalker Website to support his nomination for the Environmental Hall of Fame.

There are many people all over the world making significant contributions toward helping to preserve our environment. Choosing  the one most deserving of recognition is very difficult indeed. However, last fall I read about a student in the Netherlands that has come up with what seems to be a feasible and viable method for clearing much of the over 30 million tons of plastic and other debris that finds its way to our oceans every year. That student is 19 year old Dutch student/ inventor, Boyen Slat, now founder and CEO of The OCEANCLEANUP.

Boyen Slat had always enjoyed working out solutions to puzzles, and while pondering this one, it came to him – rather than chase plastic, why not harness the currents and wait for it to come to you?

At school, Slat developed his idea further as part of a science project. An array of floating barriers, anchored to the sea bed, would first catch and concentrate the floating debris. The plastic would move along the barriers towards a platform, where it could then be efficiently extracted. The ocean current would pass underneath the barriers, taking all buoyant sea life with it. There would be no emissions, and no nets for marine life to get entangled in. The collected ocean plastic would be recycled and made into products – or oil.

The high school science project was awarded Best Technical Design at Delft University of Technology. For most teenagers, it would probably have ended there, but Slat was different. He set up a foundation, The Ocean Cleanup, and explained his concept in a TedX Talk: How the Oceans can Clean Themselves. Then, six months into his course, he made the decision to pause both university and social life to try make it a reality.

On 26 March 2013, months after it had gone online, Slat’s TedX talk went viral. “It was unbelievable,” he says. “Suddenly we got hundreds of thousands of people clicking on our site every day. I received about 1,500 emails per day in my personal mailbox from people volunteering to help.” He set up a crowd-funding platform that made $80,000 in 15 days. Read the entire BBC News Magazine article.

According to Bloomberg Business Week , in June of 2014, Slat, together with a team of about 70 scientists and engineers, released a 530-page feasibility study (pdf) that explains the technology and explores questions of legality, costs, environmental impact, and potential pitfalls. The Ocean Cleanup also kicked off a campaign to raise $2 million to construct and test large-scale pilots.

On September 15, 2014, Slat’s team announced that the funding goal had been achieved in 100 days, with support from more than 38,000 donors in 160 countries. They expect the first pilot to be deployed within a year, and they plan to have a fully operational offshore cleanup array in three years.

(c) 2015   Jerry Verlinger – reprinted with permission.

 

Poll: Vote for the 2014 Hall of Fame and Hall of Shame Candidates

     Posted on Sat ,07/02/2015 by J.C. Moore

Thanks  to those of you who entered nominations. The four top candidates have been selected from Moonthose nominated by readers. Please help select the winner by voting for the nominee who you think has most affected the environment for good or ill.  If you will, please post a reason for your vote and a suggestion for other suitable gifts for your favorite candidate. Some great gifts have already been proposed. The author will buy the gifts from his blogging earnings, so please don’t worry about the expense. Voting will  close and the winners announced on March 7, 2015.

Please  put your choice as a comment or take the poll at this site.

Hall of Fame Nominees

1.  John Holdren –  a lauded theoretical physicist who is President Obama’s science adviser. He has been a strong influence on the Administration’s science policy and has been quite effective in shutting down Congressmen who deny the human influence on climate.

Prize : Election defeats  for all Congressmen who exclaim, “I’m not a scientist, but…” .

2.  Physicist John Cook for creating the Skeptical Science site in 2007 which conveniently catalogues all paid denier memes/propaganda and the scientific responses to them. He has posted a large number of articles and videos explaining the facts of climate science.

Suggested Prize: a nomination for the Nobel Peace Prize.

3. Boyen Slat – a 19 year old Dutch student/ inventor and founder and CEO of The OCEANCLEANUP . He developed a method for removing much of the 30 million tons of plastic entering the oceans annually, convincing 70 scientist to help, producing a 530 page feasibility study, and raising over 2 million dollars to start the project.

Prize : a ban on disposing of plastic bottles in waterways.

4. Pope Francis – for his Protect Creation efforts. He is preparing a comprehensive Vatican teachings on climate change, which will urge 1.2 billion Catholics worldwide to take action. He  also plans to convene a summit of the world’s main religions in hopes of bolstering next year’s crucial U.N. climate meeting in Paris.

Hoped for Reward: A strong agreement from the climate conference.

 

Hall of Shame Nominees

1. Senator James Inhofe who claims “climate change is the biggest hoax in history”. He has compared the United States Environmental Protection Agency to a Gestapo bureaucracy, EPA Administrator Carol Browner to Tokyo Rose, and now he’s chairman of the Senate Science Committee.

Award:  a path for the KXL pipeline through his backyard.

2.  Freedom Industries and its ex-CEO  Gary Southern  – for contaminating the drinking water for 300,000 West Virginians. They have been charged with multiple violation of the Clean Water Act related to polluting West Virginia’s Elk River, including a massive chemical spill this past January that saw 10,000 gallons of a coal-cleaning chemical called crude MCHM dumped into the river.

Award: A prison cell with drinking water from the Elk River.

3. Dr. Richard S. Lindzen  – Senior Fellow at the Cato Institute who  described the recent U.S. Senate climate vote as a bizarre and ludicrous “attempt to hijack science for political purposes”. The Cato Institute is a part of the Climate Change Denial Machine, and the “focus his work is on the interaction between climate science and policymakers”. Once a fine scientist, denial for political purposes is now Dr. Lindzen’s job and he knows enough to sound impressive as he disputes accepted science.

Prize: a trophy engraved “Outstanding Climate Science Hypocrite Award”.


4. Tony Abbot – Australian Prime Minister who led the repeal of the carbon tax, even though Australia is one of the world’s largest polluters per capita and is facing serious changes to climate and weather systems as a result of global warming. The Guardian described it as “an act of gross moral negligence to the future prosperity of this country and future generations.”

Suggested Award: ??

 

Nominations were taken and votes will be taken from four sites. The  poll will close on March 7, 2015.

Please  put your choice as a comment or take the poll at this site.

 

 

 

Bits and Pieces 14: Will Rogers on Trickle-down Theory

     Posted on Thu ,29/01/2015 by J.C. Moore

The Trickle-down Theory, has been around a long time. Back in the 1800’s, they called it the Horse and will rogeresSparrow Theory. If you feed the horse enough grain, some of it will be left over for the sparrows. No economist took it seriously. By Will Rogers day it was called the trickle-down theory and the picture shows what he thought of it. Eric Laffer convinced Ronald Reagan that he should try Laffer’s version of it, and the economy grew less while the public debt ballooned. George W. Bush tried the same thing, and that plus two unfunded wars put our nation deeper in debt.

At the state level, Oklahoma has tried their version of it. They are now having to make cuts in education, infrastructure, the salaries of public workers, and pension plans. Even yet, Oklahoma is cutting taxes even more next year thinking that the problem is that they just have not tried it hard enough. Governor Sam Brownback has put Kansas deeply in debt with his experiment, he calls it, with the trickle-down theory. He refuses to raise taxes even though there is $179 million budget shortfall. Governor Brownback, too, thinks the problem is that Kansans just have not wished hard enough that Tickle-down Theory will work. He is also wishing that the $500 million budget deficit projected for next year will somehow magically go away.

Will Rogers had the theory right. Money trickles up and pools at the top. Those at the top really like that, and they pour campaign money to politicians who will try keep trying the Trickle-down Theory. If there is one good thing that comes out of Brownback’s experiment in Kansas, it will prove once and for all that the Trickle-down Theory does not work. Why should it, it never has.

The Cornwall Alliance: Dominionism vs. Science and Religion

     Posted on Tue ,06/01/2015 by J.C. Moore

The Cornwall Alliance has been transformed into a propaganda machine to cast doubt on climate science and to urge Christian churches to “Resist the Green Dragon” of environmental stewardship.

 

According to the Cornwall Alliance, the Christian environmental movement is a Green Dragon swallowing up our churches, saying “Both professing Protestants and o gdRoman Catholics bear a burden of guilt for the current political mess we are in with the global warming and other hysterias.” Further, NASA is complicit , ”The environmental lobby and your government [NASA] want to indoctrinate your children into envirospies watching your every move and harassing you until you change your behavior.” Such is the messages of the Cornwall Alliance under the leadership of Dr. E Calvin Beisner.

Why the attack on NASA? NASA‘s research has shown that the rising burden of carbon dioxide caused by burning fossil fuels is causing the Earth to warm and for our weather to be more severe. Dr. Beisner is upset that NASA put together a children’s website to help children understand using energy wisely to reduce climate change. Dr. James Hansen, former head of the NASA’s Institute for Space Studies is one of the most respected climatologists in the world. His most famous quotes is, “If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, CO2 will need to be reduced from the current levels of 400 ppm to at most 350 ppm.” That can only be done if we greatly curtail our use of fossil fuels, which of course would hurt the profits of the fossil fuel industry. Attacking science. scientists, and Christian stewardship on behalf of the fossil fuel industry is what Dr. Beisner does best, and the Cornwall Alliance is his vehicle for doing so.

The Cornwall Alliance: The Interfaith Stewardship Alliance, in 2000, developed the Cornwall Doctrine. Its main goal was to address the challenges faced by the very poor because of climate change. The doctrine was based on Genesis 1:28 which says, ” Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.”  Generally, those who argue for Christian stewardship think that dominion means “benevolent rule”. Dr. E. Calvin Beisner, a Dominionist, apparently interprets the scripture to mean “subdue and exploit”.  It is likely that not everyone who signed the Cornwall Doctrine would agree, but Dr. Beisner  promotes his views as that of the Cornwall Alliance. The Cornwall Doctrine was viewed as guiding principles until about 2007 when Dr. Beisner formed an alliance with the Heartland Institute.

The Heartland Institute: It became apparent in the early 1980’s that carbon dioxide released by burning fossil fuels was causing changes in the environment that would impact mankind, particularly those in poor and indigenous societies who do not have the resources to adjust to the changing climate. Many churches have adopted statements encouraging environmentalism based upon good stewardship, some specifically mentioning the threat of greenhouse gases. The  Heartland Institute was identified by Riley Dunlap and Aaron McCright as a part of the Climate Change Denial Machine  which receives “dark money” from fossil fuel companies and funnel it to front groups that create propaganda casting doubt on climate science.  Dr. Beisner makes a special point that dominion is not domination; however, the men who wish to dominate and exploit the environment for profit certainly find his arguments useful. They found in him a way to counter the Christian Stewardship movement, and the Cornwall Alliance, under Dr. Beisner’s leadership, became part of the sounding board for the climate change denial machine.

The Green Dragon: In 2010, the Cornwall Alliance chose the “Green Dragon” to symbolize its campaign against the growth of the environmental stewardship movement in Christian churches. The campaign was based upon the book “Resisting the Green Dragon”, by James Wanliss.  A review of the book shows that though Dr. Wanliss is a physicist, the book was not soundly based upon physics, but upon Martin Durkin’s movie, The Great Global Warming Swindle, though the movie is based upon bad science and fraud. Mr. Durkin misrepresents his credentials, presents fabricated data, and distorts the work of scientists he quotes.  The Cornwall Alliance has produced a series of videos based upon Resisting the Green Dragon, assailing its hold on the churches. There is little truth and much propaganda in the videos. They seem designed more to protect the profits of the fossil fuel companies than to protect the Earth, or the people who depend on the Earth for survival.  Though the book and the videos try to make a case that Christian churches should abandon environmental stewardship, they are apparently having little impact.

Science: Dr. Beisner doesn’t understand science, despite claiming to be an authority on energy and environmental issues. When God created the Heavens and the Earth, he also created the laws of physics which governs them. While Dr. Beisner may interpret the scriptures to suit his purposes, the Earth will follow the laws of physics no matter what he claims. Dr. Beisner’s degree is in Scottish history, which in no way qualifies him to make judgments about climate science, nor does it give him the expertise to decide whether the science Skeptics he quotes are legitimate. Every major science organization in the world has adopted statements similar to that of the American Chemical Society which says,” the Earth’s  climate system is changing rapidly in response to growing atmospheric burdens of greenhouse gases and absorbing  aerosol particles. There is very little room for doubt that observed climate trends are due to human activities. The threats are serious and action is urgently needed to mitigate the risks of climate change.” Dr. Beisner’s pronouncements are in conflict with the theories of climate science, the empirical evidence, and the opinions of the 97% of the scientists who are active in research.

Military: If Dr. Beisner will not listen to our scientists, then perhaps he should listen to our military leaders , ” Drastic weather, rising seas and changing storm patterns could become “threat multipliers” for the United States, vastly complicating security challenges faced by American forces.” Many low lying islands, and even some of our military bases, are threatened by rising sea levels and increased tidal surges. The accelerating rate of climate change poses a severe risk to national security and acts as a catalyst for global political conflict. It concluded that climate change-induced drought in the Middle East and Africa is leading to conflicts over food and water and escalating longstanding regional and ethnic tensions into violent clashes. The rising sea levels are putting people and food supplies in vulnerable coastal regions like eastern India, Bangladesh and the Mekong Delta in Vietnam at risk and could lead to a new wave of refugees.

Religions:  Despite Dr. Beisner’s insistence that environmentalism is a Green Dragon, eating the heart of the church and leading it into sin, the leaders of our churches differ .  At its 2014 meeting in Geneva, the Central Committee of the World Council of Churches , which represent some 590 million people in 150 countries, endorsed fossil fuel divestment, agreeing to phase out its own holdings and encourage its members to do the same.  Serene Jones, the President of Union Theological Seminary in the US, which recently committed to divest its entire $108.4 million endowment from fossil fuels says, “Scripture tells us that all of the world is God’s precious creation, and our place within it is to care for and respect the health of the whole. As a seminary dedicated to social justice, we have a critical call to live out our values in the world. Climate change poses a catastrophic threat, and as stewards of God’s creation we simply must act.”

The Catholic Church, who centuries ago made peace with science, is following suit. Pope Francis will release in March a comprehensive Vatican teachings on climate change, which will urge 1.2 billion Catholics worldwide to take action. “The document will take a position in favor of the scientific consensus that climate change is real … and link the deforestation and destruction of the natural environment to the particular economic model of which Pope Francis has been a critic.” The pope also plans to address the United Nations General Assembly and convene a summit of the world’s main religions in hopes of bolstering next year’s crucial U.N. climate meeting in Paris.

Representing the most conservative of Christians, the Evangelical Environmental Alliance  take great issue with Dr. Beisner’s claim that they are worshiping a false God. They assert: “ Pollution hurts the poor the most, and Christians are called to care for the poor and the less powerful (Mt. 25:37-40). Thus, caring for all of creation provides a Christian with the deepest sense of joy and contentment since it is part of loving God.” And, recently, the General Synod of the United Church of Christ (UNCC) adopted a strong resolution on climate change that calls upon church members to “make shareholder engagement on climate change an immediate, top priority for the next five years”, to “demand action from legislators and advocate for the creation and enforcement of carbon-reducing laws.” , to “make lifestyle changes to reduce the use of fossil fuels in our lives, our homes, our businesses and our churches”, and to “to reduce the use of fossil fuels, our carbon footprint, and our complicity with the fossil fuel industry.”

Funding: Dr. Beisner is vague about the funding sources for the Cornwall Alliance. Much of its funding is given through 501©(3) organizations that do not have to reveal the amount or the donors. Though it is difficult to trace the funds, many of the paths lead from the foundations aligned with the fossil fuel industry. When Leo Hickman, in a Guardian interview, asked Dr. Beisner directly about funding, he neatly evaded the question by replying  “ Here in the US, for a variety of different reasons, you can make a donation to one charitable foundation via another foundation and the receiving foundation does not know who you are. Sometimes it’s just as simple as, ‘Hey, Jesus, said don’t let the left hand know what the right it doing.” When he was asked in an interview with Bill Moyers about his role as a  resident scholar at the Acton Institute, he acted unaware that the Acton Institute for years has received steady support from Exxon-Mobil. Anyone who thinks that Dr. Beisner is not disingenuous in what he says, should read that interview. Think Progress traced the funding for the Cornwall Alliance back to what they call the “oily operators”,  showing that Dr. Beisner is likely hiding his main funding sources. Certainly, men who wish to dominate and exploit the environment for profit, and misguided  politicians, will find the Cornwall Alliance’s arguments useful, and be willing to pay for the propaganda.

 The Indigenous and poor: Though the Cornwall Alliance receives donations from individuals and corporations, there is no evidence that any of the money actually goes to help the poor. It’s main contribution seems to be a claim that environmentalism will keep them from having cheap energy from fossil fuels to develop into industrialized nations. Dr. Beisner should realize that civilization existed for thousands of years without fossil fuels and, though fossil fuels have been a great benefit to man, abusing their use is creating conditions on the Earth that threatens poor countries and indigenous people. If they are to develop energy sources, it would likely be from sustainable sources as they do not have the wealth or the infrastructure to support a fossil fuel system. He ignores the social justice element. The countries and the people feeling the greatest effects of climate change are those with the least infrastructure and economic capacity to deal with those impacts. And they’ve also contributed the least to the problem because they’re often small economically and small in terms of their carbon footprint. So as global leaders in countries that enjoy a very high standard of living, isn’t its partly our responsibility to do something that doesn’t wreck the climate for everybody else?

Though Dr. Beisner asserts that efforts to reduce climate change will hurt the poor and indigenous people, just the opposite is true.  The poor do not have the resources to adapt to climate change or to recover from climate disasters. In many cases, climate change is threatening the way of life that has sustained them for centuries. Last year’s drought on the Horn of Africa led to widespread famine and many deaths among the poor. The people of Kashmir are concerned that the glaciers that feed their streams in the summer are receding – making less water available. The Sherpa of Tibet worry that their villages may be flooded by lakes that now form each summer from melting glaciers, held back by unstable ice dams. The Inuit in Greenland cannot use their traditional hunting grounds at the ice is too thin for their dog sleds to traverse. Those in the Arctic are having to move their coastal villages to keep them from being eroded away by wave action of open seas, which used to be ice year-round. Their inland villages are threatened because the permafrost upon which they are built now becomes a quagmire in the summer. They are being forced to change a way of life that sustained them for centuries. While some may adapt, their way of life and culture will be destroyed, and many will likely end up among the poor and unemployed. As reported in The Guardian, thousands of indigenous people from the Andes, the Amazon, and neighboring South American countries invaded the Peruvian capital during the Climate Conference. They marched outside demanding a solution to climate change, and a solution to the corporate invasions of their traditional lands.

Bill McKibben is the founder of 350.org, dedicated to reducing the CO2 concentration in the atmosphere to a safe 350 ppm. In his acceptance speech for the Right Livelihood Award, akin to a Nobel Prize for humanitarian work, he expressed it eloquently, “We stand in solidarity with Andean activists losing the glaciers that supply their drinking water, and with Bangladeshi activists watching the seas rise in the Bay of Bengal. We learn from African leaders like Desmond Tutu, who recently called climate change the greatest human rights challenge of our time, and from Sámi leaders from the top of the world, who are watching berserk winter weather wreck time-honored ways of life. We struggle alongside residents of Delhi and Beijing and the other smog-choked metropolises of our planet… We look with great inspiration to the countries like Germany that are demonstrating daily that it is entirely possible to turn to renewable energy for the power that we need on this planet.”

Conclusion: Dr. Beisner’s opinions are not only in conflict with climate scientists, our military leaders, and mainstream Christian churches, but with his own Presbyterian Church. The Presbyterian Church stated in 1989 and reaffirmed in 2008, its “serious concern that the global atmospheric warming trend (the greenhouse effect) represents one of the most serious global environmental challenges to the health, security, and stability of human life and natural ecosystems.” While Dr. Beisner may believe what he wishes, he should not bear witness to ideas which are so much in conflict with those of his own faith and with the majority of scientists, nor should he encourage others to do so. Clearly, the conspiracies theories he spins and promotes in his newsletter have little evidence to support them.

Even the book, “Resisting the Green Dragon”, upon which his attacks upon stewardship are based, was published by WND Publishing which is well known for publishing conspiracies. It seems wrong for the Cornwall Alliance to use the power and respect that people have for ministers and Scripture to criticize the Christians who believe in good stewardship. The Cornwall Alliance does just that, as resisting the Green Dragon aligns more with profit motives than Christianity. There are millions of Christians around the world who consider the Cornwall Alliance’s views, as presented by Dr. Beisner, as a misinterpretation of the Scriptures and a failure to reflect what Jesus actually taught. The only time Jesus showed anger in the Bible was when he drove the money changers from the Temple. How might Jesus feel about the Cornwall Alliance bringing corporate interests into places of worship? Perhaps Dr. Beisner should rethink whether he really wishes to do that.

(C) 2015 J.C. Moore

Nominate Your Candidates for the 2014 Environmental Hall of Fame/Shame Awards

     Posted on Thu ,01/01/2015 by J.C. Moore

It is important that we keep in mind those who have most affected the environment by words or action.  Each year, this site Earthrise2takes a poll to find those most deserving to be in the Environmental Hall of Fame and the Environmental Hall of Shame. Please send  your nominations  for  each category by e-mail through the “Contact” link or put it in the comment section . If you would, please include a short reason that your nominee should be chosen and suggest a suitable gift if they win.

Nominations will be taken until January 31st, 2015. The nominees will then be  listed  and this site will conduct a poll to determine the winner in each category.   You may suggest a suitable prize for your nominee. Please be imaginative, as particularly thoughtful or humorous  nominations will  be recognized and published on this site

Past years winners and their awards were:

Hall of Fame Winners – Award

2013       Bill McKibben, founder of 350.org – Many new members so subscribe to his is weekly newsletter .

2012       President Barack Obama – A little coöperation from Congress, so please write your Representatives.

2011        James Hansen – A massive presence at the 2012 Citizen’s Climate Lobby 

2010        RealClimate.org  – A recommendation from this site. ( Priceless)

2009       Benno Hansen,  ThinkAboutIt Blogger – A Subscription to Science News.

Hall of Shame 

2013      The Koch Bothers -A boycott of their products: less money, less lobbying.

2012       Donors Trust and Donors Capital Fund – An IRS investigation of their of their tax-exempt status.

2011        Halliburton (Cheney) -  A big glass of water from a well next to a hydrofracking operation.

2010        Koch Brothers – A petition to the Wizard of Oz for  the grant of a social conscience.

2009       SpaceGuy,  Newsvine Blogger – The movie Wall-E,  representing his view of the future of Earth.

 

(C) 2015  J.C. Moore

Profits at All Cost: Shareholder Value Vs. Stakeholder Value

     Posted on Tue ,30/12/2014 by J.C. Moore

At one time, most American companies saw their role as being responsible to their stakeholders, i.e., being a good corporate citizen and taking 0paycare of both its stockholders and its workers. There was a change in the 1980’s toward increasing shareholder value, i.e., a shift toward considering the companies’ profits to be primary even if it hurt the rest of its stakeholders. The graph at the right shows how that change affected our economy. Corporate profits increased,  CEO pay increased remarkably, and worker wages stagnated.

An example: Wal-Mart is a good example of that shift. As with many companies, the corporate culture changes when the founder dies. Sam Walton believed you should buy American and that you should treat workers fairly, a policy of maximizing stakeholder value. His heirs apparently thought that profits should be the main goal, a policy of maximizing shareholder value, and in the process making themselves fabulously wealthy. The company now imports many of their products and pays its workers poorly. Wal-Mart just announced that it may raise its minimum salary to $8.50 an hour. The Tulsa World editorial board approved saying,” If they (the workers) earn more, they will spend more, spurring the economy. They also will be less prone to need government entitlements such as food stamps.”  True, and while the salary increase may sound generous, it really isn’t. In 2009, when the minimum wage was raised to $7.50, Wal-Mart stock was worth $50 a share. In 2014, workers still earn only $7.50, but the stock is now at $88. If wages had kept up with the stock price, the minimum wage worker would get $13.20.

Earnings: Corporate earnings are one of the most closely watched indicators of a company’s profitability. Stock prices reflect the companies earning or its potential for earnings. Wall Street likes it that way, as it boils a company’s value down to one number which can be measured or approximately estimated for the future. CEO salaries are closely tied to their stock’s performance, making increased shareholder value the 0ratioprimary goal of the company. This leads to policies which boost the company’s earnings and the CEO’s pay in the short term, even though it may hurt the company in the long term. That’s why most CEOs insist on Golden Parachutes which make them fabulously wealthy even if the company declines in the future. Rewarding CEO’s for increased profits had led to policies that created a huge pay gap. While in 1980 CEO earned 42  times as much as an average worker, that gap has grown to 354 times as much.

Abuses: Salaries are one of the biggest expenses for most companies, and keeping average employee salaries low increases profits. Announcing layoffs, though it may reduce a company’s future productivity, is often rewarded with an increase in stock price. Some companies resort to practices such as shifting earnings overseas, setting up tax havens, or ignoring safety and environmental regulations which would cost money to implement. These policies hurt the workers, damage the US economy, and sometimes shift a companies business expenses to the US taxpayer. Many companies justify these practices by saying that they are following the law, but we should not forget that many of the laws were made by politicians influenced by lobbyists and money. Even though they are following the law, the ethics and the patriotism of those companies are questionable.

Stakeholders: Though Wall Street and CEOs may profit from the focus on shareholder value, there are other stakeholders in the company who should be considered. Workers have a stake in the company as their well-being depends on it. Yet, low pay makes workers lives miserable and many of them must sacrifice time with their family in order to take a second job. Taxpayers also a have a stake in companies. shareholdersTax avoidance and tax havens reduce tax revenue and add to the national debt. Shifting jobs overseas hurts American worker’s buying power and reduces their contributions to income taxes. Workers who are unable to afford health insurance or enough food for their family are forced to apply for government assistance. This shifts the burden to taxpayers and the reduced purchasing power slows the economy. Cutting corners on safety means damage to worker’s lives and health and puts a burden on our healthcare and workmen’s compensation system. And, we are all stakeholders in the environment as clean air, pure water, and a hospitable environment are considered our birthright.

 

Stakeholder value: The idea that corporations exist to reward shareholders arose not from law but from the work of ideologically driven economists. It’s a shift that Wall Street and corporate executives brought about, as they reap the rewards. They argue that shareholder capitalism will bring about the greatest good for our society, but in reality it is created economic inequality that is destroying the quality of life for a majority of American citizens. Gap As a contrast, Germany has adopted an emphasis on stakeholder values.  German corporation are required by law to have at least 50% of hourly workers on corporate boards. German workers are involved in decision about wages, healthcare, pensions, overtime, vacations, and other decisions that affect them. The workers certainly have an incentive to see that the company succeeds and they have more security and opportunity than ours. Germany has the strongest economy among the European Union countries and a much greater after tax economic equality .

Socially responsible investors recognize the value of considering all the stakeholders in a company. Many retirement funds and investment firms have social choice investment funds.  The fund’s investments favor companies that are strong stewards of the environment; devoted to serving local communities; committed to higher labor standards; dedicated to producing high-quality and safe products; and those managed in an exemplary or ethical manner. Though the funds are chosen for their ethical values, some of them do quite well. The TIAA-CREF Social Choice Equity Fund, for example, now has $2.6 billion in assets and has grown at the rate of 15% a year for the last five years.  Socialist choice funds are often less volatile as they are more immune to the wild swings in stock prices that occur when earnings reports come out.

Another factor driving the shift toward stakeholder investing is the choice by socially responsible institutions to divest from corporations which have a history of worker or environmental abuses. At its 2014 meeting in  Geneva, the Central Committee of the World Council of Churches (WCC), a fellowship of over 300 churches which represent some 590 million people in 150 countries, endorsed fossil fuel divestment, agreeing to phase out its own holdings and it encouraged its members to do the same.

Social entrepreneurism: Is not likely that the United States will pass laws requiring more emphasis on stakeholder values, but there is beginning to be a shift in that direction. There was recently an entrepreneurial seminar which promoted “Social entrepreneurism: the tricky balance of doing good while doing well”. It pointed out that twenty-seven states have passed legislation to make ”for benefit corporations”, called B Corporations,  possible. These are tax paying for-profit corporations which include an explicit social mission in their corporate charters.  One example is Grameen Bank, an organization that popularized micro-credit, which makes small loans to impoverished families in developing countries so they can invest in small businesses. Its founder was recognized with a Nobel Prize. Another example is Ben & Jerry’s ice cream, with its explicit corporate emphasis on social causes, such as paying more for sustainably grown milk, sugar, eggs, vanilla and chocolate; curbing climate change; and mandatory labeling of genetically modified organisms. People are apparently willing to pay more for a product from companies that emphasize stakeholder values.

(c) 2014   J.C. Moore

 

The 1956 Republican Party Platform vs. Todays

     Posted on Sun ,02/11/2014 by

The chart at the right compares the 1956 Republican platform when Eisenhower ran with what the party’s platform seems to be today. Some things aagop platformevolve, and some things devolve. The modern Republican Party is an example of the latter. Trying to hold power, rather than govern well, the party has molded itself to satisfy the religious right, the anti-science anti-intellectuals, the false conservatives, and the very wealthy. Unable to progress as the world changes, without offending those, the party leaders have taken the path of obstructionism.

It is a rather vicious cycle for Republicans. As moderates and progressives move away from the party, the extremist are more in control. That influence is seen most in the primaries where the extremist and money interests can insert more influence to elect their candidates. It is tough to be an Eisenhower Republican these days.

The 2014 platform is very similar to that developed by the Republican Party in 2012. Republican leaders  used a push poll to develop the 2012 Republican presidential platform. Here  is an analysis of that poll.  The poll was an affront to intelligent Republicans as it was not really to solicit their opinions but instead an effort to spread propaganda and to raise money. It signaled the big money interests and extremists that if they gave generously, the Party would reward them. And it did. Here is an analysis of the 2012 Republican Party platform that Romney ran on. Can any Republican actually be proud of that platform? It is no wonder Romney lost.

Which platform in the chart do you prefer? It will never be 1956 again, but think where we might be today if the Republican Party had remained progressive. It is time for the Grand Old Party to become Grand again.

The League of Conservation Voters: Do We Need These Policies to Benefit Big Oil

     Posted on Sun ,02/11/2014 by

Oil has helped us develop our civilization and our economy and we will need it far into the future as a fuel and as a raw material. Four generations of my family have worked in the all business, and Big Oil does not represent the small independent oil companies we helped develop in Oklahoma.  Nor aaoildoes Big Oil represent the average American citizen very well. They represent the large international oil companies who have little loyalty to the United States, but who have enough money to influence our politics to pass laws and provide subsidies in their favor.

Big Oil has opposed regulations designed to protect people’s health and the environment. There is nothing conservative about that. The Canadian XL pipeline will allow a foreign country to take American property by eminent domain, will greatly increase the risk of damage from oil spills, and will provide oil to be shipped overseas to increase the profit of the international oil companies.

It is important that we preserve our national wildlife areas and the natural resources under them for the future, yet Big Oil is trying to remove the protections provided on our parks and federal lands. It is fiscally irresponsible to give large subsidies and tax breaks to Big Oil, made up of very profitable and well-established companies – when our country is trying to cut our national spending. And while Big Oil is promoting free market principles for itself, it is promoting anti-competitive principles and laws to reduce competition from renewable energy sources.

Recently one of big oil’s lobbyists, Richard Berman, was secretly taped as he solicited $3 million from oil and gas executives to finance an advertising public relations campaign to discredit environmentalists and celebrities that support them. He told the executives they must be willing to exploit emotions like fear, greed, and anger and turn it against environmental groups. And major corporations secretly financing such a campaign should not worry about offending the general public. he said, because “you can either win ugly or lose pretty”.

The League of Conservation Voters wishes to remind us that Big Oil is spending millions of dollars to promote candidates who will further their interests. And while some of their interests are in our national interest, many are not – and it is important that we elect candidates who will distinguish between the two. Although in the past, many conservative Republicans were champions for the environment, that has changed .  Many Republican candidates now are ranked at less than 10% by the LCV, while the national average is 43% for Representatives and 57% for Senators.   The League of Conservation Voters rates the candidates based upon their past voting records, and you may find out which candidates represent you and the environment at the LCV website.

The Economic Recovery in the Past Five Years: Then and Now

     Posted on Sun ,02/11/2014 by

We have heard so much bad economic news that most people believe it, even though it is not true.The economy has recovered to the point that theRecovery economic stimulus is being ended. That would normally be good news. It is strange that it has not been widely disseminated and many people may be unaware of it. You may read a little piece here and there in the paper about it, but it hasn’t seemed to enter the public’s mind. Actually, since it would help the Democrats, great efforts have been made by some money interests and obstructionists to downplay the recovery.

The chart at the right summarizes the recovery in the last five years. Though it was put together by the Occupy Democrats, the numbers seem to be accurate and can be checked. Normally the President would get credit for the recovery, but not so much in this case as it would likely help the Democrats in the next election. The news could probably have been even better except for the missed opportunities caused by obstructionists in Congress. I hope some of them will join the jobless after the next election.