The Need for Regulation

Those who supported deregulation of the financial markets in the past (though perhaps not so enthusiastically now) seemed to have two assumptions underlying their position:

1) People (even financial types) are good, and will do the right thing even if there are no regulations requiring them to -- so we can trust them. (This assumption never seemed to get expressed in words, and when it is expressed it certainly becomes harder to maintain.)

Or

2) The market will make corrections. If there is fraud, it will be eventually found out, and those who cheat will be put out of business by the normal operation of market forces. If any stock or commodity becomes ridiculously overpriced, the market will figure this out and the market will adjust -- without any need for regulators to intervene. (This argument has been expressed, most notably by Alan Greenspan.)

I’d suggest a different way of looking at the market.

I believe that people are basically good -- but subject to temptation. Good people can do bad things. Good people, left unsupervised and unregulated, will all too often succumb to the temptation to make a huge profit at someone else’s expense. So a market without regulation is like a city without door-locks or policemen. Even if most participants (citizens, investors) want to be fair and decent, a few won’t, and they can corrupt the whole system. And before long we have a feeding frenzy.

Will the market make corrections, without any need for regulation? Very likely -- but only over a considerable period of time, by which time many innocent people will be hurt -- their jobs and their savings wiped out. Witness the most recent Wall Street disaster.

So let’s acknowledge these realities, and let’s state them this way:

The purpose of business (whether a restaurant, or a clothing store, or an auto manufacturer, or a bank) is to make money. For many participants, that will mean making money by any means possible. To expect otherwise is to expect sharks and wolves not to act like sharks and wolves.

The purpose, therefore, of government, is to restrain the natural shark-like tendencies of business -- to set up and maintain the rules under which business will be allowed to make money. It is the role of government to protect the customer, the consumer--

-- by requiring honesty -- truth in labelling, truth in lending, contracts that are understandable, products that are as advertised

and

-- by establishing and enforcing standards -- food must be free of harmful chemicals, products must be safe, interest rates must be reasonable.

The other day I bemoaned the fact that the Raleigh News and Observer rarely published any of my letters, so today they published one. The background is that a prisoner with a life sentence filed to be released. Seems that a life sentence had been defined as 80 years, but for a brief spell -- when this and some 19 other prisoners were sentenced -- a life sentence had been re-defined as forty years. And these prisoners had all served their forty years. And the state suddenly realized why these prisoners had received life sentences: for heinous murders and rapes. The newspaper headlines screamed: "Murderers and rapists to be freed!" Here's my response:

"Given that the convicts expected to be released are all in their 50s and 60s, many having been incarcerated since they were teenagers, I can't help wondering: Haven't some of them perhaps turned their lives around? I realize you wanted to get the headlines out on the street quickly, but don't you have an obligation to tell more of the story? I for one would like to think that prison can transform people -- otherwise why not execute them and be done with it? But even if the crime was horrific, forgiveness must be an option -- as long as there is reason to believe the prisoner will no longer be a threat to society."

The first thing I need to emphasize -- in case it's not clear enough from the necessarily very brief letter to the editor -- is that I'm not urging that these prisoners be automatically released. (It appears that the technicalities of the applicable laws might require that they be released, but authorities are looking for other charges on which they could be convicted and re-sentenced, and the legislature is being urged to pass some sort of law to keep them in prison as well.) But I am urging that those who have in some sense been rehabilitated, those who do not appear to pose any threat to the public, should be released.

Please realize that my question -- "why not execute them and be done with it?" -- is rhetorical. Though I don't believe in the death penalty, I'd be willing to countenance it IF the crime was particularly violent and IF we could be ABSOLUTELY sure that the person was guilty. But, idealist that I am, I'd like to see prison function as a place of rehabilitation, with the goal that just about every prisoner could eventually be released to become a productive citizen. (Yes, I know that's a dream -- we're miles from anything like that now.)

Further, I'd like to see society transformed so that few if any young people become criminals, particularly violent criminals. (Violent crime seems to be largely committed by young men -- few women and few older men.) Look at the background of anyone arrested for a violent crime. It's depressingly monotonous: an emotionally and often sexually abused, unloved child, no effective intervention by schools or social services, a trail of minor but increasingly serious crimes, leading to the big one(s) resulting in that life sentence. (There's one other less frequent but recurrent pattern: the quiet, model child who suddenly explodes and commits multiple violent acts -- think Columbine.) I'd like to see a system that enables us to spot these developing crises and intervene before they erupt.

What we have now is like a sinister version of a Monopoly game, in which some of the players are given a "Go to jail -- go directly to jail" card, and once there, they can't get out. If you are that player, you are destined to be a loser, and there is only a negligible chance you will somehow escape that fate. It'd like to see a system in which we offer a chance for the losers to change their lives and maybe become winners -- losing should not be guaranteed permanent.

Guilty Until Proven Innocent?

A few days ago I sent off one of my occasional Letters to the Editor of the Raleigh (NC) News & Observer. I had been following the story of a young man who had spent some sixteen years in prison, and now a review of the case made clear that he is most likely innocent and should never have been convicted. While Greg Taylor continued to sit behind bars, the district attorney spoke out. And I felt I needed to speak out too. My letter didn't get printed (my average is about one out of every ten), so I offer it here. (I refer to a "misquote," though of course I know that it was -- unfortunately -- anything but a misquote.) Here's the letter:

"I need to point out a glaring misquote in Wednesday's paper. In the article on Greg Taylor's innocence of the crime for which he has been in prison for the past 16 years, Wake district attorney Colin Willoughby is quoted as saying, "The evidence in this case fails to show by clear and convincing evidence that Greg Taylor is innocent...." Surely no representative of our justice system would argue that you are guilty unless you can prove yourself innocent. (Would he?) If that were the standard, few of us would be able to keep ourselves out of prison.
Or have the rules changed?"

Newark -- Laugh or Cry?

In this morning’s N&O was a column by New York Times columnist Bob Herbert, talking about late-night host Conan O”Brien’s mock-feud with Newark (NJ) mayor Cory Booker. O’Brien talks about Newark’s health-care program, which, he says, consists of a bus ticket out of Newark. Jokes like that.

Comedians always need something -- some place -- to joke about. Philadelphia used to be the butt of the jokes. Did you hear about the contest where the second prize was a trip to Philadelphia? And the first prize was you didn’t have to go.

I’m always interested to read about Newark. I was born there, and I spent my childhood in Belleville, an adjacent town, where we were just a half-hour bus-ride from downtown Newark. My pals and I used to ride the bus to Newark to go to Saturday-morning programs at the Newark Public Library and sometimes to a movie, with occasional side-trips to places like Bamberger’s Department Store (where we once -- unbeknownst to our parents -- got into trouble trying to run up the down-escalator). Newark in those days was safe enough that our parents had no worry in letting us go downtown unaccompanied.

As I’ve delved, more resently, into family history and genealogy, I’ve discovered that some of my ancestors were among the founders and first settlers of Newark. When I was growing up, the best-known hotel in Newark was the Robert Treat Hotel, which I now know was named for the early Connecticut governor who led the first expedition to Newark (though he stayed in Newark only long enough to get it established, and then returned home to Connecticut six years later). Newark (like other Newarks in Delaware and Ohio) was named -- depending on which account you want to believe -- either as the “New Ark” or the “New Work.” In any case, it was a Puritan religious settlement, intended (like so many early New England settlements) to return to the purity and virtue which the founders thought were being lost in the older settlements they came from.

But all that’s a long time ago, and Newark has undergone several cultural transformations since.

And what has happened to inner cities isn’t a laughing matter. Herbert goes on to express the hope that all the joking will result in some serious focus on the real problems of Newark and other cities -- he talks about Camden and Chicago, and we know the same problems confront other cities as well. Problems of poverty, unemployment, poor schools, high drop-out rates, high crime rates, and high incarceration rates.

He juxtaposes two ironically similar numbers: the proposed 40,000 increase in the troops sent to Afghanistan, and the 40,000 teachers laid off in the past year -- what does that say about our priorities? If we can afford to fight multi-billion dollar wars abroad and not worry about the cost, then cost should be a minor consideration when we contemplate the wrong we do to our most needy citizens and the damage we do to the country by ignoring these desperate needs.

We're eating our seed-corn!

We're far enough away from pioneer times that many now don't understand "eating your seed-corn." In that difficult era, you'd grow as much as you could, knowing that it had to do two things: feed you all winter, and seed the fields in the spring for the next year's crop. If the crop had been poor or the winter long, you might be very hungry when you'd eaten the feed-corn and all you had left was the seed you needed for next year. But if you ate that, there wouldn't be a crop next year. Farmers then knew that no matter how hard the winter was, you couldn't eat your seed corn.

The crop that should matter to all of us is our young people -- the next generation, those who will provide not just the brawn (not much of that is needed these days) but the brains to invent and develop and produce the ideas and technology a competitive society needs -- if it wants to stay competitive.

When I started in the job-training/manpower-development field in the late '60s, it was accepted government policy to expand training opportunities when unemployment rose. How better to be sure of a trained workforce when the economy started growing again? And it made lots of sense to pay people a stipend to go to school rather than just hand out unemployment checks or welfare money (though there might still be a need for some of that). Either way, you put money in the hands of people who need it, but this way you got something back by investing in a future skilled workforce.

With all this in mind, I have been shocked to read almost daily about the state and local governments and the universities cutting back on education, laying off teachers, dropping courses, raising tuition, and generally making it harder for young people (and older ones too) to improve themselves.

And, ironically, by using hard economic times as an excuse for cutting back on education, government has made hard times harder by increasing the amount of unemployment. Penny-wise and pound-foolish!

Afghanistan -- The Other Side

A few days ago I gave a lengthy set of reasons why we could not win in Afghanistan (implying that we should get out as fast as possible). I mentioned the problems with Karzai's weak, corrupt, and unpopular government; the tribal/feudal nature of Afghan society; resentment toward outsiders of any sort; and the impossibility -- even with a large high-tech army -- of defeating a passionate rag-tag army of insurgents who travel light and know the country. I think all these arguments are valid.
But then there's the other side (isn't there always?), all having to do with what happens if/when we leave.
1) Will the Taliban take over the whole country again? Most likely, unless we can somehow structure things to prevent it.
2) If the Taliban again takes control, will Al-Quaeda resume using Afghanistan as a base for training and operations? Same answer.
3) What will happen to civilians that have cooperated with us, or to girls and women? Unless we can leave a stable decent government in place, many innocent people will suffer and die at the hands of the Taliban.
So what do we do? It's stupid to stay, and it would be wrong to leave. Great choices.
A columnist in the Raleigh N&O suggested several things: 1) Don't accept the recent stolen election. Put all kinds of pressure on Karzai. If the country had a government that a majority of citizens had chosen and therefore had some confidence in, there might be a chance that the central government would have some authority and might create some stability in the whole country or much of it. 2) While beefing up Afghan forces, the US and its allies should operate with extreme accuracy and precision in removing Al-Quaeda and Taliban leadership. 3) I'm not sure if this point was in the article, but I think it is imperative -- spelling out the preceding point -- that we minimize civilian deaths -- "collateral damage" -- because every civilian death may well translate into three or five or ten recruits for the insurgents. 4) If foreigners -- we and our allies -- must stay in the country, we need to be as inconspicuous as possible. For some insurgents (and prospective insurgents), the very sight of "invaders" arouses them to resistance.

Evaluating Our Role in Afghanistan

Remember when Iraq was just heating up? The administration was talking about "victory" in the Iraq War, but no one -- to my mind at least -- ever defined what "victory" would mean. It seemed that it might mean that there were no longer any insurgent attacks, which would have to mean no more insurgents. But more about that below, in the Afghanistan context.

So what are we fighting for in Afghanistan? Let's first state some mostly undisputed truths: Though we seem to be fighting, at least in part, to support the Afghan government, there is little dispute that Hamid Karzai's administration is weak, incompetent, corrupt, and disliked by a large part of the population. Another fact: Afghanistan has never had a national government; it is a feudal region (nation?), ruled by local warlords who have never accepted rule from outside their territory and who dislike and distrust outsiders. At least part of the insurgency is fed by men who, sharing these values, want to drive invaders -- particularly Westerners -- out.

Another fact: War is messy. When it consists of two orderly armies attacking each other on the battlefield, there may be some hope of minimizing civilian casualties ("collateral damage"). But when one large, well-equipped orderly army is fighting a rag-tag guerrilla force that hides in the landscape and among the civilian population, that well-equipped army is almost certainly going to kill and injure an appallingly large number of civilians. And in any culture, but particularly in one where there is a strong code of honor calling for revenge (think Hatfields and McCoys), every civilian death might lead to five more insurgent recruits.


So we have a peculiar logic at work here. The more we attack insurgents, the more civilians we will kill. The American military in Afghanistan is saying we need 40,000 more troops, and ironically the more troops there are, the more insurgents there will be.

So define "winning" for me.

Schools fail half of disadvantaged students!

A recent article in the Raleigh News & Observer pointed out the appalling statistic that about 52% of disadvantaged students -- defined as those on the free and reduced-cost lunch program -- will graduate. So 48% drop out or otherwise fail to graduate. This is spite of a "successful" diversity (= busing) program. (Schools can be successful even if their students aren't.)
I've been trying to pay attention to what the schools are doing about this massive problem. From quotes in the paper by school administrators and school board members, local and at state level, and plans and mission statements of individual schools and school systems, it sounds as though improved teaching is seen as the solution. To be sure, we need to get rid of incompetent teachers and upgrade the competencies of the others. And yes, we need more and better counselors, and better food in lunchrooms. Durham is even proposing to beef up the truant-officer program (though they call it something more fancy-sounding now).
But there's a problem with all of this. It may all be necessary, but it's not enough.
None of it addresses the basic problem: There are lots of kids, particularly in disadvantaged communities, who don't like going to school. Going to school for many is frustrating, humiliating, boring -- everything that does not build self-esteem, pride, sense of belonging and acceptance.
I haven't heard anyone talk lately about Maslow's Hierarchy, and some people have their quibbles with it, but it represents, in general, a useful concept and tool for studying what motivates us.
In case you've forgotten, Maslow's Hierarchy says that humans have a number (5 or 7, depending on how you divide things up) of levels of need, that work this way:
Most basic are the SURVIVAL needs, which must be met before we can focus on any higher-level needs. If you are cold or hungry (or you need to go to the bathroom), your mind is on that issue, and you will blank out almost anything else that is going on.
Next higher come SECURITY needs. If you're not desperately hungry, you will worry about physical safety. In the modern world, we worry about having insurance or losing our home and also things like being robbed or attacked on the street.
Next comes the relative luxury of SOCIAL needs. If I'm not hungry or frightened, I can focus on having friends and whether people like me.
And then come ESTEEM needs. Once I'm in a fairly good place with all these more basic needs, I can think about excelling, about competing, about becoming rich and famous.
And at the very top is SELF-ACTUALIZATION, a level many people -- trapped at lower levels -- never reach. This is the level where you think ethically, spiritually, creatively.
(This is a very brief overview. For more, go to Wikipedia or other on-line sources.)
Let's look now at a stereotypical disadvantaged student. Where is he on Maslow's hierarchy? The answer -- as with all of us -- will vary from hour to hour and day to day. But basically (not always) he has enough to eat and a place to sleep. He may have some safety issues -- how to avoid getting beat up by some of the bullies in his neighborhood. When he's not worried about those issues, he needs friends, a sense of connection with those around him. And here's where the school falls down. He may not see many of his fellow students -- particularly those from better-off neighborhoods -- as his friends, and teachers even less so. His best friends are likely to be in his neighborhood (and they are likely to make clear that the best way to be a friend is NOT to do well in school). And now, assuming he has some friends, he needs self-esteem -- he needs to be recognized as being good and competent and reliable. And here's where the school really falls down. In school, he feels dumb, looked down on, unable to keep up. Why try?
Now it's great -- and necessary -- to staff the schools with good teachers, but teachers are not really equipped to deal with this youngster's esteem issues. Their job is to teach, to motivate the somewhat lethargic by generating an enthusiasm for learning, but not to provide all the missing ingredients in the hostile youngster's psyche.
We need to think outside the box -- the box being the classroom. We need to provide alternatives to what the neighborhood provides, so that the hostile youngster can feel good about learning, instead of needing to turn to neighborhood influences that make him feel good only by not learning. Those influences are offering this youngster a way to reach the third or fourth level on Maslow's Hierarchy. School programs -- probably outside the classroom -- need to offer this youngster the same opportunity so that he can meet his higher-level needs in school instead of outside.
See my pieces on Project Opportunity for a discussion of one way this can be done.

Choices need comparisons

We are confronted constantly with the prospect of change. Change itself is a different matter: once it happens, all we can do is figure out how to deal with it. But the prospect -- that involves decision-making, whether we are trying to decide whom to vote for or whether to buy a new car, or how we feel about proposed health-care reform.
Too often, the choice is presented as being between the status quo and the new arrangement -- usually a bogus choice, since if we reject the change, the status quo will change in some other direction, and that's what we must calculate and compare with.
An example: Forty years ago when I was living in Charlotte, before the advent of its expressway system, I attended a neighborhood meeting hosted by city officials to present plans for the first segment of downtown expressway. Wonderful. With these wide straight expressways, everyone will be able to zip around town without worrying about traffic. What could be better? Then I raised my hand, knowing what I had seen during a year in Germany: "What provision is being made in all these expressway plans for mass transit?" Silence. Then the response: "None." The shocked look on my face must have convinced the speaker that more explanation was in order: "People in Charlotte prefer to ride in their own cars."
So here's what I'm talking about: The speaker was, without really thinking about it, implying a choice: We can either drive our own cars, or we could ride in Charlotte's existing buses -- dirty, noisy, unreliable, and slow. And it's perfectly clear what any sensible person would choose. The other possibility -- fast, clean, quiet, dependable, modern trains, buses, and streetcars -- was not part of the calculation, and no one considered offering that alternative to the citizens.
In our personal choices -- say, whether to buy a new car or heating system -- it's also a choice between at least two options: What will my total costs be over five years with a new car, vs. keeping the old one? The old one is paid for, so no car payments that way. But what about repair costs? What about costs if the old one dies on the road, miles from home? This is the difficulty with using the status quo as one of the options -- the status quo will change, but how?
Without going into all the arguments in the health-care-reform debate (let's save that for another day), let me just point out that this involves the same kinds of choices. First, we can look at one of the proposed new plans. How will that work for me? for the typical person? for a person with a "pre-existing condition"? What will the actual costs (premiums, co-pays, out-of-pocket payments) be, under this or that set of conditions?
But then, what are we comparing that with? If the comparison is with the present system, we have to run through all the same possibilities, as with the new plan being considered. And -- the hard part -- we have to factor in the likely changes in the existing system, starting with the fact that the existing system is not static but is getting 8% more expensive every year.
In other words, it's not sufficient to dismiss the proposed new program with, "It's too expensive." The question is, "How expensive will the new plan be (for you and me, for the government, for people without insurance now, etc.) compared to how expensive it will be -- with future cost increases -- for all these various groups if we don't implement one or another of the proposed plans?"

Should we educate illegal immigrants?

North Carolina recently adopted what I would consider a compromise resolution to the question of educating -- and providing other public services for -- illegal immigrants, by allowing them to attend community colleges, provided they graduated from North Carolina high schools, and provided they paid out-of-state tuition.
The arguments against providing education and other services to illegal immigrants are
1) that this is a financial burden on taxpayers,
2) that caring for illegals may deprive citizens of the services they deserve, and
3) that offering services encourages more illegals to come. There may be a degree of truth to all these arguments, though the evidence is not conclusive.
On the other side, I would offer one core moral principle: In this country, we should not have any second-class citizens. That was what the civil-rights struggle was all about. "Ah," some will say, "but these illegal immigrants are not citizens." True, technically. But morally and practically, not true. If there are people living among us, and they expect to remain her permanently, and we have no plans to deport them, then for practical purposes they are our fellow-citizens.
I see a black-and-white choice: We need to either 1) deport illegal aliens, or 2) treat them as citizens. I think it is both morally wrong and not healthy for our society to let them stay here, on the one hand, and to deny them full participation in our society and economy, on the other hand. As for how we handle the technicalities of bringing them into full citizenship, there are lots of proposals -- everything from a blanket amnesty to a gradual, perhaps decade-long, process of application and preparation. But I'd say that regardless of the process chosen, one way or the other, anyone we allow to remain here needs to be brought into full citizenship -- because I for one don't like the idea of living in a society with an inferior under-class -- and that's what we'll have if a significant part of our population is uneducated, underpaid, and sick. Such a situation hurts not only them -- but all of us.