Relevant and even prescient commentary on news, politics and the economy.

Leave your Economic Modeling at Home when flying the “Doing What We Do Best” Airlines

Which appears to be taking ethnic looking civilians off their flights.

Perhaps economists should not do their modeling on American Airline flights or for that matter other airlines. It seems one 40-year-old man with curly dark hair and olive skin coloring was quietly sitting in his seat scribbling calculations on a notepad. His seatmate on this puddle-jumper from Philadelphia to Syracuse was a young 30ish blonde haired woman carrying a red tote bag.

As the story goes, the young woman was curious about his unrecognizable note taking. After being rebuffed by a simple “no” from the man about whether his home was Syracuse, she took to her book and jotted down a note and gave it to the flight attendant. The plane door shut and after a delay on the tarmac, the plane began to move to the runway to take off only to be diverted back to the gate.

At the gate, the woman who had said she was sick earlier (in her note to the flight attendant) was taken off the plane. A short time later, the pilot came back to the unsuspecting man and he was escorted off the plane and asked what he knew about the 30-something blonde haired woman who sat next to him on the plane. He admitted to not knowing anything other than her acting strangely.

The woman had seen his note taking and did not understand the equations he was writing. In her note to the flight attendant, she stated she was ill. Not understanding the equations he was writing on his notepad, she suspected it to be secret code for some plot to be hatched on Flight 3950 of American Airlines. Upon deboarding the plane, she explained to the officials what she suspected; “she believed him to be a terrorist and his note taking a secret code.”

Wearing “navy Diesel jeans and a red Lacoste sweater, a look he described as ‘simple elegance;'” the Carlo Alberto Medal winner, University of Pennsylvania Economist, Italian by birth, and tenured Professor Guido Menzio was working on “some properties of a model of price-setting he was to present” at Queens University. Apparently, like many Americans, the young woman with blond hair did not understand differential equations and mistook the equations to be secret codes.

After some embarrassing moments for the officials and the pilot listening to the Professor’s explanation on mathematical modeling, Guido Menzio was allowed to reboard the plane. He and the other passengers took off to Syracuse more than 2 hours late. The woman responsible for his being removed from the plane and questioned had taken another flight.

Ivy League economist ethnically profiled, interrogated for doing math on American Airlines flight,” Washington Post, Catherine Rampell, May 7, 2016

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SCOTUS Approves New Rules for FBI Hacking and Legislates New Law

In 2014, Joseph Hall explained why this could be an issue. “The US Department of Justice is seeking to drastically expand its abilities to search computers remotely through an obscure change in the rules of criminal procedure. This would have the effect of making it easier for law enforcement to remotely break into and search computers worldwide when the computer’s location is concealed. This change is highly dangerous in that it will essentially allow law enforcement to hack into hundreds of millions of computers all over the world. This kind of expansion of power should not be happening in an obscure forum – The Judicial Conference’s Advisory Committee on the Federal Rules of Criminal Procedure – but in open debate and consideration in Congress. Yesterday, I testified before the Advisory Committee, having worked with CDT’s Senior Counsel Harley Geiger on our written testimony.”

This was approved the other day by the Roberts Court changing Rule 41 of the Federal Rules of Criminal Procedure. In the past, a Federal judge in each district would have to approve a warrant to search a computer, telephone, etc. With this change, a warrant just has to be issued by a Federal judge or magistrate and the FBI then has carte blanc to search globally any number of computers technologically concealed, hijacked, or damaged for the same issue. Other courts can not longer reject the one court’s warrant (unless appealed to a higher court).

“Chief Justice John Roberts submitted the rule to Congress on behalf of the Court as part of the justices’ annual package of changes to the Federal Rules of Criminal Procedure. The rules form the basis of every federal prosecution in the United States.” It was the court’s decision to decide within the district it resided in and other districts could reject or decide for another district’s decision. The change in Rule 41 by SCOTUS gives a district court the ability to allow the FBI to investigate globally without revealing the location. Why Roberts believes in this expanded power and another attack on the 4th Amendment is . . . ?

Hat Tip to Joseph Lorenzo Hall, CDT “US DOJ Seeks to Search and Seize Data on Computers Worldwide”. Congress still has the power to change the rule with Legislation and advocate for less or no intrusion into 4th Amendment protected privacy. Doubtful it will the same as it failed to stop Usury or Loan Sharking in 1978.

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7 Million at Risk from Man-made Quakes

Interesting Vox article on natural and manmade earthquakes my fellow Vet and cohort in writing Mark Jamison sent me. This year for the first time ever the USGS is including a map of areas in the US which may be prone to human-induced earthquakes” in addition to areas which are prone to natural earthquakes.

“By including human-induced events, our assessment of earthquake hazards has significantly increased in parts of the U.S.,” said Mark Petersen, Chief of the USGS National Seismic Hazard Mapping Project. “This research also shows that much more of the nation faces a significant chance of having damaging earthquakes over the next year, whether natural or human-induced.”

Natural and Induced Earthquates

From the highest to the lowest potential hazard the USGS has ranked these states: Oklahoma, Kansas, Texas, Colorado, New Mexico and Arkansas. Oklahoma and Texas have the largest populations exposed to induced earthquakes. Small areas of Ohio and Alabama have experienced induced earthquakes; but, this has dropped off with lesser activity. “Wastewater disposal is thought to be the primary reason for the recent increase in earthquakes in the CEUS. While most injection wells are not associated with earthquakes, some other wells have been implicated in published scientific studies, and many states are now regulating wastewater injection in order to limit earthquake hazards.”

Earthquates since 1980 and Recent Areas

Central US has experienced the greatest change in earthquake frequency going from 24 earthquakes per year (1973 to 2008) with an average magnitude of 3.0 to increased frequency year over year 318 per year with a high of 1010 in 2015. From 2009 to 2015, the rate steadily increased, averaging 318 per year and peaking in 2015 with 1,010 earthquakes. The latest data through mid-March shows 226 earthquakes. As fracking and the resulting waste water injection activities picks up in a region, the frequency of earthquakes increases. It is not believed Hydraulic fracking is to be the cause of the increased earthquakes. Testing the maps after one year will verify predictability of location and frequency of earthquakes.

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“The Battle for VA Healthcare and Its Funding”

VA healthcare has its faults; but, it still is one of the more successful examples of publicly funded healthcare even while hampered by a lack of funding to provide more capacity in strategic places for new Iraq and Afghanistan veterans and aging Vietnam veterans like myself. Libertarian Pete Hegseth, a veteran of Afghanistan and Iraq and the CVA, both sponsored by the Koch Brothers, are hawking a dismantling of the VA hospitals in favor of higher cost and less result-oriented commercial healthcare and their own ideological interests. invisible hand

The history of the VA has always included struggles with ideological, political, and commercial (healthcare providers, pharma and hospital supply) interests. In the seventies, activists went as far as to stage scenes (Life Magazine picture depicting care for Vietnam veterans) to make the care look worst than what it was. For commercial interests, it is all about selling more services, healthcare procedures, and pharma as compared to the evidence based treatments received at the VA. For the Kochs, Libertarians, and Pete; it is all about a Randian ideology, an ideology which Ayn Rand could not live up to and forsook to accept Social Security and Medicare.

As you may remember the Koch Brothers are also buying their way on to college campuses such as Western Carolina University by funding Centers for Free Enterprise A Slippery Slope Indeed. The selling of Public Choice and Libertarian ideology under the guise of Economics courses is paramount and they staff these centers accordingly by selecting those who view it favorably. The centers are not a free range of salt water and fresh water economics or intellect as one might find at typical universities. The American Legion and other VSOs have shown similar support for the dismantling of VA Healthcare the same as the Western Carolina University administration showing support for the Free Enterprise Centers. The VSOs have bought into the Koch funded CVA push to do so in favor of commercial healthcare and giving veterans healthcare vouchers.

Together they have orchestrated an attack on the VA by claiming 40 veterans in Phoenix , AZ had died while waiting for their appointments. I did not pick the claim of 40; but, I believe it is time to debunk it and challenge subsequent claims based upon the lack of integrity and truth in the original claim. What was reported to the public by CNN and other news media sources as a failure of the VA to take care of the 40 veterans in critical need by keeping them waiting for care is not true. Yes, there is a longer wait for new patients and first time visits; but, it is not to the extent stated. The Koch Brothers, Pete, and their “web of affiliates have succeeded in manufacturing a ‘scandal’ at the VA as part of a larger campaign to delegitimize publicly provided health care” in favor of the commercial healthcare industry. The exaggeration fed scandal forced the dismissal of Shinseki besides creating another taxpayer-funded commission to investigate the alleged abuses by the VA. “The Best Care Anywhere; Why VA Health Care Would Work Better For Everyone” author Phillip Longman was appointed to this commission. He will need all of the support he can get from veterans who oppose this move by ideological and healthcare industry interests to dismantle VA healthcare.

Former Wall Street Journalist Alicia Mundy (author of Dispensing with the Truth: The Victims, the Drug Companies, and the Dramatic Story Behind the Battle Over Fen-phen) gives a different story of what took place at the VA “The VA isn’t Broken Yet,” The Washington Monthly. Her article and two other articles report on the latest findings and paint a dismal picture of Koch Brothers and the healthcare industry attempts to dismantle the VA using innuendo and exaggerations.

While the allegations of deaths were not proven, the declared accusation of increased deaths resulting from wait times did raise concerns about how effectively the VA was with their care of Veterans. Of course, we all know how effective the overly funded commercial healthcare system is with the care of its patients. If you can afford it you will get every pill, procedure, and practice known to mankind regardless of effectiveness. This is not to say there are not good institutions or professionals; but to say commercial healthcare and wait times are both far better than the VA is simply not true. Indeed, it is the opposite. The overriding interest of those advocating the dismantling of the VA in favor of commercial healthcare is in securing it’s funding for commercial healthcare rather than improving the care for veterans.

One month into his presidency, President Obama appointed former General Eric Shinseki with no opposition in Congress to his appointment as the head the VA. Shinseki immediately set to work transforming a VA burdened by returning Iraq and Afghanistan veterans, a lack of needed capacity in places where needed (Phoenix and Tampa), and funding which did not keep up with the influx of new patients. The Bush administration had failed to close costly unneeded facilities (5 million square feet @ $53 million annually) and add capacity in other places (Phoenix and Tampa) as recommended by the CARES report besides increase the funding necessary to meet the onslaught of new vets. The CARES report listed what facilities needed to be improved and modernized, projected the future demands on VA services through 2022 in each geographic area the VA serves, compared them again to existing infrastructure, and made recommendations on how to meet the future needs of veterans. It was largely ignored as it too needed funding.

Instead of helping to care for all veterans, President Bush had also reversed the decision of former President Clinton to allow all veterans to use the VA and again installed the “proof of need” format for VA care. In other words if you were exposed to Agent Orange, drank bad water at LeJeune, were exposed to radiation from depleted Uranium artillery shells, or indigent; you again had to prove your ailment was military related or provide proof of being indigent. This can be difficult to do and it takes time. Again, presidential enforced bureaucracy ruled at the VA. It could again raise its ugly head with the wrong administration in place.

What about those news broadcasted wait times and other things Shinecki was accused of by Pete, the Koch Brothers, and the CVA? The VA under Shinseki reduced the number of homeless vets by ~25%, reduced the backlog of unprocessed veteran disability claims resulting from increased numbers of new and wounded Iraq and Afghanistan vets by 84 percent, and helped convince Congress to take in Vietnam veterans with chronic illnesses associated with exposure to Agent Orange making them automatically eligible for VA care.” As accused by the Koch Brothers, Pete, the CVA, and the silly news media, this was the man and the General who allowed veterans to wait for appointments and care only to die in the chow line of the VA while side stepping? But wait, there is more:

Under Shinseki, the VA built teams of healthcare providers whose responsibility was the care of its patients. Specific teams of PCPs, nurses, social workers, pharmacists, and health technicians were assigned to manage and coordinate the needs of each patient. This methodology overcomes the fragmentation of care, which can be seen in commercial healthcare today, and was described in Phillip Longman’s “The Best Care Anywhere.” I am taken care of by the VA Blue Team of healthcare providers.

Mental health professionals and substance abuse specialists were integrated into each team and this care excelled beyond that provided by commercial healthcare as it applied proven, evidence based therapy and methodology for mental illness. Insurance companies, Medicare, and Medicaid will not pay for this type of “body and mind” care by commercial healthcare. It is crucial to have it available for veterans as 25% of veterans suffer from chronic mental illness and 16% are addicted.

One study, “The Quality of Medication Treatment for Mental Disorders in the Department of Veterans Affairs and in Private-Sector Plans” touched upon the differences in the success rate of VA care as compared to commercial healthcare.

” In every case, VA performance was superior to that of the private sector by more than 30%. Compared with individuals in private plans, veterans with schizophrenia or major depression were more than twice as likely to receive appropriate initial medication treatment, and veterans with depression were more than twice as likely to receive appropriate long-term treatment.”

Furthermore the study concludes the ‘findings demonstrate the significant advantages accruing from an organized, nationwide system of care. The much higher performance of the VA has important clinical and policy implications.'”

Hey, but what about those overly long wait times broadcasted by the news media and pitched by Pete and the CVA which caused the deaths of so many veterans as stated by them? After all, the team methodology and evidence-based physical and mental care put in place by Shinseki does strain the VA capability to set prompt appointments for new veterans coming into the system for the first time. Then too the need for primary care doctors outstrips the supply of them by ~7500 in 2010 and the shortage is estimated to more than double by 2020. This shortage as well as the amount of team care given does place a strain on the VA capability to supply care to new vets. Unlike commercial healthcare, the VA put in place performance measurements which are available to the public. Commercial healthcare does not make its performance measures available beyond the advertisements seen on TV. “Across facilities, veterans waited an average of six and half days from their preferred date of care to their actually seeing a primary care doctor. In comparison, a private survey taken by the consulting firm Merritt Hawkins showed that in fifteen major medical markets across the country, non-VA patients seeking a first-time appointment with a family practice doctor had to wait an average of 19.5 days.”

For the first half of fiscal year 2015 starting October 2014 through March 2015 using the most recent data available from the Assessment B (Health Care Capabilities) Page 190 wait time study, the average number of days “Veterans waited for new patient appointments was approximately six and a half days from the preferred date for primary care, six and a half days from the preferred date for specialty care, and three and a half days from the preferred date for mental health” care as taken from page 190 of the same report.

Indeed, Figure 4-14 shows >93% of all veterans completed their appointments within 30 days. Again to compare, the average wait time for new veteran patient appointments is six and 1/2 days from the preferred date while the average wait time for non-veterans using commercial healthcare as experienced in 15 markets for first time visits is 19.5 days from the preferred date or three times longer.

invisible hand

And those 40 deaths caused by too long of a wait time? As taken another report, Review of Alleged Patient Deaths, Patient Wait Times, and Scheduling Practices at the Phoenix VA Health Care System, revealed, six and not forty veterans had died experiencing ‘clinically significant delays’ while on waiting lists to see a VA doctor. In each of these six cases, the IG concluded “we are unable to conclusively assert that the absence of timely quality care caused the deaths of these veterans.” But for some reason those wishing to dismantle the VA can conclude such. Maybe they have a different source of information? They do not and this gets to the root of the issue. Why would someone make up such stories and the media report on them without adequate research when the end result would potentially cause so many veterans to lose their coverage and surrender to a must worse situation with commercial healthcare? News and especially catastrophic news sells and news today is lazy and lacks integrity. For everyone else concerned, it is the money involved or the VA funding.

My own experience with the VA has been good and that with major US hospitals and commercial doctors has shown similar if not greater wait times. God knows, I have been in enough hospitals since 2012 advocating on my own treatment. If you do not know, ask questions and do not be so ready to accept what is told to you because the person is a doctor. They do make mistakes like being given blood thinners when you have a blood disorder. As Alicia Mundy put it succinctly “while the VA has an assortment of serious problems, it continues to outperform the rest of the U.S. health sector on nearly every metric of quality—a fact that ought to raise fundamental questions about the wisdom of outsourcing VA care to private providers.”

I am not on board with this take over of VA Healthcare by commercial interests as supported by moneyed ideological and political influences. I would urge veterans to speak up as what you are going to get will not match what you have. Once your voucher is spent, game over.


“THe VA Isn’t Broken Yet Alicia Mundy, Washington Monthly

Review of Alleged Patient Deaths, Patient Wait Times, and Scheduling Practices at the Phoenix VA Health Care System

” Assessment B (Health Care Capabilities)” Rand Study on Wait Times 2014/2015

” Comparison of Quality of Care in VA and Non-VA Settings: A Systematic Review”

“Changes in Suicide Mortality for Veterans and Nonveterans by Gender and History of VHA Service Use, 2000–2010”

“Department of Veterans Affairs to Realign Its Capital Assets”

“Documents Show the VA Debacle Began Under George W. Bush”

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MI Pushing the 85th Percentile “Again”

Michigan has had an issue fixing its roads and for the last two years the Republican controlled Legislature and the Republican Governor have not been able to decide or agree on what the solution might be. I believe what has been decided was an increase in gas taxes, some money from the imaginary general fund which also contains the Medicaid expansion money, and an inflation factor (my idea) in the gas tax law going into the future. It solves 50% of what is needed to fix the deteriorating Michigan infrastructure.

It is pretty well known and proven, vehicles are more efficient at lower speeds. If you get out on highways 96, 696, 75, 275, etc.; you would wonder if such were true or not, especially when gasoline was $3+/gallon and TBTOTF (too big, too often, too fast) dinosaurs were out there cruising at 80-85MPH in 70MPH zones. Mind you, I am not a left lane hog and usually run the right lane and move to the center to pass at my 70-75mph speed. Even then, you will find someone who wishes to get up-close and personal at 2 car lengths behind you to where you can not see their headlights anymore. Its like, what gives? Oh, I could go faster; but, what is the point? I may arrive a second sooner if lucky.

I had an interesting discussion with some of the proponents of the 85th percentile in setting speed limits on highways. Their points vary; but much of this goes back to a sixties study by Dave Solomon who suggested the 85th percentile as the right speed limit to set. If 85% of the drivers are going 70MPH, then this is the speed limit even if it is 65MPH (never seen this applied backwards yet). They go on to cite various supporting anecdotal factors such as people going too slow cause most of the accidents, the police become the enforcers and we begin to resent them so we should not make it such, my friends should not be made criminals for speeding, etc. It is unique how many excuses are made to increase speed and go faster. Except the proponents of going fast conflate the issue and only present one issue as a cause of accidents. The proponents cite accident reports of people claiming they were doing the speed limit when they were involved in an accident with someone going slower. Is this good data? Well maybe, if it was recorded on a radar; but more than likely, this was a report by the driver of the car supposedly doing the speed limit. What driver would report doing 80MPH to the police? Going too slow is an issue as well as going too fast or what one might call “speed variation” which encompasses both factors.

Advocates of the 85th Percentile approach argue the 85th usually brings about a reduction in the need for enforcement and reduces crash risk by narrowing variation among vehicle speeds. Studies have shown the speeds do not remain within that narrow range for long and speeds have continued increasing beyond the newly set limit. The 85th Percentile is not a stationary point and is akin to a moving target and requiring a new 85th percentile target when people begin to exceed the now old 85th. There have been changes upwards before in Michigan and still the need for more speed increases. They will burn more gasoline in the end and fill the state coffers with revenues from it. There is a hint of libertarianism here or “I want to do what I want to do, its my right!”

Lets call it what it is; “Don’t impede my right to do as I want to do and do not force me to pay more in gasoline taxes.”

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Why the Refuge Protestors May Have Been Right

Protests have always been a part of America and this one at the Malheur National Wildlife Refuge appears to be no different. Violence and the taking of life when it does not have to occur has also played a part in the protests. It was no different at Malheur National Wildlife Refuge.

In the past unions, facing company and governmental opposition to their demands have resorted to violence when they found peaceful protests did not work to gain recognition. Frustration on the part of union picketers with the appearance of strikebreakers, the delivery of materials, and the shipment of product eventually led to violent reaction. My own personal experience while attending a seminar in San Francisco found me in the midst of a hotel workers strike at the Sheraton on The Wharf. They were not a happy bunch and spent much time verbally abusing the help or scabs, as they called them, guiding us into the hotel. The hotel business continued and after the strike ended, the workers who stayed during the strike were let go. Either way, Labor paid.

Illegal and at times legal conduct by any protesting group almost always led to forceful retaliatory action by business, police and the military. The clashes sometimes led to injury and death with the employers, police, and government better equipped than the protestors and strikers. Under cover of the law, the actions of the police and government were just another vindication of employer rights and societal laws. Even in this environment, Labor prevailed. It has changed since those times when Labor was growing in influence. Labor and protesting success is on a downward slope losing ground in each confrontation whether legal or not. Legislatures continually nibble away at unions, worker, and protestor rights.

A Little History and Numbers

I did get in a discussion about the occupation of the Malheur National Wildlife Refuge. The history of the refuge and grazing, the diversion of water, the low grazing prices charged ranchers, and the over grazing of land in the early years is mostly correct. To take over a refuge and federal land, it is hard to understand why someone would risk life and limb to challenge the local authorities, the government, and the military. In any case, it is a sure recipe to lose, go to prison, or die when you challenge the authorities, are armed, and considered dangerous. One man did pay with his life and the rest are under restraint by the authorities. This short commentary is not so much an argument of whether their stance was right or wrong as much as whether it was worth it or the right one to make. By taking over the Refuge, I believe the protesting ranchers left the public with the wrong impression.

The domination of the beef production by the meat packers and retailers plus the failure of Government to react to it has increased the costs faced by smaller ranchers and contributed to the controversy of grazing rights. With the consolidation of meat packers and the rise of giant retailers such as WalMart, prices for bringing cattle to feed lots decreased forcing cattlemen to reduce cost. Two ways to reduce cost are increase the size of your herds which requires more land or increase the numbers of meat packers so no one meat packer can influence the market. Smaller ranches have higher costs in production over larger ranches result from the numbers of cattle brought to market. Fewer cattle to feed lots or markets result in higher costs per head. In my opinion, the argument should be made with the government about the consolidation of meat packer market. Grazing rights and the ownership of land by the Federal Government is not necessarily the right argument to make. Whether the Government can own or control land was decided by SCOTUS (Light vs. U. S. and U.S vs. Grimaud) years previous and after the Sagebrush wars when the Federal Government started to charge fees for access after land was designated as national parks.

“In 1990 and after a decade of mergers, 4 companies ‘slaughtered and packed 69 percent of US-grown cows’ as reported by University of Missouri rural sociologist Mary Hendrickson. The progress gained by independent ranchers from the passage of such bills as the Sherman Anti-Trust, Wilson’s Clayton, and Harding’s Packers and Stockyards Acts has deteriorated. Today, the top “four meatpacking companies control 82 percent of the beef market — an unprecedented share of the pie.”

The Issue for Small Ranchers

The issue of grazing comes up when smaller ranchers try to increase the size and volume of their operations to gain the economies of scale achieved by the already much larger manufacturing ranches and there is nowhere to do so except expand on to public lands. A small ranch of 20 to 49 head may have a cost of ~$1600/head as compared to ranch of 500 or more with a cost of ~$400/head. The larger the ranch and herd is, the more the spread of Labor and infrastructure cost. To grow your herd to lower the cost/head as determined by meat packers and retail giants, a rancher needs land. What was previously free, was leased to ranchers and the costs of leasing came into question as added burden as well as whether it was constitutional.

invisible hand

Pressure to reduce costs came into play. As meat packers scaled up their industry through buyouts and the addition of capital, retailers such as WalMart did the same through larger operations. Larger ranching operations meant lower cost per head and also per pound of meat. Cost pressure increased all the way down the processing line. Ranchers which could expand did so, and the rest either turned to boutique businesses, sold out, or went out of the meat business altogether. The alternatives were dire.

Even with the expansion of the ranches, the percentage of retail dollar going to ranchers continued to shrink. It was either scale up and continually lower costs or go out of the beef business. Thousands of ranches did either and still those left struggled to get by. To increase competition amongst ranchers, meat packers offered exclusive contacts to buy meat and added contests (increased prices) which promoted heavier chickens or cattle sold, etc . The problem was, no one monitored what the livestock was fed. The smaller ranches who could not compete in this environment disappeared from the market place.

invisible hand

By policy, federal anti-trust regulators whose funding was cut by Congress, blocked by past administrations, or were pro-business mostly ignored the actions of companies using their market power to drive prices (oligopsonistic?) down. Similar tactics are employed by automotive OEMs who squeezed the supply base on pricing, inventory, payment terms (90 days and then late in payment), etc. If you do not like it, then you do not get the business to sustain yourself. Some Tier Ones such as Delphi, Yazaki, Lear have been able to fight back and then too some of the same (Delphi) have been forced to curtail their businesses through reorganization. The strategy also changed for antitrust regulators as New America Foundation’s Barry C. Lynn; points out; “since the era of Reagan, US antitrust regulators have focused almost exclusively on whether large companies use their market power to harm consumers by unfairly raising retail prices” and leaving small companies to fend for themselves.

What the Rancher’s Argument Should Have Been

What this strategy does is change the focus to “low pricing to consumers” (think China manufacturing of product) from competitive and fair business practices of meat packers and retailers in the market place. In other words, if it is low pricing to the customers, it has to be good. Well, past practices of such environments have shown it was not good in the end. Yes the consumer gets a low price; but it is fatal to small businesses and Labor by leaving a concentrated market controlled by a few corporations. Today, the meatpacking industry is controlled by 4 majors having >80% of the business. This type of concentration was largely put to rest in the past by the passage of Sherman Anti-Trust, Wilson’s Clayton, and Harding’s Packers and Stockyards Acts and the enforcement of these laws in the past until reinterpreted narrowly by Reagan’s DOJ. This practice hurt small farms and ranchers decades ago and in the end the consumer as competition is lessened.

This should have been the rancher’s argument. The take over of the Refuge was a distraction from the real issue faced by small ranchers and small businesses. It may have been a reaction of last resort; but, it was fatal to their cause.

What President Obama Tried To Do to Help Small Ranchers

After his election in 2008, President Obama took up the cause of independent farmers and ranchers against the excesses of meat packers. Starting with a series of 5 meetings with various farm groups representing cattle, hog and chicken farmers, the USDA who was charged with rewriting regulations and President Obama found themselves blocked by a Republican controlled House. While the Senate supported appropriations for the overall meat industry, the House went full out blocking food stamp and food safety programs. No one wanted to place the poor at risk. In December 2011, the USDA published 4 watered down regulations of which the only full strength regulation eliminated arbitration. In May 2012, the DOJ followed through with a report on the five 2010 meetings detailing a lack of competition. The DOJ went to state:

“It could not act to address these wrongs because, no matter how outrageous the conduct of the processing companies, their actions did not amount to “harm to competition” as defined by the current antitrust framework” which was skewed to protect consumers. Obstructionist Republicans in the House not only blocked any reform efforts but also any change to the law or USDA regulations and threatened budget cuts to the Department of Agriculture. It would be interesting to discover which Republicans blocked the reform efforts of Obama and the DOJ and came out in support of grazing rights for ranchers.

How the Administration’s Actions Harmed the Ranchers

The efforts of the administration to reform the industry may have caused more harm than good; “documenting the big processing companies’ exploitation of independent farmers” through the five meetings held by the administration” and “then failing to stop that exploitation and retreating in almost complete silence before entirely predictable resistance from the industry, the administration, for all intents, ended up implicitly condoning these injustices.”

The failure to succeed and subsequent silence gave further support to the “processing companies and they were now free to do whatever they wished to in the meat industry” knowing whatever they did would not be countered.

Furthermore, the raising of hopes and the backing of independent ranchers against big farming business interests frustrated the hopes of the independents who hoped for a fair shake in the open market. They were left again with few if any alternatives. Some gave up and others chose a more militant reaction forcing the administration to take action against the very ones they were seeking to help. And the Republicans, laughed at the moral failures of the administration.

The rest of the story . . .


Obama’s Game of Chicken Washinton Monthly, November/December 2012

Are Monopolies Destroying America

The Oregon Militia Is Picking the Wrong Beef With the Feds Mother Jones, January, 2016

Cattle group alleges corruption in meatpacking industry

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US Federal Marshals Picking Up Student Loan Defaulters . . .

Alan Collinge of the Student Loan Justice Org sent me an email yesterday.

Bad Stuff from Texas . . .

Hey Bill!

This is a scary story. They are arresting people en masse in Texas over student loan debt.

I got on the Thom Hartmann show to talk about it:

There’s no direct tie-in with the for-profit prison thing, but for some reason the one reminds me of the other!!!

Anyhow, I hope all is well on your end!


If you go out on the internet, you are going to see a lot about this with the Washington Post blowing it off and Tyler Durden at Zero Hedge treating this incident as more than just a single occurrence. Did some Googling and ended up with “Sputnik News” and the Washington Post. Tossed Sputnik News and read the Washington Post article. Here is what the WP had to say:

“If you’ve defaulted on federal student loans, you can breathe more easily. You won’t be arrested for simply failing to make payments.”

More to the story:

“Marshals had made several attempts to contact Aker to appear in federal court, according to Hunter. Notices were sent to numerous known addresses. Marshals spoke with Aker by phone and requested that he appear in court, but Aker refused, a statement from officials said. So a federal judge issued a warrant for Aker’s arrest for failing to appear at a December 2012 hearing.”

The sum we are talking about here is $1500 before collection agency fees and the costs of federal Marshals contacting the debtor and dragging Paul Akers away to jail. What the WP’s Michelle Singletary misses in this is the case is in federal court with federal Marshals dispatched to pick up Mr. Akers for a debt of $1500. If this is not unusual to the WP columnist as she notes, it is highly unusual to me and I too have been involved with student loans for years. So what gives?

29th District Texas Congressman Gene Green: “the federal government has been contracting out student-loan collections to private debt collectors, who are allowed to deploy the U.S. marshals as their enforcement arm.

There’s bound to be a better way to collect on a student loan debt,’ said the congressman. Around Houston, that “better way” involves 1,200 to 1,500 arrest warrants. Student debt is at an all time high in the U.S., where students hold an average of $35,000 in federal debt, according to an analysis of government data on “Edvisors.”.”

This appears to be over reach by the US Department of Education if this is really happening; but a closer look revealed, judges are going after people who do not show up in court. You can be held in contempt for this and also if the judge believes you are deliberately failing to pay. Both occurrences will get you a place in prison. The bigger question is why does a private collection agency get to use federal court and federal marshals to collect $1500? And yes I already know the US Department of Education is a federal being.

Even so, seven armed US Marshals? What if the Justice Department treated bankers and investment firm gamblers in a similar manner? Something is awry when the US Department of Education allows debt collectors to resort to Federal Court (which already has a lack of Federal judges due to Republican legislators blocking Pres. Obama nominations). I wonder how this will play into the gov., the pres., the Koch Bros, CAP and other supposedly lib and prog. think tanks wanting to let prisoners out of prisons due to harsh sentencing. But wait a minute, these are past and present students and they do not count. There is so much wrong here, it is difficult to know where to begin.

So is this just one “toss-away” to scare students or maybe a federal judge exercising his judicial moxy or as the WP columnist says this is not a precursor of more arrests to come? According to the WP article:

“’If anyone out there thinks that it is the top priority of the U.S. Marshal’s Service to arrest student-loan violators, they are sadly mistaken,’ Richard Hunter, chief deputy U.S. marshal for the southern district of Texas, told me (WP columnist) in an interview.”

29th District Texas Congressman Gene Green says more to come as the US Dept. of Education cracks down on student loan defaulters in Texas (for now).

At Zero Hedge, Tyler Durden confirms the Congressman’s belief;

“Our reliable source with the US Marshals in Houston say Aker isn’t the first and won’t be the last.

They have to serve anywhere from 1200 to 1500 warrants to people who have failed to pay their federal student loans.”

This just goes to confirm my belief of the present effort by the Koch Bros, CAP and other liberal think tanks in addition to the conservative/libertarian think tanks on changing sentencing guidelines and releasing thousands from prison due to harsh sentencing. This has nothing to do with having sympathy for those caught up in preordained sentencing guidelines for repeat offenders and druggies as much as it has to do with changing the law to keep corporate management out of jail for violating EPA laws, banking laws, etc. In this instance, the ploy is to shift “mens rea” on to the prosecution alleviating the need of corporations having to prove they and their management did not know the law (in such cases you ask for jury trials now). We are again being hoodwinked by the Koch Bros who wish to piggy back this shift on present legislation sponsored in part by Congressman John Conyers who sees African Americans getting out of prison now incarcerated due to harsh sentencing guidelines. A noble effort; but, it should not give Corporate America and its heads a free get-out-of-jail card.

We will stick it to present and former students who typically have little money to pay back aggressively formatted loans, fight back against debt collectors in court, and send multiples of federal marshals to their homes to drag them to court while giving heads of Corporate America a lenient alternative. Who thought of this???

“If justice means a prison sentence for a teenager who steals a car, (or for that matter defaults on a student loan [myself]) but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, then the promise of equal justice under the law has turned into a lie. The failure to prosecute big, visible crimes has a corrosive effect on the fabric of democracy and our shared belief that we are all equal in the eyes of the law.” Senator Elizabeth Warren; “Rigged Justice: 2016 How Weak Enforcement Lets Corporate Offenders Off Easy>”

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A Slippery Slope Indeed

Mark Jamison has been a guest columnist of the Smoky Mountain News on several occasions now arguing against the addition of the Koch sponsored Center for Free Enterprise. This is another well written expose of why this addition should not be allowed at Western Carolina University. I would point out the flip-flopping going on as Chancellor Belcher glosses over in his explanation of mistakes being made. In earlier statements by Dr. Robert Lopez, the Provost, and the Trustees, the procedure was followed.

To give this the coverage needed both Yves Smith at Naked Capitalism and Angry Bear have been covering this issue. “UnKoch My Campus” has also picked up on Western Carolina University.

invisible hand In “Sons of Wichita”, his detailed and heavily sourced biography of the Koch family, Daniel Schulman relates a story about Charles Koch’s attempt to apply his libertarian management theory known as Market-Based Management to Wichita Collegiate, the private school located across the street from the Koch compound. The school originally cofounded by Bob Love an associate of Charles’s father Fred Koch from the John Birch Society became embroiled in an “acrimonious uprising” after Charles Koch in his role as chairman of the school’s executive council applied techniques from his Market-Based Management system, a system designed to force everyone in an institution or business into an entrepreneurial role.

Schulman relates how Koch and other trustees meddled in hiring decisions and caused the abrupt resignation of a well-liked headmaster. “Incensed parents threatened to pull their children from the school; faculty members quit; students wore black in protest. Charles stepped down from the board of trustees citing, among other reasons, the school’s refusal to integrate his management style. But in a sign of just how much influence he exerted over the school; Richard Fink, one of Charles’s key advisors and an architect of Market-Based Management was installed as Collegiate’s interim head. The outrage ran so deep that, as Fink tried to tamp down the uproar, he was hung in effigy around campus.”

Fink, who received his PHD in economics from Rutgers later moved to George Mason, a public university in Virginia, to start the Koch sponsored Mercatus Institute. Fink figures prominently in Koch efforts to control and dictate to charities and educational facilities receiving Koch support. Another Koch sponsored enterprise, the Institute for Humane Studies, caused similar disruptions when it was relocated to George Mason. Schulman reports,

“The mission of IHS is to groom libertarian intellectuals by doling out scholarships, sponsoring seminars, and placing students in like-minded organizations.”

Simply providing funding for the promotion of his libertarian ideology was not enough for Charles Koch though. Roderick Long, a philosophy professor from Auburn and an affiliate of IHS is quoted as saying, “Massive micromanagement ensued.” Long went on to say, “the management began to do things like increasing the size of student seminars, packing them in, and then giving the students a political questionnaire at the beginning of the week and another one at the end, to measure how much their political beliefs shifted over the course of the week. (Woe betide any student who needs more than a week to mull new ideas prior to conversion.) They also started running scholarship application essays through a computer to measure how many times the ‘right names’ (Mises, Hayek, Friedman, Rand, Bastiat, etc.) were mentioned – regardless of what was said about them!” (The preceding quotes come from pages 250-251 Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty).

It should be noted that Professor Long is no liberal. He edits “The Journal of Ayn Rand Studies” and is a member of the Ludwig von Mises Institute, an organization that promotes the theories of the dean of Austrian economics.

Both Professor Lopez and Professor Gochenour are products of the George Mason program and Mercatus. In his memo to Andrew Gillen of the Charles Koch Foundation Professor Lopez characterizes the other members of the WCU economics department indicating Professor Gochenour was a student of “Boettke and Caplan”. In a YouTube video seminar, Professor Boettke characterizes himself as “a doctrinaire free-marketer.” In the same memo, Professor Lopez lists his association with IHS. Presumably then both professors are familiar with the sort of metrics and deliverables that are integral to Koch’s Market-Based Management system.

Both Schulman’s book and Jane Mayer’s new book “Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right” go into great detail about the various organizations sponsored and funded by Charles and David Koch. From Americans for Prosperity to academic institutions similar to Mercatus, the Kochs have been active in funding organizations that promote specific ideologies. For better or worse that is something endemic in both our politics and apparently our public universities. Lately Charles Koch has been quite vocal in bemoaning the fact that his political contributions have not yielded an appropriate return on investment as demonstrated in a recent interview in the Financial Times where he said,

“You’d think we could have more influence.”

What is perhaps more troubling is in academic settings the Kochs have sought to exercise an extraordinary degree of control. Between 2007 and 2011 Charles Koch has pumped $31 million into universities for scholarships and programs (within that number the $2 million to WCU seems significant). At Florida State the contract with the university provide $1.5 million to hire two professors included a clause giving the Koch Foundation over the candidates.

The plan Charles Koch with the aid of Richard Fink has enacted is called a “Structure of Social Change” – a sort of business plan for the marketing of ideas. Fink has said about the plan:

“When we apply this model to the realm of ideas and social change, at the higher stages we have the investment in the intellectual raw materials, that is, the exploration and production of abstract concepts and theories. In the public policy arena, these still come primarily (though not exclusively) from the research done by scholars at our universities.” (my emphasis)

As Schulman reports,

“ . . . Cato Institute, Mercatus, and the dozens of other free-market, antiregulatory policy shops that Charles, David, and their foundations have supported over the years . . . churned out reports position papers, and op-eds arguing for the privatization of Social Security; fingering public employee unions for causing state budget crises; attempting to debunk climate science; and making the case for slashing the welfare system and Medicaid.”

The book that Professor Lopez published for the broad market, “Madmen, Intellectuals and Academic Scribblers: The Economic Engine of Political Change” follows closely to the program Fink articulates.

Over the years the gifts from the Koch Foundation to various universities have faced increased scrutiny. The contract with Florida State clearly went against basic academic ethics. There is nothing however to indicate that Charles Koch has retreated in his desire to instill his radical brand of libertarianism into the institutions that create public policy and the universities that provide the research that helps support policy decisions. What has perhaps changed is that Mr. Koch, his foundation, and those he supports have become ever more sophisticated in capturing an outsized amount of influence.

Chancellor Belcher assures us there were mistakes made in the presentation of the current proposal but that the proposal itself meets all the basic criteria for acceptance. The fact that Professor Lopez advertised positions before official acceptance and outside normal channels raises significant questions. The contract may not allow veto power but if the structure of the program and the hiring are filtered through products of Koch programs, we may have a distinction without a difference. Charles Koch and his assistants like Richard Fink have been very clear about their intent and goals. It does not take a great deal of research to uncover statements that clearly speak to intent to indoctrinate. Ad hoc denials aside there is no reason not to take Mr. Koch’s word.

Chancellor Belcher suggests the bringing of a stronger level of scrutiny to the Koch proposal pushes us down a slippery slope. The chancellor is no naïf and surely he knows that in a complicated world we are often presented with slippery slopes – that is why judgment, ethics, and scrutiny exist. Dogmatic and doctrinaire disciplines give a skewed and distorted picture of the world as an either or, or black or white scenario. Hayek, Mises, and other doctrinaire believers in the creed of the free-market tell us the choice is either markets or Stalinism, an inexorable “Road to Serfdom.” Tennyson tells us,

“There lives more faith in honest doubt, believe me, than in half the creeds.”

There is a certain irony bordering on outright cognitive dissonance when the economics department of a publicly funded university embraces a set of theories that denies the need for public education and treats such public funding as an affront to the market. If scrutinizing this proposal puts us onto a slippery slope then accepting it simply sends us to the bottom of the slope.

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Reported Today, Associate Justice Scalia Passed Away . . .

The significance and impact on the nation and SCOTUS of his passing goes without saying. If President Obama can appoint a more liberal Justice on the Court, the balance could shift and perhaps some of the nonsense of the court’s previous rulings could be overturned. Thinking of United Citizen, etc. Of course this happening with a Republican controlled legislature will be extremely difficult. Not sure what happens when there are only 8 until a new Justice is appointed.

Here is the article: Senior SCOTUS Associate Justice Antonin Scalia Found Dead at West Texas Ranch. David Atkins at Washington Monthly reported this just moments ago.

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