Thursday, August 7, 2014

Rwanda Constitution

Rwanda Constitution

In honor of Jacob Srebanize coming to my university, Western Illinois University, to give the University Theme Lecture, I read up on the Rwanda constitution. And from a participatory democracy point of view, it and its development, has blogworthy features.

I presume that all the readers know of the horrible features of the genocide involving Hutu and Tutsi tribes. Political parties are prohibited from "basing themselves on race, ethnic group, tribe, clan, region, sex ... or any other division which\may give rise to discrimination." Yet sadly, this clause was used to suppress other parties, There is a provision where the Senate can lodge a complaint against a political organization with the High Court and appealable to the Supreme Court, and they can dissolve the organization. If this happens, all their members of parliament lose their term.

Interestingly enough both the Chamber of Deputies and senate have reserved seats.

  1. women (24 out of 79 deputies)] 30 percent of the senate
  2. two members of the Deputies elected by the National YOuth councel
  3. One deputy representing the disabled.
  4. four members elected from a group of political parties. the constitution provides for this organization
  5. two reserved positions for faculty members

The "P)resident of the republic" may call a referendum. We saw this in use in Iceland relating to the bailout of the banks.

Gawanga cites Kirsti Samuels in that after the break from a conflict or authority, there are likely to be participatory constitution making processes and these helpful in legitimizing the constitution and bring the citizen ry together.

Article 45, "Every citizen have the right to participate in the governance of the country, whether directly or through freely chosen represenatives.."

Acorcding to Gasamagera, the creation of the Constitution was done with much consultation with the citizenry (through questionnaires) and with input from civil society. In fact the limitations on parties was done on the basis of the "people's wish" in response to the genocide. They simply did not want political parties. Also,the provisions regarding women having 30 per cent of the seats was put in at the people's request. and at the time of writing Rwawnda has 49% of its parliament women and is the highest in the world.

Also western advisors on constitutions were rejected, because the constitution should be developed by the people.

Participatory democracy is used to deal with genocide trial, 825,000 cases, which could not be managed by conventional means. The term is GACACA.

Gamasara also mentions the participatory democracy aspects of designing the flag, national anthem and national logo.

References:

  1. to be blogged later, Kirsti Samuesl 2006, Paradoxes and Compromises in the design of Post Conflict constitutions Research Partnership in Postwar State building, website at http://state-building.org
  2. The Constitution Making Process in Rwanda: Lessons to be Learned by Senator Gasamagera Wellars, Senator at the seventh Global Forum for Reinventing Governmment, Vienna 26-29 June 20067
  3. Constitution of Rwanda
  4. Wikipedia Article on Rwandan Constitution

Sunday, June 29, 2014

Miscellaneous referendum news

Switzerland, November 24th, will vote on a referendum prohibiting any business from paying anyone more than twelve times the salary of their lowest earners. Also, there will be a referendum on a minimum wage of 2500 Swiss Franks. ("regardless of whether or not they have a job.") And a short time ago, a referendum passed to eliminate golden hellos and good byes.
Financial Times "Swiss Referendum on Wages of iIgh Earners Stirs Debate" by James Shotter November 12th

Coed Bathroom Law Referendum-- 620,000 signatures have been collected. If passed, it would overturn a law about coed bathrooms.

Cash Shortage in China

Many business are exchanging IOU's, guaranteed by banks, instead of paying their bills in cash. Also banks are extending loans rather than declaring them nonperforming. (Note that China's total money supply is is 110 trillion yuan (about 18 trillion dollars). And their total corporate debt is 145% of GNP with interest payments being nine percent of GNP--more than the US. Total debt is 210 per cent.) of which sixteen percent are these IOUS. Less than a quarter of business surveyed report having access to bank credit. (Although ocassionally these are electronically, most of the the time they are real paper. Each company that eøxchanges them puts their seal on them, sometimes attaching a piece of paper if there is not enough room for all the seals.)

"With Yuan Scarce, Firms Get Stuck with IOUs" Wall Street JournalFriday, April Fourth 2014 page C1 and C2.

China's Minsky Moment by John Mauldin

Parks Referendum

Portland is having a referundum on whether to sell part of a park. This editorial argues that referendums increases polarization rather than reduces it. The referendum will prevent the City Council from giving up any of its park land; editorial says that :
If the accountable elected leaders can’t be trusted to weigh the various factors that make a city livable, then who is?

This election is not a choice between good guys and bad guys – it’s about what process we want to use to make decisions that don’t lend themselves to yes-or-no answers."

Referendum Process Referendum

The city of Springfield, Missouri attempted to make several changes in the referendum process in one Yes/no vote. It narrowly failed. And in learning about YES/NO votes, they decided to split this into several votes. But they did not consider relationships between them. ``

Spain wants Monarchy Referendum

62 of Spaniards want a referendum "at some point" to decide onthe future of the monarchy. I read in Spanish class that the king who just abdicated was very instrumental in bringing in democracy denying the wishes of the dictator Franco who picked him to continue his dictatorship after he died. Yet polls say the vote would be 49% in favor of the monarchy with 32% against. The prime minister argued that the Constitution which set up a ceremonial monarchy was approved overwhelmingly by the people. (But I bet it was a take-it-or-leave-it vote. Wikipedia article on Spanish Constitution referendum says that vote was 91% yes; there was no indication of any options, just yes or no.)

College Debt by Share Mechanism

Federal "Pay As You Earn Repayment Plan" expands and it is anticipated that five million would be eligible. All federal loans are subject to a program where monthly payments are fifteen percent of after-tax income. However, unlike share economy paradigm, it is forgiven after twenty-five years, ten years if the person works in the public sector. The "Pay as You earn repayment Plan" applies to those with loans going to 2007 and earlier, and the rates are lower (only ten percent of monthly income and forgiveness comes after twenty years). And if the participants income rises, they can switch back, possibly automatically, to the ten-year plan. Six hundred thousand student loan borrowers have defaulted. 40% of college students don't graduate in six years. 45% of those who did graduate had jobs that did not require a degree.

Lumni is a private company doing this--so far with five thousand students. I researched this myself. The bankruptcy code states that student loan debt is not dischargeable; thus one can't get a student loan, declare bankruptcy, then enjoy one's high income. However, this only applies to something guaranteed by a non-profit. So a bank, or an individual investor, who does an income-share agreement with a college student can be stymied by the person declaring bankruptcy. Lumni are mostly active in South America; they are working with House of Representative members to give these agreements legal significance. Probably, the agreements would be required to limited to thirty years, to have an exemption for those earning under ten thousand dollars, and "not dictate career choices." I have a problem with the thirty-year limit. One or more fourty-year olds might support some college students. After thirty-years, the loaners would probably still be enjoying their retirement and wanting the income and the students would be in their highest earning years.

By the way, they were inspired by another income-share agreement. David Bowie sold shares in future revenue to finance his income. Milton Friedman also briefly mentioned the idea of income shares.

College Debt: Easing the Burden, Saturday/Sunday June 14-15 2014 B7 and B9, Wall Street Journal Volume CClXIII B1 138.

"Escaping the Student Debt Trap" Saturday/Sunday June 14-15 2014 The Wall Street Journal Page A11

Monday, March 24, 2014

India and Israel

India

"Why Everyone is Afraid of Arvind Kejriwal" by Dhiraj Nayyar India Today International. October 12 2012,Volume V, Number 44, Pages 12 to 17
Jatin Gandhi, "The Man Who could have been Kejriwal" India Today International January 20 2014
AAP Effect, by Kunai Pradham, INDIA Today International , January 20th, 2014, page 14 to
Wikipedia Page on Aam Aadmi Party.

Arvind Kejriwal is an anti-corruption fighter who is building a new poliitcal party, "India Against Corruption" or Aam Aadmi Party (AAP). He is known for naming and accusing of corruption, prominent politicians and their families. He is in favor of decentralization: "gram sabhas" and urban neighborhoods. The "decisions must be taken by the people and not 'experts' or 'officials' ' a direct democracy' However, his documents would reverse the free-market shift in the last two decades of India. Their Visio document does say that "development cannot be guided by the 'logic of capital' or forces of the 'free market' and Guidance should be given by the 'need of the last person.'

Raul Gandhi is also pushing to involve more people in the Congress Party, the "Grand Old Party" of India.

The AAP has come to power in Delhi. And 75% of Indians would like a Chief Minister like Arvind Kejriwal in their state. 43% are interested in their anti-corruption campaign and only one per cent believe in the "decentralization" ideas. These go back to Swaraj, advocated by Mahatma Gandhi, calling on a stateless society. Mr. Gandhi believed that a representative democracy would be unjust.

Israel Two-State solution

The son of the West Bank Palestinian President, Tareq Abbas, says that a two-state solution is impossible. 65% of Palestinians over fifty support a two-state solution; 47% of those 18 to 34 support this. One of the issues is demographics. There will be more Palestinians than Jews in a single state. But the Jews are concerned about being outvoted, a problem is any constitution that specifies a simple majority vote to pass legislation. In my discussion of Arab/Israel peace talks,, I talk about using max of min to determine an agreement, whether it be a constitution for a single state or a peace agreement between two states. (Max of min, means for each proposal, determine which group gives it the minimum number of aye votes. The one whose minimum is the largest is the one that is effective.) In the Constitution Construction Kit, I discuss systems for multi-ethnic voting. . These prevent one ethnic group from dominating government decisions, regardless of whether that group may have more voters or residents than the other.

"Generations Divide on a Two-State Solution" Wednesday March 19th 2014, Page A6 and A7, New York Times Volume CLXII No 56445.

Sunday, April 28, 2013

Miscellaneous M (mostly referendum news)

United States Tax System Woes - A Good Summary

Dr. Stiglitz provided a good summary of the current issues in the United States tax system. low tax rates for top tax income earners increases "rent seeking," not investment. That is why I proposed that meaningful investment should be free of taxation, sortition jury approved investments one can put one's income before taxation. These could be exploring for natural resources, biomedical research or investment in the next big thing.

He argues that someone who "earns income from financial innovations " should pay the same taxation percentage as those who do "research to create real innovations that transform our economy and society." I would feel, and perhaps Americans in sortition juries, that the latter should pay less taxes.

Referendum news

(gathered from Google news)

Israeli/Palestinian Peace Agreement

Two cabinet officials say tht the Israeli people should vote on any proposed peace agreement. But Tipi Livni says that "'That is what the national elected us to do--to make courageous choices."

But a better idea is to have both the Palestinians and the Israeli's vote. And they should choose from a large selection of peace arrangements. The maximin proposal wins. (That is the proposal whose minimum percentage from both Palestinian citizens and Israeli Citizins is the highest.)

Princeton University

The Princeton student population voted on changing a penalty for an honors violation and required the Honors Committe to publish statics. http://www.dailyprincetonian.com/2013/04/26/33399/ The issue was a relatively technical issue ( was a student who wrote over the time limit on the exam treated with the same penalty as other violations) The penalty changed to probation to a "standard penalty" of one-year suspension. A 3/4 majority was required on the referendum. http://www.dailyprincetonian.com/2013/04/22/33277/

Taiwanese Nuclear Power Plant

The Tawanese legislature has multiple readings for proposed referendum. This referendum is about whether a fourth nuclear power plant construction should be stopped midstream.

But there is an interesting issue. The vote is to stop construction. In Taiwan, referndum needs a 50% turn out. Thus, by having a positive vote to stop construction, those who don't bother to show up are making it more likely that construction will proceed. That is, counted in favor of this nuclear power plant.

President Chen spoke at the Conference on Comparative Studies of Referendum that this requirement makes the referendum law a "'birdcage'" referendum process. He was elected with less votes than the peace referendum received. Yet the latter did not pass because of lack of turn out.

I like the statement by KMT caucus whip Lin Hung-chuh:

"'Now that we haven't been able to settle in the legislature the issue which has already confounded the country for more than 20 years, it's time for the public to make a decision'"

"Lin said the proposal was as neutral as it could be to make a referendum on the issue possible.

"'Whether you support the plant's continued construction or not, you should all vote in favor of the proposal'"

The Democratic Progressive Party (DPP) Legislator said the referendum process is "structurally flawed"

Also, the NIMBY issue is prevalent here. TSU Legislator Lin Shih-chia said the referendum should also be decided by those living within 50 kilometers of the nuclear power plant.

Taiwan passed its referendum law in 2003.

Croatia tourism development

Croatia's third referendum is a local one. Dubrovnik will vote on whether to allow a huge golf-focussed resort. Those in favor point to the additional jobs in the tourism industry. Those against it say that the development is inappropriate for the image of the town which has many historic streets and buildings. IN fact all of the areas previous referendum were on issues such as splitting from Yugoslavia or joining EU or NATO, what one would consider major sovereignty issues. This is the first 'everyday' referendum.

Iceland

I wrote about Iceland's referendum on whether to repay bail out of its banks.

Paul Krugman and Joseph Stiglitz liked the idea tht Iceland lets its banks fail and its currency dropped. But apparently many ordinary Icelanders are unhappy. They have seen some economic growth. The comparison is with Ireland which handled the bank bail out differently. It is not clear what approach was better.

Iceland also decided to write down any loan that is ten percent under water. Of course, people in such underwater homes don't want to pay their mortgages, as it will just get written down any way. The solution, of course, is to make mortgages a percentge of wages or income.

Sunday, April 7, 2013

Miscellaneous KL

Medicare reimbursement rates.

The Central Management Services office of the Federal government is supposed to set national rates for procedures and tests. Unfortunately, they have declined to do this for medical diagnostics used to "effectively customize treaatment" (molecular tests). These tests look at specific regions of DNA or protein sequences, typically in cancer cells. In some cases they do it by looking at each discrete step, but without looking at the value of the test. However, since the Central management services has not done what it should do, the "contractors" that cover each region of the country have the option of how much to pay each provider of diagnostic services. Some of them have not set rates and are not paying at all.

Of course, the other approach is to allocate a certain amount of money to molecular diagnostics or diagnostics in general. Each company then does the best job it can providing useful tests. They are reimbursed based upon how well their tests actually lead to better case. As judged by panels of sortition juries aided by the appropriate biomedical experts.

REferences

  1. http://www.forbes.com/sites/scottgottlieb/2013/03/27/medicare-has-stopped-paying-bills-for-medical-diagnostic-tests-patients-will-feel-the-effects/
  2. Jill Dombraukas, Ph.D. "What is Molecular Diagnostics?" ehow.com facts 5615341
  3. National Cancer Inststitute, Slide four, Molecular Diagnostics, http://www.cancer.gov/cancertopics/understandingcancer/moleculardiagnostics/page4

Medicare reimbursement

Medicare pays more for the same service when a doctor is an employee of the hospital than when they have their own practice. For example, it pays a hospital $400.00 for an echocardiogram as compared to $150.00 if the same thing is done by a private pysician. Predictably, physicians are selling their practices to hospitals and becoming employees.

"The High Price of Nickel-And-Diming Doctors, Bloomberg Business Week November 25 to December 2 2012, page 39 and 40.

Craft Brewers want a cut in excise taxA

They are lobbying to decrease the excise tax rate per gallon of bear and 116 members of a caucus introduced legislation to do just that. The badness tax I proposed in the first few weeks of this blog. would handle this problem and allow the taxpayers to give a discount to small brewers and other businesses that are truly investing in good things.

http://www.nytimes.com/2013/03/29/business/riding-wave-of-popularity-craft-brewers-ask-congress-for-a-tax-cut.html?pagewanted=all&_r=0

Referendum Voting Age

An Taiwan online survey showed that 90 percent favored lowering the referendum voting age from 20 to 18. Half of the respondents showed that the schools should discuss nuclear energy. However as the survey was conducted by the Taiwan Alliance for the Advancement of Youth Rights and Welfare--I wonder about the quality of the survey.

http://www.taipeitimes.com/News/taiwan/archives/2013/03/29/2003558278 Tapei Times, "Group Urges Lowering Referndum Voting Age" Hsieh Wen-hua and Jason Pan.

Participatory budgeting

Relates experiments with participatory budgeting in New York City to the United States.

"http://www.salon.com/2013/03/27/lets_decide_the_budget_ourselves_partner/Next New Deal" The Blog of the Roosevelt Institute.

The Cynic Kids

The new generation, those in College now, in response to the financial crisis and the problems after entering Iraq and Afghanistan:

"'don't like the system == however, they are wary of other alternatives as well as dismissive of their ability the desired modifications....Broadly speaking, Cynic Kids distrust the link between action and result.'

"the Occupy movement, 'launched more traffic jams than legislation'"

And the Arab Spring has not given the desired results.

Perhaps, noteworthy, that there is a desire for experimental and empirical evidence. We are unable to appraise multiple options, so we stick with the known evil. Perhaps, experiments with the online Constitution construction Kit and other techniques can give some empirical evidence that participatory democracy could work.

the New York Times

Paulson, an example of the Hedge function going crazy

John Paulson's Very Bad Year by Sheelah Kolhatkar,

John Paulson, no relation to Hank Paulson, former Secretary of the Treasury, earned four billion dollars as a hedge fund operator. Howe ha made his money:

  1. merger arbitrage, after a merger is announced, short the acquirer, buy the target company's share and pocket the difference whent he merger goes through. However, there is a big risk of large losses if the merger falls apart (e. g. because of regulatory snafu).
  2. But his real venture was, in 203 to 2007. Before the housing bust, shorting housing. He did this with the famous "credit default swaps" betting that the mortgage bunds would go bust.
  3. Buying debt of financial companies in 2008, in other words betting on the bailout.
  4. Goldman Sach marked a collaterized debt obligsgtion called Abacus. Mr. Paulson put these together as designed to decline and that he would make a profit if they did. Goldman Sach did not tell the purchasers of the bond fund that was what Paulson was doing.
But Paulson made some big plays in 2011 that screwed up:
  1. A Chinese forest company product stock where the company was accused of fraud
  2. buying bank stocks
  3. buying high-yield and distreswed bonds
  4. a gold mining stock called AngloGold Ashanti
Although Paulson's hedge fund lost 13.2 billion dollars, however, over its life time, gain was the third highest in history. And Mr. Paulson's net worth declined from sixteen billion to twelve billion.

To Be Blogged Later

Sebasian Mallaby More Money than God: Hedge Funds and the Making of a new Elite

Sunday, March 3, 2013

Miscellaneous K

Hospitals and the $963 million question

One percent of Medicare funding (almost a billion dollars) will be based upon a quality index. These include benchmarks such as giving aspirin within twenty four hours to heart attack victims as well as patient satisfaction scores. As often is the case, there is question as to whether this is fair to hospitals treating sicker and poorer patients. (The alternatives are to develop statistical adjustments based upon patient population, or to simply allow a participatory sortition judgment to take this into account.)

An experiment where some hospitals were given bonusses showed no difference with hospitals that were not part of the bonus structure. If there is no change in performance, hospitals will get back of the most payment. There is thus too little downside to incentivize change. Bloomberg Business Week page 35 and 36, September 17 to Sept 23 2012.

White House Petition Site

A federal government web site allows one to post and sign petitions. Here are some of them:
subjectnumber of signatures
The US should go to the metric system37089
disclose information that the government has been keeping secret about exraterrestrial visits1947
FDA should not regulate electronic cigarettes18503
Legalize online poker9816
recount 2012 president election--alleges 'blatantly obvious' fraud69610
recognize American sign languages32,457
Although, obviously, some of these are ridiculous and the subject of derision by the media. Yet Obama responds to many of them including the petition to deport Piers Morgan, a "CNN talk-show host who supports gun control." Obama's team polled the people signing the Piers Morgan petition. Over half says the Obama answer was helpful and one in four say "they learned something new."

Obama organized a conference call between those who petitioned for immigration reform and the people establishing policy.

With 25000 signatures, the White House used to guarantee a response--now it is 100,000 for a guaranteed response..

Sign Here -- Please", page 34, by Michael Scherrer> Time Volume 181 Number Five, 2013

Porto Allegre - participatory democracy

Each neighborhood has a full town democracy, but they send delgates to a city wide assembly. However, there have benn dramatic improvements:
  1. sewer access is now 95% , up from 46%
  2. tax evasion fell--presumably because people felt the money was spent wisely.
  3. The poorest 12 percent are a third of participants in the assembly
  4. One in ten citizen have taken part in at least one of the assemblies.
http://www.guardian.co.uk/world/2012/sep/10/participatory-democracy-in-porto-alegre

Participatory budgeting in Venezuela and in United states Cities

Although this paper emphasizes the progress Venezuela has made in human development--and I suspect many people would disagree with this piece--but that is beyond the scope of this blog. It does talk about 20,000 "community councils" of 200 to 400 families. Some councils have joined to work on larger poblems. Also article talks about Port Allegre participatory democracy, which I do above, and references Mike Fox's democracy "Beyond Elections: Redefining Democracy in the Americas"

And one ward has particpatory democracy spend its alderman's capital budget of 1.3 million dollars with three other alderpersons following. Participatory democracies tend to have more smaller projects than the conventional budgets.

New York City now has eight council persons doing the same thing. Also, see an article in Epoch Times that said that 42 council members still are not using it. Participants identify and debate infrastructure projects at neighborhood assemblies. Then "budget delegates" do the mechanics to get precise costed out proposals. These are voted on by the community--to determine which get funded. People in the area, whether as an employee, resident or business owner can become budget delgates but only residents get to vote in the final decision. Note that this process only does a small sliver of the 9.5 billion that the city spends each year on capital improvents--and the city expense budget is not involved at all.

I had a thoughtful Thursday on Participatory budgeting in May 2010.

http://www.truth-out.org/news/item/14649-the-secret-rise-of-21st-century-democracy

Referendum on pay rates

Switzerland referendum just passed-- share holders have binding say on executive pay. Also bans "golden hellos" and "golden good bye" (golden parachutes). There is controversy whether this will discourage companies from coming to Switzerland, or even if it will attract new investment.

http://www.ft.com/cms/s/0/ca90f1b4-83ff-11e2-b700-00144feabdc0.html#axzz2MVXNQ1Zm
http://online.wsj.com/article/SB10001424127887324678604578338171658493636.html

Wednesday, February 20, 2013

California in 2010 allows parents to vote 51 percent to take over a school. Apparently, it can be done by petition. In Desert Trails School District, there has been concern that the petitioner organizers told parents that it was simply a "petition to get new computers and clean bathrooms" rather than starting a take over. They claim that the oppositon blocked parents from exiting if they did not sign the "counterpetition." Hollywood made a movie where the parents succeeded. The article questions whether parents have the ability to run a school, whether the process will be coopted by the wealthy, an issue with referenda (see Wikipedia article on Initatives and eEferendums in the United states).

"Parent Coup", by Caroline Winter, page 80 to 84. Bloomberg Business Week, September 17 to September 23 2012

Tuesday, February 7, 2012

miscellaneous (H)

Immigration Discretion



Earlier,

I wrote about the need for discretion in immigration matters, in marriage, and immigration.
Democracy Now, August 10 2011, talked briefly about a gay marriage where one member, the undocumented immigrant, is caring for his partner with AIDS. Regardless of one's feelings
about same-sex marriage, is there grounds for compassionate
discretion, when one person is caring for a United States citizen with critical health issues.

Is this best administered by a government, even the personal intervention
of the President, or participatory democracy?

The Federal Reserve

The Federal Reserve made a 15 billion dollar loan to Goldman Sacchs
and it had a peak balance of 34.5 billion. Credit Suisse had
a 45 billion balance. Fortunately, these loans were all paid back.

Bloomberg Business Week, July 11 to July to 2011

Irrational Verbal Exuberance

Stock analysts were more often give "buy" signal when the CEO used
charismatic vision language.

Business Week, Page 017.August 3 2009.

Green

Carbon credit mechanism allow offsets. By preserving trees in the Amazon,
one avoids putting carbon dioxide in the atmosphere. Should those producing
carbon dioxide be allowed to purchase such credits. But the problem is avoiding paying people for not chopping down trees that they would not have chopped
down any way. Deforestation now produces 18% of the global greenhouse
emissions, the same as all the world transport. But Brazil is doing less chopping down of trees now than it did before. (I recall reading many decades ago in a book on the global plenty, that the United States cut down one third of its forests. However, recently, there has been a net increase in forests
in the United States. Thus countries will naturally clear a lot and then
as the forest lands becomes more valuable as there are less of them.)


If money is paid to one group in a country, to preserve some acres, won't
the people who want to exploit simply move to another part of the same forest.
China paid people to stop using HFC-23, a greenhouse gas. But somepeople
received "windfall profits" and they had to create a "windfall profit" tax
to reverse the bonus.

The Economist September 26th 2009, page 94 to 95, Volume 392, Number 8650

Romney

About Romney's successes (Staples) versus jobs lost in other Romney
businesses. "IN sum, the form of capitalism that Romney practices helped revive the U.S. corporate sector in the 1980s and made it more efficient in the short term but left it less likely to produce new products
and technologies--with the excepton of Wall Street, where phenomental salaries lured the smartest young Americans to create fabulous new computerized gambling devices with,
as former Fed chairman Paul Volcker has noted, no redeeming social value."
These strong words came from Time December 12th 2011, article
"Where is the Love?" by Joe Klein, Volume 178 Number 23.

Similarity to the United States Constitution

Several law professors found that Countries adopting new Constitutions
were less likely to makethem like that of the United States.
Ruth Bader Ginsberg recommended the South African, Canadian Charter
of Rights and Freedom and the European Convention on Human Rights
as recommendations.  And the United States Constitution is the most difficult to amend.
The average lifetime for a constitution is nineteen years--Thomas
Jefferson recommended that a Constitution should expire tat
the end of nineteen years.  The U. S. A. Constitution protects
  1. speedy public trial, not widely recognized
  2. and is an "outlier" in prohibiting governemnt establishnment
    of religion
  3. the right to bear arms--only Guatemala and Mexico also do so.
And other Constitutions do protect:
  1. right to travel
  2. presumíption of innocence--specifically stated
  3. entitlements such as to food, education or health care.
Also foreign judges are less likely to cite decisions of the United States Supreme Court.
New York Times, page A1 , February 7 2012

Tuesday, August 2, 2011

Miscellaneous (G)

European Bank Stress Tests

I have proposed the alternative of share economy to our present banking
and debt system.
And Ann Pettifor showed how the finance system
is a parasite creating money in a leverage.
And Nassim Taleb, of "Black Swan" fame, decries debt.

The Europeans, and similarly the United States of America Government,
is having "stress tests" of the banks.
After the financial crisis, many governments go through this exercise to
prove that their financial system is sound.
Unfortunately the Europeans use rather bland assumptions for
these allegedly
worst case scenarios:


  1. What if the United States Dollar falls eleven percent

  2. What if theEuropean unemployment goes up a mere 0.5 per cent to 10.5 percent.

  3. if stocks drop 15 percent

  4. gdp goes down a mere 0.4 percent
and specifically they don't consider that even a single European country might default on its debts.

And banks include assumptions over how much revenue their "trading desks" would generate.

Source: Page C1 and C2, Wall Street Journal July 14th 2011, "Late Stress Over Tests". Volume CCLVIII Number Eleven

Arab Unemployment

I pointed out in June 12th's Miscellaneous category the unemployment among educated Arabs. The IEEE Spectrum pointed out this issue. Sixty percent of college graduates do not find jobs in their fields. Engineers still face bleek prospectsd, but fortunately Egyptian Engineers are doing better, particularly electrical engineers. ("What Young Engineers Want Out of the Revolutions" Prachi Patel, June 2011, Pages 11 and 12, Volume 48, Number Six)

The Bond Market

"James Carville, Bill Clinton's political adviser, once said he wanted to be reincarnated as the bond market so that he could 'intimidate everybody.'"

Global Markets: A Wild Ride, The Economist January 26th 2008, page 70, Volume 386 Number 8564

We are now so accustomed to governments running up billions of dollars in deficits every year that we take it as normal, even to people outside the country. "But it is insane to think that a country can run up such debts for years and not have it affect their fiscal autonomy." (Will Kymlicka, "Citienship in an era of Globalizstion: commentary on Held" Page 112 to 126, Democracy's Edges, edited by Ian Shaipro & Casiano Hacker-Cordon Cambridge University Press 1999.

Dr. Kymlicka went on to say that when Canada, which he discusses in the article, will soon be running a surplus and this will test whether it has more power.

But a share economy would deal with this appropriately--one would sell the bonds not at an interest rate but as a share of the income or tax revenue or imports or exports of the country. (I would argue that a country would be better to make it a share of imports so as toimprove its international competitiveness.)

And to be explicit, a bond holder gets a vote proportional to the amount of their share. So if two percent of the country's GDP is contracted away in lieu of interest. Then, the Currently the United States Public debt interest cost is 1.6 percent of GNP of 212 billion per year.

I propose to replace that by a share of the GDP instead of bonds. But the new debt would also include a vote--thus bond holders would together have voting power equivalent to 2% of the population.

In a share economy, the interests of the bondholders would be pretty much aligned with that of the citizens, although perhaps with a some difference in time preferences, but neither would really want to sacrifice long-term growth for a larger payment now.

In the United States, we talk about not saddling our unborn children or children with these debts. Make our bonds payable at a certain percentage of the income of all people who were of voting edge at the time the debt was contracted. The debt gets retired naturally as these individuals die off.

More on the Financial Crisis

Michael Hudson on Democracy Now stated that at the time of the financial crisis and bail out:


  1. There was enough money in the banks to pay the ordinary depositors. That is
    the FDIC could liquidate the banks and pay the individuals. What there
    was not money to pay is the "gambles" in derivatives and trading and exotic
    financial instruments where the losing counterparty was broke.

  2. Money is created on a keyboard, the FED did it, and the banks do it.
    This echoes my review of Ann Pettifor's book

patents and patent trolls

On the pay everyone what they earned theory, I suggested that each individual and business pay a tax for intellectual property. They can then allocate this to the intellectual property they consider worthwhile, whether it be a drug, the result of scientific research, music, tv/memovies and services and content agregators like google npr or MSNBC, or the reporters who actually get the news. We would select a median amount to pay by a median process. Each person can then distribute their share to whichever intellectual providers THEY feel made the most contributions, whether it be Einstein, a researcher finding a great medicine, the latest Startrek movie, or google that provides a wonderful search engine.

When we have intellectual property or a public good as private property, one has problems. The most severe is determining who has worthy intellectual property. The worst of this is patent trolls, people who get me-too patents on obvious things. One example of the disfunctional system: someone in 2000 got a patent on toast. And the featured patent Chris Crawford for setting up internet backup or software refreshening softwares. There is a patent suit about the mouse bringing up a popup when it hovers over something. 30% of all U. S. patents are for things that were already known. And eighty percent of software engineers said that the patent system hinders innovation.

Intellectual Ventures, described as a largest patent troll, brought in two billion dollars. Nortels old patent collection sold for 4.5 billion dollars.

Unfortunately, it is difficult to define "Patent Trolls." using conventional statutes. "Under some definitions, the legendary independent inventor toiling in his garage could be a troll. Under other defnitions, well-known productive companies could sometimes be deemed to be polls, if they sue over a patent which covers a product the company does not currently sell." (Mechanical Engioneering, page 35 to 36, August 2011 Volume 133 Number Eight

The patent statute punishes companies who mark their item with a patent number, but the patent has expired or has been judged invalid. If a company marks their object with a patent number, then all companies are non notice about the patent. Otherwise, the company has to send a "cease and desist letter" to the infringer.

This kind of problem happens when a manufacturer still has usable molds, except that they have a patent number on them which is no longer appropriate. Do they make a new mold, or save money on molds but risk a lawsuit under the rule that one cannot put a misleading patent number on one's products.

All these things can be handled by sortiton juries.

ExpertLens

An online method that can use both experts and individuals to determine difficult policy questions. It uses some crowdsourcing and feedback between the group's answers and seeing if people changed. This is a type of deliberative polling. (Source, Mechanical Engineering August 2011, Page 21-22. Volume 133 Number Eight.

Weird Results

Undergraduates were asked to rate five personality traits of Chief Executives of Fortune 1000 firms solely on the basis of their photograph. And found that these were correlated with the firm's profits. By the way, another set of researchers tried to look at actual chief executive personality. They found no correlation between that and how well the company did. (Perhaps more profitable firms are able to get chief executives that look competent, dominant and who have "facial maturity," i. e., not "baby-faced.")

"Face Value" The Economist Page 78, January 26th 2008, Volume 386, Number 8564.

Safety First

The proposed design for a product included a particular safety features. Marketing wanted it removed to save money. The three engineers involved inthe design and a recognize testing laboratory stated that the safety device should be included (but no standard mandated the requirement). Marketing prevailed, but Eventually all the items had to be recalled because of the fire risk. It was of course much more expensive to do the recall than to have done it right the same time.

"Serving Two Masters" Brian porter, Mechanical Engineering August 2011, Volume 133 Number Eight

Predictions

Freakonomics Radio just had a good show on Predictions. Tetlock did a twenty year study of political experts predicting political events. Most did somewhat better than chance, but no better than regression. The predictors who were dogmatic were not effective. And the predictors who might make the big prediction, say the person in 2006 or 2007 who predicted the financial meltdown, did worse on average than others.

Michael Hudson on Democracy Now pointed out tht the bond rating agencies do not want to be liable to their "opinions." Thus, those who bought AAA-rated mortgage banked securities that turned out to be "junk" could not sue the rating agency that gave it an AAA-rating Dodd-Frank made the rating agencies liable. Michael Hudson proferred that the rating agencies are threatening to downgrade the United States debt if they don't repeal these provisions of Dodd-Frank.

The Freakanomics radio programs began with a new Romanian law that made "witches" liable for their bad opinions with criminal fines and jail sentences. But Romanian politicians were not liable for their bad predictions. We need to track each predictor's predictions over a lifetime. Right now, predictors have an incentive to make wild predictions because they can trumpet that "they predicted the big one." There is nobody to day that 90% of that experts predictions were wrong. In my clawback tax and the "pay when we really know" proposals, we should only
pay people much later than the predictions and hopefully their lifetime
record will determine people's rewards.

Friday, July 15, 2011

Miscellaneous

Referendum News



This November, San Francisco will have
a referendum
might be unconstitutional as Jews and Moslems practice circumcision for
religious reasons. It also would be ineffective, as people could easily
have the procedure down outside San Francisco limits.
It is sad that
referendums, a wonderful tool, are used for such silliness when Californians
have very pressing problems.

On the subject of silliness in California Referendums, Amazon is using the
referendum process so it does not have to collect sales tax, even though
it "has a physical presence in the state."

Unfortunately, it will probably end in court--apparently in.
California, budget related
laws and "laws that take effect immediately" can't be referendum-vetoed

And one borough is dealing with anti-budget referendum by a clause in its. And there is a move to discourage voting.
bylaws that says fifteen percent of the voters must vote in a referendum--otherwise the referendum is null and void

And Maryland is going to have a referendum on whether undocumented immigrants.
will be eligible for in-state tuition in the Universities

New Zealand will vote on which parliamentary voting system it will use:


  1. Currently they use mixed-member proportional with 70 chosen from districts
    and fifty thorugh party lists

  2. single transferable vote with some districts electing more than one member
    of parliament

  3. a conventinal system like what the United States does, where each district
    elects one represenative.

  4. A variation of this with single transferable

  5. and a variation on MMP, but where they don't try to adjust the party list members
    to ensure tghat the percentage of each party in parliament matches the total
    voting.
I discussed many of these voting options in my last Thoughtful Thursday posting.

Apparently, the voters will choose on two questions and then there will (I would be in favor of using approval.)
be another referendum in 2014.
voting here between the systems

Anti-nuclear referndum are popular world wide. Poland is planning one on shelving
building their own that were planning.

Italy voted against nuclear energy. Voters also rejected immunity for government officials, so they could
concentrate on their official duties. This is a referendum on Berlusconi who
would have to attend four separate trials.

Health Care

The new health care law allows businesses to pay two thousand dollars
instead of insuring its workers. At that point the workers move into
subsidized "exchanges." There is debate about how many businesses will But Freakonomics reports that when a day care center
take that option. And small businesses less than fifty employees pay nothing
if they choose not to pay their employee's health insurance.
moved from no fine for coming late to pick up your child to a three-dollar
fine, more parents were tardy to collect their kids. Sometimes, people
will take a minor penalty when given that option. With no penalty, moral
pressure will get them to do the "right thing" whether that be picking
up their kid on time or health insuring their workers.
In any event, my suggestion is to apply a sales tax based upon.
the business's provision of health insurance, among other factors.

Businesses would compete to be good businesses, and that includes

taking care of their workers.

elatedly, the June 28th issue of the New York Times (Andrew Pollack, page one)
reported on drugs that
extend the lives of a small percentage of prostate cancer sufferers, those
who are unfortunate enough to have the cancer goe beyond the prostrate and
for which hormone therapy has not worked. This is the question of whether
a few billion dollars is worth what appears to be a modest extension of survival.

And the Wall Street Journal just reported on several drugs that
are truly innovative as opposed to a me-too product. They include a new
drug for advanced melanoma, the first drug for lupus in over fifty years,
and improvements in hepatitis C care.

Of course, I propose that we have a fixed amount of money for drug innovations.

The drug companies would innovate to achieve the best improvements and try
to find drugs that work where no drug has worked before, as contrasted with
me-oo drugs.

Then, the money would be given to the teams and companies achieving the best
outcome, compared to current care.

Admittedly, the insurance companies are achieving this outcome already, by simply
demanding that their patients use generic drugs when such are available and
the new pharmaceutical, under patent protection, dosn't do much better.

Good Statistics, in 2006, pharmaceutical firms spent 45.8 billion on research,
17 percent of their revenue.
("Drug Makers Refill Prched Pipelines", by Jonathan D. Rockoff and Ron Winslow,
July 11 2011 BVol CCLVIII No 8, Wall Street Journal, pages A1, A12)

Another pork barrel project

Representative John L. Mica, who happens to be chairman of the House
Transportation and Infrastructure Committee, has pushed through a 61 mile
ommuter ail prject. The federal government ranks it as one of the least
cost-effective, only projected to serve 2100 people per day. Althougn in

Central Florida, it does not serve the Orlando Airport or Disney world attraction. The Federal government will pay CSX $432 million
for the use of its tracks. CSX and other contractors have contributed to
r. Mica's campaign.

All government projects should go before a sortition jury for approval.
New York TimesJune 28th, pages A1 and A3, "A Congressman's Pet Project;
a Railroad's Boon" by Eric Lipton.

Thursday, June 23, 2011

Thoughtful Thursday, Construction Construction Kit Two and the ACE

Protecting minority rights can be written into a Constitution. There are two cases. The easiest case, the approve case, is when the people have a plebiscite to say something is OK with them. It is a take-it-or-leave-it-proposition. The usual case is ratifying a Constitution, or voting Yes, is OK to cede sovereignty in some matter like joining the European Union, or a giving major rights to develop the country's mineral or oil resources or building a free city. The more complicated case is choosing among several alternatives. This has been studied extensively when there are n people running for a single office, e.g. President . This means that the the plebiscite has more alternatives. Allow the people to choose one of many proposed constitutions.
I discussed this briefly in the case of finalizing a peace treaty between two peoples. I explained that Israeli demos and the Palestinian Demos together would find the best peace deal for themselves without relying on their leaders to negotiate one. Simply seeing which peace deal got the most votes
total won't work. One must find one that gets the best possible approval from both
sides.

And there could have been several health care bills presented to the people.
In such a multi-candidate election, there are many techniques of converting the votes into a "Who Won?" or a ranking among candidates--approval voting, range voting, Single-Transferrable voting, Kemeny and Dodgson Scores. But these all keep all voters alike. Assume in Ethnic Group A is 55% of the population; ethnic group B is the rest. If 98% of a want to do something B really don't like such as outlawing their religion. In a simple majority or any sophisticated multi-candidated election, a could get their way. And if 60% of the A's want to do something and only 40% of B want to do it, then it will be done. But how could we design a Constitution to ensure that issues get support among both (or all) ethnic groups. Or how could we design a Constitution to encourage the legislators to prepare bills that also get support from a wide variety of individuals?

We could simply require that no bill passes unless x percentage in y percent of the ethnic groups approve the act. Thus, in our simple example above, we could require that any bill that passes earns at least 40% of the votes of each ethnic group as well as the traditional 50% of the entire population.
And the Constitution could make a broad rule of the above sort, to pass a plebiscite, in addition to getting 50% of all votes cast, it must get at least 30% of the voters in seven out of the ten designated ethnic groups.
What about a multicandidate election or a referendum with seven choices of what bill to pass. The first is simply to do whatever we were going to with the multicandidate election, but add that whatever came out of it must also pass an approve. If the winner by Dodgson score, Approval Voting or whatever method the Constitution selects, did not meet the approve criteria, where to go the next one in the ranking. See if that meets the approve criteria, otherwise, go on to the third one in the ranking. Etc.
The other option is more gentle, it adjusts or subtracts from each voting total by a deviation factor. A bill that gets the same percentage support from each ethnic group has no adjustment factor downward. A bill that gets all its support from a single ethnic group, even a majority, would have the highest adjustment factor downward.
The constitution specifies the adjustment factor.
We describe this in terms of Wally Smith's COAF system. Recall that this means that each voter gives a number for each candidate. The most general is range voting, where each candidate gives any number from one to ten, let's say. The least general, and arguably the most problematic, is the basic plurality system. Each voter gets to vote once for only one candidate. The winner is the one with the most votes.
Assume our votes came as follows in a three way election. X,Y and Z might represent candidates for the president. Or they may be one of three alternatives in a referendum.

Ethnic GroupXYZPercentage
A32115
B36115
C15182570
COAF SUM22627
(The percentage of the population of the ethnic group is not used in the calculation, it simply explains why the vote totals are so much higher for ethnic group C.)
The next step in calculating the ethnic group by candidate is easily done. We simply find what percentage of each ethnic group voted for each canddiate. We then average these
Ethnic GroupXYZPercentage
a50.00%33.33%16.67%
b30.00%60.00%10.00%
c25.86%31.03%43.10%
Average35.29%41.46%23.26%
The next step is computing the deviation from the average for that candidate for each of the boxes. This gives us the the three data rows in the table below.
Ethnic GroupXYZ
A14.71%-8.12%-6.59%
B-5.29%18.54%-13.26%
C-9.43%-10.42%19.85%
Squares216.566.043.4
Then, we sum the squares of those deviations, This a classic case of "sum of squares" or "norm two." Assume the constitution specifies an adjustment factor of 0.02. The new scores for the choices X, Y and Z. This gives us
XYz
Adjusted Score14.315.614.7
Y won!. Thus, observe that even though Z won the popular election with 27 to 26 votes, that candidate was somewhat more skewed than y, turning the election over to Y after the adjustment factor.

nth smallest voting

There is another technique, nth smallest voting. The Constiution specifies a number nth smallest percentage is the winner. I suggested this in my first Thoughtful Thursday on the Constitution Construction Kit.
Assume, that there are seven provinces, which I call a, b, c, d, e, f and g. And assume there are three choices or candidates: X, Y and Z. And assume the Constituiton specified n = 3, or the third smallest vote,by province, determines the winning candidate. The table below states in the election of how many voted for each choice. (We allow each voter to vote for more than one alternative, like in approval voting, so the percentages don't add up to 100 per cent.)
The third smallest in each column is marked with a -.
XYz
a384743
b124242
c1332 -40
d35 -2734
e603537 -
f202832
g505050
Thus, the winner would be Z as its 37 for the third smallest is higher than that for other two candidates (35 and 32, respectively).

Electoral systems

The ACE Electoral District discusses many country's experiences and many statistics on how the countries choose the systems. It is a goldmine of information and analysis and suggestions for those making the decisions about constructing a Constitution. I see the fundamental division between proportional systems and geographic districts. The United States uses the latter. Each House Representative is elected from a contiguous, if not compact, district. And each voter gets to choose only one representative.
114 have districts and 35% use PR-type systems.
And twenty-two countries have some representatives being elected from districts and other representatives being elected at large or via proportional representation. A nice twist is to deal with the "wasted vote" problem. The proportional votes are distributed so as ensure that the percentage for each party matches the percentage they got fromt he whole country. E. G. Assume, there are 150 seats in parliament and 100 districts. And assume there are two parties: A and B. The top winner in each district gets elected, just like the United States. However, assume that because of the way each district votes, only 55 members of party A get elected from  the districts, and 45 of the districts B. This parallel system would then take the top 35 from the A list and 15 from the Party B-provided list. This means that the parliament would have ninety members from party A and 60 from party B--this gives the proportionality of the list system but allows each person to have a represenative for their geographical district.
And there is a really neat variation of the proportional system. The voters can rearrange the list from the parties, or just vote for a particular party.
And countries can and do use the many techniques of dealing with multiple candidate elections. Thus, if there are three people running in a district, they can simply have the one with the most votes wins, have a run off between the ones with the top two vote counts, or use one of the Hare-techniques.
And the Hare techniques can be extended to multi-member elections. Assume there are three members in a district. Those candidates getting 33% or more are chosen. Then, the bottom most candidate's second choice gets added to the total for each candidate. We then see if any of the remaining candidates got 33% votes. If not, the second choice of the second-lowest vote getter gets added to the totals. This process can continue until all the members are selected.

Minority Protection

The Ace Electoral System points out that several countries designate certain seats for specific ethnic groups including Jordan, India, Pakistan. (Also Iran reserves seats for specific groups including Zorastrians, Jews, Assyrian Christians and Armenian Christians. And of course several countries simply overrepresent certain regions in the legislature. This, of course, is done to favor ethnic groups tending to live in the area. And many nations have special arrangements for women.

Sunday, June 12, 2011

Referendum News

British Columbia is referendum voting on a different way of consumption, a "Harmonized Sales Tax) versus
the older provincial sales tax. Of course, this is a take-it or leave-it proposition.
Why can't the people vote for the tax rate (median) and choose which items are to be subject to the tax and at which rate.

The Seattle citizens are deciding part of the major tunnel
project. Sadly, it give the people an opportunity to simply not build the tunnel. They only vote on part of the document or agreement authorizing the project.

Miscellaneous

Obviously, I dropped the ball on this blog. I anticipate preparing
five or six more "Thoughtful Thursdays" over the next year. And sending out
more of these miscellaneous postings.
I have been focusing my
writing energies this semester on the complete Requirements Document for the
Constitutional Construction Kit
The next Thoughtful Thursday is from that effort.

Hack for Egypt

The Hack For Egypt , as part of Cloud Camp 2011, has proposed
a "crowdsourcing" project for the new Egyptian Constitution.
They are looking in the future at a crowdsourcing for the Bill of Rights in
that Constitution.
This is a much less ambitious proposal than the one I am working on. one needs
a simulation component where the Egyptians.
The Egyptian unemployment
is concentrated among the young
, as it is in
many other countries including the Arab world.
And 50 percent of educated of
men
and ninety percent of young female
college graduates are unemployed.

So there is a resource of time to work on the Constitution.

Climate Change

I talked about using sortition-based consumption taxes to address
climate change. The Wall Street Journal
had a special issue on Energy and the first article, which frankly
is an editorial, on Climate Change. They say that emissions cuts,
raising energy costs with taxes, cuts economic
activity. Countries do not want
to do this. By putting the tax at the consumption side, this attacks
imports, and tends to get people to consume in ways
that are not energy-intensive.
They may not buy a computer-they may use an internet cafe.
Imports get taxed based on the embodied energy.
They may buy a smaller and more energy efficient house, use public transportation instead of a car.
The article suggest that governments should push for innovations that produce
less costly energy.
Wall Street Journal, November 29th 2010, Page R1

United States Health Insurance Mandate

As I assume all readers of this blog know, the United States has
mandated that all people purchase health insurance. However, there
is some question whether that is constitutional. The famous "necessary
and proper" clause of the United States Constitution gives the
United States Congress the power to make laws "necessary and proper" to
exercising its enumerated powers.
Does mandating that everyone buy health insurance fall within the
"necessary and proper" clause? One District Court has said no!
And it appears that a Florida judge will rule the same way.
However two lower courts said yes, they did.
I made a proposal that would resolve this. Make individuals tax rate
dependent upon their financial responsibility. We already have deductions
for contributing to IRA and for some education items. Individuals who are
purchasing disability insurance, health insurance, education should pay
lower taxes than those who are not.
There are people who cannot be expected
to have money for
health insurance, the single mom putting
herself through Nursing School
. However, those who have money
for a flat panel TV or internet, should spend or invest
it some other way such as health insurance.
The New England Journal of Medicine article,
"Can Congress Make you Buy Broccoli?
and Why
That's a Hard Question" by Wendy K. Mariner J.D. M.P.H.,
George J. Annas, J.D. M. P. H. and Leonard H. Glantz J.D.
said that Congress had two goals in passing the health reform
it did:

  1. provide a way for all Americans to gain health care

  2. preserve the private, commercial health industry
Obviously, it is not reasonable to require the health insurance companies to insure anyone regardless of sick they are and let people wait until they are in the proverbial ambulance to buy health insurance.
When a person wants insurance and has a "preexisting condition," we need to distinguish between those who simply waited until they got sick and those that had good reasons for not purchasing health insurance. A bureaucracy cannot. A sortition jury can.
Judge Vinson asked "If the government decides that everyone needs to eat broccoli, can Congress require everyone to buy Brocolli." If Congress chose to expand Medicare or Medicaid to cover everyone, they could have. Congress could then raise everyone's taxes to do so.
I believe at tax time, everyone should compete to show how responsible they are, buying and eating their broccolli, and saving, whether for retirement or their health needs.

Bronte Capital Management Blog

I met Mr. Hammond on the plane to New York City, and then by luck as I walking near 42nd Street in Manhattan. The first article I turned to, was the one on the Australian financial system. There is concern about one of the strategic funds in Australia. More importantly, he discusses the risks with privatized social security of fraud.
There are many other articles there, often very insightfully showing the numbers in investments and securities, from Chinese bus adverts and alcohol sales to Australian Real Estate near the iron ore mining boon.

Benefits Schemes

A gentleman who won two million dollars from the lottery is still collecting food stamps. The food stamp program uses income and lottery winnings is not considered income. State of Michigan is talking about getting a special waiver from the Federal government. (Ron French, Detroit News)
This is why all benefit recipients should go before a sortition jury to eliminate those who don't deserve them, even though they may qualify under the rules.

State Income Taxes

Wall Street Journal, Volume CCLVII Number 70, Page C1 and C2, March 26th to 27th, "The Price of Taxing the Rich" Robert Frank
Million dollar a year incomes pay 45 percent of California's Income Tax receipts. Similarly percentages for Connecticut and New Jersey. The problem with this is that these individuals incomes are erratic. Of course, when the market is up, these people "take their profits." And they have to pay their taxes on the capital gains, and tax revenue goes up. (We saw that when the federal government was briefly in surplus around the turn of this century. But some of this was due to "hundreds of millions in unanticipated tax revenues from taxes on capital gains.") In one year, the top one percent of the taxpayer's income dropped sixteen percent. In 2006, California anticipated a six billion change, either direction, from year to year on a regular basis. In the dot com bust, revenue from capital gains changed from seventeen billion to five billion.
Of course, states can protect themselves with "rainy day" funds. But state governments, like people in general, do not have the discipline to do this.
This blog has long called for salaries and other expenses to be a share of their revenue. Thus States would make goverment salaries and pensions a percentage of revenue. (Note that under the full share economy, government workers and retirees would set their mortgage, rent, etc. as a percentage of this amount. Thus, if this varied fifteen percent a year, they would not be between this decrease and an expense that does not change. Their discretionary income for day-to-day purchases would go up or down by the same percentage as the state's revenues.) And their "borrowing" would be the same way. Thus, rather than selling a three percent bond due in thirty years, they would sell a perpetual bond that paid out nnn percent of the revenue. I earlier called for a "clawback" tax to deal with, among other things, those earning high pensions.
A consumption-based sortition "badness tax" could have firms competing to avoid the taxes necessary to fund the state government.
And with individuals having a share of the income of the companies in which
they invest, there would be less variability of income. Individuals
earn money as the company does, not by selling the shares.

Sunday, May 8, 2011

Referendum on how to elect United Kingdom House of Commons

The United Kingdom had the referendum on "alternative vote" system for its House of Commons (parliamentary) elections. They voted resoundingly no. If passed, there would be multi-member districts, with alternative voting, or ranked ballot, to choose who would represent each district. The referendum vote was part of the agreement to form a coalition between the Conservatives and Liberal Democrats.

There was discussion of having a threshold that fourty percent turn out would be needed to pass the referendum.

The Green Party of England Wales is in favor of a proportional vote. They believed that the alternative vote system in the referendum would be a step in the right direction. And this illustrates that we should have several possibilities in a referendum. In this case that would include the Alternative Vote proposed, Proportional Voting, and the Status Quo.

"At a March 2011 Voting Power in Practice annual workshop, held at the London School of Economics (LSE), 22 voting theory specialists voted to select the "best voting procedure" to elect a candidate from a selection of three or more. First past the post received no votes, compared to 10 for AV, although another system, Approval Voting (not on offer in this referendum), received 15 votes.[106]

By the way the Yes campaign outspent the No campaign three to two.

Sunday, April 10, 2011

Iceland Referendum rejects bailout repayment

Iceland rejected a second time a bailout in a referendum. I mentioned in this blog that Iceland had a referendum to repay bail out, and in fact rejected a previous offer, but that was part of the negotiation process. The Icelandic spoke twice no.

Thursday, December 30, 2010

Leadership Part Five, Thoughtful Thursday

Winston Churchill, First and Second Volume of the Five Volume Set on World War I

As England was mobilizing for World War I in the first part of the 1910's, Mr. Churchill as in charge of the Admiralty. And he made to decisions regarding the new warships being built. Should we build with fifteen inch round guns? Or stick with the 13.5 inch gun which were a tried and true commodity? Every time one increases the caliber of a naval gun, it fires longer and more weight. Going from twelve inches to 13.5 inches increased the size of shot from 850 pounds to 1400 pound. But there was concern whether the gun barrel steel would withstand the stress. (As a Bachelor of Science in Metallurgical Engineering, I certainly can appreciate the possibility. Having seen how much was learned since then about fatigue propagation, low-cycle themal fatigure and creep, as well as the cracking of the Liberty Ships from low-temperature brittle failure. The brittle failure became a problem because of a technology change, going from rivetted construction to welded steel. Thus a crack once started, could go all through the ship. IN all fairness, once they figured out was wrong, the applied a fix to each boat and no more ships lost due to this problem--Google Books, Does Measurement Measure up? How Numbers Reveal and Conceal the Truth, John M. Henshaw.) As Winston Churchill, pointed out, his decision to go ahead with the larger size did work, but just as easily, it could have meant his downfall politically as young and rash, had the materials failed in the new untested gun size.

But the entire design of a naval boat revolves around the decision as to the guns. If the guns did not work, and they had to go back to 13.5 inch gun, the whole redesign of the ships would have been in vain.

A science fiction story of 1913 had the Germans with a 15-inch gun totally defeating their enemies. W. Churchill was happy that the boot was to be on the other foot.

Winston Churchill also made another decision to go with untested technology, using oil instead of coal. The oil had a greater energy density so the ships could go faster than the enemy. The ships would not have to dock to recoal or refuel so often and the men would not have the thankless job of shovelling coal.

But just as shifting to electric cars now would have the expense of redoing the fueling station infrastructure, shifting to oil would be an expense in setting up the infrastructure and reserves of oil. And founding the Anglo-Persian Oil Company. Winston Churchill pointed out that the government invested 2.2 million pounds Sterling. They gained from thirty to fourty million pounds. (Foot note on page 139 and 140 of the volume.)

The people were in an uproar! A German cruiser force attacked fishing towns killing five hundred innocent civilians. The British attempted to pursue them. They were lost in the mist! But like our own terrorist defense, they had to have had people and ships everywhere.

And he talked about the power of naval intelligence, using a little bit of data. In World War I, like World War II, the German code books fell into Allied hands. But the Germans suspected something, so they often used other code books that the Allies did not have. And they also gained much from triangulating on wireless telegraphy from ships. And, then as now, much was made of the analysis part of intelligence, putting the pieces together to make actionable intelligence.

He closes the first volume on the beginning of the problem with the Dardanelles.Britain was trying to keep Turkey neutral. Unbeknownst to him there was a secret agreement between the Young Turk party. The Balkan states saw that Germany appeared to be winning in 1914, and to some extent because of the antipathy with Russia, which was fighting Germany on the allies side, decided to go with Germany. Three months after the hostilities opened with Turkey, the forts garding the European part of Turkey were undefended. And Winston Churchill was concerned that Christians might be massacred in what is now Israel.

At this point, Winston Churchill does his masterful summary. England cleared some stray German warships that were terrorizing shipping throughout the Indian Ocean, Pacific and South Atlantic. "From the uttermost ends of the earth ships and soldiers are approach or gathering in the Easter Mediterranean in fulfilment of a destiny as yet not understood by mortal man." "The arrival of the Anzacs [Australians and New Zealand] created the nucleus of the Army, needed to attack the heart of the Turkish empire. The deadlock on the Western Front, where all was now frozen into winter trenches, aforded at once a breathing space and large possibility of further troops. While Australian battalions trampled the crisp sand of the Egyptian desert in tirless evolutions, and Commander Holbrook in his valiant submarine dived under the minefields of Chanka and sank a Turkish transport in the throat of the Dardannelles, far away in the basins of Portsmouth the dockyard men were toiling night and day to mount the fifteen-inch guns and turrets of the Queen Elizabeth. And yet all was unconscious, inchoate, purposeless, uncombined, Any one of a score of chances might have given, might still given, an entirely different direction to the event. No plan has been made, no resolve taken. But new ideas are astir, new possibilites are coming into view, new forces are at hand, and with them marches towards us a new peril of the first manitude. Russia, mighty steam-roller, hope of suffering France and prostrate Belgium--Russia is failing. Her armies are grappling with Hindenburg and Ludendorf, and behind their brave fronts" there is already signs of weakness.

They had to deal with the submarine menace. There was no harbor for the fleet to retrofit. Thus, do we keep the ships moving where they would be less vulnerable. But, they would suffer wear and tear and burn up precious fuel. Or do we let them rest, and be sitting ducks should Germany get submarines into the harbor. England was frantically setting up booms and nets to stop the submarines.

"Resources, almost measureless and of indescribable variety in ships, in men, in munitions and devices of war will now flow month by month steadily into our hands. What shall we do with them? ... "Shall we

  1. use our reinforced fleets to turn the Teutonic right in the Baltic
  2. or their left in the Black Sea and the Balkans
  3. or shall we hurl our manhood against sandbags, wire and concrete in frontal attack upon the German fortified lines in France?"
  4. Shall we save Russia
  5. shall they try to ally some of the smaller nations
  6. shall the British army only fight in Belgium or should they open a new front
  7. "shall our fleets remain contented with the grand and solid results they have won, or shall they ward off future perils by a new inexhaustable audacity."
In the beginning of the 1915, there were two possibilities. The ships could try and seize a German island giving them a foothold to fight or stop their fleet. Then the Russians army could be transported on their Northern front to open up a new front. Or, they could turn Turkey and hopefully turn a front on the South.

The Tank

After the German and French armies were stalemated in trench warfare, Winston Churchill demanded that someone develop what is now known as a tank. Winston Churchill, as serving in the admiralty, ordered 70,000 pounds Sterling worth of "landships." He pointed out that he went out on a limb here, having no authority to do so.

The idea of a tank was not new. Several peple proposed it. Winston Churchill acknowledge H. G. Wells had written science fiction about tanks in 1903. (Wikipedia has an excellent article showing the concept goes back to two letters published in the 1833 The London United Service Magazine and a patent in 1878.) (I had occassion to read H. G. Well's Outline of History that he wrote in 1921 with concern that the next war would have poison-gas-belching mechanical monsters.) Winston Churchill wanted a large number of landships prepared in secret--that would overwhelm the Germans and punch through the trenches. Winston Churchill sighed that the British government built very few of the tanks, destroying the potential to smash through the barbed wire, taking several lines of trenches at night. He presented his plans in a memo of December 3, 1915, calling for "above all, surprise." But this was not put into affect until November 1917. (Winston Churchill also looked into smoke and gas warfare.)

Energy

The Demos is faced with a similar high stakes scenario, dependent in large part on metallurgy like the fifteen inch gun, the TerraPower reactor. A self-contained reaction breeding fuel from depleted Uranium 235. (When one enriches Uranium, one extracts Uranium 235 and leaves the Uranium 238 behind. It is useless for conventional fission reactions or nuclear bombs. It is used in munitions and armor.)

But the question is whether the materials would withstand the heat and neutrons over decades. Do we go on a fast push or the slow push--the company plans to have a test reactor in 2020 and not have it commercialized for several years after that.

I get the IEEE Spectrum each month--I am a member; it is the IEEE flagship. There are many articles on wonderful schemes that could revolutionize energy production or space travel, including the space ribbon and a plan to mine asteroids.

Vacillation

At first, the plan in the Dardanelles, was that the Navy would destroy the forts with guns from their ships. The British had longer range guns than the Turkish forts, so they could simply destroy the guns therein from the Sea without risk being attacked in return. Thus, the ships would methodically destroy all the guns defending the pathway from the Mediterranean to the Black Sea. Then the ships could operate at will, splitting Turkey into an Asiatic part and the remainder on Europe.

The Army said it had no divisions to spare, so the plan was a ship-only plan. But as there were successes in South Africa, more training and the French made committments, as well as troops from Australia and elsewhere, the issue of sending the army at the same time was made. Thus, the Turks would have faced an attack on their European side, the famous Gallipoli, while dealing with British Navy steaming up and down the water way separating them. The Twenty-Ninth Division was the one that they discussed sending there.

Lord Kitchener was pivotal in this as Secretary of State for War. Yet sometimes he was in favor of sending armed forces to the Dardanelles, and sometimes felt that it would be unwise to have a two-front war weakening the effort in France and with insufficient forces in Turkey to win. After a few ships had problems, apparently from mines or torpedo tubes mounted in the gulf, the War Council voted to hold the navy attack and rely primarily on the military, an exact reversal of their earlier procedure.

The Dardanelles Commissions said that after they started the attack, There were really only two alternatives that were thoroughly defensible. One was to accept the view that by reason of our existing commitments elsewhere an adequate force could not be made availablefor expeditionary action in the Eastern Mediterranean; to face the possible loss of prestige which would have been involved in an acknowledgment of partial failure, and have fallen back on the original plan of abandoning the Naval attack on the Dardanelles, when once it became apparent that military operations on a large scale would be necessary. The other was to have boldly faced the risks which would have been involved elsewhere and once to have made a determined effort to force the passage of the Dardanelles by a rapid and well-organized combined attack in great strength. Unfortunately, the Government adopted neither of these courses..." Winston Churchill points out that indecision delayed the 29th Division by three weeks or more, as it would have arrived in better order.

So what happened to the Navy Plans Under Winston Churchill to force the straits with navy means: Thus it will be seen that never after March 22 were the Admiralty and the Naval-Commander-in-Chief able to come to a simultaneous resolve to attack. On the 21st all were eunited. Thereafter, when one was hot, the other was cold. On March 23 and 24 the Admiralty without issuing actual orders pressed strongly for the attack, and the Admiral on the spot said 'No." On May 10 the Admiral on the spot was willing, but the Admiralty said 'No.' On August 189th, under the impression of the disaster at Suvla Bay, the Admiralty raised the quesiton again and authorised the Admiral to use his old battleships to the fullest extent, and the Admiral met them by a reasoned but decisive refusal. Lastly, in the advent of the final evacuation Admiral Wemyss, who had succeeded to the command, armed with plans drawn up in the most complete detail by Commodore Keyes for forcing the Straits, made vehement appeals for saction to execute them: and this time the Admiralty refused.

A sad note, but not related to participatory democracy, was that Greece offered to send four divisions as well. The Russians were willing to aid, even though it ws surely pressed by Germany. But the Russians were unwilling to ally themselves with Greece and would not have the Greek King in Constanople. Churchill was hoping that the naval success in the Dardanelles would cause all of Eastern Europe to pile onto Turkey. But they could not bring themselves to ally themselves in the hope of great gains to be split.

Conclusion, and relating to our Blog

Our question for this blog is should the demos rely on leaders following things on war maps to make the decisions. And Winston Churhill described excellently how the war room worked in those days. Or are these so stupendous, involving so many political calculations, that there is a role for the demos, a right of the demos to have a say. Perhaps Winston Churchill as Lord Admiral should have been left alone, but the decisions above him, that were made by Lord Edward Grey as Foreign Minister, the Prime Minister and the Exchequer, be made by the Demos directly.

On Leadership Empathy

Winston Churchill had an opportunity to view an attack against the Germans in France (in Aubers Ridge against the Souchez position, April Ninth 1915).

I made every effort in my power without incurring unjustiable risks to view the battle. But neither far off from a lofty steeple nor close up on the fringe of the enemy's barrage was it possible to see anything except shells and smoke.Without actually taking part in the assault it was impossible to measure the real conditions. To see them you had to feel, and feeling them might well feel nothing more. To stand outside was to see nothing, to plunge in was to be dominated by personal experiences of an absorbing kind. This was one of the cruellest features of the war. Many of the generals in the higher commands did not know the conditions with which their troops were ordered to contend, nor were they in a position to devise the remedies which could have helped them.

On Vacillation

We saw above that Supreme War Commands and individual leaders and the combination of the commander on the ground and the command forces at home, all can suffer from vacillation, starting something but not really seeing it through.

And how can a demos avoid going back and forth, particularly when they might be polarized on a decision, with 48% strongly in favor of opposite directions and four percent undecided. (We certainly have seen that such situations can cause changes of government in conventional representational democracies.) We certainly could not have such in military matters, whether it be in major campaigns as we have seen above in the Dardanelles, or even a war. A Demos should not start a war, only to stop it a few months later, then to restart it...

In the latter case, the Constitution should specify that war should not be declared, or started unless two thirds (or more) approve. (The constitution could authorize a sortion jury to initiate a covert or surprise attack with an even greater supermajority requirement.) But there are peace time operations that should not be started and restarted. An example might be the massive undertaking to build electric recharging infrastructure for switching to electric cars to avoid dependency upon petroleum supplies. Thus, the Constitution or rules should allow a Demos to declare:

  • Before, we make a decision on the issue, whatever decision we make shall not be reversed except by a sixty percent supermajority
  • Now, we make a decision on this issue.

Lee Kuan Yew and Leadership in Development

From Third World to First, The Singapore Story: 1965 to 2000, Lee Kuan Yew, Harper Collins 2000

When can a leader change habits and development and personal decisions to help a country? When is it good? And can a Demos rise to the occassion itself to eliminate vices or develop itself?

In Singapore, Lee Kuan Yew: ("We would have been a grosser, ruder cruder society had we not made these efforts to pursuade our people to change their ways. We did not measure up as a cultivated, civilized society and were not ashamed to set about trying to become one in the shortest time possible... After we had pursuaded and won over the majority, we legislated to punish the willful minority.")

  1. introduced a plan to build housing and have the individuals living in them own them, the HOusing Development Plans. He relocated some from "squatter huts with no water, power or modern sanitation" but no utility payments o rrent. into high rise apartments. These had rent and utilities. And this was a wrenching experience psychologically. Some tried to bring their pigs, ducks and chickens to the high rise apartments. Others continued to use kerosene lams, stairs instead of elevators, and selling sundry goods.
  2. introduced an antispitting compaign
  3. rounded up stray cattle in the 1960's that were eating grass in public areas
  4. moved food vendors to special areas equipped with water, sewage, etc.
  5. dealt with grey-market taxis
  6. eliminated hog raising
  7. banned public smoking and advertising for same. (That is, of course, an issue now in the United States and elsewhere.)
  8. banned chewing gum--this was famous

There were other contentious examples of leadership--language being one of them. Do they teach students in Chinese, with which the majority had deep emotional ties, or English for the obvious trading advantages. Also, there was an issue of which dialect of Chinese to use, Hokkien which was the home language for most, or Mandarin to better communicate with those in Mainland China. "During our [Lee Yew and his family] walks in public parks and gardens, parens would be talking to their children in dialect until they noticed Cho and me, when they would like embarassed and switch to Mandarin, abashed for not heeding my advice. The switch was especially difficult for the grandparents, but most managed speaking to their grandchildren in dialect and understanding their replies in Mandarin."

As a different kind of development decision, several American cities are downsizing. Major Dave Bling of Detroit intends to constructively evict 20% of the area--leaving them without municipal services such as garbage pickup, police patrols, road repair and street lights.