Wednesday, November 26, 2014

"Lessons from Ferguson, Part II"

                   Sydney M. Williams

Thought of the Day
“Lessons from Ferguson, Part II”
November 26, 2014

The waiting is over. It is hard to imagine a jury with a more difficult task than that had by the twelve people on the St. Louis County Grand Jury who decided Monday evening not to indict Ferguson police officer, Darren Wilson for the death of Michael Brown last August. Over twenty-five days, the Grand Jury had heard more than seventy hours of testimony from sixty witnesses. They considered five possible charges, ranging from first degree murder to involuntary manslaughter. They spent two days deliberating the charges. They were not sequestered so were fully aware of the momentous nature of their decision. They had to withstand extraordinary political pressure, both direct and implied. The easy way out would have been to indict and pass on the job of determining guilt or innocence to a trial jury. But they adhered to their responsibility of sifting through all the information and material and decided that there was not enough evidence for a court case to go forward.

Following the announcement of the jury’s decision, President Obama said that the decision of the Grand Jury should be respected, as they are the only ones who have heard and seen all the evidence. He was right. (I just wish he had spoken the same way back in August.) Mr. Obama quoted a letter from Mr. Brown’s father who called for peaceful demonstrations. (Throughout this episode, Mr. Brown senior has been the one adult in the room.) Unfortunately Mr. Obama’s and Mr. Brown’s words were not heeded by those in Ferguson. Riots broke out. Shots were fired. A dozen buildings were burned. Cars were burned and flipped.

It was obvious that the police in Ferguson decided not to protect the property of those whose stores were looted and destroyed, and whose cars were damaged. They attempted to keep some semblance of order, but apparently were more concerned about the backlash from the media and the black community, which may have been wise. But sadly, that property destruction reflects what Matthew Arnold would have called our experimenting with “low culture,” the doing as one likes without regard to one’s community. Disrespect for others characterizes today’s society.

History tells us we should always be fearful of government that uses force unlawfully and capriciously. African-Americans feel targeted, in part because of history, but also because crime and murder are more common to them than others. Facts support their fears. The death rate for blacks in inner cities is ten times that of whites. According to the FBI, there were 12,664 murders in the U.S. in 2011, of which 6,329 were blacks. But 90% of those killings were black on black.

The focus of black leaders should not be on revenge; instead they should ask, why? Why is there so much hatred? How can that energy be redirected toward productive purposes? What can be done to improve schools and provide more and better jobs? What about the social changes in our culture? Have declines in two-parent families and increases in unwed motherhood played roles? (In 1950, 9% of black families with children were headed by a single parent. Today, over 70% of black children are born to unwed mothers.)

While the Civil Rights movement made great strides in furthering the causes of African-Americans, an unintended and unfortunate consequence was the creation of a sense of victimhood, and from that, entitlement. Too many blacks see themselves as victims, not in control of their own destiny. Such feelings are demeaning and tend to limit opportunities and self-respect. It is true that many blacks see themselves as victims because vestiges of discrimination still exist, but political leaders have promoted this sense, as they push the concept of hyphenated Americans. Leaders should attempt to help people help themselves, by emphasizing self-reliance and dependency on one another, rather than government. They should focus on uniting, not dividing.

Police are necessary in any society that functions under the rule of law; it is not an easy job. A black-separatist group has offered a $5,000 bounty for the location of Officer Wilson. His life has been indelibly altered. Police work is dangerous. According to FBI statistics 48 of the 780,000 officers in the U.S. were killed in 2012 – a rate 50% higher than for the general population. There is no question that there are rogue cops, but the vast majority work at a difficult task – maintaining order, while confronting risk – while knowing they work for the people they police.

More than anything, it has been the culture of division that has rent places like Ferguson. People like the Reverend Al Sharpton make a living by inciting people to act against their and society’s best interest. He makes them dependent on him. He thrives on their dependency. If there is a camera, Mr. Sharpton will find it. If there is a microphone, he will stand before it.

Peaceful protests are an indelible part of our heritage, and have roots with the likes of Henry David Thoreau and Martin Luther King. But encouraging looting and destruction and demanding justice when justice has already been done only raises expectations with little hope of satisfaction. In fact, it was worse than that. The damage inflicted, with buildings and cars burned, was to their own city, their own people. Such destruction will worsen their lives. Stores will not reopen, and those that are still standing will raise prices to compensate for the higher costs of operating in “dangerous” neighborhoods.

While I thought Attorney General Eric Holder’s involving himself in the crisis last summer was an overreach, the fact he did serves to make more meaningful the findings of the Grand Jury. There is no question that St. Louis County prosecutor Robert P. McCulloch has been under a microscope, as have been the jurors. If anyone erred in this case, it would have been in favor of finding Darren Wilson somehow criminally responsible. The fact they did not only makes their decision seem truer.

There are many lessons to be learned from Ferguson. The most important one is that our system of justice works. The 5th Amendment of the Constitution reads: “No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury…” A second lesson is that the plight of young, poor, unemployed African-Americans must be addressed. Such efforts must begin in the schools and lead to the workplace. State and federal rules and regulations should promote businesses, the fountains of jobs. The third lesson involves addressing our culture, to be one that promotes respect both of the self variety, as well as for the other person – a culture that promotes unity, not division. Charlatans like Mr. Sharpton should return to New York.

Monday, November 24, 2014

"Ideology & Age, as We Look Toward 2016"

                  Sydney M. Williams

Thought of the Day
“Ideology and Age as We Look Toward 2016”
November 24, 2014

A funny thing is happening on the way to the 2016 election. Youth, excitement and new ideas increasingly seem to be the province of Republicans. For decades – at least since Jack Kennedy – the Democrat Party has been the one associated with youth, vitality and concern for the needs of real people. However, with the long years they have spent in Washington, Democrats have morphed into a cynical, sanctimonious group of aging professional politicians. The smug Jonathon Gruber, now dismissed by Democrats for telling the truth, perfectly captured their Pecksniffian ways when he spoke of the “stupidity” of the average voter, of his and her inability to understand the magnanimity of what the Left was doing for the good of the common man. Process, despite being elemental to democracy, is irrelevant to these people. The end is all.

Democrats are driven by semi-contrived, elitist issues, like global warming (now called climate change since temperatures haven’t changed much in a decade and a half) and environmental issues, where they advocate products like electric cars and solar panels that only the elite can afford. They want wind farms, except not where they might interfere with their windsurfing on Nantucket Sound. They express concern regarding inequality, but not if it interferes with their remaining first among equals. They claim to want the best education (including free pre-K), as long as it doesn’t upset the teacher’s unions, or it doesn’t involve vouchers that might send the unwashed to the private schools where their own children are tucked safely away.

They have created victims where none existed. For example, not only is equality demanded in terms of scholastic outcomes, the federal government now requires public schools in Minneapolis to have equality in terms of punishment. In other words, on a pro rata basis African-American boys cannot be disciplined more than Asian girls, regardless of the natural inclination of the former to misbehave more than the latter. Democrats have re-lit the divisive fuse of racism, as a means of ensuring they keep the African-American vote.

The Left is more concerned with political power and personal wealth, than applying common sense to the problems that face the nation at home and abroad, and the problems individuals face. Despite “re-sets” and apology tours, the world is less safe than it was six years ago. At home, while the employment market is improving after more than five years of economic recovery, the workforce participation rate remains dismal. Public schools – the means by which the aspirant student from a middle class or poor family can advance – remain uncompetitive in the global market place.

Symbolism is more important than meaningful accomplishments. We see it in the passing of sweeping legislation, rather than addressing issues on a piece-meal basis. Dodd-Frank has made more opaque the rules for the financial world, thereby letting risks propagate like permitting banks too-big-to-fail to become larger, and therefore riskier. We have the symbolism embedded in a large and complex healthcare bill that admittedly has added millions of uninsured to the roles of the insured, but that also deprived others of their former insurance and disallowed millions from keeping their doctors, in spite of promises to the contrary. It was so complex that it had “to be passed to see what was in it,” and could only be passed because of a gullible and “stupid” electorate. We have the symbolism of immigration “reform,” which the President mandated unilaterally despite its insult to those who have arrived legally, and despite what it says about working with the new Congress. While the full consequences are not yet known, it would certainly appear to serve as a green light for other illegals to cross the border in hopes of amnesty. Worse, it sets back any hope for an overhaul of our immigration policy, which should be broadened, but with a focus on the aspirant and college educated, and with secure borders.

Age is relevant when considering the current Congressional leadership. In the Senate, Harry Reid at 74 is two years older than Mitch McConnell, and Nancy Pelosi is nine years older than John Boehner. Of course none of them are young. At 65 John Boehner is the most junior of the group. When we look at possible candidates for 2016, the age difference becomes striking. Hillary Clinton, as the Democrat front-runner, would be, at 68, the third oldest person to be inaugurated. She would be a few months younger than was William Henry Harrison. President Harrison is noted for having served in office the shortest time of any President. He died peacefully a month after inauguration in 1841. Joe Biden was born on November 22, 1942, so would be 74 on inauguration day, a full five years older than Ronald Reagan. Even Elizabeth Warren, better known as “Pocahontas” (or Pinocchio), would be 67, ranking her third behind Mr. Reagan and Mr. Harrison. In terms of Governors, Andrew Cuomo is a relatively youthful 56, but Jerry Brown is a well-seasoned 76, an age more suited for leadership in the old Soviet Union.

Republicans, in contrast, have a relatively young bench. There are eleven prominent Republican Governors (and former Governor, in the case of Jeb Bush), with an average age of 54, whose names have been mentioned at one time or another as possible Presidential contenders: Jeb Bush, Scott Walker, Chris Christie, Nikki Haley, John Kasich, Bobby Jindal, Mary Fallin, Mike Pence, Rick Perry, Rick Snyder and Susan Martinez. (Republicans will nominate a governor in 2016, in my opinion.)

It is true that the last three Democrat Presidents were young men, while two of the last three Republican Presidents were older men. (Sunday’s New York Times noted: “With the exception of George W. Bush, every Republican nominee since 1976 has been over 60.) But Jimmy Carter came across as an impersonal technocrat, while Bill Clinton was ruthless with his enemies and exhibited the morals of a Billy Goat when it came to women. Barack Obama arrived with the promise of unifying a nation from a perspective of race, but instead has divided it in a way not seen since the late 1960s.

While youth has its advantages, age isn’t necessarily a detriment. After all it was Ronald Reagan the oldest person ever inaugurated as President who has been credited with bringing springtime to America, after the hoarfrost that surrounded his predecessor. George H.W. Bush was the fourth oldest to be inaugurated, but twenty-two years after he left office, on his 90th birthday, he parachuted out of a helicopter – not only the oldest President do have done so, but the only President ever to have parachuted. Both men were young in spirit, if not chronologically.

More detrimental than the fact that so many Democrat leaders are age challenged is their adamancy that Washington is for bulldozing, not for negotiating. It is in the emissions of their obstinacy that climatologists should be truly concerned. Their hypocrisy is suffocating. They know better than us. The people’s relationship with government is that of master-servant, but one in which the roles have been reversed. The people have become servant to their political masters. Republicans are not without guilt in this regard, especially some of the charlatans in Congress who spend most of their time denigrating their opponents. Like an Old Testament prophet, Ted Cruz humorlessly harangues the populace, dividing the nation as though he were parting the Red Sea.

The final nominees in both Parties, in my opinion (and especially after the current occupant), are likely to have some executive experience. Senators get more national news coverage than Governors. We hear more from Ted Cruz, Rand Paul and Elizabeth Warren than from Scott Walker and John Hickenlooper who are actually trying to manage their states, a job more similar to running the federal government than being a bloviating U.S. Senator. Keep in mind, however, the two most important traits for a good President are not one’s prior job(s), age, depth of knowledge or even one’s native intelligence; they are character and judgment.

A price we pay for living in a democratic republic is having to endure never-ending campaigns, with their obfuscating orations and meaningless promises. Thomas Paine wrote in the early years of the American Revolution: “These are the times that try our souls.” Incessant campaigning tries mine, but it is a price worthwhile for the privilege of living in this great land.

Thursday, November 20, 2014

"Deflation - The Disease or the Cure"

                 Sydney M. Williams

Thought of the Day
“Deflation – The Disease or the Cure?”
November 20, 2014

Caveat – I am not an economist, so the opinions expressed are mine based on little education, some experience and selective readings. Those more knowledgeable than I might properly challenge my findings. My bottom line is that modest deflation and inflation, by which I mean one or two percentage points, are not reasons for concern. It is when we get rapid changes in either direction that trouble ensues, as the U.S. experienced in the 1930s with deflation and in the 1970s with inflation, and which other countries have undergone to far greater extremes.

We live in an age of technological wonderment, not dissimilar to the closing decades of the 19th Century when the fruits of the Industrial Revolution were being harvested. The European Space Agency was able to land a vehicle on a comet 300 million miles away, yet only two and a half miles wide, and which was traveling at 40,000 miles per hour. The journey began on March 2, 2004 in French Guinea when the spacecraft Rosetta lifted off on what would be a journey of 3.8 billion miles and which took more than ten years. By any measure this was an extraordinary feat.

Technology has changed our everyday lives in myriad ways, from e-books to smart phones, from home security systems to cars that drive themselves. Technology, along with the lowering of trade barriers, has allowed businesses to design products in one place and produce them somewhere else, lowering prices for consumers – a benign form of deflation that we should celebrate, despite politicians using the term to conjure images of potential catastrophes.

About a week ago John Cochrane, professor of finance at the University of Chicago, penned an op-ed in the Wall Street Journal titled “Who’s Afraid of a Little Deflation?” I read it, and exhaled, finally! Is it possible that we may be exiting an eighty-year period during which deflation, because of the 1930s, has been seen only as a portent of doom? During the 19th Century deflation was seen as compatible with economic growth.

Using an historical price converter produced by British mathematician and computer scientist, Stephen Morley, average prices in the UK declined 12% between 1800 and 1900. While that seems incredulous, that is what the calculator calculated. (Keep in mind, following the Battle of Waterloo the European continent was largely quiet from a military perspective.) The Industrial Revolution allowed manufactured goods to be produced both cheaper and in more plentiful supply. Global trade reduced bottlenecks between sourcing raw materials, manufacturing and consumption. That same price converter indicated that in the next 100 years prices rose from 100 to 7300, understandably as Europe endured multiple revolutions and two world wars. Price increases also reflected the increased use of debt, with deficit budgets becoming the norm, no longer the exception. UK GDP, according to data from the Bank of England, during the period 1800 to 1900 rose about fourteen times, versus about seven fold for the next 100 years. Deflation did not appear to impede economic growth.

We are again living through a period of rapid productivity improvements, driven by technology and increased global competitiveness – both positive drivers of deflationary forces and economic growth. Admittedly, we do have a War on Terror, but it should not be as economically devastating as were the two world wars to the last century.

There is no question that inflation favors borrowers and deflation benefits savers. A debt-heavy nation will always opt for inflation and the debasement of its currency. It makes more sense to pay obligations with a currency worth less than it was at the time they were incurred. Since 2000, the nation’s GDP has risen 63%, while federal debt is up 193%. Over that same time the Dollar has lost more than a third of its value. Is that the path to sustainable growth?

Deflation Bears cite the effect of deflation on wage growth – that without inflation, wages would decline or stagnate. If deflation is solely a consequence of falling demand that may be true, but deflation can also occur because of productivity improvements and globalization. In the latter case, those who argue that wage growth is more closely aligned with employment numbers than with any fears of future inflation or deflation may be closer to the mark. Weak employment numbers, such as we have experienced for the past five years, have been a drag on wage inflation. But, and despite very low work-force-participation numbers, the employment situation is improving, with unemployment having fallen from over 10% to under 6%. If the current trend holds we should be close to the time when wages will rise naturally. In frustration, Congress may legislate an increase in the minimum wage, but the consequences may not be what the reformers intend. Such decisions, without economic footings, are not likely to prove successful.

Since 1977 when Congress amended the Federal Reserve Act, the Federal Reserve increased its responsibilities. It is now charged with maintaining maximum employment, stable average pricing and moderate long-term interest rates. When objectives are not complementary, the Fed attempts a balanced approach. The Amendment, in my opinion, reflected an abrogation by Congress of their responsibility for fiscal policy. Congress is better positioned to influence employment numbers than the Federal Reserve. They can raise or lower taxes and tighten or loosen regulation. With Congress choosing to renege on their obligation, the consequence has been to becloud the distinction between fiscal and monetary policies. If the Fed’s only job was to maintain stable average prices, it is a valuable service if it allows the nation to avoid the unpleasantness of the 1930s and the 1970s.

The risks of the current policy, it seems to me, lie with Dollar debasement, more a consequence of inflation. A federal government that owes so much does not willingly repay its obligations in Dollars worth more than the ones they borrowed.

Concerns over deflation have been inflated, in my opinion. Modest deflation is neither a disease nor a cure. The best of all possible worlds would be very slight deflation and a tight labor market. It would suggest a world in which consumers and savers would benefit – the latter, a growing constituency in an aging population. It would discourage the use of debt for purposes other than productive investments. Politicians who have no problem with a depreciating currency express concern that a dollar might buy one or two percent more next year than this. It makes little sense.

Monday, November 17, 2014

"The Illiberal University"

                   Sydney M. Williams

Thought of the Day
“The Illiberal University”
November 13, 2014

Mottos carved in granite over our nation’s universities carry words like “wisdom,” “truth,” “knowledge,” “virtue,” and “justice.” They are generally inscribed in Latin, which emits an even greater sense of solemnity and reverence. They are noble words that convey impartiality, places where contrary opinions can be debated and knowledge is imparted didactically. They suggest institutions from which students will graduate with unlimited possibilities.

Unfortunately those words lie. It is ideology not knowledge that students today are taught and that they master. Most of today’s great universities no longer search for an illusive “truth.” The quaint concept of “virtue,” or the fairness embedded in “justice” are just words whose definitions are irrelevant. Professors offer opinions as fact.

There are no ivy-covered arches etched with the words, “Ignorantia vos Servitus,” yet that motto would more accurately capture many of today’s universities. Too many students graduate ignorant of ideas and opinions that do not accord with those of their teachers and fellow students. Consequently, too many grow up dependent, either on family or government. It is curious how closely aligned are the traits, rebellion and conformity. Today’s students are both rebellious and conformists. They rebel against the evil they are told is personified in the Koch brothers, while admitting no one into their circle that does not conform to their political leanings. They shun independent thinking. They feel sanctimonious, yet lack virtue. It is an attitude both arrogant and supercilious. It is elitism at its most foul. It is not education these students are receiving; it’s indoctrination.

One manifestation has been the reluctance of teachers and administrators to allow those deemed politically incorrect to speak on their campuses. Last spring, former Secretary of State Condoleezza Rice was denied the opportunity at Rutgers, despite her being the first African-American woman to serve in that role. Ayaan Hirsi Ali, a Muslim convert to atheism and a woman who suffered genital mutilation as a child, was denied a promised honorary degree and disinvited from speaking at Brandeis this past spring.

Perhaps, though, the tide is turning. This past fall Ms. Hirsi was invited to speak at the William F. Buckley, Jr. Lecture Series at Yale, which she did, despite opposition from the Muslim Student Association and thirty other student groups. At the University of California at Berkley students were forced by Muslim agitators, led by Professor Hatem Bazian, to withdraw an invitation to Bill Maher to speak at the university’s annual lecture honoring Mario Savio, the founder of the Free Speech Movement. Fortunately, however, the school’s administration made an “adult intervention.” Mr. Maher is still invited.

The most deplorable decision was the one made when students and faculty at Johns Hopkins School of Medicine forced Dr. Ben Carson to withdraw from giving the commencement address in 2013, a place where he had spent 36 years. Dr. Carson, a retired pediatric neurosurgeon, is controversial and has strong opinions regarding social issues, including marriage. Nevertheless, one does not have to agree with him to recognize his extraordinary career, rising from the ghettos of Detroit to a student at Yale, and then at age 33 to become the youngest division head at Johns Hopkins School of Medicine. He is a recipient of the Presidential Medal of Freedom. His crime? He is a social conservative – a casus belli among today’s college elites.

Universities are supposed to be cauldrons of opinions, where even the most outrageous are allowed to speak without fear of reprisal. Instead, they have become incubators of a culture of condescension, bred from political correctness, toward those to whom they feel morally and intellectually superior – the “stupid” masses, as Jonathon Gruber might say. It is ironic that much of today’s infringement on speech comes from the inheritors of those who began the free speech movement in the early 1960s. These had been people who grew up during the McCarthy era, when it was the Right that impeded freedom of speech. Today’s Leftists have borrowed and improved on their means.

This political correctness is mirrored in courses offered by our elite colleges and universities. For example, for $65,000 parents can send their daughter or son to Occidental College where the student might study “The Unbearable Whiteness of Barbie: Race and Popular Culture in the United States,” or “Stupidity: Comparing the American Presidency to Beavis and Butthead.” For $60,000, an impressionable Princeton student can study “The Cultural Production of Early Modern Women, with emphasis on prostitutes, cross-dressing and same-sex eroticism in the modern woman.” Not to be outdone, the University of California, Los Angeles offers “The Psychology of the Lesbian Experience.” (There is no mention in the syllabus of either college as to whether the courses include lab work.) At Alfred University there is a course that might have some practical application – “Nip, Tuck, Perm, Pierce and Tattoo.” But, it is a far cry from studying quantum physics, mechanical engineering or reading Dickens. For a mere $63,000, one can send their little darling to Brown where the youngster can study “Black Lavender: A Study of Black, Gay and Lesbian Plays,” a course sure to earn them a spot on the trading desk at Goldman!

Is it any wonder that too many of our students leave college undereducated and ill-prepared for the real world? While the previous paragraph was an exaggeration, in that most courses offered students today are not dissimilar to those offered fifty years ago, one should also understand that there are no courses on White Supremacy, The Care and Handling of Firearms in the Suburban Household, White Slavery in North Africa, or the Importance of Heterosexuality in The Modern World. Nor should there be; the college experience should be one of broadening the mind, not a temple for advocacy. Evangelical groups, which exist because of nondiscrimination policies, have now lost their official status at Bowdoin, Tufts, the State University of New York at Buffalo and Rollins College.

It is the ends not the means that drives the arrogance of the Left at our most elite colleges and universities. For instance, they tell us that global warming is “settled science,” yet ignore the hundreds of agnostics who question those conclusions. They are as fervent in their beliefs as the most rabid, bible-thumping, southern preacher, yet belittle the latter as ignorant, while praising themselves as omniscient.

Humans adjust to changing social mores over time. The do not need trigger warnings. They cannot be forced. Issues are manufactured where none exist. Attitudes toward race and gender have changed dramatically in the past fifty years. Today’s race-baiting has set back progress that had been fifty years in the making. All the ink spilt on differences between the earnings of women and men ignores differences in hours worked and fails to acknowledge five decades of progress. The same is true regarding today’s attitudes toward gays and lesbians. Just three years ago President Obama claimed that marriage was between a man and a woman. That is no longer his definition. The change from his then public attitude to today’s may have been politically motivated, but one cannot say the same for changing attitudes among Americans. Behavior cannot be legislated; it adapts over time to changes in reality and perceptions.

In last Friday’s strategy piece, “Morning Tack,” Raymond James analysts Jeffrey Saut and Andrew Adams quoted Stephen Hawking: “While physics and mathematics may tell us how the universe began, they are not much use in predicting human behavior, because there are far too many equations to solve. I’m no better than anyone else at understanding what makes people tick…” Human behavior cannot be reduced to a mathematical formula. Studying Shakespeare will help a student better understand human behavior than the course that compares ancient-to-modern Greek gay sexuality that is taught at the University of Michigan, or “Sex, Drugs and Rock ‘n’ Roll in Ancient Egypt,” at Johns Hopkins.

Young people need the skills that allow them to work in today’s increasingly globally competitive environment. They also need exposure to all political and religious philosophies, to help hone their judgment, both in their everyday lives as well as at the polls. Our democracy demands an educated voter. Certainty leads to doctrinarism. It is a hallmark of a closed mind. It is doubt that raises questions and it is through questioning that we learn. 

Thursday, November 13, 2014

"The Internet - A Regulated Utility?"

                    Sydney M. Williams

Thought of the Day
“The Internet – A Regulated Utility?”
November 13, 2014

On Monday, President Obama spoke in favor of net neutrality. He said, somewhat disingenuously, that keeping a “free and open” internet is critical to Americans. That’s basically what we have and it’s what we would like to keep. What Mr. Obama wants to do, however, is impose a ban on all paid prioritizations – that there would be no “slow” and “fast” lanes, just one lane, and that ISPs would no longer have the right to charge content providers for faster access. A problem: once the camel that is regulation gets its nose under the tent, the rest is sure to follow.

Net neutrality, according to its advocates, means that access to the internet will always be equal. Internet service providers – usually cable, telephone, wireless and some municipal companies – have the ability to speed up or slow down access. For example, large content providers like Netflix and Google that stream large amounts of data can hog bandwidth, so have been charging higher fees. ISPs claim such fees are necessary to pay for the technology that permits faster access for those with large levels of compressed data. Content providers claim they are being gouged. In Europe, cable and telephone companies, as noted in an editorial in yesterday’s Financial Times, compete with other ISPs; thereby providing choices. That is less true in the U.S.

Those supporting net neutrality comprise an odd mixture from companies from Netflix, YouTube, Google and Skype to consumer advocacy groups, from President Obama to those favoring free speech. Those against it are the service providers like Comcast, Time Warner, ATT and Verizon and people who worry about the unintended consequences of government intervention into a business that has worked remarkably well for twenty-five years.

Large bandwidth users, like those enumerated above, argue that service providers are deliberately slowing up data from popular websites, so they can charge more. In addition, the argument is made that higher access fees retard the development of new businesses, which cannot afford the higher costs, so would be uncompetitive because of slower access.

Mr. Obama suggested that cable, telephone and wireless broadband networks be considered common carriers under Title II of the Communications Act of 1934, which would classify them as public utilities. The Federal Communication Commission (FCC) was created in 1934 to regulate the telephone and telegraph industries. Using an 80-year old agency to regulate a 21st Century industry seems odd, but, then, this is government. The FCC is an independent commission. It does not report directly to the President; however its five commissioners are appointed by the President. The chairman Tom Wheeler was appointed a year ago and confirmed unanimously by the U.S. Senate. The Agency is dependent on Congress, which controls its budget and makes the laws under which it operates. Efforts to enact net neutrality over the past decade have failed, but this is the first time the President has leapt into the breach.

The fundamental question is: will innovation, which benefits consumers, be hindered or helped by net neutrality? Will costs to consumers rise or fall? In arguing for net neutrality, Mr. Obama is claiming that government is a better arbiter than the marketplace, as to which is better for the consumer. Certainly there is a case for regulation when it protects consumers from monopoly pricing and unsafe products. But in this case (and in my opinion) the effect would be to stifle creativity, slow overall internet access and raise prices, while expanding government.

With the possible exception of the transistor, the internet has been the most significant development in my lifetime. Over the past seventy-odd years, jet planes were invented, television became commonplace, the Atomic bomb was created and we placed a man on the moon. The ubiquitous internet has had a more profound impact on our lives than any of them. Consider the ways it has changed our daily lives. It has vastly altered the way we communicate, transact financial and commercial business, navigate all modes of transportation, do research, practice medicine and protect ourselves. It has, admittedly, been harmful for some businesses, but creative destruction is elemental to progress. It has been the lightly regulated nature of the internet that has allowed it to flourish.

It is the “invisible hand” of pricing by way of competition that has always benefitted consumers. Would the smart phone be here today had the Justice Department not broken up “Ma Bell” in 1982? While there are tens of thousands of content providers on the internet today, there are only a handful of service providers. A principal reason is that the latter are very capital intensive. Nevertheless, government should encourage increased competition in the delivery of the internet to households, as Europe does. It might help resolve the problem.

New industries, such as the internet become jungles. They are Darwinian, in that only the fittest, most nimble and creative survive. Nevertheless, the consumer is the ultimate beneficiary. When government gets its paws on an industry it is reluctant to let go and generally finds reasons to cling more deeply. In this case, the worry of those favoring net neutrality has been heightened by the proposed merger between Comcast and Time Warner. I would prefer to have them compete for the same customer than have them combined. The consumer would be better served.

Regulation, when it serves to protect consumers against unscrupulous practices and people, is a good thing. However, too much regulation is stifling. Regulators justify their existence by building bureaucracies that must find something to do. The monster must be fed. FCC Commissioner Tom Wheeler, while welcoming President Obama’s words, has treaded cautiously regarding net neutrality. He has said the internet must remain an open platform “for free expression, innovation and economic growth.” I believe that is right, but I also recognize that outcomes will never be equal. They are not for individuals and they should not be for businesses.

In services such as the internet, fast is better than slow, choice is better than none and new is generally better than old. But, as Bert Lance once said, “If it ain’t broke, don’t fix it!”

Monday, November 10, 2014

"Immigration - Assimilation or Division?"

                     Sydney M. Williams

Thought of the Day
“Immigration – Assimilation or Division?”
November 10, 2014

The world is more global than ever. Cell phones and texting mean we are always in touch. The internet brings the world to remote places, and staves off ignorance. YouTube means that whatever one does may be recorded, for better or worse. Products may be designed in the U.S., parts manufactured in Eastern Europe and assembled in China and then distributed around the world from Brazil. Apart from some extreme nationalists and a few xenophobes, most people welcome the legal, free movement of people, goods and services this entails. Yet politically motivated immigration policies threaten the future of Europe, the inviolability of the EU, and they place at risk the unity that has defined the United States for over 200 years.

At home, President Obama has said he will sign an executive order, before year-end, to grant amnesty to millions of immigrants residing illegally in the U.S. His threat of unilateral action raises several questions. First, the House did pass a bi-partisan immigration bill that now sits in a drawer in Senator Harry Reid’s desk. So, why did Mr. Reid not bring the bill to the floor? Keep in mind, any Republican bill will not make it to Mr. Obama’s desk until after the first of the year. Why does Mr. Obama threaten to take such action before year-end? Two, if amnesty is so popular among Democrats why did they not run on the issue in the latest election? And, three, what are Mr. Obama’s motivations? Why is he concerned for the millions of illegals in the U.S.? Is his interest humanitarian or economic, or is it cynically based on the possibility of adding to a pool of future Democrat voters?

In Europe, a tiff has risen over inter-Union migration policies, particularly between those of David Cameron (who would limit the free movement of people within the EU) and Angela Merkel (who feels such movement is integral to the principles of the EU). The debate has reached the point that could cause the UK to leave the European Union. Would that be a good idea? In times of slow economic growth, protecting one’s own economy becomes, understandably, paramount. The downside, however, is that such policies foster isolationism and nationalism – both traits that worry anyone who has studied the first half of the Twentieth Century.

Assimilation, which worked well in the United States until a few years ago, depended upon the natural inclination of immigrants to become fully naturalized – to learn English and to assume the customs and habits of those who were here. By the second generation school children little cared whether their playmates were of French, Japanese, Mexican or African heritage. As far as most children were concerned, their school friends were American. It has only been in the last twenty or thirty years that we have become hyphenated Americans, instead of just Americans. While there are those that believe such descriptions allow people to hold on to their heritage, such branding is principally for the convenience of politicians and marketers. We are a “melting pot.” We are a welcoming nation. However, we are also a nation of laws and customs. And we are an English-speaking nation. To not require that new immigrants learn English is to condemn them to a life of servitude.

In Europe, such acclimatization was never possible. The French have always been French, as have the Germans, Italian and Spanish. England’s and France’s colonial legacies allowed more movement than other European nations, but Ceylonese or Egyptians in London always remained more Ceylonese or Egyptian than English, as have Algerians in Paris. Emigrants to Western European countries were often those who sought political asylum, or were forced by war. Those who journeyed to the United States usually came to escape despotism, to seek freedom of expression and religion. They also came to reap the rewards of their own productivity.

It is the failure to assimilate that worsens the situation, especially in Europe, but increasingly so in the U.S. A few years ago Angela Merkel said that the onus was on immigrants to do more to integrate into German society.  “This multicultural approach has failed, utterly failed,” she once said. Now, with Germany at risk of falling behind in global economic competition and with a shrinking population, she has amended her views, encouraging a wider opening of her borders. Nevertheless, there has been little if any integration of Muslims into European social networks. They live in their own ghettos. They speak their own language, adhere to their own customs, and, in many places, obey their own laws, even when Sharia law conflicts with the Napoleonic Code or English common law.

In the United States, the consequence of government policies has been to practice a similar form of de facto segregation. Despite the burden that a lack of knowledge of English poses, in both a financial and social sense, the ability to speak English is no longer required to become naturalized. It is taught in many schools as a second language. In Connecticut, instructions in voting booths are printed in Spanish as well as in English. To our detriment, we have become a bilingual nation. It has been this unprecedented influx of immigrants from one part of the world that worries those in America who would freeze our borders. We should be selectively welcoming to those who want to live here, but we should actively recruit those with the aspiration to improve their lives and, thereby, ours. We want contributors to, not consumers of, our social welfare system.

Politically correct immigration policies negatively affect both continents. The U.S. is faced with hordes of illegal immigrants, mostly from Mexico and Central America. Europe confronts massive Muslim immigration from Turkey, the Middle East and North Africa. While European Muslims and illegals in America represent only about six percent of their respective populations, their birthrates are far higher than the norm, suggesting those percentages will increase – that today’s problems will intensify. When politicians open borders too wide, for political reasons, the risk is that when the pendulum of reaction swings back, as it surely will, it will travel too far in the other direction.

It has been political correctness that has created this mess. It will take commonsense to avoid worsening the division that has already ensued.

Friday, November 7, 2014

"An Election That Spells Opportunity"

                  Sydney M. Williams

Thought of the Day
“An Election That Spells Opportunity
November 7, 2014

"But what good came of it at last?"
Quoth little Peterkin.
"Why, that I cannot tell," said he,
"But 'twas a famous victory."
                                                                                                                Robert Southey (1774-1843)
                                                                                                                The Battle of Blenheim

Elections have consequences and postmortems are revealing. They say as much about the person uttering them, as they do about what is being said. In saying to the nation on Wednesday, “I heard you,” Mr. Obama struck a conciliatory chord. However, when he added, “But for the two-thirds who didn’t vote yesterday, I hear you, too,” he was dismissive of those who did vote and exuded a phony sense of clairvoyance regarding those who did not. It suggested that the Country supported him and his policies by a two-to-one margin, despite Tuesday’s election.

Republicans should be pleased with the election, but they shouldn’t run wild; though Scott Walker’s win in Wisconsin was hugely important. The claim that Republican success was a “Tsunami” was too glib. It is a fitting metaphor in the “Twitter” world we inhabit, but misleading and divisive. Elections do have consequences, as Barack Obama famously sermonized in January 2009, but so do words. Mr. Obama concluded that paragraph with a fateful two-word sentence, which spoke to his unilateralism and, in my opinion, ultimate destruction, “I won.” In so saying, he removed any hope of compromise to help fiscally solve the nation’s economic problems.

Mr. Obama epitomizes what Joseph Epstein terms a “virtucrat” – one who derives “a grand sense of one’s self through one’s alleged virtuousness. Such people feel self-assured based on the moral certainty of their own goodness. However, in the world of governance, compromise is the essential ingredient. There are many on the right who feel much the same way – Ted Cruz comes to mind. They make effective legislators, but are not so good at governing.

The depth and breadth of Republican success on Tuesday could be seen, not only in the re-taking of the Senate, but in state houses across the Country. In my little corner of “very blue” Southeastern Connecticut, Republicans did well. Of the region’s fifteen seats in the state Senate and House, eight were captured by Republicans. Previously, they had two seats.

Of the five Republican women running for national office who I highlighted a week ago, in a TOTD entitled “A War on Women,” four were elected. They included the first women to be elected to the Senate from Iowa, Jodi Ernst; Elise Stefanik of New York, the youngest woman ever to be elected to the House, and the first Republican African-American women to be elected to the House of Representatives, Mia Love from Utah.  After the election, Ms. Love was quoted: “I wasn’t elected because of the color of my skin. I wasn’t elected because of my gender. I was elected because of the solutions I put on the table; because I promised I would run a positive, issue-oriented campaign, and that’s what resonated.”  That’s the spirit America needs!

Democrats have long exercised mastery when it comes to the semantics of the political realm. They toss out words like “liberal” and “progressive” to describe themselves, while their buddies in mainstream media use words such as “obstructionist” and “denier” to define Republicans. The former connotes youth, openness and optimism. The latter denotes old white men, meanness and pessimism. Neither is accurate.

Years ago Democrats misappropriated the word “liberal,” which in the 19th Century meant a willingness to hear all views with the aim of broadening one’s views, and they redefined it to mean the willingness of the state to transfer money from one group of people to another. One has to only look at the administrations and faculty of the nation’s top colleges to realize how illiberal they actually are. They deny students the opportunity to hear views that conflict with their own. They have taken the word “progressive,” which means capable of being evolved or developed, and use it to suggest they are precocious, when in fact they are mired in politics of the past.

Republicans should have the edge with the young. Their policies help those who want to better themselves. Republicans are interested in tax and regulatory reform and individual opportunities. They want simplified, but meaningful bank regulation, not Dodd-Frank which has made big banks bigger, and therefore riskier. They want to encourage creativity, not stifle resourcefulness. They abhor compartmentalization, a term reserved for Democrat strategists who view the electorate as victims, for whom the state can then appear as savior.

It is important not to fall for the story that the election was about nothing, a “Seinfeld Election,” as some claimed, or that it was “boring,” as David Brooks of the New York Times wrote. It was about Mr. Obama’s policies of transforming America by dividing us, emphasizing differences, not similarities; of increasing dependency on government, not unleashing individual initiative; about the abandonment of the rule of law when it is politically inconvenient. It was about Mr. Obama’s focus on victimhood, be it race or gender. It was about his not taking blame when failure appeared, as it did in Benghazi, Fast and Furious, the IRS, the VA, the NSA, Iraq, Libya, Russia, Ukraine and more. It was about downplaying America’s role as leader of the free world.

Just as President Obama promised to “fundamentally transform America,” Republicans must rebrand themselves, if they want to become meaningful and earn the respect of our youth, women and minorities. They must begin using positive words like “opportunity,” “liberty,” “unity” and “responsibility” to define their mission and who they are. They must emphasize that a good education is what provides opportunity; that without freedom we are enslaved; that, while we are diverse, we are one – E Pluribus Unum. And finally, Republicans must speak about personal responsibility, how through trial and error and the assumption of risks, we learn and succeed, accepting losses as well as gains. They must appeal to aspirations, not wants. They must point out that dependency equates to servitude, and that its antonym is independence. Ronald Reagan’s years were called a “revolution” for good reasons. While he wanted to preserve what was good in our culture, he wanted to radically change the way we approached ourselves and our government.

The election created opportunity, not bragging rights. It needs to be seized.

Wednesday, November 5, 2014

"The Election"

                                                                                                                  Sydney M. Williams
                                                                                                                  November 5, 2014

“The Election”

I will have more on this subject on Friday, but I wanted to pass on my initial reactions to last night’s elections. Republicans should be pleased with the results. They will control both the Senate and the House. But commentators who claim they “caught a wave” exaggerate, in my opinion, the results. When only five or six percentage points separate winners from losers that is not a wave; it is a victory, but one with a substantial minority. That was the mistake Mr. Obama made in 2008. He ignored the voices of the 47% of the people who voted for John McCain. Those who won last night should not make the same mistake now.

There are many who will argue that we are a divided nation, but in my opinion it shows us as a centrist nation, with widely differing views and opinions. Obviously there are parts of the country that lean heavily one way or another, but even in New England, which is typically Democratic, the gubernatorial races in Maine, Connecticut, Rhode Island, Vermont and Massachusetts were tight. Victors need recognize that winning did not ordain unilateralist powers.

It is normal for winners to celebrate their victories, and they should. But once they assume office they must work with their political opponents to forge policies for the good of their state and the nation.

Monday, November 3, 2014

The Month That Was - October 2014

      Sydney M. Williams
                                                                                                                  November 3, 2014
The Month That Was
October 2014

“There is something in October sets the gypsy blood astir:
We must rise and follow her,
When from every hill of flame,
She calls, and calls each vagabond by name.”
                                                                                                                William Bliss Carman (1861-1929)

Seventy-three years ago my mother wrote, “An Ode to October.” It was the month of her parents’ birth and of their wedding. The poem begins:

“October is a happy month,
A month of love and song.”

This October was more mixed. On the positive side, markets rose, despite the S&P 500 dropping 5.6% in the first two weeks. Oil prices declined 11% during the month, a welcome relief as we head into the winter season.

Of greater concern, market volatility, as measured by the VIX, rose 61% by mid-month; though by the end of October was lower than where it had been at the start. Additionally, there were four days when the DJIA moved more than 1.5%, the most since June 2012. Increased volatility serves as a reminder of the unpredictability of markets. While bear markets always come to an end, bull markets do not grow to the sky.

Terrorism came to the Western Hemisphere, with two instances in two days in Canada and with a hatchet-wielding Islamist whacking a cop in New York. In all three cases, justice was swift. Venezuela won a seat on the United Nation’s Security Council. An unmanned NASA-contracted rocket exploded on lift-off at NASA’s Wallop Flight Facility in Virginia. The craft, a commercial vehicle, was carrying 5000 pounds of supplies to the International Space Station. Fortunately no one was hurt. A Russian spaceship made the trip in its stead. Not so lucky were the pilots of SpaceShipTwo, a Virgin Galactic craft designed for tourists that fell apart over the Mohave Desert. One was killed; the other managed to parachute out, but was badly injured. The two incidents highlight the fact we have lost our leadership in space.  

The month was not easy for the Obama Administration. Mr. Obama, a narcissist by any measure, saw his popularity drop precipitously. Keep in mind, this was the megalomaniacal candidate who after winning the Democrat primaries in June 2008 said that his victory will be remembered as “…the moment when the rise in oceans began to slow and the planet began to heal.” This was the man who accepted his Party’s nomination six years ago on a Colorado stage bedecked with fireworks and Grecian columns before 75,000 people. Today, few candidates want to be seen with him. Alison Lundergan Grimes, in a debate with Kentucky Senator Mitch McConnell, refused for 40 seconds to answer the question as to whether she had voted for him in 2008 and 2012. From a rock star to pariah in six years!

Regrettably for Mr. Obama, the month was consumed with ISIS and Ebola, as well as the election. In Iraq, Anwar Province is again under siege by ISIS. An estimated 1200 Iraqis were killed by ISIS in October. The Kurdish city of Kobani in Syria, on the border with Turkey, remains under attack from the same group. When Mr. Obama belatedly decided to confront ISIS, the Nobel Peace Prize-winning internationalist was unable to gather a coalition that came close to the one put together by unilateralist George Bush eleven years ago. Since August, the coalition has flown about 4,100 missions, about one tenth the number flown over Kosovo over the same time frame.

Ebola made landfall in the United States, making it only one of eight countries in the world that has experienced this disease. In their bid to calm the public, the Administration and the CDC have intensified concerns because of the incompetency of their response. It apparently is alright for aid workers to return from West Africa without being quarantined, but not for U.S. soldiers. We are told to pay attention to the science, not the hype, but then doctors admit there is much about the disease they do not know. Should the rights of the individual take precedence over the welfare of society? Unable to come out with a coherent response, the Administration has fumbled along like the Abbott and Costello skit, Who’s on First.

On even years, the American people are subjected to the endless bloviating of political hacks and wannabes. October is the worst, as it is the month that precedes the election. The issues we face are critical, but the endless negativity that serves as campaigning is exhausting. Each side tries to wear out the other, hoping to hear the cry, “uncle!” Despite Democrats running for the House, Senate or governorships choosing not to have Mr. Obama by their side, they do like the money he raises. ( estimates that $3.7 billion will be spent this election year, about evenly split between Democrats and Republicans.) Seemingly tone death to polls and to those candidates trying to distance themselves, Mr. Obama has said that while he is not on the ballot, the election is about his policies.

Elsewhere around the world, Iran continued its march toward nuclear capability despite dire consequences for the Middle East. China continued to flex its muscles. North Korean President Kim Jong-un reappeared in public after a six-week absence. Vladimir Putin persisted in testing the limits of power. Yet, Mr. Obama’s Secretary of State insisted that climate change is the number one national security threat. An economically weakened Europe challenges the concept of the welfare state. The British Parliament took a non-binding symbolic vote recognizing Palestine. And a “senior White House official” called Israeli Prime Minister Benjamin a “chickenshit.” In response, the phraseology-challenged National Security Advisor Susan Rice said that relations with Israel have never been stronger, lending credence to the assertion that politicians are not truth-tellers. Forty-three people, mostly Nepalese Sherpas, died during unseasonal blizzards and avalanches on Annapurna, making it one of the worst disasters ever in the Himalayas. By month’s end the Hong Kong protests had petered out, but disharmony is simmering not far below the surface, with neither protestors nor Communist leaders giving in.

After losing thousands of relevant e-mails at the IRS, cyber attacks hit the White House and JP Morgan-Chase. The latter gave up addresses, phone numbers and e-mails on 85 million accounts, representing 76 million households. It prompted one government security advisor to declare, if you really want security don’t use computers.

Financial markets had a good October. After a dicey start, U.S. equity markets finished higher than they began. Even the Ten-year ended the month with a yield 15 basis points below where it started. The Dollar gained strength. But commodities fell, with oil down $10 and gold lower by $40. Globally, the economy seemed to be struggling; though in the U.S., preliminary GDP numbers for the third quarter were reported at plus 3.5%, better than expected. The Federal Reserve voted to end quantitative easing, but promised to keep Fed Funds at current levels. On the other side of the world, Japan expanded its program of quantitative easing.

In sports, the San Francisco Giants beat the Kansas City Royals in seven games to win the World Series. New York yawned. On the other hand Knicks’ fans cheered when their team beat the Cavaliers in LeBron James’ first home game since he re-joined Cleveland.

Death gathered in Ben Bradlee, famed editor of the Washington Post, best known as the man behind reporters Bob Woodward and Carl Bernstein when they were assigned to cover the Watergate break-in in 1972. He was 93. Oscar de la Renta, who was born 82 years ago in the Dominican Republic, died on October 20th. One of his last public appearances was at the fitting of Amal Alamuddin’s wedding dress at the end of September. The Duchess of Devonshire, Deborah Cavendish, the youngest and last surviving of the Mitford sisters, died at age 94. She lived at Chatsworth, her husband’s ancestral home, a modest dwelling of 297 rooms! Boston’s longest serving mayor, Thomas Menino, died October 30 at age 71.

Elsewhere at home, Hillary Clinton tried to one-up Elizabeth Warren: “Don’t let anyone tell you that it’s corporations and businesses that create jobs.” Accused cop killer Eric Frein was captured after a seven-week manhunt in Pennsylvania. Sergeant Andrew Tahmooressi was released on Halloween, after seven months in a Mexican jail. A popular, but disturbed young man of American-Indian heritage shot five students in a Marysville, Washington high school cafeteria, before taking his own life. Unlike other high school shootings that showed elements of randomness, this one seemed deliberate and pre-planned. The shooter, Jaylen Fryburg, had invited five friends to have lunch, and then point blank shot them. Three of his victims are now dead. The month ended with the tragic hit-and-run deaths of three teen-age girls who were trick-or-treating in Santa Ana, California.

Depending on how tomorrow’s elections turn out, either Democrats or Republicans will celebrate October as a “happy” month, full of “love and song.” The other will not.