The Progressive Ensign

insights and analytics to build an economy that works for all

Recovery Friendly Companies Rebuild Labor Force

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Photo: mswcareers.com

One of the major challenges today in building our labor force participation rate is the millions of young people we are losing to drug addiction.  New Hampshire is leading the way with 70 recovery friendly companies  participating in a program for recovering drug and alcohol addicts to begin working by receiving training and then a job with decent pay. These workplaces are willing to accept employment gaps and brushes with the law.  The firms view addiction as a medical problem – like maternity or surgery.  Their work environment openly encourages discussion of addiction and paths toward recovery offering mutual support for recovering employees.

Work provides a sense of self-worth and self-respect to people on a recovery path.  Plus, addicts join a community, ending the isolation they feel from their substance abuse.  In a supportive community they can stay sober and learn about the lifestyle changes they need to make to stay sober. There are about 22 million Americans in recovery according to U.S government data.  Yet, with a low 3.7 % unemployment rates 9.2 % of workers in recovery are involuntarily unemployed notes theRecovery Research Institute at Massachusetts General Hospital.

New Hampshire experienced the third highest rate of overdose deaths in the U.S. in 2016.  Taking the challenge of recovery head on, the state now has over 60,000 recovering addicts working and a state unemployment rate of 2.7%.

“Most thoughtful business leaders want to do the right thing by their employees when it comes to addiction, and to [addiction in] their families,” observed KeithFlynn, the spokesman for the New Hampshire Business and Industry Association. The idea for the came from Gov. Chris Sununu when he was operating a ski resort where one of his employees had an addiction problem.  Instead of viewing the addiction as a reason to fire the employee, he developed a program of recovery and continued work. When Sununu become governor in 2016 he set about developing the program now in place.  The program helps 60,000 recovering substance abuse users and their families, while opening up a new group of prospective workers to New Hampshire businesses.  It is time that we looked at addiction as a medical problem instead of a criminal one, and developed programs nationwide to turn the lives of addicts around while increasing the labor force participation rate.

David Sawyer, a PersianGulf War veteran, summed up his experience at a New Hampshire recovery friendly company this way,

“Is it finding work through recovery, or finding recovery through work?” he posed a question, continued by noting “I don’t think recovery would have been so successful if I hadn’t been working.”

Drug Companies Want a $4 Billion Break: No Way!

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: youtube.com

Major drug companies are lobbying Congress to reduce the $4 billion increase in costs due to raising the discount for seniors purchasing drugs at the ‘donut hole’ level in Medicare Part D to 70 % from 50 %. The provisions for an increase in the discount was included in a spending bill passed by Congress last February.

Pharma companies and major corporations with billions of dollars stashed overseas said that if tax rates were cut on dollars transferred to the U.S they would raise wages, increase R & D spending and reduce prices.  Most companies did not deliver on their promises or benefits to patients either. Instead, they increased the size of their stock buybacks by 4 to 5 times in the case of the largest stock buyback company, Amgen.

Sources: SEC, The Wall Street Journal – 12/6/18

Only two of the top ten companies actually reduced share buy backs since January of this year.  Corporations overall are expected to complete over $1 trillion of stock buy backs by December 31st Goldman Sachs estimates.

Over a dozen Democratic members of the House ofRepresentatives sent letters to five top pharma companies with data showing new increases in drug prices while increasing share buy backs.  The drug industry responded that they were reducing prices, increasing R & D spending and raising employee wages.  Merck, CEO, Kenneth Frazier said in a reply, “We view the legislation (tax cut) as providing us with more flexibility to deploy capital in support of our strategy to invent new medicines that address key unmet medical needs, ultimately benefiting patients.”  The reality is that prices for the most popular drugs are still going up.

AbbVie raised the price of Humira by 9.7 % in January the Democrats pointed out in their letter to the firm.   Inflation for this past year is 2.4 % that drug increase is nearly 4 times the rate of overall consumer price increases in the U.S. economy. AbbVie sent a reply to the Congressmen outlining many programs using their tax cut funds including: a $1000 salary increase to non-executive employees, plans to invest $2.5 billion in capital projects in the U.S. over the next five years, $100 million healthcare and housing for people in Puerto Rico, an $100 million to the Ronald McDonald House to fund lodging for pediatric cancer patients and their families.

Next Steps:

Drug costs hit seniors particularly hard because they need the medication, and they are on fixed incomes.  Drug companies have to do better by ending what the SEC called, “stock price manipulation”,  before the Safe Harbor policy in 1982 allowed stock buybacks. Billions of dollars are wasted to goose the price of stocks to benefit executives and big investors.  Investors are misled by earnings reports using fewer stock shares to compute earnings per share, often used to assess company performance. Patients are hurt by price increases, Humira costs patients $50,000 per year for the standard treatment if they have no insurance coverage.  Stock buybacks by pharma companies must stop, the price gouging of patients and insurers needs to end.

Another economy that drug companies should adopt is to end direct-to-consumer advertising of prescription drugs.  Over 150 countries do not allow prescription drug advertising, only the U.S. and New Zealand allow advertising directly to patients to create “pull” sales from patients requesting a drug from their doctor.  According to Kantar media, drug manufacturers spent $6 billion on direct to consumer television advertising in 2017, a 64 % jump from 2012. The billions being spent on DTC advertising are better spent on reducing drug prices. We applaud the moves by AbbVie in raising employee salaries, donations to Puerto Rico and Ronald McDonald house, these are excellent steps.  Many drug firms have foundations that offer patients with low incomes a way to obtain their medicines for free or little cost.  The difficult aspect of most of these drug-for-free programs is they require large volumes of paper work, with major time delays when the patient needs to the drug immediately. Drug company executives need to see the light on what is happening, the price gravy train and waste of stock buyback funds gleaned from patients needs to end.   Why wait for legislation? We appeal to CEOs – make the right moves now. See that taking responsibility for solving the cost crisis you have created will be far better for your firm, patients and insurers. You may get a solution you don’t want if you wait for Congress to pass legislation.

What Ever Happened to Integrity and Service In Our Leaders?

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Photo: wikipedia

Our 41st President, George Herbert Walker Bush passed away quietly at his home in Houston this past evening. He was 94 years old. His legacy is multifaceted yet in contrast to today’s political discourse his integrity stands out. House Speaker Paul D. Ryan’s described Bush as “great in his character, leading with decency and integrity.”  Integrity defined by linguists focus on two character elements: adhering to a set of moral principles and character definition.  Integrity is seen in leaders who are humble enough to continuously learn from their mistakes, listen to others and are honest to themselves and others.

Former President Barack Obama noted about President Bush’s life that he was:

a patriot and humble servant with a legacy of service that may never be matched, even though he’d want all of us to try.”

“While our hearts are heavy today, they are also filled with gratitude. Not merely for the years he spent as our forty-first President, but for the more than 70 years he spent in devoted service to the country he loved.”

Bush demonstrated a level of dedicated service to his country that few have matched. He was the youngest Navy aviator to fly in WWII.  Shot down over the Pacific he was rescued. Later he continued a career of public service in the House of Representatives, Ambassador to the U.N., U.S. Envoy to China, Director of the CIA and Vice – President among many positions he held in 70 years of public service.

His service did not stop at his one term presidency.  One unusual partnership developed 20 years after his presidency with the man who pushed him out of office, Bill Clinton.  In 2004, Bush’s son George W. Bush asked his father and Clinton to tour the devastation after a huge tsunami hit Sri Lanka, Indonesia and Thailand.  They discovered during the two week tour how much they had in common including an unlikely support of several education programs. After Hurricane Katrina in 2008 they two joined together in raising over $130 million in relief.  When the program eventually was not needed, the funds were distributed evenly to the two men who then gave them to charities in the U.S. Gulf coast region. Bush observed on his relationship with Clinton that “politics does not have to be mean and ugly”.  Seems like light years ago from our perspective today.

Reflecting on the recent death of another great Navy flyer, Senator John McCain, it seems impossible to miss that with the passing of these two men our country is losing not just the people but the values of service and integrity they exemplified.  We hope during this coming week of memorials and remembrances that George H.W. Bush’s character traits of selfless service, integrity, honor and a humble love of all people is reborn, not lost on this generation.

GM: Case Study to End Share Buy Backs

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: GM Lordstown plant to be closed – gmauthority.com

Yesterday, GM announced a series of plant closings and layoffs of 15,000 workers in North America.  GM attributed the need to shift its focus to electric car development, trucks and SUVs that consumers were buying, as sedan sales are falling.  Actually, auto sales worldwide have been dropping for the past year.

Source: Bloomberg – 11/27/18

Jesse Colombo, analyst at Clarity Financial notes that while GM’s announcement focused on electric car development the plant shutdowns and layoffs really were driven by of slowing auto sales.  The auto market has been shifting rapidly with the development of driverless cars, ride sharing reducing the need to own a car, and urbanization causing policy makers to fund more public transit. The auto maker announced that it will end production of the Chevy Volt electric sedan with sales falling short of targets. GM has targeted gig economy drivers for ride sharing companies like Uber and Lyft by offering an on demand service for the Chevy Volt at $225 per week in Austin.  It is not clear what will happen with this on demand service marketing beta test with Volt production being halted.  GM has partnered with Lyft, and made a $500 million dollar investment in the ride sharing company 2 years ago.  Thus, GM has made some investments in key new markets and technologies, yet is behind in adjusting to sedan sales which fell by 11 % in third quarter.

At the same time the auto market is undergoing rapid change, GM executives have been taking care of themselves as a first priority.  Wolf Richter, editor of the Wolf Report blog reports that GM spent $13.9 billion in stock buy backs since 2014.

Sources: Wolf Richter, Wolfstreet.com, Y- Charts, Marketwatch – 11/27/18

GM stock purchases took shares off the market to reduce supply, while expecting stock demand would move the share price up.  However, as Richter notes GM share price has actually fallen 10 % in that four year period. So, much for boosting the price of shares to pad the executive stock compensation plan.  Instead of investing in new technologies, research, new plants, employee training, increasing wages and other key transition programs GM completely wasted $13.9 billion dollars.  Poor management judgement is now causing 15,000 workers to lose their jobs in the U.S. and Canada.  While we will not know over the last four years if good business investments would have prevented all the layoffs it is certain the economic damage to Midwest and Canadian communities could have been significantly mitigated.

Next Steps:

Goldman Sachs estimates that S & P 500 corporations will complete $1.0 trillion dollars in stock buybacks this year.  One trillion dollars will be wasted by U.S. corporations as productivity investments have lagged over the past 5 years, and average real wages have been stagnant for the 80 % in income since the Great Recession.  As the GM example demonstrates, besides hurting employee wages, making U.S. companies less competitive and inflating stock prices now workers are losing jobs due to executive mismanagement and myopia on stock price.

Prior to 1982, the Securities Act of 1934 held that stock buybacks were a form of ‘stock price manipulation’ and were not allowed by the SEC.  This policy was overturned by an E.F. Hutton executive, John Shad as SEC Chairman appointed by President Reagan.  He created a ‘safe harbor’ policy where corporations could purchase their own stock, only a certain times during the trading day, with disclosure quarterly and blackout periods prior to earnings reports. Corporations have used buy backs since then but stock buy backs took off in 2015 to $695 billion and almost doubled to $1 trillion for 2018.

We recommend an end to the stock buyback safe harbor provisions and a return to the pre-1982 policy, management in many corporations has lost their bearings on why the company exists – first priorities being workers, their families, customer communities, society and the nation not their own compensation plan. Making the corporation profitable and valuable to shareholders is a means to achieving our societal goals of a decent wage, quality housing, and the ability of families to support their children.  In October, we posted an analysis on how major corporations like Boeing, GE and American Airlines underfunded their pension plans while executing  billions of dollars in stock buy backs. Executives need to take responsibility for full funding of all pensions not wasting money on stock buy backs. It  is time with so many middle class and economic investment needs that corporations receive a direct SEC policy shift to end stock buy backs.

Truth Has Lost It’s Most Important Defender – POTUS

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: spjla.org

Just before Thanksgiving, the FBI briefed the president on what actually happened to Washington Post columnist Jama Khosshoggi, that the Crown Prince of Saudi Arabia had to know and give the order for his murder in the Saudi Turkish Consulate.

Instead of defending the constitutional right of freedom of speech and the press and those that work so diligently at revealing and publishing the truth – POTUS defended the brutal killing of Khosshogi.  In a wholly greedy, self-serving, money grabbing (as Dickens would put it) way he talked about how important Saudi oil was to the U.S and for the kingdom to keep buying U.S. arms – killing thousands of innocent Yemeni people along the way.

The Truth lost its most important defender today.  We all lost out to geo politics and power in its most naked way.  The message being sent by our President is: “as long as you keep paying us and buying our stuff you can kill anybody you want and we will look the other way, including journalists”.  Historians will look back on this event as the low point for Truth in this country and the defense of the Press.

Our founding  fathers knew that a strong press was crucial to keep government in check from overreaching with its power over the people.  Jefferson and Madison believed in the American experiment that a well-informed citizenry will in the end make wise decisions about who and how they should be governed.

This president with all his demagoguery, scapegoating, bullying and no respect for the truth has taken the moral level of our country to a new low – in our eyes and the eyes of the world. He passed the 5,000 mark in falsehoods, misleading statements and just plain lies as recorded by the Washington Post this past September.  He has actually increased the number of falsehoods as he was campaigning for candidates he backed to an average of 32 per day from 8 per day up to his 601st day in office.

Journalists are under attack around the world, in the first 6 months of 2018 there has been 47 journalists killed worldwide almost the same number as for all of 2017.

Source: Statista – 2018

With nearly double the number of deaths through June 2018 journalists have a target on their backs.  Our POTUS did not help the situation by sending the message that dictators can kill journalists and there is no consequence.  When worldwide we a renewed focus on the truth, instead we are giving a green light to the creation of lie after lie.

Our national leaders need to be defending journalists throughout the world and in the U.S in particular because they are the investigators, researchers and messengers of truth.  Truth is the fresh air of democracy.  Our democracy cannot survive as a representative government when the truth and those who find and express the truth are under attack.

Congress and our national leaders need to take action to show the Saudi government that we want a relationship with the nation, not their present brutal leader, and the Saudi people.  We must defend the Truth, Liberty and Freedom wherever it is under attack in the world.

Ignorance Over the Common Good? Blind Governance is Dangerous!

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Photo: washingtonpost.com

Something’s not right.  My grandson is not playing soccer and POTUS nominates a coal lobbyist to lead the EPA?

We all feel it.  Right in the pit of our stomach, here in Northern California, while we are being hurt by the effects climate change.  While not completely to blame, the Butte County fire storm was compounded by global greenhouse gas effects and as a possible cause a spark from an electricity wire.

Something is not right.  As we experience in the Bay Area our eighth day of unhealthy air from the Camp Fire in the Sierra foothills. Those with lung diseases are shut away in their homes, people are not going out. Businesses that depend on foot traffic are seeing losses of 10 – 20 %. Football games like the Big Game, between Stanford and California are being rescheduled to December 1st – the first time that game has been rescheduled since the assassination of President Kennedy in 1963. Local universities and colleges are closed for classes: Stanford, University of California, Santa Clara University, De Anza College and many secondary school districts.

Yet, our President nominates a coal lobbyist to head up EPA?  The mission is in the name Environment Protection Agency, Not Environmental Destruction Agency.  Coal is a fossil fuel contributing to massive amounts of gas emissions warming our earth. Heating the planet every day.  Here is the path we are on toward 1.5  degrees C and eventual extinction of the human race:

Sources: The Wall Street Journal, The Daily Shot – 11/15/18

My grandson’s soccer game was cancelled last Saturday and will be cancelled again tomorrow due to unhealthy smoke in the air.  Is this the new normal?  We don’t have to support this heresy destroying our environment, our families and our lives anymore!

Why in the world is a coal lobbyist heading up EPA?  Something is very wrong with this picture. Maybe the House Progressive Caucus has it right to camp out at Nancy Pelosi’s office the other day demanding climate change legislation.

We have accepted the status quo too long on climate change.  Industry priorities must come second to clean air, water and the planet period.

The sheer ignorance, lack of wisdom and understanding of science is killing our people, making life a struggle for thousands, shortening life expectancies and reducing the sales of legitimate businesses – all so coal companies that should be shifting their business from fossil fuels to renewables have not made the transition.  We should not be paying for coal company executive mistakes.

We need to be asking at what cost do we keep coal? It is clear the cost is too great.  We need to quit accepting the platitude  ‘it saves jobs’ and replace it with we want ‘live saving jobs’ for all. We can’t accept this environmental spiral downward for the ourselves and our planet. We must return to the Paris Climate Change agreement, renew investments in renewables, focus on clean jobs training and development.  Get on with it now, future generations and our planet are depending on us to make sound decisions and not accept blind governance one day longer.

Rents Need to Be Stabilized Now – An Innovative Approach

 

Photo: newsregistrysf.com

Since 2007 there has been a 20 % increase in the number renter households while the number of owner – occupied households has barely increased.  Why?   Right after the Great Recession home lending took a nosedive as foreclosure homes were worked off the inventory and lending standards were tightened.  Builders focused on construction of multi-unit buildings where the market was more lucrative.  Banks stepped back from mortgage lending, now the federal government backs about 70 % of all home loans.

Sources: The Federal Reserve Bank of St. Louis, The Wall Street Journal, The Daily Shot – 10/24/18

So, prospective home buyers saw few opportunities for them to buy homes, while wages for the 80 % in income were stagnant they had no choice but to rent.  When the economy started to recover builders focused on high margin, luxury homes that were priced why out of the budget for first time buyers.

As cities focused on bringing more jobs into their business center building homes or apartments were a secondary priority because businesses provided more tax revenue.  By 2011,  there was a 37 % increase in the number of households paying more than 50 % of their income in rent.  There were almost 11 million households paying more than 50 % of their income in rent, that is a staggering number of people who are financially squeezed.

Source: Joint Center for Housing Studies, Harvard University – 2016

While the economy was taking off inflation increased much faster than the price of homes.  Wages were not keeping up with the rate of home price increases which averaged about 6.7 % per year. The divergence between wages and  home prices only continues to widen to the highest level since 2007.

Source: The Federal Reserve Bank of St. Louis – 2016

Between 2000 and 2018 the rate of inflation was 2.12 % versus 3.09 % so the greed factor for landlords was about 45 %.  Why are rents moving up higher than the rate of inflation?  Lack of affordable alternatives is one reason.  In places like the San Francisco Bay Area and many metro areas, there is a huge jobs versus housing imbalance. In cities like Palo Alto there is a 20 to 1 jobs to household imbalance. With little competition in under housed growing metro areas landlords can charge any price they want. There just is not enough competition to keep an apartment building owner from raising rents.

Lack of homes means renters don’t have an alternate. Landlords have control because there  are no other cheaper units nearby and the buying a home alternative is not an alternative for most working class folks with the home affordability index at its worst level in 8 years.

This lack of competition economists don’t seem to understand when rent price controls are proposed.  When there is little competition apartment owners can just keep raising rents because there is nothing stopping them from gouging the renter.

Next Steps:

Most rent initiatives usually require a cap on rents as a way to deal with the problem. The problem with this approach is it penalizes the efficient property managers with the inefficient and greedy ones. We suggest a more innovative approach to tax the behavior we don’t want and give incentives for the behavior we do want.  So if a landlord raises the rent above the normal cost of housing index by more than 1 % for a county then property taxes on the amount over would increase by 2x.  This takes away the benefit raising the rent too high, the money won’t go to the landlord it goes to the city.  If the apartment owner keeps the rent below the cost of living index by 2 %, they would receive a lower property tax by 4 % for that year, the money goes right to his pocket for running an efficient multi-unit business.  In terms of building new units, these models can be used to come up with reasonable profits to attract investors while placing the focus on high quality property management.

Purchasing a home is crucial to providing competition to landlords.  We have proposed in the past that the federal government provide incentives for builders to build less expensive homes with smaller square footage for the working class.  Cities need to set aside land for homes, not businesses and quit being so greedy about the tax revenue they would get from a potential business taking the land.  We need our leaders to make it a national priority for all families that want to own a home to be able to purchase a home on working class wages.  When people own homes, they improve the home and the yard, the neighborhoods look better and values go up.  People care more about their neighborhoods, schools and local services than when they rent an are likely to move somewhere else if the rent goes up.

Our Economic Security is Threatened By Data Breaches

Image: npr.org

Six months ago the EU General Protection of Data Regulation (GDPR) was implemented setting major fines if user data was not adequately protected.  The GDPR required that users be able to ‘opt in’ for their use of their data – which is why users see cookie permission screens when they access a web site.  The regulation gives users primary control over their data, and where it is stored.  Information on a user must be stored in a non-identified manner.  Breaches must be immediately fixed and reported within 72 hours.  Companies are required to have a Data Protection Officer person who is responsible for GDPR enforcement and support to users. Users can require that their data be erased at any time. Individuals can request a portable copy of their data as well. Violators of the GDPR can be fined up to 20 million Euro or 4 % of their annual revenues.

Seer Interactive has surveyed both EU and U.S. sites and found that EU sites were much more secure than U.S. sites.  Using simple Google index commands experts were able to glean usernames, addresses, phone numbers, and dollar figures of purchases or donations.

Source: Statista – 2018

Data breaches reached a peak in 2017 at 1,579 incidents with over 178 million records accessed.  A super incident occurred at Yahoo with over 1 billion records accessed in 2017.  In 2015 Experian, suffered a data breach exposing 15 million records. About 1 year ago, Equifax was hacked exposing over 143 million user records including social security numbers, addresses, phone numbers and bank account information.  Hearings were held by Congress but nothing happened. Except that Equifax tried to fix the problem and eventually gave into offering a free account freezing service after major backlash at charging for the service.  Identity theft is a huge issue it is the most common type of data breach at 59 % of all data incidents. There are reports of a new trend in identity theft by perpetrators sending  a ransom email after an account has been hacked showing a user’s account and password, then threatening to post private information unless a major sum is not transferred to a Bitcoin account immediately.

Next steps:

Senator Mark Warner – (D-VA) declared after the Equifax incident, “It is no exaggeration to suggest that a breach such as this — exposing highly sensitive personal and financial information central for identity management and access to credit — represents a real threat to the economic security of Americans,” We agree data breaches of the Equifax and Yahoo magnitude are a real threat to the economic security of all Americans.

So, what has Congress done about making corporations running the Internet accountable to users for their lack of data protection?  Nothing. Though two Democratic senators have tried to get legislation passed to protect users.

Senator Elizabeth Warren – (D-MA) and Senator Warner introduced legislation in January of this year to hold credit reporting agencies accountable for data breaches and user data protection.

The bill, called “The Data Protection and Compensation Act”  would hold credit reporting agencies (CRAs) accountable for safeguarding all consumer information.  The bill establishes oversight by the FTC on cyber security at CRAs.  In addition, when breaches occur penalties are awarded $100 per consumer and an additional $50 per consumer personal identification record exposed.  In the Equifax case, the penalty would total $1.5 billion. The FTC is instructed to use 50 % of the award to compensate consumers who were victims of the breach.  In addition we believe that provisions should be inserted in every User Agreement requiring that the service provider be accountable to the user, make good any harm done and report directly to the user that their account has been hacked within 24 hours.

We do have a new House of Representatives being sworn in this January, where Democrats hold a majority, so it is possible that transforming legislation like the Warren – Warner bill could be introduced.  Yet, the Senate looks to be controlled by the GOP next year so any likelihood of passage with President Trump in power is nil.  Yet, we need to keep this issue in front our our political leaders and continue the national discourse because today Internet corporations are too complacent and will continue to be until penalties have teeth to wake them up to the priority of protecting user data tightly.

Voter Turnout Highest in 100 Years As Citizens Start to Care

Photo: daytondailynews.com

Last weeks’ midterm election had the highest level of eligible voters participating in 100 years.  We need to go back to 1914 to find a comparable time when almost 50 % of the eligible voters did vote.  The turnout was higher than the presidential election of 2016 by 13 %.

Sources: The Wall Street Journal, The Daily Shot – 11-12-18

The remarkable shift is in large part due to the Trump presidency making clear that nothing short of the character of our democracy is at stake when we make choices about who our House and Senate representatives will be.

Will we go back to policies borne out of the 1930s toward nationalism, isolationism and trade wars (which led to WWII)?  Or will we move ahead, building a global community, where nations focus policies on a partnership of win – win for all, in peace.

Yet, as the ballots have been counted (though some continuing to be counted and recounted in Florida and Georgia), the political rhetoric between the newly empowered Democratic House and POTUS has started.  Hurling charges and counter charges and threats of investigations right and left.

In spite of the unacceptable behavior our politicians in Washington citizens have turned out in mass to make their concerns known with an ever more diverse House and a few new leaders in the Senate. With a diverse electorate beginning to make its voice known we can begin to build a consensus around the common good.  It is clear that we can’t move our country ahead in many areas including an economy that works for all if we don’t have people engaged.

While campaigns are often heated, with more heat than light on both sides of an issue, at least we see that people care. When people care, and get out and vote they are staking a claim in the future of our country.  That is a good thing and makes us hopeful for the future, even as torturous as it maybe to get to a better place for all in our democracy.

‘Facts’ Can’t Be Ignored in XL Pipeline Decision

Photo: commondreams.org

In a win for all those interested in using facts, science and in depth analysis to make policy decision, a federal court held in a 54 page decisions that the Trump administration had disregarded the facts prepared in a 14 volume report by the Obama administration in 2014.  In January of 2017, President Trump executed a memorandum to approve the XL pipeline project and move it along.  The State Department which has jurisdiction in the pipeline project because it crosses the US – Canadian border surprisingly used the 2014 findings to justify its conclusion that the pipeline environmental damages were ‘inconsequential’. The court held that the Trump Administration had provided no supporting evidence for their argument.

Judge Brian Morris, sitting on the Montana federal court found the government must complete a through, fact based environmental review before approving the project.  There is long standing environmental and procedure law dating back to the 1970s which federal judges have found the GOP administration trying to short-circuit to make a policy shift toward fossil fuel development. Judge Morris provided additional related findings:

  1. The State Department is issuing the approval failed to analyze the climate change impact of greenhouse gas emissions.
  2. The Department acted without complete information on the impact of the project on Indian territory and culture.
  3. The Department failed to use a ‘fact based’ set of reasons for the reversal of previous law and policy of the previous administration.
  4. The Department needed a ‘reasoned explanation’ for its finding that their were no climate change impacts from the project.

The environmental review is likely to take at least a year, the Administration is likely to appeal the ruling.

Let’s step back here a moment, the project taps thick oil from Canada oil field and pipes the oil to refineries in Oklahoma and the Gulf Coast.  Why do we need this project?  We are trying to reduce green-house gas emissions.  We know that the latest UN report on climate change estimates that within 12 years the planet will be 1.5 degrees Celsius hotter if present climate regulations and changes are implemented.  Yet, even at that level the impact would be monumental causing more damage to the planet with hotter oceans, intense rainstorms, drought, wildfires, and rising seas engulfing valuable shore line and displacing millions of people. We are already experiencing, more category 5 hurricanes than ever, wildfires that create their own windstorms racing through cities nearby in seconds, coastal areas flooding on a continuous basis and the list goes on.

Sources NRDC, The International Energy Agency -2013

Experts predict significant degree increasing impacts based on Keystone plans as outlined.  If Keystone was implemented at the 4.6 million per barrel level by 2030 there would be a 6 degree global impact. This level of global warming can’t be justified compared to the UN findings.

We applaud legal efforts of the Sierra Club, Natural Resources Defense Council, The Indigenous Environmental Network and others who focused their efforts on protecting our planet and our lives.  Maybe Jefferson and Madison’s faith in the people of this country ‘in a reasoned’ manner based on truth and facts making decisions will win out over corporate inertia and politicians that are bought off by corporate campaign contributions.

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