Category: Solution

Wood Project Gives Ex-Offenders New Lives

On June 14, 2018

In Climate Change, Environment, Ex-Offender Rehabiitation, Jobs, Low Income Finance, Solution

(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.)

Photo: USA Today

The US Forest Services has kicked off a new program to reclaim urban lumber from abandoned homes by using workers from non-profits who had criminal records. The innovative program attacks two major problems in urban centers like Baltimore, where 70 % of criminal offenders are returned to prison within 3 years, and there are over 16,000 abandoned structures in the city. Quite often the abandoned structures are hives of prostitution, drugs and criminal activity.

Morgan Grove, Urban Wood Project leader, says “It’s about air quality and water quality. It’s also about reducing crime and helping people move forward”. She continued by declaring, “At its core, it’s really still maintaining the mission of revitalizing that the Forest Service has had since the agency was started in the early 1900s.”

The following table outlines the linked issues of high crime, abandoned buildings, high prison rates and the health of communities:

Sources: Justice Policy Institute, Prison Policy Initiative – Maryland, USA Today – 6/11/18

It is interesting to note the issues Baltimore city officials face in reclaiming their communities to return them to being healthy places to live, environmentally, and to redeem the people in the community to a productive life. We see many of these same issues in the rural regions of our country, that have been left behind by losing jobs to other offshore sites, reduced education opportunities, poor health, drugs and slow Internet infrastructure.

As a country we are missing the opportunity to rebuild lives, the environment and the economy unless we support innovative programs like the Urban Wood Project.

Ocean Cleanup Takes on the Plastic Environmental Challenge

By Patrick Hill

On May 31, 2018

In Environment, Pollution, Solution

(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.)

Photo: The Ocean Cleanup

We have noted in recent discussions the environmental disaster lurking in our oceans from tons of plastic. Now there is a company that is doing something about this problem with unique technology to pull the plastic out of the ocean. The non-profit, The Ocean Cleanup Foundation headquartered in the Netherlands with its first operations center in Alameda, California in the San Francisco Bay has developed an innovative passive system with a floater, a solid screen floor and sea ancho causing the system to move slower than the plastic and guide the debris into a collection system.

The Ocean Cleanup prototype has been tested over the past several months in the ocean outside the Golden Gate. The environmental group plan on launching the first operational system in June to begin removal of plastic in the Great Pacific Garbage Patch in the Northern Pacific. Founder, Slat Boyton, estimates their system will collect up to 50 % of the garbage or 40,000 metric tons can be collected in 5 years.

Sources: NOAA, Woods Hole Grant, BBC – 2014

It is critical to clean up the existing plastic as it takes 450 years to degrade completely and prior degrading can sometimes be in micro plastic pieces easily stuck in the digestive systems of ocean wildlife.

Ocean Cleanup plans on bringing the plastic back for recycling and sale to plastic reuse companies. While recycling economics may not allow for a break even business, the UN estimates the value in damage to the marine ecosystem at $13 billion. Regardless of the cost, plastic pollution at the magnitude it is now destroying wildlife, will eventually cut a key link in the life food chain and hurt us all.

We are pleased to see Boyton and his team take on this huge environmental threat to our oceans, the wildlife that lives there and our own existence in the end.

Activists Push Environmental Corporate Reform at McDonalds

By Patrick Hill

On May 24, 2018

In Corporate Nation State, Corporate Reform, Environment, Solution

Image: thepeoplesconvention.org

We believe corporate behavior will most likely only change when shareholders demand change through corporate reform. While some farsighted companies are moving to all sustainable materials for their packaged goods McDonalds has been slow to make it happen.

McDonalds says it is willing to move to eliminate plastic straws by 2025 – seven years from now. That timeframe is just too late. There are plastic straw substitutes like biodegradables are available now made from starch, corn or bamboo. The giant restaurateur has been dragging on making shift. Plastic in our oceans is a huge problem, destroying habitat for ocean creatures and fouling their food sources multiplying each year by 8 million metric tons.

Source: The Ocean Conservancy – 5/24/18

We applaud the plastic straw proposal by SumOfUs, corporate reform activists, obtaining 450,000 signatures to qualify for a shareholder vote.

Corporate decision making must continue to be monitored, and when a decision is making our planet more uninhabitable it must be changed to make our life here sustainable. The reality is that those profits are not going to matter in a planet where our environment is destroying the world we live in placing people world-wide in jeopardy of shortened life spans.

Unfortunately, today the plastic straw proposal only received 8 % of shareholder votes. The vote of major shareholders and institutions against the proposal shows there is still work to be done to in corporate reform. We are pleased to see major institutions, like Blackrock, where CEO Larry Fink has demanded that companies they invest in get more engaged in environmental issues and ‘how’ they make money not just make money. When CEOs at major companies see that it is in their interest to move the paradigm of environmental protection ahead then we will know that they are listening to us, the people, rather than Wall Street. Corporations and the wealthy control Congress so we need to go directly to Corporate Nation States to bring about real change.

Bi-Partisan Support to Cut Drug Costs – Stalled by Brand Drug Companies

By Patrick Hill

On May 17, 2018

In Drug Pricing, Solution, Stock Buybacks

Image: freopp.org

In an unusual development in the Senate, senators from the Republican side like Sen. Ted Cruz – (R- TX) to Democrat Sen. Diane Feinstein (D – CA) agree that the process of converting brand name drugs to generics needs to be sped up and reduce drug costs. With 23 co- sponsors the CREATES Act would require brand name drug companies to provide large enough quantities of samples of their drugs to generic manufacturers in a timely manner and that are safe. At the present time brand name drug manufacturers often do not supply the quantities necessary or block access due to safety concerns – unnecessarily delaying the conversion of a brand name drug to a generic. The bill provides a remedy for generic manufacturers by allowing them to sue the brand name manufacturers for not providing the necessary samples.

Sen. Patrick Leahy (D-VT) a bill sponsor, says the Congressional Budget Office estimates the bill would save the federal government about $3.8 billion over a decade in drug costs. The Congressional Budget Office and the Generic Pharmaceutical Association estimate a total savings of $250 billion in 2013 by using generic drugs versus brand name drugs.

Source: CBO, GPha – 2014

As we have noted before drug companies are running their companies focused on making unreasonable levels of profit through $50 billion stock buy backs to increase executive and shareholder compensation and paying $1 billion a year in direct advertising to consumers for prescription medications. If the drug companies allocated these wasted funds toward price reduction we would see a dramatic reduction in drug prices. The CREATES Act is a good bi-partisan way to at least begin to tack down agreement on drug price reductions in a fair way.

California Leads with Solar New Home Requirement

By Patrick Hill

On May 10, 2018

In Climate Change, Environment, Renewable Energy, Solution

Photo: npr.org

The State of California is the first state in the country to require all new homes being built beginning in 2020 have solar panels. The requirement applies to all single family and condo units up to three stories high. The additional cost is estimated to be about $9, 500 added onto one of the highest median prices in the country at $565,000.

Some observers would have preferred that the State focus on building large solar farms rather than residences since the residence approach means that utilities have to deal with power coming up line that may be difficult for them to handle. Yet, residence based solar panel electricity provides for a more distributed system, rather than a centralized one offering more redundancy, options for homeowners and great self-reliance.

The residence based electricity option basically poses an alternative to central line based power utilities. Essentially with competition from residences it will spur utilities to cut costs and see how to move into renewable energy quicker to take advantage of lower costs for solar power.

Sources: California Energy Commission, The Wall Street Journal – 5/9/18

The shift to renewable energy sources is crucial to meet objects for climate change as endorsed by 175 countries in the Paris Climate Accord. When we think about the consequences of not meeting the challenge of climate change it is unthinkable how hostile our planet will be to live on – eventually making it uninhabitable.

We call for a national initiative to make renewables the standard for all new homes. As we have noted almost 60 % of the people want to set the environment as a priority even if there is an economic cost. if the federal government won’t do it then the top 20 new housing states should implement the plan and make renewables as the de facto approach toward home building.

To assist first time buyers, we recommend the State of California offer for homes under $400k an energy credit to be used as a credit on families’ state taxes to help out with the added solar expense added onto the price of a new home.

Let’s get the country moving toward renewable energy as our standard way of building communities and enjoy a climate that we all can live in.

Gillibrand – Khanna Postal Bank Bill Helps The Underserved

By Patrick Hill

On May 3, 2018

In Consumer Protection, Low Income Finance, Solution

Image: Campaign For Postal Banking

As payday lenders make low cost loans to minorities and the poor at exorbitant interest rates a possible solution is at hand. Senator Karen Gillibrand – D- NY and Congressman Ro Khanna – D- CA 17 and others have introduced a bill to provide checking accounts, savings accounts and low cost loans to underserved neighborhoods in cities across the US. Many community banks and large city banks left these neighborhoods in the 1990s when banking deregulation occurred for more profitable locations. We have seen the present GOP Administration pander to payday lenders by relaxing consumer protection regulations that cap loan rates and require full disclosure for loans with interest rates of 400 % to 1200 %. Fourteen states of have outlawed payday lenders entirely. There are 37 million the adults that do not have a bank account:

Source: Pew Charitable Trust – 2016

The Postal Banking Bill would offer loans up to $500 at T-bill rates of 1.65 % clearly targeting the payday lender market. The Postal General in a report on the bill viewed that rate as too low and will probably need to be raised to 25 % to handle possible defaults. According to the United Nations Postal Union 87 nations provide checking and savings accounts to over 1 billion customers, though not that many offer low cost loans.

We need to serve those that have been left out of the economic mainstream by offering reasonable low cost financial services with inexpensive loans – not making our low income population a target of loan sharks.

California Attacks Middle Income Housing Crisis

By Patrick Hill

On April 26, 2018

In Housing, Solution

Photo: St. Vincents Housing

The California legislature has introduced a bill to make low income housing tax credits available to housing agencies for middle income housing. Assemblyman David Chu, D -San Francisco, said “During the housing crisis middle income Californians are in a very tough spot, “he noted that “They don’t qualify for low income affordable housing, but also can’t afford market rates”. It is good to see the California legislature taking action on this core issue for the middle class.

With stagnant wage increases, lack of affordable housing and rising interest rates middle income families are forced to rent instead of buying a starter home. Overall nationally the number of first time buyers in the market has dropped by two percentage points to 30 % from 32 % last month which indicates how they are getting squeezed out of the market in our recent blog of 2-20-18. The housing affordability index is at a 9 year low as well.

Add to these factors driving the lack of affordability is the inventory of starter houses is continuing to shrink as builders go for higher margin larger homes with higher prices – the average price of a home has increased year over year by 6.8 % way above the average salary increase barely reaching 2.5 %.

The following chart shows how home ownership rose during the period prior to the Great Recession but has fallen since to 1990s levels.

Source: Department of Commerce – 4/26/18

We need to have housing ownership levels back to 2003 levels before all the sub-prime mortgage programs spiked the home owner binge.

As we have observed in the past home ownership is a foundational goal for many people. Homeowners invest time and energy in a commitment to the long term improvement of our communities. Household creation boosts our economy when new home owners buy appliances, furniture, carpeting and improvement services.

We applaud the California bill but it does not go far enough. We need renewed housing funding via Fannie Mae and Freddie Mac, incentives for builders to build low cost starter homes, cities to set aside more land for housing and an end to Administration protectionist tariffs against Canada driving up the piece of lumber.

At Last Some Relief On Student Debt

By Patrick Hill

On April 6, 2018

In Solution, Student Debt

image: seiu668.org

Student loan debt continues to mount as the Federal Reserve reported a major increase to $1.49 trillion in February of this year. But, a partial solution is coming.

Image: The Federal Reserve Bank, St. Louis – 2/8/18

As part of the spending bill that Congress passed last month, $350 million was allocated for a fix it forgiveness program for some types of student loans. Senator Elizabeth Warren has been surveying the issue and individuals trying to take advantage of the provisions where she found that it was quite complex, answers were in complete from the Department of Education and work still needed to be done to setup the process. She found many firefighters and teachers having a difficult time getting into the program. Prior to passage of the spending bill Senators Whitehouse and Kaine wrote a bill to setup a student debt forgiveness program and get it funded, their bill set the stage for Democrats to push for provisions of the bill to be included in the omnibus spending bill.

This solution is still not enough compared to the huge issue of $1.49 trillion outstanding placing an anchor of debt on our young people when they need to be investing in starting their families and careers and buying homes. In blog of February 16th in our archives, we review an idea to cancel all student debt. We like the idea moving forward, yet recommend that forgiveness be done in stages, by reducing interest rates, offering Heartland Service, providing a universal national service option and corporate sponsorship of an internship by the student.

Blackrock CEO To Corporations: Focus on Social Responsibility Too, Are They Listening?

By Patrick Hill

On January 17, 2018

In Common Good, Corporate Nation State, Corporate Power, Corporate Reform, Public Interest, Solution, Worker Wages

Image: ipleaders.in

Laurence Fink, CEO of Blackrock with $6.3 trillion of assets under management sent a letter to one thousand CEOs outlining that in the future they will be evaluating companies on their societal impact not just profits. Blackrock manages major index funds which require that they invest in firms included in the index even when they don’t like the direction management is taking the company or take actions that are detrimental to their employees or community. Fink tells executives that a new age has arrived where shareholders and company management need to be more actively engaged. Plus, companies need to take the long term view related to rising automation, slow wage growth and climate change and explain their plans to shareholders.

Next Steps:

We applaud Fink’s focus on social responsibility by corporations. As he notes governments maybe way behind in the seeing the needs of society and solving those problems. Corporations can even add value, as Deloitte observes in five ways: creating new market opportunities, taking regulatory relationships from reactive to proactive, retaining top talent, enhancing brand value, and building sustainable supply chains. Now, let’s make this a priority on Wall Street. Fink in an interview on NPR’s Marketplace today, clarifying that Blackrock was not Wall Street. We have a ways to go with Wall Street expectations for quarterly results – we can hope that Wall Street was listening to a major investor like Blackrock.