McMorran

I need help. We here in Port Huron, Michigan have a publicly owned facility, McMorran Place. It offers a hockey Arena that also converts into a 4600 capacity concert venue, as well as a 1,157 seat theater. McMorran has played host over the years to acts as diverse as Aerosmith and Gordon Lightfoot, Johnny Cash, KISS, and Rush. If you look at the cover of Rush’s “Beyond the Lighted Stage” DVD release, the picture is from McMorran Arena. However, in more recent years, McMorran has suffered from mismanagement. There has been a complete lack on the part of those in charge, now including a professional facilities management company for the past year, to book any substantial acts. This mismanagement has made McMorran a drain on our city’s finances, and recently our City Manager has stated that one of the options he is going to put forth to deal with this deficit is the shuttering of our facility. That idea is a travesty and spits on the grave of the fine family who built McMorran as a gift to the community. But as private individuals, we haven’t had many options except to cajole those in power to “do something”.
Recently I have been informed that, as opposed to pushing for the managing company to book and promote the venue, that it is possible to rent the facility. Which is why I come to you. Frankly, I don’t have concert management experience, don’t have the kind of money to pay booking fees, and I can’t make guarantees on behalf of some corporate entity with deep pockets. What I can offer is the chance to prove to those in power that it can be done, that bringing music to Port Huron can be a money making venture, and to save our fine facility from being shuttered, along with every bit of profit we can make. I may not know what I am doing booking a band, but I’m pretty sure you do, or at least have people around you that do.

Thank you for your time,
Steven Verner

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Econ and “Other Issues”

I have taken some heat over time for my “liberal” politics. I am actually very much a centrist, but no matter. Much of my liberal leanings, and support for the current president, are predisposed on my understanding of economics. I do not fancy myself some sort of expert, I do, however fancy multiple men and women holding PhD’s in economics to be experts. The simple fact is that Obama and his team’s economic vision is quite close to the prevailing wisdom of the majority economists while the Republican vision, especially that of Gov. Romney and Congressman Ryan, is considered to be mere hokum by the aforementioned economists. But recently I was challenged on the fact that many conservative leaning people disagree with Pres. Obama, and Democrats in general, on a multitude of other issues, and that even if his economics are right those other issues lead this person and others to vote against him. Knowing the person this came from fairly well, I can be quite sure I know exactly what those issues are: Abortion, the “Welfare State”, and Gun Control. I believe he, and others, fail to understand that these issues tie back to economics in many ways. Certainly we can argue the level of effect that economics has on each issue, but it is clear from the evidence that economics does indeed have a significant effect on them. Here I will attempt to lay out some reasoning why I believe this is true, based on available evidence, and why opponents of these issues should change their vote and work (with me) to change the way that democrats look at these issues, and especially their focus on certain aspects of the debate, instead of following Conservative ideology which talks a good game but does things which are economically contrary to the desired outcome.

Let us start with Gun Control. The Liberal viewpoint, in a nutshell, is that there is a vast amount of crime that involves guns, and the way to solve it (at least relatively quickly) is to remove the guns from the equation. I personally believe this to be misguided, but that is the general idea. What I know from the data is that violent crime is not driven by gun possession, it is driven largely by poverty. Admittedly, there are gun crimes that are not in some way tied to poverty, domestic violence is one such situation in which poverty is not often related, however the majority of gun related crime is.

These two, related, sites, http://www.neighborhoodscout.com/neighborhoods/crime-rates/top100dangerous/ and http://www.neighborhoodscout.com/neighborhoods/crime-rates/top100safest/ list the 100 safest and the 100 most dangerous according to the site administrator’s rankings. I chose it because they use the exact same methodology to come up with both lists. If one looks deeper than the lists themselves, they will find that those who rank high on the most dangerous list have a poverty rate that is very high and those cities on the safest list have poverty rates that are extremely low. This trend follows wherever you look, places in which the residents are already predominantly poor have poor schools, lower economic mobility than average, and overall low levels of opportunity abound. Having very few opportunities for a good paying job, and very few if any opportunities for a good education to help you get a good paying job, brings many people who might otherwise be productive members of society to resort to theft, dealing drugs, and ultimately armed robbery and murder to protect your (drug dealing) territory. Simply put, poverty breeds desperation which breeds crime which ultimately includes gun related crime.

So, if poverty ultimately increases crime rates, then reducing poverty should decrease crime rates. That would be the prevailing wisdom. All this traces back to the Democrat’s focus, economically speaking, on increasing middle and working class incomes, opportunities for the poor, on investments in education and bringing the cost of college down, among other things. Contrast this with the Republican vision of economics predominantly focused on tax rate reductions for the rich which never trickle down as they say they do and are proven to be a redistributive mechanism for the aforementioned rich to take a larger slice of the economic pie leaving less for the rest of us(see here: http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf .)

If creating more opportunity and increasing middle class and working poor wages ultimately reduces gun crime, and if we want to cut gun crime, then the democratic vision of economics is the clear answer we are looking for. Simply put, less gun crime leaves the gun control crowd with a significantly reduced, if not eliminated, argument for gun control. That is the way we want to go.

A very similar argument is made on the abortion debate. It’s all about economics, education, and employment. There are many studies that show that women who have more education and higher incomes have lower rates of unintended pregnancies, and fewer that result in abortions. While the reasons for this are multiple, the most cited are; lack of access to contraception, lack of education about the use of contraception, and an inability to care for the resulting child of their unintended pregnancies. Women with better education and higher income are more likely to have a job with good health insurance ensuring access to birth control, are more likely to be taught(and understand) proper use, and they are more likely to feel secure in their ability to care for a child should a pregnancy occur. These factors are so strong that the rate of unintended pregnancy for women at or below the poverty line is five times that of women who attain income of 200% of the poverty level.

There is another, separate, point that needs to be made here. That is the direct intent of lawmakers when it comes to abortion. We hear all the time from one national candidate/office holder or another how they are against abortion. The reality is that this means nothing. There is absolutely zero they can do about abortion directly. Take note that this is most true of presidential candidates. The usual argument for a conservative presidential candidate is they will appoint a conservative justice to the Supreme Court who will vote to overturn Roe v. Wade. This is just plain malarkey. Let me explain: Roe v. Wade was decided nearly Forty years ago by a conservative leaning Supreme Court. Since that time we have had both conservative and liberal presidents appointing both conservative and liberal leaning justices to the Court. After each and every change in the Court, they have had an opportunity to revisit the Roe v. Wade decision. They have either refused to hear a case(therefore upholding the decision by default) or have heard the new case and directly upheld it. The simple fact is that the original constitutional reasons for the original decision still stand: Protection of life only extends to those that can be absolutely scientifically proven to be living viable humans, and the only reliable dividing line between “viable” and not is live birth. Either medical science must advance dramatically or we must amend the Constitution to explicitly include the unborn. We can’t even get an amendment prohibiting burning the flag passed, good luck doing it for abortion.

I myself am no fan of abortion, especially abortion of choice, however we are not going to make inroads into ending or even decreasing abortion through eliminating funding to a certain well known abortion provider or finding a way to ban it outright. These sorts of ideas will only serve to push abortion back to the back alleys where women die next to their aborted children. We must eliminate the reasons women choose abortion, and those are based in economics. Good jobs, good healthcare, good education are the keys to ending abortions of choice. We get there by focusing on policies that increase workers share of the economic pie, by investing in education, by enacting policies that help bring the cost of higher education down, and increasing access to contraceptives and education on their proper use to people of all income levels.

Lastly, the welfare state. Many Conservatives have a very bad opinion overall of programs designed to aid the poor and the out of work. Handouts, gimme society, the “welfare queen” myth, I’m pretty sure I have heard them all. The fact is that there are several good things economically and societally about welfare. Transfer payments, as economists call them, actually increase economic activity and help us get out of recessions. Food stamps, for instance, allow people who would otherwise be (even more) monetarily distressed to purchase food, which keeps grocers, food manufacturing companies, and farmers working during tough economic times. They also free up some money that would otherwise be spent by individuals on food to buy other items, including essentials like soap(bath, laundry, and dish), deodorant, and toilet paper. Cash payments, Section 8 housing, and other programs have similar effects. And yes, we have all heard stories about people abusing the system. These people are few and far between and do not represent the vast majority of people on welfare. These stories are often overblown. Both Republican and Democrat administrations have done studies on how to curb these kinds of abuses. They have found that the levels of this kind of activity are in reality so low that the resources, the money, needed to track them down outweighs the gains from catching them. The system relies heavily on citizens to take notice of and report improper usage of programs.

The likelihood that a dollar in the hands of someone with low income will be spent is much higher than that of high income individuals(Marginal Utility of Income). This means we get a bigger bang for our buck, economically, from money in the hands of lower income people than we do high income people. This is an important factor when looking at tax policy, welfare policy, and things like unemployment.

As a nation we must look at how to limit the number of people who are in need of assistance. Which returns us to economics. If we are focusing on education, opportunity, and jobs for the poor, the working poor, and the middle class we reduce the need for assistance. Our society has a need to put a focus on providing these things. Without that focus we will continue to see growth in the need for a welfare state. None of us wants that, but if we continue to focus on handouts to the very rich, which have been proven to not increase economic growth, we will continue to see the need for handouts to the poor.


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Violence in the UK

Why is it when young people rise up in Egypt, Syria, and other places in the middle east it is called “protests” and the “people are fighting against oppression” but when young people in the UK rise up against blatant oppression with the “spark” being the murder of a young black man by that racist regime they call police, and they do the same things, looting, violence, arson, among other things, they are called thugs and insurrectionists and this “needs to be put down”??????  Tell the Truth Media!! This is not some “mindless mob” bent on destruction, these are young people who have been oppressed all their lives. These are young people that have seen their last life-line severed in these brutal “austerity” measures.  These are young people who have no other choice but to make a huge noise, otherwise you ignore them.  Look at the coverage with Anderson Cooper in Somalia. How long has the plight of those people been ignored? How much longer will you ignore the fact that in the UK, and the US as well, young people have been oppressed, violently at times, evidenced by this recent shooting. It’s time that YOU serve the public interest and begin to use your “free press” rights to speak about the violence and oppression going on against the young and the poor, even in supposedly advanced and enlightened countries like the US and UK.

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Truly Stimulating the Economy

     Much has been made of the American Recovery and Reinvestment act, also known as the stimulus. It’s positives, its negatives, economic numbers that say it’s working and numbers that say it is not. One thing is for certain, it is not living up to the hype. The problem for me is that nobody is coming out and explaining why. We see lots of conjecture from the liberal side about jobs saved, greater economic ruin averted, and several other positive spins put on it, and, of course, the Republicans talking about how much it cost, how it hasn’t helped the way we were told by Obama it would, and how they have this other set of ideas they want to do. But no “Why?” Why has it failed to do what was expected of it? Was it a bad idea? Was it ill-conceived? Exactly where did this stuff come from anyway? Nothing. Not from the mainstream media. Not from the economists. Not from the bloggers worldwide. Not a word. In addition, there is no real answer to what we should be doing now, or what we should have been doing to help keep this from happening and lessen its impact if it did. Certainly, the other ideas being called for now is no better. Cutting government spending in the middle of a recession, as Conservatives have called for, is at least as irresponsible as running up massive government debt. Every dollar that the government does not spend is a dollar that is not flowing through the economy. Cutting taxes to the rich in an attempt to induce hiring doesn’t fare well either. Businesses don’t hire more people out of the goodness of their hearts or just for the heck of it. They hire because they need more people to fill the demand for the goods and services the company is offering. Not a lot of demand is created by essentially giving more money to people who already have enough money to buy whatever they want.The American Recovery and Reinvestment act type of economic stimulus is not a new invention, and certainly not something that the Obama administration pulled out of thin air, nor is it some obscure thing. It is a sound economic recovery plan that has been used multiple times, mostly, until now, with great success. As well, we do not stand alone in its use. Countries as diverse as China, Germany, and the United Kingdom have implemented similar measures in response to this global economic crisis. Differences occur only in the precise amounts going to different measures, like unemployment benefits, infrastructure spending, and tax cuts, as well as fiscal measures including lowering interest rates and loans to banks to attempt to open up more lending.

     These types of stimulus measures are part of a macroeconomic theory based on the ideas of 20th century English economist John Maynard Keynes. In short, Mr. Keynes posits that the free market is too volatile on its own, so it is the job of government, in the interest of its citizens, to help smooth out the rise and fall of the economy. The government would achieve this goal by spending more and lowering interest rates when the economy goes down and spending less and raising interest rates when the economy goes up, with the goal being to achieve a relatively steady expansion of the economy and lessen the impacts of huge swings upward creating bubbles and huge swings downward when those bubbles burst. There are many books and websites on Keynesian economic thought which give a much more thorough and accurate explanation, but that is the basic “definition” that governments utilizing it are currently operating under.

     Keynesian stimulus of an economy in recession is supposed to work by placing more money into the economy. If the government repairs a road or builds a new bridge, it puts people to work. Those people then have money to spend which increases demand for goods and services. Demand which must be filled by people producing those goods and offering those services, inevitably requiring more people working to fulfill that demand, which then creates more demand. Thus begins a continuous cycle of demand creating more demand creating more employment. Which brings us to Keynesian economics downfall through globalization. If all the goods and services that you buy come from outside of the economy you live and, hopefully, work in, the stimulus ends there. If the corn that goes into your corn flakes and the strawberries in your fruit smoothie come from somewhere in South America, your Levi jeans are made in Mexico, and your kid’s toys come from China, whose job are you supporting? Certainly not your own or your neighbor’s job.

     Keynesian economics at its base is “built” for a closed economy. Certainly, there is such a thing as “Global” or “International” Keynesianism, but it is as of yet not fully realized as an economic theory and would be extremely hard to implement given the various political climates worldwide and the economic aims of individual countries. Nevertheless, Keynesian economics is “broken” by globalization. More precisely, it is broken by the particular type of globalization that currently exists in our world. A globalization in which the cost of living and income differences is so vast and the environmental standards and other regulations are so different that some places are chosen over others simply because the cost of doing business there is vastly less.

     It’s not the fault of your average consumer. At least not directly. It is, more directly, the fault of our government and governments of various countries we trade with which have laws and trade agreements that create certain conditions, and of individual companies that utilize those conditions, all to the detriment of us “average” citizens, both here and abroad.

     Companies have actively sought to lower pay and benefits for their workers as well as reduction of their workforce in the interest of the bottom line. This is not evil or wrong of them. Every advantage that can be used to increase the profits of their company and get a leg up on their competition should be used. Having a greater profit margin makes for a stronger business, more able to weather temporary setbacks and take on greater levels of expansion in good times, and is a hallmark of our free market economy. It does create a problem though. Logically, fewer employees and lower pay for remaining employees eventually results in fewer and fewer people being able to afford the products those companies make. In addition, companies are now faced with global competition which can utilize a workforce that requires a far lower pay rate in order to meet their standard of living, resulting in companies further requiring workforce and pay reductions until productivity can go no higher and wages no lower. At such a time either the company goes bankrupt or moves production outside of the country utilizing the lower wages present in places like China, Taiwan, and Mexico. We simply cannot compete with a global workforce whose cost of living is so much lower than ours. And when what jobs we have and wages we make so quickly go outside of the country, economic stimulus simply will not work.

     A major change in direction must take place. We cannot continue in a situation where the people who make our products and offer services we need are increasingly in other countries instead of here at home. There are no simple answers to reversing this course either. At least in the details. There are some overarching things we can do though. In order for our workforce to compete we must reduce some of the many advantages that the workforce in other countries have over us.

     One of those advantages is that their pay and their cost of living is dramatically lower than ours. The workers in other countries needs often cost less, and they can simply get by with less. In addition, the regulations in place here in this country are simply prohibitive when compared to the regulations present in other countries. This is not a call for a lowering of our living standard or a call for loosening our regulations. Our standard of living has been the standard that people around the world have aspired to for generations, our regulations are there to protect both the workers and the consumer. To lower either of them would be a great mistake. Perhaps there is room to streamline those regulations, to make it easier for companies to meet them, and less costly both for companies to follow and also for our governmental agencies to enforce them, but to remove those regulations is to invite greater levels of injuries to workers and consumers, and also greater environmental disasters to ruin our natural resources. It would be much more preferential to raise the standards in other countries, to create better working conditions and raise wages for workers worldwide. I understand this would be a hard sell in any political climate, and would require huge amounts of work. Existing treaties would have to be renegotiated, rules would have to be put in place regarding what must be included in new ones, governments worldwide would have to be pressured to implement regulations concerning worker and environmental safety, the list goes on. I think it would be worth it. The resultant increase in demand for products worldwide would be dramatic, less economic turmoil would result in fewer conflicts, and a general equalization of incomes and living conditions would reduce illegal immigration and curb the illegal drug trade, both of which are often born out of poverty. The possibility of reducing these costs to us and our allies, and even our current enemies, should be enough to consider a move in the direction of worldwide income equalization.

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