Later On

A blog written for those whose interests more or less match mine.

Archive for the ‘Business’ Category

Legalized Pot, Free Trade

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Ioan Grillo writes in the NY Times:

Mexico City — WHEN the Mexican Army actually allows journalists to watch its soldiers in action, it’s often to see them burning marijuana crops. It’s strictly for show, but it’s fun. You get to fly in a military helicopter over the Sierra Madre, then touch down to see troops posing with their rifles as they walk into green marijuana fields. And the highlight: You watch hundreds of pounds of grass go up in flames.

Mexican soldiers have been conducting this ritual for decades, and the photos have come to define the country’s war on drugs. But amid a wave of drug policy reform, those photos may soon disappear from news pages and be relegated to historical archives.

Speaking last month at the United Nations special session on drugs, President Enrique Peña Nieto said he wanted to relax the nation’s marijuana laws. He has since sent Mexico’s Congress a bill to legalize medicine that contains cannabis, allow people to carry an ounce of marijuana without being prosecuted, and free some prisoners convicted on marijuana charges. “We Mexicans know all too well the range and the defects of prohibitionist and punitive policies, and of the so-called war on drugs that has prevailed for 40 years,” he said.

Mr. Peña Nieto is new to the drug-reform game. Only last year, he said he was against legalizing marijuana, and at one point said he was not even going to attend the United Nations session.

What happened? He seems to have realized (or been advised) that it is better to be on the side of inevitable change. The proposal follows the rapid loosening of drug laws in the United States: Four states and the District of Columbia have legalized medical and recreational marijuana, and 20 more states now permit it as medicine. The president’s shift also follows a November ruling by Mexico’s Supreme Court, which held that the government had no constitutional right to arrest people for their “civil right” of growing cannabis.

And more is coming soon. In November, Californians could vote on an initiative to legalize marijuana. If America’s richest state, and one on the border, votes yes, it will have a huge impact on Mexico. Why would the Mexican government want to crack down on traffickers taking marijuana into California if it were fully legal there?

Various Mexican politicians and activists have come out in favor of wider marijuana legalization. Among them, . . .

Continue reading.

Written by LeisureGuy

21 May 2016 at 9:10 am

New Nutrition Facts label approved

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Screen Shot 2016-05-20 at 12.34.24 PM

The above is from this report by Sabrina Tavernise in the NY Times. The key changes (but do read the report):

Serving sizes are closer to actual serving sizes. (For example, the old serving size for ice cream was 1/2 cup; the new serving size is 2/3 cup, which is closer to the actual serving size of 2 cups: the single-serving one pint container).

Total calories are shown in large print (along with the serving size).

A separate line is included for added sugar (something the industry fought, of course: the industry is always afraid that if they tell you want’s in your food you won’t want to eat it, so they don’t want to tell you). From the article:

But the sugar industry did not relent in its criticism. The Sugar Association said it was “disappointed” by the F.D.A.’s decision to require a separate line for added sugars. It argued that the rule lacked “scientific justification.”

The association said, “We are concerned that the ruling sets a dangerous precedent that is not grounded in science, and could actually deter us from our shared goal of a healthier America.”

Written by LeisureGuy

20 May 2016 at 12:39 pm

Sen. Elizabeth Warren on the new gilded age

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James Fallows in this post points out a speech by Elizabeth Warren that is (as he says) “actually worth reading.”

“Actually” in that it was neither just a bleat/complaint about the injustices of the new tech economy nor a simple assurance that technology and innovation will solve all the problems they create. (Ie, that the long-term arc of creative destruction will always bend toward greater creativity.)

Instead Warren addressed the question I said was on my mind, at the end of my March issue article. That was the Second Gilded Age question: if the dislocations, the inequalities, the injustices, but also the possibilities of this era of high-speed technical change parallel those of 125 years ago, is there any hope or guidance to be drawn from the responses of the Progressive era through the New Deal?

Since it’s actually worth reading, actually read it. Here it is. It begins:

Thank you, Ann Marie, for that kind introduction. And thank you to the New America foundation for inviting me to come and speak today about the so-called “gig” economy.

Across the country, new companies are using the Internet to transform the way Americans work, shop, socialize, vacation, look for love, talk to the doctor, get around, and track down a 10-foot feather boa—which was my latest Amazon search. These innovations have improved our lives in countless ways, reducing inefficiencies and leveraging network effects to help grow our economy. This is real growth. For example, increasing broadband penetration boosts GDP and increasing 3G connections increases mobile data use, which, in turn, increases GDP.i

The most famous example is the rise of ride-sharing platforms in our cities. The taxicab industry was riddled with monopolies, rents, and inefficiencies. Cities limited the number of taxi licenses and charged drivers steep fees for taxi medallions.ii They required drivers to pay additional fees to pick up passengers at airports.iii They micromanaged the paint jobs for individual cars and even outlawed price competition.iv Uber and Lyft, two ride sharing platforms that came onto the scene about 5 years ago, radically altered this model, enabling anyone with a smartphone and a car to deliver rides.v They also enabled customers to find a ride any time of day, with the touch of a button. The result was more rides, cheaper rides, and shorter wait times.vi

The ridesharing story illustrates the promise of these new businesses—and the dangers. Uber and Lyft fought against local taxicab rules that kept prices high and limited access to services. vii But as the dispute in Austin, Texas, has demonstrated, the companies fought just as vigorously against local rules designed to create a level playing field between themselves and their taxi competitors, and they have also resisted rules designed to promote rider safety and driver accountability.viii While their businesses provide workers with great flexibility, companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work. Their business model is, in part, dependent on extremely low wages for drivers.ix

It’s exciting—and very hip—to talk about Uber and Lyft and Taskrabbit, but the promise and risks of these companies isn’t new. For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy – rules and regulations – that will determine whether workers have a meaningful opportunity to share in that new wealth.

A century ago, the industrial revolution radically altered the American economy. Millions moved from farms to factories. These sweeping changes in our economy generated enormous wealth.

They also wreaked havoc on workers and their families. Workplaces were monstrously unsafe. Wages were paltry and hours were grueling.x

America’s response wasn’t to abandon the technological innovations and improvements of the industrial revolution. We didn’t send everyone back to their farms. No. Instead, we came together, and through our government we changed public policies to adapt to a changing economy – to keep the good and get rid of much of the bad.

The list of new laws and regulations was long: A minimum wage.xi Workplace safety.xii Workers compensation. xiii Child labor laws.xiv The 40-hour workweek. xv Social Security.xvi The right to unionize.xvii

But each of these changes made a profound difference. They put guardrails around the ability of giant corporations to exploit workers to generate additional profits at any cost. They helped make sure that part of the increased wealth generated by innovation would be used to build a strong middle class.xviii

The changes weren’t all focused on workers. Antitrust laws and newly-created public utilities addressed the new technological revolution’s tendency toward concentration and monopoly and kept our markets competitive.xix Rules to prevent cheating and fraud were added to make sure bad actors in the marketplace couldn’t get a leg up on folks who played by the rules. xx

These changes didn’t happen overnight. There were big fights – over decades – to establish that balance. But once in place, these policies underwrote the widely shared growth and prosperity of the 20th Century. xxi From 1935-1980, the 90% — everyone outside the top 10% — got 70% of all income growth. As the economy grew and became more productive, so too did the average worker’s wages.xxii Instead of all the wealth going to a handful of giant companies, factory owners, and investors—the robber barons of the early 20th Century—the growth created by our manufacturing economy supported the growth of a strong, prosperous middle class. That distribution happened because of a newly-emerging basic bargain for workers.

A hundred years ago, nobody grappling with the rapid changes in technology and work seriously entertained the idea of banning manufacturing advances. And today, nobody seriously entertains the idea of pulling the plug on the Internet. Massive technological change is a gift – a byproduct of human ingenuity that creates extraordinary opportunities to improve the lives of billions. But history shows that to harness those opportunities to create and sustain a strong middle class, policy also matters. To fully realize the potential of this new economy, laws must be adapted to make sure that the basic bargain for workers remains intact, and that workers have the chance to share in the growth they help produce.

The challenge today is doubly difficult. At the same time that we need to adapt to new work relationships of a gig economy, the basic bargain of the old work relationships has become badly frayed. Over the past three decades, workers have been under merciless attack. For decades, big – 3 – business has tried to squeeze more profits out of workers by ducking and dodging regulations and by taking advantage of loopholes in employment policy, by skirting enforcement efforts, and even by flagrantly violating the law.xxiii Giant corporations have deployed armies of lobbyists and lawyers to freeze, limit, or dismantle as many worker protections as they could. The result is that for decades, the guardrails that once served to build a robust middle class no longer offered the same kind of protection.

More and more of today’s jobs have sharply limited protections and benefits.xxiv. Long before anyone ever wrote an article about the “gig economy,” corporations had discovered the higher profits they could wring out of an on-demand workforce made up of independent contractors.xxv Labor law makes a sharp distinction between employees and 1099 independent contractors, and many employers figured out how to exploit that distinction. xxvi They hired people who do the work once done by people characterized as employees, but then re-characterized them as independent contractors or as somebody else’s employees.xxvii The result was that these workers lost their benefits, lost the stability of guaranteed work, and lost the ability to form a union and bargain collectively.xxviii

But the employee-1099 divide is not the only way the basic work bargain is fraying. Employees, particularly low-wage employees, face challenges that are not unlike challenges facing gig workers and independent contractors. They too have lost both benefits and the stability of a guaranteed work schedule and a steady income. As employers have moved to just-in-time staffing, more hourly workers are trapped in part-time jobs or stripped-down full-time jobs.xxix An increasing number of workers are in sub-contracting or franchise arrangements where their employment conditions are controlled by firms they can’t bargain with or hold accountable for meeting basic wage or safety obligations. They may not even know the name of their actual employer.xxx

At the same time that the bargain with workers has become increasingly one-sided for millions of independent contractors and hourly employees, yet another part of the basic economic bargain has also begun to fray. The safety net—unemployment insurance, workers comp, Social Security—hasn’t been updated to fill in the holes that employers have created. Temporary workers, contract workers, seasonal workers, permatemps, and part-time workers rarely have access to these benefits, which means that the workers who most need that safety net are least likely to have it.

The gig economy didn’t invent any of these problems. In fact, the gig economy has become a stopgap for some workers who can’t make ends meet in a weak labor market. The much-touted virtues of flexibility, independence, and creativity offered by gig work might be true for some workers under some conditions, but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10%.

The problems facing gig workers are much like the problems facing millions of other workers. An outdated employee benefits model makes it all but impossible for temporary workers, contract workers, part-time workers and workers in industries like retail or construction who switch jobs frequently to build any economic security.

Just as this country did a hundred years ago, it’s time to rethink the basic bargain between workers and companies. As greater wealth is generated by new technology, how can we ensure that the workers who support this economy can share in that wealth?

I believe we start with one simple principle: . . .

Continue reading.

Read the whole thing and think about it. Her conclusion:

. . . My message today is straightforward: Workers deserve a level playing field and some basic protections, no matter who they work for, where they work, or how the law classifies them. They deserve a strong safety net, dependable benefits, and the chance to bargain over their working conditions—that’s the basic deal. And that’s the deal that is necessary to restore a strong and sustainable American middle class.

Most workers aren’t asking for the moon. They want to be able to take care of their families, buy a home, send their kids to college, and save a little money for retirement. They want some security, and they want to know their kids will have a chance to do better than they did. That’s the promise of America, but that promise won’t come true unless we make some real changes.

Workers have a right to expect our government to work for them, to set the basic rules of the game. If this country is to have a strong middle class, then we need the policies that will make that possible. That’s how shared prosperity has been built in the past, and that is our way forward now.

Change won’t be easy. But we don’t get what we don’t fight for. I believe America’s workers are worth fighting for.

Written by LeisureGuy

20 May 2016 at 10:21 am

Will the raids by Wall Street ever stop? The U.S. Government Is Quietly Paying Billions to Wall Street Banks

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Pam Martens and Russ Martens report in Wall Street on Parade:

Wall Street On Parade has learned, by piecing together the SEC filings of Freddie Mac and Fannie Mae and previous Federal Reserve studies, that these two companies that have been in U.S. government conservatorship since the 2008 financial crisis, continue to pay out billions of dollars to the biggest Wall Street banks on their derivatives contracts.

This raises multiple red flags, not the least of which is how much does the U.S. public really understand about the 2008 financial crisis and what appears to be a continuing taxpayer bailout. It is well known at this point that AIG had to be bailed out because it owed over $90 billion on its derivative and security loan contracts to Wall Street and foreign banks. Now, it’s looking like Fannie Mae and Freddie Mac were also Wall Street’s derivatives patsies – or “dumb tourists” as author Michael Lewis might say.

According to Freddie Mac’s first quarter 10K filed with the Securities and Exchange Commission, this is how much it has paid to its derivatives counterparties in just the past four years: $2.1 billion in 2015; $2.6 billion in 2014; $3.46 billion in 2013; and $3.8 billion in 2012. Fannie Mae’s payouts have been smaller than Freddie Mac’s.

We could not find comparable data for Freddie Mac for the crisis years but its 10K for the first quarter of 2011 shows total derivative losses (declines in the value of its derivatives portfolio plus payouts to counterparties) as follows: $8 billion in 2010; $1.9 billion in 2009; and a stunning $14.95 billion in 2008.

Both the Federal Reserve Bank of New York and the Federal Reserve Bank of St. Louis have conceded in separate studies that placing Freddie and Fannie under U.S. government conservatorship was critical to stemming the bleeding of the big Wall Street banks because of their derivatives counterparty status. The New York Fed’s staff report of March 2015 noted the following: . . .

Continue reading. There’s more.

The conclusion of the column:

When there are 6,000 banks in the U.S. but only five of them are compelled to hold over 90 percent of hundreds of trillions of dollars in derivatives, it’s time for the American people to demand and receive cogent answers. That is unlikely to happen without the political revolution that Senator Bernie Sanders is calling for.

Written by LeisureGuy

20 May 2016 at 10:01 am

House Republicans Rig Hearing to Block Consumers from Going to Court

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Pam Martens and Russ Martens report in Wall Street on Parade:

The ink was barely dry on a proposal by the Consumer Financial Protection Bureau (CFPB) to restore the rights of banking customers to take their grievances into a court of law instead of a system of forced arbitration, when House Republicans threw together a hearing yesterday to scaremonger over make-believe evils of the proposal. The hearing was convened by the Republican-controlled Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee and not-so-subtly titled “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?”

The American Law Litigation Daily called the hearing “seriously lopsided.” ValueWalk called it “skewed.” We’re calling it brazenly rigged.

In decades of watching Senate and House hearings, we have never seen a more unlevel playing field. Out of the four witnesses called to testify, three were hand-picked to parrot the position of the banks with one lonely witness on hand to counter their repeated misstatements of fact. Watching that one lone witness, Paul Bland, Executive Director of the nonprofit organization, Public Justice, attempt to provide balance to the proceeding was akin to watching bullies on the playground hurling dumb epithets at the straight-A kid in their class.

Most of the Republicans didn’t even bother to call on Bland or ask his opinion.  At one point, Republican Congressman Blaine Luetkemeyer of Missouri, a former banker himself, posed a slanted question to all four witnesses, then snapped at Bland, “You’re outvoted, it’s three to one.” When you rig a witness panel, naturally you can easily achieve three opinions against one. (On a side note, Luetkemeyer is attempting to do to endangered species what’s currently happening to banking customers – strip them of protections from predators.)

According to a May 13 hearing memo, Bland wasn’t even supposed to be on the witness panel. It was initially structured to hear only what Republicans wanted the public to hear. . .

Continue reading.

Written by LeisureGuy

19 May 2016 at 12:17 pm

Foreclosure Fraud Is Supposed to Be a Thing of the Past, But It Happens Every Day

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David Dayen reports in The Intercept:

Every day in America, people continue to be kicked out of their homes based on false documents. The settlements over allegations of robosigning, faulty paperwork, and illegal mortgage servicing didn’t end the misconduct. And law enforcement, along with most judges and politicians, have looked away in the mistaken belief that they wrapped up a scandal that just goes on and on.

My new book, Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud, is about three foreclosure victims who ended up doing more investigation of the corrupt U.S. mortgage industry than any state or federal law enforcement or regulatory official.

They exposed the mass production of false mortgage documents in courthouses and county records offices across the country.

It’s a work of history, depicting events that occurred from 2009 to 2012. But it’s a living history, and that’s one of the reasons I wrote the book.

Here at The Intercept, in the past 10 months, I’ve written about the New Jersey man who had precious family heirlooms robbed by Wells Fargo subcontractors when they illegally “trashed out” his foreclosed home. I’ve written about the use of false documents in Seattle and the unregistered business trusts operating in Montana. I’ve written about the Texas jury that awarded $5 million in one wrongful foreclosure case with fabricated and robosigned documents. I’ve written about the California Supreme Court enabling foreclosure victims to challenge phony documents in their cases.

That’s just a small sampling of what I hear nearly every day from homeowners who continue to challenge their cases and reveal massive fraud. And these are a few more:

  • Here’s a document dated August 4, 2010. It’s an assignment of a deed of trust from the originator, American Brokers Conduit, to Wells Fargo. It was not only digitally signed, but it was digitally notarized. So the computer appeared personally before the other computer, I guess, to verify that this was the authentic computer that signed the document. . .

Continue reading.

Written by LeisureGuy

19 May 2016 at 10:11 am

An example of unsustainability: TSA and air travel

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Written by LeisureGuy

16 May 2016 at 2:12 pm

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