Sacrifice Zones

I wrote this one over the weekend.

I bought another book. Surprise! My son told me about this book, it sounded interesting, so I bought it. We are camping this weekend, so I thought it would be a good read during this time, and it is. I have  one chapter left, and have experienced many emotions while I have read.

Chris Hedges and Joe Sacco wrote about sacrifice zones located through out the United States. The phrase is defined as cities that have been sacrificed to the god of capitalism, “areas that have been offered up for exploitation in the name of profit, progress, and technological advancement.”

Chris Hedges stated in the introduction, “The rise of corporatism began with the industrial revolution, westward expansion, and the genocide carried out in the name of progress and Western civilization against Native Americans.” This identifies the author’s first sacrifice zone, PineRidge Reservation. The other zones include Camden, New Jersey; Welch, West Virginia;  Immokalee, Florida, and Liberty Square, New York. I am enjoying their ideas, but I disagree with their implied conclusions. Hedges and Stacco blame Capitalism for all of the evils of these areas.  don’t get me wrong, forgetting these sacrifice zones is a travesty, but the problem is not with the economic system, it is with the people within the system. The people who are excessively hungry for power and wealth.

The people in PineRidge told me they are getting tired of the continued bad press. Hedges and Sacco are no different than Diane Sawyer. They paint a bleak picture of the rez, one that represents little hope. I have been to the rez the last three years, and the people are wonderful. The Lakota’s dilemma is exasperated by the lack of economic development in southwest South Dakota. This is a system that is broken, and should not be ignored. We must recognize the pain associated with being Native American and the plethora of examples similar to the Cherokee trail of tears. We must not forget, but work along side the Native to figure out how to repair a culture rather than write them off as a sacrifice zone.

The people in Welch, West Virginia have been devastated by coal mining. The pollution and devastation of the mountains while people claim the coal veined through the mountains in West Virginia is horrific. This demonstrates the importance of a triple bottom-line, not a business model focused just on profit, but one focused on profit, people and the environment.

In Days of Destruction; Days of Revolt, Hedges and Stacco describe several areas that are horrific. However, they are willing to throw the baby out with the bathwater. I am not willing to do that. Capitalism is a system that can work well, if our motive is not just profit, but to make profit and do good.

And that is my thought for the day!

Crony Capitalism And Politicians

“Jorge Luis Borges said, “the Argentine people suffered under too many messiahs.” Its current leadership, starting with the husband and now the wife, is continuing that trend. Cristina Kirchner, the Argentine President, is promising to “free the people” through “revitalized government,” however, this revitalized government is behaving much like Russia and Putin, leading to decreased independence of various agencies, such as the national statistics agency. The WSJ reported this morning that economic numbers reported by Argentina have become so corrupt that the Economist magazine, “now refuses to print its [Argentina] cooked numbers.”

Mrs. Kirchner has accomplished much when it comes to cronyism. She has destroyed the central bank’s independence, and intends to use the bank’s reserve to pay off its debts, which will probably result in higher inflation and a damaged currency. The Argentine middle class has tried to hedge against inflation by exchanging for US currency. In order to stop this “the government introduced draconian currency and trade controls,” resulting in multiple exchange rates. “If you are a friend of the government, a dollar will cost 4.5 pesos, for everyone else, it is more than 6.” Therefore, it pays to be a friend of the government. The result of these horrible economic decisions, and cronyism, stagflation, which is even more dangerous than inflation, has occurred. Prices may be going down, but the buying power of money has been reduced even more. And on top of that the cost of debt is stagnant. Keep an eye on Argentina, another socio-economic event to learn from.

On the home front, it appears that business is fed up with political partisanship. Dennis Berman reported this morning that the business message to Washington D.C. is to stop fighting and they’ll spend. John Ambroseo, CEO of Coherent Inc, Kevin Grant, CEO of CYS Investors are just two of the many business leaders criticizing government for its continued infighting. The reason for these statements involve the “fiscal cliff” just around the corner. December 31st, unless congress acts, there will be a resetting of tax rates and decreased spending. CEO’s are frustrated with the lack of decisions coming out of our congress. “If you can’t plan, you can’t spend. And if you don’t spend you don’t hire.”

I agree with these criticisms of our political leaders, but these business leaders are not taking the next step, holding back campaign contributions and PAC money until congress makes a decision. If they are really serious that is what they should do. When I was a part of the International Association of Machinists union, we would periodically go out on strike. I would never cross the picket line because I was a part of a collective bargaining unit. In my opinion being a scab is wrong. However, I always thought when there was a strike union and company negotiators should stop getting a check, just like the workers, until a settlement is reached. You hit em in the pocketbook and they’ll listen. If we want politicians to make decision then lets hit em in the pocketbook. That is the only way they’ll change.

And that is my thought for the day!

The Problem

I am becoming a bit of a genealogy nut. My mother-in-law has converted me to ancestry interest. My grandparents, on my mother’s side, are from Russia. They were a part of the Volga River Germans. What a legacy of hard work, faith, and love. On my father’s side, my ancestors have been in the country since its beginning. My great great great grandparents fought in the Revolutionary and Civil Wars. I am very proud of this, it is kind of cool. My Dad used to say we came over on the Mayflower, but the only problem is Christopher Martin, who is listed on the roster, died during the first winter. Tracing our lineage to him is going to take a bit more that just recognizing a name on the Mayflower passenger list.

My comments today are not about my history, but about what this country has stood for for 236 years. Zingales states this quite eloquently is his book on capitalism. “When a few disgruntled British emigrants decided to find their own path to the pursuit of happiness, they set in motion the most successful social experiment in human history. The Founding Fathers not only established a government of the people, by the people, and for the people; in spite of all the government’s limitations, they also created an economic system of the people, by the people, and for the people.” The cronyism of today’s American meritocracy is similar to what our Founding Fathers were escaping, “a capitalism that was the creation of a rich elite who saw an opportunity to get richer.”

Zingales then adds the critical element to understanding the type of capitalism this country has developed. “America’s brand of capitalism has survived and thrived because of a unique set of circumstances: a government attentive to the interests of ordinary people, a set of values that have made the accumulation of wealth a moral responsibility rather than an end unto itself, and a belief that the system provides opportunities for all.”

In 1851 F.W. Bogen wrote this poignant statement. “For every migrant should well consider, that in a country like the United States of America. . ., where no princes and their corrupt courts represent the so-called divine right of birth, in spite of merit and virtue – that in such a country the talents, energy and perseverance of a person must have a far greater opportunity for display, than in monarchies, where the evils above mentioned have existed for centuries, and with their sad effects still exist.”

The economic process demonstrated throughout our history involves a free market system, where individuals, through earned success, can find a good life; a government which creates “the conditions of liberty and opportunity so that each individual can define success as they see fit;” and these successful people then help their neighbor. We are in danger of losing this system, through extend government reach and individual inaction. We better wake up, or we will continue to move down the road to Serfdom.

And that is my thought for the day!

American Exceptionalism

I just finished Meltzer’s work on capitalism. “Why Capitalism” taught me that Democratic Capitalism is a workable economic system. Now Zingales’ book, “A Capitalism for the People,” is reinforcing my belief in this concept. Zingales is an Italian who moved to the United States to escape the political and economic nepotism and cronyism of Italy.

He, like many of the Italian economists who moved to the United States, immigrated here as “extreme leftists, and in some cases as active communists.” What is interesting is that even though as leftists hating our economic system, they still traveled here because of the education. They put their politics on hold to get a top notch education, but during the process every one of them, at least according to Zingales, became a free marketer. He cites as the reason for this development, “a firsthand realization that many of the free-market benefits that they study in theory actually hold true in this country.

Our free market system works. People can take initiative, resulting in economic reward. “Rewards are more likely to be allocated on the basis of merit here than on a basis of political connections. Competition provides people with better products at lower prices. And the low barriers to entry, promote the emergence of new ideas and opportunities.”

However, just as with any political and economic system, the why is just as important as the how. Chuck Colsen demonstrates this by discussing Aleksandr Solzhenitsyn’s classic novel, “The Cancer Ward.” The protagonist is a man names Oleg. As he is adjusting to life in a Soviet cancer ward, he develops a relationship with a beautiful nurse. As Oleg helps Zoya with her work, he finds there are very few deaths within the hospital. One would think that a cancer ward would have many deaths, but in this case there are few. Oleg eventually finds out that when a patient is considered terminal he or she is released to die on the street. Solzhenitsyn describes a man being released who has no family, thus “the best he can hope for is an empty bench where he can lie down and wait to die.”

Any system without human care is an evil system. If we live in a system without human care, what is our reason for living? Money, fame, success? These are all bowls of porridge to sell our heritage for because we are hungry.

Brooks in the “Road to Freedom,” explores if money makes one happy. He talks of a research project completed in 1974 by an economist, Richard Easterlin, about whether rich countries were happier then poor countries. Easterlin’s conclusion was that rich countries are not happier.

Brooks gives the reason for this lack of happiness as a process of adjustment. In other words, we adjust to “our new economic circumstance incredibly quickly.” The more money we have, the more we adjust, and the more we spend. Adam Smith noted that during this process human beings will return to some point of tranquility. We adapt to our own “hedonic treadmill.”

A free market allows us to pursue our self-interest, while the passion to accomplish something will remain strong, the hunger for wealth dissipates. It is not the economic system that creates meaning within us, it is the pursuit of “earned success.” Brooks defines this as “the ability to create value with your life or in the lives of others.”

I would not say “or,” I would say “and.” The ability to earn success, create value, and then do good for others is, at least in my way of thinking, the best path of action.

And that is my thought for the day!

Moral Capitalism And Sacrifice Zones.

Arthur Brooks in his book “The Road to Freedom,” argues that “free enterprise advocates need to build the moral case [for capitalism] to remind Americans why the future of this nation is worth more to each of us than a few short-term government benefits.” Brooks takes us down the road of moral freedom while associating it with capitalism. I think the connection between a free enterprise system and freedom of choice is strong, but I would hesitate to equate any type of morality with an economic system.

The Socialist left tries to equate a fair economic distribution of wealth as a moral necessity, however history tells us the unmoral capability of a Socialist system many times over. However, it is futile to say that capitalism is a moral system unto itself. In either case, it is the people that make an economic system moral or not.

Therefor I disagree with Brooks concerning his moral argument for capitalism, but I would agree that capitalism allows us a greater opportunity to create profit and then use that profit for good, which is what business as mission is all about.

My son just sent me a clip of Bill Moyers discussing capitalism’s zones of sacrifice. These are those areas within our nation that have no hope. The economic, political, and legal systems based in our utilitarian society have written these areas off, and the people are left to struggle within themselves. We have placed walls around these areas and have let them go. It is quite sad. Whether we are talking about the coal mining areas of West Virginia or PineRidge, South Dakota these individuals are viewed as hopeless.

It is interesting that the August National Geographic magazine’s title is “In the Spirit of Crazy Horse: Rebirth of a Sioux Nation.” It has several articles dealing with the PineRidge Reservation. There are several pictures of young people on the Rez dealing with the suicide of their friends. It discusses the closeness of the people, while they struggle with constant unemployment. And it talks about the exploitation of the people of PineRidge by the alcohol establishments in White Clay, Nebraska. It is a “zone of sacrifice.”

Chris Hedges and Joe Sacco have written a book entitled, “Days of Destruction – Days of Revolt.” Below is the description of the book from Amazon.com.

“Two years ago, Pulitzer Prize winner Chris Hedges and award-winning cartoonist and journalist Joe Sacco set out to take a look at the sacrifice zones, those areas in America that have been offered up for exploitation in the name of profit, progress, and technological advancement. They wanted to show in words and drawings what life looks like in places where the marketplace rules without constraints, where human beings and the natural world are used and then discarded to maximize profit. Days of Destruction, Days of Revolt is the searing account of their travels.”

This fascinates me, and I will be buying this book. Free Enterprise is an economic system, we will make it a moral event if we decide that business involves mission. In other words, act efficiently, and use profit for good. This is better than having the government take it from us to do the same thing.

And that is my thought for the day!