Category Archives: Nevada politics

Justified, Necessary, or Both?

The police action in Sparks, NV might be controversial, but the Washoe County District Attorney has ruled the officers were justified in shooting, and killing, an armed 45 year old woman with a blood alcohol level of 0.127 in October, 2013. [RGJ]  The wounding of the woman’s daughter may generate more controversy, but the incident illustrates some of the major issues surrounding the use of lethal force by police officers.

The woman in question was threatening suicide.  There may be no more frightening situation for law enforcement personnel than facing someone who feels there is nothing left to lose. Individuals have been reported as deliberately assaulting officers while unarmed or while brandishing a variety of lethal and non lethal weapons. Some, perhaps up to 100 per year are intent upon having the police officer assist a suicide. [PSMag] Whatever the woman’s intent, let’s avoid using the catch-phrase “suicide by cop,” because it’s an undefined, unclear, categorization into which altogether too many incidents can be inserted which may or may not resemble one another in detail. [Slate]

What is reasonably clear from the report is that the woman was pointing her gun at her own head at one point in the confrontation, and threatening to end her life.  Suicidal ideation is one symptom of mental illness, and in entirely too many cases we are asking the police to serve as mental health professionals, a task for which they aren’t trained.

The fatal shooting of a homeless, mentally ill, man by the Albuquerque, NM police generated criticism of the officers’ use of lethal force last March, but it also highlighted the growing number of instances in which mentally ill individuals – lacking adequate local mental health services – are coming into contact with police agencies. [NYT]

There are training programs available for police officers, such as the NAMI Crisis Intervention Team model.    The Las Vegas Metro PD is working with NAMI-Southern Nevada to develop a collaborative pre-arrest diversion program based on the CIT model. [NAMI-SN] The Reno Police Department also has such a program. [UMemphis]  Smaller, more rural, Nevada counties may or may not have a CIT program in place. [UMemMap]

There is research indicating that the training works.  CIT trained responders were more likely to be engaged in “referral or transport” than in an arrest, and only 12% of the encounters in the study escalated to the level of physical force, and CIT trained personnel “were significantly more likely to report verbal engagement or negotiation as the highest level of force used.” [AJP pdf]

However, it would be remiss not to ask: How much effort is being put into alleviating the necessity of having expansive CIT programs? How many resources does the community provide for the mentally ill?

We also know the unfortunate woman had a blood alcohol concentration level well above Nevada’s general 0.08% limit.  We don’t know whether in this specific case alcohol was a constant or a periodic problem, and it really doesn’t matter individually, but collectively speaking it does raise the question of how well resourced and available alcohol treatment programs  are in the area?  Are they plentiful and affordable? Are they convenient in terms of access or are there long waiting lists and limited treatment facilities?

This case in Sparks, NV also requires some reflection on several other issues. For example, is the “suicide by cop” categorization appropriate, or not?  Are we adopting and implementing consistent training programs throughout Nevada cities and counties which might reduce the escalation of incidents into lethal territory?  Are we asking police departments and law enforcement agencies to assume too much of the burden of initial interaction with mentally ill or suicidal individuals?

As with all such tragic incidents, we’re always left with more questions than answers.

Comments Off

Filed under Gun Issues, Health Care, Mental Health, Nevada politics

Pulling Representative Heck Slowly Toward Understanding Foreign Policy

SpaghettiRepresentative Joe Heck (R-NV3) is confused about the Obama Administration’s foreign policy.  “I don’t think we have a coherent foreign policy, and that’s part of the problem,” Heck said. “We have not exercised the level of leadership around the globe as we have over the past 20 years. … The world looks toward somebody to kind of set the example. And I don’t think we’ve been setting the example that we have set previously.” [LVRJ]

First there’s a big difference between something which is incoherent and something with which there is disagreement.  The limited engagement portion of what’s lumped together as Obama Doctrine isn’t too difficult to comprehend.  Unilateral force will be used if there is a direct threat to the United States.  That wasn’t too hard, was it?

Indirect threats will be met multilaterally and not necessarily with the use of maximum force in each instance.  If force is to be used, it should be in a very precise way.  [FP] Also not all that hard to understand.  In case Representative Heck is still confused, let’s apply some examples.

ISIL: A direct threat to Americans or American interests. IS attacks threatening Americans and American interests in Iraq, especially in the vicinity of Erbil in Kurdish controlled areas presented a direct threat to Americans in the region.  Response? Air strikes.  So far so good.  IS momentum in the area has been blunted and American lives and interests protected.  Humanitarian aid and the rearming of the Peshmerga forces associated with the mission was augmented by efforts from the British, the French, and the Germans.  Multilateral, targeted, minimal force applied to secure desired results.  What’s confusing about that?  But, what of indirect threats?

Libya:  What should be done in cases of threats to global security? Once again, we find the Administration employing a multilateral approach. In 2011 an effort by the U.S., Canada, France, Italy, and Great Britain (in a coalition ultimately including 19 nations)  coordinated a campaign of air strikes, naval blockades, no-fly zones, and logistical assistance to Libyan rebels. It worked.

Syria: The civil war in Syria presents a more complicated problem for nations which perceive the situation as a threat to global security.  The Assad government has close ties to Russia, and the rebel groups range from small inexperienced moderate elements, to criminal gangs, to extremist groups, to the really extremist groups like ISIS.  Coalitions, alliances, and coterminous realignments and the creation of new coalitions, make this a very fluid situation.  Problem One was to get the stockpiles of chemical weapons out of the game.  Mission accomplished. Last month a Danish ship delivered the last 600 metric tons of chemical weapons to a U.S. ship (Cape Ray) at an Italian port, where the chemicals will be destroyed. [CNN] Multilateral. Minimal use of force (a show of force at one point) with a maximum use of diplomacy, combined with a specifically focused mission.

Calls for arming the anti-Assad rebels is a simplistic response to a complicated problem.  In December 2013 the BBC published something of a roster of Syrian rebel forces for those wishing to keep track of the players.  There’s a coalition now called the Supreme Council of the Free Syrian Army, the good news is that this is a relatively moderate group, but the bad news is that it is composed of some 30 different militias which retain their own operational independence, command structures, and agendas. In short it is a very loosely joined network of independent brigades. Then there is the Islamic Front, another coalition of about seven groups which wants to topple the Assad government and devise an Islamic state.  This is not to be confused with the Al Qaeda or jihadist groups, such as the Al Nusra Front, and the Islamic State.  But wait, we haven’t listed the independent groups such as the Ahfad al-Rasoul Brigades, Asala wa al-Tanmiya Front, or the group often associated with the Muslim Brotherhood in Syria, the Durou al-Thawra Commission.

Now, just who is it that the U.S. might want to arm?  And by the way, Syria is about 64% Sunni, about 20% of whom are Kurds, Turkomans, Circassians, and Palestinians.  The Shia represent most of the other Muslims in Syria, and are divided into three groups: Twelvers, Ismailis, and Alawis.  And then there are the recently discovered by the foreign press —  Yazidis.

Now Representative Heck might want to ask himself: Does he prefer a policy which keeps U.S. interests in mind in Syria by making maximum use of diplomatic multilateral efforts and a minimal infusion of force; or would he prefer getting the U.S. mired in another swampy situation in the Middle East?

If one’s idea of a coherent foreign policy is one of moving in with a maximum use of unilateral force — and with minimal consideration of the consequences — then the Obama Administrations doctrine isn’t going to meet with one’s approval. And, that’s the question which needs to be answered by Representative Heck — If you don’t like a mission specific use of force, applied in conjunction with a multilateral diplomatic and military effort, then what do you want?

The bellicose blustering of the Bush Administration sounded coherent, but ultimately proved to produce incoherent results.  Witness our next example: Iraq.

Iraq: A nation created in the wake of World War I, with significant religious and political internal differences, formerly governed by an intransigent and despicable (albeit secular) dictator, crumbles after Sunni populations in the north and west perceive the Shiite government in the south (Baghdad/Basra) to be ignoring or damaging their interests. Kurdish populations in the northeast see the Shiite government as inimical to their interests, and the compliment is returned by the southern Shia.

The removal of ISF military leaders who are Sunni or former Baathists by the Maliki government creates a security force (army) of questionable utility.  The question is answered as the Iraqis try to form a new government in July-August 2014, and  ISIL moves from Syria into ‘friendly’ territory around Mosul.  ISIL (IS) attracts support from local Sunni groups alienated by the Maliki government, and radicals from surrounding territories.

The fractures in the Iraqi political system, fully identified in a policy review with General Odierno in 2010, are visible today. [FP]  Our goals as set forth in 2010-2011 are to (1) encourage reconciliation, (2) help develop a professional civil service, (3) promote a healthy relationship between the parliament and the executive, and (4) to support the reintegration of refugees and displaced persons.  [FP]

Recent actions by the Obama Administration have sought to get the Yazidis to safety (a multinational effort), re-arm and supply the Peshmerga (a multinational effort), and get the Maliki government in the rear view mirror in order to restore the government and the Iraq Security Force into working order.  Is this too complex for Representative Heck to ponder?

How about we set an example of using multinational cooperation to  diminish threats to global security by applying the least force appropriate in the most multilateral format possible?  Is that too difficult to understand?

Carry a Big Bull Horn and Do What With It?

But wait, Representative Heck’s apprehensions go even further:

“Heck said a lack of follow-through on U.S. threats makes America appear weak. He didn’t cite Syria, but President Bashar al-Assad suffered no serious repercussions for using chemical weapons against his own people.

“Our adversaries need to know that if they do X, then the U.S. is going to do Y,” Heck said. “And there has not been that consistency. That’s why you see actors, not only in the Middle East, but also Russia and China, push the limits.”  [LVRJ]

Breathe.  Did Representative Heck miss the part where the Danish ship met the U.S. ship in the Italian harbor — and Assad doesn’t have his chemical weapons anymore? The serious repercussion is that Assad can’t use his chemical weapons on his own people anymore because he doesn’t have them.  He’s down to barrel bombs.

Breathe, and let the breath condense on the crystal ball Representative Heck seems to have about the intentions and actions of foreign parties. If we tell people we’ll do Y if they do X — What are X and Y?

Let’s explore some of the implications of Representative Heck’s simple formula, in the application of the administration’s doctrine: Indirect threats will be met multilaterally and not necessarily with the use of maximum force in each instance.

Putin moves against Ukraine.  There is no direct threat to the United States therefore we will address the threat multilaterally and not necessarily with maximum (military) force.  Multilateral action is messy, can be slow, doesn’t make for dramatic headlines, and certainly isn’t conducive to the bellicose bluster approach. However, in this instance it’s a far better approach.

For example, the U.S. does about $160 million in trade with Ukraine, [Cen] by contrast Germany’s trade with Ukraine is estimated at $10 billion. [Siemens pdf] If economic interests are placed in the “threat” category then Germany has far more at stake in the problems between Ukraine and Russia than we do.  So do China, Belarus, Poland, Turkey, Italy, and Hungary. [Bloomberg]

But, but, but, sputter the critics, Putin moved into Crimea and we didn’t do anything.  Come to think of it, neither did the Ukrainians — possibly remembering Crimea was attached to Ukraine in 1954 as a matter of Soviet administrative convenience, and when the Soviet Union collapsed in 1991 Crimea negotiated terms which allowed it to be an autonomous republic. [AJAM]

While the Russians (Putin) continue to threaten interference with Ukrainian sovereignty, the latest efforts have been rebuffed.  The Russians are putting out the story that the destruction of an armored column is a fantasy — the Ukrainians have another version of events, one in which they destroyed at least half of it. [HuffPo] Meanwhile, the notion of sending arms to Ukraine sounds a bit like carrying coal to Newcastle — at one point Ukraine exported arms to Russia, included in a total of $1.3 billion in arms sales each year. [Bloomberg]

Perhaps there’s not enough drama in the careful ratcheting up of economic sanctions to cool the blood of those who, like Representative Heck, are unable to comprehend the current foreign policy direction of the Obama Administration?  However, it’s not like the Russians didn’t get some warnings as the sanctions were slowly increased until they started to hurt Russians in their grocery stores. [USAT]  Yes, Mr. Putin, if you continue to threaten (X) Ukraine, the western nations will (Y) hit you in the grocery baskets.  Worse still for Mr. Putin’s plans, the Germans, who have taken their own economic interests into consideration during the maneuvering, are now taking a much stiffer stance. [NYT]

Now, what part of Indirect threats will be met multilaterally and not necessarily with the use of maximum force in each instance. isn’t clear?

China? It’s difficult to tell what Representative Heck might be talking about, other than a generalized appeal to the old Yellow Peril line of jingoism.  However, let’s give him the benefit of the doubt and assume that he knows we’re monitoring what is going on between the Philippines, Vietnam and the Chinese regarding the South China Sea. [Reuters] And, that’s what we’re doing — monitoring to see if there has been or will be a de-escalation of tempers in that region.  We will be working with Australia, the Philippines, Vietnam, and China to resolve differences — meaning we will adopt the position that Indirect threats will be met multilaterally and not necessarily with the use of maximum force in each instance.

Perhaps Representative Heck does understand that the Obama Administration will meet indirect threats with multilateral efforts and not apply the use of maximum force in each instance — then what is the substance of his criticism?  We don’t “sound” strong enough? What does that mean? We don’t “look” strong enough? What does that mean?

Representative Heck may be indulging in theater criticism — should the President’s voice have been louder? Deeper? Should the wording of policy statements have been more aggressive? Should aggressively worded policy statements be issued no matter what our friends and allies may say?  He may assert he doesn’t agree with the foreign policy direction of the Obama Administration, but surely he can’t mean he doesn’t understand it.

Never one to be considered a softy, Gen. George Patton offered this pithy bit of advice on leadership:

“You young lieutenants have to realize that your platoon is like a piece of spaghetti. You can’t push it. You’ve got to get out in front and pull it.”

President Obama seems to have received and understood that message, Representative Heck must still be working on it. Pull too hard on spaghetti and it breaks.

Comments Off

Filed under Foreign Policy, Iraq, Nevada politics, Politics, Republicans

Defending Nothing: The Failure of the 113th

Amodei 3Representative Mark Amodei (R-Nevada Mining Association) has a point: “We need to vote on something,” Amodei said. “How the hell do you defend nothing?” [RGJ] And, the point has merit.  However, the leadership of his party in the 113th Congress hasn’t offered anything on major issues — immigration policy reform, infrastructure maintenance and construction, extension of unemployment benefits, job bills — on which to hang its hat.

The wonderful thing about having nothing to defend is that you have nothing to defend.  If nothing is done about comprehensive immigration policy reform then the GOP has no legislation to defend in the hinterlands of Teapartistan.   If nothing is done about infrastructure construction and maintenance then the GOP has no legislation to defend to the No New Taxes (Something For Nothing) crowd.  If nothing is done about enhancing or improving the Voting Rights Act, then the GOP has no position to defend with the Neo-Confederate radicals enthusiastically engaged in vote suppression. If nothing is done about raising the federal minimum wage then the GOP doesn’t have to defend its position to those who have purchased the Trickle Down Hoax on the installment plan.

Another wonderful thing about having nothing to defend is that it leaves the party free to re-litigate the past.  Don’t want to vote on comprehensive immigration policy reform? Then vote some 50 times to repeal or otherwise diminish the Affordable Care Act. [Slaughter] Don’t want to vote on raising the federal minimum wage? Then keep introducing and passing  bills on abortion (H.R. 7) and “fetal pain” (H.R. 1797).

Yet more wonders come from mislabeling bills, such as calling legislation designed to offer more tax cuts for the already unburdened as Jobs Bills. [C/L]  This past July the House passed an extension of the bonus depreciation breaks for major corporations, which does next to absolutely nothing for family owned small businesses, and proudly announced this would improve the overall economy — which it would, of course, provided that by ‘overall economy’ one means the bottom lines of major multinational corporations. [ATTP]

And then there’s the not-so-small matter of a House leadership which can’t get its own bills passed. Witness the debacle concerning the bill to alleviate immigration problems and refugee status adjudication.  House Leadership pulled its miserly $659 million measure addressing these issues this month [CNN] when it failed to herd the Tea Party cats in its own caucus.

If the 80th Congress was the Do Nothing assembly, then the 113th seems to have acquired the label of Do Absolutely Nothing.

“With it about to depart on its five-week August recess, just 142 public bills have become law in this current Congress (2013-2014) – down from the 906 the 80th “Do-Nothing” Congress passed in 1947-48, and the 333 that were enacted during the Newt Gingrich-led 104th Congress of 1995-96.” [NBC]

But wait, say the apologists for Washington Gridlock! We’re here to prevent bad bills from being passed, therefore nothing is better than something.  Evidently, “bad” is defined as anything which doesn’t meet the stringent and exact standards of Republican legislation.  Worse still, when Republican concerns are considered to attempt some compromise, House GOP caucus members are known to flee — recall the last immigration legislation blunder.

And so it goes.  And so Representative Amodei and others will continue to defend nothing. Nothing accomplished in terms of comprehensive immigration policy reform. Nothing accomplished in regard to raising the federal minimum wage. Nothing done regarding the improvement of the Voting Rights Act. Nothing accomplished with an eye toward our crumbling and inadequate national infrastructure. Nothing to approach the wage and salary gap between male and female employees. Nothing.

Somewhere, someone, may be considering a reprise of the 1961 hit “How To Succeed In Business Without Really Trying?”

“I will someday earn my medal:
Twenty-five year employee.
I’ll see to it that the medal
Is the only thing they’ll ever pin on me.”

Comments Off

Filed under Nevada politics, Politics, Republicans

A New Effort Demonstrates The Need For More

Domestic ViolenceIn the midst of all the current turmoil and related teeth gnashing ranting and railing associated therewith, it’s nice to find some heroes.  A UCC church in Las Vegas makes the news today with its plan to assist victims of domestic violence, regardless of their gender, race, or creed. [LVSun] Granted domestic violence is mostly associated with protecting women from abusive spouses, but that doesn’t mean it’s restricted to that category.  So, a large round of applause to the little church trying to make a difference in this problematic issue:

“A 2010 study by the Centers for Disease Control and Prevention found that bisexual and lesbian women were more likely to experience domestic violence than heterosexual women, and bisexual men were more likely to experience sexual violence than heterosexual men and gay men, who have similar rates.” [LVSun]

All the better since the re-authorization of VAWA in 2013 which finally recognized there might be a problem for members of the LBGT community and for members of Native American tribes.  To their credit, both Nevada Senators Reid and Heller voted in favor of the measure [GovTrak].  The final vote in the House showed all four members of Congress from Nevada voting in favor of the bill. [GovTrak] The measure passed on a 286-138 vote, all the nays coming from the Republican side of the aisle.

As described in a Department of Justice release, the re-authorization of VAWA addressed a serious problem in this country, and the inclusion of provisions for Native Americans was long overdue:

“In 2010, U.S. residents age 12 or older experienced an estimated 20 million violent and property victimizations, according to the National Crime Victimization Survey (NCVS). (NCJ 235508) These criminal victimizations included an estimated 4.3 million violent crimes defined as rape, sexual assault, robbery, aggravated assault, and simple assault. Almost 126,000 of the 1.4 million serious violent crimes were rapes and assaults. While this number has decreased over the last few years it is still shows that too many women are endangered and suffering. [...] American Indians are 2.5 times more likely to experience sexual assault crimes compared to all other races, and one in three Indian women reports having been raped during her lifetime.” [DoJ]

The Department of Justice was correct in reporting the disparity in the statistics regarding the physical abuse experienced by Native American women.  Some of the numbers are patently outrageous.

 In a 2008 CDC study, 39% of Native women surveyed identified as victims of intimate partner violence in their lifetime, a rate higher than any other race or ethnicity surveyed. This finding has been common over the years. A study from 1998 that utilized a large national probability sample (n=8000) found that American Indian/Alaskan Native American women were the most likely racial group to report a physical assault by an intimate partner. [FWV.org pdf]

And: ” According to the Bureau of Justice Statistics, US Department of Justice, Office of Justice Programs at least 70% of the violent victimizations experienced by American
Indians are committed by persons not of the same race— a substantially higher rate of interracial violence than experienced by white or black victims.” [FWV.org pdf]

One of the issues for Native American women in Nevada is distance. There are domestic shelters in all major Nevada towns and cities, but some of these are at no small  physical distance from reservations.  The rural fishbowl effect creates another dilemma.  If a shelter is located in the immediate vicinity everyone knows of it — just as they know about every other thing that happens. If the shelter is located far enough away to secure some anonymity the victim may not have the transportation options available to get there.

In the best of all worlds, we would consider ways to alleviate the need for shelters for victims of domestic violence, urban or rural.

While some of the lists vary, most sources focus on the following elements of spousal abuse behavior.   A 1998 study reported by the NCBI observed:

“The present study compared male spouse abusers, with and without alcohol problems, with age-matched, nonabusive males on measures of personality style, personality disorder, dysphoria, and a number of demographic measures. There were no differences among the groups in racial composition, religious preference, or religious devoutness. Male abusers were less likely to be employed, to be in intact relationships, and were less well educated. They were more likely to have witnessed abuse or experienced abuse as children, although that observation is more characteristic of abusers with alcohol problems. Measures of personality and psychopathology generally supported the hypothesis that abusive males would show greater elevations on test scales reflecting personality disorder and dysphoria and less conformity than nonbatterers. Alcohol abuse was related to greater batterer-nonbatterer differences.”

Translation: Batterers come in all races, creeds, and kinds. They are generally unhappy people, less likely to have steady employment, and more likely to be repeating abuse they witnessed as children.

The batterers tend to try to excuse their behavior — the drinks made me do it defense — and often try to deny that the behavior has any lasting effect on family or personal relationships.  Three other terms associated with battering are possessiveness, jealousy, and domination. [NCCAVA]  The use of violence is a learned behavior, a repetition of childhood scenes, or the continuation of behavior which is not confronted, curtailed, or contained.  Battering is also associated with overall low self esteem and poor communication or interpersonal skills. [NCCAVA]

If this sounds like a mental health issue … it’s because it is.  And, this is not territory in which the state of Nevada has exactly covered itself in glory.  FY 2010’s $184 million sounds like a large figure until it’s broken down per capita and the allocation was  41st in the nation with $68.32 allocated. [GovSL]  The national average per capita expenditure in 2009 was $122.90. [NAMI] The NAMI looked at state budget appropriations by state from FY 2009 to FY 2012 and reported Nevada’s proposed expenditures declined 28.1%, down from $175.5 million to $126.2 million. [NAMI] These reductions put Nevada back at the top of the list for budget cutting of mental health services, along with South Carolina and Alabama. [NAMI]

Unfortunately, in an Age of Austerity, in which public allocation of tax revenues are perceived as expenses rather than investments, there is less incentive to be “the best.” Doing just enough to get by appears preferable? If Nevada would like to be known as the state with the least need for domestic violence shelters — for anyone and everyone — then some soul searching is in order.

Have we equipped and staffed our public schools with the resources to identify, diagnose, and treat children who are in households experiencing domestic violence?  Have we required that private school counterparts do the same?

Have we allocated the necessary resources to help schools, local governments, tribes, and community organizations provide assistance to families in which domestic violence occurs?  Can we offer these entities coordinated programs to promote education, address bullying behaviors, decrease instances of domestic violence?

Have we done enough to provide jobs for those who find their economic circumstances so stressful that violent behavior comes from their lack of personal control as they cope, or not, with the frustration?

The victims of domestic violence, Native American, non-Native, members of the LBGT community, or straight, men and boys, and women and girls, shouldn’t have to wait until that mythical day upon which the magic of trickle down hoax economics kicks in and all will be right with the world.  These men, women, girls, boys, need assistance now — and not in some utopian ethereal world yet to come.

Our Thanks to the members of that Las Vegas UCC church for making life a little bit easier for more people to receive more support.

Comments Off

Filed under Nevada politics, Politics

Cracks in the Economic Mirror

cracked glassWhy not come out and say it? Wall Street is not your friend. At least it’s not your friend if you are among the group casually known as American Workers.  I know, much has been said about our “Nation of Investors” and how millions of Americans have a stake in the financial markets.  [SEC] However, all that palaver papers over the obvious.  Wall Street’s financial markets are dominated by institutional investors, and such connection as the average American does have is often limited to the tertiary strings which attach to retirement savings accounts and pension funds.

There are forces which generate revenue for Wall Street investment houses that have a negative impact on those American Workers, for example — when Walgreen Inc. decided to eschew a corporate inversion, keeping its headquarters in Chicago the Market pounced and instead of rewarding the company for maintaining its American identity and retaining its American workforce at the Chicago HQ the Wall Street Wizards dumped its stock. [CBS]  More examples?

Merck, Cisco Systems, AOL, HP, Citigroup, Bank of America, and Wells Fargo — all companies which were rewarded by Wall Street for cutting expenses (read employees). [MoneyCNN] Cost cutting (read layoffs) will be rewarded because…? If revenues are at least stable and expenses are reduced there will obviously be more profits for shareholders.  If Wall Street has an anthem it must be “Onward Shareholder Value.”

The problem with marching to this tune is a loss of corporate focus.  Henry Ford’s big idea was to manufacture automobiles.  Merck may be the oldest pharmaceutical company in the world, beginning with Friedrich Merck’s purchase of an apothecary shop in 1668 — a firm which grew to sell the first commercial small pox vaccine in the United States in 1898. [Merck]  Henry Wells and William Fargo started their San Francisco business in 1852 offering banking and express services. [WF] In each of these instances the founders, whether a middle western mechanic, the descendents of an apothecary owner, or the bankers during the Gold Rush, opened their doors to provide products or to deliver a service.

A firm gets to be an institution by providing goods or services, sold to people who need or want them. There is no other way to build a business.  However, when the management of a company is more interested in the stock price than in the goods or services rendered to the public we start to see the cracks in the system.

The mythology takes over — We, say the managers, must guarantee to our shareholders (owners) the highest possible return on their investment.

Crack Number One:  How long must one wait for the return on the investment?  We have a relatively recent example of what happens when the management of a commercial enterprise decides to cash in on quick returns instead of waiting for long term results. Back in 2003 CBS News asked “Who killed Montana Power?”  The short answer is the management. Montana Power management took a blue chip company, a formerly solid investment, a source of economical electric power, and transformed it into … a disaster.

Crack Number Two: Institutional and professional investors aren’t investing in long term corporate strategies which they expect to grow over the next 90 years. They are instead attuned to the quarterly reports, the earnings estimates, and the pronouncements of the analysts.  Volatility, not stability, is the key to high and quick returns. Stability protects long term investors, volatility rewards short term speculation. [BusIns]

Crack Number Three:  When the Finance Department meets the Production Department who wins?   In the 1990s the financial sector accounted for about 20% of all corporate profits, by 2011 the sector rebounded from the Mortgage Meltdown and accounted for approximately 29% of all corporate profits. [HuffPo] The process happens in the remainder of the economy as well. Consider the recent information coming from General Electric.

The company’s industrial division (medical equipment, oil & gas drilling equipment, aircraft engines, locomotives, and gas turbines) reported revenue increases of 9%, its oil and gas revenues were up an impressive 25%, its financial services were up 7%.  In fact, the financial services end of the business, Synchrony Financial, is to be spun off getting GE out of the private label credit card business by 2015. Oh, and by the way — the corporation is planning to get rid of its appliance manufacturing. “Mr. Immelt made a promise to investors that the company would expand its industrial businesses and get rid of non-core segments.” [MBN]

The company formerly synonymous with nearly all things electrical is going to profit from selling off its private label credit card operations and dropping the appliances end of the business.  There’s nothing intrinsically wrong with the evolution of a corporation moving with the tides to stay profitable — but this does illustrate how a firm can move from manufacturing into financials as a core segment of its business.

Meanwhile there are several Wall Street investment banks no longer in existence that were enamored of generating fast revenue in derivatives markets and moved with another tide — out to sea.

Crack Number Four: Insert the hedge fund managers here.  Its one thing to argue for shareholder activism when speaking of the managers of pension funds, 401(k) funds, or the like, it’s quite another when the shareholder activists are hedge and wealth management types.  The Harvard Business School issued a report (July 9, 2014) coming to the following, rather depressing conclusion:

“As in prior research, we find positive announcement-period returns of around 4% to 5% when a firm is targeted by activists and a 2% increase in return on assets over the subsequent one to five years. We find that activist directors are associated with significant strategic and operational actions by firms. We find evidence of increased divestiture, decreased acquisition activity, higher probability of being acquired, lower cash balances, higher payout, greater leverage, higher CEO turnover, lower CEO compensation, and reduced investment.”

We can lump “increased divestiture, decreased acquisition, higher probability of being taken over, more debt, and less investment” under the general category of short term interests.

What is a pension fund or 401(k) administrator to do?  If pension funds, both public and private, are to be invested in corporations increasingly likely to be managed for short term revenue results, and those results are all too likely to be hinged on a swinging door of price volatility; and, if corporations are more likely to be managed with an eye toward the financials, coupled with increased divestiture and greater leverage — how does one invest for the long term in a short term environment?

So, here comes the dilemma.  The fund managers and administrators may decide to swim with the sharks — to go along with the short term investment strategies and applaud the volatility of the financial markets.  However, we’d have to ask: Does the very volatility of the markets or the acquisition of more indebtedness actually work against the best interests of the people who are paying into those retirement or pension funds?

Those who are now working, expecting retirement benefits or pension payments, seem to be at the mercy of a financial sector which rewards their layoffs and applauds the divestiture of their firms.  The message is reflecting from a cracked mirror: If you are lucky and the financial markets are up on your 65th birthday you can retire — If not?

Comments Off

Filed under Economy, Nevada economy, Nevada politics

Playing with the Numbers: Party Affiliation Trends and Nevada Numbers

There may be much made of polling numbers coming from the mid-July efforts of Gallup concerning Americans’ party affiliations.  There probably ought to be a warning label attached suggesting not to consume these numbers without giving some thought to the context, and to the trends.

Party AffiliationIf we take the mid July polling from the past ten years and plot it out the numbers shape up on the graph above.  Before analysts turn the simple chart into spaghetti, here’s the obvious:

(1) There are now more people who declare themselves to be Independent voters than at any point in the past ten years.  The percentage has increased from 27% in mid July 2004 to 45% in mid July 2014, for an overall increase of 18%.

(2) The percentage of individuals who self identify as Republicans has declined from a high of 35% in mid July 2004 to 23% in mid July 2014, or an overall decline of 12%. However, before assuming this to be a continuous and uninterrupted downward trend, note that GOP affiliation percentages stood at 29% in July 2011, and 31% in July 2006.

(3) The percentage of individuals identifying as Democrats was 36% in July 2004, and now stands at 29%, for a 7% overall decline.  Again, take some caution, because the percentage of those who called themselves Democrats was 37% in 2009.

(4) The mean of Republican affiliation over the ten year period  is approximately 28.18%, that of Independents at 36.9%, Democrats at 32. 81%. Those “leaning Republican” averages out to 41.36%, and those “leaning Democratic” averages out to about 47.35%.

Warnings:

It’s entirely too easy to say the decline in Party affiliation is a direct function of the increase in Independent identification. For one thing, the polling doesn’t take into account new voters.  We don’t know from the basic numbers whether the person answering the pollster is a “new” voter or a person who has been voting since 1960.  We can get a general idea of the political landscape from the charts and figures, but some care should be applied before jumping to definitive conclusions.

Another caveat that bears repeating is that Party affiliation doesn’t guarantee turnout.  There’s an entire cottage industry devoted to implementing turnout strategies to attest to that truism.

What shouldn’t come as any surprise is that local voting registrations tend to mirror national trends, and Nevada is no exception:

“Nearly 15,000 Nevadans registered to vote in July 2014, with more than half choosing to identify as nonpartisan, as shown by numbers released today by Secretary of State Ross Miller’s Elections Division.  Of the 1,184,251 active registrants statewide, 40.41% (478,598) are Democrats, 34.93% (413,615) are Republicans, 18.43% (218,267) are nonpartisan, 4.73% (56,062) are members of the Independent American Party, and the remaining 1.49% (17,709) are members of the Libertarian or other minor parties.” [NVSoS]

The next question to ask is who are these voters?  One category currently popular with the punditry is age, and Nevada’s age and Party affiliation (pdf) looks like this:

Nevada voters by ageAs the graphic indicates, Party affiliation tends to increase with age, which should come as no great surprise to anyone.  However, the Democratic Party in Nevada has a lead of 22,646 over its Republican counterpart in registered voters in the 18 to 24 year old bracket.  There are 39,118 more registered Democrats in Nevada than Republicans in the 25 to 34 year old column.

If the old saw (people get more conservative as they get older) were completely true for Nevada voting registration values then we’d expect the blue column to decline as the brackets increase, but since they don’t we might conclude in this instance that non-partisan voters may tend to move into the GOP column, but in insufficient numbers to make up the gap until the 65 and over column is added.  The over 65 voters are almost evenly split with 136,983 registered active Democrats and 135,315 registered active Republicans.

Whether those of us in the outback like it or not, Nevada IS an urban state, and the registration numbers in Washoe (Reno) and Clark (Las Vegas) counties matter.

There are 355,030 registered Democrats in Clark County as of the July reports, down from 370,641 listed in the January report of active voters.  There were 253,153 registered Republicans in Clark County as of January 2014, and  248,288 listed in the July report.*

Republicans had 83,535 registered voters as of January 2014 in Washoe County, and 85,144 as of July 2014.  Democrats had 79,557 registered voters in January 2014, and 80,325 as of the July report.*

Statewide, there were 493,929 registered Democrats as of the January 2014 report, which declined to 478,598 as of the July figures.* There were 416,015 registered Republicans in the January report, and 413,615 as of July 2014.*  (*The reports are in PDF format and are available from the Nevada Secretary of State’s office here.)

And now that we’ve played with the numbers and charts — none of this makes a nickel’s worth of difference without Voter Turnout in the mid term elections.

 

Comments Off

Filed under Nevada politics, Politics

Heller Helps Sustain Another GOP Filibuster

Heller 3What if there were a bill in Congress which would do the following?

“Amends the Internal Revenue Code to: (1) grant business taxpayers a tax credit for up to 20% of insourcing expenses incurred for eliminating a business located outside the United States and  relocating it within the United States, and (2) deny a tax deduction for outsourcing expenses incurred in relocating a U.S. business outside the United States. Requires an increase in the taxpayer’s employment of full-time employees in the United States in order to claim the tax credit for insourcing expenses.”

In short — offer corporations tax incentives to bring American jobs back to America, or S. 2569.

But then, there’s the GOP side of the aisle saying things like:

“Some Republicans argue that if Democrats truly wanted to keep companies in the United States, they would work with Republicans to overhaul the tax code and reduce corporate tax rates.“It’s a bill that’s designed for campaign rhetoric and failure — not to create jobs here in the U.S.,” Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday. “Everyone knows that the Democrats aren’t being serious here.” [The Hill]

First, Senator McConnell’s taunt, that the bill is a purely political exercise without any redeeming merit, is simply a legislative version of the Ad Hominem Attack — name calling without addressing the issue at hand. Secondly, Senator McConnell’s definition of “working with” all too often means give us everything we want and we’ll still keep filibustering a measure.  To wit: The bill to require background checks and close the gun show loophole, in which the total gun safety legislative package was pared down to a single issue to appease the GOP and then the GOP filibustered the bill anyway.  Or the Affordable Care Act, originally a Heritage Foundation proposal, which after numerous amendments to assuage the concerns of Senate Republicans received no support from that quarter.

Third, there’s the matter of “working with Republicans to overhaul the tax code,” which assumes that the Republicans have a plan to overhaul the tax code.  The latest GOP tax proposal comes from the House, and would cut the top tax rate from 39.6% to 25%, impose a surtax on some  incomes above $450,000, but leave capital gains taxes at the low rate, to the benefit of hedge fund and wealth management firms. [WaPo] However, the problem with Representative Camp’s proposal is one shared with other GOP plans (health plans, budgets) – the devils haven’t been specified in the details.

The Joint Committee on Taxation analysis indicates the ‘plan’ doesn’t specify the special interest tax breaks which litter the IRS regulations will get the axe in order to make up for revenue lost in the bracket reductions.   The Camp proposal also comes with its own set of complexities, summarized in the Tax Policy Center’s analysis.  To mention just one, there’s the resurrected specter of the Alternative Minimum Tax implicit in Camp’s legislation — nothing like taking up something complicated in order to make another thing simple?

Then there’s some bad news for states, such as Nevada, which do not have a state income tax:

“Camp would repeal the deductibility of state and local taxes, including both property taxes and income taxes. He’d abolish tax-exempt private activity bonds. And he’d impose a 10 percent surtax on municipal bond interest for high-income households, a step likely to raise the cost of issuing state and local debt.But Camp’s plan also includes some less obvious changes that could increase state income tax revenues, especially for states that piggyback on the federal income tax. By limiting deductions—and thus boosting taxable income—Camp’s plan could also increase state income tax revenue, just as the Tax Reform Act of 1986 did.”  [Tax Policy Center]

No matter, the local and state income taxes, which Nevada doesn’t have, would no longer be deductible, but unless there is a state income tax on which to “piggy back” state income tax revenue doesn’t increase under the provisions of Camp’s bill.  Thus we lose the property tax deductions, and gain very little else.

Then there’s the matter of reducing the corporate tax rate. To what? There’s the statutory rate, which Republicans are fond of citing, and then there’s what taxes cost the corporations — or, the effective tax rate.  The GAO reported the effective tax rate for U.S. corporations at 12.6%.  [CNN]  Of course, the GOP response is “ya’shouldn’t hafta get a lawyer to figure out your taxes,” but that’s precisely what major corporations DO. And, they do it with a raft load of tax attorneys.  It doesn’t seem too far out of line to suggest that if the statutory rate were to be reduced to X%, the rafts of tax attorneys would be hard at work seeing how the liability might be reduced to X-Y%.

And while we’re on the subject of complicated tax codes — it does appear a bit unseemly to have the self same initiators and  protectors of tax break loopholes for corporations advance arguments that the tax code is “broken” because it is so complicated.  This would be a good time to click on over to Jon Stewart’s classic rant on tax avoiding corporations, “The Inversions of the Body Snatchers.”

However, speaking of tax breaks for corporations which bring jobs back to American shores… We aren’t going to see those because the Republicans in the U.S. Senate are successfully filibustering S. 2569, and kept their filibuster going in a vote on July 30, 2014 at 10:50 AM. The cloture motion failed on a 54-42 vote, with Senator Dean Heller (R-NV) voting along with Senate Minority Leader Mitch McConnell (R-KY) to further stall the Bring the Jobs Back Bill.

1 Comment

Filed under Economy, Heller, Nevada politics, Politics