Bribery and corruption

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Earlier this year both houses of Congress voted to nix a bi-partisan law that would have forced US oil, gas and mining companies to disclose annually, and project by project, royalty, licensing and backhanders to foreign governments. As you can imagine the American Petroleum Institute labelled this more big government interference that puts US companies at a competitive disadvantage. Trump naturally agreed. He and his friends are fiercely hostile to any moves to prevent corruption.

Actually corruption is bad for business, which thrives when there is a level playing field. Corruption is believed to equate to 5% of global GNP every year – about $2.6 trillion (yes, you read it correctly!), and raises the cost of doing business by 10% per annum. Bribes are useless – they build no roads, schools or hospitals. What they do do in developing countries is represent 3.7 times the value of global official development funds such are disbursed by the World Bank, AID etc.

The EU has insisted on companies declaring their backhanders, and about 120 companies have complied, revealing $150 billion worth of “off balance sheet ” payments. Now that the Great Oligarchy has abandoned transparency and decency these companies will clearly be allowed to revert to their previous behaviour.

Note: twice in my life as a businessman I was asked point-blank to bribe a customer in return for a large contract. In both cases I flatly refused. I mention this because it is not just the huge international corporations that are playing this game; it is rife throughout industry, down to quite small companies. The playing field IS NOT LEVEL!

It is small comfort that everyone is doing it and, indeed, you cannot build a big corporation anywhere in the world without graft and corruption. The whole American political systen is based upon favours in return for campaign cash, which I consider corruption. Oil, gas, major construction and many other industries thrive on it, a sad fact of life. Speaking personally, even before I bacame involved in Epicureanism I had decided that I felt more comfortable running a business ethically, and leaving the pushy, greedy types to get on with it. One has to live with one’s conscience.

Unwinding gerrymandering

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The method of fairly fairly splitting a cake between two people is tried, tested and mathematically proven: one person cuts the cake and the other chooses which slice they get. To get the biggest piece of cake possible, the cutter must split it fairly resulting in no hard feelings between the two eaters.

In US politics, however, cutting states into electoral districts doesn’t have a similarly fair method. The political party in charge often decides where the electoral lines are drawn and does so in such a way as to gain an advantage. This is gerrymandering.

A team at Carnegie Mellon University, Pennsylvania have devised a way to extend the cake cutting technique to redrawing electoral districts to make the system fairer. It allows both parties to act in their own self-interest, butstill results in an outcome that is mathematically fair. It works as follows:

One political party draws an electoral map that divides the state into the agreed number of districts. The second party then chooses one district to freeze so that no more changes can be made to it by either side. It then redraws the rest of the map. Once the new map is complete, the first political party freezes one of the new districts, and redraws the rest of the map again. This continues until every district in the state is frozen. In Pennsylvania, for example, this would require 17 cycles as there are 18 districts.

One would have to account for the Voting Rights Act, which protects voting rights for racial minorities. The authors suggest that this could be checked after the process is finished, in the same way that new districts are checked now. (an edited version of an article by Ariel Procaccia, Wesley Pegden and Dingli Yu, of Carnegie Mellon University, Pennsylvania,arxiv.org/abs/1710.08781, and Timothy Revell of the Mew Scientist)

Am I being too cynical if I say that many modern politicians are not interested in fairness. They are interested in power, and staying in power. Go back fifty years and this proposal might have interested the political parties, who, at the time, genuinely sort-of believed in democracy. Pity the Supreme Court won’t take up the idea, but of course it was the Supreme Court that brought us Citizens United and put up the country for sale, so forget that. And in any case constituency boundaries are State concerns, not Federal. Looks like we are snookered. Now the Republicans and Democrats can barely agree on the date, never mind fair elections. Bye bye democracy. You were good for us while you lasted.

Privatisation in healthcare is un-Epicurean

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“Earlier this year, the Justice Department filed a lawsuit, based on evidence from a whistleblower, against United Health Group, the largest provider of subsidised private medical insurance for the elderly, accusing it of overcharging the government by more than $1 billion, claiming patients were sicker than they actually were.

“The FBI estimates that fraud, both private and public, accounts for up to 10 per cent of total US healthcare expenditure, or about $350 billion, of the annual $3.54 trillion that Americans spend on healthcare. The scale of medical fraud in the UK is still small by comparison, but some of the companies that have paid huge fraud fines in the US – including UnitedHealth, McKesson, Celgene and the Hospital Corporation of America – are becoming increasingly involved in British NHS privatisation schemes, in accordance with the government’s wishes.

“In Britain the Health and Social Care Act, passed in 2012, was intended to increase privatisation, outsourcing, inter-regional competition and ‘marketisation’ in an already strained system. There is little sign that it is improving services or reducing costs, but private firms see profits to be made.” (Dave Lindorf, London Review of Books, Nov. 2017).

Improve services and reduce costs? It won’t. Never does. The bosses capture the savings
for themselves and,to a lesser extent, the shareholders.

In the United States the medical system is a dog’s dinner (which unfairly casts aspersions on dogs and dinners). Tens of thousands of people will shortly have no medical cover (who cares? – the election donors are happy). The whole system is a bureaucratic nightmare, designed to make profit first and heal the sick second – and few (except Bernie and his supporters) have caught on. The worst are the profiteering drug companies who are actively fuelling the opioid death crisis, while bribing Congressmen to turn a blind eye. Trump has appointed the CEO of one of Eli Lilly, one of the biggest pharmaceutical companies, to oversee Health & Human Services, a case of the fox guarding the chicken run.

I know I discuss healthcare frequently, but it is with good reason. The American system is over-commercialized, caters to special interests, is extraordinarily expensive and results in a shameful level of national life expectancy. And the advocates of the present system are proud of that?

Offensive language on the web

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Reddit supports longer and more complex discussions than Facebook or Twitter, and, unlike Facebook, it does not require you to disclose your identity.

Researchers analysed 3.5 billion comments on Reddit from 25.3 million people between 2007 and 2017. They sorted the comments into two groups: one non-political, the other comprised of things posted to politics subreddits. Noting the frequency of offensive words and phrases gave a measure of how civil the discussions were.

The non-political comments were fairly civil. The political comments were not. People were 35 per cent more likely on average to use offensive language in political than nonpolitical discussions. Political discourse was more offensive between May 2016 and May 2017 than in any other 12-month period in Reddit’s history.

To analyse the complexity of the comments, the researchers found that discourse in political groups had dropped on average from seventh-grade (age 12) to first-grade (age 6) levels since 2007 (arxiv.org/abs/1711.05303).

What accounts for the changes? The researchers identified a large influx of new users to Reddit’s political groups, which may have lowered the average level of linguistic complexity. Also, there were many users who had previously been active only in extremist groups, who now posted regularly in mainstream groups. Such users can take control of the tone or direction of conversations. Another growing group of Reddit users is likely to be bots, who post automatically.

Isn’t it time to give up the idea of freedom of speech if what that phrase has encouraged is vile, sexist, racist and abusive language?p Al these things should be banned, excised from the websites where they occur. It is a simple matter to ban the ignorant and the puerile – they reduce us to the status of animals, which is very unfair on animals.

The future of the Euro

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As I mentioned in yesterday’s post, the Eurozone economy is growing surprisingly well. The countries of Southern Europe are recovering strongly from the recession and sovereign debt crisis, and now all of them are growing at a faster rate than an increasingly lethargic Britain. However, there is a broad consensus that the Eurozone is vulnerable any future economic shocks. The interest rate is 0.05%, and Euro rules forbid a big bong buying programme, significant quantitive easing or any sudden currency devaluation, making monetary stimulus virtually impossible. Unlike other currency unions, the Eurozone has no central authority with control over fiscal policy. So if a region needs bailing out, it cannot be done quickly and effectively.

There are a few responses to this conundrum. The first would be some form of fiscal union, as advocated by Emmanuel Macron, Martin Schultz and most of the pro-EU social democrats. Eurozone members would pay into a common budget, which would then be used to redistribute wealth, offsetting any potential losses of being a part of a common currency. Thus, the benefits of the Euro would be maintained, while preventing any countries from falling too far behind. This already happens in the United States, where federal funds are used to subsidise poorer states, while maintaining the strength of the dollar for the country as a whole.

The European Commission opposes those reforms on the basis that it would empower the European Central Bank and the potential new office of a Eurozone finance minister at the Commission’s expense. Thus, a two-tier Europe would be created. Instead, the Commission wants any fiscal powers to be under their control. The problem is that virtually all of the EU’s member states are opposed to giving the Commission that much power. Germany would prefer any permanent bailout mechanism to be an intergovernmental instition, and thus subject to a German veto.

The overall point is that no one can agree on what Eurozone reform should look like, even if everyone agrees that reform is needed. Amongst those who want more integration, they cannot agree as to whether it is the Commission, a new Eurozone system of governance, or an intergovernmental monetary fund that should hold any additional powers. There is a small minority of people who would go even further and create a federal EU, or ‘United States of Europe,’ though that is a fringe position. Then there are moderately Eurosceptic fiscal conservatives who oppose Eurozone integration, because it would result in permanently higher taxes for wealthier countries, even if the benefits of an artificially weak and widely used currency offset those additional taxes. Then of course, are those who would abolish the Euro, but again that is a fringe position.

My problem with the Euro is a lack of trust. There are sensible rules regarding keeping deficits down and honestly reporting how much your country is raising in taxes. But prior to the recession, many countries, Greece especially, broke those rules. As a result, any further Eurozone integration is problematic if irresponsible countries will use the privilege of fiscal union and low interest rates to borrow recklessly. I agree with the fiscal conservatives- there shouldn’t be any pan-European redistribution of wealth, however temporary or irregular. If some Eurozone members find themselves unable or unwilling to comply with the Euro’s rules, then they should leave. If that upsets the countries who want the benefits of the Single Currency without accepting the risks, or the fringe group of federalists who regard any country leaving the Euro as a disaster, than so be it.

For more information, I would read this FT article https://www.ft.com/content/47c734d8-e1af-11e7-8f9f-de1c2175f5ce. But I believe the article makes too strong a distinction between Macron and Schultz’s believes, which regarding the Euro, are essentially identical.