Month: June 2010

For some years now, several companies have sold coffee-making systems that produce coffee and other warm beverages while creating a mountain of waste.  The coffee is in a sealed aluminum pod that the user inserts into the machine and voila, one cup of the coffee you selected is sent through a common dispenser into your probably Styrofoam cup.  Now these systems do not brew coffee in a different way as an espresso maker does; but rather they bring technology to the art of making instant coffee.  The pods come in an array of coffee strengths and flavors (usually artificial), and often include hot chocolate and some tea varieties.   

I have seen these set-ups from several companies in a number of homes and business, and I can see why businesses fall for this machine:

• No more arguments about cleaning up the coffee pot
• People get a wide choice of drinks
• It’s completely sanitary

I don’t drink coffee, but the tea and hot chocolate from these contraptions has always struck me as having two strong back flavors—one of coffee and the other of that general processed flavor you can taste in certain processed foods. 

And these tins will accumulate quickly and create unnecessary waste.  It’s absurd—every cup of coffee, tea or cocoa makes another aluminum pod.  Whatever the convenience factor, how can anyone justify the packaging waste this system produces.

And now the New York Times reports that Nestlé is coming out with one of these pod systems just for tea!!! 

You remember Nestlé.

That’s the Swiss food giant that promoted infant formula over breast-feeding to mothers in less economically developed countries, which led to health problems and infant deaths because of the unavailability of clean water with which to mix the formula.

Nowadays, instead of exploiting the poor, Nestlé is pandering to the wasteful tendencies of our throwaway society. 

Okay, let’s take it all in:  You buy an expensive machine plus expensive pods of tea and whatever artificial flavorings and preservatives are also in there and you create a nice cup of litter for every single cup of tea you have—all to avoid boiling water.

It makes you wonder if there are some products such as these beverage making systems that are so useless and unnecessary that they are inherently immoral.

To all individuals and businesses:  Do not buy this machine.  Buy a tea pot and a coffee maker. 

And when you run into these machines, do what I have started doing: refuse to drink any beverage from them.  You don’t have to make a big deal about it if you don’t want to be confrontational.  Don’t say why you’re not having any coffee if you feel uncomfortable about “dissing” your client or your lawyer, or your significant other’s bourgeois parents whom you’re meeting for the first time.  Just don’t drink the coffee or tea.

A common element in some recent man-made or man-assisted disasters has been the failure of risk models to predict the disaster.  The subject of risk models is a bit complicated, so let’s start with a simple definition.

Many events are caused by not one thing, but by a bunch of things.  For example, position of the earth, humidity, wind, levels of CO2 and air particulates, conditions on the ground and a host of other factors that can affect whether it’s going to rain, or how much it’s going to rain. 

Essentially, a risk model tells you how likely something is going to happen.  You set up your model as a set of mathematical equations that define measurable factors.  You then do little thought experiments:  What if we raise the temperature?  What if we assume that local factories and cars are spewing out more CO2?  What if we assume that it doesn’t rain for five years?  Changing each of those factors would give us a different answer.

Engineers, insurance companies, economists, businesses and scientists all use risk models to predict how likely something is going to happen based on the most likely or common numbers for each factor.  They then predict future behavior by changing these variables:  How many sales will we lose if we raise the price of this new product?  What will happen to traffic patterns if we double the size of the store we’re building?  How will putting a tax on sweetened drinks affect consumption and tax revenues?  What is the likelihood that Iran will have an atom bomb by 2015?  Will it cost more to fix the very minor flaw in this piece of equipment or to defend the small number of lawsuits we can expect if we don’t fix it?

But here are some recent huge risk model failures:

• A risk model was used to measure the likelihood of an oil spill occurring when using the technologies, equipment and maintenance schedule BP used on its oil rig that is currently spilling about 19,000 gallons of oil into the Gulf of Mexico on a daily basis.  That risk model said that such an accident was highly unlikely.
• Risk models were used to package, sell and buy the sophisticated synthetic investments that sent the economy into the toilet two years ago.  These models said that it was almost impossible for certain combinations of investments to fail, and when they did, large banks failed or almost failed. 
• Risk models helped state and federal budgeters for years decide they could put off fixing the New Orleans levies for yet another year.  Other risk models said that the levies were safe enough to handle even the rarest of storms.  These risk models proved wrong when the rarest of storms, Ms. Katrina, paid a visit to the Gulf coast.

Why did these risk models fail?  We of course have to entertain the possibility that some situations are just too complicated for prediction, but in many cases, it’s not the model, it’s the numbers that people crunch into the model.  If you put overly optimistic predictions in, you will get an overly optimistic result.  We saw an example of optimistic prediction in western Pennsylvania a few years back when a local university put its name on a study that concluded that passage of a funding referendum that included building new football and baseball stadiums would lead to the creation of thousands of jobs.  But when you dug deep into the study, the conclusions were based on assumptions that every new industrial park funded by the referendum would fill up to capacity in townships which had seen population and business losses for more than 20 years.  The assumptions were optimistic, so the prediction of the model was bound to fail.

There are plenty of indications that in the three examples of recent man-made or man-assisted disasters that I gave, people involved were too optimistic in their predictions.  And why?  Because by doing so, they were able to make money or save money on a short term basis.  Every day engineers, economists and other people working with risk models get pressure from their clients to come up with the results the clients want.  So they fudge on their estimates.

There’s nothing wrong with risk models, but there are many old expressions that cover what can happen when they are misused.  The acronym GIGO comes to mind—“garbage in, garbage out.”  And Mark Twain once said, “Figures never lie, but liars figure.”

Over the past week, the news media has given some publicity to two Tea Party stands that seem wildly inconsistent with its basic principles.

Let’s start with those principles, as I understand them.  I’m listing the core beliefs of its leaders and members, the few statements that come to mind as soon as you think of the Tea Party; its brand, if you will:

• Grass roots movement of the people
• Wants lower taxes
• Wants smaller government that does what the people want
• Wants more dependence on the free market

Yet in several states, Tea Party members are pushing for repeal of the 17th amendment, which mandates election of Senators instead of appointment by state legislatures, which was what the Constitution called for and was the practice in the U.S. until well into the 20th century.  There have been a number of articles on the Tea Party move to end democratic election of U.S. Senators, including two in the New York Times “Tea Party’s Push on Senate Election Exposes Limits” and “So You Still Want to Choose Your Senator?.”  A brief search also yielded articles in local newspapers like the Anniston Star in Alabama, plus U.S. News & World Report, Huffington Post and Atlantic.  One of the New York Times articles reminds us that George Will, the raving right-wing ideologue disguised as a mild-mannered intellectual, and Alan Keyes, perpetual “longshot“ values candidate,  both have proposed repeal of the 17th amendment.

The arguments for repeal are weak and include the idea that 30-second sound bites have turned elections into circuses and that with direct election of Senators, state legislations lost all their influence over Congress.  These arguments mask the basically anti-democratic nature of appointing legislators instead of having all the people elect them.  As the approximately 125-year history of appointing Senators showed, Senators tend to support the special interest groups that support their candidacy, whether the voters are all the people or just the 50-200 members of a typical state legislature. 

Why would a grass roots movement of the people want to take power away from the people and give it to government?  The Tea Party movement doesn’t like any government, so why do its leaders suddenly want to put their faith in state government?

But now for the really weird: Last weekend there were a number of rallies in the state of Arizona in favor of and against the new Arizona anti-illegal immigrant law that allows the police to stop anyone for suspicion of being an illegal alien and ask them for their papers proving they are U.S. citizens. (Do you carry your passport around all the time?  I don’t, but I guess I don’t have to since I don’t look Hispanic or Muslim.) 

It turns out that Tea Party groups from Dallas and St. Louis sponsored one of the rallies in favor of the new law.  Tea Party members were at the rallies supporting the Arizona law and not at the rallies against this carte blanche invitation to racial profiling. 

And why does the Tea Party say it’s supporting the new Arizona law.  From the New York Times  “We are doing this to crush any boycott against the free market,” said Tina Loudon, a Tea Party member from St. Louis who helped organize the rally.

It seems to me that someone in favor of a free market would not only support accommodation of illegal aliens but want to open up our borders completely.  Free means free, without encumbrance or regulation, and yet the Tea Party wants police to intervene in the free passage of people.  Furthermore, someone who doesn’t like government butting its nose into private business should not be happy with any law that puts the government into the business or regulating labor markets, and a law policing immigration certainly does that.

But these are only apparent contradictions because as a study released today by the University of Washington shows, “opposition and frustration with government is going hand in hand with a frustration and opposition to racial and ethnic minorities and gays and lesbians.”  There are about 40 stories showing on Google about the survey.  For example, the Seattle Times reported that the director of the study said, “The tea party movement is not just about small government or frustration. It’s (also) about a very specific frustration with government resources being used on minorities and gays and lesbians and people who are more diverse.“

At heart, while the Tea Party throws around concepts such as “free market,” “lower taxes” and “small government,” what the members really are concerned with is maintaining and gaining power for their concept of what constitutes what Sarah Palin calls “the real America”—in other words: white, rural/suburban and Christian.

Reading William Greider’s article titled “Whacking the Old Folks” in the most recent Nation reminded me that I wanted to list on this blog the contact information for every member of the National Commission on Fiscal Responsibility and Reform, the independent bipartisan commission that President Obama set up to address the budget deficit.

As William Greider and Nation and seemingly few others have been saying for many months, the hidden agenda of this commission may be to address the enormous federal budget deficit by gutting Social Security. This move would be disastrous because it would destroy faith in the United States’ ability and willingness to pay its debts. I can’t see how an economic system built on faith in credit can survive if the largest economic player is seen as untrustworthy, and that’s how our country will be seen if we make substantial cuts to Social Security benefits.

That’s because Social Security has plenty of money, but it’s loaned all its surplus to the federal government, a practice started in the Reagan Administration. If we assume that loan will be repaid, we have enough money in the Social Security Trust fund to last a long time, some estimates say until the 2040’s. With that loan repaid, we can pretty much make Social Security permanently solvent by some quick fixes, mainly raising the cap on income for which Social Security is collected and raising the retirement age a little. In other words, while the U.S. faces a severe deficit crisis, brought on by too many tax cuts and too much war-making, Social Security does not have a problem.

But virtually all the people like Pete Peterson who are wringing their hands that Social Security is in trouble act under the assumption that the federal government will not repay this loan. As opposed to raising income, corporate and capital gains taxes to close the deficit, Peterson and his ilk want to raid the Social Security fund and then make massive cuts to Social Security benefits, thus effecting perhaps the greatest mass transfer of wealth from the poor to the rich in U.S. history and completing the political agenda laid out by Ronald Reagan in the late 70’s.

This thinking is very short-sighted for many reasons. Even rich people who want the tax breaks and don’t need Social Security are not immune to the upheaval that will be caused when worldwide financial markets catch on to the fact that raiding Social Security is nothing more than defaulting on a loan. No one likes to do business with countries that default on loans. We saw how the recent possibility of the default of the small nation of Greece rocked financial markets. Imagine what would happen when the financial community wakes up and realizes that the United States government has walked away from a loan made by its own citizens.

Greider suggests that President Obama has filled the National Commission on Fiscal Responsibility and Reform with those hostile to Social Security. The Commission website proposes a very fast timetable for action:

“The Commission will vote on a final report containing a set of recommendations to achieve its mission no later than December 1, 2010. The final report will require the approval of at least 14 of the Commission’s 18 members.”

That means we don’t have much time to act. Below is a list of every member of the National Commission on Fiscal Responsibility and Reform, including email and/or snail mail contact. I am asking that all my readers contact every member of the commission and tell them some version of the following message:

Please make sure that the National Commission on Fiscal Responsibility and Reform recommends that the federal government repay the Social Security Trust Fund every penny it owes so that Social Security can remain solvent without major changes and the federal government can work on its real challenge, which is lowering the federal debt.

Don’t just send your note to one member, send to all. And ask your friends and neighbors to do the same. If you have a blog, post it on your blog, with all the contact information. We can’t just sit around and let politicians representing the very wealthy steal our Social Security money.

Here are the Commission members:

Co-Chairmen:
Sen. Alan Simpson, former Republican Senator from Wyoming
Hon. Alan K. Simpson
Shareholder
Burg Simpson Eldredge Hersh Jardine, P.C.
1135 14th Street
P.O. Box 490
Cody, WY 82414
asimpson@burgsimpson.com

Erskine Bowles, chief of staff to President Clinton
President
University of North Carolina at Chapel Hill
910 Raleigh Rd
Campus Box 9000
Chapel Hill, NC 27514
ebowles@northcarolina.edu

Executive Director:
Bruce Reed, chief domestic policy adviser to President Clinton and chief executive officer, Democratic Leadership Council
600 Pennsylvania Ave., SE
Suite 400
Washington, DC 20003

Commissioners:
Sen. Max Baucus (D-MT)
511 Hart Senate Office Building
United States Senate
Washington, D.C. 20510

Rep. Xavier Becerra (D-CA 31)
1119 Longworth House Office Building
Washington, D.C. 20515

Rep. Dave Camp (R-MI 4)
341 Cannon House Office Building
Washington, DC 20515

Sen. Tom Coburn (R-OK)
172 Russell Senate Office Building
Washington, DC 20510

Sen. Kent Conrad (D-ND)
530 Hart Senate Office Building
United States Senate
Washington, DC 20510-3403

David Cote, chairman and chief executive officer, Honeywell International
Honeywell International Inc.
101 Columbia Road
Morristown, NJ 07962

Sen. Mike Crapo (R-ID)
239 Dirksen Senate Building
Washington, DC 20510

Sen. Richard Durbin (D-IL)
309 Hart Senate Building
United States Senate
Washington, DC 20510

Ann Fudge, former chief executive officer, Young & Rubicam Brands
2400 Beacon St, Ph 601
Chestnut Hill, MA 02467

Sen. Judd Gregg (R-NH)
201 Russell Senate Office Building
Washington, DC 20510

Rep. Jeb Hensarling (R-TX 5)
129 Cannon House Office Building
Washington, DC 20515

Alice Rivlin, senior fellow, Brookings Institute and former director, Office of Management & Budget
Brookings Institute
1775 Massachusetts Ave, NW
Washington, DC 20036
arivlin@brookings.edu

Rep. Paul Ryan (R-WI 1)
1113 Longworth HOB
Washington, D.C. 20515

Rep. Jan Schakowsky (D-IL 9)
2367 Rayburn House Office Building
Washington, DC 20515

Rep. John Spratt (D-SC 5)
1401 Longworth Building
Washington, DC 20515

Mary Kay Henry, president, Service Employees International Union
1800 Massachusetts Ave NW
Washington, DC 20036