Ukraine: Between Two Empires

With its Association Agreement with the E.U. effectively suspended due to concerns about the “stark deterioration of democracy and the rule of law” after the imprisonments of Yulia Tymoshenko in 2011 and Yurly Lutsenko in 2012, Ukraine was vacillating between creating a free-trade zone with the E.U. or a customs union with Russia, Belarus and Kazakhstan. Given the European Neighborhood Policy of the E.U. applicable to independent states bordering the E.U., a free-trade zone with the E.U. could be the first step on the road to further economic and even political integration, including perhaps statehood. However, that would mean further democratic reforms that would certainly not be required to join a customs union that includes Belarus. As a precondition to an informed decision, distinguishing between statehood in the E.U. and joining a customs union is vital to the Ukraine. Ideologically-driven jargon can create confusion regarding the qualitative difference.

Ukraine, pictured here in orange, would be a large state in the E.U., and would push the border significantly eastward yet still in Europe.     source" wikipedia

The full essay is in Essays on the E.U. Political Economy, available at Amazon.

E.U. Passes Financial Transactions Tax (FTT)

Out of a “desire to ensure that the financial sector fairly and substantially contributes to the costs of the crisis and that [the sector] is taxed in a fair way [relative to] other sectors for the future, to disincentivise excessively risky activities by financial institutions, [and] to complement regulatory measures aimed at avoiding future crises and to generate additional revenue for general budgets or specific policy purposes,” the Council of the European Union took a decision on 14 January 2013 to allow 11 states, including Belgium, France, Germany, and Italy, to act in a coordinated fashion with the Commission and each other in establishing and administrating a tax on financial transactions. That is to say, the tax is to be jointly administered by the Commission and the states, and both levels would share in the proceeds. A few states, most notably Britain and the Czech Republic, abstained in the voting.

The full essay is at Essays on the E.U. Political Economy, available at Amazon. 

Challenges for E.U. Foreign Policy

Foreign policy is typically one of the domains of power that goes to the federal level in a Union of states. The history of the E.U. in its development provides a counter-example, as traditionally lower-level functions, such as government regulation of business, were the first to be federalized. Even as a counter-example, the E.U. is nonetheless a federal system, as such a system is not defined by which competencies are federalized. Even so, there are downsides to leaving foreign policy at the state level. In the case of the U.S. under the Articles of Confederation (1781-1789), the foreign policies at the state level involved the risk that European states would try to break apart the new American union by giving the American republics different geo-political foreign interests.

The complete essay is at Essays on Two Federal Empires.

         Should the Syrian Rebels have more powerful weapons, or would they eventually wind up in the hands of anti-Western forces?  This question is difficult enough without having to come to consensus on the question in the E.U.    Source; ABC News.

Wrestling Out, Dancing In: The Modern Olympics

Even as custom or tradition that has outlived its justification—which is not the same as usefulness—is essentially deadwood, there is presumptuousness in redefining a concept or event without regard to how it is understood. For example, Stephanie Meyers disregarded one of the major confining attributes of the vampire lore in enabling the vampires of the Twilight saga to not only stand in the sunlight, but actually sparkle!  It was as though Meyers felt she need not be constrained to fit into the folklore; she could essentially redefine it. Were a reader to object, “that’s not a vampire then!” she would presumptuously state matter-of-factly, “yes it is.” This is essentially subjectivity presuming to define social reality as a projection of whatever the self wills. Any constraint on the self is presumptuously thrown off as though with impunity.  Modernity itself may have this attitude in paying too little heed to established definitions and practices in seeking to redefine them (mindlessly retaining customs being the other side of the coin).  The Olympics may be a case in point.

In February 2013, the International Olympic Committee decided to remove wrestling form the 2020 Olympics. That the sport was among those of the ancient Olympic games in Greece was apparently an easily-dismissible factor. Although the committee did not disclose its reasons, the desire to draw younger viewers, who follow potential alternatives such as climbing and wakeboarding, was likely among the committee members’ reasons.

                                                                                                     Wrestling was a sport in ancient Greece, as depicted here on this ancient vase.     BBC

Although including new sports to make the Olympics relevant to a contemporary audience is advisable, and keeping the games from growing without limit is doubtlessly prudent, taking from one of the most Olympic sports risks removing the distinctiveness of the games, as rooted in the sports of the ancient games. “I think this is a really stupid decision,” an Olympic historian said. “It was in the ancient Olympics. It has been in the modern Olympics since 1896.” The decision looks even more stupid relative to the committee’s action to retain “rhythmic gymnastics,” which is basically dancing to music. In one manifestation, the “gymnastic athletes” conduct artistic movements with ribbons.  Watching the performance, a viewer is apt to wonder how dance had become a sport—not to mention an Olympic sport. Meanwhile, the ancient Olympic sport of wrestling is expendable.

Two underlying problems, or mentalities, are evinced in this case study. First, if rhythmic gymnastics is a sport simply because it is scored and has an international federation, then virtually anything under the sun could be classified as a sport. The very term sport could become a near-tautology. One person could mean one thing by the term while another person means something else.  The term itself could become mere reflections of personal ideological agendas.

Secondly, dismissing something elemental to a concept while continuing to admit and tolerate applications exogenous to the unmolested concept essentially “morphs” the concept into another without being intellectually honest in renaming the concept. If dance rather than wrestling is the way the Olympics are to go, then at least shouldn’t the games be renamed so people do not expect them to be the modern expression of the ancient games. In other words, in expressing the basis of the games still in ancient Greece, such as by starting the torch at the original site, and yet shifting the games away from the ancient games and toward activities that may not even be sports, the International Olympic Committee was at the very least sending mixed signals—or worse, trying to have it both ways. The result could be that the concept, Olympics, becomes severely blurred in meaning. The culprit is the presumptuous ego bristling at any possible constraint.

Sources:

Jere Longman, “Olympics Moves to Drop Wrestling in 2020,” The New York Times, February 12, 2013.

Mandi Bierly, “Olympics: What’s Your WTF Sport? And Don’t Say Rhythmic Gymnastics!” EW.com, August 9, 2012.

 

 

U.S. Postal Service: Home Delivery Up Next?

After years of billion-dollar losses, the U.S. Postal Service announced in February 2013 that the “long-held tradition of Saturday delivery” would come to an end. Only packages would still be delivered on Saturdays. The Postal Service expected the change to save $2 billion a year. That even such a minor “tradition” would have had such staying power amid billions of dollars of losses supports the old adage, old habits die hard. It is as if even a minor change from a long-standing practice would throw us into chaos. Our tolerance for ending things that have been around seemingly forever is far too limited.

Moreover, the human aversion to changing long-standing customs or practices adversely narrows perception itself. For example, the much costlier, labor-intensive practice of delivering mail to homes was as though above critique. Particularly with many Americans paying their bills online, the “need” for mail delivery even five days a week to one’s house can alternatively be viewed as antiquated.  It is as if that practice had gone on as though without any thought on it itself.

                                               Is this highly labor-intensive custom really necessary?    source: zimbio

The door-to-door salesmen selling vacuums or Bibles had surely become a relic long after the film Paper Moon popularized the lifestyle. Why then have we held on to the notion that mail should be delivered to one’s apartment building or house? We go to stores to get food and medicine. Particularly with so many people paying bills online, is mail so much more vital than food or medicine that we couldn’t just as well stop by our local post office to pick up our mail a few times a week? At the very least, we would not be bothered by the anxiety of whether a threatening notice is waiting for us at home. Just as computer technology has enabled the automation of stored-book retrieval in a few academic libraries (e.g., the University of Chicago), the Postal Service could automate mail retrieval so millions of P.O. Boxes would not be necessary.

In short, we humans are not very good at “thinking outside the box” of current custom. Put another way, habits that have gone on seemingly forever have a habit of going on mindlessly. The U.S. Postal Service has suffered greatly from this particular human proclivity. Perhaps with a wider perspective other institutions can be found that are similarly suffering assumed demands to perpetuate practices that are no longer justified.

Source:

“U.S. Postal Service Right to End Era of Saturday Delivery: Poll,” The Huffington Post, February 9, 2013.

E.U. Budget Cuts: David Cameron’s Strategy

The budget deal reached by the state governments represented in the European Council in Feburary 2013 would mark the first decrease in the E.U.’s seven-year budget , pending approval by the European Parliament. According to The Telegraph, “the deal sets members’ total payments to the EU for 2014-20 at €908.4 billion (£770 billion). Payments were £800 billion for the previous seven-year round.” This was precisely what the conservative British prime minister at the time, David Cameron, wanted.  “I think the British people can be proud,” he said after the deal had been reached. “Every previous year these deals have been agreed, spending has gone up,” he added. “Not this time.”  Beyond the relevance of the prime minister’s rather obvious small-government fiscal-conservative ideology, his “victory” in the European Council is in line with his strategy to keep his state in the Union.

Britain's David Cameron finally at home in the E.U.? Negotiating with other state officials at the European Council. Source: thepressnews.com

 

The full essay is at Essays on the E.U. Political Economy, available at Amazon.

ECB’s Draghi Resists Pressure to Devalue Euro and Stimulate Growth

Despite pressures from the appreciation of the euro, which had hit a 15-month peak of $1.3711 on February 1, 2013, Mario Draghi of the European Central Bank announced four days later that the benchmark financing rate would be on hold at the record-low 0.75 percent. In making the announcement, he stressed that the worst was over for the Eurozone and that the uncertainties would be gone by midyear. “The economic weakness in the euro area is expected to prevail in the early part of this year. But later in 2013, economic activity should gradually recover, supported by our accommodative monetary policy stance and the improvement in financial market confidence.” Draghi was tacitly undercutting Francois Hollande’s earlier statement that the euro should depreciate so as not to hurt economic competitiveness. A higher euro means more expensive euro-based exports abroad. The relationships between monetary policy, a currency, and economic growth are complex. It would thus be worthwhile to unpack the scenario facing Draghi and Hollande in early 2013.

                         Mario Draghi addressing the World Economic Forum. In resisting pressure to lower the benchmark rate, he increased his financial stature abroad. 

The full essay is at Essays on the E.U. PoliticalEconomy, available at Amazon.

S. & P. Sued for $5 Billion: Breaking a Conflict of Interest?

In sending a message to S & P as well as Wall Street more generally regarding the excesses in the securitization of subprime mortgages that contributed materially to the financial crisis of 2008, the U.S. Government and several state governments announced in early 2013 that they would sue S & P for $5 billion as a penalty and to cover damages to state pension funds and federally-insured banks and credit unions.  The operative assumption was that such a monetary figure would have considerable force as a disincentive to profit by means of fraud.  Would $5 billion be sufficient for the message to be delivered not only S. & P. but also to Wall Street? 

The full essay is at Essays on the Financial Crisis, and
 Institutional Conflicts of Interest, both available at Amazon.

Is a Stronger Euro in Europe’s Interest? In America’s?

Speaking at the European Parliament in early February 2013, Francois Hollande of France castigated the floating exchange rate of the euro. “The euro should not fluctuate according to the mood of the markets. A monetary zone must have an exchange rate policy. If not it will be subjected to an exchange rate that does not reflect the real state of the economy.”  The week before, the euro was at $1.37, a 15-month high. The euro was at its strongest rate against the Japanese yen since April 2010. Behind the rise in the currency’s value was a surge in investor interest in the euro from assessments that the worst of the debt crisis had passed. Hollande’s statement can be critiqued on a number of points.

Was the upswing in the value of the euro just the beginning of the currency's rise as a reserve currency around the world?

The full essay is at Essays on the E.U. Political Economy, available at Amazon.

Is the E.U. More Than the Sum of Its Parts?

In the wake of David Cameron’s announcement that he would try to renegotiate Britain’s obligations in the E.U. then have an “in or out” referendum in his state on whether it should secede from the Union, Francois Hollande of France warned that state interests were in the process of usurping “the European interest.” According to the French president, Cameron was heading the E.U. down the path in which each state “looks for what is good for itself and only itself.” As such, the Union would simply be an aggregation of state interests. The question is perhaps the old one of whether the whole is more than the sum of the parts. In proffering different answers, the European federalists and anti-federalists (or Euro-skeptics) have fundamentally different conceptions of what the E.U. is.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Is the E.U. no more than an aggregation of its states, or does a distinct whole exist such that the E.U. is itself distinct from its states? 

Fixing the Foreclosing Banks: A Hidden Conflict of Interest in Regulatory Compliance

After the financial crisis of 2008, regulators in the U.S. ordered banks to hire consultants to implement more than 130 “enforcement actions,” which represent 15% of the cases. In 2011 alone, regulators mandated that eleven banks hire consultants to determine whether mortgage borrowers had been wrongfully evicted. The consultants collected about $2 billion in fees, which amount to more than half of what homeowners were to receive under the $8.5 billion settlement that ended the consultants’ work. According to regulators, the consultants’ work was plagued with inefficiencies. This is probably the least of it, for virtually any expectations for “an industry that is paid billions of dollars by the same banks it is expected to police” are bound to be chimerical in nature.

The full essay is at Institutional Conflicts of Interest, available at Amazon.

Facebook's Fatal Flaw: Mobile Ad Revenue?

As the largest of the social-media companies, Facebook has gone into uncharted waters. Adding to Wall Street’s analytical headache, the company’s strategy at least since its IPO has been to be oriented more to the long term than is customary on Wall Street. Put another way, estimating Facebook’s long-term viability has been notoriously difficult, particularly for Wall Streeters who apply their traditional criteria nonetheless. Looking beyond Wall Street’s lenses, there is indeed reason to regard investments in the company as very risky.

The full essay is at Taking the Face Off Facebook, available at Amazon.

Excessive Standardization Pushed by the European Commission?

The E.U.’s internal market is not typically construed in terms of federalism. Whereas the market connotes homogeneity or at least easy transfers across state lines, a union of states wherein both are semi-sovereign implies diversity within certain commonalities. The economic and political systems are not mutually exclusive, or inert, however. Put another way, too much economic standardization begins to run up against the heterogeneity that is inherent in an empire-level union of republics.

The full essay is at Essays on the E.U. Political Economy, available at Amazon. 

Carbon Allowances: Merkel's E.U.?

Fundamentally, a union of states is in trouble when any federal action is predicated on consent from the governor of the largest state. The U.S. Senate was proposed precisely to give the smaller states a means to thwart the domination of a few large ones in legislating at the federal level. The European Council’s qualified majority vote mechanism and the unanimity requirement on “big ticket items” such as taxation permit a supermajority of states to reject the proposal of a few large ones. The U.S. House of Representatives and the European Parliament offer no such avenue for small states because those chambers are based solely on population. California and New York, and France and Germany, can through their peoples’ representatives have great clout in those bodies. Therefore, bicameral (i.e., two chambers) legislatures are distinctly advantageous at the federal level of a union of states.

                            Jose Barosso, President of the European Commission, conferring with Angela Merkel, chancellor of the state of Germany. Was she giving Barosso his marching orders? Vielleicht, ich glaube.  

The full essay is at "Essays on the E.U. Political Economy," available at Amazon. 

The 11-Inch Footlong at Subway

It is perhaps all too common for companies that franchise out stores to insist to complaining customers that the franchisee bears full responsibility for any dissatisfaction. That franchisees are bound to certain standards in a legal agreement with the company is apparently of no consequence. The refusal to take responsibility is perhaps all too common in the retail sector. It is more convenient to point to the other guy’s responsibility than to one’s own. In fact, this mentality may be said to characterize business culture today. The sordid condition can be seen in the knee-jerk avoidance company statements made on the heels of a customer-led controversy.

The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.com.