Archive for July, 2012

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How Much Money is Enough?

07/30/2012

As with most man-made disasters, the series of financial ones in recent years were caused by a combination of greed and hubris. It would be easy to pin this all on some rogue trader or one sketchy CEO but the roots of the problem run much deeper and operate on so many more levels. In reaction to the situation, the left screams “more regulation” and the right returns “let the market correct”. If you give it any serious thought, both are simplistic because neither deals with the real problem of human fallibility.

A PBS Frontline episode from earlier this year did a good job of explaining how the Collateralized Debt Obligations (CDO) were created by some very smart people at J.P. Morgan. What happened next was that people who werenʻt smart enough to understand the product started acting like door-to-door encyclopedia salesmen. With no understanding of what they we dealing with, these people started pricing the product merely to sell and make a profit for their employer and through bonuses, themselves. Iʻm not talking about a $100 gift certificate to Red Lobster but more like compensation in the millions. When there is temptation like that floating around, thereʻs always going to be rule bending and eventual law breaking.

It really bothered me when I first heard about CDOs but the real issue didnʻt hit me until the recent LIBOR scandal broke. In this free-for-all, bankers in London were colluding to artificially raise or lower the rate at which banks borrowed money. The effect of this manipulation was worldwide because the rate is used for calculations of financial derivatives everywhere. Once again, greed and hubris had trumped the market.

So, how do we control greed and hubris? Do we make penalties stiffer? Pass new laws? Set an example of one person to the remaing cretins? I doubt any of these will work. Why? Because they never seem to have in the past. What I propose is a radical revaluation of work by these economic/banking geniuses, derivative salespeople, and bank CEOs. Create a new class of income like how we have a separate one for capital gains. We can call it leech effort, ill-gotten gains, or unseemly gains. Any income that cannot be said to be derived from an actual, physical movement of any kind should fall into this category. Yeah, I know this is unrealistic but can you imagine how much of a stir it would cause?

It is the lure of large sums of easy money that makes people break the law. How much is enough when you can get away with these kinds of crimes? If there was some way to classify the gains as I showed above, the government could choose to tax it, apply cap and trade to it, or just plain ignore it. I think the stigma of making a fortune this way will shame most people into another line of business.

For those (and you know who you are) that say this will just push the plotting and scheming off-shore, I’d like to remind you that America is still the largest economy in the world. If we can’t enforce good behavior by not doing business with the people who use these tools, what’s the sense in being #1? Maybe we can’t be the world’s police force but we can be the adults in the room.

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Why I Vote

07/29/2012

August 11, 2012 is Primary Election day in Hawaii. As recent media reports have pointed out, our voter turnouts have sometimes been downright dismal. Why is open to debate with reasons ranging from policies on how voter names are maintained, loss of trust, to disgust with the candidate selection. What is clear to me is that all voters need to carefully review the candidates and get out and vote because it is the only way to make their voice heard.

As a card-carrying member of the nerd party who was excited to vote when I first turned 18, this situation always frustrates me. Why would someone go to the trouble to register and then not cast a ballot on Election Day? Even when I was disgusted with the selections, I always cast my ballot with an empty notch in those races. If nothing else, it showed the eventual winner that someone didn’t support them.

Voting is a right that too many people take lightly thinking that their one votes isn’t important. When I hear that, I remember when I worked for the Office of Elections and we had the one and only tie in state history. As we were frantically looking for a legal way to break the tie, I couldn’t help but think that one more person would have settled the matter.

Normally, I prefer to stay neutral and just encourage everyone to vote for the candidate of their choice. This year, the people of Honolulu have an opportunity to make a substantial change in the way that our city is governed. In contrast to what so many people seem to think, this election is not just about rail. Yes, rail is an important issue that affects us both economically and in our ability to meet the changing demographics of our city. However, it isn’t the only issue. We have a sewer system that desperately needs improvement, zoning issues that directly impact our quality of life, and an increasingly partisan political environment that needs to be navigated.

I would like the opportunity to sway your vote for one candidate. Kirk Caldwell is a man that I can personally vouch for. I have known him and worked with him for several years now and I can honestly say that he is the first candidate that I have a personal connection with and respect for. He is a thoughtful man of integrity who deeply cares about the city he lives in and takes immense pleasure in working hard for it. Unlike the other candidates, he is a man who seeks workable solutions to tough situations and will make every effort and take every opportunity to listen to all parties. Then, he will use his best judgment to develop action plans that do the most for our citizenry. He isn’t looking for quick fixes to our long-term problems and he wants to leave the city better off than he found it.

If you want a Mayor who will take principled stances on issues without antagonizing dissenters, Kirk is the person you should vote for. I hope you agree.

If you have already voted via mail, thank you. If not, please send a link to this post or your own appeal to friends and family. Let’s get as many people as possible to turn out on August 11th!

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