Tag: Crony-Capitalism

Corporate Tax Dodging – Transfer Policing

Posted on September 23, 2014 in Ethos, Industries

Go Lean Commentary

Bermuda, Bahama … come on pretty mama” – List of fun-spots from the lyrics of the song “Kokomo” by the Beach Boys. (See Appendix & VIDEO below).

“Bermuda, Luxembourg and Ireland” – List of countries from the foregoing article that facilitate tax dodging and evading schemes by corporations in Big Economy countries.

Somehow this just seems wrong!

It seems even worst to be on this latter list.

This is not the Caribbean that we want to bequeath to our children. (According to previous blog commentaries, the children have also voted to divorce themselves of their Caribbean heritage).

The following article depicts the great lengths that “tax dodgers” go through to avoid their social responsibilities…and then use the Caribbean as “partners in crime”.

Subtitle: Big Economies take aim at the firms running circles around their taxmen

POLITICIANS in the rich world like to splutter about the ever more elaborate dodges that big multinational firms undertake to minimise their tax bills. But doing something about them is trickier. America’s Congress is struggling to agree on ways to stop companies “inverting”—switching domicile to reduce tax bills (see article). The European Union is locked in a protracted debate about whether the favourable treatment that some of its members give to particular forms of corporate revenue are tantamount to illegal subsidies. So the news that the world’s biggest economies have agreed on a plan to limit “base erosion and profit shifting” in corporate tax is something of a watershed.

It has become the norm for multinationals to park themselves or large chunks of their assets—especially intangible ones, such as rights to royalties—in low- or no-tax places such as Bermuda, Luxembourg and Ireland. The wiliest, including Apple, have even discovered ways to re-route funds so as to render income stateless. These transactions are generally legal, or at least exploit grey areas in the tax codes of the countries concerned. But they appear unfair to many in these fiscally strained times, not least because they are beyond the reach of small, domestic firms.

CU Blog - Corporate Tax Dodging - Transfer policing - Photo 1It is only natural that companies take advantage of the gaps. They plough huge resources into doing so, viewing cutting-edge tax arbitrage as a competitive advantage. One study estimated that the resulting tax avoidance could amount to a quarter of total corporate profit-tax receipts in rich countries, and more in poor ones. In truth, the extent of the fleecing is unclear. Corporate tax receipts as a share of GDP, although volatile, do not appear to have declined markedly in the past decade. As a share of profits, however, they have fallen steeply (see chart), though that is partly due to declining rates.

In 2012 the G20, a club of the world’s biggest economies, called on the OECD*, a similar grouping which has long overseen international tax standards, to seek consensus on ways to close the loopholes. Its members have agreed on one set of proposals, released this week, and are working on another. The G20 will formally approve the OECD’s plan at a summit in Australia on September 20th. All told, 44 countries accounting for 90% of the world economy are on board.

The proposals aim to reduce the discrepancy, for many firms, between where they do most of their business and where they pay most of their taxes. One target is “transfer pricing”, the rates that subsidiaries of a single firm charge each other for goods and services. By setting these high, firms can spirit profits out of the countries where they do most of their business to tax havens where they locate their intangibles. The proposals would also clamp down on “treaty shopping”, arrangements through which firms obtain benefits from a tax treaty despite not being resident in either country that is party to it.

Another measure attempts to end the absurd practice of “hybrid mismatches”, whereby companies claim double deductions by classifying financial instruments as debt in some countries and equity in others. In a genuine coup, all members will share basic information about multinationals (such as assets, sales, profits and employees), giving authorities a better chance of spotting tax dodging.

In some areas, consensus could not be reached or is slow to emerge. There was, for instance, no agreement on restricting the use of “patent boxes”, favourable tax regimes for patented inventions and other innovations. In a win for America, the countries agreed not to treat e-commerce as a distinct sector, subject to special “Google taxes”, although they did undertake to study the digital economy’s impact on taxes further. The second set of proposals, expected late next year, is unlikely to include anything much more concrete on this. It will, however, tackle a number of other thorny issues, such as the rampant use of intra-group loans to “strip” earnings out of higher-tax countries.

The chief complaint against the OECD’s approach is that it eschews more radical reforms, such as divvying up taxing rights among countries according to the proportion of a firm’s sales or staff located there. Sol Picciotto of Lancaster University and the Tax Justice Network, an NGO, calls the reforms “a patch-up job” that maintains the “fiction” that subsidiaries charge each other market prices and does little for the poor African countries that are among the main victims of profit-shifting. Jeffrey Owens, a former head of the OECD’s tax division, applauds his former employer’s work but thinks policymakers could struggle to keep up as location becomes an ever-fuzzier concept in business.

Moreover, much of what has been agreed requires the amending of laws and treaties. The risk is that countries implement only the bits that suit them. It remains to be seen how Britain, for instance, will square its official support for the project with its desire to be the most tax-competitive nation in the G20. It offers an alluring patent box and generous treatment of interest and has enthusiastically cut its corporate tax rate, to 20%. America often drops multilateral initiatives in favour of its own preferences.

Small wonder, then, that only 23% of the 3,000 firms surveyed recently by Grant Thornton, an accountancy, expect the proposals to win global approval. And even if they do, the next step is even harder: making sure the multinationals’ supremely inventive lawyers and accountants do not find a way around them.
The Economist Magazine (Posted 09-20-2014) –
http://www.economist.com/news/finance-and-economics/21618911-big-economies-take-aim-firms-running-circles-around-their-taxmen-transfer?fsrc=nlw|hig|18-09-2014|53552127899249e1cc9ea210|NA

*OECD = Organization of Economic Cooperation & Development

The book Go Lean…Caribbean asserts that governments need to collect their taxes, plain and simple. The Social Contract with their citizens requires that they collect revenues so as to render services on behalf of their people. The less tax revenues, the less services that can be rendered. When this trending continues, the destination takes on a “failed-state status”. Unfortunately, the Caribbean region is far too familiar with this “failed-state status”. So  cooperating with foreign companies looking to continue tax dodging practices would be counter-productive – a negative community ethos that we would want to avoid.

The Go Lean book purports that the Caribbean can – and must – do better.

This book, Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), which represents change for the region. The CU/Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy.
  • Establishment of a security apparatus to protect the resultant economic engines against “bad actors”.
  • Improve Caribbean governance to support these engines.

The Go Lean roadmap provides turn-by-turn directions on how to forge a change in the region’s community ethos to encourage honest/moral business practices and a level-playing field.  There is this established business axiom: “there are two certainties: Death and Taxes”. This roadmap thusly views the moral obligation to facilitate government tax deliverables, pronouncing this point early in the Declaration of Interdependence (Page 12) with these statements:

xiv.      Whereas government services cannot be delivered without the appropriate funding mechanisms, “new guards” must be incorporated to assess, accrue, calculate and collect revenues, fees and other income sources for the Federation and member-states. The Federation can spur government revenues directly through cross-border services and indirectly by fostering industries and economic activities not possible without this Union.

The Caribbean have for far too long looked for opportunities on the grey-side of international laws. The foregoing article relates the business historicity of booking Intellectual Property rights royalties and other intangible assets in off-shore locales:

“These transactions are generally legal, or at least exploit grey areas in the tax codes of the countries concerned. But they appear unfair …”

Rather than being complicit in these “grey” activities, indicative of a “parasite” mentality, this roadmap now projects that it is past the time to “straighten up and fly right”. The Go Lean book, and accompanying blog commentaries, go even deeper in describing a “parasite” status that proliferates the Caribbean disposition.

Change has now come to the Caribbean. Rather than a “parasite” ethos, the Go Lean movement calls for a protégé ethos. This shift is now in progress. The Go Lean book (Pages 199, 321 – 326) describes the reform developments in the Offshore Tax & Financial Services industries, in moving the industries from Black List to White List status.

There are many Go Lean blog commentaries that have echoed this point, addressing the change for the Caribbean to shift from “parasite” to protégé:

https://goleancaribbean.com/blog/?p=2207 Hotels Parasite Policies are making billions from added fees
https://goleancaribbean.com/blog/?p=1984 Casinos Failing Business Model
https://goleancaribbean.com/blog/?p=1869 Senate Bill targets cowardly companies that move overseas
https://goleancaribbean.com/blog/?p=623 Only at the precipice, do they change
https://goleancaribbean.com/blog/?p=451 CARICOM Chairman to deliver address on reparations – Parasitical
https://goleancaribbean.com/blog/?p=273 10 Things We Want from the US – Free Market

Change is coming throughout the world, a by-product of globalization. It will not be tolerated for one country to exploit tax loopholes in other countries. This intolerance for “parasites” is not just among the publishers of Go Lean. While this movement anticipates change and then prepares the Caribbean for it, there is an international parallel effort. The G20, a club of the world’s biggest economies, has called on the OECD to oversee international tax standards, to seek consensus on ways to close the tax loopholes. The foregoing article relates that its members have agreed on one set of proposals; so far  44 countries, accounting for 90% of the world economy, are on board for the proposals.

How about for the Caribbean? It is only a matter of time for some international corporate tax reforms to take root. How will those changes affect the Offshore Financial industries and the practice of allowing companies to run circles around tax rules by using “Black List” countries?  The fact that these questions have to be considered demonstrate the need for a more “White List” community/business ethos. These questions should be moot! Never mind the answers.

Debate Over!

The Go Lean book purports that the Caribbean can – and must – do better. The roadmap for the CU is a confederation of the 30 member-states of the Caribbean to do the heavy-lifting of optimizing economic-security-governing engines. The Go Lean book details the community ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to change Caribbean society:

Community Ethos – Deferred Gratification Page 21
Community Ethos – Consequences of Choices Lie in the Future Page 21
Community Ethos – Whistleblower Protection Page 23
Community Ethos – Intelligence Gathering Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Intellectual Property Page 29
Community Ethos – Ways to Impact Research & Development Page 30
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Agents of Change – Technology Page 57
Strategy – Agents of Change – Globalization Page 57
Tactical – How to Grow to a $800 Economy – Trade and Globalization Page 70
Tactical – Separation of Powers – Securities Exchange Regulatory Agency Page 74
Tactical – Separation of Powers – Trade Anti-Trust Regulatory Commission Page 77
Tactical – Separation of Powers – Patent, Standards, and Copyrights Office Page 78
Implementation – Trade Mission Offices Objectives Page 117
Implementation – Ways to Benefit from Globalization Page 119
Planning – Ways to Improve Trade Page 128
Planning – Ways to Make the Caribbean Better Page 131
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Governance Page 169
Advocacy – Ways to Better Manage the Social Contract Page 171
Advocacy – Ways to Impact Justice Page 177
Advocacy – Ways to Improve Intelligence Gathering & Analysis Page 182
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Impact Wall Street Page 200
Advocacy – Ways to Impact Main Street Page 201
Advocacy – Ways to Impact the One Percent Page 224
Advocacy – Ways to Impact … – Bottom Line on the OECD Page 240
Appendix – Offshore Tax & Financial Services Industry Developments Page 321
Appendix – Offshore Tax & Financial Services Industry – Bahamas Example Page 322

The book Go Lean…Caribbean posits that many problems of the region are too big for any one member-state to solve alone, that there is the need for the technocracy of the Caribbean Union Trade Federation. The purpose of this Go Lean/CU roadmap is to make the Caribbean homeland, a better place to live, work and play. We want to be on the list of fun places to PLAY, as conveyed by the below Beach Boys song, not on the list of the “grey”/shady places to WORK.

We do want to be on the consciousness of the rest of the world. We want them envious of our lifestyle and desirous to sample this imagery:

That’s where you wanna go
to get away from it all
Bodies in the sand,
tropical drink melting in your hand
We’ll be falling in love
to the rhythm of a steel drum band

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the changes described in the book Go Lean … Caribbean.

Download the e-Book of Go Lean … Caribbean – free … now!

———————————–

Appendix – Song Lyrics for “Kokomo” by the Beach Boys

Aruba, Jamaica, ooh I wanna take ya
Bermuda, Bahama, come on pretty mama
Key Largo, Montego,
baby why don’t we go,
Jamaica

Off the Florida Keys
there’s a place called Kokomo
That’s where you wanna go
to get away from it all
Bodies in the sand,
tropical drink melting in your hand
We’ll be falling in love
to the rhythm of a steel drum band
Down in Kokomo

[Chorus:]
Aruba, Jamaica, ooh I wanna take you to
Bermuda, Bahama, come on pretty mama
Key Largo Montego,
baby why don’t we go
Ooh I wanna take you down to Kokomo,
we’ll get there fast
and then we’ll take it slow
That’s where we wanna go,
way down in Kokomo.

Martinique, that Monserrat mystique…

We’ll put out to sea
and we’ll perfect our chemistry
By and by we’ll defy
a little bit of gravity
Afternoon delight,
cocktails and moonlit nights
That dreamy look in your eye,
give me a tropical contact high
Way down in Kokomo

[Chorus]

Port au Prince, I wanna catch a glimpse…

Everybody knows a little place like Kokomo Now if you wanna go to get away from it all
Go down to Kokomo

[Chorus]

—————

YouTube Video: https://www.youtube.com/embed/_wHiliL4He4

 

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Welcoming the Dreaded ‘Plutocracy’

Posted on September 14, 2014 in Economics, Industries

Go Lean Commentary

 Plutocracy 2

It is not nice to be called a plutocracy, it’s almost considered a derogatory term – see Appendix below. It simply refers to the undue influence that a super-rich minority group can have on a nation.

The dread of plutocracies is not new, societies have contended with them since the dawn of civilization (Ancient Greece and Rome). Many countries in the Caribbean had de facto plutocracies during their colonial years (Montserrat, Belize and the Bahamas’s Bay Street Boys come to mind), just as a natural off-shoot from a mono-industrial economy (sugar, coffee, tobacco planters). Considering existing plutocracies today, like the City of London and Wall Street, we see that an appropriate strategy can allow a society to “bottle the plutocratic concept” and use it for good.

There is currency to this discussion. Award winning documentary film-maker Ken Burns is debuting his new production on The Roosevelts on PBS in the United States, starting tonight (Sunday September 14, 2014). When we consider the lives and advocacies of Theodore, Franklin and Eleanor Roosevelt, we see that there was a consistent urging to take on big business/special interest (plutocratic endeavors) to benefit the working-class man/woman of America. The following is the synopsis of the documentary:

Plutocracy 1The Roosevelts: An Intimate History chronicles the lives of Theodore, Franklin and Eleanor Roosevelt, three members of the most prominent and influential family in American politics. It is the first time in a major documentary television series that their individual stories have been interwoven into a single narrative.  This seven-part, fourteen hour film follows the Roosevelts for more than a century, from Theodore’s birth in 1858 to Eleanor’s death in 1962. Over the course of those years, Theodore would become the 26th President of the United States and his beloved niece, Eleanor, would marry his fifth cousin, Franklin, who became the 32nd President of the United States. Together, these three individuals not only redefined the relationship Americans had with their government and with each other, but also redefined the role of the United States within the wider world. The series encompasses the history the Roosevelts helped to shape: the creation of National Parks, the digging of the Panama Canal, the passage of innovative New Deal programs, the defeat of Hitler, and the postwar struggles for civil rights at home and human rights abroad. It is also an intimate human story about love, betrayal, family loyalty, personal courage and the conquest of fear.

A film by Ken Burns. Written by Geoffrey C. Ward. Produced by Paul Barnes, Pam Tubridy Baucom and Ken Burns.

The Roosevelts airs for a week starting September 14, 2014.

http://www.pbs.org/kenburns/films/the-roosevelts

The idea of “bottling” plutocratic institutions for the Greater Good is a “big idea” in the book Go Lean…Caribbean. How exactly is this envisioned? The answer provided in the book is that of Self-Governing Entities (SGE).

The Go Lean book delves into this approach of inviting the super-rich to establish industrial parks, corporate campuses and research parks in bordered territories in the Caribbean. These entities would be governed solely by the technocratic Caribbean Union Trade Federation (CU). The Go Lean book serves as a roadmap for the introduction and implementation of the CU and SGE’s.

The approach of the Go Lean roadmap is not to punish the super-rich for their success nor cower to any special interests group at the expense of the greater population.

Too bad this approach has not been employed in the US.

Many previous Go Lean blog/commentaries stressed the changes on American society (and by extension, other communities including the Caribbean) due to plutocratic abuses of corporations, super-rich individuals/institutions and special-interest groups, especially since 2008. The following sample applies:

https://goleancaribbean.com/blog/?p=2259 The Criminalization of American Business
https://goleancaribbean.com/blog/?p=2183 A Textbook Case of Price-gouging
https://goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping Global Job Market
https://goleancaribbean.com/blog/?p=1869 Senate bill targets companies that move overseas
https://goleancaribbean.com/blog/?p=926 Conservative heavyweights have solar industry in their sights
https://goleancaribbean.com/blog/?p=789 America’s War on the Caribbean
https://goleancaribbean.com/blog/?p=782 Open the Time Capsule: The Great Recession of 2008
https://goleancaribbean.com/blog/?p=546 Book Review: ‘The Divide’ – American Injustice in the Age of the Wealth Gap
https://goleancaribbean.com/blog/?p=273 10 Things We Want from the US and 10 Things We Don’t Want from the US: American Capital – Yes; Quantitative Easing – No.
https://goleancaribbean.com/blog/?p=242 The Erosion of the Middle Class

The charter of the CU, on the other hand, is to pursue the Greater Good for all of the Caribbean, to make the region a better place to live, work and play. This Go Lean roadmap aligns this charter with the following 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The book describes the CU as a technocratic administration with 144 different missions to elevate the Caribbean homeland. The underlying goal to regulate the regional economy, and solicit (super-rich) investors, is stated early in the book with this pronouncement in the opening Declaration of Interdependence (Page 13):

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

The Go Lean…Caribbean book challenges the reader, and the Caribbean as a whole, to create a structure that would be inviting to the super-rich and their resources. The SGE concept is a creative approach for that goal, but it is not so revolutionary – similar concepts already exists. Some examples of SGE-like structures are the city-states of Hong Kong, Liechtenstein (Europe), Vatican City (Italy), Panama City Zone (during the 20th Century, alluded to in the foregoing documentary synopsis) and many Free Trade Zones operating throughout the world.

The Go Lean/CU roadmap constitutes change for the Caribbean. The goal is to structure SGE’s at the federal level only, so as to incentivize the super-rich to consider this region. The plan calls for a Special Liaison Group within the CU Department of State just for the One Percent. Already this population enjoys the Caribbean for play, the plan now is to invite them to live and work in the region as well.

The Go Lean roadmap highlights the required community ethos, plus the execution of strategies, tactics, implementation and advocacies to construct the climate for the promotion of “plutocracies in a bottle”. The following is a sample of these specific details from the book:

Community Ethos – Economic Principles – People Respond to Incentives in Predictable Ways Page 21
Community Ethos – Economic Principles – Economic Systems Influence Individual Choices Page 21
Community Ethos – Economic Principles – Voluntary Trade Creates Wealth Page 21
Community Ethos – Economic Principles – Job Multipliers Page 22
Community Ethos – Security Principles – Privacy versus Public Protection Page 23
Community Ethos – Security Principles – Whistleblower Protection Page 23
Community Ethos – Security Principles – “Crap” Happens Page 23
Community Ethos – Governing Principles – Minority Equalization Page 24
Community Ethos – Governing Principles   – Lean Operations Page 24
Community Ethos – Governing Principles – Return on Investments Page 24
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Impact Research & Development Page 30
Community Ethos – Ways to Improve Negotiations Page 32
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Vision – Confederation   of the 30 Caribbean Member-States into a   Single Market Page 45
Strategy – Mission – Invite empowering immigrants to help us move our society and economy Page 46
Strategy – Mission – Customers (Subjects/Citizens) – Foreign Direct Investors Page 48
Tactical – Confederating a Permanent Union Page 63
Tactical – Fostering a Technocracy Page 64
Tactical – How to Grow the Economy to $800 Billion – US Example of Economic Bubbles Page 69
Tactical –  Separation of Powers: – State Department – Special Interest Group Page 80
Tactical –  Separation of Powers: – State Department – Self Governing Entities Page 80
Implementation – Assemble Existing Regional Organizations into CU Page 96
Implementation – Ways to Pay for Change – SGE Licenses Page 101
Implementation – Steps to Implement Self-Governing Entities Page 105
Implementation – Ways to Deliver Page 109
Implementation – Trade Mission Objectives Page 117
Planning – 10 Big Ideas for the Caribbean Region – Self Governing Entities Page 127
Planning – Ways to Improve Trade – Trade Missions Page 131
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Foster Empowering Immigration – SGE Labor Rules Page 174
Advocacy – Ways to Market Southern California Page 194
Advocacy – Ways to Impact Wall Street Page 200
Advocacy – Ways to Help the Middle Class Page 223
Advocacy – Ways to Impact the One Percent Page 224
Appendix – Job Multipliers Page 259
Appendix – List of One Percent Billionaires and Giving Pledge Signatories Page 292

Allowing a super-rich minority to wield unchecked influence could be destructive to a society – the rich would get richer while the poor gets poorer. But the structure of SGE’s would allow the participation of the super-rich class in a manner that would not foster conflict with democratic principles – of the people, by the people, for the people.

Imagine a parade of workers entering an industrial park in the morning, then returning to their individual communities in the evening. This is the exact model of the City of London, described in the Appendix below. This model creates direct jobs on the SGE campuses/parks and a multiplier-effect for indirect jobs in the neighboring communities.

“Keep your friends close and your enemies closer” – Old adage.

While the Go Lean book details these specifics, it also stands “on guard” as a Sentinel against possible abuses and threats to the economic/financial eco-systems. There it is: “plutocracy in a bottle”.

“Tame the market’s excesses” – Theodore Roosevelt.

According to the referenced documentary, the Presidency of Theodore Roosevelt made great gains in curtailing the market excesses of that day; (there was a Depression in the 1870’s and Recession in the 1890’s). The oil industry and railroads were dominated by a small number of individuals. This Roosevelt Administration presided over a divestiture of Standard Oil and the railroad barons.

In addition, the Presidency of Franklin Roosevelt also made great gains in curtailing the market excesses of Wall Street and the Big Banks, the dysfunctional source of the Great Depression (1929 – 1933). The New Deal initiatives balanced the scales of justice for rich versus poor Americans.

Is the US a plutocracy today? Not technically, but the trending has been leaning in that direction, especially with the downward pressures on the middle classes.

The purpose of this commentary is not to assess and fix the challenges of an America plutocracy trend, but rather to identify, qualify and propose arrangements for Direct Foreign Investments in the Caribbean without creating the dreaded plutocracy. The Go Lean book declares that the Caribbean can “count on the greedy to be greedy”, (Page 26).

Opportunities will abound in this new Caribbean … for the rich, the poor, and the middle classes. Everyone is urged to lean-in to this regional empowerment roadmap, to “go lean“. Everyone can contribute to make the Caribbean a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

———————–

Appendix – Plutocracy Definition and Relevance

Retrieved from Wikipedia Online Encyclopedia; 09/14/2014: http://en.wikipedia.org/wiki/Plutocracy

Plutocracy defines a society or a system ruled and dominated by the small minority of the wealthiest citizens. The first known use of the term was in 1652.[1] Unlike systems such as democracy, capitalism, socialism or anarchism, plutocracy is not rooted in an established political philosophy. The concept of plutocracy may be advocated by the wealthy classes of a society in an indirect or surreptitious fashion, though the term itself is almost always used in a pejorative sense.[2]

The term plutocracy is generally used as a pejorative to describe or warn against an undesirable condition.[3][4] Throughout history, political thinkers such as Winston Churchill, 19th-century French sociologist and historian Alexis de Tocqueville, 19th-century Spanish monarchist Juan Donoso Cortés and today Noam Chomsky have condemned plutocrats for ignoring their social responsibilities, using their power to serve their own purposes and thereby increasing poverty and nurturing class conflict, corrupting societies with greed and hedonism.[5][6]

Examples

Examples of plutocracies include the Roman Empire, some city-states in Ancient Greece, the civilization of Carthage, the Italian city-states/merchant republics of Venice, Florence, Genoa, and pre-World War II Empire of Japan (the Zaibatsu).

One modern, formal example of what some critics have described as a plutocracy is the City of London.[7] The City (not the whole of modern London but the area of the ancient city, about 1 sq mile or 2.5 km2, which now mainly comprises the financial district) has a unique electoral system for its local administration. More than two-thirds of voters are not residents, but rather representatives of businesses and other bodies that occupy premises in the City, with votes distributed according to their numbers of employees. The principal justification for this arrangement is that most of the services provided by the Corporation are used by the businesses in the City. In fact about 450,000 non-residents constitute the city’s day-time population, far outnumbering the City’s 7,000 residents.[8]

Modern politics

Historically, wealthy individuals and organizations have exerted influence over the political arena. In the modern era, many democratic republics permit fundraising for politicians who frequently rely on such income for advertising their candidacy to the voting public.

Whether through individuals, corporations or advocacy groups, such donations are often believed to engender a cronyist or patronage system by which major contributors are rewarded on a quid pro quo basis. While campaign donations need not directly affect the legislative decisions of elected representatives, the natural expectation of donors is that their needs will be served by the person to whom they donated. If not, it is in their self-interest to fund a different candidate or political organization.

While quid pro quo agreements are generally illegal in most democracies, they are difficult to prove, short of a well-documented paper trail. A core basis of democracy, being a politician’s ability to freely advocate policies which benefit his or her constituents, also makes it difficult to prove that doing so might be a crime. Even the granting of appointed positions to a well-documented contributor may not transgress the law, particularly if the appointee appears to be suitably qualified for the post. Some systems even specifically provide for such patronage.

United States

Some modern historians, politicians and economists state that the United States was effectively plutocratic for at least part of the Gilded Age and Progressive Era periods between the end of the Civil War until the beginning of the Great Depression.[9][10][11][12][13][14] President Theodore Roosevelt became known as the “trust-buster” for his aggressive use of United States antitrust law, through which he managed to break up such major combinations as the largest railroad and Standard Oil, the largest oil company.[15]According to historian David Burton, “When it came to domestic political concerns, TR’s Bete Noire was the plutocracy.[16] In his autobiographical account of taking on monopolistic corporations as president, TR recounted:

’’ …we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.’’[17]

The Sherman Antitrust Act had been enacted in 1890, with large industries reaching monopolistic or near-monopolistic levels of market concentration and financial capital increasingly integrating corporations, a handful of very wealthy heads of large corporations began to exert increasing influence over industry, public opinion and politics after the Civil War. Money, according to contemporary progressive and journalist Walter Weyl, was “the mortar of this edifice”, with ideological differences among politicians fading and the political realm becoming “a mere branch in a still larger, integrated business. The state, which through the party formally sold favors to the large corporations, became one of their departments.”[18]

In his book The Conscience of a Liberal, in a section entitled The Politics of Plutocracy, economist Paul Krugman says plutocracy took hold because of three factors: at that time, the poorest quarter of American residents (African-Americans and non-naturalized immigrants) were ineligible to vote, the wealthy funded the campaigns of politicians they preferred, and vote buying was “feasible, easy and widespread”, as were other forms of electoral fraud such as ballot-box stuffing and intimidation of the other party’s voters.[19]

Post World War II

In modern times, the term is sometimes used pejoratively to refer to societies rooted in state-corporate capitalism or which prioritize the accumulation of wealth over other interests. According to Kevin Phillips, author and political strategist to U.S. President Richard Nixon, the United States is a plutocracy in which there is a “fusion of money and government.”[20]

Chrystia Freeland, author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else,[21] says that the present trend towards plutocracy occurs – and is self-justified – because the rich feel “[their] own personal self-interest is in the interests of everybody else.”[22][23]

Some researchers have said the US may be drifting towards a form of oligarchy, as individual citizens have less impact than economic elites and organized interest groups upon public policy.[24] A study conducted by political scientists Martin Gilens (Princeton University) and Benjamin Page (Northwestern University), which was released in April 2014,[25] stated that their “analyses suggest that majorities of the American public actually have little influence over the policies our government adopts.” that Gilens and Page do not characterize the US as an “oligarchy” or “plutocracy” per se; however, they do apply the concept of “civil oligarchy” as used by Jeffrey A. Winters[26] with respect to the US.

Most recently, Jeffrey Winters has posited a comparative theory of “Oligarchy,” in which the wealthiest citizens – even in a “civil oligarchy” like the United   States – dominate policy concerning crucial issues of wealth- and income-protection.[27]

On August 13, 2014, on Al Jazeera, in response to questions related to US responses to the Israeli/Gaza situation, professor Noam Chomsky of MIT effectively repeated the quote on American public influence over policies. When questioned further, he suggested that significant amounts of research indicated that the US was in effect a plutocracy.

As a propaganda term

In the political jargon and propaganda of Fascist Italy, Nazi Germany and the Communist International, western democratic states were referred to as plutocracies, with the implication being that a small number of extremely wealthy individuals were controlling the countries and holding them to ransom.[28][29] Plutocracy replaced democracy and capitalism as the principal fascist term for the United States and Great Britain during the Second World War.[29] For the Nazis, the term was often a code word for “the Jews”.[29]

Cited References

  1. “Plutocracy”. Merriam Webster. Retrieved 13 October 2012.
  2. “The study of attitudes is reasonably easy […] it’s concluded that for roughly 70% of the population – the lower 70% on the wealth/income scale – they have no influence on policy whatsoever. They’re effectively disenfranchised. As you move up the wealth/income ladder, you get a little bit more influence on policy. When you get to the top, which is maybe a tenth of one percent, people essentially get what they want, i.e. they determine the policy. So the proper term for that is not democracy; it’s plutocracy.” Extract from the transcript of a speech delivered by Noam Chomsky in Bonn, Germany, at DW Global Media Forum, 15 August 2013.
  3. Fiske, Edward B.; Mallison, Jane; Hatcher, David (2009). Fiske 250 words every high school freshman needs to know. Naperville, Ill.: Sourcebooks. p. 250. ISBN 1402218400.
  4. Coates, ed. by Colin M. (2006). Majesty in Canada: essays on the role of royalty. Toronto: Dundurn. p. 119. ISBN 1550025864.
  5. Conservative thinkers: from John Adams to Winston Churchill. New Brunswick, New Jersey: Transaction Publishers. 2006. pp. 19–68. ISBN 1412805260.
  6. Toupin, Alexis de Tocqueville; edited by Roger Boesche; translated by James; Boesche, Roger (1985). Selected letters on politics and society. Berkeley: University of California Press. pp. 197–198. ISBN 0520057511.
  7. The medieval, unaccountable Corporation of London is ripe for protest, The Guardian, retrieved 01/11/2011 from: http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-medieval.
  8. René Lavanchy (12 February 2009). “Labour runs in City of London poll against ‘get-rich’ bankers”. Tribune. Retrieved 14 February 2009 from: http://www.tribunemagazine.org/2009/02/labour-runs-in-city-of-london-poll-against-‘get-rich’-bankers/.
  9. Pettigrew, Richard Franklin (2010). Triumphant Plutocracy: The Story of American Public Life from 1870 to 1920. Nabu Press. ISBN 1146542747.
  10. Calvin Reed, John (1903). The New Plutocracy. Kessinger Publishing, LLC (2010 reprint). ISBN 1120909155.
  11. Brinkmeyer, Robert H. (2009). The fourth ghost: white Southern writers and European fascism, 1930-1950. Baton Rouge: Louisiana State University Press. p. 331. ISBN 0807133833.
  12. Allitt, Patrick (2009). The conservatives: ideas and personalities throughout American history. New Haven: Yale University Press. p. 143. ISBN 0300118945.
  13. Ryan, foreword by Vincent P. De Santis; edited by Leonard Schlup, James G. (2003). Historical dictionary of the Gilded Age. Armonk, N.Y.: M.E. Sharpe. p. 145. ISBN 0765603314.
  14. Conservative thinkers: from John Adams to Winston Churchill. New Brunswick, New Jersey: Transaction Publishers. 2006. p. 103. ISBN 1412805260.
  15. Schweikart, Larry (2009). American Entrepreneur: The Fascinating Stories of the People Who Defined Business in the United   States. AMACOM Div American Mgmt Assn.
  16. David Henry Burton: Theodore Rooselvelt, American Politician, An Assessment, Fairleigh Dickinson Univ Press, 1997
  17. Theodore Roosevelt: Theodore Roosevelt: an autobiography. New York, Macmillan, 1913
  18. Bowman, Scott R. (1996). The modern corporation and American political thought: law, power, and ideology. University Park, Pa.: Pennsylvania State University Press. pp. 92–103. ISBN 0271014733.
  19. Krugman, Paul (2009). The conscience of a liberal ([Pbk. ed.] ed.). New York: Norton. pp. 21–26. ISBN 0393333132.
  20. Transcript. Bill Moyers Interviews Kevin Phillips. NOW with Bill Moyers 4.09.04 | PBS. Retrieved from http://www.pbs.org/now/transcript/transcript_phillips.html.
  21. Freeland, Chrystia (2012). Plutocrats: the rise of the new global super-rich and the fall of everyone else. New York: Penguin. ISBN 9781594204098. OCLC 780480424.
  22. National Public Radio (October 15, 2012) “A Startling Gap Between Us And Them In ‘Plutocrats'”. Retrieved from: http://www.npr.org/2012/10/15/162799512/a-startling-gap-between-us-and-them-in-plutocrats
  23. See also the Chrystia Freeland interview for the Moyers Book Club (October12, 2012) Moyers & Company Full Show: Plutocracy Rising. Retrieved from: http://billmoyers.com/episode/full-show-plutocracy-rising/
  24. Piketty, Thomas (2014). Capital in the Twenty-First Century. Belknap Press. ISBN 067443000X p. 514: “the risk of a drift towards oligarchy is real and gives little reason for optimism about where the United States is headed.”
  25. Gilens & Page (2014) Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Perspectives on Politics,PrincetonUniversity. Retrieved 18 April 2014.
  26. Winters, Jeffrey A. “Oligarchy” CambridgeUniversity Press, 2011, p. 208-254
  27. Gilens & Page (2014) p. 6
  28. http://www.marxists.org/history/etol/newspape/fi/vol02/no02/editors2.htm
  29. Blamires, Cyprian; Jackson, Paul (2006). World fascism: a historical encyclopedia, Vol. 1. ABC-CLIO. p. 522. ISBN 978-1-57607-940-9.

 

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The Criminalization of American Business

Posted on September 5, 2014 in Economics, Government

Go Lean Commentary

Criminal Business

“Don’t throw out the baby with the bath water” – Old Adage

This old adage never encouraged infant abuse, but rather it illustrated the point that sometimes the whole eco-system can be preserved despite the extraction of bad actors.

After some decades of applying this strategy in the US Justice System, as regards to Big Business, it is the conclusion of this commentary that “No, this is wrong!”

In the words of Forrest Gump “stupid is as stupid does”.

The foregoing article/VIDEO looks at the trend of this double standard of the US Justice System as it applies to criminology of American business. The stakeholders in the Justice Department and the Securities & Exchange Commission (SEC) seems to have forgotten that we have seen this all before, just recently as the cause of the Great Recession, where the global economy was brought to the precipice (2008) due to defective oversight with American home mortgage financing and servicing. Now, the foregoing VIDEO alludes that the regulators and prosecutors have promoted  a “leaving the fox in the hen house” scenario under the guise of not curtailing industrial growth.

Subtitle: Companies must be punished when they do wrong, but the legal system has become an extortion racket


Who runs the world’s most lucrative shakedown operation? The Sicilian mafia? The People’s Liberation Army in China? The kleptocracy in the Kremlin? If you are a big business, all these are less grasping than America’s regulatory system. The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details). Then repeat with another large company.

The amounts are mind-boggling. So far this year, Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs and other banks have coughed up close to $50 billion for supposedly misleading investors in mortgage-backed bonds. BNP Paribas is paying $9 billion over breaches of American sanctions against Sudan and Iran. Credit Suisse, UBS, Barclays and others have settled for billions more, over various accusations. And that is just the financial institutions. Add BP’s $13 billion in settlements since the Deepwater Horizon oil spill, Toyota’s $1.2 billion settlement over alleged faults in some cars, and many more.

In many cases, the companies deserved some form of punishment: BNP Paribas disgustingly abetted genocide, American banks fleeced customers with toxic investments and BP despoiled the Gulf of Mexico. But justice should not be based on extortion behind closed doors. The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism [a].

No soul, no body? No problem

Until just over a century ago, the idea that a company could be a criminal was alien to American law. The prevailing assumption was, as Edward Thurlow, an 18th-century Lord Chancellor of England, had put it, that corporations had neither bodies to be punished nor souls to be condemned, and thus were incapable of being “guilty”. But a case against a railway in 1909, for disobeying price controls, established the principle that companies were responsible for their employees’ actions, and America now has several hundred thousand rules that carry some form of criminal penalty. Meanwhile, ever since the 1960s, civil “class-action suits” have taught managers the wisdom of seeking rapid, discreet settlements to avoid long, expensive and embarrassing trials.

The drawbacks of America’s civil tort system are well known. What is new is the way that regulators and prosecutors are in effect conducting closed-door trials. For all the talk of public-spiritedness, the agencies that pocket the fines have become profit centres: Rhode Island’s bureaucrats have been on a spending spree courtesy of a $500m payout by Google, while New York’s governor and attorney-general have squabbled over a $613m settlement from JPMorgan. And their power far exceeds that of trial lawyers. Not only are regulators in effect judge and jury as well as plaintiff in the cases they bring; they can also use the threat of the criminal law.

Financial firms rarely survive being indicted on criminal charges. Few want to go the way of Drexel Burnham Lambert or E.F. Hutton. For their managers, the threat of personal criminal charges is career-ending ruin. Unsurprisingly, it is easier to empty their shareholders’ wallets. To anyone who asks, “Surely these big firms wouldn’t pay out if they knew they were innocent?”, the answer is: oddly enough, they might.

Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs. Nor is it clear how the regulatory booty is being carved up. Andrew Cuomo, the governor of New York, who is up for re-election, reportedly intervened to increase the state coffers’ share of BNP’s settlement by $1 billion, threatening to wield his powers to withdraw the French bank’s licence to operate on Wall Street. Why a state government should get any share at all of a French firm’s fine for defying the federal government’s foreign policy is not clear.

I’ll see you in court—in another life

The best thing would be for at least some of these cases to go to proper trial: then a few of the facts would spill out. That is hardly in the interests of the regulators or their managerial prey, but shareholders at least should push for that. Two senators, Elizabeth Warren and Tom Coburn, have put forward a bill to make the terms of such settlements public, which would be a start. Prosecutors and regulators should also be required to publish the reasons why, given the gravity of their initial accusations, they did not take the matter all the way to court.

In the longer term, two changes are needed to the legal system. The first is a much clearer division between the civil and criminal law when it comes to companies. Most cases of corporate malfeasance are to do with money and belong in civil courts. If in the course of those cases it emerges that individual managers have broken the criminal law, they can be charged.

The second is a severe pruning of the legal system. When America was founded, there were only three specified federal crimes—treason, counterfeiting and piracy. Now there are too many to count. In the most recent estimate, in the early 1990s, a law professor reckoned there were perhaps 300,000 regulatory statutes carrying criminal penalties—a number that can only have grown since then. For financial firms especially, there are now so many laws, and they are so complex (witness the thousands of pages of new rules resulting from the Dodd-Frank reforms), that enforcing them is becoming discretionary.

This undermines the predictability and clarity that serve as the foundations for the rule of law, and risks the prospect of a selective—and potentially corrupt—system of justice in which everybody is guilty of something and punishment is determined by political deals . America can hardly tut-tut at the way China’s justice system applies the law to companies in such an arbitrary manner when at times it seems almost as bad itself.
The Economist Magazine (Posted 08-30-2014; retrieved 09-04-2014) –
http://www.economist.com/news/leaders/21614138-companies-must-be-punished-when-they-do-wrong-legal-system-has-become-extortion?fsrc=nlw|hig|28-08-2014|53552127899249e1cc9ea210|NA

The issue in this foregoing article/VIDEO is another reflection of American Crony Capitalism – where public policy is set to benefit private parties. Consider:

Big Oil While lobbying for continuous tax subsidies, the industry have colluded to artificially keep prices high and garner rocket profits ($38+ Billion every quarter).
Big Box Retail chains impoverish small merchants on Main Street with Antitrust-like tactics, thusly impacting community jobs.
Big Pharma Chemo-therapy cost $20,000+/month; and the War against Cancer is imperiled due to industry profit insistence.
Big Tobacco Cigarettes are not natural tobacco but rather latent with chemicals to spruce addiction.
Big Agra Agribusiness concerns bully family farmers and crowd out the market; plus fight common sense food labeling efforts.
Big Data Brokers for internet and demographic data clearly have no regards to privacy confines
Big Media Hollywood insists on big tax breaks/ subsidies   for on-location shooting; cable companies conspire to keep rates high; textbook publishers practice price gouging.
Big Banks Wall Street’s damage to the housing and student loan markets are incontrovertible.

The book Go Lean…Caribbean asserts that the Caribbean region must not allow the US to take the lead for our own nation-building, that American capitalistic interest tends to hijack policies intended for the Greater Good. This assessment is logical considering that despite the reality of the 2008 Great Recession and the Wall Street complexity, no one has gone to jail, even now 6 years later! The “land of the free and home of the brave” is now too coward to prosecute Wall Street for “lying, cheating and stealing”, despite the millions of victims and $11 Trillion in economic setbacks.

According to the foregoing article/VIDEO, the Justice Department strategizes settlements, rather than convictions. This is American neo-Justice 2014, where the government is in cahoots with Big Business, maintaining a dual standard of justice for corporate criminals versus ordinary felons. The foregoing article posits that the practices of the US Federal Justice Department is representative of a lucrative shakedown operation, actions akin to organized crime and racketeering.

No wonder critics and advocates point to American Justice as divided: one standard for the rich and one for the poor.

The Go Lean book, and accompanying blog commentaries, go even deeper and hypothesize that beyond justice, the American economic models are dysfunctional for the Caribbean perspective. The American wheels of commerce stages the Caribbean in a “parasite” role; imperiling regional industrialization even further. This is due to globalization, in which the US is one of the biggest proponents; this policy trumpets free trade and assessing opportunity costs (through comparative analysis). Under this model the exporter benefits while the importer suffers; trade surpluses – good; trade deficits – bad. The US foreign policy for the Caribbean is to incentivize consumption of American imports, and to ensure that no other European powers exert undo influence in the region – Monroe Doctrine and Pax Americana (Page 180).

The disposition of a “parasite” is not the only choice, for despite American pressure, countries like Japan and South Korea have trade surpluses with the US. They are protégés, not parasites, and thusly provide a model for the Caribbean to emulate.

This broken system in America does not have to be modeled in the Caribbean. Change has now come. The driver of this change is technology and globalization. The Go Lean book posits that the governmental administrations must be open to full disclosure and accountability. The ubiquity of the internet has allowed whistleblowers to expose “shady” practices to the general public; think WikiLeaks.

This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), which represents change for the region. The CU/Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy.
  • Establishment of a security apparatus to protect the resultant economic engines against “bad actors”.
  • Improve Caribbean governance to support these engines.

The Go Lean roadmap provides turn-by-turn directions on how to forge this change in the region for a reboot of these Caribbean societal systems, including justice institutions. This roadmap is thusly viewed as more than just a planning tool, pronouncing this point early in the Declaration of Interdependence (Page 13) with these statements:

xvi.    Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes…can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.

xxiv.  Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean book purports that the Caribbean can – and must – do better. The vision of the CU is a confederation of the 30 member-states of the Caribbean to do the heavy-lifting of optimizing economic-security-governing engines. The Go Lean book details the policies and other community ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to elevate Caribbean society, and still mandate “justice for all”:

Community Ethos – Deferred Gratification Page 21
Community Ethos – Consequences of Choices Lie in the Future Page 21
Community Ethos – Privacy versus Public   Protection Page 23
Community Ethos – Whistleblower Protection Page 23
Community Ethos – Witness Security & Protection Page 23
Community Ethos – Anti-Bullying and Mitigation Page 23
Community Ethos – Intelligence Gathering Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Ways to Manage Reconciliations Page 34
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Agents of Change – Technology Page 57
Strategy – Agents of Change – Globalization Page 57
Tactical – Separation of Powers – Homeland Security Page 75
Tactical – Separation of Powers – Justice Department Page 77
Implementation – Security Initiatives at Start-up Page 103
Implementation – Ways to Benefit from Globalization Page 119
Planning – Ways to Improve Failed-State Indices Page 134
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Impact Student Loans Page 160
Advocacy – Ways to Improve Housing Page 161
Advocacy – Ways to Improve Governance Page 169
Advocacy – Ways to Better Manage the Social Contract Page 171
Advocacy – Ways to Impact Justice Page 177
Advocacy – Ways to Improve Homeland Security Page 180
Advocacy – Ways to Improve Intelligence Gathering & Analysis Page 182
Advocacy – Ways to Impact Main Street Page 201
Advocacy – Ways to Ways to Protect Human Rights Page 220
Appendix – Credit Ratings Agencies in 2008 Page 276
Appendix – New Student Loan Scandal – Rolling Stone Magazine Page 286

The foregoing article/VIDEO relates to topics that are of serious concern for Caribbean planners. While the US is the world’s largest Single Market economy, we want to only model some of the American example. We would rather foster a business climate to benefit the Greater Good, not just some special interest group.

The world is not fooled! “Tamarind, Sour Sap and Green Dilly, you mussee think we silly” – Bahamian Folk Song

There are many Go Lean blog commentaries that have echoed this point, addressing the subject of the Caribbean avoiding American consequences. See sample here:

https://goleancaribbean.com/blog/?p=2183 A Textbook Case of Industry Price-gouging
https://goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping Global Job Market
https://goleancaribbean.com/blog/?p=2003 Where the Jobs Are – One Scenario
https://goleancaribbean.com/blog/?p=1433 Caribbean loses more than 70 percent of tertiary educated to brain drain
https://goleancaribbean.com/blog/?p=1309 5 Steps to a Bubble
https://goleancaribbean.com/blog/?p=1256 Traditional 4-year Colleges – Terrible Investment for Region and Jobs
https://goleancaribbean.com/blog/?p=1143 Health-care fraud in America; Criminals take $272 billion a year
https://goleancaribbean.com/blog/?p=1092 Aereo Founder on the future of TV – Fight Against Big Media
https://goleancaribbean.com/blog/?p=798 Lessons Learned from the American Airlines merger
https://goleancaribbean.com/blog/?p=789 America’s War on the Caribbean
https://goleancaribbean.com/blog/?p=782 Open the Time Capsule: The Great Recession of 2008
https://goleancaribbean.com/blog/?p=709 Student debt holds back many would-be home buyers
https://goleancaribbean.com/blog/?p=658 Indian Reservation Advocates Push for Junk-Food Tax
https://goleancaribbean.com/blog/?p=623 Book Review: “The Divide – American Injustice in the Age of the Wealth Gap”
https://goleancaribbean.com/blog/?p=378 Fed Releases Transcripts from 2008   Meetings to Save Big Banks
https://goleancaribbean.com/blog/?p=353 Book Review: ‘Wrong – Nine Economic Policy Disasters and What We Can Learn…’
https://goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – American Self-Interest Policies

The book Go Lean…Caribbean posits that many problems of the region are too big for any one member-state to solve alone, that there is the need for the technocracy of the Caribbean Union Trade Federation. The purpose of this Go Lean/CU roadmap is to make the Caribbean homeland, a better place to live, work, learn and play. This effort is more than academic, this involves many practical mitigations and heavy-lifting. While this charter is not easy, it is worth all effort.

In the Caribbean we need jobs; we need entrepreneurship; we need the business climate to grow the economy; we need to be able to compete with the rest of the world. We therefore need a level playing field. Go Lean is a different approach, especially from the foregoing American experiences. The roadmap posits that to succeed in the global marketplace, the Caribbean region must not only consume but rather also create, produce, and export/distribute domestics products (including intellectual property) and services to the rest of the world.

Optimized justice systems are not optional, as the Go Lean roadmap posits that “bad actors” will surely emerge to exploit the new Caribbean economic engines. The CU institutions must surely anticipate these scenarios and respond proactively and reactively. The charter is to marshal and prosecute all economic crimes at the federal (CU) level. There can be no “divide”, no compromise on right-and-wrong.

No justice, no peace!

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the changes described in the book Go Lean … Caribbean.

Download the book Go Lean…Caribbean now!

——————-

Cited Reference:

a. “A mammoth guilt trip – Corporate America is finding it ever harder to stay on the right side of the law”. The Economist Magazine; posted August 30, 2014; retrieved September 4, 2014 from: http://www.economist.com/news/briefing/21614101-corporate-america-finding-it-ever-harder-stay-right-side-law-mammoth-guilt

 

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Hotels are making billions from added fees

Posted on August 28, 2014 in Industries, Planning

Go Lean Commentary

CU Blog - Hotels are making billions from added fees - Photo 1

The attack on the middle class continues…

The foregoing news article/VIDEO relates to the middle class in the US. Normally this would not be an issue for the Caribbean to consider except this story is relating the pressures on the customer base that the region relies on for its primary economic driver: tourism.

Plus most Caribbean resorts also apply a “resort fee”.

By: NBC News – The Today Show
How hotels are making billions from added fees – http://www.today.com/video/today/55935286#55935286
Hotels are taking a page from the airline industry, and it’s costing consumers a lot more. The fees added up to $2.5 billion just last year. NBC’s Kerry Sanders reports.

This subject is pivotal in the roadmap for elevation of the Caribbean economy, which maintains that tourism will continue to be the primary economic driver in the region for the foreseeable future. The book Go Lean…Caribbean calls for the elevation of Caribbean society, to re-focus, re-boot, and optimize all the engines of commerce so as to make the Caribbean a better place to live, work and play. The Caribbean has become a playground for the US. So we cannot, indeed we must not ignore the middle class.

What is important in this discussion is the functionality of economic planning. Already the attacks on the middle class has shrunk their disposable income, retirement savings and buying power. We need to continue to monitor the progress of this economic group. This effort (the foregoing VIDEO and the Appendix) is an iteration in this monitoring charter.

The Great Recession came and went. The US lost $11 Trillion in the crisis, then gained $13.5 Trillion in the recovery (Go Lean book Page 69). Unfortunately the ones that lost are not the ones that gained. The world has changed; the middle class has shrunk, the poor has expanded, and the One Percent has expanded in affluence and influence.

So the markets that Caribbean tourism planners cater to have now changed. The Great Recession should have been a lesson enough for the Caribbean to develop a more resilient economy, to be nimble in strategies, tactics and implementation. Unfortunately, the experience (and the following list) shows that the planners are repeating the same mistakes and following the same bad American model. The following are resort fees of what are considered the best properties in the Caribbean, according to the US-based cable TV Travel Channel (http://www.travelchannel.com/interests/beaches/articles/top-10-caribbean-resorts):

Preface: Top 10 Caribbean Resorts

Welcome to paradise. We’re counting down Caribbean resorts with crystal-clear waters, powder-soft sands, sumptuous settings and world-class accommodations. These aren’t your average cookie-cutter beachfront hotels either. These Caribbean hot spots rank among the most luxurious and lavish in the world:

Resort Property

Resort Fee

1

 Hyatt Regency, Aruba Resort & Casino

– $0.00 –

2

 CaneelBay, St. John, US Virgin Island

10% Service Fee

3

 Parrot Cay By Como, Providenciales, Turks and Caicos Islands

– $0.00 –

4

 Little Dix Bay, Virgin Gorda, British Virgin Islands

$32.00

5

 Beaches Turks & Caicos Resort and Spa, Providenciales

All   Inclusive

6

 Ritz-Carlton St. Thomas, St. Thomas, US Virgin Islands

$62.00

7

 Four Seasons Resort, Pinney’s Beach, Charlestown, Nevis

$33.85 + $20.00

8

 Atlantis, ParadiseIsland, Nassau, Bahamas

$20.70 – $65.95

9

 Sandy Lane, St. James, Barbados

– $0.00 –

10

 Hotel Maroma, Cancun, Mexico St. Regis Bahia Beach Resort, Puerto Rico

$60.00

According to the foregoing VIDEO and article in the Appendix, there are major issues in the acceptance of hotel resort fees. In the US, complaints have been made to the Federal Trade Commission (FTC), the US watchdog for deceptive business practices. Despite some queries, there has been no definitive regulatory action.

CU Blog - Hotels are making billions from added fees - Photo 2We must do better in the Caribbean. The fear is that these practices may lead more to embrace “cruises” as their mode for enjoying Caribbean shores. This may be how the US middle class “plays” in the Caribbean.

What is wrong with cruises? Nothing … per se. We welcome all visitors that come to the region. As it is, the Go Lean book describes 80 million visitors annually. If there is a preference though, we would choose air-hotel packages as opposed to cruise options. The Go Lean book details that cruise passengers average $237/day in spending while on a cruise ship. Unfortunately, the majority (80%) of that money is spent with the foreign-based cruise line, not in the destination; the port cities get trinkets ($20 – $30 per day) in port-side souvenirs and tours.

Resort hotels in the Caribbean generate a lot of economic activities down the line: airports, taxis, restaurants, casinos, shopping, etc. The strategy employed by cruise lines is to embed most of all these activities on the ship. This difference is not ignored in the Go Lean consideration of Caribbean commerce (Page 61).

This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The CU/Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines and marshal against economic crimes.
  • Improve Caribbean governance to support these engines.

Early in the book, the responsibility of monitoring and managing economic trends were identified as a crucial role of the CU; these statements were pronounced in the Declaration of Interdependence (Pages 13) as follows:

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.  Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Caribbean tourism resort properties depend on their resort amenities. This commentary previously related details of the changing macro-economic factors (like demographics) that are currently affecting the region’s resorts, including amenities like golf and casinos:

https://goleancaribbean.com/blog/?p=1984 Casinos Changing/Failing Business Model
https://goleancaribbean.com/blog/?p=1943 The Future of Golf; Vital for   Tourism
https://goleancaribbean.com/blog/?p=782 Open/Review the Time Capsule: The Great Recession of 2008
https://goleancaribbean.com/blog/?p=273 10 Things We Want from the US and 10 Things We Don’t Want from the US – # 2: Tourists
https://goleancaribbean.com/blog/?p=242 The Erosion of the Middle Class
https://goleancaribbean.com/blog/?p=235 Tourism’s changing profile

Accordingly the tourist industry needs to be cognizant of the changing landscape in world economics; they need to minimize the downward pressure on their product. There needs to be a promoter for Caribbean commerce and a Sentinel for Caribbean image.

Who is up for this challenge? Not the FTC; despite having two Caribbean territories within its scope (Puerto Rico & US Virgin Islands), this agency has “fallen asleep at the switch” in its duty to regulate the markets and mandate a level-playing-field. For the Caribbean (region as a whole) we must perform this function on our own.

This roadmap posits that the Caribbean must not allow the US to lead for our own nation-building. We must step up and step forward for ourselves. We have the means and the methods to better ensure a quality experience to our hotel/resort visitors. The roadmap calls for oversight by an Interstate Commerce Administration within the Commerce Department of the CU. But there is no need for Caribbean hoteliers to fear! This agency will be more of a partner/promoter than that of a regulator. The plan is simple: require non-optional resort fee pricing to be fully disclosed as part of the base hotel rate. Then ensure a level-playing-field for all market participants.

This strategy, tactic and implementation features the heavy-lifting of Caribbean economic reform/reboot. Caribbean tourism is in need of this reform/reboot to attract and return visitors to our shores to enjoy our hospitality. But the interest of our visitors must also be protected, they are also stakeholders in the Caribbean reboot effort. The Go Lean… Caribbean book details the community ethos to adopt to proactively mitigate the dire effects of the changed demographic landscape, plus the executions of these additional strategies, tactics, implementations and advocacies:

Community Ethos – Economic Principle – People Respond to Incentives Page 21
Community Ethos – Economic Principle – Economic Systems Influence Individual Choices Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Vision – Best Address on the Planet Page 45
Tactical – Fostering a Technocracy Page 64
Tactical – Trade and Globalization Page 70
Separation of Powers – Sports and Culture Administration Page 81
Implementation – Ways to Pay for Change Page 101
Implementation – Ways to Deliver Page 109
Implementation – Ways to Impact Social Media Page 111
Implementation – Ways to Benefit from Globalization Page 119
Planning – Ways to Make the Caribbean Better Page 131
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Anecdote – Butch   Stewart – Sandals Resorts Growth in   Tourism – Responding to  Guests Needs Page 189
Advocacy – Ways to Enhance Tourism Page 190
Advocacy – Ways to Impact Cruise Tourism Page 193
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Foster e-Commerce Page 198
Advocacy – Ways to Help the Middle Class Page 223
Advocacy – Ways to Impact the One Percent Page 224

The book Go Lean…Caribbean purports that the Caribbean is the greatest address in the world and sets on a roadmap to extend the invitation of Caribbean hospitality to not just Americans, but also the rest of the world. In order to appeal to the global market, this roadmap, posits that regional tourism stakeholders must traverse the changing landscape, in which some of the agents-of-change are technology and globalization.

The plan also calls for establishing Trade Mission Offices in divergent cities like Spain and Tokyo for outreach to Mid & Far Eastern markets.

The issues in the foregoing news stories emerged mostly because of the different experiences in booking hotel rooms online and then engaging the resort properties at check-in/check-out.  The roadmap advocates the art and science of using Internet & Communications Technologies and Social Media for bookings, and also for the advertising and selling of Caribbean culture and amenities. The plan is also to monitor and track comments/complaints from online postings – many have complained about being “nickeled-and-dimed” in hotels due to various resort/amenity fees.

With this roadmap, the people (and governing institutions) of the Caribbean step up and declare that we have learned from the lessons of the past; we have streamlined our products/services and we are ready to be the best address for the world to visit, even for those among the middle classes. The Caribbean therefore prepares for a better future, one in which the world recognizes that we are the best place to live, work and play.

Download the book Go Lean … Caribbean – now!

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APPENDIX

Title: News Article: Resort Fees Explained: How to Spot (and Avoid) Them on Your Next Trip
Source: http://www.huffingtonpost.com/shermans-travel/resort-fees_b_4098716.html

Ah, those pesky resort fees. We’ve all encountered them in our travels, lurking on our hotel bills.

They’ve been around since the 1990s when they were generally utilized to pay for the upkeep of high-end facilities at upscale resorts; the beach clubs and tennis courts, for example. However, in the last five years or so, more and more hotels have been tacking on these annoying — and often spendy — extra charges for considerably lower-end facilities. For example, almost every explanation of these fees we’ve encountered includes such uninspiring “perks” as a newspaper and local phone calls.

According to research by Bjorn Hanson, divisional dean of the PrestonRobertTischCenter for Hospitality, Tourism, and Sports Management at New YorkUniversity, the U.S. hotel industry collected approximately $1.55 billion in fees and surcharges in 2009. Not all of which were resort fees, but you can see how fees and extras add up. Here’s a breakdown of these fees, how they work, when they’re charged, and how you can avoid them.

What is a Resort Fee?

A resort fee is a (usually unadvertised) mandatory fee tacked onto a nightly room rate. Fees can be as low as $3.50 per night at the Clarion Inn & Suites at International Drive, Orlando (they call this one a “safe fee”), to as much as $60 per night for the St. Regis Bahia Beach Resort, Puerto Rico.

A resort fee is almost always a fixed rate that is paid per room, per night, however some of the perks that come with the fee are only good for one person; like the one mai tai per day, per room offered by the Waikiki Beach Resort & Spa ($25 a day), or at Bally’s Las Vegas, where rooms sleep up to four people, but the $18 resort fee only allows two people access to the fitness center.

The things included in your fees run the gamut from the sublime ($25 resort fee applied towards some services at The Spa at the Trump Hotel, Las Vegas) to the ridiculous. Notary service at the Mirage Las Vegas ($25), anyone? But generally, the fee includes amenities such as WiFi, shuttle service, a newspaper, and the in-room phone.

Who Charges a Resort Fee?

You’ll find resort fees are most prevalent in a few specific destinations: Las Vegas, the Caribbean, Florida, and Hawaii. In Las Vegas, you’ll be hard pressed to find a hotel that does not charge a resort fee. The few that haven’t charged a fee in the past – such as Ceasar’s, which even launched a Facebook page at one point that asked visitors to “join the fight against Las Vegas resort fees” — are steadily jumping onto the resort fee bandwagon. From the point of view of the hotel, this is understandable. Why miss out on the extra cash that everyone else is already getting?

A few ski resorts also add resort fees, One   Ski Hill Place in Breckenridge, Colorado, for example, charges $30 a night, and the Viceroy Snowmass, also in Colorado, charges $16 a night.

How Do You Know if Your Hotel Charges a Resort Fee?

Read the fine print before you book. Resort fees tend to be hidden from advertised rates – the rationale presumably being that the site can lure guests in with low room rates before hitting them with an extra fee later. Say you’re searching for a hotel in Las Vegas on a third-party web site. You might see a good deal pop up like this one we found: The Palms Casino Resort for $67 on October 22. However, it’s not until you get to the booking page that you see the resort fee listed ($20 per night); bundled together with the taxes.

Several hotels hide the resort fee from their advertised room rates until you are ready to book; and even then they often do not include the fee in the reservation total, instead running a strip of (literally) fine print saying something like “rate and total room rates do not include the daily resort fee of $22 or applicable taxes.” (That’s taken from the Hard Rock Hotel and Casino, Las Vegas). You usually end up handing over the money at check-in or check-out.

While there’s often an element of surprise with resort fees, hotels have at least become more upfront about them since the FTC sent a letter to 22 hotel operators last year warning that their online rates may have been deceptive and in violation of FTC regulations. If you are still unsure, don’t hesitate to call the hotel before booking to ask exactly how much you will be paying, and for what.

Do You Have to Pay It?

The short answer is yes. There are a few resources available if you’re looking for more detail about resort fees. VegasChatter, for example, keeps an up-to-date list of Las Vegas hotels not charging resort fees (it contains only 11 hotels). There’s also no harm in trying to get the fees waived, especially if you advise management that you have no intention of using the facilities, or if you don’t want a newspaper or WiFi. This is more likely to be successful if you have status with the hotel’s loyalty program, which brings us to our final point…

Do You Earn Points on Resort Fees?

No. The extra money you are paying per night does not go toward your loyalty program status – even more reason to read the fine print, and keep yourself informed.

By Karen Dion.

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A Textbook Case of Price-gouging

Posted on August 25, 2014 in Economics, Planning

Go Lean Commentary

Its déjà-vu all over again.

Didn’t we see this before? Yes, just recently as the cause of the Great Recession, where the global economy was brought to the precipice (2008) due to a defective eco-system with American home mortgage financing and servicing. Now, the foregoing VIDEO alludes to a similar “fox in charge of the hen house” scenario – this time with college education textbooks.

Why university books in America are so expensive? (Click ad-supported VIDEO here)

The Economist Magazine (Posted 08-20-2014) –
http://www.economist.com/blogs/graphicdetail/2014/08/daily-chart-11

Textbook Price 1The issue in this VIDEO reflects American Capitalism 101 – not free market economics – where public policy is set to benefit private parties. (This is defined by some as Crony Capitalism). Since many college expenses are subsidized by governments (federal and state) by means of grants or low-interest, deferred student loans, the marketplace knows that governmental entities will pay…unconditionally, so of course prices go up … and up.

The book Go Lean…Caribbean asserts that the Caribbean region must not allow the US to take the lead for our own nation-building, that American capitalistic interest tends to highjack policies intended for the Greater Good.

This assessment applies to the mortgage bubble/crisis of the 2000’s, foreign policy in the Latin America and now to college education textbooks. When will we learn?

The Go Lean book, and accompanying blog commentaries, go even deeper and hypothesize that the traditional American college educated career paths has led to disastrous policies for the Caribbean in whole, and for each specific country in particular. This is a conclusion based on a macro focus, not the micro.

From a micro perspective, college education is great for the individual, enabling them to increase their earning potential in society – every additional year of schooling increases their earnings by about 10%. But on the macro, the Caribbean assimilation of an American college education strategy has been one disaster after another – an incontrovertible brain drain, capital flight of unpaid student loans and illegal immigration.

Now we are learning from this VIDEO, that the American Textbook Publishing schema is designed to take even more of the treasuries from the parents of Caribbean students that are paying tuition, plus room-and-board.

This broken system in America does not have to be tolerated in the Caribbean, anymore. Change has now come. The driver of this change is technology and globalization. The Go Lean book posits that the governmental administrations and educational institutions of the region should invest in alternative higher education options and as much technological educational advances (e-Learning) as possible, for its citizens.

This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), which represents change for the region. The CU/Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The Go Lean roadmap provides turn-by-turn directions on how to forge this change in the region for a reboot of the Caribbean tertiary education systems, economy, governance and Caribbean society as a whole. This roadmap is presented as a planning tool, pronouncing this point early in the Declaration of Interdependence (Page 12 & 14) with these statements:

xix.      Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores …

xxi.      Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxvii.      Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

The Go Lean book posits that even though education is a vital ingredient for Caribbean economic empowerment, there has been a lot of flawed decision-making in the past, both individually and community-wise. The vision of the CU is a confederation of the 30 member-states of the Caribbean to do the heavy-lifting of optimizing educational policies. The Go Lean book details those policies; and other ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to impact the tertiary education in the region:

Community Ethos – Deferred Gratification Page 21
Community Ethos – People Respond to Incentives Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments (ROI) Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Ways to Promote Intellectual Property Page 29
Community Ethos – Ways to Close the Digital Divide Page 31
Community Ethos – Ways to Improve Sharing – Purchasing Cooperatives Page 35
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Agents of Change – Technology Page 57
Strategy – Agents of Change – Globalization Page 57
Tactical – Separation of Powers – Education Department Page 85
Tactical – Separation of Powers – Labor Department – On Job Training Page 89
Implementation – Ways to Pay for Change Page 101
Implementation – Ways to Benefit from Globalization Page 119
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Education Page 159
Advocacy – Ways to Impact Student Loans Page 160
Advocacy – Ways to Improve Governance Page 169
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Improve Libraries Page 187
Appendix – Education and Economic Growth Page 258
Appendix – Measuring Education Page 266
Appendix – New Student Loan Scandal – Rolling Stone Magazine Page 286

The foregoing video relates to topics that are of serious concern for Caribbean planners. While the US is the world’s largest Single Market economy, we want to only model some of the American example. We want to foster an education agenda that propels the Caribbean’s best interest, not some American special interest group. There are many Go Lean blog commentaries that have echoed this point, addressing the subject of Caribbean education decision-making and ramifications. See sample here:

https://goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping   Global Job Market
https://goleancaribbean.com/blog/?p=1698 STEM Jobs Are Filling Slowly
https://goleancaribbean.com/blog/?p=1596 Book Review: ‘Prosper Where You Are   Planted’
https://goleancaribbean.com/blog/?p=1470 College of the Bahamas Master Plan 2025 – Reach   for the Lamp-Post
https://goleancaribbean.com/blog/?p=1433 Caribbean   loses more than 70 percent of tertiary educated to brain drain
https://goleancaribbean.com/blog/?p=1256 Traditional 4-year Colleges – Terrible   Investment for Region and Jobs
https://goleancaribbean.com/blog/?p=459 CXC and UK   textbook publisher hosting CCSLC workshops in Barbados
https://goleancaribbean.com/blog/?p=398 Self-employment on the rise in the Caribbean
https://goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – American   Self-Interest Policies

The book Go Lean…Caribbean posits that many problems of the region are too big for any one member-state to solve alone, that there is the need for the technocracy of the Caribbean Union Trade Federation. The purpose of this Go Lean/CU roadmap is to make the Caribbean homeland, a better place to live, work, learn and play. This effort is more than academic, this involves some alleviation of the pain and suffering back in the homeland.

We need jobs, and we need an educated labor-force to facilitate the demands of a competitive world. The roadmap posits that to succeed in the global marketplace, the Caribbean region must not only consume but rather also create, produce, and distribute intellectual property. So subjects like prices of textbooks and e-books are germane for our consideration, (see Appendix below). Plus with tactics like Group Purchasing (GPO), there are effective ways to minimize the associated costs of educating the general population, and specific learning needs.

Textbook Price 2

There is the need for specific skills training – we need more STEM enthusiasts (Science, Technology, Engineering, Math). So the issue, as expressed in the foregoing video, and the remediation as expressed in Go Lean…Caribbean is an important reflection of technocratic problem solving being advocated for the CU.

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the changes described in the book Go Lean … Caribbean.

Download the book Go Lean…Caribbean now!

—————————————————————————————————————-

APPENDIX

High Textbook Prices Anecdote #1: (http://www.timesheraldonline.com/news/ci_25464834/throwing-book-at-high-costs-college-textbooks)

Former Napa College student Jena Goodman of Vallejo said student higher education leaders from across California are working to find ways to lighten the financial load of buying textbooks.

“For me, I’ve spent up to $150 for a textbook and as much as $500 to $600 per semester on books,” said Goodman.

High Textbook Prices Anecdote #2: (http://www.theatlantic.com/business/archive/2013/01/why-are-college-textbooks-so-absurdly-expensive/266801/)

According to the National Association of College Stores, the average college student reports paying about $655 for textbooks and supplies annually, down a bit from $702 four years ago. The NACS credits that fall to its efforts to promote used books along with programs that let students rent rather than buy their texts.

Proposed Solution: (http://www.vox.com/2014/8/25/6058017/why-are-college-textbooks-so-expensive)
…
One [option] is to treat college textbooks more like high school textbooks — a college would purchase the textbooks, then rent them out to students for a fee. That spreads out the cost of materials over multiple years and for multiple students, and makes textbooks cheaper. But to be effective, it also has to work in bulk, which means faculty have to agree on texts to use for their classes.

Another alternative is open educational resources, which are open-source materials available for free that can take the place of textbooks. Peter Thorsness, a University of Wyoming professor [and a father of a first time college student], said upper-level science classes are now more likely to use such materials from the National Institutes of Health. And some researchers think that open educational resources and other online materials are poised to disrupt the textbook market.

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The Crisis in Black Homeownership

Posted on August 5, 2014 in Economics, Social

Go Lean Commentary:

The United States of America has been the best economic manifestation in the history of mankind, (as declared in the book Go Lean…Caribbean Page 67), yet the experience has not been the same for all of its citizens. This definitely applies to the “black and brown” populations. The Caribbean Diaspora fits this classification and their experience fits 100% to the events related in the below news article.

The US is the “land of the free and the home of the brave”, but some restrictions apply. This reality is not new, as racial disparities have long existed in the history of America. But after a major social revolution in the 1960’s, positive change came to American minorities, following by decades of progress.

Then 2008 happened …

That year saw the crisis of the Great Recession where American society lost $11 Trillion in net worth; then later regained $13.5 Trillion; (Go Lean book Page 69). According to the foregoing article, the Great Recession losses were not evenly distributed; nor was the subsequent recovery – those who lost the net worth (Middle Class) were not the ones who recovered (One Percent).

How the recession turned owners into renters and obliterated Black American wealth.

By: Jamelle Bouie

CU Blog - The Crisis in Black Homeownership - PhotoIn 2005, three years before the Great Recession, the median black household had a net worth of $12,124. Yes, this was far behind the median white household—which had a net worth of $134,992—but it was a huge improvement from previous decades, in which housing discrimination made wealth accumulation difficult (if not impossible) for the large majority of African-American families.

By the official end of the recession in 2009, median household net worth for blacks had fallen to $5,677—a generation’s worth of hard work and progress wiped out. (The number for whites, by comparison, was $113,149.) Overall, from 2007 to 2010, wealth for blacks declined by an average of 31 percent, home equity by an average of 28 percent, and retirement savings by an average of 35 percent. By contrast, whites lost 11 percent in wealth, lost 24 percent in home equity, and gained 9 percent in retirement savings. According to a 2013 report [a] by researchers at BrandeisUniversity, “half the collective wealth of African-American families was stripped away during the Great Recession.”

It was a startling retrenchment, creating the largest wealth, income, and employment gaps since the 1990s. And, if a new study [b] from researchers at CornellUniversity and RiceUniversity is any indication, these gaps are deep, persistent, and difficult to eradicate.

In the study, called “Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009,” sociologist Gregory Sharp and demographer Matthew Hall examine the relationship between race and risk in homeownership. Simply put, African-Americans are much more likely than whites to switch from owning homes to renting them.

“The 1968 passage of the Fair Housing Act outlawed housing market discrimination based on race,” explained Sharp in a press release. “African-American homeowners who purchased their homes in the late 1960s or 1970s were no more or less likely to become renters than were white owners. However, emerging racial disparities over the next three decades resulted in black owners who bought their homes in the 2000s being 50 percent more likely to lose their homeowner status than similar white owners.”

This wasn’t a matter of personal irresponsibility. Even after adjusting for socio-economic characteristics, debt loads, education, and life-cycle traits like divorce or job loss, blacks were more likely to lose their homes than whites.

If you’re familiar with American history and housing policy, this shouldn’t come as a surprise. The explicit housing discrimination of the mid-20th century has left a mark—arguably a scar—on the landscape of American homeownership. The combination of red-lining, block-busting, racial covenants, and other discriminatory measures means that, even now, a majority of blacks live in neighborhoods with relatively poor access to capital and mortgage loans. What’s more, this systematic discrimination has left many black households unable to afford down payments or other housing costs, even if loans are available.

And in the event that black households are able to save and afford a home, they aren’t as financially secure as their white counterparts. To wit, middle-class African-Americans are more likely to belong to the lower middle class of civil servants and government workers—professions that, in the last five years, have been slashed as a consequence of mass public-sector downsizing [c]. All else being equal, a black schoolteacher who loses her job to budget cuts is less likely to have savings—and thus a safety net—than her white counterpart.

But this isn’t just a story of legacies and effects. In addition to showing the consequences of past discrimination, Sharp and Hall argue that African-Americans have been victimized by a new system of market exploitation. Banks like Wells Fargo steered [d] blacks and other minorities into the worst subprime loans, giving them less favorable terms than whites and foreclosing on countless homes. In a 2012 lawsuit [e], the ACLU and National Consumer Law Center alleged that the now-defunct New Century Financial, working with Morgan Stanley, pushed thousands of black borrowers into the riskiest loans, leaving many in financial ruin. As early as 2005, the Wall Street Journal reported [f] that blacks were twice as likely to receive subprime loans. And in a New York University study published last year [g], researchers found that black and Hispanic families making more than $200,000 a year were more likely to receive subprime loans than white families making less than $30,000.

Together, all of this means that—according to Sharp and Hall—African-Americans are 45 percent more likely than whites to lose their homes. That means they’re more likely to lose their accumulated wealth and to slide down the income ladder, and less likely to pass the advantages of status and mobility to their children.

Apropos of that observation, recent data from the Bureau of Labor Statistics [h] shows an incredible level of youth unemployment for blacks and Latinos. More than 21 percent of African-Americans aged 16 to 24 are out of work, compared with a national average of 14.2 percent. For black teenagers in particular, joblessness soars to nearly 40 percent. It’s a catastrophe with serious economic consequences. The Center for American Progress estimates [i] that the young adults who experienced long-term unemployment during the worst of the recession will lose more than $20 billion in earnings over the next 10 years. And given the slow recovery, odds are good they’ll never recover those lost earnings.

It’s tempting to treat these as subsets of broader problems: poor assistance to homeowners and too much austerity. But they’re not. Even during the boom economy of the 1990s, black employment lagged behind the national average. And the racial wealth gap is a persistent fact of American life.

Likewise, the challenges of black homeownership are a function of discriminatory housing policy [j], as are a whole host of other problems, from mass incarceration and overly punitive policing to poor air quality [k] and food access. These challenges are heavily location-dependent, which is another way to say they are heavily racialized and most prevalent in the segregated, working-class or low-income communities that characterize life for most African-Americans [l], even those with middle-class incomes.

For reasons both political and ideological, it’s nearly verboten in mainstream conversation to argue that racialized problems require race-conscious solutions. Knowing what we know about the demographics of foreclosures, for example, we should ensure any program to help underwater homeowners includes a specific measure to assist black victims of predatory lending, who may need additional help to get on sure footing.

For more than anyone else, this is a message for liberals and progressives, who—for all of their racial sensitivity—are still reluctant to tackle the economic dimensions of racism, even as they represent the vast majority of nonwhite voters and draw critical support from African-American constituencies. It’s how Elizabeth Warren could give “11 Commandments for Progressives” [m] —and receive huge applause—without mentioning the deep problems of racial inequality. One of her commandments is “that no one should work full-time and still live in poverty, and that means raising the minimum wage.” But solving this problem for African-Americans and Latinos—who tend to live in areas that are segregated from job opportunities—is very different than solving it for whites.

While conservatives and Republicans can play a role here, it’s Democrats who are committed to reducing income inequality and bringing balance to our lopsided economic system. Success on those fronts requires a return to race-conscious policymaking, from programs to increase the geographic mobility of low-income workers—relocation grants for individuals or transportation grants for communities with a spatial mismatch between jobs and housing—to public works programs aimed at low-income minority communities, to race-based affirmative action as a way to boost a flagging black middle class.

There’s little in American life that escapes the still-powerful pull of past and present racism, and effective policymaking—to say nothing of effective problem-solving—requires a response to that racism. Otherwise, we entrench the same disparities for a new generation.

——–

Jamelle Bouie is a Slate staff writer covering politics, policy, and race.
The Slate – Daily Magazine for the Web – Posted 07-24-2014; retrieved 08-04-2014
http://www.slate.com/articles/news_and_politics/politics/2014/07/black_homeownership_how_the_recession_turned_owners_into_renters_and_obliterated.html

The points of this foregoing article aligns with the Go Lean book and the collection of blogs/commentaries. The book posits that the crisis persists for the Caribbean and their Diaspora in North America and Europe. What’s more, this movement asserts that this crisis, any crisis, is a terrible thing to waste.

800px-Statue_of_Liberty,_NYThe Caribbean Diaspora have fled their Caribbean homelands over past decades in search of better economic opportunities. It is now the conclusion that many of these “lands of refuge” are rigged in favor of certain ethnic groups; those groups do not include the “black and brown” of the Caribbean. This commentary has relayed, repeatedly, that this Caribbean-bred demographic can do better at home … in the Caribbean. The following are related previous posts:

Unfortunately for the Caribbean, this societal abandonment has continued. Analysis by the Inter-American Development Bank asserts that the Caribbean continues to endure a brain drain of 70% among the college educated population; (https://goleancaribbean.com/blog/?p=1433).

This blog entry depicted how the Caribbean Diaspora that fled to Great Britain has not fared well; (https://goleancaribbean.com/blog/?p=1683)

In addition to economics, there is the concern for security and justice. This blog entry (https://goleancaribbean.com/blog/?p=546) related the dual standards of justice in the US, where all men are treated as equals (wink-wink), just some are more equal than others.

Yes, as the old adage relates: “the grass is not greener on the other side”. See this VIDEO here (Part 1 of 2):

(Click on first continuation video for Part 2 of 2 or click here: https://www.youtube.com/watch?v=gOS3BBmUxvs)

The assertion of the book Go Lean…Caribbean is that once the proposed empowerments are put in place, the Caribbean Diaspora should consider repatriating to their ancestral homelands.

Social Scientists maintain that when animals/mammals are confronted with threats, they have to choose between (stand and) fight or flight. For 50 years, the Caribbean citizens have defaulted to flight. Change has now come to the Caribbean. The book Go Lean…Caribbean serving as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), hereby presents “stand and fight” options. This roadmap will spearhead the elevation of Caribbean society. The prime directives of the CU are presented as the following 3 statements:

  • Optimization of the economic engines in order to grow the regional economy & create 2.2 million new jobs at home.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The book posits that the improved conditions projected over the 5 years of the roadmap will neutralize the impetus for Caribbean citizens to flee, identified as “push and pull” factors. This point is stressed early in the book (Page 13) in the following pronouncements in the Declaration of Interdependence:

xix.      Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores. This repatriation should be effected with the appropriate guards so as not to imperil the lives and securities of the repatriated citizens or the communities they inhabit. The right of repatriation is to be extended to any natural born citizens despite any previous naturalization to foreign sovereignties.

xx.   Whereas the results of our decades of migration created a vibrant Diaspora in foreign lands, the Federation must organize interactions with this population into structured markets. Thus allowing foreign consumption of domestic products, services and media, which is a positive trade impact. These economic activities must not be exploited by others’ profiteering but rather harnessed by Federation resources for efficient repatriations.

This foregoing article highlights the new realities ushered into the world as a result of the events of the Year 2008. The Go Lean book focuses heavy on this subject, even identifying this as a motivation in the same Declaration of Interdependence early in the book (Page 13):

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean roadmap proposes a community ethos in which economic principles are recognized as playing a crucial role in the chain-of-events that led to fight-or-flight decisions for Caribbean Diaspora. (These principles were always the reality, just not professionally managed as such). These principles are identified and qualified (Page 21) as follows:

1. People Choose
2. All Choices Involve Costs
3. People Respond to Incentives in Predictable Ways
4. Economic Systems Influence Individual Choices and Incentives
5. Voluntary Trade Creates Wealth
6. The Consequences of Choices Lie in the Future

These principles cannot be glossed over or handled lightly; this is why the Go Lean book contains 370 pages of finite details for managing economic change in the region. In addition to the assessments of the region’s standings, the book contains the following sample of community ethos, strategies, tactics, implementations and advocacies to impact the Caribbean homeland:

Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Ways to Impact the Future Page 26
Strategy – Competition – Remain Home –vs- Emigrate Page 49
Strategy – Agents of Change – Aging Diaspora Page 57
Tactical – Growing the Caribbean Economy to $800 Billion Page 67
Tactical – Separation of Powers – Versus Member-States Governments Page 71
Implementation – Year 1 / Assemble Phase Page 96
Implementation – Ways to Deliver Page 109
Implementation – Ways to Better Manage Debt Page 114
Implementation – Trade Mission Objectives Page 116
Implementation – Reasons to Repatriate Page 118
Anecdote – Experiences of a Repatriated Resident Page 126
Planning – 10 Big Ideas for the Caribbean Region Page 127
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Credit Ratings Page 155
Advocacy – Ways to Improve Housing Page 161
Advocacy – Ways to Impact Wall Street Page 200
Anecdote – Experiences of Diaspora Member Living Abroad Page 216
Advocacy – Ways to Impact the Diaspora Page 217
Advocacy – Ways to Help the Middle Class Page 223
Appendix – Caribbean Emigration Statistics Page 269
Appendix – Credit Ratings Agencies Role in 2008 Page 276

The Go Lean roadmap has simple motives: fix the problems in the homeland to make the Caribbean a better place to live, work and play. We want to keep Caribbean citizens in the Caribbean. There should be no need to go abroad and try to foster an existence in a foreign land. There is heavy-lifting wherever a person resides. Let’s do the “lifting” here, where at least we are at home and we are treated equitably.

Too many people left, yet have too little to show for it. Now is the time for all of the Diaspora (those in the US, and other countries) to lean-in for the empowerments described in the book Go Lean … Caribbean. We understand your pain, we have been impacted too. (The publishers of the book were entrenched in the Wall Street culture in 2008). This Big Idea now is to use the same energy and innovation to create solutions for Main Street – but not Main Street USA, rather Main Street Caribbean.

This is a dramatic change for the Caribbean, one that is overdue, an invitation to build an elevated society in the Caribbean that many had fled to find elsewhere, yet failed. We can make the Caribbean a better place to live, work and play. We can succeed here.

Download the book Go Lean … Caribbean – now!

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Appendices:

a. Retrieved from https://www.evernote.com/shard/s4/sh/2f378f98-d21b-4f5b-89d4-c3a47419b0ad/479f14e61917697b135246e01d20f85f

b. Retrieved from http://news.rice.edu/2014/07/22/african-american-homeownership-increasingly-less-stable-and-more-risky-2/

c. Retrieved from http://www.epi.org/publication/public-sector-job-losses-unprecedented-drag/

d. Retrieved from http://articles.baltimoresun.com/2012-07-12/news/bs-md-ci-wells-fargo-20120712_1_mike-heid-wells-fargo-home-mortgage-subprime-mortgages

e. Retrieved from http://www.citylab.com/housing/2012/10/did-big-banks-subprime-mortgage-crisis-violate-civil-rights-law/3598/

f. Retrieved from http://online.wsj.com/news/articles/SB111318092881303093

g. Retrieved from http://www.citylab.com/housing/2013/08/blacks-really-were-targeted-bogus-loans-during-housing-boom/6559/

h. Retrieved from http://www.npr.org/blogs/codeswitch/2014/07/21/329864863/the-youth-unemployment-crisis-hits-african-americans-hardest

i. Retrieved from http://www.americanprogress.org/issues/labor/report/2013/04/05/59428/the-high-cost-of-youth-unemployment/

j. Retrieved from http://www.thedailybeast.com/articles/2014/03/13/how-we-built-the-ghettos.html

k. Retrieved from http://grist.org/climate-energy/before-repairing-the-climate-well-have-to-repair-the-impacts-of-racism/

l. Retrieved from http://www.slate.com/articles/news_and_politics/politics/2014/04/desean_jackson_richard_sherman_and_ black_american_economic_mobility_why.html

m. Retrieved from http://www.vox.com/2014/7/21/5918063/elizabeth-warrens-11-commandments-for-progressives-show-democrats

 

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Senate bill targets companies that move overseas

Posted on July 31, 2014 in Ethos, Industries

Go Lean Commentary

“Honor among thieves’ …

… this seems to be the code by which Caribbean society is based. And this is not new! This is the community ethos that dates back almost 500 years.

This ethos seems to “raise its head” again with the below news article as published in a Jamaican newspaper. Even though the US middle class has been devastated by globalization – shipping jobs overseas, many times to Caribbean countries like Jamaica – the motives behind the cited legislation seems wholesome for American self-interest. What is astonishing is the adversarial comments of a Jamaican readers. Consider the original article here and the comment:

By: The Associated Press

Subtitle: The Senate voted Wednesday to advance an election-year bill limiting tax breaks for United States (US) companies that move operations overseas. But big hurdles remain.

CU Blog - Senate bill targets companies that move overseas - Photo 1The Senate voted 93-7 to begin debating the bill, which would prevent companies from deducting expenses related to moving operations to a foreign country. The bill would offer tax credits to companies that move operations to the US from a foreign country.

Senate Democratic leaders say the bill would end senseless tax breaks for companies that ship jobs abroad.

“It would end the absurd practice of American taxpayers bankrolling the outsourcing of their very own jobs,” said Senate Majority Leader Harry Reid, a Democrat.

Most Republicans joined Democrats in voting to take up the bill. But Republican senators are unlikely to support final passage of the bill without significant changes.

Senate Republican Leader Mitch McConnell said the bill is an election-year ploy that has no chance of becoming law.

“It’s a bill that’s designed for campaign rhetoric and failure, not to create jobs here in the US,” McConnell said. “But that’s not stopping our friends on the other side from bringing it up again – just as they did right before the last big election, too.”

The bill would cost US companies that move overseas $143 million in additional taxes over the next decade, according to the Joint Committee on Taxation, which analyses tax bills for Congress. Companies moving into the US would see their tax bills drop by $357 million over the same period.

The difference – $214 million – would be added to the budget deficit.
The Jamaica Gleaner Daily Newspaper (Posted 07-25-2014) –
http://jamaica-gleaner.com/gleaner/20140724/business/business1.html 

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Commentator basing the proposed legislation – nervousinvestor •  Thursday July 24, 2014:
    “Seems like a stupid bill if you ask my opinion”.

——–

Question: Why would Jamaican stakeholders (all of the Caribbean for that matter) lean-in for a contrarian view? Answer: Their own self-interest – a penchant to operate on the shadows of American (and European) economies and pilfer illicit gains.

The book Go Lean…Caribbean examines the varied history of the Caribbean during the colonization and post-colonization eras, and then concludes that the region always operated with an outlaw mentality – always on the dark side. While there is wise business strategy associated with satisfying unfulfilled market needs, the Caribbean experience is decidedly different, one of exploiting loopholes. It is apparent that aspects of Caribbean society still reflect this outside-the-law disposition, it is an institutional trend that appears consistent over the centuries. (The book posits that this approach has been counter-productive for building an industrious society; not everyone wants to, or should operate in the shadows).

Consider the historic evidence as follows:

PCU Blog - Senate bill targets companies that move overseas - Photo 2rivateering [a] – This was the practice of private ships, authorized by governments or royal decree, to attack foreign vessels during wartime. While Privateering was a way of mobilizing armed ships and sailors without having to spend treasury resources or commit naval officers, this was a business operation, with the cost being borne by investors hoping to profit from prize money earned from captured cargo and vessels. The proceeds would be distributed among the privateer’s investors, officers, and crew.

CU Blog - Senate bill targets companies that move overseas - Photo 3Pirates of the Caribbean [b] – The distinction between a privateer and a pirate has always been vague beyond the licensing Letters of Marque. Without the letters, the parties were considered pirates; of which many frequented the Caribbean region. This industry employed many unemployed seafarers as a way to make ends meet, but became increasingly damaging to the region’s economic and commercial prospects.

CU Blog - Senate bill targets companies that move overseas - Photo 4Wrecking (Ships) [c] –  This was the practice of taking valuables (cargo) from a shipwreck which has floundered close to shore; this evolved into what is now known as “marine salvage”. While wrecking is no longer economically significant, this practice was in itself an industry as recently as the 19th century in some parts of the world, and a mainstay in many Caribbean economies. The Caribbean islands, waterways and ports have to contend with a lot of hidden water hazards, like reefs. So this industry thrived on the uncertainty of shipping,  (before better navigational tools and systems), but also created their own pro-wrecking incidents and threats, like false lighting and sabotage.

CU Blog - Senate bill targets companies that move overseas - Photo 5Rum-running/Bootlegging [d] – This refers to the illegal business of smuggling alcoholic beverages (over water) where such transportation is forbidden by law. Most prominently, this activity was done to circumvent the taxation and prohibition laws of the US in the early 20th Century (1920 to 1933). Due to its close proximity, many ships came from the island of Bimini in the western Bahamas to transport cheap Caribbean rum to Florida. But rum’s cheapness made it a low-profit item for the rum-runners, and they soon moved on to smuggling Canadian Whiskey, French Champagne, and English Gin to major cities like New York City and Boston, where prices ran high. (It was said that some ships carried $200,000 in contraband in a single run). Distilleries and breweries in the Caribbean flourished during this period as their products were either consumed by visiting Americans or smuggled into the US illegally. When the US government complained to the British that American law was being undermined by officials in Nassau, Bahamas, the head of the British Colonial Office refused to intervene. The British Caribbean attitude was echoed by UK Prime Minister Winston Churchill, who believed that Prohibition was “an affront to the whole history of mankind”.

CU Blog - Senate bill targets companies that move overseas - Photo 6Offshore Banking [e] – This refers to banks located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages- a mainstay in Antigua, Bahamas, Bermuda and Caymans. These advantages typically include: greater privacy, little or no taxation, easy access to deposits, and protection against local, political, or financial instability. These Offshore banks have often been associated with underground (informal) economies and organized crime, via tax evasion and money laundering. Legally, offshore activities do not prevent assets from being subject to personal income taxes on interest income, often times it is the privacy feature that skirts tax computation and collection.

CU Blog - Senate bill targets companies that move overseas - Photo 7Tax Evasion [f] – This activity is part of the business model of the Caribbean, though it is commonly associated with the informal economy. There are legal and illegal activities associated with the avoidance of taxes by individuals, corporations and trusts. Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax avoidance employ many tax havens or jurisdictions to facilitate lower tax bills. Caribbean member-states encourage many tax avoidance practices, campaigning to high net worth individuals to do business or establish their residence in the region.

CU Blog - Senate bill targets companies that move overseas - Photo 8Offshore Gambling – This category refers to more than just casinos operating at Caribbean resorts, but rather the practice of coordinating gambling/gaming operations worldwide that only have a legal footprint in the region. Caribbean jurisdictions have actually emerged as a favorite destination for legally licensing gaming institutions and companies, like sports books and online gambling. “In 1994 the Caribbean nation of Antigua and   Barbuda passed the Free Trade & Processing act, allowing licenses to be granted to organizations applying to open online casinos. The practice continues, even fighting and winning legal bouts at the WTO against the US. Many of the companies operating out of Antigua are publicly traded on various stock exchanges, specifically the London Stock Exchange. Antigua has met British regulatory standards and has been added to the UK’s “white list”, which allows licensed Antiguan companies to advertise in the UK. By 2001, the estimated number of people who had participated in online gambling rose to 8 million and the growth continued, despite legislation and lawsuit challenges to online gambling. By 2008, estimates for worldwide online gambling revenue were at $21 billion.” – Go Lean…Caribbean; Page 213.

The book serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), a technocratic federal government to administer and optimize the economic/security/governing engines of the region’s 30 member-states. The goal is to move business operations “out of the shadows” and “into the light”, mitigating against the threats represented in the historic review above. There are many legitimate business endeavors that the Caribbean can, and must, pursue in order to elevate its society. The Go Lean book details specifics for growing the regional economy to $800 Billion and creating 2.2 million new jobs – all using legitimate, in-the-light activities.

The Caribbean is the “best address in the world” and provides the best of certain products (see previous blog/commentary sample here: https://goleancaribbean.com/blog/?p=1847 – ‘Declared “Among the best in the world”’) and is the best at performing certain services. We can compete! There should not be the need to “run for the shadows”. The world should be soliciting us, not us begging for the “crumbs following from the table” of the world economy.

At the outset, the Go Lean roadmap recognizes the significance of best-of-breed industrial developments with these statements in the Declaration of Interdependence (Page 13 & 14):

xxiv.  Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

The change starts now; say goodbye to the shadows, say hello to the light. The Caribbean is hereby urged to lean-in to the following community ethos, strategies, tactics, implementations and advocacies to re-boot Caribbean industry and society; as detailed in the book Go Lean … Caribbean, sampled here:

Community Ethos – Deferred Gratification Page 21
Community Ethos – Economic Principles Page 21
Community Ethos – All Choices Involve Costs Page 21
Community Ethos – Job   Multiplier Page 22
Community Ethos – Light Up the Dark Places Page 23
Community Ethos – “Crap” Happens Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help   Entrepreneurship Page 28
Community Ethos – Ways   to Promote Intellectual Property Page 29
Community Ethos – Ways to Impact Research   & Development Page 30
Community Ethos – Impact the Greater Good Page 37
Strategy – Vision – Confederating 30   Member-states in a Union Page 45
Strategy – Agents of Change – Technology Page 57
Strategy – Agents of Change – Globalization Page 57
Tactical – Fostering a Technocracy Page 64
Tactical – Growing Economy – New High   Multiplier Industries Page 68
Tactical – Separation of Powers – Commerce Department Page 78
Tactical – Separation of Powers – Self   Governing Entities Page 80
Implementation – Ways to Pay for Change Page 101
Implementation – Benefits from the Exclusive   Economic Zone Page 104
Implementation – Steps to Implement   Self-Governing Entities Page 105
Implementation – Ways to Deliver Page 109
Implementation – Ways to Benefit from   Globalization Page 119
Planning – 10 Big Ideas Page 127
Planning – Ways to Improve Trade Page 128
Planning – Ways to Make the Caribbean Better Page 131
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Mitigate Black Markets Page 165
Advocacy – Ways to Improve Homeland Security –   Naval Authorities Page 180
Advocacy – Ways to Foster Technology Page 197
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Impact Lotteries/Gambling Page 213
Advocacy – Ways to Help the Middle Class Page 223
Advocacy – Ways to Impact the One Percent – Tax Avoidance Options Page 223

The foregoing news article addresses an important move the US should make to counteract the effects of globalization on its core jobs. The Go Lean book stresses the importance of an empowered middle class. So the Caribbean has the same needs, but our success should not be dependent on breaking the laws of other countries. We can compete head on. This is a subject that impacts economics, security and governing engines. This is heavy-lifting!

The Go Lean roadmap maintains that change is coming to the Caribbean in general and industrial pursuits in particular, so that we may break from the past and have a vibrant future. The Caribbean will be a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

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Appendices:

a. Retrieved July 29, 2014 from: https://en.wikipedia.org/wiki/Privateering

b. Retrieved July 29, 2014 from: https://en.wikipedia.org/wiki/Pirate#Caribbean

c. Retrieved July 29, 2014 from: https://en.wikipedia.org/wiki/Wrecking_(shipwreck)

d. Retrieved July 29, 2014 from: https://en.wikipedia.org/wiki/Rum-running  and https://en.wikipedia.org/wiki/Prohibition_in_the_United_States

e. Retrieved July 29, 2014 from: http://en.wikipedia.org/wiki/Offshore_banking

f. Retrieved July 29, 2014 from: http://en.wikipedia.org/wiki/Tax_evasion and http://en.wikipedia.org/wiki/Tax_avoidance

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Health-care fraud in America; criminals take $272 billion a year

Posted on June 2, 2014 in Economics, Planning

Go Lean Commentary

Healthcare2Wherever there is vibrant economic activity, bad actors will emerge.

This is the claim of the book Go Lean…Caribbean, that the result of successful regional integration would be an elevated Caribbean economy, which consequently could result in increased felonious activities.

There is a lot of economic activity around health-care. According to a US News and World Report story, the US lacks health efficiencies, spending 20, 30, even 100 times as much on medical products and devices as what it would cost, at a typical big-box retailer like Wal-Mart. In a sample year (2012), the country spent over $2.8 trillion on health care, more than twice as much on a per-capita basis as other high-income countries such as England and France. [a]

The Caribbean wants to be a high-income country/region, but not in the model of the United States. We must be better; we must be lean!

The book, Go Lean … Caribbean, serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), the next generation of integration for the region. This roadmap posits the eventual economic success will be quickly followed with the emergence of bad actors seeking to exploit the successes. So security/crime deterrents will not be an after-thought; no, rather the full crime-and-punishment eco-system (investigation, persecution, penology) is in scope for the CU as this technocratic agency will assume responsibility for economic crimes in the region. In effect, this roadmap has the prime directives to elevate the Caribbean’s:

(1) economy,

(2) security apparatus, and

(3) governing engines.

The Economist Magazine (Posted & Retrieved 05/31/2014) –
MEDICAL science is hazy about many things, but doctors agree that if a patient is losing pints of blood all over the carpet, it is a good idea to stanch his wounds. The same is true of a health-care system. If crooks are bleeding it of vast quantities of cash, it is time to tighten the safeguards.

In America the scale of medical embezzlement is extraordinary. According to Donald Berwick, the ex-boss of Medicare and Medicaid (the public health schemes for the old and poor), America lost between $82 billion and $272 billion in 2011 to medical fraud and abuse (see article). The higher figure is 10% of medical spending and a whopping 1.7% of GDP – as if robbers had made off with the entire output of Tennessee or nearly twice the budget of Britain’s National Health Service (NHS).

Crooks love American health care for two reasons. First, as Willie Sutton said of banks, it’s where the money is – no other country spends nearly as much on pills and procedures. Second, unlike a bank, it is barely guarded.

Some scams are simple. Patients claim benefits to which they are not entitled; suppliers charge Medicaid for non-existent services. One doctor was recently accused of fraudulently billing for 1,000 powered wheelchairs, for example. Fancier schemes involve syndicates of health workers and patients. Scammers scour nursing homes for old people willing, for a few hundred dollars, to let pharmacists supply their pills but bill Medicare for much costlier ones. Criminal gangs are switching from cocaine to prescription drugs – the rewards are as juicy, but with less risk of being shot or arrested. One clinic in New York allegedly wrote bogus prescriptions for more than 5m painkillers, which were then sold on the street for $30-90 each. Identity thieves have realised that medical records are more valuable than credit-card numbers. Steal a credit card and the victim quickly notices; photocopy a Medicare card and you can bill Uncle Sam for ages, undetected.

Healthcare1It is hard to make such a vast system secure: Medicare’s contractors process 4.5 [million] claims a day. But pointless complexity makes it even harder. Does Medicare really need 140,000 billing codes, as it will have next year, including ten for injuries that take place in mobile homes and nine for attacks by turtles? A toxic mix of incompetence and political gridlock has made matters worse. Medicare does not check new suppliers for links to firms that have previously been caught embezzling (though a new bill aims to fix this). Fraud experts have long begged the government to remove Social Security numbers from Medicare cards to deter identity thieves – to no avail.

Start by closing the safe door
One piece of the solution is obvious: crack down on the criminals. Obamacare, for all its flaws, includes some useful measures. Suppliers are better screened. And when Medicaid blackballs a dodgy provider, it now shares that information with Medicare – which previously it did not. For every dollar spent on probing health-care fraud, taxpayers recover eight. So the sleuths’ budgets should be boosted, not squeezed, as now.

But the broader point is that American health care needs to be simplified. Whatever its defects, Britain’s single-payer National Health Service is much simpler, much cheaper and relatively difficult to defraud. Doctors are paid to keep people well, not for every extra thing they do, so they don’t make more money by recommending unnecessary tests and operations – let alone billing for non-existent ones.

Too socialist for America? Then simplify what is left, scale back the health tax-perks for the rich and give people health accounts so they watch the dollars that are spent on their treatment. After all, Dr. Berwick’s study found that administrative complexity and unnecessary treatment waste even more health dollars than fraud does. Perhaps that is the real crime.
http://www.economist.com/news/leaders/21603026-how-hand-over-272-billion-year-criminals-thats-where-money?fsrc=nlw%7Chig%7C30-05-2014%7C53552127899249e1cc9ea210%7CNA

The Go Lean … Caribbean roadmap commences with the statement that the Caribbean is in crisis, and that this “crisis is a terrible thing to waste”. Later generations of Caribbean parents have had fewer children than their predecessors, 2.1 children per household, as opposed to the previous average of 5 – 6 children. Now, that older generation is aging, and the numbers do not lie, there are fewer children to care for their aging parents. What’s worse, many of the Caribbean labor pool had fled the region and emigrated to the US, Canada and Europe. Actuarially, we have a financial tsunami building and targeting the region. This crisis is identified early in the book, in the opening Declaration of Interdependence (Page 12), with this pronouncement:

ix.  Whereas the realities of healthcare and an aging population cannot be ignored and cannot be afforded without some advanced mitigation, the Federation must arrange for health plans to consolidate premiums of both healthy and sickly people across the wider base of the entire Caribbean population. The mitigation should extend further to disease management, wellness, obesity and smoking cessation programs. The Federation must proactively anticipate the demand and supply of organ transplantation as developing countries are often exploited by richer neighbors for illicit organ trade.

Creating the solution to mitigate health-care fraud (and other economic crimes) is “Step One, Day One” in the Go Lean roadmap. Implementing the appropriate regulatory framework, to marshal against the scenarios depicted in the foregoing news article, will allow for a “value exchange” for the vital investments the CU must make in the delivery of health-care solutions.

Health-care solutions also entail the astute application of information technology (IT). Agile IT systems, mobile and web applications can foster good value to health-care institutions and government payers. The book considers the Healthways model.

The Go Lean roadmap maintains that efficiency in health services delivery is not automatic, but rather must be forged and bred from experience, expertise, attitudes, training, and the quality application of delivery arts and sciences. The book details a series of community ethos, strategies, tactics, implementations and advocacies to foster the proper controls for health-care efficiency in the Caribbean region:

Community   Ethos – Economic Choices Involve Costs Page 21
Community   Ethos – Whistleblower Protection Page 23
Community   Ethos – Intelligence Gathering Page 23
Community   Ethos – Lean Operations Page 24
Community   Ethos – Impacting   Research & Development Page 30
Community   Ethos – Pursue the Greater Good Page 37
Strategic   – Agents of Change – Aging Diaspora Page 57
Tactical –   Fostering a Technocracy Page 64
Tactical –   Repatriation to Grow to a $800 Billion GDP Page 70
Tactical –   Separation of Powers – Medicare Admin. Page 86
Tactical –   Separation of Powers – Licensing/Standards Page 86
Anecdote – “Lean” in Government – Improve Process Page 93
Implementation – Ways to Pay for Change Page 101
Implementation – Security Initiatives at Start-up Page 103
Implementation – Ways to Deliver Page 109
Implementation – Reasons to Repatriate Page 118
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Improve Healthcare Page 156
Advocacy –   Ways to Impact Entitlements Page 158
Advocacy –   Better Manage the Social Contract Page 170
Advocacy –   Ways to Remediate and Mitigate Crime Page 178
Advocacy –   Ways to Improve Emergency Management Page 196
Advocacy –   Ways to Foster Technology Page 197
Appendix –   Disease Management – Healthways   Model Page 300
Appendix –   Controlling Inflation – Healthcare Realities Page 320
Appendix –   TraumaCenter Realities Page 336

Change has come to the Caribbean. Costs dynamics are unavoidable with this impending change.

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the changes described in the book Go Lean … Caribbean. The benefits are too alluring, a better place to live, work, heal and play.

Download the free e-Book of Go Lean … Caribbean – now!

Source Reference:

a. US News & World Report. “The High Cost of Staying Well – the U.S. gets poor bang for its medical buck”. Retrieved May 31, 2014 from: http://www.usnews.com/opinion/mzuckerman/articles/2013/10/22/why-health-care-costs-so-much-and-how-to-fix-it

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Aereo’s Founder on the future of TV

Posted on May 30, 2014 in Implementation, Industries

Go Lean Commentary

“Aereo is…not infringing on their copyrights” – Founder and CEO Chet Kanojia.

This subject is pivotal in the roadmap for elevation of the Caribbean economy, which maintains that internet/electronic commerce business models are critical in creating jobs and growing the region’s GDP. The publisher of the book Go Lean… Caribbean projects that 2.2 million new jobs hang in the balance. These new jobs will result from entrepreneurial endeavors and opportunities from the many new industries spun from different expressions of internet & communications technologies (ICT).

Also important in the foregoing article is the respect for intellectual property. The Go Lean roadmap campaigns that the creators of intellectual property are entitled to due compensation; this ethos is at the bedrock of the economic empowerment quest for the region.

According to the foregoing article and VIDEO, there are major issues associated with this technology development, to the point that the US Supreme Court is called upon to set legal precedence.

CU Blog - Aereo Founder and CEO Chet Kanojia on the future of TV - Photo 1Change has come to the world of television. According to Futurists [a], the television industry is the next industry to become obsolete due to the ubiquity of the internet; (think travel agents, record & book stores, video rental, etc.).

This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). The CU/Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy.
  • Establishment of a security apparatus to protect the resultant economic engines and marshal against economic crimes.
  • Improve Caribbean governance to support these engines.

Early in the book, the benefits of technology empowerment is pronounced in the Declaration of Interdependence (Page 14), with these opening statements:

 xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… In addition, the Federation must invigorate the enterprises related to existing industries … impacting the region with more jobs.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

xxviii. Whereas intellectual property can easily traverse national borders, the rights and privileges of intellectual property must be respected at home and abroad. The Federation must install protections to ensure that no abuse of these rights go with impunity, and to ensure that foreign authorities enforce the rights of the intellectual property registered in our region.

The Caribbean has the eco-system of free broadcast television, and the infrastructure for internet streaming. So the issues raised in the US Supreme Court will have bearing in the execution of this roadmap.

By: Katie Couric

As the Supreme Court hears oral arguments in the case that will determine the fate of his streaming video service, Aereo founder and CEO Chet Kanojia sat down for a wide-ranging interview with Yahoo Global News Anchor Katie Couric.

The New York-based startup — backed by billionaire investor Barry Diller, among others — is at the center of a legal battle that has been raging since the company’s inception in 2012. Aereo currently operates in 13 cities.

The heart of the case involves Aereo’s practice of assigning subscribers mini remote antennas so that they can stream over-the-air broadcast signals directly to their tablets and other mobile devices. The antennas function in the same manner as old-fashioned “bunny ears.” Aereo also uses cloud technology, which lets subscribers watch the programming live or store it for a later time.
Yahoo’s Global News Anchor Katie Couric (Posted and retrieved 05-29-2014) –
https://news.yahoo.com/katie-couric-aereo-tv-supreme-court-212342689.html

 

Abbreviation of Interview – 3 minutes:

Full Interview – 20 minutes:

The book details the community ethos to adapt to the changed media landscape, plus the executions of the following strategies, tactics, implementations and advocacies:

Community Ethos – Economic Principle – People Respond to Incentives Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments (ROI) Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Promote Intellectual Property Page 29
Community Ethos – Impact Research & Development Page 30
Community Ethos – Bridge the Digital Divide Page 31
Strategy – Integrate Region in a Single Market Page 45
Tactical – Fostering a Technocracy Page 64
Tactical – New High Multiplier Industries Page 70
Tactical – Trade and Globalization Page 70
Separation of Powers – Film Promotion and Administration Page 78
Separation of Powers – Patent, Standards, and Copyrights Office Page 78
Separation of Powers – Communications and Media Authority Page 79
Separation of Powers – Federal Supreme Court Page 90
Implementation – Assemble existing regional organizations Page 96
Implementation – Ways to Deliver Page 109
Implementation – Ways to Impact Social Media Page 111
Implementation – Ways to Benefit from Globalization Page 119
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Communications Page 186
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Foster e-Commerce Page 198
Advocacy – Ways to Impact Hollywood Page 203
Advocacy – Ways to Impact the Diaspora Page 217

The CU will oversee the radio spectrum used for radio, television and satellite communications. The radio spectrum must be regulated on a regional level; the CU coordination will be as managing a common pool resource, as the spectrum is limited. This oversight will also extend to internet broadband (wireless & wire-line) governance.

This is a direct parallel to the US debate.

———

Citation source:
a-1. Retrieved 05-29-2013 from: http://corp.iprodoos.com/2014/01/18/television-2-0-the-2-2-trillion-war-for-your-living-room-begins-now/
a-2. Photo Credit: Motley Fool Investment Advisors
 

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Conservative heavyweights have solar industry in their sights

Posted on May 16, 2014 in Government, Implementation, Industries

Go Lean Commentary solar panels

The song, Colors of the Wind, featured in the Disney animated movie Pocahontas (sung by Vanessa Williams), heightened the awareness and arguments of conserving the Earth’s resources. This key verse stands out:

You can own the earth and still All you’ll own is [dirt] until You can paint with all the colors of the wind

These words describe the folly of acquiring properties at the expense of ruining the natural resources around it. No one wants to ruin the planet, but yet many feel that the conservation movement is unnecessary, over-hyped or fear-mongering; that weather extremes are just natural cycles. The book Go Lean…Caribbean is not a call for conservation; it is a call for economic optimization. Whatever your politics, whether you believe that climate change is real or imagined, this book is not trying to convince you one way. It is what it is! This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). This Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

This book is written with the approach that we hope for the best, but plan for the worst. Unfortunately, for much of the Caribbean, they have been impacted with the worst-case scenario, time and again (See Page 112). Early in the book, the pressing need to be prepared for the ravages of climate change is pronounced in the Declaration of Interdependence (Page 11), with these opening words:

Whereas the earth’s climate has undeniably changed resulting in more severe tropical weather storms, it is necessary to prepare to insure the safety and security of life, property and systems of commerce in our geographical region. As nature recognizes no borders in the target of its destruction, we also must set aside border considerations in the preparation and response to these weather challenges.

The assessment and curative measures for the Caribbean is different than the approaches of the United States. The Caribbean does not have the landmass, population, treasuries, or economics of the US, so we cannot look for the US to take the lead for Caribbean problems. We must lead ourselves. The CU is a proxy of that leadership.

By: Evan Halper

WASHINGTON — The political attack ad that ran recently in Arizona had some familiar hallmarks of the genre, including a greedy villain who hogged sweets for himself and made children cry.

But the bad guy, in this case, wasn’t a fat-cat lobbyist or someone’s political opponent.

He was a solar-energy consumer.

Solar, once almost universally regarded as a virtuous, if perhaps over-hyped, energy alternative, has now grown big enough to have enemies.

The Koch brothers, anti-tax activist Grover Norquist and some of the nation’s largest power companies have backed efforts in recent months to roll back state policies that favor green energy. The conservative luminaries have pushed campaigns in Kansas, North Carolina and Arizona, with the battle rapidly spreading to other states.

Alarmed environmentalists and their allies in the solar industry have fought back, battling the other side to a draw so far. Both sides say the fight is growing more intense as new states, including Ohio, South Carolina and Washington, enter the fray.

At the nub of the dispute are two policies found in dozens of states. One requires utilities to get a certain share of power from renewable sources. The other, known as net metering, guarantees homeowners or businesses with solar panels on their roofs the right to sell any excess electricity back into the power grid at attractive rates.

Net metering forms the linchpin of the solar-energy business model. Without it, firms say, solar power would be prohibitively expensive.

The power industry argues that net metering provides an unfair advantage to solar consumers, who don’t pay to maintain the power grid although they draw money from it and rely on it for backup on cloudy days. The more people produce their own electricity through solar, the fewer are left being billed for the transmission lines, substations and computer systems that make up the grid, industry officials say.

“If you are using the grid and benefiting from the grid, you should pay for it,” said David Owens, executive vice president of the Edison Electric Institute, the advocacy arm for the industry. “If you don’t, other customers have to absorb those costs.”

The institute has warned power companies that profits could erode catastrophically if current policies and market trends continue. If electricity companies delay in taking political action, the group warned in a report, “it may be too late to repair the utility business model.”

The American Legislative Exchange Council, or ALEC, a membership group for conservative state lawmakers, recently drafted model legislation that targeted net metering. The group also helped launch efforts by conservative lawmakers in more than half a dozen states to repeal green energy mandates.

“State governments are starting to wake up,” Christine Harbin Hanson, a spokeswoman for Americans for Prosperity, the advocacy group backed by billionaire industrialists Charles and David Koch, said in an email. The organization has led the effort to overturn the mandate in Kansas, which requires that 20% of the state’s electricity come from renewable sources.

“These green energy mandates are bad policy,” said Hanson, adding that the group was hopeful Kansas would be the first of many dominoes to fall.

The group’s campaign in that state compared the green energy mandate to Obamacare, featuring ominous images of Kathleen Sebelius, the outgoing secretary of Health and Human Services, who was Kansas’ governor when the state adopted the requirement.

The Kansas Senate voted late last month to repeal the mandate, but solar industry allies in the state House blocked the move.

Environmentalists were unnerved. “They want to roll it back here so they can start picking off other states,” said Dorothy Barnett, director of the Climate and Energy Project, a Kansas advocacy group.

The arguments over who benefits from net metering, meanwhile, are hotly disputed. Some studies, including one

published recently by regulators in Vermont, conclude that solar customers bring enough benefits to a regional power supply to fully defray the cost of the incentive.

Utilities deny that and are spending large sums to greatly scale back the policy.

In Arizona, a major utility and a tangle of secret donors and operatives with ties to ALEC and the Kochs invested millions to persuade state regulators to impose a monthly fee of $50 to $100 on net-metering customers.

Two pro-business groups, at least one of which had previously reported receiving millions of dollars from the Koch brothers, formed the campaign’s public face. Their activities were coordinated by GOP consultant Sean Noble and former Arizona House Speaker Kirk Adams, two early architects of the Koch network of nonprofits.

In October, California ethics officials levied a $1-million fine after accusing groups the two men ran during the 2012 election of violating state campaign finance laws in an effort to hide the identities of donors.

The Arizona Public Service Co., the state’s utility, also had Noble on its payroll. As a key vote at the Arizona Corporation Commission approached late last year, one of the commissioners expressed frustration that anonymous donors had bankrolled the heated campaign. He demanded APS reveal its involvement. The utility reported it had spent $3.7 million.

“Politically oriented nonprofits are a fact of life today and provide a vehicle for individuals and organizations with a common point of view to express themselves,” company officials said in a statement in response to questions about their campaign.

The solar companies, seeking to sway the corporation commission, an elected panel made up entirely of Republicans, formed an organization aimed at building support among conservatives. The group, Tell Utilities Solar won’t be Killed, is led by former California congressman Barry Goldwater Jr., a Republican Party stalwart.

“These solar companies are becoming popular, and utilities don’t like competition,” Goldwater said. “I believe people ought to have a choice.”

The commission ultimately voted to impose a monthly fee on solar consumers — of $5.

The solar firms declared victory. But utility industry officials and activists at ALEC and Americans for Prosperity say the battles are just getting underway. They note the Kansas legislation will soon be up for reconsideration, and fights elsewhere have barely begun.

In North Carolina, executives at Duke Energy, the country’s largest electric utility, have made clear the state’s net metering law is in their sights. The company’s lobbying effort is just beginning. But already, Goldwater’s group has begun working in the state, launching a social media and video campaign accusing Duke of deceit.

“The intention of these proposals is to eliminate the rooftop solar industry,” said Bryan Miller, president of the Alliance for Solar Choice, an industry group.

“They have picked some of the most conservative states in the country,” he added. “But rooftop solar customers are voters, and policymakers ultimately have to listen to the public.”

LA Times.com (Article posted 04-20-2014; retrieved 05/15/2014) –http://www.latimes.com /nation/la-na-solar-kochs-20140420,0,7412286.story#axzz2zU4qRP15

The foregoing article highlights opposition to some implementations of some green initiatives, the solar industry.

While the oppositional arguments have merit, the principles of the above-cited song lingers: “we can own the earth and only own dirt, if we do not paint with the colors of the wind”.

We must therefore consider the lessons learned from these lyrics and the foregoing news article. We must insure that financial subsidies are strategically assigned to prioritize one energy source over others only for the Greater Good.

The Go Lean roadmap posits that people respond to economic incentives (Page 21). So if green conservation projects (like solar panels or wind turbines) are important for the Greater Good (Page 37), then there must be incentives to encourage their adoption. The roadmap specifics call for the implementation of a regional power grid (Page 113), utilizing underwater cables, to connect the many islands. The plan therefore advocates the adoption of green power generation modes: solar, wind, and tidal, but not with the legislative mandates that are the source of debates, as in the foregoing articles. The regional grid will allow for economies-of-scale to justify this type of infrastructure.

As for existing infrastructure, oil/coal power generation, Go Lean proposes improvements with modernizations, clean burning natural gas and a heightened focus on quality delivery. The big hurdle of funding is mitigated with this plan.

The ravages of climate change are real for the Caribbean region. So too are the solutions proffered in this roadmap for the CU. “It is what it is”, but we will be prepared for the changes and the opportunities to make our homeland a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

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