Author Archives: Dan Malo

About Dan Malo

Dan graduated from the University of Connecticut (Storrs, CT), where he obtained a B.A. in Interdisciplinary Social Sciences. He completed a Planning & Development Internship with the Connecticut General Assembly in 2010 and in 2013, he was elected to his Town of Canterbury’s Planning & Zoning Commission, after sitting four years on appointment. He blogs for #TheGrid about local planning matters in New England and Eastern Connecticut's ‘Quiet Corner.’

Connecticut State Budget Process

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The Connecticut General Assembly generates a two-year (biennial) budget every odd-numbered year which begins in the Executive Branch, when the governor each state agency to prepare draft budgets for the following biennium. Over several months the governor’s budget office, the Office of Policy & Management (OPM), compiles this information, makes changes, and then works to match the agencies’ spending projections with revenue.

The result, often referred to as the ‘governor’s budget,’ is delivered to the General Assembly in a formal address by the governor in early February. The annual budget address often includes policy initiatives, spending proposals, and vehicles through which additional revenue may be generated. In the address, the governor identifies his priorities for the biennium.

When the legislature convenes, members of the General Assembly go through a similar process. Joint Committees (consisting of state senators and representatives), chiefly, the Finance, Revenue, and Bonding Committee oversee the revenue side of the state budget, which includes fees and taxes. On the spending side, the Appropriations Committee handles matters regarding state agency budgets and other state spending. When the Appropriations and Finance Committees approve a budget, it is often different from the governor’s. The two versions are negotiated into the final budget language and the budget must be voted on and passed by both the House and Senate and signed into law by the governor.

Aerial view of the Connecticut State Capitol Building in Hartford.    (AP Photo/Douglas Healey)

KEY DATES           

May through July:
Agencies/commissioners prepare biennial budget projections.

June 30/July 1:
Fiscal Year ends/New Fiscal Year begins.

August 1:
State agencies and commissioners budget request instructions

September 1:
Biennial budget requests due.

September through January:
OPM reviews recommendations and prepares proposed ‘governor’s budget.

February:
Governor transmits budget to General Assembly.

February through May:
General Assembly convenes, holds hearings, debates and makes adjustments.

May through June: 
Reconciliation of governor’s budget with General Assembly budget.[1]

SPENDING

State spending is roughly $10,000 per household, while the state debt per capita is $27,539.70.

The current fiscal year projects spending of nearly $3 billion in direct aid to the state’s cities and towns through a variety of grant programs. The vast majority of that funding is channeled through the Education Cost Sharing (ECS) grant to help finance public education. Other primary municipal grant programs include: the Excess Cost Grant, designed to mitigate the high cost of special education mandates; Town Aid Road (TAR) Fund, which helps maintain local streets and roads; and Payments In Lieu of Taxes (PILOT), which compensates local governments for hosting tax-exempt institutions like not-for-profit hospitals and state-owned buildings that don’t pay local property taxes.  A popular grant, The Small Town Economic Assistance Program (STEAP) funds economic development, community conservation and quality of life projects in rural and suburban towns.

“Municipal grants are awarded on a sliding scale based upon criteria including the economic status of the city or town, the income level of its residents, and the worthiness of specific infrastructure improvement projects.”

Medicaid accounts for much of Connecticut’s spending and is currently driving a budget shortfall, according to DSS spokesperson David Dearborn. As a result, the biggest cuts are coming from Medicaid to fix that deficit. Governor Dannel Malloy announced $170,444,693 in statewide budget rescissions this past week; $32 million of it is from the Department of Social Services, $8 million from the Department of Education and $1 million from the Department of Economic and Community Development. The biggest cuts from DSS include housing and homeless services which is close to $3 million and $5 million from TANF. However, according to DSS spokesperson David Dearborn the cuts represent real services with real effect on people from Medicaid. Those budget cuts are intended to help slash an estimated $365 million from the state deficit.

Since 1978 Connecticut has had a Budget Reserve Fund, more commonly referred to as the Rainy Day Fund. The fund was created to help close fiscal year-end budget gaps. The Rainy Day Fund is currently depleted, when it was used to help balance the FY 10-11 budget. In the past few years, state government has spent more than $900 million in emergency federal stimulus aid as well as a nearly $1.4 billion emergency budget reserve, and the entirety Rainy Day Fund. Connecticut operates from a common pool that mingles tax revenues, federal grants and receipts from fees and licenses with borrowed funds. With the governor’s approval, state law permits the treasurer’s office to temporarily transfer funds between operating and capital programs, which has done so in emergencies when bills exceed tax and other operating fund receipts.

In regards to the current budget situation, Treasurer Denise Nappier has informed the governor: “For several months I have reported reduced cash levels for the state, particularly within the common cash pool that funds daily operations and circumstances now warrant a contingency plan for ensuring adequate cash resources.” Because of technicalities in state budgeting rules, Comptroller Kevin Lembo’s office could not count the emergency budget cuts ordered by Malloy; in his latest report, Lembo officially certified a $415 million deficit, though he acknowledged that the actual shortfall is probably closer to $290 million.[2] Whenever the comptroller’s office certifies a deficit larger than 1 percent of the general fund ($19.14 billion), state law requires the governor to submit a plan to the legislature. The current threshold is such that it will trigger the statutory requirement, forcing Malloy to present a plan to the General Assembly in special session.[3]

The comptroller attributes much of the shortfall to an increase in Medicaid spending. “Medicaid — the largest single gross appropriation line-item in the budget — is significantly above the budget target,” Lembo said. “Caseload growth continues in the low-income adult program area with the addition of more than 4,000 clients since the start of the fiscal year” causing “double-digit increases [which trend into] this fiscal year, according to data from the Department of Social Services.” Lembo adds that “The fiscal year 2013 budget relied on over $100 million from Medicaid program savings initiatives, many of which have not been implemented to date.” [4]

Rather than raising taxes from the outset, Governor Malloy has made cuts across nearly every agency request that has come his way, and has mandated the adoption of Generally Accepted Accounting Principles (GAAP) “In order to improve the state’s accountability for its use of public funds.” Executive Order No. 1, which directed the Secretary of the Office of Policy and Management (OPM) to initiate a process intended to result in the implementation of GAAP, was his first act upon taking office. [5] Malloy has faced criticisms by labor and citizenry for his cuts, but they have come, thus far, on the revenue side, without an increase in taxes. “First we downsized government. Then we cut spending. Then we identified what we need to ask state employees to do. Only when those three processes were complete did we begin to look at revenue.”[6][7]

REFERENCES

[1] http://www.senatedems.ct.gov/Budget.php

[2] http://www.ctmirror.org/story/18344/nappier-seeks-emergency-550m-loan-help-state-pay-its-bills

[3] http://www.ctmirror.org/story/18340/comptroller-raises-deficit-estimate-50-million

[4] http://www.ctmirror.org/story/18340/comptroller-raises-deficit-estimate-50-million

[5] http://www.ct.gov/opm/cwp/view.asp?a=2998&q=477452

[6] http://www.governor.ct.gov/malloy/cwp/view.asp?A=11&Q=474024

[7] http://www.ct.gov/opm/lib/opm/budget/2012_midterm_budget/pdfs/fy2013_sectiona.pdf

Columbian Butterfly Effect Exchange

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The “Butterfly Effect,” from an anthropological perspective, can be witnessed in the migration of Europeans to the New World.  Certainly, the current culture and attitudes that are evident in the United States were not the ones if those that permeated the land three or four hundred years ago.  Who we are “now” has been shaped from the influx of different languages, religions and races; each geometrically developed with irrevocable insights and setbacks, by war and peace. 

Congressional Budget & Impoundment Control Act of 1974

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Overview of the Congressional Budget and Impoundment Control Act of 1974

The Congressional Budget Act (CBA) has been the foundation of U.S. federal budgeting since 1974. The Act shifted budgetary control away from the Executive to the Legislature; curbing encroachment of the Office of the President upon the rights and purpose of Congress.[1] The text of the Constitution establishes Congress as the body with controlling power over the federal budget wherein only Congress has the power to levy taxes or borrow against the credit of the U.S.  Article I, Section 9 prohibits the drawing of funds from the Treasury without an appropriation by law.

The Executive Office gained power over a number of maneuvers, beginning in the 1800s to compensate for increased government spending and the ability of congressional committees to line-item manage hundreds of millions of dollars in appropriations.  “The increased size of the government combined with the increased presidential powers would be identified by Arthur Schlesinger “Imperial Presidency”.  Eventually, this resulted in fiscal conflict with Congress, in the “Seven Year Budget War” waged by President Nixon until 1974.

Spending in social programs had been on the rise with congressional approval, coupled with an ‘incursion’ abroad in Southeast Asia led to rising deficits. Nixon entered into office inheriting a fiscally troubled government… with the continuing rise in entitlement spending and the lack of sufficient economic growth to sustain an enlarging federal government weighing heavily on the budget.” In his approach to mitigate this issue, Nixon “made decisions which alienated Congress … and his actions greatly contributed to the crisis in the government which eventually necessitated the 1974 act.”[2]

An Act to establish a new congressional budget process; to establish Committees on the Budget in each House; to establish a Congressional Budget Office; to establish a procedure providing congressional control over the impoundment of funds by the executive branch; and for other purposes.[3][4]

Title X of the law, also known as the Impoundment Control Act of 1974, specifies that the President may propose to Congress that funds be rescinded. If both the Senate and the House of Representatives have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.[5]

Congress is not required to vote on such a proposal and has ignored most Presidential requests thus; effectively removed the historical Presidential power of impoundment, replacing it with a program whereby the president was required to propose to Congress the rescission of specific funding proposals. [6] Many Presidents and government officials have called for more Executive leverage to rescind Congressional spending since implementation of the Act. [7]  I personally believe that the topic of presidential, top-level, impoundment is an important notion to consider, of course, under requisite oversight of appropriately determined ‘checks and balances’.

 

[1] Wikipedia: Congressional Budget and Impoundment Control Act of 1974;

http://en.wikipedia.org/wiki/Congressional_Budget_and_Impoundment_Control_Act_of_1974

[2] Lee, Nooree, Harvard Law School Federal Budget Policy, Briefing Paper No. 34; “Congressional Budget and

Impoundment Control  Act of 1974, Reconsidered” http://www.law.harvard.edu/faculty/hjackson/BudgetActRevisited_34.pdf

[3] Wikipedia; ibid.

[4] Lee, Nooree;  ibid.

[5] http://uscode.house.gov/download/pls/02C17B.txt

[6] Lee, Nooree;  ibid.

[7] Wikipedia: Impoundment; http://en.wikipedia.org/wiki/Impoundment

Guarantee Healthcare Access

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For several years I went without healthcare because I couldn’t afford to use it.  Between the combination of high insurance premiums, near minimum wage jobs and costly deductibles, health care that that I paid into was still out of reach.  I remember vividly from my childhood the same financial strain my mother had in using her insurance.  If someone can’t afford to use your insurance, what good is it? When I had the opportunity to review the SustiNet heath plan passed by the state House and Senate, H.B. No. 6600, I was a somewhat disappointed.  Seeing as this proposal comes from the Universal Health Care Foundation of Connecticut, I had been expecting something more resembling a “single-payer” system; more specifically, a healthcare plan that could be accessed by all and afforded by all.

A “guarantee of access” to high quality coverage is important.  Cost control to manage a sustainable program is as well. But what does SustiNet do for the people who will still become permanently indebted just to live?  The status quo of someone living vs. someone dying because universal coverage is still out of reach will still exist. “Cheap” is, after all, relative. Is SustiNet “Healthcare we can count on?”  Not if every single person can’t afford to buy into it.  The health plan proposed in SustiNet will undoubtedly help many people acquire health insurance.  However, it still leaves many people effectively without it. If scores of individuals still can’t afford coverage, has a universal right-to-affordable-healthcare standard been fulfilled?

Racial Profiling Data Collection in CT

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Rather, the “Shortcomings of Racial Profiling Data Collection in Connecticut”

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Enacted in Connecticut on the first day of January in the year 2000, following a wave of racial profiling legislation throughout the country, the Penn Act, like the laws passed in other states, relies on the collection of data to spot trends in traffic stops. There are items of the Act that are taken for granted; the cooperation of state police agencies to be compliant with the law and the analysis of submitted data to be reported in the manner proscribed. Thus far, the majority of Connecticut police departments are non-compliant and the collected data sits on shelves, in various slips of papers bound by rubber-band, un-analyzed.  There is another serious question about the data collection itself—can offending officers be relied upon to report accurate profiling data when they fill out the form based on their perceptions?  The Penn Act is a start to correcting discriminatory police tactics, but its shortcomings need to be addressed—otherwise the law is a waste of even the half-effort put toward its enforcement—and a failure at ensuring the protected rights of  State residents.

The most troubling aspect one finds when researching the Penn Act is the unwillingness of the Connecticut police departments to comply with State Statute.  According to their 2008 Annual Report, the African-American Affairs Commission (AAAC), the agency charged with analyzing the profiling data, “barely twenty-five percent of the required law enforcement agencies…submitted reports” in that year.  You would figure that the State’s police departments—the lawkeepers of the land—would have a compliancy rating of better than 25%, especially on a highly publicized issue.   Telling is the fact that Hartford’s urban police forces are among the departments that do not submit data.  There is quickness to dismiss the fact that racial profiling even occurs at all.  According to many officers, the issue instead is “a myth,” and if discriminatory intent was perceived, then it was the lack respect towards the peace officer, or probability of criminal cause that led to the police encounter.  There are many thousands of individuals who claim otherwise, and “driving while black” continues to remain a popular phrase, due to its prevalence in daily urban life.  Departments need to work within the law.  Only then, will they receive the respect they claim they aren’t given.

Another failing of the Act is that it doesn’t designate an “official” form or format for the data collection.    According to the AAAC, the data that had been submitted was “received electronically while others were received in several paper formats.”  I have witnessed this first-hand in meetings with AAAC Executive Director Glen Cassis, who when asked about the way the data is collected, left the room and came back with bundles of scraps of papers…of different size, color, font, etc.  Some of the handwriting was impossible to make out on the forms, which dated back (at least as far as I could see) to 2002.  The cost that the AAAC cites as a hindrance in the analysis of this data comes solely from making sense of this jumbled mess.  Sifting through the piles of bundled papers made me realize the need for a uniform method of data collection—starting with the form.  “Some of them come on slips of paper, some on disc . . . some of it’s coded . . . it comes in various shapes and sizes, and it’s difficult to do any kind of comprehensive report,” says Cassis.  Why is paper even used, considering the amount invested in patrol car computers?  Is the data collection issue something that can be solved by Scantron?  Speaking of bubble forms, can’t the analysis and reporting be completed by college students, as has been suggested by State Representative Michael Lawlor?  If the State tells an agency to get something done and they don’t provide the money, they should, at the least, supply ideas on making the process cost effective.

When discussing the Penn Act with other activists and community members, they are astonished that data is even collected in the first place.  The first question many people have asked is “who collects the data?” When told that is the officer who makes the traffic stop, their immediate concern is whether or not an officer who engages in profiling would self-report their own criminal activity.  A good point is also made that officers aren’t necessarily trained to interpret race.  Oftentimes, the ticket that is received is riddled with errors regarding the officers presumed interpretation of race (or religion in some cases, in the states that track that data)—sometimes even gender is inaccurately recorded.  An immediate question is “who is to say…” that the data the officer reports—unseen by the person being pulled over—has accurately been recorded.  This model of data collection carries many fallacies, which, like probable cause (“what is probable cause?”), leave much to interpretation.  What exactly is “officer’s presumption” and what options, if any, are available to individuals who believe they have been racially profiled?

Beyond reporting of the data, there are no ways to spot profiling, accept by anecdote, and then by lawsuits brought by the American Civil Liberties Union and the State Commission on Human Rights and Opportunities.  Of these cases, usually only the “surest” go to trial. While they grab attention from the media, they drawn out, and in the course of the wait, a person sometimes suffers from lost employment because of a traffic incident in which they may have been profiled (ex. truck drivers).  There is no immediate recourse available to the victim in this case.  To help overcome this inequity, municipalities in other states such as Oregon and California have requested that the officer’s business card be presented at each traffic stop.  The hope would be to keep the offending officer less likely to engage in profiling, for fear of recrimination by the persons they pull over.  It seems a cheap enough addition to range of alternatives, though there are complaints about the cost of paper.  A less costly method might be to print a line on the bottom of the ticket:  “Do you believe you have been racially profiled?  Tell your story @ www.XYZ.”  The “hotline” webpage could serve as either a un- or low-funded forum simply to broadcast the issue, or as part of a state agency or non-profit organization (hopefully this time, funded).  Academia could well step in, and leave the running of the site to those studying web-design; and the handling of the legal matters to professors, advocates, and those pursuing a law degree.  Fixing the problem of racial profiling doesn’t have to be a slow or expensive process.

The issue of racial profiling first needs acknowledgement by the State’s police forces.  The reality is that racial profiling is not the myth that they have made it out to be.  Rather than dismissing the idea of it, or spinning it to be a “lack of officer respect” outlook on the part of the citizen, police agencies should own up to their role in this ordeal.  If they wish to handle the problem of profiling internally, as is the current “strategy,” those efforts must show results—to the satisfaction of the community that they serve. The police must be compliant with the law they are charged with keeping.  There must be championing on this issue, politically and in the community, to pressure this wrong to be righted.  A failed, yet expansive, racial profiling law shows poor leadership thus far in that regard. Rather than continue with the chaos of the current system, the will to accomplish the intention of the Penn Act is within reach, and needs the support of police leadership and elected officials.  Instead of taking an adversarial approach with this issue, the onus is on them to cooperate with the community and move beyond this discriminatory, archaic idea.  Simple steps, some of which are proposed in this document, are low-cost, “low-hanging” approaches that can be implemented to both curb racial profiling and provide a form of recourse to the individual affected by the practice.

VAT Tax: Better Than Current Model

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Andrew Mancini & Daniel Malo

1 October 2012

Value Added Tax

 Introduction

American Exceptionalism has been part of United States history since our victory over The British in The Revolutionary War.  America has always aspired to set the global standard in everything it does.  When it comes to the tax system however, America is behind the rest of the world.  The United States heavily relies on taxing income to raise revenues and the only significant taxes on consumption are at the state level.  Most countries have some form of a value added tax (VAT), generally accepted as the best form of consumption tax, which provides many benefits over the income tax. The VAT is better for businesses and could promote more production here in the United States while at the same time, level the playing field with foreign companies here and abroad.  The VAT is also more efficient and better at capturing revenues from people that have an ability to pay when compared to the income tax in place now.  This paper will focus on discussing the benefits of a value added tax when compared to the current income tax system but will also address some of the weakness with the tax and attempt to show that they are not that significant.

Better for Business

A VAT provides a significant advantage for countries in global trade.  The VAT is most beneficial because of its border adjustability.  The tax is subtracted from exports and added to imports (Haimowitz 4:30).  “A VAT works like an export subsidy for foreign exporters and an import tariff at the same time,” (Economyincrisis.org).    A good example of how the VAT affects trade is described in a video on Taxreform.org.  A $50,000 dollar car is produced in Germany and about to be shipped to China.  Upon leaving Germany, the 19% VAT in Germany is returned to the car manufacturer, making the price of the car $42,000.  When the car reaches China, the 17% value added tax in China is assessed on the car making the price for sale in China $49,000 (Haimowitz 5:50).  This example shows the advantages of the VAT.  Without it, the German car would cost $58,500 in China.

Since the United States has a corporate income tax and its trading partners operate with a VAT, the United States is at a major competitive disadvantage in global trade.  “The U.S. corporate income tax tends to decrease exports and increase imports (by definition, therefore, hurting U.S. trade competitiveness)” (Nicholson p26).  As it currently stands, over 150 nations use the value added tax (Economyincrisis.org).  The United States is the only OECD country that does not have some form of a VAT (Nicholson p2).  For the most part, this covers every country that the United States trades with.  As it stands, there are no tax deductions for products being exported from the United States but these same products will be hit with a foreign countries VAT when they arrive there (Haimowitz 6:50).  “The VAT ranges from 5% in Canada and Japan to over 16% in China, Mexico, Spain, Italy, and the UK” (Haimowitz 7:05).  This makes U.S. products more expensive.  At the same time, imports coming into the United States from other countries receive a tax rebate equivalent to that country’s value added tax rate.  Upon arrival in the United States, there is no value added tax placed on these imports by the United States, giving imports a price advantage over U.S. produced goods (Haimowitz 6:50).

This system provides a competitive advantage to foreign countries.  United States companies have been paying while companies in countries with a VAT in place have been saving.  “In 2006, foreign nations collected VAT rebates totaling $218.2 billion while American companies were forced to pay $122.4 billion in taxes due to the VAT.  Each year the VAT imposes an average of $290 billion burden on our goods exported and another $85 billion on services,” (Economyincrisis.org).  Under this system, United States companies are outsourcing in order to avoid the disadvantages of producing in the United States.  At the same time, the United States is a less attractive place for foreign companies to produce goods.  A VAT in the United States could help with keeping jobs here and increase the advantages to producing in the United States.  With a national unemployment rate of 8.3% and the current national debt of over 16 trillion dollars, it is something to strongly consider.

More Money In Your Pocket

The VAT is foremost about paying a tax on goods consumed, rather than paying that tax through deductions from income. It can be favorable to the consumer in that they might notice more net income in their paycheck, possibly encouraging personal savings but also increasing one’s fluid spending ability. These two positives externalities of the VAT have the potential to assist contemporary (and timeless) concerns of retirement savings and economic vibrancy, by offering stronger personal savings stewardship and more spending ability in the local economy. The VAT can possibly be an economic engine, and necessary for a stable economy, hedged across the spectrum of taxable consumer purchases; foremost, it puts more money in people’s pocket, saved or spent, either is an investment.

Of course, these potentials come only in lieu of lowering or removing income and corporate taxes, in favor of a ‘light’ or total VAT system.  A system as such would allow for more spending by companies, as well as making them more competitive with other VAT countries. The ‘lost’ taxes could then allow for the phase-in of consumption taxes, generating revenue on increased purchases. Even a slow adoption of the taxation model would reward handsomely and make our current tax structure closer to parity. For example, in 2009 the United States imported $1.9 trillion worth of consumer goods. A nominal VAT of just 10 percent could have raised $190 billion from those imports.

Uncle Sam Needs You!

The VAT captures a consumer’s ability to pay by levying a consumption tax on goods that might otherwise go untaxed. Under a VAT system everyone would pay into the ‘pool’ with every purchase. It can theoretically be applied across all types of purchases, such as homes, cars, computers, and exotic goods; there are ethical considerations to be made regarding items of human necessity. The VAT can simplify tax structure for all parties, easing the burden, cost and size of tax administration and enforcement. Rather than a system of deductions, subsidies, and rebates; corporate accounting and loopholes, the VAT proposes a more efficient revenue collection scheme.

Under our current income tax structure, many people make no tax contribution, such as students, tourists, or workers in the country illegally. This gives equity to the system by inducing their participation in reciprocity for receiving many of the benefits that others’ income taxes pay for.  There is less ‘deadweight’ in the financing of public spending, HOWEVER when implementing policy, we should remain cognizant of the real economic burden on those groups, so that they aren’t ‘outpriced’ from purchases. If the rate of taxation is not ‘fair’ it will be unworkable by intrusion of underground economies and decreased purchasing, and only serve to the detriment of the policy.

Weaknesses

The Value Added Tax is a form of consumption tax.  The main problem with consumption taxes is that they are both horizontally and vertically unequal.  The vertical equity problem is that it would be a regressive tax by nature.  The lower a family’s income, a higher proportion of their income will have to be spent on consumption goods.  This means that lower income families will pay a higher proportion of their income to taxes.  In general this is not a good thing.  There are measures that can be taken to reduce the regressive nature of the tax.  No tax on food and water is a good start.  Also, lower tax rates could be placed on items that are essential for households such as kitchen appliances.  At the same time, higher tax rates can be enforced on luxury goods such as expensive clothing, fancy cars, or jet skis.

The horizontal equity problem is that tax rates amongst people with the same ability to pay can be different based on lifestyle.  With a consumption tax, a person that saves more will pay fewer taxes than a person who likes to spend a lot of money.  We can conclude from this that a consumption tax would encourage people to save and invest which is not necessarily a bad thing.  For example, Social Security cannot provide enough income for people when they retire.  If Americans save more money under the VAT, it will reduce some of the pressures on the Social Security system, a big problem for our country right now.

 

Conclusion

The Value Added Tax has the potential to be an economic catalyst for our country when properly implemented. It would better leverage American companies to compete against foreign VATS levied nearly everywhere else in the world. It would keep more cash for spending or savings for the individual and their local and state economies. The VAT keeps taxation equitable and collective. Acknowledging the regressive-ness inherent in the tax, attempts could be made at the taxation of the most expensive and most copious products, again, capturing an individual or company’s ability of means to pay. That the United States is not working with a highly effective VAT system, wherein the rest of the world does, can remind one of our stubbornness to accept the global measuring standard, the metric system–in favor of the Imperial approach. Folks familiar with that issue might recall a NASA blunder where our measuring errors were responsible for a multi-billion dollar Mars mission failure. Similar to our healthcare system,  our global neighbors, and our stagnation towards a universal single-payer delivery and management program which would bring equitability and parity to our ‘American Exceptionalism Dream’. We should embrace all of these approaches, especially concepts like the VAT, and we must also make them our own, because they are practical and fair, and would make that vision closer to reality.

 

Works Cited

Class Notes
Economyincrisis.org.  “Value Added Tax (VAT)”.  Economy In Crisis.  Web. 29 September 2012

Haimowitz, Sara.  “Value Added Tax (VAT): Fair Trade, Jobs & Growth”.  17 August 2012.  Online Video Clip.  Trade Reform.  29 September 2012

Nicholson, Michael W.  “Value-Added Taxes and U.S. Trade Competitiveness”.  Forum for Research In Empirical International Trade.  July 2010.  Web.  29 September 2012

REVIEW: “The Bookseller of Kabul”

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purchase on Amazon, used, for dirt cheap or pick out the highlights from different reviews

Asne_Seierstad_The_Bookseller_of_KabulThe bookseller: Sultan Khan

Both professionally and at home, Sultan Khan is cold and demanding.  When discussing the issue of the carpenter who stole postcards from his shop, Khan is unsympathetic to the plight of his former employee.  While the rest of the Sultan’s family feels that the carpenter had faced punishment enough in the shame that he has brought upon himself, Khan sees little need for mercy, expecting more than just the beatings that the man received from his father.  When his son Mansur asks him over the phone if the carpenter can be released, the Sultan maintains that he has been insulted, shouting, “He wants to ruin my business, undermine my prices.”  This is not true; as the carpenter’s primary motive for the theft was to help feed his children, not the ruination of Khan or his business.

Khan continues to play the victim in the ordeal, still blind of reality saying, “I paid him well.  There was no need to steal.  He’s a crook.” The carpenter stole because the wages he received were inadequate to support his family—in such dire circumstances, there was a need to steal.  Khan, though, refuses to see this perspective and show mercy and he quickly judges the carpenter guilty. He feels “the truth will have to be beaten out of him” by police interrogation.[1]

Even after the carpenter implicates others, Khan’s son feels badly, remembering the interrogators promise of allowing the man to return to his family if only he confessed.  Mansur knows that the promise will likely remain unfulfilled, recalling his father’s final words before he had left for business in Pakistan: “I’ve worked my tail off to try to create something…and a bloody carpenter comes and tries to usurp my life’s work.  He will be punished.”[2] He ignores the concerns of his family and wife who hope that he will “show mercy” before subjecting the man to a prison sentence.  They are concerned that they will be responsible for the death of the carpenter’s children, should he not be around to feed his family.  They also worry that he could die during the six year sentence, saying that “many never make it through the six years” because the prison is “riddled with infection, tuberculosis, and lots of other illnesses.”  When Mansur mentions to his father that the carpenters children could possibly be dead by the time the six years was up, Khan responds with antipathy saying “If he gets sixty years, I couldn’t care less.  He is going to suffer…”[3]

Khan is ever the master of his domain, and his word dominates above all others in his household and family.  The family accepts this treatment with (mostly) silent and resigned indignation. Khan’s sister accepts his “moods,” crying the whole day when he sends her son Fazil home from the bookstore job that the child had performed so well.[4]  The boy had worked twelve hours per day, under Khan’s promise to his sister to feed and shelter his nephew. However, one day, before the end of the arrangement, Khan scolded the boy, saying, “I’m fed up with you.  Go home.  Don’t show yourself in the shop anymore.” Meanwhile, no explanation was given to the both the heartbroken mother or the boy for the banishment from the bookstore.[5]

The author of The Bookseller of Kabul, Åsne Seierstad, puts it best when she describes the Sultan’s role in the family, likening him to a king who took over “the throne” after the death of his father.  She says “not only does he lord it over the household, but he also tries to rule over the siblings that have moved away.”  She describes Khan’s relationship with his brother, who “kisses his hand when they meet.” Khan demands respect from his younger brother and Seierstad falls short of hypothesizing when she says “God help (the brother) if he even dares contradict the Sultan or, even worse, lights up a cigarette in front of him.”  She suggests that when scolding and hitting no longer work for the Sultan, “the next punishment is rejection,” as was the case with another brother, Farid, who defied his older brother in setting up his own book shop.  Baring rare exception, Khan gets what he demands from his family, or they are disowned.  “Farid’s name is no longer mentioned” as if “he is no longer the Sultan’s brother.” “His word is law,” Seierstad says, and “anyone who does not obey him will be punished.”[6]

[1] P.237

[2] P.244

[3] P.244

[4] P.200

[5] P.187

[6] P.114-115

USA: Backup for Afghan Drug Lords

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RAWA: Since 2001 the opium cultivation increased over 4,400%. Under the US/NATO, Afghanistan became world largest opium producer, which produces 93% of world opium.

RAWA: Since 2001 the opium cultivation increased 4,400%. Under the US/NATO, Afghanistan became world largest opium producer, producing 93% of world opium.

In his article In Bed with Warlords, Walter Russell Mead discusses the New York Times drug trafficking allegations and CIA connections of Ahmed Wali Karzai, brother of Afgani President, Hamid Karzai.  The allegations should come as no surprise, Mead says, when considering the warlords that America has to deal with in Afghanistan.  He believes that in a “country that’s been involved in chaotic civil and international conflicts for thirty years, the people who have scrambled to the top of the bloody heap are unsavory.”  Because of the power structure in Afghanistan, the United States has been forced into “cutting dirty deals with nasty people.” If not one set of corrupt Afghan officials, we’d “working with other Afghans who’ve clawed their way to the top in the same murderous scrum that gave us the Karzais.”  Mead feels that “whether we stick with the Karzais or find another clan to back, we are going to be forking out a lot of money to a lot of shady types.”  He doesn’t see any way around this; that American forces need allies in the region.  “In Afghanistan there are bad guys who, maybe, we can work with, and bad guys who, definitely, don’t want to work with us.  If we could afford to leave the crummy place alone and let it go to hell in its own way, we would have done that long ago.”

But are we forced into these deals?  Mead is resigned to the status quo; he brings up the standard litany of hawkish reasons for the presence of US troops…with almost nonchalant treatment to the subject of the opium trafficking itself.[1]  The heroin is definitely part of the problem, as Jeremy Hammond of Foreign Policy Journal reports.  Afghanistan supplies 90 percent of the world’s opium and it would be foolish to treat that fact lightly, considering the players along the money trail.  He cites a newly announced US strategy for combating the drug problem: “placing drug traffickers with ties to insurgents —and only drug lords with ties to insurgents — on a list to be eliminated.”  There is a vicious double standard in this, according to Hammond; “the vast majority of drug lords…are explicitly excluded as targets under the new strategy…to put it yet another way, the U.S. will be assisting to eliminate the competition for drug lords allied with occupying forces or the Afghan government; assistance which could theoretically help people like the Karzais “to further corner the market.”[2]

Drug dealing is also easier when you have someone else to take the punishment.  Although 97 percent of the drug trade in Afghanistan is controlled by traffickers other than the insurgents, the insurgents still get blamed. In The Poppy Trail, Reese Erlich says that the “mainstream media largely ignored…government officials…instead spreading the myth that the Taliban controlled most of the drug trade.” There have been numerous instances of drug corruption throughout the Afghan government; former Defense Minister Marshal Muhammad Qasim Fahim, Karzai’s vice presidential candidate, “shipped his heroin to Russia in a government cargo plane, which then returned stuffed with cash” while Ahmed Wali Karzai has “taken control of the heroin trade in Kandahar.” And while the US government and Afghani officials have given lip service to curbing the spread of opium, they continue to place blame mostly on the Taliban.[3]  The $70 million that the Taliban make every year from opium only accounts for two percent of estimated profits from the Afghan drug trade; the other drug lords make almost $3.4 billion.  Before 9/11, the Taliban were allies in the American war on drugs and were “actually awarded…for its effective reduction of the drug trade,” receiving “$43 million for its anti-drug efforts.”[4]

The reason that our troops are in Afghanistan should be put more succinctly to the American public.  If the true purpose of our presence in Afghanistan is to assist in a particular warlord’s monopolization of the heroin trade, then it must be announced in the interests of transparency; otherwise, it needs to be refuted outright, with evidence to support that claim.  The fact that the heroin trade has escalated since 9/11 on our watch and after our puppet was installed, cannot be denied.  American leaders must accept responsibility for their complicity in allowing the world’s prime source of heroin to grow.  They should not blindly holler “9/11,”“women’s rights,” and “democracy” as justification for lingering in Afghanistan. These buzzwords have been grossly misrepresented and are used to sell an idea of the country that isn’t grounded in reality.  The real issue at play is the control of the heroin trade and it is that truth that should be acknowledged in the media.  Mead suggests we “drop the phony outrage over the CIA hiring a suspected drug dealer in Kabul’s first family.” This is something that our intelligence service was probably most intimately aware of, and an issue worthy of mainstream attention.  Mead is correct in his observations that the Karzai/opium connection’s exposure in the media might serve to straighten out the Afghani government. He suggests that we use the press to put “all the pressure we can on the people now wretchedly misgoverning Afghanistan in order to get them to be a little less sickeningly corrupt and incompetent.”[5]   It should go further than that, with the American people asking about their own government’s motives:  Considering how we have knowingly and tacitly supported the Karzai family’s connection to the opium trade, what are our intentions, first, with the Karzais, and second, all the opium?  Why do the poppies continue to grow under a Karzai regime, when, just a decade ago, the United States was paying the Taliban millions of dollars to eradicate it?

[1] Walter Russell Mead, “In Bed with Warlords,” The Daily Beast, 28 October 2009. (accessed 19 November 2009) http://www.thedailybeast.com/blogs-and-stories/2009-10-28/our-dangerous-liaisons/full/

[2] Jeremy R. Hammond, “Ex-ISI Chief Says Purpose of New Afghan Intelligence Agency RAMA Is ‘to destabilize Pakistan’,” Foreign Policy Journal, 12 August 2009.  (accessed 19 November 2009) http://www.foreignpolicyjournal.com/2009/08/12/ex-isi-chief-says-purpose-of-new-afghan-intelligence-agency-rama-is-%E2%80%98to-destabilize-pakistan%E2%80%99/

[3] Reese Erlich, “On the Poppy Trail,” The Progressive, November Edition. (accessed 19 November 2009) http://www.progressive.org/erlich1109.html

[4] Hammond
[5] Mead

Image and more:

http://www.rawa.org/temp/runews/2008/10/15/how-deeply-is-the-u-s-involved-in-the-afghan-drug-tradeo.html#ixzz3LXFnKFhV

Manifest Destiny: American Progress?

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John Gast’s (1872) “American Progress.”

John Gast’s (1872) “American Progress.”

Few early American paintings capture the “spirit” of the young nation like that of John Gast’s (1872) “American Progress,” otherwise known as “Manifest Destiny”.  The visual detail itself tells a great story that is familiar from any history reading.  It shows the westward migration of “Americans” across our continent, leaving behind the civilization of east, and entering the foreboding “unsettled” territory that lay beyond the reach of train and telegraph; All of this, while being guided by divine “providence,” who carries the books that will “civilize” the wild west and helps to lay the wire that will keep the country connected, brightening the path for the railroads and future expansion.

Being driven ahead of the new settlers, are the old inhabitants of the land; the bear, the Indian, and the buffalo; moved out as to be replaced by a manufactured landscape filled with new farms and cities, supervised by a beautiful servant of God, who helps to rid ignorance and evil in this “untamed” land.  The painting shows no sympathies towards those displaced, and they can be looked at as a hindrance of progress.  They stand in the way of this great migration, and are relics of a darker, less civilized time.  American idealism is what will “save” our land, and in its future applications, the world.

It is an aspect of early America that has carried into modern times; the idea that our way of life is worthy of expansion and wished for (and supported) by our God.  We see in ourselves the ability to help mankind, and at the same time help ourselves.  But in reality, as well as what is on the canvas, the tendency is to forget about the perspective of the people driven out by our expansion, and the decimating effect it has on culture; the ones who never asked to be “saved” from their supposed “ignorance.”

While “Progress” depicts a hard-working, groundbreaking ideology with enormous potential; one can see the makings of a self-centered, oblivious, obnoxious, and ultimately insincere materialistic consumer nation.  The tendency is there to jump headfirst into any project, because of the faith we have in ourselves and our “destiny”.  It is shown in the attitude of the portrait: that there is “new land” that must be “tamed” and it is the American destiny to tame it.  We eventually decide to “share” our idea with the rest of the world.  Pride and capital led to further expansion, but faced the externalities of egoism and greed.

The plight of the ways of life displaced by the expansion of is ignorantly brushed aside, and ultimately, heavily criticized in hindsight.  Since the creation of this work, there have been many parallels questioning the motives of expansion, and many references to the attitude of “Manifest Destiny.”  Is it the American imperative to spread ourselves first nationally, then globally?  “American Progress” views this country as divinely inspired, the land of liberty and the light of modern democracy in the modern era.

Our big ideas are of course, worthy of sharing with our neighbors.  However, history will determine whether our goodwill is viewed as an imposition or accepted graciously.  We must remember that the eyes of the world are upon us, and they expect better of our motives and implementations.  They ask us to question:  Have all the big words taken on different meanings?  Has our ideology been corrupted, all in the name of “American Progress?”

A Dab of Social Media: Fake Revolutions

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Alchemy of the “Twitter Revolutions”
TV-Twitter1-1024x655

Humans enjoy an unprecedented connectivity and ability to reach others.  This is now coupled with the infrastructure for a rapid, open flow of information: images, video, voice; by anyone, anywhere, online. This has the power educate, to promote peace, to expose injustice (indeed, it is hoped it will).  It also has the power to divert attention from particulars in a story, as well as outright misinform, using glitz, sales pitch and other coercive approaches.  It has been these strategies which have been consistently employed by Western Media since their foray into New Media.  And not only has this coverage been packaged for consumption (even subconscious source and ‘brand loyalty’), it has a bias, which reflects in the final product to the Viewer.  Summed up in a phrase simplification of a larger issue, but “what you need to know” and “what you remember,” sometimes making credulous leaps with repeated ‘truths’ the like of WMD’s, distortions of Al Qaeda or even declarations of “Revolution.”

Peabody award winning journalist/producer, Reese Erlich makes the argument that the 2009 Iranian “Twitter Revolution” was mostly a Western Media machination, set during a blackout of disputed election results. Erlich has covered civil uprisings in numerous countries in the Arab and Asia Minor regions and has critiqued the portrayal of these events by the Western Media in numerous publications. He observed that during the media blackout that followed the disputed victory of Ahmadinejad over Mousavi for the Iranian Presidency, correspondents, who were forbidden to cover the demonstrations, turned to New Media sources Twitter and YouTube for their information.  Without a doubt, this informed the West of electoral fraud accusations, demonstrations and a media crackdown in the country of Iran, but it was the Media that declared it a ‘revolution’ to the world. Ahmadinejad, declared pariah by the Western Media, now had a challenger, who would become a Media buzz-name and ‘Anti-Ahmadinejad’ in Mousavi. Even though the two politicians were not far off in platform; Center-Right and consistent with the mandates of Theocratic Iran’s Supreme Leader Khamenei rendering the election results generally moot in terms of progressive outcomes.

The limited coverage available to the West, from the ‘Twitter Class’, those being able to afford internet devices and such connectivity, which in 2009 was limited to an upwardly mobile segment of Iranian society, presented a very channeled picture: the grievances of the rich and upper-middle class; not necessarily the democratic will or demands of the people at-Large.  The Media blackout was modus operandi for the Iranian Government, ad arbitrium for journalists; catalyst enough for a Western Media story, with prepared suggested talking points to sell Western Consumers.  The substance of Mousavi, the ‘contested elections’ and demonstrations were largely unimportant and glossed over in Western Media outlets; being only the requisite points to justify or purport a revolution to the world.  It is only in that Western Media outlets were getting their material sourced from New Media that it became a self-titled “Twitter Revolution.”  Perhaps sounding too slick or cliché, a less radical catchphrase, the “Green Revolution”—revolution, nonetheless—was settled upon by Western Media consensus to encapsulate ‘coverage’ after the initial term was challenged.

So the question is: did a ‘revolution’ occur, or has the Western Media mischaracterized (valid) demonstrations, intentionally or unintentionally? I would posit that the action was intentional, considering that Iran is an oft mentioned foreign power, and ‘enemy’ by definition by our Military-Industrial-Congressional-Media complex.  I support the notion that media outlets capitalized both on the availability of new media footage and the chic nature of a Twitter ‘story’ to manufacture a narrative for their audiences. This narrative is a psychological attempt, firstly, to erode the validity of the Twitter ‘tool’ in general America, and predominantly, to solicit support for a course of action parroted by candidates and talking heads: Regime Change.  I hope to see the failure of the theocracy, which came to power after years of United States intelligence involvement, undermining democratically elected Iranian governments.  I do not want another puppet (or kindly, someone more malleable) as Mousavi has been characterized, rather, legitimate candidates, participating in free and fair and safe elections.  We only get to that point, yes, with regime change, which comes by revolution. But it must be a legitimate revolution, an overpowering display of the will of the people.  For the Western Media to claim one for their audience is coverage to what end?

Video: “Iran not a Twitter Revolution.” (Real News) June 2009.>
http://www.youtube.com/watch?v=pFGSplRR7oI&feature=related
“Iran’s ‘Twitter revolution’ was exaggerated, says editor” (Guardian UK) June 2010.
http://www.guardian.co.uk/world/2010/jun/09/iran-twitter-revolution-protests