Archive for the ‘Specific Facts’ Category

Why Corporations Fight for Marriage Equality

In Specific Facts on July 31, 2012 at 3:53 pm

More and more major corporations are coming out on the side of marriage equality, either expressing their support of same-sex marriage or promoting LBGT-friendly products and marketing strategies.

Target has started selling t-shirt for Pride Month. JC Penney adopted Ellen DeGeneres as a spokesperson and has run ads featuring families with two mothers and two fathers.  Starbucks has publicly endorsed the adoption of same-sex marriage in the United States and abroad.

There are many reasons why fighting for marriage equality benefits these and other corporations, no matter what their ideological proclivities may be.

Consumer Perceptions

More and more Americans are expressing their support of same-sex marriage. A Washington Post poll in May found that 53 percent of people think that same-sex marriage should be legal, and 51 percent approved of President Obama’s recent announcement that he supports same-sex marriage.

Companies who come out against same-sex marriage risk alienating the majority of their customers, thereby losing their business. Depending on their demographic, some companies could stand to lose a lot of profits by taking a position against same-sex marriage.

Competitive Edge

Companies that do business in states that don’t recognize same-sex marriage, or that have laws prohibiting recognition of same-sex unions, are at a competitive disadvantage for attracting and retaining the most qualified candidates.

LGBT employees are more likely to move to states that offer same-sex marriage benefits, and companies that do business in those states are better positioned to attract the widest range of candidates. It benefits businesses to petition for same-sex marriage benefits in the states in which they reside, if not the whole country.

Overhead Costs

Companies that do business in states that offer same-sex benefits don’t have to manage two separate systems of employee benefits, reducing overhead costs. Enacting marriage equality across the country will help companies to save money by streamlining these systems.

Company Culture

As long as marriage is not an equal right for all citizens, there will be a division in the way that LGBT citizens are treated and the way heterosexual citizens are treated. Such division promotes unequal treatment of LGBT workers, which can contribute to an uncomfortable or hostile environment.

By promoting marriage equality, companies encourage a more welcoming and accepting environment, minimizing absenteeism and encouraging greater productivity, both of which affects the company’s bottom line.

While some companies may feel it is their ideological duty to fight for marriage equality, others stand to gain economic benefits. If marriage equality becomes a reality across the country, companies can attract a wide range of qualified applicants, minimize overhead costs, and encourage a working environment accepting of all. By coming out in favor of marriage equality now, companies also align themselves with the growing majority of Americans who are in favor of legalizing same-sex marriage.

<Lisa Shoreland is currently a resident blogger at, where recently she’s been researching low income scholarships and military scholarships. In her spare time, she enjoys creative writing and hogging her boyfriend’s PlayStation 3. To keep her sanity she enjoys practicing martial arts and bringing home abandoned animals.>


Featured Find: Madness: The Afghan Massacre is History’s Dial Tone

In Specific Facts on March 14, 2012 at 3:56 am

Gawker’s “Mobutu Sese Seko” has a piece up about how the massacre in Afghanistan should not be seen as an anomaly but as par for the course. (I have argued similarly in my posts on the Gabrielle Giffords shooting and in one of my Hobbes posts at the League of Ordinary Gentlemen.) To wit:

Racism, at least, would have been a kind of excuse, evidence of a critically planned process. It’s almost comforting: Even the most saintly among us has harbored or inspired some racial resentment. Racism is a universal form of bullshit—a lower-social-order attitude, but at least an indicator of some ordered thinking.

Instead, the shooter, allegedly an 11-year veteran, with three tours in Iraq, was probably crazy. Which basically means we’re fucked.

Through the power of euphemism, we’ve come to think of madness as some regrettable and essentially random byproduct of combat instead of an intrinsic part of it. InWartime: Understanding and Behavior in the Second World War, Marine veteran Paul Fussell documents how we’ve officially added syllables to this condition to transform it almost into a logistical inconvenience.

In the First World War, it was “shell shock.” In the Second, “Combat Fatigue” or “Battle Fatigue.” We jumped from two self-evident syllables to four sublime inanities that make it sound as if soldiers only want for more naptime. And, of course, in the present day, we obfuscate via the king-hell syllabic nightmare of “post-traumatic stress disorder.” It not only relies on the anodyne stress (“I have a party to plan and am running late! I am so stressed! I’m a Cathy cartoon! Ack, ack, ack!”) but the post-trauma modifier, which makes it seem as if the horror has passed and needs only to be endured in a series of diminishing aftershocks.

History maintains a stronger grasp on the matter. Both the Bible and Herodotus chronicle bloodlust and mass rape in wartime. Old Norse sagas speak both of fey warriors already seemingly ethereal and dead, as well as berserkers so consumed by bloodshed that they lose awareness of the world around them in their mad violence. In With the Old Breed, Marine Eugene B. Sledge not only describes his formerly perfectly normal comrades cutting gold teeth out of the mouths of still-living enemies but also watches as someone urinates into the mouth of a dead Japanese soldier.

If that sounds familiar, it’s because a similar story emerged a few weeks ago, about four Marineswho urinated on three Taliban corpses while laughing and telling jokes. And the latter, dehumanizing comedy, echoes Philip Caputo’s memoir A Rumor of War, in which his men joke, “Oh, excuse me, Mister Charlie,” after kicking the corpse of a teen whom they knew was not Viet Cong but shot anyway, for swiping a tree branch at them and running away.

As Fussell notes, conduct similar to the above deserves words more honest than euphemism—words like insane. This is what killing and the fear of being killed fosters. Wanting to preserve the dignity of soldiers (or “heroes,” if you will) does them no favor if it requires dishonesty about their condition, especially if such dishonesty allows it to metastasize into the methodical slaughter of women and children.

Even without the alleged shooter’s three tours in Iraq (which, conservatively, would amount to more combat time than American soldiers saw in Europe in the Second World War) and a possible nervous breakdown, it’s easy to see how service in Afghanistan could drive anyone mad. Outside of the Forward Operating Base, it’s difficult to distinguish friends from enemies. The people of Afghanistan increasingly loathe our ability to piss on bodies, burn Qurans and rain bombs on weddings from a great height. The line between resentment and violent malice is a fine one for soldiers to read when they have no objective for striking back, no uniformed enemy, no certain position to attack, clear and defend.

Regulations Kill Industries: Porn Edition

In Specific Facts on January 6, 2012 at 3:26 pm

Did social conservatives think of this?

This week, the AIDS Healthcare Foundation launched a new war against porn’s potentially reckless ways, proposing a strict initiative that would require male porn stars to wear condoms during vaginal and anal intercourse.

Since California is one of two states in which porn is legal (the other is, only recently, New Hampshire), could this be the end of porn?

Immediately, the porn world was up in arms over the initiative. “Hey, dicks, it’s really quite simple,” says Jeremy. “We don’t mind wearing rubbers, but no matter how you slice it, the viewers don’t want to see them.”

“The fact that these workers’ health and safety has been neglected is a very dangerous situation,” AHF president Michael Weinstein tells The Daily Beast. “It’s a matter of fairness. Why is this the only industry not afforded protection when they go to work?”…

…But Cal/OSHA and the AIDS Health Foundation insist the initiative—a stricter version of the state law—will be easier to enforce on a smaller scale. They need 200,000 signatures by June 5 to add the measure to the November 2012 presidential ballot in L.A. County. Weinstein is confident they’ll amass the votes, since they easily collected 70,901 signatures for the citywide measure. The initiative argues that the adult entertainment industry should have to comply with the same laws as any other private employer in California. Just as construction workers are required to wear hard hats on site, porn stars should have to wear rubbers on set. Cal/OSHA even mandates that porn bosses provide employees exposed to blood-borne pathogens (seminal and vaginal fluids) with dental dams, gloves, and eye protection.

This all raises the question: If condoms are enough to drive viewers away, who’s going to pay money to watch people go at it while looking like CDC agents?

It’s a brilliant plan, if it is a plan.

A Cross For All America

In Specific Facts on September 11, 2011 at 8:09 am

Two years ago Los Angeles sculptor Jon Krawczyk was presented with a unique opportunity.

The image of the I-beam cross left standing in the rubble of the World Trade Center is a familiar one. In the days and weeks following 9/11 the cross became many things for many people: a symbol of hope and healing; a representation of the unyielding stance of good in the face of evil; a sign of God’s presence; a meaningless coincidence. After standing for several years on a pedestal at the corner of the former Trade Center site the cross was in October 2006 moved a block away, to a place along the sidewalk next to St. Peter’s Catholic Church (which itself was not only damaged when the towers fell but also played a vital role in the recovery efforts carried out in the wake of the attack). This I-beam cross would eventually be moved back to its original site, as a permanent part of the September 11th Memorial & Museum. The St. Peter’s community, meanwhile, had grown attached to the cross and what it represented, and began searching for someone who could create a new cross to stand in its place. My friend Jon Krawczyk, a New Jersey native, accepted the task.

Rather than replace that I-beam cross with a replica, Jon wanted to create something completely different. After many months of designing (and redesigning), Jon had ready a model of a sculpture that, while in the basic shape of a cross, took on in abstract form the shape of a human body, comprised of several uniquely contoured pieces that came together into a single entity. The symbolism, Jon hoped, would transcend the traditional significance of the cross and make this memorial a conduit of remembrance that would embrace all Americans.


It was March when Jon called me. I was in New Jersey, having just removed myself and my family from the nuclear disaster still developing not far from our home in Fukushima, Japan. He was almost done building this cross, he told me, and wanted me to drive cross-country with him – to help fend off the tedium of the long drive perhaps, but also to snap some pictures and maybe shoot a little video as well. ‘There’s a hole in the middle of the cross,’ he said. ‘We’re probably going to meet a bunch of random people, at gas stations or wherever. I’m going to ask people we talk to if they want to write prayers or messages to put inside the cross. I have a chunk of the actual wreckage of the towers, I’m going to seal up the hole with it when we get to New York.’

Cool, I answered along with a few other vague adjectives.

‘I also want to bring this thing to fire stations all across the country,’ Jon went on to say. ‘A lot of firemen died running into those towers trying to save people, I think we should try to pay a little tribute to them.’

Jon and I spoke of driving through deserts and over mountains, introducing his memorial to people from coast to coast. ‘This could turn out to be pretty amazing,’ we agreed. We also agreed, jokingly to assuage the specter of the possibility, that no one in Arizona or New Mexico or Tennessee was going to care about a twisted and contorted steel cross – aside from the novelty. Besides, 9/11 was almost ten years ago; hadn’t America finished licking her wounds and moved on?


America, although a melting pot or salad bowl or whatever other culinary allusion you prefer, is still a largely Christian nation. Everywhere we went, from the Grand Canyon to tiny DeKalb, Texas, from Katrina-ravaged New Orleans to the serenity of northern Indiana, we encountered countless people who identified with the symbolism of the cross. Hearing what it was for only served to intensify their emotions. God bless America! was the commonest of sentiments. You gentlemen certainly are doing God’s work some said in so many words. Others, after half an hour or more of engaging us in conversation, called their friends over and placed their written messages in the cross and asked us to join hands with them in prayer. Thank you Lord for bringing your message to the world through these men and such.

In contrast, in 2008 Jon hauled a twenty-two-foot steel statue of a hockey player across the country on a flatbed trailer. He said few people came up to him to ask him about it. Fewer still seemed at all impressed. A fourteen-foot cross on the back of a pickup, on the other hand, stops truck drivers and housewives in their tracks; lures teenagers and the elderly over for a closer look; pulls convenience store clerks and motel cleaning staff away from their counters and carts. Obviously, to many people, this was something special.

But even as a memorial for an event as far-reaching as 9/11, not everyone felt connected to the curved and angled cross in front of them. It’s a 9/11 memorial? Going to New York? That’s nice… And they’d continue on their way. Some barely slowed as they glanced over, or didn’t slow at all. The great majority of those we met, though, had something to say.

Not surprisingly, there were some opposing opinions mixed in with all the admiration.

In a parking lot next to the Grand Canyon we met a group of young men and women of Asian Indian descent. After an inquiry and answer session that would be repeated hundreds of times across the country one man spoke up. ‘I am Hindu,’ he said. ‘How does a cross represent me?’ Jon responded by saying that this was meant to be more than a cross; it was just as much the form of a person, comprised of parts that come together. ‘Much like our country came together on that day.’ The young man remained unconvinced. ‘Those firemen who died,’ Jon went on, ‘they didn’t go running into those towers to save Christians, they went in trying to save people. This isn’t about religion, this is about sacrifice.’

In the end the man nodded, wrote something on a piece of paper and slipped it inside the cross.

‘Trying to say this cross represents everyone,’ said one Jewish man we met in Manhattan, ‘is plainly misguided.’ Placing a message in a cross, he explained, meant nothing to him since the cross itself has no meaning to someone of the Jewish faith. That this memorial was meant to represent something beyond the tenets of one particular faith did not change his mind. ‘It is a cross, that is obvious. No matter what else you think or want it to be, it is still a cross and therefore represents only Christians. If you want to represent all people you should have symbols of all faiths.’

‘I respect that this means something to you,’ said one Muslim man we met on the streets of Brooklyn. ‘But you need to understand that Muslims aren’t going to be interested in a cross.’

When Jon finally welded into place that piece of the World Trade Center rubble, the cross contained messages from people representing every faith we encountered along our way, bolstering Jon’s hope of creating a memorial that, while Christian in form, incorporated a universality. This was a cross, yes; but at the same time it was a man, an abstract human being made up of parts that came together, offered as a repository for the wishes for peace we all have.

Somwhere in this, perhaps, is something everyone can agree on.

Invitation to the Reader: Experience a day along the journey of Jon’s cross – or get the complete story – at

Also: Get a sneak preview of the upcoming documentary of the journey at


The Solutions to Poverty and Unemployment Will Look Something Like This: An Interview with Rachel Cook

In Specific Facts on September 5, 2011 at 5:53 pm
Rachel Cook is a friend of mine from college who let me interview her about her upcoming film, currently titled the Microlending Film ProjectRachel shot footage for Kiva – an awesome organization that has stoked the fires of entrepreneurship in Africa, Southeast Asia, and around the world, and is now stoking the fires of entrepreneurship here in America:

The Microlending Film Project (film title TBD) was conceived as a passion project by Futures Trader turned Director/Producer Rachel Cook after she read a Nicholas Kristof op-ed in The New York Times late one night at a Chicago trading desk.  The article was about how empowering women in the developing world with tools like microfinance can bring about positive, sustainable change (Saving the World’s Women).

The project has been undertaken with the best interests of poor women at heart, as the film seeks to show a balanced, comprehensive picture of microfinance through the lens of the personal stories of the women it impacts. The issue of transparency and its paramount importance to the industry is a key focus, as is showcasing best-practices and suggesting how microfinance can most effectively be used as one development tool in a larger box both domestically and abroad, specifically in terms of the opportunities mobile banking and crowdsourcing promise.

The Microlending Film Project is holding a DVD pre-sale and offering other perks to raise funding for post-production.  To view a trailer and/or purchase a DVD, please follow this link:
The filmmaking crew is also actively seeking out investors at multiple levels. If you have an interest in learning more about investment opportunities in the film, please contact Rachel Cook at rachel at microlendingfilm dot com.
Anyways, here comes the interview:
Christopher CarrHow did you come to where you are now? Describe your life after graduating from college. How did you choose your current path? Where do you see yourself going after this?
Rachel Cook: I knew I wanted to do something involving writing and film, and after studying for a semester in Los Angeles junior year at Duke I knew I hated that “city”. I’d heard about Second City/iO and all of the comedy writers and performers it had produced, people like Bill Murray, Chris Farley and Tina Fey, and studying there seemed like it provided more of a sort of clear path than would toiling in obscurity somewhere else, so I moved to Chicago. While there, I picked up an equities trading position to pay the bills, and I took a ton of improv classes and put on a few shows.
While it was gratifying to put on a show and have 30 people come, or even say, 5, obviously film can reach a much larger audience, so I think that notion was percolating in the back of my mind through the Second City period. Meanwhile, a few years in to my Chicago tenure, I started trading Futures on the European shift, which was in the middle of the night of course, Chicago time.
The trading environment was so surprisingly sexist that it really affected me. I worked at four firms total – three in Chicago and one in Manhattan – and I was always the only girl trader, or one of a few. It was definitely one of the last bastions of old school sexism and it was infuriating and upsetting. So I guess that’s why, one night in September 2009 when I came across a Kristof op-ed in the NYT about the positive impact of microfinance globally, particularly on poor women, that I immediately felt compelled to text my sister and tell her that I was going to make a film on just this topic. Microfinance appealed to both my feminist sensibilities, and to the interest in good investment I’d cultivated while on the trading desk.
From there, it was just a matter of figuring out how the hell to make a global feature film, because I definitely didn’t know how to do that, and we ended up shooting on four continents. In hindsight, I’m glad that I was arrogant and ignorant enough about the process to take all of this on; and it’s grown from here. I quit the trading job I was working in Manhattan in November of 2010 and started working on the film full time, and we just wrapped principal photography this past week in Detroit, so we’ll be heavily editing from here on out.
Going forward, I plan to collaborate with Duke and the iHub, a shared start-up space in Nairobi that we discovered when filming, to launch a social gaming application that facilitates mobile-to-mobile microlending across continents. It’s in its very early stages, but we have high hopes.
Christopher CarrSo, it’s safe to say you’re a microfinance believer. A lot of controversy has come about recently around Nicholas Kristof, who supposedly fabricated a lot of his pro-microfinance columns. Do you think the ends justify the means? Also, could you elaborate on how microfinance appealed to your feminist sensibilities?
Rachel Cook: Yes, from what I’ve seen, it mostly works, and the offer of an alternative method of financial access that it presents is a good thing. Though I haven’t come across accusations of Kristof specifically fabricating pro-microfinance columns, I know he’s been criticized for oversimplifying issues relating to development and resultantly misrepresenting large, complicated problems.
What I know of Kristof’s response (and I’m paraphrasing/summarizing of course) had to do with the contention that in the interest of advancing public knowledge and involvement in development issues, telling a single, powerful story that sheds light on a particular situation because it incites empathy for the person or the people it impacts can bring about political and financial support for an important human rights issue that wouldn’t necessarily otherwise exist, and that that has value. I agree with this idea.
Trying to elaborate on my statement about microfinance appealing to my feminist sensibilities is difficult to answer because the answer is complex; it’s hard to distill into a few paragraphs. I don’t think I had a conscious awareness of sexism prior to college – coming from a small town in Ohio, and being the “smartest kid” in my class or whatever helped me to avoid some of that shit, at least on a more sort of conscious level – but leaving that and first coming into contact with rich 18-year-old boys who were entitled and presented themselves as “super smart” and were into making girls less obnoxious than they were feel silly or stupid was really jarring, and took me years to process and become equipped to combat, in a way.  That was probably my official introduction to sexism.
And unsurprisingly, in the trading world, it was sort of rampant in a way that was crazy to imagine still existed in 2008 – I sometimes felt like I was on the inside of some terrible fraternity and my female presence wasn’t enough to stop any sexist awfulness they were inclined to, so they behaved in appalling ways and I just sat there on my machine staring at gold ETFs or whatever and had to witness it.
So yeah, I guess I was primed to respond strongly to the first sort of pro-feminist, effective-sounding development tool, any pro-feminist anything, really – and when I came across that article while actually sitting at my trading desk, and it talked about how microfinance has the capability to transform a woman’s life, to give her a voice within her household, to stop her from getting beatings from her husband because she’s now a viable source of family income, whatever, I was like, yeah, this is important.  I want to be involved in something that has the potential to do this.
Christopher CarrCan you give us some examples of how microfinance has the capability to transform a woman’s life?
Rachel Cook: The example that immediately comes to mind is the one Kristof wrote about that inspired this project, which was actually a part of the excerpt from his book. To paraphrase, it was about a Pakistani woman named Saima whose husband had gotten the family deep in debt, something like $3,000, which seemed like this amount that it would take the family generations to pay off. And the husband was unemployed and took out his frustrations on her, often beating her. Once she took out a microloan and started a successful embroidery business, she was able to pull the family out of debt surprisingly quickly, and largely because she was now the family’s breadwinner, she commanded a lot more respect within her family and in the community at large, and her husband stopped beating her. So stories like that I think can be very powerful, although this is an ineloquent retelling.
In terms of what we’ve seen ourselves when filming, there were stories like those of Pablina Portillo, the women we spent time with in Paraguay. Her youngest son had a tumor on his abdomen, and the family spent all of their savings to cover his medical expenses (luckily he survived and is now very healthy), but after that they weren’t sure what they’d do to stay afloat. But because microloans were available to her, she was able to launch a successful business selling sweetcakes at a roadside stand outside her home, and the family got back on its feet. Beyond that, because of her relationship with the microfinance institution that had initially given her the loan, the Fundacion Paraguaya, she was made aware of a local agricultural boarding school, and her daughter Antonia was able to win a scholarship to attend there. Antonia now learns progressive farming techniques that she brings home, which helps out her parents. So the positive impact here spanned generations.
And even in Detroit, for instance, to place my response to this question in a Western context, taking out the $2000 loan from Kiva that Emily Thornhill of Homeslice Clothing took out this June has resulted in lots of free publicity for her business, and lots of excitement surrounding entrepreneurial and creative efforts in a beleaguered American city. I mean, in no small part because of what I saw microfinance doing in Detroit, some of the ripple effects of that, I came away in love with the city. So the positive effects of successful microentrepreneurship can not only impact women in sometimes incredible ways, but they can add a certain shine to a community in a very palpable way as well. I actually plan to launch a Kiva City in my own hometown of Canton, Ohio, which is similar in make-up to Detroit in many ways, in conjunction with the screening of the feature there next spring, and I’m excited about what this could do for my own economically troubled area.
And then there’s the flipside, which we saw a lot of in India, in which the institution of microfinance was failing the women it had purported to help. But that’s another story.
Christopher CarrCan you tell us a bit about the failings of microfinance, where it has to grow as a field, what kind of future you see for it, and how it compares to public measures like welfare or aid?
Rachel Cook: The failings of microfinance, given what I’ve seen, tend to have to do with a lack of access – supply not meeting demand – or with government interference, as in India and Bangladesh. In terms of lack of access being an issue, it’s not like Yunus invented the idea of giving out $27.00 to a poor person in 1976 – global communities around the world had been finding ways to finance things for much, much longer, it just wasn’t formalized, and lending on that scale wasn’t something that interested banks. But in modern times, when someone can’t get a loan from a microfinance institution because they can’t get a group of ten people together to apply and that’s a requirement, or because the government has shut lending in their state down, that person will often have no choice but to turn to a loan shark, who may charge upwards of 50% interest, and who may use any of a number of unscrupulous methods to later collect.
Another problem that I think was hugely significant in the failing of the big for-profit microfinance institution, SKS, and the subsequent shutdown of microlending in Andhra Pradesh had to do with the product they offered being a solely financial thing – they just made loans. In that sense, they operated just like a bank, and very differently from many microfinance organizations the world over. There wasn’t any assistance in the design of business plans, any mentorship, and the group lending model was less emphasized, so people didn’t feel the peer pressure to repay that they would’ve felt if they were taking out a loan of with their mother, their sisters, and their neighbors. There wasn’t the sense that they’d really be letting someone down if they didn’t do their part to repay, it was just a faceless bank, and they didn’t feel they were being partnered with in their microbusiness initiatives.
And then, when people started hearing about the suicides and they were so widely publicized, people were told that they didn’t have to repay. We interviewed the head of SKS, Vikram Akula, and he was adamant that his company was a victim of “state brutality”, that the government had played the key role in the problems SKS was having. I don’t know how much truth there is in that, but certainly the supply of loans was limited by government intervention, while demand remained high.
In terms of the direction it has to grow in as a field, issues of transparency are big – there’s no real standardized metric for the determination of what interest rate is actually charged on a loan, it’s often this insanely complicated formula, and one institution that says it charges a 25% interest rate in Bangladesh versus one that says its charging the same in Uganda may in fact be financing these loans at wildly different costs, and not necessarily telling its customers this. The other for-profit MFI that was founded before SKS (It was really the first large-scale for-profit.), Compartamos in Mexico, was charging over 100% according to the Microfinance Transparency Initiatives data, and the CEO of that company is now a billionaire, and they were obviously not publishing this data back in 2007 in a transparent manner, but they also weren’t required to by any central regulatory agency because there literally wasn’t any, and that has to change.
In the future, I think microfinance will become increasingly mobile-to-mobile, which is already happening in East Africa. There’s a company called Musoni, a very new MFI, that is the first in the world to microlend 100% via mobile phone, and I think person-to-person lending that operates on a similar platform is sure to follow. In this way, it’ll become cheaper – what people often don’t realize is how expensive it actually is to amortize these tiny loans – and because mobile phone usage is becoming more and more popular in the developing world, people who need these loans will be able to find them. In Paraguay, for instance, at least as of 2010, there was something like six million people, and 6.6 million mobile phones.
We saw amazing things in Nairobi – people use their cell phones like debit cards, people living in the slums would buy tomatoes at an outdoor market and pay via text message. In five years, Nairobi may very well be a global tech hub, and I think microfinance will be a huge part of that.
I don’t think microfinance really compares to public measures like welfare or aid; as Matt Flannery, one of the co-founders of Kiva said in a talk he gave at the Kiva City launch in Detroit, “microfinance isn’t a sophisticated financial commercial instrument, but it’s not charity either.” I think that’s right; microloans are simple loans, but they’re loans, and people who receive them pay them back at statistically incredibly high rates. So that lends itself to greater efficiency as well; aid dollars may be more likely to be used in less efficient ways, but the level of accountability that traditionally is extended with a microloan sort of cultivates a different attitude among the people receiving the money, and I think that is largely a very good thing.
Christoper CarrWe’ve been hearing recently about the end of poverty, the paradox of thrift, globalization, specifically of commodities and finance, and it seems like all of these forces meet at microfinance. Do you think microfinance has the power to create a new, organic, bottom-up world order? And, if so, would microfinance supplant traditional economic arrangements like apprentice systems and barter markets? Is that even a bad thing? Or is it all so complex and so different from place to place that nothing can really be generalized from it? 
Rachel Cook: I would agree that all of these things you’re mentioning seem to meet at microfiance, and though some people may be interested in pushing the narrative that microfinance has the power to create a new bottom-up world order, I would argue that a more precise description of what it does is that it presents an alternative, certainly more democratic means by which to access capital – so in essence, it offers the world more options for financing, and in that sense I think it sort of broadens the applications of capitalism rather than knocking that world order over on its head. It is, by definition, inclusive, so everyone can join in and reap certain benefits.
But I would, however, strongly argue that microfinance has the power to play a key role in toppling certain elements of the “cultural world order,” if you will, that are overly patriarchal and oppressive of women. Additionally, if people are to become convinced of Yunus’s claim, that access to credit is an “inalienable human right,” than I suppose it could be argued that microfinance goes so far as to expand the general conception of what it means to be human. That’s a pretty powerful thing for $25.00 to do.
I don’t think microfinance will supplant traditional arrangements like barter systems, etc. – it can co-exist peacefully with other aspects of economics and perhaps even enhance them. But yeah, while its applications differ in marked ways from place to place for sure, I think the generalizations above can hold – microfinance can help women, and it absolutely makes capital more accessible to people who wouldn’t otherwise have a chance at finding any, which is in and of itself a transformative thing.

Assessing Risk of Nuclear Disaster

In Specific Facts on September 4, 2011 at 6:36 pm

I commented at LoOG: 

I started this as a reply to Pat above, but it just got longer and longer and longer, and it’s probably the most significant thing I’ve written about Fukushima since it all went down, so I decided to start a new thread with it.

I was a proponent of nuclear power before the Fukushima disaster, and I’ve had a long six months or so to think about this, but I’m not sure if I’m still on board with nuclear because: human error rates are always higher than we estimate them to be. I’m not sure the real risks are worth the benefits; so I’m skeptical of the way we usually evaluate risk when it comes to nuclear power.

In the case of Japan, the tsunami affected sparsely-populated coastal areas (Japan’s infrastructure has already been shaped by insider’s knowledge of risk distributed over thousands of years of seismic activity.) Nevertheless, the tsunami still managed to kill almost 30,000 people. This speaks to the sheer power of a 9.2 quake right offshore more than it does to poor planning à la New Orleans and Hurricane Katrina. For what Fate dealt it, Japan did a hell of a job minimizing casualties.

In contrast to the 30,000 tsunami victims, the nuclear meltdown so far has sentenced about eighty people to death from various cancers, according to certain epidemiology panels. This number could be way off-base, but even if it wildly underestimates increases in the incidence of cancer, the point is that the number of deaths-by-tsunami is significantly larger than the deaths-by-nuclear-meltdown. Therefore, in consideration of a worst-case scenario like Fukushima, nuclear power is not that much of a threat to public safety. Or so the proponent’s argument goes.

This argument misses the point that nuclear disaster – even if properly managed – represents a deceptively large economic and social cost. Right now in Fukushima City, Koriyama City, Sendai, and even Tokyo (four urban centers with a combined population of almost forty million people) there are places where the risk of cancer significantly increases after only a few years of normal lifestyle. Where these places are is determinable, especially with so many amateurs wielding Geiger counters and the crowd-sourcing opportunities offered by information technologies. (One of things I want to do with my future medical degree is to create a global toxin crowd-sourced platform.)

Right now, all the people who live in these “hot spots” have modified their lifestyles considerably while they wait for further instructions from the government and scientific experts. (This NHK documentary describes the stress of living in hot spots: These people don’t or can’t go outside, or they have to minimize their exposure to radiation. They can’t start businesses or buy homes, because they may become part of an ever-expanding evacuation zone in the near future.

Accordingly, the economies of five or ten prefectures have been permanently set on courses for destruction. Tohoku is a region which derives its wealth from the pursuits of agriculture, industry, and tourism, much like the Midwest in the United States (minus tourism perhaps). What do you think would happen if even a small amount of nuclear fall-out covered the Midwest from Denver to Detroit? Staple products like corn and wheat would see significant losses (What kinds of images does the phrase “Chernobyl apple” or “Fukushima peach” conjure up? Would you consider buying such products at the supermarket?); and no one would buy Ford, Chrysler, or GM products, just as American companies have stopped importing the hypodermic needles one of my students normally inspects. The motor and steel cities would crumble. Such is happening to northern Japan. Everything that region produces is unmarketable for the next hundred years.

Accordingly, in the six months after the earthquake and nuclear disaster, there has been a brain drain of epic proportions. The wealthy can afford to leave. Foreigners like me can come back to America and weather the comparably-mild displeasures of unemployment for six months and then go start taking classes at Harvard next week. Some of my wealthier professional students have accepted fellowships abroad, or sent their children to international boarding schools, or moved to other cities in Western Japan. Doctors and lawyers and other knowledge-based professionals can perform their services anywhere. The working class – and particularly farmers – remain. This is remarkably unjust.

The risk-management models for nuclear power all miss this human story. It is a unique and significant psychological, black swan consideration that doesn’t exist for other power sources. Oil spills may ravage a region, but no one is afraid of gumbo or Gulf Albacore.

Featured Find: Banks, Bailouts, and Moral Hazard

In Specific Facts on August 26, 2011 at 12:01 pm

Dave Schuler responds to a question from a reader. Here is an excerpt:

This post is a response to a question asked of me in comments. Here’s the meat of the comment:

“My main point is its the incentives. Bailouts create a bad incentive structure and trying to stop that is going to be costly. The longer it goes on the costlier it gets. Since we’ve already done this round of bailouts we have to wait for the next, and my claim/prediction/forecast/whatever is that the next round will be even bigger. And the fallout from not bailing out will be even larger than if we hadn’t done it now.”

and, if I understand it properly, the question is what do I think?

I disagreed with the way the major banks were dealt with in 2008 and 2009. I thought it was costly, created moral hazard, and, worst of all, didn’t address the underlying problems of the banks. My preference was to do something analogous to what the Swedes did with their banks in the early 1990s and to what we did with S&Ls following the S&L crisis here in the late 1980s.

To refresh your memories as a result of misfeasance, malfeasance, and nonfeasance nearly 750 S&Ls and roughly 1,600 banks failed between roughly 1985 and 1991. Volumes have been written about the crisis, its aftermath, and its implications and I’m going to explore it much farther here. I only want to make two points about it:

  • The facts of it should dispel any claims of our having any particular aversion to nationalizing banks.
  • The scale of it should call into doubt any ideas that dealing with one very, very large bank or even several very, very large banks is impractical. If dissolving Citibank is more complex than dissolving 750 S&Ls, I cannot take arguments about increased returns to scale seriously.

I also think there are two distinct issues both of which are sometimes bundled together under the heading “moral hazard” but which are actually quite different. Moral hazard is properly considered the actions a particular course of actions incentivizes going forward. When you reward banks by giving them the largest payday loans in history to tide them over until their next binge, pay interest on reserves, and allow them to earn interest on Treasuries, you convince the managers of those banks that they have a property interest in the U. S. Treasury which will indemnify them against loss, come what may. When you bestow these gifts only on the largest banks while closing the smaller banks so their business can be gobbled up by larger ones, the ensuing consolidation increases the necessity of preserving future institutions whose failure would present systemic risk down the road. If a bank is too big to fail it is too big to exist.

The piece is short and offers what is probably the most cogent and concise description of the present moral hazard with regard to bailouts I’ve come across.

Hack Yglesias on Dr. No

In Specific Facts on August 25, 2011 at 2:54 pm

Matt Yglesias sums up his views on Ron Paul:

After looking at his positions and statements, the most remarkable thing is that if it weren’t for his loud fanbase of self-proclaimed libertarians you wouldn’t really think this is the platform of a libertarian. He’s loudly trumpeting his plan to impose criminal penalties on women who terminate their pregnancies and he makes it clear that his interest in freedom doesn’t extend to the freedom of anyone unfortunate enough to have been born in a foreign country. His campaign slogan of “RESTORE AMERICA NOW” is strongly suggestive of conservative impulses and nostalgia for the much-less-free America John Boehner grew up in. The mainstay of his economic thinking is the ridiculous proposition that “[t]here is no greater threat to the security and prosperity of the United States today than the out-of-control, secretive Federal Reserve.” Not only is Paul’s goldbuggery nutty on the merits, like his affection for forced pregnancy and severe restrictions on human freedom of movement it’s difficult to see what it has to do with freedom. The freedom of the government to set a fixed dollar price of gold? America’s current monetary policy—a fiat currency that’s freely exchangeable for other currencies and commodities—is the free market position.

Unless I’m misunderstanding something, I’d consider this rare hackery from Yglesias. Ron Paul’s opinions on the Fed and the gold standard may be unorthodox, but they are not “ridiculous” or “nutty” simply because Matt Yglesias asserts that they are. The Congress has the constitutional authority to coin money and manage the money supply. This is a power the Congress gave to the Federal Reserve a hundred years ago. Ron Paul thinks the Congress should take that power back since the Fed is at least somewhat complicit in the last recession. I partially agree with Ron Paul, in that I believe there should be more Congressional oversight of the Fed à la the recent audit bill Paul co-sponsored with Barney Frank. How exactly is the idea that a democratically elected Congress at least have the final say on how currency is administered in this country “ridiculous”?

Tagging the currency to the intrinsically useless fiat gold is the same as tagging the currency to the intrinsically useless fiat word of the present government. In advocating a return to the gold standard, Paul is not saying that we should all buy gold and hand nuggets over to the cashier at Walmart. He’s making the claim that gold represents a safer store of value than the word of the present government. Essentially, he’s downgrading the U.S. government’s credit rating and suggesting instead that we tether our money supply to something which empirically throughout the ages has been a continuous and relatively safe store of value for hundreds of generations. This is not “nutty”. If anything, it’s unnecessarily cautious.


h/t Erik Kain

America’s Most Wanted

In Specific Facts on August 6, 2011 at 8:59 pm

My twelve-year-old stepson is not from America, and I wanted to teach him the time-honored, American tradition of kids making a few bucks selling lemonade. We modified our approach a little bit and decided to sell smoothies and green tea which we had brought from Japan after the earthquake. Yesterday, we went to the store near our house, and we bought watermelon, peaches, mangos, orange juice, apple juice, whole milk, ice, cups, and three poster boards for signs.

The two of us woke up early this morning and made our signs along with my two-year-old daughter, who indicated that she wanted to help with the drink stand as well. (She didn’t understand that she was supposed to color inside the bubble letters I had written and spread pink crayon all over the board. But that’s okay.) After some experimentation around the middle of the day, we created the perfect fruit punch with whipped cream on top and, in the early afternoon, we headed down to the end of our street, where we’d sell iced tea for two dollars and smoothies for three.

Almost as soon as we got down there, my daughter said she was hungry and wanted to go home to eat something. It wasn’t the best timing in the world, but these things happen with little kids. My twelve-year-old stepson is quite mature for his age and he’s experienced a lot more than most twelve-year-olds, so I had no problem leaving him in charge of the drink stand while I went home to make my daughter some food. Plus, he was just at the end of our street, so if I wanted to check on him, I could just walk out into the street from my front door a bit and have a look. 

After my daughter finished eating and as we approached the end of our street where the drink stand was, I could see from afar that the sign was pulled up and put away, the cooler was shut with everything which we had so carefully arranged on the tray table put away, and my stepson was huddled up and sitting on the rail, staring out between his knees at the ocean. 

“What happened?” I asked when I got down there. I wondered if he had gotten discouraged that no one was buying his drinks or maybe that no one could understand his accent. Or maybe he was just lonely down there by himself. 

“The police told me to pack up and go home,” he said. Or, more accurately I discovered after making a few phone calls, the town police swung by and wished him good luck, and then afterwards, “someone in brown” came by and made my stepson stop selling drinks at the end of our street, because this required a permit, and my stepson did not have a permit to sell drinks.

After hearing a little more from my stepson and talking to the town police, I discovered that the drink stand was on land under the jurisdiction of the Massachusetts State Police. After attempting several times to contact the State Police, I reached only answering machines. Apparently, having someone on call on weekends is not in the Massachusetts budget (but breaking up lemonade stands is somehow cost-effective).

In what world is it acceptable to go around breaking up kids’s drink stands? What are we teaching our children?


UPDATE 8/29/2011:

There has been some controversy over my assertion that it was the Massachusetts State Police that broke up my stepson’s drink stand. I admit that I may have jumped to conclusions and apologize for my ignorance of Massachusetts state organizational structure and corresponding uniform color. I have amended the piece above accordingly. I wish to reiterate that I mean no ill will towards the Massachusetts State Police or law enforcement in general. This post is clearly not about demonizing any one police officer or policing entity.

Let me reiterate: this post is about how ridiculous – and how obviously ridiculous – it is that a twelve-year-old isn’t allowed to sell green tea because it is in violation of some ill-conceived or ill-applied regulations.

Featured Find: Stabilizing into a Crisis

In Specific Facts on August 5, 2011 at 1:20 pm

Joe reads Ezra Klein regularly. I read him sometimes. I find him unusually penetrating and accurate but rather boring and irrelevant most of the time (just my opinion); so while I don’t hate reading him, I simply consider reading other writers to be better investments of my time. This time is different. This Ezra Klein piece is passionate, it resonates, and I think, it’s accurate – it’s perhaps one of the best descriptions of our (economic) time I’ve come across:

But the Dow Jones industrial average isn’t diving because spending has risen, deficits have grown or stimulus policy has changed. It’s diving because of forces Washington can’t control, and in many cases, doesn’t understand very well. How many members of Congress do you think could give a coherent account of what has happened to oil or steel prices over the past three years? Or what’s happening in the euro zone? Or to the yuan?

A dramatic gap has opened between the economy as Washington sees it — and wants to intervene in it — and the economy that exists. Whatever weak recovery we might have hoped for is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia and much more. Globally, it’s been an almost uninterrupted run of crises and bad luck. Meanwhile, Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis. 

The whole article can be read in three minutes. I highly recommend it.