Private Sector Growth Warrants Prudent Governance of Our Economy


It is often stated that the government’s role is primarily to aid the private sector in creating growth. This sentiment is often championed by the right wing, cornering the debate as a matter of anti-capitalist regulatory burden versus the all-American free market. Although compelling, prioritizing private sector growth is sometimes at odds with the well-being of the public. When the government prioritizes the private sector above public health, safety, and education, it is creating an environment that benefits a small number of individuals, whether this is intended or not.

Before even attempting to address this, I think the foremost consideration is the role of government versus the role of the private sector. It is the role of the government to ensure that the largest number of people are benefiting from both the private and public sectors; the government has a role in ensuring pareto optimality across all socioeconomic demographics – hence, welfare programs like Social Security, food stamps, etc. But as a country with an historically strong private sector and a society that views capitalism as a sacrosanct part of American life, the U.S. government has often struggled to achieve true widespread benefit because of the immense cultural, political, and financial pressures coming from private industry to legislate in ways that optimize private sector growth. This growth sometimes occurs at the detriment of the public good, however, when the marginal social cost of private output is not accounted for.

One example that I am thinking of as I write this is the coal industry. While it is generally common knowledge that coal is an increasingly archaic energy source, in West Virginia, the coal industry has done a tremendous job of pushing back on government regulation to the detriment of WV’s citizens, its landscape, and its drinking water. In 2014, over 300,000 people lost access to clean drinking water for several days after over 7,500 gallons of toxic coal ash was dumped into the Elk River. In the aftermath of this catastrophe, the coal industry successfully staved off the EPA’s regulatory efforts, convincing the WV governor to sign into law a bill that prevents coal companies from being sued for clean water violations, unless the violations are specifically defined in their state permits. This same law also relaxed the amount of aluminum allowed in West Virginians’ drinking water. Ironically called the “Creating Coal Jobs and Safety Act of 2015”, this law neither created jobs nor enhanced safety.

West Virginia’s actions demonstrate that in many cases, government serves its purpose when its environmental protection arm isn’t bound to the standards of maintaining economic growth, and the public sector is not responsible for maintaining the adequacy of the private sector. At its purest, laissez-faire capitalism is sometimes cruel, a Darwinistic mechanism that thrives in spite of environmental protection regulations. Adding to this, a free market’s development and growth depends on the abilities of small, agile, forward-thinking solution makers, with or without large, antiquated industries that are propped up by governmental assistance. Yet as the American experiment has evolved through wars, recessions, and tribulations, we’ve cultivated a system that operates outside the bounds of capitalism if, and only if, its purpose serves the greater benefit of the population.

Per the democratic framework established by the Founding Fathers, the government’s primary focus should be ensuring the well-being of the largest amount of people. While every regulatory decision results in both a cost and a benefit, the optimal decision should be that which provides a benefit to the largest number of people. In West Virginia’s case, preventing industry from dumping toxic coal ash into its citizens’ drinking water may slightly increase the costs of production, but it comes to the widespread benefit of 300,000+ individuals whose consumption of safe drinking water is arguably a human right.

Similarly, the Economic Reinvestment and Recovery Act of 2008, while largely unpopular, was a necessary decision that prevented countless jobs from being lost and an infinite array of other widespread consequences.

It should go without saying that the world’s largest economy should not go unregulated in the face of increasing domestic and global economic instability. The current global financial infrastructure is both delicate and increasingly volatile, with the onslaught of changes that have occurred in our global economy since the 1970s. The expansion of free trade (both inevitable and largely beneficial, in my opinion) combined with the constant fluctuations in currencies put us in a situation where the US, like many other large economies, are very sensitive to the movements of the global financial system. There is a growing need for the apolitical work that the International Monetary Fund does in regulating member countries’ economies, as well as the work that the Federal Reserve Board does in measuring and maintaining stability in the US financial system. These institutions serve as an economic engine, an insurance policy against social or political upheaval, and an isolated chamber in which economic health is the sole concern.

A few months ago, one of my favorite podcasts, Knowledge@Wharton, interviewed the author of a book I would like to read soon called The Architecture of Collapse, in which author Mauro F. Gullen described the increasing importance of global financial regulation and prudence as we become more interconnected. Dr. Gullen describes three things that he thinks have contributed to the over-leveraged state of our global economy: the rise in portfolio investment, the growth in cross-border banking, and currency trading. These things in particular deserve our attention, as well as the aforementioned potentially catastrophic environmental issues that are more than worthy of government intervention, as the social costs of inaction are rising.


Hey, House Financial Services Committee: The CFPB is Accountable – to Consumers

Financial Services Regulation, Uncategorized

The Consumer Financial Protection Bureau, despite critics’ claims that it lacks accountability, is actually very accountable – to consumers. ‘Accountability’ remains a political talking point, despite its having little to no defined relevance to what one is actually saying. This is troublesome because as the word is misused, its significance is deflated; defining accountability in a true sense becomes ever so obscure when the term is vandalized. There are numerous factors contributing to this overall degradation in the quality of political speech from bipartisanship to Citizens United, but there is something very ironic in that accountability itself must be held true to standard by only average citizens of the public. Otherwise, it is lost to rhetoric and unspecific political smack talk worthy of nothing besides entertaining cable TV news debates.

To be accountable, one must first have control over that which they are accountable for. The Director of the CFPB can only be removed by the president on the basis of ’cause’, which, although a loose definition, is concise because the president’s legacy is often shaped in hindsight as a result of society’s general health and well-being. The president, in general terms, is obligated to provide for a diverse people who benefit broadly from his or her policies while in office. On the other hand, Congress is liable primarily to its constituents, with the general public’s well-being coming secondary to that which benefits each Congressperson’s constituency. Because they are elected by their constituency, individual members of the legislative body are free to support laws only that benefit his or her constituency. This segregation among varying interests is designed to promote fair and unassuming representation in our legal system. Hence, democracy.

However, few people truly believe that constituencies are equipped with full capability to hold their Congresspersons responsible for his/her actions on The Hill, in part because of the ramifications of Citizens United and its role in shaping electoral outcomes with its no-ID-required unlimited campaign spending. When campaign contributions are unlimited and made in secret, campaign objectives are inevitably secretive as well. As a nation economically driven by capitalism, it is a widespread understanding that vast accumulation of resources is the end goal for all. Accumulation of resources is what authorizes purchasing power, and it even creates purchasing power in the case where there was previously none. Acquiring wealth is an invariable goal of all who participate in economic capitalism, hence ‘capitalism’ being named the functionality of capital.

The CFPB strives towards egalitarian liability, despite its seeming flaws. If it were unaccountable, as House Financial Services Committee Chairman Jeb Hensarling (R-TX) states, then it would not be required to present semiannual reports to Congress on consumer complaints and financial literacy. The director would not be subject to term limits by presidential nomination every 5 years. The entirety of its actions would not be subject to full judicial review and its enforcement subject to authorized preceedings by any U.S. Court of Appeals. The spectrum of the CFPB’s accountability is diverse – every branch of federal government has a method of enforcing or denying CFPB restrictions, and even the general public is given a forum for making compaints public, via the requirement that the CFPB submit reports to Congress on consumer complaints and widespread cost-benefits analyses of their proposals. This is a unique approach to assessing their public efficacy; other regulatory bodies are open to industry complaints alone; the CFPB is open to that and consumer complaints. Additionally, other financial regulators have the authority to step in and challenge CFPB regulations when they deem them unfit.

Regulation is rarely a popular idea, particularly in the capitalistic mindset of the American economy. However, ‘accountability’, by definition, is precisely what is bestowed upon this agency as its actions are subject to review by various interests. To say that this agency is ‘not accountable’ is either an admission of ignorance, or it is a misconstruation of to whom they are accountable. Regardless of the various parties who are involved in the CFPB, it is incongruous to say that this agency is anything but publicly accountable.

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Humanity, Technology, and Fear of Moving Forward


I recently read an interesting piece in The Frailest Thing discussing humanity’s relationship with machines. In disseminating the threat that reverberates of ‘big data’ and an algorithm-fueled workforce, the idea of what constitutes an ideally respectable way to make a living is being redefined. During in the early 20th century, factory work was valued, but the growth of machinery reduced the efficacy of manual labor. Following the enhanced industrialization of the early 20th century, information-based work became of value in the mid-20th century, as companies looked to optimize efficiency, using machinery to reduce to costs of capital while maintaining output. Ability to gather, disseminate, and synthesize information was valued highly, replacing manual labor that commanded the most American-dream kind of respect. Now, information is being challenged in its value, as an increasing number of computational methods are no longer exclusive to the human brain.

As disseminating information in its purest form becomes more viable to machinery, determining one’s value in the workforce is becoming frighteningly vague. This encompasses an infinite informational reality, in the form of customizable analytics software in the likes of Tableau, which mitigate the need for anaytical minds translating datasets into trends and forecasts. With companies like Salesforce making historical information accessible across a company, access to historical information undermines the territory that often comes with tenure & individual memory.

Yet as crunching, consolidating, and optimizing data becomes a primary focus of many companies, it is also a trend that is met with intimidation. Companies, particularly in the financial sector, hire departments to centralize & accommodate the new need for efficient information, but they overlook the one factor that is seemingly obvious. They fail to recognize their data’s role across all segments of the company; they disregard those at the bottom, who would also show the highest marginal gain from access to information. They fail to understand the inherent value of ‘Big Data’ by taking overwhelming amounts of information and compartmentalizing it by department, as though each department operates in complete autonomy, isolated from the virtues of individualized customer service & client preference. They operate under the facade of compartmentalized information, leading under the false notion that informational silos optimize efficiency, employees wearing blinders are productive, and clients’ appetite for relevant data can be overcome with glamourous marketing & sugar-coated relationship management.

For anyone who has watched Mad Men (or better yet, lived in that era), it is safe to say that change is invariably met with steadfast resistance. This resistance is deep, it is insideous, and it is peppered in across various industries and levels of management. Particularly within the financial sector, an industry notorious for its resistance to change, information is met with an aura of what I can only assume is intimidation. Intimidation toward the future, toward replacement, and toward the unknown, popularly-presumed Orwellian society feared to be the result of widespread access to information. However, these fears are pointless; the NSA revelations of 2013 shattered the glass on any sense of security for personal data. Information is, arguably, one of the most formidable motifs of post-industrial modernization; it is a beast that can be fought, tamed, or trained. It has stirred an appetite for the unknown, however, and it arguably sparked an insatiable sense of wonder across multiple industries and cultures.

With Man Men clearly on my mind, I cannot help but be stuck on the episode in which the SCP office purchases a computer, sparking an inaudible sense of revelation at the office. The show makes no attempt to hide the obvious metaphor at their disposal here; the computer represents change, creating a diverse array of opinions, presenting itself as a willing challenger to the customs that define the industry, the workforce, and the societal norms. The computer stirs upheaval; it frightens an already-borderline employee, pushing him over the edge of insanity. It forces a challenging cultural conversation out of the traditionalists and the visionaries, addressing the societal change that began in the 1960s but continues today.

The piece discussed earlier, published by The Frailest Thing, stirred my thoughts toward the future in a way that is wondrous yet directionally coherent. In the article, the author indicates that the future valuation of one’s profession will be based on creativity. Far from the manual labor of the post-industrial age and the informational astuteness of the pre-information era, a data-driven society creates a need for creative capital. As the threat of information overload becomes overwhelmingly common, creativity presents itself as the next great mind and the nation’s newest American Dream.

Democracy: Not Just a Hobby for Nerds


Your voices are vital. The word ‘vital’ means necessary for life. A democracy, to be fully alive, must include all of its citizens.
– Swanee Hunt

The study of politics is often viewed as a preferential interest – an acquired taste that is only enjoyed by the select group of individuals who prefer it. It is arbitrarily chosen the way that one might choose to follow astronomy, indie music, or the culinary arts. This characterization is harmful, however, because while changes in the high fashion industry only affect those who follow high fashion, changes in the political arena affect the entire domestic and global community at large. When a major shift occurs in the fashion industry, such as a new designer headlining creative for an historic house label, it is discussed by the greater community at large, from the media veterans, the respected pundits/bloggers, the vocal participants and consumers, and sometimes even the casual observers. Even those who do not buy from the label (and thus are not members of the directly affected community) discuss the shift and its implications in striking detail. However, fashion is art, and art is aesthetic, and aesthetics are not interwoven, consequential, world-altering events.

This is not breaking news. Many seemingly intelligent people can see the disparities between politics as a subject of popular interest and politics as the distribution of economic and legal power. However, many of these individuals simply shrug it off as a defeat that must be accepted, and that any attempt to change the status quo is simply a sign of naivety. These individuals view their apathy as a mark of wisdom, for they have sorted through their priorities, discovered the futile impact of political engagement, and moved on to more effective pursuits.

It is difficult to reconcile the complex, twisting democracy with its idyllic, oversimplified cousin that is taught in schools. Democracy is angelic; it is synonymous with other idealist quips like freedom and peace. In this regard, these apathetic people are correct – it is ridiculously naive to assume that our green pasture-ridden idea of democracy is attainable in the United States.

While children are taught the merits of democracy, military strength, and religious freedom, their indoctrination falls in the realm of extremes. They are taught about war – war on communism, war on fascism, war on drugs, and war on violent crime – but they are not taught about preservation. Preservation of the public, of its interests, and of equality is exceedingly difficult. As the population grows and social dynamics evolve, it is the responsibility of the citizens to watch their government, to research bills before they become laws, and to honor facts over rhetoric. Freedom is a complex thing that is not simply attained on behalf of a few bombs thrown overseas; freedom is also siphoned off by competing interests with a more cogent vision and a firmer grasp of how the government operates. To keep a paycheck, one must first show up and perform their job; to keep a strong, sustainable, intelligent governance, one must first pay attention to who’s doing the governing and for whom.

This is the cost of a government by the people and for the people. It should come as no surprise that large swaths of the population are underrepresented; to be represented in government one must genuinely participate in government. It should come as no surprise that voting on whimsical notions and ‘values’ often results in gross misunderstanding between the electorate and its representation. When real people base tangible votes on intangible ideals, they are cheapening their vote, holding it out for the first bidder with a compelling speech on their tongue. When real votes are distributed like prizes for a public speaking competition, public officials are not accountable to the voters so much as they are to the whims of their ‘conscience’. When voters do not research public policy, policymakers owe them no more favoritism than the last compelling speech delivered from the pomp and circumstance of the podium.