Tuesday, September 19, 2017

Conservatives Don’t Like Higher Ed

Conservatives don’t like professors. When conservative Republicans were asked to gauge their feelings about college professors, over half gave a “cold” response, while only 24% were “warm”. I experience that disdain in the comments that conservatives make to my columns, where the word “professor” itself is a taunt, a curse.

Conservatives don’t like the institutions where professors work. A recent Pew poll found that only 29% of conservative Republicans thought that colleges and universities have a positive impact on our country.

Republican politicians encourage these views. Betsy DeVos, the new Secretary of Education, was explicit in her condemnation of professors as she was being confirmed: “The faculty, from adjunct professors to deans, tell you what to do, what to say, and more ominously, what to think. They say that if you voted for Donald Trump, you’re a threat to the university community.” There is no evidence that even 1 out of 1000 professors ever said that, but DeVos didn’t need to provide evidence. The idea that college professors indoctrinate students with liberal ideas, that conservatives are discriminated against on university campuses, is now taken as fact in conservative thinking.

It is a fact that conservatives are outnumbered in higher ed. A study from 2014 shows that liberals outnumber conservatives in college and university faculties 6 to 1. Is this proof of discrimination on campus? In fact, conservatives themselves choose not to pursue advanced degrees. Only 10% of those with some postgrad study are consistent conservatives. Even fewer conservatives decide to pursue a PhD, as opposed to more professional degrees like MBA. Thus the preponderance of liberals among faculty is the result of different educational choices according to political preference.

One interesting statistic that I had never seen is that voter registrations among social science faculty at 40 major universities show that Democrats outnumber Republicans by 11 to 1, but among historians the ratio is 33 to 1. My own educational history offers an explanation of how that happened. Earning a PhD in history, studying history intensively, pushed me to the left. Timing was probably a factor: I became a graduate student in 1973, as the Watergate scandal demonstrated the dishonesty of a conservative Republican President. But more important was that learning history itself can be radicalizing.

The Russian populace had been terribly mistreated by the very conservative Tsarist autocracy and their revolutionary demands for a socialist system in 1917 were a reasonable response. American Southerners rebelled in order to defend slavery and said so clearly. Discrimination against racial minorities and women continued through the 20th century, defended by racist and sexist conservative arguments. Social improvements, like worker safety or food purity or Social Security, were radical ideas eventually accomplished over conservative objections.

Even though all my history professors were white males, these and other obvious historical lessons pushed me in a leftward direction. Those who argue, for example, that the Civil War was not about defending slavery, but about states’ rights have to violate all the basic rules about using evidence to make this historical argument. They are out of place in academia, because they are historical frauds.

Good academic science and social science lie behind ideas that conservatives don’t want to believe, about climate change, about evolution, about the persistence of racism. So conservatives attack the whole academic enterprise. Organized conservative assaults on academic liberals are now the norm on campuses.

Here’s how it works: an art historian writes an essay about how ancient marble statues were typically painted in colors which have disappeared over the centuries. In modern museums, we see white skin as representing the ideal, contributing to the idea that white is ideal. Then the conservative media take over, gradually distorting the article to delegitimize this liberal professor, her ideas, and all others like her. “A Campus Reform headline describes a professor’s essay as arguing that white marble in sculptures ‘contributes’ to white supremacy. Two days later, a Daily Caller piece, citing Campus Reform, has the professor ‘equating’ white-marble statues with white supremacy. Two days after that, a site called Truth Revolt — now citing another account from Heat Street, which had also picked up on Campus Reform’s report — is blunter: ‘Professor: White Marble Statues Are Racist.’”

The twisting of information about what goes on at college by people like David Horowitz is central to conservative attitudes about higher ed. This process leads to organized calls for leftist professors to be fired, and even to death threats.

Arthur C. Brooks of the conservative American Enterprise Institute wrote a NY Times op-ed “Don’t Shun Conservative Professors” last week. He assumes this shunning is obvious and that “discrimination” is ubiquitous. He compares the historic barriers against women and the alleged plight of academic conservatives, a clever tactic that makes it harder to remember that conservatives defended those barriers for decades.

Brooks says liberals should “make campuses more open to debate and the unconstrained pursuit of truth.” But that open debate over the past decades has led to an intellectual consensus that conservatives hate. Conservatives don’t like professors precisely because the pursuit of truth demonstrates the emptiness of current conservative dogmas.

Steve Hochstadt
Springbrook WI
Published in the Jacksonville Journal-Courier, September 19, 2017

Tuesday, September 12, 2017

White Collar Crime at Wells Fargo

Wells Fargo was the world’s most valuable bank until 2016, when it slipped into second place behind JPMorgan Chase. It may also be one of the biggest criminal enterprises in American history.

I’m not the only one who thinks so. Harold Meyerson, executive editor of the American Prospect, began an op-ed in the Los Angeles Times last month: “What’s the biggest criminal enterprise in California? MS-13? The remnants or successors to the Crips and the Bloods? The Mexican Mafia? If we’re talking about the sheer volume of offenses, the answer is clear: Wells Fargo.”

Not just journalists. New York Congressman Gregory Meeks told CEO John Stumpf at a Congressional hearing a year ago that Wells Fargo “basically has been a criminal enterprise”. Meeks said, “I’ve got individuals right now on the street, they’re not back in their homes,” because of fraudulent mortgages. Would Wells Fargo put his homeless constituents back in their homes? Stumpf had no answer.

Wells Fargo employees created 3.5 million fraudulent accounts in customers’ names without their knowledge. The bank signed up 500,000 customers for online bill payment services without their knowledge, some of which carried fees. It charged military personnel illegally high interest on loans and then seized vehicles from soldiers who fell behind on their payments. It charged half a million auto loan customers for insurance that they did not need. About 20,000 people could not pay these extra fees, went into default, and had their cars repossessed.

The bank didn’t only cheat its customers. Wells Fargo paid $100,000 to settle a class action suit in 2009 by its employees in Nevada, who were mislabeled “managers” so they would not have to be paid overtime and then forced to work unpaid “call nights” to drum up more business. A branch manager was fired in 2010 when he reported these criminal actions to his supervisors. The bank was ordered this year to pay him $5.4 million in back pay and compensatory damages. One manager notified the bank’s confidential ethics hotline about fraudulent activity in September 2011 and was fired later that month. A banker in Pennsylvania also called the hotline and sent an email to human resources about the unethical practices he was told to perform in September 2013. Eight days later he was fired.

Wells Fargo has committed these crimes for at least 15 years. And company leaders knew it. Internal complaints were made as early as 2005. In 2009, six fired employees sued, alleging unethical practices. Employees wrote directly to CEO John Stumpf as early as 2011. In 2013, the New York Times reported that Wells Fargo employees were under intense pressure, including threats of getting fired, if they did not meet ambitious goals by opening accounts and starting credit cards without permission. Complaints were made to managers and nothing was done.

If somebody uses someone else’s personal information to open a credit card account, the penalties are severe. Ordinary crime. Our customary language puts Wells Fargo’s actions in a different light: white-collar crime, which the FBI defines as “characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence.” The escape from any jail time or criminal record of every participant except one banker after the bank collapse and financial crisis of 2008 shows how our society excuses big crimes when they are committed by rich, usually white men in fine suits.

But some other definitions might be more appropriate for Wells Fargo’s actions. The crimes of so-called “organized crime” are defined clearly. Extortion, a time-tested endeavor of organized crime, is the acquisition of property through the use of threats or force. Didn’t Wells Fargo threaten homeowners and car owners with seizure of their property if they didn’t pay illegally created charges? And then make good on those threats?

Loan-sharking is the provision of loans at illegally high interest rates accompanied by the illegal use of force to collect on past due payments. Didn’t Wells Fargo charge illegal interest rates to soldiers and then forcibly take their property?

Wouldn’t Wells Fargo fit the FBI’s definition perfectly? “The FBI defines a criminal enterprise as a group of individuals with an identified hierarchy, or comparable structure, engaged in significant criminal activity.”

What price has Wells Fargo paid for their millions of individual crimes? Virtually none. The few hundred million dollars that Wells Fargo has paid in fines or has promised to pay customers who were cheated are a tiny fraction of the $11 billion in profits for just the first six months of 2017. Wells Fargo says it will refund nearly a million dollars to customers who had been signed up for online bill payment – that’s less than $2 per fraudulent transaction.

Wells Fargo’s chief executive after 2007, John Stumpf, was publicly rebuked in a congressional hearing in 2016, had to resign, and forfeited $41 million in stock options. That left him with Wells Fargo stock worth almost $250 million. Carrie Tolstedt, leader of the community banking division, where these criminal actions occurred, had to “retire” at age 56, and lost $19 million. She had made $27 million in her last three years, and took with her a mere $125 million in stocks. Earlier this year, four second-level executives were fired. Nobody has done a day of jail time.

After years of intense pressure on employees to get new accounts any way they could, Wells Fargo fired 5300 employees for unethical behavior. The company leaders walked away with millions of dollars.

That criminal enterprise was too big to jail. Our political and judicial systems seem inadequate to protect ordinary Americans from corporate crime or to punish criminals when they are caught.

Can we, the people, do something? Wells Fargo customers could simply switch banks. There is no big advantage in using a giant global bank. My local Jacksonville bank performs all the services I need, whether I’m at home or across the world.

A survey in October 2016, just after the scandal made headlines, showed that only 14% of Wells Fargo customers had decided to leave. It’s not so easy. Most people get multiple services from their bank, including loans, automatic bill pay, and credit cards. Switching takes time and money, and many customers don’t have either. One third of Americans with savings accounts have a zero balance. Although the number of new credit card and checking accounts fell by half earlier this year, that still means that thousands of people were opening new accounts with Wells Fargo.

Other corporations are happy to take tainted money from Wells Fargo. The bank will now be a sponsor of the annual football rivalry between Oregon and Oregon State. Wells Fargo signed an extension of its deal as official retail bank of Major League Soccer, and became an official partner of the NFL Los Angeles Rams.

Since the beginning of 2017, Wells Fargo stock has fallen about 10%. Don’t buy their shares. TV viewers could tune out the Wells Fargo golf championship, broadcast every May, forcing the tournament organizers to find another sponsor, and avoid other sporting events and programs sponsored by Wells Fargo.

Not very satisfying. But if we don’t say no to white-collar criminals, who will?

Steve Hochstadt
Springbrook WI
September 10-12, 2017
not accepted for publication by the Jacksonville Journal-Courier

Tuesday, September 5, 2017

Paying for Big Storms

Hurricane Katrina cost our country, our people, over $100 billion. Hurricane Sandy cost $75 billion. Hurricane Harvey will also be in that range, and may become the most expensive storm in American history. Each one of those storms cost the US more than any storm before.

Between 1980 and 2012 there were 5 storms a year that did $1 billion in damage in the US. From 2013 to 2016, the average was a bit more than 10. Through 8 months this year, there have already been 10. Ten of the 11 costliest Atlantic hurricanes have occurred since 2004. Smaller storms are also becoming much more frequent. Compared to the average for 1900-1960, there were 20% more “heavy precipitation events” in the 1980s, 35% more in the 1990s, and 40% more in the 2000s.

Lives, livelihoods, possessions and homes have been lost. One million housing units were damaged or destroyed by Katrina, 650,000 by Sandy, and at least 100,000 by Harvey. Harvey destroyed about a half a million cars. Most of these losses are not covered by insurance. Standard homeowners policies do not cover damage from rain or flood waters.

You don’t have to be listening very carefully or paying much attention to know that something is changing. Climate scientists have been saying for years that warming will probably mean more and bigger storms. The “probably” is important: they are not as sure as about the fact of warming itself, but the evidence points strongly in that direction. In the case of Harvey, warming has raised sea levels (meaning higher storm surges) and raised air temperature (meaning more water in the air and more rain).

Harvey washed away whole neighborhoods. It is also pushing aside the curtain on the politics of storms. As the costs of big storms have risen sharply, Republicans have been trying to cut federal funds for disaster relief. After Katrina and Sandy, Republicans in Congress were reluctant to send aid to New Orleans and New York. In both cases, they insisted that any new funds for relief be offset by cuts in programs they don’t like, such as Amtrak funding and Medicare. Texas Senators and Representatives opposed legislation to provide relief after Hurricane Sandy, as did current White House budget director Mick Mulvaney, then a Representative from South Carolina, and Paul Ryan, delaying relief funding for months.

Republican leaders in the House have now proposed a budget that cuts FEMA disaster funds by $876 million. This amount is instead intended to begin building Trump’s wall. Trump’s own budget blueprint calls for cuts of $667 million, mostly from the Pre-Disaster Mitigation Grant Program, which spends money now to reduce future expenditures. His budget eliminates the National Flood Insurance Program, which provides affordable flood insurance that private insurers won’t offer.

Trump’s proposed budget makes big cuts to research about the climate changes which are connected to these increasingly big and expensive storms. Budget director Mulvaney said, “We’re not spending money on that any more. We consider that to be a waste of your money.”

In their broad attack on all kinds of “regulations”, the Trump administration just eliminated an Obama-era regulation that required federally funded housing rebuilt after disasters to be able to withstand these critical flood events. For an additional 1% in building costs, many times that would be saved in the future.

At the state level, Republican ideology also makes disaster recovery more difficult for the most vulnerable Americans. A new law passed by Texas Republicans makes it easier for insurance companies to avoid paying off on their policies and harder for homeowners to get paid.

Those are the facts. Not fake: everything above can be found in hundreds of places. Not really news: mostly old stories or back page reports.

Only an ideologically immovable force like the current Republican Party could ignore the mounting crises caused by our changing weather systems. In their rigid insistence that big government is America’s biggest problem, Republicans consistently ignore the human costs of the crises, where only big government can provide solutions. In their refusal to acknowledge the basic facts of our changing weather systems, Republicans in Congress and the White House put Americans at risk of losing everything.

Right now, Republicans like Senator Ted Cruz, who didn’t want to pay for the damage done by Sandy, are rushing to promise money for Texans. Let’s see whether they also acknowledge that increasing weather crises are the greatest danger to American life.

Steve Hochstadt
Springbrook WI
Published in the Jacksonville Journal-Courier, September 5, 2017