Moral Markets and Predatory Lending

 'What was lost when Newcastle United’s historic St James’ Park stadium was renamed after its sponsor?' Photograph: Stu Forster/Getty Images

‘What was lost when Newcastle United’s historic St James’ Park stadium was renamed after its sponsor?’ Photograph: Stu Forster/Getty Images

New Orleans   Nothing like ten or more hours on an airplane to get some reading done. Reading Evan Osnos award winning book on modern China, Age of Ambition: Chasing Fortune, Truth, and Faith in New China, was interesting, especially having read earlier versions of some of the chapters in The New Yorker. He told one story of popular pushback on the country¹s new value structure, that included unhealthy doses of greed, bribes, and sometimes outright corruption, involving a Minnesota-born, Harvard philosophy professor named Michael J. Sandel, who has become something of a rock star for many in China speaking to small stadium crowds of 10 to 15,000 people driven by huge fan base for his online courses. Importantly, he has taken exception to the notion that everything in business ­ and life ­ can be and perhaps should be allowed to have a price or financial value. In his book, What Money Can¹t Buy: The Moral Limits of Markets, which I also tracked down and read with great interest, he argues that markets also have to reflect morality. Now, this is radical stuff!

Sandel goes after many economists from Nobel Prize winner Kenneth Arrow to more modern sages who argue, almost ideologically, that markets are inherently efficient, and essentially that a price can be set in the exchange of almost anything. Sandel calls them out in some cases for simply fudging on the question when moral issues arise. He takes it one step farther though flatly arguing that markets should not exist for some things because there is no way to eliminate coercion that comes from less than voluntary choices that economists postulate. Agreeing for example with the Beatles that ³money can¹t buy Šlove,² Sandel makes a convincing case that there is almost no way that the market for sex, as understood in prostitution, can eliminate abuse, coercion, and other moral elements. Similarly, he critiques proposals that would create a market for migrants and refugees where these victims of war, globalization, and economic misfortune could be shuffled off to other countries in exchange for hard currency, much as people were paid to fight in the Civil War in the United States in order to avoid the draft, though he does not use that example. He is clear that when it comes to climate change that there are moral issues that are not resolved on market-based programs like cap-and-trade, where countries continue polluting and exchange their irreparable damage to the environment in exchange for helping protect a rain forest in a country involved in releasing less greenhouse gas.

Joining the Chinese, I was silently cheering and standing in quiet applause as I flew across the Atlantic for home. Disappointingly though in the scores of examples Sandel offers of markets where morality should resist monetization, I kept waiting for him to frontally tackle all too common financial practices by money transfer organizations, banks, payday lenders, and the like that are inherently predatory, and therefore by his reasoning, blatantly immoral. It seemed obvious. People were desperate for money and forced by the market to pay whatever the rate, no matter how high or absurd, based on that desperation. There is no choice involved. Nothing is voluntary about taking a Wonga loan for 1509% interest or getting a refund anticipation loan from a tax preparer on your income tax refund for 400% or more. Money lending with interest is even seen as immoral in the Muslim religion, so this is not an unexamined market.

Sandel¹s book was excellent, and his voice needs to be heard as clearly in our home of the brave, free, and unequal as it is now being heard in China, despite the fact that I can¹t keep from scratching my head at why he is giving predatory lending in all forms and fashions a free ride thus far, when the demand for a moral market there is heard far and wide.


China May Drop the Stock Market, but India is in Turmoil

Screen Shot 2015-09-04 at 9.51.50 AMKiln, Mississippi     So while all the big whoops worry about their 10ks, plummeting stocks on Wall Street, and whether or not the Fed raises interest rates in Wyoming, what are the rest of us supposed to do? We have grown men and women believing in unicorns and giving them billions. What’s up that that? I thought only very small children and Rainbow Brite believed in unicorns?

No one seems to have a grip on China and one report contradicts another. The economy is collapsing, they are laying off 300,000 soldiers even while they are motor boating into international water space when President Obama is hiking in Alaska, and still more people are buying Apple’s gadgets over there. Somehow China owns a big hunk of America, but it’s a daily mystery to most of us. So, let’s take a break and take a look at India. There’s a democracy of sorts and a country maybe we can understand.

Here’s what we know: India is somewhere between topsy-turvy and turmoil!

Prime Minister Modi took office in a rightwing rout as the BJP, a conservative communalist party swept the long serving Congress Party out of office. Modi had been the governor of Gujarat and, pretending it was Texas, he had campaigned on the supposed economic miracles in the state. Others were less sure. There was still the persistent question about his role in not stopping the slaughter of Muslims in the state some years ago which had been serious enough to deny him a visa for entry into the United States up until like yesterday almost. Much of his platform seemed to be economic development or else, and it is hard to ramrod such a program through a country with even a semblance of democracy.

Attempts to gut the nation’s labor laws to pave the way for business were met this week by a general protest strike called by ten unions that organizers estimated involved 125 million workers. Al Jazeera quoted ACORN India and our hawkers’ union organizer, Dharmendra Kumar, saying

The Modi government has turned a blind eye towards the problems being faced by the labor class. The government must rethink its labor policies. Modi has made a mockery of us by telling the world to come and manufacture in India because it has the cheapest labor.

Kumar also repeated the call for an increase in the monthly minimum wage “from $72 to $226 be extended to the informal sector.”

Ok, you say, but maybe this is just us. Well, I don’t think so.

This week the Modi government also withdrew its proposals for seizing agricultural land for either government infrastructure projects or corporate economic development, which had been a centerpiece of his program to jump-start the economy and make the country more business friendly. Land issues have been wildly contentious in states throughout the country. Modi got a reminder that rapidly urbanizing India is still almost half rural and agrarian.

And, then there’s the mess in Gujarat. Friends volunteering in Gujarat’s largest city had offered to help out while in the state, and I’d demurred saying we continued to not be comfortable working in Gujarat, but thanks all the same. We got an email saying that demonstrations of 300000 to half-million people in the city had led to them being housebound for days as the military was mustered and the state feared a return of communal violence. The issue was triggered when one of the major castes totally almost 15% of the total state population known as popularly as the Patels hit the streets demanding either an end to the reservation or quota system of affirmative action in employment and education for long discriminated against groups or that they should be made a registered caste themselves and allowed to compete for the reserved slots. Reading the story in the Times, Journal, or other western sources and you are clueless, but this is the “fire next time” in India, and it is hard to believe that managing such a crisis is Modi’s strong suit given his history in Gujarat.

Good luck with figuring out China and believing in unicorns, but keep an eye on India. There’s a reason that Obama has established a “hotline” to Modi in India now. Something big is boiling there!


Is Manufacturing Coming Back to the USA?

New Orleans    Sometimes it is hard to determine whether something is really a trend or just more spin, but either way the spike of interest in manufacturing (i.e. jobs!) coming back to the USA is worth close attention.  Perhaps the evidence is circumstantial, but it’s physical and some of it means serious numbers of jobs, and not just any jobs, union jobs.

The largest case in point can be found in Charles Fishman’s story, “The Insourcing Boom,” in The Atlantic which is largely about the decision of General Electric and its high touch, high publicity CEO, Jeffrey Immelt, to invest almost a billion bucks in ramping back up Appliance Park in Louisville to make refrigerators or at least a good part of them in the USA.  Another 1000 union jobs have already come on line, and it looks like more in the offing.  Fishman was the author of one of the best books ever on Walmart a couple of years ago, so he’s not your run of the mill flack for business.  A companion piece on a smaller scale by James Fallows, also in The Atlantic, made the case for some smaller scale tech jobs being done in the San Francisco Bay Area rather than overseas in China.

In both pieces the pattern that couldn’t be missed is that there are huge efficiencies in combining design with engineering with production that save on the cost of labor and parts when consolidated in one location under one roof in the USA, rather than alienated across the world in China or elsewhere.  Add those pieces together and companies like GE or even these small startups actually save money by being close at hand where they can actually put their arms around the work rather than chasing low wages and cheap materials across the globe.

 Two more pieces of evidence, though perhaps random, have emerged recently.  One was a piece in the Times about the huge 78 ton mining trucks that are made around Decatur, Illinois and exported around the world.  Caterpillar is at least still marginally union though one of the most anti-union, union manufacturers in the country.

Finally, the announcement by Apple’s CEO, Tim Cook, that they were going to make a token, largely symbolic and undefined $100 million investment in manufacturing some pieces of their empire in the US, after former Chairman and Co-Founder Steve Jobs became infamous for insulting President Obama and saying that tech jobs “are never coming back” to America, is a clear sign that even the worst of the lot over at Apple are hearing the sounds of a stampede back to the USA, at least in the media even if not in practice.  Couple this with the concern over the callousness of textile manufacturing and the absurdly flimsy monitoring program that led to the deaths in Pakistan and Bangladesh sweatshop fires, and there’s some small hope that manufacturers are starting to get the message that jobs and products belong in this country and not just chasing low wages around the world.


Notes on Japan for My Father

Seoul  The economic news from Japan is grim.  Exports, the lifeblood of much of the country’s economy was down 10% in September to the lowest point in 30 years reflecting the continuing aftershock of the worldwide recession, aggravated by a currently unresolved land and trade dispute with China that led the downturn.  One person I visited recently commented sharply that the new government in power after decades of effective one-party rule, simply didn’t have the relationships in China and elsewhere to solve problems in the back channels with the finesse and face saving that is a mandatory requirement in this part of the world.  Regardless, you wouldn’t know there was even an economic hiccup in Tokyo or Sendai which were maintained so spotlessly that seeing a piece of litter almost provoked a double-take from me each morning if I beat the sweepers out.  Major construction in downtown Tokyo also seemed to be roaring forward.

My father, a WWII navy veteran was typical of that generation in being tight lipped about the war, partly because he spent much of it in the NROTC at Milsaps and Tulane preparing to be a lieutenant.  He shipped out finally for the far east after the war was effectively decided, hitting a number of ports after a Pacific crossing including Tokyo, though that’s as much as I really ever heard him say.  Nonetheless there’s little doubt that had he been with me, he would have been surprised, if not astounded, at this almost obsessively ultra-modern country and its third largest global economy.

Here are some random notes, he would have enjoyed, as you might as well:

  • Signage is ubiquitous and very, very detailed!

  • There are public facilities, but this isn’t India, and they are dignified and discrete.

  • This is vending machine heaven!  The popular bottles of green tea drunk by people everywhere turned out to have a Coca-Cola label on the top of the bottle.

  • New since my last visit was 40-inch hard barrier blocking the Metro tracks from the push of commuters, broken only by the automatically opening gates.  I was told, perhaps correctly, that the city had built these barriers in the six-years since my last visit because too many salarymen a little tipsy from some after work libations were falling fatally on the tracks.  Something had to be done, so they did it.

  • There’s a lot of smoking still, but best be careful where (even though many public restaurants still allow smoking surprisingly), even outside on the street, where there are constant warnings.

  • Remember when Japan was the gold standard for electronics?  They seem to feel that they still are, especially if you pause for a second and try to take the full measure of a parking meter.  Remember when they were simply metal stumps that swallowed coins?

  • Not everything is new wave, because in our work there’s still a bit of old school.  Both the police and a number of protestors sport plain plastic megaphones around their necks to give raised voices something of non-electronic boost.

  • The leaflets may be multi-colored with glossy paper and galloping graphics, but collating is still by hand just as it was more than 40 years ago when I first made flyers and shuffled them together with forms in welfare rights.

  • Anime “animals” of all shapes and sizes are pervasive and Hello Kitty is still out of control but that sort of playful or infantile imagery still gave me no response when I was asked about the full-bodied “frog” at the Anti-Poverty Campaign rally, I could only say, “Was that a frog?


Who is that Masked Woman – and Why?

masks on a beach in China

New Orleans    Rifling through the papers on my return, I am confronted by a picture of women on the beach in ski masks.  What’s up with that?  Flip a couple of pages and there are even more of them, as if it is a blooming fad of some kind.  Reading further it was some of the same phenomena we had found on our Organizers’ Forum trips to Vietnam and Thailand, a desire to not “appear like peasants” in the clash of fashion, culture, and race.

A little farther back a man is being arrested in Russia supporting the women’s band and its protest of the autocratic methods of Prime Minister Putin.  Another day’s paper spotlighted the members of the Russian punk rock band, the so-called Pussy Riot, all wearing ski masks as they did their “prayer protest” in the cathedral against Putin’s methods.    All of this was reminiscent of the emergence some years ago of Subcomandante Marcos and his Zapatista Army of National Liberation who became popular heroes from the Mexican state of Chiapas and an articulate force for reform and protest against globalization and advocates for the poor.

man protesting the arrests of members of Pussy Riot

Could balaclavas be catching on as a political statement and tactic, and not some weird anti-fashion race statement?

In fact the Riot-ers seem to have adopted the ski mask for the same reason as Marcos and the Zapatistas had done – to not be identified.  It seems that the Riot-ers were a band of about a dozen who upon donning their masks became interchangeable.  The three young women now in the dock for up to 7 years could have been any combination of others who might have taken their places.  Except for the brutal honesty of the situation, what an amazing story that would make in the hands of a skilled novelist!

members of Pussy Riot

In a world of solidarity with perhaps cooler temperatures, perhaps we would all be donning balaclavas now.  Whenever protests are masked in anonymity for fear of reaction and retaliation, we have to recognize that these tactics say something fundamentally about a society and its political norms, all of which are worth hearing, and none of which augur well for people forced to hide their faces and silence their voices.

on the beach in China, people wearing masks for sun protection


Fighting for the Last Housing Project, Marshall Islands Arkansas, Chinese Enviros

70 year old housing development, Dixie Homes, demolished in Memphis

New Orleans  I went to sleep with firecrackers booming over the Mississippi River and woke up to chickens crowing in the yard next door, but it helps get me out of bed and on the road to Memphis and to working with citizens’ groups and others in the Bluff City, trying to make the redevelopment of Vance Avenue a place that will also support affordable housing for the poor.  The almost impossible fight has to do with trying to save or at least restructure the planning around the “last housing project” in Memphis, which may be more important as a slogan than development plan for some city fathers.  From there it’s over to Little Rock for a couple of hours sleep, more meetings with radio and union officials, back to Memphis for some meetings about money, and, yeah, you get it, we’re hustling!

So this is a “aggregated” blog like you find from the big guys.  One story is about how the largest population of people from the Marshall Islands has arisen around Springdale, Arkansas and the Tyson Foods chicken plants that have been an immigrant mecca for decades with minimal wages and blisteringly hard work.  This says something about immigration that many of the right won’t except as a different side of globalization and one of the surprising reasons why Tyson spokespeople have often been loud voices about worker-import programs even if not immigration reform.  The other is about a simple organizing truth from China.  It’s easier to fight something before it’s built than it is tear it down later.  Amen!

Workers at Tyson Chicken plant in Springdale, Ark after exposure to chlorine gas last year

July 4, 2012

For Pacific Islanders, Hopes and Troubles in Arkansas


SPRINGDALE, Ark. — Melisa Laelan is a royal princess far from her Pacific Island home, presiding instead over a landlocked realm of grain silos and poultry processors.

Her subjects here are 4,300 Marshall Islanders — the largest enclave in the continental United States — and many of them are adrift in a culture that confounds them.

“I feel obligated to protect my people,” said Ms. Laelan, 34, who spoke of her exalted heritage with reluctance. In the islands, she said, “it’s a very common thing to expect that someone from a royal family will provide for you.”

Her uncle is a tribal king who owns much of the land in Majuro, the capital. But Ms. Laelan herself has no riches to share. Her only power is a meager one: persuasion. A single mother, she provides for her 7-year-old son, Zion, with money she earns as a court translator. They live in a small apartment next to a discount muffler shop.

She enlisted in the United States Army after she graduated from her Marshallese high school. In 2005, she entered the civilian world and, like thousands of Marshallese before her, came to Arkansas.

Almost all of them live in this working-class town in the northwest corner of the state, where Tyson Foods has its headquarters. They arrived here hoping to escape poverty and poor health: their nation ranks third in tuberculosis deaths per capita. Diabetes is rampant. Leprosy still lurks.

The promise of a steady income is a big draw. Tyson’s minimum starting wage is $8.70 an hour, with benefits, a relative fortune for Marshallese. But the islanders discover that they will need to buy a car to get to work and, before that, that they will need to pass a driver’s test, which is not offered in their language. Many must pay rent for the first time. They puzzle over the American obsession with time, and they are ignorant of bureaucracy and health care systems.

“Their language is a problem; their culture is a problem,” said Kathy Grisham, executive director of the Community Clinic in Springdale, which treats low-income patients. “They don’t have a word for prevention. They don’t have words for all the body parts.”

Springdale, which is heavily Hispanic, is well equipped with teachers of English as a second language and with special programs, but “I’m having to start at a different level with my Marshallese,” said Deborah Hardwick-Smith, the principal of Parson Hills Elementary School, which is 30 percent Marshallese. School administrators struggle with tardiness and absences among the Marshallese.

Ms. Hardwick-Smith started giving alarm clocks to parents as presents. Last semester, she created a program to educate parents about American life and expectations for students. Now, “I’m seeing higher scores with my kids,” she said.

That is good news, because the number of Marshallese is likely to grow. The islands and the United States have been intertwined since World War II. The United States has detonated at least 67 nuclear bombs in its 750,000-square-mile territory. The radioactive fallout rendered some islands uninhabitable. And United States military operations there are powered by American processed food, beloved by locals but blamed for the explosion in diabetes.

A 1986 compact gave the United States continued military access, while the Marshallese got the right to work and live in the United States indefinitely without visas. More than a third of the Marshallese — about 20,000 — have seized the opportunity. Marshallese politicians routinely fly the 6,000 miles to campaign here, and in 2008 the Marshall Islands opened a consulate on Spring Street, above a barbershop.

The Marshallese trace their roots in Springdale to one person, John Moody, who arrived in the 1980s to work in a Tyson plant. He sent back word of plentiful jobs. Word spread through the islanders’ family-centered culture. “This place got a population” because “everybody is related,” said Jacob Masha, 34, who left Majuro in 1990 and is a distant cousin to Mr. Moody.

The increasing numbers add urgency to Ms. Laelan’s cause. Health care is a top concern. Her mother, who was uninsured, died in Arkansas the same day that she learned that she had a brain tumor. “To this day, we are still losing people because of a lack of services,” Ms. Laelan said.

Still, a clinic that caters to the Marshallese opened in November. Ms. Laelan enlisted some friends to form an advocacy group, the Arkansas Coalition of Marshallese. She has also teamed up with a Marshallese congregation of Seventh-day Adventists to plant community gardens. A nutritious weekly supper is held at the pastor’s home.

At a supper in June, about 40 people — many of the women in traditional flower print dresses — crammed into a small duplex. Kevin Harkey, a member of Ms. Laelan’s coalition, was disappointed by the turnout. “We usually have more than this,” he said. But he was pleased with the punctuality. “We’re trying to get people to practice being on time.”

The dinner was part worship service and part gospel of good eating. There was vegetable soup, but a bowl of doughnut holes, too. Mr. Harkey stopped a teenager from drinking a soda. “He knows that can lead to diabetes,” he said. The teenager put the can down and grabbed a doughnut hole.

A few days later, Ms. Laelan was out working on another cause: persuading state officials to offer a Marshallese-language driver’s test. Few can pass the English test, but many must drive to work or to the doctor’s office. As a court translator, she sees Marshallese incur fines and jail time. Some lose their jobs.

Ms. Laelan and lawyers from Legal Aid of Arkansas have petitioned the State Police, which administers the test, and are considering filing complaints with the federal Transportation Department. “We tried asking nicely, and that didn’t work,” Casey Bryant, a Legal Aid lawyer, said. “The lack of language access can be seen as a violation of the Civil Rights Act.”

The Marshallese around the table in the Legal Aid office were silent and seemed worried about the idea of taking on the United States government.

The princess made a plea to her people. “Please hang in there,” she said. “If we don’t do it, who is going to?”

July 4, 2012

Bolder Protests Against Pollution Win Project’s Defeat in China


HONG KONG — China has long been known as a place where the world’s dirtiest mines and factories can operate with impunity. Those days may not be over, but a growing environmental movement is beginning to make the most polluting projects much harder to build and operate.

Large and sometimes violent demonstrations against the planned construction of one of the largest copper smelting complexes on earth prompted local officials in southwestern China’s Sichuan Province to continue backpedaling furiously on Wednesday. The local government of Shifang, the planned site of the smelter, announced in a statement that the construction of the $1.6 billion complex had not only been suspended but also permanently canceled.

The smelter was supposed to be the centerpiece of a planned economic revitalization of an area devastated by the 2008 Sichuan earthquake, through the creation of thousands of construction jobs at a time when the overall Chinese economy is suffering a sharp slowdown.

A police official in Shifang said in a telephone interview that everyone detained in the protests had been released. The police acted after a crowd estimated by local residents in the tens of thousands defied the police and assembled Tuesday evening to demand the release of dozens of students jailed in the protests on Sunday and Monday.

In a country infamous for its polluted air and water, the protests were only the latest in a series of large, sometimes violent demonstrations that appear to be having some success in pushing China to impose more stringent safeguards on new manufacturing and mining projects.

“The standards for environmental protection are higher and higher, from the public and also from the government,” said Zhao Zhangyuan, a retired environmental protection official who has successfully campaigned for the last several years to block the construction of a large trash incinerator in a prosperous Beijing neighborhood.

Even as Chinese people demonstrate an increasing willingness to challenge local authorities, financial penalties are on the rise for Chinese companies and their owners who plan projects perceived as hazardous. Shares in the Sichuan Hongda Chemical Industry Company, which was going to build the smelter, plunged 9.2 percent in Shanghai trading on Wednesday.

Last month, about 1,000 people protested to block a trash incinerator in Songjiang, near Shanghai, with no decision yet announced there on whether it will proceed. Last December, local officials announced that they would stop a coal-fired power plant in Haimen, near Hong Kong, after an estimated 30,000 people marched to block the construction.

Last September, a solar energy company in Jiaxing, near Shanghai, was closed after demonstrations there that objected to chemicals used in the manufacturing process. And last August, local officials in Dalian, in northeastern China, said that apetrochemical plant would be closed and relocated after at least 12,000 people joined protests.

Events in Dalian offer a cautionary tale for environmental protesters in China, however. The petrochemical plant is still operating nearly a year later, as local and national officials have been unable to agree on where to it should be relocated, a person with a detailed knowledge of the factory said Wednesday, insisting on anonymity because of lingering controversy over the factory.

But the success of the Shifang protests suggests that opponents may find it easier to prevent environmentally threatening projects from getting started than shutting down existing ones.

“A decision has been made that the construction of the plant has been stopped,” officials said in a statement on Wednesday, “and that Shifang now and in the future will never construct this project again.”

Thanks to the Internet — China has more Internet users than any other country — the protests appear to have resonated across the country. “Shifang” was the most-searched term on Sina Weibo, a Twitter-like microblogging service, on Tuesday and again on Wednesday morning, before abruptly disappearing entirely from the list of frequently searched terms in a possible sign of censorship.

Several posts praising the Shifang protests on Tuesday evening had been deleted by Wednesday morning, another sign of censorship. But more posts had replaced them.

“Paying close attention to Shifang, because maybe the next one will be me, us,” a Weibo post said.

Public protests are not the only challenge for heavily polluting industries. In some industries, the Chinese government has taken action on its own.

Environmental activists and local residents have tended to be reluctant to challenge illegal rare earth mining operations, which are frequently connected to organized crime syndicates with well-deserved reputations for intimidation and even murder. But the government has lately been closing down even legal rare earth refineries all over China for months at a time to require them to install new emissions control equipment, after years of tolerating heavy emissions of toxic and radioactive waste that have turned areas into moonscapes.

Improving the environmental record of the rare earth industry may help China in a pending World Trade Organization case filed against it by the United States, the European Union and Japan.

Multinational corporations are generally already building cleaner operations in China, partly for fear of offending Chinese ultranationalists if there is a pollution scare and partly from public pressure in their home markets.

When Honda built a new auto assembly plant in Guangzhou several years ago, for example, the company included a wastewater management system that even went beyond the cleanup standards at many auto assembly plants in the United States. Honda executives reasoned at the time that China would someday toughen standards, and that it would be cheaper to build to strict standards from the start instead of retrofitting later.

But to the extent China toughens its environmental standards, it could erode some of the competitive advantage of Chinese companies and affect those multinationals that depend on Chinese suppliers for a huge variety of materials.

residents protest in Shifang