Author Archives: David Losson

Understanding Sprawl

What is urban sprawl? We’ve all heard the term and seen the images of expansive subdivisions and big-box stores that it conjures up but do we truly understand the nature of the beast? Sprawl tends to be typecast as a low-density version of suburbia when in reality it can take on many different forms. Evaluating sprawl is more nuanced than simply discussing differences in population and building densities; questions of land-value, connectivity, metro shape, development pattern, and relative area must be included in any comprehensive analysis of urban sprawl. The following are some important factors to keep in mind when judging a city’s “sprawl factor.”

1.) Contiguous Development– In discussions of urban expansion and development, the importance of proximity tends to be overshadowed by debates over density, which often frame the goals of anti-sprawl proponents and low-density suburban dwellers as contradictory. The importance of proximity is lost in these discussions, which is a shame since many of the negative effects of sprawl can be remediated by addressing issues of proximity without necessarily forcing people into higher-density environments. In many cases, a metro area’s leapfrog development can be quite dense, creating a visually-misleading impression of the area’s perceived compactness. Examples of this form of urban development abound in cities the world over. Consider Montreal, overall quite compact by any measure, since the central city is constrained to an island. There is quite a bit of adjacent undeveloped land in between the river banks and the suburban corridors just beyond the periphery. Imagine if we could move the off-island suburbs of St. Jerome, Blainville, and St. Therese on the undeveloped land of Laval, directly adjacent to Montreal, without changing anything about their densities or general construction. That would mean an additional 147,631 people living a mere 12 miles from downtown Montreal without asking anyone to give up their suburban lifestyle and we’d still have an extra 4.02 mi2 to spare! The upshot of this would be that suburbanites have shorter commute times while still living in their desired setting, while the increased close-in population would bolster the services and businesses available to Montrealers and Lavallois and probably support a wider variety of amenities. Furthermore, with this setup, less of the landscape would be fragmented by suburban sprawl, allowing more of the region’s natural habitat to remain unified and uninterrupted.

https://drive.google.com/file/d/0B8PJBntDFNkEMlU5S0dpYlhNT3lBVnJkVHZhLVpvYzQ4c084/view?usp=sharing

Above: A crude estimation of the undeveloped land of northern Laval, let’s say 30.29 mi2.

https://drive.google.com/open?id=0B8PJBntDFNkERDhHM0dYSDl4ZUlBZTdFYTNFekplbGcyallF

Above: The bulk of suburb, St. Jerome’s, area (12.57 mi2) and population of 68,456.

https://drive.google.com/open?id=0B8PJBntDFNkEMl84SG1XUDYwdmZhZUtNdFh6a2hqTklHQWMw

Above: The majority of Blainville at some 9.98 mi2 and 53,150 inhabitants.

https://drive.google.com/open?id=0B8PJBntDFNkEZGczdDRkRlZzNjM3STRfeDRYUWl5ZDRMVTgw

Above: The entirety of St. Therese in all its 3.72 mi2 and 26,025 population.

The general shape of the sprawl pattern matters a lot in terms of keeping any given point of the within certain range of every other given point in the urban zone. Obviously, the shape a city takes is determined largely by geographic constraints. Looking at the Bay Area, for example, which consists of two metropolitan areas (San Francisco-Oakland and San Jose-Sunnyvale), the mountains constrain development while the presence of the long, narrow bay encourages development in a North-South pattern, meaning that any two random points are farther from each other than they would be if the area was laid out in a concentric circle. Suppose that part of the bay between the San Francisco peninsula and East Bay was actually land and the cities of East Bay developed there. On average, the distance between the cities on the east end of the former bay and those on the western slopes would be reduced by 3-12 miles and drive times between destinations located on either side would be significantly reduced since traffic would no longer be forced to route itself around the bay or over strained bridges.

https://drive.google.com/open?id=0B8PJBntDFNkEejJPUUVXeFFwWTQ

https://drive.google.com/open?id=0B8PJBntDFNkEaHdiVVEteS1DRlk

  2.) Relative Size– This is probably the most obvious measure of sprawl since cities with larger populations can take up more room than smaller populations before being classified as truly sprawling. But don’t be tempted to reflexively analyze this spatial spread using standard density measures which divide total population by total area. Such numbers are prone to give tempting but misleading impressions of an area’s true density. One of the main reasons using raw density as a measure of sprawl falls short is the inclusion of large swathes of undeveloped land in the land area count since metropolitan areas are defined by political boundaries (county lines) not the actual extent of development. Additionally, different urbanized areas will support different ratios of non-residential land use (low population density) to residential land (high population density) which makes comparisons of the distribution of population between different metro areas difficult. There are some statistics that do a better job of capturing the density that an average city-dweller experiences. Housing unit density is an important metric for determining how densely-built (not the same as densely-populated) an area is and, thus, how compact or spread out the development pattern in a given urbanized area is. Weighted-average density measures, are helpful for understanding how the average citizen experiences the city and the typical density level that they perceive and experience, since its weighted nature means that drastic discrepancies in population densities within a metropolitan region don’t distort the average too much. Obviously, population density will vary greatly within a metropolitan area, more drastically so in some than in others, which is why the weighted-average measure is so useful.

3.) Connectivity– A city is greater than the sum of its constituent parts. A cohesive city or metropolitan region has to be more than an amalgamation of developments or city blocks; there has to be a certain level of interconnectedness that extends across the entire urbanized area.This concept can be concretely evaluated in the street grid, the availability of mass transit options, and city-block and sizes. Intersection densities are a good, though not perfect, measure of interconnectedness at the street level. Streets are the tissues of cities and, as such, allow for the expansion of an urban area. A grade-separated, 10-lane freeway is going to spur a very different development than a width-restricted, pedestrian alley. A more difficult but no less important factor to measure is the effect of streets in unifying or bisecting the neighborhoods on either side of them. The size of city blocks or developments is directly correlated with the idea of land-value and accessibility. The greater the ratio of street perimeter to enclosed area, the more that can be serviced by transport and the more exposure it has to public space (streets are public spaces) as well as to other spaces in the urban street network. As for mass transit, the more a system extends far out into the ‘burbs and the relative level of enclosedness (i.e. the level to which the transit loops or intersects itself), the more interconnected any given space in the metro area is, and thus, the more restrained sprawl is. Of course, in some countries, transit assume the role of catalyst for suburban expansion that freeways serve in the U.S , so this can be a double-edged sword.  

4.) Value & Use-The relative spread of highest and best land uses is the ultimate measure of sprawl, since that’s essentially what sprawl is about: the inefficiency of land-use choices and the associated costs arising from those decisions. If you think about, land that is very productive in an urban setting is usually intensely used as opposed to land that is more lightly-utilized (an acre of land supporting a 70-story skyscraper versus a single acre supporting 3 McMansions.) Of course, a more dense build-out doesn’t always mean a higher or better use of the land, but it’s generally a pretty indicator of that. In practical terms, I think a good way to evaluate this is the presence of surface parking lots, probably the least value-adding and most resource-consuming urban land use out there. Floor-to-area ratios also provide good insight into the relative intensity of a parcel of land’s use and can be a proxy for the level of maximization of a particular plot of land.

Principles in Urban Design & Planning: Vitruvius

                                                                                                                  Above: Vitruvian Man

This article is the first in a series covering the fundamentals and theory behind good city design. This post begins with the principles of Marcus Vitruvius Pollo. Vitruvius is remembered today for his foundational work of Western architecture and urban design, De Architectura better known as Ten Books on Architecture. In his vast treatise, he laid out a system of anthropometric proportions which would be utilized in Classical and Renaissance sculpture, architecture, and sculpture and memorialized by DaVinci’s Vitruvian Man.                                                                              Reading Vitruvius’ books, one can’t help but appreciate the elegance of the Vitruvian scale because it acknowledges the  of human form in the greater natural scheme of things. The Vitruvian-sized city is designed around the human end-user. With such ends in mind, Vitruvius devotes the first portion of his work with a description of the qualities of the ideal architect, those being draftsmanship, arithmetic, geometry, reading, history, philosophy, physiology, music, medicine, climate, law, and astronomy. Vitruvius’ belief was that if architects were to design the built environment in which people lived, the architect would need a holistic education in order to understand the various facets of citizens’ lives.                                                                                                                                     Above: The Parthenon

Vitruvius’ worldview breaks architecture into three general elements: Ordering (“taxis”), Design (“diathesis”), and Shapeliness (“oikonomia”). There are further two properties of ordering  in the Vitruvian scheme: Symmetry and Eurythmy. Eurythmy is defined as proportionality within an element of construction and symmetry is defined as proportionality between or amongst elements of construction. There are three other important metrics by which to evaluate a building or plan: soundness (the quality of the foundations and building materials), utility (ease of use and practicality of the design), and attractiveness (pleasantness and elegance to the eye).         Vitruvius goes on at length to explain his methodology for selecting an ideal site for a city. According to him, the place should be elevated, not cloudy, not liable to frost, facing away from areas prone to intemperance (climate), and away from swamps. Much of his thinking was, of course, influenced by the defense concerns of the day and the Greek belief in medical Humorism (the four humors being yellow bile, black bile, phlegm, and blood). Vitruvius also held that the wind patterns of a site should be studied prior to construction so that the streets could be laid out at angles oblique to the wind currents.

                                                                  Above: Netsch Campus at University of Illinois Chicago                                                                                    According to Vitruvius, if the settlement is to be inland the city forum be built in the center of the town but if the city is on the coast, the forum should be directly adjacent to the port. As for the scale of an ideal forum, we are given two rules of thumb: the width should equal 2/3 of the length and the overall size should be proportional to the population of the city. Being a Roman and an inheritor of the great Greek building traditions, Vitruvius expounds on the differences between Greek fora and Italian fora. While Italian fora are preferable because of their 2:3 width/length ratio, 1/4 shorter second story, and allowance for shops, Greek fora are adequate with their square shape, tightly-packed columns, and double story loggias.                                             As the core nucleus of the urbs and vicinity, the forum is situated at the confluence of the various public facilities and a vast array of commercial activity. The forum plays host to the diverse public life that characterizes the city and its environs. As such, Vitruvius prescribes the situation of the jail, senate house, and treasury on the forum. Should the senate house have a square floor plan, the height should be 1/2 of its length. If the senate house is to be oblong (2:3 width to length ratio), Vitruvius says that the height should be 1/2 the sum of the length and width.                                                                                                                                                                       The basilica (a court building) was to be located in the warmest plot of land adjacent to the forum. The width of the basilica itself was to be 1/3 – 1/2 of its length and each of the porticoes (open-air balconies) should be 1/3 the width of the central area. The second story columns of the portico should be 3/4 the height of the lower story columns and the parapet (compartment) between the lower colonnade and the upper colonnade should equal 3/4 the height of the second story columns.        

                                                AboveVitruvian Park, Addison, TX.                                                                                                                     For the placement of public baths, Vitruvius recommends a warm site not facing Northward. In addition, the tepidarium (warm) and caldarium (hot) should face Westward since the common bathing time is midday-evening. To make construction easier and to make the building more efficient, the male and female caldaria should be adjacent and connected to each other so as to share the same furnace.
The town’s amphitheater was to be situated at a “healthful,” non South-facing location. The dimensions of the amphitheater should be such that it is possible to draw a straight line from the center of the stage to the outermost entrance of the theater that touches the edge of each row of seats. In order to achieve this, the backing of each successive rows of seats should never exceed the width of the aisle.                                                                                                                           After providing a very sophisticated understanding of acoustics, complete with a substantial knowledge of chords and harmonies, Vitruvius calls for the placement of echea -bronze vessels that resonate sound- in chambers underneath the amphitheater seats. The echea are to be placed upside down in the chambers, propped at angle with wedges of at least 0.5 feet in height. Along the footing of the seats of the amphitheater, there should be openings measuring 2.5 feet in width and 0.5 feet in height that allow the sound to travel.

                                                                Above: Tablinum                                                                                                                                                    In the private homes of citizens the importance of the atrium is central both physically and figuratively. There are three ideal length/width ratios for the atria: 5/3, 3/2, and (2r^2)^1/2. The height of the atria should be 0.75 of the length of the atria. The alae, the wings or aisles on the side of the atrium, should be built according a sliding scale according to the length of the atrium. If the atrium length is 30-40 feet, the alae should be 1/3 of that length. If the atrium is 40-50 feet long, the alae should be 1/3.5 of that; if 50-60 feet, the alae should be 1/4 of that; if 60-80 feet long, the alae should be 1/4.5 of that; if 80-100 feet, the alae should be 1/5 of that; if 100-120 feet long, the alae should be 1/5.5 of that; if 120-160 feet, the alae should be 1/6 of that; if 160-200 feet, the alae should be 1/6.5 of that; if 200-240 feet, the alae should be 1/7 of that.                                                                                                                                                                        The ancient ‘home office,’ the tablinum was an airy room situated just off the atrium and was used for drafting and study as well as important business. Like the alae, the width and height of the tablinum was dependent upon the width of the atrium. If the atrium was 20 feet wide, the tablinum was to have a width 2/3 of that ; a 30-40 foot wide atrium, the tablinum would have a width 1/2 of that; a 40-60 foot wide atrium, the tablinum would have a width of 2/5 of that. The height of the tablinum would be 1 1/8 of the width of the tablinum.  

Is My Inner Archie Bunker Showing? Notes from a Crotchety Young Man

                                                                                                          Above: Archie Bunker

DISCLAIMER: I realize that many reflection pieces responding to the rise of arm chair activism and the “outrage industry” have been written. I am writing this article for personal, cathartic reasons.

As any objective person active in contemporary mass culture knows, social media and the blogosphere has been invaded by hordes of shrill, belligerent ideologues who roam the internet in small cyber-packs, in search of easy targets to bully. Known as the “social justice warrior” phenomenon, many have invaded the news feeds of nearly every millenial Facebook, Twitter, Instagram, Tumblr, or other social media user.                                                                                                    Have you ever wondered the cause behind the rise in self-proclaimed libertarian, small-government conservative, and constitutionalist political affiliations in recent years? Part of the answer: bleeding heart ideologues who agonize over inane non-issues that don’t pertain to reality (a.k.a “Social Justice Warriors”). Granted, this explanation is insufficient, overly simplistic, and a bit antagonistic itself. But hear me out.                                                                                                     What I mean, in short, is that brazen identity politics are the order of the day. It seems that any dialogue about meaningful issues are drowned out by the latest, contrived outrage; somebody’s delicate sensibilities were offended and therefore the perpetrator deserves to be lynched on the altar of public opinion. In fact, that last sentence I wrote could be worthy of a skinning in some circles due to the fact that it uses the word “lynching.”                                                       The Social Justice Warriors are the Digital Age reincarnations of the 60’s “bleeding heart liberals” who displayed the same naivete and manufactured outrage that comically annoyed the fictional Archie Bunker and others like him on the show All In the Family.                                                     The cynic in me sees the new generation of SJWs as a group less genuine and more sinister than their baby boomer predecessors. Thanks to the over-sheltered upbringing of most of today’s Western youth, spurred on by helicopter parents thrown into a media-induced frenzy of fear, many members of my generation crave intrigue and meaning in their lives. Add to this the self-promotion afforded by social media, and you have the narcissist equivalent of the Crack-Cocaine Epidemic. It appears that many of these young, misguided internet users have sickly appropriated often worthy philanthropic causes for their own self-gratifying ego-stroking.                                    Above: A “bleeding heart”

Like their bleeding-heart predecessors, SJWs are known for their characteristic (here comes the “warrior” part) witchunts of ideological non-purists. The aims of these raids can be as mundane as humiliation in front of targets’ friends to full-out “doxing,” the broadcasting of private, individually-identifiable information with the intent of bringing harm upon the victim. People have lost jobs, received death threats, had their identities stolen, and dealt with slanderous accusations thanks to such activities. The craziest part of the whole phenomenon is that it targets other supposed “warriors” who have apparently fallen out of favor with the main current of thought. The deeply-embedded yet subtly expressed sanctimonious intellectual conceit of the Left’s talking heads has found its full, combatant expression in the online communication of young, impressionable minds. The online world of armchair activism is a self-consuming movement.                                                                                                                                         When not totally oblivious to non-identity related political issues, SJWs are finding ways to frame such issues in terms of identity politics. Mostly, these are thinly-veiled attempts at discrediting small-government and laissez-faire market capitalism. Now that more people are confronted with the self-entitled products of a “mass coddling movement,” the fears of death of the common virtue and the ensuing loss of the Pax Americana are more justified than ever.               Social justice “crusading” can’t be fully understood without knowing the role that supposedly academic, not intellectual, institutions.  The American university, in the words of Camille Paglia, has become an exercise in “institutionalized whining.” As I wrote in an earlier post, as long as the over-attendance of college has been going on, the intellectual stature of the American university has been in decline. While a dynamic, culture should never be stifled by tradition, re-interpretation of the academic canon can only go so far. So much of what was once taught and valued in the core curricula of American universities is now watered-down, disavowed, or frightfully misrepresented. Honest, genuinely intellectual discussion is increasingly under assault from the revisionist zealots. This is the breeding ground for modern-day online social justice activism in which many youth are introduced to this distorted learning and develop a false sense of their own erudition and righteousness.                                                                                                                                       Above: “Coddle College”                                                                                                                                         As a college student fully immersed in a collegiate environment, I am quite exhausted by the New Left’s relentless pandering to the young and the naive via demagoguery. According to this camp, whether it’s the “1%,” “privileged white people,” “the warriors against women,” or the latest obscure gender label there is always someone, rather than some issue, to direct one’s outrage towards. As a citizen of one of the freest and most prosperous societies in history, I didn’t realize I was supposed to be so angry at so many for so much. This is a dangerous trend if free, protected speech is to continue to be freely expressed without fear of retribution.                                                                                                                  On many campuses, there are now institutionalized “safe spaces” where students seeking asylum can escape opinions they find disagreeable; and, “free speech zones,” where students may protest and speak freely without risk of disciplinary action. What these initiatives amount to is the ghettoization of the university into distinct compartments that follow ideologically-drawn lines. This defeats one of the greatest strengths of the modern university by preventing the cross-pollination and conflict that arises from the confluence of different perspectives. This produces a tragic stagnation effect for academia as well as for the more widely-consumed culture. All forms of nonviolent expression should be tolerated and “out of the closet,” even hate speech. In an authentically progressive society, thoughts or ideas aren’t to be silenced because they may offend sensibilities; break all rules of taste; or, are blatantly false. The truth can evince itself and, as such, any and all ideas, organizations, and values claiming some ownership of the truth deserve to stand trial and have their claims questioned. Any cause that claims the moral high ground must prove itself to be in possession of such moral standing; they don’t need to be protected but, rather, they must be allowed to explain themselves.                                                                                                                                          And, fill disclosure, as a”white, gender-conforming, cisgender, heterosexual, American-born male from an upper-middle class background,” I am not writing this to lament marginalization and discrimination experienced by those whose identities resemble mine; we are not victims of discrimination; Western culture as a whole is the victim of the character assassination of certain elements of society. So no, I don’t want to discuss the “outrage of the week.” I have no desire to engage in a rancorous shout match with you in the comment section of Facebook. It’s not enriching, thoughtful, or morally-satisfying in any way; it’s a further “tabloidization” of culture and politics. As Archie Bunker would say, “Can’t we all just have civilized humanical relationships?”

 

The State of Free Speech in the U.S: Online

                                                                                                  Above: The Internet

As the internet ages from its non-contentious infancy to a raucous and tumultuous adolescence, it finds itself increasingly in a headlock with its parent, the U.S Feds. The interwebs is engaged in a fight for its soul, pitted between its trailblazing, fringe-following roots and a more dignified, prominent, and sanitized position on the public stage. Already the fallout from this teenage train wreck includes an exiled online mogul, an online “hit list,” a string of highly controversial court cases, and a hot regulatory mess.                                                                                  The Electronic Communications Privacy Act of 1986 was originally written to curtail government wire-tapping of telephones and related electronic media available in the 1980’s. Though the law has been amended to incorporate regulation of government digital communications snooping, it is outdated. One provision in particular, regarding emails is quite worrisome. It considers emails that have been stored on a third party (usually the email service provider) server is considered abandoned after 180 days, which allows law enforcement agencies to retrieve such “abandoned” emails without warrant.                                                                It’s no secret to many American internet users that internet access in the good ol’ U.S.A. is significantly slower and more expensive than it is for European and Oriental counterparts. The Open Technology Institute documented American internet access in its 2014 report The Cost of Connectivity. Going through one chart provided in that report reveals that the median cost of a 30 Mbps broadband connection in Europe costs $42.59 while it costs $54.97 in the U.S. Another interesting finding that emerges in the report is the preponderance of small U.S. cities that claim the highest-speed internet connections whereas the European and Asian markets are dominated by the world cities.                                                                                                                          Shielded by the innocuous “Net Neutrality” label, the Federal Communication Commission quietly re-classified broadband access as a telecommunications service (Feb. 26, 2015), thus, subjecting internet service providers (ISPs) to Title II of the Communications Act of 1934. The change in law was adopted by executive action taken by the FCC. Ostensibly, the new rules are supposed to force ISPs to treat all online exchanges equally with regard to speed of service. In reality, however, the rules discourage and disincentivize ISPs from investing in expanding and improving their capabilities all while setting dangerous legal precedents for government intervention in supposedly “free” media. The basics of the rule include the prohibition on ISPs from blocking content that competes with the provider’s business, the mandate that ISPs cannot reduce the speed of certain applications (known as “throttling”), the ban on accepting fees for increased-speed connections, and it bans the ISP from blocking any lawful content. Sounds like a lot of hypocrisy coming from the Executive Branch of the Federal government.

Megaupload Scandal                                  Above: Kim Dotcom (center)

In January of 2012, the U.S government shutdown the popular file-sharing website, Megaupload. The hosting service was seized and criminal cases against the owners, chief among them Kim Dotcom, opened. Within days, other jurisdictions had frozen Megaupload’s assets. Megaupload.com and associated website  (Megaporn, Megalive, and Megavideo to name a few) were hugely popular file-sharing websites. Basically, users were able to upload and share files of content ranging from movies to software to anything else imaginable.                                  Before the Department of Justice shutdown Megaupload on charges of copyright infringement, the company was registered in Hong Kong and run by a group of U.S non-citizens. At its peak, the site was reported to host 50 million users a day and a full 4% of all internet traffic. Kim and his companions (Finn Batato, Mathias Ortmann, and Bram van der Kolk) were made wealthy from the site’s ad revenue.                                                                                                            Megaupload derived its revenue primarily from online advertising and premium subscriptions, which allowed paying members to download, upload, and store files with practically no restrictions. Non-paying registered members, had the ability to download and upload any files available to them, but if an uploaded file was not downloaded by anyone within 90 days, the file was deleted. Non-registered users (‘non-members) had the ability to upload and download any files that were available on the website but any uploaded file that wasn’t downloaded by anyone within 21 days was to be deleted from the website.                                                The substantiation of the DOJ’s claims are quite flimsy and far-fetched. In the indictment papers filed by the Government of the United States, Kim Dotcom, Megaupload LT., Vestor LT., Finn Batato, Julius Bencko, Sven Echternach, Mathias Ortmann, Andrus Nomm, and Bram van der Kolk were charged on the following counts:

1.) Conspiracy to Commit Racketeering

2.) Conspiracy to Commit Copyright Infringement

3.) Conspiracy to Commit Money Laundering

4.) Criminal Copyright Infringement by Distributing a Copyrighted Work Being Prepared for              Commercial Distribution on a Computer Network & Aiding and Abetting of Criminal                        Copyright Infringement

5.) Criminal Copyright Infringement by Electronic Means & Aiding and Abetting of Criminal                Copyright Infringement

The document opens with demagoguery that would put Big Brother to shame, claiming that the defendants were part of a worldwide online criminal organization, dubbed the “Mega Conspiracy.” According to a court ruling that would proceed from this case, the fact that Mega removed copyrighted files on their “Top 100” list constitutes a careful and deliberate attempt to make their site appear more legitimate, when, in reality the website was fully aware and complacent with the copyright infringement. Besides the fact that its ludicrous to expect a small company like Mega to police and filter a site of the size of Megaupload, under current law there are no provisions for secondary copyright infringement. On top of that, according to provisions of the Electronic Communications Privacy Act of 1986 extended by the Stored Communications Act private companies are forbidden from actively probing the private information of user accounts.                                                                                                                                                                      What’s more frightening is the fact that most of the assets that were seized by the U.S government were not in the U.S. The ruling justifies this since part of the “conspiracy” was carried out in the states.                                                                                                                                           Megaupload was, ostensibly, a “private data storage provider,” a website that provided uploaders with server space to store files. The basic file-sharing directive of Megaupload was akin to other programs such as Microsoft’s SkyDrive or Google’s Drive. Granted, there are some key difference between Megupload’s model and those of the services mentioned but the basic idea, the uploading and sharing of private content files.                                                                                   The prosecution argued that the website incentivized piracy through its Uploader Rewards Program, which offered premium subscribers cash awards for uploading files to the website. At the heart of this nefarious plot, was Mega’s aim to provide pirated content to increase the number downloads by unregistered users, which would generate more ad revenue for the website. Really? If shameless business profit-motivation is a crime, then there are a lot of businesses in dire need of a federal raid.                                                                                                             It is troubling when the United States DOJ and a host of other governments (including New Zealand and Hong Kong) can shut down a popular website, exiled its founders, and impound their funds because of the abuses of a few, rogue 3rd parties.   

The Backlash                                                                                                                                                                                            Above: Declaration of Internet Freedom                                                                                                                                                                                                                                                                                       The reaction to authoritarian attempts on the integrity of the internet has been neither small nor obscure. Nor has the response been dominated by any one sector of the internet-using society. One of the forces on the front lines in the fight for internet openess is that all-consuming corporate behemoth: Google.                                                                                                          Specifically, it is Google’s Transparency Report that tracks and reports information about requests the company receives to remove content, filtering of google services, and malware warnings the company issues to users of its search engine. The website is very specific, allowing you to look at the government requests it receives to remove content and the reasons cited by those governments. It also reports requests to remove content from non-governmental organizations or individuals and gives the location of that request, the date of the request, and the outcome.                                                                                                                                                            Part of the information that Google reports is the data regarding the requests it receives from law enforcement agencies for information about its users. You can even explore the percentage of emails sent to and from gmail accounts that were encrypted (i.e private and protected from snooping). The data is all arranged in an easy-to-understand, user-friendly fashion such that even a 19th-century ludite could understand it. Not only does Google provide the raw data of these activities, but it explains the reasoning behind its response to requests, the way in which encryption works, and its own efforts to improve internet transparency/ security. The Transparency Report even maintains a list of other groups with a significant online presence that disclose government requests they receive for content takedown which include: AT&T, Apple, Microsoft, Time Warner Cable, AOL, Facebook, LinkedIn, Yahoo!, Snapchat, Comcast, WordPress, Twitter, Wikimedia Foundation, and The University of California at Berkeley.

                                                                                  Above: Herdict

Another online effort in the tight for internet transparency comes from Harvard University’s Berkman Center. That project, known as Herdict, allows registered users to independently test and report webpages’ accessibility. As its name suggests (a portmanteau of “herd” and “verdict”), the website gathers data from a myriad of users to locate websites and pages that may be inaccessible due to government censorship, DOS Attacks, or other types of outages. The tool is helpful in finding choke points across the world wide web and then reporting the data for all to access.

               Above: OpenNet Initiative

A project aimed at  and reporting internet filtering and surveillance, the OpenNet Initiative is a collaboration of the Citizen Lab at the Munk School of Global Affairs, the Berkman Center for Internet & Society, and the SecDev Group. The group maintains a map of general internet filtering by country and even breaks down the filtering into the categories of the content filtered.

                                                          Above: The Internet Party

The brainchild of exiled internet mogul Kim Dotcom, the Internet Party is an upstart New Zealand political party with a decidedly open source-progressive alignment. The party believes in the power of competition and innovation and makes no exceptions for government policy. The website even has its own “policy incubator” whereby party members can discuss and formulate the party platform and policy stances, a refreshingly open approach to politics. The group is only a little more than a year old (May 13, 2014) but it promises to attract large masses with its mission to bring cheap, high-speed internet to all New Zealanders (something desperately needed in the U.S) and dedication to reform of copyright law. The group has a host of other forward-thinking ideas including the decriminalization of marijuana and a review of the Trans-Pacific Partnership.

                                                        Above: The Internet Freedom Coalition

As outlined on their website, the Internet Freedom Coalition is dedicated to protecting the freeing and democratizing effect the internet has on information and opposes three main threats to this freedom: taxes, regulations, and any attempt by the U.N. to regulate the internet. As of late the organization has taken up the fight against the recent Net Neutrality measures instituted by the FCC.                                                                                                                                        In a rare act of good statesmanship, the U.S House of Representatives has voted to approve the Permanent Internet Tax Freedom Act. Though still a bill on capitol hill, if signed into law, this legislation would indefinitely extend the moratorium on internet taxation, first enacted with the Internet Tax Freedom Act of 1998. Such a law would exempt the internet and companies that provide access to it from bandwith, email, and bit taxes as well as extending protections of e-commerce from multiple taxation.                                                                                                                   While the internet faces a myriad of challenges and threats from all sides, the good fight is far from over and the internet may as yet continue on in its innovative, democratizing ways.

Quotes Part Two

The following post is a collection of quotes meant to give you pause and meditate. Hopefully you find some value and inspiration (after all, that is the title of this website).

Dreams

“All the experts are experts on what was. There is no expert on what will be.”                                                 -David Ben Gurion

“He who asks is a fool for five minutes, but he who does not ask is a fool forever.”                                         -Chinese Proverb

“If you will it, it is no dream.”                                                                                                                                       -Theodor Herzl

“The beginning of wisdom is awe and the beginning of awe is wonder.”                                                           -Abraham Joshua Heschel

“Nothing is impossible, the word itself says ‘I’m possible’!”                                                                                   -Audrey Hepburn

Life Philosophy

“Live your beliefs and you can turn the world around.”                                                                                         -Henry David Thoreau

“We rise by lifting others.”                                                                                                                                           -Robert Ingersoll

“You only live once. But if you do right, that’s all you need.”                                                                                 -Mae West

“Sunlight is said to be the best of disinfectants.”                                                                                                     -Louis D. Brandeis

“Whoever is happy will make others happy too.”                                                                                                     -Anne Frank

“Talking comes by nature, silence by wisdom.”                                                                                                       -Yiddish Proverb

Empowerment

“Our deepest fear is not that we are inadequate but that we are powerful beyond measure.”                     -Marianne Williamson

“What lies behind us and what lies before us are tiny matters compared to what lies within us.”                 -Ralph Waldo Emerson

“We know what we are, but not what we may be.”                                                                                                 -William Shakespeare

“Your heart is full of fertile seeds, waiting to sprout.”                                                                                             -Morihei Ueshiba

“Better one day as a lion than a hundred as a sheep.”                                                                                           -Italian Proverb

A Brief History of Tax Havens

                                                                                                       Above: CCP Inc.

For as long as there have been unscrupulous governments levying taxes, there have been savvy people finding ways to avoid paying them. The emergence and continued existence of tax havens in direct defiance of onerous and unjust taxes continues to serve as a catalyst for economic as well as political, social, and ethical reform. It can be said that tax havens and, for that matter, any sort of “enclave of freedom” provide the only true competition to the conventional model of government. Such entities promote human progress and are a source of social innovation.

Ancient World                                                                                                                                                                                                                                               Above: Athenian Acropolis

It is a documented historical fact that the government of Ancient Athens imposed a 2% ad valorem duty tax at the city-state’s principal port. Athens was far from the only ancient polity that engaged in such taxation of trade; other city-states engaged in the practice include Halicarnassus, Cyprarissiae, Delos, Epidaurus, and Troezen. Governments even began experimenting with and implementing protective measures. The princes who ruled over Bosporus even levied a 3 .33% export tariff on all corn produced in the kingdom, unless the produce was destined for Athens, in which case the rate was reduced to 1.66%.                                    Then as now, certain statesmen and people responded to the authoritarian imposition of such measures on them and other average citizens. In Athens’ case, small nearby islands “offshore” from the Peloponnese, became the preferred ports-of-entry for traders, looking to avoid the tax. Over time, even the Athenian bureaucracy responded to the force of market competition. Thucydides writes that in 413 B.C., Athens phased out its 5% import and export duty in tributary ports “because they believed in this way they would increase their revenue.”

Medieval & Modern World                                                                                                                                                                                                                         Above: City of London Corporation            

With the chaos wrought by the fall of the Roman Empire, sanctuary cities, providing individuals as well as organizations, asylum from a variety of different threats fostered a European tradition for increasing trade and political liberalization that would only be realized later. In analyzing the history of the tax havens an interesting trend appears; it seems that medieval and contemporary tax havens have their roots in the English Common Law tradition. Perhaps the star of the modern tax avoidance/protest movement is the 1.2 square miles governed by the City of London Corporation.                                                                                                                                This fascinating organization, shrouded in rite and a wealth of traditions including its Freedom of the City ceremony, traces its legacy of autonomy to its 12th century establishment as a commune and 1191 recognition by Prince John. The city was given special protections including the right to elect its own mayor in the 1215 Magna Carta. The City of London’s history has been joined at the hip with the development of livery companies. Descended from medieval guilds, livery companies today operate as trade associations for a wide variety of professions. Most livery companies carry the title “Worshipful Company of [profession or cause].”                          In addition to providing fodder for conspiracy theorists, the City of London’s 110 livery companies provide a great networking function within their respective professions, champion various philanthropic causes, enforce a professional code in their fields, award professional qualifications, etc. Of course, some of these functions vary according to the livery company, but overall the core functions remain the same. Importantly, the City of London enfranchises the business electorate. How this works, essentially, is that any incorporated or unincorporated business or organization whose premises are located within the city may appoint a number of voters based on the labor force they employ. In addition, the senior members of the liveries, the “liverymen”, sit on a council named the Council Hall, which chooses the Lord Mayor of the City, sheriffs, and other government positions.                                                                                                          As already mentioned, the city plays host to a large number of significant financial institutions including the Bank of England, London Stock Exchange, and Lloyd’s of London as well as offices of over 500 banks. In total, the City of London accounted for 2.4% of U.K GDP in 2009. There are some claims that the City of London effectively operates as a tax haven for foreign multinational companies, shielding businesses under investigation for fraud. Such accusations border on the realm of preposterous. What is clear, though, is that the City’s tradition of secrecy, autonomy, and sanctuary seem to have been picked up by crown dependencies the world over.                                                                                                                                                                                                                                                                                                                   Above: The South Sea Bubble : A Scene In Change Alley 1720

Founded in 1711, the South Sea company was a joint-stock company created as a way to consolidate and ultimately reduce the British government’s debt. Basically, the company’s business model was to attract investors who would pay off a government IOU in exchange for exclusive trading rights in the South Seas. The venture rested on the speculation that new markets for British goods would emerge in Latin America, opening up new silver and gold markets to the company and its private, British investors. Faster than you can say “Ponzi Scheme”, people were flocking to the South Seas Company, astronomically overvaluing the price of the stocks. The pioneering spirit embedded in the business plan of the company became a sensation. Soon, schemes promising to invest in everything from “floating mansions” to “sunlight reclamation from plants” sprouted up across Great Britain.                                                  When the leaders of the South Sea Company finally realized that the company’s stocks were vastly overpriced relative to the company’s actual earnings and value, they sold their own shares in the business. When news broke out of their sales, a mad frenzy of investors selling off their shares in the company ensued. The market would’ve completely crashed had it not been for the banking prowess of the British Empire.                                                                                                 Perhaps the most enduring legacy of the South Sea Bubble was not the lesson in investing (Can you spell, Bernie Madoff?) but the Bubble Act of 1720 which effectively forbade the formation of all join-stock companies not approved by the royal charter. Throughout the British Empire, new rules and restrictive regulations relating to business incorporation were enacted. Until the law’s repeal in 1835, rates of incorporation were considerably lower throughout British domains than they had been previously. In the late 19th century, the cash-strapped states of New Jersey and Delaware began reforming these laws and began attracting out-of-state businessmen, seeking to incorporate in these “havens”, in droves.

                                                                                           Above: Egyptian Delta Land & Investment Co.

The 1929 British court case Egyptian Delta Land and Investment Co. Ltd. vs. Todd  was a landmark development in the creation of modern-day tax havens. The dispute arose over the issue of taxation as related to a corporation’s location(s). The Egyptian Delta Land and Investment Company though legally incorporated in London, was headquartered in Cairo and operated in Egypt. Essentially, the court ruled that the company was exempted from paying British taxes because it did not operate in the UK. This case set the precedent for offshore business incorporation and the nervous governments that try to counteract it. Years later, various British and former British holdings exploited and tweaked this ruling in their own laws including the Bermuda, The Bahamas, and Cayman Islands. Bermuda, in particular, would prove to be an early pioneer of the modern tax-haven.

                          Above: Conyers Dill & Pearman

Bermuda traces its history as an offshore destination to, you guessed it, a bunch of lawyers, specifically, the law firm Conyers Dill & Pearman. In 1935, firm’s founder Reginald Conyers drafted Bermuda’s first  “exempt company” legislation, birthing what some consider the first modern tax shelter. The law’s language specifically addressed “exempt companies,” laying the foundations of the modern-day offshore business craze. Today, the firm works in various offshore financial centers such as the British Virgin Is., Cayman Is., and Mauritius.                                  Around the same time in Switzerland, the Federal Act on Banks and Savings Banks was enacted (1934), offered banks strong protections of privacy. Article 47 of the document (known colloquially as the Swiss Banking Act of 1934), enshrines the concept of absolute professional secrecy. In other words, any inquiry into any account held in Swiss banks is considered a criminal offense. The law restricted access to information about private holdings in Swiss banks to any government, including the Swiss. Exemptions can be made in the case of Swiss judge’s subpoena, or investigation of terrorist-related funds. In addition to the national legislation, the laws of numerous Swiss cantons were written to extend various business and financial protections to individuals and organizations.                                                                                                    Following on the heels of the First World War, Lichtenstein passed the Lichtenstein Persons and Companies Act in 1926. The law, along with subsequent laws in 1928, relaxed and streamlined Lichtenstein’s incorporation rules; made Lichtenstein the only continental European country to have a codified Trust Law; and extended privacy protections to foreign holdings in the country. The law also introduced a vast repertoire of incorporation types to the Lichtensteiner legal system. As a result, the mostly poor and agrarian economy that had been ruined by the First World War was transformed almost overnight into a modern economy, focused on financial services. The growth was precipitated by the vast influx of domiciliary and holding companies in the 20’s and 30’s. The 1926 law, combined with Lichtenstein’s maximum business tax rate of 20% and open border agreement with Switzerland, have made Lichtenstein an attractive and wealthy offshore center.                                                                                                        Following the 1950’s, the 20th century saw a huge proliferation in the number of tax havens worldwide including every type of municipality from Pacific island nations, to the Irish Financial Services Centre in the heart of Dublin, Ireland. In recent years, the OECD (Organization for Economic Co-operation & Development) which is anchored by representatives from high-tax developed nations, has been aggressive in their attacks on tax havens and offshore financial centers. Recently, the Swiss signed an OECD treaty ensuring the exchange of tax information in certain instances. This comes off the heels of prior Austrian and Luxembourgish concessions.

Looking Forward                                                                                                                                                                                                                                   Above: The Seasteading Institute

While there are many aspects of tax havens and their development that I have left out of this article (perhaps it will be fodder for a future post), I think the most interesting is the prospect offered by seasteading. Essentially, seasteading is a movement by a small but dedicated group of libertarians and anarchists committed to offering citizens of the world alternatives to traditional government. Essentially, a seastead is a site located in international waters, beyond the EEZ of existing land-based nations, on which people can dwell. The seasteads can be joined to one another and disconnected as needed. The concept is that people will form voluntary associations rather than have a governmental entity imposed upon them. The belief is that by subjecting social governance to the same competitive forces that power the market, human creativity will be unhindered, unleashing the beneficial powers of technology and social innovation.                                                                                                                                                               Currently, The Seasteading Institute is directing its recruiting efforts towards fulfilling what it calls The Eight Great Moral Imperatives: “Cure the Sick”, “Enrich the Poor”, “Feed the Hungry”, “Clean the Atmosphere”, “Live in Balance with Nature”, “The Velella Mariculture Research Project”, “Power the World”, and “Stop Fighting”. The group hopes to achieve all this by engaging the ingenuity of its supporters and the freedom offered by the absence of government to achieve technological breakthroughs that will better humankind. Does this sound like a crazy, utopian pipe dream? Maybe, but it sure is a noble pursuit.

In closing, I’ll leave you with the following thought. In order to create a more just and prosperous future and ensure the continuing of human flourishing, we as the human race must move towards a model of social organization that subjects these institutions to the forces of competition and creative destruction led by the choices of individual actors.

 

Infrastructure Projects with Major Geopolitical Implications

 Above: Map showing portions of the projects discussed in this article

 

Energy Triangle                                                                                                                                              Following the discovery of natural gas and oil reserves in the Exclusive Economic Zones (EEZs)  of The Republic of Cyprus and Israel, the two nations created a joint EEZ in 2010. Basically, the agreement allows the two countries to move freely and easily about the two zones and it obliges the two states to cooperate on resource exploitation initiatives that straddle the borders. It is hoped that within the next 3-5 years, some solution will be drafted and under construction, allowing traditionally resource-poor Israel and Cyprus to become oil exporters. Currently, the plans for a joint natural gas and oil project between the two nations are in the most basic of stages, facing some significant practical challenges.

However, the EuroAsia Interconnector Project is looking very feasible and may materialize soon. As shown in the above map, the plan calls for a linking of the electrical grids of Israel, Cyprus, Crete, and mainland Greece. If completed, it would be the longest subsea power cable and, as its name suggests, the first linking Asia and Europe. In the map provided, it should be noted that the cable routes would not follow the straight-line paths that I have marked out, but due to a lack of public information on any such routes, I demarcated straight line paths. The project heads have promised that once the project is begun, completion would occur within 36 months. Currently, it looks as though the proposed project could begin construction in 2016 or 2017.

Why It Matters                                                                                                                                         The project makes economic sense because Israel can supply electricity at cheaper costs to the Cypriots and Greeks and, upon completion of other connector projects, Greece can export electricity to Italy and other Balkan nations. The project makes geopolitical sense for all three nations because it effectively creates an axis of traditionally marginalized nations in the region. By developing their own energy resources, Israel, Cyprus, and Greece can take charge of their energy needs and rely less on their hostile neighbors. Already, Lebanon has issued a dispute over the boundary of Israel’s EEZ. Turkey has made, thus far, empty threats to disrupt Cypriot-Israeli exploration of oil reserves in the joint EEZ.

As far as longer-range security concerns go, if oil and/or natural gas were to come online from this “Energy Triangle,” it would substantially weaken Gazprom’s monopoly over Europe, cutting Putin’s Russia down to size. Greece and Cyprus are fairly desperate for any sort of new industry, be it electricity or hydrocarbons, given the spectacular economic collapse that they have undergone in recent years. Moving forward, this project as well as other potential energy projects promises to further integration of regional markets and unite neighbors in an otherwise hostile environment.

                                        Above: Area affected by LAPPSET Project

LAPSSET                                                                                                                                                          The Lamu Port and Lamu-Southern Sudan-Ethiopia Transport corridor is, perhaps, Africa’s most ambitious infrastructure project ever. Spearheaded by the Kenyan government, the plan is vast and calls for the construction of several highways, the building of a number of modern rail routes, the creation of new airports, and the construction of a sea port at Lamu. At the cornerstone of the project is the construction of a resort and deepwater port at the ecologically and historically significant site of Lamu (listed as a UNESCO World Heritage Site) and a proposed crude oil pipeline connecting South Sudan’s oil reserves to the Kenyan port. Thus far, I have only included the proposed oil pipeline, as it is difficult to obtain reliable plans for the totality of the project. You can read more about the project here. For the purposes of this post, the discussion of LAPSSET will focus on the port and pipeline.

Initiated in March 2012, the roughly $25 billion project promises to develop a long-range vision for East Africa. Thus far, the construction of the port is mostly complete and the construction of a series of berths are under way. As far as the highway component of the project, one section is complete and four other segments, connecting Kenya, Ethiopia, and Tanzania are currently under construction. A transmission line connecting Malindi and other coastal locales to Lamu has been completed while other transmission lines are being built from Lamu to Lake Turkana, towards the interior of the country. There are yet more transmission lines being considered and studied for construction as part of the plan.

Why It Matters                                                                                                                                               Aside from the improved standards of living and increased business potential that the project offers Kenya, South Sudan, and Ethiopia, LAPSSET has the potential to transform the way Africans and foreigners view the continent. If the project comes to fruition, or at least mostly, it would be a major victory for self-initiated peace and progress in a region that is better known for its hostility and lack of cooperation. The fact that the project originates from Africa would be a step away from foreign intervention— a welcome and positive change.

More tangible, though, would be the benefits to the fledgling South Sudan. The newly-independent state has suffered from years of exploitation and negligence at the hands of the Omar Al-Bashir government and, as a result, is possibly the world’s least-developed nation. At the heart of the North’s longstanding exploitation was the fact that the majority of Sudanese oil reserves are located in the ethnically-distinct and religiously-diverse South while the ports connecting the oil to international markets are located in the North. As such, the Sudanese government hogged and continues to hog, a disproportionate share of the oil revenues, creating the development disparities visible today.

The LAPSSET project offers the politically-fragile and generally backwards South Sudan an alternative route through which to export their oil. Not only would South Sudan’s participation in this project increase it’s negotiating position with Sudan, but it would engender goodwill among two nations (Ethiopia and Kenya) that supported its hard-fought independence struggle. Not only does LAPSSET have the potential to transform East Africa and set millions on the road to prosperity, but it can weaken aggressive and repressive regimes that oppose American interests.

These projects show much promise both in serving regional economic ends and in promoting democracies and the progress of oppressed peoples in “difficult neighborhoods.”

Case Study: Chile’s Private Social Security

                                                          Above: Running ‘Cause I Can’t Fly

It’s no secret that the United States’ brand of old-age safety net, known as “Social Security” is aging and failing. Due to the changing demographic nature of the U.S. labor force and the American people as a whole, the program is headed for collapse and insolvency. While the exact date of this collapse is hotly disputed, its inevitability is not. Given this situation, solutions are desperately needed and free-market proponents are stepping up to the plate to offer help.            Reformers commonly reference Chile’s privatization of its old-age pension program as a source of inspiration for changes to Social Security. Under the current setup of Social Security, the pensions of retirees are paid for by current workers. Thanks to increased life expectancies, declining fertility rates, and the en masse retirement of baby boomers, the ratio of workers not collecting social security to the number of pensioners receiving benefits continues its steady decline. In addition to retirees aged 64+, approximately 1 million permanently disabled individuals receive social security payments along with spouses and children of disabled or deceased workers.                                                                                                                                                    In 1924, Chile was the first Western hemisphere country to introduce a social insurance scheme that covered retired workers, their survivors, and disabled persons. By 1980, the Pinochet military junta was faced with the failure of this pay-as-you-go (PAYGO) pension system. Taking inspiration from Milton Friedman, Pinochet and his team of “Chicago Boys” transformed Chile’s pension system into the capitalist wonder that it is today.                                                                  In the old system, there were three major branches of the system: one for government workers, one for salaried employees, and one for manual workers. In addition, there were more than 30 other funds for workers in various professions. Each fund had its own particular administrative bureaucracy and set of rules. Some retirees were even allowed to draw from multiple funds. The system also guaranteed a minimum pension to each worker, irrespective of previous contributions or earnings. On top of all that, a worker’s pension payments were calculated based on the earnings from his final 5 years of work, prompting many to under-report their income (and, thus, contribute less to the fund) until those final five years.                                                                                                                           Above: Augusto Pinochet Ugarte

Europeans take note; efforts throughout the 1970’s to prolong the expiration date of this system such as raising the retirement age and limiting pension adjustments to less than the rate of inflation, did little to assuage the nation’s economic crisis. The new system, begun in 1980 operates on the principle of choice by giving workers options at all stages of the process.           Under the current Chilean model, a worker chooses which private AFPs (Administradoras de fondos de pensiones) he wants to manage his individual “nest egg” account that will fund his pensions later in life. Each worker may have only one such account with one AFP. Each worker is required to contribute 10% of his monthly earnings to the account. This mandatory contribution is tax-exempt while any additional contributions, which are permitted up to a predetermined amount of money tied to the CPI, are taxed. Participation in the system is completely optional for self-employed workers.                                                                                                                                   If the worker so desires, he may set up additional savings accounts with the same AFP. Workers may make up to four withdrawals from these accounts per year and may draw from these accounts as well as from the primary account to finance retirement. Since the government does not officially recognize these accounts as retirement contributions, the money is subject to income tax.                                                                                                                           A worker may retire early if his account has the funds to support a pension that equals at least 50% of his average annual indexed wage over the previous 10 years and at least 110% of the government’s minimum old-age pension. If a worker retires at the normal retirement age (65 for men and 60 for women), he can choose to make scheduled withdrawals from his account, purchase an annuity, or form some combination of the two. Whatever he decides, his pension payments will be subject to income tax.                                                                                                                                                                                                                                                                                                                                                               The privately-operated AFPs, are setup to manage a single pension fund comprised of a collection of workers’ accounts. Any organization of shareholders may form an AFP except banks.  AFPs are bound by stringent regulations and expectations. Originally permitted to invest only in low-risk domestic ventures (e.g. government bonds, time deposits, etc.), AFPs may invest in various international ventures, private stocks, company bonds, mortgage loans, and more.             Pension funds are obligated to maintain a ROI (rate of return on investment) between maximum and minimum ROI rates tied to the average 12-month return for all pension funds. In order to protect individuals’ retirement accounts, pensions funds are required to abide by a 1% investment ratio, whereby 1% of the fund’s value is held in the form of reserves.                                     Should the ROI of a pension fund exceed the average ROI of all pension funds by 2 percentage points or 50%, whichever is greater, the excess profit must be transferred to a profitability reserve. If the ROI of a pension fund falls below the average ROI of all pension fund by 2 percentage points or 50%, whichever is lesser, funds from the investment or profitability reserves must be transferred to the pension fund to make up the difference.                                           If an AFP with a below-average ROI fails to make up the difference within 6 months, the government takes control of the AFP, pays the pension fund, and then assigns the accounts to other AFPs. Of course, the individual owners of the accounts may choose to which AFP they want to move their account.                                                                                                                                                                         Above: Profitability of Chilean AFPs vs. banks

There is a provision to protect people in the unlikely event that their privately-managed retirement funds don’t pan out when it’s time to retire. The government steps in and pays a retiree a minimum pension if the individual is of retirement age or older, has paid contributions for at least 20 years and either exhausts his retirement savings or whose accrued savings can’t support the minimum pension payments as set by law.                                                                               As far as the effectiveness of the Chilean model, the proof is in the pudding. According to the OECD, the average real ROI for private Chilean pension funds was 6.1% between 2000 and 2005 while it was 1.5% in the United States. By 2005, Chile’s pension fund assets, the money available to pay out to pensioners, was equal to 59% of the value of GDP, a figure well above the average of 15% for Latin America. That statistic is a testament to the wisdom of the Chilean reforms for two reasons: 1) it demonstrates a remarkable turnaround for a retirement system that was nearly bankrupt only 25 years prior and 2) the figure is comparable to those of more advanced economies such as Canada(60%) and the Australia (69%). If you trust the figures from Chile’s Superintendency of Pensions, this success is generally pretty evenly spread among the various pensions fund.                                                                                                                                                           While Chile’s system is far from perfect, as evidenced by its severely fluctuating ROI rates from year to year and the need for reforms in 2008, it’s private model certainly has turned things around. The U.S would be wise to learn from, not duplicate, the Chilean model by implementing more of the personal choice and private oversight of pensions that has worked so well for Chile.

The Lone Star Model Part II: Criminal Justice

“The Lone Star Model Part II: Criminal Justice” seems an unlikely title for a post given Texas’ image as a hawkish, gun-toting “wild west” police state. Contrary to the heavy-handed, disciplinarian image of the state that consistently conducts the most inmate executions, Texas has reformed its justice system to be more clement and sensible.                                                           Don’t be mistaken though, the State of Texas still maintains its reputation for strict enforcement of the law and devotion to public safety. The reforms that have been enacted in Texas are carefully-calculated measures that don’t throw the baby out with the bath- water. The reforms are every bit as humanitarian as they are cost-effective, resulting not only in a fairer system but one that is less burdensome and cheaper to maintain.                                                            The beginning of such reforms came in 2003 with the passage into law of HB 2668 which stipulates that first-time drug possessors found with less than 1 gram of a controlled substance or less than 1 pound of marijuana be sentenced to “community supervision,” legal jargon for probation. The change not only saved largely non-violent offenders from horrifying prison experiences and the stigma of a criminal record with prison time but it may have saved the state roughly $117 million in the first 5 years of implementation. Granted, that figure is an estimate of the potential cost-savings made at the time of the bill’s passage into law. Still, the savings in taxpayer money alone is a compelling endorsement of the law not to mention the benefits reaped by the convicts, many of them young, one-time offenders.                                             According to the Bureau of Justice Statistics Texas’ total incarceration rate declined from 757 per 100,000 population in 2003 to 636 per 100,000 in 2013, representing ten consecutive years of decline. The Texas legislature’s 2007 Justice Reinvestment Initiative marked an important turning point in corrections spending priorities; the initiative opted to devote $241 million to a variety of treatment and rehabilitation programs aimed at reducing recidivism rather than spending $523 million for new prison construction. Between 2006 and 2008, the parole approval rate increased slightly while at the same time the parole revocation rate decreased by 25%, resulting in more parolees and fewer parolees losing their parole and being sent back to prison.                                                                                       

The legislature of 2007 passed S.B. 103 which diverted youths convicted of misdemeanors away from the agency that handles juvenile delinquents, the Texas Youth Commission. Additionally, the law lowered the maximum age of persons permitted to be held in such institutions from 21 to 19 years. Importantly, the bill allocated money to county organizations that serve and treat misdemeaning youths through a variety of approaches other than incarceration. The result? During the period lasting from 2000 to 2010, the youth population incarcerated in all facilities (both private and public) dropped by 37%. Texas’ 2010 youth incarceration rate of 139 per 100,000 population was 34% lower than the U.S average of 210 per 100,000.                                              In 2009, the state established the Commitment Reduction Program, further realigning spending priorities toward community-based alternatives to incarceration at the county level. Importantly, this legislation is incentive-based, that is, the most cost-effective and recidivism-reducing programs earn the state’s funds. In 2011, the legislature devoted another $39 million to the program. Also in 2011, S.B. 653 consolidated the Texas Youth Commission and the Texas Juvenile Probation Commission, to create the Texas Juvenile Justice Department. This streamlining is not only more efficient in carrying out necessary functions and using funds, but it makes for a simpler, more transparent juvenile justice system. According to the Texas Department of Justice, arrests of juveniles declined by 27% during 2007-2011 and the incarcerated juvenile population decreased by 62% in the same period.

Texas’ private-sector sensibilities are also playing a role in this transformation. The Prison Entrepreneurship Program (PEP) was founded in 2004 by former New York financial professional, Catherine Rohr to prepare Texas inmates for re-entry into society. The faith-based program intentionally recruited inmates with histories in drug-dealing, hustling, and gang leadership who wanted to reform their lives. The program immerses the prisoners in an MBA curriculum, introduces them to business mentors, life-skills coaching, sets them up with a job placement program, and provides them with a re-entry care package.                                                  An independent study by Baylor University, found that 3-year recidivism rates for a control group of males released from Texas prisons was 24% compared to 6.9% for PEP grads. Some other key findings include PEP graduates’ 95% employment versus the national ex-con employment rate of 50%; 20% of PEP grads were on public assistance as opposed to 45% of the general ex-con population;  The study found the program’s ROI (return on investment) by taking into account the costs of re-incarceration prevented by the reduced recidivism of graduates, the taxes generated by the newly-minted entrepreneurs, the cost savings from a decreased reliance on public assistance, and the increase in child-support payments. The study found the ROI for every dollar invested in PEP to be $0.74 after the 1st year of a graduate’s re-entry, $2.07 after 3 years, and $3.40 after 5 years.                                                                                                                           While PEP is certainly the most successful rehabilitation prison program in Texas, other rehab programs, ranging from faith-based to substance-abuse correction to motivational speaking directives have an important impact on reducing recidivism and improving the outcomes of ex-convicts as they return to free society.                                                                                                            The best part of all these reforms? Crime rates continue on their roughly 20 year nationwide descent. In 2000 the violent crime rate in Texas was 544.8 per 100,000 population. In 2010 the violent crime rate in Texas was 450.6 per 100,000 population.

 

Common-Sense Solutions: Democratizing Primary Care

While often presented as a single issue, “healthcare reform” is really an umbrella term for a plethora of issues and proposals that all deal, tangentially or directly, with the experience of healthcare in this country. I won’t get into the meat-and-potatoes issues in this post but I will present some prudent changes that most people should and would support.

1.) Abolish Certificate of Need (CON) Laws                                                            

                                                                               SourceNational Conference of State Legislatures                                      

Certificate of Need Laws live up to their acronym: CON. In 1964, New York enacted the first of such laws that requires the state government to determine if there is a need for a new hospital or nursing home before approving the construction of new facilities. The rationale behind these laws was the reigning in of healthcare costs by limiting capital expenditures on health care. Others have contended that the true motive behind these laws is the protection of existing hospitals from competitors. A federal mandate in 1974 required all 50 states to enact CON programs in order to receive funding through the Public Health Service Act. In 1987, the federal mandate was repealed and a wave of states dismantled their CON programs. As illustrated in the above map, 14 states no longer have CON laws.  In states with CON laws still on the books, it can be difficult to nearly impossible to open up new facilities or expand existing ones, burdening the general public with a lack of choice, options, and availability in healthcare.

2.) Allow Nurse Practitioners (NPs) to expand their repertoire                                                                      Interactive Nurse Practitioner Scope of Practice laws chart                                                                                           SourceBarton Associates

According to the American Association of Nurse Practitioners, a Nurse Practitioner (NP) is, in most cases, a primary-care clinician trained on the nursing model as opposed to the physician model. While some NPs do specialize, most provide the fundamentals of care as directed by the nursing model. NPs undergo years of training and must obtain a master’s or doctoral degree and have advanced clinical training. NPs are not to be confused with your average LVN or RN nurses. Many argue that NPs are capable at delivering routine care to patients in a holistic, cost-effective manner with high levels of patient satisfaction. With a looming shortage of physicians and a growing demand placed upon the healthcare infrastructure due to an aging population and the effects of Obamacare, NPs may offer a practical solution. It takes less time and less expense to train an NP than a general practice doctor and it is cheaper to hire and maintain an NP. In my opinion, NPs are a perfect fit because, despite spending less time in training than doctors, more of their training is pertinent to treating the whole person and addressing his everyday health concerns.                                                                                                                                  Still, some groups such as the American Medical Association  oppose expanding the abilities of Nurse Practitioners, ostensibly because they lack the same level of education as physicians. The resistance from the AMA is not surprising as it primarily represents the interests of physicians and doctors. The image posted above links to an interactive chart that illustrates the powers of NPs by state. Some of the battles center on allowing NPs to open up independent practices, order physical therapy, prescribe medications, and sign death certificates. It should be re-stated that patients who see NPs don’t report inferior quality of care. The following excerpt comes from a  2012 brief released by Health Affairs:

Studies comparing the quality of care provided by physicians and nurse practitioners have found that clinical outcomes are similar. For example, a systematic review of 26 studies published since 2000 found that health status, treatment practices, and prescribing behavior were consistent between nurse practitioners and physicians.

What’s more, patients seeing nurse practitioners were also found to have higher levels of satisfaction with their care. Studies found that nurse practitioners do better than physicians on measures related to patient follow up; time spent in consultations; and provision of screening, assessment, and counseling services. The patient-centered nature of nurse practitioner training, which often includes care coordination and sensitivity to the impact on health of social and cultural factors, such as environment and family situation, makes nurse practitioners particularly well prepared for and interested in providing primary care.

3.) Enact comprehensive, common-sense tort reforms 

 SourceB2C

     At the heart of the debate over medical malpractice is the impact of non-economic damages on the cost of doctors’ liability insurance premiums. Non-economic damages is the term used to refer to the  damages awarded to a plaintiff for the “pain and suffering” caused by the alleged medical malpractice. This is a highly subjective cost as it cannot be measured by lost wages, medical expenses, or necessary care costs. In recent years, headlines have been dominated by tales of plaintiffs being awarded outrageous sums of money in frivolous lawsuits. The result of this indiscriminate awarding of non-economic damages has the adverse effect of forcing insurance companies to raise the premiums that doctors pay for liability insurance. Additionally, doctors  are forced to practice “defensive medicine,” the practice of ordering unnecessary tests or procedures to protect the doctor from the possibility of being sued by patients. These unnecessary tests and procedures further drive the costs of healthcare up.              In response to this onerous burden on good doctors (the majority, I might add), a number of states have placed caps on the size of non-economic damage awards that can be given to a plaintiff in a medical malpractice suit. The above infographic shows states like Texas and California with the tightest caps. Texas, for example, caps non-economic damages at $250,000 per individual plaintiff. In 2003, Texas passed the Medical Malpractice and Tort Reform Act  (HB4) placing the $250k cap on non-economic damages. Other distinctive features of Texas tort law include provisions which allow government entities to be sued (TX Tort Claims Act), forbid the awarding of damages to plaintiffs who have not demonstrated economic losses (no statutory damages), and award negligence claims only if the plaintiff’s liability is 50% or less (comparative negligence).

                                                SourceTexas Medical Board 

Though late to the reform movement, Texas has benefited tremendously from its reforms in a short period of time. According to the Texas Hospital Association (THA), there were 163 actively-practicing physicians per 100,000 population in 2002 in Texas. By 2012, the figure had risen 194 per 100,000 population. More importantly, the growth in practicing physicians per capita in Texas was greater in the period following the 2003 tort reform than in it was in the period preceding the changes. From 2002 to 2012, number of Ob-Gyns per 100,000 increased by 3%, surgeons per 100,000 by 4%, and physicians per 100,000 by 19%. The most deprived and underserved communities in Texas benefited greatly from the increase in doctors. Large swathes of the Texas panhandle, Rio Grande Valley, and various inner-city enclaves witnessed an influx of medical practices, both general and specialty, never before seen.

                                           SourceTexas Medical Board

According to the Texas Medical Liability Trust, the largest liability insurance carrier in the state, the average premium for has decreased by 56.7% between 2003 and 2012.  Doctors and hospitals have reported re-investing the savings in expanding and improving the quality of care they offer. Texas is far from the only medical malpractice success story but it is the most recent example of how a large, diverse polity can successfully pull off tort reform, an example the rest of the U.S would be wise to follow.