University of Pennsylvania Professor Comments on Survival of Public Trust

In my Penn Arts and Sciences Magazine, Fall/Winter 2008. Professor Cristina Bicchieri addressed the issue of public trust. "When you deposit your money in a bank, you trust the bank not to fail. When you vote, you trust the system to be fair and efficient, this is what we call 'impersonal trust.' Reciprocating trust means doing what you're expected to do--following the agreed upon rules." When these implicit agreements fail, she warns, says author B. Davin Stengel, societies may face systemic collapse.



Bicchieri: "Public trust is a cultural phenomenon that takes a long time to emerge and as we're seeing now, it can be very fragile.



In response to a question asked by interviewer Stengel, Bicchieri said, "I have done several computer simulations of the evolution of impersonal trust and what they show is that impersonal trust can only survive in a society of punishers; that is, if a society includes a majority of people who punish those who do not reciprocate, than trust and reciprocation will be quite common. In terms of that's happening now in the United States, the lesson may be that people must be sure that somebody will be punished. Americans who are facing foreclosures or shrinking 401 k (s) feel very bad when they hear their government saying that they don't really know what happened, that they are bailing everybody out and so, I think in cases like this a good way to rebuild confidence is through a big show of punishment of those individuals who violated public trust."

In my opinion, Bicchieri's credentials and credibility lend support to the growing public pressure to see indictments of the handfull of AIG executives who facilitated innumerable risky loans, of buyers who lied about higher incomes, of mortgage representatives who encouraged them or looked the other way, of appraisers who caved under pressure to produce inflated property appraisals and of escrow agents who packaged and sold loans without confirming buyers' stated credit profiles.

Public trust and the waning of it, may only seem like some issue for philosophical debate, not directly relevant to the specifics of what our legislators are doing (or not doing) for us. Not so. Public trust or the loss of it, can be seen on a regular basis currently, in peoples' frowns, worry lines, cynical scoffs, crabby negative attitudes, and refusals to part with their money.

Until there is some show of punishment of those who violated the public trust the malaise will continue.

What Exactly Was That That Happened at the First time in 50 years Televised Meeting of the House-Senate Appropriations Committee?

I'm new at this, so I may not have got it all right, but as a watcher of the actual televising Wednesday night of the House-Senate Appropriations Committee meeting, this is what I noted:


Senator Inouye chaired the meeting, at some point announcing, "There will be no amendments presented in this meeting." I thought this was curious, because I had understood that the purpose of the meeting was for selected Republicans and Democrats to "tweak" the bill that had just been passed by the House. This tweaking, I thought, was to be accomplished through debate and amendments to the House bill, so that the resulting bill out of Appropriations could be a compromise one.

What struck me as odd was that most of the attendees were Republicans Where was an equal number of of Democrats? And why were amendments not allowed? Don't those who show up get to sway the vote?

A few days later, a FOX news reporter mentioned that on Wednesday, while Republicans showed up to debate and amend, the Democrats never showed. They were "holed up" behind closed doors.

So apparently a House-Senate Appropriations Committee meeting never was, dispite the fact that something loosely described as one was televised.

So much for transparency.

Senator Ensign Requests Key Lawmakers Debate on House/Senate Compromise Stimulus Bill Be Open to the Public

Debate on the House/ Senate Compromise Stimulus Bill by key lawmakers apparently will not be open to the public via CSPAN, as last week's was. This next round of debates will be behind closed doors. Although this may be current protocol for Congress, given the current economic crisis the US is facing and President Obama's pledge of greater transparency in government, Senator Ensign's request makes sense. I believe that Americans are currently paying closer attention than ever before to how their government operates. Decisions made behind closed doors in the absence of a public hearing will tend to lead to more questions, frustration and cynicism at a time when Americans need to believe that our representatives are acting on behalf of all of us and not out of loyalty to their specific constituents and themselves.

CSPAN The Senate Debate of the House Stimulus Bill in Real Time

All day sessions of Senators' presentations pro and con, without edit--no O'Reilly or VanSusteren selective sound bites, (although I enjoy their shows for different reasons).

Here is what stood out to me as notable from the week's hearings:


The Coburn Amendment to strike tax breaks for the film industry -- approved.

The Coburn Amendment to allow bonus depreciation for the film industry -- approved.

Did I get this right ? Seems as if bonus depreciation would be a tax break.



The McCain Amendment giving the Stimulus Package a chance to work, but after two full quarters of demonstrated growth in the GNP, some new Bill provisions would sunset, and Congress would begin working toward a balanced budget-- defeated.



The Ensign-Boxer bi-partisan amendment on "repatriated funds," which would have offered a tax rate lower than the going US business based rate of 35% to get off shore US company profits back in US banks and working to back more US jobs -- defeated. Apparently defeated on the basis that it was just not fair to offer a tax rate lower than what US companies currently pay, even if it meant instant "found money" for the US economy.



But the Dorgan "Buy America" amendment which McCain opposed, quoting President Obama as having said it would undermine international trade agreements and should be voted down, was passed.



The Vitter amendment referred to a "laundry list" of specifics I did not find in reading the website version of the House Bill:

--$20 million for removal of small and medium size fish barriers (where? in a specific state?)

--$150 million for honeybee insurance

--$400 million to prevent STDs

--$100 million for the 2010 census taking

--$13 million for Amtrak subsidies (which I think is already a yearly regular budget item)

--$75 million for state department training

--Homeland consolidation and streamlining at a cost of $248 million (is this an oxymoron ?)



The Coburn amendment highlighted some additional items, saying that the prohibitions on these, which were in the House bill, were not in the Senate version:



--funding for renovations of museums, swimming pools, aquariums, golf courses, theaters, highway beautification and art projects

-- a Rhode Island tree planting project

--a Chula Vista, CA dog park

-- $100,000. for an Alameda, CA skate park

-- Rhode Island zoo renovation

--$6.1 million for corporate jet hanger renovations for Arkansas

--$ 500,000 for a Dayton, Ohio golf course

--$50 million for a Las Vegas Museum


Would these be called "earmarks" ?

The website version of the House bill states: "There are no earmarks in this package."


Coburn's amendment to prohibit the above -- tabled as of today (Thursday, February 5)


Coburn's amendment requiring competitive bidding on ALL governmental projects -- defeated.


Brasso's amendment to require new projects to begin within 9 months rather than taking months, years to get permitted-- defeated.


The Martinez amendment to provide insurance to protect loan servicers currently stalled in their reworking of toxic loans by the fear of law suits against them (by lenders they serve?) -- withdrawn.


The Bunning amendment to suspend tax increases on social security benefits -- defeated.


The Harkins amendment to give a $10,000. subsidy (ie mandatory trade-in credit on your old auto) for buyers of new, cleaner, more efficient cars assembled in the USA-- withdrawn.

What passed?

--$15,000 tax credits for home buyers

--$2 Billion additional aid for state housing finance for affordble housing, which is now stalled because credit is stalled.

--an increase from $2 million to $5 million for loans to small businesses


And the bulk of the House bill remains in tact.


The purpose of my blog is essentially to clarify and understand for myself, events I consider important to understand as a voter. If it informs you in some way, if I have got something wrong, or if you wish to have a friendly debate, feel free to comment.

Inauguration 2009: Awesome and Inspiring

Regardless of whom you voted for, you would have to be a flatliner not to feel uplifted by the
warm, high-spirited jubilance of this day. A putting aside of politics as usual, a sense of "let's lighten up," for today and savor the celebration of America, its reverence for the will of the people and the rule of law, its tolerance of diverse religions and ethnicities ; and,today, its arms-open-wide joining together of all Americans.

I want the celebration to last for weeks, to last forever. I want the promises for positive change, especially universal health care, made by then president- elect Obama, to begin tomorrow

I applaud all the members of the U.S. security organizations who protected our outgoing and incoming leaders from harm on this day and who will continue to do so from this day forward.

You are my personal heroes.

So called "scapegoating" may be a smart way for prosecutors to get to the big timers guilty of mortgage fraud

An article entitled, "On the Trail of Mortgage Fraud," by Don Thompson of the Associated Press, was forwarded to me by a friend. The article is worth reading for background on the current "whys" as to how the financial melt down came about. However, I take issue with Michael Cardoza, the San Francisco attorney representing one of those charged (with fraud, I believe) in central California. Cardoza, as quoted by Thompson, complains, "Now they're just picking off the little people...They're doing scapegoats is what they're doing." While, Cardoza implies, "... the people on Wall Street walk."



Correct me if I'm wrong, but I think, not too many years back, the higher ups at Enron were ultimately sacked, not as a result of prosecutors calling before Congress, Enron corporate level officials (who testified so as to protect themselves and each other--remember Jeff Schilling, who was "out of the conference room" when crucial decisions were put on paper and signed off on?), but by the prosecutors who started with lower level employees, who might have witnessed improprieties of their bosses and had more to gain by coughing up information that would get them out from under the fire. It is my understanding that this kind of information solidified the cases against the higher ups.




So Mr. Cardoza can cry no fair picking on my client, that's his job; but in rebuttal, I would point out that, based on the Enron process, starting with "scapegoats,' and working up to corporate level S.O.B.s would appear to have merit.

Politics By Barney Frank

Last Tuesday, December 9, I watched the House debate and vote on the bill to fund automakers 14-15 billion dollars in financial support (HR 7321). About midway in the debate, Rep. Frank rose to encourage the passing of the bill and also to recognize a recent amendment to the bill, which he also applauded. This Green Amendment stated that although financial institutions had promised to use the first half of TARP funds to primarily make new loans to help homeowners facing possible foreclosure, these financials had indeed not yet done so, but instead, were still holding onto the money or using it to buy into new bank mergers. A disappointing show of faith, a lack of follow-through. The Green amendment proposed that before further funding to these financial institutions would be approved, they would need to show that they had in fact, made an appropriate number of new loans to avoid possible foreclosures, with the first TARP funds awarded.



So, Frank implied, you members of the House, can hold them more acountable for the remaining TARP funds if you vote for the Green Amendment, AND, since you should vote for this stellar mandate on accountability, then you must of course vote FOR 7321 to fund assistance for the automakers. (ie If you want the one, why would you vote against the other?)

This happens, I'm sure, on a regular basis in Congress, but it was the first time that I could actually watch the "gotcha" in politics in real time.