What’s
Wrong Today:

“There are no facts, only interpretation” – Susan Sontag

Last week, we talked about two Supreme
Court decisions, one with a terrible impact and one with a useful impact on
America. The useful and most recent of those decisions, Brown v. Board
of Education, was handed down 60 years ago. It was a 9-0 decision. Despite
the unanimity, there was sustained talk of impeaching the Chief Justice of that
court, Earl Warren, who had been the Republican nominee for
VP in 1948.

While we have had our share of
controversial decisions in the past 60 years, the real issue has been a shift
to voting by the justices along party or ideological lines. Adam Liptak in the NYT reported
about polarization of the Supreme Court of the US (SCOTUS): (emphasis by the
Wrongologist)

Liptak
goes on: (emphasis by the Wrongologist)

OK,
he forgot Bush v. Gore
in 2000. By contrast, in just the last three terms, there were five major
decisions that were closely divided along partisan lines: the ones on the Voting
Rights Act, campaign
finance, arbitration,
immigration
and strip-searches.
In the current term, last month’s campaign
finance ruling and the Town of
Greece decision on legislative prayer fits the same pattern.

Liptak
reported earlier about a study
conducted by the legal scholars Lee Epstein, Christopher Parker, and Jeffrey
Segal, which showed that Supreme Court justices betrayed “in-group”
bias in their First Amendment jurisprudence — that is, they were more likely to uphold the First Amendment claims of defendants
whose speech they liked:

 

Importantly,
this confirms recent
polling by Greenberg Quinlan Rosner for Democracy Corps which showed that only
about a third of Americans believe SCOTUS decides cases based on the law alone. According to the poll, Americans believe the Supreme Court justices
are political, letting their personal views sway their decisions — an opinion
held across party lines. The poll tracks with other polling from Pew
and Gallup
showing the court’s favorability at historic lows.

Majorities
of Republican, Democratic, and Independent respondents all told the pollsters
that “the current US Supreme Court justices often let their own personal or
political views influence their decisions” — 54% of Democrats, 62% of
Republicans, and 63% of Independents, for a total result of 60% of respondents
agreeing with the statement.

Only
36% of respondents agreed that “the current US Supreme Court justices usually
decide their cases based on legal analysis without regard to their own personal
or political views.”

Specifically
regarding the Supreme Court’s Citizens United campaign finance decision, 80%
of Americans opposed the decision and 18% supported it. Although Republicans
(72%) were less opposed to the decision than Democrats (82%), and
Independents (84%) were most opposed to the decision.

The
polling is based on a survey of 1,004 Americans over the age of 18, conducted
from April 16–24. It has a margin of error of 3.1% at the 95% confidence level.

The
Week reported:

The
Week indicates that the court’s four most conservative members are among the four most conservative
justices to have served on the Supreme Court since World War II, with the
court’s most liberal current member (Ginsburg) well to the right of Warren Court-era liberals like William
Brennan and Thurgood Marshall. It’s not clear, however, that both parties have
an equal understanding of this: While the Bush administration saw the
confirmation of unapologetically conservative justices like Roberts and Alito,
the Obama administration has worked to nominate those — Sotomayor and Kagan —
who are considered fairly moderate on the liberal spectrum.

Moreover, it is
nearly certain that any nominee selected by a Republican president would be
more consistently conservative than the court’s current swing vote, Justice Kennedy.

The
result going forward is likely to be lurches between periods of consistently
conservative and liberal outcomes rather than producing decisions that tend to
fall within the center of public opinion (as has been the historical norm).

Says
The Economist: (emphasis by the Wrongologist)

Nor
should the contraceptive mandate for employers in Obamacare stand or fall
depending on the religious and ideological makeup of the Supreme Court.

Yet, you shouldn’t
be surprised if the Hobby
Lobby and Conestoga
Wood cases are decided on apparently ideological (religious) lines
in the next few weeks.

It
is obvious to anyone with eyes and ears that the Supreme Court today is an
adjunct of the Republican Right. But we pretend that it is an institution
devoted to an honest and impartial adjudication of law. But, ordinary people know 9
times out of 10, how the Supremes are going to vote.

Immediately
after the Constitutional
Convention, Benjamin Franklin was asked about what had been decided. He replied that the
constitutional convention “gave you a republic, if you can keep it.”

That
“you” means “we”, and not our federal judges.

If
we don’t elect presidents and senators who are committed to keeping our
constitutional republic, then we can’t expect the judges they appoint to keep
it for us, either.

We
live now with dishonest politics, disinformed, and disinforming media,
disconnected cultures, disjointed economics, dysfunctional communities and
disrespected citizens. Repairing our country will require adding a moral
foundation to our politics.

The
US has become, if anything, meaner, smaller, nastier, and more contentious since
the 1980’s. We see push back against civil rights, the fracturing of the middle
class, the overweaning power of the oligarchy, and the radical right’s burning desire to
inflict pain on the poor, who apparently are transgressors against the American
Ideal.

Should
we talk about Hillary’s health? OK! She hit her head. Is she too old? Was
Reagan too old? Was W. too incurious? Was Bill too needy? Was Gore too
arrogant? Is Obama too arrogant? Too aloof? Too tyrannical? Too much a
pushover? Take
your pick, anyone can play! And everybody does!

Pay no attention to these toxic
buffoons.

Policy
questions? Why? You can’t have policy questions if the legislature is
paralyzed! Is this a form of ideological paralysis, or strategic paralysis? Ooh
wait! Strategy! Now let’s talk about strategy instead of policy! Is getting
your way by fooling the electorate a BAD thing, or a GOOD thing? Discuss!

You
must keep score! Who’s on first? Where are we? My head hurts, I must have hit
it on something.

Pay
no attention to toxic buffoons like Rove:

Or toxic buffoons like Marco Rubio or other Deniers:

Or, toxic buffoons like the “Select” Committee on Benghazi:

Or, buffoons in the media who keep selling the same thing:

Or, buffoons who stand on principle:

Or, bureaucrat buffoons who cook the books:

What’s
Wrong Today:

The
anniversary of two Supreme Court decisions that changed America occur this
week, and neither were by John Roberts or Antonin Scalia.

The
first decision did not change the country for the better. That decision was Plessy v. Ferguson. It was decided 118 years ago, on May 18, 1896. The
decision set the precedent that “separate” facilities for blacks
and whites were constitutional as long as they were “equal.” The
court interpreted the 14th Amendment in such a way that equality in the law
could be met through segregated facilities.

The
“separate but equal” doctrine was quickly extended to cover many
areas of public life, such as restaurants, theaters, restrooms, and public
schools. Unfortunately, the separate facilities and institutions accorded to
African Americans were consistently inferior to those provided to
the White community and contradicted the vague declaration of “separate
but equal” institutions issued after the Plessy decision.

Plessy is regarded as one of the most
notorious Supreme Court rulings in US history, often grouped with Dred
Scott v. Sandford (which held that people of African descent are not
protected by the Constitution). But
where it took a civil war and subsequent Constitutional amendments to overturn Dred
Scott, Plessy was reversed only after another Supreme Court decision,
Brown v. The Board of Education of Topeka, Kansas.

This
week (May 17) is also the 60th anniversary of the Supreme Court
decision in Brown v. The Board of Education. In Brown, the Court found that
separate is inherently unequal – even if the school facilities and
teachers are of equal quality – because
the segregation policy itself is usually interpreted as denoting the
inferiority of the [African American] group.

Ironically,
announcement of the Brown decision came on the 58th
anniversary of Plessy v. Ferguson, the very case Brown overturned.

After
Plessey, Jim Crow laws were passed
throughout the South. They established separate facilities for Blacks and
Whites in everything from schools to restrooms, drinking fountains to witness
stands in courtrooms. African American community leaders who had achieved political
success during the Reconstruction era lost any gains made when their voters
disappeared.

Historian
Rogers Smith wrote about the Jim Crow laws in Civic
Ideals:

The
Civil Rights movement during the first 50 years of the 20th Century
accepted this policy of “separate but equal” in its struggle to gain access for
people of color into the society. They fought in many communities for equal pay
for teachers and for equal school facilities. It fought for equal libraries,
recreational facilities, and health services.

For
more than 50 years, Plessy defined
the terms of that struggle.

Although
many believe that the case of Brown v.
Board of Education actually overturned Plessy,
the Cornell Law School reports that the
opinion of the case clearly stated that Brown
found Plessy to be inappropriate only in the area of public education.

Plessy v. Ferguson was never overturned by the Supreme
Court; codified and legal segregation was finally banned by the Civil Rights
Act of 1964.

For
some, the Brown decision allowed proponents for better opportunities for
Blacks to fight for positive gains and full equality. But the fact that there
were few means to implement these decisions became clear when it became obvious
that few gains were achieved. By 1960, a new student-led Civil Rights movement
was formed.

Where
the Supreme Court’s Plessy majority
ignored a plea for empathy and was unwilling (or unable) to consider the case in
its full social and historical context, the Supreme Court in Brown listened, and offered an effective
rebuttal to Plessy’s reliance on abstractions. In Brown, the Supreme Court expressly grounded its reasoning in the world
in which it, and the parties lived.

In
other words, the reasoning in Plessy and
Brown can be divided along the lines
of context and empathy, with Plessy a
failed decision made in an intellectual vacuum, and Brown as the rejection of judicial decision-making in a vacuum.

Sound
like today’s Court to you?

There
will be millions of words analyzing the Brown decision this week. Some, like
the Wall
Street Journal see a triumph:

Others
see an unfinished job. The WaPo’s WonkBlog
reports
that 60 years on, Brown v. Board of Education has largely yielded parallel
progress and disappointment:

WaPo
says that since the 1970s, integrated schools have actually
been disappearing, while residential
racial segregation in the US has
steadily declined, segregation among school-aged children has increased. So, in
the communities where they live, black and white children, as well as the poor
and non-poor, are more isolated from
each other than adults in the US population at large.

Further, UCLA’s
Civil Rights Project report, Brown
at 60 shows that relying on Brown
may not be enough:

And
it’s no longer just a black-and-white issue:

• Latinos
  are now the largest minority group in public schools, surpassing blacks. And
  about 57% attend schools that are majority Latino

• In
  New York, California and Texas more than half of all Latino students go to
  schools that are 90% minority or more

• The
  South now is the least segregated section of America. Outside of Texas, no
  Southern state is in the top five in terms of most segregated for black students

• In
  New York, Illinois, Maryland and Michigan black students attend schools where
  90% or more are minority

While
racial discrimination remains a factor, other forces are in play. Educated
parents with means have flocked to suburban districts and schools with the best
reputations for decades. In the South, many school districts encompass both a
city and the surrounding area, and that has led to better-integrated schools.

Still,
around the country, only 23% of black students attended white-majority schools
in 2011. That’s the lowest number
since 1968, despite the WSJ’s
feel-good thinking.

At
the same time, there’s been a demographic change in public schools. Between
1968 and 2011, the number of Hispanic students in the public school system rose
495%, while the number of black students increased by 19% percent and the number
of white students dropped 28%, according to the Education Department.

Segregation
will always exist.

Some
segregation today is self-imposed. Some occurs because of the end of busing to achieve
racial balance. Some is driven by economic circumstances.

58
years after Plessy, the Brown decision was a
triumph for a civil society.

Today, it hardly seems to have been enough for our
minority student populations.

What’s Wrong Today:

The level of ambivalence in Europe regarding what to
do about Ukraine and Russia’s actions continues to grow. Bloomberg reported that the EU added
13 people to its list of sanctioned Russians and, for the first time, added a
few companies. However, the companies were two Crimean energy companies that were
expropriated from Ukraine by Russia.

Are these actions proof that the EU is ready to
endure much of the self-inflicted pain that effective economic sanctions against
Russia would involve?

Not really.

French President Francois Hollande confirmed
on Monday that France will sell to Russia two Mistral
Class helicopter carriers worth €1.2 billion ($1.64 billion). You might
have thought that this sale would have been canceled, since the vessels enable
Russia to quickly deliver air power and tanks to potential battle zones in the
Black Sea area, (think: Odessa, Moldova and Georgia). In fact, the second
carrier is named “Sevastopol”, after the Crimean seaport. Russian sailors will start
training on board the first ship next month, and will take delivery in October.

France
24 reported that, despite tensions between Russia and the West reaching
their highest point since the end of the Cold War, French President Hollande
invited Vladimir Putin to attend the commemoration of the landing at Normandy by
the allies on June 6. Russia’s ambassador to France, Alexander Orlov:

France 24 quoted President Hollande:

Hollande said in an interview with France 2 that the Normandy
landings were only possible because of the Soviet Army’s effort in the east, while
French Defense Minister Jean-Yves Le Drian said:

Bloomberg quotes
German Chancellor
Angela Merkel: (brackets by the Wrongologist)

The June 6 commemoration will mark the first time
Putin and Western leaders will come face-to-face since the outbreak of the
crisis in Ukraine. Mr. Obama will be at the Normandy Commemoration, but Josh Earnest, a White
House spokesman, said there were no plans for Obama to have a separate meeting
with Putin.

It may be appropriate for the parties to separate
the war commemorations of WWII from the current geopolitical conflict, and it
seems that the US was in agreement about Putin attending the ceremonies.

But the Ukraine situation continues: On Tuesday, days
after Ukraine received the first $3.2 billion tranche from an International
Monetary Fund (IMF) aid package, Russia’s Gazprom sent Ukraine a $1.6 billion bill for pre-payment of June’s gas deliveries, at $486.50 per
thousand cubic meters (the highest in Europe, and up from $268.50 before
Ukrainian President Yanukovych was deposed). Failure to pay, Gazprom said, will mean
that supplies will be cut off starting June 3.

Mr. Putin says Russia wants to see Ukraine’s future
resolved through dialogue, that it didn’t want Sunday’s independence referendum
in the self-proclaimed Donetsk People’s Republic, and that it is withdrawing
troops from Ukraine’s border. But, he then endorsed the referendum results, and
hasn’t moved his troops away from the boarder.

So, if we look at actions, rather than just what has
been said, the Europeans also continue to show their deep ambivalence regarding
Putin’s words and actions in Ukraine. Europe wants the conflict to just go away,
while Kiev has no ability to respond to its citizens’ need for protection, or
to the moves of its Eastern citizens toward independence.

According to The
Jamestown Foundation: (brackets by the Wrongologist)

Putin has executed a smart tactical maneuver by
playing to the business/political interests in the West that say Ukraine isn’t
worth a confrontation. He also continues to use Russia’s economic clout with
Europe to stifle any unified and severe sanctions response from the EU.

Russia is also closely involved with several of Mr. Obama’s
top foreign policy priorities, even negotiating alongside Washington in talks
aimed at curbing Iran’s nuclear program.

All of this leaves the US without much leeway to act.

Despite the results of the Eastern referendum, the diplomatic initiative could remain in
the hands of Ukraine. The presidential elections on May 25th
could rescue Ukraine from being a failed state if turnout is high, and the
results undisputed.

A reconstituted Ukrainian state would see Russia as
an existential threat, so “winning Crimea, but losing Ukraine” is the best
Putin could achieve, if the elections were to be a unifying event for the
country.

Instead, civil war, is a real possibility. The Jamestown
Foundation reports that nearly half of Russians now see civil war as the most
probable outcome of the Ukrainian crisis (up from 22% in early March). Mr. Putin
could be the loser if there is a brushfire civil war, since any Russian intervention
might trigger unity in Europe against Moscow.

Whether
it is a successful election or civil war, the US should not do more. Europe
doesn’t want to do more, Russia doesn’t want to do more. Ukrainians can’t do much more. All of these actors have to want to do more than the US if we are to be an effective broker in the region.

America’s
neo-cons want us to get involved. We hear them shout: “appeasement” and “Obama
is another Chamberlain” (That’s Neville, not Wilt).

Why
is it in our interest to listen to them?

What’s
Wrong Today:

According
to Turkish media, on May 29, Prime Minister, Recep Tayyip Erdogan will attend a
symbolic prayer in the orthodox temple of Hagia Sophia,
on the anniversary of the siege of Constantinople by the Ottomans.

From
the Economist:
Prime Minister Erdogan plans to lead prayers in the building to mark the 561st
anniversary of the conversion of the Sophia to a mosque:

Bulent
Arinc, a deputy Prime Minister, has already overseen the conversion of two
other Hagia Sophia churches: one in Iznik in 2012 and another in Trabzon in
2013. The Economist quotes Arinc:

Since
1935, the Hagia Sophia in Istanbul has been a museum, not a church or a mosque.
This was the solution devised by Kemal Ataturk, one of the 20th century’s great
statesmen, to resolve competing claims by the Muslim and Christian communities
in Turkey. The Sophia was built by the Romans in 360. The dome visible in the
photo below was added in 537. Constantine made it the home of the Roman church
(and named the city, Constantinople). It was an Eastern Orthodox Church for a
short period, and from 1453 to 1931, it was a mosque. Here is a photo of the Hagia
Sophia taken last March:

Photo by the Wrongologist

The
Sophia shows the additions and subtractions as its religion changed from
Christian to Islam. Following the building’s conversion into a mosque in 1453,
many of its mosaics were covered with plaster, due to Islam’s ban on
representational imagery:

Photo by the Wrongologist

This is one of the Deësis mosaics that date from 1261. It was commissioned to mark the
end of 57 years of Roman Catholic use and the return to the Orthodox
faith. It is the third panel situated in the imperial enclosure of the
upper galleries. It is widely considered the finest in Hagia Sophia,
because of the softness of the features, the humane expressions and the
tones of the mosaic. Here is a detail from the mosaic:

Photo by the Wrongologist

These mosaics were uncovered in the 1930s by a team from the Byzantine Institute of America led by Thomas Whittemore. The team uncovered all major mosaics. Since
then, there has been a continuing effort to partially restore the provenance of
the building.

The threat to the
Sophia’s museum status emerged in December 2012 when a local court ruled in
favor of the General Directorate of Pious Foundations, the government body
responsible for the country’s ancient mosques. It declared that the mosque was
an “inalienable” part of the legacy of Mehmed II, who conquered Istanbul in
1453 and converted the church to a mosque in 1453. The Sophia was the personal
property of Mehmed II (the title deed survives). And in his will, Mehmed II
decreed that it should remain a mosque “until Judgment Day.”

The court held that
the Ministry of Culture that manages the Sophia, had been “illegally occupying”
the building.  

However,
the recent push for conversion back to a mosque seems to be another game playing
out between Mr. Erdogan, his AKP party and Fethullah
Gulen, the Pennsylvania-based preacher whom Mr. Erdogan has accused of
seeking to overthrow his government.

According
to Al-Monitor,
several columnists from the Fethullah Gulen community had launched a campaign
calling for the Sophia to be turned to a mosque and opened to Muslim
worship. Apparently, they are using Twitter intensively to spread the message.
From the Turkish paper Hurriyet, an article by Ertugrul
Ozkok:

Some think
that with this move, the Gulen Movement is trying to restore its political
credentials. Mr. Gulen had tried to discredit the government through a
corruption probe launched by his disciples in the judiciary. Regardless of the
truth of that, you can read the Wrongologist’s report here.

Now it may
be that Mr. Gulen is attempting to wedge Mr. Erdogan by putting him into
difficulty about his religious position, which previously had been against any
change in the Sophia’s status. Even Mr. Arinc, who wants the Sophia to be a
mosque, did not take the bait, declaring that a conversion of the Sophia was “not
on the government’s agenda”. Bulent Turan, an AK deputy said: (brackets by the
Wrongologist)

Here is a
photo taken inside today’s Sophia that demonstrates the multicultural history
of the building:

The medallion on the right
represents Allah, while the medallion on the left is for Mohammad.

Behind the
medallions is the nave of the original church, with the middle window pointing
to Jerusalem. The lighted arch in the nave was added when the building became a
mosque, and it points toward Mecca.

Turkey
currently has about 85,000 mosques, around 10,000 of which have been built
since the AKP came to power in 2002. A huge mosque is currently being
constructed on the highest hill overlooking Istanbul.

But there
have been no efforts to take working churches away from Christian communities
and turn them into mosques.

Photo
by the Wrongologist

In 2011, the government ordered the return of
property confiscated decades ago to the dwindling Christian and Jewish
communities in Turkey, which number less than 200,000 people in a country of 75
million.

Turkey has been
held up as proof that the Islam is perfectly compatible with multiparty
democracy, a pro-Western foreign policy, and healthy economic growth.
Re-converting the Sophia to a mosque would make many in the West rethink that
view.

Yet today, politics
may lead the Sophia, and Turkey, in that different direction.

This magnificent
temple that was designated a World Heritage Site by UNESCO in 1985, inspires
its 3+million annual visitors as an example of tolerance and pluralism in a world
rapidly moving away from these concepts.

It should
remain open to all.

“Just
because an organization has the power to do something doesn’t mean it should” – Seth
Godin

Seth is
talking about power, policy and public
perception. Consider these overreaches in the pursuit of more money:

• Car
  dealers working to stop Tesla
• The
  NFL refusing to pay sales tax
• Amazon
  trading customer satisfaction for concessions
• Power
  utilities working to stop net metering by solar panel homeowners
• Telecom
  companies working behind the scenes to get the FCC to abandon
  net
  neutrality

Or,
consider Boko Haram stealing female students:

Or, consider Republicans climbing Mount Benghazi (again):

Or, consider the Supreme Court’s focus on prayer at town meetings:

A majority of voters now support reforming the Supreme Court. According to a new survey by the polling firm Greenberg Quinlan Rosner, wide majorities disagree with the Court’s recent string of 5-4 party-line rulings:

• The landmark Citizens United ruling is opposed by a whopping 80-18 margin.
• The more recent McCutcheon decision, which lifted caps on total campaign spending, was said by a 51% to be likely to create more corruption, while 8% suggested it would lead to less.
• By a 60-36 spread, those surveyed said that Supreme Court justices were more likely to be carrying out a personal or political agenda than working to render a fair and impartial judgment, an opinion that cut across party lines.

Overall approval of the Supreme Court has been falling ever since its 5-4 Bush v. Gore decision handed the presidency to George W. Bush in 2000, according to a different survey by Gallup.

Or, consider the continuing denial of climate change:

Or, consider the VA scandal in Phoenix and how badly we have treated returning Vets:

The VA is underfunded and suffers from most of the problems associated with being a fairly low priority Federal bureaucracy. What reportedly happened in the Phoenix VA may or may not be an anomaly. The care at VA centers seems to be good, but once soldiers get home and are out of the service, they are pretty much written off.

Power, Policy and Perception. How often do we get to be wrong about them?

What’s
Wrong Today:

Americans
have found a new source of spending money. After draining their home
equity lines and maxing out their plastic, some people have decided it’s time
to draw down their 401(k)’s. Bloomberg has a disturbing report that shows just that, using the
latest available data from 2011:

An earlier study by the Fed found that in
2010, 9.3% of taxpayers with retirement accounts or pensions were penalized, up
from 7.9% in 2004. As of March 31, the
median size of a 401(k) is $24,400, with people older than 55 having
$65,300 in their accounts, according to Fidelity Investments. These funds can be dissipated quickly
in retirement, and the early
withdrawals
indicate that the coming Boomer retirement crisis could be even more acute than
expected.

This
is not an unheard of phenomenon: As economic conditions deteriorate, withdrawals
have spiked in the past. They did in 1991, 2002 and 2007. The
inflation-adjusted IRS penalty cash collections declined 5% percent in 2011:

Source: Bloomberg

While
the graphic shows that penalties were slightly lower in 2011 than 2010, the fact that it’s higher than the levels
seen during the financial crisis years shows that economic stress is still high
in America.

Adjusted
for inflation, the government collects 37% percent more money from
early-withdrawal penalties than it did in 2003. Meanwhile, the amount of home-equity loans outstanding was $704 billion
in 2013, down 38% from the 2007 peak, according to the Federal Reserve data.

Bloomberg
quotes Reid Cramer, director of the Asset Building Program at the New America Foundation, which tries to improve savings for
lower-income families: (brackets by the Wrongologist)

Under
US law, money in tax-deferred retirement accounts can be removed without
penalty after age 59 1/2 and generally, you must start withdrawing after age 70
1/2. Withdrawals at any age are treated as income for the taxpayer and are
taxed at regular rates. The extra 10% penalty for 401(k) plans applies to early
withdrawals, except in cases of disability and certain medical expenses. And
think about the Fidelity statistics above: The
average 401(k) account for people over 55 holds just $65,300.

The
people who pay the penalty include younger workers who switch jobs and don’t
bother to roll over their accounts and older workers who have no place else to
turn. Here is a demographic breakdown of 401(k)s:

Source:
Bloomberg

Younger
workers ages 20 to 39 cash-out the most, with about 40% taking money with them
when they switch jobs, according to data from Fidelity. However, they take out
the smallest amount. Bloomberg quoted Michael Branham, a financial planner at
Cornerstone Wealth Advisors in Edina, Minnesota:

The
decreased income in retirement from making such a tradeoff is increasingly
damaging as Americans rely more on 401(k)-type accounts that they manage
themselves as opposed to pensions run by their employers. According to a Gallup
survey released May
2, 48% of non-retired Americans plan to rely on retirement accounts as a major
source of income, up from 42% in 2009, though down from a high of 54% in 2008.

And
take another look at the chart: People
in the 60-64 age group take out $36.4k, 2.4 times the average withdrawal,
and about 50% of what they have in the account.

Congress,
and others who are concerned about early withdrawals have two suggestions:
Lower the penalties, or raise them. (Thanks, Captain Obvious!) More restrictive
rules might prevent people from putting money in retirement accounts in the
first place, while lower tax penalties might make them more likely to take money
out of their accounts.

During
the 2008 campaign, Mr. Obama proposed allowing penalty-free withdrawals of up
to $10,000 from retirement accounts. That idea went nowhere and wasn’t included
in the 2009 economic stimulus.

Moving
in the opposite direction is House Ways and Means Committee Chairman Dave
Camp, (R-MI). In
his 2014 plan to revamp the US tax code, Camp proposed repealing the
penalty exceptions for higher education and first-time home purchases, contending that getting rid of the
exceptions would encourage Americans not to tap their retirement accounts early.

Maybe
this is understandable. The latest jobs report showed that the number of
long-term unemployed, measured as the level of people who’ve given up looking
for work and are counted as no longer in the workforce, continues to rise. We’re
also replacing middle class wage jobs with low end retail jobs and that trend shows
no signs of stopping.

So,
where are the jobs that will allow people to replace these drawn down savings? If
someone is already under economic stress, what do you think the odds are that she/he
will be able to repay the loan, particularly since it must be paid back with after-tax
dollars?

It’s
dispiriting to see economists and the financial pundits cheering the signs that
the economy is on the mend, that employment is better and consumers are regaining
their will to shop, at a time when plenty of people are needing to tap their
401(k)s to maintain their lifestyles. Financial advisors need to be able to reach a wider audience to talk about how this could affect their clientel. Going to websites like https://www.leadjig.com/financial-seminar-marketing/ can help them with strategies in this time of financial worry, so they are able to advise in the best possible way.

Withdrawals
which are required because of hardship shouldn’t incur a 10% penalty.

We need
to adjust our social and economic policies, or face up to the fact that the
401(k) piggy banks of many Americans are rocketing towards a brick wall.

What’s Wrong Today:

On Wednesday, President Putin suggested a peaceful solution in Ukraine:

Sounds good. But Putin goes on to say:

So, he is saying “postpone all elections” until we talk some more. Note that Russian Foreign Minister Lavrov has already dismissed calls for a Geneva 2 meeting.

More food for thought: Russia is moving military assets to Crimea for Victory Day. These assets consist of fighter jets, strategic bombers, transport and attack helicopters, paratroopers and SAM batteries.

Putin will attend, so there will be a “no-fly” zone declared for the celebration. A cynic might call this a test run of a Ukrainian “no-fly” zone. Subsequently, Russia could impose a “no-fly” zone on all of Eastern and Southern Ukraine without much warning or preparation.

Those assets could stay in Crimea and be ready for use in the event that the talks break down, or if the referendums go forward and follow the Crimea playbook.

Once it is known that the referendum supports independence, the new republic could immediately request protection from Russia. It is easy to see how that could lead to a Russian “no-fly” zone over Eastern Ukraine. If Kiev cannot control the airspace over Eastern Ukraine, it will be very difficult to win on the ground and avoid a partition of the country.

Mr. Obama and NATO must have game-planned this outcome: Will Russia intervene? What is the logic for a Russian intervention? It is possible that Putin and Angela Merkel have a deal in mind to split the country and avoid a war?

Russia’s Strategy:

Russia is working on driving a wedge between Germany (and the rest of the EU) and the US. Putin is banking on the US escalating sanctions which will cause economic damage to Germany. The harm will be so great that Merkel (or her successor) will distance Germany from the US and move toward Russia.

US Strategy:

The US strategy is to split Russia from the EU. In the long run, that can work, but it will take years just to reduce the EU’s energy dependency on Russia. The US hold on the EU is strong, and the US has cards to play. But first, employing stronger sanctions will cause German unemployment to skyrocket, and much of the EU might freeze one winter, but: “freedom and democracy”!

The WSJ Online reported that the biggest names in German business—including chemical giant BASF, Siemens AG, Volkswagen AG, Adidas AG and Deutsche Bank —have expressed opposition to broader economic sanctions against Russia. As a result, Germany’s position on additional, tougher sanctions is unlikely to shift, barring a dramatic escalation of the conflict in Ukraine—a message Ms. Merkel apparently delivered to Mr. Obama when they met in Washington last Friday.

Germany knows that the US has its back with NATO and it has to spend virtually nothing on its own defense. This allows them to keep doing business with the devil instead of actually standing for something geopolitically. Germany does not want to experience any inconvenience or any sacrifice of its economy.

The big strategic consideration is that Ukraine has the EU’s largest Natural Gas reserves, and they are ready to be fracked. If Ukraine can develop them, it could put a huge dent in Putin’s money machine, and reduce Europe’s dependence on Russia. The gas could start flowing within a year, given political stability. One would think this is a no-brainer, but the Germans and French are not yet trying to get into the game. BTW, there is also lots of frackable Natural Gas east of the Dnieper, where Russia is likely to prevail.

Russia will not invade Ukraine, because it won’t be necessary. The IMF agreements that come with the IMF bailout will be in force. This will lower pension payouts and wages. Fuel prices will have to rise, people are going to be pissed at their own country. Civil war could ensue.

So, Putin’s strategy is to wait.

OK, so what are Obama’s options? Can he wait as well? He knows he can’t be seen to be the loser h
ere. All the rhetoric coming from Washington and the major news outlets is an uncompromising “Russia must stop its ‘provocative’ behavior and accept the coup – that is, Russia must surrender.

There is an American election in November: If Washington does not prevail vs. Russia, Republicans will say Mr. Obama doesn’t have the stuff to make it clear to the world that we will do whatever it takes to enforce our will globally.

This must be Obama’s calculus – Russia folds, or they fight. Then, either way, Obama is a winner. But if Germany has lost the support of its large corporations, Obama has a weak hand indeed.

Given the geography, tactically there isn’t much more that the Administration can do. There will be more sanctions, but absent EU willingness to go further, and given a very disorganized Ukraine that cannot defend itself or pay its own way, Obama is not able to do more than watch Putin and Merkel play out the hand.

Which probably means a partitioned Ukraine, divided by the Dnieper River.

What’s happening in Ukraine is vastly important. It will determine the shape of the blocs facing each other for the next 20 years, and it is playing out right in front of us.

If the US wins the battle for the EU, it probably ensures that China will have Russia’s support and that could have geopolitical ramifications which are difficult to unwind. 

The Ukraine crisis is not a fight for democracy or freedom, but a deadly serious struggle for supremacy and geopolitical influence, with the US and Russia as the major players. Ukraine changes the character of international politics. As the atmosphere turns dark, the task of promoting and maintaining world order grows more daunting.

Future historians will scratch their heads in the same way we do when looking back at the run-up to World War I. Fifty years after Barbara Tuchman’s great book, The Guns of August, it is good to remember that things in the Balkans have a way of spinning out of control.

 

What’s Wrong Today:

Yesterday, we wrote about the Supreme Court’s decision in Town of Greece, NY vs. Galloway. Since then, Interwebs have been ablaze with comments both supporting and hating the decision.

Here for your review are three letters to the editor in today’s NYT in response to their front page article on the decision:

To the Editor:

Politick in public, pray in silence; either way, say whatever you want.

ERNEST F. IMHOFF
Baltimore, May 6, 2014

To the Editor:

It always seems that the very same people (and justices) who believe that the Second Amendment is sacrosanct have no trouble meddling with the First. I have no doubt that if our country’s founders could see the unending string of tragedies resulting from a dogmatic interpretation of the Second Amendment and the repeated trashing of the First, they would make some changes to the Bill of Rights.

The Second Amendment would be dumped and replaced with the following: “Please reread the First Amendment!”

BOB ROSENBLUTH
Lincolndale, N.Y., May 6, 2014

 

And below is the Wrongologist’s favorite. Emphasis is by the Wrongologist:

To the Editor:

As recognized in the Constitution, the proper exercise of government does not require ties to religious practice. Nor is there a need to establish a certain tone before a town government meeting other than to call the meeting to order and to get down to business. Why should an American have to listen to a government-sponsored prayer before taking up issues such as zoning and other town laws and regulations?

When the Supreme Court defers to allowing a prayer to open town meetings, the court itself is in violation of its constitutional duty to protect the First Amendment rights of all Americans. If we have to pray, let’s pray that doesn’t happen again.

BRUCE NEUMAN
Sag Harbor, N.Y., May 6, 2014

Amen, brother Bruce!

What’s Wrong Today:

Remember when conservatives used to be against “activist judges”? Now, they like their shiny new toy, the Roberts Court, particularly after their decision in Town of Greece, NY vs. Galloway, et al. From the NYT:

The 5-to-4 vote divided the court’s conservative members from its liberal ones, and their opinions reflected different views of the role of faith in public life, in contemporary society and in the founding of the Republic

The WaPo quoted Justice Anthony M. Kennedy’s majority opinion:

Justices Thomas and Scalia differed. They said that to the extent coercion is relevant to whether there is a violation of the Constitution’s establishment clause, “it is actual legal coercion that counts.” Peer pressure, they said, is not enough.

Justice Kagan differed from the three conservatives: (brackets by the Wrongologist)

She compared it — using the text of some of the prayers offered before the council’s meetings — to the idea of a judge inviting a minister to open a hearing with a prayer about “the saving sacrifice of Jesus Christ” or an election official reciting the Lord’s Prayer before opening the polls. Kagan wrote:

The facts of the case: A citizen is offended by her government requiring her to listen to a prayer with explicit references to a god she doesn’t believe in as a condition to attending a public meeting. She asks her government to refrain from doing that: A simple request that could have been accommodated in any number of ways. By having the council members choose to meet privately to pray before the meeting, by having a simple moment of non-denominational silent reflection before the public meeting, by working to make sure the opening “prayer” is a rotating event, for which all denominations are invited and for which non-believers also have a slot periodically to use those moments for some other form of statement.

But no. The town fathers say we’re going to continue to pray to Jesus whether or not attendees at our meetings believe in him. And our little town is going to spend taxpayer money litigating our right to do this all the way to the Supreme Court.

This kind of arrogance of government has now been validated by the Supreme Court. This is now what the First Amendment means.

Public meetings for the purpose of conducting government business are just that, business meetings. They are not an appropriate venue for conducting an organized prayer. If individuals should feel the need to pray silently to themselves, go for it.

It doesn’t matter if opening meetings with a prayer has been a long standing tradition; that is not relevant. Slavery and other forms of discrimination were also long standing traditions, yet very wrong.

There is a vast chasm between what goes on at state legislative proceedings and the much more intimate business transacted at the local level. These are small meetings where everyone often knows everyone else. These are neighbors, friends, and acquaintances. And they know whether you are praying or not. They see whether you bow your head or not. Later, they hear the prayer-giver lecturing you on your “ignorance” of the issue before the council, or in fact, of the American system. And, because they share the majority view, they feel a little freer to question whether or not YOU belong.

Worse, that the Greece NY town officials would make a statement that atheists were welcome to give an opening prayer shows the true level of their insensitivity. This decision should have been 9-0 that prayer is a private matter and should not be intertwined with government business at the local level.

Atheists remain the one group among us against whom discrimination is viewed as appropriate. A decision does not become defensible merely because atheists are permitted to give the prayer. A bit of a contradiction in terms, isn’t it?

What’s wrong is the Supreme Court’s clear message that Greece, NY and other towns can now say: “This is not YOUR town council; it’s OUR town council.” It’s the same message African-Americans got from the Confederate flag on the statehouse in South Carolina. In Greece, New York, it means, “This is OUR town, not YOURS. Don’t get any ideas.”

Picture this: Out of respect for those feelings being expressed in a prayer, the sentiments of which are totally foreign to oneself, you respectfully leave the room. You return to questioning looks. What could you possibly disagree with in our simple prayer?

Notice just how well this plays into “us vs. them”?

In public grammar school in the 1950’s, the Wrongologist said the Lord’s Prayer, along with his classmates. Our teacher was Catholic, but the prayer recited included the Book of Common Prayer doxology, which the Catholics (at that time) did not use.

Never mind that there were Jewish kids in the class. This was a violation of the establishment clause of the Constitution, but who knew?

The most important course that the Wrongologist took in college was US Constitutional law with the late Prof. Walter Giles. Studying with Giles informs this blog on a daily basis. He would have hated the Supreme Court’s decision in Town of Greece, NY vs. Galloway, et al.

Giles was famous for his annual Martini Lecture:

Dr. Giles expected much from his students but promised much in return. We studied most of the Supreme Court decisions that had a bearing on Constitutional questions. You had to be able to stand up in class when called upon, and argue either side of the case in question. Giles prefaced every semester’s thick syllabus with a quotation from US Supreme Court Justice Benjamin N. Cardozo:

Enough digression. One of the great disillusionments of this age is the rejection of the values we achieved in the 1960s. You remember the Sixties, when the younger generation questioned everything “the establishment” stood for. We ended up with the Voting Rights Act, civil rights, women’s rights, abortion rights and some people are still pissed about it.

And now, this prayer decision. We do not live in a Christian nation. Most of our founding fathers were Deists. We rail against religiously-run Mideast nations and then our Supreme Court approves the use of religion in our own institutions…are we any better?

Where will the dismantling of the Constitution stop? What gets your blood boiling? Where do you make your stand?