A few straightforward suggestions to fight poverty

“If incarceration had come to define the lives of men from impoverished black neighborhoods, eviction was shaping the lives of women. Poor black men were locked up. Poor black women were locked out.”

The above quote comes from the Pulitzer Prize winning book “Evicted” by Matthew Desmond. Its subtitle is also telling – “Poverty and Profit in the American City.” The dilemma is we have a poverty problem that stretches from urban to rural America. Yet, it manifests itself daily in the eviction courts of American cities and towns, whether it is from apartments, houses or mobile homes.

The book speaks of how fragile the rental community is regardless of race, yet the black community tends to have a higher rate of exposure to evictions in urban areas. Unexpected expenses, transportation problems, and tragedies can push people paying a very high portion of their rent over the edge and out the door. Ideally, 30% of family income should be toward housing and utilities. Too many of these folks are paying well above that percentage.

It should be noted that there are other drivers of fragility. Some have opioid and other dependencies. Some are fragile due to too many children that stretch the budgets of even the best planners. Some are in downward spirals with unsupportive landlords. And, many of those unexpected expenses that arise are healthcare related.

What are some suggestions to remedy these issues? Based on my experience as a volunteer Board member helping working homeless families and my reading, I would like to throw out some ideas for consideration.

First, we need to talk more about it. America has a huge disparity in distribution of wealth which is not talked about enough by leaders. Where and to whom one is born are greater predictors of success as the American Dream  has waned for too many.

Second, we need to fund more family planning efforts not less. There is a high correlation between poverty and large families. When family planning is funded and birth control access and education are increased, poverty declines, system health care costs decline and abortions decline.

Third, more mechanisms to reduce evictions need to be in place and funded. Crisis assistance funds show success in helping keeping the electricity on and, when funded, reducing the number of evictions. Stopping homelessness (or fragility) before it starts can make a huge difference and will have a positive echo effect.

Fourth, we must invest in impoverished  areas making them more suitable for families both with opportunity and resources. In their absence, crime and other poor influences fill the void.

Fifth, while I have concerns about the new Tax law with its impact on debt and heavy emphasis on the wealthy and corporations, a huge opportunity was missed when we could have added an increase in the minimum wage tying it to automatic increases due to wage inflation. I worry that less money than expected by the law’s drafters will end up in the hands of workers.

Sixth, we must address our opioid crisis in America. To be frank, cutting access to healthcare and mental care insurance benefits are not the answer. We must stabilize access and cost of healthcare, yet opposite measures have been taken in the past few years under the guise of political gain.

There are many more ideas, but these will help. On the investing front, many locations have seen success with using historical tax credits leveraging private money. There is a concept called ABCD (Asser Based Community Development) which shores up or repurposes an deteriorated asset creating jobs.

But, first we need to talk about this real and pervasive problem.

 

 

 

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If you give a mouse a cookie

The childhood book by this name reveals that some are never satisfied when you do them favors. I was thinking of this as I thought of the litany of things done by a self-promoted populist on behalf of his true benefactors, the wealthy mice. He started with cookies, but the list goes on.

If those onerous environmental regulations were getting in the way, he just rolled back a few of them. Plus, if those scientists and their data were problematic to polluting businesses, he just fired a few, ran off a few and deleted access to important research data.

If access to public lands and what lies thereunder was a roadblock, he just cut back on the national parks and gave easier access to developers. What is land, if it cannot be exploited for short term gain? As a rancher put it, when the developers come, the profits go to Houston and Calgary, but the degradation is left for them long term.

If paying taxes is preventing investment in employees or business, even though conpanies are sitting on cash, then he gave the mice more money. The key is how much will flow into investment and employees and how much will be used to make the executives look good?

Along the way, there are some photo ops to say look what is happening, but the mice seem to be the ones who are getting the cookies and added benefits. As one energy consultant noted, the President has done a lot for coal owners, but not much for coal workers.

I am all for making things easier, but we need smart regulations that protect Americans from short cutting and corruption. We must pay for things as well, and debt and environmental costs are dear. Saying they don’t matter is poor stewardship as our children and grandchildren will have to pay the price for our avoidance.

The weather outside is frightful

The weather outside is frightful. Inside it’s so delightful. And, since we’ve no place to go, let it snow, let it snow, let is snow.

Please think good thoughts for those who are exposed to the severe cold and wintry precipitation. May they stay warm and travel safely if they must. We will be in the teens here over several nights, but our Minnesota based friend, Hugh, said he awoke to 19 below, Fahrenheit. Yikes!

I also want to emphasize the word “weather.” The US President either purposefully or unknowingly confused climate with weather. If purposeful, his intent was to play up to the “climate change is hoax” crowd among his followers. Unfortunately, this becomes an annual confusion effort which is either cynical of filled with malintent. Someone needs to tell the President that it is summer time in the Southern Hemisphere and 2017 set a new record for average heat around the globe. A few days of frigid weather in December north of the equator and June south of the equator will not alter that fact.

It would be nice if the President did not forsake the US global standing and stay engaged as a leader on climate change efforts. We have some of the leading climate scientists and data in the world. We are also one of the two biggest carbon emitters. Fortunately, other state, city and business leaders will keep the US moving forward leveraging the many good efforts.

Have a wonderful 2018. Let’s move this ball forward. Our children and their children need us to.

Side of the Angels

A CFO once said during a meeting I was involved with “at least we are on the side of the Angels.” He was referring to a decision a Committee had made which was a conservative reading of the law. If they were wrong at least they would not be at risk.

I use this example as many decisions are made these days that run counter to what experts using data and analytics might say should be done. A good example is happening as of this writing in the US Congress. A law is being passed which goes against what several nonpartisan economic and budget organizations are saying will happen. It is also being sold as more than it is, which is a windfall for wealthy people and investors. These lawmakers are not on the side of the Angels on this issue.

Earlier this year, the President of the United States decided to pull the US out of the Paris Climate Change Accord. As a result, our country was not invited to a conference last week to plan ahead. We are the lone country in the world that will not be in the accord. Ironically, the accord permitted flexibility to reshape how we comply, so leaving was merely a political statement. Being a lone wolf on one of the two most important topics in the world does not leave us on the side of the Angels.

We must do our homework and make decisions based on data, analytics and nonpartisan opinions of experts. Making decisions off rhetoric and lobbyists’ wishes   tends not to be on the side of the Angels.

 

 

A couple of climate clues

I am reading a great book called “Rancher, Farmer, Fisherman” by Miriam Horn. She focuses her attention on people in these professions (plus a few others) and how they work the earth and its waterways. They see what is happening with climate change and environmental degradation and have adapted over time what they do to continue their livelihood. The book has a subtitle of “Conservation Heroes of the American Heartland.”

A quote from a mentor to Justin Knopf, the farmer, is compelling. “Dr. Gary Pierzynski, head of the Kansas State University agronomy department describes…‘We have no doubt that climate change is happening. But we recognize that talking directly about it raises issues with some of our elected officials, who remain unconvinced and don’t support investing state resources to study it. So we emphasize our focus on challenges like extending the life of the Ogallala aquifer; we don’t disguise it but take away the climate change message.'”

It should not be lost on anyone that this man is about as far away from the coast as possible, but speaks of the impact on climate change on the agro economy and water sources. As an example, Knopf has used his experience to realize that using “no-till” farming is ideally suited for growing wheat and other products in his neck of the woods. When tilled, more of the topsoil is washed and blown away. When untilled, the ground keeps more of the creatures that naturally fertilize and break down the soil. It also aborbs more carbon.

He notes farmers continually experiment and share ideas, so what works there may be less suited elsewhere. I will write more on the book later, but what is fascinating is how these folks see what is happening first hand and adapt over time. Sometimes what they try fails and often it takes a few seasons for changes to fully be realized.Their livelihoods depend on it, so it is done with seriousness of purpose and observation.

On a different note, I saw a news report about Kodiak Island in Alaska. They are close to 100% renewable energy powered, using hydro and wind energy with battery storage. They switched when the diesel fuel got too expensive to shore up the hydro power when the demands increased. Also, a creative solution was used in the ship docks where they send and receive freight. Using a fly wheel concept, as one of the freight containers is lowered by the crane, it creates energy that is stored and used to lift the next container. The process continues as the containers are loaded and unloaded.

It should be noted the fly wheel concept is getting a lot of attention due to its elegance. In computer vernacular, elegance means the simplest and most effective solution. It also should be noted the cost of energy for the Island is more predictable and is lower than it was ten years ago. I highlight this cost statement as this is the new norm for renewable energy versus fossil fuel energy. The city of Georgetown, Texas came to the same conclusion when they signed a twenty-five contract for wind and solar energy rather than a shorter fossil fuel contract.

On the ground, local leaders, farmers, ranchers and fisherman are seeing what is happening first hand. They are making informed decisions that impact their future. It would be nice if our President, EPA director, Energy director and Congressional Republican leadership would make informed decisions. We could use their help and not their obstinance. The world is passing them by and they are not allowed to notice it.

A few odds and ends

Happy Hump Day. May the rest of your week be enjoyable and productive. Here are a few odds and ends to ponder.

One of the flaws of the President is he defines everything transactionally, with winners and losers. Two comments. Winning does not make you right, it just means you won. He is telling folks to discount Senators Flake and Corker because they will retire next year because they were going to lose. Yet, one thing the President needs to realize is they are dead-on accurate in their concerns.

The President has a difficult time with multilateral agreements, preferring bilateral where one side can win and the other lose. But, if we are seeking long term relationships everyone must benefit. The Nobel Economics Prize winner John Nash developed what is now called the Nash Equilibrium for multilateral agreements – simply if each partner seeks the best gain for the whole, more economic gain will occur. This runs in direct contrast to Trump’s zero-sum game approach. It should be noted there is a business alliance of car makers and others telling him to not ditch NAFTA, a multilateral agreement.

Climate change continues to increase the magnitude of hurricanes, forest fires and droughts. The GAO noted the costs of catastrophic events are escalating as a result to the tune of $300 Billion, not counting the events of the last two months. These costs will likely get worse given the rising sea levels, temperatures and amounts of rain that melt away snow and expose the terrain to these intense forest fires.

On the positive side, renewables continue there double-digit per annum growth and are more affordable long term. The Mayor of Greensburg, Texas signed a twenty-five year contract for wind energy as the numbers were more compelling. Texas leads the country in wind energy with 16% of their energy portfolio and Iowa has almost a third of its energy by wind. It should be noted that irrespective of pulling the Clean Power Plan, America will blow past the requirements in carbon reductions based on the work of several states and market forces. Folks like Trump, Pruitt and Perry are less relevant in this conversation and need to stay out of the way.

That is all I have for now. Your thoughts are welcome.

Two Roads Diverge

Two news stories from yesterday paint pictures of which road can be taken with respect to battling climate change. The first road leads us to Copenhagen, where it is reported the goal of leadership is to be net carbon zero in the city’s mpact on the planet.

The city has new building codes which require eco-friendly approaches. There are schools with solar panels on the walls, buildings with greenery on top that utilize rainwater effectively, e.g. They also have numerous bicycle and walking paths, which support the 62% of the commuters who pedal to work.

The second road leads us to Washington, where the head of the US Environmental Protection Agency, Scott Pruitt, is going to repeal the Obama Clean Power Plan. This plan gave the flexibility to states on crafting individual plans to bring down carbon emissions beneath 2005 levels.

Pruitt said the “War on coal is over” as he announced the change in Kentucky. What he fails to realize, it is over. Coal has been dying off and being replaced by cheaper and cleaner options. Natural gas drove the first dagger into coal and continues to do so. Trump’s own plan will drive it deeper.

But, we should not ignore that wind and solar are growing by double digit rares over the last five years and will continue to do so. In fact, in Pruitt’s home state of Oklahoma, they are one of the top wind energy states in the country.

Fortinately, cities around the world are leading the way on battling climate change, as they are the biggest polluters. And, they are learning from each other. States are also leading the way – several states will enable the US to meet the Clean Power Plan requirements by themselves.

Let me conclude with a quote from the CEO of a solar energy company at a conference in NC, the second largest solar energy state. He told legislators to “Just stay out of the way and we will blow past the Clean Power Plan requirement.” That is the question – we need Trump and Pruitt to just stay out of the way.