Arizona Eagletarian

Arizona Eagletarian

Wednesday, May 20, 2015

What REALLY happened at the APS shareholders meeting and the protest outside? UPDATED 6:30 pm MST 5-23-15

Link to Don Brandt's remarks to shareholders is included in the UPDATE at the end of the post, below.



On Wednesday morning, a lively but peaceful group of protesters called attention to the Dark Money escapades conducted over the last couple of years by Arizona Public Service, the wholly-owned subsidiary of Pinnacle West Capital Corporation in downtown Phoenix. Among the protesters, Renz Jennings (former chairman of the Arizona Corporation Commission) made (and handed out) the following statement.
My protest is not about name calling, or greed or even APS' attempts to knee cap the future of solar energy. It is about the theft of democracy, including and especially, APS secretly underwriting campaigns of the regulators who set their rates.
That most of the Dark Money in the recent elections could have come from some other source is fiction. No, this is the parable of the Emperor's New Clothes. APS has made a naked effort to secretly buy elections using the monies it collects from its ratepayers.
It is the duty of the Pinnacle West board to determine if the management they direct should continue to siphon off millions of dollars from the revenues generated by APS customers to overwhelm the election's process.
In setting rates, it is the Constitutional duty of the five elected Commissioners to ascertain how APS spends money. To date they have made no effort to order disclosure on the money that APS spent, dark or otherwise, on financing candidates. It's easy to understand their reluctance when what would be disclosed is that APS significantly funded each and every one of their elections. 
If the Board thinks this assault on democracy is fine, then it is up to the shareholders to determine if this reflects their values as investors and either fix it or disinvest.
APS has been a well-run company, in part because of its dedicated employees. I call on them to pressure their management to get out of the business of buying elections and squandering APS' community capital.
I ask my Republican friends if they think letting APS screen and select and finance their candidates for public office will be healthy for their party.
As citizens, voters and customers, we ask you to consider whether your investment damages our democracy and undermines our responsibilities for self-government.
If it takes shaming APS leadership, board members or shareholders into stopping this tawdry assault on our democracy, we are ready to do that.
This is not over, and we are not done.
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State Rep. Ken Clark (D-LD24/Central Phoenix) addresses protesters.

Apparently, NO, APS ain't got transparency.

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While that was happening outside of the Heard Museum, local community activist and PinWest shareholder Jarrett Maupin and As You Sow energy program manager Amelia Timbers were inside the meeting.

Timbers gained entry to the meeting by presenting legal documentation that she represented certain shareholders throughout the process of developing and submitting the shareholder proposal to require disclosure of political spending. But when she attempted to ask a question, she was denied that courtesy (right) based on a claim that her documentation failed to demonstrate she had the right to ask questions.

Nevertheless, the shareholder proposal was voted on. But the earliest the final vote tally will be disclosed will be next week. Reportedly, PinWest did say that the proposal did not garner a majority of the votes. However, that's not necessarily a big deal at this point.

The essence of the company line as presented during the meeting was captured in a lengthy statement read by APS president Don Brandt. Because no recording devices were allowed in the meeting, and because the statement was not made available in writing, one can fully expect that it was extremely slanted in favor of the PinWest company line.

Really, a closed meeting with no journalistic coverage and no recording devices sets it up as a propaganda fest bordering on demagoguery. Notably, Brandt played the victim card, portraying the local media controversy as exclusively theatrics. [Kudos to 12News correspondent Brahm Resnik for much more fair coverage than Randazzo has (probably ever) provided] Of course, as previous statements have indicated, Brandt claims he only acted lawfully. Those poor defenseless... ALEC members.

Given the heavy-handedness of all the actions by APS and Pinnacle West, I now have to wonder what safeguards are in place to ensure the integrity of the vote.

If Arizona Republic energy public relations writer Ryan Randazzo wants to make even the slightest pretense of being a legitimate journalist, he will dig and report on what procedures and mechanisms are in place to provide any assurance that the vote will be counted accurately and reported fairly. Oh, sure. APS will provide him with ITS story. Randazzo will then take it and transcribe it into the Republic and claim he's fulfilled a journalistic responsibility. That's just what shills do, isn't it?

Several quotations websites attribute to the late Russian dictator Josef Stalin the following,
“People who cast the votes decide nothing. The people who count the votes decide everything.”
Only one source I found provided back up documentation, saying a variant was found in
Boris Bazhanov's Memoirs of Stalin's Former Secretary, published in 1992 and only available, so far as I know, in Russian. The pertinent passage, which appears near the end of chapter five, reads as follows (loosely translated with the help of Google):
"You know, comrades," says Stalin, "that I think in regard to this: I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this — who will count the votes, and how." 
Given what former ACC chairman Jennings had to say (above), this is especially poignant.

By the way, the Arizona Republic's Ryan Randazzo reported about the protest,
Outside the meeting, armed security and Phoenix police kept the small crowd of mostly retirees, politicians and political activists confined to the sidewalks along Central Avenue.
Take a look at this and then tell me if Randazzo fairly characterized the police presence.


UPDATE           UPDATE           UPDATE
PinWest chairman Don Brandt's remarks to the shareholders is now available for review. It's chock full of propaganda.



Monday, May 18, 2015

Call out Pinnacle West and Arizona Public Service for Dark Money activity; Protest on Wednesday!


To set the stage, consider:

As but one example, in 2013, Arizona Public Service shamelessly purchased the support of Arizona lawmaker Catherine Miranda.

In 2014, APS purchased the new Arizona Attorney General and two newly-elected members of the Arizona Corporation Commission.

As a result, Arizona stakeholders have become increasingly uneasy about this direction the state's largest utility has taken.

Therefore, on Wednesday, Pinnacle West Capital Corp, the publicly-traded holding company that owns Arizona Public Service will conduct its annual shareholders meeting (see page 6 of the pdf). At 10:30 am, PinWest will convene the meeting at the Heard Museum, 2301 N. Central Ave., Phoenix.
The purposes of the Annual Meeting are:
  • to elect ten directors to serve until the 2016 Annual Meeting of Shareholders (Proposal 1);
  • to hold an advisory vote to approve executive compensation (Proposal 2);
  • to ratify the appointment of our independent accountants for the year ending December 31, 2015 (Proposal 3);
  • to consider a shareholder proposal, if properly presented at the Annual Meeting (Proposal 4);
  • and to transact such other business as may properly come before the Annual Meeting and at any adjournments or postponements thereof.
All shareholders of record at the close of business on March 12, 2015 are entitled to notice of and to vote at the Annual Meeting. Your vote is important. Whether or not you plan to attend the Annual Meeting in person, please promptly vote by telephone, over the Internet, by proxy.
For those of us NOT shareholders of record as of March 12, we are still STAKEholders.
A corporate stakeholder can affect or be affected by the actions of a business as a whole. The stakeholder concept was first used in a 1963 internal memorandum at the Stanford Research Institute. It defined stakeholders as "those groups without whose support the organization would cease to exist." The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR).
Rather than giving its customers (a legitimate stakeholder group) voice in its corporate governance, the last forty plus years have seen America's economic and political systems devolve to exclude consideration of the interest of customers and nearby citizens who can be adversely impacted by what the corporation intends to do.

APS could have taken a drastically different approach to the impending disruption of its business model. Based on inevitable technological innovations it has seen coming for at least two decades, the company has focused its energy (pun intended) in the direction of Regulatory Capture. As well, it has generated (another intended pun) copious amounts of paid propaganda (advertising) in an awkward attempt to manipulate the stakeholders, at times trying hard to keep the scope and magnitude of that political activity in the dark.

To call out these disturbing and insidious business practices, a coalition of stakeholders, community activists, and customers, will also convene on the public sidewalk in front of the Heard Museum to raise public awareness of shareholder proposal 4 (cited in the agenda above).
WHEREAS:
  • Corporate lobbying exposes our company to risks that could adversely affect the company’s stated goals, objectives, and ultimately shareholder value, and
  • Shareholders rely on the information provided by the company to evaluate its goals and objectives. Shareholders seek disclosure of our company’s lobbying activities to assess whether these undertakings comport with the long term best interests of the company, its shareholders, and its stakeholders. 
THEREFORE BE IT RESOLVED:
The shareowners of Pinnacle West Capital request the Board authorize the preparation of a report, updated annually, disclosing:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Pinnacle West Capital or its subsidiaries used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Pinnacle West Capital membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Pinnacle West Capital is a member. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Pinnacle West Capital's website.
Shareholders encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation, directly and indirectly. Pinnacle West Capital does not comprehensively disclose its trade association memberships, nor payments to special interest groups on its website. Absent a system of accountability, company assets could be used for objectives contrary to the long term interests of the company.
Pinnacle West Capital spent approximately $800,000 on federal lobbying in 2013. (opensecrets.org) This figure excludes spending on memberships or contributions to organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC), where Pinnacle West Capital serves on the Energy, Environment and Agriculture Task Force. It also excludes contributions to trade groups such as the Edison Electric Institute, where Pinnacle Capital West is a member. Additionally, in 2013 Pinnacle West Capital’s subsidiary Arizona Public Service donated $4 million to nonprofits that executed an anti-renewable power advertising campaign which created national controversy. (Berman, “Why the Dark Money Debate Matters”, AZCentral.com, April 5, 2014)
We encourage our Board to require comprehensive disclosure related to direct, indirect and grassroots lobbying. 
Please join us at 9:30 am on Wednesday morning.

If you drive to the protest, there may be street parking on side streets off of Central Ave. You may also take the Valley Metro Light Rail, which conveniently has a terminal directly adjacent to the museum.

Rise UP! Take a stand for our community, our state and our environment.



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"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." -- Associate Justice of the Supreme Court Louis D. Brandeis

Sunday, May 17, 2015

Bombastically Deceptive John Kavanagh gets it wrong on the Plastic Bag Ban Ban

Last Wednesday, Tempe City Councilwoman Lauren Kuby got a dose of John Kavanagh's bogus reality when she went up against him for a brief ten minutes or so on Arizona Horizon, moderated by Ted Simons.


Here's a sampling of why Kavanagh is the biggest bullshitter in the 52nd Arizona Legislature.

First, for a man that has a Ph.D. degree, he seems to rely more on being forceful than allowing the argument he wants to make (the content of the message) be forceful simply by virtue of it being the right thing for the situation. But that wouldn't be the bombastic blowhard we all know and loathe (or love... some people love him, I'm sure).

I think back to early 20th Century Republican Theodore Roosevelt. From an artifact on exhibit at the Library of Congress, a letter dated January 26, 1900, from Roosevelt to Henry L. Sprague:
I have always been fond of the West African proverb: "Speak softly and carry a big stick; you will go far."
That's not a lesson our bombastic friend from Fountain Hills seems to have ever taken to heart.

Nevertheless, a few more of my thoughts on this video clip follow.

First, I observed Horizon host Ted Simons make a significant faux pas. Traditionally, he handles his role as moderator by seeking to give each side a relatively equal opportunity to make their case. However, the first time Kavanagh interrupted Kuby, Lauren tried to interject that "I'm not done..." Simons contradicted her, "yes, you are."

Nevertheless, Kavanagh had the first opportunity, to answer why he believes the plastic bag ban ban bill is a good idea. Back when John was unafraid to engage in banter with me on comments to this blog, he thought he was in charge and could establish the ground rules (as he went along). He suggested on occasion that rules of logic should be diligently adhered to. He was big on identifying logical fallacies. Well, his opening statement on this video is, "this bill is a good idea because banning plastic bags is a bad idea."

Maybe John will grow a pair intellectually and face the music on this particularly fallacious premise. No doubt he could tell us which fallacy he used. Because it surely was NOT a substantive response to tell viewers why the bill is a good idea.

Kuby's argument was based on facts, not political bullshit like Kavanagh. She cited cost figures that cities and counties encounter in collecting and processing trash, including recycling. She showed Kavanagh up by making her point well that cities are where innovation takes place. Cities have to manage the costs. Blowhard Kav, supposedly a master of the Arizona budget given his years of service as House Appropriations chair, did not respond to the points she made about the cities' responsibilities and costs.

Anyway, John cites "there are health problems with the bags that are reused." Eventually, he uses THIS point to justify HIS imposition of the NANNY STATE concept, "I'm concerned with the health of my constituents." Therefore, AND (as he stated a couple of times) because HE CAN. The Arizona Constitution gives him the power to preempt cities from doing what they need to do to properly process trash in their jurisdictions. Yes, he indicated that it's the right thing to do because the Constitution says he CAN do it. How's that for illogical reasoning?

Never mind that his position is based on a study that was thoroughly and completely debunked. Not only that, but Kuby effectively rebutted that claim by pointing out that there is e.coli in his socks then simply (softly) suggesting that what people do about that problem is to WASH their socks. From a Tulane Law Review article (page 29-30 in the pdf) on plastic bag ban ordinances,
In 2011, the American Chemistry Council (ACC) funded a study authored in part by University of Arizona Professor Charles P. Gerba that looked at the dangers of bacteria in reusable bags. The study found that consumers who were interviewed rarely washed their reusable bags and that some bags contained bacteria but that “[h]and or machine washing reduced the number of bacteria in reusable bags by > 99.9%.” Consumer Reports issued a rebuttal pointing out that the bacteria found was minimal and that the sample size of eighty-four bags was too small to be meaningful. A scientist interviewed by Consumer Reports noted, “A person eating an average bag of salad greens gets more exposure to these bacteria than if they had licked the insides of the dirtiest bag from this study . . . .”
From an Arizona Republic story about germy reusable grocery bags,
Sinclair and other authors faced some criticism after the study was published because the American Chemical Council partially paid for the research. The trade organization has advocated against reusable shopping bags on behalf of its members who manufacture the thinner, petroleum-based plastic bags.  
There are SOOOOO many more things Kavanagh did poorly in his meager attempt to rationalize support for the ALEC bill he championed. Rather than bore you with more on it in this post, I'll hope that somebody, perhaps Ms. Kuby, will write an op-ed to tear Kavanagh's position apart. If that happens, wonderful.  But if no local corporate news enterprise publishes it, I certainly would love to do so.

From where I sit, however, the bottom line is that Kav really cares nothing about any of it except what his corporate masters tell him. They even have a website dedicated to being "a resource for legislative bodies considering laws limiting the use of plastic bags." And Kavanagh makes clear that's his priority by making the convenience of businesses his bottom line.

So, Lauren Kuby, keep telling the story of what really is at stake when it comes to Arizona cities and towns needing to be the experts on their own responsibilities, including the collection and processing of trash. Then we can continue to call out the fallacious arguments and claims blowhards like our good friend John Kavanagh spew at every opportunity.

Thursday, May 14, 2015

It may actually BE time to start the movement to #RecallScroogeMcDucey

There are a number of topics requiring attention and blog posts at this time, from Diane Douglas' Listening Tour, to John Kavanagh's bloviating deceptiveness on the plastic bag ban bill, to the condition of Arizona government altogether. But this evening, another story is urgently troubling.

According to the Arizona Republic, Stephen Slivinski, senior research fellow at Arizona State University's Center for Economic Liberty and formerly a senior economist at the Greedwater Institute, published a disturbing new report this week on the feasibility of eliminating the state income tax. Slivinski has also held senior positions at the Cato Institute and the Mercatus Center.

Each of those organizations is funded with big money from Charles and David Koch and are aggressive extensions of the messaging machine that has turned up the volume on Reagan's "government isn't the solution, government is the problem" propaganda. ASU's center for enslaving all but the top 1 percent of Arizona (a more fair characterization of the mission of Slivinski's current host organization) says about itself,
Committed to the study of the role economic liberty and the free enterprise system play in increasing opportunity and improving well-being, the Center for the Study of Economic Liberty seeks to advance our understanding through independent thinking, scholarly debate, factual argument, and clear, honest communication of research and policy findings. The center is a non-partisan academic unit within the W. P. Carey School of Business at Arizona State University; our scholars enjoy academic freedom and share with each other a basic commitment to a freer, more prosperous world.
Our operations are financed by donations from foundations, individuals, and alumni who share an interest in advancing our understanding and continuously improving the institutions that make us free and prosperous. 
In other words, from the Kochs and the Kochtopus. Russ Wiles, the reporter who authored the story linked above, states about that funding,
The ASU Center for the Study of Economic Liberty, also housed at the W.P. Carey School of Business, was established in 2014 with the help of $5 million in gifts. Part of the money came through a grant from the W. P. Carey Foundation, which supports schools and universities in the areas of business and economics. The organization's founder, the late investor Wm. Polk Carey and founder of W. P. Carey & Co., also provided a $50 million gift to ASU in 2003 that resulted in the renaming of the business school.
The W. P. Carey Foundation helped to secure up to $3.5 million for the new center from the Charles Koch Foundation, which focuses its philanthropy on university research and education to advance understanding of how free societies improve the well-being of people around the world.
Again, it has been well established that what the Kochtopus funds is NOT charitable endeavors but studies and activities that provide the "intellectual" foundation for public policy implementation that enriches THEMSELVES. The Economist reported in 2014,
The Kochs are also at the heart of one of America’s most powerful political machines. Most businesspeople take a strategic approach to politics: they lobby for special privileges and contribute to both sides of the political aisle. The Koch brothers have ideology in their DNA. Fred senior was a leading light in the anti-communist John Birch Society. David ran as the Libertarian Party’s vice-presidential candidate in 1980, and Charles and David helped to raise an estimated $400m for efforts to defeat Barack Obama’s re-election bid in 2012. Critics fret about the “Kochtopus”—the Kochs and the network of institutions that they finance, ranging from the Cato Institute, an august think-tank in Washington, DC, to Tea Party organisations like Americans for Prosperity.
As Upton Sinclair, author of the revolutionary novel about the meat packing industry in Chicago, The Jungle, said (plenty of times),
It is difficult to get a man to understand something, when his salary depends upon his not understanding it!
But I digress.

Slivinski has argued, thus far (in my opinion) unsuccessfully, that eliminating the income tax would create tens of thousands of jobs in Arizona. Given data comparing tax rates and job growth, you'd think somebody would have a level of critical thinking skills necessary to see through Slivinski's bullshit. But when they all make big bucks pushing the Koch agenda, all bets on who has those skills get thrown out the window.

Arizona has cut taxes (including income taxes for individuals and corporations) consistently (pretty much EVERY year) for more than two decades. Coupled with this strategy -- that, by the way, has produced lower than the national average job growth over that period -- has been dramatically increased reliance on sales/transaction privilege taxes. So, what does Slivinski, the latest prominent Arizona-based Koch propagandist suggest we do? Double down, of course. Here's how he opens his new "academic" report.
Restructuring the state's revenue system to rely more on consumption taxes (i.e., the transaction privilege tax, commonly known as the “sales tax”) and eliminating the personal income tax can be beneficial from both an economic perspective and a public policy perspective. In the following study, I explain how the reform can be accomplished while still maintaining budget balance over six to eight years.
Data regarding economic performance and public policy IS available. We do NOT have to take the word of voodoo economists like Slivinski anymore.

By the way, because Scrooge McDucey falsely boasted about the meaning of his Moody's credit rating report last week and because he has boasted since before the 2014 election that he intends to eliminate the income tax in our state, it may actually be time to gear up to #RecallScroogeMcDucey. After all, he has done what he promised as far as cutting state spending, with especially draconian cuts to education. Now McDucey's job approval rating is at 27 percent, with disapproval at 44 percent.


Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century.

Monday, May 11, 2015

Scrooge McDucey's head fake on budget and finance

On May 5th (Cinco de Mayo), Scrooge McDucey sent out a self-congratulatory (propaganda) email boasting how his AUSTERITY plan has already brought about a boost to the State of Arizona's credit rating.
This morning the highly renowned bond credit rating agency, Moody's Investors Service, announced it has upgraded Arizona's credit rating to Aa2, with a "stable" outlook.
In their announcement, Moody's said the rating increase "reflects the state's positive economic trends, significantly improved liquidity (asset) levels (and) budget actions expected to eliminate a structural imbalance."
What's the problem with that, you ask? Let's start with the first phrase, designed to fake you out with a specious claim suggesting Moody's credit rating service has anything to do with anything.

"[T]he highly renowned bond credit rating agency..." Now, IF Moody's really was a "highly renowned" organization, why would ol' Scrooge need to tell you before saying anything else? If Moody's really was credible, why not either provide EVIDENCE of that credibility, or simply let the organization's claims speak for themselves?

Instead, McDucey expects us to not notice that he told us a fib right off the bat. A McClatchy report from 2009 states,
WASHINGTON -- As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression.
A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.
Instead, Moody's promoted executives who headed its "structured finance" division, which assisted Wall Street in packaging loans into securities for sale to investors. It also stacked its compliance department with the people who awarded the highest ratings to pools of mortgages that soon were downgraded to junk. Such products have another name now: "toxic assets."
As Congress tackles the broadest proposed overhaul of financial regulation since the 1930s, however, lawmakers still aren't fully aware of what went wrong at the bond rating agencies, and so they may fail to address misaligned incentives such as granting stock options to mid-level employees, which can be an incentive to issue positive ratings rather than honest ones.
The Securities and Exchange Commission issued a blistering report on how profit motives had undermined the integrity of ratings at Moody's and its main competitors, Fitch Ratings and Standard & Poor's, in July 2008, but the full extent of Moody's internal strife never has been publicly revealed.
Even the bias-averse Wikipedia (they scrub anything that presents even the appearance of bias) goes so far as to cite Moody's business model as suspect.
The "issuer pays" business model adopted in the 1970s by Moody's and other rating agencies has been criticized for creating a possible conflict of interest, supposing that rating agencies may artificially boost the rating of a given security in order to please the issuer. The SEC recently acknowledged, however, in its September 30, 2011 summary report of its mandatory annual examination of NRSROs that the subscriber-pays model under which Moody’s operated prior to adopting the issuer pays model also "presents certain conflicts of interest inherent in the fact that subscribers, on whom the NRSRO relies, have an interest in ratings actions and could exert pressure on the NRSRO for certain outcomes". Other alleged conflicts of interest, also the subject of a Department of Justice investigation the mid-1990s, raised the question of whether Moody's pressured issuers to use its consulting services upon threat of a lower bond rating.

Read more here: http://www.mcclatchydc.com/2009/10/18/77244/how-moodys-sold-its-ratings-and.html#storylink=cpy
Given the evidence, and the fact that McDucey knew of the need to try to bolster the credibility of his (and Moody's) claims, he goes for the head fake before presenting the information he wanted you to remember.

Additionally, even more recent than the McClatchy report, in 2011 The Guardian carried a story citing a former Moody's senior vice-president that further calls Moody's analyses into question.
A former credit-ratings agency executive has launched a stinging attack on the powerful organisations that can damage countries' economies and wreak havoc in the markets with the stroke of a pen.
William Harrington, a former senior president at Moody's, claims the organisation's senior management interfere with analysts' independent assessments.
Ratings agencies have attracted international opprobrium after Standard & Poor's, another of the three big agencies alongside Moody's and Fitch, stripped the United States of its gold-standard AAA rating.
Harrington, who worked at Moody's for 11 years until he resigned last year, said ratings agencies suffer from a conflict of interest because they are paid by the banks and companies they are supposed to rate objectively.
"This salient conflict of interest permeates all levels of employment, from entry-level analyst to the chairman and chief executive officer of Moody's corporation," Harrington said in a filing to the US financial regulator the securities and exchange commission (SEC), which is considering new rules to reform the agencies.
Harrington claims that Moody's uses a long-standing culture of "intimidation and harassment" to persuade its analysts to ensure ratings match those wanted by the company's clients. He says Moody's compliance department "actively harasses analysts viewed as 'troublesome' " and said management "rewarded lenient voting".
"The goal of management is to mould analysts into pliable corporate citizens who cast their committee votes in line with the unchanging corporate credo of maximising earnings of the largely captive franchise," he said in the 78-page filing submitted earlier this month. [Note that because The Guardian is a British publication, some of the spellings differ from what is traditionally used in American English]
Back to Scrooge McDucey's subterfuge.
So what does this upgraded credit rating say about Arizona?
  • It says that Arizona is a good investment.
  • It says that Arizona is open for business.
  • It says that Arizona is fiscally responsible.
  • It says that Arizona is headed in the right direction.
The fact of the matter is that IF use of Moody's rating and analysis was fundamentally sound, McDucey wouldn't have had to resort to misdirection to get people to believe the claims.

What Moody's report really says about Arizona is that it doesn't think it will get in trouble for vouching for the low risk inherent in debt instruments issued by Arizona state government.

It also says NOTHING about whether any other investment any business might make in any aspect of Arizona's economy is good, bad or indifferent. Further, it absolutely does NOT provide ANY evidence that Arizona's state government is at all fiscally responsible. The facts would suggest just the opposite. The current crop of lawmakers controlling the legislature (Republican) and Scrooge McDucey can only be judged as fiscally responsible IF that term is defined as driving state government into the ground.

Or, as my good friend state Rep. Andrew Sherwood describes it,
They've welded the gas cap shut, punctured the tires and poured sugar in the engine. Now they are telling people that the car is unreliable.
Last but far from the least, Moody's report says NOTHING about the direction Arizona is headed. Other indicators are, however, available to tell us the truth on that issue.

For example, when school districts are having to go to 4-day school weeks because McDucey and the legislature have cut funding, Arizona's not headed in the right direction.

As you can imagine, I could go on and on and on demonstrating how and why Arizona, with the current REPUBLICAN leadership is headed in exactly the opposite of the right direction, and the decisions they make are increasingly fiscally IRRESPONSIBLE when measured against metrics that describe quality of life for Arizonans.

I'll leave it to another post, for surely this trend will continue at least until we can change the direction by electing representatives and a governor who are not governed by the dominant framework of Ronald Reagan, Charles and David Koch, and Grover Norquist.

Given the very recent history of Kansas and McDucey's forerunner (Sam Brownback), what McDucey may really want is to grease the wheels for issuing more debt (than we already have) when the inevitable cash crunch that austerity will bring actually hits.

What happens when a person has a debt that can not be paid? Well, you go bankrupt. If you are a nation state, like Greece, and you have been straddled with debt from a small group of criminals, like the Troika (ECB, BOE and IMF) you have a couple of choices. You can allow the criminals to steal everything your country has that is valuable or you can stand up to them like Prime Minister, Alexis Tsipras and Finance Minister, Yanis Varoufakis have done and begin making demands. If you are the State of Kansas in the United States, well, you issue more debt to pay off the old debt and set policies based on hopes and dreams. 
The bottom line is that Arizona is headed in the wrong direction under the current governor and legislature. It's time for an about face. It's time for genuinely fiscally responsible elected officials. And the current crop of Republicans just ain't capable of getting that job done.

Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century.

Friday, May 8, 2015

A Livable Wage in FLAGSTAFF Arizona?

Last month, Flagstaff Living Wage Coalition filed suit in Maricopa County Superior Court seeking to strike down illegal legislation passed by the GOP-dominated legislature in 2013.
The lawsuit asks a Maricopa County Superior Court judge in essence to void a 2013 law which declares that only the state can regulate employee benefits, including compensation. That statute spells out that things like wages are “not subject to further regulation by a city, town or other political subdivision of this state.”
In other words, the legislature illegally preempted municipalities from enacting a higher minimum wage than that mandated by Arizona law.

In a nutshell, Arizona voters, in 2006, in the general election, approved Prop 202 by a nearly two to one, 65.4 percent to 34.6 percent. Prop 202, in pertinent part, adds section 23-364 to Arizona Revised Statutes. 23-364 I. (as added by Prop 202) (in part) states,
THE LEGISLATURE MAY BY STATUTE RAISE THE MINIMUM WAGE ESTABLISHED UNDER THIS ARTICLE, EXTEND COVERAGE, OR INCREASE PENALTIES. A COUNTY, CITY, OR TOWN MAY BY ORDINANCE REGULATE MINIMUM WAGES AND BENEFITS WITHIN ITS GEOGRAPHIC BOUNDARIES BUT MAY NOT PROVIDE FOR A MINIMUM WAGE LOWER THAN THAT PRESCRIBED IN THIS ARTICLE.
But in 2013, the legislature, in a narcissistic act, and in violation of the 1998 voter-approved Voter Protection Act passed HB2280 and Brewer signed it into law. The bill added ARS § 23-204 A., which states (in full),
The regulation of employee benefits, including compensation, paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern. The regulation of employee benefits pursuant to this chapter and federal law is not subject to further regulation by a city, town or other political subdivision of this state
The legislature probably would not have even tried to get away with this blatant violation of the Voter Protection Act if Prop 202 had included one additional provision, namely to strike the previously added 23-362 from ARS. That version (added by Laws 1997, chapter 51) states,
A. The legislature declares that the establishment of a uniform minimum wage is a matter of statewide concern.
B. No political subdivision of this state may establish, mandate or otherwise require a minimum wage that exceeds the federal minimum wage prescribed in 29 United States Code section 206.
In other words, pissed off about the Will of the (2006) Voters, Tom Forese, then (in 2013) chair of the House Commerce committee, sponsored HB2280. HB2280 failed to pass by a margin that would have satisfied the requirements of the VPA (a supermajority of 75 percent of each chamber) which would then have precluded the lawsuit by the Flagstaff Living Wage Coalition.

Tom Forese, by the way, is now an APS-owned captured regulator over at the Arizona Corporation Commission. He was the ONLY sponsor of HB2280.

Forese and probably plenty of others at the legislature knew full well that they were violating the VPA. They did this purposely. They also likely fully expected this lawsuit, though they may not have anticipated WHEN the legal challenge would be filed. Like with the redistricting suit heard in March by SCOTUS, this was a conscious act to harm workers (voters) in our state.

Preemption is a familiar tool in the legislative tool box. They've done or attempted to do so regarding firearms regulation, plastic bag bans and minimum wage, and no doubt plenty more matters. They do it because they can.

Eva Putzova, Flagstaff city councilwoman and chair of FLWC, also filed an affidavit supporting the complaint. From the affidavit,
The core of the Coalition’s activities focuses on bringing about positive labor policy changes and on community organizing to achieve the goal of all working people earning wages that afford a decent life in Flagstaff.
On the Maricopa County Superior Court's online docket, you can check the status (for case CV2015-004240). Councilwoman Putzova advised me this evening that she expects the Attorney General's office to file a response to the complaint by May 15.

The bottom line, and why this lawsuit SHOULD be a slam dunk, is that when language in statutes conflict the courts interpret and tease the ambiguity out of the conflict. In this case, the conflict is clear and plain between legislation enacted by the legislature in 1997 and 2013 and that enacted by the voters in 2006.

In a pissing contest between the voters and the legislature, the Arizona Constitution clearly sets forth that the power resides with the PEOPLE. Article 2, Section 2 states,
2. Political power; purpose of governmentSection 2. All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights. 

Does it say the powers are established to protect and maintain the rights of Big Corporations?

By the way, if you're afraid this lawsuit will cause the price of hamburgers at Jack-in-the-Box in Flagstaff to skyrocket, you can rest assured, the economics do not supply any legitimate basis for such fear. Perhaps on another post, I'll link to or otherwise provide a Kahn Academy style lesson showing that a rise in the cost of labor at such a restaurant would likely cause a price increase of less than $.25 for that burger (and that's a high estimate) in order to support the new wage without impacting the net income for the business owner.

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In the meantime, here's what's really at stake.



On the other hand, here's why I believe Arizona Republicans were pissed off and purposefully intended to defy Arizona voters. From the Prop 202 publicity pamphlet, the first argument presented demanding (in a sweet, but still fallacious tone) that voters vote NO on the ballot measure, signed by now disgraced former Senate President Russell Pearce,
Fellow Arizonans join me in voting no on Proposition 202. Setting a state minimum wage at a rate that is almost 28% higher than the federal minimum wage and increasing it every year by indexing it to the cost of living is bad public policy. It will have severe damaging unintended consequences that our state cannot afford. Most importantly it will make our already intolerable illegal alien crisis even worse. We will be providing the worst of both worlds in creating economic incentives that will only serve to further attract more illegal aliens. On one hand many employers will find themselves forced to cut back on employment in order to accommodate the minimum wage. Unscrupulous employers will opt for employing illegals off the books at below minimum wage to maintain their business operations. This will be taking jobs away from our own citizens, promoting an expanded underground economy and depriving our state of tax revenue. Just as important on the other hand is the enhancement to illegal employers to risk the consequences hiring of illegal aliens. By setting an artificially high minimum wage illegal aliens will now have a greater incentive to enter our country and enjoy even higher rewards for being here. Making our state even more attractive to illegal immigration is something that makes no sense. Rather than creating more incentives for illegal aliens through the creation of an artificially high state minimum wage we should be pursuing policies to reduce the economic incentives for illegal aliens. What should be done is reduce government burden on small businesses and allow free-market concepts to work. That is what made America so great. I urge fellow Arizonans to vote no on Proposition 202. (emphasis mine)

  • Pearce opens his argument with a claim that it's "bad public policy." 
  • He claims it will have "severe damaging unintended consequences."
  • Next, as his first effort to "prove" those claims, he invokes the invective, "intolerable illegal alien crisis." Because he failed to set forth any evidence of the consequences of the immigration crisis, that puts Pearce's statement completely in the category of demagoguery and baseless propaganda.
  • Without support, and economically wrong, he said "employers will find themselves forced to cut back on employment in order to accommodate the minimum wage." Ask yourself, WHEN have you EVER heard of ANY employer cutting jobs because of high wages? Ever? No! Instead, they eliminate jobs when they don't have adequate revenue (sales) to support the work the workers do. Okay, some traitorous big companies ship jobs they can ship overseas because of costs. But the jobs they can't send offshore are ONLY eliminated when there is NO DEMAND. What is the ramification (natural consequence) of putting MORE money in the pocket of workers? They SPEND it. That INCREASES demand.
  • "What should be done is reduce the government burden on small businesses and allow free-market concepts to work." Again, because he clearly has no idea what the economic principles actually involve, he provides ZERO support for this claim. Government burden on small businesses is nothing more than Kochtopus code intended to pull the wool over the eyes of those without critical thinking skills. 
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I will continue to monitor the lawsuit and update when the AG files a response to the complaint. Additionally, as I've mentioned before, I'm now reading David Berman's latest book which is a political biography of Arizona's first governor, George W.P. Hunt. You can thank Governor Hunt for having strongly advocated for the constitutional provisions on direct democracy -- initiative, referendum and recall. More on that subject when I finish the book. 


Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century.

Friday, May 1, 2015

Redistricting Reform Act of 2015 introduced in Congress!

On Thursday, 15 Members of Congress introduced the Redistricting Reform Act of 2015 in the House of Representatives.

The bill will require States to conduct Congressional Redistricting through Independent Commissions and sets forth a framework for ending the two-century old practice of gerrymandering. From Common Cause:
The Redistricting Reform Act of 2015 includes:
- Requirement that every state establish an independent, multi-party redistricting commission to draw Congressional district maps.
- Prohibition against allowing individuals with conflicts of interests – such as lobbyists, political donors or party operatives – to serve on the commissions.
- Requirement that commissions reflect the diversity of the state and operate transparently.
- Criteria for drawing districts, mandating that they:
        • have equal population in accordance with the U.S. Constitution;
        • comply with the Voting Rights Act of 1965;
  • be geographically contiguous and compact, as well as have boundaries that minimize the division of any community of interest, municipality, county, or neighborhood.
  • - Ample notice from the commission and opportunity for the public to provide input and engage in the redistricting process.

The 15 sponsors are all Democrats. Only one member of the Arizona delegation signed on so far, Raul Grijalva (D-Arizona's Third District).

Normally, this is where we see reporters or pundits write off a proposal put forth only by Democrats because both chambers of Congress are controlled by Republicans. And that's what happened in a USA Today story by Susan Davis.
With Republicans in control of both chambers of Congress, the Democrats' bill is unlikely to gain momentum unless it can bring on GOP sponsors and support. While gerrymandering has critics in both parties, Republicans are unlikely to support weakening the states' role in the process.
But Ms. Davis takes it a step farther by characterizing this proposal as "weakening the states' role in the process." That, of course, is complete bullshit. This proposal only weakens the elected state legislatures' roles in the process, but it dramatically strengthens the role of the PEOPLE of each state in the process.

I don't know what is in the constitutions of all 50 states, but I do know about Arizona. Article 2, Section 2 says,
All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights. 
The Redistricting Reform Act of 2015 addresses the long-standing and deeply-ingrained problem of gerrymandering and has the power to make moot any adverse decision the Supreme Court might hand down in Arizona Legislature v AZ Independent Redistricting Commission.

Therefore, while the GOP-controlled Congress may be reluctant to enact redistricting reform, we have learned quite well over the last few years that citizen action can rise to a level to compel Congress to act and to do so appropriately. [Consider the 2014 scandal in the Veterans Health Administration]

At this time, I strongly recommend each reader call AND write their Congressional representative to assert the request that each of them sign on as co-sponsors and enthusiastically support passage of the Redistricting Reform Act of 2015.

In fact, I also invite each of you to sign my petition on Change.org calling for passage of this bill. Here's some lawmakers in North Carolina talking about a reform measure before that legislature.



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Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century.