Monday, April 20, 2020

Major Cracks in Human Resources and Management in the American Grocery Industry Made Transparent during the Coronavirus Pandemic

For a certain personality-type, character, or mentality, it is easy to blame other people while remaining silent on one’s own mistakes (and mentality). This approach can be particularly harmful during a pandemic, for one’s own mistakes could be passing on the infectious illness. Such mistakes include refusing to maintain a physical distance from other people in public places and retail stores. As noxious as the blaming is, a more significant anthropological point may be that as a social and habitual animal, the human being may not be mentally advanced enough to keep a distance from other such animals even for self-preservation. I don’t think the instinctual urge for socializing exhausts the explanation, for the failure (and even refusal) to respect others enough to keep at a distance even when they ask surely involves weakness that manifests psychologically beyond merely having a bad attitude. Not even the artificial organizational-management systems our species has established are a match for the toxicity of a weakness that is even just passively aggressive toward other people. I contend that American management is susceptible to an even more severe weakness; one that foists organizational power as a club even on customers. 

In mid-April, 2020, in the midst of the coronavirus pandemic, “some worker experts, union leaders and small grocery store owners” were claiming that it had “become too dangerous to let customers browse aisles, coming into close range with workers.”[1] The president of the United Food and Commercial Workers’ union pointed to “careless customers” as “probably the biggest threat” to the workers.[2] According to that union, “85% of its grocery store member workers reported that customers” were not literally going even a bit out of their way to maintain a physical distance from other shoppers and employees.[3] With supermarkets struggling to convince customers to wear masks, the union's president also said that he was urging grocery stores to make masks mandatory not only for employees, but also customers. "Everyone must wear masks," he insisted. [4] Too many customers were endangering lives. Wearing a surgical or handmade mask could not prevent the virus from being inhaled; rather, such a mask prevents the mask wearer from sneezing or coughing near another person, increasing the likelihood of infecting him or her (infection could also result from breathing regardless of whether masks are being worn). In other words, wearing a mask protects other people, so not wearing one does not indicate a weakened motive of self-preservation, but, rather, a lack of consideration and even empathy for other people. It is quite selfish, as is walking or standing by another person. 

From my own experience in several Albertsons, Kroger, Target, and Sprouts stores in Phoenix, Arizona, I saw the vast majority of customers—perhaps all of them—fitting within the union’s statistic on the lack of physical distancing. 

This customer headed directly toward me. I asked him to maintain a distance and reminded him that the aisle is one-way due to the pandemic. He showed disgust, but turned around. Disgust at me, rather than recognition that he was in the wrong. Presumptuousness on top of not being responsible. 

                                                    

                                                            



In fact, I encountered a few customers who verbally lashed out at me for asking them to keep a distance due to the pandemic as they were about to closely approach me and thus blatantly dismiss the two-carts-apart policy of the stores. In one case, the Albertsons  (Safeway) store manager was very near and yet in spite of having witnessed the violation, he refused to chastise the customer not only for violating the store’s policy of “social” distancing, but also being verbally aggressive toward me. “I think we should just let it go,” the manager told me as I looked at him in utter astonishment.


At another Safeway store, a customer headed directly at me and refused to back up, even to let me back to the products where I had been. Then he assaulted me by slamming my cart until it blocked the aisle. The sordid Phoenix police, whom I asked be called, turned it on me. I had assaulted the customer by blocking the aisle! The contrarian attitude of the seven or eight police who responded to my initiated call was as obvious as their confrontational postures toward the victim--me!

In fact, I had not seen one employee or manager of a grocery store bother to enforce the policy of “social” distancing since the U.S. Center of Disease Control issued guidelines and the Arizona government issued an order to maintain a physical distance of six feet from other people unless necessary. With regard to the masks, and I submit on the distancing too, stores generally were "reluctant to antagonize customers by turning them away."[5] According to a Wegman's spokesperson, the chain wanted to minimize "the likelihood of conflicts in our stores" and would "not put our people in the position of having to deny entry to our stores," even in states where masks in public settings are required.[6] In other words, the company's management was not even willing to conform to government orders. I saw the same refusal at Albertsons, Kroger, and Sprouts stores in Arizona. In Los Angeles in neighboring California, customers had to wear masks or coverings in stores, but Kroger (Ralphs) was not enforcing the government order. In fact, a store manager reprimanded an employee for having asked a customer to wear a mask. "I was told that it was none of my business and that I was not the mask police," the employee later reported.[7] She was being quite reasonable in wanting to protect herself. 

At the time, New Jersey, Maryland, New York, Pennsylvania, Connecticut, Hawaii, Miami (Florida) Austin (Texas), Washington, D.C. and some others had orders mandating that grocery shoppers wear face coverings or masks in the stores, yet no penalties go to noncomplying customers or stores. Only a handful of smaller grocers in the U.S. were requiring customers to wear masks. The medium and large companies, however, were putting expediency on revenue before the safety of two major stakeholders: the employees and customers. 

Such stakeholder management is unethical because it prioritizes company gain even at a time when the business was good before the very lives of others. Yes, even employees can be thought of as others to a company's management that is oriented to the company's profits and executive bonuses. Utilitarianism is violated because the greatest good is not provided to the greatest number (of people). Even were a major chain to risk going out of business by enforcing physical distance and mask-wearing on customers, the industry was too important during the pandemic not to get money from the U.S. Government. So the executives' mindset was one of selfish enrichment over consideration and even empathy for others who could suffer greatly and even die as a result. Hume's theory of moral sentiment has it that the sentiment of moral disapprobation that people would naturally feel looking at the sordid refusals to enforce even government orders is the moral judgment against the companies. Kant would point out that the executives (and store managers) were not treating those put at risk as not just means, but also as ends in themselves (for they are rational beings worthy of intrinsic value). 

To be sure, I had seen plenty of employees and even store managers violating their own company's policy on physical distancing both between themselves and as inflicted on customers through callious disregard. Such behavior is also unethical.

For example, a store manager of a Sprouts store, whose nitch was supposedly still healthy foods, stood just behind an employee who could not wait a few seconds until I would emerge from the narrow hallway from the bathrooms to enter without passing me at close range. “He tried,” the manager said when I asked the manager why he was not enforcing his store policy (and CDC guideline) on his own employees. As I pivoted to exit the store, I glanced around to see another employee come up right behind me to grab something, with of course her manager looking on. 

The next week, while I was waiting outside far to the left of the entry to the same store, I asked an oncoming employee to keep a distance as she passed by. She did not alter her course. She even hurled insults at me, including, “Maybe you should bring a ruler.” She then said to a customer, who also thought my request had been unreasonable, “There is something wrong with customers who ask me to keep a distance. I get thirty customers everyday asking me to keep a distance.” One implication is that she had not been maintaining physical distance much at all in the store, which implies that the store manager was not enforcing the policy on his employees. This inference is consistent with my observations by then of employees at several Kroger (Frys) and Albertsons (Safeway) grocery stores in Phoenix, Arizona. 


This Kroger (Frys) store manager was not even maintaining a distance from an employee even in just talking. How could it be expected that the manager was enforcing the policy on his employees given that he was not enforcing it on himself?

This Albertsons (Safeway) department head and employee walked close by me twice without a thought between them on the risk they were posing to a customer. 

This Kroger (Frys) employee, who worked at the self-check-out stations (and thus close to customers), lied to me that she had tried to keep a distance from me in an aisle. Walking on the other side of the pillar at the end of the aisle would have counted as trying. 

The Albertsons (Safeway) employee on the left had been even closer to the other employee's face in passing close by before stopping to talk. Two-cart-lengths distance was the store policy and Arizona's guideline.

Not once did I see an employee even move to the other side of an aisle in passing a customer. Not once did I see an employee bother to move out of the way to give a customer some distance. “I’m trying,” one employee told me even though she had not even bothered to move from the center of an aisle when she passed me. I, however, was hugging the other side. I held back from replying, “You’re not trying enough.” I don’t think she was trying at all. She was lying. In general, I had the sense that employees thought it was rude for customers to ask that the store policy be followed. At the very least, employees didn’t want to follow the policy, and their managers were not enforcing it. Even cashiers managed to evade the clear plastic screen between them and the customers checking out. I was speechless when a cashier moved her head around the plastic to hear me better at close range. Apparently she didn't think there was a pandemic going around. Perhaps her store manager had believed that scant training was sufficient for the employees. 

  
The upper sign asks customers not to talk to employees around the edges of the plastic that covers most of the desk area.


The plastic screens at Kroger (Frys) grocery check-out stations are too narrow because the plastic does not cover the area where customers pay even though the distance from the cashier is close. Also, the area at which customers spend considerable time unloading carts and waiting is also too close to the cashier to be unprotected by the plastic. 

This video demonstrates that the plastic screens at check-out are insufficiently narrow because they do not cover the area between the cashier and customer during the payment phase. Even though I told the cashier that she was too close to me, she did not back off while I was paying. Instead, she chastized me for pushing a wrong button on the keypad. "We could be infecting eachother right now," I said. "I know," she replied. 

Even so, as I was taking a photo of the sign ironically just behind her station, the cashier backed away from the next customer as she paid. The cashier was staring at me to present the illusion that she was following the guideline of "social" distancing. I wish she had been less social with me.

Therefore, it would be one-sided to conclude that employees needed more protection from customers because customers also needed protection even though managers and even employees themselves in some cases felt free to inflict on customers asking for such protection. Even more so than refusing to enforce policies and even government orders, aggressively blaming the victim is not a viable long-term strategy for retaining good customers and minimizing the number of bad employees. 

The thought of Friedrich Nietzsche, a nineteenth-century European moral philosopher, anthropologist, and philologist, is useful in providing a deeper explanation. He would say that both the employees and customers were behaving like herd animals too weak to master their base instinctual urges, including selfishness, greed, and the desire to aggressively lash out at other people. Selfishness out of weakness is not necessarily in line with furthering self-preservation; ignoring the physical-distancing policies and guidelines ran contrary to the egoist urge of self-preservation. 

The industry needed ethical leaders willing to go beyond what is convenient and expedient for the companies. Even the head of at least one major labor union sought to blame customers while looking the other way on the sordid lack of regard that at least some members were displaying for customers. Only a child would say, "I won't step out of my way in the least," and then, if caught, lie, "I tried" as the lack of effort had somehow not been noticeable. 

Nor were any of the store managers in the stores that I surveyed leaders, for they were not strong enough to enforce the health guideline and store policy even on employees. Nietzsche would explain those managers as herd animals with an extended urge to dominate without the requisite strength.[8] The indictment, therefore, exposed during the coronavirus pandemic in the United States, is that retail-level managers may not be strong enough to manage stores. Generalizing so from my unscientific sample can of course only be taken as a rough-draft yet to be verified. That I saw the same pattern in every store gives me confidence that I am correct, but here I am on more solid ground in relating my observations to Nietzsche's psychological-anthropological theory. 

According to that theory, the herd animals who cannot resist their urges to dominate even without being strong enough compensate through aggression, including intending to be cruel. In contrast, a strong conqueror does not intend to be cruel, but is instead oriented to overcoming both external and internal obstacles.
 
So I was not completely surprised when an assistant manager with an employee of a Kroger (Frys) store in Phoenix, Arizona stalked me around the store because I had photographed the store manager talking at close distance with one of his employees, an employee who had refused to keep a distance from me, and a customer who had mindlessly come up to me like a herd animal moving on to the next clump of grass. These people, even the manager, violated the store policy (and CDC and state guidelines) on maintaining a physical distance from other people. Neither man was wearing a mask. Had they been more clever, they might have combined their two infractions by walking up to me and sneezing or coughing. 

The (assistant) manager not only felt the need to be confrontational and insulting toward me in a way that indicated that he really wanted to attack a customer, but also missed an opportunity to hear from a customer with proof that the store's employees were serially violating the store's policy on physical distancing--even violating a governmental guideline or order on "social distancing." In other words, the head of a large union was wrong in blaming only the customers! 

A self-confident, strong assistant manager (which may be an oxymoron) in the store would have asked me at the time why I had taken pictures instead of accusing me even though he still didn't know for sure and the management had not posted signs prohibiting photography. I would have explained that I had photographed only some infractions in which I was being but in harm's way, and that the company stood to benefit. Several days later, I had chance, impromptu  meeting in the parking lot of an Albertsons (Safeway) store with a woman who works with the county's Environmental Services department. I learned that her department had no clue that the stores were not enforcing the government guidelines on physical distancing. Referring to my earlier experience at Krogers (Frys), she said my photography was justified. "You were collecting evidence!" I had also been holding my phone up as a possible deterrent (i.e., another customer or employee approaching very near would presumably not want to be photographed). 

And yet, the (asst) manager had been accusatory, and in this sense confrontational as if he had already made up his mind that I was guilty. He and his young sidekick employee were in a hunting mode, so I did not feel comfortable bringing my earlier complaints to them. 
The two men left me, or so I first thought, but the sidekick was keeping an eye on me. Both men waited to pounce on me just after I had paid for the groceries. The assistant manager walked fast to me in an aggressive manner and shouted insults at me as if he were a policeman. "I heard from a customer and employee!" he said in a loud, threatening voice without bothering to even consider that the complainers might have been retaliating against me for getting evidence of their wrong-doing. Instead, he was an extension of their self-righteous fury. 

He even shouted at me to leave the store even though I was already outside! That he was motivated to make the demand even when I was walking away, outside the building, suggested to me that he was motivated to lash out at me for its own sake--for the pleasure that comes from even positional power. Tellingly, even though I was pushing the cart into the parking lot, the manager threatened me, "You need to leave or I'm calling the police!" There was at the time a local law against calling the police for frivolous reasons. "But he was already leaving," the police would have told him. 

Because I was obviously leaving, Nietzsche would say that the man (and his sidekick) was weak which is to say, sick. A strong person would have let the matter go when I was paying for the food and leaving the store rather than act out of resentment and an urge to subdue. A strong manager makes a point and then moves on; a weak manager cannot let go--cannot master--his or her pressing institual urges. Such mastery is the richest source of the pleasure than comes from power--far richer than acting out against a customer already leaving the store. 

The (asst) manager's young sidekick had not kept at a physical distance from me twice when we were inside of the store. That he violated the store policy even as he was questioning me as if he were a detective demonstrates weakness primping itself into dominating inspite of itself. In fact, the seccond time he had come close, I positioned my cart between him and myself (two cart-lengths was the policy, as per the recurring announcement that he presumably had heard often enough). He was stunned that I would protect myself, such was his feeling of entitlement. 


Major cracks in Kroger's human resources and store management occasion smaller cracks in customer's "loyalty" cards.

Nietzsche urges the strong to keep a distance, a pathos of distance, from the weak. If you go to a hospital, you risk getting infected by the sick. So don't hang out in hospitals. Unfortunately, I did not practice enough social distancing from the weak yet aggressive birds of prey at a Kroger Frys store in Phoenix even though the pandemic there had rendered the weakness suddenly blatantly transparent. It is tempting to engage with the birds of prey, but it is a trap, for they lure stronger people in, perhaps out of resentment for the inner weakness that the weak sense, in order not to conquer but instead to inflict. Such invisible birds of prey are infectious in that even the healthy can be beguiled into going down to the birds' acrimonious level. Nietzsche's writing style, which I am reflecting in this paragraph, certainly does not mince words; both the herd animals and those from within who dominate the herd and beguile the strong to dominate them too are sick.  

Physical distancing can thus be distinguished from social distancing; the former is advisable during an infectious pandemic and both kinds of distancing are recommended for a person who is confronted by weak, confrontational (and even aggressive) retail employees and managers. 

To be sure, not all retail employees and managers are weak, but that restless birds of prey survive in retail stores reflects badly on retail companies, including their internal accountability. Put another way, without empirical studies in the stores, it is not possible to know the percentage of workers and managers who have been infected or are innately sick--the weak cannot be but weak, and the strong cannot be other than strong. Yet the severity of the sickness suggests that the company or even the industry is unduly susceptible to the weakness and its being able to even beguile the strong into being dominated in fear. Put another way, the behavior can violate customer service so deeply that the presence of a kind of brain sickness can be inferred. 
The sheer extreme to which the Kroger (asst) store manager and his young sidekick allowed themselves to go in verbally attacking me as I walking toward the main door and even outside of the store, without instead asking why I had used my phone to record the lack of physical distancing in the store by customers, employees, and even a manager, demonstrated to me at least that something was wrong with the two men. They wanted to go beyond insults to be cruel in their aggressive walking after me, scolding me, and threatening me. 

The young sidekick's bizarre behavior was also a red flag concerning his underlying sickness (and mentality). Outside of the store, as I was heading into the parking area, he loudly threatened me, "Taking pictures on private property is Very illegal!" Then he immediately (and fakely) repeatedly thanked me for shopping there! Did he then think he had exercised good customer service? 

He obviously thought he knew the law, as did his boss, even though the company had posted no signs prohibiting photography and I had not used my phone-camera after the two men had initially accosted me in the store (they lied that a customer had complained, hiding that an employee had also complained). Also, as the employee of the county's Environmental Services department later told me, I was not breaking any law recording evidence. Of course, the sidekick would doubtlessly have declared that such taping is illegal! Perhaps I should have called his bluff. In hindsight, I wish I had taped the (asst) manager and his sidekick shouting at me from the check-out area to the parking area. Evidence! Perhaps it was out of fear of this that the manager threatened that he would call the police even though I was leaving anyway. At the time, I didn't want to trigger the aggressive birds beaming down from their perches. In actuality, the customers should be on perches!

It is interesting that an employee and customer who were violating the store policy (and government guidelines) on physical distancing  decided to retaliate against me by reporting on me rather than cease their problematic, and perhaps even dangerous, inconsiderate conduct. I held my phone up in part to dissuade them from continuing to proceed so closely to me (I also asked them, but they refused), but to no avail. They were oblivious to what they were doing, but not to what I was doing. I submit that they felt resentment--ressentiment--rather than remorse; they lashed out, rather than offered even just an apology.  They would thus be likely to continue their risky behavior. 

I contend that the mentality was by 2020 so ingrained in Arizona that the government's guidelines on physical distancing were insufficient, given the people there. Even an order would have had to be enforced by law enforcement, especially as the stores were not willing to enforce even their own policies on wearing masks because doing so could compromise earnings. 

The mentality was so prevalent among the general public (notably in the middle and lower economic classes) in at least Tucson and the Phoenix metropolitan area that aggressiveness toward strangers was very apparent to people new to Arizona. "The people here are mean as rattlesnakes," one person told me. The people native to Arizona have blamed people coming in from other U.S. states, but even such convenient deflection is actually part of the culture in the state where cacti prick. In fact, culture-shock in moving to a major city in Arizona includes adjusting to the obvious "police state" mentality, wherein security guards and the police easily partake of the excess aggression. Overly, and I suspect intentionally visible security guards even standing next to an off-duty police employee were not uncommon at Albertsons (Frys) stores in Phoenix. As this was not the case at other grocery chains there, I submit that desire to intimidate customers is a revealing part of Albertsons' corporate culture in Arizona. That is, the company's culture there reflected the societal culture.  


A security guard stands in a confrontational stance at an Albertsons (Frys) store in Phoenix, Arizona. 

The (assistant) manager and his sidekick were clearly at home in such a societal and corporate culture. At the store level at least, it was permissible to intimidate customers by an excessive show of even police force on a routine basis and verbally and physically harass customers. It is not the sort of company culture that would be conducive to managers and employees mastering their sordid instinctual urge of aggression. The instinct to be considerate towards other people, on the other hand, would not receive its due respect. 

In being so motivated to be unnecessarily aggressive toward me because an employee had complained, the (asst) manager was enabling the employee's sick game. Two birds of a feather fly together, Nietzsche would say. The healthy cannot be blamed for cutting up their store cards in order to maintain a pathos of distance from the sick. Strength can only be frustrated by weakness. This is the epitomy of the sickness that Nietzsche describes in his texts.  

So in proclaiming the law as if he could not be wrong about it and assuming that customers should know that the company prohibits photography without being told or seeing any signs posted, the sidekick not only demonstrated his ignorance, but also lashed out at me. At the very least, this anadote strongly suggests that retail is susceptible to weakness wanting to dominate even the people to be served. In fact, the managerial role itself may be susceptible as control is so salient.[9]

In the Kroger store, two birds of prey flied too close to me, literally circling me and hovering within the store and pursuing me as if I were their prey outside, as they smelled an opportunity to eke out a bit of pleasure from inflicting repressed ire (sourced in self-resentment, which is deeper than the resentment against the strong) on a customer. Customers conveniently look weaker to faint, greedy eyes from the birds' soiled perches. I regret not having photographed the birds so you too could be astonished at the severity of the sickness of the weak, but I promise the manager and his sidekick were nothing to look at. 


[1] Nathaniel Meyersohn, “Experts Say It May Be Time for Grocery Stores to Ban Customers from Coming Inside,” CNN.com, April 19, 2020 (accessed same day).
[2] Ibid.
[3] Ibid.
[4] Nathaniel Meyersohn, "Stores Want Shoppers to Wear Masks. But Some Customers Refuse," CNN.com, April 23, 2020.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Skip Worden, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management.
[9] Ibid.


Tuesday, April 14, 2020

Post-Pandemic Plans in the U.S. through the Lenses of Federalism

I take it as a basic maxim of federalism that problems infecting the entire federal geography uniformly are best tackled by the federal government, with the involvement of the polities (governments) within the federation being in sync with the federal mandates. Problems that plague some polities while barely leaving a scratch on other polities within the federation are best solved by the individual polities because their situations differ appreciably. The federal government’s role would be more about coordination than setting one size that fits all. Federalism is especially beneficial at the empire-scale, which the U.S.S.R., Russia, India, China, the United States and the European Union have, because the large geographical size tends to be diverse, or heterogeneous, within, whereas the smaller republics, provinces, or states within tend not to be so large as to have such striking differences. Hence, the cultural differences between Bavaria and Bremen are dwarfed by the differences between Germany and Greece, and the differences between Northern and Southern Illinois are dwarfed by the differences between Illinois and Texas. So it is only natural, I submit, that U.S. and E.U. state governments took the lead in combating the coronavirus pandemic because it was a much more serious problem in some states than others.[1]

In the E.U., initiatives by the state governments to open their respective economies did not face an assumption of a monopoly of power by the president of the European Commission, whereas in the U.S., the federal president came down hard on state governments even just announcing that they had devised plans without timetables to reopen. When on April 14, 2020 the Austrian government allowed small businesses to reopen (albeit with physical-distance requirements still in place), the heads of the California, Connecticut, and New York governments were pushing back against the federal president’s claim to have the sole power to open up the American economy.

A day earlier, on April 13, 2020, the governments of New York, New Jersey, Connecticut, Pennsylvania, Delaware, Rhode Island, and Massachusetts had announced that they had a coordinated plan to reopen all of those economies at the same time when the medical conditions in those states warranted doing so. California, Oregon, and Washington also announced that they had their own respective plans (without a timetable), but had agreed on some criteria to have in common. Even the two clumps of states on two coasts of a continent differed in terms of interconnectedness, so the eastern group would more strictly coordinate reopening the economies than would the west-coast group. Federalism can thus accommodate even differences between clusters of states!

California had managed the contagion so well that its government was well justified, I submit, in drawing up a plan to suit its own situation rather than to wait on a federal plan that would presumably hinge on all of the states being out of danger. Because the states’ respective situations differed at the time (New Orleans in Louisiana was particularly sick at the time), it made sense that the decisions would be made at the state rather than the federal level. Due to the small size and interconnectedness of some of the states in the northeast, it made sense that the governments would coordinate.

In contrast (and still from the standpoint of federal theory), it was not wise of the federal president to insist that the governments within the Union could do nothing in opening up their respective economies without his approval. Responding to the plans just announced, President Trump said, “When somebody’s president of the United States, the authority is total. And that the way it’s got to be. It’s total. It’s total. And the governors know that.”[2] His stance sounds a bit like federal preemption on steroids. In other words, he was refusing to allow federalism to work. More specifically, he was refusing to allow federalism to operate even though it could proffer its unique benefit.

Were the pandemic pretty much the same in all of the states, including Hawaii and Alaska, then one response would make sense; differential responses would have little benefit from being different and could be less efficient than the proverbial one size that fits all. This would also assume that the economies in the U.S. were similar both in how negatively they had been affected from the shutdown and in how they would bounce back. States like Arizona, Florida, and Hawaii in which the tourism industry made up a significant part of the respective economies, might need to bring their economies back to life before other states, other things (such as the virus) equal. Similarly, governments of industrial states would doubtless look at planting to harvest season. Many variables would be in play in any decision to lift the shutdowns, and even the variables themselves could differ from state to state.

Gavin Newsom, California’s chief executive and head of state, listed the following variables just in what the government would have to be to do by the time the fifth-largest economy in the world opens: “expand testing to identify and isolate the infected, maintain vigilance to protect seniors and high risk individuals, . . . meet future surges in hospitals with a ‘myriad of protective gear,’ continue to collaborate with academia on therapies and treatments, redraw regulations to ensure continued physical distancing at businesses and schools and develop new enforcement mechanisms to allow [California] to pull back and reinstate stay-at-home orders.”[3] Doubtless he also intended to look at many other variables, including how damaging extending the stay-home order would be to the economy. Tourism and agriculture (e.g. wine harvesting) would be two of the variables within the economic rubric. Even so, Newsom emphasized the importance of scientific variables. In other states, as well as at the federal level, economic variables could have the upper hand. Hence, the rationale for having the state level at the forefront, with the federal government playing more of a coordinative function and issuing lowest-common-denominator policies that would set a common floor that fits all of the states’ respective circumstances, takes into account ideological differences on how to weigh science relative to economy. With desperate independent oil producers pushing for a reopening of the Texas economy, the economic variables could be expected to hold sway there. Moreover, the business lobby’s power could be expected to differ relative to other special interests in the States.

A federal-level decision, which would have to be based on a fixed set of variables applied to an empire-scale, would tend to include over-generalizations, or averages that do not match with the statistics of any particular state.  As of the morning of April 12, 2020, for example, 22,105 deaths had been linked to the virus in the United States. It cannot be assumed that these deaths were geographically spread out even proportionately in the U.S., for New York accounted for 10,000 deaths alone. Half of the U.S. population was not living in New York, let alone New York City. Whereas New York’s Andrew Cuomo had warned that New York’s plight would roll across the continent and beyond, and thus that New York’s strict measures would eventually fit every state, some states, like Kansas, North Dakota, and Nebraska, were not much affected by the coronavirus when the federal guidelines went into effect. Those guidelines could make it possible that such states might never reach the severity of New York’s plight.

In short, federalism contains benefits even just from its design that can play a positive role in how governments of and in federal systems managed the coronavirus pandemic. Because the semi-sovereign E.U. states held more sovereignty than did the federal government, it was easy for those states to enact uniquely fitting policies without a heavy, squashing hand from Brussels. The U.S. states, whose actual sovereignty was much less than that of the U.S. government, were surprisingly able to take the lead in issuing guidelines and orders, but the asymmetry of power kicked in when some states continued on to announce plans for reopening even though no timetables were included. Of course, the risk to the E.U. was that guidelines or orders issued by state governments could give rise to interstate conflicts or detract from the good of the whole (i.e., Europe). Ideally, a federal system contains a balance of power so both universal and particular needs are accommodated.



1. I don’t feel the need to look smart by using the particular scientific name, covid-19, especially when coronavirus is sufficient for readers to understand which virus to which I am referring. As this is not a scientific writing, but is instead a piece oriented to the general educated reader, using a scientific term not only does not fit the genre, but also is less widely known and thus understood.  
2. Jeremy White, “Trump Claims ‘Total Authority’ over State Decisions,” Politico, April 13, 2030.
3. Maeve Reston, “California Governor Outlines Plan to Reopen in Conjunction with West Coast States,” CNN.com, April 14, 2020 (accessed same day).

Monday, March 30, 2020

Strong and Weak Management: The Case of American Bus Companies and Regional Transit Authorities

By the end of the 2010’s, city officials in several American cities were rethinking bus service in a fundamental way; the passenger-fare revenue model was being questioned, and in some cases replaced with a model that fit better with serving poor people and changed local business environments. Yet the downside effects on the bus companies of trends, especially regarding ridership, may have been the result of internal organizational factors immune to a change in the revenue model. I contend that city officials and the managers of bus companies should resist the temptation to view a new model as a cure precisely because some problems, internal to the companies, could go on and silently undermine analysis of the new model such that it could erroneously be discontinued. To be sure, being willing to question a longstanding model is a mark of managerial strength. Indeed, it is precisely the managers of bus companies and regional authorities who are mired in longstanding assumptions who would tend to have the most difficulty in dealing with troublesome internal problems. 

Providers of goods or services must adjust to changing local environments, which in turn are impacted by broader trends. Bus companies and regional authorities in the U.S. faced increasing traffic congestion as well as decreasing ridership from 5.6 billion in 2008 to 4.67 billion in 2018.[1] Also, competition ranging from electric scooters to ride-hailing services like Uber and Lyft were literally driving people away from buses nationwide, according to transit officials. Light rail and subways, which do not have to fight street congestion, also saw ridership decline, but not as much as buses. There was also the argument that the very poor, including the homeless, who generally rely on bus service, are least equipped to pay for it. Many universities were already using the student-fee model for university bus service, spreading the cost wide enough that the students could afford the service. Alternatively, only students who used the service could have paid for it, which would have been particularly hard on poor students.

In the altered environment in which bus companies found themselves by 2020, the concept of free fares on some or all bus routes was drawing increasing support in several cities. “Advocates in Massachusetts claimed that free buses would speed up boarding times, draw more passengers, aid poor residents and help reduce greenhouse-gas emissions.”[2] Michelle Wu, a member of the Boston City Council who supports free transit, remarked, “If we’re truly treating it as a public good that has benefits to everyone when everyone uses it, then we should remove barriers.”[3] To the extent that poor people are especially in need of a public good, charging a user free can essentially privatize the good for the poor.

The poor may go without transportation needed for their very sustenance, or resort to fraud. In Phoenix, Arizona, for example, people needed only go to a convenience store to buy reduced-fare cards otherwise reserved for the elderly and disabled. As of 2020, enforcement on the buses was rare; few if any drivers asked to seek the accompanying ID of discount fare-riders. Even on the light rail, security employees intent on staring at passengers as if they were all conducive to violence would not bother to even ask to see the ID. In fact, passengers who had not paid were let out at the next platform, from which they could easily board the next train. Lest the shady passengers get all the blame (though surely they deserve a lot for their sordid attitude alone), the revenue model itself was culpable because it did not adequately take into account the extremely limited financial resources and vital transportation needs of the very poor. Such a regional transit authority and its bus operating companies would not likely be willing or able to address internal problems, such as rude drivers and horrendous (and risky) driving. Phoenix buses were widely known locally for these two things. Also, it was not uncommon to see three or four transit security employees in half of a light-rail train car staring at passengers as if the latter were prisoners.

Put another way, city and transit officials in the Phoenix metro would not be likely to analyze, let alone perceive the free-rides option because they were so preoccupied with, and yet unsuccessful at, stopping the ticket fraud in order to boost revenue from riders. Getting serious with bus drivers who were rude and/or bad drivers was something beyond the reach (and will) of the bus operating management and regional transit authority. Moreover, the political environment in Arizona was such that a majority of the voters would have balked at the prospect of paying for poor people to ride free. Minimizing tax increases fared much better in that political climate.

A world away, in Lawrence, Massachusetts, the region’s transit authority in September, 2019 stopped collecting money on three routes that go through the poorest parts of the city. Lawrence used $225,000 in reserves to waive fares for two years. Lawrence Mayor Dan Rivera explained the rationale for free rides. “We could support those citizens to mobilize themselves out of poverty.”[4] The regional transit agency said ridership on the three free lines climbed quickly—up about 24% in the first few months from a year earlier.

In Olympia, Washington’s capital, a ballot measure in 2019 that boosted transportation funding helped the Intercity Transit agency start offering free service on all buses in January, 2020, according to Ann Freeman-Manzanares, the system’s general manager. Fares there amounted to $2.7 million annually, a small portion of the agency’s budget, and some of that is spent maintaining fare boxes and collecting cash. “It actually was surprising to us when we started digging deep how much it costs to collect fares,” Ms. Freeman-Manzanares said.[5]

In Kansas City, the local transit authority was overhauling its bus service and already offered free rides to veterans and students. The authority aimed to completely cancel fares by May, 2020, Chief Executive Robbie Makinen said. The city council voted unanimously in December, 2019 to find about $8 million a year to cover free buses, which were already heavily supported by taxpayers.

Meanwhile in Phoenix, bus drivers regularly held up their buses waiting for passengers to dig for more coin—not having bothered to do so before boarding. Also, the fare machines on the buses were old, and thus particularly susceptible to breaking down, in spite of the priority on revenue from passengers. The bus operating companies and the regional authority erroneously accepted these intangible and tangible costs as necessary in part because the managers assumed the passenger-revenue model being used to be fixed rather than possibly replaced.

Generally speaking, a mind wetted to one way of thinking as if a blind card set in a highly rutted dirt road is likely to accept as necessary too many costs because another way of thinking, a broader one, would be necessary to take into account other models even though their costs would be lower. A mind willing and able to perceive and think beyond its groves is necessary. Though such a mind is likely to be more motivated and able to take on seemingly intractable internal problems, such as rude drivers and bad driving (e.g., accelerating too fast, and braking too hard), even being willing to think wider may not be sufficient. Hence it is possible that the continuing internal factors (i.e., problems within a bus company) could sabotage a new model’s perceived efficacy.


[1] Jon Kamp, “Cities Offer Free Buses in Bid to Boost Flagging Ridership,” The Wall Street Journal, January 14, 2020.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.

Saturday, March 28, 2020

Cases of Coronavirus: Comparing China, the U.S.A., and Italy

On March 26, 2020, “the US overtook Italy and China as the country with the highest number of confirmed Covid-19 cases.”[1] At first glance, this statement can gain sufficient traction to become definitive. The implication that the U.S. is mismanaging the pandemic can even be regarded as valid even though the comparison itself is invalid.

Firstly, the United States, Italy, and China have very different population-levels. At the time, China’s population stood at roughly 1.435 billion, the U.S. population was 331 million, and Italy’s was 60 million. The U.S. had at least 81,321 cases.[2] China had at least 82,000 cases.[3] Italy had at least 80,539.[4] Per capita, the U.S. had at least one case for every 4,070 people; China had at least one per 17,500 people; and Italy had at least one case per 745 people. Adjusted for population-level, Italy was worse than the United States, which in turn was worse than China. Of course, China was coming down from its apex of cases, while the United States had not yet hit its apex and Italy may not have hit its own yet. Singapore’s confirmed 631 cases may seem a trifle until the city-state’s population of 5,838,360 is taken into account.  With at least one case per 9,253 people, Singapore stood between the United States and China in severity of cases.  So, at the very least, taking the population level into account is vital in comparing countries on the coronavirus pandemic.

Secondly, comparing countries assumes that they are all equivalent, as countries, not only for comparative purposes, but also as political entities. This is a modern assumption—that a city-state is equivalent to an empire, to take two points at the extremes; the kingdom being between the two. In other words, it is assumed that just because every country is sovereign, every country is equivalent even in non-political matters of comparison.

Historically, the attribute of sovereignty was not so decisive in declaring equivalencies. No one would claim that a stand-alone kingdom was the equivalent of an empire. For example, Althusius’ theory of federalism, described in his Political Digest (1604), clearly distinguishes a city, province, kingdom, and empire from each other. Based in part on the Holy Roman Empire, Athusius’ version of federalism contains a hierarchy, including guilds, villages, cities (composed of villages), provinces/regions, and the empire. Representatives of the guilds sit on village councils, village representatives sit on city councils, and so on until representatives of the provinces sit at the federal head—the empire’s governance.[5] It would be absurd to claim that a kingdom in one empire is equivalent to either a city or another empire. With these terms of political organization going by the wayside, the vague, over-generalizing term, country, filled the void, with its fallacious assumption that the attribute of sovereignty means that countries are equivalent in matters of making even non-political comparisons. This working assumption, as part of the status quo by the twenty-first century, is so ridiculous that the underlying presence of a warping large mass can be indirectly detected.[6] The ideology of nationalism, for instance, would have sufficient force to warp reasoning, as well as perception.

To get a glimpse of the flawed assumption, we can superimpose the historical terms on early-modern/modern countries (e.g., the UK, rather than the medieval England). At least as of 2020, the United States and China, as well as the European Union, were empire-level polities, whereas the E.U. state of Italy was an (early-modern) kingdom-level polity, and Singapore was a city-state. The flaw in only using the number of cases of coronavirus rests on the deeper flawed assumption that all countries can be classified on the same level, notwithstanding huge differences in scale and political type. In the E.U. and U.S., representatives of the states (early-modern kingdom level) sit in bodies at the empire level (i.e., the European Council and the U.S. Senate). To treat a state in one empire as equivalent to another empire thus represents a category mistake (i.e., conflating two different categories as one).

By implication, to treat the regions or provinces of a U.S. or E.U. state as equivalent to the U.S. or E.U. state level (provincia level in the ancient Roman Empire) also involves a category mistake. The American colonies, which became sovereign states (in a league or confederration), were mapped out to be on the scale of the early-modern kingdoms in Europe.[7] Hence the geographical scales of the U.S. and E.U. states cluster. California is roughly the size of Spain, Arizona of Italy, Texas of France, and Montana of Germany. The small states also cluster, but the differences between the large and small states is dwarfed by the difference between the state cluster and the unions' cluster. In other words, the difference between the sizes of the states and the unions is sufficiently larger than how much the states differ and the unions differ that a "step" (i.e., difference in kind, rather than just in amount) can be seen. That the unions are made up of the states is another way of pointing to two plateaus rather than a continuous slope (i.e., saying that the U.S. is larger than France, which is the size of Texas). This is why conflating the two clusters (i.e., of the states and of the unions) represents a category mistake. 

Therefore, comparing Italy’s 80,539 cases to the United States’ 81,321 can be understood as misleading, therefore, because not only are the population-levels so different, but also Italy is a state in a union that in turn is equivalent to the U.S. Logically, if the two unions are equivalent, then a state in one cannot be equivalent to the other union.

In comparisons in which either the E.U. or the U.S. as one or both sides, the overgeneralization is itself problematic because it hides the significant differences between the states. In other words, that the American States differed significantly in coronavirus cases in March, 2020 was lost in comparing the entire U.S. to Italy. With a population of 5.85 million, Wisconsin had at least 707 cases on March 26, 2020, and therefore one case per 8,274 people, while Washington (the state) had at least 3,207 cases in a population of 7.8 million, and therefore one case per 2,432 cases. The represents a substantial difference that is hidden in aggregating all of the states' data. The statement that the entire United States just got worse in coronavirus cases than a state in the E.U. is thus problematic. 

Even in correcting for the category mistake (e.g., comparing an empire-scale geographic polity with an early modern/modern "kingdom"-level polity, we would over generalize to say that the E.U. is worse off than the U.S. precisely because such a comparison ignores significant differences between the states in both unions. In fact, even if it made sense to generalize the entire U.S. (i.e., states differing little) rather than report predominately on the States, then the E.U. too should have been at the other end of the comparison, even if its states differed appreciably. As both unions were empire-scale, their respective states were very likely to different on a variety of indexes.

Having corrected for the category mistake and taken account of the fact that state-level differences were significant in both unions, greater insight could have been gleamed on how the virus was faring in Europe and America by comparing the "hot spots," for example. That is to say more accurate comparisons would be made between Italy, New York, France, Germany, California and Washington because they were all being battered by the illness by the end of March (which was going out like a lion).

On March 26, 2020, New York (the State) had over 37,000 cases in population of 20 million: one case for every 542 people, worse than Italy's 745 people. Washington (the State) stood at 2,432 people, less severe than the E.U. state of Italy. From this standpoint, the derivative (i.e., the change in the rate of increased cases) for each state could be used to compare the "hot spots" with regard to where they are relative to their respective apexes (i.e., the highest, hence peaking, infection rates). Comparing the "hot spots" could thus have been quite useful. 

Because the state level in both the U.S. and E.U. bore out tremendous differences in severity, it is just common sense that states rather than the unions, or even worse, a union and a state in another like union, should be compared. Moreover, that vast differences in population and in political category, or even just geographical scale (Italy being roughly the size of Arizona), have been routinely missed is a serious flaw both in reasoning and knowledge of political organization. I submit that the flaws in the default-axis of comparison have been protected by a worldwide blind-spot, which has enabled a myriad of false-comparisons. 

Nietzsche would doubtlessly write that a brain-sickness predicated on a weakness was behind the warping of reason and perception. A herd-animal mentality, including in the animals who cannot resist the urge to dominate, could explain how the warping became ingrained in the societal (and global) status quo. I contend that nationalism and turning the attribute of governmental sovereignty into a tautology rendered the flaws both invisible and part of the taken-for-granted status-quo. 

Well into the twenty-first century, people (and governments) around the world were still intent on assuming that the attribute of sovereignty justifies the assumption of equivalence between countries even in making non-political comparisons. Singapore and the U.S. can be compared on a variety of things because both are countries, meaning both are recognized internationally as sovereign within their respective territories. 

With its strong desire, ideology can eclipse reason and perception without leaving finger-prints. Nationalism has likely been playing a subterranean role in the warping of equivalence as in comparing E.U. states like France and Germany to the U.S.A., with the E.U.'s governance and the American States being deliberately overlooked or even blocked from view in a sort of state of denial. 

Even in comparative politics, confounding the state and federal levels of both the E.U. and U.S. is problematic. For instance, federalism came out of empire-level groupings and has the greatest benefits for empires, which are by definition heterogenous (diverse between provinces/states). To model the governance system of the E.U. or U.S. on that of Sinapore (a city) would entail a greater downside of uniform (i.e., union-wide) laws because in empires, "one size does not fit all" of the circumstances of the states (e.g., significant differences in coronavirus infection). Hence New York's government took much more strict measures against the spread of coronavirus than did the government of Kansas in March, 2020. Had the U.S. President handed down a severe, blanket "lock-down," it would have gone unnoticed that several states did not yet need that level of caution through government action. Hence, the state governments were able to set policies according to their situations. As in the case of the E.U. state governments, it was even possible for those American governments to distinguish between their respective regions (or provinces) in taking precautionary measures.[8] As a city, Singapore, unlike the states (and empire-scale unions), could only have one situation. Rather than being influenced by where sovereignty resides (at both the state and federal levels in the U.S. and E.U.), the level at which comparison is best made depends on what is the subject of comparison (e.g., coronavirus) and which level (or cluster) of institutional and geographical political organization (i.e., state, county/province, state/kingdom, or empire-scale country) presents the greatest differences on the subject.

[1]. Jeffrey Sachs, “Why America Has the World’s Most Confirmed Covid-19 Cases,” CNN.com, March 27, 2020 (accessed March 28, 2020).
[2]. Donald McNeil, “The U.S. Now Leads the World in Confirmed Coronavirus Cases,” The New York Times, March 26, 2020.
[4]. Crispian Balmer and Gavin Jones, “Italy Suffers Setback to Hopes Its Corronavirus Epidemic Might Be in Retreat,” US News & World Report, March 26, 2020.
[5]. Skip Worden, British Colonies Forge an American Empire: A Basis for Transatlantic Comparisons (2015). Athusius' theory of federalism is also discussed and applied.
[6]. I am thinking here of how the presence of a black hole can be detected by looking at the warped orbits nearby (their shape and relatively high speed).
[8] Lest it be argued that the most suitable level of comparison is that of intra-state regional/provincial, the state size-cluster is not so large that intrastate differences would be as big as the interstate differences. However, the fact that the counties of Dane (which contains the state capital city, Madison) and Milwaukee were both more severely hit on March 26, 2020 than were the other counties suggests that state governments had reason in at least once case to either have different policies for counties or delegate the power to the county governments. Adopting the county level for comparisons within or across empire-scale unions would not be parsimonious and thus practical. Also, I suspect that the typical inter-county differences were less than the inter-state differences. This is why I stopped at the state level in assessing the best level of comparison generally. 

Sunday, March 22, 2020

American Federalism: The Case of Coronavirus

On March 22, 2020, during a press conference on the coronavirus, U.S. Vice President Pence claimed that the United States is unique in that it has a federal system of public governance. He overlooked the equivalent case of the European Union even as he stressed an idea that is the European federal principle of subsidiarity, which means that decisions and actions that can be taken locally are to be done locally. The state level is next, followed by the federal level. The theory behind this principle is that cultural, political, economic, and social diversity that exists from state to state, especially in an empire-scale federal system such as the E.U. and U.S., means that one-size-fits-all federal-level decisions may not be effective everywhere. Pence’s point was that the federal government would be playing a supportive role so the States get what they need, rather than playing a pivotal role with the States and localities as instruments of implementation. I contend that relative to the European Union, the United States was at the time much less equipped to apply the principle of subsidiarity to the coronavirus pandemic.

At the time of the press conference, Washington, New York, and California were the “hot spots” wherein the virus was relatively pronounced. Even though the European Union had not only closed its borders, it had also allowed states including Italy, France, and Germany—the E.U.’s “hot-spots”—to close their respective borders. Lest it be objected that their American counterparts could not close their borders practically and even constitutionally, this point suggests that the American federal system had not taken sufficient account of subsidiarity even in the constitutional design. Put another way, a sitting vice president emphasized the principle even as it has insufficiently incorporated into statute and constitutional/basic law. The implication is that the constitution was flawed or deficient.

The E.U. demonstrates that a federal system can indeed take subsidiarity into account. Even as the E.U. itself had its federal borders at the time, its states could maintain their own even though most of those borders were open. The case of the virus in 2020 shows that in an emergency, federal officials, together with state officials, could suspend the open-border law.

To be sure, the American states were not completely without authority to protect themselves as suited their particular circumstances. The government of California, for instance, put its 40 million residents on lock-down, whereas Arizona, a neighboring state, did not (as of March 22, 2020) because that state was not then a “hot-spot.” This is indeed a valuable benefit of federalism. Especially at the empire-scale (i.e., wherein the states are the size of fully-sovereign, or unfederalized, states, governmental measures in “hot-spot” states would not fit, and indeed could be bad for, states in which the virus was present in a big way. In short, the principle of subsidiarity was present in the American Constitution.

Unfortunately, it is also evident that the principle was not sufficiently in the American Constitution because the States should have been able to close their respective borders within the U.S. to reduce people entering with the virus and slow down the spread of the virus into other states. A basis for such state authority on an emergency basis could be that under normal circumstances, California could stop entering vehicles to search for plants. Thus, border stations already existed. Constitutionally, perhaps California’s rationale of keeping agricultural pests out could be broadened to give the state governments authority to close their respective borders under emergency circumstances such as a pandemic.

Thursday, February 6, 2020

Politics and Religion: President Trump at a National Prayer Breakfast

Politics and religion intermeshed can be a nasty business. Franklin Graham, son of Billy Graham, witnessed every venue of his planned tour in Europe cancel because Franklin had “called Islam ‘evil,’ attacked laws increasing rights for transgender people, and told his followers that the legalization of same-sex marriage was orchestrated by Satan.”[1] Although criticizing another religion is religious in nature, turning to laws renders the attack political too. Although Franklin Graham may have assumed that many of his co-religionists would agree with him both in religious and political terms, wading into controversial political matters risks alienating people who are or would otherwise be religious followers. Even the willingness to traverse into the political realm may not be liked by some religionists, whether followers or not, especially if the incursion is into a controversy. Some co-religionists may agree with the distinctly religious belief, yet hold dissimilar political views. Such distance created between religionists can weaken a religious leader’s credibility and even following in the religious domain. Politicians dragging their respective religious faiths into the political domain can also be problematic, though authentic applications can pay off even if there is a cost politically. The incursion of Christianity at the end of U.S. President Trump’s trial in the Senate and as he took a victory lap can demonstrate the complexities of religion distended into another domain.



[1] Rob Picheta, “Evangelist Preacher Franklin Graham Planned a Seven-City UK Tour. All Seven Venues Have Dropped Him,” CNN.com, February 6, 2020(accessed same day).

Tuesday, February 4, 2020

Bank Bonuses and Dividends After the Financial Crisis: On the Power of Banks in European and American Government and Society

Dividends are typically based on how much a bank (or company, moreover) has profited, less whatever capital is needed from the profit. Similarly, bonuses are based, at least theoretically, on how the managers and the nonsupervisory employees alike perform as well as how the bank performs. In their respective ways of shoring up banks amid the financial crisis of 2008, the E.U. and U.S. differed on how easy it would be for banks to pay dividends and bonuses, as well as to have access to governmental funding. These differences reflect both the relative power of the financial sector in the governmental sector and the cultural attitudes toward business. 

“Under proposals outlined by the European Commission president, José Manuel Barroso, banks would be required to temporarily bolster their protection against losses. . . . Extra capital for European banks should be raised first from the private sector, then from [the state] governments, according to the proposal. Only when those avenues have been exhausted should a euro zone bailout fund be tapped, it said. Banks should not be allowed to pay dividends or bonuses until they have raised the additional capital, according to the proposal.”[1] The bankers much raise additional capital before government coffers could be tapped and dividends and bonuses could be paid.
 
As an aside, the nature of the E.U.'s federal system is also relevant, as state funds would be tapped; only when they are exhausted would a federal fund be used. In the case of the U.S., the states were to be shut out of the solution. This reflects the more general shift from federalism to consolidated power at the federal level. The European federal system was at the time more balanced, and thus more viable.

After Lehman Brothers went under in September 2008, the U.S. Government took “swift action to ensure its banks had a strong cushion of capital.”[2] The banks first (rather than last) resort of capital would come from the Federal Reserve Bank (as created money) and TARP funds enacted by Congress. The bankers did not have to raise additional funds, and they could pay dividends and bonuses even though the government bailout was supposed to be used to expand lending, which largely didn't happen. The banks could take the governmental funds with few if any strings attached. Also, the U.S. Treasury allowed banks to pay back the funds earlier than perhaps advisable because the bankers wanted to be free to pay whatever bonuses they saw fit for themselves.

The difference on whether dividends and bonuses should be allowed at troubled banks reflects a rather basic ideological difference between the E.U. and U.S. concerning whether economic liberty ought to be limited even in cases in which the economic entities are culpable. In short, is a bank (or business) whose management has performed very badly, as in recklessly taking on too much debt, justified in paying out dividends and especially bonuses nonetheless? If traders knowingly sell crap to even their best customers, as traders at Goldman Sachs did in the case of the subprime-mortgage-based financial-derivative bonds, should those traders expect to get bonuses anyway? Competence and ethics are thus both relevant. 

Admittedly, the bonus system on Wall Street had made its way into calculations of standard or basic compensation, such that the bankers had come to expect at least some bonus each year, regardless of performance. However, this expecation (and practice) contorts the very meaning of a bonus; it is not to be expected because it is granted for good or excellent performance, or even ethical conduct. U.S. officials tacitly bought into Wall Street's convenient notion of a bonus, whereas E.U. officials held onto the basic fact that a bonus is an extra, not a given, and, moreover, that raising additional capital as a hedge against systemic risk is more important than bonuses (and dividends). 

I suspect that because the E.U., at the time at least, had major parties on a broader political spectrum than that of the U.S., the financial sector did not have as much power over governmental institutions as in the case of the United States. Put another way, the U.S. political landscape was more tilted in favor of the financial system. Goldman Sachs, for instance, gave $1 million to Barak Obama's 2008 presidential campaign. Furthermore, the U.S. Supreme Court ruled in Citizens United (2010) that corporations could give unlimited amounts of money to political campaigns. Meanwhile, the "hard left" was represented only by "liberal Democrats," whose power has been typically diluted in the Democratic Party. Even the liberal wing of the Democratic Party does not reach the Left parties in Europe in terms of Socialism, for example. 

Therefore, I submit that the interests of corporations, including their stockholders and managements, are distended in American politics. Perhaps not by coincidence, the culture itself is amenable to business. For example, business values have gained a greater footing in how education is conceptualized at many universities in the American States. Since 1980, for example, both universities and students have reduced education to vocation in assessing a major's worth in terms of its potential for resulting in a good-paying job. The criteria for higher education are not so limited, or warped. In terms of teaching, corporate power-point presentations, which were ubiquious in business settings, became more common not only in "teaching by bullet-points," but also in what students would study for exams. 

The cultural value of business in American society, combined with the monied/political power of corporations (including banks) in the halls of government can explain why the American response to the incompetent bankers differed so much from the European response. This is a good case study particularly because it is ludicrous that a no-strings governmental response would follow the bankers' pathetic abuse of the subprime derivative bonds. The sector had even lobbied to keep financial derivatives from being regulated! That bonus were granted attests not only to warped judgment, but to the cultural and political situs of the financial sector in America. I suspect that many Europeans, even E.U. officials, were shaking their heads in disbelief. 

1. Stephen Castle, “Europe Tells Its Banks to Raise New Capital,” The New York Times, October 13, 2011.
2. Ibid.