Ukraine: Still at the Apex

Ukraine is still the epicenter of US International policy- the US appears tethered to Russia’s goals for global domination

From Crimea to North Korean Missiles

The Obama sanctions against Russia countered the bald aggression Putin’s government showed when invading Ukraine, fomenting civil war in the Don Bas region, and annexing the Crimean Peninsula. Russian military aggression depends on the banking and finance that make its government run, and the Obama sanctions put a devastating hole in the Russian economy.  

 At the height of the effects of the global oil crash and the sanctions, the Rouble fell to all-time lows. The military machine ground to a slow and halting state,  and the Russian population suffered severe disruptions and substantial deprivations.

In summer of 2017, the US Congress voted to extend sanctions and increased the severity of them in response to intelligence agency findings that Russia interfered with the national elections in November, 2016. The Trump administration opposed the sanctions and worked in the legislative buildup to reduce or eliminate them. There was no explanation for that strategy in the face of universal agreement from US and allied intelligence of the Russian election cyberwarfare. The Congress voted overwhelmingly to extend sanctions and impose additional costs; thus far, the Trump Administration has not acted as needed to carry them out.

Ukraine and Russia deja vu

In Dnipropetrovsk, Ukraine- a very nice city that I have visited and enjoyed- there is a mammoth government installation. It takes considerable time just to drive past it. As the walled areas make it difficult to grasp the scale of the place, it is the plant where generations of Soviet missiles and rockets were developed, designed, and constructed. 

Recently, North Korea made some surprising advances in rocketry- a new design and remarkably advance capabilities. North Korea can launch and effectively strike targets as far away as the continental United States The sudden advance?  Yes, they apparently came from models developed for Russia in the Ukraine, and in the sprawling facility in Dnipro. How they became property of the North Korean Dictator is as at yet unsolved mystery. Again, Ukraine and Russia at the center of US international policy.

The Pattern of Serving Russian Goals

In July 2016, there was a mysterious action taken at the GOP convention; an abrupt change in policy in the Platform to stop the sanctions, reduce participation in NATO, and accept the Russian Occupation of Crimea and the elections thereafter which international agencies have condemned as illegitimate.

The Russia investigations in the House and Senate each seek to establish whether there was some form of collusion between the Trump campaign and Russian leadership as the quid pro quo for Russia’s successful efforts to influence key parts of the US electorate.

Iran, Syria, and Russia

Again, the sanctions and the tilt towards doing Russia’s bidding occurs at the fulcrum of the most difficult international challenges.  In the spring of 2017, the Administration abruptly announced it would no longer seek regime change in Syria- consistent with Russia policy. A few days later, Assad gassed his own people again. The following day, the US advised Russia it would make a symbolic missile strike on a Syrian base. The TV cameras covered the missiles, and Syria moved its equipment in advance of the attack and sustained no damage or reduction of its ability to carry out attacks. 

Today, the US will begin to dismantle the Iran nuclear agreement. The refusal to certify Iran's compliance could free Iran's government to develop its nuclear program as well as continue its support of Assad in Syria. The US foreign policy continues to  align and contour itself to support Russian objectives and to do so when and if they damage US policies and traditional principles.

The word of a nation is important in its conduct of international relations. Ultimately, we would like to negotiate a nuclear deal with North Korea that could advance their stagnant and under served economy , improve the level of living there , and move them closer to normal relationships with other regional powers. Such agreements depend on the trust that other nations have in US commitments. 

The current administration as removed any semblance of trust or confidence in US policy or commitments. The chaotic messages come from Tweets, ill-advised public papers, news leaks, and public statements that often defy understanding. The confluence of these behaviors weakens America, diminishes our role in international events, and makes us increasingly subservient to Russian interests.  It is an odd pairing with an admitted enemy that currently points thousands of tons of nuclear explosives at us.

Can Ethereum Save US Democracy

An experiment born in an age of unlimited privilege and unlimited personal growth can die in this era of unlimited privilege that limits personal growth.

Part One- The Opportunity Democracy

The Framers were a far-sighted group to be sure. They were valiant men that risked hanging to pursue a reachable though difficult dream of nationhood. For them, the first step was independence from a colonial master and an Insane King. They saw the vast potential for wealth and growth in the land, water and resources of the America they knew- and they imagined that the boundless energy of its population would never exceed the opportunities that were so abundant, and stretched a far as the mind’s eye could see.

There was little concern that the tendency of wealth to coagulate economies of nations and struggle growth with suffocating privilege and class-ism. One of the leaders had that visionary, if   dark, prognosis for America. Governor Morris of New Jersey- predicted the difficult end of the American experiment as wealthy people accumulating so much wealth that they would have the power to put a strangle hold on the economy and the growth potential for nearly everyone else. Welcome to 2017- Governor Morris.

Democracy was born in Conflict and Abundance

The American experiment had written and spoken values of nobility- freedom and the inherent worth of every individual. Like the voices of Athens in the 4th Century, Jefferson might have reached to slaves to get a refreshment after speaking of the evident truths of equality. 

The Founders denied the vote to the women that fought in the Revolution, and denied the men that fought too. The colonial wealthy class had no idea of sharing power with the lower classes- although they did not impose class representation like England- House of Lords, House of Commons and so forth. 

The American equalizer was the measureless abundance of opportunity- there were fertile fields for the taking, plains full of buffalo, forests full of deer, and streams abundant with fresh water and fish. The economics seemed clear:  go west and claim anything you can’t afford in the east.

Can the evolving Value Economy and Ethereum restore the freedom of opportunity that was the silent foundation of the American experiment in Democracy?

As humans, we fail so many benchmarks of social evolution. Yet, in less than 25 years, the computer has taken hold, the smartphone has taken over, and Information Technology became a frontier for economic growth. The wealthy classes have taken control of IT and largely stemmed the tide that began in our Silicon Valley and was replicated in other advanced economies. The wealthy hang onto the pillars of trusted third parties- law, banks, insurance, privilege-based investment, and government regulation controlled- and to some extent-corrupted by industry influence.

The Jobs Act of 2016 was in part a recognition of the universality of investment and growth that can spontaneously arise and flower when governments controlled by wealth interests do not interfere effectively. The rules that carry out the Jobs Act conspicuously attempt to limit investment and create distorted access to early stage investment based on wealth. 

The Value Economy story may begin with Bitcoin and Initial Coin Offerings (ICO’s), but it casts a shadow far greater than the spontaneous fiat Cryptocurrency or cybercurrency. The new economy emerges from spontaneous opportunity taken- an Uber theory – spontaneous capital opportunity and a technological underpinning that can revolutionize the essence of transactional value.

Startups are the lifeblood of IT…

…and wealth had begun to strangle the funding. Traditional Banking gave way to relaxed traditional banking. Corporate funding became more like the energetic industries it engaged.  But it was crowdfunding that lit a fuse for the startup industry.

Crowdfunding and Ethereum

Crowdfunding is another great step that amounts to a fledgling beginning when viewed in the larger context of a global value based economy. Crowdfunding in cybercurrency may prove both powerful and unregulable. Because of blockchain, cryptography, and Ethereum, crowdfunding can use smart systems and it does not need central government oversight to enforce reliability. Ethereum is also immune to the siren call of insurance that acts upon the national economy as if an anchor in the mud .

 The new face at the table is not another variation of staid hidebound wealth. It is Ethereum and blockchain technology*. It as shown the way to growth without the trusted third parties that apply the brakes to economic evolution. The new value economy provides opportunities for investment and growth not tied exclusively to traditional wealth. Innovation can create value, and value can create many forms of capital.

Crowd style Investment: A Revival of Opportunity

Real time investment activity over the past five years demonstrated the potential for crowdfunding as a major source of investment capital. In 2014 the global total raised through crowdfunding exceeded $16.5 B.  Some industry sources estimate the current 2017 total in excess of $34 B.

The structure of crowdfunding is amenable to scale to adjust risk for investors. Groups of medium to large investors can support projects as well as larger groups of small investors. All investors can aggregate investment amounts and accept nominal leadership in selecting projects, then smart systems can assure that projects will perform or lose investment.

Ancillary business activities include managing investment groups and assets, developing projects, and creating smart agreements.  In an era of wage stagnation and negative wage expectations in many sectors of the US economy,  investment in IT startups can help extend the reach of wage earners to enhance income and open-up business ownership. 

Unlike penny stocks and highly speculative investments subject to manipulation and abuse, Ethereum with blockchain technology offers a guarantee of transparency and accurate accounting. Investment is a key to opportunity in the IT age, and crowdfunding can open investment to everyone.

Sponsorship and promotion can come from numerous sources and activities. They include the below- described potentials.

·        Social media type platforms to engage, inform, and encourage investment in IT startups including cash, fiat currency assets, and cryptocurrency. These platforms seek to bring freelance professionals, programmers, and developers  into collaborative relationships, and to bring investors into early-stage investments.

• ·        Spontaneous organization from private initiatives.
• ·        Political action that provides tax incentives and credits crowdfunding investment below a certain size, such as $1,000 or less per year. The Jobs Act rules could be a vehicle for this type of action,
• ·        State and local tax incentives, credits and matching funds for crowdfunding investments below a certain size such as $1,000 per year or less.
• ·        Commercial products aimed at nominal risk investment among a wide audience.

Part Two- Democracy and Voting
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Sources:
Ethereum- a vast platform
https://blockgeeks.com/guides/what-is-ethereum/

*Goldman Sachs on Blockchain technology 

 http://www.goldmansachs.com/our-thinking/pages/blockchain/

- Jobs Act- https://www.sec.gov/spotlight/jobs-act.shtml

- Ethereum- http://www.telegraph.co.uk/technology/0/ethereum/

- Wealth and Democracy- see e.g. Discussion of economic concentration and impactful excesses of  wealth

https://draft.blogger.com/blogger.g?blogID=1695901319717775090#editor/target=post;postID=6547012234843430747;onPublishedMenu=allposts;onClosedMenu=allposts;postNum=5;src=postname

 

Does Good Corporate Citizenship include Tax Reform?

The recent tax overhaul framework would reduce corporate taxes by a whopping $1.8 trillion over a ten- year period. The loss of revenue clearly means that government will swell debt or cut domestic spending since Defense spending is still a major source of business in the US.

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       Multinationals could be tax free

Further, on corporate taxes, the law would change multinational taxation to eliminate US taxes on foreign income. This could permit companies to zero their taxes by moving away from the US to places where there are little or no taxes or which offer tax treaties that result in little or no taxes, for example, to promote employment.

The net result on corporate taxation would be an essentially voluntary system in which companies could arrange their income as foreign earned money and pay no US taxes.

-        Estate tax repeal worth millions to a few

The tax overhaul would eliminate the estate tax which affects few households but provides an enormous amount of money that has reduced costs for the lowest income groups such as Medicaid and Costs Sharing Reduction in Obamacare. For the households involves such as potentially the Trump household, the savings might be as high as $1 Billion. Consider the contrast with the minimum tax for individuals and families which the proposal raises from 10% to 12 %.

-        What is good Corporate Citizenship?

The question is pertinent to the moment, does business have an obligation to consider the impact on the society of tax reform essentially intended to benefit business interests? Does good corporate citizenship begin in the beginning, when the pie is divided?

Thus far, there has been a figurative stampede of business groups in support of the as yet unspecified plan, although many groups have already mobilized to preserve special write-offs and subsidies. This is the other ethical consideration is the Congress essentially holding a favor sale- preserving the special privileges of those that offer the largest subsidy to the members—such an odd thing, US Senator salaries are about $200,000 and the few income reports I have seen in the news average annual income from salary and donations probably exceeds $2 million-  that’s a lot of Free Speech! 

It exceeds the boundaries of understatement when saying business interests apparently have a big impact on tax decisions in the Congress.

-        A question worth considering

The motto that a corporation must act in its self-interest seems a mere tissue in the post-bailout age. We had no difficulty in enlisting public assets to cure the credit crisis and the crash in 2006. This is the relevant question: does good corporate citizenship begin now when it can make a great difference  or do we wait till the gold dust has settled and start supporting local charities with tax deductible donations?