Spring elections take a toll

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One of the problems with Salem's weird May council election schedule is that it means that city elections are essentially invisible, with very few people are paying any attention at all, except for the real activists who are trying to push one candidate or another.

That general apathy means that nobody asks the candidates any questions that they haven't thought about or answered a hundred times. They get never get change-up questions like "What are the implications of Salem's changing population profile and what policies does it suggest will be required?"

The reality is that all our candidates and politicians are crippled because they have grown up in an era where the expectation was continuous growth -- growth in population, growth in budgets (by at least the amount of inflation), growth in services, growth in paved area .... in a different era, in other words.

The growth expectation has now been overtaken by events, to say the least. In real dollars, budgets are going to shrink, even as service costs increase. Worse, instead of retiring early to find their bliss, as many expected, Baby Boomers are desperately clinging to jobs much longer than expected, often to cling to benefits. This means that young and not-so-young people are having problems getting launched into careers and can't reach adult milestones readily. Not only did the early Boomers enjoy a following breeze throughout their economic earning years, but they are not leaving the stage at anything like the pace needed to reduce un- and underemployment for the generations following them, who are becoming trapped in limbos not solely their own making. And this is all even before we really are forced to come to grips with peak oil, which is going to be most apparent as wild price swings for energy (and energy dependent commodities, which is to say "nearly everything else") masking an overall steadily rising trend in costs, causing an equally steady declining trend in our economic well-being.

To top it off, as the story below suggests, the one slice of population that's really booming is the very old: people who need a lot of care and resources. In demographic terms, it's like having another baby boom, only these babies all get to vote, and they tend to vote for their own interests, period. They don't much care how much seed corn is left when they're through, judging by their demands for tax breaks, fantastic amounts of heroic and costly care at the end of life (subsidized by the feds), and senior discounts at every establishment in town.

It would be nice if some of the candidates had wrestled with these issues a bit rather than just trading in the tired game of "how do we attract jobs." It would be VERY nice if someone in City Hall looked ahead further than the next budget year and gave some thought to how to organize people and money to create jobs so that people here can meet the needs here, rather than trying to chase after distant companies all the time.

More Wander Off in Fog of Age

. . . But last year for the first time, another type of search crossed into first place here in Virginia, marking a profound demographic shift that public safety officials say will increasingly define the future as the nation ages: wandering, confused dementia patients like Freda Machett.

Ms. Machett, 60, suffers from a form of dementia that attacks the brain like Alzheimer's disease and imposes on many of its victims a restless urge to head out the door. Their journeys, shrouded in a fog of confusion and fragmented memory, are often dangerous and not infrequently fatal. About 6 in 10 dementia victims will wander at least once, health care statistics show, and the numbers are growing worldwide, fueled primarily by Alzheimer's disease, which has no cure and affects about half of all people over 85.

"It started with five words — 'I want to go home' — even though this is her home," said Ms. Machett's husband, John, a retired engineer who now cares for his wife full time near Richmond. She has gone off dozens of times in the four years since receiving her diagnosis, three times requiring a police search. "It's a cruel disease," he said.

Rising numbers of searches are driving a need to retrain emergency workers, police officers and volunteers around the country who say they throw out just about every generally accepted idea when hunting for people who are, in many ways, lost from the inside out.

. . . Many states do not collect or fully categorize local data on search-and-rescue cases, so it is impossible to gauge the full impact of dementia wandering on law enforcement. But in Oregon, for example, the number of searches for lost male Alzheimer's patients nearly doubled just last year, to 26 from 14 in 2008, and has more than tripled since 2006, according to emergency management officials.

WORD: On corporations and the crisis of legitimacy

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A most important, very worthwhile article posted at Salem-News.Com. An excerpt:

Limited Liability Investing

Consider the capitalist economic system. The concept of the corporation provides its modern foundation. The corporation is built around the idea of limited liability for investors, the notion that if you buy part or all of a company, you yourself are not liable for its debts or the harm that it might do; your risk is limited to your investment. In other words, you may own all or part of a company, but you are not responsible for what it does beyond your investment. Whereas supply and demand exist in all times and places, the notion of limited liability investing is unique to modern capitalism and reshapes the dynamic of supply and demand.

It is also a political invention and not an economic one. The decision to create corporations that limit liability flows from political decisions implemented through the legal subsystem of politics. The corporation dominates even in China; though the rules of liability and the definition of control vary, the principle that the state and politics define the structure of corporate risk remains constant.

In a more natural organization of the marketplace, the owners are entirely responsible for the debts and liabilities of the entity they own. That, of course, would create excessive risk, suppressing economic activity. So the political system over time has reallocated risk away from the owners of companies to the companies’ creditors and customers by allowing corporations to become bankrupt without pulling in the owners.

The precise distribution of risk within an economic system is a political matter expressed through the law; it differs from nation to nation and over time. But contrary to the idea that there is a tension between the political and economic systems, the modern economic system is unthinkable except for the eccentric but indispensible political-legal contrivance of the limited liability corporation. In the precise and complex allocation of risk and immunity, we find the origins of the modern market. Among other reasons, this is why classical economists never spoke of “economics” but always of “political economy.”

The state both invents the principle of the corporation and defines the conditions in which the corporation is able to arise. The state defines the structure of risk and liabilities and assures that the laws are enforced. Emerging out of this complexity — and justifying it — is a moral regime. Protection from liability comes with a burden: Poor decisions will be penalized by losses, while wise decisions are rewarded by greater wealth. Because of this, society as a whole will benefit. The entire scheme is designed to increase, in Adam Smith’s words, “The Wealth of Nations” by limiting liability, increasing the willingness to take risk and imposing penalties for poor judgment and rewards for wise judgment. But the measure of the system is not whether individuals benefit, but whether in benefiting they enhance the wealth of the nation.

The greatest systemic risk, therefore, is not an economic concept but a political one. Systemic risk emerges when it appears that the political and legal protections given to economic actors, and particularly to members of the economic elite, have been used to subvert the intent of the system. In other words, the crisis occurs when it appears that the economic elite used the law’s allocation of risk to enrich themselves in ways that undermined the wealth of the nation. Put another way, the crisis occurs when it appears that the financial elite used the politico-legal structure to enrich themselves through systematically imprudent behavior while those engaged in prudent behavior were harmed, with the political elite apparently taking no action to protect the victims.

In the modern public corporation, shareholders — the corporation’s owners — rarely control management. A board of directors technically oversees management on behalf of the shareholders. In the crisis of 2008, we saw behavior that devastated shareholder value while appearing to enrich the management — the corporation’s employees.

In this case, the protections given to shareholders of corporations were turned against them when they were forced to pay for the imprudence of their employees — the managers, whose interests did not align with those of the shareholders.

The managers in many cases profited personally through their compensation system for actions inimical to shareholder interests. We now have a political, not an economic, crisis for two reasons. First, the crisis qualitatively has moved beyond the boundaries of a cyclical event.

Second, the crisis is rooted in the political-legal definitions of the distribution of corporate risk and the legally defined relations between management and shareholder. In leaving the shareholder liable for actions by management, but without giving shareholders controls to limit managerial risk taking, the problem lies not with the market but with the political system that invented and presides over the limited liability corporation. . . .