All posts by Marcy

About Marcy

Advocate of Constitutional guarantees to individual liberty.

COBOL: Ancient But Still Issuing Your Unemployment Checks

IBM 360

In spite being 60 years old, the COBOL programming language underpins finance and administrative systems used by businesses and government agencies. COBOL (Common Business Oriented Language) has done its job just fine since it was first used in 1960, so efforts to replace it with modern languages like Python or Java have been half hearted.

Problem is COBOL-experienced programmers are now largely retired, and few younger software engineers are interested in learning COBOL or offered COBOL courses in college.

This situation presents a problem for states trying to deal with the sudden massive surge in unemployment claims due to the coronavirus lockdown and the increase in unemployment amounts mandated by the CARES Act.  Systems based on COBOL don’t have enough people to service them.

This Bloomberg article describes the immediate problem well.

The Covid-19 pandemic has exposed aging, inflexible computer systems at the heart of the U.S. economy — and a shortage of experts to fix the problem. This is slowing the government’s effort to get billions of dollars in stimulus checks to millions of newly unemployed citizens.

The $2.2 trillion CARES Act passed in late March includes a $600 weekly increase in unemployment benefits. That money won’t reach anyone until state agencies update technology systems to reflect the law and handle the flood of new applications.

But the COBOL problem has been waiting for a solution for while. Newer languages could step up to the plate and replace COBOL entirely, but nobody seems to want to undertake the risks or the substantial costs of switching.

So, COBOL remains. Businesses and government scramble for patches when a Y2K or a COVID-19 incident occurs.

Pictured above:  the IBM System/360 Model 50.  In late 1962, IBM announced that COBOL would be their primary development language.  COBOL is machine independent, so mainframe manufacturers readily adopted the language.

Stimulus Plans – Peace For Our Time

CARES allocations

Senate Version of CARES Act that passed the House on March 27, 2020.  Diagram from NPR Special Series: “What’s Inside The Senate’s $2 Trillion Coronavirus Aid Package.”

In difficult times people tend to want immediate solutions, regardless of how those solutions will affect their own future or the future of their descendants.

England’s Prime Minister Neville Chamberlain became the poster child for such actions when on September 30, 1938 he delivered to a jubilant crowd the news that there would be “peace for our time.”

Today the U.S. faces the challenge of a pandemic that is causing not only sickness and death, but also economic havoc. In response to a looming economic disaster, the Administration, Congress, Treasury, and the Federal Reserve all responded forcefully.

Forceful responses, often done hastily under pressure from a fearful public and eager special interests, are never free of consequences.

The Fed’s Response

Between March 17 and March 23, the Federal Reserve significantly increased its power and monetary risk by implementing its plan to provide funds and guarantees to private non-banking entities. This response shifts the burden of default from private investors to the American taxpayer – taxation without representation at its worse. The Just Vote No Blog summarized the Fed’s response in Once Again the Fed Wants to Save Us.

Congressional Response

Close on the heels of the Federal Reserve’s actions, Congress passed three major emergency spending packages, which President Trump signed into law:

* The $8.3 billion Coronavirus Preparedness and Response Supplemental Appropriations Act, signed into law March 6, 2020. The bill provides $6.7 billion in emergency funding to federal agencies responding to the coronavirus pandemic, and $1.6 billion to aid international response.

* The Families First Coronavirus Response Act, signed into law March 18, 2020. The bill includes provisions for paid sick leave, insurance coverage of coronavirus testing, nutrition assistance, and unemployment benefits. Funding available for the program is currently $3 billion. The federal Joint Committee on Taxation estimates that outlays for the next 12 months will be around $97.4 billion.

* The $2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security Act), signed into law March 27, 2020. CARES estimated allocations are: $560 billion to individuals. $500 billion to big corporations. $377 billion to small businesses. $339.8 billion to state and local governments. $153.5 billion to public health. $26 billion to food programs. $43.7 billion to education and “other.”

“Phase 4,” an “infrastructure” bill is being considered. There is not yet an agreement as to what “infrastructure” might entail.

Future Consequences

The three emergency packages now signed into law, plus the anticipated infrastructure bill, represent huge increases in federal spending. Necessary by most accounts to revive an economy suffering from the devastation wrought be the coronavirus, but not free of future consequences.

As of April 6, 2020, the U.S. national debt stood at $23.9 trillion, the largest in the world for a single sovereign country. CARES and the other rescue packages will add to that already enormous debt. Our leaders under advice of post-Keynesian economists choose to dismiss threats of default or hardships imposed on future generations.

Government grows with spending, and government growth is a concern to many. With growth comes overreach and a moving away from the Republic’s legacy of limited government as spelled out in the Constitution. Our leaders, as well as the public, increasingly demand from government whatever it takes to fix a challenge, often without regard to Constitutional protections over individual rights and private property.

Representative Thomas Massie Speaks Up

A popular recent piece of news was Thomas Massie (R-KY) and his request for a roll call vote to approve the CARES Act in the House of Representatives. The narrative was how dare Massie stand in the way of passage of a piece of legislation designed to save us all from total economic collapse!

Thomas Massie dared because it was important to him that the Republic not die of a thousand cuts inflicted by the “let’s do what it takes” crowd. So, he announced before the vote was to take place that he would mount the challenge of a roll call vote and quorum. That prompted legislators to do their job and ensure a quorum in the passage of CARES, as the Constitution requires. As expected, though, legislators present refused a roll call vote.

The Just Vote No Blog recommends you watch Nick Gillespie’s interview with Representative Thomas Massie. The Representative from Kentucky deep dives into questions leaders and the media gloss over, like what is the extent to government’s role in this pandemic, where is the criteria for lockdowns, is the corporate bailout a transfer for wealth from workers to stockholders, why is so much money going into economic relief instead of into efforts to find a vaccine, test every American, produce ventilators.

Once Again the Fed Wants to Save Us

Fed Eagle

On March 23, 2020, the U.S. central bank, the Federal Reserve, announced extensive new measures to support the U.S. economy as the coronavirus continues to ravage small businesses and the livelihood of workers.

Fed Chairman Jerome Powell not only revived the tools used in the 2008-2009 financial crisis but implemented new ones.

In 2008-2009 then Federal Reserve Chairman Ben Bernanke was charged with saving the U.S. economy from the sub-prime massacre. He did that in part by resurrecting Section 13(3) of the Federal Reserve Act, which allowed him to implement key non-conventional tools to provide liquidity directly to borrowers and investors in critical credit markets: Commercial Paper Funding Facility (CPFF), Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), Money Market Investor Funding Facility (MMIFF), and the Term Asset-Backed Securities Loan Facility (TALF).

In 2020, Fed Chairman Jerome Powell was charged with a similar task. Here is what Reuters said on the matter back on March 18,

Pressure is growing in Washington for the U.S. Federal Reserve to use its emergency powers to lend directly to businesses hurt by the coronavirus, according to four people with knowledge of the discussions.

The U.S. Treasury, senior bankers, the U.S. Chamber of Commerce, and some senior senators want the central bank to make broader use of its powers under Section 13(3) of the Federal Reserve Act to provide credit directly to businesses under “unusual and exigent” circumstances, the sources said.

Thus, the Fed established two new programs to accomplish its bidding: The Primary Market Corporate Credit Facility (PMCCF) facilitates lending to small and medium-sized business. The Secondary Market Corporate Credit Facility (SMCCF) provides liquidity for outstanding corporate bonds.

Despite enthusiasm from some quarters for an aggressive Federal Reserve response, there is apprehension.

The Cato Institute points to a constitutional issue. The U.S. was built on the principle of “no taxation without representation.” The people’s representatives in the U.S. House hold the nation’s purse strings. When the Federal Reserve (over which theoretically neither taxpayers nor Congress have any authority) provides credit with little or no recourse, taxpayers are the ones to absorb defaults without having had any say so in the matter.

In a March 27 Bloomberg Opinion piece Jim Bianco (President and founder of Bianco Research) expressed his concerns. Although the 2020 response is similar to that of 2008-2009, the 2020 programs are larger in scale. Blurring of fiscal policy (carried out by the Treasury under the direction of Congress) and monetary policy (carried out by the Federal Reserve under the direction of nobody) endangers the important separation of these two entities. Special purpose vehicles (SPVs) underlying the Fed’s 2020 rescue programs could be abused, resulting in serious distortions in capital markets.  Bianco says,

In effect, the Fed is giving the Treasury access to its printing press. This means that, in the extreme, the administration would be free to use its control, not the Fed’s control, of these SPVs to instruct the Fed to print more money so it could buy securities and hand out loans in an effort to ramp financial markets higher going into the election.

Given the fact that once government programs are put in place they remain into eternity, the American people might find itself stuck with subsequent administrations that could abuse SPVs not only to ensure re-election but also to centralize control of the economy, artificially invigorate stocks, and reward favored industries.

When Challenges Highlight Shortcomings

homelessness

In difficult times, we say “This too will pass.” Difficulties do pass, and our lives do return to normalcy (albeit at times a new normalcy). However, returning to normalcy usually means returning to a status quo. Often, the status quo is a variable that contributed to the difficulties in the first place.

The Just Vote No Blog recommends this article published today in California Political News & Views: COVID-19 Highlights Shortcomings.

The status quo in California includes massive homelessness, drug use, economically vulnerable residents, and inferior government schools among other ills. Enormous amounts of money, effort and focus are allocated to those ills, leaving social and economic structures poorly attended.

Thus, returning to normalcy might not be a good thing, unless that normalcy includes an effort to change the status quo.

Bill Gates in 2015: “We Are Not Prepared”

Bill Gates TED Talk

Five years ago Microsoft founder Bill Gates hoped that the Ebola epidemic of 2013 would be the wake-up call that triggered mobilization towards preparedness. In his April 2015 TED Talk Gates said,

If anything kills over 10 million people in the next few decades, it’s most likely to be a highly infectious virus rather than a war. Not missiles, but microbes.

Such prediction becomes credible when we compare efforts at preparing for war vs. efforts at preparing to fighting epidemics.

… we’ve invested a huge amount in nuclear deterrents. But we’ve actually invested very little in a system to stop an epidemic. We’re not ready for the next epidemic.

Preparedness for war entails reserves that can be called into action, mobile units that can be deployed where conflicts arise, and on-going assessments of logistics. Such preparedness does not exist in public health systems.

An effective public health system needs not only trained and flexible boots on the ground, but also coordinated scientific and technological support, as Bill Gates suggested.

But in fact, we can build a really good response system. We have the benefits of all the science and technology that we talk about here. We’ve got cell phones to get information from the public and get information out to them. We have satellite maps where we can see where people are and where they’re moving. We have advances in biology that should dramatically change the turnaround time to look at a pathogen and be able to make drugs and vaccines that fit for that pathogen. So we can have tools, but those tools need to be put into an overall global health system.

In his 2015 talk Bill Gates was speaking from the world’s experience with the Ebola epidemic that started in 2013. Ebola was contained by 2016. Except for isolated cases elsewhere, the Ebola epidemic mostly affected populations in West Africa.

Even more difficult to contain without effective public health systems in place are pandemics, which unlike epidemics spread rapidly globally. Epidemiologists estimated deaths from two recent pandemics: the 1968 Hong Kong Flu caused one million deaths worldwide and 100,000 in the U.S., and the 2009 Swine Flu 575,400 deaths worldwide and 12,469 in the U.S.

Today we are suffering through COVID-19, not a strain of influenza, but a coronavirus in the same family as SARS (Severe Acute Respiratory Syndrome, first emerged in 2002, deaths worldwide 813, fatality rate 9.5%), and MERS (Middle East Respiratory Syndrome, first emerged in 2012, deaths 858, fatality rate 34%).

Preparedness for COVID-19 is minimal in most countries. In the U.S. there is scarcity of tests and protective gear, insufficient hospital beds, inadequate logistics for keeping grocery shelves stocked, no plan to quickly move school aged children from crowded brick and mortar facilities to small groups or on-line instruction. We are left with lockdowns that will result in massive economic and social disruptions.

Effective public health structures that defend populations against disease cost money. However, such public structures are not built by government throwing money at schemes like Medicare for everyone or universal health care. They are built by intelligent research and development, flexible logistics for people and equipment, absence of excessive red tape, and ample market competition that brings costs down.

Also, the costs of effective health structures must be compared to economic upheavals incurred by lockdowns and absences from work as we are seeing with COVID-19.  As Bill Gates said,

I don’t have an exact budget for what this would cost, but I’m quite sure it’s very modest compared to the potential harm.

Today we are seeing the harm brought about by unpreparedness.   Hopefully after COVID-19 is past, we will see determination towards preparedness.

The Keystone Kops Response to Crises

The Keystone Kops

There is nothing humorous about anyone getting sick or dying. Therefore, it is imperative that we all forcefully call attention to societal failings that place people at risk. At present people around the world are dealing in one way or another with the spread of the new virus COVID-19. As is often the case, it takes an emergency such as COVID-19 to reveal how prepared or woefully unprepared our social institutions are in containing major risks. Such revelations go beyond basic preparedness, but point to structural failings that arise from greed, corruption, or just plain lack of common sense and civil discipline.

Popular culture has a symbol for instances where a great deal of uncoordinated and unproductive activity takes place without appreciable positive results: The Keystone Kops.

The name has since been used to criticize any group for its mistakes, particularly if the mistakes happened after a great deal of energy and activity, or for a lack of coordination among the members. For example, in criticizing the Department of Homeland Security’s response to Hurricane Katrina, Senator Joseph Lieberman claimed that emergency workers under DHS chief Michael Chertoff “ran around like Keystone Kops, uncertain about what they were supposed to do or uncertain how to do it.”  Wikipedia

Disciplined Responses

Reports have surfaced comparing the “best” responses to COVID-19 (relatively rapid effective containment) against the “worst” (undisciplined efforts that fail at rapid containment).

Wired published an article illustrating “best” responses. Countries that are exhibiting effective responses are Singapore, Hong Kong, Taiwan, South Korea and Japan. They learned from SARS and H1N1, and used that knowledge to build and maintain permanent public health infrastructures that can be activated in emergencies.

Singapore, Hong Kong, Taiwan, and South Korea all share the characteristic of using their experiences with prior outbreaks to build a system—and then sustaining it. None of them had to deal with the fear of being a first-mover, of being the first city or country to institute seemingly severe countermeasures. Their countermeasures were already in place, waiting to be reactivated.

In other words, these countries were able to leap into action with effective weapons against COVID-19. Again from the Wired article:

Here’s how those Asian countries are doing it: According to a new article in The Lancet, Hong Kong, Japan, and Singapore all developed their own tests for Covid-19 as soon as the genetic sequences for the virus were published, and ramped up production of the materials necessary for those tests. (That’s a sharp contrast with the US, which still doesn’t have enough tests for nationwide use, and may actually be running out of the materials necessary to make them.) Each country instituted controls over immigration (a controversial move that the WHO recommended against, but that they did anyway). They rejiggered their national financial systems to make sure people didn’t have to pay for tests or treatment. (Easier in places where most health care is already nationalized, to be sure—and in some more progressive American states like California, Washington, and New York. In fact, New York Governor Andrew Cuomo even ordered paid sick leave for quarantined people and free hand sanitizer.)

Keystone Kops Type of Responses

The article in Wired gives a good picture of effective responses to pandemics (by the way, “pandemics” do not denote severity of an infectious disease, but the disease’s ability to spread globally). However, the last sentence in the paragraph above merits examination.

The “more progressive American states like California, Washington, and New York” excel in Keystone Kops type of activity, in addition to lacking any semblance of effective public health infrastructures.
California, for example, spends countless millions on its ever growing homeless-drug industry. Streets in major cities like Los Angles and San Francisco are home to thousands of drug addicts and mentally disturbed individuals. Diseases like typhus and leprosy have been detected among this vast unsheltered population. Response? Governor Gavin Newsom declared on Sunday March 15 that private hotel and motel rooms will be used as necessary to house homeless individuals at risk of contracting COVID-19.

Additionally, the Governor wants all individuals 65 and older not to leave their home. Good luck, seniors, obtaining your food, water and medicines. Not that the rest of the California population is doing all that well obtaining supplies given that many grocery shelves are empty.

The homeless are not the only “invisible” inhabitants in the U.S. Undocumented immigrants welcomed in sanctuary cities and states might not be too anxious to be identified. They, along with other working poor, might not have the luxury or “working from home” like their “professional” brethren.

Indeed, as the article in Wired says “Don’t tread on me” Americans are not as willing as residents of Singapore or South Korea to abide by a highly disciplined lifestyle when necessary. So our Keystone Kops leadership have no means of containing pandemics other than invading private property to house those at risk, closing schools but ordering libraries and recreational facilities to take in children of parents who need to keep on working to survive (let that sink in), and urging people to stay home.

There are Two Californias: Why Pretend there is Only One?

Scales of justice

In California, residents of the coastal cities are different from those who live inland. There is a similar divide between people who live in coastal states and people who live in inland states. Do these two factions enjoy equal say?

Inland states, less populous than coastal states, enjoy equal say in the U.S. Senate, where all states are represented by an equal number of Senators. However, residents of inland California have zero say, since the California Senate structure is based on population, exactly the same as the California Assembly. The needs of inland Californians might be entirely different from those of coastal Californians, but the inland people must live under rules developed and approved by the populous coastal people.

It was not always that way. At one time California operated under the U.S. Senate model, and all its Senatorial districts were represented by an equal number of state Senators. In those days farmers in the Central Valley had a change to compete with their big-city brethren.

That all changed in 1964 when an activist U.S. Supreme Court under the leadership of “Living Constitution” advocate Earl Warrant, declared in Reynolds vs. Sims that all state Senate seats needed to be allocated based on population.

One of the first things the newly empowered big-city folks did was to change the California Legislature from part time to full time. That happened in 1966. A full-time legislature is usually defined as one that meets throughout the year, while a part-time legislature meets for a portion of the year. For reference, today we have 10 full time state legislatures out of 50.

1966 marked the birth of the professional California politician, without other means of support, who keeps recycling through the state’s political system. It started the exponential growth in the volume of bills micromanaging every nook and cranny to be found. Staff, salaries, benefits, taxes, fees all grew as well.

For those readers interested in the first part of the new reality – Reynolds vs Sims, and the resulting neglect of farmers in the Central Valley – here is a link to an article in the California Political News & Views. Note that in his introduction to the article, publisher Steve Frank, mentions the ruinous results of California moving to a full-time legislature:  All California is Not Alike.