Hobby Lobby and the death of all reason

Today the Supreme Court released their verdict in Burwell v. Hobby Lobby or, as people know it, the case about contraception.  The ruling came down 5-4 with all the women plus one dissenting.  The talking heads have been at it all day and I doubt that I could add anything very novel to the discussion about the politics around the case.  That said, my particular schooling is in business so there are some things I want to say about that.  First let's talk about the case.

Just the facts

Hobby Lobby, Conestoga Wood, and Mardel are each corporations that are privately owned by small families.  For brevity I will refer to Hobby Lobby from here on out, but I include all three companies when applicable.  These families have brought cases against HHS over the Affordable Care Act's mandate that large employers provide contraception to their workers.  Specifically they object to four of the 20 contraceptives that have been approved by the FDA on the basis that they can prevent a fertilized egg from implanting in the uterus..

• Plan B "morning after pill" (Note the sidebar box at the top of the page)
• Ella "morning after pill"
• Two different Intra-Uterine Devices (IUDs)

According to the Mayo Clinic, Ella can prevent a fertilized egg from attaching to the uterus.  As for the IUDs, one does and one doesn't according to WebMD.  Disclaimer here:  I'm not a doctor.  Do not take what I say as definitive medical knowledge.  I just know how to use Google to find things.

So Plan B and the copper IUD prevent the egg from ever getting fertilized.  That seems like relevant information in a case about abortifacients but who needs facts in a legal case?  I can find no place where actual doctors were brought in to educate anybody about how these things work.  Just accept that two contraceptives whose only function is to prevent fertilization were lumped in as abortion drugs.  And real abortion drugs, such as RU-486, are not mandated to be covered by the Affordable Care Act.

If you really want to get your nerd on, here's an actual academic paper on emergency contraception.

Seems legit

There are particular lines from the verdict I want to call out.  Ruth Bader Ginsburg's dissent is becoming perhaps the mostly widely read dissent (by laymen) in history so I'll leave that alone.  I'm more interested in lines from the majority opinion.

"According to HHS ... if these merchants chose to incorporate their businesses ... they would forfeit all RFRA (and free-exercise) rights."

Yes.  Exactly this.  By definition a corporation is its own "person" in the legal sense.  To quote that link, "The process of legally declaring a corporate entity as separate from it's owners." (emphasis mine)  It is separate.  This is meant to protect the owners, but it also means that the new entity does not share any personal traits of whoever owns it at the moment.  Not heredity, nationality, opinion or religion.  This new entity is not concerned about it's own immortal soul, and can make no decisions concerning religion.  So it is right that once you incorporate a business, the business loses RFRA protections.  The owners are still protected personally, but the gap that keeps them safe from liability also separates the business from their religion.

"As we will show, Congress provided protection for people like the Hahns and Greens by employing a familiar legal fiction: It included corporations within RFRA’s definition of “persons.”

Even the majority acknowledges that considering corporations to be people is a fiction.

"And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga, and Mardel protects the religious liberty of the humans who own and control those companies."

Nope.  They're two separate groups.  See above for the definition of incorporation.

“General business corporations do not, separate and apart from the actions or belief systems of their indi­vidual owners or employees, exercise religion." - Third Circuit

"All of this is true—but quite beside the point. Corporations, “separate and apart from” the human beings who own, run, and are employed by them, cannot do anything at all. " - Alito

Someone send the Third Circuit a basket of cookies.

Let's look at Alito's point.  Apart from the people who run it, the corporation is basically a stump.  When I was a boy, my great-grandmother was almost always sedated by her medications.  Other people cared for her and made necessary day-to-day decisions for her.  If one of the people who saw to her needs was Jewish, would that make my grandmother a Jew?  No, it wouldn't.  What if they were gay, would my grandmother get a hankering for girls?  No, that's idiotic.  The traits of those who act on behalf of an entity are not assumed by that entity.

"According to HHS and the dissent, these corporations are not protected by RFRA because they cannot exercise religion. Neither HHS nor the dissent, however, provides any persuasive explanation for this conclusion."

Wait... people arguing in front of the Supreme Court couldn't explain how a mental concept couldn't exercise religion?  Who did the government send, Mr. Bean?  Dorf does law?  WTF?  One more:

"The owners of the businesses have religious objections to abortion, and according to their religious beliefs the four contraceptive methods at issue are abortifacients."

See how science and reason were barred from the courtroom?  Show me in the bible where anyone discussed Plan B or copper IUDs.  Plenty of religion relies on unquestioning faith and I'm not challenging anything intangible like heaven or a soul or a deity or the divinity of certain practices.  But I am challenging the idea that uninformed opinions can be passed off as religious beliefs.  I mean opinions about things that can be explained in the here and now.  

I guess, in the face of Young Earth Creationists, that needs to be narrowed further.  These drugs and devices were invented recently, and information about how they actually work is only hidden behind the effort to find it.  Just researching this blog post I have 20 or so tabs of information open.  It is easily found.  This isn't ignorance on the part of the Greens and Hahns, it's forced negligence.

What now?

The critical problem here is that the separation between owners of corporations and their companies has now been bridged.  Under the guise of religious liberty (and isn't that always the way?) owners can now enforce whatever they want on the employees of their companies.  It doesn't even have to pass a test as a legitimate part of the religion or even a fact.  So long as the owner claims it is his/her religious view, they now have Supreme Court precedent to enforce it on their employees.

What about when the pendulum swings the other way?  When someone dies because they didn't have access to medicine or a transfusion or some other thing denied by religious edict, will the owner still enjoy the protection of the corporate structure?  Or will that protection be found meaningless in light of the transference of actions between owner and corp?  All people attached to a corporation work on behalf of that entity.  If the entity itself is working on behalf of a person, then the separation is meaningless and will be found so before a judge before too long.  This gap in liability is what separates a corporation from a sole proprietorship.  Today's ruling carries dangerous precedent for our entire approach to business structuring.

I submit that the solution to not just today's travesty but several rulings going all the way back to Citizens United is this: Update the Dictionary Act definition of "person" to not include non-biological entities.  Give those things that enjoy legal status but are not human another word.  Perhaps "entity".  And that way we could leave behind this last decade of insanity where people seriously discussed whether the company itself, instead of the people acting on its behalf, were actually capable of worship, or participation at a super-citizen level in our democracy.

Aereo shut down by SCoTUS

Today, 6/25/14, the Supreme Court released their verdict [PDF] on the trial of ABC v. Aereo in favor of ABC and other major networks.  At issue was the question of whether live television could be captured out of the air and rebroadcast on the internet for a fee.  This being exactly what Aereo was built to do.

How does television work?

There are three major sets of players in broadcast television.  The content creators are where the shows are filmed.  Disney is an easy example of a content creator between its Disney channels, ESPN and other properties.  Once the shows are created, the rights to air them are purchased by major networks.  Here we're talking about ABC, NBC, CBS, and Fox.  These titans buy the exclusive rights to distribution and sell those rights to local stations around the country.  The local stations are the final player.  They raise money by selling advertising time (commercials) and using that money to pay a network for content.

What about Aereo?

The history of the Aereo case has been a little ridiculous.  Broadcast television signals have traditionally been free.  Anyone with a set of rabbit ears could watch whatever was being broadcast.  At first, Aereo simply put up a single expensive antenna and allowed subscribers to its own service to watch that stream via the internet.  After all, the broadcast was free.  And the internet is free.  So why not glue the two together for a small fee?

An early legal argument was that the people watching on the internet didn't even have their own antennae.  Long story short, Aereo now has a warehouse full of tens of thousands of tiny antennae which are nominally receiving the broadcasts.  When you subscribe to their service you are renting one of these things and getting its signal on your internet device.  I highly doubt that you aren't still watching a stream from the original antenna, but it made some lawyers happy for a while.

Legal history and Judo

The original copyright act gave the holders of a copyright the legal right to determine how their work was distributed.  When all TV was sent through the air all parties were happy with this deal.  Then something called CATV was invented where one well-placed antenna was connected via coaxial cable to hundreds of homes.  This enabled many homes to receive signals they couldn't otherwise get due to geography or other factors.  It was initially found that CATV services were "viewers" and not "performers" because they only enabled the actual viewer to get a better connection.  The Democrat controlled 94th Congress fixed that right up when they amended the Copyright act and added the Transmit Clause.  Now the rights of the copyright holder don't stop at the antenna on your roof, they stop right at your eyeballs.  Anybody or anything that forwards on a copyrighted work is a "performer", and this is where Aereo got hit.

Follow the money

Why does all this matter?  Stations pay networks "retransmission fees".  Aereo doesn't pay anyone anything.  If they prevailed in court then the whole money pyramid would have fallen apart.  Local stations might not have paid for content and instead found some free way to acquire it.  All protected works that could be captured by camera or other device would enter into the public domain without payment to or even consent of the copyright holder.  People don't pay for things they don't need to pay for, so a lot of money would have been sucked out of the whole TV industry as people got squirrely trying to find their free TV.

What I say

I have been pulling for Aereo all along the way.  I'm a huge fan of technology and innovation and thought that Aereo might have something worthwhile with their model.  If something was going to be free anyways, it should be free however I want to receive it, right?  One of my goals in writing this blog was to force myself into thinking about these things more critically.  I can understand the calls of artists and entertainment workers who say, "If someone is making money off of my work, then I want a cut."  The warm glow of appreciation doesn't pay the rent.  

Innovation and entrepreneurship are awesome.  Technology for the sake of technology though, that's usually dumb.  The "pain" Aereo is addressing is that I can't watch local New York TV while I'm in Texas.  That's not a thing I'm entitled to.  My desire to have all the things that I want is not reason enough to jeopardize the livelihoods of the hundreds of thousands of people who make TV possible.  If I put out a performance with a copyright, I feel justified in saying that nobody else can profit from it without my say so.  If you want to redistribute it for free, have at it.  But if you're going to make $97 million off of my work you're going to give me some of that.

I think there's a market for a home product that takes broadcast signals and streams them from your home computer.  Maybe Aereo will evolve that way.  As much as I hate to say it, I think I side with big business on this one.  Congress clearly defined the old Community Access Television (CATV) services as "performing" the works they were redistributing and that ruling stuck with the cable companies that followed.  Aereo is effectively one giant CATV service, and those are the rules they'll have to play by.

What everyone needs to know about macroeconomics

All politics boil down to economics.  As far as college majors go, Economics is the "why" of politics and Poli Sci is the "how".  Once you know who stands to profit from a specific thing then you can watch who lines up for or against that thing, and know who is owned by who.  So here comes a bold statement which I'll spend the rest of this post explaining.

The richest people in the country profit when the United States fails.

Finance 101: Risk, Bonds, and Interest Rates.

A bond, in financial terms, is a contract for a loan of money.  If you buy a bond from my company, it means that you will pay me (for example) $1,000 today and I will pay you that money back plus some interest in the future.  You, as an investor, need to make a decision about which company you will make this contract with.  Obviously you want the safest investment, but maybe a bigger payoff might be worth a bigger risk?  This is exactly the sort of decision investors make.  Companies will then offer interest rates on their bonds that reflect the risk of the investment in order to entice investors.  Thus...

Interest rates indicate risk.

We can all see this in our dailiy lives.  Car and home loans to risky people carry hefty interest rates.  "Insurance for anybody" places have exhorbitant rates.  It's all about risk.  

So what is the safest investment out there?  The US Treasury Bond.  The US has never defaulted on its debts and is unlikely to lose its sovereignty, so it is the global standard for financial stability.  (Regardless of what we see on TV.)  It is so stable that other financial markets are built on top of it, using the "T-Bond" rate or "Bond Rate" as the basis of their calculations.  If you have owned a credit card then you have heard about the "Prime Rate".  The Prime Rate is calculated by taking the Bond Rate and adding some number of percentage points to it.  So when the Bond Rate goes up, so does your credit card payment.

Who holds the bonds?

The fear-mongers like to tell you that China holds the majority of our bonds, and thus are some sort of "majority shareholder" in our country.  It's not true.  They do own a little bit, but most of it is owned by our own people.  When I say our own people, what I mean is corporations and financial institutions.  And who owns THEM?  Usually more financial institutions.  Repeat and repeat and eventually you'll end up with something like a hedge fund or some "bank" you've never heard of that is controlled by someone you probably have heard of.  Someone like Warren Buffet or George Soros or the Koch brothers.  In short...

The richest of the rich control most of the US Treasury Bonds on the market.

Regardless of how many layers of companies and banks we're talking about here, the rich people control the bonds.  So from here forward I'll skip the middle men and refer to them directly.

So how do they profit?

Holding a treasury bond is like treading water financially.  Having it doesn't make you rich.  Any other investment you make is going to make you money faster.  It just keeps the money you put into it safe from inflation.  Mostly.  That's meat for a different post, but for now we're just going to say that Treasury Bonds keep your wealth current for the times, but do not increase it.

What happens if that interest rate were to suddenly go up?  Those bonds could be sold for more money than they were purchased for, and the sellers would cash in very nicely.  How might that happen?  At a normal company a bad product launch or the death of the founder might cause rates to go up as the company's future is less certain than it was before.  Countries are more stable, and the US is the most stable of all.  But we're not immune.  

Just a couple of years ago we saw our elected representatives hold the country's reputation for stability hostage.  Remember that the entire world relies on us to be their rock, financially.  When our economy tanks, so does everyone else's.  It wasn't the first time that we saw a "Debt Limit" fight happen with the sitting President.  But it was the first time we got our credit rating downgraded.  (A credit rating is the score a bunch of professionals give to bonds to let investors know how risky they are.)  

Why did it go that far?  Was it really the case that the ideological differences between the Republicans and the President brought them to this impasse?  It wasn't.  While there are a few notable statesmen out there, most of our politicians reverse themselves on their ideology so often they make a Tilt-A-Whirl dizzy.  So what was it then?

Bringing it all together

If the US is seen to have an increased risk of defaulting on it's obligations, then our interest rate must go up.  That's just math.  When it goes up, the people who hold the bonds can sell them for a profit.  We're talking Trillions here, collectively.  Crazy crazy money.  Where does that money come from?  You and I.  It's like this...

You -> Loan Company (mortgage, etc) -> Bank -- (Buy)--> T-Bonds --(Sell)--> Koch Industries 

Everyone to the left of "T-Bonds" on that line gets hurt when the Bond Rate goes up.  Everyone to the right benefits.  Which side is now allowed to make unlimited donations to financial campaigns?  Both, technically. But you can see whose money is going to who by what they're trying to do to our Bond Rate.  People serve their masters.  It's always a matter of trying to help their masters profit.  Watch what people do to see who they feel their masters are.

Recursive Loop

A recursive loop is a programming mistake where a bit of code replicates itself over and over until you run out of memory.  Think of it like tribbles.  I figure every blog is going to have a post about the purpose of the blog.  What to expect, who am I, all the cocktail party details to discuss where we're going from here.  Blogging about blogging.  It's recursive by nature.  See what I did there?

Who am I?

I was born and raised in California.  I moved around a bit, but generally consider Riverside County, CA to be my home "town".  My teenage years were spent in Hemet which is where I graduated high school.  It's a pit.  Never go there unless your mission to rescue someone from living there.  I got to experience the "tech boom" of Seattle first hand.  Especially the part where tons of overqualified people desperately searched for any job they could find after the bubble burst.  In 2003 I moved to Alabama where I quickly learned to hate college football, but also where I began my college education.

I now have a BSBA in Management Information Systems (summa cum laude, baby!) and an MBA on my wall.  I have been in IT since 1997 in a variety of roles.  Business and technology are my areas of specialization and I expect to blog mostly about them.  I also play Eve Online and may share my thoughts on that.  I consider it an MMORPG with no equal out there and deserving of some serious discussion.

Where are we going? (And why am I in this handbasket?)

What I want to do here is to put my thoughts out there in a way that lets me add detail and logic in a way that just isn't possible with Facebook posts.  I'm not a journalist by nature, so I hope that this will school me to do more research on my topics than I might for a casual conversation.  I expect to address topics in managment, economics, politics, technology and gaming.  I'll also be looking into some of my interests such as alternative energy and transportation.  So this blog will wander some as it goes.  But since I expect my only readers to be friends of mine then it should be okay that they come here for my take on things and not as their main news source.

Why?

I do more than what is expected of me.  I think bigger thoughts than are required for my day job.  I am required to write code and do low level SCCM administration 8 hours a day.  I am educated to do corporate level strategy for a major corporation.  The disconnect between my capability and my actual job leaves me with tons to say and nobody to say it to.  So the overflow will land here where hopefully I can educate and be educated in return.  (This being why I named the blog what I did.)  If the feedback points me to do more posting on a certain arena maybe the blog will crystallize in that direction.  But for now it is just me trying out putting content on the web and seeing what shakes out.

Fair warning: I have opinions.  Anything I post from the political realm will probably be ranty in nature.  Our national discourse is in the toilet, and I expect to be lamenting that here in written form.  But we'll get to that later.  For now, stay with me and help me improve and I will try to turn this thing into something worth reading.

The most important decision of the century.

Recently I saw an article on CNET, which is a solid source for tech-specific news, that Tesla Motors was releasing the use of its patents to other companies.  The urge to think, "oh neat, but it doesn't affect me," is easy and probably the default response of most people.  To me it was like watching the Berlin Wall fall.  This is a decision of epic proportions.

How big is it?

This is one of those moments they will teach about in business school years from now.  It is like Henry Ford arranging his factories into production lines.  Or IBM passing up buying DOS from a startup named Microsoft.  By welcoming competition into the niche market that Tesla created we can expect greater innovation and lower prices as companies compete for our money.  As the electric car gains market share on our roads we can put other related technologies into play.  The forces are there for business to make a ton of money exploring this new market.  But will they?

Under the covers

The $8 trillion dollar elephant in the room is Big Oil.  With hybrid cars like the Chevy Volt or the Toyota Prius, petroleum based gasoline is still being carried in those cars.  They may use less of it but those drivers are still dependent on the world oil market.  Pat yourself on the back Prius owners for giving them a dollar instead of a buck fifty.  Tesla cars are different because there is no gasoline involved.  That's not to say that they are automatically a treehugger's dream.  That electricity needs to be generated somewhere and Tesla cars only shift the burden from under the hood to the local power plant.  If your city runs on dirty coal or nuclear power, your Tesla isn't doing the planet any favors.  Still, the oil industry is dead set against America getting off gasoline for our driving.  The opening salvos of this war have already been fired.

Big Bada Boom

I'm not saying that New Jersey is the poster state for corruption.  I'm just saying that blocking free enterprise hardly seems like the will of the majority or a conservative principle.  Chris Christie joined some other red states in blocking Tesla stores from operating locally.  For those who aren't familiar with their model, Tesla has no dealerships.  They have locations where you can test drive a car and talk to a live person, but all sales are done online and the car itself is shipped to the buyer's house.  Your local Ford dealership (or any other car company) is not a subsidiary of that car maker.  They are independent businesses with licensing arrangements with the global car companies.  Tesla uses a model that makes dealership businesses obsolete.  That doesn't mean that dealerships are done for.  If their car making overlords start selling legitimate electric car competition using the dealership model then everyone wins.  But you won't hear that idea floated because the auto and oil industry have been in bed together for over a century and they aren't likely to split up easily.

So is there hope?

I don't know.  I have my hopes as I'm sure you do.  This is one of those areas where my idealism takes hold and says that an electric transportation utopia is a financial viability.  Zero-gas, zero-emission cars running on wind, water and solar power profiting companies for the next century as the combustion engine has profited them for the last century.  Maybe then we can stop having red days where you have a choice between your health and leaving your house for an education.  And if the US wants to keep talking about itself as the foremost country in the world when it comes to science, innovation and the economy, then maybe we should be doing those things instead of resting on the breakthroughs of the past.