I don't usually offer professional recommendations in this space, but my dear friend, San Jose personal injury attorney Dick Alexander, is the subject of a new video that will be of interest to anyone who needs or knows anyone who needs a personal injury attorney. Dick's been my close friend and legal adviser for more than 30 years. We met back when he was doing draft counseling for conscientious objectors during the Vietnam War. Twenty years later, he handled the landmark "greenwashing" lawsuit we successfully settled with General Electric, which was misleading consumers by selling lookalike energy efficient light bulbs that were in fact wolves in sheep's clothing. In this video, Dick's grateful clients Jackie and Gerry Pighini talk about the person I've been proud to call a best friend for decades now (disclaimer: Dick is a board member of my non-profit org., the Center for Media Change, Inc. and has also been a generous donor to my political campaigns):

February 26, 2009

My previous posts on the credit crisis have been getting so many hits I'll weigh in on that topic again with a brief observation and a very simple proposal. First, the observation:

Most of the talking heads attribute the current credit crisis to the housing bubble, the sub-prime loan mess and the securitization of debt of dubious value. But those are effects, not causes. I keep waiting for someone to point out that all three are symptoms of something else: the 1980 repeal of the federal law that restrained usury. The repeal of federal protections against usury created the economically poisonous illusion that investors can readily and reliably obtain high double-digit annual returns, legally, simply by purchasing commoditized debt obligations. Over the next 20 years, the financial services industry chased that illusion like a junkie after a fix, coming up with financial instruments that grew increasingly deranged. But what started it all was the repeal of the usury laws. That lit the fuse. It also dampened interest in more economically productive investment opportunities such as small businesses. Why invest in a small business if you think you can just sit back and collect double digit returns from those wizards on Wall Street? I'm astonished that I am yet to hear a single T.V commentator connect those dots, which are practically sitting on top of one another.

A related observation: legal or illegal, usury does not work, at least not as a practical economic theory. It just doesn't work. Not over time. It's like making a horse carry 1000 pounds. The horse dies. And dead horses don't pay their bills. There we are.

So what happened is that usury was made legal, and then it got securitized.

My modest proposal:

Make usury illegal again.

Reinstate federal protections against usury or develop new protections that set practical and fair limits on the amount of interest banks and other lenders can charge on items like mortgages and credit cards. If investors know the most they can legally make on securities tied to mortgage and consumer debt obligations is in the single-digit neighborhood, there would be no incentive to create toxic pools of debt like those that have clogged up our consumer and small business banking system.

Bringing back the usury laws for mortgages and consumer debt is a critical part of the regulatory medicine required to restore stability and sanity to our banking and financial services sector.

February 26, 2009

My previous posts on the credit crisis have been getting so many hits I'll weigh in on that topic again with a brief observation and a very simple proposal. First, the observation:

Most of the talking heads attribute the current credit crisis to the housing bubble, the sub-prime loan mess and the securitization of debt of dubious value. But those are effects, not causes. I keep waiting for someone to point out that all three are symptoms of something else: the 1980 repeal of the federal law that restrained usury. The repeal of federal protections against usury created the economically poisonous illusion that investors can readily and reliably obtain high double-digit annual returns, legally, simply by purchasing commoditized debt obligations. Over the next 20 years, the financial services industry chased that illusion like a junkie after a fix, coming up with financial instruments that grew increasingly deranged. But what started it all was the repeal of the usury laws. That lit the fuse. It also dampened interest in more economically productive investment opportunities such as small businesses. Why invest in a small business if you think you can just sit back and collect double digit returns from those wizards on Wall Street? I'm astonished that I am yet to hear a single T.V commentator connect those dots, which are practically sitting on top of one another.

A related observation: legal or illegal, usury does not work, at least not as a practical economic theory. It just doesn't work. Not over time. It's like making a horse carry 1000 pounds. The horse dies. And dead horses don't pay their bills. There we are.

So what happened is that usury was made legal, and then it got securitized.

My modest proposal:

Make usury illegal again.

Reinstate federal protections against usury or develop new protections that set practical and fair limits on the amount of interest banks and other lenders can charge on items like mortgages and credit cards. If investors know the most they can legally make on securities tied to mortgage and consumer debt obligations is in the single-digit neighborhood, there would be no incentive to create toxic pools of debt like those that have clogged up our consumer and small business banking system.

Bringing back the usury laws for mortgages and consumer debt is a critical part of the regulatory medicine required to restore stability and sanity to our banking and financial services sector.

February 24, 2009

We got a nice little mention in Edward Helmore's column in the Guardian today.

Excerpt:

Spot.Us first solicits ideas for investigative stories, then uses an approach called "crowdfunding" to send a reporter out. "We distribute the cost of hiring a journalist across a lot of different people," says David Cohn, the 26-year-old founder of the not-for-profit firm. "Content will then be given away to local news organizations or sold for unique publishing rights to recoup the costs."...

Opinions are divided on whether Spot.Us and its film documentary counterpart, Reelchanges, will invigorate public participation or merely undermine editorial instinct. Others worry that crowdfunding could skewer coverage to suit those with the most to spend. As a safeguard, both Spot and Reelchanges say they will ensure that no contributor gives more than 20% of a story's cost.

Hal Plotkin, the founder of Reelchanges, notes that: "Our revenue is increasing whilst everybody else's is decreasing for the simple reason that we're going to our customers, asking them what they want and then asking them for a small amount to help create it. It's not rocket science - it's how every other business works." But, Plotnik [sigh] says bleakly: "The media is so full of authoritarians, they would rather go out of business than share power with a community at large that could help revive their economic model."

Spot.us and Reelchanges.org are projects of the Center for Media Change, Inc.

The Guardian is the most popular website in the United Kingdom.

February 14, 2009

Crowd-funding has come to public television! I'm pleased to announce that the collaboration between our non-profit organization, the Center for Media Change, Inc. and our ReelChanges.org project, and Maryland Public Television (MPT) hits the airwaves starting on Monday. At that time, MPT will start airing the following 15-second spot at the end of its television programs...

And here is a link to MPT's new 30-second promo, which airs at various times of the day:

Finally, here is a link to the first project in the MPT production pipeline, which we carefully selected to demonstrate the power of our new public media fundraising model (sorry, I can't embed it yet, that's coming soon).

What's really exciting is the growing validating support for the basic idea behind our crowd-funding model, which we share with David Cohn's innovative open source Spot.us project (which is also fiscally sponsored by our Center for Media Change, Inc. non-profit).

David likes to say that what we are doing is trying to prove that "journalism can survive the death of so many of its institutions" and, to be sure, that's a very big part of it. But I suspect he'd also agree its about experimenting with new ways to use the Internet that make mass media more democratic and representative while maintaining professional standards.

After all, why should a tiny handful of programming executives, mostly from big corporations, make all the critical decisions and have all the power to determine what we see on TV and what we read about in the newspapers? Shouldn't we spread that power around a little more widely? Answer: we should. Better answer: we must, for the sake of our democracy, which depends on the free flow of information and ideas.

Faced with growing financial pressures, the big media corporations have, for the most part, abdicated that responsibility. This week, for example, many of them are busy running stories carrying the unexamined claim that the big usurious banks are "too big too fail" while simultaneously accepting lucrative full-page ads paid for by taxpayers from those very same firms. Gee, I wonder where the front page stories are about that?

Our work with MPT is another big step in our drive to enable the American people -- you, me, all of us -- to have a greater -- and more direct -- say in how the media operates, what they cover and from what perspective.

How can you help?

Well, if able, you could make a contribution, in any amount, to this project (or any of the others on reelchanges or spot.us). I believe the success of our new people-powered model is now inevitable. But the sooner we can show that we Americans are prepared to think for ourselves, and build our own more trusted and authentic sources of professionally produced information and news, the sooner we can build an alternative to the corporate-financed media that does such a poor job of reflecting who we really are and what we really care about.

This is a great country and our media should reflect that. It doesn't. But we can fix that.