1.7 ¢ for Your Thoughts

Monday, February 23, 2009


We recently celebrated the 200th birthday of our nation's greatest president, Abraham Lincoln. To commemorate the occasion, the US Mint released new pennies with four new designs on the reverse showing important scenes from Lincoln's life. It's a nice sentiment—only it's 100 years too late.
It is now time to eliminate the penny.
As of last March, it cost about 1.7 cents in labor and materials to make a penny. Let's say the average wage in the U.S. is about $17 per hour. If so, it takes about two seconds to earn one cent. Furthermore, if it takes only two seconds extra for a cash transaction that uses a penny, the cost of time wasted in the U.S. per person is about $3.65 annually. The cost for all Americans combined is about $1 billion.

Nothing takes a penny anymore—not gumball machines, not parking meters, not toll booths. Most Americans seeing a penny on the ground will not even bother to pick it up. It will take more than two seconds and they will be losing money. In fact, there has never been a coin in the US worth as little as today's penny.

As of 2007, Due to inflation, a nickel is worth approximately what a penny was as recently as 1972. In 1857, the United States discontinued the half-cent coin as no longer viable, and it had a 2008-equivalent buying power 13¢. That made the new smallest coin the penny, which (do the math) had a 2008-equivalent buying power of 26¢--the lowest denomination coin had the value of more than today's quarter. Now that's a pretty penny!
I'm not trying to be a penny pincher. I think I am being reasonable here—I am only saying, "Let's get rid of the penny." But while we are at it, let's look at the nickel.

Eliminating the penny would create a huge demand for nickels, which are already produced at a loss. The nickel has not been worth a nickel since 1974, and it now costs over a 10¢ to make one. So, maybe we should make the penny the new nickel and stop making nickels. The economist François R. Velde has suggested such a plan and estimated that the change would cause minor monetary inflation of $5.6 billion. That's just a couple-of-year's bonuses for banking and financial executives. Since we are losing as much as $40 million a year in production costs and $1 billion in productivity, we'd be turning a profit in 5 years. I don't expect to see that kind of performance from my TIAA-Cref account anytime soon.

There are sentimental reasons to keep losing $1.04 billion in bad-coin policy each year: we love Lincoln and we owe it to him; if we eliminate the nickel, what happens to Jefferson? As you may suspect, I have answers.

Lincoln is still on the $5-bill. And, if we eliminate the nickel, Lincoln's penny will still survive but be worth 5¢. So, what about Jefferson? He's on the $2-bill. While we are overhauling our currency, let's eliminate the $1-bill (Washington can stay on the quarter), bring back the $2-bill (which costs 4¢ to make) and use the golden $1 coin (which costs about 10¢ to make). Our greatest presidents: Washington, Jefferson, and Lincoln keep their honored place in American currency and we save money in the federal budget. Everybody's happy; everybody wins. Let's not be "penny wise and pound foolish."

Finally, the dime has not been worth a dime since 1980, and the quarter fell below its face value in 2007. But for now, it's one step at a time. I say we go for it—in for a penny in for a pound! If I have it my way, we'll all be saying, "A penny saved is a nickel earned."

Well, it's just my two cents, but I think I may have just figured out how to get us out of this financial crisis.

Crimes of Olympic Proportion

Monday, February 16, 2009

Readers of this column know that I am no fan of Michael Phelps (Gold Medal Platitudes, Aug 25, 2008). His post-gold-medal interviews where he droned that anybody-can-achieve-anything-if-they-WANT-it-badly-enough sent an irresponsible and discouraging message to the average athletically-mediocre, intellectually unimpressive American. And then the UK-based "News of the World" published a picture of Phelps doing bong hits at a University of South Carolina party. Imagine! A college-age kid smoking pot at a college party. Scandalous? Yes, but for the wrong reasons.

We have been waging a War on Drugs since the Nixon Administration at a cost of almost $20 billion a year, $600 a second. What do we have to show for it? Almost 15 million Americans self-identify as current marijuana smokers. There has been no significant decrease in drug use. There has, however, been a significant increase in prison populations. There are now over 2 million Americans in prison. That is more that 1 out of every 100 adults. We are only 5% of the world's population, but we are 25% of the world's prisoners. Can we be that pathologically criminal?

Freelance writer and mental health practitioner, Christina Gleason, writes, "According to the Department of Justice, over half of all sentenced federal prisoners are drug offenders. Over 80% of the increase in the federal prison population was due to drug convictions between 1985 and 1995. In addition, a 2006 report claimed that 17% of State prisoners and 18% of Federal prisoners committed their crimes in order to obtain drug money. According to a 2001 report, the average sentence for all offenses was 56.8 months. The average sentence for drug offenses was 75.6 months, while the average sentence for violent offenses was 63.0 months."

Someone is arrested for violating a drug law every 17 seconds. Someone is arrested for violating a cannabis law every 38 seconds. And our last three presidents have all used marijuana. In a White House Drug Policy brief, the Bush Administration attempted to put-to-rest the false notion that there are thousands of people in prison for smoking marijuana claiming less than 1% of all prisoners were behind bars for simple marijuana possession. Well, that is still 15,000 people in prison for doing what Phelps is accused of doing. I am not saying we should legalize drugs, but we should stop putting people in prison for using them.

In 2006, there were 829,625 arrested for using marijuana. That is 829,625 criminal records; 829,625 court appearances; 829,625 lawyer fees; 829,625 families in crisis, 829,625 explanations on job applications, 829,625 young lives disrupted or destroyed. And this is all for violating a 1937 law that was racially motivated to harass Southwestern Mexican immigrants and Northeastern big-city black jazz musicians.

High-profile people can bring about high-profile public awareness. Michael Phelps has the opportunity here to do something truly courageous, responsible, and helpful. Richland County Sheriff Leon Lott is still considering arresting and prosecuting Phelps for using an illegal substance. Rather than sleepwalking through a series of "I'm young and I made a mistake" public apologies, maybe he can take a stand against the USA's reckless and irresponsible drug policies.

Now is the time to speak up rather than lay low. Phelps has been banned from competition for three months. Kellogg's dropped Phelps from an endorsement contract after the photo surfaced. Ironically, regularly eating the products Phelps endorsed will probably do more physical harm than smoking marijuana. However, Michael Phelps is the kind of guy who moves through life as he moves through water—avoiding friction.

Please, Michael, prove me wrong. Show me you are not just a callow young man with big feet, big hands, and extraordinary lung capacity. Speak up. Stand up. It is time to admit that this 38-year-long War on Drugs is about over, and we lost. It's time to sue for peace. In this war, Michael, you can be a negotiator—or a casualty. It's your choice.

The Scarlet Lette-R

Monday, February 2, 2009

Yesterday, I attended a lecture by Harvard Law Professor Randall Kennedy at the Center for Excellence in Jackson Missisippi. He was in attendance to talk to a group of Phi Theta Kappa Faculty Scholars. Kennedy was discussing his recent book, Sellout.

Kennedy’s central hypothesis is that all groups suffer from “betrayal anxiety.” We all fear that a close confidant, a friend, a partner, will sell-us-out for personal or financial gain. As a nation, we were founded on betrayal anxiety, according to Kennedy. He pointed out that the only crime specified in the US Constitution is treason: the most extreme form of selling out.
In the course of his lecture, he focused on the book’s most detailed chapter: Clarence Thomas. The case for Thomas’ betrayal is that he abandoned his race by marrying a white woman. He benefitted from affirmative action and then voted against it. Rather than help his race, his conservative political views condemn many black Americans to live in poverty and desperation. Worst of all, the sellout accusations go, he does the white man's bidding.

Kennedy disagrees. While Kennedy admits to disagreeing with Thomas on political issues, he argues that Thomas’ career on the Court does not amount to “selling out.” Kennedy’s careful analysis of Thomas’ opinions shows that he does no one's bidding and certainly not that of Antonin Scalia—as many critics claim. While Kennedy finds much fault with Justice Thomas, he does not find him to be a sellout.

Following the lecture, I went up to Dr. Kennedy and suggested a candidate for sellout: Michael Steele.

Kennedy quickly disagreed with me. Steele is not a traitor to the black race, he insisted. His political views may not toe-the-line for African American concerns, but he finds the man to he honest and consistent—certainly not a classic sellout. Kennedy pointed to Steeles law degree and “certainly, he had a successful law career and did not need to sell out to make a living.”

I pointed out that Steele had not passed the Maryland Bar. His career limped along until he was near insolvency when the Maryland GOP asked him to run for Lt. Governor with (last week’s column topic) Bob Ehrlich. Steel agreed after negotiating $1250-a-week salary. If that does not fit the rhetorical definition of “sellout,” I argued, it certainly meets the literal. Kennedy said he was not aware of those aspects of Steel’s career.

I didn’t even get to metion the Oreo Cookie incident at my alma matter, Morgan State University, that was a blatant attempt at race-baiting.

So now, in a Palinesque move, Steele is the Chairman of the Republican National Committee. One must really ask: What exactly qualifies Steele to lead the GOP? Alex Koppelman of Salon.com summarizes Steele’s not-so-illustrious career. “He graduated from Johns Hopkins University and then got a law degree from Georgetown University, true. That said, though, he initially flunked out of Hopkins, and while he did pass the bar in Pennsylvania, he failed it in Maryland. His record as a businessman wasn't stellar, either. A consulting firm he founded never turned a profit, and was a serious drain on his finances. Shortly after he began his run for lieutenant governor, Steele ran into trouble because of a $25,000 loan his sister had given to his campaign for comptroller that he'd never paid back. Then, there were revelations of an additional $35,000 in personal debt, as well as more than $100,000 he'd taken out of two retirement accounts in order to support his family, leaving a balance of less than $600 at the time the news broke. He suffered further embarrassment over his finances when it was revealed that the Republican Party was paying him a consulting fee of $5,000 a month during his campaign for lieutenant governor.”

Add to that a lack-luster term as Lt. Governor, a failed Senate bid, and a recurring stint as a Fox News Contributor. Not surprisingly, Steele’s first interview after being elected RNC Chair was with Sean Hannity of Fox News—for whom Steele often fills in for on Hannity’s “news” program.
So now, at the head of the conservative party in the United States, we have a man who once, according to a John Dickerson article, “said the R for Republican next to his name was like a ‘scarlet letter.’ He went on to say the GOP-controlled Congress should ‘just shut up and get something done,’ that the Iraq war ‘didn't work’ and ‘we didn't prepare for the peace,’ that the response to Hurricane Katrina was ‘a monumental failure of government.’ He said having his party leader President Bush campaign for him would be a disadvantage.”

On second thought, maybe Steele is not the sellout—maybe the Republican Party is.