Remembering Mortgage Derivatives in Response to Tucson

The right-wing extremists have been extending beyond the attacks on Obama during the 2008 elections.  The Tucson shooting this passed  Saturday, Jan. 15, shows how the violent attitudes of the right-wing have not taken long to bubble over http://www.democracynow.org/2011/1/14/tucson_shooting_survivor_it_looks_like .  Frankly, the violence of corporate economic activity and influence makes this no surprise to many of us.  See Global Witness´ website as they extend the fine traditions of Amnesty International, Oxfam, Greenpeace, and others to new levels.  However, besides recommending revisiting the great documentaries in the Michael Moore tradition including Bowling for Columbine, I simply want to mention here a series of strong articles about the 2008 mortgage derivatives market crisis which have gotten to little attention and promotion.  The turmoil resulted from the stock market sales of mortgage assets, and resulted shockingly in the September, 2008 bankruptcy of financial giant Lehman Brothers and the sale of Merrill Lynch.  Far from an unforeseeable result of Adam Smith’s so-called “invisible hand,” the collapse shows the results of unsound deregulation of government financial industry legislation established during the 1930´s New Deal hearings and the Glass-Steagall Act.  The influence of financial industry executives on academic theory and political policy creates a triangle of causal agents.  Among a series of political events, three provide an essential and illustrative outline of this triangle of influence.  First, the 1997 harassment of the Commodities Futures Trading Commission by government ideologues.  Second, the 1999 Gramm-Leach-Bliley legislation which then finally repealed the New Deal protections of the Glass-Steagall Act, and third the 2000 Commodity Futures Modernization Act which opened possibilities for abuses of derivatives and mortgages. 

Such policymaking is directly related first to financial influences, and secondarily to supportive justifications by means of economic philosophy.  Politicians received millions from the financial industry throughout the 1990’s.  Yet, one conservative economist explains the crisis without reference to the divergent policies evident and the impacts of the legislation.  Instead, the government´s Federal Reserve Interest rates are identified as the primary cause, and the convenient rationale of mystification stemming from “the inherent difficulty in assessing risk due to the complexity.”  This type of convenient logic does not examine the range of facts and causes and effects. In addition to the influences of ideology and regulatory legislation, the impacts of the private sector on political policy are not unknowable and   can be traced.  Other views relying on markets justify their “brutally Darwinian” ways.  They blame grassroots, “left-wing” advocates like ACORN and legislation like the Community Reinvestment Act which forced the hapless bankers to assist poor and minorities.  IMF staff views reflect a more courageous recognition of  interactions between economic and political regulatory processes, but not the specific efforts of the industry and its academics which created the architecture of financial instability.  A high-level European report leaves out any specific references, but identifies the failure of U.S. derivatives regulation.  The U.N. Conference on Trade and Development (UNCTAD) report makes a strongly worded reference to the relevant ideology and its associated practices.  The non-profit Center for Responsive Politics has recently been providing analysis of this dimension during the follow-up investigations. An early panel questioning former Treasury Secretary Henry Paulson was examined and found to contain two representatives considered to have received significant funding from the financial industry.  Moreover, the subsequent inquiry commission was found to contain large campaign contributors and those who have ties to Wall St.  Theorists and apologists of various schools often fail to address the cause and effect reality of these kinds of political and economic connections.

Nevertheless, the interactions are captured in the phrase to describe discrepancies between market behavior and theory, “market inefficiencies” one type of which involves inequality among participants in markets, their “asymmetries”.  In the case of the recent mortgage-based derivatives crisis, the derivative instruments were politically deregulated and created by large financial firms, reflecting their asymmetric political influence and volume of business.  Along with the dimension of “disclosure,” since many purchasers like pension funds were not aware of their purchasing derivatives, asymmetry then lead to the most resounding of market inefficiencies, the collapse of the derivates market.  On the other hand, smaller credit unions and community banks, and European cooperative banks were often spared any impacts of the speculative and specious assets.  The 2008 mortgage derivatives market crisis represents a sophisticated and hidden form of violence in its subtle elimination of social responsibility by disguising and converting obligations into false hopes of excess profit.  The widespread impacts of 2008 events can be viewed in combination with insightful works like Louis Uchitelle´s book The Disposable American and Marjorie Kelly´s The Divine Rights of Capital, which provide additional information on the psychological and socioeconomic links between the behavior and beliefs of corporate executives, the Tucson shooting, moreover, along with right-wing extremists and much of society´s violence in general and their origins in socioeconomic inequalities and abuse of power.       
A. R. Sorkin, “Lehman Files for Bankruptcy, Merrill is Sold,”  The New York Times, Sept. 14, 2008; 
W. Greider, “Establishment Disorder,” The Nation, Oct. 29, 2008;  P. S. Goodman, “The Reckoning: Taking a Hard New Look at a Greenspan Legacy,” The New York Times, Oct. 8, 2008; 
F. Partnoy, “Danger in Wall St.´s Shadows,” The New York Times, May 15, 2009;
 D. Leonhardt, “Reconsideration: Washington’s Invisible Hand,” The New York Times, Sept. 26, 2008; 
J. B. Taylor, “How Government Created the Financial Crisis,” The Wall St. Journal, Feb. 9, 2009; 
Editors, “Villain Phil,” NRO: The National Review Online, Sept. 22, 2008, www.nationalreview.com;  
Leach, J. A., “Regulatory Reform: Did Gramm-Leach-Bliley Contribute to Crisis?” Northwestern Financial Review, Oct. 15-31, 2008; 
L. Kodres, “A Crisis of Confidence…and a Lot More,” Finance and Development, 45:2, June, 2008; 
J. de Larosiere et al., Report of the High-Level Group on Financial Supervision in the EU, European Commission, 25 Feb. 2009; 
E. Lipton and S. Sabaton, “The Reckoning: Deregulator Looks Back, Unswayed,” The New York Times, Nov. 16, 2008;      
UNCTAD, The Global Economic Crisis: Systemic Failures and Multilateral Remedies, UNCTAD Secretariat Task Force on Systemic Issues and Economic Cooperation, 2009; 
J. D. McKinnon, “Panel Probing Financial Crisis Has Wall St. Ties,” The Wall St. Journal, July 18, 2009; 
A. Kiersch, “Henry Paulson´s Questioners Are Not Bankers´ Favorites,” The Center for Responsive Politics - OpenSecrets.org July 16, 2009; 
R. Nader, “How Credit Unions Survived the Crash,” Counterpunch.org, Feb. 23, 2009; 
A. Serwer, “Banks as Heroes,” American Prospect, June 30, 2009; 
P. Capella, “Cooperative Banks Club Together and Thrive in Crisis,” Swisster.ch, Oct. 17, 2008;

The blog "Biopolitical" has concerned itself with ecological economics and caught my attention during the last year.  The blog author´s position is in fact hostile to whole cost economics, and firmly grounded in the assumptions of orthodox neoclassical assumptions.  It appears that he considers the concerns of environmental degradation through economic activity to be unreal.  The reading can be somewhat entertaining since he usually makes expresses his disdain in a fairly offhand manner.  As such, it makes for an interesting exercise in the elements of classic debate.  
       A recent post titled, "How to make people happy via Ecological Economics"
begins as follows, "Monica Guillen-Royo arranged group discussions with a heterogeneous sample of people from a city in Spain and has just published a paper saying that these workshops illustrate how "a given society can unravel its own pathway towards sustainability and wellbeing" (Realising the ‘wellbeing dividend’: An exploratory study using the Human Scale Development approach, in the journal Ecological Economics)."
       His discussion includes this observation, "...So, according to Guillen-Royo, people think that a more modest lifestyle would improve their well-being, keep telling each other - particularly the rich - not to pursue such lifestyle, and keep doing what other people tell them to do instead of what they think they should do...."

  Any subject can be trivialized without supporting material.  Since the subject in question is based on the environmental crisis, it can be helpful to refer to current studies on environmental problems, such as the report produced by scientists through UNEP in 2009, http://www.unep.org/yearbook/2009/ .

   Moreover, since lifestyle concerns and especially "who tells people-particularly the rich-how to behave," is also of interest, an informed observer can easily research the subject of "advertising influence on lifestyle choice" and find a relevant source such as Juliet Schor, an economist who has reoriented her scholarship in terms of sociology, Juliet Schor, http://will.illinois.edu/mediamatters/show/december-21-2008/ .

     An additional dimension can be explored in referring to former consumers of fossil fuel energy who have invested in becoming renewable energy producers, by looking at examples such as these from Germany and the US: Blake, M., “In Germany, Ruddy-Cheeked Farmers Achieve (Green) Energy Independence,” The Christian Science Monitor, Boston, MA, USA, Aug. 21, 2008, http://www.csmonitor.com/layout/set/print/content/view/print/199021

Festa, E.D., “To Go Solar, Start Local,” Washington Post, Sept. 19, 2009

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/18/AR2009091800078.html

     Some talk isn´t so cheap, but makes for a good drink, worship service, and sustainability workshop that has no problem going green.  Thanks.

      Upon re-reading, I would add that "(people, especially the rich, doing what they themselves think they should do)" doesn´t really address the basic information inherent in the concerns of the journal in question, Ecological Economics, produced by the International Society for Ecological Economics. 

Ecological Economics: Enough is Enough CASSE Report

10. Enough Excess Profits: Rethinking Business

and Production

....

Alternative Forms of Business Organisation

Not all forms of business organisation have the growth impulse found in profitmaximising

shareholder corporations. There are at least three other types of

business organisation that do not need to pursue growth: co-operatives, foundations,

and low-profit limited liability companies:

 Co-operatives: Co-operative organisations are a very old and successful form

of firm. As legal entities, co-operatives pre-date the modern corporation by some

hundred years; they were first formalised as legal entities in 18th century Europe

and North America. The Rochdale Pioneers and Philadelphia Contributorship are

well-known early examples. Co-operatives are built around a common goal that

is beneficial for their members, and are based on equal control of organisational

decisions by all members. In a sense, they resemble a household turned into an

organisation.

In recent years, co-operatives have seen a renaissance in economic life. In the

UK, John Lewis (a co-operatively owned department store) recovered from the

recession more quickly than many of its rivals,143 and membership of The Cooperative

(the UK’s biggest farmer) is increasing.144 In Germany, there was a

major and favourable overhaul of co-operative law in 2007, which now allows for

limited liability co-operatives. The Mondragon co-operatives in Spain were

established in the mid 1950s. As of 2006 there is even a European Co-operative:

the Societas Cooperativa Europaea (SCE).

 Foundations: Foundations are another rather old legal form of organisation. By

definition, a foundation is a non-profit organisation, often with charitable

purposes. Some corporations, such as Robert Bosch in Germany, are owned by

foundations (in this case the Robert Bosch Foundation). Others, such as Mozilla

Corporation, have transferred their patents and copyrights to a foundation (i.e.

the Mozilla Foundation). The engineering and design firm Arup is wholly owned

in trust for the benefit of its employees and their dependents.

 Low-profit limited liability companies: A low-profit limited liability company

(L3C) is a rather new form of business that is a hybrid between a non-profit and

for-profit organisation. An L3C runs like a regular business and can be profitable,

but its primary focus is not to make money. Instead, an L3C focuses on

achieving socially beneficial aims with profit-making as a secondary goal. In the

UK, these businesses take the form of Community Interest Companies (CICs). In

Germany there is a similar legal form called “gemeinnützige GmbH” (public

interest Ltd.), and even a “gemeinnützige Kapitalgesellschaft” (public interest

corporation). These legal forms often benefit from lower corporate taxes, or even

no tax at all (in the German case).

To support the transition to a steady state economy, policy makers should

encourage these alternative forms of business by (1) making it simpler to set up (or

change to) these forms, and (2) by taxing excess profits in shareholder corporations....

see the full document at: http://steadystate.org/enough-is-enough/

from O’Neill, D.W., Dietz, R., Jones, N. (Editors), 2010. Enough is Enough: Ideas for a
sustainable economy in a world of finite resources. The report of the Steady State Economy
Conference. Center for the Advancement of the Steady State Economy and Economic
Justice for All, Leeds, UK.

From CASSE: The Financial Crisis is the Environmental Crisis

The Center for the Steady State Economy is a nice think tank for ecological economics, and has a great team of contributors, including Herman Daly himself, Brian Czech, Brent Blackwater, and a young scholar named Rob Dietz.  Here´s a selection from a recent piece at their blog: 

January 5, 2011

The Financial Crisis Is the Environmental Crisis

by Eric Zencey

In May of 2009, U.S. federal legislation created the Financial Crisis Inquiry Commission, charged with investigating the causes of the financial crisis that led to the largest economic downturn since the Great Depression. The Commission’s report is due in January. But don’t get your hopes up; they’re more than likely to get it wrong.
The Commission has held hearings with and gathered testimony from quite a few experts, all of them entrenched within the mainstream of neoclassical economic theory. The experts have named the usual suspects: cyclical swings between greed and fear; feedback effects that “disequilibrate” markets; cheap and “poorly documented” mortgage financing; bank accounting that kept some liabilities “off balance sheet;” the international sale of debt that guaranteed that a collapse in one market in one country would ripple out to affect the world; foreign demand for American debt, which created demand-pull for riskier and riskier American investments; and unworkable hedge funds that appeared to transform sure-to-fail loans into sure-to-pay investments.
It’s likely that all of these played a role. Fixes for most of them ought to be undertaken on their own merits. (Who could be in favor of “poorly documented mortgages” or “off-balance-sheet” investments?) But none of the testimony makes this point: the financial crisis is also the environmental crisis. We won’t solve the former until we start solving the latter.
Two facts about this crisis stand out: the world came to the brink of global economic collapse, and the world is and remains on the brink of ecosystem collapse. The economy is humanity’s primary instrument for interacting with its environment; this suggests that these two facts are somehow related. And yet none of the standard diagnoses come anywhere close to acknowledging that there might be a connection, let alone start to illuminate it. In the standard view, the financial crisis beset an economy that consists solely of humans acting within formalized systems of their own creation —systems that have no connection to a larger world.
And that’s why the standard view won’t succeed in fixing the problem. The spasm of debt repudiation with which the crisis began — the collapse of the sub-prime lending market — is what happens when an infinite-growth economy runs into the limits of a finite world.
That insight comes from the reference frame suggested by Frederick Soddy, as elaborated by Nicholas Georgescu-Roegen, Herman Daly, and others. Soddy offered a vision of economics as rooted in physics — the laws of thermodynamics, in particular. An economy is often likened to a machine, though few economists follow the parallel to its logical conclusion: like any machine the economy must draw energy from outside itself. The first and second laws of thermodynamics forbid perpetual motion, schemes in which machines create energy out of nothing or recycle it forever. Soddy criticized the prevailing belief in the economy as a perpetual motion machine, capable of generating infinite wealth....

read the rest at http://steadystate.org/learn/blog/

      The author´s discussion later suggests a 100% reserve requirement as a preferred sustainable policy for banks.

      I think it´s an idea that makes sense to start with, though providing loans immediately depletes reserves as a natural function of the connection between deposit reserves and loans.  Apparently reserve levels have traditionally been around 10% or so, even for credit unions, allowing 90% of reserves to be loaned.   Based on my agreement with advocates for employee and local ownership like co-operative development services, my assessment is that the longstanding US regulatory policies like the Glass-Steagal Act since the 1930s New Deal with limits on interest rates and lending constraints for financial institutions are soundest.

see, for example: M. Waldman, Who Robbed America? A Citizen’s Guide to the Savings & Loan Scandal, New York, NY: Random House, 1990   

A. R. Sorkin, “Lehman Files for Bankruptcy, Merrill is Sold,”  The New York Times, Sept. 14, 2008;

W. Greider, “Establishment Disorder,” The Nation, Oct. 29, 2008; 

P. S. Goodman, “The Reckoning: Taking a Hard New Look at a Greenspan Legacy,” The New York Times, Oct. 8, 2008; 

F. Partnoy, “Danger in Wall St.´s Shadows,” The New York Times, May 15, 2009; 

D. Leonhardt, “Reconsideration: Washington’s Invisible Hand,” The New York Times, Sept. 26, 2008 

are

Globalization and The Aarhus Convention

        The 2010 Cancun Conference on the Kyoto Protocol, the practical part of the 1992 Climate Change / Global Warming treaty has become perhaps among the most well-known of international treaties.  Perhaps the Endangered Species Act and the Clean Air Act of the US, along with CITES, the Nuclear Non-proliferation treaty, and the WTO are among some others, not to forget the Universal Declaration of Human Rights and the ILO conventions on labor rights.  Among the many worthy treaties, environmental, labor, and otherwise, the Aarhus Convention came to my attention for its democratic and social participatory qualities in substance.     
        The Aarhus Convention on Access to Information, Public Participation, and Access to Justice in Environmental Matters emerged in 1997 and 2001 as an international UN related treaty which correlated democratic principles and environmental responsibility.  In terms of solidarity economics and government policy, the recognition of each and every member of the public in economic democracy forms extends the co-operative, value-based model of business first historically established by working people in Rochdale, England near Manchester.  While the U.S. has fostered some important advances in democratic practices, among its most important has been the UN´s Universal Declaration on Human Rights, which established a new modern standard declared in favor of the participatory principle.  The Aarhus Convention builds significantly on this idea by applying it to environmental concerns.
               
      An examination of the Aarhus Convention reveals that the treaty originated in the U.N. Economic Commission for Europe’s (UNECE) “Environment for Europe” (E for E) processes begun in 1991, following the Brundtland Commission’s report on Sustainable Development and in anticipation of the 1992 U.N. Rio Conference on Environment and Development.  Stockholm’s Principle 1 against discrimination and Rio Declaration Principle 10 on pluralistic public participation became a definitive foundation for the E for E concerns and programs.  In between these two events and declarations, environmental accidents in Europe first spurred the development of the environmental public participation principle, while the subsequent fall of Eastern Europe and Central Asia’s Communist systems created a broader response to the acute and wide-scale crisis in environmental pollution and transitional political economies for the UNECE and the E for E process.  A series of steps took place as conferences and interim meetings developed concerns, concepts, and consensus, like a Regional Environmental Center and the Sofia Guidelines, until the 1998 UNECE conference in Aarhus, Denmark.¹
            The significance of public participation in environmental matters is clarified by a number of historical developments in international environmental law, including European environmental law like the 1990 Directive on Access to Information in Environmental Matters² and U.S. legal developments like the 1992 founding of the EPA Office of Environmental Justice.³  These in turn reveal the influence of human rights law, as in the U.N.’s Declaration of Human Rights, and subsequent 1960’s conventions on Political and Civil Rights and Economic, Social, and Cultural Rights.  Also, important insights can be gained by considering the relations between the U.N.- and non-governmental organizations (NGO’s) such as are clarified by appreciating Article 71⁴ of the U.N. Charter and Article II of the Constitution of UNESCO’s International Union for the Protection of Nature,⁵ and historical momentum derived from the historical development of environmental associations known as NGO’s.  In addition, NGO efforts contributed significantly to the organizing of events like the 1884 Vienna International Ornithological Congress.  Also importance is the more general historical development of associations and international congresses conveying democratic  and human rights concerns often with religious origins, like the 18^th Century anti-slavery societies and the 1815 Congress of Vienna.⁶  

 1  UNECE (U.N. Economic Commission for Europe), “History of the Process: From Dobris to Belgrade,”  “Environment for Europe” Process, www.unece.org; 

2 “Council Directive 90/313/EEC of 7 June 1990 on the Freedom of Access to Information on the Environment.” Official Journal L 158, 23/6/1990, Europa: the European Union.

3 EPA, “Environmental Justice Background,” http://www.epa.gov/compliance/basics/ejbackground.html; 

4 Russell, Ruth B. and Jeannette E. Muther,  A History of the United Nations Charter: the Role of the United States 1940-1945,  Washington, DC: The Brookings Institution, 1958.; 

5 “International Union for the Protection of Nature Constitution,”  Conference for the Establishment of the International Union for the Protection of Nature, NS/UIPN/12, Fontainebleau, FRA, 30 Sept.- 7 Oct. 1948, ttp://unesdoc.unesco.org/images/0015/001547/154724eb.pdf;

6 Charnovitz, Steve,  “Two Centuries of Participation: NGO’s and International Governance,”  Michigan Journal of International Law, 18, 1996-97, 183-286.

Empathy and Social Justice

       Gary Olson, a professor in Pennsylvania, has written what I think is a powerful piece on empathy and social justice.  See the selection below.  While I recently completed my masters in the political economics of community sustainable development, events, people, and ideas keep reminding me that we are not talking about mechanistic philosophies like Adam Smith and others have done following DesCartes and forgetting their roots in St. Thomas of Aquinas and the role of spiritual ethics.  We are talking about how each and every one of us can get involved in worker co-op enterprises and communities which reflect our real selves and, I suggest, our real historical and cultural roots in the spiritual teachings of regarding the origins of the created and evolving universe and our neighbors with care and reverence as we do ourselves. 
      Michael Johnson has written on his early efforts to promote a "C-paradigm" based on compassion, for example, and I have reflected on related processes and principles here.

NEUROSCIENCE AND MORAL POLITICS: Chomsky’s Intellectual Progeny

Are humans "wired for empathy"? How does this affect what Chomsky calls the "manufacturing of consent"?

An essay by Gary Olson
Posted: October 16, 2007
Throughout the world, teachers, sociologists, policymakers and parents are discovering that empathy may be the single most important quality that must be nurtured to give peace a fighting chance.
—Arundhati Ray
The official directives needn’t be explicit to be well understood: Do not let too much empathy move in unauthorized directions.
—Norman Solomon
The nonprofit Edge Foundation recently asked some of the world’s most eminent scientists, “What are you optimistic about? Why?” In response, the prominent neuroscientist Marco Iacoboni cites the proliferating experimental work into the neural mechanisms that reveal how humans are “wired for empathy.”
Iacoboni’s optimism is grounded in his belief that, with the popularization of scientific insights, these recent findings in neuroscience will seep into public awareness and “. . . this explicit level of understanding our empathic nature will at some point dissolve the massive belief systems that dominate our societies and that threaten to destroy us.” (Iacoboni, 2007, p. 14)
While there are reasons to remain skeptical (see below) about the progressive political implications flowing from this work, a body of impressive empirical evidence reveals that the roots of prosocial behavior, including moral sentiments such as empathy, precede the evolution of culture. This work sustains Noam Chomsky’s visionary writing about a human moral instinct, and his assertion that, while the principles of our moral nature have been poorly understood, “we can hardly doubt their existence or their central role in our intellectual and moral lives.” (Chomsky, 1971, n.p., 1988; 2005, p. 263)
In his influential book Mutual Aid (1972, p. 57; 1902), the Russian revolutionary anarchist, geographer, and naturalist Petr Kropotkin, maintained that “. . . under any circumstances sociability is the greatest advantage in the struggle for life. Those species which willingly abandon it are doomed to decay.” Species cooperation provided an evolutionary advantage, a “natural” strategy for survival.
 
see the rest of the article by Gary Olson

      Gary Olson does not seem to have yet been informed about the solidarity economics movement and the co-operative business model.  I will be glad to try to communicate the possibility to him.

Rwanda: How Capitalism Caused the Genocide

In the last year or two I wrote an article for a University journal on the generous contributions by the modern international financial system and markets to causing the Rwandan genocide.  From the machinations of colonial powers and corporations to anti-communist militarism to the Bretton Woods institutions, none of these basic causes are discussed amongst the popularized images of Hutu-Tutsi conflict made for the disaster capitalism of the film Hotel Rwanda.
      Here is a selection from the introduction:

Because of the externalization of costs and asymmetries of power and resources between market participants, the cause of these disparities can be examined in the way commodities are priced. In fact, commodity pricing in markets has deviated from the theoretical assumptions of market behavior as discussed by Adam Smith. For example, free and efficient markets require symmetrical buyer and seller participants who do not influence the price of goods. Another free market principle says that sellers must be responsible for the entire cost of their product, and this must be reflected in the price.¹⁰ When pricing is efficient, bargaining allows producers to meet their costs. In actual practice, however, and in the case of commodities like coffee in particular, powerful participants manipulate the market to pay a price which ultimately disregards small producers’ costs, such as corporations in the London commodity markets. In addition, limitations of infrastructure and resources in the supply chain create these power dynamics even for relatively smaller participants, such as brokers who buy from small farmers in Asia, Africa, or Latin America. An end result is that many of these small producers have been receiving prices insufficient to meet their expenses. In fact, most global problems are linked to these market asymmetries and inefficiencies. While this paper will examine the circumstances of the 1994 Rwandan Genocide, many familiar problems occur for similar reasons, include corporate crime,¹¹ environmental degradation, the 1994 Chiapas, Mexico uprising of the same year,¹² the Darfur conflict and genocide,¹³ drugs,¹⁴ domestic and international immigration pressures,¹⁵ and urban slums.¹⁶ This paper proposes that the policies of fair trade have made important progress in addressing the source of these problems, and can make significant further strides towards solving them.