Alex Park

Alex Park

Writing Fellow

Alex Park is a recent graduate of the UC-Berkeley Graduate School of Journalism. His work has been published in PBS/MediaShift, New America Media, allAfrica.com, Time.com, and the Believer.

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A recent graduate of the UC-Berkeley Graduate School of Journalism, Alex Park is an investigative journalist with an interest in global agriculture. He has blogged in South Africa and reported on Cyprus, and in college he published an award-winning paper on a 2008 period of anti-immigrant violence in South Africa, since cited in academic works. Currently, his interests lie explaining complex social systems—be they governments, conflicts, trade patterns, or waves of immigration—for a general audience. His work has been published on PBS/MediaShift, New America Media, allAfrica.com, the Believer, and Time.com

How Hobby Lobby Undermined The Very Idea of a Corporation

| Thu Jul. 3, 2014 2:50 PM EDT
Justice Alito signs his oath card in the Justices Conference Room

Here's one more reason to worry about the Supreme Court's Hobby Lobby decision, which allowed the arts and crafts chain to block insurance coverage of contraception for female employees because of the owners' religious objections: It could screw up corporate law.

This gets complicated, but bear with us. Basically, what you need to know is that if you and some friends start a company that makes a lot of money, you'll be rich, but if it incurs a lot of debt and fails, you won't be left to pay its bills. The Supreme Court affirmed this arrangement in a 2001 case, Cedric Kushner Promotions vs. Don King:

linguistically speaking, the employee and the corporation are different “persons,” even where the employee is the corporation’s sole owner. After all, incorporation’s basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.

That separation is what legal and business scholars call the "corporate veil," and it's fundamental to the entire operation. Now, thanks to the Hobby Lobby case, it's in question. By letting Hobby Lobby's owners assert their personal religious rights over an entire corporation, the Supreme Court has poked a major hole in the veil. In other words, if a company is not truly separate from its owners, the owners could be made responsible for its debts and other burdens.

"If religious shareholders can do it, why can’t creditors and government regulators pierce the corporate veil in the other direction?" Burt Neuborne, a law professor at New York University, asked in an email.

That's a question raised by 44 other law professors, who filed a friends-of-the-court brief that implored the Court to reject Hobby Lobby's argument and hold the veil in place. Here's what they argued:

Allowing a corporation, through either shareholder vote or board resolution, to take on and assert the religious beliefs of its shareholders in order to avoid having to comply with a generally-applicable law with a secular purpose is fundamentally at odds with the entire concept of incorporation. Creating such an unprecedented and idiosyncratic tear in the corporate veil would also carry with it unintended consequences, many of which are not easily foreseen.

In his opinion for Hobby Lobby, Justice Samuel Alito's insisted the decision should be narrowly applied to the peculiarities of the case. But as my colleague Pat Caldwell writes, the logic of the argument is likely to invite a tide of new lawsuits, all with their own unintended consequences.

Small wonder, then, that despite congressional Republicans defending the Hobby Lobby decision as a victory for American business against the nanny state, the US Chamber of Commerce—the country's main big business lobby—was quiet on the issue. Even more telling: Despite a record tide of friends-of-the-court briefs, not one Fortune 500 weighed in on the case. In fact, as David H. Gans at Slate pointed out in March, about the only sizeable business-friendly groups that did file briefs with the court were the US Women's Chamber of Commerce and the Gay and Lesbian Chamber of Commerce. Both sided against Hobby Lobby.

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The IRS Is Coming For Your Offshore Bank Account

| Tue Jul. 1, 2014 6:00 AM EDT
Where corporate America's money went

It's always been a pretty simple arrangement for America's superrich: Park your money in a country whose banks know how to keep a secret and then underreport your assets to the IRS. Without a way to independently verify how much money you have abroad, the taxman had to take your word for how much money you had stashed in a Swiss vault or in a sunny haven like the Cayman Islands. But as of yesterday, the US government will require foreign banks to report their American clients' assets, or face 30 percent tax penalties on some offshore deposits.

The move is part of the Foreign Account Tax Compliance Act (FATCA), which was introduced in 2010. Since then, more than 80 countries have agreed to open their ledger books to the feds. After some complicated last-minute negotiations, even Russia and China have started to cooperate.

Companies and individuals have long used offshore banking to keep their taxes low: Last year, American multinationals kept an estimated $2 trillion (yes, with a "t") abroad, according to a Bloomberg analysis. In recent years, tech companies have become some of the most enthusiastic offshore depositors. Between 2010 and 2013, Microsoft more than doubled its foreign stockpile to $76.4 billion, while Apple increased its pot abroad more than fourfold to $54.4 billion.

But while big US companies have stowed a massive pile of cash abroad, US banks hold even more money for foreign clients. According to Tax Justice Network, a British-based advocacy and research group, out of the $21 to $32 trillion kept offshore globally, about 22 percent is kept in the United States—a fact that's not lost on countries complying with FATCA, some of whom are embracing the law because it means they'll get to learn a few things about their own citizens' holdings in the US.

Has This Chilean Architect Figured Out How To Fix Slums?

| Wed Jun. 11, 2014 6:00 AM EDT
The Quinta Monroy houses in Chile. Residents start with the gray, concrete structure and foundations, then fill in the adjacent spaces with their own materials over time.

In the United States, we tend to think of the suburbs as the historic domain of the middle class. It's where the boomers went after fleeing the cities to accommodate their growing families (although the demographics of the suburbs are now changing).

But in Latin America, urban peripheries are less commonly populated by leafy suburbs for the rich than by slums for the poor. These shantytowns typically lack basic infrastructure like paved roads, sewers, and tap water. Living far from the city, residents are often forced to make long and expensive commutes.

But in the medium-sized Chilean port city of Iquique, one architect, Alejandro Aravena, had a solution: partial houses, located at the center of town, equipped with only the barest necessities—and space for residents to build on, bit by bit, as they can afford it. 

When they were first built fourteen years ago for about 100 families, Aravena's flagship projects, called the Quinta Monroy Houses, came with all the core necessities—a roof, a bathroom, a kitchen. With a little more than 300 square feet in floor space to start with, the houses were 25 percent smaller than the average public housing unit in Chile, but with an extra-wide foundation, residents had plenty of room to expand.

In his new book, Radical Cities: Across Latin America in Search of a New Architecture, journalist Justin McGuirk writes that when Aravena first launched the project through his firm, Elemental, a number of critics were appalled. They argued that the government should provide complete houses, since incomplete houses require the occupant to perform manual labor. But where some saw a failure in the making, others welcomed change. In the 1970's, under Chile's socialist president Salvador Allende, the government prioritized building completed public housing, even enlisting a Soviet-made pre-fabricated house factory for the job. But despite the initial gusto, the government quickly ran out of the resources to continue. In three years, the slum population rose more than 130 percent.

After adding four bedrooms and an extra bathroom over six years, one resident believes his $400 investment is now worth $50,000.

Since the Allende period, the government has shifted to a hybrid market-government approach, giving subsidies to the poor to buy houses and land. At the time Aravena built Quinta Monroy, the government offered $7,500 per family—usually too little to buy a complete house, but just enough to make Aravena's stripped-down models affordable.

As residents expanded their houses, their value grew. One study (PDF), sponsored by the Finnish government, found that in its first two years, Quinta Monroy's 100 families had made an average of $750 in improvements per unit, doubling the size of their homes and raising the houses' value to an estimated $20,000 each. One six-year resident McGuirk speaks with says that after the subsidy, he spent just $400 of his own money to buy a basic Quinta Monroy house. But after saving up and adding four bedrooms and an extra bathroom, he estimates he has increased the value of his home to $50,000.

The Quinta Monroy houses
The Quinta Monroy houses before residents doubled their size with their own improvements Cristóbal Palma/Verso Books

It's hard to see a plan like this taking off in the United States, given our long permitting processes and strict building codes. And even in Iquique, some of the half-houses look similar to the shantytowns they were designed to replace: While some residents have transformed their homes into elegant structures with balconies and trim, "other add-ons look like slum shacks wedged between concrete houses," McGuirk says.

Still, other countries see promise in Aravena's idea. Already, Elemental has built and sold hundreds of half-houses in Chile, and it's testing the idea in Mexico, Guatemala, and Peru. "These are places where Aravena can still make a difference," McGuirk says.  

Californians Want to Fix the Drought—Without Spending Any Money

| Sat Jun. 7, 2014 6:00 AM EDT

Californians agree their state's drought is a big problem, but they're not enthused about spending money to alleviate it. That's one of the takeaways from a just-released University of Southern California/Los Angeles Times poll. Some other findings:

Big problem, getting bigger

Just prior to California's last gubernatorial election in November 2010, 46 percent of voters agreed that "having enough water to meet our future needs" mattered "a great deal." The proportion of people who care a lot about water issues has crept up a lot since then:

  • Last September, 63 percent of voters called the drought a "crisis or major problem."
  • 89 percent of voters call the drought a "crisis or major problem" now.
     

Save us some water, just don't send us the bill

Californians are notoriously tax averse, but even what may be the worst drought in 500 years is apparently not enough to get most voters to agree that the state should improve its water infrastructure: 

  • 36 percent of voters said the state should improve water storage and delivery systems, even if it costs money.
  • 52 percent said the state should address these problems without spending money, by taking measures like encouraging conservation.
     

Poorer people and Latinos are feeling harder hit

The poll found:

  • 11 percentof people making more than $50,000 annually said the drought had a "major impact" on their lives.
  • 24 percent of people making less than $50,000 annually said the same. 
  • 29 percent of people making less than $20,000 annually said the same.

It's worth noting that some of California's poorest people are Hispanic farm workers. While 25 percent of Latinos surveyed said the drought had a "major impact" on their lives, just 13 percent of people from other racial groups said the same. 


Climate denial

A recent study has linked the drought to climate change, but some Californians still aren't so sure about the connection. While 78 percent of Democrats said climate change was "very or somewhat responsible" for California's water trouble, only 44 percent of Republicans agreed. 

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