Published CommPro.biz 2014.05.20

Hacking the Royals 

 

Shakespeare has left us with a picture of the Danes -especially members of the Royal family like Hamlet- as rather pouty young guys. In fact they are really nice people and Denmark is a very nice (if a bit chilly) small nation, most famous for design and Legos. Scandal is not a word you expect to connect to the Danes at all. However, last Tuesday (2014.05.14) they were hit with what they consider a “Major media scandal.”

It seems that back in 2008 the younger son of the queen was taking a second try at marriage. Joachim Holger Waldemar Christian, the Count of Monpezat, was married to Marie Cavallier a Parisian advertising executive. While their wedding was quite public their honeymoon plans were not. You can imagine their surprise when a reporter from a Danish celebrity magazine turned up on their flight home. The reporter got his interview (he says they answered his questions politely) and until last week the Prince and his bride had no idea how he found them. Therein lies the scandal, the magazine paid off a source who hacked the credit card used to book the flight. This revelation has triggered a firestorm of legal and regulatory activity in Demark.

Alas Denmark’s “Tuesday” in the media scandal spotlight was not to last, the very next day Clive Goodman, one of Rupert Murdoch’s editors told a court in London that he hacked the phones of Prince William, Kate Middleton and Price Harry over 200 times. That was in 2007 the year before Goodman was caught and jailed for this and similar “research” efforts. Perhaps the Danes picked up the Royal Hack idea from the Murdoch pond scum school of journalism.

While this is all great fun, we need to look at the serious side. There is more to our right to know than gossip and much more to journalism than the Murdoch minions’ petty view imagines. A British Parliamentary Committee found that “Rupert Murdoch is not a fit person to exercise the stewardship of a major international company”. Clive Goodman and others steeped in Murdoch’s duplicitous culture have felt the weight of the law. The question remains, why have they not felt it in America?

Rupert Murdoch is a United States citizen; he had to become an American before he could own radio and television stations in our country. It’s one thing for him to be deemed “not a fit person” in Great Britain, in America it’s the law. Bribing foreign officials is illegal. Murdoch’s operations in Great Britain routinely bribed law enforcement officers and other officials. Murdoch should be stripped of his American broadcast stations. He should be charged and tried for his illegal activities along with his henchmen who flaunt America’s laws. The Danes are taking care of their business, it’s time for America to take of ours.

Published CommPro.biz 2014.05.13

 

A New Gilded Age?

By: W.T. “Bill” McKibben

In 1873 Mark Twain and Charles Dudley Warner published The Gilded Age: A Tale of Today. The name stuck, roughly covering the period from the end of the Civil War to the Trust Busting Teddy Roosevelt era. At its height around 1900 the top 10% percent of Americans soaked up about half the income with the top 1% getting about 40% of that amount. That left the 90% to divvy up the other half, slim pickings at best.

After Teddy Roosevelt leveled the playing field and the labor movement spread the bucks around even more, income inequality was not as big an issue. The two World Wars that devastated the infrastructure of nearly all developed economies, except the United States gave America a running start during most of the last 100 years. However, toward the end of the 20^th Century and into the early part of the 21^st the rich and powerful began to tilt the table in their direction again. The laws put in place following the Great Depression that protected little folks fell to a “Deregulation Era.” Enter a new Gilded Age.

Tax loopholes and corporate subsidies added in to tilt the American landscape toward the super rich. So we find ourselves just where we were in the last Gilded Age, half the bucks going to the top 10% and 40% of that going to the top 1%. The middle class has been devastated and the poor are scrambling to keep their heads above water. Basically a set of social problems covered by a “thin gold gilding” the same outlook seen by Twain and Warner in 1873.

That leaves some questions. Is it morally and ethically acceptable? Is it financially sustainable? Teddy Roosevelt didn’t think it fit inside any of those parameters. He saw it as just wrong. It isn’t as if this new Gilded Age came about through the efforts of those who are benefiting. When the laws of the land are twisted to give any group an advantage it’s just plain wrong. What’s really bad about the current situation is that the recession so many are struggling to crawl out from under was triggered by reckless bankers who we had to bailout to avoid a major depression. They are now doing better than ever and the stock market is booming.

A recent Pew Research Center study shows that almost all Americans understand how the makeup of this Gilded Age came to be. Given an open-end question the answers came in all over, however, two out of five pinpointed loopholes and our tax system, followed by all the usual suspects, government policies, corporate influence, greed, etc., etc., etc. Although remarkably 10% believe that a poor work ethic and reliance on government handouts created inequality; really! A gilded age is unsustainable; it’s bad for the poor and for the rich.

Published CommPro.biz 2014.05.06

Walking the Edge of the Razor Blade

It would be hard to find anything gone farther astray from its intended purpose in our society than our capital markets. The New York Stock Exchange and all other such entities in the world of finance as played in the United States have forgotten their purpose, to create a source of capital for Capitalism. Instead they have succumbed to enriching the players. Those who manage the markets have allowed the investment banks and the traders to run the show. The exchanges’ purpose is to support the companies listed, not the bankers and traders.

The investment banks have strayed far from their purpose to aid in the creation of capital and to “make a market” for those “going public.” They have wandered off into the world of legalized gambling, having convinced the Congress that laws against gambling should not apply to them. It was a easy step from there into the toxic derivative instruments that plunged the world into the recession where we little folk still struggle. Traders serve little or no purpose except to generate fees for the markets and their middlemen. This is especially true of the latest breed, those rigging the markets with penny skimming high-speed trading.

These ills are just the latest in the distortions that have increasingly plagued the markets. The whole crazy focus on “Playing the Market” instead of investing has corporate management aiming for short-term goals instead of long-term growth. All it takes to unseat an otherwise great CEO is an unexpected-could-happen-to-any-company event. Take Target’s CEO Gregg Steinhafel, who joined the giant retailer right out of college and worked himself up the ladder. Since moving into the top job he has been walking the razor sharp edge between upscale department stores and grungy discounters.

Steinhafel has moved Target deftly along, playing the quarterly results game and introducing new merchandise lines without losing the chain’s flair for quality and value. His foray into Canada has not gone as well as hoped, but it’s not altogether bad and it’s far from a bad idea. Then came the massive waiting-to-happen-to-someone breech of Target’s credit card systems. While the chain lost volume, it’s a testament to Steinhafel’s solid management style that Target did not lose more. And truth be known, the fault lies more with our banking sector’s refusal to move to a more secure RFID based credit card system a generation ago with the rest of the world.

We understand that in the current climate Gregg Steinhafel had to pay the price for what happened under his watch. But there is a lesson to be learned here, and every publicly held corporate CEO has to be thanking their lucky stars that they aren’t in his shoes. They should take the ethical and moral high ground and use their clout with the Congress to focus on long-term financial health. The Wall Street anything goes Wild West financial world is bad news for everyone, for the people, for investors, for corporate America.