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An effective message on an important subject in our open society.  http://itsonus.org/#videos

Banking Ethics

One is tempted to say that Banking Ethics is an oxymoron. Given their role in crashing the world economy on the tax payers dime in 2008 and leaving millions to suffer ever since that would seem an accurate observation. Add a host of other sins and it would seem to be an understatement. 

We have bankers laundering dirty money of every kind, telling the drug cartels, “If it’s cash we’ve got your stash.” We have bankers scheming to fix international interest rates and help rogue nations avoid sanctions. We have bankers recruiting tax cheats. Our Justice Department maintains that sending these criminals to jail might jeopardize the world economy as if they haven't already done that as part of their pursuit of profits and bonus bucks. Instead, we give them fines they see as no more serious than a parking ticket. Yet, just let any of these banks have a couple of bad quarters and watch their top guy get the boot. Executive turnover is an everyday thing; to imagine that bankers are too important to jail is madness. 

Yes, many of our bankers -especially those atop the monster banks- are master criminals, however, the vast majority are ethical individuals trying to do their job in a business sector that seems rigged against them. It is long past time that we root out the bad guys, that we remove the incentives to deceive and to gamble with the taxpayer's funds standing by to cover their losses. 

We must reverse the deregulation disaster of the last several decades. We must create an atmosphere that allows the vast majority of bankers to do the job they long to assume. We must never allow banks to become "Too Big to Fail." We must rid our authorities of the notion that anyone, especially bankers are "Too Big to Jail." 

Armistice Day

At the eleventh hour of the eleventh day of the eleventh month in 1918, my father sat in a trench in France as the guns fell silent in Europe. He had returned to duty after a brief treatment for a huge mustard gas burn on his back. He was the only one of his comrades left alive after that attack. 

The others couldn't withstand the searing pain when the gas penetrated their rain soaked uniforms. They died when they stood and began to tear off their clothing. Father said that it felt like a blowtorch on his back. The giant scar itched every moment of every day for the rest of his life. 

Walt or Mack as he was called was extremely  reluctant to discuss combat as all who experience it are. He sat for a photo in his uniform when he returned. 

​ His uniform jacket hangs in my closet. It fits me perfectly. Wearing it on occasions like this helps connect me with this good man. I was born -his only child- late in his life; I was just 26 when he died. I wish he had lived longer.

This date (he called it Armistice Day) was understandably important to him, as it is to me.

It's good to remember him and all those who found themselves in wars they didn't start, but helped to finish anyway.

Thomas Eric Duncan died because he went to the aid of a pregnant teen who collapsed in the street near his home. He took her to three medical facilities that turned her away and was left with no choice but to return and carry her in his arms to her home. A less compassionate person would have stood back; others in the village did just that.

He had his ticket for a long planned trip to America to marry the love of his life. We'll never know if he might have done less - or been more cautious- had he known that the teenaged girl had Ebola, none of his neighbors knew, the taxi driver didn't suspect; Duncan acted as the good man he was.

He had no symptoms when he boarded the plane. Days after he arrived and displayed symptoms he went to a hospital where he disclosed that he was from an Ebola hotbed. The nurse who saw him ignored the importance of that disclosure. For a time the hospital claimed the doctor who saw him didn't know of that disclosure - a nonsensical lie - but in spite of that huge red flag they sent Duncan home with a Z-pack.

We will never know if Thomas Eric Duncan might have lived had the hospital personnel paid attention to their job and began treatment days earlier. We know that the world has lost a good and compassionate human being, Thomas Eric Duncan. Who knows what he might have achieved and contributed to our nation if he had lived, we just know that America failed him.

Published CommPro.biz 2014.06.03

Credit Suisse - 

You Can’t Put A Bank In Jail

Credit Suisse, a Swiss monster bank apparently has copped a plea with the United States Justice Department. This story has been seeping out since United States Attorney General Eric Holder declared several weeks ago that no bank is “too big to jail.” While that sounds tough, the fact is that banks do not go to jail, people go to jail. And in this case nobody is going to jail. Justice is trumpeting the $2.6 billion dollar fine they got Credit Suisse to cough up. That sounds like a lot but it’s next to nothing given their massive criminal activity.

Credit Suisse sent hustlers out to recruit ultra-rich Americans. They arranged trips to Switzerland to open a secret Swiss bank account. Now, we’re not talking about a handful of rich folks; there are more than 20,000 Americans who are said to have as much as $12 billion stashed overseas with Credit Suisse. In that light the bank got off really easy. Meanwhile it’s business as usual at the bank; in fact their stock went up one percent the day this deal came out.

How are the Credit Suisse hustlers who recruited the ultra-rich and guided them into this tax racket anything but crooks? If they recruited rich Americans to show them how to hide their bucks from the IRS in secret Swiss bank accounts, that sounds to us like they conspired to defraud the United States government. If there are billions overseas still hidden away in Credit Suisse accounts, how have the American people been served?

Why aren’t the Americans who lapped up this deal being named? Why aren’t they being charged? Why aren’t the bankers who recruited them being charged? Why aren’t their bosses who sent them out to recruit tax cheats being charged? And their bosses’ bosses and the CEO of the bank, Brady Dougan, why aren’t they all being charged? Are we to believe Credit Suisse had a crew of hustlers vacuuming American bucks – as much as $12 billion – into secret bank accounts and Dougan didn’t know? It isn’t like he is a stranger in our land; Brady Dougan is a US citizen. One wonders, does Dougan have a secret Swiss account?

We have bankers laundering dirty money of every kind, telling the drug cartels, “If it’s cash we’ve got your stash.” We have bankers scheming to fix international interest rates and help rogue nations avoid sanctions. And now adding recruiting tax cheats to their litany of bad behaviors. AG Eric Holder maintains that sending these criminals to jail might jeopardize the world economy. Really? Instead we give them fines that they see as no more serious than a parking ticket. Yet, just let any of these banks have a couple of bad quarters and watch their top guy get the boot. Executive turnover is an everyday thing; to imagine that bankers are too important to jail is madness.

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.

Published CommPRO.biz 2014.04.30

Sticky Arena Floor Ethics

 

The Staples Center in Los Angeles may be different from other arenas, but in most such sports palaces the floor is usually a little sticky, scummy if you will. It’s that kind of feeling that this whole Donald Sterling mess leaves us with. Ethically it is so far out of bounds that it’s out of sight. Sterling is still the owner of the LA Clippers, but he has been sent to the woodshed, the door has been slammed and he doesn’t even have a knothole to peek out at his club.

The brand new NBA Commissioner Adam Silver took swift action banning the long time Clipper’s owner from anything to do with his basketball franchise or anything else connected to the NBA, “forever.” And he slapped him with the maximum fine under NBA rules $2.5 million; pocket change for Sterling.

It’s not that Sterling hasn’t been in a woodshed before. He has a history as a bad boy who has managed to buy his way out of one mess after another. When you are a billionaire you can do that sort of thing. In Sterling’s case everything about him and his fortune leaves the bottom of your shoes sticky. He is a lawyer who started out in the Barracuda Bar, suing for a big share of the settlements. But that wasn’t enough. He moved into the landlord business, and that’s how he got into the “Ten Digit Club” – a billion dollars is a thousand million dollars.

Sterling has never been convicted of serious wrongdoing. However, he is certainly not the kind of landlord most of us would choose. He has been hauled into court for refusing to rent to minorities, blacks and Hispanics. All of these actions were settled before the court imposed a penalty; one even eclipsed the NBA fine a discrimination suit that settled for $2.765-million dollars; still pocket change.

Reckless, would describe a lot of Donald Sterling’s public life. His parading the women money buys for him in public. He seems to have left his moral compass in pieces somewhere along the road. You wonder how someone can fall to this level. Surprisingly it is easy. We have no idea how Donald Sterling lost his way. But those who wander from the life most of the rest of us strive to maintain have no intention of ending up like the sticky scum on an arena floor.

It begins easily enough; it’s just a little thing. Any number of emotions can trigger it: fear, jealousy, envy; the emotions we all feel and on occasion have allowed to turn our heads. It’s those who can’t turn back who are in danger of following a path that ends up in the rejection and degradation that Donald Sterling has on his head. It’s our guess that Sterling is so far down that path that he doesn’t care. Be sure that you don’t let that easy first step off the path lead you to a place you never intended to find yourself. 

Published CommPro.biz 2014.04.29

Ethics, Easy, Right? Wrong!!

Nothing to it, ethics is simple. All you have to do, is do “The Right Thing.” The problem comes when “The Right Thing” is not all that simple. It isn’t easy to speak up when your job is on the line. It isn’t even easy to speak up when a friend drops an inappropriate “F-Bomb” or worse makes an always inappropriate racist joke. A lot has to do with personality. Some are gifted with the ability to speak up in such situations. Others, who would never behave unethically, are just not able to speak out against unethical behavior. Some don’t want to alienate anyone.

And while the day-to-day situations we face are important, there are other cases where we must act; especially in the workplace. We have to act if a fellow worker is taking shortcuts that could endanger others, or just not providing service at the level promised. We have to act when we know the company is cooking the books as they did at Enron, or in the Libor scandal. When millions are being ripped off as they were when Enron manipulated energy costs. Even worse, hundreds of millions were hurt when a handful of traders manipulated Libor, impacting every entity and every person paying interest in every corner of the globe.

Some of these examples are illegal, others are unethical. Too often people fail to understand that the ethical line is drawn far from the legal line. Compliance and ethics get mashed together; corporate responsibility for ethics is given to legal counsel. Bad move, attorneys are trained to stay inside legal bounds. Some companies never learn. Hewlett Packard hired another lawyer to oversee ethics replacing Kevin Hunsaker, a lawyer who narrowly escaped jail time when he advised that a witch hunt for a Board of Directors leak was legal. It wasn’t legal and it was miles from ethical. If Hunsaker had based his advice on ethics, it would have saved all those involved worlds of trouble.

High speed trading, the practice of literally manipulating the stock markets could not be more unethical. Its practitioners dart in and out in milliseconds seeking those about to buy a stock, beating them to it and jacking up the price the buyer ultimately pays. Grandma’s pension fund and others lose. These buccaneers of our capital seas cry out that what they do is legal. At the moment so it is, however, it is far from ethical.

It is not always easy to see the ethical line and sometimes it is not easy to hew to that line. It takes practice and sometimes courage. It takes a willingness to risk everything from the loss of a friend to the loss of a career. You will likely find other friends, but you may not find another job. However, if you remain silent to keep a job, you will forever wish you had spoken out. And that job will grow heavy and seem sour every day when you cross over the threshold to your workplace.

 Published CommPro.biz 2014.04.24

Another Wall Street Scam

Do you remember way back in the 1990s and early 2000s, when the monster banks came up with new investment deals that bundled mortgages together, stamped AAA by compliant rating agencies and sold to the suckers, remember? Then remember what happened next? It turned out that the bundles were really a bunch of crappy AAA. The banks had tricked unsophisticated wannabe home buyers into signing mortgages they couldn’t afford.

We’re sure you remember what happened next; the world economy collapsed. In America we bailed out the monster banks to avoid a depression. But, we neglected to put conditions on the bailouts. So the big banks went right back to gambling with our money instead of helping small businesses where the jobs are created. The fat-cat banks and their bonus hungry executives are fine, while folks who lost their jobs and the rest of us are still suffering.

Nothing like that could happen these days because we’ve made it so hard to get a mortgage that even people who can afford to buy a home have a tough time. The monster banks are doing great with the interest free bucks the Fed has been feeding them, but the number of high-stakes gambling deals –oops when banks gamble the law of the land calls it “investing”– is so limited. They got into commodities, speculating on nearly everything we use. Who cares if they were raising the prices we pay at the pump or the grocery check out? But there wasn’t enough quick and easy money. They are working their way out of that game.

What now to roll the dice on? Enter the private equity folks. Guess what they’ve been doing? They’ve been buying up hundreds of thousands of those homes that ended up on the market dirt cheap after the crash. They are renting them, often to the same people who lost them to foreclosure. But the hefty rents they are collecting are not enough, and too many of the houses are empty. What to do?

So they got together with their buddies in the monster banks and came up with a new investment vehicle, Rental Backed Securities (RBS). Same as the mortgage deals but this time rental deals. Just how long will it be before the empty houses they can’t rent fill up with people who can’t afford them? However, the package of homes in the RBS will look good; every home rented.

After the RBS packages have been sold to the suckers, how long will it be before the renters fall behind in their rent and the whole house of cards collapses? If this sounds familiar, it is.  It’s the whole 2007-2008 nightmare all over again. The crappy toxic investment packages collapse, we have to bailout the banks again, they come out great and we suffer. Congress? Not a chance they are too deep in campaign contributions from the banks. We’ll be out in the cold, again.  

Published CommPro.biz 2014.04.08

Too Big To Manage, Not Too Big To Fail

In an effort to forestall another “Too Big Too Fail” recession, our Federal Reserve established the so-called Stress-Tests. The Fed looks at a number of aspects of a bank’s operations and determines its potential to go belly-up, requiring another taxpayer bailout, even triggering another recession. Frankly, none of the monster banks are stable. They engage in what would be illegal gambling except for the exemption the Congress gave them to label risky behavior as “Investments.” The eight largest banks have all been told to beef up; to add close to $70 billion in fresh capital.

The latest stress-test dealt a blow to Citicorp. The sprawling giant failed for the second time in two years. The last stress-test failure in 2012 led to a change in leadership, unseating the CEO. This is the second blow Citi has suffered in recent months; in February its Mexican operation was hit with a $400 million fraud. Basically the Fed found that Citi is out of control, not just too big to fail, but too big to manage. It’s clearly time to break up Citi’s operations; it’s time for Citi to become a bank again.

It’s obviously time for all the monster banks to break up their uncontrollable global operations. They’re all clearly too big to manage. When banks count their Vice Presidents by the tens of thousands, that alone should indicate that the same conditions that led to the breakup of the monster banks of the day in the 1930s are in place again today.  It’s also apparent that these behemoths serve no real purpose in our society.

Quite the opposite, the monster banks disrupt the banking sector. Aside from the role they play in manipulating interest rates and other hanky-panky, they make it more than difficult for our community banks. Take credit cards for instance. With the revenue from their legalized gambling operations, they can make offers that a legitimate community bank cannot match. They suck off the checking and savings accounts as well.

But unlike the community banks they don’t use the funds harvested from these sources to provide small business loans. They pour this cash into risky gambling ventures with no social benefit. That leaves the small businesses that create most of the new jobs in our economy starved for operating cash and our economy the worse for it. In addition to Citi, the Fed failed three international banks with operations in the United States including British giant HSBC which our Justice Department considered too big to jail when they were exposed as facilitating international criminal enterprises.

There are a host of reasons why the monster banks should become a thing of the past. Problem is they pour cash into the pockets of our legislators and thwart any effort to restrict or control them. Arrogant CEOs like Chase über kommandant Jamie Dimon strut and lecture our Congressional leaders, flashing cuff links with the Presidential Seal. Those sent to take care of the people’s business are instead increasingly beholden to those with the cash to dictate to them, among others the monster banks.

 
"Am I wrong?"--"Am I crazy?"

"What do you think?"

"Do you agree?"

 Published CommPro.biz 2014.04.08

GM Too Blind To See

Mary Barra’s “Woman’s Touch” 

may be just what General Motors needs 

Eleven weeks to the day after she stepped into the CEO slot at General Motors, Mary Barra was undergoing a second day of grilling on Capitol Hill. In full attack mode the members of a Senate Committee seemed determined to outdo a House Committee that had at her the day before. Over and over again they demanded an answer to the question that so often dominates these situations, “What did you and your people know and when did you know it?”

Unlike many under that kind of fire, Ms. Barra remained calm and collected; in most cases responding that she wants all the answers to that question more than anyone. So far as how the facts about the sure-to-fail-ignition-switches could be widely known in the company and not to those up in Carpet Land, she pointed to GM’s “Silo Culture” with lousy communications from group to group. We would add that in the late 2000s GM was collapsing into bankruptcy. Nobody wanted to add the “last straw” –another dime to their costs– even an inexpensive fix seemed to loom large.

None of this excuses what happened. But it perhaps explains what kept people in the know from sounding the alarm. Ms. Barra apologized again and again. She promised to get the answers. She promised to compensate the victims, even though under the terms of its bankruptcy GM might not be legally responsible. It would be hard to imagine a more contrite and responsible corporate leader. On the other hand the government bureaucrats who should have set off alarms were throwing up their hands claiming ignorance. Time will tell, but their story seems a lot harder to swallow.

GM had already made some moves in line with Ms. Barra’s declarations to “Do the right thing.” They’ve hired Washington attorney Kenneth Feinberg to figure out how to take care of those harmed by GM’s inaction. He administered the September 11^th victims’ funds. BP hired him to sort out the complex financial issues surrounding their Gulf Oil disaster. He is also administering the Boston Marathon funds. Ms. Barra has brought in über attorney Anton Valukas, to head up GM’s internal investigation on how this could have happened. He led the investigation into the Lehman Brothers collapse, the first shoe to fall in the 2008 financial disaster.

So far Mary Barra is on the proper path. We hope she digs out how this tragic series of events occurred. And who ducked when they should have set off alarm bells. There were GM people who knew that innocent people were dying because they were afraid to do the right thing. Ms. Barra needs to find out who failed and who pushed them to put costs first. She needs to clean house. Should she reach that goal, she will set the bar into the rest of this century and beyond for executives in every sector in our economy. May ethics be the wind under her wings.

"Am I wrong?"--"Am I crazy?"

"What do you think?"--"Do you agree?"

Published CommPro.biz 2014.04.01

High-Speed Trading 

Too Fast To Lose

Let's trim the Buccaneer's sails

 

Financial whiz turned best-selling author Michael Lewis, explains in The Big Short how greed-driven monster banks ran the world economy over the cliff. Why not? They knew that if anything went wrong they had nothing to worry about; they were “Too Big To Fail.” In his new book Flash Boys Lewis explains how high-speed traders make suckers out of large and small investors, rigging the markets in a we-win-you-lose game.

Sunday night (2014.03.30) on CBS 60 Minutes, Lewis explained how these buccaneers of the financial seas fly in and out of the markets in milliseconds, picking up pennies on zillions of trades. By purchasing advance information, they know where you’re headed and are able to buy target stocks split seconds before you do. By the time investors –the funds where your 401K resides, or the pension fund caring for grandma’s life savings– get to the market, the high-speed traders have jacked up the price, sold to the suckers and made off with their plunder.

The 60 Minutes Lewis interview follows tight on the heels of New York State Attorney General Eric Schneiderman’s launch of an investigation into the data sources high-speed traders lay big bucks on to get this jump on investors. Traders are just that, traders with no interest in supporting the markets. Currently all this is legal; it’s what drives the number of daily trades into rarified atmosphere. However, it has nothing to do with the purpose of the markets. In fact high-speed traders serve no social purpose whatsoever. They will tell you that they have reduced the cost of trades. While that is true, any savings long-term investors see are lost to the increased stock prices they pay. High-speed trading is miles beyond unethical and amoral.

The big exchanges, NYSE and Nasdaq, profit mightily; the latter reported tens of millions from selling data last year. That doesn’t include the rent they pocketed for allowing the high-speed traders to locate their computer servers side-by-side with exchange servers giving them another edge. What’s even worse, these high-speed buccaneers play the markets virtually risk free. One firm bragged that they have seen but a single day in the last five years when they lost money. They are literally “Too Fast To Lose.”

Lewis and Schneiderman are shining a light on these slime bags. Now it’s time for the Congress to act. There is a simple way to return the markets to their purpose, “The provision of capital for our economy.” Adjust our tax structure to collect 99% of profits on property held for less than an hour. And 90% on property held less than a week, 80% less than six months, 70% less than a year, 25% less than five years, 15% less than 25 years, and tax free on any property held over 25 years. That would fit in nicely with Warren Buffett’s declaration that “never” is the best time to sell a stock.

It would be good for capitalism; it would be good for Americans, for all of us.

"Am I wrong?"-"Am I crazy?"

"Do you agree?"-"What's your view?"

Published CommPro.biz 2014.03.25

Congress Blocking Doctors

Last Friday (2014.03.21) was “Match Day.” On that day thousands of mostly young doctors opened an envelope that confirmed their acceptance into a residency program. In many cases it defines the path their medical career will take for the rest of their working life. In most cases they knew they were in and just awaited final confirmation. For some it was their first choice and this was the first year they had been down this path. For others, they settled for what they could get. Others were back for another try, having missed the cut in earlier years. Still others missed the cut this year and will have to wait for next year, or perhaps the next, or the next, often while staring at a massive student loan debt.

For a nation facing a massive physician shortage –100,000+/- by the end of this decade– this is insanity. The number of residency openings is controlled by the United States Congress. Why there should be a problem with supporting this vital aspect of our healthcare system escapes us. However, we are living under a nearly two decade old cap put in place by the Congress. Given those in that body who are focused on anything but serving the people of the United States, it’s not likely that we’ll see a change.

On the other hand there’s good news. The number of bright young people –split about evenly between men and women– who applied to medical schools and the number enrolled as first-year students hit record highs this year. Add to that a dramatic increase in young doctors choosing family medicine. Five years ago it was under 60% with more than four in ten opting for specialties. This year it’s over 66% with less than one in three aiming for the specialties. That indicates a growing awareness among young doctors that the team-based comprehensive care ACA encourages is where the future lies. Primary care doctors will head-off serious illness in the future, saving lives, improving the lives of their patients and reducing healthcare costs.

There’s a new day dawning; young people entering medicine see it. Beat illness to the draw, make prevention the goal. The old model, treat people after they get sick is on the way out. Paying doctors based on the number of patients they run through their practice is so over. Payment needs to be focused on outcomes, on the overall health of the patients under a doctor’s care. America spends more per patient than any country on this planet. Yet we rank among third world countries when it comes to outcomes. The ACA is a baby step in the right direction.

Our lawmakers need to do the job they were elected to do, to serve the interest of all the people of the United States. They can begin by opening up more residency slots for young doctors who have fought their way into medicine, and are ready to go to work.

Published CommPro.biz 2014.03.18

Wealthy Jerks

Put-upon billionaires have recently equated criticism of their wealth with actions of the Nazis leading up to World War Two. Reacting to suggestions that a tax loophole favoring the rich be closed, Stephen Schwarzman, Chairman of hedge fund Blackstone, is quoted, “It’s war. It’s like when Hitler invaded Poland in 1939.” Tom Perkins, another billionaire, went a step farther likening actions by the 99.9% to Kristallnacht, the 1938 Nazi riots targeting Jewish-owned businesses and synagogues. Both Schwarzman and Perkins later apologized, but there’s no question that some of the 0.1% feel attacked.

It’s part of the apparent fog that enters the minds of a few of those who do well; they begin to feel that they are rich because they deserve to be rich. After all, they worked hard, are smart, and that’s why they reached these lofty environs. It never occurs to them that where they were born may have helped, that being in the right place at the right time might have helped, that someone gave them a hand up, or that a host of other things –including luck– might have had a role in their success.

Paul Piff, a social psychologist at UC Berkeley, and his students look at us as a society and how various life circumstances change our views. They have discovered that some of us pick up very quickly on this viewpoint. In dozens of studies conducted around North America Piff and his associates have discovered that being rich turns some of us into jerks. In what we’ll call his street corner observations, Piff found that those driving luxury cars were more likely to run a red light or stop sign and paid little attention to those on the corner trying to cross. In another study they even found some of the rich would take candy from little children.

Most interesting were his rigged Monopoly games. Students rolled the dice before the game to see which one would be given huge advantages. No surprise, those with the advantage won. Big surprise, some thought they deserved to win, that it was their playing skill and not the advantage that made them winners.

Truth is there are lots of variables. Lots of hard workers with great ideas never make it and some clueless jerks do. Those who have to justify their wealth with some myth are to be pitied. Truth is those who win following the ethical business model –and it doesn’t insure success– are not jerks. They make up the majority of the rich, the know-how-they-got-there rich, the nice rich who look out for their customers, their team members, their vendors, their community, and the environment. And by the way –all things being equal– they make a lot more money than the jerks following the dog-eat-dog path. Jerks like Schwarzman and Perkins deserve to be unhappy and to feel threatened by those who point out the unfair advantages they enjoy. They deserve to live in the world they created.

 Published CommPro.biz 2014.03.13

Pain Killers Kill

Zohydro; even the name looks and sounds scary. And well it should; Zohydro is the latest opioid to get the greenlight from the FDA. An OK for a new souped-up hydrocodone formulation that is five to ten times more potent than any of the pain meds now available. There are a couple dozen opioids out there, all derived from heroin’s first cousin morphine or its artificial form. They are all candidates for abuse. They all have the potential to kill more than pain.

It’s hard to imagine how Zohydro gained FDA approval. More than forty doctors and drug abuse experts urged the FDA to nix Zohydro. They wrote, “In the midst of a severe drug addiction epidemic fueled by overprescribing of opioids, the very last thing the country needs is a new, dangerous high-dose opioid.” The Attorney Generals of 28 states and other elected officials have urged the FDA to back off, all to no avail.

Zohydro is a time release drug; each dose is designed to phase in over 12 hours so its full force is not at play at any one time. However, Zohydro lacks any measure to deter abuse. It is not clear why the manufacturer has not added a deterrent. There might be a clue in the background of the drug company CEO; he has a bachelor’s degree in accounting from a small Midwestern college. He may very well be focused on the well-being of mankind rather than the numbers he can ring up with Zohydro, but there’s nothing to indicate that in its present form.

Whatever their motivation adding a potent drug of this magnitude to the runaway levels of opioid prescriptions over the last few years makes no sense. The number of these prescriptions written in 2013 was down 5% from 2012. While any drop in this category is good, there were still 230 million opioid prescriptions written last year; that is up over 14% in just a half dozen years. Some experts say the potency of the pills in many prescriptions was up as much as 50%.

Everyone agrees that the abuse of prescription drugs is up. Kids are getting high from their parents’ pill bottles. Adults are liking how they feel on the drugs they get for pain and experimenting with more and more. Others are mixing opioids, booze and tranquilizers with dangerous and unforeseen results, too often death. It’s too easy for people with legitimate pain issues to find themselves in the “if this works, more must be better” spiral. If they can’t get what they want from their doctor or the hospital ER, they just find another doctor, or another ER.

It’s too easy for doctors to prescribe a pain killer when physical therapy would be a safer alternative. And it’s too easy for patients to pop a pill rather than make a trip to a physical therapist. Too easy to pop another pill when one doesn’t make the pain go away. Too easy to pop one too many and take everything away.

"Am I wrong?"--"Am I crazy?"

"What do you think?"--"Do you agree?"

 Published CommPro.biz 2014.03.04

Walmart And The Tax Creators
 

Are you sure you are getting a bargain when you shop at Walmart? Are you sure that your Big Mac doesn’t cost more than the price on the menu board? Are you sure that the upfront low prices you pay wherever minimum wage jobs are part of the picture are all you pay? Don’t be too sure.

If you pay taxes of any sort, you probably help pay for food stamps. You definitely help pay for Medicaid and subsidized housing; even welfare might soak up some of your tax dollars on their way to help the working poor. So when, the working poor are paid minimum wage, you help make up the rest of their income. They are on your payroll. So even if you don’t shop at Walmart or eat fast food, you are still not only picking up part of their workers’ paychecks, you are cutting their customers’ bill.

The largest recipient of welfare in America is Walmart. It’s their business model, along with reported bribery, to smooth out their growth. Walmart is America’s largest employer, so you are not just subsidizing some mom and pop outfit; you are subsidizing a huge enterprise controlled by the Walton family. They own a little over half the stock in Walmart, so whatever happens at Walmart is under the full control of these unbelievably rich folks. How rich are they? The Walton family riches equals the total riches of everybody in the bottom forty percent of Americans.

The first argument against raising the minimum wage is that it will cost jobs; that businesses paying minimum wages will lay people off. That assumes that these organizations have too many employees, or that they don’t want to give their customers quick efficient service. Or that they will have to raise their prices so much that they won’t have as many customers. Of course that falls apart if the competition has to raise their wages and prices too.

Then there’s the teen argument. That most of these jobs are filled by teens who are learning how to work and therefore should be paid a bit less. If that was ever true, it isn’t true today. Yes there are teens in minimum wage jobs, but the vast majority of those at this pay level are adults, most trying to support a family. So how about the teens? Perhaps a case could be made for a two tier minimum wage that would allow for a lower pay scale for teens during their first few months on the job until they become as productive as the adults.

In the end all the arguments against a decent wage level fall apart. And by the way, Walmart doesn’t skimp on payroll to offer lower prices; they do it to make the Waltons richer. In the end that’s what it’s all about, save on payroll, keep the extra bucks and let the taxpayers make up the difference with food stamps, Medicaid, and anything else it takes to help your workers scrape by.

"Am I wrong?"--"Am I crazy?"

"What do you think?"--"Do you agree?"

Published CommPro.biz 2014.02.27

The Solution
 

“What do you think is the most important problem facing this country today?” The folks at Gallup ask 1,000+/- scientifically chosen Americans that question the first week of every month. Last week (2014.02.17) they released the answers for this month. Jumping back into the lead it shared with “The Economy” every month from 2008 until last fall, was “Unemployment and Jobs”. So despite the chorus that has been droning “debt/deficit, debt/deficit, debt/deficit” during that same timeframe, the public has been worrying about unemployment, jobs and the economy. The deficit and debt has been at the bottom of their list after other concerns like healthcare and the politicians who are supposed to be doing something about these problems.

Actually the politicians beating the deficit drum are the ones who were in power when it was created. So if the people are concerned with unemployment, jobs and the economy, why do they keep sending the debt creators back to Washington to complain about their creation? The answer is twofold. Firstly, those who benefit most from the policies of debt creation –the ultra-wealthy– pour money into the election campaign coffers of the debt creators. Secondly, gerrymandered districts –immune to democracy– have been created for these servants of the wealthy.

How do we create jobs, reduce unemployment and fix the economy? We don’t claim credentials when it comes to economics, nor are we relying on the host of economists who see the solution we see. We are just reviewing the past. If you start at the beginning of the modern economic model –the industrial revolution and the birth of capitalism– you find the beginning of the pattern of periodic downturns in the economy, mostly caused by one greedy sector or another.

If you examine that series of ups and downs you will find that without exception, when the economy went down, recovery was triggered by the same solution. The government stepped in creating jobs, jumpstarting recovery. There is not a single instance in the United States or any other modern economy where a downturn has been reversed by any other means, not one. The idea that austerity is the path out of an economic downturn is a proven failure. Anyone who reviews history can see that. We see it today in Europe, nations teetering on the brink of bankruptcy. Germany, the strongest nation in the EU, is stagnating. We are the strongest nation in the world. Yet we are creeping; dragged down by the debt creators.

Now is the time to repair our crumbling infrastructure, to invest in education, to fund research, to create the jobs that will pull our economy out of the mud. To do what has been done every time we’ve faced this problem for more than 200 years, jumpstart growth. The people have been worrying about unemployment and jobs for five years. We know how to fix that; it could have been addressed in 2008. Makes you wonder why some of those charged with fixing it have instead focused on the debt/deficit; maybe a distraction?

"Am I wrong?"--"Am I Nuts?"-

-"What do you think?"--"Do you agree?"