March 31st 2011 3/31/2011 - bobbykearan | Internet Radio | Blog Talk Radio

March 31st 2011 3/31/2011 - bobbykearan | Internet Radio | Blog Talk Radio

I put today's blog posts into a Radio Show. Let me know what you think.

Short Run Results vs. Long Term Viability

A 2003 Address by business leader Bill George identified the problem in the Business sector that has gone on to cause an economic collapse, propped up by a tax-payer funded bailout - but destined to fall again, unless things CHANGE.

Its hard to trim out just a few pieces of his lengthy writing to hi-light, but I've tried with this one :

We are witnessing the excesses of the shareholder revolution that began fifteen years ago. In its early stages, pressure from shareholders did much to improve the competitiveness of American corporations, as companies trimmed unnecessary expenses, improved profitability, and increased cash flow. However, the financial rewards from their actions, both corporate and personal, were so great that companies and shareholders alike developed an inordinate focus on short-run results. In a booming stock market, it all seemed to be working.

Then capitalism became the victim of its own success. Instead of focusing on traditional measures such as growth, cash flow, and return on investment, the criterion for success became meeting the expectations of the security analysts. Investments were cut back in order to make earnings, limiting the company’s growth potential.

Here is a more poignant slice of wisdom :

The general public played a role in this tragedy as well. In idealizing the high-profile personalities that ran these companies, we made them into heroes. We equated wealth with success and image with leadership. To our dismay, we have learned that these celebrity CEOs have been filling up their personal coffers at their shareholders’ expense, while destroying the pensions and life savings of thousands of people.

People are still making criminals into heroes.  When we say that CEO pay is too high, they cry that we want to punish success.  No, it is not success that would be punished, it would be excess.  If you 'succeed' by destroying others, taking away from others and harming the economy of a country, that is not success, that is a failure.  It is a failure of Ethics, a failure of Good Business and a failure of Personal Responsibility.

Here is an example of the kind of "business leadership" I (and US Uncut) have been talking about - a failure of epic proportions :

Back in 1998 I met with one of these leaders to talk about acquiring one of his companies. In our brief meeting he explained how his off-shore headquarters enabled his company to avoid U.S. taxes, how he automatically issued pink slips to twenty-five per cent of the workers on the day he acquired their company, and how he shut down every research project or investment that didn’t pay off in the first year. As I walked out of his office, I held onto my wallet and decided to cancel further talks with him. You cannot do business with people you do not trust.

Here is why I am not for legislation to take care of this issue :

It is impossible to legislate integrity, stewardship, and sound governance.  

Ethical Capitalism MUST begin with the Companies themselves.  We can choose who to buy from - even if their product is not "the best" in the market.  We have a choice and a way to influence decisions.

Somewhere along the way we lost sight of the imperative of selecting ethical leaders that create healthy corporations for the long-term.  

 The lessons from this crisis are evident: if we select people principally for their charisma and their ability to drive up their short-term stock price instead of their character, and shower them with inordinate rewards, why should we be surprised when they turn out to lack integrity? We do not need executives running corporations into the ground in search of personal gain. We do not need celebrities to lead our companies . We do not need more laws.

We need a new kind of leader.We need authentic leaders, people of the highest integrity, committed to building enduring organizations. We need leaders who have a deep sense of purpose and are true to their core values. We need leaders with the courage to build their companies to meet the needs of all their stakeholders, and who recognize the importance of their service to society.

See, can't stop clipping from that blog! Great stuff and STILL relevant. We need a New Kind of Leader - well, actually an old fashioned kind of leader.  Perhaps some that prefer to make twenty thousand workers prosperous and contented rather than a few executives multi-millionaires.

There are a lot more gems in the piece, but I will let you read it for yourselves.  Please comment here.

While the development of fundamental values is crucial, integrity is the one value that is required in every leader. Integrity is not just the absence of lying, but telling the whole truth, as painful as it may be. Without complete integrity in your interactions, no one can trust you. If they cannot trust you, why would they ever follow you?

A book to read : Leadership Is an Art

DePree believes that a corporation should be “a community of people,” all of whom have value and share in the fruits of their collective labor. DePree practices what he preaches. While CEO, his salary was capped at twenty times that of an hourly worker. In his view tying the CEO’s salary to his workers helps cement trust in leadership. Contrast that with today’s CEOs, who are earning – on average – four to five hundred times their hourly workers. As DePree said recently, “When leaders indulge themselves with lavish perks and the trappings of power, they are damaging their standing as leaders.”

 Check out Bill George.

MarketWatch : Super Rich are Killing Economy (Share This!)

Wall Street Journal's Market Watch has a couple articles worth reading for everyone.
Paul B. Farrell's "Tax the Super Rich now or face a revolution" and "New Civil War erupts, led by super rich, GOP"

Read them and come back... .. please. :)

Welcome back!

The Super-Rich Delusion is thinking they are safe from the economic chaos they are creating.

The “rich class” is winning this war. Except most Americans still don’t realize they’re losing, don’t see the prize at stake.

 ( Read Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein - or watch the DVD )

“But rest assured,” continued Klein in September 2008, Reaganomics “ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize.”

They laid out their strategy and people just ignored it.  The Super-Rich Delusion had already infected a large portion of the population.  Those like the Tea Party working feverishly against their own best interest and the interest of their children.  They are not turncoats, they are infected, sick, taken in by the "trickle down" ideology that has repeatedly failed this country.  Repeatedly failed.  Take a look at history.

"We learned of Snyder’s democracy-killing coup a week earlier when MSNBC’s Rachel Maddow interviewed Naomi Klein. Maddow also exposed another particularly harsh tactic: Snyder’s $1.7 billion tax hikes against seniors and the poor. He was “not using it to close the budget gap. He is giving it away in the form of $1.8 billion in corporate tax cuts.”
Get it, folks? In the GOP governors new strategy escalating this Civil War, the GOP is robbing the poor to give to the rich."

 George Bush said repeatedly that "A dictatorship would be a heck of a lot easier" - and they are DOING IT NOW!!

Klein’s recent interview with Maddow exposed the GOP’s charade: Now we know with certainty that the budget crises in the 50 states were “created on Wall Street then moved to Main Street, deepened by the policy decisions to bail out banks instead of bailing out homeowners, instead of bailing out workers. And that means your tax base collapses.”

It is not about a class warfare, for me, instead, it is about the Tax Base collapse.  It is the collapse of the Consumer Base.  We can't buy stuff any more!  We don't get paid as well as we should because CEOs are eating up too much of the economic pie.  No, I don't think they can possibly deserve it - but it doesn't even matter if they do.  It is Killing the United States economy! Period.  You can NOT drain the money away from the Spenders and never give at least most of it back.  I would PREFER to have it given back in Higher Wages for working hard, but even if by Taxes, it has to be Recycled into the economy and not Horded in Stock Options, Savings, IRAs and Luxury Yachts of the Super Rich.

I am more than willing to help companies develop an Ethical Capitalism compensation strategy.  I am sure there are others who can do it also, who maybe have economics or business degrees.  I am just a guy with above average smarts (~158 IQ) and a strong grasp of the blatantly obvious.

( Watch this! )

Ethical Capitalism can Save U.S.

I may have been a Republican

Many Conservatives reject the Tea Party's paranoid views.  Which is almost good news.

Reading the article, it seems like I may be - or have been - a Rockefeller Republican.  I find it amusing that "The Birchers" fueled the first split and "The Birthers" are fueling the one now.

Still, I think I am fairly fiscally conservative.  I want to give people a Hand Up, not a Handout.  I want to give people the tools to succeed and remove the yokes designed to keep them down.  In the end, though, you have got to step up on your own.  I do not, however, want to give huge breaks and subsidies to corporations.  I do not want to allow them use of tax havens and other tax avoidance methods to wiggle out of paying their fair share.

I don't want government all up in my business.  I like Thomas Jefferson's quote :

No man has a natural right to commit aggression on the equal rights of another, and this is all from which the laws ought to restrain him.

Sadly, we have a lot of people committing a whole lot of different kinds of aggression against others, so we have to have laws protecting people from such things a discrimination, violence and fraud.  (I found the non-aggression principle interesting) Other things make less sense.  Why is there a law forcing me to wear a seatbelt while driving? My safety? That is not the purpose of laws - to keep me safe from myself.  Also, I don't agree that wearing a seat belt makes me safer. It is a form of gambling - a seatbelt could keep me safe or it could cause my death.  I am the only one who can rightfully make that choice.

One thing I really agree with - and want to help push forward - is the possibility of a grassroots movement to counter the paranoid rampage of Tea Party Republicans.  That is not to say 'be against the Tea Party' by any means.  If some of their points are valid, then embrace those.  We need to have a group dedicated to Truth and Reason above and beyond political agendas, ideology and 'belief.'

The problem is that people don't get excited about Truth and Reason.  People get excited about being Against something.  As a group, we need a rallying cry, a symbol, a cause to inspire and drive us.  There are plenty of people saying the same things.  Some are scaring Glenn Beck.

US Uncut is building some momentum - but its only focused on getting corporations to pay their fair share of taxes.  There is a whole lot more at issue here.  The Coffee Party is doing great things and really growing, but I fear a lack of cohesion or a lack of a motivating central theme. "Civility" will only get you so far, unfortunately.  I am a "Founding Member" of the Coffee Party (as a Grassroots Movement, Politically, I am a member of the Reform Party) and am going to put some effort toward spreading it's message here in Mississippi.  I am a member of the Coffee Party's cooperative site Shared Purpose.  I just hope people really can Wake Up and Stand Up!!

And as always, Ethical Capitalism can Save U.S. !!

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some links of interest:
CBO on TARP
FedUpUSA is a good read.
CBO Hourly Wages from 1979 to 2009

A couple articles and thoughts

Thom Hartman does a pretty good job of explaining the "Corporation" - with a lot of explaining about different evolutions of government.  He starts off with a quote from 1912 by William Jennings Bryan:

A corporation has no rights except those given it by law.

It had always been so, right up until the Right-wing corporate stooges on the Supreme Court ruled otherwise.  This brings up another idea... "corporations are legally obligated to focus on nothing but profits"  I find no actual proof of such a concept.  One article has a quote :

The social obligation of business is to sustainably maximize long-term profits for shareholders. Nothing more. Nothing less.

and another :

That responsibility is to conduct the business in accordance with [the owner's/stockholders] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. 

Those quotes contradict the whole premise that the article puts forth, that "Profit" is the only motivation for a corporation.  The quotes it supplies actually supports my idea of "Ethical Capitalism."

There is no separation of "Social" and "Business" interests.  A business can not "sustainably maximize long-term profits"  if it is at the same time destroying the economic base of the community it operates within.  It can not maintain long-term profits if it is destroying the environment.  Those practices sets up short term profits and long term failure.

If you own a company whose purpose is "maximized profits at any cost" then you are a criminal and should be shut down and locked up.  If, however, you are a business owner who wants to have a profitable, long-lived business within a community or state or country, then it is in your best interest to cultivate and help sustain the economy of the area you are operating in.  That ensures the "long-term" part of your profits.  I don't see how anyone could imagine otherwise.

I find this to be most reasonably achieved by paying your workers well.  You help grow the local economy and fund the local government and lower corporate taxes at the same time.  Ah, taxes.  It would be wonderful if corporations actually paid the taxes they are supposed to.  An ethical company should pay it's fair share to sustain the environment in which it prospers - roads, law enforcement, fire fighters, schools and other structures of government.

In an blog entry on Buzzflash, we find one researcher not enthused about doing his taxes, so investigates corporate taxes - and what he found out.

Ethical Capitalism can Save U.S.