Entries Tagged as 'Corporate Wrongs'

Why I’m Attending The Occupy Houston March On October 6

I’ve worked ever since I graduated college.

I willingly pay all my taxes.

I vote in every election.

I write a political blog so I can be part of our democracy.

I spend much of my free time reading and following baseball.

Maybe I’m the conservative.

Maybe my friends are the conservatives.

Maybe the Occupy Wall Street folks are the conservatives.

We just want a decent society where playing by the rules and working hard is rewarded.

What we don’t what is a nutball free-for-all of corporate criminals owning our politicians, endless war based on lies, and treating people like crap because they may be gay or of color.

This is why I’ll be attending the Occupy Houston event you see described below.

I think we need to be—working together—the source of our own hope and change.

The work of freedom and democracy is up to each of us.

Here is the Occupy Houston website.

Here is the Occupy Wall Street website. 

Here is a great view on the protests from the liberal magazine The Nation.

Here is a Daily Kos post with links to Occupy efforts all across the country. This is a great resource.

Below is a poster for the Houston event— [Read more →]

Thursday Morning News Roundup

Elizabeth Warren is running for Senate in Massachusetts. I simply love Elizabeth Warren. The professor is smart. She’s thoughtful. The biggest question I have about her candidacy is whether she can be tough in the trenches. Politics is a tough business. Will she be able to throw elbows when necessary? From time to time on this blog, I will endorse a candidate who I feel will represent the American people and fight for the middle class. My endorsement comes with more than simply lip service. I am sending a cash donation to her campaign – today.

Creating jobs is key to our recovery. I simply don’t understand how giving corporations, already fat with corporate profits, more tax breaks is going to give them incentive to create jobs. I think it is clear that many of these corporations have created jobs overseas but have not done so here in the US. Gov. Rick Perry has been touting his record for job creation. Unfortunately, he’s creating a bunch of minimum wage jobs. A review of the data reveals that he has doubled the number of minimum wage and low-wage workers (making less than minimum wage) since 2007. We need to create quality, living wage jobs.

The American Society of Pediatrics releases a statement which corrects the false and misleading statements that come out of the mouth of Michele Bachmann. While there is so much misinformation coming out of the Republican debates, Michele Bachmann seems to lead the charge. Her recent statement that the human papilloma virus (HPV) vaccine causes mental retardation is simply a scare tactic. There are no data in the literature to support this. None. There are lots of valid reasons for opposing a “mandatory” vaccine. Personally, I support the vaccine because it saves lives. This vaccine can potentially save over 4000 women a year from dying from cervical cancer.

One of the things that I found most interesting about us Americans is that we can hold diametrically opposite views at the same time. We can go to church on Sunday and we can read the Bible. We can believe that we are our brother’s keeper. We can believe in recycled passage that we should love our brother as ourselves. Yet, we can somehow also believe that a person dying on a ventilator without medical insurance who has a treatable disease should be unplugged. I don’t get it. Yet Tea Party supporters actually shouted during a recent CNN debate, “Let him die.” Ironically, one of Ron Paul’s chief strategists Kent Snyder died recently. He was uninsured and broke. Ron Paul’s answer to health care reform is to let churches and charities chip in and help out. It sounds nice. But in actuality churches do not have the resources to support over 50 million Americans without health insurance. Kent Snyder’s friends have donated over $40,000 towards his $400,000 medical bill. This is an excellent example of how charity can and does fall short.

Five things that the Tea Party will cheer for. Yuck.

A trader for the Swiss bank UBS has lost over $2 billion. How is this possible? Not $200,000 or even $2 million. This guy somehow lost $2 billion!!!

Bank of America is fined for firing a whistle blower. This guy informed investigators of the widespread fraud in Countrywide. He was fired? He deserves a Medal of Freedom!

The Rick Perry problem.

New evidence reveals that News Corp directors knew of the US hacking over a decade ago.

As soon as I saw that solar power company Solyndra went under, I knew that the sharks would be circling. The $535 million taxpayer loan is plenty of reason for us to question the wisdom of lending them money. Now, there is the finger pointing. Did the administration push the loan through without the “proper” review? I think that everything should be reviewed but that we must not lose sight of the purpose of government loans. The government needs to take big gambles in the name of the American people. We need to push the envelope. If business were going to support these long shots they would have already, but business is always going to lean toward safe and trendy.

Paintings of banks on fire are selling like, well, hotcakes.

What’s on your mind today?

Cable down – big business failure, again

Internet connection has been down for about 16 hours. Now, we’re back.

Last night, a relatively violent storm rolled through Western North Carolina. It’s not unusual for there to be power outages. Why is that? Why aren’t we protected from power surges and power outages caused by major thunderstorms? Is it that we don’t have the technology? Or could it be that big business (the power companies) will not pay to have redundant power supplies and adequate surge protectors?

So, my Internet goes out last night. I call my Internet provider first thing this morning after troubleshooting on my own. For those of us who have had Internet service for while, we’ve all gone through the drill – unplug your cable modem. Leave your cable modem unplugged for 30-60 seconds. While your cable modem is unplugged please unplug your router. Now, plug in your router and then plug in your cable modem. Which lights are blinking and which lights are off? Please turn off and then turn back on your computer. None of these maneuvers work. I knew that the problem was in the cable feed coming into my house. So I call my cable provider and waste over 30 min. on the phone before they decide to send somebody out. The good news is that they send somebody out within the prescribed two-hour window. It took this computer guru less than 5 min. to see that the problem wasn’t inside my house, like I said. The problem was outside of my house. He went and checked the box outside the house and there was no power coming to the box. The problem was somewhere in the vast network of my cable provider.

Here’s my issue – my time is completely worthless to my cable provider. They should’ve known that the problem was outside of my house when I called. If they didn’t know, why didn’t they? This isn’t nuclear physics. System diagnostics should be relatively simple and required for all cable companies. It is my opinion that they knew but didn’t care to pass on that piece of information to me. In my opinion, this is another failure of government regulation and oversight. If we are supposed to be efficient workers, we can’t waste time dealing with simple basic utilities.

A Green Citizens United Christmas

Above you see a Christmas ornament on my Christmas Tree.

The ornament is of the U.S. Capitol with a copy of the Constitution scrolled around the building.

You light up the ornament by placing a Christmas tree light into the back of the ornament.

I placed a green bulb in the Capitol/Constitution because our nation’s political system is run by big money.

It’s always been this way—But since the terrible Citizens United ruling earlier this year by the Supreme Court, the rule of big money is even worse.

The 2012 campaign is going to be all about big money from often secret sources.

The Citzens United decision allows for unlimited secret money to be donated to political campaigns from corporations and the super-rich.

I’m not certain my protest of making the Capitol and the Constitution the color of money will change much.

It is simply what I could do in the context of my Christmas Tree.

However, there are things we can do to combat the role of big money in our politics.

We can donate money ourselves, discuss issues with friends and family,  run for office, start a blog, contact our elected officials, volunteer  for candidates or causes we support, and do whatever else we feel may be of value.

There are always things we can do. It is up to us to do the work of freedom and democracy.

To the left of the Capitol ornament you see a salmon.

That would be a great movie where the Capitol was attacked by a salmon. I hope somebody makes that movie real soon.

Is Target turning over a new leaf?

I saw that story last week or the week before which mentioned that Target had given money to a political action committee and that political action committee gave money to some far right wing homophobe. I was incredibly deflated. I foolishly thought that Target was the good box store and that Wal-Mart was evil. There may be a small glimmer of hope. It appears that Target is going to look over their policies (whatever that means).

Maybe I should quit buying stuff altogether?

Grab Bag Monday — late edition

Sometimes, it’s hard to believe how fast the day goes by.

  • I’m not sure what’s going on in the United Arab Emirates. I’m not sure why they think it’s a great idea to limit e-mail access on BlackBerrys. Would the UAE be the definition of a police state?
  • A huge sum of money was pulled out of mutual funds over the last year. $1.1 trillion to be precise. It is unclear exactly what Americans did with that money. Pay bills? Try to prevent foreclosure?
  • One of the biggest examples of our failure in Iraq has been our inability to turn the lights on and keep them on. Electricity is still spotty at best. Could we have completely rebuilt their electricity grid three times over during the last eight years?
  • Another Democrat is in trouble with the House ethics committee. Longtime California Democrat Maxine Waters appears to have asked for federal aid for a California bank in which her husband served on the board and owns stock. She, of course, has admitted no wrongdoing. From a Democratic standpoint, this is more than problematic. Two long-serving congressman are embroiled in ethics scandals. This simply isn’t good. Personally, I am saddened by even questionable ethical practices. Both Representative Waters and Representative Rangel understand they are under scrutiny at all times. They have to have their acts together. They can’t do anything that’s even a little bit shady — unfortunately, it looks like they forgot this basic lesson.
  • Politicians are rolling in campaign cash.
  • How does 4.9 million barrels of oil look to you? It looks like the worst spill of all time to me.
  • There are a number of reasons why the Bush tax cut needs to be allowed to expire. Robert Reich has a few reasons.
  • I don’t understand the recent push to try to repeal the 14th amendment. If you’re born in the United States, you should be a United States citizen. If your parents got here illegally, that’s not your fault. Why should you be penalized?
  • Countrywide has agreed to pay $600 million to settle lawsuits.
  • Al Jarreau is out of the hospital.

What to do with WaMu?

The Senate opens hearings today into the failure of Washington Mutual. Washington Mutual was among a group of banks that jumped into the subprime mortgage sector headfirst. Jumping into anything headfirst is not usually a good idea until you know how deep the pool truly is. It is estimated that over $700 billion of these subprime mortgages were handed out between 2004 and 2007. These were those famous adjustable-rate mortgages. Washington Mutual handed out over $133 billion in these adjustable mortgages. The former CEO Kerry Killinger stated that WaMu wasn’t being treated fairly by the government. He whined that WaMu “should have been given a chance to work its way through the crisis.” What I want to know is whether anyone in that hearing run over to Mr. Killinger and cry tears of sadness for this millionaire.

When people are given the wrong incentives, we shouldn’t be surprised when they do the wrong thing. Specifically, loan originating officers were given incentives to generate loans. It really didn’t matter what kind of loan. It didn’t matter whether the loan was fraudulent or legitimate. During Washington Mutual’s own internal investigation back in 2005, they found the two offices in California where over 50% of their loans were fraudulent. (At one location was over 80%.) Yet, the practice continued. Why? The money was too good. (Oh, I forgot to mention that their own risk officers were excluded from important meetings. This means that either these risk guys are lying to protect their butts or WaMu knew what they were doing was fraudulent and they didn’t want to rish telling them.)

In Michael Lewis’s book, The Big Short, he describes an incident where a immigrant farm worker who made no more than $14,000 a year was given a loan for $750,000.

Lower middle class and upper lower class Americans were hit the hardest by these fraudulent practices. They were specifically sought out by these banks. These are Americans that are holding down one or two jobs. Both parents are working. They’re working extremely hard and they are very close to being able to afford a nice house, in a nice neighborhood with good schools. Something always gets in the way of their dream house. These are everyday expenses that they simply cannot afford — car breaks down, they need a new refrigerator, Johnny was hit in the head with a baseball and needs stitches. So Washington Mutual, IndyMac, Wachovia and others preyed on these Americans.

Here’s my whole problem with these shysters. They made tons of money off of unsuspecting Americans, off of Americans who wanted to believe in the American dream. When the banks collapsed, the Americans were kicked out on the street. Banks who were deemed too big to fail were rewarded for their size and they were allowed to buy the smaller failing banks at fire sale prices. Bankers who lost their jobs were given a little pot of gold on their way out the door. Bankers who kept their jobs were given big fat pay raises for acquiring new assets. Real, honest-to-goodness, hardworking Americans who believed that they would never be given a mortgage they didn’t qualify for were asked to bend over (and kicked in the seat-of-the-pants repeatedly).

So, I hope that something meaningful will come out of these Senate hearings. I hope this is not just a dog and pony show.

The Supremes

I wish I was talking about the soulful group led by Diana Ross from the 1960s. Unfortunately, I’m talking about our Supreme Court. By now, you have read hundreds of opinions of why the 5-4 decision in Citizens United versus the Federal Election Commission was bad or was good for the country. I think the decision was awful. I do not think we will see a huge influx of money into our elections. We have already seen this. We have seen staggering sums of money as business tries to influence our politicians. From my standpoint, I have a problem with corporations being treated as persons. Aren’t corporations nothing more than contracts? Are they nothing more than stacks of paper? We should treat them as such.

From the Daily Beast:

The Supreme Court’s decision to roll back campaign-finance reform does more than just open the spigots for corporate cash. It also exposes the judicial activism of the Roberts Court.

On Thursday, the Supreme Court voted 5-4 in Citizens United v. Federal Election Commission to overturn decades-old restrictions on campaign-finance reform. The majority’s bludgeoning of what were already pitifully weak restraints on corporate campaign spending is a kind of jurisprudential equivalent to clubbing a baby seal: a revolting spectacle that might make even a sadist or a K Street lawyer blanch. The animating principle that underlies the majority’s argument is clear: We must do what we can to ensure that corporate America shall have a new birth of freedom–and that government of the wealthy, by the wealthy, for the wealthy, shall not perish from the earth.

Three aspects of the decision are particularly noteworthy. First, Chief Justice John Roberts, who was praised to the skies at the time of his confirmation hearings for his supposedly “minimalist” approach to judging, goes out of his way to demolish several decades worth of congressional work to do something about the corrupting influence of money on politics.

He does so by taking two totally unnecessary steps. For one thing, the law at issue could easily have been interpreted to simply not apply to the facts of this case. (The case involves the distribution of a feature-length film via video on demand, which quite arguably is not an “electioneering communication” covered by the federal statute the court struck down). It’s a well-established rule of statutory interpretation that when a court is faced with two plausible readings of a federal statute, one of which would require something as drastic as finding the statute unconstitutional, and the other which avoids that outcome, the justices ought to prefer the latter. Indeed, that rule is a central tenet of anything that deserves to be called “minimalist” judging.

Secondly, even after the Court chose to interpret the statute in the former fashion, Roberts and the rest of the majority could have held that the statute was not unconstitutional on its face, but merely as applied to the facts in this particular situation. Avoiding rulings that declare federal laws unconstitutional on their face rather than as applied is also a fundamental principle of minimalism.

Curiously, Roberts’ aversion to maximalist interpretations of First Amendment rights seems to fade away when the victims of government “censorship,” as he calls it, are major corporations rather than individual human beings.

Justice Antonin Scalia’s concurrence provides an even more morbidly amusing exercise in judicial gymnastics. After all, one would think a genuine commitment to applying the original meaning of the Constitution to contemporary cases poses a serious problem to someone who wants to find that the document forbids Congress from banning direct campaign contributions by corporations.

It’s difficult to express how bizarre the framers of the Constitution would have considered such a proposition. Indeed, prior to the middle of the 20th century, the idea that artificial “persons” such as corporations could have constitutional rights was unknown in American law. Scalia is reduced to arguing that he can find no historical evidence that the framers were opposed to the idea of granting free-speech rights to corporations. It’s quite true there is no such evidence. It’s also true there’s no evidence that the framers opposed escalating the Vietnam War, deregulating the airline industry, or breaking up the Beatles.

In other words, it’s hardly surprising that he can find no explicit opposition in 18th-century American political debates to an idea that didn’t occur to anyone until 150 years later.

Finally, Justice Kennedy’s majority opinion is long on what Justice John Paul Stevens’ dissent accurately labels “glittering generalities.” But it is short on any explanation as to how those generalities–such as that speech cannot be regulated on the basis of the identity of the speaker–can be squared with holdings such as Kennedy’s recent vote to allow a school to suspend a student who unfurled a banner advocating “BONG HiTS 4 JESUS.” (The only basis for not considering this unconstitutional censorship is that certain kinds of people, namely students at school events, have fewer free-speech rights than, say, an ordinary citizen in a public park).

All this adds up to yet another example, as if one were needed, that conservative complaints about “judicial activism” are usually nothing more than a code for “judicial outcomes conservatives don’t like.” Citizens United strikes down a major federal statute by taking the extreme step of explicitly overturning the Court’s own precedents, while dismissing a century’s worth of congressional attempts to stop special interests from buying legislation. The argument that the relevant legal materials required the Court to take such a step is flatly incredible. In short, the decision is as pure an example of judicial activism as one could hope to find.

As a consequence, we are left in a situation where Congress can do little more to quell the corrupting influence of money on politics than forbid the explicit bribing of elected officials. Such a triumph of laissez-faire ideology gives a whole new meaning to the phrase “the marketplace of ideas.”

Who are we?

Most Americans over the age of 20 can recall Roger Daughtry’s Daltry (lead singer for The Who) searing voice as he wailed, “Who are you?” Who Are You is also the theme music for the very popular drama CSI. As we look back over the first nine months of Barack Obama’s presidency, I think it is important for us, as Americans, to try to come to grips with who we are.

Thirty years ago, I think the answer was obvious. We were the good guys. We just elected a new president, Ronald Reagan. If we didn’t know that we were the good guys, he was more than happy to tell us. Those other guys, the Russians, they were the bad guys. We were honest, law-abiding citizens. More importantly, there was a collective America. Everyone seemed to want to share the responsibility of making America better. From the janitor pushing a broom to the CEO in an Armani suit, we were all working to make America better.

Something changed. The change probably started in the late ’60s and early ’70s, but it began to be really easily noticed in the late ’80s. We stopped working for us and began working for ourselves. This can best be seen by looking at our major corporations. Our major corporations throughout the ’60s and ’70s were good corporate citizens. It was unheard of at the time for a corporation to move its operation overseas and shut down plants here in the United States. That just wasn’t done. Corporations paid a fair wage. In return, Americans bought American products. Everyone profited.

annual wage growth, by group, 1973-2006 epi

click on image for larger version

Over the next 30 years, CEO wages skyrocketed. Corporate profits ballooned to unimaginable levels. The Dow Jones industrial averages doubled, tripled, quintupled and more in a short period of time (see chart below). The investment crowd made billions of dollars, yet wages stagnated (see chart above). Corporations moved overseas in search of cheaper labor and friendlier environmental laws. Small towns withered on the vine. Huge sections of large cities like Detroit, St. Louis and Baltimore became ghost towns. One income was not good enough to keep the family afloat. Now we needed two incomes. Even with two full-time working parents, household budgets are still strained.

djia 1976-2009

click on image for larger version (From Morningstar)

After the economic collapse which started almost exactly a year ago, there is talk in Washington about new regulations. We also need to talk about who we are. How should our corporations act? Should they act in the best interest of their stockholders? Should these large corporations act in the best interests of America? Sometimes the two interests are not the same. Shouldn’t we expect corporations who hire hundreds of thousands of Americans to act in our best interest? We, as Americans, created an environment which made these corporations successful. Samantha Stevens, the beautifully seductive witch from Bewitched, did not twinkle her nose to get us into this predicament. Instead, hard-working Americans helped these corporations meet and exceed their goals. So, should we expect something in return… something more than just a job?

I expect good corporate citizenship. We all should expect good corporate citizenship. There’s a reason why General Motors, IBM, Dow Chemicals and other Fortune 500 companies did not arise in China, Mexico or Dubai. They arose here in the United States because we created an atmosphere that was friendly to business. Now we need Congress to restore some of the balance that was lost over the last 30 years. Corporations need to be taxed for sending things out of the country and having them processed and then transporting them back here for sale. These taxes need to make it prohibitively expensive to ship jobs out of the United States. Secondly, corporations are not people. Congress needs to pass a law stating that the rights of people should always usurp the rights of corporations (this would seem obvious but is, amazingly, hugely controversial in the Courts). Thirdly, Congress needs to pass health care reform that truly fixes the way healthcare is delivered in the United States. Finally, Congress needs to pass the Employee Free Choice Act. This makes it easier for people to unionize. If we can get Congress to do this once and for all, we then create jobs. We actually create better paying jobs and a better lifestyle for all of us. Only then can I answer the question of who we are. We are the same as we’ve always been, a country of the people, for the people and by the people.

Insurance companies blow a raspberry at the American people

From TP:

health insuranceAfter months of publicly supporting health care reform, insurers are warning Congress that under the Baucus health care bill, “the cumulative increases in the cost of a typical family policy…will be approximately $20,700 more than it would be under the current system.”

The industry has issued a new report arguing that the weak personal responsibility requirement, taxes on health care providers, spending reductions in Medicare and taxes on high-value health plans will increase “the cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets.”

Ezra Klein and Jonathan Cohn dispute the report’s methodology here and here, but it’s worth pointing out that industry’s argument that reform will increase insurance premiums for all Americans is simply untrue. It could also backfire. As Rep. Anthony Weinder (D-NY) explained this morning on MSNBC, “the health insurance lobby today fired the most important salvo in weeks for the public option“:

If you have the health care industry complaining that we’re going to raise costs because of these changes, it is them putting us on notice that we haven’t put enough cost containment in the bill. You know, the health care industry themselves is putting out a whole report saying that. That should be a tell to the Baucus team that you know what, maybe it’s time for them to go back and revisit the public option. In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option, because they have said, as clear as day, left to their own devices, according to their own number crunchers, they’re going to raise rates 111%. [Read more →]

John Mackey of Whole Foods and the Republicanism of healthcare reform

If John Mackey came up to me in the grocery store, I wouldn’t know who he was. He wrote an op-ed in the Wall Street Journal entitled The Whole Food’s Alternative to ObamaCare. Why? Why is the CEO of a grocery store chain allowed to take up the opinion pages of the prestigious Wall Street Journal on a topic about which he has no expertise?

This article could have been penned by Michael Steele, Newt Gingrich, Dick Armey or Senator Charles Grassley. It is a generic Republican healthcare article which hits all the talking points. People want choice. We should have health savings accounts and high deductible insurance plans (more choice). We need to let the marketplace work — decrease regulation. We need to allow health insurance companies to freely roam our country. There should be no mandates on what insurance companies can cover and can’t cover. We need to make costs transparent so that the marketplace will work better. Reform Medicare. Allow tax breaks so people can donate money to help those who have no insurance. Tax cuts, decrease regulation and cuts to government spending. The Republican trifecta.

One of the things that I find so infuriating is that a CEO is allowed to pen an article in the Wall Street Journal and has nothing new to say. He is regurgitating the same old talking points. He sprinkles on a couple of references to what “his employees want” and he gets time in the Wall Street Journal.

It has only been since Republicans have been crashing these town halls that we’ve heard anything about people who want healthcare choice. I think this is a complete myth. People want to go to their own doctor. People want to be able to choose their own hospital. People want to be covered. I don’t think Americans want any more choices. We don’t want to choose between this complicated healthcare insurance plan and that complicated healthcare insurance plan. Look, I’m a trauma surgeon and I have no idea when I sit down and look at my own health insurance plan that is provided by the hospital. I find these plans unintelligible. All I want to know is, when I go to the emergency room and when I go to the doctor, will that be covered. I want a plan that covers me (and my family) going to my doctor and the emergency room. That’s it.

I think health savings plans are crazy. If you want to save money, put your money in some sort of financial institution (assuming that it is solvent).

Repealing state laws will do the same thing for insurance companies that it did for the banks. It’ll be the wild wild West once again. Small insurance companies will be crushed. There will be insurance mergers. We will end up with a handful of insurance companies — wait a minute, that’s what we have right now. Basically, the big gets bigger. It doesn’t mean that they will offer lower premiums. It means that the healthcare executives will be flying nicer jets.

Why are employers in the healthcare business anyway? Why don’t we take them out of the healthcare business and let these employers get back to managing their business.

I think that tort reform needs to be enacted but we live in a society that is run by lawyers. 90% of the folks on Capitol Hill are lawyers. I think it would be very difficult to get meaningful tort reform especially in our polarized environment.

I wonder if I write an essay on grocery stores will the Wall Street Journal except it?

Goldman Rakes in $3.4 Billion for 2nd Quarter

Okay, someone needs to help me with this. Just nine months ago, Goldman Sachs, along with other investment banks on Wall Street, was sucking wind. They were about to go belly up. We, the American people, ponied up billions of dollars. So how can you go from completely destitute one minute and so flush with cash the next minute that if he spread the money around evenly between all employees it would make over $700,000 apiece. This kind of craziness can only happen on Wall Street. There has to be something really wrong with our system if this is possible. Regular Americans continue to struggle while millionaires don’t even have to worry about selling their yacht. It is kind of sickening.

Visit msnbc.com for Breaking News, World News, and News about the Economy

From NYT:
Even on Wall Street, the land of six- and seven-figure incomes, jaws dropped at the news on Tuesday: After all that federal aid, a resurgent Goldman Sachs is on course to dole out bonuses that could rival the record paydays of the heady bull-market years.

In 2007, chief executive Lloyd C. Blankfein, collected one of the biggest bonuses in corporate history.

Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced that it had earmarked $11.4 billion so far this year to compensate its workers.

At that rate, Goldman employees could, on average, earn roughly $770,000 each this year — or nearly what they did at the height of the boom.

Senior Goldman executives and bankers would be paid considerably more. Only three years ago, Goldman paid more than 50 employees above $20 million each. In 2007, its chief executive, Lloyd C. Blankfein, collected one of the biggest bonuses in corporate history. The latest headline results — $3.44 billion in profits — were powered by earnings from the bank’s secretive trading operations and exceeded even the most optimistic predictions. (more… )

Madoff Finally Get What He Deserves (Update with Video added)

Today, U.S. District Judge Denny Chin sentenced the heartless thief to a maximum of 150 years in prison for one of the largest Ponzi Schemes committed by a single person.

For years, Benard Madoff has been basically robbing his clients blind and leading them to believe that their life investments were being well taken care of. NOT! This man obviously has no soul and felt no remorse for swindling people out of their money. What I would like to know is, was this man given some type of psychological evaluation, because I don’t believe anyone in their right mind would steal from people the way this man did and not think twice about it.

The 71 year old has been running this Ponzi scheme since the early 90’s and fabricated gains of approximately $65 billion. Madoff ran his scheme so smoothly that he was able to convince celebrities such as Steven Spielberg, Kevin Bacon, and Sandy Koufax to entrust him with their money and produced double digit returns for them.

60 Minutes did a great story on the Whistle Blower, Harry Markopolos, and Bernie Madoff several month ago. (Notice how easy it was to figure out that Madoff was a fraud, yet the SEC couldn’t figure this out for years.) Watch the video:

Watch CBS Videos Online

For years Madoff seemed to have it all from a $7 million Manhattan apartment, $11 million estate in Palm Beach, Fla., and a $4 million home in Montauk just to name a FEW things until he decided to reveal his scheme to his two sons last December, telling them it was all a big lie.
I want to know why this man felt like he had the right to take other people’s money and spend it on a lavish lifestyle for him and his wife who supposedly knew nothing of her husband’s heinous crime.

Then, I wonder how his sons must have felt after learning of their father’s scheme. That has to be hard; discovering one of your parents is involved in such a ruthless, cold hearted, criminal act. I must say one thing about Madoff, when asked if he had anything to say, he had the decency to stand and face his victims and apologize. Wow, that really helps them out of their financial woes caused by him.

And one other thing, Madoff had the nerve to request leniency however that request was denied.

How Freedom Was Lost

What a great post by Devilstower. S/he did a great job getting information together.  Three disasters gave us regulations, regulations that the conservatives hate. This is long, but more than worth a read.

From DK:

On Halloween night, 1948, a fog rolled in to blanket the town of Donora, Pennsylvania. What came from that cloud wasn’t the ghosts of vengeful pirates, or horror movie zombies. It was worse.

This wasn’t the first time the industrial town of 13,000 had been socked in by a brown, pollution tinged smog. But this time the air had a peculiar, acrid smell. Those who breathed the fog felt as if they were breathing fire. It scorched their eyes, their throat, their lungs. Still, Donora was a mill town. Workers squinted against the bitter air and went on to their jobs. That night, as people were walking back to their houses, some of them began to die.

Soon doctors’ offices were overrun and the hospital was filled with the sick and the dying. The fog held on the next day. And the next. A local hotel was pressed into service as an extension to the hospital, with volunteers serving as nurses. As bodies piled up at local funeral homes, the ground floor of that hotel became a makeshift morgue. Within five days, twenty people had died. Hundreds more were seriously injured with damage that would shorten their lives or affect their ability to work. A decade later, local papers still told the story of lives cut short.

The villain in Donora was the a toxic stew spit out by a local zinc refinery. It wasn’t the first time the plant’s fumes had turned the air around the town toxic, but this time a temperature inversion capped the smog. In the midst of the crisis, suspicion about the cause brought town officials to the zinc works, where they asked that the plant’s operations be reduced until the weather changed. The plant operators refused. After five days, the inversion layer broke and the brown fog blew away. Eleven of those who died did so on that final day. A local doctor estimated that if the weather had held another day, the death toll would have been in the hundreds, rather than the tens.

That Sunday, as the sky broke and rains came, the zinc works finally agreed to reduce operations. They went back to normal the next day.

***

buffalo-creek-disasterFebruary 1972 was cold and rainy in West Virginia. Toward the end of the month, the last of winter’s wet snows melted down and for days rains fell almost continuously. The miners and shopkeepers around the little town of Saunders went to their jobs with rain sluicing from their hats, and the children splashed home on muddy streets. By the night of the 25th, the creek that ran alongside the town was running high and fast.

At 8AM on the morning of the 26th, folks in Saunders were seeing their kids off to school, making their way to work, and frowning at another morning of rain. They had only a moment to feel the rumble under their feet and hear the screaming roar that echoed through the town. Then a 20 foot high wall of midnight black water swept through the narrow valley. Buildings were crushed by the rushing wave as if they had be struck by God’s own hammer. Trees didn’t have time to be uprooted, they were simply snapped off at the ground. The water caromed from one side of the valley to the other and back again, sweeping down homes and gouging the valley walls. People were plucked from the streets before they could make sense of the thunderous sound. Others went tumbling as their homes were torn from around them. Cars, homes, sections of rail track, the shattered remains of stores, schools, and bodies — they all joined the wall as it roared downstream into the town of Pardee. And Lorado. And Craneco. And Stowe, Crites, Latrobe, Robinette, Amherstdale, Becco, Fanco, Braeholm, Accoville, Crown, and Kistler.

For minutes after the wall had passed, the cold February rain fell on a world that was silent except for the sound of water. No birds singing. No dogs barking. No people talking. There were only piles of debris and cold gray mud.

In a matter of minutes 125 were dead and 1,100 injured. 4,000 more were left homeless.

That wall of water had originated from a coal slurry dam, a rude impoundment of earth and stone built high in the valley of Buffalo Creek. On the night before, workers at the mine responsible for the dam had noticed that water was straining the limits of the impoundment, and the dam was sagging under the force. Officials of the company were notified. They sent no warning to the people below. Deputy sheriffs from the county came up the hill only hours before the dam burst, to ask if they should evacuate the towns. They were sent away.

***

It was almost the end of the work day for the young workers at the corner of Greene Street and Washington Place in New York City on March 26, 1911. Spring had been cool that year, and those getting ready to leave slid into coats and put on their hats. Most of the workers employed by the firm of Harris & Blanck worked a different shift and went home at noon, but there were still six hundred workers — 500 women and 100 men — packed into the top three floors of the factory. Most of them were immigrants from Italy, Germany, or Eastern Europe. The majority of them were under the age of 16. For ten hours or more a day they bent over tightly packed rows of sewing machines and worked with their fingers to make the factory’s signature product — shirtwaists. Their shift ended at 4:45.

At 4:40, someone noticed the first touch of smoke.

Within half an hour, flames consumed the top three floors of the “fire proof” building. Many of the workers on the eighth floor were able to escape down the steps, so were some of those working on nine. Students next door at New York University saw what was happening and helped to save hundreds who reached the roof. Then the flames cut off that route. Soon those that remained were huddled next to the windows of those top three floors. As the flames closed in on them, one after another, they jumped.

Along the sidewalks of Broadway, thousands cried and screamed in horror as the scorched bodies of women — girls, really — tore through inadequate fire safety nets, smashed though glass awnings, and thudded into the street. Sobbing children with their clothing and hair on fire leaped for safety ladders that stopped two stories below their windows.

Fueled by miles of hanging fabric, wooden tables, and machine oil, the fire that started five minutes before the end of the shift burned out almost before firemen could get inside. It left the building intact, the walls only scorched. The bodies left behind were barely recognizable as human. 141 people died, hundreds more were injured.

***

And that’s how we lost our freedom. Not our freedom of speech or any of our individual rights to assemble or worship as we please, to live where we want. That’s where we lost the freedom of the marketplace, the freedom of the Ayn Randian dream. Actually, it goes even further back than that. When the nation was formed, those founding fathers made the “the American compromise,” recognizing that the marketplace should advance under government supervision. This has always been a place where the government has stepped in to stop excess and address needs. And yes, conservatives have been whining from day one. [Read more →]

AIG – the real scandal

I have talked about AIG before and the stupidity of Credit Default Swaps.  Former Secretary of Labor Robert Reich has a few words (I have added links and emphasis).

The real scandal of AIG isn’t just that American taxpayers have so far committed $170 billion to the giant insurer because it is thought to be too big to fail — the most money ever funneled to a single company by a government since the dawn of capitalism — nor even that AIG’s notoriously failing executives, at the very unit responsible for the catastrophic credit-default swaps at the very center of the debacle, are planning to give themselves over $100 million in bonuses. The scandal is that even at this late date, even in a new administration dedicated to doing it all differently, Americans still have so little say over what is happening with our money.

The administration is said to have been outraged when it heard of the bonus plan last week. Apparently Secretary of the Treasury Tim Geithner told AIG’s chairman, Edward Liddy (who was installed at the insistence of the Treasury, in the first place) that the bonuses should not be paid. But it turns out that most will be paid anyway, because, according to AIG, the firm is legally obligated to pay them. The bonuses are part of employee contracts negotiated before the bailouts. And, in any event, Liddy explained, AIG needs to be able to retain talent.

AIG’s arguments are absurd on their face. Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid (they would have had a lower priority under bankruptcy law that AIG’s debts to other creditors); indeed, AIG’s executives would have long ago been on the street. And any mention of the word “talent” in the same sentence as “AIG” or “credit default swaps” would be laughable if laughing weren’t already so expensive.

This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that’s “too big to fail” and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market. To whom should they be accountable? As long as taxpayers effectively own a large portion of them, they should be accountable to the government.

But if our very own Secretary of the Treasury doesn’t even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG’s executives — using $170 billion of our money, so far — are accountable to no one.

More on Madoff

I have a problem with some criminals. Others, not so much. If you rip off Halliburton or KBR for a couple of million, I’m probably going to throw you a party. On the other hand, when you rip off the elderly and take their savings, there isn’t a punishment bad enough. Under the jailhouse? Nope. Electrocution at one volt per day? Too easy. Bernie Madoff is in this category (of course he is innocent until proven guilty).

60 Minutes did a great story on the Whistle Blower, Harry Markopolos, and Bernie Madoff this week. Watch the video:

Watch CBS Videos Online

From AP:

Bernard Madoff has agreed to give up the rights to his disgraced investment business and his company’s prized artwork and entertainment tickets, as an official for an organization providing relief to investors said Tuesday that some checks may be in the mail this month.

The trustee overseeing the liquidation of Madoff’s business said the former money manager was surrendering ownership rights to his business, Bernard L. Madoff Investment Securities LLC, along with the company’s artwork and entertainment tickets. The trustee, Irving Picard, did not specify the value of the property or say what kinds of tickets and artwork Madoff possessed.

The ultimate goal is to put some of Madoff’s remaining assets in the hands of investors who lost their life savings amid the scandal, and there are growing signs that some of them could see relief in coming weeks. (more… )

A little snow and we are stuck in a nightmare of deregulation (updated)

I’m sitting at the Asheville Airport, waiting for my 9:45 am flight to leave. Currently the time is 11:15 am. My gripe isn’t that snow has caused air traffic on the East Coast to grind to a halt. Instead, my problem is the lack of information. I tried most of the night to reschedule my Delta flight but they don’t answer email in a timely fashion. All of their phone lines were busy, including their international line (yep, I tried that too). In order to avoid this mess, I started called Confusion Airlines (in this case Delta) Sunday night at 9 pm.  I called multiple times… 9:00, 9:30, 10:00 and 10:30 pm. I woke up at two in the morning and called again at four. I called at 6:30 am, 7 am and again before leaving the house around 8 am. Busy signal every time.

So, with little information, I went to the airport, only to be met by a mob at the ticket counter. There is no real line… just a mob and no one has any information. Two earlier flights have been canceled. The flight after mine has also been canceled. Folks are upset. The only thing that people need is a little information and I don’t think you can get today. “All passengers for flight xyz line up over here… ” Something. It’d just be crazy.

This is why we need government regulation. We need someone to set standards.

Sleeping at the Atlanta airport

Update: I’m now safely in Dallas. Getting through the maze of confusion and obstruction in Atlanta was almost more difficult than getting through medical school. In medical school, the terrain was rough but the path was clear. Getting from Atlanta, where I had missed my flight because we left Asheville three hours late, to Dallas was anything but clear. As soon as we landed there were multiple options presented by the flight attendant. My first question was, as we live in 2009, why doesn’t she, the flight attendant, have all of the updated information? If she starts with “My information is two hours old,” then I don’t need to hear anything that she has to say. Most people checked their flight information on a PDA/cellphone/laptop just prior to boarding. Her information is an hour older than mine. Why?

We land in Atlanta and the airport is packed. It looks like the week before Christmas. All of the restaurants are filled to, or beyond, capacity. The stores are packed. Every official airline agent has a line of 10-15 passengers in front of him/her and everyone is talking at once (because no one is getting decent answers). In this chaos, we are supposed to either go to the gate where the next flight for Dallas-Fort Worth is taking off or go to the nearest ticket counter and ask for help. Now I know that airline travel has had a rough time since 9-11. I thought that customer service would be something that the airlines would be stressing. Why wasn’t there a fleet of airline folks with a laptop on some type of rolling stand waiting for these passengers? Then everyone could get up-to-date information in a short period of time. Sending passengers on some type of wild goose chase is simply wrong.

So we trek through the Atlanta airport until we get to one of these ticket counters. A woman takes my ticket for the flight that I have just missed and passes it under a scanner. A new voucher pops out of the ticket thingy. Sweet. My next flight leaves tomorrow at 4:30 pm. What? My wife’s ticket gets scanned and she is on the same 4:30 pm flight but 20 rows behind where I’m sitting. What? Come on. It is 1 pm EST in Atlanta and I have just been handed a voucher for a flight 27 hours from now. I’m traveling from Atlanta to Dallas. There are tons of flights per day. What am I (we) supposed to do with this? The woman representing Confusion Airlines comforts me and my wife by telling us at least we have a flight. What the feezy (slang word used in some circles represent a four letter word that starts with F)? This is where I want to have superpowers. I want to turn into the Hulk and start smashing things. I didn’t turn into a green monster, nor did I tell the lady that she was not being that comforting. In times past, airlines used to bend over backwards to help you. They worked hard to find a flight and would EVEN CALL other airlines for you. Not now. Dude, you are on your own. I was told that I could get a voucher for a hotel that wasn’t the Ritz and a voucher for a meal that wasn’t at Atlanta’s famed City Grill.

Now I get to stand in line, again, to talk to an agent. These poor agents have been dealing with unhappy travelers for hours. No one who comes to see them is happy. The agent was humorless (or maybe my jokes were awful) but she was able to put me and my wife on a flight leaving in an hour. We were flying standby but it looked very promising.

I type all of this to say THIS is what we need government for: to make our lives a little easier. I don’t think that the government needs to tell industry how to fly airplanes but government should say that this isn’t any way to treat a paying customer.

A few suggestions:

  1. Accurate up-to-the-minute information should be available online.
  2. More phone lines must be opened at times like these to accommodate the surge of information for poor, anxiety-rich customers.
  3. In-flight attendants should have up-to-the-minute information at the time of take-off and landing.
  4. If there are flight delays/cancellations, for whatever reason, a team of agents should meet every plane. They should have timely information and should be able to rebook passengers immediately. They should work in the customers’ best interest and not the airlines’.
  5. Airlines should start working together again in the interest of the customer.

RSU: Bankers

It has been a long time since I have posted something from Jackie and Jonathan’s Red State Update. These guys are hilarilous. Today they’re talking about bankers and paying out bonuses rewards.

Tone Deaf Carly

Former CEO of HP and McCain adviser Carly Fiorina types a commentary for CNN. She argues against the government placing a $500,000 cap on executive salaries. Why? Because she is cut from the same cloth as those Wall Street crooks. In February of 1999 HP was trading at $25.93. Ms. Fiorina took the helm in 1999.  When she was booted from the company at the of 2004, the stock was trading at $19. So during one of the greatest stock market rallies in history, HP was moving backward. Yet she got $41 million as she was kicked out of the door. Sounds like a Wall Street CEO to me.

More on Carly Fiorina’s rough time at HP.

Obama begins to play offense on the stimulus

Barack Obama has moved one step closer to openly calling out the stubborn and sometimes pigheaded Republicans. Barack Obama clearly laid out why his plan should work. Almost more importantly, he clearly stated that tax cuts and tax cuts alone will not work. These are, indeed, the failed policies of the Bush administration. Tax cuts will not invigorate our economy.

In November and December of last year we lost over a million jobs. Think about that. One million people out of work in two months. We are in trouble. We need to take bold action and Republicans are talking about tax cuts. Republicans are also nitpicking about small items that add up to less than 1% of the total overall stimulus package. Because, they disagree with 1% of the package they’ve decided not to vote for it. This is simply crazy. I would go so far as to say that it is reckless.

Obama did take an opportunity this morning to call out corporate executives.  If corporations are going to take major funding from the US taxpayers and they must agree to In their salaries at $500,000. That seems reasonable.

Watch Video:

From WaPo:

President Obama mounted a staunch defense today of the economic stimulus plan now before Congress, chiding critics who want it to focus primarily on tax cuts and asserting that Americans rejected their theories in the November elections.

In an appearance at the White House with Treasury Secretary Timothy F. Geithner, Obama urged Congress to act quickly on the stimulus package, which has come under attack from Senate Republicans and some Democrats alarmed by its roughly $900 billion price tag.

“We know that even if we do everything we should, this crisis was years in the making, and it will take more than weeks or months to turn things around,” Obama said. “But make no mistake: A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred.” (more… )