Consequences of Things as Usual

I will be publishing only on Monday for the next couple of months. Corporate Greed, Excessive CEO Pay, and Corporate Loopholes seriously affect Joe Citizen. The world is changing as Washington DC and Wall Street slowly recognize that “Houston, we have a problem!” False prophets arise in the darkness proclaiming, “Lower Interest Rates, Bailout the Financial institutions from their ills and all will be well!”

The United States is suffering from Structural Dislocations. Tax Rebates, Lower Fed Funds Rates and other stimulus packages will do little more than slow the decline while boosting up foreign economies supplying the US. All this will come at the expense of our children who will be left holding the bag. The US government is acting like the homeowner who bought too much house for their earning capacity and then refinanced every year leveraging up each time. At a certain point the bubble bursts and the faux earnings come out of the system leaving the homeowner upside down in his house. This is where we are with the US economy. We continue to spend our nation’s equity without increasing our productive capabilities. The result is always bad.

In some areas the decline is breathtaking while other areas still do not show the perilous times ahead of us. When the US dollar traded at 1.44 Euro I said it would go to 1.75 Euro. I believed that to happen over the next year not the next 30 days. Continuing Unemployment Claims are at historically high levels as the Labor Department says that we will not see the 20% unemployment of the 1930s. I suggest we are well past that level when calculated with the same formula used in the 1930s not the faux calculations imparted after the beginning of Reaganomics.

Eliot Spitzer has been shown for what he is: a corrupt public servant that used his office for his own personal gain. Corruption is the only result that can come from collusion between unscrupulous business executives and lying politicians.

Bear Stearns, the financial institution, has to be bailed out by JP Morgan. JP Morgan will only do the deal if the Federal Reserve guarantees their investment. Yes your tax dollars are going to buy out Bear Stearns. All this while the government is trying to unilaterally reduce Social Security Benefits for which you paid your entire working life. This is just the latest example of why legislation must be passed to limit CEO pay. The CEO of Bear Stearns has received more compensation in the last five years than the entire net worth of the company!

Our politicians continue to squawk about the war in IRAQ, tax cuts, buying entire neighborhoods, relaxing regulations to allow companies to employ more unethical and illegal practices instead of looking at the real problem: The United States no longer produces a reasonable portion of its internal consumption.

Washington must go cold turkey. They must break all ties with business and lobbies. They must take a hard look at our economy, our culture, and our nation and create a framework in which hard work is valued and entrepreneurs can actually create businesses and not Ponzy Schemes. They must allow Americans to have hope for a better tomorrow for themselves and their children.

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Why are CEOs portrayed as Corrupt and Greedy?

In today’s literary world CEOs are rarely portrayed as compassionate individuals. The lobbies for corporate America and the news agencies pandering to big business often defend CEOs as morally and ethically sound individuals. They ask, “Why are CEOs always portrayed as bad people?” To the average individual this question seems reasonable. Most reasonable people will agree that things are never black and white. Not all Muslims want to kill Americans and not all CEOs would sell their mother’s kidneys to buy a better cigar.

You are now thinking that I am exaggerating. No one would sell both kidneys for a cigar. Maybe a liver for a new Mercedes would be a better analogy.

CEOs are portrayed as greedy, ethically challenged, snakes because they are. These individuals have forgotten or never learned the concepts of honor, word, or compassion. They are the equivalent of slave traders. They do not care about the consequences of their actions as long as they make a buck. The primary justification is, “If I do not do this someone else will.” This is not just an opinion. I always view the world through actions. Words mean little to me. If a tree bears apples, it is an apple tree. The CEO can say all he wants that it is a pear tree. He can run huge marketing campaigns and even show his passion for the apple bearing pear trees but it is still an apple tree. This strong characterization is evidenced by corporate America’s actions.

Liz Moyer with Tatyana Shumsky of Forbes.com writes:

Bank of America told thousands of its cardholders in recent weeks--even those with good payment histories--that they faced a rate hike from 9% to as high as 28% if they didn't pay off their balances at the old rate and stop using their cards. The bank, the largest credit card issuer, since its 2006 acquisition of MBNA, says it's all part of its "periodic" review of customer credit risk.
...
Bank of America (nyse: BAC ) gives card holders the chance to opt out of the higher rate by paying the account off, but such a request must be made in writing.

This is wrong. This is the reason why we need greater regulation of the financial sector. If Bank of America wants to change its rates on a revolving account it can do this but it cannot change the contractual rate for previous purchases. It also cannot require those in financial difficulty to pay off the entire amount to avoid the higher rate. For the rich, paying off the amount will not be difficult. For the family, massacred by the disastrous policies of Reaganomics, paying of the amount is just not an option. This means that they will now pay usurious interest rates even though they have been regular in their contractual agreement. This operation, to be followed by all of the institutions, will create a new group of slaves in bondage to the financial institutions.

Most of these debtors are good, hardworking people. Whether or not they have met their contractual obligations is not important. They will find themselves in the position to work indefinitely for the financial institutions or declare bankruptcy. We should not be surprised that the new bankruptcy laws will not allow credit card debt to be written off entirely.

These immoral and unethical actions are the fruits by which we can measure the moral fortitude of our business leaders. We cannot allow these individuals to hide behind corporate structures. It seems that today the outrageous is widely accepted. We raise independent thinkers and those who stand out to the highest pedestals. Raising the mignons of corporate America to star status undermines our country and destroys the hope that is the American Dream. These individuals must be set apart and publicly ostracized. No matter how much money these corporate elites have or command they must be put in the streets and locked in stocks and pillory so that those whose lives are forever maimed by their actions can show their displeasure. Perhaps after a thwacking CEOs would learn why the good of the many is more important than the needs of the few.

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Whining Babies do not make good FED Policy

I do not agree with the stance to reduce interest rates taken by the FED. I think they should have stayed pat. I do understand that with the current administration so close to corporate America they had to give something to the whining crybabies on CNBC. For some reason they associate Wall Street’s gains with Main Street economy. Unfortunately this is not true otherwise I would not have anything to write about on my blog. Wall Street is still at historical highs while the economy is in the tank due to the disastrous policies of Reaganomics forced on the American workers for the last 30 years.

I am impressed. The FED did not do exactly what the financial institutions wanted. The FED did cut rates in the face of skyrocketing inflation but it was not enough. The market sold off. We should remember that the market is within 5% of all time high levels. The problem is not the sell off. The problem is that these bubbleheads have euphoric predictions for 2007. If the market does not meet their forecasts they lose credibility. Poor babies!

The FED put together a worldwide program to increase liquidity to solve a problem created by bad speculative investments made by the greedy financial institutions. How else could they justify paying some Knumbnutt CEO $200 million? The FEDs program primarily creates a temporary bailout by worldwide governments to allow the financial institutions time to get their books in order and buy back this crap.

Wall Street is in an uproar! “THEY KNOW NOTHING!” is shouted by monkeys who think the FED’s job is to protect financial institutions from their bad investments. Traders across the board are calling for Bernanke to resign. How dare he not do exactly what they wanted? The financial institutions have criticized the timing of the announcements. This clearly indicated that the Fat Cats in Wall Street think that the FED is at their beckon call.

I think the FED was too lax and should not have eased. I have called for the elimination of the FED. I have done this because I do not think that the working Joe should be guaranteeing Wall Street’s $100 million dollar salaries. With this premise, if the FED must remain, we need a Bernanke who can think of ways to save Wall Street’s buttes without destroying the dollar and sending inflation to 1500% a year.

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Why Wall Street CEOs Earn Multimillion $ Salaries!

It should be a reasonable assumption that no single individual can bring the same value as what can be produced by 10,000 other people. This can be supported by the fact the great pyramids, the great wall and other truly major accomplishments were made by people who would have a hard time finding a dishwasher’s position here in the US today. So what makes some institutional investors believe that one man is worth more than 10,000, and in some cases 100,000, employees?

This week the FED has reiterated numerous times that it intends to bailout financial institutions with a move much stronger than the economically disastrous move it made it August. They ingenuously stated that the August move did not resolve the problem. It is comforting that our government employs individuals so astute. The new, and improved, bailout will be sold to the public as saving the poor homeowner.

This bailout will do the same as the last. The dollar will fall, inflation will exponentially explode, and the stock market, after a brief rally will tank again. All of this will occur and homeowners will still have the same problems as today. They will lose their homes. The banks rally on these proposed plans because the government will keep them from losing money on the foreclosures. Creating excess liquidity and low interest rates will create a new bubble in some other smoke and mirrors sector like Internet or Housing.

The FED knows it cannot fix the excesses created by institutional speculators who throw caution to the wind while playing the subprime roulette. The members of the FED have said as much. So why are members of the FED willing to throw away distinguished careers to be remembered in history as facilitators of the greatest depression in the US economy. A depression of this magnitude would most likely creep into the rest of the world and could trigger a deflationary period similar to the Dark Ages.

This is where the Wall Street CEO makes his pay. Only the best are employed in this activity. They must woo the regulator and convince the government that it is in the best interest of all that the interests of financial institutions are greater than the good of the country. He must engage his imagination and supply plausible mumbo jumbo talking points to make the pill edible. It takes a unique individual to play this role. Most Americans would puke their dinner every night as they consider the repercussions of their actions. Simply put, a normal human being could not live with himself. These superhuman CEOs are able to sleep at night knowing that while people are dying because we cannot afford health insurance, families are homeless and children have no hope for the future they will use public funds to enrich the coffers of financial institutions.

The result is simple. The losses from the speculative actions by financial institutions would cost the bottom line 1.5 trillion dollars. Through these gods of Wall Street the losses will be 1 or 2 billion. The 200 million dollar salary of the CEO is a cheap price to pay for the governmental bailout they can provide. Another example of Reaganomics at its best: A government of the corporations, by the corporations and for the corporations.

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Reaganomics – A Lesson in short-sighted Stupidity

Most economists today will tout the values of Free Trade and open markets. This is the equivalent of Federal Reserve Chairman Ben Bernanke flooding the financial markets with additional liquidity and dropping interests rates to fight inflation. Oh well, at one time the smartest people in the room believed the world was flat. Another day, another recall, is the morning wake-up call. There are so many, across all product lines and quality levels that it would take less space and be more efficient to list the products that are not being recalled. The sad thing is that even with all of this attention, the products available in stores for the holiday season will be the same products, the recalls for these versions will occur after the retail stores have made their end of year bucks. “What do you want to do? Recalling all these products would send us into a great depression and cost jobs.”

It is somewhat interesting that the same people trying to make it easier to send jobs offshore, by decreasing our controls and regulations, are justifying the sale of dangerous goods to children to save jobs.

Some will say that CEOs do not knowingly put the public at risk. These are good people, “right… and the Yankees are going to win the World Series in 2007.” Turns out that the management of Mattel, the same guys who prostrated themselves in front of Congress, indicating how they took control of the situation as soon as they were aware, and this would never happen again, knew about the lead and design defaults in their toys over two years ago. They began programmed sale of stock and when a child died they increased their sales to the maximum allowed by law. Oh well, so much for good people in corporate America.

It is not necessary to have these scandals to know that these guys are all corrupt. A good CEO will not take a $ multi-million salary while any of his employees do not make enough money to live on. A good CEO will not do it because it is bad business. A company that has this type of structure will go bankrupt. They just have not received the papers yet.

No matter what you hear about wages, companies shift production offshore because they can produce a lower quality product with lower raw goods costs. These costs most importantly are products that are regulated in the US, paint and lead is one example, DDT and fruit is another. Did you know that 100% of Apple Juice in the US comes from China and that pesticide levels in the juice are higher than US law allows?

Free trade can be a good thing but it must be controlled. The country that imports goods must verify that the imported goods meet all existing quality and regulatory legislation. This is not the case with our modern society. If it is made in China, Korea, Taiwan or anywhere else, where “labor costs are inferior” what companies are really saying is that they do not care about the quality of the products they are selling. They are saying that their bonuses and bottom line are more important than the life of your children.

The current US culture is one of extremes. There is no excuse for the actions of unscrupulous managers and boards of directors. We should not be amazed that corporate profits are more important than principles and human life. How many of our stalwart companies have operations or investments in countries hostile, or even at war, with the US? We serve our country, our children die to protect it and these companies actively support hostile regimes in the name of “the bottom line.”

Reaganomics has not made America stronger. It has eliminated quality producers and artisans. Reaganomics has brought our country to the brink of disaster. We only produce 18% of the goods necessary to keep the economy going. The FDA estimates that over 50% of medicines sold in the US are made in China. Proponents of the unregulated new world will say that Americans must adapt to the smoke and mirrors “service economy”. They contend that any manual labor is something that Americans should not do. Hard work, quality and a fair day’s work for a fair day’s pay is no longer valued.

Free trade can be a valuable tool in increasing the wealth of all nations but it must not be left to corrupt corporate managers to decide how and when. First we must guarantee that products entering the US meet US standards both in the materials and the way things are produced.


Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Walmart Fights in the court of Consumer Opinion

I have long sustained that business models based on the cheapest price are failed models. Walmart has long touted this model although it was not part of the original model. Walmart was created with a model based on offering local products at a reasonable price. Their differentiating factor was that they would eliminate the middleman and allow local producers and farmers to sell their products directly in the store without having to share their earnings with distributors and wholesalers. This model allowed the producer and Walmart to have greater margins. Somewhere along the path to becoming the largest retailer in the world, most likely when Wall Street became involved, Walmart modified its business model and went for low prices at any cost.

Walmart began expanding and decided that its business was to offer the lowest price. They forgot the premise of their success, quality products at a reasonable price by eliminating middleman and transportation costs. They embraced the traditional distribution and wholesale model and decided that the low price was their model. This was the beginning of the end of Walmart. As soon as Walmart started down this road they became the Kmart, Sears, and so many other low cost retailer who first grow and then die.

Since Walmart now had the same cost structure as other retailers they had to cut costs from other areas. They went in two directions. They massacred their employee compensation and started buying products produced in other parts of the world. The result was the complete abandonment of the original successful business model. Since quality and price at the point of production are relatively stable the only way to compensate for higher distribution and transportation costs was to reduce quality. Today, over 70% of products in Walmart come from Chinese producers. The shipping costs now account for almost 30% of the price of anything found on the shelves. Walmart sales are now stagnating. Since they no longer are quality products at a reasonable price they have no loyalty from their customers, just like what happened in Kmart with the blue light special.

Walmart realizes they have a problem. In the last year, under vicious attacks from employees and labor advocates, they began paying their employees better. In fact the typical employee, in any geographical area, makes 10% more money than a Target employee. They have eliminated their slogan about low prices at all costs. They have also begun an institutional advertising campaign to tell the US market how they are involved in giving their employees health insurance. These are not things a company does because they have had a prophetic vision. They have finally realized the fallacy of the low cost model. They have seen the light; there is always someone else who can find a way to sell your product at a lower price.

Walmart attempted to go after the high end market but failed. It is almost impossible for the crappy low price leader to sell into the quality conscious segment. They have no credibility. If Walmart wants to survive it needs to go back to the original model. Eliminate shipping costs, pay their employees a reasonable amount and sell a quality product at a reasonable price. This is the only model that will be successful. It should not be difficult for Walmart to do this; it is part of their DNA. They will have to go against the grain but their future depends on it. If they do not there will always be an Eddie Lambert out there looking to pick up retail locations.

Tags: Walmart Politics Recession Corporate America Economy Reaganomics

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Parents should not look to the government to protect their children from unsafe toys

The war wages on and the US government surrenders to the Chinese. The current administration has reached an agreement with the Chinese to eliminate the recalls of Chinese goods. Did the Chinese agree to implement laws and penalties to enforce US product safety laws? No. The US just eliminated our capability to check the incoming goods. WTF?

We must not get upset with the Chinese. They are doing their own best interest. They do not care if their population dies from unsafe products or that child labor is rampant. They have too many people. You can go to jail if you have more than one child. Just to put this into perspective. A Chinese couple will abandon in an orphanage or kill a female child born because male children have greater value. Why would you think they are interested in providing safe products for American children.

Most Americans will say, “you cannot buy toys without purchasing Chinese products.” Translated, “Who cares if my child will suffer brain damage from lead paint. They want this toy now.” We cannot expect our government to protect us. They are all in bed with Corporate America. Corporate America does not give a rat’s ass about the individual. Just look at their $100 million salaries while the employees are making barely above minimum wage and have no insurance.

If you care about your children it is your responsibility to purchase products that are safe. You cannot say I did not know. You cannot shift the blame later to someone else. If you choose to purchase a product from China, you know that it is not made to US standards. That includes safety. I am not saying that someone should boycott products. I am saying you are making a choice to compromise your child’s health to save a few bucks. Do what you like. If our economy continues changing its structure we will need an ever greater number of brain dead youth to fill the menial jobs that will remain.

Tags: Government Politics Recession Corporate America Finance China Economy Reaganomics

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Elections 2008 - Another Non Event

The 2008 election season is about to begin. The American people are asking for change resulting in one of the largest field of candidates in decades. The problem is that they are simply variations of the same old, same old. Barak Obama, who was seen early as new blood. Sold out to corporate America and the amnesty groups. Oh well, money is thicker than blood…

The month of August and the first days of September have brought to light some of the downside of Cowboy Capitalism and Reaganomics. The financial markets have taken a “negative tone” as they were surprised that the economy sucks, that people are making less than before, and generally WE THE PEOPLE are concerned about our future. Well boys, wake up and smell the manure. Obviously different news stations are giving a different spin, according to which party they have decided to support, as are all the news anchors. Shouldn’t these “Professionals” be independent?

The market is still fine, sitting firmly above 13,000 and the “smartest guys in the room” are trying to blame the new congress, the old congress the President, the rhetoric from the front runner to be our future president. None are coming out and saying, “We were wrong. We need to change. We need to create a better future for our children and, perhaps, leave something for them.” I know that will never happen. To accept that one is wrong they first must have a functioning brain and then, what seems to be most lacking in those in public view, honesty.

This is best expressed by a common belief, “Our politicians will never make the hard decisions. They will never Fess up to their misdeeds and tell the American People that they have embezzled our nations wealth and sold our children into slavery. The only thing that matters is that things go along rather well and any crashes are someone else’s problems…”

Many are now saying that I am too pessimistic. Hillary will be different. It will be Bill all over again. Things will change. Ben Stein most appropriately expressed the reality of American politics.

When asked, “Will Hillary Clinton as President create a more populous government?”

Ben vehemently expressed, “C’mon, what an idiotic question. Hillary is so into corporate America for financing that she couldn’t change anything even if she had an inkling to do it. Which she does not.”

The elections of 2008 are another non event. Our politicians will become more corrupt. Our government will take more money in taxes and provide fewer services. The Dynasties are alive and well. The economy will continue to suffer. More Americans will lose their jobs while unemployment will remain stubbornly under 5%. Fewer people will have health insurance and more Americans will be working homeless. CEOs will continue to make $100 million salaries while their employees cannot afford to put food on their table.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Mr. Bernanke, Save our $ 100 Million Bonus!

The whining CEOs of America are at it again. In chorus they are calling for the Federal Reserve to decrease interest rates. The tight monetary policy is destroying the economy. Mr. Bernanke, can’t you see that we are in a recession and we will lose our jobs. Mr. Bernanke, Please drop interest rates, our $100 million dollar bonus is based on stock performance. Without intervention from the FED our stock prices will go down. It will be a disaster, this year we will only make $2 million.

It does not matter that these CEOs have driven their companies to the brink of disaster. It does not matter that they have fired their US employees. It does not matter that customer service is now inexistent. It does not matter that these CEOs have lost their competitive advantage by purchasing shoddy products from “developing markets.” It does not matter that they have knowingly introduced into the US market dangerous products undercutting the profitability of US produced goods and services. All that matters is that these “Pezzi da Novanta” are going to lose their bonuses.

Yes, I agree, the US economy is in the pits. Yes, there are many problems. Yes, unemployment is really about 12% instead of the 4.5% listed in the government data. Yes, public debt is 70% of GDP as measured by GAAP. But inflation is also rampant and the only way to bring it down is with tough love economic policy. We must reduce our debt, not by breaking the contract of Social Security, but be eliminating tax breaks and removing tax relief for the top 0.5% of the population. We must stop subsidizing US companies who produce products outside of the US through wars to “protect US interests.” We must eliminate financial institution’s stranglehold on US citizens by passing tough usury laws making “fees” part of interest costs and limiting interest to 10% above LIBOR.

We must take on inflation. Interest rates are historically low. Lowering interest rates at this point will only increase inflation. It will not take on the reasons why we are in such a mess. We are in this predicament because corporate America has taken over the government. America is longer a place of dreams. Americans are simply cattle for the slaughter for corporations.

Do not worry corporate America. Mr. Bernanke will come to your rescue. Good economic policy is simply a matter of perception. You will get your interest rate cut. The stock market will go up and you will get your end of year bonus. Unfortunately the future will not be as bright. Monopoly style economic policy will create further dislocations in our economy and sooner or later the piper will be paid.

Tags: Government Politics China Corporate America Finance Economy Reaganomics

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Responsibility? – $100 million CEOs – What a bunch of spoiled brats

I know some are really hurting financially right now. The markets are tanking. Well, not really. The Dow is still above 13,000. It is still up about 6% in 2007 and 30% since late 2005. If you were to listen to the “important people” you would think the world has come to the end. If the economic measuring stick is still up from the beginning of the year why are all these CEOs and Wall Street boys crying,

“The end of the world is coming!”

Simply because the “most intelligent” people in America, the ones who are “worth” $100 million salaries, made bad choices, ran their businesses into the ground and are paying the price for lack of basic understanding of economic policy. These foolish individuals, who are “worth” $100 million salaries, have broken every rule of business 101. They are about to lose a great deal of money because they have chosen to create procedures instead of paying for experienced employees.

These CEOs, who are “worth” $100 million salaries, lobbied to change the bankruptcy rules so that poor individuals who had their jobs outsourced have no chance to start over. The corporate cry babies do not want to take responsibility for their actions. These CEOs want a government bailout. The FED must lower rates. The FED must increase liquidity. These CEOs are having a brief glimpse of what the rest of the country has been living for the past 5 years. They want a bailout and the bad thing is that the FED is bailing them out by injecting liquidity. Increased liquidity means increased inflation, the thing the FED is supposed to fight. The FED will most likely help them even further by decreasing the FED FUNDS rate.

This will decrease, even further, the value of the dollar bringing ever more inflation since the US produces only 18% of what it consumes.

Why is the FED going against its mandate and bailing out a bunch of cry babies?
Why is the FED breaking every rule of stabile economic policy, sacrificing economic stability to save the butts of a few individuals who speculated on an obviously overheating and inflated housing market?

One can only imagine but I would put money on it that the definition of collusion and corruption would somehow be appropriate.

The fact is we are arriving at a turning point where all of the negative aspects of Reaganomics will come to haunt us. The piper must be paid. Stop gaps do nothing but increase the problem. Many of the cry babies have talked about 1930s type depression. They believe that it will be due to FED not doing what they want. We are heading toward a depression because we will not take a serious look at our economy and our culture. Since we will not look at the problems we will not take them on before they take on us.

Tags: Government Politics Corporate America Finance Economy Reaganomics

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The Sky is Falling, The Sky is Falling

I was stunned to see the promoters of Cowboy Capitalism screaming at the top of their lungs, “Bernanke, you do not know how bad it is out there. The financial system is going to crash! Drop the Fed Rate now!” I thought they were going to blow a gasket, perhaps with blood gushing from the juggler veins as they prodded the Federal Reserve Chairman to change Fed Policy to save the banking institutions. Yes the voices of Cowboy Capitalism, AKA let the free market take care of everything, promoting governmental intervention to save Financial America from its own short-sighted, greedy, unscrupulous behavior.

Why are they so concerned? The DOW is off less than 8 percent from all time highs. Before a Bear market could be in place the DOW would have to lose 2,000 points. The problem is that the financial institutions are overextended. They made bad decisions and are looking for a governmental bailout. Well so much for the CEOs being worth 100 million a year, any dummy like me could have told you that. Perhaps I will get a call from some big financial institution to run their “Keep us from doing stupid things” department.

Yes, the financial system is in trouble. Yes, some big boys are going to lose a great deal of money. Yes, those hundred million dollar CEOs were actually greedy and risk bankrupting the primary US financial institutions. No, the government should not intervene.

No one can accuse our government of sound economic policy. The implementation Reaganomic policies has been eating away at our national equity and making Americans poorer every day to the benefit of a few people in the upper echelons of society. I, and many others have been saying for years that the pendulum has swung too far and that our way of life, as we have known it, will change dramatically. Unbridled greed, self-interest without the enlightened adjective, have taken us to a breaking point.

Finance is one of our major industries. The other two driving portions of our economy are healthcare and housing. Woops! Housing is suffering from the same stupidity as the financial sector. I wonder if the 12% of the US economy that actually makes something will be able to pull us through?

It is time to pay the piper. Somehow, when I read about the pre 1929 crash I have to make sure we have not switched to 2004-2007. There are many similarities in the 1920s. Let’s hope the 2008-2018 are not the 1930s.

If the late 1920s was the age of the stockbroker, the early 1930s was a time for apple-sellers - traditionally, a job resorted to by those down on their luck.

The link between the crash and the Depression is not clear-cut; the economic cycle was arguably moving to recession with or without a crash. But 1929 eliminated the optimism of the 1920s.

Tags: Government Politics Corporate America Finance Economy Reaganomics

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ICE executes illegal immigrant raids in 6 states

It is sad when we have to applaud when people are just doing their job. This week ICE, the federal agency responsible for enforcing immigration laws, rounded up over 13 hundred illegal immigrants working in six plants of one company. While I do applaud the government’s decision to actually enforce a federal immigration laws I have several questions.

Why did they have to act indicating Identity Theft? Is it not enough that these individuals have broken numerous laws coming into the country the way they did? My goodness, if normal citizens do not pay their taxes they have real serious problems. How about we all just stop paying taxes. We could then demonstrate in the streets with slogans of,

“We need tax reform!”
“We pay the taxes no one else wants to pay!”
“We are not criminal we are just undocumented taxpayers!”
“No one is illegal!”

Since we are the largest voting block today, not tomorrow, the politicians could support us indicating, “It is impossible to think that we could round up 300 million undocumented taxpayers, our economy would collapse!”

Is this just a token operation? I have been seeing about the swift corporation employing illegal immigrant workers on the local news station for over a year. The news reports would then interview the illegal immigrant to explain that these were dirty jobs that no American would ever do. We know that illegal immigrants are part of the workforce. I know of 12 just in the local Target, they only hire illegal immigrants for the night shift refusing anyone who speaks English. Walmart was convicted of setting up false corporations using Illegal immigrants for their cleaning operations, hiding behind the façade of, “It is a separate company, we have no control over whom they hire.” The company works only for Walmart, one contract, one client.

Please governmental enforcement arm of immigration policy, PROVE ME WRONG! Execute your job description.

To date the company has not been charged with any wrongdoing. Why not? Come on people, this is obvious. Until we take the employers to jail, including the CEO with his $35 million salary, we will not fix the problem. Where is the Eliot Spitzer of Illegal Immigration? Is there no prosecutor willing to enforce our laws? Take on Walmart, Target, Home Depot, Time Warner and all of these companies blatantly violating our immigration laws. No settlements, send those bad boys to jail. If we take on the CEOs we will not have to spend hundreds of millions of dollars, rounding up and shipping home 23 million illegal immigrants. They will leave.

Their slogan will change from, “Today we work, tomorrow we vote!” to “Today no work, tomorrow we go home!”

Tags: Politics Corporate America Corrupt Politicians Government Data War on the Middle Class Border Security Port Security Stop Pork Spending Illegal Immigration

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Corporate America vs. Joe Worker - Education, Customer Service and Respect

A recent customer survey indicates that 70% of clients are willing to pay a higher price to have good customer service and 60% of clients will not return to a store where they feel they have been treated poorly. The National Association of Retail Stores immediately published their recommendations for their members on how to avoid devastating effects of poor customer service. These recommendations are:

The employee comes first. The employee must feel that he/she is an important part of the organization to be able to treat the client appropriately.
No fixed phrases. Employees must have empathy to be able to give good customer service.
Empathy starts at the top.
Employees must have the freedom to resolve the customer’s needs.

You mean the person interacting with the Customer is qualified to do something? They are not just warm bodies repeating senseless phrases over and over again. That earlier morning meeting, “Go super Target, go!” cheerleading meeting is less important than understanding customer’s needs? How can this be?

Well I guess Target and Walmart can shut their doors tomorrow morning, they are already dead they just have not realized it yet. In a sector where Joe Worker is the equivalent of slave labor and executive management feels that the employee working with the client is not even worthy of earning in one year what the CEO makes in one hour, it is hardly possible that these companies have a future. I have long sustained that business models that play on the lowest cost / lowest quality model are failed businesses, like Target and Walmart. To make their profits they keep squeezing the employee until there is no more to give. The end result is always that the employee, who is the heart and soul of any business, just does not care.

Corporate America’s solution to the problem is to source foreign labor willing to work for slave wages. Walmart has already been convicted of using illegal immigrant labor and Target will soon be just another example of corporate shortsightedness as their practices to actively recruit illegal immigrants in Texas will become public knowledge.

Since there is a ray of hope that our government may actually enforce immigration and labor laws the corporations now have a new motto. Americans are stupid. We need more L1 visas because Americans did not study in school and are completely unprepared to do their jobs. With University Tuition up over 5,000 % in the last 20 years I would think just the opposite. The retailers are also supporting the North American Alliance, Amnesty and guest worker programs. Just think, if labor costs were to increase the executive management may have to reduce their average $4.1 million annual salary to say a pittance of $1 million. Poor executive management and think of the poor investors who may see earnings per share drop 1% while they are at the highest levels ever reached. You mean they will have to be content with just a reasonable return on capital. This is socialism, class warfare against those poor souls who made money, Sacrilege!

C’mon Corporate America, wake up and smell the roses. If your clients have little or no disposable income after they pay for rent, it is hard to spend money on all the things you sell. Perhaps it is true that our Universities have not prepared our MBAs. If they cannot understand this simple rule, perhaps they should be doing something else.

Tags: Politics Corporate America Corrupt Politicians War on the Middle Class Border Security Port Security Illegal Immigration

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Value of an Individual – Worth of a Soldier

I was listening to my weekend financial programs on FOX Business News. These are part of my weekly habits necessary for my job. I have long proposed that no CEO is worth more than $1 million a year. I am a CEO and have made pretty good money. The commentators, all proponents of Cowboy Capitalism, whose only measure of value is wealth, have long supported eliminating all regulation on companies with the usual, oh if people do not want to work there they can go elsewhere, etc. A comment caught my attention.

“Let’s face it, the CEO is not the same as the person stocking the shelves at WALMART or TARGET. He is worth $100 million a year while the employee should be happy that the company is giving him $15k year because, frankly, he is not worth it.”

They then proceeded to talk about how the US needed to bomb IRAN, send more soldiers into IRAQ, and generally move more soldiers into harms way to protect their investments around the world.

When a soldier is killed his family gets $100k. A CEO is worth $100 million a year. The soldier in the best case exposes himself to physical danger and his family to financial disaster and in the worst case is maimed or DEAD. What is he doing, protecting the international interested not of America, instead of Corporate America. He gives his life to protect the same people who value his entire life and the life of his family less than 1 day of a CEO.

I think we need to look at this differently. I value the life of a soldier more than I value the life of any CEO. Therefore we should increase the death or serious injury policy on every soldier to $10 million and triple the annual salary for all military personnel. This should be paid for with a 99% tax on all earnings over $1 million.

We talk about values here in the US. We talk about protecting life, we talk about individual’s rights. Perhaps it is time that we actually do something about it. I have earned over $1 million a year. I currently do not. It is very difficult to spend intelligently over $1 million a year. Let’s actually do something, not just lip service, to show that we do value life over other things. Lets pay for the life of a soldier just like we pay for a day in the life of a CEO.

We have allowed Corporate America to buddy into our political system. With tax deductible donations, Corporate America has bought control of the US political system. A legal entity is more important than flesh and blood. I am sorry, I just do not agree. The life of any soldier is worth more than the life of any CEO, including my own. I just make money. He/She protects my kids.

Tags: Politics Corporate America Walmart Minimum Wage War on the Middle Class CEO Compensation Military Iraq

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