RJ's Corner

Apple Live TV ….

2015-08-15_08-09-49Apple Inc. customers waiting for the company to revolutionize live television as it did for music and phone service will have to keep waiting, at least until next year.

Source: Apple to delay live TV service to 2016 – Yahoo Finance.

It is amazing how so few companies can change our culture so dramatically.  Apple is certainly one of them.  They revolutionized the music business so quickly. Gone are the black disks of my generation and now even tapes, CDs, DVDs, and record stores.  Amazon is another who is shaking up the retail business. Where locally there are hundreds of choices, Amazon offers thousands and delivers them within two days to you doorstep.  Yes, I know that there are some who work for these companies that are overwhelmed by the intensity of effort that it takes to achieve excellence in their field. Those who give their customers top priority thrive while others with different ones fall by the wayside.

I hope Apple is able to revolutionize TV service and we are able to choose what we want to pay for instead of being forced to choose a pre-packaged list. I imagine like the video stores this will happen faster than many are ready for. Customer is king and that is the way it should be in a free market economy…

The Disparity of Benefits… And a Possible Solution…

2015-08-14_09-13-12SEATTLE — Microsoft said on Wednesday that it would offer new parents an additional eight weeks of paid time off from their jobs at the company, in a significant boost to its parental leave benefits.

Microsoft’s changes to its policy came a day after Netflix, the online video service, said it would allow new mothers and fathers who are employees to take as much paid time off as they need during the first year after the birth or adoption of a child. The more generous policies are a way to hold onto employees, particularly the highly skilled technical workers who are in extremely high demand in the booming tech industry.

Source: Following Netflix, Microsoft Sweetens Parental Leave Benefits – The New York Times.

I know that companies that value their employees and recognize their worth generally give them benefits in order to keep them with the company. They typically allocated a certain percentage of their profits into this arena. Profits are the main, some say only, priority for many so they sparingly deal out benefits.

The problem with the current method of allocating benefits is that they are often only applicable to certain employees. For those who are beyond child-bearing years and those who choose something other than a married lifestyle the above benefits mean nothing to them.   It is kind of like those of us who are childless having to pay such a high percentage of our property taxes to send other kids through public education. We see no personal value to where all our dollars go.

There seems to be a great disparity of who gets benefits.  The solution to this problem is too obvious. Why not offer a cafeteria type choice of what benefits you receive? Give every employee a certain percentage of their income to the benefits pool and let them decide where to allocate the money.   Those who are childless might spend it on additional vacation time. For those with school age children they might take shorter hours in order to pick up their kids from school. For others something different.  Let the employee decide which benefits they want.

Companies, at least when I was working, made a big point of “empowering” employees to make their own decisions. That is the excuse, and I do mean excuse, they use to forcing their them off fixed benefit pensions and putting all the risk of financial planning on them even though most are totally unprepared for that task.

Cord-Cutting Gets Ugly: U.S. Pay-TV Sector Drops 566,000 Customers in Q2

2015-08-09_07-58-34Cord-cutting headaches for pay TV have now progressed beyond just a dull, throbbing pain.

Cable, satellite and telco TV companies suffered their worst-ever quarterly subscriber declines for the three months ended June 30, collectively shedding more than half a million accounts — an accelerating erosion that’s put new pressure on operators and media companies exposed in the pay-TV biz.

Source: Cord-Cutting Gets Ugly: U.S. Pay-TV Sector Drops 566,000 Customers in Q2.

QE BannerLater in this article one of the TV execs say that the customer should be the focus of this trend and not the corporate plan or such. Maybe they would like my opinion but I kind of doubt that they will get it.  I’m sure I am not alone in my feelings about Pay-TV.

If these guys want to save their jobs they need to understand that they should not be the ones who determine how they package their channels.  I shamefully admit that I pay more than $125 per month for Direct TV.  But since the average bill is over $100 I guess I am not the only fool who originally bought into the $29.95 mantra they advertise.  With that $100+ comes about 400 channels of which “sports” channels make up at least 100 of them. Another 50 or so are probably infomercials. I wonder if anyone actually watches those.

My wife is into several channels that I don’t watch and I am into some, like my car shows, that she doesn’t watch. And 80% of the offered list neither of us ever watch. Sports in any form is just something that we don’t view. They say that over half the pay-tv providers content expenses are for the sports shows.

Getting back to what this customer, and I’m sure there are many others like me, wants is an ala carte method of picking what I want to pay for. I’m sure I could cut my bill in half with a pick-and-choose method. But I guess that is maybe one of the reasons they don’t offer it. They would lose revenue. But what is worse a customer who spends half as much or a customer who leaves them entirely?

Corporations just don’t seem to give the customer the attention they used to in the good old days. I know you have been waiting for this old guy to mention the good old days. Actually I don’t do that often but to some degree it is true.

Finishing up this post with a different thought, it seems strange that AT&T would buy DirecTV this past week if their revenue is falling so drastically. But, as in the past, AT&T often does things that confuse me and I worked for them my entire corporate life. They threw away the cellphone business in the 80’s because it didn’t have growth potential! Then, of course, they panicked when it did and played catch-up for years.  But that was the old AT&T before the break-up so I shouldn’t put that on the current leadership I guess….

Question everything..

 

You still use a landline? FCC voting on new phone rules

Some customers, consumer advocates and the telephone-workers union accuse the phone companies of not repairing copper networks that they want to shut down. The new rules would prohibit companies from retiring a copper network through neglect. If it wants to abandon copper, it would need to tell customers.

SOURCE: You still use a landline? FCC voting on new phone rules – Yahoo News.

2015-08-07_20-41-30QE BannerThis was a new one on me. I didn’t know that the phone companies could retire copper lines through neglect.  I guess when that happens they just leave it up to you to try to figure a way to get another source of communications.  For the city folks that is not a problem but for us in the country the copper wire is just about the only option.

We have a five-hundred pair cable strung across our front yard. At points between us and the central office it droops down to within two feet of the ground. I guess you can call that neglect? We do have a “DSL” with that wire but not according to the recent definition. Ours is at about 2Mpbs whereas in the city it is now approaching 25 Mpbs and in the “big city” it is at 2015-08-07_20-44-08600 Mpbs! Our connection goes out at least once every hour for a minute or so. We have complained about it but they say since we are at the max distance from them for DSL that is the best they will do. It seems if we complain about it they will just drop our service!

I hope the new FCC rules going into effect as indicated in the source article above help us in some way but I kind of doubt it.  All of our neighbors to the north of us are stuck with 0.05 Mpbs via dial-up. No, cable is not available here either. We have satellite but that does not provide Internet. I know part of the things AT&T had to do in order to get the DirectTV merger done is to add more fiber networks but I’m sure those will go to more dense neighborhoods than we are in the rural areas. I’m just hanging on to what the give us hoping that someday they will throw a few more scraps off their city table…

Meet the new workers’ movement that is terrifying the wealthy and the powerful

2015-03-30_09-35-17They aren’t actually anything new, just a variation on long-standing labor-organizing practices that have come back into prominence. “Micro union” is a recently coined term of art for bargaining units that encompass one category of workers at a business — the cosmetics workers at a Macy’s, for example — instead of the more traditional model of organizing all the workers for the business into one single bargaining unit. In 2011, the National Labor Relations Board (NLRB) decided a group of certified nursing assistants at a nursing home constituted an appropriate bargaining unit in themselves, in a decision called Specialty Healthcare. In 2013, that decision got the stamp of approval from the U.S. Court of Appeals for the Sixth Circuit. In 2014, the NLRB applied its logic to the aforementioned Macy’s cosmetics workers. Since then, union critics and business interests have been scrambling to respond. Retail industry groups told The Hill that the NLRB’s Macy’s decision would “pave the way for micro unions at thousands of retail stores around the country.” Isakson has made multiple attempts to pass his bill rolling back NLRB’s decisions, with the backing of GOP heavy-hitters like Sens. Lamar Alexander (R-Tenn.), Orrin Hatch (R-Utah), and Senate Majority Leader Mitch McConnell (R-Ky.).

SOURCE: Meet the new workers’ movement that is terrifying the wealthy and the powerful.

Micro-breweries are quite the rage right now and I admit I am one of their fans.  When we travel I often order local beers when I come across them. It is nice to see these types of cottage-industries rising up again. It is even nicer to see the micro trends more to work unions. One of the big problems with unions in the last half century or so is that they just grew too powerful for their own good.  They quit looking out for the workers and instead become just anti-owner organizations.

You don’t need giant unions to help you get your fair share from an employer. micro-unions seem to be a natural evolution in employee-employer relationships. But the thing that will make micro-unions effective is that all workers in an indirect way support the right of an employee to address grievances with their employer. They do that by not frequenting establishments that lord it over their workers. They do it by not rushing in to snap up a job after a worker has been fired.  Money talks…

The sad thing in the last few decades is that American business have been thriving with increased sales but not sharing their prosperity with the ones who generate it. We seem to be a owner-society now. Those with the money demand more and more of the pie. I hope micro-unions will reverse this trend…

Going After the Money…. We Can’t..

Made in China - inscription on Red Rubber Stamp.In this age of electronic banking the way to shut down any organization is to go after their access to money. It looks like that is just what is currently happening with North Korea at least to an extent.

“We need to step up and target those financial institutions in Asia and beyond that are supporting the brutal and dangerous North Korean regime.” When challenged by Royce about “a number of small banks” still doing business with North Korea and the need to choke off the country’s access to hard currency, Glaser replied: “That’s exactly what we are trying to do.” Royce said he hoped a bipartisan bill he sponsored that would label North Korea “a primary money laundering concern” would be passed by the Senate this year…. The country’s main economic ties are with China and, according U.S. government reports, its tiny economy has supported itself with money-making scams ranging from counterfeiting $100 bills to illicit arms and drug sales. SOURCE:  U.S. takes aim at North Korea’s remaining financial links – Yahoo News.

Being a simple guy I just can’t understand how we can give China so much power over our day-to-day lives when they support those who would love to see us annihilated from this earth. I don’t know about you but it seems everything I buy almost anywhere today comes with a “Made in China” tag. It is about time we started putting conditions on transferring our wealth to that country. Millions of good paying jobs have disappeared to be resurrected in mainland China at pennies on the dollar and the primary purpose is to provide more profits for their most often times very rich stockholders..

I know doing something about this problem will be a hard-sell for the Republicans in congress. They simply believe that what our corporations do to make their profits is their own business and the government should stay out of it. And again if Obama comes out for it they will naturally be adamantly against it whatever it is. I think this same thing would be happening no matter who the Democrat was that occupies the Oval Office. Its pure politics and it is getting uglier by the minute. But I am getting off topic here.

How can we allow China to help North Korea with their illegal schemes and not suffer any consequences?  Of course part of that reason, maybe the biggest part, is that we are already so deeply dependent on China that we simply can’t afford to confront them. If they for whatever reason decided to stop sending us the products they now make our economy would likely collapse. How did we get into this type of arrangement is of course because of greed. When a bigger profit can be made using Chinese labor at pennies per hour as opposed to dollars per hour for home-grown labor greed will go off-shore every time. But I kind of think that even those who made these decisions to move their production to China are surprised at the speed at which the total transformation occurred. They all seemed to rush there without really considering the consequences.  But then again greed has never been much of a forward-looking thing…

AT&T finishes rollout of 1Gbps connection…

2014-10-30_08-32-58AT&T has completed upgrading its fiber-network in Austin, Texas, to 1-gigabit-per-second broadband speeds, the carrier said Monday.The Dallas-based company, which started the Austin upgrade in August, has been working to increase the speed of its U-Verse with GigaPower fiber network from 300 megabits-per-second to 1Gbps. AT&T is racing to bring faster Internet to customers before its competitors. SOURCE:  AT&T finishes rollout of 1Gbps connection in Austin – CNET.

I am one of the fortunate ones along my road in that I am within the 1.5 mile distance from the AT&T central office. I can get my Internet connection at 0.003 Gbps. That is 300 times slower than folks in Austin get.  To put that in perspective what takes them one second to get takes me 5 minutes. Sadly those north of me are limited to 0.0002 Gbps.So when I run across these types of announcements I often say “SHAME ON YOU”.

We all know that in the 21st century information is power. Those with it have opportunity; those without it have almost none and of course the Internet and access to it is fundamental to the 21st century information age.  Why are those of us in less populated areas denied access to the Internet speeds that our urban neighbors take for granted? Of course the answer is profits.

I look out my front door and see a couple of two-inch diameter cables strewn between two poles across my front yard. In some places along my road these cables sag to just a few feet above the ground. They have not been improved in many decades. The picture above shows that both of those cables could be replaced by a single small fiber-optic line but to do that would require an investment that currently goes to the owners as profit.

Looking at the history of utilities in rural America I see where this is nothing new. It wasn’t until the 1930s that electricity or telephone was widely available to the farmers who provide the rest of us with food.  The New Deal of the 1930s would finally help remedy that situation via the REMC. Here is a little about that from my friends at Wikipedia:

Many such cooperatives exist in the rural United States, and were created by the New Deal to bring electric power and telephone service to rural areas, when the nearest investor-owned utility would not provide service, believing there would be insufficient revenue to justify the capital expenditures required. Many electric cooperatives have banded together to form their own wholesale power cooperatives, often called G&Ts for generation and transmission, to supply their member-owners with electricity.

If we had a functional government in place, instead of the gridlock that is there, maybe this issue could be resolved like it was then. I guess I should be grateful for my 0.003 Gbps Internet connection even though my city neighbors had connections three hundred times faster. At least my snail like speeds are several times faster than all my neighbors north of me.  It is about time for AT&T to spend a little money and put all of us on a fiber-optic system so that we all have a more or less level playing field for the future.  I thought that was the FCC’s mandate but if it is it is being totally ignored. Shame on AT&T for not having done so already…. And shame on the FCC for not having forced them to do it already….

Doctors net billions from drug firms….

2014-10-02_09-11-00Drug and medical-device companies paid at least $3.5 billion to U.S. physicians and teaching hospitals during the final five months of last year, according to the most comprehensive accounting so far of the financial ties that some critics say have compromised medical care…. Some doctors have earned tens of thousands of dollars annually from drug companies by flying to various cities to give paid speeches, while some surgeons have received even larger amounts from medical-device makers, partly from royalties on products they helped develop…. One former Senate staffer who was closely involved in the effort to pass the Sunshine Act hopes the database will do some good. “This website will let patients ask a very important question: ‘Is a relationship between my doctor and a drug company right for me?’ It took six years of hard work to get this site together and, hopefully, it will help clean up medicine,” said Paul Thacker, a former aide to Sen. Chuck Grassley (R-Iowa) who is now a fellow at the Safra Ethics Center at Harvard University. He said the “total amount of money is pretty eye popping.”

SOURCE:  Doctors net billions from drug firms – Yahoo Finance.

Doctors receiving $3.5 billion from the drug companies was a total surprise to me. I knew the drug companies pampered them hoping that they will prescribe their drug over their competitor’s but some of the instances reported in the source articles go way beyond an ethical boundary.

I find it totally astounding that it is illegal for the largest medical care company in the country to negotiate prices with the drug manufacturers. It is a well known fact that all other countries in the world get their pharmaceuticals at a deeply discounted price. Why must Medicare pay full price when everyone else can bargain for their needs? How many billions of dollars are needlessly spent to give these guys a golden apple?

They say Medicare will go broke in about twenty years or so. I wonder how far that would be extended if we could bargain with the drug companies? Getting back to the original thoughts about this article why  is it even legal for doctors to take all the bribes that apparently do from these guys. A doctor being paid $70,000+ to give a seminar in an exotic location and which no one attends is surely a grossly unethical situation. Doctors who are among the top ten most compensated profession makes enough without these bribes!

It will take a legislative branch similar to those during the Teddy Roosevelt administration to finally put an end to these types of practices. If we are serious about cutting our healthcare costs in this country the drug companies are the low hanging fruit to be first dealt with. If only our current gridlocked government would life up to their responsibilities and do the people’s business. It is as simple as that….

Apple Innovations…

2014-09-01_09-28-00The new iPhone will make mobile payment easier by including a near-field communication chip for the first time, the person said. That advancement along with Touch ID, a fingerprint recognition reader that debuted on the most recent iPhone, will allow consumers to securely pay for items in a store with the touch of a finger…. “Love it or hate, Apple drives a lot of standards in the industry,” Bajarin said in an interview. “They are the mover in these markets. When they do something, the industry seems to follow.” SOURCE: Apple Said to Team With Visa, MasterCard on IPhone Wallet – Yahoo Finance.

Today being the day for the “big” announcements from Apple almost necessitates that it also be the subject of this post.

A couple of years ago I downsized the wallet I used to have from a one inch behemoth that bulged from my back pocket to something less than a half-inch and the size of half a dollar bill and I found out I don’t miss all that other stuff I used to needlessly haul around. I have been waiting to move to the next stage and that is to chuck the whole wallet. It looks like with the latest Apple innovation I might be able to do that sooner rather than later. Of course soon is a relative term when it comes to our electronic gadgets.

Over the years I have seen quite a bit of miniaturization in the world around me. The doctor’s office, of which I seem to spend more and more time lately, has finally  gone totally digital. The dozen or so ten foot high by twenty-foot wide racks of patient records now reside on laptops carried around by the nurses. The doctors for the most part still stubbornly resist having to use “those things” so they relegate that responsibility to them.

I used to get about ten different paper magazines a month in order to keep up on what is happening in the world and to follow the hobbies that interested me.  I am now down to one weekly magazine. Everything else is on-line. Let’s face it the digital world saves trees and since trees give us our oxygen that is a good thing. :)

Our world is becoming smaller each year and it is about time to chuck the old wallet of the 19th and 20th century for a digital one. I am still using a three-year old iPhone but will upgrade to the iPhone 6 after the hoopla dies down. When that happens I will move as much as possible to digital transactions. Thanks Apple for giving us 21st century solutions to our daily challenges. I certainly look forward to your announcements this afternoon.

 

No More Whoppers For Me…

2014-08-26_08-36-25Burger King’s plan to scurry across the Canadian border to avoid U.S. taxes could be seen as the corporate equivalent of flipping President Barack Obama the bird…. “My sense is this is Burger King trying to dodge paying its taxes. I don’t know that I’d attribute it to their making a move like this to directly challenge Obama,” Frank Clemente, executive director of the nonprofit Americans for Tax Fairness, told The Huffington Post. “I can’t say what’s on the company’s mind here, whether they’re trying to beat the clock on this and do something before Congress passes legislation or do something before Obama signs an executive order.” SOURCE:  Burger King Dares Obama To Stop It From Fleeing To Canada.

It irks me to see U.S. corporations declare bigger than ever profits and then shirk their tax responsibilities by moving out of the country.  As far as I am concerned Burger King might just as well move all their stores to as I will not be frequenting any of them in the future.  They can send me all the coupons they want but they will go immediately to the trash can.

Burger King is also known for paying no more than minimum wage to most of their store employees.  In my small town that results in huge turnover and low customer service. I’m sure the executive officers are well paid and like most others have figured a way to get their lavish bonuses year after year.

Goodbye Whooper…… We overthrew one king I guess we can do the same to this one…

Triangle Factory Fire…

The Triangle Factory Fire was a defining moment in US history. Here is a little about what Wikipedia says about it

2014-04-30_09-32-20The Triangle Shirtwaist Factory fire in Manhattan, New York City on March 25, 1911 was one of the deadliest industrial disasters in the history of the city, and resulted in the fourth highest loss of life from an industrial accident in U.S. history…

The fire caused the deaths of 146 garment workers – 123 women and 23 men [1] – who died from the fire, smoke inhalation, or falling or jumping to their deaths. Most of the victims were recent Jewish and Italian immigrant women aged sixteen to twenty-three…

Because the owners had locked the doors to the stairwells and exits – a common practice at the time to prevent pilferage and unauthorized breaks[6] – many of the workers who could not escape the burning building jumped from the eighth, ninth, and tenth floors to the streets below. The fire led to legislation requiring improved factory safety standards and helped spur the growth of the International Ladies’ Garment Workers’ Union, which fought for better working conditions for sweatshop workers.

I recently watched a very moving documentary about it on PBS. One of the shocking things I learned from that program was just how much the “system” was against the striking workers. The police, judges and city hall did monstrous things to beat the women back.  It would take J.P. Morgan’s  very privileged daughter to turn this trend. When she came out in favor of the workers things finally started to shift.

For those who might misunderstand the meanings of my words I want to state up front that I believe capitalism is the greatest monetary system in the world. Nothing else even comes close.  But this tragedy is a lesson learned that you just can’t have unregulated industrialization.  Without regulation greed overwhelms the capitalistic system. The owners who caused these unnecessary deaths took their insurance money and basically disappeared with no consequences for the deaths they caused.

I do thank God that these sort of things don’t happen in this country today but they continue to happen in those countries that supply us with our unquenchable desire for more and more cheap goods. We have current government agencies such as OSHA and although they are generally very understaffed compared to those they regulate they do a good job of reigning in unsafe corporate greed.

 

 

Raising The Minimum Wage….

2014-08-03_11-10-40But the problem is we have structured our economy in this sort of death spirally way, where huge profitable organizations like Wal-Mart pay poverty wages to a million workers, and then taxpayers make up the difference in social services programs like food stamps and Medicaid and rent assistance, and so on and so forth.  It’s as morally repugnant as it is economically inefficient. It’s a fact that Wal-Mart earned $27 billion in profit last year. They could afford to pay their bottom million workers $10,000 more a year, raise all of those people out of poverty, save tax payers billions of dollars, and still earn $17 billion in profit, right. It’s simply nuts that we have allowed this to happen. And the only way you can change things is to raise the minimum wage. Certainly the people that run Wal-Mart will not do this on their own.  The idea that businesses will go out of business if they pay workers more is just not true, even though I understand the sort of visceral fear that some of them feel about this change. SOURCE: Why capitalism has nothing to do with supply and demand | Making Sen$e | PBS NewsHour.

These quotes above drive home what I believe is a very basic reason our economy is still in the state that it is. We just give too much power to the most avid capitalists among us. In other words we give too much power to those few who control most of our nation’s wealth. I am a firm believer in the idea that government’s role in a democratic/capitalist society is to reign in the greed that naturally comes with capitalism.

Unions used to have some control over this wage vs established wealth issue but that is just no longer the case. As is typical of these sort of thing unions themselves became too powerful and as a result too self-focused and corrupt to continue to hold the influence they once had. Unfortunately there was nothing there to replace the void left by the extinction of unions so it is necessary for our government to step in. But even that is another tragic failure in this very disjointed country.

With the almost total breakdown of the ability to govern, especially at the national level, this dichotomy between wages and wealth has gone unabated for a couple of decades now. Our economy is almost totally based on consumer spending but if consumers are stripped of any sense of discretionary income it seems like that is a natural spiral that we will not escape from. The richest among us just don’t eat out 10,000 times a month to replace those who can no longer afford such luxury.

We depend on our government to reign in the excess of our capitalist system and that is just not happening in today’s world.

Secret iPhone 6 feature uncovered?

2014-07-11_07-59-24Apparently, the new iPhone 6 will incorporate a more advanced vibration motor that could offer better tactile feedback to users, depending on the app they’re using or the area they tap on the screen. SOURCE:  Secret iPhone 6 feature uncovered? – Yahoo News.

I have had my iPhone 4 for about three years now and am for the most part very pleased with its operation.  But one areas that needs improvement for me is the vibrate mode. Since I am deaf I rely exclusively on vibrate to let me know when text messages come in. The current vibrate mode is rather weak and sometimes hard to detect especially when my mind is on other things.

While the ring mode has dozens of options, the vibrate mode is limited to two short bursts only. So, I was pleased to hear of this new secret feature. Yeah, I am one of those guys waiting for iPhone 6 to do an upgrade. I guess there are millions of us out there. I know Apple phones are more expensive than some of the competitor but given its overall features it is well worth the price.

Bitter Rivals….

2014-07-20_09-28-10Apple and IBM are teaming up to bring iPhones and iPads to business customers, the two companies said in a surprise announcement Tuesday. In a wide-ranging partnership, the two tech giants that were bitter rivals for decades will create a suite of apps and services aimed at enterprise clients…. “For the first time ever we’re putting IBM’s renowned big data analytics at iOS users’ fingertips, which opens up a large market opportunity for Apple,” Apple CEO Tim Cook said in a statement. “We are delighted to be teaming with Apple, whose innovations have transformed our lives in ways we take for granted, but can’t imagine living without,” IBM CEO Ginni Rometty offered. “Our alliance will bring the same kind of transformation to the way people work, industries operate and companies perform.”2014-07-20_09-28-39 SOURCE:  Apple Partners With Former Rival IBM to Target Enterprise Customers | TIME.

IBM and Apple doing business together???  Go figure… Next thing we know the Israelis will be getting along with their neighbors!  Wouldn’t that be something to see. But then again when money is involved things seem to get worked out sooner. That is, money coming in, not going out…

Apple has always been considered the computer of choice with the creative crowd and IBM amongst the bean counters. I know the iPhones and iPads have been making their way into the business world folks. They just can’t pass up the leap in quality over Apple’s competitors and finally the IT departments are beginning to slack up on the adamant resistance to anything Apple.

Maybe what it took was for Apple to move beyond its first generation of bosses. Now that Tim Cook is at the wheel instead of Jobs the rivalry has been tamped down a hair and that is good for all of us.

 

 

Direct From The Manufacturer….

Tesla’s campaign to sell its electric cars directly to consumers shifted into high gear this week as state lawmakers debated Tesla-related bills while powerful auto lobbyists braced for a fight. In New York, a measure designed to ban Tesla from opening new stores passed a key hurdle, while in Arizona, lawmakers pushed a bill to make it easier for Tesla to sell its cars without establishing a dealer network.

The escalating conflict underscores Tesla’s role as a disruptive force in the U.S. auto industry, not only because the company’s cars don’t use gasoline engines, but also because Tesla is trying to upend the dealership-franchise model that has underpinned the automobile industry for decades. That model — and laws protecting it — emerged in the 1930s as a way for automakers to build a national sales and service force and help foster local economic growth. SOURCE: Tesla’s War With the States Shifts Into Overdrive | TIME.com.

I have mixed feelings about the above topic.  This is kind of like a David/Goliath type thing. The little dealership guys are being squeezed out by the big corporations the same way as WalMart is squeezing out local retailers.  But size is a relative thing. Yeah Telsa is probably bigger then most auto dealerships but it is very small compared to its other automotive competitors. It is also pretty easy to see that those who own local or regional auto dealerships are usually much wealthier than the rest of us.  It is not uncommon to see mufti-millionaires auto dealer owners.  So David/Goliath is a relative thing.

Realtors are also in this type of corundum. When I sold my house in New Jersey it never actually went on the market. My realtor happened to have someone waiting for my type of house. When we closed on the house the realtor received a check from me for almost $18,000 for two hours work or so.  The only ones who even come close to that hourly wage are big time surgeons and some CEOs  :)

The other example in my part of the country is in liquor distributorships. If you can land one you are assured a big annual paycheck. They are given out mostly as a political favor by State level politicians.

I don’t know but it seems like these sort of things need fixing. We should be able to buy direct and bargain with others for what are currently set as “standard” fees. Wages for most of us haven’t changed much in the last decade or more so the little guy needs all the help he can get in today’s world even as a consumer.

 

Google Is Making Itself a Lot Leaner and Meaner..

2014-01-31_08-57-01First, Google cracked the code on Internet search. Then the company used its search platform to build the world’s largest online advertising business. Now, the Silicon Valley icon is turning its attention toward streamlining its business to focus on next-generation hardware and services, particularly in the mobile space. Judging by Google’s latest earnings report, the company’s core business remains robust, as the Cupertino, Calif.-based cash machine posted strong sales and profit growth on Thursday, sending its stock price surging more than 4% in after-hours trading to an all-time high for the second consecutive quarter. SOURCE:  Google Is Making Itself a Lot Leaner and Meaner | TIME.com.

I don’t know how many of my readers realize just how earth-shaking the search platform that Google developed was. Before that time it took sometimes hours to find some of the most basic info on the Internet.  Let’s take a quick look at what Wiki says:

Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University. Together they own about 16 percent of its shares. They incorporated Google as a privately held company on September 4, 1998. An initial public offering followed on August 19, 2004. Its mission statement from the outset was “to organize the world’s information and make it universally accessible and useful”, and its unofficial slogan was “Don’t be evil”. In 2006 Google moved to headquarters in Mountain View, California, nicknamed the Googleplex.

Simply speaking Page and Brin made the internet what it is today. Never mind that Al Gore invented it ( :) ), they changed it from a complex military network into an everyday appliance.  For that reason I am an avid fan. Even if I don’t use their browser or some of the other tools they make available. The above article is about how they have grown in the last ten years and where they might be going in the next ten. Will they go the way of Apple or the way of Microsoft?  That is a basic question that needs to be answered and I’m sure they are very aware of that difference.

Most of us old guys, especially the techies among us, know that Microsoft and Apple  happened at about the same time. Microsoft developed a user interface that totally dwarfed the FORTRAN language that was used to program the IBM mainframes. When I was in college desktop computers were still just a dream. Even in college I realized that computers would be a big part of the future so I took a couple of classes to build an initial foundation.  I spent hours writing up a very foreign code and then typing it out on punch cards which were used to put the code in the mainframe very early the next morning. Of course there was always that one card of out hundreds that I misspelled something and therefore the whole lot was rejected.

Thanks to Google, and yes Microsoft and Apple, the initial experiences of new users are vastly different from my own.

America unleashed…

2014-01-24_10-50-34At the same time, while many people mindlessly repeat the phrase, “We don’t make anything here anymore,” it’s simply not true. The fact is the United States remains the preeminent manufacturing power in the world, producing about 20 percent of the world’s manufactured goods in the United States, and a lot more outside the country. Though China produces almost as much as the United States does within its borders — also about 20 percent of the world’s goods — there is a big difference between what our two countries make.

China is a world power in low-margin electronics assembly, textiles and machinery. But the United States is a powerhouse in high-end, high-margin, sophisticated manufacturing processes. The United States leads the world in aircraft engines, turbines, avionics, advanced material fabrication, helicopters, business jets, and — depending on the year — airliners. We are also the leader in sophisticated radar and telecommunications technology, and, of course, in weaponry. In addition, the United States has retained its leadership in space, with private companies, like SpaceX, building some of the world’s most sophisticated rockets.

There is a lot of evidence that there was movement underway to repatriate manufacturing to the U.S. from abroad before the 2008 crash. That movement stopped during the Great Recession but has now resumed. American companies, as well as foreign firms, are expanding their manufacturing in the U.S. BMW, for example, is now making all of its SUVs for the world in the U.S.

SOURCE: America unleashed: Why we’ll be number one once more | PBS NewsHour.

This is one of the few upbeat articles about the U.S. that I have come across lately. Although I am skeptical about all the claims there is enough evidence to show that we might be on the verge of a comeback in 2014. That is good news indeed, except maybe for those who are not qualified for these more intellectual jobs that are being created.

Except for the decision by Apple Computer to build their top-of-the-line $10,000 Macbook here,I haven’t heard much about companies wanting to repatriate manufacturing within our shores. On this topic of U.S. jobs there is a mountain of hype going on so it is hard to discern fact from fallacy. Everyone with a particular agenda has their own story and it often directly conflicts with another story.

While China may have started out as Japan did in the 1950s with low-cost, low margin manufacturing they are quickly moving beyond that state. They are currently setting up manufacturing for commercial airliners, automobiles and such. It took them only five years to come up to par with the U.S. in manufacturing. What will the next ten years be?  I hope someone besides China is looking that far ahead?

Now if we can just get our educational system that prepares people for these “sophisticated” systems jobs we might must live to fight another day….

 

A Direct Connection…

Amazon spokesperson Mary Osako, meanwhile, told Businessweek that “our employees have made it clear that they prefer a direct connection with Amazon.”

“This direct connection is the most effective way to understand and respond to the wants and needs of our employees. Amazon’s culture and business model are based on rapid innovation, flexibility and open lines of direct communication between managers and associates.”

SOURCE: Amazon Workers Vote Against Forming Union | TIME.com.

Lets face it unions today have a pretty bad reputation with many of us. In the past they have tended to make an enemy of the people who hire their workers.  It was always an adversarial arrangement.  Whatever the company wants the union is against. With that reputation it is hard to form unions today. I know I just finished a post recently about a paradigm shift needed to solve the unemployment/education problems in our country but this is another one that will require a similar shift. I hope Amazon is doing just that.

Unions of the past just have to move beyond and adversarial relationship with employers if they hope to have a place in the 21st century. Likewise employers must do what is needed to rekindle the loyalty that many mid-twentieth century companies had. They must once again start treating their workers as assets instead of liabilities.

I admit up front that I have only a limited exposure to the employee side of Amazon but from what I can glean they try to treat their workers with respect and they do pay more than the prevailing wages along with attractive benefits. Jeff Bezos is one of the few present CEOs who seem to look mainly to the long-term future when mapping out his company’s strategies.

Here is a quote from an article about Amazon along with some info about salaries.

Amazon PayThe company deserves praise for heavily investing in its business and hiring full-time workers at a time when many other firms are playing it safe. Even an extremely healthy economy is going to include jobs that don’t pay very well. But the fact that President Obama has chosen an Amazon fulfillment center as the backdrop for a speech on how to bring back strong, middle-class jobs illustrates the difficult position the government finds itself in as it tries to encourage a more robust recovery. SOURCE: Amazon’s Hiring Spree Shows Difficulties for American Middle Class | TIME.com

I certainly hope that Amazon is serious that its culture and business model are based on rapid innovation, flexibility and open lines of direct communication between managers and associates.” To be competitive in the coming years will demand a loyal workforce who is willing to adapt to changes as needed. It will require companies to treat their employees with respect and as valuable member of a united team. If unions can adapt to this new paradigm then they will have a place in future society.  If not they will, as the current trends indicate, simply go the way of the dinosaur.

Pope attacks mega-salaries and wealth gap…

2013-12-12_09-12-42VATICAN CITY (Reuters) – Pope Francis said in the first peace message of his pontificate that huge salaries and bonuses are symptoms of an economy based on greed and inequality and called again for nations to narrow the wealth gap. In his message for the Roman Catholic Church’s World Day of Peace, marked around the world on January 1, he also called for sharing of wealth and for nations to shrink the gap between rich and poor, more of whom are getting only “crumbs”.

“The grave financial and economic crises of the present time … have pushed man to seek satisfaction, happiness and security in consumption and earnings out of all proportion to the principles of a sound economy” he said. “The succession of economic crises should lead to a timely rethinking of our models of economic development and to a change in lifestyles,” he said….

Since his election in March as the first non-European pope in 1,300 years, the Argentinian has several times condemned the “idolatry of money” and said it was a depressing sign of the times that a homeless person dying of exposure on the street was no longer news but a slight fall in the stock market is.

SOURCE:  Pope attacks mega-salaries and wealth gap in peace message – Yahoo News.

I was pleasantly surprised to see that Time Magazine had chosen Pope Francis as its person of the year.  I dreaded the idea that Senator Cruz, who was in the top ten list might be chosen! Time has a way of  sometimes wanting to shock its readers with their unpredictability.  I am glad that saner minds ruled this year.

Anyway, getting back to the story and quote above, I was truly inspired by his words about the wealth gap. He does indeed seem to be a Pope for the people and not just an administrator as the previous pope was often cited to be. The wealth gap, in the whole world not just the U.S., is becoming so extreme as to threaten our very humanity.  With the increase in riches by a very small minority also comes the increase in power to perpetuate  the suppression of the majority.

Pope Francis gets it and is not afraid to let the world know what he thinks. Narrowing the wealth gap as the pope suggests means taking the power back to the people and away from the privileged few. That is no small task!  One great thing about this country is that our elected officials who make up most of the rules are still elected by the majority of its citizens. Now, if only we could get the ignorant, or at least misinformed, voters to realize that fact things might change in our country and the world.

Here is to you Pope Francis. Keep your voice loud and clear in this area and all the fellow Catholics in your clan take to heart your words and actually try to put them in action. Wouldn’t the world then be a better place??

Buying Innovation Instead Of Creating It…….

Innovation“Now is the time to build on this momentum and accelerate our share and profits in phones,” Microsoft CEO Steve Ballmer said in an email to Microsoft employees. “Clearly, greater success with phones will strengthen the overall opportunity for us and our partners to deliver on our strategy to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

SOURCE:  Microsoft Buying Nokia’s Devices and Phone Business for $7 Billion – ABC News.

I was around in the beginning of Microsoft. I was a very early implementor of the Office programs. They were a brash company of young hippies who dared to take on the monolithic IBM corporation. They were just too young and naive to know that they couldn’t play on the same field. That’s what makes for the true game-changers in today’s world. The paradigm shifts occur most frequently from these brash startups.

But as is usual success breeds complacency. After you get so big you start worrying about profits and such above innovation. It seems almost impossible to prevent that from happening.  Apple seems to be about the only company that has at least today  that been able to defeat this trend. But, even for them, the writing seems to be on the wall now that Steve Jobs is gone.

Getting to the point of this post, when a company becomes too big to really be a success at innovation they try to buy it instead of creating it.  Microsoft has spurred more billionaires than most any other company. They try to buy small companies and the somehow hope to inherit their zeal. Most often all that happens is the original owner, with his recently acquired billions just moves one to something else. Buying innovative zeal seldom seems to work but it is almost a last-ditch effort for most large corporations. I personally was involved in an attempted merger between two very different work cultures. Within a year it was obvious to everyone that nothing productive would result.

It is a fact that the vast majority of employment in the U.S. comes from the mega-corps. Companies with more than 500 workers employ about three-fourths of the current workforce. So when people say that small business drives America that is just not true when it comes to actual employees but it is generally true with it come to innovation.

You Get What You Pay For??? Well Not Always….

For two decades close to 40 percent of the highest-paid CEOs in the U.S. have performed abysmally, a new report asserts.

These CEOs, according to the report, “ought to be exemplars of value-added performance,” given the prevailing notion that executives earn their high pay by adding value to their companies and to the U.S. economy at large. “Our analysis reveals widespread poor performance.” SOURCE: Highest Paid Worst Performing Chief Executives – ABC News.

I generally believe in the saying in the title of this post but obviously it doesn’t apply to all circumstances.

Given that yesterday was a celebration of the American worker I thought today should be about those at the top of the heap.

Why do corporate boards allow contracts for CEOs to contain clauses that basically say “no matter how bad I do, when I leave you will pay me and extra $50 million”. Of course the answer to that is that most board members are also CEOs or wanna-be-CEOs looking for a little quid pro quo. It is widely known that the ratio between the average worker of a corporation and the CEO ratio has gone completely haywire in the last few decades. CEOs make orders of magnitude more than they did decades ago while their workers haven’t seen a raise at all during that time period.

It would be one thing if the CEO actually added value to the company he works for but in nearly half the companies he fails to do that. “You get what you pay for” just doesn’t apply to the top of the corporate heap or probably any other position in that stratosphere.

It is time for all us shareholders with our vote demand that the CEO  must show some value-added before we pay him even close to the exuberant salaries he presently draws. And certainly no more “golden parachutes” for him or all those “yes” men around him. That accomplishment would make for a truly happy Labor Day in the years ahead.

Thinking Long Term….

BezosThe Post, according to its own announcement of its sale for $250 million, has suffered a 44 percent drop in operating revenue over the past six years. Like other once-prosperous big-city dailies, it has been wounded by the defection of readers and advertisers to Internet competitors. No major U.S. newspaper now claims to have a business model that would guarantee its survival, let alone its success long-term.

But the “long-term” is where Bezos’ mind naturally likes to go, says Brad Stone, senior technology writer for Bloomberg Businessweek. Stone’s forthcoming book “The Everything Store: Jeff Bezos and the Age of Amazon” will be out this October

SOURCE:  Bezos’ Weird Pet Projects Now Include Washington Post – ABC News.

I have been a fan of Amazon since its inception in 1994.  Jeff Bezos, who founded the company, was unlike almost everyone in the corporate world. The Wall Street Journal was constantly lambasting him because he seemed totally unconcerned the Amazon was not making a profit for several years. But as this article above states Bezos is one of those few corporate leaders who focuses on the long term.

Instead of making a quick and large profit Amazon he focused on doing things right for the customer and growth. I don’t believe anyone in the business world is as customer focused as Amazon. They simply do it right. They almost always exceed my expectations.

Most CEOs around today are focused on their future options. That is they want to show a big profit early, collect their stock options, and then get out with the MEGA-bucks golden parachutes.

There are a few fundamental reasons that American industry is losing it hold on the corporate world. One is the lack of long term thinking. Another is that the larger companies are stuck paying for an ever increasing medical insurance for their employees where their international competitors are not holding that burden. We are about the only country in the world that requires their businesses to take on that load. For the most part we learned our lessons about producing quality products in the 1970s and 80s but many are now falling back into low quality by accepting some Chinese goods made at extremely low labor costs and very thin quality.

When our companies finally start thinking long term and we recognize that tax payer funded health care should be a right not an entitlement to an ever increasing few, we may just find our way back to the top of the heap.

I’m not sure how Mr. Bezos is thinking that the Washington Post buy is good for the long term? Maybe he is looking more that their talented reporter pool instead of the paper product they put out on a daily basis.  After all, it takes grunts-on–the-ground to come up with all the stories and info in the on-line world.

Training Your Workers…..

skilledST. PAUL, Minn. – We previously reported that one thing holding back the economic recovery is there just aren’t enough skilled workers. But some companies have decided if they can’t find qualified employees, they’ll just create them — as we found out in St. Paul, Minnesota….

Tuition is $4,000, but the coalition provides scholarships. Later this month, the first class will graduate 18 students.  How does that compare to building a successful business? “It’s bigger,” said Guarino. “It’s bigger. It’s more important.”  For companies needing highly-skilled workers, it is a way to do good while ensuring they do well.

Source:  Minn. companies are “building” new workers from scratch – CBS News.

In my day it was common practice to bring in fresh recruits and train them for the job you needed filled. I don’t know when that fell out of favor but it is nice to see it coming back at least in a small degree. Sometimes all we need to be successful is a little help. I have proudly proclaimed more than once on this blog that I worked my way through college. I worked up to forty or more hours per week along with taking almost a full course load. It was tiring but I was young and didn’t quite realize that. I probably averaged four hours sleep or less most nights. But, given the cost of most college educations today I’m not sure what I did is even possible anymore.

Getting back to the point of this post, sometimes all we need is a little help along the way. A little boost here, some encouraging words there, or maybe a few bucks to bring it all together. I am a firm believer that the best moral values in this country belong to us Midwesterners. We seem to have more empathy and less narcissism than most other regions of the country. We don’t, for the most part, strut around telling everyone how great we are. Instead we just put our nose to the wheel to make things happen. It is nice to see that this program of helping develop skilled workers is from a Minnesota company.

Sometimes it is necessary to look back in order to figure out how to go forward. This maybe is one of those times. If you can’t go out in the market to get the necessary skilled workers you just create them yourself.  I know there will be those who are afraid that once they put all the effort to make a skilled worker that they might end up going somewhere else, even a competitor.  But my Midwestern values say that many will be loyal to those who helped them get where they are.  Loyalty is another of those “old-fashioned” values that disappeared during the Reagan years but who says it can’t be resurrected again if some company or group takes the first step of valuing its workforce.

When it comes to vacations, the U.S. stinks…

Holiday Time Off“A key issue is that we’re a more unequal society than all of the countries we looked at, and that creates a different work environment where people feel they may be penalized for taking time off,” Schmitt said in an interview.

In the states, that fear at least partly reflects the widening gap between what top corporate managers earn and what rank-and-file workers bring home, Schmitt suggested. In the U.S., where corporate culture often seems to equate taking time off with slacking, many employees feel they are effectively penalized for going on vacation, as promotions and other rewards go to people more able and willing to work around the clock.

Source: When it comes to vacations, the U.S. stinks – CBS News.

This is probably one of the saddest things to happen to our country. In my younger days we all used to thoroughly enjoy our annual vacations. Now we seem to be pretty much at the bottom of the list in this regard. We no longer have union representation to get us a few more paid days off as we used.  Let’s face it, our employers just don’t see much sense in paying us to not come to work.

There are just too many of us who are so insecure in our current employment to even dream about asking our bosses for a few days off. We are afraid if we do that he will start looking around for a less demanding employee. From the graph above most of the rest of the OECD nations get about three times the vacation/holiday time off as we do.

I’m sure that the upper echelons of the business world still get their vacations. After all they have all those vacation homes they have to visit. But the grunts at the lower levels had vacations stripped away years ago. Since teachers are primarily a publicly funded occupation and have strong, probably too strong, unions they still manage to get huge amounts of time off but they are about the only ones but that will likely change in the not too distant future.  The private sector threw vacations out the window when they jettisoned our pension funds,  healthcare and even our sick days.

They say that we Baby Boomer are probably the last to see our work environment to be better than our parents.  How those who followed us let that happen I have no idea.  I salute all those countries from France to Canada who have managed to keep hold of more than two weeks off a year.  Good for them….

Lawmakers say Apple dodged billions in taxes…

Apple CEO

A Senate panel late Monday accused Apple (AAPL) of using what it called a “complex web of offshore entities” to dodge billions of dollars in U.S. income taxes.

Source: Lawmakers say Apple dodged billions in taxes – CBS News.

If we could just manage to get a Centrist party in control of those folks in Washington one of the first things I would want them to attack is our bloated tax code. The 10,000 plus pages of rules are at the core of the above article. Of course businesses want to minimize their tax load in order to increase their profits.  That is, after all, what the free enterprise system is all about. Profits are the sole driver.

One of my major themes in my life lately has been around the word “Simplify”. Our world is just getting too complicated when it doesn’t have to be. Let’s throw out those 10,000 pages and replace them with just a handful. Let’s take away the means for corporations to move massive amounts of their income into tax exempt entities.

Let’s just make income well, income. If it comes in it is income and you pay a certain percentage of it as taxes to support our government and its business. For the individual that means you pay the same rate for income for profits from your investments as you do from the sweat of your brow. That means if you inherit income you pay your taxes on that amount in order to pass part of your windfall on for the common good.  You didn’t earn it so it is taxable income to you. For corporations money coming in is income; doesn’t matter if it was from a foreign sale or one in the U.S.

Lets Get a Centrist party in power and direct them to simplify our tax code. After they accomplish that then I would want them to give us “real” universal healthcare; not that pretend extremely watered down version called Obamacare. But first things first I guess and that is getting centrists into power in our government. Click on the logo below to see more about that.

Centrist Party

Fertilizer plant that exploded in Texas carried $1M policy

Fert plant“The bottom line is, this lack of insurance coverage is just consistent with the overall lack of responsibility we’ve seen from the fertilizer plant, starting from the fact that from day one they have yet to acknowledge responsibility,” Roberts said.

Roberts said he expects the plant’s owner to ask a judge to divide the $1 million in insurance money among the plaintiffs, several of whom he represents, and then file for bankruptcy.

He said he wasn’t surprised that the plant was carrying such a small policy. “It’s rare for Texas to require insurance for any kind of hazardous activity,” he said. “We have very little oversight of hazardous activities and even less regulation.”

Source: Fertilizer plant that exploded in Texas carried $1M policy – CBS News.

I have long known that Texas is the execution capital of the world but didn’t know about its dismal lack of oversight until I read the above.  For six years I was a sole-proprieter cabinet maker. I sold a few thousand dollars worth of furniture and cabinets each year; not enough to make a living on but it did supplement my pension. In that small non-hazardous (except maybe to me) business I carried a $1 million insurance policy. That is just standard in this part of the country.

When I learned that a large fertilizer plant near such a dense population carried no more than I did I was just astounded! How could oversight body have allowed this? They say there were no inspections of the plant in several years due to the lack of taxes to fund them.  I’m sure that the hundreds of people who were killed or maimed or their families now regret allowing such disgraceful oversight by their government officials.

Fodder For Our Prison System??

jail cell 2HOUSTON — As school districts across the country consider placing more police officers in schools, youth advocates and judges are raising alarm about what they have seen in the schools where officers are already stationed: a surge in criminal charges against children for misbehavior that many believe is better handled in the principal’s office….

Such criminal charges may be most prevalent in Texas, where police officers based in schools write more than 100,000 misdemeanor tickets each year, said Deborah Fowler, the deputy director of Texas Appleseed, a legal advocacy center in Austin. The students seldom get legal aid, she noted, and they may face hundreds of dollars in fines, community service and, in some cases, a lasting record that could affect applications for jobs or the military.

Source: With Police in Schools, More Children in Court – NYTimes.com.

As if we needed more opportunities to put our citizens into the prison system; we are far and away already the number one incarcerater in the world. Now it seems, especially in Texas that we are dipping into the youngest generation for additional fodder.

I don’t know how the NRA feels about our prison system. Since they seem to have so much sway with our government representatives maybe they should chime in here with their opinions. I know that our prison systems were severely privatized by Mr. Bush and most Republican governors in the last decade or so. I also know that those corporations are among  the most profitable in America. But to increase profits, and isn’t that the sole purpose for corporations, means more prisoners.  I know there are documented cases of judges getting kick-backs for sending more people to prisons but I just don’t know how wide-spread this is.

Lets get back to the core of this post. More police in our schools as the NRA is advocating is adding to misdemeanor tickets in a serious way.  Is that a necessary requirement for protecting them from a nut job with a legal assault weapon?  Maybe there is some grand conspiracy that I am missing out on here. :)

Hoorah for Elizabeth Warren….

Warren Elizabeth“Most big corporations trade well above book value,” Warren said, referring to the measure of a company’s assets minus liabilities. “But many of the Wall Street banks right now are trading below book value. And I can only think of two reasons why that would be so. One would be because nobody believes that the banks’ books are honest, or the second would be that no one believes that the banks are really manageable.”

Warren’s comment on bank accounting came after she repeatedly — and apparently rhetorically — asked a panel of top regulators to cite the last time they had hauled a big Wall Street bank into court rather than settled. There were mostly halting responses and promises to get back to Warren with more information at a later time. That question — why there has not been more accountability for top bankers in the wake of the 2008 financial meltdown — taps into a deep vein of public anger on both the left and right. And it is Warren’s most potent political weapon.

Source: Elizabeth Warren strikes fear into Wall Street – Ben White – POLITICO.com.

I don’t think I am the only person who is shouting hooray for Elizabeth Warren, the new senator from Massachusetts. Ms. Warren is a former Harvard Law Professor who is currently taking the banking sector by storm or maybe I should say tornado. She is striking fear in the banking sector of both the big bank CEOs and the regulators. It is about time someone struck back for the people.

When the financial sector did an almost meltdown in the last year of the Bush administration there was rage throughout the country. Especially when the government had to fork over billions of bucks to keep them afloat. It seemed the “too big to fail” tag put on them by both the Bush and later the Obama administrations varnished over the severe faults found in the banking sector.  No one was prosecuted or otherwise punished for the gross risks they took in the pursuit of profits or for the regulators who were derelict in their duties in allowing them to do so.

People screamed about the “too big to fail” mantra for a few months and then  our government seemed to move on to the next  disaster without really addressing this one. Within a year the CEOs and upper management of the big banks were back at the trough getting their million dollar bonuses. It was not until this Harvard law professor went after them that anyone seemed to notice.

I loved the way Senator Warren chastised the regulators who were supposed to protect the taxpayers  for not doing their jobs either before or after the meltdown.  When she asked them how many Wall Street banks were prosecuted in court they were too ashamed, or maybe a better word was embarrassed, to say that none were; they settled all the matters out of court with usually a slip on the wrist. To me and I hope many of you, I don’t see any difference between what these guys did and a guy who goes into a local branch and robs it. That guy is probably behind bars for the next twenty years  while all the bankers are back to doing almost the same things they were before.

Here is to you Senator Warren. Keep up the attacks. I hope you can land some of these guys in jail. That would be the only way that future bankers would learn that actions have consequences and those consequences are jail time for them.

Our CEO Is Exceptional So…..

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Cash MountainHow did we get into the problem of insane pay for U.S. corporation leaders? The problem basically originated from the title above. Every board of directors wants to pat themselves on the back for selecting that exception person who will lead their company to outperform all the others.  They need to do that so that they can somehow rationalize their board being paid thousands of dollars per hour for their time. So the statement is made:

Our CEO is exceptional so we must guarantee him a paycheck in the top 20% of all CEOs.

On the surface this is a rather innocuous statement that is bound to be true for some. But the problem is that almost every board now makes this statement and backs it up with a iron-clad golden parachute to match.  So when 100% of the CEOs are to be paid in the top 20% of all CEOs it becomes an impossibility to actually occur. The only thing that can happen is that CEO pay goes through the stratosphere seeking a never-ending top 20%.

The impossibility that all CEOs can be in the top 20% seems rather easy for most people to understand so why can’t the typical board of directors figure it out? Again there is a again simple answer and that is most CEOs are actually on the board of directors for several other companies. So, when the above pledge is made they also guarantee an ever dramatic increase in their own pay.  This is the typical “I’ll scratch your back if you scratch mine”.

There is one simple solution to this dilemma and that is for the shareholders to put an end to it. That is where more greed comes into the equation. Everyone who buys stock in a company want the cost per share to increase dramatically so they can rake in some big profits. In order to do that they must think that the guy in charge is the best in the business. Or at least in the top 20%.  You get the idea.

The only way to stop this ever escalating CEO pay is for the stockholders to cause it to end. It will not be an easy matters as the CEO and the board of directors will probably fight tooth and nail for their wealth. But it can and actually does happen once in a while.  So, the next time you start complaining about CEO pay remember that you the stockholder are allowing it to happen. Even if you only have one share in a company you have power to cease this ridiculous practice.

But I’m just a simple guy so what do I know.

The Turning Point…..

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“Government is not a solution to our problem, government is the problem.”  – Ronald Reagan

ReaganSometimes when we look back at history we wonder how did we get to where we are.  We often have trouble pinpointing a particular person or date to where it all began. On January 20, 1981 when Ronald Reagan uttered the words above  he ushered in a new breed of Republicans. These particular words were the turning point to gridlock and jumping from crisis to crisis that we see today.  It is also the specific moment that I turned away from the Republican party to look elsewhere.

No longer was government to do the people’s business but instead they were to just get out-of-the-way and let our corporate elite run the country as they had during the Robber Baron days a century before.  Government had no meaning to those who swallowed those words hook line and sinker. The safety net for our citizens lost its meaning to them.  This was the turning point where we backed away on our pledge to make sure our citizens would not starve. This was the point where “entitlements” to our poor or aged became a dirty word for some. Government became a hindrance instead of the benefit. The people’s business took a back burner to corporate interests or was actually thrown entirely off the stove.

I believe that any serious student of U.S. history knows that capitalism without regulation was a pre-cursor to the death of the middle class. It was a point where those trying to keep our food and drugs safe were stymied by lower and lower budgets. The agencies responsible for our banking system and financial sector were gutted. Taxes which were from that point on deemed almost evil were difficult to obtain to maintain our countries infrastructure and safety nets. Common sense and compassion took a back burner to greed and corruption. The people’s business suffered greatly.

stoolAnother turning point that compounded these same problems  was the sudden popularity of the MBA program in this country. That was the point where employees changed from being an asset to be treasured and treated with respect to being a liabilities that needed to be removed or gotten at the lowest possible cost. I remember very distinctly when that happened in the corporation that I was employed.  Up till that point most employees were very loyal to the companies that hired them. Chevy guys would never dream of buying a Ford and visa versa. Suddenly employer’s loyalty to workers disappeared. Benefits were taken away. Wages were stifled in order to increase corporate profits. What used to be a three-legged stool of  owners/employees/customers was suddenly taken into severe imbalance.

These two events that created the “government is the problem” Republicans and “employees are the problem” business leaders caused a dramatic shift in our economy.  When workers lost their living wages they were no longer able to buy the goods and services they had previously. To counter the loss of buying employers cut wages and benefits further. Anyone without an MBA could clearly see this cause/effect but it just didn’t seem to occur to those who  now are on most rungs of the corporate ladder.

To end this post on an upbeat, I believe that the day is coming when a balance will be restored. The majority of us will realize that our government needs resources to keep us and our world safe. Employers will realize that without a living wage their workers will never buy an increasing number of the products they desire to make.  I am an optimist. I believe this day will come. I just wonder if we will be able to pinpoint that particular point in time as easily as when Republicans became the party of “government is the problem”

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