Category: Government Failure

Americans Believe Recession (Depression) Is Not Over

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

From a CNN story –

Seventy-four percent of Americans believe the economy is still in a recession, according to a new CNN/Opinion Research Corporation poll. Only 25 percent think the downturn is over.

One-third of Americans say the recession is serious, while another 29 percent characterize it as moderate.

Only the elite in the beltway believe the ridiculous idea that we have successfully come through the recession. I don’t understand how the numbers could add up to anything but a continuing crisis.

Unemployment – 9.6 percent – This doesn’t count those who have given up seeking work, so the real number is probably closer to 15.

Financial Markets – All Better? – NO – Federal Reserve Governor Kevin Warsh said on Tuesday that financial markets have not fully recovered after the financial crisis and that economic growth is currently weighted to government expansion.

Hiring – All better? – NO – U.S. chief executive officers’ view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

Consumer Confidence – Optimistic? – NO – When it comes to attitudes about the economy, Americans continue to see the glass as half empty, according to the latest reading on consumer morale. The Consumer Confidence Index fell to 48.5 in September — its lowest level in 7 months — and down from August’s negatively revised level of 53.2, the Conference Board, a New York-based research group that compiles the index, said Tuesday.

How long can I keep going? How long have you got?

The politicians and the commentators feel your pain from a safe distance. You’re just more economic data and an annoying one. If you would only believe, everything would be fine. Everybody is doing well. You just don’t see it because you can’t see the big picture obstructed as it is by your suffering. Don’t be pessimistic. Don’t you know that this is America and a good attitude can solve all your problems?

I get tired. You get up and you hear these criticisms of hard working Americans and the utter lack of comprehension of the beltway elites as to what the world is really like, and the next day it happens again. The cycle never ends. Americans are lazy, self-indulgent, and fat. They need to get tough, get smart and do what we, the real people, the people that count do. Learn from us, they say. These creatures who don’t live in a world of labor and pain, who live by manipulating money, shaping opinion, and other ill defined processes. They know how to fix your lives. Right, and I can build a nuclear weapon with a little barb wire and an old tire.

Well, tomorrow will be another day and the cycle will begin again.

James Pilant

My Buddy, Andrew, Comments On The Posting – Are Businessmen Smarter Than Children

On By southwerkIn business ethics, Capitalism, Government Failure, Philosophy of Business

As usual, Andrew has something clever to add to one of my posts. I would like you to read it. jp

A few years ago, I did an internship at the CSX Rail Yard in Waycross, GA. One day in the middle of september, I came in to hear that the EPA man was coming today to inspect the yard. As the intern, I was at the bottom of the food chain, and it was my job that day to escort the EPA man around to all of the facilities in the yard.

The inspection lasted until a little after lunch time. At almost every facility we went to, he wrote stuff down in this book he carried with him. At the end of the inspection, we went and met with the Plant Manager of the Locomotive Service/Repair Station, who is the man in charge of the entire yard. That day, CSX got fined $350,000 for environmental hazards and failure to comply with EPA regulations.

What suprised me is the reaction to this. CSX considered this a victory! “We ONLY got charged $350,000!!”. I understand that type of money is a drop in the bucket for what the major railroads make, but the moral issue there is what upset me.

I just thought I’d share my example to help further verify what you learned in law school.

International Price Fixing

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business

You don’t make real money by competing. You make real money by not competing.

Price fixing is one of the tried and true methods of generating great profit. You form an alliance with all the others in your business and agree nobody gets a better price.

China Airlines has agreed to pay 40 million dollars in fines for the practice.

They were fixing international cargo rates for shipments to the United States from 2001 to 2006. I find it difficult to believe that their profits were anywhere near as small as 40 mil. Since it was a conspiracy, who else was involved? I want to see some prosecutions. I want to see some justice. Although the pro-business policies of the current administration would seem to mitigate any real penalties for these kinds of practices.

James Pilant

Bank Bailout Estimated Cost: 14 Trillion + (via Pilant’s Business Ethics Blog)

On By southwerkIn business ethics, Capitalism, Government Failure, Philosophy of Business

This is from last year. However, few Americans are aware of the loan guarantees given to banks aside from the direct TARP funds. We should never forget the staggering money sacrifice by the taxpayers of the United States to save a flagging financial sector.

James Pilant

Bank Bailout Estimated Cost: 14 Trillion + According to a report by Nomi Prins and Krisztina Ugrin, the money paid out to save the banking industry is currently 14 trillion dollars while the money paid out in the stimulus and other responses to the economic crisis total almost 2 trillion dollars. So, the banking industry gets 14 trillion and regular Americans get a little less than 2 trillion scattered over hundreds of programs. Did you know that we can pay off every sub prime mortgage in … Read More

via Pilant's Business Ethics Blog

He’s Back! Like Hannibal Lector, He Just Keeps Going!

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business

I’ll let the picture speak for itself.

Did White Collar Crime And Fraud Trigger The Meltdown?

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Government Failure, Philosophy of Business2 Comments

I’ll let the video speak for itself. But in my mind, the answer is a solid yes. It’s the cost of the pervasive lack of business ethics, a willingness to commit crimes in the pursuit of enormous amounts of money.

Fox Parent Company News Corp Off Sources Software Development To North Korea!?

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business

Fox Mobile owned by News Corp. owned by Rupert Murdock off sources software development to North Korea? Isn’t North Korea socialist? Wait a minute … they might be communist, oh …, they are communists. Wow, Do you think that someone should tell them that providing aid to the North Korean Communists might be a bad idea?

I just don’t get it. The parent company of Fox News cutting deals with a communist nation (and since they can’t do business directly using front companies to exchange the goodies.)

Apparently outsourcing is so important to profit we can overlook a few little problems.

This kind of support is one of the few ways that North Korea can raise money since it is under sanctions by the U.N. and specifically, the United States for its development of nuclear weapons. The North Koreans stand accused of several of the most successful cyber attacks in history and this kind of support bolsters their capability at cyber warfare.

Hey, don’t believe me. Listen to this guy.

“Any sort of transaction that gives cash to the North Korean government works against U.S. policy,” said James Lewis, a senior fellow at the Center for Strategic and International Studies, a Washington-based policy group. “The coding skills people would acquire in outsourcing activities could easily strengthen cyberwar cyber-espionage capabilities. Mobile devices are the new frontier of hacking.”

Well, on the other hand, we’re at peace with the North Koreans. Oh, wait a minute!  …  You tell me we don’t have a peace treaty with the North Koreans and are technically still at war. That can’t be good.

Does that mean that News Corp. is providing aid and support to a direct enemy of the United States?

Well, they’re not really a threat right now, I mean, aside from that nuclear weapon thing, right?

Will North Korea’s saber rattling lead to war? Thus reads the headline for May 25th of this year from McClatchy News Service. So, it would appear that they are actively considering direct war with the United States.

North Korea? Huh, I’ve heard something about them. Would that be the guys with the fourth largest standing army in the world? Would that be the ones we don’t have diplomatic relations with? Would that be the one led by a repressive dictator who has been described as being sadistic, paranoid, antisocial, narcissistic, schizoid, and schizotypal. Would that be a country led by the afore mentioned modest, retiring gentleman whose simple titles include
* Party Center of the WPK (1970’s)
* Vice-Chairman, WPK Central Committee (1972–80)
* Dear Leader (Chinaehan Jidoja) (Late 1970s-1994)
* Intelligent Leader (1973–84)
* Member, Presidum of the Supreme People’s Assembly of the DPRK
* Secretary of the Worker’s Party of Korea (1980–94)
* Supreme Commander of the Korean People’s Army (December 25, 1991-)
* Marshal of the DPRK (1993-)
* Chairman, National Defense Commission of North Korea (1993-)
* Great Leader (Widehan Yongdoja) (July 1994-)
* General Secretary, Workers Party of Korea (1997-)
* Supreme Leader of the Republic (2009-)

It’s possible that they are willing to tell us exactly what they think of this nation. Well, they are willing to. Their attitude toward the United States might be summed up nicely by this statement released by the North Korean Government –

Pyongyang — Of late the U.S. Department of Defense formally announced that the U.S.-south Korea joint military maneuvers would be kicked off soon. These maneuvers are, to all intents and purposes, dangerous saber-rattling aimed at rounding off their preparations for joint military actions, pursuant to their scenario for a war of aggression against the DPRK and mounting a surprise preemptive attack on it.

The U.S. is contemplating staging a joint anti-submarine drill under the pretext of coping with the “intrusion” of DPRK’s submarines into the waters of the east and west seas of Korea. But lurking behind these moves are a design to invade the DPRK to put the whole of Korea under its control and a more important aim to establish military hegemony in Northeast Asia and pressurize and contain other big powers by force of arms in this region.

As Northeast Asia including the Korean Peninsula is of great military and strategic importance, the U.S. considers the peninsula, a gateway to the region, as its vantage point for carrying out its strategy of Asian aggression.

Cold War came to an end but the U.S. ambition to dominate the world remains unchanged. Its moves for a war of aggression have become evermore pronounced to carry out the strategy to put Asia and the Pacific under its control.

Asian countries will never remain an onlooker to the U.S. moves to hold military hegemony.

If enemies dare provoke a war, the army and people of the DPRK who have bolstered up the war deterrent in every way will wage an all-out struggle and demonstrate the mettle of Songun Korea.

The U.S. would be well advised to give up its foolish dream to control other countries and dominate the world by dint of its strong-arm military policy.

Let’s sum up. News Corp. owned by Rupert Murdoch, the company that runs Fox News sends money to North Korea to pay their software developers to make games for mobile phones. This is done through a number of intermediate companies so very, very technically, News Corp. can deny involvement. This money provides aid and support to a nation which has nuclear weapons for which is under sanction by the United Nations and United States. The nation of North Korea has been actively threatening war with this country and can be described with no exaggeration as an enemy of the United States.

This is the logical result of a corporate ethos devoted only to money. It doesn’t matter who you trade with as long as you make money. It does not matter if it can cost lives or threaten the strategic interests of the United States. It does not matter that the company expresses continued, constant support for capitalism and continuous contempt for policies to the left of that. As long as the question is one of money, there are no borders, there are no beliefs, there are no other considerations.

Do you like that? Is Milton Friedman laughing from his grave? After all, didn’t say that a corporation’s responsibility was solely to make the maximum profit for the shareholder within the rules of the game? This is all technically legal. Isn’t this exactly where that belief system leads?

So, the United States of America is a secondary consideration in the quest for profit. Maybe that should alarm you?

James Pilant

Learn About The Magic Word – PREEMPTION

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure1 Comment

Preemption is a legal device that gets rid of state regulation by replacing it with federal regulation. Without preemption, a corporation might have to be worried about multiple lawsuits and criminal prosecutions. By preempting the states, the feds make state regulation of corporations impossible.

The America I Grew Up In

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure

This is a quote from Rogue Columnist –

I grew up in an America that had created the greatest middle class in the history of the world, a great civilization not just a great market. Where people were citizens, not consumers. Where we landed men on the moon and would always be on the forefront. Where Martin Luther King Jr. said, “Let justice roll down like waters and righteousness like a mighty stream…” And we worked for that. But we’ve become a different America and different Americans. For King warned, “A nation or civilization that continues to produce soft-minded men purchases its own spiritual death on the installment plan.”

I fully agree. I believe in the unity of citizenship and a cooperative ethic recognizing that we are all in this together particularly in these very bad times.

James Pilant

Shareholder Power?

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business, shareholder

One again, I’m going to lament that the people who own the corporations don’t seem to have any actual control over them. Let me quote Nouriel Roubini from his excellent essay, Gordon Gecko Reborn.

There are also massive agency problems in the financial system, because principals (such as shareholders) cannot properly monitor the actions of agents (CEOs, managers, traders, bankers) that pursue their own interest. Moreover, the problem is not just that long-term shareholders are shafted by greedy short-term agents; even the shareholders have agency problems. If financial institutions do not have enough capital, and shareholders don’t have enough of their own skin in the game, they will push CEOs and bankers to take on too much leverage and risks, because their own net worth is not at stake.

At the same time, there is a double agency problem, as the ultimate shareholders – individual shareholders – don’t directly control boards and CEOs. These shareholders are represented by institutional investors (pension funds, etc.) whose interests, agendas, and cozy relationships often align them more closely with firms’ CEOs and managers. Thus, repeated financial crises are also the result of a failed system of corporate governance.

That’s what I think too.

Simple statement – We hear over and over again about property rights but start talking about actual shareholder control, power held by the actual property owners, howls of outrage cloud the horizon.

The people that own the corporations should have say about what they do.

James Pilant