Seriously, does anyone work these days?
Too Much Time on Their Hands
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Maybe You’re a S***ty Cameraman!
Matt Damon is one of my favorite celebrities. Not that I have any deep insights into the man – I don't know any celebrities personally – but based on what I've seen, read and heard about him I like the way the guy rolls. Check out this excerpt from a press event where he takes on a reporter and camera man. You have to watch to the very end for the kicker:
Independence
I've never belonged to a political party and although I understand why belonging to political parties is attractive to some folks I just can't see affiliating myself with a group that I know I'm going to disagree with on a healthy percentage of issues. Let's just say that in my lifetime I've been profoundly disappointed by both of the major political parties in America and amused/frightened by all of the fringe parties I've come across.
On the other hand I'm scared crapless of a no-party system. Can you imagine how hard it would be to get anything done without the parties? They do provide a structure for negotiations; people who are philosophically aligned on a majority of issues agreeing to negotiate through a representative with another group that is likewise made up of people who are generally in agreement on most issues. So yes, I guess I'm a bit of a hypocrite because I do appreciate what the party structure provides but I'll be damned if I'm going to be a member of a party.
Today's news brings two stories that I think highlight the pros and cons of our party systems. Here in North Carolina the General Assembly just voted to override the Governor's veto of a controversial abortion bill. One member of the Senate Republican caucus originally voted against the bill before it was vetoed by the Governor, but when the override vote came along he abstained, which in effect enabled the override. Here's what Doug Clark wrote in the Greensboro News & Record:
"He said the Senate Republican caucus made this abortion vote a 'caucus issue,' a vote where members would face sanctions if they voted out of line with other Republicans. Such sanctions could range from everything from being tossed out of the caucus or losing committee chairmanship to facing party-sponsored opposition in a primary."
Bingham yielded. He didn't vote yes or no, but simply took a walk. Without his opposition, the Republicans captured the necessary number of votes of "those present" to override the veto…
This kind of bullying — and it goes on in both parties — clearly is effective, but it wouldn't be if enough legislators would stand up for what they truly think is right. If the rank-and-file break ranks, the power of the leaders erodes.
Good legislators have backbone, and good legislation is not likely to be achieved by the threat of discipline.
I agree that legislators should always vote their conscience, but I also think that when you commit to a party you're committing to upholding the party's position and it would be difficult to turn the party for support on a bill you're sponsoring if you don't support the party's position on other bills. I'm not saying it's right, but I think that's one of the problems inherent to political party membership.
The other news item is the increasingly frantic debate in Congress about raising the debt ceiling. The news du jour is that the Republican Speaker of the House can't get his party unified behind a Republican proposal in the House. It seems that members of the conservative Tea Party segment of the Republican party, a group that swept into the House in last year's mid-term election, are refusing to budge from their own philosophical ground and are refusing to play ball with the Republican party leadership. In other words they want to vote their conscience and they're being beaten up by the party bosses for it:
A frustrated House Speaker John Boehner had a blunt message Wednesday for his cavalier Tea Party colleagues: "Get your ass in line" behind the GOP's debt ceiling plan…
Boehner believes Senate Democrats will cave if Republicans in the House can rally behind his nearly $1 trillion proposal to raise the nation's debt limit ahead of an Aug. 2 deadline, when the Treasury will run out of money to pay all its bills.
So "get your ass in line," Boehner demanded.
His spanking of rank-and-file Republicans came after it looked like an all-out war was erupting within the House GOP, which has nearly 100 Tea Party fiscal hawks.
Many Tea Party-backed conservatives insist Boehner's debt plan is too soft.
The infighting has forced Boehner to postpone a vote on his proposal until Thursday.
When you think about it from the individual legislators' perspective they're damned if they do and damned if they don't. Defy the party bosses and vote their conscience? Well you're gonna be skewered by the party and risk losing their backing when you need it. Toe the party line even if you don't agree with it on a particular issue? You risk being seen as a party hack who's more loyal to the party than the country (or state or county) and you could lose favor back home. That, in a nutshell, is why I could never see myself belonging to a party. Heck, even as a rank and file member I'd spend all my time defending why I was not with the party on particular issues and, even worse from my perspective, the minute people see that "D" or "R" next to my name they're going to assume I agree with the party's position on any given issue. I can't stand the thought of being labeled like that.
CNN and LadyBigMac
I See a Movie Date in My Future
I really want to see this:
A Tale of Two Cities
I live in Lewisville and I work in Greensboro for a trade association that works with companies throughout the 12 counties of the Piedmont Triad so you could say I live the whole "regionalism" thing. Because I'm paid to stay on top of what's going on throughout the Triad I track the news in Winston-Salem, Greensboro, High Point, Burlington, Mebane, etc. and every once in a while I'll notice an interesting contrast between the various municipalities. Today after checking my news feed I came to the startling realization that if you went by the local blogs alone you'd have to believe that Greensboro is a graveyard for restaurants while Winston-Salem is experiencing a veritable renaissance of eateries.
From the Downtown Winston-Salem Partnership blog in the last day or two:
Via Ed Cone's blog I found this post on 99 Blocks titled Vanishing Eateries – Can you help us out? about the restaurant closings in Greensboro.
As commenters at Ed's place pointed out the restaurant business is notoriously risky and in any given downtown you're going to see any number of restaurants come and go on a regular basis. My point is that if you were to base your assessment of the health of these two cities' restaurant sectors on what you read online you'd think that the folks in Greensboro are going to all be burning up the travel lanes on westbound I-40 to get a decent meal. I know some folks in Winston-Salem who'd claim that's always been the case, but I'm here to tell you that there are some great places to eat in both cities. If you feel like picking up the tab I'll be happy to take you on a tour.
What Do Sarajevo, Quito and Winston-Salem Have in Common?
Winston-Salem made the Mercer's list of "World's Cheapest Cities for Expensive Living 2011" along with cities like Quito, Sarajevo and number one on the list Karachi, Pakistan. Here's the description of Winston-Salem:
This city of 230,000 people is the least-expensive U.S. city in Mercer's survey. Winston-Salem, home to Reynolds American (RAI)—the holding company of cigarette maker R.J. Reynolds Tobacco—as well as Wake Forest University, Wake Forest University Baptist Medical Center,Novant Health, and Hanesbrands (HBI), has a median household income of $41,979 and a poverty rate of 13.5 percent, according to U.S. Census Bureau data.
The description also says this:
Monthly rent, unfurnished 2-br luxury apartment: $500
So I guess you'll have to take the list with a grain of salt.
Investor Ethics
Seth Godin argues that businesses can't be ethical, but people can:
It comes down to this: only people can have ethics. Ethics, as in, doing the right thing for the community even though it might not benefit you or your company financially. Pointing to the numbers (or to the boss) is an easy refuge for someone who would like to duck the issue, but the fork in the road is really clear. You either do work you are proud of, or you work to make the maximum amount of money. (It would be nice if those overlapped every time, but they rarely do).
"I just work here" is the worst sort of ethical excuse. I'd rather work with a company filled with ethical people than try to find a company that's ethical. In fact, companies we think of as ethical got that way because ethical people made it so.
I worry that we absolve ourselves of responsibility when we talk about business ethics and corporate social responsibility. Corporations are collections of people, and we ought to insist that those people (that would be us) do the right thing. Business is too powerful for us to leave our humanity at the door of the office. It's not business, it's personal.
Godin makes a great, if uncomfortable, point. No business can be ethical in and of itself, but it can be a reflection of the ethical decisions of the people who run it. Earlier in his post Godin wrote this:
The unhappy theory of business ethics is this: you have a fiduciary responsibility to maximize profit. Period. To do anything other than that is to cheat your investors. And in a competitive world, you don't have much wiggle room here.
If you would like to believe in business ethics, the unhappy theory is a huge problem.
So the problem appears to be that since a business manager's fiduciary duty is to maximize the profit of the shareholders then it's almost impossible to do the right/ethical thing if it's not in the best interest of the shareholders. It's an argument we've heard often throughout the recent past in our country and here's my problem with it: it absolves investors from having their own ethics.
There is nothing that I know of that stops investors from saying to the company's managers that keeping its employees on the payroll is a higher priority than returning a 10% profit. Investors can also tell the company's managers that preserving the environment is a higher priority than higher profits, that avoiding taxes by playing offshore games will not be tolerated, etc. Sure, at some point you might have to make some hard decisions in order to help the most people – as Godin writes The local store gets very little long-term profit for its good behavior if it goes out of business before the long-term arrives – but investors can at least let it be known that layoffs are the last consideration, not the first.
*Side note – I do understand that some investors are institutional investors, but guess what? Institutional investors are managed by people wo when you think about business you have to remember that at the top of the pyramid there is always a person or team of people making decisions.*
To be clear, I'm not disagreeing with Godin. He's absolutely right that all of these "business decisions" are really a series of individual decisions made under the "it's only business" cover. What I'm honing in on is this penchant for business writers/commentators to bemoan the complexity of the issue because managers must do everything they can to maximize profits because that's what investors demand. That's probably true, but as Godin pointed out the managers chose to work there and I pointed out that investors chose to set the tone/goals for the organizations in which they invested. The reality, as most of us have sensed for years, is that many of those "business decisions" are actually individual decisions made by the people who are directed by one very basic human motivation: greed.
I’d Like to Thank You for My Smokin’ Hot Wife
There are prayers and then there are prayers:
This is Breathtaking – Not in the Good Way
The GAO has released its report about the actions of the Fed during the economic crisis and I have to tell you that I think even the most cynical of us will be blown away by some of the findings, or at least some of the numbers. I don't care who you are – $16 trillion is a LOT of money. From a press release by Sen. Bernie Sanders:
Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
I haven't read the whole GAO report, but just browsing through it I found this nugget of "holy s***!" in Appendix III: Assistance to American International Group, Inc. found on page 162 of the report:
The AIG RCF and SBF have closed and were fully repaid and FRBNY expects full repayment on amounts outstanding on its loans to Maiden Lane II LLC and Maiden Lane III LLC. The Federal Reserve Board authorized changes to the borrowing limit and other terms for the AIG RCF over time, and AIG fully repaid amounts outstanding from the AIG RCF in January 2011. AIG’s borrowing under the AIG SBF peaked at $20.6 billion before the AIG SBF was fully repaid in connection with the creation of Maiden Lane II LLC in December 2008. As of June 29, 2011, $8.6 billion and $12.3 billion in principal and accrued interest remained outstanding on FRBNY’s senior loans to Maiden Lane II LLC and Maiden Lane III LLC, respectively. As discussed below, FRBNY recently began to hold auctions to sell parts of the Maiden Lane II LLC portfolio. According to FRBNY staff, the AIG life insurance securitization option was abandoned for a number of reasons, including that it would have required FRBNY to manage a long-term exposure to life insurance businesses with which it had little experience…
While AIG has repaid its direct assistance provided by FRBNY, FRBNY’s loans to Maiden Lane II LLC and Maiden Lane III LLC remain outstanding and Treasury continues to have significant equity exposure. We have issued several reports that provide additional background on the federal government’s assistance to AIG.
I think what this is saying is that all the direct assistance to AIG has been paid back, but some of the money that the Federal Reserve put into two special purpose vehicles (Maiden Lane II, LLC and Maiden Lane III, LLC) established to help AIG, about $8.6 billion in principal and $12.3 billion in accrued interest has not been repaid yet. The Fed expects to start recouping the money soon, but it's kind of mind blowing that we're still on the hook for almost $21 billion for AIG alone.
(h/t to Ed Cone for the link)
Befuddled 