Walter Cronkite—Where are You When We Need You?

2 08 2010

 

 

I usually don’t make comparisons to the way things are now, with the way things were.  Usually our fantasies about the past are just that—fantasies.  But in the case of news reporting, I think it helpful to compare the reporting of Walter Cronkite in the sixties and the seventies with our situation today.  Cronkite was called “the most trusted man in America” and held the American publics trust for many years even though he did not always tell us what we wanted to hear and sometimes got the facts wrong.  But even when we later learned that his reporting wasn’t completely accurate we still believed that it was an honest mistake and we forgave him.  The other two major networks NBC and ABC were always trying to hold themselves to Cronkite’s standards because he was the standard for ethical reporting. 

  Along the way something has happened that has created a mean spirited and ethically bankrupt journalistic (and I use the term loosely) environment.  This situation is primarily on the cable TV networks and on talk radio.  You can even extend that criticism to blogs (maybe even this one).  Accurate and civil reporting seems to be a thing of the past.  And because there is so much dead air that needs to be filled, we are inundated with the same meaningless or vitriolic material 24/7.  We only get relief early in the morning when the infomercials hit the airways.  Gauged by the stuff that we get during the day, infomercials are a paragon of truth and virtue.  And cable news continually rails about the same subjects over and over, not even giving us a variety of arguments.  How many times have we heard that tax cuts are the answer to creating jobs or that we need more government spending to get us out of the recession.  And the interviews, where they have up to six pundits shouting at each other at the same time, with the so called moderator hogging the mike and talking over the other guests, makes my head ache.  Nothing new is uttered and the information given is usually inane, unintelligible, or cut off by a commercial. 

 To make things worse, we are now seeing these cable stations taking pot shots at each other.  Whether it’s Fox TV shooting at Steven Colbert or Jon Stewart or vice versa, the new form seems intent on attacking each other.  Since I now have to check in with all these shows including Glen Beck, I realize that I’m contributing to the problem.  Even though I’d rather not be in that position, I’ve become addicted.  It’s like going to the Roman Coliseum and seeing the blood sports of the time—they repulse me, but I feel compelled to watch.  It’s sick.

 In a recent Gallup poll of July 28, 2010 it was shown that only 9% of people rated members of congress as having high ethical standards.  Business executives were rated at 12% with journalists rated at 23%.  And even though we have lost trust in these professions, our frustration and anger is fueled by the constant need for ratings and our thirst for blood lust.

 So, why do I keep watching??????


Comments : 5 Comments »
Tags: , , , , , , ,
Categories : Uncategorized

An Ethical Crisis of Confidence

27 07 2010

 

Almighty God, we confess that we are often swept up in the tide of our

generation. We have failed in our calling to be your holy people, a

people set apart for your divine purpose. We live more in apathy than

in passion born of hope. We are moved more by private ambition

than by social justice. We dream more of privilege and benefits than

service and sacrifice. Help us to make room in our hearts and lives for

you. Forgive us, revive us, and reshape us in your image. Amen 

Nouriel Roubini

  The other day I was watching my stock market guru Jim Cramer on CNBC.  It was a down day in the market and he was railing against the Bears for their pessimism on the stock market.  Currently the stock market is in a very narrow range and actually seems to be slowly drifting down in spite of increased earnings by corporate America.  He was lamenting the fact that the retail investor like me seemed to be leaving the market in droves or at least was not investing as they had done in the past.  He only alluded to the fact that there was a crisis of confidence in the government, international affairs, and lack of confidence in Wall Street itself.  On other programs that I’ve watched recently that talked about the new Fin Regs just passed, there was less than enthusiastic endorsement of the new regulations.  Most of this was aimed at the fact that there was little confidence that these new regulations would make any difference and in fact would give the money merchants new loop holes to exploit.  The growing sentiment among many investors is that the Foxes are in the hen house and are making the new regulations and that everything is about the same as before.  Many people on both the left and the right believe that this is just the first step in our economic troubles.  Nouriel Roubini, author of Crisis Economics and one of those who first predicted the effects of the housing bubble contends that the next world economic crisis will occur in the next two years.  He predicts that there will be a long, painful, protracted economic downturn, evidenced first by deflation and then by hyper inflation. 

 So, what happens to all of us that are poor or middle class that have been living on borrowed money.  Roubini suggests two scenarios.  The first is Keynesian theory and the other is from the Austrian economic school.  With Keynes, the solution to economic crisis is infusion of capital into the economy by government in the form of stimulus dollars and direct payments for unemployment etc.  With the Austrian school approach the answer is “creative destruction” which is allowing the economy to go through the painful destruction of corporations, persons, or institutions that are weak or that have over committed.  The theory is that even though painful, the purging of inefficient and corrupt entities will be shorter and make for a stronger successor.  Roubini uses the term “moral hazard” to explain the behavior of some companies and individuals that take undue risks knowing that someone will bail them out if they get into financial trouble.  He uses Citi Bank as an example of the result of “moral hazard” going back to the great depression when the government bailed them out.  Since then, Citi Bank has been bailed several times because of credit problems due to being leveraged too much.  And who has had to pay for this?  The American tax payer.  “Moral hazard” also comes home to roost with individuals.  Many Americans have leveraged themselves into bankruptcy because they either want it now and easy credit is at hand or we live in a state of perpetual entitlement where our priorities are fixated on the material rather than the spiritual.  And who will suffer the most?  The poor and the young.  Neither Keynes or the Austrians have the whole answer to our situation, but most of us know that change is necessary.  Individual responsibility and self reliance are important but being concerned and committed to the whole is also important. 

 I contend that a solution lies in three areas—the long process of unwinding our debt, the preservation of person’s dignity and worth, and turning to the One that truly gives us meaning.  And the longer we wait to make these painful decisions and changes the more painful it will be.  So where do we place our faith?  Jeremiah and other prophets believed that the answer to our predicament lay in our turning away from the lesser gods of our culture and placing our faith in the God of new life and creation. “Nearly 90 percent of Americans, according to the CIA World Factbook, identify themselves with a religion. But only 12 percent of American adults say faith is a top priority in their life, according to a new study released Monday by the Barna Group.”   It may be charged that suggesting that we turn towards God in these times (as well as in good times) is naïve and impractical.   We’re not ready to give up our little gods and until we do, we will suffer the pain of attachment. 

 “I will surely gather them from all the lands where I banish them in my furious anger to this place and let them live in safety.  They will be my people, and I will be their God.  I will give them singleness of heart and action, so that they will always fear me for their own good and the good of their children after them.  I will make an everlasting covenant with them; I will never stop doing good to them.”  Jeremiah 32: 37-39  

 Jeremiah states that God will gather all who have been banished and will be the God of all people.  I believe that even if there are those who do not accept the presence and influence of God, we are all still under God’s reign.  It is for those of us who believe in that reign to live into God’s purpose.  The outcome may not be what we want, but it will be God’s outcome.


Comments : 7 Comments »
Tags: , , , , , , , , , ,
Categories : Uncategorized

Ethics and Supporting Small Business

13 07 2010

I almost feel unpatriotic writing this piece.  Having invested in the stock market since I was fourteen and being in business myself, I believe that business should be the cornerstone of our American economy as opposed to big government being the watchdog and driver of economic well being for the average American.  But recently I have become aware of a disparity that needs discussion—the role of big business and small business in bringing our economy back to health. 

 Currently big businesses such as Microsoft, Cisco and Exxon, just to name three, are sitting on huge reserves of cash.  Needless to say with the uncertainty in financial markets in the past few years and the probability that we will see the other shoe drop again in the future, it still calls into question what companies such as these should be doing with their cash.  First of all, big companies need a lot of cash and they employee a lot of people.  But many of these companies in past years have cut back the number of employees.   But we are told that in order to get the economy back on track we need to improve employment.  We’ve lost about 7million jobs in the past few years and are limping along at less than replacement employment.  We’re told that the private sector needs to add jobs.  But where will these jobs come from?  Most large businesses cut jobs in the past recession and are reluctant to add jobs.  One reason is that there is not the demand for their products to justify those increases; which brings us back to cash.  If the cash is not to be used for growing organically, where then will growth in those companies come?  Some suggest that it will come from acquisitions and mergers.  Ignoring questions concerning anti-trust issues (you remember anti-trust don’t you), one consequence in M&A is that often by absorbing competition the acquiring company is not only able to get rid of competition but it’s also able to have a more efficient operation by combining operations which often results in loss of jobs.   Many of these companies are also outsourcing jobs to other countries further creating job loss in the U.S.  In some case the word multi-national actually means non-American. 

 In the case of the “too big to fail” banks, many of them are doing extremely well considering they have been able to borrow money for 0% and lend it out at much higher rates of interest.  This has been great for U.S. taxpayers who are hopefully getting much of their advance of funds back for helping bail them out.  But what of those smaller banks that have gone under and have been sold to bigger banks.  Again we often see that as a part of cost cutting, branches are closed or consolidated and persons laid off.  So, the big get bigger and to what end?—more service to customers? More dividends to shareholders?  More taxes to local and federal governments?  So, what’s the answer?  The proposed new bank regulations seem to indicate that the game is rigged.  In spite of all the gnashing of teeth about change, the indication is that not much substantive change will occur.  And there are many pundits that believe that within a couple of years the banking system will be back in trouble.  And pundits can’t decide whether we’re in for massive inflation or painful deflation.  My sense is that big business and big banks will do what is in the best interest of big business and big banks and if it contributes to job creation, so be it, but I wouldn’t count too heavily on them getting us out of the recession.

 We keep hearing that the answer to getting out of the current recession is the creation of new small businesses and in small business hiring more workers.  I agree.  But there’s not much encouragement for this.  Everything from local restrictions and regulation of small business, future healthcare liability, lack of availability of financing, and even cracking down on immigration policy are seen by some as hampering job creation.  In a recent poll of small business by the Biz Roundtable, a very pessimistic future was painted by those interviewed.  There just doesn’t seem to be much excitement in hiring more people even if financing is available when there doesn’t seem to be much of a market for the goods and services produced by these companies.    

 Currently there are proposals being bantered about concerning creating tax credits for hiring new workers and tax credits or accelerated depreciation for purchasing new equipment.  When these have been done in the past they seem to have had a positive impact on the economy.  Another possibility would be to have a lower effective income tax rate for small businesses.  But at the end of the day, the most important consideration for small business is the ability to get into business and to stay in compliance with the myriad of laws and regulations, both local and federal, which impedes the small business to function and to be the engine of job creation that it’s been in the past.  Add to that, small business’ often not being able to compete with big business’s ability to sell for less and the consumer’s perception that they can get it cheaper at the big box store and that it will be in business a lot longer than the small local operator, the deck seems to stacked against small business.  You may wonder what all this has to do with ethics.  For we consumers, there are some fundamental issues that we control.  Who will we support? Are we willing to support local small businesses, even when prices may be more than at the big box?  Small business needs to do its part by being more customers focused and offer something that big businesses can’t always add and that’s relationships with the customer.    Many people, particularly in smaller communities around the country are answering this question by coming down on the side of home grown businesses. They question the consequences of having the Wal Mart come into their town that undercuts local merchants that result in Main St. becoming a ghost town? In a city like Houston more often than not, we don’t have the same relationship with small businesses that are available to small town dwellers.  It’s just easier to go to the national company rather than seeking out a local business.   . 

 I believe that we should encourage people to start small businesses and for our communities to enhance the potential of these job creating engines.  So, my suggestion to us all is to support our local small businesses and support regulations that will enhance those business persons efforts. 

 What small businesses do you support?


Comments : 4 Comments »
Tags: , , , , , , , ,
Categories : Uncategorized

An Alternative Strategy for Tea Partiers

26 04 2010

In the article Tea Party Angst, I sought statistics or stories about Tea Party followers.  Recently, the New York Times/CBS News poll made a survey of the 18% of Americans who say they support the Tea Party.

 A—Are men

B—Are white

C—Are age 45 or Older

D—Report a household income of over $100,000.

E—Describe themselves as very conservative

F—Have a college or post-graduate degree

 Even though 18% of those contacted considered themselves supportive of the Tea Party movement, given a list of 10 possible presidential candidates though, 49% chose “none of the above”.

 As you can see the numbers are skewed towards being a movement made up of white males over 45.  Even though a majority said that their financial situation was good or very good, none the less they were worried that someone in their family will be out of a job in the next year.  “More than 2/3rds say the recession has been difficult or caused hardship.”(Houston Chronicle, 4/15/10).  Nearly 3/4ths wanted smaller government but did not want to lose some of their Social Security, rather focusing on “waste”. 

 I don’t think that it’s an accident that the demographics of the movement is towards males.  My article “Save the Male” bears out the frustration and anger that older men in our society feel.  Some pundits have tried to make the case that since most of the Tea Partiers are white that this is a racial and gender response to Obama’s election.  I think it would be unfair to make that conclusion as no one can see what’s in another person’s heart.   And I would have to say that many of the concerns of the Tea Partiers are justified.  The national debt is out of control.  There is little evidence that entitlements will be held in check in the future.  Other questions that they have are a little puzzling though.    Such statements as “I want my country back” and “I want my freedom back” and “Let’s go back to what our founding father’s believed in” make me wonder exactly what they mean.  What was the country like that they want back?  Was it a country dominated by white males or a country where segregation was the social structure of the time or is it better schools, lower healthcare costs, a sound social security system,  a country where getting married and staying married was the thing to do, or a country where going to church every Sunday was the norm?  It’s paradoxical that they want change in government but to this point have not been able to articulate a cogent plan other than to lower taxes and cut spending.  In wanting less input from government they are actually seeking more government intervention.  These nebulous statements and the lack of a leader to rally them show the magnitude of the frustration of looking to government for answers.  The truth is, no government official or legislature can turn back the hands of time.  As I stated in Save the Male we have to save ourselves.  But let’s consider some other statistics that are either forgotten or are being ignored that if acknowledged might return us to reality.

The first number is the top income tax rates and the last two numbers are the beginning and end % of debt to national debt as a percentage of GDP during presidential tenure:

Truman—National debt as percentage of GDP  120% (due to WWII)

Top Income Tax Rate                             % of National Debt/GDP

  • Eisenhower—91%                                           Start 70%+ –End 55%
  • Kennedy, LBJ—91%–70%                             Start 55%+– End 38%           
  • Nixon 70%–                                                    Start 38% -End 30%
  • Carter 70% –                                                  Start, End 30%
  • Reagan 28% Bush 31%–                                 Start 30% End 66%
  • Clinton 39.5% —                                              Start 66%–End55%
  • Bush 2 –31%–                                               Start 55%–End75%

(The Washington Monthly; Politics.gather.com)

From these figures it would indicate that the good old days had high tax rates, lowering of the national debt and a rise in personal GDP and the creation of wealth by individuals and corporations.  This goes against the perceptions of many Tea Partiers.  But part of being ethical and responsible is looking deep within ourselves at what motivates us, what’s real and what we’re afraid of.  Being the age of many Tea Partiers and empathizing with many of their concerns, here are some strategies that I suggest those of us over forty five might consider:

  1. Make a covenant with God that we will follow His word in doing mercy and seeking justice. (Micah 6:8)
  2. That we will covenant to tithe ten percent of our income and time in our churches and community to build a better America based on mercy and justice.(Lev. 27:30)
  3. We will recognize that 80% of all Americans over 65 are white and that 70% of all Americans under 60 are persons of color and of foreign descent and that they are the future and that if we want our children and grand children to flourish they will have to deal with that reality.
  4. Our tithe will help transform our education system, our churches and our communities as we mentor, tutor, coach, staff food pantries, visit in prisons and the hundreds of other volunteer programs available to bring about change. 
  5. We will advocate for families and children so that each child will be able to flourish.

Making education of our youth and adults through the encouragement of immigration and total commitment of our nation to education is the primary solution to keeping social security solvent, getting people off welfare and Medicaid, keeping families together, and keeping people out of prisons and jails.  But it will take a Marshall Plan dedication by our nation to make this happen and it can’t be done by just throwing money at the problem.  It should be national policy to give all who are eligible a free education from pre-K to a community college certificate or degree so that they can be competitive in today’s world economy.  Money is a part of the solution, but as important is also having adults involved in the education of the young.  That’s why I advocate the tithe both in money and time.  Older adults have experience and wisdom that is often overlooked.   For many, the attitude is that they’ve done their part and they’re going to take it easy.  On the other hand I know men and women in their eighties who live out the double tithe of time helping in so many ways. 

 After WWII our country created a system that encouraged our veterans to go to college to become engineers, scientists, doctors, and business people.  We built a public school system unparallel to any in the world.  The values that Tea Partiers profess focus on personal responsibility and covenant.  It’s time to stop fantasizing about the good old days and dedicate ourselves to bringing ourselves into the realities of the 21st century.


Comments : Leave a Comment »
Tags: , , ,
Categories : ethics

Save the Male

15 04 2010

 

 George Bernard Shaw wrote, “This is the true joy of life:  the being used up for a purpose recognized by yourself as a mighty one; being a force of nature instead of a feverish, selfish little clot of ailments and grievances, complaining that the world will not devote itself to making you happy.”  Warren;   The Purpose Driven Life

 For some time now many observers have said that the American male is in crisis.  Whether it’s the angry and depressed white man who feels that he has been displaced by women in the workforce or the angry and depressed young black who will either end up in prison or who has a poor education that relegates him to unemployment or underemployment, many American males find themselves living in a malaise of uncertainty and lack of direction.  Statistics can give us a glimpse at a situation that in many cases can help us understand the changing landscape facing men. 

  • In the latest economic downturn men are suffering more job loss than women.  The rate of white male unemployment is over 11% while the rate for white females is about 8%.  Men are also remaining unemployed longer.
  • Males make up about 80% of incarcerated prison inmates.
  • One in three black boys born in 2001 will spend time in prison
  • 60% of school drop outs are male.
  • Even though there is still a wage disparity in many companies between men and women, in the current recession as companies re-organize, management positions are more and more being offered to women.
  • Currently in college freshmen classes nearly 60% of entering freshmen are women.
  • Men are four times as likely to commit suicide and six times as likely to commit homicide as women.
  • Older white men commit suicide more often than any other demographic group.

 It’s impossible to generalize about all men or even men from different ethnic, social and economic groups.  And over time men can change.  But in order to reflect on the plight of the endangered male we have to make some assumptions about men in general and men in varying demographic groups to see if these men have things in common regardless of differences.  These sited statistics can possibly give us a glimpse of what is going on in men’s world.  .

 The simple answer is that many men have difficulty dealing with change.  In my work with couples as a marriage counselor several traits became clear about a majority of men. 

  1. Men had difficulty dealing with feelings unless it was anger which often turned into depression.
  2. Men tended to be more rule bound.  Not that they always followed the rules  but when engaged in counseling they tended to want a laundry list  of things to do and then they would try and do them. 
  3. The old joke about a mans wife asking him what he was thinking and him responding by saying, “nothing” is often the case. 
  4. Men lead very compartmentalized lives.  Family, friends, work, and pleasure tend to be separated and only shared with the appropriate groups and then the subject tends to be superficial. 

5.  Men tend to want to go it alone, rather than asking for help.

So what can we infer about men from these statistics and traits of men and the current situation of the endangered male.  Because many men feel left behind and impotent to being the man that they think they should be or that the world has dealt them a raw deal or that the system is against them, their responses are predictable.  Even though they might profess a philosophy of self reliance and autonomy they respond with rage and depression, often without seeing a way out.  Whether the rage is against government, big business, women, or the “man” their rage is focused on others rather than finding ways to help themselves.    

 And society doesn’t give them much encouragement.  Wives and family members may have their own financial expectations of the man, that if not fulfilled  to those expectations results in them becoming angry and rageful.  Men can’t just decide to stay home and play golf twice a week.  He’s expected to work and bring home the bacon.  Otherwise, he’s considered a drone.   But what of the drones in our society—men who father children out of wedlock and never participate in the rearing of those children. 

 In a recent visit to his prison inmate skills class, a friend of mine who was the facilitator asked his group how many of them had a relationship with their father’s.  Only two out of 10 had any kind contact with their father.  He then asked how many children had they fathered out of wedlock.  Of the nine men, there were eighteen children fathered out of wedlock.

 So, what is the answer?  One answer is for men to get their spiritual lives in order.  Since it seems that men respond best to direct imperatives here are some things to do.

  • God doesn’t care whether you’re rich, famous or good looking; only that you’re in relationship and covenant with Him.  We often listen too much to what the world holds out as success.  
  • God calls us to be in covenant with one another; with family, friends and co-workers.  Pray and study about what that means for your life.
  • God has given us all gifts but sometimes we don’t see them or we undervalue them.  This may mean that we have to retool for the future rather than being stuck in the past.  The Bible calls us to be faithful and responsible.  Society’s criterion for success often contradicts what Jesus calls us to be and do. 
  • Deal with your anger and your addictions.  They only cloud the mind to keep us from seeing God.  Join a twelve step program and stick with it.  Fake it until you make it.
  • God is always there, waiting for us and to give us his loving acceptance.  Stop thinking that you have to go it alone. 
  • Every man regardless of age should mentor a boy or another man.  Our wives, mothers or another woman can’t save us.  With God’s help and other men we can make our spiritual journey together.  That’s something that most all of us can do and if we will it will change our world. 

 We are living in an ever changing world.  Whether male or female, we’re in this together.  We can deal with change with anger or rage which only results in more anger and rage.  We can displace that anger on others or we can see ourselves as all being lovable in the eyes of God and the world may not be as we want it to be, but we can embrace the challenges of life, knowing that God is with us and suffers when we suffer and is joyful when we are joyful.


Comments : 6 Comments »
Tags: , , ,
Categories : ethics

Tea Party Angst

1 04 2010

 

In earlier posts I talked extensively about Cultural Isolation in society.  In particular I discussed the issues of Language,  The Tyranny of the Expert, and feelings of entitlement.  In the responses of people who are being engaged by the Tea Party movement, we see all of these factors of influence. 

 If you listen to the followers, you hear much of the same mantra—“Washington is not listening to us”, “throw all the politicians out and start all over again”.  Their analysis of the problem comes from very personal experiences that come out as frustration and anger.  They believe that the course our country is on is only leading to disaster.  Whether it is the healthcare bill, cap and trade, immigration or taxation they believe the country is on the wrong track. 

 It would be too simplistic to assert that all their stories are the same, but I would like to hear some of the individual stories of the people involved.  I would have to assume that those who have become a part of the caravan that is now crossing America and going to Washington, have the ability to move around independently, whether they are retired or unemployed, or self-employed.  Their mantra seems to be along the same lines that Republicans have asserted—cut taxes and cut spending.  However, Tea Partiers have also tended to hearken back to some mythical past when life seemed better.  From my observation many of them were a bit past middle-aged but there was also a fair number of younger people represented.  They’ve taken on Sarah Palin as their hero even though she seems short on solutions and long on platitudes.  If you are a Tea Partier or have heard personal stories about why people are interested in the movement, please share those stories here.  I want to know how the current political system has personally affected them.  I know that they are concerned about the future for their children and grand children as most of us are, but I want to know the stories of how our system has personally affected them. 

 As I analyze what is happening around issues  like healthcare and reform of the banking system, I wonder if their anger is misplaced.  Who or what groups have the power over these issues.  Take the healthcare bill.  Who stands to benefit the most from the bill.  Well certainly the 25 million people who don’t currently have healthcare, but the real beneficiaries are the insurance companies that had 25 million new customer laid in their laps without any marketing on their part.  Also, the drug companies will benefit since the donut hole in Medicare part D will directly benefit the drug companies. 

 Then there’s the banking system.  It’s too early to make a call on this but as things are progressing it appears that not much is going to happen to “too big to fail” , the derivative situation and huge salaries and bonuses.  My guess is that it will be business as usual and that the only ones that will be adversely effected will be the public and community banks that may end up being gobbled up by the “too big to fail” banks.

 What about fixes on the spending and income side of government.  With 80% of the federal budget going for Social Security, Medicare, Medicaid, payment on the national debt and the military, where will we cut?  It’s easy to say, cut taxes and spend less, but as I see it those kind of Draconian changes will affect the poor and the middle class the most.  Which brings us to another interesting situation.  My guess is that most of the people who attend the Tea Party participants would consider themselves middle class, middle America and from the crowds, they’re also predominately white.  So why do they seem to align themselves with those people who have the most to gain from maintaining the status quo—the very wealthy.  Washington is representative in name only with lobbyists throwing money at both sides of the aisle.  The great debate is on as to how we’re going to pay for all this.  People making under $50,000 a year, depending on the state you live in, have   an effective tax rate of about 40%,  This includes federal and state income taxes, excise taxes on gasoline, tobacco, etc.,  sales taxes, and property taxes whether paid as homeowner or as a renter.  And if the federal government lowers taxes on an item, it tends to shift the same tax to the local and state governments.  And who pays for this?  Well, we all do.  But there’s something called regressive taxation that tends to hit lower-income earners.  Sales taxes are regressive, taxes on gasoline and tobacco are regressive and many of the tax fixes in the healthcare bill are regressive and all flow down to the middle class.  The primary taxes that are progressive are progressive income taxes and inheritance taxes.  Could it be that the majority of the Tea Partiers are the ones most effected by regressive taxes and feeling the pain associated with over taxation.  So, I’m a bit confused that in those rallies I don’t hear much about raising taxes on the rich and lower taxes on the middle class.  President Obama stated that taxes have been lowered for 95% of all Americans.  If that is true, then the question is, “is that enough?” and if not, how much is enough and how then do we balance the budget and where will the cuts come from?  My sense is that the Tea Partiers need to appraise who the enemy is and come up with realistic solutions for a change.   The question about ethics comes in trying to  identify the culprits in this mess.  We can blame Obama and his minions or we can blame the Republicans or the bankers or the drug companies, but my guess is that we all share in the creation of the problem.  If we identify the culprits, then what do we do?  In this case it seems that we are confronted with a Medusa creature that has many heads.  Perseus was only able to kill the Medusa by looking into her mirror rather than looking at her directly.  Maybe part of our answer is in looking beyond the obvious and answer for ourselves, “who stands to benefit the most from our current situation?”

 I’m like everyone else.  I don’t want my taxes raised but at the same time I don’t want to give up my Medicare or my Social Security.  And I want to be able to leave my children and grand children a major portion of the benefits of my lifetime financial success.  So, how will we solve the problem?  Time is running out to solve the problems we face in a pro-active way.  The longer we wait, the more Draconian our choices will be.


Comments : 1 Comment »
Tags: , , , , , ,
Categories : 1

Is there an answer to gridlock in Washington?

18 03 2010

The Ethics of Compromise and Conflict

 We Americans have become accustomed to instant results. We want conflicts resolved and tied in a neat bow within a maximum of 57 minutes, less commercials.  We also tend to only focus on the immediate problem rather than looking at the long term results of our actions.  Such is the case with the situation in Washington concerning everything from healthcare, restructuring the financial industry, to immigration reform.

 On one level we citizens know that there are structural problems in our economy,  that if not fixed will have possible catastrophic results.  We have a debt that is growing out of control and a budget that is comprised of  Social Security, Medicare, Medicaid, interest on the national debt and the military and homeland security,  making up 80% of expenditures.  In addition to those items we’re in the process of passing a healthcare bill that will add an additional trillion dollars to the deficit over the next ten years.  These are areas that in the past we have been reluctant to even seriously talk about and there’s very little indication that we’re willing to address these areas holistically now.  So, we chip away at the edges talking about earmarks and pork to individual spending cuts without being willing to step up and say, “In order to get this thing under control we’re going to have prioritize what is most important to us and then decide what sacrifices we’re going to have to endure in order to bring about desired changes”.  Congress is quick to condemn the $2000. toilet seat by the military but not willing to confront the challenges of such things as Social Security and Medicare. 

 Fundamentally, there is the philosophical schism between the concept of individual freedom and responsibility and what is the greatest good for the most people.  If we assume that both concepts have a place in a 21st century society, how do we ensure that both are heard and that in some way they can accommodate the others presence.  Currently, that seems like an insurmountable obstacle.  In a NBC news/Wall Street Journal poll taken between March 11-14, only 17% of voters believed that congress was doing a good job.  On the issue of health care voters are pretty well split right down the middle.  Specifically on the report card for congress 38% of those polled believed that congress only wants to stay in office and not solve problems; 28% believed that congress was too close to special interest groups, 19% said that congress was too partisan, and 16% said that congress supports pork.  Not in my memory has congress been held in such low regard and whoever is elected in the fall will not have an easier go of it even if one party has more than 50% of the seats in congress.  If some sort of healthcare bill is passed I anticipate that things will settle down for a while but the day of reckoning is at hand sooner or later.  Everyone seems to know it but no one seems to have an answer.  But lets look at some scenarios.

 In order to change our current situation we will have to change our priorities and adopt painful austerity measures.  Currently, people make statements such as “we need to cut spending and lower taxes”.  Yes, we’ll have to cut spending but where.  Not the $2000. military toilet seat.  That’s a drop in the bucket.  With about 80% of the budget being used for Social Security, Medicare, Medicaid, interest on the national debt, and the military and homeland security amounting to nearly $3 trillion and a current debt of about $13 trillion.  If you sent all the government home and assuming you had enough revenue to pay down the debt after you did all these draconian measures, it would still take about 20 years to pay off the national debt and you’d still have the problem of  funding Social Security, Medicare and Medicaid. 

 Jeb Henserling (R.) from Texas has another answer—limit the national debt to 20% of annual GDP.  The only way it could be increased is by a 2/3rd vote in both houses or a declaration of war.  The current GDP was about $14.4t in 2008 which would limit the national debt to about $2.9t.   Let’s see, with a current debt of about $13t and growing, we would have to immediately pay off about $10t.   Humm, so how do we do that Jeb?   Details, details… 

 On another front we have to decide what our priorities are as a nation.  Do we want to continue to be a consumer oriented country that doesn’t save, doesn’t take care of the poor or provide a good education for all our children.  What would seem in order is an educational Marshal Plan that would teach children all the way from pre-k through college or trade school to be a productive member of society.  But presidents since Jimmy Carter have declared a war on ignorance with little results.  We hear a lot of blame being thrown around including union intransigence, ivory tower experts, parents, and lack of funding to name just a few.  We know that the best determinant of future success or failure of a child is the educational level that a child achieves.  It costs about $7000. per year to send a child to school.  It costs anywhere from $25,000. to $35,000. per year to keep a person in prison, not to mention the cost of policing and healthcare, resulting from drugs and violent behavior.  Then there’s the loss of the economic contributions of poorly educated low wage earners.   Until we effectively address the issue of education we will continue to fall behind other countries in technological training and innovation. 

 But here I am suggesting spending more money when we’re already in the red.  Whatever the answer to our current situation, it will take sacrifices by all of us.  And it will require that we move in a different direction with bold strategies for our future economic and political well being.  We’re in a war to save our political and economic system.  In WWII we were willing to work harder, go into the military, tax ourselves, buy war bonds that often were never redeemed and make sacrifices on the home front.  I think we’re there again and it will take more taxation, more saving on our part, foregoing consumer buying of things we don’t need and making hard choices on spending. 

 This sounds like socialism.  And admittedly there are elements of planned economies and national direction.  And that’s risky and my sense is that we’re not ready to embrace the kind of austerity necessary to turn things around.  But the longer we wait the harder it will be. 

 But there’s another alternative to Washington gridlock and economic disaster.  Remember Ross Perot?  During the presidential debates of 1992 the feisty third party candidate Perot was asked what he would do to change the flagging economy.  His answer in retrospect was both on target but also quite chilling.  He stated that among other things he would bring all the leaders from both parties into his office and lay out his plan which included raising the gasoline tax, cutting spending, social security and other programs, and scrap NAFTA.  After discussing the program with them, if they wouldn’t go along with his proposals  HE WOULD SEND THEM ALL HOME.  At one point he led the polls with 39% of voters and even though he dropped out of the race for a brief time, for personal reasons, still garnered over 19% of the popular vote;   And this with an economy and social environment a lot less problematic than today. 

In the January 28, 2010 issue of the New York Times, David Brooks wrote an op ed entitled The Perot Option stating that Ross Perot or his clone is lurking out there in the weeds and concludes that if President Obama doesn’t become more of a leader and take on both sides of the aisle a new Ross Perot will emerge. And that scares the hell out of me.


Comments : 2 Comments »
Tags: , , , ,
Categories : ethics

Okay! I’m a Homer on Natural Gas

13 03 2010

 

I’ve been around long enough to know that pretty much everything has political implications.  But PLEASE, someone explain to me why coal is getting preferential treatment as a fuel over natural gas.  And why all the talk about alternative fuels being the wave of the future when there’s little developmental funding available, in particular for the small inventor.  Only large companies can afford to spend the kind of money necessary to do research and to bring alternative fuels to the market.  And most of them, due to the length of the time horizon to bringing them online would rather invest in areas that will bring energy online quicker. 

 My sons have a small company called www.swellfuel.com that for the last three years has been developing a system to make electricity from ocean waves.  In order to test his units he’s had to go outside the United States because the regulations on obtaining test sites take too long to obtain and cost too much to get.  Investors are reluctant to fund projects where they can’t see results in a short time.

 And then there’s the companies that talk the talk but don’t really walk the walk.  They talk about being Green and what they’re doing for the environment, but when you drill down deeper you see that it’s not much of a commitment, but more of a public relations effort.  That in of itself doesn’t seem ethical.

 Growing up in Houston, we had a gas stove in the kitchen and we used gas heating.  It got the job done without a lot of pollution.  So, to all my good friend out there who are engineers and scientists, please, please explain how it can be ethical not to utilize a source of energy, natural gas, that our country has that could make our country fuel sufficient for a long tome to come.


Comments : Leave a Comment »
Tags: , , , ,
Categories : ethics

Is My Bonus too Big?

2 03 2010

Over the past year we’ve all been inundated with articles about large executive compensation packages and in particular about compensation packages to executives in companies that received bail out money from the government.  And this at a time when those same companies were laying off thousands of lower level employees to cut expenses.  Of the eight banks bailed out, Citigroup, Inc.  seems to be the most beleaguered and along with Goldman Sachs and AIG has received the most criticism for their high executive compensation packages.  One of the major arguments in favor of these high salaries and bonuses is that in order to keep good talent you have to pay high salaries.  Some might say and have said that if these are the best minds to run the business, that American business and in particular banking is in big trouble.  The disparity between the top and lower level Citi employees is huge and the anger among the rank and file is well documented.  A blog run by Indeed, Inc., an executive employment website documents numerous postings about Citigroup’s wage levels.  Here’s just one:

 “A Citigroup recruiter called me for a  SENIOR Accountant position @ Citigroup. I was told that the position maxed out @ $35k. For a SENIOR level position. I would hate to see what they pay their entry level people.”   

 From Zacks investment research           “Citigroup Inc.  may cap cash bonuses for 2009 at below $100,000. The 2009 bonus pool at the company is expected to be similar to the 2008 level, which was low compared to the other years. Citi may pay a large part of the bankers’ and traders’ bonuses in stock that cannot be sold for a number of years.

Citi may pay up to 40% of bonuses in the form of deferred cash and stock and the balance in the form of non-deferred cash and IOUs, which will turn to common stock in April.

Currently, Citi is working out the details of its bonus plan. Recently, New York Attorney General Andrew Cuomo asked Citi and 7 other of the largest banks in the nation that received significant federal aid under the Troubled Asset Relief Program (TARP) to provide information on the amount of 2009 bonus packages and their structure. Cuomo also asked the banks to explain the effect the bonus pools would have had if the banks had not received the TARP funds.

 According to Cuomo, the full disclosure and transparency of the bonus information are essential as recent government actions have given rise to public accountability issues, and TARP banks are struggling with these actions.

Citi received $45 billion in bailout money from the TARP at the height of the credit crisis. Later, around $25 billion of that was converted into common stock, representing nearly 34% of its stake held by taxpayers. The company repaid the remaining $20 billion in bailout money in December 2009, freeing the obligatory pay restrictions on its key executives.

  Citi’s plan to cap cash bonuses is to save the bank from people’s fury over the TARP banks’ 2009 bonus plans. However, the bank says may still find it difficult to keep its top employees.”

 From Reuters      “Regulators, lawmakers, and others are trying to determine how changing compensation packages might reduce the chances of future financial meltdowns. The Federal Deposit Insurance Corp is considering charging lower rates for deposit insurance to banks with pay practices that it deems superior.

According to a July report from New York Attorney General Andrew Cuomo, Citigroup as a whole paid $5.3 billion of bonuses for 2008.

 Officials at rival companies told Reuters that Citigroup employees will essentially receive at least 60 percent of their bonuses in cash or stock that can quickly be sold. That level is high compared to some rivals, which could help the bank retain employees.  But some Citigroup employees groused at the relatively low portion of the bonus that will come in cash.

 Loren Steffy in the February 26 Houston Chronicle reports on executive pay for the General Motors Ceo, Ed Whitacre and past interim CEO Fritz Henderson.  Whitacre’s package includes $1.7million a year plus $7million in stock.  Fritz Henderson who for all practical purposes was fired is being given a $60,000. per month consulting agreement plus an expense account.  He is required to work at least 20 hours a month on the job.  Steffy suggests that Whitacre take the job for $1. per year since he received $158million from AT&T when he retired.  The interest on the $158million is about four times the $1.7million he’s receiving now.  By contrast Ford CEO Alan Mulally agreed to accept a $1. salary if Ford needed a federal bailout.  That was not necessary and Ford has gained market share and is expected to soon be in the black.  Mulally’s salary is slightly more than Whitacre’s at $2 million.  Last year GM received about $50 billion in bailout.  And as a result of that bailout you and I are now Whitacre’s employer. 

The media, the public, government regulators and congress are going through their hand wringing dance asking what should we be doing with all the bad guys.  Much of what has happened in the past few years was a long time in coming.  Questions of whether employment contracts should be honored in companies that are either bankrupt or being kept afloat to keep from going bankrupt are being used as a defense of big severance packages.  Arguments about high paid executives going elsewhere if they aren’t paid huge pay packages seems a bit contrived.  Where will they go?  Hedge funds which have shut down over 200 shops in the last two years?  Or, Europe which hasn’t had the bottom fall out yet?  Probably the best place for many of them to get employment would be with lobbyists who deal with the Washington bureaucrats, regulators and politicians who will probably not make any substantive punitive changes except as it may affect those companies and executives who played the game ethically and by the rules. 

My observation is that most relational issues such as this begin as ethical issues and because a minority acts unethically, new laws and regulations are passed in order to close loopholes or deal with unintended consequences.  But the sad truth is that those that want to circumvent the law will find ways to do so, and in so doing will effect the ability of the rest of us to carry on ethical business dealings.


Comments : 2 Comments »
Tags: , , , , ,
Categories : ethics

« Previous Entries


Follow

Get every new post delivered to your Inbox.