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The Overdogs Bite Back

Our corporate lords are a sensitive lot. They want it all. They want total control of the government and they want love and appreciation.

Who can blame them for being upset? They spend all that money to buy the government, hire all those lobbyists, all those PR people.

It’s true the politicians help them out when business is bad, but do they everything just the way the corporate overlords want? Apparently not.

Who knew?

And we don’t express enough love for them, or appreciate them enough for all the good things they say they do.

Instead, we brats just want them to pay more taxes, or put another way, the same rate of taxes they used to.

Even one of their own, Warren Buffet, tries to make them look bad by suggesting maybe they could afford to pay a little more in taxes.

Now the CEOs are mad as hell and they’re not going to take it any more.

And they've created a new more loveable name for themselves: job creators? Who wouldn’t love a job creator?

They want to make sure they’re getting their message across about how swell they are. It’s called, wonderfully enough, the Job Creators Alliance.

In an odd coincidence, their message bears a striking resemblance to pure Republican propaganda. Even the tiniest speck of regulation appearing on the horizon, for example Dodd-Frank financial regulation, causes the job creators to tremble and quake, and stop doing the only thing they really care about – creating jobs.

The Job Creators Alliance doesn’t blame the deep recession or the lack of demand for unemployment. They blame Dodd-Frank. This mild bit of financial regulation is blasted while the CEOs tote out one of the Republicans’ favorite phony themes – the financial collapse wasn’t caused by Wall Street greed, fraud and carelessness, but by Fannie Mae and Freddie Mac.

And the other big problem? You guessed it. Mandated health insurance.

Because both Dodd-Frank and mandated health insurance tamper with one of the job creators’ real sacred cows – the free market system.

As staunch defenders of the free market system, the CEO’s web site ought to be aflame with their righteous anger at the bailout and the Federal Reserve’s secret trillions in loans that propped up so many businesses in the wake of the economic collapse. But in what I’m sure is just an oversight, the job creators’ haven’t gotten around to posting about it yet.

Want a Job? Go to Prison

American workers find themselves in an increasingly uncomfortable squeeze.

On one hand, public officials demonize organized labor, as seen in Wisconsin and several other midwestern states.

On the other hand, the growing trend in outsourcing keeps jobs closer to home, but with equally disastrous results, paying prisoners an average of less than a dollar an hour for work once done by decently paid workers on the outside.

Prisoners aren’t just making license plates anymore. They do everything from manufacturing plastic cups and furniture to operating call centers.

In the most recent example of this disturbing trend, prisoners are apparently building electronic parts for Patriot missiles.

The story was laid out by Jason Rorhlich on Minyanville, where he displays all of the promotional material by the firm, which obtained the contract to have the prisoners do the work. The firm, called Unicor, is a giant, wholly-owned subsidiary of the federal government originally formed during the Depression. It operates more than 100 factories in federal prisons and employs about 17,000 inmates, or about 11 percent of the federal prison population.

Unicor even received nearly $1 million in stimulus money, earning the ire of some on the outside who said they could have used the work.

After Rohrlich’s piece appeared, and it was picked up by Wired, Lockheed’s PR machine spun into action, denying that prisoner labor was used in building the Patriot, acknowledging for Wired that prisoners only worked on Raytheon’s ignition system for the missile. Which left Rohrlich and readers scratching their heads, given how hard Unicor has been bragging about its work on the missiles themselves. Does Unicor, an arm of the federal government, not know what its employees/prisoners are up to? Or is Lockheed working on some pretty lame damage control? I hope the missiles work better than the public relations does.

As Wired points out, the Patriot is just one in a long string of weapons work that Unicor has done, including work on F-15 and F-16 fighter jets and Cobra helicopters.
This week, Unicor scored a $20 million, no-bid contract to build bulletproof vests. All I can is say is they must have connections, since the last time they built body armor for the Army, it didn’t work so well. Last year the Army had to recall 44,000 Unicor-built helmets because they failed ballistics testing.

This is not about trashing prison training and rehabilitation efforts, which should be continued because the evidence shows that they work in reducing recidivism. But can’t our public officials find a way to do it without undermining the middle class, which they all claim to be so devoted to?

Martin Column - 03/11/2011

Quotable-RFK on what GNP doesn't tell you

“The gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”

Robert Kennedy, 1968

Quotable - 01/04/2011

One Would Hope

The head of President Obama’s Security and Exchange Commission went before Congress Wednesday to wring her hands about how the Lehman fiasco “raises serious concerns” about the effectiveness of post-Enron reforms.

“One would hope,” SEC chair Mary Schapiro told a congressional committee wanly, that the post-Enron Sarbanes-Oxley Act “would have prevented this kind of conduct.”

Eight years after Congress passed reforms that were supposed to prevent another Enron or WorldCom scandal, the Lehman mess reminds us how the government regulators and the accountants that are supposed to be vigilant watchdogs against destructive, deceptive bookkeeping continue to fail. They have remained in cahoots to ensure that the financial titans can ignore the rules and then evade the consequences for their bad and even fraudulent decisions.

According to the bankruptcy trustee’s scathing but sober 2,200 page report, Lehman used a financial maneuver known as Repo 105s, manipulating their financial reports disguise its bad debt from investors and the public as the company’s condition worsened before it finally went bankrupt, triggering the worst economic collapse since the Depression. The Repo 105 transactions secretly moved billions of dollars of debts off of Lehman’s books.

One would hope that President Obama and the Democrats would finally recognize in the Lehman debacle that while Wall Street chieftains like Lehman CEO Richard Fuld may indeed be masters of a universe, it’s an alternate universe far from our own.

In that alternate universe, the bankruptcy trustee’s report detailing his company’s accounting shenanigans actually absolves Fuld of responsibility for his company’s demise. He told the New York Post the report showed he did nothing illegal.

After all, Fuld was CEO, way too busy to be bothered with details like how his company was hiding $50 billion worth of bad debt. In Fuld’s alternative universe, the Sarbanes-Oxley requirement that CEO’s sign off on the accuracy of their company’s financial statements didn’t apply to him.

In that alternate universe, when a court-appointed bankruptcy states that Fuld “was at least grossly negligent,” that amounts to getting a seal of approval.

Though Fuld’s company declared bankruptcy, his own fortunes did not suffer in any sense that someone forced to live in this universe, rather than that alternative one, would recognize as suffering. Between 2000 and 2008, he took home $484 million. He left with a $22 million retirement package. In fairness to Fuld, that’s a paltry sum by Wall Street standards for the head of a failed firm. By comparison, Merrill Lynch’s Richard Prince was paid $166 million before he left.

Also in fairness to Fuld, he was not the only one whose conduct was criticized in the Lehman report. But in Fuld’s alternate universe, when the trustee found that Lehman’s accounting firm, Ernst & Young, failed to show professional standards of care, that amounts to an award for public service.

In that alternate universe, the little people are just incapable of understanding why it’s better for Lehman to have concealed its debt to make the firm look healthier while it was in fact going down the toilet in 2008.

And taking a big chunk of our economy with it.

While I and most others who are not Richard Fuld find grounds for at least a thorough criminal investigation rather than vindication in the Lehman trustee’s temperate prose, Fuld does have one point.

Everything that Lehman did to cook its books was done under the noses of federal regulators. So, Fuld insists that everything Lehman did was hunky-dory.

One would hope that the president and the Democrats would recognize that back here in the universe the rest of us live in, millions are suffering because of the deceit, arrogance and cluelessness of the bankers who seem to have escaped the meltdown with their wealth and power intact.

One would hope that if President Obama and the Democrats were serious about real reform, they would be making the Lehman report Exhibit One in an effort to discredit the financial lobbyists and their pals in Congress who are foiling efforts at sensible, robust regulation.

One would hope that the president and the Democrats would be determined to correct the mistakes of the past and not repeat them. One would hope the Lehman report would cure, once and for all, the president and the Democrats’ stunning lack of curiosity about how the financial industry blew up the universe we all live in. One would hope that the president and the Democrats wouldn’t find it acceptable to live in a universe where its masters aren’t accountable for their actions, but the rest of us are.

Executive Pay / Lehman / Martin Column / Securities and Exchange Commission (SEC) - 03/19/2010

Heads I Can Borrow, Tails You Can’t

One year and trillions of dollars later, the amount of money banks and credit card companies are lending to consumers is shrinking, while big corporations and Wall Street are awash in dough – our dough.

Harvey Column - 10/19/2009

The real story behind "make him do it"

By now it’s a familiar story: when the legendary labor and civil rights leader A. Philip Randolph met with FDR before World War II to get the president to take action against discrimination, the president boomed back: “I agree with you, now go out and make me do it.”

Lots of people have been retelling the story as a call to action, comparing Obama to the wise, liberal Roosevelt. It urges supporters of everything from Middle East peace to health care and financial reform to keep the pressure on in order to get President Obama to do what he essentially wants to do, but cannot do—on his own because he’s being forced into unpalatable compromises by political pressures.

Martin Column / President Barack Obama - 09/15/2009