Tuesday, February 25, 2014

QUESTION OF THE DAY -- AND THEN SOME...

What were your favorite breakfast cereals when you were a kid?

One of the reasons I ask this is because I can't remember the last time I had a bowl of cereal for breakfast -- I've been working 12-hour nights for years, and concepts like "breakfast time," "lunch time," and "supper time" do not figure prominently in my life. I eat what I can eat when I need to eat it, the presence or the absence of the sun be damned. "Breakfast" often consists of half a submarine sandwich, "lunch" usually involves a salad, a yogurt, and the other half of the sub, and it's not odd for me to have a Western omelette for "supper" before bedtime. Drinking lots of beer over the years has helped just a little more than it's harmed me in this regard -- but that's a subject for another post. Now back to cereals...

I ate dozens of cereals when I was but a tiny mockling. I remember eating both Quisp and Fruit Brute at least once -- do either of those brands ring a bell, senoras and horsemen? I even remember eating Lucky Charms when that brand only featured four different marshmallows. But there are three cereals from my kidhood that I seem to recall liking the most: Cinnamon Life, Frosted Flakes, and Rice Chex. I might have been the only kid in my hometown who liked Rice Chex.

One cereal I couldn't stand was Cocoa Puffs. Never liked it, never will. Sonny, to me, was the perfect mascot for that cereal -- you truly had to be cuckoo to enjoy eating that shit. I didn't like Kellogg's Corn Flakes, either, but at one point in my life, economic troubles forced my nuclear family to live with my maternal grandparents, and they ate Corn Flakes for breakfast. This meant I was going to eat Corn Flakes for breakfast, too, so I eventually got used to that. But I don't think I'll ever acquire a taste for Cocoa Puffs.

Ho-kay, enough about me. What about you?

Ideas and Diplomacy

This week is the week that my ideas about international relations and problem-solving (example here) seem to be gaining a higher profile and even some currency. Not that I wrote any of the articles or can even claim the ideas as original thought. I can claim a longstanding belief in the underlying ideals and have articulated them in a variety of ways over four decades. So I am pleased to see that others are presenting these ideas to a larger audience.

The Institute for Policy Studies just released a report called "Just Security" in which the US would act "as a global partner, not a global boss".
Among other features, "Just Security" calls for reducing US military spending by a third, or some US$213 billion; carrying out a "rapid" withdrawal of US forces from Iraq; and seeking sharp cuts in the US and Russian nuclear arsenals as a first step toward realizing the nuclear Non-Proliferation Treaty's goal of banning nuclear weapons.

The new approach, laid out in a 69-page report released in Washington on Tuesday by the Institute for Policy Studies' Foreign Policy in Focus (FPIF) program, also calls for sustained and generous US engagement in multilateral institutions, particularly those aimed at reducing the emission of greenhouse gases that contribute to global warming and enhance the abilities of poor countries to curb the spread of deadly diseases.
(emphasis added)

The Nation has a good article on liberal internationalism and notes that America's longstanding commitment to international accord and action is threatened not by neo-conservatives but liberal internationalists who still cling to the idea of great power influence (neo-cnservative lite). The article presents a good definition of international relations worthy of America:
[Genuine liberal internationalism]...is neither a naïve idealism that ignores the realities of power nor a crude realism that ignores the power of ideals. While universal liberalism and universal democracy are its ultimate goals, the practical and immediate goal has been global peace. Enduring international peace is a necessary, though not sufficient, condition for liberal democracy. Why? In a world of recurring great-power conflicts or widespread anarchy, concerns about security may force even liberal democracies to sacrifice their freedoms to the imperatives of self-defense. This is what Woodrow Wilson meant when he said that the United States and its allies must make the world "safe for democracy." A world safe for democracy need not be a democratic world. It need only be a world in which democracies like the United States are not forced by recurrent world wars to turn themselves into armed camps.

Two articles in a week presenting ideas that I support is pretty good. Today I came across The First Resort of Kings: American Cultural Diplomacy in the Twentieth Century by Richard Arndt. The book discusses many of the above ideas in historical context as diplomacy that uses knowledge and understanding of culture and ideas in relating to other nations. Not surprisingly, this approach has contributed to international cooperation and accord. The reviewer concludes:
In concluding his thorough review of the 20th century, Arndt addresses the 21st: "Why do Americans, having discovered the appalling damage to America's image, and, beneath that thin crust, to US credibility and trust, overlook our rich history of cultural diplomacy?" Indeed, the history is rich enough and the lessons learned are universal enough that a translation of this book could serve as a handbook for the foreign service of any country that has the foresight to look beyond its immediate problems, as well as the courage to view security without wearing the blinders of panic and mistrust.

Foresight and courage. That would be good. Maybe it will even get us through that hard rain that Mimus warned us about.

I Do So Enjoy Other People's Misery

Still in a vile frame of mind. So when John Aravosis at AmericaBlog went on his quarterly tirade about Ralph Nader, it warmed the cockles of my very meager heart.

"The man lost us two elections, he deserves to be roasted on a spit."

Gee, John, how did Nader cost "you" the election when Gore couldn't even carry his home state?
How did Nader cost "you" the election when barely 51% of eligible voters cast a ballot in 2000? (Compared to the recent French run-off election when voter turnout was nearly 85%...the French obviously felt something was at stake....) And please explain to me why, in a country where we "celebrate" our right to vote for anyone we damn well please, was I obliged to vote "your way?" (Now John has lots of degrees and he's willing to whip them out at a moment's provocation to demonstrate his superior knowledge in these matters so be careful). I didn't care for Gore at the time and nor did I believe that the American Public could be stupid enough to elect George Bush. Now I now that the majority of my fellow citizens are fuckin' morons and I treat them with the respect due fuckin' morons.

I held my nose and voted for Kerry in 2004. But let me ask you this, oh Special Voice and Seer of the Democratic Process and Party, Kerry was the best you folks could come up with????
Kerry couldn't beat one of the worst sitting Presidents since Nixon. How did Nader cost "you" that one?

I am proud to say I did NOT cast one single ballot for a Democrat in 2006. I even voted against Rep. George Miller, who is a liberal Democratic Institution in this district (holding office since 1974). I voted for the Libertarian, who did rather well.

But here we are six months into 2007 and it's still necessary to bash Ralph Nader. Hey...wait...
just a moment...didn't the Democrats take back Congress in the 2006 elections? Wait, the Democrats hold majorities in both houses, so things should be looking up, shouldn't they? It would seem you would be able to check this unitary executive run amuck and steer the country back on course...How about withholding funding for the war until you get a timetable for withdrawal? How about launching some investigations into the events leading up to the war (and we'll overlook the fact that every single Democrat voted "yes" on the War Powers Authorization Act)? How about a couple of quick resolutions saying the war isn't going too well?

Meanwhile public approval of Congress is lower than that of Bush...a Democratic Congress I might add...is lower than that of Bush. Tell me, how did you manage that?

Better to revile Nader than look at your own failings.

And even at this early stage of the two year root canal, I doubt I'll be voting for any Democrats.

ABC News: Karzai Warns NATO: Afghan Life Not Cheap

You poor, deluded man. Afghan life is not cheap; it's absolutely worthless from an American perspective. Do you really believe that the AvAm (short for Average American, a phrase coined by Mickey Z) cares for an instant about Afghani lives? The AvAm is terrified and repulsed by your very existence. You worship "false gods." You live in some twilight zone between the 9th and 14th
centuries. And you completely eschew Western Culture and Values. Prior to 9/11 very few Americans could point to a map and say, "Aw shucks, that's Afghanistan!" Perhaps a few remembered Afghanistan from the Clinton era when he launched some cruise missiles in an effort to nail Osama bin-Laden, but we all know it was a clever ploy to distract everyone from The Great Presidential DNA Horrific Crisis that nearly crippled this great land. There are even a few scholarly types, generally to be found on the coastal regions of this nation, who will remember Afghanistan as a very useful tool for entrapping the Evil Empire that once was the Soviet Union. But with the Soviet Union split into its component parts, you ceased to be useful and therefore of much interest to us.

Corporate America couldn't give a damn about Afghanistan. For starters, you have no money. And you have no natural resources for us to exploit at your expense. No oil. No bananas. No diamonds. We like all three of those things and you don't have any of them, so you're kinda screwed in the globalization scheme of things. And you steadfastly refuse to embrace Western Values and all the neat Consumer Culture that comes with it. How can we possible give you one degree of respect if you don't have at least one McDonald's, a PizzaHut or a Taco Bell. Blockbuster won't even cast a glance your way as you barely generate enough electricity annually to keep Ukiah, California lit up for a week. And you have no money.

In case you haven't noticed there is only one segment of America paying any attention to Afghanistan: the current administration. Now, this may come as a surprise and I hope it's not too much of a shock, but they don't love you. They don't respect you. They don't even really like you. It might be helpful for Afghanistan to consult a map (if the Taliban didn't destroy them all...otherwise request a subscription to "National Geographic" in your next aid package-they have really keen maps). Look who borders you to the west...yep, Iran. All this time we've been pretending to like you and insisting we are there to help, but the truth be known, you are nothing more than a hellish landing strip and assembly point for our next adventure in empire.
So Mr. Karzai, life is not cheap in Afghanistan (though I seem to recall stories from the invasion days when the CIA paramilitary types were running around with satchels of $100 bills paying off families every time we created some "collateral damage"....) it's worthless.

FROM ANATOMY OF GREED: NO HAPPY ENDING HERE...

In January 2002, Cruver got a letter from Enron stating that his employment was terminated. All that meant to him was no more free checks. It was trivial compared to what else was unfolding that month. First, Enron fired Arthur Andersen as its auditor -- and over the next several weeks, Andersen was fired by Dynegy, Delta Airlines, Pennzoil, Sun Trust Banks, and over a hundred other companies. Less than a week after Andersen was dropped, Ken Lay resigned as Enron's CEO and Chairman of the Board. But the worst news came on January 25. A former Enron Vice Chairman, J. Clifford Baxter, had been found dead from a gunshot wound to his head behind the wheel of his Mercedes. Rumors spread that he had been murdered because of what he knew about Enron's inner workings, but after the autopsy was finished, Baxter's death was ruled a suicide. Besides, the police did find a final note to Baxter's wife:

Carol,

I am so sorry for this. I feel I just can't go on. I've always tried to do the right thing but where there was once great pride now it's gone. I love you and the children so much. I just can't be any good to you or myself. The pain is overwhelming. Please try to forgive me.

Cliff


That one note encapsulates Enron's entire legacy: betrayal, moral bankruptcy, and shattered lives. However repentant any of them may be, I have no sympathy whatsoever for the likes of Kenneth Lay, Jeff Skilling, Andy Fastow, Rebecca Mark, Joe Sutton, or even Mr. Blue. None of them were too concerned about their actions while they were riding high and wrecking other people's lives. Good fuckin' luck in front of that Houston jury, you members of the defense -- you're all gonna need it.

But then there's Brian Cruver. For him, life goes on after Enron. What to do?

Hey, why not write a tell-all-you-can book topped off with helpful hints? Cruver's tenth and final rule for conquering corporate America (this one's my favorite): "Always ask the person interviewing you, 'How did you become so smart?'"...


...

If an investor is worried about the next Enron, they need look no further than a company's board of directors. The directors are the watchdogs for the investor -- with the pure and simple task of maximizing shareholder value. The question shouldn't be, "Do I trust this company?" because a "company" is nothing more than an officially authorized illusion. A company is not a person; therefore, it should not be judged as having human characteristics. A company is not trustworthy, loyal, naughty, or nice. For those who argue that companies are "controlled" by people, I refer them to Exhibit X: Enron. The people there were "controlled" by the company.

The question of trust should be asked on an individual level, not trust in the company but trust in its leaders. Am I talking about CEOs and CFOs and the rest of the C-level managers? No.

Let me now refer you to Exhibits Y and Z: Skilling and Fastow.

The question -- and the responsibility -- of investor trust should be aimed aggressively at the independent members of the board of directors. Unlike management, they have an agenda strictly in line with shareholders. After all, directors are most often elected by the shareholders. The members of the C-level gang, on the other hand, have peripheral agendas, some that can be potentially lethal to the stock price and the stability of the company.

The days of quick and simple board meetings are over. Enron's collapse is an alarm bell for board members to start earning their $300,000 per year, instead of just sitting on their hands...

People have asked me who I blame the most for the Enron mess, and now you know my answer.

As an investor, I have three things to point out to the independent board members of every company I own stock in (and some companies I don't own stock in):

1. There are a lot of crooks out there.

Studies by the FBI and Bureau of Justice Statistics in 1999... show that white-collar crime is alive and well in the United States... In that year, more than 487,000 arrests were made in the crime categories of fraud, embezzlement, forgery, and counterfeiting.

Also in 1999, federal courts convicted over 12,000 individuals of committing crimes in those same categories...

...

White-collar crime isn't just for breakfast anymore. Pay attention to what your senior managers are doing and what they may be hiding.

2. Risk has gotten riskier.

...

Risk management is not about avoiding risks -- risk management is about managing risk (Surprise!). Board members need to be aware of what these risks are and, more important, how the CEO and others are managing them.

Risks facing businesses have always been bucketed into a few basic categories: market risks (such as foreign-currency-exchange risk, interest-rate risk, commodity-price risk, and equity-price risk); business risks (such as competitor risk, technology risk, and supply/demand risk); and operational risks (such as natural-disaster risk, quality-control risk, and management-error risk).

Let's see, I left out liquidity risk, regulatory risk, environmental risk, industry-consolidation risk, internal-expansion risk, insurance risk, bankruptcy risk, credit risk, payroll risk, legal risk, model risk, Internet-hacker risk, computer-virus risk, terrorist risk, fraudulent-behavior risk, you-could-go-to-prison risk, you-just-lied-to-the-shareholders risk, the-CEO-said-"asshole" risk, Wall Street Journal risk (credit Andy Fastow with that one), and many, many, many more.

...

3. Ethical Behavior = Higher Returns.

As proven by Enron, dirty deeds at work inside a company can cut a stock in half in just a few stock-market minutes (see above: Wall Street Journal risk). Sudden surprises that sink well below the ethical waterline can do much more harm to the stock price than would consistent, clear doses of the unshredded truth. Especially when those sudden surprises are first revealed by news organizations like the Journal.

Deliberately misleading stock analysts, masking true financial conditions, spewing positive propaganda around failing projects, silently delivering flawed products -- these efforts to conceal reality will indeed support a short-term gain, but ultimately the truth will wipe out investor confidence and the many price multiples that are tied to it...

(Off-topic: Good Lord, I hope someone possessing a conscience and laboring away deep within the bowels of Bush & Co. is reading this...)

On March 26, 2002 -- exactly one year after he began working at Enron -- Cruver looked in the mirror. He really needed to shave. (Frankly, so do I -- and I'm currently employed.) And he, having been betrayed by Greed Incorporated (a.k.a. Enron), wondered, of all the things one could possibly wonder about, if he was greedy...


...

By any definition, "greed" is an excessive desire, but I was never exactly clear where the "excessive" line should be drawn. When does desire -- for money or material goods or whatever -- become excessive?

We live in a world in which desire builds things, invents things, cures things, and discovers things. But when does this desire become gratuitous? Is it excessive to want a better life -- to want more adventure, a bigger house, a nicer car, fancier clothes, or premium dog food?

I don't think it's that simple. I think greed -- or excessive desire -- is defined by the means, not the end. It's the behavior that should be tested for excessiveness. Greedy is a term that applies to someone who lies, cheats, and steals in the name of possessing more than they need or even deserve. Financial success alone doesn't equal greed, but being a scumbag with financial success -- that's where the line should be drawn.

So, were Enron executives greedy because they had eight-digit bank accounts? No. Were they greedy if those millions were generated by fraud or at the expense of others? Absolutely!. And the Enron culture of bonus-driven behavior that twisted the truth and devastated thousands of people... Greed, Incorporated!

A year after starting at Enron I looked in the mirror, and I was thankful that I could stand to look in the mirror. I thought others might be having a hard time with that...


Don't know about Skilling, Lay, or Fastow, but I'm positive that this was a major problem for someone like Cliff Baxter...

Brian Cruver wrote Anatomy of Greed to show readers how he, and everyone else within the Death Star, not only believed in the myth spun by Lay and his underlings, but wanted to believe in it. In writing this book, whether or not he realized it, he clearly illustrated what can happen to people for whom the most important things are their illusions. Calvin Coolidge once quipped that the business of America is business. If so, then we better start paying attention to what people like Brian Cruver have to say, because we can't afford to use a disaster like Enron for our template. We can do better, we deserve better, and we know better. Corporate America needs to stop gazing at the bottom line and start looking at what goes into the bottom line. After all, it's only good business sense.

Until then, corporate America will continue flirting with the, uh... "no-bottom-line" risk.

* * *

The End.

THE METRICS OF FAILURE...

Defense Secretary Don Rumsfeld complains that America is losing the propaganda war. Gee, the Republicans were right all along -- you can't solve a problem by throwing money at it...

...Modernization is crucial to winning the hearts and minds of Muslims worldwide who are bombarded with negative images of the West, Rumsfeld told the Council on Foreign Relations.

The Pentagon chief said today's weapons of war included e-mail, Blackberries, instant messaging, digital cameras and Web logs, or blogs.

"Our enemies have skillfully adapted to fighting wars in today's media age, but... our country has not adapted," Rumsfeld said.

"For the most part, the U.S. government still functions as a 'five-and-dime' store in an eBay world"...

...

The Pentagon's propaganda machine still operates mostly eight hours a day, five days a week while the challenges it faces occur 24 hours a day, seven days a week. Rumsfeld called that a "dangerous deficiency."
He lamented that vast media attention about U.S. abuses at Abu Ghraib prison in Iraq outweighed that given to the discovery of "Saddam Hussein's mass graves"...

True, but the mass graves discovery gets more attention than the fact that Saddam got tons of military supplies and political support from the Reagan administration. And let's not forget this classic pic:



If you must wage a propaganda war, Rummy, you could at least pick a goddamn side...

JOKE, COUNTER-JOKE...

The DVD Enron: The Smartest Guys in the Room features a clip from a webcast in which Jeff Skilling, who resigned as Enron's CEO less than four months before the company went bankrupt, cracks a joke about the California energy crisis several years back that triggered rolling blackouts and ridiculously high electricity rates -- a crisis that was manufactured and aggravated by Enron traders:
You know what the difference is between the state of California and the Titanic?... At least when the Titanic went down, the lights were on.
Yeah, well there's a difference between the Titanic and Enron, too: While the Titanic sank, the captain stayed on board...