Looking Ahead

LOOKING AHEAD by Wally Dobelis Politics make bad morality This column is dedicated to Edward K. Kane, Esq., a neighbor for many decades, well known to our readers as the Old Curmudgeon, on the 4th anniversary of his death. If many of us have trouble sleeping, and wake up with unresolved problems in mind, note that this is not uncommon. It has to do with what I would call the confrontational mode of living, a change in modus vivendi connected with uncertain economic conditions, insecure jobs and the shocks of the political atmosphere. We the elders grew up with honesty and a full disclosure style of life. In business we learned not to "blindside" our partners, and learned to start negotiations by calling the other party and asking for an opportunity to discuss a possible change, e.g. takeover, job rearrangement, family reorganization and many lesser turnovers of conditions. We learned to say "let me share with you," and avoid "gotcha” surprise effects that would anger the other party and undermine the necessary negotiations. Then came the business ethos changes, hostile takeover became part of the language, and hedge funds and financing a buyout by leveraging the credit of the firm that was taken over was a common strategy. Confrontational politics in elections, both between contestants within a party and with the opposite party, with neglect of common interests became the norm, and bad results for the country ensued. Out came evidences of lying and deceit, we lost respect for politicians, and found out that esteemed role models have legs of clay. Kids started asking uncomfortable “how come they can...” questions in school, and a theory of a credible double standard of ethics in a capitalist democracy begs to be developed (call it Lying is Acceptable Rules or LIAR). Meanwhile, both we and our children have learned that full disclosure is out and partial disclosure or none (e.g. “trust me, I'm successful in all I touch") is gaining acceptance among the citizenry. All of the above is making the ‘keeping up with the news” a wrenching exercise, e.g. reading the daily disclosures in politics may be actually bad for one’s well-being. I have found that periodically getting away from it all is a health requirement, and due to unavailability of a trip to Tahiti the next best escape is watching cheap TV comedy, the cheaper the better. The inventors of The Big Bang Theory must really have had us in mind, when inventing a serial about a gang of young geeks, PHDs in abstruse subjects, who are learning to adjust to everyday life and overcome their Aspersers and other maladjustments. Besides, it is vaguely educational, disclosing hints of interesting science, and much better than alcohol (for myself, I indulge in slices of Mastroianni Bros. Inc. Italian Raisin Bread, available upstate at Wall Mark and some other good supermarkets; buy it when you see it on the M Bros bread wagon, it disappears fast). For those of us not settling for the ridiculous (it has the excuse of “how screwed up can we be if there are such smart people acting so whacky”) there are still some realistic TV serials with compassion, such as the reruns of the old Law and Order (the outgrowths specializing in crime toward women and children, and the investigative often drift into fantasy), the Closer, and some series that cheer you by showing enjoyable Florida and Caribbean settings, with humor as the bonus. Unfortunately, the great humorous feature films of the 1930s/40s are scarce on TV, a comment about the deterioration of public taste. Much of the current product is seriously gross. My old friend Edward K. Kane, a corporate lawyer known to our readers as The Old Curmudgeon, who passed away four years ago, leaving his lifetime saved gains mostly to an employee welfare trust, in latter years had the habit of rereading and occasionally quoting the wisdom of the Harry Potter books. He would, in moments of stress, call us all Mumbles, the HP name for non-magic people. That was a mature attitude, which I was reminded of recently, while making voter reminder calls in the upstate 22nd Congressional District, which has been gerrymandered over the ages, from Manhattan and Bronx (it was the old Adam Clayton Powell bailiwick , 1945-71), to an eleven-county monstrosity, looking like a crouching animal , with its head in Ulster, below Albany, and feet below Orange County, the body in the Catskills (in that area you sort of expect to see a bearded pipe smoking mountain man with a hatchet emerge from the door of any old abandoned farmhouse), and a long thin tail trashing towards Finger Lakes and Ithaca (congrats, artistic NYS Legislature, what a good imitation of a Star Wars creature and a Henri Rousseau lion!). There, in the 22nd CD formerly held by liberal Maurice Hinchey now retired. Julian Schreibman, a local man, the first in his family to attend college, an ex Ulster ADA and former terrorist prosecutor as the CIA’s AGC, is trying to upset ret. Colonel Chris Gibson, 20 year and four campaign veteran of US Army, also for many years history professor at West Point. Schreibman cites 2011 legislation items voted for by Gibson, defunding rural broadband and Planned Parenthood (both big economic issues), undermining the Clean Air Act, and protecting tax breaks for Big Oil. Gibson, also a Paul Ryan budget voter, favoring Medicare coupon and weakening Social Security, upon hearing the voices from the outsourcing-hurt Upstate voters recently publicly backed away from the latter, and may have flipped on other issues. I made 42 calls for Julian Schreibman, from his headquarters across from a property decorated with several Gibson posters. Most voters were not at home, seven were hang-ups, three were mildly pro-Schreibman, and three strongly pro- Gibson. The first, upon my trying to share info re SS and Med, laughed bitterly and remarked that there would be none, once the Chinese stopped paying for them. The next offered a flat negative; as for the third, at the mention of the Schreibman name he started calling him a liar, while Gibson was a man of honor. The callee volunteered to line up his neighbors for the GOP candidate. No discussion of issues; however, he liked Senator Kirsten Gillibrand as a lesser liar… There was another bitter comment from a callee, about the tough choice between an unreal ivory tower professor and a patent medicine salesman. The medicine reference reminded me of recently seen L’Elisir d’Amour, the Donizetti opera about a “doctor” who forged the potion with cheap alcohol to make a shy lover brave. The fake worked, when the discarded lover, ready to join the army and forget the girl, suddenly inherited a fortune and won back his love. Scary. Wally apologizes for whatever made him call the Jack Welch Six Sigma principle by a wrong name, in the 10/11/2012 column.

Labels: Chris Gibson, Elisir d'amour, Jack Welch, Julian Schreibman, Six Sigma

LOOKING AHEAD by Wally Dobelis Strange debate, good employment figures If you are looking for a commentary on the first Obama/Romney debate, I can only offer observations, from an East Midtown NYC vantage point. In a gigantic shift, Romney offered a miraculous solution to the budget deficit, by offsetting his expenditure of $5T in tax cuts without raising the costs of the middle class Americans. It is to come from the increases in employment and productivity that would offset the tax cut, particularly in the world of small business, the backbone of industry, which will get a huge tax reduction, down to 25% (I always thought that the Boeings, GMs and GEs were the mainstays in American businesses, but we will let it pass). You really have to live in lalaland, as the red state people may be (we have long suspected the Kansans to be the prototype daydreamers), but Romney is really stretching their imagination. From the NYCity’s 17th Street perspective, let me inform us that the first objective of business continues to be maximizing profits. What does Business do in recession, big or small, when the customers cut down on purchases? It raises prices. If you go to the supermarkets in the T&V area, you find that fruit and vegetables and other essentials cost more. Maybe it is also due to the climate, it has been another dry year, although the same Big Bus people deny the greenhouse effect. A logic problem, what? Further, there are the sneaky price changes – Smart Balance, the omega-3 rich cholesterol resistant buttery spread changes its NYC package from 16 to 13 ounces, hoping it will passes unnoticed among the legendarily careless New York City consumers, as did the tuna and other fish product changes over time, from eight to six oz, and the tomato crush and cat food cans and, oh well, any number of utility-level products. Yeah, so how about lowering prices and acquiring more buyers and then hiring more production help? Forget it, Business says let’s use overtime, save some payroll and benefits costs, or even do outsourcing abroad. To nicely bribe high earning companies to increase payroll. i.e. jobs, by reducing taxes does not work in this environment. Providing employment via government supporting such efforts as energy-productive industries is iffy, the Chinese have monopolized sunlight conversion (Obama’s support of failed American efforts draws GOP fire), and fracking for natural gas destroys American drinking water supply and threatens life on this planet. Parenthetically, there is a cereal grown in India that produces a non-poisonous grain with eight-time thickening ability, to add weight to the water used to push out the gas. Why does it not have more attention? Fracking has established itself because it is state controlled. And no matter how much Governor Andrew Cuomo controls it in NYS, Pennsylvania and Ohio are committed to it, and North Dakota thrives on it. Anyway, despite the GOP, and, more specifically, the tea party efforts to stifle President Obama, in September the US joblessness was reduced to 7.8 percent. The increase in jobs in private industry, ongoing for months, was masked by the wholesale eliminations of teaching and civil service jobs (vide Wisconsin and Florida), but it did exist, despite claims of some GOP adherents suggesting manipulation of Bureau of Labor Statistics data, denied not just by Democrats but also by independents and some Republicans. Notable among those suggesting hanky-panky by the Chicago crowd was Jack Welch, retired CEO of General Electric and my one-time hero. He was the most shining example of increasing the value of his corporation, from $14B at his appointment in 1980 to $400B by 2004, four years after his retirement. In 1980-85 he reduced the GE staff from 400K to 300K, some through selling or liquidating unsuccessful companies (GE was the grandest conglomerate, with literally hundreds of subsidiaries) and buying No 1 or 2 producers in whatever business line, but mostly by shrinking staff. He had his managers rated annually, the best in bonus-earning top 20 percent, then average at 80, and bottom at 10 percent, and fired the bottom group every year. Since managers were expected to rate and fire in the same pattern,, there was fear throughout the enterprise, but also a feeling of purposeful life, expectation of recognition and a career path for the energetic. A managerial innovator (Nine Sigma quality control system), he was also good in resurrecting a relatively sleepy, stilted and stuffy organization, killing the nine-layer management structure and bringing people closer to the decision marking process, meanwhile expanding GE from a technology empire into finance (insurance, worldwide ) and news/entertainment (RCA, i.e. NBC), He was a good example for Boston Consulting Group, Bain and McKinsey, all followers of the ruthless method of analyzing a company from inside, then taking over, issuing bonds , and shrinking jobs and changing the mission, sometimes to flourish, often to fail. Bankruptcy as a management tool? People, jobs? Those are not the driving motives to bring a nation out of recession; these management experts mostly ignore social contract is mostly ignored. What made Jack Welch accuse the President of manipulating data is a mystery to me, since in these columns he has been shown as harsh but unfailingly a person of honor. Meanwhile, this chat should highlight, to no one’s surprise, the finding that lifelong training in adherence to the overwhelming corporate strategy of maximizing profit is not the quality that readies an executive for the job of running the world’s most important country.

Labels: smart balance

The Romney tragedy One cannot help but feel a sadness about Governor Mitt Romney, a Faustian figure of a striver who took the tea party's promises of power, to surrender his soul, and is now acting like a Kabuki figure in front of the world, wavering like a marionette to match his sponsors’ expectations. The May 2012 summer whisper of Mitt Romney to his sponsors, claiming that “it is not my job to worry about the fate” of the 47% non-tax-paying Americans, and that he would “never convince them to take personal responsibility and care for their lives” paints an elitist picture of the candidate that is truly threatening. Romney, at this May fund-raiser, writes the 47% off as “moochers,” as opposed to “makers.” This attitude is tragic, and if he has followers, we may be facing the destruction of the Republican party, founded on all American principles of compassion, religion and social compact. The non-logic described here is excerpted from a masterly op-ed by David Brooks, a Republican thinker, published in NYTimes in 9/17/2012. The title, Thurston Howell Romney, harks back to the jovial ignorant millionaire hero of TV’s The Millionaire, who lives on a desert island. At the end, I have added an excerpt of an analysis from Tax Foundation, via Atlantic Monthly, of the 47%, who turn out to be mostly Republicans. Per Brooks, in 1980 about 30 percent of Americans received some form of government benefits. Today, as Nicholas Eberstadt of the American Enterprise has pointed out, about 49 percent do. In 1960, government transfers to individuals totaled $24 billion. By 2010, that total was 100 times as large. Even after adjusting for inflation, entitlement transfers to individuals have grown by more than 700 percent over the last 50 years. This spending surge, Eberstadt notes, has increased faster under Republican administrations than Democratic ones. There are sensible conclusions one can draw from these facts. Maybe the entitlement state is growing at an unsustainable rate and will bankrupt the country. Maybe America is spending way too much on health care for the elderly and way too little on young families and investments in the future. But these are not the sensible arguments that Mitt Romney made at a fund-raiser earlier this year. Romney, who criticizes President Obama for dividing the nation, divided the nation into two groups: the makers and the moochers. The 47% of the country, he said, are people “who are dependent upon government, who believe they are victims, who believe the government has a responsibility to take care of them,” through health care, food, housing, you name it. This comment suggests a few things. First, it suggests that he really doesn’t know much about the country he inhabits. Who are these freeloaders? Is it the Iraq war veteran treated at the V.A.? Is it the student getting a loan? Is it the retiree on Social Security or Medicare? Per Brooks, the above sentiment shows that Romney doesn’t know much about the culture of America. Yes, the entitlement state has expanded, but America remains one of the hardest-working nations on earth. Americans work longer hours than just about anyone else. Americans believe in work more than almost any other people. Also, 92% say that hard work is the key to success, according to a 2009 Pew Research Survey. Further, it says that Romney doesn’t know much about the political culture. Americans haven’t become childlike worshipers of big government. On the contrary, trust in government has declined. The number of people who think government spending promotes social mobility has fallen. The people who receive the disproportionate share of government spending are not big-government lovers. They are Republicans. They are senior citizens. They are white men with high school degrees. As Brookings Institution reports, the people who have benefited from the entitlements explosion are middle-class workers, who contribute, more so than the dependent poor. Romney’s comments also reveal that he has lost any sense of the social compact, the underlying government and tax structure that changed mankind from savages into society. In 1987, during Ronald Reagan’s second term, 62% of Republicans believed that the government has a responsibility to help those who can’t help themselves. Now, according to the Pew Research Center, only 40 % of Republicans believe that. The Republican Party, and apparently Mitt Romney, too, has shifted over toward a much more divisiveis social view — from the Reaganesque language of common citizenship to the libertarian language of makers and takers. This country will not trust the Republican Party to reform the welfare state if that party doesn’t have a basic commitment to provide a safety net for those who suffer for no fault of their own. The final thing the comment suggests is that Romney knows nothing about ambition and motivation. The formula he sketches is this: People who are forced to make it on their own have drive. People who receive benefits have dependency. People are motivated when they feel competent. They are motivated when they have more opportunities. Ambition is fired by possibility, not by deprivation, as a tour through the world’s poorest regions makes clear. Sure, there are some government programs that cultivate patterns of dependency in some people. I’d put federal disability payments and unemployment insurance in this category. But, as a description of America today, Romney’s comment is a country-club fantasy. It’s what self-satisfied millionaires say to each other. It reinforces every negative view people have about Romney. Personally, Brooks thinks that Romney is a kind, decent man who says stupid things because he is pretending to be something he is not — some sort of cartoonish government-hater. But it scarcely matters. He’s running a depressingly inept presidential campaign. Romney’s entitlement reform ideas are essential, but when will the incompetence stop? Per Tax Foundation, who are the 47% of non tax-paying Americans? As you guessed, they are mostly Republicans, 10.3% are elderly, on SS, 6.9% non elderly with incomes under 20K, and 28.3% payroll-tax-paying, with inxomes under $30K.One percent are non-tax paying millionaires. As to where the 47% are, the highest percentages are in the red GOP states, the South and IA, the lowest in blue . NY numbered 23 is in the middle, PA and WI are better, MI at 20 and CA at 16 are worse off. Wally Dobelis thanks David Brooks, NY Times, the Tax Foundation and Atlantic Monthly. A postscript: after tis column was written, Romney took a big boost in his winning Denver dialogue with the President, and Brooks nerly recanted his position, in joy

Labels: 47%, David Brooks, Romney