Bank "went wrong" in real estate: Citigroup CEO - Yahoo! News

Citigroup Inc Chief Executive Vikram Pandit on Tuesday blamed prior management for diving too deeply into real estate, causing losses that led to this week's massive government bailout of the second-largest U.S. bank by assets.

"What went wrong is we had tremendous concentration in the sense we put a lot of our money to work against U.S. real estate," Pandit said in an interview on PBS' Charlie Rose show. "We got here by lending money, and putting money to work in the U.S. real estate market, in a size that was probably larger than what we ought to have done on a diversification basis."

So let me get this right: Citigroup's problem is that they did not see the future, so they invested in areas that turned out to be poor performers. Is that what I'm hearing?

Because if that is what I'm hearing, it is going to be a very long, very deep recession. Citigroup relied upon its size, and upon its ability to place sizable sums of money into any particular field, in order to make more money. The company has a very large credit card business, for example, and relies upon the size of that business in order to give it the scale that allows it to dictate terms to its suppliers and to snarl menacingly at its customers. Citi, if I recall correctly, was one of the few banks that was large enough to pull all phases of student lending into itself (rather than pitching the loan to Sallie Mae). Citi's size enabled it to profitably invest in real estate in hot markets outside of its home base in New York--it was the size of its operation that was key to its success in far-flung markets like Las Vegas, Phoenix, Los Angeles, and Orlando.

You can bet that Citi's cost of capital was much lower than the cost your local bank had to pay, at least until fairly recently. If your local bank could have pulled in funds at a similar cost to Citi's cost, your loan's interest rate would probably be a percentage point lower.

The problem Citi faced, and is facing now, is that the very size which was its advantage in times of plenty, the very ability to move large sums into a sector when that sector had above-average returns, also intensified the losses during tough times. On top of that, Citi's size means that the company seeks to expand into dozens of related side-businesses. No single person has the expertise to effectively manage the resulting mishmash. For a better understanding of conglomeritis and its effect on profit, substitute "ITT" wherever you see Citibank/Citicorp/Citigroup.

Now, it was pretty clear in 2004/2005 that the real estate market was overpriced, overheated, and due for a bust. The price of that asset was far greater than its intrinsic value, so much that it can only be explained as "investors' psychosis", a state that resembles a gold rush. Here in the golden state, people came from all over the world to try their hands at digging for gold in 1849. That the management of Citi and other large financial institutions suggests that they really were not earning those high salaries after all.

Of course, now that "we the people" own 20% of Citi, it would be nice to imagine a change. Like, maybe their managers get a pay cap of $60,000 per year. We can call it "pay for performance". Maybe we can fire that rude guy on the telephone--the one that seems to work at every bank--and replace him using a competitive process that canvasses local McDonald's restaurants for applicants. Maybe we can hire a second teller to work on Friday afternoons.

economy, bailout, banking

Obama Vows Swift Action on Vast Economic Stimulus Plan - NYTimes.com

In light of the downturn, Mr. Obama is also said to be reconsidering a key campaign pledge: his proposal to repeal the Bush tax cuts for the wealthiest Americans. According to several people familiar with the discussions, he might instead let those tax cuts expire as scheduled in 2011, effectively delaying any tax increase while he gives his stimulus plan a chance to work.

Obama may delay tax-cut rollback for wealthy - Yahoo! News

President-elect Barack Obama may consider delaying a campaign promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, two aides said on Sunday.

David Axelrod, the Obama campaign strategist who was chosen to be a senior White House adviser, was asked if the tax cuts could be allowed to expire on schedule after tax year 2010 rather than being rolled back by legislation earlier. "Those considerations will be made," he said on "Fox News Sunday."

It is encouraging that President-elect Obama is willing to let real life change his unrealistic promises to make the economy better by taxing "the rich". While we all have the impression that "the rich" are not paying their fair share, the reality is that the lowest-income half of Americans pay less than 12% of taxes. That occurs at about the $30,000 per year income level, which really isn't very much. About 88% of taxes are paid by those making over $30,000.

It is less encouraging that Obama is still acting as a shill for big business, big banks, and big labor. Our economy isn't suffering because of errors made by individuals, small businesses, small banks, and small labor unions. Our economy is suffering because the larger groups seized power and used it to deprive smaller competitors of both power and money. The big financial institutions, for example, used their pull in Washington to evade state-level consumer protections, allowing predatory lenders to charge usury-level interest to those with the lowest incomes, including college students and service employees. They were also allowed to buy up competitors, so that their size was such that their imminent collapse (fully justified by their misbehavior) threatens the fabric of our economy.

We have to understand that this could not have happened without governmental involvement. It was governmental action that made it easier for large financial institutions to evade state-level regulations, which in turn made such institutions more enticing to the large and amoral institutional investors who seek only money and care not for the fate of renters, borrowers, employees, or bystanders who are harmed by the actions of these institutions. It was governmental action that allowed unregulated markets for derivatives and guarantees ("credit default swaps") to arise, governmental action that allowed "subprime" lending to grow, and governmental action that allowed the rapid home price increase that fueled the speculative bubble. At the root of all of this is governmental policies, and this is where President-elect Obama's team can help:

• The mortgage interest deduction: this winds up supporting the unethical lenders and brokers that prey upon vulnerable consumers. It needs to go, and quickly, so that consumers have an incentive to seek out the best loans and lenders can no longer market their high-interest loans by telling people that the interest rate won't affect them.


• Financial regulators: by refusing to enforce the law, they signaled to financial companies that anything goes. These regulators have also made it clear that they believe there are too many financial institutions in our country, so they have sought industry consolidation. This tends to deprive small towns and smaller borrowers of capital, as these banks all rush to move money to higher-return areas in large urban areas or to "credit card banks" in largely see-no-evil states. Making federally-regulated institutions subject to consumer-protection laws in the home state of the consumer would immediately make it easier to restrict outlandish behavior. Strengthening community-based lending requirements would also restore the balance between hometown banks and their large corporate competitors.


• Wall Street: Much has been made of the short-term orientation of investors, but these are primarily large institutional investors that seek unbroken records of increases for their rankings. Meanwhile, these doofuses far overpay corporate executives, and react with glee when those overpaid CEOs slash payrolls and replace employees with lower-paid workers in third world countries. Institutional investors, because of their size, wield a lot of influence, get better pricing, and have better information than individual investors. But institutional investors, by looking only at the short-term prospects, seriously distort the incentive for corporate managers to run their companies. Obviously, regulation is needed, and it must have as its hallmark restoring the balance between individuals and the large institutional investors, in pursuit of management that runs their companies for the long-term benefit of their shareholders and employees.


• Main street: Clearer content origin labeling requirements will not only help those who wish to avoid child labor products, it will also help those of us who wish to support our local producers of whatever items we purchase. Even within the country--Clinton-era rulings allow frozen out-of-state poultry products to be sold in California as "fresh"--honest labeling helps consumers. I do not mean excessive and extreme labeling, such as California's Prop 98 warnings. ("This product or facility may contain detectable amounts of substances known to the state of California to cause cancer or reproductive damage.") I mean common-sense labeling, such as telling whether milk is produced using BST, whether meat is produced with female hormone injections, whether meat is produced using antibiotics, and whether pet foods contain imported substances like the one that killed dogs and cats a in 2006.

I am hoping that President-elect Obama quickly loses his very American fascination with bigness: big corporations, big government, big unions, big environmental groups, big education. The key to making our economy better is to return control over things that affect them to the individuals and smaller businesses whose economic activities--in aggregate--determine the future of the entire nation. This will require a bold initiative to reshape the way everything the government does is run, from taxation to regulation, from education to highways, from air travel to retailing, from political parties to lobbying and advocacy.

One area that I think is vitally important is to undo the old court ruling that grants "personhood" to corporations. Among other things, it grants corporations the right to petition the government, which, when combined with their nearly-unlimited lifespan and concentration of financial and labor resources, tilts political power away from individuals and small groups to large corporate organizations such as GM, Citicorp/Citibank, Bank of America, Monsanto, the AFL-CIO, MOVEON.org, and GreenPeace. It is time to revisit this, and to seek a dramatic curtailment of the powers granted to corporate organizations. Our nation is being devoured and destroyed by corporations, and not just profit-making businesses, either. We have to arrest and reverse this political and economic cancer, and we have to do it soon, lest our corporate parasites sell us to China or another foreign power.

economy, economic stimulus

No matter how you feel about the auto manufacturers, they are in danger. Here's a propaganda video meant to spur Congress to approve a $25 billion loan package (likely to be followed by at least one or two more such loans). Still, after we give away $700 billion to incompetent bankers, it is really hard to turn down a much smaller bailout for incompetent auto makers.

I have mixed emotions. It is true that their closure represents a huge loss for our economy. But I am struck by the fact that everyone had to have known that oil prices would go up again (the thing that first crimped their sales). Everyone had to know that they needed to have a line of entry-level vehicles: inexpensive, reliable vehicles with low fuel consumption, available for prices that are workable for young low-income workers who have not yet established credit records.(Such vehicles will take a lot of work to create, but that is why they should have been working on this during the boom years.) Such vehicles would be ideal for this time, when credit is generally unavailable and fuel prices were recently at historic highs.

The problem at GM, Ford, and Chrysler is much less about high pension and medical costs and much more about a lack of managerial imagination. With over thirty years of history showing that the industry was doomed as it has been constituted, their managers should have been looking at things from top to bottom--starting with their 19th century style of theory X adversarial relationships with their employees. They should have been working all along to attract lasting buyer affection by appealing to the newly-employed, getting rid of the whole "gotcha" sales model (where a buyer goes to work on Monday and learns that a co-worker got a better deal), Above all, they needed to get rid of the whole "executives are better than you" act and adopt a "we're all in this together" model of industrial relations.

They tried "restructuring", separating troublesome component operations into stand-alone entities (GM spawned Delphi, while Ford produced Visteon). All this did was aggravate their problems.

As a baseball fan, I understand what happened. Although there were signs that some players were getting arthritic, the team was winning. Why trade away part of a winning team and gamble on untested minor leaguers that will not perform at the same level for a few years? It is far easier to ride the winning team until it breaks down and can no longer produce the results sought. Except riding means that there will be no replacements ready when the current star players break down retire, or start feuding. That right there is the reason why it is absolutely vital that managers prepare for the next crisis during the boom times when there is no crisis.

As the saying goes, it is hard to build a house in a storm. The only sensible thing to do is build the house during the calm period, so that it will be there to provide shelter during the storm.

Because of all this, I have a negative sentiment toward the managers who ran those companies into the ground. Yet, I know that we do need domestically-based and owned producers. Do we really believe Hyundai will produce tanks and APCs for us when China threatens to invade Taiwan over it? Do we believe that our economy is strengthened by giving up still another major industry to foreign competition? Anyway, watch the video, come to your own conclusion, and contact your congressperson and senators to voice your opinion. It is a tough decision to make, and I do not envy Congress having to make that choice.

Keystream Unveils SmartAd, Wants To Turn Watching Videos Into A Painful Experience

I don?t go to YouTube (or similar sites) for the ads, so anything that requires a click is ineffective. If you want advertising to work for me, you have to:

(1) Get out of my way. No pop-ups, pop-unders, page-covering expanders, moving obstacles, or interstitials. Avoid moving, flashing, distracting ads, also. If you interfere with my enjoyment of the site, you?ve lost my business.

(2) Entertaining, humorous ads get a little bit of a pass. But this does not mean that putting Frank Caliendo between me and the content I?m there to see is going to work.

(3) Advertising is already pervasive and intrusive. If you want to improve my response to your advertising, choose sites that limit the amount of ads they carry. Compare this to morning drive time on the radio. Play five to seven commercials, then play one or two songs. Then let the DJ talk for a couple of minutes, followed by another five to seven commercials. Sorry, but the content gets buried in the advertising, and YOUR message gets buried in the fifteen other advertising messages I just heard.

(4) The only effective advertising is NOT instant-response advertising. When you open your newspaper or magazine, do you immediately go down to the nearest store to pick up the products advertised? No, you pick up a few of the many products advertised at a later time, when you happen to be at the store anyway. As long as Big G and other online ad purveyors portray this as an immediate-response advertising medium, they will mislead their customers (advertisers) and those customers are destined to be disappointed.

There are already plenty of sites I refuse to visit because of their ads. Either they have too many ads, or their advertising is intrusive, or their advertising misuses my computer?s resources (lots of ?rich media? ads are like this, as are many JavaScript ads). Or perhaps their ads are deceptive. (?Spyware detected on your computer. Click here to scan.?) We all know that sites have to pay for themselves or close. We can all accept the need for advertising and other monetizing activities. What we cannot accept is the idea that putting more ads in more places is the answer.

If the Web advertising industry does not see this, they are doomed.?my comment on the site.

There is truly something to say for advertising. Without it, we would not have over-the-air "peasant" television, nor radio, nor many Web-based businesses. How long would MTV's "The Real Life" had lasted if viewers had to pay for it? Remember that it would have to be fully supported by viewer fees. How about NBC's "Saturday Night Live"? How long would it have lasted? "American Idol"? So you see, viewers and web surfers are used to advertising paying a substantial portion of the cost of producing and delivering the content they watch. They are not willing to pay the full price.

We should not let this convince us that we can place unlimited and unrestricted ads and the viewers will continue watching. We cannot expect viewers to put up with overly intrusive, invasive, interruptive advertising in order to get the content they desire. Already, a substantial portion of a site's visitors will not return if the site has pop-up advertisements. Pop-unders are a little different, because the visitor often does not know about it until after closing his/her browser. After a certain point, advertising is so pervasive that it begins to be ignored.

Think about all the people you see wearing football, baseball, or basketball team logos on their clothing. Do you find that this makes you want to buy tickets? (I admit that the teams have found another bonanza, because the people wearing those logos paid for the privilege.) Think about the guy on the freeway, whose car has about fifty bumper stickers on it. Do you change your opinions or your buying habits because of it? No, of course not. And that is what over-abundance of advertising does. To use the parlance of Joel Spolsky, this is "pissing in the well".

I remember when the Sunday Los Angeles Times was this huge paper, primarily composed of advertising. Most everyone I knew read the color comics page and threw the rest away. A few people read the calendar section or the entertainment summary or the business summary, but the vast majority read only the comics. Now, the L.A. Times is losing readers rapidly (as is the whole newspaper industry), and no one has the time to even check to see whether there is some content in the Sunday paper. That high advertising volume enabled them to live fairly well--but once it started to shrivel, readers remembered trying to slog through the advertising thicket to find some genuine content. The paper chased away many of its readers by its greediness.

This is what I believe the Web advertising industry is doing. Don't get me wrong, I'm planning to put some ads here shortly. But it will be limited advertising that doesn't create a barrier. There will be no "rich media" ads, no pop-ups, no pop-unders, and no "I'm desperate for funding and I'll accept anything" ads. I wouldn't regularly visit such a site, so I won't subject you to it either. (That applies to all ten regular readers.) I do like many of the things that Syed Balkhi is doing, but my goal isn't to blog for money, but to defray some of the cost of hosting and continue to build credibility for myself and my soon-to-form company.

Anyway, keep watching. Now that the recession is undeniable, a lot of companies will suddenly start slapping ads everywhere as they scramble for a business plan that will keep the doors open. Yet, the very paltry returns that advertisers will get are going to make it very difficult to live on the proceeds. The extreme case is Twitter, but there are plenty of others out there.

web advertising

Allowing the Bush tax cuts to expire. Barack can get political and ?not entirely dishonest? and not mention this as raising taxes, but it has the same result. Some had indicated that allowing the Bush 2003 tax cuts to expire will double the tax bill of some folks earning between $30,000 and $50,000. I ran the math myself using the historical tables at IRS.GOV and found that my simple example of a single person earning $30,000 would see an increase of 4%. This took me five minutes to do, didn?t include a number of assumptions that I probably should?ve included and would?ve if I?d had more time, and probably wasn?t nearly as rigorous as it could have been. Still, a 4% increase ISN?T a ?tax cut?, and $30,000 ISN?T ?rich?.

Myopic Zeal

Now, if you head over to the IRS site, you can find this spreadsheet document that demonstrates that about 48.7 percent of Americans have taxable incomes at or below $30,000. These are 2006 numbers.

If anything, this indicates that at least half of us will have at least a minor tax increase. Notice also that people making $30,000 or below (about half of us) paid only 11.7% of taxes. The upper half of the population is carrying the lower half's tax burden almost entirely.

Now, we have to understand that a good portion of the people whose incomes are above $30,000 are actually small business owners--sole proprietors, whose business incomes and losses are included in their personal totals--the very people who hire about half of all Americans. So this additional tax burden means that there will be less money available for paying employees.




This is the kind of thing that I really wish all elected federal officials had to know before they were allowed to run. It is true, there are corporate leeches that make amazingly high amounts of money and do little or nothing to earn it or to help sustain the economy. But taxation aimed at their lower echelons also strikes our job-makers, the small business people.

This blog is about Owner-Managed Business. And by the way, its content is licensed under a Creative Commons Noncommercial-Share Alike 2.0 license. If you find this content on one of those spam blogs (generally surrounded by dozens of ads and sometimes missing proper attribution), contact their ad service and hosting companies to report stolen content.

Anyway, this blog is about Owner-Managed Business. The coming administration is an unknown quantity, but if their campaign rhetoric is to be believed, we will have noticeable tax increases that will strike at least down to the $30,000 level. This will cause a number of marginal small businesses to fold, resulting in some fairly large job losses. In my estimation, we can expect these taxes to kick in for the 2010 tax year, meaning that just as things appear to be getting back on track, we'll start shedding tens of thousands or even hundreds of thousands of jobs every month.

It is time to make it clear to your circle of influence that removing the tax cuts will mean cuts, possibly including job cuts. Perhaps if enough of us tell our employees, suppliers, customers, families, and friends, they will get through to Congress and head this off at the pass.

Make sure people know that your business and others like it generate a big chunk of the jobs in your community. Sure, the big auto plant, the big retail store, or the railroad will have a much bigger workforce than any single small, locally-owned business (SLOB). But there are easily dozens or hundreds of businesses like yours right in your area. In aggregate, you probably out-size the big guys by two or three fold.

(Point that out the next time the big guys ask the city council to give them a tax break. This means that SLOBs like your business are paying double--first for your own account, and then for the big corporation (LOOAC) that gets an exemption from paying their fair share.)

Finally, I am not a psychic. I cannot predict the future. I can easily be wrong about everything I wrote. Standard disclaimers apply, including the one that tells you not to run your life according to the opinions of someone you've never met who has a site on the Internet. This is not the official opinion of WebConnect Consulting (a business we're in the process of forming), its affilliates, or of any other individual or organization. It is my opinion, but even there, it isn't "official".

Tags: taxes, economy, small business

I've read that you should never buy a house that costs more than three times your gross income. Beyond that, you are stretching things, and will probably have to cut back on maintenance and repairs or crimp your lifestyle in order to afford the payments. Given that, how much do you think the median home should cost?

If you said $90,000 to $100,000, you're right. According to Treasury department records, 48.7% of households made $30,000 or less in taxable income in 2006. Can you imagine that? With many homes still costing over $300,000, we've got a lo-o-o-ong way to go before prices hit their natural bottom.

If your business is real estate, you need to prepare for a much longer decline than we thought before. There are some things that your industry can and should do to enable you to remain in business and profitable during an extended price slide. Since I'm not in R.E. in any way, I do not know what the answer is, but you and your industry should be working on it. It may mean that you need to be part of the exodus of people and companies in that industry, leaving a smaller, but stronger industry in its place.

If you are, as I am, hoping to buy a home in the next few years (prices have been too high until now), just hang on. Get your financial affairs in order, so that you have a big part of the expected price available. It looks like credit will be tight for an extended period of time, so avoid that path if you can.

I am not one of those black people who sees racsim behind everything white people do. In fact, I generally argue strenuously against that perception. I believe that many of the things we perceive as racism are instead misunderstandings and lack of knowledge. But this is beyond the "he doesn't know what he's saying" level.

I have already written about Proposition 8, and why it was in fact necessary for our state's voters to pass it in order to restore confidence in our electoral system and to force same-sex marriage proponents to think about how such an institution benefits society as a whole (or fails to benefit society). I was recently reading Twitter, and from there I went to a blog that featured an MP4 / Quicktime video of Keith Olberman in which Mr Olberman equates voting for Prop 8 with racism!

The video is also on YouTube.

I find it very offensive that you, a white man, would equate gay marriage with racism. You have no idea how offensive that is to the descendants of slavery, of Jim Crow restrictions, of lynchings, and of unequal hiring and law enforcement practices that continue to this day! Many a black person wished he or she could "pass" as white, knowing that there was no way to hide his or her skin color, hair texture, or other physical characteristics. It wasn't possible to hide their pigmentation or other physical characteristics. It wasn't debatable about whether someone was born black or learned it. It wasn't something that they could prove over time was socially beneficial, as straight marriage has done and gay marriage still might do.

To equate the repudiating judicial fiat that overturned state law while creatively misinterpreting our state constitution with the ordeal that my race has endured over the past 400-plus years in this land is at the very least grossly ignorant and insensitive, and potentially highly racist. How dare you minimize the suffering of my people? How dare you, a white liberal, talk down to my people, who voted overwhelmingly in favor of Prop 8? Who do you think you are? George Wallace?

Do you understand what you are saying? How disrespectful and offensive that is to every black person who has ever lived on this continent? You owe me and every other black person an apology, and in particular, you owe the black population of California an apology.

Let's add a little detail to show just how demeaning it is for you to compare returning to "civil unions" with returning to Jim Crow. Under Jim Crow, there was no equality under the law. Under civil unions, every state benefit that applies to married couples also applies to those in civil unions. While you remind us that interracial marriage was forbidden, you neglect to mention that civil unions are comparable in every way to marriage under California law.They are relatively new, so there are some ramifications that will have to be worked out (e.g., hospital visitation, precedencein probate court), but there was no equivalent option available to interracial couples who faced those restrictions.

So you're telling me that withholding the name "marriage" from a couple is equal to being hung for looking at a white woman? That is so racially insensitive that it can only be intentionally so.

I was included in a forward list for an e-mail message that is on a black-oriented mailing list. In the message, the author made the assertion that racism is more than just "a feeling of superiority or inferiority or feelings of separation and hostility toward those whose ancestry differs from yours."

The reason for the resilience of Racism is mostly because most people don't have a working definition of the term. While the dictionary may define it as "the notion that one's own ethnic stock is superior," the functional definition digs deeper into the social and economic roots of the "notion" of racial superiority. Racism is the ability for one's race to impose its will on another race.

Wrong answer! The reason for the resilience of racism is that people in different ethnic groups do not take the time to get to know one another and discover that we are all alike. We all eat, drink, sleep, use the toilet, bathe/shower, and reproduce. We all dream of making things better for our descendants than they were for us. If anything, racism is about zero-sum thinking: if things improve for your group, it will only happen by making things worse for mine.

This person then went on to claim that only white people had the social power required to be racists. Blacks, Asians, and other groups who do similar things in similar situations get a free pass for their actions. I ran into this bizarre concept when I was in college, in a required course called 'Race and Racism'. The course was so full of anti-white hysteria that this black man skipped as many sessions as possible. Let me make it clear: if you mistreat someone else because of their ancestry or ethnic background, you are a racist! Do not trust someone who tells you that you cannot be a racist because you are not white--what's next, you cannot be a murderer because your victim was not black?

First, as activists like the late Kwame Ture (Stokely Carmichel) were quick to point out, Capitalism, needs Racism in order to survive. There has to be a permanent underclass and this underclass has been made up, primarily, of people of color.

This kind of thinking is so wrong that there isn't even a word to describe it. When there is an equal opportunity for a hard-working person to achieve a particular and desirable outcome, then we are all bettered as people work harder to accomplish that goal. It matters not whether some of those people are white, black, brown, yellow, red, orange, green, or purple. When things are unequal, members of some groups may work less hard because they perceive that they will not benefit as much as someone of a different group would benefit.

Macroeconomics, which is the study of the aggregate (all together) effects of the choices we make, clearly states that this is injurious not only to the victims, but to the economy as a whole. Microeconomics looks at it "zoomed in" to the level of individuals, families, and businesses. This is where we find sub-optimal choices being made on the basis of race or ancestry, a case where social and other non-economic factors affect an economic decision. In neither case is this strictly a capitalist activity.

Has China stopped discriminating against the Tibetans? Did the Russians in the USSR stop discriminating against their ethnic minorities? Clearly the answer is no, which is clear evidence that even non-capitalist systems employ ethnically-based policies to repress one group and benefit another. It isn't justifiable, and it harms their societies just like it harms ours, but it continues anyway.

It is true that there has been an underclass, including many families who have been there for generations. That underclass is not limited to blacks or other 'people of color'. (Haven't you ever heard the term 'trailer trash'?) In the recent past, blacks have been responsible for many of our own social ills. There is no white man putting guns into the hands of 13 year olds and telling them to kill people who are not part of their same gang. There is no white man getting your children hooked on drugs. It is the black music scene--rap / hip hop music especially--where this is coming from. The only way to stop it is for blacks to keep music away from their kids unless it comes from non-drug using musicians and contains anti-drug lyrics. And NEVER allow your kids to listen to songs with "nigga" (or similarly offensive terms) in them.

Do you really want to help end racism? Get together with people of every color and nationality. Make them a regular part of your life. Try to understand them as individuals, and not just as colors or nationalities. Let your children play with theirs, and if they choose, to marry theirs. When the inevitable disagreement comes, never let it descend into racial epithets. Make it clear that such terms are not acceptable.

race and racism

Gov't offers little help for stuck air passengers - Yahoo! News

A federal task force approved voluntary guidelines Wednesday for airlines and airports dealing with passengers stranded for hours on the tarmac but produced no fixed limit on how long they can be delayed before being allowed to leave planes.

Passengers who had hoped for stronger protections were left empty-handed by the guidelines.

"You have to admit that the game is still heavily weighted to business as usual," Kate Hanni, a passenger rights advocate, told her fellow task force members before voting against adoption of the report.

This task force was convened to protect airline passengers from inhumane conditions such as being held in an airplane at the airport for several hours without access to food, water, or "facilities" during a snow delay. The article is here: Appeals Court Rejects NY Passengers Rights Law

A federal appeals court's action in overturning New York's Airline Passenger Bill of Rights Law has put a lobbyist-encrusted Congress on the spot. The head of a leading passengers' rights group says Congress may be beleaguered passengers' best hope.

There were some pretty clear cases in the last couple of years where airlines treated their passengers like prisoners, rather than paying customers. If you recall, there are laws that require passengers to obey all aircrew instructions, but apparently no requirement for the crews to provide for the well-being of their passengers.

In my main employment, I fly a few times each year. I am fortunate, because when I fly, I generally stay in that location for a while. There are those for whom flying is like commuting. In any case, as one who flies for work, this potentially affects me.

This really is an example of government protecting the interests of LOOACs, rather than those of individuals. If there is one thing that we need to change in our government more than any other, it is the preference for big corporations--LOOACs--over individuals, families, and smaller businesses. This is distorting our economy, tearing our society apart, and could wind up producing the class warfare that Marx and his followers so anticipated. It does not have to come to that, but our leaders have to have the guts to curtail the power and influence that LOOACs wield.

The Air Transport Association, the trade association for the airline industry, said the task force achieved its objective and some of its recommendations are already being adopted by the industry.

"The success of the task force clearly demonstrates that not every problem requires a new law or regulation, especially when it comes to operational and customer-service issues," Elizabeth Merida, a spokeswoman for the association, said in a statement.

Not every problem requires a law or regulation, as long as the parties involved are free to come to their own agreement. When legal restrictions constrain passengers' actions, there must be matching restrictions on airlines to protect passengers from abuse. What the ATA statement really says is that these were formerly accidental occurrences, where there was no previous policy, but now ATA members will bake this behavior into their company policies, so that even sympathetic employees will not be able to respond to passengers' needs in such situations.

There were many ways the situation could have been handled, but clearly, this task force selected the worst alternative they were given.

airlines, passenger rights

The election was a momentous event. The first admittedly part-black president was elected last night. (I say admittedly, because some of the others may have some black ancestry. It was formerly common for someone who had a light enough complexion to move to another area and "pass" as white.) Now, he's got to be the president of all Americans: black, white, brown, red, yellow, and various mixtures thereof.

The first thing that a new President will need to do is to restore balance to our government. First, by balancing the budget without any parlor games or card tricks. (President Clinton's so-called balanced budgeting was mostly caused by camouflaged borrowing from the Social Security fund.) A real balanced budget has to balance without any help from Social Security taxes, since that money is borrowed (and must be repaid with interest out of future tax revenues like any other borrowings).

Political balance is necessary as well. I do not mean a balance between Republicans and Democrats, because those parties are huge collections of disparate interests who cooperate solely to remain in power. I am talking about balance that pulls from the vast central core of Americans, even if the extremists in groups like MOVEON.org and its conservative equivalents are left high and dry.

A key component of political balance is to act to restrain corporations' participation in the political process. Not just for-profit corporations (such as LOOACs) should be included--it absolutely must include unions, PACs, social benefit groups, churches, environmental advocacy groups, educational advocacy groups, and political pressure groups. What has subtly occurred over the past fifty to one hundred years is that for-profit corporations and not-for-profit corporations together have seized control of Congress and the regulatory apparatus in Washington DC, leaving individuals and smaller businesses pretty much powerless.

This means, of course, that our regulatory agencies will have to do their jobs or go away. The FCC has the authority to make "net neutrality" enforceable law today. They refuse to use it, bowing to the big cable and telephone companies whom it regulates. Sorry, but I want my Internet access to be "dumb pipes", where my cable or telephone company cannot interfere with my use up to the amount I'm paying for. And that includes both upstream and downstream use. (When I'm downloading a new version of Fedora Linux, I use bittorrent.) The FCC missed its best chance to spur growth in broadband Internet access when it decided to let the wire owners misuse their monopolistic positions to hinder the use of services, including those offered by competitors. Not that they have done a lot of it, but once you have a business model that says your customers cannot leave, you have no incentive to offer them anything better.

Instead of Congress and our regulatory agencies favoring large corporations (LOOACs), we need to have them favoring individuals and smaller businesses. Instead of turning a blind eye when LOOACs cast off domestic employees in favor of low-paid foreigners, we need to ensure that those workers who produce products and services for the American market are getting equivalent pay and benefits to American workers who produce like products and services. Believe me, there are more reasons than money for choosing to place a task in a particular location, but our larger competitors do not seem to realize this, which is why it is common to speak with a foreign call center when you call to do business with them.

Hopefully, we can make some progress on such issues as health care for all, and making sure that everyone's voice is considered. One of the most glaring issues with the current presidency is the way that the voices of everyday people were not considered in any decision. Whether it was the FCC, the SEC, or the Fed, it seems that every ruling was made to favor large corporations over individuals and smaller businesses. This is and was unsustainable, as the current financial meltdown demonstrates.

Balanced taxation. I have no illusion that President-elect Obama is going to have a workable tax system. We already know what is needed: Below a certain minimum, say $20,000 in income, there should be no income tax; from that initial $20,000 up to somewhere in the $100,000 to $250,000 range, there should be a single rate, say 20% of every additional dollar; above this, there should be a single rate of, say 30% of every additional dollar. In this, there should be no deductions at all. None. Credits? Only two: a credit for married couples and a credit for underage dependent children, with the proviso that the parent who pays gets the deduction, period.

According to a spreadsheet I downloaded from the Treasury site, the bottom 41.2% income-wise pay less than 10% of taxes. This leads to a perception that taxpayer-paid services have no cost. I agree that the person working at Gree-C Burger is already too underpaid for taxation, but even they need to know that everything we get from the government (federal, state, or local) was taken by force from someone else. There are some occasions where that is acceptable, such as building roads and building/operating schools. There are other occasions where that is not acceptable, and we can reduce the demand for such services by making sure that more of the cost falls upon those who stand to benefit from those particular government services.

Elimination of tax breaks and loopholes, however, should not only be on the individual side. We need to get this done on the corporate side. There are very large, very profitable corporations that are able to manipulate the tax code to greatly reduce their liabilities. It only makes sense for them to use the breaks that are available. If we want them to pay more, we have to remove the things that enable them to reduce their taxes, as well as give them a simplified, nearly-flat tax plan. Nothing else will achieve its goal. Mr. President-elect, this is the only way to make our tax system work again.

Finally, we need balance in our perceptions of race relations. There are some whites who believe everything is fine, while there are some blacks who seem to believe that we are as bad off now as we were before the civil rights movement of the 1950s/1960s/1970s. We are much better off than we were, but we are not all the way to the goal yet. Part of the reason we are not there, however, is the failure to embrace togetherness. We should work together, live together in the same neighborhoods, go to school together, attend church together, play together, and try to live basically colorblind lives. And, yes, we need to regard "blending" as nothing remarkable, nothing to get excited about.

NOTICE: As always, this represents only my own opinion, not that of my employer, this business, or any other person or entity. If you disagree, I encourage you to write about it on your own blog.

political agenda

LOOAC

Large, Out-Of Area Corporation -- Generally, a multinational or "top 1000" business, organized as a corporation, which uses its geographically-dispersed nature to dangle baubles in front of local government officials, and then uses that same nature in order to drain resources out of the community. Calling a company a LOOAC is not considered a positive thing.

corporation

Only marriage between a man and a woman is valid and recognized in California.

This is the entire text of Proposition 8. All that it does is reinstate Proposition 22 (from 2000). If you're reading and hearing that the proposition is about "discrimination", you're hearing lies and propaganda.

In order to understand what is going on here, you have to begin by asking yourself why the United States and nearly every other country around the world recognize marriage as one man and one woman, but comparatively few recognize other permutations such as multiple men and one woman, multiple women and one man, multiple women and multiple men, or two people of the same sex. Why is that? Is it because the entire planet is bigoted? Or is there more to it?

It does not take too much work to establish that governments recognize this because societies recognize this, and societies recognize this because it has proven to benefit society as a whole. It isn't because they are all moralists. It is because of the proven long-term benefits that this kind of marriage brings to society. The government does not care whether someone is happy, whether someone has a seal of approval. The government cares whether someone is making its job easier, and that's all.

Marriage is not about getting some kind of imprimatur, some "our love is approved" seal. Government and society don't give a hoot about someone's feelings of approval or disapproval, unless it benefits or harms them. Any Christian with a child in the school system learns quickly that your feelings do not matter to the government.

Again, marriage is really not, from a legal standpoint, about who or what you love. It is about the government binding the income-producing and family-guidance skills of men with the reproductive and nurturing skills found in women to produce a more stable society of the future. And, indeed, it is about the stability that women bring to men (single men tend to become involved in revolutionary movements more easily, because they have less to lose), which helps stabilize society. It is about having and raising children in a stable environment. And those things are all marriage (from a governmental, societal standpoint) is about.

Judicial Activism

In California, some judges made rulings that ignored the language of the state Constitution, federal law, and the federal Constitution. (Yes, I've read much of the state and all of the federal constitution.) They created this ruling out of whole cloth, because they wanted a specific result. That is judicial activism, and that is wrong. This isn't like the 1950s/1960s/1970s rulings regarding race, which enforced amendments to the federal Constitution that were around 100 years old. This is something they made up out of thin air.

Because of this, people around the country (I just spent six months out of state) are saying that voting does not matter because judges will do what they want anyway. In other words, misinterpreting the state Constitution in order to invalidate Proposition 22 (passed by 61% of California voters in 2000) is telling people that their votes mean nothing. It is telling people that only the will of the judge counts. Voting for Prop 8 ensures that people do not continue to lose confidence in the electoral system. Voting against it (or not voting at all) will continue the trend of decisions being made by a smaller and smaller group of people.

Change Where It Matters

I agree that there are a heck of a lot of things where we need to say any committed couple can do X, rather than any married couple can do X. Let us stop looking for the state seal of approval and start looking for areas where we can change things for the better for all of society. For example, if partner a is ill, partner b's access to him/her should not be subject to the whims of partner a's bio-family. I think we can all unite around opposing these obstacles and work together to overcome them.

What we do not need is charging people with bigotry and discrimination because they do not agree that judges should change the meaning of our federal and state constitutions when it suits them. Proposition 8 is not about religion, or religious beliefs, although failure to pass it will subject schoolchildren to increased indoctrination in an attempt to suppress any such beliefs. Advocating the passage of this proposition is not the same as advocating bigotry or discrimination. Many of us that support the proposition have gay relatives whom we love--we accept "Aunt Jack" into the family--but we do not support redefining marriage to be something that society has not yet agreed is beneficial.

If we can show that allowing it benefits society as a whole, there is no doubt that society (government) will expand the scope of marriage, without some judge waving his magic wand and rewriting the constitution. It should not be about feeling disapproved. And it won't take millions of dollars in out of state financing to make the change, either.

It is to our shame that we even have to discuss this. Some things should just happen, because they make sense. There is no reason why partner b should not be able to visit partner a in a hospital or convalescent care facility. If partner a passes away, why shouldn't partner b be first in line to receive any inheritance and to make any decisions about burial or cremation? How does this not benefit society, or violate anyone's religious principles? As for medical insurance coverage, there must be a way to work out coverage without putting the cost onto those who may disagree with the lifestyle. We know we have to expand medical coverage anyway, so why not add this to the dialog?

Failing to pass Proposition 8 will not even accomplish the full goals of those who feel society's disapproval and wish to banish that feeling. http://en.wikipedia.org/wiki/Same-sex_marriage_in_Massachusetts mentions that there are over 1,000 "benefits" that are still not available because federal law forbids it. This includes the IRS marriage exemption.

Conclusion

Prop. 8 is not about discrimination. It is about respect for law and society's traditions. It is about overturning judicial fiat and making social change contingent upon showing societal benefit. In that phrase right there is the seed that can accomplish the goal the judges tried to reach, without making our electoral system less relevant than ever.

I urge you to cast your vote in support of Proposition 8, but to follow up by helping to demolish unfair and unnecessary restrictions on the ability of unmarried couples to care for one another, yet without forcing people with sincerely-held religious beliefs to violate those principles.

Prop 8, Proposition 8

Delayed Gratification Pays Off

Timing Is Everything

A large majority of small, locally-owned businesses (SLOBs) are sole proprietorships. This means that, in the legal sense, one's personal and business affairs are connected. Hopefully, most of us maintain an artificial division in our heads, as well as in our financial accounts, and enforce that division in most areas of the business.

In your personal affairs, it is very easy to overspend, especially if your credit is good. A credit card is a way of pledging your future income in order to enjoy something today. The whole purpose is, from the banks' standpoint, to latch onto your financial life and continually drain it, much as a lamprey does to the fish that it feeds upon. The best thing you can do for yourself and your family on the personal side of the financial fence, is to dramatically restrict your use of debt--credit cards--and instead save up for things and pay in full at the time of purchase. Teach your children to use delayed gratification, as well. Do not buy them all the latest and greatest toys--make them work for them, and give them some responsibilities that have to be taken care of before they can buy the newest MP3 player or Wii/XBox360/PS3 game. Open a savings account for them--possibly with a stockbroker--where they have to contribute a certain amount each month to help accumulate funds toward their college or vocation training. Obviously, you'll have to contribute as well, but make sure your contributions (as they get older) are only on a "match" basis.

Now, doing this has a few advantages. First of all, the waiting time while you accumulate the funds for a specific purchase can help you weed out the fads. There are some items that you buy just because everyone else is getting it, which you will look back upon with shame--akin to finding "I Am Woman" or "Afternoon Delight" in your music collection--those are fad items. Waiting until you have the funds saved up to purchase these items will often delay you long enough that you can escape the shame of having bought that item.

It will help your children, because they also will learn to save up and to focus their efforts on the most important or most valuable of goals, rather than on everything that is advertised on cable television. Once they start attending college or vocational training, the realization that they've spent their whole lives saving up for it will help them skip the whole "frat boy" thing and concentrate on getting some benefit out of their efforts.

This will help your family in other ways, as well. Right now, most Americans are led around by the popular media. Their beliefs are framed by what the media choose to show them and the points of view expressed by popular entertainers and commentators. We are shielded from direct and uninterpreted access to the words and deeds of our political leaders. It is only a short advance from getting out of step with consumerism to learning to think for oneself and seek out raw data from which one can draw his / her own conclusions.

This benefits your business because it means that you are not siphoning off needed capital to pay for every kind of present pleasure. Instead, by saving up, you have funds that you can re-allocate for business purposes if the need arises.

Timing Is Everything?Business Application

This also applies on the business side of the fence. When you are faced with a "gotta have, right now" item, if you can avoid being stampeded into buying it now, especially if buying it involves drawing down credit facilities, you can determine whether you really need it, and you can also determine whether there is another way to meet that need more cheaply.

As a tech guy, I'm always feeling that I "gotta have" some new technology item, likely computer hardware or software. Besides the lack of an unlimited money budget, I also have limits on my time, energy, and attention. When someone announces a new server product, I have to consider whether I can pony up the cash to try it out in the first place, but that is only part of it. I also have to spend the time to learn it well enough to try to fit it into our offerings. This, it seems, is generally the tighter limit. I've gained a little weight, so I can afford to skip a few meals in order to pay for a better server. What I cannot do is magically generate more time.

Indeed, this applies even more stringently in the case of free software (free as in freedom, not free as in "free beer"). I'm learning to use Alfresco and Daisy, but I have been gone and have not touched either one in half a year. (On the other hand, my experiences with SharePoint tell me that federal agencies should be using Alfresco instead of SharePoint.)

Now, imagine this. You read about a new computer with the most memory, the fastest multi-core CPU, the fastest video frame rate, and largest solid state drive, and it only costs two months' pay. It might help you work a little faster, you say, and you might be right. But is it really worth replacing your current computer that is under two years old? Probably not. And forcing yourself to save up before you buy it could mean that you keep your existing system for another year or so, until it is justifiable to replace it.

Another thing that this breeds is creativity. It isn't the built-in toys that make you creative, it is the tools' ability to get out of your way and let you express yourself. This is true whether your tools are based on computers, on cameras, on video, or on audio. Sometimes, all you need is a simpler tool, something that makes you work at generating the special effects, because you may discover some effect that works for you that you would never have tried on equipment with all the toys built in.

This is even more important if you're in startup mode. "I gotta buy X", where X is some top-of-the-line product, is likely to sink your company. Get the simplest and least expensive product that enables you to do what you need, even if it takes a little bit more work to do so. For one thing, you will have a better understanding of what it really takes to do any particular task, which is not only an advantage when you have not yet purchased X, but is even more of an advantage once you have purchased X and found that its implementation of a particular function is flawed.

business finance, business management