Thursday, December 23, 2010

Dangerously "Courting Disaster" For the US By the Supremes (Want To See A Surprisingly Relevant Movie?)

Sophia, impatiently awaiting Santa Claus, displays the Christmas card she painted all by herself. _ _ _ _ _ _ _ _ _ _ Russ Baker says we are Supremely Courting Disaster. He's always right.

December 23, 2010 Only infrequently does the New York Times really go for the jugular and spell out for us the extent to which the system is rigged against ordinary people and their interests. One such rare example is a recent article by the Times’ thoughtful legal writer, Adam Liptak, based on new academic research out of Chicago.

Under the headline

Justices Offer Receptive Ear to Business Interests

Liptak reports that:

Almost 40 years ago, a Virginia lawyer named Lewis F. Powell Jr. warned that the nation’s free enterprise system was under attack. He urged the U.S. Chamber of Commerce to assemble “a highly competent staff of lawyers” and retain outside counsel “of national standing and reputation” to appear before the Supreme Court and advance the interests of American business.

“Under our constitutional system, especially with an activist-minded Supreme Court,” he wrote, “the judiciary may be the most important instrument for social, economic and political change.”

Mr. Powell, who joined the Supreme Court a year later in 1972 and died in 1998, got his wish - and never more so than with the court led by Chief Justice John G. Roberts Jr.

The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber’s side. One of them was Citizens United, in which the chamber successfully urged the court to guarantee what it called “free corporate speech” by lifting restrictions on campaign spending . . . .

In other words, an ideologue favoring corporate America got himself appointed to the highest court in the land, and his legacy is that the court has become so pro-business that it is willing to turn over not just the judiciary, but all branches of government, to those with the most money.

If we don’t do a better job of getting the people to focus on this tragic and deeply corrupt march toward a corporatist America — and soon — we may as well start practicing our Mussolini salutes.

And now for something completely different: a movie we all can take some ironic delight in (and perhaps, finally, our marching orders). (And, no, it's not "Waiting for (the nonexistent) 'Superman.' ") This should be one of the best ones out there this holiday time along with Fair Game and Inside Job, which were released previously (unless you are avidly awaiting another movie about a fighter, networking or something touristy). Take a moment away from the bustle of holidaying and enjoy yourself. (And on a slightly different holiday note, didn't you enjoy hearing on the "news" the other night that your ever-increasing tax load will soon be paying for the huge charitable donations of your betters? Good for you! Funny how those betters look just like fairly mediocre people with a decided clever streak. Hope they'll make better decisions than you would with what they do with your money.) (Emphasis marks added - Ed.)

A Lesson for Wall St. About Failure December 19, 2010 It’s awards season again, and critics and the academy members are deciding on their top film picks of the year. But in many corners of the business community, the issue is already settled: “Waiting for ‘Superman’ ” is the year’s must-see film.

On Wall Street and on Silicon Valley office campuses, in hedge fund boardrooms and at year-end Christmas parties, it seems you can’t have a conversation without someone talking about the movie that finally lays bare America’s public education crisis.“Waiting for ‘Superman’ ” is one thing that Bill Gates, Steve Jobs and Mark Zuckerberg agree on, Rupert Murdoch talks about to anyone who will listen, David Koch of Koch Industries promotes, and Paul Tudor Jones and many of his hedge fund brethren work to support. “Waiting for ‘Superman’ ” follows five children and their parents as they run a gantlet to gain access to high-performing charter schools because the alternative — the public system — is a complete disaster. The film has caught the imagination of the business community because it represents a reckoning for public education and its chronic failures, making the very businesslike case that large school systems and the unions that go with them must be replaced by a customized, semi-privatized education in the form of charter schools.

Which is odd when you think about it. If you are looking for an American institution that failed the public, made resources disappear without returning value and lacked accountability for its manifest sins, the Education Department would be in line well behind Wall Street.

By now, the notion that business is a place built on accountability and performance should be as outdated as the one-room schoolhouse. Ask yourself, what would happen if American public schools were offered hundreds of billions in bailout money? One outcome is not in the cards: its leaders would not end up back at the trough so quickly, sucking up tens of millions in bonuses as Wall Street has.

If the captains of American business are looking for a holiday movie, I have another suggestion for them. I’m not talking about “Inside Job,” which is a scabrous take on the well-documented story of how the American economy was nearly tipped over by business greed and incompetence. Nah, I’d buy them a bucket of popcorn and sit them in front of “The Company Men,” a moody and elegiac feature film starring Ben Affleck, Tommy Lee Jones and Chris Cooper as businessmen who have a moment of clarity about how American business lost its soul.

As executives at GTX, a fictitious multinational corporation involved in the transportation business, among other endeavors, they watch as many of their colleagues are laid off to meet inflated earnings targets and as numbers get ginned up to keep the stock price growing and potential acquirers at bay. And then their turn comes.

At that point, “The Company Men” becomes a film about the loss of privilege: Porsches are sold and driven away, access to the private golf club is denied and suburban mansions go on the market. But the movie delivers, over and over, a message that far from being a center of American know-how and ingenuity, much of modern business is now preoccupied with goosing the share price and tricking up the year-end bonus — about getting over by getting by.

The film manages to use the tableau of a bunch of rich guys losing their jobs to reach a fundamental question of this economic age. How can it be that both corporate profits and unemployment are simultaneously high? “When I made the film, I had hoped it would be a historical document, a portrait of a very bad moment in American economic history,” said John Wells, an executive producer of the television series “ER” and the director of “The Company Men,” who began working on the film in 2007.

“Unfortunately, it didn’t turn out that way.”

“The Company Men” reflects that America is no longer in the business of building and making actual physical objects. Instead, all the energy and resources go into the kind of financial engineering that creates quarterly numbers that Wall Street buys into. Mr. Wells said that he spent a great deal of time talking with chief executives who run large concerns like his movie’s fictional GTX and said only so much of the blame can be laid at the corner office.

“They are responding to the needs of the market, to the institutional investors — the large mutual funds , the money market funds,” he said. “And when you think about it, that implicates all of us because we are all investing in the market one way or another.”

The movie resonates in the current moment because each day it becomes more clear that the guy at the bar who mutters into his whisky glass about the game being rigged is probably right.

On Dec. 12, my colleague Louise Story chronicled how nine men from various banks meet in secret every month to oversee, and in some aspects control, trading in derivatives, the arcane and often lucrative financial instruments that are used to hedge risk. As her article makes clear, the opacity and secrecy of the systems give banks the upper hand and leaves at their whim the market’s less pedigreed players.

It is a small slice of a large problem of self-dealing and self-enrichment on Wall Street, often at the expense of the rest of us. Decisions made there land hard in the middle places where most of America lives and works.

“You know that show ‘Undercover Boss?’ ” Mr. Wells asked, referring to the hit television show on CBS. “I’d like to see a show called ‘Undercover Investor’ where investors go undercover and get a good look at the companies that are being decimated by restructuring plays and roll-ups.”He added: “I think so many people are seeing business and how it is conducted in the abstract that they have no idea about how these decisions play out.”

And what the heck has happened to "net neutrality?"

I think I'm smelling that Michael Powell ratty essence again.

Suzan __________________


Beach Bum aka Captain Barbossa said...

Yo have read my last post, the only reason I even begin to play this Christmas gig is for my daughter who looks about the same age as Sophia.

Suzan said...

Thanks for commenting, B.

I had no idea that my breakfast partner, who is five, was your little girl's age.

They grow up quickly, don't they?

And how to protect them?

Love to all,