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But, first, lookee what Jimmy Carter finally said on one of his overseas missions!
Now, isn’t that curious? As at the same time Carter is saying that about our democracy and the importance of whistle-blowing, our current US president, Barack Obama, who is, by-the-way, a civil liberties attorney, is on the record repeatedly expressing an opposing sentiment about US democracy, and the NSA’s Snowden Affair — here and here, for instance.
The US is often accused of nation-building and exporting democracy, yet how can that be if we have no real democracy to export? Holding this in mind, one must then ask: what is it that we are actually exporting, and what kind of governance do we really have stateside?
As Nick Turse wrote last year about America’s nation-building, which is yet another huge elephant-in-the-room, is this question of our own rebuilding. Of this said Turse, in the “final days of the presidential campaign, President Obama repeatedly assured Americans that it was time to reap a peace dividend as America’s wars wind down. Nation-building here at home should, he insisted, be put on the agenda.”
Turse quoted Obama in the article, entitled “America’s nation-building hypocrisy,” as saying: “What we can now do is free up some resources, to, for example, put Americans back to work, especially our veterans, rebuilding our roads, our bridges.”
Constitutional lawyer and the author of 20 books, John Whitehead, told me in a recent phone conversation that “representative governance” is almost a thing of the past, and that in truth Americans now live in an “age of authoritarianism.”
That seems an accurate summation, and from my observations what’s clear is that some kind of “New American Confederacy” has definitely taken hold, and threatens to become permanently rooted unless it is fully acknowledged, and neutered.
It’s a tall order, indeed, and more pie-in-the-sky promises from President Obama won’t make it real, nor will wishful thinking, killing the messenger, or any other actions resembling buried heads in the sand.
Well, someone had to say it out loud. Or loud enough to have it picked up (by
Glenn Greenwald and
Wikileaks) in tweets and then published in the USA! USA! USA!
And my guess is since Jimmeh (don't you just love the "murrican" way of personalizing their much-desired-to-know-intimately buddy-buddy figureheads?) was dissed so vehemently by the "owners" over his truthful assessment of what Israel was doing to the Palestinians that he really doesn't care at this point who minds.
_ _ _ _ _ _ _
And speaking of low-life gossip. Or gossip about low lifes . . .
These are not smart people.
Clever, yes. Manipulative, undoubtedly.
But the results of that clever manipulation have run the world off the track, over the cliff, and into the Grand Canyon of poverty's despair.
And flushed life down the toilet for the 99.99%.
Stop them.
Now.
Washington insiders are spreading an alarming news alert. Barack Obama, I am told, is on the brink of making a terrible mistake by appointing Lawrence Summers as the new chairman of the Federal Reserve. That sounds improbable, since Summers is a toxic retread from the old boys’ network and a nettlesome egotist who offended just about everyone during his previous tours in government. More to the point, Summers was a central player in the grave governing errors that led to the financial collapse and a ruined economy.
Surely not, I thought, when I heard the gossip. But my source heard it from the White House. Obama’s senior economic advisers—still dominated by Clintonistas and aging acolytes of Robert Rubin—are pushing the president to choose Summers as the successor to Ben Bernanke, whose term ends in January. And they are urging Obama to make the announcement right now, before the opposition can get organized.
To thwart this ploy, Democratic senators and rank-and-file constituents need to sound the alarm promptly and promise, loud and clear, to vote against Summers if Obama once again accepts the choice of the Clinton-Rubin crowd. The former Harvard president was himself a Wall Street player between his government positions. He was a soft-on-banks adviser to Obama during the president’s first term. Choosing Summers now would be another great gift to the mega-banks. But it would be a very tough vote for Democrats who claim the mantle of reform.
There are many reasons to oppose Summers as Fed chair, but the strongest objection is that Obama would be rewarding the same guys who got things disastrously wrong for the country — the Clinton-Rubin policy makers who danced to Wall Street’s tune of financial deregulation and collaborated with the Greenspan Fed and Wall Street to gut prudential regulation like the Glass-Steagall Act. Those actions set the stage for the crisis that devastated middle-class home owners and working people generally.
Summers was an over-confident cheerleader posing as superior intellect. People called him “the smartest man in the room,” and Summers definitely believed it. As Treasury secretary during Bill Clinton’s second term, Summers personally did the knife work that cut up Brooksley Born, the brave regulator earnestly trying to impose meaningful limits on the explosive derivatives market. He still owes Born — and the country — an apology.
Summers got bounced as president of Harvard for his derogatory remarks about women as scientists. He dissed black professors as inadequate scholars. Personality defects aside, the Democratic party has a huge stake in this decision — whether the money-friendly “New Democrats” who have controlled the party since Bill Clinton will continue to dominate the party’s agenda and smother any attempts to embrace true reform.
When Summers came back to Washington in 2009 as Obama’s chief economic adviser, he pushed aside rival views and once again underestimated the nature of the crisis or how to deal with it. When other Democrats called for much stronger stimulus measures, Summers was a voice for doing less, and he accepted disappointing results as the best that government could do. Obama, alas, adhered to that advice.
Summers has been trying to rewrite his reputation as he campaigns openly this year for the Federal Reserve appointment. The Washington Post offered him a prime pulpit for a series of op-ed columns in which he makes himself sound like a bleeding-heart liberal. Don’t be misled. If opponents dig into his old speeches and over-confident pronouncements, they will find rich material to make the case for rejecting him. The question is not about left or right policy decisions. The question is incompetence.
. . . Next year is the 100th anniversary of the central bank. The stolid masculinity of this cloistered institution has failed the country spectacularly and needs to be pried open for public policy debates. The most chilling failure was that its conservative leaders — Alan Greenspan and Ben Bernanke — did not see the crisis that was coming . . .
That institution’s reputation has been gravely diminished by the bank bailouts and other adverse events. The public was shocked and remains deeply skeptical. People don’t trust the Federal Reserve, and for good reason. What people could see with their own eyes was that the Fed expended trillions to rescue the mega-banks from the troubled waters while people were left to drown. The illegitimate banker-government relationship has exposed an urgent need for fundamental reforms.
I liked Bill Greider for a long time especially after he wrote his inflammatory exposé on the Fed and seemed to speak for the left-out citizens who were ignorant of how everything was set up to take advantage of, well, the ignorant (back before
the people were only thought of as a percentage) but unfortunately (for all the apologists) . . . I'm with
Rudy (and
unclepo) here.
My objection to this article is that it is based on the idea that our current Depression is a financial mistake, not a well-planned crime. Anyone could get America working again, I won't even bother with the details since they've been aired constantly for the last few years. But our poverty and desperation are necessary for the 1%ers to buy up our assets cheaply. Don't forget this basic fact: All Americans are NOT getting poorer, only the 99%. And our money didn't disappear, it went to the 1%ers. This is a crime-in-progress and Obama has no intention of stopping it.
It probably means that Goldman Sachs' and J.P. Morgan's bets are going bad and they need a genuine pr*ck in there for deposit confiscation or some such bailout scheme. Think I'm kidding? Watch and see. The word ruthless in an understatement when it comes to these guys.
No one can save us from technocrats who think they are in charge, and think they know how to run things. In this age of multiple systemic crises, elite actions consist of making sure the deck chairs are comfortable for the first class passengers, whilst throwing the none-payers and protesters in the brig or overboard as excess baggage, or using them up war sacrifice to the latest manufactured threat or capitalist takeover.
Larry Summers won't have any other ideas. Group think and human social behaviour often produces group representatives, who take on the most belligerent manifestation of the groups special interests, against everything else. Larry Summers is thus the most distilled version of his ruling social group, and therefore top representative candidate for the < 1% .
The ship of global civilization is taking on water, its life support systems are fouling up, especially the climate control, support services are breaking down, and the humans powering it are running out of fuel and ideas, as they frantically try to stop panic by denial and displacement activity.
Any ideas the elites implement will most likely be the wrong thing to do, or ineffectual at best, in this total systems disaster. Many actions will be specifically designed knowing they will waste other human beings.
Nature is given no system value at all, since she is rapidly being sacrificed to power and feed the ship. The process ends when the ship sinks, and most of its dependants drown.
See Donna Meadows "Systems Thinking", or Barbara Tuchman "The March of Folly". The history of previous civilizations surely guarantees this global one ends in ruin. ( A Short History of Progress - Ronald Wright). That requires total political creatures like Mr Summers to overseer it, for exclusive benefits for his social group. This is Group Totalitarianism end times. The people the GT dictators fear most (are) us, hence the NSA.
Amen (er . . . -women).
Read it all
here
And then read about America's New Confederacy here (don't choke - just fetch another cooling beverage for the next bit of excitement).
"You have to hand it to Barack Obama when it comes to having it both ways" writes the publisher of Harpers Magazine, John MacArthur, in a recent article, entitled "Obama's Real Political Program." For "[n]ever has a leading American Democrat" done so little, MacArthur says, "in support of less-privileged people while getting so much undeserved credit for 'trying' to help them."
Truly, what a strange and bitter pill to swallow.
An article I wrote 2 years ago, titled "Obama's Right Wing Success: Silencing Black America and the Left," then quoted a young, progressive veteran named Evan Knappenberger, who wrote poignantly about this painfully odd dilemma in an editorial, entitled "Obama's Betrayal of Generation Hope."
It's worth mentioning again here, because it is so heartfelt and lays bare what Knappenberger sees as Obama's cruel hypocrisy:
Most disappointing of all to the youth, though, is Obama's betrayal of their values. Particularly, his extensions of Bush policies and war-mongering.
Obama's "dumb war" theory (i.e. that some wars are just and some are just "dumb") is, to us, a complete abomination of the concept of peace. By evoking the Reverend Doctor King in his Nobel acceptance speech while in the same breath dismissing nonviolence, Obama has bastardized the concept of peace and alienated us, antiwar youth permanently from his politics."
Knappenberger is not the only one who feels Obama insults Dr. King's legacy. A professor of African-American studies at Temple University in Philadelphia, Anthony Monteiro says that Dr. King lived his life on a quest for peace, in a fight against racism and the overcoming of deepening poverty in our society.
Montiero made these remarks this January in a podcast at the Real News Network. Adding that toward the end of his life, Dr. King became more radicalized in his quest - not defining the struggle as between blacks and white, but against imperialism - Montiero says that Obama has not lived his life this way. In fact, "Obama's presidency has nothing to do with the legacy of King; it's actually the opposite," Montiero says. A widely-held and useful definition for confederacy is: A group of people who have united for unlawful practices; a conspiracy. Though, like the word terrorist, which the US government assigns liberally to foreigners - especially those of color who dare stand in the way of power - the words confederacy and conspiracy are not terms the US chooses to use in describing itself.
Albeit, based purely on the simplicity of their definitions, these two words are fitting, however, and match perfectly with so much of what is known, documented and experienced stateside and abroad, in consequence of America's foreign and domestic policies during the Bush/Obama years.
Americans have been told that Bush and Obama are fierce defenders of democracy. We have also been told by these men that they are champions of justice - that their vision of our society is one that is absolutely merit-based. Track records of both Obama and Bush indicate, however, that neither qualify as purveyors of truth or justice.
Look no further than the ongoing conflict in Iraq. Bush and the Republicans get the blame, and yet Obama and the Democrats continue the imperialist Iraq policies. And let us not forget that it was the Democrats who were in control of Congress at the time of the Afghanistan invasion and gave their near-unanimous endorsement.
Democrats made Bush's illegal Iraq War possible, and, now including Obama, they should share the blame.
On March 22, commenting on the net effect of the Iraq war and occupation, Ralph Nader wrote in an article titled "The Sociocide of Iraq by Bush/Cheney," that more than "a million Iraqis died due to the invasion, the occupation and the denial of health and safety necessities for infants, children and adults'' and "more Iraqis were injured and sickened," and Nader says that in addition to the nearly 5,000 US troops that have died, many others have committed suicide, with over 150,000 Americans being injured or sickened.
This is, Nader says, "far more than the official Pentagon underestimate which restricts nonfatal casualty counts only to those incurred directly in the line of fire."
Nader goes on to say that "the Iraq War has monetarily cost taxpayers about $2 trillion . . . paying over $600 million a year to guard the giant US Embassy and its personnel in Baghdad, more than what our government spends for OSHA, whose task is to reduce the number of American workers who die every year from workplace disease and trauma, currently about 58,000."
On too many fronts, Bush and Obama's policies are too much the same: Guantanamo, criminalizing whistleblowing, an obsession with domestic surveillance, the ongoing Middle East wars and occupations and the still unresolved and epic foreclosure crisis, et al. And, on the issue of government secrecy, the attorney for Daniel Ellsberg - who leaked the Pentagon Papers that led to Watergate - says Obama is actually worse than President Nixon.
It's especially chilling when we find Bush's former right-hand man, Dick Cheney, giving his stamp of approval to the "liberal, socialist" Obama's secret drone wars. In a March 14 article, titled "Obama's I'm-No-Dick-Cheney Standard for Government Secrecy," Kevin Gosztola writes:
Incidentally, Cheney has praised Obama's use of drones. "I think it's a good program, and I don't disagree with the basic policy that the Obama administration is pursuing," he said in an interview on CBS' "This Morning" in February. He also "endorsed the drone strike against Anwar al-Awlaki, an American citizen living in Yemen, saying, 'He was clearly part of al-Qaeda.'
Cheney also said in a January 2011 interview on NBC, "In terms of a lot of the terrorism policies - the early talk, for example, about prosecuting people in the CIA who've been carrying out our policies - all of that's fallen by the wayside. I think he's [Obama] learned that what we did was far more appropriate than he ever gave us credit for while he was a candidate."
The policies of Bush and Obama have mostly been bad for the vast majority of Americans, and the bottom line is this: Black don't make right, and neither does white, nor does half-black half-white or any combination of ethnic mixing conceivable. Furthermore, if a Republican does something that is wrong, it doesn't make it right when a Democrat does it.
Holding this in mind, whoever truly remains of those committed to justice, must fess up - seeing not just the Bush junta, but also the Obama confab for what it is, and they are together: a destructive political pact whose foundational method is an opaque, elitist shell game, and its players members of a depraved and greedy, conspiring confederacy; rationalizing and justifying their immoral and often illegal actions with the a most flagrant misuse of language - whether eloquent, as is the case with Obama, or with twisted tongue à la Bush.
In either case, the result is a wholesale abuse of the people's good will.
We rest our case.
_ _ _ _ _ _ _
But . . . to consider another case . . . (and what a case of crap that was) . . .
I've always enjoyed in a perverse way articles about the Russian-born and -educated
Ayn Rand (née Alisa Rosenbaum), the incredibly bad "writer" of turgid (totally unreadable - don't let anyone lie to you about this BS) prose glorifying the assinity of the greedyist egomaniac in the room, the Jewish atheist cherished by the Protestant fundamentalist know-nothings (not a reader in the bunch), and, of course, the heartthrob of a young Alan Greenspan.
Nothing to turn them off there!
Thursday, Jul 18, 2013How the me-first corporate structure installed by hedge fund manager Eddie Lampert helped ruin the retail giant
By Lynn Stuart Parramore
This article originally appeared on AlterNet.
Eddie Lampert, the legendary hedge fund manager, was once hailed as the “Steve Jobs of the investment world” and the second coming of Warren Buffett. These days, he claims the number 2 spot on Forbes’ list of America’s worst CEOs. He has destroyed Sears, the iconic retail giant founded in 1886, which used to be known as the place “Where America Shops.”
America now avoids Sears at all costs, thanks largely to Mr. Lampert and his love of twisted economic logic.
A bit of background: Lampert cut his teeth on Wall Street at the risk-arbitrage desk of Goldman Sachs under Robert Rubin, who later became U.S. Treasury Secretary and now serves as vice chairman at Citigroup. In 1988, Lampert founded ESL Investments and joined the billionaire’s club at age 41.
He rose to fame in the early 2000s for seizing control of Kmart during bankruptcy and then using it to take over Sears. Along the way he was kidnapped and deposited on a motel toilet in handcuffs for nearly 40 hours, and lived to tell the tale. Lampert is known for his touchiness and odd habits, such as conducting meetings from a bare bones room to Sears executives forced to tune in by videoconference. He hates flying.
You might say that Lampert is the distillation of the fervent market worship and wrong-headed economic approaches that came to dominate the U.S. in the 1980s and have yet to run their fatal course.
He adores Ayn Rand, and is reported to have given out copies of Atlas Shrugged during an ESL annual dinner. Lampert is also a fan of Friedrich von Hayek, the Austrian economist beloved by conservatives and libertarians.
As a Robert Rubin protégé, he absorbed the lessons of a man whose discredited economic focus on budget deficits ended up starving the country’s infrastructure, education and alternative energy.
Looking at what Lampert has done to Sears, we can see what happens when the lessons of his mentors are actually applied in the real world. It isn’t pretty.
1. Myth: Bigger is better
William Lazonick, an expert on the American business corporation, has written about the rise of the conglomerate movement of the 1960s. At the time, shareholders were clamoring for rapid growth, so they pushed for big mergers and acquisitions. Once-successful firms were pressured to move away from their core businesses, often to terrible effects. In an email to me, Lazonick noted that “the ideology was that a good manager could manage anything, and that all the central office needed was performance statistics so that it could ‘manage by the numbers’.” This foolishness “imploded,” as Lazonick put it, in the 1970s.
Evidently Lampert didn’t get the memo. In the 1980s, as deregulation got the casino games rolling on Wall Street, mergers and acquisition fever once again took hold. This time around, mergers more often involved acquisitions in the same industry, like Bristol Meyers’ acquisition of Squibb. Two new terms entered the American vocabulary, the “hostile takeover” and the “corporate raider.” Oliver Stone made a movie about this episode called Wall Street.
Some refer to Lampert as a corporate raider. He prefers the term “active investor.” It must be admitted that Lampert wasn’t only interested in stripping the assets of his retail giant to make a fortune off it right away.
He thought he could increase profits, too. After making a nice wad of cash from Kmart by selling off the valuable real estate sitting under dozens of stores, shutting down 600 stores and laying off tens of thousands of workers in the name of cost-cutting and thereby jacking up the stock price, he got bigger ideas. He would use Kmart to take over another ginormous retailer, Sears.
What background did Lampert have in retail? None at all. But never mind that. He was a Wall Street genius, and he would make this thing work by harnessing the power of data and numbers and letting the invisible hand of the market guide his Franken-company to glory. He even hired Paul DePodesta, the statistician of “Moneyball” fame, to advise him. When Kmart acquired Sears, the new company, Sears Holdings, became one of the largest retailers in the U.S., and Lampert became its CEO.
He took on the Herculean task of integrating two vastly complex companies. And he brought on a guy that knew all about restaurants and nothing about retail to help him, Aylwin Lewis, former president of YUM! Brands.
Reactions ranged from surprise to predictions of doom. Mark Tatge at Forbes called him “Crazy Eddie” and decided that he must be planning to liquidate the whole shebang, perhaps slowly, by dumping stores (Sears owns a ton of valuable real estate) and using the money to do stock buybacks (more on that later) that would further enrich him.
It turns out that contrary to Lampert’s notion, you actually do need to know something about a business in order to manage it well. There’s really no substitute for industry-specific experience. And bigger is not always better — a gigantic corporation can be too unwieldy and complex to thrive, especially when your management philosophy is derived from a writer of bad novels.
Sears and Kmart are now on well on their way to becoming vaporized as brands.
2. Myth: Self-interest is the greatest virtue
The neoclassical economic paradigm is built upon the idea a human being is little more than a globule of self-interest. It teaches that the market economy is populated by rational individuals whose selfishness is constrained only by expediency. Ayn Rand was an enthusiastic proponent of this idea in extreme form, and her celebration of it can be found in The Virtue of Selfishness: A New Concept of Egoism, published in 1964, which explains, among other things, the destructiveness of altruism and the virtue of acting solely in your own self-interest.
At Sears, Lampert set out to create the Ayn Rand model of a giant firm. The company got a radical restructuring. It was something that had been tried at giant industrial conglomerates like GE, but never with a retailer.
First, Lampert broke the company into over 30 individual units, each with its own management, and each measured separately for profit and loss. Acting in their individual self-interest, they would be forced to compete with each other and thereby generate higher profits.
What actually happened is that units began to behave something like the cutthroat city-states of Italy around the time Machiavelli was penning his guide to rule-by-selfishness. As Mina Kimes has reported in Bloomberg Businessweek, they went to war with each other.
It got crazy. Executives started undermining other units because they knew their bonuses were tied to individual unit performance. They began to focus solely on the economic performance of their unit at the expense of the overall Sears brand.
One unit, Kenmore, started selling the products of other companies and placed them more prominently that Sears’ own products.
Units competed for ad space in Sears’ circulars, and since the unit with the most money got the most ad space, one Mother’s Day circular ended up being released featuring a mini bike for boys on its cover. Units were no longer incentivized to make sacrifices, like offering discounts, to get shoppers into the store.
Sears became a miserable place to work, rife with infighting and screaming matches. Employees focused solely on making money in their own unit ceased to have any loyalty (to) the company or stake in its survival. Eddie Lampert taunted employees by posting under a fake name on the company’s internal social network.
What Lampert failed to see is that humans actually have a natural inclination to work for the mutual benefit of an organization. They like to cooperate and collaborate, and they often work more productively when they have shared goals. Take all of that away and you create a company that will destroy itself.
In 2012, Lampert bought a $40 million home on Indian Creek Island, near Miami, just around the time he decided to sell 1,200 Sears stores and close an additional 173. That same year, Sears Holding was named the sixth worst place in America to work by AOL Jobs.
3. Myth: Greed always wins
In the 1980s, a noxious business philosophy developed that said that shareholders were the only true stakeholders in a company, because they made the investments and bore the risk.
Forget about the investments and risks born by taxpayer and the people that work for a company. They didn’t matter. A company had no responsibility to anybody but the shareholder.
As a result, executives started using this justification for various kinds of hustles designed to line their pockets. They got very adept at the game of buying back their own stock in a way designed to inflate earnings per share and hide weaknesses.
In 1977, 95 percent of distributions to shareholders came in the form of dividend payments. Today, more than half of the cash returned to shareholders of S&P 500 companies comes from buybacks instead of dividends.
Fortune Magazine, in a story about what happens when Wall Street jumps into the retail business, reports that under Lampert, Sears has gone on a stock buyback spree. Between 2005 and 2011, he took what was once the company’s strong cash flow and spent $6.1 billion of it on stock buybacks.
During the same time period, only $3.6 billion was spent at Sears on capital improvements. Lampert told investors that upgrades and new stores were not an “efficient” use of capital. Neither was paying workers decently. In fact, Sears workers are paid so badly that they have taken to the streets to protest.
So when you walk into a Sears store today, you find a sad, dingy scene with scuffed floors and chipped paint. Tense-looking workers hover over merchandise scattered onto ugly display tables. Hardly makes you want to buy a microwave.
A handy chart on Yahoo Finance show that buybacks reached a high just about the time that Sears’ sales went into the toilet. Stock buybacks are really just an effort to manipulate stock prices, and they don’t help a company’s long-term health.
They divert money away from the things that a company needs to have to succeed, like decent salaries for workers and investments in new products and services. Wonder why Apple is no longer making anything interesting? Why its retail workers get paid squat? Check out what they’ve been doing with stock buybacks.
Lampert’s buyback scheme has raked in a pile of money for him and his early investors, but it’s also flushing the company down the drain. Hoovering cash out of any firm, especially a retailer that needs appealing stores and strong advertising, will eventually crush sales.
And so it has. Sears has lost half its value in five years.
Conclusion: The lessons of Crazy Eddie seem so obvious that a bunch kids running a lemonade stand could understand them. You have to know something about the business you’re running, especially a big one. Success requires cooperation rather than constant competition. Greed is ultimately destructive.
The invisible hand of the market appears to have attempted to slap Lampert upside the head to teach him these things. But he remains committed to his nonsense, and the real losers are all the hard-working people who have lost their jobs, and the potential loss to the American economy of two revered brands.
It’s probably a good thing Ayn Rand never tried to run a business.
I thought for a long time every time I walked into a Sears that it was the cautionary tale we needed as we slid into third-world countrydom.
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