A Right to Make a Profit?

From Newser.com: Bank of America CEO Brian Moynihan defended his bank’s controversial new $5 debit card fee in a CNBC interview yesterday, saying that most customers would avoid it, and that the bank had given customers plenty of warning about it. Asked to respond to President Obama’s statement that banks don’t have “an inherent right to a certain amount of profit,” Moynihan replied that “I have an inherent duty as a CEO … to get a return for my shareholders.”

He said that once BofA talks to customers and shareholders “they’ll understand what we’re doing—understand we have a right to make a profit.”

No, Mr. Moynihan, you have NO RIGHT to make a profit! This is America…you have the opportunity to make a profit. As CEO, you have the obligation to your shareholders to get a return, as you noted, but no RIGHT to a profit! You and other big banks and investment banks got a giant bailout from taxpayers and the Fed…you have, in effect, privatized profits and socialized losses. That is NOT the American way, and it’s now generating quite a bit of anger right down at the street level on Wall Street and elsewhere. Having run small businesses, I can assure you that no one ever guaranteed my RIGHT to a profit…sometimes we made good ones, other times, we took a haircut. That’s business in the real world. I suggest you and other arrogant banksters step out into that real world and see how things REALLY are!

Coming Facebook “This Is Your Life” Changes

There has already been plenty written about the upcoming Facebook profile changes, and how it will be even more intrusive.  It can be checked out in beta, and some people love it, others despise it. It appears that if you are in the latter category, there are at least some controls in place to allow you to keep limited some of the information you share. That’s a good thing, no doubt about it.

The sad (in my opinion) fact is, however, the privacy horse was out of the barn before Facebook even existed. No matter how careful you are with what you put on the web, if you have had any dealings with businesses at all…and most have unless they live in a cave with no contact with the outside world…THEY will have put info related to you up on the web. In fact, your info is being sold and resold at warp speed. Some of it is ‘annanomized’ so that your identity is stripped out, but there is plenty that isn’t.

On the flip side of all this lack of privacy, if you are trying to dig up information about someone who passed away before the internet (besides death notices and family tree information), good luck getting much detail about them! This may make for some very interesting historical research issues many years from now, even with Google’s fabled digitizing of all books. It may make digging through Egyptian tombs look like a walk in the park!

On Cos’ Little Old Man

This morning, I saw a kindly, white-haired ‘little old man’ at the supermarket.  He was cheerfully going about his business. For whatever reason, Bill Cosby’s recording of years ago, “Little Old Man” popped into my head. It struck me that in the many years since recording the bit, Cos’ has kind of BECOME the ‘little old man!’ Further, it occurred to me that I’m not really all that far down the road behind him…and neither are some who will read this.

Here’s a thought…give a metaphorical tip of the hat next time you see a cheerful little old man or little old lady. Heck, if you actually wear a hat, and are so inclined, give ’em a REAL tip of the hat! Whatever you do in life, someone that’s a little old man or little old lady now blazed the trail for you!

We Get Played With Free Trade

This morning, solar panel maker Solyndra suddenly closes in Fremont, and 1100 people are on the beach. This is a business President Obama visited and touted last year. With the housing market like it is, this shouldn’t be a shocker.  It does, however, raise an issue.

The Chinese are kicking our tails in solar production. The government there subsidizes both the production and purchase, to get wide distribution of them. Back in the early days of solar, 40 years ago, our government had nice tax subsidies for solar panels…I know…I had 8 of them on my roof!  We’ve seen this show before…in the 60’s and 70’s, the Japanese sold cars over here for less than they cost in Japan to take US market share. At that time, US cars were considered superior by almost everyone (remember THAT?), but they vastly increased market share by selling cheaper ones.  As one who was in the auto business selling against them, I have a pretty good frame of reference on this issue!

I can see the theoretical benefit of free trade, but it’s never happened, and never going to. Other countries always cheat, and we let them get away with it. As long as other countries play us like a violin, free trade is a myth!

Tour Your Own Back Yard…And Ours!

The past week, with family from out of state in town, I played tour guide and took them around to lots of tourist destinations– a number of which I hadn’t visited myself in something like 20 years. They had a great time, the weather was cooperative, and that’s all great.

On the motorized cable car tour of San Francisco, there was a fellow from the East Bay who was taking the tour for his 50th birthday. He was born in the Bay Area, and commutes into San Francisco daily (something a lot of us can relate to!) Much of what was on the tour he’d never seen before, despite being a Bay Area native. As we rolled across the Golden Gate Bridge, he remarked that he’d never been on it before. It was a great time to do so, as it was totally clear…one of probably 10 days a year where you could see the Farallon Islands if you had a telescope or binoculars.

Here’s a point worth making, wherever you may live. Take the time to see some of the great local sites before you turn 50, or if you’re already past 50, see them soon! Don’t put it off like the birthday boy on the cable car tour. In fact, as a shameless plug…come to the Bay Area, see the marvelous sites, and DO cross the Golden Gate Bridge, for Heaven’s sake! It’s well worth your time!

Bringing it Home

News headlines from the Wall St. Journal on July 19, 2011:

Apple reports earnings of $7.31 billion…Sales

surged to $28.57 billion, topping expectations of

$24.99 billion.

Goldman Misses Profit Mark, Plans Job Cuts

B of A Swings to Loss

Coke’s Profit Jumps 18%

DJIA’s 200-Point Rise Is Biggest in 2011

So, Bank of America drops 9 billion (mainly still due to the mortgage mess), and Goldman’s profit is significantly lower than expectations, and they plan to cut 1,000 jobs. Coke and Apple are up. Why would the market have such a good day, and what do these have or not have in common? As a rank outsider to the markets, but one who has owned and run substantial small business operations, I’d say this: Apple and Coke MAKE THINGS that people want. B of A and Goldman make money with other peoples’ money.

A CEO of a major communications company did a TV interview today and lamented some of our poor trade agreements and losing jobs overseas, and pointed out what a lot of us on the retail & service sector side of things (as opposed to high finance) have been shouting for quite a while now…we in the US need to get back to making things.

If we can’t make cheap consumer goods due to extremely low labor costs in other countries, how about making greener and more efficient energy-saving items, or large products that go into infrastructure where the shipping cost savings is enough to counteract the labor savings due to near-slave wages in certain countries?

Of course Coke is made here, and it’s easy to point out that Apple has most of its products produced overseas. Apple, however, designs and tests them here, they don’t just slap their name on someone else’s designs from overseas, and they are also retailed here and when necessary, repaired here. That takes good old American bodies…not as many as the manufacturing, but it all helps.

Just A Personal Rant- Renting vs. Owning

In the 12 years I lived in an apartment, the trim, fences, and deck were painted once. The outside was never cleaned. In just over a month in this townhouse, they have already pressure washed the buildings again. If you think it’s a case of ‘you get what you pay for,’ the payment and HOA fee for the condo are much less than the rent for the apartment was. I’ll take a little noise once in a while for a lot more clean!

Here’s A Tax Law Change to Stimulate Business

You may or may not know that you can write off a yacht as a second home and get a tax deduction. The vessel needs to have a place to sleep, a head (toilet), and some reasonable facsimile of a galley (kitchen), and you’re good to go with a nice tax deduction. While a substantial number of people own first homes (the present housing and mortgage mess notwithstanding), it’s a MUCH smaller universe of folks that own a yacht as a second home.

Here’s a thought: bring back the deduction for interest on new and used car loans. A huge number of people would be affected immediately with this, and it would stimulate a lot more business- the auto business is much more widespread than the yacht business. In fact, you must even have a car in order to collect unemployment if you live somewhere where there’s no mass transit. This would affect everyone but the top couple percent of Americans, who generally pay cash for their cars. (When I was in the luxury auto business, over 85% paid cash for their new German luxury cars. Not even close to 15% of regular folks paid cash for more pedestrian vehicles, they nearly all financed them.) OK Congress, how about a break for those in the bottom 98%?

Pundits vs Facts

This is something of a rant, concerning what passes for news and accurate informantion on cable news channels.

Over the weekend, Charlie Cook (who is one of the best political observers around), did a segment on MSNBC on Medicare taxes vs. benefits. the following was put up in graphics concerning Medicare contributions:

Single man: $55,000 contribution, $161,000 benefit

Single woman: $55,000 contribution, $181,000 benefit

1 earner couple: $55,000 contribution, $343,000 benefit

2 earner couple: $109,000 contribution, $343,000 benefits

This is all well and good, but doesn’t take into consideration the time value of money. Some of us will have paid into the system for 50 years before retirement. As the quote below from the government indicates, there really isn’t a trust fund per se, however the government has dumped the excess into US government treasury securities, which pay interest. No one ever brings this up!

With an insurance policy, the insurer collects the premium, and invests the money. The law of large numbers dictates that not everyone will collect or many won’t live long enough to collect a major portion. The insurance industry collectively whines when a big payout hits, but is generally a very profitable business.

The government doesn’t even NEED to make a profit, and doesn’t! Pundits and politicians can’t leave the time value of money out of these outrageous claims they make about the systems going broke. (This doesn’t even address the social value of providing for a country’s elder population and covering medical care…which every other civilized country in the world does anyway!)

Here’s a quote about the so-called ‘trust funds’ from the Department of HHS:

<The U.S. Treasury Department tracks their financial flows through accounts that by law are labeled “trust funds.” The label “trust funds” can be confusing in that it may suggest that the money collected for the programs is somehow segregated and managed differently than other receipts. It isn’t. When received on a day-to-day basis, any revenue that comes in for Social Security and Medicare is commingled with other federal revenues, and any such revenue in excess of what is needed to pay each day’s program costs gets used for whatever other obligations the government has to meet. The excess is not invested outside the government, such as in stocks, corporate bonds, or securities of other nations. At the same time, the appropriate trust fund balance is increased by a corresponding amount by crediting it with U.S. Treasury securities, which is tantamount to the government investing in itself. It is one account of the Treasury giving credit to another — i.e., from the Treasury’s general fund to the Social Security or Medicare trust funds.>

Source:

http://aspe.hhs.gov/health/ss-mcare-trust05/index.htm

On the same topic of how leaving out facts shades the information we get, another pundit, (this time on CNN), states that post-recession, 37% of jobs created are in Texas. He does say as a qualifier that Texas is a low wage and low tax state. This is a bit of an understatement as Texas has NO personal income tax…NONE! They make enough off oil not to have ever had a personal income tax.

Having so-called ‘learned panels’ and pundits is one thing, but if they leave out giant swaths of fact, they need to be called out on it by hosts that are smart enough and well-educated enough to do so. This is a terrible example of spreading half truths and misinformation, and not even doing it on purpose…as one network on cable regularly does!

Speaking on the O’Reilly Factor on Fox, Gretchen Carlson incorrectly claimed that “about 35 percent of the in-state tuition people or students” at University of California schools “were illegals.” In fact, only 0.34 percent of undergraduates in the University of California system in the fall of 2008 were “potentially undocumented” students who received the in-state tuition rate. It’s amazing what essentially moving a decimal point a couple digits can do to stir people up.

Send emails to these networks and complain…do some of your own fact-checking with multiple sources. Be informed, the cable channels AREN’T going to inform you at this point!

Internet Posts- Libel, Slander or Other?

Libel and slander are two forms of defamation, a definition of which is:

‘An act of communication that causes someone to be shamed, ridiculed, held in contempt, lowered in the estimation of the community, or to lose employment status or earnings or otherwise suffer a damaged reputation. Such defamation is couched in ‘defamatory language’. Libel and slander are defamation.’ Libel typically refers to defamation that is written or published, while slander is usually limited to oral defamation.

In an article just posted by the Nieman Journalism Lab, (link to the article below), there’s a scholarly discussion concerning modernizing libel and slander laws further to apply more appropriately to internet social media like Twitter.

Much of social media postings, while written, much more closely resemble the spoken word than the traditional written word. Certainly when libel was first formulated, the written word was found in books, manuscripts, and periodicals. Never even imagined was the modern capability for changing posts and ‘republishing’ so quickly and in such a fluid manner as is now possible on the web.

Careful people assume that anything they may post anywhere on the web will live for all time, so they exercise caution with what they do write or post. What about items that are ‘hacked in’ or posted in a person’s name? When negative things can be attributed to someone that can do harm to their career, reputation, or even end a life, there should be serious consequences in law for those who misuse the web to the detriment of others! Will the law be able to catch up and truly cover social media defamation? So far, there’s NOT an app for that!

Is Twitter writing, or is it speech? Why we need a new paradigm for our social media platforms