Ep 36: Pseudo-Capitalism

Fraud always involves deception.  With increasing frequency, we are beset by fraud-laced schemes.  Remember the Wells-Fargo banking scandal in which two million fake customer accounts were created?

Here’s an even more jaw-dropping example of pseudo-capitalism, from Germany.

A man bombed a soccer team’s bus, allegedly, but first, he rigged the market.

The perpetrator borrowed shares of a soccer team’s stock.  Then he bombed the team’s bus, injuring one person.

He assumed his bomb would trigger a drop in public confidence and therefore stock price.  This should allow him to repay his recently borrowed block of shares, with shares purchased at the now-lower price.  His expected profit?  Over one million Euros.  This stock market trick is called selling short.

Fortunately, detectives searching for the bomber wised up to his financial motive.

Sometimes, crooks act surprisingly like legitimate stock traders and corporate executives.  And vice versa.

– Jim Sawyer, Boulder CO.

Ep 35: Commentary on Wells Fargo

This is Jim Sawyer for Capitalism in Crisis.org

Wells-Fargo Bank, in April, clawed back an additional $75 million from two executives it now holds accountable for the bank’s five-year sales scandal.  As many as two-million fake customer accounts were opened at management’s behest.

Since September, government oversight has forced Wells to walk back blame-shifting onto 5300 employees who had been scapegoated, then fired.  This most recent financial claw back, accompanied by a scathing 113-page internal report, blames former Wells chief executive John Stumpf, and former community banking head Carrie Tolstedt.

See the link to the New York Times article, below.

It is a unique story at Wells-Fargo, but same-old, same-old regarding one more way in which the American financial system is gamed by elites who take the money and run.  If you saw Michael Lewis’s film—The Big Short—you saw Great Recession-era mortgage bankers rigging America’s finances for their self-interest…far too often, to get something for nothing.

Of course, gaming the system redistributes resources from most everyone else’s pockets—to theirs.  When this happens, capitalism’s productivity—and effectiveness—diminishes.

How do they get away with it; and what can be done to stop it?

Check out links to some helpful Capitalism in Crisis Podcasts on fraud, below.

From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis Dot Org.

 

https://www.nytimes.com/2017/04/10/business/wells-fargo-pay-executives-accounts-scandal.html

Ep 34: Truth Marching On (Featuring The Battle Hymn of the Republic Penned By Julia Ward Howe)

Julia Ward Howe, who penned the Battle Hymn of the Republic—just months after Fort Sumter’s fall—was a writer, poet, abolitionist, social activist and suffragette.  To understand Ward Howe, we must understand her contextually, within the turbulent period in which she lived.

Truth goes marching on, she exclaimed, profoundly.

What a fitting backdrop for reflection upon the Civil War’s carnage—and upon the heroic leadership of our 16th President, Abraham Lincoln.

His integrity—the moral power of his person—so evident at Gettysburg—placed Lincoln in the cross-hairs of an assassin.  At just 56, martyred with a pistol shot—17 months following his speech at Gettysburg—and just five days following Union victory and Confederate surrender at Appomattox.

With Lincoln, also perished nearly two percent of his countrymen—our countrymen—our forbearers—dead—from defending one side or the other of the conflagration.  Today, with more citizens, comparable war would claim six-million souls.

Now—as then—we are becoming…have become…a people divided by exclusion—from the mainstream.  Divided by rural against urban, masculine against feminine; white against nonwhite.  College educated…or not.  Divided by respect—or lack of it—for the dignity of “the other.”  Divided by so much else!

Not yet are we so divided, however, as six generations ago.  Not yet have we moved beyond the precipice; beyond the point of no return.  Not yet are we drawn into a contemporary vortex…as irrevocable—as Fort Sumter’s shelling by Confederate rebels.

From Gettysburg, Lincoln’s words remind us, of this.  This nation by which we are nurtured, is conceived and dedicated to principles of liberty, justice and equality.  Now, as then, we are testing—even being tested—whether fallen soldiers from sixteen decades ago—even from recent days and months ago—shall remain honored, or shall have fallen in vain.  Testing whether our government—of the people, by the people, for the people—shall endure.  Testing whether we—the people…shall endure in dignity and respect, one for another.

Ep 33: Ike The Barber

Communism has evolved.

Remember the old Soviet system?  It crashed in 1991.  In place of markets, Soviets used quotas, fashioned by committees.  Never mind what citizens actually wanted—or needed—stuff was chosen for them by bureaucrats, instead.

Of course, when the price system is undermined, disastrous consequences may follow.  For the Soviet system, economic and political revolution was among the outcomes.

Suppose—a few decades ago—you were managing a tractor factory and your bureaucrat uncle sat on a committee, making production decisions you resented.  If you could get him to change course, then your factory’s situation—even your situation—might improve.  Tragically, however, any favorable outcome you might experience, could come at the cost not only of tractor overproduction, but even, also, automobile underproduction.

Bad allocations certainly were the Achilles heel of seven decades of Soviet mismanagement.  But wait; there was even more bad news.

Suppose, to forestall shutdown of your factory, you raid its finances and pay off your relative.  Now, tragically, on top of misallocations, your factory’s problems are exploding more seriously than ever before, to include fraud, corruption, even tyranny.

Is there a way Marxists can save themselves from failings such as these?  Well, actually, Chinese communists have moved beyond where the Soviets were.  Consequently, the Chinese have become much more successful, economically.

Probably you don’t remember any world-class corporate brands associated with the Soviet Union.  That’s not the case for China, however.  Think of Alibaba, or Haier or Lenovo, or a host of others.

Let’s recap the primary difference between these two “flavors” of communism.  Simply put, while both eschew democracy, the Chinese embrace markets.  So long as their system determines politically, what is to be made, then their market economy generally is quite good at determining how it will be distributed and how it will be produced efficiently.

Trade and political tensions aside, does this mean our U.S. system and the Chinese system are moving somewhat closer together?  Perhaps.

Ike, who cuts my hair “just right,” is a “go-to” source to learn about what Christian conservatives may be thinking.  Recently, he weighed in on a crucial question, unleashing what follows.  How did he come by it?  Perhaps, initially, it came down from his pastor, seasoned with ample conversations with parishioners, customers, family members and friends.  No doubt the Internet played a crucial role, also.

Remember, from the Bible, Israel for a time had kings?  Do you remember righteous King David, Ike asks?  Well, perhaps America now needs someone to direct us, not unlike the good King David.

Wow!  Time to discard our democracy…to the dustbin of history?  One wonders.  In the meantime, I’m searching for a less authoritarian, more constitutionally-grounded hair dresser.  Hopefully when I find them, they will also cut hair as brilliantly as Ike!

So, here’s the point.  So much rides, not just on how we are doing today, but upon how succeeding generations will be doing, tomorrow, next year, the following millennia.  To move toward a beneficent future, a myriad of planning and funding decisions must be made, such as what our society shall make; that is, how much our society shall allocate to things such as medical care, higher education or retirement.  Will we fund and build vastly more miles of super highway, for instance, or will America move, instead, toward greater reliance upon public transit?

This is where the economic also becomes the political, and vica versa.  If we go down the pathway Ike is favoring, Chinese-style totalitarianism could be in the offing…could be the way of the future for large decisions effecting coming generations—impacting irreversible choices we will be making for those who follow after us.

What might we offer—what cost might “we the people”—be willing to bear—to forestall such totalitarianism?  For me, it rides, literally, upon words from a bumper sticker favored by many military veterans.

Freedom, the sticker admonishes, really isn’t free.

From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis Dot Org.

Ep 32: FUNDAMENTALISM, American-Style

Let’s get down to basics.  The Washington swamp must be drained, NOW.

Sound familiar?  Right out of Donald Trump’s play book?

Right out of father’s play book, also.  Throw the bums out; in the Sawyer household was a familiar refrain.  Fundamentalists like Buss reduce Technicolor-like complexity, to black and white simplicity.  The only thing in the middle of the road, they bluster, is a yellow stripe.  Yellow symbolizes cowardice, of course; cowardice to take a principled stand.

Post-Nine-Eleven, this is the logic George Bush used to bully nations into compliance with his war agenda.  If you’re not with us, then you are against us.

Popular in Trump-style politics is imagery linked to Flight 93.  The morning of 9-11, doomed passengers wrested controls from terrorists, then diverted the high-jacked plane to ultimate catastrophe in a Pennsylvania field.  Their heroism forestalled a direct hit on the White House or Capitol Building.

In this Alt-right analogy, urgency is the fundamentalist’s byword.  Act NOW.  This is YOUR last chance to save America for “real Americans.”  Be a hero.  BE a heroic passenger on Flight 93.

Fundamentalism, writ large.  This is how political fundamentalism works, American-style.

Little difference exists between religion and politics.  Whereas Buss hated the Mormon Church, at some deeper level, fundamentalist thinking actually connected him to orthodox Mormons he loathed, in overlapping views of how the world is believed to work.

Organization politics, of course, play a huge role.  So also does authoritarianism.

To illustrate, a hypothetical, right-leaning church sets increasing Sunday School attendance as a measurable performance objective, to stand in place of a much squishier goal of saving souls.  If the objective is met, it is believed, then parishioners assume their church is meeting its goal; it is saving souls.

Sometimes truth is stranger, even than fiction.  What follows actually occurred at a Northwest medical clinic.  Physicians called an organization retreat, then lined up around the goal of experiencing joy—the joy of practicing medicine.

But how might they know if they are attaining joy?  Here’s how.

As the retreat lurched to conclusion, someone proposed physician income as a surrogate—as the objective—to stand in place of the much-squishier goal—finding joy through their medical practices.

Higher salaries would distinguish this physician group.  Not only would they be wealthier, but happier in their joyful pursuit of the joyous practice of medicine.  In every way they would surpass their peers.

Stranger than fiction?  Nope.  Often, organization politics are mystifying.

What does all this mean?  Stay tuned.

From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis Dot Org