Development of a banker's value system

Doing God’s work in Greece

So is anyone shocked to discover that Goldman Sachs was actively conspiring with the Greek government to load additional debt onto the country that didn’t look like debt to outside financial analysts? No? Me either.

How about that Goldman, knowing that the Greek treasury was in much worse condition than everyone thought, was an active investor in financial instruments that bet on a further deterioration of the Greek economy?

An analogy would be if I sold you a used car that I knew had seriously bad brakes, and then I went out and bought a life insurance policy on your life with me as the beneficiary. This is apparently what Lloyd Blankfein had in mind when he told Congress that Goldman was “doing God’s work.” I guess God is diversifying his portfolio.

Not that Goldman is alone. Merrill Lynch paid Harold Ford Jr. a $2 million salary – more than the salary of Merrill’s CEO, for some amorphous marketing duties. That was a pretty good first job in the securities industry for the former Tennessee Congressman who is now contemplating a run for a New York Senate seat.

We already have Chuck Schumer as the Senator from Wall Street, but it’s never enough for those guys. As long as there is even a hint of an unrigged game or a sucker getting an even break, they’ll be looking to put in the fix.

For a deeper look at how they do it, the most recent Matt Taibbi piece on Goldman for Rolling Stone is a great read. (thanks Birdman). Taibbi writes with great clarity about complex issues. In this piece he likens various Goldman strategies to con games from old movies, and makes even complex transactions understandable for laymen.

He is also the only journalist I know of who is willing to call these guys what they are: con men and thieves. They are the kings of the “I drink your milkshake” school of business.

The Beckinator

I’ve been having this running argument with one of my right leaning brothers over current political topics, and he accused me of making light of both Rush Limbaugh (aka Lard Ass) and Glenn Beck without actually ever listening to them. He was completely wrong about Lard-o, who has had ample opportunities to turn my head with his sweet talk, and failed miserably; but I have to confess that Beck is a different matter. I’d never actually seen his show, just miscellaneous clips on other media that, while outrageous (“President Obama hates white people.”) were certainly chosen to show what a nut job he is.

So Monday I turned the telly to Fox at 5:00 and watched an entire Glenn Beck hour. Where to begin? Well, first of all, as someone who made a living for a long time by pitching ideas to people, I have to say this guy is impressive on his feet.

He opened the show with a thirty minute anti-Obama rant that was intellectual Swiss cheese, but he did it very, very deftly. He may have been using a teleprompter but it looked totally extemporaneous; and he used his trademarked chalkboard effectively to emphasize his points. It’s easy to see how he has built an audience.

Now, as for substance, that’s a different matter. The “facts” flew too fast to write many of them down, but he is very loose with them and accomplished at twisting small truths into big lies.

He sources almost nothing. He said the insurance industry had a net margin of 3.8% and ranked #88 among all industries. (His point being they should not be regulated.) No source and no year were offered. According to the FORTUNE 500 list for 2009 their actual margin was 4.6% and ranked #22. Not all that great either, but why not get it right?

More surprising to me was the tone. That opening half hour was an amazing cocktail of anger, sarcasm and distain directed at the President, Democrats, “progressives,” and even some Republicans. But these groups by-no-means received equal scorn. When he talked about Obama, Dems, liberals, or the new boogie-man, “progressives,” his tone of voice and facial expressions were what you might expect if he were lambasting pedophiles. It was highly bombastic. Opinions were presented as facts and given an air of believability through the use of PowerPoint charts and bullet points – but no sources.

One of his favorite rhetorical tricks is to say something like, “well Obama says he wants A, but what he really wants is A, B, and C and once he gets them he’ll take E, F, G, & H too! It’s obvious.” By the time he’s done you’re wondering how the hell we even got to talking about H – it certainly wasn’t because he presented any evidence to that effect.

He closed his anti-health-care-bill rant by daring the Democrats to pass the reconciled bill and “ruining the greatest health care system in the world.” He claimed that they won’t, because without Republican support they’d have to take all the blame themselves. I’m not sure that is false. One fact he is sure of is that the American people oppose this bill and he is right out in front of the parade.

He also caught Obama red-handed with two separate video clips declaring very different versions of his past involvement with ACORN, a particular Beck-noire.

On the “fair and balanced” side of the equation he took repeated shots at the GOP, calling them “unprincipled” and saying they are addicted to big government and big spending. He said there is a “tax and spend party” and a “no tax and spend party” and both are corrupt. Again, hard to argue with that and it is remarkably similar to Paul Krugman’s take earlier this week.

But for Beck there are Republicans and there are Republicans. He was very hard on both John McCain and Arnold Schwarzenegger because of their “progressive” tendencies. He even smeared Teddy Roosevelt. “Progressive” is the new “liberal” and Beck is hell-bent to make it just as pejorative a political term.

I’m torn about how to think about this guy. His views and style are obnoxious, but his waving of the bloody flag has clearly created a following. I doubt many of his fans have contemplated what Beck’s version of the Federal government would mean to them. He wasn’t specific the other day, but it seems he would limit it to the State and Defense Department -- and maybe not the latter. Everything else would be done (or more likely, not done) by the states. How many Americans would ever actually buy into that view -- 20-25% maybe?

I don’t know, but it would be a mistake to not take this guy seriously, and as Kurt Anderson recently posted, it is really important that everyone ask the right-wing of the GOP (which is rapidly becoming the only wing), as often and as loudly as possible, exactly what it is they plan to cut from the Federal budget once they pull their tea bag out of their cups.

Life 3.0 (#2)

Notes to readers: This is the second post on the development of “The Plan” – my attempt to figure out what to do with the rest of my life. However, since Glenn Beck is coming out with a new book called “The Plan” this summer, and since I’d prefer to be confused with Pee Wee Herman or Slobodan Milosevic over Glenn Beck, I am forced to switch to a new title for this series; the new name will be “Life 3.0.”

On a more exciting note, I will have a partner in this adventure. We’ll call her Coach Lou. Lou is a partner in an executive coaching and leadership training consultancy based in Boulder, Colorado. More importantly (to me anyway) is the fact that Coach Lou has been a very dear friend of mine since we were in seventh grade. She is a person of uncommon common sense and she’ll be totally unafraid to be honest if she thinks I’m not thinking straight. So, everyone, please welcome Coach Lou, who will begin her critique of my plan with today’s post.

I’m going with the Life 3.0 title because this is the third major phase of my life. First was childhood, including an extended childhood that lasted until I was approximately 29. That was Life 1.0. Then came the serious business of having a career, marriage and raising a family – Life 2.0. Now I’m ready for version 3.0.

The plan (formerly known as “The Plan”), will focus on how I will spend my non-family, non-recreational time. I don’t feel the need of a new family/recreational plan. The old one will work fine. More importantly, I couldn’t write, and no one would want to read, anything that personal.

“Plan” is such a small word, but it implies a lot of things. A plan has to have a goal, a strategy for achieving the goal, and a timeline. Like most previous goals I’ve had in my life, I shall pick something that is relatively easy to accomplish, and which is sufficiently subjective that I can declare victory across a broad front. I was always jealous of my kids who got trophies for everything they ever did. I would have liked that when I was a kid. I played everything growing up and I don’t have a single trophy to show for it. So I’m not sticking myself now with some impossible dream with no trophy attached to it. I also value flexibility and fluidity, so I won’t be making too many hard and immutable rules either.

All I’m looking for is some way to occupy my time that I enjoy, which will take up 20-40 hours per week, and which has some redeeming value to someone else. This last point may be immutable; otherwise, I would simply invest in a world-class beach chair and park myself on the sand someplace and read books and magazines all day long. I really enjoy that, but it is unlikely to lead to a cure for cancer or a path to world peace in my lifetime, and I would like to do something meaningful.

It also doesn’t have to be just one thing. Perhaps I’ll find 2-3 things that together can fill the time and achieve the goal.

So I guess I should start by trying to identify the things I enjoy doing, since enjoying myself, truth-be-told, is the one truly immutable rule at play here. Here is a list of things I’ve identified, listed in alphabetical order: blues, cigars, conversation, family, drinking, golf, persuasion, politics, reading, road trips (especially the road less taken), watching sports, and writing.

If anyone sees a pattern here, other than that many of these things can be done in combination, and they do not represent a particularly healthy lifestyle, please tell me what it is. So far I can’t see how any of this points to an obvious v. 3.0 architecture.

The root of the problem

If you believe, as I do, that the country is facing a long list of huge problems, and that Congress is doing very little of substance to solve any of them, then what is the root of the problem? We often hear that a lack of bipartisanship is the issue, but what does that really mean? Just that the 535 people already in Congress can’t work together, but what forces put those people in the position to stymie the problem-solving role of government?

The problem is that our elected representatives no longer represent people as much as they represent an ideology. And ideology, like theology, has been argued for millennia without a winner emerging. There never will be a winner. There will only be losers, and we are them.

Why do our representatives represent ideology rather than people? It is at least in part, because of gerrymandering. This is one of the great examples of the laws of unintended consequences at work. Politicians, in an attempt to make their own offices more secure, have created Congressional districts that resemble metastasizing cancer cells or Jackson Pollock paint splatters more than they do a rational association of citizens with common problems and concerns.

Instead of districting so that areas with common issues and problems (suburban, urban, industrial, farming, etc.) are together, districts are created by politicians, that lump together people who are disposed to vote similarly, or by purely racial categories, regardless of how geographically remote they are from one another.

This lessens the practical common bonds among the constituents but allows their natural cultural and ideological commonalities to run free. So instead of debating the practical merits of policies and how they will affect our lives, we argue their ideological merits – a kind of massive, communal circle-jerk.

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David Brooks’ column today offers a fascinating look into why our leadership class in all fields is suffering from diminished respect and support from the people they lead. I highly recommend it.

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The Plan (an update). I was distressed to discover yesterday that Glenn Beck’s next book due out in August will be titled "The Plan." I’m going to have to find a new name for my scribbling on the process of developing my new life plan. Suggestions are welcome.

I learned about Beck’s book from a piece on the Daily Beast that was an excerpt from a new book called “Wingnuts: How the Lunatic Fringe is Hijacking America,” which appears to skewer both left and right.

Here is a really scary fact of Beck’s own admission: he smoked pot every day for 15 years. Instead of telling us smoking pot would make us heroin addicts, perhaps our parents should have warned us against becoming Glenn Beck. It might have been more effective.

Life 3.0 (part 1)

Back when the media business was thriving I used to look forward to the annual sales meeting with great anticipation. It was always someplace nice, and usually someplace I wouldn’t necessary go on my own: Lyford Quay, Aspen, Ireland, Palm Beach, or Puerto Rico in the good years. But even in down years, when we’d schlep ourselves or ride a bus to Princeton, Stow or Little Compton, the weather wouldn’t be as good, but it was usually the same good times.

In the later years of my career, after most of my contemporaries had left for other jobs or perpetual consulting, I didn’t look forward to these events the same way, but through the ‘80s and ‘90’s they still had a “pinch-me” quality to them.

“OK, so I don’t have to work this week and you’re going to fly me to Arizona and put me up in a 5-star hotel, feed me four times a day, pick up my greens fees and then pummel me with alcohol and music all night long? And in return I have to be in my chair in the meeting room from 8:00 until noon every day, although I don’t really have to pretend to be anything close to 100% -- is that about it?” I could do that. I still could if someone would offer.

It certainly wasn’t hard, although there was a lot of ritual associated with these events, and the longer one worked there the more responsible one became for upholding, embellishing and perpetuating it. For example, it was necessary to initiate new members into the lore by retelling stories from recent years, including who slept with whom, or the time Jack Rabbit won $500 by swimming underwater 100 yards in his underwear during cocktails, and other assorted tales. There were also stories from earlier generations of salesmen to pass on, like the Life magazine salesman who lost his house in an all-night poker game at a Life sales meeting back when Life was bigger than TV.

Of all the sales meeting rituals, my favorite was a recurring event at five or so of them in the late ‘80’s. Fortune’s man in San Francisco, Tom Malarky, was an accomplished public speaker; one of those guys who could just step up onto a stage and be funny, smart and entertaining for 15 minutes without any real preparation. Each year Tom would be called upon by the publisher to make a few comments. It was never the first or the last night, and it was always at an unannounced but carefully chosen time; late enough so that the crowd was well oiled, but never so late that inhibitions would be too low, or sensitivities too high.

At that chosen moment the publisher would invite Tom to the podium, and ask him to make a few remarks to how we were doing against “The Plan.” By this point we’d had at least six hours of indoctrination during the preceding days on the plan for the upcoming year. So Tom would begin by complementing the magazine’s management on the brilliance of the new plan, and would then tick off a dozen or so of the most absurd and perplexing management moves of the past year, and then explain them in the context of the plan in a very funny way, as if these events had always been a part of some larger management vision that we mortals were only just barely able to comprehend.

These were remarkable monologues for their honesty and insight, but also because they were not the kinds of truths one normally speaks out loud in front of the bosses; but there he was, speaking them very much out loud, at the invitation of the bosses, and to the raucous enjoyment of the hoi polloi.

By the time he finished we’d be in tears. His best lines would be repeated for days afterward. And we’d all be bonded in the knowledge that even the bosses knew the truth of the matter, that while it is all well and good to have a plan, shit is going to happen along the way. Some of it will make you laugh, and some of it will make you cry, but most of it will not be what you expected, or what you planned for.

Put another way: If you want to make God laugh, make a plan.

This is all a long wind-up to say that every article or book on the subject of retirement says emphatically that one must have a plan in order to have a successful retirement. And I’m sure that is so. In fact, at one point I was committed to continuing at my job until I had just such a plan in place. And then I began to contemplate the possibility that I might still be chained to my desk at 75 in want of a plan.

So I quit. But the rock and hard place I find myself wedged between are the certainty that I need a plan for the rest of my life, and the conviction that it is a folly to create one.

To be continued.

NOTE TO READERS: Part of my plan is to continue writing, and one of the things I plan to write about is the process of developing this plan. I know this is not the sort of thing most of you come here to read and I hope I don’t drive you all away. I plan to mix it up with the political stuff, so please don’t give up on the Daily Blank just yet.

It's official

Well, I’m now an old white man driving a Cadillac with Florida plates. How the hell did it come to this? Not only that, but I’m reading the New Yorker in the DeLand public library. This must also be a sign of something unintended.

I was going to write this yesterday, so I took my netbook with me to the Blind Pig around 3:30, but they had 2-for-1 pints of Yuenglings for three bucks, plus I had a Montecristo on me. Unfortunately smoking, drinking and typing are just one too many simultaneous activities for me. I don’t know how Faulkner, Hemingway the other big boys did it. In my case the writing had to wait until today. Doc warned me that living in Florida is a little like slitting your wrists in a warm bath. It kind of feels comfortable and relaxing at first.

I do get out however. I just visited a place near here where more than 200 Manatees spend the winter in a warm spring that flows into a local river. The spring stays a constant 72 degrees during the winter, so they hang out under the Spanish moss covered, spreading limbs of live oaks in a wide part of the spring. The setting looks like a Monet painting – all deep greens and blues. I’d never seen a Manatee before. They are gentle, massive things; 8-10 feet long and I’d guess a half ton, huddled together by the dozens in a kind of aquatic group hug. Meanwhile, a solitary alligator floated with just his eyes and snout above the water, maybe 50 feet downriver, watching. I couldn’t help but think of Captain Hook.

It’s definitely harder to focus on politics down here. I’m not sure if that is good or bad. I think it’s just a function of not knowing anyone well enough to get engaged in those kinds of conversations. I have, however, been following the news in the European Union with interest, as Greece, Portugal, Ireland, and maybe a couple of other smaller EU countries are in danger of economic collapse. It now looks like Germany is going to have to step in with their version of a TARP plan to keep the union from broader damage. It was Germany that drove the process towards a unified European currency, and opponents of the idea warned of exactly this kind of problem down the line.

This has led me to add to the previously published list of rules in the June 29, 2009 post: “How to survive in business.” Actually, there are two. The first is already out there, “Great is the enemy of good” and is self-explanatory.

This one is mine: “Big is the enemy of good.” Many good ideas are killed in business before they are ever tried because some strategic-thinker decides the idea was not big enough. As if Jim Brown was born 6’2” and 235 lbs. And then there are Wall Street, New Coke, DaimlerChrysler, and an endless list of other examples of commercial disasters following an unrelenting, unrealistic, drive to get bigger. German politicians probably thought they just weren’t big enough to compete economically in the 21st Century with the U.S. and China, so they wanted an EU. It might have worked if they’d hitched themselves to 4-5 other German economies; instead they got Greece and Portugal which are now dragging them down. Small is beautiful.

RIP Charlie Wilson. A true American archetype.

Liftoff!

I could have downloaded a much better photo with no problem, but I took this one with my own little Blackberry. That's the space shuttle Endeavour a second or so after liftoff. I took it very early this morning while standing on the banks of the inter coastal waterway in Titusville, Florida, maybe five miles across the water from Cape Canaveral.

We'd driven down there Sunday night and slept in the car for a couple of hours waiting for the scheduled 4:39 a.m. launch, which was called off at the last minute. There were thousands of disappointed kids whose parents had brought them out, it being a weekend.

So we hit the road again about 2:00 this morning and got there in plenty of time to find a prime spot -- it now being a school night. However there were still thousands of people lining the Titusville waterfront waiting to see the last scheduled shuttle night launch. There are only five more shuttle flights left before NASA discontinues the program.

Someone near us had a radio so we could follow the pre-launch news. Everything went off as planned on a crisp, mostly clear night. There was a quarter-crescent moon low in the southern sky. We were close enough to see the floodlit launch gantry across the water, which is where we focused our attention.

At 4:14 the eastern horizon lit up like the sun. I could have read a book by the light where I stood. Slowly the machine lifted from its scaffolding and the light and smoke expanded. It was both awesome and just a little disappointing, because the only sound came from the exclamations and applause of the people around us. In the time it took to realize and process that thought, a tsunami of sound and vibration rolled over us from the launch site. It started low and quickly built to a roar. I could feel the vibrations in my sternum, my sinuses, my malleus, incus, and staples.

As the intensity and volume built quickly over a few seconds I began to think that soon the intensity would build to a point it would take me to my knees; but just as I thought it, the sound began its retreat, and we were soon again on the banks of a peaceful, glassy body of water on a beautiful night.

As the shuttle made its trademark slow roll towards the heavens, and the external tanks burned, it was hard not to think of the horror spectators must have experienced when Challenger exploded. But this day all systems worked and the crew is safely on their way to the international space station carrying a "cupola" -- essentially the first window the station has had.

And then it was over. Within a couple of minutes Endeavour was like a bright star in the eastern sky, and we all shuffled back to our cars and home to bed.

Party like it's 1937

When I first started reading Paul Krugman some years ago I thought he was just another weenie liberal economist, but over the years I've been impressed with how often he has been right. I guess that's how you win a Nobel Prize. I think this makes it worth reading his opinion on reducing Federal spending now as the immediate stress of the downturn lessens. The deficit is certainly worrisome, but this doesn't sound too good either.

A number of you have already read David Brooks' column on The Geezer Crusade. It's a great column but it made me feel guilty for not doing enough.

So, Sunday is the official end of the Holiday Season. Buzzard will be taking down his tree. Time for the Super Bowl. I like both teams but I have to pick the Colts. Manning is too good and too experienced. We'll also have to suffer through a few hundred commercials, grossly overrated for their entertainment value. If they weren't on the SB they'd barely warrant a chuckle.

Even the SB has become political, with Tim Tebow and his mom promoting a pro life message. As usual, the left is its own worst enemy, making such a big deal over such a bland message has insured it will get maximum attention, and by demonstrating such a lack of confidence in their own message and by trying to stop the commercial from airing, they look weak and undemocratic

I may be the only one who cares, but I found another excellent blues podcast worth checking out. The Roadhouse podcast plays "the best blues you've never heard" for an hour every week. You can download it free from i-tunes. There is less talk than on Murphy's Saloon, but they do play a few commercials, which don't get in the way much. Murphy focuses on lesser know and new groups, while Roadhouse is more focused on lesser known cuts from top bluesmen. Both are excellent. New road music: Ray Wylie Hubbard. (above)

Finally, for all you Northeasterners who are getting ready to hunker down for the weekend, and who made fun of my move to Florida, I'd like to report that it is 80 degrees today and I just returned from the beach.

The Union label

Here’s a topic that will rub everyone the wrong way: what’s good about labor unions.

Everyone has a story about some union excess they know of. I know I do. There is no question that unions have attracted both criminals and the over-zealous – like in politics or the business world. And I confess that I joined the United Steel Workers union when I was 19 so that I could work summers in the Ohio mills, so I am not totally unbiased.

When I went into the mills in 1968 about 30% of the labor force was unionized. By 1981 when Ronald Reagan broke the PATCO strike the figure was about 22%. Today, only about 12% of the workforce is unionized. That’s around 15 million workers, but that understates the decline of unions since the loss is almost totally in the private sector. Today, more than half of all union members are government employees, which makes it all the easier to demonize unions.

This decline didn’t happen because workers got tired of being in unions, it happened because business relentlessly fought to keep their workers from unionizing, and just as hard to drive them out of business when they could; NAFTA is a good example of the kind of tactics that drove good union jobs abroad by making it easy to import almost anything made abroad by people paid pennies an hour, in factories with no safety or environmental rules to deal with.

Fewer high-paying union jobs means less money goes into the U.S. economy. Not surprisingly, the last decade has given us virtually no job growth and no real wage increases. But we’ve seen fantastic gains in business productivity – all of which went to the management and shareholders.

If it weren’t for unions it would be a very different work environment than the one we have today. Unions gave us the only health care insurance system this country has ever had. Unions got children out of mines, gave us the 40-hour work week, vacations, and paid overtime. Unions made safety, including environmental safety, important issues. And they gave American working men and women the highest standard of living in the world.

Were there excesses? Yes there were. But that was part of the price we paid for having a thriving, blue collar middle class that bought all the stuff we made and provided the money to send their children to college so they could become upper middle-class, white collar weenies who used their skills to beat down the unions as they drove their Toyotas and BMWs to their executive jobs.